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Wall Street On Edge About Interest Hikes; Companies Are Preparing For The Worst In Case Of Bird Flu Pandemic; Microsoft Shares Slip After Vista Delay; Branson Wants Virgin To Take Flight; SUV Sales Decreasing; Americans Turning To Software To Help Navigate Through Tax Forms In Record Numbers

Aired March 26, 2006 - 15:00   ET

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

(NEWS BREAK)
JACK CAFFERTY, CNN ANCHOR: Welcome to the program. I'm Jack Cafferty. Coming up on today's edition of IN THE MONEY, rate hike roulette. Ben Bernanke holds his first meeting as Fed chairman next week, with Wall Street on edge. Find out if interest rates could be headed even higher.

Also ahead extra Virgin, we'll hear from chairman Richard Branson about his business empire and find out why his Virgin America Airline isn't quite off the ground yet.

Plus heavy traffic, drive a huge SUV these days? You can probably count on dirty looks. With sales dropping, we'll see if the larger models are headed to the way of the dinosaurs.

Joining me today CNN correspondent Susan Lisovicz and "Headline News" correspondent Jennifer Westhoven. Next week marks the end of the first quarter. Earnings season will start ramping up. We'll start getting some of the quarterly reports on corporate earnings.

The rumor is that they should be pretty good. We've got a Fed meeting next week. Rates maybe headed up. The question is how much higher are they going to go? Low inflation in the pipeline, stock market hovering near five-year highs, kind of a mixed bag.

SUSAN LISOVICZ, CNN CORRESPONDENT: I actually think things are looking really good, in fact. There's been a lot of talk, Jennifer; you probably heard it as well about the Goldilocks scenario. The unemployment rates at 4.8 percent, as you mentioned Jack. The Dow is about 400 points from its all time high. The S&P 500, the folks there is expecting 11th consecutive quarter for S&P 500 companies to hit double-digit profits. Things are looking pretty good.

JENNIFER WESTHOVEN, CNN CORRESPONDENT: I just really am keeping my eye on the housing market. We had one report this week that was great if February, and one out today saying new home sales down 10 percent. They look bad. I feel like for most people that is a really good place to watch in terms of how people are feeling about their spending, about the economy.

CAFFERTY: That's going to be an interesting couple of weeks as we kind of transition into the second quarter, get past the Fed meeting, and see how the market takes it all.

It's not often words count more than numbers on Wall Street but next week is one of those times. The new Fed boss Ben Bernanke scheduled his first Fed meeting as chairman. The two-day affair raps up next Tuesday; the Fed is widely expected to deliver another quarter point rate hike.

But the street is much more interested in the language that comes out of the meeting and whether or not there might be some indication from Mr. Bernanke that the Fed is getting close to being finished in this 18-month plus series of rate hikes, quarter point hikes. For a look at the big picture and what it means for your money we're joined by John Rutledge, the chairman of Rutledge Capital, a private equity investment firm. John nice to have you back with us.

JOHN RUTLEDGE, CHAIRMAN, RUTLEDGE CAPITAL: Thanks, Jack. It's great to be with you today again.

CAFFERTY: You know it's almost like we planned this thing. At the time we taped the show on Friday. The last time you were here, you suggested that sometime this year 2006 housing was going to start to go the other way. We've had a tremendous gain in real estate prices, home equities rising, home prices rising. Very low interest rates, very friendly environment.

All of a sudden, the morning we tape the show, out comes a report that new home sales actually turned around and went south much more than expected. Down 10.5 percent and more unusual than that is the decline in the median home price of some 3 percent, which is something that very seldom happens. What's going on here, do you think?

RUTLEDGE: Well, Jack, I knew I was coming on today, so I have a friend at the Commerce Department. Who rigged the numbers for me? I think this is part of the Goldilocks story that I think Susan was talking about. We had a big run-up in the house prices. It was all interest rates. Interest rates aren't going down anymore, I don't think they are going up too much either. But the fact is they've topped out.

For the rest of the year I suspect you won't see prices decline much on houses, but you'll see huge inventories form and pipelines of builders come out. The builder stock prices are a good tip-off to what we're seeing. They're done big time. It's a great environment for the stock market, great for profits, and great for economy growth all together.

LISOVICZ: Right, so things really aren't that bad John. Because before we got the new home sales we got the existing home sales. The existing home sale is the biggest part of the housing market. It's actually pretty healthy. I mean, we actually had a big jump, the biggest jump in two years when the market was really expecting a decline. This is actually a pretty healthy scenario, isn't it?

