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Warren Buffett's Generous Gift to Bill Gates; Rough Weather's Affect on Finances; Corporate America Cashes in on Sports

Aired July 02, 2006 - 15:00   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.
ANDY SERWER, "FORTUNE" MAGAZINE: Welcome to IN THE MONEY. I'm Andy Serwer. Jack Cafferty is off this week. Coming up on today's program, big bucks without the big ego. Warren Buffett's gift to the Gates Foundation is a record setter. Find out why it's not just the amount of cash that is amazing, but how he's handing it over.

Plus, water pressure. If nature is in a bad mood, you can wind up paying. See what rough weather can mean to your financial picture.

And fast companies. NASCAR is just one of the sports that big corporate sponsors love. We'll look at what is behind the attraction.

Joining me today, a couple of IN THE MONEY veteran, Jennifer Westhoven and Allen Wastler.

OK you guys, explain this to me, the Federal Reserve raises interest rates and the market goes up. I thought the market didn't like higher interest rates, plus everyone knew this was coming.

JENNIFER WESTHOVEN, CNN CORRESPONDENT: It hates interest rates. Right? The market hates interest rates, so you can say, oh, they raised interest rates, the market went up. But actually what the fed said was there were words in their statement that makes the Wall Street think there aren't going to be any more, or maybe just one or two if there are any more. So they think maybe this long campaign of hiking rates is over.

ALLEN WASTLER, MONEY.COM: You could hear the sigh of relief, go ah and then they -- so now they start looking at profits. And profits are expected to be pretty good this time around. So, there's lots of juice there for it to jump up on.

SERWER: What is your bet, though? Do you think they're going to do it at least one more time in August?

WESTHOVEN: I got to say, I've got a hard time believing people who think they are, certainly, that they're all the way over because Bernanke, the new fed chief, of course, has been so tough on inflation, his target is tough, two percent. I don't know, I think he might have some more up his sleeve.

SERWER: Well, the other thing that happened Thursday, the day of that big rally and the rate hike was that they announced GDP, how fast did the economy grow in the first quarter and it was pretty good, 5.6 percent. The best since the third quarter of 2003 which they called the "sugar high" after President Bush's tax givebacks.

WASTLER: But they're expecting that to taper off down -- for the economy to cool down and the fed mentioned that in a statement and so that gave the market, oh, so they're going start watching the economy now. Good! And so they keep moving on that way.

SERWER: It'll give us a lot to look at and talk about. Brother can you spare roughly $37 billion? That's about how much investment king Warren Buffett is giving the Bill and Melinda Gates Foundation and a few smaller charities run by his children. Simply put it's the biggest charitable gift in history. But just how much good will it do and will others follow in Buffett's footsteps? Here to help us answer some of those questions is Gene Tempel, he's the executive director of the Center on Philanthropy at Indiana University.

Gene, welcome to the program.

EUGENE TEMPEL, CENTER ON PHILANTHROPY AT INDIANA UNIV.: Thank you very much.

SERWER: Not to take anything away from Buffett's gift, but can the Bill and Melinda Gates Foundation handle it? I mean, they are doubling up. It's already a huge foundation, and now it is just billions and billions, tens of billions of dollars.

TEMPEL: Well, it roughly doubles the size of the Bill and Melinda Gates foundation. And under typical circumstances, it would be very difficult for a foundation to staff up and distribute money, roughly double its size. But the Bill and Melinda Gates Foundation has been using a fairly unique process in distributing its grants in the first place. So, they have been using a lot of intermediaries, bringing in experts, using consultants and advisers, so it's not just the staff they have in place, but it's these intermediaries who are helping them carry out programs in the United States in education, for example, and around the world in global health. So, I think because they have this network of intermediaries prepared to help them it will be much easier for them to ramp up to distribute this money wisely.

