i thought "subprime" was a dirty word. i mean, haven't we seen this movie before? >> we did see this movie. it's a little bit different this time. the people are going to have low credit scores, but they're going to in many cases have bigger down payments, 20% to 25%. back in 2005 and 2006, no down payment, 3%, very low down payments, and, in many cases, very little income. you know, they were the "no assets, no income" kind of loans. you're not seeing that today. but i think there is the possibility that, as this continues, you're going to get people starting to get foreclosed upon and become delinquent on these loans again. >> axelrod: so, who are these new buyers? i mean, who's going to qualify? and will the banks let them get in over their heads? >> well, the banks say they're not going to, but that hasn't been the record in the past. these buyers i think are people who in many cases maybe did okay in the past; they've fallen down to below 620, but they've enough to get a 20% to 25% down payment, so they're in a little bit better shape that way. but there's not

how do bank and credit companies rate nonprime versus subprime consumers? >> since the crisis, we have seen an exodus of the nonprime and subprime consumer in terms of the credit card industry. we have seen 130 $2 billion of credit disappear in the last 132 billion- dollars of credit disappear in the past five years. so which banks and which credit institutions stand to gain or lose because larger banks aren't issuing credit? really see this as necessarily a credit card or credit card bank win. backe cap no one can move down pico but what we have seen his credit card companies and banks move up in response to weakening credit and the dodd-frank regulations. but that has created a gap in the middle which we think will be filled by largely asset-backed finance companies who target the near prime and subprime consumer. to be clear, he could be credit cards, but it also could bp or-to-peer, mortgage loans who will take some of this share as well. >> will that also include pawnshops and payday lenders? will they feel the brunt of this as well? >> no, they have a

the subprime mortgage crisis, typically, the victims were people who held pensions.ften happen is the banks would create these gigantic masses of essentially phony subprime loans, they would describe them -- disguise them as aaa rated and sell them to an investor like a pension fund. your some working stiff, tollbooth operator minnesota with the state pension, and you wake up one morning and 30% of your pension fund is gone. well, you are a victim of the stuff. it is very hard to trace that back to these people. journalists don't want to do the work of identifying who the victims are in the scandals, because it is too complicated. and that is why you often see these crimes described from the point of view of the perpetrator and not from the victim, because we are all the victims. these crimes are real. their existential. they are on such a gigantic scope that it is difficult for us to get or wrap our heads around. that is a very good question to ask. books you mentioned earlier people who are targeted for welfare fraud. in one case, in san diego, profile the woman wh

the subprime mortgage crisis all it was was banks robbing old ladies. it was the same thing.u might hear about people who call up the elderly and try to sell them phony prescriptions over the telephone. >> jon: correct. >> the subprime mortgage thing was the same thing. phony mortgages. they were ripping people off. >> jon: this gets you to the great term in the book if the old lady. if your grandmother went into a bank and ripped them off. said give me your money and they gave it to her and she walked chances are it would carry a criminal penalty? >> absolutely, yes. >> for some reason the white collar ripoff has been decriminalized except for fines. >> exactly. >> jon: in the on the individual basis but on the larger corporate level that's what i was trying to get to in the book. there's a scary moment that we crossed in america where we no longer think of a certain kind of offender as appropriate for jail. [ laughter ] >> jon: that's such a great phrase this man is not appropriate for jail. >> i heard it said to me honestly. i was talking to a federal prosecutor a few year

>> we have always been in subprime.s a company that in 100 years has never lost money and subprime is a manageable 10% of this, and the underwriting standards have not changed during the economic cycle. if you want to think about risk to the business, think about unemployment, unemployment is doing a little better. >> mike, will you consider getting back into home lending? >> we have seen that movie, and the way i would describe it, we settled the contingent mortgage servicer, andhe came back to a very complex bankruptcy, that cost us about $3 billion. and it cost some of the major banks of the day $60 million. we have seen that movie and have other opportunities. >> what do they see outside of auto lending? are you going to get into credit cards, it seems natural for a bank that takes deposits like yours. >> we have been so busy turning the company around but we have not recently capitalized on the fantastic opportunities we have with ally bank. one is a franchise number rated by money magazine three years in a row and

