【正文】 g billions and billions of dollars all over the world, and they want to invest money to get the highest rate of return, so if in Germany they can get a 8% return, in france they can get 8% and the US they can get 10% percent, everybody will send money to the US because everybody is under the pressure to get the highest rate of return, this gave every country systems and every bank every pany incentives to try to earn a higher higher rate of return, the higher rate of return is sometimes increasing the risk, but you have to increase the risk in a way, it’s hard for people to evaluate the risk. It’s very hard to evaluate the risk that all the housing in the united states will go down to pare how is in Germany and how is in Japan, so it’s very uncertain risk but you should inspect the international capital to all try to flow in the high industry and I think this put more pressure on the cycle and as people overestimated the house value, more capital flow that created more money and people bulit bigger houses, and it goes up and up and up, tremendous pressures try to earn high risk return it’s a little bit of the market failure and I e from the city Chicago and we all say market is perfect, and everything in the market is perfect but I think the market was uninformed, market is a little bit imperfect and how much the risk was associated, again this is the subject, let’s e back to the part. I think we understand the basic picture, you might also say the solution is also obvious, the government could monly say let’s give the bank a trillion dollars, we give the bank a lot of money and they lend it out again, so if the government give the bank more money, the government regulated the bank much more, we try to do what they want, it didn’t work out , we have financial crisis, now we will give you more money or bear you out , but we got watching carefully and each time we want a new thing, it es up more highly regulated system, the government would say that I am sorry, you borrow too much money, its not your fault, thanks maybe you borrow the money, and we will give you 10,000 dollars, so you can pay your mortgages back, of course people might take the money and buy more housing with them, should the government also regulate that? Here is the money, you must spend it in this way, you must do this, you must do that, it’s very very hard to watch people carefully and regulate them, so the government generally give the money at the bank level at the house level, because it is popular to regulate the bank, they regulated the counsile, here may work out the same thing, you should do the other way the government could do. The government should go a little more bridges or do the things to the economy, now they create job, pay more money and those people may drive the housing prices up because they spend more money to buy more housing, again the government could do that, but maybe not probably particular, three things in the end, the biggest strategies . I think you realize that One is I think you could say that this crisis is created by the law, it’s law that created them, first it is the legal systems that create ine tax, the houses, and people want to make money in bigger bigger houses, so excuse me, law is a little bit plain about that, second of all ,why is the market understand the risk of the pany ,as insurance pany AIG, why people understand AIG helps a lot panies ,why AIG so plicated, well, a hundred years ago, I bought a house, the insurance pany would say if the house was burned down, they would pay the insurance ,the insurance was very very simple, now the insurance is much more plicated, people say I want an insurance against interest rate going up because the interest rate go up my business goes well ,you might say I want an insurance against the oil price going down because my business needs oil to be expensive, you might say I need the price of oil go up, I want to buy oil heating my factory, ok this is a good deal, we can have them, do swamp, a contract, he is afraid oil would go up ,he is afraid oil would go down, they can insure one another, but most people in the insurance pany is they put together people who need different kind of insurance, I will buy an insurance that the interest will go up, the bank we don’t know maybe the interest will go up, if the interest rate going up, we will lose all the money in the contract, the insurance pany said we could sell them and find another pany who want to bet on interest rate going down, so its like betting on the oute of you think the things will down, the things will up, the insurance pany sell you both the contract about this and the insurance pany set up its business selling and buying very plicated products, about interest rate go up, interest rate go down, interest rate stay smooth, anything you want to bet on, you could go these panies and all the panies go fashion products, guarantee you and make money each time, you buy a product, it is very very plicated product , and the insurance pany again try to earn a lot of percent, why do people buy these products, why don’t they say its so plicated, I don’t want to own, but give me the answers apart of law, the reason of the products get plicated is they design to get around the legal rule, and I will say that again, in the most advanced economy now the reasons of financial products are so plicated is that they are designed to get around the legal rule, so . if the law says this pany can only invest the very secure assets , keep money for workers and the old, they can not have products of a lot of risks, that pany is forced to go to the insurance pany, and try to keep the risk down, we will buy the insurance the rate won’t go up over the next 30 years, every time a new regulation, they will create new products to make money. some genius es from the insurance pany says let’s sell our product, then go up when interest rate goes up, so they have never to