everyone expected the government would save lehman brothers. it didn't. on lehman brothers to fail. that was a huge mistake in the first place to rescue bear stearns because that created a lot of moral hazard that as people assume they know what the government is going to do and protect them so they make different decisions. having created the moral hazard, they been allowed to lehman brothers to fail, shocking everyone in the market. people at that point did not know who was going to fail who is not going to fail. people began to withdraw funds from banks and other financial is to shun spirit the credit card gets dried up and banks refused to lend to one another. the largest in the country refused even overnight and almost no one who would follow the financial markets for years ever saw anything like that. i think this was the result is some serious states that government officials in rescuing bear stearns and not rescuing lehman brothers. and then in the same week aig was unable to meet its financial obligations and after letting lehman brothers fail, they went and rescued aig. th

you were at lehman brothers.d you learn from that experience that makes you think that this won't happen again? have we corrected the problems to make sure this won't happen again? should we have rescued lehman? should the government have bailed it out? >> that is past history. here is what i will tell you. wall street is necessary because it helps move the financial operations of america forward. i'll tell you the problem with wall street. it's too much about i got to make money. it's too much about, there's too much greed. that's just part of what happens there. i've always argued -- >> lehman was too greedy? >> i think on wall street most of the bankers have to fight off the concept of greed. you know what they say all the time up there? am i going to get paid? that means what's my big bonus going to be. nothing wrong with that but here's the problem. if all you seek is money without values then you're bankrupt. what i think is our financial community has to realize there is a moral underpinning. michael novak

biggest deal, but it is interesting, what you are seeing at barclays is one of the last vestiges of lehman brothers which they acquired in 2008 being shipped out. lehman was acquired lie barclays in 2008, bob diamond bought it for a fire sale price, bankruptcy, 1.7 billion dollars for the whole firm. liz: can you imagine? >> it was really nothing. he had grand ambitions to build this u.s.-based barclays america into a huge investment banking operation as the markets recovered in 2008, he thought they would be recovering and tap into it. bob diamond had to resign in 2012 amid the libor interest rate manipulation scandal. liz: which he had nothing to do with it. >> he took the fall because the bank was involved. the new ceo anthony jenkins has been on a cost-cutting tear, a lot has fallent on america's unit, and one other thing complicating matters for barclays is a new fed rule. i spell all this out in the foxbusiness.com story, live right now. a new fed rule, any foreign bank with subsidiary in the u.s. above 50 billion in assets and i think this would easily qualify for that, you come under new st

. >> financial crises did not occur because lehman brothers and bear sterns went under they like to say lehman brothers was the trigger it was not when they went under everyone realized that citigroup, bank of america, and goldman and motor beganmorganstanley had the same crab on their balance sheet. >> we were -- we were up against the wall in terms of trying to go against that pole see. neil: milting down. >> fox just began when that bailout began we were fighting against it tooth and nail, there was a determination to keep these banks afloat, when probably what should have happen they should have broken up on their own. neil:? -- they created a monster if -- >> if you done bail it all it would have been armageddon, this is what fed did, i think volcker is right somewhat, federal reserve, government over last 20 years has bailed out the banks several times on the way. >> yeah. >> creates moral hazard, and allowed glass-steagall. >> so why should they -- >> we -- okay, all right. neil: okay you see why he is the better boomer. >> sad i love it. >> thank you so much. >> i look younger t

the book among other things, i am not convinced were it not for the fateful decision that sent lehman brothers to bankruptcy court it up for would've been as bad as it was. there are degrees of bad. it was going to be bad. once the bubble was up there in the crazy mortgages existed and derivatives existed, there were going to be big losses. but i don't think -- you can't rerun history. i don't think it would have been as bad without this decision to send the man to bankruptcy court. popular question by the way not the one you asked was anyone calling this correctly in 2005? they are the answer is maybe. you can find snippets of writing for this and that person including my colleague at princeton, paul krugman who is yelling in 2005 getting into big trouble. it was in a huge number of people and the people that were yelling were being called party 's and skunks at the garden party. the masters of the universe were sharing paying attention. postcode did carp work and do programs like that help? >> guest: gas and probably. i don't mean to imply every such program designed to backstab the failing

