this is moody's. document from a moody's employee, january of '06. i think we need full functionality with m-3 the moody's model especially if we are to remain short staffed for another year. were you short staffed in january of '06? >> we -- >> were you aware of that? >> we had stress on our resources in this period. absolutely. >> and you were making pretty good profit at that time, weren't you? >> we were profitable, yes. >> and look at 91:another moody's employee, in may of '07, if you would, mr. mcdaniel. >> i apologize. which exhibit? >> 91. >> third -- second paragraph. our analysts are overwhelmed... mr. kaczynski's e-mail. >> as i remarked, there were definitely resource stresses at this point in time. people were working longer hours than we wanted them to. working more days of the week than we wanted them to, and, it was not for lack of having open positions, but, with the pace at which the market was growing, it was difficult to fill positions as quickly as we would have liked. >> does moody's reevaluate wholesale or just certain transact

i was suspended by moody's. in my opinion, because of the financial crisis lies primarily with the misaligned incentives in the financial system. individuals across the financial food chain are compensated based on quantity rather than quality. the situation was no different at the ratings agencies. the vast majority of analyst at moody's are honest individuals who try hard to do their jobs. however, the incentives in the market for rating agency services favored and still favor short-term profit over credit quality and quantity over quality. at moody's, the source of this conflict was the quest for market share. managers of the rating groups were expected by their supervisors to maintain market share. it was an unspoken understanding that loss of market share would cause a manager to lose his or her job. management would periodically distribute e-mails indicating the department's market share. these e-mails were limited to managing directors only. even if market share dropped by a few percentage points, manager

i was suspended by moody's. in my opinion, because of the financial crisis lies primarily with the misaligned incentives in the financial system. individuals across the financial food chain are compensated based on quantity rather than quality. the situation was no different at the ratings agencies. the vast majority of analyst at moody's are honest individuals who try hard to do their jobs. however, the incentives in the market for rating agency services favored and still favor short-term profit over credit quality and quantity over quality. at moody's, the source of this conflict was the quest for market share. managers of the rating groups were expected by their supervisors to maintain market share. it was an unspoken understanding that loss of market share would cause a manager to lose his or her job. management would periodically distribute e-mails indicating the department's market share. these e-mails were limited to managing directors only. even if market share dropped by a few percentage points, manager

i am raymond daniel, chairman and ceo of moody's corp., the parent of moody's investor services. want to thank you to contribute today. the global financial crisis sparked unnecessary debate about the role and performance of numerous participants in the financial markets. many market observers have expressed that they did not better predict the deteriorating conditions in the subprime mortgage market. let me assure you that moody's is not satisfied and i am not satisfied with the performance of our ratings during the unprecedented market downturn of the past two years. we did not anticipate the extra barry confluence of forces that drove the poor performance of the subprime mortgages. we were not alone in this regard but i believe we should be at the leading edge of predictive opinions about credit risk. some key issues in closing the unanticipated performance include the steep and sudden nationwide decline in home prices and a sharp contraction that followed in credit available from banks or mortgage refinancing. moody's did observe a trend loosening mortgage underwriting and es

moody's, for one, traded lower. we also saw spikes in some bond insurers like mbia hitting a fresh 52-week high. brian kelly, you're at the prop desk. you're actually shorting mco, weren't you? >> yeah, absolutely. i don't think this is -- this is the first case. it's not the best case. i think there's more to this. and gary even actually alluded to it, that there is going to be more out there. it doesn't just start with one. i also think what's interesting, and there's going to be a bunch of lawyers over in europe this weekend that are salivating over those goldman sachs swaps deals. so i think you've got this situation here where particularly moody's, the reason why i shorted moody's, where were they on this? what role did they have to play in this? they're next. >> so if you're willing to short moody's, brian, are you willing to connect the dots and initiate some sort of a long position or be bullish on the likes of an aig or mbia, which may have less liability if moody's, for instance, were at fault or played so

moody's c.e.o. raymond mcdaniel says investment bankers never want a tough rating that hurts a deal. but while he pays attention to market share, mcdaniel says he always puts ratings quality first. >> those are risks and they must be managed properly so the ratings system is not compromised in any way. >> reporter: the credit rating agencies are supposed to be the referee on the field and senator carl levin says their call should never determine whether someone gets a bonus. the financial regulatory reform bill doesn't address that conflict, but levin says it's got to find it's way into the bill when the senate takes it up next week. darren gersh, "nightly business report", washington. >> tom: more encouraging news on housing, new home sales surged 27% in march from february's weak pace. the gains snap four months of declines. it's the strongest sales pace since last july and the largest one month percentage gain in almost 50 years. lousy weather in february and the first time buyers tax credit that

