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YOUR MONEY

Where You Live Could Be Helping or Hurting Your Job Prospects; Things Last-Minute Tax Filers Should Know; Will Chrysler Survive?

Aired April 11, 2009 - 13:00   ET

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


ALI VELSHI, CNN HOST: Welcome to YOUR MONEY. I'm Ali Velshi.

CHRISTINE ROMANS, CNN HOST: And I'm Christine Romans.

In the next half hour, you're going to find out if where you live is helping or hurting your job prospects.

VELSHI: Plus we have three vital things that all you last-minute tax filers, take a guess whether I am one of them or not.

ROMANS: I bet you are.

VELSHI: Must hear before you file.

ROMANS: We were here last year saying the same thing.

But first, some stories that matter to your money today. General Motors has begun what is being called intense and earnest preparations for bankruptcy. A June 1st restructuring deadline looms set by President Obama's administration, the company still hopes to avoid bankruptcy by reaching deals with its union and its creditors, Ali has a very revealing look at Detroit's future with Chrysler's President Jim Press.

VELSHI: Jim Press was over at Toyota for about two decades. But in America, one of the best auto executives in the country now trying to turn Chrysler around and we'll hear what he has got to say about the future of that country.

There is hope for those of you recently forced out of your job and back into the job market. A new survey found that half of all full-time workers laid off in the last three months have already found a new job and most of those being permanent positions and that's want a bit of news that we expect to hear in this economy.

ROMANS: But you know what it was a week of mixed signals. Another survey, a survey of the country's CEOs found we still have a tough road ahead, at least two-thirds see a decline in sales, in spending and employment at their companies over the next six months.

VELSHI: We've got to talk about what those mixed signals are and whether they're actually relevant to the economy and where it's going. There are these little positive indicators scattered throughout the economy. The stock market, we've taken a look at this. This seems to be bouncing back a bit. We might be headed for a fourth or fifth week of gains in the stock market. So that's something to be thinking about with respect to your own money.

ROMANS: But you might not be feeling all that positive in general. If you're worried about your job, if you are still reading the headlines and concerned about where we are. Diane Swonk is chief economist at Mesirow Financial. Peter Morici is a professor with the University of Maryland School of Business.

Peter, let me start with you. What kind of mixed signals are we getting? One great comment I heard this week from an economist was this, the economy has stopped detonating, don't mistake that for a recovery. Is that fair?

PETER MORICI, PROFESSOR, UNIVERSITY OF MARYLAND SCHOOL OF BUSINESS: Absolutely, the economy continues to shrink. Unemployment continues to rise. Layoffs are at record levels still. Yet, we start to see some signs of life, balancing the stock market and durable goods orders up, but most important the housing market is starting to show some signs of life. All these efforts to make mortgage money cheap is starting to grip.

VELSHI: And Diane, let's pick up on that. We really have seen a remarkable drop in the cost of a 30-year fixed mortgage for people who can put 20 percent down. Down in to the 4's, we've heard people, I spoke to somebody today who said they're closing on 4.6. That has resulted in people buying homes and an up tick in home sales yet not an up tick in prices because I guess people are buying these cheap homes or foreclosed homes.

DIANE SWONK, CHIEF ECONOMIST, MESIROW FINANCIAL: Right. We're seeing a lot of first -- that's the -- those are the chutes that Bernanke talks about coming out, are sort of crocuses of the spring. We are starting to see people, the prices dropped to a clearing price and people are more willing to buy, especially first-time buyers in a home that's out of foreclosure.

They're getting an extra discount compared to the home next store to it and it's starting to clear the market, you have to get rid of those inventories of these banks at homes and 45 percent of the sales that we saw the increase on in existing sales in the month of February were due to foreclosures.

So, you are seeing people get out there and get the deals now and that's important because everyone is sort of saying housing prices, well the housing market will never come back. We're now getting to the point where things are cheap enough, affordability is high enough if you can qualify for a mortgage, and you can buy.

ROMANS: And that is something we've seen at Wells Fargo, the company remarkably came out this week and said, look, it's not our time to report our quarterly earnings, but we will tell you it's going to be a record and we've had a record quarter for refinancing and 450,000 people they said they helped with refinancing or a new mortgage.

Also, they're going to be paying back taxpayers some $372 million from the money they had to borrow from the bailout and they said they lent nine times more than they borrowed from the bailout. Diane is this, I want to ask both of you, let me start with Diane is this a sign that the bailout is working? That the banks are coming back to life?

SWONK: Well, Wells Fargo was always in better shape anyway. So they started out on better footing, but there is something going on out there. Community banks if you can lend right now and you don't have those toxic assets and the legacy assets that had been pulling banks down and holding them back from lending you are getting better spreads than ever. This is an incredible time if you have a strong balance sheet to go out and lend, you can make a lot of money at it and Wells Fargo's proved that.

VELSHI: Peter, let's talk about the little things around the edges that we're seeing. There are some indicators that I think Christine and I have joked, we would laugh a year ago when someone started pointing to the little indicators that are positive in the market. What is our viewer meant to think right now? Are we just becoming more adaptable with the same bad news and we are thinking about the future or is there some sense of a turn?

