>> rose: welcome to our program. the most important story in washington this evening is continuing debate and negotiations over the budget. the president has asked the senate majority leader harry reid and the speeger of the house john boehner to come to the white house this evening to talk about the situation and see what compromises might be reached. we'll be in washington tomorrow to talk more about this story. tonight, one of the leading bankers in the world, bob diamond, talks about financial reform and the economy. >> why is barclays large, global interconnected and complex? charlie, it's because our client are big, global, interconnected.

most of the corporates we do business with do business in multiple countries around the world. they manufacture in multiple countries. the u.s. treasury were number one in issuing and trading government debt in the u.k.next, the u.s., around the world. >> rose: we continue with golf this evening, the masters tournament begins on thursday at the augusta national golf course in georgia we talk to jim nantz and sir nick faldo. >> i would take phil mickelson. he shot 63, 65 over the weekend. he hasn't been playing super until last week, peeking at the right time just as he did a year ago. he had no record in 2010 until he game to augusta and of course that was ap epic win given the state of affairs with both his wife and mother battling breast cancer, one of the great winds around here. >> there are certain shots you look at, and the circumstances, where the hole is located, and

the difficulty of the shot, will just scare you for a moment. and if you can't deal with that, then,, you know, it kind of compounds. if you scare expwrurz hit a poor shot, obviously, you're in serious trouble. it's learning to deal with that. it pushes you to the limit basically on just about every shot. >> rose: jamie oliver, the british chef scheduled for this evening's program will be scheduled at a later day date. tonight, finance and golf. as we continue. ♪ if you've had a coke in the last 20 years, ( screams ) you've had a hand in giving college scholarships... and support to thousands of our nation's... most promising students. ♪ ( coca-cola 5-note mnemonic )

every story needs a hero we can all root for. who beats the odds and comes out on top. but this isn't just a hollywood storyline. it's happening every day, all across america. every time a storefront opens. or the midnight oil is burned. or when someone chases a dream, not just a dollar. they are small business owners. so if you wanna root for a real hero, support small business. shop small. captioning sponsored by rose communications from our studios in new york city, this is charlie rose.

>> rose: bob diamond is here. he is the american c.e.o. of barclays, the british banking giant. barclays has exploded globally operating in 50 yiz kriz and employing nearly 150,000 people. in the midst of the financial crisis he was the moving force behind the purchase of lehmann brothers. by all accounts, the deal has been a huge success but there are headwind on the horizons for barclays. it faces the challenge of navigating through higher capital requirements and the propose government split between commercial and investment banking. i'm very pleased to have bob diamond at this table for the first time. >> thank you, charlie. >> rose: so what's the future for barclays and financial institutions? >> that's a good question. i think, you know, being a new c.e.o., i had to think about that more than probably most chief executives because i wanted to present what our plan

was to the investors, to the analysts, to the staff, to the client and customers. and i very much took into account, charlie, just what you said-- this is a different world. it's post-crisis, post-dodd and the theme of our plan is execution. it's very, very simple-- execution, execution, execution. and the four underpinnings to that are capital ratios, how do we get returns comfortably above the cost of equity in an environment where there's more equity in the business? how do we drive top-line growth, real income growth with the key client segments? where is our competitive advantage with client? where is the growth coming from? and lastly, citizenship. and i think one of the things i've learned through the last two or three years is that banks have done a very poor job of explaining to people how we contribute to the societies and to the communities in which we work.

so that's the theme. the theme is about execution. >> rose: but you have also said that the time of remorse is over. >> ah-ha, that's not what i said. >> rose: what did you say? >> i said the time for remorse needs to be over. >> rose: ah! >> and i think i was referring not to barclays or to bob diamond but really for the u.k., for the u.s., for government officials, for companies, for banks. it's time we focus on the things that are really, really important. we've been through a very difficult period and every bank has made mistakes. every banker has made mistakes. but the time now is to look at job growth and economic growth. and i think it's trying to balance regulatory reform-- which is to get safer and sound financial institutions, safer and sound financial system-- with creating jobs and creating economic growth. and i think it is time to pass the mantle of growth to the banks and to the companies that can drive that growth. >> rose: what did you mean by

"pass the mantle to companies and banks that can drive that kind of growth?" >> you know, i think-- we've seen a lot of stimulus over the last couple of years coming from the government. and using the u.k. as an example the prime minister and the chancellor have been very clear that the issues around the deficit, around public spending, have to be addressed. so there's a comprehensive spending review. there's a reduction in public spending in the public sector, and that's necessary. and it's important. but that means that there won't be job creation or economic growth coming from the public sector. it's going to come from the private sector, and the private sector is very strong in the u.k., but we need certainty around regulation and we need the mantle of growth passed, confidence in the private sector. >> rose: are you optimistic about global economic growth? >> overall, i'm positive, but it's a mixed bag, and i think where you have to start from, charlie, is where are we today? there's been good economic

