these are excerpts from senator tim johnson's opening statement. senate banking committee and will be chairing the hearing where mr. dimon will testify tomorrow. this is from senator johnson's opening statement. today mark it is two month anniversary of mr. dimon's tempest in a teapot comments where he down played concerns from initial media reports of the chief investment saufs trades. we later learned it was an out of control trading strategy with little to no risk controls that cost the company billions. this is in quotes, i have said before no financial institution is immune from bad judgment. he goes on to say, so what went wrong for a bank renowned for risk management where were the risk controls? how can a bank take on far too much risk? if the point of the trades was to reduce risk in the first place or was the goal really to make makeup? should any hedge result in billions of dollars of net gains or losses or should it be focused on reducing a bank's risk? as the saying goes, you can't have your cake and eat it, too. those are excerpts fro

the only thing we're interested in talking to him about is his trades. >> tim johnson: okay, that's aenough request. >> kroft: what we got was a statement from congressman bachus' office that he never trades on non-public information or financial services stock. however, his financial disclosure forms seem to indicate otherwise. bachus made money trading general electric stock during the crisis, and a third of g.e.'s business is in financial services. during the healthcare debate of 2009, members of congress were trading healthcare stocks, including house minority leader john boehner, who led the opposition against the so-called "public option," government funded insurance that would compete with private companies. just days before the provision was finally killed off, boehner bought health insurance stocks, all of which went up. now speaker of the house, congressman boehner also declined to be interviewed, so we tracked him down at his weekly press conference. speaker boehner. you made a number of trades going back to the healthcare debate. you bought some insurance stock. did you ma

. >> senator tim johnson shall the head of the senate banking committee plans to ask dimon, how can a bank take on far too much risk if the point of the trades was to reduce risk in the first place or was the goal really to make money? some argue the risky trades would have violated part of the 2010 financial reform bill called dodd/frank. the volker rule, which has yet to go into effect prevents banks from making certain trades for their own profit. dimon was part of a push that exempt some banks from that rule. >> mr. dimon wanted a version of the volker rule that frankly wouldn't do very much. i think we have a stronger argument for volker rule that says no to a bank. >> some argue the regulations will prevent banks from doing business. >> it makes it more difficult for those firms to function and perform their duty for the shareholder value. >> the volker rule is set to go into effect next month. now, outside congress, there are at least five investigations into these losses from the federal reserve, the controller of the currency, the s.e.c., department of justice and the commodi

. >> it will be fascinating, i think tarm tim johnson wants to know if you are engaged in trying to reduce risk, how on earth do you increase risk and end up with a trading loss potentially of $5 billion. the senate banking committee, want to know whether bank officials are any good at spotting risk and preventing it becoming large enough to be a systemic threat to the financial system. jamie dimon for his part will say it was all about the cio office and whether they were meant to be reducing risk, they engaged in trades that went wrong. no doubt he will be apologetic. but he's got a tough job on his hands today. trying to convince this banking committee that bank executives know how to reduce risk in the organization. was it about reducing risk rather than trying to make money from these hedging positions? it will an interesting conversation, and one no doubt that could have some impact on bank stocks. so watch those carefully. back to you. >> we'll be watching, geoff cutmore live in london. >>> still ahead on "way too early," lebron james and the heat were in control on the road to open

tim johnson said on abc news, that's our key priority right now is reducing cost. we can reduce cost by bringing services within line. going for health first instead of health care after. >> michael, thanks so much. we're monitoring members of congress tweets in reaction to this. let me share two with you. both female house members and on opposite sides of the aisle. first one, louise slaughter, i'm pleased it was upheld today. we'll take a call and after that we'll show you a republican house member who came to this congress after working as a nurse and what her reaction is. let's listen to youngsville, north carolina. this is louis. a republican. >> caller: good morning. i'm so glad to get through. i am a retired registered nurse. i worked in nursing until i was 69 years old. this is a terrible, terrible bill. i have watched health care decline over the past -- i would say 30 years. and for people who were calling in who think now they're going to get really cheap health care, they need to know health care programs such as medicare do not pay the doctor's bill. s

