summer. ♪ it's hard to look like right at you baby ♪ but hear's my number. >> wow. well there's a surprising fact about the artist. "out front" next. the ceo gave us all quite a mental image today when he testified in front of the senate banking committee in washington about one of the largest bank in the united states has been open about hits multibillion trade losses. >> we generally are open kimono with the regulators and tell them what they want to know. >> open kimono, sure. but maybe he was open kimono about the things he knew about. but not about things he didn't. like how the trade in question had morphed out of control. >> so, this transaction that you said morphed, what did it morph into, russian roulette? >> it morphed into something i can't justify. it was too risky for our company. >> it's almost like he's talking about a physical object. but this was a tried, a tried gone terribly bad. he said he didn't know how bad the trades were until late april. you know what he's amazing about this? major financial media knew well before jamie dimon. on friday april 6th, the wall street journal reported on a trade so big that the entire trade 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 rule is supposed to stop banks from making bets with their own money, what is a j.p. morgan trader doing in london with positions as big as a hundred billion. >> what were they doing? they told them these press reports were a whole lot of bunk and dimon trusted his lieutenants. april 13th he shot down questions about the out-of-control trade. >> this is complete tem pest in a tea pot. it's sophisticated but at the end of the day it's our job. over a long period of time to earn income and to offset other things we have. >> days later he learned the truth. that trade, no tempt pest in a take pot. a real tem pest could cost j.p. m morgan up to $5 billion. he didn't make an excuse. >> when i made that statement, i was dead wrong. >> he was very direct and said he was sorry. 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. it's 15% of the size of the entire american economy. part of the reason for this is actually a bit ironic. j.p. morgan was the strongest big bank when the crisis hit, so regulators pushed it to bulk up, buying bear stearns and washington mutual. the bottom line, j.p. morgan got bigger and bigger. and it wasn't alone. america's biggest banks have gone from too big to fail to too big to bail out. the current trading loss is a wakeup call. what if the loss were big enough to threaten the nation's biggest bank and therefore the entire 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 where 23 million americans have parked their hard-earned savings. it could make the cries look like a vacation. joining me now steven moore and william cohen. a lot of studies on banks like lehman brothers and how they failed. let me start with you, william. what can we do here? in a sense this a rather damning indictment, whatever you think of the reforms, it doesn't appear they would be able to stop a major bank from major losses? >> you know, erin, your analysis is spot on. obviously they look to j.p. morgan to buy bear stearns, to buy washington mutual, now it's gotten so much bigger that we have the crisis or this $5 billion trading loss in j.p. morgan is because they had so much excess cash of deposits that jamie dimon said they got through in part of washington mutual that they felt the need to invest that money. they can't make any kind of spread on that money because interest rates are low, so they began by taking risk and nobody knew about it. >> this a tough one. jamie dimon addressed this issue of too big to fail and what he said sort of surprised me. here it is and i'll 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 our system and we shouldn't prop them up. we should allow them to fail. >> continue to say steven moore that big dumb banks should have big bankruptcies. but the problem is you are the whale. you can't let the guy fail. >> yeah. this is a big problem. as you know, i'm a big free marketeer. but i'm rethinking my position on whether the banks have got too big. the reason is one of the dangers we did back in 2008 and 2009 when we bailed out all of those big banks is we created what we call a moral hazard problem. there's a perception in the market, a perception of shareholders and depos ters that these banks have gotten so large that they have a safety net underneath them. and that's one of the things that unfortunately encourages these kinds of trading activities. i'm not sure what the best solution is, maybe it is, i almost hate myself saying this, maybe you do have to break up some of these big banks so they don't get so large that we have to bail them out or even worse that the government can't bail them out because they're too large. >> this is the frightening thing about it. one other thing that jamie dimon said today that this was an isolated incident. indeed it does turn out what every ceo of every bank has said when they have had a major trading loss. 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? it's a damning charge and harry reid is making it. and congress congratulates itself about a new plan to save taxpayers billions and billions and billions. you know we saw that. we said, hmm, that doesn't add up. you'll see. accusations in court that jerry sandusky actually threatened one of his victims and said that if he told his family, he would never see them again. see, airline credit cards promise flights for 25,000 miles, but... 