the share price for lehman brothers was a direct result of naked short selling. and i would argue that the of the percentage was due to the panic of people seeing what was happening. the amount of naked short selling failed to deliver, people silently without having to stock, without borrowing the stock, just selling it outright, was 1600 times greater in the week of september 112008 and ended in three months earlier for a comparable week. that was a secret weapon. that was the two of a very. i should've been illegal. let me take another two exemptions allowing naked short selling. one exemption is named after bernie madoff to remember bernie madoff? called the made-up exemption. mr. madoff went to the sec and said when he was head of nasdaq, he said shouldn't market makers be allowed to short, naked short selling to provide liquidity? if somebody wants to buy apple and there's no shares available, wouldn't be a good idea that we seldom the shares and then find them later? the sec said yes, and that exemption was massively abuse in 2008 by market makers. i write

lehman brothers was created a huge shock wave as i'll describe. lehman brothers was an investment bank. it was a global financial services firm. it was not a bank. so it was not overseen by the fed. it was an investment company. it held lots of securities. it did business in security markets. it couldn't take deposits not being a bank. instead it funded itself in short term funding markets including the commercial paper market. lehman invested heavily in mortgage securities and commercial real estate during the 2000s. as house prices fell, lehman's position got worse and they were losing money in real estate. lehman was becoming insolvent. it was losing money in all of its investments. and it was coming under a lot of pressure. indeed as lehman's creditors lost confidence they with drew fug refused to roll over lehman's paper and other business partners said we're not going to do business you because we're afraid you won't be here next week. lehman was increasingly losing money and increasingly finding it unable to fund itself. they to find somebo

sebastian lost his job at lehman brothers. feet as we start in depth comeback stories. >> reporter: he is friendly. he is handy and he has a growing business, making homes safe for children. four years ago things were a lot different for this father of two. he worked in the executive dining room of lehman brothers. >> had good benefits, vacations. i saw myself staying there for a lot more years. >> reporter: when lehman brothers tanked he was out of luck. >> just picked it up where you are and say let's move on. >> reporter: he was child proofing his home for a baby and then helped friends with their place and a light bulb went off. >> it naturally became the business idea. there is a need for this. i'm pretty good at it. >> reporter: word started to spread. >> i had a phone call the next day. i thought, well, this is a pretty good start. >> reporter: three years later he may hire his first employee. customers are finding him through mommy groups. >> everyone saying that sebastian would be the one to call. >> reporter: his new

payouts to clients or to delay payouts to clients after the landmark ruling and the bankruptcy of lehman brothers so in this ruling britain supreme court said that lehman's clients whose cash the u.s. investment bank had nixed with its own have the same rights as clients whose cash was segregated in a segregated account so this means effectively for m.f. global that if your money was in a segregated account you have exactly the same right to claim it as if you didn't this just blows my mind and gerald celente was once on our show telling us that his money was frozen in a segregated account as a result of this whole am of global he said it was to the tune of six figures i want to bring him back and just follow up with that notion of what we're talking about before the break because they're all just on a personal level do you think you're going to get your money back and how does that make you feel. oh it's wonderful i love i love my body being stalls i mean how do women like getting raped this wonderful feeling as they could do if they could do anything that they would i haven't had a better day o

morgan essentially took seven billion dollars out of the carcass of lehman brothers that was lehman brotherswith j.p. morgan is now doing is taking money from farmers and retirees so here's my question to you if they're going to be able to take money from farmers and retirees whose next is a bank account knocks can they do this to individual savers with a checking account you know could they flip the rules around so that all someone someone one day could wake up and boom the money out of their checking account is gone i don't know just asking some questions. where is the national outrage because if you look at a group like occupy wall street the protests remained pretty much silence about the stem after lobel collapse they don't see the connection what what what what why is it just because they're illiterate financially you know i don't know i know some very sharp people that i've seen alexis goldstein occupy the s.e.c. sharp person these are the type of people that need to sort of stand up and say what is going on so you know you've got a look at this what i see right now i see the core int

