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Origins & Impacts of Abu Gharib; Photography Trumps TV; Olsen Twins to Turn 18
Aired May 08, 2004 - 12:59 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
JACK CAFFERTY, CNN ANCHOR: Coming up on IN THE MONEY, placing the blame. We'll find out how the U.S. military justice machine works as we check the fallout from the Iraq prison abuse scandal.
Plus, how a little point and shoot can rock the world. Those still pictures from Baghdad show that still photos haven't lost any of their impact, even in the age of television. We're going to tell you why.
And twin is in. The Olsen sisters are turning 18 and will take control with a billion, with a "B," dollar company. Find out how they earned the big bucks by going straight to video.
All that and more right after this quick check of the headlines.
FREDRICKA WHITFIELD, CNN ANCHOR: And here are the headlines. The new commander of detention operations in Iraq says the U.S. military will continue to operate the Abu Ghraib Prison. Major General Jeffrey Miller is blaming the facility's former leadership for the abuse of Iraqi prisoners. Some U.S. lawmakers have called for Abu Ghraib to be closed. Miller says a probe into the abuses is under way.
Overnight in Afghanistan, a U.S. Marine was killed during a gun battle north of Kandahar. Another Marine was wounded. He's been airlifted to Germany. Marines from the 27th Expeditionary Unit were on patrol in the unstable area when they came under attack. Two of the rebels were killed.
I'm Fredricka Whitfield. IN THE MONEY begins right now.
CAFFERTY: Welcome to IN THE MONEY. I'm Jack Cafferty. Coming up on today's program, yanking the chain of command, I like that line. Donald Rumsfeld's taking heat for alleged prisoner abuse in Iraq and somebody eventually going to pay. See how the military will decide who's accountable and settle on the punishment.
Plus, moving stills, TV's the 500-pound gorilla in the media circus, but still photographs are still able to pack a huge punch, particularly on a subject like Iraq. We'll show you why the right image can change a lot of minds.
And 17 and counting, the Olsen twins built an entertainment empire selling homemade eye candy. As they head for their eighteenth birthday, find out how much they're worth. Here's a hint. It is a ton of money. Joining me today, my IN THE MONEY colleagues, CNN correspondent Susan Lisovicz, "Fortune" magazine editor-at-large Andy Serwer. Well, the jobs report on Friday, not to, you know, politicize everything, but it has to be a breath of fresh air for the White House in a week when they were just buried under this Iraq prisoner scandal, big jobs number.
ANDY SERWER, EDITOR-AT-LARGE, "FORTUNE": Two hundred eighty- eight thousand jobs created in the month. And then you go back to two months at 600,000, three months, 700,000. The jobless recovery is over. It holds true to form, Susan, that the recovery in jobs happens a little bit later, after the economy itself picks up. I have to laugh a little bit, though, because the same people who derided President Bush, i.e., the Democrats, to me sound just as foolish as the White House for taking the credit for the job growth. I mean, these are cycles. They happen. And they're outside of political control, I think.
SUSAN LISOVICZ, CNN FINANCIAL NEWS CORRESPONDENT: The jobs report, Andy, as you know, came three days after the Federal Reserve made its decision on interest rates, which was to hold put. But Alan Greenspan and company said, well, we're going to take a measured approach. It seems a given now that it might be sooner, the higher rates. What will that do to corporate spending and consumer spending, especially in the housing market which has been on fire? And then you have oil prices by the way...
SERWER: See, I think these higher interest rates...
LISOVICZ: ... $40 a barrel.
SERWER: ...are going to be a big deal, we're at 46-year lows on interest rates. Everyone knows that. I think we're at a turning point that rates are going to be going higher for years now, maybe not so much that they will really stifle the economy, but it's just an inflection point as the dismal scientists call it.
CAFFERTY: Of course, the bond market's been getting stepped on pretty good with specter rising rates on the horizon, so it's been tough for bond investors. All right, all part of, as Andy says, the cycle.
With these days of whiz-bang satellite TVs, it's easy forget that a few simple snapshots can still shake up the world. It happened this week, those photographs allegedly showing U.S. soldiers abusing Iraqi prisoners. It's tough to figure out exactly who's headed for the woodshed over this. So we brought in some help. For a look at how the military justice system works, we're joined from Richmond, Virginia, by Scott Silliman, who is a law professor at Duke University, and a former Air Force attorney.
Scott, nice to have you with us. Thanks for joining us.
SCOTT SILLIMAN, FORMER AIR FORCE ATTY.: Good morning, it's my pleasure to be with you. CAFFERTY: As I understand this story, it began to develop last fall and investigations were undertaken as early as January, as long ago as March 20 these reports, complete with these photographs, that have circled the world, were wrapped up and in commanders' hands. We, the public, didn't find out about it until "60 Minutes" and Sy Hersh in the "New Yorker" magazine broke the story. Given your knowledge of how the military works, give me your take on what the story is really all about.
SILLIMAN: Well, it's a very, very bad story, and I'm afraid it's going to get worse before it gets better. With regard to why we didn't find out about it, again, because it was so bad a story, as it was working its way up through the channels of command, I think a lot of people were worried about how to deal with it, how we were going to remedy these situations and damage control.
So it doesn't surprise me that this was not given to the press until basically it was leaked. As your viewers know, chairman of the joint chiefs, Dick Myers, went to "60 Minutes II," asked them to hold off on the story, they did for a couple of weeks and then finally went with it when they found out it was going to be in the print media.
CAFFERTY: The real tough question though is not maybe why it wasn't given to the public, apparently it wasn't given to the secretary of defense, and apparently the president of the United States didn't know anything about it. That's almost unbelievable if you have the kinds of things going on in Abu Ghraib Prison that we saw in these pictures. How does it not get all the way up the chain of command? How does the secretary of defense not know, how does the president not know?
SILLIMAN: Well, I think part of the answer to that, not all of it, but part of the answer is the military culture, that you try to invest responsibility at the lowest possible levels. In other words, if you've got a low-level commander who sees a problem within his command, and he has the capability to fix it, you let him do it before you elevate it too high.
Now the problem in this case is, this was such a bad problem, so widespread, that hindsight would obviously indicate somebody should have booted a copy of that report all the way up to the Pentagon. Rumsfeld obviously I think should have told the president. The president has said that to him.
And now, of course, we're looking back as far as how it should have been done. But I think the real problem here, and it's going to impact many different aspects of our relations internationally, is that our credibility is really blown. We could not have done anything worse to those detainees than displaying them publicly nude, which is anathema to the Arab culture.
SERWER: Scott, spin this forward for us a little bit and tell us how will justice be served? What is the process in the military right now?
SILLIMAN: Right now, we've already got charges going forward to trial in at least one case, probably three, with three other soldiers under investigation. That's the criminal trial aspect under the Uniform Code of Military Justice. The charges are undoubtedly not war crimes, but cruelty and maltreatment of prisoners and some indecent acts. The indecent acts would carry a maximum of five years per count. Cruelty or maltreatment would carry a maximum of one year per count. So we're talking about some very serious offenses.
Now that's the military side. The chain of command above those soldiers on the military side, we've already heard about some administrative rebukes, General Karpinski's folks in that channel of command. Now just because they've already been administratively rebuked does not mean that they cannot be later charged with criminal activity if facts come out to justify that. That's the uniform for us.
There is a way to deal with civilian contractors, U.S. nationals overseas not within the military, they're not subject to the military code, but there is jurisdiction under two separate statutes to prosecute them in our federal courts here in this country.
LISOVICZ: Scott, human rights activists have been howling for years about the treatment of prisoners, for instance, the long detention at Guantanamo Bay, those prisoners were from Afghanistan which had clear links to al Qaeda. This was part of a process to elicit information allegedly from prisoners in Iraq, which hasn't had clear ties, or at least not yet, to al Qaeda. What possibly could the information these soldiers be looking for?
SILLIMAN: Well, that's a good question, Susan. And I'm not sure I can answer that. I think the problem is that there was such a hunger and a thirst to get information, either as far as the whereabouts of Osama bin Laden, or about to defer some future terrorist attack on U.S. interests overseas, or even in this country, that that was the driving force.
Now, remember that in that prison cell, you had a mixture of people. You had the uniformed military, the prison guards, you had civilian contractors, and I have a strong suspicion you also had some CIA employees. It's a different mix. It's a unique mix. The channel of command as far as who is answerable to who was very mixed, very ambiguous, and I think that's something that when all the dust settles, we're going to have to take a hard look at as far as why that happened, and how it should never happen again.
SERWER: How common is this, though, Scott? What do you think in terms of this going on in the military, in the United States, and certainly in other armed forces around the world?
SILLIMAN: Well, I think as far as the United States is concerned, remember that when Secretary Don Rumsfeld came in with the administration, the first thing he talked about was reforming the military. And part of that program was to take what had been traditionally uniformed support positions: cooks, accountants, even lawyers, and privatize them. Move them out into the DOD civilian sector or private contractor sector, take those billets, those uniform billets, and turn those into the trigger pullers. That allows you, according to the secretary, not to have to go to Congress to increase troop strength, and theoretically you've got civilians doing those non-critical functions. That program was never really tested until we got into Iraq. And I think we're seeing some of the problems with it now.
CAFFERTY: Yes. There's a growing body of evidence that might not be the greatest idea we ever came up with. Scott, thank you for joining us, I appreciate it. Scott Silliman is former Air Force attorney, law professor at Duke University. Have a good one.
