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Executives from Goldman Sachs are preparing to head inside about what have faced with a congressional panel regarding civil fraud charges Bible -- says.
It has emails that prove it was not try to deceive investors do.
Email -- really Apple Store or destroy the case against Goldman and what role will the case play in the final version -- financial reform joining us out.
Lynn Turner former chief accountant at the securities and exchange commission and currently senior advisor managing director at LE CG wonderful to have you were glad.
That -- -- here because you've dealt with these types of situations.
What did you see from what has been released as far as these emails are concerned does -- help or hurt the case against -- You know I think the emails that have been put out there by both sides both by Goldman and the senate.
Do really raised questions more than answer those questions.
And I think it's it's really a toss up it's very difficult to understand.
-- who is right -- who is wrong because some of the emails are inconsistent.
With one another.
So it's very difficult to really understand how this thing's gonna play out over time -- it's it's play.
Out in the context of course of the debate over financial regulations I know you and some colleagues some.
Well connected friends read information about how the market works came up -- A list that you don't see as as comprehensively.
Put in place with this regulation -- this new re regulation -- one of that.
Points on your list is Fannie and Freddie those two.
What we used to call these -- these enterprises government enterprises really aren't dealt with -- all in a financial regulation reform bill how should they be.
You know I've been inside both of those institutions.
Helping the government with investigations.
And they just have some very very serious problems that expose.
The tax payers to hundreds of billions of of losses I really think they've got to go back.
And and take a look at change in those institutions if not doing away with the GE SC's.
And finding a new way to to how people get into homes we all -- to -- -- but the way these two are doing it.
Just exposing the taxpayers -- hundreds of billions losses doesn't work.
And -- daily grind it out and get this problem fixed.
You know whether or not to privatize them or perhaps some type government sponsored agency I -- a matter of public policy.
-- I prefer to see it move closer to the privatized.
Thing with some type -- by government support.
Right now they have become so political that the way they operate they just cannot function.
Without exposing us to large losses which is quite frankly why they need to go at this point dying.
-- we're gonna bring in Charlie Gasparino to the conversation here he's been working the phones have been looking at the entire.
Situation here what is the latest from where -- -- Charlie well I mean tomorrow -- The latest on the on the Dodd bill is that no one knows where -- -- really well right now I mean I I think you know I speak indeed the people late.
Late Friday and Shelby is still up in the -- I think there's a good chance it could be deal.
I think one of the problems as you guys because -- talk about is did you -- there is nothing in this bill and correct me if I'm wrongly and.
That addresses the -- as as an issue going forward I mean you know are we gonna bring him back it sounds like we're bringing them back slowly but surely.
But in this bill does nothing to prevent -- prevent prevent us from.
Once again endorsing a business model remember what this was this was part partially privatize and you -- the it was upon usual public companies.
That was supported by the government.
And by the way -- -- defaulted on if the G -- he's defaulted on the debt.
A lot of people would take that as a default of the US government so I mean why this is something Maryland this is a big -- the fact that they that they haven't addressed the GS -- and I can tell you.
But senator Shelby staff that's the Republican on the Republican side.
Is really concerned about that now will that be a sticking point ultimately I don't know but I can tell -- think it is right now.
Chart a year you're spot on right with everything you say as usual.
And there is nothing in the bill whatsoever.
They are gonna fix some part of that's political because he's Kennedys have given a lot of money to politicians in the past and.
We'll see if this is becomes a sticking point with us senator Shelby -- if I can tell you that as of late Friday and over the -- -- I was token people.
Close to close to the senator and they were concerned about the GS he's not been addressed in this in the including too big to fail by the -- Its interest in how too big to fail is being defined in this current bill there's nothing specifically that says -- Too big to fail remains but the way companies get unwound.
Under this built for example the way I understand that certain.
Bond holders are protected under this -- the bailout fund can bail out bond -- now think about certain credit.
If a bailout fund is the fifty billion dollar I've called -- a slush fund and now a lot of critics I keep -- might get it all these other corporate like all -- liquidation -- OK but look let's just be clear here and this is what I was told is what I've read some of this stuff and I'm not a lawyer so I don't.
I don't I don't understand everything but when when -- come down to it.
Under this bill.
Dozen people that -- these Wall Street firms money can somehow be bailed out.
Okay that fund that that fifty Billy -- used to bail -- the -- the bondholders.
If that is the case that is a back door way of of sort of institutionalizing.
Too big to fail because if creditors.
Know that they're gonna be bailed out they will continue.
To lend to an institution ad nauseam I don't care if they're taking too much risk you don't care they're playing -- as a -- mop up markets they don't know about.
So in that case it's a back door way.
Of instituting too big to -- One of the things not just to say the qualifying because you know -- polls out that show.
Of all the things the American public.
Don't want as far as government involvement is concerned here they do they want financial regulatory reform -- there's some question as to whether the US is pushing too quickly for this.
Or that we've gone too slowly that it's been fifteen months since the financial crisis really began what do you think.
I think it is time to move forward I think we got a lot of information.
I wish it was coming a little bit later after the senate.
-- completed its investigation and senator Carl Levin's committee has the information he is finding I think would.
Much better inform the legislation in the senators they moved forward so which state slow down a little bit.
And wait for that information to come to light and then move -- we've gone through.
Two years so.
Tremendous -- people here.
We shouldn't just be waiting for the jail awaiting legal Clinton without waiting for the -- -- -- we are actually -- the senate is having a really good debate about -- a really sort of interesting debate.
About the notion of too big to fail and wild wildly government does get some support from the public in terms of instituting reforms the public is.
Very skeptical of the government itself right now and the notion that a big bank can be bailed out it is certainly the let me ask you this.
The -- do you support the notion that creditors get bailed out by the slush fund.
When I I certainly don't.
I certainly don't -- -- I think that creditors should be treated just the same way they would be at this thing was put into bankruptcy.
And in that case you don't bail out the creditors you know certainly.
Especially the unsecured creditors take big losses and there's no way.
The bondholders should be bailed out.
With taxpayer well that's -- money I -- I believe I believe those senior senator Shelby staff believes that's in there written a certain way and I'm down if it's there we're going to be chewing that over for sometime to come Lynn Turner Charlie Gasparino good to see you both.
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