not broad deficit or deficit targets that punt the questions to the future. and with the exception of tax hikes, which in my opinion will destroy american jobs, everything is on the table. >> will, what serious conversation about debt reduction begins by absolutely taking the possibility or discussion of tax hikes off the table? >> not very many serious discussions. i don't know. i remember when i was little, my dad took me to a car dealership and said, this is how you buy a car. i remember they wrote the numbers down on a piece of paper and slid them across the table. my dad's offer was excessively low. that's the only comparison i can make. i look to guys more like tom coburn. you can't question coburn's ideological position. >> i hope you're right. that's what people around me at the speech were saying. it's an hoping salvo. jean, if we wanted to keep our debt at the level that it's at right now, not reducing it just simply keeping it from growing through spending cut, we'd have to cut our spending by 32%, or basically our entire government's budget for discretionary spending, including defense. to achieve the same goal of keeping our debt where it is just through tax increases, so forget about spending can you tell us, the government would need to take in 50% more in tax revenue. bottom line is it seems to me that we have to do both. as i explained earlier, it's simply not feasible to seriously tackle our debt without both spending cuts and increasing revenue. although you will continue to hear some conservatives say, this is a spending problem, not a revenue problem. when is washington going to start reflecting this? >> i think under a couple of scenarios. if we have a bond market crisis, that would definitely inspire people to get busy negotiating and compromising. the other might be if americans stand up and say, you know what? i don't want a third of the federal budget cut. i want to have some of the federal budget cut but i'm also willing to pay a little bit more in taxes. board members of the concord coalition, a deficit watchdog group, said something smart this week. they basically said, look, neither party has the muscle or the public trust to push through a one-sided solution. they don't have the votes for it. so bipartisan solutions are mandatory. it's not an option. compromise shouldn't be seen as giving up or conceding too much -- >> it seems like it does feel like that these days. let's bring roland martin in. treasury secretary geithner says august 2nd is really the day he runs out of options to keep america from defaulting on its debt. part of me wishes he never said that. but it is this climate of fear. is it necessary for politicians to finally reach a meaningful compromise by threatening that the world's going to come to an end? is this not the business of washington? and frankly, don't democrats have some bigger role to play here in saying, we get it, we have to cut a lot and we need some tax increases? >> i'll give you this example. there are people sitting at home right now, they have been extending paying their light bill, paying their phone bill. and until the light company or the phone company sends them a notice saying, at 5:00 p.m. on friday, your lights are going to get cut off unless you pay this bill, then people actually respond. that is the american way. we operate by fear. we wait until the last minute. we sit here and procrastinate. that is what we do. we're very good at that. we're not all about planning and being proactive and going on the offensive. when i watch this conversation, when you listen to speaker boehner, first of all, he throws out trillions in cuts. but he won't specify. i think it is dangerous just to say trillions in cuts. when you also say, frankly, we're not going to have tax increases. now, understand this, you have republicans who will even suggest that if you get rid of oil subsidies, that's somehow a tax increase. and so they tack anything on as a tax increase. democrats also don't want to be honest on this conversation as well. this is the biggest problem that we have. the last point, the american people have got to stop sitting here playing around as well. they can't say, i don't want anything cut. oil companies are saying it. american taxpayers are saying it. and so we have the same problem every single year. >> ali, let me say, roland's right on one point very specifically. winston churchill said, you can count on the american people doing the right thing once they've exhausted every other option. i don't think this is being overplayed. in fact, i would say if we do not raise the debt ceiling and force short-term cuts, you get ready for depression. that's where we are. our economy is that fragile. the debt we've accumulated is that great. we have to cut. >> but your fellow conservatives know that, right? there are some people playing games with, we're not going to do this or that. the people you talk to understand we're going to have to arrive at some compromise both on the debt ceiling and some kind of debt reduction plan? >> yes. i talked about boehner's poker hand earlier. this is the other problem. whenever you have given washington an extra dollar of income, they have made that an extra dollar of spending. it comes in, they spend it out. we need to see that extra dollar of tax increase wills go to reducing the deficit. we have no history to suggest that will happen. >> but the other issue is when you hear republicans say, oh, tax cuts are somehow going to spur the economy, it's going to cause people at the top income levels to begin to hire, that's also not true. >> is that true, jeanne? >> tax cuts help the economy? democrats and republicans both have a point. if you raise taxes too much, you can hurt economic growth. and vice versa. will is right because we don't have the public trust that the tax dollars will be used well. and if our taxes are increases, that that's what it will be used for. that's a hard intangible both parties will have to work toward. >> this is going to be a much easier conversation when we have specifics to deal with. what exactly do you want to go up in taxes and what exactly are you prepared to cut? i think we all agree, this is a much better conversations to have on specifics than in theory. jeanne, roland, stay where you are. will, stay where you are. it's a basic concept. your tax dollars are simply not enough to sustain your government. so i'm going to show you exactly where your money goes and why washington does need a whole lot more of it up next. 