growth, surpriseddingly good. we're starting to see some inflation. but, also, we're seeing a very cautious policy response to inflation. so i think if you look at the emerging economies, the domestic economis-- sorry, the emerging economies, the developing economies, the story is slightly different. the emerging economies-- china, india-- really were the ones that picked up growth soon after the economic collapse -- >> the first to recovery. >> yeah, first to recover so we're beginning to see signs of inflation and signs of tightening monetary policy. >> rose: on their part. >> we saw china raise rates just yesterday. >> rose: right. >> so we're probably not going to see the buoyant growth that we've seen over the last couple of years in the emerging economy. >> rose: even the chine are projecting 7%, 8%, not uble digi whi thehave perienced. >> right. so when you look at the developed economies, particularly here in the u.s., i am pretty optimistic. i think in the u.s., didn't

begin recovering until well after china and india and asia. but i think in the u.s. today, the monetary stimulus and the fiscal stimulus combined is as great as any period in the history of this country. we have zero interest rates. we-- i think it's 2 trillion in qauntitate ivease, the purchasing of assets by the feds. we had a stimulus program that came in, in early 2009. in addition to that we have the extension of all the bush tax cuts. we have other tax cuts that have been implemented. we've had the investment tax credit. so the stimulus in the economy is very strong. and i think with that has become confidence. so companies-- balance sheets of the private sector are very strong. and i think what you've seen, what i've seen is a reduction in unemployment as chief executives begin investing both in strategic deals but also in

business in the u.s.. >> rose: so what happened between the time that they were sitting with a lot of cash, strong balance sheets, in your words, and today in which they're beginning to hire people beginning to expand, beginning to build up inventory? >> i think the two key words in my mind are "certainty" and "confidence." >> rose: i don't know what those mean. >> certainty is-- you know, there was a lot of turmoil during the debates around dodd-frank. and i think with the finalization of dodd-frank, there was certainty. now there's still some questions outstanding in terms of the g-20. is there going to be add-on in capital. but by and large the regulation in the u.s. is now clear and the banks -- >> jon: even though we don't yet know what the regulations will really look like in the end because they haven't laid out the enforcement. >> oh, we're down to the details. i think by and large we know -- >> and you're comfortable with that as a major financial sector

institution? >> well, i think in the u.s., in terms of dodd-frank? >> rose: yes. >> well, i think there are still some things we're working on to improve, particularly around securetization and -- >> is that code word for we're heavy lobbying in washington to see that they understand our point of view. >> you would be shocked to hear lobby is not how i would define it. i think there are discussions on how the legislation is going to be written, how it will be codified, and i think we are providing as much expertise as we can to the people writing those rules, and i think that's appropriate. >> rose: and the other thing was confidence. >> confidence. if i go back to early 2010, i recall being on a panel of c.e.o.s on the west coast, and with the turmoil around dodd-frank, the turmoil still from all of the problems in the financial system, there was a bit of, i would say, difficulty between the private sector and

the administration in terms of a host of things, in terms of regulation, in term of where taxes were goi. that's changed dramatically. i think the confidence that the private sector has that the president has a growth agenda and that the president wants to-- wants the u.s. to invest in & to drive the economy and drive job growth is very different than it was six to nine months ago. >> rose: could you also say that somehow the skepticism about the president has been eradicated to a certain degree in terms of the business community? >> i think the important thing in the business community is that they know there's a growth agenda, and i think whether it's the fed, whether it's the treasury, whether it's the administration, it's very clear that the u.s. has a growth agenda. >> rose: everybody among developed econies worries about europe most of all. they worry about sovereign debt. they worry about lowered expectations. they worry about governments' capacity to impose austeritiy.

>> you know, i think-- i think there are still some challenges ahead in europe and the u.s. the economy is benefiting from a significant stimulus both on the fiscal side and monetary side. on the fiscal side in europe, because of the-- beuse of the debt crisis, there's a lot of focus on reducing public spending. so where there's fiscal stimulus in the u.s., there's fiscal tightness in europe. i think there's discussions-- you probably heard it today-- that as recently as next week we may be getting higher rates in europe. >> rose: right. >> so i think in europe, for different reasons, they are facing liz stimulus in the economy, and probably won't be providing the amount of economic growth that we'll be seeing from the u.s. now, i think the focus in europe is much more on debt aeficit and less on immediate growth, and i think that's appropriate

given the state government situation that they're in. and i think in the u.s. the focus is much more on growth. there are still issues around the debt levels. >> rose: what's your assessment of what's going to come out of that dialogue between the president and the congress and the republican house? in terms of getting the government back to work? >> rose: yeah. i think we'll get through it and i think the reason we'll get through it, charlie, we're debating $30-50 billion-- and, listen, these are, have very big numbers. 30-50 billion in a budget are big but the deficit this year is going to be $1 trillion. this is the third consecutive year of a trillion-dollar deficit in the expuz the real issue is what is the budget for the next 5-10 years? what is the plan for the next 5-10 years? and i think for the debate that's going on now, i do believe they'll get through this and get on to the bigger issues. >> rose: okay. bozle three. >> what wasbozle three? it sets minimum capital

