t.a.r.p. funds since evidently it wasn't required in the actual providing of the money? >> we believe that requiring >> we believe that requiring recipients to tell their use of part of transparency and that is why we think this recommendation is important and as a policy we don't, we tend not to put the policy recommendations as what congress or the treasury should do. we do say what treasury should thibodaux suggests legislation for congress to us as a policy meant but we certainly do feel it is our obligation to present why we think it is such an important factor of transparency. >> the contracts that the treasury device with the banks for the distribution of t.a.r.p. funds prohibits the use of the money for any purpose? >> different contracts and different programs, there are some restrictions on stock buybacks, and the capital purchase program, on certain restrictions on increasing the level of dividends so there are some restrictions although not many. >> so the fact they would use the m

the t.a.r.p. witnesses include the treasury department official in charge of the program and special inspector general. this is two hours. >> this hearing of the subcommittee on oversight investigations of the house financial services committee will come to order. our hearing this afternoon is entitled t.a.r.p. oversight, warrant repurchases and protecting taxpayers. we'll begin this hearing with members' opening statements up to 10 minutes per side and we'll hear testimony from our first witness. after that members will each have 5 minutes to question our witnesses. i will then excuse our witnesses and invite the next panel to continue with witness' questions. the chair advises members that given the busy afternoon schedule i'll be keeping myself to 5 minutes. without objection all members' opening statements will be made part of the record. i now recognize myself for up to 5 minutes for an opening statement. the past month or two it's been nice to see some good news regarding the t.a.r.p. after

the t.a.r.p. program, warrant repurchases and protecting taxpayers. it is in the taxpayers' best interest as soon as possible the federal government get out of the trillion dollar bailout business and out of the practice of owning and running private businesses. this is shotgun that the administration also supports. how soon can we withdraw taxpayer money and end the practice of propping up industries? they must commune kate to the markets and taxpayers the exit strategy and the timeline for it. we need to put an end to the federal government picking winners and losers in the marketplace which has facilitated unfair i think we will hear some criticism from some of our witnesses today they are shorting taxpayers on the investment. this may be true and it may not. the accusations may be more for headlines than it is true. the best model a methodology to value warrants has to be determined. taxpayers must be assured treasury is using the best means to recapture the money of taxpayers. i hope that our

t.a.r.p. programs it is repeatedly failed to adopt recommendations that sigtarp believes are essential to providing transparency and fulfill treasury's commitment to implement t.a.r.p. with highest degree of transparency possible. now one of the recommendations is that the treasury should require all t.a.r.p. recipients to report on the actual use of t.a.r.p. bonds. treasury declined say that reporting would be meaningless and i've got to tell you my constituents probably don't think it's meaningless to know precisely where their taxpayer dollars are going so my question to do is will you actually adopt that particular recommendation? >> well, first of all we welcome the recommendations of the sigtarp of their bodies. as i mentioned earlier in the testimony, we have adopted or have come very close with a few minor details to adopting about three-fourths of the recommendations we have received. >> well, there's only four recommendations. he says you haven't adopted any of them. i just want to g

t.a.r.p. but i think you have to give credit where credit is due. i voted against the release of the second to launch which was the only vote on got to have as a member of congress because i didn't feel the accountability and transparency standards were in place. the fact become house had a framework to allow the senate didn't agree but having said that we were facing a financial systematic financial meltdown last september were we not? >> in the conducting of politics that is an opinion we've heard many times from the flow of credit may still be impeded the fact of the matter is the stability of the financial system, the stress tests on 19 banks for example would seem to suggest some stability has returned to the system lacking as recently as last fall. >> i think we're in a much different situation with last fall and it may well be t.a.r.p. is responsible for that were responsible in part. part of the reason why we do section 3 and talk about all these programs is so that you can have in one

the t.a.r.p.f all we wanted was a yes man or yes woman, the treasury could ignore. it is critical that oversight investigations and audits of t.a.r.p. remains unencumbered. congress may have given treasury's some leeway when it comes to the t.a.r.p., but we didn't give them a blank check. the problem is we can't even say whether the t.a.r.p. programs are working or not. because the information that would allow congress and the taxpayers to analyze whether they are getting a good return on their investments has not been made available. i hope today's hearing in this special ig's report will be a wake-up call to the treasury and the fed, that our financial system cannot be run behind closed doors. again, i want to thank mr. barofsky for appearing today and i look forward to his testimony. at this time i yield time to the ranking member from the great state of california, congressman issa. >> thank you chairman and thank you again for this the eggers oversight brick osu utt said so often all we ask f

the t.a.r.p. inspector general recently said your white house of withhold and to much information on the bank bailout so my question for you is are you fulfilling a promise of transparency and the white house? >> on the list of health care executives who visited us, most of the time you guys have been in there taking pictures though it has not been a secret and my understanding is we sent a letter out providing a full list of all the executives, but frankly these have mostly been at least photos phrase for you could see who was participating. with respect to while the negotiations not being on c-span, you will recall in this very room that our kickoff event was here on c-span, and at a certain point, you know you start getting into all kinds of different meetings, the senate finance is having a meeting, the house is having a meeting. if they want this to be on c-span, then i would welcome it. i don't think there are a lot of secrets going on in there. and, the last question with respect to t.a.r.p

