Return to Transcripts main page
American Morning
Rescue Workers in Japan Working into the Night; Probation Violation?
Aired April 25, 2005 - 08:30 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.
SOLEDAD O'BRIEN, CNN ANCHOR: Let's get the headlines first, though.
Good morning, Carol.
CAROL COSTELLO, CNN ANCHOR: Good morning, Soledad. Good morning, Bill. Good morning, everyone.
Now in the news, Iraq's new government struggling to create a new cabinet as the body count rises. A series of explosions Sunday reportedly killed at least 24 people and injured some 60 others. Insurgents coordinated the blast in Baghdad, in Saddam Hussein's hometown of Tikrit. In the meantime, Iraqi officials struggle to form a new cabinet. Interim Prime Minister Ayad Allawi has reportedly been shut out.
President Vladimir Putin reiterating that Russia will develop as a free and democratic country. President Putin speaking publicly just a short time ago, delivering his sixth annual state of the nation. Putin also used the speech as an opportunity to brush off recent criticism that Russia is backtracking on Democratic reforms.
More questions than answers today in the disappearance of two Georgia toddlers. Police have temporarily called off the search for 2-year-old Nicole Kain and her 3-year-old brother, Jonah. Investigators have been questioning the children's mother, who reported them missing Saturday afternoon. Police have scheduled a news conference for 10:00 a.m. Eastern. Hopefully, we'll find out more information then.
One day after his former inauguration as pope, Benedict XVI is reaching out to the world's Muslims. The pope told visiting religious leaders he wants to continue building bridges of friendship. The pontiff is also making his first trip outside the Vatican as pope today to pray at the tomb of the Apostle Paul at a basilica in Rome.
And somebody out there is very, very rich and probably quitting their job as we speak. Still no word on exactly who won Friday's $205 million Mega Millions drawing. We know the ticket was purchased in a Port Huron, Michigan supermarket. But apparently nobody yet has stepped forward to claim the prize.
That means we all lost. Were you in the office pool?
O'BRIEN: Did we buy ours in Port Huron, guys?
COSTELLO: No.
BILL HEMMER, CNN ANCHOR: Perfect timing for the retirement series, though, that person winning that. Come on in, we'll give you a ton of ideas.
Thanks, Carol.
COSTELLO: Sure.
O'BRIEN: I'm not jealous, even slightly. Thanks, Carol.
Rescue workers in Japan are working into the night. They're trying to free passengers who are still trapped following today's deadly train derailment. It happened near Amagasaki, outside of Osaka, about 250 miles from Tokyo. The train jumped the tracks and slammed into an apartment building. At least 50 people are dead, and that number is expected to go up. More than 300 others are injured.
CNN's Atika Shubert is live in Tokyo, via videophone for us this morning.
Atika, good morning you.
Give us a sense of what investigators are saying this early on about what the cause of the derailment might be.
ATIKA SHUBERT, CNN CORRESPONDENT: Well, they don't know the exact cause yet, but they are looking at several possibilities. The first and foremost, the train may have been speeding. At least that's what many survivors believe. Quite a few of them who were interviewed right after the incident said they felt the driver was going too fast. Now we don't know exactly how fast the train was going, but according to railway officials, it would have had to have been going 133 kilometers per hour for it to derail because of speed.
Now investigators are also looking at two other possibilities that may have exacerbated the situation. One is that the automatic- braking system is one of Japan's oldest. So they're looking into that. And also whether or not there was anything on the tracks that might have actually been in the path of the train, causing it to derail entirely -- Soledad.
O'BRIEN: Atika, obviously, the rail system is of critical importance in Japan. Across Japan, would you expect, with an accident that is this horrible, that it's essentially going to scare people away from ever using the rail system, or cut back on it a lot?
SHUBERT: Well, I don't think it will scare people away from using the system. There's still quite a bit of confidence in that, but it's certainly a shock to many people here. As you say, the community here really relies on the trains. It's the best way to get around not only the city, but also the entire country -- high-speed trains, commuter rails and subways. So really people have no choice but to use the train. Certainly they'll be a lot more cautious now, particularly scrutinizing how drivers are using their speed when they're traveling on these trains. O'BRIEN: Clearly, they'll be waiting for word on whatever that investigation brings.
Atika Shubert is reporting for us from Tokyo this morning. Atika, thanks -- Bill.
HEMMER: About 25 minutes before the hour.
There are reports this morning that Martha Stewart's probation officer is investigating now whether or not she violated her probation. "The New York Post" and "The Daily News" say this event, when Martha Stewart attended a dinner last week for "Time" magazine, is the point in question. That event was honoring Stewart, among others. She was on the list of those honored this evening.
And our senior analyst is Jeffrey Greenfield. No, he's not. It's Jeffrey Toobin.
JEFFREY TOOBIN, CNN SR. LEGAL ANALYST: He is the senior analyst.
HEMMER: Nice to see you.
We talked to Greenfield last hour. How're you doing, man?
TOOBIN: Very well, sir.
HEMMER: Listen, you have been looking into this story. Did she do anything wrong?
TOOBIN: Apparently not, because it does appear that she got clearance in advance from her probation officer to go to this event. What may be uncertain is what the probation officer really understood about what was going to go on here, because she was photographed at this very lavish dinner and you could see how the probation officer might be a little embarrassed that he approved this. But Martha is on no way on the verge of heading right back to prison.
