Skip to main content
Search
Services


 

Return to Transcripts main page

CNN IN THE MONEY

Texas School Principals To Speak Spanish; Middle East Oil In Question; Wall Street Still Ga-Ga For Google

Aired August 27, 2005 - 13:00   ET

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


ANNOUNCER: From New York City, America's financial capital, this is IN THE MONEY.
JACK CAFFERTY, CNN ANCHOR: Welcome to the program. I'm Jack Cafferty. Coming up on today's edition of IN THE MONEY, say good-bye to the cheap ride. Demand for oil is so strong they can hardly pump the stuff out of the ground fast enough. We'll talk with an energy expert in a couple of minutes, who says the price of a barrel is headed for triple digits and it could happen sooner, rather than later.

Also ahead, return to the lion's den. Journalist Scott Taylor was kidnapped and released by Iraqi insurgents last year. Now he's gone back. We're going to ask him why he'd want to do that.

They all scream for ice cream and a whole lot of other things. Marketers turning kids into demanding consumers, on your dime, and mine. Find out how they do it and how the families wind up paying the tab.

Joining me today, a couple of IN THE MONEY veterans, correspondent Susan Lisovicz, LOU DOBBS TONIGHT correspondent Christine Romans, who has been all over the story on LOU DOBBS TONIGHT about the decline and fall of this country, as encapsulated in a public school district -- Dallas, Texas.

CHRISTINE ROMANS, CNN CORRESPONDENT, IN THE MONEY: Dallas, Texas, the twelfth largest in the country, this week voted 5 to 4, the school board, to require principals in schools that have a majority of Hispanics to speak Spanish. This all started when the parents of all these kids went to an awards ceremony. The ceremony was in English, and they got upset.

They want the principals to speak Spanish, even if the school district is trying to get these kids to speak English for their own good, because all the studies show English proficiency is the number one key to an immigrant being able to be successful in this country.

CAFFERTY: And this -- the students probably can speak and understand enough English to appreciate the awards.

SUSAN LISOVICZ, CNN CORRESPONDENT, IN THE MONEY: One would think so.

ROMANS: It's the parents.

CAFFERTY: It's the parents who refuse, living in the United States, to even make an effort.

ROMANS: Both sides of this --

LAFFERTY: They want the principals to have to speak Spanish.

ROMANS: And both sides of the debate told me it was unreasonable to expect parents to learn English. They live in this country. They speak Spanish. They will only speak Spanish. They are not going to learn English. Is it not up for discussion. They work two jobs and they are not going to learn English. Both sides have told me that.

LISOVICZ: I thought we lived in the land of immigrants, where people came to the United States in search of a better life -- and assimilated. That means they spoke the language of the land. Besides that point, who's paying for this? Who is paying for the teachers and for the principals, or whomever, to learn a language more proficiently?

ROMANS: Apparently, the school district will have to pay for it. That means taxpayers will have to pay for it. The only bilingual that is going to be around here are the students, little kids, who can speak Spanish and English -- and of course, the principals and teachers who are constantly speaking Spanish and English. The parents of these kids -- this is all to get the parents more involved in the education of their children.

There was also an internal Dallas School District report this summer that showed that the schools that had a bilingual principal did not do any better than the schools who had an English-speaking principal.

CAFFERTY: You said it just a few minutes ago. You said the parents were much too busy working two jobs to be bothered with learning English. How is they are going to have time to become more involved in the education of their children? They don't even have time to learn the language of the country where they live.

ROMANS: One of the trustees who is pushing this, a guy named Joe May, he told me something I found very, very troubling. He said 70 percent of the kids in that school district who cannot speak English or limited English proficiency, 70 percent were born in this country. That means in America today we are -- we are raising children who do not speak English. The studies show that these kids, an immigrant who speaks English will earn 20 percent more than an immigrant who doesn't. And someone who speaks fluent English will earn two and a half times than someone who doesn't speak English. It is an economic -- it is a business importance to learn this language.

CAFFERTY: But that's right now. Give it three or four generations. Ain't nobody going to be speaking English in this country.

All right. We'll talk more about it at a future time. Unfortunately we only have an hour here today.

Maybe it's time for gas stations to ditch the pump jockey and hire grief counselors instead. Gas prices hitting a new record on Monday. They backed off a little later in the week. The oil market very jittery over fears of hurricanes and terrorists and all kinds of other things that could possibly interfere with supply.

In fact, one energy expert says the gap between supply and demand is so tight now that a triple-digit price for a barrel of oil might not be that far off.

Matthew Simmons is chairman of Simmons & Company, an investment banking firm that specializes in energy. He's also the author of "Twilight in the Desert: The Coming Saudi Oil Shock and The World Economy."

Nice to have you with us. Thanks for coming on the program.

MATTHEW SIMMONS, SIMMONS & CO. INT'L.: Thank you.

CAFFERTY: There is a heated debate about how much oil is under the ground in Saudi Arabia. How come there's no agreement on what's there? I thought we had sophisticated scientists who could figure this stuff out now?

