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CNN IN THE MONEY

Cartoon Could Have Consequences In Western Europe; Is Bush's Oil Proposal Realistic?; Wal-Mart Has Become A Way Of Life In This Country; College Students May Not Have Real World Skills; Health Of NFL; New Jersey Retires, Starts New Career; Tech Companies Ready To Cash In With Newly Created Phones Specifically For Tweens

Aired February 4, 2006 - 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 Damascus the Danish and Norwegian Embassies were set ablaze today by Muslim demonstrators angry over drawings of the prophet Mohammed that first ran in Danish newspaper back in September. Tensions have erupted throughout the Muslim world since the drawings were reprinted in other European publications.
And Egyptian officials say a vehicle fire and rough seas led to the sinking of a crowded ferry in the Red Sea. The transportation ministers says a crew battled the fire in the hold while the captain tried to turn the ferry around and high winds causing it to capsize. Up to 1,000 people are feared dead in that tragedy.

Those are the headlines. I'm Fredricka Whitfield. More news as it happens. IN THE MONEY begins right now.

JACK CAFFERTY, CNN ANCHOR: Welcome to the program. I'm Jack Cafferty. Coming up on today's edition of IN THE MONEY, love it and leave it.

President Bush says he has a plan to making America kick it's oil habit. We'll find out his ideas are in line with reality. History suggests, no.

Plus wise up, that expensive college education apparently fails to teach you how to calculate a tip at a restaurant. That's pretty sad. We'll tell you about a new study that reveals how much today's college graduates don't know.

And field work. Money and how it's handled shapes the culture of the national football league and its fans on this Super Bowl weekend. See how the green back affects the gridiron.

Joining me today, a couple of IN THE MONEY veterans. "Headline News" correspondent Jennifer Westhoven, "Fortune" Magazine editor-at- large, Andy Serwer.

Call these news channels the cartoon network this week. Political cartoons causing a huge hullabaloo. One with Secretary of defense Donald Rumsfeld and one with the prophet Elijah Mohammed. And we got the whole world in a stir. What's going on?

ANDY SERWER, EDITOR AT LARGE, "FORTUNE" MAGAZINE: Usually cartoons are sort of a side show now that the main event this week. You know when I saw footage of Islamic extremists burning the Danish flag, which is a white cross on a red field.

All I could think of is this as a clash of the civilizations that Sam Huntington wrote about in his book. You know just to see that imagery. It sort of looked like the crusades. And the reaction has interesting consequences, I think in Western Europe.

JENNIFER WESTHOVEN, "HEADLINE NEWS" CORRESPONDENT: Well, it's just really -- I mean I find it's really scary. I mean it is one thing to have a culture that's really different from western culture but another one in what we do in our culture becomes so offensive that you end up with this threat of violence. I think that's starting to scare people, that you feel there is a threat of violence in the background.

CAFFERTY: The rule is, in the Muslim world that you're not allowed to do any sort of visual depiction on the prophet Elijah Mohammed. The Danish newspaper probably isn't Muslim. The guy who drew it probably isn't Muslim and going to what you just said, hey, do what you want in your own backyard but don't trying to be trying to tell everybody else what to do. Isn't that the stuff they object to in the Middle East, to some degree the influence of the west? I mean it cuts both ways you know?

SERWER: There are hypocrisies because of course they have anti- Semitic cartoons in newspapers. We can depict Jesus Christ but -- it's hard to know if these sides will ever be able to reconcile in these kinds of issues.

WESTHOVEN: Then it comes here, where we have the cartoon that's come up with Defense Secretary Donald Rumsfeld has been talking about it. And you have some of the chiefs, right, saying they were very upset that essentially that a veteran would be portrayed in a way that was also -- I didn't find that to be offensive. I thought that they were pointing out that they were getting a shabby treatment the veterans.

CAFFERTY: I love the political cartoons, because for semiliterate guys like me you can get the concept of the story and all the background behind it in about eight seconds by looking at good political cartoon. I hope they just keep coming.

President Bush put it plainly on Tuesday; we have a pretty big oil habit in this country. Gee, really? But if his speech is to serve as an intervention for a junky nation, do we even know where to begin in trying to get clean and how realistic are the goals that he set out? Like, giving up 75 percent of our dependency on Middle East oil by year 2025. Nothing like pushing it back to where somebody else will have to deal with it.

Here to answer that is Matthew Simmons he is chairman of Simmons & Company which is investment banking firm and he is also an energy consultant and he has also been a guest on this program with us before and we're delighted to have you back. Welcome Matthew, nice to see you. MATTHEW SIMMONS, CHAIRMAN, SIMMONS & COMPANY INTERNATIONAL: Thank you.

