neel kashkari, what is your thought on this? mr. ata, and every day data comes into it we are paying attention to markets. in minneapolis and all the banks, we have strong teams economist chewing on this, we put it together, so we'll wait and see. david: that a-dependent, once again. stephanie: you have always been data dependent. i'm giving that a note. -- no. mr. kashkari: well, you can try again. atid: you gave a talk brookings institution, talking about to be to fail, and suggesting your part of the fed needs to look if there be more regulation. dodd frank did not go far enough. what drove you to this. mr. kashkari: we remember the crisis. we hated that we had to bail out the banks, and i think americans hated that as well. we see the anger in the american people still today. none of us wants to be in that situation again. dodd frank was passed quickly because they wanted to reform the financial system, which is supported. the transformational measures were taken off the table -- stephanie: like what -- mr. kashkari: breaking up

neel kashkari will join us at 6:30 a.m. eastern today. >> let's get a check on the markets this morning. take a look at the futures and remember you're looking at markets that are coming off two days of gains. if they put together a third day of gains, this will be the first time that's happened in 2016. this morning you see some green arrows. the dow futures indicated up by about 65 points. s&p futures up by about nine. the nasdaq up by 17. the dow is up 3.4% just in the last two sessions. the s&p is up by over 3.6%. you're still looking at markets in correction territory from the highs they hit last may. take a look at what's been happening in europe with some of the early trade there. strong green arrows across the board. the cac in france up by 1.9%. overnight in asia, you saw that the nikkei was down by about 1.3%. the shanghai composite was up by just over 1%. the shenzhen composite was up by about 1.4%. take a look at oil prices, which yesterday dropped substantially after all the talk that was out there about opec p

new minneapolis fed bank president neel kashkari is your guest exclusively.ut his call for breaking up the banks. basically reinstating glass steagall. a former goldman sachs exec. a lot to talk about there. and we'll talk more about your money. with the futures up today, we could be on pace for three straight gains. in this kind of market, three days of gains sounds good, given the kind of year it's been. >> we put out a twitter poll, and the results are very interesting. we're going to share them by the end of the show. >> can we get a hint? >> it's called a tease, brian. you're a tv professional. brui brian, we'll see you later. >> up next, we'll get you caught up on the markets an get you ready for the day ahead. john manley join us live. stay tuned. "worldwide exchange" will be back after the break. whole communities are living on mars and solar satellites provide earth with unlimited clean power. in less than a century, boeing took the world from seaplanes to space planes, across the universe and beyond. and if you thought that was amazing, you just wai

neel kashkari will be on bloomberg today.nancial world with his first made in speech, if you will, for the minneapolis fed. right now, our bloomberg first word news with caroline hyde. investigators will fight a judge's order. a federal judge told apple to give the fbi reasonable technical assistance to recover information from the phone. tim cook writes that the government wants the company to build a "backdoor" into the iphone, which would undermine decades of security advancements to protect apple customers. british prime minister david cameron is close to getting an overhaul in the membership in the european union. he has won support from germany's angela merkel. she will do everything possible to keep the u.k. in the eu -- keep germany in the you. -- eu. china appears to have raised stakes in the south china seas. according to satellite images, china has employed a bit system in the region. i've looked -- it has limited defense capabilities. the u.s. is making a show of force against north korea in the wake of the rocket

i'm pleased to have neel kashkari back at this table. welcome. >> thank you, charmie, it's great to be here. >> let me just talk a little bit about your career. were you an engineer as i sugd. i think you went as an analyst in silicon valley. >> after business school i went to silicon valley when i was a banker at gol man. >> yup. >> and then hank, who was a c.e.o. of goldman sachs goes to treasury. and did you simply write him a letter or call him up. >> i called him up. i met him once for ten minutes. >> rose: he said come to washington let's talk. >> so i met with imhad, he was not yet confirmed sew wasn't a treasury yet. and i went in there with a pitch like i want you to hire me. and he just said stop with your pitch. i need somebody on my team who will just do whatever needs to get done. how does that sound. and i said. >> sign me up. >> rose: this is a year before the financial crisis, none of us saw it coming. >> then you had deep involvement as was suggested in the introduction. and then that's over. >> yes. >> hank leaves as se

