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tv   Real Money With Ali Velshi  Al Jazeera  February 5, 2015 1:00am-1:31am EST

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from us >> it was a law that helped condo developments stay afloat >> we would have to sell and have to leave our unit >> now, this law is being used to take peoples homes >> there's nobody helping us... >> honest people, losing hope... >> i didn't fight vietnam so that someone could take my property away from me >> hard sell an america tonight investigation only on al jazeera america >> the companies responsible for the collapse of america's economy almost search years ago, should be held to account. but making them write billion dollar checks to settle lawsuits won't do a thing to protect you against the next crisis. tonight i'm talking to a man directly involved with trying to bring these institutions to justice. also, the pay gap between men and women at work what's behind
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it and how do we fix it? >> women tend to negotiate less aggressively than men. >> it can be a double edged tword. >> plus one small step for man one giant leap for american businesses. i'm ali velshi. this is "real money." >> one day after standard & poor's agreed to a $1.4 billion payout to settle charges against it, federal and state prosecutors are shifting their sights to another credit rating agency, moody's. both s&p and moody's get paid to rate securities. those securities market to investors. critics say that's an inherent conflict of interest that really burns investors when things go wrong the way they did in 2008 when toxic securities imploded
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our financial system. now the government contends that s&p and perhaps others, like moody's and fitch, purposely assigned rosey futures, the very guys marketing those shoddy securities and to drum up more business. the defaults were the spark that burned down the housing market and brought on the worst recession since the great depression. seven years later, america is still picking up the pieces and for is once s&p and perhaps moody's will be getting burned. parent company mcgraw hill here is the rub, the company will probably claim the settlement as a writeoff and save up to $290 billion on its next tax bill and shareholders
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will ultimately pay the price and millions of stockholders who own part of mcgraw hill in their 401(k)s. all in the name of making a buck. we talked about the s&p settlement last night with columbia university john coffee. he says it doesn't change anything. >> we still have the issuer pay system and the system means at bottom the rating system is trying to please its client. >> connecticut was the first to sue in 2010. it will receive $36 million out of the total and joining us to talk about whether this punishment fits the crime is connecticut toanch attorney general jepson. what good is a penalty if the
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conflicts of interest that pervade the rating system continue to be left intact? the idea that banks and other issuers of bonds and investments pay these ratings companies? >> reasonable people can differ over whether that issuer pay model is good or not. one thing -- two things have significantly changed since this activity went down in '04 to '07. one is that the ratings agencies know that we're looking at them and in this case for example we got them. we got them dead to right. i think statement of facts is pretty clear. so i think any rational actor, any rational company would think twice before we allege standard & poor's did during that period. the sec the regulators have stepped up and issued very strong regulations that make clear that you can't anymore which is what s&p did, and got away with it, until connecticut and others sued, they will not
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be able to, anymore, it would be illegal for them to mix their analytical models, the ratings side of the business with the profit-making side of the business. now they can try and cheat on that. >> sure. >> but we'll be there watching for them. i'm not saying that the professor is completely wrong at all. but it's -- >> you said reasonable people can differ on whether the issuer pay system is a good one or bad one. i don't get to pay the ratings companies that tell my bank what good i am in terms of being a risk on a mortgage. can reasonable people differ on this? >> i think with the new system with the sec clearly prohibiting the kind of activity that connecticut sued standard & poor's for can be made to work. but again, that's some -- i enforce the laws, i don't make the policies. >> and one of the policies you don't make although i'd love to
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hear your views on it is the idea that some of this penalty about $245 million can be reduced against s&p's bill. i know there are u.s. senators who have tried to change this law. feels kind of gross doesn't it? >> that remains to be seen whether they could get a tax deduction. the federal half of the settlement, the $1.375 billion settlement split between the federal governments and the state, the federal half is very clearly a fine, that's under the federal law. if the way the economics work on these things is, if somebody's not allowed to take a tax deduction, they're not -- they're going to settle at a lower number. so in the end it may not -- the net against standard & poor's may not be all that different from either way. >> i know you again, i'm asking you, i'm holding you to account on this but i know you in connecticut
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and richard blumenthat'll led on this. tell me about standard & poor's to admit that it had committed a fraud. this was a sticking point in the negotiations, they didn't want to do it the negotiators and you on your end wanted them to do it. they end they signed a statement of fact without admitting any wrongdoing. explain that to me. >> we think the facts speak very clearly for themselves. anybody, reasonable person reading those statement of facts would reach some appropriate conclusions. but it's, as standard & poor's to admit wrongdoing would subject them to significant other lawsuits and so it's a little much to expect them to admit that effect, cot could be extension
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stengs for existence exirchtion exist tension for him to do so. >> eight guys that raised their hand. >> you're watching "real money."