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[ bell dinging ] what are you looking at? logistics. ben? the ups guy? no, you see ben, i see logistics. logistics? think--ben is new markets. ben is global access-- china and beyond. ben is a smarter supply chain. ben is higher margins. happier customers... everybody wins. logistics. exactly. see you guys tomorrow. we spend a lot of time on this program talking about the deficit. you might be wondering why it is actually so important. stripping away the politics for a second, without serious measures to cut the united states debt, your world could be very different in just a few years. here's why. by 2020, if nothing were to change, spending on social security, medicare, medicaid and the interest on our debt is on track to use up 89 cents of every dollar that the government collects in federal tax revenue. that means only 11 cents of every dollar will be left behind to fund everything else that the government does. jeanne, if we're on a path that is simply unsustainable, how quickly do we need to make changes? how urgent is it that we actually tackle this? i'll tell you the reason i'm asking. people say this is a republican scare tactic. >> what's the republican scare tactic? >> that this debt is the biggest economic problem we face. >> it's a math scare tactic. a lot of nonpartisan deficit experts say this is a problem. they want to start sooner rather than later not because we can't make it at 2020 without making any changes. we probably can but we don't know what the consequence will be. we want to make changes sooner rather than later to give people more time to prepare and reduce the market risk that eventually the bond markets will turn on us -- >> the risk that eventually other people who invest in the u.s. dollar or in u.s. bonds, treasury bonds will say, i'm not sure the u.s. can pay those bonds, so i want more interest in exchange for taking the risk of investing in the united states? >> that's correct. nobody can swear that that will happen in the bond market. but a lot of people think we are increasing the risk the longer we take to get our balance sheet in order. >> roland, we'll be reminded that nobody thought that letting lehman brothers fail was going to send the market into a tailspin. is the public -- are we ever going to react to that potential disaster before it occurs? you said it a while ago. we get backed into this one, it could be very serious. >> let me use exactly what has taken place over the last three years. that is when you saw individuals, people watching this show right now, make some of the most ridiculous economic decisions and that is trying to own a home and a second home, trying to have jet skis and boats, vacations, huge credit card debt. they saw individually how their lives collapsed economically. and so you can take that same scenario and apply to the federal government. right now, if you are spending -- the money that's coming into your home, if you're making $40,000 and you're spending 80% on housing or you're spending 70% and then the other money, let's say, on food and gas, then you look up and say, wait a minute, i only have 2% or 3% left to spend for my child's education, you're going to have a problem to pay for their education. and so the people at home have to understand like that. how do i apply it to my life? it's the same exact example. and we see now how folks have changed their lifestyles as a result. washington has to change its lifestyle, its spending habits, its ability to deal with the dollar. >> so we're all agreed here that this is serious. will, you and i also agree that simply taxing the rich is not going to solve our problems. there are a lot of rich who need to be taxed more. but name me the politician who is going to tell the majority of americans the truth, that in order to deal with this issue, things need to be cut. but it is also a revenue problem. it's become a republican bumper sticker that this is not a revenue problem. the middle class is going to have to pay more in taxes to sustain the government that we have. >> you have to look for the guys who are willing to tell their own constituents what they don't want to hear. this is where i hold paul ryan in high esteem. nobody wants their medicare touched. paul ryan said, guess what? it has to be touched. i think the honest proposal from democrats in response to that would be, guess what? we can't balance the budget by taxing just the rich. middle class, you're going to have to pay more, too. a democratic politician needs to tell everyday americans, if you want to keep the government the way it's going now, you have to pay more in taxes, a lot more in taxes. >> actually congressman bobby scott of virginia actually said the exact same thing. when they were talking about extending the bush tax cuts, he said, we can't afford any of these, even for the middle class. he's been one of those voices -- >> roland, that's rare. there's not many democratic -- >> i've got two names out of 535 elected politicians in washington. >> that's exactly my point. you don't