Charlie Rose

Bill Spencer  11/06/2008 12:21 AM Report

"... shareholders who say that Bair has sold off their banks too cheaply and whilst that may be valid, the fact remains, they are solvent have not gone under". You haven't done your research. Or you are reading the wrong newspapers. Wamu was PERFECTLY SOLVENT when it was seized. Anyone close to the situation knows that.

JonDan  11/03/2008 10:36 PM Report

'Borrowing may swell to $1 trillion,' beggars disbelief. Do we fan the flames when a house is burning down, apply weight to a sinking ship to quicken, hasten the demise before passengers and lives are saved? Why has USA followed this path of National Debt? The U.S. Treasury does not have a limitless supply of $'s importantly, at what stage does it say 'enough is enough?'

The solution is simple, replace Poulson and Bernanke and have one overseeing US department headed by Ms. Sheila C. Bair, to take charge and apply 'tough love,' to Head a newly created global entity, The Earth Treasury. The First and, most important duty to oversee and regulate US Finance, Insurance, Stock Markets. To ensure that misinformation, deception and 'unfettered' regulation which has existed via markets and financial institutions for close to two decades, do not harm and ruin us all over again. The solution is simple, the application of 'tough love' for a stable future and economy. The U.S. debt may and will be so large that the U.S. country will be held to ransom from its Lender/s, be forced against the wishes of government, the people, down a path against its will, a path of moral, ethical objections, a path to anarchy, destruction, violence, poverty and human misery. Invariably, when breakages occur, errors made it is logical to first implement 'damage limitation,' if markets need to be closed to allow stability, restructuring, latterly recovery then, needs must. Secondly, assessments needs to be carried out by Bair and her people. Thirdly complexity and diversity removed from markets, to a manageable, understandable and controllable level. Many traders and heads of banks and financial institutions did not know or understand some of the areas and trades their Traders were involved in. Fourth and by no means least, companies large or small and individuals should be able (following assessors) to borrow directly from the U.S. for viable short-to-long term Loans, individuals and couples being permitted to borrow re Housing, over longer periods and pass on their Housing Loan debt to their offsprings, to keep their family homes.

Yes, I can understand those shareholders who say that Bair has sold off their banks too cheaply and whilst that may be valid, the fact remains, they are solvent have not gone under. The important thing is that the Taxpayer has got some money back, whilst keeping lower bank staff (who did not know the mess their CEO were investing in) in employment.

For too long it has been a situation of Profit, Greed, our own Selfishness. A wider picture exists, a potential for wide-scale famine, of disease, of widespread human losses, Human catastrophe, of no benefit for the West, the rest of our planet, where will be our markets then? Where will we our people go to sell goods to, to apply services to and to increase our profitability? We need to look at the bigger picture, a better way forward. Global perspective is an imperative to encourage countries to take similar actions, to avoid their financial demise. For it benefits us not if our brothers and sisters around the world perish. This is the opportunity for world leaders, heads of nations and countries to work together, for the common good, to benefit the Human race, benefit populations and our planet and its resources.

We humans have a capacity to think 'outside of the Box,' outside the malaise we find ourselves in and to a better Future but we need to act quickly, make the changes quickly for, time is not on our side.

Wamook  10/31/2008 06:46 PM Report

This is a very hard person for me to love. To a banker at this level, individuals are as ant's in the grass where they play golf. And there's been a lot of sadness from a lot of people about her recent actions in this financial crisis. No one else really believes that there was nothing else that she could have done. Buffets pronouncement that she will never have a golden parachute may be quite correct. And in fact she may be the one they finally feed to the mob when it comes down to blaming someone for the stock market crash. She just doesn't have that look of someone who has truly perfected their confidence. And the recent events don't appear to be firmly under anyone's control. I'm most concerned by the statements made that she says she saw this coming. But when events brought things to a head, her organization was underfunded and responded in a way that was fearful of what would happen and not inspiring confidence as it was established to do.

