america's deepest secrets are outsourced. every day the public companies are making billions of dollars. i am christine romans. this is "your money." we know the government is watching and it's stored in places like this, and this is the new facility in utah. it's 1 million square feet. the largest of several across the country. but the government alone doesn't see those secrets, it's big business. the nsa leak controversy has brought into sharp focus what many americans may not know, big companies whose only responsibility is to return proffer it for share share holders are doing some of the most sensitive work for the national security. 22% of all security clearances are held by contractors, workers like edward snowden, who made $122,000 working for booz allen

hamilton, and he was fired for taking those secrets public. and the government outsourced gra granting all but the highest security clearances. ron, the book "1984" zoomed up on amazon, but big brother has become a private public partnership. and senator diane feinstein wants to reign in the outsourced intelligence industry. is that even possible at this point? >> there has always been a big defense contracting side of the defense establishment, but it grew after 9/11, partly because of the sense that we had to really ramp up quickly on a lot of fronts and partly for an ideologic preference, for having the private sector rather than growing government in some instances, but overall clearly

there is a lot of debate about what these are going to mean and what the revelations are going to debate on national security versus privacy, and it's going to lead to sharp questioning about the extent of how we are relying on some of the information from the companies. >> booz, it makes it the 14th largest federal contractor. and the ties run deeper than money. national security agency director, james clapper, he previously worked for booz allen, and john mcconnell, he is now the vice chairman. amid all those revelations this week, who do people trust the most? >> we are focusing on the national security side of this because that's what has been revealed, but we have this new national monitor poll that we do every quarter and it shows there

is a lot of anxiety, and also on the commercial side. we are living out loud and in our poll, there is enormous distrust of government, but also of cell phone and internet providers, and social media sites, they face a lot of skepticism, and those that you have a more direct relationship, and surprisingly at the top of our list through a series of questions, employers were the most trusted. >> i think there is a lot of willing sharing information, and your financial information rests in hundreds if not thousands of places. we log in and we give that information every time we go and use our credit card someplace, we are giving our information. but it's when it's the government, the idea of the government and these public companies watching you, that's when people get upset. >> first of all, i would say the most striking thing of all in our poll was roughly 75% or more of the public said just about

anything you would want to keep private, your financial records and health records and cell phone records, and they believe somebody is accessing them. i think you are right. there is obviously a special concern about the government, but there is concern about these commercial intrusions into privacy, and in effect, you say the tradeoff we make in getting services for free, and the price we are paying is them acquiring, exiling, and then using for commercial purposes information about us. this is an issue that will come to more of a head. the >> have a nice weekend. >> thank you. coming up, jay leno has a suggestion for the nsa. plus, could you pass a high-level background check? the secrets behind top secret clearance, next.

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we don't know how much the government spends on intelligence, that's not public information, but judging from the contractors make, it's a lot of money. jay leno says there's an easier way. >> people are really up in arms about the nsa spying thing. you know, the government really wants to follow every move, do what everybody else does, stalk us on facebook. >> we told you the sales of the book "1984" are surging this week and it's the story of a society where big brother is watching you, but robin williams says times have changed. >> you see, it's not big brother anymore, it's little snitch. >> and that brings us back to edward snowden, and he has rekindled the fear big brother

is watching you. your employer wants to know plenty about you, are you on drugs or you are susceptible to a credit check, and this is all part of the process with your government outsourcing secrets to big business. zane is here to explain. >> we are talking about the kind of access of edward snowden had. the first step would be to be sponsored by a government agency or government contractor, but you have to prove that a cleared individual absolutely 100% needs to know the classified information, other than that we are talking about lengthy background checks and personal interviews and a microscopic evaluation from your personal history. >> i am no different from anybody else, and i don't have special skills, just another guy. >> another guy with access to highly classified information. >> anybody with access to the

capabilities i had could suck out secrets and pass them on the open market. >> to be in that position, snowden would first had to have undergone a thorough background investigation before being hired. >> these are very rigorous processes we go through. they get much more intense and in depth. >> so this 127-page questionnaire is the first step towards gaining access to all three levels of security clearance. confidential, secret, and top secret. it asks about your criminal and your employment history, and it also asks whether or not you have ever illegally accessed a computer database and about your loyalty to the u.s. government. at higher levels investigators may conduct background checks on close family members and public records going back a decade. >> a lot of time it will take a year or longer depending on the

