Regulators before its put out for Public Comment and adopted. Now this is a proposal from 2011. The rule being proposed today mandated by doddfrank and deals with incentivebased compensation at a wide range of financial institutions. Here are the key elements of this reproposal. First of all, it mandates that 60 of incentive pay for Senior Executives and significant risk tears at firms with more than 250 billion in assets, think the big wall street banks, this pay be paid out over four years. These executives at firms with 5 50 it 250 billion in assets have to wait three years. Wall street firms defer this pay for three years. But for a Smaller Group of executives. Second, this new proposal includes claw backs at firms with more than 50 billion in assets, Senior Executives and risk takers will be subject to claw backs looking back seven years if they engage in conduct including misconduct, fraud, or financial misrepresentation. Lastly, were with firms with over 1 billion in assets they need to retain records on compensation for up to seven years. 278 pages, this will discourage excessive risk taking. It applies to a wide range of firms, bank, broker dealers, Asset Managers and investment advisors. The common period expected to close in mid july f this rule is adopted, the firms would have 18 months to comply. Tyler, back to you. Mary, thank you very much. Lets hear now from the retired massachusetts congressman former chairman of the Financial Services committee barney frank. His name son the doddfrank bill. He serve third down 2 years on capitol hill. He was a member of the chair financial committee. Larry kudlow is with us. I think folks on this debate particularly, all i have to do is strike a match because i think the gasoline is there and ready to lift off. Congressman frank, how do you feel about these new proposed regulations . Their sweep, scope, what they do. Are they the right medicine for a problem that demands a cure . I think there is a problem that demands a cure. We did require this. We should be very clear. There is separate from the level. And we were very creative when we did the bill. It wasnt up to us, the government, to tell people how much to pay people. We did have say on pay. We do think the shareholders should have to vote on it. People can pay as much as they want. What the general sense was, Warren Buffett is one of the ones that argued this and others, the incentive structure is wrong. The way it worked, if people made a bet and it paid off in short term, they made their money and if it turned sour later, they were okay. Or if they made a bet and went bad, they didnt have any penalty. Thats where the clawbacks come n im very much in favor of changing the incentives. Again, were not limiting the amount that any Company Wants to pay anybody. Thats a separate issue. I do want to say that you take a risk. You should be fully able to benefit if the risk pays off. But also fully subject to the penalty if it doesnt. Now as to the exact specifics, i havent seen them. It moves in the direction that we wanted them to move. Larry . Look, with respect, i dont agree with barney on. This theyre not stipulating the level of pay. Theyre putting restrictions on incentive pay. But industry practices settled most of this issue. I think thats where it should be settled, not by government regulators. They said three years and then the rest of it is bonus. That is pretty good practice. Thats been around for a long time. Im fine with. That what im not fine with is this idea, first of all, if you hurt an institution you can get clawbacks. What does that mean . Is that the actual terminology . Thats what i read in newspapers. The other thing is financial restatement automatically puts new the dog house. Whats wrong with financial restatements . Financial restatements can come for a million different reasons. Theyre probably very good for shareholders and investors anyway to make the thing more accurate. To me this is regulation gone run amok as former Supreme Court judge Anthony Scalia put it this is the regulatory Industrial Complex at its worst. Let me ask one question if i might, who would determine whether an individuals action had hurt a company . Who would determine whether i would be very surprised if the word hurt was in the rule. Lets not hold the regulators accountable for journalistic shorthanded. Im certain that they didnt use the word hurt f they did, they shouldnt have. It would be talking about if losses were incurred as a result of this. Let me make a couple points. First of all, i know that industry facts have changed. But they changed substantially after we began to do this with the law. That is some Companies May have done this. But the finding at the time of everybody looked in where it was, that industry practice did not guard against short term gain and ignoring a longer term loss. That is the three years. I dont think three years was the rule. I think that was in anticipation of something coming forward. As to clawbacks, yeah, if you have done something all we wanted for the incentive is twoway. We dont want it to be heads, i win, tails i break even. Then you flip the coin too often. If the decision you made pays off, you get paid. They dont have any trouble determine wlg it paid off. But if the decision you make causes a financial loss, not a hurt, then you should have to give back some. All right. Barney, look. Financial losses occur in any industry. You know that. I mean thats the nature of the market system. Youre going to have good years and youre going to have bad years. And i think one of the biggest problems i have with this whole story is where is the due process . Here is the government regula regulatories coming through. But there say punishment