MORICI: There is a sense that we're a least bottoming out. The question is whether we'll get off the bottom at that point. You know today the results of Wells Fargo just revealed something very simple. If banks have a three-point spread instead of a two-point spread because the Federal Reserve is making money very cheap. They're cost of making loans has gone down, they are going to do better and the stock market's going to do better generally.

Also if loans are cheap where people can refinance then they'll have more disposable income again. All these things, they start to come together a little bit at a time and we get to a point when we're at a bottom and then we can start to recover. So, yes, we are getting to a trough. That's a good thing and people should start to be optimistic.

Also, if you feel good about your job, this is a great time to buy a house. Also if you need a car you can spend money for the heck of it and these are good times to buy a car. In fact, it's a good time to buy an American car. So those are things to consider. The pieces are coming together.

ROMANS: Peter, it wasn't long ago when you were on the program telling us that you thought it wasn't a recession it was a depression, that we had structural problems. Are you still concerned about that?

MORICI: Yes, I am. I'm concerned about what happens when the stimulus money runs out. We are going to get a lift from the stimulus. You can't dump $800 billion on the economy and not get a lift and cut interest rates to zero and not get a lift. The question is what happens when the stimulus money is gone two years from now and how much growth do we get, how much income growth do we get? We need to use this period as a period of grace to fix things.

VELSHI: OK, Diane lets just pick up on that. The things that make people feel wealthier historically in this society is if their investments, or IRA and their 401(k) goes up because the stock market is going up, or their wage is going up which typically means unemployment is low or the value of their homes is going up.

Those are really the key factors to make people feel wealthy and spend again, so if you want to fix what Peter suggests is a structural problem in another words have consumers pick up the slack once the stimulus money runs out, are we on track for that to happen?

SWONK: I think Peter makes a very good point about the structural, I'm not quite as negative as he is, but I think it's a really important issue that as the economy recovers we're still going to have constraints in the U.S. consumer. Some of that is healthy, I think we're going to see investment come back much more robustly, than we see consumer spending come back.

And the share of spending in the U.S. economy as the economy recovers is going shrink relative to what we've seen. In some ways we've killed Santa Claus out there by not allowing credit to be so free flowing. It's healthy for us, but it's like being on a diet and exercising and we have to do the right things to get ourselves healthier rather than just have a heart attack.

ROMANS: I always say that about the diet, and credit the situation like Americans. It's easy to say, oh you just have to lose weight by eating less, but nobody can really do it. And now here we are the economy ...

VELSHI: We actually have to do it.

ROMANS: It's easy to say that, but it's harder to do in practice.

SWONK: I'm a runner getting older. My joints are starting to hurt, too.

MORICI: If we can do something about the trade deficit, just shrink it.

ROMANS: But it came down a lot this week.

MORICI: That's because of the recession and there weren't many oil imports. It is going to go back up. That was more product of the recession. As consumption goes up, that is going to go up.

SWONK: I agree with that.

MORICI: If we can work down the structural deficit that would make up for the lake of consumption.

VELSHI: OK, so this is going to be an interesting discussion for us to have going forward and that is, OK, so maybe there's a fix to this economy in the short term, but there are a number of our esteemed guests who share this view that we are not solving long term problems.

ROMANS: Use it as a grace period. Use the crisis as grace period. All right. Diane Swonk, Mesirow Financial. Peter Morici, University of Maryland School of Business. Thanks guys.

VELSHI: Great conversation with them always. Well, it's down to the wire for the American auto industry. We're taking you to the top to see if Chrysler will survive.

(COMMERCIAL BREAK)

ROMANS: Well, Detroit has been put on notice, the clock is ticking. GM and Chrysler must show the Obama administration they can be viable companies or they face bankruptcy.

VELSHI: Now in Chrysler's case, its very existence is at stake. I headed down to the auto show here in New York to speak with Jim Press; he is the vice chairman and president of Chrysler.

(BEGIN VIDEOTAPE)

VELSHI (voice over): Necessity is the mother invention; you have really been put into a situation where you are going to have to find something to help get Chrysler out of the mess that it's in. What is that something? Many of us don't understand why Fiat would have any relationship to the future success of Chrysler which is in such dire straits right now.

JIM PRESS, VICE CHAIRMAN, CHRYSLER: Well you know really from the inside out it doesn't look like that way. The company is 20 months old. You can't really judge us by what you see because the stuff we're doing now is the future. Like this car right here. It shows what we can do. We've got a great portfolio of products.

We're jam-packed with eight new products in the next year and a half that are coming out in the SUVs and the segments we really do well in. Fiat comes and brings us the small cars, the great fuel technology, the great efficiency, and it matches us like hand and glove, it gives a full portfolio of products for our customer base.

VELSHI: You have to have a running start, does Fiat help in so far it's not a brand well known to Americans, they know the name, but they have no experience with the cars. Don't you need something faster and bigger? I mean faster and bigger in terms of a solution and not a car.

PRESS: Absolutely. You know actually they give us a jump-start because they've got great engine technology and in Europe they're the best co2 fleet of all of the manufactures and they have the greatest of new technology and that's available without having to develop it. We can bring it over and build it in our plants here.

