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CNN IN THE MONEY

Expert Says Appeal to Moderate Arabs in Middle East; Ben Stein Gives Tips on Going Broke; 'Apprentice' Finalist Talks Turning 15 Minutes of Fame into Gold

Aired April 24, 2004 - 12:59   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


JACK CAFFERTY, CNN ANCHOR: Coming up today on IN THE MONEY, one problem, two faces: see how the United States could break the roadblock to peace in the Middle East by treating the Palestinians like we treat Israel.
Plus, intelligence tests, CIA boss George Tenet facing tough allegations about his agency. We'll look at how he's keeping his job and his cool and whether he'll be able to continue to do both.

And open drain, insert money, anybody can pay out or make a buck, we have a guest who will tell you how to lose one. His name is Ben Stein. All that and more after a quick check of the headlines.

KELLI ARENA, CNN ANCHOR: Hello, I'm Kelli Arena, here are the latest headlines. Violence across Iraq today has left at least 26 people dead, one of several incidents, a rocket attack on coalition base north of Baghdad killed five U.S. soldiers and wounded six.

A blast in Baghdad's Sadr City neighborhood killed 12 people and wounded 25.

(BEGIN VIDEO CLIP)

BRIG. GEN. MARK KIMMITT, U.S. ARMY: Who did it? We suspect the same people fired those mortars that typically fired the rockets and the mortar rounds at the Palestine Hotel, at the Sheraton Hotel. These people we believe are the same group of people we see inside of Fallujah, former Fedayeen Saddam, former Mukhabahrat, former regime elements that are trying to push this process toward sovereignty and peace for the people of Iraq, off the rails.

(END VIDEO CLIP)

ARENA: Here in Washington, protesters gear up to demonstrate against the World Bank and the International Monetary Fund. A march is to pass by the White House and corporate offices of Halliburton, Chevron, and other businesses. Protesters say such companies profit at the expense of poor countries.

Rescue workers in Indonesia are searching for seven people missing after a landslide that killed 37 in a bus yesterday. The accident in northern Sumatra injured 13 people.

And the Red Cross and the United Nations assessment team are at the site of Thursday's devastating train explosion in North Korea. Red Cross officials say 154 people died in the blast, almost half of them children. Hundreds of others are reportedly injured. North Korea's official news agency released a statement today blaming the explosion on carelessness.

I'm Kelli Arena. More news in 30 minutes. IN THE MONEY with Jack Cafferty starts right now.

CAFFERTY: Welcome to IN THE MONEY. I'm Jack Cafferty. Coming up on today's program, turning rage into respect. The Arab world's furious with America over Iraq, Israel, and more. See how a shift in policy might start to change all of that.

Plus, the bullet proof bureaucrat, we'll look at George Tenet hanging on to his job at CIA despite the criticism facing his agency. Find out how the boss with nine lives got that way.

And in the time of Nick, "The Apprentice" contestant is trying to turn short-term fame into long-term fortune. Get his take on the show that made business watchable and Donald Trump even more obnoxious than he was before. Joining me today, a couple of our IN THE MONEY veterans, CNN correspondent Susan Lisovicz, "Fortune" magazine editor- at-large Andy Serwer.

I'm just kidding about "The Donald," we all love "The Donald" here in New York. But he didn't need any more exposure.

All right, a huge debate erupted late last week with the release on the Internet of some photographs of coffins of U.S. military personnel being sent back to the United States from Iraq. Apparently there are a couple of issues here, one, whether or not the media should put pictures of those coffins out there for mass consumption. The other and perhaps more important issue is the fact that the Pentagon has forbidden the media from taking pictures of those coffins. And some people say that maybe they're in an area there where they don't belong. What do you think?

ANDY SERWER, EDITOR-AT-LARGE, "FORTUNE": Well, I can't see what's wrong with taking those pictures, and I'll tell you why. And we got some great e-mails this morning from the other day on "AMERICAN MORNING" from some viewers saying, if they're used in campaign commercials, there was one from a mother saying, I don't mind, we have pictures of Arlington National Cemetery. It's real, it's out there, what do we want to do, hide our head in the sand?

SUSAN LISOVICZ, CNN ANCHOR: I don't understand it, here was a military, the Pentagon that allowed journalists to go up front and center with these same troops. And you can't see our men and women coming home with flag-draped coffins? These are not grisly photos. These are the consequences of war and it is bringing it home. And obviously this is part of a free press. It's interesting it comes in the same week when there was this terrible train collision in North Korea and you're not getting all the information. I'm not saying North Korea and the United States are anywhere near the same. But you need...

SERWER: You're saying the opposite. LISOVICZ: I'm saying the opposite, but you do need access. And it's ironic in this case that the press doesn't have access.

SERWER: And what are the flags there for? The flags are for people to see it, right?

CAFFERTY: It's an issue I think that probably won't go away. And unfortunately will find its way into the election debate as the campaign goes on.

