involved in offshore tax evasion. at one time, saying it held as much as $18 billion. they see it as a model for actio actionses against other citizens and banks that help their clients by shelters assets in secret accounts. >> as this agreement demonstrates, the world of international taxes has dramatically changed and people hiding assets offshore and from the irs need to get right with their government now. >> ubs says the settlement results one of the most pressing issue, which it will not have to pay a fine. as to how much money the irs expects to recover in backs taxes and fines, it will not say. the swiss government which strictly guards the banking clients says the names were handed over in accordance with current laws. >> thank you very much. this is a terrible terrible thing that has happened today. i will tell you what the unintended consequences are.

you may think this is about rich tax cheats, no matter what your income level is your taxes are lower because of tax theynt"átk by corrupt governments. follow me. do you know which country in the world is the biggest tax haven? the united states. the u.s. government does not generally tax interests by foreigners who invest in america. if a foreign government came to us for that information we'd have no information to give them, the irs doesn't collect i. every foreign country can come over and say hand over information us to about our citizens, you made the swiss do it. that that. hugo chavez in venezuela stealing his citizens' property everyday comes to the u.s., these people are evading my taxes. hand that information over to me. you made the swiss do it by. this action, we give him the right to do that. you still don't think tax havens are about preventing tierney. remember why swiss banking privacy laws were strengthened

in the first place to help jewish people hide their assets from the gustapo. i do not advocate people cheating on their taxes but tax havens help people keep their taxes lower by providing tax competition. no surprise countries like france and germany are the biggest complainers because they have the highest taxes and want the rest of the world to have the highest taxes as well because they don't want to compete. the u.s. is getting there. some say it was a win for america. others like myself say this is a big loss. why is the u.s. doing this? are we in such desperate need for revenue, $18 billion on tax, what are we going to get out of that. >> joining us attorneys who represent the clients in ubs case. rubenstein and rubenstein and scott. welcome. any words on the benefit of the tax haven, scott. >> i would say there's a difference between tax haven

that provide tax competition by lowering tax rates of businesses and violence that have footprints in those countries and countries through their bank secrecy laws whatever provide shelter for people to violate the domestic laws of their own country. that's an important distinction. i think countries are free to impose tax rates at whatever level they want and encourage business activity and commercial developme development. what banks and others are not able to do is violate and aid and abet the laws of their home country. >> everything he says is right. was the trade-off worth it? is the trade-off for our ability to tell another government we will not give you information worth it in terms of what we got out of it today. >> i would agree with what scott has to say. tax competition is very important. people decide where to live and companies decide where to incorporate based on what country has the lowest tax

obligation. why should we not have that on a global scale as you mentioned. >> it makes sense, right? why is it always italy, france, all these countries always complaining? because they have horrendous tax rates and they don't want people hiding their money offshore. what's the answer? lowering taxes, right. >> i would agree with that we have a very owner rouse tax regi regime in the u.s. if i'm an american working in china, the irs taxes that. if you're a french person working in china, you probably don't have to pay taxes. we pay taxes on income, we pay taxes on capital gains, we pay taxes when we sell our home. when we die if we haven't been taxed enough, they tax again. amazing. robert, weigh in here. do you disagree with any of this. >> i do. to the point there are american taxpayers avoiding their tax

obligations, that just makes the tax burden heavier on everybody else. you have to figure out the amount of money not being collected that's been collected. i think it's great win for the united states, an elegant compromised, the swiss saying i'm not being forced by an american court to provide records. i will be providing records or switzerland providing records pursuant to a request. >> do you agree with me other foreign governments have the right to come to us and say there are people avoiding our tax laws, help us find them. >> i'm afraid i do. if chavez from venezuela comes to the united states, and makes a demand he has to make it pursuant to the treaty we have with venezuela. that will govern. you can't broadly say any country, you have to look at whatever treaty obligations we have. >> you know how it works, basically treaties work out, we will follow your laws, you help us follow our laws, right?

