[George Soros, Billionaire Investor:] The housing bubble acted as a detonator that exploded the super bubble that was like in, you know, in an atomic bomb, you have a small explosion that creates a big explosion.
[Roberts:] Billionaire investor George Soros describing the world money crisis and asking why leaders did not see it coming. He also called it "a crisis of a lifetime." Well, joining me now is Chrystia Freeland. She is the U.S. managing editor for the "Financial Times." Soros wrote an editorial today in the "Financial Times" newspaper. And Jeffrey Sachs is an economist and director of the Earth Institute at Columbia University. He's also a special economic adviser to U.N. Secretary General Ban Ki- moon. Jeff, why don't we start with you because you were down at these IMF meetings in Washington over the weekend. What did and didn't get done?
[Jeffrey Sachs, Dir., Earth Institute At Columbia Univ:] I think progress was made actually. There was an agreement among the main finance ministers on the broad outlines of what should be done, protecting the banks, recapitalizing the banks, being up front and forward in the crisis right now. In Europe, there was also an agreement taking core steps. More money has been put into bank capital in Europe this morning. I think it's starting to happen in effect at least of probably putting a floor under the complete collapse. It's not going to turn around this crisis. That's not going to stop a recession in the U.S., but it could stop the collapse.
[Roberts:] It would be nice to know if the basis of our economy is built on something other than pillars of salt or pillars of sand. Chrystia, this idea that the White House is talking about now, completely revamping the way it's going to approach the $700 billion bailout. Not buy up these toxic securities, instead take an ownership stake in these banks, inject a lot of capital in there, recapitalize that industry. Is that a good idea?
[Chrystia Freeland, U.s. Managing Editor, Financial Times:] I think it is. That's what Professor Sachs was talking about. You know, I think that we have moved from this idea that it's just a crisis of liquidity, it's just a crisis of confidence, which is what the toxic debt buyout was focused on, to the idea that there's a real, serious problem with solvency in all the big banks around the world. And what we're seeing now, which I think is encouraging, is an emerging global consensus and what we're going to be seeing it looks like is the big countries of the world going in, taking equity stakes. It's much cleaner. They're just injecting the capital directly and also it's fairer because the governments are going to end up owning stakes in these banks. What I think is important is that now that they're talking about this, they have to act quite quickly, because the fact that this plan is on the table means that private money that might have gone into banks is really anxious. One of the things that will happen if the governments come in and take these equity stakes is existing equity holders will be diluted quite severely. So now is not a moment when you're waiting for this government plan to happen that you're willing to come in with your own $10 billion. And that's why we're seeing some issues with Morgan and Mitsubishi.
[Roberts:] You know, yesterday, Jeff, I was watching the Sunday morning programs. Former Treasury Secretary Larry Summers was on. And he declared that this is worse than the crash of 1987 because it affects not just the stock market, it affects so many other things. But would you agree with that? And is this global coordination that you're talking about, or this idea of global coordination enough to stop it to turn it around?
[Sachs:] I think in terms of the economic outcomes that are going to occur right now, decline of housing construction, surely, big decline of consumption, recession, rise of unemployment, this will be a very, very significant shock. And so I think that it is the biggest of the financial crises. It clearly is affecting lots of other economies around the world. A lot has been said over the last few weeks about the complete collapse, the Great Depression. I think it's pretty clear that's not going to happen.
[Roberts:] But as bad as 1987?
[Sachs:] Well, remember, '87 was a sharp shock financially, but it didn't lead to a massive economic downturn. This one is going to have a bigger effect on the so-called real economy, the Main Street economy.
[Roberts:] You have an article in today's "Financial Times." You look at four consequences of the financial crisis. You say that America's very face of capitalism hangs in the balance. Will capitalism, as we know it, survive, Chrystia?
[Freeland:] I think it will, but I do think that this crisis means that for ordinary Americans who have felt for such a long time that if you put your money in stock, that that you're going to see growth and that will pay for your retirement. It will pay for your kids to go to college. This has really, really shaken people, and I think it's the moment when we saw the Dow crashing that suddenly this crisis became a reality for people on Main Street. So I think it's going to change people's relationship with the market.
[Roberts:] A lot of questions going forward. Chrystia Freeland, Jeff Sachs, it's always great to see you. Thanks for coming in today.
[Sachs:] Thanks a lot.
[Roberts:] Kiran.
[Chetry:] Well, it is 7:30 here in New York. Some of the top stories this morning. Signs pointing to a rebound day on Wall Street after the Dow's worst week ever. Right now, Dow futures are up over 300 points. In Australia, stocks gained more than five percent. Hong Kong's Hang Seng also added more than 10 percent and London's FTSE is up four percent this morning. An American has won the Nobel Prize in Economics. He's "The New York Times" reporter and Princeton professor Paul Krugman honored for his studies on free trade and globalization. And your kids may need a lot more vitamin D. There's a leading pediatric group saying that you need to double the daily recommendation to 400 units for children and teens. The new advise is based on growing evidence that vitamin D prevents serious diseases. The group says formula-fed babies generally get enough vitamin D but breast fed babies as well as toddlers and even teens may need to take a daily supplement. With the economy still dominating on the campaign trail with just 22 days left, the latest CNN poll of polls shows that Barack Obama leads John McCain by eight points. 49 percent to 41 percent 10 percent still unsure. And McCain campaign shifting it's strategy, moving away from attacks and choosing a softer tone. Our Jim Acosta joins me now from Washington with more. Good morning, Jim.
[Jim Acosta, Cnn Correspondent:] Good morning, Kiran. We heard yesterday John McCain saying he's going to whip Barack Obama's you know what. But it's important to know that he said that with a smile. So it's not just the feel of autumn in the air, it's a momentary cooling of campaign temperatures.
