problems dogged facebook stock debut from the start. on the nasdaq initial delays in trading were quickly followed by investor complaints over orders they said weren't getting filled. nasdaq later admitted to a technical error that delayed order confirmations for hours. the ripple effect meant some brokerages were still confirming orders and the prices paid for the stock days later. so why are we still talking about this? because of new allegations that lead analysts at morgan stanley, the main underwriter for the facebook ipo received privileged information about the company, information they didn't share with retail investors. finra, financial news national regulatory authority, commonwealth of massachusetts have all announced probes into the matter. that was quickly followed by a lawsuit filed by some investors against facebook and its ceo mark zuckerberg alleging both withheld material information

from investors during the ipo process. now, specifically they are talking about forecasts that revenue would be lower in 2012. facebook tells cnn, by the way, that the lawsuit is without merit. ron is a former s.e.c. investment attorney. henry blodgett, ceo of business insider, a website. back in 2003 henry settled a civil securities charge with s.e.c. he was banned from the securities industry. he's a good friend of our show. henry, i say this because it's relevant to our discussion. you probably know more about this now than most people do. >> unfortunately. >> if no laws were broken, no regulations breached, and it's quite possible that's the case, this still has some kind of stink that makes investors think the system is stacked against them. >> that's right. this highlighted a set of rules that really are grossly unfair to individual investors. it was similar in my case. when i got in trouble analysts working closely with bankers and ipos after the dot-combust.

that's ludicrous. we've got to change the rules. again, we've got to change the rules. in this situation facebook preannounced a lousy quarter. analysts not just morgan stanley but all found out about it and that was whispered to investors. individuals didn't know about it. it had an impact on what institutions were going to pay for the sock. >> ron, what's your take. >> the timing of the communication, in light of the changes made to the prospectus provided to investors and retail alike. the world stacked all together, if i buy clothes on the internet i'm going to look at different prices and compare. it's a function of being an educated consumer -- >> can my viewer by enough of an educated consumer. am i as a retail investor at a

disadvantage to pros. >> if you're comparing retail presuming retail means novice, every industry every novice is at a disadvantage against a professional. if you feel you're at a disadvantage, work with people that are professionals and go to the fight with the same-sized gun as your competitor. >> henry, your take on this, may be the take rp for my viewers right now, we shouldn't have been involved in this ipo. >> i think that is the takeaway. this highlighted one of many ways individuals are disadvantaged. the good news is, you can buy index funds, exposed to u.s. equities, exposed to american capitalism, make money but you're not competing day to day. >> they don't have the excitement. this ipo, the most hyped ipo -- >> anybody who wants to play the markets, speculate, fine, as a form of entertainment, it's great. people go to las vegas they know they are going to use, it's still fun. you can do the same thing in the stock market. my point is if you're actually serious about investing for retirement, everything else,

there are much, much smarter ways to do it than try to outtrade professionals. >> kcan the laws, s.e.c. and finra have enough in place that my ability to invest is fair and protected, i'm on a level playing field. >> law is a dynamic world. >> we make laws because we find out something went wrong. >> sometimes by way of examples laws go too far. i would argue in some ways the industry is overregulated. >> that's a good point. henry, you and i talked about this. one of the reasons why morgan stanley the underwriter didn't come out to everybody and say this is the specifics of what facebook will look like, there's a regulation that sort of prevents them from doing that. >> it's designed to not get research in advance, the company didn't live up to the forecast so people would get swindled. it's best of intentions, law of unintended consequences.

big investors had very, very important information small investors didn't get. again, look at the laws. >> highlight one of my concerns, why i want to know the substance of what was communicated. if the analyst is communicating, looked at public information and analyzed in such a way that some of their clients should get the benefit of their brain power, that's one thing versus if the analyst had access to information not everybody had access to. >> very clear it was facebook. facebook proactively reached out to 21 analysts to say basically take your numbers down. the new number were all very much in unison with one another. >> you know that happens. it does happen. you're saying it shouldn't have happened. >> certainly in this case, it should have been made available to everybody. >> how, given the current laws. >> it could have been published. >> facebook could have helped out, instead of adding vague language to the prospectus.

