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in the hot seat today, two former executives of citigroup, which got a $45 billion taxpayer bailout. senior business correspondent anthony mason tells us they testified they never saw the mortgage meltdown coming but the commission chairman said they should have. >> let me start by saying i'm sorry. >> reporter: charles prince, citigroup's former c.e.o., and robert rubin, the bank's former board chairman, apologize for not foreseeing the financial crisis. >> and i deeply regret that. >> reporter: rubin, a former treasury secretary, who earned $15 million a year as a citigroup executive, insisted he played only an advisory role. >> i was not involved, as you correctly say, in the management of the people or the personnel. >> reporter: the panel wasn't buying it. >> you either were pulling the 11ers or asleep at the switch. >> reporter: citigroup suffered $30 billion in mortgage-related losses, but another former executive revealed he started raising red flags back in 2006. >> i specifically warned mr. rugein about the extreme risks in unrecognized financial losses that existed within

those statements fly in the face of what a former citigroup employee told the commission earlier this week.. richard bowen iii - former citigroup senior vice president and chief underwriter said "in mid-2006 i discovered that over 60% of these mortgages purchased and sold were defective. i started issuing warnings in june of 2006 and attempted to get management to address these critical risk issues. these warnings continued through 2007 and went to all levels of the consumer lending group." citi's former ceo said he was deeply sorry for their failure... but did not accept blame. the government invests more than a billion dollars in wind energy...but when is it going to pay off? plus...viewers question the government's move to force all americans to buy health insurance or face fines. the u-s government has invested heavily in wind and other renewable energy projects through the american recovery and reinvestment act. analysis of the stimulus plan shows uncle sam spent just over a billion dollars on renewable energy development in 2009, with another 3-billion plus planned for this year

citigroup does business in 100 countries. lehman brothers when it failed at more than 600,000 ( evidence contracts in london. the london operation of lehman was of the trade it every day. there was no warrior on the monday after of lehman brothers field on sunday night. the u.s. government doesn't have the legal right nor will it ever have the legal right to manage what happens to that subsidiary of lehman or the next equivalent in another country. you can go talk to the g20 actually you probably can't but i can and i have and i put it to them like this that they will not allow and agree to a cross border resolution author ready which is would be required to apply with the treasury says it is doing to make it work across the world. the g20 will not agree. they can't even get one with in europe. the imf has been urging the european union and even more specifically the year roseau which is no share of currency, one central bank has been pushing them hard to come up with a cross border resolution of 40 or mechanism to deal with

let's talk about citigroup. citigroup when it failed, i'm sorry, ran into liquidity difficulties.i always forget. [laughter] in falcon, 2008 it was a 5.3 trillion other banks -- to print 5 trillion. let me ask if citigroup had been a 5 trillion-dollar bank september, 2008 with the problems be better or worse? what if citigroup started to approach or jpmorgan chase by the we started to approach the size of scotland relative to the u.k. economy? what if we had a bank that was $10 trillion or $20 trillion? , and don't kid yourselves and don't say this couldn't happen, the increasing scale, and, it absolutely could happen. look at the school the last 15, 20 years and the advantages they have now. making our biggest banks smaller is not a sufficient condition for financial stability and avoiding major crisis in this country but it is necessary. and this is what i was arguing on the capitol hill. show me how you make goldman sachs safe without making it smaller, a lot smaller. the financial institution we let failed last year in this country was the csat group that had a balance of abou

what i'm asking you, nicole, if there's -- let's take citigroup. i don't want to demean citigroup, but i'm just saying right now we are in financial recovery. what if citigroup can't make it? should they be put in bankruptcy court, nicole? >> the financial holding companies that do not go through the fdic should go through bankruptcy court. in 1990 drexel went through bankruptcy court. in 1995 bearings went through bankruptcy court in europe. the only reason the firms cannot go through bankruptcy today is because you have two problems that overwhelm the system. the answer is not to reinvent the system, it's to address those two problems. too much leverage based on what the government is telling you is safe and what is not safe. you've got the washington and the rest of the world's western government saying certain aaa rated securities are so safe, the banks don't have to put very much capital behind these securities. that means, instead of markets making millions of different mistakes, they're all making the same mistake all at once, which overwhel