WESTHOVEN: Rockefeller Center, how do you get to Carnegie Hall? I mean, these are names that people know. Instead Warren Buffett, you know, he could have done something like that, he could have started his own huge foundation, instead he just took all this money and gave it to his trusted friend. A. what do you make of that? And B. Do you think in 100 years from now people will know the name Warren Buffett?

TEMPEL: Well, I think, this is a very unusual gift. Someone with that kind of money, and even much less money might give it to another private foundation is a very unusual thing it says a lot about Warren Buffett and his ego, for example.

WESTHOVEN: He doesn't have one.

TEMPEL: It also says a lot about his approach to things. I mean, and what he said in the announcement Monday was that, you know, five -- 50 years ago, seven people had entrusted him with $105,000 to invest because they thought he could do a better job investing than he could. Fifty years later, he entrusts his friend Bill Gates with $30 billion to invest in philanthropy because he thinks Bill and Melinda Gates are better at philanthropy than he is.

WASTLER: Eugene, what's this going to do to other rich folk and their giving habits? Are they going to -- oh, Warren did it I should do it too. Let me jump through the with some buckos or will are they going to say well, everybody's just says you're no Warren Buffett, so I'm just going keep my money? Is it going to have an effect like that?

TEMPEL: Well, I think there could be some effect like that. Warren Buffett did challenge other people to consider doing what he had done. And he had done something very unusual that is he chose a new model for doing philanthropy by giving it to the Bill and Melinda Gates Foundation where he had been able to observe the methods they use, the grants they made, the impact they were having. He said I'll put my money with them and thereby help expand their philanthropy. Now he said this isn't going to be for everyone. But people should really look closely at this model and see if it might not be the way for them to do philanthropy as well.

Now, we have to remember that the Bill and Melinda Gates Foundation right now has two board members, Bill and Melinda Gates. After this transaction takes place it will have a third and that's Warren Buffett. So, he will have a large say in how that foundation moves forward, but it is in fact a very uncommon thing that someone would say, give that kind of money to another private foundation.

I do think people will remember Warren Buffett because it's such an unusual transaction. It's such an unusual thing he did. It may not put his name on a building like Rockefeller Center but it simply -- it simply will get him credit for being willing to invest in philanthropy and do things at a have different way.

SERWER: Gene, much of the Gates Foundation money goes into health and health care technology and education. If you had $60 billion to allocate in philanthropy, is that where you would put it?

TEMPEL: Well, I'm not a health care expert and all of us would give to philanthropy in different ways depending upon how we wanted to solve society's problems. But it is, in fact, the case that more than half of the world lives without the same privileges that we in the developed world live. And so they're simply bringing this -- the impact of this money to problems that no one else is really paying significant attention to. You know, one can say, well, you know, this is a lot of money. But it is in fact they're dealing with large intractable problems. Where the governments may not be paying attention, where even the U.S. government aid may not be paying attention, and so they're not only helping solve problems immediately, and invest in long-term solutions by funding the development of vaccines, but they are in fact getting governments to pay attention and they're getting you and me to pay attention to problems that we didn't even pay attention to two weeks ago. WESTHOVEN: Gene, I don't mean to put you on the spot, but I just want to ask you about another donation that's been in the news or might I say, nondonation, which, of course, right, is the Oracle CEO Larry Ellison, first of all giving this gift to Harvard with all of these strings and then never making the gift and it seems like not even telling them about it for a while. Is that just bad manners?

TEMPEL: Well, first of all, we need to correct the language. He did not make a gift and then pull it back. He supposedly made a verbal pledge, but there was never any agreement. Now one could -- I'm not a legal expert, one could argue perhaps that he -- that this verbal pledge might be binding, I'm not sure. Often when donors make this kind of verbal pledge, you know, the gift does indeed follow. There is a lot of -- a lot to be learned from the publicity around this transaction, though and that is that organizations that engage in conversations like this with donor should in fact try to get all of these things written down to have a written agreement about what will be done with the money, how the money will be paid, those kinds of things.