You could name any number of reasons why the Arab world might have a beef with the United States, they include everything from U.S. ties with Israel, to the global syndication of those old episodes of "Friends," now there's a crime against humanity. But one foreign policy expert suggests the big issue isn't just what Washington does for Israel, it's what this country does not do for the Palestinians. Walter Russell Mead is a senior fellow at the Council on Foreign Relations in Washington D.C. He is the author of "Power, Terror, Peace & War: America's Grand Strategy in a World at Risk."

And we're delighted to have you, sir, on the program, welcome, thanks for being with us.

WALTER RUSSELL MEAD, COUNCIL ON FOREIGN RELATIONS: Good to be here.

CAFFERTY: What was behind, do you think this sudden shift in policy on the part of the Bush administration, embracing Ariel Sharon almost across the board in his ideas for disengagement in the disputed territories in the Middle East?

MEAD: Well, I think that it's one of these cases where the shift wasn't as big as it looked because in fact, President Clinton had already basically -- and for many years American policy has been to accept that Israel will keep some settlements and also that Palestinians probably will not be coming home in large numbers to pre- 1967 Israel.

LISOVICZ: So in some ways, Walter, you say that it sort of removes the fig leaf and bares the realities, if a plan is really going to take place. But yet, you have King Abdullah of Jordan very pointedly passing up Washington on a trip to the United States, and he was considered an ally to some degree of the United States. How significant was that rebuff?

MEAD: Actually I don't think it was that significant, because poor King Abdullah had a secret meeting with Ariel Sharon, and the news leaked out in the Arab press, and then two days later the Israelis kill Sheikh Yassin. So I think this just wasn't a good time for Abdullah to be in controversial meetings. And it had more to do with that background than anything special here.

SERWER: Walter, to what extent do you think the Palestinians -- or radical Islamists are using Palestinians as a beard? I don't mean to suggest that they aren't really concerned about what's going on in Palestine, but what I'm suggesting, even if that is solved, then they move on to something else?

MEAD: Oh no, it's absolutely true that there's some folks over there who just hate us and nothing we can do other than drinking the Kool-Aid with Jim Jones would make them happy. But the question is, how do you isolate the real hardcore American-haters from the kind of broader, free floating public opinion? Because the reason they use that Palestinian issue as a beard is because it has an effect on mass opinion. So what we have to do is we have to kind of drain the swamps where these people are so free, and begin to address moderate Arab opinion and more sensible Arab opinion.

CAFFERTY: In order to do that, though, if we made any overtures at all toward the Palestinians, with the strength of the Israeli lobby in this country, isn't that guaranteed to stir up a firestorm immediately?

MEAD: Well, I actually spent a lot of time in Israel talking about the idea that maybe there's things we can do that are pro- Palestinian but not anti-Israel. And there's some sympathy for that there.

CAFFERTY: Such as?

MEAD: For example, the 1949 U.N. security resolutions call for the Palestinians who don't go back to Israel, to be able to get compensation. The U.S. could take a lead in helping make that compensation possible. We could, for example, go to our beloved German friends and colleagues and say, one of the reasons there's a lot of homeless Palestinians in the Middle East is because there were a lot of homeless Jews arriving in the Middle East in the late 1940s. And you guys maybe have a little historical responsibility there.

CAFFERTY: The other point you make is that the Palestinians today, many of them live, they subsist on handouts from relief agencies which would disappear overnight with the creation of a Palestinian state. Ergo, who's going to feed and house and take care of these people? And right now there's no answer to that question.

MEAD: That's right. So let's start working out the answers on the Palestinian side of the peace process. Granted, Israel is going to exist. Granted, Palestinians will not be returning in large amounts to the pre-'67 borders. Granted, Israel's going to keep some of the land from '67. But still, there are things we can do to make a peace attractive to Palestinians.

LISOVICZ: Granted, Israel is going to exist, Walter. What about Ariel Sharon? Is he going to exist, is his government going to exist? And how much does that play into the equation?

MEAD: Well, right now for the U.S., it's very tough because the peace camp in Israel more or less collapsed when the Oslo process collapsed, because the argument of the peace camp in Israel, for 15 years, has been, if you make Arafat a reasonable offer, he'll accept it. And then when he not only didn't accept but didn't make a counterproposal, Israeli politics had nowhere to go but to the right. But it's possible that if we could start to make peace attractive to the Palestinians, to more average Palestinians, then you begin to get once again the prospect of a credible peace process. And I have to say, my experience in Israel is, if the Israelis thought they could get a compromise peace with the Palestinians, they would push for it.

CAFFERTY: Walter Russell Mead, senior fellow with the Council on Foreign Relations, thank you very much for being with us, also the author of the book "Power, Terror, Peace, & War: America's Grand Strategy in a World at Risk." thanks for being on the show.

MEAD: Thank you very much.

CAFFERTY: Up next on IN THE MONEY, as we continue, the eye of the storm, find out how CIA chief George Tenet is hanging on with his agency under fire.

And later on, nobody said it was health food. We're going to see what Wall Street thinks about McDonald's following the sudden death from a heart attack of the company's CEO. There are marketing implications that extend beyond the event itself.

Plus, future shock, Nick the former "Apprentice" went from obscurity to celebrity in just weeks. Find out how he's planning to try to put his fame to work now that the show is over. Back after this.

