. >> could current fed action could sort of the current fed balance sheet and mechanics there could it also be leading to a bond bubble? if we start to move towards more normalized interest rates, which we created so much paper that's in many ways artificial rates, does it create a cascade when we start to move. >> i don't think it has to. i think the fed can get its balance sheet down quickly. it's always much easier for the fed to be less acome dative than more. i'm not worried about this astonishing balance sheet. it's very big. right now the reason to worry would be that we had general inflation and we don't. >> i think it would be very hard -- >> we may have to hit the mic. >> i think it would be very hard for the federal reserve to raise interest rates rapidly. and i don't think it's likely to do so. is there a situation and one way to interpret your question a situation in which is marks might sell off u.s. bonds rapidly without that being controllable by monetary policy action. i think that's also unlikely, under present conditions. what the markets have shown us is that in adv

so the fed needs different tools. credit, specific credit controls, and controls on excessive leverage to deal with bubbles, and the dodd/frank act does put them in that business, and i think that's good. >> well, could current fed action and even dr. galbraith's opinion, could the current fed balance sheet, the mechanics there, could it also be leading to a bond bubble right now? if we start to move towards more normalized interest rates, have we created so much paper that ma may move rates when we start to move? >> i don't think is has to. i think the fed can get its balance sheet down quickly. it's always much easier for the fed to be less accommodative than more. and i'm not -- i'm not worried about this astonishing balance sheet. it's very big, but right now the reason to worry would be to -- that we had general inflation, and we don't. >> dr. galbraith? >> i think it would be very hard for -- >> you may have to hit your mike. >> i think it would be very hard for the federal reserve to raise interest rates rapidl

so the fed needs different tools. credit, specific credit controls, and controls on excessive leverage to deal with bubbles, and the dodd-frank act does put them in that business, and i think that's good. >> well, could current fed action and even dr. galbraith's opinion, could the current fed balance sheet, the mechanics there, could it also be -- to a bond level right now? if we start to move towards more normalized interest rates? have we create so much paper that many ways rates when we start to move? >> i don't think is has to. i think the fed can get its balance sheet down quickly. it's always much easier for the fed to be less accommodative than more. and i'm not -- i'm not worried about this astonishing balance sheet. it's very big, but right now the reason to worry would be to -- that we had general inflation and we don't. >> dr. galbraith? >> very hard for the -- >> you may have to hit your mike. >> i think it would be very hard for the federal reserve to raise interest rates rapidly, and i don't think it's

that's the fed's job. you come to this hearing and report the strategy specifically which they did, which i think is constructive, but it requires the congress, this committee, to ask the questions about that strategy. i think that dialogue is very important. >> dr. gail brait, i tend to agree with you about the constitutionality of the appointments to the federal reserve board. we obviously have a different opinion about what we should be doing, monetary policy and the federal reserve. but where does this authority come -- constitutional authority since you dreaddressed the constitution, the creation of a fiat monetary system. where does that authority come from exactly? >> i believe, mr. chairman, and i would be cautious about tangling with you on this, but the authority for the federal reserve act simply comes from the authority given to congress to coin money, regulate the value thereof. and, well, the federal reserve act, of course, has been functional piece of american law for over a century now. it

we, in effect, return the fed to what the fed should do in return for congress our constitutional role to act in those matters of emergency. >> what you're trying to do is reign them in and go back to established principles or mission of what they originally should have been and get it more in line with what most people think the fed's mission should be? >> yes. >> thank you. congressman frank, quickly, with regards to the bill you've got, why do you believe it's important to have -- i'm kind of curious, all of the fed members be appointees versus fed regional president will replace those with appointees, why do you think that's important? >> to say one thing in response to your previous question, the biggest power the fed has to intervene was section 13 of the federal reserve act that came from the early '30s un er the hoover administration and we repealed that under the reform bill and they can no longer do it. secondly, i do think it should be less privatized, yeah. i understand the perhaps import gee graphical representation, i can't think of a better case formal impact they can ha

