can you talk to us about how you've seen the evolution of treasury in treasury's role and how it shapes key issues. >> sure. and thank you for that kind intro dukz. it is a great pleasure to be here to talk about the treasury's role in the foreign policy and national security areas of the u.s. i'm very mindful that what we're able to do today is very much dependent on the work of those who game before me, including yourself. so very much appreciate it. i was at the treasury department from '99 to 2001 in the general council's office. at that time, the treasury department was involved in the national security elicit finance world to some extent, but to a lesser extent than we are today. we were, at the time, the u.s. government's lead on the financial action task force, which i'll come back to, but is an international body for money laundering. we were responsible in the treasury department for regulating the domestic anti-money laundering through the financial crimes and force network and, of course, for implementing -- through the office of foreign assets. and when i came to treasury,

can you talk to us about how you've seen the evolution of treasury and treasury's role and how it now shapes national security in some of these key issues? >> sure. thank you for the kind words. i'll get to your question in a moment, but it is a pleasure to be here to talk about the role of the efforts of the u.s. and i'm mindful that what i'm able to do today is very much dependent on the work of those who came before me. i was at the treasury department from '99 to '01. tat time, the treasury department was involved in the national security e lis it finance world to some example to a lesser extent than we are today. we were at the time the lead on the financial task force, the international standard setting body for anti money launding. we were responsible for regulating the domestic anti money laundering for the financial crimes enforcement network and sanctions. and when i came to treasury, i came at a time when larry summers had just become the secretary. he really elevated the importance of anti money laundering as not just a domestic issue, but as an international issue and saw

treasury under ronald reagan. all right let's wrap up with loose change dimitris shannon we all know that it is messed up that jamie diamond sits on the board of the new york bed we've talked about it before long before whale gate came along well now i'll tell you look bernie sanders barbara boxer two senators are introducing a bill targeting federal reserve complex take a listen. you know who were the people quote unquote regulating the banks all the exact same people who are being regulated if this is a clear example of the fox guarding the hen house i don't know what it's. so they're trying to do something about it presumably with this bill where it goes we don't know but we wanted to point out a couple of the other fed conflicts because jamie dimon has been the most prominent but c.e.o. of g.e. jeff immelt he was on the board of the new york fed the same time the fed authorized an emergency loan of sixteen billion dollars to g.e. and in two thousand and eight the chairman of the new york fed sat on the board o

when the treasury, when u.s. treasury pointed out what they considered to be, and they still seem to consider to be this $2 trillion mistake, this was still prior to your decision to issue the downgrade, was it not? >> the discussion between s&p and the treasury was prior to the credit committee -- >> that's what i've just asked you. you've answered that yes. now, when that discussion took place and you learned about their view of this $2 trillion mistake, did you reconvene the credit committee? >> again, i reviewed the main mistake in this context -- >> i said their view. >> their view but i want to make clear it's not our view. we did convene a committee which discussed the mutually agreed scenario, which is the cbo base cased scenario leading to a $22.1 trillion net debt in 2021. so the answer is yes. >> okay. since the downgrade, the u.s. government bonds has fallen by more than one-fifth. how does that square with your judgment? >> it does square with the judgment. what we have to understand is that the yiel

treasury and national security. my colleague juan zarate was basically this job in a former administration, plus, or minus, something like that, and then juan went to the white house and was deputy national security advicer. we owe both of these officials a great debt for a service to the nation. on behalf of csis. i'd like to welcome you all today. i turn it it over to juan. >> thank you very much. thank you for all of you for coming today. in particular, david, thank you for attending today. >> i'm happy to be here. >> let me tell you openly and honestly those who followed the work that we've done here at csis. i tend to invite not only high from file government officials but also friends. i count david among one of my friends. this is a great discussion to have because i think as we read the newspapers every day, we see the importance of treasury as a core element of u.s. national security. and not just as a tool of national security, but strategically as a key port of how the u.s. government thinks about the use

