we've seen this most recently with the fight against the volcker rule now the volcker rule was part of dodd frank it's supposed to ban proprietary trading that's where banks speculate with your money with customer money to make a profit for themselves by taking huge risks while doing it the problem with it is when too big to fail banks do this and something goes wrong and they're highly leveraged they could get wiped out only they won't get wiped out will they because they're too big to fail so they'll be bailed out by you and me now wall street is fighting the volcker rule tooth and nail and you can imagine why but even without wall street fighting it the five hundred thirty page monstrosity of a bill allows for plenty of loopholes according to critics as you can imagine in five hundred thirty pages now they've been outlined by the financial activist group occupy the s.c.c. which wrote a three hundred twenty five page letter to the agency in charge of regulating wall street which is what the f.c.c. is now to set this all up one of the loopholes in this volcker rule comes in the form o

over the volcker well this is the role that supposed to rain and risk on wall street big time bar the big banks from trading with their own money seventeen thousand letters poured into regulators wall street fighting the new regulations. the nail saying it will threaten the economy is big banks can perform these functions but how many other institutions or even financial startups would be easer to step into this market once the big banks no longer have a stranglehold monopoly over it so is this about the economy or is it after we often see about anti-competitive practices by the big boys on wall street and speaking of innovation and squashing it ryanair has brought a lot of it i'm talking about innovation to flying in your abilities with the combination of super duper low fares and a certain flair when it comes to i catching advertising will some of their latest ads are banned in britain so are you k. regulators unfairly crushing the competitive edge we'll talk about it let's get to today's capital again. all right the volcker rule has gotten everyone's attention or at least ours alon

paul volcker responded today.sed surprise over complaints from foreign officials and american banks over his legislation to curb banks proprietary trading. financial institutions had until monday night to file comments with regulators. peter kraus is chairman of alliance bernstein, he wrote this letter, in an op-ed making the case why it's a loose-loose. he joins us here along with dan ryan chairman of price water house. good to have you on the program, gentlemen. thank you for joining us. peter, layout for us the objection to the volcker rule. >> i think our point of view really reflects how our clients see it and essentially the volcker rule is reducing liquidity in the markets for the marketability of securities, and that affects all clients, institutional clients, mutual fund clients and retail clients. at the end of the day, investors want to be able to trade securities at a price that is fair. if you reduce liquid kwity it becomes more difficult to trade. >> we look at numbers every day they are deadly. toda

are fighting the volcker rule why are foreign governments getting into this fray over u.s. regulation we'll tell you why it appears j.p. morgan and morgan stanley may be to blame for that let's get to the day's capital account. they use executive branch expects the eurozone to suffer a recession this year now the european commission in its latest projections forecast point three percent contraction of course greece is leading the way and that contraction but it now expects countries such as spain and italy to contract to which is different from the last time they put out these forecasts and greece is of course still a huge whyld car despite that so-called debt deal that was reached for its next bailout now the newest news is greece's parliament approved the bond swap with private bond holders which is of course a key part of the new bailout but some people say forget all this news ok greece needs more than the haircut it needs a full blown default we hashed out the league debt document with rosy assumptions earlier this week but there are more financial shenanigans to lay o

rule and the lobbyist that have bastardized the whole thing the volcker rule made bloated a week yes they couldn't kill the rule instead they are getting congress and regulators to render it morbidly obese and bedridden so i guess the american population have sympathy for those you know people who have to be airlifted out of their beds well they've turned the volcker rule which of course is named after paul a vocal former chairman of the federal reserve and is meant to bar financial institutions that are protected and subsidized by the federal government from trading for their own accounts that is it's pretty simple traders shouldn't speculate for their own personal gain using the money you and i pay in taxes because there's no deterrent in other words they hit area bankers committing crimes but instead of prosecuting them for criminal behavior they said well let's create another piece of legislation the volcker rule and by four it gets into the marketplace it will be bloated up to six or seven hundred pages which provide enough loopholes for bankers to completely forget about any of