i just think the idea that it's called a subprime mortgage meaning the low prime you know he generally don't want to lend out it's in the title i want to move on because this isn't the only troubling news to come out of the mortgage market now apparently borrowers of jumbo mortgages are highly desired so much so that rich bars can get a better rate than middle class homeowners on a fixed thirty year mortgage so before middle class bars would be able to get a mortgage that was about two to three points below the rate of jumbo mortgages but that's no longer the case so it what happened here and how we're going to class bars able able to get mortgages that all of these days with these these new policies that they're kind of in point we're good it's difficult to get a mortgage because at the end of the day the restrictions are tired and they were before because banks are definitely looking to husband their capital but when you look at what's going on also in terms of fannie and freddie fannie and freddie they lost lots of body and word national laws as a result and they're looking to their

i think the pricing is starting to correct itself, the subprime subprime -- the supply and demand curvechanging. there are more golf courses shut down the new ones opening. it is more of a balance. at one point, we just had too many. too much product and not enough people to participate. we're seeing a correction and that is good news. >> where is the new demand coming from? >> on a global basis, it is really more southeast asia, china, india, some of the latin american countries like brazil, mexico. there are pockets in the usa as well, mostly in the sunbelt, from florida three texas across the california. where the weather is more conducive to playing. it is not widespread, it is very selective. a lot of people are being smarter as to where they build, how much they spend, and how we market the product. >> the new golf courses, are they more members only clubs or daily fee type courses? >> it is a combination of both. the resort courses, where you have got a four seasons or the ritz-carlton that are building branded golf courses with mickelson. then you have the daily fee golf courses

so you're not talking about subprime with no money down. walk away like that with no skin in the game, that's the biggest risk. >> well, the interesting thing is that there's fewer players right now in the marketplace. so that they can actually get more -- gain more market share. they can penetrate and grow their earnings. their balance sheet is really very good. they've made a few asset sales recently that means they can go out and acquire growth if they want. i think it's interesting particularly since it's down 18% since middle of february. >> pete, react to his interview yesterday with kelly evans. >> the throwing darts? >> basically throw a dart almost anywhere in the market over the next six months it's going to be up. >> i love bill miller. >> and that's paraphrasing. >> i still think and i've always thought there's always a reason to be picking individually, and i don't think throwing a dart will get you the upside. >> let's talk about where you're doing your final trades. the dow is down 157 points. a rocky day on the street. we're

he is covered the bond trading scandal and the subprime crisis. is a great time to invoke something like wall street is rigged. even though markets are at an all-time high, if you could go will a toninutes you of media appearances. and sell books. the onus is on him. they have to prove that investors are being hurt. we have not seen it yet. host: what does it mean for the individual investor? guest: not much. it is not like it was decades ago and you would pay a ofmission for buying shares ibm or coca-cola. a lot of people are involved. there are 401(k)s and roth iras. they are paying lower costs. there are huge shifts. people are not calling their broker insane i mean this or some this. -- and a saying by me this. if you are talking about transactions being a fraction of a penny, we are talking about billions of transactions. this is a tiny, victimless fractional crime. but multiplied endless amounts, it is a big amount of money. it is like a parasitic thing. you take a little bit from every individual investor and it benefits a handful of nefari

>> by, the fha has been buying subprime mortgages.ing subprime mortgage business with 3% down payments and i think that is incented and it is also gone into the apartment market. so you got the low-income housing being driven through the fha lowdown payment program and got the apartment market. liz: right. >> both driving at the same time. and now i don't think it is, out of control but i do think it is going to have to adjust particularly if long-term rates move. the fed has been buying down the long-term rate market. i think that's a challenge. because they can't keep doing that forever. now i don't want to imply that i don't think the economy will continue to grow. we're growing way less than we ought to be. david: markets are forward-looking, john. you were former, one of the best bankers in the whole world, growing bb&t tremendously. you had to focus on rates. they haven't been going up. if markets are forward-looking why aren't rates going up right now? >> i think markets are forward-looking and opportunistic. a lot of traders a

that nobody understood what was in a subprime cdo.at the bottom of this story that i just described, nobody understands the stock market. it's crazy. the stock market has become like a secret. how it works. >> and that's a question. >> they may worry less about their firm, but they're worried as much or more than ever about their own reputation because the regulatory juteny and political risk to them is that much higher. jamie dimon or blankfein, they're quasi political figures, yeah, they're corporate figures but feeling a political responsibility or accountability or exposure that they've never seen before. >> there's a bigger problem here. when i was growing up, i guess i'm getting old, you invest in a company with the idea some day that will company would be more valuable. 10, 20 years ago. >> things got short and people were focused on the corner. now we're focused on milliseconds. we need to get back more to a bit to last, invest in the bit to last, invest in the maybe there's policy changes necessary to incent for long-term buy