citigroup is moving up. for all the damage that happened on friday, look, goldman's down fractionally here today, but basically, we've recovered pretty much here. this is not a bad open here overall. the important thing is, the numbers on citi are continuing to point in the right direction. and look, erin, here, 60% decline in charge-off, nonperforming assets were down 10%. that's the key thing that you're looking for here. lower expenses. there was a 5% or 6% decline in expenses as well, but it wasn't just that. topline gro growth. >> and their capital ratios keep going up. >> that's right. >> they were at 8%, now at 11%. probably higher than they need to be. >> loan losses continuing to go down. there's your big trend and citigroup nicely on the up side. it's up, oh, over 30% so far this year. the thing that worries me a little bit, and this is good for consumers that we're continuing so ee natural gas and oil down noticeably, but it's affecting the big energy names. halliburton had good comments in their

of citigroup and mr. robert rubin, the former treasury secretary of the united states of america, as well as the chairman of the executive -- former chairman of the executive committee of the board of directors of citigroup. thank you, gentlemen, for being with us here this morning. what i'd like to do to start off as we are doing with all witnesses who appear before us in the course of our hearings, both before you and after you, is we are customarily swearing every witness in, so with that, i'd like to ask each of you, both of you, to please stand up, so that i can swear you in front of the commission. [witnesses sworn in] >> thank you very much. gentlemen, you have provided us with written testimony, which we have in hand and i'm going to ask each of you this morning to provide us with oral testimony of not to exceed 10 minutes. and so with really no further ado, mr. prince, i will ask you to start this morning. please turn on the microphones and pull them as closely to you as you can and let's commenc

meantime, let's talk citigroup. treasury announcing today that morgan stanley could come to market with some of the 7.7 billion shares that the government owns, goes to market. jeff hart of sandler o'neill has been bullish on citi for quite some time. jeff, explain to me, if all these shares hilt the market, how does the stock go higher? at what point do you say -- >> jeff harte remains bullish on citigroup. >> ooh, third person. >> that's extremely bullish. >> eight guys on the desk. >> the government's got 7.7 billion shares. >> yeah. >> institutional ownership is less than half what it is for all citigroup's shares. if the institutions, specifically the mutual funds, go to equal weight, that's more than 7.5 billion shares. there's your incremental buyer -- >> do they have to wait till the stock hits and stays above $5? >> no. >> okay. >> hardly at all. in certain cases, yes, that's true. but it's dependent on each fund's mandate. and in most cases more of a function of a total market cap and the volatility. not t

and and that made me kind of think about what the head of citigroup the then head of citigroup charles print said in 2007 where people said to him at a public meeting these markets are dustin same lawyer you continuing to put money into the subprime mortgages and everything else for a very little compensation and he said the music is still planning and why all this planning you have to get up and dance. it seems very similar. what kind of regulations can help people who are just caught up in this global mentality the kind of know what is going on but they don't want to admit and at some point they can't because they will lose their customers, they will lose market share as he had said to his customers this is a bad deal they would have taken their money to someone else who would have put it with mr. madoff with citigroup if they stopped everyone would have put their investment somewhere else. can you stop that from happening or is that just another thing where it is a fact of life? >> guest: its life. you can't stop dishonesty. he will always have those character traits. more money has

why the focus on citigroup? they are surely not alone in this financial melt in. >> guest: they are not alone and we've asked the commission is. the very first of hearings at j.p. morgan, citi, bank of america, morgan stanley, but not citi and everyone was asking where is it? we're told just a way. so right now they're looking at citigroup as kind of as an example of one of the most extreme cases of the securitization that's gone on. where mortgages, many of them subprime mortgages that were bot i buyers who had not otherwise be qualified for home mortgage. were packaged and sold by citigroup to investors. but at such a high rate that investors, when underlying mortgages if there's a big into default, that created a cascading series of actions that lp repair the financial system. >> host: the folks at the financial times were a trick so much it was front page headline coverage of the fact that citi relied on outside advisors on its decisions about securitization. did you find it interesting? >> guest: i found it

and then did that made me kind of think about what the head of citigroup or that i'm not head of citigroup, charles prince, 72,007, where people said to another public meeting, these markets are just insane. where you continue to put money into the subprime mortgages and everything else for very little compensation. and he said, the music is so plain about the music is playing you got to get up and dance. it seems very similar. what kind of regulations can all people who are just come up in this mentality. they kind of know what's going on, but they don't want to admit it. and at some point they can do because the loose their customers, market shares, if he is said to his customers this is a bad deal, they would've taken their money to someone else who would have put it with mr. madoff. the same thing with citigroup is they've stopped everyone would've put their their investment somewhere else. can we stop that from happening or is that another thing worth five? >> guest: i think it likes. you can't thought greed, stupidity or dishonesty. you're always wonder if those character traits. mor

