that happened in procter & gamble. it's allowed to trade away from the new york stock exchange. stock went from 60 to $39. if we have circuit breakers, it ought to apply to all of the players. >>> on friday the markets continue down. a long-awaited marriage in the skies was announced this week. continental and united airlines will merge in a deal valued at about $3 billion. if it passes legal hurdles, the new company will be the world's largest airline and will use the united brand. no word yet on what impact it will have on fares or routes. >>> a major story the week is the jobs report released on friday. what does it mean and what does it tell us about the economy today? joining me to interpret and explain it is hilda solis, secretary of labor. great to have you on the program. welcome back. >> hi, how are you? >> i'm doing great. what's your take on the employment report? we saw 290,000 new jobs created. the unemployment rate at 9.9%. better than many expected, but the unemployment rate went up. so how would you characterize this month? >> well, let me show you my chart here.

and let's say that apply to procter & gamble, or 3m. app how would the employees of procter & gamble or 3m, what ems catastrophe with a face if the stocks of their companies were not subject to high frequencyes trading? w subject would that help those employees and those operating companies, or would there be some cpanies cataclysmic problem of high frequency trading did not apply to those companies do?ataclysm congressman, let me first of ala agreed, the pppurpose of our capital markets is to helpgreehe companies raise capital toapital create jobs, to help our econome grow. and that investors who commit their capital to those markets get to share economically in that growth and development. econom we haveic lots of questions about-equity trading, and it'llf and our capital markets. role it's one reason we exposed manyi of the issues to high frequencys trading -- to >> madam chair, i know you have many questions. have one question and it is mu time.any what catastrophe would occur tod the employees of procter & gamble if the stock of th

procter and gamble also recovered back to that $60. >> if yes they did.up at 68 something that day. what happened to the so -- poor person that sold at $37? >> they do not fall within that 60%. >> where is the market maker in proctor and gamble? what was the the quiddity in the market maker? >> that would be a great question for the next panel of exchanges. >> ok. i will wait to ask that. when you update the circuit breakers for stock indexes, the you expect to harmonize the rules between equities and futures in the same index? >> absolutely. one of the things we are looking at is whether we should move from the dial to be sec. of the thresholds' right? >> you may get another chance at this. >> great. >> i just want you to know. >> clearly, you have to be highly coordinated between these two markets. >> i am worried that my lack of not getting something done, we could have a repeat. we are all almost 300 points on the dial right now -- dow right now. the s&p is right at 30. the other stock exchange is right around 60. if we get bad news out of the imf art

let's say that applied to procter & gamble or 3 m, how would the employees of procter & gamble or 3m, what catastrophe would they face if the stocks of their companies were not subject to high fecsy trading? would that help those employees and those operating companies or would there be some cataclysmic problem if high frequency trading did not apply to those companies? >> let me first of all agree the purpose of our capital markets is to help companies to raise capitals, create jobs, help our economy jobs and investors who commit their capital to those markets get to share economically in that growth and development. we have lots of question about high frequency trading and its role in our capital markets. it's one reason we've exposed many of the issues related to high frequency trading for public comment. >> madam chairman, i know you have many questions. i have one question and it is my time. what catastrophe would occur to the employees of procter & gamble if the stock of that company was not subject to high frequency trading? >> i don't know that any catastrophe would. there are

one thing was that around 2:30 today, mysteriously, shares of procter & gamble and 3m suddenly plunged. and that triggered some electronic trading. also today, a trader accidentally placed an order for $16 billion instead of $16 million of what's called e-minis these contracts traded on the chicago mercantile exchange. we don't know which came first and if they're connected. our sources are telling us the trader was working for citi. citigroup has not confirmed that yet. but that was part of what was going on. you know, i want to say you just did your greece report. before this freefall, the markets were already pretty nervous and the dow was down something like 250 points. and then all of this stuff happened. but within 20 minutes after the freefall, the dow was... regained about 600 points. >> woodruff: is it possible that a combination of events like what you just described could account for the biggest drop ever in one day? >> there are still a lot of questions that are unanswered and it's probably going to take a couple days to figure it all out. right now from what we're hearing

because procter & gamble, for example, dropped 10%. and the circuit breakers kicked in. trading on that stopped. however, the electronic traders, the traders on electronic exchanges bypass that and they still went on to do trading. and so the selling was continuing outside of the new york stock exchange. now the new york stock exchange believes that investors would be best served if everybody had circuit breakers in place. and that they all kicked in together in a universal point of view. but the electronic exchanges say we want to have continuous trading. so this is an ongoing debate. and so yesterday's the circuit breakers didn't really have an impact. >> and briefly, as you said, there's fingerpointing going on. and the sec is now involved looking in to make sure, see what happened and make sure it doesn't happen again. >> right. and you know, until we know what happened, it's kind of hard to know who is going to fix this problem. if it has to do with the exchanges, then the securities and exchange commission will get involved. if it has to do with the futures contrac