>> they did take t.a.r.p. money, didn't they? >> mm-hmm, they did. >> 2.3 billion in t.a.r.p. money. >> thank you, larry, i love that. >> he knows every one's tally for t.a.r.p. >> that would be certainly something that might be at risk, we become a creditor it is preferred, not quite sure how it would be dealt with if there were, in fact, a bankruptcy. no doubt, trish, there would be lost value for the taxpayer there. the question is really whether the government wants to try to prop this thing up yet again because it does not appear that cit was going to access the private capital it would desperately seem to need. >> an argument? >> geithner is on his way to sell bonds to saudi arabia. he spoke about cit in london. did he say anything? you know, the short run we could put them out of business and into bankruptcy, i suppose, but in the short run, as "the wall street journal" reports this morning, got 700 million companies, $4 billion in debt and over the weekend, the administration talked about helping small businesses. so, do we know what geithner is thinking? say anything

the top cop over t.a.r.p. is talking tough to the obama administration and josh levs has that in the next half hour. positive predictions from the federal xhe from ben bernanke. he is updating the financial committee. bernanke says the fed will be able to reel in. he is also pledging to keep the key bank lending rate at a record low for an extended period. economists predict rates will stay near zero through the rest of this year. >>> the nation's leading lender to small businesses says it may still have to file for bankruptcy, that's despite a deal cit group reached just yesterday. they agreed to give cit a $3 billion loan so the company would have time to restructure its existing debts but cit says the money might not be enough because it neetds to pay off $7 billion in debt maturing over the next year. >>> the health care fight heats up. and he is pushing democrats to move the legislation forward. mr. obama meets with key house democrats today and he is expected to make brief remarks on health care. next ho

>> well, we have to remember there's really bee a sort of t.a.r.p. 1 and t.a.r.p. 2..r.p. 1 was when secretary paulson basically pushed $350 billion out the door, mostly to the large financial institutions, on a kind of no questions asked basis. and that's the part that we've all struggled with ever since. what are the banks doing with that money? the second half, which is t.a.r.p. 2, is the part that secretary geithner has had. and he's taken a very different approach. he's sort of tried to put down multiple bets, you know. he's trying to work in the housing industry, he's trying to restart small business lending with those programs, he's tried to do the stress tests and helped lift some of the banks up, and he's fried to preserve the money they'll have available if there are future problems. >> so you believe that the oversight is working? >> well, what i believe is we've got a lot of programs going on. oversight itself, i think it's working in the following sense. back when secretary paulson spent the first $350 billion out the door, basically that money panel was

team obama is going to use t.a.r.p.t know, maybe you have to give a campaign contribution. what do i think about this. >> i think it's a bad idea the way the others were a bad idea. injecting government into the private sector has proved to be a bust not a boom. i think honestly, larry, we would have seen a recovery months ago if the federal government wouldn't have made a lot of these extraordinary actions. >> what do you think of that, robert mcteer, a pretty hash indictment. >> i agree with two-thirds of it. i believe the help for the banks was helpful and disagree that the automobile industry shouldn't have occurred. >> bob says it was good idea to help the banks, do you. >> i just read two days ago, an arizona state university said today, after all this intervention, government now control controls or owns 30% of all private business profits in the united states. that's before we nationalize health care. so the direction that we're going and it's not positive. so i'm very concerned about that. >> robert mcteer, swi

the t.a.r.p.. with the president, he is at the president's center attending a round table with health care providers and wait for the president to make his remarks. we will bring in cnbc's john harwood on the day where "the washington post" post shows for the first time less than half of those polls support president obama's attempted health care reform. >> it's a tough moment, but i want to say if leesman agrees this is exaggerated, i think this guy is behind the eight-ball. we will have to see how he justifies that. president obama set a tremendously ambitious agenda from day and now is the time where he finds out really in the heat of the summer whether he can push this thing through. the house appears to be on track to getting a vary ant of what they laid out last week. you saw last week and maybe you talked about it earlier. nancy pelosi is talking about the tax increases which they laid out, making them only applying to couples earning more than $1 million a year. to reduce the potential for