RUTLEDGE: It's not bad, you know. Year over year, the prices are up 10.5 percent. Last year they were up 12.5 percent. If you look at the hot markets, which are both close, the top end, high end houses are cooling off in both places, and inventory is starting to form. It's also forming in multi-families and condos, so I don't think you're going to see a big collapse of housing prices. I think you're just going to see housing no longer a way to make easy money.

And you're going to have to go to the stock market to make your money. That's not all bad because the stock market is where companies go to get the capital they need to grow their businesses.

WESTHOVEN: All right. I'd like to switch topics here to Ben Bernanke. For all of my professional life, it's only been Alan Greenspan as the head of the Federal Reserve. Here we've got a completely new person. A lot of people trying to make sense of what kind of language to use, what he's going to be talking about? What do you make about this guy?

RUTLEDGE: Well the first place is neither one of them have very much hair. So they're really quite similar.

CAFFERTY: Careful, John. I'll cut the segment short.

RUTLEDGE: I beg your pardon. You know, Ben Bernanke is, in some ways, the best chairman we could have gotten here. Ben is a very smart guy. He's written extensively in the area. But most important, he's not a very exciting guy. He's not a guy that's going to make headlines. He doesn't make love to the camera the way Alan did. So you're going to see him in the news less.

LISOVICZ: Wow.

RUTLEDGE: You'll see him less in the news and more in the Fed, where he really belongs. But most importantly, I think Ben has a much better understanding of the resale secondary market, or asset markets, as opposed to GDP. As you were talking about a minute ago, Susan, the existing home sales are much more important than new sales. Why? Because there are a lot more old houses than new houses.

Asset markets in general are much more important than GDP accounts. Ben has written some things about that, and he's really pretty astute on that. So I think he's going to be OK if he can get past his introductory period of having to prove his man hood.

CAFFERTY: The only thing that he's faced with is he's coming on board at the end of a long series of rate hikes. And you mention that things look pretty good for the stock market. The quickest way to kill the stock market is just keep jacking up interest rates. There is a little inflation around, PPI out last week up .3 percent without food and energy, little stronger than expected.

Nevertheless, there have been some rate increases. Put Bernanke with the scenario that he's faced with and give us your best guess on what the Fed may be thinking in terms of moving forward over the next three to six months.

RUTLEDGE: Well, on Tuesday this week, there is a 200 percent probability that they'll increase rates by a quarter of a percent.

CAFFERTY: Right.

RUTLEDGE: Absolutely done deal. The reason is that's Ben Bernanke's little blue pill. It's what it takes in order to convince Wall Street that he's up for the job.

CAFFERTY: That's very funny.

RUTLEDGE: And he's going to have to do that this time, maybe next time. I think they pushed the rates up too much. But really to understand that, I think we have to think about how these rates work. The textbooks all say the rates go up; everybody goes home and calculates how much capital to spend. That's not how it happens at all. The rates go up, up, up, up until they get to the point where banks stop lending all together.

And when banks stop lending all together, the economy collapses. I think we're a ways away from that because the credit markets are very flush right now. But sooner or later, if you raise the rates enough, you'll kill the economy.

LISOVICZ: But so far that hasn't happened thankfully, and hopefully Mr. Bernanke, who doesn't make love to the camera like his predecessor, is in charge. Can you, John, just quickly address this stealth bull market that has really taken a lot of people by surprise, 2006 has been a stellar year so far for the markets, and people are only starting to realize with the Dow within reach of its all time high. Do you think it's going to continue with this kind of momentum all year?

RUTLEDGE: First of all, let's not tell everyone because I'm fully invested, and I'd like to make a lot more money out of this deal quietly while the market is going up slowly. The fundamentals are extraordinary. The economy has grown for some period now. It's still growing 3, 3.5 percent. Profits are growing more than 10 percent, investors have more than $1 trillion sitting in money market funds like a drawn bow string ready to invest.

Corporate managers have more than $1 trillion -- excuse me. Both these numbers are 1 trillion -- off to the side that they haven't invested either. Why are they waiting? They're waiting because, really for the last four years, people have been pretty frightened.

And that frightened feeling is partly what gives us the big stories. It gave us the Dubai reaction, the political shrieking around protectionism. But it's also kept money out of the market. I think there's room for the market to increase substantially especially in areas where there's something good happening fundamentally.

CAFFERTY: John, it is always a pleasure. Nice to have you with us. Thank you.

RUTLEDGE: Thanks, Jack. Nice to be here.

CAFFERTY: John Rutledge, chairman of Rutledge Capital.

When we come back on IN THE MONEY, bird watchers. An avian flu pandemic could rock the business world if it ever happens. We will see what companies are doing to get ready for the worst.