here's the issue, it's called the volcker rule, but there aren't any rules related to the volcker rule that have been passed, or the substantial ones. this will go into effect july 21, i believe it is, whether or not the actual rules of the volcker rule are in place. that's a substantial question that a lot of bankers have. >> let's get to this q & a period. the audience doesn't have the microphone, so we don't hear the questions, but let's hear geithner's answers here. >> and help restore fiscal sustainability. a lot of challenge in that area. yes? >> [ inaudible ]. >> i do believe that if -- maybe we should step back for a sec, because it's worth thinking about what caused this crisis. we had a rather complicated and formidable mix of factors that left us vulnerable to the crisis of '08 and '09. part of it is because we'd allowed a very large amount of risk to build up outside the formal banking system. without the safeguards we put in place after the great depression, to protect the economy from those kinds of risks. and without the tools to contain the damage when people make mista

as i understand it, the volcker rule includes a two-year transition period starting in july. and as we did for example with the interchange fee where we were also late relative to the statute we will make sure that firms have an adequate period of time to adjust their systems and comply with the rule. >> i'm assume that you're not going to be strictly enforcing a rule that's not in place yet. >> obviously. >> so that does leave some ambiguity and uncertainty how to treat underwriting. we are laid den with so much uncertainty and i would just emphasize that bringing some certainty to the market is obviously should be part of the goal. >> it is. thank you. >> a question that i've had for a while, you know, mr. volcker was unable to really give a clear definition. it's basically, i'll know it when i see it. that is as uncertain, i think, as you can get. do you have a definition of what proprietary trading is? >> proprietary trading is short-term trading in financial assetses for the purposes of the profits of the bank itself as opposed to its customers. that's my best definition

i think we're going to see a similar type of chain of events with volcker. >> yeah. you just wonder if anything really happens before the election in november. but let me put that aside for a moment. anton, as someone who manages two financial funds, tell me how you're allocating money in the group today? >> certainly my large cap fund is going to have some citi and jpmorgan in it and the bigger regionals like capital one. but the smaller cap stocks look very interesting. we just came from a conference, i saw todd the other day in orlando, and the management teams feel pretty comfortable where they are. they feel comfortable about their own economic future. they're all talking about m & a. we need a match to light this kindling here. there's a lot of kind llg here. it's made it hard for the really small banks to make a good living. i think the large banks are facing revenue headwinds. i think the largers are going to eat the smallers. it's the bottom 7500 banks, not the top of the heap. we expect to see a lot of m & a coming up in the next few years. >> that may very

rule, and how they're feeling about the volcker rule, do you think, number one, we're going to get someclarity on a dividend, and number two, are we going to get more clarity on the stresd testsd with the snrgded sgld whad dougd brond steend the krrksd frksd orksd said earlier about capital allocation is, again, you have to wait for the federal reserve. but he repeated that over the long term, the company wants to have a 30% dividend payout. and as far as the stress test, he feels the bank is in a fine position to pass it. they said even under the worst case scenario, the bank would have $35 billion in excess capital. under the stress test that they just submitted the results to. we should hear about that again, maria, on march 15th. >> who here has an ipad? >> i do. >> mary, you got an ipad? >> no, but i'm getting the ipad 3. >> you're the smart one. >> jon fortt already has the ipad 3. >> so what's new and different and exciting about the ipad 3, jon fortt? >> sharper screen, better camera, new a-6 chip that's able to handle the grasphics. this is a big product for apple, in part beca

but i didn't advocate the volcker rule as a way to go.ce that when i looked at the failures and the problems we're dealing with it didn't come from proprietary trading. >> information treasury secretary hank paulson speaking to us exclusively about the volcker rule. joining us with his thoughts on that and on the budget, senator bob corker, a member of the banking committee. good morning, senator. how censor >> good morning. i feel so connected. i get our economic data from you. thank you. >> we like it that way. most of washington does. i was worried about, to get retraining now for unemployment you need a g.e.d. do you need a g.e.d. for congress? i don't think you do. hopefully that never becomes law. >> that could be helpful. >> you would like to see some changes. >> look the volcker rule could be fixed and it could be easily fixed so that it worked. i was not a proponent of it. but it could be fixed. and, you know, for those who think that volcker rule is such a great idea as written why don't they ask the fed and treasury why treasur

