john paulson and others. but behind it all, what propels it all is sort of a con none drum that it shouldn't have been john paulson and the invs. tours that i it all is sort of a conum john paulson and the writers i write about. obviously the greatest investor of the past century or so, he could have done it. he didn't do it. mike is a expert in mortgage-backed securities. that's what john paulson threw himself into learning about and analyzing and betting against. jim is the most famous short seller out there. this trade is a short sell. and jim didn't do this trade. david tipper who is someone i wrote about more recently he made $7 billion last year. he is known for his big trades. big debts. he's okay with big trades up and down. very volatile trade. that fascinating me and continued to do so. it wasn't the big group of big names on wall street. those that did it include john paulson as i mentioned, just to tell you a little bit about john paulson. he spent a career on wall street, he went to nyu, undergra

paulson took his call. paulson said the only job i really have here paulo is an analyst one and wants somebody to whom we went to business school. he said i would like that job. he ended up joining paulson and company baath and again unlikely to years later in the fall of 2007 he was on vacation with his third wife. [laughter] talk about the greatest trade ever. [laughter] he is on vacation with his new wife and i are in saint barts and is stopped to check the atm. she didn't just get the money, and he had told his wife too much about the trade there were working on. he's a little superstitious and didn't want to jinx it too much. he should have made awareness, but there aren't many details. so she is at the atm machine checks and says palo there is $45 million in our account. at that time he had very little money in the bank account which was shocking, that was part of the $175 million that he made as a bonus for that trade for the year in 2007 so he goes from having nothing really in a one-bedroom apartme

frank paulson, since nobody else -- say what you will, but anybody who knows hank paulson knows he'sood, decent man with a remarkable background. hank paulson wasn't misleading anybody. he was telling everybody what had to be done. he is the guy that had to go to george w. bush and say, you know, you may not want to call it a bailout, mr. president. i was against it, but i have to say, don't blame this on hank paulson. a good, decent man who did what was best at the time. >> what we saw from senator mccain is part of a bigger problem when i hear republicans say, let's just start over. it's better to start over. i don't believe it. i think they are just trying to kill it, i really do. >> you are correct, mika. >> a very compelling argument that mccain was making on "meet the press." let's just start over. i don't believe anybody. >> well, it is such a horrific bill in every way. >> well -- >> it is a terrible bill. >> joe -- >> there is nothing in it that you could get your arms around? nothing? >> no. because it doesn't contain costs. as politico said last week, he pushed tax increas

paulson. deals, presented by myself, mr. paulson gerlach and lance. essentially it will strike section 1405, the excise tax on medical device manufacturers. simply strike that tax and essentially the offset would be $20 billion from an obligated stimulus funds. this is a very big issue where i live. i have many people in my district who are employed in the device manufacturing business. this is a jobs issue. plain and simple. i have companies like olympus headquartered in my district, probes and scopes, very concerned by this legislation. a small manufacturer that makes rapid hiv and aids diagnostic equipment that you find instantaneously. these are the types. finally a german company headquartered in my district. they are very concerned with their 2000 employees in effect they have gone so far as to refer to this as the death tax. that is how serious they are about this. and about how this will cost them $23 million, just as one company in bethlehem, pennsylvania. they say this tax is 100% cash flow. they will reduce employee spending. that means lay

explain. >> guest: there's no question in my mind that at times secretary paulson and president bush said look, we are in real distress and we can have a financial calamity, it was essential to do something to provide confidence to the people around the world that america was not going to have all with its banks go under, and i think there was a very real risk we would have a cascade of the bank failures first with the big ones and then throughout the country and we could ultimately have virtually every bank in the nation go out of business and people say things gone, the dollar worthless. we could have had a true financial system calamity and t.a.r.p. kept that from happening but it wasn't implemented terribly well and i don't mean to say that secretary paulson did it perfectly and secretary geithner did terribly. i'm sure they both made mistakes and both did things well. but undersecretary geithner who's been the champion if he will or the master of this a long period of time well over a year the process has been relatively opaque as to what banks got money and how they got it and

paulson is recognized for five minutes. >> the document you sent contains the statement. whee recognize bank supervision, including ours, needs to be more effective, and we will review our performance at multiple levels. i just came from a meeting with multiple bankers, and they talked about money for credit, and they want to lend it out, and their overwhelming concern was in regards to the uncertainty of regulators. these regulators are being inconsistent in a sense that when they come visit of thank, their demands are essentially preventing to loans from current -- preventing good loans from being made. i think every member of this committee raised this issue, and they've responded by saying they have told the people in the field to take a step back in regard to what is happening, so there is still a disconnect. i met with 37 bankers, and it seems nothing has changed in recent times regarding the examination. what can the federal reserve do better to create some consistency for the bankers so credit is being put out in the market? >> this is one of our top priorities. w