VELSHI: What's likely to disappear as you have to deal with the fact that it might have to be a tighter, smaller company?

PRESS: Well, we're not going to be building the same type of car for different brands. It will be one SUV, and it will not be a different one for Dodge brand or a different one for the Chrysler, we are going to have one SUV, it will be a Jeep. Our trucks are going to be Dodges. We're going to try to focus on fewer vehicles and make them right and really raise the level of quality and craftsmanship to something that American manufacturers have never seen before and we're capable of doing that. The trucks show we can and this is proof as well.

VELSHI: Jim we have a number of people who follow your company very closely who say that your chances of having to go into bankruptcy are greater than 50/50. What's your candid evaluation of that?

PRESS: You know I can't add odds to this because there are so many unknowns and so many balls in the air that you can't control. All I can say is we all understand all of the constituents understand what the advantages of not going into bankruptcy far outweigh the advantages of being in bankruptcy and we're working hard with this deadline at the end of month to achieve an end result and an alliance and a restructured company that will prevent that.

VELSHI: But your experience tells you that it would be wise to pursue the options that are out there. So you are obviously actively coming up with a design for what bankruptcy would look like.

PRESS: Well you have to protect yourself and be responsible with the assets of the company and our equity holders and to make sure that if the unforeseen, unanticipated, undesirable end result is bankruptcy, then we have to be able to contend with that and manage through it as quickly as we can and still emerge in a manner that we can keep this company running.

(END VIDEOTAPE)

ROMANS: I love that, Ali, focus fewer vehicles and make it right. This is an industry that has to get rid of some of the nameplates. They can't have five different kinds of trucks under one certain ...

VELSHI: That's a big deal the idea that if you buy an SUV from Chrysler it will be a Jeep. If you buy a pickup truck from Chrysler it will be a Dodge. Let's bring in Peter Valdes-Dapena to the conversation he covers the auto industry for CNNMONEY.com.

Peter first thing, Jim Press kept on saying to me this is a twenty month old-company. That is not how most of the world sees it.

PETER VALDES-DAPENA, WRITER, CNNMONEY.COM: No, it's a twenty month old company that is still dragging a very old company with it. They're starting out not at ground level, but somewhere below ground level because let's face it, consumers are still selling -- dealers are still selling the old Chrysler products and consumers still remember the old Chrysler products and so that's a challenge and it's not a 20-month-old company, it's an older company under new management and they need some time which they haven't got much of to fix what's wrong.

ROMANS: There is a great deal of American loyalty to the Chrysler name. That is another thing too; it's not just a negative. They also have the name recognition of Chrysler. VELSHI: But, one of the problems they've had and you've discussed is the perception that Ford and GM have been saddled with in the past and less so now is this quality issue now. Jim Press told me that their warranty data indicates that their quality has improved substantially. Do you agree with that?

VALDES-DAPENA: According to their warranty data, they've told me the same thing. They said they've had a 30 percent improvement in warranty claims versus a 2.4 percent improvement in most years. They've run into a guy named Doug Bets who used to work at Toyota and use to work at Nissan and has success at Nissan in particular in improving their quality and he's made a lot of changes and you can see them in some of the newer vehicles.

What he is saying look we've had huge improvements they're not showing up in the surveys like "Consumer Reports" yet because they're talking to people who have had cars for longer than that, but they're saying that we're going to start seeing major improvements in quality going forward.

I tend to believe them when I look at the interior some of the more recent cars, the Ram truck and the Challenger and this new Grand Cherokee that they are showing, you can see some improvements in quality even just looking at them. So I'm willing to cut them a little slack there and think yeah.

ROMANS: Peter, let me ask you quickly, this new CNN research opinion poll that shows frankly that most people think these companies should be allowed to go bankrupt. Should the government let automobile companies go bankrupt? 76 percent say yes, 22 percent say no. What's the likelihood that one or both of these companies ends up restructuring in bankruptcy and is that necessarily a bad thing?

VALDES-DAPENA: Well, it's not a good thing. I mean, clearly, there are enormous risks when you talk about the auto industry about going into bankruptcy because they're very complex companies, very interrelated with a lot of other industries. They say that every job in an auto company you take that job away and you take away four jobs in other related industries as well. This is risky stuff we're dealing with.

In Chrysler's case it's pretty straightforward. The government is going to give them a $6 billion loan if they can make a deal with Fiat which they're working on and which they seem to be confident they can do. So that's pretty clear cut. The case with GM is less clear. They have 60 days to work through restructuring and if they don't the government say they may have to use the tools of bankruptcy to hasten that restructuring and get everybody onboard.

ROMANS: All right. Peter Valdes-Dapena, thank you so much, as always, love to have you on the program.

VELSHI: You know something that Peter, you and me share is that we all like cars and we are all very interested in automobiles. You and I are going to have to learn a little bit more about this whole Fiat situation. I'm unconvinced that Fiat, will somehow help Chrysler survive, but Chrysler believes it.

ROMANS: I'm still trying to get over the fact that it's a 20- month-old company. I mean I don't think of Chrysler as a 20-month old company.

VELSHI: That's a bit of Wall Street speak. For the rest of us it's been around for a long time.