SIMMONS: You know, astonishingly, we built a global economy in a blueprint for the future on a concept there was an unlimited amount of oil in the Middle East for the rest our lifetime and probably our children's lifetime, and it was also almost free. Yet there was never any verified data to actually prove that, other than stale statistics that lay in the public domain for years and never changed.

And up until the time I started digging through a bunch of technical papers and finally came to the conclusion that it's really very unlikely that Saudi Arabia, or the Middle East could ever significantly increase their oil, it really was a topic no one had thought about.

LISOVICZ: That's amazing because the world consumption, of course, is increasing with the economies, especially in Asia, China, India.

SIMMONS: And the United States.

LISOVICZ: And every day we're reporting outages or civil strife or tropical storms that turn into hurricanes. So how would you assess the situation right now?

SIMMONS: We're in a very deep hole. And it took us about 50 years to get there. We're basically out of capacity, globally, to increase our oil supply by any significant amount. But in the meantime, we built an economy that assumes that oil supply could grow as long as there was demand. We're out of refinery capacity, trying to run our refineries on a 24/7 basis. We barely have time to do turnarounds, which is why there have been so many refinery fires this summer.

We're not absolutely through the driving season yet. Gasoline stocks are so squeaky tight that any little jitter basically sends the market into very nervous state. And the market should be nervous. CAFFERTY: What is it about the sociological or sociopolitical mindset in this country that fails to recognize, in any meaningful way, any of the things you're talking about here?

SIMMONS: I don't know. I think the American people are probably as smart today as we've ever been. We have the greatest transparency. And yet, you know, I read in the paper this morning that Hawaii has just put a cap on gasoline at $2.85 a gallon because it's outrageously high. California, this week, was paying $3.20 a gallon. And I heard people on television in anguish over it; $3.20 a gallon for gasoline is 20 cents a cup. You can go a mile and a half on a cup of gasoline. Try hailing down a rickshaw or a wagon with a horse and seeing if they basically take you a mile and a half for 20 cents.

CAFFERTY: Why is it, historically though, the commodity has been so cheap in the United States, hasn't been that way in other parts of the world that use gasoline?

SIMMONS: Well, in fact, it was so cheap in other parts of the world the governments decided they could put a tax of four to five times on it and people would still pay for it. That should have told us something. We're pricing the raw material ridiculously cheaply.

ROMANS: You know, one thing that people forget, I think, is it is not a commodity like corn. You can't grow more of it.

SIMMONS: No.

ROMANS: This is something that will go away. You say Saudi Arabia's probably peaking here. What about behavior? What about the idea that unless we find some oil somewhere, that ultimately human behavior's going to have to change?

SIMMONS: If, in fact, we are reaching sustainable peak oil supply -- and I think there's an overwhelming amount of evidence to say that day of reckoning is at hand, we might have passed it -- we are going to have to quickly restructure our economies around the globe to actually be far less energy intensive, or we're going to have an unbelievable energy war.

CAFFERTY: I mentioned in the introduction to you, that you see the day coming when we pay $100 for a barrel of crude.

SIMMONS: One hundred dollars for a barrel of crude is very inexpensive.

CAFFERTY: How soon does that get here? Sounds like a nightmarish number. What are the kind of things that can get us there in a hurry?

SIMMONS: When demand exceeds supply, and we liquidate enough stocks to actually have no more stock to liquidate, we have a shortage. A shortage induced by demand versus a shortage by some accident could easily send prices up three-fold, four-fold, five-fold, pick a number. We're barreling towards a world where we're going have a shortage.

ROMANS: Well, $100 crude. Does that spark a global recession?

SIMMONS: No, no. One-hundred dollar crude is basically about 13 cents a barrel for -- excuse me, 13 cents a cup.

LISOVICZ: Right. Matthew, you say oil is cheap. When you compare it to bottled water it is cheap. But the fact is we're already seeing signs that consumers are pulling back. And consumers are the engine of the world's biggest economy.

SIMMONS: You know, it's interesting. I was in a wedding in Nairobi, Kenya, the last week in June. In Nairobi, which is a city now of, greater Nairobi, of almost 9 million people, abject poverty, they're paying $6 plus a gallon for dirty gasoline and dirty diesel fuel. And the traffic congestion in the morning and the evening was just unbelievable. Felt like being in Mexico City.

I don't believe that actually a rise of oil prices of some magnitude will have any -- it will have sticker shock. People will become angry, but it's so unbelievably cheap that we'll just continue to live on our lives. But what we have to do is gear up, and actually create a society that can start being significantly less energy intensive than what we have today.

CAFFERTY: And that requires a change in the mindset that there is absolutely no sign of yet, right?

SIMMONS: No, not yet. Because the price hasn't -- again, I think the economists' idea that price signals work, they're missing history.

CAFFERTY: Yes. Matthew, we have to leave it there. It is interesting stuff. I have a hunch we'll talk about this a lot more.

Matthew Simmons, the chairman of Simmons & Company, and author of "Twilight in the Desert", about the supply of oil in Saudi Arabia.