. >> if greece is forced to push this deal through, some say we could see another lehman brothers scenarioour hands. what to do you think? >> i think there is certainly nervousness in the market. as has been said before, the default is really a big risk for the market. on the other side, i think investors at a lot of time to digest all the bad news, all the risks and consequences that at the lehman brothers scenario is a rather unlikely. >> if this bond swap goes through, do you think greece will be left in a better position? >> that would be great. no, actually, i again will be just another step. even if it gets through, it will definitely not be the final one. the cut we have is not sufficient. greece it needs much more help than it has received so far. >> ok, thank you for joining us from the european school of management and technology. >> if you look at the markets right now, you might think that the greek debt and deal has already gone through. stocks have and it sort of optimism that it will be completed. our correspondent stefan wolff joins us from the frankfurt stock exchange. wha

the fdic outlined in the paper how this process might have worked in the lehman brothers case, and i refer you to our website where you can look at that paper if you're interested. let me say a few words about the work we have done to prepare ourselves to carry out our new responsibilities under title ii of the dodd-frank act. the fdic has taken a number of steps to carry out its new systemic resolution responsibilities. first, the fdic established a new office of complex financial institutions to carry out three core functions. the first function is to monitor risk within and across these large, complex firms from the standpoint of resolution. second, to conduct resolution planning and the development of strategies to respond to potential crisis situations and third, and quite importantly, to coordinate with regulators over seas regarding the significant challenges associated with cross border resolution. when you're dealing with our very largest, most complex institutions, you're generally dealing with companies with very significant international operations. and if you're going to

over lehman brothers failure, for example, inconsistencies which causedro creditors of lehman. so, one of the things that we're trying to do the dodd-frank legislation which includes as i mentioned before, includes provisions for safely allowing large financial firms to fail, one of the complexities there is many of the firms that this would be applied tore multinational firms. maybe not just two or three countries, maybe dozens of countries, and so collaboration with other countries in figuring out how we would work together to help a large multinational firm fail as safely as possible internationally. going on now we tried during the crisis to cooperate and mostly ad hoc way. we were in touch with regulators in the uk and elsewhere. but given the time frames and the lack of preparation, you know, we didn't -- didn't do as much as we would be able to do with a lot more lead time. i think that was a weakness of international collaboration. for the most part, though, countries cooperated in dealing with the financial institutions that were based in their own countries. aig was a

sa bass cheen lost his job at lehman brothers four year will ago. sn't a high-powered executive, he worked in lehman's dining room. susan candiotti explains how he got back on his feet as part of our series "in depth" comeback stories. >> reporter: sebastian is friendly, handy and he has a growing business, making homes safe for children. four years ago, things were a lot different for this father of two. amy worked in the executive dining room of investment giant lehman brothers. >> it's a good company that take care of you, you had good benefits, vacation. so i saw myself staying there for a lot more years. >> reporter: but when lehman brothers tanked in 2008, amy married, raising his first child and paying a mortgage, was out of luck. >> just pick it up where you are and say, okay, let's move on. >> reporter: amy was child-proofg his home for his baby and then helped friends with their place and the light bulb went off. >> it's natural to become a business idea, which was there's a need for this. i'm pretty good at it. >> reporter: word started to

too big to fail and we have to save them have you seen one with three head roll from any from lehman brothers from morgan stanley from goldman sachs from countrywide some are kovi are not yet year old and they come up with is to pit why that their buddies do because it's just a revolving door that we neither it mick nor did know are right that we screwed you on and nobody goes to jail yeah so that's what the whole thing is as you played on that clear pitch really clear who was the c.e.o. what was the end of the treasury secretary of the bush henry paulson where was it from goldman sachs who's the head of the c f.t.c. gary gensler is he from goldman sachs who knows obama's chief of staff told a little while ago oh that was the daily wizzy from j.p. morgan chase who's the treasury head over there in canada oh he's from goldman sachs who's the head of the european central bank now drug you guys chairman of the european division of goldman sachs yeah i mean what is it take a six year old to figure this out the merger of state and corporate powers is clear fascism and it's right in front of you no

