about a physical object. but this was a trade. a trade gone terribly bad. dimon said he didn't know how bad the trades were until late april. but you know what's amazing about this? major financial media knew well before jamie dime on. on friday, april 6th, the "wall street journal" reported on a trade so big the entire debt market was affected. and the next monday, this aired on bloomberg television. >> now for the biggest story on wall street. in a world where the volcker rule is supposed to stop banks from making bets with their own money, what is a jpmorgan trader in london doing with positions as big as $100 billion? >> what were they doing? well, dimon asked his lieutenants and they told him these press reports were a whole lot of bunk. and dimon trusted his lieutenants. then, april 13th, dimon took on analysts on a company conference call, shooting down questions about the out of control trade. >> it's a complete tempest in a tea pot. we do complex things but at the end of the day that's our job is to invest that portfolio wisely and intelligently over a long period of time to earn income and offset other exposure that we have. >> days later, he learned the truth. that trade, no tempest in a tea pot, a real tempest. could cost jpmorgan up to $5 billion. and on capitol hill today when dimon was asked about that now infamous tempest in a tea pot comment, he didn't make an excuse. >> when i made that statement, i was dead wrong. >> dead wrong. he was very direct and said he was sorry. but here's the problem. apologies aren't really what we need. this doesn't add up. the ceo of the biggest bank in the united states of america should have known. and since he didn't, it seems clear that his bank is too big to manage. jamie dimon's bank is about 50% bigger than it was before the crisis of 2008. its assets, $2.3 trillion. that's trillion with a t, and it's 15% of the size of the entire american economy. part of the reason for this is actually a little bit ironic. jpmorgan was the strongest big bank when the crisis hit, so regulators pushed it to bulk up, buying failing institutions like investment bank bear sterns and mortgage giant washington mutual. the bottom line, jpmorgan got bigger and bigger and bigger, and it wasn't alone. bank of america was pressured to buy investment bank merrill lynch and horrifically troubled and failed mortgage lender countrywide. america's biggest banks have gone from too big to fail to too big to bailout. the current trading loss of a few billion dollars is a wake-up call. what if the loss were big enough to threaten the nation's biggest bank and, therefore, the american financial system? think about it. the only thing worse than having to bail out a bank again with taxpayer money might be not being able to bail out a bank with more than a trillion dollars in hard-earned american deposits. it could make the 2008 crisis look like a vacation. joining me now is stephen moore and william cohen. a lot of studies on banks like lehman brothers and how they fail. let me start with you, william. what can we do here? in a sense this is a rather damning indictment, isn't it, of whatever you think of dodd-frank or other reforms, it doesn't appear that they would be able to stop a major bank from major systemic losses. >> you know, erin, your analysis is spot-on. i mean obviously they look to jpmorgan to buy bear sterns, to buy washington mutual because it was the strongest u.s. bank. now it's gotten so much bigger. in fact part of the reason that we have this crisis or this $2 billion -- or not little, $5 billion trading loss in jpmorgan is because they had so much excess cash of deposits that jamie dimon said they got through in part washington mutual, that they felt the need to invest that money. they can't make any spread on that money because interest rates are so low due to fed policy so they began taking a whole bunch of risks and nobody knew about it. >> let me just ask you, stephen moore, this is a tough one. jamie dimon addressed this issue of too big to fail. what he said today sort of surprised me. here it is, i'm going to get your reaction. >> we have to get rid of anything that looks like too big to fail. we have to allow our big institutions to fail. it's part of the health of the system and we shouldn't prop them up. we have to allow them to fail. >> he continued to say, stephen moore, that big dumb banks should have big bankruptcies. but the problem is when you are that big of a bank, you are the whale. you can't let the guy fail. >> yeah, this is a big problem, erin. as you know, i'm a big free marketeer but even i'm rethinking my position on whether banks have gotten too big. and the reason is one of the dangers of what we did back in 2008 and 2009 when we bailed out all of those big banks is we created this what we call a moral hazard problem. there is a perception in the market, there is a perception of shareholders and depositors that these banks have gotten so large they have a safety net underneath them. that's one of the things that unfortunately encourages these kind of trading activities. you know, erin, i'm not sure what the best solution is. maybe it is, and i hate saying this, but maybe you do have to break up some of these big banks so they don't get so large, a, that we have to bail them out or b, even worse, the federal government doesn't have enough