u.s. treasury secretary and then go on to make millions a lot more than they make as treasury secretary when they go to serve wall street or give a speech to wall street banks now despite all this is just one example we haven't seen people in the u.s. get angry to the extent that we've seen it in europe where they have a debt crisis that maybe you could argue has affected them a lot more close to their lives especially in the situation of greece where they've seen immense cuts to the public let's talk about it because right now eurozone leaders are meeting to talk about a lot of people are wondering if they're talking greek greece exit contingency plans or euro bonds we don't know but here to talk about what really is going on in europe as you see it is sees it as paul craig roberts economist and former assistant secretary of the u.s. treasury under reagan so kind of segue in from our last conversation dr roberts why do you think it is that we have not seen the kind of unrest in the united states that we have seen in europe in response to economic strife and turmoil. because the cost have no

u.s. treasury bond. >> yes. so, broadly they are together, aren't they? germany being another example of a beneficiary flight to -- along with the u.s.? >> correct, right. >> so you've got, and the uk. you've got a number of countries you've not downgraded? that have benefitted from this flight to quality but one you have downgraded is also benefiting. why do you think that might be? >> that might be. first of all we need to keep things in perspective. the sovereign credit rating of the united states is aa plus signaling our belief there is an extremely small probability of default. >> but higher than before? >> naturally, higher than before. correct. >> okay. >> so i think the flight to quality phenomenon that we're observing is something that you need to look at the various alternative assets that are at the disposal of the investors, and the investors take the view that this is a safe place to put the money. now, you need to remember that ratings and market yields do correlate over a very long term, over the whole spectrum of the ratings, but it's not t

u.s. 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

u.s. treasury has a much easier route to purchase more according to reuters the u.s. treasury has given the people's bank of china a direct computer link to its auction system so china is now these first foreign government they just can bypass wall street bypass primary dealers just go straight to the treasury buy more debt what it was like we just want to cut out the middleman we want to make sure that there is like you know straight to the vein. like the stars to me like what they're doing is they're taking the they're saying for everyone else that you want to get smacked you've got to go to the dealers in the street but if you're china if you're the u.s. and you want to get you want to get your fix you can go straight to the free to the store or to the source like denzel washington in the movie where you put that drug dealer for he was the source in vietnam or where it was but my point is you know maybe this is so that off the pier that actually spread the gold and makes. you know being a broker primary broker dealer so. i mean to be fair they should probably get so

u.s. treasury market is way too important, don't ever dismiss it. however, when rates go down, people are always going to search for a better return. right now we're making so little in treasuries that you'd be nuts not to look for a better return away from the bond market. and to me, that's good news about some, not all, but some stocks in our market. and you know what? no, let's make that great news. because as interest rates decline, the dividend yields, i like, they get even juicier. if you can find stocks that aren't particularly economically sensitive and have no response to the european implosion, they're getting more valuable by the day not less valuable as the treasury pays youless and less to own the bonds. far more credit-worthy. and that's what happened today. at one point midday the treasuries had a gigantic spike. almost by magic, we saw stocks with high yield snap right back. buyers swooped in to pick up stocks like honeywell, stocks with yields that had been become more attractive. this action makes a ton of sense to me. think about i

u.s. treasury says china is not a currency manipulator, but it does say the yuan is undervalued. u.s. republicans and democrats have both accused china of getting an unfair trade advantage by valuing its currency artificially low. but a report today on currency policy said that since 2005, the yuan has appreciated by 40% against the u.s. dollar, taking inflation into account. but american manufacturers say that's not enough, they want china's currency revalued. >> the overall benefits for the american economy a revaluation in china would be enormous. it would mean less debt in the united states, a healthier trade balance. we would be bringing our unemployment rate down, and that's ultimately the type of economic activity that we need. >> susie: not everyone wants the u.s. to slap a currency manipulator label on china. the u.s./china business council supports the treasury's decision. it says calling china a manipulator would only complicate the fragile relationship between the two countries. >> susie: billionaire investor carl icahn is turning up the heat on chesapeake energy, the emba