what is to stop him from coming here and saying okay, i want to take 80% of this person's assets, those are my tax laws. >> michelle, nothing can stop him from coming here. the question is how successful will he be here once he arrives. >> why doesn't this decision obligate us to do for him what the swiss are doing for us. >> because this is a compact between united states and switzerland. >> you're talking technicalities on individual trading arrange. s trade agreements, right? talk to me about the spirit of the situation. do you disagree with the spirit of the situation, which is that privacy, when it comes to banking laws, helps prevent tierney. >> i'm not so sure i could say that blanketly, as a blank statement. i think to some extent there are some benefits under certain circumstances to secrecy laws, bank secrecy laws, et cetera.

to blindly say this will allow any government to come to the united states and demand what otherwise shouldn't be provided simply is not true. any other government simply has to come to the united states pursuant to treaty obligations and make its case. if it can make its case pursuant to our relationship, our bilateral relationship with that country, they can get what they want. if they can't, they won't. >> it ends up putting us in the position of judging other countries whether or not their tax laws are just, doesn't it. >> it does. you raised a point before. the united states is the world's biggest tax havens simply there r many exceptions foreigners are not taxed on the gains they make here. we have restrictions in nevada you can sets up an entity, llc and don't have to declare who the beneficial owner is. and the same thing in delaware. forei foreigners avail themselves of our so-called secret regime as well. i would add to something you

said before about tierney being prevented by swiss banks and you said tonight, although i think a lot of tyrants did hide their money in switzerland, it's been said money that weshould have ge to the minute people and robert mugabe from zimbabwe and et cetera, switzerland, you're right about keeping jewish assets safe to a certain extent but they also took money to anybody willing to put their money in switzerland. >> all of those things, i agree with you on all of those points. in the end, we have to make a choice about trade-off. scott, is this trade-off worth it. >> in my opinion, it's very much worth it. the swiss come away with an agreement to respect their treaty regimen. every country is able to prevent double taxation. it was the swiss position that

it should be respected and they prevailed in that position. for the internal revenue service they have the right to enforce the tax laws of the united states and conduct by ubs bankers and other american taxpayers suggesting there's a significant component of tax evasion going on involving undeclared foreign accounts. i think the irs struck a deal with the government of switzerland and ubs to produce some information that would be fruitful. having said that, it's a significant breach of bank secr secrecy in switzerland and it pore tends for other swiss banks and other requests coming to the united states in a similar vain in other countries. >> it puts the united states in a similar position if other countries come to us. >> if another country comes to the united states and says we have evidence a company in your country or people in your country came to our country and helped our citizens violate the laws and we would like information about that we would

be duty-bound to provide that information. >> what if you found that law to be completely horhorrendous, wh if it's like hitler and the jews. >> you're raising a more diplomatic issue. i would think from a foreign policy and macro level, people would bring to bear a different analysis in a situation like that than a simple case of people committing tax evasion. in fact, i think that had a lot to do with the swiss agreement. i think the united states government realized switzerland played an important role in multilateral relationships the united states had around the world and one reason the united states decided not cram down the summons process on the swiss government and ubs. >> i hope you're right. good discussion. thank you. robert, rubenstein, scott michel. coming up, what this ubs settlement means for your portfolio. and make sense of this finicky new bull market.

when's it going to take off. the democrats say just say no and dems say they're ready to go it alone when it comes to public option. we have more on the health care debate. keep it with the kudlow report.

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breaking news out of the white house, reuters is quoting an at administration official saying they are lowering the 2009 deficit to only $1.58 trillion. yes, lowering it to 1.$1.58 trillion. i don't know how we should feel about that. ob care has been met with resistance from republicans. are democrats set to go it alone on a health care bill. steve is live with the latest. the biggest problem is the public option. at the white house, they say the answer to your question is no. they say president obama is still interested in working with republicans, still open to compromise on the public option.

