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YOUR MONEY

Racial Inequality In The Economy; Motor City Goes Bankrupt; Health Of The Growing Trend Of E-Cigarettes; The Security Hole In Network Extenders; Corporations Sitting On Their Cash; A Lesson In Hardcore Negotiation; Expedia's Flip-Flop Survey Is Out

Aired July 21, 2013 - 15:00   ET

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


CHRISTINE ROMANS, CNN ANCHOR: Far away from any courtroom, when it comes to the economy, there can be no debate. Racial inequality exists. The numbers don't lie. In jobs, housing and investing, African-Americans lag far behind whites.

The U.S. is a country where the unemployment rate for black Americans has long been double the rate for whites; 43 percent of African- American households own their own home. Compare that with 73 percent for white households.

The only color that should matter when it comes to money is the color green. And yet the economic disparity between black and white is simply undeniable. In 2011, the median net worth of American households was more than $110,500 for whites. That's almost 18 times the median net worth of African-Americans, about $6,000. And that gap grew significantly in the wake of the financial crisis.

So, why the disparity and what can be done about it? Talking race in America is never comfortable. But it's a discussion that's long overdue.

The Rev. Jesse Jackson, the founder and the president of the Rainbow PUSH Coalition, has seen it all from historic marches with Martin Luther King Jr., to seeking the Democratic nomination for president in the 1980s to watching Barack Obama become the first African-American president today.

Rev. Jackson, thanks for joining us this morning. So nice to see you. And a really important conversation we are having about inequality of wealth, inequality money in America. What is the number one factor in your view, the number one factor in your view that 50 years of progress we have not made progress on money?

REV. JESSE JACKSON, PRESIDENT RAINBOW PUSH COALITION: Fifty years later, we are free, but not equal. And as a matter of fact, free but less equal. I think one evidence was the housing collapse. We were targeted, stood in clustered based upon race, and we've won those lawsuits, but the lawsuits we won did not compare to the housing that was lost.

In Chicago, jobs are out. The industrial collapse, there's a big factor in it. This past summer, they cut Pell grants, summer Pell Grants. Last year, Chicago (inaudible) 800 students, this year it has 500, summer Pell Grants. More house colors with Dr. King, with the school, Parent Plus loans. The school's faculty had to go on furlough during the -- during the spring break, because of lack of access to capital.

So, lack of access to capital is the big deal.

ROMANS: So, it's not one thing. It's a lot of things really moved forward, propelled forward most recently by the housing crisis.

When you look at the recovery, even in the recovery, you see people with money, people with jobs, people with homes doing great. There's one group of America making a lot of money right now. And everyone else is falling behind.

JACKSON: Well, the banks are doing better because they got bailed out. The insurance companies are doing better because they got protected. So, those who got bailed out are doing much better.

There were 21,000 auto dealerships, there were like 800 black dealerships five years ago. That's now down to 200 out of 21,000. And there's not -- only one black soft drink franchise.

For example, the stuff that make up the guts (ph) of Middle America and then you try to get to -- General Motors has 4,000 auto dealerships, 236 African-American. And it's difficult because whites who got those dealerships got them into perpetuity. You can't even buy them anymore. So we're locked out of the infrastructure of the guts of the economy.

ROMANS: Let's talk about social mobility, because this is what keeps me up at night.

When you look at these mobility numbers, when you look -- this is supposed to be the land of opportunity. America the place where your ambition is the thing that can drive you. A talent and then the opportunities is what America gives you.

Several recent studies challenge this notion. One report from Pew finds social mobility in the U.S. is on the decline, Reverend, compared with other nations. That means the U.S. is no longer your best bet to move up the economic ladder if you're born poor.

And the rich stay rich more often in this country. You know, that sounds distinctly un-American. So, my question to you, it feels like one America, two economies. Is it race that is dividing us about -- in money or is it class?

JACKSON: Well, based upon race, you have less access to education. You're more jailed. Now, Christine, you have the case where, in Chicago, for example, the prisoners, this county makes $3 million a year for prison telephone calls, collect telephone calls. The poorest people get the calls they make.

The other part of it is prison labor is on the rise. But you work -- South Carolina, 20 percent of all prisoners are leased to companies, for example, that some kids in Cook County jail have been there three to five years waiting for pretrial detention.

And what it means, is that when you go through -- a big "New York Times" article a month ago that showed blacks and whites are using marijuana about the same level, blacks are four to (inaudible) times more likely -- more likely to be arrested. Then that is your record.

Then it's more difficult to borrow. More difficult to get a job, more difficult to live in public housing, more difficult to get scholarships.

ROMANS: We know all of those credit and background checks every employer is doing, 40 percent of employers I guess do background checks. And so, you know, I can definitely see how that is something that can hold somebody back. What --

JACKSON: We do best, say, on the football field. Why -- or the basketball court. Why do we do so well in those areas? Because in those areas of life what most Americans really see, the playing field is even. Rules are public.

ROMANS: Now, that's an interesting point.

JACKSON: Referee is fair and the sport is transparent.

But when the playing field is not even, you just -- you can't score.