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[ male announcer ] it's a network of possibilities -- helping you do what you do... even better. ♪ well, more and more people are bundling their home and auto insurance with progressive. sure seems and why that way. wouldn't you? you can save on both your home and auto policies. yep. we talked about this. [meow!] [meow!] bundling and saving. now, that's progressive. play rocket cat adventures at progressive.com. our second story outfront, harry reid, the attack dog, taking a big bloody, nasty, dripping bite out of republicans. >> their goal is to drag down the economy because it's good for their politics. they believe the more horrible the economy is, the better off they're going to be in november. >> that is a heck of a charge. but is there a grain of truth to it? john avlon, riahan are here. the republicans don't want the economy to get better because if it did, barack obama would win. >> i think that's outrageous for this reason. when you're looking at the cbo has said, they have explicitly said when you engage in the short-term fiscal stimulus, it can have a short-term impact but undermine a long-term growth prospects unless you have medium term fiscal consolidation and medium term cuts. if you look at the republican agenda and the laws that the house has passed, they have said let's have medium term and long term fiscal consolidation. let's reform medicare and medicaid and get the country on stable footing for the long-term growth. i think it's the other folks playing politics. the ones who want to goose the economy in the short term at the expense of the economy over the long term. >> oh, come on. define goosing the economy. rebuilding bridges, rebuilding schools. >> how much of the money from the 2009 stimulus sbeent bridges and infrastructure. >> i'm so glad you brought that up. 40% of the $787 billion stimulus bill was tax cuts which republicans love. >> not those tax cuts. those were tax expenditures, roland. >> one second. >> not a single republican vote. >> one second, one second, one second. >> happily, happily. >> why is it that republicans that backed rebuilding infrastructure before president obama now all of a sudden don't want to do it? 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. [ male announcer ] dosing and application sites between these products differ. women and children should avoid contact with application sites. discontinue androgel and call your doctor if you see unexpected signs of early puberty in a child, or, signs in a woman which may include changes in body hair or a large increase in acne, possibly due to accidental exposure. men with breast cancer or who have or might have prostate cancer, and women who are, or may become pregnant or are breast feeding should not use androgel. serious side effects include worsening of an enlarged prostate, possible increased risk of prostate cancer, lower sperm count, swelling of ankles, feet, or body, enlarged or painful breasts, problems breathing during sleep, and blood clots in the legs. tell your doctor about your medical conditions and medications, especially insulin, corticosteroids, or medicines to decrease blood clotting. talk to your doctor today about androgel 1.62% so you can use less gel. log on now to androgeloffer.com and you could pay as little as ten dollars a month for androgel 1.62%. what are you waiting for? this is big news. today, i choose color. to see it. to feel it. to be in it. to be upon it. and to live a life surrounded by it. today, i put on a fresh coat. ♪ find your color and get $5 off premium paints and stains. download your coupon now. well, it has happened. carly ray jepson's "call me maybe" has hit number one on the billboard's top 100 which comes out tomorrow. the song has been everywhere. even former secretary of state colin powell knows the words. ♪ i just met you and this is crazy ♪ ♪ but here's my number, so call me baby ♪ >> this is the video that really changed things for jepson. justin bieber is in it, selena gomez, ashley tisdale and the boys from the current big boy band big time rush, dancing and goofing off to the song. it has more than 40 million views on youtube and has propelled the song into a hit, thanks to bieber. we were actually surprised to find out this song isn't new, it was released in september. it's been out for nine months and only got to number one now. so we went looking for a few songs that took a long time to get to number one. the number is 20. that's how long it took for the song "red red wine" to hit number one. it peaked at number 62 but it was the ub 40. ♪ red red wine >> it was number one back in 1988. the song was on the chart 25 weeks before it got to number one and i'd be willing to bet it's going to be stuck in your head for a while. it's better than "call me maybe." ahead on outfront, russia points the finger at the u.s. over the conflict in syria. the u.s. pointed the finger in russia. who is actually doing the arming. disturbing testimony in the jerry sandusky child rape case. why chest hair brings horrible flashbacks for one victim. isn't it time the automobile advanced? introducing cue in the all-new cadillac xts. the simplicity of a tablet has come to your car. ♪ the all-new cadillac xts has arrived. and it's bringing the future forward. 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