Charlie Rose

futurevisionaries  04/22/2011 03:34 PM Report

John

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Educateus  03/05/2009 04:04 PM Report

Courage and honesty to you and Mr. Mack have him on again and redem yourselves. The argument for greed and what it lead to has been well made in the comments and we painfully also live it. After 9/11 all we had was housing e.g. construction jobs and home equity consumerism that could be leveraged or possibly suffer a deep recession. Was it fear of a deep recession after 9/11 that created this collapse??? ...and did US Banks and the Fed start the wroldwide housing bubble???

Capslock  03/03/2009 06:57 PM Report

My friend John, since we're chums, I won't ask you a difficult question such as, you expect me to believe that you didn't see this crisis coming?

CR

tartufe  03/03/2009 05:29 PM Report

How bout Bernanke. His studied self-confidant assertions wouldn't improve anything but it's good to make these guys commit themselves. When AIG implodes ANYWAY it's good to have a record.

All the big banks, hedge funds have doubtless leveraged the gimmickry so many times it's irredeemable.

Letting them belly-up, and accept the chaos will be cheaper than pouring our money into them and then accept an even larger amount of chaos - after we've feathered their nests even more.

What's Bernanke's, Geithner's cut (kick -back).

Repeating, a culture that tolerates the oligarchs running this nation of whores deserves the house of ill-repute conditions attendant with the profession.

Shaft  03/02/2009 03:12 PM Report

Mr. Rose:

This was one of the good conversations I heard, it was very sobering to hear the mess from the people who are in the eye of the storm, the financial crisis. Just today, I heard AIG reported a loss of $62-Bil$, and seeking for another $30-Bil$ in the form of bailout. Please briong more of the financial institution CEOs, let's hear what they have to say.

tartufe  03/01/2009 10:12 PM Report

NPR's "This American Life" had a great dumbed-down run-down on the melt-down. It was at once great and depressing. I heard no way out beyond time and attrition. 1930's a depression; 2008's A DEPRESSION.

Chino  03/01/2009 09:41 AM Report

5 People Can Save Banking from Itself

Who can argue with this simple alternative to global economic holocaust? Give 5 individuals the mandate to run a conservatorship of the entire US banking system. These 5 people together will act essentially as the General Partners of a Limited Partnership – exercising tight control with unlimited personal liability and unlimited personal gain. Congress writes them a blank check.

The General Partners recruit 7 Limited Partners to help them administer the restructuring. The Limited Partnership can staff-up as they see fit. The team gets 1 year to show “material” improvement in well-defined metrics tied to 3 key areas: (1) credit flow (2) balance sheet strength and (3) risk control.

After 1 year, Congress dismantles the team if it does not hit its numbers. If the squad does make its numbers, it may exercise one of 3 options: (1) re-privatize (2) extend the Limited Partnership 1 more year with even tighter performance metrics or (3) voluntarily disband.

The General Partners will include 3 private-sector actors, one academic and one government actor. The 3 private-sector actors should be: (1) Warren Buffet (2) George Soros and (3) Jamie Dimon. The academic should be either Nassim Taleb or Nouriel Roubini. The government actor should be Paul Volcker.

I think the rationale behind these selections is quite obvious. Naturally, many will point to the dangers of giving these General Partners “unlimited upside.” Given the names thrown out above, I believe these individuals will do the right thing and voluntarily forego any upside they may be entitled to. Neither Congress nor the Administration should have much say in the decision-making activities of this Limited Partnership during its 12 month life. The only time Congress can step-in unsolicited is after month 12, when it collectively makes a judgment regarding performance metrics.

Most people know what needs to be done to fix the financial system - price unpriceable assets and get credit flowing. This process needs to happen rapidly and inexpensively. A private banking system with 1000 players acting out of self-interest run by managers with questionable judgment cannot possibly accomplish this. A Congress and Administration comprised of 500 unique decision-makers cannot possibly accomplish this. A public-private partnership between the two above groups will drive up complexity and cannot possibly accomplish this. A 5-person team composed of individuals most of the world agrees exercised better judgment than most, given a clear mandate, can accomplish this.

tartufe  02/28/2009 02:50 AM Report

Hear, hear Don-N-ABQ.