am so proud that senator inhofe and i are working so well together and it's a part of this bill, tim johnsontchison and others. it's a clear difference, but i hope you would invite leader cantor on your show and ask him what he's doing to make this happen. we're hoping he wants a bill, but we hear he doesn't. he said oh, he absolutely does, but that's what i'm worried about, frankly is that there's a leadership issue over there that says just let it go because it's 3 million jobs. it's critical to this economy, it would boost this economy and some cynics say they don't want that over there. >> well, i will leave it there. democratic senator barbara boxer from california. speak of california, i have a whole bunch of results we'll go through in a moment. thanks for coming on. >> that. >> if it's wednesday, it means it's results. california, and all of the races and the memorable viral video to punish a congressional candidate to the top of the pack, all of that is next, but first today's trivia question. before alaska and hawaii which both became states in 1959. which one with was last admitte

i should also add that the head of the committee tim johnson, his former banking aide is also a lobbyistorking directly for jp morgan chase. these people are really tight and i think you can sense that in the questioning of a lot of senators that there's a very close relationship to jp morgan and all the other large banks. it's not exactly an arm's length deal going on. >> john, am i mistaken? i believe the former chief of staff at the white house -- >> you're right about this. >> sue? >> ty, next the view from inside europe. first, more from jamie dimon today. >> there's some negatives to size. you know? greed, arrogance, lack of attention to detail. but if you do a good job, your clients are served and you win their business. so anyway, i've been to a lot of places. you know, i've helped a lot of people save a lot of money. but today...( sfx: loud noise of large metal object hitting the ground) things have been a little strange. (sfx: sound of piano smashing) roadrunner: meep meep. meep meep? (sfx: loud thud sound) what a strange place. geico®. fifteen minutes could save you fifteen pe

bob corker, richard shelby, and mike crapo, mark warner, tim johnson and jack reed from the democratice. look, if someone gave you $55,000 yesterday and said he might give you another $55,000 tomorrow, what kind of questions would you ask? would you grill him? perhaps not. perhaps you would do exactly what these guys did and that's exactly what is wrong with our system. they allow them to buy our democracy. let's bring in kristin crime author of" the lost bank: the biggest bank failure in american history." kristin, is there a problem with our political system when our senators get paid by the bankers they're supposed to be watchdogs for? >> well, i think you could definitely argue that way. i mean it's hard to see how someone can be unbiased when someone else is paying their bills, right? >> cenk: well, that is a problem. let's talk about washington mutual. i think it's a good case for what went wrong with the banks. so as quickly as you can give us synopsis of what the core that have problem is. >> so wamu, a friendly bank that grew in the 1990s and pushed through risky mortgages and

recipients include a committee chaired tim johnson, a democrat mark warner, the top republican richard shelby and bob corker. at least one current staff run the senate banking committee is a former lobbyist for jpmorgan chase and at least five former committee staffers now work at jpmorgan. jpmorgan ceo jamie dimon apologize for the eggs recent $3 billion loss, but he failed to how the money was lost. >> i think no matter how good you are, how confident people are, never, ever get complacent in risk. challenge everything. make sure people are asking questions, sharing a permission, and yet very real limits when you're taking risk. is is you can take no more than this risk in a market. in the rest of the company, we have those disciplines in place. we did not have it here. >> to talk more about jpmorgan, we're joined by the financial journalist nomi prins who formerly worked on wall street as a managing director goldman sachs and an international analytics group at bear stearns in london. her latest book is called "black tuesday," a novel about corruption and romance surrounding the 192

the bank has been the second largest contributor to senator tim johnson, democrat, the chairman of the committee. >> and i've got news for you. they also, i mean you know this already, they also were one of the biggest donors, or their, i should say their employees, to president obama's campaign in 2008 and also to, i believe, to john mccain's campaign in 2008. this is the nature of what they do. they spread -- they spread the wealth around, you know. >> and there's more. one of senator johnson's former staffers is now one of jpmorgan's chief lobbyists. and the chairman present top assistant used to be a lobbyist for a law firm that worked for jpmorgan. i mean, this wasn't a hearing. this was a reunion of the gambino family. >> well, look, this is what we call in washington the revolving door, okay. and this -- if your viewers haven't heard of this, they need to learn about it right away, because this is how washington, d.c., work is that the people go back and forth from, typically from capitol hill staffs to working for lobby firms or directly for these, you know, clients of the lobb

