robert rubin? >> yeah, i'll identify with something that chuck said. i'll add one penalty if i may. both of us learned about -- well, i'll speak for myself, i think it was also true of chuck, we learned about this in the fall of '07, and clearly, -- i remember that initial -- when i initially heard about it. and i had a reaction which is in my statement. you'll see it there. to the effect that if you are engaged in arbitrage kind of business and probably caused me to think that way because of my background, the other side of that transaction is to completely dispose of the risk. but the people who were running the businesses reply. and i think the reply was totally understandable, these were triple a securities, and that was all triple a securities had been seen in the time i've been in the business. i would say from their response that they were very much relying on those aaa rating. although i also understand and i don't know where i know this from, but david bushnell's people did enormous amount

robert rubin? >> yeah, i'll identify with something that chuck said. i'll add one penalty if i may. both of us learned about -- well, i'll speak for myself, i think it was also true of chuck, we learned about this in the fall of '07, and clearly, -- i remember that initial -- when i initially heard about it. and i had a reaction which is in my statement. you'll see it there. to the effect that if you are engaged in arbitrage kind of business and probably caused me to think that way because of my background, the other side of that transaction is to completely dispose of the risk. but the people who were running the businesses reply. and i think the reply was totally understandable, these were triple a securities, and that was all triple a securities had been seen in the time i've been in the business. i would say from their response that they were very much relying on those aaa rating. although i also understand and i don't know where i know this from, but david bushnell's people did enormous amount

among those testifying, robert rubin yesterday. earlier in the week, alan greenspan before the committee. >> didn't the federal reserve system fail to meet its responsibilities, fail to carry its mandate? >> i'm going to yield two minutes for the response for overtime. >> first of all, the flaw in the system was an inability to fully understand the state and extent of potential risks that were at yet untested. we didn't see what those risks were until they unwound at the end of the lehman brothers bankruptcies. and i had always presumed, as did everyone in academia, regulatory areas, banks, presumed that risk potential was. having failed there, that means we were undercapitalizing the banking system probably for 0 or 50 years, and that has to be adjusted. host: alan greenspan earlier this week testifying before the committee. back to your phone calls. shawn is joining us from vancouver, washington, independent line. good morning. caller: good morning. i'd simply like to ask these two masters of the universe, mr. rube and inmr. prin

tom, it was a quite a moment on capitol hill-- charles prince, the former ceo, and robert rubin, an influential advisor to the bank, admitted they made mistakes that contributed to the financial crisis. >> tom: susie, it was day two of hearings looking into the causes of the meltdown. and the panel members were just as tough on citi's big wigs today as they were on alan greenspan yesterday. >> suzanne: tom, as far as the panel was concerned, "sorry" just wasn't good enough. washington bureau chief darren gersh reports. >> reporter: former citigroup ceo charles prince said the two words many people have been waiting to hear from a top banker. >> i'm sorry. i'm sorry that the financial crisis has had such a devastating financial impact on our country. i'm sorry for the millions of people, average americans, who have lost their homes. and i'm sorry that our management team, starting with me, like so many others, could not see the unprecedented market collapse that lay before us. >> reporter: the apology fell flat with commission vice chairman bill thomas, who demanded to know how prince and other

so the question tonight, who's charles prince and robert rubin? case you don't know, i'm going to walk you over to the wall here. let's start with prince. before citigroup helped melt down wall street and the economy, before the government had to pump so much money into citigroup that it became the bank's biggest shareholder, before all of that, way back in 2007, this guy was the one calling the shots in what was then the biggest bank in the u.s. and for a brief time even the biggest bank in the world. then, of course, it all collapsed brought down by bad bets and greedy bets on subprime mortgages. now, here is what prince had to say today. >> i'm sorry that the financial crisis has had such a devastating impact on our country. i'm sorry for the millions of people, average americans who have lost their homes, and i'm sorry that our management team, starting with me, like so many others could not see the unprecedented market collapse that lay before us. >> all right. so he said he's sorry. now, when prince was pressured to leave in 2007, guess how

