of lehman brothers, shares of which... >> lehman is quaking. they're having to bring in a quarter of a trillion dollars a day, that goes out the next morning, just to survive. >> narrator: back when the mortgage business was becoming the biggest casino on wall street, lehman was one of the highest rollers, betting hundreds of billions of dollars. just like bear stearns, lehman's bets had gone bad, and all over wall street they knew it. >> its stock price dropped 45% tuesday. >> ...percent loss for the lehman brothers, and many, many questions, including... >> they have zero leverage. they have to do something soon, it's obvious. >> narrator: dick fuld ran the company. on wall street they called him "the gorilla." >> it's like you poured a bull into a suit. he just... he just can't stop being dick fuld. and the whole firm came to be stamped with that. >> narrator: many believed fuld's lehman brothers was too big to fail. and fuld seemed to think neither geithner nor paulson would ever let it go under. >> dick fuld is still believing in the ortho

and indeed as lehman's creditors lost confidence they started withdrawing funding from lehman.for example, investors refuse to roll over lehman's commercial paper and other business partners said we are not going to do business with you anymore because we are afraid you're not going to be here next week. so lehman was increasingly losing money and increasingly finding itself unable to fund itself. it tried with federal reserve and treasury help to either find somebody willing to put more capital into the firm or to acquire the firm and was unable to do that. so on september 15 as i mentioned, they filed for bankruptcy. this was an enormous shock that affected the whole global financial system. now in particular, one of the many implications of the failure of lehman brothers was in the money market funds. there was one particular fairly large money market fund that held among other assets commercial paper issued by lehman and work me in -- lehmann failed that commercial paper was either worthless or illiquid for a long time so suddenly this money market fund could no longer pay

morgan stock and sell short like the lehman brothers took it to zero with counterfeiting bear stearns took it down with naked short selling naked short so morgan stock taken to zero make a bundle by physical silver we're winning well we actually have some naked short selling stories coming up before we go on to that i want to finish with this j.p. morgan story how j.p. morgan's hedge blew up in one easy chart now the chart that they show basically we're just going to say it's showing delta collapse and you see that downward slope there that's j.p. morgan was losing money during that because the first major drop right there you see that's from q.e. one so every time the fed dumped money into the markets it was actually costing j.p. morgan a lot of money and they had to take on more hedges to zero hedge right well greed and avarice were likely strong drivers that blindfold a brutal excel in his colleagues to the fact that they were getting too big and that the position was out of control every means fact that it was a combination of the fed e.c.b. actions to squelch the stomach risk ent

that maybe it's not so much a lehman moment.t's going to be bad but -- >> the ibex in spain is down 40% year over year. they've had their lehman brothers moment. >> yes. >> michael, but think about this. this has really been something that's -- we're talking now about euro exhaustion. how long have we been talking about this? >> years. >> years, right? and as we go through this process, you have to imagine that all of these scenarios have been played out one way or another. and as you go through this, what we're talking about is getting to the june 17th election, right? it's in nobody's interest on june 18th to wake up and have athens announce that they're abandoning. they may begin to -- >> i want to give takeaways -- >> back and forth. this is not a one-way decision. >> based on your view of the world, what does somebody do right now? you're in the united states. >> the pento portfolio strategies is about 80% cash. we hold some gold -- >> 80%. >> 80% cash. we sold before may because we realized that deflation is not a very goo

investigators at the sec have concluded their gprobe of a lehman brothers. the sec is not recommending enforcement action against. the against lawmakers and investors have been pressing the agency more than three years to determine whether or not lehman brothers misrepresented its financial health before filing its biggest bankruptcy in u.s. history. automobile dealers using consumers bad credit histories to charge them higher interest rates on car loans if must now tell buyers they have-and duration of their credit report. that came out of a federal ruling. it's planning to appeal the decision. consumer reports says there's no need to shell out big bucks on expensive sunscreen. on that and what morgan stanley is doing for facebook investors all coming up in the next hour. linda bell reporting for abc 7 news. back to you. >> thank you. outside, 69 degrees. , >> a case of irony for d.c. council and marion barry. he held a press conference to apologize for comments that he made about asian business owners only to offend another group. what is prompting some to