so that you begin with that there will not be the kind of dilemma paulson said he faced. we begin by the assumption we'll pay only those debts that are necessary to present a totally spiraling downward and that is where the fund would be used and it's hardly a bailout. there will be no more aigs. if they have to use some of the money to pay off the debts of a failed institution, the shareholders are gone, everybody wiped out. a very different situation than the past. >> do you hold optimism about republicans on this particular issue versus health care because in a sense the bailout started during the bush administration. >> well, i think barney said it well and, again, maybe i'm a minority of one on this view. i would hope after yesterday those republicans who i think reluctantly went along with the just say no are against everything are finally going to step up and say, that's over with. we didn't get elected to sit around and say no to everything. we want to be part of a solution. frankly, if the leadership tells us no on everything, we're going to walk. i'm more hopefu

henry paulson was right when he was saying that the sky was falling, metaphorically. the sky was falling. it was not his doing. frankly, even though everyone likes to come down hard on goldman sachs at the moment -- my new book is about goldman sachs, i wanted to make sure the people understood that -- they were better at understanding the risks than the rest of wall street. not much better, but better as a relative matter. as i said before, this was a crisis that did not have to happen, completely avoidable. wall street executives talked about it before, testifying in front of congress, they thought it was a once in a lifetime tsunami. i completely disagree with that, they knew exactly what was going on. they could easily have prevented this from happening. they may have had to laugh off 5000 employees that were dedicated to creating and manufacturing, selling toxic securities we have now come to know and love. it was entirely preventable. they did these things because they were making so much money from them without any accountability. they were paying themselves th

paulson of minnesota being joined by mr. gerlach of pennsylvania and new jersey and mr. dint of pennsylvania, who was also in attendance today, which would remove the medical innovative tax and replace it with on obligated stimulus funds. >> you heard the gentle eyes motion. any discussion? if not, the focus on the motion by mr. sessions. all in favor, say aye. opposed, no. in the opinion of the chair, the noes have it. >> madame chair, may i ask for a recorded vote, please. >> recorded vote. [roll call] the clerk will report the totals. the motion is not agreed to. mr. sessions. >> thank you. i have an amendment to the rule and move that the committee make an order to provide the appropriate waivers for amendment number 89 offered by the gentleman mr. dent of pennsylvania, which would add a new decision title "ending defensive medicine and encouraging innovation." >> you heard the gentleman's motion. any discussion? if not the vote occurs on the motion. all in favor, say aye. opposed, no. in the opinion of the chair, the noes have it. >> madam speaker, recorded vote, pl

paulson delivered the t.a.r.p. money in that secret meeting of the nine in the fall of 2008.way, today we get another fun example of the very, very thin line of our politicians and the finance industry. democrat jon corz ierng just one example, accumulated a fortune as a chief executive at goldman sachs, which he then used that fortune to get into politics because we all know that money is how you -- right, right? anyway, so then he sort of takes that walk, right? i'll see you later. this is fun. i'll see you in a second. i'm going to government. he, then, does his work in government, returns, and then won the governorship and all of the rest of didn't. he didn't. we've lost. you know this. corzine's announced he's heading back to wall street of the new executive specializing in futures and derivative trading. now corzine's not a regulator but it goes to show how advertise is for finance professionals to move between the two worlds. you go to wall street, you pick up the cash. you then buy your way into politics. potentially take care of your friends. they certainly have chan

paulson becomes secretary of the treasury.sked for permission to negotiate with the congress whom he admires over the objection of many others in the white house. he is negotiating with me, in the next election, the democrats got a majority. he points out in his book that he -- we passed a bill that he said was far from perfect, but was still better than the republican bill in 2005. i apologize to the judgment from new jersey. i thought he was saying it was the democrats that had done this. he is talking about the democrats at the republican leadership. i do remember this, they were outvoted by the democrats and some republicans. in 2005, the records are all here, no amendment either in committee or on theloor and that making the bill tougher on fannie and freddie that received a majority of republican votes past. in other words, the bill that passed committee on the floor -- in no case did a majority of republicans get overwritten because the minority of republicans were with the democrats. that is history, and we have to go

over the timeline, our rate would still be rising by early 2012 and as ben bernanke and henry paulson said, if dramatic action was not taken to break back the recession, the united states could spiral into another great depression. these are experts, these are economists, these are people who have distinction and recognition all around the world. and it's important that we recognize that we had to take swift action here. in the fourth quarter of 2009 the economy grew by almost 6%, 6%. job losses for the fourth quarter of 2009 were 1/7 of what they were when we took office, mr. speaker. the nonpartisan center for budget and policy priorities said that keeping the american recovery act, keeping more than six million americans out of poverty and reducing the severity of poverty for more than 33 million more. you can imagine what it would be like if we didn't enact a robust policy to extend unemployment benefits, to extend coverage for health care so folks could keep their health care during this time of great need? could you imagine if we didn't help our people, what kind of condition we