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>> silicon valley is the envy of nearly every state in america and almost every country in the world but america's powerhouse of innovation and technology is not the place to find gender equality. a report released this week shows that men in silicon valley with a bachelors degree earn 61% more than women with the same education. that translates into a difference of median income of $34,000 a year.
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this comes weeks after president obama called on congress to pass a law making it easier for women to fight pay discrimination. it is just the latest chapter for pay equity that goes back decades. patricia sabga has the story. >> 1963. president john f. kennedy signed the equal pay law. but 50 years later, the equal pay does not exist. >> i wish i could say it was a big lie but it affects lots of women these days. >> as of 2013, the typical woman earned just 78% of what a man did. but some take issue with that number. including the heritage foundation's rowena
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pacha. >> once you adjust between what men and women make, you see that the wage gap all but disappears. >> one year out of college women earned on average just 82% of what their male peers earned. too blunt an analysis you say? control hours worked, education, employment sector and children and one-third of that gap, some 7% still exist. the question is, why? >> once you've controlled for all these other variables, and literally this is a sophisticated regression analysis then it is most likely discrimination that is responsible. women tend to negotiate less aggressively than men. if they negotiate at all. that's something that the data might not be able to capture well. but it could be a significant contributor to why some women's wages may lag behind their male
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counterparts. >> women could negotiate a little bit more but we also know that it can be a double edged sword for women. we have special names for aggressive women in our cultures. >> in this year's state of the union, president obama called for congress to address the gender wage gap. >> this congress still needs to pass a law to make sure a woman is paid the same as a plan for doing the same work. >> the paycheck fairness act, a bill designed on obama's watch to close loopholes in the 50-year-old equal pay act has repeatedly stalled in congress. >> it is a bad bill in disguise. it purports to help women, but will make them a legal liability for companies. >> number one it's illegal and number two they can't afford to do business without women. >> and with women the sole or primary breadwinners, in
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households with children under 18, gender gap will continue to be an issue not just for women but for the broaders economy. patricia sabga, al jazeera, new york. women continue to be underrepresented in the workforce in every country and in every age group. they also hold fewer than a quarter of senior management positions globally. and here is how the global human resources firm mercer puts it. "distant dream and female , help is a squandered resource. >> you could say countries that had a head start should be moving faster. it's actually not true. they're stalled. so countries like the united states and canada, where you see very high representation of women in the work force, have
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very slow trajectories. countries where they've actually done something pretty radical. they've instituted quotas like the nordics, we could debate those for hours but they -- >> they seem to work. >> -- move the needle. when you manned that you need 40% of your executive committee and your board be women, you'll wind up there. >> executive that has greater parity? >> no question diverse boards actually outperform boards that are homogeneous. good, good agreement there. question is, is the board willing to take up the agenda that we have to be measuring, is this company that i am a steward of really making any progress? and the boards have historically looked at succession planning but they haven't looked for women of talent throughout the organization. they are now demanding to see what do the internal talents
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look like, why are we losing our women faster than our men. >> at mercer this is your business, can you go into companies and say this is where you are not succeeding, where your roadblocks are. tell us what are the most roadblocks? i don't think you're dealing with companies that say we're not looking to promote women too much. >> segmented programs things like generous ma alternates benefits, part time work would actually help. our research shows that those programs if not managed actually hurt. women actually tend to lose their trajectory when they go part time and when they go on maternity leave if they don't have an active sponsor. so the companies that are doing extremely well are staying in contact with those women. they're providing those women health benefits while they're out on maternity leave. they're encouraging them to save in their savings plans they're
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staying connected. >> either you're just offering maternity or flexible work hours isn't enough unless you are doing enough to keep these people engaged. >> it is not sufficient. it is the price to get in from a policy perspective but you need someone from the organization managing it. second big thing, are you really transparent about pay equity. you know certainly in many of the countries we looked at it is a legislative and it's a legal issue right? but the companies certainly in argentina, in the u.s., in germany that are now willing to show their data and are not fearful to say look we've got some gaps but we actually know why, we're fixing them, we are showing you year over year that we're fix being them and they are making more progress than companies that don't. >> let's turn a microscope of ourselves. i'm looking at companies like mercer and you being the president of mercer america,
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that company must have gender equality, the ceo is a woman. but that doesn't solve the problems with gender parenting. >> they do not. i look at every single opportunity i have to promote, i hold out until i get a diverse slate. internal and external. what does that mean? you work harder to find a truly diverse slate. >> you have been in corner offices where the ceo says, i need the best person i can get. i've been in areas where margins are really tight and it's mostly men. >> it might be mostly men but our research shows if you are willing to look at competencies differently, if you look at my organization, 10,000 employees women rarely say, you know pat i have everything i need to do
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this job, i say you have as many of the experience and competencies at the eight guys who raised their hands. >> disastrous housing bubble of the most recent financial cries have given way to fear, says who? robert shiller, correctly predicting the tech bubble. is it time for so-called flight safety and what does that even mean? robert shiller joins us from new haven, connecticut. he is out with the third edition of his book, irrational exub rans. only exuberance. we talked about technology and the remarkable things it does for us and at the same time the
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dangers it poses. and one of the biggest dangers posed by technological advance is the loss of wages and loss of advance. people are frightened by not the immediate future, how the economy's doing for years, but years and decades down the road. >> they are worried not so much about how the economy is doing but how am i going to do? because now there seems to be a lot of shifting around of jobs. and you know, some tech-savvy people might become rich but maybe i'll fall behind. that's the fear. >> bob, president obama has just told us that america's economy is growing, deficits are shrinking. and what are we afraid of? >> the talk is about the next year or two. people are afraid decades into the future, they're afraid for their children because of the fundamental changes that are occurring in information technology.