standards where the minimum capital is now 7%. >> rose: is that a problem for you? >> and the definition of that capital goes up. you know, what our plan was, was to try and get ahead of regulation. and so we increased our capital levels early. and i think one of the things that is important to understand is that there has been a lot of change in banking. i don't think barclays is different than other large, global banks when i say, this but the amount of equity that we hold now has doubled or tripled. the amount of leverage we take is down 30% or 40%. the amount of -- >> down from what to what? >> the liquidity, if you adjust it, on the same basis that they use for u.s. accounting, we were running in the mid-30s and today we're 19 to 20 to one in terms of leverage. so it's down pretty significantly. >> rose: can you achieve the kind of projections you want at that kind of leverage? that was exactly why the focus is on execution. and it's on operating with the

new capital levels. and getting investors and analysts comfortable with the fact we can earn comfortably above the cost of equity with the new capital rules. and when we gave our earnings for 2010 what i said is over this planning cycle between now and 2013, a return on equity will get to 13%, and a return -- >> which is almost double what it has been. >> yes, yes. >> rose: and you can get to that through execution. >> we can get to that through execution. >> rose: you were a guy they said was not afraid to take a risk, and that you shook up the place because you were risk oriented. is that a fair appraisal? >> the "risk" word you're use ago. >> rose: why are you troubled by that? >> well, i think taking risks on people are absolutely appropriate. i think taking risk around control and governance and areas

like that are not appropriate. >> rose: okay we're not talking about control and governance. you know what we're talking about. you're talking about investments. >> investing in the business we built in barclays capital i was very comfortable with. but to your point, not many people believed we could achieve what we achieved. >> rose: what did you see? a friend of mine today said you have always been ahead of the curve and been willing to bet on it. >> well, thank your friend for saying that. >> rose: it's somebody you know. >> i think what i saw at the time-- this was 1996 and 1997-- what was clear is we were going to get a single currency neeurope and that would create a big, deep, liquid capital market that would be an alternative to the u.s. dollar market. i think what i also saw was the emergence of asia and the impact that asiand thmiddle east would have on business flows and trade flows and that london was a pretty good time zone for that. but most of all, i saw in barclays, a universal bank that had not been successful in building the global platform that was required in investment

banking, and i think that the biggest risk i took was would barclays, would the board of barclays and the management of barclays, allow us to build a culture, a culture based on meritocracy, a culture based on execution, a culture based on team work in an institution that had been around fo 300 years and really had been more domestic than international. >> rose: when you look at ford motor company, which did not have to take bailout money because they had gone out and arranged their financing and so unlike general motors they did not need to be rescued. so it was with barclays bank. you made two and received two big loans. i think it was cutter and avadabby, and so, therefore, you did not have to come under any kind of government restrants because you did not need a guaranteed capital. >> we raised it privately. >> rose: did that make a difference? >> i think it's made a huge

difference in the confidence in barclays. this is an organization that, you know, when we entered this financial crisis, it really was across the entire financial system, and barclays is one of the very, very few banks that never took any public money from any government anywhere in the world. we were profitable ever single reporting period. we were able to acquire the lehmann brothers u.s. business and standard bank in stland to add to our retail banking business in the u.k., so we came out in a much stronger position than we went in. we still have challenges, the independent commission on banking alcohol make its report on monday and things will be fine in how barclays operates after that in our view, but there's uncertainty. so i think there's going to be regulatory -- >> what would the commission say that would affect barclays in a significant way? >> you can imagine why i say this, but i have made it a policy not to comment on what

they might say or what they could say because i respect the committee. i respect what they've been asked to do and how the chairman has operated, and we've been able to give our input. i think in terms of all regulation and the three years of the work that's gone on, whether dodd-frank or bozle 3. in my mind there's three tests that all of the regulation needs to pass. the first test is are we making the financial system safer and sounder? are we preventing the fact that there should never, ever be taxpayer money put at risk? the second test is are we improving the opportunity for job creation and economic growth? you know, our business in africa say very, very good example of that. the regulators in africa are looking for barclays to bring more of our universal bank there so that they-- so they can help grow their economy by getting their small businesses and medium-sized businesses access to the rest of the world. >> rose: just below asia, you think the future is best seen in

an investment in africa. >> i think the opportunity is very good, yes. >> rose: what's good about the opportunities? >> well, when i step back and look at the opportunity for barclays, first of all, and i say to myself, where is there growth in the world and where is there real competitive advantage for barclays? africa comes right to mind. >> rose: why africa not latin america? why africa, not the middle east. asia you have already said-- >> if you start from where do we have a competitive edge, we have banking businesses in 11 countries in africa, and we're one of the top three banks in nine of those countries. but i think the thing that's most important, charlie, is that most of us think-- i certainly thought before i spent time on this that, you know, africa was the future. africa was what was coming. it's already been growing 5% compounded annually. so i think we underestimate the growth-- the economic growth that's already taking place in