paulson becomes secretary of the treasury.e asked for permission to negotiate with the congress whom he admires over the objection of many others in the white house. he is negotiating with me, in the next election, the democrats got a majority. he points out in his book that he -- we passed a bill that he said was far from perfect, but was still better than the republican bill in 2005. i apologize to the judgment from new jersey. i thought he was saying it was the democrats that had done this. he is talking about the democrats at the republican leadership. i do remember this, they were outvoted by the democrats and some republicans. in 2005, the records are all here, no amendment either in committee or on the floor and that making the bill tougher on fannie and freddie that received a majority of republican votes past. in other words, the bill that passed committee on the floor -- in no case did a majority of republicans get overwritten because the minority of republicans were with the democrats. that is history, and we have t

we'll also talk to jim paulson of wells capital management, scott black of delphi management. yesterday we talkeled the v-shaped recovery. today it is jobs and getting america back to work. it's all about how big companies are bringing jobs back to the states. so find out how it could be a factor for the midterm races on capitol hill. also banking market ranking member senator richard shelby, he sent a letter to treasury secretary geithner with his objections to the reform bill. he's going to talk to us today about the changes that he would like to see made with the changes. plus we take a trip to six flags. the ceo of the amoouz amusement park operator. "squawk box" is coming up at the top of the hour. it all starts in just a few minutes. ross, you did a very good job as a wax figure. i liked it. >> i can do that. thank you, becky. >> it was good. sure. >> he did very good. ahead of today's trading, ben lichtenstein, president of tradersaudio.com joins us again from the cme. what do you think it's going to be like, brief into eu politics? >> yeah. well, there's a couple i thi

hank paulson went in there guns ablazing in 2008 with no plan for an exit strategy and now we're kindf stuck because as you say we're so dependent on fannie and freddie for the housing market, and the economy is so dependent on the housing market that congress is unlikely to do anything dramatic this year. so today i think secretary geithner will set the table for debate that won't really take place until next year. the whole process, i think, we're looking at five years, maybe longer, to transition to a successor to fannie mae and freddie mack or change mac or agen agencies. >> sherry, is there any way that will happen, do we have the financial capacity? >> i agree with howard it will be a long haul because if you look at how much sort of distress is in the pipeline and how much government debt is out there and how much these gses are indebted now it a long haul before they're ever going to be independent of government. but the republicans on the committee have already laid out a five-goal, ten-point plan toward privatization so it will definitely be part of the discussion. congressm

discussions taking place with strategic economic dialogue talks started by the former secretary treasurer paulson, but this intensifies discussions between the two countries, and if there is no progress there, threats of sachk shuns and a turn to the world trade organization as a sort of neutral arbitrator for this dispute. >> okay. ron insana, threats of sanctions -- could that spark a trade war that is a path that we don't want to go down? is there another route? >> yes, i agree with david, we should deal with them harshly, but i would do it privily, because the chinese like the japanese don't respond well to public pressure. you remember in 1986 when the congressman snashed a toshiba television set on the steps of the capitol in protest of the japanese manipulating the currency to make the exports cheaper here. it is the same argument here. if i were the obama administration, i would go forcibly to beijing and say, you tried to name us as a currency manipulator and that is absurd. do you want to engage in these practices or revalue the currency which is anti-inflationary and something they are

speaker, but this $700 billion tarp proposal that came from the secretary of the treasury, henry paulson, his request was for immediately $700 billion, no strings attached, and he would spend the money as he saw fit and he was the only one that could save our economy from going into a downward spiral and the global collateral and the global currency from crashing. well, this congress pulled it back, held it to $350 billion, i voted no on each component of that because i believed that there wasn't any entity in this country that was too big to be allowed to fail, that we should simply let them fail, because if we do so, it would remove the implication, the interference frat federal government was going to provide a guarantee. and if they believe that it's implicit that the federal government will bail out companies that are too big to fail, then they take greater and greater risks and the markets don't work anymore because they're propped up by the government. so wall street bailout, i stand here, mr. speaker, and about half of my republican colleagues stood with me each time opposed to t

sacks full of research to write about this calamity, he had no interest in treasury secretary hank paulsonn bernanke or the c.e.o.s of wall street's big investment banks, who he believes had no clue what was going on while it was going on. he wanted to tell the story through the eyes of people who were paying attention and who knew that a financial disaster was inevitable. >> lewis: but there are a handful of characters who actually had seen it coming and made a fortune off of it. and there were so few of them, and there were so many people who had been on the other side, that i thought they... that i kind of wondered who they were and why they got themselves into that position. >> kroft: what they saw. >> lewis: what they saw, almost more, how they saw. >> kroft: how many people were there, do you think, in the world that understood what was going on? >> lewis: between ten and 20 investors at most, and this is from the universe of tens of thousands of people who could have conceivably made that bet. >> kroft: the first one to see that something was seriously amiss in the burgeoning sub- p