then lehman brothers failed in 2008 pushing the nikkei downward. it tumbled below 7,000 hitting its lowest level in 26 years. the key index stayed weak due to the effects of the strong yen, along with the earthquake and tsunami in 2011. in late 2012 prime minister shinzo abe returned to power. some foreign investors began buying japanese stocks on expectations that his abenomics policy would get the economy moving. the bank of japan's massive monetary easing in april 2013 and additional easing in october 2014 weakened the yen. that helped improve the earnings of exporters and pushed up their stock prices. the nikkei 225 climbed back to 16,000 at the end of 2013 and to 18,000 in 2014. share prices have continued to rise this year as japanese companies report higher earnings, and investors expect the u.s. economy to improve. >>> we asked market analysts for their views on the stock rally. >> translator: share prices are rising on improvements in corporate performance, and the economy. i think investors are optimistic. they believe companies can creat

previously, it was held by lehman brothers. it is valued at around 36 billion.ormer cia director, david petraeus, was sentenced to two years probation and ordered to pay a $100,000 fine for giving information to his biographer and mistress. more on that story later. mark: finance ministers met in rega today. for look ahead, we are joined by the chief political global analyst. the new term to describe greece citigroup pointed in 2012, the new term you have coined is grimbo. greece in limbo, explain what this means? >> it comes from the term greg exit. grimbo, is great limbo. we should not think about the exit as a binary event. there are an interim's. anna: what are you expecting for this day in rega? angela merkel said she needed a deal by april? >> do-nothing the markets are expecting that. we are talking about a rolling deadline, as our finance minister put out an op ed yesterday for a new deal for greece. he mentioned getting the creditors to change the way that they look at the man. there is very little likelihood of that. the greeks do not have a lot of lev

harvey miller a partner in a law firm that recommends lehman brothers is dead. he died today in his home in manhattan of lou gehrig's disease. he was 82 years old. that is a look at top stories we are following on this monday. the apparel industry is a $2.5 trillion worldwide behemoth. about 70% of workers are women. many of them in developing countries, barely making so-called fair wages. several leaders in the industry are looking to change that with the fair fashion movement. i spoke with a nobel laureate and university chancellor earlier today on the social responsibilities of the industry. >> we discuss what the responsibility of the industry is, and i thank them for helping us and at the same time, it is a great breach between them and the poor women. most of the workers in the fashion industry are women. 80% are women. it is a great opportunity to help them lift themselves out of poverty and that is what i focus on. as you make a business, business should not be all about profit. it should be wider than just profit. people and the planet. sustainable prof

little guy in toledo ohio, at the chrysler plant, that's socialism, but if we don't bail out lehman brothers the cats and dogs are going to live together and the world is going to end. that's a message begging to be demagogued. you can't win like that. >> you've been a guy that never really followed the establishment wing of your party in any respect. if marco rubio is a person who could potentially be the candidate, is he a guy you would back? are you abandoning him like some others in the tea party? >> i think rubio would have no problems rallying the base aside from the amnesty issue, which is right now hot as the sun in a gop primary. virtually he is as conservative as they get on every other issue. he's one of the most conservative members of the u.s. senate and he's not a corporatist. if he were the nominee, the base would be energized for him. >> amongst the conservative base will the fact marco rubio supported comprehensive immigration reform then reversed himself, will that disqualify him because he initially supported comprehensive immigration reform? >> it's why, robert he's not g

this was after the mortgage crisis aig, lehman brothers, and the whole thing. president was there to be in a position to bring the country together. right before he was sworn in, he asked then leader john boehner and i to a meeting, and he was president-elect. i recall the meeting in the lbj room in the senate hearing he came over to us and said i am really serious about learning to work with you. i want us to work together and bring this country back so we can move forward. he indicated that we should bring him our ideas about what should be and what was reported to be coming, the stimulus bill. after the swearing-in, we all went to the white house and met in the roosevelt room. i was so bold at the time that i brought a white paper to show the president. he said bring your ideas, and i did that. the president looked at initially and said there is nothing unreasonable, nothing crazy in here, i think he said. we were very careful not to be crazy in this white paper. i know that what the assumption was that what republicans wanted , tax reform, stimulus, was not