. >> reporter: democratic chair tim johnson, who underwent brain surgery six year ago, asked why dimon had dismissed concerns about these trades as a tempest in a teapot in april. >> why were you willing to be so definitive a month before publicly... publicly announcing their losses when it appears you did not have a full understanding of the trading strategy? >> let me first say, when i made that statement, i was dead wrong. i called-- i had been on the road, i called ina drewren, c.i.o. i had spoken to our risk officers, our c.f.o. they were looking in to it. there were some issues with c.i.o. before april 13 we announced earnings. i was assured by them, and i have the right to rely on them, that they thought this was an isolated small issue and that... that it wasn't a big problem. >> reporter: johnson also wondered if the bank would recoup the pay of those responsible for the losses. >> you can expect we'll take proper corrective action. and i would say it's likely, though this is subject to board, but it's likely there'll be claw backs. >> reporter: the committee's ranking republi

the bank has been the second largest contributor to senator tim johnson, democrat, the chairman of the committee. >> and i've got news for you. they also, i mean you know this already, they also were one of the biggest donors, or their, i should say their employees, to president obama's campaign in 2008 and also to, i believe, to john mccain's campaign in 2008. this is the nature of what they do. they spread -- they spread the wealth around, you know. >> and there's more. one of senator johnson's former staffers is now one of jpmorgan's chief lobbyists. and the chairman present top assistant used to be a lobbyist for a law firm that worked for jpmorgan. i mean, this wasn't a hearing. this was a reunion of the gambino family. >> well, look, this is what we call in washington the revolving door, okay. and this -- if your viewers haven't heard of this, they need to learn about it right away, because this is how washington, d.c., work is that the people go back and forth from, typically from capitol hill staffs to working for lobby firms or directly for these, you know, clients of the lobb

what really happened was i flew back the next morning, he and i got together with tim johnson, our medical, wonderful man who a s a close friend of peter's and mine. the three of us got together to talk about how we would announce it and what ended up... peter drafted an e-mail, i drafted one and we sent them out after each other and tim stayed behind and i asked tim how bad is this because he is a medical doctor and he told me it was very bad indeed. >> rose: about a year? >> no, he said five months and he was just about exactly right. looking back on it now he said it could be three months or a year but he said five months or so but it was very emotional. very emotional for the entire news division but for me because we'd become close personally and it was a difficult time. >> what was his genius, peter? >> go back to what i said earlier. >> rose: what was his personality? (laughs)fyy- >> he was a skeptic. he had a great intelligence. he didn't graduate from high school, forget college, which made him feel he had to make up for ha. >> rose: he had to read every book he could put his han

tim johnson is the chairman. democrat of south dakota.ichard shelby, ranking member, republican from alabama. a lot of big hitters on this committee. demint, corker, schumer, menendez, herb kohl, mark warner and so on. the discussion will lead to the int int intricacies of banking in this particular example and regulation when it comes to the volcker rule and so forth. >> if you're not an invest in jpmorgan but you were an investor in any bank stock, this will have an impact on what you own because of the potential tightening of the regulatory environment. the tightening of the volcker rule. >> also to the degree in which they're engaged in transactions that they don't understand. remember the testimony we're going to get. they were instructed -- the chief investment officer was instructed in december to reduce the exposure and instead they embarked, according to his testimony, on positions that they thought would offset their existing ones but the complexity rose and they were hard to manage. are they engaged in activities that, frankly,