the namesake of the rule, former federal reserve chairman paul volcker, came to its defense. public comments on the rule were due today and volcker wrote critics of the rule say preventing large banks from trading for their own profit won't eliminate the risks. >> so we're going to move from kind of a regulated-- entities that are regulated-- and have a lot of capital and liquidity and are subject to a lot of rules and requirements and we'll kick it out to what's called the shadow banking sector. >> tom: regulators will review the hundreds of comments they've received, rewrite the rule and ask for another round of comments before a final version. so, it could be a year before the volcker rule goes into effect. >> susie: on wall street, strong gains in u.s. stocks today on word that the greek parliament passed strict austerity measures this morning. investors believe the vote opens the way for greece to receive international bailout funds, bringing some stability to europe. the dow rose 72 points, the nasdaq added 27 and the s&p was up nine. but while american investors approv

be possible in a democracy in a democracy do those actions do there you know we truly regret paul volcker well you know but do you suppose no excellent question i mean yours told us paul but we need we need a central banker who can really deliver. the goods and we've got central bankers right now who are i think trying to pull the war as was zero interest rates in this magic called quantitative easing yes well the paul volcker example is a good example they had the inflation they came after nixon closed the gold window and you had gold spiking in price and you had massive inflation stagflation and came in raise interest rates and set the stage for reagan reaganomics reagan just inherited everything that volcker position the head of that economy raising rates increases competition because it forces out the speculators who are merely parasitical in their behavior the bankers are just being parasites they want to lower rates higher rates would force those guys out and bring in entrepreneurs who are doing something other than just financial speculation it would be the best possible thing you

that we thought was really important ok they broke down the entire volcker rule with all of the loopholes in it that banks can get around to get around the spirit of the rule and we had a really positive response one of our favorite blogs an excellent blog naked capitalism posted our interview and eve smith posted it she said it's always a pleasant surprise to see a t.v. program have a long form discussion on a fairly technical topic readers should enjoy the arty interview of the women that we interview there on the volcker rule and i just this longer form way that we want to evaluate things and go into topics is something that we're banking on is something that's really missing so it's really nice to see a positive feedback there and for nomi prins who is obviously a guest of this show someone that we really look to for her authorities said occupy the s.c.c.s. caitlin cline in alexis goldstein are my new heroes told us they were great guests that night and there are heroes too we can't say enough how much we're very impressed with the work that they're doing and we're glad that our guest

the volcker rule goes into place now this is basically would have to put in place in one nine hundred thirty five to stop to prevent another crash on wall street and what it says is banks toure's if you want to gamble with your own money no problem but you can't co-mingle your investors funds you know people you me at the you know the three of us you can take the money that we've put in the our checking accounts or our savings accounts and go out and gamble that money in wall street and and this was blown up in one thousand nine hundred by phil gramm and you know led right to in large part the crash of the the wall street crash and so paul volcker a good republican says want to do this and and and the obama and congress republicans as well bode for this thing and now the banks want to blow it up and it looks like the republicans want to go along with it i don't understand why i mean the problem i see with essentially you know we're referring to banks not being able to make proprietary trades on the road be halfwit other people's money so they're going with the reason that you know tha

gramm and you know led right to in large part the crash of the the wall street crash and so paul volcker a good republican says why don't you do this and and and the robot and congress republicans as well bloated for this thing and now the banks want to. blow it up and it looks like the republicans want to go along with it i don't understand why i mean the problem i see with essentially no we're referring to banks not being able to make proprietary trades on their own behalf with other people's money so they're going with the reason that the i mean this is exactly what it was during the rule back in would basically it would disallow banks from being able to use that money to provide the reason we don't have a static economic pie in this country is if i invest something the person that i give that money to the person who i make that investment with is then for each use that money in other economic pursuits that then create more wealth in other areas of the economy so if you don't if you don't allow. which part of that was which was you know if you if you give money to a stock broker he ca

you know, i think the volcker rule, there's been a lot of regulation. and strong banks want strong regulation. and capital levels are better, leverage levels are down, liquidity is vastly improved. i think for our operation, we've never had a proprietary trading operation, so the volcker rule in and of itself shouldn't have a big impact. but what we're dealing with is trying to find the difference between market making and proprietary trading. market making goes right to the heart of liquidity in the type of activities that we're seeing right here in the new york stock exchange. so i think the second big issue, maria, for many foreign banks, and many foreign governments, was the extra ter toriality. where government bond markets would have been negatively impacted. i think those two things are being worked out. i would actually say that chairman volcker himself would agree that those things weren't the original intention. so i think there's a lot more focus. i think there was an incredible number of comments that came in during the comment period. i thi

