financial that ts office in london later blew up. paul krugman: that was the chain saw people weren't they? famous event where the head of -- i think it was o.t.s., a show of stacks of paper that were supposed to represent regulations and cutting through a chain saw. janet yellen: i believe you're right. so we have a system in the many states where different regulators, different types, different regulators, and where entities can go shopping for the supervisor they prefer, and that's what they were choosing to do. when they failed they weren't us.rvised by so all of that made me worried, some things that made me worry more bradley. know, one of the things hat refer bank presidents are expected to do is to meet with a lot of people in the business community. nonprofits, people involved in they onomy, to hear what are seeing. business of the ontacts that i had told me essentially the following thing. we've never seen conditions like this. thrown at us for ny an everything that we might want to do including the stupidest projects. neve

it would certainly inform our sense of risk, but financial stability is, why financial instability is probably as old as markets, the fields of financial policy is still relatively young as compared conferences with monetary policy. i wouldn't be prepared to think that we have a kind of clear algorithm that can clearly point to what the proper level of structural resilience needs to be, for instance. i think we have a lot of judgment that is involved in that. the good news is where much more systematic and we now have a division that is devoted to monitoring financial stability. we have a framework i think that is grounded in the research and what we know that looks very symptomatically at vulnerabilities. but i think there's still a fair amount of judgment in terms of thinking about how much structure resilience do we build, how much do we want to have a countercyclical addition, buffer on top of that. and as to the broader financial system, we have tools that really pertain quite narrowly to the banking system. and so that broader question really goes well outside of what the federa

financial deregulation, a lot of very high incomes in america are connected with the financial industry one way or another, and at the same time, the deregulation or failure to expand regulation as the financial system changed kind of -- i don't know. >> i absolutely believe that that was important in the crisis. >> yeah. >> i mean, there were huge failings in supervision and regulation. and that was important to the crisis. now, you know, what's the length of that to inequality? there may be a link there, but that was certainly important in causing the crisis. >> okay. question -- this was actually a little bit -- i'm losing track of my shuffle here, but the -- we've been talking very much a u.s.-centric view, but in a lot of ways, this crisis was a north atlantic crisis, lots of stuff happened in europe, and europe has had its own problems and now a whole new set. i have to say, i didn't see the yellow jackets coming. do you have any view on what -- is there a -- were you thinking about europe at all during your time? do you worry about -- because their situation is quite different no

the financial system was imploding, and after -- after that phase was over, and the financial system had been stabilized, then the economy was in desperate shape. i mean, we had 10% unemployment. people were losing their houses. they were losing their jobs. and by december of 2008, short term interest rates were effectively at zero. and there was no recovery in sight, and so what are we going to do? and trying to invent things that we could do, that would be helpful was essentially a full-time job. paul krugman: i had a relative who was working at the new york fed in the fall of 2008, and lehman weekend, we had a strong suspicion something was going up because we were trying to call him for family stuff, and we got no response. something must be going down there. work-life balance again. so i guess it was probably march that ben bernanke gave the famous green shoots speech. janet yellen: march. 2009. paul krugman: yeah. i can't -- did anybody -- as people pointed out, it turns out he was right about the financial market were stabilizing and the recovery started soon afterwards but th

the financial market volatility has increased over the past couple months, and overall financial conditions have , tightened and have become less supportive of growth. in our view, these developments have not fundamentally altered the outlook. most fomc participants have instead modestly lowered their growth and inflation forecasts for next year. the projections of committee participants released today show growth continuing at healthy levels, the unemployment rate falling a bit further next year and inflation remaining near 2%. , the projections also show a modestly lower path for the federal funds rate, which should support the economy and keep us near our goals. as the economy struggled to recover from the financial crisis and the subsequent recession, the committee held our policy rate near zero for seven years to give the economy the best chance to recover and , the economy did recover steadily, if slowly, at times. three years ago, the committee came to the view the best way to achieve our mandate was to move interest rates that are more normal in a healthy economy. today we raised ou