that's the fed's job. you come to this hearing and report the strategy explicitly, like they did about the ms, i think was constructive and also requires the congress, this committee, to ask the questions about the strategy. i think that dialogue is very important. i wish we'd go back to that. >> dr. galbraith, i tend to agree with you about the constitutionality of appointments to the federal reserve board. we always have a different opinion about what we should be doing with monetary policy and the federal reserve. where does this authority come, constitutional authority, since you addressed the constitution, the constitutional authority to actually emit the bills of credit, which is prohibited by the constitution, the creation of a fiat monetary system? where does that authority come from exactly? >> i believe, mr. chairman, and i would be cautious about tangling with you on this, that the authority for the federal reserve act simply comes from the authority given to congress to coin money, regulate the

we, in effect, return the fed to what the fed should do in return for congress our constitutional role to act in those matters of emergency. >> what you're trying to do is rein them in and go back to the established principles or mission of what they originally should have been and get it more in line wi w

paul often says feds. more and more americans understand the absurdity of the monetary policy, that ultimately devalues our own currency. we agree on three key points. observing the valley of the dollar is essential, to economic growth and prosperity in america. the federal government must not be allowed to monetize its debt. our financial system should serve the interests of all americans, just of the interests of what washington and wall street. again i'd like to thank you, chairman, for your steadfast commitment to bring those issues to the forefront of the public debate. i'm pleased to testify on behalf of the sound dollar act. i want to thank the members of the subcommittee who have cosponsored this important legislation. mr. chote, mr. lucas, mr. liu meyer, and mr. garrett. the problem today is that according to some, 1800 was the bridget center. the 1900s was the american century, and the 2000s, 21st century may well be china's century. well, not so fast. but for america to continue its preeminence,

so that's the fed's job. you come to this hearing and report the strategy explicitly like they did about the ms which i think was constructive. it also requires the congress, this committee to ask the questions about the strategy. i think that dialogue's very important. i wish we'd go back to that. >> dr., i tend to agree with you about the constitutionality of appointments to the board. we obviously have a different opinion about what we should be doing with the monetary policy and federal reseven. where does this authority come constitutional authority since you addressed the constitution, the constitutional authority to actually emit the bills of credit which is prohibited by the constitution, the creation of a fiat monetary system. where does that authority come from exactly? >> i believe mr. chairman, i would be cautious about tangle with you on this, that the authority for the federal reserve act simply comes from the authority given to congress to coin money to regulate the value thereof. and that the

the fed has played a role in that. for america to remain the world's leading economy in the 21st century, congress must give the fed a single mandate for price stability, ensure that it is independent from political pressure, and hold it accountable for results. critics charge focusing on a sound dollar implies the fed will ignore the unemployment needs of america. they're wrong. america with only maximize our real output in employment with long-term price stability, protecting the purchasing power of the dollar over time provides the strongest foundation for lasting economic growth and job creation. critics also react as if a single mandate is a shocking proposal. as we know, the united states won world war ii, enjoyed three did decades of prosperity and put a man on the moon without a dual mandate. it's not a fundamental part of our constitutional fabric. it's a 1977 policy directive based on discredited phillips curve, and congress can change it. while it may be politically appealing, the current dual mandate asks t

is this mission impossible you know look what can the fed do the fed can control and this is just an economic fundamentals the fed can control using the word control loosely most one thing at a time the fed can set short term interest rates but then it has no current control over one hundred three supply and we've seen that right now money supply is sort of under volcker volcker cited we want to control money supply the fed has no control over interest rates and as we saw in bokor controlled money supply interest rates were soaring up to fourteen fifteen sixteen percent so the idea that the fed can do two things at once here now you know kirkman well it's you know who's who's to blame here congress has this dual mandate policy that says the fed needs to control inflation and unemployment the same time the fed can't control employment at all even in any scenario even if they were trying to control one variable what can the fed do the fed can lower interest rates to zero which is what they've done it hasn't created any jobs employment not in employment actual employment is back to two

and we in effect return the fed to what the fed should do and retain for congress our constitutional role to act in those matters of emergency. >> so what you're trying to do is rein them in and go back to established principals or mission of what it originally should have been and get it more in line with what most people think the fed's mission should be. >> yes, sir. >> thank you. >> congressman frank, quickly, with regards to the bill that you've got, why do you believe it's important to have, i'm kind of curious all of the fed members to be appointees versus regional presidents going to replace those. why do you think that's important? >> first, i want to say one thing. despite your previous question, the biggest power of the federal reserve had to intervene freely was section 133 which came under the hoover administration. we repealed that. they can no longer do what they did with aig on an entity by eptity basis. secondly the chairman asked me