he also says he had been a loyal lehman employees since 1984, which he had been. one example. cfo and ceo continue to certify the financial statements of before until a few days lehman went bankrupt did they have not been prosecuted. neither has anybody else. there is publicly available information from lawsuits and depositions, subpoenas, etc. that makes it extremely clear there is overwhelming evidence of criminal behavior and there is not in a single prosecution critics deride a predator has taken over this country. how have they done so? >> luckily, i think it is too strong to say they've taken of the country, but they certainly have taken over significant portions of economic policy and the political system and, unfortunately, major portions of the economic discipline i think it has its roots in the late 1970's and early 1980's when america first began to encounter economic difficulties and when deregulation first started in earnest. since that time, we have seen a steady and dramatic growth in the use of money to influence politics and also academia. the cos

morgan say well they're not going to prosecute lehman brothers so we'll just do the same thing with them of global in a collapse before the collapses we're going to steal a quarter of a billion dollars because there's no laws against it because that there's legal yeah there's a nickel dance sad very sad ok stacey ebert thanks so much for being on the kaiser report thank you max don't go away much more coming your way so stay right there. welcome back to the kaiser report i'm max keyser time now to turn to chris whalen senior managing director of tangent capital chris whalen welcome to the kaiser report thank you max all right chris whalen what has the fed done to our economy well what have they done they're basically trying to keep everything the way it was and beautiful stay sis this means no debt reduction no taking apart the big banks and no going after the people who ran the big banks and did all of the various acts of fraud that we've seen over less say ten years the fed is really the bad guys here unfortunately because they are trying their hardest to stoke up inflation but we have

global look at made off we look at lehman brothers and every one of those cases the over the counter derivatives market was subsidized by the other creditors they're given special treatment they're not subject to the automatic stay in bankruptcy eccentric cetera so o.t.c. derivatives is already a special ghetto and i don't know what else we could give jamie diamond the satisfy his conserves well quick note on this jamie diamond character because he like all other bankers on wall street having worked there myself and he exemplifies this idea that he will do what he wants to do and if he breaks the law well the problem is that the law needs to be changed at run it comes. as a two or basil three they're saying well you know these requirements reserve requirements we don't really think they're consistent with what we think the law should be so we're going to do whatever we want to do and you can pass a law if you want to but we don't we don't have to answer to anyone's law i mean that's a very bad example isn't it chris whalen well it's not just banks so if you think about it the stock c

it's like kicking a man when he's down yeah it's also like an agatha christie novel where you know lehman brothers got blown up bear stearns got blown up you know because j.p. morgan remember they they sold bear stearns stock short the marketplace and killed bear stearns stock with a premeditated fine. jamie dimon is a terrorist those let's keep that straight now he looks like might not be the guy to survive the attacks from other independents and rogues out there that would do to him what he did to bear stearns like he's got a cushy relationship with the fed he's practically got a lip lock on ben bernanke he's sucking that free fed milk and he's becoming a big fat fed and we should keep that mind but at some point the fed is going to stop lactating free milk in a jamie's mall is going to have to grow up and work for a living you can get a job you fricken loser another important point about this insider saying it's like kicking a man when he's down is here's g.p. morgan a bank that exists that's their business models kicking people who are down whether it's bear stearns or whether it's je

a lot being lawmakers to support this latest effort james good to les joins us in studio and from lehman brothers to bernie made off to m.f. global is bankruptcy law stacked against customers trying to get their money back and does the law enable financial institutions to commit fraud enable fraud and come out unscathed will look at the bigger picture and ben bernanke is out today saying the banking sector has gained a much more solid footing in the past few years but is this based on a flawed examination of the foundation and will discuss let's get to today's capital account. so if you watch this show then you know the story behind m.f. global and if you want to take stock of where we are now well customers this includes of course farmers mom and pop investors they're still missing their money regulators and prosecutors are reportedly investigating this one point six billion dollars shortfall in customer money money that went missing in the firm's bankruptcy customer money that should have never been touched that we haven't seen a lot of progress least not that we've heard about as for

morgan say well they're not going to prosecute lehman brothers so we'll just do the same thing with them of will in a collapse but before that collapses we're going to steal a quarter of a billion dollars because there's no laws against it because that there's legal yeah there's a nickel dance sad very sad ok stacey ebert thanks so much for being on the kaiser report thank you max don't go away much more coming your way so stay right there. fifty two meters. more than one thousand tons. skin thickness thirty centimeters the guinness record. commemorating the battle of stalingrad. the mother than called. on our t.v. . shows that so much could be going to make a lot of people very easily look at what is happening in french voters appear to be moving to the left one priest is leaning hard to the right what is causing the collapse of the political scene. welcome back to the kaiser report i'm max kaiser time now to turn to chris whalen senior managing director of tangent capital chris whalen welcome to the kaiser report thank you max all right chris whalen what has the fed done to our economy