Don-N-ABQ  02/27/2009 08:37 PM Report

Mr. Rose,

When are you going to go back to the late 1970s and early 1980s when your producer at 60 Minutes told you to ask questions that put people where they need to be:

ON THE HOT SEAT.

We, the average American viewers, consumers, investors, voters, workers, and solders want:

1) Some answers

2) Some sweating

3) Some loss of finances going back four years

4) Some jail terms

For the top executives at the top 30 or so firms responsible for this irresponsible leverage acceleration that has occurred.

If you can't step up and ask tough and penetrating questions, then let somebody else ask them for you.

This is not the time for back-slapping with your buddies. Get a producer on that show with some balls that push you to role the sweat off of the foreheads of these "financial experts."

AND:

Where are the guys who got it right? Where are the quests who did things right, saw this coming? Who are the bank leaders that didn't chase the tail of the leverage dog?

How about having the top guys from these banks on your show:

1) United Ban of Alabama

2) First Financial (Indiana)

3) Citizens Holdings Co.

4) Arrow Financial

5) First of Long Island

6) Republic BanCorp

7) First Financial Bankshares

8) Glacier Bancorp

9) Financial Group

10) Bank of Hawaii Corp.

11) Westamerica Bancorp.

Maybe all of this bailout money should go to the guys who got right instead of the ones who screwed things up?

If the federal government keeps printing money for the bad banks (this is also inflationary by the way) it will start to devalue the banks who did things right. Is that really fair?

Where is George Soros, Jim Rogers, Bill Gross, the guys who kept saying something is not right here...

Pleaselisten  02/26/2009 11:25 PM Report

The only reason why the public got to see my comments below is that I demanded it. I followed up on my email and saw that quickly it was deleted My comment about my feelings around the interview with Mr. Mack is I asked for you not to delete my email.

Pleaselisten  02/26/2009 10:51 PM Report

Wow..It appears that your community leadership has immediate desire for censorship of ideas that don't make the whole look good. I think that Charlie has a greater audience if you all open up your thought process and find a larger audience.

Pleaselisten  02/26/2009 10:05 PM Report

Charlie:

I am a huge fan of yours and have looked to you for clear headed, non-dramatic journalism that helps many of us stay on top of the truth as it may lie on any evening. I am a single mom, hard working individual that has made a great deal of money in my career. This was the most distressing example of a dumb interview of a friend of yours that just shows us all the lack of accountabilty of both CEO's and the insider group that you may be a part of. You need to look at yourself in the mirror...

anne

tartufe  02/26/2009 06:20 PM Report

Damn, robert_CT and smitch, I thought my shorts were in tangled knot over the potential destruction of our system. The validation is appreciated. I've advocated FBI, SEC, Fed Reserve, Congress (too complicit of course), investigations, trials, proportional fines, incarceration (and whatever they do to treasonous bastards - bin Laden couldn't be more pleased - firing squads used anymore?). Need to start with Henry Paulson, Bernanke, now Geithner, Summers, Rubin plus at least the 50 largest banks and hedge fund too-clever-by-fractions wise guys, CEOs.

They have doubtless leveraged the leverage and the leveragable into indiscernible porridge incapable of being sorted out. Consequently, those that partook of the porridge should die by the porridge - or is it kool aid? Anyway they should be allowed to fail to purge the system of the gangrene. Moral hazard prevention a side benefit as well. Dislocations? Sure, but better to pay that price than the one for rewarding these maggots for what they have done to our country (a great experiment till they came along).

Thanks again. Misery and company and all that rot.

A last thought, the law makers are complicit / duplicit colluders and virtually untouchable. What's the remedy there?