ROMANS: That is an interesting point. I haven't heard that point been made. What is the one thing that we can do? What is the one thing we can do to take this moment right now, let's put people on the streets, people talking about race, an uncomfortable conversation, talking about it again, talking about equality and looking at money and equality.

JACKSON: If (inaudible) raised in class to the extent that Johnson opened up the war on poverty in Appalachia, as to deracialize the debate to some extent, because you got these poor zones of hard- working coal miners. A coal miner there has over 6,000 (inaudible), poor folks in Appalachians as well.

So, what has happened is (inaudible), for example, the area where President Barack Obama was the organizer -- you cut public housing. You foreclose private housing, you close post offices, you close auto dealerships, you close trauma units. Guns and drugs and jobs (inaudible) flows. It's just a zone, a wasteland. That's where you have the violence coming from.

See, you need targeted jobs, jobs, education and transportation. Because if you live in Chicago, if you can't get public transportation, because they cut it, you can't afford private transportation. Job is a multiple hair (ph). So you can't get there for the job. There is a disconnect when people are trapped and living, and where the jobs are. And you simply can't grow.

ROMANS: Reverend Jackson, thank you.

The economy in black and white. One America, two economies. And the divide can often be drawn along racial lines.

I want to bring in Zain Asher. Zain recently spent some time in one Brooklyn community where - you saw this first-hand -- you saw how people were stuck in a right now, but really looking for a better tomorrow.

ZAIN ASHER, CNN BUSINESS CORRESPONDENT: Absolutely, yeah. I went to Bushwick (ph), and I found a community that desperately wants in on this economic recovery. You know, you know, Christine that the S&P 500 is up 18 percent so far this year. We know that jobs are coming back at a rate of 200,000 a month.

I have a - you go to places like Bushwick, like BedStuy, like Brownsville, and they'll say to you, when I get rejected from a job is it because the name on my resume was Devon that it wasn't even looked out? You know, absolutely heartbreaking.

But I did speak to one guy who is trying to change that; his name is Martin Allen, he spent 30 years in jail for robbery. He says, you know, I made some mistakes, but it's my job to help young black and women find work. Take a listen.

(BEGIN VIDEOTAPE)

ASHER (voice-over): Stocks hitting record highs, housing in recovery, unemployment falling, but much of black America is feeling left behind.

MARTIN ALLEN, PRESIDENT, PPEE CONSTRUCTION: What we see every day is people struggling to put food on the table.

ASHER (voice-over): At 13.7 percent, African-American unemployment is more than double the rate for whites. Martin Allen is trying to change that in his low-income Brooklyn community after turning his own life around.

ALLEN: I was in prison, finishing up a sentence and I saw my stepson come through the same prison walls that I was in and right then, something went off in my head to say, enough is enough.

ASHER (voice-over): He started his own construction company and began offering training classes, opening his doors to the homeless, ex-cons and anyone else interested. He estimates he has placed more than 2,000 people at job sites around the city.

LAQUANA WILLIAMS, TRAINED BY PPEE CONSTRUCTION: Oh, I changed my mind dramatically because I, as a mother, I felt like there was nowhere else to turn. I was stressed out, I was crying. I didn't know what else to do.

ASHER (voice-over): Learning what else to do is where financial adviser Ryan Mack comes in. He is teaching people in this community about saving and investing.

RYAN MACK, PRESIDENT, OPTIMUM CAPITAL MANAGEMENT: They really think it's not for me. I can just put money under my mattress. I can just continue to use this check cashing place.

ALLEN: We don't see how the market is going up. We don't see that point. Because all we getting is what comes downhill, you understand? Which is the crumbs from the rich man's table.

ASHER (voice-over): But even middle class blacks lag behind whites when it comes to investing. A 2010 survey of households making at least $50,000 a year found that 79 percent of whites were in the stock market versus 60 percent of African-Americans.

The housing bust made catching up even harder. African-American households lost 53 percent of their median net worth in 2005 to 2009 compared with just 16 percent for white households. But with housing stabilizing, Mack sees opportunity.

ALLEN: How can we get in on this recovery? The first thing we have to do is we have to start establishing credit immediately. You have to start paying your bills on time. You have to start budgeting. You have to start getting a stable job.

ASHER (voice-over): A stable job, like the ones in construction, Martin Allen hopes will be a bridge to something better.

ALLEN: We try to tell all of the people, look. Go to work right now. But use that as a stair step to take you to the next level. Four, five or six carpenters can get together and form their own little company.

(END VIDEOTAPE)

ASHER: And as I was leaving the interview, one guy tapped me on the shoulder and said, you know, we've all heard of trickle-down economics, but why isn't this recovery trickling down to us?

Another guy I spoke to said that he was 47 years old when he opened his first bank account.

You know, so on the one hand --

ROMANS: Wow.

ASHER: -- I know - so on the one hand, you have these stock market highs, that are benefiting the upper middle class, but on the other hand, 25 percent of African-Americans don't even have a bank account.

ROMANS: And more broadly, there are more people living paycheck to paycheck today in America.

ASHER: Right.

ROMANS: Live paycheck to paycheck than are exposed to the stock market. So that's really (inaudible).