Plus lift tickets. It's taken a while for Richard Branson's new U.S. Airline to get off the ground. We will find out why.

And later, in God they trust. Allen Wastler of Money.com is going to tell us about the rise in faith-based investing. Stick around.

(COMMERCIAL BREAK)

CAFFERTY: It's hard to tell how much the bird flu coverage is hyped these days and how much is really worth worrying about. But companies have to prepare for the worst even if it never happens because if a pandemic comes and the work flow stops, business suffers. And if the supplies and services run dry, you and I are going to suffer too.

Steve Ross is going to tell us about that. He's the global leader of the Business Continuity Management Practice at Deloitte & Touche. Steve good to have you with us thanks for joining us.

STEVE ROSS, BUSINESS CONTINUITY MANAGEMENT PRACTICE, DELOITTE & TOUCHE: Pleasure being here, thank you.

CAFFERTY: What are you telling your clients about what they should be doing, and how do you decide whether you're doing too much? I mean some of these preparations cost money.

ROSS: What we're telling them exactly is it's time to prepare. That if you wait until the event occurs, if there's an outbreak of the pandemic, not only will one-third of your people be ill, but one-third of management will be ill too. So the decisions that have to be made will be made by people you wouldn't trust to make them today.

WESTHOVEN: There are a lot of charges that we in the media, as a whole, may be hyping this bird flu. Can we talk a little bit about what are the realistic chances of this? What are government bodies or health organizations talking about in terms of the chances of this happening? And of course it is worth mentioning that of course it is your job to make sure that companies are prepared for it. But with all that said.

ROSS: I don't have any more of a crystal ball than anybody else, but I do have the ability to look backwards. Historically, since the 15th century, there have been three major pandemics every century. In the 20th century, we had one in 1918 known as the Spanish flu in '57 the Asian flu, in '68 the Hong Kong flu.

That was 38 years ago. Every day that passes, we're living on borrowed time. I have no idea, neither does any other reputable researcher, that this particular H5N1 virus that's affecting birds will someday affect human beings in any massive scale.

LISOVICZ: Steve, basically, if you're a bird, there's a pandemic, if you're a human not the case. Did we learn anything from SARS? I mean, there was a big hysteria about SARS, and that seems to far away, so long ago. Same thing with Y2K. Are there reasonable things that should be done, and are things that should maybe be on the longer -- on the horizon that maybe businesses should just be thinking about?

ROSS: I think Y2K is a perfect example. It looked to the world as though nothing happened. And nothing happened because millions, probably billions of man-hours were spent preparing so that, when it happens, when it happened, we would be OK.

The difference with pandemics and Y2K is Y2K, we didn't know what was going to happen, but we knew exactly when. Here, we have a pretty good idea of what's going to happen. We don't know when. But everybody that I speak to says it's not a question of if. It is a question of when.

CAFFERTY: What kinds of businesses are most vulnerable if this thing hits?

ROSS: I think that the businesses that have a lot of labor- intensive work in industries where people can't work from home. One person I know said you can't make steel from home. If you have to come in to work and you have to work together, usually with specialized equipment, they're going to be the ones that are most effective.

WESTHOVEN: There are so many variables in this kind of a situation. But what are some of the behaviors that you think you can count on that Americans will do if we have such a pandemic?

ROSS: I think that we should all be prudent. It's a matter both at the personal level, the corporate level, and the social level of what we call risk intelligence. Be prudent, think about what the real risks are, take appropriate actions, anticipate rather than react.

CAFFERTY: The other thing to do is to get that -- those cans of tuna and that box of powdered milk and get them under your bed right away, right?

ROSS: It probably wouldn't be a bad idea to stockpile a few things. But you know what, for the next time the power goes out, it's not a bad idea to have the tuna. And for the next time that the truck drivers go on strike, it's not a bad idea to have the tuna. Again, it's a matter of being prudent.

CAFFERTY: Steve, we got to leave it there. It's interesting stuff. Let's hope it doesn't happen. Steve Ross, the global leader, Business Continuity Management Practice at Deloitte & Touche, nice to have you with us.

Now it's time for this week's look ahead. Here it is.

As we mentioned earlier on Monday and Tuesday, Ben Bernanke will chair his first Federal Reserve policy meeting next week. A decision on a rate hike will be released on Tuesday afternoon. A quarter point rate hike is baked in the cake. The thing to stay tuned for is the language, what are they going to say when the meeting is over. Also on Tuesday, the conference board releases March consumer confidence numbers. And on Thursday, the Department of Commerce and the Bureau of Economic Analysis will release its final revised report for GDP, gross domestic product, for the fourth quarter of 2005.

