that is a big part of i am bring mentation of dodd-frank -- implementation of dodd-frank. make sure it is clear and we know the rules of the road and it is not so overbaked it detures economic growth. david: let's talk about some tax rules. taxes are due to go up january 1st. we saw some type of negotiation in a public forum by speaker boehner yesterday and harry reid weighing in. phat do you think will happen there? are we going to have an increase in the top rate of taxes in the u.s.? >> well this fiscal cliff looms large. it is no longer a political debate or philosophical debate it is mathematical necessity. the walls of the fiscal cliff, the walls are moving in such they have to solve it. we prefer it would be done in timely and orderly manner so it doesn't disrupt the economy. the nonpartisan cbo, congressional budget office, if they don't address this the gdp could drop 3%, go into negative territory, in other words a recession. unemployment could go back up to 9% and another series of cascading developments. they must address this as soon as possible. i have writte

dodd/frank is the reform of president obama's first term.ail bailouts. some dodd/frank regulatory rules have yet to be written but president obama vows not to go back on its efforts. >> after all we've been through, i don't believe that rolling back regulations on wall street will help the small business woman expand or the laid off construction worker keep his home. >> critics say dodd-frank didn't go far enough and may have made big banks more dangerous. one of those critics is neil barofsky, assigned to monitor t.a.r.p., the $700 billion bailout. he's since written "bailout," an inside account of how washington abandoned mainstreet while defending wall street. look back at the polls in 2008 from finance, real estate, and insurance industries. in 2008 he can got more than mccain did. in 2012, that collapsed for president obama. he's not getting support from wall street on regulating anymore. >> no. one is they looked at what romney was offering which is a complete teardown of dodd/frank. the other thing that i think is very important to th

law i definitely in change change the intent section now we did a little bit to make it better in dodd frank in two thousand and ten but i'm convinced that we need to go even further and the idea is i mean the reason that we don't in the future is industry for example have things like bans on insider trading like they do in the spirit world is because we want people to trade on information they have we want them to bring all of the the very good facts and figures and senses that they have to the market that helps develop actual price discovery but i think we've aired too far letting people do anything and that this intense standard is way too high now so i hope that we relax it somewhat and then all enable us to ensure that we don't have to peel ation the future and the markets are devoid of manipulation or attempted manipulation so just to get a little bit more color i do i do want to talk about concentration are you familiar with the degree of concentration in the positions held by major investment bank traders in the silver amable of markets and do you think that any particular position i

you dismantle dodd frank? you're advocating? even jamie dimon admits there's need for regulation after the financial crisis. candidly, he calls it dodd frankenstein. that's more for shoe more effect than anything else. >> let me ask you this question. what policies do the federal reserve and what authority do the federal reserve not have to rein in the risk of citi corp.? >> what if they had no? >> yeah, what authority did they not have to rein in the risk of citicorp? >> well, they're not one only regulators. that's the problem. >> what's the answer? >> the problem that regulators aren't regulating. >> right. >> we don't need more regulations. every regulation that existed would have reined in, if the regulators had done their job, would have regulated the risks. they failed to do their job. >> so what you're saying is under obama, we will get more regulation for the financial services industry because of dodd frank. as a result of that, you'll see smaller banks go away, go out of business, et cetera. what ar

they concluded the protections in dodd- frank would work. let's give them a chance. it appears to be from work that makes sense. if you have other ideas, you can put the details on that. right down, the bulk of it is under too big to fail and it is a matter of law. host: final question? >> i have to ask you a policy question? guest: you have to? >> governor romney recently said president obama route 1 the election because of the guests to young black and hispanic voters. what to do make of these remarks? i did not see them but i heard about them. guest: if you look back at the election of 2012, when you have a product you put into the market place, and the marketplace does not buy it, you either have a better marketing or a better product. this is the wake-up call for the republican party to have better marketing republicans need to do better with female voters and blue-collar voters and latino and hispanic voters. we also need to have products that sell that. that does not mean you change your philosophy. i think president obama did a better job getting out the vote

>> sure, i mean, take dodd-frank talking about, that can affect access to credit for hundreds of millions of americans, and financial innovations and the kinds of products available to buy and businesses that don't know what kind of regulatory costs they're going to face, they'll have to make decisions whether or not to hire more people to invest. and these have costs to the economy. >> there's also a question of what we can do about this. i mean, with congress, congress can't stop it. >> and two terms by the congress. >>, but congress can't do much, the courts-- >> i mean, it's possible, now that the election is over, that you see some willingness among democrats to maybe paer back a few of these laws where they didn't want to acknowledge their failures before the election, but i wouldn't be that optimistic, yes, you've got some court challenges and there is reasonable constitution law for dodd-frank, for example and perhaps others. >> well, we saw what happened with the constitutional challenges, i wouldn't put that in the bank, all right, when we come back, talk to avoid the fiscal cli