some are russian olagarchs, and some are passing on the subprime loan debacle.ber of folks could say the tide could turn against necessity. the nba owners group didn't do anything when the doj suit came down that donald sterling lost discriminating against black and brown people in his homes that -- and the apartments that he owned. they didn't do anything then. why do they feel like they have to do something now? krystal, who has significantly changed this time? >> well, i'll tell you what has significantly changed. i think there is a strong case to be made that outside of the moral argument that this guy has no place in the league. i think also there is a clear case that it is no longer in the nba or the owner's best interest. business interest. to keep him around. that's where yes it's on commissioner silver. yes, it's on the owners to pressure sterling, but it's also on consumers. it is also on players. a mraud the efforts of reverend sharpton to press advertisers to say do you really want to be sponsoring this guy, because that's when this moves from just,

what kind of other subprime that we are not seeing today will emerge that will shock us that will be a stress for our economies okay? so you ask me what do we do about it? first of all, we have learned a little bit. so all the departments are alerted to that. they have this additional sense that they have to open their eyes, their ears, their models to try to spot what is the unknown, what is the black swan out there that we're not seeing. in addition to keeping their eyes on what would be the normal risks. so we are doing that and we are really in the process of refining and strengthening our risk-spotting analysis. >> for crises? >> yes yes yes. >> for depression, i see confidently there won't be any depression? >> can you guarantee us no depression? >> let's answer that josh. are you guaranteeing no further depressions? >> yes. >> wow. >> i'll personally are guarantee it. [ laughter ] >> we did three things at the imf that have been carried on. we substantially strengthened our staffing in understanding the underlying economies and developments in financial markets. secondly we in

it's subprime mortgages, old line mortgage portfolios. the value of that rose very sharply. and a lot of the executives were just talking about how the u.s. housing market recovery is one of the main stories. >> you're telling us a lot of stuff that's going the way of citi. can investors expect citi give a dividend any time soon? it's been a while since they've seen one. will the federal reserve give the okay. >> they have a one. cent dividend. they didn't pass the capital return portion. executives today on the conference call said they would not be resubmitting that plan to the fed instead hunker down and try to rebuild those process make them morrow bust, resubmit next year so investors have to wait three more quarters for that. >> kayla, thank you very much. citi is just the start of a big week for corporate earning. more banks are due to report along with a handful of blue chips, coca-cola, general electric, intel. dominic chu with a look ahead. >> reporter: this is a huge week for bank earnings. in addition to citigroup all the other major groups will report. on wednes

it's a very small share and a far cry from the heady days of subprime lending. i'm diana olick in washington. >>> maryland lawmakers are trying to help some of the have-nots. they've easily passed a bill to raise the state's minimum wage to $10.10 an hour by the year 2018. it's expected to be signed into law by maryland's governor who made raising pay levels a priority this year. the $10.10 minimum matches a measure passed in connecticut last month and it's the same amount president obama wants to establish as a federal minimum wage. >>> and the president's signature legislation the affordable care act is getting some credit for putting more americans on to health care plans. a new survey from gallup says the percentage of americans currently without health insurance dipped to a six-year low thanks in part to the law. black and low-income americans saw the biggest declines in the uninsured rate with drops of more than three perch points in the first quarter of this year. separately, the government said payments to insurers for 2015 medicare advantage plans would

for many of us, it is how we got into the subprime problem. >> so it has been done to scale back thattive. we have a whole plethora of new rules. your point is right. many countries do not have a mortgage interest deduction. the only variable is because it is built into the economics of housing, and because for every new home built you create three and $89,000 with a revenue are community, these considerations. we're not talking about a small percentage of americans. we're not talking about the wealthy that get impacted. we are talking about the middle-class family veterans a couple of incomes implies that first home. if they did away with this deduction, what would it do to property valuations in america? many people specifically put a huge value on my home is worth x or y. if we did away with the deduction, what would it do to the prices? >> let's look at what brookings and urban put together. the estimate of the drug would be between 6.9% and 11% in home price declines. it would be a one-time event but it would hit a more expensive market the hardest. the ones most impacted by a on