this is a long memo about credit policy issues at moody's.it looks like it came at about october of 2007, exhibit 24b. çare you familiar with this? >> i am not. >>> yuri yoshizawa, we were advised by moody's chief credit officer that it was common knowledge that ratings shopping occurred in structured finance. investment bankers saw ratings from credit rating agencies and who would give them their highest ratings. would you agree with that? >> i believe that it does exist, yes. >> is -- did the same thing exists in your area? >> yes. >> there would be no reason to shop. >> because you were doing surveillance, that would not be applicable. >> yes. that is correct. >> whenever s&p may criteria change to its model and that change was more conservative than the previous model, did s&p three test the old deals to see if there structure still passed for breeding purposes? >> traditionally not. -- for reaching purposes? >> traditionally not. >> if you take a look at that exhibit 5, i do not think i asked you about this memo. i think i talk to susan

>> i am not aware of -- i have been with moody's 23 years and i am not aware of any employee at moody'sver being removed or terminated for a market share. >> how about basically saying that with the program? >> as i said, we are interested -- is committed group like this because what would you attribute the incredible growth during this period? great management practices? >> the growth in the debt markets. that is why attribute the growth to. >> ms. corbet? and s&p -- >> and s&p certainly the growth in the credit market, but also in the three other businesses s&p is involved in, the index service businesses, very large and growing business with indexes in the ets as well as equity research and all for contributed to the growth at s&p. >> i'm not asking about this specifically because it was a long time ago back in 2007 but says analysts from the moody's and chief riss officer analysts -- the content of the pitch by bankers and issuers and investors with reasonable arguments that you can call the credit management judgments sometimes improving other times degrading it. we think we've cal

warren buffett owns part of moody's. >> i think that movies various -- moody's biggest shareholder is warren buffett. they will tell you now that they are just like "on the tren -- "auto tred " magazine -- "auto trend" magazine. you should order these in your mind from the riskiest to the less risky. it is much more serious than that. they are a federalese sanctioned enterprise. -- a federally unsanctioned enterprise. how much they have to reserve against each asset is based on the rating. the rating is bestowed on that asset by moody's and standard and poor. it has a huge affect on the ability of institutions to hold the securities. a triple a rating is what the federal government has. it is what the u.s. treasury has. there were triple a ratings on piles of mortgage bonds. there were aaa ratings placed on hundreds of billions of dollars of bonds. they did not just decline in value, then went to zero. the ratings ended up meaning nothing. >> if i had a mortgage -- the likes goldman sachs sales it to ikb. they think they are being really smart. >> all along, i am starting to not be ab

this is from moody's back in 2006. if we are to remain short- staffed for another year -- or you short-staffed in a january 2006? >> we had stress on our resources in this time, absolutely. >> you are making a pretty good profit during that time, were you not? >> we were profitable, yes. >> take a look at movies in 2007, if you would -- moody's in 2007, if you would. this is exhibit 91. second paragraph, our analysts are overwhelmed. >> as i remarked, there were definitely resources stresses at this point in time. people were looking to -- people were working longer hours than we wanted them to come the more days of the week and we wanted them to. it was not for a lack of having open positions, but at the pace of the market was growing, it was difficult to fill positions as quickly as we would have liked. >> did moody's reevaluate wholesale, or just certain transactions? >> we monitor in our surveillance all transactions. >> but did you reevaluate an entire cdo or an entire r m b s? >> i apologize. i am not following.

warren buffet owns a share of moody's. >> he owns the biggest portion of moody's. they are both public corporations. they see themselves now -- they will tell you now, we are just like auto trend magazine for car buyers. we are journalists. we give our views about the relative trustworthyness of these various securities, the relative likelihood they are going to repay. these ratings were taken far too seriously. then meant as a suggestion about the -- not the likelihood that they would default, but the way you should order them in your mind from riskiest to least risky. but their place in the world was, and is, much more serious than that. they are federally sanctioned enterprises that banks have to reserve capital against their assets, and how much they have to reserve against each asset depends on the rating of the asset, and the rating is bestowed on that asset by moody's and standard and poor. so their ratings have a huge effect on the ability of the institutions to hold these securities. a triple-a rating is what the federal government has, what the u.s. treas

moody's says the ratings comes with a negative outlook. the agency says its action reflects the ongoing low level of profitability at toyota. toyota shares ending down as a result of that moody's downgrade. ross. we thought we would be sharing so many shots of brake pedals. still to come on "worldwide exchange," markets appear to be unphased by the goldman sachs scandal and after the break, find out exactly what stories are moving equity markets. >>> we're looking at these ongoing negotiations between greece and the eu and imf. it may take a few weeks before they decide whether they're going to tap into that possible pailout funds. as far as treasuries are concerned, drifts sideway these morning, current yield 3.76%. the u.s. will announce jobless claims and home sales reports for march today and traders scrutinize a potentially report breaking treasury announcement up next week, bond auction side is for 2, 5 and 7-year notes. what about the currency markets, cries teen? >> we are watching, of course, what happens with the equity markets.

