adjustment will work is you will walk out of your home and look down the street and look down at five similar homes with for sale signs and one of them will tell you he sold for 500,000 you are not going to keep paying your million dollar mortgage about care what interest rate they charge if you know your heart and home is worth $500,000. >> it is a pleasure. a comment and then a question. i am a commercial real-estate broker and everything you said was spot on, especially the results. if they didn't like the appraisals the got one and then the banks however did land and they landed space it was interesting called projected in come. the income was never there but you could come in and say i will buy this and and i hear from now it will sell for what more and what happened in new york even with biggest developers and did not materialize but most people did from after it and the other thing is the concept of short selling. i know some people who were

short sellers who feel they have gotten a very bad rap for what is going on today and the whole thing is very confusing. or they to blame for this mess or is it part of the market forces? thank you. .. >> signature to the bottom of

the mortgage and he did not hold it but immediately is sold at. who is crazy enough to buy it they created the cbo, the collateral that obligation they put this worthless that into a pool and got the rating agencies convinced that if the worst offenders and biggest defaulters went to the lowest tranche first the upper tranche maybe 65 or 75% of the john paper would be rated aaa. and is a question of mathematics and ask yourself questions how bad the world can get and what the default rate will be but let me tell you the people who are pushing the paper and taking down the enormous fees i know the worst case scenario beat risk analysis ray and the worst case scenario they could imagine what if it only

increased 5% for the next four years. not one of them and i have a friend to investigated the six biggest banks and no one asked what if real-estate the clients at all? 1% and what if they decline 30 or 50%? that is an important question to ask when dealing with mortgages because when house prices fell luck and someone has a medical emergency or the loss of a job, they tell because the home price increase has created equity in the proper day. rather than putting the call back to the bank, they sell the house and take the profit and pay off the note but now the same person has a job loss in a declining environment now he is under water and has no incentive to sell the house because he is working for the bank. he will not claim any equities so he mails the keys to the

bank and says it has been nice renting for the last two years. >> just a follow-up on good german example that you use. i am sure the ed does that mean colt investments days global investments are not good on i hold? iraq globalization has the impression is a great idea but you have to examine it to buy the shortcomings. one of the clear shortcomings that nobody analyzed in a vance was for whatever value was created from increased trade ed there would be a huge cost to the working poor and middle-class who would be put in competition for jobs with indians, low-wage chinese and low wages south americans and mexicans provide all care how hard you work in america, people in these countries who will work for $1

or less per hour e it will hurt your lifestyle. in aggregate the total growth of the united states might have increase but i can assure you the lower 50 percent of americans declined. that is one problem. the other that we are seeing now is when there are the unanticipated crisis that is very highly correlated, they hit everything and every country and cannot be contained in as if a virus broke out and rather containing to a small village be coz of globalization and widespread use of air fare it very quickly spread around the world but a look at the mexican virus started in mexico but within two days almost every country in the world. globalization is dangerous in this regard that if the congress does understand economics hour politicians don't know how to plan the future perfectly but there is

always uncertainty we're no longer exposed just one state or city or country but to the global economy which is very, very dangerous. >> with the debt overhang issue isn't the only possible solution to create inflation in order to decrease the real value of the debt? >> yes that is the conclusion i came to an how disturbing to read in the paper today that bernanke went to congress and promised the one thing he would never do is inflate the currency. he is reading out of a play book 30 years old we know inflation is harmful to the economy which we found out during the carter years but the onetime am i do good is when everybody has to much

debt corporations, businesses, gove rnments municipalities come individuals, everybody is to leveraged so it is almost bare two in-flight and not back the debts. you can argue the holders would be upset but they bought too much and never should have invested and it probably should be trading at 70 or $0.80 on the dollar. the other way to get rid of the debts is the companies and banks getting in trouble ought to be restructuring. fannie mae and freddie mac over the weekend basically with a graft without claiming it and came out of bankruptcy on monday morning without going in and creditors got paid $0.100 on the dollar. the creditors 1.6 trillion dollars for the creditors, 500 billion held in china were paid off whole. how? u.s. government taxpayer gave

them 400 billion and the clock is still ticking and we could eventually pay $1 trillion program makes no sense all of the bill strip out -- bailouts, wall street and auto six cetera and they are not punishing the shareholders but also the debt investors it is not fair. >> that is my second question i read about the debates about why the banks were nationalized and by the bondholders were protected. what in your opinion is the reason for that? why did that happen? >> in a complex world it is an easy answer. because they lobby our government. they lobbied your government when they had market valuations of 100 or $200 billion. for a while when citibank stock without water $2 they had a market cap of 10 billion i thought that would take muscle away but they were not

stupid and the money they took from a government they did not cut back on the lobbying efforts of a continued to lobby strongly in washington and that is a simple explanation why they are getting away with it. >> it seems like there are so many lobbyists why would bondholders and banks the special as opposed to holders of bonds of any other type of corporation? warned the bonds held by the mutual funds and the pensions? >> you are right. as far as i can see none are having any problems they killed a global warming initiative, a setback in a sort of public alternative discussion for health care and basically emasculated credit-card reform and had a vote in the senate 70/252 put a cap of 25% because they are charging 33%. it is hard to imagine to be enough hours in the day for