alix: minneapolis fed president neel kashkari on bloomberg go this morning.k at the economy from advertising perspective. looking into historic opec cuts with goldman sachs. iran comes out in support of saudi arabia -- what does rush again from oil freezing? ♪ alix: welcome back to bloomberg markets. time for the bloomberg business flash. american express planning to management to in cut $1 billion in costs. the effort will involve consolidating some marketing activities and merging the company's two largest servici ng organizations. lexmark international has attracted first-round bids from vista equity partners for its software division. maker haser printer been working with goldman sachs on strategic alternatives. britta rico officials say they are considering new emergency measures to confront the island's economic crisis. -- puerto rico officials. they have $72 billion in public debt. that is the bloomberg business flash. the bpp is a world leader in advertising and marketing services. wpp. martin: in a slow growth world, growing is somewhere around three

i'm pleased to have neel kashkari back at this table. welcome. let me talk about your career.ou were an engineer. i think you went up as an analyst to silicon valley? neel: after business school, i went to silicon valley. charlie: hank, the c.e.o. of goldman sachs, goes to treasury. did you write him a letter or call him? neel: i called him up. i met him once for 10 minutes. he said come to washington, let's talk. i met with him. he was not yet confirmed. i went in with a pitch like i want you to hire me. he said stop with your pitch. i need somebody on my team who will do what needs to get done. how does that sound? i said sign me up. this was a year before the financial crisis. none of us saw it coming. charlie: you had deep involvement. that is over. hank leaves as secretary of the treasury. you go back to california. you were wondering what you would do. you run for public office having never served in public office and running for governor. neel: i looked around the country and saw a lot of people running for office. i thought if they could do it, why can't i do it? i loo

. ♪ ♪ charlie: neel kashkari is here. the president of the federal reserve bank of minneapolis. his career began as an aerospace engineer after working at goldman sachs he joined the treasury department. he oversaw the bank bailout initiative known as tarp. he made headlines last week after suggesting regulatory efforts had failed to curb the risk posed by large banks. he proposed they could be broken up, and regulated by public utilities, or or have increased capital requirements. i'm pleased to have neel kashkari back at this table. welcome. neel: thank you, it is great to be here. charlie rose let me talk about : your career. you were an engineer. i think you went up as an analyst to silicon valley? neel: after business school, i went to silicon valley. that was after i was a banker at goldman. charlie: hank, the c.e.o. of goldman sachs, goes to treasury. did you write him a letter or call him? neel: i called him up. i met him once for 10 minutes. charlie rose he said come to : washington, let's talk. neel: i met with

like a boxing match. >> that's the new neel kashkari.you make of your new peer. >> he's a great guy. i'm glad he's joined the fomc. i appreciate that he took on this issue. you guys know that i've advocated thinking about breaking up banks and that i don't think we've solved the too big to fail problem, so, you know, putting a circle around this issue and getting the fed research staff in minneapolis, that's a great think. >> what do you think the answer is? do you think the banks are not safe enough right now? >> i'll give you a vision for what i think about this. what we've done with our regulatory environment -- course we had to implement dodd-frank. i thought we did a good job doing all that. what we've done is's esconced these big banks as if they are going to be here 50 or 100 years from now. you protect their position in the economy. how much innovation will you get out of that in the linkedin run. what i want to do is have many more firms smaller give up on the economies of scale. i'm willing to sacrifice some on economies of sca

minnesota fed president neel kashkari explains why he is open to breaking of the biggest u.s.anks. let's begin at the nba all-star weekend where stephanie ruhle went one-on-one with dallas mavericks owner mark cuban. mark: in silicon valley, they are in their own little world. they have insulated themselves, they have lost touch with reality. kids get an $8 million valuation, they raised $2 million, keep 75% of the company -- it is ridiculous. stephanie: what is going to happen? mark: they are getting written down to nothing. if you invest in 95% of silicon valley coming out, the minute you write that check and it clears, you should write it to $0 because that is what it is worth. they have no chance. some companies are good, but 95% are done before they start. 5% will be amazing. stephanie: marc benioff has been outspoken saying stop avoiding the public market. if you have a lead, go public, get testing. mark: i have been a proponent of that for a long time. what is happening in the market right now -- there is a dearth of high-growth companies. we look at facebook, netflix,