Thank you for being on the program.

SIMMONS: Thank you for having me.

CAFFERTY: All right. When we come back on IN THE MONEY, Iraq through the eyes of a former hostage. Journalist Scott Taylor thought he'd never get out alive. Now he's gone back. We'll talk to him about why he went back. He actually was a guest on this program when he got out of there the first time. Looking forward to an update.

Also ahead, from the new guy to the big guy, one year after its IPO, Google is being pegged as the next Microsoft. Find out if the stock is doing likewise.

And the fizz goes flat. Some soft drink makers cutting back on sales of their products in school. We'll look at whether concern about pushing marketing to kids is bringing changes to business.

Stay with us.

(COMMERCIAL BREAK) CAFFERTY: Once in a while we change the rules here, put the money stuff on hold when conditions warrant. At this time, conditions warrant.

A while back we spoke with Canadian journalist Scott Taylor about his experiences as a hostage in Iraq. Scott and a Turkish colleague were captured and held for five days last September by the Ansar al Islam insurgents.

He didn't think he'd get out alive. He did. He came back to this country. And remarkably he just recently went back to Iraq.

Scott's with us now to talk about that. He's the editor of the military magazine, "Esprit de Corps" and author of, "Spinning on the Axis of Evil: America's War Against Iraq."

Scott, it nice to see you again. And I mean that in all the ways it would be appropriate to your recent experiences. Good to have you back with us.

What prompted you to go back to Iraq? People that get out of Leavenworth are reluctant to return. Why would you go back there?

SCOTT TAYLOR, EDITOR, "ESPRIT DE CORPS': Certainly not an easy decision to make. I had offers in between to go back. In this case, it was different because I was able to make a difference.

I think that's -- the request was coming from the U.S. military for me to come back, to brief them about who it was they were fighting up in this remote area of Tal Afar, which is where I had been taken hostage.

Coincidentally, they had actually managed to capture one of my tormenters at the same time. So there was two purposes there. One was to come back and see a bit of personal justice on one of my tormenters. And the other one was to try to bring a bit of information.

If a journalist has their work become meaningful, I think that's the best thing we can ever have.

LISOVICZ: Scott, it's fantastic to see you again. And one of the things that was so memorable when we talked to you last time was the harrowing description of not only your captivity, the certainty that you felt what you were going to be killed, but also the fact that it seemed like the entire town was complicit with these -- with your abductors -- that the police force knew about it, that people knew where you were being held. It was complete chaos.

Can you please paint a more optimistic picture, since your return a year later? Is that possible?

TAYLOR: I wish I could. This time I went back I was embedded. I wasn't going back without the full protection of the U.S. military by any means. But at the time we were there, both myself and the Turkish journalist that were held, we had a rare insight into the fact that the police forces were in on this, with the insurgents at the time. The whole background that we got to see is pretty much unseen by most analysts and certainly people that are there covering it.

I don't think that's changed. I was very leery this time about the Iraqi army or police units, which they're depending more upon now and bringing them up to speed. But because of that loyalty thing there, the experience that I had, had. I mean, I was very hesitant to be left alone with those guys one more time.

ROMANS: Scott, you've been critical of Washington war planners who saw this as one Iraq, of liberating one Iraq. And your experiences there in the north you say it sort of proved this is not one Iraq. There are a lot of things about this country that have turned out to be completely different than the war planners had thought.

TAYLOR: This was the encouraging part was this invitation from this Colonel H. R. McMaster. He's the commander of the 3rd Armored Cavalry Regiment. I think it was great initiative on his part, that he went outside the box on this.

I've written many things that are very critical of what the Pentagon's done, just before and certainly even after into this occupation of Iraq. But he said, look, we need to know who we're fighting. This guy has been there. He's seen them. He can brief us on that. The education process is going to help everybody.

So, I salute that. That's why I agreed to do it. It was a big risk for him, I'm sure. He brought me over on his own. It wasn't a Pentagon initiative, it was the commander on the ground who has been there.

That's what I should point out, too. I mean, seeing these American soldiers very few of them did not have a Purple Heart. Ones that we met, these combat soldiers, on their second tour. These guys have been there. It means more to them. That's why they're anxious now to learn about things which I think even the first time they probably could have cared less about.

CAFFERTY: You plan to go back to testify against this fellow they captured, who is one of your abductors. Did you manage to get up close and personal with him when you were over here this last time?

TAYLOR: The original offer was I would be allowed to see him, but in between that time, the unit making arrangements, the judge advocate general's office got involved and applied the rule of law, as they say, in Iraq. I did fill out a witness statement and gave more identification from there. I will testify gladly against him. I did point out also one other individual that they have taken into captivity as well. So it was, for me, very productive. And for a personal sense of justice this guy was a bit of a bully and of all the ones there I'm glad they got him.

LISOVICZ: Scott, as a journalist I'm sure you're aware of the fact an increasing number of polls have shown that Americans are very wary, and perhaps not as supportive of the war as they might have been a couple of years ago. What did you find when you were with American soldiers who were protecting you -- and as you mentioned, many of them Purple Heart recipients, which means they were wounded in battle?

