Frank on credit card tactics

[4:49] ..." who would majority. The difference come here we have financial companies like AIG. Went the other financial companies that engage in these -- to make money. But you also have to have -- to --"...

[6:18] ..." But with the Guidant correctly pointed out the credit default swaps from AIG in particular. With a single biggest problem the bill we have would totally. Regulate those in an efficient way is what it said. Almost. AIG. Issued what will -- credit default swaps which is approaching any reform of insurance. They sold them to people who owned mortgage"...

[7:13] ..." the a and they were outside the rules what happened is that. AIG issued these. Enormous numbers. Hundreds of billions may be trillions in credit default swap obligations. Against these. Mortgage securities added we know. Mortgage securities began to collapse because they were based on sub prime mortgages -- and AIG didn't have the -- paid off. And we have to get people -- them how come you have been the Pamela. Well they never thought that the mortgage securities would drop in value they were in effect like people put don't usually like recurrence and vampires. In order issuing -- interest on vampires who never die negation not to worry about paid off. What what we do want our Billy's best. Because the AIG. Credit default swaps would not with companies like oblivion while the Cabot corporation investors needed. Which could begin please let us take. For -- commercial. Risk in making a product. AIG had made -- point to deal the financial companies would -- in fact with Deutsche Bank the bill that we are hoping"...

[8:37] ..." So without any question the bill we have would have prevented the AIG -- We also by the way you have got a bill coming through that stop kind of bad sub prime -- to -- recruit agents to -- infected several ways in which we would. We we will be prevented if -- great -- but the key point is that. We -- what talking about two financial companies engaged in the manipulation that they turned out to -- AIG -- that it was there any of the financial companies. Our bill take care that if you look at the list of companies. That the Bush Administration decided that you had to be paid off when AIG wouldn't trouble W bush has taken from the Federal Reserve. The pay off the CIT. The people they own money troop. Every one of those trade. Will be covered by our bill the guys we do make 880 an exception not accept an exemption. Of people who would Kimberly in the business of hedging. Some people could well. Gotta be true that these financial companies. Don't pretend to -- these commercial companies. We accept that as legitimate point we're tightening that up. But I can guarantee that you look at our bill and you look at AIG. We have totally control what AIG did an AIG or any it would company would not be allowed to do that the future."...

[9:54] ..." The engines were quickly. Isn't it true that for example AIG did business with Goldman. A Goldman's having record profits and big bonuses are coming and they're fully beautiful -- protected there have"...

[10:21] ..." dealing with it. One of the things that was it was the Federal Reserve Bank which has power and oil frankly could take from a rule does section thirteen three of the Federal Reserve back. That the Federal Reserve stepped in and make payments to individual companies like Bear Stearns -- geeks are built will prevent that. The Federal Reserve will no longer have the power to step in and sale of individual company. But he is also the problem too is"...

[11:10] ..." know we would pay off the Bush Administration leadership secretary Gregg Olson. Federal Reserve Chairman Bernanke came to congress and told but they didn't ask. That they will really give money under the Federal Reserve that was pay off people like Goldman -- from AIG. And it -- cause. Failure of Lehman Brothers threatened to. Kill the whole financial system so. They didn't pay of anybody in"...

[12:04] ..." more than ten billion dollars in assets. No one would have prevented AIG situation from a writing. First by stopping the bridge sub prime mortgages that they would. Secondly by saying that it -- insurer and mortgage from another financial company Geico check. It can't be done with a promise with nothing behind it but that we -- an exchange words. Fully backed. Idea enough money to pay off. And finally defeat it if all else fails to make that. We can put the -- that mystery one of these of that now is that people know AIG got the money to pay up credit and continued as an operation. In this country that would be the case if you"...

[13:11] ..." quick to give him credit which put into the law -- Chris Dodd. And he's restricted depended to let these companies. Got money from the federal government under the TARP program but -- said when"...