HEMMER: So if she or one of her people picked up the phone and called and asked for permission and permission was granted, this is all ado about nothing?
TOOBIN: As long as the event was accurately characterized about what it was, yes.
HEMMER: So the rub is this, then -- Martha Stewart has been given a continue -- permission rather to continue working.
TOOBIN: Correct.
HEMMER: So if she's at this event you could say it was PR, it was publicity, I need to build back up my name, I need to continue to push the brand, and therein is no issue.
TOOBIN: That's the argument. But you know, remember, she's under house arrest. This is supposed to be one step short of prison, except for 48 hours a week when you are working. Now, yes, you can make the complicated lawyer's argument that you just made, that oh, well, this is really working, but I think most people looking at the party would say she's not working, and you could see why the government might be irritated.
HEMMER: A spokesperson for Stewart says, "When 'Time' magazine recognizes Martha Stewart, our company benefits from that honor. Having Martha present at industry events where she's honored or recognized for achievements is valuable to us, which goes back to the point of publicity and P.R."
TOOBIN: That's true. But you know, we're only talking about five months here. She got a great deal from Judge Cederbaum in getting a split sentence. You know, having gotten that advantage, you might think she would cool it for five months and say, look, I'm just going to be low profile, go to work the way most people think of going to work, as in going to the office, but you know, she's pushing the envelope here. And, you know, I don't think she'll get sent back to prison, but if she keeps doing it, I could see the government could get irritated.
HEMMER: Flip that around then. Take my argument and throw it out the window for a second. What are the consequences if there's a violation?
TOOBIN: Oh, you get thrown back in jail. I mean, there's no -- the revocation of house arrest is like the revocation of probation, which means you serve out the rest of your sentence in prison. I think we're well short of that now, but that's what could happen theoretically.
HEMMER: And you've been following her probation, too, here in the city. She does a lot of events, right?
TOOBIN: She does -- I don't know about a lot. She does -- this was a particularly lavish celebration. Other things are more clearly office oriented. But she's been a public person. Look, we need to -- she's thriving. She's cutting deals all over the place. She's got a new satellite-radio deal. She's got her "Apprentice" show. She's her, you know, homemaking show back on TV. She's doing great. I think maybe she ought to chill out for a while.
HEMMER: She's got that little ankle thing on her.
TOOBIN: That will be gone soon enough.
HEMMER: Thank you, Jeff.
TOOBIN: About two months to go.
HEMMER: OK, we'll watch it. Thanks -- Soledad.
O'BRIEN: Well, finally there's some good news at the gas pump. For the first time this year, gas prices fell an average of 4.5 cents. The drop comes in spite of oil prices, which climbed above 55 bucks a barrel on Friday. The average price for a gallon of regular gas now $2.24. Tulsa, Oklahoma has the cheapest at $2.04, while San Francisco has the highest price, $2.64. In other cities across the country, Atlanta is at $2.09, Boston, $2.18, and Seattle, $2.47.
A new study names the safest cars for front and side crashes. The Insurance Institute for Highway Safety gave the 2005 Volkswagen Jetta high marks for front and side-impact tests. Researchers tested 15 midsized vehicles with a base price of less than $21,000. Others cars that did well were the Honda Accord, the Mitsubishi Gallant and the Subaru Legacy. Among the vehicles, though, that rated poorly, the Nissan Altima, the Kia Optima, the Dodge Stratus and the Chevy Malibu.
(WEATHER REPORT)
HEMMER: An auto shop chain running out of money and shutting down. Now customers have to pay the price with their own cars. Andy explains that in a moment here.
O'BRIEN: Also, retirement 101. We've got a simple formula for making sure you've got enough in the bank come retirement time. Gerri explains coming up on AMERICAN MORNING.
(COMMERCIAL BREAK)
O'BRIEN: Americans 50 and older are relying more on Social Security to make ends meet. The AARP says its latest survey shows the need to strengthen guaranteed benefits and quote, "not subject beneficiaries to an increased risk." The organization opposes the push by President Bush to add private investment accounts to Social Security.
That brings us right to our new series. It's called "It's Never Too Late." The big question is just how much money should you be putting aside for retirement? No matter what your age, most financial experts agree it is never too early to start planning for retirement.
CNN's personal finance editor, Gerri Willis, has some ideas. You chatted, Gerri, with a couple of people who are facing very different challenges.
GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: Big challenges, actually, Soledad. Good to see you. And as a matter of fact, we took a very serious look if you can save enough for retirement if you're 10 and 20 years away from retirement. The answer is yes, you can make it happen.
(BEGIN VIDEOTAPE)
WILLIS (voice-over): Four years ago, Karl Farmer, now 58, thought he had it made. Having worked 30 years as an electrical engineer for Polaroid, his retirement future seemed secure.
KARL FARMER, RETIRED POLAROID ELECTRICAL ENGINEER: I thought it would have been an easy thing to do. I wouldn't need all the finances that I had to have before, and this was going to be fun.
WILLIS: What happened next was far from fun. Polaroid filed for chapter 11 bankruptcy protection and Farmer's benefits package was revoked. Worse, his employee stock plummeted in value from a quarter of a million dollars to just $300.