money to bail them out because they have gotten so large. >> this is the frightening thing about it. one other thing jamie dimon said today is this is an isolated incident. i heard that and all my alarm bells started going off. this is what every ceo has said with a major trading loss. in 2010 they lost $6.7 billion. the ceo said isolated fraud. mf global, the biggest bankruptcy since lehman brothers, they said it's an isolated incident. one thing we've learned is these incidents are anything but isolated. >> and happening -- unbelievably, erin, happening two years, three years after dodd-frank law was turned -- you know, passed. who would have thought that mf global could happen two years after dodd-frank was passed or that this big trading loss could occur without anybody knowing it. it was a virtual black box. if they hadn't announced this despite what bloomberg and the "wall street journal" reported, very few people would have been clued into this. it's amazing this could still happen, even though we have a dodd-frank law. >> but doesn't that argue against the regulatory approach? we have already, at least four or five major government agencies from the fdic to the federal reserve to the treasury overseeing bank trading and activities. then we passed the dodd-frank bill which was supposed to bring this to an end and we're still seeing these kinds of trades. i think it's a little unfair to say that jpmorgan because they made this bad trade that somehow it's going to require a federal bailout. >> no, it isn't. all i'm saying is we're lucky, right? if this is the wake-up call, what if it was 50 times bigger. >> of course. but when you said that he made a trade that he was dead wrong, what about the times he was dead right? jamie dimon actually, until this most recent episode, has actually had a very good record as ceo. >> that is true, but here's the thing. i agree with you about the regulatory regime. we don't need it, it's not doing its job. what we need is a reform of the incentives on wall street. what happened here is people in the cio office of jpmorgan will be rewarded for taking big risks in other people's money. that's how they got their bonuses. until you change the incentive system on wall street, you're not going to reform the way bankers and traders behave. full stop. >> thanks very much to both of you. we appreciate it and we want your feedback on this issue and mr. dimon's testimony today. still outfront, are republicans intentionally tanking the economy to help mitt romney get re-elected? 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don't be for it before and then be against it now. >> there's plenty of support for rebuilding infrastructure, the question is how do you do that. in fiscally responsible fashion or through a short-term measure that is primarily pumping money to state and local governments, including extremely inefficient state and local governments. that's a long term mistake that will undermine our growth prospects. >> this is a very valid conversation. but john avlon, back to this point about the election, it would seem to me, it doesn't matter which party you're in, you're in the party that wants to get office. you don't want the economy to get better before the election. you're not going to purposely sabotage it but you're hoping the jobs numbers is not good. >> when bush was in office, democrats, you could see it were subtly hoping for bad economic news so they could make a case. it's not about rooting against the country. where the worse things are, the better for me politically. we've seen it over and over and a constant drum beat and a direction reflection of the polarization in our politics. >> don't you think that back in 2008 democrats weren't slightly happy with what was happening because they knew that meant obama would beat mccain? >> absolutely, absolutely. >> do you actually believe that democrats were rooting for the financial crisis? >> no, no, no. but what did we also see democrats do when they were presented with the information saying unless you guys in congress, republicans and democrats, step up and deal with these banks, the whole economy will collapse. they were forced to do things together. you can't have people who before when there was a rip president say this is a great idea, rebuilding infrastructure, create jobs, construction jobs, and now it's a bad idea. if you want to say how to pay for it, fine. i say you get rid of those bush tax cuts for the folks over a million dollars, we can find the money to rebuild the infrastructure. >> that's nowhere close to enough money. >> okay, gotcha. all right. >> let's talk some numbers. >> when you talk about everybody's willingness to do deals and get things done, here's the problem. the 112th congress is on track to pass fewer laws than any previous congress in 40 years. >> all right. >> they also are not at work. >> let's just talk about these numbers for a second because they're important. right now we're at 131 laws passed by this congress. the average over the past decade is 441. now, eric cantor says it's quality, not quantity. i wish that were true. but math isn't partisan. this is worth fix 8ing on. it is a direct reflection of the fact there has been obstruction. >> but maybe this is his way of saying he likes the health care bill, right? i'm kidding. >> but we've got great big things done