at the fed and treasury that ken lewis' management team failed to do due diligence in acquiring merrill lynchty violated securities laws by withholding material information from his shareholders to get the vote for the merger with merrill? >> i have become aware from some of the e-mails that this committee has released and other documents. >> do you know that at that time? >> -- that there were concerns and i know that there were some concerns -- >> at that time, did you know, mr. secretary? >> my staff members some concerns at that time as to whether how, you know, along the lines of what you expressed on due diligence. i had not heard concerns at that time about securities laws. >> now, chairman bernanke testified here that he shared those concerns about bank of america's management. did you share the concerns with anyone? >> in terms of concerns about bank of america's management? here is what i would say about management. that -- and congressman, i have been involved and was involved in at least three situations when i was a treasury where ceos were replaced. fannie, freddie, aig. >> well

significant losses at merrill lynch were giving lewis second thoughts. but paulson says pulling out would have been a bad call. >> it would have shown a lack of judgement, and i think it would have really undermined the viability of b. of a. and merrill lynch and the financial system. >> reporter: last month, fed chairman ben bernanke told the committee the government did nothing inappropriate to intimidate bank of america executives. today, paulson went further saying he was never told by the fed to threaten lewis. congressman dan burton wasn't convinced. >> if you came away from those phone calls, somebody must have said, "hey! we can't let them do this!" and i would suggest that it might have been mr. bernake. >> what i would say to you. i do not know whether someone in the conversations or calls expressly said it, or if my understanding came from just the tone and the forcefulness. >> you know, you're a very smart man, and i don't think anybody's buying what you're saying right now. >> reporter: other lawmakers lashed out at paulson for his lack of t

stability of our entire financial system and the viability of both bank of america and merrill lynch," paulson's testimony states: "an attempt by bank of america to break its contract to acquire merrill lynch would have threatened the stability of our entire financial system and the viability of both bank of america and merrill lynch," paulson's appearance in front of congress is part of a larger investigation into the government's role but political experts say it's nothing more than a show and the investigation is not likely to result in any legislation or charges against anyone.. paulson will recognize what bernanke said .. nothing here folks.. follows same line.. investigation leads no where.. no reason to open up and say here's smoking gun at this point.. it won't happen wayne steger.. political science professor at depaul university... says these hearings with paulson.. and federal reserve chairman ben bernanke last month - are meant to be a signal to high ranking government officials... not to be aggressive when dealing with private companies. "one the economic side - it's a s

he never had to disclose $12 billion in merrill lynch to investors until it was over.e never had to as the shareholders to reconsider the transaction. in the end, mr. lewis got everything he wanted. mr. paulson and mr. bernanke also got what they wanted out of this marriage. they got an uninterrupted murder that they believe helped -- merger is that they believe help stabilize the market. while all of this was going on, the american people were kept in the dark. there was no oversight to determine whether this arrangement made sense. this is unacceptable and must be prevented from happening in the future. that is being said, significant issues need to be resolved today. was bank of america really forced to go through with the deal or was this just an old fashioned brooklyn shake down? -- did ken lewis ran to back out of the deal in order to squeeze more money out of the garment? did mr. paulson believe that can lewis had demonstrated a colossal lack of judgment? why did he and mr. bernanke leaves louis in charge of bank of america? did officials tell ken lewis to keep

more "cnbc reports" coming right up. >>> merrill lynch agrees with dennis, i quote, the recession is over. that's the title of an important merrill newsletter released today.y. coming up, more bright spots coast-to-coast as we go "across america." >>> also tonight, sarah palin's big pushback against cap and trade. is this her ticket to get on the side of big business? we're back in two minutes. come on in. you're invited to the chevy open house. where getting a new vehicle is easy. because the price on the tag is the price you pay on remaining '08 and '09 models. you'll find low, straightforward pricing. it's simple. now get an '09 silverado xfe with an epa estimated 21 mpg highway for under 28 thousand after all offers. go to chevy.com/openhouse for more details. but with aleve, i don't have to worry about my knees hurting. only two aleve can stop pain all day. that would take three times as many tylenol arthritis pain. aleve works for me. >>> you know, i had a happy day today. i finally found official report for my call the recession is over then my day was soured by what speaker of

they paid $50 billion for merrill lynch.espects, i feel like the taxpayers of merrill lynch for bank of america. >> i would say this to you -- the taxpayer has benefited in two ways. first of all, i would be very optimistic the taxpayer would get all that money back with a profit. second, what the taxpayer got was an averted calamity. if we had the financial system collapse, the taxpayer would be the people who are hurt. >> this press release went out from your office as secretary of the treasury on january 16. this press release talks about the package to bank of america and specifically says that treasury and the fdic will provide protection against the possibility of unusually large losses on asset pool of approximately $118 billion of loans. this was a done deal on january 16. >> -- >> when your secretary. >> we worked out the details and put out a term sheet. but the deal was not closed-end. >> how could you possibly say this publicly if it was not closed? were you giving bank of america something they did not have to a