uncovering the volcker rule, a comprehensive break down is straight ahead. live in the new york stocks exchange, this is the final and most important hour of the trading day. >> i'll bill griffith at the new york stocks exchange. >> i'm maria bartiromo. stocks near the lows of the day on renewed fears about the greek bailout and weaker than expected u.s. retail sales. that sent the s&p 500 below the 1350. it's raising new concerns this afternoon that the rally may not be sustainable. >> yahoo, shares lower after reports confirmed the company has broken off talks over the sale of the asian assets, to china and japan, we have that coming up. much more on the developing story on yahoo. >>> let's see if you can tell -- you can. i thought it would be more evident. around 1:00 eastern time they announced the e u finance miss ministers meeting was delayed or down-graded, that sent shares lower. down 63 points on the dow off the lows, down 75 at the low, now at 12,810. nasdaq down 15 points, down half a percent trading at 2916. s&p 500 down 8 points now at 1343. her

andrew sorkin wrote a piece on the volcker rule.it is going to hit the face it will win closed cost. >> on the banks. not the economy. >> but he was suggesting that what -- have impact on the -- on the -- >> my only point is all -- i would love to see a forum where these things are actually talked through -- >> respond to that argument on costs. >> well, so -- the idea is that if these -- can't be the market makers and market maker, i was thinking about this analogy a while. have you these pastries and no one eats them. if wane to be a market maker, hide these from everyone else and you say you would be willing to buy them for two bucks and el them for $1.90. i can make a market and beat the middleman. that's a highly profitable business they don't want to lose. they are saying if they can't be market makers, there are going to be increased costs or if there is all this -- compliance they have to do because of the volcker rule prove their market making -- the volcker rheaume meant to prevent, risky, spec a speculative gambling, it w

are other countries planning to adopt approach as a volcker rule? >> not to my knowledge, no. not -- we're not extending jurisdiction outside the country except insofar as that american-based banks will have to follow the rule in their worldwide operations. but we're not obviously not going to require european banks operating in europe to obey the rule. >> but our banks who are operating there will? >> yes. >> the time of the gentleman has expired the chair recognizes the chairman of the oversight investigation subcommittee, the gentleman from texas, for five minutes. >> thank you. good to have you back again. i've got two or three questions here. one of the things the g-8 central banks have expanded their ballot sheets. if you convert to $15 trillion over the last two years, what -- what do you see looking forward? how much more expansion in these balance sheets and central bank do you see? >> the fed chairman's testimony is continuing. winding down, however. we'll take a quick break and get back to washington. americans believe they should be in charge of their own future. h

. >> war of words between banks and paul volcker.ding the volcker rule. >> two market darlings, apple and mcdonald's fighting back over criticism on questionable business pras. at what point does either controversy take its toll on their respective stock prices. we begin with corporate news. avon reporting weaker than expected q4 numbers. shares down 7% in the pre-market. company dealing with a short fallout from internal bribery investigation in china in 2008. if they were going add to their troubles this is one way to do it. >> tupperware and herbalite has had great success with this model. there's a big gap of leadership at the top. surprised that the board kept the dividend given the huge falloff in sales. this is one of those where i got caught up in. this is one of those situations where you could buy it because of the yield. can't buy yield at the fundamentals falling apart. this just a cautionary tale. >> why did you think you could buy this stock when there's an investigation going on. we don't know -- before the investigati

one of our themes is has we go through the year you're going to see the volcker rule, the dodd-franknever be as tough as a lot of people are expecting. investors always expect the worst and hopefully get close pleased down the line. that's what's going to happen with some of these stocks like jpmorgan and some other names. the bottom line is, though, investor day is not really giving a lot of people a comfort level to invest in these names right now. we're going to be stuck in this tight trading range until we get better news coming out of the regulatory front or whatever. >> we're going to get some insight on the investment banking side of the business and i think investors are curious to hear what the story is there. expectations are incredibly low. do you think the expectations are relatively too low or is there a chance that we could see in the upcoming quarter that they've outperformed? >> i think they will outperform. ily the expectations are too low. jpmorgan has done a great job to lower expectations and beat the expectations. i think the fourth quarter was a very tough quart

