chip stearns spoke to reporters through a window in beijing. he said he gave workers in a clothing department severance packages and then 100 others demanded them, too, even though they still had their jobs. stearns said local officials forced him to sign a document, agreeing to the workers' demands. and the workers say they're afraid stearns may close the plant and leave without paying them. and the employees are said to be blocking every exit. anne-marie. >> what an unbelievable story. erica ferrari here in new york. thank you. >>> coming up on "cbs morning news," a racially charged trial opened in florida. jurors heard shocking testimony, graphic 911 calls and even a knock-knock joke in the george zimmerman case. you're watching the "cbs morning news." >> announcer: "money watch" sponsored by vagisil. count on it. watch" sponsored by vagisil. count on it. [ male announcer ] imagine this cute little orange blob is metamucil... and this park is the inside of your body. you see the special psyllium fiber in metamucil actually gels to trap and r

jeannie stearns. (sounds like) >> i'm jennie stearns, also with the mission creek conservancy. it's been wonderful to be living in a houseboat there and become steward of mission creek and to see how this body of water which is basically forgotten and neglected was really a sewer at one time has become this beautiful amenity. and that the port and the bodies of the city have really made it the center of the mission bay project as a sort of focus. and -- my job down there is to help with habitat and to put the habitat into our area. at first i thought it was something to get done, getting everybody to help the putting these plantings. as we went on i began to see that it was something to keep going because it's a community focus on the people came down from the new condos on the north side and they wanted to help them there were people from other parts of the neighborhood that wanted to help. together we really did make a very beautiful habitat, and now we have the whole body of stewards in the community. i think this is one of the really special things that can come out of this

ahead of our recession, before we saw things like lehman and bear stearns go under. so definitely a lot of concern there. people are buying protection after they have experienced some upside, and that's the type of thing you see before maybe we do get another leg higher. they come in and buy protection. - so it sounds like a "buy on the dip if you see the opportunity" play. - yes. - all right, good to have you on. thanks james. - thank you. it's time for us to jump out of here for today. coming up next week, how to get into "financial shape" to own a fitness franchse. from all of us at first business, thank you for watching this week. we invite you back for more on monday. until then, enjoy your weekend. ♪ >> now a paid presentation for meaningful beauty advanced by cindy crawford. >> with special appearances by debra messing. >> valerie bertinelli. >> christa miller. >> and stars from tv's royal pains and the mentalist. >> hosted by network tv correspondent katrina szish. >> brought to you by guthy-renker. >> hi, everyone, i'm beauty and style journalist katrina szi

s now given some of the other issues with say lehman brothers for example or bear stearns you know disclosing something early on i think allows shareholders to feel some level of comfort. in the stock price and the future and so the chairman coming out disclosing that and then saying that hey actually i think this might be a good thing for the company prevents less volatility in the stock price so that would be my reasoning for why they would come forward and disclose this but like you said there still needs to be a process and i think a two thirds majority vote in order for them to be designated as such now standards and poor and nouns that a.g. would be joining the s. and p. one hundred index just minutes before an idea and now that it was as unpaid at fifty could there have been any relation between these two events and you know again i don't know i don't necessarily want to speculate but it does seem coincidental that these two things happen at once and oftentimes a lot of these bigger institutions if they're going to make announcements that are significant in nature maybe making them all

s now given some of the other issues with say lehman brothers for example or bear stearns you know disclosing something early on i think allows shareholders to feel some level of comfort. in the stock price and the future and so the i.g. chairman coming out disclosing that and then saying that he actually had there been any relation between these two events and. again i don't i don't necessarily want to speculate but it does it does seem coincidental that these two things happen at once and oftentimes a lot of these bigger institutions if they're going to make announcements that are significant in nature maybe making them all at the same time you know makes a lot of sense so it does seem coincidental but you know i'm actually i'm for the disclosure and for these companies coming forward and if there's something that's immaterial events like this i think it's helpful for these bigger companies to do that and why have you here i want to talk about the markets in general and last month the fed made noises that it might be might begin tapering or slowly reversing the quantitative easing program p

billion dollars and leveraged buyouts and other private equity transactions founded by three bear stearns employees and the one nine hundred seventy s. they recently added a prestigious but controversial figure to their payroll as former cia chief and general david petraeus he began his military education at west point graduating in one nine hundred seventy four and had a distinguished academic career he would eventually earn a ph d. in one nine hundred eighty seven from princeton university woodrow wilson a school of public and international affairs was rapidly promoted for service in the middle east from brigadier general and two thousand to the rank of general in two thousand and seven some have criticized for lack of a direct combat record in relation to the many awards he received his bronze star of metal with valor award was questioned by several former army officers according to business and cider. but betrayed did suffer a major injury in the early ninety's when he was shot in the chest during a live fire exercise but he was reportedly released early after doing fifty push ups jus