in the country in the past with divided government. we aren't anymore. one way you can tell that is there has been a precedent of bipartisan bills supported by republicans in the past in principal, policies that are now opposed. it's very hard to spin that with anything other than aub strukz. >> the house was in session nine days in the month of may. while you want to get americans to work, they're not working. >> you need a very small number of laws. we need a very big reform of the tax code. >> agreed. >> yes. >> you need to do some things on medium term fiscal consolidation. the other thing we haven't discussed is the key thing in terms of long term economic growth is fixing monetary policy. that's one area where i'll agree that democrats and republicans are getting it wrong. but it's not about the number of laws, it's about getting the big ticket things right and this administration has gotten the big ticket things absolutely wrong. >> we'll leave it there. sabotaging the economy? i'll say ridiculous but hoping that it muddles along and it needs a savior, yes. he worked for koch for years but he's now joining new york mayor bloomberg's war on soda. insider's take from inside the secret formula on how soft drinks are marketed so we drink more and more and more of them. and next the number one song in the country. ♪ hey, i just met you and this is crazy ♪ >> it doesn't add up, okay? it doesn't add up to me. ♪ there's big news. presenting androgel 1.62%. both are used to treat men with low testosterone. androgel 1.62% is from the makers of the number one prescribed testosterone replacement therapy. it raises your testosterone levels, and... is concentrated, so you could use less gel. and with androgel 1.62%, you can save on your monthly prescription. 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and now our third story outfront. russia today fighting back at american accusations that it's supplying attack helicopters to the syrian government. the foreign minister of russia ironically, who was visiting his pals in tehran, said it's america doing the dirty stuff. >> translator: they are providing arms and weapons to the syrian opposition, that they can be used in fighting against the damascus government. >> the u.s. denies it. but this isn't the only accusation the obama administration is facing overseeria. jobi warrick joins me now. so what really is the story here? you've got the u.s. saying russia is flying in attack helicopters, giving them to ba -- bashir al assad. >> there's definitely truth that russia has been providing arms to syrians for some time. they have been providing helicopters, all kinds of small arms, that much is true. the united states denies that it's providing any material support in terms of weapons to the opposition. they certainly are providing humanitarian aid and other logistical support. what's awkward about this is these new accusations that we've been a little hypocritical in our support, saying we don't support these helicopter sales. >> let's talk about these helicopter sales because this is where it does get hypocritical. here's the numbers. the u.s. army actually has a $375 million contract with russia's state-owned arms dealer. the arms dealer that is supplying a lot of helicopters to afghanistan. russia is a crucial country that buys a lot of american-made weapons. so if russia is selling them, we're still supplying them, right? >> and we're buying stuff from them and this is the awkward part. we're telling cup trees around the world you shouldn't support syria in any way. we're not doing business with syria as a country but we are supporting a russian company that's providing the very weapons that syria is using to kill its people. these are attack helicopters, lethal machines. it's not just small arms, these are pretty serious systems and we're basically with taxpayer money underwriting these big companies that are providing these weapons to syria. >> and how common is this, that the u.s. is really -- ultimately it's u.s. weapons that come and go? how far the u.s. is the largest arms dealer in the world. we're the largest arms dealer to the middle east. i would imagine a lot of these weapons floating around out there sometimes being used by what are, quote unquote, bad guys, are ours. >> it gets really crazy and incestuous. after the fall of the afghan -- the taliban government in afghanistan, we've provided all kinds of weapons to the new afghan army. and these are typically east european weapons. ak-47s manufactured by some of the same companies that we attack and criticize and this is what we deliver to the afghans and have done it to other countries as well. >> well thanks very much. pretty interesting to look into who is doing what. now our fourth story. testimony today that jerry sandusky, the former penn state football coach charged with sexually abusing boys threatened one of his alleged victims, saying if the boy told anyone, he'd never see his family again. this, as three more men testified about what sandusky did to them as children. and another eyewitness of an alleged molestation took the stand. beth karas is at the courthouse and has been covering the trial for "in session" for trutv. she was in listening to all of the testimony today. also with us, ann bremner, former sex crimes prosecutor. beth, let me start with you. we're hearing about more