neel kashkari is a former investment banker; he started his career at goldman sachs, then joined theh treasury department in 2006, later serving as a key player in the government's response to the financial crisis as administrator of the t.a.r.p. program, which helped bail out the big banks. in 2014, he ran for governor of california as a republican, losing to incumbent, jerry brown. he's now president of the federal reserve bank of minneapolis, and joins us now. and welcome to you. so still too big to fail, you're saying, this is in spite of dodd-frank, in spite of all we've seen, you are suggesting a crisis could still happen and big banks would still need bailing out? >> yeah, unfortunately that's true. dodd-frank has made a lot of progress. the banks are stronger. they have more capital so they can withstand bad things happening. but if a big shock were to hit the u.s. economy, i'm afraid the taxpayers would still have to step in and bail out the banks, in my view, in my experience during the crisis we have not yet solved the too big to fail problem. and we do need to. >> brown:

tuesday, a discussion on the 2008 financial crisis with neel kashkari.peaks at the brookings institution on c-span2. later, the former u.s. ambassador to iraq joins the discussion on the lessons learned from a decade of u.s. intervention in iraq. see that live at 2:00 p.m. eastern on c-span2. [applause] cycle we aretion reminded how important it is for citizens to be informed. >> c-span is a home for political junkies. >> it is a way for us to stay informed. >> there are many c-span fans on the hill. my colleagues will say, i saw you on cspan! sure that people outside the beltway know what is going on inside it. >> next, a discussion on the the republican party and the legacy of ronald reagan. this is 40 minutes. r opposed that policy. our guest now is matt lewis, the author of two them to fail. b to fail. he is the cohost of the dmv show. he is also a cnn political commentator. thank you for joining us this money. this is the book "too dumb to -- thank you for joining us this morning. guest: somebody says something dumb or crazy or controversial in the

tuesday also we'll hear from a number of fed officials, including minneapolis president neel kashkari, and vice chair stanley fisher. that's what's to watch for coming up next week. >>> two updates on stories we recently reported. we told you about a small business owner who had his account seized by the irs via forfeiture. his lawyer just told him that the irs will be giving back all of his money. $153,000. >>> and then there's the story of the specialty pharmaceutical company insys therapeutics, the firm under fire again after a former employee's plea agreement revealed how it allegedly used doctors and engaged in illegal business practices in order to grow profits. the two doctors in question and the company were subject of an investigative report that we aired in november. tonight the new developments for us. >> reporter: the main revenue-generating drug is a highly addictive opiate, 100 times more addictive than morphine. according to the fda the drug is only meant to be used for persistent cancer pain. the company has come under fire for illegal business practices such as kickba

neel kashkari. >> thank you for the kind introduction. great to be back at the institution and i'd like to thank the center for hosting us here today. i want to thank you for coming out. we've got some tough weather. i appreciate you braving the elements for those of you here in the room and are distinguished fellow panelists, jerry stern, chairman bernanke and our long predecessor as well. thank you for being here. i want to remind everyone that the views expressed today are my own and i'm not speaking on behalf of the federal open market committee or the board of governors which sets regulatory supervision policy on the federal reserve system. today i will offer my assessment in the eye (-left-paren and the problem of too big to fail bank spirit i combat this problem from the perspective of a policymaker on the front on the frontline responded to the financial crisis in 2008. when congress moved quickly to pass the.frank asked in 2010, i strongly supported the need for financial reform, but i wanted to see the act implemented before a t

moving ahead, dodd-frank has required stress capital, all of the positive things happening, and neel kashkaris wait a minute. despite all of the progress we are still in the same place we were 10 years ago, too big to fail is still a problem in something has got to be done. tohink that view is going really resonate with a lot of people and it's not just the head of the minneapolis fed, as you point out -- the head of the banks city fed, a former regulator says, what is wrong with breaking up the banks? there is still a problem. fed.ead of the st. louis there is a divergence and views -- maybe not in the sense that people agree with the basic facts, but the people out in the field are saying something has got to be done. what can be rolled back at this point? this seems like a debate that should have happened years ago. what kashkari said was congress did not go far enough and a solution, has to be dealt with by congress, and i think with their research effort, they are going to hold conferences, they are going to bring in scholars, they are going to bring impossible alternative solutions such

on the 2008scussion financial crisis with neel kashkari and overseer of the federal -- of the reserveank of minneapolis. speaks at 10:30 a.m. eastern on c-span two. -- a discussion on lessons learned from a decade of u.s. intervention in iraq. 2:00 p.m. eastern on c-span two. >> road to the white house began in iowa did the caucasus date back to 1970 -- iowa. the caucasus date back to 1972. we really begin to test the candidates and their message. south, south carolina, the first southern primary. then caucasus in nevada for democrats and republicans. we will see a number of candidates drop out of the race. it will narrow. of winnerday, restart takes all primaries it will be critical. we watched that delegate count continue, we get a better sense of whose message is resonating and was on the path to the nomination. path to thes on the nomination. >> former president george w. bush was on the campaign trail jeb bush in south carolina. the event at the north charleston coliseum is the first time the former president and his brother appeared together at a campaign event. this is an hour.

