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CNN IN THE MONEY
Winners and Losers in the Hot Real Estate Market; Wounds Run Deep for War Veterans on Memorial Day; Lavish Weddings and Newlywed Debt; Stem Cell Invesment: Is it Ready?; Presidential Getaways; The Weak Link that Leads to ID Theft.
Aired May 28, 2005 - 13:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
FREDRICKA WHITFIELD, CNN ANCHOR, IN THE MONEY: Car bombs, ambushes and drive-by shootings leave at least 28 dead and dozen wounded in cities across Iraq. Also, Iraqi authorities confirm a Japanese hostage kidnapped earlier is dead. And the body of ten kidnapped Shia pilgrims has been found near the Syrian border.
Remembering those who died in uniform 250,000 rolling Thunder bikers are in Washington, D.C. to pay homage at the tomb of the unknowns. The group has been taking this Memorial Day ride since 1988.
Two New England senators are demanding the Pentagon release all documents relating to the recent closings or the proposals of the recent closings of the military bases across the country. Senator Susan Collins of Maine and Joseph Lieberman of Connecticut believe their states lost more than their share in the shuffle.
A taser shot ends a 57-hour standoff between Atlanta police and a murder suspect on top of an 18-story crane. Florida fugitive Carl Edward Roland is in custody. He is suspected in the beating death of his ex-girlfriend. Police enticed Roland with an offer of water shortly after midnight overnight.
I'm Fredricka Whitfield at the CNN Center in Atlanta. More news at the bottom of the hour. IN THE MONEY begins right now.
UNIDENTIFIED MALE: From New York City America's financial capital, this is IN THE MONEY.
JACK CAFFERTY, CNN ANCHOR, IN THE MONEY: Welcome to the program. I'm Jack Cafferty. Coming up on today's edition of IN THE MONEY, house bound, the hot real estate market shutting some people out, locking other people in. We'll look at who's on the losing end of the real estate market.
Plus, fighting for the soldiers who fought for this country. For some veterans of the wars in Iraq and Afghanistan, war wounds are large. They won't heal anytime soon. These men and women are going to need a lot of help. We'll take a look at whether they're getting the help they deserve.
And forget the rice, just throw money. Some weddings are getting so big and lavished they are pushing couples into deep debt before they even get started. Find out what is driving it and if there is a way to stop it. Joining me today, a couple of IN THE MONEY veterans, CNN correspondent Susan Lisovicz and "Fortune" magazine editor at large Andy Serwer.
You know, I hate to complain. But I'm going to complain. For the last two weeks, the taxpayers in this country have gotten the following out of the esteemed members of the United States Senate, a week long debate and compromise and alleged crisis over filibuster rules, followed by another delay in the vote, up or down, on John Bolton as the United Nations Ambassador. We got 50 million people in this country who have no health insurance. We've got deficits until the world shouldn't choke on them. And these politicals are sitting down there in the nation's capital on your dime and your dime and my dime accomplishing next to nothing -- next to nothing!
ANDY SERWER, CNN ANCHOR, IN THE MONEY: It really reminds me of going back to the 1950s and before that with the U.S. Senate. Think about Robert Caro's book about L.B.J., "Master of the Senate." He talked about how it was a do nothing chamber for decades. Finally, in the 1960s, they turned themselves around. But you look at what is going on now it reminds me of the rich guys in top hats sitting there snoring.
SUSAN LISCOVICZ, CNN ANCHOR, IN THE MONEY: Well maybe do nothing, but or course for us, the people, the taxpayers who are worried about health care who don't have the cushy little arrangement set up by Washington we can do something and it's called midterm election.
CAFFERTY: That's the cruel irony. These incumbents get re- elected by a huge margin every time there's a chance to vote them out of office, the public doesn't act on it. I wonder why that is.
LISCOVICZ: Well -- but meanwhile they are ranking, their -- well, misery loves company. They're next to journalists and lawyers in terms of what the public feels --
CAFFERTY: We're in that group, too, aren't we?
LISCOVICZ: Unfortunately, some polls suggest that Jack.
CAFFERTY: All right, to be continued.
The word on the street is the house you bought two years ago is worth more than you paid for it. The problem is all the other homes on the street have shot up in price as well. Even if you cash out of the house you're living in that you made all this money on, you can't afford buy a new place at the next level. Median home prices in the U.S. rose another 15 percent from a year ago. And that's boxing some people out of the market and trapping others in it.
Valerie Patterson is a senior editor with "Real Estate Journal." She joins us now with a look at -- it's not a trend, it's a phenomenon, I think Valerie. Welcome to IN THE MONEY, nice to have you with us.
