ben bernanke and hank paulson were really concerned about whether or not people would be able to go toasure secretary paulson told congress last night that a bailout is the only way to prevent a collapse. >> america's economy is facing unprecedented challenges, and we're responding with unprecedented action. >> it is no stretch to say that after this week, the era of big government is back. >> it is an urgent request from the bush administration to congress for $700 billion to quickly stabilize the financial system. >> thursday afternoon we started to hear about this thing called tarp. and tarp had many different variation, what it was going to be. but basically, they were going to infuse capital directly into some of these companies. >> this troubled asset relief program must be properly designed and sufficiently large to have maximum impact while including features to protect the taxpayer to the maximum extent possible. >> that $700 billion projected price tag isn't pretty, but the president says it's a big package because it is a big problem. >> my first instinct was to let the mark

ben bernanke did not want to have this called quantitative easing. we wanted it to be called credit easing because it wasn't the same as what japan did. and he didn't succeed and the world decided they would call it quantitative easing. so we bought $3.5 trillion worth of assets. and people thought that's a lot. and it is a lot. now, what did it do? you know, there have been a lot of papers written about this topic. it is very hard to tell. we'll never know for sure. my own reading of the evidence is that it did help to push down long-term rates. i mean, i would say probably something in the 80 to 110 basis points. >> a basis point is 1/100th of a percentage point, by the way. >> a little more than a percent. maybe. i've read many studies, this has also been tried in great britain, in the euro area, in japan, more recently, looking at all of that literature. i would say it's had some impact on long-term rates and that was helpful. there are is counterevidence and, you know, i don't feel a certain about it. what i do think is a lot of people were very

ben bernanke did not want to have this called quantitative easing. he wanted it to be called credit easing. because it wasn't the same as what japan did. he didn't succeed and the world decided they would call it quantitative easing. so we collect $3.5 trillion worth of assets. people thought that is a lot. and it is a lot. what did it do? there have been a lot of papers written about this topic. it is hard to tell. we will never know for sure. my own reading of the evidence is it did help to push down long-term rates. i would say probably something in the 80 to 110 basis points -- 1/100 of an: percentage point, by the way. janet yellen: so a little more than 1%. i've read many studies. this has been tried in great britain, in the euro area, looking at all of that literature. i would say it has had some impact on long-term rates and that was helpful. there is counter evidence. i don't feel certain about it. what i do think is that, a lot of people were very unhappy about the fed doing it. there was not a single bad thing that happened to the country

to bernanke did not want have us call it quantitative easing. he wanted it to be called credit easing. because it worked the same as what japan did and he did not succeed and the world decided they would call it quantitative easing. trillion worth of assets and people thought it was a lot and it is. now, what did it do? been a lot of papers written about this topic. it is very hard to tell. we will never know for sure. my own reading of the evidence is that it did help to push down long-term rates. i mean, i would say probably 80-110 basisthe points. percent bit more than a may be. studies -- this has also been tried in great britain, in japan. more recently, looking at all of that literature, i would say it has had some impact on long-term rates and that was helpful. and iis counter evidence do not feel certain about it but i do think that a lot of people were very unhappy about the fed doing it. thingwas not a single bad that happened to the country because we did it and if it turns out that it was in and of itself ineffective, that is not the

sure well as you said secretary paulson and fed chair ben bernanke frame this as dire and urgent it's a must pass the house initially thought that that bill but effectively they needed it to enable this bailout so the senate revived the package ultimately tarp was born to essentially buy and hold these assets that seem to become worthless until some time in the future when they expected normalcy to return yeah and bush forty three he was in office a republican but tell us how this actually got passed congress. was voting which way was interesting and it was one hundred seventy two democrats only ninety one republicans who actually supported the president's request to do this and enable it to become law some of those democrats who voted for tarp however they lost their next election so it seemed like as popular as it was it certainly cost them and ultimately did tarp work out pretty well. it certainly did financially the money was eventually repaid to the treasury and the financial system us as well as globally did not collapse so even though it was one of the most unpopular ideas alte

