i think the volcker rule is misguided. hat caused the financial crisis was really residential mortgage lending, not prop trading. i don't really agree with the rule but it set up as manageable as we could have expected, looking back at the draft we got a couple years ago. >> where does it leave us with investors? i know fdr put out a note they would favor morgan stanley over goldman sachs but they remain neutral on others on the basis of what we have so far. >> at the end of the day morgan stanley has a larger preponderance of retail, a lot of their revenue comes from at that business now. a little less exposed. at the end of the day, this is actually good news for the entire industry and it's less draconian and it gives them time. i think it's a win and i totally agree with jeff that none of these things had anything to do with the financial crisis. i think mortgage was a much bigger issue and, you know, i think this is attaching a name to something that had nothing to do with the crisis. >> jeff, people are still talking

i had been against the volcker rule from the beginning. elievable respect for paul volcker, especially what he did as fed chairman, he is such a statement -- statesman, but he lost the plot. >> do you think whatever they will are doing will move off the balance sheet, they will still do it but outside the bank? >> number one, they will figure out a way to get around that because there is too much money to be made. but the problem was with non- proprietary trading. this was not about proprietary trading. the fact of the matter, goldman sachs saved itself by flipping -- putting on a $4 billion proprietary trade. forget the hedge part. it was a proprietary trade against the mortgage market in december of 2006, they made $4 billion on the one trade alone, made $17 billion pretax profit in 2007 when everyone else was going down the truth -- two. tube.going down the >> houston we amended? >> take it, move into the wastebasket and drop it in. >> you hear him say throw within the trash but we will obviously not see it happen. but what kind of legal

but that storm did not stop regulators today from turning the so-called volcker rule into a reality. and it is supposed to put a freeze on riskier outsized bets by big financial institutions. just moments ago, volcker himself praised the rule. we're going to tell you what the rule is, what it left out and how financial stocks are reacting during this last hour of trading. also another relic from the financial crisis, general motors getting a new chief executive. it is a first for detroit. mary berra is the first woman to run a major auto company, just one day after the u.s. treasury announced it had sold its last shares of gm stock, ending its partial own ownership since the 2009 bailout. this stock up about 93% over the last two years. there you go. and speaking of a historic first, will the newly-approved volcker rule hurt the large banks, or will it propel them forward? let's go to nicole petallides on the floor of the new york stock exchange to see how financials are reacting. we knew that the rule was coming. banks expecting it, but still, the question now is now what for these b

adam: approving the volcker rule today. we are waiting on votes to officially accept the addition of restrictions on banks following the financial crisis. joining us now to discuss this in an exclusive interview with a former drafter of the volcker rule, a partner in washington, d.c. and i should point out you were on the initial committee that wrote the initial version of it, but you left in 2010, 11, and what got voted on today was not what you actually would have been in favor of, correct? >> first, thanks for having me. what i worked on was initial statutory language, which was a page and a half long. adam: and now it is 900 pages. explain to me, somebody who is not a lawyer, what this means for the average guy on the street. and m i protected as a u.s. taxpayer from what had been a concern of mr. volcker from banks gamble and with money because they could be bailed out by us? >> first of all all banks engage in taking risks. so you will never eliminate risk from the system. the idea there will never be too big to fail

the buzzword is volcker rule.adlines, saying volcker rule will put in place tough restrictions on pressing the eu and asia to match financial oversight. >> i would point out, 8:30 a.m. 'sis morning, president draghi press conference at the ecb is a big deal. let's get to company news. >> we start with a setback for bitcoin in china. findountry's central-bank -- banning financial firms from handling bitcoin transactions. it says bitcoin lacks real meaning and does not have the same legal status as other countries. those and china can use the currency as long as individual take on the risk themselves. china mobile moves a step closer to offering the iphone. the world's biggest phone company won state approval for a four g network in the clearing the way for china mobile to eventually offer the iphone in the country. southwest gains from the american airlines-u.s. airways flight-- it will gain slots according to the terms of the antitrust settlement. southwest and virgin are said to pick up 34 daily landings and take