FARMER: My first inclination when I found out that this happened was that they really can't get away with this.
WILLIS: Today, Farmer is back in the job market, struggling to make ends meet. His bad luck may be exceptional, but experts say many Baby Boomers are unprepared financially for retirement. In fact, 25 percent of workers who are eligible don't even contribute to corporate 401(k)s, but even if you're within ten years of getting the gold watch, there are ways to rescue your financial future.
WALTER UPDEGRAVE, SENIOR EDITOR, "MONEY" MAGAZINE: There is a lot you can do, actually, because even if you're starting, say, at age 50 from scratch, it's possible to build up a six figure portfolio if you contribute to your 401(k), you get the employer match, you do the catch-up contributions that the law now allows for people 50 and older.
WILLIS: It's not just older people who are in trouble. Real estate broker Susan Forrest Reynolds is 43 and has two teenagers to see through high school and college, all on a yearly commission that can range from $40,000 to $80,000.
SUSAN FORREST REYNOLDS, REAL ESTATE BROKER: I don't think that we think, oh, , I've got to remember to save for retirement. We don't. I think we're saying I have to remember that the rent is due and I have to remember that the kids need new shoes and we have the SATs to pay for.
UNIDENTIFIED MALE: OK, so it's going to be going to that.
WILLIS: Whatever the day-to-day pressures, the advice is, start saving now, however small the amount.
UPDEGRAVE: If you don't have a 401(k) plan, there are plenty of mutual funds that will let you put in a certain amount each month. They'll take the money directly out of your checking account.
FARMER: Thought I'd be on the other side of the golf course, where I'd be playing, talking to the guy that's cutting the grass, versus being the guy that's cutting the grass, watching the people play.
UPDEGRAVE: That's the way the retirement world is today. It's on you. The illness is on you. The government isn't going to take care of you, the company isn't going to take care of you. You have to put the money aside and then you have to decide how to invest it.
(END VIDEOTAPE)
WILLIS: Bottom line, don't be discouraged. You can make your retirement happen if you just start saving now.
O'BRIEN: Some seriously tough stories. OK, let's get into the math. How do you calculate how much money you're going to need to retire?
WILLIS: Well, there actually is an easy to calculate number that you can come up with. We're going to show you how. Let's say you're starting with $50,000. You're an employee working, you're at the threshold of retirement. Here's what you do. Experts say that you take 75 percent of your pre-retirement income, will be what you need each and every year. That's $37,500 in this example.
Now we want to take away Social Security, because you will have something from Social Security at the end of the day. In this case, it's $17,500. And then you subcontract $17,5000 from the $37,000, you come up with $20,000. That's the money that you're going to need to come up with each and every year. Take that number times 20 and now you know the total amount of money that you're going to need to retire on. In this case, it's $400,000.
O'BRIEN: I understand how you're coming up with the $20,000, but where did you get the $20 from?
WILLIS: That's a rate of withdrawal. We're assuming you're going to take out five percent each and every year from the cache of money you've set aside.
O'BRIEN: So you think it's going to last about 20 years. What else? Are there any other creative ways to do math to say, OK, I got to get to that magic number of, in your example, $400 grand. What else can you do?
WILLIS: Well, Soledad, a couple of things to think about. You can always downsize your home. If you're short of money, obviously, you might want to think about that. If you have a pension, that's going to contribute to the amount, as well, and you might also want to think about a reverse mortgage if you want to stay in that house and yet tap that equity in your home that you've worked so hard to save.
O'BRIEN: We've got much more to talk about, of course, because it's a week-long series. What are you talking about tomorrow?
WILLIS: Well, tomorrow, as you know, with an unclear future for Social Security, the elimination of pensions and unpredictable 401(k) returns, many Americans will be forced to work past retirement age. You can count a lot of people in that group. Now if you're one of them, we'll talk about what kinds of companies and industries are best to work for.
O'BRIEN: All right. Some really good advice. Some scary statistics, but really, really good advice. Gerri, thanks, we'll see back here tomorrow.
Well, a chain of auto body shops abruptly goes out of business, but it doesn't give the customers back their cars. Andy's got their story. He's "Minding Your Business" up next on AMERICAN MORNING. Stay with us.
(COMMERCIAL BREAK)
HEMMER: OK, welcome back.
JACK CAFFERTY, CNN ANCHOR: Wall Street politics could derail the New York Stock Exchange merger. And a Los Angeles body shop closes its doors with the customers' cars inside.
Andy Serwer is "Minding Your Business."
ANDY SERWER, "FORTUNE" MAGAZINE: All the important news, Jack.
CAFFERTY: There you go.
SERWER: You know this guy Ken Langone, this Wall Street power broker?
CAFFERTY: Yes, I do.
SERWER: Pretty amazing story this morning.
Apparently, according to published reports, he is looking to make a bid for the New York Stock Exchange, or Archipelago or both, very unclear at this point. Ken Langone, a friend of Dick Grasso. There's Dick Grasso, the former embattled head of the New York Stock Exchange. There is Mr. Langone. He is the cofounder of Home Depot, and he was on the board of the New York Stock Exchange, and a very close ally and a close friend of Grasso's, who got very, very, very upset when investigators came after Grasso and tried to recoup all that pay that Grasso took away from the NYSE.