mcdaniel stake a look at exhibit 90 it is the moody's document from the moody's employee january '06 i think we need full functionality of the model especially if we are to remain short staffed for yet another year. were you short staffed january 2006? >> we had stress on our resources during this point* absolutely. >> you are making a pretty good profit? >> we were profitable, yes. >> toolkit 2007 if you would mr. mcdaniel. >> i apologize? which exhibit? >> 91. had the analysts are overwhelmed. >> as i remarked to there were definitely resource stresses that this point* in time. people were working longer hours than we wanted to and more-- of the week than we wanted them to. it was not for lack of having open positions but the pace at which the market was growing it was difficult to fill positions as quickly as we would have liked. >> did moody's reevaluate wholesale? or just certain transactions? >> we monitor all transactions. >> did you evaluate the entire cbo four nds? >> i apologize. >> you have a new metric or a new model they were using to rate new securities, will you go bac

and warren buffett owns part of moody's? >> right.ody's is, i think, its biggest shareholder is warren buffett and s&p is owned by mcgraw-hill. so the public -- they're both public corporations. their job has been -- they see themselves now they will tell you now we're just like auto trend magazine for car buyers. that we're just journalists. we give our views about the relative trustworthiness of these various securities, relative likelihood they're going to repay. these ratings were taken far to seriously. they were just meant as a kind of suggestion about what the like -- not the likelihood they'd default but suggestion of the way you should order them in your mind from riskiest to least risky. and what -- but their place in the world was actually much and is much more serious than that. they are -- they're federally sanctioned enterprises that banks have to reserve capital against their assets. and how much they have to reserve against each asset depends on the rating of the asset. and the rating is bestowed on that asset by mood

choice perhaps or a man who sometimes has been compared with the moody figure from the novel jane eyre, a bully who is ill at ease and difficult. >> he went straight to morrison's. >> join today by partners, he met staff in the canteen, but downstairs shoppers were less impressed. >> will you be boarding for his to make certain not. >> wind not? >> because i will not. they have done terrible things for the education spend what about you, would you be voting for mr. brown? >> yes. >> will you be voting labour? >> no. >> have you voted for labor

stacey moody a driver for mckenzie trucking was delivering slabs to american counter tops yesterday morning when the slabs slid off his truck flatbed trailer and fell on top of him. he died at the scene. police believe that the incident was an accident. >>> it has concrete evidence that terrorists are plotting to kidnap israelis. urging citizens to get out. israel has a travel advisories. it is widely ignored. >>> this is the second and final day of the nuclear security summit in washington dc, marks the leaders of 46 countrys. president barack obama sounded the alarm over the threat. he urged them to join forces in making all nuclear secure. >>> a new safety warning about another toyota model.

captain moody considers landing in the ocean. but then at 13,000 feet, the crew gets all four engines started again. they had had a chance to cool, and the ash had broken away. one quickly fails again. still, he lands british airways flight 9 safely in jakarta, indonesia. almost 27 years later after his heroic flight, captain eric moody, now retired, tells us it's smart to keep airplanes away from volcanic ash. he wouldn't want to fly through it again. randi kaye, cnn, new york. >> i love how understated the british pilot was. we have a small problem. all of our engines have gone out. amazing they got through it. check out ac360.com to find the air travels delays. >>> up next, the raw politics of prayer. a court decision on the national day of prayer. a judge says it's unconstitutional, and this year's observance could be one of the last ones. christopher hitchens and tony perkins join me ahead. >>> one on one with jack kevorkian. part two. he admits to helping more than 130 people die to help end their suffering. did you ever --

it's deal received the highest possible credit rating, stamped triple a., by the two top agencies, moody's and standard & poors, meaning it should have been a much safer investment. jack chen is a former moodees's analyst. >> investors, back in 2007, gave a lot of credence and had a lot of faith in the triple a. rating. >> reporter: the problem-- rating agencies are paid by the people who create the product, a conflict of interest akin to movie critics collecting checks from studios to review films. >> the truth is they are working for wall street ask they're going to give wall street what wall street wants. >> reporter: both moodies and standard & poors declined to comment on our story. the new financial reform bill will seek stronger regulation and more transparency, but in the end it appears it will do little to change the way the ratings game is played. armen keteyian, cbs news, new york. >> rodriquez: the financial crisis was triggered when the bottom fell out of the housing market. today, though, some good news-- the government reported sales of existing homes jumped nearly 7% from f