allison was not present at that time and the decisions at that time were made by secretary paulson and his team, but these events have helped define t.a.r.p. from its inception. the citigroup bailout and bank of america bailout that followed and was modelled on it raised and continued to raise serious issues of transparency and equitable treatment of various size and political clout. more recently, up until december of last year, citigroup's regulators were unwilling to allow citigroup to repay t.a.r.p. funds, thus emerge from t.a.r.p.-related oversight. the regulators reversed themselves in december 2009 and citigroup completed a common stock offering whose proceeds were used to repurchase the government-owned preferred to being that nod only been converted to common, but the government was left as citigroup's largest common stock holder. now, today, in the aftermath of that transaction, it appears clear the obama administration treasury department managed t.a.r.p.'s holdings in citigroup to effect what is a limited balance sheet restructuring. effectively requiring or inducing citigr

. >> host: it is interesting to go into the specifics you praised secretary paulson and the bush should lustration for helping to build up the bank's, the t.a.r.p of money but then you are highly critical of secretary geithner for continuing what looks to be the same policies. explained. >> guest: no question in my mind that at the time president bush said we are in real distress and we could have a financial calamity. it was essential to do something to provide confidence to the people around the world america's banks would go under. there was a real -- very real rescued have a casket a bank failures and we could all smelling have virtually every bank in the nation go out of business and the savings gone and the dollar worthless we could have had a true financial system collapse and t.a.r.p kept that from happening but it was not implemented terribly well. i mean to say senator paul send it a perfectly as secretary geithner did it entirely terribly. the both made some mistakes and did some things but under geithner was then said to be and or the master for a long period of time, over o

lending money they did not have and then keeping that secret and then hiding that fact by having hank paulson and others stick that risk at the american government while allowing executives to keep money and go without being investigated. quite simply, if we eliminate the capacity for banks to keep secrets and if we eliminate the capacity for banks to secretly move risk off their books, you won't have these problems. this one is as easy as transparency and accountability. i can tell you that the house bill doesn't come close to doing what i just described and neither does the draft version of senator dodd's bill but thankfully we do have you, jordan and jane, and so many others everyone knows if you keep secrets and hide things, even if you're 5 years old, that's bad. it's a great way to steal money but not a great way to run an economy. >> we need real reform. >> no more secrets. this one is easy. just ahead, a sand storm sweeping through chainina. incredible weather on the other side of the earth here. today's by the numbers on this chinese sand storm and new york governor david paterson he

you voted for it but you said you were misled by former treasury secretary paulson. >> we were all misled. he said that they were going after the toxic assets with the housing market. he testified that. we were all misled so. what did he do then? they started pumping money into the financial institutions. now the financial institutions are fine. wall street's doing great. main street is in deep trouble. in my home state of arizona, 48% of the homes are under water. in other words, they are worth less than the mortgage payments people are making. >> 25% unemployment you would have had. >> he said that they would be going after the toxic assets which were the housing market. and that's what his testimony was, that's what he pledged to do. and to the american people and the congress, and they turned around and -- it's a matter of record. it's reported in all of the media. they switched from trying to address the housing to bailing out the financial institutions on wall street. whoever thought that we would when we passed that we would own general motors and chrysler, gmac. it's beyond what a

have been but believe me, if the banking system had imploded-- which it would have had secretary paulsonrman bernanke and secretary geithner with the president's strong support not stepped in and taken some very tough and very unpopular decisions we would have been in deep trouble and i've always given him accolades for that and i continue to. >> rose: that was government intervention you liked. >> it was necessary. you know, it was totally against my strain as a conservative, but i was the guy who negotiated for the republican senators and we realized that we were in a totally unique situation. we had never seen anything like this before as a nation. even during the depression i'm not sure that this type of an event had... could have been characterized because the financial industry was so large that we were dealing with here. and we just had to think outside the box in order to save this country and save the fiscal situation of this country and really of the world. >> rose: here's what the president said. "every once in a while a moment comes where you have a chance to vindicate all th

president bush and secretary paulson had the same view in their proposal.f the current view has that judgment. >> the federal reserve was really responsible for writing the rules and regulations. >> i think that's the point. i think that you want bank supervisorers worrying about liquidity. you want them focused on those core things. you don't want them having spent a bunch of time having worried about consumer protection in that job can be better done by a -- an independent consumer agency. >> i guess i see it gively as with the g.s.e.'s and the bank industries, the consumer regulations and the other regulators was separated and it didn't work. >> again, i respect that view. but in fact, the g.s.e.'s played a generally quite responsible role in what they do did3f in establishing standardized mortgage products and generally they held to better underwriting standards than was true of the private market. so i don't see the failure and success of the g.s.e.'s has undermining the argument from safety and soundness supervision in banks. >> does it create a dupli