TAYLOR: They're certainly -- the unit I was with, morale was still good. They are not even halfway through their second tour. They're taking it very realistically, if you will. Now they're anxious to find out who it is they're fighting. None of them can see an exit strategy. But they're all desperately trying to find something they can grasp on to.

ROMANS: Scott, quickly, you have a wife, you have a child. I can't imagine they sleep well when they know you're going back Iraq. Can you tell me a little bit about what this has meant for your family over the past year?

TAYLOR: As I said, I had other offers to go back in the meantime, and all of those I turned down. And once I was very close to going. I had two sleepless nights. I couldn't do it, just for my own personal satisfaction. My wife, in this case knowing that it meant something more and she knows what it means to me, she said, yes, go. If it was my mother who hasn't forgiven me for going back. So, no matter how old you get, your mother still has the final word.

ROMANS: Perhaps she knows you did some good over there and maybe helped out the U.S. troops as they deal with this very -- constantly changing, very difficult situation.

Scott Taylor, thank you for joining us. Thanks for being here.

TAYLOR: My pleasure. Thanks.

ROMANS: Coming up after the break, Google grows up. Just a year after its big Wall Street debut, the company's being compared with Microsoft. See if the stock is keeping up with this bullish talk.

Also ahead, turning workers into savers. Washington's cooking up a plan to make 401(k) plans more than just an option. Find out if that's the right way to solve the spending crisis.

And pain at the pump. Money.com's Allen Wastler has some tips on how to conserve gas.

(COMMERCIAL BREAK)

LISOVICZ: Now let's take a look at week's top stories in our "Money Minute".

Mixed signals for the housing market. Numbers out this week show sales of previously owned homes dropped last month, but sales of newly built homes rose yet again. Economists were expecting both numbers to drop. Analysts say low mortgage rates are keeping the housing market healthy.

America Online has agreed to pay $1.25 million to settle an investigation by the New York attorney general's office. Three hundred consumers accused AOL of ignoring demands to discontinue service and stop billing them. The company says it will overhaul its customer service practices as well. AOL is, of course, a subsidiary of Time Warner, which is the parent company of CNN.

And say aloha to a cap in gasoline prices. Hawaii is putting a limit on the wholesale price of gasoline, which should keep costs in check at pump. This move marks the first state cap on gas since 1970s energy crisis. The new law goes into effect September 1.

ROMANS: They grow up so fast, don't they? A little more than a year ago, Internet search engine Google took its first steps as a public company priced at a bargain $85 a share. Today the stock is trading above $280 a share.

Last week the company announced it will issue an additional 14 million shares of stock that would raise more than $4 billion for general corporate purposes. Google won't say what it's going to use the cash for specifically, but it's already building a strong software business, and instant messaging and voice chat service are on the way.

Google is our "Stock of the Week".

And full and fair disclosure here folks, I was completely wrong on Google. I was one of those people out there scratching my head, saying this sounds like bubble vision $85, for an IPO? Are you kidding me? There aren't enough shares out there in the float, you know, the owners and the chief shareholders are going to make all the money and the little guy was going to killed. And I was wrong. Dead wrong.

LISOVICZ: The high so far is about $318 per share. But believe me, you're in good company. I think I was part of the chorus.

CAFFERTY: Everybody was wrong about it. You mentioned that they're going to issue some more stock, raise another $4 billion. Stock's gone from $85 to $285. Been above $300.

You talked about the fact that they're in the software business now. And in the intro or the promo you said, people are saying it's another Microsoft.

Let's remember that Microsoft, five years ago, was a $120 stock.

ROMANS: That's true.

CAFFERTY: And it hasn't been above $28 for about four years now. So I wonder how much of that $280 stock price with Google is oxygen, and how much of is it the real deal?

ROMANS: A lot of people keep saying this is one of the tech companies that has to be kind of a stalwart in your portfolio. Maybe that's how they're look at it like Microsoft. Like this is a company you need to have in your portfolio.

There are new things coming out, this instant messaging that they have. Also some search programs. And they've worked the kinks out of the initial versions. So, I think people like what's coming out of this company in terms of software.

LISOVICZ: No question it's not resting on its laurels as a search engine -- we know how successful it is there -- but going into instant messaging, taking on AOL, with 41, say, million users. Yahoo!, Microsoft -- going after the big boys, and as you mentioned, exposing some deficiencies with Microsoft Windows.

ROMANS: Right.

LISOVICZ: It's very aggressive. And some folks say that's what it needs to do.

ROMANS: Even though I was so wrong in the beginning, I'm not sure I'd buy it here at $280 a share.

CAFFERTY: I was going to ask you whether or not you'd buy this stock now.

LISOVICZ: The P/E ratio is $83.

CAFFERTY: There is a school of thought that says you dance with who brung you. Well, it's not very tastefully put.

ROMANS: I think it's appropriate.