(COMMERCIAL BREAK)

CAFFERTY: CIA Director George Tenet in the hot seat. Tenet, who's taken a lot of flak for his agency's handling of pre-9/11 intelligence, is reportedly calling pre-war evidence of Iraq's WMDs a "slam dunk," this according to information contained in that new book by Bob Woodward. As a result, a lot of people are wondering why Tenet still has his job, and how long he may keep it. Joining to us talk about all this is Steve Coll, managing editor of "The Washington Post," and author of "Ghost Wars: The Secret History of the CIA."

Mr. Coll, nice to have you with us, thanks for joining us.

STEVE COLL, MANAGING EDITOR, "THE WASHINGTON POST": Glad to be with you.

CAFFERTY: Mr. Tenet is a survivor, if he is anything. Is he going to survive this?

COLL: Probably, through to the election, anyway. I think he has a strong personal relationship with the president. But perhaps more importantly, the politics of the summer probably argue for not firing him in a public way, creating a whole 'nother issue for John Kerry to pick up and run with as the election approaches.

LISOVICZ: Steve, it's interesting from your research, George Tenet has the second-longest tenure of anyone heading CIA. The first one would be Allen Dulles, if I'm correct, who did resign after the failed invasion of the Bay of Pigs. It's kind of ironic, isn't it? COLL: It is. People have been asking this question ever since September 11, and for obvious reasons. But one thing that we've understood now perhaps a little more clearly than we did before as a result of the 9/11 Commission hearings, is that in the months leading up to September 11, Tenet was warning the White House repeatedly that something was in the works. He put on the record a pretty stark series of warnings about a big spectacular that al Qaeda apparently had under way.

So the mystery at least initially about why the president didn't hold him accountable for the failure of intelligence on September 11, now seems to be resolved in that record. That is, the president knew that Tenet had warned him that something was coming.

Now, the Iraq story is another one altogether. And here, we're, I think, only beginning to see the evidence that's going to increase the pressure on Tenet. The comment that Woodward reported about a "slam dunk" case is obviously an enormous embarrassment. But there are also investigations under way in Congress about the same issues, they're likely to be pretty tough on Tenet as well.

SERWER: Yes, that "slam dunk" comment, Steve, isn't that a lot more damning than any suggestions that he wasn't prescient enough about 9/11?

COLL: Well, it depends on how you view the sort of scale of the failure. But it's certainly embarrassing. I think what it reflects among other things is, the way that Tenet conducts himself as the president's chief intelligence officer, he is a man who has a gift in some respects for simplifying complex issues and making them accessible for decision makers.

On the other hand, as evident in that episode, sometimes his willingness to sort of pull things into simple declarative statements doesn't reflect the complexity of the subjects he's trying to assess, or the nuances in his own analysis. The thing sort of shocking about that phrase is that the National Intelligence Estimate on which it was based was itself full of footnotes and caveats and warnings. It wasn't a document that suggested a "slam dunk" case if you read it cover to cover.

CAFFERTY: Let me get you to give us your thoughts on something related. As I listen to the 9/11 Commission, and then read some of the stories on the front pages of the newspapers that seem to be directly related, I'm a little troubled. For example, the other day on the front page of "The New York Times," there was a story that the administration is thinking about creating a sixteenth agency in this country to coordinate intelligence.

We have 15 agencies now that are charged with gathering intelligence about our potential enemies. And apparently the solution we need is to have a sixteenth agency. And some of this is traceable to testimony before the 9/11 Commission, that, gee, these other 15 agencies weren't communicating, and there's walls between them, and we've got to tear down these barriers. And the thing that occurred to me is, hey, we're coming up on the third anniversary of 9/11. And we're still talking about this stuff? Does that trouble you at all because it bothers the hell out of me?

COLL: Well, you know, here's the question, though. Intelligence, more than any other function, is an instrument of the presidency. The president of the United States makes war and peace decisions, has to have one channel through which he can receive the best intelligence that the country has to offer. The reason this debate keeps coming up again and again is because the person that he relies on is, the DCI, in this case George Tenet, is notionally supposed to command all the information in the system. But in fact, he runs one agency, one with a budget that isn't even as big as the National Security Agency or the Defense Intelligence Agency.

The reason this conversation keeps coming up is because the structure just doesn't look right on paper. Now, that doesn't mean that creating a sixteenth agency, or reorganizing things on paper, is going to solve this problem. And there's lots of argument about how do you achieve a different result without just reorganizing the bureaucracy?

But the fact that there's a problem I think is pretty well- demonstrated, even by the record of what went wrong on September 11 where there was a lot more information in the system than Tenet had command over, in part because he only controlled a relatively small part of the structure.

CAFFERTY: I guess the thing that bothers me is, we knew that these agencies didn't share information long before September 11. There's a long tradition in law enforcement and intelligence agencies of protecting their own turf and taking care of their own and not sharing the wealth. And I guess it just bugs me that we're collectively sort of treating this like another revelation, when in fact it's been standard operating procedure for decades.

Any who, I appreciate you coming on with us, Mr. Coll, Steve Coll is the managing editor of "The Washington Post." And perhaps in some future time we can continue this discussion. You're welcome back any time.