conditions, a broad range of financial conditions, and we took on board the financial conditions which not any one condition but broadly speaking, financial conditions have tightened since the september meeting, really. so we took that on board in our forecast. that's why the forecast for growth and inflation went down a little bit but remember, that's in the context of a more accommodative path. so we also took down our rate forecast. so we definitely did take that into account and as you can see from the statement language, we acknowledged those risks in the clause about monitoring developments and we're going to be watching carefully to see as those things develop. i think more broadly, there's been a sense of concern among business people and market people about global growth and you know, that may be partly about trade tensions, it may be partly about a variety of things. if you just mechanically drop into a model of the u.s. economy tariffs, you don't see very large effects. the large effects would have to come from financial market changes or from losses in business confidence a

president and his financial policies clinton nomics which began in one nine hundred ninety three when he took office and lasted until he left in january of two thousand and one he started following the single term of george herbert walker bush a republican now known by many as bush forty one or simply forty one president clinton was handed a growing economy from bush forty one with annual gross domestic product g.d.p. rate of three point five percent the good economy was however partially premised upon years and years of increasing spending and rising us budget deficits clinton nomic sought to keep the economy going while balancing the deficit and with the help of congress which was then controlled by democrats legislation was passed to increase taxes on the wealthy furthermore defense spending was cut from five point two percent of g.d.p. one thousand nine hundred ninety to just three percent in two thousand the house passed the tax increase without a single republican vote that vote was particularly difficult for democrats after bush forty one has popularized this phrase. push and i

in fact, didn't really reassure financial investors. infact, he didn't really reassure financial investors. in fact, he further stoked their fears, as evidence by

that's not what the financial media of what the financial press was set up to do. those are words that fuel or masculine and those words are power, return, control. we both as women investors and as financial services providers both individually and as a group need to figure out a a way to close that gap. >> gazelle, humid all kinds of leaps and moves within your career, and you talk any podcasts politico recently did about your experience early on. you were an electrical engineer making $50,000 but later learned her male counterparts were making almost double that. what was it like to realize that and what sorts of changes you can make at the point that set you up for future success? >> the first and most important expectation that had of myself was, and we doing everything i can to have similar responsibility within scope of my male counterparts that would make it almost double as i was making? and as i mentioned in the podcast, i was being told that my time will come and i was shown and i was 27. the most important factor and i think the decision was, i said eno

it certainly did financially the money was eventually repaid to the treasury in the financial system us as well as globally did not collapse so even though it was one of the most unpopular ideas alternately it was extremely successful an extremely successful economic program one of the most successful ever mark thank you molly appreciate it molly barrow that the ring of fire network appreciate it molly. thanks bart. and there is much more to explore with the crash it will do so in sixty seconds back in a flash. i had a great education a good job and a family that loved me. i never had to worry about how i would eat some where i would sleep. i'm facing christmas alone out on the streets of london. well. you know the slogan still give out food for the homeless. but you don't really feel like the big me that. and then. the guy just came over to me saw me in gave me this book. it's hard to imagine decades after the war a nazi doctor was still active and rich in the nineteen seventies crittle had as the chair of its board a man convicted of mass murder and slavery at ash was a german comp

they bought $15 trillion trillion dollars of financial assets. pushed financial assets up.he economy grew. here we are. now we are in the late part of the cycle. you have to put on the brakes. it means they tie in monetary policy. the tightness of monetary policy together with what we had was a big fiscal stimulation in the form of not only the corporate taxes, but other forms. when there is capacity constrained. that had the effect. monetary policy matters. where we are in the economic cycle matters. geopolitics matters. populism matters. the left and the right. populism has more conflict internally and more conflict externally. what also matters is emergence of china as a competitor on the world scene. changes in nature. those are the things that matter. >> what is your take? actually having an impact on assets. we seen the federal raise interest rates. also, that is a balance sheet that you just mentioned. the fed has to unwind $5 trillion, $4 trillion in this balance sheet. constitute pressure? is that another form of tightening? >> of course it's another form. the it's