the fed has played a role in that. for america to remain the world's leading economy in the 21st century, congress must give the fed a single mandate for price stability, ensure that it is independent from political pressure, and hold it accountable for results. critics charge focusing on a sound dollar implies the fed will ignore the unemployment needs of america. they're wrong. america with only maximize our real output in employment with long-term price stability, protecting the purchasing power of the dollar over time provides the strongest foundation for lasting economic growth and job creation. critics also react as if a single mandate is a shocking proposal. as we know, the united states won world war ii, enjoyed three decades of prosperity and put a man on the moon without a dual mandate. it's not a fundamental part of our constitutional fabric. it's a 1977 policy directive based on discredited phillips curve, and congress can change it. while it may be politically appealing, the current dual mandate asks the f

since 2008 the fed has done exactly that. it has pumped money into the financial system at unprecedented rates. it has kept interest rates near zero, thus discouraging prudent behavior among consumers, entrepreneurs, and government actors while encouraging reckless spending and the accumulation of vast private and public debts. the fed has done everything it can to prevent the market adjustments needed for recovery from the financial crisis. all this has happened without oversight, without external checks and balance, and without public discussion and debate. this kind of setup is a recipe for disaster. everything we know about organizations with vast authority and without external check and balance tells us that they cannot possibly work well. industrial planning fails because planners cannot and should not pick winners and losers among firms and industries. likewise, monetary planners look the incentives and information to make efficient decisions about open market operations, the discount rate, and reserve requirements. th

we, in effect, return the fed to what the fed should do in return for congress our constitutional role to act in those matters of emergency. >> what you're trying to do is rein them in and go back to the established principles or mission of what they originally should have been and get it more in line with what most people think the fed's mission should be? >> yes, sir. >> thank you. congressman frank, quickly, with regards to the bill you've got, why do you believe it's important to have -- i'm kind of curious, all of the fed members be appointees versus fed regional president will replace those with appointees, why do you think that's important? >> to say one thing in response to your previous question, the biggest power the fed has to intervene was section 13 of the federal reserve act that came from the early '30s under the hoover administration and we repealed that under the reform bill and they can no longer do it on an entity by entity basis. secondly, i do think it should be less privatized, yeah. i understand the importance of gee graphical representation, i can't think of a c

to the fed. -- last year we are able to get some transparency to the fed. we still have more to do on that. it is very clear how we decide what constitutional money is. i do not think many people reject the idea that the congress does have responsibility of oversight and figuring out exactly how to handle that. but the crisis that came about, this is the reason that we had strong support in the last session. more information has come out because of the lawsuits. the way i see the monetary policy is most people realize how big the economy is. generally they do not talk about the other half of their equation. that is the monetary issue. it is one half of all the transactions. to duck the issue, i think it has been a mistake. i believe over these many decades if we had good times, they have the credit. something had to be done. they would get the credit out of the slump. i think that has changed. they say how global it is. one of the consequences has been this excess of debt. then the bailing out th

to the fed. -- last year we are able to get some transparency to the fed. we still have more to do on that. it is very clear how we decide what constitutional money is. i do not think many people reject the idea that the congress does have responsibility of oversight and figuring out exactly how to handle that. but the crisis that came about, this is the reason that we had strong support in the last session. more information has come out because of the lawsuits. the way i see the monetary policy is most people realize how big the economy is. generally they do not talk about the other half of their equation. that is the monetary issue. it is one half of all the transactions. to duck the issue, i think it has been a mistake. i believe over these many decades if we had good times, they have the credit. something had to be done. they would get the credit out of the slump. i think that has changed. they say how global it is. one of the consequences has been this excess of debt. then the bailing out th

