. >> reporter: linda smith is a nationally recognized child care advocate.interview, she's become deputy assistant secretary for early childhood development for the department of health and human services. big picture. how good of a job are we doing in this country monitoring the safety and well-being of children in day care centers? >> i think i'd have to give it probably an f to be honest with you. >> reporter: an f? >> f. >> reporter: smith says only 11 states do full background screenings that cross check fingerprints with state and federal databases. the rest of them are all over the map. >> reporter: how bad it is? a recent u.s. government investigation found 24 potential cases of registered sex offenders working in child care centers in just 20 states. how is that possible? >> most states are not checking the sex offender registries. >> reporter: we wanted to find out for ourselves just how serious the problem is, so we obtained the name of licensed day care provider in five states. new york, texas, kentucky, florida and georgia, and ran them against

. >> smith: linda thomsen, the sec's chief of enforcement, and one other on this panel were forced out when the housing bubble burst in the spring of '07 and markets collapsed, hedge funds were hurting. >> our economy and our markets will not recover until the bulk of this housing correction is behind us. >> smith: as the markets continued to tank, down 40% by november, hundreds of hedge funds stopped allowing clients to withdraw money or simply shut down. >> in october, it's the worst market we've seen in, you know, maybe 70 years. but bernie's still making money. and why would you invest in the equities markets when you could put a substantial portion of your monies into this fund that's generating very consistent returns, even in this down market? so it was very appealing to the investors. if anything, people wanted to get money out of the equities markets and move them more into bernie because he's the only one making money, consistent money, in this marketplace. >> he stopped buying aig. and he stopped buying citibank. wasn't in his basket. they were always in his basket. and, you