africa and the amount of business that's already happening there between china and botswana, between india and zambia. >> rose: mainly about natural resources, or what? >> much of it is about natural resources but it's really about building companies, building technology, building telecommunications. >> rose: so barclays gets bigger and bigger and bigger and bigger. you have no sense that too big to fail is an issue? >> i hate that phrase "too big to fail." you can can imagine. but let me tell you -- >> did it not turn out to be true for citigroup or not, to big to fail? does d that happen? was that the reality? >> but that's not necessarily about tomorrow. and i think the important thing-- let's start with the basics. why are banks large? why is barclays large, global, interconnected, and complex? charlie, it's because our client are big, global, interconnected. most of the corporates we do

business with do business in multiple countries around the world. they manufacture in multiple countries. the u.s. treasury were number one in issuing and trading government debt in the u.k., in the u.s., around the world. you know, the u.s. debt is sizable. the amount of securities that have to be issued as you know are sizable. they're not issued to domestic investors in the u.s. they're issued to china, to japan, to india, to europe. so if the opg is we're not going to have large boston celtics, that's a pretty lousy option. if the option is do we have a regulatory system-- do we have a capital structure and regulatory environment that will allow large institutions to fail, that's the right-- that's the right place. >> rose: you in fact said big and systemic risk is not the same thing? >> the's no empirical evidce that big is bad. that's clear. i think the issue the regulators have is if a larger bank fails

and creates systemic risk. so where are we on that? and i think that's what mario derroggy and the f.s.b. and g-20 are working on. that's where you hear phrases like living wills, resolution. and we are working with f.s.a., our lead regulators in the u.k., so if regulators feel there's a problem at a large bank can walk in and be able to separate out the deposits, separate out branches, allow the banks to continue to operate for small businesses, for retail customers and correct the issues and separate the issues they see. and it's far more appropriate for to us believe the regulators can prevent systemic risk than it is for to us say that banks can't be big but our client and economy -- >> there are two point about this. one, some people i know have serious reservations about whether banks and huge financial institution become too big to run well. it's a management challenge. >>nd i underand that.

ani thk that is -- >> these are people who have done it and are serious about it. they're not, you know, someone who looks at it from afar and says, "oh, god, that must be hard." >> and we are doing it at barclays. we have building-- as the regulators have asked for-- is there a resolution and recovery plan that can do exactly what i said and our taim frame for expleeting that is between september of this year and march of next year and we're working very closely with the regulators on that. and i think this is an important part of the regulation we've seen and this is a very important thing to get consistent in the g-20. >> rose: okay, but, at the same time-- i mean, there are people who told me, also, that they backed away from sort of subprime because they just didn't understand it. i mean, it was too complex, and too-- for the bank to get into. does that resonate with you at all, that we can get so sophisticated that it's almost impossible for one c.e.o. to run an institution and oversee all this?

no. and as the chief executive of barclays, as i said, i'm absolutely committed that the way that we organize ourselves and the way that we run ourselves has to be consistent with preventing taxpayer money ever being put at risk again if a financial institution fails. and, charlie, we have to figure out what is it that we want? we don't want a system where no bank can fail. that's not the situation we want. what we want is we want a system where if a bank fails it doesn't create systemic risk. >> rose: right, exactly, it doesn't take the system with it. >> and of course we can accomplish that. were there mistakes made in the past? absolutely. and were there situations on the regulatory side and on the bank management side-- mostly on the bank management side-- where we got into trouble, yes? >> rose: suppose lehmann had not gone into bankruptcy, which caused a great psychological crash, did it not? >> yeah, and i think-- yes. >> rose: suppose it had not.

suppose like bear stearns it had been sold? >> i think there were so many -- >> would psychology have it an impact so we would not have experienced the fear? >> very hard to say. but most people point to the lehmann bankruptcy as-- is the trigger of the deepest darkest fears that came, and pushing the economy over the edge into the deepest, darkest, most global correction that we had ever seen. but,un, i think the lehmann bankruptcy has become, clearly, the trigger point for that in most people's minds. but would there have been another trigger had there not been that? it's very hard to say. >> rose: if not lehmann, who whatelse? >> there were so many other things gog and there is this, execive compensation. what should be the restrants on executive compensation for banks? >> i'm shocked you asked this question, charlie. >> rose: i'll next be quoting

peter mandelson. >> you've got them all. you've got a good list there. i think in executive compensation there have been changes and the i think the industry has recognized that we immediately supported the g-20 f.s.b. guidelines around construction of comps,ore alined with shareholders, more ability to claw back. but i think at the end of the day, there are-- there are parts of our industry and banking, investment banking being the most obvious, where balancing, being responsible with commercial and competitive is tough. and, frankly, from my point of view, this is really a board issue and shareholder issue. >> rose: so whatever the board decides or whatever the shareholder allows is okay with you? >> i don't think it's quite there. what i would say-- when i look at ever business we run in barclays, at ever single business, whichever whether it's retail banking in glasgow, or whether it's investment banking in singapore-- we're looking to balance being