Bill Spencer  10/23/2008 11:18 PM Report

It seems everyone here got sucked in on Ms Bair's coy little Miss proper act except one. This lady committed an unprecedented act of collusion with the OTS and JP Morgan Chase in the Wamu seizure and sale. She is a criminal of the worst type and it is a shame Charlie swallowed her little farce 'hook, line and sinker' and failed to ask the tough questions.

"Ms Bair, how is it that the FDIC was established to be a stabilizing force in the economy, yet some would say that it's actions touched off a financial panic that was very expensive to fix?" "Our veiwers would like to know why some of the press releases were worded in such a terribly inflamatory way"

OR

"Ms Bair, could it be said that by distributing advance notice of the FDICs intentions you created an environment where it was difficult for Washington Mutual to find a buyer and make a good sale? In fact, could it be said that by distributing notice that you were concerned, you created the secret that got leaked to the press and eventually forced you to act prematurely?"

Maybe he just didn't do his homework. Thats the last donation PBS gets from me.

gregg alexxa I commend you for seeing through this media 'gloss-over'. Thank you. This Ms Bair is trying to justify her actions in the Wamu case but there are no justifications when all the evidence and the timeline is viewed from a bigger perspective. Ms Bair, for whatever reason, thought it was just a good idea at the time.

Quote "So a … we are fortunate at the FDIC we have a mechanism where we can step in, again working with the primary federal regulator, and sell the institution off before it gets to that point …ah..that’s what happened with with the wamu situation that you mentioned. We were able to intervene and transfer all the deposits and all the liabilities to a healthy acquirer and so we didn’t have that kind disruption. Now shareholders had to take losses. That’s also part of our process. Our statute has something called least cost resolution so that when when we do that, when a primary regulator closes the institution and its sold off, the shareholders and the unsecured creditors, under least cost, are required to take losses before the FDIC. That’s in our statute, so it can result in some harsh consequences for equity share holders but that’s the way the system works. And equity investments are at risk and people who invest in stock should understand that equity investments are at risk."

FYI Ms Bair.... ALL of us stock holders know the risk. What we object to is the fact you had no reason to 'swoop in' on Wamu. FDIC, OTS, and JP Morgan’s devious double dealing, press manipulation, and sheer arrogance are not reasons to 'steal' wamu from its owners. Especially while it still maintained the liquidity required of it in its memorandum of understanding with the OTS. You and your cohorts are no more than common thieves corrupted by your own power. Oh … the supposed bank run? How lame. Everyone with any savvy knows that only those above 100,000 would run. You must prove it was more. In fact you need to justify to us what you did and why you did it at every stage…or do we the people even have a mechanism for oversight of your little exclusive club…. Show us the numbers if you dare.

I have a long list of people, from all walks of life, who, through your derelict action have lost their retirements, life savings, college funds, and other moneys. And what makes me sick is when I listen to Jamie Dimon on that late night telephone conference with his lieutenants talking about how good this deal is. And when they are asked “who were the other bidders and how much?, the answer comes back, “..ah …ah...we don’t know and …ah.. we don’t care”. Wake up American investors! These rich and powerful parasites of the financial system are screwing you royal. The share holders have lots more to say Ms Bair. And before we are finished you and your buddies just may be answering questions in a congressional investigation that can see past the ‘Wamu was a bad company’ thesis.

B. Meighan  10/21/2008 02:08 PM Report

The chairperson S. Bair demonstrates the deep divide between her and another person on the GOP ticket, ie: articulate, intelligent, expertise in these difficult times.

charlies sheep  10/21/2008 07:49 AM Report

WHEN ALLS SAID AND DONE THE WORLD DREAMS ARE ALL IN PLASTICS --FROM-- THE GRADUATE--MOVIE--SEVEN SISTERS-- KNEW 50 YRS AGO THAT OIL WOULD BE THE COIN OF REALM AND NOW THAT IT RULES THEY MUST SIT DOWN ON ITS FIRE THAT CONSUMES THE WORLD--WHAT A MYTH THAT YOU PRINT MONEY TO CONTROL THIS TIGER IS FOOLISHNESS THAT HAS DRIVEN GOVTS AROUND THE WORLD TO HISTERIA

