ben bernanke said today it's a myth that lehman brothers could have been saved, perhaps preventing the financial crisis. susie, the fed chairman also says he's partly to blame for creating that myth. >> susie: tom, bernanke was the star witness on capitol hill today, answering questions from the financial crisis inquiry commission. the committee was commissioned by congress to figure out why lehman failed, and to answer the bigger question of what caused the financial crisis. >> tom: bernanke's testimony was a look at the lessons learned from the crisis and a look at how to prevent another one in the future. darren gersh reports. >> reporter: speaking to the financial crisis inquiry commission, federal reserve chairman ben bernanke admitted he thought lehman brothers was not merely facing a cash crunch when it failed. he thought the firm was very likely insolvent, a fancy way of saying it couldn't pay its debts. but in 2008, bernanke chose not to share that thought with congress. >> it was a judgment at that moment, with the system in tremendous stress and with other financial institut

if you notice carefully what bernanke said. he said we never actually discussed whether we could save lehman brothers. that seems to me to be a remarkable statement. earlier in the year, after all, they had saved bear stearns. why didn't they save lehman brothers the same way they saved bear sterns? the decision to let lehman go under after all turned out to be a catastrophic error and we're still suffering the consequences of it. >> brown: john, why does it matter, these two years later, what exactly happened? you heard what andrew said. what do you think? >> well, i think it matters just as a historical record. it was a terrible blunder in some ways. we still don't know all the facts behind that decision. bernanke has given his version of events. hank paulsen has given his version of events. andrew has given a version of events in his book. still the central mystery remains. why didn't anybody foresee that this would be a catastrophe and take steps to avoid it. we've had two years of global recession some of which could have

let me ask, if i can, ask both sheila bare and chairman bernanke, -- sheila bair and chairman bernanke, we have the problems with the mortgage servicing company called ally, regarding certain improper actions by its employees and foreclosing on people's homes. those stories are very troublesome. obviously i guess i congratulate j.p. morgan for making the decision they did. i didn't read the whole story. i wonder if you might comment on this situation. i know it's not exactly the subject matter here. >> we are still learning about it ourselves and the o.c.c. might have something to add on this as well, as the primarily regulator of these large institutions. i think it's troubling and it's just a further indication of how wrong we went with the mortgage original nation process and securitization process, which was deeply tied to some of the break town in what you'd orlando expect in terms of documentation and protecting title. so it's troubling. so we will learn more about it. but i think it underscores it going forward. we need to be very careful. we want to bring the securitization mar

that was the message from ben bernanke testifying before a panel. he says regulators must be ready to shut down large institutions if they threaten the entire system. when it comes to the failure of lehman brothers, there was a sharp split between the chairman of the federal reserve and the former ceo. >> the former chief executive of lehman brothers always argued that his bank could have been saved. the chairman of the federal reserve disagree. >> there was no other option. >> besides putting rescue packages together for other banks, ben bernanke told the commission that the situation at lehman brothers was hopeless and that his hands were tied. >> i wish we had saved lehman brothers, and we tried very hard to do so, but it was beyond our ingenuity or capacity to do ait. we were willing to be creative -- >> you did see it coming. >> we saw there were a lot of risks in laymen and other companies. the actual failure was not preordained. >> it was a sorry sight, staff leaving offices after the sudden collapse of the bank. the bankruptcy of the firm th

federal reserve chairman ben bernanke has called for tougher regulation and monitoring of major banks to prevent another financial crisis. the central bank chief testified before the financial crisis inquiry commission at congress on thursday. bernanke said one lesson learned is that huge financial institutions need to be controlled more strictly as they are considered to be too big to fail, their collapse could lead to a breakdown in the financial system. he urged a rigorous implementation of the revised financial regulations that were enacted in july. the new rules are aimed at preventing moral hazard. that's when banks engage in risky lending or nichlths and then rely on public bailouts if they fail. bernanke rejected comments that the federal reserve's low interest rate policy triggered the crisis by creating a housing bubble if the first place. he said hiking interest rates could have led to deflation and other side effects. now back to catherine. >> thanks very much, ines. >>> a japanese research team says it has succeeded in using ips cells to grow a rat's pancreas in a mouse.