. >> and now banks, especially those who god burned only the only fannie mae or lehman brothers but that's the wrong lesson to draw from the crash. healthy skepticism is one thing, a total unwillingness to believe in anything positive is something else entirely. if you're going to own stocks you need to be willing to extend some measure of trust to the people who run the companies that you own shares of. what else could be going on to spur buying? had a massive amount of consolidation and a host of industries as of late. seen it in airlines rental cars, food telecommunications entertainment, perhaps these executives are buying stock because they hear the footsteps. maybe they have been contacted by some other company and turned that company down. spurred overtures happen all the time and if executives think they may be next could be a healthy and honest reason to buy. of course, they have to disclose anything that's a serious bid, but a lot of times you just get a phone call say no bye. then they do that because the company is worth more than they thought. maybe they think the company coul

i worked at lehman brothers and traveled the country as a businessperson. i served on corporate boards. you might recall i was a huge , television star on fox news. [laughter] where i substituted for the low-key bill o'reilly. you know in life, the lord calls , us for certain things. my dad and mom, simple blue-collar folks. their son became a member of the legislature, the united states congress, working with presidents, including the ronald reagan. i had a great career out of politics, but i felt the call. take the skills and go and apply them to your state. so, i ran for governor. and i won and i beat another incumbent democrat and it was narrow. let me tell you when i won, i , faced some of the hardest times the state ever had. we were $8 billion in the hole which was almost 20% of our general revenue fund. we lost 350,000 private sector jobs. we had $.89 in our rainy day fund. literally. and people said there was no way up and our credit was at risk. so i won the election, i have no time for politics. i really have not throughout my lifetime had a reas

i do a lot of different things worked at lehman brothers, served on corporate boards command you might recall i was a huge star on fox news where i substituted for the low-key bill o'reilly. in life the lord calls us. my parents, simple blue-collar folks. the united the united states congress working with presidents, including ronald reagan. i had a great career out of politics and felt the call, take the skills and don't apply them to your state. so i ran for governor and wine and beat another incumbent democrat. it was narrow. when i won my faced some of the hardest times that the state ever had. 8 billion in the hole 20% for hall, 20 percent for general revenue fund. lost 350,000 private sector jobs $0.89 on our rainy day fund and people said there was no way up, and our credit was a risk. i won the election indefinite time for politics i really have not had a lot of reason to practice politics. we went to work at reinventing the government of the state of ohio. some people say you have to raise taxes. but we're going to do is reduce overhead, remake the state will lower the price.

erik: you mentioned lehman brothers. that was the last liquidity event.a minor one in october of last year. would it take less now to trigger a major liquidity event that it did in 2008? bill gross: it depends on what less means and what you apply it to. i think lehman was a function, to any considerable extent with interest rates that are too high, and, of course, with banks and other institutions with not enough capital. we have changed to a certain extent, but if they proceeded without caution in terms of raising interest rates and found that the real interest rate to find that it was too high much like we found in 2006 and 2007 then yes, that is what happens to these economies. there are butterflies. out there and sometimes there are interest rate butterflies, and sometimes there are other butterflies, like china, situations that one might not even imagine, but if you are levered -- erik: we are levered. bill gross: we are very leverage. the world is levered and we are under the assumption that we are dealing -- delevered, but the world as a whole has

so as i said the institution whose failure triggered this was lehman brothers. if you're going to say no institution should be big enough so that we would have to react if it failed then the biggest one you could have would be smaller than lehman and i've never seen anybody define that. i don't think the markets can take care of that. and there is an argument that people can be too complex. that's one that mr. dimon has to deal with. we had, for example, the question -- and here's the regulation where i believe he was wrong. we did empower the regulators and they acted to put regulations on the derivative trading of the foreign subsidiaries of american institutions. mr. dimon was very angry about that. but frankly, his takes against it weakened when the london wail not only lost billions and billions of dollars, but he didn't know for a while how much was at risk. so some effort to have some better information. >> chris whalen pointing to october 15th in recent trading events that these markets have become dangerously liquid. >> well i think the volcker rule and

which almost a crash of the markets come and this was all supposed, the mortgage crisis, aig and lehman brothers and the whole thing. so the president was there to be in a position to bring the country together. right before he was sworn in he asked then leader boehner and i toto a meeting with the other members of the leadership and he was president-elect. and i recall reading in the lbj room in the senate. he came over to us and said the president said, president-elect said i'm really curious about working with you. i wanted to work together to bring this country back so we can move forward. and he indicated that we should bring him our ideas about what should be and what was reported to be coming which was the stimulus the pixar after the swearing-in we all went to the white house and met in the roosevelt room. i was like as i was hopeful at the time i brought a white paper to show the president. he said bring your ideas and i did that. the president look at it and nation and said there's nothing unreasonable, nothing crazy in your i think he said. and we were very careful not to be crazy in

setback with almost crash of the market, and this was all post the mortgage crisis and iaig and lehman brothers and the whole thing. so the president was there to bring the country together. when -- right before he was sworn in, he asked then-leader boehner and i to a meeting with the other members of leadership, and he was president elect, and i recall meeting in the lbj room of the senate, and he came over to us and said -- the president said president-elect said, i'm serious about wanting to work with you itch want us to work together to bring this country so we can move forward. and he indicated that we should bring him our ideas about what should be and what was reported to be coming, which was the stimulus bill. after the swearing in, we all went to the white house met in the roosevelt room. i -- i guess i was so bold, i brought a white paper to show the president. he said bring your ideas, and i did that. and the president looked at and it initially said there's not unreasonable,ing in crazy in here, i think he said and we were very careful not to be crazy in this white paper. because i

