banks, the 12 federal reserve banks.s. the banks could very readily receive 125 basis points more in the types of assets which the federal reserve calls minimum risk. they choose not to do that. it's basically because of their concerns about their capital account and various other aspects of lending. but the point of the matter is they have not moved, and if it weren't for the psychological effects, we could take a half a billion off the -- we could probably take a trillion dollars off the balance sheet of the federal reserve. it would essentially be removing the double counting that is going on. it would not have a significant tightening effect except psychologically. >> really interesting, because psychologically, we did see that sort of feeling richer element in the stock market. do you think that the economy needs more stimulus? and what tools does the fed have in this at this point for an economy that seems to be really just crawling? what is your assessment of the economy as well? >> it is a fact that a significant

ben bernanke is the chairman of the federal reserve system. gary gansler is the chairman of the commodity futures trading commission. marty gruenberg the acting chairman of the fdic. i also welcome you back the senate committee room. mr. john walsh is acting comptroller of the currency of the office of the comptroller of the currency. i thank all of you again for being here today. i would like to ask the witness is to please keep your marks to 5 minutes. your full written statements will be included in the record. secretary wolin, may begin your testimony. >> i appreciate the opportunity to appear before the committee. one year ago the president signed into law a comprehensive set of reforms for the financial system. were enacted in the wake of the most devastating crisis since the depression. in the depths of the crisis, the economy lost 800,000 jobs per month. credit was frozen. markets were barely functioning. the administration and its predecessors put together a strategy to further pare the system. as a result, the u.s. financial system t

if the federal reserve looking -- is the federal reserve >> yes, senator, we are. we and the department of justice are typically involved in approving the mergers and acquisitions, and when we do that, one of the key exercises we do is we look at the concentration of big and services within the local area, within a city, within a county, and we want to be sure that we take into account all of the banking services, thrips, and others that are in the area, that any other merger acquisition does not create a situation where one firm dominates that market, and so, we do pay a lot of attention to making sure there is competition, that consumers and businesses have alternatives to go to within their local market when we approved those mergers. hot -- it is true that larger banks, particularly recently, have been not as forthcoming with small businesses, some local banks, community banks, and we see a lot of advantage, of course, to community banks, and we are very supportive of community banks. >> we would like to see a healthy banking system. >> mr. chairman, good to se

he was president of the federal reserve. he served under ben bernanke who was the appointee of president bush has council of economic advisers and worked with exit -- secretary paulson. affairs criticism it goes to all of them but to return to the consumer bureau i think it is important that it be independent. that it not be a second thought from bake regulators whether it was one bank regulator or individual bank regulators and i believe that makes a great deal of sense to give the consumer -- give equal -- the only way to do that is make them an equal entity. not subject to others. as to the bill itself it had a common theme. one criticism was it was too big. i am sorry about the attention span of some members of congress but they could wait for the movie. maybe it will be coming forward. we are dealing with an interconnected system. there was a central theme. by sources of liquidity outside the banking system and increased information technology people in the financial industry have figured out a way to engage in lending

morgan and the federal reserve bank in washington dispensing inside information the legally bloomberg is involved in illegal conspiracy that's not conspiracy theory that's conspiracy fact it's all tied in to bloomberg bloomberg being of course now running for president supposedly lining things up where is he getting that money oh i get it it's an inside information which he will of course try to legalize to cover his butt at the end of the article there's a quote it's going to be awfully tough to identify the source of the leak in this case because of course it's always awfully difficult to prove insider trading twenty eight nations were involved so a whole lot of people knew this ahead of time well the see if you see in other regulators they don't have the money to pay for. the subscription on bloomberg to show you who's trading on inside information they're bankrupt purposefully on purpose so that they can't possibly prosecute the insider traders but also as liam engraft goodman proved earlier this week is most things are no longer illegal anyway they've been unwound all the regulat

is functionally in the fall that just has these federal reserve tricks and shenanigans to prop up the beast a little longer and so what everybody's talking about are minor tweaks you know it's as they say arranging detector chairs on the titanic long after the iceberg was hit but now you talk about the rise of the debt versus growth and going back a few decades the amount of debt that was increased would generate some appreciable growth in g.d.p. going back thirty or thirty five years you had a dollar of debt you got a dollar's worth of g.d.p. growth. and then as the economy began to suffer from overindebtedness and as the banks started to crowd their way into the general economy of the real economy it took seven or eight dollars of debt to create one dollar video pay and then around two thousand and seven two thousand and eight you had this debt saturation level where no amount of debt creation will ever create another unit of growth because you can't you know put pounds of garbage into a five pound garbage bag they just can't absorb more debt so this message seems pretty clear that