level. >> and they may interview old acquaintanc acquaintances. >> they could reach out to people you forgot all about. >> and some candidates will also undergo a psychological evaluation to assess trustworthiness. >> there are things that you can see in their past experience, whether they are more or less likely to be a whistle-blower . >> the defense human resources activity has noted seven different personality traits associated with espionage and betrayal, including risk seeking, impulsiveness and narcissistam. >> they don't have to conform to the expectations or rules. the best predictor of future

behavior is past behavior. most careers individuals come upon situations they have not been in before and so it's hard to extrapolate from past experience what somebody is going to do in the future. >> so zane, in edward snowden's case, could he have obtained his security clearance once and taken it to contractor to contractor. before booz allen he worked for dell. is it a portable passport? >> well, in snowden's days it's difficult to know what he himself would have gone through, right? but, generally, yes, if you have a level of clearance it's trance fearable before government agencies. if you are jumping from secret to top secret like a promotion, for example, and then obviously they have to look at you again. and i want to mention, if your status is inactive for a long period of time, they will take

another look at you. >> so interesting. your government is watching you, but guess who is watching your government and pretty much everything else going on in the country? hackers, chinese hackers. ♪ let me play among the stars ♪ and let me see what spring is like ♪ ♪ on jupiter and mars ♪ in other words [ male announcer ] the classic is back. ♪ i love [ male announcer ] the all-new chevrolet impala. chevrolet. find new roads. ♪ you

just about every day the u.s. is under attack, repeated attack, cyber attack. hackers in places like china are not just going after our government and military secrets, but u.s. businesses are some of the most valuable and vulnerable targets. businesses rarely admit they have been hacked unless they have to. why? because if they talk about intrusions on company systems they risk of public's trust and if they are publicly traded the sock can sink. it could cost shares to drop as much as 5%.

and the cyber attack was the priority in the meeting with china's president. there was no movement on the issue of hacking. a professor of uc irvine, and joel brenner is inspector and author of the book "america, the vulnerable." there are those who have been hacked and those who have been hacked but don't know it yet. is it as pervasive as that? >> pretty much. if that's an exaggeration it's not an exaggeration by far. the penetration of western businesses in general is astounding. >> it's so interesting to me, because we have all of the focus right now on the government watching, you know, the surveillance programs, and it's so much in the spotlight, and really what you have every

single day are foreign entities and foreign server farms outside of shanghai, looking to america's biggest corporate secrets and that's something that could be damaging to the american economy. >> well, it can. i mean, we are seeing a dramatic shift of intellectual property from west to east. what people tend not to understand is that businesses and governments create store and transmit information on the same porous internet that you and i use in our personal relations. secrecy from privacy are pretty much the same thing but they are just asserted by different actors, and you and i assert a private interest, and your government and employment is secret interests, and it's somebody asserting the right and the ability to keep somebody else from knowing something. and since we are all transmitting and working on the

incredibly porous networks where identities are easy to spoof, both privacy and secrecy are heading south rapidly. >> i want to look at some of the sectors under attack. manufacturing top the list at 24%, and government, half that share, and then these are top industries attacked in 2012. how does this affect the economy in the long run? >> let's take something like an auto or pharmaceutical company, they spent 20 to 25% of their revenues on research and development. so if a chinese company can come in and hack and steal that pill or process, basically they saved that amount and it creates a competitive advantage that steals american jobs. that's one example. the second example, and this is one documented with chinese hackers, they went in and probed the networks of these oil companies to look at the bids for oil so they could undercut the bids. and another one, google, google goes over to china, and it

establishes a very strong presence there and gets something like 70% of the market share, and then the chinese government decides we are not going to let that happen and they go in and hack the source code, and then >> let me ask you, what do you think the president should do? what do you think the administration should do? because we've had year after year of these strategic economic dialogues with where there's a lot of talking and you measure success in millimeters when we have miles and miles that we need to go here. so what should this administration do? what makes the chinese change? >> it's really important to understand that we're not in a war, not even in a cold war with china. we are economically interdependent on china. they are, i hate to say it, our banker, and the idea that we could somehow stop economic relations with china is a dream.