responsible with being commercial and competitive. and we want every single person that works for us to be able to operate in the top tier of the people in that job, in that location. >> rose: so you want to be able to hire the best and, therefore, you need to be able to pay them whatever the market demands. >> you got it. and in some of these cases in the u.k., it's creating some friction, particularly in investment banking pay because so much of t busess in barclays capital, for example, is in new york and is in singapore, and so much of the spending-- the impact of the spending cuts is in gas gou and manchester. >> rose: why did peter mendellson call you the unacceptable face of banking? >> well, you know i called him and asked him exactly that. i had never met people before that and he also said we did nothing but shuffle papers. to peter mondayleson's credit, i called him-- two kmentss i would

make on. one is to give peter credit. i said you dont know enough to have said that and you need to come in and i'll set up a full day's training program and you'll go desk to desk and we came in for four hours and spent the time doing it. with credit to peter he came and and said let me understand more. >> rose: did he change his opinion whether you were the unacceptable face of banking? >> since i'm the only one here, absolutely. i think the other thing, charlie-- it's interesting because i think the peter mendelson thing goes right to the heart of this. the business i'm in, banking, is global. finance is global. the financial markets-- we've seen it-- is global. the economy is global. elections are local. when there's an election in the u.k., people are focused on domestic issues, and they're not going to be concerned about the 70% of barclays business that pratss around the world. and we saw the same thing here in the united states. when we had the blanch-lincoln

derivative push-out amendment, i think that was more about a primary election in arkansas than it was about should derivatives be -- >> in that case you could make that case. in that case the arkansas's senator race-- >> so i think the friction,-- and certainly there were a host of issues going on-- but the friction between the local nature of an election in politics versus the global nature of business and economies is one one of the things that is underlying this. >> rose: when you look tv future-- we've talked about the opportunities in africa, asia, in latin america, united states-- it what worries you? >> you know, i think there's a lot it play for here. and i think as the chief executive of a bank, getting certainty and getting confidence. so getting certainty means on regulation, the three principles that i talked about that we can draw a line under that and we can get the confidence for the banks and companies to begin working together.

it's very difficult for the banks to be aggressive in their lending to small and medium-enterprise businesses, for example, if we're not sure how much capital we have to hold. so, listen, here's another thing that really important around relation. strong banks want strong regulation. r you know, for barclays, who didn't take government money, the fact that there were failures of other banks in the united kingdom, and two of the biggest banks in the u.k. have a lot of government ownership still, has had a negative impact -- >> 8%, isn't it? >> in the case of world bank of scotland, that's right. so we want strong regulation. the sooner we can finalize the rules, draw a line under it and move forward the sooner we can focus on gting the economy going and create jobs. >> rose: thattedly undo some of the uncertainty, and confidence will come from watching the economy grow and that will produce more confidence. >> and i think we're already

seeing it in the u.s.. >> rose: as i think it was larry summers who once said that confidence is the most-- is the cheapest stimulus you could ever find. >> like that. >> rose: thank you very much. it's a pleasure to have you on the program, and good luck. >> thank you, charlie. >> rose: the 75th masters golf tournament tees off tomorrow morning from augusta national golf club in georgia. joining me is sir nick faldo, three-time masters champion and analyst for cbs. and my friend jim nantz, the voice of the masters. this is his 25th year and he will be kaug the action for cbs. i am very pleased to have both of them on this program as we preview the masters 2011. welcome. >> thank you, thank you. >> good to be with you, charlie. >> rose: both of you tell me about this tournament in terms of location, specialness, tradition. what makes it different?

>> i defer to the three-time winner of the green jacket. >> what makes it different? we get a little green jacket which we're all very proud of and that's one of the traditions that makes it so special. and, obviously, coming back to augusta national in springtime. the vistas, the faire ways, the trees. the patrons-- everything and the whole ambiance of it and the whole routine of the week. the par 3 tournament is going on right now which is very special. it's all those things. and in fact we have a players' locker room and then you elviate vait to a champions' locker room and it's cute and quaint here. all those little things make it incredibly special. and obviously then you get to play the golf course. and, you know, it is a fascinating golf course. you have to learn to master takeover the years. >> it's a golf course, everyone knows, one of the best in the world, charlie. and of course you have all that