2008 we did not chuck it out of the 500, even though by the rules he should have vanished with lehman brothers made the world out of the 500, it would have been the wrong kind of headlines and would you have called up and said -- >> no matter what you do, i'm going to complain, you knee. >> i know. i told you, i should send you a bill for the service. >> the weird thing is how closely the s&p and the dow have tracked over time. >> that's showing that obviously there's got to be a correlation between the stock price and market value of the company. no big surprise. splits ruin that but otherwise. but 30 stocks in the dow that has a market value, it's a pretty good chunk of the u.s. economy in the world. that explains why they track so well. >> overall, your agnostic about valuations in general. i guess it wouldn't be good for david blitzer to say, wow, we're a little rich here right? >> well i think we are a little rich. you know one thing i say that i've learned from being on the index and running it roughly 20 years, when you look at it i love index investing. it's not easy to pick the right

. >> was it okay to let lehman brothers fail?>> i think the answer is it was probably okay for one company here or there. it was never about one company. it was about the economy. one company sfifrg not surviving is bad for people that work for that company. but that's not what we were doing. at least not what i was doing. we thought there were too many interconnections that if one or more a couple of these banks failed they were so interconnected they would drag everyone else down. that was the problem. that was the only problem to me worth addressing. individuals companies failing. tragedy for a different reason but not something congress should be involve. >> bank of america was asked to take on merrill during that crisis. shareholders in return filed suits against him for not providing evidence of what merrill had on its books and bank of america has been paying since. >> like i said, i wish we had a little time to have a deeper breadth on some of the things that happened and how it happened. i have to look at it a broad brus

host: wasn't ok to let lehman brothers fail?: i think the answer is it is probably ok for a company here or there. it was never about one company. it was about the economy. one company surviving or not surviving, it is bad for the people working for that coming but that is not what we are doing. we thought there were too many interconnections that if one or more of these banks failed that they were so interconnected they would drag everybody else down. and that was the problem. individual companies failing is a tragedy for different reasons. host: bank of america was asked to take on merrill during that crisis. shareholders in return launched lawsuits against him for not running evidence of what merrill had imix books. and bank of america has been paying since. guest: like a said, i wish we would have had a little time to have deeper breath. again, i have to look at it as a broad thing. believe me, there were a lot of things that i didn't like. host: do you think ken lewis preventively for the meltdown by agreeing to take on mer

i will say, though chris christie -- that's like if lehman brothers had survived attacking the personhe inherited a mess. he's made a lot of really tough decisions and he's also taken some short cuts. >> over one term. it's his mess now. and also his pension reform is not unfolding the way it was supposed to. >> you say it's his mess. this is a generational problem. there has been one bad deal made with public unions after another bad deal. republicans have done it, democrats have done it. and now it's coming due on his watch. >> it's often the problem that the deal isn't bad, but that politicians won't put the money in that they promised in the deal for years and years and years. a then it goes back. >> i'm just point to going to a political problem. this is a delicate issue to run on in general. and to make those arguments when your state's economy is still not doing well, that's what that is about. >> i think it's about -- i totally disagree with you. the core of his message and his political identity is i'll tell you what you need to hear whether it's popular or not. the poll numb

worked at lehman brothers and traveled the country as a businessperson.levision star on fox news. [laughter] where i substituted for the low-key bill o'reilly. in life, the lord calls us for certain things. my dad and mom, simple blue-collar folks. their son became a member of the legislature, the united states congress, working with presidents, including the ronald reagan. i had a great career out of politics, but i felt the call. take the skills and go and apply them to your state. so, i ran for governor. i won and i beat another incumbent democrat and it was narrow. when i won i faced some of the hardest times the state ever had. we were $8 billion in the hole which was almost 20% of our general revenue fund. we lost 350,000 private sector jobs. we had $.89 in our rainy day fund. people said there was no way up and our credit was at risk. i won the election, i have no time for politics. i have not throughout my lifetime had a reason to play politics. we went to work at reinventing the government of the state of ohio. some people said you have to raise