Charlie Rose

ShalomFreedman  11/17/2011 10:41 PM Report

This was a strong and interesting presentation. The implication is that dishonesty was present throughout the system. The regulators who did not regulate, the bankers who deceived their own clients ,the mortgage industry that persuaded people to buy houses they could not afford, the citizens themselves who took mortgages they knew they could not pay back. The underlying sin of a whole society spending and living well beyond its means and continually encouraged to do so by those profiting from this, does not paint a pretty picture of the system.

I understand that this was not the focus of the discussion but I would have appreciated hearing more about what is and is not being done now as corrective.

robdverity  11/20/2010 06:03 PM Report

Blaming the victims is a feel good tactic that fits a few while pardoning the main perps. Soliciting NINJNA signatories had to be done by the (educated) wise-guys preying on the totally ingenuous (relatively) despite knowing they didn't qualify.

Knowing they could send the liability down (or up?) stream meant they got theirs at the signing. Responsibility and culpability has to reside with those that are equipped (educated) to know sleaze when they see it. They should have to "eat" the foreclosures financed in part by the big boys bonuses as they were all in it together. Then send the originators of the colossal scam to a long visitation with Bernie. The world would applaud.

DavLev  11/20/2010 01:24 PM Report

Id like to know how many people profitted from the outrageous home values, for years and low interest rates?

You cannot have it both ways America. You want your mule and acres of land..or 3 cars..then you need low interest rates. You want a piggy bank made out of your home..go into the mortgage, knowing it may impossible to pay, but expecting property values to go up substantially.

They did for years. I know personally many co-workers who

bought homes for lets say 125,000 and sold them years later for 800,000, mostly tax deferred. They took their loot and relocated to Nevada.

California was no exception, and the worst of the greedy.

When values were going up, no one complained to the banks. When the opposite, it was those miserable bankers and mortgage brokers.

And besides, the income tax structure is meant (not tax evasion but tax avoidance), for people who do have a substantial capital gain.

The real culprit are we Americans..who want to live the good life, with easy money. There are no free lunches folks.

Wall Street of course has a lot of blame in all of this..

packaging those mortgages and selling them. Everyone benefitted until the bubble burst.

I live in an apartment..all my life. I could have bought a home..for 600,000, but knew I could not afford it. I never bought therefore, and am surviving.

New York City has 1m apartments..with one-third ownership of homes. Most cities have the reverse. There are problems

associated with rentals..projects, etc. Dont let anyone fool you.

The IRC is outrageous..giving exemptions to people whose gain is 250,000 or over 500,000. Why should they benefit?

Their property value went up..great. Tax it at 100%, no exemption.

The commission report is correct in many ways: take away

the mortgage deduction...and at some point in time, increase social security. For those who desire it, allow people to invest in US govt paper (like the TSP offered

federal employees). They pay about 5%. But they also are tax deferred, meaning at some time they will be taxed

at ordinary rates.

If Wall Streeters earn high salaris..great for them.

It is none of our business, unless the govt bails the companies out.

The two macs were partly responsibole for all of this, with their lending practices. Yes, make them either totally private or totally govt owned.

Regarding GM, we Americans purchased foreign cars to a fault. Some say, they are better manufactured, last longer and all that. Well, we paid a price for it..anyone owning stock (including employees) was wiped out. The IPO is still young and problematic.

Criminal indictments against Wall Street officials?

You commit the cimre, you do the time. So far, no crimes

have been committed. Enron was NOT a Wall Street firm.

Goldman was fined...but committed no crime.

There are millions who dont pay income taxes or file fraud tax returns. 5m Americans dont file returns.

Why are they walking around rather than in a federal prison? The tax gap is 12% of the budget, Do the math.

Perhaps we should be looking at doctors who require unnecessary tests to pad their wallets...like excessive

blood tests or heart monitoring.

Social security a probloem. Come on. Just stop taking

the trust fund money for other purposes.

Defense...force Japan and Germany to defend themselves w/o

US troops. Get our boys off of Okinawa and out of Korea.