and also the volcker rule. and talking about paul ryan's future. we begin the show with the senate majority leader harry reid. thank you for being with us. you do not need another all- night session. does this mark the end of this war that has transpired? >> the trouble has not been over the last few days, but over the past five years. there's never been a situation where the president has been treated the way he has by congress. it is no wonder that people feel the way they do about congress. we have had untoward abstraction on everything. the common nation was after five years, that the recognition was after five years. we change the rules. >> are those permanent? >> it is so important. this way no matter who is president, i do not know how people can complain about the majority. people talk about the filibuster as if it were something that is next to the 10 commandments. the filibuster is not part of the constitution. it was developed to help get legislation passed. it is good for the country. who could complain about majority voting? >> with th

to the wastebasket, and drop it in. >> the first thing that regulators need to do is rename the volcker rulehe diamond rule because that is the only part of the statute, this regulation, that has any teeth, the hedging part. the idea of tying every risk to every trade will surely throw compliance offices around the country in these banking divisions in a tailspin. how did you do that? how do you tie specific risks to specific trades? that comes directly from the jpmorgan whale trade debacle, and that will be the real teeth of this legislation. >> as this rule becomes a reality, what actually matters most? >> what really matters is how aggressively these regulators actually implement it. >> how will be volker rule affect competition among banks themselves? there are two different views on this one. >> i don't think it will stop banks from being competitive. i think it will safeguard our financial system. >> i think that it will hurt the competitiveness of american banks -- how can it not? when you have other banks that are not subject to restrictions on hedging, are not subject to restriction

is a good first step you know this is a business development companies that are exempt from the volcker rule and this is what was why well i think you can get around the intent of the rule now the intent of the rule says you don't get to gamble anywhere and you don't get to do it through private equity fund up to that three percent or so and there are some exceptions there too but a business development company is the special kind of company that has to invest seventy percent in things like small businesses but thirty percent can be invested however they want including private equity funds the volcker rule says that you can invest up to twenty four percent in a business development company so if you take twenty four percent of thirty percent that seven a half percent that's still more than the three percent limit so it's just seems to me that it could be an end run around the intent of the rule and they could all just pile into these business development companies to get around it alexis your insight and making this concise and digestible for most people. and i'm sure this vocal will develop

volcker rule with professor spence.s a lot of scrutiny. >> tom, thank you so much. i am looking forward to surveillance and 20 minutes. coming up, more on the volcker rule. wall street let out a sigh of relief yesterday as it stopped short of some of the strictest bans. we will take stock of what this means for the banking industry next. ♪ >> welcome back. you are watching "the pulse." we are alive form london. off to radio. i am guy johnson. >> i am francine blackwell. -- francine lacqua. let's get you some company news. blackstone is expected to price its hilton hotels ipo later today. it is the biggest hotel ipo on record. foxconn is launching an investment fund to finance wearable technology startups. foxconn is the maker of apple's iphones and ipods but it wants to expand beyond manufacturing as phone sales challenge the company's goals of 15% annual revenue growth. lloyds banking group has been fined 28 billion pounds by the u.k. financial conduct authority. the fine is for serious failing to control how it awarde

are you suggesting that the volcker rule is a good first step? >> i think the volcker rule, the problem with it is that it does it go too far or doesn't it go go far, the problem with it is it's extremely complicated. it's hard to tell if you do it for your client or if you do it for yourself. and if the regulators decide two or three years from now if they're going to be as tough. >> and it looks like the regulators are not going to be tough at all and it's something that is very difficult to enforce. >> i'm not 100% sure that's right. i think the regulators over the past year in the time after the london whale trade of jp morgan, the one that cost them so much money, i think it's the way they're treating banks. i think they're going to be tough. >> look, tie the bonuses tha toe jobs created in the private sector. >> the problem on wall street they say they're about creating jobs but they're about creating money for themselves. >> and trading paper. >> the era when wall street cared about job creation and the rest of the country is long gone. an