u.s. treasury secretary applauded the region's efforts. what was he trying to say there? >> he was specifically referring to the region's shift from tough austerity measures to a focus on growth. by the region's leaders. u.s. treasury secretary timothy geithner said europe is making progress in dealing with the debt crisis. >> the greeks have a particular challenge. i think it's a welcomed debate. they have a stronger set of tools to manage the crisis now in place. that allows them to shift the focus for more growth. >> geithner said in a speech in washington on tuesday that europe is taking measures to restore fiscal sustainability at a steady pace. he also mentioned that discussions have begun to promote spending on infrastructure in debt-ridden nations to support their economies. geithner added that europe has become aware of the need to boost the global standing of these countries, with excessive debts. but he warned against slowing down efforts to overcome the crisis. >>> investors certainly did not share geithner's enthusiasm. overnight u.s. and european markets hea

u.s. treasuries so you know it's everybody's fault the fact is the largest holder of u.s. treasuries it is the biggest customer the fed in china i just i don't understand this just really signifies to me what reform means in washington is just the ball would do it would reverse order so just plug it. it's. because reform just doesn't go anywhere and from taking on the fed to taking on wall street we're got to end by showing you this check out this video look at who it is dimitri along with max kaiser and some other dude we have to figure out who he is but anyway you tube user r.g.b. anarky. made this send it to was very cool and believe you with it you can check it out it's on our are you tube channel youtube dot com slash capital account under our favorite videos right. you can check it out so for now that's all we have time for so go look at it now because we don't have time for more show and don't forget to follow me on twitter at lauren lyster and give us feedback at youtube dot com slash capital account and from everyone here as always thank you so much for watching co

u.s. treasuries, u.s. debt, scott. the yield on the ten-year treasury plummeted to the historic low of 1.62% which means the cost for borrowing for the u.s. government is diving. >> pelley: thank you very much. in syria there was a second mass execution uncovered today. just yesterday we told you more than 100 people were executed over the weekend, mostly women and children. the u.n. suspects supporters of the dictatorship killed them. well, today bodies started showing up with hands tied behind their backs. the violence began 15 months ago when syrians rose up against the dictator bashar al-assad. allen pizzey has the latest. >> reporter: opposition activists posted another gruesome video today. this showed bodies of 13 people apparently shot dead in eastern syria, their hands tide behind their backs. the victims were said to be defectors from the syrian army. with access for form journalists severely restricted by the syrian government, such videos are often the only insight into what's happening. they're usually impo

u.s. treasury is in such dire straits? >> well, we are spending $4 billion a day more than we're taking in in order to stimulate the economy. it's not working very well, although we don't know what would happen if we didn't spend the extra $4 billion a day. we were adding to the national debt roughly $1.4 trillion a year. we couldn't even pay it off before when it was $5 trillion. now it's $15 trillion. it took 224 years to get up to $ $5 trillion in national debt. in roughly the next 10 years, we had another triple that to $15 trillion. there's just no way we can pay off the debt. we'll need to have massive inflation in which prices rise in a way that will torture people or we default on the debt. there's no other way out. i'm not going to say it's this year, next year, five years. it's just going to happen. >> hang on. i know despite this doomsday picture that you write about in your article, i want to rattle off these quotes. jobs and opportunities are thriving again, virginia is growing strong, so is our future. john k

u.s. government, end quote. treasury is doing just that, and it shares its findings through the designation process. remarkably, treasury's robust counterterrorism program is the only one of its kind in the world. none of america's allies come close to our investment in human and financial resources to combat terror finance. this can be blamed on a combination of tight budgets and a lack of political will. though the international financial action task force recently beefed up its standards, it's insufficient. it allows members to mutually evaluate, overwhelms according to recommendations and enables states like saudi arabia and kata to give themselves high marks regardless of the realities. the system is full of holes and terrorists predictably gravitate to the areas of weakest authority. looking ahead, treasury's policy shop, tffc, needs to prompt allies and adversaries to do more to combat terror finance. for the short term, the most glaring challenge is the threat of a nuclear iran. treasury has had a real impact. te

