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How to Estimate the Cost of Your New Car; Free Broadband?; Paying More for Sports Tickets, or Does it Just Feel That Way?; How to Keep Your Medical Bills Low
Aired September 8, 2007 - 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: A look of the top stories in a moment IN THE MONEY is next. Here is a preview.
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ALI VELSHI, CNN HOST: Thanks coming up on YOUR MONEY while one presidential candidate thinks you should see the doctor more often.
Plus how to save thousands of dollars by driving the life out of your car. And later why the FCC doesn't want you to get wireless Internet for free. All that and more after a quick check of the headlines.
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WHITFIELD: Our top stories right now, a flash flood watch is in effect through tonight for parts of Oklahoma. Several cars, as you can see, in this videotape, stalled in flooded streets or just simply tried to trudge through. The remnants of hurricane Henriette are mixing with another storm system passing through Oklahoma.
We're waiting word on first lady Laura Bush. Mrs. Bush was scheduled for surgery today to relieve pressure on some pinched nerves in her neck. The problem prevented Mrs. Bush from accompanying the president to Australia this weekend.
They're holding a news conference at this hour in Nevada to discuss the search for Steve Fossett. The millionaire adventurer took off in a small plane on Monday and hasn't been seen since. CNN is monitoring the news conference and will bring you any development.
We'll update your top stories at the bottom of the hour. Now to YOUR MONEY.
VELSHI: Welcome to YOUR MONEY, where we look at how the news of the week affects your wallet. I'm Ali Velshi.
STEPHANIE ELAM, CNN HOST: And I'm Stephanie Elam sitting in for Christine Romans.
Coming up on today's program get the cost of a new car by squeezing every last mile out of the one you are driving today.
VELSHI: Plus one company's bid to bring you free broad band service and why the FCC put that idea on hold. ELAM: And later on, see if you're really paying more for sports tickets these days or it just feels that way.
VELSHI: Well is you want to keep your medical bills low, it helps if you don't need a doctor in the first place. A couple of studies out this week point to a link between how you live and your chances of getting sick. Well a survey from the Netherlands say that smokers are 50 percent more likely to develop Alzheimer's or Dementia than non-smokers or people that quit smoking.
ELAM: And researchers in Texas say they have discovered that tinkering with just one gene in lab animals can control how fat they get. But nobody sure if it does work in humans, and even if it does an anti-fat treatment is a long way off.
So, count on your doctor to keep bugging you about the dangers of obesity and smoking, among other things, of course.
VELSHI: That's standard practice if you're in preventive medicine, which Democratic presidential candidate John Edwards says he would make mandatory under his health care plan, if he were elected president.
ELAM: CNN's chief medical correspondent Dr. Sanjay Gupta is with us now to talk about whether that approach would save you money or actually cost you more. Good to have you here.
DR. SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT: Thanks. Thanks for having me.
You know it is a short term, long term sort of answer. Short term, most people would agree, if you're going to start providing all these new services, prevention-like services, screenings for cancer, looking for heart disease and things like that, and maybe even preventive medicine to try to keep those diseases at bay, that's going to cost more money.
But the flip side of it, this is talking to certain surgeon generals and health care officials who have been reporting on this over the years, in the long term it could save you money, taking care of stage one colon cancer much cheaper than taking care of four stage colon cancer. Not to mention that it is better for the patient as well. Obviously it is a financially medically morally in the long run it makes a lot of sense, but the investment up front is what a lot of people talk about.
VELSHI: We've seen some areas where the cost benefit analysis works in favor of actually figuring this out ahead of time, breast cancer, prostate cancer, colon cancer. A number of things are like that. One of the things you said and we heard before is that this system is not built about prevention. It's not built to not have you treated for the illnesses in America.
GUPTA: Exactly. We're not a culture of prevention in this country, a culture of wellness. We're a sick care system here. It permeates from the doctors to the individuals. People go to the doctor when you're sick, you don't go to the doctor when you're well. More interesting than that, as we looked into this, Ali, the insurance companies may not necessarily want to invest in Ali Velshi's health. Because there's a good chance you're going to switch insurance companies at some point over the next several years.
They've just put that expenditure towards you and they're not going to reap the rewards years from now, which is what the argument is. People use that as a stepping stone to say that's why we need a national health care system. Unless you have a national health care system you can't get rid of that gaming, if you will, by private insurance companies, which in the end hurts you.
ELAM: Here is the thing, though. Even if I do go to the doctor twice a year and I'm on it those two days out of the year, I'm still free to go out and eat pizza every single night, start off every single day with a donut and never, ever do any cardiovascular exercise. Totally possible. How is it a way to make this it into a mind changing thing or just simply just not give seeming like we're about prevention?