CAFFERTY: We've been having this discussion in this country since 1973, when the first oil embargo came along. We have got to cut our dependency on foreign oil. We are using more foreign oil than we ever have in our history and now the solution, according to the State of the Union Address, is to try to do something by 2025. Is this even realistic to have this discussion? Or is this another pipe dream that isn't going to happen?

SIMMONS: You know, I actually think that history's going to record the Tuesday night speech as a really big deal. Because it's really a very different dialogue than America's had before. For 1973 on, we've occasionally said we need to wean ourselves from Middle East from oil from a security standpoint.

What President Bush said Tuesday night is America needs to kick it addiction to oil. And he set a goal that is probably about the most realistic goal without doing some more draconian steps in saying, by 2025, let's see if we can reduce 75 percent of our imports from the Middle East. As a bogey that is probably about as realistic as you can do going towards substantial fuels without going to massive conservation.

WESTHOVEN: Do you ...

SIMMONS: My guess is that we could actually get there by 2025, and maybe faster. If we really get serious about all of the bio-fuels outside quern based ethanol.

WESTHOVEN: Do you think a lot of people I found kind of shrugged when the president then said, we're looking at wood chips and switch grass to do that. Is that realistic?

SIMMONS: You bet it is. You bet it is. Switch grass which is an energy topic I knew nothing about until about a year and a half ago when I started hearing speakers talk about diluted crispness of turning to quern based ethanol which is really energy intensity and ignoring things like switch grass. It's probably a fabulous source of energy. We just haven't spent actually any money trying to take it seriously and we're going to now.

SERWER: Matthew, are you concerned though, about the ties between the oil industry and Washington and it's not just the Republicans. The Democrats are part of this, and the Saudi royal family? I mean the Saudi royal family was none too pleased to hear the president's speech and there are all kinds of things tied together here. I don't know if you saw this movie "Syriana" that George Clooney is up for an Academy Award for. There is a little truth to that conspiracy stuff going on isn't there?

SIMMONS: You know I actually think what was interesting Tuesday night is the Bush administration sort of breaking ranks with the drumbeat coming out of the major oil companies that we have no supply problems. And these current prices are temporary. That is not going to be the case in my opinion.

Actually don't think their they're as close of ties as you would ever think, my hunch is with the Bush administration and the coziness with big oil. I think -- obviously been very concerned about the extent of our energy problems ever since President Bush was inaugurated in 2001.

And they tried very hard for five years to actually see if we could get some supply responses that fell on deaf ears and now they are turning around too. I suspect my own impression is we're going to have to basically figure out a program of massive conservation of really big changes as opposed to just cafe standards of cars but that's probably a year or two away. And it's all basically wrapped up in this issue are we actually approaching sustainable peak oil production.

CAFFERTY: Where is the leadership on this stuff? I mean these are problems that have in some way contributed to the war in the Middle East that we're involved in right now. Where's the leadership? Where's the energy bill that comes out of Congress and signed by the president, that says, we are going to undertake immediately massive conservation efforts in this country? I mean there's been no political leadership. There's been no challenge to the political muscle to the oil industry this, this country for 25 years.

SIMMONS: Yes. Yes. And probably you could argue for 25 years we didn't need to but now the problems at our door and now we will need to. I think you are going to see, whoever is going to become our next president, this will be the defining event of the next president, whoever it will be. If they don't grapple energy issues they will basically get consumed.

WESTHOVEN: The premise of your book "Twilight in Dessert" says that we are coming to a peak on oil, where we have hit about half of the supply. As we start running out, what does it looks like?

SIMMONS: Well, what it looks like is a mess. Because we have a global system now that's barreling towards the need to use 115 to 130 million barrels a day of oil by 2025, 2030. The assumption is about 50 or 55 million barrels a day of that will come from the Middle East.

I have real doubts that we might actually have a hard time hitting 60 million barrels a day by 2020 or 2025. And as a result of that America and the rest the world has to start ending its addiction to the concept that as long as we want to use more oil, it's going to be there. It's not a matter of price. It's a matter of scarcity of supply.

CAFFERTY: Matthew Simmons, chairman of Simmons & Company International, and author of "Twilight in the Desert." Thank you for being with us again. Nice to see you.

SIMMONS: You are very welcome. Thank you.

CAFFERTY: When we come back on IN THE MONEY, it's a Wal-Mart world and we're all just shopping in it. . We will look at the lever (ph) of that big box and how it changed our economy and our culture.

Plus, you ready for the real world? Now not if it involves calculating a tip or understanding a credit card offer. I guess you need a graduate degree to do that. A bachelor's won't cut it anymore. We will show you why college kids are falling so far behind.

And the beleaguered business of sports from NBA to NHL, the MLB. Find out why no other sport can spell success like the NFL.

(COMMERCIAL BREAK)

CAFFERTY: Love it or hate it Wal-Mart has become a way of life in this country. Consider this little fact. This just blew me away. Americans spend $35 million an hour at Wal-Mart, 24 hours a day 365 days a year. And according to our next guest that accounts for 8 percent of the U.S. gross domestic product.

