think when bear stearns went down? >> i couldn't believe it. like, i thought the whole banking system was about to go down. >> narrator: it almost did. billions drained from the economy overnight. the party was over. >> ...in july and said everything was great, and off that a lot of people bought stock... >> bill o'reilly was having a temper tantrum on his show where he was going off about, you know, "why didn't i hear about this? why didn't somebody tell me about all this that was going on?" >> this industry... 90%... millions of dollars. >> and i almost threw my shoe through the television set. >> we just heard the words, look, stop the bs here. >> and i was screaming and yelling, "i did try to let you know!" 'cause he had been one of the ones that i had sent e-mails and never received any response. >> millions of american taxpayers are still wondering, how did we get ourselves into this economic mess, and is there someone truly to blame? >> hello, everybody. >> narrator: to help prosecute those who were to blame, pr

it is different than bear stearns and jpmorgan to say you have to buy a.ittle different he bought it at $5 million that he thought he would have a great company in place to lend money we had a financial crisis then he was stuck with the legacy assets and is blown and the bank of america and brian moynihan comes in and they thought he was of a lark -- lousy ceo i was critical be was good as a lawyer dealing with the legal issues and basically putting a cap exactly on how much money they have to pay you have merrill lynch that is poised one of the great firms around in terms of the brokerage dealer was small investors you could leverage that and now that is what people are saying looking a bank of america i hear people talking about that over the next over 18 months liz: dick bovet says despite the run-up still more opportunity. >> he loves the banks and he touted citigroup but that said i have known him all long time and generally he does pretty good. but if you do believe the fed will keep printing for a while then the financial stocks has to go up. liz: c

. - obviously the government knows what to do, they let bear stearns fail and then they took a piece of gm. look at gm right now, 52-week high. that stock continues to go higher. aig has been on fire as well. so the government seems like they know what they are doing. is it a scam? kind of, yes. but they basically can pick and choose what companies they want to save and what they don't want to save. - and the deficit is going down, so i think things are getting better from the fiscal standpoint. maybe people don't believe, but you look at the paper, it's true. - topic 3: window into microsoft. is there a trade here, or is this a buy and hold? - as much as alan thought i was going to come in here and say microsoft is a short, it is going to go out of business, i can't say this, because the stock is way too strong to the upside. but if you look at the surface, it only sold 1 million units, when the ipad sells about 16.5. so i think they have some problems - windows 8 as well. but if you look at the chart, it is way too strong to short. so the only play i have on right now is to be flat

even after bear stearns fails on st.atrick's day weekend in march of '08 t wasn't until the fall of '08 that you finally got action. and it was way overdue. had there been more aggressive action and i say this respectfully, of the secretary of the treasury in '07, an even '08 when the warning signs were there, this would have been a problem. but i think you could have put a tourniquet on it and it would never have been as big as problem. ben bernanke was knew to the job. each passing day got better and better at this and ultimately played a critical role. tim geithner was very, very valuable. neil was tremendous out of the treasury. rahm emmanuel at the white house was very, very important, very helpful to us as well. so there were very positive elements that made significant contributions. the tarp debate is an important conversation in the context 6 all of this. bob said something very accurate early on in this conversation. barney and coy never have passed this bill in 2006 and 2007. and you couldn't pass it today. th

a hero of the public but he skated by natural crisis relatively unscathed in fact he picked up bear stearns and washington mutual on the cheap but the fickle press and politicians would turn against him as mortgage servicing problems and a large london trader who in his fortress balance sheet so your thoughts and jamie he is definitely a gangster ok. and the reason why well he came he came to capitol hill he warns presidential he's obviously you know bend to the revolving door you know made his rounds on the hill i think. the way he just has washington that it's. ok i'm going to have to agree with you here because he made his way through the old chicago wrote i think through chase bank. everything he does is a little bit shady but he's like i said he's been able to come across as reputable until recently he's had a host of problems and i think people are finally catching on to his gangster side so i'm going to guess. ok. all right next we have diddy combs he is the c.e.o. and founder of bad boy and worldwide entertainment group and c.n.n. and time magazine named him one of the most business

hundred billion dollars and leveraged buyouts and other private equity transactions founded by three bear stearns employees and the one nine hundred seventy s. they recently added a prestigious but controversial figure to their payroll as former cia chief and gen david petraeus he began his military education at west point graduating in one nine hundred seventy four and had a distinguished academic career he would eventually earn a ph d. in one nine hundred eighty seven from princeton university woodrow wilson a school of public and international affairs betray us was rapidly promoted at first service in the middle east from bergen. general and two thousand to the rank of general in two thousand and seven some have criticized for lack of a direct comeback record in relation to the many awards he received his bronze star of medal with valor award was questioned by several former army officers according to business and cider but betrays did suffer a major injury in the early ninety's when he was shot in the chest during a y. fire exercise but he was reportedly released early after doing fifty push