Coming up after the break, from ho ho to no, no computer makers hoping for a hot new Microsoft operating system just in time for the holidays, out of luck. Find out what that means for Microsoft stock and the stock of some of the computer makers as well.

Plus later, that's not a car. That's a gas sucking ego on wheels. Sales of monster SUVs are off lately. See if it's because nobody wants to drive something that everyone else thinks is obnoxious.

And man versus mouse. Sometimes it makes more sense to hire an accountant than to file your own taxes online. We'll help you make the right call on that deal. Stay with us.

(COMMERCIAL BREAK)

LISOVICZ: Shares of Microsoft slipped on Wednesday after the company announced it's delaying the release of its new operating system Vista. Vista won't hit the shelves now until January of 2007, after the critical holiday season. Following the announcement, the software giant shook up the management team overseeing Vista's development.

Microsoft stock hasn't done much lately, but it did drop about 3 percent on that news. PC makers and electronics retailers counting on that holiday boost from Vista lost a little ground as well. And that makes Mr. Softy our stock of the week.

I sense there's some apathy amongst my peers here. It's interesting. You have to say it. When it comes to operating system, Microsoft has been the only game in town. Think about it. There's two times a year when people in droves buy computers, back to school and the holiday season. And it's missing both of them.

WESTHOVEN: But who gets this for Christmas? Come on.

LISOVICZ: But people buy computers with the new operating system. Well, I guess, you know, maybe nerds, geeks. There are a lot of them.

WESTHOVEN: Maybe nerds. I have a hard time getting excited about the story. For Microsoft, they don't exactly miss out on market share.

LISOVICZ: There's going to be a delay, there is no question about it. Microsoft will reap it all back in the first quarter of '07.

CAFFERTY: You know who gets hurt is Dell and Gateway and people like that who have the darlings that want a laptop for Christmas and trade in their desktop. Nobody going to out and buy a computer if they can't get the new operating system, they will wait six weeks till January or February and get it then. I suppose the computer companies make up the revenue after the first of the year too, but that screws up their books for the end of the year, the fourth quarter.

LISOVICZ: You know who could be having the last laugh actually is a little stock called Apple. Apple shares have done fantastic over the last few years, we all know that, where Microsoft has been stagnant. And Apple has been diligently upgrading its O.S., its operating system, and it may get a nice boost over the holiday season actually.

WESTHOVEN: It's smart for Microsoft to say they care about bugs and viruses and they want to be secure because they've really gotten hit in the past.

LISOVICZ: They care about the bottom line too.

CAFFERTY: You know who's going to have an even worse holiday season than Dell and Gateway? The morons at Microsoft who didn't get this thing done on time?

LISOVICZ: There's a little bit of a shake up.

CAFFERTY: They're going to have a real crummy Christmas.

LISOVICZ: That may be the more important news that came out this week.

Coming up on IN THE MONEY, from filling your tank to ditching that junk in the trunk. Richard Branson's virgin brand pitches everything from fuel to health clubs. We'll hear about his latest U.S. venture.

Plus thinking smaller. Monster SUVs are losing out to regular automobiles in the sales game. We'll look at why the market's changing.

And aiming high. See how a couple of photographers pulled off a career switch in our "Life after Work" segment.

(COMMERCIAL BREAK)

(NEWS BREAK)

WESTHOVEN: Richard Branson's business empire has more than 300 different companies and stretches around the world. His Virgin brand covers everything from music mega stores to mobile phones. Critics say that can dilute a brand, but Branson disagrees.

Now our Andy Serwer is on vacation. But we still have his "View from the Top."

(BEGIN VIDEOTAPE)

SIR RICHARD BRANSON, CHAIRMAN, VIRGIN GROUP: How are you doing? You have to be good at leading people. You have to be good at motivating people. You have to be good at inspiring people.

ANDY SERWER, MANAGING EDITOR, "FORTUNE" MAGAZINE: Ranks is one of the richest people in the world, the optimistic Branson knows how to get what he wants. And what he wants right now is for Virgin America to take flight.

Branson new venture is a joint business with U.S. Partners. But some major American airlines are challenging the effort, charging it doesn't meet federal regulations for a U.S. carrier, and the application is currently under review. Don't think the delay is holding Branson back from taking care of other business, like exploring new opportunities in developing countries.

BRANSON: The fun thing about Virgin is we've got different things going on all over the world. We're setting up a lot of business in Africa, which are creating jobs for Africa. We set up a national airline for Nigeria, and we've got the biggest chain of health clubs in South Africa.

SERWER: This, in addition to launching Virgin Home Loans in Australia and launching people into outer space in a couple of years with Virgin Galactic. Another item on Branson's mind, powering the world without relying on oil.