Anarchy?

robert_CT  02/26/2009 04:04 PM Report

“Nobody saw this coming”

Mack is an idiot! The history of markets is a history of bubbles and any CEO of a major financial firm that couldn’t see the biggest bubble in history doesn’t deserve a job. I am a nobody with no special insight whatsoever yet I put 25% of my net worth into gold in late 2005 specifically because I thought that U.S. economic activity had reached an unsustainable frenzy and because I believed that such activity was built on a reckless and unsustainable increase in leverage. I am not a “gold bug” and had never bought gold in my life. I feared a complete collapse of the U.S. financial system and believed and continue to believe that we may witness the insolvency of the U.S. government or a Weimar Germany style inflationary spiral which are really the same thing. Time will tell but this scenario is a possibility. Furthermore I sold off all my financial stocks by October 2006 in anticipation that they would crash. While I wanted to short them I didn’t because being short is very challenging psychologically. I am now buying selected stocks including the financials in expectation that I will, with some luck, make at least a 500% return over the next five years. That is if the U.S. government doesn’t go insolvent, a real possibility, hence I continue to maintain by gold position.

So if someone like me had a sense of this impending disaster how couldn’t Mack see it? Has Mack ever heard of George Soros who warned of such a scenario beginning a few years ago. In addition, Soros has a view of markets that is at odds with the conventional economic dogma taught in American business schools and he has written several books outlining his ideas. Is Mack so dumb as to believe in the efficient markets theory?

I also note that Mack is one of the clowns who went to the SEC in 2005 and persuaded the SEC to change the regulations limiting the leverage for investment banks, thereby allowing MS to increase its leverage from approximately 12:1 to 31:1. And there is no doubt that Mack is one of the fools, along with Robert Rubin, Alan Greenspan and Larry Summer who argued against regulating credit default swaps and other derivatives. Of course Charlie Rose is Mack’s buddy so none of these inconvenient truths come up in this interview. I worked for one of the major investment banks for about 8 years in the early 90s and by my estimate only about 30% of the business activities at these firms relates to the real or productive economy. Sure they issue bonds and stock on behalf of real companies engaged in real economic activity but about 70% percent of what they do involves promoting hair brained mergers for the sole purpose of generating fees (i.e. AOL-Time Warner which I promptly shorted post merger); financing financings to generate fees (see CDOs and CDOs squared) and running speculative leveraged interest rate arbitrage portfolios (at the peak about 2/3 of MS’s, MER’s and LEH’s balance sheets consisted of nothing more than naked speculative interest rate arb positions which collapsed under the weight of their own stupidity). Then you have all the fee generating activities geared to private equity and hedge funds which are not part of the real economy but rather “helpers” to use Warren Buffet’s euphemistic term. In reality private equity and hedge fund firms are parasites on the economy who have learned to use the banking system and capital markets to turn the real economy into a big game of monopoly for their benefit. In short the financial services industry became corrupted by greed, arrogance, hubris and more greed. The investment banking/banking industry needs to go back to what it was at one time. A legitimate business that promotes real economic activity by making markets on behalf of real investors and that raises money for real companies.

Mack, Fuld, and Stan O’Neal should be forced to forfeit every penny they made beginning from the day they increased the leverage of their firms above approximately 12:1 Then we can debate whether they should spend any time in a federal prison for destroying the savings and livelihoods of so many ordinary Americans. Don’t get me wrong there is lots of blame to spread around but these people were at the center of this calamity and it was all driven by sheer unmitigated avarice. As it stands Wall Street is primarily just one big “pump and dump” operation, that lurches from one scheme to the next. After the dot com bubble Wall Street needed another scam to generate fees and massive bonuses and when Alan “the ideological fool” Greenspan lowered rates to 1% he laid the ground for Mack and company to gin up the next bubble. The problem this time was much worse than the dot com bubble because it was built on leverage, hence the calamity we are now living through.