ASHER: Yes, and then also a lot of the jobs that are coming back in this recovery, as you've talked about, are these low income, low wage -- excuse me -- jobs that are sort of part-time, so it's not exactly a fair recovery.

ROMANS: Thank you so much for that piece.

(BEGIN VIDEO CLIP)

ROMANS (voice-over): Up next, the Motor City goes bankrupt. What this historic filing means for the people of Detroit.

UNIDENTIFIED MALE: A percentage of our wages every year into that, so it's not something that's being given to us, it's our money.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

ROMANS: Detroit. Detroit was once the wealthiest city in America. It was known as the arsenal of democracy because in World War II it went from manufacturing cars to manufacturing airplanes and munitions and tanks. Literally the people and the industry in Detroit changed the course of history.

And Thursday, this week, after years of manufacturing job losses and economic decay, the arsenal of democracy filed for bankruptcy. CNN's Poppy Harlow has been covering the story from Detroit. She joins us now.

Poppy, how does bankruptcy work for an entire city? This is the largest municipal bankruptcy this country has ever seen.

POPPY HARLOW, CNNMONEY CORRESPONDENT: Hey, there, Christine. Yes, that's right; it is the largest municipal bankruptcy by far in the history of this country, $18.5 billion in debt. That is how deep in the red this city is. It's unprecedented. So the way that this all -- stuff is out in court is yet to be seen.

But what we do know is this is going to mean some pretty steep cuts for bondholders here, but really, also, likely cuts for retired and current city workers. Their pensions and their health care benefits hang in the balance. That's what so much of the focus has been on here in Detroit today in the wake of this bankruptcy.

What is it going to mean for people who are counting on those pension checks to come in?

Now, here's what Kevin Worthy, the emergency manager of the City of Detroit who made this decision along with the Republican governor, Rick Snyder, of Michigan, say.

They say, look, people are going to have to take these cuts in the near term, but in the long term, what you're going to have is a city that gets back on its feet. I mean, you've got 78,000 abandoned homes here, 40 percent of the street lights don't work. The average response time for police officers is 58 minutes. It's unacceptable.

So what they're saying is we can't pay what we promised, but by not paying all of that back we will eventually have more money to put into city services. That's the upside. But there is pain to get there, Christine.

ROMANS: So much pain. And what it means for city pensioners and retirees and active duty city workers as well. You're talking about firefighters who breathe smoke for 20 years, who put their own money into their pension plan and now they're going to have to get a haircut, right? Everyone is going to have to take a haircut.

HARLOW: Yes. I mean, look, we don't know the numbers yet. That will be fought out with lawyers in court over months, maybe years. But look, I just interviewed Kevin Worthy, the emergency manager here, and I said, is there any way you get out of this without pensioners making some sort of concessions?

And he said no. They're going to have to make some sort of concessions whether it's on the pensions or on the health care benefits.

I caught up with some of these people that are here, down here upset. One of them is Janet Whitson. She worked for the Detroit Public Libraries for 32 years. She said, I put in my part of the bargain, they need to put uphold theirs. She's so angry she is among some of the retirees that's actually trying to sue to block this. Here's what she told me.

(BEGIN VIDEOTAPE)

JANET WHITSON, RETIRED DETROIT PUBLIC LIBRARY EMPLOYEE: We are now in bankruptcy, so I guess my pension is in jeopardy, which would mean to me some various -- which have serious repercussions for my life.

HARLOW: Like what?

WHITSON: I believe at this point it would mean I would lose my home.

HARLOW: Your home?

WHITSON: Like some people, I have a very large payment on my home. It's not an outstanding pension, it's a pension that I can live on comfortably if it's accompanied by my Social Security, and yes, my home is in jeopardy.

(END VIDEOTAPE)

HARLOW: So these are real people with really big concerns, Christine.

I talked to a retired police officer here and he told me, this is a mess. And he said we're going to fight for what we are owed.

ROMANS: It's just such a sad, sad story, but we'll focus on this, of course, and the process and also about -- we'll be talking on this program and with you, too, Poppy, a lot about what some of the business owners and people in Detroit are doing to try to lift their city up, and there are a lot of really exciting things happening.

Poppy Harlow, thanks, Poppy. All right, coming up, do you know what this is? Your kids do. It's not the latest digital music device. This is an electronic cigarette. Is it safer than the alternative? Dr. Sanjay Gupta joins me next.

(COMMERCIAL BREAK)

ROMANS: The old-fashioned Marlboro is getting some competition. If you look closely you might notice more people puffing on electronic cigarettes instead of the real thing. CNN International's Maggie Lake has been following this growing trend.

Hi, Maggie.

MAGGIE LAKE, CNN CORRESPONDENT: Hey, there. Christine.

When is the last time someone lit up next to you in a restaurant in your city?

ROMANS: Long time.

LAKE: Can you even remember?

ROMANS: No.

LAKE: That may be changing because of these electronic cigarettes. Sales are soaring and big name investors are getting on board.

(BEGIN VIDEOTAPE)

LAKE (voice-over): It's been decades since cigarettes like Virginia Slims were considered trendy and fashionable, when Don Draper of "Mad Man" fame could light up at will and when giving a carton of cigarettes was considered an appropriate holiday gift.