We're just getting started here on IN THE MONEY. Coming up as we continue, TV rocks, but photos rule. The images firing up debate from Iraq didn't come from television. See why the still picture never lost its power to change the public's mind.
Also ahead, the king of the can-can, as Coke names a new CEO, find out if Wall Street thinks the company is ready for a renaissance..
And fear of falling, a big terrorist attack can throw your stock portfolio right into a tailspin. We'll look at how to keep your investments out of potential terrorist trouble, stay with us.
(COMMERCIAL BREAK)
CAFFERTY: The saying goes that a picture's worth a thousand words. Well, this week we might add to that, perhaps a thousand steps backward for U.S. policy in Iraq. Those pictures of U.S. Army personnel allegedly abusing Iraqi prisoners have inflamed the international community and shocked people across this country. And what we've learned, among other things, is that despite the popularity of television and videotape, good old-fashioned still photographs still have tremendous power to influence us all. Joining us to talk about this is Steve McCurry. He's an award winning photographer who has been in war zones all over the world. Very nice to have you with us, thanks for joining us.
STEVE MCCURRY, PHOTOGRAPHER: Thank you.
CAFFERTY: What is it about the power of a still photograph? We can get off on a live satellite right this very minute if news events dictate and bring you events as they're unfolding from anywhere in the world. Those images, though, remain fleeting in many cases, while the power of a single still picture can last for decades. Tell me about that.
MCCURRY: Well, I think a still image just sits there and stares back at you. You'll see it on a magazine, a newspaper. I can think of two instances where there was a cameraman and a still photographer shooting the exact same instance: Mount Suribachi, Iwo Jima; Joe Rosenthal's classic picture of the soldiers planting that flag. There was a cameraman filming that, and yet the picture that has seared into our psyche is the still picture.
There was also a cameraman and a photographer at that incredible execution in the streets of Saigon where the gun is pointed at the -- and the soldier is killed. And the picture, again, which stays in our memory is the still photograph.
You know, this picture of the Iraqi prisoner standing on that crate, hooded, with these electrodes coming out of his fingers, is going to be a picture which is going to run in literally tens of thousands of newspapers all over the world, all over the Arab world, all over India, you know, China. It's going to be a picture which even small villages where they don't have television, this picture's going to be picked up everywhere. And I think that this picture's going to haunt us for generations. And I think that single image will be the icon which comes to represent in part the American war in Iraq.
LISOVICZ: And that was actually my question, Steve, because the picture that you cited of Eddie Adams, I believe, the AP photographer who caught that on the streets of Saigon, really sort of reinforced the public opposition to the war, as well as the other one that sort of seared through everyone's memory was the little girl fleeing her village from the horrific effects of napalm. And that really sort of reinforced, again, the opposition to the war. Here we are 30-some years later. And there is growing concern about what we're doing in Iraq. Do you think that these photos, these terrible photos have the power to do the same thing?
MCCURRY: Absolutely. I can remember working a newspaper in Philadelphia, watching that picture of that little girl running on the street, Highway 1, covered, you know, crying, this excruciating expression on her face. And immediately thinking, this is definitely going to run on page one all over the world, which it did, and in many ways, turned public opinion -- continued to turn public opinion against that war.
I just think it's -- that picture just sits there and stares back at you. It gives you time to sort of have a relationship with it. And there's some kind of a chord it strikes, some kind of an emotional chord it strikes in people's psyche, which it just doesn't let go. And it just -- will just kind of stare in our memory. And when we think back of a war like Vietnam, this picture, Eddie Adams' picture, My Lai, these are huge. And the impact is just enormous.
SERWER: But one thing, Steve, about that, I remember the video of that execution in Vietnam. And the problem there is, it's unwatchable. It's too graphic. It's too disturbing. In a way, these pictures, I don't want to take away from their power, but they're a little less disturbing. Although pictures are getting more and more graphic, I think. This is up to a news editor. I'm thinking about "The New York Times" running those pictures of our servicemen strung up on the bridge. Can you talk about that a little bit? Are we using more and more graphic still images?
MCCURRY: Well, I'm not sure about that. I think that the fact that you can freeze a moment in time, that the execution on the streets of Saigon, the video clip goes by so quickly, but that still image was the decisive moment, the exact instant of when this soldier was killed. And it just stays there and it doesn't go away. I think that this kind of, you know, critical moment which just sits there is just something which has such an enormous impact. CAFFERTY: Before we let you go, I want to put up one of the famous pictures you took. That's of the afghan girl that appeared on the cover of "National Geographic" magazine. Tell our viewers a little bit about that shot.
MCCURRY: This little refugee girl, which I photographed in a camp back in 1984 and ended up on the cover of "National Geographic," she actually became the kind of the symbolizer (ph), represent all Afghan refugees at that point in time. And I think there was a hope and a resilience and a fortitude that came through in her expression, which we got thousands of letters from all over the world, people that wanted to help her and donate money to her family, and people actually went and volunteered to work in the refugee camps based on that picture. So in a way, it was a very positive iconic picture, which in a way was very representative of that point in time.
CAFFERTY: Powerful stuff. Steve McCurry, thank you for being with us on IN THE MONEY. It's nice to have you here.
MCCURRY: Thank you very much.
CAFFERTY: OK. Coming up next as we continue the search for Classic Coke, Wall Street's wondering if the new CEO can put fizz back in that company. We'll take a look at the stock. It's our "Stock of the Week."
And later, bulletproof your portfolio, see how the threat of extremist violence can mess with your investments big time, and find out what you can do about it.
Plus, peak twins, as opposed to "Twin Peaks" you see.
SERWER: Yes.
CAFFERTY: You got that. The Olsens have a new movie out and a big birthday ahead. Find out what they're worth, hint, it's a ton, as their media empire comes of age. Back after this.
(COMMERCIAL BREAK)
LISOVICZ: Now let's look at the week's top stories in our "Money Minute." Alan Greenspan and company kept short-term interest rates the same, but they hinted rate hikes are on the way. That's because the central bank believes the economy is recovering and inflation is now a growing concern.
The wife of former Enron Chief Financial Officer Andrew Fastow has pleaded guilty to tax fraud and has been sentenced to a year in prison, the maximum. A federal judge rejected Lea Fastow's first attempt at a guilty plea last month when he balked at the light five- month sentence recommendation from prosecutors. Andrew Fastow pleaded guilty to other charges and will serve a 10-year prison term when he finishes cooperating with prosecutors.
And less than three weeks after McDonald's CEO Jim Cantalupo died of a heart attack, his successor underwent surgery for colon cancer. Forty-three-year-old Charlie Bell is reportedly recovering well and should be back on the job soon. McDonald's says Bell's illness had not been diagnosed when he took the top job.
SERWER: All right. There was a change at the top of another top American company this week. Coca-Cola tapped E. Neville Isdell, an Irishman, as its new CEO. But my colleagues at "Fortune" reported that the soft drink giant was in talks with former GE Chairman Jack Welch for the top spot before the deal broke down.
Coke shares are up about 35 percent since last year. But in this fragmented drink market, can Coca-Cola ever regain its dominance. That makes Coke our "Stock of the Week."
And you know, guys, over the past five years or so, it's really been a tough ride for Coke. They had problems in Europe with tampering. They've had slow sales here. They had discrimination suits, whistleblowers saying they've got accounting problems. The company says keeps saying isolated event, isolated event, isolated event. But Wall Street's not buying it, because the stock has really not gone anywhere for a while. You wonder, can they turn this around?
LISOVICZ: Well, certainly, the new CEO, Mr. Isdell has been a veteran of the company, has worked for the company three decades or so. I find it interesting actually we're talking about McDonald's and Coke, two of the leading consumer products companies. Both have non- Americans now at the post, Charlie Bell is an Australia and Mr. Isdell is an Irish citizen.
But not only that, now that you have someone who has taken this job, he was considered an outside candidate in some ways. Steven Heyer was passed up for the job, the COO. Some analysts say he surely will leave and he will take people with him, so more turmoil at the company.
CAFFERTY: They've also had some trouble finding someone to fill this job. That doesn't speak too well about whatever's going on at the company, if nobody wants to go in and take over this thing, does it?
SERWER: Well, I don't think it does. And a lot of people are complaining that Isdell is a consummate insider. What this company doesn't need is more people steeped in its ways. The board is very powerful here. You've got Warren Buffett and Don Keough, people who have been associated with the company for year after year. And you've got to feel that, you know, the company that has the buzz right now is Pepsi. And it has not been that way for a long, long time. I mean, name Coke's new ad campaign. You can't really name it. The hot young people are associated with Pepsi. I really think eventually they're going to have to go outside to really get this thing going.
LISOVICZ: Well, and that's what they were doing. And how does it -- to speak to Jack Welch on his wedding day, what would Emily Post say about that? Speaking of names...
CAFFERTY: You can always the guys that have been married before, they're doing a deal during the wedding, saying, I'll call you right back.
LISOVICZ: And on the honeymoon, he was still talking with them.
SERWER: That's Jack Welch. Well, we'll have to see how Mr. Isdell does.
Coming up on IN THE MONEY, terrorism and your investments, with the U.S. in the crosshairs of Islamic terror groups, find out how to keep your money out of harm's way.