get, you would not win the mac, finally, that you might end up not getting merrill lynch in any sense even after paying the fines, we felt because of all those factors that it was in our best interest as bank of america shareholder's best interest to go through with the merger. .. to us today, fed officials concluded that you must have known about the accelerating losses at merrill much earlier, as early as mid-november when your shareholders could have voted to disapprove the merger. now, an email from a senior advisor sent to assistant to chairman bernanke on december 13th, 2008, and it's up there on the board for everyone to see, writes of clear signs in the data we have that the deterioration at merrill lynch has been observably underway over the entire quarter, albeit, picking up significantly around mid-november. ken lewis claimed they were surprised by the rapid growth of the losses, it seemed somewhat suspect, unquote. another memo, restricted federal reserve analysis of bank of america and merrill lynch merger dated december 21st, 2008. bac management contention that the seve

he notified them after the vote, about the condition of merrill lynch? i mean, come on. you're talking about -- is that the way you protect shareholders? after it's over, you say here's the situation. no. he had an obligation to notify them before the vote. if we're talking about a crisis of confidence, we have to have the ability to tell shareholders that things are legit. they weren't legit for the shareholders of bank of america. >> with respect, sir, i think the shareholders were very much aware of these negotiations and trading on the fact that the asset losses were bigger and there is no proof -- you have no proof -- >> you are making this up. you're making it up. >> i am not making this up. there is no proof in lewis'sç testimony, bernanke's testimony -- >> okay. hang on, guys. hang on. hang on. i've got to go back here, because i'm still confused, and it's what larry said earlier. congressman kucinich, i'm still confused as to what your problem here is, you're upset because paulson didn't fire lewis for not letting his shareholders know that there was an issue?

lehman brothers, bear stearns, merrill lynch, they're all gone. there are fewer people at the table and each of them gets a bigger slice of the pie. we have also seen a modest recovery of demand for investors from financial instruments so these companies sell the instruments that they have at higher prices. and one thing that's happened that is kind of interesting is that banks park down what they held. they reduced the value of their assets. in the belief that this recession was going to get really, really bad. >> it turned out that it is just really bad and as a result they have been able to claim some crine in the value of these holdings. >> how does all of this affect the ongoing concern about credit itself. is it really, is this a sign that credit is in fact loosening up a bit? >> not yet it could be the first sort of dawning of that. but at the moment, no, credit remains extremely tight. very hard to get a loan. there is a lot of reason for that. none of that seem to be improving. if you are a business or customer in the marketplace looking

merrill lynch, all the big ones. the first thing republicans did was bail them out.are criticizing an obama for bailing out people who do the work and i think it is -- you always come with this -- guest: i have not mentioned obama. i was against the bailout when mr. bush did it. if you remember, in the weeks leading up to the october 3 of wrote that the condo -- -- october 3 vote that congress made, i voted against it, i thought it was a crazy idea. the premise of that debate was that the treasury secretary was going to take $700 billion and by toxic assets. they have yet to buy any of those. i want to ask mr. paulson, based on the deception playing out in the merrill lynch-bank of america acquisition, i want to ask him, when is it that he changed strategy? on october 3, the majority of congress assumed he was going to do what he told others he would do, purchase troubled assets. but 10 days later, when the big banks were brought to washington, he said that we are just going to inject capital, we will to get cash. sign up for and take the money, whether you like it o

the group includes merrill lynch, citigroup, goldman sachs and j-p morgan. meantime, the top guy at bank of america says his industry deserves some...but not all of the blame for the meltdown. an economic bubble like the one we just experienced could not happen without some participation by many of the nation's banks. but, i believe the criticism has been overdone. in fact, much of the excess credit that drove the bubble did not originate with commercial banks. instead, lewis says it came from shadow banks such as investment banks, hedge funds and others. bank of america did buy one of those "shadow bankers"...merrill lynch late last year. southwest airlines looks to expand its operation by outbidding a rival company to buy bankrupt frontier airlines. southwest says it would pay almost 114 million for frontier airlines - hoping to open the door for further discussions on a deal. it's the latest development in an industry that is hanging on by a thread as this recession drags on shares of many weaker airline companies - like us airways, united.. and american