UNIDENTIFIED FEMALE: It looks so bright and colorful under your Christmas tree.

LAKE (voice-over): But today with the dangers of tobacco smoke plastered on every packet.

UNIDENTIFIED MALE: You'll have an LED light in here.

LAKE (voice-over): A new generation of smokeless cigarettes are gaining investor attention and even celebrity support.

DAVID LETTERMAN, "LATE SHOW WITH DAVID LETTERMAN": This is remarkable.

UNIDENTIFIED FEMALE: I know!

LAKE (voice-over): With these cigarettes, nicotine is heated up, creating a smokeless vapor, and to the dismay of some in the health industry who worry about their safety, sales are rising.

E-cigarette sales are expected to double this year to a $1 billion market with dozens of brands to choose from. Investors who used to smoke out opportunity in the trendy dotcoms are stinking cash into smokeless startups.

Former Facebook president and brains behind Napster Sean Parker is among the investors pouring a whopping $75 million into NJOY, one of the leading e-cigarette makers. Bedford Slims, a smokeless cigarette start-up based in Brooklyn, is also attracting outside interests.

JESSE GADDIS, CO-FOUNDER BEDFORD SLIMS: I started on about $5,000 investment and throughout that course of the year, I raised about $15,000.

LAKE (voice-over): And don't think big tobacco isn't sniffing out opportunity.

DAAN DELEN, CEO REYNOLDS AMERICAN: Today, we are unveiling our latest transformative product. That is fused, digital vapor cigarettes.

LAKE (voice-over): R.J. Reynolds, the makers of Camel, Winston and Salem cigarettes, rolled out VUSE.

Reynolds is not worried that people will turn away from traditional tobacco just yet.

STEPHANIE CORDISCO, PRESIDENT, RJ REYNOLDS VAPOR CO: There will be some level of cannibalization, however it's aligned with our transformation strategy. We've got to provide smoke-free alternatives.

LAKE (voice-over): Smoke-free alternatives are only lightly regulated by the government.

UNIDENTIFIED MALE: Developed in the USA.

LAKE (voice-over): But there's nothing stopping them from being advertised on TV and in magazines. Without government intervention, big tobacco may be back on the airwaves in a big way.

(END VIDEOTAPE)

LAKE: And it can be confusing when you see someone smoking it. They look just like a regular cigarette. Christine, it's really interesting when I talk to people, they're divided. Some people think it's great.

This is a way that they can safely smoke, or can get them to switch from traditional cigarettes, although the companies themselves are careful not to make that claim.

But other people, especially former smokers, say to me, you know what, it took me so long to break that habit. I don't even want to open the door a little bit. So a lot of debate.

ROMANS: And you can see even the packaging is meant to click like a lighter. The look.

(CROSSTALK)

ROMANS: Also the tactile experience.

LAKE: Concern about minors seeing this, too, and bringing back the cool to smoking that people worked so hard to sort of separate out.

ROMANS: OK, Maggie Lake, CNN International. Thanks, Maggie, for that excellent report.

You know, e-cigarettes as we said are growing more popular, but what are the health risks? I want to bring in CNN's chief medical correspondent, Dr. Sanjay Gupta.

Sanjay, give it to me straight. Are they safe? Should users beware?

DR. SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT: Well, let me put it to you like this. Since 2007, roughly, when these have been out, they haven't really registered health complaints. That's not surprising, because sometimes it can take time to register these health complaints.

But the real answer is we don't know, and that's because this isn't regulated like a drug, Christine.

Typically if you have a drug, you have to prove, you have to go through safety trials ahead of time. Something like this, you really have to -- the product gets out on the market, and then if health complaints start to come in, it is then subsequently investigated.

When we looked into this, I can tell you when you talk about tobacco, you're talking about lots of different chemicals. You're heating them, you are lighting them and potentially releasing some of the cancer-causing qualities of them. That's been the concern. Here you don't have many of those chemicals.

You have nicotine, you may have some other chemicals that cause that vapor. We don't know what those chemicals do for sure. But right now there's probably just still not enough data.

ROMANS: So much, Sanjay, about this, as I was just saying with Maggie, is the click of the top almost sounds like the old fashioned lighter. The way they look, the way they feel, even faintly how they smell.

Could they be an effective aid to help people quit smoking, like the nicotine patch or the gum, or is this something that maybe, you know, people could get addicted to, people could start trying who maybe wouldn't have been a smoker and they like it?

GUPTA: You know, I worry about the latter part of what you're saying. I think, first of all, there's two reasons, and one of them is going to surprise you, I think, Christine, and that is you mentioned the nicotine patches or the gums. Those are designed to give you a certain amount of nicotine and then you sort of taper it off. That's how you get off of smoking. That's the goal.

Here, even with these e-cigs, it's not very clear at all how much nicotine people are actually getting.

Some of the researchers we talked to said that it was about every 10 puffs that they were actually getting some nicotine. Most of it is actually the vapor that is made up of things like propylene glycol, for example, and again, that's going to be need to be investigated more.

