Charlie Rose

SharkswithfrikingLazers  12/15/2011 02:48 AM Report

Charlie, Robert Rubin is a very interesting choice.

Robert Rubin ran Goldman Sachs.

TIMOTHY O'BRIEN: Bob Rubin and Alan Greenspan were very much in lockstep. They had very similar views on Wall Street. It boiled down to the less regulation, the better.

NARRATOR: And Rubin populated the Clinton administration with a network of free market true believers.

NARRATOR: Among Rubin's acolytes, 35-year-old Timothy Geithner and Rubin's top deputy, the outspoken Harvard economist Larry Summers.

Brookley Born was sabotaged by Alan Greenspan, Robert Rubin and Larry Summers--the Troika that is directly responsible for the massive fraud perpetrated by the Wall Street crowd.

Read more: http://www.pbs.org/wgbh/pages/frontline/warning/etc/script.html#ixzz1gaRQhEDN

So Charlie, do we believe him now because he is like Newt and has grown from our downfall?

jar06  12/14/2011 10:27 PM Report

To Tett, why is Mercedes such a success in the US ? you should think about it !!!! I am surprised that you discuss about the solution without analyzing the reasons of the problem. Is that not bizarre the way you process? No, A M don’t want the other Europeans to be like the German, she just want the other European to be more serious for some of them, and presently it is not possible to say that they were. AM just want guarantee that the behaviour of the European partner will be correct.

winter  12/14/2011 11:45 AM Report

Is he moving his lips? May the name Brooksly Born follow Rubin, Greenspan and Summers around for the rest of their lives like a shadow whenever they try to float the lie that

they didn't see this coming. How could anyone expect that a little lady like Ms Born would have any sway when pitted against that allstar lineup? What was the point of testifying before a congressonal committee if they already knew what they wanted out the other end? We have to learn our lessons after the fact. Will we learn from history? Probably not.

EyesOnYou  12/14/2011 12:32 AM Report

One more thing. Germans would be fools to bail out anyone before each and every financial executive returns each cent above 300k they made in fictional compensation and agree to compensation caps and air tight regulations. Till then go fly a hike. And US rescuing Europe via IMF, dream on. This mess is greater than 14 Trillion dollars and there will be armed uprisings in US and Eurpoe if taxpayers were made to pay for it.

EyesOnYou  12/13/2011 11:54 PM Report

What do firms do when they are insolvent? They declare bankruptcy and start over. Countries should do the same, issue new currency (print as much as needed instead of BARROWING, keep the bond market out of it.

Governments will guarantee renegotiated pensions and let today's financial institutions be history. I couldn't care less if PIMCO et al go bust. A handful of 1%ers will be history which is a good thing.

And rubin says markets didn't see this coming. Seriously? Mr. Rubin you were a prominent member of the gang who made sure legislation giving the leeway to create this disaster were passed. Who are you trying to kid?

ShalomFreedman  12/13/2011 04:18 AM Report

What is promised in this interview is continuing uncertainty as to the question of whether or not there will be a gigantic negative bust of the world - economy. Robert Rubin suggests that there must be an intermediate period of 'muddling through' before the major problems are significantly addressed. Gillian Tett suggests that in the end Angela Merkel will have to relax her demands regarding the transformation of less responsible European economies. It is also interesting that Rubin believes that the U.S. cannot save the situation, and that our own troubled situation makes the kind of rescue action from outside impossible.

It is also interesting both Tett and Rubin believe that China India and the rest will not be able to isolate themselves from the European crisis, and continue happily on their own paths of growth. I would have thought they might have raised the possibility of China's somehow coming to the rescue as it has such tremendous reserves. But perhaps that is simply the irrelevant thought of the non- professional who does not understand how it all really works.

What is interesting is that what we seem to see is that more and more are promising ' a low dishonest decade' to come.

PS I would have liked to have heard their thoughts about the European crisis connection with the whole political problem regarding the Islamic world, especially Iran. Does the price of energy have any significant meaning in this discussion on Europe?

PPS Apparently neither Rubin or Tett foresee a jump-starting of the U.S. economy leading to significant U.S. growth, increased demand for European products. Perhaps this too is outside the world of possibility in the present situation.

zparis  12/12/2011 08:36 PM Report

May I remind everyone about Germany's ratio of debt to GDP? It is 83% which is almost the same than Britain and France.

So maybe things should be put a little bit in perspective.

Also, lecturing after the fact is always easy and very helpful indeed. It shouldn't be called economics but history!

tabs  12/12/2011 06:15 PM Report

One is going to reiterate the comments made about Mr Rubins last appearance on the Charlie Rose broadcast. Where Mr Rubin stated that he never saw the RE down turn or the collapse of that market coming. This either makes Mr Rubin disingenuous or at the least mentally challenged since every Roofer and Dry Wall man in California was wondering just how long the RE Bubble could continue. Thus every word that Mr Rubin utters has to assayed for veracity.