GUPTA: That's a good point. A lot of this will come down to personal responsibility. I don't think that's going to change, no matter what the system is. Ali, you're from Canada, you are from a country that has a national health care system.
GUPTA: It doesn't change necessarily people's individual behaviors.
GUPTA: Stephanie, this is a country that we live in now, two- thirds of adults are overweight or obese. We would like to see those numbers come down. Having a preventive system may prevent some of those problems from turning into deadly or chronic diseases. You're right. I wrote a whole book about this, the whole idea we need to chase life ourselves in some way so we don't get stuck in the first place.
VELSHI: Preventive is a combination of testing and lifestyle changes, and weight management. As you studied, there are interests are working against that. It's not a simple matter. It seems obvious, but it's not obvious.
GUPTA: I was fascinated by this. Give you a quick example that brought it home for me. Look at the acreage of farm products in this country, about 85 percent of it, of the farm belt in one particular area goes toward two products, there are corn and there are soy beans. Corn gets turned into fructose, which is a high-calorie, low-nutrition stuff. Soy beans get turned into Tran's fat. Hydrogenate which turns into Trans fats; simply put two of the biggest products we make in this country are bad for us. It's starting.
If we follow the food pyramid and ate the five servings of fruits and vegetables, we don't make enough fruits and vegetables to satisfy the demand. It's a lot of rhetoric. The farm bill does not support it. This is at every single level. I'm giving an example of the government and what they choose to subsidize, but obviously the fast food industries, schools and, as Stephanie brought up, individual responsibility. Everyone plays a part here.
VELSHI: It's interesting because it's one of the issues that really does affect everybody, but we don't have health care candidates; we don't have people who make that whole national policy idea their platform.
ELAM: It would take a will the more than what we're seeing.
GUPTA: A lot of people are talking about it more than ever before. They've talked about it in the past. It does seem there's more teeth this time around. I'm anxious to see what happens.
VELSHI: Stay on it. Thank you.
GUPTA: Thank you.
VELSHI: Dr. Sanjay Gupta. For our viewers, you can see much more of Sanjay's reporting on these issues every Saturday morning on "House Call" it runs Saturday and Sunday at 8:30 am Eastern.
Now, you can also catch Sanjay in an upcoming CNN "SPECIAL INVESTIGATIONS UNIT" hour called "Fed Up: America's Killer Diet." That's premiering in just a couple of weeks Saturday, September 22, at 8:00 p.m., they are always excellent watching.
We are going to take a break when we come back ON YOUR MONEY save tens of thousands of dollars by running your car into the ground. We will tell you exactly how that works when we come back. You're watching YOUR MONEY.
SUSAN LISOVICZ, CNN CORRESPONDENT: I'm Susan Lisovicz at the New York Stock Exchange where investors got a bomb shell on Friday. For the first time in four years, the economy did not create any new jobs in a month. In fact, government numbers show 4,000 jobs were lost in August. Economists had been expecting job growth of more than 100,000 jobs.
The report also revised the June and July jobs reports lower. The report puts even more pressure on the Federal Reserve to cut interest rates for the first time in four years. The report still rattles investors as another sign that the housing recession is affecting the broader economy.
Now back to YOUR MONEY.
ELAM: It was supposed to be a banner year for Detroit's auto makers, their layouts were largely behind them and they were making better cars. Auto sales numbers for August are in. While GM saw sales rise for the month, 2007 so far has turned out to be a miserable year for Ford and GM and not so good for Chrysler either. VELSHI: But, late in the week Chrysler made an unprecedented move, hiring the president of Toyota North America. June Press was 37 year veteran of Toyota, who built the North American division into America's second biggest car maker. Now he is going over to Chrysler to being the co-vice chairman and co-president.
ELAM: Maybe Detroit's tired of getting kicked in its trunk, we will see here. Michael Quincy automotive content specialist with "Consumer Reports" joins us now. Take a look at this news. Mr. Press was responsible for the Prius. He said it would make a big deal here, he moved things around at Toyota. What do you think this news means?
MICHAEL QUINCY, "CONSUMER REPORTS:" Well this is big news for Chrysler. If Jim Press can have any kind of impact on Chrysler that he has had on Toyota, then it's only good news for these guys. From "Consumer Reports" perspective, it's all in the product.
VELSHI: When you talk about the product in Chrysler taking a longer term view to its future "Consumer Reports" most recent issue suggests that you should take a longer term view with your own car and, when I talk to people about this, they thought it was counter intuitive. You're talking about keeping a car 15 years, 200,000 miles?
