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YOUR MONEY

The Future of Many Americans At Risk, Depending on What the Administration Does With the Stimulus Bill; Will It Put Americans Back to Work?; How to Have a Conversation With Your Children About the Economy

Aired February 15, 2009 - 15:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


ALI VELSHI, CNN HOST: Welcome to a special edition of YOUR MONEY. I'm Ali Velshi, from the Chicago Mercantile Exchange on the floor of the old Board of Trade in Chicago. This is the place dating back more than a hundred years where businesses come to buy and sell the things that you use every day, food, metals, currencies, energy, things like that are traded on this floor.

They're bought and sold -- they're sold and bought as futures and options and other sorts of contract which is makes Chicago the risk capital of the world, and that brings us to the reason we're talking about this and that is because the future of many Americans is at risk right now. Much of it is depended on what this administration does with this stimulus bill, with the banking money, the TARP Program; the actions that this administration takes now could determine your future.

We want to talk about that with two of our close friends here and our Chicago native, Diane Swonk is with me from Mesirow Financial, she's chief economist there, and Terry Savage is a columnist with the "Chicago Sun-Times" and author and someone who started her career right here on this floor some time ago. This is an exciting place to be.

TERRY SAVAGE, PERSONAL FINANCE ED., "CHICAGO SUN TIMES": This is the center of free market capitalism. It's what makes American business work and it's what makes our country so special that we have free markets, and I'm glad you're here. We're all glad you're here.

VELSHI: But those free markets are being interfered with right now. It's a time that so many of our viewers have never seen this sort of thing. We've seen government intervention at a pace we've never ever seen it before and Diane, that probably goes against what so much you ever learned as an economist.

DIANE SWONK, CHIEF ECONOMIST, MESIROW FINANCIAL: It does go against it. That said I want to save capitalism from itself. I believe in markets and unfortunately, if we don't intervene, the cost of doing nothing right now is greater than the cost of doing something, and I think we have to do something even if it's not the best plan out there.

Unfortunately, there's a reason why the public opinion polls of Congress are so much lower, even when we had our past president than the president and that's because Congress doesn't come up with the best economic plan.

VELSHI: You know, Terry, one of the things that a lot of Americans are not understanding about this stimulus package is exactly what is it going to do for them? We know. We have some details about it. We know that it will result in some money being put in people's checks and it will be an increase in some Social Security spending, some money back on your paycheck, but ultimately, is this going to help Americans get back on track?

SAVAGE: You know, I think the markets reacted with disappointment and Americans did because two key problems it didn't address. One was let's give everybody some money back maybe by cutting the payroll tax. That would have been so easy to do and the second thing and the most painful thing is the number of people in foreclosure. We're past all those speculators that were greedy. These are middle-income Americans who had two incomes and now only have one, who are desperate.

They can't reach their banks, they can't reach these people. If Congress had only passed some kind of restructuring plan or Geithner to come up with one that would give the banks cover to renegotiate those mortgages, extend them, understand that it was not worth what the original mortgage was. We haven't seen that either so individuals are going, uh-oh, where's my help?

VELSHI: We have this major issue in the housing market that really set this recession into motion and now we have a separate issue and that is the number of jobs that we lost, 3.6 million since the beginning of this recession. A remarkable pain.

SWONK: In the last four months alone.

VELSHI: The unemployment rate, 7.6 percent. You are thinking it might go up to 9 percent, but without the stimulus package, you think it would be substantially higher.

SWONK: Way into the double digits, 15 to 20 percent and the cost of doing that in terms of the human toll and the cost to revenues of the federal budget, it's even higher than doing what is in a perfect stimulus plan. And the foreclosures, Terry hit the nail on the head here, we need to change bankruptcy laws so there is recourse on loans, so you can't just walk away from your house. But on the other side of it, you can renegotiate the principal down like we do with businesses every day that are in trouble so you can stay in your house.

Whether we like it or not, if I've done everything right and that guy down the street goes into foreclosure, it takes 3 percent off the value of my house, and if another one on my street goes into foreclosure it is now 10 percent off. We are all in the same boat and I think that's the issue that we really have to get our arms around is that we're in the same boat and we all need to have our oars in the water.

VELSHI: Well, if we are all in the same boat that means the banks will have to participate a little bit more. We'll probably see more from TARP, this is the bank bailout program and we'll hear from the treasury secretary about what he has for the banks, but the banks have got to lend people that money.

They've got to be able to renegotiate some of these mortgages; they have to be able to renegotiate interest rates. You deal with personal finance; I get phone calls, Terry, from people all the time who say I tried to call the bank and they say unless I'm in foreclosure, they're not negotiating with me.

