remember this economic crisis, the collapse of lehman brothers, mid september 2008? the economy was in free-fall. stocks tumbling. the great recession was hitting with full force. and millions more would lose their jobs. well this week, a survey of consumer confidence posted the biggest weekly drop since then, since lehman went bust. about three times as many people now say the economy is in poor shape as those who say it's doing well. you can thank washington for that. for other stories, give me 60 seconds on the clock. it's money time. ♪ >> raising children is more than just a daytime job. parents are happy 35% of the time caring for kids and feel the same way 19% of the time at work. there will be no women on twitter's board of director when is it eventualitily goes public. all seven members are male. the lack of female leadership is a problem in silicon, but google, and others have one at least female member. starbucks is giving akwa free cups of coffee this week. if you bought a cup for a friend, starbucks gave you a free one in return. >> have a good day. >>

brothers have been in a little bit of chaos recently and i'm not saying that we have a lehman brothers situation just yet but we have the makings of it right and actually fitch one of the major rating agencies and we all know there is good. is there they are they recently put u.s. debt at what is this negative watch quote a negative watch and it's reminiscent of when s. and p. they outright downgraded u.s. debt in two thousand and eleven to what was it a plus big a big a little anyway they don't simply did great it in two thousand and eleven get the markets pick up at that point so what are the long term consequences of all of this because there has to be long term we're looking at the short term now but no one really can of forms that i mean just imagine that story about the boy who cried wolf how many times can congress kick this can before the market catches up with them well we saw here recently was something unprecedented there's something called the ted spread the euro dollar spread another short term funding market indicator that went negative for the first time ever so eventual

liz: level three you are getting into lehman brother territory. number two, you are basically comparing assets out in the market where you would hope would give you a cash position. we should also mention that they are sticking up for you guys. >> one we did release by account. it shows what interest rate we are earning. liz: i am looking at more than $200 million. >> we are actually looking at 300 million. we had to investment banks independently audit and certified our cash balances in the last 24 hours. liz: can i ask you who those banks are? >> we cannot disclose them. liz: why can you not disclose them? how come? >> we have to get there permission. liz: they ought to be in a little bit of panic about this. >> they are standing right by our side. you asked in term of business, how our business functions. obviously, our business on a security side -- liz: are you going to sue muddy waters? carson just said bring it on. he is a lawyer. he, i assume, is not just talking bold. he has great evidence that will come out in discovery. >> if we choose

you didn't rescue lehman brothers. it set off a worldwide panic when it went bankrupt, and i wonder, looking back, whether you think that was a mistake. >> there were many people who said, "let them fail. you know, it's not a problem. the markets will take care of it." and i think i knew better than that, and lehman proved that you cannot let a large internationally active firm fail in the middle of a financial crisis. now, was it a mistake? it wasn't a mistake for the following reason. we did not have the option. we didn't have the tools. the federal reserve cannot put capital into an institution. all we can do is make loans against collateral. >> the day after lehman, bernanke's fed did something astounding. it loaned $85 billion to a company that wasn't a bank at all, american international group, the global insurance giant that was also involved in backing risky mortgage investments. bernanke says unlike lehman, the fed could make the loan based on good collateral in a.i.g.'s portfolio. there have now been four res

a lehman moment. >> potentially a lehman moment. call it whatever you want. i think it is an important event, yes. >> do you agree? >> at think we are underestimating the risk. it has always been assumed that treasuries are risk-free. an actual default of the u.s. treasury debt is unprecedented, and nobody is exactly sure of what the consequences will be. which is why the international monetary fund and the heads of all the major banks, the head of jpmorgan chase, warned about this risk. we don't know the consequences. the consequences are probably far more severe than what we are talking about here. >> but so far, the markets have not panicked yet. do they think that everything that is happening on capitol hill is grandstanding and they will pull a rabbit out of the hat at the last minute? >> the market does tend to believe that some solution will arrive before thursday, because there must be a solution. because the consequences are so great. i disagree that the markets have not reacted. we have seen

the one i remember most vividly was after the collapse of lehman brothers. we started to see a cascading effect of markets seizing up. banks would not lend to each other. there was no liquidity. hank paulson, the treasury to ask for ame in meeting with the president and his senior advisers. him thelson had with chairman of the fed, ben bernanke and the president of the new york fed, tim geithner. we also had the chairman of the securities exchange commission present and a couple of other officials. it was at that meeting that hank paulson asked the president for authority to go to congress to request what turned out to be outt $1 trillion in bail money for the banks. to use it for other assets but it was used to inject equity into a lot of trouble institutions. for a goodking thing solid republican president to be confronting is the treasury secretary coming in, saying, we need $700 billion or $800 billion immediately from congress in order to use that money to rescue banks that are failing. this was one occasion where the president made a decision on the sp