the panic from lehman spreads to aig, spreads to morgan stanley, spreads to goldman sachs.denly ireland is having problems. suddenly the bank of england is-is bailing out banks. suddenly iceland is bankrupt. the govern... the state of iceland, it's bankrupt. an entire country! suddenly china has gonfrom being one of the world's highest growth countries to almost a no-growth country in the flash of an eye. that's contagion. >> wall street will once again be keeping a close eye on the incoming administration... >> narrator: back in chicago, obama had news he hoped would reassure the markets. >> timothy geithner... >> narrator: tim geithner would be his treasury secretary. >> this is the guy who's going to be the point man in leading us out of the worst economic period since the great depression. >> narrator: then, another insider-- former clinton treasury secretary larry summers-- would be the president's chief economic adviser. >> old hands from the clinton era. >> obama called him one of the great economic minds of our time. >> obama was always looking for establishment guy

guided by the experience of aig with the london affiliate and actually it was a london branch and lehman brothers, citigroup, bear stern and even long-term capital management when it applies reforms to transactions that might be booked offshore but nonetheless have a direct and significant effect on u.s. commerce and activities. that in essence is a stark reminder we got in the last two weeks when j.p. morgan's trading losses were over seen that lost multi-billion dollars in the credit default swaps and indices. the division of enforcement has opened an investigation related to credit derivative products traded by j.p. morgan chase's chief investment office and although i am unable to provide any specific information about a pending investigation, i will touch upon the commission's role in overseeing these markets and the cftc has oversight and clear antifraud and antimanipulation authority regarding the trade of credit default swaps indices and oversee the clearing house that is clear some of these products. starting this summer there will be realtime reporting to the public and later t

staff ends probe of lehman without finding fraud this is according to bloomberg u.s. securities and exchange commission investigators have concluded their probe of possible financial fraud at lehman brothers holdings without recommending an foresman action against the firm or its former executives according to an excerpt of an internal agency memo it hasn't yet been released they haven't made their final decision but according to a memo they found no fraud yeah ok so while we do know for example dick falls that the end of each quarter when they were supposed to report their balance sheet composite he took hundred fifty billion of liabilities off the balance sheet they parked it into a bank that they didn't disclose they didn't add that to their consolidated balance sheet they stated profits illegally then when the regulators requirement window close they put that back on the balance sheet that's called the repo want to five scam it's outright criminality. committed a massive fraud in fact the article does point out pressure on the agency the f.c.c. to punish any wrong

morgan say well they're not going to prosecute lehman brothers so we'll just do the same thing with them a little in a collapse but before that it collapses we're going to steal a quarter of a billion dollars because there's no laws against it because that there's legal yeah there's a nickel dance sad very sad ok states there but thanks so much for being on the kaiser report thank you max don't go away much more coming your way so stay right there. sometimes you see a story and it seems so you think you understand it and then you glimpse something else you hear or see some other part of it and realized everything you saw you don't know i'm tom harpur welcome to the big picture. hasn't been. on t.v. . it is to get the maximum impact. the material is for. journalism we. want to present. something else. welcome back to the kaiser report i'm max kaiser time now to turn to chris whalen senior managing director of tangent capital chris whalen welcome to the kaiser report thank you max all right chris whalen what has the fed done to our economy well what have they done there basically trying to

to punish any wrongdoing related to lehman's collapse as. after anton valukas the court appointed bankruptcy examiner found the firm misled investors with accounting gimmicks that disguised as leverage referring to this repo one five but they looked at this evidence that the bankruptcy examiner had looked at and they were like where's the for a while yeah i mean this is fantastic i mean this is the great thing about having regulators like the f.c.c. who are over charged with keeping track of your accounting fraud i mean as imagine a serial killer i suppose you know who had keeping track of his crimes best goalie you know hollywood producer who every time you murdered somebody in the street they would just say oh that's great for the it's not it's not a murder it's a reality t.v. show so here with the fall you're saying you're not committing fraud it's a great story on some news item but it's not fraud and so let's look at the other part of the mafia you mentioned hollywood and the entertainment industry are i ate claims it's owed seventy two