In a recent interview in "Fortune" magazine, this is what Ken Langone had to say about the investigation of Grasso. We don't have our beep working this morning, so I'm going to have to do a lot of beeping here. "They got the wrong beeping guy," Langone told Fortune. "I'm nuts, I'm rich, and boy, do I love a fight. I'm going to make them beep in their pants. And when I get through with this beeping captains of industry, they're going to wish they were in quzinark (ph) at high speed. Grasso gives them back a beeping nickel, and I'll never talk to him again."
I think he's serious, right? It's going to be billions of dollars. He's got his buddies going in on this morning, and it's very possible that -- what he really wants to do is throw a wrench in the whole thing.
O'BRIEN: Excuse me.
CAFFERTY: Just get back? What did you run out for breakfast?
O'BRIEN: They weren't supposed to get that shot of me sneaking in.
SERWER: She didn't like that Langone story, I guess.
O'BRIEN: I liked it. I was watching it from here. I wanted to be closer...
(CROSSTALK) CAFFERTY: You mentioned the car story wasn't important. If your car was in the body shop for repairs, it's damned important, right?
SERWER: That's serious stuff. It's a company called -- yes, especially in L.A. This is a body shop called M-2 in Los Angeles, apparently ran into some financial problems. Over the weekend, 2,000 customers had their cars locked up, locked up. You can't get your car. In other words, if you took your car in there to be repaired, forget about it, you can't get the thing out. There are 27 shops across Southern California. The company ran out of money, and there's no end in sight to this deal. They're looking to raise some money. Company founder Hunt Ramsbottom (ph) said he tried to find a way to...
CAFFERTY: That ain't a name you mess around with.
SERWER: Company founder Hunt Ramsbottom. I thought I said that rather well.
Now if you're in L.A., Jack, you might want to ask people for a lift, or you could ask, say, Eddie Murphy, Paula Abdul.
CAFFERTY: If you get Eddie Murphy, though, you got to dress up like a girl.
SERWER: Halle Berry, Nick Nolte. There a lot of people in L.A. you could ask for rides, right, if your car's locked up?
CAFFERTY: That's true.
SERWER: All kinds of people will give you a lift.
CAFFERTY: What's that guy's name Ramsbottom?
SERWER: Hunt Ramsbottom.
CAFFERTY: He could should consider a change.
Time for "The Cafferty File." Thanks, Andy.
Here in the land of the free, we put people in prison at a higher rate than any country on earth. 2.1 million of are currently incarcerated, which works out to one in every 138 Americans in the joint. The government reports that we were locking people up at the rate of 900 folks a week last year.
Here's a bit of a breakdown: 61 percent of the prison inmates are racial or ethnic minorities. This is scary. Six percent of all black men in their late 20s are in prison; 3.6 percent of all Hispanic men in their 20s are in prison; 1.7 percent of all white men in their 20s are in prison.
Hubble Telescope marks 15 years in space today, arguably one of the great scientific accomplishments ever. Hubble was lifted into orbit aboard NASA's space shuttle Discovery in 1990. The telescope quickly settled long-standing disagreements over the approximate age of the universe. Now estimated at 13.7 billion years. Hubble has opened the universe in ways unimaginable. Its breathtaking stuff we've gotten back from the thing -- like this. That's a picture of our neighboring planet, Mars, pictures of neighboring galaxies. Mars is where Dennis Kucinich lives. Stars located thousands of light years away from the Milky Way.
To mark Hubble's 15th anniversary, check this out, NASA and the European Space Agency released this picture. This is the M-51 Whirlpool Galaxy. It is a galaxy 23 million light years away from Earth. Sadly, Hubble's future is very much in doubt. If nothing is done, the telescope will fail after 2007.
SERWER: I didn't think you liked that space stuff.
O'BRIEN: I was going to say, you never liked space stuff, and you almost sounded like you were waxing poetic for yet a moment.
CAFFERTY: Moving on, bad news for New York's famous red-tailed hawks, Pale Male and Lola. Lola has been sitting on three eggs for about 47 days now, which is a week past her due date. Bird experts say that since the nest contents are not visible, the first definite sign that there are babies will be when Lola bends down to feed them. The hawks were evicted from their upper east side co-op at 927 Fifth Avenue last December, but were eventually allowed to return. Some think the trauma of the eviction might have been too much for Lola. According to Marie Wynn (ph), who's the author of a book on the red- tailed hawks, a previous Pale Male mate failed to produce chicks the year after their nest was disturbed. That was in 1993.
SERWER: Wow.
O'BRIEN: I was two weeks late with my kids. Hope springs eternal.
SERWER: Yes, I hope so.
CAFFERTY: And was the first sign there were babies when you bent down to feed them? Maybe not.
O'BRIEN: Well, yes, it was. Funny you should ask.
Well, guess what? Spring arrived. It's been more than a month. Did you know that?
SERWER: I couldn't tell today, up here in the Northeast.
O'BRIEN: Yes, you could not.
In the Midwest, too. Look at some of these pictures out of the Midwest. When will the folks there going to get a chance to dig out? Forecast is coming up, just ahead on AMERICAN MORNING.
