the new york fed itself said that, you know what the option to this was? you go bankrupt. >> that is exactly what the new york fed said. there is no merit to the allegations. but, you know what, the interesting sidebar to this was what hank has been saying since 2011 when he filed these lawsuits. his investment vehicle, look, the problem is that aig was used as up -- there is a response. he is saying, wait a second. used as a backdoor bailouts for goldman, a deutsche bank, and general. it is an interesting position to take because what happened was, your member in that dark days of september 2008 when a add g collapsed. the thinking was of the treasury secretary tim geithner said if aig folded, collapsed, the world economy would bein dire straits. the u.s. economy would be in dire straits, and the retirements would direct. it needed to bailout. and what happened was, behind the scenes, yes tall wall street firms, lot of money out of aig to settle derivative contracts. by the way, erotically the controversy now is that even though the derivatives were cooked

c-span: if i worked at the new york fed come up with a check from the federal government? >> guest: is an interesting question if it isn't clear about. preservice part of of the federal government. the new york fed is this quasi-public institution that served in litigation when they were trying to be back disclosure requirements under the freedom of information act. obviously they're involved in carrying out public policy. having to check says new york fed and they are funding ids they collect from banks within a district as well as money they earn from cutting a governmental function. that is sort of an interesting problem with the system is that it's not entirely clear. mostly they serve primarily a government function i would say. c-span: you are going to serve the same old bill burke did for you for somebody coming to you now and saying i'd just been asked to go into future crisis to be an inspector general. what advice would you give them? what would you want them about? >> guest: stay home would be my first one. if you do go read, understand, and something i did not a

soldier on the taliban well yeah and at the time timothy geitner was the president of the new york fed so he was the one responsible for regulating these banks not facilitating their crime wave and he went on to say and by the way the rally yesterday the one we just showed in the chart. i'm forced to be suspicious of it being ignited by a leak short covering in the financial zone i'm not so sure anymore maybe more like someone being tipped off right well the phrase market making is used by employed blankfein or j.p. morgan we saw this with the london whale loss in london j.p. morgan puts on thousands of trades and the ones that are profitable they cherry pick and they stick in their account the ones that are losers they put the government account that put in a pension account they put in some poor schlub customer town and this goes on without any interruption until such time as there is a bit of a mix up and they have to declare some kind of a loss but this is what i call that a juror is observing he's saying that there are thousands of trades out there they're all bogus they're all be

their discount window support the asset backed commercial paper market my understanding was that new york fed president timothy geithner had discussed a reduction in the discount rate with these banks in connection with these initiatives so again the lead up to this august sixteenth six pm two thousand and seven conference the markets have been tumbling. many people were short so the options on the other side would have been very cheap but because everybody was short including our friend karl denninger we'll get to him because he lost thirty thousand dollars on this move. now at the time however so they would have made a huge profit on having inside information about something that was going to be done that nobody else in the market was anticipating member interest rates had not been cut for over a year at that point well to the list of people on the first call basis from geithner would be of course warren buffett who is a big holder of bank stocks and is a guy people call from the government when they are making these types of moves so here we have a publicly listed company war of berkshire

the credit markets got tight and at the fomc meeting on september 18th that year, one new york fed officialcted that the subprime crisis could cost banks 100 billion to $200 billion. we know though that washington eventually ended up investing 245 billion in banks through the tarp bailout. the fed was also forecasting at that time just a 5% drop in housing prices is over two years. but we know now that trillions were lost in housing and stock market values. two fed members at the time were very, very worried about a serious downturn. fed governor janet yellen saying quote, a big worry that a significant drop in house prices might occur in the context of job losses and this could lead to a vicious spiral of foreclosures, and other bad stuff. cleveland fed president sandra pineault feared potential rapid deterioration in the economy. they were both right. others did not appear as worried and panicked back then. federal reserve chairman ben bernanke and another fed governor, fred mishkin both mentioned the "r" word at that meeting, recession. at that meeting fed members approved a big cut in s