both democratic chairman tim johnson and top republican richard shelby have gotten personal donations from dimon. shelby asked dimon if he'd prefer to talk in private. >> to detail what really happened, here we're talking in general terms now, would you feel bet ner a closed hearing? >> in the end dimon only lost his characteristic cool once arguing with oregon democrat about how much the bank took in bailout money. >> i'm not going -- sir, sir, this is not your hearing. i'm asking you to respond to questions. >> now, to be honest, jamie dimon didn't have to answer that many hard questions. he got some others like what should we do about the state of the economy, the fiscal cliff that's coming, what we really don't know yet, wolf, is what this means for regulation going forward. this key part of financial reform, the so-called volcker rule named after the former fed chairman, it's still a bit in limbo. some folks want to make it tighter. others say it would not prevent another financial crisis and that's really what's still being lobbied on right now. >> we use the $2 billion number f

schapiro took questions from members of the senate banking committee which is chaired by senator tim johnson of south dakota. this is an hour and 20 minutes. [background sounds] >> i call this hearing to order. today we will examine the health and stability of money market mutual funds, the impact of the 2010 reforms and the potential positive and negative consequences of additional proposed reforms from the perspective of the industry's regulator, the industry itself, users of industry's product and economic experts. i look forward to hearing the testimony and welcome -- [inaudible] as the committee continues its oversight of the financial markets. because we're anticipating a series of votes starting in many an hour, we're going to forgo opening statements from the committee's members in order to begin questioning of our witnesses. i will remind my colleagues that the record will be open for the next seven days for opening statements and any other materials you'd like to submit. i will also ask everyone to stick to five minutes for your questions. and today's first panel we have chairman o

the chair of the senate banking committee is tim johnson, a democratic senator from south dakota. [video clip] >> whether bonuses or generating profits, will you seek clawbacks from managers involved in this trading debacle? >> we don't -- we have not had a special severance packages for executives over the past five or six years. there was no one in cio paid on a formula. the management of that portfolio, they were not allowed to do what they wanted. they cannot take too much high- yield exposure. we pay everyone, look at their performance, the unit's performance, the company performance. their performance includes liquidity, training, integrity, sharing with senior management, all the things we do to make it a better company. so i don't believe that the compensation made the problem .orse., none of these folks were paid on formula. >> when the board finishes the review, you can expect we will take proper corrective action. it's likely to be clawbacks. host: jamie dimon, testifying before the senate banking committee over two hours. on our facebook page -- next is arlington, texa

tim johnson is going to ask in his opening statement the following -- for a bank renowned for risk managementwhere were the risk controls? how can a bank take on, quote, far too much risk if the point of the trades was to reduce risk in the first place. joining us now without facial hair, major garrett and our own cnbc's chief washington correspondent mr. john harwood. did you ever have facial hair? >> do vacation beards count? >> i don't know. joe, do -- >> no, no, that's fine. >> just want to clarify. >> i couldn't even pull off a vacation beard. >> you can't? >> no. >> by the way, joe is throwing a question my way, i'm not ignoring, we can't hear. >> that's right. good to know. >> all within the family right here. they have not -- we hope at some point maybe they can hear you, but maybe not. in the meantime, what do we expect today in terms of what jamie dimon can say and, more importantly, anything substantive we're going to learn? is there something we should look for? >> well, i think jamie dimon will go through a corporate mea culpa. you can see that from his testimony, the short and t

force stand in up -- standing up a director of national research, and i've been talking to chairman tim johnson and ranking member richard shelby about that. this question goes to your proxy materials. risk-management seems to be the responsibility of the office of risk management which is different than the cio. was this individual, and i know there were several changes, monitoring the cio on a regular basis? did he or she approve the change in modeling? >> every business we have has a risk committee. report to the head of risk for the company. there are conversations between the risk committee and our senior operating group about the dangers. obviously, that chain of command did not wrote -- working in this case because we missed a bunch of things. you could blame it on anyone in the chain. there is an independent group that looks at changes in models and we do change models all the time. models are backward-looking toward the future is not the past, and there never -- looking. the teacher is not the past, and they never captured changes in been geopolitics or things like that. we do not run