While Mr Rubin is able to accurately abstract the European Debt crisis it is no more astute than what one gets if one listens to the commentators on CNBC. To that end the following was e-mailed to CNBC on 12/5/11 as one of ones more prosaic analysis's of the Financial Markets reactions to the financial crisis.

.The Whisperings

Mon, 12/05/2011 - 10:26 — tabs

Adam Smith talked about an "Unseen Hand" Maynard Keynes about "Animal Spirits. " How does one quantify an essentially organic process known as the Financial Markets? One can see the Financial Markets as a collective aggregate that is based upon emotion rather than rationality. Here one would state that there is only a presumption or illusion of control over events as the pendulum usually swings in short arcs. In times of crisis or stress the swing become ever greater as fear becomes the over riding sentiment.

What we have seen since the day that SP downgraded US Debt from AAA is a loss of confidence in the American and European political process. Put that date down as a watershed date in the history of Financial Markets as they have essentially lost patience with the political;process and are now reacting with a fear that has risen to heights not seen since the 2008 financial crisis. The Markets telegraph that message with a decline every time a politician comes on the Tellie and says something that the Markets do not like. The Financial Markets showing this dislike/fear have pushed the Banking, Bond and Equity metrics towards a cataclysm which has eventually caught the European politicians attention. Thus the reaction we have seen is that the markets are dictating to the political process that hard choices are going to have to be made. To this end we have seen several interim governments established in Europe which are NOT elected but appointed (Greece, Italy) and a Conservative victory in the Spanish election. .

With regards to Germany one has mentioned a return of the Sturmabteilung which is a reference to the German Brown Shirts of the 1930's. This reference is an abstraction of the fact that Germany as the largest and strongest European economy is dictating that an iron willed fiscal policy of austerity be instituted in the indebted Euro zone nations; before they acquiesce to bailing them out. To this end the Germans are advocating that Fiscal Union be implemented which is a loss of sovereign determinism in favor of Euro eg German hegemony. In other words what the Germans could not accomplish in WW2 they are succeeding with the use of monetary and fiscal policy, which also can be called the Sturmabteilung. .

With regards to the United States the election of a Republican House of Representatives has mollified the Financial Markets until the 2012 election. The Financial Markets have only expected limited success in bringing the Budget deficit and Sovereign debt under control. The Financial Markets in other words are sanguine with the current state of dysfunction in the US government. However by the beginning of the summer of 2012 the markets are going to be looking forward to the likely outcome of the election and will begin to telegraph that sentiment in the financial metrics. If it looks like a favorable Republican outcome the markets will react positively. If it looks like a split decision with the Republicans in control of the Congress and a return of Barrack Obama as President the following question, of can we afford 4 more years of dysfunctional government and gridlock will come to the forefront and will be answered in those metrics. The answer that Financial Markets will telegraph is that the US can not afford to put off a reconciliation of its deficit and debt problems another 4 years. At that time a nearly 20T USD debt along with the other unfunded liabilities will have sunk the US like the Titanic under a mountain of debt. As stated before Financial Markets do not wait until the last Shekel or Dollar has been spent before reacting thus one can expect a relatively quick response to the outcome of the 2012 election.

If the Republicans do gain control of the government and institute a course of action that the Financial Markets deem as acceptable the US economy will muddle along with slow to middling growth until those policies start to bear fruit. If the Republicans fail to act in an acceptable manner of deficit and debt reduction there will be a negative reaction by the Financial markets and a severe crisis will result as the Financial Markets will have given up any hope of a reconciliation by the political process.

As of late there have been several Liberal commentators stating that the 2012 election might not be the point of resolution of the direction that the US is going to be moving in with regards to either being a Social Democracy or returning to its more historical roots of self reliance. This argument is specious in the following, time is no longer on the side of the political process to resolve the problem. The problem has been kicked down the road for decades and has grown so large that it will overwhelm the financial and political processes if it remains unresolved for much longer.

Since the writing of this e-mail events have moved on down the road. Mr Yardeni this morning on CNBC made an astute comment in noting that President Sarkozy of France said in effect that with the ECB making 3 year low interest loans to the European banks, those banks can then buy up the Sovereign Debt Bonds of the countries in the Euro zone that are at risk. Thus this would be a palatable de facto muddling through on the part of the Euro zone. The question posed by Mr Kalifsharia of PIMCO about this course of action was its scalability. Again the Financial Markets reacted today with fear and attendant downturn that the European Debt crisis is still on the loose and is not going to be resolved anytime soon.