>> growing faster in the third quarter, but not to me, a securities analyst, that's different than second quarter coming in weaker than we thought, the year is weaker than we thought. if they had said that, okay, fine, everybody gets the same information and we go from there. >> you're suggesting more granular information. >> much clearer. >> the legal option they provide inconsistent with prospectus prior to the ipo. >> do people pursuing have a case. >> we still don't know the details. there's a lot more variables to be considered. quite frankly who is bringing it. not a tale of two cities but three cities. cases against morgan stanley, facebook and nasdaq. people bringing cases against nasdaq seem on its face to initially have the stronger cases. >> all right, guys. thanks for clearing this up. it's a complicated issue. henry blodgett, ron geffner.

coming up next, not just facebook's debacle has us scratching our head about the debacle, jpmorgan a few weeks ago. all this taken together enough to give president obama another chance to reform wall street? when we come back i'll ask the woman who dared to challenge wall street, said we need to hold accountable the industry that runs us wild. elizabeth wild joins us next. what?! it's not bad for you. it just tastes that way. [ female announcer ] honey nut cheerios cereal -- heart-healthy, whole grain oats. you can't go wrong loving it.

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jpmorgan chase, one of america's soundest financial institutions, a big-time wall street bank considered too big to fail. it recently admitted to losing $2 billion on complicated trades involving credit default swaps. sources tell cnn money the losses could be as high as $7 billion. credit default swaps are like insurance but they are not. they are more complicated and highly volatile.

let me explain, investors buy insurance on some underlying thing. let's say a loan. they give money to the bank, sort of like a premium. if that loan doesn't get paid, the bank has to give money to those investors. but in this case they were betting on something that didn't even exist and that neither the bank nor the investors had any underlying interest in. this is the same mess that wreaked havoc in 2008 almost bankrupting insurance giant aig. if you recall, and you probably do, the u.s. government spent more than $180 billion to bail out aig because it was, like jpmorgan chase is today, too big to fail. while that crisis spurred some financial regulation, what happened then could entirely repeat itself today. now that jpmorgan chase ceo jamie dimon who really pushed back on regulation has egg on his face, could this be the time for president obama to get it right with respect to regulation on wall street?

one of the best known advocates for financial reforms joins me now. elizabeth warren was one of the main architects of consumer financial protection, the consumer financial protection bureau. she was brought in by the obama administration to get the consumer watchdog group off the ground. she's now a democratic candidate for senate in massachusetts. elizabeth, good to see you. thank you for being with us. >> it's good to be here. >> elizabeth, four years after the financial crisis, are we or are we not better equipped to shield the economy from risky bets made by institutions like jpmorgan? >> well, we are better equipped. there are some changes that have been made like consumer financial protection bureau. that means we're feeding a little less risk into the system. but the real question is are we adequately equipped? i think what the jpmorgan chase problem shows, there has been no change in attitude out there.

the banks still want to load up on risk in order to juice their profits. they are still not adequate oversight of that. so long as that exists we're at risk purchase why should i care jpmorgan chase, a private company with lots of money is taking risky bets. my mind goes back to 2008 and aig. i think, i don't care if you do it for you and your shareholders but at some point it starts to risk the entire economy. am i overstating the case here? >> no, you're not. that's exactly the point. if these banks load up on too much risk, as long as it all pace off they take the profit home. as soon as it reverses the property on the rest of us. never forget what happened in 2008. it meant people lost their jobs. it meant small businesses couldn't get the money they needed in loans to keep their businesses afloat. it meant people lost their pensions.

it meant this whole economy nearly went over the edge. what makes it so important is that burn me once, shame on you. burn me twice, shame on me. this is now the point where the american public says, wait a minute, we bailed you guys out. the understanding was there was going to be a new day here. there was going to be some change. but the financial institutions instead of saying, okay, we've got it. we made a terrible mistake, thank you for bailing us out. instead they fought back against regulations. they hired the biggest lobbying force ever assembled on the face of the earth. they fought those regulations and when dodd/frank passed they continued to guerilla warfare. they continued to lobby congress, regulatory agencies to delay implementation of the rules, put loophole in implementation of the rules, to tangle the rules up, to undercut the regulators so they wouldn't have adequate funding to supervise. and that leaves us in the same

old stew. >> elizabeth warren, always a pleasure to talk to you. thank you for joining us. >> always good to talk to you. >> coming up jpmorgan that has long and colorful history in washington. this week was no exception as the banking committee took up debate on its debacle. would wall street reform really prevent another financial crisis in my next guest says no. stephen moore joins us when we return. are you still sleeping? just wanted to check and make sure that we were on schedule. the first technology of its kind... mom and dad, i have great news. is now providing answers families need.

