legendary scam star clarify some of the points there going back to ninety nine and the long term capital management scandal that has fun collapsed and wall street came together that ballot out. multibillion dollar bail out one firm did not participate and there was a stigma attached to that firm was that bear stearns or lehman it was actually both bear lehman only kids every firm on the street was told by the president of the new york fed that they all had to kick in three hundred million dollars per to bail out long-term capital management what ultimately happened was that lehman only kicked in one hundred million and bear pretty much told the fed to take a hike to mccain basically saw bear stearns as really a vendor to long term capital he cleared all of long term capital trades and you know he didn't see why he needed to kick in money to save this firm and in fact of course he didn't you know and. it's really when when long term capital collapsed in ninety eight that was really want to turn too big to fail was coined and it certainly set off a huge moral hazard problem for wall street that we sa

new york fed that they all had to kick in three hundred million dollars per to bail out long-term capital management what ultimately happened was that lehman only kicked in one hundred million and bear pretty much told the fed to take a hike jimmy cayne basically saw bear stearns as really a vendor to long term capital they cleared all of long term capital trades and you know he didn't see why he needed to take in money to save this firm and in fact of course he didn't you know and that's really when when long term capital collapsed in ninety eight that was really when the term too big to fail was coined and it certainly set off a huge moral hazard problem for wall street we saw it rear its head again and overweight on a massive scale and so you know there are certainly a lot of parallels between what happened in two thousand and eight and what happened on a much smaller scale in one thousand nine hundred eight with long term capital management all right so let's talk about what's happening now in the criminal proceedings the lawsuits that have been launched against best turns j.p. morgan sensed a c

and eight and what happened on a much smaller scale in one thousand nine hundred with long term capital management all right so let's talk about what's happening now in the criminal proceedings and lawsuits that have been launched against bear stearns j.p. morgan since the collapse terry bull hooey. following the show she's been a guest on kaiser report eve worked on details that are leading to a lawsuit can you give us some details and updates on that i worked with after terri who's just been a huge fan of the film for since they want and done a lot of really great reporting on this subject surrounding bear stearns and these other banks after she wrote an initial article in the atlantic i was contacted by a law firm who is bringing an action on behalf of some of them on a line and sure the biggest thing that's just come out is the f h f a's lawsuit civil suit which was released this past friday which details actually individual defendants at bear stearns all of whom were running their mortgage operations and are now in very high paying jobs at other firms tom merino at ally bank jeffrey first lie

out of the bags long-term capital management was the bailout that you have these bailouts again and again and again because the only other option is to let the economy crash which would be extremely devastating now the way the bailouts are structured they're structured mainly for the benefit of the corporations and wealthy and certainly some benefits flowed out trickle down words in terms of that the credit system keeps pumping but we need much more of a human centered system rather than a part that's a very good point and that you go to richard on this point here what is the future of capitalism here because i think a lot of people would agree irrespective you ideological trajectories that it's reached to reach a certain you know critical mass you can't obviously we can't keep going on the way we are now what needs to fundamentally change where we because you said that there is no capitalism and if you're a proponent of that system what needs to be done to bring it back on line right i think as i said we have a government directed economy now to a very large extent through this parallels

international monetary fund so as to manage adjustments and exchange rates and to avoid currency competition and things that could break international archives. to make long-term capital available to states so countries could grow and buy from one another. and a project to reduce barriers to international trade, to foster open markets to reduce -- resist downward spiral is. the architects of the system created a model for their work. let's take a moment to recall that world. in that world developed economy sherpa gdp was about 80%, with the united states alone accounting for 40%. in that world developed economies accounted for two- thirds of global trade. in that world most of today's developing countries were still colonies -- qualities. the system has remained broadly intact. for all its weaknesses and critics and catch over some of the system provided the enabling environment for the greatest era of growth and the largest, most successful economic transformation of the shortest amount of time in world history. the system itself is not been stoned. the key insight that they let this was the need for wisdom to recognize when something new is going on, and for the wil

carried interest and under current law hedge fund phaerpbgs can treat that -- managers can treat that income as a long-term capital gain taxed at a maximum rate of 15% and not at the higher ordinary income rates. what is the blended rate loophole? since 1981, those who trade in some financial products such as futures, contracts and options have enjoyed a specially created tax loophole that allows them to pay a lower rate than, for example, traders who buy and sell stock. no matter how long a speculator holds on to a futures or options contract, again, even if it's a few seconds, their gains and losses are taxed at a lower so-called blended rate. that is part at the capital gains rate, part as ordinary income. so a dealer who buys a stock and sells it within a year must pay taxes at the ordinary income rate while that same dealer who buys an option and sells it 30 seconds later gets to pay the lower capital gains rate on most of that income. these special tax breaks impose an unfair burden on american taxpayers and they contribute significantly to the budget deficit. based on estimates from the joint committee on t

term imbalances and manage adjustments and exchange rates and avoid capital outflows that could break economies and societies. a project for the international bank for reconstruction and development. today's world bank to make longavailable to states so countries can grow and buy from one another and project to reduce barriers to international trade, foster open markets and resist downward spirals. the architects of the bretton woods system create d a model for their world. let's recall. in that world, developed economies share of g.d.p. was about 8 % with the united states alone accounting for 40%. in that world, developed economies accounted for 2/3 of global trade. in that world, most of today's developing countries were still colonies. for almost 70 years now, the multi lateral architecture of 1944 has persisted and has grown with currency and oil shocks in the 1970's, debt did he back wills in the 1980's and expansions and crashes in the 1990's, bru the system has remained intact. for all its weaknesses, the system provided the enabling environment for the greatest era of growth and the largest, most successful economic transformation over the shortest period of time in world history. but the bretton woods