i think they tried to save lehman. i do believe they were honestly surprised by the depths of the reaction. we all said, this can be as bad as the great depression. it could've been worse in this meltdown. during the great depression, you still had granularity in the world. it wasn't affected. by 2008, we were on one financial grid and the whole thing -- by 2008, we were on one financial grid and the whole thing was grinding to a halt. it didn't occur to us to say no. one other thing about -- the initiative and a time like that is inevitably with the exception. we had two choices. either say no or say yes with modifications. there was no option of that. >> in fact, you gave enough authority that they could change their approach because you remember in tarp they were going to purchase toxic assets and you gave them the authority to add these equity injections and that is what they did. >> they have paid back. >> at some point, you determined that legislation beyond the tarp was needed to reform the system. do you think

after lehman the morning after lehman "the wall street journal" editorial page thought it was terrific they said thank goodness they didn't step in and find a solution for the default. they thought it was going to be a just virtuous excellent imposition of pain against on the deserving but it would have no effect on the rest of us. that was the dominant view of the time. there were a lot of people who thought going into the weekend all of washington was caught in this fever of saying there was too much rescuing going on and no more rescues. then i got scared to death and they gave president bush and hank paulsen the authority that we needed in the end to put out the fire. there were a huge number of people who had no sense for how perilous it was. >> there was no desire to enforce moral hazard and the decision not to. it was purely what you could do. >> important thing and i know it seems inexplicable but in finance it's not like -- we don't give the president of the united states is the standing authority to put out financial fires because of moral concerns -- moral hazard concerns. i

remember after lehman that morning after lehman "the wall street journal" editorial page thought it wasterrific. they said thank goodness they didn't step in and find a solution to prevent the default. they thought it was going to be just a virtuous, excellent imposition of pain against, on the deserving. it would have no effect on the rest of us. that was the dominant view of the times. so yeah, there were a lot of people, a lot of people who started going into the washington -- going into the weekend, washington was caught in the deceiver that were too much risk in going on. then they get scared to death and they give president bush and hate polls and the authority when it ended in to put out the fire, but the race usually but people still who had no sense for how perilous it was spent you argued there was no desire to enforce moral hazard at work and the decision not to save lehman. it was purely what you could do. >> it's an important thing, i know seems inexplicable, but in finance it's not like nash is a duty. we don't have the president of the united states standing authority to

i assume it is below lehman brothers. if we wereimum size going to take deposition should we allow a financial institution to be? >> i agree with barney on this. as did 90% supported of the congress. the issue on that bill had to deal with the community reinvestment act. it was a huge debate during that bill. there was general adoption of the notion that somehow we can create firewalls in the 21st-century and we didn't need to have the kind of separation. my own view is you don't want to go back. >> dodd-frank deliberately pushes risky activities out of the banking system like the volcker rule. we have seen some assets move out of the banking system because of higher capital which is directly aligned with dodd-frank and compelled. does the act sufficiently address the buildup, the potential buildup of risk outside of the traditional banking system such as through the up stock? is it the right way to go in the long haul? >> i believe so. the idea that every time something emerges, new product line emerges or some youinstit

. >> one of the people you profile is at lehman brothers and blowing the whistle before the financial crisis. he started before and kept going until the end. why didn't they listen to this guy. i'm not saying that he could have possibly stopped the financial crisis. but certainly one of the main - lehman brothers is one of the biggest disasters in the financial crisis. it would have helped. >> he was focussing on the fact - oliver boudeau, and. he was in the general council office and believed lehman awarded top executives big chunks of restricted stocks. basically hiding it. it was outrageous what they were getting. he would have been okay if they reported it properly. he saw this going on, tried to report it. they didn't listen to him. he resigned and tried to report it after he had resigned and they didn't listen to him. >> do you think the companies are lacking at this as a cost of doing business, that they can take risks, skirt the law, make money and pay the fine because they made o so much more money that it doesn't matter? >> these tips are jugger naughts. a whistleblower is s