I wouldn’t be nearly so angry about this if these people had any sense of shame or contrition but Mack seems so pleased with himself because of the three of four weeks he spent huddled in his executive suites working around the clock to save MS. It would have been nice if Rose pointed out to this jackass that the firm wouldn’t have needed saving if it weren’t for Mack’s stupidity and greed. In any event Mack’s idiocy and incompetent management allowed me to take a nice position in MS on Oct-10 for $7.00 a share. I can’t wait to bail out of this stock in a few years time at or near the peak of the next bubble assuming of course that we aren’t running around with wheelbarrows of worthless money by then.

Mack, Fuld, O’Neal, et al. want us to believe that the system was swept away by some unforeseeable event but the reality is that the financial system collapsed under the weight of its own greed and stupidity. Nice work guys!

smitch  02/26/2009 05:54 AM Report

The solution is people like me taking people like you and putting you up against the wall. Your selfishness and cynism is creating a new socialism, thank you, which you may not be alive to witness. We are tired of you!

I wish I could lay out 4,5 and 6 but I can't, because that really doesn't explain a lot of money out of you and it's really timne to take our guns and take that money back that you've made so dishonestly. Read your book on the beach, I'm being to understand Al-quaida. You actually said how how you suffered on the beach in South Carolina while the world needed to work out its global dynamics. That kind of says it all, doesn't it.

smitch  02/26/2009 05:42 AM Report

Yes, it's becoming unstuck, but you don't really care coz you have a bank account that' way beyond the imagination of any struggling individual. So why should we listen to you instead of putting you up against the wall?

smitch  02/26/2009 05:38 AM Report

Yes, in Japan they really could't get it going, really slow, so I thought I'd steal your car-stereo, and that would be cool, coz it's all the fault of those Japanese.

smitch  02/26/2009 05:34 AM Report

Get these people. Arrest them!

smitch  02/26/2009 05:32 AM Report

All right, put them in the gulags, we've finally been shown that there is a case for punishing those whose exploit the rest of is, and they need to be put in some kind of prison for defrauding the rest of us.

smitch  02/26/2009 05:26 AM Report

Basically, you have a lot of people paying too much on their loans, and that's what's created this crisis. So, why not overthrow the whole system? It doesn't work.

smitch  02/26/2009 05:21 AM Report

Has no-one thought that those who offered loans from 10-20% interest simply lose their loans (with a lower rate of interest) accepted what should have been the norm anyway?t

Why is the whole world suffereing coz a few creditors want to charge 20% instead of 7%. We should be going for them, instead of all this xenophobic stuff.

smitch  02/26/2009 05:12 AM Report

Loads of money. You know the whole thing's going to implode, but do you make the pact? Well, yes, of course, but what do I say afterwards? I'm gonna have loads of stuff, like houses and god knows what what, how do I explain it?

Well, you say you just didn't know. You sold someone something that you knew they couldn't pay, but you sold it to someone else, coz they didn't know they couldn't pay it and in the end the whole system kind of collapsed and the govt kind of bailed you out, but the person who originally took out your kind of bogus offer still has to pay it. Mmmmm, very strange.

smitch  02/26/2009 04:59 AM Report

'Work their way out of 'their' problems. Yeah, cool, chill, I just lost 40K, which was supposed to be my problem. That money went somewhere. Yeah, shake your heads. The rich are keeping their money and you're losing yours.

smitch  02/26/2009 04:54 AM Report

It's a question of sucking everyone in on an up-market and dropping them in a down-market. Work for the so-maligned government; the rest will harm you.

smitch  02/26/2009 04:52 AM Report

But everything would have been the fault of the Japanese. god it must have been hell, on that beach, so focused and burned into your soul, in a time of crisis, but you suffered and you learned. And that's why you're broke now.

smitch  02/26/2009 04:48 AM Report

The 'rocky road' is for who?

smitch  02/26/2009 04:47 AM Report

'Well, we could pay our friends less in bonuses, that would save a hell of a lot of money and mean that the taxpayer would have to pay less to keep us going.'