Listen we're talking about unemployment in the auto industry. Unemployment rates vary widely from state to state. We're going to show you which areas of the country are hiring right now.

(COMMERCIAL BREAK)

VELSHI: If you're confused about where we are in this economy, you're not alone. There are as we've been talking about some mixed signals about where this economy is going, but this one is not a mixed signal. Unemployment in this country is 8.5 percent. That's the national rate, but you know what? It doesn't matter to you what the national rate is what matters to you is what's going on where you are so let's take a look at the United States of America and the unemployment picture.

Those areas that for gray are states that have the unemployment rate that is similar to the national unemployment rate of 8.5 percent. Those areas in green have a much lower rate than the national rate and less than 6 percent unemployment, those areas in yellow are higher than the national unemployment rate by a bit, in the 9 to 10 percent range and those areas in red are the biggest problem of all.

Let's start by taking a look at some of those places. You'll notice Michigan is the highest in the country at 12 percent why because Michigan is the heart of the auto industry in the United States and that has been so hard hit. In the northeast, another place that has a lot of high unemployment is Rhode Island. That is a state that's got higher than 11 percent unemployment, but just north of that in New Hampshire, unusually low, 5.3 percent.

Let's take a look down at other parts of the country. North Carolina, 10.7 percent, a lot of manufacturing was done in North Carolina, particularly furniture manufacturing, those jobs have been lost, South Carolina, 11 percent unemployment.

Look at all these states though in the middle. They're higher than the national average all of the way down to Florida. Alabama tends to be a standout; it has a lot of auto manufacturing but not U.S. companies, non-unionized manufacturing and they tolt (ph) that as one of their reasons why unemployment is a little lower there.

Down through the mountain states, Texas is actually just a little bit lower than the national average and it didn't make it into the green, but really the swathe of green state has been the area of success in America for the last year and a half. Fewer job losses here, greater diversification to the economy as Christine will point out. The lowest unemployment rate in the country continues to be Wyoming at 3.9 percent, but move it over to the left coast and take a look at this, California, one of the highest unemployment rates in the country, 10.5 percent. A lot of issues in California. That is a microcosm for everything that could possibly be going wrong in an economy. Nevada has an unemployment rate of 10.1 percent and Oregon has an unemployment rate of 10.8 percent.

So take a look at that across the country, that's how the picture looks depending on where you are, now 8.5 percent is really only relevant as a national average, but like house prices or anything else, what matters is what's happening in your neighborhood.

ROMANS: This is where economics and law enforcement and economics and public policy all start to come together because when you start to have double digit unemployment rates in certain places you need to look at the social fabric of infrastructure that starts to deteriorate, it's just not good for people when these sorts of things start to happen.

One interesting thing Ali, the unemployment rate for people with a college degree is 4.3 percent. Consider that. If you have a college degree you are largely insulated. It doesn't feel good if you just lost your job with a college degree, but 4.3 percent. Compare that with some of those numbers.

Also, attention out of work college grads, checking in with your Alma Mater could pay off.

(BEGIN VIDEOTAPE)

ROMANS (voice over): Are you an out of work tar heel? The University of North Carolina wants to give you a $100 discount on cap and test prep courses. The University of Michigan offers grads discounts on health insurance and prescriptions. At the University of Chicago, the law school's free day long career counseling event sold out in just 24 hours and in St. John's University of New York former students down on their luck who have lost jobs within the last six months pay half price for a graduate degree.

KATHLEEN DAVIS, DIR. OF GRADUATE ADMISSION, ST. JOHN'S UNIVERSITY: St. John's is built on the mission where we wish to assist those and their focus on assisting those who are in need. At this point in time our alumni are in need and that is why that program was put into place.

ROMANS: MyWorkster is a Web site that helps alums network with others who also graduated from their university. Registration has jumped 1500 percent over the past few months.

DOUG BARUCHIN, DIR. OF OPERATIONS, MYWORKSTER: It makes it much easier to talk to somebody that you actually worked with in the past saying, hey; I'm out of a job. I need help. I'm coming back to my university. What can you do for me?

ROMANS: So many people are asking Duke University what you can do for me. This recent life after banking event sold out.

ARUNA NALSINGH: We signed up with a minimum number of people and it ended up being a huge waiting list. So now we've actually been trying, we've told everybody sold out and go on standby.

ROMANS: Alums either looking for a job or just brushing up connections.

JORGE GUIGOU, DUKE UNIVERSITY ALUMNUS: You hope that there will be another day and experiences and it's always a good opportunity to try and meet more people.

(END VIDEOTAPE)

ROMANS: So call your alumni office. There are a lot of different programs out there from free membership to your alumni association to cash assistance or discounted tuition if you go back to for an advanced degree. But you have to act soon. Some of these offers are limited, and I want to reinforce this important note. College graduates still have a much lower unemployment rate than the nation as a whole. 4.3 percent versus that 8.5 percent, Ali. It was an important distinction to make.

VELSHI: It gets clearer when you realize those coming out with just a high school education, coming out of high school, teenagers have the highest unemployment rate in the country and double digits, in fact about 20 percent so a big deal.