And they're almost 18, and that means the Olsen sisters, twins even, are about to get complete control of one of the biggest fortunes in show business. We'll find out -- there they go, we'll find out how they got so popular and so powerful.
(COMMERCIAL BREAK)
WHITFIELD: Hello, I'm Fredricka Whitfield at the CNN in Atlanta. IN THE MONEY continues after a look at these top stories. President Bush is again expressing his outrage over the abuse of Iraqi prisoners. In his weekly radio address today, the president said several investigations are under way to get a handle on the prison operations in Iraq.
(BEGIN AUDIO CLIP)
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: In recent days, America and the world have learned of shocking conduct in Iraqi prisons by a small number of American servicemen and women. These individuals had been given the responsibility of overseeing Iraqis in American custody, and in doing so, in a decent and humane manner consistent with U.S. law and the Geneva Conventions. Instead, we have seen shameful images of prisoners being subjected to abuse and humiliation. Such practices do not reflect our values. They are a stain on our country's honor and reputation.
(END AUDIO CLIP)
WHITFIELD: Army Reservist Lynndie England has become the seventh member of the U.S. MP unit to be charged in the prisoner abuse scandal. PFC England was seen in several of the photographs smiling and pointing at naked Iraqi prisoners. She's accused of assaulting detainees on a number of occasions, and conspiring to mistreat them.
A day of heavy clashes in the southern city of Basra in Iraq: A British military spokesman says British troops exchanged gunfire with miltiamen loyal to radical Shiite cleric Muqtada al-Sadr. Two Iraqis were killed, at least five others and two British troops were wounded.
At least three people are dead after a 17-foot boat capsized in Massachusetts overnight. Rescuers are searching the Taunton River for one woman still missing. A 14-year-old boy swam to shore to get help, one of his parents is reportedly hospitalized in critical condition.
I'm Fredricka Whitfield. Now, more of IN THE MONEY. LISOVICZ: Whether you're out to make more money or simply to hold on to what you've got, terrorism counts when you're thinking about investments. That might sound callous, but in a world where they practically want to check your dental work before you fly, taking account of terrorism is just simply common sense. "TIME" magazine senior writer Dan Kadlec is here in New York with more about that.
Welcome, good to see you again.
DAN KADLEC, "TIME": Good to see you.
LISOVICZ: It's kind of an unnerving subject.
KADLEC: It's a tough one, it's a tough subject because no one likes to think this way. But, you know what got me thinking this way in particular was GE buying this little bomb detection company called InVision a few months ago. And it occurred to me, if GE is buying protection, and that's what they're doing, they're buying earnings protection by owning a company that's going to do well if the terror threat persists and if there is another strike, you know, maybe the rest of us should think this way also.
LISOVICZ: You've seen some huge jumps in some of these security firms, like TASER and Mace, no description necessary for names like that. It's almost like being back in 1999.
KADLEC: Yes. No doubt there's been a run-up in these. But there's good reason for that. The government is going to spend something like $100 billion over the next few years fighting -- with homeland security, a lot of that money is going to go the security systems. The security stocks are the ones that have had the big run- ups, although I don't think necessarily overpriced. But that's where a lot of the action is and that's what you're talking about.
SERWER: But Dan, how much do you integrate this in your overall thinking about investing. I mean, is this just a piece of it? Should this be your whole way of looking at the market now?
KADLEC: No, no, you're right. It's a small piece. You don't want to rush into -- when you invest, you never want to do anything wholesale. This is something you want to do at the margin with maybe 5 or 10 percent of your money. It's just something you want to think about it. No one's going to -- there's a lot of ways to do it, by the way. You can own some oil stocks because oil would tend to do well in turmoil.
And by the way, with China sucking up all the world's reserves, those are going to do pretty good anyway. I also think dividend stocks are a nice way to go. There's sort of an inherent safety in dividend stocks. And by the way, they've been a little bit out of favor for a while and they are coming back strong anyway. So it's not something that you do just for the terror strike or the terror potential. But you look for ways that are going to do well with or without it. But certainly would benefit at the margin.
CAFFERTY: Are there things you should stay away from, I know some people have suggested that certain municipal bonds might be something you want to look twice at?
KADLEC: Right, well, munis should be a fairly safe haven. But I think with munis what you want to think about is, don't own too many in one region. God forbid a power plant gets hit in some little community. Well, guess what, if you own munis of all the taxing authorities in that town, they're all going to get hit. So spread them out, just spread them out. It's common sense diversification.
LISOVICZ: But you know, Dan, we are seeing clear signs every week it seems that the economy is improving. Airfares, for instance, much higher. There are just no sales going on. But yet you say stay away from travel related sectors right now.
KADLEC: Not stay away, lighten up. And you're right, that -- just in the last few weeks, that has become a little bit of a different picture with the economy coming back, and travelers coming back some. I would just say, don't overdo it there. Retail, autos, airlines, hotels, don't stay away, but don't overdo it.
SERWER: You hear that, Susan, lighten up.
(LAUGHTER)
SERWER: What about plain vanilla, the defense stocks, your father's defense stocks, like Raytheon, General Dynamics, Lockheed Martin, those kind of things?
KADLEC: Yes, well, for one thing, I think those have gotten a little expensive anyway. And they're not in the same category as the security stocks that are going to get a lot of the attention. But, yes, why not own some of them. I just wouldn't overdo it, again. I think there is going to be money flowing that direction, sort of over the long term. But that's not a specific play that you want to -- that's not like the security stocks which are really where it's at.
CAFFERTY: You really have to be careful about doing your research. This TASER, for example, what's it up, 5000 percent in the last year or so?
LISOVICZ: Crazy.
SERWER: Yes.
CAFFERTY: And now the day traders are having a lot of fun just moving this stuff back and forth. You did a thing the other day on "AMERICAN MORNING," be a little careful, this is for the pros, don't go and invest your grandmother's 401(k) in this stuff. So you've got to be a little careful when you talk about the security companies, about which ones have real business models, real earnings, and a real potential to do well for them...
KADLEC: Yes. No question. I'm not even that familiar with the TASER. But that is one that I know just went crazy.
CAFFERTY: It was a moon shot. KADLEC: And there have been a few like that. But this thing like InVision that GE bought, that's a real company making real money. And there are other things like that out there: OSI Systems, Verant (ph), I think, is another one. There are a few out there, Ceradyne, you know, there's a growing number of these things out there. And they're going to benefit as the government spends money.
LISOVICZ: And you still like gold, right?
KADLEC: You know, again, at the margin, I wouldn't mind owning a little of it. I think it's a good hedge. And you do have the China story, which is good for all natural resources, the whole commodities boom going on.
LISOVICZ: But China now says that it wants to ratchet back its economy a little bit. But that's still pretty bullish, right?
KADLEC: You know, that's a really near-term thing. I'm fascinated by people saying the commodities boom is over. We've had the run, and certainly we're going to take a rest here somewhere. But over the next five to 10 years, this is an ongoing story.
SERWER: I agree with that.
CAFFERTY: Dan, good to see you as always, thanks for coming by.
KADLEC: Thank you.
CAFFERTY: Dan Kadlec, senior writer with "TIME" magazine.
Just ahead on IN THE MONEY, as we continue, they're not your ordinary child stars, a look at the Olsen twins' financial empire, see how it got that way. It's very large.
What kind of person makes those annoying computer worms, like the Sasser? Webmaster Allen Wastler will have the profile of that. Stay with us.
(COMMERCIAL BREAK)
SERWER: Mary-Kate and Ashley Olsen are about to take the reins of a billion-dollar business. But first they have to graduate from high school. The twins have been involved in the TV and film business since they were infants. Their new movie, "New York Minute" opens this weekend and is expected to be a big hit with the pre-teen crowd. Here to talk about the Olsen empire is Mark Dagostino, New York correspondent for "People" magazine.
Mark, welcome.
MARK DAGOSTINO, "PEOPLE": Thanks. Glad to be here.
SERWER: Well, for people who really aren't that familiar with the Olsen twins, talk to us about...
CAFFERTY: That would be me. SERWER: That would be Jack Cafferty and people like him, talk to us about exactly how big these girls are.
DAGOSTINO: You know, it's -- they stayed under the mainstream radar for a very long time, doing direct-to-video movies and things like that. So it's hard to believe that over the last 17 years, they've built a company that last year sold $1.2 billion in retail sales around the world.
LISOVICZ: And when you talk about that empire, as I see, that you have so thoughtfully given us a diagram of their empire, everything from backpacks to action figures, to toothpaste, thankfully they turned down the offers for Mary-Kate and Ashley Spaghettios.
DAGOSTINO: Right. They've also turned down offers to -- of tens of thousands of dollars to appear at people's birthday parties, and things like that. They could really just be making money hand over fist every single day. But they've tried to keep it classy. They've tried to do things that they're really, really involved in and excited about throughout their whole career.
CAFFERTY: When they turn 18 they'll be free to start making their own mistakes, right?
DAGOSTINO: Absolutely.
CAFFERTY: And you know with a couple of kids that have been this successful, human nature being what it is, we'll all be sitting around there, waiting for them to do something that says they're going to crash and burn. I mean, when Britney Spears lit a cigarette, the world stopped turning on its axis. What are the pitfalls out there for these kids?
DAGOSTINO: They're facing kind of tabloid media scrutiny for the first time in their lives. And there is definitely all eyes on them as they move to New York City to go to college at NYU this next year.