have people because also the political system we have set up, you have these safe district, then you have the competitive districts. then you have people who are also going to the ideology. that's part of the problem. >> politics is getting in the way of solving this problem. i nominate the three of you to sit down and solve this country's problems. will, jeanne, roland, always a pleasure to have you on and helping our viewers understand this a little bit better. oil companies making billions in profits. so why do they get tax breaks and if we take them away, does that lower the price you pay for a gallon of gas? [ male announcer ] for fastidious librarian emily skinner, each day was fueled by thorough preparation for events to come. well somewhere along the way, emily went right on living. but you see, with the help of her raymond james financial advisor, she had planned for every eventuality. which meant she continued to have the means to live on... even at the ripe old age of 187. life well planned. see what a raymond james advisor can do for you. hey, dad, think i could drive? i'll tell you what -- when we stop to fill it up. ♪ ♪ [ son ] you realize, it's gotta run out sometime. ♪ personal pricing now on brakes. tell us what you want to pay. we do our best to make that work. deal! my money. my choice. my meineke. welcome back to "your money." christine romans, host of cnn's "your bottom line" joins me along with alfred edmond and leigh gallagher. when gas prices go up, people are quick to point out the profits of the oil industry. they're big. take a look at this. this is just for the first three months of this year. exxonmobil, nearly $11 billion. bp, $7 billion, shell and chevron, pbt $6 billion apiece. adds up to about $38 billion in just three months for big oil. this week, ceos from the five major oil companies were grilled by senate democrats on whether their companies should be getting billions of dollars a year in tax breaks and substance diswhen they're looking at profits like this. the testimony was testy. exxon's ceo rex tillerman said the tax changes under consideration are discriminatory and counterproductive. then there was this exchange. take a look. >> i have a chart depicting what i expect this hearing to turn into. >> who's the horse and who's the dog? >> well, you'd have an easier time convincing the american people that a unicorn just flew into this hearing room than that these big oil companies need taxpayer subsidies. that's the real fairy tale. >> slamming big oil has become an annual tradition on the hill. leigh, what do consumers worried about gas prices get out of a hearing like that? >> there's a lot of theater here. we saw this in 2008. there was a cry again to tax the oil companies, to tax their bonuses. the interesting thing to take note of is oil company profit margins are actually much, much lower than those of financial services, of pharmaceutical companies, of tech companies, for sure. not that this company needs tax breaks. i would argue that no company in corporate america needs any more tax breaks than they already get. that's the big sad truth about our tax system. but what we're seeing here is theater. and this is topic du jour. this plays very well in people's homes and in people's daily lives. >> alfred, talk to me about this. it does feel like that in tough times, we get angry about profits. is it a little un-american to all of a sudden decide profits are what make you evil? >> well, absolutely. we want companies to be profitable. i've said this on the show many times. we don't want unprofitable companies. but the problem with these hearings is that the target is really the same target as those spamers who send you e-mails saying, if you don't buy gas for a day, it's going to affect gas prices. it's not. what i say is that the oil companies have to do a better job of explaining the relationship between what they do and retail gas sales, which they are not in the business of retail gas sales. it's hard for them to argue they need the tax breaks, they could be doing a much better job of helping people understand how all this works. >> before we tell everyone it's wrong to be mad at the oil companies. what part is legitimate? >> in chuck schumer and orran hatch found something funny about it. manufacturing a tax break isn't fair if it's an oil driller, some say. and the royalties they're paying for drilling our oil out of our land, they try to roll that back in as well as their -- but the bottom line is, when money is running out, you have big deficits and everyone's looking for money. we all start fighting about money. that's what this is. >> that's so many of the feigs we've seen. let's talk about your home prices. according to a new report, they continue to fall. down 30% since their peak back in 2006. the median price for a single family home now just shy of $160,000. if you're a homeowner, you can blame all those foreclosures and empty houses in your neighborhood for bringing down the value of your home. if you're a home buyer, it's good news. why are homes at low prices with low mortgages not selling like hotcakes? one clue might be found in this report from the federal reverse. while overall consumer loans are up, mortgages are not seeing a similar rebound. is this another sign that owning a home may not be part of the american dream? >> i think temporarily and very, very temporarily. but the truth is -- this is a symptom of a much bigger problem. people are struggling to regain income. people are struggling to regain jobs. they're very tentative about taking on something as big as owning a home. so i think this is a snapshot in time of what goes up must come down but also what goes down, must come up. >> we're hearing a quarter of everybody who amriz for a mortgage -- assume by the time