Charles Fishman explains this phenomenon in his new book. It's called the "Wal-Mart Effect." Charles is also a senior writer at "Fast Company" and we're delighted to welcome you to our tidy little broadcast. Nice to have you with us.

CHARLES FISHMAN, SENIOR WRITER, "FAST COMPANY:" Thanks for having me.

CAFFERTY: What makes me want to reach for your book about Wal- Mart? There is a number them out there. Why do I pick yours?

FISHMAN: This is a book unlike any book that's been written about Wal-Mart because I actually managed to get behind the curtain and explain for the first time how Wal-Mart actually does what it does. And the second half of that is, what the unseen impact of Wal- Mart is. Wal-Mart changes what products are for sale. Not only what they cost, but what's for sale. Where it's made. What the quality of it is. And I connected dots for readers in a way that hasn't been done before.

SERWER: Charles, I don't know if you can answer this question. I don't know anyone can answer this question. But is Wal-Mart net/net good for the economy or bad for the economy? Providing millions of Americans with cheap goods, on the other hand, perhaps lowering wages not only for the people who work there but also for other Americans, critics charge.

FISHMAN: I think it is, if you'll forgive me, I think it's the wrong question. It's like asking if the car is net/net good for the economy.

SERWER: Well, it's a question nonetheless. A lot of people who say that it's bad for the economy. Do you agree with that?

FISHMAN: It's not bad for the economy. But Wal-Mart has negative consequences. But Wal-Mart's not going anywhere and so the important thing is to understanding great detail the good that Wal- Mart does. Wal-Mart saves us billions of dollars a year and makes the business world much more efficient. And understand in detail the bad that Wal-Mart does so that you can mitigate the bad.

We often accept things that provide us with something that's very valuable. And then we try to soften the negative impact. That's why we have catalytic converters on cars and air bags in cars. We love our cars. But we want to reduce the damage. I think we need to understand Wal-Mart very thoroughly so that we can increase the good that Wal-Mart does and reduce the bad.

WESTHOVEN: Can you talk a little bit about how shopping at Wal- Mart changes the world.

FISHMAN: Well, Wal-Mart moves such a large volume of goods that if you're -- no matter what category you're in. If you're selling toys, bicycles or movies, Wal-Mart is probably your largest customer. So when Wal-Mart says reduce the price you reduce the price.

Ultimately that leads to reductions in quality. It can force companies, as -- and I found companies that had to do this, to move their jobs offshore just because of Wal-Mart's price demands. So that changes the selection. It changes the quality. It changes where things are made.

Wal-Mart also gets inside our heads and changes what we think things should cost. We think DVD players should cost $49. When we see one for $189. We wonder why those people are ripping us off. So Wal-Mart also changes our perception of what's a good deal and our perception of quality.

CAFFERTY: In the introduction I said Wal-Mart accounts for eight percent of the U.S. economy. And yet the consumer price index, the inflation report that comes out every month is calculated without Wal- Mart in it, and as a result there is a significant discrepancy between the CPI as we are told it is, and what CPI would be if Wal-Mart were included. What are the implications of that?

FISHMAN: Isn't that remarkable? Inflation in the United States has been pretty quiet in the last five to seven years. But it's actually 15 percent overstated because the federal government doesn't take Wal-Mart properly into effect. Well, the monthly CPI numbers and the annual CPI numbers are looked at all kinds of people, Social Security, increases are key to them, mortgage rates, the Federal Reserve's decisions.

All kinds of things come pouring out of the inflation rate. So fact that the federal government doesn't adequately account for Wal- Mart's impact in the national inflation calculation is really a handicap to our understanding of our own economy and it clearly should be fixed.

SERWER: Charles, do you think Wal-Mart's doing a good job of responding to its critics at this point?

FISHMAN: I don't think it is. I think it's trying. I think Wal-Mart has 40 years of experience, not talking about itself. And two years of experience trying to explain itself. And it's started trying to explain itself in what already becomes a very hostile environment and I think Wal-Mart is still learning how to adequately both address the criticism, continue to do business, and find a new way of talking about itself in the world.

I don't think it's doing a brilliant job at that but I think it's great that Wal-Mart understands that given the size of its economic power, it really needs to be accountable to the public a little bit.

SERWER: All right, we are going to have to leave it at that. Charles Fishman, senior writer at "Fast Company" and author of "The Wal-Mart Effect" on the biggest box store of them all, Wal-Mart.

Coming up after the break, altitude checks. JetBlue's latest quarterly numbers are a switch from the usual. Find out if Wall Street is reaching for its seat belt.

Plus, don't let junior leave the tip. A new study looks at whether college kids have the skill to hack it in today's life. See if they're really as smart as they think.