>> guest: tim geithner is the president of the new york fed during the years when regulation became extremely lax in this country for financial institutions and particularly new york, citibank was the purview of the new york fed and obviously not paying attention because citibank became one of the biggest nightmares of the bailout brigade. so tim geithner was really at the creation of this kind of belief that banks could set their own capital standards, which are riveted for a wonderful thing that spreads risk and financial innovation was not to be stopped. there's all this kind of mindset really came down from greenspan i think, who said it really was anti-regulation, not interested in making sure that financial products that were sold to people were not going to go up on them five minutes later. and so, there was a tone that bankers would never do anything so silly as to take the risks that would load themselves up. that is greenspan's notion in his later apologized for saying you just can't believe they didn't understand they were taking these risks. geiger was a big part of that mindset a

what's your take on mark's concerns, and we should point out that a handful of leaders at the new york fedater became goldman sachs leaders, right? >> well, what mark is saying, maria, is accurate in the sense that it does show failings at the fed. the trouble is it also shows the opposite, mark, and i'd be interested. as you read these transcripts, the integration of banking regulation and monetary policy eventually becomes made and the necessity of it becomes obvious, that the guys who are getting firsthand information on the banking system, once they are able to see it, it's not immediate that they can see it. once they see it, the need to respond and the ability to respond using monetary policy is quite manifest, mark. >> what do you think, mark? >> i certainly would be fairer to say it's not like the fed has learned nothing from the crisis. >> right. >> this is one of the things that they have learned from the crisis. they are also including economists and the examination teams so that when you go into a bank you try to take the macro economic risk at play. again, i mean, to me you lo

in 2007, bill dudley, new york fed president at the time, head of the new york fed's operations deskave done quite a bit of work trying to identify questions surrounding bear stearns and can country wide and commercial paper programs. there is some strange but so far looking as if nothing is imminent in those areas. both institutions go on to have serious trouble and fail. this is days before an emergency meeting called it address the financial crisis. one of the more interesting threads is the transformation of fed chairman ben bernanke. from hawk to dove. my own feeling is that we should resist a rate cut until it is clear from economic data and other information that is needed. i prefer to avoid giving the impression after bail-out or put if we can by december he was saying, in proposing the liquidity measures there are usual hazards and so on in my view at this point the imperative of helping markets function more normally and support economic functioning is stronger. putting more hazard decide there. it is clear from transcript, to be fair, response spo tot crisis of decades, do

tim geithner, from the new york fed, if you look at some of the agreements the new york fed was enteringyou see geithner's signature looks like nothing he has now. so lew's signature i think you saw there, if you can call it a signature which the president commented on, said he will have to work on that and the precedent if his guide he will work on it. lori: handwriting coach. geithner changed his signature too? i didn't know that. >> yep, yep. lori: rich, thank you. ever forget to change your medication? that is serious. well there's new technology now to help you remember. up next the ceo and founder of nan works tells us all about it. ashley: one of these iconic monopoly game pieces, are we seeing them? there they go. get rid of the iron. you can help decide which one will be booted or ironed out. we'll have the details. lori: very good. ♪ . lori: remembering to take your meds might not come so easily to some folks. up to 50% of patients do not follow their medication schedule but, new technology could help with that. joining me is dr. patrick founder and ceo, the developer of the vi

five in one nine hundred fifty one nine hundred sixty four in germany to store gold in new york at the new york fed because if they had a trade imbalance with america they would just settle there through the bank or settle it with the u.k. via the bag but now since one thousand seventy one it's really bad there's no point for them to really store so much gold in the central banks so now they say to this end now that they have all the storage they say it's just a storage plan remember the biggest bank is planning a phased relocation of three hundred tons of gold from new york to frankfurt as well as an additional three hundred seventy four tons from paris to frankfurt by twenty twenty this means they're taking their percentage of their gold held in france to zero and they're reducing their holdings in new york by twenty percent because right now they have fifteen hundred tons there so over the next seven years they can bring forty tons a year back now since two thousand and nine central banks up and buying gold reversing a forty year trend and i would expect germany now not only to be repatriating g