.

shamshhi  12/12/2011 03:49 PM Report

Another great conversation from Charlie Rose. Gillian Tett and Robert Rubin.... Does not get much better than this! Keep up the good work Charlie

BENEZRAA  12/12/2011 01:51 PM Report

SOMETIMES LESS IS MORE

Perhaps, if Corporation China were to downsize itself out of both Tibet and Siankiang, and also to shrink it's military hardware by recycling the majority of metal and other substances, then China may complete some of it's halted construction of housing and refocus it's attention on the production of goods rather than on the occupation of it's neighbors and the military re-supply of terrorists. The overall economic effects to China and to the world at large can only be positive. If there is a worldwide game of "chicken" going on, where the name of the game is currency deflation, then it's time this game came to halt, before the current military conflagrations become so irreversible, as to bring on WW3. As for France, Germany, and the Eurozone -- historical precedence may require that Britain proceed as it has under Cameron; meanwhile, though Merkel and Sarkozy may have little choice but to do as they have done, any new treaty legislation should bear in mind that Europe's current prosperity is in no small measure a result of the Marshall Plan and of the security umbrella of NATO; which is to say, the security blanket of the USA and Britain; which is also to say that France and Germany had best be careful what they pray for, as they may get it. The longer term consequences of the prima dona behavior of Germany and France may be far more deleterious to these nations and to Europe altogether, much like the lingering hangover that begins the morning after the cast party of a show that receives great applause from the local audience, but, goes bankrupt, once it takes to the road.

REMant  12/12/2011 11:49 AM Report

There is no question that the Europeans are finding it more and more difficult to get dollars, which Bernanke tried last week to rectify. An equitable move considering that we have largely been responsible for draining them off, as well as, the lack of monetary and fiscal restraint that caused this mess in the first place. But Mr Rubin is undoubtedly right to worry about the prospect of Euro inflation.

The Europeans have taken up their traditional positions. The French have always looked to something tangible like gold, and the Germans to their work ethic. But all are in a tenuous position vis-a-vis their electorates, who do not want to see their perquisites curtailed. France, as usual also, finds itself caught between the British and Germans.

The point was immediately made by nearly everyone that a country which had no interest in the Euro, had no business exercising a veto over it. Ms Merkel said she had accomplished her purpose and she didn't care what Britain thought, and it is hard to deny her point. Cameron has passed austerity measures, but he wants, like Geithner and Bernanke, to sustain London's position as a market maker and all that, and it has been critical to Britain's economic position especially in the past decade or so. But Britain is not too big to fail either. I notice the Clegg this weekend broke with his partner over this decision, and rightly so.

Apropos of the turn of this conversation, I have somewhat enjoyed Ezra Klein's discomfiture this past last week. First he tried to argue that everything was an "act of nature" thus Greece and Ireland not at fault and David Brooks and the Germans had no call to berate and stigmatize them. He argued once again that Europe needed "growth," not austerity. But Europe doesn't need to "grow," nor Germany to expand consumption. China and the rest of the third world including that part of it in Europe need to catch up, which is not really going to be aided by anyone printing a pile of worthless money. And until they do catch up we are not going to see any real end to this "crisis."

Then, too, much of what is going on is the unavoidable deleveraging of positions sustained by the central banks on the back of malinvestments - the world's deficit with nature, if you will - which those investors now want to hang onto, particularly in Britain. About this the ppl in the streets are more than 99% correct. The financiers moved to save themselves, the Fed doling out far more money to them than the Congress by an order of magnitude, and I don't think they have given a fig about anyone else. I don't think, incidentally, we ever got out of the hole in 2008. We simply managed to push it off on others, which the Europeans are in little position to do now, Eurobonds or no. Unfortunately, the Chinese and Europeans were no less encouraged to do this by our example, just as Japan was during Mr Rubin's tenure. While I believe everyone should have a strong currency, Japan's circumstance was, like China's today, largely a matter of hot money driven by unwarranted and unsustainable American borrowing.

A prominent Eurozone banker recently compared the situation there to the 1970's oil shocks, but I think it's a lot worse than that. Nevertheless I am somewhat more optimistic provided we stop making it worse, and concentrate on re-balancing what is obviously very imbalanced. This will probably mean bailing out a lot of ppl, but it has to be with other ppl's money, not the central banks'. Given Ms Lagarde's elevated position in the world of Western finance at the moment I was surprised to find the US snubbing her, and I hate to say it, but I think isolationism in this matter generally poor policy at this juncture, tho I, of course, want to see any money going to the right places. Even if we hadn't played the lead in this drama, we would be ill-advised to start acting like Calvin Coolidge.

It will no doubt continue to be argued by the bankers and heirs to the Banking School that cheaper money is the best way to do this, but even in better times the result was always to widen the gap between ownership and labor, and at this time there seems no room for maneuver and not just in Europe, since we have so little savings anywhere to draw from, and any move in that direction is likely to stimulate, if not inflation, then contraction, not "growth," which is a lot like what happened at this point in 1930s.