cook some of the had a subprime mortgage bills and so you. know banks targeted african-american latinos and it turns out asian households for the subprime mortgages. they are moreed likely to get these exploding loans and other things that were on the states -- unsustainable. we have seen a decline in home rates amongst african-americans thelatinos as a result of subprime mortgage crisis and the great recession. these declines are still continuing. the rate of decline has been 32% for white, 46% for agents that -- 46% for and 56 asians, and 56% for latinos. were in these states where they lost a lot of home value. host: we are reading these numbers put up a center for global policy solutions. if you are interested in it, go to their website, gl obalpolicysolutions.org. we go to tim on the line. caller: so many of these problems can be solved as far as labor and wages and more money to the government. taxes and get rid of the 10,000 pages that obama has .ritten if we have dropped to 17 for the , people are closing businesses. is not about heal

they will be able to have riskier activities in terms of making subprime loans. lower cost.analysts are expecting that will help their bottom line. >> is this ipo frenzy sustainable? we asked bank of america's head of tech equity capital in an exclusive interview. >> if you look at the headlines that come out, they tend to focus on the activity level as comparable to 2000. the natural question every one has is how sustainable it is. and if you look at health care and technology, people look and say, that cannot be sustainable. but there are some encouraging signs. the market is differentiating between companies. there are always stories that come out when a company with minimal earnings or revenue get s a huge multiple. however, the market has been separating between the types of companies and quality of revenue. that is something that would suggest that it is somewhat sustainable. deals inpo's to acquisitions and mergers, comcast is taking a bite out of time warner cable. and coming up next, we will hear cofoundertone, the twitter, about what he has learned in silicon valle

can you really compare these trailer park trade to subprime?e not inside. >> anthony, i am sorry, we have to run. thank you for a much, bloomberg markets magazine, anthony effinger in portland, oregon, check out the issue in bloomberg markets magazine and on bloomberg.com. he playedup, once second fiddle to jerry seinfeld, now he is the master of his own domain. we will hear from actor jason alexander. he is no george costan za. ♪ >> welcome back to "market makers." i am stephanie ruhle joined by erik schatzker. jason outlander, the former "seinfeld" superstar, is weeping george costanza under the rug literally in his new standup act at harrah's in vegas. i asked about his new gig innocent city and the new to rocking. wi-fi branch into the market and eventually to casinos and nightclubs and about 2.5 years ago started performing under my own name. if you are doing standup comedy, vegas is kind of mecca. that is the great place to be playing. >> let's stop by your own name and the value of a brand. every artist, musician, actor wants to have a b

not the least of which, it contributed to the subprime crisis.nk it will be a move to .5% and they might get to 1% reasonably quickly. >> this is a scenario where everything is smooth. how does china play into this? let's say a hard landing is five percent or six percent. does it stop the recovery in the u.s.? >> it will not be good news. there are good and bad things when china slows. they are a voracious consumer of commodities. the united states is becoming a bit of an energy producer again. it is a double-edged sword. i do not think that china is a risk for the united states. it is certainly a risk for countries in the region. i do not think the u.s. is a risk from that. europe is much more important than the united states, both directly and indirectly. the ecb have given some positive signals. more than likely, it is ready set that-- pretty much rates are going to rise and sooner than the market thinks. itwe get increases in jobs, will be important. also, the number of people who could not get to work because of the weather, we will look at

ran into trouble by making bad bets on subprime mortgages.l ever get their money back on g.m. also, a computer bug called heart bleed is causing major security headaches across the internet. website are scrambling to fix it. credit card numbers and other sensitive information. the breakdown revealed this week affects a widely used encryption technology that is to protect on line accounts. >>> most taxpayers think filing a tax return is simple. the associated press and poll finding that 90% of americans would rather leave the nation's tax system as it is, complications and all, than pay more money and fill out a simpler tax return. >> pay more money? >> that, i don't understand. >> only 7 pefrs said they would pay more. >> why would you have to pay for more? >> the pay it was worded, are you prepared to pay more? >> can't you have a simpler return that you don't pay more? >> you wouldn't be paying an accountant as much. completing a federal tax return is easy. those who hire a tax preparer are apt to say it is hard. and i have to tell you i'm

think that what that mandate is incredible and he's taking all kinds of grief and he didn't see the subprime crisis coming. but given the hand that he was dealt to play, he did what he could and i think a lot of people would've done the same thing. >> host: do you foresee a class action lawsuit given what you've written? >> guest: that's like zero some bickering between political parties. you want people to fix the problem. gimme a solution. here's the problem. let's just do this and not worry about wanting people or the names of high-frequency traders who did all this. don't think people on national tv. it's just not necessary. the more that there is there is a less likely solution because the people who have perpetrated upon feel like they are exposed. and so let's just fix it. >> host: the thing that we can start looking at this problem? >> guest: yes, i do. the money is funneled into the process with these advantages on these exchanges are the overwhelming debate. and we will see this fog machine in ngress and what & dat dave don't mean veryh or is false or whatever but there would be th