after lehman brothers collapsed, a lot of people saw their money caught up in the profits they thoughthad, that were sucked in a bankruptcy proceeding. behavior changed across wall street. every time there was money to extract, they didn't keep it as a paper profit, they actually took the physical money out. so that money has been distributed over time. because nobody wanted to be caught without having gotten their money already. probably of it already has been paid out. >> that's a great point. not a pure payout. but i think, too, michelle, and again, let's talk about this a little bit without getting into the numbers and cat claws and all the other stuff, which is really this. this is a sovereign default. that, to me, is the headline. greece has defaulted a number of times over the last century. a number of countries have defaulted, argentina, a number of times, russia, indonesia has defaulted. but this is a eurozone nation that has by the one committee that determines itself defaulted. that is a huge headline. even if it doesn't necessarily trigger massive financial problems, it is

now in particular one of the -- one of the many implications of the failure of lehman brothers is the money market funds. there was one particular fairly large money market fund that held among its other assets was commercial paper held by lehman. when that failed, that commercial paper was either worthless or at least completely illiquid for a long time and so suddenly this money market fund could no longer pay off its depositors at $1 per share. it lost money. now suppose you're an investor in a money market fund and you know if you can ask a dollar back you can get it but you know they don't have enough money to pay everybody off a dollar, what are you going to do? same thing a 19th century bank depositor would do if they heard their bank lost money so investors in this fund and in other money market funds began to pull out their money just like a standard bank run. and i'll show you the data on that in just a second. but we had a very intense bank run or in this case money market fund run in which investors npr funds began to pull out their money just as quick as they could. now,

i disagree with the notion that individuals wouldn't, lehman brothers tried to make a electric car.t failed. so let the market work. >> congress will never admit quantitative easing one, two, three, and up to 15 is the problem. our weak dollar has a lot to do. we'll blame the vicious oil companies. >> julian, thank you for joining me this week. >> thanks for having me. >> well, sound the alarmm. certain typwas crime is on the way up. a sign that american economy is on the way down. and talk about having gen in the game . how a tattoo can help you from missing a business call or text again. or hires another employee, it's not just good for business, it's good for the entire community. at bank of america, we know the impact that local businesses have on communities. that's why we extended $6.4 billion in needit to small businesses across the country last year. because the more we help them, the more we help make opportunity possible. i heard they found energy here. it's good. we need the jobs. [customer:] we need to protect the environment. [worker:] we could do both. is that possible

the collapse of lehman brothers. it is hard to see what he would be able to do to prevent the collapse with the banks. the shareholders and bankers probably would be seeking compensation. >> but the parliament in your country voted in september 2010 that he was the only person who should be tried on these charges related to the collapse of day iceland bank. this led through diplomaticsrows with the netherlands. >> it's good to have some kind of truth and reconciliation committee to go through this. there are many other people involved. members of the banking community and alistair darling are not standing trial. >> you do need the buck to stop somewhere. he stands accused of negligence. it is a serious charge. should he not have the chance to defend himself and for him to go on trial and justice to be done? >> i guess in general the people in knights landing are divided but probably curious to find out what happens behind the curtains. -- people in iceland aare divided. the consequences [unintelligible] people would

there's a pre 9/15 and post-9/15 which was the collapse of lehman brothers. the enomic world.rad dags to the psyche is the worse than we're comparing it to. people really have a despair about the future, they don't see a way out of this. they just think he's a weak leader. >> but, mary, i'll accept your point on a lehman brothers point but the public understands that crisis was a consequence of the bush/reagan era. independent voters are now looking at president obama saying that he has saved us from something that was utter failure. >> no. >> the metaphor will be the auto industry, where the crisis will be, either you supported it. president obama will say we saved it. in swing states that will be hugely important. mitt romney would let them go bankrupt. >> mitt romney has an economic plan, and it has not received a significant amount of attention in the primary because the other republican candidates have very similar plans but if you start looking at it's back to the same old let's deregulate everything, let's massively cut taxes for high-income people. it's not the kind of