the country's debt rating took another hit from moody's. the european union economic commissioner says aid from the e.u. and international monetary fund could come immediately, if greece asks for help. this sent the euro currency close to a new crisis-low while the dollar rallied. shares of the national bank of greece hit new lows. shares also saw more than twice their usual volume. and that's tonight's "market focus". >> tom: americans are buying cars and trucks again. the biggest network of car dealerships in the country saw a double digit rise in sales and profits during the first quarter. autonation's results came in better than expected at 34 cents a share, with sales of u.s., foreign, and luxury autos all on the increase. i spoke with chairman and c.e.o. mike jackson at one of his nissan outlets in fort lauderdale, florida. if you look at our quarter t is an increase of 19% on the revenue side and within that, it's in all categories of our business, all segments of our business and all geographic areas. so it's very comprehensive. >>

what i specifically want to talk about is freddie mac, fannie mae, moody's and standard and poor's. you know, when the market began to collapse, a lot of those derivatives that were talked about were bets one way or the other against the housing market which in many ways had been overheated in america because of the approval of something known as a subprime mortgage. but the devil in those details that caused us so much problem, there originally was no market for subprime mortgage. they were b, c and d credits. they were down payment assistance loans. they were higher risk loans by their definition, but they got securitized, and two things happened. first moody's and standards rated them as investment grade, aaa investment grade bond or securities. secondly, freddie mac and fannie at the behest of the united states congress, us, started buying those securities to meet the desire to have more affordable housing in america. a noble goal but a goal that was being achieved by loaning people money that could not pay it back, loaning them the down payment they didn't have, by not validati

>> right. >> moody's i mean. >> well, the answer is that moody's should have at least asked the question. who was this neutral third party who put this together for you? that is an obvious question if you say, we didn't put this thing together and we didn't structure just to game the system and let somebody have a great downside play on the housing market. we had a neutral third party put it together, and the natural question that you and i would ask, bob, who was the third party? and then if you find out it is a hedge fund manager, you are a little more concerned that it might be a little tainted, and not quite as much of a neutral third party. >> well, jon, you will certainly find that the roles of the collateral managers is going to come under a large degree of scrutiny at this point. let me ask you about deutsche bank and david faber and i were talking about deutsche bank actively involved in the cdo market and they are down 9% today, and obviously the traders are concerned a little bit as well. >> yes, an unless they have a similar smoking gun with another hedge fund manager, most p

moody has said might have been an issue for the airlines? >> i don't know why eric moody said that, actually. it's just a few kilograms. it's not particularly heavy. aircraft can easily carry such instruments. so i don't know. i mean we had an early prototype which looked a bit chunky. maybe he was thinking of that. these cameras can sit in the palm of your hand so it really is -- that's not really an issue. >> they're small. >> right. so they're small. they don't weigh a lot. how quickly could you make them and what would you sell them for? >> okay. well i don't know about price. they're not expensive. but the problem is, of course, they have to go into a commercial jet airliner. they have to look forward. so there must be a window. it's like a camera looking out of a window. and it's using infrared radiation so it can be working during the day or the night. but it needs a special kind of window to look at, not just glass. so you then have to sertify it for say flying. this takes many hours. and then we have to look at false detections. has

you heard a short time ago moody's downgraded l.a.'s credit rating a notch. the city of broken angels will go broke by the end of june unless it gets a promised cash infusion from the department of water and power. the controller said this will not affect bond payments. maybe l.a. is too big to fail. well, certainly we've learned other municipalities are not yet. many investors are buying up bonds for tax-free yields. analysts figure there may be a bubble building and investors don't fully appreciate the precarious finances of some governments. by law, general obligation bonds are second in line in getting paid after education, which basically means half the budget would have to go unfunded. half the bills the state gets every month would have to go unpaid before g.o. payments are at risk. bank of america says over the last month, "uninsured cal state g-o bonds earned an excess return that was six times more than all the other states combined, 1.65% versus 24%." i know a lot of bond experts expect california bond prices to fall further, yield higher. holding

in 2007 was watching the credit industry, as moody's, stan doord and poors. that's right, i paid for my hospital stay in chickens. >> in the olden days our grandparents, they would bring a chicken to the doctor. >> the gop finally comes up with a health care plan and it's bartering for your health with poultry. >>> worsts. the day dick cheney told senator leahy to go f himself. >> it's sort of the best thing i ever did. >> sort of? >>> and friday's with thurber. tonight, "the toe paz cufflinks mystery." all the news and commentary now on "countdown." >>> good evening from new york. just hours ago the governor of arizona signed into law an immigration bill that may in practical terms mandate racial profiling. hours before that president obama criticized the proposed law and used it as an example of why federal level immigration reform is so necessary and urgent. in our fifth story tonight, will this new law do for immigration reform what outrageous insurance rate hikes did for health care reform? governor brewer today signed into law and then defended a law th