SERWER: We're going to have to leave it at that. Gene Tempel the executive director for the Center on Philanthropy at Indiana University. Thanks for coming on the program.

TEMPEL: You're welcome.

SERWER: When we come back, the human factor. We'll look at whether your tax money would be better spent on troop or a bunch of gee-whiz weapons.

Also ahead, logos a-go-go. It is tough to read a company name at 180 miles-an-hour. Find out why corporate sponsor love NASCAR anyway.

And the sales men wore Spandex. The latest film in the Superman franchise is out this weekend. See why the studio's is keeping a close eye on the box office.

(COMMERCIAL BREAK)

WESTHOVEN: Even some senior military commanders have said that serious shortages of soldiers are hurting our ability to fight in both Iraq and Afghanistan. But the U.S. government is spending a great deal of our defense budget to develop new transformational technologies. While high caliber weapons and missiles may be essential for national security, our next guest says that to win in Iraq, we need more boots on the ground there, not less.

Fred Kagan is a military historian, he's former professor from West Point and a resident scholar at the American Enterprise Institute. Welcome to the program.

FRED KAGAN, AMERICAN ENTERPRISE INSTITUTE: Hi, it's good to be here.

WESTHOVEN: Well, First up you just went to Camp David and met with President Bush. First of all, what did you talk to him about? And do you feel like he listened and might take you up on something?

KAGAN: Well, I can't talk about what was discussed at that meeting.

WESTHOVEN: Can you talk to's little bit about, then, your general idea for what the military ought to be doing? What our priorities should be in Iraq?

KAGAN: Well, I think it is very important we follow up on the successes we've achieved but with the killing of Zarqawi and the completion of the Iraqi government, actually we could bring security to the country. I really don't think it will be possible to make progress much further along the political and economic path unless we actually secure the country and that's going require, in the short term, probably the commitment of more American troops, certainly the more active use of the troops that are there in order to do clear, hold and build as the president and the secretary of state outlined last fall.

WASTLER: Let's back into the general argument right now, because I want to make sure our viewers understand. You're not against technology, you know, the development of stealth device and what not, but you're saying that at the same time you're doing that you also need to think about putting more soldiers into action. Am I framing your argument correctly?

KAGAN: Absolutely. I think that technology is extremely important. I certain think that the military should have all of the capabilities the high tech proponents wanted to have. I think it's a question of priorities, though. Throughout the 1990s and even through today, the arguments have been made and the administration has largely accepted them, that the high tech stuff is more important than soldiers and can replace soldiers. And what we've seen in Iraq and Afghanistan and everywhere else for past 100 years or so of welfare is that high tech really can't replace soldiers for certain critical tasks and I think that we've been making a mistake in prioritizing long-range precision strike systems over the precision strike system that is a U.S. soldier.

WESTHOVEN: And I want to talk to you a little bit about what I think is one of those critical tasks. What seems to come up is that we need to build an entire military structure there from scratch. Now, that's something that not only would take a lot of American troops to do that, you got to build a whole rank structure, but also a lot of time. How much do you think the America needs to invest in terms of people and time?

KAGAN: I think what we've accomplished in Iraq so far, in the way of building up the Iraqi security forces is astonishing. I can't think of another case of a counterinsurgency effort which saw such a rapid development of such a large and effective combat force from nothing in so short a time. I think it's been astonishing, but I think there's a way to go before that force will be able to accomplish the missions it needs to accomplish. I think that we need to continue to help them very actively. And I think that we have been making a mistake in thinking that we would be able to turn the problems over to them too quickly.

SERWER: Fred, exactly how many more troops are you talking about here? And where are they going to come from? I keep hearing that our armed forces are stretched thin.

KAGAN: Well, in Iraq, it's very hard for anyone on the outside without access to secret data to make a real estimate of what would be necessary. I think we'd probably need another 25,000 combat troops or more, probably with the same number of support troops. Where would they come from? Well we have forces available. It would strain the Army further, but I'm not proposing this as a long-term deployment. I'm proposing this as a surge to establish security now at a critical moment to follow up on our success and I think if we did that, we would find we would be able to pull out more rapidly with much greater success in the future.