And don't try to buy that blackberry out of Uncle Sam's grip. Allen Wastler of Money.com is going to tell us about that.

(COMMERCIAL BREAK)

WESTHOVEN: Let's take a look at the week's top stories in our "Money Minute."

Alan Greenspan finished his career with the Fed with one last interest rate hike. Greenspan now hands the reigns over to Ben Bernanke who will preside over his first Fed meeting March 28.

The shine coming off of Wall Street darling Google. The search engine disappointed Wall Street with its fourth quarter earnings report. It sent the stock down as much as 19 percent at one point. Google still had a huge gain in profits 82 percent compared to the same period last year. But it was enough to help that stock. At one point, it's been more than $475 a share.

Amid January job report, the unemployment rate fell to 4.9 percent. The lowest since July 2001 but the economy added just 193,000 new jobs. That was well short of expectations.

SERWER: JetBlue was another disappointing story for the markets this week. The discount airline posted a fourth quarter loss of more than $42 million. It also expects more losses for the first quarter this year. Until now, JetBlue had not had a quarterly loss since it went public in 2002. JetBlue shares are already down 23 percent from where they were at the beginning the year. That makes JetBlue our stock the week.

You know, guys, this low-cost carrier space was dominated by Southwest Airlines for years, they were a monster stock in the 1980s and 1990s and then JetBlue came along, went public. They did really well initially. Now JetBlue stock is back to where it was when it went public a few years ago. So you have to ask yourself, what's up? CAFFERTY: They said in the earnings report that there a couple of specific reasons that JetBlue didn't do well. It's not an industry wide discount phenomenon, it is this airline. They didn't leverage their fuel prices out far enough. So they're paying more for jet fuel than some of the competition. They're buying some new airplanes which obviously big capital expenditure and then there's more competition. There is more of these little start-up discount airlines out there in the playground.

WESTHOVEN: Well I think that could be really interesting change. They need all kinds of new mechanics to fix this, all kind of new parts to do this. This is a whole different ball of wax that they're buying into and I hope that that will keep their cost low.

SERWER: It different from Southwest. I mean once you start having new airplanes, you're right it costs more. The other thing is, to assume that oil is going to be $40 or $50.

CAFFERTY: Yes, what are they thinking about?

SERWER: It is stupid. I know it's not going to be and that's what kills me about United coming out bankruptcy. They are assuming their business model is assuming their oil will be $50 bucks. Excuse me it's at $65. And so now they're out of bankruptcy, they are still going to lose money. I have to say, I've had this rule, never buy an airline stock except with Southwest in 1980 and I think it really still applies here. JetBlue is probably great to be a customer.

CAFFERTY: Sure.

SERWER: They have the TVs in the back of the seat, which I really love.

CAFFERTY: Do they get IN THE MONEY on those TVs?

SERWER: I hope so; I think they do have CNN. Come on. But I just really wonder if you really want to buy the stock and probably recover a little bit. The other thing is Richard Branson is coming in here; Virgin America is going to be flying this year if all things go right.

WESTHOVEN: He's putting more money into that or I should say Virgin's putting more money into that than JetBlue had its start-up. So that could be a really interesting and cool airline.

SERWER: And you know the last point about Virgin America is that the other airlines are trying to block its entry into this entry. Continental and others have filed papers with the Department of Transportation. Saying you can't come in. It's control by Branson, which he is not allowed to do. But Branson has other investors who do control the airline. So my message to the other airlines stop whining.

CAFFERTY: Put a sock in it.

SERWER: I would like it if Singapore Airlines flew here. Wouldn't that be great?

CAFFERTY: It would be terrific. I don't want to go to Singapore.

SERWER: No, but if Singapore flew from Chicago to Minneapolis.

CAFFERTY: There you go.

SERWER: All right. Coming up on IN THE MONEY, so maybe they can order in Chinese but can they leave the tip? We'll hear how college students fared in the survey the skulls you need to get along in life. Uh-oh.

Plus, low ceiling. Unlike pro baseball the NFL has a hard cap on salaries. See how that rule and the nature of the game makes football stand out.

And look who's talking. Find out about cell phones made just for kids in our "Brainstorm" segment. Oh boy.

(COMMERCIAL BREAK)

WHITFIELD: Hello, I'm Fredricka Whitfield. Here's what's happening right now in the news.

Coretta Scott King lies in state in Georgia's capital. The body of Martin Luther King's widow was taken to the capital by horse-drawn carriage about two hours ago. She died on Monday. Her funeral is set for Tuesday.

More violent protests today over a controversial cartoon of Islam's prophet Mohammed. Officials in Damascus, Syria say Muslim protesters set fire to a building housing Denmark's Embassy. They reportedly stored police barriers around Norway's Embassy and set fire to that building. The characters of Mohammed, which appeared in Danish and Norwegian newspapers, violate Islamic law.