frank for using telekinesis you're a gallery style she wants to just raise the bourse you know ben bernanke he should try this with inflation of america because everything is trying right now quantitative easing buying back toxic assets jawboning the market lying cheating stealing it's not working deflation is tearing that economy apart joblessness is skyrocketing and the average living quality of life situation over there in that bed that hole between mexico and canada is going worse well you bring up something ben bernanke who is everybody in the whole u.s. economy is looking for to save the day you know whether it's political leaders or central bank. leaders they want them to rescue us save us with their magical work and that's something that this artist anika longer brought up she said i don't see the ambition to levitate the building meaning the frankfurt stock exchange as less absurd than what is going on inside the building he's right they both believe in an out committed way of thinking that they can somehow magically create g.d.p. growth without massive amounts of debt creation kee

there in that that hole between mexico and canada is going worst well you bring up something ben bernanke who is everybody in the whole u.s. economy is looking for to save the day you know whether it's political leaders or central bank leaders they want them to rescue us save us with your magical work and that's something that this artist anika longer brought up she said i don't see the ambition to levitate the building meaning the frankfurt stock exchange as less absurd than what is going on inside the building he's right they both believe in an alchemy just way of thinking that they can somehow magically create g.d.p. growth without massive amounts of debt creation keep in mind that during the last twenty years stacey herbert the g.d.p. creation. in the us was accompanied by massive amounts of debt creation twenty five years ago for every dollar fifty or two dollars in debt that was created you had one dollar in g.d.p. growth by two thousand and seven it took seven to eight dollars in debt before he ended up with a dollar of g.d.p. growth now that's not a viable economy that's a corpse

calling that a viable economic entity it's not it's a dead corpse that you're just it's absurd ben bernanke is a bit of a necrophiliac at this point but it's also goldman sachs and citibank are now applying to go into iran unless you accept this magical thinking apparently you're going to be bombed and they are there in the frankfurt stock exchange they're in the new york stock exchange they're now in london stock exchange they're in the shanghai stock exchange creating magical thinking and and turning assets into liabilities wealth into debt and that's what they're doing they're well whoever decides to take on america's massive liabilities will escape the bombing of the american can only make money in two ways keep printing bad paper bonds or war were fair so it's either welfare or bombs or warfare bombs you've got welfare or bombs on wall street that are selling phony counterfeit bonds and then you've got warfare bombs in the pentagon who start up ridiculous wars you know a lot of people say you know what since nine eleven has been another attack on the u.s. you know what they don't need

the i see the huffington post got a big headline this week get rid of summers and bernanke and geithner you can't get rid of a vampire and zombie just by wishing them away you need to drive this over spike through their hearts carry on offering to come on the show explain that to you darling. but. where was i think you were going to say fight now and stay tuned for our second half of the show sounds good to me i'm still thinking about that paper hanging scandal stacy ever thanks so much for bringing this part of the show but thank you max go away much more coming your way stay right there. with the second world been avoided what role did opposing ideologies play or individuals in states to blame. welcome back to the kaiser report time now to go to washington d.c. and talk with kate sheppard environmental reporter for mother jones magazine kate shepard welcome the kaiser report. thanks for having me let's talk b.p. oil spill the government and b.p. say the oil in the gulf of mexico has almost entirely disappeared scientists say it's mostly still there tell us what each side claims and wh

federal reserve chairman ben bernanke testified that regulators must be ready to shut down the largestanking institutions if th threaten to bring down the nation's financial estimate. bernanke told the congressional commission investating the 2008 economic meltdown that bailing ou failing banks or investment firms is no longer a viable soluti. he says the meltdown was triggered in part by investment and banking schemes that are too complex for regulators to understand. >> our bank regulatory system was decide for a financial system a that's where it came from. all these non-bank acvities grew, we the country was not sufficiently proactive in establishing a regulatory framework toncompass all those aspects. >> the financial crisis commission is issuing its final report in december. >> the face-to-face peace talks in washington between palestinian leaders are going so well they're agreeing to a second round. form senator george mitchell says the next session will take place in the middle east in two weeks and then every two weeks thereafter. john hendron reports. >>> today president obam