citigroup, jp morgan chase, and u.s. bancorp actually fell. but you're right, the u.s. bank index was up. what would it take to gain your

apologies today from two men who were once powerful leaders at citigroup. tom, it was a quite a moment on capitol hill-- charles prince, the former ceo, and robert rubin, an influential advisor to the bank, admitted they made mistakes that contributed to the financial crisis. >> tom: susie, it was day two of hearings looking into the causes of the meltdown. and the panel members were just as tough on citi's big wigs today as they were on alan greenspan yesterday. >> suzanne: tom, as far as the panel was concerned, "sorry" just wasn't good enough. washington bureau chief darren gersh reports. >> reporter: former citigroup ceo charles prince said the two words many people have been waiting to hear from a top banker. >> i'm sorry. i'm sorry that the financial crisis has had such a devastating financial impact on our country. i'm sorry for the millions of people, average americans, who have lost their homes. and i'm sorry that our management team, starting with me, like so many others, could not see the unprecedented market collapse that lay before us. >> repor

one that are too big to fail like jp morgan, like bank of america, like citigroup. and they're going to have the inherent advantage of lower cost of capital, because they're a member of that special club. why is there two classes of banks created here as opposed to breaking up the megabanks and restoring fairness and democracy in this country? >> well, as you know, what i've proposed, it may be simplistic. but i think it really gets the job done. and that is to say, we want banks to get back to doing what banks do. and banks that pay the insurance corporation, need to, if they want to continue to do risky swaps, take those operations out. set them apart. they're going to take that risky operation out and it's going to require more capital and it's going to require more regulation. but making sure that banks do what banks do, and if they want to do more, then they need to move that operation out. and that's what we're going to be trying to do out of the ag committee, which we did mark up, and i feel good about that. and i hope that we'll continue to stay on that cour

morgan chase, citigroup, bank of america, and wells fargo. they have enriched themselves handsomely. they doubled their importance since the beginning of this crisis while quashing community banks across this country, seeing forced mergers and institutions like p.n.c. bought up as local community banks that didn't do anything wrong and were not permitted to do

of citigroup as he testified yesterday before the financial crisis inquiry commission looking into what happened with the financial bailout of wall street and banks and what led to the crisis. we want to ask you on this friday morning, if you were to question one of these bank officials, one of these wall street executives, what would you ask them? here's how you can participate. 202-737-0001, our line for republicans. 202-737-0002 for democrats. and if you're an independent, 202-628-0205. you can also join the conversation online at c-span's twitter page and also send us an email to journal@c-span.org. here's how the story is playing out in the "financial times" as he apologizes for losses, and inside is this story, saying that for nearly three hours mr. rubin, the former treasury secretary and director of citigroup, and chuck whins, who you heard just a moment ago, the former chief executive, did manage to work they are way through questions from this commission. indeed, even though technicians had to be called in to fix the hearing room's air conditioning system halfway through the s

federer you find errors and oversight of citigroup. what the focus on citigroup? they are certainly not alone. guest: they are not alone. we asked the commission this. the first set of hearings had chief executives of four big banks -- j.p. morgan, citi, bankamerica, morgan stanley, -- citigroup, bank of america, morgan stanley, but not citi. basically looking at citigroup as an example of one of the extreme cases of securitization going on where mortgages, many of them subprime, bought by by years that otherwise would not be qualified for a home mortgage were packaged and sold by citigroup to investors. at such a high rate, so that when the underlying mortgages began to default, that created a cascading series of reactions appeared -- reactions. host: folks at "the financial times" were so intrigued, headline coverage on the fact that citi relied on outside advisers on its decisions on to jordan nations. did you find it interesting as well? guest: i found it interesting, but one of them things about securitization and why it is difficult to explain and one thing

he wasn't from citigroup. and this gentleman to his eternal credit and i think a deep reflection on his honesty said is that the time? i have to go to the airport. that was his answer. there is no answer. the resolution of ravee is an illusion and it's a dangerous illusion. if you take that off the table and remove that from the rhetoric you see on the proposals before you and congress you have nothing that would deal with too big to fail. you have measures the would protect consumers. we support in the book. i think elizabeth warren has led the charge on that admirably the past few years and it helped shift a consensus and that is what we need to do now on the too big to fail on the size of the banks, the size of biggest banks shift the consensus. there is no evidence and i mean really no evidence. economies of scale or scope or other social benefits to an increasing banks' scale above $100 billion of total assets and we are talking about banks in the trillions of dollars. actually we can argue how compelling