the volcker rule is not a game-changer for morgan stanley. so i can't say i've gone through the new volcker rule, all of the details. i'm not sure exactly what's in there. having said that, i'm not the least bit worried about morgan stanley hasn't adjusted. in their fixed income trading business, morgan stanley's risk is one-fourth what it used to be at the time of the crisis. the assets in that area are one-third less, and the revenues as a percent of total are one-half less. so they've already downsized and contained their fixed income trading. they've gotten rid of the proprietary-like activities, so as it relates to morgan stanley, perhaps the rid of the uncertainty to getting the final volcker rule can still be a positive catalyst. so i still like morgan stanley as much as any time, and if anything, i mean, retail investors are a little more engaged. the stock market is a little higher. and don't forget that this evolution of morgan stanley, one-half of the company is in wealth management, in the brokerage business, and they're still tra

before today, before the volcker rule was approved the more risk you took and the more money you made, the more you would get to take home. presumably with the rules of the volcker rule now different things will be valued. client relationships, what do you do--how much concentrating do you "z" do you for for client as opposed how much did you do for the firm. >> there is still this culture embedded in wall street even now with this rule that says, it's fine to risk other people's money. if you lose maybe you lose your job but that's about it. >> reporter: well, >> well, that's true. excuse me. >> that's okay. are you suggesting that the volcker rule is a good first step? >> i think the volcker rule, the problem with it is that it does it go too far or doesn't it go go far, the problem with it is it's extremely complicated. it's hard to tell if you do it for your client or if you do it for yourself. and if the regulators decide two or three years from now if they're going to be as tough. >> and it looks like the regulators are not going to be tough at all and it's something that is ver

will the volcker rule work? how is it going to work?it is only going to work out if there is constant vigilance on the part of regulators. there will be so much discretion to the five regulators charge of overseeing it. they have to be in the banks learning about their models and their best practices and how to distinguish what is huge bets and what is regular banking at david e. >> are there loopholes or legal challenges? >> i believe hundreds of lawyers are trying to figure that out as we speak. the door is open to loopholes. so rules are written vaguely. it depends on whether regulators try to close out this language and what kind of agreement can be found between regulators and the compliance offices within these banks on what these definitions on's regulative trading and hedging actually mean in practice. will be "less liquid markets, higher transaction costs, a weaker financial system, and richard lawyers." lawyers." >> that is a pretty dire protection. it could be worth it from a regulatory it. you do not know. my problem with th

the federal reserve and other agencies adopted the so-called volcker rule to prevent the risk-taking elped cause the 2008 meltdown. we'll explore the details and potential consequences later in the program. the supreme court now has to consider a rule forcing cuts in air pollution from power plants in the south and midwest. the justices heard arguments today on the 2011 regulation. it requires 28 states to reduce smog and soot that drifts into the northeast and mid-atlantic. a decision is expected by june. secretary of state john kerry appealed to congress today for more time to negotiate over iran's nuclear ambitions. last month, the u.s. and its partners struck an interim deal that slows iran's uranium enrichment in exchange for easing some economic sanctions. today, kerry implored the house foreign affairs committee not to adopt additional sanctions for now. >> we're asking you to give our negotiators and our experts the time and the space to do their jobs. and that includes asking you, while we negotiate, that you hold off imposing new sanctions. now, i'm not saying never. if this

wall street's war on the volcker rule is actually heating up. after the lawsuit was filed by the american bankers association, regulators now considering dropping a provision of the rule that could force banks to sell off their investment. it says it could take a while to get through, more than the annual earnings, and if that provision actually is implemented, that is what they will have. we'll regulators stand firm, given to what is demands by wall street bankers? let's bring in the professor of economics. we have been debating this going on three years now, coming out and filing a lawsuit, they are not giving up. do you wonder if the volcker rule will be diminished piece by piece by piece? >> i don't think so. this particular thing they are suing over is not really at the center of the volcker rule. the center is proprietary trading. this isn't even on the outskirts of the volcker rule, it is on the outskirts of the outskirts. it is about this hybrid sort of hybrid security that some banks issued, it is capital for regulatory purposes. cheryl:

what is our fear of the volcker rule. >> our fear of a volcker rule -- cost ofker rule the imposing restrictions will limit the potential for systemic risk will be higher than we expect. so the benefit cost analysis, toch is sort of, do too much prevent potential damage in the future and pay those costs now or don't do that and then run these risks. that is the trade-off we have. and the people who don't like the volcker rule, other than those that are self interested, the ones who say those restrictions are powerful enough to produce cost. within thely analysis, and the sophisticated analysis, title one and type two, what most of our viewers would say is, yes, but we are not in a vacuum of manhattan, we are not in the vacuum of vacuum of, not in the the united states. we are doing it in a complex global system. volcker rule the succeed if not in the united states? on the other hand, if it generally creates an increment to the stability of the financial markets that are so liquid and deep here, it may turn into a competitive advantage, tom. the 1930s,ngton of ben bernanke, our chairman, out of p

important topics today, banks turning banks upside-down, the ins and outs of the new rule named after fed chairman paul volcker. double or ruled in effect. another big story today would be the glass ceiling shattered in the auto sector.f general motor and what she may bring to the table. more snow this winter, these cold snaps have an economic impact especially in the heartland. details coming up and the handshake that has managed to make headlines this morning. could this moment between president obama and the leader of cuba lead to something bigger in economic relations between the two countries? we will talk about that and more as we get going on markets now. ♪ good to have you with us on markets now and we have a lot coming up. we have big issues in a few minutes, we start with stocks and the markets pulling back a little bit from record highs that were set yesterday hanging above 16,000 on the dow. nicole petallides on the floor of the stock exchange. nicole: the dow jones industrials pulling back, 16,008 holding at 16,000 mark to the s&p holding 18 under market, a record close for the s&p 500, down two p

secretary, my question is about the volcker rule. like you, i was pleased to see that the regulators final -- finally came out with a rule. i think it's strong and comprehensive. i'm concerned by the exsense for pro pry tear trading with respect the sovereign bonds. frankly, the bonds. the hmm bank brought low by investment in greek debt is probably not just an idea. certainly a possibility in the future. i wonder if you can address the ability under the volcker rule of the banks to invest in securities which could be risky and volatile over time. >> congressman, obviously our initial core concern was the treatment of u.s. treasuries. and issues arose particularly with regard to the impact that the rule would have on banks with relationship with other foreign nationals and their sovereign debt. i believe the way provisions were worked out provides guidelines, you know a path for sovereign debt to be treated appropriately. i am -- i think if you look at the structure of the resume it's clear there is accountability at the level of the

david: regulators voted to endorse the new volcker rule that restricts banks proprietary trading. cftc commissioner bart chilton will join us a little later and how that rule will enforce something that nobody seems to understand. it is difficult to apply a law that people can't read. cheryl: bart always tells it like it is. lululemon, the big story today, is lower after the chairman announced he will step down. recall back in march, lulu had problems with yoga pants because they were quote, too sheer. david: outer wall says the president of redbox video rental kiosk unit is leaving the company. it is cutting% of its workforce. cheryl: david talked about it. toll brothers, largest homebuilder in the u.s. the stock is down. the company beat earnings estimates. ceo will be here later on in the show about the current quarter and the state of the housing market. david: president obama praised nelson mandela calling him quote, the last great liberator of the 20th century. the president and other leaders paid tribute to the former south african leader in a memorial service in johannesbur

under a draft of the volcker rule reviewed by the in work times, regulators will now require banks toy what risks are being hedged. the rule strikes out wall street's bonus culture, requiring banks to shape pay packages dheent s that don't r banned prop trading. they've created programs to comply with the rule. however, the rule does allow some proprietary trading. banks will still be able to make betts with treasuries, muni bonds and foreign sovereign debt. .they'll be allowed to built positions to meet, quote, reasonably expected near term demands of their clients. now, the bank is worried about volcker rule will eat into their profits, making it harder to engage in businesses that were exempt such as market making and underwriting securities. the industry is expected to keep up the fight against the measure. wall street lawyers and lobbyists will likely pour over the details to find any weaknesses that would let them sue the government and get courts to strict or water down the rule after it goes into effect. got that, ross? >> yeah. there's a lot to it, hampton. unfortunately, we'