funds and the t.a.r.p. program was designed to provide basic level of financial stability in the marketplace last fall with we saw things falling apart. you can't erase that fact. it is a fact. they believe that the time they didn't need it, but they understood what they were being told by treasury and by the fed about the current situation. >> so -- >> so they accepted the funds and pursued a strategy of raising capital and replacing those funds as quickly as they possibly could and get out of the t.a.r.p. program, for all the reasons you talked about before on this program. >> so the truth is that some institutions are too big to fail. we have to -- but the catch-22 with that is that they're systematically important so we have to bail them out, no matter how dirty you feel doing it. and then you get cit, they're not big enough to where they're systematically important so we let them fail. does that mean from here on out we need to make sure no one gets too big to fail? that's what we have to do then. >>

keeping tabs on the t.a.r.p. t.a.r.p.eneral neil barofsky on why the banks are misusing taxpayer money. "squawk box" begins right now. >>> good morning, everybody. welcome back to "squawk box" here on cnbc. first in business worldwide. i'm becky quick along with jkoe kernen and carl quintanilla. our first guest host is former fed chief fred mishkin. he'll be joining us later. let's take a look. the dow futures have been building through the morning, as we've heard, from five individual dow components. right now you're talking about dow futures higher by almost 48 points above fair value. this is coming after six days in a row of gains for the dow. the dow back in positive territory for the year. we'll see if this can hold. let's get to some other top stories. >>> fed chairman ben bernanke is on his way to capitol hill. he's going to be delivering his semiannual testimony on monetary policy. this is the old humphrey hawkins. he goes before the house financial services committee today, starting at 10:00 a.m. eastern time. >

t.a.r.p., all of the other pieces. he was trying to get a catch-all number to capture all of the obligations that the federal government potentially has as a result of this and add it all up. in order to make the point that this is bigger than t.a.r.p. which is the one thing we hear about in the media and most people are familiar with. >> he's not looking forover seeing fannie and freddie may. he comes up with the number -- >> fed up with the spending bailouts. >> he's actually saying if fannie and freddie never made back all of the money that they have loaned out first every single person who has a fannie or freddie mortgage defaults on that mortgage, then it contributes to the $23 trillion so why would he even look at that? >> what he's saying is that the reason that number is important to put out there is because it gives you a sense of what all the potential obligations are of the federal government. >> the total liability. >> somebody needs to add all that up because he says although his job is just to look within

low on capacity in the t.a.r.p. but we -- i don't know anything about british -- >> well, i have information here we'll put in the record. we have had recent discussions with bac and ml management who contend that they have the required shareholder support and are confident that a transaction will be approved with tomorrow's vote. if approval is withheld, ml will continue to have access to the various facilities and programs currently in place in the united states. additionally, it is reasonable to expect that ml would be provided necessary support to preclude sufficient systemic disruption. are you aware of that? >> i assume people are just -- you're talking about a board report, where they're talking about access to fed lines, or the fact that we've -- >> from the richmond fed to the u.k.? >> yeah. i'm not aware of that. >> you're not aware of it. and you were never aware of any back-up plan, yet the only thing -- and you never threatened lewis to remove him or his board. >> well, you keep putting words in my mout

we're having repayments under the t.a.r.p. i think it's important for congress to ensure that that money is kept in the treasury, used to pay down debt. we have warrants that are going to go to auction next week. we talked about jpmorgan today, their earnings. there is a good, clear, transparent process for the treasury selling back the warrants. they couldn't come to an agreement and now it's going to go to auction. i think it will be interesting to see what happens. and one final thought about jpmorgan, i think it came true in the stock wasn't trading up because jamie dimon was very honest. the consumer hasn't come back yet and commercial real estate. there's a lot of pain to come over the next 18 months to two years in commercial real estate. >> senator sununu, thank you very much for being with us today. by the way, joe, i just got an e-mail from judd greg. of course i like joe. he's the only person i know that's to the right of me. anyway, that does it for us today. "squawk on the street" is next. >> friends like these. >

it did include the t.a.r.p. expense. >> okay. so everybody knew about the t.a.r.p.yes. >> the number we had at -- >> $4.93. >> at $3.54 everybody was -- that consensus number was including the t.a.r.p. expense? >> yes. goldman very clearly articulate what had that expense's impact would be. >> so everyone can then look at the nongap and the gap and decide whether it was above or below based on whether they included the t.a.r.p. into their estimates. >> right. just a quick answer, you know, what do you do with the stock here? if can you look out a year, i think you'll be happy on goldman sachs, its the leader. after the run it's had, given these results, and you have to figure the third quarter will be pressure, i do not think you need to buy it at $150. >> when you say look out a year, what's the brains you're expecting? >> well, it all depends on what the market delivers to us. if we're in an improving economy and better capital markets environment, you could see $180 plus goldman sachs stock. if the market remains tough and the economy remains tough you're probabl