. >>> and then greece, lehman brothers?the dots. [ man announcing ] what we created here.ts.] what we achieved here. what we learned here. and what we pioneered here. all goes here. the one. the accord. smarter thinking from honda. and people. and the planes can seem the same so, it comes down to the people. because, bad weather the price of oil those are every airlines reality. and solutions won't come from 500 tons of metal and a paint job. they'll come from people. delta people. who made us one of the biggest airlines in the world. and then decided that wasn't enough. i've been a superintendent for 30 some years at many different park service units across the united states. the only time i've ever had a break is when i was on maternity leave. i have retired from doing this one thing that i loved. now, i'm going to be able to have the time to explore something different. it's like another chapter. >> memorial day marked the unofficial kickoff to summertime. lion's gate stock caught fire with the release of the hunger game

we could let it fail, which we did with lehman. we could bail it out, like with aig. we tried to have other tools to help regulators not only manage large constitutions and make sure they don't fail, but in the event that they did, we would have a way to structure it. like the fdiy. this did a brilliant job. really managing the committee in a much less disruptive way. so that's what we did ch and during the full-time, we did have a lot of debate over insurance companies and many insurance companies testified. i don't know if you did or not. be many, many ceos and academics testified that insurance was not the problem. that in fact, it had been a rock in our troubled dmik times. most types of insurance activities conducted in isolation would not pose a systemic threat, ai zbrks is an important, and i would say tragic example of how insurance ak at this times could threaten and bring down a great company, a larger organization, and really be a threat to the entire financial system. so they don't exclude any company for that area. they don't exclude any type of company.

brothers had only been lehman sisters. you should applaud that. come on. [ applause ] at the first spring meeting of the imf last week, director lagarde gave a mixed report on the economic climate. she said we are seeing a light recovery blowing in a spring wind, but we are also seeing some very dark clouds on the horizon. those dark clouds, of course, include massive protests worldwide reflecting a growing disconnect between citizens and their government, grave threats to arizona stability, stubbornly high unemployment in many countries, skyrocketing energy costs, things like that. if the problems facing the world economy are dark clouds, christine lagarde said, funding from imf members including japan and korea which i visited earlier this week is like an umbrella. thanks to her fundraising prow es, that umbrella just added $430 billion. [ applause ] so what an honor to introduce this power house and great girlfriend. imf director, christine lagarde. [ applause ] >> uh-huh ever so much, jane, it's a lovely, lovely sbrurk

>> last week, the sec decided that there was no wrongdoing to go after lehman brothers, so i look ations. i don't really listen to speeches anymore. >> they are not going after lehman brothers or it appears any of the top executives at wall street, so not really a progressive? >> i don't know about the framing, but lehman brothers -- there was a bankruptcy examiner report showing systematic fraud at the company run by top executives. i mean -- i don't know -- what is there to say, obama works for wall street. >> that's a pretty strong statement. but in an ironic way you are agreeing with the wall street attack ad against obama who they say he is is working for wall street. but then their issue is he is not working for them enough. >> yeah, that's the point well-taken. but if you are somebody who is the nominee of your party in this case let's take obama, he has to go to wall street because he has to go to the money. and it goes back to the argument that cenk uygur you have been making for years and years and years about politics. you go to the money. and if you are not going to be ou

lehman brothers filed for bankruptcy.worst financial crisis in modern times, and perhaps the end of an era in american... >> then in 2008, when the music stopped, in the fall, they pull out the chairs, they're several chairs short. >> narrator: the county suddenly owed hundreds of millions of dollars in fees and penalties to its debt holders, including j.p. morgan. >> we knew we could not pay the warrants. you know, we knew we could not sustain the debt that we had amassed when the derivatives and the variable rates shot up. and so we just put off the fact that we were in bankruptcy, just like an alcoholic who never admits that they're alcoholic. >> narrator: and there was more. it turns out lecroy had paid money to langford's friend bill blount. >> if you didn't pay blount, you weren't in the deal. if you look at the timing of the transactions between langford and blount, you'll see that they correspond closely with the timing of the jefferson county financial transactions. >> narrator: according to federal prosecutors,

the lehman brothers in two thousand and eight.it's a two thirds chance at least to greece will leave either this year or next then we could we could know the answer really quite soon the primary concern is about exit contagion that is the concern that greece will not be the only country that would exit in its footsteps would follow other vulnerable countries including say portugal ireland or of course italy or spain and in that case i think the financial system in europe but also elsewhere will be under very heavy strains and another much greater strain than was the case in the aftermath of lehman. having seen those moderate losses over in europe just take a look at this over here the r.t.s. and the my six down more than two and a half percent with my sex coming below the thirteen hundred psychologically important market for the first time in two years so really ladies and gentlemen we're seeing a huge slump and it's definitely a bear market in russia we haven't seen a rebound in weeks now just take a look at towards moving the my