charles prince, citi's former ceo and robert rubin, a former advisor to the company - testified thursday. they said many people working at citigroup never believed they were putting anyone at risk with subprime mortgages. "i do not recall knowing before september 07 that these super senior tranches were on our books. i feel confident that the relative personnel believed in good faith that more senior level consideration of these particular instruments was unnecessary because i said a moment ago, the positions were rated aaa and appeared to bear the minimest risk" both rubin and prince said they didn't know until late summer 2007 that citigroup held bad mortgages. "regrettably we were not able to prevent the losses that occurred." those statements fly in the face of what a former citigroup employee told the commission earlier this week.. richard bowen iii - former citigroup senior vice president and chief underwriter said "in mid-2006 i discovered that over 60% of these mortgages purchased and sold were defective. i started issuing warnings in june of 2006 and attempted to get management

charles prince and former board member and treasury secretary robert rubin apologized, but claimed toe unaware of the depths of citi's problems, which would eventually lead to a $45 billion taxpayer bailout. >> i'm sorry that the financial >> almost all of us, including me, who were involved in the financial system, that is to say financial firms, regulators, rating agencies, analysts and commentators, missed the powerful combination of factors that led to this crisis and the serious possibility of a massive crisis. we all bear responsibility for not recognizing this and i deeply regret that. >> brown: prince and rubin later >> reporter: today's grilling came from members of the 'financial crisis inquiry commission', a bipartisan panel created by congress to determine the multiple causes of the financial crisis and prepare a report by december 15. and the session was one of three this week, focused on risky mortgage lending. yesterday, the committee questioned former fed chairman an greenspan about his failure to crack down on abuses in the subprime lending market. and take a stronger

robert rubin? >> i think it was absolutely wrong to suggest that mr. robert rubin had any responsible for the what happened attestedty -- at citigroup. >> i appreciate that. mr. prince, you were ceo. and you resigned? >> yes, sir. >> what happened after you left? >> is this a rhetorical question? >> no. who assumed the ceo? >> mr. crenshaw became the ceo the day i resigned. >> okay. then what happened in the terms of the office of ceo? >> at that point a search was >> our problems with our technical issues with the southern republican leadership conference have been resolved. we're going to go back now live to new orleans. speaking now, liz cheney, daughter of former vice president dick cheney. >> as afghan president karzai whose support we need if we're going to prevail in afghanistan. is being treated to an especially dangerous and juvenile display from this white house. they dress him down on an almost daily basis and within the last 36 hours refused to say whether he was even an ally. you know, i used to work on the middle east and there is a sayin

host>> the financial times repog that former treasury secretary robert rubin, as well as an ounce -- alan greenspan will be question this week by the u.s. and financial crisis in glory commission. that committee is chaired by bill and the ladies, who says he will ask mr. greenspan -- by phil inslee these columns as he will ask mr. greenspan warned the fed -- why the fed did not focus on these issues before the bubble burst. one california city closed off its downtown due to unstable buildings after a 7.2 magnitude quake centered just south of the u.s. border near mexicali. it was one of the strongest earthquakes to hit that region in decades. space shuttle discovery and seven astronauts rocketed into orbit today are one of nasa's final missions to the international space station. the liftoff, an hour before sunrise, set a record for the most women in space at the same time. it is and then -- it will be an unprecedented for some. the shuttle will rise above the elbows on wednesday. -- the shuttle a ride at the space station on wednesday. a spokesperson in islamabad is claiming that th

. >> reporter: charles prince, citigroup's former c.e.o., and robert rubin, the bank's former board chairman, apologize for not foreseeing the financial crisis. >> and i deeply regret that. >> reporter: rubin, a former treasury secretary, who earned $15 million a year as a citigroup executive, insisted he played only an advisory role. >> i was not involved, as you correctly say, in the management of the people or the personnel. >> reporter: the panel wasn't buying it. >> you either were pulling the 11ers or asleep at the switch. >> reporter: citigroup suffered $30 billion in mortgage-related losses, but another former executive revealed he started raising red flags back in 2006. >> i specifically warned mr. rugein about the extreme risks in unrecognized financial losses that existed within my business unit. >> reporter: dick bowen sahd he sent this e-mail to rubin and three other executives in november 2007. of the $50 billion in mortgage loans the bank bought and sold that year, bowen warned, between 60% and 80% were defective, meaning they did not meet the bank's own lending starnldzs. >>