Stay with us. We're coming right back with more money and news that you can use to help you get through this recession.

(COMMERCIAL BREAK)

MELISSA LONG, CNN ANCHOR: Several days now we've been telling you the story of the American captain held captive by pirates off the coast of Somalia. Also we've been telling you about the ship which was packed with humanitarian aid and cargo that was original bound for Mombasa, Kenya, well it is now 8:30 in the evening in Kenya and we have live pictures and some tape to show of that vessel pulling into port.

The American crew was able to regain control of the vessel after it was initially hijacked and with an 18-person armed security detail on board has now arrived there in Mombasa, Kenya. The captain himself, he is not onboard. He is still being held by the pirates and, of course, that continues to be an ongoing intense, international predicament for him. It's a "USS-Flagged Maersk Alabama" arriving here at the port in Mombasa, Kenya. Again it was carrying humanitarian aid and it was seized by pirates earlier in the week.

CNN's Stan Grant is joining us live from the port of Mombasa, Kenya, with the very latest and I hope you can just tell us what it's like there. I'm sure there are a lot of happy people, happy crew members to be able to get off that ship after several very treacherous days at sea.

STAN GRANT, CNN UNITED ARAB EMIRATES CORRESPONDENT: Melissa.

LONG: Stan, are you able to hear me?

GRANT: OK. Thanks.

LONG: Not sure if Stan is able to hear us yet, but again, we want to tell you that the U.S. cargo ship arriving there at the Kenya Port in Mombasa. It's about 8:30 in the evening. Stan Grant is there and he was talking to us just a couple of hours ago telling us that he was waiting for the ship to pull in and it's the American crew that was able to regain control of that vessel.

The ship's owners out of Norfolk, Virginia, have not actually said how they were able to do so, but again they were able to regain control of the vessel arriving there in Mombasa right now with an 18- person armed security detail onboard to help guide them in.

Stan Grant, I believe, now able to establish connection with us. Stan, what is it like there?

My apologies, I guess he's still not there, but we can see him. We're just trying to establish the audio connections right now. Phillips, that's the captain still being held by four gunmen in the covered fiberglass lifeboat far out to sea. Captain Richard Phillips, we've been following his story for you for several days.

Coming up at the top of the hour we'll be telling you more about his family. We have reporters that have been speaking with his family members and neighbors and friends. Also speaking with people who he's trained with.

Now Stan Grant, I believe, able to establish a connection with us and Stan, what is it like there at the port?

GRANT: This is the boat that has been at the center of this -- I'm here.

LONG: All right. Obviously, we're having some audio connection difficulties, but let me just tell you once again. You are watching live pictures right now from the Kenya Port, Mombasa, Kenya, and these are live pictures which, of course, will mingle with the story we'll bring you at the top of the hour as we learn more about the American crew members there on land for the first time in several days and, of course, we'll keep you up-to-date on the efforts to once again free Captain Richard Phillips who is still being held by pirates off the coastline of Somalia.

Just stay with us and of course, we turn back now to our regular programming and that's YOUR MONEY.

CHRYSTIA FREELAND, MANANGING EDITOR, FINANCIAL TIMES: ...America to the rest of the world. It's not entirely true. European banks found ways to get themselves into trouble, but the catalyst was definitely here and the ideology that underpinned this very free-wheeling and very lightly regulated version of capitalism was definitely American. ROMANS: You know, Roland, we heard several different people, but Gordon Brown the prime minister of Britain when he said the Washington consensus is over. We are moving on. For some of us, when we started as young market reporters, they talked about the Washington consensus, light regulation, deregulation, let the markets work and it lifts living standards for people and it spreads globalization around the world.

It was kind of a remarkable past couple of weeks that we're talking about this new -- kind of this new era. Do you think that there's something new coming here and it's not necessarily a bad thing?

ROLAND MARTIN, CNN CONTRIBUTOR: Unfortunately it is, and I know it is a bad thing. Let me give Burger King a plug. You can't have it your way. The United States can no longer sit here and say we call the shots, shut up, sit down; we're going to tell you what to do. So for the president, for this administration to admit that we screwed up when it came to how we operated on Wall Street, sometimes you have to admit that. If you go to a what's the first thing they say? You have to admit that you're a drunk first before you can start the whole process.

So we can't sit here and act like no rules apply. For some reason we bought into these hype of no, no, no, no, no. We limited our sales and limited rules to let us do our thing, but what ends up happening is you mess it up and so then the government has to now come in, save the day, put taxpayers at risk with so much money and folks say, OK, there's too much intervention now. I'm sorry. There has to be -- you have to have rules.

VELSHI: So let's talk about those rules for a second. One of the things that was worrying a lot of people about the G-20 was that there would be this move to have so much regulation and to be sort of a super national world regulator and everybody seemed to breathe a sigh of relief that wasn't going to be the case.

You know what my fear is Chrystia, that we are going to go forward and credit is going to come back and trickle back and we're going to be in the same position that we were in.

FREELAND: I think, Ali, that your concern is a much more realistic one than fears of some sort of souped up, super powerful global financial regulator.

ROMANS: How would we ever get them to agree? You get 20 people around the table how will they ever going to agree?

