[Rick Sanchez, Cnn Anchor:] Coming at you now, AIG gets too big to fail. Think about that, too big to fail. That means you and I have to rescue them. But why were they allowed to get so big? Congress says they will investigate.
[Rep. Nancy Pelosi , Speaker Of The House:] This is one glaring example of what bad managers the Bush administration have been of our economy.
[Sanchez:] Obama's solution, McCain's solution. Somebody better come up with one quick, because investors are not buying this one. It is down. McCain's own economic adviser says, McCain could not run a company, and neither could Obama. You will hear it for yourself. Robert Reich, who served as Clinton's labor secretary, joins us to answer your questions on Twitter, on camera, because we are interactive. And amid the economic news, terrorists attack another American embassy all this direct to you, right now. And hello again, everybody. I'm Rick Sanchez. We are coming to you from New York. We are going to be counting down the minutes. We are, in fact, going to be able to put up a clock to show you what the whole world wants to know, how this thing is going to end up today. And thousands of you have been contacting us right here on Twitter.comricksanchezCNN, MySpace, Facebook. We hear you. We have been reading your responses. We promise that we're going to be getting to your responses and your questions and your comments throughout this hour. And there are a bevy of them. Here is what we can say right now. This is definitive $85 billion, $85 billion has not stopped the bleeding. That is not good. Let me show you what I mean when I say this. Wall Street's reaction to the bailout, there it is on the board, the bailout of AIG, it seems to be almost these words are being uttered by investors all over the world. It is not enough. It is not going to work. Well, here in New York, we are an hour away from the closing bell, and we may be looking at a roller-coaster ride from here on in. All throughout the hour, we are going to take you through how this develops, and we are going to take you through it as the roller- coaster ride continues. All right. You see the number right there. The Dow Jones industrial average is in fact down right now. It is about 184. It has been worse throughout the day. The question is, will it do what it did Monday and all of a sudden, in the last 45 minutes, shoot down even more? Here is what one trader has said to one of our reporters quote "People right now are scared to death." All right. We are going to hit the story as hard as we can, so you get all the latest information and get your questions answered. We are also going to be hitting Barack Obama. He is going to be speaking. You saw some of his comments there earlier. Every time he makes a comment or John McCain regarding what is going on today with the economy, we are going to turn it around right away and let you hear it. Also, we are going to talk with some of the smartest people out there, including Robert Reich. He was President Clinton's secretary of labor. But before we plow through this, though, there's two things we want you to know right up front. This week alone, global markets have lost nearly $3 trillion. This is important, T., trillion, $3 trillion. Number two, treasury bond yields today hit a 54-year low. Look, you know what that means? What it means is that people are looking for a port in the storm. Investors are looking for or maybe groping might be a better word for a safe place to put their money. That includes all of us. Let's get right to the market itself. Susan Lisovicz is standing by. Susan, earlier, it was down into the 300s, I believe. Now it is 160, 180-something. What is the market reaction telling us about the AIG deal?
[Susan Lisovicz, Cnn Correspondent:] Well, you know, AIG's work is not over yet. It is as simple as that, Rick. And I think it also says, who is next? AIG is borrowing money from the government at a very high interest rate, and it is under a lot of pressure to sell its assets quickly. So, AIG continues to melt away, its shares eroding another 40 percent. It is a $2 stock right now. This is a stock that was trading at $70, enormous pressure on the last two stand-alone investment banks. Morgan Stanley reported better-than-expected earnings. It made $1.5 billion in the last three months, in its last quarter. But guess what? It is losing more than a quarter of its value today. Goldman Sachs, considered a real rock star on Wall Street, because among other things it really was not as exposed to the subprime mortgage meltdown, has held up pretty well. It is down 17 percent, so a lot of concern about that. But the bottom line is here that, yes, maybe somebody have said people are scared to death, but you have to really try to, you know, try to remember that the last thing you want to do as an investor is to let your emotions run away with you. If anything, this is the time of opportunity. A money manager, a veteran money manager told me earlier today, there is an old adage in bear markets. Don't just do something. Stand there. Don't let your money money decisions, your financial decisions be completely fueled on emotion. These are scary times, but, you know, this is kind of excess that is being shaken out of the system, the excess didn't happen overnight. What happened in the housing market and the credit markets didn't happen overnight. It is not going to disappear overnight. Things are unfolding pretty quickly and it can be scary, but right now, we have pared half our losses on the day. The Dow was down about 400 points at its low, right now down 160, still severe, but not as bad. And, yes, this is the witching hour. It could change rapidly, Rick, so let's just hang in there together.
