mr. blankfein? in today's market the smart money is in 4 x. >>> big earn report of the day is goldman sachs. looking at these headlines here, lots of surging across the board. the net nearly doubled to $3.3 billion on a per share basis, that's $5.59. the target on wall street, $4.01. safe to say they blew past those numbers. stock has been down slightly on the the new revenue was up 35% and about $2 billion ahead of expectations. so, will the sec's fraud charges against goldman be the ultimate test of lloyd blankfein's leadership in here to discuss, susan craig who covers goldman sachs for "the wall street journal". glad to have you with us. what's your perspective on how he's coming through this so far? is he gaining support or losing it? >> i think it depends in what -- where you look for that. i think internally and among the constituents be it his board and employees, i think they're sort of rallying inside. i think publicly this has been a very devastating blow to goldman. i think it sort of de

mr. blankfein by the end of his testimony said that he thought generally the dodd bill was a good bill. well, that should kill the bill right there if he thinks that's -- if he think that's a good bill. >> larry: which reforms would michael moore implement on wall street? what would he do right now? we'll ask him when we come back. okay, class, our special guest is here -- ellen page. hi, ellen! hi, ellen! hi, ellen! hi, ellen! we're going on a field trip to china! wow. [ chuckles ] when i was a kid, we -- we would just go to the -- the farm. [ cow moos ] [ laughter ] no, seriously, where are you guys going? ni hao! ni hao! ni hao! ni hao! ni hao! ni hao! ni hao! ni hao! ni hao! ni hao! ni hao! ni hao! [ female announcer ] the new classroom. see it. live it. share it. on the human network. cisco. i want to fix up old houses. ♪ [ woman ] when i grow up, i want to take him on his first flight. i want to run a marathon. i'm going to work with kids. i'm going to own my own restaurant. when i grow up, i'm going to start a band. [ female announcer ] at aarp we believe you're never done growin

mr. blankfein by the end of his testimony said that he thought generally the dodd bill was a good bill. well, that should kill the bill right there if he thinks that's -- if he think that's a good bill. >> larry: which reforms would michael moore implement on wall street? what would he do right now? we'll ask him when we come back. ♪ [ male announcer ] designed to function the way you function. the lexus rx. ♪ at your lexus dealer. [ woman ] can't anything help these itchy allergy eyes? [ male announcer ] visine®-a is clinically proven to relieve all your worst eye allergy symptoms. it goes right where you need it, relieving allergy eyes in minutes. visine®-a. the most complete allergy eye drop. >> larry: okay. against this backdrop, the senate republicans blocked action on financial reform legislation for the second day in a row. the vote 57-41. they were three votes short. so the question is what would you enact? president moore -- no, king moore. what's your reading? >> well, king moore would mean that you and i have a special relationship. >> larry: what would you do? let's let that

mr. blankfein. we heard from earlier panels today the example after example where goldman was selling securities to people and then not telling them that they were taking an intended to take a short position against the same securities. i am deeply troubled by that. and it is made worse when your own employees believe that those securities are jokes or a piece of crap or a studentcashitty des that your employees believed about those that. about timberwolf, the goldman sales team was told it was a priority deal for six months. at the same time, they held a short position. they were betting against it. they rode that it went to junk status and about seven months and investors lost big time. but goldman profited on that deal. the $500 million long deal, goldman shorted it at the same time that it was selling it to clients. securities defaulted within a few years with the 65% delinquency rate. the bad news in your own words was that the client loses money, but the good news is, goldman sachs made money

mr. blankfein and goldman sachs also sold to a.i.g., more the c.d.o.'s that were rigged. mr. cummings: and that's, again, you make the case for why we have reform. and we'd have to have reform and act on this with the urgency of now because every moment that goes by i'm afraid there will be another goldman sachs deal and others. by the way, others are watching all of this in the market. and there may be others doing the same things. ms. speier: oh, clearly. mr. cummings: so the urgency is now. we have to act on this now. and i'm hoping that will happen. we've done our part. now we have to wait father our brothers and sisters on the -- now we have to wait for our brothers and sisters on the other side to do it as well. we just cannot continue to wait. ms. speier: i thank the gentleman. mr. cummings: i thank the gentlelady for yielding. ms. speier: i'd like to invite my good friend from the state of new york, congressman hinchey, to engage. mr. hinchey: well, thank you very much. i want to express to you my appreciation that you engaged in in initiating this discussion here. an

mr. blankfein that talks specifically about the positions that goldman sachs had with aig, what they did and why. does their explanation satisfy you or does it seem disenginge s disingenuous? >> defacto received $13 billion that went from aig to goldman sachs. i know they're trying to put the best possible spin on this that they can. but at the end of the day they took $13 billion. >> that was exactly what that money that was given -- aig was for was to make sure that aig could meet its obligations and it owed goldman that money. >> what annoys me goldman's attitude, we didn't need this money. we're above this fray. try not to put a spin job on it. >> excuse me, i want to call up a quote here from the letter about goldman's view towards the government. let's read it together because goldman is not exactly saying they didn't need the money any more. can we pull that full screen up on the screen? the government arrested the contagious fear that had engulfed the global financial system. goldman sachs is grateful for the indispensable role governments played and we recognize that our firm an