you apply for a mortgage, you might have a sense that you'll get one. a quarter of the people are getting rejected. >> the numbers are going in the wrong direction. foreclosures are up, prices are still falling. this is not the way it's supposed to happen. this is really, really a little bit unexpected. there are some bright signs. inventory is going down. but foreclosures are bad because they drag down all prices and the pr prices go down, the more people get under water. and then they default. that adds to foreclosures. >> for some people this is good. if you do have credit and you have enough money for a down payment and you're planning to live in a house, this is the deal of a century? >> the real deals are being had by very sophisticated investors who are going in with cash. 35% of home sales in march were cash home sales. they don't care about lower interest rates and being denied by the bank. they have the money. >> those with money are winning this game. >> those with money are starting to make money on a depressed asset, i start to think, if we could all figure out a way to get in there -- >> might mean these things are starting to get a little bit better. "fortune" had a cover saying the housing industry is coming back. this is very interesting. we're going to talk about it on the other side of the break. being in a good school district might help the value of your home but should the quality of your child's education be determined by your zip code? coldwell banker. we never stop moving. rfrfrfrfaces clean, you'll want bounty extra soft. in this lab test bounty extra soft leaves this surface 3x cleaner than a dishcloth. super clean. super soft. bounty extra soft. in the pink pack. [ woman speaking chinese ] thank you. do you have an english menu? no english. [ speaking chinese ] [ gasps, speaks chinese ] do you guys like dumplings? i love dumplings. working with a partner you can trust is always a good decision. massmutual -- let our financial professionals help you reach your goals. welcome back to "your money." some parents are going to go to extreme measures to make sure their child receives a quality education, even to the extent of lying about where they live to get into a better school district. this is not altogether uncommon. we've seen it in ohio. this week we saw it in connecticut. but it's a nationwide problem and it begs the question, should the quality of your education be determined by your zip code? what we saw in connecticut is a woman who has been charged with larceny for stealing the value of an education because she got her kid into a school in a district that was better than her own. alfred, what does it come to that we're stealing other people's zip codes -- >> it's a much bigger problem that public education is financed locally. so, yes, if i live and i'm paying -- i happen to live in a community where i'm paying five figures in taxes each year to support the local school system and someone not paying those taxes is getting into that system, i may feel like i'm being stolen from. the larger issue is that because of the way we finance public education, you are going to get a better education depending on what zip code you're in. >> it shouldn't determine what kind of education you get, but it does. in my school district -- i moved to a town that has a quality public school. and i pay the taxes that reflect that. but when you call this district office, it says press 1 for hours, press 2 to talk to the principal, press 3 for the anonymous residency hotline, you can turn people in. i asked other parents -- this is normal. they're trying to root out -- some schools, steve perry says some schools hire public investigators to check out everybody's address and make sure it's -- >> ours does as well. >> clearly connected to our employment issues, to our competitive issues. every parent, no matter how bad the situation is would like their kid to get a good education. shouldn't we be entitled to do that in the public school system no matter where you are? >> we could argue it's not a criminal move. but you have to set the boundaries, otherwise, some schools would be packed and others would have no one in them. our school system needs better funding and better teachers. until that's solved, we're going to see more of this. >> people who are advocates for vouchers, like to use this as an example why you should be able to take your money -- they like to look at it -- people who support reform and more money for public schools say, no, this is a good example of why all schools need more money and reform. >> every person that gets caught, we see a couple of high-profile situations, there are probably hundreds who don't, who figure out a way around the system. we really need to look at the larg larger infrastructural issues. >> no simple answers. >> here's another one. students across the country are gearing up for summer break. and some are asking, should they be? could that time be better spent improving math, science and reading scores? should kids be allowed to be kids during the summer? america does not do well in international comparisons on math and science. we're in school 180 days a year. but guess what? the country at the top of the list, finland -- they're in school 190 days. south korea, they go to school for 220 days. i used to think, why not keep them in school longer? >> i'm a big believer in summer jobs to teach kids responsibility. and there is a case to be made for that. on the other hand, this is some -- they call it the spring slide or summer slide, kids forget stuff. is it going to be easy to get kids to go to school year round? no. but they're already doing it in houston and chicago and in some places. >> the parents may not mind i. >> you have to figure out child care changes and all that. but the