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i tell you what i can spend. i do my best to make it work. i'm back on the road safely. and i saved you money on brakes. that's personal pricing. before the break we heard from elizabeth warren running for senate in massachusetts about why banks need to be regulated. my next guest says regulation would not have prevented jpmorgan's hedging losses and they don't have anything to do with taxpayers anyway. stephen moore an editorial writer with "wall street journal." i consider him a friend. today, stephen, i think you're crazy. how can you say that risks taken by banks don't have anything to do with the taxpayer? were you living in malta in 2009? >> look, let's go back to the financial crisis in 2008 and 2009 when the banks collapse.

>> right. >> it's important for people to understand, the main reason that those banks collapsed, and we saw these massive hundreds of billions of dollars of losses, what were the banks investing in? they were investing in exactly what federal regulators told them to invest in, mortgages and mortgage-backed securities which turned out to be worthless. it wasn't fancy financial instruments, it wasn't derivatives, wasn't so much hedge funds. >> the mortgages were the underlying problem. there's no question if home prices hadn't gone down and people weren't under water, this wouldn't have happened. we created this much, much bigger world by having bets on bets on bets of things synthetic, derived. >> that's true. >> ultimately, aig, sure, if mortgages hadn't gone sour wouldn't have gone down but regulators didn't know what they were betting on. >> this is my point, though. oftentimes we have this mentality, i think you have this mentality, ali, sometimes, that these regulators have super wisdom. >> it's a dream, not a mentality, a dream.

i fantasize they will do this. >> look, they don't. do you think the federal regulators would have seen some of the folly in what jpmorgan was investing in? i think not. the other point i would make to what elizabeth warren was saying on the show, look, it was two years ago dodd/frank was signed into law. two years ago. this was supposed to be the most sweeping financial regulation of the banks and other financial institutions that we passed in 50 years and it didn't go anything to prevent the crisis that's going on. >> because republicans worked very hard to water this down. elizabeth warren running for senate. she would have been the head of the consumer protection bureau but for a handful of senators that wouldn't let that happen. >> here is my concern with the rush to regulate. i think you would agree with this. the united states, if we remain the economic superpower, we have to be the financial capital of the world. we have to be the place where deals get done, the most efficient capital markets. here is where i disagree with you, ali.

i think this massive push to impose new regulations on our financial institutions is not going to make them safer. i think what you're going to see is a lot of this business moving to tokyo, london, beijing. >> regulation has got to be smart. let me ask you this, do we agree, sunk a nonpartisan issue even in america that it's dangerous to have too many too big to fail financial institutions. >> that is a very tough question. we've been struggling with that at the "wall street journal" editorial page because we have created this sense in the market that these large insurance companies, these large banks, brokerage firms have become too big to fail. therefore they have this kind of taxpayer safety net. i hate that. i hate the whole idea of bailouts. i'm not sure what the best solution is. the fact is we will bail out these institutions if they fail. >> that's the danger. the dangers isn't that jpmorgan goes and makes bets with its own money, why do i care about that?

if they do something bad to the economy we're going to have people in iowa that can't make home loans, major companies that have to fire people. that's the connection. >> there's something special about banks. i want to make this point. the reason we care about banks as opposed to insurance companies and brokerage firms, banks also have deposit insurance, right? the taxpayer stands behind that. you could make the case there should be special regulations on the way banks invest because they have the special protection of fdic insurance. i don't see that necessary for other types of financial institutions. maybe what we need to do is separate out the banks from other financial institutions. >> let's go to a place we agree. i have a fantasy regulators should regulate what jpmorganan did. the regulator is somebody in that chief investment office in london. i don't know why this stuff happens in london. looking over the books with them as a partner, not as an outside

eye but somebody who says, what would happen if this didn't go your way in what would happen if this bet you made went the wrong way. would be able to say, that's dangerous to the global economy, can we do something else? i'm not asking forensic work for the smartest people in finance, is there not some way you can have regulation that's effective that way? >> the one area i would agree with with elizabeth warren, we do need more transparency in these trades. here is an interesting point i would challenge you on. if you look at what jpmorgan was raising money on hedge fund bets, hedging against risks. in other words, they were trying to reduce their risks with hedge bets. they didn't turn out so well. i'll tell you this. theta me ask you this question, ali, how many people in united states congress understand what a hedge fund is, derivative is, credit default swap is. you're asking these members of congress who have no knowledge of these markets to be regulating them.