police found the car and arrested moody, they are still looking for the man at this hour. >> public works crews are working on a watermain break near the harvard tunnel. 20-inch pipe along keith avenue broke. water was shut off quickly. no word on what caused the watermain break. and late word at this hour, keith avenue has been reopened. >> the city breaks ties with a tax flooded community center after accusations it was a front for gang activity. keith daniels is live in west baltimore with the mayor decision earlier tonight. keith? >> jeff, the group coil is responsible for the westside safe streets operation. but the city is cutting funding to all the locations. two of them. but it is the former site here in west baltimore that has on the mayor quote concerned, about new and significant allegations. >> it is known as communities organized to improve life. or coil. a community service group in west baltimore, under scrutiny now with it's safe streets program. a program now cutoff from more than $1 million in city funding. ordered by mayor stephanie rawlings-blake. >> it is just a situa

and jessica, greece is the news after moodys' once again cut greece's debt rating four notches above junk status. is this fear still in the markets? the fear over greece is definitely still in the market. there are three issues we need to focus on. one, the problems in greece just underscore the structural inaccuracies of the european monetary union. secondly, a possible default in greece brings forth the reality that western nations can default on their debt. and three, i think that time is no longer on the side of the greece. back in march, greece was saying that it wasn't seeking financial aid, and now it seems as though it can't get financial aid soon enough. so, i think it would be fair to say that we can expect some sort of help from the imf quite soon. let's talk about overall stock market. yesterday one trader said that stocks were tired. do you agree? i do, i think that we had a really impressive rally up here, and the profit news is pretty bullish. i wanna say over 80 percent of the companies in the s&p 500 that have announced earnings have beat estimates. which is a positi

the spy was james moody.he operated mostly from staten island downed across to the wood ridge creek and he would hide his rowboat in the woodbridge creek. between parts amboy and seaboard. >> are any of the cipher still used today by the government and if not, what other sorts of technology had taken over hiding secrets and things like that. >> computers. actually you can use your computer and code messages far superior to what we use used in the american revolution. computers today design the codes and where he talked about a one letter shift, that is one transaction. they would then take the one letter shift, which actually would use different combinations, and then make multiple shifts, and if you get into breeding about the japanese purple codes, you will see that they go into multiple layers of transcriptions, and the only way to decode the stuff is using a computer. and you really need to be a mathematician today to be doing codes and ciphers at that level. one of the things they didn't mention that we

stacey moody a driver for mckenzie trucking was delivering slabs to american counter tops yesterday morning when the slabs slid off his truck flatbed trailer and fell on top of him. he died at the scene. police believe that the incident was an accident. >>> it has concrete evidence that terrorists are plotting to kidnap israelis. urging citizens to get out. israel has a travel advisories. it is widely ignored. >>> this is the second and final day of the nuclear security summit in washington dc, marks the leaders of 46 countrys. president barack obama sounded the alarm over the threat. he urged them to join forces in making all nuclear secure. >>> a new safety warning about another toyota model. consumer reports magazine is urging you not to buy the new lexus gx460. it says it's test uncovered a roll over problem while making turns. calling toyota the fix the problem fast. toyota has not commented on the warning. this another set back for the company. toyota had to recall 8 million vehicles worldwide for accelerator problems. >>> is the recession over? the committee which determines the offi

>> i don't think i'm depressed, but you get moody once in a while. your body wears out when you get old. ( laughs ) you always want to do something that you can't do. that's the hardest part. >> i think i recognize god in my life a lot more than i had in the past, and a lot of it is because of stephen ministry. i see god working, not only with my care receiver but with me, which i never saw before. >> reporter: in the 35 years since the program started, half a million people have been trained as stephen ministers, each one touching at least one other person and being touched in return. >> i'm not going to go away. i'm going to be there as long as he needs me. i don't know where the end's going to be, but we're going to do it together. >> reporter: for "religion & ethics newsweekly," i'm deborah potter in raleigh, north carolina. >> abernethy: in our "belief and practice" segment today, we look at the mezuzah, the case many jews affix to their doorposts. inside eaç4mezuzah are the essential words of jewish belief that god commanded jews to remember, e

the spy was james moody.anti-operated mostly from staten island down nearly cotton fell and across to the woodbridge creek, and he would hide his robe -- rowboat. >> are any of the ciphers still used today by the government? and if not, what other types of technology have taken over, you know, hiding secrets. >> computers. actually, you can use your computer and encode messages far superior than what was used in the american revolution. yeah, no. computers today, if you design the code, and where i talked about one letter shift, that is one transaction. they would then take the one letter shift, which actually they were just different combinations, and then make multiple shifts. and if you get into reading about the enigma machine and the japanese purple code, you will see that they go into multiple layers of transcriptions. and the only way to decode the stuff is using a computer. and, you know, if you would need to be a mathematician today to be doing codes and ciphers at that level. there's also, one of th