BRANSON: One of the good things about these high fuel prices is it's actually beginning to register in people's pockets, and therefore thinking about hybrid cars, thinking about mixing their fuel with ethanol. These things are things, which Americans are beginning to think about.

SERWER: And like he's done so many times in the past, Branson is actively creating the world he wants to live in. He's building something called Virgin fuels, which he claims is an environmentally friendly source of energy.

BRANSON: I'm spending sort of 50 percent of my time seeing whether we can bring our entrepreneurial business skills to socialist use and see if we can address them maybe slightly differently than they've been addressed in the past.

SERWER: Back in Britain, Branson is moving forward with Virgin television. And in China, he's starting a mobile phone company.

BRANSON: What I enjoy is the diverse nature of the Virgin Group. Every day, we're learning something new.

SERWER: From crossing the Atlantic Ocean in a hot air balloon, to starring in his own television show, "The Rebel Billionaire," you get the feeling that Branson truly understands work and play and remembers the basic principle of business that helps explains his success.

BRANSON: You have to be good at looking for the best in people and praising people. A company is its people. If you're good at doing that, you should be able to stay with a company and being there throughout your life. If you're not good at doing that you should be kicked out.

SERWER: I'm Andy Serwer, CNN, New York.

(END VIDEOTAPE)

WESTHOVEN: It might seem like everything Richard Branson touches turns to gold. As Andy mentioned, his Virgin America Airline venture isn't off the ground yet. It's still waiting for federal approval. Legally, any airline that flies throughout America may not be controlled by a foreigner. Branson's got a 49 percent stake in Virgin America, so it's legal. But U.S. competitors have complained to the Department of Transportation. They charge that Branson will really be the one who's calling the shots.

CAFFERTY: So what's wrong with that? If he's obeying the law, he's obeying the law. These guys should quit whining or else go open a crop dusting business in Bolivia or something. I mean 49 percent is not controlling ownership. What's the deal?

LISOVICZ: Talk about an industry that needs it. Whether it's the airline industry or the car industry, it needs cash bad. It needs energy. It needs vision. Richard Branson, he's colorful. He's got cash. He's got ideas. And meanwhile, we have, what, four of our major airlines that have been in bankruptcy in recent years or are still struggling to get out of it?

WESTHOVEN: Well, I mean, obviously, they're scared, though, of any more low fare competition. That's what's killing some of these guys out there. You got Branson coming in with low fares; he's famous for that, and that kind of vision. That could really shake it up. You could see why they're whining.

CAFFERTY: On the other hand, maybe this is the end of his winning streak. Why would you want to start an airline in this country today? Look around. They're all in bankruptcy. They can't give the seats away. And yet he wants to come in here and get started.

LISOVICZ: Because it's the biggest market in the world. If you're going to continue that it is a global economy after all. And, you know, people do fly here. They fly in. They fly out. If that is one of the pillars of your empire -- Jack, you're giving me that look again.

CAFFERTY: No, no, not at all. That's fine.

LISOVICZ: I'm just saying that could be one of the things that this man, who also likes to fly hot air balloons, you know, is thinking. He's a risk taker.

CAFFERTY: Southwest is doing OK too. I mean it is possible to make a buck in the airline business.

WESTHOVEN: Right. And there are signs right now that things are about to start getting better, and more airlines will be making profits soon. All right. There's lots more to come here on IN THE MONEY. Up next, driving us crazy. For more and more people, a jumbo SUV tells you there's a jerk at the wheel. See if America is falling out of love with an automotive success story.

And later, on target. Meet a couple who took a shot at a new career in our "Life After Work" segment.

CAFFERTY: Is that Dick Cheney?

(COMMERCIAL BREAK)

LISOVICZ: The luxury SUV has a hide that says battlefield and an inside that says VIP room. For a few years now, it's been a big seller. But a piece in the "New York Times" this week says the mega- SUV isn't moving like it used to. According to the paper, fewer than half the people who bought one of these bruisers are going back for seconds.

We wanted to find out exactly what's happening. For that, we turn to Martin Goldfarb. He's the chairman of Goldfarb Intelligence Marketing in Toronto. Welcome.

MARTIN GOLDFARB, CHAIRMAN, GOLDFARB INTELLIGENCE MARKETING: Hi. How are you?

LISOVICZ: Is it true Martin that there are numerous Americans who are giving dirty looks to people who are driving Hummers and big SUVs that resemble them? That it's become not a question of whether they, the owners, like them. It's a matter of being cast as pariahs that they're giving them up?