SAVAGE: Exactly, it is a catch 22, banks will also tell you they're trying to modify and people don't open the mail. We need some kind of new structure. We made 400 mortgage modifications. There's been a lot of talk and the problem is talk every day, someone else is losing a home. That's what was so disappointing about Geithner's speech. He didn't come up with a concrete solution.

VELSHI: And there was generally an agreement and I think even he acknowledged that they built up this idea that Tim Geithner will come up with the solution for the second half of TARP and he really didn't. An expression I've been using this week is that we expected a blueprint and we have a sketch on a napkin. It doesn't mean we don't have a plan, but there may be something.

SWONK: There is something there, but it was too soon to have a press conference on it, here's the Christmas present with a shiny bow on it and you opened up the box and you said OK there's nothing inside. It's not that the plan isn't there, it's skeletal and there is no meat on the bone and we need to see some definitive issues. He talked about foreclosure, but didn't set up plans for foreclosure. He talked about principal reduction, but didn't give us any plan for it.

VELSHI: Right.

SWONK: The clock is ticking and that's the reality that Terry and I deal with every day and the clock is ticking on this recession every single moment.

VELSHI: And every extra job that's lost is another family without an income who might be getting government assistance who is not paying taxes, who is not helping the government out of the hole. So this is an urgent issue.

SAVAGE: It's adding insult to injury.

VELSHI: There's this issue of Americans not trusting where the first $350 billion went and how it didn't trickle through the system. Ultimately, though, the banks are going to get most of the remaining money. Is that not the case; is that how it has to work?

SAVAGE: It has to work that way. You know, as much as we don't like it, the reality is it's the only infrastructure we've got. Banks are the intermediary, the only conduit to which you can get a loan right now. The shadow banking system which was your GMAC and all those places that got loans went to a mortgage broker that has been decimated and we need to work with the infrastructure we have.

I think it's also important to know one of things that is a very hard concept to get around, as bad as things are in the fourth quarter; there was a day when I remember policymakers had not seen anything like it. They're running the bank, that triggered the panic and caused this to increase and the FDIC Insurance, insured money market accounts, the run was so severe. In a couple of hours it was worse than the entire depression at one point in time. The fact that TARP came in, it was far from perfect.

VELSHI: But we didn't have a run on the bank.

SWONK: We didn't. They stopped the worst from happening. We saved the patient and we put a tourniquet on a very big wound.

VELSHI: Right and that is something that is hard to measure what didn't go wrong. This could have been a lot worse.

SAVAGE: But next to go wrong is the consumer credit option. The trillion dollars of credit card debt.

VELSHI: And I bet you you're getting calls and e-mail about it, because I've been getting them, too. Thank you to both of you. Diane Swonk, what a real pleasure to have you both here in person or to be here with you. Thank you for having us in your town. Terry Savage, always a pleasure to see you.

We discussed some of the stuff that is in the stimulus bill but ultimately, we know Terry said it's about housing and Diane said it's about jobs. How is this going to affect your job? Was it the right decision that is going to put America back to work?

Stay with us. We're continuing this special edition of YOUR MONEY from the CME in Chicago.

(COMMERCIAL BREAK)

VELSHI: We're coming to you with a special edition of YOUR MONEY today from the CME, the Chicago Mercantile Exchange Group this formally the Chicago Board of Trade, where so much of what you buy, what you eat and what you use to heat your home is traded on these floors. In terms of futures contracts, this is where business gets done in America and we are trying to get business done in a way that creates jobs for Americans and that's when we want to discuss.

The unemployment rate in the United States is now 7.6 percent; more than 11 million people remain unemployed. We have the highest unemployment rate that we've seen in more than 15 years. Will this stimulus plan actually help put Americans back to work? President Obama said it will create or save somewhere between 3 or 4 million jobs. Let's talk about that.

With me now is Stephen Leeb, a Chicago native and the author of a book that you actually have to read it is called "Game Over" and Stephen Moore, editorial writer at "The Wall Street Journal" two friends of our show who can explain to us what they think should have been in this bill and whether they think it will work. Stephen Moore good to see you again, thank you for being with us. This bill is about 65 percent spending and about 35 percent what you might call tax cuts. Do you think that's the right ratio? STEPHEN MOORE, EDITORIAL WRITER, "THE WALL STREET JOURNAL:" No. I think the spending, I think our problem in Washington right now is way, way too much government spending and way too much. We had the huge buildup of the deficits and overspending under George Bush and now we're seeing more of the same. I tried to explain this bill last night to my 7-year-old son telling him a bedtime story, and I told him what they're doing here, David, is they're basically spending all this money and they are taking money out of your piggy bank. This really is financial child abuse, and I think generations will curse us for doing it.