QUINCY: Sure. "Consumer Reports" research has shown that if you actually drive your car into the ground, you're going to save a lot of money in the long run as opposed to buying a new car every five years. "Consumer Reports" has long been saying do the maintenance, preventive maintenance. Do whatever it says in the owner's manual.
VELSHI: Interesting, though, that when you talk about who reads the owner's manual, this edition of "Consumer's Reports" indicates that the saving over five years versus -- over 15 years versus buying a new car every five years can be very dramatic. On some cars we were looking at $30,000.
QUINCY: True. You buy a Honda Civic, you do preventive maintenance, you change the oil, change the timing belts, that's something you just can't -- I just won't do that. You think you're going to save money on maintenance. What you have to do is rebuild or replace the whole engine. If you bought a Honda Civic every five years, the numbers really start adding up as opposed to putting the money into just keeping it running.
VELSHI: Is that how long we change cars? Is five years some kind of a number?
QUINCY: I think that's average. People that I know, they're car people. Oh, I'm bored. I want to get a new car. Someone I know has a Lexus LS, very nice car, very reliable. She only had 20,000 miles on it. She just said, well, you know, I'm just thinking about something new. That's the way people are. But in terms of financial, it makes good money sense; drive the car into the ground.
We're talking about safety. Not at 150,000 miles some belt's going to go ... QUINCY: Right. If you're worried about the car's reliability, driving on the west side highway at 3:00 in the morning, you don't want to be afraid that your car is going to break down. On the downside of keeping your car a long time, you're not getting all the latest safety equipment. When you buy a car, car shopping this weekend or in the next couple of days, make sure you buy a car with a lot of good safety equipment. As the car gets old, technology keeps moving on. Again, we're talking about financial sense, drive it, drive it, drive it, but maintain it.
ELAM: Let's talk a little bit about some of the good bets for making it 200,000 miles.
VELSHI: That's a good point. You can't just get any car.
ELAM: Right. It's not like you're going to get any car that's going to take you there. Honeybee not going to work so much, a list of cars here. They're all Japanese, aren't they?
QUINCY: The best bets, the models that came up really well in "Consumer Reports" surveys are Japanese. The expression is start with a good reliable car like a Honda Civic, Honda CR-V, Lexus, and Toyota models. Start out with a car that, statistically speaking, is reliable, your odds will go up with that car lasting a long time as long as you take care of it.
VELSHI: Look at your worst bets for getting to 200,000 miles, very surprising. In the top ten, I don't see an American car listed there. An American company. They are surprisingly BMWs, Jaguars on there, Mercedes Benz, Nissans, Volkswagens. What's up with that? We've been bashing these Detroit companies for years.
QUINCY: I think the American companies have kind of reached an average level. They're about average in reliability. Now, that's good because they used to be below average. It's bad because some people in Detroit want to celebrate, we're average, yea! In other words, they have to aim a little bit higher. There are also some Japanese models; there are some models from Nissan. When people say well "Consumer Reports" are bashing American cars and you love Japanese cars, there are Japanese cars on the down list as well.
ELAM: Michael Quincy from "Consumer Reports." Thanks so much.
QUINCY: Thanks, guys.
ELAM: Up next on YOUR MONEY the guy who wants to give you broad band service that is as free as the air you breathe. That's coming up when we get back.
VELSHI: All right. Do you want to get free, wireless Internet service? You could have, but last week the Federal Communications Commission dismissed a proposal to build a system that would provide free high-speed Internet service across the nation. The FCC, which usually auctions off unused frequencies, says that granting a particular company access to the necessary airways is not in the public's interest. John Muleta is the founder and CEO of that company M to Z Networks, he believes that pressure from telecom giants like Verizon, and AT&T is preventing you from getting a free, fast Internet hookup. That can't be true, John. It sounds like a great idea.
JOHN MULETA, CEO MzZ: Well, it is a great idea. But, unfortunately, the result has been that the FCC said that they need more time to think about whether America should have free broad band throughout the country. We are reviewing the decision. But fundamentally, the only people that oppose the service were the number of big existing companies who make a lot of money for charging Americans for wireless broad band.
VELSHI: Now the FCC makes a lot of money by auctioning off the waves on which the Internet sort of travels and one of their observations was that they like to auction these off. By granting you and your company access to build this network, that wasn't a fair system.
MULETA: Well, we think what's really fair is what the American consumers get out of these wireless services. In fact, Congress has said that making money is not the highest priority. What they said is make sure that Americans get the most affordable communication services out there. So, what we proposed was regardless of how the spectrum, who gets the spectrum, how it's done --
VELSHI: The spectrum is the access, the waves?
