joining me paul mcculley, managing director of pimco. good to have you on the program. >> thank you, maria. >> it has certainly been a wild ride out there. let me begin with the markets. this week the major indices hit corrections territory down 10% from the recent highs for the dow, the nasdaq, the s&p 500. mostly because of the worries imported from europe. how do you see things? what does this mean for a long-term investor? >> for over the last year we've been talking about the economy being a bumpy journey to a new normal. and we clearly have hit a bump and the bump is emanating out of europe, which is truly having a financial crisis. so i think the markets are rationally de-risking. it's not present but it's par for the course if the course is going to be a bumpy juniory to a new normal. >> it certainly feels like there's a lot of fear out there. do you think this continues? is there more of a correction to come? >> i think it's going to continue until you see an adequate policy response to insure investors that the world of growing

of pimco, the world's largest bond fund. nice to have you on the program. >> thank you, susie. >> susie: let me begin by just asking you what are the risks of all these events, that spanish bailout, the debt crisis in greece, the falling euro. what's the intact and the risk of all of that to american businesses and our economy? >> susie, we went into the weekend knowing that europe had a debt issue and europe had a growth issue. we come out of the weekend with the news that europe may also have a banking system issue. the minute you bring in the banking system it's like an amplifier, something that we discovered in this country a couple of years ago. banks have a way of amplifying shocks in the system because banks are like the oil in your car. they link up so many different parts. and the problem for the u.s. is that not only is it going to have to cope with a growth issue out of europe. europe is an important export market. we sell a lot to europe. europe is going to grow less. now the strains in the banking system. and th

mohamed el erian ceo and co-chief investment officer at pimco. wonderful to have you. thursday was stunning on wall street. intraday decline for the dow jones industrial average down almost 1,000 points before cutting the losses. can you talk to us about the potential of a contagion? tell our viewers what the fear is in this market right now. >> maria, think of a sand mound where grain after grain of sand is being added and nothing happens. and then suddenly, the whole thing starts coming down. that is a little bit what happened this week. a few things were in place. first, people recognized that greece is not a liquidity issue but a solvency issue. which is another way of saying it is very hard to solve. secondly, people realize that it's not just about greece, but it's about europe and potentially it's about the globe. and thirdly, you had a technical hitch, if you like, a glitch in the middle of all this. put all that together and you have massive volatility, people's stepping back from the markets, liquidity erodes and you get these very big price movementses that

so you're pimco and you have a whole fleet of analysts who are out there looking at this. they laugh, right? you made your trade on spain way ahead of the rating agencies, to your point, right? 20% unemployment, deficit of 10%. 13 times defaulting in the past 200 years. so you obviously traded ahead of the rating agencies. i want to know who the dumb money is. who is it that waits until moody's and s&p has made their call and then follows? >> well, to a considerable extent, i think it's those institutions that are forced to wait. to the extent that a company, or a country is rated at a certain level, insurance companies, banks, you know, they're required to dispose of them, or not allowed to hold them. another good example would be gmac. gmac is 65% owned now by the u.s. government and has regained its sea legs, so to speak, but it's b rated. so companies can't buy those types of investments for the most part. banks can't do it because it reduces their capital. the rating services dictate to regulated institutions what they can buy and what they can't. >> definitionally, b

and co-chief investment officer at pimco, a global investment management firm. mark zandi, starting with you what are the jobs number tell you. a lot of jobs across lots of different industries. you know, we have been in recovery for six to nine months. but the missing link was job growth, i think we found it today. very positive report indicates that the economy should do much better going forward? >> and you see it you said widespread among key sectors, fill that in a little bit. >> it was very broad based. it was manufacturing. it was construction, two sectors that have been losing lots of job during the recession. it was leisure hospitality, it was retailing, it was parts of financial services. it was of course the federal government because of the census hiring. almost every sector added a bit during the month and that is a very good sign. >> and mohamed el-erian, what do you see in the jobs market. >> same as mark. we are finally seeing all these cyclical tailwinds translate into job creation. and the question is can this continue given what else is going

you saw pimco saying that the rating agencies really aren't very useful at the moment.ve the eu simultaneously thinking about probing the rating agencies themselves and maybe looking to set up some type of a european rating agency to manage that front. norway, worth mentioning, too. we saw a norwegian rate hike today. so, despite everything that's going on in europe with the potential of sovereign debt defaults, with the greek violence, you're still seeing a rate hike, mark. >> thank you, louisa. for more on the greek debt threat, let's bring in andy bush, global currency and public policy strategist at vmo capital markets and a cnbc contributor. alec young, analyst at standard & poor's. and of course, bob and rick santelli and erin downstairs. i'll start with andy. is this a buying opportunity, andy? >> well, i think this is very analogous to the t.a.r.p. debate that happened in congress. i think it's amazingly so. this week we're having the officials come out and warn about a contagion to scare the german politicians to voting positive on it. it's very similar to volc

have a panel later in the afternoon with participants in the shadow banking system from ge capital, pimcoe street bank. with no further ado, mr. paulson, thank you for being here this morning. i would like to ask you to stand for what is a customary oath of office that we administered to everyone who appears before us. if you would please raise your right hand as i administer the oath. do you saw me swear or affirm under penalty or perjury that the testimony you're about to provide the commission will be the truth, the whole truth, and nothing but the truth, to the best of your knowledge? >> i do expect thank you very much. mr. paulson, we have received your written testimony and we appreciate it very much. and we would like to ask you now, we like to give you the opportunity ever like to obviously here an oral presentation by you without consideration of the time to keep that presentation to know more than 10 minutes. i know you're familiar with testify at the on the hills you probably know there's a light on the box that goes to yellow with one minute, to read when time is up. and if yo

pimco recipients. it appears from documents that we have, that ge was able to keep its, going with this sichuan subs commercial paper throughout this crisis even though of course the general spread over libor increase for all participants, but at some level, a disruption in the credit capacity of ge speaks volumes about the death of what we are seeing, so on september 29 and 30th, you had six telephone conversations. just to put that in context, you probably didn't get any sleep these days but the 27th and 20th was the day that goldman and morgan stanley became bank holding companies, that we can. on monday the 29th, that is the day the dow dropped 770-point. after the house voted down the financial bailout bill. was mr. al mao speaking to you about concerns about disruption in their ability to issue paper? >> at that point, after that famous mutual fund money market fund broke the buck in the wake of lehman's failure had abroad base run on money market funds and you had a broad base run on commercial

pimco recipients. it appears from documents that we have, that ge was able to keep its, going with this sichuan subs commercial paper throughout this crisis even though of course the general spread over libor increase for all participants, but at some level, a disruption in the credit capacity of ge speaks volumes about the death of what we are seeing, so on september 29 and 30th, you had six telephone conversations. just to put that in context, you probably didn't get any sleep these days but the 27th and 20th was the day that goldman and morgan stanley became bank holding companies, that we can. on monday the 29th, that is the day the dow dropped 770-point. after the house voted down the financial bailout bill. was mr. al mao speaking to you about concerns about disruption in their ability to issue paper? >> at that point,fter that famous mutual fund money market fund broke the buck in the wake of lehman's failure had abroad base run on money market funds and you had a broad base run on commercial pa