is this mission impossible you know look what can the fed do the fed can control and this is just an economic fundamentals the fed can control using the word control loosely most one thing at a time the fed can set short term interest rates but then it has no current control over. supply and we've seen that right now money supply is sort of under volcker volcker side we want to control money supply and the fed has no control over interest rates and as we saw in bokor controlled money supply interest rates were soaring up to fourteen fifteen sixteen percent so the idea that the fed can do two things at once here now you know kirkman well it's you know who's who's to blame here congress has this dual mandate policy that says the fed needs to control inflation and unemployment the same time the fed can't control employment at all even in any scenario even if they were trying to control one variable what can the fed do the fed can lower interest rates to zero which is what they've done it hasn't created any jobs employment not in employment actual employment is back to two thousand and t

is this mission impossible you know look what can the fed do the fed can control and this is just an economic fundamentals the fed can control using the word control loosely most one thing at a time the fed can set short term interest rates but then it has no current control over. supply and we've seen that right now money supply is soaring if under volcker volcker cited we want to control money supply and the fed has no control over interest rates and as we saw when volcker controlled money supply interest rates were soaring up to fourteen fifteen sixteen percent so the idea that the fed can do two things at once here now you know kirkman well it's you know who's who's to blame here congress has this dual mandate policy that says the fed needs to control inflation and unemployment the same time the fed can't control employment at all even in any scenario even if they were trying to control one variable what can the fed do the fed can lower interest rates to zero which is what they've done it hasn't created any jobs employment not in employment actual employment is back to two thousa

what is wrong with tim geithner with bees on the board of the new york fed? >> well, i think you mean jamie dimon. >> eliot: yes, correct. >> there is a conflict of interest there, eliot. jamie dimon is head one jpmorgan ones largest banks in the world they've had big losses, those need to be investigated properly and the new york fed is a responsible supervisor of jpmorgan. there is conflict of interest for someone who will be subject of investigation also sit in the supervisory position. >> eliot: now i don't think most people appreciate the fact if you look back at the board of the new york fed over the last ten years, you will see that it has been dominated by bankers. why is that and how can that have been permitted to continue? >> well, there is a long-standing arrangement for all the regional feds that comprise the federal reserve system. it gives the local bankers a large voice. and giving local bankers a voice in kansas or minnesota, that's one thing, but in new york you're giving giving that voice to some of the most powerful people on wall street.

s of the banks diamond sites give and take after bank chiefs meet at fed j.p. morgan chase and company chief executive jamie dimon said there was give and take when bank leaders met with federal reserve officials to discuss industry oversight in new york last week oh yeah well we get he takes you know a little tape worm. any money. and then obama says we can look back we have to go forward let's pass laws to make it easier for tapeworms like james is still money. money. and he goes back into the warmth of his lair faecal uncrossed of lair where he lives a little family of tapeworms. just me. but i maybe because of the tape. and lenders including new york based j.p. morgan the largest and most profitable u.s. bank are resisting fed efforts to impose tougher restrictions on too big to fail firms whose collapse could hurt the broader economy the banks have pressed the fed to explain assumptions used on this year stress test and have criticized the central bank's proposed rules including limits on counterparty risk now here's what jamie diamond says it's great that

since 2008, the fed has done exactly that. it has pumped money into the financial system at unprecedented rates, it has kept interest rates near zero, thus discouraging prudent behavior among consumers, entrepreneurs and government actors, while encouraging reckless spending and accumulation of vast public and private debts. the fed has done everything it can can to prevent market adjustments needed for recovery from the financial crisis. all this has happened without oversight, without external check and balance and without public discussion and debate. this kind of setup is a recipe for disaster. everything we know about organizations with vast authority and without external check and balance tells us they cannot possibly work well. industrial planning fails because planners cannot and should not pick winners and losers among firms and industries. likewise, monetary planners lack the incentive and information to make efficient decisions about open market operations, discount rate and reserve requirements. the fed simply does

or trouble could come from the fed's neighbors in washington. if congress and the president can't resolve their difference before tax breaks expire or spending cuts take hold next year, the fed minutes show bernanke and his colleagues are worried the fighting over the debt limit could hold back business and household spending. the fed also plans to tweak its messaging, considering how to tell people exactly what economic conditions would warrant keeping interest rates low throh late 2014. darren gersh, "nightly business report," washington. >> susie: still ahead, our agriculture economy series is trucking on. grain prices are one of the best ways to check in on farming. we get an in-depth look from the head of grain futures at the u.s. intercontinental exchange. "nightly business report" is brought to you by: captioning sponsored by wpbt >> susie: stocks u-turned on the minutes from the federal reserve, tom, turning early day gains into a fourth straight closing loss. >> tom: susie, the blue chip dow had been up nearly 100 points, but it closed