LISOVICZ: Page Six alert.
DAGOSTINO: Page Six alert, we're going to be getting the calls every single time they show up at a bar somewhere, you know, just like normal teens do.
CAFFERTY: You know, but if you're 18 and have a billion dollars, maybe it's poetic justice you have to undergo some aggravation in exchange, right? It starts when they come here to go to school I guess.
DAGOSTINO: I think so. And they know, and they're aware that people are watching them. They don't want to be role models to the world. They just want to be normal teens and be able to live their lives.
CAFFERTY: But that's just silly. They're not normal, and they're not going to be allowed to just live their lives. I mean, I love that, I just want to be a normal person. You have a billion dollars, you're 18 years old, there's nothing normal about you.
LISOVICZ: And that has come across in your dealings with them. Describe what doing an interview with these 17-year-old girls, tell us how they come across.
DAGOSTINO: It's really interesting, because they've been in the industry for so long, they're a little bit like little politicians. They speak in these terms of, you know, which one of you is the better student. You would think that's...
SERWER: Maybe they'll run for office.
DAGOSTINO: It's a simple question, right? Well, neither one of us is really better. We both have our strong points and our weak points.
SERWER: That does sound like a politician.
DAGOSTINO: You know what I mean? So they're very careful with what they say to the media, and very well trained. And it's amazing, for a couple of 17-year-old kids, because they really are kids. They're also very loose and laid back and kind of silly and they laugh with each other.
CAFFERTY: There are so many stories about kids who had very unhappy endings to their lives who were exactly at the place that these kids are at now. I don't know what the ingredient is that allows one to make it through this and go ahead and have some kind of a life of normalcy and what causes somebody to hit the wall and totally self-destruct. Do you get a sense of whether they have got the real stuff, the real goods to make the right choices and keep the compass heading constant as they move forward?
DAGOSTINO: I really think so. The parenting here seems to have been really strong from the very beginning; simple things like doing chores and being on an allowance just like their brothers and sisters. Also, they have, in Robert Thorne, the CEO of their company, an outsider...
SERWER: I love that, CEO of their company, right?
DAGOSTINO: Right. They have someone who's not a family member running their business empire.
CAFFERTY: That's probably smart.
DAGOSTINO: And I that's very, very important.
LISOVICZ: But they're at a critical stage now, not only because they're on the verge of taking over this huge empire, but because they're becoming young women. And in a way, are they trying to shed that image? I mean, you know, with this new "New York Minute" that just premiered, are they trying to sort of shed their childish image and take on a new one?
DAGOSTINO: Not shed the image so much as just grow up at the same rate that their peers are growing up. You know, what was weird with a Britney Spears or somebody is that she seemed to make this leap from being very innocent to not that innocent overnight. And it shocked a lot of people.
LISOVICZ: Yes, that would be an understatement.
DAGOSTINO: They seem to be growing at the same rate that their peers are growing. And that's what they want to present to the audience.
CAFFERTY: All right. We're going to have to leave it at that, Mark. I know I'm going to be seeing the movie over the weekend, because I have two girls who are just dying to see it. Mark Dagostino, New York correspondent for "People" magazine, thanks very much.
DAGOSTINO: Thank you.
DAGOSTINO: All right, just ahead, the Sasser virus, could be proof that the people who create viruses are going from pranksters to gangsters.
And you can tell us what's on your mind at inthemoney@cnn.com. But please don't send any viruses to us, please.
(COMMERCIAL BREAK)
CAFFERTY: Got this little computer worm called Sasser making the rounds this week, leaving about 1 million computers out of service. Worms, viruses, nothing new, but our Webmaster Allen Wastler thinks the profile of the average virus-spreading hacker could be changing.
What up with these guys?
ALLEN WASTLER, MONEY.COM: Now don't you figure that somebody who is writing viruses and worms is like some little adolescent up there that really needs to discover beer and girls?
CAFFERTY: Yes.
(LAUGHTER)
SERWER: Get a life, get a job, get real, get out of your dark room.
WASTLER: And this Sasser worm, it sort of speaks to that, because basically it doesn't need anything to get into your computer. If you're unprotected, it is going to slip in there. You don't need to open up an e-mail or anything to do that. And then all it does is reboot your computer over and over again. Your computer starts up, shuts down, starts up, shut down, just irritation for irritation's sake.
CAFFERTY: Now what's the purpose of this, what is...
SERWER: Who is... WASTLER: Well, what's happened is once that worm went out, it was followed up by a fake e-mail saying, hey, this is your Sasser patch, OK? And anybody stupid enough to open it up would get hit with the Netsky virus, and different variant of the Netsky of virus. Now in that code -- and this is where I think it might be changing a little bit, in that code was a message that basically said, ha ha, we wrote both this virus and the Sasser virus, and we're the best virus writers in the world. It was a big boast, OK? Now I talked to some experts that sort of follow this trend, and they said it's an indication of sort of like gangs building up between virus writers. This outfit likes to call itself Skynet. But apparently they're facing off with another group that claims to have written the Bagel virus and some other viruses. And so you know, you sort of get the "West Side Story" image of, "when you're a Jet, you're a Jet" you know?
(LAUGHTER)
WASTLER: And they're sort of fighting off.
SERWER: Wasn't there a catcher named Sasser for the Mets, does it have anything to do with him? Who is Sasser?
WASTLER: Sasser is actually -- it's a play off the acronym for the security hole in the Windows operating system, it's called LSASS, ah, the Sasser.
SERWER: That's why he's the Webmaster.
LISOVICZ: Do we have a profile on these hackers?
WASTLER: Well, it used to be, what we were talking about, some nerdy little kid that needs to get a life, but now they think it might be changing. Just two months ago they arrested over in Belgium a female virus writer, went by the name of Gigabyte (ph). And so they're saying, OK, well, it's spreading out from there and...
CAFFERTY: What's her name, Gigabyte?
WASTLER: She went by Gigabyte.
SERWER: A Belgian worm Gigabyte. Let's get her on the show, Jack.
WASTLER: So you've got the bratty kid. And now we see it's sort of going up into a delinquent sort of gang mentality type of thing.
LISOVICZ: Equal rights.
SERWER: Belgian worm gangs.
WASTLER: The next step is going to be more criminality type things, from brat to delinquent to criminal.
CAFFERTY: My favorite part of this program every weekend is the "Fun Site of the Week," because I don't understand a lot of the other stuff we talk about. But I can go on the fun site and get...
WASTLER: Here you go, gentlemen, you were talking about the Olsen twins? Well, that's the Olsen twins countdown clock, OK? For those of you who...
(CROSSTALK)
CAFFERTY: I take back what I said.
WASTLER: ... just want to find out when they're going to be in charge of their empire, no other motivation here at all.
SERWER: How far away is it, roughly, do you know?
WASTLER:: It's about 34 days.
SERWER: Is that right?
WASTLER: Yes.
SERWER: Not that you're really keeping close track.
WASTLER: Not that I...
(CROSSTALK)
CAFFERTY: Be still my beating heart.
LISOVICZ: And who's maintaining this site?
WASTLER: There are several...
SERWER: A guy named Jerry, isn't it? A guy named Jerry is probably...
WASTLER: ... in varying degrees of taste.
CAFFERTY: Good to see you, my friend. Thank you, as always.
Still ahead on IN THE MONEY as we continue, we're going to read some e-mails. You can tell us what you think by sending us an e-mail at inthemoney@cnn.com. Remember to keep it clean, and no more than three-syllable words because I hate having to go to the dictionary. The FCC is watching as well. Stay with us.
(COMMERCIAL BREAK)
CAFFERTY: Time now to read some of your answers to our e-mail question about how we can stop the continued outsourcing of American jobs.
David in Crescent City, California, says: "How about setting up tariffs to discourage cheap imports from entering the country? And any American company that wants to use cheap overseas labor would be subject to the same tariffs if they tried to sell their goods in America. I know it's protectionism, but is that such a bad word?" Ray in Florida wrote this: "Remember the jobs are leaving the U.S., not just because foreign labor is cheaper, but because American labor is so expensive. I'm not talking about salaries, I'm talking about all the taxation and government regulation. Tort reform would help as would more union cooperation."
And Bill out there in Montana weighed in with this: "I'm not sure I know how to stop outsourcing, but if it lowers my cable bill, I wouldn't mind if the CNN anchors spoke with a Chinese accent."
SERWER: Ooooh.
CAFFERTY: Go for that.
Here's the e-mail question for this Mother's Day weekend: Did your mom go to work or stay home when you were growing up, and how did that decision affect you?
Send us your answers at IN THE MONEY at CNN.com. And visit our show page at money.com/inthemoney where you'll find the addresses of our "Fun Site of the Week," the countdown to the Olsen twins' birthday.
SERWER: Hurray.
CAFFERTY: Thank you, in the meantime, for joining us for this edition of IN THE MONEY. That concludes our little proceeding for now. Thanks to the gang: CNN financial correspondent Susan Lisovicz, "Fortune" magazine editor-at-large Andy Serwer, Money.com managing editor Allen Wastler.
Join us tomorrow afternoon, 3:00 Eastern time when we'll put the Kerry campaign under the microscope. Despite a string of seemingly bad news for the Bush administration, Mr. Kerry doesn't appear to have made much headway in his bid to unseat the incumbent. We'll take a closer look tomorrow at 3:00, hope to see you then. Until then, thanks for today and enjoy your weekend.