FREELAND: Exactly, and I also think it's quite unrealistic to expect countries to surrender the amount of sovereignty that you would need to have surrendered to have an international regulator with real authority. The one thing that people are talking about which I think a lot of economists see merit in is saying let's at least have some sort of international watchdog. That watchdog doesn't have to have power, but at least someone who can sort of slash an amber or a red light. VELSHI: I would have taken that. I would have taken that with the mortgage crises and the credit crises. Someone who at least had the ability to get in front of a microphone and get the attention of all sorts of people.

ROMANS: There were people that were in front of a microphone doing this and nobody paid -- why?

MARTIN: Ali, here is what we have. Here's a real-life example. Gas prices shot up and we all said oh, my god, drive efficient cars, public transportation. When gas went down, OK, I'll go back to driving. You're absolutely right. The fear is when everything levels off, oh; we can go back to the old ways. No, you are to learn from your mistakes.

So people have to recognize that there should be more regulation and there should be more watchdogs and we should have folks who are choosing to be conservative when it comes to how you invest when it comes to your principles as opposed to saying anything goes, but the fundamental issue that we have to accept is there has to be a change.

If we don't use this opportunity to fix the problem and not put ourselves in a situation again, then it's all on us and we can't say nobody taught us because we experienced it. We should not each want to remotely go through this again.

ROMANS: We don't want to go too far the other way, though. We always overshoot.

FREELAND: But what does that mean too far the other way? So far, Christine, one thing that has been reassuring is that actually a brand new regulatory framework hasn't been invented yet and people do say, you know, you never want to regulate in haste. These are very, very complicated matters.

We have had very clear signals both from President Obama and from the secretary of the treasury Tim Geithner that there will be a new regulatory regime and there has to be because what we've seen happen over the past year is absolute proof that some banks are too connected or too big to fail and if they're operating in that environment, it means they're like players in a casino who can't lose their money.

If there's no risk involved then the way that you have to regulate what they do is through regulations. The market isn't going take care of that so I think that a much more regulated Wall Street, a Wall Street which is much more of a utility rather than a casino is inevitable.

VELSHI: Good to have both of you on here. Roland Martin and Chrystia Freeland, thanks very much for joining us.

ROMANS: All right. Thanks. All right. The clock is ticking on your taxes and on Ali's taxes. Grab a pen and paper some very important last-minute advice you need to hear that will make you some money.

VELSHI: Kathy Ireland is here to talk about how parents can handle it all including their money.

(COMMERCIAL BREAK)

VELSHI: OK. It's tax time. Christine and I usually alternate who starts each segment. I'm supposed to be starting this one, but I actually need to recuse myself. I'm not in a position on giving people advice on filing their tax returns on time because once again, all the years we've known each other. My taxes are not done.

ROMANS: We know it's almost tax time and Ali hasn't done them yet. We have a tax guest for three weeks heading up into the deadline and Ali has very specific questions. The average tax refund is I'd say 10 percent this year, that's according to the IRS. We want to make sure that even procrastinators ...

VELSHI: Like me.

ROMANS: Have some help during tax filing season.

VELSHI: Well, it is free advice, and maybe a little bit of money in your pocket. Roni Deutch is a tax attorney and author of the "Tax Lady's Guide to Beating the IRS." Roni, good to see you again. I'll ask you highly-specific questions. Guys like me, haven't filed their taxes yet. The tax deadline is coming up and I'm not sure I'm going to get it done by the 15th of April. What do I do?

RONI DEUTCH, AUTHOR, "THE TAX LADY'S GUIDE TO BEATING THE IRS:" You are my kind of man. Just so you know, millions of people like you and me are not prepared to file our taxes on April 15th. Here's the great news, everyone out there who is not ready to file on April 15th, you are legally entitled to receive a six-month extension of time. All you have to do is file form 4868 with the IRS and that gives us six months to file that tax return.

VELSHI: If I think I owe money, what happens then?

DEUTCH: Yeah, let's get realistic here. Do you realize how many people are going owe the IRS money and they're not going to be able to pay on April 15th. If you owe the IRS money I still want you to file for that extension. Now comes October 15th and you have to file and you've got to pay. They are going to assess some additional interest on what you should have paid and, of course, the late payment penalty, but I come back and say, Ali, if you're not prepared and you don't have the money, don't freak out over it.

ROMANS: There you see it right on the screen. Need time? IRS form 4868.

VELSHI: By the way, they've become a lot friendlier about having information on their sight or being able to answer questions. Let's talk about e-filing, Roni.

DEUTCH: Right now only 60 percent of all Americans e-file and I don't understand that. A hundred percent of the population should be taking advantage of e-filing. It's free. It's accurate. The IRS will not lose your tax return. So again, e-filing should be one of your best friends at about this time of the year.

ROMANS: Why aren't people doing? They're married to the old pen and paper way they've always done it and they can't move on to the new way?

DEUTCH: Yeah, Christine, I think its fear. I think what we're trying to do by just talking about taxes is to get people to be not afraid of the boogieman. So if we're not afraid and we learn about technology, which is e-filing, we can save money on our taxes and not be afraid of the boogieman.