[Acosta:] The man once dubbed McNasty may be turning McNice. In Davenport, Iowa, John McCain's provocative stump question "who is Barack Obama?" was nowhere to be found.
[Sen. John Mccain , Presidential Candidate:] Who's ready to lead?
[Unidentified Male:] You!
[Mccain:] In a time of trouble and danger for our country, who will put our country first?
[Acosta:] At a Sarah Palin rally over in Pennsylvania, no mention of Obama's debatable link to former radical William Ayers.
[Gov. Sarah Palin , Vice Presidential Candidate:] Please it is not negative it is not mean spirited to talk about his record.
[Acosta:] It was a measurable dialing down of the rhetoric from one week ago.
[Palin:] Our opponent is someone who sees America as imperfect enough to pal around with terrorists.
[Acosta:] When the floodgates of intolerance were opened at McCain-Palin rallies.
[Unidentified Female:] I can't trust Obama. I have read about him and he's not he's an Arab. He is not no?
[Mccain:] No, ma'am. No, ma'am. He's a decent family man.
[Acosta:] By week's end, the GOP nominee met resistance as he tried to stem an angry tide.
[Mccain:] He is a decent person and a person that you do not have to scared as president of the United States. Now I just now look
[Acosta:] The see sawing message left leading conservatives voicing doubts.
[Unidentified Male:] The candidate himself is saying he's a decent family man. His ad is saying he's a decent family man and a liar and his running mate says a decent family man is a liar and he pals around with terrorists. I mean the dissonance is paralyzing.
[Acosta:] One of McCain's own civil rights heroes Congressman John Lewis accused the Arizona senator of inciting violence by sowing the seeds of hatred, a statement Lewis later clarified. Both campaigns rejected Lewis's remarks then started pointing fingers over who crossed the line first.
[Unidentified Male:] There's absolutely nothing being done in the state of Iowa by our candidates John McCain or Sarah Palin that would incite that kind of thing.
[Announcer:] McCain is resorting to smears and false attacks. Barack Obama launched his first campaign here, not in anyone's living room.
[Acosta:] Obama who has a new ad addressing the Ayers' controversy praised McCain for turning down the heat.
[Sen. Barack Obama , Presidential Candidate:] I appreciated his reminder that we can disagree while still being respectful of each other.
[Acosta:] A McCain campaign spokesman told me the GOP nominee will continue to take questions from voters at town hall rallies saying people remain, "angry with the failures on Washington and on Wall Street." Kiran.
[Chetry:] All right. It looks like we're going to be hearing something new from John McCain out on the stump today. So, we'll have more details on that a little bit later. Jim, thank you.
[Roberts:] Well, the electoral map is becoming harder to predict in these tough economic times. Today both candidates are trying to lock up votes in key battleground states. And our Alina Cho joins us now with more on all of that. Good morning to you.
[Alina Cho, Cnn, Correspondent:] And good morning to you. As you know, a lot can happen in these final days, John. Good morning, everybody. 22 days until the election, all about the ground game. Surrogates going door to door until voters frankly can't stand it anymore, but when the race is still this tight, every vote counts, especially in electoral rich Ohio. 20 electoral votes there. It's why John McCain and Barack Obama are spending so much time campaigning there.
[Unidentified Female:] How are you?
[Cho:] Barack Obama going door to door in Ohio, hoping to win over undecided voters and his rival John McCain campaigning in the state late last week.
[Mccain:] I need you to help me carry the state of Ohio and take the presidency of the United States.
[Cho:] Ohio put George W. Bush over the top four years ago. And it could once again all come down to the state. Our latest CNN poll of polls in Ohio, which averages the latest surveys in the state, has Obama up by three points with five percent of voters undecided.
[Palin:] We are so excited to be here. We also recognized it's going to be a real hard-fought contest here in Virginia.
[Cho:] Both Sarah Palin and McCain campaign separately in Virginia today. A once reliably Republican state. But our most recent poll of polls there has Obama up by four points with six percent of voters undecided. McCain also campaigned in North Carolina today. Another red state that he's being forced to defend. A CNN-"Time" magazine opinion research corporation poll conducted last week suggested the race was a dead heat. So where does this stand in the big picture? If the election were held today, our CNN electoral college map estimates that Obama would win 264 electoral votes. McCain 174 with 100 in states up for grabs. 270 electoral votes are needed to win the White House. So with 100 electoral votes still up for grabs, you can see why the candidates are campaigning so hard in those battleground states. And just like in 2004, it could all come down to Ohio. No Republican has ever won the White House without winning Ohio and in the past eight years, 200,000 people have lost their jobs there. So John, you can bet that people will be going to the polls with that in mind. The economy is issue number one. And as one analyst said, Republicans seem to have total ownership of that problem, fair or not, it's true.
[Roberts:] Yes, the economy is always a big problem there in Ohio, but in the past years, 2004 and 2000, sort of been trumped by this idea, or 2004, 2002 trumped by this idea of security. So
[Cho:] That's right.
[Roberts:] We'll see how much that plays a part here.
[Cho:] And of course, John McCain trying to put a focus on that on his final days as well.
[Roberts:] All right. Alina, thanks so much for that great report.
[Cho:] You bet.
[Chetry:] Our Gerri Willis is logged on, speaking of the economy. She's taking questions about your money right now. Hey, Gerri.
[Gerri Willis, Cnn Personal Finance Editor:] Hey there. 401 [k] s, annuities, student loans, we'll answer your questions, you can still get yours in at CNN.comam, answers after the break.