Steve Erinbaulm  10/20/2008 05:49 PM Report

The solution for the FDIC and others is to use private companies/servicers to reach out to these homeowners. The one with the very best reputation and capabilities to handle such a large-scale mass modification effort is LoanMod.com . Check them out at www.LoanMod.com . They were featured in the July 2008 issue of Forbes magazine at the following: http://www.forbes.com/entrepreneurs/forbes/2008/0721/058.html

These are the type of solutions government and lenders should be looking into to help homeowners.

gdb  10/19/2008 07:53 PM Report

i was very impressed with sheila bair in this interview. someone who is very well informed, highly educated and deeply knowledgeable about policy. this is what a qualified female v.p. choice would sound like. a mccain/bair ticket wins in a walk. mccain/palin is another story.

gregg alexxa  10/19/2008 09:24 AM Report

Here is an more accurate portrayal of Ms. Bair's actions. Illegal and corrupt as it pertains to the

seizure of Washington Mutual

(Government's immunity does not give FDIC unlimited protection. It has been successfully challenged before in very similar cases, and can be challenged in WaMu's case.)

Fact1: FDIC has been conducting secrete negotiations with at least 6 private firms, including JPMChase, behind the back of WuMa’s management and board in the weeks leading to WM’s collapse. These 6 or more insider firms need to come to light and answer questions. Their transactions in the market must also come to light.

Fact2: According to FDIC’s public release, WM’s liquidity squeeze was not pre-existing. It happened from 9/15 to 9/24. More than $16B were withdrawn during this period while FDIC was conducting their secrete negotiations. Important to note, FDIC’s secrete negotiation started before this period.

Fact3: According to FDIC (Ms. Bair’s) own public disclosure, FDIC’s action was prompted by a leak to the media of FDIC’s secrete negotiation. The damage and responsibility of FDIC’s act needs to be investigated. The leak to the media makes FDIC’s act a proximate cause of the bank run. Even that FDIC is given broad authority, but when its own action caused the peril of a target, FDIC’s own accountability and liability have to be called into question.

Fact4: The bank run withdraw were mostly in the deposit above $100,000 which was not covered by FDIC, according to FDIC’s record. The deposits within $100,000 were mostly intact. It was a run about confidence, partly contributed by FDIC’s negotiation and its leak to the media. Even under such circumstance, FDIC still had other less damaging alternative mitigations than the abrupt seizure, and therefore FDIC should have considered those as emergency measures. For example, a temporary guarantee of FDIC to raise the ceiling of coverage to $250,000, like what is included in the new Senate bill, would have stopped run and cost the FDIC virtually nothing.

Fact5: JPMorganChase had been making phantom negotiation with WM during the same period while negotiating with FDIC.

Fact6: Similar case as precedent. A recent court ruling on the case of Wachovia (WB) shows that when FDIC forced a target into a grossly unfair sale, the court will not support such deal. Under the pressure of FDIC, Wachovia was threatened to sell itself to Citigroup at $2B, or faced the fate of being seized. WB signed sales agreement with Citi. Wells Fargo later offered $15.1B to WB. The courts ruled against Citi’s claim and allowed Wachovia to proceed with Wells. This sets a precedent: FDIC’s forced transaction will not be support in front of justice when it is grossly and obviously unfair.

Fact7: A case of First City Bancorp in 1993 and its settlement sets another precedent. In this case, FDIC seized and sold First City’s asset with $450 million surplus on the open market. First City sued for $3B in compensation and damages. The case settled in favor of First City. This shows that FDIC’s action of seizure and sale, even with government immunity, has to be reasonable, fair, and justified. The immunity gave FDIC the protection for discretionary error, but not for gross injustice, negligence, or abuse.

Fact8: If FDIC’s action is arguably unconstitutional or abuse of power, their immunity is stripped off. Here, FDIC’s secrete dealing with a small group of connected entities deprived WaMu the basic right of commerce to be valuated on the open market. Furthermore, FDIC knowingly dealt with JPM behind the back of WaMu knowing that WaMu was negotiating with JPM. Such act undermined WM’s fair chance of negotiation. It is arguable that issues may be raised in both unconstitutional and abuse of power.

Thanks for reading.