we have liaisons with many of those agencies who are resident at the treasury department. there's i think a very healthy and robust exchange of both law enforcement information and as appropriate intelligence information. >> and just a fair point, the treasury did keep its criminal investigators from the irs, who by the way led the effort to hunt saddam hussein assets in '03 and '04, in part because they were the sole remaining law enforcement in the treasury that we could direct. that was good, very good. >> let me reinforce that so i don't get in trouble when i get back to the office. irs-ci, the criminal investigative side of the irs we work with all of the time. there's a new head of irs-ci who just started two weeks ago or so and one of the first things that he did was come over to the treasury department, meet with me, meet with my team and we spent an hour about talking different way has we can coordinate our activities. so it's still a very close relationship, even though irs-ci is still in treasury and the other law enforcement agencies are not. >> gentleman in th

treasury has had a real impact. tehran faces tougher sanctions than ever before and the regime is cash strapped. though tehran continues to push forward with its nuclear program, the regime reportedly finds it increasingly difficult to bankroll terrorist proxy, hamas and hezbollah, to the extent it had in the past. admittedly, we may not be past the point where we can prevent a nuclear iran, but treasury's efforts have been instructive and demonstrate if properly applied, it can truly diminish the opportunity to sponsor terror. there are many other things i did not have time to address today. i'm happy to answer your questions. on behalf of the foundation for defense of democracies, thanks for invite megatoday. >> thank you, doctor. grateful for your testimony. the chair now recognizes mr. cassara to testify. >> chairman meehan, ranking member hig gings, and members of the subcommittee, thank you for the opportunity to testify today. it is an honor for me to be here. while there are no simple solutions to all the ch

"so, who's going to be secretary of the treasury? who's going to be the head of the nec? who's going to be what?" >> narrator: the decision would be an early signal. was the new president going to ally himself with those who wanted to reform wall street, or those who wanted to rebuild it? >> there's people on the left who are saying that obama should appoint someone who represents a tough-on-wall-street regulator, someone who's going to take wall street to the wood house on behalf of the treasury. >> paul volcker isxtremely close oba... >> narrator: their first choice was paul volcker. >> a kind of adviser in chief during this financial... >> narrator: feared on wall street, he was the reformers' guru, a former federal reserve chairman, a pro-regulation advocate, and an outspoken critic of the wall street banks. >> volcker was the main force for a historic change that has brought inflation rates down for 30 years now, and interest rates have been declining for 30 years. >> narrator: picking volcker wouldeliver on his campaign promises to reform the banks and get tough on

treasury making this the treasury's first ever direct relationship with a foreign government dats all according to reuters. we will discuss it let's get to today's capital account. our next guest has called regulators such as the office of controller of the currency and the federal reserve the dogs that once again failed to bark in j.p. morgan's trading loss that multibillion dollar trading loss those are j.p. morgan's main regulators now meanwhile it was two other regulators we heard from on capitol hill today that as easy and this the f.t.c. on derivatives reform and of course j.p. morgan was a large focus of the hearing now officials said investigations of j.p. morgan are under way at both of their agencies fittingly news comes out that j.p. morgan has hired a former s.e.c. enforcement chief to assist the firm and probes of its loss on credit derivatives trading according to reports how fitting this just all is one insists he was big circle to talk more about it william k. black is here he's associate professor of economics and law at the university of missouri kansas city and it's

over use of treasury authorities. other thing, demonstrate clearly not only the treasury is at the center of these debates but that you are and i'm thankful for that. thankful for your time. i'd ask you all to join me in thanking david. [ applause ] thank you. >> thank you. >> thank you very much. hope you enjoyed the program. hope top see you again soon. >>> oregon and neb ebb are ho n are holding primaries. nebraska has 32 delegates. voters are registering preferences. nebraska dell kits to the republican national convention will are determined at the state's convention on july 14th. nebraska voters today also picking the republican candidate hoon will fate bob kerrey in the state senate race. coverage later at results of c-span.org/campaign20712. and ex-editor of it chief executive news international, ba rec ka brooks will face charges over a phone hacking scant. in a statement, particulars cro observer obstruction of charges. hiding evidence related to hacking. those are the first laid since police launched a new