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com
Aired May 8, 2004 - 12:59 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
JACK CAFFERTY, CNN ANCHOR: Coming up on IN THE MONEY, placing the blame. We'll find out how the U.S. military justice machine works as we check the fallout from the Iraq prison abuse scandal.
Plus, how a little point and shoot can rock the world. Those still pictures from Baghdad show that still photos haven't lost any of their impact, even in the age of television. We're going to tell you why.
And twin is in. The Olsen sisters are turning 18 and will take control with a billion, with a "B," dollar company. Find out how they earned the big bucks by going straight to video.
All that and more right after this quick check of the headlines.
FREDRICKA WHITFIELD, CNN ANCHOR: And here are the headlines. The new commander of detention operations in Iraq says the U.S. military will continue to operate the Abu Ghraib Prison. Major General Jeffrey Miller is blaming the facility's former leadership for the abuse of Iraqi prisoners. Some U.S. lawmakers have called for Abu Ghraib to be closed. Miller says a probe into the abuses is under way.
Overnight in Afghanistan, a U.S. Marine was killed during a gun battle north of Kandahar. Another Marine was wounded. He's been airlifted to Germany. Marines from the 27th Expeditionary Unit were on patrol in the unstable area when they came under attack. Two of the rebels were killed.
I'm Fredricka Whitfield. IN THE MONEY begins right now.
CAFFERTY: Welcome to IN THE MONEY. I'm Jack Cafferty. Coming up on today's program, yanking the chain of command, I like that line. Donald Rumsfeld's taking heat for alleged prisoner abuse in Iraq and somebody eventually going to pay. See how the military will decide who's accountable and settle on the punishment.
Plus, moving stills, TV's the 500-pound gorilla in the media circus, but still photographs are still able to pack a huge punch, particularly on a subject like Iraq. We'll show you why the right image can change a lot of minds.
And 17 and counting, the Olsen twins built an entertainment empire selling homemade eye candy. As they head for their eighteenth birthday, find out how much they're worth. Here's a hint. It is a ton of money. Joining me today, my IN THE MONEY colleagues, CNN correspondent Susan Lisovicz, "Fortune" magazine editor-at-large Andy Serwer. Well, the jobs report on Friday, not to, you know, politicize everything, but it has to be a breath of fresh air for the White House in a week when they were just buried under this Iraq prisoner scandal, big jobs number.
ANDY SERWER, EDITOR-AT-LARGE, "FORTUNE": Two hundred eighty- eight thousand jobs created in the month. And then you go back to two months at 600,000, three months, 700,000. The jobless recovery is over. It holds true to form, Susan, that the recovery in jobs happens a little bit later, after the economy itself picks up. I have to laugh a little bit, though, because the same people who derided President Bush, i.e., the Democrats, to me sound just as foolish as the White House for taking the credit for the job growth. I mean, these are cycles. They happen. And they're outside of political control, I think.
SUSAN LISOVICZ, CNN FINANCIAL NEWS CORRESPONDENT: The jobs report, Andy, as you know, came three days after the Federal Reserve made its decision on interest rates, which was to hold put. But Alan Greenspan and company said, well, we're going to take a measured approach. It seems a given now that it might be sooner, the higher rates. What will that do to corporate spending and consumer spending, especially in the housing market which has been on fire? And then you have oil prices by the way...
SERWER: See, I think these higher interest rates...
LISOVICZ: ... $40 a barrel.
SERWER: ...are going to be a big deal, we're at 46-year lows on interest rates. Everyone knows that. I think we're at a turning point that rates are going to be going higher for years now, maybe not so much that they will really stifle the economy, but it's just an inflection point as the dismal scientists call it.
CAFFERTY: Of course, the bond market's been getting stepped on pretty good with specter rising rates on the horizon, so it's been tough for bond investors. All right, all part of, as Andy says, the cycle.
With these days of whiz-bang satellite TVs, it's easy forget that a few simple snapshots can still shake up the world. It happened this week, those photographs allegedly showing U.S. soldiers abusing Iraqi prisoners. It's tough to figure out exactly who's headed for the woodshed over this. So we brought in some help. For a look at how the military justice system works, we're joined from Richmond, Virginia, by Scott Silliman, who is a law professor at Duke University, and a former Air Force attorney.
Scott, nice to have you with us. Thanks for joining us.
SCOTT SILLIMAN, FORMER AIR FORCE ATTY.: Good morning, it's my pleasure to be with you. CAFFERTY: As I understand this story, it began to develop last fall and investigations were undertaken as early as January, as long ago as March 20 these reports, complete with these photographs, that have circled the world, were wrapped up and in commanders' hands. We, the public, didn't find out about it until "60 Minutes" and Sy Hersh in the "New Yorker" magazine broke the story. Given your knowledge of how the military works, give me your take on what the story is really all about.
SILLIMAN: Well, it's a very, very bad story, and I'm afraid it's going to get worse before it gets better. With regard to why we didn't find out about it, again, because it was so bad a story, as it was working its way up through the channels of command, I think a lot of people were worried about how to deal with it, how we were going to remedy these situations and damage control.
So it doesn't surprise me that this was not given to the press until basically it was leaked. As your viewers know, chairman of the joint chiefs, Dick Myers, went to "60 Minutes II," asked them to hold off on the story, they did for a couple of weeks and then finally went with it when they found out it was going to be in the print media.
CAFFERTY: The real tough question though is not maybe why it wasn't given to the public, apparently it wasn't given to the secretary of defense, and apparently the president of the United States didn't know anything about it. That's almost unbelievable if you have the kinds of things going on in Abu Ghraib Prison that we saw in these pictures. How does it not get all the way up the chain of command? How does the secretary of defense not know, how does the president not know?
SILLIMAN: Well, I think part of the answer to that, not all of it, but part of the answer is the military culture, that you try to invest responsibility at the lowest possible levels. In other words, if you've got a low-level commander who sees a problem within his command, and he has the capability to fix it, you let him do it before you elevate it too high.
Now the problem in this case is, this was such a bad problem, so widespread, that hindsight would obviously indicate somebody should have booted a copy of that report all the way up to the Pentagon. Rumsfeld obviously I think should have told the president. The president has said that to him.
And now, of course, we're looking back as far as how it should have been done. But I think the real problem here, and it's going to impact many different aspects of our relations internationally, is that our credibility is really blown. We could not have done anything worse to those detainees than displaying them publicly nude, which is anathema to the Arab culture.
SERWER: Scott, spin this forward for us a little bit and tell us how will justice be served? What is the process in the military right now?
SILLIMAN: Right now, we've already got charges going forward to trial in at least one case, probably three, with three other soldiers under investigation. That's the criminal trial aspect under the Uniform Code of Military Justice. The charges are undoubtedly not war crimes, but cruelty and maltreatment of prisoners and some indecent acts. The indecent acts would carry a maximum of five years per count. Cruelty or maltreatment would carry a maximum of one year per count. So we're talking about some very serious offenses.
Now that's the military side. The chain of command above those soldiers on the military side, we've already heard about some administrative rebukes, General Karpinski's folks in that channel of command. Now just because they've already been administratively rebuked does not mean that they cannot be later charged with criminal activity if facts come out to justify that. That's the uniform for us.
There is a way to deal with civilian contractors, U.S. nationals overseas not within the military, they're not subject to the military code, but there is jurisdiction under two separate statutes to prosecute them in our federal courts here in this country.
LISOVICZ: Scott, human rights activists have been howling for years about the treatment of prisoners, for instance, the long detention at Guantanamo Bay, those prisoners were from Afghanistan which had clear links to al Qaeda. This was part of a process to elicit information allegedly from prisoners in Iraq, which hasn't had clear ties, or at least not yet, to al Qaeda. What possibly could the information these soldiers be looking for?
SILLIMAN: Well, that's a good question, Susan. And I'm not sure I can answer that. I think the problem is that there was such a hunger and a thirst to get information, either as far as the whereabouts of Osama bin Laden, or about to defer some future terrorist attack on U.S. interests overseas, or even in this country, that that was the driving force.
Now, remember that in that prison cell, you had a mixture of people. You had the uniformed military, the prison guards, you had civilian contractors, and I have a strong suspicion you also had some CIA employees. It's a different mix. It's a unique mix. The channel of command as far as who is answerable to who was very mixed, very ambiguous, and I think that's something that when all the dust settles, we're going to have to take a hard look at as far as why that happened, and how it should never happen again.
SERWER: How common is this, though, Scott? What do you think in terms of this going on in the military, in the United States, and certainly in other armed forces around the world?
SILLIMAN: Well, I think as far as the United States is concerned, remember that when Secretary Don Rumsfeld came in with the administration, the first thing he talked about was reforming the military. And part of that program was to take what had been traditionally uniformed support positions: cooks, accountants, even lawyers, and privatize them. Move them out into the DOD civilian sector or private contractor sector, take those billets, those uniform billets, and turn those into the trigger pullers. That allows you, according to the secretary, not to have to go to Congress to increase troop strength, and theoretically you've got civilians doing those non-critical functions. That program was never really tested until we got into Iraq. And I think we're seeing some of the problems with it now.
CAFFERTY: Yes. There's a growing body of evidence that might not be the greatest idea we ever came up with. Scott, thank you for joining us, I appreciate it. Scott Silliman is former Air Force attorney, law professor at Duke University. Have a good one.