other thing is we talk about these different zip codes. do we really want to have a whole year of education is the education is not good? are we necessarily wanting to spend more money -- >> each income level has to have a solution tailored to their needs. but even with the summer job situation, a lot of low-income kids can't get summer jobs. and you have a lot of kids at middle and low income who are kind of spending idle times. they lose with the academic slide and they come back and they suffer. and in the long run, the long-term implications of that is a poorer-performing workforce. >> here's something most of us didn't learn in school. it's in scrabble's diction ri now. the word game is adding slang. good business decision or the sign of the apocalypse? christine? >> yes. >> yes, what? >> it is a good business move and it's a sign of the apocalypse. yes. >> alfred? >> as a scrabble buff and scrabble fanatic, it hurts me. i think the great thing about scrabble -- my mother used to play with us as kids -- it really does force you to expand your voe kcabularyvocabulary. >> and i don't have anything against slang, but -- >> they could make a slang version of scrabble. >> oh, thank you. >> just one slang version. >> the ebonics haters are going to -- >> i have no problem with words like tweet or bling, words that are -- but i haven't even heard isn't it until today -- >> thank is not a real new word. >> new words that are part of the zeitgeist, i'm totally fine with. but slang is a travesty. >> kids these days. we just lost all our kid viewership here. thanks to all of you. it's always a pleasure to have you all here. leigh, alfred and christine. if a dealership sold you a car with no brakes and took out a life insurance policy on you, you'd be demanding criminal charges. some say that's exactly what goldman sachs did to its clients without standing trial. we're adding new cell sites... increasing network capacity, and investing billions of dollars to improve your wireless network experience. from a single phone call to the most advanced data download, we're covering more people in more places than ever before in an effort to give you the best network possible. at&t. rethink possible. in an effort to give you the best network possible. luck? i don't trade on luck. i trade on fundamentals. analysis. information. i trade on tradearchitect. this is web-based trading, re-visualized. streaming, real-time quotes. earnings analysis. probability analysis. that's what opportunity looks like. it's all visual. intuitive. and its available free, wherever the web is. this is how trade strategies are built. tradearchitect. only from td ameritrade. welcome to better. try new tradearchitect and trade commission free for 60 days. if you've been waiting to see a criminal conviction in the wake of the financial crisis, this was a good week for you. raj rajaratnam, the hedge fund titan accused of insider trading was found guilty of securities fraud. some was obtained from goldman sachs dealing with on ongoing investment. matt joins us. carl levin says criminal charges can be levied against goldman sachs. based on that, subpoenas could be dropped by the truckloads but the justice department still seems reluctant to move forward. assuming the viewers today have not read the article, lay out your case in short form. >> the levin report is a 650-page document, and to put that into as short a hand as i can possibly make it, they're saying that late in 2006, goldman sachs realized they were sitting on a time bomb of toxic mortgage assets that they conspired to unload those assets on their clients and then bet against them at the same time. and then later on, the report also sort of lays out that in the process of investigating this issue, the senate questioned goeldman. they had testimony in congress and it lays out that goldman lied about it -- >> lied to congress. megan joins us. has matt laid out a convincing case? >> if you notice,e eliot spitze didn't secure a lot of subpoenas despite the convictions he laid down. he got settlements from some firms. it wasn't clear the firms had done anything wrong. a firm dependent on capital for its lifeblood, once you drop a subpoena, they have to settle a deal even if they didn't do anything -- >> goldman has done that elsewhere. but, matt, you've been on this case a long time. one might think you have some kind of an issue with goldman. but you definitely think they've done something wrong? >> absolutely. i don't think anybody could read this report and not see that goldman definitely conspired to sell assets that it itself did not believe in on unsuspecting clients. one of the great e-mails in this entire document came after they sold $100 million worth of a deal called timberwolf on an australian hedge fund and they're celebrating afterwards. and one guy says, we found a white elephant, a unicorn and a flying pig all at the same time. in other words, we found the ultimate sucker. >> while regular people were actually affected by these toxic assets that goldman was dealing in because they might have been in their pension funds, generally speaking the other side of the deal, one of those goldman deals, was always an institutional investor. why wouldn't those institutional investors have done the necessary homework to understand that goldman was selling them junk? >> well, i think the fair argument is these investments are incredibly complicated and it's very hard to know what happened. but the fact is that we generally assume that an institutional investor, like a pension fund or a hedge fund has the intelligence, the know-how and the motivation to figure out what's going on on the other side. so we don't offer them the same protections we offer ordinary investors. >> i think we've probably learned it seems they don't -- >> if i could jump in, ali. there's definitely a legal standard that requires an investment bank like goldman sachs to disclose adverse elements of the deal, like they had a $2 billion short position -- >> you're saying they had a legal obligation to tell somebody they were selling an investment to they had a $2 billion bet against that investment? >> absolutely. >> if i could jump in here. >> goldman in that deal even said affirmatively that their interests were aligned with the client because they had a $6 million stake in that same deal. but they didn't disclose they had a $2 billion bet against the deal. >> megan? >> inherently someone who is tell selling you an asset is going short that asset. markets are made by people betting one way or the other. and what you have to do -- >> i'm not sure that makes sense for an investment firm, though. >> what we have to do is disclose. it's perfectly legal for a dealership to sell me a car i'm not going to like or that's too expensive for me. it's not legal for them to sell me a car that's not what they represented it as. that's what happened here. he's gone through these documents and says that a lot of these things were disclosed, that in fact goldman laid out in very lengthy detail all of the ways in which this could go wrong. i haven't read the disclosure documents personally. >> i have. >> there are two dueling versions of the story. >> matt, you've read them? >> i've read all the documents in this report and talked to some of the principals in this entire story. i definitely know some of the client that is goldman was talking about were completely blindsided by the fact that they were buying assets out of goldman's own book when goldman was buying them off the street. they didn't make disclosures that they were legally obligated to make. >> i think matt wants to see somebody from goldman arrested or charged. what do you think has to happen? whether or not you think goldman broke any laws, any of us who followed this got the impression that they were perhaps not dealing in the best interests of some of their clients. >> i think they probably aren't, just like most vendors aren't always -- look to their own interests before the interests of their clients. but here's the thing. there is a real desire to have a sense of closure on this, a desire to track down a villain, figure out who did this to us. and that underweights the power of human stupidity and poor system design. it can produce terrible results -- >> you're not ashamed to do what you do. i can't believe you're apologizing for these people who were ripping off -- >> a hedge fund is not an ordinary -- >> they ripped us off. how do you answer that? >> how do i answer that? i think that, in fact, they do deals with big banks. there's questions about how we should have done those bailouts. but it's not goldman sachs' responsibility to make sure that morgan stanley makes money. >> i'll leave it right there. >> i don't know how that makes sense on any planet in any universe. >> last word to you, megan? >> well, i think that it's very morally satisfying to try to track down people who did things to us. but i think in the end, justice wants to make a case that goldman didn't just do something that we don't like. they want to make a case that goldman did something illegal. in the aftermath of this crisis, what you get is a lot of cases brought that fail. eliot spitzer didn't make his cases. a lot of rudy guiliani's cases ultimately fell apart. even some of the enron stuff has been falling apart. it's a lot more difficult to track down -- >> not that this conversation could have been a lot better. but we hope someone from goldman sachs would participate in the conversation. they didn't. rereached out to them and they gave us the following statement -- with respect to senator levin's remarks about misleading testimony with regard to the big short, the testimony we gave was truthful and accurate and this is confident -- we did not have a massive net short positions because our positions were largely offset by our long positions. i will just explain to our viewers that long positions mean you're buying something with the understanding or hope that it will increase in value. when you are short on something, you are betting that it is going to lose value. and that's what this hinges on. matt and megan, the article's worth a read. it stirs the pot a little bit. any one of you can invest in the next hot start-up company before it goes public. i'm going to show you how when we come back. [ male announcer ] nature is unique... pure... and also delicious. like nature valley. granola bars made with crunchy oats and pure honey. nature valley -- 100% natural. 100% delicious. we devote every second of every day figuring out how to give our clients a better mortgage. maybe that's why j.d. power and associates ranked us "highest in customer satisfaction in the united states." so, we thought we'd take a little time to celebrate. ♪ all right, then, back to work helping clients. individual attention from our highly-trained mortgage professionals. one more way quicken loans is engineered to amaze. twenty-five thousand mornings, give or take, is all we humans get. we spend them on treadmills. we spend them in traffic. and if we get lucky, really lucky, it dawns on us to go spend them in a world where a simple sunrise can still be magic. twenty-five thousand mornings. make sure some of them are pure michigan. your trip begins at michigan.org. it's true. you never forget your first subaru. a lot of the news we get, we cover on "money" at cnn comes from money.com. cnn money revamped the website. the new page, this is what the home page looks like. it will always have a big story up here and the latest stories, you can get quotes on the site. it will also tell you