revolution applied to finance reached fruition during the clinton administration particularly with robert rubin was the treasury secretary and of course the same people who are now responsible for helping clean up the financial mess hopefully worked with mr. rubin during the 90's. that is a great opportunity for them to make amends. still waiting to see progress on not but we all did it together. the culture shifted. wall street became good. the percentage of graduates from top universities who went in to finance as far as the key figure from the data was about 10% at the peak of the sub prior boom it was 40, 45%. it's money, its power, its ideology. i spent a lot of time talking to people in washington. i live in washington and spent a lot of time with people in and around the consensus, politicians, their staff and the attitudes have begun to change. not at that level people's thinking isn't what it was before september 2000 but people think that unregulated finance is better and unfettered mega banks are the best. this idea is wrong and dangerous and must be stopped. how are we going to do i

do you think robert rubin was a firefighter was well? he's going to be testifying and some say that he should have picked up more warning signs and put out more fires. i'm taking more of an active roll in preventing citi's mortgage meltdowns. >> well, i think it comes with a lot of credit for the way in which he approached the macroeconomic issues of the mid 90s. and i think in that sense, he's shown himself to be actually quite a per septemberist leader and having a great deal of understanding of what is necessary in order to bring markets at least back towards some kind of equilibrium. it's not just the price of money that we're concerned about. it's the quantity of it. and it's not only the quantity. it's what actually that money is then used for. and frankly, i share some of the criticism of the fed leader in not understanding just how much impossible to fulfill about it business was being written by the banking seconder in the early part of the last decade, tying bullet payments on to adjustable rate mortgages, which frankly, no cha

robert rubin, mr. dave bushnell, the chief financial officer and auditor of citigroup.i outlined the business practices that i had witnessed and had attempted to address. i specifically mr. ruben about the extreme risks and unrecognized financial losses that existed within my business unit. i also requested an investigation and i asked this investigation be conducted by officers of the company outside of my business unit. my warnings to mr. ruben involved two different areas within my responsibility. the first one was called delegated flow. the delegated flow channel purchased $50 billion annually of prime mortgages. these mortgages were purchased one mortgage at a time. these mortgages were not underwritten by citi before they were purchased. but the underwriters reviewed a sample of the files after they were purchased. this was to make sure that citi's credit standards were maintained. most of the mortgages were sold to fannie mae, freddie mac or other investors. even those citi did not underwrite these mortgages, citi provided warrants to the investors that purchased

there's a congressionally appointed panel to look at the financial crisis, that is, of course, robert rubin, former citi banker, former treasury secretary. he is speaking now. before that former citi ceo charles prince apologized to this panel. mr. reuben so far has not apologized to the panel. the company was wrong, they failed to better prepare for the financial kriss and their risk-taking apparatus fell apart. at the same time, mr. prince defended his bank's size and conglomerate nature. citicorp is having a better year and trading flat to slightly higher today. i find it very interesting that mr. reuben continues to be the uncontrite product in this. maybe there's a story there. we will wait and see. trish, over to you. >>> let's talk about the airlines, larry. a deal that could create the second largest carrier in the united states. talks between united airline airways and usairways both trading up there. you can see usairways up better than 12% and ual up better than 8%. phil lebeau joins us whether there may be a spoiler in the deal. >> how are you? we've been down this road before a

robert rubin, mr. dave bushnell, the chief financial officer and auditor of citigroup.business practices that i had witnessed and had attempted to address. i specifically mr. ruben about the extreme risks and unrecognized financial losses that existed within my business unit. i also requested an investigation and i asked this investigation be conducted by officers of the company outside of my business unit. my warnings to mr. ruben involved two different areas within my responsibility. the first one was called delegated flow. the delegated flow channel purchased $50 billion annually of prime mortgages. these mortgages were purchased one mortgage at a time. these mortgages were not underwritten by citi before they were purchased. but the underwriters reviewed a sample of the files after they were purchased. this was to make sure that citi's credit standards were maintained. most of the mortgages were sold to fannie mae, freddie mac or other investors. even those citi did not underwrite these mortgages, citi provided warrants to the investors that purchased them. these re