toes are the words of the special inspector general for the t.a.r.p. program, set to testify before a house oversight committee tomorrow. back to you. >> okay, hampton pearson, thank you so much. >>> well, july 20, 1969, 40 years ago today, americans watched the first landing on the moon. while space travel has grown by leaps and bounds since, no one has walked on the moon since 1972. that is expected to change as commercial competition for lunar exploration is heating up. nasa says it will take $35 billion to get back to the moon. cnbc's jane wells has that side of the story for us. jane? >> hi, trish. you know, there is the drama of returning to the moon and then there are the market opportunities. >> the eagle has landed. >> roger, tranquility. we copy own the ground. you got a bunch of guys about to turn blue, we are breathing again. thanks a lot. >> the apollo missions cost billions but out of it came gps, kidney dialysis machines, cordless tools, et cetera, we need billions to go back but the private sector is hoping to do it faster and cheaper.

as well as the treasury department, t.a.r.p. oversight organizations to finish this and i thank again the witnesses. this hearing is concluded. [inaudible conversations] [inaudible conversations] >> the u.s. senate is about to meet to continue work on defense department programs and policy for the new budget year. the bill includes military troop levels, military pay, weapons programs and authorization for the continued wars in iraq and afghanistan. a number of amendments have been offered. today votes are expected on at least two. one dealing with the nuclear arms agreement with russia and another on the f-35 joint strike fighter. so far this week, senators have added legislation to the bill expanding the hate crimes definition and removed authorization for seven more f-22 fighter planes. final passage vote is likely to occur next week unless senators can reach an agreement on amendments. live coverage of the senate now on c-span2. the guest chaplain: let us pray. we ask not for tasks that are suited to our strength, but we ask

the whole issue, 22.7 trillion, the government has two assets underneath the t.a.r.p. money its begin, the preferred stocks it has, 5% for five years then rations up. all got these warpts. how will the government come out on the $700 billion it committed. they got back 10% and still has the warrants that it's going to get on top of that. the government made 22% on an annualized basis on the goldman deal. >> a little more than an hour ago goldman sachs bought by $1.1 billion. so the government will bring in $1.1 billion. 23% return. >> now free -- >> completely, 100%. >> that would go to those companies still holding t.a.r.p. -- >> average $700,000 bonus for employee with impunty. >> they got out from under that restriction when they paid out the t.a.r.p. money. the other bid -- any or sort of tent cals that could come from a company connected to the government through the t.a.r.p. program and dividends. i guess it's my job here -- >> it is. a-team would have made that transition without letting the audience know -- >> mary shapiro and gary gents letter have wrapped up

money back. >>>> i will givive you t.a.r.p. no moree t.a.r.p. go hehead trish. >> arere y nene? are yoyou done? >> eelent. >> we stilill t t inutes left in this houour. ming up next, dadas call to acacti for your portfolioio inoo the right t ti to change yr asset allocatatn?n? find out nenext >> datat overhoho shouldldrun urur feral reserve. an will politics t tmpmp what's bebe for the economy? all ofhahat c cining here only onon t c cl. so you can bee disciplined trader. by selececngng fm eight advanced tririggs,s, yourur oerer gs executed, evenenhehen u're busy. and with trailing stopops help you lock in profitss d minimize risk, you can be confidentntini, no matter which wayyththmar. nd out why more and more acacve traders are turning to f fiditity r a smarter way to traradenlnle. trade e li a a p. trade with f felelit sure, but t doee speak hybrid? yes, we do. and we can s s 7 700 miles on a single tatank and epa estimamate 41 mpg city we speak the most f fueefefcient midsize sedan iamamica. we speak the allll-n i get in... and drdrivonon >>>>> lclce back, eveverodody. were

we did not have the t.a.r.p. put capital in and we did not have a buyer as we did in the case of bear stearns. so we were faced with sort of an unfortunate set of circumstances. >> i will conclude, i see the red light. i want to say if we have missed the oversight responsibilities, i need to know what you consider in writing and we will put that in our letter to you. what you consider government could do more of. i do know that we did not -- this committee under the former administration did not do the kind of oversight. maybe we were asleep at the wheel or looked the other way, but i would like to hear from you what government could do so we don't get in this situation again. i think really it's worse than the depression of the 30s. thank you, mr. chairman. >> i yield to mr. garrett of new jersey. >> thank the chairman. >> with hard to aig, saying there is a gap in coverage with regard to authority and regulation there, we had a number of panels and financial services looka the this and the bottom line is there

the original point of the t.a.r.p.announced was to take $700 billion of toxic assets off the books and records of banks. that obviously has not happened. one of the other goals was increase lending. i don't think that's happened either, though i think that there might be far greater decrease in lending absent the t.a.r.p. it depends on your definition of success. if it was to avoid a complete class of the financial system, t.a.r.p. along with other programs may have achieved that goal. >> give me an overall grade. >> i hate to do letter grades. i'll maintain my optimism that treasury will adopt my recommendation. i'll just give them an "incomplete" for now. >> we'll see if the chief of staff gets back to you on that meeting with the treasury secretary. >> sure. >> neil barofsky, thanks for joining us. appreciate it. >> he really laid it out there in english for all of us. all those zeros. >> the fact that he's still waiting to hear back on this idea of periodic meetings. >>> 23 1/2 minutes after the hour. >>> here's a