core democrats are warning the president not go too far and so are the unions. >> the public option, whether we have it or don't have it. >> reporter: four days after he signaled he might drop the public option, president obama is getting a health care warning from the powerful aflcio that claims 10 million union members. >> our message is you know we can't do health reform without cost control. the only proposal on the table now to control costs in the short term is the public health insurance option. >> reporter: backers say competition from government insurance would force private plans to improve care and lower premiums. top aides say president obama has not given up on it. >> his preference is public option f. there are others who have ideas how to institute choice and competition. >> reporter: thousands are boycotting whole food groceries angry the ceo opposes universal coverage and the public option

and the champion of public option, barney frank blew up. >> my question to you is why do you support policies as obama has. >> on what planet do you spend most of your time. you stand there with a picture of the president defaced to look like hitler. ma'am, having a conversation with you would be like trying to argue with a dining room table. i have no interest in doing it. >> reporter: republican lawmakers are adamant against the public option. >> this is not about fixing the health care system, this is about government control. >> reporter: some democrats now say let's pass reform including the public option without gop help. but that would require democratic unity and conservative democrats, the blue dog democrats are still leery of the public option. even the few republicans who buy in might opt out when it comes to a floor vote in the senate and house. let's take the case of iowa, gop

senator charles grassley. he's a ranking republican on the senate finance committee. he's been in the room for all the talks. grassley tells nbc news if the final product isn't bought into by more than a few republicans, grassley says he'll vote against it, even if it is in his words, good for the country. michelle, that's partisanship. >> thank you, steve. >> reporter: you're welcome. >> here's my latest drama on the health care debate. will the health care bills on the table lead to rationing? a word that keeps getting thrown around here? the republicans keep screaming about death panels and end of life care bills in congress. they should be far more concerned about the stimulus bill and a little known billion provision for something called comparative effectiveness research. on the surface, comparative effectiveness research makes sense, the government compares the effectiveness of two different procedures and pay for the more effective one. that's fine. here's writ gets tricky. one of the questions often asked

in comparative effectiveness research, how many quality years will be added to your life if you get the procedure. if you are 70, the answer is very different than if you are 30. in the uk, this is how they steer care to the young. already happens in the united states. do you need a kidney? if you're old, you're going to the bottom of the list. unfortunately, this whole debate has made rationing a bad word. we all ration, folks, everyday we do it because we all have unlimited wants but limited means. the question is who's going to do the rationing? you or the government. some of you will say some bureaucrat at my health insurance company seems to be rationing my care. you're right. you likely get your health care through your employer. that's the problem, you're not the insurance company's customer, your employer is. what your employer wants is lower costs. if you were the customer, you'd be much more satisfied with your insurance, you buy your own car, buy your own life insurance, you

should buy your own health insurance and the insurance companies would be far more interested in pleasing you. maybe they would pay a claim every now and then. they like the status quo the way it is. you have to ask yourself why. democrats are moving forward on health care legislation even if it's with zero republican support. what would an ob care look like with gop completely on the sidelines and whow might market react? she wants to make up.

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we have more details about the breaking news we told you just before the break. the deficit will be cut for 2009 by $260 billion to $1.58 trillion. there's a reason for that. apparently, they have scrapped contingency plans to provide hundreds of billions of dollars in additional aid to the financial industry. once again, the deficit is going to be reduced in 2009 to only $1.58 trillion that is a reduction of $262 billion less than what they had forecast in may. the reason is they are scrapping contingency plans to provide hundreds of billions of dollars in additional aid to the financial industry. let's talk more about this to our two guests we have standing by for health care debate. mark walsh, founding ceo of air america and the radio show "left

jab" and syndicated columnist, jerry bowyer. good to see you. mark, what about you? what about the fact the deficit is going down because we're not going to give $262 billion to the bank? >> yeah, way to go. it is good news. shows the banking sector is rebounding in a more robust fashion than many predicted. i think these deficit projections we've seen year after year under different administrations are always a little bit off anyway. it's a great number but what's left, to your point, still a very large number. >> that was my sense of it as well, the fact they're not giving money to the banking system is actually good news because we should take it at face value they think the banking system doesn't need it, good news. >> good news, right, that the banks are strong and we shoupt be subsidizing the banks. good news we recognize that. we have to have a pretty low