the head of the nypd used to be the chief of global security for bear stearns.and his boss, of course, mayor bloomberg, is a wall street executive. so, i mean, again, that point that there's really no distinction now between the power of the state and ten wall street. >> describing various members of the bush administration. you know, formerly from goldman sachs and formerly from bear stearns, formerly from -- yeah. >> yeah. and we now know what happens, like, the decisions to evict the camps was made by -- well, the fbi was in on it, homeland security, there were all these people, these fusion centers they set up to deal with domestic terrorist threats. but the interesting thing we now found out is that, like, representatives of the big banks sat in on these meetings. so the bankers and the police coordinated the suppression. they came up with a pop began da line, use -- propaganda line, using the theme of dirt and pollution. that was always the excuse for kicking us out. it was all coordinated. again, that fusion of financial power and police power is, therefo

when integrated bear stearns you got them to run the copper wire under the street to connect the banka time of crisis you were putting things together. you turned around the mortgage business. that was in a disaster disaster, jamie calls, you have a problem and you fix it dealing with regulators after the london wailes debacle. this is a blow to jamie morgan -- jpmorgan? >> first of all, it was solid team effort. a full firm ever and i felt fortunate to be a part of those. it is a well-managed company with a lot of talent and it will be in great shape i am looking forward to running first data. melissa: jaime dimon strength is his team loves him and somebody that his team would die for people left and went to ba one for less money because they believed in him and that was a blow to sandy while at the time now you are the ninth executive to leave the operating committee since early last year. have things changed? >> i don't think so. jaime is the fabulous leader of mentor and friend and has been great to me when he hired me and how i made this decision in the and so talk about loyaltie

joining us, former chief economist for bear stearns. good to have you with us. too far, too soon, but what a nice ride it has been, is it over? >> i do think this market has to mark sometime because we are up 16% this year even after the decline today. interest rates are so low, beginning to see the investment of interest rate as we have seen in the month of may, 10-year treasury yield has come up about half a percentage point. interest rates will give us a bit of a headwind and the market will have to pause for a while and i think that will be healthy. lou: we're starting to see some correlation between bond yields and also the s&p yields. that has a few people scratching their heads. watching it stubbornly persist loom about prospects for this year. what is an investor to make of it all? >> should not be too gloomy, there have been a lot of scarce. we sequester and the fiscal cliff, but the economy seems to be doing pretty well through all of that. we're beginning to see economic growth this year around two and .5%. not great, but not like what we have seen so

jpm is down from when it stole washington mutual and bear stearns for a song. that's remarkable. but it is not atypical. think wells fargo. you know what, it's now 30% of the nation's mortgage market. it was a brilliant decision, but the stocks still fought taking out its precrash high. how about two banks we have had on the show. i love this. you will love this. first horizon simple fha. both used the downturn to solidify tear standings, what happened to the $10 stocks in the interim? let's see, key, oh, used to be at 39. first horizon used to be at 37. how do you spell bargains? however, the biggest are insurances. start with the mortgage insurance, radian and genworth. this mortgage insurance business used to have multiple players for the downtown. now it's a handful. in some cases they are incredibly profitable. now, radian has fallen from 62 to 12. genworth, 35 to 10. this is despite the fact the biggest competitor in the industry, the government, through the fha is pulling out of writing insurance because of congressional oversight. all that business is going to go to radia

somehow it didn't find its way onto the slide show but i have in the book cartoons from bear stearns which were the worst, jews with pocono this, slobbering and fat and greedy and these images were on the covers and in those days these covers would be on every street corner and they took the image of the jew for germans who were not jewish and contributed ultimately to the terrible things that happened there. interestingly, jules striker who i tell the story in the book was the only noncombatant who was condemned to death at nuremberg and was executed. i don't believe in capital punishment, but if it is the law and you have to do it they should have executed fix did the cartoons himself. i don't think you have to run everything. there are matters of taste and judgment like there are editorial matters of taste and judgment. i have a strong presumption on behalf of publication despite the fact that it -- there are lines and it is important to recognize that and there are cases where you don't want to go beyond them. the danish mohammads are interesting case because if you know the whol

on the fact that you talk bear stearns, lehman, talk whatever you want. it was aig that brought us to our knees. philosophically and emotionally is hard to wrap my arms around it. >> that is a big part of the trade. you do want to be with a momentum player right now. it is a momentum player. it hasn't run out of gas yet. go with the tape. >> i was undecided before coming in today. after a very compelling argument i go with blue steel. grasso made a great argument, but the stock is starting to go parabolic. >> just like the market. you are negative on the market at 1550. somebody hit a rim shot. you have to go with momentum. that's what we all learned. >> i'm not saying -- >> all right. enough! stop. stop. >> i'm done. >> yes. all right. so on the desk, tim wins. we want to hear what viewers think. tweet us @cnbcfastmoney. there may be vindication, steve grasso, with the viewers. >> maybe. maybe not. >> maybe. i did say maybe. next trade rating group popping to a three-year high on back of bank of america's settlement, as well as the capital injection. the

