Transcripts For CNNW Starting Point 20120515 : vimarsana.com

CNNW Starting Point May 15, 2012



the viewers may understand, it basically means that rebekah brooks and her husband, charlie, have been charged with effectively concealing evidence from the police, as they looked into phone hacking at the disgraced tabloid owned by rupert murdoch, "the news of the world." that tabloid closed down last summer but the repercussions of the phone hacking scandal continue to ripple through british society, and internationally as well, of course, but this is significant, because it's the first set of charges to be brought since the original scandal broke back in 2006, and the royal reporter, clive goodman and another were charged with phone hacking. now the ceo of the parent company, news international, and her husband and various other staff members have been charged with perverting the course of justice, concealing evidence from the police, attempting, it is alleged, to effectively cover up what was going on from the police, specifically with removing documents from the archive of "news of the world" and removing computers or disposing of computers and phones and so on that the police may have wanted to look at. >> dan rivers for us in london, dan, thank you. lawmakers there about to get their chance to investigate jpmorgan's deepening trading losses potentially even topping that $2 billion number we've been talking about the last 24, 48 hours here. this comes as ceo jamie dimon prepares to go before the bank. shareholders at the company meeting which happens today and among other things we'll be voting on, dimon's $23 million pay package, $23 million. president obama actually addressed the $2 billion blunder on abc's "the view." take a listen. >> this is why we passed wall street reform. this is the best managed banks. you can have a bank isn't as strong and profitable making the same bets and we might have had to step in and that's exactly why wall street reform is so important. >> speaking of that meeting happening today, we go straight to poppy harlow in tampa where the shareholder meeting is being held. poppy, set the scene. i imagine the pressure is high. >> reporter: the pressure is very high. shareholders haven't arrived yet, kicks off 10:30 a.m. around me you can see a host of media here, every network you can imagine and that is because this could not have come at a worse time for jpmorgan, the news of the $2 billion plus loss coming late last week the annual shareholder meeting being held, three big things when we're inside we expect to hear from shareholders. who knew what when? did jamie dimon know what was going on since he is at the helm of this bank? who is responsible for overseeing these losses. these came in a division of the bank that is supposed to manage risk, not necessarily take risk, so that went way wrong, jamie dimon in april said media reports were making basically a tempest in a teapot, saying this was not such a big deal. he has since said he was dead wrong on that. we'll expect more from jamie dimon on that today. he'll also hear shareholders voting, say on pay, that's there under wall street reform on his and other top lieutenant executive pay packages, what they have to say about that. should jamie dimon remain at the helm of the bank in terms of having the chairman and the ceo role. there are some that are fighting to split that role up and they have even before this loss, so those are going to be the three big focuses from shareholders today. i think a lot of questions about who knew what when, that's key. >> poppy, you bring up pay and i know shareholders are raising the question, what about these incentives, these big bonuses that perhaps lead to some ri riskier bets. wall street may call back some of that compensation. what are you hearing? >> reporter: they might. that is what "the journal" is reporting. any big bank in the new area of post wall street reform is doing that, looking at claw-backs. the way wall street works is that you get paid for short term gains but then those bets you made can look very bad a few years later, that's exactly what happened in the housing crisis, things looked good, they turned very sour, now there may be claw-backs, may be for some of the top lieutenants who oversaw this chief investment office that had these bets that were really hundreds of billions of dollars of insurance bets, trying to manage risk but obviously not following through on that, so that's going to be a big focus as well. i will also say expect the volcker rule to be addressed. you talked to sheila bair about this yesterday. the rule would say when it comes out this summer that banks can't make big directional markets with their own money and act like "casinos" critics would say. jamie dimon said even this move wouldn't have fallen under the auspices of the volcker rule because he says it would be economic hedging trying to prevent risks in other parts of the banks. that will be a key we'll focus on as well today. >> poppy harlow, thank you. we'll bring in democrat senate jeff merckley of oregon, a member of the banking committee and coauthor of this rule, which we've been talking about recently, part of this wall street financial reform but yet to be implemented, volcker rule goes into effect this july. good morning to you. >> good morning, brooke. >> you have a series of financial regulatory hearings. obviously you're going to be talking jpmorgan but really, what do you expect to come out of it? what will you be learning? >> well, really, the key thing will be to emphasize and understand that this