them to meet with all of the lobbyist. i lived in washington when i was six years old it was a small town less than 300,000 announced a greater maryland washington area is 4 million and the two wealthiest suburbs and america our of washington d.c.. there is not in history they do not make anything. the only people supporting themselves are lobbyist and it has become a very, very big business. like also write a book about the pharmaceutical, health-care industry, the hospital industry the same final chapter is all about lobbyist and am getting control. >> well, mr. talbott due you feel obama will have success against the three headed

monster of corporations, a health-care and lobbyists? do feel the front-end administration went up against the metal and part of the scandal involved was an effort using the military industrial complex to squash that type of activity? >> you will not hear this very often because most people aren't democratic or republican am people on the liberal side are slow to say anything negative about the democrats but one democrat i have to mention is bill clinton who was very capable and smart and tried to accomplish good, but what he was most interested in was raising money for campaign commercials. he understood that is the way to get elected and to his credit we may have never heard his name if he did not figure this out but as a result he ended up selling the democratic party to big

corporations because back then they were 90% of the money contributed the republican party was already controlled by big corporate money so the world after 1992 became republican corporate money vs. democratic corporate money. and if the thing two since then it really has not been any real debate between the parties. i think they falsely create debate on issues people care a great deal but not important to the world economy or u.s. economy or our livelihood or welfare on a daily basis and the big corporations to basically steal money the average wage has been flooded in real terms over 20 years. i have already discussed the great majority of americans have been asked to be put in competition with not only

low-wage workers but from a communist neighbor -- but if you mention union in china they will take out back and shoot you and that is not an exaggeration. we have changed the moral balance between money and the people we have developed from the thirties and fifties we have changed radically toward the corporation now we need to take a back. whether obama will be successful he has i indicated he will to date so our only hope is he is being stealth and building momentum, trying to build a coalition of all the people because it will take all of the people to accomplish this and we hope in another year in his second term he turns am put the pressure on. it would fit his modus operandi because this is exactly how you community organize you organize the people first before taking on the big issues. i am hopeful that it is his

plan. he certainly is much smarter than i am so i know he has a plan. >> we will take two more questions. >> good evening. i don't know if you can answer this question but obama will pass along effected february 2010 that will make it hard for young people to get credit cards. i am confused because the young people like myself that are responsible with the little credit that we have had the they expect us to establish credit cards once it is under effected february 2010 for those who are responsible? do you have any suggestions or what is going on with that? >> i have not read the bill so i don't know all of the details of the problem he was trying to address is the credit card companies had been invited on to our campuses around the country and the

reason is because they made big donations in the university's put the diversity of plum on a credit card and let them set out outside the bookstore and gave credit cards to the students for you may think they're stupid when i tell you they were giving three and $5,000 credit lines to students who had no definition of jobs or income or a means of repayment. they are not stupid they not only let this didn't charge of 5,000 but let them continue to charge $10,000 some students had better stereos than i ever saw then on graduation day the students said i do not have the money i don't know why you gave me this credit card i don't have a job and a credit card company said that is okay the next letter is not to you but your parents. they wrote a letter saying your child has run up $10,000

of credit and if they don't pay us back we will destroy their credit for the next eight years and did i tell you credit rating is the first thing an employer looks set during the interview. it was massive fraud and that is what obama was trying to shut down. i would bet that he did not go far enough and i am sure credit card companies will protect you and allow you to get credit. >> i am wondering if it is a bit unfair to put some much blame on the lobbyist when they don't cast votes at the end of the day. >> that is a fair question. i first identified the problem 15 years ago if you look at my six or seven prior books. regardless of the title i always of a chapter of lobbying illinois effects of

you that our i am obsessive but two years of your focus my attention on cleaning up the government. thought government was the problem then i realized and thought it through us something my sister would teach me where is the power? follow the money it is not the congressmen day macy powerful to you but they are inconsequential compared to the money behind the lobbyists and corporations. if you are going to change washington you can try to accomplish through the vote but i believe you will be unsuccessful. i believe not only if you run for office think he will clean up your congressional district if you run into an incumbent with $15 million of money to run campaign ads, some strikingly against you that you would not recognize yourself when they get done with you and running for senate they have 25 1/3 the million but in addition ed did i tell you they gerrymandered and reorganize the entire

congressional district so it is all republicans and to allow that? the democratic crosstown who redo his district so it is all democrats so the reelection is inevitable. i don't think our votes means anything so i am going upstream and following the money and going after the corporation's. how can we get corporations to see it is in their interest to get out of the law of the business and quit giving money to our government? >> one more question? >> what about asian liquidity underpriced asian currencies relative to the u.s. dollar? could any of this have been possible if the liquidity from asia had not been available for put to use in the united states and europe?