the future did hold it also ahead treasury secretary hank paulson and federal reserve chair ben bernanke really critically concerned with lehmann did what was next with contagion from lehmann and perhaps others who could fall destroy the economy and still nobody knew the financial risks of those dark o.t.c. markets with those bundles of bad mortgages in the credit default swaps fearing the worst total economic destruction paulson and bernanke headed to capitol hill with a three page document seeking more than seven hundred billion dollars to buy what they called troubled assets held by large and small banks and insurance giant aig i-g. which should insure the o.t.c. dark market products for many of the banks and it did become law for more we're joined by legal journalist molly barrows at the ring of fire network molly some of our viewers may have only a really a veg recall of tarp or know the acronym the history is pretty muddled take us back to a tarp one hundred one if you would. sure have our will as you said secretary paulson and fed chair ben bernanke frame this as dire and urgent i

we had the bernanke and the janet yellen put thirty years of an activist fed not steering or piloting the economy of the economy they are living on me they are the rest yes they are that's fine so who bails out the person who smokes and he doing the bailing out the less i want to thank god i'm on a show like this i could you know it's like a soundbite show i can actually expound on the so ok so we have something called the business cycle right max ok so you talked about one thousand nine hundred seven let's go back to two thousand and two thousand and eight what happens is there's a lot of debt out there and i saw you talking about it on on one your other shows lots of debt out there well how does that come from primarily from banks and shadow banks near banks ok. banks loan a lot of money to the private sector consumers and businesses they take out a lot of debt and then when they take on so much debt they can't pay it back it's supposed to happen is a mild recession ok but somewhere along the way the central banker said we're going to repeal the business cycle we are no longer going

well he describes it as getting rid of the put that the federal reserve bank under greenspan or bernanke or janet yellen they were constantly bailing out markets by making rates cheaper apparently powell is saying that he's not going to go in don't truck with that he's not down with that everybody was admonished him about raising raise the problem is that stock markets have been selling off we've seen the worst stock market sell off since one thousand thirty one for december. and people were expecting otherwise the opinion stock investors you have now been warning for the last time basically you can't taper a ponzi this headline reads with a record ninety percent of asset class is down for the year and almost half of the s. and p. five hundred index components and a bear markets hopes are first santa claus rally to save what's left of a terrible investment year and while markets may still see sizable rallies the warning signs are still all around us and they send a clear message the ten year bull market will come to an end and the investing in trading climate is changing dramatically pos

in fed, we trusted we trusted in ben bernanke, janet yellen, mario draghi, we trusted that they woulds come to the rescue but there comes a point where enough is enough and chairman powell is catching a lot of flack and it always ends up being politicized, all intense issues in the age we live in end up central stage for political discussion, but the reality is that i think the current chairman ought to be given a much bigger chance to prove himself because somebody needs once and for all to let the bernanke, yellen put expire. we have to break that pavilion loafian conditioning that if the markets get wild, the fed will come to the rescue i think he's doing a good job. remember, he's not saying that he's going to go on a blind tightening campaign. at some point, real time will reveil morgan, back to you. >> the other four letter word, data thank you, rick santelli >>> when we come back, possible faceoff in the works at facebook >>> and some of today's laggards on the nasdaq 100. netease, idexx, all weighing on the index. resqwkll" ter this break. this isn't just any moving day. this

fed, contrary to what kudlow was saying, is following yellen and bernanke policy, smooth as she goes.ll continue to have a rate hike in december, the question is 2019. it looks like you are late in the cycle, u.s. growth is starting to slow, you have wage growth to slow pressure on prices, if you look at exports they are down substantially. you take a number of those factors in the outlook is lower growth. the market has two things on its mind, recession, and also the impact of the trade war. that is looming large, because if the two biggest economies of the world enter into a major trade war --that affects global growth. >> jpmorgan think that the latest selloff really over prices some of the risks. shortlyget into that and we will talk about opec and their big move to pull 1% of global oil from the market. plus, our interview with the russian energy minister's later this hour. but first, the odds are heavily stacked against theresa may's brexit deal heading into the vote on tuesday. we will discuss that, and what it means for key assets. this is bloomberg. ♪ ♪ >> we are live on bloo