it didn't help bear stearns. they had a separated role. >> we have been following tim cook defending the way apple pays its taxes in that hearing down on capitol hill. we want to take you back there, give you a quick run of some of the headlines there. cook saying emphatically we have real operations in real places. we pay all of our taxes. we owe every single dollar. we don't depend on tax gimmicks or stash money on a caribbean island. we don't skirt repatriation tax. unfortunately, the tax code has not kept up with the digital age. those are the words of tim cook. let's take you back to the q&a session with senator mccain. >> an incredible legacy for apple and all of the men and women who serve it. also, i think you have to be a pretty smart guy to do what you do and pretty tough, too. you have that reputation and i say that in a complimentary fashion, and i enjoyed our conversation. and so i wonder, do you feel you have been bullied or harassed by this committee or its members? >> i felt very good to be partic

. >> the federal reserve is bailing out bear stearns... >> narrator: it's a familiar cycle.customers are outraged. lawmakers promise change. then it happens again. >> mf global, down almost 39%. >> an increasing number of investors are betting the stock has farther to fall. >> of all of the collapses that occurred during this financial crisis, the collapse of mf global, in my mind, is the most egregious. this did not have to happen. >> it is a wall street morality tale in some ways. how can something like this be allowed to happen? how can one individual completely shape the destiny of this firm and ultimately its demise? >> narrator: this is the story of jon corzine, the collapse of his company, and why no one stopped him until it was too late. >> he is fiercely ambitious and an aggressive risk-taker. and that's the part that never comes across when you talk to him in person. you get this sort of avuncular feeling that totally masks what is a highly aggressive and ambitious guy who takes these huge risks with other people's money. >> narrator: corzine had an impressive résu

that's because this is happening in the shadows of the collapsed bear stearns and lehman and everything. there is no longer any outrage -- >> rose: also this notion that not many people in terms of the collapse-- we're talking about insider trading which is different. people have gone to jail for insider trading. but coming out of the financial crisis we went through and you wrote about, nobody has gone to jail, have they? >> no one that matters. >> none of the top people. what fascinates me about the story, i'm always interested in ambiguity and complexity and that you have in spades. the government aggressively precuting insider trading cases has brought down a couple hedge funds because hedge funds rest on their reputations. as soon as they're raided they're out of business. people's livelihood has been destroyed. you could argue that steve cohen has already been destroyed because his reputation will never be the same even if the government never brings charges against him he'll be forever smeared by these allegations and even if they do bring charges, hedge fund guys would tell you

well, if it were a former management, it would not nearly have had the confidence to step in with bear stearns washington mutual. it probably would have had less risk control. you know, the whale is a complete embarrassment, but jamie dimon does bring more focus than any other ceo of banks that size. it would probably have buckled a lot earlier in the process along with the other banks. >> and what about you, stephen? real quick. would j.p. pmorgan look differef jamie dimon wasn't the chairman and ceo? >> i have no idea, depending on who was in charge, what it would look like, but i ask you and everyone else, would the country look different if jpmorgan and the o'ban other banks hadn't en in practices that have sucked the wealth out of countries all over this country. i'm much less concerned about jamie dimon's feelings and whether or not he gets mad because he gets the position split than the ongoing crisis for most people in this country. and it's just tragic that the stock market rising and some of the banks stabilizing lets people wash their hands and say, too bad for all those people's li

a person who worked for bear stearns as a banker and jpmorgan aase writes "imagining country where themajority of the population reads a majority of the benefits for their hard work, creative ingenuity and fromt, imagine a country the bottom up and not a blue- collar -- photography from the top down." richard wolff in a stunning new book, he detailed how we get there from here and why we absolutely must. 866-359-4334. .he book is yours for $75 with the dvd, 125 dollars or the dvd alone, $75. call in right now. we only have five minutes ago. we ask you to call. we cannot do this without you, only with you. call in and let us know you are there. please, let us know that democracy now! matters to you, twice a day, monday through friday, 11:00 in the morning and 6:00 in the evening eastern standard time on both tv satellite networks, on dish network channel 9410, directv, callel 375, we ask you to them. if you live in arkansas or oklahoma -- my gosh, oklahoma, everyone in the area of oklahoma city, our hearts go out to you. i have no words. the only thing i can say is we have just heard --

jpmorgan stood there and took on bear stearns. jpmorgan stood there and took on washington mutual.hat size and capability to take on that risk, where the american taxpayers did not get punished under that. and again, what's really important here is that t.a.r.p. was incredibly profitable for the american taxpayer, if you exclude the auto companies. are you going after the auto companies? >> there's two points i want to make shehere that i think are really important. one, maria, where i feel like we always have a disconnect, everyone's so enthusiastic about the stock market, they forget for most people in this country, things continue to be terrible. that, in fact, wealth is more concentrated in fewer people's hands than it was before 2008. >> but you just said that there are so much regulators out there. and you know, we know that we've seen an enormous amount of regulation from, you know, that's continuing to be written as we speak. dodd/frank hasn't even been implemented. so are you -- you're still blaming the banks rather than the people who are actually overseeing the structure