I mean, get real, with 20,000 nukes, who is crazy enough to attack US?

poolblue3  11/20/2010 10:34 AM Report

Joe Nocera and beth mclean have been in on the the scam all along spinning their friends, clients in the hedge fund market for a profit. As Nocera says "We believed our own scam" this implies Nocera knows it was a scam. Follow the money Goldman Sachs paid 550M fine because they and JP Paulson manipulated the CDS market. Beth and Joe front ran stories in WSJ while their hedge funds David Rocker massively naked shorted co via SEC REG SHO loop hole, while Millberg Weiss (parterns in jail) filed bogus suits while analyst masked in independence Camelback (they all chg names ) aka Gradient issue bogus hit pieces on the same target. READ www.deepcapture.com and ask why did Dave Rocker pay Dr. Patrick Byrnes 5M settlement. These two want to make it seem like WS was incompetent but in reality Paulson (+other large hedge funds Soros) GS and the cabal manipulated the CDS which were used as proxy for Mark to Market GAAP accounting, change Jan 2007. WHy did SEC terminate the uptick rule that had been around since great depression to prevent abusive short selling July 07, Why did Ed Liddy leave GS board to take AIG CEO job for $1/year and stay just long enough for GS to be paid off billions in counterparty claims. Follow the Co review PUTS and CDS these crooks bought (GS bought billions in CDS from AIG why because they knew the game was on). These two are spin artest for massive hedge funds. Look at REG SHO threshold list and ask how can SEC breach the SEC ACT of 1934 sec 17A and don't let them say liquidity. ASk Donaldson x SEC head who understood this but couldn't deal with it.

Ricardo_Amaral  11/20/2010 09:49 AM Report

Ricardo: November 20, 2010 - Today, when I saw the main headline on the frontpage of the Financial Times (UK)- “Nato in defense offer to Russia” - The first thing that came to mind is this reflect more the “impotence” of the United States than anything else.

I thought those guys are not serious with this proposal – but it will give an opportunity for the Russians to laugh about this desperate offer from the United States and just another example of US impotence in dealing with minor countries around the world – instead of projecting an image of a superpower like when Ronald Reagan sent the US Army to defeat the treat from Grenada in the 1980's.

The Nato defense offer is incomplete anyway, since does not say anything about preventing a possible missile attack from Iraq (Saddam's weapons of mass destruction) and also from the Somali pirates against the Nato countries.

From the Russian perspective they also should add to this new defense agreement that Nato should help protect Russia from any missile attack from Georgia.

The United States is not becoming a joke in relation to its financial and economic policies only – the United States is becoming a joke when it comes to other foreign affairs as this latest Nato fiasco showcases and magnifies to the world to see it the the fast declining power and influence of a former superpower.

It's sad to see a former superpower to die a slow death in front a world audience on the world stage – first, it's economic and monetary soundness in the coming years is becoming a major question mark, and now the illusion of that image of the United States being the last military superpower is melting in front of our eyes.

*****

Note: When the Russians are laughing about the US-led Nato proposal and the merits of such a joke they must realize how “Neurotic” the United States has become:

1) First go to war against Saddam Hussein because of some phantom WMD.

2) Second the United States is the process of building seven military bases in Colombia and on May 10, 2008 ... After 58 years, the United States Navy has reactivate the Fourth Fleet, which will be in charge of patrolling Latin American waters – I guess to prevent an attack against the United States from Fidel Castro and Hugo Chavez.

The seven military bases in Colombia plus the reactivation of the Fourth Fleet reflect the perceived imminent danger that Cuba and Venezuela provide to the United States – talking about being neurotic and seeing a treat coming even from its own shade...

Regarding the current state of the United States financial markets and the “currency wars”, and a very ineffective foreign policy and US military - a book published in 2003 comes to mind: "After the Empire - The Breakdown of the American Order" by Emmanuel Todd (Columbia University Press - February 2004), this book was a best seller in Europe in 2003. Among a number of interesting facts that Mr. Todd mentions on his book:

...The power and influence of the United States is being overestimated, claims French historian and demographer Emmanuel Todd. "There will be no American Empire." "The world is too large and dynamic to be controlled by one power." According to Todd, whose 1976 book predicted the fall of the Soviet Union, there is no question: the decline of America the Superpower has already begun.

After reading that book you will have a better understanding why the US is trying very hard to project itself as a super military power, but most Europeans understand that this desperate show of power is just a final stage and an illusion of a fast declining former superpower.

The United States is becoming a basket case very quickly – at the speedy of light, and in another 20 or 30 years we are going to look to the world of around 2008 to 2012 in the same way we look today to the years when the Soviet Empire was crumbling in the late 1980's and early 1990's.

But the fast growing irrelevance of the United States as a superpower with its massive over-supply of US dollar currency flying around the world (the major foreign reserve currency) is also reaching the end of the line resulting in the final US dollar meltdown and in the biggest international monetary crisis the world has ever seen.