aig repaid last of what it owed on the bailout that was engineered by the treasury and the new york fed of the financial crisis in 2008. now, the board's decision follows a board meeting this morning where the new york fed treasury and others presented their points. robert steve miller said the board fulfilled its fiduciary duty and the board reject it had entirely meaning it won't pursue the claims on its own or allowing greenberg international to pursue the claims in aidentifying's name. the ceo from 1967 until 2005, greenberg's long criticized the government's handling of aig during the financial crisis. his term filed the suit on behalf of other aig shareholders, the suit claiming, among other things, the firm's investors weren't properly compensated for the 80% stake the company took as collateral for the rescue packaged back in 2008. calls for clarification on the decision were not delivered. back to you. >> joining me right now in an exclusive interview, ceo benmosche. thanks for joining us. >> thank you, maria. >> very important time for the company and shareholders are out ther

geithner was part of the rescue at the new york fed before obama was elected and afterwards. if they've been selling shares of insurance company, i.g., dodd-frank has been passed. this is moving solidly on the fiscal thing and i think the third thing is that jack lew really is a creature of washington. ironically, he worked at a bank, he worked at city city bank. timothy geithner never did. although everybody in the country thinks he once did but i think jack lew is known as somebody, as a tough negotiator, he worked for tip o'neill, he has the confidence of the liberal democrats in congress who are needed so it shows the president's adversary will be in the beltway, in congress. gwen: he's a creature of washington, he commutes home every week. >> he mentioned queens. when he became the director of the office of management and budget, he replaced peter orszag. he took down the portrait of alexander hamilton who orszag had hanging in his office and replaced it with w.p.a. posters from new york city. >> you're talking about what a tough negotiator he can be and obviously that's

tonight, the new york fed telling us, "there's no merit to this suit," saying, "back then, aig's board of directors had an alternative choice to borrowing from the federal reserve and that choice was bankruptcy." had there not be taxpayer help, had there not been a bailout, what would the shareholders have now anyway? >> they would have very little, possibly zero. >> reporter: a $25 billion lawsuit has already been filed by aig's former ceo, hank greenburg. aig issues a statement tonight, saying under law, they must consider the suit. it is their obligation, in their words, to determine what's in the best interest of the company. i did ask to interview some of those aig employees, saying thank you america, diane, the company today declining our request. >> i bet that company gets an earful. thank you so much, david. >>> and still ahead right here on "world news," how many calories do you think are in this meal? can you trust what it says on the menu? we take these dinners to the lab, next. we know all your investments may not be with fidelity, but we can still help you see your big pic

he is head of the new york fed. ll versed in the new york currency and you have a life long budgeteer. can i add to that? i want to say something about out going. i have the highest regard for them. his financial knowledge was excellent. his knowledge of the whole banking arena. and i'll tell you this too, while i disagreed with him on fiscal issues. he and i had a great personal relationship. what i understand is, he does not have a personal relationship and doesn't know how to deal with people on the other side of the i'll. and that on top of his personal experience to me makes this a poor choice. >> on financial experience i'll grant you some points. this is a guy who has been negotiating complicated deals for 20 years. on the hill in the reagan years, and because there were these tough opepisodes, i would reall take that off your list. >> according to that book, he helped sabotage, he was the guy, he was the guy jar red who sabotaged the talks last year by coming in with the last minute tax hike deal. >> he was n

when you look at his experience package treasury and then the new york fed and in between at the worlde had a very extensive rolodex. jack lew contacts are very much washington peace center. that lack of experience, especially in a crisis situation and the ability to pick up a phone and call somebody to have a relationship already in place -- look, you will be able to build those relationships over time. cheryl: i have seen that he would have to lean on bernanke quite heavily because of his lack of experience. he did run the budget management two times he was up there under clinton. again under president obama. does this please help him and that debt ceiling debate which he will be a key figure in if he is nominated? >> i think the president is nominating him for the debt ceiling, entitlement and tax reform debates. this is exactly why jack lew is being capped. cheryl: jack lew has come out in the past and spoken publicly about debt reduction. that does not seem like something the president wants to address. he will be looking for more revenue to address the debt ceiling. can he effect