s of the banks diamond sites give and take after bank fed j.p. morgan chase and company chief executive jamie diamond said there was give and take when bank leaders met with federal reserve officials to discuss industry oversight in new york last week oh yeah well we takes you know a little tape worm. we did tape one. any money for me to steal. and then obama says we can look back we have to go forward let's pass laws to make it easier for to james is still money. and jamie taping our money. and he goes back into the warmth of his lair is equal in cost of larry lives a little family of jaipur. just me. but i maybe because of the tape. and lenders including new york based j.p. morgan the largest and most profitable u.s. bank are resisting fed efforts to impose tougher restrictions on too big to fail firms whose collapse could hurt the broader economy the banks have pressed the fed to explain assumptions used on this year stress test and have criticised the central bank's proposed rules including limits on counterparty risk and here's what jamie di

or trouble could come from the fed's neighbors in washington. if congress and the president can't resolve their difference before tax breaks expire or spending cuts take hold next year, the fed minutes show bernanke and his colleagues are worried the fighting over the debt limit could hold back business and household spending. the fed also plans to tweak its messaging, considering how to tell people exactly what economic conditions would warrant keeping interest rates low through late 2014. darren gersh, "nightly business report," washington. >> susie: still ahead, our agriculture economy series is trucking on. grain prices are one of the best ways to check in on farming. we get an in-depth look from the head of grain futures at the u.s. intercontinental exchange. "nightly business report" is brought to you by: captioning sponsored by wpbt >> susie: stocks u-turned on the minutes from the federal reserve, tom, turning early day gains into a fourth straight closing loss. >> tom: susie, the blue chip dow had been up nearly 100 points, but it close

s of the banks diamond sites give and take after bank chiefs meet at fed j.p. morgan chase and company chief executive jamie diamond said there was give and take when bank leaders met with federal reserve officials to discuss industry oversight in new york last week oh yeah well we get he takes you know a little tape worm. we did tape one. any money for me to steal. and then obama says we can look back we have to go forward let's pass laws to make it easier for tapeworms like james is still money. in the money. and he goes back into the warmth of his lair as equal uncrossed of leora where he lives a little family of tape worms. but i mean because of that tape. and lenders including new york based j.p. morgan the largest and most profitable u.s. bank are resisting fed efforts to impose tougher restrictions on too big to fail firms whose collapse could hurt the broader economy the banks have pressed the fed to explain assumptions used on this year stress test and have criticized the central banks proposed rules including limits on counter party risk now here's wh

or trouble could come from the fed's neighbors in washington. if congress and the president can't resolve their difference before tax breaks expire or spending cuts take holnext year, the fed minutes show bernanke and his colleagues are worried the fighting over the debt limit could hold back business and household spending. the fed also plans to tweak its messaging, considering how to tell people exactly what economic conditions would warrant keeping interest rates low through late 2014. darren gersh, "nightly business report," washington. >> susie: still ahead, our agriculture economy series is trucking on. grain prices are one of the best ways to check in on farming. we get an in-depth look from the head of grain futures at the u.s. intercontinental exchange. "nightly business report" is brought to you by: captioning sponsored by wpbt >> susie: stocks u-turned on the minutes from the federal reserve, tom, turning early day gains into a fourth straight closing loss. >> tom: susie, the blue chip dow had been up nearly 100 points, but it closed

on their research on the performance of the fed in 2010, they concluded that under the fed the economy has suffered more instability than in the decades before the fed's accomplish jchl and even it's post woshld war ii performance has not clearly surpassed that of its pretd sesz sor, the national banking system. economic theory demonstrate that an elastic currency system infers no benefit on society. the fed should be abolished and a market money system of commodity money and money certificates should be established. a direct route to achieve this end is to convert federal reserve notes into redemption claims for gold with a 100% reserve of gold and to redeem the portion of reserve deposits banks hold at the fed into cash so that banks hold 100% cash reserves against their checkable deposits. at that point, production of money and money substitutes should be done by private enterprises under the general laws of commerce. thank you. >> i thank the gentleman. recognize dr. kline. five minutes opening statement. >> thank you chairman and member for the the opportunity to discuss such an i