. >> just for the record, i was one of an army of traders in bear stearns. long time. great terminal. and the system that's out there, i don't think there's anything terribly nefarious. it was used to see if they were in the office today. >> if you're out playing golf, i don't want people to know. >> then you're on a conference. >> but you're from the wall street side. you're not that upset. >> i'm not upset at all. now, again, the differences to what level it was used. if there was access to firm's trading records, to hedge funds, that's a whole different story. absolutely no indication that was the case. bloomberg as a company was customer responsive. >> they knew where they were going. >> if you have 51 on the cards, that's an easier game. >> we have been talking about the journalistic ethics of all of this. but the business side collects all of this data to be able to build new functions, products. some are starting to compete with some of their own clients. are they going to have to change or adjust how they collect this data and how they communicate wi

of the government in the sense when there's a major crisis he stepped up on washington mutual, bear stearnsd discussing some silly thing called corporate governance which no one has proven means anything. in other words, there's no evidence that if you have a split chairman and ceo that your company is going to do better than if one person has both positions. so it's hard to see what's going on here. >> in terms of how this works out, not today but a year or two or three from now, and the reason i ask, even if it's right and jamie dimon wins today, you have to imagine this drum beat for better or worse. probably worse. you have alreadied its worse. but it's going to keep going. what does that mean for jamie dimon and for what do you think it will do around this issue? >> i think there's going to be pretty dramatic changes on this board and the communications on the board and the management team. plus, i think you could probably see a change in the structure of what the lead director does. you might even sew a mission statement coming out of the company in the next six weeks, two months, in

you were at goldman, bear stearns.ting a new business in what is obviously a tough cutthroat tech environment. >> yeah. >> what would you say the secret is right now to all the entrepreneurs out there who wish they were doing what you're doing? >> my brother and i started jibjab 14 years ago. you just have to see -- you have to have a vision, and you have to stick to it. and you have to change and evolve all the time. and today we're very lucky. we've kind of kept our nose to the grindstone. we've got 50 amazing and talented people working with us and excited to be pushing with jibjab and storybots together. >> jibjab, of course, backed by big names in venture capital, polaris, overbrook, sony. raised $18 million. you make money. what was the thinking in terms of bringing in partners versus retaining some sort of autonomy amongst yourselves? >> oh, yeah. i mean, the partners really helped us scale the business faster than we could if we were dependent on our own revenue. we were in business 6 1/2 years before we raised

this is just sort of an aside, the fed back in the mid 2007 when they we first heard of those bear stearns funds owned 15.9% of treasuries. >> but a 3% yield on the s&p, you know, in like a 2009 situation, that 3% is gone the first day. then you lose 37% more over the next six months or something. i mean, if you have a market break, it might be bad and the h11n1 swine flu -- >> you were saying that's tess not necessarily why people wouldn't buy those -- >> but that's why you don't get 1100% invested. he keep the cash on the side and drive on. >> the 3% yield, one day that's gone. you think, well, i have ta back up for a year. >> then the stock falls and it's over. >> i'm thinking you're holding for 10 or 20 years. >> buy and hold used to work, but people think it doesn't. >> within the market, too. if you look at consumer stap staples -- >> i agree, but utility res 19 times earnings. >> there are times when you want a return of your principal, not a return on, right? now i don't think is the time. >> we have to find the right cocktail. thank you for coming in this morning, lou. thank you f

i think the dollar is in a a bull market that began when bear stearns had problems in march of '08 andompanies that benefit from strong dollar is where you want to be. >> i like your point though. i think what investors have to think about is what are conditions under which the fed changes policy? and my sense is they're going to change policy probably when they see really sustained economic growth and improving labor markets. i don't think the fed will arbitrarily turn it off. >> you don't think they'll get scared off by how the market is running up? >> it's dangerous for the fed to be perceived as targeting asset prices. that will set the bench mark for employment and how the economy is doing. >> that's a tricky thing to step away from the benchmark they have set. >> haven't we heard ben bernanke talk about how powerful the wealth effect is? a lot of times what they say and what they do don't always meet. the fed has been trying to inflate asset prices. i'm one of the few. i think bernanke is a genius. i'll be the lone on my island for a while. thankfully we had bernanke here in '08