you say he brought tim geithner to the treasury, out of the new york fed. you write, 'tim played a staff role, and had been the mechanic of the bailout programs. hank and ben treated him like staff. he had been elevated for all the wrong reasons and had every expectation tim would continue his citigroup friendly policy." did he continue the citigroup friendly policy and did they make out better with him as secretary? >> there is no question. the government was quite generous. just about every mistake in the book -- >> bob rubin was worth millions and never punished in any way. >> i don't get it. he shows up in conferences and in -- i can tell he never really accepted responsibility for any of this. he helped create the beast and he was secretary of the treasury and to go become the chairman or executive chairman -- a beneficiary of this major change, it was terrible. >> another piece you were involved in, suzie ormann and sheila bair. >> ever lose one of these? everyone has except those whose money is in the fdic. good to know in times like these. here's th

you know, you may have disagreed with tim geithner, but at least he ran the new york fed.rs, the wall street bankers, the issues. of the company's work. what is he going to tell us? i think it is rare for him to be in charge of the treasury. >> he has a great head of hair, which for i am calling from counts for a lot. [laughter] >> obviously has the confidence of the president of the portfolio, the treasury, the secretary of the treasury is enormously crucial. and one would hope that we are going to get the that we need all the things we have talked about, the segment on entitlement reform, the gst, the growth pattern in this economy which is absolutely appalling. gerri: and the labor department, the leaders in that, the positions are opening up. it will be interesting to see if that woman is replaced by a fellow. thank you for coming on. great job. thank you. >> thank you. gerri: now the latest developments on the story we brought you yesterday. aig. now, the company itself will not be joining a $25 billion shareholder lawsuit against the u.s. government over the terms of

he doesn't bring the former new york fed chairman like secretary geithner and other very prominent people that we've had as secretary of treasury the premier financial position in the united states government more important because our president has no training, and really no understanding of class classical business and economics. >> jennifer: and an unnamed congression nat source told the "washington post" jennifer ruben that lou was the one to screw up any dales deals and proposed lefty positions, whatever that means. and, we don't need a treasury secretary who thinks that wall street deregulation was not responsible for the financial crisis. we need a treasury secretary who will work hard to break up too-big-to-fail financial institutions so well street cannot cause normassive financial crisis. but, are there enough lawmakers who don't approve of lou to scuttle the nomination? i say no way. coming to us from washington, d.c. tonight to discuss this story and more about president obama's second term cabinet tad divine. welcome to "the war room"." >> good to be here, governor. >> jennif

ashley: the interest rate for aig a lot higher than -- >> new york fed by the way saying there is noons. aig had alternative choice, bankruptcy. big fight going on. sandra: it continues. liz macdonald we'll continue to follow that story. ashley: thank you, emac. mcdonald's getting a name change. sandra: huh? ashley: we'll tell you where. in a minute, bruce. good day. ♪ . music is a universal language. but when i was in an accident... i was worried the health care system spoke a language all its own with unitedhealthcare, i got help that fit my life. information on my phone. connection to doctors who get where i'm from. and tools to estimate what my care may cost. so i never missed a beat. we're more than 78,000 people looking out for more than 70 million americans. that's health in numbers. unitedhealthcare. at legalzoom, we've created a better place to handle your legal needs. maybe you have questions about incorporating a business you'd like to start. or questions about protecting your family with a will or living trust. and you'd like to find the right attorney to help guide you a

you want in office during financial crisis like you had with geithner with his experience at the new york fed? not really viewed as a banker. doesn't know finance man sters. that can be cured. of course republican opposition, tyler, i will tell you, there was a story in bob woodward's book in change boehner said, don't give me jack, lew. he said no, 999,000 out of a million. of course john boehner's opinion doesn't matter. he is at the house. has to be confirmed by senate. i believe it was unanimous or thereabouts. >> i don't mean to betray the house secrets here. do you know, lew, at all personally? >> i've ml met lew a couple tims pip know him as a guy whose been in the saddle during that, not afraid to use government -- >> where is geithner likely to end up? any ideas? dartmouth? >> a lot of talk about that. i don't see him going to take a big job at a bank though certainly after all of his years of public service you would think there is a massive temptation for him to cash in. >> let's talk about what is really important here np jack lew's signature. >> oh, yeah. >> lets dee some handwri