and therefore regulated by the fed. and i can tell you, there was a very strong reluctance on the part of the fed to look at us as anything other than a bank. even though, of course, 90% of our businesses is insured. we were frustrated by that. that's probably why i'm here today is because of that experience. so i would also tell you that the federal reserve, i've met a lot of people at the federal reserve, i have yet to meet somebody who had what i would call a sophisticated understanding of the insurance industry. >> it's a mismatch. >> right. so it worries me. we are already highly regulated by the states. the new york insurance department, you know, and the state of new york is, you know, i would argue the most sophisticated state regulator sophisticated state regulator who regulates us today. and they know what they're doing. >> can i ask a question? the aig i think was in five pieces of the company. did the insurance division ever -- was that ever at rising or were the illinois requirements so profound that none o

s of the banks diamond sites give and take after bank chiefs meet at fed j.p. morgan chase and company chief executive jamie diamond said there was give and take when bank leaders met with federal reserve officials to discuss industry oversight in new york last week oh yeah well we get he takes you know a little tape worm. and we did tape one any money for me to steal. and then obama says we can look back we have to go forward let's pass laws to make it easier for tipper but james is still money. and jamie dick cheney now in the money. and he goes back into the warmth of his lair as he call in cost of leora where he lives a little family of tape worms. just me. but i maybe because of the tape. and lenders including new york based j.p. morgan the largest and most profitable u.s. bank are resisting fed efforts to impose tougher restrictions on too big to fail firms whose collapse could hurt the broader economy the banks have pressed the fed to explain assumptions used on this year stress test and have criticized the central bank's proposed rules including limits

you saw today the dow's fed factory index down. richmond fed was down. philly fed was down. i mean, it ain't great, randy. what i'm hinting at is if this dollar goes up another 5%, 6%, 7% is that going to change the fed's mind about qe here at home? >> i don't think that's going to be enough to do it. i mean, if it goes like that in a day, then it's going to be problematic. if it's gradually going up over a few-month time horizon i think the fed will not really change policy just based on that. but certainly they'll be looking at the consequences for the rest of the economy. if we're still getting some really weak numbers. and of course the jobs report's going to be really important on friday. then that's going to be the basis for maybe making some changes. >> all right. so i'll up the ante. you mentioned it. in addition to a rapidly rising dollar, and you've had some slowdown in the factory orders in the manufacturing, if you got a third straight weak jobs report, it will be published at 8:30 a.m. on friday, if you get 100,000 non-farm payrolls or, you know, something real

s of the banks diamond sites give and take after bank chiefs meet at fed j.p. morgan chase and company chief executive jamie diamond said there was give and take when bank leaders met with federal reserve officials to discuss industry oversight in new york last week oh yeah well we get he takes you know a little tape worm. we did tape one any money for me to steal. and then obama says we can look back we have to go forward let's pass laws to make it easier for tapeworms like james is still money. money. and he goes back into the warmth of his lair people in cost of leora where he lives a little family of tape worms. i was just me. but i maybe because of the tape. and lenders including new york based j.p. morgan the largest and most profitable u.s. bank are resisting fed efforts to impose tougher restrictions on too big to fail firms whose collapse could hurt the broader economy the banks have pressed the fed to explain assumptions used on this year stress test and have criticized the central bank's proposed rules including limits on counterparty risk now here's

s of the banks diamond sites give and take after bank chiefs meet at fed j.p. morgan chase and company chief executive jamie diamond said there was give and take when bank leaders met with federal reserve officials to discuss industry oversight in new york last week oh yeah well we give he takes you know a little tape worm. i want you to tape one any money for me to steal. and then obama says we can look back we have to go forward let's pass laws to make it easier for tapeworms like james are still money. any money. he goes back into the warmth of his lehrer's people in cost of leora where he lives a little family of tape worms. i was just me. but i maybe because of that tape. and lenders including new york based j.p. morgan the largest and most profitable u.s. bank are resisting fed efforts to impose tougher restrictions on too big to fail firms whose collapse could hurt the broader economy the banks have pressed the fed to explain assumptions used on this year stress test and have criticized the central bank's proposed rules including limits on counterparty r