CAFFERTY: But there are a few people in the instant messaging business. And all of a sudden you decide one morning, well, that's what we're going to try to do. You could get your nose --

LISOVICZ: There's a shake-out. There's certainly a shake-out that's going to occur as you find the standard. They don't -- what I understand, I'm not into IM big time, but they don't --

ROMANS: We're big technofolks here at the table.

LISOVICZ: They don't communicate with each other. And that's a problem. So there's some kinks that have to be worked out there.

ROMANS: All right. Working out the kinks that Wall Street is still ga-ga for Google, at least for now.

Coming up on IN THE MONEY, soft landing or hard times? A 401(k) could make the difference when you retire. Find out why having one could become more than just a personal choice.

Also ahead, the way to a parent's pocketbook is through a kid's stomach. See how smart marketing can make a child call the shots at meal time.

And pick this poison. We'll show you a Web site that tells you how much of your favorite caffeinated drink will kill you.

CAFFERTY: Swell.

LISOVICZ: Very nice.

(COMMERCIAL BREAK)

RANDI KAYE, CNNHN ANCHOR: IN THE MONEY continues in just a moment. First, a check of the headlines in the news right now.

The head of FEMA says people in low-lying areas of the Mississippi and the Louisiana coast should get ready to head inland. Hurricane Katrina is expected to hit the area as a Category 4 storm Monday. If people don't leave in 36 hours, officials say, it will be too late. A news conference from the Louisiana governor is expected shortly and we will bring that to you live.

The commission recommending U.S. military base closures said it will deliver its final report September 8. The group says its changes could save the Pentagon $37 billion over the next two decades. The commission's chairman says he thinks a similar review should be done every five to 10 years.

I'll have all of the day's news at the top of the hour. Back to IN THE MONEY.

LISOVICZ: 401(k) investment plans are sold as a win-win. The employee sets aside pretax money each month and the employer matches a certain percentage of it. But some employees never sign on, often afraid they don't know enough about investing. Now the Department of Labor is proposing new regulations to encourage companies to enroll employees automatically.

Joining us now talk about whether this makes sense is Brigitte Madrian. She is a professor business public policy at the Wharton School. Welcome.

BRIGITTE MADRIAN, WHARTON SCHOOL PROFESSOR: Thank you.

LISOVICZ: Automatically the savings rate goes up. That's great, we certainly can use it. But you don't think it's such a win-win, do you?

MADRIAN: Well, as with so many things, the devil is in the details. And there are ways to set up automatic enrollment that work well for employees and there are ways to set up automatic enrollment that might not be such a great thing.

ROMANS: Outside of the details, the idea, though, seems pretty good when you've got a small number of people signing up and those who do seem to dump all of their 401(k) money into their company stock, which we all know is a big no-no. In theory, it's a good idea. So tell me how to make the details better?

MADRIAN: OK. I think the way to think about a 401(k) plan is -- and setting up automatic enrollment -- is how can you do the most good for your employees?

And if the company's offering a match, most employees probably ought to be saving up to the match threshold. And under automatic enrollment, employers have to pick a default contribution rate and a default asset allocation. So if you pick a rate that gives employees the full match and put them into a fund where they're getting a reasonable rate of return, the I think you're doing well by your employees. Some firms, however have set up automatic enrollment with a very low contribution rate, say 2 percent of pay, though the match is offered up to 6 percent. And they'll put the money in something conservative like a money market fund or stable value fund where employees aren't getting hardly any rate of return at all.

CAFFERTY: Are we talking about something that's mandatory for employees here?

MADRIAN: No, it's not mandatory. All automatic enrollment does is it changes the default. What happens if you do nothing? So in a traditional 401(k) plan, the default is, you're not in the 401(k) plan unless you actually take some action, call up the benefits hotline or log on to the benefits Web site.

CAFFERTY: Right.

MADRIAN: All automatic enrollment does is change the default to you automatically in the 401(k) plan unless you do something to opt out. But employees still have the option of dropping out of the 401(k) plan if they'd rather not be participating.

CAFFERTY: And in terms of this amount of money we're talking about, I've got a daughter who works here in New York City. And she can no more afford 6 percent of her take-home pay going into a 401(k) plan -- I mean she barely has enough to pay her rent to the point where dad has to subsidize her every month to make sure she meets expenses.

To suggest that they -- these employers ought to automatically enroll these people at highest rate, that's not practical for somebody who is not making enough money to comfortably fit that into their lifestyle, is it?

(BREAKING NEWS)

KAYE: And right now we'd like to take you live to Louisiana where a press conference is under way, about to get under way there. We are going to hear from the governor of Louisiana -- that is Kathleen Blanco -- and the mayor of New Orleans -- which is where this press conference is taking place -- Mayor Ray Nagin. And they are talking about some of the preparations and the evacuations taking place there in the state of Louisiana. Let's take a listen in.

AARON BROUSSARD, PRESIDENT OF JEFFERSON PARISH, LOUISIANA: ... state of Louisiana, the Honorable Kathleen Blanco.

KATHLEEN BLANCO, (D) GOVERNOR OF LOUISIANA: Thank you, Parish President Broussard. We appreciate this opportunity. We are very concerned about what's going on.