it's another reason i'm skeptical the brains in washington are going to be able to avoid these kinds of financial catastrophes. >> i share a lot of views on that. i'm not sure that's a reason not to do it. it's a good discussion. you're always up for it even though you're a little dose of crazy. >> i think i'm working on you. >> stephen moore an editorial writer and great thinker with the "wall street journal." uh-oh, another election about plupers. >> your job as president is to promote the common good. that doesn't mean the private equity guys are bad guys, they are not. but that no more qualifies you to be president than being a plumber. >> he didn't say plumber, did he? is governor romney's time at bain capital, a private equity firm relevant to what type of president he would be? emily's just starting out... and on a budget.

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again? mitt romney under attack again from president obama and others. at least this time it's the democrats attacking him who question the wealth he gained as a successful businessman leading the private equity firm bain capital. you have seen the headlines. before we can figure out what this all means, we need an answer to a very simple question, what exactly is private equity. christine romans, the host of "your bottom line" joins me to answer this question. >> think of private equity like this, rich and big investorsi like pension funds, university endowments, wealthy people pooling their money together to make a profit. often they zero in on fablg companies, buy them, take them apart, own them for a while and grow them. governor romney points to his time at bain capital as the reason he's the man to run the nation. >> invested, over 100 different businesses, that net taking out jobs we lost and those we added,

those businesses have added over 100,000 jobs. >> romney's claims made on enforcents in staples, sports authority, domino's, success stories. he's counting jobs even after bain was out of the picture, they sold to someone else and they continued to grow. it's impossible to know how many exactly, how many bain created or lost in those private equity investments from 1984 to 1999. bain does not record payroll number for its deals. private equity is private. once the company is no longer listed, the books are closed. the president sees it quite differently as this obama campaign ad shows. >> pay that you can support and raise a family on is hugely important. >> that stopped with the sell of the plant to bain capital. >> i thought i was going to retire from there. i had about two and a half years to go. i was suddenly 60 years old.

i had no health care. >> bottom line, primary mission of private equity firms like bain is to create profits, not jobs. in this economy, capitalism, the idea is that after you create profits jobs come later. >> thank you so much for a great description of private equities. was it fair for governor romney to cite his time at bain capital as creating jobs. we're now discussing whether his time at bain capital qualifies him or makes him more competitive in his race for the presidency. someone who should know is ed conner, he's a former managing director at bain capital. he's the author of the book "unintended consequences, why everything you've been told about the economy is wrong." ed, welcome to the show. you're not just a defender of the free market. you're a supporter of mitt romney, which is fair enough. even though it was republicans

attacking mitt romney and his time at bain it's now switched. let's remind everybody of what it sounded like them. >> there's a real difference between a venture capitalist and vulture capitalist. venture capitalists are good. they go in and invest capital and create jobs. bain, on the other hand appears to me were vulture capitalists all too often. >> i was surprised when that happened, a little bit shocked. i'm less shocked that democrats are taking aim at mitt romney. i was quite amazed it was republicans back then. bottom line, bottom line, forget whether we like or don't like private equity. does it prepare mitt romney to create jobs, which is the number one issue americans have? >> i think so. i think absolutely it does. business executives are a critical part of economy, power growth. u.s. economy much more successful than europe and japan created 40 million since the 1980s. europe and japan have grown half as fast in employment growth relative to their base. i can't think of another job

that would be more qualified. >> did it make you cringe, all the scrutiny came on romney about the jobs created at bain. it's a tough one how much jobs were created, weren't created. 100,000? >> i think that's a reasonable number. mitt was there when it was venture capital, growth companies at the time. a small minority of the businesses that weren't successful. bain invested in about 350 businesses over the course of its time. the average growth rate was two, two and a half times of the s&p 500 for the companies that were successful. these ads cherry pick. is everything successful, no. >> do you think people realize. christine named all the companies he was involved in, do you think they realize they may be working for a company that exists or thrives or growing because of -- >> i think most people know bain is involved, yes.