the banking sector in minneapolis federal reserve president neel kashkari. >> i believe the act did notugh. the biggest banks are still too big to fail and continue to pose an ongoing large risk to our economy. date from the goldman sachs executive. bernie sanders was

we got a lot of regulation. >> neel kashkari.esting. >> where did that come from? >> look, can i say something about that? >> the floor is yours. >> thank you. i watched your show and i watched him on and i always had a lot of respect for him. i think he did a good job, he's very articulate, smart guy. itches surprised with his comments very much. i hate to say it but i thought it was almost a little political. you know, i think bernie was really going high at that point and i think -- that's the only rationale i can make for it. hit to be -- the last little political -- >> he was a republican. he ran for governor of california. >> when we get a democrat president. you think that's the last job he wants? >> so you think this was neel trying -- >> i don't know. that was a surprising comment. i think it was somewhat politically motivated. and i don't this he's right. i really don't think he's right. >> because? >> look, first of all, you know, it's very wonderful to say the banks are too big, got to break up banks. first of all fro

nobody heard this from neel kashkari before.d president whose region has no too big to fail banks in it that they would choose to -- >> you could call wells fargo a too big to bank. >> you could. >> it's not the same. it was surprising to everybody. >> what do you make of this poll. some suggest bernie sanders is ahead of hillary clinton. >> i still don't think bernie sanders gets the nomination. but in nevada they are tied. >> and oregon. >> sanders is doing well. south carolina hillary will win big. she will start to rack up delegates on super tuesday. we say the national numbers don't mean that much when it's state by state contests. he's giving her a much better race than anybody expected. >> you can say illinois if you want. we don't care. >> what do you think -- >> where is she in south carolina? how ahead? >> 20 points, 25 points. >> nevada it's tied. >> nevada polling is notoriously unreliable. we don't cho who is doing what in nevada. they had romney losing big. >> super tuesday is what's the date? >> march 1st. >> no w

. >>> and also ahead, newly minted fed president neel kashkari calling on the banks. one fed president says that's way too extreme. >>> and investors are bingeing on food stocks on today's rally. three names hitting all time highs. yummy. when "power lunch" returns. [plumber] i need to be where the pipes are. so i use quickbooks and run my entire business from the cloud. i keep an eye on sales and expenses from anywhere. even down here in the dark i can still see we're having a great month. and celebrate accordingly. i run on quickbooks.that's how i own it. >>> it is absolutely understandable there are people who want to have their conversations and their messages encrypted and to end encryption. they're not breaking the law. and they just want to keep their messages private. that's totally understandable and want to do it in good faith. it is also true in modern america and the modern world, some people want to take advantage of the evolving technologies that can be encrypted and kill us and bring our buildings down. >> that was u.s. attorney for the southern distric

minnesota fed president neel kashkari explains why he is open to breaking of the biggest u.s.et's begin at the nba all-star weekend where stephanie ruhle went one-on-one with gallus mag writes -- with dallas mavericks owner mark cuban. mark: in silicon valley, they are in their own little world. they have insulated themselves, they have lost touch with reality. kids get an $8 million valuation, they raised $2 million, keep 75% of the company -- it is ridiculous. stephanie: what is going to happen? mark: they are getting written down to nothing. if you invest in 95% of silicon valley coming out, the minute you write that check and it clears, you should write it to $0 because that is what it is worth. they have no chance. some companies are good, but 95% are done before they start. 5% will be amazing. stephanie: marc benioff has been outspoken saying stop avoiding the public market. public,ave a lead, go get testing. mark: i have a neighbor, -- i have been a proponent of that for a long time. what is happening in the market right now -- there is a dearth of high-growth companies