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Ricardo_Amaral  11/20/2010 09:47 AM Report

"Nato to make defence offer to Russia"

By James Blitz and Peter Spiegel in Lisbon

Published: November 19, 2010

Financial Times (UK)

The US and its Nato allies will invite Russia to help create a missile defence shield in a move designed to solidify the transformation in relations between Moscow and the west.

Dmitry Medvedev, the Russian president, will be asked to participate in the missile shield project at the Nato summit in Lisbon. The project aims to protect the countries involved – representing more than 1bn people – from missile attack by other states.

The invitation to Russia is certain to be made today after Nato leaders reached agreement among themselves last night that the alliance would press ahead with its own plans to build the missile defence system. Turkey, one of Nato’s 28 nations, has long insisted that the alliance must drop plans to declare that the shield is needed to prevent a possible missile attack from its neighbour Iran.

...Such a deal would represent an important change in relations between the Kremlin and the US-Led alliance, which were seriously damaged by Moscow’s invasion of Georgia in August 2008. “The invitation to Russia to join in missile defence is a game-changer because so rarely in history do we see Russia seeking to participate in a formal transatlantic security arrangement,” a senior Nato official said.

...Nato diplomats concede it will be difficult to get Russia to agree to many aspects of how the new missile defence system will work. The Kremlin, for example, is less alarmed than the US by the threat from Iran’s nuclear programme. This is likely to make agreement on any new missile shield configuration ­difficult.

You can read the entire article at:

http://www.ft.com/cms/s/0/22bdea44-f411-11df-886b-00144feab49a.html#axzz15pBZ3GnP

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JohnGelles  11/19/2010 03:16 PM Report

When Admiral Mullen, Chief of the Combined Chiefs of Staff, and Secretary of Defense Robert Gates, talk of the deficit, national debt, interest burdens, and cuts in the defense budget to protect our economy and its power to support our national security needs, they and their Commander in Chief Barack Obama are either right or woefully wrong. Believe me they are incompetent in the extreme and as wrong as wrong can be.

John Keynes explained how money must drive capitalist operations that advance civilian and military power to educate and employ our people to produce all we need, man our defenses, and die in war as our last resort when all else fails to protect the peace.

Now we found ourselves with large personal and national debt as a result of imbalances the market did not correct. What is our only choice? We must create all the money we need to do all the undone tasks.

With such money created ahead of commercial supplies of the things workers and businesses will need ASAP, we must encourage savings to be spent when supplies are there to be purchased at prices that fit the systems designed to keep America as strong today as it was when it was the arsenal of democracy under Keynesian macro-economic ideas that can defeat deflation and inflation before they take hold.

The devils in the history of the post WW II period, in which labor fell victim to Taft Hartley, and capital fell victim to political corruption on a massive scale, were not able to defeat us in the wars of the second half of the 20th Century when red fascism ran amok. The other side has worse luck than we did.

But in this new century, red fascists have softened into authoritarian capitalists. America has been unable to stem the advance of corruption and ignorance now arrayed against and infecting nearly all of the GREAT MIDDLE CLASS.

DEBT has no armed divisions in the field, no drones, robots, bombs or pea-shooters. DEBT is the servant of government not its master. Write it off or spread it out over time, or do both.

If Bernanke could buy directly from the treasury hundreds of billions in bonds, it can buy all we need them to buy to help treasury pay for Obama's seeding of major programs for national security and individual economic security. The minute we do that recovery is here and recession is finished.

Sure, we have to prevent inflation that will follow if we do nothing but wait for the market to take us by the scruff of the neck.

But if we reward savings with inflation protection long enough for our (by then) fully funded system to match supply with demand, and we support BOTH full automation and full employment of well trained people, and we support effective training of untrained people, then democracy will prevail and oligarchy will be dead.

JohnGelles  11/19/2010 09:36 AM Report

Devils are here in our mind who did the mischief of allowing the "market" price of homes for tens of millions of occupants to increase to levels where debt taken on by such occupants could fuel economic activity for years -- until the debt was beyond repayment set by wages and occupant income.

These devils made Mike Mullen, highest military adviser to the President, declare that DEBT was the greatest threat to American national security on the horizon-- because our industrial might could be reduced by that debt faster and more effectively than it could be reduced by enemies and their weapons.

And incompetent leader as Commander-in-Chief, with the power of Abraham Lincoln's example and the American record of financing WW II in the tracks of Lincoln's example, has the gall to appeal to his people to understand he does not want to protect banks and industries in emergencies, he just wants see pay as you go rules run our Congress.