That standoff over Iran's nuclear program intensifies. The International Atomic Energy Agency voted today to refer Iran's nuclear activities to the U.N. Security Council. Iran now says it will resume full-scale nuclear enrichment. U.S. Senator John McCain is not ruling out military action against Iran.

Palestinian sources tell CNN a meeting is under way between Palestinian President Mahmoud Abbas and a Hamas leadership in Gaza. The meeting follows the militant's group surprised victory over the Fatah party in last week's parliamentary elections. Hamas has asked Fatah to join a unity government. So far Fatah has refused.

And I'll have all the day's news at top of the hour. Now back to IN THE MONEY.

WESTHOVEN: A fresh crop of college graduates is heading out into the real world in just a few months. Maybe they need to get a little more real before they go. The Pew Charitable Trust Commissioned a study of college kids to see how well they could handle daily tabs like tipping, balancing a checkbook.

For a look at how they, did we're join by Stephane Baldi he directed the survey. He is a principle research scientist at the American Institute for Research. Welcome and apparently you were really surprised they did so badly and thought we better go become and double-check these numbers.

STEPHANE BALDI, AM. INSTITUTES FOR RESEARCH: Yes, that's right. I think that when we started the study, we thought that we were measuring every day literature skills and so we assumed that a lot of the students graduating -- excuse me in four-year colleges would do pretty well. Excuse me. And what we found out is that about half of them are not able to do advanced task in literacy.

SERWER: What are some examples of that though, Stephane? I mean you know are you talking about people not being able to tip at a restaurant? Is that true?

BALDI: The advance tasks that we are talking about have to do with being able to comprehend an op-ed piece that has balancing viewpoints.

SERWER: Well, sometimes I can't understand those. But go ahead, I'm sorry.

BALDI: So I think a lot of the examples that have been used in the past, have to do with more basic literacy. The calculating a tip is something that about 20 percent of students in quantitative literacy are not able to do which is pretty scary.

CAFFERTY: Let me go back to this thing that you just touched on. Being able to read the op-ed page of a newspaper and understand it is considered an advanced task for seniors in college? What in hell is going on in this country?

BALDI: Correct. Well, you have to understand that the assessment that we administer to all of those students was actually developed by the U.S. Department of Education to gauge the literacy skills of the entire U.S. populations and that study was actually released a couple of months ago. We use this assessment thinking, as I said that college students would be able to ace those tasks. And it turns out it really isn't the case.

WESTHOVEN: And is that what you found from talking to college professors that, if kids don't have any critical analysis skills, how are you going to write an advanced essay about economics or philosophy.

BALDI: Correct. One of the findings from the study is that students who do get challenged in their classes to do analytical thinking, comparing contrast type of essays actually do better on overall every day literacy than students who don't get to do those things in classes.

SERWER: But Stephane, what are the practical effects or implications of this? Does this mean we will have 20-year-olds lost, trying to drive around America, looking at maps and not being able to read them? What will it mean?

BALDI: Well again I don't think -- keep in mind that it's about 50 percent can do those tasks, which means about 50 percent can do them. What it does mean is I think colleges need to take a serious look at that because the real concern that I have is what does this mean in terms of preparedness for the workplace. Are we going to be competitive in regards to other countries?

CAFFERTY: Well, the answer is no, we're not and we are falling behind in math and science and headed toward at least educationally, intellectually some sort of third world status. Why has this happened?

Why have America's educational institutions been allowed to deteriorate to the point where we're graduating college kids, graduating with bachelor's degrees, who can't read an editorial in the newspaper, can't read a map, don't know how to compute a tip in the restaurant. Why has this happened?

BALDI: Well, since the study came out, I have talked to a lot of people. Especially folks in colleges who say well essentially their jobs to be educating students on those basic skills. They should really have them before they get to college. What I have told these people is however, your institutions are giving them degrees so somebody needs to take responsibility somewhere and say we need to have those students be able to do those skills.

WESTHOVEN: All right, Stephane Baldi, thank you so much for joining us. Also thanks to my teachers who have taught me how to compute a tip unless I have had three margaritas. More to come here on IN THE MONEY, up next, a league of their own.

The NFL has more to celebrate this weekend than Super Bowl XL. Find out why it succeeds where other leagues fail and going back it school. We will tell you what a former sales exec learned about himself in his second career as a teacher.

(COMMERCIAL BREAK)

SERWER: Enough of all this news and business talk. We all know Super Bowl XL is the main event this weekend. So joining us now to talk about the game and the health of the NFL is noted sports journalist, my pal Roy Johnson, who is a columnist for "AOL Black Voices." Roy, welcome to the program.

ROY JOHNSON, COLUMNIST, "AOL BLACK VOICE": Thank you very much, Andy. You know the first thing we have to do here is to remember to go home and teach our kids how to calculate a tip!