african americans really want the government to play a very central robust role in procreation, wpa, moodie like a job creation program. the second thing which is equally important is we are distinctly pro union and there's a chapter in the book we talk about early in chicago shorty after barack obama was elected and they went on dustin on strike because they won on getting their wages and basically they were -- the plant closed, windows and doors, and there were not going to give their wages. this was mostly latinos but latinos and blacks had been to get branded to be a good day strike. it was on television and obama to his credit played a big role urging them on because he came on television and said he supported the strikers and one of the july of reporting this book is one of the things i discovered was that one of the earliest forms of the union organizing was black women on the plantation, the sleeps plantation, they would organize a sit-down strike or just stop work to get a sunday off or be able to visit their relatives on a plantation. and to this day of course if you talk to the s

and moody's, what are they saying? >> we reached out to them., we didn't get a response from them. but we got a statement from s. & p. saying the company has, quote, we have it here, a long traditi tradition offage lytic expert and we have learned a lesson from the recent crisis and have made significant enhancements to increase transparency. >> it's pretty scary they give you a aaa rating and it turns out to be junk and it's not encouraging. >> that's it. it's the underlying investors and underlying mortgages that were propping up the securities. if you looked underneath, you found bbbb, you found that the mortgages were almost guaranteed to fail and yet they were still going out and selling the things. >> we have to step back and learn from the mistakes and make sure they don't happen again. i fear, though, that they are not learning as much as they should. lisa, thank you. >>> jack cafferty is coming up with "the cafferty file." >>> and then air marshals scrambling on board a delta flight nearing the united states, because of one passenger al

first top rochester, and i choice perhaps or a man who sometimes has been compared with the moody figurefrom the novel jane eyre, a bully who is ill at ease and difficult. >> he went straight to morrison's. >> join today by partners, he met staff in the canteen, but downstairs shoppers were less impressed. >> will you be boarding for his to make certain not. >> wind not? >> because i will not. they have done terrible things for the education spend what about you, would you be voting for mr. brown? >> yes. >> will you be voting labour? >> no. >> have you voted for labor before? >> i have not voted at all. >> our taxes have gone up. it's all right when you're up, when you're ordinary, no. >> in 2005, they saw the famous scene where tony blair was all lovey-dovey. no such duties this time as mr. brown visited a labor family at home. >> so "newsnight" ordered our own ice cream van instead. >> that one is for me, and one for gordon, please. >> gordon brown said this many of a coming from a middle-class family, it is a nice middle-class a state here. and tony blair possibly reported that these

moody's says one of 11 states coming out of the national recession. [ inaudible ] we've been lower thane southern and national unemployment rate every month for the entire recession because we cut spending applying conservative principles. >> sean: this is interesting. you cut taxes, you cut spending. the same principles ronald reagan applied when he was president of the united states. quote reagan a lot. i quote ray dan a lot. i think -- i quote reagan a lot. i think he's the greatest person we've had. on the national level we have a president doing the opposite. how bad do you think barack obama is in terms of his governing in this country? >> last time we did -- you were right. i said he campaigned he had wonderful rhetoric about bringing us together about the change we were waiting for. he has ed -- i -- he has governed even more far to the left you saw the health care bill. last time i was with you on air you pointed this out, you saw this during the campaign. i didn't vote for him. but the reality is, he's been more to the left, more radical. they ignored the will of the people wi

moody's says one of 11 states coming out of the national recession. [ inaudible ] we've been lower thanhe southern and national unemployment rate every month for the entire recession because we cut spending applying conservative principles. >> sean: this is interesting. you cut taxes, you cut spending. the same principles ronald reagan applied when he was president of the united states. quote reagan a lot. i quote ray dan a lot. i think -- i quote reagan a lot. i think he's the greatest person we've had. on the national level we have a president doing the opposite. how bad do you think barack obama is in terms of his governing in this country? >> last time we did -- you were right. i said he campaigned he had wonderful rhetoric about bringing us together about the change we were waiting for. he has ed -- i -- he has governed even more far to the left you saw the health care bill. last time i was with you on air you pointed this out, you saw this during the campaign. i didn't vote for him. but the reality is, he's been more to the left, more radical. they ignored the will of the people w