treasuries are the most unloved security. nobody loves treasury. you've got the fed being the biggest buyer and the global governments buying treasuries. if you look historically at argentina, brazil, europe, post financial crisis recoveries are tepid at best. a friend of mine calls them lame recoveries. >> wait a minute. paul, are you telling me the reason you would buy treasuries is because nobody loves it? or are you saying that the economy is not going to grow as fast as sharon suggests and therefore, we'll need quantitative easing that keeps rates down and go even lower? is that what you're saying? >> yes. in the short term, tactical trading is based on sentiment and it continues to be very bearish. and so your point over the longer term, yeah, when qe first started, i said that we were going to have qe 3, 4, 5. we're going to have a five-year fomc balance sheet. >> so burt was saying that we would get our way out of this issue. earlier bill pimco talked about this. take a listen. >> the bond market only yields 2%. let's start from that point

. >>> let's talk about some of the stocks outperforming the treasury bond. a short list. first one is mcdonalds. >> these are not fly by night companies. mcdonalds, which will pay you more than 3% a year. microsoft almost 3%. verizon pays you almost 5%. ge and intel made you more than 3%. they will send you a check and over the course of the year will end up being more than 3% in all these cases. >> if you're saving money for retirement or kids college, what would you say is the best direction to go here? >> you probably want to put a preponderance of money in the stock market versus treasury bonds because again you look at the cost of college education, that is rising at almost 7.5% a year over the past 20 years. if you put your money in a treasury will pay you 1.7% you'll never catch up to what the broader cost of college will be. >> what about the 529, the college savings plan? >> that is one of the best ways, a vehicle to use to save for college because all those earnings that you have will grow tax-free and you get to choose who your beneficiary is and

yet today we saw the ten-year treasury, u.s. treasury trade down to 1.6%, meaning n ining i are willing to lend this government money. where's shiloc when you need him? you can have your bond. this amazing demand for treasuries in spite of these rates is causing a gigantic freak out among stock market professionals who always keep one eye on the bond market for guidance about the economy. right now, they have both eyes on it. that's how stupefying this move is. why are the pros panicking? because this dramatic rally in treasuries tells them two things and both r & d bearish for stocks. the first is a presumption that the demand for money must be much lower than we thought. remember how old-fashioned banks really earn a living. they pay you low interest rates in your deposits and loan that money out and pocket the difference. given these current low rates, you'd expect people to be clambering for loans, but the pros assume that can't be the case. since the demand would drive rates up, not down like they're going now. think about

>> so we did lose the agencies themselves are no long area part of treasury. but one of the things that changed in the period that i was away was the coordination and collaboration among the law enforcement community on both the intelligence and investigative side. and so juan noted the lebanese/canadian bank example where it was a treasury action where we worked extraordinarily closely with the dea in developing the case. on both the -- particularly on the intelligence side, but also in sort of developing the legal case that we pursued. so we have our coordination, whether it's with dea, fbi, secret service is very good. we have liaisons from many of the agencies who are residents at the treasury department. and there is i think a very healthy and robust exchange of both law enforcement information and as appropriate intelligence information. >> and just a fair point, the treasury did keep its criminal investigators from the irs, who by the way led the effort to hunt saddam hussein's assets in '04-'04. in part because they were the sole remaining that we coul

s called treasury bonds and treasury bills there's really very little risk and invest in investing in them and because there's very little risk there's a lot of confidence that we're pay our debts and therefore we're able to borrow at a very low rate ten year u.s. treasury notes are right now paying one point seven five percent interest which means that on ten trillion dollars of debt we pay an annual interest payment to holders of the treasuries of around one hundred seventy five billion dollars a lot of money but not so much in the grand scheme of things it's affordable to us as a nation people also have a lot of confidence that germany will repay their debts for example so german bonds right now only pay one point three six percent and the reason germany pays an even lower rate than we do is because last year when the republicans threatened to shut down the government over raising the borrowing cap on our national debt foreseen president obama to go along with slashing unemployment benefits our national debts bond rating was downgraded by one grade which pushed up the interest rate