COLL: Thanks, thanks for having me.

CAFFERTY: All right. As we continue, we're going to take a little break here but when we come back, bring on the kangaroo burgers. McDonald's, its first non-American boss from the land down under, an Australian running the biggest hamburger house in all the world.

Plus, burn what you earn. Get a lesson in sending your bank account up in flames as author Ben Stein tells us how to ruin your financial life.

And you watched it but he lived it, get the low down on Donald Trump. What up with that hair? Omarosa's attitude and other life or death issues from the TV show "The Apprentice." We'll talk to one of the final four in the quest for that quarter of a million dollars a year job, Nick Warnock will be with us a bit later, stick around.

(COMMERCIAL BREAK)

(AUDIO GAP)

LISOVICZ: ... most minority women make much less money for the same jobs held by white men. Asian-American women were the highest- paid female minority group, but they earned 25 percent less than white men in similar jobs -- Andy.

SERWER: Thank you, Susan, for that.

Another big story this week was the sudden death of McDonald's CEO Jim Cantalupo on Monday. The company quickly named 43-year-old Charlie Bell to the top spot. The 60-year-old Cantalupo had been CEO since January of 2003, and he had been trying to revitalize the franchise by focusing on healthier choices and a tighter bottom line. Some of his work was obviously paying off as the stock has been rising steadily since last year.

Now the question is, will the new leadership keep things going in a positive direction? That makes McDonald's our "Stock of the Week." And I think that is the big issue for Charlie Bell. Jim Cantalupo had gotten this company back on track. And I think all Charlie has to say, Charlie old boy, is, I'm going to continue doing Jim's work.

CAFFERTY: What was it that Cantalupo was able to recognize when he came in there a couple of years ago that was so wrong in his eyes with the way McDonald's was doing things? Turns out he was absolutely right, but I mean, it flew in the face of all of the history and tradition of the company, yet he spotted it right away.

LISOVICZ: Everything.

(LAUGHTER)

SERWER: Yes, well, there are two ways you can grow a company like this, one by adding more stores, and one by trying to make people go into the stores that already exist more.

What happened is McDonald's was growing just by adding stores. Cantalupo said, no, we have to focus on the stores that exist, and make people want to go to them more. That's why Starbucks is so incredible, because they're not just adding stores, they're making people go to their stores that exist more often. Cantalupo got the company back on track, he made some menu changes too, and that worked out.

LISOVICZ: And he did everything. He improved the service at the restaurants. He changed and improved the menu. And he improved the cleanliness. It was really sort of a core operation. And in some ways a lot of the hard work was done, because it's been taking place for a year. After McDonald's reported its first quarterly loss ever in its history, it had a year of profits.

CAFFERTY: To what degree does the fact that not just McDonald's but all of the hamburger and fast food chains are sort of being dragged kicking and screaming into offering healthier foods, salads, things that don't have so much fat, cholesterol, et cetera, to what degree is that ultimately going to impact their earnings? I mean, if I want a salad, I can go to some nuts and seeds place and get a salad.

LISOVICZ: A health food store.

CAFFERTY: That's what they call those places.

SERWER: I'd like to see him in a health food store.

CAFFERTY: Yes, well, you won't. And you should be able to tell just by looking at this, I've never been in one. But I just wonder ultimately how that's going to impact a place that traditionally people go to get a hamburger, some French fries, and whether or not they're going to make more money selling healthier stuff, or whether they're just going to be more politically correct?

SERWER: Well, you know, it's always a mixed bag. I mean, first of all, the low-carb thing had actually helped McDonald's a little bit because people have gone back to burgers. But they were selling a lot of salads. That's something that Cantalupo did, the chicken salads with the Paul Newman dressings that I know you love so much, Jack. And they were actually making more money on the salads because the price of chicken was going up. There are all of these different metrics. The big thing is they have got to make the food healthy because that's the trend. And Cantalupo got rid of super-sizing.

LISOVICZ: And corporate America doesn't want government intervention, that why Mickey D started doing things on its own before the government stepped in, getting rid of the super size, improving the salads, things like that.

CAFFERTY: All right.

SERWER: We'll all go to lunch there afterwards, right?

CAFFERTY: Deal.

LISOVICZ: On Jack.

SERWER: On Jack.

CAFFERTY: Serwer's money.

SERWER: OK. Some of the finest minds on Madison Avenue have been working overtime to bring you our next commercial break. Coming up after the ads, a guy who can make your money disappear, Ben Stein reveals his secrets as he tells us how to ruin, ruin your financial life.

And later, the closest you'll get to a spot on "The Apprentice," Nick Warnock lived it, and he'll tell us all about it, coming up.

(COMMERCIAL BREAK)

ARENA: I'm Kelli Arena. More of IN THE MONEY after a check of the headlines. A rocket attack on a coalition base north of Baghdad has left five U.S. soldiers dead and six wounded. The assault was one of several violent incidents that claimed 26 lives across Iraq today.

A blast in a market in Baghdad's Sadr City killed at least six, it prompted an angry mass demonstration in the largely Shiite neighborhood.