. >> one of the people you profile was at lehman brothers and blowing the whistle before the financial crisis. >> leading up until. >> for many years, he started before and went until the end. why didn't they listen to this guy? i'm not saying that he could have stopped the financial crisis. but one of the main, you know, lehman brothers being one of the helped. >> he was focussing on the fact that - he was oliver boudeay and he believed that he saw lehman awarding top executives big chunks of restricted stock - basically hiding it. it was outrageous the amount they were getting. he would have been okay. under financial statements to the f.c.c. he saw what is going ongoing, she got so fed up. he tried to report it. they didn't listen to him. >> do you think some of the companies are doing this as the cost of doing business. they take money, pay for the fine that it doesn't matter. >> the company was juggernauts. they are too big to fail they'll not stop. a whistleblower is something to be swatted away. the big feign, a $13 billion business. >> fascinating stories in your piece. good to

that's what we saw with bear stearns, lehman brothers.hat's what could ruin the financial crisis, inquiry commission. the inquiry started before bear stearns went under, before lehman brothers went under. that's the problem is you want to keep them way in a different range, and there's no science, i assert to you, no science behind any of these numbers, none. it's just that we got here and the banks hate to move from here, but it's nothing about what we can do and should do and should focus on, because if you did that, then you might have to do less of some of the other stuff, and the rest of the regulation is very technical with all these very complex risk measures that goes thousands of pages that nobody can decipher. and so, a lot of the regulations just got so complicated, instead of focusing on basic needs, basic speed limits, being able to measure things and see things more clearly so that you can maintain the system, it can do for the economy on good times and bad times much more consistently and much without severe distortion. >>

lehman brothers went bankrupt. 77 points. some of them you could see coming. >> if you see it coming, it's not a black swan. charles: you could say that maybe we should have lost our aaa rating. there was some question marks about banks going into lehman. >> there's always going to be doomsdayers that say it's a broken clock, that's going to happen. the average person wasn't adjusting portfolio selling everything thinking we're going to lose aaa rating next week. you can't invest based on that. >> i don't think anything points to that. you cannot predict the black swan. who is to say that lehman brothers is going to go out of business. charles: hence the perfect back drop kate for the black swan, so relaxed, so sanguine, so confident. we think we have everything covered. >> you love your doom and gloom crap. charles: i know, pissed me off. >> keep the tweets coming anyway. everybody wants to be right. why not try and call it. if you can't see it coming, why are we saying this is it. >> the only thing black is the sky. you had

the president's bankers know me as a former banker who worked at such prestigious names as chase lehman brothers bear stearns and goldman sachs a gold let me welcome back to the kaiser report thank you and thanks are we here in london this is awesome well you know you are top high level banker or have been so i first i got to ask you what how can i do a leveraged buyout of scotland you know there's seeking independence and i've got a castle there and the economy is a ripe for a takeover like greece was taken over by really the wall street they destroyed i want to take over scotland and turn it into something big what do you suggest yeah actually you do got to get the same wall street banks give you a little extra money at zero percent which they're only lending out to people who want to do things like buy out countries or private equity firms hedge funds that want to buy out countries because they're actually giving it to little people so you just have to like you know decide you want to buy out a country as you have to say he morgan chase and you'll get very very cheap money which norm

judges our vulnerability economically and started to use george soros style techniques to target at lehman brothers cut ag, a citibank, goldman sachs and started to use manipulative techniques and the markets to attack the stock market. is sounds like the conspiracy theory but hank paulson informers treasury secretary tim about in said in his memoirs the russians approached the tidies if we tambov holdings of american dead now we can krater the economy. and they did and the chinese did not and there were some dour economic situation substantially. >>host: you have a follow-up. game plan. with. >> as a part of my research i got into the chinese stock during that is called the restricted warfare from the people's liberation army of china. this was written in 1999 closing low man-made stock market crash wask/ cyberattacks on the infrastructure or to run the currency per ryan looked at donnelly 2008 but what could happen. the next step before we will face is not done sanded tanks and shooting but seifert -- cybereconomic. they said if we will press the economy that is a vladimir putin said jus