VALERIE PATTERSON, SENIOR EDITOR, "REAL ESTATE JOURNAL:" Thank you.
CAFFERTY: Everybody knows trees don't grow to the sky. But the numbers on the housing market in this country continue to confound the experts. We get one report after another this thing is on fire. What's going on?
PATTERSON: You're right, every month, data comes out and even economists are surprised. One thing that a lot of economists will tell you is these type of gains cannot keep going and going and going. They simply can't be sustained. So of course everyone is wondering, will the bottom fall out or will the market slow? And there are a couple of factors that might lead to that. But we all have to wait and see.
LISCOVICZ: Valerie, what's the biggest concern that mortgages go up? I mean, we've seen eight rate hikes and mortgages are still historically low and there's a whole set of reasons for that, which we won't get into. Or is it the fact the economy may go into a recession? I know one of the big concerns is how many homeowners are getting these adjustable rate mortgages and they could really get hurt.
PATTERSON: That's absolutely right. A recession is one of the biggest risks to the housing market. Particularly some type of localized downturn in a particular economy. Historically, the few times there have been housing busts in different market in the U.S., it's been because of a very localized recession.
The other factor is, of course, if banks finally decide to increase mortgage rates, then, of course, everyone does expect the market to slow. So those are two risk factors. Of course, the other side of it is, prices do keep going up and up. It's not only hard on first-time buyers, but people's household incomes simply aren't growing at the same pace. So one has to expect the pool of buyer to diminish sooner or later.
SERWER: Valerie, on the extreme end of this phenomenon are these flippers, these lunatics who travel in wolf packs around Phoenix, Dallas, and Las Vegas, and they go into these communities and buy condos, flip them, buy homes, flip them. Can you talk about that a little bit?
PATTERSON: Well, you know, a lot of those people have done well for themselves. Of course developers are catching on to this. And in some cases, they are forcing the so-called flippers to turn over part of their profits, if they sell within a certain amount of time after closing. But it still goes on. I certainly hear people traveling to Miami, plunking down a deposit on buildings that aren't even up yet.
I think, of course, these folks don't look at real estate as a long-term investment, but to protect yourself and to be sure that you won't lose money, you should be prepared to look at it as at least a five-year investment. Because there's always the if. If values go down, you won't be able to flip very quickly and turn a quick buck.
CAFFERTY: Somebody's always making a killing when something like this happens in one of the markets, whether it's the Internet bubble of the late '90s or the real estate market now. But usually it's not Mr. and Mrs. Middle America who are sitting in a house that's probably doubled in value over the last 5 or 10 years, but they've borrowed against that equity as the worth of the thing goes up. They are trapped by a larger mortgage than they had before they started borrowing against the equity. Who's making a killing in this thing? Is it people that Andy was talking about? Wheres the real money being made?
PATTERSON: Certainly, some people -- well, one could say mortgage brokers and realtors and so forth are definitely making money. It's been a great ride for a lot of them. But other people -- sometimes retirees who are deciding to relocate out of a market where home prices have skyrocketed, are deciding to sell, move to a less expensive market, take their money off the table and keep those gains.
Those folks are definitely doing quite well. And it's not about idea. It's a quite reasonable thing to do. But, you know, certainly, people who are asked to relocate perhaps by their employer who are fortunate enough to say, move from San Diego to Tulsa, Oklahoma. They're taking a lot of gains with them and are able to buy a lot more house for the money. These types of folks are definitely winning.
LISCOVICZ: Valerie, for the person who wants to take advantage of these rates while they last, what is the best recommendation for a second home? Is the rental market something that is really particularly lucrative right now?
PATTERSON: The rental market can be lucrative. Of course, because of low rates, a lot of people who might have been potential renters are just opting to find a way to buy. So in some markets, it can be tough to find a renter. If you're going to get into that kind of investment, again, it's best to make sure that you have the resources to carry that mortgage and the other costs of home ownership just in case you can't find a renter or the level of rent you get doesn't cover those expenses. You need to make sure you're comfortable with that kind of debt. It's really something you need to do some research on before you buy.
CAFFERTY: Do you own a home Valerie?
PATTERSON: I do, indeed.
CAFFERTY: That's too bad, I was going to try to sell you this tidy little bungalow in Cedar Grove, New Jersey. I was going to make you a special deal. Valerie Patterson, the senior editor of the "Real Estate Journal" thanks for being with us.
PATTERSON: Your welcome.
CAFFERTY: When we come back on IN THE MONEY fighting the good fight. Some of America's Iraq war veterans are coming home in need of a lot of help. See if they're getting the support they need and very much deserve.