when on the financials a buying opportunity? these things to settle down and we need a little more clarity, so i do not normally look to steeper-year -- a steeper yield curves, but i do look at autos slowing down, home slowing down -- those are important. on the credit side, things are stable. people have been overly worried, but that is going to be fine. we need some kind of consistency so we can make a bet on, we are heading to global growth, and that is not occurring. look ati was taking a our markets live blog and they said that the aggressive selloff is about 88 percent, that is relatively high compared to other selloffs we have seen. he talk a lot about the fundamentals. how much of this is technically driven? peter: a lot of it is technical. yesterday morning, the s&p atures hit which was resistance. 2635, orhour ago, something, it triggered the wave of selling. the sharp gap, that was as we broke through another technical resistance. it is hard to look at the markets and not take that into account as well. taylor: thank

institution or a financial instrument fails. >> so it's an insurance contract?surance contract, but they've been very careful not to call it that, because if it were insurance, it would be regulated. >> aig essentially facilitated the creation of a lot of these mortgage securities by essentially providing an insurance policy should they go bad. but because the derivatives market had been deregulated, aig could do this without any requirement to put up any reserves. it's like an insurance company selling you a life insurance policy and not having any money when the time came to pay off. and the time came to pay off. >> after its credit rating was ra downgraded overnight, aig must raise at least $40 billion and fast. >> you had a full-scale run on aig. and there was a real view, by the way, that if aig went under, the game was over. >> aig does business with every major financial institution and in 130 countries. >> aig will destroy much of the capital formation process in the western world. >> paulson, bernanke, tim geithner, they saw the risk that this could be

why was nobody willing to buy into financials this year?rend. >> we have had a couple of different things, but the predominant issue is, we are at a peak of the cycle. you don't buy financials peak of cycle. they are cheap and affordable. the quality of the loans are good. low growth has been fine. not matter. we are coming into the fourth quarter, final couple days of the year, and we get tax selloffs on top of everything else. it will be a tough sled for a while. caroline: at what point is the catalyst to get back in if it is not valuation at the moment? do valuations have to fall even further? does it have to be a buy when the fed starts raising , and when we see a change to the way they can make money and deposits? nick: investors view this sensibly, which is valuation math is not investment edge. for isu're looking you're looking for the fed to cut rates and steepen the yield curve. there's a current point where investors say i don't care because am not buying financials, i will buy industrials. you will keep financials under weighted.

reminds me of another bailout professor and we go back to right after the financial collapse when with the troubled asset relief program tarp which bailed out the banks we did the same darn thing then we didn't even have the guts and when i say we i mean congress in this regard didn't even have the guts to say you can't pay your executives your c.e.o.'s billions of billions of dollars while you're essentially being propped up by the u.s. taxpayers it just drives me nuts that we don't have the guts to do that sort of thing which you would think would be not partisan at all you would think would be republican democrats would agree right yes and there's actually one more twist to this which may even blow your mind one step further the money that the government gave the banks which is in the trillions of dollars if you add up the investments the loans the forgiveness of obligations part of that money was collected by the banks who used it in part to pay for the lobbyists to go back to congress to make sure that the regulations were few were weak etc in other words the banks used to bear ou

with the financial merry go round listen to the one percent. we can all middle of the room sick. room believe. it as if protestors are trance are saying their purchasing power has diminished because all this money printing that's going on and you mention they can't tell a fact that money printing enrich the people on average in paris and shows little is a in paris and those people who are working and doing blue collar jobs their person carry. eroded and they. party and pamela anderson figured out that this is a structurally violent system that they need to address with a quid pro quo violence or violence. the way to the united states is dangerous for most of the illegal immigrants. there's a lot of sympathy i want to. enter and i won the last post on this but many of them look for refuge in the so-called sentry sides of the draft used to share information about undocumented migrants with federal authorities. banned. and that next time i get i'm in a lot of class and i want to. watch as they all choose to stay in the country with donald trump in the one. about the. struggles of ma