In the Middle East, three Palestinians were killed in a shootout in the West Bank of Jenin. Two of the dead are militants who were members of the Al Aqsa Martyrs Brigade. Palestinian officials say the third person killed was a 15-year-old boy. Israel says the trio was planning a terror attack.

Back in the United States, makeshift memorials are springing up in Arizona for Pat Tillman, the former Arizona Cardinals football player who walked away from his NFL career to join the Army Rangers, was killed in ambush in Afghanistan Thursday. Friends and fans remember Tillman as a lifetime overachiever, determined to serve his country.

Family and friends of Dru Sjodin gathered today for her funeral. The body of the North Dakota college student was found a week ago, after a five-month search.

I'm Kelli Arena, all the news at the top of the hour, IN THE MONEY continues right now.

LISOVICZ: A TV host who gives you a shot at winning his cash is out to help you lose yours. His name, of course, is Ben Stein and his game show is called "Win Ben Stein's Money." Now he's out with a new book called "How to Ruin Your Financial Life." Ben Stein joins us from Miami to show us the express lane to bankruptcy.

Welcome.

BEN STEIN, AUTHOR, "HOW TO RUIN YOUR FINANCIAL LIFE": Welcome to you, too.

LISOVICZ: The sad news, Ben, is so many Americans, millions I might add, already know how to get in the express lane to bankruptcy. I'm just curious, since the stock market is starting to show signs of life for the year, first profitable year after three, last year, any bubbles that you detect? If you really want to get broke quick, any bubble areas that we should plunge into?

STEIN: Well, with all due respect, and I don't want to hurt anyone's feelings, but I think the Nasdaq is in a bubble right now. I mean, the Nasdaq Qs are selling way above 70 times earnings, that's a very, very high ratio. If you look at the Dow, that's at about 19 times earnings, that's a more sensible ratio. The SPDRs, which is the S&P index, is at about 29 times earnings, that's a more sensible ratio, although still very high.

But I consider Nasdaq still in something of a bubble. But what the real bubble is nowadays is real estate. Prices are unbelievably high by any historical metric. And I'd say if you get into it, you'll make money, but it might take you 20 years to make money. I mean, we're in a very, very high period of real estate prices, very, very high.

SERWER: Ben, interesting comments about stock brokers, I think, in your book. You're suggesting the more handsome or prettier they are, probably the worse they're going to be.

(LAUGHTER)

SERWER: Does the reverse hold true, so the uglier the stock broker you have, the better they're going to be?

STEIN: No, not necessarily.

SERWER: Too bad.

STEIN: Warren Buffett in essence is a broker, for those who own Berkshire Hathaway, and he's a good looking guy.

CAFFERTY: Oh no.

STEIN: Yes, he is.

(LAUGHTER)

(CROSSTALK)

SERWER: Age-adjusted, Ben, OK.

STEIN: He's not a young guy, he's not Ben Affleck. But for middle age or later than that guy, he's a good looking guy. But what I say is, choose a broker based on his gift of gab, his sharp-looking suits, the kind of shoes he wears, that's guaranteed to make you lose all your money with him. Don't choose him if he knows anything about the stock market.

But by the way, why use a broker at all? Just detect what stocks are going to go up just by the feeling in your fingertips. Don't even try to learn anything, don't read any books, don't acquire any knowledge.

And also, don't think that you need to work hard to make money, you just need to find an angle. You're going to be in the shower one night, and the next is Velcro is going to come to you, the next McDonald's is going to come to you. You don't need to work hard, just find an angle. And also, start businesses and use up all your savings in fields you know nothing about, just by your own luck you'll make a lot of money.

(CROSSTALK)

SERWER: This is good stuff.

CAFFERTY: Let me ask what you do with your money. I mean, you wrote speeches for Richard Nixon, did he pay well, by the way, did you make a lot of money?

STEIN: He paid me $25,000 a year, which in 1973 was a living wage.

CAFFERTY: Yes, inflation-adjusted, you were doing all right.

STEIN: I was doing fine. I had a nice house. I had a little Subaru car, it was perfectly adequate.

CAFFERTY: You do this game show, "Win Ben Stein's Money." You and what's-his-face...

STEIN: Jimmy Kimmel.

CAFFERTY: Went on to ABC, he's at ABC, you're still on - is it on cable?

STEIN: It's on cable, it's only on reruns. But I do a tremendous amount of speaking. I have, by most standards -- I don't want to brag, by the standards of Wall Street people it's nothing. But by most standards I have quite a good income. And I try to save a lot of it. The major thing in my book, if I could say the one crisis that people do wrong, is going to lead them to catastrophe, is they don't think about tomorrow. They don't think about retirement. They don't think there's ever going to be any rainy days. They don't plan for the future. That's a disaster.

CAFFERTY: Well, what do you do with your money? You just said, the real estate market's a bubble, the stock market's no good.

STEIN: OK, OK, OK, OK, OK, no, I don't say it's no good. I think the Dow is fairly priced. I think the SPDRs are not badly priced. I like REITs. They've been hit very hard lately so their yields are tremendous.