Stay with us.
(COMMERCIAL BREAK)
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 April 25, 2005 - 08:30 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
SOLEDAD O'BRIEN, CNN ANCHOR: Let's get the headlines first, though.
Good morning, Carol.
CAROL COSTELLO, CNN ANCHOR: Good morning, Soledad. Good morning, Bill. Good morning, everyone.
Now in the news, Iraq's new government struggling to create a new cabinet as the body count rises. A series of explosions Sunday reportedly killed at least 24 people and injured some 60 others. Insurgents coordinated the blast in Baghdad, in Saddam Hussein's hometown of Tikrit. In the meantime, Iraqi officials struggle to form a new cabinet. Interim Prime Minister Ayad Allawi has reportedly been shut out.
President Vladimir Putin reiterating that Russia will develop as a free and democratic country. President Putin speaking publicly just a short time ago, delivering his sixth annual state of the nation. Putin also used the speech as an opportunity to brush off recent criticism that Russia is backtracking on Democratic reforms.
More questions than answers today in the disappearance of two Georgia toddlers. Police have temporarily called off the search for 2-year-old Nicole Kain and her 3-year-old brother, Jonah. Investigators have been questioning the children's mother, who reported them missing Saturday afternoon. Police have scheduled a news conference for 10:00 a.m. Eastern. Hopefully, we'll find out more information then.
One day after his former inauguration as pope, Benedict XVI is reaching out to the world's Muslims. The pope told visiting religious leaders he wants to continue building bridges of friendship. The pontiff is also making his first trip outside the Vatican as pope today to pray at the tomb of the Apostle Paul at a basilica in Rome.
And somebody out there is very, very rich and probably quitting their job as we speak. Still no word on exactly who won Friday's $205 million Mega Millions drawing. We know the ticket was purchased in a Port Huron, Michigan supermarket. But apparently nobody yet has stepped forward to claim the prize.
That means we all lost. Were you in the office pool?
O'BRIEN: Did we buy ours in Port Huron, guys?
COSTELLO: No.
BILL HEMMER, CNN ANCHOR: Perfect timing for the retirement series, though, that person winning that. Come on in, we'll give you a ton of ideas.
Thanks, Carol.
COSTELLO: Sure.
O'BRIEN: I'm not jealous, even slightly. Thanks, Carol.
Rescue workers in Japan are working into the night. They're trying to free passengers who are still trapped following today's deadly train derailment. It happened near Amagasaki, outside of Osaka, about 250 miles from Tokyo. The train jumped the tracks and slammed into an apartment building. At least 50 people are dead, and that number is expected to go up. More than 300 others are injured.
CNN's Atika Shubert is live in Tokyo, via videophone for us this morning.
Atika, good morning you.
Give us a sense of what investigators are saying this early on about what the cause of the derailment might be.
ATIKA SHUBERT, CNN CORRESPONDENT: Well, they don't know the exact cause yet, but they are looking at several possibilities. The first and foremost, the train may have been speeding. At least that's what many survivors believe. Quite a few of them who were interviewed right after the incident said they felt the driver was going too fast. Now we don't know exactly how fast the train was going, but according to railway officials, it would have had to have been going 133 kilometers per hour for it to derail because of speed.
Now investigators are also looking at two other possibilities that may have exacerbated the situation. One is that the automatic- braking system is one of Japan's oldest. So they're looking into that. And also whether or not there was anything on the tracks that might have actually been in the path of the train, causing it to derail entirely -- Soledad.
O'BRIEN: Atika, obviously, the rail system is of critical importance in Japan. Across Japan, would you expect, with an accident that is this horrible, that it's essentially going to scare people away from ever using the rail system, or cut back on it a lot?
SHUBERT: Well, I don't think it will scare people away from using the system. There's still quite a bit of confidence in that, but it's certainly a shock to many people here. As you say, the community here really relies on the trains. It's the best way to get around not only the city, but also the entire country -- high-speed trains, commuter rails and subways. So really people have no choice but to use the train. Certainly they'll be a lot more cautious now, particularly scrutinizing how drivers are using their speed when they're traveling on these trains. O'BRIEN: Clearly, they'll be waiting for word on whatever that investigation brings.
Atika Shubert is reporting for us from Tokyo this morning. Atika, thanks -- Bill.
HEMMER: About 25 minutes before the hour.
There are reports this morning that Martha Stewart's probation officer is investigating now whether or not she violated her probation. "The New York Post" and "The Daily News" say this event, when Martha Stewart attended a dinner last week for "Time" magazine, is the point in question. That event was honoring Stewart, among others. She was on the list of those honored this evening.
And our senior analyst is Jeffrey Greenfield. No, he's not. It's Jeffrey Toobin.
JEFFREY TOOBIN, CNN SR. LEGAL ANALYST: He is the senior analyst.
HEMMER: Nice to see you.
We talked to Greenfield last hour. How're you doing, man?
TOOBIN: Very well, sir.
HEMMER: Listen, you have been looking into this story. Did she do anything wrong?
TOOBIN: Apparently not, because it does appear that she got clearance in advance from her probation officer to go to this event. What may be uncertain is what the probation officer really understood about what was going to go on here, because she was photographed at this very lavish dinner and you could see how the probation officer might be a little embarrassed that he approved this. But Martha is on no way on the verge of heading right back to prison.
