suits sigh on the phone it's a pleasure to welcome to the program
the host of viewpoint on cards
as well as uh... writer whose work appears in things like slayton all over
uh... the web college that's working for the program
active always put a degenerative so if you are down
well i don't know if they did and he thinks ever about their live where i
guess ultimately they did but it did take
their own sweet time what what what what was his explanation
or be it would kind of circuitous but what'd is distilled down to and i don't
want him make his case somebody's we've been critical of the said
at many levels in this is one more example of their failure to perform
their primer job which regulate securities in financial markets
day
new that there were serious allegations of impropriety in
the allied war market
they actually had phone calls quartered phone calls from people in the market
chapter and verse of every element of criminal conduct of the reagan and other
improper behavior
and in that context what they did was
shenandoah memo saying here some ways you might improve it but they didn't say
guys discriminant conduct there's market bid rigging going on the bearer is false
reporting
they can continue to use a whiteboard as the basis
uh... debt that which he issued in loans were made by the fed to other
institutions even that they had evidence that
live or itself was being manipulated so
certainly not the sort of
aggressive
behavior one would expect that when you get it you're told that the most part
arguably the most single most important
interest rate in the financial markets
being manipulated
so egan look at one the one hand
i think it's a fair point we shouldn't get distracted by blaming the regulators
when the coup over criminal conduct was being done by the bankers on the other
hand
for those of us who've been saying that the fed
structurally needs to be reexamined in that
that when comparing to which they are the fed
was really a partner of the banks rather than the regulator
i think this is one more chapter in the bat
and that's all right
is
i mean
what why can't uh... lie board just be a function of of the the rates that these
banks got the night before
okay there're so many different ways that you could come up with it
a number of understand why bowers meant to be essentially the cost of capital to
the banks
to debate a book the costs are committed to talk about arcane banking stuff but
it across the bank three percent to borrow then award went out at that
something above that it needs to make a profit and so that but one of the
critical component should be its cost of capital
and this is all maple mechanism to determine that
he could come up with a hundred different ways to determine the cost of
capital
in fact before a wide bore
was the base
of most of the of the debt and fifteen twenty years ago there were other
numbers that were used
many people think why were slaughtered
uh... you get back it get to take a look you're marginal rate rather the average
rates which shouldn't move all of the deputies big issue but that all sides
there are a lot of different alternatives
it should be probably should have you know could be embraced
it's i mean is this indicative of just sort of the whole
uh... financial maja heartbeat the the vast amount of the financial markets
basically just being raid
amenity
and him
here's what you're seeing once more
you have a self-regulatory process thoroughly failed
and if it's with the first time
this story has been told that maybe the loop
people of the markets could say well
somebody messed up this one time
we we've learned will move forward
the problem is
everytime there's been a self-regulatory body that has been designed and charged
with the obligation to oversee structure of our capital markets
they fail they have not
lived up to their task they have not
stepped in to find the myriad violations better they are so
if it if we needed one or more message of this type it'd certainly
of very powerful statement itself regulation doesn't working up the for
those of us have been trying to
scream for middle pops for years
get smart guys
workopolis didn't believe the markets but markets need to be
overseeing in
two-part unita reparative football field or at the olympics you know sports run
to the address
the financial markets the only place we still say oh gee will trust you tune
make your own calls doesn't doesn't work and it seems to be a step that there are
regulators that their 'em
there he's there happily album at stall
or they are almost indistinguishable from the people that they're supposed to
be regulated
yet that but i think u
so much a part of the story that the new york fed
emotionally who was an extension of the financial services sector that the and
this is why i get the issue of that the
board of directors of the new york that has on it
the c_e_o_'s of major banks
they pick the president of the new york fed until recently just backpack changed
recently thankfully
but they controlled the psyche of the institution
because not only the revolving door but there is just this
they see as the semi auto internship between the fed in the banks instead of
recognize who wait a minute
would where they are not exactly sure he'd mostly but
adversaries in the center we've gotta make sure that
the temptation
to do things that are improper doesn't overwrite your sense of uh... obligation
to marketplace and and just as i think alive or story broke there was also a
peace i think it was in the times
about uh... essentially the front-running that's going on with uh...
too
between hedge ant
hedge fund managers and all you know served as system of i guess cough twice
in a five year analyst is good and i was on this
uh... yeah
the book front-running is one of the ordered games out there because it is a
folks understand it
if i know that uh...
