so the wall street investment bank bear stearns, which collapsed and is no more by the , end of 2007, they were barring -- borrowing around $50 billion and $70 billion overnight in the repo market. so wall street banks, investment banks like this one, where relying upon the repo market to stay afloat, to stay solvent, because to make profit they were taking on as much leverage as possible. ok, so we have originate and distribute, financial derivatives, the repo market and now we have something else, leverage. the banks were in debt. which is why they needed $70 billion every night in loans to roll over and finance the debts. what is leverage? a bank's leverage is the ratio of assets, the loans and investments out in the world, relative to their equity. its reserve capital, the cushion you can draw on when things go wrong. the more leverage you have, the more profit you can make, because you are putting up less of your own money to make money. but the more leverage you have, the quicker you can become insolvent, because you do not have anything to cover your losses. by 2007, the five m

you look at most of the institutions contained in the crisis, lehman, fewer, investment bank, bear stearnsre investment bank, then he aig, an insurance company and so forth, it is pretty hard to see glass-steagall as having much to do with the financial crisis. i don't know quite where -- i understand the impulse to higher capital, to liquidity requirements, i even understand and support the impulse to more rapid size limits -- stronger size limitations on institutions. where the impulse to glass-steagall is coming from except for some kind of desire to protect the investment banks fromcompition from someone in commercial banking, i don't see that argument. vonnie: former u.s. treasury secretary larry summers speaking earlier today on bloomberg daybreak: americas. stay tuned. technology is coming next. this is bloomberg. ♪ . . a little bit of fog burning off in midtown manhattan -- live from bloomberg world headquarters in manhattan, i'm funny quit. a quick check on u.s. stocks, just off session lows -- i'm a vonnie quinn. .4% and thedown nasdaq the laggard today. let's get details from ta

even for stuff, like jpmorgan would be sued because something happened at bear stearns which they took at the behest of the federal government. he infuse ad class warfare attitude. had impact on business and regulation last several years. now he is taking economy, democratic party infused with class warfare is rebelling against him. quite fascinating to watch bernie sanders and elizabeth warren, vermont senator, big time populist, lefty populist, elizabeth warren, lefty populist , senator from massachusetts go after him. ashley: take the other side, why would industry demonized by barack obama and speak to them and give them $400,000? >> that is great question. i'm trying to think of a really diplomatic way to put it. ashley: good luck. >> i can't think of it. they will do anything for a dime, okay? that is essentially what we got here. it is not, listen, not just that. they think that president obama can help them. let's be clear he is speaking at a health care conference put out by cantor fitzgerald. they're not doing it so they can teach the average guy you how to find low cost insu

speaker, i rise today to recognize and thank recently retired stearns county sheriff john sanner for his service to the people of minnesota. for the past 33 years, sheriff sanner has watched over our community, ensuring our safety and the safety of our loved ones. in 1984, he started out as a patrol deputy and was elected sheriff 20 years later. after the horrific abduction of jacob in 1989, sheriff sanner was one of the main officers on the case. he worked for more than 26 years searching tireless lea for jacob -- tirelessly for jacob, hoping to give jacob's family an answer. years went by and soon decades. sheriff sanner never gave up on jacob and his family. the case was solved this past year, proving dedication to his job and to the people he served. sheriff sanner, i speak on behalf of all minnesotans when i say thank you. we wish you a long, peaceful retirement spent with your amily, and i yield back. the speaker pro tempore: thank you. the chair recognizes the gentleman from illinois, mr. gutierrez, for five minutes. this is a new era. this is the trump era. mr. speaker, those