HEMMER: So if she or one of her people picked up the phone and called and asked for permission and permission was granted, this is all ado about nothing?
TOOBIN: As long as the event was accurately characterized about what it was, yes.
HEMMER: So the rub is this, then -- Martha Stewart has been given a continue -- permission rather to continue working.
TOOBIN: Correct.
HEMMER: So if she's at this event you could say it was PR, it was publicity, I need to build back up my name, I need to continue to push the brand, and therein is no issue.
TOOBIN: That's the argument. But you know, remember, she's under house arrest. This is supposed to be one step short of prison, except for 48 hours a week when you are working. Now, yes, you can make the complicated lawyer's argument that you just made, that oh, well, this is really working, but I think most people looking at the party would say she's not working, and you could see why the government might be irritated.
HEMMER: A spokesperson for Stewart says, "When 'Time' magazine recognizes Martha Stewart, our company benefits from that honor. Having Martha present at industry events where she's honored or recognized for achievements is valuable to us, which goes back to the point of publicity and P.R."
TOOBIN: That's true. But you know, we're only talking about five months here. She got a great deal from Judge Cederbaum in getting a split sentence. You know, having gotten that advantage, you might think she would cool it for five months and say, look, I'm just going to be low profile, go to work the way most people think of going to work, as in going to the office, but you know, she's pushing the envelope here. And, you know, I don't think she'll get sent back to prison, but if she keeps doing it, I could see the government could get irritated.
HEMMER: Flip that around then. Take my argument and throw it out the window for a second. What are the consequences if there's a violation?
TOOBIN: Oh, you get thrown back in jail. I mean, there's no -- the revocation of house arrest is like the revocation of probation, which means you serve out the rest of your sentence in prison. I think we're well short of that now, but that's what could happen theoretically.
HEMMER: And you've been following her probation, too, here in the city. She does a lot of events, right?
TOOBIN: She does -- I don't know about a lot. She does -- this was a particularly lavish celebration. Other things are more clearly office oriented. But she's been a public person. Look, we need to -- she's thriving. She's cutting deals all over the place. She's got a new satellite-radio deal. She's got her "Apprentice" show. She's her, you know, homemaking show back on TV. She's doing great. I think maybe she ought to chill out for a while.
HEMMER: She's got that little ankle thing on her.
TOOBIN: That will be gone soon enough.
HEMMER: Thank you, Jeff.
TOOBIN: About two months to go.
HEMMER: OK, we'll watch it. Thanks -- Soledad.
O'BRIEN: Well, finally there's some good news at the gas pump. For the first time this year, gas prices fell an average of 4.5 cents. The drop comes in spite of oil prices, which climbed above 55 bucks a barrel on Friday. The average price for a gallon of regular gas now $2.24. Tulsa, Oklahoma has the cheapest at $2.04, while San Francisco has the highest price, $2.64. In other cities across the country, Atlanta is at $2.09, Boston, $2.18, and Seattle, $2.47.
A new study names the safest cars for front and side crashes. The Insurance Institute for Highway Safety gave the 2005 Volkswagen Jetta high marks for front and side-impact tests. Researchers tested 15 midsized vehicles with a base price of less than $21,000. Others cars that did well were the Honda Accord, the Mitsubishi Gallant and the Subaru Legacy. Among the vehicles, though, that rated poorly, the Nissan Altima, the Kia Optima, the Dodge Stratus and the Chevy Malibu.
(WEATHER REPORT)
HEMMER: An auto shop chain running out of money and shutting down. Now customers have to pay the price with their own cars. Andy explains that in a moment here.
O'BRIEN: Also, retirement 101. We've got a simple formula for making sure you've got enough in the bank come retirement time. Gerri explains coming up on AMERICAN MORNING.
(COMMERCIAL BREAK)
O'BRIEN: Americans 50 and older are relying more on Social Security to make ends meet. The AARP says its latest survey shows the need to strengthen guaranteed benefits and quote, "not subject beneficiaries to an increased risk." The organization opposes the push by President Bush to add private investment accounts to Social Security.
That brings us right to our new series. It's called "It's Never Too Late." The big question is just how much money should you be putting aside for retirement? No matter what your age, most financial experts agree it is never too early to start planning for retirement.
CNN's personal finance editor, Gerri Willis, has some ideas. You chatted, Gerri, with a couple of people who are facing very different challenges.
GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: Big challenges, actually, Soledad. Good to see you. And as a matter of fact, we took a very serious look if you can save enough for retirement if you're 10 and 20 years away from retirement. The answer is yes, you can make it happen.
(BEGIN VIDEOTAPE)
WILLIS (voice-over): Four years ago, Karl Farmer, now 58, thought he had it made. Having worked 30 years as an electrical engineer for Polaroid, his retirement future seemed secure.
KARL FARMER, RETIRED POLAROID ELECTRICAL ENGINEER: I thought it would have been an easy thing to do. I wouldn't need all the finances that I had to have before, and this was going to be fun.
WILLIS: What happened next was far from fun. Polaroid filed for chapter 11 bankruptcy protection and Farmer's benefits package was revoked. Worse, his employee stock plummeted in value from a quarter of a million dollars to just $300.