the client of mine
is going to put in a bid to buy order that's going to drive the price
of a startup
i sneak in ahead of him by the stock now before it moves up
then put in the order and then sell again a little did he do it often enough
to get very very well pick
it it's the same thing is if i know in investment bank is going to say instead
of
telnet stock issued by an upgrade of the analytical work it out marketplace
that's going to move to stock up a couple with him body headed back or self
to downgrade
um front-running violating all sorts of more than obligations
but not surprisingly it goes on and it goes on with
e greater frequency and anybody wants with it
and although at tell me uh... what you made a of uh...
uh... sandy
welcome while coming out uh... last week
essentially i mean it's fairly accurate to say that this guy's the grandfather
the too big to fail banks right i mean
and now he's disown ng his grandchildren and do what it was
you know i wish i wish you were that simple you know this it'd come to our
grandkids are ordered
web a simple to develop a plan to do it but uh... he this was if it was and on
believable moments anywho
was but when he was one of the great deal makers of the eighties people of
the reserve gregarious sort
he was the one ideological usaid bigger bigger better bigger step
we want every bank to merge with your commercial banking investment bank you
put citibank a trappist together
and could never bought mine there's a law that precluded
will get congress to repeal that one financial services and he was so strong
because they were killed plus people
e after they get it retroactively to permit these people to go through it
kind of remarkable
parable apparel and we're the power was
narrow all these years later he's saying books didn't work so well
and on the one hand you want to
congratulations
for the intellectual integrity
that you
you know are showing in inr recognizing this in technology of the error and that
is important
because i think it now leaves the few folks out there for store just to find
those murders cut
with no friend left
on the other hand you want a statement he respond to blow for some really
grievous
horrendous stuff
re-think what it happens to our economy
to a great extent because we completely deregulated financial services we let
this of which the fact that it is destroyed he's bubbles have destroyed
our comic so avoided yet city disowned
these kids which are the big banks on the other hand does he want to
congratulations for your points a
we're fundamentally belong and uh...
now even you cannot
now does bob rubin have to give back his salary has executive vice president of
the citigroup or
urged that the
as he gets tevez
late-night night simply might get food you've got it will investigate out
what did this in one of the great engines in the democratic party
obviously the
sort of iconic leaders who were there with president clinton fully embraced
this
uh... this movement bob rubin is years ago he went over to citibank afterwards
would be in non-executive chairman think they've been title
paid pools of money
um... and you know this was the ideology bit
it was uh...
those
who were at the time and for years worsening guys bases
dangerous dangers path
or in the distinct minority back then and there was
screening in the wind
uh... i think that the history of now increasingly written an obvious that it
was a grievous error and uh... when you catch sandy weill commencing at yet not
a good idea i'd think
this story about them
finally concluded
do you think the democrats have uh...
have in any way
change their perspective on this and i don't see any evidence that there are
any less uh... a sort of i guess
in the pockets of of the big banks i mean i think you know well tim geithner
his presence in the administration and uh... i think you know what
and and and bob rubin's influence on the administration he may have been there
were it not for m
uh... scandal that item up i guess in
in in the fall of two thousand nine error two thousand eight
uh... is there any indication that the the democrats to have that
have change their perspective on this in any shaper
i would take
somewhat i mean did not enough obviously but that means to me with with respect
to camp and i think not nearly enough and uh... campbell was not
even when dot frank was moving real was not a fan of the vocal was not a fan of
be necessary steps
the uh... and positions and policy they were put in place about frank
some of which are good
that are
uh... include important
barney frank
pushed a good bill
it doesn't go as far as i would like to some call the safe banking bill that
would go for that but i think some boys whose they are
were
jerry brown and others were pushing uh... uh... a more fundamental
restructuring
to their voices in the democratic party that are better
treasury department was not among
and i think
overtime again that is becoming increasingly clear
i think what we've got to do now was make sure that this is where i don't get
any new legislation through a congress constituted as it is right now with
uh... uh... republic from a house and that he said democrats not push minicom
or vigorous
what we need to do is make sure that
the vocal is properly and and rigorously interpreted to at least minimized the
risk from proprietary trading that can still be imposed on system
i don't know if you've had a chance to read the book obviously you've got you
read it
the the u
you have a lot of people wanted the refillable some in the same boat but the
for it
uh...