i think it would be helpful and i am honored to be here and thank robert rubin for his introduction,nk he is a great -- the greatest secretaries since alexander hamilton. i still believe that. i think you are all here to think about this. i supported the president paz stimulus program. it was difficult for me to say that because i hated to do anything to increase the deficit but the economy was contracting out such a rapid rate, this deficit would have been worse if we have not done anything to try to stabilize it. for whatever it is worth, that is my general take. we will not succeed unless we do something to generate more jobs or do something to change the population distribution which means more immigrants and other issues across the board. >> let me just ask you this to get you on the record. do you agree with what the commission that president obama put together announced yesterday that everything has to be on the table, including the newly passed health care reform bill? >> sure. i would think the president would want some sort of good faith, bipartisan effort. if i was in cong

. >> that was former treasury secretary robert rubin offering an apology for citigroup's role in thew the head of that commission, and former mccain economic adviser, douglas holtz aiken. thank you for joining us. >> thank you. >> sometimes i have commissionitis. what is this commission going to accomplish? >> i think we have two opportunities. the first opportunity is to provide the american people with a definitive government sanction of what happened. this was an enormous crisis. it had great fallout for the american people. they deserve an explanation for what went on. >> don't we know? >> well, we know a lot of the pieces, but, you know, i sit in these hearings. it can be terribly frustrating to listen to, alan greenspan, a robert rubin, what you heard in that opening clip was the closest thing to someone taking responsibility. but you still didn't hear that. you know, the federal reserve had responsibility for federal regulation, citigroup failed, we had a housing bubble, had responsibility for regulation of mortgages and we got an epidemic of bad mortgages. no one says, you kn

secretary robert rubin and secretary hank paulson. >> a lot of people out there are going to ask, withdrop? >> regulators, the politicians, the public are out for scalps and goldman is the biggest scalp of all. >> reporter: goldman sachs knows that. over the weekend, a voice mail from goldman's ceo. the extensive media coverage on the s.e.c.'s complaint is certainly uncomfortable but given the anger directed at financial services, not completely surprising. inside the bank, a belief goldman is being made a scapegoat for the kind of product pushed by many of the big investment banks and there is concern over maintaining their most powerful commodity, their clients' trust. how many people within the bank truly knew about this investment? >> this was not a secret. what is interesting to see is whether the senior people knew details of how this deal was sold to investors. >> one legal scholar said this is going to be war. >> goldman doesn't play nice, everybody knows that. they actually usually feel they don't have to answer to anyone. >> reporter: we've now learned the only employee with

your memo to robert rubin. >> let me yield additional -- >> i just need a minute. >> i will give you o. >> thanks. this was an extraordinary document that we have been privileged to see. it was quite candid. rubin, an extraordinary document that we have the privilege to see, and that was quite candid. did you ever receive a response from anyone? >> at what point commissioner? >> that is a good question. from that time until the time you left the institution? >> from the point, and i am attempting to clarify, from the point at which i sent the e-mail to mr. ruben? >> right, that e-mail. >> i sent the e-mail on november the third. i received a very brief phonecall on tuesday, november the sixth i guess. from a general counsel within the company. he said that they had received my e-mail, they take it seriously, they were doing some background investigation and they really didn't need to talk to me at that point in time. i sent to follow up e-mails to general counsel. one in november and one in december of 2007. .. >> physically or from their employee? >> are you a lawyer? i would say the