think that what that mandate is incredible and he's taking all kinds of grief and he didn't see the subprimerisis coming. but given the hand that he was dealt to play, he did what he could and i think a lot of people would've done the same thing. >> host: do you foresee a class action lawsuit given what you've written? >> guest: that's like zero some bickering between political parties. you want people to fix the problem. gimme a solution. here's the problem. let's just do this and not worry about wanting people or the names of high-frequency traders who did all this. don't think people on national tv. it's just not necessary. the more that there is there is a less likely solution because the people who have perpetrated upon feel like they are exposed. and so let's just fix it. >> host: the thing that we can start looking at this problem? >> guest: yes, i do. the money is funneled into the process with these advantages on these exchanges are the overwhelming debate. and we will see this fog machine in congress and inside the sec with lots of numbers and data

bush administration, if we go back, let's go back further to the snl crisis, which compared to the subprime mortgage crisis paled in comparison. we put about 800 people in jail. >> 800 people in jail. >> yeah, and a significant number in that case. >> fast forward to the major scandal, which was the accounting scandals in the early 2000s. enron, arthur anderson, even the george bush administration recognized the symbolic necessity of going after the heads of these companies, because people need to feel that justice is blind. fast forward again to the next round of scandals, and there are no prosecutions. >> good evening. we have important new documents in the george washington bridge scandal, and that's coming up shortly, but we're going to begin in nevada on 600,000 acres of grazing land just west of mesquite. it's where lifelong rancher cliven bundy has been raising his cattle for years on what is federal land. he's been doing that without paying the necessary fees. in 1998, a judge ordered bundy to remove his hooved trespassers, and now after nearly two decades, multiple court orders and

and so the subprime mortgage collateralized debt obligation is one creature. the structure of our stock market is another creature. and the -- the point is, complexity serves that purpose. it serves the purpose of disguising the interests of insiders. >> michael lewis, the book is "flash boy." great thanks, michael, really appreciate it. >> thanks for having me. >> that is "all in" for this evening. "the rachel maddow show" starts right now. good evening, rachel. >> good evening, chris. thanks, man. and thanks to you at home for staying with us for the next hour. okay. one of the things that mitt romney proposed when he was running for president is that there would be a new global designation for countries that the united states liked doing business with. any country that met mr. romney's criteria would be considered part of a brand-new international economic zone. and mitt romney had a great name for that new zone. it was going to be called the reagan zone. the ronald reagan zone of economic freedom. and this is what mitt romney said that zone would look like

>> because they committed aon thishing misdeeds, engaging in subprime fraud to lying about the london whale episode where they had this suck hole of losses that was expanding within the company and they didn't disclose this in time to their investors and shareholders. there were so many things that went on at chase and they were charged collectively with all of this stuff. they were burning off banker. they somehow missed the fact this gigantic hedge fund wasn't making any trades and they could have sounded the alarm years beforehand. >> this is jamie diamond testifying in 2012 with barney frank in the chair. >> you did say finally that there would be some callbacks for compensation. you've also taken some responsibility here. will the callbacks -- is your compensation on the table for callbacks? >> this will be reviewed by the board? >> just answer my question. >> my compensation is 100% up to my board. >> is it under -- you said there are going to be callbacks for people responsibility? is your compensation in the pot being considered for that? >> they will seize what they see is ap

they're more likely to be in a subprime mortgage. they are in serious economic difficulties.erlying all of that is making 77 cents on that dollar and it is worse for women of color. what they want is to have a -- to be in the same job to be paid the same as their male count counterpa counterpart. very simple, ed. >> they view this as government intervention. and it's meddling this business. so i just think that this is -- why they would want to just give this to the democrats and independent voters i might add, i don't get what they're doing. congresswoman, lisa, thanks for joining us. >>> still ahead, glenn beck's latest gift from god ruffles some feathers. next. lots more coming up. i take prilosec otc each morning for my frequent heartburn. because you can't beat zero heartburn. woo hoo! [ male announcer ] prilosec otc is the number one doctor recommended frequent heartburn medicine for 8 straight years. one pill each morning. 24 hours. zero heartburn. frequent heartburn medicine for 8 straight years. ♪ i ♪ and i got the tools ira ♪ to do it my way ♪ i got a lock on equiti