that may make kind of think about what the head of citigroup for this and other citigroup charles princeaid in 2007, where people said to them in a public meeting, these markets are just insane. wary continuing to put money into the subprime mortgages and everything else for very little compensation? he said the music is so plain about the music is kind of got to get up and dance, which seems very similar. what kind of regulations can help people who are just caught up in this mentality? the kind of know what's going on, but they don't want to admit it. in point they can amend it can sell to their customers as they'll lose market that mr. bellow said he had said to us customers is a bad deal that would've taken the money to someone else who would've put it with mr. madoff print anything with citigroup if it stops, everyone would've put their investment somewhere else. can we stop that from happening? >> guest: i think its life. you can't stop stupidity or dishonesty. or splinter of those character traits. more money has been lost. reaching for yield or investing on whiskers investment sc

in this scenario, citigroup is faced with concentration risk. did you do anything about it or look at that or at that point regis stock? >> no, no. that working paper engendered a lot of discussion, re-examination of how we were treating it. there're many more people involved that were on the distribution list. and again it was decided that the product was priced appropriately, marked appropriately because we were seeing products that had as many comparable element, sufficient comparable element at higher levels than that. and again, as i said before, the credit risk component was marked as if it was already on the books. >> all right. here's the final list of questions. mr. bushnell, and going to submit some questions to you. you made a comment on october, 2007 internally and it was a presentation to the yours and so i am going to ask him questions for you about that presentation, which was basically review of the current environment. and i do want to ask you so you might begin preparing. good noted significant events into one of these to asset

let's talk about citigroup. citigroup, when it felt -- ran into liquidity difficulties. i always forget. [laughter] >> in the fall of 2008 was a 2.5 toy dollar bank. 2.5 trillion. if citigroup had been a 5 trillion-dollar bank, in september 200 2008 what are pros not be better or worse? what if citigroup start to approach, or mortgages by the way, started to approach the size of the royal bank of scotland? what if we had a bank that was tenderly in dollars or $20 trillion? and don't kid yourselves, don't say this couldn't possibly happen. it absolutely could have been. look at all the advantages they have now. making our biggest banks smaller is not a sufficient condition of financial stability and avoid major crisis in this country, but it is necessary. and this is what i was just arguing on capitol hill. show me how you make goldman sachs safe without making it smaller, and lots more. largest financial institution we let that was the aig group. goldman sachs balance sheet, 1.1 trillion before the crisis, around 800 billion now. cit group screamed that if they were allo

let me now turn to citigroup more specifically. my role at citi defined at the outset was to engage with clients across the bank's businesses here and abroad, to meet with foreign public officials for a bank present if 102 countries and to serve as a resource to the bank's senior management with respect to strategic and managerial matters. having spent my career in positions with significant operational responsibility, at treasury and prior to that at goldman sachs, i no longer wanted such a role at this stage of my life, and my agreement with citi provided that i ought to have no management of personnel or operations. i remained at citi until january 2009, and so was present when citi's problems occurred. in my view, there were two primary causes of these problems. first, citi, like other financial institutions, suffered large losses due to the financial crisis. i am told that citi has subsequently analyzed the data made available in connection with the 2009 stress tests, and has estimated that the losses in citi's businesses, oth

head of mortgage group of citigroup global market group.ecuritization and underwriting mortgage back securities within citi investment bank. commission asked me to address the securitization activities of my group including our business model and our due diligence activities with emphasis on securitization of subprime and alt-a residential mortgages. i have done so in greater lent in written statement for the record. let address a few key points for you now. first while mortgage trading and securitization activities were part of intermediation business. we purchased mortgage loans from originators and sold the securities to sophisticated institutional investors. our objectively in purchasing mortgages, securitize them and distribute resulting mortgage bonds to meet demand from fixed income investors. secondly, citi's rmbs business was smaller than the rmbs business at many other wall street firms. publicly available tables show we ranked 7th in underwriting mortgage-backed securities in 2004, 10th in 2000 five. 11th in 2006. and 10th in 2

citigroup down as much as everybody else. i can't say that announcement is damaging the financials of citigroup. because they're all to the downside. goldman has been weak. goldman was $180 a few days ago. morgan stanley is holding up all right. jp morgan, that stock was $48 a few day ago. we're clearly seeing some pressure. these are the biggest names that are out there, the ones that would be the most affected by financial regulatory reform. remember that bill that came out of agriculture last week essentially prohibiting these guys from acting as swaps dealers, that's still in there right now. >> definitely causing some prep dags within t-- trepidation within the financial sector. >> when you look at the whirlpool number and see what's going on with the raising of estimates, how rare it is when you get a company that has 6.50 to $7 for the year, now whirlpool is talking $8 to $8.50. when you get unit growth rate of north american up 11% when that was the weakest area for them, that's a sign that things are getting better.