mr. blankfein. stand adjourned. -- we stand adjourned. ho[captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010] >> now more of today's senate hearing on goldman sachs. member's question the chief financial officer. this part of the hearing is an hour and a half. >> good morning everybody. the subcommittee holds the fourth of the hearings to explore the consequences of the financial crisis. these are the culmination of nearly a year and a half of the investigations. the freezing of financial markets and the collapse of financial institutions are not a their jobs and businesses. it sparked the worst economic decline since the great depression. behind every number we cite our american family is still suffering the effects of a man may collapse. our goal is to construct a record of the facts in order to deepen understanding of what went wrong, to inform the legislative debate about the need for financial reform and provide a foundation for building better defenses to protect main stree

mr. blankfein chooses to approach today's hearing, if he's the same blankfein, in which he would argue somethe things that have perhaps caused tease problems or is he a different toned down version. >> interesting, david, we're getting some of the testimony now being released from tourre, some things he plans on saying, i worked on products that built the need for sophisticated invest hers. if aca was confused on paulson's role, it had the opportunity to clarify. it sounds like they're going to be more -- issuing a harder defense than simply rolling over. >> reporter: that may be the case. as we've discussed, you discussed earlier with the attorney from millennium, accessing the face of it doesn't seem to be the strongest case. perhaps he'll go hearter than we anticipated instead of taking the fifth as some people believed he might, given of course he's the key witness, if you will, or certainly the key defendant, i should say. but that being said, you know, i always go back to that time in the market where i was reporting, just starting to learn about many of these financial products. in f

mr. blankfein about aig and the money that aig received from the federal government. >> money that was paid through aig tarp program and was open to you, is that true? >> aig -- yes, aig hold us margin, most of what we collected. >> but they owe you money. and the tarp funds ended up paying their debt to you, did not? >> i don't know if those are tarp funds, i am not sure. then i don't know if the tarp on the that went to it aig came through to you? >> i did not know what pocket came through. i know government money went to aig and it flowed through. >> how many billions of dollars flowed through government money to you throughout the day? >> literally the cash flow was reported and that thing david the near -- david went through this, $12.9 billion flowed, they gave us up and we give them back stuff. >> what was it that flowed to you next? of those funds through aig? >> net of what we gave them back? am the only thing that flowed through to us was an additional $2.5 billion worth of margin that they told us against which we had an insurance contract think is they didn't pay us. >> the gove

mr. blankfein who said -- quote -- "the biggest beneficiary of reform is wall street itself."the head of goldman sachs said the biggest beneficiary of this reform bill is wall street. did you hear that? everybody who's been looking at goldman sachs -- i also understand citigroup now supports this measure. they are huge wall street players who have had access to the wall street and the majority leader, both houses, to push for all the good things which this bill does for them. they are the ones who have been in there. they are the major contributors. look where the money goes. if you want to say, okay, who's looking for contributions? look at that and see what's in the bill. mr. president, this bill clobbers main street and it glances off of wall street. instead of helping wall street, i want to ensure a bill is passed that will protect main street. while wall street may be cheerleading this bill, i'm here to ensure this bill represents main street concerns, and what i'm hearing from main street, they are concerned t. doesn't address their concerns. it puts more burdens on them

mr. blank find -- blankfein speaks at the back end. it states the vote could come as early as tuesday and wednesday, say democratic aides and it will keep voting until the peel off one or two moderate republicans who did not want to take a pee are hit in blocking the reform bill. but minority leader mitch mcconnell has promised to hold his members together against the democratic bill, and he succeeded monday, blocking a democratic effort to open debate on the bill. massachusetts, norman, a democrat. thank you for waiting. caller: i am democrat unlike the previous two colors, but i have to agree with them on both parties being inept and dishonest. democrats, 100% have cooperated with republicans to put up this false front of a filibuster. a filibuster is not part of the constitution -- when rockefeller, the brief time when he was there he changed it twice, that no one could filibuster court nominees like john paul stevens, and as he was leaving office he changed it again so that they would be able to filibuster carter's nominees but in

blankfein. he is the ceo. who is the line responsibility for your team? >> mr. swenson was my superior. >> and ultimately mr. sparkspen so, there was a leader? somebody is ultimately responsible, correct? >> correct. >> mr. birnbaum by buying every name, cdo and opportunity. is that the same thing that you were taking credit for, mr. swenson? >> yes. we worked together on the same desk. >> mr. swenson, you are saying it is clear to you that in early summer of 2006 the fundamentals was going to have a very unhappy ending. that's a quote from your self-assessment. did you share that knowledge with anyone else that read it with self-anounshment. >> sir, do you mind quoting where this quote is? >> i understand. but what page? >> i'm try tog be helpful, sir. i'm asking about swenson. let's assume, i'll get you to where that is stated and my staff will find that and get it to you. >> exhibit 55 down on number two. that's where you made that statement. single name cdo short. so, the question is, did you share that with other members of the firm other than those who read your self-assessment? >> no. >> you were obvi

blankfein at the speech yesterday. he will face the senate hearing on tuesday. with six current or former colleagues. he failed to disclose the critical information to the investors. mr. obama restricted to move -- the room for maneuver by standing explicitly behind the locker -- volcker rule. they have the banks with the proprietary trading. this is aimed at the former fed chairman, this may give him discretion for the sell-off according to the people involved in the late -- the overall. with the financial times story about the speech from president obama, the ratings agency has found that the top rating agencies, standard and poor's and moody's, were influenced by the investment bankers who paid their fees in the lending industry in the lead-up to the financial crisis. if you want to read those stories in several of the papers this morning. what do you think of the approach from president obama? this is your first phone line. >> i am small-business owner. i am at the bottom of the group. i have studied this kind of thing and i think that this is very important. looking back into 1947, when they studied civilization and why they thrive and why they do not thrive. th