if you believe the orderly resolution in dodd-frank prevents too big to fail. you need to explain why it didn't work for fedy and fannie. the woman here in front who has been patiently waiting. >> hi, ann stone. i was one of very few women in southeast united states that helped start and organize bank. went through the problems. we started at the height of the snl crisis. we were smart enough we had problems with the churl nirmt the bank that was causing concern to make profitable enough for bbt eventually bought it. it ended up being a good investment. i wanted to ask a lot of speculation was done when financial meltdown happened. that a couple of things were -- [inaudible] to the drivers of the crisis. one was the effect of the gse on the primary mortgage market and the personality age of risk that went up from -- and the change of the rule fsa rule 157. i wondered hue change in that rule could be done and nobody saw that it was going deval -- deval -- how somebody could not see that. second part as female, of course, a lot of there would have been less of a

for the door and one which we've seen recently is the final word that foreign exchange swaps from dodd frank derivatives regulation are exempt for context according to bloomberg big banks like u.b.s. and deutsche bank lobbied for this exemption and here is a sense of why foreign exchange contracts were the second largest source of derivatives trading revenue for u.s. bank holding companies in the second quarter the company's reported three point one billion dollars in revenue on trading of foreign exchange derivatives foreign exchange swaps and forwards are part of a four trillion dollar global daily market for foreign exchange but is that really all because actually it could be more than that our guest put together this chart showing outstanding over the counter derivatives take a look ok so making up the largest swath of that is interest rate swaps three hundred seventy nine point four trillion dollars there but does this exemption that timothy geithner gave to forex swaps essentially exempt interest rate swaps to now for ex wops and forwards are a thirty one point four trillion dollars bu

but dodd-frank is an example. the big banks really went wild and caused an enormous amount of harm. sector action caused an immense amount of economic pain. dodd-frank should be adjusted so we build up our small banks. >> all right, sir. >> and have not have them burdened. >> go on, liz. >> the president is not really running on dodd-frank, he's unable to run on his record and conducting this reelection campaign that's attacking mitt romney personally. and if tax and spend the way to go, why is california's unemployment rate upwards of 10% and worse than the national average? >> well, under obama it hasn't been tax and spend. >> i'm asking for the state of california, i'm sorry, sir, for the state of california. i beg your pardon for the state of california. >> well, i actually-- yeah, i know now the deal in california and they've got constitutional restrictions making it difficult to make adjustments and don't know enough about it to speak. stuart: well, president obama wants in a second-- president obama wants to raise taxes, raise taxes under obamacare, raise taxes on income tax,

she is expected to defend dodd frank and other existing regulation from republican attack as well as push new limits on banks. liz? liz: right. you know, howard lutnick of cantor fitzgerald was here yesterday. he said yes it will be hard tore scrape away profits for the financials, definitely. robert gray taking a look at two other very crucial sectors. robert: that's right, liz. you know, some folks out there, some investment managers that i follow and spoken with were constructing what they call sort of a romney portfolio or etf. among those were coal companies, stemming back to some of the debates there. they had done very well in run up to the election. not so well yesterday. little change in today's session. but they are definitely -- have taken the brunt of selling in yesterday's particularly. also take a look at defense stocks. now, this is partly on the play of obama being re-elected maybe not spending as much on defense as romney was expected to. but also part of fiscal cliff situation here, 500 billion dollars in defense spending cuts scheduled to kick in on january 2nd unl

there is that real danger. >> dodd-frank is a big piece of legislation. was very clear he would get rid of it. barack obama likes it. what is in there that keeps us safer and what needs to be fixed? >> one thing that is good is the consumer protection bureau. elizabeth warren -- >> who wouldn't have been running for office if the senate republicans had let her be nominated as head of the bureau, so now they have her in the senate. >> you may have been right the first time with senate democrats because chris dodd is the one who said she was unconfirmable. but any event, that bureau is something that has done really good work, is protecting consumers and having elizabeth warren in the senate to defend that institution from attacks from concongress on its funding is going to be important to watch. that's one of the really good things of dodd-frank is we have an agency now solely dedicated to consumer protection. that's one of the good things. >> good to see you again neil. >> and thanks for joining the conversation on "your money." we're here every saturday