the fdic and the lehman brothers case actually refer to our website we can take a look at that paperif you're interested. do let me say a few words about the work we have done to prepare ourselves to carry out our new responsibilities. under title ii the dodd-frank act. the fdic has taken a number of status under the past year and a half to carry out its new systemic resolution responsibilities. first, the fdic established a new office with complex financial institutions to carry out three core functions. the first function is to monitor risk within and across these large complex firms from the standpoint of resolution. second, to conduct resolution planning and the development of strategies to respond to potential crisis situations and third and quite importantly, to coordinate with regulators overseas regarding the significant challenges associated with cross-border resolution. the new joe at the very large and complex institution, you're generally doing what comes to nice but very significant international operations. and if you are going to deal with the orderly resolution of one

a bombshell from jon corzine as his last day as lehman brothers. he gave direct instructions to transfer client funds to cover an overdraft in another account. it was three months ago when corzine told members of congress this. >> i never directed anyone at mf global to misuse customer funds. i never intended to. as far as i'm concerned, i never gave instructions that anybody could misconstrue. >> well, how damming is the e-mail we have? we have a criminal defense lawyer. he's with us tonight. looks like $200 million in a segregated customer account, that got put into another account. treasurer of mf global, says, this was per jc -- jon corzine's direct instructions. >> well, we don't know if they were client moneys that corzine knew they were, because the account also contained funds which could have been transferred out properly. and apparently corzine and the fund never represented that they were client funds. >> so do you think there's room to dance around here? >> it looks bad at first blush, but it's not open and shut. >> and they continue to

remember lehman brothers -- name one person from lehman brothers. aig had derivative data. well, name one headliner from aig. outside the wall street world, most american citizens couldn't. those were faceless corporations that have somehow brought us to the brink of financial meltdown. and then we have bernie, a phase, a family, someone to be the target of all of their free-floating rage and anger come of this fence being betrayed because that is what he did rudy betrayed people who trusted him. well, that is the wall street did. it betrayed people who trusted it. but he was a ham and they hurt and it then. and i think it was the mood of the country that made him so much a target of public rage, rather than anything unique about them. >> broods stood by him in a lifetime. and he and she is still standing by at ernie had better things change. can you talk about that? >> it has changed and i was able to interview with this file for an article in the times about her life since then. she realized that her loyalty to bernie was costing her her family. now, why did she stay with

lehman brothers had celebrated its 150th anniversary and in 2001, mark zuckerberg was captain of his high-school fencing team. borders bookstores had $3 billion in annual revenue and meanwhile, kindle something you did to a fire and nook was merely a small corner of the room. most americans knew little about osama bin laden or al qaeda. at the time, i was u.s. attorney in san francisco and i myself being out here paid little attention to those terrorist attacks that were occurring overseas. today, our world can change in the blink of an eye. the effects of that change are felt more rapidly and more broadly than ever before. consider the current economic climate. when companies fail to recognize and adapt to change, they can go out of business almost overnight. law enforcement and the intelligence community face a similar challenge. if we in the fbi failed to recognize how the world is changing, the consequences can be devastating. lives can be lost. our national security can be threatened, and the balance of power can tip toward our adversaries. terrorism, espionage, and cyber attack