WASTLER: So Fred, I'm -- real quick here, because we're running out of time, but that seems to say that you're saying that we should reinstitute the draft and start spending more on our military which given the way the Iraq conflict's going, probably isn't politically feasible. I mean is that a realistic solution?

KAGAN: Well, I'm adamantly opposed to reinstituting the draft and there's no reason why we should need to do that. From 1979 to 1991 we maintained 50 percent more troops in a volunteer force than we have today there's no reason to imagine that we can't recruit to a higher end strength now if we set our minds to it. As for spanning more, we're at war. One of the things that happens when you're at war is you have to spend more on defense, this war is essential, we must win it and I think we have to pay the price.

WASTLER: Well, Fredrick Kagan, thank you so much for joining us and outlining your argument for us.

KAGAN: (INAUDIBLE)

WASTLER: And now it's time for our "Look Ahead." U.S. markets will be open for half day Monday and closed all day Tuesday in honor of Independence Day. A couple of economic reports of interest will be out despite the short week, though. Both auto sales and truck sales will come out on Wednesday. But the big one Wall Street will be watching, will be released on Friday, that's the employment report for the month of June. And of course, for all your up to the minute information on what's coming up economically you can always log on to cnnmoney.com.

Now, coming up after the break, a reason to get excited about green boxer shorts with little tiny golf clubs on them, Andy.

SERWER: Yuk.

WASTLER: We'll talk about J. Crew's Wall Street debut.

Plus, looking for a life preserver. A natural crisis like a flood can wreck your home and your town. See what happens to a local economy when Mother Nature plays rough. (BEGIN VIDEO CLIP)

I don't know how to drive this car.

(END VIDEO CLIP)

WASTLER: Oh Andy, you loser. The space race. Andy takes a look at some software that's designed to help you find a parking space, even in New York City.

(COMMERCIAL BREAK)

SERWER: If you're wearing a cashmere sweater neatly tied around a Polo shirt right now, and I'm not sure what to make of you if you are, you probably already know that preppie outfitter J. Crew went public on the New York Stock Exchange this week. It was a good start for the company. J. Crew shares jumped 28 percent on their first day of trading. But is investing in a clothing company, and a preppie one at that, a good move when people may be cutting back on spending? That's the topic of this week's "Street Talk."

You know, this company was founded in 1983, a family run business for years and was a high riser then it topped out and it was bought by a Wall Street private equity firm and they kind of bundled it all up and fixed it up and got it back together. Is this thing for real? I mean is it a real growth company still?

WASTLER: I'm sort of shy of it I don't like clothing retailers because not only do we have an economic cycle that, you know, speaks to consumers cutting back, but people are so fickle about that they like and they don't like, so what's in now may be out, you know, next year, so why bother doing it? No, no, no away away. Stay away.

SERWER: Jen?

WESTHOVEN: OK, that is true, but I'm just going to go from a completely nonfinancial perspective. J. Crew was so great in the early '90s, great stuff, great swimwear. All of a sudden you go in and at least I could not find anything that I liked when they were doing tight stuff, it didn't feel sort of east coast preppie or classic at all, whatever it is that they go for, but I couldn't find anything to wear in there. Now I can and I thing obviously a lot of people agree. Things look a lot better there, their business is up pulls a lot of people in the stores.

SERWER: Well, I think a lot of that, Jen, has to do with the fact they brought Mickey Drexler in, he was the genius behind the Gap and he really turns this company around, brought it back to its roots. They've also expanded in formalwear, beach wear, kids stuff. But, getting back to the stock, you know, Wall Street's selling, you're buying in this situation. It's very competitive as Allen suggests and this is a company that lost money. Now they're making money just when they go public. There is a lot of debt here. And then let's look at some of the competitors, speaking of your point: Abercrombie and Fitch, Banana Public, (INAUDIBLE), Style, Eddie Bauer, Polo.