be back very soon and i'm sure this volcker rule will develop a lot more. coming back that was alexis goldstein communications director of the other ninety eight percent time now for today's big deal. because she joins me now to talk about striking picket lines etc now we want to deliver by wednesday december twenty fifth well not so fast hundreds of workers at amazon and germany have walked off the job in an effort to pressure the e-commerce leader to settle on a wage disagreement now these are the first strikes against amazon anywhere in the world and today the strikers plan to rally outside amazon's seattle headquarters a top amazon executive in germany said the workers were mostly unskilled and had been unemployed for a long time implying they should be grateful to work at amazon ritual i turn to you in a down economy when employers have so much power like amazon does do workers have much leverage when they go on strike in a place like germany they have significantly more leverage than they do in the united states and that has to do with germany's labor

goldman sachs, among other. >>> and one of the most protected divisions is here, the so-called volcker rule. the u.s. regulators are expected to vote tomorrow on a final version of the rule. it is the element of the dodd-frank reform law that is design to ed to keep some of th nation's biggest banks from trading. many believe it could put taxpayers at risk if the trades melt down. joining us now to discuss is dick bovet, the vice president of research at rafferty capital. always good to see you. when you really cut to it, how many banks are likely to be affected by it, and how dramatically? >> well, it is going to affect a very tiny number of banks in the united states if it comes out the way we think it is. you have to realize they keep changing it. but if they put into effect the way we think it is, then j.p. morgan, goldman sachs, morgan stanley, to a lesser degree, and citigroup would be affected. and virtually all the other banks in the united states would not be affected. if, however, they choose to put something in there concerning hedging then the top 100 banks in the united states

thank you for being here and now i want to start off by asking you under the volcker rule only three percent of the banks total assets can be invested in hedge funds and private equity funds however you see a problem with this and you say it's because of the way that bank employees are paid and they're paid for something that is carried interest can you explain the issue that you have with carried interest so carried interest is basically the way that private equity fund managers get paid in the ideas instead of taking some of their money and investing in the fund as a part of their compensation they actually get to share in the profits of that company so if the company that they're managing does really well they get a chunk of the issue that i have is there's a little bit of a double standard so in the vocal world that carried interest is not treated as an ownership interest in that three percent limit you mentioned is. how much the banks can invest in these funds but that compensation that carried interest doesn't count toward the three percent limit so it's not seen as ownership f

david: we have breaking news concerning the volcker rule. rule is coming out. we have a preview. forgive me looking at my computer. the volcker rule will bar compensation arrangements that reward proprietary trading. a lot of question as to what that is. also for rin banks who have operations in the united states will be affected. there have been some question about banks like hsbc for example. it will affect their operations in the united states and that could lead to a lot of changes in terms of what kind of operations they have here. also the rule requires ongoing review of hedges to insure compliance of the a lot of details are beginning to come out now what the volcker rule is. of course there still remain a lot of questions about things like proprietary trading and what is, and what is not. we'll wait and see tomorrow once we go through the details as to whether they are addressed. just about two weeks from christmas and decking of the halls has already begun. how much are you willing to pay for a christmas wreath? wait until you hear

to fruition this week you know i think we will really know until maybe years from now how the volcker rule works i know he was lobbying for some harder you know rules that i think congress or the lobbies really wanted i think the end result was kind of a draw and i think really you know we'll see what happens in terms of the regulation that comes out of the volcker rule it's really just kind of a start to the process i think you know regulation is such a hard thing to do what i think i think at least the rules a step in the right direction the question is is what comes of it i think we really will know now i want to ask you how you feel about stanley fischer the former head of the bank of israel being named number two at the federal reserve. you know i think as many people have noted he was ben bernanke his advisor at mit so i think to me it's just it's it's what i a little bit worried about is is just more of the same you know i think it in our in our film we highlight officials like paul volcker and some of the regional bank presidents at the fed who have a slightly different perspective

regulators approve the volcker rule. will it make the financial system safer? we have a panel to answer the question. and later on, john, paul, george, and ringo -- well, they sort of joined me. we will talk to the members of strawberry fields about the business of tribute bands. ♪ x after years of debate among the volcker rule was approved by all five u.s. regulators. allows some exemptions for hedging and market making. it also limits hedge funds and private equity investments. and to to discuss this find out whether this will make our financials any safer, donald linson, and joining us from washington dc parts of thensform legislation. with its effects on wall street, daniel alpert. atounding managing partner lamson capital. rule?s in the volcker what is it all about? >> you have a very nice summary. thank you for having me. things.two it tries to restrict proprietary trading and investments in hedge funds, and it takes 950 pages to do it. >> if it takes 950 pages to do it, can you explain exactly why it takes so many pages to put ofether the details somethi

