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Port Strike Could Cripple Economy; SeaWorld Files to Go Public in 2013; SeaWorld Headed to Wall Street; Top Political Moments of 2012; Nets Fire Avery Johnson
Aired December 28, 2012 - 09:30 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
VICTOR BLACKWELL, CNN ANCHOR: Good morning. I'm Victor Blackwell, in for Carol Costello.
Stories we're watching right now in THE NEWSROOM.
The opening bell at the New York Stock Exchange rang just a few seconds ago. Stocks are poised to open with lower -- open lower rather with much of their attention still focused on that fiscal cliff.
Ringing the opening bell today, the Startup Weekend leadership team.
Tributes are pouring in this morning for retired General Norman Schwarzkopf. Stormin' Norman as he was known died yesterday. He became a household name in the '90s as he led America to victory as commander of coalition forces during the First Gulf War. Schwarzkopf was 78.
Craft store giant Hobby Lobby is bracing for a $1.3 million a day fine. It starts January 1st for bucking some of the rules in the affordable health care law. You see, the company opposes providing some contraceptives to its employees through its company health care plan, citing religious grounds. The company says some contraceptive products like the morning-after pill equate to abortion.
Just four days now until the U.S. could cross over that fiscal cliff and just in case Washington doesn't make a deal, we're getting you ready. Every day this week, we've been taking a look at how it will affect you and your pocketbook. And today, we're focusing on those of you getting close to retirement.
Ryan Mack, president of Optimum Capital Management, joins me now via Skype from Detroit. Ryan, it's good to have you back.
RYAN MACK, PRESIDENT, OPTIMUM CAPITAL MANAGEMENT (via Skype): Thank you for having me.
BLACKWELL: Let's start with the basics, and we're talking about retirement and sometimes when you get all deep in the weeds, it's difficult for people to stay with you. So let's talk about the retirement accounts and what we should take into consideration. MACK: All right. Well, essentially the worst question, the hardest question we could take is when someone's 55 and they say, Ryan, you know, I've lost all of my money in the markets. What am I supposed to do?
Well, essentially, that means that they were not allocated appropriately. There are essentially three stages to any investment or life cycle: the accumulation side, the phase, you just graduated from college and you're ready to take on a lot of risk.
The conservation phase, where you've been in the working phase, 15 to 20 years. You've got a lot of years left, but you're not willing to take on as much as risks, but you still have the ability to take on more.
And the early retirement phase, which is the distribution phase. You five, ten years left until retirement, conserve your capital and lot less aggressive as you used to be, and you want to make sure that you can conserve the capital so you can prepare for retirement.
BLACKWELL: Let's talk about the 401(k), because pensions are going away and few and far between from companies. Give us some tips to beef those up.
MACK: Well, essentially a lot of individuals have to, one, read the package, a lot of -- how many people have this 401(k) package sitting up under their beds collecting dust for months and months at a time without necessarily reading it.
You have to determine your asset allocation structure in your 401(k), picking the right investments, knowing the rules of the 401(k), especially looking at that expense ratio, meaning high expense ratio. If you have 1.5 percent to 2 percent ratio that might set off red flags.
And then, lastly, don't wait to start. I mean, look, the H.R. benefits department, they're specialty is hiring and firing. So, you might have to check to make sure they selected the right 401(k) for you. We've insisted they go to the benefits department and say we'd like to select a 401(k) package with less expense ratio, that's more appropriate for our retirement for the widest selection of funds.
BLACKWELL: OK. Let's talk about the tax deferred accounts, these IRAs. What do we need to know?
MACK: Well, essentially, we have to, again, start as soon as you can. You have to be properly prepared. I mean, it's not good if we have a lot of debt or if we haven't set up, improved your credit in such a way that you are able to set a sustained investment strategy for your IRA, and then select any appropriate investments. Going to a good financial adviser, talking to someone who can assist you to make sure you have a well-diversified portfolio, you can have a dollar cost investment strategy over the long run.
BLACKWELL: All right. Making it simple and easy for us -- Ryan Mack, thank you very much. MACK: Yes, sir. Thank you, sir.
BLACKWELL: Ryan has been with us all week tackling the fiscal cliff's effects on your pocketbooks and he'll be back with us next week with more advice to keep you ahead of Washington.
OK. This is interesting, some are calling this the container cliff -- thousands of dockworkers from Maine to Texas are threatening to strike on Sunday. We're going to tell you about how this could cost you and how it will affect the economy.