for now, financial conditions have tightened a little bit. we have taken that in the forecasts and also in a lower rate to provide some accommodation to push back against that tightening. that is how i think about it. >> greg and then nancy. from marketwatch. just following up on paul's question, president trump said recently that you should feel the markets, so when you feel the markets, what are the markets telling you? you know,owell: financial conditions, broadly speaking, we do not look at one market. we look at a big range of conditions, and what matters for a broader economy is material changes in a broad range of financial conditions that are sustained for a. keeper of time. a little bit of volatility, speaking in the abstract, -- sustained for a period of time. a little bit of volatility, speaking in the abstract, we look for that. there has been a tightening since the september meeting, and that, we tried to factor that into our models of the economy and to the results that come out of those models. that is how we think about it, so

and we have seen financial conditions tighten from the fed. ira: i am passionate about this because firstly, we make too big of a deal of balance sheet unwind. the balance sheet unwind peaks in the middle of 2019 and then gets smaller. automatically, we will have less balance sheet unwind in the second half of 2019 than we have had the last six months. that is just mathematics. i think secondly, the federal reserve will most likely stop hiking before it ends its balance sheet reduction. at worst, they will do both at the same time because financial conditions have gotten tight. the one thing that the balance sheet reduction has done, i think this is what people talk about liquidity, is that when you look at effective money growth, our measure of effective money growth that bloomberg intelligence, it has stopped. it was 5% for the last few years and this year, less than 2%. it is slowing down so much and that has an effect on growth and certainly inflation. jonathan: you brought up the prospect of a policy error. tony, i want to ask you the que

the financial, i think he said financial developments too. we're talking liquidity in the market. was surprised there was nothing about the unwinding. the fact that is staying up to par $50 billion per month. there is the concern. you have two hikes coming up in 2019. the fact they're still reducing their balance sheet. this is a market we haven't seen before. despite strength in the economy, inflation signals, oil is down $47 a barrel. these are concerns. connell: in market, futures market we should point out is pricing in no rate hikes next year. zero coming in to this. hal, get your take. you were not among those rooting, right for the fed to hike rates at all. they do so as expected but your interpretation of that? is there enough in this statement for you? >> no, absolutely not it is a big mistake. i think the fed rate hike is a mistake and the language is really disappointing. they should have moved to data dependent language. to say they will do two rate hikes next year is not enough. the market will sell off, not stop selling off until we get to the close in my opinion. lo

why is it that so many women have abdicated financial decision-making, financial decision-making to their partners? and to take some responsibility as an industry partner, why is it that the natural services industry is a widely talented, whether the survey was done in the 70s, or the 80s or the last 10 years, why is it that financial services go from advice and from a product and services perspective is always at the top of the list that things women feel don't work for them. so one of the things that this talks about is that 70 percent of women feel like something around my advisor doesn't understand what is important to me, the products and services aren't there that understand who i am and what i need, and the opportunity in this space is amazing. as a wealth management firm, you also have the overwhelming commentary that 70-80 percent of them make a shift to see who their provider was if there were some lines that understood them. and i feel that part of the issue that we understand and what we learned from our parents, we are now at a point in time where over 50 percent of college g

the financial times is the difficulties facing britain's accountancy industry.iling reforms following public concern following the collapse of dash of companies and questions of how these companies and questions of how these companies were audited. look at the business paper. it is called city am and leads on the troubles facing the on line retailer asos. pre—christmas p°p5 “ on line retailer asos. pre—christmas pops —— profit warning with a knock—on effect. there are fears the retail sector is facing a gloomy festive season and it's notjust on the high street. finally, the new post, you can see a picture of david berryjunior. he post, you can see a picture of david berry junior. he is post, you can see a picture of david berryjunior. he is a convicted poacher from the us state of missouri. he's been sentenced to a year behind bars for killing under the deer that is part of his punishment to watch the movie bambi once a month. the disney film which made me cry when i was very little.