this if i was james moody. he operated mostly from staten island town and across from the creek and he would hide their rowboats right next to perth amboy. >> car and eight of the ciphers still used today by the government and if not what other types of technology has hidden? >> computers. [laughter] you can use your computer and in code messages far superior than was used with the american revolution. computers today who designed the croats were i talk about the one letter shift, that is one transaction. they would then take the one better shift can use different combinations and make multiple shifts. if you get into reading about the enigma machine and the japanese purple coat you will see they go into multiple layers of transcription and the only way to decoded is to use a computer. if you really needed mathematician today too do codes and ciphers at that level. one thing we used in the york was called the language of flowers. are a young girl at the putnam headquarters and on the top of broadway was a widow

greece's debt downgraded by moody's after the country revised last year's budget deficit upward.blic workers in greece have gone on strike to protest the cuts in government funding. bob pisani is at the new york stock exchange and rick santelli at the cme group. >> we got a couple of problems here today. we haven't seen these in a while. one, you are all sick of it, but greece just will not go away. one trader called it the drunk couple at a dinner party that stayed on too long and they won't go home. they don't understand they're not welcome anymore but it still sits there. the other problem -- this is kind of unique here today, tyler -- is we haven't seen earnings disappointments at all this earnings season. we're getting them today, whether you've talking about abb or even credit suisse, ebay was disappointing, baxter was disappointing, qualcomm was disappointing. six, eight companies that kind of disappointed on the street. just didn't make the numbers. a lot of these stocks have run up rather nicely today. if you don't get close to what people want in the numbers, they sell

in october 2007 goldman sachs made quite a bit of money when moody's downgraded bonds. after you send this e-mail informing your colleagues of those downgrades, donald mullein says it sounds like we will make some serious money. why was that? abs cdo synthetic that we have. what happened was when the rating agencies downgraded a number of the underlying rmbs securities it triggered an event which would mean that we would end up with an implied right down event that would shut off the coupons in a number of t the -- we would eventually recoup the gains on that trade. >> so, i'm not stating that there's anything wrong with the hedging in your long position. don't get me wrong. i guess the thing that i would ask. did you, at any time, see any flaws in the ratings agency's assessments of the products that you were putting out there? >> i did not work on the construction of cdos. i was a market maker in abs, in abs securities. as a market maker, we are asked to take principal risk from our clients, whether it's a buy or a sell at various times. with that, it's for us to mana

offstage he could read moody and profane.ing into red rage is that he forgot all about the next day and he knew how to hold a grudge. i got a simple rule about everybody he told a journalist. if you don't treat me right, shame on you. but that is merely to say a armstrong was a human being as flawed as the next man and if there is anything that i learned in the process of writing "pops," it is that louis armstrong's flaws were few and forgivable. in return for his unswerving dedication to his art, he knew of true happiness and shared it unstintingly with his fellow men. not long before he died he told a friend that, my whole life has been happiness. through all the misfortunes etc., i did not plan anything. life was there for me and i accepted it and life, whatever came out has been beautiful to me, and i love everybody. you can't top that. so i will let cops have the last word. what you are about to see is a tv performance of one of his favorite songs, titled a properly enough, on the sunny side of the street originally broa

we've made it clear to people that we're not going to have the clock run out on us and moody's didn'tegin producing documents, so we a issued a subpoena and we'll do it whatever we need to. >> have you had any insight as to whether there has been the deliberately manufacturing of toxic securities that are bundled together, stamped with aaa through some formula and sold to unwitting pension managers. is there evidence of that? >> well here's what we're doing. we're doing a full scrub. one of the issues we're looking hard at is kind of the flow of toxic loans all through the system. when i started this journey as chairman of the commission, i often thought of toxic assets, as assets that somehow went bad on the bank's balance sheets. and i think one of the real open questions is whether they were toxic from day one. one of the issues we're looking at are the level of mortgage fraud that existed around the country. we're taking a look at whether banks as they, and other financial institutions, as they originat originated, securitized these mortgages, whether they ever bothered to check w

the man who oversaw the ratings process but moody's testified before the subcommittee. "it changes the whole dynamic of the structure when the person who is putting it together want it to blow off." the sec and the courts will resolve the legal question of whether goldman's factions broke the law. the question for us is one of ethics and policy, where goldman -- ethics and policy. were goldman's action is appropriate chairman and -- actions of prue. ? -- actions appropriate? this is a synthetic products assembled by goldman. according to documents, a goldman client expressed interest in taking a short position in the transaction, but an executive noted that stands barks, the head of goldman's mortgage department -- dan sparks, the head of goldman's mortgage department might want to preserve for goldman purine -- goldman. it wanted to make the bet badly enough that it took the vet for itself -- the vet for itself and set of letting an interested client have it. -- the bet for itself instead of letting an interested client have it. it then disclosed it would profit if tho