sort of portfolio hedging or market hedging is not allowed under the volcker rule. certainly shouldn't be allowed under the rules produced for the volcker rule. that piece has been absolutely clear. this is the type of investing, proprietary trading if you will, hedge fund style investing that specifically the volcker rule was designed to prevent. if you want to be in the hedge fund business, great, sever your ties with insured deposits and take the big risks and the only people who get burned are your investors or your own funds but don't do it and try to be inside the banking system, where we subsidize operations and provide loans, liquidity to families and businesses. >> we talked volcker rule and all of the other entities who have been watching this. the "l.a. times" is reporting about these upcoming senate hearings where we're going to be hearing from federal reserve, the sec, securities and exchange commission and also treasury. i talked yesterday to sheila bair, former head of the fdic. she suggested the fed is part of the problem. here she was. >> i think the government structure of the fed's regional banks is a real issue. the new york fed is the primary regulator of these large constitutions, yet they have industry people sitting on their boards and that's true with the other regional banks. >> having someone sitting on the board, right, perhaps a conflict of interest, i just wanted your take on that and also just when you look at all of these different agencies and you still see this $2.3 billion trade happened, can really anything prevent this volcker rule or not? >> certainly the fed is one of the major regulators. this regulation that's being put together in draft form right now is the combined product of multiple regulators, and the fed plays a lead role. my hope is that for this to happen at this time and create this discussion that will end up with regulations unlike the draft, which go on for 300 pages of guidance, it is a result of two years of intense lobbying by major wall street firms trying to carve out loopholes, trying to expand loopholes, be it in market making, wealth management or certainly in this case portfolio investing or hedging, and so hopefully it will be a wake-up call to the entire set of regulators, saying this is absolutely unacceptable, we're going to write the clear, crisp line rule that will enable regulators to say again, if you want to be in the high risk investing business, go do it, don't do it inside our banking system. >> clear, crisp line. it's obviously very complex stuff but here is something senator merckley that people do understand, it's money and bonuses. poppy was just talking about this outside of this meeting, what's going to happen with jpmorgan in tampa, essentially shareholders calling into question the bonuses and compensation some of the folks at the massive financial institutions get. if they lose that affects the american taxpayer if these banks fail. will you be looking into those bonuses, those incentives? >> you know it may be a piece of what the banking committee looks at and certainly it's of considerable concern that bonuses are structured in a fashion it does not encourage this type of gambling, because that's exactly what the rules were designed. >> you're saying it is gambling? >> absolutely. what we saw was jpmorgan decided to sell a lot of insurance betting that the credit worthiness of companies was better than the market viewed it. they hoped to make a lot of money on this, and turned out that the credit worthiness was less than -- they were wrong and the folks on the other sides of the swaps, the derivatives, on the steals were correct, and so they had to pay out the insurance that resulted in huge losses. this is truly high-risk gambling when you're waging which side of credit default swaps you're going to play. >> finally, since you co-authored the volcker rule, we asked senator corker who said recently it might not have applied. take a listen. >> we've been in conversations all weekend with the occ, the office of currency, that basically the examiner in charge that oversees the book of business at jpmorgan, that they've been very adam ant that even if the volcker rule which the senator was referring to was fully implemented, that this would have been permitted activity. during the course of the day, we were just talking, they've altered their position and said that this is more complex than they thought, and they really want to hold off. >> senator merckley, this was so complex that even jamie dimon, a week ago, thought this would be fine, didn't realize the complexities that really it has as part of it. the regulators don't know if this is proprietary trading or not so when the head of this massive financial institution doesn't quite understand it, do you think anyone else can understand it? do you think the volcker rule would have stopped it? >> yes, it only allows drawing up insurance against specific risks. it does not at all allow this market-based risk or portfolio-based risk. the rules must be written in that matter. senator corker is right, if you take the draft rules as currently written, because of the lobbying on wall street, which created a huge loophole, then he'd be right but those rules are inconsistent with the statute as it is written. this is classic example of a large bank saying okay, we're not allowed to be in proprietary trading or hedge fund business so we will hide it, take the same traders and put them in our risk mitigation unit and pretend it's about risk. if this is allowed the firewall designed as the volcker rule that says