>> probably the immediate aftermath of the collapse of lehman brothers. there's an ongoing cascade of traumatic events that led up to that. but in mid september, over a weekend, lehman brothers, despite our efforts, i say our -- i mean the efforts of the treasury and of the fed to -- to put together some kind of rescue for one of america's big and venerated investment banking houses, that failed over a weekend. and as the week opened, lehman brothers declared bankruptcy and folded. abruptly. and i think that was -- that was the first moment that i at least felt that the wheels of the bus might be coming off. >> do you remember what the president said to you at any time and how you got involve in dealing with the crisis? >> you know, i don't -- i don't remember what the president said immediately at that moment. but there were several moments during the crisis when the the president would take in all -- all of the advice he was getting. chew on it, reflect on it. and in those kinds of circumstances, he rarely made a decision immediately on the spot. he wou

remember what the lehman collapse did? republicans in congress increasingly say they are not worried and that apparently is starting to worry the president of the united states. >> i want to talk about this for a minute because even though people can see and feel the effects of a government shutdown, they're already experiencing it right now, there are still some people out there who don't believe that default is a real thing and we have been hearing that from some republicans in congress that default would not be a big deal. so let me explain this, if congress refuses to raise what is called the debt ceiling, america would not be able to meet all of our financial obligations for the first time in 225 years. now the last time that the tea party republicans flirted with the idea of default two years ago, markets plunged, business and consumer confidence plunged. america's credit rating was downgraded for the first time. and a decision to actually go through with it, to actually permit default, according to many ceos and eco

>> i would say, i defer from james in that last time he said this isn't lehman brother, lehman brothers was the last remaining of the weakest investment bank after bear sterns and shouldn't have triggered a global recession. the government of america missing payments is i think substantially more serious than lehman brothers. there were a bunch people in a room on september 14th, 2008, ben enter knack i.henry paulson, tim geithner who were smart people who thought the failure of lehman brothers wouldn't have a particular impact and it froze credit around the world and sent us in to a major recession. i think it's dangerous and james knows much more about economics than i do, but i think it's dangerous to put out there that this is just not of any particular major consequence. we just don't know that it is or isn't. why don't we say that it could be so downtown do that. we don't know if you run in to the middle the street you are going to get hi hit by a car but that doesn't mean you run in the streets you prevents yourself from doing. >> even last time when we flirted with default poor

it's much bigger than lehman. i don't know, people say it's ten times bigger than lehman. give me a break, it's hundred times bigger. i've been adamant a long time saying we will come down a lot more going into october 17th, they were supposed to run out of money and unique cash on hand for your stock portfolio as we have in my charitable trust. we did not put any money to work here. i've been saying once we got past halloween, we're in stress mode where real businesses get hurt. today we heard the president say that we could have a very deep recession. his quote, if we don't get a deal and the deal has to be done by october 17th. he moved up the goal post back to where it was and made it clear that business could be crushed by a default if we go back over those goal posts. here's my bottom line. president created some urgency today. without the market coming down much more from where it is, that urgency doesn't yet have the gravitas needed to get something done. to me, that means more pain ahead. fortunately, the economy's stronger than the last political crises and the o

that's a lehman brothers style event. "west wing" aside we probably would see a global fallout from that. >> we have chris voss, crisis negotiator, and i can't tell who is at war with who. if it's the democrats and the republicans, if the democrats are the republicans are at war with each other or just exactly what's happening there? >> it's all of the above. part of the problem people aren't talking. there isn't a back room negotiati negotiation. there hasn't been a normal prenegotiations before we went to this crisis because trust is so broken in washington. so that is a fundamental problem. you know, boehner can't control his caucus. when he tells his own members or business that don't worry, we're not going to default, well, these are a lot of the same leadership who did don't worry, we're not going to have a shutdown. there's a trust cries sglis you said two words. credibility and trust. so you're in a situation like this and neither have either, that causes a real problem when you're trying to stand things down, doe

the only other time it hit that number was the lehman great recession. does this tell us we are in a great political depression? >> arguably, last month it was 62%. that's not happy days are here again. we have been in that for a long time and for all of us it is not just a 78%. it's the increase and a lot happened in the country in the 25 years we have been doing the survey. to have that drop that quickly over this event, i think it magnifies what bill said how stunning this is. >> we did word clouds. we asked people to give us their descriptions of how you think each side is handling this budget standoff. let me put up the president's word cloud. the biggest word that pops out is poorly and the second biggest is standing strong for what he believes. >> i think poorly reflects on everyone in washington by the mere fact that we have a shut down. that doesn't make anybody look good. as you referenced in the poll results, there is a sense right now, a strong sense that the republicans are doing this more for politics than principal. therefore the president