minnesota fed president neel kashkari explains why he is open to breaking up the biggest u.s.in at the nba all-star weekend where stephanie ruhle went one-on-one with dallas mavericks owner and noted tech disruptor mark cuban. mark: in silicon valley, they are in their own little world. they have insulated themselves they have lost touch with reality. you have kids that graduate from this school or that school with an idea that they get an $8 million valuation, they raised $2 million, keep 75% of the company -- it is ridiculous. i have been saying it for a long time. stephanie: what is going to happen? mark: they are getting written down to nothing. a lot of them are going out of business. literally, if you invest in 95% of silicon valley's coming out or have come out in the last year, the minute you write that check and it clears, you should write it to $0 because that is what it is worth. these companies have no chance. stephanie: no chance? mark: some companies are good, but 95% are done before they started. 5% will be amazing. stephanie: should more be going public? marc b

neel kashkari. >> thank you, david, for the kind introduction. it is great to be here and thank you to the hutchinson center for hosting us here today. thank you all for coming out. i know that there is some tough weather, washington has been hit a lot. i appreciate you bringing elements. and artist in which fellow panelists, gary stern, don cohen, chairman bernanke, and bruce. thank you all for being here. i want to remind everybody that the views and exposing today are my own and i not speaking on behalf of the federal open market committee or the bird of governors which sets regulatory and supervision policy on behalf of the federal reserve system. today, i will offer my assessment of the current status and outlook for ending the problem of too big to fail banks. i come at this problem from the perspective of a policymaker who is on the front line, responding to the financial crisis in 2008. when congress moved quickly to pass the dodd frank act, in 2010, i strongly supported the need for financial reform. but, i wanted to see the act implemen

the new minneapolis federal reserve president neel kashkari couldn't scare off the bulls or buyers. he said in first federal reserve speech today that the big banks should be broken up. sliced and diced. some too big to fail, in a nod to taylor swift and grammy win, financials are taking off with goldman sachs and morgan stanley moving higher, is the rebound real or just a bargain-hunter bounce? to the floor show, keith mccullough is joining us live. traders at the new york stock exchange, cme group and the nymex, too. first to you, doreen, is this just a basic bargain-hunter bounce? >> i'm not as excited about it as it looks. i should be. this is a very polarized market, opinion by traders and today is a day if you thought there was money on the sidelines that you could use, value created in the techs and the financials, people are doing bargain hunting, we had an oversold condition basically and provided an opportunity for people. if you are on the other side of the aisle, you know, this is an opportunity to sell and wait for the next move down. liz: you're speaking keith's langua

minnesota fed president neel kashkari explains why he is open to breaking up the biggest u.s.n at the nba all-star weekend where stephanie ruhle went one-on-one with dallas mavericks owner and noted tech disruptor mark cuban. mark: in silicon valley, they are in their own little world. they have insulated themselves, they have lost touch with reality. you've got kids, because they graduate from this school or that school with an idea that they get an $8 million valuation, they raised $2 million, keep 75% of the company -- it is ridiculous. i have been saying it for a long time. stephanie: what is going to happen? mark: they are getting written down to nothing. a lot of them are going out of business. literally, if you invest in 95% of the silicon valley's that are coming out or have come out in the last year, the minute you write that check and it clears, you should write it to $0 because that is what it is worth. these companies have no chance. stephanie: no chance? mark: some companies are good, but 95% are done before they started out of silicon valley. 5% will be amazing.

minneapolis fed president neel kashkari. home depot and macy's report earnings before the bell. >> a tale of two very different retailers. jpmorgan chase will take the stage for its investor day in new york city today. shares of the banking giant have fallen around 12% so far this year. today is the one day a year investors get to look into the vault. landon dowdy joins us with three things to watch. >> good morning. ceo jamie dimon and his top executives will pull back the curtain on their businesses and lay out strategy targets today. here's what to watch. first, how the bank will keep costs under control without hurting revenue growth. jpm is not expected to expand cost cutting but is more broadly shedding staff to adjust to leaner profit margins and tougher regulation. second, how the bank is reinvesting in the business. dimon warning in his annual shareholder letter last year that silicon valley is coming with hundreds of start-ups with a lot of brains and money. working on various alternatives to traditional banking. t