how did the volcker rule impact earnings? not only will it not impact earnings beyond maybe a penny per share, as people in the structure set up to comply, and that's already been taken. the banks might see a major windfall to not necessarily their earnings, but to their price to earnings multiples on those earnings. i think this rule could send them up. maybe even dramatically as we saw from the nascent rally in the group that we got just today. why? because the single biggest valuation since the great recession is what happened to jp morgan with the london whale incident. it's a lack of insight incident that cost them about one-third of their value. investors decided this group itself is filled with unregulated gunslingers who aren't reigned in by anyone, because if the gun slingers make billions in proprietary trading, then the bonuses will be fabulous, and if they lose a ton of money, they still won't lose their jobs. they can just blame the direction of the market and the shareholders are the ones that get clobbered. win

the volcker rule in place. replacing one uncertainty the bigger when igs this going to happen, is it going to happen with the smaller uncertainties, 800 pages with what does this mean for banking, lending, the macro economy. now don't get too excited about this either. mortgage debt rising, diana olick our ace housing reporter points out that's because of fewer foreclosures out there. that means that. but still normalizing and flat and not declining anymore. government out of gm. call this the tail bone of t.a.r.p., the vestige that was out there. that's progress that is done and out of the way. europe stabilizing. this much growth. but it was two quarters of growth and we haven't seen two quarters back-to-back growth in europe since 2011. >> and the china data supportive of a europe stabilizing that story. >> that's key to watch that. if we could get the economies around the world, the big ones firing on all cylinders that could be a game changer and you have as we reported earlier this week, rising household

our markets editor manus cranny has more on the volcker rule. tweed has an update on the eu's bank failure plan. banks? a victory for the did bank lobbying actually pay off? >> i think probably yes. a lot of lobbying and they got a delay through to 2015 in terms of implementing volcker. what is the rule mean? i think it is good for liquidity. it is good for the customer and it brings ceos to heal. the biggest issue with the volcker rule was the difference between what you do on a trading desk and what you do on a market-making desk. there are broad exemptions for market-making. you don't pay the staff as used up a proprietary traders. foreign bonds, you can train those but you can pick and mix on hedging. the exemptions are there. say, i know that my clients probably need that amount of inventory for me to meet their needs. the big issue for the banks was, you're going to frighten liquidity away. >> jamie dimon was very active in the debate around the volcker rule. -- londonnding well whale trading incident? >> when we look at this, this was thr

nothe volcker rule, it is going to be enforced by federal regulators until 2015. at happens in the meantime? wayhat time for some act or to get around the rule? we have more than a year? >> banks do have to continue to conform to the role in good faith prior to the deadline. the biggest banks only have six months in which to comply and in which to start reporting their metrics and in which to start implementing their compliance program. >> u.s. chamber of commerce are not too happy with this. main street that businesses will be hurt because the rule is going to make it harder for them to raise capital. do you share the chamber's concerns? >> the rule allows institutions to engage in the main street lending that they have always engaged in. what it prohibits is the proprietary trading which is the short-term speculation. i think that much of the activities around main street that banks engage in today, they can still do. >> how much reform can be done if the local rule -- volcker rule is not fully funded? >> funding will be needed. it will certainly take a lot of ef

other words, it seems to me that if we're serious about minimizing financial instability with the volcker rule we will have to have a decline of compensation plans and ask if the fee arrangements are goal.ing the rule's if the is that there may be excessive risk with that kind of compensation. bank risk-taking imposes costs on the public and the economy, shareholders interest may be served by greater risk-taking. this is a moral hazard. justified by the relatesal hazard that to regulation of banks. and the structures that reward risky baby or will undermine the volcker rule. isthe volcker rule implemented, they have to focus on compensation with the goal of discouraging excessive risk. we set of the composition to discourage excessive risk-taking, you will realize that the rules not need the as strict. volcker rule could also be more restrictive. -- eed to stay village and vigilant to minimize the possibility of for financial instability. as noted, the agencies have collectively made implementations that we move forward. that is both from the need of the enforcement of the rule and how the to