dodd-frank by itself really doesn't do anything.orities to regulators to write implementing regulations, and i think the implementation has left a lot to be desired. i don't think there's been a lot of prioritization. most of the deadlines have been missed. there's been-- when the rules do come out, they're very complicated. they're very lengthy. they're riddled with exceptions, and that creates cynicism with people about why are they going to do any good? ironically, the industry, which frequently has lobbied for the exceptiones, attacks the regulators for having rules that are too complex. i think the regulators need to stop being pushed around. they need to stop listening to all this lobbying and requests for special exceptions, and just do their job and get the rules written, make them strong, and finalize them. >> rose: did whap happen because you think lobbying influenced the financial sector was successful? >> it was. and it was prior to the crisis. that's one of the reasons i wrote the book. i think main street needs to enga

it's still a good investment on return because he will lower their taxes deregulate and repeal dodd frank legislation well i don't really get why they would be mad and i tell you why because inequality gap is like the buzzword right now in the u.s. media there are estimates showing that in the last twenty years by the way with republicans and democrats equally the real income of the top one percent has been growing nine times faster than they really income of the lower ninety nine i mean the inequality gap which president obama does. about partly because of occupy wall street and the ninety nine percent movement which pushed him to speak about the greed and the recklessness of wall street and the inequality but is it an overrated issue the inequality gap know that really we're going to see it is it is a terrible issue and you're right that it has grown not just under republicans but under democrats it's a bipartisan issue over these last forty years workers' wages have stagnated and in the last two years ninety three percent of the income growth has gone to the top one percent this is a s

connected to wall street and would cooperate what i will call wall street's desire to downsize dodd frank and turn the agency into a much smaller, less active body. and i don't think elise walters will cooperate with that. she is truly oriented to consumers. >> susie: what do you think her priorities should be? >> well, i think she's going to be forced to deal with the problem of money market funds. that's on their agenda. all the other financial regulators have agreed that there is an urgent problem here. the sec has been stalemated and that stalemate may not go away but it's going to be back on the sec's desk in about two months with proposals from a body called the financial stability oversight commission. that's going to be their biggest crisis. beyond that i think elise is going to have to look at the enforcement crisis. no one in the country out there is very satisfied with a degree to which the agency has not gone after high ranking executives. that's partly a problem of cost because the agency is underfunded but i think the agency is not focused enough on the need to generate dete

of course that was not how obama's all dodd-frank. this is going to crack down. imposes new rules, but ultimately they will take the new rules of that means less competition. guess to the big loser is to make would-be competitors and the consumers. gerri: the small businesses in need those loans. before you go, is there a quick fix to this? what is it going to take to change the system? >> the reason there is no quick fixes because the guys you will have -- to control the leveraged , whether republicans or democrats, was the big banks. republicans are listening to the big banks. the closest thing to a quick fix is to say get government out of the game. that competition and free market work. republicans don't want that either because the big business that has their year also want this sort of protection regulation and bailouts. gerri: more stuff. thank you for coming out. you have to come back soon. if you are fired up about this like i am or any of the issues on the program, job me an e-mail. >> coming up on "the willis report," joyous americans have not collecte

there are good things i think dodd-frank has done. think it was good to strengthen capital, but you don't want to go overboard. but there are problems. the volcker rule to me is a cost on the industry. dennis: even though the business had nothing to do with the meltdown. >> trying to sniff out the criteria trading. it is central to the economy and central to the market. they haven't figured out a way yet to stop what they don't like. dennis: do we already know 100% of the details of dodd-frank and what it will do? >> a large percentage. this list o is still a substantl amount, but even more these rules are subject to the lack of cost-benefit analysis. we have a long period of uncertainty ahead of us, unfortunately. dennis: on one hand they're told to take down everything and then they're being yelled at for not lending. wilbanks continued to be bad guys in the obama administration? >> i hope not, dennis. we need wall street for a modest recovery, no way around that. dennis: we are beating up one of the engines are supposed to get us o

dodd-frank ripped the guts out of the nonbank mortgage origination sector. all we have left other banks. melissa: don't realize they are discouraging lending. >> in six months the congress is going to hear such screens of unhappiness from realtors and everybody else in the housing industry in that they have to revisit these issues and forget about partisan at that point. even liz warren may have to reconsider -- [talking over each other] >> we will have some bar growth and you can expect multiples for large cap financials. melissa: thanks so much. save haven support of treasurys as investors worry about four more years of gridlock. how low can yields go? and look at today's winners and losers on the s&p 500. qualcomm trading higher. we will be right back. when we got married. i had three kids. and she became the full time mother of three. it was soccer, and ballet, and cheerleading, and baseball. those years were crazy. so, as we go into this next phase, you know, a big part of it for us is that there isn't anytng on the schedule. melissa: breaking news righ