Plus, how to grow money with a petri dish. Stem cell research isn't just something to argue about, it might be a good investment. Find out about a stock that can get you in on the stem cell action. And did somebody say for richer? A lot of couples come out of their weddings today just plain poorer. See how a wedding can kill off your bank account.
CAFFERTY: On this Memorial Day weekend we remember America's war dead. With combat under way in Iraq and Afghanistan, we think about the living as well. The men and women who have served in today's wars and are serving there now. Some of those veterans come home in need of a lot of help. And we decided to find out if they are getting it.
For a look that we're joined by Steve Robinson, he is the executive director of the National Gulf War Resource Center. Steve, welcome to the program. It's nice to have you with us.
STEVE ROBINSON, EXECUTIVE DIRECTOR: Thank you.
CAFFERTY: Veterans tend to become America's most overlooked group once the fighting has stopped. All you have to do is look at the treatment of veterans as we go back through the wars. How would you rate the care that the veterans of Iraq and Afghanistan are getting upon their return to the United States?
ROBINSON: Well, I think that the administration and the Department of Veterns Affairs are certaining trying. But even as this Memorial Day approaches, we're significantly concerned about the funding of the V.A. because the only thing that happens when you don't fund the V.A. properly is veterans can't get into the services or the services don't exist anymore. It's a huge concern for us.
SERWER: Steve I know you've worked a lot with veterans from the first Gulf War. Can you give us the latest on exactly how hazardous the toxins were that were on the battle battlefield and what is the latest on the fallout from that?
ROBINSON: From the first Gulf War, new science has come in, that has talked to us about some of the exposures that veterans have had, a multitude of exposures. Initially people thought Gulf War veterans were sick because of stress, because of combat stress. But the first Gulf War was a very limited and short-range war about 100 hour, limited, up close fighting when compared to this war.
Veterans reported illnesses at a rate of about 54 percent of those who served. That's a huge number. The things that we were concerned about then that we have science coming in on now today are things like depleted uranium, low-level chemical weapons exposures as a result of prewar, during war and post-war bombing, vaccines and investigational new drugs. Some of those things are being used today in this war. But there's a committee called the V.A. Research Advisory Committee on Gulf War illnesses. And they have written a report, it was presented to Secretary Princippy (ph) and it is pushing the science and direction to find treatments and cures for the multiple illnesses that veterans faced in 1999.
LISCOVICZ: That is a good thing, in the sense that we are in the same region fighting another war there. But one of the differences is that this is a much longer-lasting conflict. The American public is divided over it. Is that something that is affecting the morale and the treatment of our vets when they return home?
ROBINSON: Well, you know, it's interesting. If you look at the Vietnam era, there was division there, too. But the difference between then and now is that those that opposed war support and understand that the soldiers who are fighting the war don't necessarily have a choice. And so they're supporting them. So you can oppose the policy of war, but still support the soldier and try to take care of them.
But, let me say that the morale problem that I think exists is when you're sent to combat without proper equipment or you're sent to war and told you'll come back on certain time and don't get to come back, or there's an objective that you really can't understand. How do we explain to soldiers that we're building a democracy and can they grasp that and are they willing to make those sacrifices?
And then when they come home if they're met by a V.A. health care system that is supposed to be their fallback for care and they can't get appointments and there's not enough doctors, do we really uphold the covenant and is that a morale problem?
CAFFERTY: The American fighting man has never been unwilling to make any sacrifice he's been asked to make in the long history of the country. They have always done whatever the people of the country asked them to do. My assumption is the wars in Iraq and Afghanistan is no different.
Let's talk about the economics for a minute. We have $500 billion defense budget in this country. Over $500 billion dollars. The Congress just approved an additional $82 billion, something called a supplemental, which is outside the regularly budgeted items. And yet we hear complaints about some of the things you're alluded to, lack of proper equipment. There was that question earlier in the conflict about the proper armor plating on these Humvee's that the soldiers were riding in, questions about body armor and ammunition and things like that.
Can you talk about the economics of what these veterans are facing on the battlefield, versus, then what they face when they come home, and face depleted resources for the kind of things we're talking about, veteran, hospitals, doctors, and the services that particularly wounded veterans need here?
ROBINSON: Absolutely, Jack. I mean, look, the war is costing all across the board. Not only is it costing in terms of equipment we have to procure to protect our soldiers, we were almost two years into the war before the department could report that everybody had body armor that needed it. So they made an emergency supplemental to increase body armor.