>> they are less likely to think venture capital and private equity is vulture capital. >> depends on the situation, i suppose. if they are working in a steel mill at a time when 60% of steel capacity is gone and bain has to make tough decisions -- >> you're not going to like bain, private equity. >> you're not going to like business either. i really do think these ads try to pretend private equity is doing something different than what businesses are doing in general. these are really attacks on business, trying to pit employees against employers. they do this by pretending bain does nothing more than cut costs and close companies, which is laughable. >> president obama has 19 straight month of job gains he can run on. in fact, if you want to talk about private business, many more months, more than two years. why is he talking about bain? >> because he understands that in this climate when you talk about wall street, executives in

hedge funds, private companies, how it resonates with the american people. here is something important. you said, should we measure governor rom based upon bain. here is the real deal. we're not electing somebody to be the head of the private equity company. we're looking to him to potentially be the president of the united states. so if you actually want to measure apples to apples, oranges to oranges, you measure how did he perform as governor of massachusetts. that's the real key. because on one hand republicans are critical of president obama for the government investment in solyndra. you could call that private equity if you want to and investing in a company. but the real deal is when you're the president, you're not running it like a private equity company. so i would say his role there plays a role, the experience. also the president is dealing with commander in chief, is dealing with housing, a wide

variety of issues beyond just what did you do running a company in terms of being able to fund startups. >> it is a little weird to attack him for being the head of bain. i don't understand how that gives him less qualifications. >> actually he's not. actually he's not. >> how does -- >> i'd also say -- >> you're making -- you're making a political argument. what you're -- remember, when we talk about, whenever a politician talks about jobs, they are really talking about voters. so what the obama campaign is doing is saying you had a negative impact on real people. so the reason you're hearing these stories is because they are trying to allow those stories to resonate among people who are unemployed, who have lost their jobs for a variety of reasons of that's why. that's the real reason why you see these attacks. they are trying to tie him to job losses when he was ahead of bain in terms of cutting companies to the poem out there who are hurting and saying who

is looking out for me. >> see, i think this is all about how business is bad for employees. despite the fact that the u.s. economy put 40 million jobs to work, we brought 20 million immigrants in the country, provided them with jobs, educated their children, put tens of millions of people come work offshore. nobody has done more for the middle class and working poor than the american economy. >> such an unsuccessful argument, i don't know if it's mitt romney having trouble with it or a tough argument to make that business is your friend after the last four years we've seen. >> precisely. >> we're in a recession but i don't think you can blame it on business. >> find a reason to. >> sure will try, that's for sure. >> you're dealing with the economy right now also where voters are saying, wait a minute, the government bailed out large banks who didn't turn around and loan that money in terms of credit lines. they are sitting on cash reserves and we're still hurting. i'm trying to make it clear, the political argument you're

touching on the emotional core of voters. that's what this is all about. >> all right, guys. good conversation. thanks for joining us ed conner. you know roland, he's our cnn political analyst. coming up next, mitt romney has faced a barrage of attacks on his business record with president obama, as you see, trying to portray him as a job cutting corporate raider. now he is vowing, vowing to cut the unemployment rate. forget the noise. i'll tell you what you really need to look at when it comes to which one of these guys you should trust to actually create jobs. tax make go aheadon [ male announcer ] when this hotel added aflac

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>> might be words you would ask yourself, are you better off than you were four years ago? >> ronald reagan asked that question, it was 1980. that question is one that voters will be asking themselves on election day this year in november. we know this election is about the economy. what are the most important economic issues to voters and who wins on the issue that voters claim really matter. gallop asked just that question. i want to take you through the results. the higher up on the board an issue is, the more the boaters care about it. the issue where president obama holds the advantage are naturally further on the left.

how far on the left they are is a sense of how much the president leads mitt romney by on those issues. issues where mitt romney leads are on the right of the screen. for example, president obama's widest margin of victory over romney is on the issue of who would improve living standards for the poorest of americans. 69% of americans think this is a very, very important issue and 62% of them think obama would do a better job than romney. right there is just one example. the problem with that, it finished eighth on the list of the top ten economic issues. let's talk about the ones that mattered most. all right. number one on the list, health care. 84% of americans think this is a very or extremely important issue. by a good margin president obama beats mitt romney on this topic. okay? let's take a look at one mitt romney does very well on right over here. that is the federal budget and deficit. 82% of americans, that's a good

