so this all actually happened late last week when the financial giant revealed it had made this risky credit bet in the european market. so now, we're hearing three executives are expected to resign and bloomberg is now reporting morgan's entire chief investment office of london could be cleaned out. the trades are raising some very, very serious questions this morning about whether the country's biggest bank learned anything from that financial crisis. let me remind you, that was merely four years ago and what happened to the laws that were supposed to stop all of this? that's one of the big questions we're asking this morning. many of the rules created by the dodd-frank bill still aren't in place, two years later. ceo jamie dimon acknowledging this new mess could give regulators and members of congress more reason to tighten any loopholes. >> have you given regulators new ammunition against the banks? >> absolutely. this is a very fortunate and inopportune time to have this kind of mistake. >> we welcome sheila bair, former chair of the fdic and has called for closing some of those said loopholes, so welcome, sheila, to you. >> thank you. >> welcome to christine romans and ali velshi. >> sheila, really just right out of the gate this morning as we mentioned 2008 not too long ago is this deja vu? is this just as egregious and risky in terms of the betting do you think? >> well, no, i don't think that this is as bad as some of the really system-wide idiotic things that were being done leading up to the crisis, and to morgan chase's credit they avoided a lot of that nonsense but this is still a very serious issue. i think it does underscore that even with very good management, these institutions are just too big to manage and especially dealing with very complex derivatives instruments trying to hedge risk in large securities trading books, even the best of managers, ken stumple, and so i think it requires, suggests smaller, simpler institutions, ones that have more focused management on particular business lines. >> i want to get to that point because that is one of the concerns that these banks are too massive and perhaps one boss in one section has no idea what the other arm is doing at all. >> that's true. >> one of the questions as we talk about this, the dodd-frank, the regulation. >> right. >> passed in 2011 but a lot of it is still being drafted and part of that is this volcker rule. do you think it would have stopped this? >> that's not clear. we're learning it appears it was a bona fide hedge. people say you're hedging against an economic downturn as opposed to hedging against a significant credit risk exposure. we're learning more about that. certainly regulators need to use the powers they already have and morgan chase is a heavily regulated bank holding company, always has. the office of the comp. patroller of the currency, the new york fed are its primary prudential regulators and this certainly presents safety and soundness issues. they changed the model they use that determine what risk is, do regulators know about that. first of all regulators need to use the powers they have already, and second of all you're right, we need to strengthen rules volcker suggested higher capital. at the end of the day capital protects banks from unexpected losses and we have higher capital at the banks. >> i want to get to the point that americans are frustrated with wall street in 2008. >> they are. >> you have senator bob corker, republican from tennessee, some of the regulation according to "the wall street journal" saying congress needs answers. i thought we needed answers a couple years ago, yes we apparently need answers again and calling on questions specifically what triggered this loss, this $2.3 billion loss. obviously that must be a bad sign for morgan, right? >> it is. and i think their ceo to his credit acknowledged they have a lot of egg on their face. this is a serious misstep, not one that threatens the institution or profitability but still a sizeable loss and one that should not have happened. so a lot of people are going to be wanting answers and legitimately so, and i think again as we said it earlier, can anybody really manage these very large, complex institutions, big, big question. >> jump in, guys. >> sheila, it's ali velshi. good to see you again. we spoke on the weekend about this. >> we did. >> here's the thing, as you said, this may or may not have been involved by the volcker rule. you are a republican, we normally associate democrats with wanting to regulate wall street. there is a culture of regulation missing and a quality of regulator that is missing because it's hard to compete with the highest paid minds in the world. that could be more of the issue here. >> i think that's true. this is a basic question of prudential supervision. we've had safety and soundness regulation for banks and bank holding companies for a long time and putting the volcker rule aside this was terrible risk management, a very bad model, one they stopped using and went back to their old model, expected losses doubled. what was going on there? regulators have a lot ofuals to deal with basic safety and soundness issues and we need new rules, i support that but also need to use the powers we already have. >> morgan made $19 billion last year so a $2 billion loss in the scope of earnings, could it be this is just a bad bet, a bad move, maybe volcker wouldn't change it, nothing in dodd-frank changes here and what is lost is a reputational hit for jamie dimon, someone saying we don't need to be regulated more. >> right, that is true, that is part of it. i do think this is a pretty serious loss. again it's nothing compared to the idiotic things we were seeing in 2008, but nonetheless this shouldn't have happened. i think there's probably more piling on than there should be but it raises legitimate issues about theed aquasy of risk management and the ability to manage and regulate the complex several trillion-dollar institutions. >> here is my final question because this is incredibly complex. >> yes. >> bottom line, tell me why americans need to care, we're talking about proprietary trading and morgan and ali, you and i were talking about earlier, this is the bank's money but ultimately they're a government-backed bank so ultimately it's our money. why do americans need to care about this? >> for a couple of reasons. there are broader issues of system stability. we want a safe and sound banking system and the deposit insurance