VELSHI: Financial child abuse. Stephen Leeb, you think, in fact, there was too much in the way of tax cuts here that the thing that will stimulate the economy in a way that creates jobs, is the spending that Stephen Moore doesn't like?

STEPHEN LEEB, AUTHOR, "GAME OVER:" I think we have to distinguish, Ali, between spending and investing. If corporations and banks, I mean we should have learned from the private sector, corporations and banks are going to gamble away or gamble half a quadrillion dollars worth of derivatives that doesn't do anybody any good.

But if they're going to invest in factories and machinery that can do the world a lot of good, the same thing with the government, if the government is investing in alternative energies and if the government is investing in technology infrastructure or as in the past in an interstate highway system that can do everybody a world of good and puts people to work and makes an investment in the future.

I've seen all of the distinctions between spending and tax cuts and no one's talking about what to me is the most important distinction and maybe we didn't get it right in this bill, but maybe we'll have another chance and that's the difference between spending and investing.

There's too little investing in this bill and maybe I agree with Stephen Moore, maybe there is a little bit too much spending, but we can get it right. I mean, the government can do it. There are so many long-term projects in this country that would be good for our grandchildren and also good for what we need immediately. It's not in this bill, but this bill is still better than nothing.

VELSHI: Stephen, do you agree with that distinction between spending and investing? We heard a lot of talk about earmarks and pork and a lot of that is out of this stimulus package that is going before the president for his signature. Do you agree with Stephen Leeb though that you can invest in ways that are worth spending money on?

MOORE: Yes. There certainly are investments that are important the government has to make. Things like Steve was taking about roads and bridges, but I've actually read through most of this bill, the 700 pages and you know, the problem, Steve is only by my calculations only 10 to 15 percent of the money is for those kind of high investment things. Most of the rest are for putting solar energy panels on libraries and things like that that have very little return. And the real problem with this bill as I see it is nobody has answered the question where is the money going to come from? Yes, we can create jobs by having the government spend money but we're taking money out of businesses and the private sector and families to do it and that is going to impose a large cost as well. I think overall it's a negative.

VELSHI: Stephen Leeb, how ultimately do you get out of this pickle? We're spending more money than we've spent before with the idea that it will stimulate the economy and theoretically, just explain this to our viewers, what happens here? You stimulate the economy, people start working again, they pay taxes and the government starts to get its money back and they use that money to purchase and that creates demand and then more jobs are created, that's what we're trying to do, ultimately is it not?

LEEB: Yes, you said it better than I can, Ali. That's exactly what we're doing. We have to grow our way out of this. Reagan said it along time ago, Clinton said it. I mean any economist will say it, we have to grow our way out of it, we can't cut now, we have to grow now, but there's a choice between how we grow.

If we grow by investing, I keep coming back to the same point, that's great. If we grow by simply spending, that's not so great and that's an immediate fix and we also and this is what really is bugging people. We also have to be able to fund the banks and that's a much bigger thing to do than pass a stimulus bill. I mean, a stimulus bill gives something to a lot of different people.

VELSHI: Stephen Moore, Stephen Leeb just said something interesting and he said we may not have it right in this bill maybe we will have another chance. Do you believe we're going to go through this a few more times and that there is going to be a lot more money than we've spent.

MOORE: This is really the tragedy of the bill as I see it, we're blowing our trillion dollars here on top of the trillion dollars of debt we already have and the problem is we've run out of options. If this doesn't work we don't have any more money left to do anything new, and I think the real tragedy of this trillion dollar bill. One way to think about this, with a trillion dollars, we can suspend the entire income tax for a year.

That would have an incredible pro-investment, pro-job impact but instead we're wasting money on projects that I don't think will happen with a very high return and by the way Ronald Reagan did not waste money on spending programs he did the big investment tax cuts, cutting tax rates and that got us out of the greatest economic depression since the great depression.

LEEB: What I said is Reagan and every other economist believes the only way to get out of this is to grow our way out of it.

MOORE: I agree with that. VELSHI: The discussion you gentlemen hit on is another one we'll have about the tax cuts and whether we are going to get tax cuts in the future, but we will have both of you back on. Stephen Leeb is the author of "Game Over." I have read it, it is a fantastic book.

MOORE: What about my book? "The End of Prosperity."

VELSHI: Stephen Moore is the author of --

MOORE: "The End of Prosperity."

VELSHI: All right. Both of you thank you. Stephen Moore is not our next guest, but Stephen brought up something that I think is really worth thinking about. He said he had a conversation about the stimulus bill with his kid. How are you going have the conversation about how this economy is affecting you with your children? Even if you don't tell them what's going on, our next guest says they can sense it, so you better know what to tell them.

This is a special edition of YOUR MONEY from Chicago. Stay with us.