But not only that, but there's wear and tear on the equipment that's currently in Iraq and that costs a tremendous amount of money. So as all these things, competing agendas, start stacking up and then you add on top of it the wounds that are received in war and what kind of health care someone needs when they come home, we're talking about possibly that the next four or five secretaries of defense could be paying for the cost of this war. And that's why everybody's tightening their belt. But unfortunately, it's on the backs of those who served.
SERWER: Steve Robinson, executive director, National Gulf War Research Center, thank you for coming on the program.
ROBINSON: Thank you very much.
SERWER: Coming up after the break, cracking the codes. Stem cell research is making news and it might make you money, too. We'll see how one stock is performing on Wall Street.
Also ahead, way outside the beltway. Every president needs a place to leave politics behind for a while. We'll look at some prime presidential getaways. And if your bank can't protect you, who can? Allen Wastler looks at the weak link that led to the recent identity theft case with thousands of potential victims.
LISCOVICZ: Now let's take a look at the week's top stories in our "Money Minute." The U.S. economy seems to be heating up. The government says gross domestic product grew faster than originally thought for the first three months of this year. And orders for durable goods rose 1.9 percent in April, the most since last November.
Big changes could be on the way for GM. Top Wall Street analysts are betting GM will soon begin a major restructuring, especially at its GMAC financing division. In another sign of leaner times, GM is reportedly asking its retiring executives to help out by offering their vehicle discounts to other people in hopes of drumming up new sales.
And there could be some help for Enron employees who lost their retirement savings when the company collapsed. A federal judge has approved a $69 billion settlement for 20,000 former workers. The average check would be about $3500.
SERWER: This week, the House of Representatives passed a bill that will allow taxpayer funded stem cell research. This bill is not expected to survive President Bush's promised veto but some investors seem to think it's a good time to invest in biotech companies specializing in stem cell research. Bio Cell is one of the largest or those U.S. companies even though it just starting trading this yea. Almost all of these companies got a quick boost after the house bill, but things started settling down at the end of the week.
That makes Viacell our stock of the week that stock was up 20 percent on Thursday because of this news. It's such a mixed bag. I'm not sure what people are smoking down there, because if you are saying the press is probably going to veto this stuff. You've got these companies. It's very, very speculative. They're little $2, $3 stocks, they've been up, they've been down.
LISCOVICZ: But Congress may still be able to override the president's...
SERWER: No, that's very much in question.
LISCOVICZ: And the interest remains high, it's not going away. Again, you're talking about biotechs, very risky, not all of them will survive. There are a handful of them, better known names. Certainly, all of them won't survive.
CAFFERTY: Another distinction maybe is important to point out in that piece of legislation down there in the House of Representatives is they're talking about federal funding for stem cell research. There's a lot of private funding going on. President Bush takes issue with using taxpayer dollars to fund this stuff. But there are research projects underway all over the country and around world, for that matter.
Somewhere in these companies is the next Microsoft perhaps, because when they do the breakthrough, saying we can grow the replacement kidney, we can grow a new liver, fix the macular degeneration by putting a couple new eyeballs -- when that happens, somewhere in there, there are going to be huge, huge returns. There will be a lot of failures, losses, along the way.
LISCOVICZ: Which company --
SERWER: I think you hit on something very important there Jack, when you started talking about Europe, and places around the world. As we fiddle, and diddle and argue about this issue, it is going on in places like Europe and China and India and we could be falling behind here. Which really kind of adds to the debate, you know, because it's an economic, as well as political, as well as social issue, you know. It comes back to one of those issues like abortion for many people, which is very, very much of a lightning rod.
So, you know, it's interesting to see whether this is going to tie the scientist's hands here. Again it really depend on where you come out on, I guess, the social part of this problem.
CAFFERTY: And if American stem cell companies aren't speculative enough for you, maybe look at a South Korean stem cell research company or an Indian stem cell research company. .
SERWER: And there will be people doing that.
CAFFERTY: Risky stuff though, but big return stuff if you hit it, though.
SERWER: Indeed. Coming up on IN THE MONEY, presidential palaces. We'll find out about the homes where some U.S. leaders have gone to get away from it all.
Plus, getting hitched today like there's no tomorrow. See how lavish weddings can lead to the kind of debt that will be around for a while. And spot the real deal. See if you can tell a fake smile from a genuine article on our fun site of the week.
WHITFIELD: Good afternoon. I'm Fredricka Whitfield at the CNN Center in Atlanta. Here's a look at headlines at this hour.
It's graduation day at the U.S. Military Academy at West Point. The class of 2005 is considered very special as they arrived just weeks before the 9/11 attacks. Ironically, the class has 911 graduates.