the new york fed telling us, there's no merit to this suit, saying back then, aig's board of directorstive choice from borrowing from the federal reserve and that choice was bankruptcy. had there not have been a bailout, what would the shareholders have now? >> possibly zero. >> reporter: a $25 billion lawsuit has been filed by the former ceo, the company saying it is in their obligation to determine what is in the best interest of the country. >> that's wild. why start that thank you america campaign? that's a mixed message. >> they're saying the terms of the bailout were unfair when many say it was too generous. i remember that. we were all reporting that and talking about it. >> oh, aig, omg. >>> coming up next, jimmy kimmel's new time slot and his smashing guest. >>> and inside kim kardashian and kanye west's home. we'll share the price tag and get a peek inside coming up next in "the skinny." in "the skinny." fwlarn ♪ skinny, so skinny >>> skinny in the house! >> good morning, willis. big night for jimmy kimmel last night. taking over his new time slot at 11:30 here on abc. congra

greenberg and lawyers from the treasury and from the new york fed and then they're going to decide inouple of weeks. and aig actually put out a statement this afternoon saying we're still very thankful to taxpayers for the money that they gave us and helped us survive, but we also have this duty to shareholders as well. >> greta: they have a fiduciary duty to shareholders, but if we hadn't bailed them out, they wouldn't have a fiduciary duty to anybody because they'd be in the gutter. there's such thing as the bottom line and hope they have enough sense, i'm happy for the american taxpayers, and i'm taking the last word on that. thank you. and the federal government face ago money problem, turns out the federal government is going to run out of money sooner he than we thought. mid february. what about our credit rating? that's just starters. and eric hill joins us, nice to see you. we've seen the debt the end of december, now what. >> timothy geithner is taking extraordinary measures to prevent the u.s. from defaulting on obligations such as social security benefits and tax refunds an

tomorrow to decide whether it will join the former ceo hank greenberg in his lawsuit against the new york federg claims the fed used the bailout to save wall street banks at the expense of shareholders. he also calls the fed a lone shark claiming it charged excessively high interest rates. the current a.i.g. ceo says a.i.g. has paid back its debt to america with a profit and we mean it when we say thank you to the american people. at the same time, the board of directors has fiduciary and legal obligations to the company and its shareholders to consider the demand services on us and respond in a fair appropriate and timely manner, blah blah blah blah blah blah. the white house spokesman jay carney today declined to comment on the possible suit but defended the bailout. a stunning sign of super storm sandy's devastation at one new york airport where damaged cars and trucks have taken over the runways. some 15,000 damaged cars and trucks lined up bumper to bumper creating one massive parking lot. and they are just a frasks the estimated quarter million cars and trucks storm damaged or destroyed

the new york fed has one. we have twitter and facebook. we are moving along here. so, we are still a little bit old-fashioned. i think the social media does provide a convenient way to communicate the way -- communicate quickly and strange ideas. -- exchange ideas. some positive developments there. >> we should encourage you to follow the tigers. unfortunately, we are out of time. i would like to thank our questioners for posing the questions. i would like to thank all of you in the room and online for joining us in today's conversation. you can find information at the ford school on our website. i hope you'll follow us. >> several live events this morning. the council for science and the environment discusses disasters in the environment. the discussion will focus on the lessons of hurricane katrina, the ongoing drought, and the earthquake in japan. that is on c-span3 at 8:30 on with -- , today's a few moments headlines and phone calls, live on washington journal. the us house of representatives will be in session at two o'clock eastern. a disaster aid spending bi