smitch  02/26/2009 04:45 AM Report

Was there one thing?

smitch  02/26/2009 04:44 AM Report

A day like today is irrelevant to you. A day like today makes life more difficult for the regular workers. And it isn't a pure accident, you knew this was coming.

smitch  02/26/2009 04:41 AM Report

'Well, I think we all know where they are'. Well we don't know where they and WHO put them there.

smitch  02/26/2009 04:39 AM Report

Well, Charlie, even if oil drops the large oil companies are still going to make a lot of money from you. I could talk about foreign govts, but they simply produce oil and they're not to blame. But talking about foreigners always makes it easier for me to make a lot of money without you getting angry with me.

smitch  02/26/2009 04:34 AM Report

'I take full responsibility for what has happened'. What does that mean? I resign? I resign and I pay back all the money I've earned over the last year? I resign and I renounce my wages and all those highly-paid denizens that I have, who will later take care of me? Actually you don't need to be taken care of. You just need for mechanics and plumbers and cleaners and waiters and pizza deliverers and gardeners and ....and .... to take care of you. Which they've done.

smitch  02/26/2009 04:07 AM Report

One could have been 'they need to regulate us, because we've done a really bad job', but it wasn't.

smitch  02/26/2009 04:05 AM Report

What are the four or five things? we didn't even get one.

smitch  02/26/2009 04:02 AM Report

John Mack is the boss of a failing business. I wonder what his personal bank acount looks like. Now if you start a business and it isn't working what does your personal bank account look like?

smitch  02/26/2009 03:57 AM Report

I don't think that any of these people are losing sleep about how they're going to living tomorrow. They already made their money in a dishonest way. Now it's the simple investor that's wondering about how to live in the future. If the govt is going to rescue them it should also take some of their made money, as individuals, and redistribute it.

tartufe  02/26/2009 02:00 AM Report

Transferred from the John Mack 8 min comment (sans permission but with attribution).

__________________________________________________________

peternyc 02/25/2009 05:34 PM Report

"I am disturbed by Charlie Rose's recent series of interviews with financial services titans -- in particular, the interviews with John Mack and Hank Greenberg. Perhaps the general tone/format of the program -- cozy, hunched-over-the-roundtable, personal chats with notables -- is at fault because it leaves little room for any sort of critical, "touchy" exchanges. Given the current state of our economy and society -- and the titans' direct involvement in creating the collapse we must sort through --it seems clear that we need frank discussions of the issues, not the face-saving "spins" that Mack and Greenberg provided. I doubt they would have appeared on the show if critics of their actions had also been invited. Their goal was to appear alone, as "great men" who have valued insight AND the final word. Basically, from a public relations perspective, the program was a good "placement" for them --a helpful image builder.

"Both of these individuals discussed the economy in a safe, clinical manner, as if they were engineers examining a machine. Of course, our current difficulties far transcend any technical market considerations. Basically, the problems come down to the dark side of human nature: destructive greed and selfishness, along with a healthy dollop of laziness and incompetence. Greenberg and Mack are avatars of these negative attributes.

"The Greenberg interview was particularly egregious. Near the end of his chat, Charlie Rose mentioned Greenberg's heroic activities during WWII -- a perfect cue for Greenberg to graciously acknowledge Rose's compliment and then follow up with some healthy flag waving -- "this country is great and it will be great again," etc. etc. etc. How extremely cynical all of this was, given that Greenberg's more recent life has had more than its share of rapacious behavior that has, in the long run, severely damaged the daily lives of our country's post-WWII citizens.

"Perhaps Mr. Rose should stick to actors, writers, etc. The last thing the viewing public needs at this point is a large serving of disinformation regarding the financial crisis, comfortably folded into intimate roundtable chats.

"I won't be watching this program any more."