victims testifying today and also about this witness. i guess, first, let's start with the witness who allegedly saw another act. who was it? what did the person say they saw? >> okay. this was a janitor at penn state university, continues to work there. he says that he went into the shower area of the athletic building to clean one evening. it was around 9:00 or show. he heard the shower going and he looked and he saw two sets of legs. he saw hairy legs and little skinny hairless legs. now, because somebody was showering, he sort of backed away. he didn't look into the showers. he left. but shortly after that another janitor he knew was in there cleaning the toilets, a mr. calhoun, came out really distraught and told him what he had seen. that testimony came in. he had seen a sex act occurring between sandusky and this boy. mr. calhoun is now incapacitated. he's hospitalized. his words came in through that other witness today. >> and, beth, what about the other -- the other -- the victim that testified today saying that jerry sandusky had threatened him that if he told anyone or told his family, he would never see them again? >> okay. there were three of these accusers that testified today. the one you're talking about is known as number ten. he's now 25 years old and talked about what happened to him when he was 11. all three of the ones that testified today were all 11 when they talked about the sex acts. he said that sandusky, they said these sex acts occur between them about five or six times at sandusky's house and in 1998 sandusky did say to him once if you tell anyone, you'll never see your family again. he said he later apologized, sandusky did, for saying that and told him he loved him. but he didn't say the time frame for that apology, whether it was later that night or the next day. that was pretty frightening. it was the only threat we have heard so far. there are three more accusers still to testify but the other two today were also very compelling. >> i want to ask you about those in a moment. but first, ann, what is your take on the direction this is going? obviously these charges haven't been proved, this is in a court of law. we're still saying this is alleged. but these testimonies are damning and our understanding is that none of these victims have talked to each other before but story after story after story are equally, if not even more each time than the last horrific. >> well, absolutely. and it's kind of a textbook case of a multiple victim prosecution, erin. when the defense tries to plant these seeds of doubt by saying you have a financial bias or came up late with reporting, et cetera, victim number ten never got a lawyer, never wanted money, or anything else, and they also described and discussed textbook grooming, especially when they're naked in a shower. that's when sandusky really made his pass, his act, when he would groom them with these boundary violations where they get in the shower and it would be natural for him to do what he did. some of the descriptions that were so just kind of rang so true from one of the victims, he would have his hairy back -- or chest on me. to this day i can't stand that. you know, just that image you have from the child saying that made me sick. it still makes me sick that he's harkenning back to the abuse. excellent case for the prosecution. textbook. >> beth, what about the other two victims that testified today, the things that really stood out the most to you. >> well, what anne just mentioned was victim number seven. when he said that sandusky -- when he would stay at sandusky's house, he would stay upstairs in one of the extra bedrooms and he would come in while he would read himself to sleep. he would crawl into bed with him, he didn't want him in there. he was 11, 12 years old. and he would sort of wrap his whole body around him and that's when he would feel the chest hair up against his back and it so grossed him out he can't stand it to this day. and he would tell sandusky to leave. and when they showered, sandusky would try to do what others have testified he succeeded in doing. he would dry himself and he was much more assertive than the other adolescents and sandusky shut him off, shut him down. he used to go to ball games and his mother had to call up sandusky and say what happened, because mom didn't know this was going on and she didn't know what her son had done to all of a sudden no longer get sandusky's attention. but also it was number five. talked about one incident which, erin, is really important because it was august, 2001. and it was a shower situation in the lash building six months after the mcqueary incident, what mike mcqueary saw happening, where sandusky was supposedly told, listen, don't bring boys into the showers at penn state athletic facilities anymore. this is six months later he was still doing it, according to number five, who was the last of the accusers to testify today before that janitor, and he was so compelling. he was crying as he told his story, and he paused and told a little more as though he were reliving it. he brought us, erin, into the showers today with him. it was as though we could see it happening as he described it. he was wiping his eyes, wiping his nose. he was 20 -- he's 23 years old, he's a man now. and he was going back in time to when he was 11 years old in august, 2001. it was just really heart-breaking. >> thank you very much. outfront next, a man whose job was to convince you to drink more soda has turned against his former job. the insider's secrets to how you are being marketed. and congress pats itself on the back for a plan to save $24 billion for taxpayers. we see that, we say does it add up? 