, the forr treasury seetary was grilled on his rolen bank of america's contversial purchase of merrill lynch. facing harsh ausations from lawmakers, plson defended his decisions d actions in the deal. in theast month, fed chairman ben bernanke andank of america o ken lewis also faced tough quesoning from this committee. but as dana ba reports lawmakerare still looking for answers. >> reporter: formetreasury secretary henry pason may be out ofhe office, but he's still der the gun. lawmakers ammed the treasury's handling of thbank of america deal-- saying pauln bullied executives into completing t purchase of merrl lynch. but paulson ve little ground as he defended the pressurhe put on bank of ameca c.e.o. ken lewis. >> i was attemptinto send a very strong message ken lewis terms of how strongly the f antreasury viewed this matter. >> reporter: ty viewed it strongly becse they worried a ncelled deal would throw the markets to turmoil. significant losses amerrill lynch were giving lewis send thoughts but ulson says pulling out would have been a bad call. >> it wod have shown a lack of judgemen

came about. >> let me walk you through the decision to purchase merrill lynch. we made that decision in september 2008. we did so because we saw the potential benefits i just described and without any promise or expectation of government support. in mid december i with the fis that merrill lynch had significantly raise its forecast of its losses and we contacted officials with treasury and federal reserve to inform them we had concerns about closing transaction. at that time we were considering declaring material adverse change which as a matter of contract law can compel consummation of the deal. treasury and federal reserve representative -- such action, significant concerns about systemic consequences and the risk to bank of america in pursuing this course. weeks for government support, limiting the risk of proceeding with the transaction. we both were aware of the global financial system was in fragile condition with the collapse of merrill lynch hastening the crisis. bank of america concluded there were serious risks including material adverse change and pr

secretary hank paulson getting grilled on the hill about whether he strong armed ken lewis into buying merrill lynch. paulson says, yep, it was me, trying to send a strong message to lewis, but didn't encourage him to withhold information about merrill's problems. they are in recess right now. we're going to head back as soon as they start. and joining us for the rest of the show will be steve liesman, as well. >> that's right. and we are going to talk with steve more about jpmorgan. it did have a blow quarter. tomorrow we will hear from its rivals and bank of america in the spotlight today. and then there is citigroup. we will find out if you should be banking on the banks with your money ahead of those reports. . >>> the market right now, however, has been really keeping its eye on what's been going on on capitol hill, and contrast that with the earnings reports, and it's really been a tug of war on the dow jones industrial average which is up about 9 points right now. resill yept, michelle, really in the face of the fact that we have cit not getting any government assistance. >> right. >> for the

lawmakers want to know more details about paulson's role in pushing bank of america to buy merrill lynch - just as huge losses were coming to light that could have derailed the deal... because b of a's ceo wanted to back out. in june, federal reserve chairman ben bernanke testified in front of congress - he denied ever threatening to replace bank of america's management - if they did not go forward with deal to buy merill lynch. bank of america has received 45 billion in goverment aid plus guarantees on more than 100 billion in assets. confirmation hearings for supreme court nominee sonia sotomayor... are set to begin on monday. the senate judiciary committee will call dozens of witnesses to speak to sotomayor's personal character.. as well as her experience with the law. the list of witnesses include new york mayor michael bloomberg, former fbi director louis freeh, and various attorneys and community associations. ahead of this week's confirmation hearings, opinion polls indicate americans are divided on her nomination. and while she has the support of democrats on capital hill.... rep

henry paulson as saying, we did not have the tarp money to bail out merrill lynch they went under. he was the shotgun behind the marriage. martha: hank paulson was picking and choosing who he wanted to save. some deals got 100 cents on the dollar. it is a fascinating tale. everyone should go to the fox business network website and read about it. what is unraveling on capitol hill is interesting. thank you for bringing it to us attention. trace: we are on to the next phase of the confirmation hearings for sonia sotomayor. questions are just wrapping up. more witnesses testify, including the white firefighter in that reverse discrimination case. judge sotomayor ruled against him. shannon, republicans seem to be conceding that her record as a judge is pretty mainstream. that is not the end of the story, right? >> you are absolutely right. a number of her critics are saying yes, from the bench, her record as mainstream. there were a handful of cases they have issues with. they say there's a cognizant -- there is a cognitive dissidence from what they saw on the bench and her writings, r

dow jones was the first one, citicorp has it, aig has, morgan stanley, webber, merrill lynch, bank of america, all of them have sharia compliant funds. and this means if you are a muslim wanting to make an investment you could put your money in that fund and be confident that none of it will go to activities permitted by sharia law which makes sense. the problem is these financial listed missions have put in place sharia compliance boards which are staffed by the most reactionary right-wing islamofacists in the world. we site in the book five or six of them who have had to be removed from the boards because they are on the fbi tear watch list. and these folks are going to make the decision where the sharia comply and funding goes. and currently there is $800 billion globally under management by shirley incompliant funds. and if they get together with this offer will funds of countries like qatar and kuwait and to buy you could get that up to three or $4 trillion not only do these enormous decide where the money is invested, they also allocate the 2.5% of your portfolio that has to go