here which is really judgmentmental. Heres the deal. What i want is, barney, just help me with this seriously. I want to but you wont let me. Due process, where is the due process come in . I dont want to criminalize regulations, barney. I dont want to criminalize losses. That stuff happens in the normal course. I doubt very much this f. This is a criminal penalty. Lets start with that. This would have to do with civil regulation. I dont think the agencies, were not talking the Justice Department n our legislation, by the way, we were not empowered by congressional jurisdiction. This is a civil recovery. Secondly, how do you determine . You make a good point. Sometimes losses will occur. But you know what . Sometimes gains will occur because of the general market. The problem we have today is that if you happen to be there and the tide comes in and it lifts your boat, you make money. You dont have to show that was you who did it. I would say, how do you term whether the particular decision caused the problem or not . By the same way that people now determine whether it causes a gain or not. All i swant fwant is for the st to be the same. Who would determine . The regulator would. Which regulators . There are six agencies. The primary regulator for that particular institution. It could be the federal reserve, control of the currency. They would deal with joint things. Youre arguing that its so hard to tell who caused it but apparently its very easy to tell who caused the gain. People get the gains and somehow thats easy to determine and people benefit if there is just a general increase but somehow they cant lose a penny. I think thats not up to the government. I think thats up to the individual institution. Heres why its up to the government. Hang on one second. Im concerned about this business of due process and blaming and seven year callbacks. Barney, i will give you this one. The government banks would be restricted because theyre government banks. Im going to make the argument that now aday thez pay back their bailout money. These are private shareholder owned institutions. Theres a difference between fannie, freddie and jp morgan. Let me respond. The reason that government steps in is were again, were not trying to penalize how much people get paid. It was the overwhelming consensus which i shared that perverse incentive contributed to excessive risk taking. Then when people benefit this they take a risk but make no penalty if the risk goes bad. Then the market isnt really working. You have rigged it and you have given people an incentive to take more risks. And all were saying is the government isnt saying how much or whatever. What the government is saying is even handed. We dont want the incentive structure to be skew sod that people are rewarded for taking risks without the responsibility if the risk goes bad. And thats a Public Sector responsibility. I hear congressman franks point. I hear the point. Its a legitimate point the all ill say is my belief, those decisions about whos to blame, risk reward, profits and losses, those are ultimately private Sector Companies decisions. Thats what i believe. The government shouldnt be in that game with the exception of fannie and freddie. Every agency has a due process proceeding. These are not criminal. You have a right to appeal, you have a right to counsel. You have toad mo administer to law. A skewed insentive structure contributed to excessive risk taking. There is a comment period, i believe until july 22 nld. Gentlemen, we have to leave it here. We have news. Gentlemen, thank you very much. This is a productive discussion. Congressman, thank you. To julia. The ap has told us that the ap confirmed that prince died in his home in minneapolis. The artist known as prince, he was an unpronounceable symbol. This was first reported this morning. And were just looking at some his top selling albums. He was a Massive Force in music. Dead at age 57. Looking at neilson, some of the biggest albums include purple rain with 2. 5 albums sold in 1984. 1992, his love symbol album sold over a million copies. So he really vaulted to super stardom in 1984 and he just had a number of massive hits since then. Just looking at all of these different things, grammy awards, golden globe awards. So just really a Massive Force here even in an Academy Award in 1948 for purple rain. Julia, just an incredibly talented musician, songwriter, even actor as well. Julia, thank you very much. Were actually going to bring on john nagarian right now. Many of you may not realize that john grouted with prince from central high school, same year, same class. You knew each other a little bit. Yeah. I played football with his brother. One of the most amazing talented musicians of his era. Can you give us a personal anecdote . Lovely guy. He used to play at we would have assemblies. And at those assemblies, prince would get up there and play anticipate people were mesmerized by him. Even in high school. Yep. He could play like seven or eight instruments. And he was just a phenomenal athlete as well and loved to play basketball. But he was only about 54. Maybe 52. He was a tiny fellow. But his brother was about 64, 65. The brother played bnl. Dwayne, im sorry. We all ran into celebrities in our lives n this job you get to meet them sometimes or bounce into them at conferences, whatever. You meet all the celebrities and okay, there is matt damon. Thats pretty cool. Ive never been, you know, it tauz a lot to shut me up. And i was completely i saw prince in california once and he walked into a restaurant. Kind of stood there. Knew everyone was looking at him. Kind of did a little turn and then walked out. Nobody because he was kind of reclusive, right . Very much. So. That was