at worst, they will do both at the same time because financial conditions have gotten tight.he one thing that the balance sheet reduction has done, i think this is what people talk about liquidity, is that when you look at effective money growth, our measure of effective money growth that bloomberg intelligence, it has stopped. it was 5% for the last few years and this year, less than 2%. it is slowing down so much and that has an effect on growth and certainly inflation. jon: you brought up the prospect of a policy error. tony, i want to ask you the question, whether this market is starting to price a policy error and what that actually looks like. tony: pricing in a policy error, because the fed chasing the market as they reduce their dots and terminal rate is really the idea that if they stick to their plan, the market believes that is a policy error. if they go with two tightening next year, i think that would be a policy error. i think they will come forward next year first in speeches and been in meetings and further , reduce their projected path, and i expect next year

and financial marketplaces more broadly, or the economy. the first round of these things, they were not rubberstamped. i can't testify to the quality per se, but regulators rejected early submissions. so everybody as far as i i can tell is taking it seriously. it's part of the law, mandated in dodd-frank and regulators have decided off on it. while this isn't the only thing that should be done and must be done, it's an important first step because it's preparation to dealing with the next problem or series of problems at large, complex financial institutions. so i think there's a reason for guarded optimism that we are in a better position to deal with at least those institutions at the next point where financial difficulties have risen. and that's very critical. it's not the end of the story for a number of reasons, i won't dwell on all of it, but i will say the are a couple of things. one is the quality of the plans themselves. the understanding of uninsured creditors that they could well lose money. i think a lot more communication shoul

financials downturns. we have a situation right now where you need to see really good cni growth. obviously we would like to see a steeper yield curve. all of those would be beneficial as rates rise. that could obviously impact the former as it flattens, that impacts the latter that said, a lot of damage is priced into the space. i really think it's probably the other names in the russell that are going to provide fuel though for a bounce if you look at how poorly it has performed since the peaks earlier this year, one question you have to ask yourself is that everybody wants to buy things when they're on the highs. here we are trading at a huge discount essentially to where we were just earlier this year. and i think that's really the play here. one final point i would make about the options trade, as it goes higher you're going to have an opportunity to do two things. one is to buy the putback at a cheaper price if it rallies. secondly sell higher strike calls against it to help finance a trade. try to b

while ways chief financial officer. will spend the weekend in custody in canada with a bail hearing due on monday u.s. prosecutors are seeking her extradition accusing her of breaching sanctions on iran . a stampede in a nightclub in italy has killed six people and injured more than one hundred others have a near in kona on the adriatic coast. today those are the very latest headlines stories next. top executive of china's biggest technology company has been arrested in canada and one financial chief for wall play is wanted in the united states so why is the company being targeted and could this arrest worsen the u.s. china trade war this is inside story. hello and welcome to the program i'm peter dubey it's being called the crown jewel of the chinese tech industry but one of its top executives has been arrested she. is the chief financial officer of walkway she was detained in the canadian city of vancouver the request of the united states the arrest comes as heightened tensions between the u.s. and china who are locke

financial conditions have gone so tight. the one thing that the balance sheet reduction certainly has come at this is one of the reasons why people talk about this liquidity, when you look at effective money growth, it is basically stopped. it was 5% for the last few years come of this year, it is less than 2%. it has sloan down so much and that has an effect on growth and inflation. jonathan: you brought up an important topic. i want to ask the question to you. whether this market is starting to price a policy are era and what that looks like. think it is pricing in a policy error because the fed chasing the market as they reduce their terminal rate is really the idea that if they stick to their plan, i think that is a policy error. if they go with to tightening's next year in balance sheet complete on autopilot, i think that would be a policy error. i think they will actually come forward next year, first, through speeches, and then in the meetings and further reduce their projected path and i would expect the next year to

aid report showed 40% of getting students to apply for financial aid. on the same report it shows the number of awards is down 50%. i don't know why that is. in july 3, presentation it shows a similar pattern from fall of 2016 to fall 2017 before and after free city college started. i want to know why the number of students seemed eligible for state aid dropped while enrollment increased by nearly 4,000 students. here's my worry, we're leaving $8.7 million on the table of federal and state aid and i'm supportive of free city college and a do not think there should be any barriers at all to someone receiving a free education but i do worry about the set-aside. i approached supervisor kim earlier today about an amendment i'd like to see in this charter amendment and she said it was too late but i want to put it forward and ask my colleagues to consider it. an amendment that would have the board of supervisors adopt annual reporting requiring. say we would develop any reporting requirements by ordinance by march 1 of 2020. i have this amendment for people