But I'm not sure that you could say that it's going to be a very effective smoking cessation device, and again for -- in part for the surprising reason that it doesn't actually give that much nicotine, at least the brands that we've looked at.

ROMANS: All right, a trend certainly to watch, both a financial trend and a health trend. Sanjay Gupta, thanks, Sanjay.

Don't miss your appointment with Dr. Gupta every weekend. "SJMD" airs Saturdays at 4:30 pm Eastern, Sundays, 7:30 in the morning. Thanks, Sanjay. Right here on CNN.

(BEGIN VIDEO CLIP)

ROMANS (voice-over): Coming up, not everything you do on your cell phone is private.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: You should assume that everything you're saying is being intercepted.

(END VIDEO CLIP)

ROMANS (voice-over): At least that's what some hackers say. How to protect yourself, next.

(COMMERCIAL BREAK)

ROMANS: It's a popular technology for extending cell phone coverage, and it had a major security hole that went undetected for years. CNNMoney tech correspondent Laurie Segall joins me now with more on this.

Hi, Laurie.

LAURIE SEGALL, CNN MONEY TECH CORRESPONDENT: Hey there. Very eye- opening, I'll tell you that. So it was a hack that happened in a network device. Now a network extender is essentially something you take in your home if you have bad service and you can put it in there and you get better service.

Well, I spoke with a bunch of hackers -- and this is a Verizon device -- who were able to tap into it and see basically everything you're doing on your phone. I want to show you how they were able to actually hack my text messages, first of all. Check this out.

(BEGIN VIDEOTAPE) SEGALL: I've got a phone right here. I can text your phone, and you're going to be able to use this to intercept and see exactly what I'm texting.

TOM RITTER, SECURITY CONSULTANT: We see the text message after it leaves your phone, before it reaches the carrier, before it reaches the recipient's phone.

SEGALL: I am going to text him now. So I'm sending it.

SEGALL (voice-over): But before my friend even gets the text, these guys are reading it on their computer.

RITTER: And you can see right here. Looks like an outgoing SMS from this identifier, sent a text message to this phone number, with the message "Hey, what is up."

(END VIDEOTAPE)

SEGALL: You can see my face right there. I'm clearly shocked. The last thing you think is you're going to text someone and some guy in a room with a computer is actually intercepting that. But I will say it got even worse, because I was asking so what else can you do? And they can look into your browsing history.

If you have ever -- I don't know if you have ever looked at your bank account statements, that kind of thing on your phone, they can do that. But he actually was able to record one of my calls. Check this one out.

(BEGIN VIDEOTAPE)

SEGALL: What else do you got?

RITTER: Well, how about a voice call?

SEGALL: Let's call.

Hi, Andrew, how are you?

I'm good, I'm good.

RITTER: Now I will play it back for you.

SEGALL: Hi, Andrew. How are you?

UNIDENTIFIED MALE: I'm great. How are you, Laurie?

(END VIDEOTAPE)

ROMANS: Whoa.

SEGALL: You could be walking down the street, call a family member and someone could actually record that conversation, very eye-opening. And that's just because this flaw has existed for years. So people could have been able to do this. Now, the last one I will show you, think how often do you send texts or picture messages? Quite a bit to friends and family. They were able to intercept the actual picture I sent to someone before it even landed on their phone. Check this one out.

(BEGIN VIDEOTAPE)

SEGALL: You can also see pictures if I text someone a picture, right?

RITTER: Yes. Let's do a picture message.

SEGALL: All right.

RITTER: So your phone used your data connection to send a picture message. We intercepted the data connection, logged it and grabbed the picture out of it. Showed it on the screen.

(END VIDEOTAPE)

ROMANS: So, Laurie, what does Verizon say about this?

SEGALL: They issued a statement. They said this was fixed. Let me read you what they said.

They said, "The demonstration CNN saw was for an identified issue that was fixed earlier this year on all network extender devices."

They went on to say that "The fix prevents the network extender from being compromised in the same manner."

And they also said, "There were no reports of any customer impact."

So if you do have one, all I can say is make sure to update your software.

ROMANS: All right, thanks, Laurie.

All right, another week, another record for stocks. Did you miss your chance to run with the bulls? We'll take a look, next.

(MUSIC PLAYING)

(COMMERCIAL BREAK)

ROMANS: All right, another week, another record high for stocks. But are you missing out? I'm Christine Romans. This is YOUR MONEY.

(BEGIN VIDEO CLIP)

ROMANS (voice-over): Did you miss your chance to run with the bulls? Not those bulls. I'm talking about the bull run in your investments -- 20 percent. That's how much U.S. stocks have climbed this year.

A 20 percent gain in any other aspect of your life would certainly get your attention, your weight, your paycheck, your gas prices. But your stock portfolio, perhaps the only way to build wealth in America right now, is on fire.

But that's only if you're invested. The problem is, half of the country is not invested in the stock market. Maybe you're still scared that the bulls are going to gore you. That's what the last recession felt like.

Plus, good-paying jobs are scarce, wages are stagnant, so as for money to invest, it's are hard to find, I know.