u.s. treasury issued an advisory about that bank and the possibility that was engaging in money laundering or handling some of these counterfeit notes. how do you see -- that occurred at the point in time it looked like there was went be some progress and negotiations and then everything stalled out. do you think it was the case that stalled the diplomacy? and as we look today at more satellite launches, if third nuclear test by north korea, it seems like a lot of people are calling for re-examination of the financial area as replicable so basically, you know, did it work from your perspective and is it applicable to today? >> the first thing i would point out is the irony of the description that you gave which is that on the one hand when the u.s. government pursued the financial sanction in 2005, 2006 it was widely criticized of something to was both an effective and hurting the diplomacy and yet today as you said there are people that are clamoring for it as a way to sanction north korea because they see it as a powerful tool trying to influence north korean behavior, but in 2005 it's t

u.s. treasury bonds, so economist navarro says they have us over a barrel.our behavior, they can dump all their investments. it's known as the financial nuclear option. >> what would that do? that would cause interest rates to spike, mortgage rates to spike. inflation to spike, the dollar to go through the floor, the stock market to go into chaos. we would be in deep, deep, deep trouble. >> the nuclear option, financial nuclear option, is china's pulling all its money out of u.s. treasuries. >> philosophically, everything's possible in this world, but that's so unlikely that, you know, if we function on that thing, we just may as well go home and not doing anything. >> mr. gao isn't going home. since this story first aired, his fund has invested in real estate in the united states and in iconic american companies like coca-cola and apple. by the end of 2010, he was managing $300 billion invested around the world and then asked the chinese government for more. [ticking] when we return, the world's leaders come together in a very small village. >> there aren't

u.s. treasury secretary timothy geithner and china's vice prime mere shengxian. the low currency allows it to export more products. the u.s. urged china to raise the value of yuan with reforms of its currency control. further deregulation of export control on high-tech products to china. it said the trade imbalance has been called for excessive regulations on high-tech goods. >> translator: more than 2,400 products fall in the u.s. exports control. that's why it's difficult to eliminate the trade. >>> 13 asia nations have agreed to set up a preventative lending program to stop the eurozone crisis from spreading to asia. finance ministers and central bank governors from japan, china, south korea, and the association of southeast asian nations reached the agreement in manila. the new system would allow fund injections before it would affect any of the nations. the agreement follows a similar move by the group of 20 nations last month to increase the lending capacity of t international monetary fund. the asian economic leaders also agreed to double the current region

u.s. treasuries as long as we have a printing press, brian. ratings are supposed to reflect the contractual ability to pay principal and interest on a timely basis. there's no doubt we'll be able to run the printing press and pay our debts if we have to. >> running the printing press then has its own risks. >> that's right. >> such as? >> such as inflation at the end. right? i think that is a huge challenge. i was just on a panel here with president evans. >> moderated by steve liesman. >> moderated by steve liesman. and dennis lockhart. the whole discussion was about exiting qe. one, do we need more qe? two, can we exit qe before the inflation problem takes off? it was a rather lively debate. >> what was the conclusion? >> there was a di vvergence of opinions on the panel. >> there's a divergence of opinions on the fed board. >> yes, there are. you have some like charlie evans who believes that a 3% rate of inflation should be tolerated. dennis lockhart things 2% is too much. personally i believe that the fed should stop thinking about inflat

u.s. treasury security's honor at says site. i think that our lending authority is anachronism. it's a leftover from 19th century century central banking arrangements when the debt was far smaller. and i think that's going to cause us trouble in the years ahead. >> and what's the best way to go about fixing it, do you think? >> well, i've advocated we give serious consideration to tie our hands and leading central banks use of credit, make the use of public sector credit, may credit allocation which as chairman greenspan pointed out, constitutes fiscal policy the matter how you slice it. make that subject to congressional appropriations policy. if congress wants to do that, make it separate from the central bank's functions. >> and how realistic do you think that is? >> well, there's a statement and i think may 2009 in which the fed and the treasury agreed that credit allocation was not the central banks job, and that that's fiscal policy and it belongs with the treasury. i think we should follow through on the principles and really stick to that. >> coming back to the fomc, it