but treasury secretary henry paulson thought geithner's strategy might send a dangerous message. he started publicly reminding wall street of one of the most basic tenets of the free market: moral hazard. >> i'm as aware as anyone is of moral hazard. i am also aware of... >> moral hazard poses the question: if you bail somebody out of a problem they themselves cause, what incentive will they have the next time to avoid making the same mistake? >> paulson is out in public saying, "it's all on you now. this was a one-time only event. you're on your own now. we did it with bear. but now you're on your own." >> there's news today of a federal bailout for a wall street... >> it's a fire sale for troubled bear stearns... >> narrator: the bailout of bear stearns landed in the middle of an election year. >> are you fired up? are you ready to go? fired up? >> narrator:aracobama had ready made the enomy a key issue. >> because we've got eight years of disastrous economic policies. that's what we're going to change when i'm president of the united states of america. >> obama very early real

the department of treasury and the intelligence community's successes against al qaeda financing and fund-raising is without question. in 2005, the 9/11 commission issued a report card that evaluated progress the government had made in implem t implementing that group's recommendations. it gave the government an a-minus. not too many a-minuses at this day or any day in government. but it gave it that mark in combatting terrorist financing. the best mark on the scorecard. but despite our successes -- and this is important -- we can't become complacent because al qaeda and its affiliates continue to expand their geographic reach worldwide. state sponsors of terrorism like iran and syria are highly sophisticated, and they continue to take advantage of the united states and international financial systems in order to skirt international sanctions. the united states military and counterterrorism efforts have largely decimated core al qaeda leadership in afghanistan and pakistan and the group's under significant financial strain and is struggling to secure steady financing to plan and exec

well over 30 billion significant success for treasury. but now centrally in the context with respect to the assad regime and syria, people are looking to and talking about the financial pressures. really the only tool we're applying to try to affect change there. can you talk to us about what the next steps are with respect to financial pressure and whether or not you think this is going to work? >> yeah, and i'm also going to quibble with the premise of your question. i don't think that in syria the only tool we're applying today is financial pressure. but it is an important tool. and it is a tool that we have been you know, relying upon quite substantially since the uprising you know, about a year ago, even more than a year ago, in syria. we have adopted three new sanctions programs on syria in that period. a sanctions program specifically focused on human rights abuses in syria. which i should add has led to a number of designations of syrian officials as well as iranian officials who have been supporting the abuse of human rights in s

on this front treasury is at a real impact.tehran faces tougher sanctions and ever foreign and the regime is cash-strapped that tehran continues to push forward with its nuclear programs. though she reportedly funded -- finds it increasingly difficult to bankroll to the extent it has in the past. we nag -- maybe pass a former economic can prevent a nuclear grandpa event the grandpa treasures efforts have nevertheless been instructed to demonstrate it properly applied banks can truly diminish the ability to finance terror. mr. chairman and many other challenges on the terrorism financing front that i do not have time to address today so if there's anything you wish to discuss i would be happy to answer questions and i thank you for inviting me today. >> thank you. very grateful for your testimony. the chair now recognizes mr. casssara to testify. >> chairman meehan, ranking member higgins and members of the subcommittee, thank you for the opportunity to testify today. it is an honor for me to be here. while there are no simple s

if you own treasuries, they've rallied. that's as u.s. debt, even when it pays next to nothing, appears the safest place for the world to park cash. jeff goldberg manager of this manhattan ameritrade says he is getting a lot questions about europe. >> i don't think they're overly worried. but that there is a bit of fog out there. there are events out there they don't have control over, and they're waiting for some at least directional indication. >> reporter: with greece likely to dominate the headlines this summer, is there anything you can do to protect your portfolio? experts say minimizing exposure to eurozone securities is an obvious first move. after that treasuries bonds will continue to be a good bet. >> if we were to see a deepening of the crisis, if we were to see deepening concerns about a greek exit, i think it would likely push interest rates lower. it would be driven by more flows into the u.s. treasury market. >> reporter: ryan does not think greece will be forced to abandon the euro. but, as the crisis evolves this summer,