(COMMERCIAL BREAK)

VELSHI: This a special edition of YOUR MONEY from the CME in Chicago. We're talking about the stimulus bill; we are talking about this recession we're in. It got very real for 600,000 more families in January, joining the 3.6 million people all together now unemployed in this recession. At some point you have to have a conversation with your kids about this or you might be forced to because you simply can't afford to carry on the way you're going or you may have to move or sell your house.

Our next guest says you have to be prepared to have this conversation with them because if you don't they'll sense something is wrong. Janet Bodnar is the deputy editor of "Kiplinger's Personal Finance Magazine." She joins me now. Janet, you have some very interesting points in an article that you just wrote about and one of them is that I thought really stood out. You may not want to tell your kids of the details of what's going on, but they're going to sense shifts in your behavior, in your tone and your mood. How do you address this?

JANET BODNAR, EDITOR, "KIPLINGER'S PERSONAL FINANCE MAGAZINE:" You really have to be very, up front about it and they'll know what happens especially if you're going to be laid off. There will be no hiding this from them, and certainly even if you're not being laid off, they're hearing it on the news so you have to be up front, but at the same time you have to be reassuring and this is tough for parents because you're the parent and you are the adult, they want some reassurance, and they want some honesty, but you don't want to overload them with information especially if they are younger and they can't process all of this.

VELSHI: They need some sort of black and white information. BODNAR: They do. They do. I think the older they are the more information you can give them. I think the most, one very important thing is and that's important for you, too, is to have a plan. If you say to them, lets say worst comes to worst and you do lose your job, the kids will say what are you going to do? Are you going have food on the table, are we going to have a roof over our heads and you have to be reassuring and say this is the plan; this is what I'm going to do in order to get a new job. A, I'm going to apply for unemployment benefits, but I think that will be OK.

And then you say this is how I'm going to go about looking for a new job. I'm going to network with friends and you don't have to use the word network, but I'll be getting in touch with other people that I know or your mom and your dad will be going out and going to work, for example, to earn extra income or I'll be working part-time in order to earn some extra income, so you have to have that a, b, c plan which helps you as well as the kids.

VELSHI: How much of it do you sugar coat. How much of it do you say it's not a problem versus letting your kids know it kind of is a problem?

BODNAR: Well, you don't want to give them chapter and verse about all of your finances because you're entitled to your privacy, but if you have to cut back on your expenses then you want them to know that. We're not going to be taking the big beach vacation this year or maybe we'll be going to the beach and we're not going to be taking a fancier vacation this year or we're not going to be doing anything over spring break. We're going to be staying home so you want to give them the reality, but again, without overloading them with a lot of details that they can't handle.

VELSHI: You know, Janet, it's tough because so many adults don't understand the complexity of what's going on right now, I can't imagine having to explain this to a kid. There are a couple of instances here. You might be getting foreclosed on and you might have to move or you might have lost your job on a factory town where you have to move and then there's the smaller stuff about cutting back. Being a little more frugal. How do you explain that to your kid that it's not a new cell phone or a new iPhone or something like that?

BODNAR: That's the easy part. You tell them no new cell phone, no new iPhone, those are extras that we could afford when we were both working or when times were better, times are a little tougher now so we'll have to cut back.

You can do good things with teenagers in particular because I've actually done this with teenagers as exercises and just giving them an idea of what your monthly income is or was when you were employed and what it's going to be now. And so, if the income is cut in half or if the income is being cut by a third or whatever, you're going to say, you know, we'll have to make some adjustments and this means we're not going to be going out to eat as often or we'll be looking for specials when we go to the grocery store and you can help.

Bring the kids in on this, I'm very optimistic and I have faith in kids and their ability to rise to the occasion especially when the family is involved.

VELSHI: Pitch in. They can feel like they're being part of the solution.

BODNAR: Right. Or maybe they can help out and step up their baby-sitting or their lawn mowing or other things they do to earn money and help out with the family.

VELSHI: Great advice and encourage people to read Janet's material on this. Janet Bodnar is the deputy editor at "Kiplinger's Personal Finance Magazine" joining us from D.C. about how to talk to your kid; it's really worth spending some time thinking about that. One of the things of course your kids might worry about is the price of food and Janet said you really want to assure them that at least that's going to be there, but you want to talk about the price of food.

About six months ago we were discussing how serious a food price crisis we were getting into in the world. A lot of that is determined right here on the CME floor. We're going to come back and talk to you about food prices and where you can expect them to go even though we're in a recession. Stay with us, this is a special edition of YOUR MONEY from Chicago.

(COMMERCIAL BREAK)

FREDRICKA WHITFIELD, CNN ANCHOR: Hello, everyone. I'm Fredricka Whitfield.