(BEGIN VIDEO CLIP)
GEN. RICHARD MYERS, CHMN., JOINT CHIEFS OF STAFF: The preservation of our way of life is absolutely at stake. Many take for granted the freedoms that generations of men and women in uniform have fought so hard to secure. We know these freedoms come at great costs and it takes extraordinary people to keep them alive.
(END VIDEO CLIP)
WHITFIELD: Graduates say the boot camp conditions coupled with the 9/11 attack, gave them more resolve in following a military career.
Former President Clinton is in tsunami-battered Asia. The former president is a U.N. envoy for tsunami relief efforts. He is hoping the Sulankan (ph) government and warring rebels can find common ground in aid sharing. Clinton hopes such a deal could lead to peace.
After going more than two days without water atop a 350-foot construction crane a murder suspect was apprehended earlier today in Atlanta. Police had been trying for two days to persuade Carl Roland to give himself up. And it was Roland's thirst that apparently that brought him down, after he accepted an offer of f water Roland was tackled, tasered, handcuffed, and taken into custody.
I will have all the day's news at the top of hour. Now back to more of IN THE MONEY.
LISCOVICZ: It's Memorial Day weekend and you think you need a vacation? Try living at 1600 Pennsylvania Avenue. American presidents have been escaping the stressful halls of the west wing for years, centuries even. From Washington's Mt. Vernon to Bush's Crawford ranch, nearly every American president has had a hideaway. Some chose a quiet cottage, a ranch. Others took very public trip trips filled with photographers.
Our next guest says presidential vacations say a lot about the man in the office. Kenneth Walsh is the author of the new book "From Mount Vernon to Crawford." A history of the presidents and their retreats. Welcome to the program.
KENNETH WALSH, AUTHOR, "FROM MOUNT VERNON TO CRAWFORD:" Nice to be here.
LISCOVICZ: What a great idea for a book. How much you can tell really just from where the man chose to spend his private time. I think the one most touching for me Kenneth was F.D.R. who went to Warm Springs, Georgia, and a place that is certainly not a very hot place in term of chic getaways. There was a reason for that. Can you tell us?
WALSH: Absolutely. Franklin Roosevelt of course was an American aristocrat. Had all the money he needed to go anywhere he wanted to. He contracted polio in his late 30s. And had polio -- and his legs were paralyzed. When he was president, he was trying to find a place to go where he could take some therapy and get some recuperation. He could have afforded to go anywhere. He found this rather ramshackle health spa in Warm Springs, Georgia, where the waters did make him feel better.
The reason he went there so often -- as you say, it's a very poignant story is partly because he helped inspire and motivate a lot of the other polio patients who were there. They saw the president there, undergoing the same kind of therapies they were going through, persevering, trying to get better, and they were inspired by this and Roosevelt understood that. Many of the patients that were
WALSH: That got into the discipline of therapy.
SERWER: Ken is there anything we can take away from the presidents and where they go and how much time they spend there at these retreats? I remember Nixon used to get all balled up and then he'd go out to the Kevisca (ph) and hang out with B.B. Revoso (ph) to feel better.
WALSH: Exactly, well President Bush is going to his ranch again this coming Thursday for a long weekend. He's been away for more than 300 days at the ranch in about 4 1/2 years as president. Which you think that's a long time. But for presidents, it's really not. Eisenhower was away for a full year of his presidency. And in the five-year period to his farm at Gettysburg. The farm wasn't ready as soon as he took office.
Reagan was at his ranch for a full year. Franklin Roosevelt was at Hyde Park for more than 550 days. And Warm Springs for 175 days. So this goes actually back to George Washington who escaped to Mount Vernon, which people can still see these days in northern Virginia, to get away. The presidents just have this desperate need -- they try so hard to get to White House and once they get there, they're desperate to get away from the place. But they just want some sense of normalcy.
It's actually sort of an poignant thought, that these public men who have so much power just feel they live abnormal and strange lives. They have to get a place that grounds them. That tends to be places they're familiar with, their homes and hideaways they've used for a number of years. CAFFERTY: Nevertheless there's a perception among the American public that presidents who spend too much time at the vacation house are slacking off on the job and not getting the public work accomplished. Are there examples where being away from the White House at these so-called presidential retreats has actually done harm to a president's political career?
WALSH: There is -- there are cases of that. Most Americans, I think throughout our history, understood that the presidency is a very difficult judge and they don't grudge the president's time away. But there have been cases where presidents have over done it. John Adams, our second president went to Quincy, Massachusetts, home, for really too much time. In one of years as president, he was away there for eight months.