guest: the same thing we said to secretary paulson and now secretary geithner. they need to purchase these homes. the best thing is to do is to no longer believe it to the banks or the investment companies, or the government sponsored agencies, to decide to do something or not. go in and take these loans out. you get them at a reduced value. they are no longer worth what they were. just forced the modification, the refinancing of these loans. -- just force the modification. at least then we are no longer waiting for this voluntary participation from the lenders. you are going in and making sure that there are as many as possible. loans that are just morphed into these predatory loans -- you could immediately take all those of the table by refinancing those loans. the other piece of this is for people who are looking at their home and they are saying my home is nowhere near the value of what i pay off my mortgage. i guess i should just get out from under this mortgage and leave this house. that's a big problem for the government. going in and taking these mortgag

, to secretary paulson in february of 2008, you must have mandatory compliance in this program. you're not going to get the principal -- >> let me. >> no may take you to difference. >> okay. thank you very much. thank you, mr. chairman. >> and i chilled five minutes to the gentleman from maryland, congressman coming. >> thank you very much. i think about with what all of you are saying. we have two people in my office that norman do foreclosure prevention. that's all we do. and it's a big problem. mr. barofsky, what, if anything, presents a lender from deciding midway through the hamp process that the $1000 or whatever might be incentive, payment is not worth the company's resources and just a the heck with it? the reason i'm trying to figure out how do we get to this effectiveness and efficiency? because it seems like we have a program here which we want to work. we think should work. but when we scratch the surface, it's nothing -- it's not working. so we got the money, but we're not spending the money. and mr. calabria said it will cost us, it's costing us $400,000, thus the

james carville >> gregory zuckerman, senior writer at "the wall street journal" talks about john paulson whose hedge fund may may $20 billion by betting against the housing market in 2007 and 2008. mit sloan school of management cambridge massachusetts holds the 50 minute event. aflac >> thanks very much. i appreciate the opportunity to come speak about my book, a passion of mine, it's is my baby and i love talking about it and still find it interesting so i hope you do too. i'm going to talk a little bit about the lessons from the research behind my book and i'll also talk a little bit about what's going on now on wall street and some of the daytraders that i cover date today, what they're betting on, what they are betting against. and i will be some time for q&a. i also find in these kind of settings people have an interest in discussing journalism, financial journalism per se. perhaps, wall street journal and what we're focused on, those types of things. so feel free to kind of ask about the book or any of those kinds of questions as well. my book is called "the greatest trade ever."

figures i saw from the government which were 2008 showed that 35,000 public schools -- 30 come 35 paulson, somewhere in the range of about one-third of public schools had been notified under the federal rules they were failing schools. now as we get closer to 2014, as long as wall is on the books that number has got to go up because the schools are not going to reach 100%. they are far from 100% and that means more and more -- the barbosa up more and more fall into the failing category. and the prescriptions, the remedy written into no child left behind for the schools will be turned into charter schools, the schools can be privatized, the schools can be closed, the whole staff of the school can be fired. these are very draconian penalties because schools are not able to reach a utopian goal. no school that i know of, maybe there is an individual school somewhere where every child is proficient but it is a rare school where 100% are proficient, and if it is 100% proficient it is because probably the every dumbed down standard of proficiency. there's certainly no state where 100% of the ch

guest: the same thing we said to secretary paulson and now secretary geithner. they need to purchase these homes. the best thing is to do is to no longer believe it to the banks or the investment companies, or the government sponsored agencies, to decide to do something or not. go in and take these loans out. you get them at a reduced value. they are no longer worth what they were. just forced the modification, the refinancing of these loans. -- just force the modification. at least then we are no longer waiting for this voluntary participation from the lenders. you are going in and making sure that there are as many as possible. loans that are just morphed into these predatory loans -- you could immediately take all those of the table by refinancing those loans. the other piece of this is for people who are looking at their home and they are saying my home is nowhere near the value of what i pay off my mortgage. i guess i should just get out from under this mortgage and leave this house. that's a big problem for the government. going in and taking these mortgag