I think everybody is well aware now that Hurricane Katrina is aiming our way. We know that it can shift, little east, little westward. No one really knows exactly where it's coming. But I think it's very wise for all of us to be well-prepared and for each individual and each family to know exactly where they're going to go. I believe it's important to stay calm -- to make rational, calm preparations, and to also to listen to your parish leaders because they know best. We've already asked that the low-lying areas be evacuated.

We just flew over and I looked at the interstate situation, and it is fine until you get into this region, where there are so many people living. And then it's slowing down a little bit. Later on this afternoon, we will be preparing and watching this traffic to make sure that we make the call for a contraflow at the right time.

Now, I do want to say a few things. I'm urging people to be very patient drivers. You're leaving to protect yourselves and your family. A small accident can cause you a lot of frustration and back up traffic dramatically. A big accident can really injure a lot of people. So we have to be very, very careful, as you proceed to make your plans and as you're leaving out.

When the contraflow is in place, if indeed it's called for -- and we believe later this afternoon it would probably be justified -- it's not going to make things as easy as some people might assume. It's going to mean that there are more cars, moving along on our highways.

So again, I'm urging people to be courteous, patient drivers, to be very, very careful, as you move along. Remember your goal. Your goal is to be safe. Your goal is to move along carefully, respect the other drivers. If someone is being impatient, don't respond in like kind. Be patient alongside.

And I think that this will be a very positive experience for the most people possible.

Now remember, there are a lot of people living in this metro area -- 1.5 million. We've got more people living in the outlying areas. We've asked them to leave early. The plan is a good plan. It's a coordinated plan. All of the parishes are working in a coordinated team effort and that is critically important. Please listen to your parish leaders as to the guidance for when you should depart your respective regions.

And I want to congratulate all of these people that I'm standing with -- the parish leaders who are here, the mayors. I think that the important thing is that we work together. We are a team. Everyone has the best interests of our citizens at heart. And that is what our goal is. It's to keep everybody safe and so that you can come back, perhaps we can pray very hard that the intensity will weaken. We don't know what it's going to be yet. But we're all watching the weather service.

I believe that's the best we can do right now. We have been very blessed so far. We've escaped the brunt of most of the hurricanes that have been generated. But now it looks like we're going to have to bear some of the brunt of this storm.

I also have with me General Bennett Landreneau from the National Guard. The National Guard is standing -- is ready. It has been deployed to help out with all sorts of emergency situations. Colonel Henry Whitehorn is here, the state police is working to make sure the contraflow works perfectly with local government. Secretary Johnny Bradberry of the Department of Transportation has his people deployed putting out the equipment necessary to create a contraflow.

Now, remember, it's going to be a little more difficult to enter the region once contraflow is called. So we want people to think about doing what they have to do. And we do have maps at Wal-Mart, Home Depot, and Loews. We have the hurricane evacuation maps available there. They're in plentiful supply at each of those locations. And so we urge you to make your plans, make them thoughtfully, and then just be calm.

And we've got a little time left. But we're going to try to eliminate as much frustration as possible. But we cannot guarantee that it will be frustration-free. Again, that will be up to you to help us to make it as frustration- free as possible. If we have to accidents and we keep traffic moving, then I think it will be the best of all worlds.

Thank you.

BROUSSARD: On behalf of all of the people of Jefferson Parish and the people of the Greater New Orleans Area I would like to personally thank Governor Blanco and the entourage that she has brought to our area at this critical time of deliberation. It shows her commitment and here leadership to lead this Greater New Orleans Area through what could be a very threatening time with this hurricane approaching. And I'm very appreciative that of all of the places that she could be now that she's here with us in the Greater New Orleans Region.

Thank you, Governor, on behalf of all of our citizens. I'd like to make comments and turn the podium over.

This is a day that will demand your full attention and cooperation, people of Jefferson Parish. This is a day that will demand your diligence, your patience and intelligence. This is a day that we are prepared for.

Katrina's ground zero is currently too close for comfort. Jefferson Parish is prepared. We're calm. We're taking measured steps that will enact -- be enacted that will be our best defense.

Every division of Jefferson Parish emergency preparedness is at full alert. We're ready for the projected landfall and any deviations from that projected landfall. Now let me turn my attention to your responsibilities regarding this storm. There's a mandatory evacuation of Crown Point, Baritaria (ph) and Lafitte presently. There's also a mandatory evacuation of Grand Isle presently. I'm enacting a voluntary evacuation this time for the remainder of Jefferson Parish.

Those in our neighboring low-lying parishes are beginning evacuations and have begun so as early as 9:00 this morning. Once they pass safely and unimpeded through Jefferson Parish, along the evacuation routes, then it's my hope this that those Jefferson Parish residents who want to evacuate will begin to do so. This storm is unpredictable, as the governor said. Your early, voluntary evacuation will prevent congestion later. We're cooperating with the Louisiana State Police, governor's office, and taking the direction from those law enforcement leaders to ensure that those traffic movements will be smooth and will be managed properly.