SERWER: Especially if you know any waitresses, right.

JOHNSON: I'll stay away from that.

SERWER: Yes. Hey, listen Roy; the NFL's tendency has been around for a while. We talked about the fact the NBA used to be the number one league. Now it's the NFL. Why is the NFL flying so high? JOHNSON: Well, it's pretty interesting. You and Jack certainly are old enough to remember that the NFL was not always number one. Jennifer, I know is not old enough to remember.

CAFFERTY: That's cute.

JOHNSON: Back in the day, they couldn't fill the stadiums. Nobody watched on television but a combination of wonderful marketing and luck has really turned the NFL into the standard by which all other sports are measured.

CAFFERTY: Isn't there a risk this weekend that they could turn it all around? Take a look at the Marquee; you have Seattle playing Pittsburgh in Detroit. I mean that's impressive.

JOHNSON: That could be in other sports a combination for disaster. But you know what, the Super Bowl trumps all-else. It is the one event that America turns to besides the Oscars every year. No matter who's in it. No matter what movies are playing or up for best picture, people watch the Oscars. The NFL has become about the teams.

And about this passion that mostly young men, even though 30 million woman, I hear, will watch the Super Bowl this weekend, have for this sport that is only played at specific times each week, it's supply in demand. I mean the basic business concept, the supply is limited and the demand is huge.

WESTHOVEN: How much of this is because, you know when the Super Bowl is going to be every year and there's only a certain amount of games. Whereas in baseball, the World Series, it's very variable. You can't plan for it. You don't know what city's it's going to be in.

JOHNSON: That's absolutely correct. You only have a limited number of games during the regular season. You know it's on Sundays. You know to time your whole week to focus on this particular point. NBA season is 82 games and 162 games for baseball.

So it's a very -- hard to get up for a baseball game or a basketball game. Because there's so many of them and then this is playoff, let's face, it a wild card team only has to win three games to get to the Super Bowl. Whereas the NBA season, the post-season, seems like it takes six months to finish and it is really an endurance task and in baseball, well there is only a limited number of series, they are seven-game series.

So just to get to the Super Bowl is a very focused endeavor. And just arriving there and being there is a major accomplishment. And everybody's there to watch. You know when it, where it is, and everybody book their tickets early.

SERWER: Roy, how much of this has to do with the man at the top? For a while David Stern, at the NBA, was proclaimed to be a genius. Doesn't look so smart now I guess. Paul Tagliabue, now we're saying the same things about him. Oh, the man walks on water. JOHNSON: Well one of the things that certainly those guys did was recognize their product and try to market it accordingly. But the one mistake that perhaps the NBA made was focusing so much on individual players throughout the '80s when you had Magic and Bird and Isaiah Thomas and individuals who were stars. That now it is hard to change that and focus more on the uniform.

That's where the NFL has been masterful. People root for the uniform. Yes, are there stars in the NFL? But with free agency, it doesn't really matter. To most fans, who's under the helmet? Pittsburgh Steeler fans have been Steeler fans for generations.

Seahawk fans have been Seahawk fans for at least a couple minutes now. But if you look at Dallas and cities like Chicago, even in Atlanta, you know a new teams, Jacksonville, Carolina. People are rooting for the uniform. And that's a major difference because you can have player's come and go. And get injured, but when the game arrives, it's all about the team.

CAFFERTY: And Terrell Owens perhaps labored under the assumption he was playing in the NBA. The NFL tossed him right out on the parking lot turf and said why don't you sit out there and cool your heels for a while because you're a distraction. You're not part of the solution. You're a big part of the problem.

The NFL, the team concept partially is driven by the economics of the salary cap. Just quickly before we get out of here. Give me a sense of why the NFL salary cap contributes to the team concept. And the idea that fans root for the uniform, where the salary caps structure in some of the other sports doesn't.

JOHNSON: Jack, it's very simple. The NFL has a hard cap. Which simply means you can only spend x number of dollars on your players no matter what. The other leagues pretty much have a soft cap, which allows them to spend more on players.

They may pay a penalty for that or may restrict in signing other players but at the end of the day, they can spend more than this cap allows and thus, big market teams can spend more money because they have more revenues. And gives them a better shot at reaching a championship, of course unless you're the Knicks. But that's another story.

Whereas in the NFL it is a hard cap. So there's parity. Every team can only spend a certain amount of money. So every team has access to the same kind of talent and it then comes down to the people who choose the players, whether they're smart.

Whether the coaches can really combine these talents into a wonderful team and it really gives everybody at the beginning of the NFL season, an opportunity to get to the Super Bowl and this year, we have two of those teams in Pittsburgh and Seattle. Two teams that very few people thought would be here this year.

WESTHOVEN: And that of course an equal playing field does seem a lot more American. Roy thanks very much for joining us. JOHNSON: Absolutely. Anytime.