what can we expect the t.a.r.p. watchdog to say today? >> well, he's likely to say he'd like to see better safeguards, like to see the banks keep a better accounting for how they're lending the money. he'd like to make sure that the program to buy and sell and trade toxic assets that the government is setting up. he'd like to see safeguards between the managers of that program to make sure their private clients aren't benefitting from any of the public money they're also handling. he's got a whole host of things he'd like to work through and questions and better oversight he'd like see from the treasury department. also sort of giving a progress report about where we are. this is 12 programs involving $3 trillion. he's launched 35 different investigations into fraud, pilfering, and mismanagement, and here is the eye-popping number. a lot of political attention. 23.7 trillion, he says is the total potential government support for the bank rescues, the bailouts, the backing of loans, the bridge loans, the auto industry, everything all put t

where is the systemic risk t.a.r.p. was aimed at fixing. i'm sorry for the pain but sometimes a business that gets into trouble ought to be responsible for getting itself out of trouble. has the world gone mad? government surely has gone wild. this is exhausting. a lot of critics at the capital now saying, serves you right, business, wall street failed to manage risk on its own, cars failed to sell at a profit and government failed to manage the hou housing. on and on and will government do a better job? i say the feds and states will do a far worse job. when a business gets burned badly,ou canry to prevent it from happening again by passing new flame retard dent regulation. the best fix is the banks themselves have endured so much pain there is no chance we will get that close to the flames again. let's bring in the "real deal" squad, one strategist and three flame flowers. the host of a radio show on the left, tanya acker, "huffington post" blogger and lawyer and greg knapp, host on the right and so is steve moltsberg. thanks for being wi

. -- what they did with the t.a.r.p. worked to the point of bringing stability back. that cit can be in a position of failing here, and the market is taking it the way it's taking it. i think that's a surer sign of success of what happened with the t.a.r.p. money and how it added stability to the system. >> i agree with that. there is no doubt, there are more failures to come. the question is, can we do so without the government stepping in? >> there is a pretty good capitalist message that somebody can fail. i assume the fed can grease the wheels of safety net if they had to. but let me say, i think this gigantic stock market rally has essentially been led by banks and bank profits, and that goes back to this paulson discussion earlier. what we have now from the feds, the treasury, the new treasury, i don't mean to be partisan is an upward sloping yield curve that is massive and a zero interest rate where bankers know how to make money. and that's the greatest bailout of all, was a zero interest rate, and the steep curv

t.a.r.p. being about financial stability, bailing out chrysler, bailing out gm, many of us said we're going to throw good money after bad. they're going to end up in chapter 11 anyway and roughly $80 billion taxpayer dollars later, they did. how is that fair to ford, who actually had to take on more debt to try to survive. so you know, to what extent is it even fair, to what extent is it even smart, once you go down the road to start bailing out these firms? so many of us fear, i have introduced legislation that would end t.a.r.p., that t.a.r.p. is now, regardless of its noble design back in september, october of last year, has morphed into a $700 billion revolving bailout slush fund that frankly is doing more harm to the economy than good. now, i do want there to be an opportunity for large financial firms that fall into financial distress to be resolved, resolved quickly. that's why in the republican financial markets reform bill, there is provision that would create in the bankruptcy code a

so just because a bank has returned the t.a.r.p.oney doesn't mean they're free and clear from the government at this point zpp >> all right, neil, it's always good to talk to you. thanks so much. >>> memories and praise for legendary newsman walter cronkite pouring in this morning. nbc's ron allen is live in front of cbs news headquarters in new york city. ron, you were walter's colleague at cbs. what can you tell us about what you're hearing today. >> that was a long time ago, chris. 30 years ago when i was getting started in this business. i was a desk assistant, simply a reporter in training and this is what i learned how to do what i do now and walter cronkite influenced so many of us who were coming of age at that time. the influence, of course, the entire business and the entire country. in so many ways. it's hard to sum up and describe the feeling here. it's almost like a family that lost a father figure, a patriarch. someone who set the standard and led the way for so long here for example is what dan rather had to say, the

do you want to get t.a.r.p. money? you know, you too can be t.a.r.p.ed. >> no, this is very simple to me, and that is, you've got to help the economy, you help the economy, you help small business, because people will start spending money, buying our products. you've got to fix the housing situation. >> how do you want to help the economy? >> well, i want to lower the cost. i want to improve the value of people's homes, especially me, because that's when i sell to. but you know, you mentioned the sba. the sba, and this new program, it's completely failed.. the -- >> it always does. it's all bs, it's all red tape and bs and government control. doesn't mean a darn thing. why don't they just cut your tax rates so you know what you're going to earn and you can keep it? why don't they slash and better, give you a tax holiday on payroll taxes for your employees? >> absolutely. my employees' taxes just went up to support infrastructure. >> all right. >> you know, it costs -- it costs my employees throw times the total to come