We're just getting started here on IN THE MONEY. Coming up as we continue, TV rocks, but photos rule. The images firing up debate from Iraq didn't come from television. See why the still picture never lost its power to change the public's mind.
Also ahead, the king of the can-can, as Coke names a new CEO, find out if Wall Street thinks the company is ready for a renaissance..
And fear of falling, a big terrorist attack can throw your stock portfolio right into a tailspin. We'll look at how to keep your investments out of potential terrorist trouble, stay with us.
(COMMERCIAL BREAK)
CAFFERTY: The saying goes that a picture's worth a thousand words. Well, this week we might add to that, perhaps a thousand steps backward for U.S. policy in Iraq. Those pictures of U.S. Army personnel allegedly abusing Iraqi prisoners have inflamed the international community and shocked people across this country. And what we've learned, among other things, is that despite the popularity of television and videotape, good old-fashioned still photographs still have tremendous power to influence us all. Joining us to talk about this is Steve McCurry. He's an award winning photographer who has been in war zones all over the world. Very nice to have you with us, thanks for joining us.
STEVE MCCURRY, PHOTOGRAPHER: Thank you.
CAFFERTY: What is it about the power of a still photograph? We can get off on a live satellite right this very minute if news events dictate and bring you events as they're unfolding from anywhere in the world. Those images, though, remain fleeting in many cases, while the power of a single still picture can last for decades. Tell me about that.
MCCURRY: Well, I think a still image just sits there and stares back at you. You'll see it on a magazine, a newspaper. I can think of two instances where there was a cameraman and a still photographer shooting the exact same instance: Mount Suribachi, Iwo Jima; Joe Rosenthal's classic picture of the soldiers planting that flag. There was a cameraman filming that, and yet the picture that has seared into our psyche is the still picture.
There was also a cameraman and a photographer at that incredible execution in the streets of Saigon where the gun is pointed at the -- and the soldier is killed. And the picture, again, which stays in our memory is the still photograph.
You know, this picture of the Iraqi prisoner standing on that crate, hooded, with these electrodes coming out of his fingers, is going to be a picture which is going to run in literally tens of thousands of newspapers all over the world, all over the Arab world, all over India, you know, China. It's going to be a picture which even small villages where they don't have television, this picture's going to be picked up everywhere. And I think that this picture's going to haunt us for generations. And I think that single image will be the icon which comes to represent in part the American war in Iraq.
LISOVICZ: And that was actually my question, Steve, because the picture that you cited of Eddie Adams, I believe, the AP photographer who caught that on the streets of Saigon, really sort of reinforced the public opposition to the war, as well as the other one that sort of seared through everyone's memory was the little girl fleeing her village from the horrific effects of napalm. And that really sort of reinforced, again, the opposition to the war. Here we are 30-some years later. And there is growing concern about what we're doing in Iraq. Do you think that these photos, these terrible photos have the power to do the same thing?
MCCURRY: Absolutely. I can remember working a newspaper in Philadelphia, watching that picture of that little girl running on the street, Highway 1, covered, you know, crying, this excruciating expression on her face. And immediately thinking, this is definitely going to run on page one all over the world, which it did, and in many ways, turned public opinion -- continued to turn public opinion against that war.
I just think it's -- that picture just sits there and stares back at you. It gives you time to sort of have a relationship with it. And there's some kind of a chord it strikes, some kind of an emotional chord it strikes in people's psyche, which it just doesn't let go. And it just -- will just kind of stare in our memory. And when we think back of a war like Vietnam, this picture, Eddie Adams' picture, My Lai, these are huge. And the impact is just enormous.
SERWER: But one thing, Steve, about that, I remember the video of that execution in Vietnam. And the problem there is, it's unwatchable. It's too graphic. It's too disturbing. In a way, these pictures, I don't want to take away from their power, but they're a little less disturbing. Although pictures are getting more and more graphic, I think. This is up to a news editor. I'm thinking about "The New York Times" running those pictures of our servicemen strung up on the bridge. Can you talk about that a little bit? Are we using more and more graphic still images?
MCCURRY: Well, I'm not sure about that. I think that the fact that you can freeze a moment in time, that the execution on the streets of Saigon, the video clip goes by so quickly, but that still image was the decisive moment, the exact instant of when this soldier was killed. And it just stays there and it doesn't go away. I think that this kind of, you know, critical moment which just sits there is just something which has such an enormous impact. CAFFERTY: Before we let you go, I want to put up one of the famous pictures you took. That's of the afghan girl that appeared on the cover of "National Geographic" magazine. Tell our viewers a little bit about that shot.
MCCURRY: This little refugee girl, which I photographed in a camp back in 1984 and ended up on the cover of "National Geographic," she actually became the kind of the symbolizer (ph), represent all Afghan refugees at that point in time. And I think there was a hope and a resilience and a fortitude that came through in her expression, which we got thousands of letters from all over the world, people that wanted to help her and donate money to her family, and people actually went and volunteered to work in the refugee camps based on that picture. So in a way, it was a very positive iconic picture, which in a way was very representative of that point in time.
CAFFERTY: Powerful stuff. Steve McCurry, thank you for being with us on IN THE MONEY. It's nice to have you here.
MCCURRY: Thank you very much.
CAFFERTY: OK. Coming up next as we continue the search for Classic Coke, Wall Street's wondering if the new CEO can put fizz back in that company. We'll take a look at the stock. It's our "Stock of the Week."
And later, bulletproof your portfolio, see how the threat of extremist violence can mess with your investments big time, and find out what you can do about it.
Plus, peak twins, as opposed to "Twin Peaks" you see.
SERWER: Yes.
CAFFERTY: You got that. The Olsens have a new movie out and a big birthday ahead. Find out what they're worth, hint, it's a ton, as their media empire comes of age. Back after this.
(COMMERCIAL BREAK)
LISOVICZ: Now let's look at the week's top stories in our "Money Minute." Alan Greenspan and company kept short-term interest rates the same, but they hinted rate hikes are on the way. That's because the central bank believes the economy is recovering and inflation is now a growing concern.
The wife of former Enron Chief Financial Officer Andrew Fastow has pleaded guilty to tax fraud and has been sentenced to a year in prison, the maximum. A federal judge rejected Lea Fastow's first attempt at a guilty plea last month when he balked at the light five- month sentence recommendation from prosecutors. Andrew Fastow pleaded guilty to other charges and will serve a 10-year prison term when he finishes cooperating with prosecutors.
And less than three weeks after McDonald's CEO Jim Cantalupo died of a heart attack, his successor underwent surgery for colon cancer. Forty-three-year-old Charlie Bell is reportedly recovering well and should be back on the job soon. McDonald's says Bell's illness had not been diagnosed when he took the top job.
SERWER: All right. There was a change at the top of another top American company this week. Coca-Cola tapped E. Neville Isdell, an Irishman, as its new CEO. But my colleagues at "Fortune" reported that the soft drink giant was in talks with former GE Chairman Jack Welch for the top spot before the deal broke down.
Coke shares are up about 35 percent since last year. But in this fragmented drink market, can Coca-Cola ever regain its dominance. That makes Coke our "Stock of the Week."
And you know, guys, over the past five years or so, it's really been a tough ride for Coke. They had problems in Europe with tampering. They've had slow sales here. They had discrimination suits, whistleblowers saying they've got accounting problems. The company says keeps saying isolated event, isolated event, isolated event. But Wall Street's not buying it, because the stock has really not gone anywhere for a while. You wonder, can they turn this around?
LISOVICZ: Well, certainly, the new CEO, Mr. Isdell has been a veteran of the company, has worked for the company three decades or so. I find it interesting actually we're talking about McDonald's and Coke, two of the leading consumer products companies. Both have non- Americans now at the post, Charlie Bell is an Australia and Mr. Isdell is an Irish citizen.
But not only that, now that you have someone who has taken this job, he was considered an outside candidate in some ways. Steven Heyer was passed up for the job, the COO. Some analysts say he surely will leave and he will take people with him, so more turmoil at the company.
CAFFERTY: They've also had some trouble finding someone to fill this job. That doesn't speak too well about whatever's going on at the company, if nobody wants to go in and take over this thing, does it?
SERWER: Well, I don't think it does. And a lot of people are complaining that Isdell is a consummate insider. What this company doesn't need is more people steeped in its ways. The board is very powerful here. You've got Warren Buffett and Don Keough, people who have been associated with the company for year after year. And you've got to feel that, you know, the company that has the buzz right now is Pepsi. And it has not been that way for a long, long time. I mean, name Coke's new ad campaign. You can't really name it. The hot young people are associated with Pepsi. I really think eventually they're going to have to go outside to really get this thing going.
LISOVICZ: Well, and that's what they were doing. And how does it -- to speak to Jack Welch on his wedding day, what would Emily Post say about that? Speaking of names...
CAFFERTY: You can always the guys that have been married before, they're doing a deal during the wedding, saying, I'll call you right back.
LISOVICZ: And on the honeymoon, he was still talking with them.
SERWER: That's Jack Welch. Well, we'll have to see how Mr. Isdell does.
Coming up on IN THE MONEY, terrorism and your investments, with the U.S. in the crosshairs of Islamic terror groups, find out how to keep your money out of harm's way.
And they're almost 18, and that means the Olsen sisters, twins even, are about to get complete control of one of the biggest fortunes in show business. We'll find out -- there they go, we'll find out how they got so popular and so powerful.