procter and gamble was on its way down. it was like falling off a building.the opposite happened when someone look like they're sitting on a rocket ship. host: will it be sorted out and how long will it play out? guest: i think it will be sorted out soon. this is a serious glitch. host: second editorial this morning in "the wash -- the wall street journal" rt here entitled "restat . . greece hates business." the u.s. ranks fourth in singapore is first. at 109, egypt, zambia, rwanda, and kazakhstan. this is an editorial in the "wall street journal." john on the line for independents, you are on with bob davis, "wall street journal." are you with us? we will move on to mike. caller: there was some sort of possible technical difficuy. what is the possibility that there was something more sinister related tthis? we have seen on the news what led up to the crisis was hedging or shorting companies and forcing them lower than they actually were and causing panic. could this have been something that was just the same type of thing, but struck down fro weeks to minute

we saw today, for example, in mast a moment or two procter and gamble, one of america's premier companies, fall from $60 to $39. so another company fall from around $0 to a penny stock -- from around $30 to a penny stofnlgt this was a resulstock. this was a result of some of the lack of oversight. there would be nobody in this chamber that is morph an voaskt technology and the powerful tool that technology can be. but we're seeing, and i think the senator from delaware has been an early leader on this. and i've listened to his speeches for months. and everything in my gut say, he is onto something here. and i've asked the chairman of the banking complete to make sure that as we -- as this piece of legislation proceeds, that we make sure that, whether it is a study, whether it is an appropriate request of the s.e.c. that this high-speed -- high-frequency trading, colocations, sponsored access, all of these theories and tools that seem to give the big guys a slightly bigger advantage over the everyday investor, be appropriate subject of some additional study. we may disagree about how we go

. >> i would agree 100% andwe procter & gamble it is 2% is but the intention is to continue trading and ago& relatively quickly we want it them to the market wide. >> fed 10 percent your 20% to 30% cancers in me behich narrowed what is more if important is the narrow of the time frame because they seeking liquidity venues so a few narrow the time where would you comedity up with you cannotn be closed all day you narrow the window and the band and it works out for everybody. >> we're talking about a couple of minutes at most on the market wide basis we are talking about moving the frame so it is not as long of a close as it was in the past. >> overseas trade is a good point*. >> want to thank each of you. of mr. leibowitz, mr. noll mr. duffy german chancellor and and chairman shapiro for excellence superb and well presented witnesses and your testimony as we move to make sure we maintained in confidence with the investor trading.mark thank you again very, verynves much for helping with us. the chair knows of some members may have additional questions which they mish -- may wish to submit

i have spent my career at hasbro, procter and gamble, and ebay.re are the facts on goldman sachs. i was on the board eight years ago for 15 months. i got off. as donald trump says, i fired them. i did not like the culture or the management. with regard to ipo shares, i did receive those. we had a brokerage account with goldman sachs. we did make money on that. about $1.8 million. it was a very legal, a very standard practice at the time. when it was called into question, i actually ended up giving those profits back to charity and to the company. you have to be above reproach. legally -- leaders have to always look for conflicts of interest and perceived conflicts of interest. i did not see a conflict of interest here. it was a completely separate account and had nothing to do with ebay. leaders have to be above reproach. there can be no real or perceived conflict of interest. in my administration double we will put our assets into a blind trust -- in my administration, will put our assets into a blind trust -- we will put our assets into a blind

i have spent my career at hasbro, procter and gamble, and ebay.ere are the facts on goldman sachs. i was on the board eight years ago for 15 months. i got off. as donald trump says, i fired them. i did not like the culture or the management. with regard to ipo shares, i did receive those. we had a brokerage account with goldman sachs. we did make money on that. about $1.8 million. it was a very legal, a very standard practice at the time. when it was called into question, i actually ended up giving those profits back to charity and to the company. you have to be above reproach. legally -- leaders have to always look for conflicts of interest and perceived conflicts of interest. i did not see a conflict of interest here. it was a completely separate account and had nothing to do with ebay. leaders have to be above reproach. there can be no real or perceived conflict of interest. in my administration double we will put our assets into a blind trust -- in my administration, will put our assets into a blind trust -- we will put our assets into a blind

hedge funds like long-term capital management, energy companies like enron and concerns like procter& gamble and a wide arrest rave governments at home -- wide array of governments have all fallen prey to the derivatives market. the solution, i think is becoming obvious to put an end to risky uncovered bets that leave taxpayers and our financial system as vulnerable as it has been. that's why capital and margin requirements imposed either by regulators or by central clearinghouses are so critically important to this area of our economy. chairman bernanke of the federal reserve described margin requirements -- and i quote him -- as an appropriate cost of protecting against counterparty risks. the sad truth is, mr. president this solution has been obvious for some time. you don't need just the events of the last couple of years to understand this problem. you can go back 16 years ago mr. president. that time in 1994, the general accounting office produced a report entitled "financial derivatives: actions needed to protect the financial system." at the time of their report, the general