neel kashkari was on cnbc and here's what he said. >> progress has been made.e have a stressed economic environment and multiple banks are in trouble at the same time, government will have to step in and bail them out. i don't think that's an answer that people are going to find acceptable and so now is the time to consider more transformational solutions, break up the banks is one of them. >> pete. >> he's talking about some solutions, i think, you know, a lot of folks out there, because it gets all the headlines, he says we ought to break up the banks, that's one of the possibilities he has to look at. he's talking about the big banks -- >> not the first to suggest that. >> no, but he and this group for minneapolis that he's put together there all talking about, hey, look, we're going to put this together and go through all different types of scenarios. >> didn't cyndi wile on this network at least a year ago say the same thing? >> after building one of the biggest. >> they have broken up. we have accomplished this with -- to some extent dodd frank and now th

president neel kashkari has called for greater regulations of u.s. banks.also floated the idea of breaking that up to protect the economy from another financial crisis. >> significant progress has been made to strengthen the financial system, that i believe it did not go far enough. i believe the biggest thanks are still too big to fail and continue to impose an ongoing risk to our economy. is due inid cameron brussels tomorrow for the second time in 48 hours. he won the backing of german chancellor, angela merkel. rotatingr of the eu's currency says this was a good basis for a deal. president barack obama says donald trump won't be elected president. he says the republican primary campaign has alarmed foreign audiences who expect the u.s. to lead the world. president obama: trump will not be president. i have a lot of faith in the american people. i think they recognize that being president is a serious job. hosting a talk show, or a reality show. it's not promotion. it's not marketing. it's hard. nejra: global news, 24 hours a day powered by our 2400 jour

bernie sanders was delighted by neel kashkari's news. i'll talk about that when he joins me next hour. we're watching the oil. opec members to convince iran to agree with the production freeze. oil prices up another 2% putting firmness under equities as well. we are expecting another hire opening for broader averages after 220-point rally. dow industrials up 100 this morning. nasdaq higher by 20 points. this morning ppi which measures wholesale inflation. a couple of economic reports likely to set the tone. in europe this morning, markets post strong gains as stocks rise. they are up one point -- the dax and germany up almost 2%. in a shack, concerns about the oil output for its weight on some areas. the shanghai composite in china was up after the regulators much to support financing for the real economy. the nikkei was down one and one 3%. hong kong also weaker. a new top dog cj. beating three dozen other dogs. >> i was rooting for the german shepherd. maria: more and not coming out. president obama weighing on the political fate of do

neel kashkari undoubtedly has his own agenda what he wants to focus on.a different background than the other people on the committee and certainly than me because he worked so hard on those issues when he had that other authority that he had before. so we'll watch this develop. he's an articulate spokesman. he's picked an issue that he wants to drill down on. i would prefer personally if he focused on monetary policy but we'll see what he wants to do in his new role at the minneapolis fed. >> okay. thanks, richard. we got run. what happened you were somewhere and came over. >> you can see i have a little tan. i've been in god's anti-chamber which was florida. i was sitting in a bar preparing to go to sleep before giving a speech. an elderly couple was sitting near me. and the man said, my god, there's that guy from cnbc. gets up with his elderly wife. they are both in their 90s. he comes over and says glow, which i guess is gloria i want you to meet a famous television star, i want you to meet joe kernen. >> i was his favorite. you're a good looking guy.

neel kashkari, you may remember when he was young he ran the ta t.a.r.p.s age had nothing do with it. he ran for governor of california. he's president of a financial bank in minneapolis. he's on a media blitz. the headline has been and i think we may have it that he's calling for breaking up the banks in his believe that the government should not have to step in and bail them out again and if we had a stress tech environment that would be the case. do we have it? let's have a listen. >> i want to be honor west the american people. yes, progress has been made but if we have a stressed american market the government is going to have to step in and bail them out. i don't think that's an answer people are going to find acceptable and now is the time to consider more transformational solutions. break up the banks is one of them. some mentioned turning them into utilities by putting so much capital in them that they can't fail. >> that's disastrous. making them utilities. utility doesn't work. tax obviously is a nonstarter that. i could print the capital market

. >> jim, neel kashkari says we should give serious consideration of breaking up large banks into smallerortant entities and turn large banks into public utilities by forcing them to hold so much capital that they virtually can't fail. where does policy risk fit in all of this? >> i believe it's a risk. i would say the risk of a bank being broken up at this point is not that high. that sort of thing would hurt any business alliance where there's synergies between businesses. a lot of people would say that's a positive. banks would get higher multiples, hold less capital and they would be more profitable. as far as banks as utilities, we've gone a long way in that direction already. if you look at returns on equity, the banks are not going to be able to earn the returns on equity they have seen in the past. even a fair return on equity, a utility utility r.o.e. of 10%, the banks look attractive. >> thanks for joining us. jim sinegal joining us. >>> the death of supreme court justice scalia adding a new issue to the election year. the obama administration and senate republicans battling ove