history and tradition, and of course it started back in 1934. it was after, say, the haigen era of golf. and of course bobby jones was the man who founded the tournament. but from that start point, this, by the way, being the 75th masters ever contested this year-- virtually every great player in the game won this tournament. of course nick won it, as i said three times. just a few rare exceptions, you know, who didn't win it. greg norman came so close. lee trivino who had a very big stretch of a career. but you go through the name, nelson and hogan and steed and wood and mickelson and nick fald it's list of champions. you don't get fluke winners here charlie. you get big-time talent winning this tournament. >> rose: what kind of game suits this course, nick? >> yeah, what kind of game? well, the most important thing now you have to be a pretty strong driver. i think if you're very short

coming into these greens with a lot of club is very difficult. the guys who are at least medium to long have the favor. the most important thing is accuracy of the second or third shots. we really have the smallest margin of error and no exaggeration. two paces probably short of the flag, a couple of paces after. if you come up, you know, more than six or eight feet off that, it hits the slope and it heads off down or it ends up on the back of the green, and you get these downhill putts and then you have to be able to putt the greens. you have to be able to read the greens. you know, they're running, as always, extremelyuick, and it gives these massive breaks. you might only be 20 feet from the hole, but you've got to start looking for feet and six feet, maybe eight feet, and sew that's all part of it. you have to have great touch. and one more factor is the fear factor, the scare fact our as i

call it out here. there are certain shots you will look at, and all the circumstance-- the pond or where the hole is located, the difficulty of the shot will just scare you for a moment. and if you can't deal with that, then, you know, it kind of compounds. if you scare yourself and then hit a poor shot then, obviously, you're in serious trouble. it's learning to deal with that. we all go through that. it pushes you to the limit basically on just about every shot. >> rose: but you like this year luke donald. >> i do. luke donald for me because, you know, we look at-- we have a thing on total track man, and they have an accuracy test, and he's the best, most accurate golf or tour. at the present time, he's leading the par 3 so it might absolutely be a jinx about that. nobody has ever won the par 3 and gone on to win the masters. i defeated ray floyd who won the par 3 back in 19 inconsistent. so why he's gone and done, that i don't know. we ought to give him a swift

chop for doing that. it's a serious mistake. you so, no, saying that, luke is very good, putting great. the most other important thing is you're going to get a lot of 4, 6, 8, 10 for par, and you don't want to scare yourself and you don't want to use up a lot of calories, a lot of energy. you just have to keep doing them-- okay, fine, i may have meased up, the speed of the green got me and i rushed one, 8 feet past is not as bad as it found on these greens. but you have to knock it back in. and for me right now he's one of the best putters on tour. >> rose: there's also much talk, jim bphil mickelson coming in after a history in houston. >> well, if i had to pick a player right now, i would take phil mickelson. he shot 63, 65 over the weekend in houston two, really dominating rounds. he's hasn't been playing super until last week, peaking at the right time as he did a year ago. he had no record in 2010 until he came to augusta and that was

an epic win given the state of affairs with both his wife and mother battling breast cancer, one of the great wins ever around here. and he knows how to play this tournament. if he won, it would be his fourth grebe jacket which, interestingly, would pull him even with tiger and arnold palmer. and i think it's coming together. but handicapping a golf tournament is a very difficult thing to do. i do think that this week, players have been talking about how long the course is playing because there was a lot of rain here last week air, little bit of rain tuesday morning, but the forecast is supposed to be very, very hot. >> yeah. >> and dry. so the course is going to be playing what we call fast, tow so it could bring some of the shorter hitters, i believe, no into it. we've had year where's it played rock hard and a guy like zach johnson would win. and i think this year, given the warm weather, the dry weather-- it's going to dry this place out-- i think this could be a year where it's not going to be one of the bombers who could contend. you know what's interesting, charlie, before you asked the

question, we are now six or seven questions into this. if this was a year ago, the first, second, third, and 15th questions and on would be about one guy. in every interview we've been doing in the days leading up to the tournament, tiger right now is so far off the radar going into this tournament we haven't talked about him yet. i know that's the next question, though, wasn't it? >> rose: put tyingener perspective. >> for me there's a thing called nerve. when you come to play this golf course, even tomorrow, thursday, there are shots out there that will scare you, the six hoel, and the par 3, down the hill, wind is swirling, clear blue skies, very difficult to get wind direction, you have to land the ball on the size of a dining room table there, and the second home, another shot that will scare you. for me right now, i don't think-- you have to have 100% belief to play this game. and i believe right now-- we've seen enough really funny shots from tiger, both left and right, that basically he's out of his

mind or bode physically, getting in the way so he cannot get through impact how he would like to. that's wh starts to chip away, that 100% self-belief. if you see this too many tirjz the 100% comes down, 95, 90%. and when you face shots like that, these real ones, real key ones, then the demons-- this little fella sitting on your shoulder suddenly says, "hang oi'm not so sure you can pull this off right now." and that makes you nervous. if you don't pull it off, if you scare yourself before you hit it and can't deal with it and then hit a poor shot that compounds it. then you get to the next one and guess what? you'll be faced with the same problem again. it's learning how to deal with the difficult life, difficult stance. visually very difficult. there are all these things you have too 2 deal with. that's why this golf course is so special because of the mind games it plays on you. you stand there for a long time looking at the shot and more often than not you scare yourself. >> rose: do i hear nick saying