robert rubin, mr. dave bushnell, the chief financial officer and auditor of citigroup. outlined the business practices that i had witnessed and had attempted to address. i specifically mr. ruben about the extreme risks and unrecognized financial losses that existed within my business unit. i also requested an investigation and i asked this investigation be conducted by officers of the company outside of my business unit. my warnings to mr. ruben involved two different areas within my responsibility. the first one was called delegated flow. the delegated flow channel purchased $50 billion annually of prime mortgages. these mortgages were purchased one mortgage at a time. these mortgages were not underwritten by citi before they were purchased. but the underwriters reviewed a sample of the files after they were purchased. this was to make sure that citi's credit standards were maintained. most of the mortgages were sold to fannie mae, freddie mac or other investors. even those citi did not underwrite these mortgages, citi provided warrants to the investors that purchased

on thursday the panel scolded robert rubin at the citigroup company about how they handled things when he was a top executive there. >>> and today mayor adrian fenty will deliver his fourth state of the district. this speech comes after three years of reforms resulting in stronger schools and safer streets. he'll deliver the address from the new dean wood rec center in northeast at 10:30 this morning. >>> some are calling the g-45 a snuff by israel. but some streets will shut down. sherry joins us with the streets to avoid. >> reporter: good morning. remember the president's inauguration and what a nightmare everything was then. well this could actually be worse. we haven't seen this kind of security and road closures since then. but we do know this metro stop at the convention center will be closed and roads will be shut down. you can see the barricades they have there ready to go. as for traffic, imagine a presidential motorcade and then multiply that by more than 40 other heads of state and that gives you an idea how bad the traffic might be. the summit follows the signing yesterday

his comments as of 4 -- came as robert roman testified before -- robert rubin testified. the commission plans to publish a final report by december 15. the hearing is 3 hours. >> the meeting will come to order. we are in the midst of three days of hearings on the issues of subprime lending and securitization and how the subprime origination phenomenon in securitization phenomenon may have impacted our financial and economic crisis with which we are dealing in this country today. yesterday, we heard from alan greenspan from the federal reserve. and we heard from the officials from citigroup. today, we are hearing again from officials from citigroup, mr. rubin and mr. prince, and later today from the office of the comptroller of the currency. we will continue at our hearings in this same cool, not really air-conditioned room in fannie mae. with that, i would like to begin at our hearing. we have the former chairman and ceo of citigroup. and we have robert lerman, the former secretary treasury of the united states of america -- robert rubin. and we have the chairmen of the e

robert rubin also ran goldman, then left to become treasury secretary under president clinton. then went back to work for citigroup and was an economic adviser to president obama during the campaign and a mentor of mr. obama's top current economic aides. more goldman alums were currently in high positions in washington. representative jim hines currently sits on the house financial services committee. overseeing financial companies. hines is a former goldman vice president. gary gensler is the current chairman of the u.s. commodities futures trading commission and his office is expected to have a big hand in the future regulation of the derivatives market. he's also a goldman sachs alum. and many people might recognize this man, neel kashkari. he was the point man on t.a.r.p. funds, helping to dole out some. on top of this, there are more than 40 former congressional staffers and federal agency employees who registered in 2009 to lobby on behalf of goldman sachs. that's according to the center for responsive politics. >> i guess the basic question is, what does this portend for

more that when these things happen the idea that a buy, one of the smartest people i ever met, robert rubinthe smartest guy, one of the smartest people i've ever met, i am not overstating that smart from a standpoint of knowledge smart in terms of politics and others is making $30 million a year suffice it of the chairman of citigroup and since i didn't know there was a 49 billion-dollar bond down in the bottom of my business. it's just -- that is what i think people are upset about. upset about the paid up and upset that when these things are going on and things are going down in their business as before and the dedicated and police are not disgruntled employees. they said it almost like they were as upset as anybody else and i know in the company's work with people would have been upset if they feel like the brand is being hurt because people live in it. but do either of you want to comment a little bit on the barbell, the idea that the fico scores, the way that you calculated the fico scores and use averages allow them to kind of kick the mortgages so that they can take advantage of the