Now a personal message. We collectively are among the world's foremost authorities in protecting ourselves from a major hurricane threat. Remember what you have learned throughout the years of experience here in the Greater New Orleans Area in fighting hurricanes. Use your common sense. Listen to your local newscasters as they prepare you for the storm. And err on the side of caution.

With those comments, I'd like to bring the Dr. Mestrid (ph) to the forefront. I want to announce, before we bring him, these are the zones that I'm recommending voluntary evacuation in Jefferson. If the people of Jefferson Parish will cooperate with the zoned evacuation, we will not have the congestion of Ivan.

Please note that I am not asking any west bank resident to use the Huey Long Bridge at all. Using the Huey Long Bridge causes severe bottleneck congestion, crossing into clear view as it intersects the I-10. Please note we are not encouraging any west bank resident to use the Huey Long Bridge at all.

Here are the zones that are recommended for voluntary evacuation in Jefferson Parish. Zone one, if you are east of the Harvey Canal on the west bank, cross over the Crescent City Connection, go along the I-10 interstate system, until you reach Interstate 59 north and then take it north. Book your rooms in Jackson, Memphis, anywhere along those corridors that you can book your rooms. But head north in that direction. If you are on the West Bank on the west side of the Harvey Canal, take the West Bank expressway to highway 90, and then cross at Interstate 310 at the Looland (ph) Bridge west on to Airline Highway and then keep on Airline Highway all the way through Baton Rouge, all the way to Appaloosa before you cross on I-10 around Lafayette.

On the east bank, if you are on east side of Causeway Boulevard, we urge you to take the Causeway Bridge, across Lake Pontchartrain, all the way up to interstate 12 then head west and get on I-55 and head north out of the area. Again, through Jackson, through Memphis, take that route. If you are on the west side of Causeway Boulevard, you have at least three options. You can take the Interstate 10 all the way into Baton Rouge. You can take airline highway all the way through Baton Rouge, the old route, all the way to Appaloosa.

Or if you wait until the state takes some action, at some later point in time if they take a contraflow action, then you can take contraflow all the way through to Baton Rouge but I-10 at that point will not be allowed on your normal western path. You will only be allowed to take I-10 West to I-55 and then go north if you're in the conventional westbound lanes. Those are the proposed voluntary evacuation routes by zone.

And now I'll turn you over to Harry Lee (ph), well, Dr. Mestrid (ph) first, then Sheriff Lee, then Parish President Benny Rousselle from Plaquemines. And that will conclude our conference. We will take your questions after that. KAYE: And you are listening there live to the press conference in the state of Louisiana, the city of New Orleans. You've heard from the governor of Louisiana, Kathleen Blanco and Aaron Broussard who is the Jefferson Parish president, talk about the plan for when Hurricane Katrina does make landfall along the gulf there, the Gulf Coast.

They are expecting to be hit there in the city of New Orleans as it looks right now. They are watching the traffic flow. You heard them talk a lot about the contraflow. I want to explain what that is.

Contraflow means they would take the lanes, highways, streets and put them all in one direction which would prevent people from heading into the state of Louisiana. So all of the highways would be directed out of the state of Louisiana. That's what they call contraflow.

They do expect that to be in place sometime this afternoon at the earliest. Right now you can still get in and out of the state of Louisiana.

They're urging people to be patient. They want drivers to be patient. They want everyone to work together. The National Guard, we have learned, has been deployed and is ready. There are some mandatory evacuations already under way in some the low-lying areas, but still most areas are looking at voluntary evacuations right now. The governor calls the residents there of Louisiana hurricane smart. They've been through this before. The mayor is asking people -- very likely asking people to leave at daybreak on Sunday. That could be a mandatory evacuation.

We'll return you now to IN THE MONEY.

(END BREAKING NEWS)

(COMMERCIAL BREAK)

CAFFERTY: Well, unless you've been in a cave, you know gas prices are hitting record highs in this country these days. Earlier this week they tested another new mark and then they came off a little bit. In this week's "Inside Out" Money.com managing editor Allen Wastler hit the road to clear up common gas-saving myths.

(BEGIN VIDEOTAPE)

ALLEN WASTLER, MONEY.COM MANAGING EDITOR: Oh, boy. This is a painful experience, isn't it? But you know what? There's some things you can do right and some things you can do wrong to make it somewhat less painful.

I'm already doing something wrong. I'm buying my gas next to a highway. You see, gas prices tend to be higher next to the highway. The gas companies know, hey, there's go to be a lot of people commuting, whatnot so they jack up the price a little bit more. Maybe going out to suburbia, maybe something more pastoral, the prices will be a little bit lower.

Another big gas eater is air pressure. Believe it or not, if you're just three pounds low in air pressure, you could take more than 1 percent off your fuel efficiency. Of course, there's also a trade- off between what it saves you in gas and what it costs you in air. Usually you'll save more in gas than the air.

One of the things that's probably the most important for saving gas is to do a smooth ride -- no quick stops or starts -- with smooth transitions from one speed to another. Speeding and jerking around is what will really cost you in gas mileage.