But what if you had $1 million?

UNIDENTIFIED MALE: I would put all of it into one stock. That would probably make me consider to invest more aggressively.

UNIDENTIFIED MALE: (Inaudible). It's too risky.

UNIDENTIFIED MALE: I don't really follow it, so I don't know what's going on.

UNIDENTIFIED MALE: I wouldn't invest in the stock market. It doesn't -- they don't -- I don't feel secure in the stock market in the United States.

UNIDENTIFIED FEMALE: I'd keep my money under my mattress.

(END VIDEO CLIP)

ROMANS: Under your mattress? Now most of us don't have $1 million to invest unless you have high credit card debt or other high interest payments keeping you down, you probably have some money -- some money you could put to work.

But investment advice is like medical advice. It has to be tailored to your needs.

Keith McCullough is a money manager and a friend of the show.

Keith, what are your clients asking you right now? Are they scared? Are they like -- let's use another metaphor, kids with a bowl of jelly beans who just can't stop eating right now?

KEITH MCCULLOUGH, CEO, HEDGEYE RISK MANAGEMENT: Well, the reality is that the base of answers that you just had there is quite representative of the institutional base of investors, too. People are still scared, which is precisely why the stock market keeps going up. People are kind of fighting last year's war.

And I think you made another great point, which is if your weight was up 20 percent, you would definitely have some issues with that. But in this case the stock market is up 20 percent, and for the right reasons. Jobless claims -- surprise -- on the downside this week. We have a stock market that's on fire.

And again, in terms of real economic advice or advice for your portfolio, you have to get out of bonds. That's another thing that people need to be paying attention to. You sell bonds because growth is rising, and that's something where people should not lose money. Rule number one, don't lose money.

ROMANS: Well, that's your takeaway, then. So many people have asked me this week, what should I do with my 401(k)? I'm up 11 percent; I'm up 13 percent this year. Your takeaway is the end of the world trades like gold and bonds, people should be scaling back their bond exposure. That's what you're telling people.

MCCULLOUGH: Yes, we've actually told people to sell their entire bond exposure. So, again, I think that's the biggest risk by far. So again, if the biggest risk is, perversely, growth, which is kind of an interesting fear, but again it's fear itself.

So if you're really scared, you're buying gold and you're losing money, you're down about 25 percent. You're long bonds and you're losing money, I think you got to get out of that stuff. If you want to be long growth, you get long growth, which is sell bonds.

ROMANS: All right.

Annie Lowrey, we just got some free financial advice from Keith McCullough there.

Annie Lowrey is an economic policy reporter for "The New York Times."

And Annie, something interesting I found this week. Ben Bernanke talking about how Congress is holding back growth. The first thing he said in his testimony this week was that Congress is holding back growth. Congress facing all these roadblocks you can see on your screen, passing a budget, dealing with more forced budget cuts, the debt ceiling, immigration, all of these things that the Congress has to deal with.

Will we get progress on all these fronts? Will Congress get out of the way and not be a roadblock at some point?

ANNIE LOWREY, ECONOMIC POLICY REPORTER, "THE NEW YORK TIMES": Well, at this point, it seems very unlikely that they are going to do this trillion dollars in cuts known as sequestration, about $85 billion of which are hitting this year, and then they're going to keep on for the next decade. And so it seems that there isn't a lot of motivation on the part of Congress to get rid of those.

But we do, we have to raise the debt ceiling this fall, probably right around Halloween, and it seems like that might be a trigger to get Congress to take care some of these other issues. There's been some folks who have wanted to do tax reform, some folks who have wanted to start on Fannie and Freddie.

And right now Congress is just really stymied and not a lot is getting through. They started (inaudible) on immigration and that's kind of stalled out. So they have to act with the debt ceiling, and the hope is that that will kind of spur them forward to get past this, the lack of momentum that they've had.

ROMANS: The Fed chief Bernanke, Annie, this week said that the plan to pull back on stimulus is dependent on the economic recovery. Does that scare policymakers in Washington who have the wind of the stock market at their backs at this point?

LOWREY: Yes, it hasn't thus far. Ben Bernanke has said this before. He's said that the Fed is pushing on the accelerator as much as it can, it's buying all of these assets. It's desperately trying to get investors to invest.

And the economy is looking a little better, but not much. The growth is fine, it's not great, it's not going to bring the employment down really, really fast. And so Ben Bernanke wants Congress to do more.

But they've been recalcitrant, they haven't listened to him. So it seems unlikely that Congress is going to go on a spending spree any time soon. And deficits remain somewhat high because of where we are in the cyclical recovery.

ROMANS: So Keith, let me ask you, with all of these, I guess, macro and global issues, should people be more worried about when to get out of this dream run or how to get in if they're not in already? It's a really interesting time to be talking about your position in the stock market and in these big asset classes.

MCCULLOUGH: Yes, and the reality is that people are along two big asset classes, stocks and bonds. So you get out of bonds and you have to be buying these pullbacks in stocks. I like to buy them on 3 percent to 6 percent pullback. So again if you missed it, you missed it. You got to get over it and get on with your life.