>> congressman, we got the t.a.r.p. to look after. we haven't looked into the funding of the congressional oversight. our funding -- >> inspector general's office is appropriations, yes. mr. mccool, in terms of your panel meetings -- >> i'm sorry, miss warren. >> i thought you said miss mccool. i lost who you were@@@@@@@@k @> >> are those publicly disclosed? >> the fact that we have the meetings? yes. >> no, actually the meetings. >> had business working meetings that are not public meetings. >> so, you have a panel of how many members? >> we had a five member panel. we now have the four member panel. >> so, when you meet in session for the purpose of doing business, is that open to the public? >> we do have working meetings that are not open to the public. >> should you have transcripts? >> i do not have transcripts. >> it is recorded by the senate. no, congressman, i have not seen transcript. >> is a transcript available for meetings but no congressman, i have not seen a transcript. >> is a transcript available of your meetings >> p

treasury administers the t.a.r.p. under which they borrow borrowed. is there a division between the way treasury sees the world and fdic and sheila does and the willingness to bail out? i can't give you an answer. >> we will talk to each other and overall especially in the leadership between fdic and treasury, there is a discussion happening on the proper role of the government going forward. that means for geithner and sheila baird. there may be disagreement in that discussion. >> otherwise why should ge capil get the money and not cit? >> because they had better lobbyists. >> clearly this is a size argument and that ultimately is a point where dan and i agree. in the future we need to take a hard look at the consolidation and the market segments that will drive this need to bail out the ones who are too big to fail. this is i think a good discussion and a good regulatory discussion to have happen. >> do you think it's fair to say and i'm sure there is other players, but ge is one of the biggest and it's fair to say that ge got access because they we

i wouldn't have done t.a.r.p., t.a.r.p. is stupid. but if t.a.r.p.t there, why in the world shouldn't goldman sachs take advantage of it? if the federal government is stupid enough to give a trillion and a half away to banks, goldman sachs is a model corporate citizen. i would have taken advantage of every single nickel i could. >> joe hagen, jack makes a good point. so what, goldman exploited the government programs. shouldn't it? >> well, it depends on what you think about the government's -- you know, who is working in government at the time, and whether they had goldman's interest in mind when they made some of those decisions. >> oh, you know what? this is like a classic print journalism thing, i'm going to put these stocks next to each other and then say interesting, huh? make your case, babe. if you're saying they were favored by government inn appropriately and improperly, then say it! >> are you accusing -- >> i'm sorry, here's the thing. goldman sachs is in business to make money. so if they see ways that they can make more, including taxpa

the problem, when the banks took t.a.r.p.oney last fall, they also gave the government equity warrants, a derivative that allows the government to purchase a certain amount of shares above the stock. now that bank after bank is repaying t.a.r.p., nobody knows how to value these warrants. it's creating a huge political problem. nobody knows what it's worth. either the banks underbay and rip off the taxpayers or they overp overpay. they were probably worth more than 15 bucks and we got ripped off. today, even jamie i dimon, the great cpo of jpmorgan doesn't know how it will be resolved and worried prices will be too punitive. they wrote and article posted in street.com where i'm chairman. it's on the front page and worth reading and subjectedggested a n to this problem simple and elegant and i might say brilliant. they want the treasury or fed acting as the treasury agent to hold public auctions for the warrant, just like treasuries. let the public decide what they're worth and no one will be ripped off and the taxpayer won't e

on t.a.r.p. that nearly $24 trillion -- i said trillion dollars of support had been offered or has been offered including $6 policy 8 trillion by the federal reserve. in your statement today you again said how important transparency is. but you still resist fully opening your books. i understand your concern about the fed's independence, but you are the one that threw away the independence by acting as an arm of the treasury in engaging in fiscal policy. now here are the questions. one, would you rather have an audit of the fed or give up all of your nonmonetary policy functions? >> we'll work with you on an audit to fed. i want to respond to the t.a.r.p. that number makes all kind of assumptions which are not realistic. >> they are not our numbers, sir. so, the i.g. is in charge of those numbers. so, whether you want to fight with the i.g., that's your business. don't fight with me about it. >> senator, to answer your question, i'll be more than happy to work with the congress to give access to