Here are the top stories right now from CNN. President Obama will sign the new stimulus bill as early as Monday. Congress passed the $787 billion plan just 25 days into the Obama presidency. Historic spending and tax relief bill is designed to kick start the economy.

And a two square mile area is still sealed off around the site of that commuter plane crash outside Buffalo, New York. Investigators are trying to figure out why Continental connection flight 3407 suddenly fell from the sky. Fifty people died. The grim task of recovering the bodies is now under way.

Delays up to three hours at London City Airport today, a day after a hard landing. A jet's nose wheel collapsed when the plane touched down. All 72 people on the British Airways jet scampered down emergency slides as the cabin filled with smoke. Nobody was hurt.

Coming up at the top of the hour, the making of a radical. How does someone go from disgruntled to suicide bomber? Now back to more of YOUR MONEY.

VELSHI: Welcome back to Chicago for a special edition of YOUR MONEY. Chicago for more than 150 years has been central to commerce and trade in this country, capitalizing on its location between the two coasts with access to the Great Lakes. The CME Group which is where we are handles 13 million contracts a day, but what exactly is being bought and sold here?

Let's take a look at what is anything on around me.

(BEGIN VIDEO CLIP)

VELSHI (voice over): $1.2 quadrillion worth of contracts pass through here each year. The futures exchanges known as the CME Group, that's quadrillion, a thousand trillion more than the entire economic output of most countries combined. No small potatoes, in fact, potatoes are one of the few things not traded on this floor, butter, cheese, soybeans, milk, live cattle, lean hogs and pork bellies all have their prices determined on this floor.

Prices that you'll ultimately pay at the grocery store and betting on those prices is what this place is all about. As Vegas is to sports fans, CME are to, well, food fans. In fact, it was originally known as the Chicago Butter and Egg Board more than a century ago, an indication of the geographical and commercial importance of Chicago, even back then.

LEEB: Chicago became kind of a central hub and because of that a lot of our commodity trading grew up in Chicago and today Chicago remains the center of commodity trading in this country.

VELSHI: Eighty percent of the trading is now done electronically leaving just a fraction to the traditional outcry traders who yell their buy and sell orders from the floor. In addition to the city's famous architecture, and its hard luck stories, trading has been synonymous with Chicago for more than 150 years. So what does the future hold?

LEEB: The biggest problem in my opinion, facing this world as we look ahead over the next ten years is sorting out the relationships among all these commodities, and that's where a place like Chicago becomes utterly, utterly critical.

(END VIDEO CLIP)

VELSHI: That was Stephen Leeb you just heard from and he's written a book about the danger that commodity prices are headed way back higher. Let's talk about where they are right now and how it affects you on the kitchen table.

I'm joined by Tom Jackson he is an agricultural economist with HIS Global Insight. Tom good to talk with you again. You and I talked during the floods in the summer when we were worried that crop prices were going even higher than they had been. We've seen a run-up in corn, in soybeans and partially because of all the ethanol that was used. We had record prices on so many of the foods that we eat. Where are we now with those prices?

TOM JACKSON, AGRICULTURAL ECONOMIST, HIS GLOBAL INSIGHT: Prices have come off quite a bit. I think corn production turned out better than we thought, certainly better than it was anything through back in June or so. The prices have come off a fair amount and we're still relatively high historically.

VELSHI: Now is that effecting -- have we seen that translate into lower food costs because as prices were getting higher we saw that translating into higher food costs for Americans.

JACKSON: Right, even the food prices I think they increased about 6 percent last year. That still didn't really nearly incorporate the high commodity prices that we saw and so that's why really right now food prices have been pretty flat, kind of leveled off at those high levels, but haven't really come back off yet.

VELSHI: You know about six months ago when we were talking about the high food prices the Department of Agriculture came out with the forecast that said the pace of increase, the rate of increase in food prices is going to be about double the recent average. Is that still on track to be the case?

JACKSON: No, I don't think so. We're figuring on food prices and being about flat this year, but a lot of it is, especially when the forecast came out, they weren't figuring on the recession.

VELSHI: Oil prices were still high, so production costs and all sorts of agricultural production were so much higher than they are right now. A lot of people didn't register how much fuel costs affect farming and agriculture. Let's talk about the future.

Stephen Leeb in that piece that we just showed you, in his book he argues that we're going to slide between recession and inflation. The minute we're out of a recession we're going to see a big boom in purchasing of agricultural commodities and we'll see prices going right back up again. What do you think about that?

JACKSON: It's certainly possible. I think an awful lot of it will depend on world demand. We've known for a long time that there's potential demand out there and on the production side we would be hard pressed to meet all that, but the big key is going to be on the demand side.