WALSH: His critics in Washington said he's loafing, he is abandoning the office, and they took advantage of it and started to take over the functions of government because the president was gone. That's one case. Another was President Bush's father, George Herbert Walker Bush who went to Kennebunkport, his lovely estate up in Maine. And he went up there during a recession. You recall a lot of Americans and lot of Democrats criticized him for riding a speedboat and for taking time off.
He insisted he could run the government from up there. He really could. I think this insensivity image is what hurt him. And it was part of the whole image he had of sort of not being in tune with the country.
LISCOVICZ: Kenneth, I think conservatives call that place Mecca; by the way, it's not Kennebunkport. I've seen it it's pretty lavish. But you know it is interesting some of the presidents, like, for instance, President Reagan and G.W. Bush, they like it very simple. In fact, at the Reagan ranch there was no air-conditioning or heat. But LBJ was a complete contrast to that. He liked the trappings of the office when he traveled.
WALSH: He did and with LBJ you know we hear stories about his incredible ego. When you go down to the LBJ ranch, and you saw the full breath-taking range of his ego. Because everything was about him. He'd have people fly down from Washington and he'd have people sort of hanging out on his property, waiting for the president to tell them to do something. One of the more interesting stories is that he would take people out on tours of the ranch in this big convertible and he'd have a little bar in there and they could have drinks and they'd have beers and throw the beer cans off to the side.
And he would ride these cars into gullies and across ravines and he'd order the secret service to have it repaired for the next day so he could be ready to do it again. There was one other interesting story, he had an amphibious car which actually floated in the water and he would drive this car to the edge of Lake LBJ or the river, have it go downhill, then he'd shout out "the brakes won't hold" that end the people in the car would be terrified, they'd splash into the water. And then the president would say, "No, she can float." So he'd just -- everything -- and his humor was at other people's expense.
LISCOVICZ: Our taxpayers' expense, too, our tax dollars hard at work. Kenneth T. Walsh is the author of "From Mount Vernon to Crawford" a history of the presidents and their retreats. Fascinating, enjoyed having you, thanks.
WALSH: Nice to be with you.
LISCOVICZ: There is a lot more to come here on IN THE MONEY. Up next, marry in glitz and repent at leisure. Weddings have gone from hook up to blow out. We'll tell you how high the cost can get these days.
And ladies and gentleman start your shredders, there's another big identity theft case in the news. Allen Wastler of Money.com will have a hook at what went wrong this time.
SERWER: It's one of the biggest days and biggest bills of your life. A new survey by the Fairchild Bridal Group puts the average cost of a wedding this year above $26,000 bucks. Our next guest says many parts of the country, that number is low. Here with more is Rosie Amodio executive director at The Knot. Welcome Rosie.
ROSIE AMODIO, EXECUTIVE DIRECTOR, THE KNOT: Hi, thanks for having me.
SERWER: I'm interested, you heard about the cost of weddings phenomenon going up the past couple of years. It doesn't show and signs of abating does it?
AMODIO: No, not at all. In fact we are finding weddings are becoming bigger and bigger event. We're using a phrase called the marathon wedding, which is just several-days of parties and having lots fun.
LISCOVICZ: And one of the interesting things is that because people are getting married later in life, they're picking up more of the expense and they're doing it even more lavishly. Who would have thunk?
AMODIO: Absolutely. I mean I think the average age is 27 for women, 29 for men, which is up significantly from 20 years ago. We're finding it's no longer about the mother and father of the bride paying for the wedding. Couples are contributing up to like 70 percent of couples are contributing to their wedding.
CAFFERTY: I've got four daughters --
AMODIO: So you like the new trend --
CAFFERTY: I've got a vested interest in this conversation. Two of them are married. So we've got two. There's still a 50 percent divorce rate in this country. One out of two of these things ain't going to make it. What is it that drives people to think if they blow $100 grand of mommy and daddy's money they somehow got a leg up on the divorce statistics?
AMODIO: Well, I'm not sure about that. But I definitely think that a wedding is -- especially for women it's the biggest day of their lives. And they're not thinking about the divorce rate. They're thinking this is beginning my new life. Lets have a great big party.
CAFFERTY: How much of that is the result though of the marketing that is done by people who plan and sell big weddings to wide-eyed and romantic young kids who don't know any better?
AMODIO: You make it sound so terrible.
CAFFERTY: It is terrible.
SERWER: Rosie's wedding was terrific, by the way, she just got married.