CAFFERTY: That's real estate again, REITs, right?

STEIN: Real estate investment -- yes, but that's not individual houses. That's shopping centers, hotels, hospitals. I have some of those that are yielding 8.6 percent. I do not expect them to continue yielding that. But even if their yield fell by 150 basis points, they'd be yielding 7 percent, that's a darn good yield. If you put away $5 million at 7 percent you'd have $350,000 a year when you retire, that's almost $1000 a day.

Most people, not counting my son, could live on that. So I like real estate investment trusts. I like short-term bonds. I like emerging market debt funds, there are a number of emerging market debt funds that are yielding over 7 percent. There are a number of funds of a combination of preferreds and also slightly risky bonds yielding close to 7 percent. If you look hard enough, you can find high-yield investments. That is the crying need for the Baby Boom generation.

LISOVICZ: So Ben, I'm going to pin you down, when is that bubble going to burst in real estate? STEIN: I don't know. And it could take a while. The nature of bubbles is that they're very slippery, and you don't know when they're going to burst. But I will tell you we've never had a bubble like this in real estate in some of the big cities like Los Angeles and New York City. And I don't think it can go on forever. No bubble ever goes on forever. The average apartment in the central part of Manhattan is now close to $1 million.

LISOVICZ: We know.

STEIN: That's a bubble. That's a bubble.

LISOVICZ: We know.

STEIN: Ok, at CNN you get paid so much, it doesn't matter.

SERWER: Oh, please, please.

CAFFERTY: Right.

(LAUGHTER)

STEIN: But for most people it matters. In L.A., prices of condos in the west side of town have gone up by about 50 percent in about 18 months. That's a bubble.

SERWER: Well, all right, Ben, you're down in Miami, living in the pink down there, so you must be doing something...

STEIN: No, No, I'm just visiting.

SERWER: All right, just -- well, that's not bad either. All right, we're going to have to leave it at that. Renaissance man, Ben Stein, I hope you don't mind me calling you that, author of "How to Ruin Your Financial Life." Thank you for coming on the program.

STEIN: Makes a good gift.

SERWER: There you go, yes, indeed.

(LAUGHTER)

Coming up on IN THE MONEY, the master class, find out if former "Apprentice" star Nick Warnock learned anything about business from real estate mogul Donald Trump.

And if you're feeling inferior, all you need to do is go on the Web to make yourself a more impressive person so you can feel superior. Find out how to pump up your personae. Just ahead.

(COMMERCIAL BREAK)

CAFFERTY: Donald Trump has done it again, this time a hit reality television show called "The Apprentice." The competition for a $250,000 a year job at the Trump organization was filled with cat fights, backstabbing and boardroom battles. The question is, did the people on the program competing for that job learn anything about the real world of business from hanging out with one of the more well- known business people in all the world? That guy. Joining us now is Nick Warnock. He actually got down to the final four before he heard those words "you're fired." And he's kind enough to join us here on the program IN THE MONEY.

Nice to have you with us.

NICK WARNOCK, FINALIST, "THE APPRENTICE": How are you doing, thanks for having me.

CAFFERTY: It's my pleasure. I find it a bit ironic that some of the Trump executives described you as "too slick."

WARNOCK: Too slick for my own good.

CAFFERTY: If you work for Donald Trump, how can anybody else be too slick for anything? What do you think they meant?

WARNOCK: I don't know. I went in there with really high energy, selling myself, I was in that boardroom so many times. And I pretty much sold myself out of a lot of situations. And I guess for some I was too slick for my own good. But I was just following in the footsteps of Mr. Trump himself.

CAFFERTY: I was going to say, you're following the leader on that deal.

WARNOCK: Mastering the art of truthful hyperbole, that's what I try to do.

CAFFERTY: You are pretty slick, Nick, now that I think about it.

LISOVICZ: But you know, are you slick enough to take it to the next level? I mean, all these reality TV shows, they have their 15 minutes of fame, the people who may have won, or gotten close to winning. Where are you going to take this? Do you have a plan?

WARNOCK: Absolutely. I'm ready to conquer the world at this point. I've been in the boardroom with Donald Trump. And I just feel like I can do anything with this...

LISOVICZ: You dealt with Omarosa.

WARNOCK: Dealt with Omarosa, just had a great time with everybody on the show. So my Web site's starting up. We have a company that I'm going to cater to copy dealerships, howtosellacopier.com. And then we have a variety of speaking engagements lined up. And I'm just excited. I've been interviewing with a magazine publisher, Jason Binn,"Gotham Magazine." There's an opportunity at the Raiders. And I'm just playing catch-up with all of these opportunities.

LISOVICZ: Are you going back to Anne Mulcahy and Xerox?

WARNOCK: I don't know. They haven't offered anything. And they've been good to me throughout this whole experience.

SERWER: So what do you think about "The Donald" anyway? I mean, you know, the guy really is kind of full of it in many ways. He's succeeded beyond his wildest dreams. Do you really respect this guy? Now you may be going back to him, so can you really speak honestly? I mean, do you really respect this guy?