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[ male announcer ] it's a network of possibilities -- helping you do what you do... even better. ♪ with less chronic osteoarthritis pain. imagine living your life with less chronic low back pain. imagine you, with less pain. cymbalta can help. cymbalta is fda-approved to manage chronic musculoskeletal pain. one non-narcotic pill a day, every day, can help reduce this pain. tell your doctor right away if your mood worsens, you have unusual changes in mood or behavior or thoughts of suicide. antidepressants can increase these in children, teens, and young adults. cymbalta is not approved for children under 18. people taking maois or thioridazine or with uncontrolled glaucoma should not take cymbalta. taking it with nsaid pain relievers, aspirin, or blood thinners may increase bleeding risk. severe liver problems, some fatal, were reported. signs include abdominal pain and yellowing skin or eyes. tell your doctor about all your medicines, including those for migraine and while on cymbalta, call right away if you have high fever, confusion and stiff muscles or serious allergic skin reactions like blisters, peeling rash, hives, or mouth sores to address possible life-threatening conditions. talk about your alcohol use, liver disease and before you reduce or stop cymbalta. dizziness or fainting may occur upon standing. ask your doctor about cymbalta. imagine you with less pain. cymbalta can help. go to cymbalta.com to learn about a free trial offer. members of congress patting themselves on the back and celebrating bipartisanship. all over a plan that they say will add $24 billion in savings to you, the taxpayer. we see savings for taxpayers and bipartisanship and get excited. we run the numbers. does it add up? not really. dana bash does the math and is outfront with the bottom line. >> reporter: hans schmidt is a third generation farmer and ever since he can remember has gotten cash payments from the federal government to help manage the risk of farming. how much? >> about $35,000 a year. >> reporter: that's right, he gets $35,000 a year, even in good times when he doesn't need it. but for schmidt and over a million farmers across the country, that could come to a screeching halt. >> welcome to our home. >> thank you. >> reporter: these two senators want to end those payments to farmers in place since the great depression. the democrat and republican sat at this committee table and made the decision together. >> what do people say back home? people say back home all the time, whether it's michigan, kansas, any state, why can't you folks get along and do something instead of spinning your wheels and pointing fingers. >> reporter: bipartisanship we rarely see these days. their farm deal kits $24 billion in spending. >> almost 24. $23.6 billion to the deficit. >> reporter: a significant savings to taxpayers but does it add up? $5 come from ending direct payments but create a new $3 billion program to help farmers with crop insurance. watchdog groups warn the cost to taxpayers could actually explode in bad crop years. senators scoff at that. >> these are real cuts. crop insurance makes sense. it's like any other insurance. it's there when you have a loss. >> reporter: at the farm, schmidt says he's okay with losing checks from uncle sam he doesn't always need. >> if it's going to help to get our country' fiscal responsibility back in order. >> reporter: but he says new government help for crop insurance is critical. even now a good year, problems. this idle combine was supposed to be cutting wheat when we visited. >> we were hoping we would be combining today but the moisture on the grape is too high. >> reporter: another criticism, pork in the farm bill in the form of popcorn. yes, popcorn growers made sure they too get government help for crop insurance. here, no apologies. >> i have to ask you about popcorn. >> i love popcorn actually. >> i guess i would call it a specialty crop. and there is demand for it, just go to the movies or just go any place at home. >> if you don't have a history, then you can't grow and collect -- you can't get subsidies. >> reporter: as he bales a more traditional crop, hay, hans schmidt is diplomatic. >> do you consider popcorn a crop? >> not here. >> dana joins me now. you look at farm income and the farm bill itself is so enormous. farm income close or at record highs around the country. doesn't pretty much everyone in congress say, look, giving these guys more money is a waste of federal money, of taxpayers' money? >> reporter: that's a question i asked the senators and both parties. last year it was a record profit for high grain and soybeans, $109 billion. their answer is basically this is the way this farmer put it, we all have to eat. the fact of the matter is that they feel that if the farming industry goes down across the board, and if there is no risk management, they call it, then this country will spiral into a very, very even worse economic crisis than we're in now. yes, they say that agriculture has been the shining bright spot in this terrible spot. unless congress doesn't give them direct payments anymore, which is what they're trying to do, make sure that the risk is there for them. that's absolutely critical, they say, for long-term thinking. they also say that congress does sort of throw money out the window when there's disasters. that ends up costing ultimately a lot more than making sure that their farms insurance companies and insurance is basically there. >> all right. well, thanks very much to dana. appreciate it. numbers didn't add up there. mayor michael bloomberg's health experts is urging him to nix the supersized snacks includinging the buttery popcorn we all love at the movies. that's on top of banning sugary drinks. 