MULETA: That's the airwaves, right. And so what we said was, look. The first thing you should do is figure out whether Americans should get free wireless broad band services, just like they do over their television. Then you can decide who is the right person to show it and we said, given our backers and given the amount of monies we raised, we thought we were the right people.
We also said we would lease a spectrum and pay the American public 5 percent of our revenues so that the American people are made whole. We think this is a public asset and that it should be used -- should be used to the benefit of American people.
VELSHI: What should be free? I have super duper fast cable, you know, internet coming into my house. When you're talking about making it free for everybody, you're talking about a lesser form of free, but something that's available? If you have a laptop, computer or you've got a computer in your house, you've got some access to the internet for free?
MULETA: Right. Let's first discuss what the facts are. Over 100 million Americans today don't have access to the Internet or broadband. Those are just adults, not their children. What's the problem? It's not that there's not broad band available. It's just not affordable. Other hand, 99 percent of Americans have television free over their television. You can go to any part of America and get three to six channels for free by buying a simple reception device.
VELSHI: You're saying sort of like that, not giving the kind of Internet that perhaps you and I have free to everybody? There will be premiums to pay if you want certain options, but basic broadband Internet that allows you to surf the Web and go about your business, you should be free to everybody?
MULETA: Yeah. We said at least the broad band that's, at a minimum, six times faster than dial up that's always on, that can be found anywhere that you go throughout the United States, should be made available to all Americans. And then we said that there should be no subsidies or any sort of government participation in this. Let the private sector do it. The people that have invested in us are three of the leading venture capitalists in America, people that have invested in Google, Yahoo and My space and Tivo.
VELSHI: How are you making your money if you give away free Internet to everybody?
MULETA: The same way that people on television make money, which is to have advertising supported network to be built and made available to America. Economic studies we provided, the FCC didn't have a chance to take a look at, apparently, said this would benefit Americans in net present value in today's terms, $18 to $32 billion and every year we delay, that we don't provide Americans with free broadband would result in loss to Americans.
VELSHI: We're not going to see free Internet, I mean there are some cities that are doing this. But we're not going to see free broad band Internet in America's cities any time soon?
MULETA: We hope that the FCC will actually determine that free and family friendly broad band is the right thing to do and figure out how to get people like us, entrepreneurs; innovators get into the marketplace to provide these services. The commission, unfortunately, did not actually decide on anything on Friday. We hope is that American people wake up to this opportunity and say, hey, if Silicone Valley is out there to provide free broad band --
VELSHI: Go ahead and take it. John, we'll leave it there. We will keep in touch, interesting you said free family-friendly broad band that is an important consideration for parents who think their kids will be able to go all over the place and download inappropriate content. One of your proposals was to filter some content. We'll keep in touch with you on that. Thanks for being with us today.
MULEA: Thank you for having me.
VELSHI: John Muleta, is the CEO of M to Z.
Coming up on YOUR MONEY what you might not know about playing it smart in today's troubled housing market.
Later, the change in the way you buy your sports tickets is actually helping to drive prices higher. Stay with us you are watching YOUR MONEY.
(COMMERCIAL BREAK) WHITFIELD: Hello. I'm Fredricka Whitfield. Now in the news, parts of North Carolina, the coast there are bracing for tropical storm Gabrielle. Warnings are already in place. The Outer Banks are suspected to bear the brunt of the storms high winds, heavy rain and pounding surf.
A final farewell to opera legend Luciano Pavarotti. A lavish funeral mass was held in his hometown of Modena, Italy. Pavarotti is expected to be buried at a nearby cemetery. The tenor died Thursday of pancreatic cancer. He was 71.
Where is Steve Fossett? That is the topic of a news conference this hour in Nevada. The millionaire adventurer took off in a small plane Monday and hasn't been seen since. CNN is monitoring the news conference and will bring you any developments.
Coming up at the top of the hour, a live report from Portugal on missing Maddy McCann. Legal guests will be weighing in on that case. Now back to more of YOUR MONEY.
ELAM: The housing market had a rough year. A new report out on Thursday shows foreclosures reached a record high in the spring. As the delinquency rate goes to more than 5 percent of all loans.
VELSHI: People who are not able to pay their loans. The other numbers out earlier in week, show that pending homes sales, that is the time between when you have a contract to buy a house and you actually close on the deal took a hit in July, coming to the lowest level since the month of 9/11/2001. A sign people may be having trouble getting financing. We have excellent advice for you, except Stephanie doesn't want to share it with you.
ELAM: It's my secret.
VELSHI: Stephanie thinks that the advice is so good she doesn't want you all to know about it.