________________________________________________________

A scathing assessment. I hope that last sentence is not true.

tartufe  02/26/2009 01:47 AM Report

Bill Maher, on Tavis Smalley, had a great suggestion. We should Putinize the top 1% that confiscated most of the country's wealth. Namely, make them give it back. Physically. Works for me.

RobustMedia  02/25/2009 09:07 PM Report

Unfortunately, America has a long way down to deflate the irresponsible moneyed class if the banks are still leveraged 12:1 and the government is pumping out cash for free...that is not even getting to the home owner or family who is held within something closer to a <1:1 financing.

Of that 12:1, you've got 1 going to the real economy and feeding people, you've got 1 going to the CEO for "managing" risk (like chosing not to wear a seatbelt on the corporate jet), you used to have 1 -- but now nothing -- to pay for the cost of money, and so you've got 10 for the discrtion of the haves, at the expense of the have-nots who pay the taxes to bail out the CEOs who have an extra 10 in their pocket still. The hedge fund cowboys and money users in Abu Dabi and are just waiting for the next self-serving rigged game from the likes of Morgan Stanley...and the team their is waiting to make it happen to get back into business and rack up inhumanely large bonuses.

Two years ago, Forbes and every American media outlet was touting the new realm of young American billionaires as if millionaires are boring...and now, where are the wealthy, either living in Abu Dabi or silenting packing to get their riches out from under the eyes of democracy.

The financial crisis may have happened shockingly fast for many, but is not that unexpected. And irresponsibility under the guise of sophisticated civility carries on....Mr. Mack

dpiller  02/25/2009 06:11 PM Report

I would be interested in knowing what software or methodology the Feds will be using to "stress test" the banks. Let's hope they don't use the same stuff that was used internally by Wachovia, WaMu, Bear, Merrill or Lehman! (Which of course presupposes this stress test plan is something more than a mear charade which Geithner hopes will somehow coax a bit of confidence from us rubes outside the Beltway.)

tartufe  02/25/2009 05:46 PM Report

Spot on Ronnie. Best and brightest risk takers (with other peoples money - opm - leveraged beyond belief).

He (Mr Mack) damn near went reverential when referring to the 'risk takers.'

This kind of entitlement thinking is endemic - systemic. Particularly amongst the CEOs of the large credit card banks.

The all too cute ain't-we-clever-bastards with OPM and their entitlement ivy league degrees have crow-barred leverage into a financial collapse that may require a whole new system. Established elsewhere as our enculturated wise-guy reputation is too corrosive to engender confidence needed in any system.

The most effective course - long term - is to do nothing. Capitalism will efficiently (and cruelly) sort it out. The 'instruments' used are so convoluted and intertwined they may never be unraveled. Throw in the inevitable legal delays and they're a dead-letter.

Lastly, when they start talking several trillions then it's off-the-wall. It's then time to start thinking 'percolate-up' not trickle-down. Getting up to $20-$40 thousand per household. As a stimulus or taxes? The choice is NOT yours, unfortunately.

THORNYROSE  02/25/2009 04:37 PM Report

I cannot understand why Rose goes so easy on his interviews except to entertain what the masses would term 'conspiracy theories'. This was a chilling discussion with an obvious Globalist, who has no allegiance to this country, it's citizens, nor his family roots in N Carolina (though Lebanese) This man should have been sent to prison at Guatanamo for his terrorist actions against this nation.

As for 'best and the brightest', did he miss a noun, thieves? Because that is what they are, high paid crooks bailed out (redistribution of the wealth) by a corrupt congress.

I too could have played the game; must be one of the 5 who DID see it coming, but chose not to feed greed and corruption. It is totally unconscionable AND unscrupulous to do what he has done, and without regret.

pxlpark  02/25/2009 03:52 PM Report

In my view of this, I cannot see how anything will change, not one thing, until there is absolute transparency and hefty _transparent_ government oversight instilled... at least for the next 5 years, possibly 10. Not nonsensical and easily avoidable things like SOX, but absolute _you cannot do business in the US unless you comply 100%_ transparency and record keeping.