and so the federal reserve has the fiscal agent of the treasury did accumulate lots of assets on his balance sheet. what i hoped was going to happen very quickly is that the treasury would take over those assets on to a subsidiariy. >> because it would require the appropriated funds which is ridiculous because it is one of the flukes in the unified budget accounting system in which if expansion alone by the federal reserve it does not require appropriated funds but exactly the same use of sovereign resources by the treasury does. the only difference of whether the assets are held on the federal reserve or the treasury's balance sheet is the fact of the accounting procedure. and the inability or unwillingness for treasury department to go to the hill to get appropriatuations for that is what created a big problem for the federal reserve because they were involved in fiscal actions which is not the role of the central bank should be. >> you and others but you in particular have been criticized for not raising rates in 2003 and 2004. jeffrey lacquer says in 1994 you did get out in front

treasury pushes back.ir interest is not to interpret legal provisions but to return this company back to private hands. host: how do the stock owners view the health of aig? guest: it is kind of bifurcated for now. -risk/high-high des reward play. other banks are bidding on them again three years into a bull market. that's great. treasury is selling billions of dollars of this company. there is around $40 billion of ownership. why would you, and in the 30's if the treasury will keep dumping that stock at a lower price? aig is trading at half the 60% the worse case of liquidation. competitors are trading areone ut one time. there is a way to much uncertainty in the near future. host: roben farzad is a "bloomberg businessweek" senior writer. caller: excellent guest an excellent moderator this morning. the government depends upon reports of credit reporters. up to three days before the collapse of aig, it receives a- plus credit ratings and reports and that is what the public was depending on. how can this be

they're yielding on a tax adjusted basis more than treasuries. they've got the second lowest default rate historically. and the supply demand imbalances should be evaporating going forward. they have a -- >> tom: i'm to try to get you to forecast an interest rate on the the 10-year benchmark. do you think it will hit 1.5%? >> it seems destined to in the near term. >> tom: all right, we'll let it go at that, great to hear from you, richard schlanger, with the peen near short-term income fund. >> tom: oil prices tumbled today, to their lowest level since october. in new york trading, benchmark light sweet crude fell almost $3 a barrel, settling at $87.82 a barrel. and that's pushing down prices at the pump just in time for summer. erika miller takes a closer look at the reasons behind the steep sell-off. >> reporter: this was supposed to be the summer that gasoline prices surged back to record levels, but instead prices have been actually falling. >> over the past month regular unleaded has fallen 19 cents to $3.63 a gallon nation-wide-- that is a

department and the treasury department is not covered by the volcker rule but the treasury department was never really meant to be the place for these multibillion dollar positions so it is still sort of the jury's still out on whether or not this was an attempt by j.p. morgan to sort of hide proprietary trading inside the treasury department to maybe change their practices before the volcker rule went into effect or if they were just doing a terrible job of hedging a position somewhere else in the bank the jury is still out but i do think that this shows the potential for ways that the banks could try and evade the volcker rule yes and do you think because jamie dimon is saying hey punches are going to jump all over this as a reason to stay the volcker rule and they're wrong which i don't know how anyone could make that excuse but just to be clear should this kind of trade be considered prop trading two billion dollars were lost of the company's money on it it's a big bat and does this make the case for a tough vocal role that is in the spirit of what it was intended to be. i mean i

the treasury department is cutting out the stake in a.i.g. it is cutting out shares on an offering of aig by $2 billion. this is the third offering since last may. because the treasury's a in the company to 63%. tsa hit a milestone. changes on the way for domino's pizza. i will have all the details in the next hour. that is business news. live in new york, abc 7 news. >> thank you. we will see you soon. some measures are 56 degrees. >> still to come, we have an update to last week's shooting at a church in ellicott city. >> learn what is bringing prince harry here to washington. >> we have >> time for a check of traffic and weather every 10 minutes. >> good morning. >> it is a mild start. temperatures are looking a little cooler than last week. temperatures will be in the 70's. let's look at the numbers. 57 in arlington. 53 in winchester. a little cooler in huntington. 51 degrees. a few sunny breaks throughout the day today. pretty cloudy. you cannot rule out a patch of drizzle. highs today are around 70 degrees. and limited sunshine tomorrow