FARMER: My first inclination when I found out that this happened was that they really can't get away with this.
WILLIS: Today, Farmer is back in the job market, struggling to make ends meet. His bad luck may be exceptional, but experts say many Baby Boomers are unprepared financially for retirement. In fact, 25 percent of workers who are eligible don't even contribute to corporate 401(k)s, but even if you're within ten years of getting the gold watch, there are ways to rescue your financial future.
WALTER UPDEGRAVE, SENIOR EDITOR, "MONEY" MAGAZINE: There is a lot you can do, actually, because even if you're starting, say, at age 50 from scratch, it's possible to build up a six figure portfolio if you contribute to your 401(k), you get the employer match, you do the catch-up contributions that the law now allows for people 50 and older.
WILLIS: It's not just older people who are in trouble. Real estate broker Susan Forrest Reynolds is 43 and has two teenagers to see through high school and college, all on a yearly commission that can range from $40,000 to $80,000.
SUSAN FORREST REYNOLDS, REAL ESTATE BROKER: I don't think that we think, oh, , I've got to remember to save for retirement. We don't. I think we're saying I have to remember that the rent is due and I have to remember that the kids need new shoes and we have the SATs to pay for.
UNIDENTIFIED MALE: OK, so it's going to be going to that.
WILLIS: Whatever the day-to-day pressures, the advice is, start saving now, however small the amount.
UPDEGRAVE: If you don't have a 401(k) plan, there are plenty of mutual funds that will let you put in a certain amount each month. They'll take the money directly out of your checking account.
FARMER: Thought I'd be on the other side of the golf course, where I'd be playing, talking to the guy that's cutting the grass, versus being the guy that's cutting the grass, watching the people play.
UPDEGRAVE: That's the way the retirement world is today. It's on you. The illness is on you. The government isn't going to take care of you, the company isn't going to take care of you. You have to put the money aside and then you have to decide how to invest it.
(END VIDEOTAPE)
WILLIS: Bottom line, don't be discouraged. You can make your retirement happen if you just start saving now.
O'BRIEN: Some seriously tough stories. OK, let's get into the math. How do you calculate how much money you're going to need to retire?
WILLIS: Well, there actually is an easy to calculate number that you can come up with. We're going to show you how. Let's say you're starting with $50,000. You're an employee working, you're at the threshold of retirement. Here's what you do. Experts say that you take 75 percent of your pre-retirement income, will be what you need each and every year. That's $37,500 in this example.
Now we want to take away Social Security, because you will have something from Social Security at the end of the day. In this case, it's $17,500. And then you subcontract $17,5000 from the $37,000, you come up with $20,000. That's the money that you're going to need to come up with each and every year. Take that number times 20 and now you know the total amount of money that you're going to need to retire on. In this case, it's $400,000.
O'BRIEN: I understand how you're coming up with the $20,000, but where did you get the $20 from?
WILLIS: That's a rate of withdrawal. We're assuming you're going to take out five percent each and every year from the cache of money you've set aside.
O'BRIEN: So you think it's going to last about 20 years. What else? Are there any other creative ways to do math to say, OK, I got to get to that magic number of, in your example, $400 grand. What else can you do?
WILLIS: Well, Soledad, a couple of things to think about. You can always downsize your home. If you're short of money, obviously, you might want to think about that. If you have a pension, that's going to contribute to the amount, as well, and you might also want to think about a reverse mortgage if you want to stay in that house and yet tap that equity in your home that you've worked so hard to save.
O'BRIEN: We've got much more to talk about, of course, because it's a week-long series. What are you talking about tomorrow?
WILLIS: Well, tomorrow, as you know, with an unclear future for Social Security, the elimination of pensions and unpredictable 401(k) returns, many Americans will be forced to work past retirement age. You can count a lot of people in that group. Now if you're one of them, we'll talk about what kinds of companies and industries are best to work for.
O'BRIEN: All right. Some really good advice. Some scary statistics, but really, really good advice. Gerri, thanks, we'll see back here tomorrow.
Well, a chain of auto body shops abruptly goes out of business, but it doesn't give the customers back their cars. Andy's got their story. He's "Minding Your Business" up next on AMERICAN MORNING. Stay with us.
(COMMERCIAL BREAK)
HEMMER: OK, welcome back.
JACK CAFFERTY, CNN ANCHOR: Wall Street politics could derail the New York Stock Exchange merger. And a Los Angeles body shop closes its doors with the customers' cars inside.
Andy Serwer is "Minding Your Business."
ANDY SERWER, "FORTUNE" MAGAZINE: All the important news, Jack.
CAFFERTY: There you go.
SERWER: You know this guy Ken Langone, this Wall Street power broker?
CAFFERTY: Yes, I do.
SERWER: Pretty amazing story this morning.
Apparently, according to published reports, he is looking to make a bid for the New York Stock Exchange, or Archipelago or both, very unclear at this point. Ken Langone, a friend of Dick Grasso. There's Dick Grasso, the former embattled head of the New York Stock Exchange. There is Mr. Langone. He is the cofounder of Home Depot, and he was on the board of the New York Stock Exchange, and a very close ally and a close friend of Grasso's, who got very, very, very upset when investigators came after Grasso and tried to recoup all that pay that Grasso took away from the NYSE.