ELAM: I think people don't know. They don't realize this is a good time.
VELSHI: It's not all doom and gloom out there.
ELAM: It's not all doom and gloom.
VELSHI: Don't listen to us about it. Listen to Jack Otter; his is the deputy editor of "Best Life" Magazine. He joins us now to explain why this is not the end of the world.
JACK OTTER, DEPUTY EDITOR, "BEST LIFE:" It is not the end of the world. Absolutely not. It depends, though, whether you're a buyer or a seller. Great time to be a buyer, you have all the time in the world and the vast majority of regions, real estate prices are not going up any time soon. Take your time. Low ball a bid and eventually you'll get a nice house for less than you expected.
VELSHI: Eventually, which means you don't think, like many people don't think it's done. We don't know the bottom?
OTTER: Absolutely not. Don't try to call the bottom. I wouldn't be too clever and think if I wait another six months I'll get cheaper. If you fall in love with a house, buy it. If it goes down slightly, that's OK. AS you don't plan to flip it next month, which is a game you shouldn't be playing anyway.
ELAM: So here is the part that I really like about what you were saying here, if you own a place and you've taken a hit, would have appreciated before, it's not there now. But at the same time, if you're looking to move up, buy something a little better, fresher, and nicer.
VELSHI: You can buy someone else's lost space.
ELAM: Exactly. That will take a hit as well. You can get in. When the market does come back, look where you're sitting, prettier than where you were before, right?
OTTER: Absolutely. It is a really interesting phenomenon. We all hate losses psychologically and loss of virgin is much stronger then the hacking that we feel with a gain, but if you look at the numbers, I mean in the article, we gave the example of you own $800,000 house. You've taken a 10 percent hit. You feel like you've lost $80,000. But you had a great year; you're moving up to that $1.5 million house. Their 10 percent hit has taken the value of that house down $150,000. You just made $70,000 on the deal. It works at all price levels. If you have $200,000 house, and you are moving up to a $300,000 house, you're down 20, but that guy is down 30 so you made 10,000.
VELSHI: I mean in the perfect world you could buy the second house, wait for a year or whatever and sell your old house. But that's not the world we live in.
OTTER: Don't have the money to do it.
VELSHI: If you're trying to sell a house in Detroit, which is one of the worst markets right now, and buy in Seattle, which is a market that's been going up, you're in trouble. If you're buying and selling in Detroit or buying and selling in Seattle or New York, it could be a wash and, in your case, what you're talking about, you could actually gain?
OTTER: Exactly. One thing that we recommend is get that deal to sell your house first.
OTTER: For two reasons. One, you go to buy the second house in this market; you're going to have lots of money for a down payment. You're going to get good financing. In a nice position to negotiate with the bank as opposed to trying to play both at the same time. The worst case scenario, the other shoe drops and you end up putting money down for a new house, that value drops and you still haven't sold yours. You don't want to be in that place. ELAM: What about if you're looking to buy from a person, a family or from somebody building a whole bunch of homes? How does that play out?
OTTER: This is very interesting.
VELSHI: New versus used.
OTTER: New versus used.
ELAM: It is better for you no matter what, but, yeah.
OTTER: Well here is the key a homeowner who has his house on the market in most cases does not have to sell. Worst case scenario, is they remain living in their house. A home builder has 40,000, 10,000 new houses to move. They've got bills to pay, to pay back lenders. They've got employees. They need to move houses. You're in a great position to negotiate. Not only will they maybe cut the price. You know what? I do want that granite counter top, and the subzero and some landscaping too. They've got a better deal on counter tops than you're ever going to get and they'll stick that stuff in if it will move the house. So the really good deal is where the subdivisions are built and not selling, good deals.
VELSHI: We'll talk about this in 15 years, how they bought their house in 2007 and what a killing they made on it.
VELSHI: Take that advice and read the article. Jack good to see you.
OTTER: Nice to see you.
VELSHI: Jack Otter is deputy editor of "Best Life."
ELAM: It makes people live better lives.
VELSHI: Exactly. Not get you the deal that you wanted.
ELAM: Oh, it may. It may.
VELSHI: All right. Coming up after the break, why you're spending so much on tickets to see the sports you love.
And later on, a clothing brand gets a new life with a little help from vintage stores. Stay with us.
VELSHI: Well as a sports fan, this is the most wonderful time of the year. Football season kicks off this weekend, baseball playoffs are around the corner. My mind went to tickets. It is wonderful, but it is an expensive time of year.
ELAM: It is a wonderful and expensive time of year that is exactly a good way to put it. Because of getting tickets for a family of four can be astronomical.