fiscal standard to throw a party for a $1.6 trillion deficit. in this kind of environment to be talking about launching brand-new entitlements, good news down to 1 1/2. >> what will happen if we pass obama-care? >> that's another trillion according to the cbo. it was bending over backwards as much as it can to accommodate the obama administration and private groups said 2 or 3, some said $4 trillion. a budget deficit, big spender, horrible plan. >> mark, what if demes do go it alone, republicans stay on the sideline, what does that mean? the public option is in there for sure. >> you have political discussion going on. counting noses, we start with 60 senator, let's knock out ted kennedy because of his health, down to 59. eight blue dogs, down to 51. democrats could pass this with

50 because joe biden would cast the deciding vote like al gore did in the clinton administration. with 50 votes, the democrats could get the obama-care pan passed. >> when you say the obama-care plan are you talking about full on public option or this co-op that ken conrad keeps pushing. >> in my opinion and many rational economists the co-op plan is a failure, this would include the public option. >> jerry, what would that do to the markets if the public option passed. >> it would be very destructive to the financial market and more than that destructive to the unemployment rate. one of the reasons people aren't hiring because of fear of the public option. the main problem is schumer, not the conrad plan. those co-ops are government mandated and government financed. i looked at the plan. the treasury human health and

services secretary gets to approve the plan. the co-op thing still is a public option. they will push for public option with all their heart. this is like the holy grail to the democratic left. they want what they want when they want it. i don't think they have enough votes but think they will try. >> what if we get a public option and markets settle? >> i disagree they want what they want obama ran on a platform of reforming health care and that's what people voted for an had a mandate bigger than ronald reagan. the health care system is rising in cost every single year. you can talk about a trillion deficit over ten years by the way and claim the cbo is not claiming any savings which is wrong. you have to realize if we do nothing, the cost of health care is going north. that hurts markets and hurts employers. i would argue other than the

pharma sector, if this plan passes the dow will rise. >> they keep talking about this issue of rising costs. i agree. the costs keep rising but they never want to get to the heart of the issue, we are not connected to our health care in any way in this country. a third payer system, whether the employer or the government, you always have somebody in between you who's making the decisions for you. if we made our own decisions, we'd be a lot better off. >> mark, i don't know if you were listening in the last segment. mc squared monologue is great. we have a system because of government mandate, because the tax code says we're going to punish you for buying your own insurance, punish you for doing your own purchasing, we don't really have a competitive system. if you want a competitive system, i'm all there. let's make it when i buy health insurance individually it has the same tax treatment as employer provided. number two, would it be okay if i could buy health insurance from a state other than p.

we have bizarre rules, pennsylvania zns can only buy pennsylvania plans or ohio or california, why can't we do that? >> why can't we do that, mark. >> i'm not an economist but i did stay in an holiday express last night. i actually agree with you. in most state there's monopolies and thousands of insurance  companies. >> it's wrong. >> in most states there are duopolies or insurance companies dominated i think you should be able to but the administration doesn't. >> the administration is ready to deal on all these features but they also feel very strongly. i concur and many others do by having a public option or some ability by people denied by the same insurance companies, be it pennsylvania, new jersey or texas, they have an opportunity to purchase health care individually from a public option. that's what this is about. you guys are agreeing with me. they want individual choice with a public option. >> by the way, the reason you

stayed in a holiday inn because you're spending your own money. that's what we need to do here, spend our own money and we negotiate with tcompanies. >> one of them said to me recently, gosh, you give me a 4.5% surcharge on my income, everybody's going on a diet. you see what happens when we collectively pay for everybody's health care, we collectively feel like we can tell people how to live their lives. you're overweight, put down that cookie, you're costing me money. you think that doesn't happen? look what happened in los angeles, they told a certain segment of the population in certain zip codes, you can't have any more fast-food chains. you have too many heavy people in these districts, you are costing us money because so many of you are on the public dole. the government feels they can tell people how to live their lives once they start paying for everybody. >> you don't think that happens