BLACKWELL: As if the looming fiscal cliff wasn't enough to worry about, now 14,000 dockworkers at ports from Massachusetts to Texas are threatening to go on strike Sunday. That could cost Americans billions of dollars, because shipping costs on everything from shoes to cars would skyrocket.
CNN's Brian Todd is at the port of Baltimore.
BRIAN TODD, CNN CORRESPONDENT: Victor, this is a crucial port for commerce in this region. This is the Seagirt Terminal here in Baltimore.
You see a containership over here to my right, you see the terminal over here on my left. Over my left shoulder, 600,000 containers move through the port of Baltimore every year, billions of dollars' worth of goods.
But that could all come to a grinding halt if the dockworkers and the shipping companies can't reach a deal.
(voice-over): They move everything from our clothes to toys and electronics through the ports and into the marketplace. But a lot of those goods won't be making it to our stores if longshoremen at more than a dozen ports from Maine to Texas go on strike. That's what could happen by Sunday if a deal can't be reached between the major shipping companies and a union representing nearly 15,000 longshoremen.
RICHARD SCHER, MARYLAND PORT ADMINISTRATION: The impact would be great, obviously, on the dollar value side, on the cargo handling side, but also on the job side, because, again, these ports are major economic generators.
TODD: Richard Scher of the Maryland Port Administration, and others, say the economic damage from a strike would reach well beyond the docks.
JONATHAN GOLD, NATIONAL RETAIL FEDERATION: Everybody from your mom and pop retailer to your farmer to the trucking company who has to go in and pick up the containers at the ports. So this is going to be felt not just at the local economy at the port, but nationwide -- for everybody else who relies on these ports to move their commerce.
TODD: Coming at the same time as the fiscal cliff impasse, it's a potentially devastating one-two punch for the U.S. economy. Neither the longshoremen's union nor the alliance representing the shipping companies would give us anyone to speak on camera. But officials with knowledge of the negotiations say it boils down to one issue.
(on camera): The key sticking point is over those large containers and the payments that longshoremen get for them. The shipping companies pay royalties to the longshoremen for the containers based on their weight. But the shipping companies now want to freeze those royalty payments for current longshoremen and eliminate them completely for future hires.
(voice-over): The longshoremen say those royalties are designed to make up for jobs lost to automation. A strike would only affect ports that handle containers, not other cargo, like automobiles.
But if the shipping companies lock out the longshoremen --
SCHER: That would impact more than just containers. That would impact all cargos at ports. So that would have, obviously, a much more impactful reaction.
TODD (on camera): How impactful? Scher says East Coast and Gulf Coast ports handled about $55 billion worth of cargo in an average month this year -- Victor.
BLACKWELL: Brian Todd in Baltimore, thank you.
SeaWorld, it's known for its splishes and splashes. -- I don't know if splish is a word but I used it, I'm going to stick with it -- and soon it could be making waves on Wall Street.
BLACKWELL: SeaWorld heads to Wall Street and soon you could own a piece of the water park.
Alison Kosik at the New York Stock Exchange. Alison, the obvious question is: why is SeaWorld going public?
ALISON KOSIK, CNN BUSINESS CORRESPONDENT: Why not? It's going to be a whale of an IPO.
BLACKWELL: Oh, really? That's what we're doing this morning? Really?
KOSIK: I'll give you the real answer here. OK. So, first of all, you think of who owns SeaWorld -- a private equity firm Blackstone owns the theme park and Blackstone really isn't known to holding on to the companies for long. Also, they're looking to pay off debt. But SeaWorld has been doing pretty darned well lately. Now, the company is looking to make its big splash or public debut sometime next year. It's going to trade under the ticker symbol seas and it's hoping to raise about $100 million in the offering. But that figure is most likely going to change and some estimates actually put it much higher.
Remember the Facebook road show? So, yes, underwriters for SeaWorld, they are going to be doing the same thing. They're going to shop the company around, gauge interest, to figure out the right size and the right price tag for the IPO before its debut.
Also, SeaWorld also owns the Busch Gardens and Sesame Place brands as well. So we can relate to those theme parks, too -- Victor.
BLACKWELL: Yes, and families love going to the parks. But if you're mom, dad, two or three kids it's expensive.
KOSIK: Yes, it is.
BLACKWELL: What is the potential effect on ticket prices?