of citigroup and mr. the former treasury secretary of the united states of america, as well as the chairman of the executive -- former chairman of the executive committee of the board of directors of citigroup. thank you, gentlemen, for being with us here this morning. what i'd like to do to start off as we are doing with all witnesses who appear before us in the course of our hearings, both before you and after you, is we are customarily swearing every witness in, so with that, i'd like to ask each of you, both of you, to please stand up, so that i can swear you in front of the commission. [witnesses sworn in] >> thank you very much. gentlemen, you have provided us with written testimony, which we have in hand and i'm going to ask each of you this morning to provide us with oral testimony of not to exceed 10 minutes. and so with really no further ado, mr. prince, i will ask you to start this morning. please turn on the microphones and pull them as closely to you as you can and let's commence. mr. prince?

let me now turn to citigroup.role at citi defined at the outset was to engage with clients across the bank's businesses here and abroad, to meet with foreign, public officials, and to serve as a resource for the bank's senior management with respect to strategic and managerial matters. having spent my career in positions with significant operational responsibility at treasury and goldman sachs, and no longer wanted such a role my agreement with citi included that -- wanted such a role. my agreement with citi included that i would not manage personnel. i was present when citi's problems occurred. in my view, there were two primary causes. first, citi, like other financial institutions, suffered large losses due to the financial crisis. i am told that citi has analyzed the data made available in connection with the 2009 stress tests and has estimated that the losses in citi's businesses, other than cdo's, were roughly comparable to peer firms. this ever distinctively high -- base suffered -- they suffered distinctiv

citigroup is not constrained by the limbs of our country.ore than half of its revenues came from other countries. pnc and huntington bank both up big, thanks again, revenue growth, we don't just want better credit, we want actual growth, and these three have it, which is why they have run so much and belong on our shopping list for the next time the market gets downs. hey, by the way, hunting ton, i don't want you to chase -- by citigroup at $4.89. mouth watering. existing home sales going new march. you better believe housing is coming back. total supply of homes declining. standard pacific, spf, you know we like that. 40% is buying land. precursor to growth because you don't buy land and build houses unless you can sell them. that's the sign we've been waiting for. house prices appreciation is now at last here. on one of its most recent conference calls they talked about the markets were up an average of 40%. couples were able to get fabulous deals in virginia. spf, perfect play on housing. we also like what goes into housing. pier one, sh

treasury gets to vote as shareholder when there are issues at citigroup.was the first of four proxy votes on whether the open, whether to open the secret derivatives market to more transparency voluntarily at citigroup. guess who voted against the resolution calling for greater disclosure? at least in part -- yes, your government. the same one that last week claimed, we cannot afford to wait to fix our flawed, outdated regulatory system. to bring transparency and oversight to derivatives. a nice sentiment from the treasury. but if it's really the case and the lobbyists aren't controlling what happens on behalf of the banks so they can continue to gamble on an infinite level in secret, then why did you miss today's opportunity to shed some light on the shadow banking that exists in the derivatives market? >>> and finally the supreme court, even more out of touch than you might have thought, during arguments in a case about text messaging, chief justice john roberts asked what's the difference between email and a pager? and justice antonin scalia apparently

go by citigroup. vikram pandit. >> growth, go by citigroup. some would say i never heard the day that would come out of anybody's mouth. >> this is the best quarter we've had. >> when that conference quarter went on you have david viniar and greg palm, the general council sitting there, does lloyd sit in the room and make wild motions on mute or force him to go into another room? i'm just wondering. >> i think david viniar is fabulous but they'll probably put me in the jurms of jail for saying that. he's a great guy, honest and terrific. you dpee fend these guys these days and someone says cramer is on the take. even i get beleaguered. i'm like a nonstop machine. i am beleaguered by it. >> beleaguered. >> goldman, catch me a couple months, i'll give you the complete skinny. it's too hard. everybody who is playing. i saw the protection the insurance and the puts, they're out of control. there's analyst who is want to make their career bringing down goldman and the reporters who want to make their career bringing down goldman. me, what i say, i