now with rates going up with unhealthy behavior. rates are going up now on what you just described. >> not on unhealthy people. we keep passing laws in state after state, it's not fair, if you smoke or overweight, your premium should be higher. i pay the same number for another person here regardless of their health. that's how it happens in many other states as well. >> that's the problem with not counting pre-existing conditions because people can game the system, smoke and drink and do whatever they want and then when they get sick, then go for insurance. >> when people game the system and those payouts are supposedly done, insurance companies are often the ones investigating when they game the system. let's get back to your point, marie, i agree with you, it is collective costs for people with unhealthy lifestyles that often increase costs for all of us. that's the same thing for all insurance, look at automobile insurance. the same math. you may say you pay personally for your auto insurance. i'm not arguing about the

economics. what this plan is about is the core component so those denied coverage and those unable to purchase it have a public option. >> why do you need the public option? why can't we just give a voucher to the 15 million people habitually without health insurance and let them simply buy their own? it would be an in fi tfinitesim cost compared to public option. >> that is flat wrong. >> 15 people habitually -- some people self insure and some young and illegal immigrants. you take those out, you're at 15 million people. >> that's fine you're casually tossing around numbers about who chooses not to have health insurance. >> from the census bureau directly. >> the census bureau does not track whether i buy health insurance or not based upon the cost. >> can you afford it? >> they put people in certain buckets. my point is we're talking about the overall health insurance rising if the system stays as it is year by year.

we have to fix that. public option is our way to do it. >> they're yelling at me, guys. a great discussion. mark walsh is coming back later in the know argue with me about somethin something. more on the incredible shrinking deficit. i don't know, sounds like funny math. only 1.58 trillion is the deficit for 2009 because we're not giving money to the banks. and clunkers for cash, some dealers are jumping ship because they're not getting their checks. >> and the must have investment strategies for the new bull market. ick today.

white house set to cut the deficit by $262 billion. yes, the white house found a quarter of a trillion. apparently, it was money that was going go the banking system. now, it's not so the 2009 deficit will only be 1.$1.58 trillion. i have a picture of the white house where we can assume the president and his family getting ready for packing up for vacation on martha's vineyard. once again, the deficit has been lowered because they're scrapping plans for financial

aid $262 billion to $1.58 trillion. boggles the mind, doesn't it. cash for clunkers, with government reimburse. s slow to come in, some dealers are jumping ship now. >> reporter: michelle, the federal government says it is adding staff and ex-spediting t process of forwarding rebates for cash for clunkers program rebates. dealers have been complaining the federal government owes them millions of dollars because many of the clunker trades they submitted have not yet been approved. some dealers said they will suspend doing cash for clunkers program until they start to see money from the federal government. ray lahood said they're adding staff at the dot and the money should be flowing from the transportation department in the next couple of days. that's the latest with the cash for clunkers program and fight for money from the federal government from auto dealers

around the country. michelle, back to you. >> did you hear what phil just reported, very simple program, it's a rebate program, right? yet the government is taking weeks and weeks to get the money to the dealers. this is the same government we think can be in charge of health care? it's a ridiculous. all you have to do is look at this and know it would be a disaster in the making. an up and down day in the markets today that finally ended positive. amanda joins us with the rundown on today's action. >> hi. more like down then up day. we started out on a pretty rocky note after we saw shanghai. and we got a bullish report on crude stocks and pushed the energy big boy names like exxonmobil and chevron by the upside. by the end of the day, we had the three indices closing in positive territory. we saw a big increase in the price of crude, about three bucks a barrel. we saw a big drop in

inventories. we saw on the pharmaceutical side drug manufacturer merck was the top gain that is right took the ding-ding ding today after the government upheld a patent for merck on the allergy drug. and pfizer was up. farm equipment was up, expected to barely break even in the fourth quarter. today was a red letter day for google. not quite happy birthday, more like happy anniversary, fifth anniversary for google because at this time five years ago, it ipo'd. guess how much it was back then? 85 bucks a share. even then some people thought it was too expensive to buy. look at it now. it's now sitting at 448. it gained 350%. >> amanda, it is so gre great -- amazing, isn't it? so great to have you in town from australia. so much of the discussion was whether or not china is strong enough to sustain its recovery