the most i mean everybody, when he walked in the room, he may have been 54 but he was 8 feet tall when he came in. Pete was in purple rain. I tried not to go into that because of the hair situation. He was working a fog machine he was part of the audience because they shot that at first avenue at least parts of it, first avenue is a big club in minneapolis. They shot it. There. He stayed as a resident of minneapolis for much if not all of his life. Absolutely. Jimmy jam, terry lewis, a couple other big friends. They did Janet Jacksons control and really brought her back to the forefront. He had apparently, according to the reports, had ill health in recent weeks. And had canceled a couple concerts. He canceled a couple concert dates but it was not disclosed at that time whether he was in any kind he was hospitalized on friday on the way back home from a show. We have more from julia. Just to talk a little bit about the success of purple rain, the soundtrack album spent 24 weeks atopt billboard charts. He was a massive talent. He had seven grammy awards. He had two Golden Globes as well as an Academy Award. So a talent across all the different areas. And he also did soundtracks for a number of movies including the 1989 sound truck to batman and he toured extensively. I once saw him on tour. He was phenomenal. Julia, not afraid of a fight, too. You have to remember whether prince changed his name to the symbol, it was a message to the record industry, screw you. Youve got my name. But now im not that name anymore. Im this thing. And did he that as large part, right, for a contractual fight. This is a guy that is not afraid to take on a multibillion dollar business. Yep. And he had that he had that deal at the rio hotel where he would show up for his concerts when he felt like it. In other words, the concert had a set time. Midnight, for instance, but it would start whenever prince showed up. That was the deal. Believe it or not, that was exceedingly popular. People couldnt get tickets for it. Julia . Yeah, he was a big proponent of artistic freedom. And he released a number of albums in quick succession in order to get out of the contract with Warner Brothers. And then to fulfill his obligation to them. Then he separated with Warner Brothers and then he released this album called emancipation, a triple disk album and that was under his own label. That was platinum. And had a number of big cover songs. It was really interesting he wanted to go his own way. He found a way to do that with his own name and label. I liked a lot of princes music. But im certainly no expert on it, john. I remember being struck on any occasion when i would see him perform. He was a guitar virtuoso. He was not a great composer and front man and singer, he could play the guitar. Yeah. And on most of the instruments its my understanding that he was self taught. Most of the instruments. The only one i ever heard he took lessons on were the drums. But Everything Else virtually from horns to piano and guitar, he learned on his own. Im just counting the number of albums prince is credited with having done. 39 albums. Four live albums. I mean this is a prolific career that were talking about. Truly memorable super bowl performance. David bowie, merle haggard, fight dog, i mean prince. This is not a good year for legendary musicians. No. And, you know, they burn twice as bright and sometimes they only are around half as long. John, we appreciate you coming on with some personal anecdotes. Graduated with prince from central high school. Yep. And first avenue legend airy club, the jayhawks. Yes, sir. Great city. Thank you, john. All right, john, thank you very much. Were going tie a break or move on . Were going to take a quick break. Welcome back to power lunch. Fractional moves on the major indecembers. Health care, discretion aries, energy all in the green. Take a look at shares of apple moving back into bear market territory. We have chip guidance from qual come last night. Another data point from the supplier to apple which indicates that iphone units could be weak when apple reports on tuesday. A fair price, quality service, and that in a new house, you probably dont share the same tastes as the previous owner. [ dolphin chatters ] so when you need a little house painting or a complete remodel, well help you get the job done right, guaranteed. Get started today at angies list, because your home is where our heart is. Lawelcome back to power lunch. Not Much Movement on the government market wlachlt is interesting is were seeing money being pulled out of the safety yield play as utilities. The gold trade is holding steady. Down by just. 2 . As for the rest of the metals complex, a mixed trade. Small movement all throughout. Copper is up by. 5 . Pe laid y palladium is up 2 . Lets get to Rick Santelli with a bond report. Rates are firm. Commodities are firm. Lots of things are firm. Now way want to firmly watch how they affect the equity markets. Clearly aggressive. If you look at a year to date chart, we should add a technician, that double bottom, treasuries like double tops and double bottoms. Pay attention. Lets look at two day booms. Its note worthy here is yesterday pretty much most of the activity had already quieted down and closed by time we started to really give it a test for the upper 180s. Look at how it caught up today. This is very key wlochlt is leading who . Might be changing on relative value trade. And there is only one chart everyone is looking at. What goes up must come down. Its pretty much right back to where it started. Back to you. All right. Thank you very much. If youre just joining us, the news broke moments ago, musician prince has died. 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