m g r occurring in early in the early in the crisis in two thousand and seven when those firms fail lehman is a good another good example there's a baker's exam report that lays out very very clearly what happened they get investigative powers that are much more difficult if you're trying to do it through a court and even with those breadcrumbs like that that very simple trail that points to culpability like the lehman bankruptcy examiner report pointed to culpability of the executives even of ernst and young audit for prosecutors the as the see the department of justice they're reluctant to take the firms down because they're so imbedded in the operation of the government deloitte who we've been talking about also audits the fed also audits blackrock and blackstone you know girl parts of what the federal government the u.s. had to do to try to recover buying assets for from. the director the crisis in the tarp program and other programs to try to recover from the crisis so they need these audit firms because they're working for the government while they're working for private companies an

m g r occurring in early in the early in the crisis in two thousand and seven when those firms fail lehman is a good another good example there's a baker's exam report that lays out very very clearly what happened they get investigative powers that are much more difficult if you're trying to do it through court and even with those breadcrumbs so that they're very simple trail that points to culpability like the lehman bankruptcy examiner report pointed to culpability of the executives and of ernst and young audit for prosecutors the as the see the department of justice they're reluctant to take the firms down because they're so imbedded in the operation of the government deloitte who we've been talking about also audits the fed also audits blackrock and blackstone you know girl parts of what the federal government the u.s. had to do to try to recover buying assets for from. the door after the crisis in the tarp program and other programs to try to recover from the crisis so they need these audit firms because they're working for the government while they're working for private companies an

government. >> worse than lehman brothers and great recession by the failure of lehman brothers. >> it would be worse in my judgment and i think it's needless. >> because congressional and political leaders should be acting. >> we have a budget system that is unlike any other budget system that i'm familiar with. we have spending and revenue measures that have orange nalted from an original act in congress. now it's a question of funding them. the spending has already been approved, but now the elected officials are balking at funding that spending. >> all right. a sober warning this morning. john chambers, thank you. >>> and if the debt battle wasn't going on right now, this story would be dominating the news. the rough start to obama care. it has been more than two weeks since healthcare.gov went live. people out there too. s jan crawford is on capitol hill. good morning. >> reporter: good morning, norah. good morning, charlie. rough start is an understatement. we can't even find anyone who's enrolled. "the miami herald" is now calling them urban legends and now on capitol hill cbs n

right after the lehman brothers bankruptcy that's when the short term funding market dried up and banks brokers and hedge funds alike all scrambled for cash except for goldman sachs of course as explained by c.e.o. lloyd blankfein in two thousand and nine. the money. which you understand how that occurred and everybody was asked to do it explain you didn't want the money in other words so you're saying it wasn't helpful at the time i didn't realize it was so pregnant what mr blankfein didn't count on was the freedom of information act bought by bloomberg to the supreme court which would eventually reveal the exact amount of federal reserve money goldman received which was in addition to tarpon f.d.i.c money now here we have a graph that shows goldman borrowed as much as sixty nine billion dollars from the fed during the height of the panic and it's the same story with j.p. morgan city and the other usual suspects. now of course no one wants a repeat of that so regulators at all levels have proposed various measures to strengthen the balance sheet of your favorite too big to fail bank th

stock market under pressure as people worry about the ripple effects of the lehman bankruptcy. >> all of this fallout from what happened last night in new york. as lehman brothers filed for bankruptcy protection, just after midnight. >> this is one of the ugliest days i have ever seen in my career. >> unfettered capitalism can breed corruption. we're seeing teddy roosevelt's words come true. >> they're calling this the biggest breakup since the great depression. >> we thought we would take you back to the good old days of news when days weren't so good. since the collapse of 2008, we have made remarkable progress, thanks to president obama and the democrats who have passed a lot of stuff to help us get to 42 straight months of private sector job growth, with no republican help. 7.5 million new jobs created. the automobile industry saved. 370,000 automobile industry jobs have been created under president obama. the housing market, where is that? it's finally making a comeback, according to a new study. the market is running at 85% of normal activity. foreclosures are down 34% compared

lehman was lehman. so there is an argument out there that the u.s. government said to jpmorgan if you guys buy bear stearns we'll be lenient with you in terms of lawsuits about the mortgage-backed securities. bear stearns purchased. there's an argument the u.s. government is not being all that lenient. on the other hand, this is not just one suit. jpmorgan is under attack here for a lot of different things that various elements and operations of its business did wrong. so i think there is a bit of a message being sent here that banks can't keep operating as if these prosecutions simply are a cost of doing business which is to say being lawless to a certain degree is simply a cost of doing business. a suit, a settlement of this size is kind of a shot across the bow to say, you guys actually have to begin playing by the rules in a more serious way. >> let's talk about that, jake in terms of playing by the rules. jpmorgan has other recent settlements of note. 2012 to 2013. $1.8 billion for illegal foreclos