(COMMERCIAL BREAK)
WHITFIELD: Hello, I'm Fredricka Whitfield at the CNN in Atlanta. IN THE MONEY continues after a look at these top stories. President Bush is again expressing his outrage over the abuse of Iraqi prisoners. In his weekly radio address today, the president said several investigations are under way to get a handle on the prison operations in Iraq.
(BEGIN AUDIO CLIP)
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: In recent days, America and the world have learned of shocking conduct in Iraqi prisons by a small number of American servicemen and women. These individuals had been given the responsibility of overseeing Iraqis in American custody, and in doing so, in a decent and humane manner consistent with U.S. law and the Geneva Conventions. Instead, we have seen shameful images of prisoners being subjected to abuse and humiliation. Such practices do not reflect our values. They are a stain on our country's honor and reputation.
(END AUDIO CLIP)
WHITFIELD: Army Reservist Lynndie England has become the seventh member of the U.S. MP unit to be charged in the prisoner abuse scandal. PFC England was seen in several of the photographs smiling and pointing at naked Iraqi prisoners. She's accused of assaulting detainees on a number of occasions, and conspiring to mistreat them.
A day of heavy clashes in the southern city of Basra in Iraq: A British military spokesman says British troops exchanged gunfire with miltiamen loyal to radical Shiite cleric Muqtada al-Sadr. Two Iraqis were killed, at least five others and two British troops were wounded.
At least three people are dead after a 17-foot boat capsized in Massachusetts overnight. Rescuers are searching the Taunton River for one woman still missing. A 14-year-old boy swam to shore to get help, one of his parents is reportedly hospitalized in critical condition.
I'm Fredricka Whitfield. Now, more of IN THE MONEY. LISOVICZ: Whether you're out to make more money or simply to hold on to what you've got, terrorism counts when you're thinking about investments. That might sound callous, but in a world where they practically want to check your dental work before you fly, taking account of terrorism is just simply common sense. "TIME" magazine senior writer Dan Kadlec is here in New York with more about that.
Welcome, good to see you again.
DAN KADLEC, "TIME": Good to see you.
LISOVICZ: It's kind of an unnerving subject.
KADLEC: It's a tough one, it's a tough subject because no one likes to think this way. But, you know what got me thinking this way in particular was GE buying this little bomb detection company called InVision a few months ago. And it occurred to me, if GE is buying protection, and that's what they're doing, they're buying earnings protection by owning a company that's going to do well if the terror threat persists and if there is another strike, you know, maybe the rest of us should think this way also.
LISOVICZ: You've seen some huge jumps in some of these security firms, like TASER and Mace, no description necessary for names like that. It's almost like being back in 1999.
KADLEC: Yes. No doubt there's been a run-up in these. But there's good reason for that. The government is going to spend something like $100 billion over the next few years fighting -- with homeland security, a lot of that money is going to go the security systems. The security stocks are the ones that have had the big run- ups, although I don't think necessarily overpriced. But that's where a lot of the action is and that's what you're talking about.
SERWER: But Dan, how much do you integrate this in your overall thinking about investing. I mean, is this just a piece of it? Should this be your whole way of looking at the market now?
KADLEC: No, no, you're right. It's a small piece. You don't want to rush into -- when you invest, you never want to do anything wholesale. This is something you want to do at the margin with maybe 5 or 10 percent of your money. It's just something you want to think about it. No one's going to -- there's a lot of ways to do it, by the way. You can own some oil stocks because oil would tend to do well in turmoil.
And by the way, with China sucking up all the world's reserves, those are going to do pretty good anyway. I also think dividend stocks are a nice way to go. There's sort of an inherent safety in dividend stocks. And by the way, they've been a little bit out of favor for a while and they are coming back strong anyway. So it's not something that you do just for the terror strike or the terror potential. But you look for ways that are going to do well with or without it. But certainly would benefit at the margin.
CAFFERTY: Are there things you should stay away from, I know some people have suggested that certain municipal bonds might be something you want to look twice at?
KADLEC: Right, well, munis should be a fairly safe haven. But I think with munis what you want to think about is, don't own too many in one region. God forbid a power plant gets hit in some little community. Well, guess what, if you own munis of all the taxing authorities in that town, they're all going to get hit. So spread them out, just spread them out. It's common sense diversification.
LISOVICZ: But you know, Dan, we are seeing clear signs every week it seems that the economy is improving. Airfares, for instance, much higher. There are just no sales going on. But yet you say stay away from travel related sectors right now.
KADLEC: Not stay away, lighten up. And you're right, that -- just in the last few weeks, that has become a little bit of a different picture with the economy coming back, and travelers coming back some. I would just say, don't overdo it there. Retail, autos, airlines, hotels, don't stay away, but don't overdo it.
SERWER: You hear that, Susan, lighten up.
(LAUGHTER)
SERWER: What about plain vanilla, the defense stocks, your father's defense stocks, like Raytheon, General Dynamics, Lockheed Martin, those kind of things?
KADLEC: Yes, well, for one thing, I think those have gotten a little expensive anyway. And they're not in the same category as the security stocks that are going to get a lot of the attention. But, yes, why not own some of them. I just wouldn't overdo it, again. I think there is going to be money flowing that direction, sort of over the long term. But that's not a specific play that you want to -- that's not like the security stocks which are really where it's at.
CAFFERTY: You really have to be careful about doing your research. This TASER, for example, what's it up, 5000 percent in the last year or so?
LISOVICZ: Crazy.
SERWER: Yes.
CAFFERTY: And now the day traders are having a lot of fun just moving this stuff back and forth. You did a thing the other day on "AMERICAN MORNING," be a little careful, this is for the pros, don't go and invest your grandmother's 401(k) in this stuff. So you've got to be a little careful when you talk about the security companies, about which ones have real business models, real earnings, and a real potential to do well for them...
KADLEC: Yes. No question. I'm not even that familiar with the TASER. But that is one that I know just went crazy.
CAFFERTY: It was a moon shot. KADLEC: And there have been a few like that. But this thing like InVision that GE bought, that's a real company making real money. And there are other things like that out there: OSI Systems, Verant (ph), I think, is another one. There are a few out there, Ceradyne, you know, there's a growing number of these things out there. And they're going to benefit as the government spends money.
LISOVICZ: And you still like gold, right?
KADLEC: You know, again, at the margin, I wouldn't mind owning a little of it. I think it's a good hedge. And you do have the China story, which is good for all natural resources, the whole commodities boom going on.
LISOVICZ: But China now says that it wants to ratchet back its economy a little bit. But that's still pretty bullish, right?
KADLEC: You know, that's a really near-term thing. I'm fascinated by people saying the commodities boom is over. We've had the run, and certainly we're going to take a rest here somewhere. But over the next five to 10 years, this is an ongoing story.
SERWER: I agree with that.
CAFFERTY: Dan, good to see you as always, thanks for coming by.
KADLEC: Thank you.
CAFFERTY: Dan Kadlec, senior writer with "TIME" magazine.
Just ahead on IN THE MONEY, as we continue, they're not your ordinary child stars, a look at the Olsen twins' financial empire, see how it got that way. It's very large.
What kind of person makes those annoying computer worms, like the Sasser? Webmaster Allen Wastler will have the profile of that. Stay with us.
(COMMERCIAL BREAK)
SERWER: Mary-Kate and Ashley Olsen are about to take the reins of a billion-dollar business. But first they have to graduate from high school. The twins have been involved in the TV and film business since they were infants. Their new movie, "New York Minute" opens this weekend and is expected to be a big hit with the pre-teen crowd. Here to talk about the Olsen empire is Mark Dagostino, New York correspondent for "People" magazine.
Mark, welcome.
MARK DAGOSTINO, "PEOPLE": Thanks. Glad to be here.
SERWER: Well, for people who really aren't that familiar with the Olsen twins, talk to us about...
CAFFERTY: That would be me. SERWER: That would be Jack Cafferty and people like him, talk to us about exactly how big these girls are.
DAGOSTINO: You know, it's -- they stayed under the mainstream radar for a very long time, doing direct-to-video movies and things like that. So it's hard to believe that over the last 17 years, they've built a company that last year sold $1.2 billion in retail sales around the world.
LISOVICZ: And when you talk about that empire, as I see, that you have so thoughtfully given us a diagram of their empire, everything from backpacks to action figures, to toothpaste, thankfully they turned down the offers for Mary-Kate and Ashley Spaghettios.
DAGOSTINO: Right. They've also turned down offers to -- of tens of thousands of dollars to appear at people's birthday parties, and things like that. They could really just be making money hand over fist every single day. But they've tried to keep it classy. They've tried to do things that they're really, really involved in and excited about throughout their whole career.
CAFFERTY: When they turn 18 they'll be free to start making their own mistakes, right?
DAGOSTINO: Absolutely.
CAFFERTY: And you know with a couple of kids that have been this successful, human nature being what it is, we'll all be sitting around there, waiting for them to do something that says they're going to crash and burn. I mean, when Britney Spears lit a cigarette, the world stopped turning on its axis. What are the pitfalls out there for these kids?
DAGOSTINO: They're facing kind of tabloid media scrutiny for the first time in their lives. And there is definitely all eyes on them as they move to New York City to go to college at NYU this next year.
LISOVICZ: Page Six alert.