the
has uh... brodsky uh... deal brodsky's a book who was the former
uh... inspector general of the tarp
has there been any ever have elections that you think came out of there that
uh... were
word new or
or ending made certainly show you the specifics they were a bit
yet you get your credit union or friend and i think it's a spectacular but i
don't know
it getting steve matically it is again additional evidence of what
new suspected believes i think he tells it it's a great book it's great reiki
he and i have on the show ah... last week
he tells the story with a texture and that would uh... granularity that makes
reopened
personal interactions with insider
and at the battles hideki waged
make ah... treasure department warren carpenter program more sympathetic to
homeowners for instance
the treasure department was bill that the banks it did not
anything about the tute
homeowners and and
that was both role ideologically wrong economically the bleak
and the dragged on the economy because homeowners sobered by too much debt that
has not been probably uh... reformed
is what people are calling for a week one of the factors don't keep our
country from graham
but he'll tell the story of a spectacular where he's a good
storyteller andy
he was gonna trenches so i think he can bring
more than an academic a bite to eat it seems to me
aid that the the big and i think uh... the uh... i mean that there were many
who
this earth suspect is from
from an outside perspective but there seems to be almost a hostility well
hostility towards homeowners amin when you look at hampden how is designed and
then we all know that it was incredibly ineffective and uh... providing uh...
alone modifications for underwater homeowners but uh... he really does in
in
in his telling seem less about incompetence but in fact achieving
exactly what the goal
all was uh... from the administration perspective which is such a just by the
banks more time
with the hopes that somehow things will turn around
you know i think that's right and i try hard not to count mode over a pw motive
where there's not upon evidence but certainly we know that
the urgency that attached him
pushing money
blank checks almost into the coffers of the banks
uh... so that their solvency would be secured
and almost as hope other we needed to do something like the banks go bankrupt
but the other pieces that that would have been ordered to again addicted both
ideologically and economically disastrous consequences was
the plight of homeowners
and
that was apparently
split second third fourth thought
so far down the wrong of considerations for that
it was not done not pushed and at the moment where there was leverage over the
banks because treasury said look you need the money were giving it to you but
here the things you must do
to reform home mortgages
once they had the bank of the mba bank of the money the web which was gone
so the failure to negotiate was a grievous
packed or error
the failure to appreciate how important it was to do this was the strategic air
do you think that many given the chance to do it over they would do it
differently amin i still get the sense that this was more this is is less about
sort of a obtained good analysis of what would fix the problem and more about the
almost a
and maybe ideology isn't uh... the right word but almost some type of religion
that this is just simply uh... it's just not the american way to help out uh...
homeowners directly
i don't know i've gotta believe they would do it differently now if only
because our economy is
if pat that is the word of the moment rework point or
unit disastrous dynamic here were grown about one-half
uh... points last quarter that but certainly we are
he could not be shaped anybody wants to be and job growth they use
is close to stack we will see friday
what uh... the the last month's job numbers look like
but everybody colleges homeowners and excess debt they're still enormous
played on the economy so
i've gotta believe they would do it differently because it had to work out
right i will let me ask you uh... one more question sort of author of the
uh... this is more on your uh... former politician d
when you see that ron's hyatt
uh... like literally every couple of days
ag i'm just more and more astonished
that this guy could be this bad of a politician
i mean you can almost putting aside uh... his complete with what seems to be
a complete lack of
of policy formulations or just about anything
how is that this guy's been in running for president for c_n_n_ here's
and since he's so bad at this
beat me use evaluating we describe the most awkward politician i've ever seen
the there's just assertive hesitancy in every interpersonal dynamic
that amol i want to embarrass now commenting on a making fun of them
because i a decade
camp to a key to talk about but if you go over to london
you gary
their gas you're trying to
you're you're visiting a one in the home of the olympics or or longer style body
historically
kind of throw water in their case effect
you don't get equipped with an interpreter that matter of
inter-personal dynamics little own a candidate
out you sometimes have a hard time traveling what year is not turning the
right way
uh...
it is just hard to watch some props
ciskei tab advisor
sort i mean i'm actually out our stand how this happens i think is it seemed
like he
you know he was a real this was not a hard question that he got from brian
williams when he did that and this was out of this was a total throw-away
question he seemed like he was hitting talking points like he wanted to remind
people of what he did and it seems completely
told him you know it equal to be pitch
he had to get the best defensive for
him in this context
uso coldly analytical
that he cannot
just give you that the pool light
chit-chat answer
how do you find one game in the u ready for the olympics because they're not
wonderful it's great i can't wait to get my paper event you know this is good but
cant wait the opening ceremonies going to call to something that that nobody
will remember but is pleasant in and out the
instead he's got to give you the well you know it's what three things that
physical quite right so let's talk about the effect while company chillout being
normal i don't know i i i don't get it but uh... who might play i would love to
see this guy licking a being invited to a wedding and just watching still up in
just a leg to stand is horrible
while i hate that down that she's wearing
and in this
the students to stand by the part about them is really on the part well uh...
eliot spitzer opposed of viewpoint uh... on uh... card thanks so much for uh...
taking the time to speak with a little bit but i would have