KOSIK: And that's a really good question. You know, one IPO analyst that we talked with, he said -- you know, he doesn't see how it would affect ticket prices. He said that at least in Florida, the SeaWorld brand is always kind of played second fiddle to Disney so it really wouldn't be a good idea to raise prices and if they did it probably wouldn't be anything to write home about.
Now in its filing SeaWorld did say it may tinker with the idea of offering different ticket levels for different guest experiences so that's the only change that we see right now. But it certainly is going to be even more interesting to see how investors react. SeaWorld has had some big jumps in both sales and profits recently and there are some unique risk factors that go with owning a share of a place like this.
You know the topic of animals in captivity is a very touchy subject for many people, you know. Who can forget the uproar that happened after the trainer death a couple of years ago? But still this is a relatable brand. The thought is it can generate investors who like to kind of dabble in the market or dabble at least in something that people can relate to -- Victor.
BLACKWELL: A whale of an IPO, big splash on the market. I'm happy you were able to use those. I know you've been working on it.
KOSIK: I've been working on it yes it's very hard.
BLACKWELL: All right Alison, thank you.
Next the top political stories of 2012.
BLACKWELL: If you were putting together a list of the top political moments of 2012, you'd place the presidential election at the top, clearly. But there were other compelling stories inside and outside that campaign that made indelible remarks. Here's Candy Crowley's top ten.
CANDY CROWLEY, CNN CHIEF POLITICAL CORRESPONDENT: Picking the top ten moments of an election year is like finding your favorite grain of sand on the beach. There are an impossible number of possibilities. There are the moments when catch phrases become boomerangs.
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: If you got a business you didn't build that.
MITT ROMNEY, FORMER PRESIDENTIAL CANDIDATE: I like being able to fire people who provide services to me.
CROWLEY: When cast members stole the spotlight.
SANDRA FLUKE, WOMEN'S RIGHTS ACTIVIST: I'm an American woman who uses contraception, so let's start there.
ERIC FEHRNSTROM, FORMER ROMNEY ADVISER: It's almost like an etch-a- sketch, you can kind of shake it up and we start all over again.
CROWLEY: And a fair number of moments ranging from ridiculous to inexplicable.
CLINT EASTWOOD, ACTOR: I'm not going to shut up. It's my turn.
OBAMA: I think it's called Romnesia.
ROMNEY: If I were call the term it would be Obamaloney.
CROWLEY: So many moments so much none sense but there were game changers too, moments that shook up the race or made history and made our the top ten list.
It was seen at the time as a proxy race for November. Wisconsin's Republican Governor Scott Walker in a showdown with organized labor over budget cuts and collective bargaining power. It turns out the end result was no bell weather for the presidential race. Walker won, the first governor in U.S. history to survive a recall election.
And another nod to a Republican governor.
GOV. CHRIS CHRISTIE (R), NEW JERSEY: I cannot thank the President enough for his personal concern and compassion for our state and for the people of our state.
CROWLEY: New Jersey Governor Chris Christie's full on embrace of President Obama for helping Sandy-ravaged New Jersey came days before the election and had no noticeable effect on the presidential race but some Republicans think Christie didn't have to be that effusive. They'll remember if his name pops up in 2016.
REP. TODD AKIN (R), MISSOURI: If it's a legitimate rape, the female body has ways to try to shut that whole thing down.
CROWLEY: From the "say what" category of entries comes a combo team Missouri Senate candidate Todd Akin and Richard Mourdock of Indiana.
RICHARD MOURDOCK (R), INDIANA SECRETARY OF TREASURY: His wife is a gift from God and I think even when life begins in that horrible situation of rape that it is something that God intended to happen.
CROWLEY: Republican dreams to take control of the Senate in 2012 had dwindled throughout the year, but Akin and Mourdock pretty much shut that door in a couple of sentences.
Two words from Mitt Romney during the primary reverberated all the way through to November. The issue was his plan to prevent employers from hiring undocumented workers.
ROMNEY: People who've come here illegally won't be able to find work and over time those people would tend to leave the country or self deport.
CROWLEY: The concept of self deportation by undocumented workers was not by itself responsible for Romney's dismal showing among Hispanics, but it surely greased the skids. Also in the category of moments for which Romney would like to have had a mulligan, there was this.
ROMNEY: There are 47 percent of the people who will vote for the President no matter what. All right. There are 47 percent who are with him, who are dependent upon government, who believe that they are victims.
CROWLEY: Romney called his remarks completely wrong. They also caused the deepest self-inflicted wound of the election. On the flip side --
ROMNEY: He's going to be the next vice president of the United States.