and help the global recovery. from what you've seen in australia, so dependent on china, what do you think. >> china is such an important part of the global economy. i'm not sure it's the engine to pull us all out, you look at the way the chinese economy is constructed, still export dependent and who buys a lot of the products. americans, and probably bought it the suit you are wearing. until the u.s. consumer starts buying products again, the chinese economy still can't revv up as much. >> got it. not maybe to its full potential. >> thank you so much. see you tomorrow. >> be sure to stay tuned in the 9:00 p.m. hour. tyler mathisen will brb a cnbc special on the fastest growing companies in 2009. 9:00 p.m. tonight eastern time. coming up on t"the kudlow report," watching the battle for

the s&p 10,000, who will win out? bulls or bears. we have one of each and battle of their own and the market experts i weigh in on what the amazing shrinking deficit might mean for financials. the white house found a quarter of a cillion. amazing what you can find in the white house. grill: holy moly!!! what just hap...whoa! grill: i mean...wow! hey! that looks great. grill: and there's no need to discuss it further. in fact, you can buff most of that out. just give it a once-over with a wet paper towel...hee, hee grill: ok, good talking to you... anncr: accidents are bad. anncr: but geico's good. ding! with 24-hour claims service.

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welcome back. breaking financial news tonight. reduction in the estimate of the deficit for 2009 to $1.58 trillion. this could possibly have market impact. turns out the reason for the deficit, some money going to be given to banks, over $200 billion worth being scrapped, not going to give it to them. they don't need it. that should be good news, right? we have matt riley. let me start with you. they have this $262 billion ready to go to the banking system. they're not going to give it to them. that's pretty good, isn't it? confidence in the banking system. >> i think it is, michelle. i think they ought to give me the $252 billion because i really need it.

you look at this whole deficit issue, that's totally irrelevant at the moment. we have to look at the context of the consumer and what's going on. i really believe the lower the deficit goes the better the tax revenue will be for the economy and clearly, we start looking at this reduction, it means the government is determining the financial industry looks in pretty good shape. i thought it looked in pretty good shape a while ago. to me, this is not major revelation. the bank stocks have been among the leaders. >> it has been among the leaders. does this new news make the banks still a buy? >> i think they are, but not because of this news, i've always felt they were a buy, where the money's going right now. it sure as heck isn't coming out of them. with money so cheap, banks are set to make money. with respect to this news, frankly, it just comes down to the same word i've always had to describe what's going on now, which is credibility.

i don't believe them. i think what they're doing is they're putting this line item where they want it to be so that they can make room for some of these other expenditures. it's easier to ask -- it's easier to apologize than to try to explain it up front. that's really what's going on. >> ask for forgiveness, never permission. >> that's the first rule in marriage, right? >> and in life. let's move to the battle for 1,000. the s&p 500 keeps touching that 1,000 level, falls back. gas goldman sachs says it's going to 1050. what do you think. >> i've concern about the equity market. that's always been the case. i was ultimately looking for 1200. that's before the shanghai index started following off a cliff. in less than two weeks, 20%. i think that stuff matters. everybody's looking at china. you just had this in your last

segment. everybody is looking to china to pull us out. that's all on borrowed money. i think i've heard this song before. >> ned riley, what do you think? are you worried about china like dan fitzpatrick is? >> no. look at shenzhen market from the bottom. >> if you start to look at the components that's gone on in asia. japan is turning and you look at south korea's market right now, it's doing extremely well, a leading indicator for technology stocks. i don't depend on china for all the growth because it depends on the united states. there's positive growth in china, not like advancing at minus 2%. china is growing. as soon as the u.s. starts to pick up on the front end of the economy, you will see china's growth improve dramatically. i'm not concerned about growth right now. i think we're doing well. we went from negative growth in the second quarter to plus estimate in the u.s. and most