there is no bear stearns or lehman.-- >> when you save them, european assets, which ones? >> investing in the banks. havethough the yields calmed down, there is still opportunity. includingcials, coco's bonds. to 300rket will grow billion. you can have one half percent of your capital. >> are you getting more esoteric? are you staying of and simple at pimco? there are returns relative to volatility. we look at the financial companies and subordinated financial companies and consider how volatile they can get and how liquid are they? we are not going to reach for yield. with us fromenzi pimco. that was really interesting. >> a lot of challenges. let's get a data check. a lot of data coming today. purchasingcago manager, pending home sales. futures are down slightly. >> "bloomberg surveillance." on bloomberg television. all of our interviews on digital media. we have put a lot out on social media. i am tom keene. with me, scarlet fu and adam johnson. we are thrilled to bring you tony crescenzi. market strategic does not e

my name is janet lehman, and i'm a behavioral therapist and a mom. i know what it's like when the child that you love becomes a defiant, out-of-control child who disrespects you. that's why my husband james and i created the total transformation, the program that tens of thousands of moms are now using to turn around their child's behavior.

gethave lehman's that would gas turbines and inject cash to reduce debt. on the other side you would have merging.ese companies they have turbines and the hydro asset business. mitsubishi could buy a 10% stake . the french government could also get a steak currently held by greek. this theyond phase of would combine the real business. this could make sense in terms of resolving antitrust issues. at the same time, i'll strum -- toorom says the offer is complex and they were planning to separate this. the issuenot resolve of energy independence because the assets would go to a japanese company. >> what does this mean for ge's offer? om has one moment alst week -- until one week from now to approve. at the moment, ge's offer does not include any deals with the train making business of lastr alstrom. it could be improved. you have the finance minister who said that both sides could improve their bids. the main concern of the french government would be whether siemens mitsubishi deal would create jobs. >> thanks, caroline. ♪ resurgence of the u.k. economy has t

they want the banks to describe how they would go through the same bankruptcy code that lehman brothers went through, that took five years and designate all the assets, but took down the rest of the system when it was triggered. how at jpmorgan chase, at least four times bigger than lehman brothers, depends on the accounting system, a lot more if you count or other derivatives and a lot more, trillions of dollars, no other company in the world has more assets to manage. how this will be a knotted through a bankruptcy court. good luck to all of us. so they spent a lot of time and a lot of money writing these things and then they regulator is supposed to check these things and they're supposed to tell us somehow at jpmorgan chase at the time when maybe of the companies will go down as well will go down through bankruptcy without harming us. i do not need to see what they submitted to know the answer is there's no way in the world this will happen. so they will say no, read my lips, no more bailouts. except for if there is no bailout, though be collateral damage. we will let them implode a

small portion of the total bank money perk has actually declined by about fourteen percent since lehman collapsed and the reason that it's declined is that we have all these new bank regulations all these new capital requirements coming out of basel in switzerland these are international regulations and leverage ratios and liquidity ratio is and right now for the ratios you know you name the ratio it's getting tighter and tighter the noose around banks and so banks haven't been lending much money they haven't been expanding they the money supply they've been they've been reducing it right but it doesn't mean they haven't been doing well themselves which is kind of an interesting point now for going boom bust guess jim rickards says that the currency wars people are wrapped in and regarding the fed his view is that the fed pushes interest rates to artificially low levels causing investors to seek you another currency areas which then strengthens local currencies as hot money flows in now with the fed tapering the reverse that actually the reverse seems to be happening so do you think the

small portion of the total bank money perk has actually declined by about fourteen percent since lehman collapsed and the reason that it's declined is that we have all these new bank regulations all these new capital requirements coming out of basel in switzerland these are international regulations and leverage ratios and liquidity ratio is and right up little ratios you know you name the ratio it's getting tighter and tighter as a noose around banks and so banks haven't been lending much money they haven't been expanding they the money supply they've been they've been reducing it right but it doesn't mean they haven't been doing well themselves which is kind of an interesting point now for going boom bust guess jim rickards says that the turns the wars they were wrapped in and were guarding the fed his view is that the fed pushes interest rates to artificially low levels causing investors to seek you another currency areas which then strengthens local currencies as hot money flows in now with the fed tapering the reverse that actually the reverse seems to be happening so do you think