Another thing you can do to save on gas, turn your AC off and just roll around with the windows down, keep you cool. That works OK for low speeds. But keep in mind, when you're going at highway speeds, rolling down the windows changes your aerodynamics. And the drag effect could end up costing you more in gas.

Of course one thing to always keep in mind, when you speed, you bleed. Lots of gas. If you want to save on your gas costs, lay off of the lead foot.

One final thing. Travel light. You don't want to be wasting gas carrying around stuff you don't need.

(END VIDEOTAPE)

WASTLER: See, carrying around extra weight in your trunk or backseat means your engine's going to have work harder to get it going forward and that of course means more gas.

CAFFERTY: What was that bumper sticker?

WASTLER: That bumper sticker was an ancient relic of days gone by.

CAFFERTY: Historic landmark here at CNN.

WASTLER: Back when we used to do an early morning show together.

ROMANS: It was a cult show. I want every New York City cab driver to watch your piece. There's a lot of myths. I argue with these guys about the windows and air-conditioning. Barreling down, start and stop, stop and start.

LISOVICZ: New York City, it's hard not to do stop and start.

CAFFERTY: There's an upside to driving with windows down at high speed. You can't hear the person on the other side of the front seat who is telling you how to drive, or where to turn, or why you didn't go where you were supposed to be going.

LISOVICZ: I hope Mrs. Cafferty isn't watching.

WASTLER: What did you say, sweetheart? I can't hear you.

ROMANS: Mrs. Cafferty is always driving, so Jack's talking about himself.

CAFFERTY: What is the "Fun Site of the Week"?

WASTLER: Well, we were talking about sodas early in the show. Death by caffeine. How much of your favorite drink could do you in? We do a lot of coffee around here. It's a newsroom, right. So you put in, go to the Web site put in how much coffee for a 170-pound person, 107 cups of coffee. Boom, that's it.

CAFFERTY: Like in ...

WASTLER: In a continuous taking. That's what we're talking. We tried Diet Coke. I see a lot of people drinking Diet Coke in the newsroom. That, that will give you 204 on the Diet Cokes, that will do you in.

Now the real surprising one to me, Red Bull. Ever seen Red Bull?

ROMANS: Sure.

WASTLER: That's that small thing.

CAFFERTY: Energy drinks.

WASTLER: Kids drinking it. I see them at my karate school they do that before a match. Well it would take ....

LISOVICZ: ... Illegal substance ...

WASTLER: For a 170-pound person it would take 145 servings of that. Think about that. The coffee, the coffee at 107 is more dangerous than the Red Bull. Go figure. There's another case of making you think something's ...

CAFFERTY: That is considered doping if kids drink Red Bull before a karate match in your school?

WASTLER: Not our school. There's a lot worse things.

CAFFERTY: Thank you, Allen. Coming up next on IN THE MONEY as we continue it's time to hear from you as we read some of your e-mails from the past week. We should do a piece on your school one of these days. Maybe we will. You can send us an e-mail right now. We're at INTHEMONEY@CNN.com. Write to us. We're lonely.

(COMMERCIAL BREAK)

CAFFERTY: All right. Gather around, kiddies. Time to read your answers to the question of the week from last week which was as follows. Do you think extending Daylight Savings is a good idea? I wrote in it's a terrible idea. Other viewers wrote as follows.

Billy Ray writes, "In a word, 'No,' you can't change time you can only change what time you do things." Which is entirely too complex for the staff on this program.

Glen says, "Jack, you're right. Extending Daylight Savings Time does absolutely nothing to remove my pain at the pump and if nothing else, gives people an extra hour to run around and burn more gasoline," which is true. Have those Little League Baseball games going an hour later at night, people just do more riding.

Sy rights this: "The only good I can see about extending Daylight Savings Time is that maybe the extra daylight hours will help Congress see more clearly the bills they are passing and they won't pass so many stupid bills." Dream on, young man.

Time now for next weeks e-mail question of the week which is this. Are Americans responsible enough to save for their own retirement?

Send your response to this at INTHEMONEY@CNN.com. You should also visit our show page at Money.com/INTHEMONEY, which is where you'll find the address for our fun site of the week. Find out how much caffeine in your favorite drink it will take to kill you.

Thank you for joining us for this edition of IN THE MONEY. My thanks to CNN correspondent Susan Lisovicz, LOU DOBBS TONIGHT correspondent Christine Romans, and Money.com Managing Editor Allen Wastler.

We're back next week Saturday at 1:00, Sunday at 3:00. Hope you can join us. Until then, enjoy the rest of your weekend.

END

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com

Search
© 2007 Cable News Network.
A Time Warner Company. All Rights Reserved.
Terms under which this service is provided to you.
Read our privacy guidelines. Contact us. Site Map.
Offsite Icon External sites open in new window; not endorsed by CNN.com
Pipeline Icon Pay service with live and archived video. Learn more
Radio News Icon Download audio news  |  RSS Feed Add RSS headlines