bear stearns during the investigation went out to hire to run its clearing unit the head of the sec unithat regulates clearing. his name was richard lindsey. it was right in the middle of this investigation. i was at "the wall street journal" at the tile. we did plenty reporting on this it raises an issue. this does as well. i know george, pretty smart guy. i think he is honest guy. i think he will set up the chinese wall. knows and she knows she is in big trouble. why does george sard hire her? hires her for her, she was producer at abc. journalist. been a flak for a while. one. reasons why you hire her because she knows government. he represents, what does george sard do, he represents people in trouble. this is not a flak, this is great story. adam: qualified and tough. we had to deal with her. she tries to put up a wall. >> she does and she is actually pretty good. i will say this, george sard is crisis communications, they do crisis communications. her, she has a ton of knowledge about -- lori: got it. >> and he represents hedge fund who are under fire. tell me, will she not give hi

stearns is very frustrated.and it is not right, but i do not know what else to do at this point in time. >> stern says he is close to reaching an agreement with the workers. this is something that you see quite often in china because workers do not have faith in the legal system to reserve these problems. for now, he is still stuck inside that company. >> i cannot believe that the chinese government let him give interviews. >> he says at first he did not have food for 24 hours. then the chinese officials started giving him breakfast, lunch and dinner. >> jo ling kent, great story. thank you. dennis: opera wednesday is back on top. the queen of tb in the spotlight again. >> drinking on the job. some companies now think it is a good idea. [ laughter ] ♪ attention - americans living with limited mobility. what do you do when you can no longer get around like you used to? when you fear losing your independence? who do you call? call hoveround now, to see if you qualify for america's premier power chair. hi, i'm tom

it took years to look at some bear stearns hedge funds that were trading oddly.d anything for you that john corzine will be probably charge with at least civil charges? >> it could be political either way. this may have been a case that never would have been brought. liz: it is happening. >> it is not much of a case. charlie: a failure to supervise. >> i am having a hard time remembering other failures to supervise. charlie: i wrote a story about not having the proper controls in place. this is not a secret. during the 80s, i was a kid in college. [ laughter ] charlie: there is a new u.s. attorney for the southern district. what do you think of his job? >> i think he is doing a good job. he tries a lot of cases. spitzer and snyderman do not try cases. they create this, if you fight with us, it will go on for four or five years. your company will go under and by the time you win, you will have nothing left. i am trying to find the right word to use. [ laughter ] beat them could to me, it was a joke. they are suing because he got money for doing a good job. >> he w

the loss aversion can explain why the critical period between 2006 and 2008, bear stearns and lehman brothers actually increased after the housing bubble that had become to burst. another example is pat bennett decision. studies of casinos and game shows demonstrate asking exert a powerful influence on decisions made in the present can even when the odds have changed. it's a chemical rush for the physiology of literature of a big win means a high roller will rarely quit while they're ahead. you might think they're still analogy to be turned between wall street and game show contestant, the aig's entire business model is premised on the idea that u.s. house prices would continue to rise in the future as they've done in the past. psychologists know about these for decades. the problem is nobody told the economist. and rather than confront the messy and subjective reality of how people actually behave, a economist clung to furious object to give mathematical modeling based on invalid assumptions. none of this would matter some of this market is to rule or rational when individuals are n

and bear stearns thought it was journalists. liz: something i guess. >> they actually believe. many derivatives. closing bell ringing. blame the media. twenty-seven minutes before the closing bell. apple takes a stand on accusations. it is going to be a very bad few days and perhaps even longer. we have that story next. liz: breaking news. we told you about zynga, halted on news they're laying off 18% for some 520 employees. look at the stock right now. as far as the stock right now, which is more than 10%, and had been down 12%. let's get right to nicole petallides on the floor of the new york stock exchange about a very tough day for this social gamer. >> reporter: and not hink people have high expectations. you knew that they were wondering how this company was going to make money. now you're talking about broadbased layoffs. 18 percent of its work force. that's about 520 employees. they're trying to reduce cost. during a drastic restructuring of this company and trying to basically stay alive in this business that they do. in the meantime, lowering their guidance to the low

s now given some of the other issues with say lehman brothers for example or bear stearns you know disclosing something early on i think allows shareholders to feel some level of comfort. in the stock price and the future and so the chairman coming out disclosing that and then saying that hey actually i think this might be a good thing for the company prevents less volatility in the stock price so that would be my reasoning for why they would come forward and disclose this but like you said there still needs to be a process and i think a two thirds majority vote in order for them to be designated as such now standards and poor and nouns that a.g. would be joining the s. and p. one hundred index just minutes before an idea and now that it was as unpaid at fifty could there have been any relation between these two events and. again i don't know i don't necessarily want to speculate but it does it does seem coincidental that these two things happen at once and oftentimes a lot of these bigger institutions if they're going to make announcements that are significant in nature maybe making them all