the crisis in 2008 hit, and i sat, and i watched the crisis unfold, and i watched bear stearns and lehman brothers collapse, and i watched the footage as the accountants moved in at night only to discover even though their offices were just across the street that all the cdos and their bundles, their mortgage bundles were worthless. and i said this is it, we're going to have this amazing discussion about accounting. and and i said this is, we're going to talk about why it works, why it doesn't work. they're going the hold up the accounts, and we're going to discuss the accounts because that's what happened in the 18th century. and will's work in the bubble, it happened in france later before the revolution, and it never happened. i thought, boy, that's an interesting disconnect, i wonder if that's a story here. right now there's a lot of interest be in financial crisis -- interest in financial crisis and income inequality, and people are looking to economists. i sort of thought at least for this conference that i would just bring max vaber back into the picture, because i started thinking

small portion of the total bank money part has actually declined by about fourteen percent since lehman collapsed and the reason that it's declined is that we have all these new bank regulations all these new capital requirements coming out of the ball so in switzerland these are international regulations and leverage ratio liquidity ratio. for the ratios you know you name it a ratio it's getting tighter and tighter the noose around banks and so banks haven't been lending much money and i want to get across is that it makes a big difference of the stories you tell in a way economic theory is storytelling and you can't tell any story it has to be kind of consistent with what we observe out there but still it's a story and the type of stories you tell impact the type of policies you have and the political discussion you have and that's what serious about the new keynesians because they occupy the space that should be a more vibrant real keynesianism which is a different story about how market economies work keynes basically said that capitalist economies work pretty well but they occasion

small portion of the total bank money perk has actually declined by about fourteen percent since lehman collapsed and the reason that it's declined is that we have all these new bank regulations all these new capital requirements coming out of basel in switzerland these are international regulations and leverage ratios and liquidity ratio is and right now for the ratios you know you name the ratio it's getting tighter and tighter as the noose around banks and so banks haven't been lending much money they haven't been expanding they the money supply they've been they've been reducing it right but it doesn't mean they haven't been doing well themselves which is kind of an interesting point now for going boom bust guess jim rickards says that the turns the wars before rupp did and regarding the fed his view is that the fed pushes interest rates to artificially low levels causing investors to seek you another currency areas which then strengthens local currencies as hot money flows in now with the fed tapering the reverse that actually the reverse seems to be happening so do you think the s

if you look at the messages we send early in 2009, we have during the lehman crisis, we few -- andwereery the longer-term. you have five years of outstanding growth in the u.s. expected return must be significantly lower. >> you looked at the expected returns and you are saying the s&p 500 could rise 3% over that 10 year. msci byx and the roughly 7%. it seems that europe is the place to put your money. >> indeed, because you are out of the big problem and the systemic risks we have. you have acceleration of growth will makeeline which an outstanding performance of european assets. >> what are the headwinds that the u.s. equity market faces? 3% over 10 years is the s&p reaching 2500 versus 1930 right now. there are headwinds aren't there? >> the starting point is a high valuation. you need to have some kind of monetary policy tightening. u.k. central bank will be done by the end of the year. you have margins at an all-time high. if you want to have acceleration of growth, which you are expecting, that is going to be cap-ex driven. >> which leads us to the asian equity markets. reach pre

independent investigator hired by the company, the same one that help to deal with the bankruptcy of lehman brothers. as a result, she and her executive team have either fired or forced into retirement 15 workers either directly or indirectly responsible for the ignition switch failure and really the failure to report it to hire up executives of the company. five employees are still with the company that have received some sort of disciplinary action. she was not very specific, did not give us names, but we know that at least one senior lawyer for general motors has been let go, as well as a couple of engineers who were unpaid leave. the interesting thing from this morning's meeting was that mary barra's message to her employees was that this is now a company where we want to know of any problems immediately and those problems should be elevated to the very top. she asked employees, if they saw anything that was not working correctly, they should report it to their supervisors, and if it was not fixed at that level, that they should come directly to her. listen to mary barra this morning. o