you have the same actors again, fast forward -- the clinton, robert rubin, greenspan, the entire republican party. the glass-steagall act whereby the whistle. your enemies today is the business-friendly democrats running the party, in your enemy is the mindset of the business community. -- the glass-steagall act whereby the wayside. they are in it for themselves just to increase the bonuses. it is exactly what they're doing on wall street, this bankers. they were putting their own value on the paper. the bottom line, it was only a piece of paper. it had no intrinsic value. it increased their bonuses. they were playing the game. host: what do you think of the current administration? are they business-friendly democrats, john? caller: you have larry summers in there, tim geithner in there. i am not too enamored with obama, to tell you the truth. until people start going to jail, you have a mindset -- is every man for himself. let me get control of this corporation so i can do what i can. one final thing, in this country today we have people who run hedge funds who earn hundreds of millions of

robert rubin, another former co-ceo of goldman sachs before i got there, just before i got there, was very instrumental in deregulating the banking system to deinvolve into the problems that we now have under clinton's administration. they would have these series of goldman ties as well as deregulatory actions that culminate to create a situation where we see crisis and then wonder how that happens. >> host: you used to be with bear stearns as well. >> guest: yes. >> host: what did you do for them? >> guest: again, i've always been involved in structuring, therefore, i do know these very well. and i left to write about them, but i wasn't uninvolved. and when i was at bear stearns, it was in london, and i worked on a lot of different types of analysis. i worked in giving suggestions to investors into not just buying toxic assets, but which government bonds to buy, which governments were better, which were worse at any particular time and a lot of analytic-type advice. i think when you're in the environment and that's why i can look at it from outside and really dissect it, you don't th

you had the same actors, the business-friendly democrats, bill clinton, robert rubin. also alan greenspan. phil gramm and entire republican party. glass-steagall act went by the wayside. your enemy today is the business-friendly democrats running that party. and your enemy is the mind set of the business community where we're in it for ourselves and we'll sell this worthless paper back and forth just to increase our bonuses because, that's exactly what they were doing on wall street, those bankers. bankers were selling useless paper back and forth putting their own value on it. bottom line, it was just a piece of paper that had no real intrinsic value except what they put on it. and it increased their bonuses. what they were doing, playing a game. >> host: john, let me ask you a question. what do you think of the current administration? do you see them as business-friendly democrats? >> caller: let me tell you something. you have summers in there. you have geithner in there. you know, i don't, i'm not too enamored with obama to tell you the truth. it is not, i'm just n

citigroup's former ceo and robert ruben, the bank's former board chairman, apologized for not foreseeing the financial crisis. >> and i deeply regret that. >> reporter: but rubintary, who earned $15 million a year as a citigroup executive, insisted he played only an advisory role. >> i was not involved as you correctly say in the management of the people or the person nell. >> reporter: the panel wasn't buying it. >> you either were pulling the levers or asleep at the switch. >> reporter: citigroup suffered $30 billion in mortgage related losses. but another former executive revealed he started raising red flags back in 2006. >> i specifically warned mr. rubin of the extreme risks and unrecognized financial losses that existed within my business unit. >> reporter: dick bowen said he sent this e-mail to rubin and these other executives in november 2007 of the $50 billion in mortgage loans the bank bought and sold that year bowen warned between 60% and 08% were defective. meaning they did not meet the bank's own lending standards. >> i witnessed business risk practices which made a mockery of citi credit policy. >> reporter: despite the bank's losses, prince and

particularly when robert was the secretary of treasury and of course many of the same people who are now responsible for helping to clean up the financial mess hopefully worked with mr. rubinand treasury during the 1990's. it is a great opportunity for them to make amends. still waiting to see progress on that. but we all did it together. the culture shifted. wall street became good. the percentage of graduates from the top universities for example went in to finance as far as we could figure from the data are around 1970 was 10% of the peak of the sub cspan: bohm it was 45%. it is money and power. its ideology. i spent a lot of time talking to people and washington. i live in washington. and i spent a lot of time talking to people in and around the official consensus regulators, officials, politicians, their staff and obviously the attitudes have begun to change. this is not i would say that level -- people's thinking is and what it was before some timber 2008 but it's the keys to meet people who think finances good, unregulated finance is better and completely unfettered mega banks are the best. this idea is wrong. this idea is dangerous. this idea must be stopped. how a