force stand in up -- standing up a director of national research, and i've been talking to chairman tim johnson and ranking member richard shelby about that. this question goes to your proxy materials. risk-management seems to be the responsibility of the office of risk management which is different than the cio. was this individual, and i know there were several changes, monitoring the cio on a regular basis? did he or she approve the change in modeling? >> every business we have has a risk committee. report to the head of risk for the company. there are conversations between the risk committee and our senior operating group about the dangers. obviously, that chain of command did not wrote -- working in this case because we missed a bunch of things. you could blame it on anyone in the chain. there is an independent group that looks at changes in models and we do change models all the time. models are backward-looking toward the future is not the past, and there never -- looking. the teacher is not the past, and they never captured changes in been geopolitics or things like that. we do not run

mary shapiro took questions from members of the senate banking committee, chaired by senator tim johnsonakota. this hearing is one hour and 20 minutes. >> i called this hearing to order. today we will examine the health and stability of money market mutual funds. the impact of two reforms and the potential negative consequences additional proposed reforms from the perspective of the industry itself and products. i look forward to hearing testimony and recommendations as the committee can tinges its oversight of the financial markets. we are anticipating a series of 11 votes, we will forgo opening statements from the committe and members in order to begin questioning of our witnesses. i remind my colleagues at the record will be open for the next seven days and any other materials you would like to senate. i would also ask everyone to take five minutes for your questions. the first panel, we have the chairman of the securities and exchange commission, chairman mary schapiro. please begin your testimony. >> i appreciate the opportunity to testify about money market mutual funds. as we all

force stand in up -- standing up a director of national research, and i've been talking to chairman tim johnson and ranking member richard shelby about that. this question goes to your proxy materials. risk-management seems to be the responsibility of the office of risk management which is different than the cio. was this individual, and i know there were several changes, monitoring the cio on a regular basis? did he or she approve the change in modeling? >> every business we have has a risk committee. report to the head of risk for the company. there are conversations between the risk committee and our senior operating group about the dangers. obviously, that chain of command did not wrote -- working in this case because we missed a bunch of things. you could blame it on anyone in the chain. there is an independent group that looks at changes in models and we do change models all the time. models are backward-looking toward the future is not the past, and there never -- looking. the teacher is not the past, and they never captured changes in been geopolitics or things like that. we do not run

i want to thank my dear colleagues, jay rockefeller, max baucus, tim johnson. no way could i have done it without them. and i also want to pay tribute to mary landrieu, who is on the floor today. mary landrieu, senator landrieu and her state, they've gone through so many traumas, so ma many, with hurricanes and all the attendant problems, and the b.p. oil spill, which put such terrible damage -- which meant so much terrible damage to her state and the other gulf states, environmental damage, commercial damage, broke hearts, broke spirits. but let me tell you, you never break mary landrieu's spirit. she teamed up with her colleague here, senator vitter, and they wrote the restore act. and then she went to all the other colleagues in the gulf coast and said, you've got to help me with this and they put together a great package. and what it really means without going into the details -- she will agree into the details -- is when the court decision comes down and the funds come to the federal government for all the violations of law that took place with the b.p. sp

and thanks to senator grassley, senator tim johnson who had legislation in this area -- and senator grassley is a member of our committee, has been such a champion on this issue -- we have eliminated this loophole and made sure that the payments are going to people who are actually farming. this farm bill also reforms the adjusted gross income eligibility requirement, lowers and substantially eliminating any payment to millionaires. it includes two a.g.i. calculations, one for farm income, one for nonfarm income, which is confusing and difficult to administer. they would allow some to split their payments they otherwise would not be eligible for. we close this loophole. we use a simple a.g.i. calculation and restrict the eligibility to those who have less than $75,000 in a.g.i. and finally, the farm bill caps payments at $50,000, less than half of what a farmer can currently receive. doubled with closing the management loophole -- coupled with closing the management loophole, the farm bill contains the tightest and strongest payment limit reforms ever while maintaining and strengthening the