VELSHI: Speaking of saving money and the time that's left, there is something you can do that can still reduce your tax payable right? You can still contribute to or open an IRA right up until tax deadline day.

DEUTCH: Right, let's talk about the tax pirates. We know the IRS wants your money, guys, but the good news is you can put $5,000 in a traditional IRA, by doing that you are making a date with yourself in the future and you're saving for your retirement but more importantly today you're saving money on your taxes. You can do that up to April 15th.

VELSHI: Excellent. Great advice. Unfortunately, I'm going to run out of opportunities to have Roni on the show to talk about tax deadlines and maybe we'll have you back on to say you still haven't filed your taxes, what should you do. Roni great to have you. Roni Deutch is the author to "Tax Lady's Guide to Beating the IRS."

DEUTCH: Thank you so much, guys. Appreciate it.

VELSHI: She's a tax attorney as well.

ROMANS: All right. Ali, you are will have a very long ...

VELSHI: I am going to be very busy.

ROMANS: From board meetings and blackberries to play dates and apple pies, working parents can find themselves spread pretty thing and Kathy Ireland is here with a plan to make your life a whole lot easier. She's here right now.

VELSHI: I know.

(COMMERCIAL BREAK)

VELSHI: Even in the best of times, balancing work and home is a constant struggle for parents.

ROMANS: OK, so we brought in a pro, a successful working mother, model, businesswoman and author, Kathy Ireland. She is the CEO of Kathy Ireland World Wide and author of "Real Solutions for Busy Moms, Your Guide to Success and Sanity." Welcome to the program.

I love it your guide to success and sanity. In my own personal life, I found when there's more of one there's less than the other. It is either sanity or success trying to get those two things into balance is extremely difficult.

KATHY IRELAND, CEO, KATHY IRELAND WORLD WIDE: It is extremely difficult and it is crazy out there and moms have a hectic schedule. I wrote this book because I have a lot of problems. I need a lot of solutions, the first chapter is money matters and does it ever and, Ali, your book "Gimme my Money Back" I love that how you're helping families to really just to navigate through this financial crises.

VELSHI: Thank you. You have a certain focus and that is about busy moms. We met when we were doing the show called "The Turnaround" and you were mentoring a woman who ran a small business in California. And this woman was on top of trying to run a small business, a mom upon and that was tough because small business owners devote so much time to their jobs. How do you manage that, first of all? How do you decide how you split up your time?

IRELAND: It's very challenging and it's a daily juggle. For me it's determining priorities, and I talk about that in the book. For me my priorities are my faith, my family and finding solutions for families, especially busy moms. I was 40 before I learned that no is a complete sentence and no, thank you is better. Sometimes we need to say no to certain opportunities so that we can do great things and in the book I talk about putting on your own oxygen mask first as moms.

We're typically trying to take care of everybody. We forget to take care of ourselves. We can be the most efficient in money matters. We talk about tangible ways to really navigate through these financial crises and what are we spending? We've become a country of spenders and not savers. We sell products and I'm not telling people to not spend, but it's got to be in ratio with what's coming in. It's simple.

ROMANS: It's getting back to common sense I think is the thing here. We've spent 20 years where we lost our grasp on common sense and now we have to go back to the basics and one thing that I keep saying is the most important thing you can give your kids is a solid head on their shoulders about money because that's something that goes with them through the rest of their life, so you started, one of the first parts of the book is about money and family money matters.

Why start money? Is that kind of the most important thing for you, do you think, that we have to get our hands on?

IRELAND: The book was put to bed last spring as I gave it to friends to read the rough. There was criticism why are you acting like you are living in the great depression? Why are you insisting this be the first chapter? It's affecting everybody. And children, when I'm with a kid, money was more taboo than sex even.

People didn't talk about it. It's important as a kid, I had a paper route, Warren Buffett, who I know through our relationship with a partner, also had a paper route and when we get together that's what we talk about. It's important to teach our kids the value of a dollar for them to understand how that works and what the family budget is and how they can earn money.

ROMANS: For so long in this country the value of a dollar was really the value of 70 cents and you borrowed the other 30 cents.

IRELAND: Credit cards if you are just paying the minimum on your credit cards please cut them up.

VELSHI: A year ago, when you were writing about this before it was as serious as it is right now, one of the things we know from parents, whether they're business people or working parents, is that talking to their kids about this financial situation is difficult. Some people believe you have to absolutely shield your kids from the changes that are happening in your lives. Others think you should involve them a little in the decision making about how you're going to deal with a bit of a financial crises. What do you think?

IRELAND: I think we're doing a huge disservice to our children if we keep this information from them. We've got to education them. They are watching us. They are watching our spending habits. You were talking about the spending; do we have a sense of entitlement? Are we trying to fill a void? Where is this coming from? We have to address this so we can help the next generation move forward in a powerful way.

ROMANS: This is number five, the fifth book, right?

IRELAND: Yes.

ROMANS: Wow. Congratulations, Kathy Ireland, "Your Guide to Success and Sanity." I haven't got the success and sanity part quite right.

VELSHI: You handle it pretty well, I think. I'm here between two women who I think handle their careers and their family lives very well. So congratulations to both of you. Great to see you again.