At the end of the day, if you go back to what Bernanke is really doing here, I think it's really to a degree, it's fear-mongering itself. And I think that Washington is actually scared of growth.

For him to blame policymakers, that's -- you know, if he just got out of the way and got on with it, if the tapering got on with it, you know, what would happen? The dollar would strengthen, interest rates would rise just like we saw in the 1980s, just like we saw in the 1990s and everyone wouldn't spend their day just being worried.

I think that that's like a real top-down, central planning issue that we need to get rid of, we need to get confident, and we really need to let markets clear.

ROMANS: All right. Keith McCullough, Annie Lowrey, thanks for both of your perspectives this weekend. See you guys soon.

All right. What else happened this week that matters to YOUR MONEY? Give me 90 seconds on the clock. It's money time.

(BEGIN VIDEO CLIP)

ROMANS (voice-over): Corporations are sitting on record piles of cash, but don't expect to see it in your paycheck next year. Employees can expect raises of just under 3 percent.

According to a new study, the hardest working country in the world is Mexico, followed by Chile and Korea. Mexican workers log about 500 more hours of work a year than the typical American worker for a fifth of the pay.

McDonald's employees may want a side of fries, but they told the company hold the advice. The fast food giant angered its workers by offering a financial guide. The guide advised getting a second job, offered no budget for food, and allocated just $20 a month for health care.

Further evidence of the stock market boom -- five years after the Wall Street meltdown, IRA balances are at a five-year high. The average kitty, now more than $81,000, up 53 percent since 2008.

The agency set up to protect consumers in the wake of that financial crisis, it's finally getting a leader. Congressional Republicans stood in the way of Elizabeth Warren's brainchild, the Consumer Financial Protection Bureau, for years.

UNIDENTIFIED MALE: This is not the case.

ROMANS (voice-over): So she beat them and joined them by winning a Senate seat in Massachusetts.

And this week Richard Cordray was finally confirmed by that same Senate as the agency's first director.

And remember Skechers Shape-Ups? Now the company has to pay up. Skechers is dishing out $40 million for falsely advertising those shoes would tone your booty.

(END VIDEO CLIP)

ROMANS: All right. Coming up, buying, selling or pawning, this guy's negotiating skills are hardcore.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I'll give you the whole package, everything including two chain saws, four nail guns, the golf clubs and a crowbar, 800 bucks altogether.

UNIDENTIFIED MALE: Sounds good.

UNIDENTIFIED MALE: Thank you very much. I'll have my guys write you up.

(END VIDEO CLIP)

ROMANS (voice-over): Les Gold from "Hardcore Pawn" teaches me how to get a deal. That's coming up right after the break.

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ROMANS: For some the way to easiest way to make a buck is to sell their stuff. And this guy is ready to talk numbers if you've got something he wants. (BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: It's a old liquor bottle, some old albums, stamp book.

Don't you think this is worth something?

LES GOLD, AUTHOR, "FOR WHAT IT'S WORTH": No. A whole lot of nothing.

UNIDENTIFIED FEMALE: I told you it wasn't worth nothing.

UNIDENTIFIED FEMALE: You need to watch your trap, because this was everything to me.

UNIDENTIFIED FEMALE: It don't matter. They don't want it.

(END VIDEO CLIP)

ROMANS: It's only worth what someone will pay for it. Others stand a better chance at big money.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I have got a compass here. My mother has a friend who gave her this early century compass.

GOLD: How much would you really take for this thing?

UNIDENTIFIED MALE: $150?

GOLD: OK. How did you come up with that number?

UNIDENTIFIED MALE: Well, I don't believe there are a great many out there.

GOLD: Let me go see. Back in a second.

(END VIDEO CLIP)

ROMANS: How much is that thing worth?

GOLD: $30.

ROMANS: $30, wow. All right.

Les Gold is star of "Hardcore Pawn" on our sister network truTV. His new book is called "For What it's Worth: Business Wisdom From A Pawnbroker."

Welcome to the program.

You know, I watch, you know, the dollar stores, the pawn stores, these are economic indicators. Been watching them for an awful long time, but there's a lot more to learn from that than just sort of what's going on in the economy, it's how to do business, how to negotiate, how to be a good negotiator. What's the number one rule?

GOLD: Be a good negotiator.

ROMANS: How?

GOLD: It's very simple. Three easy steps -- emotion. When you're selling something, bring the emotion out to the buyer. When you're the buyer, have no emotion, because you're going to pay too much. Know your bottom line and know when to walk away. And that's in any kind of deal.

ROMANS: You also say to everyone, no matter what your job is, so you're not a pawnbroker, you're not a TV anchor, you must know how to sell.

GOLD: Well, you need to know how to negotiate, whether you're a seller or buyer, it's all the same thing. Just you're sitting on a different side of the desk.

ROMANS: How do you remove the emotion from the situation? Like the woman in that clip. This means something to me, you're telling me it's worth nothing. How do you remove the emotion?

GOLD: I'm emotionless. When I -- when people come in, they try to get all the emotion out of me. They try to make me believe I want to buy it. I have to look at it as a business perspective. I have 50 employees. They need to get paid. We need to pay the light bill, we need to pay the rent. So every deal that I make is strictly a business decision.