it's not his swing, it's his head. >> yes. that's what you're hearing. but another component to that. there's a thing that's whereon of those intangibles in sport, and i see it sometimes, and any one of them-- football or basketball, but particularly golf-- will, the word "will." tyingener his prime had an ability to will the ball into the hole. he could stand over a 10-footer and he-- he knew he was going to somehow find a way-- it's like a guy standing at the freethrow line and knowing how to will the ball through the basket. tiger used to have that. that will to get the ball in the hole. he doesn't have it. he doesn't have it now. >> i call it "make it happen." if you have that fifth gear or sixth gear so you can really turn it on, tiger had that in abundance. he would make things happen. now, i even heard him talk so far this year, he's tried to make things happen and it's actually caused him to hit

poorer shots. it's very interesting that trust has been chipped, has been cracked-- >> nerve here, don't you agree, is sdpodz-- by the way, tiger could certainly come out here and one week turn a switch, maybe tap in it on to what he used to be able to do and hold up for four days but for all the players, if you're a little bit off with the nerves, this place exposes it more than any other place. >> it finds your weakest point very quickly. some guys don't even get to thursday. so that's the wonderful thing about it,ing who can hang on to it for as long as possible. >> rose: is it also true that tiger today doesn't intimidate others so, therefore, they're more likely to do better in the game, especially if they're nay round with him? >> well, exactly. this all happened last-- the way i've tried to analyze this is i believe in the past that players were using energy because wreerp watching leader boards. as soon as you saw tiger and he

went to the top of the leader board, you were watching him. you watched him come on the range. how is tiger swinging? what shots is he hitting? guys would use energy, generate it towards him. now they don't need to. they all know tiger has enough problems dealing with tiger woods so they've gone, okay, i don't need to worry about him fair while. i'll worry totally about my game and it's like drafting, isn't it nnascar. we've suddenly seen a dozen guys bacallthink it's a great opportunity for me. we've got all these young sterkz all these yungz kids coming out a lot of entertaining guys on the tour now. and they've gone wow. once one does it you have the wonderful chain reaction thinking if he can beat him, i'm as good as him and i can do it as well. we have snowmobile effect where they all know that tiger is dealing with his own thing so concentrate on your own game.

>> and tiger also, the next layer to that, is he knew that he had that advantage over them. so they now are aware-- the whole psychological game, which sir nick in his prime was the absolute master of that, too, when he was playing is that it wasn't gamesmanship, but, boy, no one knew how to read him, and his record certainly speaks for itself, how he was able to win in big, big spots. >> rose: but if i remember my golf history, sir nick, didn't you take a year off to go work with david ledbetter? >> in fact i took two. it was very painful. yeah, i went for-- i did a crazy thing. you know, in hindsight, you'd never do it like that, by the end of '84, i'd blown up in our open in '83-- not so much a

blowout, couldn't handle the back nine. i played here in '84 when ben krenshaw won, and so that was a learning lesson as well, saw what i needed. and thought maybe i don't have that. so by may of '85 i was with nick ledbetter and it was two years before i won game gwen. in spain i won the spanish open and in july one our open championship. i wouldn't advise to do it mid-season. there's a far easier way to do a rebuild. >> rose: what does that say about rebuilding? >> swing. >> rose: to rebuild a swing you have to spend a large amount of time. >> i had a lot of doubters. i had sponsors pulling out. i call it the dark days. just a few people, because i was a crazy fanatic hitting golf because and i suddenly thought--

got a new idea and disappeared. i used to come back to my dear wife and say, is my dinner hot?" and she would say, "only if the dust bin is on fire." things were tough in those days. i go through it-- i don't know how when i think about it, i don't know where i got that, just to keep plugging and that determination to think i was going to make it. i really didn't doubt it. i just knew it was hard work. >> rose: why can't we assume that tying ker do that? >> tiger more than likely will come back with nothing like the certainty. before when he got to the top of the leader board he had the most ridiculous stats. 14 marjz, he was leading after 54 and wins. so that is unlikely to happen quite like that. there's nothing-- that's really what he's lost, the absolute dominance of the game. sure enough he wants to find a way to win again but he's going to go-- like we all do, go through the ringers and finding

out moment where's it's not going to be so certain. who knows how it will unfold but he's still a determined man. he doesn't want to roll over. >> rose: jim, who else-- who else should we be watching, jim? lee westwood? >> well, certainly lee westwood. he made a run at the green jacket last year. he's been so close in so many majors. i'd be watching him. ricky fowler will be here. i'll be excited-- ricky fowler needs to get the breakthrough victory. >> early days here. >> but-- >> a lot of guys are playing really well. hunter mayhem. he's great from 30 feet out. >> matt coucher. no one talks about him. he played with tyingener '98. >> he's coming in under the radar. he's not having all the press. you even have something like nick watney, played great, really solid under pressure