GOLDFARB: Well, I think they are pariahs, and that's the problem. Historically, if you go back, the SUV saved the American auto industry. When Ford introduced the Explorer, it was a new innovation. And that innovation captured the hearts and minds of Americans. It was the American auto industry competing against the foreign auto industry and competing successfully.

But historically in America things get bigger and bigger and bigger. As they got bigger, the gas mileage got better. When we hit $60 a barrel, people began to think it's going to cost me $100 to fill up an Expedition or a Lincoln Navigator. These cars are expensive to operate. And as a result, not only are they pariahs in other people's view, they are looking at their pocketbooks.

WESTHOVEN: Now, is it just the pocketbook issue, or do we also have sort of a cultural shift going on here? A lot of people talk about our dependence on Middle Eastern oil. A lot of people say, you know, it's conspicuous consumption. Why the change?

GOLDFARB: Well, I don't think conspicuous consumption is the issue. If you take a look at the number of jewelry stores spread out around America, they're triple the number of stores. Lots of jewelry stores all over the place, and people are wearing it. It's not about conspicuous consumption. I think needs change. And needs change in this way.

For example, Toyota has introduced a new SUV called the Rav-4. It's got a third row of seats, but it's a four and a six cylinder, which gets good gas mileage. People who have families of two or more children need that third row of seats. Otherwise, you can't put children in a car seat.

CAFFERTY: You know there's a need for some version of the SUV for the so-called soccer moms. But I hope gas prices go as high as they have to go to get the rest of these morons off the road in these big Hummers with the four wheel drive and the obscuring of the view for everybody else on the road while some middle-aged woman from the suburbs is yakking on her cell phone trying to figure out how to turn left at 49th and Broadway in the middle of Manhattan, where you've never need a four wheel drive vehicle in the 150 years this city has been here.

But enough about that. Where do you go with this stuff when these gas sucking things disappear? And why can't Detroit figure out the stuff that Toyota has already figured out? That things are changing. We had General Motors announcing the biggest corporate layoff in history while the competition is saying, hey, here's a new vehicle that will replace these SUVs. Where is America's ability to compete in some of these areas?

GOLDFARB: Jack, I think what happened is the American car companies, mainly Ford and GM, got so used to getting huge profits on these big products that they didn't look at where the future was going to be. Remember the Explorer, which was the beginning of the SUV market, was an innovative product. It challenged the marketplace and really won big.

It gave Americans pride that they can compete internationally with a product developed and designed in America. I don't see anything coming out of Detroit today that is the equivalent of a six seater SUV like the Toyota Rav-4 or like the Honda product. I think they really have to come to grips with gas mileage and utility.

LISOVICZ: Right, but now there are -- we are seeing within the SUV category, Martin, we are seeing that certain models that are upgrading, for instance, and responding more quickly to consumers' wants. Like, for instance, you were saying about that third row where you can put kids because you can't put kids in the front row. You can't put them in the passenger seat up there. Are actually showing marked increases in their sales.

CAFFERTY: You can buy a sedan and put them in the trunk.

LISOVICZ: Now that your daughters are grown, you can say that, Jack. But Mrs. Cafferty would never allow that.

GOLDFARB: His daughters are going to want to have children, and they want to put their kids in some seats.

LISOVICZ: He's not going to put his grand kids in there. There are niches in the SUV category, is my point, Martin, that are still showing strong demand.

GOLDFARB: I agree with that, but I also think Detroit is adjusting. If you take a look at the new plants that are being built, they're flexible plants that will be producing three or four or five models on the same assembly line. That is new for Detroit. That hasn't happened.

In Japan, for example, Toyota will produce 40 or 50,000 vehicles, and they'll be successful with each brand name with 40,000 or 50,000 vehicles. Detroit wasn't interested in producing vehicles that didn't have large volume numbers, at least 100,000. So now you really have to come to grips with how do you have flexible manufacturing? Because the consumers' tastes are dictated by need and pride.

WESTHOVEN: Well, Detroit does finally seem to be changing, and I guess better late than never. Thank you very much, Martin Goldfarb and from Goldfarb Intelligence Marketing. Thank you so much for coming on the show today.

GOLDFARB: Thank you.

WESTHOVEN: For nearly two decades, Gill and Vicky Ash ran a commercial photography shop. But they found it took too much time and too much money to keep up with changing technology. So they decided to take a shot at a very different kind of shooting career. Their story is this week's "Life after Work."

(BEGIN VIDEOTAPE)

WESTHOVEN (voice-over): This husband and wife team took aim at a second career. Gill and Vicky (ph) Ash own and teach shooting at the Optimum Shotgun Performance School in Houston.

UNIDENTIFIED FEMALE: Pull.