they don't know each other very well, but they actually did talk at some length right after bill stearns collapsed in 2008. obama's economic advisor arranged a call between yellen and obama the candidate then to try to explain to him what was going on in the financial markets and what the fed was doing to respond. i wrote about this a few weeks ago. she really impressed him but she hasn't really had much of a connection with him since. >> all right. so let me just ask you, what's your -- right now your best guess on what bernanke's going to do tomorrow? in particular, the press conference and in particular, jon, will he use communication skills to say to people, wait a second, you're jumping to fast on this bond buying. we're not going to slack off? do you think he's going to let the conjecture continue? >> you say communication skills. i mean, i think some people in the market would question the communication skills at the fed because there's so much complication but i think we have to put the pieces together. we had the fed chairman say that they could reduce their bond buying in the n

this could explain why in the critical period between 2006-2008 the average ratios of bear stearns andn brothers actually increased after the housing bubble had begun to burst. another example of irrationality is decisionmaking so casinos and big money game shows demonstrate past gains exert a powerful influence on decisions in the present even when they ought to change. it is the chemical rush we find from the physiology, the chemical rush of a big win means a high roller will rarely quit while they are ahead. you may think there's no analogy between wall street and impulsive game show contestants but aig's business model was premised on the idea that u.s. house prices would rise in the future. psychologists know about these policies and have known about them for decades. the problem is nobody told the economists and rather than confront the messy subjective reality of how people actually behave economists clung to this curious objectivity of mathematical modeling based on invalid assumption. none of this would matter so long as markets as a whole were rational even when individuals a

in 2008 the fed stopped the collapse of bear stearns by arranging a sale to another firm, but then came the end of wall street as we knew it. mortgage giants fannie mae and freddie mac were seized by the government. on september 14th, merrill lynch was sold in distress, and the next day, 158-year-old lehman brothers failed. you didn't rescue lehman brothers. it set off a worldwide panic when it went bankrupt, and i wonder, looking back, whether you think that was a mistake. >> there were many people who said, "let them fail. you know, it's not a problem. the markets will take care of it." and i think i knew better than that, and lehman proved that you cannot let a large internationally active firm fail in the middle of a financial crisis. now, was it a mistake? it wasn't a mistake for the following reason. we did not have the option. we didn't have the tools. the federal reserve cannot put capital into an institution. all we can do is make loans against collateral. >> the day after lehman, bernanke's fed did something astounding. it loaned $85 billion to a company that wasn't a bank at

bair's defense, the legal authority under which we provided assistance to the merger of bear stearns and jpmorgan chase and assisted aig was 13-3, and the ability to craft a firm specific 13-3 program has been eliminate. we can craft a program but it has to be of wide market availability. that sort of narrow sense that's true. but too big to fail has been around since the start of the early '70s as i said. that was, that was carried out via the fdic's authority. they had the ability to add extra money and pay off uninsured creditors, uninsured depositors in bank failures. and the federal reserve has a role, too, because when we lend to a failing bank before it's closed, we can let uninsured creditors get their money out before the closure takes place and the remaining hundred creditors are forced to take losses. so we still have those modalities but we still have those capabilities of keeping short-term creditors from having to bear, letting them escape without bearing losses. so that's the extent to which, that's why she says yes, that authority we use, the way we chose to do it has

scary to me was jpmorgan and bear stearns. that was really scary. this does not scare me right now.o think that the fed will taper off. i think that is what they want to see. we have a bunch of top reports coming up. cheryl: we are not that to 2007. we are seeing the market pick up. >> i think the regulators would not want to hear these terms being used again we have corporaae balance sheets. the third leg is making a return. let's hope for a better transaction. cheryl: as you look overseas, the japanese market, the u.s. economy as well. thank you very much. dennis: edward snowden stepping in as the source of the week. rich: he says he is in hong kong trying to avoid u.s. prosecutors said. he admits to leaking information about e-mail and phone spy programs at the national security agency. snowden justifies his actions in an interview. >> the program needs to decide whether these programs are right or wrong. this is the truth. this is what is happening. you should decide whether we need to be doing this. they are looking at a billion phone calls. we face a very real asymmetric threa