commission studying the causes of the financial crisis on a day they heard apologies from former citigroup executives. >> let me start by saying i'm sorry. i'm sorry that the financial crisis had such an impact on country. >> we all bear responsibility for not recognizing this and i deeply regret that. >> brown: we have the first of two reports on what members of congress are hearing about the new health care law. tonight, spencer michels follows a california republican back in his district for the spring recess. >> the notion that somehow we can provide free health insurance for 32 million people without adding to the deficit or costing tax payers is simply absurd. >> brown: and, we close with a look at the many stories concerning the return of tiger woods with sports writer john feinstein. >> lehrer: that's all ahead on tonight's "newshour." major funding for the pbs newshour has been provided by: >> what the world needs now is energy. the energy to get the economy humming again. the energy to tackle challenges like climate change. what if that energy came from an energy company? everyda

. >> you are making final preparations to sell the government stake in citigroup, the 27% stake. why now? ite points out how far we've come. we've had $135 billion of the taxpayers investments come back to the treasury because we forced these institutions to go out and raise private capital to replace the public's investments, and we've earned about $20 billion of profits on those investments. this is just the next stage of us moving to make sure we're getting out of the financial system as quickly as we can, because we don't want to be in the business of owning a share in a private company a day longer than necessary. it's just a sign of how much progress we've maerd already. >> now, if the bank has paid back the money and the treasury, the taxpayers have made so much money on this, why should they have to go through a further process of paying money into the fund to pay for the mistakes? >> the government is still exposed to risk over a loss for the actions we had to take to put out the financial fire. the taxpayer shouldn't have to bear any of those losses. congress required u

they will be looking into some prime lending and citigroup. c-span2 will have live coverage of all of this week's hearings. the commission hears testimony from former federal reserve chairman alan greenspan. they will also hear from former city group risk managers. you can watch it live on c-span2 and at c-span.org. >> all this month, see the winners of the student can documentary competition. middle and high school students from 45 states submitted videos on one of the country's greatest strength or challenge the country is facing. watch the top winning videos every morning on c-span at 6:15 just before washington journal and at 8:30 meet the students who made them and for a preview of all the winners visit studentcam.org. the secretary of the department of health and human services, kathleen sebelius was at the press comes yesterday to talk about health care bill signed into law and what her agency is doing to implement it. this is an hour. [inaudible conversations] >> good afternoon and welcome to the national press club. i am a reporter fo

but according to prince, rubin didn't have any responsibility for what happened to citigroup.at's the story they gave today. keeping them honest, we're joined by andrew ross sorkin, the author of "too big to fail." andrew, it's pretty incredible. we heard some apologies today from bank executives, but certainly that's no comfort to so many americans who have lost their homes, lost their savings and essentially these bankers are repeating this theme that we've heard over and over again from them that the crisis was unforeseeable. but, i mean, that's not true. >> there were no real apologies today. i think that they said they were sorry. they said that they were regretful, but they were regretful, what they said was, for not being more pressient. that's what stuck with a lot of people, that it wasn't a true mea culpa. >> you would think these highly paid people, supposedly experts in this, would have had their eyes open. >> when you think about frankly the numbers, the money, and when you think about robert rubin who spoke in front of this commission today, when you think about

the financials like jpmorgan, bank of america, and perhaps citigroup. and the high-quality stocks with upcoming reports. i'm speaking of boeing and ford as well as amazon and, yes, my long-term favorite, apple. ron in alabama. roll -- ron. >> caller: good evening, mr. cramer. >> good evening, sir. how are you? >> caller: fine, thank you. and i appreciate your entertaining education. it's been very helpful, sir. >> thank you. >> caller: this afternoon we got the goldman bomb dropped on us, and the herd panicked and all the dominoes fell in the financials. >> right. >> caller: i'm thinking that right now is probably a good time to increase position in huntington bank. what are your thoughts, sir? >> well, you know what? that is a really good idea. i had some friends who visited the bank recently. nothing inside information. just a good chat. and i'm feeling better and better about this high-quality jersey bank. it is true they did have some bad loans but it's time to revisit the regionals that didn't screw up, first merit, people's bank -- pbct. the stock