the man who says the greek debt crisis will ld to a lehman moment. how to protect your money and finding opportunity. >>> defending the 1%. the author of a new book who ys the super wealthy areital to america's economy and society. >>> looking for summer travel bargains? we'vgot th. no need for a ststaycation thi year. "the wall street journal report" begins right now. >> this is america's number one financial news prram. "the wall street journal report." now, maria bartiromo. >> here's a look at what's making news as we head into a new week. hopes for aa solution to the greek debt crisis were dashed again this week. european union leaders gathered in brussel and failed to produce any new solutions. there had been hopes for a euro bond backed by the ecb which would centralize the debt of all 17 countries in the eurozone but that did not happen, germany continues to resist. that helped bring the euro near a two-year low. there were sevel late-day turnarounds for the market. the dow is down n nearly 200 points wednesday but finished flat. more signs of

zone and he would say he said that they would create a massive shockwave worse than that from the lehman brothers bankruptcy in two thousand and eight. it's a two thirds chance at least to greece will leave either this year or next then we could we could know the answer really quite soon the primary concern is about exiting contagion that is the concern that greece will not be the only country that would actually put in its footsteps would follow other vulnerable countries including say portugal ireland or of course italy or spain and in that case i think the financial system in europe but also elsewhere will be under very heavy strains in another much greater strain than was the case in the aftermath of lehman. well in a rush or we're also seeing no bounce back from the heavy losses we've seen pretty much the past two weeks without almost any exception we are two years of my six now declining point eight. and point nine percent respectively the secular what's going on among the different storks is burbank reflects pretty much the movement even worse than the market down almost two perce

be under very heavy strains in another much greater strain than was the case in the aftermath of lehman. meanwhile in russia we have seen optimism for just around the well fifteen minutes of the day for the first fifteen minutes of the trading session but then as you can see it's gone down deeper than anywhere else one point one percent both for the ts and for the my six secular what is driving these losses financials are hit the worst juju fears that basically liquidity on the financial market could be badly if the. political situation in greece does not improve and therefore the burbank is falling two point three percent now seven content of the supermarket chain is down two percent after reporting first quarter net profit go up almost double actually on the previous year and airflow that is one of the few stocks which is up by just by the just by a notch point one percent as it's promised its shareholders that it would spend around twenty percent of its net profits to pay our debts. move over to currencies and we're seeing the euro now declining slightly versus the dollar as more inv

and the very heavy strains in another much greater strain than was the case in the aftermath of lehman. heard a very high risk could of follow if greece should leave the euro zone that's the primary concern of the market so there's data that we've seen from japan is providing just a very short term relief all right well many thanks for that update on the train. shortly we discuss which country could be first on president putin's list to visit after he decided to skip the g eight summit in the us but first i'll update you on today's stories in just a moment. mission and free accreditation freaks can store charges free if the major mentioned free risk free gifts to try freak an old free bone cancer plug in video for your media projects and free medio daugaard t. dot com you. came in. just six fists. six. six. six six. six.

you see staff ends probe of lehman without finding fraud this is according to bloomberg u.s. securities and exchange commission investigators have concluded their probe of possible financial fraud at lehman brothers holdings without recommending an foresman action against the firm or its former executives according to an excerpt of an internal agency memo this is fantastic i mean this is the great thing about having regulators like the f.c.c. who are over charged with keeping track of your accounting fraud i mean as imagine a serial killer i suppose you know who had keeping track of his crimes best goalie you know hollywood producer who every time you murdered somebody in the street they would just say oh that's great for that it's not it's not a murder it's a reality t.v. show so here with the bald you're saying you're not committing fraud it's a great story our news item but it's not fraud. south asia's largest trail is aiming to turn dangerous criminals into better citizens by taking a unique approach he's in crazy for gambling taishan and putting an emphasis on work skill

>> experience like aig and lehman brothers in a more disastrous way. this is not it, but -- >> as americans are watching they're wondering why are we having these it meeting, the point is, there's a lot happening at the regulator level and an event like this ends up affecting things and it affects the rules that end up being created. and i guess i have this fear. i think much of what we did was a punt to you guys, and the fact that -- you didn't do that. we did that. but the fact that it's taken you two years to define what a swap is is pretty incredible, and it's because we never defined it ourselves or did the work to understand what a swap is. but the thing i guess i fear is in a rush to make it look like the dodd-frank legislation addressed these kind of issues, what you may do, i mean, we never debated what these institutions should be. we just sort of layered a lot on top. we have these highly complex organizations where even the ceo itself realizes that he didn't know what was happening in this lopden operation. london operation. and i fear that