let me ask this question, say b of a had collapsed, say merrill lynch collapsed, i say so what? so what? what would have happened -- >> so irresponsible, greg knapp, we saw what happened when lehman collapse, i don't think i wanted to see any other big banks collapse. >> i don't want to see any fail. congress should be blamed and paulson should be blamed because he already changed his idea what to do with the t.a.r.p. money before the ink was dry on the bill.. he admits that. bought the toxic assets, threatens ken lewis to be fired if he doesn't do the merrill lynch deal. i don't believe he didn't tell him to say anything about lynch's bottom line. this guy says he never ever used e-mail. anybody buy that? this entire panel, it feels like is it right for the congresswoman to say, is it right you worked for richard nixon in '72? >> she's wrong to talk about nixon. let me ask you this, i still haven't heard -- >> wait, wait -- >> i want somebody to tell me, why would it have been bad for merrill, b of a or citi, wouldn't new institutions have been formed the next day. >> hindsight

he says he strongarmed bank of america into a marriage with merrill lynch. were his actions justified or do his threats border on criminal? steve: a calculate add tack that took less than four minutes and ended with a couple of executions. what kind of person would commit such a cold-blooded crime? up next we talk to a man who has studied 600 murders. he says they all have one thing in common. clayton: welcome back to "fox & friends." eight us is sprects in police custody after the brutal florida double murder that was carried out with military style precision. what we can learn about the suspects based on the facts of this crime is interesting. i'm joined by dr. michael stone, forensic psychiatrist and author of "the anat any of evil eye -- anatomy of evil." fascinating book. good morning. >> good morning. clayton: we looked at this group, an eight-suspect arrest. this group spent at least 30 days planning this thing, meticulously. what does this say about this sick group of individuals. you look at the gradations of evil in this book. where do they fall on

and bank of america, merrill lynch raised stock on its grading system and benefitting from that. it really is, it's commodities and it's the intel affect really driving europe right now. erin, back to you. >> thank you very much, guy johnson. >>> quarterly results from intel, big factor. joe and becky? what's the right word? i mean, is it manning? womaning? >> i know. i can say -- personing. >> recovering. >> yeah. earnings central. >> we are. we had a guy on earlier, erin, fred dixon, talking a genius, like fundamental stock guy. talking about the haines bottom. >> think mark's going to be proven right. >> the mark haines -- this is actually, you talked about it so much, it's become part of the jargon. >> a lexicon. >> a lexicon. >> yeah. >> unbelievable. >> he's a guy we booked, because he's like, our passport. our market expert and comes on talking about the haines bottom. you've been part of the story.y. we're not supposed to do that and i would never do that, mark, being wa pure journalist. anyway, you're right. intel is the talk of the town today. shares soaring, as the chi

you have merrill lynch there now. you have countrywide.but bank of america is i believe the biggest bank in terms of deposits clearly and market cap. and that's why they're really worried about what's going on down in charlotte and whether ken lewis has got his hands around the situation. kind of interesting today. you've heard hank paulson, right? he'd be grilled by that house committee over the b of a merrill lynch deal. right? was there proper disclosures? did he twist lewis's arm in doing the deal? now, here's the kind of interesting part of this, which is not being spoken about, is how lewis went about and bought merrill lynch. he did it with 36 hours, i believe, of due diligence, and he missed stuff in the due diligence. at least his guys missed stuff in the due diligence that they should have found. >> they had to do it in a really quick time frame, right, charlie? >> but still, you have a book of business. you know what type of assets they are. and it doesn't take a rocket scientist to figure out okay, tomorrow lehman brothers is g

some of the asserted undue pressure alleged by the fed, vis-a-vis the banking industry and the merrill lynch and the bank of america situation, and i'm sure you're familiar with the investigation that was going on in the house, and we're just suggesting to the white house that before we take this opaque entity, the federal reserve, and give them even more authority, shouldn't we just take a brief moment, and shouldn't the administration be interested just to get to the bottom of that inquiry and lay all that out before the public as well? and then we can go on and have a forward debate on the other issues as well. >> you called the fed an opaque agency. during his testimony did the chairman clear up? >> not really, i appreciate him laying out his opinions on this issue and others as well specifically to the matters at hand as far as the administration's proposal of giving them a broader and greater authority than they have ever had before, the whole area of the idea of systemic risk and systemic-risk regulators and throwing that on to the fed as well, additional authorities in that respect.