former chief executive hank greenburg, who says the bailout terms were too harsh and accuses the new york fedf being a loan shark for charging a 14.5% interest rate. a loan shark that sticks its neck out to save its victims. this wild and seemingly delusional desertion, aig's board of directors had an alternative choice to borrowing from the federal reserve, and that choice was bankruptcy. politico reports, tim geithner, who faced calls for firing over the aig bailout and federal reserve chairman ben bernanke are furious. they are not alone. elizabeth warren is one of many whose blood boils over. aig's reckless bets nearly crashed our economy. they should thank american taxpayers for their help, not bite the hand that fed them. it is worth noting they paid off their loans which resulted in a $220 million profit for the u.s. government and must protect the interest of their shareholders and held a meeting this morning to discuss the lawsuit. it is expected to reach a decision by the end of the month. joining us now from washington, msnbc policy analyst, ezra klein of "the washington post." alw

coming over here, geithner came from the new york fed. why is this important?will be an advocate for the white house. they have other responsibilities. collecting taxes. irs report is up to them. issuing the debt. other things that treasury secretary has to have some form of independence. also, tyler, think about it being a loss for the white house itself. not having somebody with credentials that the market can latch on to, to advocate policies. here are credentials of jack lew in the screen we call, you don't know jack. you can see very much political. look at the next bit. twice serving as budget director and most recently as chief of staff. unless you count the preef time he spent at citigroup as being that piece of independence or new york university. it is not the kind of thing tyler that market will say, you know what? he is one of us. that raises questions about the policy and also we talked about is he is the guy who will be in the chair standing up for the financial -- for the next financial met down. >> a long policy insideer. steve, stay with us, as

last year the new york fed put out a report that says it's all about us.r question, i just think we're getting this kind of crazy relief rally off of the fiscal cliff stuff and a little bit of clarity in washington and everyone has pushed the bad news to the back page, but, you know, two things you have to think about is when does the fed stop and why does it stop? now -- and that's going to come down to two questions. does it stop because the economy or improving or because inflation gets out of control? if it's the first reason, that's good. if it's the second reap, that's bad, and the people i talked to on wall street are getting much more concerned about the second reason and what happens if inflation get ahead of the fed and they are no longer -- they don't have that power anymore to control the markets. >> to that point, bob, do you have an estimate on when you think the fed might start to wind back? >> i know you can't hear jeff. he said at some point the fed will have to stop, for some reason the economy growing or a bad reason, inflation rearing u

the germans make a run on gold at the new york fed. my take on that is next.rd iii. >> sitting on the farm. for some reason he is very angry with me. >> as they say the plot thickens. >> knocked over the federal reserve. can your hearing aid do this? lyric can. lyric can. lyric can. lyric by phonak is the world's only 24/7, 100% invisible hearing device. it's tiny. but lyric's not just about what you can't see. it's about what it can do. lyric can be worn 24/7 for up to four months, without battery changes. incredibly easy to live with, lyric can be worn showering, sleeping and exercising. in fact, you might forget it's there at all. call for a risk--free trial. and you'll see lyric can also give you exceptionally clear, natural sound in quiet and noisy environments because of how it works with your ear's own anatomy. (testimonial section) (testimonial section) (testimonial section) (testimonial section) (testimonial section) did you know, 94% of people who use lyric would recommend lyric to a friend or loved one. can your hearing aid do all this? lyric can. t

take a look at what the new york fed is telling fox business about the merit of this lawsuit.ng there is actually no merit to the allegations. aig's board had an alternative choice, bankruptcy and the federal reserve's action helped restore. they will be deciding whether or not to join hank greenberg's lawsuit against the government. jon: they may have a point. you convinced me. thank jew jon i'm sure you remember 20,000 leagues under the sea, who can nor get that, right? ha look at the real life wreath that you are might have inspired what we've tauld a tale for years, but just might be true, maybe, coming up. [ loud party sounds ] hi, i'm ensure clear... clear, huh? i'm not juice or fancy water. i've gotine grams of protein. that's three times more than me! [ female announcer ] ensure clear. nine grams protein. zero fat. in blueberry/pomegranate and peach. [ bop ] [ bop ] [ bop ] you can do that all you want, i don't like v8 juice. [ male announcer ] how about v8 v-fusion. a full serving of vegetables, a full serving of fruit. but what you taste is the fruit. so even you...