if you want to be in a hedge fund, don't be in a bank, is meaningless. this is critical as the rules are finalized and hopefully its lesson will be taken to heart and we'll have the stable banking system providing credit to businesses and families that will help for a two or three-decade expansion as we had after the great depletion. if we don't get this right now we'll continue to have this shaky financial system and be in condition use high-risk of a meltdown. >> senator jeff jerkley of oregon, appreciate you getting up early with us. let's go to christine romans. >> good morning, brooke, thank you. france ushering in a brand new era this morning with the swearing in of new president francois holland. he's blasted austerity measures that have defined europe's response to the crises of the past two years. holland is france's first socialist president since 1995. a manhunt happening right now in mississippi. police say a killer may be posing as a fake cop, pulling people over and shooting them dead. there were two fatal shootings just 50 miles apart in the past week. the victims, a 74-year-old man, and a 48-year-old woman, both found dead in their cars on the side of the road. police in the state are actually telling people, don't pull over in mississippi if you see flashing lights. >> the things that we want people to realize if they feel like they're going to be pulled over, the first thing you do is turn on your flashers and dial 911. >> one of the convicted felons pardoned by former mississippi governor hayley barbour is facing new charges in a deadly drunk driving accident. harry bostick is accused of causing a wreck that killed on 18-year-old woman in october. if convicted he could face at least 30 years in prison. this isn't bostick's first brush with the law. he's been convicted in three drunk driving cases. he was pardoned after his third conviction, one of nearly 200 people to receive a pardon from hayley barbour. president obama explaining to the ladies of "the view" why he decided it was time to publicly support same-sex marriage. >> my justice department has said to the courts, we don't think the defense of marriage act is constitutional. this is something that historically had been determined at the state level, and you know, part of my believing ultimately that civil unions weren't sufficient. >> will you personally fight to repeal that act? >>le with, look, congress is clearly unnoticon notice that i it's a bad idea. >> we know what he feels publicly about the subject but what can he do about it? that's what many advocates are asking. >> christine romans, we shall see. thank you. still ahead on "starting point," florida and its marching band banned for an entire year after a drum major was hazed so badly, horrifically he died. we'll ask a former member whether they're doing enough to change the culture at famu. she left the courtroom in tears over the course of the trial. today john edwards' daughter, cate edwards, expected to take to the stand in her father's corruption trial. we'll go there live. and watch us live on your computer and mobile phone, whether you're at home, at work, go to cnn.com/live. you hear them, we've got our guests, and christine romans' playlist, "float on." you're watching "starting point" on this tuesday. i bathed it in miracles. director: [ sighs ] cut! sorry to interrupt. when's the show? well, if we don't find an audience, all we'll ever do is rehearse. maybe you should try every door direct mail. just select the zip codes where you want your message to be seen. print it yourself or find a local partner. and you find the customers that matter most. brilliant! clifton, show us overjoyed. no! too much! jennessa? ahh! a round of applause! [ applause ] [ male announcer ] go online to reach every home, every address, every time with every door direct mail. 14 clubs. that's what they tell us a legal golf bag can hold. and while that leaves a little room for balls and tees, it doesn't leave room for much else. there's no room left for deadlines or conference calls. not a single pocket to hold the stress of the day, or the to-do list of tomorrow. only 14 clubs pick up the right one and drive it right down the middle of pure michigan. your trip begins at michigan.org. more than 50 times a day? so brighten your smile a healthy way with listerine® whitening plus restoring rinse. it's the only rinse that makes your teeth two shades whiter and two times stronger. ♪ listerine® whitening... power to your mouth. but when i was diagnosed with prostate cancer... i needed a coach. our doctor was great, but with so many tough decisions i felt lost. unitedhealthcare offered us a specially trained rn who helped us weigh and understand all our options. for me cancer was as scary as a fastball is to some of these kids. but my coach had hit that pitch before. turning data into useful answers. we're 78,000 people looking out for 70 million americans. that's health in numbers. unitedhealthcare. welcome back. good morning. an alleged hazing death at florida a&m university will keep the renowned marching band off the field through all of next year. the university suspended them as it works to make new rules to address this hazing. the student at the center of this, 26-year-old robert champion died last november and prosecutors allege he was so badly beaten during an initiation event, remember they called it crossing bus c, 13 of his band mates face charges for his death. i want to bring in travis roberts, he was a band mate of robert champion's. i want to make it clear you're not at all accused of any hazing