WESTHOVEN: All right. For many Americans retirement marks the end of work. But for one New Jersey man, retiring was just a starting point for a whole new career. In this week's "Life after Work" segment, the story of what he's learned in his new life as a public schoolteacher.

(BEGIN VIDEO CLIP)

PAUL BORGHESE, TEACHER: My thought was that I would probably work with Verizon until around age 55. Still sounds kind of young for retiree but that was my plan. But then my plans changed.

WESTHOVEN (voice-over): Life after work caught Peter Borghese by surprise when Verizon offered him early retirement at age 51. He took the buyout but ...

BORGHESE: I wasn't ready for the hammock in the backyard or the golf course yet. I knew I had to do something.

WESTHOVEN: Borghese had considered a teaching career when he was in college. Now about 30 years later, he's finally where he wanted to be, in the classroom.

BORGHESE: A couple of my teacher friends said don't do it. You don't know what you're getting into. Summers off sound great to somebody who was in another industry. But it's not that easy.

WESTHOVEN: Borghese felt he found his calling and entered an accelerated program to get certified. Now he teaches full-time at an inner-city school.

BORGHESE: I ended up here in Jersey City, TS 39, Charles Defucial (ph) School. I teach science and math in 6th grade. If a kid, for example, comes into class. And can't write very well. And that's in September. And by the end of the school year, that same kid is now writing coherent paragraph, sentences, and then you know you got to the kid.

You know, you had an affect on that kid's life and that I think that is the reward. It's not a monetary reward. It's not a reward where I get something they can hang on my wall and say, gee, look at what I did. It is just something that comes from the heart that you just feel good about it.

(END VIDEO CLIP)

WESTHOVEN: Coming up on next week's "Life after Work" segment, a lifelong hobby becomes a job. Harry X (ph) spent a lifetime as an engineer on the now defunked Baltimore and Ohio railroad, now he is enjoying his retirement by reliving his past. We'll have his story next week.

IN THE MONEY will be right back.

(COMMERCIAL BREAK)

SERWER: OK, if you thought it was hard enough to figure out your cell phone, consider this 5.3 million cell phone users are between the ages of eight and 12. That's according to market research firm Yankee Group, which expects that number to double by 2010.

A handful of tech companies are ready to cash in with newly created phones specifically for the tween set. This week our friends over at "Consumer Reports" reviewed the first two models to hit the market.

(BEGIN VIDEO CLIP)

JOAN MURATORE, "CONSUMER REPORTS:" This is the Firefly mobile phone for kids. If you noticed, it has no keypad. So the parents have to enter numbers using a menu, similar to what you would use to enter a text message on a normal phone.

You can see it's got some preprogrammed buttons. It's got a mom button and a dad button. This is a 911 button on the side. This is the phone book button, where the child can scroll through the pre- entered numbers that the parent has put in and make calls to those people.

This is a prepaid phone where you buy a card. You can load minutes onto the phone. This way the child can't run up a huge bill and it is also a safety thing so the parent can control whose contacting their child. It worked fairly smoothly. The voice quality is OK. It is not high tech in the since that it has other features, like text messages or picture taking or anything like that. So it's really an average cell phone.

This is also a parental-controlled phone. It's called the leapfrog tick tock similar to the other phones that we tested for kids. The parent can enter numbers. And the child is limited to making and receiving calls to those numbers. Leapfrog is an educational toy company and it's got some games on here, such as spelling games, math games, where the child can earn extra reward minutes to make calls or receive calls.

We had some problems getting this phone activated. I think it's a fairly new phone on the market from Leapfrog. And we're actually retesting this one right now. We bought another sample and reporting on that shortly.

The minutes for these phones are about 25 cents per minute, which I think is kind of expensive in terms of prepaid phones. Regular prepaid cell phones. And also the minutes expire after a certain period. Really the only reason to buy one of these would be if you wanted to limit. You want to use the parental control feature. If you want to limit who the child can call and who can call them, the safety issue, or if your are looking at it as a cost issue.

If you're looking to buy a regular cell phone for your child instead of one of these, you want to look for a plan -- a prepaid plan that offers the largest number of minute and also that offers text messaging which is a very popular feature with kids.

SERWER: The kid's cell phone space is getting more crowded. The Migo by LG hit the market at the tail end of last year. The company is recommending it for children as young as 5. "Consumer Reports" hasn't reviewed that one yet.

Coming up next on IN THE MONEY go Madison Avenue, one better. We'll show you a Web site that lets you create your own advertising headline. Our "Fun Site of the Week" is just ahead.

Plus, it's time to hear from you, as we read some your e-mails from the past week and you can send us an e-mail right now too. We are at INTHEMONEY@CNN.com.