This means transparency of the salaries of _all_ employes that are touched in anyway by the SEC, and this means transparency of _all_ cash in hand profit/loss, and real hard assets for these companies.

This is the only way the people will start to perceptively trust Wall St.

We have not even begun to see the cracks of the credit crisis, and student loan defaults. 18 yr old kids, and working families with 38% interest rates on their credit cards. Large amounts of people are living on, feeding their family on, their credit cards and will never dig themselves out of this ditch.

@ Ricardo_Amaral, I don't think most Americans still are in denial, but I do know that most captains of American industry are. I think The man/woman on the street are all too aware of how far we are slipping, and how things things just do not add up. Everyone is affected, and my 64 yr old mother recently lost $50k, from her 401k that she has worked for for 40 years (and she was in low risk mode at this point...).

It is also interesting to hear that Brazil, are also following my comments below about "once bitten, twice shy" and the Eu/China moving forward with the US. It is a sad time for the US indeed.

Ronnie  02/25/2009 01:03 PM Report

"Best and Brightest"

John Mack speaks of losing the "best and brightest" if they aren't rewarded with the levels of pay and incentives that are the recent norm in the finance world. Perhaps a redefinition of "best and brightest" is in order. When we aggrandize the most ambitious, aggressive, audacious, and avaricious traits in finance employees, and declare those to be descriptive of the "best and brightest", and define their competitive success by the size of their annual income, are we not setting up ourselves for exactly the self-consuming financial disaster we see playing out currently? That is precisely the "talent" that got us to where we are today. If those are the winner-take-all rules that finance plays by, creating arcane financial instruments that defy oversight, merging corporations until they cannot operate by any sustainable business rules and whose demise threatens to take down the nation's (and world's) finance system, then the current financial collapse is the logical outcome. Such a precarious system will implode on the success of its biggest players. Perhaps we need to reassess what it means to be "best and brightest" for a financial system that is more than a short-term generator of wealth for the inside players, and attract employees who will create a stable, self-sustaining financial system of smaller networked institutions intended to actually serve the entire country. The "talents" valued in the past by the finance industry, and perhaps necessary to function successfully there in that past, cannot create a sustainable future.

mabraham  02/25/2009 05:06 AM Report

I just can't get to trust these bank CEOs. We will have to wait until we have the results of the stress-tests.

Ricardo_Amaral  02/25/2009 01:07 AM Report

I speak with a lot of people in Brazil on a regular basis and I get a feedback from a number of sources – John Mack has no idea how pissed the average people are in Brazil regarding Wall Street and the cowboys who bet the farm and gambled everything in sight with leverage of 30 to 1 and some as high as 60 to 1 – and when the house of cards collapsed in Wall Street these clowns destroyed the stock markets around the world when they were forced to sell everything in sight around the world to raise money to cover their margin calls and redemptions from their shareholders at home.

For all practical purposes Wall Street died a sudden death during 2008, and the US financial market has been changed in a profound way – basically today what was known as Wall Street does not exist anymore – what we have today is just a shadow of the old system and even this left over of the old system I am not sure how they are going to operate and survive in the future.

Most Americans still are in denial, but the economic system that they had for over 100 years is gone and I have no idea how the new economic system of the United States works today and in the future.

.

tartufe  02/24/2009 10:04 PM Report

Mr. Mack impaled himself on his own petard of greed by pining for the return of securitization, the very process that it’s over extension got us where we are. Well from Wikipedia (below) securitization needs a rising demand (a la after WWII, or even baby-boomers).

Wikipedias history of Securitization:

"Asset securitization began with the structured financing of mortgage pools in the 1970s. For decades before that, banks were essentially portfolio lenders; they held loans until they matured or were paid off. These loans were funded principally by deposits, and sometimes by debt, which was a direct obligation of the bank (rather than a claim on specific assets). But after World War II, depository institutions simply could not keep pace with the rising demand for housing credit.”