GILL ASH, SHOOTING INSTRUCTOR: Each year we teach 1,500 to 2,000 people how to shoot moving targets with a shotgun.

UNIDENTIFIED FEMALE: As soon as you see that bird, everything's going to the break point.

G. ASH: We were among the first group of traveling competition shooters in this country. Everywhere we went, we either won or placed in the top five. People were always asking us, how do you do this? Our reputation as teachers began to grow.

Nice shot. Nice shot. Good lateral move.

WESTHOVEN: While competing, the Ashes were also involved in a different type of shooting. They ran a commercial photography business. But after 18 years, the couple traded in their cameras for shotguns.

G. ASH: Photography was getting ready to go through the digital phase, and I didn't want to spend $250,000 every year keeping up with the new digital trinkets. And the other part of it was, as a photographer, you're really not in control of your own time.

WESTHOVEN: These days, the Ashes manage their own time. They wrote a book, produced three DVDs, and are the shooting editors for "Sporting Clay" magazine.

G. ASH: We're passionate not only about teaching people to shoot, but we teach them how to learn from failure. "Sporting Clay" is a very difficult game, and it's got a lot of built-in failure. It's whether or not you're able to take responsibility for the failure, learn from it, and move on that determines how successful you're going to be.

(END VIDEOTAPE)

WESTHOVEN: Coming up, the human factor. Some tax situations are a little too sticky for a software program. We'll have tips on when it's time to call an accountant.

And also ahead, put your money where your heart is. Allen Wastler is going to tell us about the rise in faith-based mutual funds.

Tell us what the think about the program, what you think about tax time, accountants. We're at INTHEMONEY@CNN.com.

(COMMERCIAL BREAK)

WESTHOVEN: The April 17th deadline is just a few weeks away. Millions of Americans have taxes on the brain. Now taxes aren't a fun activity for anyone, but they have gotten a little easier with personal computers and the Internet. The IRS is expecting 74 million tax returns over the Internet this year. Americans are turning to software programs to help navigate through the complicated tax forms in record numbers.

(BEGIN VIDEOTAPE)

WESTHOVEN (voice-over): Every year, when April rolls around, people who know their taxes cold suddenly get very popular.

UNIDENTIFIED MALE: I actually have my brother in law do them for me.

UNIDENTIFIED MALE: I have an accountant that I've used for many years.

UNIDENTIFIED FEMALE: I give them to my dad.

WESTHOVEN: But with the growth of Internet and software programs that can guide you through the ordeal, more Americans are filing on their own with relative ease. More than 13 million people already finished their taxes this year on their home computers.

Aside from the obvious convenience of replacing this with this, the IRS says there are clear-cut benefits to filing online. First and foremost, accuracy. BERT DUMARS, ELECTRONIC TAX ADMIN, IRS: We're actually seeing a substantial decrease in errors versus paper returns. And, in fact, it's literally 20 times more chances of having an error on a paper return than it is on an e-filed return.

WESTHOVEN: That's thanks to computer programs like Turbo Tax and Tax Cut that check your work and make sure that everything is consistent. Fewer mistakes mean you're less likely to hear from the IRS. And another bonus, after you click send, you get an e-mail confirmation from the IRS so you know your taxes are in. And if you're eager for that refund, it can be deposited straight into your bank account within two weeks. No waiting for a paper check in the mail.

DONNA LEVALLEY, TAX ATTORNEY: The best fit for an online or electronic filer is text savvy and financial savvy. Somebody who is comfortable with technology and computers and someone who is relatively comfortable with their finances, either because they're familiar with them and they have been working them the past few years, or they're simple. So there really isn't too much room for error.

UNIDENTIFIED FEMALE: I don't own property. I don't have kids. I'm not married. For me, it's really easy.

WESTHOVEN: Do it yourself electronic filing isn't for everyone. Levalley recommends hiring an accountant if you have a complicated return, likes if you have a lot of money, if you own your own business, or if you own real estate, stocks, or bonds. You also might need professional help if you had a major life change. You got married or divorced, had a baby, or bought and sold a home.

But if you don't want to hire an accountant, if you're ready to brave it on your own online, a good place to start is www.IRS.gov, and you might qualify for free file. About 70 percent of taxpayers do. You can learn about different software programs that can guide you through one of the most dreaded times of the year.

(END VIDEOTAPE)

WESTHOVEN: Coming up next on IN THE MONEY a new way to think about business ethics. We'll take you to a Web site where you can find out what you'll be in your next life when you're reincarnated.

Time to hear from you. We'll read some of your e-mails from the past week. Come on; send us an e-mail right now we are at INTHEMONEY@CNN.com.

