Over the next few years big decisions will be made in Washington on jobs, the economy, taxes and deficits, energy, education, war and peace.

Because the government now owns 90 something percent of the company.

My responsibility is to keep the company solvent.

And so when the Federal Reserve or any Central Bank prints money, and it buys debt, it goes out into debt markets and it buys it, it usually buys the safest kind of debt, but that affects all of the debt markets, it goes out and buys in the debt market, they're essentially shifting the supply curve of money to the right, they shift the supply curve to the right.

What are my liabilities?

Our economy grew from 2000 to 2007 on the back of consumers massively overborrowing.

But this I just want to show you some data here.

They're giving it to me for safekeeping.

External debt something that I can tell you a long story about because I personally worked on one of the biggest debts on the continent has come down dramatically.

So that's bankruptcy.

You go get bankruptcy protection.

You're still solvent.

They serviced the loans.

Maybe debt that you have to pay in the next year.

Our borrowing costs were skyrocketing, and we were facing possible default.

So it buys, it buys debt.

And it got bailed out by the sovereign wealth fund.

Payable to the City of San Francisco.

It's backed by people's trust in the ability of the U.S. economy to support debt to pay off the value of this currency.

But I don't believe that another round of tax breaks for millionaires will bring good jobs to our shores or pay down our deficit.

It can do it through debt or equity.

So that's what we're going to show you in the presentation on collateralized debt obligations.

America's foreign debt shot past 500 billion.

It allows let's say this group of borrowers let's say this pool of borrowers right here actually didn't

You have 189,000 as the value of this equity.

Helps bring it down.

The personal debt to income ratio basically went from 65 percent to 135 percent in the span of about 15 years.

Some percentage of these borrowers are going to default on their mortgage.

And of those 20 that default, we have a 50 recovery.

The bank helped finance the rebuilding of what was otherwise a dying community.

This guy, he does have interest.

You can sell shares.

That's insolvency.

And because it's a junkier rating, no one is going to want to buy it.

And to stop it crashing over the last two to three decades, we've expanded the money supply, expanded credit and debt, so that people can keep buying stuff.

So I really do have a positive equity of 11,000.

So we still have the same amount of debt.

All we did was, we paid the interest on the debt in this example.

These are the people who first lose money.

So, each of these is an investor.

But unlike mortgages, a lot of corporate debt, they just pay the interest.

And then what he does is, he takes this share of IBM and then gives it to the brokerage to pay off his liability.

And maybe the fed is able to, through intervention, first they're able to print money, normally they buy shorter term debt, maybe they start buying longer term treasury debt, and maybe that helps get the yield curve, for longer term treasuries down a little bit.

I can no longer fulfill my obligations.

We would create incentives for securitization.