s of the banks diamond sites give and take after bank chiefs meet at fed j.p. morgan chase and company chief executive jamie diamond said there was give and take when bank leaders met with federal reserve officials to discuss industry oversight in new york last week oh yeah well we get he takes you know a little tape worm. to tape one. any money for me to steal. and then obama says we can look back we have to go forward let's pass laws to make it easier for tapeworms like james who still money. any little money. he goes back into the warmth of his lair is equal in cost of leora where he lives a little family of tape worms. but i mean because of that tape. and lenders including new york based j.p. morgan the largest and most profitable. u.s. banks are resisting fed efforts to impose tougher restrictions on too big to fail firms whose collapse could hurt the broader economy the banks have pressed the fed to explain assumptions used on this year stress test and have criticized the central bank's proposed rules including limits on counterparty risk and here's what

if that is the case then when does the fed expect to finalize this rule? and shouldn't it have been done before the final siffifsoc rule. >> i'm not asking you about legal requirement. it seems to me it is putting the cart before the horse and that is a pretty common occurrence these days. >> so i think the rule that defines what it means to be activities that are financial in nature will be relevant for companies where there is some uncertainty about whether they are financial enough. i think as we mentioned it's the cutoff is 85% financial. there are some companies out there that are kind of on the boundary and are not sure. i think for the companies that are -- there are a lot of companies that are clearly financial and where the boundary is drawn is not going to affect whether their determined to be financial or not. >>> thank you madam chair for calling this hearing. i have problems in the fact that the proposed regulations sweep insurance companies into the same area as bank holding companies. and what's unfortunate about the inability to have all th

s of the banks diamond sites give and take after bank fed j.p. morgan chase and company chief executive jamie diamond said there was give and take when bank leaders met with federal reserve officials to discuss industry oversight in new york last week oh yeah well we takes you know a little tape worm. we did tape one. any money for me to still do. and then obama says we can look back we have to go forward let's pass laws to make it easier for tapeworms like james who still money. and jamie to take any money. and he goes back into the warmth of his lair faecal uncrossed of lair where he lives a little family of jaipur. but i maybe because of the tape. and lenders including new york based j.p. morgan the largest and most profitable u.s. bank are resisting fed efforts to impose tougher restrictions on too big to fail firms whose collapse could hurt the broader economy the banks have pressed the fed to explain assumptions used on this year stress test and have criticized the central bank's proposed rules including limits on counterparty risk and here

s of the banks diamond sites give and take after bank chiefs meet at fed j.p. morgan chase and company chief executive jamie diamond said there was give and take when bank leaders met with federal reserve officials to discuss industry oversight in new york last week oh yeah well we get he takes you know a little tape worm. i want you to tape one any money for me to steal. and then obama says we can look back we have to go forward let's pass laws to make it easier for james is still money. money. and he goes back into the warmth of his layers people and cost of leora where he lives a little family of tapeworms. jamie i was just me. but i maybe because of the tape. and lenders including new york based j.p. morgan the largest and most profitable u.s. bank are resisting fed efforts to impose tougher restrictions on too big to fail firms whose collapse could hurt the broader economy the banks have pressed the fed to explain assumptions used on this year stress test and have criticized the central bank's proposed rules including limits on counterparty risk now here's

big fat fed and we should keep that mind but at some point the fed is going to stop lactating free milk in a jamie's mall is going to have to grow up and work for a living you can get a job you fricken loser another important point about this insider saying it's like kicking a man when he's down is here's g.p. morgan a bank that exists that's their business models kicking people who are down whether it's bear stearns or whether it's jefferson county alabama where they kick the county to the ground and then continued kicking them and now sell them food stamps because they're all broke and desperate thanks to jamie diamond fraudulent you know interest rate swaps sold to the town you know who provides the capital for those food stamps again ben bernanke is lactating both of them give them all the money they need to issue food stamps to the people that they just disenfranchised with their attacks on their municipalities whether it's in the u.s. or abroad people in greece blowing their brains out because jamie dimon is an arrogant selfish pig yes ok and now the other important thing to note