VELSHI: Of course I don't have to take a family of four. That's somebody else's problem.
ELAM: Yeah, me either. The Internet has made it easier then ever, of course to get tickets to see your favorite team plan, but the price tag is more expensive than ever. Of course, most people know that already.
VELSHI: Most people have a theory as to why that is already. But let's get down to the bottom of it. We are bringing in David Carter; he is the executive director of the University of Southern California Sports Business Institute. Give to us in one sentence what is it, it is salaries, isn't it?
DAVID CARTER, EXECUTOR DIRECTOR, UNIVERSITY OF SOUTHERN CALIFORNIA SPORTS BUSINESS INSTITUTE: No. It's not salaries; it is supply and demand, as it usually is in business.
VELSHI: Which means if people were really as fed up as we seem they think they are, by doing this segment, they would not buy the tickets, not go to the games?
CARTER: You have to think the price of all entertainment has gone up. Anybody that tried to take their family to a theme park this summer or took in dinner and a movie, you saw the increases. But I think in sports what tends to happen is we hear about these escalating prices, but it typically boils down to the fact that it is Corporate America, writing off these tickets for business developments, for instance, that are not price sensitive. This group ends up entertaining at the ballpark, and so they are willing to pay more. It's that family of four, that mythical family of four that is still looking for affordable tickets. They're still very cost conscious, but not so much the corporate account.
ELAM: Are you saying families aren't going to the games anymore? Do you think maybe it is because they get priced out?
CARTER: I don't know if they've been priced out in this era of Corporate America dominating sports, you still see teams bending over backwards to let families know they do have affordable tickets. Advertisers and sponsors want to know that that family is there.
VELSHI: I would have thought it's so much easier to buy a ticket now online with Stub Hub or Ebay, to the various sites out there that sell tickets. I would have thought that brought the price down and it would have made it a more efficient market.
CARTER: You know I totally agree with you, it has made it a more efficient market. I suppose you could argue that many tickets out there were under priced. Before ticketing came online, you didn't have a sophisticated market for the exchange of tickets. Now that that's occurred, you're really seeing the true value of a ticket. What you're experiencing is that that old nose bleed ticket isn't really changing that much in price. Those highly coveted tickets maybe in baseball, between the dugouts, behind home plate that the corporations are buying; those are going up because that's really where these corporations see value.
Maybe the way to really look at it is that face value on a ticket, the price that you see originally, that's really the starting price. After that, the market will dictate what that ticket is truly worth.
VELSHI: David I just read on the screen next to you that major league baseball has some deal with Stub Hub to try to somehow work around scalpers and get a more efficient system. Is that the way things are going, that you're going to find that the actual teams of managing this?
CARTER: The teams and even the leagues have to figure out really what is it that they're good at? Are they strong at technology? Do they want to be in the business of content like that or do they want to outsource that? All the teams seem to have wrestled with that a little bit. Major league baseball and others see real value there, pick up demographic information, and learn more about their potential clients and they can control the process.
So, I think what you're going to see over time, is that leagues are going to continue to play much more of a role in trying to organize this. And it still boils down to what is a ticket. Sounds kind of crazy to say that. But is a ticket a product or a team owned license that they grant to somebody that that individual then uses on the terms that the team provides?
VELSHI: David, good to talk to you. Thanks for joining us on this. I have done that. There have been key games that I can't go to. Can I say this on TV? I might get in trouble. I sold the tickets and it paid for the rest of my season.
ELAM: I think a lot of people do and they want the freedom to do it.
VELSHI: Supply and demand might be the case. But if it's corporations, what it does mean is that families are still getting priced out of it. If you watch sports at home, on cable or on video on demand or on satellite and you pay for those events, it is getting hard for families to go.
ELAM: Even if it is father/son, mother/daughter, however that works out.
ELAM: Coming up on YOUR MONEY start thinking about your holiday shopping earlier. The latest toy recalls from Mattel and also some of the weeks other top stories.
Plus, the rebirth of the cool. See how fashion designer Diane Von Funstenberg gave her brand new life by bringing the past into the present. Stay with us.
(COMMERCIAL BREAK) VELSHI: If you missed a few days of work, you may have missed the news, that Mattel has issued its third major recall of the summer. Jennifer Westhoven is on that beat and many others. This is unbelievable.
JENNIFER WESTHOVEN, CNN CORRESPONDENT: Scary news.
VELSHI: I don't know how to fathom this.
WESTHOVEN: We got a lot of upset parents, having to take away their kids' favorite toys. Which toy, which model? Do they have to go through this? This is Mattel's third major recall this summer of these made in China toys. Because many of them are coated in lead paint. So you can expect more of this news as well, where more parents will have to be rummaging through the toy chests, figuring out what's wrong, that is according to the Consumer Product Safety Commission that says more recalls are probably on the way. That's going to have major implications for our holiday shopping season.