the fed, the treasury had bailed out the investment bank bear stearns, they financed itself to jpmorgan. the bush administration decided to let the lehman brothers failed to make an example cannot get into a too big to fail moral hazard situation and it brought down the entire global financial system. and without intervention of the federal government, that meltdown would have been complete. they, fall 2008, to sort of solve the panic or the crisis, the bush administration acted on two fronts. the fed injected enormous amount of liquidity, dollars and credit, into the financial system. definitely pushing the limit on the legal mandate. so the fed, the lender of last resort, dropped interest rates to 0% and began to accept a broad range of assets for collateral, essentially interest-free loans. and the fed's own balance sheet, the stuff it up as collateral, just absolutely exploded. furthermore, i add that the fed did this not only for u.s. institutions, but for the rest of the world. the contagion spread and the fed ended up giving a lot of free dollars to the central banks across the w

stearns and citigroup. it almost didn't matter. what happened to trading on fundamental also if the stock price is still not going to react to positive earnings. >> i'm sort of surprised. i bought some goldman calls today. i normally don't like to buy something down a lot. i thought i'd give it a couple days. there is a lumpy part of the business. trading revenues could change a lot. for them to get a big penalty for missing a lumpy part of the business, so meaning it had a big multiple on the miss, i didn't get that. it seemed overdone to me. the other side of that argument is, it was too high going into the -- >> the price was too high? >> yeah. maybe not. i thought it was overdone. i bought some short-term calls, just for a bounce. do i have a big bank exposure, a banc of america exposure, it traded today. >> it started out trading fine. it just got pulled down. >> yes. >> but it was definitely disturbing. you hope that bank of america could have held up the financials. they couldn't. we we heard trump now say that j.p. morgan,

we have the architecture of that marvelous. , and is now, bob stearns work right here.e] this is april 19, 2017, here's a poem from april 19, 1837. 180 years ago written by ralph waldo emerson. by the real bridge that arcs the flood, april breeze unfurls, here once the embattled farmers stood and fired the shot heard round the world. the flow long since in silence swept, a light the conquerors silent sleeps. and time and ruined bridge has swept down the dark stream which seaward creeps. on this at green bay by the soft stream we set today a stone that memory made their he redeem when like our sires, our sons are gone. spirit that made those heroes dare to die and leave their children free big time and nature gently spare the shaft we raise to the spirit. spirit and perseverance. george washington once said to me, it's one of the most powerful messages ever to all of us, perseverance and spirit. perseverance in spirit have done wonders in all ages. [applause] >> please welcome united nations representative and ceo of indian nation enterprises. [applause] [speaking in nat

n 2008, we had investment lehman brothers and bear stearns run into trouble with systemic risk to thend commercial banks to the same thing. it was not simply the commonest of these two activities that created the risk. to me, the most important thing we can do whether it's an investment bank or commercial bank or combination is increase the capital requirement of the biggest institutions. that is the buffer that protects them and protect the taxpayers if they make a mistake. if beyond that we want to separate the activities, i'm not opposed but the separation of the two by itself will not address too big to fail. you hike and normalize in fed policy at the same time? >> in terms of the balance sheet? alix: yes. >> my preferences we put out a detailed plan on when we will normalize the balance sheet. there has been conflicting views and build the ugly seems to think we need to take a pause in rates. the consensus in the fed, it was not clear in the minutes. >> there is a wide range of abuse. the minutes reflected the fact that people are still thinking through a wide range of options.

lehman brothers and bear stearns are great examples of too big to fail banks that were pure play investmentermarket banks, and they were systemically risky. you also had pure commercial banks running to trouble and posed systemic risk. it's not simply the merger of these two activities that creates the risk. it's the scale, it's the interconnectedness, and the lack of capitalization. >> are you a lone voice within the fed complex if you will on this issue at this point in terms of what kind of support privately are you getting or not getting, given the politics of the moment? >> you know, privately i have a number of people reaching out to me saying thank you for speaking out. we're glad somebody's speaking up about this. we have not talked too big to fail. but i think there are a range of views on this. the most important thing from my perspective is i don't want to give the public a false sense of security that dodd-frank has solved too big to fail. the biggest banks are still too big to fail and i think policymakers, whether it's congress or the executive branch or regulators need to tak