we will probe the actions of the office of the controller of the currency as it oversaw citigroup and other financial institutions, engaged in the subprime market, and we will look at what happened at fannie mae and its regulator as the crisis unfolded. as we have noted before, this commission is a proxy for the american people. perhaps the only opportunity to have their questions asked and answered on their behalf, we hope to take stock of what happened, so we can learn from it and restore faith in hour economic system. as always, we welcome your thoughts and input. in that regard, we have posted on our web site, draft preliminary of staff reports for review and comment. those can be found at fcic.gov. these reports have not been adopted by the commission and we invite you to submit your comments by may 15th. today's hearing is another step along the road in hour inquiry. we hope it will further our and the public's understanding of what has happened. we need candor about the past, so we can face the future. i'd now like to ask vice chairman thomas to make some opening reparks along

citigroup does business in about 100 countries. lehman brothers, when it failed at more than 600,000 in london. the london operation of lehman operates on the basis of money that was white from new york and started every trading day. there was no wire on the monday. the u.s. government doesn't have the legal right nor will ever have the legal right to manage only the next equivalent in another country. you can go talk to did she try deputy. actually you probably can't, but i can and i have and i put it to them like this, that they will not allow, agree to a cross-border resolution authority, which is what would be required to apply with the treasury says it doing, but to really make that work across the world. the g20 will not agree to that. they can even get one within europe. it's very interesting. the imf has been urging the european union and even more specifically the euro sound, as you know, shows the currency is one special thing. it's been really pushing it hard to come up with a cross-border resolution authority or mechani

whether it's fannie or freddie or goldman sachs or citigroup, that -- they did exactly the same thing. that's the problem. >> i think there's another story, but the moral of that important story, bob reich is, end too big to fail and get rid of these government enterprises. >> larry, this is important, the resolution authority that's built into the senate bill and probably the house bill, that is not going to be enough. you know as well as i do, if they big companies, if they start going down, they're all using the same techniques, the same profit-making strategies, if they start going down, there won't be enough resolution authority or enough will not to bail them out. you have to control their size, you've got to put a maximum on the size that these companies -- >> i don't agree with that. first of all, i think we all agree we have to get rid of too big to fail. i think it just means you set rules that basically wipe out the shareholders if these companies like citi made bad decision. >> you're too much of a lefty on this. i'm shocked. >> hold on, back to fannie mae and freddie mac,

i'm mary thompson outside the hilton where citigroup is holding its annual shareholder meeting, the third meeting for vikram pandit. the last two, the cbo received or heard an earful from the hundreds of investors who attend these annual gatherings. we had a chance to speak to a couple of them before they went into the meeting and asked them to give us their review on the board and the management over the last year. and those reviews were mixed. >> i think they're doing okay. i personally am going to hold on to it. >> i'm here, again, to express my displeasure with the board. particularly the fact that there are still incumbent members on the board that have taken us through this entire financial debacle and reduced our company from what was to what it is now. >> one of those incumbents, dick parsens, arriving earlier today. he's revamped a board which now includes four new members. most of the directors arriving together earlier this morning. now when pandit takes the stage, does he so knowing the company he runs is in better shape than it was last year. fresh off of strong first quarter

we already have resolution authorities for the fdic to deal with citigroup. it's just too big to sell off its pieces. when that bank fails, they basically had to bail it out. now they'll have a $50 billion bailout fund. heck. citigroup alone cost that much, and then a guarantee, $325 billion of its loan. we don't know what that really mean. never mind the other institutions. i don't think we've gotten our arms around this problem. s displaced. other things more fundamental that need to be addressed u. mentioned derivatives. i want to talk about something the former president bill clinton said over the past week to another -- did you get bad advice from larry and paul when you were president of the united states and was it a mistake not to regulate derivative 15 years ago? this is what he said. >> now, on derivatives, yeah i think they were wrong and i was wrong to take it, because the argument on derivatives was that these thing, expensive and sophisticated, and only a handful of investors will buy them. >> doug, should we have been regulating derivative as l

citigroup would have to cut or eliminate its dividend a week before they actually do. she seems to know more about what is going on then the people that run the companies. she was actually kind of condescending today's wall street people. -- tds wall street people. -- to these wall street people. she made such cents that she persuaded me early on that the wall street firms have become the down money at the table. when i left salomon brothers, the last thing you wanted to do if you were an investor what was to be on the other side of one of salomon brothers trades. you were sure to lose money. some firms had turned a stupid as institutions. they became the dumb money. that made me curious. something big had changed. the natural question was, who is the smart money? >> there is another word throughout your book besides the f-word, the word "lie." i want to read one paragraph. >> it is not a word that i am using, but a word that the character uses. >> i am pulling this out of page 174. >> is that fair? >> is it fair? >> yes. >> it is a pure and free -- interpretation of h