what makes it interesting is secretary dick paulson when he was in the bush administration, obviouslyvery free-market, ended up effectively nationalizing -- nationalizing fannie and freddie when he took over and said we need to come in and run things. so you have this philosophical difference but at the same time so important -- it is difficult to extract the government's role. host: at the big bill gets passed, signed into law yesterday. how does that relate to public support for something so large as fannie and freddie moving forward? guest: it is hard for me to know. what i have trouble understanding what people bash fannie and freddie, if they did not exist there would not be a 30-year fixed-rate mortgage. that is very popular in this country. so i don't know how you can get rid of them and keep the 30-year fixed-rate mortgage and allow people to boost home ownership when they were -- of one ship. when they were created in the 1930's, homeownership was much lower and it has boasted to about 70%. now some are saying it is a bit too high and maybe some of the people should be renter

paulson is recognized for five minutes. >> the document you sent contains the statement. whee recognize bank supervision, including ours, needs to be more effective, and we will review our performance at multiple levels. i just came from a meeting with multiple bankers, and they talked about money for credit, and they want to lend it out, and their overwhelming concern was in regards to the uncertainty of regulators. these regulators are being inconsistent in a sense that when they come visit of thank, their demands are essentially preventing to loans from current -- preventing good loans from being made. i think every member of this committee raised this issue, and they've responded by saying they have told the people in the field to take a step back in regard to what is happening, so there is still a disconnect. i met with 37 bankers, and it seems nothing has changed in recent times regarding the examination. what can the federal reserve do better to create some consistency for the bankers so credit is being put out in the market? >> this is one of our top priorities. w

. >>> gregory zuckerman of "the wall street journal" talks about john paulson whose hedge fund made $20 billion by betting against the housing market in 2007 and in 2008. mit's sloan school of management cambridge massachusetts posts this 50 minute event. [applause] >> thanks very much. i appreciate the opportunity to come speak about my book. a passion of mine, it's my baby and i love discussing it and still find it interesting so i hope you guys to two. sangree to talk a little bit about the operations and lessons from the research behind my book and i will also talk about what is going on now on wall street and the big traders that i cover day-to-day, what they are betting on and what they are bidding against and i will leave some time for q&a. i often find in these kind of settings people have an interest in discussing journalism, financial journalism per say, perhaps wall street journal, and what we are focused on and those kind of things, so feel free to call and ask about the book or any of those kind of questions as well. my book is called "the greatest trade ever" and it's abou

there will not be the kind of dilemma that paulson said, pay everybody or pay nobody. the perception is that we are paying only those debts that are necessary to prevent a total spiraling downward. that is where it would be used, and that is hardly a bailout. there will be no more aig's. they can use the money to pay off some of the debts, but they are gone. the shareholders are gone, the ceo's are gone, everyone is wiped out. [inaudible] >> the bill was started during the bush administration. >> arnes said it well. i would hope that after yesterday, those republicans who reluctantly went along with the just say no against everything are finally going to step up and save that is over where it. we did not get all elected to say no to everything. this is a major crisis and we want to be part of the solution. if the leadership tells us to vote no on everything, we're going to walk. i am more hopeful about that. i said that the door is open. i want people to bring good ideas to this table and if they have good ideas to strengthen this bill, i welcome it. >> i don't think y

the decision that paulson said he faced -- we begin by saying the assumption is we are going to pay only those debts that are necessary to prevent the total spiraling downward. that is where the fund would be used. it is hardly a bailout. there will be no more aig's. if they have to pay off some of the debts of a failed institution, the shareholders are gone. the ceo is gone. everybody is wiped out. it is a different situation than the past. >> is there optimistic -- is their optimism about this issue instead of health care? the bailout started during the bush administration. >> maybe i am a minority of one, but i hope that after yesterday those republicans who i think reluctantly went along with the just say no -- who were against everything -- are going to step up and say that is over with. we did not get elected to the senate to sit down and say no to everything. this is a major crisis. we want to be part of the solution. if we are told again to say no, we are going to walk. the door is open. the principles have to be very strong on this bill, but i want people to bring good ideas to

on october 14, 2008, secretary paulson announced the creation of the capital purchase program. and the infusion of cash into nine financial institutions including citi. under the program he announced, these are the words he used, "these are healthy institutions, and they have taken this step of accepting taxpayer money for the good of the u.s. economy." as these healthy institutions increase their capital base, they will be able to increase their funding to u.s. consumers and businesses. on october 28th under that statement, citi got $25 billion, was pronounced a healthy institution, and yet on november 23rd, which i think is three weeks and four days later, the secretary of the treasury announced that citi was, citi and citi alone was in such dire straits it would need additional $20 billion and that was then followed by another $102 billion in guarantees. what i want to understand is no you we describe citi as a healthy institution. what does healthy mean now that it didn't mean on october 14th, 2008? >> thank you, chair warren, for your question. as you know, the treasury do