I said last night, -- "It is obvious that the Commander in Chief with his finger on the button to HELL, has no telephone or remote in his hand to adjust the flow of cash, as though it were a fire hose, so that America has the means to meet what Mike Mullen has called the great threat to NATIONAL SECURITY that loss of industrial capacity and output represents? WHAT ABOUT THAT!!!!!"

Duty requires me to leave the keyboard for now. Think on the above. Devils there are and they are doing their work as I type. They are not just stealing money for deposit by crooked bankers and politicians in their personal accounts. They are blinding our leaders to experience. They have taken the knowledge we have, "THAT GOVERNMENT CAN AFFORD WHATEVER ITS NATION CAN PRODUCE -- by way of the necessities of life and of national security," and sown fear in the land that our path must be half-austerity when only full employment can make us strong.

Back ASAP.

JohnGelles  11/19/2010 02:27 AM Report

1. This SHOW in which the host and his Bethany-girl and Joe-boy all try to explain the root causes of today's inadequate demand, missing jobs, insecure middle class, and collapse of American power to sell its form of crooked capitalism to a world that sees its naked failures, is a giant beginning of what ought to be earth shaking reform.

2. Charlie is to be congratulated on the ease with which an American like myself, who missed the original show for trivial reasons of my own misfortune, was able to see the show on my HP flat screen PC and hear all its words and giggles, as though I were in my TV room attending to my Charlie Rose watching in order to keep up with my universe.

3. So let me say thanks to CR and the SHOW. I have called you all names and cursed you out. Now I repent and thank you out loud.

4. So--what about WHAT TO DO NOW? What about an incompetent PRESIDENT who wanted to be our leader--able to correct gigantic errors--and whom I put into office BECAUSE he was president of the Harvard Law Review? What about defeating crooked and twisted DEBT? What about JOBS and INCOME in the greatest nation in history when it has suffered no physical damage (if we exclude Katrina, BP negligence, two wars, homeland security, and other physical circumstance, for the moment)?

5. It is obvious that the Commander in Chief with his finger on the button to HELL, has no telephone or remote in his hand to adjust the flow of cash, as though it were a fire hose, so that America has the means to meet what Mike Mullen has called the great threat to NATIONAL SECURITY that loss of industrial capacity and output represents? WHAT ABOUT THAT!!!!!

7. [TO BE CONTINUED TOMORROW. IT'S TIME FOR CHARLIE ROSE ON TV IN BED WHERE I'LL FILL UP WITH SOMETHING NEW (OR FALL ASLEEP IF ITS NOT EARTHSHAKING. IT'S BEEN A TOUGH DAY. DEMENTIA, DOCTOR, SPAGHETTI, AND WORRYING ABOUT "ALL THE DEVILS AND A HIDDEN HISTORY" THAT MUST BE CONSULTED AND USED FOR OUR CORE BELIEF IN SCIENCE AND BUSINESS MORALITY BEFORE OUR LAST HURRAH.]

JohnGelles  11/18/2010 09:30 PM Report

This discussion offers a place to post your best thoughts on an agenda for recovery. I hope to make sense doing same tomorrow. Today, the problem of recovery remains as difficult as ever-- and as obvious as ever too. The initial problem was debt. The initial solution is money.

don0  11/18/2010 08:16 PM Report

Hey, Charlie! Look, dude! You need to watch Chris Matthews a coupla' shows for some lessons on how NOT to do it.

I really do appreciate your passion and your prep work, but you need to get that mug filled with a few sips of STFU!

Honestly, sometimes, it begins to sound like the same question over and over and over; to wit: "Isn't Charlie Rose the most intelligent, erudite, well-read, articulate polymath at.this.table.TONIGHT?"

P.S. The fact that you are buddy-buddy with Stan Jackass (O'Neal)? Does that mean the next time you have him on the show you're NOT going to ask him how in the hell he can sleep at night having ripped off the American taxpayers for a 160 MILLION dollar severance for flushing Merrill Lynch down the crapper? Really. Just for once, I want to hear one of these son-of-a-bitches detail just what special talents and skills they bring to the executive suite that distinguishes them from an obese Roman emperor diddling young boys after dinner!

robdverity  11/18/2010 05:50 PM Report

Most any injustice in the world can be traced back to the egregious greed of US bankers and banking; from preemptive wars-for-profit, to subprime loans and the associated devious financial instruments (CDOs, CDSs, purloined ratings from Std & Poors, Moodys et al, yadda, yadda), and drug cartel money laundering (Mexico, Japan et al).