what the most popular stories are along the side here. a lot of great advantages. for those of you who use tablets or like the way they work, there's a tablet on the side of the page and you click it and you get a tablet view of these stories. if you use an ipad or one of those devices, you can use the tablet view as well. if you have been trolling this site like i have, and i enjoy doing it, you might have come across this story earlier this week, groupons do or die moment. it's talking about the startup, groupon, the daily coupon website. it's expanding, changing its business model. it's been called the fatest growing startup in history, expecting sales to top $3 billion this year, not bad for a company that is two years old. investors have made millions on startups like groupon. there are ways to get in on the action as well. the question is should you, and if you should, how do you do it? i want to have that discussion with matt mccall, the president of penn financial group. matt, you get the vibe about these new companies, newly public companies and ipos. how does the average person get involved in this and should they? >> should they is a real big question. you take a lot of risk. a lot of these companies aren't publicly-traded. it's very difficult, first of all, to get shares to invest in these companies. second of all, not a lot of information out there about these companies before they go public. and even more importantly, a lot of times you can actually get into this company, but your money is tied up for years. you can't sell it tomorrow. >> you look at a company like facebook or groupon. if there's an ipo, an initial public offering, usually the people who get those first shares are investment houses and their good clients. generally a guy like me is not going to get stock on the first day unless i buy it on the open market. is that wise? >> no, that's not wise. what happens is typically they price an ipo at a certain price, let's say $10 per share. that stock may open that first day of trading at $20 a share. you're paying twice as much as a guy who brought it the day before. >> which is a private sale. >> investment banks can get in. what you want to do is wait a few weeks and watch the action. zip card just went public the last couple weeks. stock came up high 20s, fell to the low 20s. a lot of investors called me that day that wanted to buy at the high rate. >> even though it fell, if you were one of the pre investors, the smart money that you and i can't be, you probably made money on that. >> still up money right now. a lot of people that get in pre-ipo can't sell for the first six months or so. there's a lot of risk that goes along with that. >> one example is a company like google where that would have made sense to buy the first day. how do you know? all this nonsense about the first few days or weeks or months is absolutely true, what if i think groupon is a great company or facebook is a great company when it goes public one day. when should i invest? >> what i do, zipcar is a great example. you take it and compare it to similar companies. let's take hertz. hertz is trying to become the next zipcar. you say, well, zipcar is losing 95 cents a share in the first quarter. is now the time to jump in? probably not. be patient. let it come to you. >> that's a good point. be patient. let the stock price come to you. is there a way to invest in startups using either an exchange-traded fund or a mutual fund. >> what there is, power share's private equity exchange. what that does, invest in a basket of private equity companies. what they do, they own a lot of company that is are private and will' rently take them private. they own other companies that are privately traded. it's one way or the investor to get in there. this is up 23% and pays a 4.6% dividend on top of it. >> if you're dieing to invest in a company before it's a public company, that's your way to do it. >> that's your only way for the average investor. unless you're sitting on hundreds of milliontion, then you can call your broker. >> matt mccall, great to have you on. why congress needs to stop meddling and let the agency designed to protect you do their job. my xyz is next. by allergic inflammation? 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[ male announcer ] cardboard no, delicious yes. time now for the xyz of it. next week on this show we'll talk with harvard professor elizabeth warren. the consumer financial protection bureau was her idea. she may well end up running it. the agency hasn't even opened its doors and already under attack. 44 republican senators are vowing to block confirmation of any nominee to head the bureau unless major changes are made to curb its authority. 44 republican senators want to confirm the first and only consumer protection financial bureau. they want to replace the director with a whole board and subject funding to appropriations, meaning good-bye independent agency. i'm not saying the bureau is perfect as it's written. this smacks of an obvious effort to gut an agency that frankly was watered down to begin with. my question to you 44 republican senators, who exactly are you trying to protect? what is it about protecting consumers that rubs you the wrong way? can't have it both ways. you either want more protections from predator financial actors or you don't. whose side are you on? you point out the consumer protection financial bureau will directly affect every american by limiting what financial products they can buy. yeah, that's exactly the point. banning the kind of loans that led to the financial crisis is a win for both consumers and the banks because borrowers will know what they're getting into and banks won't be able to take on the kind of risks that almost drag down our entire economy. enough with the