>> this is one of the great warning signs that economists now is. for a tender 15 years, we had a great inflow of money from china into the united states. where was it coming from? the average chinese making $1,200 per year and saving 40% of it. the average american making 45,000 per year and had negative savings. did not save $1. this is the first time in the history of the world where the poorest country honored was lending 40% of the and come to the richest country on earth and that should have set off alarms. the story nobody would tell in the media because they are sponsor supported it is clearly americans braun a consumption binge buying anything that moved because there were not spending their money. the chinese making the product cheaply, a lot of the products from wal-mart today would cost 10 times as much if not for

the chinese bree donnelley bought the product but a lot of it because you bought it with their money you they gave you the financing and the product to could avoid that deal? i think it is a huge warning signal. i am not sure it was causal but indicative of the status seeking binge the europe -- the u.s. and europe were on over the last 15 years. >> it looks like we have taken a big standard of living hit and we have roughly 1 million college graduates per year how were these young guys and graduates being absorbed into the economy and what type or what can lead government do to help us with the problem? >> it is a big problem. i wish i were 30 years younger. in the '60s they said don't trust anybody over 30. i am not quite 50 but i am way

over 50 -- 30 i do not know i can lead the revolt of the young people but they need to get into the streets. looking what we have done to them we have caused the collapse of the financial system by ignoring their warnings, we have not repaired it adequately allowing unfettered access, we have borrowed 13 trillion from these young people to guarantee our problems and we have spent $4 trillion of their money, running $2 trillion deficits which i have to pay and in addition social security is $25 in deficit and medicare is $72 trillion in deficit. we're passing the cost of the care of the elderly to our children and grandchildren, not to allow us. we know what they are stuck with these things because they are too young to vote but even now they have come down and big support of barack obama, a

registered to vote in big numbers but still not in the streets are have been a part of this discussion with what to do with the collapse. it does not make any sense to me we would spend $15 trillion of our children's money so our style of living and status level does not have to decline two or 3%. we have 40 said it is unsustainable levels because it is phony lending and money from the chinese problem to be 29 and trustworthy because i feel i could lead the revolution. thank you so much for come ninth [applause] >> teeeighteen a former visiting scholar at ucla anderson school of management and a former investment banker for goldman sachs. he is the author of seven books on economics and politics including "the coming crash in the housing market" published in 2003. for arab more affirmation on

"the 86 biggest lies on wall street" visit seven stories books.com. >> i have to books i am working on write now this summer the first is from a constitutional scholar called liberty and tyranny on the new york times' best-seller list nine out of the last 10 weeks and has sold over 1 million copies and essentially is a trade is why conservatives believe unable it is a fabulous book i have dog-eared the pages and have written notes and have quoted the book

everywhere i go and i urge people to read the book. it is passable -- bad as i am now taking more notes the second time through. also another book that i have heard several times it is called the forgotten man and is so timely because she is writing the history of the hoover years of fdr and the great depression and the forgot man is the american taxpayer who is paying for all of the expense so it is a fascinating story to see how the american economy is it a parallel today in 2009 with the same course of action taken during the great depression. it is very instructive to members of congress and pertinent because if we go with the principles of big

government intervention recede however played out and prove to prolong the depression so the forgotten man is a great book. also i can hear from her personally. the doctor was in the year and he had not yet written liberty and tyranny but there has been so much excitement in washington about the bucket i am hopeful the doctor will come back and allow us to hear from him personally that is the number one but i am encouraging all americans to read the gritty and tyranny and the forgotten man.

>> it is great to be with you and thanks for coming out today. my first shock on the book since it came out 24 hours ago yesterday was the release day. this book is the result of talking about the issues especially to a religious audience and chris gin college students over the past few years we are in an interesting moment to those who advocate the free-market we are all aware of the financial crisis and the bludgeoning the market has gotten unfairly so we're at a critical momentum so if you talk to average college student or someone to set a college you will discover

among the twentysomething crowd there is concern about the environment and poverty especially third world and it is a lot different from i was in college in the late 80's settled think that was a burning concern what was happening in africa or southeast asia bet you go onto a college campus you cannot not talk about this issue. it is an opportunity because religious americans and christians always said we need to be concerned about the poor and learn about our fellow human being. it is a dangerous opportunity because unfortunately follow the trend they are getting very bad economic ideas and unfortunately at risk of trying policies that we know don't work and try again 40 years later. i decide to consider this a lucky opportunity to appeal to legitimate moral intuition but

help educate people that don't really know or care about economics and how best to manifest and apply the moral intuition everybody is talking about this issue and there has been a number of books by the christian intellectuals there is a book called god's politics that is very, very widely read but then he is self-described as a progressive evangelical but what makes indifference they should different he makes the arguments expect to be made by "the new york times" editorial page but does it with the bible verses quoting from the old testament. i think that this way of speaking is very likely to displace the more secular way even on the left. because moral intuition and

religious beliefs are widely held by the american public. even if someone is a secular senate they will probably tried to couch position in terms this is not the case. sider wrote a several books called rich chris chance in the age of longer it started in the '70s and over the course of a few decades he has revised it and over time sider got more and more sympathetic to the economic problems. he admits that in the last edition happened after the collapse of the soviet union so he has more or less purged the prose of the socialist sympathizing language and officially endorses the market economy but all of his policy positions are exactly the same as the years ago. it is not clear how