On top of that, Mattel itself may be in legal hot water here. By law, if the company finds there's a potential hazard, it is supposed to tell the Safety Commission within 24 hours. Mattel waited months while it conducted its own internal investigation, before it alerted the agency which led to the huge recalls in August.
VELSHI: We're up to 20 million toys now with Mattel.
WESTHOVEN: This wasn't the first time either that this happened. Now the "Wall Street Journal" is reporting this the CEO openly said to the "Wall Street Journal," we report our own timetable regardless of the law. The company says it wants to be able to evaluate hazards internally before alerting what it called outsiders. The CPSB says it hopes to investigate the company. This is a very small agency compared to a very big toy industry.
VELSHI: These recalls are voluntary, which is also -- I mean, we're not only seeing a weakness in these products coming from China, but in the way we enforce and check safety.
ELAM: And it is something that obviously is going to have to get addressed. When you think about what this could mean for business, overall Mattel is looking at their dollars. Holiday shopping season, we're getting close to the fourth quarter as scary as that sounds, the biggest time for them to make money.
WESTHOVEN: Yeah. But this agency has no teeth. No punitive damages. They have some, but they're really nominal.
VELSHI: Kind of like the story a few years ago with corporate scandals and then people were saying why doesn't the SEC do more? I think we're finding this out. Triple whammy. You are taking toys away from kids; you don't know what you're going to buy. New toys will not be here in time. We don't have enforcement. You're going to guess as to what's going to be good or not.
ELAM: I have a few friends who are about to have babies and I was looking at gifts for them. So much now says organic cotton toys. People pushing this angle because so many people are afraid of where their toys are coming from. Most of the toys do come from out of China.
VELSHI: Speaking about long time frames by the way, you may have noticed if you live in New York or you have been reading about it, New York City's semi annual fashion week kicked off this week. Designers from all over the world are showcasing their collections for spring of 2008. One headliner is a name you may have heard before Diane Von Furstenberg. After a short marriage to a German prince in her early 20s, Diane Von Furstenberg built one of the most prominent brands of the 1970s, and then lost control of her company. But has since rebuilt her brand over the past eight years.
(BEGIN VIDEO CLIP)
DIANE VON FURSTENBERG, DESIGNER: I started in the '70s. I was a very, very young girl. I started and very quickly I lived this American dream that every woman in America wore my clothes. Then it grew so fast, this and that. I was young. I sold my company, basically, and it was in other people's hands. It happens very much, very often. You know, the brand lost its spirit. The design wasn't that, the distribution was wrong.
The brand was integrated and disappeared. Eight years ago, I decided to start again. The thing that made we want to do that that encouraged me to do that is the fact that I saw young, hip girls were buying the old dresses in vintage shops.
VELSHI (voice over): Your dresses?
VON FURSTENBERG: My dresses. And that kind of, you know, inspired me to go back.
VELSHI: Tell me a little bit about your fascinating story. I mean, it's a page turner. Early on, you did what so many people want to do. You married a prince. But it sounds like that was a turning point for you about deciding that you wanted a career.
VON FURSTENBERG: Well, I mean, I always joked like fairy tales, which, by the way, I don't really like fairy tales. That fairy tales end with a girl marrying the prince. In my case, you know, I married the prince and then my fairy tale started. My life has been really full. I was very lucky. And I worked really hard. I am very curious. So, I'm always, you know, open. I'm always looking. I always put things out there in the universe. And, therefore, I get it back, you know. It's been a very, very colorful life, just like the clothes.
VELSHI: When people say your name, the word association is with the wrap dress.
VON FURSTENBERG: You know, no matter what I do, I will always be known for that. That has been a very big part of who I am. But it's really the whole concept of easy clothes, flattering clothes, clothes that fit with a woman that you can travel with, you can live with, that are really elegant, and yet allows you to be you. VELSHI: As president of the council of fashion designers of America, you've also taken a position on this whole debate about whether models are too skinny.
VON FURSTENBERG: I think that there was this whole thing about, you know anorexia and was the fashion industry guilty for that. So, we addressed it. And I think that we are not responsible for that. But we should all be very aware that maybe we could be responsible for that. So, I think that we should encourage health as a beauty.
If I have any role in fashion, it's really to celebrate the woman. To celebrate the modern woman, the young woman on the go. The young woman in the driving seat, the woman who is active, the woman who feels she's part of today.
(END VIDEO CLIP)
VELSHI: Great, great story. Diane Von Furstenberg.