should the fed care. >> i'm almost certain the fed will investigate this. it's going to look at what the positions are. and i think this raises political pressure on the fed to toughen up the volcker rule. and i think the fed is going to care an awful lot about this. there's a big position that has a lot of weight. i think the fed's going to want to know why this went bad. was this an issue it wasn't looking at it? one thing i want to tell you, senator levin on a conference call was asked if he had advice for jamie dimon, he said if you want to be a hedge fund manager, be a hedge fund manager, terminate your access to the window and stop garned financial deposits. >> steve liesman, thank you very much. i believe the s.e.c.'s already opened an investigation into this trading loss. we'll have to see what the results are. steve liesman, thank you. gentlemen, scott, frank, it's been fantastic to have you on the show. thank you very much for joining on the debate as well. >> thank you. >> certainly was a great group and a great discussion. we also did reach out

the fed would always lend to the banks. we did make modifications in order to reassure banks about the availability of credit and to get more liquidity into the system, we extended the maturity of the discount window loans which were normally overnight loans. we made them longer-term and we have auctions of discount window funds where firms would bid on how much they could pay and the idea was having a fixed amount we were auctioning we would ensure celtic have a lot of cash into the system. anyway the point here is that the discount window which is the fed's usual lender of last resort facility lending to banks will use it aggressively to make sure that the banks had access to cash to try to -- but our financial system is a lot more complicated than the one that existed when the fed was created in 1913 and many other different kinds of financial institutions and markets now and as i said, the crisis was like an old-time bank crisis but it was all different kinds of firms and institutional contexts of the fed had to go beyo

by being a constant customer of the feds and keeping interest rates so low for the u.s. government are she's like no other we're talking about everybody still buys u.s. treasuries so you know it's everybody's fault the fact is the largest holder of u.s. treasuries it is the biggest customer the fed in china i just i don't understand this just really signifies to me what reform means in washington is just the ball would do it would reverse order so just plug it. it's. because reform just doesn't go anywhere and from taking on the fed to taking on wall street we're got to end by showing you this check out this video look at who it is dimitri along with max kaiser and some other dude we have to figure out who he is but anyway you tube user r.g.b. anarky. made this send it to was very cool and believe you with it you can check it out it's on our are you tube channel youtube dot com slash capital account under our favorite videos right. you can check it out so for now that's all we have time for so go look at it now because we don't have time for more show and don't forget to

those dodd/frank regulations coming out of the fed need five affirmative votes. right now there are five members of the board of governors. so they need to reach complete unanimity with regard to those regulations. when the negative impact, possible impact of those regulations is such a threat, i think that requires unanimity and is healthy and a real protection. these two new members of the fed change the math, change the requirement from needing five out of five to needing five out of seven. i think that will significantly push these regulations to the left, if you will, and require and, therefore, produce less consensus that those with economic viewpoints such as mine would like to see continue. and in the same vein, the fed is certainly significant not only regulating the mega banks, but in instances like two years ago bailing out the mega banks and they have that authority and they have that role. just as with dodd/frank regulations, that requires five affirmative votes of the fed board. again, right now before these two confirmations, that would mean five o

by being a constant customer of the feds and keeping interest rates so low for the u.s. government are she's like no other we're talking about everybody still buys u.s. treasuries so you know it's everybody's fault but the fad is the largest holder of u.s. treasuries it is the biggest customer the fed in china i just i don't understand this just really signifies to me what reform means in washington it's just the ball i would do it with every soldier so just employ get employed. it's. because reform just doesn't go anywhere and from taking on the fed to taking on wall street we've got to end by showing you this check out this video look at who it is dimitri along with max kaiser and some other dude we have to figure out who he is but anyway you tube user r.g.b. anarky. made this send it to was very cool and believe you with it you can check it out it's on our our you tube channel youtube dot com slash capital account under our favorite videos right yeah yeah you can check it out so for now that's all we have time for so go look at it now because we don't have time from o