requirement from investors primarily on the triple a side that bonds have two ratings and it was typically moody's and s&p. most had three. but the demands was driven by the investors so we could sell bonds. >> so the answer is yes? >> well, i don't like the word "shop" because that was not really the process. the in order to sell bonds you needed more than one rating agency. >> ok. >> did you ever choose the worst one? >> no. >> we currently have a new emerging party called a tea party. in history there was a political party called the no nothing party and that was the response people would give when questions were answered. what i heard from both of you, one formerly employed, one currently employed, is i think one of the reasons he was very interested in looking at citibank was in terms of its structure, and basically the answer we have gotten back from you whenever we wanted to inquire about what i think most of us would think would be an aspect of the work you were in, or a partnership in some way, the answer was, "i don't know because they were somewhere else." i know it is an enormous opera

. >> reporter: captain moody say authorities have taken the right decision today to shut the airspace, but when can it be re- opened? even the country's leading meteorologists admit what happens next is difficult to divine. >> looking ahead, if that volcano is staying in broadly the same direction. >> reporter: so for now, britain's air authorities can only consider the wind, and watch the volcano, before deciding when the planes, and their passengers return to the skies. >> woodruff: still to come on the "newshour": a tampa town meeting. but first, the other news of the day. here's hari sreenivasan in our newsroom. welcome back from vacation, hari. >> sreenivasan: militants in afghanistan struck on several fronts today. in the south, a suicide car bombing killed at least six people. three were said to be foreigners, possibly britons. the blast rocked the city of kandahar, where nato troops plan to carry out a major operation this summer. to the north, four german soldiers were killed in a rocket attack. five others were wounded. the president of kyrgyzstan has resigned and left the c

i am appalled that standard and poor's and moody's have not been brought to task. after all, they were the ones that issued the ratings. when people talk about the bank in germany that bought basethes derivatives, they were told that these were a and aa-rated instruments. if someone told me that i was buying something that was worth a c or d in a couple of days, i would not buy it. so whoever sold those things -- we should be looking at standard and poor's and moody's. they used to be good rating companies, but i would not look for their ratings for anything. host: great question. guest: credit rating agencies issued grades to invest in companies about the quality of these investments. all lot of evidence has come out in the past few years that the credit rating agencies were deeply conflicted -- would often give high grades to securities that it didn't really understand, that it worked in pursuit of these anfees from thr clients. the agency says that they have been reformed since then, and there is debate on capitol hill about whether or not they should receive a

lucky for us, moody's will grant the u.s. action wiggle room because in judgment, we can writes our canhip. -- our listingship. i supported the creation of a bipartisan commission to restore some discipline to the federal ledger. now that you are an official member of the president's commission, congratulations. i hope you use this market as an opportunity to lay a foundation for that effort. we are prepared to assist you in process by establishing greater discipline. the key is tax reform. when the u.s. first implemented income tax, the internal revenue code could have been contained in a single 400 page textbook. the current is now over 4000 pages and that does not count the volumes of technical advice that the irs publishes every year to understand the law. adding insult to injury, between tax expenditures, income tax cuts and state tax, individuals small businesses have no guarantees concerning taxes. and individuals and businesses cannot make hiring and investment decisions in this on certain tax and garment. current tax

it included edward white, refers and david burke, william day, william moody.se men were very important figures in 1910. for most americans today, even law students and professors, the names to not bring even a faint bell -- do not bring even a faint bell. most people recognize oliver wendell holmes, who was famous when he joined the court, and remains one of our country's most iconic judges. after graduating from college, at the age of 20, he enlisted in the army to fight for the union in the civil war. he was seriously wounded three times in three separate battles, including a antietanti. he survived law school as well. [laughter] he wrote his classic book "the common law" at the age of 40. he served as a judge on the massachusetts supreme court before taking a seat on the united states supreme court. the other famous justice, less than holmes, was john marshall harlan. his father was a lawyer, and he named him after chief justice marshall. the father clearly had high expectations for his son. he lived up to his name. he graduated from transylvania university

lucky for us, moody's will grant the u.s. action wiggle room because in judgment, we can writes our canhip. -- our listingship. i supported the creation of a bipartisan commission to restore some discipline to the federal ledger. now that you are an official member of the president's commission, congratulations. i hope you use this market as an opportunity to lay a foundation for that effort. we are prepared to assist you in process by establishing greater discipline. the key is tax reform. when the u.s. first implemented income tax, the internal revenue code could have been contained in a single 400 page textbook. the current is now over 4000 pages and that does not count the volumes of technical advice that the irs publishes every year to understand the law. adding insult to injury, between tax expenditures, income tax cuts and state tax, individuals small businesses have no guarantees concerning taxes. and individuals and businesses cannot make hiring and investment decisions in this on certain tax and garment. current tax