A lot of the price run-ups that we've seen over the last couple of years really weren't just U.S. based and weren't just bio-fuels. A lot of that was worldwide demand and really folks in other countries, being able to pay a lot of money for these commodities and that's one thing we weren't expecting a couple of years ago, so that will be the big thing.

VELSHI: Tom, you're referring to the run-up in the price of corn that so many people blamed on the administration's policy of using corn-based ethanol, but as you say, was there real demand in parts of the world for real food. Are we going to learn from that lesson before we decide to turn other food products into fuel?

JACKSON: It's hard to tell. A question like that is kind of hard to answer. I think we'll be reluctant to do that again. I think probably a lot of the better opportunities now are going to be in more things that we traditionally considered waste. So that's where I think we'll go in the future.

VELSHI: Tom, it's good to talk to you again. Of course food remains a primary issue for people so we'll continue to have this discussion. Tom Jackson agriculture economist at IHS Global Insight. Now we've been talking so much about jobs because you've been talking so much about jobs. So many of them have been lost, but there are careers that are growing. There are careers that you can stay in school and learn more about and be prepared to take. There are careers that will be there in the future. We've got those for you. Stay with us.

(COMMERCIAL BREAK)

VELSHI: This is a special edition of YOUR MONEY in Chicago. We're here because we're talking about a center of commerce that is so important to this country. Not only that, it's the center of higher education. There are great colleges and universities here in Chicago and we wanted to turn to one of them to get a sense of what students are going to have in front of them as jobs through this recession and in the end of it. And that's probably useful information for you even if you're not a student, you may know one or you may want to be considering what you are going do to retrain yourself and be prepared for the new economy.

We have with us Lonnie Dunlap; she is the director of Career Services at Northwestern University. Lonnie thank you for being with us.

LONNIE DUNLAP, DIRECTOR OF CAREER SERVICES, NORTHWESTERN UNIVERSITY: Thank you.

VELSHI: You must be getting all of the same questions that our viewers are asking us from your students. What should I be doing? Am in the right area of study? What's going to be big? Tell me what you know.

DUNLAP: We're tracking short-term trends as well as long-term trends. The short-term trends really depend on the skill sets that people have and the best advice I have for folks who are making decisions about this right now is to do a really in-depth self- assessment about where your strengths are because you're going to need to be more competitive than other folks in the market.

And what we know from campus environment is it's a combination of your skill sets as well as your preparation of your job search and your research on your occupational area that really makes a difference. School in itself is an advantage, inherently, but there are tradeoffs when you make decisions about school, you're also making decisions about debt.

VELSHI: And not having an income.

DUNLAP: And the context of the decision is really important.

VELSHI: But given the environment we're in it could be a better decision right now for some people because the opportunity cost of an extra year in school is not weighed against income in some cases because people won't have that job.

DUNLAP: It really depends where you are in the life cycle. VELSHI: Yes.

DUNLAP: So if you are a graduating student and you have four years behind you already sometimes advanced work will make a difference, but sometimes a short-term job in a field could really advance you more than getting graduate program.

VELSHI: OK.

DUNLAP: But if you're an alum who has been out for a while and you want to re-skill you're in a different place than a graduating student. I think also we have to consider the families of both the students and the alums because this is a family experience people are going through right now.

VELSHI: Where are jobs? I'm in this area of study, is it the right place to be or should I switch? What are you hearing? Where are the jobs?

DUNLAP: We are hearing growth in some areas of engineering is high demand on campus. There are areas of government that are hiring. If you look at the national trends in terms of the budget priorities for the national direction of our country.

VELSHI: Right.

DUNLAP: As well as demographic changes as well as employers that are the types of employers that are hiring; it's a combination of all those things.

VELSHI: Well, let's examine some of those then. Health care is a growing field although you've told us that there are doctors and nurses even getting laid off.

DUNLAP: Again, each industry is complex because you can look at some of the bigger changes in health care services, but the hospitals themselves who do the service and the medical care may be struggling.

VELSHI: Right. We've seen hospitals closing even though health care demand is increasing.

DUNLAP: Exactly.

VELSHI: Education is still an area that seems to be showing growth?

DUNLAP: Education is growing and we also have to look at the situation of state universities. They're hiring freezes on some campuses, so I think you really have to look more in-depth than each of the environment. Business has a rep right now for not hiring and they actually are.

VELSHI: Right. That's interesting. Accounting, for instance, is still a growth area.

DUNLAP: Accounting is a growth area and folks can get into accounting for multiple directions, but actuarial work, any time you're looking at settings that involve risk management ...

VELSHI: Right.

DUNLAP: People want to know how to manage their decision making and risk management such as actuarial work is behind that.