bernanke told the congressional commission investigating the 2008 economic meltdown that bailing outailing banks or investment firms is no longer a viable solution. he says the meltdown was triggered in part by investment and banking schemes that are too complex for regulators to understand. >> our bank regulatory system was decide for a financial system and that's where it came from. all these non-bank activities grew, we the country was not sufficiently proactive in establishing a regulatory framework to encompass all those aspects. >> the financial crisis commission is issuing its final report in december. >> the face-to-face peace talks in washington between palestinian leaders are going so well they're agreeing to a second round. former senator george mitchell says the next session will take place in the middle east in two weeks and then every two weeks thereafter. john hendron reports. >>> today president obama takes his first shot at the prize that has eluded his predecessors, middle east peace. >> if we do not make the attempt, then failure is guaranteed. >> in the firsth[u t

weekly jobless numbers, and the gdp numbers -- and ben bernanke. aig has come not to say that it is repaying the billions to the u.s. government -- has just come out to say that. >> tony curtis has died at his home in las vegas. he was 85. he was the son of jewish immigrants. he never won an oscar but was a hollywood icon. he was married five times. nick looks back at his life. >> it was one of the funniest films ever made. jack lemmon and tony curtis, giving his comic skill by in drag. and out of it, as it. his acting hero -- carry grant. -- cary grant. he was the son of poor hon. emigrants who grew up as a new york street kid who did not speak english until he was four. >> from the first day i wanted to show off, one of the adulation and fringe of people. maybe i did not get enough of it -- and friendship of people. >> his craving for attention took him to hollywood. he married gently, and they appear the perfect hollywood couple. -- janet leigh. the star together and in houdini into the marriage collapsed. by then, tony curtis had started as ane

bernanke says if there's just one lesson to learn from the recent financial fiasco, it's the too big fail issue must be resolved. >>> today we will learn the results of an independent having into pg&e's smart meters. this morning, the consultant hired to review those meters will have a meeting in san francisco. following that meeting, pg&e will make the results public. the independent audit of the smart meter program was ordered after many pg&e customers complained their rates skyrocketed after the new meters were installed. >>> a fascinating story that is a dream come through for hundreds of teachers and students all over california. the teachers had posted a wish list on the website called donors choose -- donors donorschoose.org. on tuesday, the executive director of the clair gioniti fund asked how much it would cost to pay for each teacher 'web list and then there was a check issued for $1.3 million. >> that's great. a lot of the supplies that the teachers need. a lot of it is paid out of their pocket. >>> if you are looking for a little happiness you may want to take a look at

. >> jeff: but with just two meetings left this year, fed chief bernanke and company could be pressed for time. you're watching "nightly business report" for tuesday, september 21. this is "nightly business report" with susie gharib and tom hudson. "nightly business report" is made possible by: this program is made possible by contributions to your pbs station from viewers like you. captioning sponsored by wpbt >> susie: good evening everyone, tom hudson is on assignment. jeff yastine joins us. the federal reserve kept its key interest rate at zero, but said it's ready to take action to boost the economy when the time is right. that announcement came today as the fed wrapped up its policy meeting in washington. susie, one thing that stood out at this meeting is the fed is getting more worried about inflation. the problem is, inflation is too low, and below what the fed considers acceptable. >> susie: that could be the catalyst for the fed to pump more money into the economy. so what will the central bank do next? suzanne pratt reports. >> reporter: two more meetings. one two-day event