what ask your take on the volcker rule? will it be implemented in july ?ill it have an impact on your business? >> it will definitely have an impact on our business. >> my question is if it's actually going to happen in july. >> you have to plan for it, though, right? >> you certainly do. >> what's the impact? what's the impact? >> i think it's like a lot of things. i think it creates more uncertainty, because more regulation creates more uncertainty, especially with respect to implementation. there's a lot of uncertainty with respect to implementation. >> let's say you're both right, that we're headed for a pullback, at least over the near term. you're still bullish over the longer term, is that right? >> i'm not. less so. >> how do you want to invest in this environment where we could see a pullback? how do you protect yourself? >> cash is the best thing you can do. nobody wants to be in it because everybody lost last year being in cash. it's very hard to advise being in cash. but at this moment, given how much we've run, it may in fact be prudent. >> ho

how tough is it going to be when the volcker rule comes out, generate a lot lower revenue numbers wee seen in the past? >> the landscaping is changing. hedge funds throughout the course of, you know 2011. there is concerns over the volcker rule on liquidity in the marketplace but we think it is in context of the investment banking operation. >> do you agree with that? >> i do. what is important is citi isn't as concentrated in the united states as some of its peers so has a more diverse revenue base that will serve them well in the coming years. let me ask you about that, what does city look like in the next five years? we know what vick cram pandit is trying to do good bank, bad bank, sell off the assets not core to the business. moshe, how does citi look in the next five years differently? >> i think it has a global, commercial and investment bank and local consumer business around the world to a greater degree than any other u.s. bank and on par with some of the global banks outside of the u.s. >> mm-hmm. and in terms of, jason, let me get your take on this new information we lear

so the big banks should be out of the business due to the volcker rule.ere's a big loophole that's been carved out of the volcker rule for physical commodities. plus, the regulators haven't got it implemented yet. so the big banks are still in proprietary trading, that they're not supposed to be in. >> i would say that the senator is 100% right. i would say i have stood at the top of any stair and screamed at the top of my lungs and it's gone nowhere. everything that the cftc has done, all the rules written under dodd/frank, just the mechanisms of this has made me convinced that the war's not on, that we've actually lost the war, and that the banks have won on this. >> i want to ask a very basic question, because i don't understand this. okay, talk me through this. every year, it seems like ground hog's day, senator, i would like you to address this as well. it's ground hog's day. we talk about the summer driving season, we get towards summer, and the price starts to go up. and we have the b-roll going on the cameras, people filling up their suvs and the

there are two big exceptions to the volcker rule for market making and hedging.u can issue securities on the one hand and the other hand the degree to which you can engage in safe and sound hedging activities. right now the rule is too tight and would restrain those activities. for example, for start-up companies and fairly illiquid markets they need the flexibility to have the liquidity necessary and i think the regulators will get it right at the end of the day. but this is an important matter. the comments, the panoply of comments reflect the degree to which people are concerned. i think it will come out well, but there need to be some changes. >> let's go across the pond for a second and talk a little bit about europe and european banks specifically, and i'm curious about where you stand ultimately on whether the european banks are going to be in trouble. it looks like greece may be coming through this, maybe not. but sort of give us an assessment of where european banks are right now. >> well, it's a delicate situation. the european central bank is making in

for the layman, what is the volcker rule and why do you support it? >> the rule simply says, "if you have a customer who wants to issue a bond, you could help him. but you can't trade in the bond market for your own account." and so what the rule does is it basically puts the banks back into the customer business and allows the wall street community to be in the pure trading and the business of speculation and hedge funds and so forth. and it separates those. >> sounds to me like you're calling the glass-steagall act back from the grave. >> i think i am. >> because? >> i just think it's better that we have that barrier than not. it makes sure that the fdic guarantee doesn't provide a funding base for proprietary trading activities. remember, the government guarantees your savings account and mine in the local bank. and, correctly, we don't want the government's guarantee for those accounts to act as a funding base for somebody who's speculating in the market. and so it's that kind of separation. it's a prudent barrier. and i'm astounded that anybody w