somebody creates a bank make sure the financial transactions goals flawlessly to make sure there is no trouble. but. i believe that the latest with the financial crisis around two thousand and eight it became very clear that even in these instances they were hired just people in the end human beings tempted by greed. they are likely to fall for opportunities they would get in over their head. to speculate see with money they didn't have. and this is where the coin came and started off as this very well timed grabow. suggesting a completely new system that hadn't been there before that would eliminate the one thing that we were varied about the one thing that we didn't know how to handle with just shots minimizing trusts and replacing it with the technology we hadn't seen before. bitcoin are crypto currency it opens doors to the people that were not involved in financial actions there are a lot of unbends people people that then have no access to services that we would take for granted like insurance saving money borrowing money just planning ahead of further than the day that they live

risk and financial crises. and many in congress this letson even though it was kris cal clear in 2008. shifting these risks onto taxpayers is why investors don't care what's in their portfolio. it's what creates excessive leverage. it's what creates overbuilding in the housing sector. and it's what pushes home prices to unsustainable levels. the results will be just as tragic next time if in fact we have forgotten this lesson. it's almost inconceivable to me that congress is actually contemplating a repeat of this mistake. the bipartisan housing finance reform act of 2018 does revoke the charters of fannie and freddie and run theme through receivorship but there's little else to like. as i intimated in my testimony, if this is the best we can do congress should do nothing. mr. hensarling: the gentleman yields back. pending completion of the votes on othe floor, which if roll call votes are called on each and every one, could take up to an hour. panelists are asked to stay nearby. but there is plenty of hot coff

shield℠ annuities from brighthouse financial allow you to take advantage of growth opportunities with level of protection in down markets. so you can be less concerned about your retirement savings. talk with your advisor about shield℠ annuities from brighthouse financial, established by metlife. from brighthouse financial, this is moving day with the best in-home wifi experience and millions of wifi hotspots to help you stay connected. and this is moving day with reliable service appointments in a two-hour window so you're up and running in no time. show me decorating shows. this is staying connected with xfinity to make moving... simple. easy. awesome. stay connected while you move with the best wifi experience and two-hour appointment windows. click, call or visit a store today. >>> welcome back to "squawk alley. the dow making a move lower after yesterday's late daybreaking rally. bob pisani has more on what's been a roller coaster ride >> can't we get a quiet day going into close most traders are gone. everybody wants to get out of here and show up in january and talk about funda

>> looking at financials in u.s. particular over the last few weeks, you get the sense of why in the global economy. the trouble with the narrative that mark was just giving about this being about profitability is so far the earnings forecast for u.s. banks have been rock solid and we are still talking about 10.9% for earnings growth. there's no real evidence for what we have seen and i'm afraid it is systemic. you have got 34 out of 37 globally systemic important financial institutions in bear market territory compared to where we were in january and we have also seen this big rise in u.s. credit spreads. so credit has gone up, high yields have gone up 70 basis points in the last six weeks. treasury yields have come down a bit more. you normally only get that kind of environment when we move towards recession. that is what equity markets don't like. the earnings market expectations, running around 7.5%, we think that number is going to be closer to zero when we get to the 12 months forward. senator toomey blames reg

it is now pulling back from financial relief for southern europe to fulfil its monday at both northern and southern european countries that we can e.c.b. has proceeded with caution allowing the markets time to adapt to more expensive financing for now the main question is whether the e.c.b. will raise the interest rate next year. and finally japanese have been flocking to retailers to stock up on what has got to be one of the world's most elegant new year's gastronomical rituals it's all about sumptuous boxes packed with traditional foods often delicacies such as caviar and truffles a lack of boxes sometimes with two or fried les is called. the most luxurious ones at the pump and store in tokyo can sell for nearly fifteen hundred dollars. if you're watching the daily news from berlin will have more for you next hour see than. to do an ensuite are transforming the world humanity ready for it. this time. country place goes on my. young entrepreneur find out about the latest technology to replace plastic. i can see how companies. judge confirms the foundation so that it gets to the. clima