fund, the morgan chase has a lot of insured deposit as do to the other mega banking institution. there's a guarantee for insured deposits and there are good reasons to are that but it creates exposure and risk so from the government exposure standpoint folks should care and also care about a banking system that serves credit needs not just geared toward arbitraging with higher paying securities. we want lending and credit intermediation and want support for the real economy and it's everyone's interest to have a banking system that delivers that. finally from a narrow perspective if you own shares in large banks. >> you care. >> should you wake up? >> you felt it friday for sure. ouch. >> absolutely. they don't have it good, even before the crisis they did not deliver good value. just too big and complex. >> sheila, i want to you weigh in on this, we're talking to elizabeth warren, she's running for senate in the state of massachusetts she's calling on jamie dimon to step down not from his post at the head of morgan but from his board seat on the new york fed. do you agree with that? where do you see him falling in this mess? >> right. i think the government's structure of the fed's regional banks is a real issue. the new york fed is the primary regulator of the large institutions, yet they have industry people sitting on their boards and that's true with the other regional banks so i think this is a larger issue than jamie dimon, one that tried to get fixed in dodd-frank and didn't quite make it. i think jamie dimon is a good manag manager. i think he stumbled badly here, he's acknowledged that. my sense is the focus should be on simplifying the structures and getting better intermediate management, if we can't break them up outright so we have better focus on what's going on in each individual component of the bank. >> sheila bair, i appreciate it, thank you so much and ali and christine appreciate it very much so. the revolving door the corner office at yahoo! still swinging this morning. i'm talking about scott thompson, the fifth company chief executive to be bounced in the last decade. he resigned after just four months. he, remember this, fudged his resume, climbing to have a degree in computer science even though he didn't have one. if you read this morning's "wall street journal" they report before resigning thompson told his board of directors we thyroid cancer and was beginning treatment. a top yahoo! executive ross levinson has been named to replace the company's interim ceo. now back to miss romans for a look at the rest of the day's stories. good morning again. >> good morning again. manhunt is under way for an fbi agent, 100 fbi agents and dozens more law enforcement officers searching southern california this hour for one of their colleagues. 35-year-old steven ivans has been missing since last week. police describe him as suicidal and possibly carrying a gun. authorities in mexico are assuring them civilians are not being targeted there after the gruesome discovery of 49 decapitated and dismembered bodies littered along a mexican highway. the killings believed to be the work of the zeta drug cartel, the bodies were found near the u.s. border with texas. a woman who contracted flesh eating bacteria and had to have her leg amputated now in danger of losing her fingers as well. 24-year-old amy copeland lost her left leg and part of her abdomen after she was infected two weeks ago, she was ziplining over the tallapoosa river when the line snapped. copeland's parents are optimistic about her recovery. we'll talk with them about how she is doing and how this happened, coming up next hour. the dalai lama warning of a possible plot to poison him. he had an exclusive interview with the newspaper "the telegraph." he's been told chinese agents have trained tibetan women to pose as devoteees and approach him for a blessing, they'd carry poison in their hair oir skarvegz. the dalai lama says the plot is not confirmed but highlights his need for tighter security. "the avengers" crushed the competition in box office records taking in more than $103 million in its second weekend. "the avengers" has made, wait for it, now more than $1 billion, billion dollars worldwide. will ferrell returned to "saturday night live" this weekend, and his infamous role as george w. bush, here he is commiserating with joe biden as an angry teenager lashing out at president obama for stealing the spotlight on same-sex marriage. >> i used to catch grief all the time from president cheney. >> um-hum. >> i'd be in the oval office hooking up the slurpee machine, settling into a "charles in charge" marathon, and that penguin would come waddling in and yell "get your damned pants on, we're about to bomb blabity blah, blah, blah." >> i love he came to "snl" this weekend. love him, love him. thank you so much. still ahead on "starting point," the nypd under fire for infiltrating mosques and spying on muslims. why new york congressman peter king thinks lawmakers should be giving the department a medal. also take a look at, this the cover of "newsweek" and all kinds of buzz this rng mo, tmor good, the bad. our panel walking in to talk about this and that and everything in between, ryan, abby and will cain. hello, good morning. so we got a little music. i love this show for the use mus music, this is abby's playlist, third eye blind. about your dog. like the dual-defense antioxidants in our food that work around the clock... supporting your dog's immune system on the inside... while helping to keep his skin and coat healthy on the outside. with this kind of thinking going into our food... imagine all the goodness that can come out of it. just one way we're making the world a better place... one pet at a time. purina one smartblend. one pet at a time. are you still sleeping? just wanted to check and make sure that we were on schedule. the first technology of its kind... mom and dad, i have great news. is now providing answers families need. siemens. answers. er is different but centurylink is committed to being a different kind of communications company by continuing to help you do more and focus on the things that matter to you. i have twins, 21 years old. each kid has their own path. they grow up, and they're out having their life. i really started to talk to them about the things that are important that they have to take ownership over. my name's colleen stiles, and my kids and i did our wills on legalzoom. 