activities. travis, good morning. >> good morning. >> what is your reaction when you hear this band, i'm sure that you loved, so many people go to famu just to take part in this tradition, when you hear it's suspended for a year, what's your reaction? >> my reaction is that it's a great start, and that's pretty much what it is, a great start, but sometimes at some points in life we lack consistency, and i would like for us to take this year off and to revamp the laws and rules and regulations that we need to abide by within the state of florida and also on the campus of florida a&m university. one thing that we need to make sure that we create when we're creating the laws is to create laws that adhere to different organizations, because the same things they go through and endure will not be the same thing other organizations do on our campus, let alone in the state of florida. >> let me ask you before we go any further, when you were a member of the band, were you ever hazed? >> see, and that's the question a lot of people throw out and want a yes or no answer. >> is there not a yes or no? >> no, there's no yes or no answer to the actual question you threw out to me because some things that you would classify as hazing for your son or your daughter, my mom would possibly not classify as hazing or i would not classify it as hazing. >> give me an example, travis. >> do we go through some things that some people would look at as, you know, that would be kind of crazy, when we came to school, our first year we were told that we had to purchase white t-shirts and we were only able to wear white t-shirts. another thing told to me, i was able to go to three places that was class, practice, and my dorm. outside from the eateries and things like that but the extracurricular things like the mall and things like that, i didn't have time for. people would classify that as hazing. >> if you give those examples, did anyone ever threaten bodily harm to you? was anyone violent as part of hazing potentially or not at all? >> no. no, but that's, and that's not the only aspect of hazing as well, because you have the verbal abuse. you have different things that would constitute as hazing, standing at attention in 98-degree weather for 20 minutes at a time without moving, no wiping your per separation, things like that, so it's kind of hard to just answer your question and say yes, i was hazed or no, i wasn't hazed or bodily harm is the only thing that actually means hazing. >> i understand, i hear you loud and clear it's not a black and whitish uto you but because of these allegations, perhaps because of what you're talking about, you do agree that you say the suspension of this band for the next year absolutely should happen, to begin discussion, new rules, but my question to you, fear the suspension will hurt school enrollment, band members will leave the school and the president of the university said two of the biggest performances bring in $1.5 million, 9% of the budget, that's a little bit of a chunk. does that concern you? >> it does not, because the band only makes up not even 10% of the population here at the univ

Related Keywords

Courts , Justice , Conspiracy , Reporter , Language , Yes , Charlie Brooks , Dan Rivers , Latest , In London , Rebekah Brooks , Tabloid , Police , Evidence , Phone Hacking , Charlie , Viewers , Course , Well , Phone Hacking Scandal , Repercussions , News Of The World , Set , British Society , Rupert Murdoch , Charges , Another , Scandal , Clive Goodman , 2006 , Ceo , Parent Company , Members , Husband , Staff , News International , Perverting The Course Of Justice , Computers , Archive , Phones , Documents , Jamie Dimon , U S , Let S Talk Jpmorgan , Deepening Trading Losses , Number , Lawmakers , Chance , 24 , 48 , 2 Billion , 6 Billion , President Obama , Things , President , Shareholders , Bank , Company , Meeting , Pay Package , Blunder , 23 Million , 3 Million , Banks Stale , Listen , Wall Street Reform , Bank Isn T , The View , Making , Abc , Bets , Poppy , Shareholder Meeting , Tampa , Poppy Harlow , Scene , Pressure , Network , Media , Host , Wasn T For Steel Dynamic This County Wouldn , 30 , 10 , News , Loss , Three , Risk , Losses , Helm , Division , Media Reports , Pay , Shareholders Voting , Deal , Tempest In A Teapot , Role , Terms , Fighting , Top Lieutenant Executive Pay Packages , Chairman , Lot , Questions , Big Focuses From Shareholders Today , Question , Bonuses , Compensation , Incentives , The Journal , Ri , Area , Reporting , Claw Backs , Wall Street Works , Gains , Chief Investment Office , Lieutenants , Some , Billions , Housing Crisis , Hundreds , Volcker Rule , Sheila Bair , Insurance Bets , Big , Focus , Big Money , Rule , Markets , Move , Fact , Critics , Casinos , Summer , Risks , Parts , Hedging , Senate , Key , Well Today , Auspices , Democrat , Senator Merckley , Banking Committee , Part , Coauthor , Wall Street Financial Reform , Oregon , Doesn T Respect It , Thing , Hearings , Brooke , July , Series , Learning , Rules , Shouldn T , Market Hedging , Portfolio Hedging , Sort , Proprietary Trading , Type , Piece , Hedge Fund Business , Investing , Hedge Fund , People , Banking System , Families , Don T , Funds , Investors , Operations , Loans , Ties , Deposits , Liquidity , Wall , Businesses , Hearing , L A Times , Securities And Exchange Commission , Entities , Federal Reserve , Sec , Government , Problem , Structure , Treasury , Fdic , Issue , Banks , Regulator , Someone , Boards , Board , Constitutions , Conflict Of Interest , Regulation , Regulators , Anything , Trade ,

© 2025 Vimarsana