any tom lehman reading the citizens united decision will assume that should relieve this was in no way written by a group of intelligent individuals. [applause] >> or people even remotely aware of what is going on in our current political spectrum. the decision flies in the face of so much of what our representative government was founded upon. allowing people in corporate interest groups and others to spin an unlimited amount of unidentified money has enabled certain individuals to swing the any and all elections, whether they are congressional, federal, local, state, or whether they are votes about the creation of some kind of local entity or resolution of local question. that is why we have seen the rise of the super pacs. people are dipping their hot hands into any kind of election and state ballot initiatives. anything under the sun that will help to get what it is they want. unfortunately, these people, having goals which are in line with those of the general public. history shows that there is a very selfish game going on, and that our government has largely been put up for sale

two years before lehman brothers blew up, they did a two for one split. melissa: this is why we keep charlie around. >> because i'm owed and i remember covering it. these changes are generally cosmetic. i, you know, it makes it easier for retail investor to get in. as we know retail investor is dumb money when they start pouring into the stock. >> that is not nice. >> that is absolutely true. absolutely true. when they plow into something that is not time to be in. melissa: another story charlie is on top of, family dollar adopting a poison pill after carl icahn revealed 9% stake on friday. he has been quiet since tweeting, right? >> he didn't tweet. the fox business network was on top of this. the minute it happened we were out there. we record his intentions to merge family dollar with dollar general. if you look at dollar general shares, we should show a chart, they're up tremendously, another 10% on top of that case. this is not dumb money. okay. this is smart money. his intention is pretty simple. those two midlevel retail firms. he wants to merge th

this was the week after lehman brothers when everybody was fretting about whether the capital marketsere open. and this was before tarp. and we did a transition with $5ren buffett and got billion. the very next day did a common equity deal. with warren's money, we got the validation of somebody who is regarded as a terrific investor and somebody who knew our firm. and that was an important imprimatur from him. people called us afterwards and said, gee, i would've done that. but with you i would have just gotten money. with more and i got something more important. >> a lot of people said to him at the time., i would've made that deal anybody would've made that deal, which means he is a very savvy negotiator as well. >> this negotiation to 35 seconds. >> yes. he defined the terms and you said yes. >> you know something? there were reasonable terms. >> how frightened her urine 2000? tim geithner writes about hearing your voice. >> we were very nervous. if he were alive, you were nervous. gosh, look,oh, obviously were able to borrow money and do transactions on our own, it was not that th

now coming in at number two is brad jack, former executive of lehman brothers.et for $62 million, but if you buy it, you also get his property tax bill of $579,000 a year. number one taxpayer in all the tristate is ira renner. you may know his home has a market value of $247 million. his annual property taxes, $649,000. but this is kind of a bargain, amazingly enough, compared to california. they looked at masa son, new place in silicon valley. >> $249 million? >> $247 million is the published market value on that property. it is 110,000 square feet, 39 bathrooms. somebody joked, that's the real game of thrones. 39 bathrooms. >> are we supposed to feel bad? >> feel bad for the cleaning lady. 39 bathrooms. >> what is happening is as property values go up, property taxes are going up. we all have to bake in that these numbers when we look at the cost of owning the house and whether it is a good investment. >> is this why the islanders don't have more pricey players, too much going to the property tax bill or what? >> let me tell you something -- >> owner of the is

people were so scared when lehman failed in september 08, we had a previous period where people were paying u.s. treasury to hold their money. i don't just take a risk-on, risk off approach. we're look business valuation work and trying to find high quality business at cheap price which is tougher as the markets roar up as they have. david: yeah. patrick, we've had a number of people come on over the past couple weeks suggesting europe was a good place to invest right now. but when you look what draghi has proposed i don't think anybody would suggest it implies a great faith in the recovery of the european market. i don't think he would have done this if he didn't think europe was in trouble, do you? >> no. absolutely shows a lack of strength. i'm not sure i would go so far to say it is in trouble. need something to strengthen it further this is no lose situation for the u.s. this action is supportive of asset prices globally. whether it works or not, anything that tries to get the european economy going is probably good for the u.s. economy as well. should being good for u.s. stocks