number. remember that, that's key. 82% of americans think this is an extremely or very important issue. look at the margin romney has over obama on this, 54% think romney would do a better job than obama. listen, the number one issue in this country, say it with me. you've heard me say it many, many times. unemployment. let's take a look at that. that's right here. unemployment extremely important issue to 82% of the population. by a small margin, by a small margin, americans polled think that barack obama does a better job creating jobs than mitt romney is going to. it's not much of an advantage for the president but it is crucial. as a result of that if that trend continues, if we continue to create jobs in this country, if by election day as projected all of the jobs lost under president obama will have been recovered, that is probably going to send him back to the white house. will cain, tell me why i'm

wrong? >> you're wrong for many reasons. not only are you wrong, i think the poll takers are wrong. i think they don't believe the results themselves. i'll start by asking you one simple question. is unemployment the score board, the political score board for how the economy is doing? >> i think job creation is. if you think you're going to get a better job, have a better wage, you spend money, that creates demand, demand means it's better. >> we agree it's not a score board for how the economy is doing. >> a barometer of how you feel. >> a barometer of something, 92% of men's are working right now. you have to wonder if 92% of americans are working right now, why do they care about unemployment? >> that's not true. of the working population, 8% are unemployed. a much smaller number of americans are working. >> workforce participation, who is looking for jobs. >> correct. >> they have substituted the

number of the direction the economy is going. we have another chart that shows economic growth. mitt romney has a big lead on economic growth plus 10 points. voters favor mitt romney for making the economy grow. >> here is the thing. mitt romney has got to find something to connect with voters. based on that poll, like i said, economic growth. he outranks the president there. mitt romney is getting 52% to president obama's 42%. how do you transform that into an emotional campaign. president obama gets out there and makes the ronald reagan, make your life better. >> i reject the premise. i don't think he needs this emotional appeal to connect to voters. in november it's a referendum on barack obama and how people feel about how he's been a steward of the economy. that's what this has to be about. i think that's what mitt romney think as well. he's sitting back, letting the bain conversation take place, trial on capitalism take place. let barack obama make mistakes,

which i think they are mistakes. >> here is the one thing i think would trump both of our arguments, unemployment and debt and deficit come second to health care. >> that's the wild care under this thing. >> obama wins on this one. >> he does. economic debt and deficit, economic growth, mitt romney is the winner in most of those, how health care plays will be huge. right now barack obama's solution to that problem we point out isn't very popular with americans. >> the election. >> really. >> just to make it interesting for you. always a pleasure to see you. coming up next, has the housing market finally overcome the burden of the bubble. later one of the best days in the ford family history as they get back a piece of their heritage.

an airline has planes... and people. and the planes can seem the same so, it comes down to the people. because, bad weather

the price of oil those are every airlines reality. and solutions won't come from 500 tons of metal and a paint job. they'll come from people. delta people. who made us one of the biggest airlines in the world. and then decided that wasn't enough.

signs of a remarkable

resurgence, not just a regular one, a remarkable resurgence in housing are here. take a look at where we are now compared to last year. home prices are up, existing homes, a used home, most of the market, up 10% from a year ago, home sales up 10% from a year ago. median home prices, half of homes sold for more, half for less, $177,400. up 10% from a year ago. sound f? and listed inventory. the number of homes available for sale are down 20.6%. fewer homes to buy. interest rates once again, setting record lows. if you have the down payment and good credit, a 30-year fixed mortgage is going to run you about 3.78% for some of you. joining me now is alan feldman, he says i am full of it. mark zandi says the crash is over, ready to buy. alan, what is wrong with you, man?

>> well, i think you point out a lot of statistics. i listened to you a few minutes ago and it's really about jobs. in order to buy a home today, you're right, you've got to have cash and a lot of it, $25,000 to $50,000. credit, which most americans don't have, and you need to have a job and job security. the fact is, if you have all those, you can buy a home. but most americans simply don't have that. and i think the statistics, they were up and down over the last few months. and i think you're being a tad optimistic frankly. we're still 20% or so down from home prices, and we've got a long way to go. >> mark, he's keeping me honest on this. let's just talk about the house situation. 3.6 million loans in or near foreclosure in the united states. but the hidden fact is rather than becoming foreclosures, many are becoming short sales. the bank settles and calls it

quits based on what you can pay them. something the banks should have been doing years ago. why would that make a difference? >> i agree that this housing market isn't going to take off. the recent data probably overstates the case. but i think it's clear that the housing crash is done. home sales have improved, construction, house prices are all improving and will more or less continue to improve. so we're not going to take off but we'll do pretty well. one of the reasons we're not going to take off is the reason you just gave, 3. 6 million loans in or near foreclosure. a lot of those loans will got to a distress sale or foreclosure or short sale. so we have to make more progress on that before we take off. but adding it up, the housing market is moving in the right direction. >> alan, you've chastened me, so i'm going to restate the case.