expected it caused barely a ripple effect in the markets, just the opposite of what we saw after lehman brothershen it was so unexpected. >> all right. thank you, michelle. appreciate that. no lehman event. that's key. so we have a solid jobs report. that sparked some modest gains in the market. let's turn to our investors, see where we do some stock market work on this whole story. we've got lee munson. he's chief investment officer at portfolio. and jim le kant. senior vp of investments. just real quick on this greek default, you're going to trigger some credit default payments. is this a big deal? should people worry about this? it all seems orderly, fine, discounted, no lehman event. just break it down for me real fast. >> i think this is the event we can finally say we put the nail in the coffin of having to cover greece every single day. so let's move on and go to the next fire. >> next fire. i appreciate that. jim lacamp, i know you like to look for the worst. so i want to make the same question to you. and i want to flip to you also the issues of potential debt swaps and credit default e

remember, you know, lehman brothers have to. name one person from lehman brothers. aig had blown up with derivative debt. well, name one headline from aig. outside the wall street world, most american citizens couldn't. those of faceless corporations that had somehow brought us to this brink of financial meltdown. and then we have got bernie, a face, a family, someone to be the target of all of this free floating rage and anger, this sense of being betrayed. because that's what he did. he betrayed people who trusted him. well, that's what wall street it. it betrayed people who trusted it, but it is and it. he was a him and ate her and ate them. and i think it was the mood of the country that made them so much a target of public rage rather than anything unique about them. >> ruth stood by her man for a long time and when the book and she still is standing by burning, and that has changed or can you talk a bit about that? >> yes, it has changed and i can talk about because that's able to enter the root in article about her life since then. she realized that her loyal

. >> susie: the lehman brothers saga entered its final chapter three years after filing for bankruptcy. the investment bank whose failure kicked off the worst days of the financial crisis is now emerging from bankruptcy. the move frees lehman to begin selling its assets next month and distribute the cash to creditors. lehman filed for bankruptcy in september of 2008. it was the largest bankruptcy filing in u.s. corporate history. so, end of an era there. and maybe a new era on wall street with all of this selling, everyone thought that it was going to be up up and away on the dow. 13,000 headline. and now a lot of questions of what happens next. >> tom: we saw that 13,000 number just last week, let's recall, so up until today it was the best start for the dow in a year since 1998. we hadn't gone a streak like this in terms of the number of days we've seen, not seen a triple digit loss since 2006. so lots of records being broken here tonight with the market selloff, and it was across the board. so let's get you updated with tonight's market focus. it was the biggest stock sell- off we'v

nobody except for lehman brothers and wamu were allowed to fail. so you prop up the inefficient, you still have a very large financial sector. if you look at the bank balance sheets, i'm delighted that banks are getting healthier, but if you look at their balance shoots, the revenues are going down. they went down last year. it's a smaller pie and there's still a lot of them competing for it. so that is going to continue to be a hindrance to the economic recovery. >> that's all the time we have. thank you very much. always a pleasure talking to you. >> thank you. [ applause ] >> ali and sheila, thank you so much. now we have gene sperling here. and we have our editor in chief james bennett. james this morning told you a little bit about our coverage issue. i think the deals we're trying to make is gene said i'm not supposed to be on that cover. so gene sperling and james bennett. [ applause ] >> thank you. >> gene, as many of you know, has been in politics for more than 20 years now and served in the same capacity in the second term of the clinton

lehman brothers was in itself probably too big to fail. the sense that its failure had enormous negative impacts on global financial system, but there we were helpless because it was essentially an insolvent firm. it didn't have enough collateral to borrow from the fed. we can't put capital into a firm that is insolvent. this was before the t.a.r.p. or anything else that provided capital the treasury could use so we had no legal way to do it. i think if we could have avoided that we would have done so. so it was somewhat ad hoc, although the two cases were intervene, bear stearns and in aig, i think the case was pretty clear given not only the firms themselves but also the context, the environment that was going on at the same time. interestingly, we've had to get much more into this issue since the crisis, because there are a number of different rules and regulations which actually require the fed and other regulatory agencies to make some determination about how systemically critical a permit. for example, the new basel iii capital requi