harken, it goes back to 2013, ben bernanke that's when we had the taper tantrum.er tantrum put in place in my opinion a series of barriers that the fed is very nervous about. when the market had a hissy fit, a tantrum, whatever you want to call it back in 2013, when the notion of balance sheet reduction was front and center and we were going to stop buying and quantitative easing would end, that tantrum made ben bernanke stall out the road he was thinking about going down. beyond that everything in my opinion changed. i think the fed needs a third pillar they need some way to deal with addictions by the marketplace because the marketplace really needs a 12-step process to finally break away, stand on its own two feet we shadow box this issue oh, we have to forget guidance but all of that basically is about trying to talk the market through its addiction. and, when we think of these tantrums, and there's going to be and have been tantrums, and i still say at the end of the day you could draw any conclusions you want from all the events of the day, that we connect t

to fall further and i come back to this point that we are facing the great politicize ation ben bernanke a the former federal reserve chair called the period in the one nine hundred ninety s. and early two thousand is the great moderation this is the great politicize ation and it makes it extremely difficult to know what is going to happen in the world economy but what we do know from history it sounds like you approve this in the next financial crisis if so when's it going to hit let us be ready for it then shall we but. i'm not smart enough to tell you when the next financial crisis is going to come but what i am i think clever enough or cognizant enough of history to know is that populism doesn't tend to end well what i know from my experience is that bad policy leads to a bad outcome and in the context of populism we are going to be confronted i believe.

but danny just because some guy up until until bernanke is because i'm going to get it but the put me to be true everybody i want to be. the police station is here when we keep putting up with joe know they're going to need someone who got here because he has a counseling get out get out get in go short out but i'm the only media that i'm going to. as many times do i want opening up a new office unless. i'm going to mr the general should have to. focus on the. little castle so much check out may not be. always be there but it won't really get you gathered about me and we do not get much oh. well this is a maximum i'm going to get. to the bus in the a minute exactly to get to the. mike.

bernanke. >> it's bernanke and yellen who basically, when the economy was picking up in 2015, '14, around that time, kept -- they kept rates at zero. now we are in a position where we have to unwind the balance sheet which is more destabilizing. i disagree with john, mark, i can't pronounce his name, i disagree with mark. they said unwinding the balance sheet is the double whammy for the markets. the question is, is this medicine the economy needs to matter what donald trump says? do we need to unwind the balance sheet to protect the sanctity of the dollar for what it's worth? do we need to raise rates a little more because guess what, you can't have corporate bubbles and we need running room if we really do go into recession. those are tough questions to ask. liz: andy, your response? >> i think charlie's right on half of it. i think he's right about the balance sheets. couldn't be more right. but i think going forward, i think quantitative easing is the new procedure for the fed going forward. >> how do you do it, andy? how do you do it now? the balance sheet is already insanely bloated

well he describes it as getting rid of the put that the federal reserve bank under greenspan or bernanke or janet yellen they were constantly bailing out markets by making rates cheaper apparently powell is saying that he's not going to go if you don't talk with that he's not down with that and everybody was admonished him about raising raise the problem is that stock markets have been selling off we've seen the worst stock market sell off since one thousand thirty one for december. and people were expecting otherwise the.

to fall further and i come back to this point that we are facing the great politicize ation ben bernanke a the former federal reserve chair called the period in the one nine hundred ninety s. and early two thousand is the great moderation this is the great politicize ation and it makes it extremely difficult to know what is going to happen in the world economy but what we do know from history it sounds like you have put this in the next financial crisis if so when's it going to hit let us be ready for it then shall we but. i'm not smart enough to tell you when the next financial crisis is going to come but what i am i think clever enough or cognizant enough of history to know is that populism doesn't tend to end well what i know from my experience is that bad policy of leads to a bad outcome and in the context of populism we are going to be confronted i believe by a lot of bad policy choices a lot of nativism a lot of interventions which perhaps are necessary a lot of wrong turnings and i think that is again something which leaves us in a very dangerous very threatened situation all righ