he did the 2,200-page lehman report that came out five years ago. so that was very well regarded.going to be very interested to see what kenneth feinberg has to say about compensation for accident victims. it's kind of like gm is passing this off to two joultd side parties to really determine what it owes people and how it's been running its operations. >> mickey, in a statement feinberg said that he and his team will begin collecting claims as of august 1st but they're still trying to work out the exact details around this. what do you think the scale of this compensation program needs to be to actually make up for these very steep losses on behalf of these victims? >> well, he handled 9/11 and he handled the bp compensation, and in the case of 9/11, you have to remember that's now over 12 years ago, people got on average $1.8 million to the victims. so i think it has to be a significant number. i think it has to be a number in a million area for individual victims' families. and remember, we're not sure that it's just 13 families. that question came um over and over again whethe

this is a week after lehman brothers when everybody was fretting about whether the capital markets were open and this is before talk and we did a transaction with warren buffett which we preferred and got $5 billion. and the very next day did a common equity deal in the market so the markets were open to us. and with warren's money we got more than just money we got validation of somebody that's regarded as a terrific investor and somebody who knew our firm and this was important. people called us up afterwards and said gee i would have done that and that would have been great but with you i would have just gotten the money. with warren it was something more important. >> rose: a lot of people said to me at the time when you made that deal, i would have made that deal, you know. anybody would have made that deal which means that he is a savvy negotiator as well. >> let me tell you. negotiation took about 35 seconds. >> rose: is that right. >> yes. >> rose: you asked and he said yes. >> there were reasonable terms to the risks he was taking at the time. >> rose: how frightened were you i

had a high concentration of counterpart risk to one substitution, whether it be a bear stearns or a lehmangs unravel, it's going to be a problem. but something funny has happened since then, of course, and that is this overbearing regulation that has tried to take the large institutions, the too-big-to-fail banks, the primary dealers and basically create a structure in the marketplace, whether it's through capital controls or regulating proprietary trading, that has taken some of the big players. you know, when i used to cover corporate securities hedging in the '80s and '90s on this trading floor via the treasury markets, many of those positions were because these large institutions were constantly dealing in corporate securities. so the real issue then becomes accumulation versus liquidation. if we have a credit issue developing, the accumulation phase is what we're going through. lots of players that have now taken the baton from these large institutions, and they have become more active. so, you know, the volume used to be in the cash markets for treasuries. then it was next in the der

lehman brothers. congress. the blame can be assigned to any number of parties.to sell something attractive and appealing and something alluring to low income and poor people. if they ended up in a not a good place. how do you make this different? problems in so many our country that seem like they have no solution. financial exclusion is not one of those. there is a solution that is rooted in new technology. we are entering into an era of the non-bank. you can have all the power of what you used to be able to do in a bank in the palm of your hand. with software platforms and mobile phones and mobile apps, you can substitute the things that you used to have to be able to do in bricks and mortar infrastructure. that is very expensive. you can do that now with software. be extendingwe credit to low income people? >> it is a banking product. it is cashing your check. >> that is totally different. >> this is not lending. >> if you want to cash a check outside the system, they will take two to four percent of your check just to give you cash. what do you do with cash?

. >> what does that mean yeah go >> the big trades like the lehman recovery traits that a lot of hedge put on there were just amazing good risk traits you could put on in big size. those are not out there. what we're finding is a lot of little trades that you can put on and hit a lot of singles and the win-loss ratio is extraordinarily good right now. >> how come long short equity guys in the spring -- was it may echo they got chewed up that month. how did you avoid that? >> they did get really chopped up. use a big reversal and momentum and growth in stock. i believe what happened, cta's had to unwind equity positions. then you have a lot of market news the relative value funds like o'connor they got really big. when you get that they come you're forced to write -- manage risk when a list of glee. when it starts rolling down the hill, these bigger market news hedge funds cut of continued to push it down. the credit he and markets has really to tear rated post crisis. it doesn't take a lot to start a liquidity cap. >> why is that? >> dodd-frank. if you use credit markets as an example,