. >> he isn't the only one saying it now, merrill lynch is joining the dennis chorus. while markets are our focus, we're also talking about the business of porn tonight. larry the legend flint is here exclusive as cnbc gets ready to debut a brand-new documentary, porn, the business of pleasure. bill gates changed the world, now, he wants to change the weather. we have a big show tonight. it all starts right now. this is "cnbc reports" on wednesday, july the 15th. >> good evening, i'm dennis kneale, nice rally today, can i get a hallelujah? i have been telling you for three weeks now, this recession is over. the balance of fear,ien and yang of the market is beginning to level off. that follows a painful year, in which fear, like a fat ban in a bathtub overwhelmed all else. now, a new fear may emerge, the fear of getting left out. let's look at it in the real deal with dennis kneale. the dow is now up 6% in three days. that is extraordinary. tech led this nice 3% lift in stocks today, about time. nasdaq rising 115 points in six days, the best six day run since last octob

tomorrow he will testi on capitol hill about bank america's contversial quisition of merrill lynch. paulson releas today his prepared remarks, sayi bank of america had no legal bis to x the merrill deal and doing so would have shown a quot "colossal lack of judgment." paulson alsoays it was appropriate for him to wn b.o.a's c.e. ken lewis that e bank's management could be ousted, it rejected the merrill purchase. >> jeff: investors viewed day as a colossal buying opportunity, after intel better-than-expected rests last night. the dow opened nearly 10points higher at the bell. inl shares leapt 8%, giving thdow a 180 point gain by noontime. adding to the bullishns, credit card isers like american eress say they're now seeing fewer defaults and delinquencies. that helped the finaials and added more fuel to tay's rocket re higher. the dow rose 256.72 pointso close at 8,616.21. e nasdaq added 63 points to 1,862.90 the s&p 500 gained6.84 points 932.68. in the bond rket, the 10 year note fell 1-4/32o 96 putting the yield at 3.61%. >> susie: shes of the old general moto lost half their lue t

most recently, b of a bought merrill lynch and countrywide, expanding its presence in mortgage and investmentanagement. while it says it's branch network may shrink, there are no specific immediate plans for closing branches. b of a stock is down more than five percent this year. online items after the show... check us out online to see why target funds keep missing the mark and why people continue puting their money in these retirement investments, despite the poor performance. plus, a look at the complex relationship between the u.s. and china...why money is a big part of it.. and, a technology company and a luxury hotel join forces to help boost business...you can find these stories and more on our website, firstbusinessx.com. and straight ahead on the show... as the debate over healthcare reform continues on capitol hill....businesses have yet to warm up to the plan...more on that after the break. congress may blow president obama's deadline to deal with healthcare by the end of this week, setting up a month of lobbying and debate over changing health insurance, how people buy it and for

tomorrow he will tesfy on capitol hill about banof america's coroversial acquisition of merrill lynch paulson releed today his prepared remarks, sang bank of america had no legalasis to nix the merrill deal and doi so would have shown a que, "colossal lack of judgment paulson al says it was appropriate for him toarn b.o.a's c.o. ken lewis that the bank's management could ousted, if irejected the merrill purchase. jeff: investors viewed toda as a colossal buying opportunity, after intel's better-than-expected results last night. the dow opened nearly 100 pots hier at the bell. intel ares leapt 8%, giving the doa 180 point gain by noontime. adding to the bullishness, credit card issuerlike american expre say they're now eing fewer defaults and denquencies. that helped the financia and added more fuel to today rocket ride gher. e dow rose 256.72 points to close at 8,616.21. the sdaq added 63 points to 1,862.90. the s&p 500 gained 26.84oints to 9328. in the bond marketthe 10 year note fell 1-4/32 to 96utting the yield at 3.61%. >> susie: shares othe old general motors loshalf their value

to go through with plans to buy merrill lynch.he paulson told the house oversight government reform committee that he did not tell kenneth lewis to hide losses from his shareholders. >> the statement has been made that i discouraged mr. lewis from making required disclosures to the public markets about losses at merrill lynch. that simply did not happen, an mr. lewis has denied it unambiguously in testimony before this committee. bret: losses tied to that acquisition resulted in a $20 billion government bailout. the number of people applying for unemployment benefits and continuing to get them both went down last week. the labor department says new applications dropped by 47,000 to 522,000, the fewest since earl hadly january r the number of people still getting help fell by 642,000, to 6.27 million. that's the lowest figure since mid april. stocks were up again today. the dow finished ahead 95 and the s&p 500 gained just over 8, and the nasdaq rose 22 and change. president obama ran on a campaign of change, but today he was hopin

look at the recovery with merrill lynch, turns out it was pretty good deal now, wasn't it? shareholders are still alive. neither of those companies is either a ward of the state or in the trash can of history. think of that. bravo, mr. paulson, here's your award, one more time, i've interviewed him many times, look forward to seeing him again a great honor and pleasure. >>> coming up on "the kudlow report," profits, profits, profits, the backbone of this stock market rally and stocks are up for the fourth day almost 100 points. and trying to talk sense into the ultimate bear, gary schilling. >>> and is obama-care a sick joke? 57% tax in new york, wall street may stop showing up for work in new york. this bill is so bad i believe it will never pass and that makes me bullish. access to favorite courses chef's meal with pommes frites perhaps a night at the theater with extra special seats additional hotel night, our treat you world in perfect harmony: priceless look for world on your mastercard to get rewards and offers that matter to you. when she started forgetting things, i