CAFFERTY: I've been married twice. One of them worked, one of them didn't, and neither one cost more than $5 grand, but that's another story --
SERWER: That is why the first one didn't work.
CAFFERTY: To me and I'm old-fashioned. Like I said, I got four girls. It is absolutely a waste of money to spend and spend and spend on a wedding when you can be buying a house --
AMODIO: But that's -- I sort of disagree, because I'm -- honestly, personally, I just got married a few months ago. For me, it was something I dreamed of since I was a little girl and I wanted to have my princess wedding.
CAFFERTY: How's it working out for you so far?
AMODIO: It's going well. Let's hope I'm the good one of the two.
SERWER: Jack definitely has an ax to grind here, a couple marriages, four daughters, there's stuff going on. He has issues here, obviously.
CAFFERTY: That's right.
SERWER: Issues. But let me ask you about what about all celebrity weddings? These things crack me up. You know "The Bachelorette," "The Bachelor," you know, wedding TV. What's going on with the reality stuff, isn't that playing a big part?
AMODIO: Yes absolutely. I mean we think that a lot of why people are spending so much more money on their weddings is they see celebrities are everywhere. You know they see Nick and Jessica's wedding and they have a certain kind of cake and you want to have the same kind of cake and these come with a high price tag. So I think celebrities are definitely influencing the increase in spending.
SERWER: You're someone who studies this stuff. So what did you do and what worked? AMODIO: Well, I started planning before I was at The Knot. So I started planning the whole thing -- actually it was a little stressful was seeing all these real weddings and all these other people getting married, saying, they're doing these fabulous thing, I have to do something better. I feel even just for the ordinary bride that's a lot influence, too. You see your friend's wedding and Jack's four daughters; each one has to build on the previous wedding. Wait until that last one --
LISCOVICZ: That's it.
CAFFERTY: Was there any point, as you were leading up to this day, that you said to yourself, you know what, I'm spending too much money here?
AMODIO: Oh, every day. But it was really beautiful.
LISCOVICZ: Did you get a lot of nice gifts?
AMODIO: I did get a lot of nice gifts. And it was just -- you know what too, I did -- like my advice to brides is the week before you've done everything you can and have fun. Because I think what happens is a lot of people start stressing about the money they're spending and is there some debt and not having a good time and you really just have to be like, this is what I planned, and have fun with it.
SERWER: You just need a checkbook.
CAFFERTY: The other --
LISCOVICZ: And a good credit rating.
CAFFERTY: The other approach you can take to this is elopement. I'm not sure there's any significant --
LISCOVICZ: Jack, you're trying so hard.
CAFFERTY: No difference between the divorce rates of those who elope and those who blow all the money on the great big wed. Are you listening? Elopement. Look it up, it's a good word.
LISCOVICZ: And on that, we're going to leave it at that happy romantic note. Rosie Amodio blushing bride and executive editor of "The Knot." Thank you so much for joining us.
AMODIO: Sure thanks.
LISCOVICZ: And we have an announcement of our own. Because our hard-working producer Joanna Degaronamo (ph) is tying the knot herself next weekend. And Jack, Andy and I want to thank you for planning your wedding, keeping a cool head --
SERWER: And putting up with us.
LISCOVICZ: Putting up with us. Thank you Joanna and congratulations. Good luck.
Coming up after the break, smile like you mean it, stranger. We'll show you a website where you can guess which smiley face is on the level. And if something on our show today made you grin or grimace, write and tell us about. The e-mail address is INTHEMONEY@cnn.com.
But first this week's "Money and Family."
Make the most of your patio furniture this summer. We'll tell you how to lounge in style for less. Clean the spots off concrete by spraying the area with liquid chlorine bleach, wait five minute and rinse. Don't mix with anything but water. Protect your grill without spending a penny. Fold an old environmental table close in half and sew up the side. You now have an outdoor barbecue grill cover. Get the fire started. Fill an empty egg carton with a dozen briquettes, one in each department. Squirt each briquette with lighter fluid, close the lid and carefully light the container. Remember this is a job for an adult only.
With a stiff brush, give a warm saltwater scrubbing to wicker furniture. Let the furniture dry in the sun, this extends the life of wicker furniture and baskets and can save you big bucks for many summers to come.
I'm Susan Lisovicz for "Money & Family."
CAFFERTY: Over the years, you may have noticed that Money.com managing editor Allen Wastler is good at finding the good news in the bad and vice versa. To highlight that unique ability or disability, depending on your point of view, we've come up with a fancy name for Allen's segment. We'll call it "Inside Out." Today Allen wants to talk about identity theft and why it's not really your fault if some yahoo! from Slovenia gets away with your Social Security number. "Inside Out" I like that.