In a recent interview in "Fortune" magazine, this is what Ken Langone had to say about the investigation of Grasso. We don't have our beep working this morning, so I'm going to have to do a lot of beeping here. "They got the wrong beeping guy," Langone told Fortune. "I'm nuts, I'm rich, and boy, do I love a fight. I'm going to make them beep in their pants. And when I get through with this beeping captains of industry, they're going to wish they were in quzinark (ph) at high speed. Grasso gives them back a beeping nickel, and I'll never talk to him again."
I think he's serious, right? It's going to be billions of dollars. He's got his buddies going in on this morning, and it's very possible that -- what he really wants to do is throw a wrench in the whole thing.
O'BRIEN: Excuse me.
CAFFERTY: Just get back? What did you run out for breakfast?
O'BRIEN: They weren't supposed to get that shot of me sneaking in.
SERWER: She didn't like that Langone story, I guess.
O'BRIEN: I liked it. I was watching it from here. I wanted to be closer...
(CROSSTALK) CAFFERTY: You mentioned the car story wasn't important. If your car was in the body shop for repairs, it's damned important, right?
SERWER: That's serious stuff. It's a company called -- yes, especially in L.A. This is a body shop called M-2 in Los Angeles, apparently ran into some financial problems. Over the weekend, 2,000 customers had their cars locked up, locked up. You can't get your car. In other words, if you took your car in there to be repaired, forget about it, you can't get the thing out. There are 27 shops across Southern California. The company ran out of money, and there's no end in sight to this deal. They're looking to raise some money. Company founder Hunt Ramsbottom (ph) said he tried to find a way to...
CAFFERTY: That ain't a name you mess around with.
SERWER: Company founder Hunt Ramsbottom. I thought I said that rather well.
Now if you're in L.A., Jack, you might want to ask people for a lift, or you could ask, say, Eddie Murphy, Paula Abdul.
CAFFERTY: If you get Eddie Murphy, though, you got to dress up like a girl.
SERWER: Halle Berry, Nick Nolte. There a lot of people in L.A. you could ask for rides, right, if your car's locked up?
CAFFERTY: That's true.
SERWER: All kinds of people will give you a lift.
CAFFERTY: What's that guy's name Ramsbottom?
SERWER: Hunt Ramsbottom.
CAFFERTY: He could should consider a change.
Time for "The Cafferty File." Thanks, Andy.
Here in the land of the free, we put people in prison at a higher rate than any country on earth. 2.1 million of are currently incarcerated, which works out to one in every 138 Americans in the joint. The government reports that we were locking people up at the rate of 900 folks a week last year.
Here's a bit of a breakdown: 61 percent of the prison inmates are racial or ethnic minorities. This is scary. Six percent of all black men in their late 20s are in prison; 3.6 percent of all Hispanic men in their 20s are in prison; 1.7 percent of all white men in their 20s are in prison.
Hubble Telescope marks 15 years in space today, arguably one of the great scientific accomplishments ever. Hubble was lifted into orbit aboard NASA's space shuttle Discovery in 1990. The telescope quickly settled long-standing disagreements over the approximate age of the universe. Now estimated at 13.7 billion years. Hubble has opened the universe in ways unimaginable. Its breathtaking stuff we've gotten back from the thing -- like this. That's a picture of our neighboring planet, Mars, pictures of neighboring galaxies. Mars is where Dennis Kucinich lives. Stars located thousands of light years away from the Milky Way.
To mark Hubble's 15th anniversary, check this out, NASA and the European Space Agency released this picture. This is the M-51 Whirlpool Galaxy. It is a galaxy 23 million light years away from Earth. Sadly, Hubble's future is very much in doubt. If nothing is done, the telescope will fail after 2007.
SERWER: I didn't think you liked that space stuff.
O'BRIEN: I was going to say, you never liked space stuff, and you almost sounded like you were waxing poetic for yet a moment.
CAFFERTY: Moving on, bad news for New York's famous red-tailed hawks, Pale Male and Lola. Lola has been sitting on three eggs for about 47 days now, which is a week past her due date. Bird experts say that since the nest contents are not visible, the first definite sign that there are babies will be when Lola bends down to feed them. The hawks were evicted from their upper east side co-op at 927 Fifth Avenue last December, but were eventually allowed to return. Some think the trauma of the eviction might have been too much for Lola. According to Marie Wynn (ph), who's the author of a book on the red- tailed hawks, a previous Pale Male mate failed to produce chicks the year after their nest was disturbed. That was in 1993.
SERWER: Wow.
O'BRIEN: I was two weeks late with my kids. Hope springs eternal.
SERWER: Yes, I hope so.
CAFFERTY: And was the first sign there were babies when you bent down to feed them? Maybe not.
O'BRIEN: Well, yes, it was. Funny you should ask.
Well, guess what? Spring arrived. It's been more than a month. Did you know that?
SERWER: I couldn't tell today, up here in the Northeast.
O'BRIEN: Yes, you could not.
In the Midwest, too. Look at some of these pictures out of the Midwest. When will the folks there going to get a chance to dig out? Forecast is coming up, just ahead on AMERICAN MORNING.
Stay with us.
(COMMERCIAL BREAK)
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com