. >>> federal reserve chairman ben bernanke heads to capitol hill today to testify on the progress of rolling out that new financial overhaul law. in prepared testimony, he'll tell lawmakers the fed is working closely with other regulators to implement the biggest overhaul of financial rules since the great depression. the goal, of course, is to prevent another financial meltdown. >>> new numbers show a pickup in foreclosure sales. one in four homes was in foreclosure. selling 26% less than properties not in the foreclosure crisis. this will help heal the housing market. >>> jpmorgan chase is freezing more than 50,000 foreclosures. the bank is reviewing documents for possible flaws. but experts don't expect the delay to reduce the number of foreclosures. >>> overseas, stocks are falling this morning, due to new concerns about europe's debt problems, after spain's government debt was downgraded. tokyo's nikkei average tumbled 2% today. hong kong's hang seng is lower. in london, the ftse opened lower. and on wall street, the dow slipped nearly 23 points yesterday. the nasdaq was down th

bernanke outlined it. some missed it, but i bet he's going to be coming back to it next year. >> let's look ahead to next year at this time. where do you see the unemployment rate on labor day 2011? anthony? >> well, i actually -- i'm somewhat optimistic, even though i would say cautiously optimistic. i think the unemployment rate will be heading towards 10% in the not too distant future, and then by next labor day, i think if economic growth picks up slightly above the potential growth barrier, we may see the unemployment rate come down to 9.3 to 9.5%. >> ken, where do you see the unemployment rate in 2011? >> well, not over 9%. we had 4% when this started. that's grim, and i'm afraid it's realistic. i don't think we're going to be much better than that. i think we'll come down maybe a half, three quarters of a percent a year and gradually inch down, and land at 6.5 or 7%. >> you said it's a long road to roefsh. thank you so much for coming on the program. i hope you have a great holiday weekend. >> thank

to our country well it doesn't exist anymore america is over well look at the fact that what ben bernanke has said several times what got the us out of the great depression world war. paul krugman has. basically suggest that recently tony blair in this interview that we started at the top of the show goes on to basically say we need to bomb iran because this country that has not invaded any other country for over two hundred years is somehow an x. essential threat however if you look at the history which were mimicking directly now they're hoping for a world war because the population is restless they're unemployed they're hungry and you've got to do something to change it well look my advice to iran as i've been saying to protect yourself against these psychotic warmongering psychos like cheney and obama he's certainly in the same group now trying to borrow fifty to one hundred billion dollars from goldman sachs or j.p. morgan as the first tranche of borrowing and try to up that to happen trillion or trillion as quickly as possible then obama and bernanke and the gang instead of bombing

on capitol hill, fed chairman bernanke, f.d.i.c. chair bair, the c.f.t.c.'s gensler and comptroller of the currency walsh were among those testifying. together, along with treasury secretary geithner, they're the newly created financial stability oversight council. a key author of the law, senate banking committee chairman chris dodd, called on the team to work together. >> this organization is not intended to be a top down, but rather a collective gathering of equal partners in all of this. and i would expect that no one to hide behind the work of the fed or the treasury, nor to be intimidated by it. >> susie: the group has to write hundreds of rules to put financial reform into place. it holds its first meeting tomorrow. >> tom: the european debt crisis isn't over. spain today lost its triple-a credit rating. moody's downgraded the country on worries about its budget deficit. the credit rating agency says spain must convince financial markets it can pass a budget that cuts the deficit. spain's unemployment rate is 20%, and its economy is predicted to grow

over time and that's exactly the kind of thinking that got them into this current crisis geithner bernanke obama have to bite the bullet they've got to realize that the real estate market is really priced at about sixty percent higher than a really is worth the banking system needs to throw up some real failures like city citi group is a prime example that is a technically walking dead zombie bank they need to basically let that dead corpse die bury it take the head take look the economy take the hit and move on there's there's no way they're going to massage their way out of this dilemma geithner is completely wrong furthermore easy responsible he's condemning the economy to a nation as you point out the unemployment rates are skyrocketing the poverty rates are skyrocketing because geithner simply refuses to accept the fact that the economy needs to purge itself of the kleptocrats well exactly and according to this article now forty five million people in america or more the one inside. seven was in poverty last year that's almost fifteen percent of the population so. you know the example