WESTHOVEN: They're more upscale then that.

SERWER: Well, they're all a little different, you know. And Club Monaco is owned by Polo, there's just all kinds of stuff going on here. They do have the three legged stool of Internet, stores, and catalog which is good, but I agree with Allen, you know, you gotta keep up. It's so difficult in this business to keep up.

WASTLER: It all comes down to what you pick and Drexler remember, he was at Gap when Gap all of a sudden was picking the wrong stuff and he was sent on the road. So, he's not, you know, he's not infallible.

WESTHOVEN: And they're not that financially solid, they just broke even.

SERWER: Right. Right. Exactly. Well, we'll see. It does have a great brand name, that's for sure.

Coming up, waterlogged. Every place has a risk of natural disasters and every disaster has a price. We'll look at what things like floods do to your money and your local economy.

Also, ahead, on the ball, you can slap a corporate logo on anything but only certain sports draw lots of sponsors. Find out why a company would throw money at something like the World Cup.

And driving is crazy. You practically need ESP to find a parking space in a crowded city. We'll hear about software that claims to be the next best thing.

(COMMERCIAL BREAK)

(NEWSBREAK)

SERWER: Wildfires, nature has been showing us its rough side this week. Heavy rains triggered floods, from Vermont to Virginia and firefighters have been battling flames out west in places including Washington State and in North Rim of the Grand Canyon. A crisis related to the weather can hit homeowners, towns and regions hard. For a look at the economic impact, we're joined by Fred Krimgold; he is the director of the Disaster Risk Reduction Program at Virginia Tech's College of Engineering. Fred welcome to the program.

FRED KRIMGOLD, DIRECTOR, DISASTER RISK REDUCTION PROGRAM: Hello.

SERWER: I guess one question is what kind of response has the federal government and the state governments up into play here and how would you rate it in?

KRIMGOLD: Well, in fact we haven't had federally declared disasters yet. But we have had state disaster declaration in Virginia. I think disaster declarations are being considered in other states. I'm not sure how far that has gone. But that brings into play another level of reinforcements for response. And it also triggers mechanisms for financial assistance to localities and to individuals. WASTLER: Fred what kind of economic hit are we likely to see from this? Are we going to see more on a local level in terms of the flooding damage or are we going see some sort of national ripple effect?

KRIMGOLD: Well, I think what we're talking about here is a -- I guess I would call it a high level of inconvenience, rather than a natural catastrophe. We did see a lot of limited damage in areas subject to flash flooding, particularly loss of personal property. But at a rather small scale and rather widely distributed.

A few cases have been washouts of major roads; I think the Interstate 88 in New York had a catastrophic failure of a major overpass. But aside from that, we have seen inconvenience rather than catastrophic loss. Near in Washington, a number of government buildings including the Smithsonian Institution down on the mall and the IRS and others have had severe flooding in their basements, which has caused considerable havoc at the local level. Inconvenience for workers. But not large scale loss of life and loss of property as we have seen in cases like Katrina.

WESTHOVEN: By the way, anyone who heard him talk about the IRS, I did already read that they're moving to other offices. It didn't shut down their operations at all. Sorry about that.

KRIMGOLD: They're not out of business.

WESTHOVEN: Yes. Fred, while you have been talking we have been showing some of these incredible pictures that just remind you of the awesome power of mother nature. When we think about these kinds of storms, is this something we can just expect once in a while or are you worried that the storms are either getting more frequent or more ferocious?

KRIMGOLD: Well in the case of Washington, D.C. this is an unprecedented event. In that we have broken the hourly, daily and weekly rainfall records, since the time that records have been kept so this is an exceptional event. It is as I say; it doesn't rank as a category 5 hurricanes or a major impact of that sort. But it is unprecedented and it does suggest that we may be experiencing changes in weather patterns that will force us to re-evaluate our historical record and the basis for our estimation of what is expected or what could happen.