Our country is capsizing largely because of our financial institutions. Our venal system's for sale to the highest bidder. Like the Romans, the Mayans the Khmer we will not prevail as well. But the financial too-clever-by-half wise-guys will go down in their gold-trimmed yachts nonetheless.

Until our culture decides that their values of idolizing wealth regardless of how acquired is vacuous - and even suicidal - we are in the toilet. Until big bank CEOs and particularly the rating agency heads are ensconced with Bernie Madoff, we're doomed for a moral hazard - again and again.

Steve_M  11/18/2010 05:01 PM Report

Charlie, with McLean and Nocera, you overwhelmed the conversation. These were two very knowledgeable people, yet you cut them off several times while they were trying to answer your questions. They were left with the choice of correcting your most recent inaccuracy or returning to the answer you interrupted. You are the best in the biz, but you were off your game in that interview.

Ricardo_Amaral  11/18/2010 02:26 PM Report

Mutex, talking about debt:

http://www.usdebtclock.org/

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anne4444  11/18/2010 02:08 PM Report

I am very sorry to say that this crisis is not an accident mistake. It is a man-made bubble. Sadly American have been brainwashed and influenced by its idea.

You have to go jail or pay your life if you kill someone, but how can people get away by putting million people to be foodless, homeless, jobless and sleepless?

Where is the justice in this country?

anne4444  11/18/2010 02:06 PM Report

I don't believe that this crisis is an accidental mistake. It is a man-made bubble. Sadly American People have been brainwashed and influenced by its idea.

You have to go jail or pay your life if you kill someone, but... how can people get away by putting millions people to be foodless, homeless, jobless and sleepless? More people have been "killed" for the reason of their financial difficulties during these two years.

Where is the justice in this country?

REMant  11/18/2010 02:01 PM Report

This was not an isolated event, and it definitely could have been foreseen. Whatever started the public buying real estate and stocks for "growth" is what is at fault. That had to have been US monetary and fiscal policy that created so much inflation starting in the 1960's, but allied with that was the flood of money from the growth of productivity in the Far East in the past 40-50 years. But this had happened in the 1920's and in market crashes before that. The banks and brokerages in the 20's could also have been said to have fallen for their own scam. It is the notion that wealth consists in ownership, when in fact money has always been debt. The larger picture has to include the increasing disparity in money-measured wealth, and the accompanying disenfranchisement of the working classes. There has also been the development, not only of the idea that it is possible to insure against any problem, but it is beneficial to run society that way, as in our bankruptcy laws. Ppl simply gave themselves too much credit. The details are really of no consequence.

I find it hard to sympathize in any way with the oligarchs. What I think of the Putin regime will depend on whether a similar group takes their place.

winter  11/18/2010 01:15 PM Report

After watching and listening to Bethany McLean's obvious command of her subject, NOW can we all see how much further

Sarah Palin would have to change to be qualified to run for President of the United States?

mutex  11/18/2010 12:43 PM Report

This was an excellent interview. Bethany McClean, in particular, shows she ALMOST gets it. She went right up to the river's edge but for whatever reason refused to cross the bridge. She acknowledges that the current economic crisis wasn't CAUSED by sub-prime mortgages, or even martgage-backed securities, but rather by an economy that could no longer be supported by consumer debt. The error in her reasoning, at least as she articulated it, is that the rampant disregard for sound economic principles related to leverage, due diligence and outright fraud was somehow an ACCIDENT related to greed, incompetence, corruption and self-delusion. While I applaud these two authors for this analysis I believe it goes a step further. It starts with a fundamental premise, on every level, that 'prosperity' must be maintained, at all cost. Bureaucrats, politicians, regulators and business leaders hold this concept sacred. It was blatantly obvious, to anyone who cared to look, that the party (or more correctly, the illusion of prosperity built on debt) of the last 30+ years was coming to an end. To avoid this, and the consequences it entailed, by definition, something had to be done. And thus a transparent lie was created that housing prices MUST always rise. This, of course, wasn't a credible lie but it was a necessary one and a lie doesn't need to be very good if it tells everyone something they WANT to hear.

I submit that the current crisis wasn't an accident but a coordinated act of desperation after decades of delusion. Once the music stops, and given the fundamental nature of mans' ego, an economic system based on greed must inevitably come to this end. Capitalism, at least as practiced in recent history, is ultimately a Ponzi scheme that collapses when it runs short of cheap labor, cheap raw materials and, as its last hurrah, cheap credit.

That being said, I look forward to reading their book and learning what it might add to our understanding of human nature as it applies to economics.