u.s. treasury department is the chief of staff she then went on to build the online ad business at google for leaving for a spoken to dominates. the 42 year-old is the company's best paid employee. braking and $31 million last year mostly in stock even though she is worth $1 billion she is emerging as the poster child for work life balance. >>> i walked out of this office every day at 537 home for dinner with my kids at 6. now part of corporate america's elites to knowledge the gender gap in a commencement speech last year. >>> to the promise for a more equal world. a world where men ran have our homes and women and men have our institutions would be just a much better world. >>> as for one from the run for the white house to lend up in washington and i think she could someday be president and that is not a joke. >>> i have aspirations to do something that matters. and right now i don't think there's much it could do that would matter much that they spoke. in anticipation of the huge media crush tomorrow morning-let us on to the company property which is basically a first ran side where t

u.s. treasury is expected to reach the current $16.4 trillion debt ceiling limit in early 2013. likely after the november elections. as of now, the u.s. debt roughly $800 billion below that limit with last year's $2.1 trillion increase in the debt limit being used up quickly. >>> enough of the real news. let's huddle up around the water cooler to watch james lipton the host of "inside the actors studio" giving mitt romney, who's been called stiff, some lessons in acting like a human. >> since politics and performance have become pretty much fused and since you've been criticized by some for not coming across as authentic to your public, maybe we can sort of work on that today. let's start with your laugh. >> you know, i live for laughter. i mean -- [ laughter ] >> it isn't working. it's inert. it just doesn't come across as genuine. worst of all, it's mergeless, which is to say, while you expect us to be amused, you're not the least bit amused yourself. i've advised people who are watching you to freeze the frame and then put their hands over the lower part of your face and look

u.s. treasury secretary america's chief banker said of the statement the human errors that led to the two thousand and eight crash can't be cured by law my kids my ex and stacey though big to defer. to me think i hear you can't legislate away stupidity or risk taking greed it was just an accident i think that the global financial markets collapsed i don't see any crime here. as selective amnesia and he's purposefully blind to the crime in front of him he can't hear anybody out there committing crimes you can't see anybody even though it's presented the evidence every single day criminality no. ambiguity about it. join me on a journey to the heart of the kremlin to a place is hidden from the tourist he's going to meet some real credible insiders although they may not be the usual news makers you see on t.v. . looking. for ways to give. the. world. science technology innovation all the list of elements from around russia we've got those huge earth covered. hello again deep beneath the rolling english countryside lies pockets of gas suitable for energy but the trouble is getting it can be de

u.s. treasury or the tragedy is that the government when the banks were on its knees didn't step in instead of for instance creating taking ten billion dollars. or one hundred billion dollars in creating regional banks capitalizing those banks leveraging them ten to one loaning you know refinancing mortgages i mean there were all sorts of ways we could to use this kind of money constructively we handed it off to a criminal class and speaking of government where in the u.s. currently in an election year a republican candidates are now battling one another for the opportunity to oppose for iraq obama come november however skeptics view both parties as more similar than different because we've seen military invasions corporate bailouts and breaks for the wealthiest under both democrats and republicans how can a new political force start to grow in america if it's sort of that the same type of cycle every four years well that's the problem and it's gotten worse because after citizens united in two thousand and ten with the creation of these super pacs and obama broke a campaign promise by. reac

u.s. treasury, the bunds, will be very good. keep money for firepower for distress. the european distress will look very attractive in the second half of the year and put something in risky strategies. >> the sectors you are looking at, how do you want to be exposed? >> i like the dividend paying stocks. an interesting sector is health care. coming up in june, you get the decision by the supreme court on the mandate for health care. we still think 5-4 they strike it down. i still like health care, best sector, dividends continue to increase in that space. high cash flow. i think you still have to look at that sector. >> we'll leave it there. always great to have you on the program. >> thank you. >>> up next on "wall street journal report" what went wrong, what went right in the u.s. financial crisis? one member of 1%, on what he thinks the rich are wort to the rest of us. don't let a euro drop get you down. things may be looking up for your travel. take a look how the stock market ended the week. back in a moment. >>> if your main argument for how to grow the economy