VELSHI: We have heard on this show that actuarial work is still in demand. But I think you make an interesting point that we can't use broad strokes and say health care or education. You've got to look at specific skill sets and there may be jobs available within areas.

Now under the stimulus plan there may be different ships in spending and there may be different jobs. How far out should you be looking? Should I be coming to you saying education is good then I should get some kind of a degree in education or should I be saying that maybe five years from now it will be a different situation. Can we see that far ahead?

DUNLAP: I think you have need to have a system in place where you can track that yourself based on what your interest areas are. One approach we recommend is informational interviewing. If I'm in education I want to know what it will be five years from now I'll try to contact the leadership in that field to do informational interviewing to see what is online education, what's the future there?

All of the influence on campus of technology, what's that going to be like? So it's really up to the person to use their research skills and use their networking skills to do a combination of information interviewing and network.

VELSHI: So as much information as someone can get from watching this is not as good as knowing exactly what you're strong in, where you can get educated and where the job might be.

DUNLAP: Right. You take the initiative yourself.

VELSHI: Alum should go back to their colleges and speak to their career centers. Do they still do that?

DUNLAP: Absolutely. At our office at Northwestern we serve alum in career services and the full range. Many other campuses do and we will help folks find what they need if we can't provide it.

VELSHI: Good information. Lonnie Dunlap, director of Career Services at Northwestern University. Thank you for joining us.

DUNLAP: Pleasure.

VELSHI: Well, look, it's no secret that credit is hard to come by, but no matter what your situation there may be an answer that will get even the poorest people in America a loan.

(COMMERCIAL BREAK)

VELSHI: Lending to businesses is in something of a deep freeze thanks to this recession, but there is still one bank that's lending to very small businesses. Some of the poorest in the country. Muhammad Yunus is the author of a new book. It's called "Creating a World Without Poverty" he's also the founder of Grameen Bank which is known as a lender to the poor and its American branch is now a year old.

Susan Lisovicz checked it out.

(BEGIN VIDEOTAPE)

SUSAN LISOVICZ, CNN CORRESPONDENT (voice over): Mary Carrera (ph) doesn't have a credit history, collateral or even a Social Security number, but she still got a loan to expand her business during the worst economic downturn in recent history when many banks won't lend to even the most qualified borrowers.

Her bank? Grameen America. Carrera said she found Grameen Bank through a friend who invited her to attend a meeting. So far she's borrowed $6,000 to start selling shoes in her beauty salon. Grameen is the famous poor people's bank making small loans to impoverished individuals so they can start businesses. It started in Bangladesh 25 years ago to serve the poor there and now it has come to the richest country on earth.

MUHAMMAD YUNUS, FOUNDER, GRAMEEN BANK: What we do in Bangladesh, in the villages of Bangladesh we do exactly as we do in New York City and it works like in Bangladesh.

LISOVICZ: Grameen America came to the New York City borough of Queens just over a year ago; it makes small loans averaging $2,200. Mohammed Eunice, the man who founded Grameen and won the Nobel Peace Prize for his efforts says poor people in American need micro lending just as much as those in third world crises.

YUMUS: How many people out on the list of welfare. All these people are legitimate candidates for financial services. If you can build financial services they can create their own jobs, self employment and create income for themselves and come out of welfare.

LISOVICZ: While banks on Wall Street are buckling because of bad loans, Grameen America reports a remarkable 99 percent repayment rate, Grameen doesn't require collateral or high credit scores but it does demand accountability. Grameen gets to know its clients and creates a lending community for them.

The borrowers, all of them women meet in small groups once a week. They make payments on their loans and talk about what they're doing in their businesses. And they encourage each other to keep paying.

ALETHIA MENDEZ, GRAMEEN AMERICA CENTER MANAGER: These women all kind of support each other. Not to say that they don't fall, things don't happen, problems don't exist, but they all lend a helping hand.

LISOVICZ: Mary Carras says she hope more woman will take advantage of what Grameen offers using a loan to start a business and pull themselves from poverty. And as she says, it's a chance to live out your dream. Grameen America is hoping to give 18,000 borrowers the same opportunities over the next five years.

(END VIDEOTAPE)

VELSHI: Susan, good to see you. By the way, what is with Grameen only lending to women, what's behind that?

LISOVICZ: What's behind that, Ali, is something that Dr. Yumus observed a couple of decades ago in Bangladesh and it holds true in third world countries and first world countries that women are more tied to the home, to the family unit. Men do receive Grameen aid overseas in some third world countries, but the vast majorities are women, 7.5 million borrowers because of that exact fact. That's what you want; you want the family unit to move along to move out of poverty as well, not just one single person.

VELSHI: And let's talk about this, the repayment rate on these Grameen loans that go to some of the poorest of the poor is actually very strong in an environment where even middle class people aren't able to pay back loans, what's behind that?