Nan cha  10/18/2008 03:50 AM Report

OMG, George Bush is so good looking!! we still see him doing a superman job on TV. Poor Josh Brolin, your close up is not worth the 50cents movies called W. Karma,Karma, dude. That must be a political movies funded by O-Opra? laughs,laughs,laughs. Oliver Stone should fare well with crooks. At least Martin S. directed his gangster movies in a glorious way. Oliver, you're toasted, you look grilled with dark sides up. And, Hollywood is down the drain by now. See Bollywood, bolly bollywood.

Mary Jo  10/18/2008 03:31 AM Report

Listen Lance: your type-set response appears somewhere again and again. look at Nancy Pelosi, she did not answer question. She 'delivered' her statements, she 'talked' her way, stuttering about processes and nudging peoples around. yes, audiences are used to CharlieRose Show because it's about getting answers. Charlie helps his guests to get there sometimes. Lance, it's called a social discourse. your bureacrats are jammed with words and can straighten an idea!!!

bLcom  10/18/2008 03:18 AM Report

Sheila Bair done a great job. Of course, politicians who don't do much look clear and cool. i feel her pains and don't laugh at her tilted head, such mountain of debts and humongous heavy load!!

Great interview with Sheila Bair so that we learnt a bit of real government businesses.

BTW, Oliver Stone is a jaded old fool. He plays himself into the 'michael moore' role. that helps Voters remember the democrats' playbook in time of elections. Josh Brolin is Barbara Streisand's step-son. Hollywood Democrats cashing on W.

Lance Dugger  10/18/2008 02:50 AM Report

Some paranoid people might read something sinister into the omission of your conversation with Speaker of the House Pelosi as an overt slap at Sen Obama and the Democrats. I, however, attribute this oversight to the inane eneptness exhibited throughout this Presidential campaign. Also, Charlie, we know you're a smart guy. Please allow your guests to answer your questions before you do, or are you angling to collect the speakers fee along with your salary?

Roy  10/18/2008 01:29 AM Report

A great interview. One doesn't have to put together much of a spreadsheet to see that the cost of renegotiating mortgages with homeowners in trouble is about a third of what it would cost to buy largely worthless MBS from banks and take losses averaging 85-90%. When the principal of the loan is 2-3X current and expected value of the property, holding MBS's for long periods is a fools game, and all the while the Treasury is paying 3-4% for the money we, the taxpayers, have invested.

As a nation, and as taxpayers, new, 30yr, fixed-rate loans based on 9-11-01 property values(or something better if it is available) will produce predictable payments that are solid replacements for toxic loans, and those loans, serviced by the existing private mortgage servicers, can be sold by the Treasury at a profit to private investors. This makes the Treasury a profit center for the taxpayer investor's benefit.

Some households will not be able to afford even these "sweetheart" loans, and some financial institutions will still go bust, but so be it. Our concern as taxpayers and policy makers must be a healthy financial system secured for the least cost. The closer you are to the problem, as Sheila is, the more obvious this solution is. The fact that it fixes the finance industry AND keeps people in their homes as a side-effect makes it especially meritorious.

More at http://savagezen.blogspot.com.

RE Mant  10/18/2008 12:08 AM Report

Can we get an AMEN? Perhaps it is because they are still haggling over the exact method with which to deal with the mortgages, but I have a feeling that both political parties would rather make a big splash in a larger pool of voters, particularly those leaning in their direction, than to focus efforts where they are needed most. And they undoubtedly fear further repercussions of any move that looks like it is playing favorites. I can see this thing still hanging fire after the election, and maybe even until next year, but it had better not wait too long, because there are still a lot of more mortgages set to increase in the next two years. BTW, it should be noted that this interview was taped prior to the Pelosi appearance last night.

fred  10/17/2008 11:03 PM Report

interesting interview:

http://www.informationclearinghouse.info/article21041.htm

I get it  10/17/2008 07:50 PM Report

listen Lance, let's be honest, most people take forever to get to the point. I like to interrupt and so does Charlie. If we ever had a conversation all we would do is interrupt each other and solve the world's problems in a bout 2 hours and/or die of oxygen difficiency. But I digress.