. >> glor: joining me to discuss this is law professor and former wall street regulator michael greenberger. one question a lot of people are asking is how is it jamie dimon by all accounts a smart man, a savvy banker, how is it he didn't know something like this was going on? >> these kinds of transactions are as complex as they are risky. and it's very difficult for anybody really to understand what's going on. i think when the end is shown, the trader himself didn't understand what was going on. but these traders are given enormous discretion without proper supervision or understanding. and you end up with these enormous losses. >> glor: speaking of supervision, if dodd frank, the sweeping financial reform bill that was passed in the wake of our last financial crisis if that were fully in place, do you think this would have happened? >> it would not have happened, this kind of trade would have been banned. j.p. morgan chase has been arguing that these kinds of trades should go forward. but the boca rule on dodd frank were implemented the way they were written, these kinds of risky, compl

michael greenberger, i will start with you. so that the question. was this just a bad mistake or does this is a something about more systemic problems. >> this is to the just a bank appearing to be a systemic problem. in other words, we're to the going have to hopefully bail jp pore began out. but as liz rappaport said, these were supposed to be the brightest guys in the room. and if you listen jay me diamon explain this, he called it he greejs us, sloppy, et cetera, et cetera, that is 9-- message being sent that these complex instruments are not even well understood by the people who create them and trade them. >> brown: an therefore we need more regulation. >> well, we don't need more regulation because actually the dodd frank statute which was sign mood huh in july of 2010, if it is ever allowed to go into effect and the banks have been very tough in keeping it from going into effect, would have six ways from sunday to stop this kind of trading. and there is legislation pouring through the o house right now to undo dodd frank. presidential candid

. >> with us is michael greenberg and ceo tim ryan.u what's your view of this whole thing? do you see this as a failure of the regulatory side or a failure of internal risk controls? how do you look at this? >> yeah, i see this as clearly an unfortunate situation. mr. dimon has talked about this and really it's a mistake. it's a hedging tragedy that went wrong. i'm hoping that this situation is not a -- used as a sledgehammer for more regulation. >> but it will be. senator corker is already calling for hearings. you know what, he asked a really key question in his letter, if we can bring this up. question number two in this letter, were these bona fide hedging transactions, which presumably would be all right, that's not his wording, mine, or were these poorly managed trades? less acceptable. and what precisely is the distinction, sir? that's the problem. in the end, they still lost $2 billion. >> well, as you know, because we've talked about this on your shows before, a key issue now before the regulators, the s.e.c. and everybody els

michael greenberg said there is more to this anniversary than just the death of osama bin laden. think anyonebeli believes this is the end of terror, but i think it establishes the united states is a country that can use it intelligence in a very affective fashion. >> greenberg feels the commitment the united states made will help deter terrorist groups throughout the middle east. >> as the president discusses policy in afghanistan, those who lost loved ones thought about the human cost, and a local family turned their attention to assisting who wounded veterans. good >> the president's trip to afghanistan to mark the anniversary of osama bin laden cost debt is drawing attention in the region, of but family members say they think about the fight every day who, and loved ones are channeling that focus in to aid for wounded deathvets. >> he listed two days before the army deemed him too old. he said he was motivated by 9- 11. is what primarily motivated chris to join the military before his 47th birthday. >> he outperformed soldiers half his age, even setting a record for during 12

the bank is still racking up losses, which could reach another billion dollars or more says michael greenberger, an expert on the derivatives and former federal regulator. >> it's almost as if you bet the new york yankees are going to win the world series and now that you see they're in the last place in the american league east you want to get out of the bet. the person you bet with is not going to let you out and that's the position they're in. >> reporter: at the same time, dimon is also doing damage control on his own reputation. >> not only was he the golden boy of wall street but he was leading a very effective charge to undo dodd-frank. >> reporter: dodd-frank is the federal law designed to prevent another financial crisis. under dimon, j.p. morgan chase has spent more than $21 million the past three years on lobbying the most of any bank, much of it spent to water down those new regulations. records of federal reserve meetings show that as recently as this february a team of j.p. morgan chase executives-- including anna drew-- lobbied the fed staff about dodd-frank's so-called volcker r

. >> reporter: terrorism and security expert michael greenberg tells me, the arrest of five men near, who plotted to blow up a bridge is an example of our country's true achilles heel. >> it demonstrates time and time again, that the foremost problem we have is with people in our own country, who develop these rogue mentalities. >> reporter: and sometimes, they are tied to al qaeda, like catonsville's magit con-- majeed con. >> i think the federal government has been very effective in calling that out and watching it. but the question is, how long can you keep all of these balls juggling in the air. they only have to make one mistake. and it will be a calamity. >> reporter: in response to the anniversary to osama bin laden's death, security officers are using more scrutiny as they monitor more commercial flights into the u.s. today. meantime, president obama is making a surprise trip to afghanistan tonight. he just signed a security pact with afghan president hamid karzai. the agreement cements the u.s.'s role in the country after the war ends in 2014. >>> and the president will also

but before your eyes glaze over, michael greenberger, a law professor at the university of maryland anddirector of trading and markets for the commodities futures trading commission, says they're much simpler than they sound. what is a credit default swap? >> a credit default swap is a contract between two people, one of whom is giving insurance to the other that he will be paid in the event that a financial institution or a financial instrument fails. >> so it's an insurance contract? >> it is an insurance contract, but they've been very careful not to call it that, because if it were insurance, it would be regulated. so they use a magic substitute word called a "swap," which, by virtue of federal law, is deregulated. >> so anybody who was nervous about buying these mortgage-backed securities, these cdos, they would be sold a credit default swap as sort of an insurance policy? >> a credit default swap was available to them, marketed to them as a risk-saving device for buying a risky financial instrument. >> but there was a problem. >> oh, there was a big problem. >> what was the proble

. >> reporter: michael greng greenberg tells me, the rest of five men near cleveland, who plotted to blow up a bridge, is an example of our country's true achilles heel. >> it demonstrates time and time again, that the foremost problem we have, that the people who develop rogue mentalities. >> reporter: and sometimes, they are tied like majid khan. before he was caught by the u.s. government, he was plotting to blow up water supplies. >> i think the federal government has been very effective in calling that out and watching that. but the question is, how long can you keep all of these balls juggling in the air? it only takes one mistake and it will be a calamity. >> reporter: in response to the anniversary of osama bin laden's death. security officers are using more scrutiny as they monitor more flights into the u.s. today. >> thank you, mary. >>> maryland's highest court labels pit bulls dangerous. the ruling sparks a heated debate, putting people, trying to protect animals, and children against each other. we'll is live. adam may has -- wjz is live. adam may has reaction. >> report