. >> yeah, again, perhaps this is something that, you know, neel kashkari had just run for office.t's something you hear from the bernie sanders and the others about the evils of these banks. has it become so engrained that it's obvious that something further needs to happen? >> well, i think it's pretty obvious that we've nationalized the banks in the united states. we haven't sold the stock to the government but in every other aspect the government runs every part of the banking industry in this country. it's gone well beyond simply nationalizing them. because the banks are perceived to be owned by the government, the government passes bills like the transportation ajt which dips into the profits of the bank and gives it to other parts of the economy. it dips into the properties of fannie and freddie and gives it to other parts of the economy. it's simply assumed. i don't care whether you're bernie sanders or whether you're, you know, richard shelby running for re-election in alabama, it assumes anything you say which is negative to the big banks is positive to the united states.

. >> let's get your reaction to remarks of neel kashkari a former associate of yours in calling for potentially the breaking up of large systemically important banks. how do you react to that? >> so i think you look at his speech. i very much agree with the approach that he takes of let's try to do some cost/benefit analysis. i don't think we've done enough cost/benefit analysis on financial regulation. he also focuses on a lot of subsidies to leverage in the system. he says we should rethink those. and so i completely agree with his goals. i'm not sure that the most effective way to make the system more robust is to break up the institutions. if you look back to the 1930s, we had restrictions on banks branching across state lines. we had more than 20,000, 25,000 small banks. didn't prevent a collapse, and the great depression from coming because you had correlation and that's really the key. you want to look for the risks of correlation in the -- across institutions or across asset classes. size of institution might be relevant, but the key thing is the correlation. i'd really focus -- >> are

off camera we were talking about neel kashkari. >> i was disappointing to hear kashkari call for the fail. and then to suggest they ought to have a financial tax imposed upon them to have a 25% capital to treat them like utilities. that's way off base. as a minneapolis fed guy, frankly i think this is out of his realm. even if it isn't, i couldn't disagree more. >> i think it's more in his realm than managing stocks at pimco. he might be much better at this minneapolis gig than that. >> i would suggest that he needs to concentrate on his focus, and what his job really is. he might be right about this, but i don't see it that way. >> he ran for governor of california. breaking up the banks is a popular thing to say these days. >> but he also lost in california. >> he can also try again in this country. >> i think the banks are consolidating, north carolina, south carolina and florida should be bought by the banks in the north and follow where the money is. the money managers are a surrogate for the stock market. one time i recommended legg mason, which doubled from 28 and now back at

neel : that was kashkari.ll not be a voting member until 2017 and will get a chance to air his views for meetings for more on what his remarks say as an inclination as a policymaker, something i'm starting to learn. we'll bring in the commander in chief economist for bloomberg intelligence. karl, i'm throwing first to a chart i just now made in my bloomberg. neel was talking about labor force participation rate. he wants to make sure that if we keep unemployment low more people will get into the work force. i looked at a long term tracker going back to 1950 and a little bit cheap -- you see the trend and you see the teenie tiniest dip up the last two quarters. my question there, hope, question mark. answer? karl: so the challenge here is to separate the structural from the cyclical. if you look from 1950 to the peak in 2000, you know, there was a lot of factors there but one major factor was women entering the labor force to a much higher degree since there are these big increase in labor participation and ima

wessel: neel, do you think it is correct to characterize the u.s. economy on life support? mr. kashkari: no, i think we have come a long way and the economy is stronger. if you look at the statement in january -- that was my first meeting. mr. wessel: did you say anything? mr. kashkari: i did. can you imagine me being quiet? the economic outlook is for moderate economic growth. if the reality ends up at the outlook, i think we will be heading in a better direction. mr. wessel: over here. >> thank you, very much. a lot of interesting points here. i'm going to go one step further. i think the regulatory agency has failed us miserably in the last crisis. do you believe they have been rehabilitated enough to get us there another one? my real question is, are we over engineering these regulations? it seems to me that maybe people should have looked up the on their computer models -- beyond their computer models and actually see what was going on on the ground. prices went up, wages were flat, mortgage rates, nobody questioning that. maybe we have to inject more common sense than regulation i