We are now in a contracted and contracting demand. Effective securitization will have to be put on hold until the next moral hazard and a real or bogus demand is again created.

There will be no shortage of financial wise-guys, a la Mr Mack et al and their ilk to capitalize (and again capsize) the system. When you’re too clever-by-fractions, your self immunity and over weaned sense of entitlement, insulates you from any sense of wrong doing.

Think of the irony if bankers had to resort to honest old fashioned pre-1970 banking, essentially portfolio lenders - holding loans until they matured or paid off. No leveraging, no OPMs (Other Peoples Money) used to excess. Just one-on-one civil, communal, community banking. Not aren’t-we-clever bastards banking.

Obama in his speech tonight talked of not rewarding short-cuts. Securitization (an oxymoron) is nothing but. Highly leveraged instruments are nothing but OPM looking for a yacht.

Chuck’s brother-in-law not withstanding, the time-tested query is still appropriate, would you buy a used car from a guy with his values. Leveraged bubbles that by definition are limited to a self-selected few are an admitted desire by admitting his desire for ‘securitization’ to return.

REMant  02/24/2009 09:55 PM Report

Like Bernanke today and good Wall Streeter's everywhere you are still making fundamentally the reflaton/confidence argument, which doesn't entirely jibe with your comments about deleveraging. The deflation as I've said many times previously was an unavoidable consequence of the inflationary debt creation involved in the housing, etc booms across the world. There is no way that it is going to be possible to simply blow that back up, nor should it be done even if it were. You've recognized this in the way you are handling refinancing, it seems. But if you want confidence, you must stop saying and doing things that undermine it. It ought to be obvious that sound money will bring confidence, and it is the only thing now that will. The fundamental problem is not just too much debt, but lending more than deposits - which banks routinely do as you mentioned - and which is inherently inflationary. And that is true even where it promises greater returns. We certainly need to service our debt, but we'd be much better off with none at all. Inflation is bad because it skews the distribution of wealth, and thus reduces productivity. It is productivity we need, not merely credit. We need to recapitalize the country, not simply the banks. The money cannot come out of thin air. That's a Ponzi scheme. So, as far as I'm concerned, any banks not viable at this time, or at any point in time, should fail and deserve to fail, and as quickly as possible. FDIC, like any insurance, is useful for small misfortunes, but it cannot be no-fault insurance, even for depositors, not only because of the moral hazard, but because it is fiscally impossible. As for the bonus question, the problem is the return is not so much to talent, but to what are inflationary, and often, illicit activities. Some ppl I'm sure were aware of what was going to happen, BTW, and didn't make a bundle on it, not because of the risk, but because they thought it immoral.

shamus  02/24/2009 07:43 PM Report

The most disturbing thing John Mack said was when you asked

that great question what had he learned about Himself in all this.

His response was "I learne I like the action.

That sounds like a Gambaholic's response to speaking from the black jack table.

What he really needs a a long break so he can get real

and face his own problems and how that added to the mess.

shamus  02/24/2009 07:38 PM Report

John mack says one thing then contridicts himself.

Like saying he is ok with salary and bonus cuts, then turns around and says the "Talent" will walk if we don't give in to what they want. He's clearly for the so called "talent" The "talent" is what got us here with all the money gone and

no one seems to know where it went.

Then he says he wants a little over sight but not too much,

That again is what got us in this mess, He's just saying he does'nt want anyone watching while they do things behind closed doors. He is just a talking Head for the Mysterious

money Families who Greenspan used to represent and told us about when he testified to congress.

They held us hostage when their Hedge funds bets started to go bad

Then sent us an ultimatum to give them 350 billion in 24-48 hhours or they would trash our system.

Charlie I love your show but it's time for you to have

some counterpoint sessions with working people asking counterpoint questions as these financial experts make

their statments. You do pretty good job.

Lets see some counterpoint in the future SOON!

Thanks

Shamus Penn