on october 14, 2008, secretary paulson announced the creation of the capital purchase program. and the infusion of cash into nine financial institutions including citi. under the program he announced, these are the words he used, "these are healthy institutions, and they have taken this step of accepting taxpayer money for the good of the u.s. economy." as these healthy institutions increase their capital base, they will be able to increase their funding to u.s. consumers and businesses. on october 28th under that statement, citi got $25 billion, was pronounced a healthy institution, and yet on november 23rd, which i think is three weeks and four days later, the secretary of the treasury announced that citi was, citi and citi alone was in such dire straits it would need additional $20 billion and that was then followed by another $102 billion in guarantees. what i want to understand is no you we describe citi as a healthy institution. what does healthy mean now that it didn't mean on october 14th, 2008? >> thank you, chair warren, for your question. as you know, the treasury do

we do it for people like car men men -- carmen and her daughter marilee from paulson, montana. carmen had insurance, but she still had problems with coverage and costs. before march, 2008, carmen had insurance with a $5,000 deductible. she found herself avoiding care because of the high deductible. she and her daughter marilee waited until they knew that they needed help before they went to a doctor. certainly with a deductible that high, 5,000 bucks. at one point, carmen's daughter contracted aure nary tract infection. wanting to avoid the high deductible, carmen and her daughter decided to wait a day and see how it would go. but her daughter did not get better. she needed to get care. since it was saturday, there was no urgent care open for 50 miles. the only option was to go to the emergency room. the hospital billed carmen for $500 but her insurance company refused to pay it. carmen appealed, asking them to pay the $70 insurance would normally pay for urgent care and carmen would pay the remaining balance, but the insurance company still denied her claim. when carmen broke

my predecessor secretary paulson acted with the initial actions -- >> the reason why i make that pointmply we all want bipartisanship, we all know we're going to need it to confront the problems all three of you laid out very well. we would get along a lot more if you thank the last president instead of blaming the last president for everything in the world. >> i think that's a very good point i fully supported the legislation and fully supported -- >> just i would like to that point made occasiccasionally be frankly it never is. second, just looking at the stimulus act or recovery act, whatever term we want to use. i don't dispute at all it's created some jobs and done some go. you can't deploy that much resources and not have some impact but at the time that it was offered, this is probably more fairly directed to you, miss romer, but you know, the implication was or the statement was you passed this unemployment will never get above 8%. clearly it's gotten above that clearly we don't envision it getting back to 8% for a good long while. why the shortfall? >> it's a very legitimate q

that was back when hank paulson came and told everyone that he was going to save the nation and the republicans bought into it and many of my good conservative republican friends and voted for a $700 billion bailout. i did not. and a few others didn't. but the vast majority did. that's kind of interesting. that $700 billion is the same figure that we're using right now that it would cost people in -- by the year 2020 just the interest alone. but the $700 billion that we could spend on interest in 2020 happens each and every year. and we don't get anything for it. it's just the cost of living having this much debt in the first place. at this rate, it will become more and more difficult for government to fund priorities that we truly think are important like national infrastructure spending. for some reason nobody around here wants to spend money on infrastructure. i know i get criticized because i know i'm considered to be a conservative. i've been rated as the number one most conservative member of the senate by human events an last week by the national journal. you're looking at a conservative

secretary, hank paulson, the former treasury secretary, wrote in his book that in september 2008, the issued -- on page 10 of your testimony, the purchase agreement. encouraging banks to purchase these. this was done at the same time to help satisfy the chinese government, which on billions of dollars of fannie and freddie bonds, which were paid off in their entirety. now we have these banks that were intentionally misled, potentially deceived to by fannie and freddie preferred holdings, and then after the government said by these, the government just defaulted and stock all those banks. -- and stuck all those banks. big time. at the same time you're considering a capital program for small community banks. my question for you is, when i look at the objectives are reform -- of reform, and this is the guideline, i do not see anything in there that addresses whether or not these community banks should be treated the same as the chinese. that would be made whole when they were intentionally misled by the u.s. government to buy these bonds that turned out to be worthless. >> congressman, i

we do it for people like car men men -- carmen and her daughter marilee from paulson, montana.men had insurance, but she still had problems with coverage and costs. before march, 2008, carmen had insurance with a $5,000 deductible. she found herself avoiding care because of the high deductible. she and her daughter marilee waited until they knew that they needed help before they went to a doctor. certainly with a deductible that high, 5,000 bucks. at one point, carmen's daughter contracted aure nary tract infection. wanting to avoid the high deductible, carmen and her daughter decided to wait a day and see how it would go. but her daughter did not get better. she needed to get care. since it was saturday, there was no urgent care open for 50 miles. the only option was to go to the emergency room. the hospital billed carmen for $500 but her insurance company refused to pay it. carmen appealed, asking them to pay the $70 insurance would normally pay for urgent care and carmen would pay the remaining balance, but the insurance company still denied her claim. when carmen broke her