but let me get to the t.a.r.p., because i think that's critical. to congress, and when we asked for authority to buy liquid assets. we also recognized we needed flex, and we worked with congress to make sure we had the flexibility to make sure we could deal with what we had coming at us. congress, i believe, knew they were giving us this flexibility, and thank goodness they did give us that flexibility. now, what happened in the last few days before we got the t.a.r.p. legislation which passed on october 3rd, and in the week after we got the t.a.r.p. legislation, the markets continued to freeze up. we had a whole series of bank failures overseas, five or six different countries had to intervene to rescue their banks, market participants were clamoring to do something quickly, we need today do something quickly, and the way we were able to do something quickly and make a dramatic difference and prevent something very dire from happening was to make the tchay in -- and inject capital. i would say one other thing. i would say one other thing -- i thin

banks also used t.a.r.p.oney to add to their own capital cushion to make investments to pay back debt, and even to buy other banks. barofsky isn't saying whether that is good or bad. he's pointing out that banks can account for this money. kyra, the question is whether the treasury department will start asking for more accountability. that is the question, kyra. >> thanks, alison. >>> the budget is issue number one in california. for good reason. the state is dealing with a $26 billion deficit. but after months of haggling, governor arnold schwarzenegger reached a tentative deal with lawmakers to close the hole. susan lisovicz has the details. this budget includes a lot of cuts. let's lay out where they're all coming from. >> $15 billion in cuts, kyra. as dan was talking to you earlier in the program, nearly two-thirds of it is going to come from education, coming in at a terrible time because so many of russ going back to school to get additional degrees, to learn a vocation, something to ride out this reces

expect more blunt criticism from neil barofsky who overseas t.a.r.p. here's what he told cnn's "american morning" before heading back to the hill. >> the original point of the t.a.r.p. it when it was first announced take $700 billion of toxing assets off the books. one of the other goals was to increase lending, i don't think that happened either, although i think there is far greater decrease in lending absent the t.a.r.p. if it was to avoid a systematic failure and complete collapse of the financial system the t.a.r.p. along with other programs may have achieved that goal. >> he is set to appear before a house subcommittee a little bit later on this afternoon. >>> president obama is scheduled to meet with iraq's prime minister this afternoon, security and reconciliation are expected to be the major points of their discussions. their first meeting since u.s. troops pulled out of iraq's major city. the president and prime minister al maliki will hold a news conference at about 3:00 p.m. we'll bring that to you live when that happens. >>> a series of de

>> we did not take t.a.r.p. money, larry. >> wow, wow, you have no worries there. do you want to grow the bank? last question, is that going to be a profit center. >> it is a profit center currently. it contributed $27 million in pretax profits this past quarter. actually, we look at it as an ang angle -- ed a zwroungt t angle-adjunct to the financial services. i think multiples are still very attractive. there's still some growth and as revenue growth increases and the economy comes out of this, i think we will see great opportunity for investors. that's why we continue to invest in growing our platform, because i think our services will be very necessary in 2010. >> thank you ever so much for coming back on the program. thomas james, ceo of raymond james and company, based down there in tampa-st. pete, as i recall. >> your memory is great. great have been with you. >> not bad for an old guy. >>> obama will be a complete and utter disaster for this country, that's my own take. we have two esteemed guests ready to debate the proposition. former labor secretary reic

this is a company that had to take t.a.r.p. money and four-month stretch last fall lost more than $3 billion. that $2.7 billion would be even more but had to pay back the t.a.r.p. money and that hit their earnings as a little bit. ain't credible quarter for what many people consider the gold standard and financial sector but there is -- a little bit of irony here in the sense that, yes, they paid back the t.a.r.p. and they are going to give out billions and billions of bonuses coming up in is a company that is still in the bigger picture backstop bid the government. it is deemed too big to fail. there is a little bit of a clamor for some unfairness here in the sense they made so much money they are going to give so much to their employees but yet, we are still behind them. >> what about the markets reacting to that information to that news? was there a reaction at all? >> there was decent reaction. yesterday they had a huge run-up because there were whispers about how good it would be and they didn't lose any of that today. so

>> i was referring to the fed loans and not to the t.a.r.p., but t.a.r.p. is also under water, probably, and aig. i don't know the answer. we've got, of course, $70 billion just paid back. it's much more complicated now, because as you know, the t.a.r.p. money is being used for a number of different purposes, including foreclosure avoidance and the auto companies and so on. so it's hard for me to make the judgment. i would say that of the money put into as capital into banks, particularly through the capital purchase program, which is money given out to healthy banks, i would say that virtually all of that money will come back. for troubled firms like aig, it depends on how markets evolve and how the firm does going forward. >> you said earlier that you didn't really think the glass-steagall -- if it were in place, would have protected us from all that took place. however, it would have protected us from the debacle at aig, and the taxpayers would not have had to put up $200 billion. that's true, is it not? >> i don't think so. the glass-steagall separates