ALLEN WASTLER, MONEY.COM: You like that? That's very good. Now think about this in the latest rash of I.D. thefts we've had, the latest one was Wachovia, b of a, it turns out some of the employees were selling your profile to various collection agencies. Before that, they were in another one. Then of course, then there was choicepoint. Choice point is like oh we sold them to the wrong people. Then you had Lexusnexus, you had Ameritrade, and you had DSW -- a shoe store.
Our very own beloved Time Warner oops, we lost the box. Where's the box, don't know. Now in all this, all this identity theft, everybody thought the problem would be the Internet. And it's not. It's just your very own files and employees, the same people who have been around all the time.
Don't worry about the Internet so much, go ahead and spend on your credit card. Now worrying about identity theft with the other stuff, well big business now is responsible for losing all these profiles. Hmm, who's going fix it? Well, it's certainly not going to be big business. So then what we'll see is the age of the lawsuit, come in, and start seeing all these class actions against people losing your identity theft. And if anything has proven effective against big business to turn around and start guarding against the problem and fixing it, it's been class action. Don't worry, everything's fine.
LISCOVICZ: Get your lawyer on the case.
WASTLER: Eventually you'll collect some money.
CAFFERTY: I like that. I feel better already.
SERWER: Where do I sign up?
WASTLER: I'm glad I was able --
SERWER: How much money do I get?
CAFFERTY: What about the fun site of the week?
WASTLER: Oh, found it, the producing crew found an interesting one here, courtesy of the BBC. Let's see if you can determine a fake smile from a real smile. OK, run the video.
WASTLER: Susan, you say fake?
CAFFERTY: That looks real.
WASTLER: Jack, real. Andy?
SERWER: I thought it was real.
WASTLER: With teeth like that, it's got to be a genuine smile. I think the guy' English. Remember, we said BBC.
CAFFERTY: You know how I was able to get that one right, 40 year of watching television executives, you're able to spot a phony smile a mile away.
WASTLER: How about this lady, what do you think?
LISCOVICZ: Is that a smile?
WASTLER: Sorry guys, that's real.
SERWER: That was real?
LISCOVICZ: She didn't really commit.
SERWER: No. WASTLER: OK here is the final one. Now, i had a problem on this one too. I couldn't tell if it was a guy or a girl.
CAFFERTY: That is a problem.
SERWER: It's disqualified.
CAFFERTY: I don't know.
WASTLER: Come on, 50/50 shot.
WASTLER: Phony. Definitely phony.
SERWER: All right so we are two out of three.
WASTLER: That's only two out of three. There's 20 on the site, go check it out; it is really amazing it's fun to watch.
LISCOVICZ: Put Jack on there.
SERWER: Was that a boy or a girl --
LISCOVICZ: What about Jack's smile?
CAFFERTY: Thanks, Allen. Coming up next on IN THE MONEY, time to hear from you as we read some of your e-mail from the past week. And you can send us an e-mail right now address it to INTHEMONEY@cnn.com.
CAFFERTY: It's time now to read your answers to our question about whether women should be allowed to fight in front-line combat in the U.S. Military.
Sergeant Hattie Lange wrote to us with this, "The problem with your question is there is no front line anymore. The attacks can come from any place at any time. A lot of women soldiers have already been killed in combat situations and this question belittles their memory."
Believe me sergeant that was never our intent.
Jonathan wrote this, " I think we should allow women to have full equality in the armed forces. The women who volunteer for service are just as capable and are usually smaller in stature than the men. Why the army would reject fighters with a greater ability to conceal themselves confuses me."
And Mike in Illinois wrote, " The problem with having women in combat isn't the women it's the men. I spent 10 years on active duty and my experience was that male soldiers were unable to act rationally in cases where women were hurt or captured. This says more about American culture than anything else."
It's time now for next week's email question of the week, which is this, "Is the rising cost of real estate pricing you out your chosen neighborhood?" Send your answer to INTHEMONEY@cnn.com. And you should also visit our show page at Money.com/inthemoney which is where you will find the address of our fun site of the week. Check out those phony smiles.
Meantime thanks for joining us for this edition of the program. My thanks to CNN correspondent Susan Liscovicz. "Fortune" magazine editor at large Andy Serwer. And Money.com managing editor Allen Wastler.
Join us tomorrow at 3:00 Eastern Time, we will talk to one of Americas best know Latino journalist about the growing influence of Hispanic voters and candidates. "Univision" anchor Ramos will be our guest then. Tomorrow at 3:00 hope to see you.
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