LISOVICZ: It's ingenious in its simplicity and that it's the way banking used to be done. When my parents bought their home they got their mortgage from people in the community and they knew these people. It was not some anonymous transaction that was sliced and diced and went out to communities all over the world. It is simply getting to know that individual, they meet every week and there is a Grameen representative there and they are eyeball to eyeball and there's a certain amount of trust and responsibility and accountability.

Not only that, what you're borrowing money for is not a piece of furniture or a vacation or something like that. It has to be for an income-generating project. So it is going to help you improve your standard of living and that's something that everybody benefits from, the society as a whole.

VELSHI: It's a great story, Susan and Muhammed Yumus earned that Nobel Prize that he got. And Susan, I am glad to be talking to you trading floor to trading floor again, as you know, I enjoy these floors as much as you do.

LISOVICZ: Like wise, Ali. It is always good to work with you.

VELSHI: Good to see you Susan, Susan Lisovicz.

We are here on a special edition of YOUR MONEY from the Chicago Mercantile Exchange, the CME Group, and this floor is so much fun. These traders out here are determining the prices that you pay for things that you buy. When we come back we're going to gather the best of them around here and they're going to tell you what you can expect.

(COMMERCIAL BREAK)

VELSHI: We're here for a special edition of YOUR MONEY from the floor of CME Group. This used to be the board of trade, but so much of what you deal with gets decided here. I'm in one of the many pits here, what am I standing in here?

UNIDENTIFIED MALE: Zero dollar options.

VELSHI: That's not bread and cheese and bellies and things like that. But ultimately it's the same deal. What do you do here?

UNIDENTIFIED MALE: We're buying and selling in institutions and also local or independent traders. They are all trying to buy low and sell high, make some money.

VELSHI: This affects the prices that people pay ultimately for what they have. What kinds of things do you trade here?

UNIDENTIFIED MALE: S&P 500 and every market is about discovery so that's what's taking place.

VELSHI: But it looks like a lot of fun, this looks like an active environment for huge type a personalities, is that what you guys are?

UNIDENTIFIED MALE: I don't know if it's a type a personality, but it's very exciting working here. We have a front row seat for capitalism right here.

VELSHI: Do you listen to the stuff that we all talk about? Some people say it's all gloomy, what do you think about the way that things are going?

UNIDENTIFIED MALE: We listen more to what people think about what you're saying. We don't really care in these pits what happens over the next six months, it's usually what happens over the next six minutes.

UNIDENTIFIED FEMALE: Or six seconds.

VELSHI: You have to be on top of this where you can enjoy this kind of thing. It looks a little stressful.

UNIDENTIFIED FEMALE: It is stressful. I used to work next door to Ben and he can tell you I yell a lot.

VELSHI: There aren't as many women here as there are men, why is that? It almost feels like a locker room jock kind of environment. That is basically designed around that way men operator.

UNIDENTIFIED FEMALE: I think that would be the way it is. The women that are down here have definitely earned their stripes and they can play with the big boys.

VELSHI: What goes on that we can't put on TV here?

UNIDENTIFIED MALE: We can't put that on TV.

VELSHI: What do you think that our viewers need to think about where things are going over the course, like you said, you worry about the next six minutes and six seconds, but ultimately what's your feeling for where this economy is going?

UNIDENTIFIED MALE: That's is a great comment because we are worrying from beat to beat, if you're out on the street or you're an investor, you need to take a much longer time horizon and evaluate exactly what your goals are and what your targets are. If you're a beat by beat type of people like we are then you're all over it on a regular basis.

VELSHI: When you watch what goes on here, it's like a different language all together. You guys use hand signals. Give me a couple of hand signals.

UNIDENTIFIED MALE: You're basically selling it, you're pushing it away, this is a 5, one, two, three, four, five, this is 10, 20, 30, 40, and 50. This is 60. This would be how you sell six contracts. Selling and buying.

VELSHI: Give me one description of a deal that you would do, how would it look?

UNIDENTIFIED MALE: I would sell 20.

VELSHI: And then over here, I'm buying 20.

UNIDENTIFIED MALE: That's right, he's the other side.

VELSHI: And if you get the total wrong?

UNIDENTIFIED MALE: Then we'll talk later with our checkbooks.

VELSHI: You'll settle it. Thank you all for being here, thank you for the work that you all do.

And thank you for joining us for this special addition of YOUR MONEY from the floor of the CME here in Chicago. We will continue to cover business news for you from start to finish on CNN, watch for Christine Romans and me on YOUR MONEY regularly on Saturdays at 1:00 p.m. Eastern and Sundays at 3:00. Have a great weekend.

(COMMERCIAL BREAK)

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