there's dodd frank. there's the fiscal cliff. all that trouble in europe, starting to throw fire bombs. it is serious business. now we have to think about it. we have to go back to work. what happened happened with the election, let's now go. liz: exactly, what happened happened let's now go. crude oil now falling 4 1/2%, more than $4 at this point. natural gas down, rbob gasoline losing 10 cents. good for the consumer. but why is anybody surprised especially when we have a stronger dollar? >> yesterday, we were up over $3 yesterday. going forward with the election and thing tas are going on in -- things that are going on in europe, like bobby had said, everybody kind of thought at least down here in my circles we were hoping for a romney win and kind of now obama was going to take it. as far as the oil market, i will look more volatility, going forward. i'm saying the $85 level would be a place we would bounce off of. however we settled below that today. inventory numbers plenty of product out there. between now and the end of t

the consumer protection bureau and dodd-frank strangled fees saying you can't charge fees. -- cheryl: can they go after wal-mart though? retailers? it's not under the provision, is it? >> we'll see. not yet, but, again, i predict legislation coming out, not of the house, but the senate sticking wal-mart under some sort of consumer financial protection bureau control. these are consumers willing to pay the price just to get the loan. it's easier. why are we forcing this to happen in the banking sector? cheryl: the banks have their union leadership problems, obviously, as you mentioned with dodd-frank, and at the same time, you know, really if wal-mart is going to cater to the customers, give them loans, this is the same company that was denieded a bank license. now they have to give them a bank license, is that's that what's going to happen here? >> again, not necessarily. right now, they are just acting on behalf of small mid tier banks and investment groups. they'll try to put a halt to it. i hope it doesn't happen. life finds a way. we have to let the option be open. this

bassoon the ball is going to be tossed to another agency this is this is a group that was set up by dodd frank and it's called sock and january eighteenth two thousand and thirteen is when public comment ends on new proposals that they have for money market funds why are they proposing what could happen and what do you think the impact would be. yes it's unfortunate for ms shapiro who just departed the c.c. that she wasn't able to get the reform she wanted maybe it's better for the money market fund investors and maybe not so the ball is essentially been kicked into the court of the financial stability oversight council that you mentioned and they are now in charge of implementing their own reforms if the f.c.c. does nothing over the next few months so the most likely scenario is that we're going to get some kind of floating net asset value for money and money market funds with that means as historically money market funds have been held pegged at one dollar and what we would see now is they could rise above or below that and it would be very easy for some of these more conservative money mark

this goes back to dodd-frank. >> it is the question how you negotiate.to oppose everything that is not constructive position. if you are going to say we understand why more capital is required we understand the impact you are trying to have but we think it is being structured incorrectly, that gives you a better place to have these conversations and elizabeth warren will be part of those conversations. cheryl: we will see. thank you very much, great to have you on the show. fox business's live coverage of president obama's it on the economy will be live at the top of the next hour, that is 55 minutes from now. dennis: more bank bashing lies ahead. meanwhile superstorm sandy is going to jack up the price of used cars the media reports. the next turn out of the entire story is even dealers on the spot. cheryl: news of iran's attack on the u.s. role. why didn't we hear about this before the election? good question. ♪ buy 5-hour energy pink lemonade and ♪ ♪ you can help others along the way. ♪ ♪ a portion of every bottle that they sell goes to fight ♪ ♪ brea

liz: let me bring it to regulation and dodd-frank.ome the rules have not yet been written, but there is a question of proprietary trading and a lot of wall street financial institutions have belly ached that you're hurting our ability to make money. do you see it that way? >> in many ways i do. i think that dodd-frank is going to be very difficult to implement, it might be against international law in some ways. it's going to be difficult. i, frankly, think the solution is much simpler, and that is a form of glass-steagall but not legal separation. we should just separate the depository system from the investment bank. it's really how we're structured at steeple. we own a bank, but we can only do safety and soundness in our bank, and we have an investment bank. just separate 'em and don't have the taxpayers bailing out the investment bank. david: wow. this is one of the first times i've ever heard a guy say perhaps some form of glass-steigel is important to go back to. what about the ability of financial institutions to have that open

politicians sd we know what to do, dodd and f franks wrote more rules so make sure it never happens againwrote and wrote. hundreds of pages. they say this will create a new financial system. >> one that is innovative and competitive and far less prone to panic and collapse. >> why is that a good thing? >> an agency dedicated to make sure that financial products like mortgages, credit cards have simple contracts that are easy to understand. >> john: dodd-frank simple? did you read it? >> absolutely. >> john: did you understand it? >> yes. all these pages. >> yes, i've stayed up and read that thing. running a bank is complicated. >> john: but they had to follow thousands of pages of complex rules even before dodd-frank. >> if you want to open a bank you he to go through this. >> a former bank regulator. >> most people have trouble recommending the ten commandments let alone 10,000 pages have something. >> he used to work in the cayman islands. does it sound familiar. >> you've got assets hidden there. >> we're not going to beat barack obama with some guy that has cayman island accounts. >>