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[ male announcer ] ...forbusiness.com. ♪ ha ha! got the mirrors all adjusted? you can see everything ok? just stay off the freeways, all right? i don't want you going out on those yet. mmm-hmm. and just leave your phone in your purse. i don't want you texting, all right? daddy...ok! ok, here you go. be careful. thanks dad. call me -- but not while you're driving. ♪ [ dad ] we knew this day was coming. that's why we bought a subaru. ♪ welcome back. legislation introduced that would punish the new york police department for its controversial surveillance of americans. new jersey representative rush holt introduced legislation and has several democrats under fire. >> these muslim communities were mapped, infiltrated and surveilled simply because they were muslim. profiling is wrong. profiling on the basis of race, ethnicity and religion is a violation of core constitutional principles. >> the amendment was rejected in a party line vote and two new york republicans representatives peter king and bob turner are demanding an apology. they want an apology for the criticism against the nypd. congressman king, nice to see you. can we just be specific, you want this apology. what specifically do you want? >> first of all the nypd is the most effective counterterrorism force in the country, there's 1,000 police working day and night, fighting islamic terrorism and the threats against new york and stopped 13 plots against new york city. to have anyone on the floor of the house of representatives introduce legislation which accuses the nypd of unconstitutional or illegal behavior is absolutely wrong and the fact that the entire democratic leadership of the united states congress voted for that, voted against the nypd and voted for this reckless amendment to me they owe the nypd an apology. the politicians come to new york, want their picture taken with ray kelly and say how good they're doing and when the money is on the line they vote against it. >> this is what representative holt said yesterday, part of his statement, "history has demonstrated that profiling is an ineffective policing tactic that generates resentment rather than cooperation in targeted communities." i just want to point to something else, representative keith ellison, the first muslim elected to congress he testified on the house floor last month about specifically this surveillance tactics specifically of college students. take a listen. >> i was very proud when my son was elected president of the student, muslim student association of his college but i wondered, was my 18-year-old son subject to surveillance, like the kids were at yale, columbia and penn? he's a good kid, never done anything wrong, and i worry to think that he might be in somebody's files, simply because he wanted to be active on campus. >> simply because he wanted to be active on campus, he's concerned about his own 18-year-old. can you understand that concern, understand that perspective, congressman? >> absolutely not. first of all, keith ellison, i get along with keith ellison, he's active spokesman for the council on islamic relations, which is a coconspirator in this country. secondly it's the president's own homeland security adviser, john brennan, bob muller, director of the fbi, the director of the cia, general petrae petraeus. there's not one constitutional or legal violation anyone accused of nypd of. what keith ellison is talking about with the muslim student association, that and other groups when there's any instance or evidence at all there could be an infiltration, somebody in those ranks who is working against the united states, then the nypd has an obligation to look at the groups. this is open surveillance, this is the type of thing which is good police work and i said this before when the justice department was going after the mafia, they went to an italian social club. when they went to the westies, they went to the west side of manhattan. it's good work, entirely cleale and we're catering to politically correctness. that's why i'm saying the democratic side should alive. all of the people are alive in new york because of the nypd. >> what is your position on profiling in general? do you have any problem with it? and two, you're saying that the nypd, the problem with what happened in the house is that the nypd was criticized. is your position that the nypd is completely above criticism, and that they simply can do no wrong? it seems to me that the media has brought some pretty legitimate issues up and that it's not quite right to defend the nypd just unilateralunilate. sounds like what you're doing so could you spooned respond to th? >> first of all there is no profiling. that's the nonsense people like you and others are propagating. >> i'm not propagating anything. i'm saying there are questions raised about what the nypd is doing. >> i'm telling through is no profiling so take that back, there is no profiling. you have no evidence. they use terms like profiling, spying casually and cavalierly and you don't know what you're talking about. i'm saying it would be a legitimate criticism of the media is very warranted but to have this broad-based attack accusing him of profiling, racism, bigotry is absolutely wrong. that's the irresponsible conduct. >> i'm not saying that. >> you're passing it on as if it's legitimate. >> sir i'm saying the media is bringing up issues about profiling. >> they're not legitimate. they're illegitimate. they're irresponsible to make. >> you bring up very valid points, ryan lizzi. >> they're not valid points. they are not valid points. >> we're going to agree to disagree here. >> they're not valid. he can say whatever he wants. he's wrong. >> there you go. let me ask you about what's happened recently in afghanistan, this former member of the taliban now trying to help with the peace process, he was shot and killed in the middle of traffic. the taliban absolutely not denying responsibility but just bigger picture here, what does that say about the peace process they're trying to forge? >> yeah, it shows how difficult it is to deal with the taliban. obviously there can be elements of the taliban that we can try to deal with but it shows the hard core and leadership of the taliban does not want a peaceful agreement which i think then makes it more difficult for the president, who says we're going to leave by a certain date, withdraw troops by a certain date and that encourages more radical elements of the taliban not to cooperate and seek peace so no, t