ROMANS: OK. Imagine if you work for Les Gold and you're try to go in to ask for a raise. You're coming to ask for a raise from a guy who knows how to negotiate better than anybody else.

So for me, for everybody else out there, I'm trying to negotiate a raise at work.

What's your advice for people who are ready to ask for a raise, how to do it?

GOLD: Go in with a number. Don't depend on your boss to give you the number. If you're making $15 an hour, go in saying, I should get $16.

ROMANS: And shoot higher than you think you're worth?

GOLD: Well, that's a decision you have to make. But give the reasons why you want the raise. I'm a better employee. I've done X and Y because all --

(CROSSTALK)

ROMANS: Bring evidence. I've grown sales.

GOLD: Bring evidence.

ROMANS: (Inaudible) great sales.

GOLD: Exactly right. Make sure that you have bullet points. Tell the employer why you should get that raise. Don't depend on him to make that decision for you.

ROMANS: Do you think men and women negotiate differently? I mean, you have a daughter and a son who work with you.

Do you think women are not as good negotiators as men?

GOLD: I do not.

ROMANS: Why?

GOLD: I think that women are just as good as men, they just have to believe. You've watched the show. Watch Ashley. Ashley learned from a great professional -- me. So she knows exactly how to negotiate. That's the key. It doesn't matter, male, female, it makes no difference.

ROMANS: I think women feel like they're going to come off brassy or aggressive if they go in and say this is what I'm worth. And when you look at the statistics it's clear, men are more likely to ask for more money from their first job than women are.

And in my book I even say, over the course of a career, a woman can make half a million dollars less because at the first job she didn't have the confidence to know she could ask for a raise at the first job.

GOLD: That's what you just said, they don't have the confidence. It doesn't matter, male or female, you must have confidence. You have to believe. And in my book, I talk about believing in yourself, making sure that you understand how important you are.

I talk about my janitor. Here's a guy that works for me, came to me homeless. He wanted $20 for a bracelet, I gave him $200. It was one of those things. I gave him a job the next day. This guy cleans the bathrooms and is so proud of the way he does it. And that's what you have to do as an employee, give 110 percent, not just 100.

ROMANS: Your stores in Detroit, we know that Detroit is just having hard times economically, I mean, the city itself.

You travel around the country a bit. What are you seeing out there? What are you seeing about how people are feeling? When they come to you, I mean, they come to you because they need money, because they're, in some cases, in pretty dire straits.

GOLD: Not necessarily. People come to me because they want great deals. They're smart, and that's the key. You want to go to where the deals are the greatest. Come to Detroit, come to American Jewelry and Loan, or go to your local pawn shop. That's where you're going to get great deals.

But as I travel around, the economy is slowly getting better.

ROMANS: You do think it's getting better.

GOLD: I think it's getting better, and I say that because my loan line is getting shorter. My redemption line is getting longer. Retail sales are still empty. But because the price of gold has gone down, it makes it a more viable option for people to buy.

When gold was $1,500 or $1,800, it was very difficult to sell retail because scrap prices were so high.

ROMANS: So you're worth a little less today than you were -- I'm looking at you; you're worth a little less today than you were a few weeks ago.

GOLD: Yes, but I'm always Les Gold.

(LAUGHTER)

(END VIDEOTAPE)

ROMANS: Les and I hit the streets of New York for a lesson in hardcore negotiating. You can visit the blog, YOUR MONEY blog page at CNN.com/YOURMONEY. Watch Les show me how to get the best price for a bracelet. I learned a lot.

Up next, less is more for a growing number of beachgoers. That's right. The Speedo has lots of fans, but not everyone is taking the plunge. We'll tell you who is still holding out.

(COMMERCIAL BREAK)

ROMANS: With summer temperatures hitting sweltering highs, many Americans are heading to the beach. Expedia has released its annual Flip-Flop Survey. Think of it as the best and the worst of the beach, according to beachgoers. Whether it's Speedos, skinny dipping or sand castles, different countries have very different ideas of what's fun at the shore. Here's our Richard Quest.

(BEGIN VIDEOTAPE)

RICHARD QUEST, CNN CORRESPONDENT: The Flip-Flop Survey is a fascinating account of how we all like to spend our holidays. And what a diverse lot we are -- 17 percent of Germans have gone nude on the beach, a number that's up from last year, while 34 percent of Norwegians find something skimpy like the Speedos quite acceptable.

Other countries, like the French, are also partial to something like this, whilst most other countries, particularly the Americans, want something more robust with gusseting. Ninety percent of Germans love to swim, and 52 percent of Indians, well, they like to make sandcastles.

When it comes to our fears on holiday, 54 percent of Americans fear that their wallet will be stolen, 85 percent of Singaporeans fear sharks, while some fear drowning. Put it all together with fears and skimpy Speedos, it's quite amazing that anybody ever manages to have a break -- Richard Quest, CNN, on the beach.

(END VIDEOTAPE)

ROMANS: We're here every Saturday, 2:00 pm Eastern, Sunday at 3:00. Until then, find me online. That's it for me.

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