bernanke try doing that in the spring of 2006, so he was mentioning the possibility of a pause in that cycle, and markets immediately jumped to the conclusion that the fed would be done in the next move would be down. that is the challenge the fed, under the new leadership, is facing for next year. i think they will want to signal a positron but keep their options open. the have not decided what to do after the pause. the reason why they are causing is there is uncertainty in the economic data. this will all lead to volatility if the fed is starting to signal a pause. the markets will jump to the conclusion that the markets are down and the fed will not like that. all of that will make for volatility the first half of next year and investors need to prepare for that. guy: it does make you wonder about the usefulness of the dot plots. draghi tried his best to to where the ecb is going next, and you get the same sense from powell. they are walking across the dark end room and they don't know where -- across the darkened room, and they don't know where the obstacles lie. should be throw t

we had a giant credit cycle bubble in two thousand that blew up ouch you know and then we had ben bernanke is one percent blowout rates and then we have the housing bubble and other associated things double ouch this is worse than all of those this is the third big swing at a credit cycle we have the everything bubble now stocks bonds real estate it's global nowhere to hide yes what i'm seeing in this volatility is simply what happened is soon as the central banks started to slow down the rate of balance sheet expansion that gave us the trouble we're seeing as long as they stay committed to that path i think we see more volatility all right they had term they can't taper a ponzi scheme they can level economy is a ponzi scheme but di definition you're constantly native print more money to keep the ponzi scheme going it cannot sustain itself in the u.s. the debt interest on the debt is dab becoming a line item almost as high as the military so you're enter into a hyper deflationary collapse at some point and we may be entering that risk is zone a very very soon the last crash happened during

they are former federal reserve chairman b bernanke, ecreta hank paulson and timothy geithner. >> i bett better these days. >> that's a low bar to get over. >> reporter: they're nicknamed the three amigos, the men who stave off another great depression. but ten years since the great recession, they addressed the personal toll the 2008 financial crisis had on them. >> i felt very, very alone and very disconsolate. we really felt like we were kind of out on an island there. >> that crushing sense of responsibility and fear. >> the scariest times for me were never during the day, right? we were too busy. we were talking to each other. it would be waking up in the middle of the night. >> reporter: you had nightmares? >> oh, gosh, yes. >> reporter: their documentary delves into what really happened during the financial market meltdown. >> we were a few days away from the atms on working. >> reporter: it was a crisis caused by irresponsible lending and a bubble burst in the market. >> hank was in markets for many years. i was an academic, i worked on the great depression. so in a way we were

we're hosting former chairman of the federal reserve, ben bernanke on november 16th so be on the lookouthat, as well as karl recovery on december 14th who -- karl rove who has a fascinating book on mckinley. so please plan on joining us for both of those. we also want to call your attention to our holiday season special exhibit called a season of stories, christmas at the white house, 2003, opening on november 19th. the exhibit will feature a number after handcraft decorations depicting beloveds storybook characters displayed at the white house for christmas in 2003. we hope you'll come and experience that. also terrific for family is, of course. tonight, we are excited to present you with a conversation between president bush and author jon meachum. they'll discuss meachum's new book, destiny and power, the american odyssey of george herbert walker bush. jon was granted exclusive access to president bush 41, as we call him, die's to write the book and he delivers an unprecedented and comprehensive portrayal of a great man who has long held a special place in our history and in our heart

the people who put powell in this position is yellen and bernanke. >> jerome powell has a terrible situational with, not one from his creation. one from the former fed chairman who engaged in an experiment of quantitative easing and zero interest rates. nobody has a roadmap here. it's a very complicated question. i don't think the fed is necessarily doing the right thing on relying on all the usual indicators, lagging indicators like gdp or unemployment rates as a way of making decisions going forward. but we are all in uncharted territory here. it would probably be useful if the president backed off, gave them some space politically to make some of these decisions without feeling pushed into it by the president. jon: thank you, kimberly. >> thank you. jon: coming up. jardiance asked: when it comes to managing your type 2 diabetes, what matters to you? step up to the stage here. feeling good about that? let's see- most of you say lower a1c. but only a few of you are thinking about your heart. fact is, even though it helps to manage a1c, type 2 diabetes still increases your risk of a fatal he