there is a probe to figure out whether the fed abused its power during the takeover of merrill lynch.cott garrett from new jersey was one of those lawmakers, he joins me now. welcome to the program. >> i like that tony soprano reference. stuart: well, you are from new jersey, and so am i. but i've got a sustain petition that you don't like ben bernanke and you don't want the fed to be the ultra regulator, as is the proposal. so you're coming up with an investigation to see exactly what ben bernanke did with b of a and merrill lynch and maybe stop the fed from being the uba regulator, as is the proposal. am i going too far? >> well, i like some of your points. do i like or not like ben bernanke? i like the man. i respect the tough position that he's in. as a matter of fact, just moments ago he was here speaking to a small group of us here on a whole bunch of these issues. but you're absolutely right on the aspect of i have real concerns about throwing a whool new slew of areas of authority and responsibilities to the very same federal reserve, whether ben's in charge of it or somebody

sec ult on it. . >> how was the determination made with institutions like bear stearns, aig and merrill lynchould be saved either through direct assistance or acquisition while lehman brothers would be allowed to fail. i'm not quite clear and i know you addressed it. >> i did i and will say to you we will not have the legal powers we believe to do something in the lehman brothers case. we did not have the t.a.r.p. to put capital in and we did not have a buyer as we did in the case of bear stearns. so we were faced with sort of an unfortunate set of circumstances. >> i will conclude, i see the red light. i want to say if we have missed the oversight responsibilities, i need to know what you consider in writing and we will put that in our letter to you. what you consider government could do more of. i do know that we did not -- this committee under the former administration did not do the kind of oversight. maybe we were asleep at the wheel or looked the other way, but i would like to hear from you what government could do so we don't get in this situation again. i think really it's worse than

. >> they ended mixed overnight despite merrill lynch raising its growth forecast for china's economy. hong kong's index jumped nearly 2%. the bulls are hoping to break out for higher ground on wall street today. mixed economic signs kept the gains in check yesterday. the dow jones industrial average starts the day up 15 points. the tech-heavy nasdaq added two. new consumer confidence numbers are due out this morning. they are expected to show continued weakness as consumers remain on edge about their jobs which mean they'll be less likely to spend. consumer spending makes up 70% of the economy and is key to any sustained recovery. >>> now to the health of the housing market there's new reason to hope the end of the slump may be in sight. the government reports the sales of new homes jumped 11% last month. that's three times as much as analysts were expected bchl u the new housing market is still facing its worst year on record and home builders continue to struggle because prices keep falling. the median price of a new home in june fell to $206,000, down 12% from a year ago. >>> sagg

paulson will testify about his actions in the bank of america takeover of merrill lynch. in prepared testimony, paulson said he was justified in suggesting bank of america's chief executive could lose his job on plans to back out to buy merrill. >>> on the west coast, investigators are looking for the cause of a fatal plane crash just short of the airport in hawthorne, california. it could have been much worse. the crash spewed aviation fuel over a wide area, and narrowly missed several buildings. >>> and a jumble of flight recording tape may hold clues to iran's deadliest air crash in a decade. it was found in a crater in debris and human remains after yesterday's crash. 168 people were aboard the caspian airlines flight that had just taken off from tehran, headed for armenia. >>> shuttle "endeavour" is finally on its way to the international space station. after five, scrubbed launches, "endeavour" lifted off on a 16-day mission. nasa is keeping a close eye on parts of the shuttle that was hit by several pieces of foam insulation during the launch. >>> and 40 years ago t

, a controversial deal, but merrill lynch is doing very well for bank of america, and surprisingly so, so is the country wide operation, which is doing all of the re-fis. >> exactly right. and those are two assets that have been sort of a mill storm around their next. but when the economy stabilizes and those particular assets start to contribute in a meaningful and sustainable way, bank of america stock is going to rise, and rise strongly, i think. so that's one we like. and i would put jpmorgan, chase in second place among those two. but i like it as well. >> all right. so mr. robert crandall, first of all, you honor us by coming back. we always love to hear your views. we have karlgaard who likes banks, joy does not like banks, and from what i gather, you don't like anything. >> oh, i don't like much of it. i tell you the truth, larry, the reality in my view is, we've got to get rid of the unemployment problem. we've got to solve that problem, we solve the unemployment problem, then we're going to solve gradually the consumer spending problem. then maybe we've got a base from wh

an analyst from merrill lynch telling clients the recession is over. do you see it. >> not quite. it's nice to hear someone thinks that. i think we're still in for a very chlo 2009. i see the real growth in 2010 and even then, there's no guarantee it's going to be a really robust recovery. >> where is the recovery going to take hold though? yesterday we had christina romer on from the white house who talked about where the jobs will be. i asked her straight out, how do you measure how many jobs have been been saved or created so far. sley said it's not measurable. where will the jobs be? >> what we know is households are going to need to rebuild their wealth. the dominant feature of this particular down touch. i'm not looking for things coming out of household spending, those kind of things.. i'm looking for recovery that's sustainable in business spending in and in net expores, good places to see the economy firm up. >> business spending and exports, you hit on two very important elements too an economic recovery. are you optimistic that you're going