>> the federal reserve remains prepared to respond should economic developments indicate that an adjustment in the stance of monetary policy would be appropriate. >> tom: in other words, federal reserve chairman ben bernanke says he's on standby to help the struggling economy. >> susie: meanwhile, as pressure mounts from a phone hacking scandal, news corp pulls the plug on a $12 billion deal. we look at the hit to rupert murdoch's giant media empire. it's "nightly business report" for wednesday, july 13. this is "nightly business report" with susie gharib and tom hudson. "nightly business report" is made possible by: this program is made possible by contributions to your pbs station from viewers like you. captioning sponsored by wpbt >> susie: good evening everyone. late today, the aaa credit rating of the united states was officially put on notice. moody's investor service placed the government's bond rating on review for possible downgrade. without a debt deal on capitol hill, moody's points to a "small but rising risk of a short-lived default" tom, that warning comes as the federal reser

the fdic and the federal reserve recently finalized the rule implementing this. we made significant progress in the past year but still have considerable work ahead of us. we saw input from the public and continue to report to congress on our progress. the process is transparent as possible. implementation of these provisions will be to the financial system that is more stable and less susceptible to crises if and when they develop. thank you and i look forward to answering your questions. >> thank you, acting chairman gruenberg. acting comptroller walsh. >> thank you, members of the committee. i appreciate the opportunity to be here to discuss the progress the regulatory agencies have made in implementing the dodd-frank act in the years since the law was passed. we weathered the worst financial crisis since the great depression but it will be years before we put its effects behind us. dodd-frank took steps to strengthen the financial system and guard against future crises and all of us are determined to implement those safeguards as quickly and effectively as po

the most recent projections by members of the federal reserve board and presidents of the federal reserve banks at the meeting in late june is that the economic recovery will pick up in the coming quarters. they anticipate an increase to gdp for 2011, inclusive of the weak first half. that will constitute a normally better performance than what we have seen so far this year. we will continue to see the economic recovery strengthening. this is picking up to 4.2% in 2013. the central tendency in 2011 and 2012 were marked down nearly 0.5%. this suggests that participants sought at least some part of the first half slow down as persisting for a while. there was slow growth in consumer spending, even after accounting for the effects of high energy prices, the housing sector, limited access to credit for some households and small businesses and fiscal tightening. participants and expected that over time the jobless rate will decline, albeit slowly, toward its long-term the level. forecasts for the unemployment rate were to 8.9% for this year. 7.8% of the end of two dozen 12. the most recent dat

debt situation and the prospect the federal reserve will print get more dollars now joining me is the last thing in trade that e.t.f. capital hello to you but i was so what do you think is the biggest driver of the market the prospect that the federal reserve will print more money and therefore inflation or the worsening that situation in europe and the u.s. . well i think it's an amalgamation of all these factors dimitri is pushing the price of gold higher it did look like a few weeks ago that the price of gold was going to come in lower but in here you're starting to see increased eurozone concerns increased inflationary concerns and as you mentioned the prospect of more quantitative easing more stimulus spending from from the federal reserve we thought that that finished at the end of june now in the last couple of days or so there's an increased likelihood that the federal reserve could start to print more money and that is going to go to two areas are going to go to gold and into equities are most likely gold at the moment so he continues to push on higher gold is currently tradi

federal reserve system it is the new york fed and jim rogers has pointed this out several times indirectly over the last few weeks he is asked over and over are you shorting french banks are you shorting german banks are you shorting banks. he says no there is one bank alone one major bank i am shorting while call it buying silver by the way i'm shorting one bank and the reason he's shorting out banks is it alone of all of the major banks in the world is still at its all time high that tells you where the power is who still standing j.p. morgan they just reported their quarterly numbers they came in with their earnings i think they were a little above expectations were way above expectation because all of their liabilities on the balance sheet of the federal reserve bank in washington if you morgan bosun any of its own liabilities it runs up liabilities and then it gives them to the people of america the citizens to deal with they keep their profits said all of the liabilities oh does this sound like enron with their special purpose and to account seven hundred of them they just brought th

ben bernanke is the chairman of the federal reserve system. gary gansler is the chairman of the commodity futures trading commission. marty gruenberg the acting chairman of the fdic. i also welcome you back the senate committee room. mr. john walsh is acting comptroller of the currency of the office of the comptroller of the currency. i thank all of you again for being here today. i would like to ask the witness is to please keep your marks to 5 minutes. your full written statements will be included in the record. secretary wolin, may begin your testimony. >> i appreciate the opportunity to appear before the committee. one year ago the president signed into law a comprehensive set of reforms for the financial system. were enacted in the wake of the most devastating crisis since the depression. in the depths of the crisis, the economy lost 800,000 jobs per month. credit was frozen. markets were barely functioning. the administration and its predecessors put together a strategy to further pare the system. as a result, the u.s. financial system t