the drop in volume, so many circumstances going on simultaneously, getting ready perhaps for the volckerule do away with prop trading, maybe there are some banks that are going to do away with trading, volume drop there volatility gone down. >> right. >> the way people trade stocks has changed dramatically in the last few years, buying etfs not individual stocks. that is part of it? >> so many factors, bill, that is part of it the way i think about it, what lower volatility is a double-edged sword. from our point of view, lower volatility typically leads to lower volumes, for us, as we have seen recently with the market share you can the market has gone away from the public markets, more into the dark pools. so, we are now having at the end of the really the first two months of this year, roughly 35% of the stocks traded in the u.s. market no matter where they are listing, trading away from public exchanges, the other side of that, lower volatility means stability, market creeping up this year, a positive first couple of months, ipo calendar looks good. i think those deals come to market

volcker said, if they are too big to fail, maybe they are too big to exist. you have to think about the taxpayer. thank you mr. chairman. >> senator menendez. in the worst financial crisis in generations, consumers were not protected from the tricks and traps and federal regulators were often more concerned about the interests of wall street than main street. and we now have an obligation to hold both wall street and non-wall street lenders and providers of financial services accountable for whether they treat consumers fairly and it can be done by laying down clear rules of the road and so that is why i look forward to your work at the agency. let me ask you a couple of specific questions. i want to ask you about prepaid cards, something that i have been pursuing for a while now. a product whose use has exploded in the past few years especially under banked consumers, since credit cards and gift cards and other cars have been regulated, prepaid cards have been one of the few largely unregulated products in the marketplace and as for the fees consumers pay on

the dodd-frank effective date for the volcker rule is july 21st. and we've heard that regulators think that this is a daunting task to complete by that. do you have any plans to phase in i'm me men tap implementatior rule? >> yes, we will certainly be giving institutions adequate time to adjust and adapt to whatever, adapt to whatever rule that's put out. >> okay. thank you. and then i've heard from some of my constituent insurance companies that fed staff has been we pldeployed to insurance companies. what's the purpose of their presence that given that the insurance companies are regulated by the states? is the fed simply increasing its insurance expertise or does dodd-frank give the fed authority to regulators first? >> no, we don't have any authority to regulate insurers unless, in the future, a systematically critical insurance company is so designated by the fsoc. that hasn't happened yet. it would be there's been some discussions just to give ourselves a better insight into the industry. >> what i'm alluding to is that there's been insurance

or shot holes in condoms they can't put him through a republican primary their best bit and paul volcker singur has made it clear who is who is preferred choice is single is the number one billionaire backer of romney by the way is number one choice is christie so the way to pull that off is you make sure that your guy romney does not get the eleven hundred forty four delegates he needs he fall short santorum fall short gingrich fall short and what you end up with a shortie showing up dead on arrival and then the billionaires pick the republican joyce they'll pick your president for you think you or at least the nominee of one of the parties but romney is you know he's worth a couple hundred million dollars he's paying the fourteen percent tax rate you know the maximum tax rate of billionaires and millionaires pay well like secretaries to them pay up to thirty five percent. why would why would paul singer because brothers or any of these other billionaires find chris christie any more acceptable or for that matter mitt romney any less acceptable in fact chris christie isn't even a multim

volcker believes the complexity of the rules is unavoidable. financial firms file letters oppo the so-called volcker rule. >> in global headlines japan's economy shrinking 2.3%. manufacturers were hit by the strong yen and weak export demand and the european debt crisis and the flooding in thailand which has hurt u.s. firms much more than you would have expected depending on how much business you did there and whether you had suppliers. emerson electric. also hurt the japanese economy which is number three in the world. get to the global markets report. carolin schober is standing by in london. good morning, carolin. >>> good morning to you, joe. it's a lot of green across the board here on the stoxx europe 600 currently higher by 0.7%. european markets are staging a bit of a relief rally after that greek vote in parliament last night but it's a very, very cautious relief rally let me tell you this because there's the massive risk of implementation and keep in mind eurozone finance ministers haven't even signed off on it. they will probably do