IRELAND: Thank you.

ROMANS: He knows flattery gets him everywhere.

VELSHI: Well, does the state you live in affect how you feel? We are going to tell you where your state ranks on a happiness scale.

(COMMERCIAL BREAK)

ROMANS: All right. The pursuit of happiness is one of the principles our country was founded on. So where in the U.S. are Americans happy?

VELSHI: Well, according to Main Street.com/happiness index those of you watching us from Nebraska are the most joyous.

ROMANS: Go Nebraska, it is the state that brought us Kool-aid, Cliff Notes, Warren Buffett.

VELSHI: The states were ranked; they were rated based on household income, debt, employment levels and foreclosure rates.

ROMANS: Nebraska also brought me my husband. VELSHI: Very good.

ROMANS: And Iowa ...

VELSHI: Which brought me my TV wife.

ROMANS: Kansas, Hawaii and Louisiana. At the bottom, Rhode Island, Nevada, sorry, guys, California, Florida and Oregon.

VELSHI: With the exception of Oregon, those are all states with a lot of foreclosures. All of those states, by the way, with the exception of Florida have unemployment rates above 10 percent right now.

ROMANS: A fascinating story this week, pirates seizing an American-flagg ship near the Horn of Africa.

VELSHI: What does that mean for international trade? Well, it is time now for the ultimate quest, Richard Quest joining us now from London. Richard isn't this an issue that we have to start being concerned about from a trade perspective in the world? Because these ships are carrying goods that are meant to be sold. I don't understand how big a deal this is and how we should be thinking about piracy.

RICHARD QUEST, HOST, CNN'S "QUEST MEANS BUSINESS:" It is an extremely serious issue. For the very simple reason that the area in the waterway that you're talking about is crucial to international shipping. Now piracy, of course, everything from captain bluebird with a parrot on his shoulders, shiver me timbers, that's been around for centuries.

However, what is new and different this time is, of course, where it's taking place. These pirates have no intention of taking the goods on board the ships and selling them in most cases. It is pure and simple ransom. For example, when we have the serious star, the oil tanker that has all of the tens of millions of dollars of oil on board that tanker, that is money, of course, that eventually and of course, to some extent, this is the conniving bit.

Those who own the ships, they know that the amount of money that they're being asked to provide is relatively small vis-a-vis the ship's cost and the cargo cost. So there's an enormous ...

ROMANS: And then they have insurance. You can get insurance for ransom and kidnapping and all of that sort of thing. We talked to Lloyd's of London earlier this week and they said, indeed, we write these kinds of policies all the time, these kinds of policies that are a big premium to take your ship through there. If you have a cargo of tens of millions of dollars worth of chemicals or something, clearly you're going to try to get insurance for this.

QUEST: But ultimately, and this is the point, we all think, oh, and it's very serious what's happened in the last week. We all think its pirates on the high seas. It all does sound a little bit, my word, how very unusual. But ultimately, economically, you and me, and that's what we're interested in, guys, economically we're paying the cost because we pay for that. Heck, we pay for that extra insurance premium. We pay for the fact, for example, if the ships instead of going through the Suez Canal have to go right down through the cape, don't you think that's going to cost a lot more in terms of fuel and time and shipping charges?

ROMANS: Yeah, 20 days around there.

QUEST: And we buy all of the stuff anyway.

VELSHI: Ultimately, those ships are moving because it has products that we're either buying in its final form or as materials for products that we use.

QUEST: There's nothing cutesy about this. We have given it a nice name, piracy. It has got this idea of people climbing on big ships and warships moving in. There's 400 square miles of water to be policed. So we're not talking about popping off the Florida coast between Florida and Cuba. This is a serious amount of big water that has to be policed and these people know what they're doing.

Just think about it. They don't just come up with one ship. They surround the ship from the mother ship. They then grapple hooks over, they shimmy up, and they get on board. Ultimately, we pay the bill for all of this. It's a serious economic problem. It needs to be addressed. It won't be addressed, though -- and this is crucial -- because of the size Christine and Ali of the water space, military ships are not the answer. The answer is in dealing with the core problem back in Somalia.

VELSHI: That's a good point. Richard Quest, "Quest Means Business" on CNN International. Richard and I talking about how it matters to you and me. We're still in a contest for our tweeter followers. I think he is beating me hands down. At Richard Quest is where you find Richard Quest.

ROMANS: You know on the piracy story you know the people ...

VELSHI: You have you to pitch my Twitter.

ROMANS: And Ali Velshi.

The piracy story is fascinating. Because nobody wants to give you a number and nobody wants to say oh they get a million for ransom or $3 million at the high water mark. The pirate experts don't want to send a signal ...

VELSHI: They don't want to put a price on it.

ROMANS: That they're paying for it.

VELSHI: Richard always gives us remarkable perspective on this. By the way when you follow him on Twitter, he tells you everything. Lots and lots of exciting detail. I live vicariously through Richard Quest. Thank you for joining us.

Make sure you join us every week for YOUR MONEY, Saturdays, 1:00 p.m. Eastern and Sundays at 3:00.

ROMANS: You can also logon 24/7 to CNNMONEY.com. Have a great weekend, everybody.

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