[laughter] but the fact is, you know, they got cavalier about lehman, and they paid the price. they're certainly not going to get cavalier about the u.s. debt. liz: you know, teddy is right. let's take a look at the dollar because it firmed up just slightly although still very much on the defensive against most major currencies, right, phil? >> yeah. 80 is kind of this line in the sand on the dollar. you have short-term traders buying it, reselling it higher, but if we do face in this, you could see a big washout in the dollar index. this thing could slide down to 78. you'll see all the foreign currencies spike up for that, you know, currency shift overseas. liz: great to have you both. great perspective. so here's what the traders say. now what do federal reserve members say? the philly federal reserve president, charles must haver, says the fed's credibility has been undermined, but what does he think about the fact we're now facing a potential crisis? we've got an exclusive interview with charles plosser, it's also about the risks to the economy from the debt ceiling fight.

>> in the lehman bankruptcy, for example, you had a very knowledgeable and experienced former federal prosecutor, tony bilukas, who gave prosecutors a roadmap of all of the criminal and unlawful actions that led to the lehman meltdown and yet there has not been a single prosecution of any of those individuals. dennis: and you think that the guys dropped the ball, versus they looked into it and didn't find anything criminal? >> i don't think they dropped the ball. and i think people looked and looked hard and i think they got the wrong answers. >> wallace, one last question, got to wrap then. wouldn't you agree though that all these fines, $13 billion on jpmorgan, even more for missing madoff, it is shareholders and hurting pension funds holding the stock? how is it really teaching the bank a lesson? >> let's look at this way, if the bank, if my sort of concern about the corporate culture of jpmorgan is true, i think perhaps even in the long run, in the long run, if that, if the bank can be more focused on compliance and doing the right thing, i think in the long run it could very well

. >> guest: day happens to be true lehman brothers was around when i did 50 years. bear stearns over 80 years. disappeared. gone. just like that. universities, its institutions it will be a mess there are too many people running up too much debt in somebody has to pay it in the end. >> host: is in singapore more highly regulated? >> guest: no no. with the economy is one of the most open and free economies in the world is now a gets the bad reputation you cannot even chew gum he can't -- you can buy it you cannot spend it on the streets or put it under the of bus seats they don't like that if you ever go it is a very clean nation in a like people throwing garbage on the street or spitting. >> host: doesn't have its own currency your federal reserve system? >> nearly every nation does these days it does have a central bank because it is 5 million people it doesn't have the influence of world affairs such as the united states now it has been the most successful country nobody has done as good a job as they have and they had huge reserves but no matter how influential o

the instruments that were coming out of bear stearns, lehman brothers, things like that. he is the person to be speaking on this issue. you just heard terry duffy say they will be lasting damage to the u.s. because of the protracted impasse of washington. even if we get a deal today or tomorrow, we may not be out of this yet. twitter's decision to list on the big board instead of the nasdaq is a huge win for the new york stock exchange. is it a game-changer? does this now force other companies to say i will go with the nyse instead of the nasdaq? we will see if it can regain its strength. when we made our commitment to the gulf, bp had two big goals: help the gulf recover and learn from what happened so we could be a better, safer energy company. i can tell you - safety is at the heart of everything we do. we've added cutting-edge technology, like a new deepwater well cap and a state-of-the-art monitoring center, whe experts watch over all drilling activity twenty-four-seven. and we're sharing what we've learned, so we can all produce energy more safely. our commitment ha

with lehman you didn't think there would be a problem with a major wall street investment firm, and when they decided to let it collapse on a sunday night, all of the people around the table, they didn't think the world's reaction would be as harsh as it was. so all of a sudden monday morning comes over, and nobody in the world will lend money to each other. interest rates skyrocketed. and that was an investment bank. so there is certainly some thinking that a default by the government of the united states would be more serious and could trigger some sort of worldwide credit crunch. now that's not clear that a credit crunch becomes a recession, but it did the last time we saw one. >> in 2011 we remember the credit took a real hit, but interest rates didn't go up. could that happen this time? >> that's the other side. some way two years ago interest rates kind of stabilized. here is the difference, two years ago europe was a mess. and the euro is the only challenging to the u.s. dollar. europe is still in rough shape, but it's not volatile the way it was two years ago, so there is some th