paulson did on the night before tarp was approved when he said he would never approve a hedge fund beingut and that same night, the federal reserve came out and approved goldman sachs being changed from a private equity firm to a corporation, a corporation that could receive bailout funds. this has been nothing but in the mainstream of washington deliberating with their friends. host: our caller brought up short selling. guest: short-selling is a good example of the kind of quandary the sec finds itself and often. short-selling is a way to bet on whether a stock will fall. you borrow shares from someone out there on the market. you sell them immediately and hope to buy them back at a lower price making a profit in between. this provides a very helpful source of liquidity and activity for the market. what people have been concerned about and this has been around for decades, is that people will manipulate the stock. during a turbulent times this will happen. there were concerns that during the crisis, people were able to manipulate stocks and pushed them down. there has been a lot of pres

and balanced debate, we have stacy carlton, former speechwriter to former treasury secretary henry paulsonthe u.s. economy." and josh gottheimer, former speechwriter to president bill clinton. good morning to both of you. >> good morning. >> stacy, what -- sarah palin has been embraced by the tea party crowd. and yet, a number of them simply don't like john mccain and don't like the fact that she was supporting him in his bid for re-election. why? >> well, some people certainly think of john mccain has become too washington establishment like but sarah palin bona fide with the tea party movement are very solid and strong. there may be a few people a little upset but overall her popularity continues to grow. >> in fact, a lot of her supporters feel that john mccain has never been conservative enough. he's too mavericky, right? >> too mavericky but if you look at john mccain's record, he's always believed in smaller government, cutting government spending which is one of the key parts of this tea party movement. >> uh-huh. jo josh, what do you think of them appearing over the weekend togethe

former treasury secretary paulson, national economic council chairman larry summers and jamie diamond concede that financial crises occur every five years or so. without clear and enforceable rules that address the unintended consequences of unchecked financial innovation and which adequately protect investors, our markets will remain subverted. these solutions are among the cornerstones of fundamental and structural financial reform. with them, we can built a regulatory system that will endure for generations instead of one that we laid bare by an even bigger crisis in perhaps just a few years or a decade's time. i only hope they have both the fortitude and the foresight to do so again. madam president, i ask unanimous consent that my full statement be included in the record. the presiding officer: without objection. mr. kaufman: madam president, i yield -- mr. president, -- madam president, i ask unanimous consent that the banking committee be discharged from further consideration of h.r. 2194, the iran refined petroleum sanctions act of 2009, and the senate then proceed to its cons

secretary paulson tried the strategic economic dialogue.ility that white house or state can lean on them in their own way. why should congress be the one to carry this water? >> well, i think we're not exactly carrying it. what we're doing is trying to move this issue up the hill with some water on our back, i guess. but, look. our job is to fend the interest of this country, to take into account the needs of our constituents. clearly the chinese policy has impacted jobs in this country. there can be a debate about how much. but if one country has policies that make their goods cheaper and it leads to our goods being more expensive, it's going to have an effect on our production, our jobs, our products, and it makes it harder to ship overseas. so something has to be done. as you said, there have been talks, bilateral talks, that haven't led to much. and then there's an idea we could take action unilaterally through our duty. there are other provisions, antidumping. that is questionable, whether or not it would work. then we say let there be

take for instance john paulson, he was the one that made $37 billion in his hedge fund as a result ofhe downturn in the housing market. he made approximately $3 billion. and his tax rate was 15% on $3 billion. host: matt writes from twitter it's a fallacy, that government should manage its budget the way a household, but not the same. caller: i am a republican and we talk about being conservative. i am a little discouraged from the last administration, after a democrat left money there for us to spend it. and i am a little discouraged as a republican, that when we have a war and we don't fund it. those things cost me from the first time i voted and i voted for ronald reagan the first year, those things made me change over to democratic president. i am not for the big spending, and for americans to say we can't run a deficit. and the average american has a credit card, and that allows you to run deficit. i think pay-go is great. and we w/pwill leave things for our children. i will leave my child money owed to pay. i have insurance for that. the federal government doesn't have insurance

paulson of minnesota, you are recognized for five minutes. >> thank you, mr. chairman. i have concerns what may happen. we may have gone over some of this in testimony but what should happen if we prevent certain types of information from being allowed as a part of a credit score computation. for example, if i have a score of 650, then we pass legislation banning certain information from being used, this would argue because those people who had lower scores to now have a higher score innocents. that is the intent of some of the legislation that's out there but my score will still remain at $6.50 and at the end of that day how what does it mean for me as an individual? will this no longer be as good as it once was in the past? does that mean it is going to be harder for me to get credits? mr. quinn, maybe you can comment on a potentially. >> sure. if information is required to be suppressed from the score calculation and it causes the score to be inflated artificially from what would be if the information were considered, then the lender would look at the score in the de