those last few holes at doral. could be very important things like that. >> this is where the game is now charlie. this is after an incredible, indescribable run by tying they're lasted a good dozen years where you went into every one of these tournaments saying can anyone beat him this week? in the last year, the game has gone young and it's gone global and it has spread out so wide, that that's what also makes this tournament, this masters tournament so extra special. we're ready to identify who is ready to take hold of this game. i know kimer is up there at the top of the world reasoning. even though phil is coming in off of a win, who is ready right now to say, "wow, when we go to the u.s. open, this is the guy to beat?" it's been eight months since we had a major contested and now they're ready to put it out there on the line and win it. >> rose: when you look at the field, do left-handers have an advantage at augusta? >> phil said he does.

he may have-- maybe. i think, you know, some guys-- a lot of guys are very comfortable hitting a power fade, the little soft fade, and to get an advantage here on quite a few tee shots, maybe downtown second maybe a little bit up the eighth down the ninth, down the tenth. a little bit 11--11's got a lot straighter. definitely 13, definitely 14. and even a little bit of 17. you're right. you're thinking. you have to hit that little-- phil, if you hit the blocky fade it's probably easy to do. under pressure, i think more guys lean towards their natural tendancies to be a fade. but to just turn it over under pressure consistently is sometimes tough. and phil feels that being a lefty, it's just a different degree-- he's feeling confident. i just spoke to him just outside

the clubhouse. he's thinking with drivers. he's thinking of going with two drivers, in fact he had three in the bag. and i was joking with him, what club are we going to get rid of. he said i'm driving so good i'll probably go back to just the one driver. so, yeah, he's confident. >> rose: lefties have a good shot. let me end this, jim-- >> four of the last seven have been won by lefties. >> yeah. >> mike weir and the three by-- >> those were the stats of the europeans way back. >> rose: jim, you're also going to do at some point there a tribute to jack nuk las' great victory. tell us about it, why it was so monumental in the history of golf. >> it was 25 years ago this week when jack won that historic sixth green jacket, my first masters telecast. and i can still remember-- talk about it fear, it also include the announcers by the way, especially when you're 26 years old and you're wondering how in the world did they entrust me to

be here. there's been a lot of talk this week about jack and that landmark victory that at the time when he was 46 years old it was inconceivable that someone could even hold up for four days. it doesn't sound-- now that i'm almost 52-- what's the big deal with 46? but 46 now in golf is a whole lot different than it was back in 1986. jack had so many big moments around here. no one else has five. he hat six. tyinger and arnold have four, and maybe phil will pull up even with him this week and the one he had in '75, which we will rebroadcast on sunday, before the final round of the masters, can. hey, jack, it's always great to see him anywhere but when he steps on the first tee thursday morning with arnold palmer and if you're a little bit into nostalgia, like i am-- a whole lot-- that's my favorite-- i don't care what you can throw at

me, that's my favorite sporting shot of the year, the first shot. sleep over, bring the sleeping bag. i don't want to miss it. arnold, i talked to him just a short while ago and he and jack will get the tournament started in grand fashion for sure. >> rose: before i go, nick, didn't you say you don't think tiger will match jack's record of 18 majors? >> yeah, well, as you can imagine, we're always asked-- right now, with what we know, i'm going with a no. but, of course, as time goes on another year, and he wants to do it and he'll find-- maybe he'll find a way. right now what we see with tyinger and everything around him-- five more majors and that's better than most years out here. not too many out on the golf course right now with that many majors in their career at all. so that's why i kind of lean in that direction. and all these youngsters have come along and there are a lot

of young guys. we also have a window, you know, and tiger, we said-- he's now had his major window, what's that, for 12 years now-- >> he had the one one in '97, starting in '99 was really the dominant stretch. >> a lot of us get six, eight, 10, 12-- jack had a 15-year window. so it just shows you he's getting close to-- certainly on the latter end of that window, you believe, of your absolute best. and, yeah. bottom line, it's-- it's. >> it's a no, wouldn't you say? >> it's an unbelievable feat. nothing is impossible, but my little barometer is leaning that way. >> i think there's a chance. and the way i look at it, if you-- if the knee can hold up, the left knee which has been surgically, you know, gone through what two or three operations at least. he's 35. if you give him-- we just talked about jack being 46-- >> you're giving a big window

now. >> i'll give him a big window, but i'll give him 10 years. 10 years, four majors a year, 40 shots at winning four to tie, five to win. can he win five out of 40? i think he can do it. i really do. >> he has to get one, though. the next one will actually be his best one since he won-- >> that probably was his best one. the next one-- that was a physical victory. the next one will be his best ever mintal victory, put it that way. >> rose: thank you both. jim, great to see you, nick, great to have you on the program. >> thank you, charlie. >> thanks so much. captioning sponsored by rose communications captioned by media access group at wgbh access.wgbh.org