DAGOSTINO: Page Six alert, we're going to be getting the calls every single time they show up at a bar somewhere, you know, just like normal teens do.
CAFFERTY: You know, but if you're 18 and have a billion dollars, maybe it's poetic justice you have to undergo some aggravation in exchange, right? It starts when they come here to go to school I guess.
DAGOSTINO: I think so. And they know, and they're aware that people are watching them. They don't want to be role models to the world. They just want to be normal teens and be able to live their lives.
CAFFERTY: But that's just silly. They're not normal, and they're not going to be allowed to just live their lives. I mean, I love that, I just want to be a normal person. You have a billion dollars, you're 18 years old, there's nothing normal about you.
LISOVICZ: And that has come across in your dealings with them. Describe what doing an interview with these 17-year-old girls, tell us how they come across.
DAGOSTINO: It's really interesting, because they've been in the industry for so long, they're a little bit like little politicians. They speak in these terms of, you know, which one of you is the better student. You would think that's...
SERWER: Maybe they'll run for office.
DAGOSTINO: It's a simple question, right? Well, neither one of us is really better. We both have our strong points and our weak points.
SERWER: That does sound like a politician.
DAGOSTINO: You know what I mean? So they're very careful with what they say to the media, and very well trained. And it's amazing, for a couple of 17-year-old kids, because they really are kids. They're also very loose and laid back and kind of silly and they laugh with each other.
CAFFERTY: There are so many stories about kids who had very unhappy endings to their lives who were exactly at the place that these kids are at now. I don't know what the ingredient is that allows one to make it through this and go ahead and have some kind of a life of normalcy and what causes somebody to hit the wall and totally self-destruct. Do you get a sense of whether they have got the real stuff, the real goods to make the right choices and keep the compass heading constant as they move forward?
DAGOSTINO: I really think so. The parenting here seems to have been really strong from the very beginning; simple things like doing chores and being on an allowance just like their brothers and sisters. Also, they have, in Robert Thorne, the CEO of their company, an outsider...
SERWER: I love that, CEO of their company, right?
DAGOSTINO: Right. They have someone who's not a family member running their business empire.
CAFFERTY: That's probably smart.
DAGOSTINO: And I that's very, very important.
LISOVICZ: But they're at a critical stage now, not only because they're on the verge of taking over this huge empire, but because they're becoming young women. And in a way, are they trying to shed that image? I mean, you know, with this new "New York Minute" that just premiered, are they trying to sort of shed their childish image and take on a new one?
DAGOSTINO: Not shed the image so much as just grow up at the same rate that their peers are growing up. You know, what was weird with a Britney Spears or somebody is that she seemed to make this leap from being very innocent to not that innocent overnight. And it shocked a lot of people.
LISOVICZ: Yes, that would be an understatement.
DAGOSTINO: They seem to be growing at the same rate that their peers are growing. And that's what they want to present to the audience.
CAFFERTY: All right. We're going to have to leave it at that, Mark. I know I'm going to be seeing the movie over the weekend, because I have two girls who are just dying to see it. Mark Dagostino, New York correspondent for "People" magazine, thanks very much.
DAGOSTINO: Thank you.
DAGOSTINO: All right, just ahead, the Sasser virus, could be proof that the people who create viruses are going from pranksters to gangsters.
And you can tell us what's on your mind at inthemoney@cnn.com. But please don't send any viruses to us, please.
(COMMERCIAL BREAK)
CAFFERTY: Got this little computer worm called Sasser making the rounds this week, leaving about 1 million computers out of service. Worms, viruses, nothing new, but our Webmaster Allen Wastler thinks the profile of the average virus-spreading hacker could be changing.
What up with these guys?
ALLEN WASTLER, MONEY.COM: Now don't you figure that somebody who is writing viruses and worms is like some little adolescent up there that really needs to discover beer and girls?
CAFFERTY: Yes.
(LAUGHTER)
SERWER: Get a life, get a job, get real, get out of your dark room.
WASTLER: And this Sasser worm, it sort of speaks to that, because basically it doesn't need anything to get into your computer. If you're unprotected, it is going to slip in there. You don't need to open up an e-mail or anything to do that. And then all it does is reboot your computer over and over again. Your computer starts up, shuts down, starts up, shut down, just irritation for irritation's sake.
CAFFERTY: Now what's the purpose of this, what is...
SERWER: Who is... WASTLER: Well, what's happened is once that worm went out, it was followed up by a fake e-mail saying, hey, this is your Sasser patch, OK? And anybody stupid enough to open it up would get hit with the Netsky virus, and different variant of the Netsky of virus. Now in that code -- and this is where I think it might be changing a little bit, in that code was a message that basically said, ha ha, we wrote both this virus and the Sasser virus, and we're the best virus writers in the world. It was a big boast, OK? Now I talked to some experts that sort of follow this trend, and they said it's an indication of sort of like gangs building up between virus writers. This outfit likes to call itself Skynet. But apparently they're facing off with another group that claims to have written the Bagel virus and some other viruses. And so you know, you sort of get the "West Side Story" image of, "when you're a Jet, you're a Jet" you know?
(LAUGHTER)
WASTLER: And they're sort of fighting off.
SERWER: Wasn't there a catcher named Sasser for the Mets, does it have anything to do with him? Who is Sasser?
WASTLER: Sasser is actually -- it's a play off the acronym for the security hole in the Windows operating system, it's called LSASS, ah, the Sasser.
SERWER: That's why he's the Webmaster.
LISOVICZ: Do we have a profile on these hackers?
WASTLER: Well, it used to be, what we were talking about, some nerdy little kid that needs to get a life, but now they think it might be changing. Just two months ago they arrested over in Belgium a female virus writer, went by the name of Gigabyte (ph). And so they're saying, OK, well, it's spreading out from there and...
CAFFERTY: What's her name, Gigabyte?
WASTLER: She went by Gigabyte.
SERWER: A Belgian worm Gigabyte. Let's get her on the show, Jack.
WASTLER: So you've got the bratty kid. And now we see it's sort of going up into a delinquent sort of gang mentality type of thing.
LISOVICZ: Equal rights.
SERWER: Belgian worm gangs.
WASTLER: The next step is going to be more criminality type things, from brat to delinquent to criminal.
CAFFERTY: My favorite part of this program every weekend is the "Fun Site of the Week," because I don't understand a lot of the other stuff we talk about. But I can go on the fun site and get...
WASTLER: Here you go, gentlemen, you were talking about the Olsen twins? Well, that's the Olsen twins countdown clock, OK? For those of you who...
(CROSSTALK)
CAFFERTY: I take back what I said.
WASTLER: ... just want to find out when they're going to be in charge of their empire, no other motivation here at all.
SERWER: How far away is it, roughly, do you know?
WASTLER:: It's about 34 days.
SERWER: Is that right?
WASTLER: Yes.
SERWER: Not that you're really keeping close track.
WASTLER: Not that I...
(CROSSTALK)
CAFFERTY: Be still my beating heart.
LISOVICZ: And who's maintaining this site?
WASTLER: There are several...
SERWER: A guy named Jerry, isn't it? A guy named Jerry is probably...
WASTLER: ... in varying degrees of taste.
CAFFERTY: Good to see you, my friend. Thank you, as always.
Still ahead on IN THE MONEY as we continue, we're going to read some e-mails. You can tell us what you think by sending us an e-mail at inthemoney@cnn.com. Remember to keep it clean, and no more than three-syllable words because I hate having to go to the dictionary. The FCC is watching as well. Stay with us.
(COMMERCIAL BREAK)
CAFFERTY: Time now to read some of your answers to our e-mail question about how we can stop the continued outsourcing of American jobs.
David in Crescent City, California, says: "How about setting up tariffs to discourage cheap imports from entering the country? And any American company that wants to use cheap overseas labor would be subject to the same tariffs if they tried to sell their goods in America. I know it's protectionism, but is that such a bad word?" Ray in Florida wrote this: "Remember the jobs are leaving the U.S., not just because foreign labor is cheaper, but because American labor is so expensive. I'm not talking about salaries, I'm talking about all the taxation and government regulation. Tort reform would help as would more union cooperation."
And Bill out there in Montana weighed in with this: "I'm not sure I know how to stop outsourcing, but if it lowers my cable bill, I wouldn't mind if the CNN anchors spoke with a Chinese accent."
SERWER: Ooooh.
CAFFERTY: Go for that.
Here's the e-mail question for this Mother's Day weekend: Did your mom go to work or stay home when you were growing up, and how did that decision affect you?
Send us your answers at IN THE MONEY at CNN.com. And visit our show page at money.com/inthemoney where you'll find the addresses of our "Fun Site of the Week," the countdown to the Olsen twins' birthday.
SERWER: Hurray.
CAFFERTY: Thank you, in the meantime, for joining us for this edition of IN THE MONEY. That concludes our little proceeding for now. Thanks to the gang: CNN financial correspondent Susan Lisovicz, "Fortune" magazine editor-at-large Andy Serwer, Money.com managing editor Allen Wastler.
Join us tomorrow afternoon, 3:00 Eastern time when we'll put the Kerry campaign under the microscope. Despite a string of seemingly bad news for the Bush administration, Mr. Kerry doesn't appear to have made much headway in his bid to unseat the incumbent. We'll take a closer look tomorrow at 3:00, hope to see you then. Until then, thanks for today and enjoy your weekend.
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