Gov. Corzine: I THINK THAT THEY'VE MADE STEPS ON A PATH. I DON'T THINK THEY HAVE GONE FAR ENOUGH TO ACTUALLY TURN AROUND WHAT IS HAPPENING IN THE REAL WORLD. THE $200 BILLION THAT IS NOW IN WHAT WE CALL THE REPO MARKET. IT GOES AGAINST A $6 TRILLION PLUS MORTGAGE SECURITY MARKET. IT IS VERY, VERY SMALL AMOUNT RELATIVE -- IT ENCOURAGES CONFIDENCE AND I DON'T DENY THAT AND I THINK WE SAW THE REACTION IN THE MARKETS THAT WAY, BUT I DON'T THINK IN THE SCHEME OF THINGS IT GOES FAR ENOUGH TO GET THINGS DONE AND ULTIMATELY I DON'T THINK THE THINGS THAT HAVE BEEN DONE OUT OF TREASURY GO FAR ENOUGH UNTIL WE RECOGNIZE THAT WE HAVE TO HAVE SOME MECHANISM TO SUPPORT WRITE-OFF OF DEBT. IN A COMPANY WENT BANKRUPT THEY'D NEGOTIATE WITH THEIR BANKER AND THEY'D LOWER THE AMOUNT OF DEBT OR STRETCH OUT ITS TIMEFRAME OR LOWER RATES. WE'RE NOT DOING ENOUGH OF THAT ON A BROAD ENOUGH SCALE WITH THEPEOPLE WHO ARE HAVING TROUBLE WITH THEIR MORTGAGE PAYMENTS.AND I THINK WE NEED TO DESIGN A SYSTEM.IT WILL PROBABLY TAKE SOME KIND OF FINANCIAL SUPPORT FROM THE FEDERAL GOVERNMENT TO ACTUALLY LOWER THE DEBT LEVEL SO THAT PEOPLE GET BACK INTO THE MODES OF BEING ABLE TO RETAIN THEIR HOMES AND PAY OUT.

Burnett: DO YOU THINK -- AGAIN, THE FORMER CEO OF GOLDMAN AND THE FORMER HEAD OF THE FED BANKING COMMITTEE THAT THE GOVERNMENT CREATING A POOL, MAYBE THE SAME SIZE AS A STIMULUS PACKAGE AND GOING OUT AND BUYING SOME OF THE AAA RATED MORTGAGE PAPER.SOME OF THE CEOs I SPEAK TO THINK THAT WOULD BE A SIGNIFICANT THINK, PERHAPS MORE IMPORTANT TO BRING UP THE MARKET.

Corzine: I THINK THAT'S AN IMPORTANT ELEMENT, BUT YOU HAVE TO PUT THE 200 BILLION INTO THE CONTEXT OF THE OCEAN OF CREDIT THAT IS THE MORTGAGE MARKET. IT'S MUCH, MUCH BIGGER THAN THAT 200 BILLION. I THINK WHAT WE NEED TO DO AND, IN MY VIEW, IF YOU'RE GOING TO LIMIT THE SIZE AND THEN YOU OUGHT TO BE PUTTING IT INTO THE ULTIMATE USER OF THE CREDIT, THE MORTGAGEE, THE PEOPLE THAT OWN THE HOUSES. I THINK THAT ACTUALLY THEN GETS MORE LEVERAGED BORROWING. THOSE PEOPLE GET BACK INTO THE CONSUMER MARKET BECAUSE THEY FEEL LIKE THEY'RE GOING STAY THERE. WHAT'S GOING TO HAPPEN NOW IS WITHOUT THAT KIND OF SUPPORT. I THINK PEOPLE ARE GOING TO WALK AWAY FROM THEIR HOMES THAT THAT'S GOING TO DETERIORATE NEIGHBORHOODS AND YOU'LL SEE LOWER VALUES AND THEN YOU'LL HAVE MORE HOMES IN A SITUATION WHERE THE LOAN DEVALUE IS NEGATIVE.

Burnett: DO YOU THINK THAT HANK PAULSON AND BEN BERNANKE ARE DOING A GOOD JOB RIGHT NOW?

Corzine: OH, I THINK THEY'RE TRYING VERY HARD, AND I THINK THEY'VE TAKEN A LOT OF THE STEPS.IT'S ACTUALLY THE DEGREE TO WHICH THOSE THINGS ARE IMPLEMENTED THAT I THINK ACTUALLY ENDS UP MAKING A DIFFERENCE.SECRETARY PAULSON ACTUALLY MADE SOME SUGGESTIONS ABOUT HELPING SOME OF THE LENDERS -- OR SOME OF THE BORROWERS AND THE MORTGAGE MARKET THAT WERE ABOUT TO GO IN TO FORECLOSURE. I THINK WE HAVE TO DEAL WITH THE FOLKS THAT ARE ALREADY THERE.

Burnett: WHOSE FAULT IS THIS?

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