people six weeks ago wouldn't have expected that. >> that's true, a lot of people have been raise iing efforts fo the gdp in the united states and a lot of people essentially did was up their earnings estimates for 2009 and 2010, thought it was going to be 40 bucks and now 52 bucks. you start pricing that in, you obviously get a higher market. >> here has the issue. is that manufactured gdp number or real number? 70% of the gdp is based on consumer spending. i don't see any evidence consumers are remotely considering spending in the future, instead there, hoarding money. over 40% of the gdp is government spending. so i'm really worried about that. i just don't see real growth. you can see bottom line growth but at some point, it has to come from the top line, ie consumers, and we're just not there yet. >> ned, last word here. >> anticipation, anticipation. that's what the market basically

does. i see consumer net worths going up, see housing prices stabilizing and going higher and see the market giving confidence to the consumer and employment dropping. >> you hear the music, you know what that means. good discussion. see you later. coming up, are regulators trying to take all the risk out of the market? >> charles schwab says it could keel the everyday investor. any normally amicable co-host of "left jab," they're actually on opposite sides of the ring tonight. we're calling it left jab with a right hook. this should be an interesting discussion. don't go away.

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famed investor charles schwab fought back against regulation and lawsuit being brought against his firm by new york attorney and drew cuomo in today's "wall street journal" saying "to take risk out of investing, you have to take americans out of the market." he says the new regulations are punishing everyday investors. here to debate, two guys normally on the same side of the aisle. david, from "left jab" and here to take on his partner, his co-host on "left jab." i mean it that you are my two favorite liberal, i kid you not. >> we can stop right there. >> you have a very specific

experience which leads you to agree with charles schwab. tell us about it. >> back in 2001 and 2002 when the internet and technology bubble burst there were hundreds and hundreds of lawsuits brought by plaintiff's attorneys against internet companies and technology companies most claim claimed they either had inside information or contained the volume of the stock driving it up. a few bad actors were caught, the bank settled. this is exactly the same thing. >> didn't you get sued in the process. >> my company sued, i was personally sued, and i was excused from the case. when stocks tumble, people look for persons to blame. this is a marketplace they go up and down, this is not a place to blame. charles schwab is exactly right, there's enough regulation on the books today, it's about enforcement. >> david, listen to your good friend, mark walsh. >> i don't know what to do with my friend. mark and i are buddies and co-hosts and mark usually comes

from these things from the perspective of ceo, which he is, i come at it from perspective of a lawyer, which i am. here's the critical question. what did schwab know and when did he know it. >> what cuomo is asserting, attorney general cuomo, i have investigators who have tape recordings of charles schwab brokers reassuring investors these particular instruments kind of bond instruments are perfectly fine liquid short term investments. then the opposite turned out to be true. the entire market froze up and there was no liquidity. that's fact number 1. fact number 2, when other investment houses were alerted to this, they bought back from their investors to the tune of $61 billion all these instruments. schwab did not. >> but you know schwab's business model is you're on your own, give you very cheap execution in execution, you make your own decisions. >> if all schwab was saying here's the market, we're not

commenting one way or another, you make your choice and take your risk. in that case, my buddy, mark is right. what cuomo is asserting is slightly different. he's saying there probably was some misrepresentation. >> misrepresentation, we know those things were exactly what they said they were for 20 years mark, you want to weigh in on that. >> that's exactly right. dave, i think your berken stocks are a little too tight today and you're not doing your math on this. whatever charles schwab said on the phone is absolutely correct. the 60 year difference, hasn't happened in 60 years made those specific instruments difficult to trade. i'm not defending charles schwab, this is about a marketplace plummet, not about bad actors there. are always bad actors in securities trade. >> good discussion, love having you both. i like it when you're on opposite sides. they're on "power lunch" as well. the irs tax settlement is a

terrible terrible thing that has happened today. you may think this is about rich tax cheats. no matter what your income is your taxes are lower because of tax havens and help prevent tierney by corrupt governments. tax havens help keep your taxes lower by providing tax competition. no surprise france, germany and italy are the biggest complainers, they want everybody to have high tax rates like they, do they don't want to compete. thanks so much for watching, i'll see you tomorrow night. when people say,

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