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these machines do amazing things now. they talk. you can talk to them. you ask them a difficult question, and it answers. your cell phone answers questions. you know, so -- even now taxi drivers, sometimes, use gps rather than their own intelligence because the gps knows the traffic. steers them around problems. it's smarter than they are. they must start worrying. next thing there will be driverless cars. i'm not saying this is all a disaster. i'm saying that people are disaster. >> all right, let me ask you this. one of the reasons you're involved in this discussion is because you're talking about how people are behaving vis-a-vis bonds. now we know that bonds are in for some trouble. you're not calling the bond market a bubble. but the fact is reasonable people can assume that interest rates will go up. they're not likely to go down and that bonds will suffer as a result. what are you supposed to do if you are scared about the future of the economy?
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you've told me on this show housing's not a great long term investment even though your name is closely associated with housing. you wrote in your thesis that got you a nobel prize that stocks are not a great investment, what are you supposed to do? >> save more. we don't live in an environment that looks highly promising in terms of return in all the major asset classes. i think people aren't saving enough. some people are, a lot of people aren't and that's the most important advice to get through now. >> we as a society in particular because of the mortgage interest rate deduction, the mortgage deduction have put more stock in a home than in saving, is that good? wrong? >> people who itemize definitely encourages people buying houses. is that a good thing? i'm thinking it's not so great
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and there are people who are talking about trimming it back. when you buy a house, don't assume you're going to get that deduction. or at least it would be reduced. >> because people, of my parents' ilk have some association of buying a house with saving. they think they're building their asset base and that's safe money for the future. people you say should save more for the future, you're talking about actually saving. >> you should diversify across major asset classes. they're all risky. you just have to save though. it's just life. you could try the live on associates without socialsecurity without doing any savings, there are a lot of people who do that. >> bob shiller is professional
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of economics at yale university. and a prize winning author. race for riches right after this. >> good evening i'm antonio >> the death toll could be much higher than anyone known. >> posing as a buyer... >> ...people ready then... >> mr. president >> who should answer for those people
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>> bigelow aerospace has a bold and some might say outrageous plan of making money from the moon . big tents on the moon. people don't want to live in a moon tent? wrong. wide west of the tent business. reuters outlined what seemed to be the
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regulateing business on the moon. jake ward has the story. >> competitors in a very small emerging market a market that doesn't even know yet that it needs the moon. >> we see the moon as the eighth continent of the world. we want to open that up. >> we believe a hunk of the moon you could hold in your hands could be worth a billion dollars. >> could take cargo to the moon like fedex or freight service. >> they could mount above or below the deck. >> smaller about the size of a coffee table and holds about 80 pounds. >> notice it's like a limb flying saucer. >> the ambition of both companies to build infrastructure on the moon. commercial space stations, miebs , mines for precial
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precious metal. helping to develop their spacecraft with the goal of one day to take their product to the moon. the goal is to develop a competitive market but there's another layer to the competition. to drive 500 meters on the moon and send back hd images in real time. competing for the prize along with 16 other companies around the globe. many of the companies plan to launch to the moon in 2016. astrobotic , promotes splitting the cost with other companies. >> this is red rover our immigrant toentrantto the google x prize. different companies having their messaging and branding and social experiences happen on the
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surface of the moon. >> until now, this is what space exploration looked to americans. apollo missions, a bit of golf not nascar races. but commercial izing is just this. >> this is jimple jim mcde vrvegitt. when you see a creative lander on the moon, there's budweiser or that's or some nascar or some other advertising symbol. but ambiguity into the game. >> innovation is the secret to the future. that's what will enable my grand kids to look up on the moon and
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see lights and towns and settlements and cities maybe who knows. >> jacob ward, al jazeera, san francisco. >> that's our show for today hello, i'm ray suarez. more than 30 million people are insured one way or the other under the affordable care act. but for house republicans coming this far down the road, doesn't mean the massive health care law is safely established or that the fight is over. for the 56th time the republican controlled house of representatives votes to repeal obama care. >> the reality is we are a company founded on the principle of government with consent of the governed. no one was asking for this thing. no one wanted this thi