if it goes into the crapper. >> i don't know that it's fair -- >> congress wrote this t.a.r.p. bill so the treasury would have the power to do what it wanted. >> i agree with michael on this. what happened with paulson and bernanke is these two guys exploited a crisis to build out government controlled monopolies, they expanded -- >> no, they responded to a crisis. >> what do you mean, exploited, my friend. >> do we really think they were getting their kicks making $120,000 a year? i want to explain -- no, they were trying to do the right thing. >> they weren't trying to do the right thing. >> no, no, stop! they jumped in, in the middle of a crisis. it's so easy now for a lot of folks on the right to suggest, we should have let everybody fail, should have let everything crash and had all kinds of new brilliant institutions taking the place of the banks. >> michael wolfe, wrap it for us. >> if you're the general and you lose the war, you get blamed for it. simpl simple. >> he didn't lose this war, we're winning this war and this recession is over and this collapse is finally beh

how did t.a.r.p. -- the t.a.r.p. funds come up?figure out how to come up with the first 11 banks to pay back and how do we evaluate it from here? >> you build a mathematical model and put in a lot of data and see how this thing comes out. in this particular case we also asked three harvard business school professors to do independent valuations. we didn't have them talk to each other. but to look at what we had done to see if it was reasonable, to see if this was the right model, to give us advice and they all came to the same position. that was that we did a reasonable valuation of this and we discovered at the end of the day that treasury in the first set of transactions was getting about 66 cents on the dollar for what seemed to be the fair market value. >> the big banks will push back and say, maybe that's not the best way to do it. ask for valuations. maybe the way to do it is come up with an auction, take it to the public and let the market decide. >> that's exactly what the report says, too. the report says, this business of

also, the t.a.r.p. inspector generals recently said your white house is withholding too much information on the bank bailout. my question for you is are you fulfilling your promise of transparency in the white house? >> well, on the list of health care executives who visited us, most of the time you guys have been in there taking pictures. so it hasn't been a secret. my understanding is we just sent a letter out providing a full list of all the executives but frankly these have mostly been at least photo sprays where you could see who was participating. with respect to all of the negotiations not being on c-span, you will recall in this very room that our kickoff event was here on c-span and at a certain point, you know, you start getting into all kinds of different meetings. the senate finance is having a meeting. the house is having a meeting. if they want those to be on c-span, then i would welcome it. i don't think there are a lot of secrets going on in there. and the last question with respect to t

smacked no. >> would you find money would come from t.a.r.p. funds?cement i have that small that i don't really need it. in my capacity and everything else. but i know there's a lot of people out there that do need it to maintain their businesses. but no. spectacularly much the best of luck to you with your business, marlene. and we're going to continue following what's happening with the sba and how these loans are moving forward. check us out tomorrow. we have talked with small-business owners in new york and we will bring you their storessner on fox news channel. >> julie: everybody on twitter says justice tax cuts. that's not a bad idea. >> i'm hearing that here too. >> julie: less than 24 hours from now, whether permitting, and never will blast into orbit nearly a month after it was originally scheduled to launch. the mission was delayed today because of lightning strikes. look at that picture. when mission control says the stuff, it will be one of the last shuttle launches ever. only seven other missions are planned. all of them between now and

he is that banks that get t.a.r.p. money that are going to compete with banks that don't get t.a.r.p. money. he is going to have a public health insurance plan that is going to compete with the private health insurance plans and when he says at his press conference three days ago that why do you think the private plan will lose the competition? you are saying private is more efficient, you are saying government can't run anything. one thing when the compotation? no, you so when so you are subsidizing money. you were writing them a blank check and if-- we are borrowing the money. but, the point is that if you are subsidizing these companies of course they are going to win the competition because there is no competition in the future here of general motors is obvious. general motors could become profitable if it did not have to produce cars that nobody wants to buy because their fuel-efficient. if it couldn't produce the suv's that everyone wants to buy general motors could be highly profitable but the government is not

jp morgan paid back the t.a.r.p. there's expenses that go into paying back the t.a.r.p.g earnings, even though we're looking for four cents, that's a 92% drop year over year there's items in there. it's not directly comparable. underlying earnings might be stronger than what that four cents looks like. you don't want to look for earnings from citigroup. you look for results as we have quarter after quarter. the financial giant expected to post a loss of 31 cents a share. and then rounding out the big four, bank of america, the street expects bac to earn 25 cents a share. it's not just financials this week. >> beyond financials, other dow components on the docket, ibm, j & j tomorrow, friday general electric. if you wanted to hear from just one company this week, what would it be? who would it be? >> if i wanted to use one as a prophet? >> if you could just only have access to one set of numbers. >> i'd want it to be a financial. >> you would? >> yes. and i think it wouldn't be goldman. and i don't even think it would be jp morgan. i think it would be bank of america. >>