perhaps the worst is behind us. homeown ownership in the united states is the lowest rate in 15 years. but let's go back to the median price, $177,000 and change. 78% of the homes sold in the first quarter of this year were affordable to those who earned the national median income in this country. i would think that's also a piece of good news. one of the pieces of news about prices falling is now there are a bunch of people that were priced out of the market for years who now can own a home. >> it's true. it is good news, but it's still not easy to get a loan. one of our lenders, i was talking to a senior loan officer who has been at the bank for 20 years, he's having trouble getting a mortgage from his own bank. we are at about 700,000 starts

right now, but that's half of what it's been historically. it's just not enough. mark is the expert, but we probably need a million or so new home units a year of the 700,000 starts, 200,000 were for apartment units. something that we spent a lot of time thinking about. most of the people today, when they can make that rent by decision, we've gone from 69% to 65.5%, but it could keep going. every time it moves a percent, that's a million less homeowners. when people see a short sale or foreclosure across the street from them, it spooks them. people think three times before stepping up to the plate to buy a home. >> that rent equation may start to drive the home opening equation. new york for instance, where relate has become so high because some renters used to be buyers and couldn't get access to the loans you're talking about.

okay, guys, thank you for keeping me honest on this. the bottom is probably -- we're probably there, or we've reached it. it's not getting much worse. that doesn't necessarily mean it's the time to buy, but give it some time. all right, unlike gm and chrysler, ford did not take a government bailout. but to avoid bankruptcy, ford had to put its heritage on the line and now they've got it back. i'll explain, next. in alabama we had more beautiful blooms... in mississippi we had more good times... in louisiana we had more fun on the water. last season we broke all kinds of records on the gulf. this year we are out to do even better... and now is a great time to start. our beatches are even more relaxing... the fishing's great. so pick your favorite spot on the gulf... and come on down. brought to you by bp and all of us who call the gulf home. wow. this is new. yep. i'm sending the dancing chicken to every store

in the franchise to get the word out. that could work. or you could use every door direct mail from the postal service. it'll help you and all your franchisees find the customers that matter most: the ones in the neighborhood. you print it or find a local partner. great. keep it moving honey. honey? that's my wife. wow. there you go. there you go. [ male announcer ] go online to reach every home, every address, every time with every door direct mail.

ford has its blue oval back. on tuesday, moody's investors services raised the automaker's credit rating from junk to investment grade. by the way, those are people you're looking at celebrating. ford was forced to put up the rights to its logo and other assets as collateral in 2006. when the company restructured its debt and that allowed ford to avoid bankruptcy. if ford had declared bankruptcy

after that, the logo, the ability to market itself as ford would have been up for sale. six years later, they have climbed out of its economic hole thanks to years of strong profits. i spoke with the executive chairman bill ford and asked him what the upgrade to the credit rating means for ford. >> what it does for us is ultimately it will allow us to borrow cheaper and allow more people to own our bonds because we're investment grade. it's really a reaffirmation by moody's that our plan is working and they anticipate it will continue to keep working. there was a pit in my stomach when we had to pledge those assets and sign those papers. those aren't just cold, hard assets. those are about as emotional as it can get for me, my family and the employees of this company. but we felt it was the right thing to do, because we had a plan. we had a really good management team, and i believed all along

that it would work. the only question was, would the economy get so bad that our plan wouldn't be able to take hold. but fortunately, our plan did take hold and we've clawed our way back and we're in very good shape now. >> bill ford remains optimistic about ford's growth, especially in asia and the americas. you can see more of that interview on our website. thanks for joining the conversation this week. we're here every saturday 1:00 p.m. eastern, sunday at 3:00. stay connected to us 24-7 on twitter. have yourself a fantastic memorial day weekend. hello,