CROWLEY: Romney's VP day may well have been the best moment of his campaign. The selection of Congressman Paul Ryan excited conservatives in a way Romney himself had not.
How many moments are there in an hour and a half? The President lost all of them in the first debate. The picture tells the story of a man who phoned it in, panicking his supporters and providing an opening for Romney.
And finally, the top three moments of the election best described as history-making politics.
A Supreme Court decision upholding the constitutionality of Obamacare. And if that doesn't strike you as political, consider what would have happened on the campaign trail if the high court had struck down the President's signature first-term achievement.
OBAMA: At a certain point, I have just concluded that for me personally, it is important for me to go ahead and affirm that I think same-sex couples should be able to get married.
CROWLEY: The first president to endorse same-sex marriage was a daily double moment. Good politics aimed at an activist wing of his party base and most certainly history. And finally, the number one political moment of the year is easy during elections.
WOLF BLITZER, CNN ANCHOR: CNN projects that Barack Obama will be re- elected President of the United States.
OBAMA: We are greater than the sum of our individual ambitions and we remain more than a collection of red states and blue states. We are and forever will be the United States of America.
CROWLEY: For Auld Lang Syne, cue the confetti and then say good-bye to 2012 and all its moments -- historical and hysterical.
Candy Crowley, CNN, Washington.
BLACKWELL: This next story is unbelievable. Actually it's pretty believable, sadly. You think your teammate would have your back. Well one former NFL lineman didn't mind when the quarterback wound up on his back and injured. We're going to talk about this one.
BLACKWELL: The firing of a coach at any level can take a hit on his family, but Avery Johnson's son is hitting back.
Bleacher Report's Vince Cellini joins me now to talk about New Jersey Nets. This is really unbelievable because Johnson was just coach of the month, right, and now he's out.
VINCE CELLINI, BLEACHER REPORT: He was for October and November and then gone by New Year's. This is the life in the NBA for a head coach. There were a number of factors involved though including him being in the final year of a contract. This team had high expectations. They moved from New Jersey to Brooklyn. Big payroll, a lot of free agents but they had underperformed. After a great start, he was coach of the month, 3-10 in the month of December.
Then with the free agents not playing well including Darrin Williams, his team leader, insiders say he may have lost the locker room and there was just too much at stake, they had to make the decision and that happened Thursday.
But interesting what you're talking about, family members. Avery Johnson Jr. reaches out with a series of very emotional tweets, his a high school sophomore. And one of the tweets read, "the expectations were way too high for this team. We didn't have a losing record, didn't give my dad a full season." TJ Carlisimo a veteran will be the interim head coach starting tonight at home to Charlotte, at team that's struggling so maybe they will get on the right foot here.
BLACKWELL: This story -- the next one we're going to talk about -- I talked about just before the break. One teammate, an NFL player, former NFL player admitting that he allowed a teammate to get injured. That's just --
CELLINI: Lomas Brown, former Detroit Lions tackle and really a stand up guy. A great player. Admitted that he did a bad thing during a recent radio interview. He said in a game in 1994 against Green Bay, he allowed a defensive lineman to come in and hit his quarterback Scott Mitchell.
He said the team was playing poorly. He felt Mitchell was playing poorly so he wanted him out of the game. That's just breaking that sacred trust between a lineman and your quarterback. On top of this, Brown was a guest in the Mitchell home. Mitchell heard about this and called it reprehensible.
But Victor, the bigger thing is that in an ironic twist, Lomas Brown is a guy who is suing the NFL for compensatory damages for injuries related to football back in his playing days. So I think brown is going to reach out to Mitchell and they're going to try to smooth this thing over. But that's a horrible admission.
BLACKWELL: And then quickly this heart-warming story. A young painter out of Baltimore.
CELLINI: Right. Baltimore, a city you know -- very well. Your hometown. 21-year-old Darrin Guest, what a great story. He has spent most of his life battling muscular dystrophy in a wheelchair but he's become an amazing artist. Among his subject, members of the Baltimore Ravens whom he visited at a recent practice. They have really embraced him so much so that one of the Ravens Tory Smith commissioned guests to paint a portrait of his late brother.
And obviously, terrific word. Very impressed not only with his work or with this young man and what he is doing with his life.
Let me give you a quick reminder, bleacherreport.com for all your news including the L.A. Clippers seeking a 16 straight win tonight against Utah. You can read about that and their amazing run.
BLACKWELL: Thank you.
Next hour of CNN NEWSROOM begins right now.