little logs at the bottom of a pyramid made by the fed itself all the major economies followed ben bernanke'syles to price risk and put people in the sectors we choose now i look at where one month bills are six month bills, near bills and now it's the time for saverers at the expense of the equity markets and add in a disruptive commander in chief and here we are. carl, back to you. >> all set when we come back, ron johnson is going to join us. why he says it might be time for investors to cut and run on some underperformers in retail. as we go to break, a sea of red. all 11 sectors are down ft. month, the quarter and the year. >>> despite better than expected holiday season numbers, the retailing etf bracing for the worst quarter since the fourth quarter of '08 is that a sell sign, joining us for an exclusive, ron johnson, now the ceo and cofounder of especial enjoy.com. happy holidays >> i really enjoyed that rendition of the holiday carol i read this morning this is the 200th anniversary of the first time silent night was sung got a bunch of traditions here >> we tease the segment saying

now, we recently sat down with ben bernanke, hank paulson and tim gardner with a look back at the lasthis was a moment in time the likes of which none of us had seen before, none of us were prepared for. we all read about what happened in 1929. >> yep. >> but there was a time, a week or so, when we really didn't know whether all the banks were going to go under, whether the economy as we knew it was going to go under and there was going to be panic in the streets. talk about that time and that uncertainty and your instinct on how to move this country through it. >> well, we were looking into the abyss literally, because i think there was a time if we had one more institution go down, the whole system would have gone down and we wouldn't have known how to put it back together again. it would have been very difficult. but it wasn't really that one week. this thing went on for an extended period of time, and there were plenty of scary moments. but to me the enduring memory of that is how the u.s. government came together. we saw some of the worst in behaviors leading up to that time, but

powell, say that he is really acting a lot like one of his predecessors, ben bernanke. how so? >> well under bernanke's tenure every time the market was went down he would lower rates or talk easier money. and i was hoping with this gentleman in in that would be a little bit different. he saw the markets getting hit. he came out with the noise last week, instead of raising a rate as few times in 2019 we're closer to neutral. market rallies up. we get hit with 1500 points two days. what happens yesterday? they put this thing out to the "wall street journal" maybe we'll stop this thing all together. i just don't want a central bank to be watching markets. they should be dealing with the economy. david: but it is very rare. forgive me for interrupting, very rare for a fed chair to do that? >> i know. david: we all think of a couple of examples where a couple of fed chairs stood up to what the market was doing. not many do. they all cave. >> think about this one thing? for eight years interest rates were 0%. that means savers were screwed out of maybe a trillion or two dollars. tha

henry paulson, timothy geithner, ben bernanke, thank you.o see too big to fail. he had billy krupp, like a rock star. pretty good. >> they say he's awesome. >> paul giamatti. >> yes. >> william hurt. >> oh, my god. >> three for three there. >> very good. >> our thanks to ben bernanke, hank paulson, tim geithner. what does it for us this morning. ayman mohyeldin picks up the coverage right now. >>> hi there, everyone, i'm ayman mohyeldin in for stephanie ruhle this morning. lawmakers set to grill ceos this morning. the company faces scrutiny on its handling of user data and allowing conspiracy theories to flourish online. while republicans want to know if conservatives content is being censored. >>> help wanted. president trump reportedly frustrated over his search for a new chief of staff after his first choice said no thanks. with no plan b in place, the white house is left scrambling as many top political activists show no interest. >> hopefully he'll choose somebody he has great chemistry with. will help him navigate the next couple of ye

his only game in town was his fed, bernanke and yellen, had it not been for them our economy would nevere climbed out of the hoilt was in. i'm setting the record straight for those on the left, including those who don't understand economics over at cnn, including president trump himself who is trying to take credit for the current administration's economic policies. they need to recognize the pathetic weakness of their own anti-capitalist agenda. joining me a man who knows a thinger. >> two about creating growth. art laffer, president reagan's' economic advisor. and economist donald rurks skin. -- donald ruskin. donald, little start with you. some folks over at cnn who don't understand the economy actually want to believe that the success we are seeing right now is somehow aattributable to barack obama's policies. what do you say to that? >> in 2008 when barack obama won the presidential nomination for the democratic party he said this was the moment when the rise of the oceans began to slow and the planet begins to heal. this guy is a first class messianic narcissist. so don't be surpri