>> edward snowden said this week the u.s. is hacking china, which played very, very well in china. by the way, the chinese officials always -- the foreign ministry always says that they do not hack. there is no cyber espionage. the government does not try to look at our secrets. they don't need our secrets. that's for the record. joel -- >> that's foolishness. let me make a distinction between the kind of espionage that's been going on since prebiblical times, political military espionage, that goes on, everybody does it. we do it. americans should hope we're good at it, and we are. what we don't do is we don't use our intelligence services in aid of u.s. businesses. why? two really good reasons. one is that we really do believe

in the international law of protecting -- protecting international property. we're not going to follow a different policy than that. secondly, we're not going to go to china or russia to steal technology. they don't have that much technology. we're producing it at a rapid rate. so there's a real difference that the chinese are trying to obscure between the kind of espionage everybody acknowledges goes on and this use of state intelligence services to attack the other guys' private industry. that's what's really an important distinction and it's going on and the chinese are doing it. >> peter, last word to you. >> well, i think joel is dead wrong about this issue about war with china. we've been in an undeclared trade war since 2001. they have shut down 50,000 of our factories. we lost 5 million manufacturing jobs and we have 25 million people unemployed for the very

simple reason that they do things like manipulate their currency and steal our technology. i think the problem here is that the white house and congress have not shown a strong face to china. i mean, for all practical purposes, the president has been a eunuch on this issue, so china keeps having their way with us. and it's only -- as my grad friend gordon chang has said, it's the only major country preparing to kill americans. china is different from germany and brazil and every other country we trade with and we should trade less with them right now until they basically straighten up in terms of their protectionism and stealing our secrets. >> we have to leave it there. certainly peter navarro uses a vocabulary i haven't heard in a long time. thank you so much. joel brenner, nice to see both of you. obviously it's a discussion that's going to continue. thanks, gentlemen. the lowest mortgage rates in history are quickly disappearing. how to lock in the best rate now. that's coming up next. [ phil ] when you have joint pain and stiffness...

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more evidence of the turnaround in housing as home prices rise. fewer americans are under water on their mortgages. 9.7 million people still owe more than their house is worth. but that's down from 10.5 million during the last three months of 2012. that's great if you've been looking to sell but it's a double whammy for house hunters. not only are prices rising but now mortgage rates are creeping higher as well. if you're buying, three little words, lock it in. >> reporter: to buy this house just a few weeks ago, you might have locked in a mortgage at 3.5%. but rates may never be that low again. >> if you are either in the market to buy a house or you've been on the fence about refinancing, i would say do not wait. >> reporter: mortgage rates are still historically low, but now a sudden move higher, up more

than half a percentage point in six weeks. >> the rates went up very dramatically. they went up very quickly. >> reporter: ironically, an improving economy is to blame. >> unemployment is down. the stock market is doing really well. medium home prices are up. people are feeling better. they're out there buying again. so the economy does well, you will see a rising rate environment. >> reporter: and you will see it in your monthly payment. at 3.5% on a $250,000 home with 20% down, you pay about $898. the same 30-year fixed mortgage will cost you 954 bucks at 4%. that's $56 more a month or $672 a year. down payment, credit score, and income determine the rate you'll pay. >> borrowers that are getting the best rate are putting 20% to 25% down. they have income that is documentable so they're providing w-2s and federal tax returns, and they have an excellent credit score. something over 700 or 720. >> reporter: a quick closing date also helps. >> you get your best rate from a

lender if you lock in for 30 days. standard to lock in for 60 days and the longer you go out, the more expensive it will be. >> reporter: ask your lender about a float down provision so your rate could be adjusted lower if rates do slip again. if you're still looking for the right house, make sure you're pre-approved for a mortgage and pay down your debt while interest rates on auto loans and credit cards are still low. >> this is the time to take advantage of those rates. it means be as aggressive as you can about paying down your debt because once they start to rise, there won't be a stop. >> reporter: no stop, and the lowest mortgage rates in history may be gone for good. to get the best rate on a mortgage, lenders also want to make sure you have plenty of cash in the bank after you close. so if you're using your last dime to buy the property, that mortgage is going to cost you. thanks for joining the conversation this week on "your money." aisle be back at 2:00 p.m. eastern. home prices are rising.

fewer americans are filing for unemployment benefits. consumer confidence is climbing. we'll have answers on a brand new "your money" at 2:00 p.m. my handle is @christine mow rans. from cnn world headquarters in atlanta, this is cnn saturday morning. >> i have a house or i don't have a house. there's nothing i can do about that. >> flames have destroyed almost 500 homes and forced an area the size of manhattan. now evacuees of the black forest fire are wondering if they have anything to come back to. does he have a relationship with a foreign government and is there more to the story? >> he leaked united states secrets, and now he's on the run. but some think he's already working for another government. fewer flights, more money for bags and now this. what one airline is doing that may make your flight even more uncontractage.