bernanke will give his take on the meltdown and potential risk from banks considered too big to fail.near beverly hills today, you can celebrate "90210" day, with today's day closely matching that famous california zip code. there will be screenings of the original show. and even a party on rodeo drive. >> how about that? and even a party on rodeo drive. >> how about that? ? mponi™, and taken with methotrexate, it helps relieve the pain, stiffness, and swelling of ra with one dose a month. visit 4simponi.com to see if you qualify for a full year of cost support. simponi™ can lower your ability to fight infections, including tuberculosis. serious and sometimes fatal events can occur, such as infections, cancer in children and adults, heart failure, nerus system disorders, lir or blood problems, and allergic reactions. before starting simponi™, your doctor should test you for tb and assess your risk of infections, including fungal infections and hepatitis b. ask your doctor if you've been to a region where certain fungal infections are common. tell your doctor if you're prone to infecti

. -- ben bernanke. [applause] it is very good to catch up with old friends and colleagues and keep up with the changes and continuities ocampus. i am particularly pleased to see the center is driving. when we founded the center a decade ago, we intended it to be a place for students to learn not only the technicalities of modern financial theory, but also about the broader economic context of financial activity. recent -- recent events have made clear that understanding the role of markets in the economy and the effects of economic developments on demand is more important than ever. the financial crisis that began more than three years ago has proven to be one of the most difficult challenges for economic policymakers since the great depression. the policy response to this challenge has included important successes, most notably the international efforts to stabilize the global financial system after the crisis reached its worst point in the fall of 2008. for its part, the fed worked closely with other

-- princeton's own ben bernanke in. [applause] >> thank you for giving me this opportunity to come back to princeton. by todd economy when no one at 8:00 a.m., and in -- i taught economy 101 at 8:00 a.m., and i never had this kind of attendance. [laughter] when my colleagues and i founded the center of a decade ago, we intended it to be a place not only to learn the technicalities of theory, but also about the broader context of financial activities. recent events have made clear that understanding the role of markets and institutions in the economy and the effect of economic development on finance are more important than ever. the financial crisis has proved to be one of the most difficult challenges for economic policymakers since the great depression. policy response to this challenge has included important successes, most notably, the concerted international effort to stabilize the system. for its part, at the fed worked closely with other policy makers domestically and internationally. we provided a backstop to a r

that is the point of us seeing chairman bernanke. this is the first time in wall street legislation that there has been any step on behalf of the consumers and merchants with respect to credit cards. the banks lobbied against this ferociously. they spent over $70 million in six months trying to crush the durban-welch amendment. it is understandable why. they had a pretty sweet deal that would be the envy of banks and other credit cards of the world. host: manhattan, mark. republican. caller: i remember watching on c-span when these new rules and regulations were being written, and one of the republican senators tried to add an amendment where the maximum interest rate per month they could charge was 18%. under extraordinary circumstances, 21%. but this was voted down 100% by the democrat senate, who is on this rules committee. if you are really for the consumer and the individual, why would you not pass an amendment, that was a stand-alone amendment, that would cap these rates? guest: i am with you. i have legislation that would cap

bernanke.>> senator graham, a quick closing question? >> yes. chairman -- [inaudible] spent the chairman answered the question i was going to ask, which related to what is the status of off-balance-sheet items. but i cited earlier a report that there seems to be a weakening of resolve i a basil group in terms of liquidity and capital standards. does that coincide with what you're hearing, and if so, do you think that we can participate adequate resolve at the international level to get the standards where they need to be? >> so when you're developing complex and capital standards, it's important to consult with the banks to understand, make sure you understand what indications are for how much capital they hold and how it will affect their business and so. it's important understand that you're not making good policy if you don't understand the implications of your decisions. that being said, that's not the same thing as weakening standards. we want to make sure the standards are rational and ef