66% of americans at this moment are overweight or obese, according to the cdc. todd putman joins me tonight. todd, great to see you. i mean, we all know in this whole debate, a lot of people that get really, really riled up and angry. i guess what's more interesting about this is maybe it really isn't our choice. last year, coke spent $4 billion getting people to quote, unquote, choose their products. we wanted to play a quick ad. here's an ad during the super bowl by coke using polar bears. and it ends with open happiness with lovely, endeering sweet polar bears. but then i think it's my free choice, huh? >> now that you mentioned coke spending, but you add the entire category, about $7.3 billion last year, excuse me, in 2011. that's a lot of money directed at sugar-based soft drinks. >> it's an incredible a lot of money. i coke executive said to "usa today" last week, quote, there's no scientific evidence that connects sugary beverages to obesity. now i don't think that that's true. the california center of public health advocacy says a child's chance of obesity increase with servings of soda. adults are 27 more likely to be obese. that's a connection. >> yeah. there are many studies, the american heart association, the yale study also contributed a link to sugary soft drinks to obesity. there's a link. >> what can you done about this? when you looked at coke, did you look at these sorts of studies? were you aware of it? >> no, the health issues and certainly obesity was certainly not on our radar at all piets not something that we thought about. what we thought about is to market to people to get them to drink as much product as possible. that was the strategy. >> coke talks about you, referring to you, todd, because you're really under their skin. you left coca-cola 12 years ago, taking action to sofl the obesity problem. this is the statement they gave us. rather than pointing finger, all of our beverages are healthy and can fit in people's diets. not all their beverages are healthy, right? are they going too far here? coke knows not all their beverages are healthy. >> yeah, there's no doubt. many of their products that have absolutely no nutritional value at all. but the point i want to make is i think we can learn from the power and thinking of soft drink marketers and begin to apply that to healthier food and beverages. the healthy guys need to try to market these products in an emotional versus a rational way. people don't like to be told what to eat. they like to be shown and connect. that's the point i've been trying to make over the last couple of days. >> that's right, there's a choice. there are options that are good if for you. for decades, people have told men something about their health that didn't really add up. an old wives tale. tonight, the facts. 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[ female announcer ] only flood insurance covers floods. visit floodsmart.gov/risk to learn your risk. we're running out of time so i'll be brief. today we found something that actually does add up a. for years now, people have joked that men should switch from boxers to briefs if they want to increase their fer tulty. now it goes from briefs to boxers. according to 2,000 clinics across the uk found that men who wore looser fitting undergarments are more likely to have a higher number of sperm. optimum fertility occurs at temperatures below your own body. so breathing room really does improve production. but everything doctors are telling you guys isn't true. according to this study, quote, the study overturns much of the current advice given to men about how they might improve their fertility. many common lifestyle risk may not be as important as we thought. a man's weight, e of alcohol and tobacco and recreational drugs and use of fertility. so the bottom line, it's just a matter of time before mayor bloomberg tries to get in your pants and ban your tighty whiteties. tonight, big money politics. is the president caught in the middle between wall street and main street. i'll throw that red meat with the top democrat and the top republican. plus, explosive jerry sandusky charges from the pulitzer prize-winning authors who say penn state coaches were culpable. >> i believe the coaches knew what was going on and they didn't care. it was all about winning. >> and jimmy fallon, the man of a million voices. >> who buys these? no guy wears them to the beach. >> and including, very worrying, my own. >> he goes bonkers doing jim morrison. ♪ take a look it's in a book ♪ a reading rainbow >> behind bars but $70,000 richer. this is "piers morgan tonight."