citigroup and merrill lynch received a combined $55 billion in bailout money. they lost almost as much but still handed out $9 billion in bonuses. so the economy now will get our first read today on what it was doing in the second quarter of the year. the recession most likely loosened its tight grip in the spring. many economists predict the economy shrank at a 1.5% pace since june. president obama says the country has, as he put it, stepped away from the precipice. >> we have seen a significant slowing down of the contraction over the last several months. there are a lot of indicators out there that tell us that, you know, job losses, although still way too high, are not at the pace we were seeing in january and february. >> and there was another sign of that yesterday while another 584,000 americans signed up for unemployment benefits last week, the line is getting shorter. the number collecting has fallen to the lowest level since mid-april. >>> and jcpenney makes its big apple debut today. penneys is moving into manhattan at a time when big retailers like

citicorp has it, aeg has it, morgan stanley, painewebber, all of them, merrill lynch, bank of america have sharia compliant funds, and this means that if you're a muslim wanting to make an investment you can put your money in that fund and be confident that none of it will go to activities prohibited by sharia law, which makes some sense. the problem is that these financial institutions have put in place sharia compliance boards which are staffed by the most reactionary, right wing, islam mow fascists the world. we have cited five or six that had to be removed from the boards because they're on the fbi's terror watch list, and these folks are going to make the decision on where the sharia compliant funding goes, and currently there's $800 billion globally under management by sharia compliant funds, and if they get together with the sovereign wealth funds of countries like qatar and kuwait and dubai, you can get that up to $3 trillion and $4 trillion, and not only do the eye mams decide where the money is invested, they allocate the part of your portfolio goes to charities and they dec

when i was at merrill lynch. so everything is close here. i think there was a whole question about -- as cit goes away who will lend the small and mid-sized companies and have the companies and my argument in the article was why should the guys make trading profits and let's put the t.a.r.p. money to good economicius? >> they did do that. they did say we're not going to bail out cit and let the market bail them out if they choose or not. >> absolutely. the government did get money to cit originally and that was my point. the private sector is doing the right thing. i'm not arguing anything else, but i think the big thing that has not gone on in washington has said that everybody is too big to fail. they're scared of systemic risk and that's what we hear. that's a political answer and i don't think that's an economic answer. >> real supply and real capacity out of the auto business, for example. >> the auto business, they have. it will be interesting to see what happens with the feeder companies that go into the a

citind merrill lynch combined got $55 billion in tp money and lost27-billion last year. but thfirms' still paid $8 billion in bonuses. cuomo ys there's no rhyme or reason to how wall streepays employees. a house investigive panel agrees it will look at payos by tarp banks after it sees cuomo' report. meanwhile you and une sam became citroup's largest sheholder today. citi finisheconverting the government'stake in the firm to common equityiving tax payers a 34% piece othe banking gian the move is aimed atoosting ti's common equity, jeff, a measure seen as keto withstanding fther losses. >>eff: suzanne, the company says with the exchan complete, citi inow among the best capitalized banks in the wor. now let's take a look our stocks in thnews tonight. and those are the stoc in the news tonht, suzanne. >> suzanne: thks, jeff. medicare'selebrates its 44th birthday today. 1965 president lyndon johns signed medicare to law proving low-cost hospitalization anmedical insurance for the nation's seniors. now the ogram covers 44 llion people with a yearly dget of nearly half a trill

[laughter] merrill lynch, that was incredible what he did to the bank of america. and i think that there is a serious concern now about the fed overreaching but the thing am more concerned about than that are two things -- first of the inflation that we talked about with the fed has just gone crazy in terms of printing money. such so that might not even just the inflation, might not be 18 percent inflation, it might be a whole loss of faith in the currency. by peter version to the barter system. in my literally destroy the global economy because all the nations of the for overdoing it at once. it's not like the tequila crisis and you just away from the peso's. everybody is doing this at once and that could be very serious. the second thing that emily concern about, there's a chapter in a book that is a declaration of independence has been repealed. obama went to the g27 which is now a g-7 plus 13 other countries that are helping determine our global economy, really responsible countries like argentina. [laughter] in those countries have created a global system of f