WARNOCK: Yes, I think he's a tremendous individual. And just like when I used to watch Jack back in the day, when I was a little kid, I used to read about him in "The Post." And I idolized all of them. It was great.

(LAUGHTER)

SERWER: All the greats.

WARNOCK: He was a people's millionaire in my house and we loved him. So it was an honor to be part of the show

CAFFERTY: The interview's not going to be any longer, Nick.

(LAUGHTER)

CAFFERTY: I don't know where you're trying to go with this. What do you see yourself doing in 20 years? I mean, you say conquer the world, be specific, in what way, what do you want to do?

WARNOCK: Within the next 30 years I'd like to run for office.

CAFFERTY: You would.

WARNOCK: Yes, ultimately that's the main goal. I do like being in front of a camera, to be quite honest with you. And I'd like to pursue something in that angle as well. I love being on these shows, this show especially.

SERWER: Especially this show.

WARNOCK: Especially this show.

LISOVICZ: Well, you're smooth with Jack.

WARNOCK: Especially with Jack. I would like to ultimately end up as a senator, or in the highest office in the land.

LISOVICZ: But before we talk about substance, let's talk about style. What is with Omarosa? Is she really as pathological as she appeared on the show?

WARNOCK: Well, they psychologically test all of us. So she's not crazy. I think she's got this act down. She wanted to pull off to be the greatest reality TV villain of all time.

LISOVICZ: She succeeded.

WARNOCK: And she succeeded. I mean, she's hated but she'll probably be the most financially successful.

SERWER: First of all, everyone in TV's crazy. So that sort of goes with the territory.

WARNOCK: I'm probably half nuts for going on the show too.

SERWER: How real was all that stuff, and how much was staged?

WARNOCK: None. None of it was staged. You're put in an artificial environment, of course. And to say reality TV, it's really not reality. It's an unscripted drama. And stuff is just -- it just happens. When you put "type A"s living together and working on the same tasks, drama's going to happen.

LISOVICZ: What's with Donald's hair?

WARNOCK: Oh it's great, it's red, it's really nice, I like it.

LISOVICZ: He was emulating you?

WARNOCK: I think so.

(LAUGHTER)

LISOVICZ: Did you touch it?

WARNOCK: No, I didn't touch it. It gives him more publicity.

CAFFERTY: Are you crazy? Did you touch it?

SERWER: Women run fingers through men's hair.

WARNOCK: It worked for me, it was fun.

CAFFERTY: What was the worst moment on the program?

WARNOCK: Getting fired. I thought I was going to win. I went in there, four people left. I'm like, oh, I got this down, this is a boardroom scene and I'm going big. And I wound up getting the firing. He had a smile on his face, though, so it wasn't so bad.

LISOVICZ: Did you learn anything though? That came after interviews where a number of Trump executives said that you were a little bit too much of a salesman, and there wasn't anything of meaning coming across. Did you think you needed to bring it down a notch?

WARNOCK: I did. I did. And that was my mistake. I was too upbeat, I was too high energy. And that's my business. No one wants to sit there very reserved. But I should have done that in that particular situation.

CAFFERTY: Nick Warnock, my sense is your future's going to be all right, you're going to be fine.

WARNOCK: Oh, thank you very much. LISOVICZ: We'll see you on "Apprentice 2" right?

WARNOCK: I hope so. I hope so, I'd love to be back.

CAFFERTY: Thanks for being with us.

WARNOCK: Thank you.

CAFFERTY: Nice to meet you.

WARNOCK: Nice to meet you, too.

CAFFERTY: Time for a break, when we come back, we're going to find out how to make your friends think that you've gone from dud to stud. There's something that I'll be watching closely because I've had an interest in trying to do that for a number of years. We'll check out some Web sites where you can remake yourself. Doesn't matter if it's true, it's a whole new you. And win or lose, you can always bend our ear, drop us a line, inthemoney@cnn.com. We shall be back with Allen Wastler and some of the folks right after this.

(BEGIN VIDEOTAPE)

SERWER: Summer's not far away. So if you're beginning to plan a family vacation, here are some tips to help you save money while you enjoy your time off.

Booking your travel plans online is a smart way to save on everything from airfare to hotel reservations to package deals. For the sites with the best buys, check out Orbitz.com, Travelocity.com, and Cheapseats.com. You'll find the best prices on airfares if you can be flexible about dates and time. Try to book early morning and mid-week flights. Those are the cheapest times to fly.

If you're planning to rent a car abroad, you're better off doing it over the weekend, rather than during the week. So rates drop on the weekends when business travelers go home. And don't be shy about asking for upgrades. If the rental agency doesn't have the car and the class you reserve, they'll often give you the bigger car at no extra charge.

Asking for upgrades at hotels can also pay off. If a hotel is underbooked, management will often upgrade you at a discount. For as little as $20 to $50 a night, you can move into a much more comfortable room.

I'm Andy Serwer for "Money & Family."

(END VIDEOTAPE)

(COMMERCIAL BREAK)

CAFFERTY: So you say you have no money, no girlfriend, no education and no life. Well, don't worry, Bunky, because now you can invent a nice life for yourself on the Internet, if you're willing to just make believe. Joining us to explain and talk about some of the serious instances of Web-based fraud is our Web master Allen Wastler.