WESTHOVEN: Her clothes, when I put them on, I look great. I know why she's so successful. It's flattering.
ELAM: The woman who is active, you're so comfortable in them, but can look professional. I get it.
VELSHI: She interesting describes herself when she talks about who she is building and designing these dresses for. She is that driven, successful woman. So fantastic story.
We are going to take a break now. When we come back -- yeah, I know that this is the part of the show that Stephanie and Jennifer have been waiting for. I'm going to introduce you to the tallest dog in the world. You do not want to miss it. Seriously, the tallest dog in the world. I'll tell you what that has to do with YOUR MONEY when we come back.
ELAM: When I was a kid if I was having a bad day, I could go outside and Lady, Sugar and Bernie would make me feel better, my dogs
VELSHI: In much the same way that some people find music very relaxing, others find their dogs very relaxing. We have the story of one retired musician who is doing just that.
SANDY HALL: You good boy. Yeah, you good boy.
VELSHI (voice over): Meet Gibson, he is the tallest dog in the world that is according to the Guinness World Records. His owner, Sandy Hall, named him after her treasured Gibson guitar, a relic from 30 years in the music business. Sandy left the San Francisco music scene some nine years ago to pursue another dream, breeding great Danes.
HALL: It is a very nice way to spend your life; I wish I could have done it earlier.
VELSHI: At 59 Sandy makes living breeding dogs, but she is keeping Gibson for herself.
HALL: Hello, everybody.
UNIDENTIFIED FEMALE: Hello.
HALL: This is Gibson.
VELSHI: Size isn't the only thing that makes this dog unique. Gibson is also a therapy dog. He visits nursing homes and schools in Grass Valley, California. He provides comfort and entertainment to enthusiastic crowds.
HALL: He makes people happy. Your dog makes people happy and makes people smile. I love you. Making people happy, it's just a great gift. I wish I could be almost more like him in so many ways. I don't have the same temperament.
ELAM: Seriously, Great Danes, they're huge, but are such great dogs.
VELSHI: I've seen people in Manhattan walking their Great Danes and I just feel like saying, where do you live that you can have a Great Dane in Manhattan?
Let's go from something very big like that dog to something very small. The iPod and iPhone.
WESTHOVEN: They get smaller and smaller.
VELSHI: A big announcement from Apple this week. I feel like a bit of a sucker. Because we get drawn into being Apple's marketing public --
WESTHOVEN: I don't think you should feel like a sucker. People want these things, 100 million of them. They're super popular.
ELAM: They're selling. It's more than just phenomenon. They're also well liked by people. They love them, get their music. On the subway here in New York City, try to get into one cab and not see one person with --
VELSHI: OK. I won't feel bad about that. You know who should feel bad? Two months ago, we were covering all those people standing in line to get their iPhone?
ELAM: Yeah. That hurts.
VELSHI: They dropped the price of the iPhone this week as well by $200, so the $600 iPhone, $400 now. WESTHOVEN: This is a big deal too. First of all, iPhone is getting cheaper. The big deal here is that Apple is essentially giving up a lot of potential profits here and Wall Street is thinking, hey, is this a fire sale? What's going on? Stock dropped on its news. Wall Street a little upset. And then people who feel like suckers. They stood in line, paid top dollar. Now their friends are going ...
VELSHI: Yeah. I was reading some figure that said some 70 percent of kids from 13 to 17 have cell phones. This is becoming increasingly a concern for parents of kids who run up bills that are too high. AT&T has come out with something this week that is just gratuitous. I'm holding this phone to make my point called Smart Limits. Now most of the big phone companies have this but its very easy to program. Go on the Web its $5 a month in addition to your normal service and you can program limits on --
VELSHI: Everything. Texting, who calls you.
WESTHOVEN: This is a teenager's nightmare. Your mom can now say, I don't like that boy.
VELSHI: Right. As long as you've got that boy's number, the boy is going to get creative, get another phone or use somebody else's number.
Your mom can even say your phone isn't getting used between 10:00 p.m. and 7:00 a.m. or some schools ...
WESTHOVEN: I'm over at so and so's house.
ELAM: Drop it off, leave your phone there.
VELSHI: All right guys. Thank you for joining us this week.
ELAM: I had fun. Thank you.
VELSHI: Thank you for joining us for this edition of YOUR MONEY.
ELAM: Thank you for joining us for this edition of YOUR MONEY, I'm Stephanie Elam. Thanks for being here with Ali Velshi and Jennifer Westhoven.
VELSHI: We'll be back here next week Saturday at 1:00 and Sunday at 3:00. See you then.
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