we saw what happened in lehman brothers and aig. the too big to fail problem, the effects that they had on our system. more generally the problem of lack of any attention the systs opposed to individual ssystem. so there has been a very substantial amount of financia regulatory reform in the united states. the biggest piece of legislation is dodd-frank act. i'm sure you know legislation is named after the chairman of the real vent committees barney frank is -- was the head of the house financial services committee when the democrats controlled the house in 2010. and senator chris dodd was the head of the house -- the senate banking committee. and so this wall street reform and consumer protection act passed in the summer of 2010 was a comprehensive set of financial reforms addressing many of the vulnerabilities that i talked about earlier. what were the vulnerabilities. one of them was the fact that there was nobody sort of watching the whole system. nobody looking at the look for risks and threats to

how did we get here you know you may remember in two thousand and eight we had the implosion of lehman brothers and we had against lehman in two thousand and eight but lehman was an investment banking firm we lost lehman we had bear stearns we lost bear stearns and so really a lot of the distribution for i.p.o.'s has been dislocated right at the same time in recent years you've seen the arrival of companies like secondary market in the end like you have the ability to invest in facebook now for the last two years by insiders selling out their shares same thing and saying the same thing in groupon so they'll want a lot of times in these companies were finally go public there'd be no gas left in the engine they basically full on it i think i don't think we go back meaning that you've got that the internet you've got investors that want to invest and you've got these new we ways of distribution so we've we really have got to monitor this i think it's it's a positive development liquidity is good for new industry we want new businesses we want new ideas we want new creativity we want all of those t

you know lehman brothers cons t consisted of a lot of board members. there was obviously -- >> you can use bear stearns board, if you want. that's okay. >> lee man board has people on it that were old-timers that weren't really -- >> in the game, if you will. >> -- in the game in the sense that they were probably not asking a lot of the right questions, and i felt as somebody internally there all along they didn't necessarily blame management for a lot of things. i felt that between the bear sterns collapse in mair of 2008 and the lee man collapse in september of 2008, my greatest question was where was the board. and i don't have to mention the names. you can go google it. look. you can see a lot of these people did not have a lot of experience in financial services. >> but i wonder if they had a lot of money on the line if they would have thought differently. >> the answer is they did not. >> they did not. >> no. we've got other news to get to including an fda panel voting against an experimental merck drug for a rare type of cancer called sarcoma. m

. >>> lehman brothers emerged from its record setting bankruptcy.e investment firm will start paying back about $65 billion to its creditors starting next month. the collapse in 2008 was a key trigger of t financial meltdown. >>> investment tycoon r. allen stanford has been convicted of operating a multibillion dollar ponzi scheme. he was found guilty of bilking investors out of $7 billion over the course of two decades. the 61-year-old was once one of the wealthiest men in america. he could end up spending the rest of his life in prison. >>> and apple is expected to unveil the latest version of the ipad today in san francisco. tech experts believe the new ipad will have a sharper screen and faster wireless broadband speeds. when apple unveiled the ipad 2 last march, the new tablets went on sale nine days later. terrell, i don't think the fans can wait for nine days. so excited. >> i haven't gotten the ipad 1. >> me neither. >> i need to work on that. >> we do. >>> thank you so much. it's no secret that keeping a secret is hard. for young people who

or the old lehman brothers all they're doing is buying cocaine and shoving it up their nose that's all they do a friday or saturday night go to some people in the supply bankers all they're back making snorting cocaine well let's look at these facts here because the fact is here you have the pilot of the economy of the financial sector in the united kingdom and they've blacked out the gauge that. tells them that there is widespread fraud and money laundering and toxic derivatives that have destroyed their economy so because of that he doesn't see it in fact the solution offered is the figures could reignite expectations the bank of england may need to add additional stimulus to bolster growth now isn't this the same exact thing that actually has caused these problems yes it is it's more debt the sun cash it's debt because the bank of england has no cash all they do is they lower the reserve requirement for the entire system globally which means that they increase the debt load which means more repression which means more debt service which means more necessity ssion to move billions fr