, you will buy it, you will rescue merrill lynch, regardless of how many billions of dollars they own, because if it goes down like lehman brothers, the whole house of cards may collapse. so anyway, that's the backdrop that we're dealing with now and that problem has not been solved. the obama administration is throwing billions, trillions of dollars at it, but unfortunately, the first rescue package was a payoff to democratic constituencies, and some of the money that has been spent has been nothing short of ludicrous, absolutely ludicrous, so they're loading the united states taxpayer with these huge debt burden, and if they continue the amount of debt, taxes going to have to be spent by the american taxpayer, up to about 60%, it's really horrible to contemplate how deep in the hole we're going and how much money is being spent. now being, they can say we're going to take on held care, in addition to that, it will be between a trillion and a trillion and a half dollars to assume health care and that means the united states government is going to crowd out the private insurance c

citi and merrill lynch combined got $55 billion in tarp money and lost $27-billion last year. but the firms' still paid $8 billion in bonuses. cuomo says there's no rhyme or reason to how wall street pays employees. a house investigative panel agrees. it will look at payouts by tarp banks after it sees cuomo's report. meanwhile you and uncle sam became citigroup's largest shareholder today. citi finished converting the government's stake in the firm to common equity giving tax payers a 34% piece of the banking giant. the move is aimed at boosting citi's common equity, jeff, a measure seen as key to withstanding further losses. >> jeff: suzanne, the company says with the exchange complete, citi is now among the best capitalized banks in the world. now let's take a look at our stocks in the news tonight. and those are the stocks in the news tonight, suzanne. >> suzanne: thanks, jeff. medicare's celebrates its 44th birthday today. in 1965 president lyndon johnson signed medicare into law providing low-cost hospitalization and medical insurance for the nation's seniors. now the pr

they want president obama to investigate the fed in its role in merrill lynch.>>> welcome back. i'm bill griffith. we will have more on that. general motors out of bankruptcy at an incredible short period of time and a first on cnbc interview with fritz henderson n about 20 minutes. >> it's the showdown between ubs and uncle sam. the government wants names of thousands of american client who is may have evaded taxes using offshore accounts. are tax havens good for the economy? >> we are joined by our power player in the financial times and the chief economist is still with us as well. we want to spend time with you to tack about the economy and other developments, but there other stories we are tlg, including secretary quite mer who may be making his case about regulating over the counter derivatives and joining us, he took i'm time out on capitol hill. the republican from texas is joining us and we hope that the democrat from massachusetts will be able to do that as well. congressman, we appreciate the time. >> thanks for having me. >> let me ask you about a le

merrill lynch telling its clients the recession is over. is it? >> it is and it isn't. it's sort of a good news/bad news situation. remember, last fall we found ourselves on the verge of the financial apocalypse or so they say. that means a complete freezing of all the banking system, mass layoffs, no paychecks, runs on banks. that's the fear. last fall, ben bernanke, the treasury secretary, hank paulson and then tim geithner made the decision, understandably so, to take all of the debts created in the u.s. banking system, and across this country, away from the banks, and take them for the u.s. taxpayer. that's trillions of dollars. in potential debt that we all owe on our credit cards, our houses, et cetera. so it's like a surgery where basically the government went in and said we're going to take the debt that you guys all owe out and we're going to take it and the taxpayer is going to be responsible for it. >> they solved one problem and potentially created another one. >> that's exactly it. they about it as the cost to open the parachute to save us from the disastro

paulson was on the hill today, a target of sharp criticism for forcing bank of america to acquire merrill lynch. members of both parties criticized him for the way taxpayer money was used to rescue the nation's banks. he said no one was more protective of the american taxpayer than i was. >>> next, to space, and concerns about the space shuttle. normally, one or two pieces of debris might hit the shuttle during a launch. but yesterday, as many as a dozen pieces were detected. not something to be taken lightly. ryan owens is at the johnson space center. >> we are ready to start. >> reporter: instead of staring into the heavens, "endeavour" astronauts spent their first full day in space tediously examining the underbelly of the shuttle. what they've found so far looks disturbingly familiar -- a series of nicks and scratches on the shuttle's supersensitive thermal tiles. >> we have a bit of a mystery on the external tank foam loss. it's from an area that we don't expect to see foam to be lost. >> reporter: at least a dozen pieces of debris, including some foam that wraps the orange fuel tank, fell

now they grilled him about last year's merger between bank of america and merrill lynch.so jennifer westhoven, who i don't agree with, but that's okay -- >> he admitted he pressured bank of america to not dump merrill lynch. at the height of the fp chal crisis they were very worried that could torpedo the national economy. >> by far the biggest advantage to the taxpayer is what didn't happen and that we did not have a collapse and we did not have double the number of foreclosures in ohio and double the level of -- >> oh, they're happening, mr. paulson. you ought to come and visit us in ohio and see the results of your handiwork. >> i know how terrible it is. i'm just telling you it could have been worse. >> if that's your best argument, it's not good enough. >> yeah. pauls paulson's idea is it could have been worse. it's hard to know. what does that mean, it's hard to be worse. they're saying this is a private deal. some are calling it unaccepta e unacceptable. >>> gas prices are down again. aaa says down to $2.48 a gallon. that's down 21 cents from the peak we saw a few