u.s. treasury department she then went on to build the online ad business at google before leaving for face up in 2008 that 400 is the company's best plan template simply rake in $31 million last year mostly in stock even though she is worth $1 billion she is emerging as the poster child for a work life balance. >>> the a lot of his office at 537 home for dinner with my kids at 6. >>> now part of corporate america's elites channel is a gender gap last year. >>> to the promise for a more equal world in a world where men can have our homes and women ran have run institutions. would be just a much better world. >>> as for run from the white house. did we get the issue will end up in washington and i honestly think she could someday be president and that's not a joke at aspirations to do something the matter is and right now at don't think there's much ado that would matter much that they spoke. anticipation of the huge media crush tomorrow morning the company is actually about the media to park in one of the lot on their property there's plenty of food and of course a lot of security to make s

u.s. treasury secretary america's chief banker said in a statement that the human errors that led to the two thousand and eight crash can't be cured by lawmakers but max and stacey beg to differ. timothy geitner you can't legislate away stupidity or risk taking greed it was just an accident i think that the global financial markets collapsed i don't see any crime here or there. has selective amnesia and he's purposefully blind to the crime in front of them he can't hear anybody they're committing crimes you can't see anybody even though it's presented the evidence every single day criminality no. ambiguity have bought it. an apparent protest against president assad and syria's aleppo university met a bloody end today leaving four dead and two hundred arrested on verified video from the clashes show troops and students together attacking the demonstrators amarna shall be a senior columnist at the all akbar newspaper in neighboring lebanon blames much of the violence on arms proliferation and let's look at the situation in a realistic way there are so many that are all. around city in cities m

u.s. treasuries and asian bonds. european markets are trading higher today.n terms of what the market will react to, we get a ton of economic data out this morning with two reports on the job market as well as numbers on manufacturing and a revised look at first quarter gdp which may show the economy didn't grow as much this winter as previously anticipated. now taking a look at how the markets ended last night, the dow falling 160 points, it's on track for the worst may since 2010. the nasdaq losing 33 to close at 2,837. >>> foreclosures may make up more than a quarter of all home sales. accounting for 26% of sales in the first quarter of this year. the firm says a spike in short sales may be partly to blame for the increase. those involve sales that go for less than what their owner owes the bank on their mortgage. >>> retailers reporting sales today. total sales are only forecasted to rise around 2% after several big chains including macy's, saks, as well as jc penney reported disappointing results in april. future's slightly higher. back to you. >> thank

u.s. treasury bonds much riskier. >> mr. taylor, then quickly? >> i don't recommend abolishing the fed. i recommend reforming the fed. >> would we be at a disadvantage, sir, if we -- mr. klein, if we had no central bank and other countries did? >> of course it depends exactly how such a reform would be implemented. look, right now people are fleeing from the dollar and heading towards hard assets like precious metals. >> sir? >> if the dollar was backed by gold, i don't see how that could harm our -- >> you would back the dollar with gold? >> yes, sir. >> thank you, mr. chairman. >> thank you. i now recognize the gentle lady from new york. >> i'm sorry. thank you, mr. chairman. i have a thought for us as we conclude, and i thank you so much for your insights, each of you. it strikes me that the size of the fed's balance sheet is going to be largely determined, given the structure of our representative democracy, by the will of the american people to take in hand what we have created for ourselves at this juncture in our history. is there any sense that, really, it's going to take a lot

u.s. treasury are going to be very good. the final pointis, keep some money for fire power f distress. the european distress is going toto look very attractive in th second half of the year, and put something in so-called risky strategies. >> the sectors that you're looking at, how do you want to be exposed the rest of the year? >> i still like the def dind-paying stocks. i think an interesting one is health care. coming up in june you get the decision by the supreme court on the mandate for health care. we still think 5-4, they strike it down. that will be a positive for health care. i still like the technology space. best growth opportunities out of the s&p sectors. dividends continue to increase in that space. high cash flow. i think you still have to look at that sector. >> we'll leave it there. larry adam, sri-kumar, thank you. have a nice weekend. >>> next on "the wall street journareport," what went wrong and right in the u.s. financial crisis? one meer of the 1% on wt he thinks the richch are worth to e rest of us. >>> don't let a euro drop get you down. things may b looking up