lori: and, of course, five agencies approved the volcker rule this week.der that, and really the banking industry in and of itself. i suppose this is the best place to bring in your new book called "guardians of prosperity." how will the volcker rule affect the profit centers of these major institutions? >> well, i think it depends how rigorously the fed or other agencies want to pursue the volcker rule. if they choose to take very narrow definitions of what is, you know, market-making activities, narrow definitions of how the balance sheet will be used to invest and most importantly narrow definitions of hedging, then basically if they do that, they can hurt the banks quite a bit. but there's no indication that they want to do that. so the net effect is i don't think the volcker rule is going to be terribly harmful to the industry, and i think that you really start to have to -- you really have to start thinking about how does it affect the people who do business the banks. in other words, how does it affect the price of bread? in essence, you take liquid

and have to regain that. >> the volcker rule said that. >> and worried that the volcker rule to play games around, and storm trust. >> in part of the business, catching lightning in a bottle, thank you served joining us. >> the country with the control of the exchange by volume has banned financial institutions from trading in them. it was prohibiting the use of the financial sector. it was knocked back by any government of central banks on the news that the dollar skyrocketed. 100% in the past two months. >> bond yields rising again on the back of the economic data. the yield on a ten year treasury inviolable in three month, better than expected gdp jobless claims leading some to think the federal reserve could start winding down of program, a key factor in the decision for the jobs report, the last before the fed next meeting and ben bernanke's last recovery. cheryl: he hands over the baton to janet yellen. this is happening today. fast-food workers across the country going on wyatt, 15 our -- $15 an hour wage. a live report coming up. adam: 9-5, 24/7, co-founder traded in a corpor

with the approval today of, yes, the volcker rule. this rule since it was signed into law as part of the dodd/frank banking reforms of 2010. today the volcker rule, named after the former fed chair who did initially propose it, mandates that banks cannot use deposits insured by you, the rest of us, to make big, potentially disastrous market bets for them to make money. president obama issued a st. paul this afternoon, saying in part, our financial system will be safer, and the american people more secure because we fought to include this protection in the law. joining us now is jared bernstein, senior fellow at the center for budget and policy priorities. and robert reich, an economics professor at ucla berkeley. labor secretary under president clinton, as you know. and his new film, "inequality for all," about america's widening income gap is currently in theatres. welcome to both of you. >> thank you. >> let me start with you, jared, the consumer financial protection bureau, some of the recent prosecutions we have seen of banks, inc

>> the volcker rule is meant to ban or stop proprietary trading. most listeners know trading by banks for their own profit, most of the big banks and others got out of that because it was not necessarily risky and they were anticipating the volcker rule coming and the volcker rule can out yesterday does allow for significant exceptions for market making, appropriate hedging and effective date is delayed to 2015. a lot of details to be worked out but compared to what it could have been it looks like this is a more constructive rule than the version that came out a couple years ago. lori: are any participants worried about their profitability being sliced? >> many of our companies had already vacated the proprietary trading space and there are trade-offs involved. if you have less trade off there will be less demand in the marketplace, that the economic effect, the cost of compliance will be shifted somewhere. international competitors don't have this rule so it could put american institutions that competitive disadvantage globally. all that being sa

it's playing out the clock and gary gensler is working very hard to make sure that the volcker rule gets written before he leaves whether that happens or not still remains to be seen indications are that once timothy takes over the sea f.t.c. we're going to see a very different c f t c and we're going to see a very different level of aggressiveness relative to the big banks so i think if it doesn't achieve his objectives before he his term is up and then it's put him sod's hands we might see something that reformers are going to be very happy with now there's speculation that shelton might run for political office and i realize that you have to kind of remain tight lipped but do you have any indication about what he might be doing after leaving office he has given the mainstream media no indication so far well i have to respect when i'm told things off the record i think personally think burchill would be a fantastic politician i don't know that he has the stomach for it in my mind would be like you know elizabeth warren democrats and i think i see a new trend coming in the united states