[4:44]" Well I think there who -- spread to all I would've liked to -- but we do have to get -- who would majority. The difference come here we have financial companies like AIG. Went the other financial companies that engage in these -- to make money. But you also have to have -- to -- you if you are a manufacturer. -- an airline. If you're 8888 former. U wanna concentrate on making a product. You don't want to -- do have to take into account. Fluctuations. In interest rates -- currency. So it would get a YouTube derivatives is to say which airlines what -- set -- prices based on a fuel prices such and such. If the fuel price would go way up. We don't want have to raise ticket prices wouldn't reflect buy insurance against the fuel prices going up that's the derivative. Or of people have. -- and that to get you to we have said that's okay and I will give an example for -- on one of the largest -- in Massachusetts is the committee didn't. A corporation which makes medical equipment that they're basically midfield master in my district I've been there two worldwide company with thousands of employees and a large number of boys semester and it. They -- We are trying to price our medical devices. Based on supply demand etc. we do use derivatives to hedge against. Volatility. That that could affect us in can -- we can't control. That's what we have that won't be forced to go on 88 an exchange -- they will make the price available. But with the Guidant correctly pointed out the credit default swaps from AIG in particular. With a single biggest problem the bill we have would totally. Regulate those in an efficient way is what it said. Almost. AIG. Issued what will -- credit default swaps which is approaching any reform of insurance. They sold them to people who owned mortgage backed securities. And they said it -- mortgage backed securities. Goes down in value. We will pay you the difference. Well they put to the mortgage backed securities would never go down in value that they Chicago leaving current policies. Without adequate reserves because there was no war no rule that said they had to have the capital. -- in -- like insurance. Car insurance homeowners insurance. The statement current commission to make sure the -- companies have the ability to pick you up. But with the credit default -- there was no such rule because there weren't device and the a and they were outside the rules what happened is that. AIG issued these. Enormous numbers. Hundreds of billions may be trillions in credit default swap obligations. Against these. Mortgage securities added we know. Mortgage securities began to collapse because they were based on sub prime mortgages -- and AIG didn't have the -- paid off. And we have to get people -- them how come you have been the Pamela. Well they never thought that the mortgage securities would drop in value they were in effect like people put don't usually like recurrence and vampires. In order issuing -- interest on vampires who never die negation not to worry about paid off. What what we do want our Billy's best. Because the AIG. Credit default swaps would not with companies like oblivion while the Cabot corporation investors needed. Which could begin please let us take. For -- commercial. Risk in making a product. AIG had made -- point to deal the financial companies would -- in fact with Deutsche Bank the bill that we are hoping to be made in the law says. If they originate contract. Of this sort between two financial companies as it was with -- all the bay -- company. They cannot -- Doesn't without capital to back them up then must be traded on an exchange like any stock exchange and if you trade on an exchange it's gotta be fully financed. So without any question the bill we have would have prevented the AIG -- We also by the way you have got a bill coming through that stop kind of bad sub prime -- to -- recruit agents to -- infected several ways in which we would. We we will be prevented if -- great -- but the key point is that. We -- what talking about two financial companies engaged in the manipulation that they turned out to -- AIG -- that it was there any of the financial companies. Our bill take care that if you look at the list of companies. That the Bush Administration decided that you had to be paid off when AIG wouldn't trouble W bush has taken from the Federal Reserve. The pay off the CIT. The people they own money troop. Every one of those trade. Will be covered by our bill the guys we do make 880 an exception not accept an exemption. Of people who would Kimberly in the business of hedging. Some people could well. Gotta be true that these financial companies. Don't pretend to -- these commercial companies. We accept that as legitimate point we're tightening that up. But I can guarantee that you look at our bill and you look at AIG. We have totally control what AIG did an AIG or any it would company would not be allowed to do that the future."

[9:54]" The engines were quickly. Isn't it true that for example AIG did business with Goldman. A Goldman's having record profits and big bonuses are coming and they're fully beautiful -- protected there have been immunized. They'll get paid even though the taxpayers are solely those that was."

[10:09]" But yet that was a decision made by the Bush Administration in late this year elephant be dealing with that in an another level the bill that would -- There are several hundred no deal with this. Multiply we have several ways of dealing with it. One of the things that was it was the Federal Reserve Bank which has power and oil frankly could take from a rule does section thirteen three of the Federal Reserve back. That the Federal Reserve stepped in and make payments to individual companies like Bear Stearns -- geeks are built will prevent that. The Federal Reserve will no longer have the power to step in and sale of individual company. But he is also the problem too is that if a bank fails. We expect -- rules for putting that bank get a business and waited don't. It was great problem you can decide how to winded down. There's no such set of rules for non bank financial companies so what touched up this crisis people think back to September of 2008. First Lehman Brothers failed and they would totally bankrupt you know we would pay off the Bush Administration leadership secretary Gregg Olson. Federal Reserve Chairman Bernanke came to congress and told but they didn't ask. That they will really give money under the Federal Reserve that was pay off people like Goldman -- from AIG. And it -- cause. Failure of Lehman Brothers threatened to. Kill the whole financial system so. They didn't pay of anybody in Lima but as they thought okay now we're gonna pay up anybody they like eight. One talk about legislation that would dealing with now will be to say no you don't have to make that choice. You don't have to pay up either everybody in nobody you can essentially saying wipe out the shareholders can fire the people who run the company. Didn't pay off. Only those creditors that it's necessary to prevent crisis and finally this is most important. The money to pay the -- not gonna come the taxpayer is -- come from he -- all financial companies that more than ten billion dollars in assets. No one would have prevented AIG situation from a writing. First by stopping the bridge sub prime mortgages that they would. Secondly by saying that it -- insurer and mortgage from another financial company Geico check. It can't be done with a promise with nothing behind it but that we -- an exchange words. Fully backed. Idea enough money to pay off. And finally defeat it if all else fails to make that. We can put the -- that mystery one of these of that now is that people know AIG got the money to pay up credit and continued as an operation. In this country that would be the case if you got to -- that federal money stepped in and it will be taxpayer money it will be money from the bank. Its deficit."

[12:52]" And they had at that point had -- to make and abolish it in orbit just before we broke for the east's number the house passed -- bill that would restrict these payments in Kuwait. And for everybody but it would not just. Companies that got the money from India. The TARP program you know Ken Feinberg appointed to deal with that -- authority quick to give him credit which put into the law -- Chris Dodd. And he's restricted depended to let these companies. Got money from the federal government under the TARP program but -- said when he got TARP money and not. -- shareholders have to give their opinion. On the play and we believe we shall hold it will not vote. To ratify. Some these huge settlement where most of the money taken by the company. Get paid out in an incumbent -- into the top people speculate and nothing -- be held -- that's going to be a mandate secondly. We have. Ordered all the federal regulators in the -- the people become law. Took bid and the kind of policies that help us get to this problem could get what they kept bonuses where if you take a brisket -- off and make a lot of money. If you take a risk and it doesn't pay -- money you breakeven."