(COMMERCIAL BREAK)

CAFFERTY: Things are looking up for BlackBerry users as a British court threw out a patent infringement case against the portable e-mail device this week. If the U.S. Federal Court does the same thing the threatened shutdown of a popular system will not happen, but there is one group of people that wants to make sure that they aren't inconvenienced no matter what the court decides. Guess who they are? Allen Wastler's going to tell us.

ALLEN WASTLER, MONEY.COM: Oh you would think your government would want to share your pain. Share your lot in life. But no, no, no, guess what the Justice Department lawyers were doing this week? They were going to the court saying, please your honor, if you shut down the BlackBerry service, make sure ours doesn't get shut down, OK? Because it's so important for the nation.

WESTHOVEN: You are so cynical.

WASTLER: This is ...

SERWER: I agree with you. It is very lame.

WASTLER: If you were passing nuclear launch codes by BlackBerry, there is a serious problem. Their Blackberries didn't help them with Katrina, did it? If they get shut off, everybody is shut off.

WESTHOVEN: Wait till your grandma is sick and the EMT doesn't get the message?

WASTLER: The EMTs have different systems. It's called a cell phone, OK? And there is also other ...

CAFFERTY: Walkies.

WASTLER: There are other distributions services that can work. If they are going to shut down a BlackBerry service that will take all citizens everywhere I think the government should share in it, too.

CAFFERTY: I agree with you.

SERWER: I agree with that one. WASTLER: And not isolate them out like that. I'm surprised that you are defending these bureaucrats, pencil neck ...

CAFFERTY: I have another one, even if the court decides not to shut down the BlackBerry system, why don't we just shut down the Washington BlackBerry system so the politicians don't have their BlackBerry's.

WASTLER: The inside out on that.

CAFFERTY: Go all the way inside/out.

WASTLER: Now as we said, it probably won't happen. There are a series of decisions this week, which is, sort of tilting the favor back to Rem. Rem of course make the BlackBerry. NTP is the outfit that owns the patients on it, a lot of people claim that these are what they call the patent controls. That come up with the idea.

WESTHOVEN: I know a lot of BlackBerry users who are hoping it gets shut down.

WASTLER: Why? Just to be able it say, sorry boss, didn't get the message.

CAFFERTY: Right, interesting. I'm one of those people that ...

SERWER: Where is your BlackBerry Jack?

CAFFERTY: It doesn't matter. I don't have one. Shut it down. I don't care. It's irrelevant. Shut the cell phones down. I don't have those either.

What's the "Fun Site the Week?"

WASTLER: Well we decided to get into advertising thing with the Super Bowl coming out. So we found an ad slogan generator. Go to it, plug in the name taken will go up with the slogan that's right for you. I plugged in mine and came up with this. Wastler: The Ultimate Driving Machine. Of course I had to stick in Jack, too, and we had Cafferty is Good for You.

CAFFERTY: Sounds like a metaphor.

SERWER: Is that true?

WASTLER: And of course let's take the whole kit and caboodle. How about IN THE MONEY, the Pause that Refreshes.

CAFFERTY: That's good. That used to be a slogan for who?

WASTLER: I forget.

SERWER: Here.

WASTLER: No, cigarettes, I think.

SERWER: Yes.

CAFFERTY: Cigarettes commercial.

SERWER: We're just as healthy. Same kind of thing.

CAFFERTY: There you go. All right. Now it's time to read your answers to our question about, whether you think Ken Lay and Jeff Skilling will be convicted. I certainly hope so.

Michael spoke for a lot our e-mailers when he wrote, "This trial will be a high farce. I expect Lay & Skilling to be convicted on 1 or 2 counts and then be sent to a cushy prison for a short time. They will both come our very wealthy and with more business opportunities than before. Just ask Martha Stewart."

Dixie wrote, "I think it will be tough, but Lay and Skilling will be convicted. Too many people lost everything while Enron's top executives were saving themselves for the jury not to side with the prosecutors. But I think they will get light sentences."

And Richard in Colorado wrote this, "I know they picked the jury already, but if they want a conviction, please put me on that panel. I will pay my own expenses."

I like that. I'm with Richard. Time now for next week's e-mail question of the week, which is this, "Could you find all the things you need for your family today without the big stores like Wal-Mart?" Send us your answers, your thoughts on that to INTHEMONEY@CNN.com.

You should also visit our show page MONEY.com/in the money, which is where you will find the address for our "Fun Site of the Week." Plug in your name get a slogan.

Thanks for joining us for this weeks edition of IN THE MONEY. My thanks to "Headline News" correspondent Jennifer Westhoven. "Fortune" Magazine editor-at-large Andy Serwer and Money.com managing editor Allen Wastler. Hope to see you back here next week. Saturday at 1:00, Sunday at 3:00. Enjoy the Super Bowl and the rest of your weekend.

(COMMERCIAL BREAK)

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