like the federal reserve like a lot of the international banking like goldman sachs who by which by the way was obama's biggest campaign contributor they also control the media which is and gave it another another with the anti-semitism and let's move on because and yet we've got your we've got your worldview you feel it was actually that. magic a true but that was that you know a symmetric that's reality well it's your reality you famously god has a reality of of of life how we would it's like a jewish whether you like it can we just i mean it's did you even stroke as obama's image is the truth big brother would like to know i would like to ask you about mormons if you don't mind you famously got catholics in the k.k.k. but that was just catholics who've been through as asian flowers as ation the fact that a grand champion was a cow but no it wasn't planned thirty five years ago i know i thought that was the time you brought women into early. years ago but you know he didn't get this brought up an air reinterviewed program you were going on no i said that i thought this was going to ha

like the federal reserve like a lot of the international banking might goldman sachs which by the way was obama's biggest campaign contributor they also control the media which is and gave it enough enough with the anti-semitism and let's move on really doesn't that we've got here we've got your worldview you thought it was. magic a truth but that was a sematic that's reality well it's your reality you famously go to pass the reality of of of life how we would it's like a jewish wedding and. can we just i mean this is security. is the truth i would like to emphasize i would like to ask you about warman's if you don't mind you famously got catholics in the k.k.k. but that was just catholics who'd been through as asian for organization the background check point was a cabbie know it i was in the klan thirty five years ago i know i thought that was the time i wrote that you brought women to her and simply years ago but you know he didn't get this brought up in the air reinterview program you were going on no i said that i thought this was going to happen in a day i'm sorry as are taken a

the federal reserve's balance sheet presently stands at about $2.90 trillion while the federal funds rate has been effectively zero for more than 2.5 years. as a result, i believe the stage is set for a resurgence of inflation if the fed is not real careful. the task confronting the fed is out to unwind its massive balance sheet without sparking more inflation or damaging the economy, a real task in itself. unfortunately, the dismal performance of our economy and our record federal deficit will make this exceedingly difficult in the years ahead. chairman bernanke, i believe, must also contend with the consequences of the administration's economic policies. their failure to adopt a pro- growth economic plan or to restrain federal spending has effectively blocked the fed into a corner. if the fed is to curb inflation, it ultimately as to raise interest rates. the absence of economic growth will likely make it more painful for the economy. if the fed does not raise interest rates, inflation is almost injured. -- higher inflation is almost ensured. federal borrowing costs will soar. that

. >> susie: tom, let's start with the federal reserve-- released minutes from its june meeting. with policymakers hinting they're open to a new round of stimulus, or so-called qe3. a warning from president obama that if lawmakers fail to reach a debt agreement, he cannot guarantee social security checks will go out on time. and moody's investor's service downgraded ireland's debt to junk status, saying the country might need bailout. >> tom: those developments, plus continued worries about europe's debt problems spreading to italy led to a volatile day of trading on wall street. as the dust settled, the dow lost almost 60 points, the nasdaq fell 20 and the s&p 500 down about six points. the losses came on heavier trading volume-- 923 million shares on the big board and over two billion on the nasdaq. >> susie: joining us now to put all these developments in perspective, mohamed el-erian, c.e.o. and co-chief investment officer of pimco, the world's largest bond fund. >> a lot to talk about. >> there's a lot >> susie: let me begin with the fed. do you think the fed is going to com

debt situation and the prospect the federal reserve will print yet more dollars models advancing years later eighty years capital believes there's no limit to the current rally it did look like a few weeks ago that the price of gold was going to come in lower but when you're starting to see increased eurozone concerns increased inflationary concerns the prospect of more quantitative easing more stimulus spending from the from the federal reserve we thought that that finished at the end of june now in the last couple of days or so there's an increased likelihood that the federal reserve could start to print more money and that is going to go into areas it's going to go to gold and into equities are most likely gold at the moment so obviously sixteen hundred dollars would be an obvious level for gold to hit and then you start to see some profit being taken off the table but then you could push through that and there's no ceiling you could carry on going to seven hundred eighteen hundred dollars. man those leather while they're from e.t. x. capital with his comments and a business out see

. >> the federal reserve crack down hard on san francisco