[Sanchez:] Yes, that is what it did Monday. And I'm so happy yes, you are right, about 55 minutes left in this thing so happy that we have you there, Susan. We will be checking back with you throughout the hour to see how this thing fluctuates. By the way, let's go to you now. Yes, you. Let's go to our Twitter.comricksanchezCNN. This is one of the big concerns. Let's put it up the big board. This is Dwayne. And look what he says. "In a true free market system, shouldn't we let those businesses that are failing fail, so the market can improve?" This has been one of the common themes that people are asking today. And part of it is because this is your money that is being used to rescue these companies. And many of you have been upset. So I am going to be sharing some of that insight that you have been sharing and some of that anger frankly that you have been sharing with us throughout the course of the next 55 minutes or so. It is not just here, by the way. Let me share something else with you. Markets, as I am looking now, markets in Europe and in Asia are down today as a result of what is going on in the United States. In fact, take a look at this. Financial panic in Russia has prompted officials to halt trading at the main stock exchange in Moscow. The exchange had suffered its steepest one-day loss in 10 years as a result of what is going on with an American insurance company. Think about that. All right. This is what I want to do right now. I want to bring in somebody who was one of President Clinton's economic gurus back when things were pretty darn good economically, certainly comparably speaking, right? Professor Robert Reich joins us now from Berkeley, California. He was secretary of labor in the Clinton administration, as you might recall. He blogs daily, good blogs, by the way. And his latest book is called Supercapitalism." Mr. Secretary, thank you, sir, for being with us on this day. Americans want to know this from someone like you who has been there in the trenches. Do you see any light at this point at the end of the tunnel as you look at the things that have transpired over the last 48 hours, sir?
[Robert Reich, Former Labor Secretary:] Hello, Rick. Of course there is light at the end of tunnel. The question is how long does it take us to get through this tunnel and where is to change the metaphor a little bit, where is the bottom? We are seeing a crisis of confidence with regard to Wall Street of a sort that we have not seen since the 1930s. Now, there will be a bottom. There will be light at the end of this tunnel, but will it be six months from now? Will it be a year from now? Will it be two years from now? We just don't know. Nobody knows.
[Sanchez:] Well, look, we can't get out of this until we as a nation really understand how we got into it. Is this is this still the tumultuous result of people getting loans who frankly had no business getting these loans? And I guess the question that Americans would want to know is, who in the hell allowed this to happen?
[Reich:] Well, the subprime mortgage crisis, Rick, was the trigger for all of this, but it was not really the underlying problem. The underlying problem is that, for years, there has been a kind of anything-goes attitude on Wall Street. As long as they were making money, Wall Street traders and executives would be dealing in exotic instruments, derivatives on derivatives, swaps. They didn't even know the value of most of these things. There was no regulation to speak of. And, as a result, everybody really enjoyed the fruits of gambling. The subprime crisis triggered a kind of a well, wait a minute, maybe we ought to know what these pieces of paper are actually worth moments, and that in turn led to a kind of, if we are really mixing metaphors, a kind of emperor's new clothes. People started to say, well, wait a minute, maybe none of these pieces of paper can be trusted, because who knows what they are worth.
[Sanchez:] Well, and I guess what it comes down to is, who was minding the store? I want to talk about that. And there's something else I want to talk to you about. I have read a lot of Ronald Reagan's theories, and one of the things that Ronald Reagan's theories was, he said the reason communism doesn't work is, it takes away your right to fail. Are we today in this country taking away these companies' right to fail? And is that a capitalistic way of succeeding? It reminds me, sir, of the country I was born in, Cuba. So, I want to take that up with you, because this is important. I don't think we can move forward until we get some of this business out of the way and we, as Americans, start to understand how we got in this situation, so we don't go there again. Stand by, Robert Reich, coming back to us in just a minute. Let's take a quick break and we will continue the conversation.