(COMMERCIAL BREAK)

CAFFERTY: Celebrities like to thank God for their fame and fortune. A handful of investors are grateful to him as well to him these days. Money.com's Allen Wastler is explaining what we're talking about here in this weeks "Inside Out."

ALLEN WASTLER, MANAGING EDITOR, MONEY.COM: Religion has been so much in the news lately and everything. On the Web site, we decided wouldn't it be interesting if we looked and see how religious money is doing. So believe it or not "Morningstar" tracks faith-based funds. Over the last five years, they have grown seven times their value.

CAFFERTY: Wow.

LISOVICZ: Believe, believe, and believe.

WASTLER: In the last year alone, they've been up almost 10 percent versus the S&P going up just a little bit more than 6 percent. So there has to be something to this.

LISOVICZ: Why is that?

WASTLER: Well the general thinking is because of the screens they put on, they tend to go for managements that tend to be conservative, don't take a lot of gambles, that type of thing. Also, it's an interesting mix of companies that sort of weed out the high risk on its own. We have four standouts to show you.

One, Amana Trust Growth Fund, this follows Islamic teachings and Islamic investing. So obviously, no liquor, gambling, that type of stuff. What's interesting is no investing in meat companies that deal with pork. And this is really no investing in companies that have interest-based type of operations.

Now, Ave Maria Catholic Values Fund.

CAFFERTY: Look at these charts.

WASTLER: Look at that. Now, they obviously -- they follow the Roman Catholic type of value system. No anti- -- what they consider anti-family type of businesses. A return of about 11 percent.

Going on, we have the MMA Praxis International Fund. This one goes with the Mennonites.

And finally the Timothy Plan, they are an aggressive growth fund, they go with the fundamental Christian sort of philosophy. Also with the anti-family thing, but much more strict on the alcohol, tobacco, and gambling, that's out. Twenty percent over the last year. But in all these funds, you have expense ratios that are well over 1 percent the industry average. So it shows you that, while you get the big return in religion, it's a little high maintenance, and it will cost you eventually.

CAFFERTY: What's the "Fun Site of the Week?"

WASTLER: Going on with out religious theme. We went to the reincarnation station.

CAFFERTY: That's funny.

WASTLER: Where you answer some questions about -- let's give you a sample. Generally speaking, what type of person do you consider yourself? Jack, exceptionally good person, sort of a good person, not a very good person. You have your moments. LISOVICZ: Can we answer that?

WASTLER: That is just an example.

LISOVICZ: Jack is a great person.

CAFFERTY: Probably number two. So you go through and answer all these questions. Then what do you get at the end of the deal?

WASTLER: You get what type of life form you'll be reincarnated as. We sampled you guys. I was an alligator. I just lie in wait, you know.

LISOVICZ: Ouch. A predator.

WASTLER: And you, Jen? You were?

WESTHOVEN: Elephant. I was OK with that.

WASTLER: Nice GOP response. Susan?

LISOVICZ: I didn't know. Horse.

WASTLER: A thorough bred.

LISOVICZ: Oh, really?

WASTLER: And of course captain, my captain.

CAFFERTY: Wolf.

WASTLER: There you go.

CAFFERTY: I answered all the questions. It said I'd be back as a wolf. Which I'm actually looking forward to it.

WASTLER: I think it's right spot on. There we go.

CAFFERTY: Time now to read your answers to our question about whether you have a plan b for your retirement.

David wrote, "My plan b turned out to be better than my plan a. I retired with a $2,000 a month pension. But then I sold our family home, and now my monthly retirement income is $6,000 a month from investing the profit from that home."

Dennis in Vermont wrote, "I don't have a plan a. I can live on Social Security, but I'm self-employed, so I have to pay double into the fund in the first place. In the second place, it will probably be bankrupt when I hit 65. Now what?"

Jan in Utah writes this, "My plan is to let my teeth go so I can't chew. Going on a liquid only diet will probably save me thousands of dollars a year." Jan sounds like an interesting lady.

Time now for next week's e-mail question of the week, which is this. "Can ordinary American consumers really do anything to help win the war on terror?" Think about it. Send your answers to INTHEMONEY@CNN.com. You should also visit our show page at Money.com/INTHEMONEY, which is where you will find our "Fun site of the Week." Find out what you will come back as when you are reincarnated.

Thank you for joining us for this week's edition of this highbrow program. My thanks to "Headline News" correspondent Jennifer Westhoven, CNN correspondent Susan Lisovicz and Money.com managing editor Allen Wastler.

Hope to see you back here next week, Saturday at 1:00, Sunday at 3:00 Eastern Time. Until the next time, enjoy the rest of your weekend.

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