jay powell will be appearing with janet yellen and ben bernanke for a joint interview at the annual meetingf the american economic forum in atlanta. still ahead, president trump tied the rising stock market to his administration. what happened now that has taken a tumble? we will take a look at the year that was in markets. life from new york, this is bloomberg. ♪ david: you are watching "balance of power." i am david westin. president trump has touted the stock market as a symbol of his success. it doesn't look like quite the symbol at the end of the year as it it in the beginning. abigail doolittle is here to take us through what turned out to be a difficult year in the markets. abigail: president trump was happy to address the gains for the market. it to my knowledge, hasn't been talking about the recent tumble. sums up the year we have had. here we have the major averages and we see through september 30 we did have the major averages all higher, a continuation of the bull market of the last decade. this16 and 2017, then come first quarter, the bidding of october, take a look at the move

the leadership team faces the most difficult challenge since chairman bernanke confronted 2007.osing the u.s. economy can sustain strong performance next year but it can ill afford a major policy error. the dollar.dound on kamal sharma with us from bank of america. what is your dollar call right now and how was that linked to the choices of chairman powell? kamal: we think the dollar will come under pressure in 2019. looks morerm outlook challenging for currencies to appreciate. has priced in quite a significant amount of tightening. the market is looking for a dovish powell. risksare asymmetric building. is that enough to end the distress of the dollar? probably not. some a acceleration of free patch ration flows by corporate america. we expect that -- some acceleration of repatriation flows by corporate america. we expect that to continue. not necessarily u.s. policy, but it is about what other central banks start to do and we expect given the ecb has ended qe, to start firming up its forward guidance on the rate hike. tom: let me look at the dollar. this is the dollar index,

you had chairman bernanke at your annual meeting and other advisors.tral bank that is the world's central bank? joachim: yes, clearly the fed is central bank. there is dollar liquidity in the world. the fed is driving the cycle, and we saw this year when they started to run down the balance sheet, cap hiking interest rates, and the reaction is that foreign stocks went down and emerging markets got more volatile. centralis the world's bank and its mandate is a national one, so it is reluctant to accept that role. francine: we were interviewing stan druckenmiller, and he explained about indicators that in the past looking at an imminent recession. what indicators do you look at four and imminent recession? joachim: we are trying to look at everything. we are looking at big data, a wide range of economic indicators. we put them in quantitative models and what the models spit out is an average recession probability over the next year like 30%. francine: is that quite high? joachim: it is quite high, the highest in this expansion, but not before the recessi

difference between new york and here that maybe tolerates some of this behavior and do you think that ben bernankeis a big part are not necessarily? >> those are good questions. to be honest, i've been to dc before but not enough to know enough about the cultural differences. i can tell you there is a very big difference in terms of people who work in the private sector and what i encountered working at the regulatory sector because people that work at the private sector when you are working for a particular bank as a team and you want your bank to win and be trusted and have more customers because more customers needs more money which means everybody in the bank is better off. so i think people from the industry were shocked to see how it was for goldman and how unfair it was altogether banks and the systemic risk of having a bank that can go about its business without having to comply in the american rule of law and what kind of systemic risk does that create so i can tell you about the difference in those cultures but i can't tell you about dc. so sh he was the head of the federal reserve and a

but only the equivalent of maybe three eighths but when the fedex up and downed balance sheet ben bernankeeason they expanded first time we needed negative percent rate which we couldn't have, buy long-term bonds expanding balance sheet and that would create environment that would be equivalent of minus 2% fund rate, at that point he said that expanding the balance sheet was worth 2 percentage points. they did it 3 more times, how is shrinking it only the reqif lent -- equivalent. lauren: what is the best thing jay powell can say tomorrow? >> that they need to see further escalation in pressures and likely to take a break, if they don't raise interest rates tomorrow, they need to make it clear that this was an economic division and not political decision. lauren: mark, thanks for your input this morning, we will see what happens. >> great to be with you. lauren: wages up 3.93% year over year. cheryl: a lot of people are looking for signs, if they are going to be data dependent, what should they do, influential voices telling them especially today don't hike rates, let's bring in rebecca an