i doubt that deutsche bank or bank america, merrill, or citigroup has such a smoking gun in their closet. if they don't, they are being unfairly tarred with this move. >> thank you, jon. always a pleasure to see you. tonight on "fast money" and optionsactio optionsactionsstrategy.com. >>> the dow was down as much as 170 points earlier. but, guess what? we are only down 107. okay. so well off of the lows. nasdaq, also, in the red. >> and the damage really is financials and materials, but the commodities dropped and they never really recovered on that. up next, we will breakdown what the goldman fraud charges will have on the outlook of brokerage stocks. and later we will debate whether this news could derail the market rally and send stocks tumbling into a market correction. >>> and welcome back. goldman sachs shares falling sharply following the s.e.c.'s fraud charges, but how are the rest of the brokers trading? matt nesto takes a look. >> well, thank you, bob. it is pretty complicated if you look at the intraday comparison and i used the broker dealer index which is not the best, but i

it was carved out of citigroup at $15 a share. wireless network firm meru hit the street on wednesday at $15 and has had a nice run. s.s.&c. technologies is a financial service tech firm. it also came out at $15. and oil tanker operator scorpio tankers made its debut on wednesday at $13 per share. and that's tonight's "market focus." >> tom: with trillions of dollars in government spending on the books and consumers trying to dig out from a mountain of debt, tonight's "market monitor" guest is dialing back his expectations for the stock market. he's randall eley, president of the edgar lomax company, an investment advisory firm based in springfield, virginia. and welcome back to nightly business report. >> good to see you, tom. >> so before we talk about expectations from stock market returns what kind of shape do you think the balance sheet is in for the government and for households? >> it's getting worse. but starting from a strong point, so we're still the richest country in the world. and that gives us a lot to work with. at

there's the one-year chart of citigroup. half the traders were saying, look, that's the right thing to do and showed real leadership and the other half said, you got to be kidding me. not good asset management in general. >> by the way, i want to go back to this retail before we go to jane. your thoughts? >> the important thing here is outperformference the year. the smart money has been long retail for the whole year. retail stocks up 12, 14, 15, 18% the s&p is only up 6% and they stayed long and smart money right on retail and i think you'll see some people unloading in the next couple minutes. >> bob pisani, thank you so much. some of the strength that we've seen in the consumer, we want to go to jane wells. >> hey, trish, march came in like a lion. thompson reuters reporting record same-store sales across 28 companies and that's 30% better than expected and retail metrics calling it a blowout with 8.7% growth. its highest growth figure in a decade. now, the best sector department stores with over 12% growth and apparel j

other witnesses include the citigroup risk managers who are expected to testify about their warnings to company executives. live coverage is on c-span 2 at 9:00 a.m. eastern. first lady michelle obama focused on childhood obesity and sits down with the studentcam winner from honolulu. that will be live on c-span this morning at 11:00 a.m. eastern. ble's greatest gift to -- latest gift to america. >> joining us now is the executive director of the center for auto safety. let me begin with the toyota possibility of getting a fine of $64 million from nhtsa. >> it is a well-deserved fine. first of all, toyota brag about saving $100 million in the format -- in the floormat recall. the imposition financially is peanuts. but it is a symbolic message more than a dollar a message. >> if it is peanuts, does congress me to increase the amount that nhtsa is allowed to find? >> absolutely. one judge imposed a $2.40 billion fine last year. the epa has an unlimited cap. if we matched the epa, it would be $25,000 a vehicle, and no cap whatsoever. >> and that is why nhtsa came forth with an unprecede

sure we still like citigroup very much. we liked it at $3.15. and i'm going to see him at the white house correspondents dinner. but i'll just give him a little heads up now. memo to treasury secretary tim geithner let me trade this one to citigroup cramerican style. i think you should hold the 30% stake in citi until the stock hits $6.15, one of my preliminary targets, then at 6.15 what you do is you sell half and you keep the rest to play with the house's money. i mean, you've got to do it. i've got your back. who's been more right on this one? anyway, what we're really looking for are speculative picks that like hban work away from sodom and gomorrah -- excuse me, of wall street. stocks like ford. which we recommended at $4. just like huntington. and now it's at 14. we still think it's a buy. why? because if gm is profitable and chrysler, for heaven's sake, is profitable, then ford, which unlike the other two didn't need government life sxurpt didn't have to go through bankruptcy, it must be shooting the lights out. i mean, it's like look out