. >> and stearns says they can double the current floor space for 3,000 domestic restaurants possibley are not saying that. that is stearns' view. >> well, chipotle has been the closest they can do that and the only guys doubling and tripling is whole foods. i like them. they are doing fabulously, and i would prefer them over chipotle. >> a nice rally. >> thank you for bringing that up. >> the s&p 500 up 1% on the nasdaq. >> positive day, and seasonally, you get to the end of june, and you also have, and don't forget the tnx which is how people should follow it, the tnx is down pulling back from yesterday which is the 10-year interest. it is set up today for a good day. >> it seems to be, although we have seen plenty of setups for good days turn around. and the gpo is down 3% given that continued decline in gold. and yeah, looking on the screen here, 1 to 1.5% moves in a lot of the big stocks. >> and suspicion of opens is what? mitigated by the fact that we have had a miserable couple of weeks. >> well, i have been saying on the show that perhaps, i have to figure out whether it is re

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why is the new york attorney general office going after jpmorgan for things that occurred at bear stearns going to his office. they are trying to get him to move on this. whether he does or not? i cannot tell you. we do have a statement from schneiderman. he did not really say much. dagen: charlie gasparino, thank you. you sound more like a tough guy with the voice. charlie: it hits me at the end of every week. dagen: you are on the phone. you are out every night. connell: thank you, charlie. let's go back to the stock exchange here. mark newton joins us. dagen has mentioned a few times this hour at the huge selloff we are seeing in gold. what do you make of that. precious metals are getting hit pretty hard. certainly losing its luster, to say the least. it should be noted, a lot of these economies peaked out in the spring of 2011. a lot of support down there. a lot of the traders taking a look at things in terms of buying tips. we do have a seasonally bullish time. gold has actually bottomed in the month of june or july and rallied through september, october. connell: mark newton, thanks

jpmorgan, it was for since that were done when, in the bear stearns subsidiary that jpmorgan was forcedial crisis. there is case against greenberg which i can tell you it is bipartisan. mario cuomo, rudy giuliani, governor pataki, people saying this case is waste of taxpayer money. we should point out we have statements from schneiderman and greenberg and this is where it is interesting. they are like going at it. if we had sound effect it is would be like to get cats screeching. do we have statements from schneiderman and greenberg? they are interesting. they go at each other. here with go. attorney general schneiderman is new york state law to hold people accountable for their actions. take as shot at greenberg. no matter how many good friend in congress it will not stop him. this is interesting from greenberg. this continue ages of this, the admittedly symbolic vendetta he calls it is a waste of taxpayer resources. they're going at it. it will be played out in congress. greenberg not personally going to congress. i got e-mail. he hires people to do that. ashley: how nice. >> there we

here watching the credit the fault swap spread occurring among the certain firms and others, bear stearns, one could see the storm coming. as to how pervasive and dangerous it would be, one could not foresee that but one knew that there was a storm on the horizon and we spoke about it in great deal with the federal reserve. >> in june of 2008i gave a speech warning that the actions taken with a bear stearns would set precedents and to alter the incentives going forward and have the potential to contribute to the financial instability. in all fairness, i was looking forward to the next business cycle, not the one that we were in. i had no idea that it would come so soon and so swiftly and with such ferocity. >> thank you. ms. bair? >> yes, when i was in the treasury in 2001, 2002i spoke about it and i tried to do something about the deteriorating mortgage standards. i went to academia and can get to the fdic in 2006. the fdic said i'm already on top of this. we started speaking very early about the lending standards. i think we do have a good track record on that. >> when you were at the f

holdover from 2008, you know, where no one has been prosecuted for the collapses of lehman or bear stearnsentencing hearing today, of course, under the victim rights act. there will be those that will be able to put the case that perhaps he should stay in jail, and we should remember that even through the bankruptcy itself, you had not only 5,000 jobs going, but $1 billion of pension funds that were destroyed at the time. at the same time, sherron, i suppose if he gets out early, that's not going to change those dynamics, is it? >> no. and i think for enron victims, there is a sense that justice -- so there's comfort that he has served a fairly long prison sentence. when i give talks on corporate accountability and leadership today, the number one question i get is why no prosecutions of, say, the executives at lehman brothers, because their bankruptcy examiner showed lehman was doing the exact same things as enron. >> and sherron, there are some people who argue there would have been tougher handling of lehman if it were, say, a houston based firm and not a new york based firm. >> that's

bear stearns exists at irving park capital.s who portfolio was valued at $17.7 billion is not central to the other three business lines. consumer banking, investment banking, and asset management. it's also been volatile. jpm has $4.5 billion invested but the quarterly net income hasn't been positive since 2011. investors and analysts have questioned the losses which are caused largely by changes in the portfolio's valuation. the move to spin it off will be gradual. unlike the private equity arms of goldman sachs. this arm of jpmorgan comes entirely from the bank itself. when the future fund-raising round is completed in the next two years, it will be entirely from outside investors. jpmorgan i'm told will fund it until then. principals at one equity, some of whom sit on the executive committee, will leave when the unit separates but an interesting development for one of the last banks that was in this business. guys, back to you. >> and kayla, i'm wondering what your take is on some of the announcements we got yesterday regard