Let's start with the frivolous stuff, though, right off the top.

ALLEN WASTLER, MONEY.COM: The frivolous? No, you get the sugar at the end. All right? We've got to do serious stuff here. Over half a million complaints filed at the FTC last year, consumer complaints, over half of that, 55 percent, had to do with Internet fraud. OK. We've all seen over the years as the Internet grows, we've got standard ones we need to go for, you know, the auction rip- off, the catalog sales rip-off, the friendly Nigerian guy who's willing to give you millions and millions of dollars if you...

SERWER: If you send him $10,000 first.

(CROSSTALK)

WASTLER: Now we're seeing a little bit of a transformation with that whole fishing scam we've talked before, where somebody sets up a fake Web site to sort of decoy you into thinking you're going to the right place, you're going to the wrong place. Now we have business identity theft. This is where they might identify a small business that doesn't have a Web presence, rip off its logo, rip its address, set up a kind of Web outfit there and either get people to come on and spend their money at that site, saying, yes, I know Fred's down the street, and here he is on the Internet, this is great. Do the rip-off that way. Or, in that business' name, start doing business over the Internet and charging things to accounts and saying, yes, we're Fred's, and they say -- they look at the Internet and say, oh yes, must be Fred's, and they start doing the whole rip-off like that. Ancillary to that, fake invoices now where you can get materials off the Internet, make a fake invoice, send it to somebody, and they just sort of pay the bill, what the heck.

LISOVICZ: How big an industry is this?

WASTLER: It's turning into quite a big industry. The fraud reaches into the billions. It's hard to track because a lot of times, people, they don't go to the FTC or the government and say, I got ripped off because I'm kind of stupid. It's sort of like, all right, well, I got stung, I'll never do it again. So a hard and fast estimate is hard to reach. But you're seeing it multiply out and out.

Now that can go to the personal level too for self-improvement purposes. Now fake diplomas have always been out there but now you can get them like that at sites like fakediplomas.com and...

(CROSSTALK)

CAFFERTY: Can you get it right off your printer?

WASTLER: You can get it downloaded and just print it out.

LISOVICZ: Become a Ph.D.

WASTLER: Hey baby, it's going to be great. And now here's a real good one, all right. Now if you're trying to impress someone at the bar, something like that, why, hi there, lady, let me give you my number, you don't have to call me if you don't want to, let me just -- oh, the only thing I've got to write on is this ATM receipt, here's my number, so call me later. And then she takes it, she looks at it, and whoa, he's got so much money in his bank account...

SERWER: What a smooth move that is.

WASTLER: I think I'll call him.

SERWER: Did you get that from "The Apprentice"?

(LAUGHTER)

WASTLER: So this is the latest rage...

SERWER: That's funny, that is funny.

WASTLER: And there's several sites out there, buy your own ATM receipt, you can set your own amount. You can set the date...

SERWER: You put on like you have a million bucks in your checking account.

WASTLER: That's right, and that's exactly the type of scam that you'll just love, Jack.

CAFFERTY: Don't give that to me, I ain't calling it.

Coming up on IN THE MONEY, we'll read answers to our e-mail question of the week just ahead. If you want to comment on something you saw on the program, drop us line at inthemoney@cnn.com. Back in a moment.

(COMMERCIAL BREAK)

CAFFERTY: Time now to read your thoughts about whether a national ID card would help in the fight against terrorism.

Frank wrote this: "A national ID card would really not work in a large open society like ours. It could work if we made having one a prerequisite for legal employment, air travel, health care, et cetera. But we might have a revolt on our hands if we tried to do that."

Al from Payson (ph), Arizona, checked in with this: "A national ID card is long overdue and desperately needed in this country. No honest person has anything to fear or should oppose such a plan. We're losing our country and a national ID card may help us save it."

Dave from Crescent City (ph), California writes this: "I think it's a lousy idea. Every time I get a photo taken for a license for an ID, the picture makes me and most other people look like serial killers. Based on those pictures alone, millions of Americans would end up being detained just for looking very guilty." That's a good point, those pictures are all terrible.

Here's the e-mail question for this week. "Does the United States favor Israel too much in its Middle East policy?" Send your answers to inthemoney@cnn.com. We'll read some of them next week. Also, you can check out our show page at money.com/inthemoney, which is where you'll find the "Fun Site of the Week" and oh so much more, including baby pictures of the entire staff.

Thank you for joining us...

(LAUGHTER)

SERWER: Is that true?

CAFFERTY: No, it's not.

(LAUGHTER)

SERWER: I didn't know that.

CAFFERTY: For joining us for this week's edition of IN THE MONEY. Thanks to the gang here, CNN financial correspondent Susan Lisovicz, "Fortune" editor-at-large Andy Serwer, and Money.com managing editor Allen Wastler. Join us tomorrow at 3:00 Eastern time when we'll look at America's growing vacation deficit. We're all working harder and longer but for what, you might ask? We'll try to answer that question tomorrow at 3. Join us then, in the meantime, thank you.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com


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