SERWER: So you're of the school that the climate really is changing. If that's the case, do we need to allocate more money to this area, more dikes, more flood control, more emergency rescue people, and more firemen even. Is that something we should be doing?

KRIMGOLD: I think what we have to could is probably become more conservative in our estimates of what constitutes a reasonable response in terms of public safety. That is what we have mapped previously as 100-year floodplains may turn out to be 75-year floodplains. There may be a change over time, we don't know how rapidly this might occur, but as we see these more intensive events and occurring as a result of weather patterns not often experienced, and we're going to have to become a little bit more careful.

Now, the same is true in the drought side. That's wildfire and drought. And what we're seeing is maybe not so much a change globally in the amount of rainfall or the lack of precipitation, but the patterns are changing. So that we're seeing heavy rainfall in areas not traditionally equipped to deal with it. We're seeing drought in areas, which do not traditionally expect it.

WASTLER: Fred, we only have a few seconds left. When we're talking about doling out resources for one or the other, is flooding worse than the other type of natural disasters? I mean is there some quick judgment here?

KRIMGOLD: Well historically droughts have been the major killers globally. And I have accounted for enormous losses. They are less dramatic, less visible but they are very important. Floods, however, have really been the major hazard in the United States over the past 100 years. Floods have accounted for greater loss of life and greater loss of property than any other natural hazard.

WESTHOVEN: We know at this point that at least 14 people did die in all this flooding that we saw. I just wanted to ask you very quickly before we say thanks you know a lot about search and rescue. How did the teams do this time?

KRIMGOLD: Well, I think we had a very good record. The really positive sign here is that after the experience of Katrina and Rita last year, you find that the public is very aware of the need to evacuate and they listen and they act. We had a number of specific evacuation sites through the east coast where the public responded very quickly and very appropriately.

WESTHOVEN: That is great news. Thank you very much for joining us. Fred Krimgold from Virginia Tech.

There is lots more to come here on IN THE MONEY. Up next, just how many logos can you fit on a racecar anyway? We'll look at why Nascar is such a big deal for corporate sponsors.

And later, squeeze play. Find out about software that claims to find you a parking space before you get there.

(COMMERCIAL BREAK)

WASTLER: While fans go wild over checkered flags and goals, Corporate America is spending billions to get in on the fun. So why is big business so attracted to revving up revenue through Nascar and the World Cup. Joining us now is the sports professor Rick Horrow, CNN's business analyst. Well business and sports analyst. How are you doing Rick?

RICK HORROW, CNN SPORTS BUS. ANALYST: Nice goal. You're not going to rival Andrea Contour who does that for a living.

WESTHOVEN: I'm going to work on it. Give me four years. So Nascar seems to be all supped up now on corporate sponsorship. Is that the case and why is that?

HORROW: It is clearly the case. Here is why it is all about the Benjamin's as with know.

SERWER: He brought props.

HORROW: The global -- you ain't getting this. This is right there. Global perspective on this $726 billion in the sports industry, add sales of about $230 billion. Nascar is the fastest growing of all that ad sales. It is a 90 percent growth rate. The companies want to stay above the clutter. For example, Home Depot is more excited spending $100 million on the Tony Stewart sponsorship kind of car relationship than anybody else is.

It is equivalent to Lincoln Financial spending $150 million to name that stadium for the Philadelphia eagles. And then American Airlines by the way, it is not Nascar but it is a big deal just now. The American Airlines Center where the Miami Heat played the Dallas Mavericks in Dallas, the American Airlines Arena, Miami Heat, both named of them named after American Airlines. A $50 million benefit so the corporations are after the big score. And Nascar allows that by the way.

WESTHOVEN: Companies have got into other sports. They've really changed things in ways; you know stadiums have been built with massive luxury boxes. Things feel different there. Nascar feels so family, is that really all for the good?

HORROW: Nascar feels family and it also feels avid and brand loyal which is why Corporate America loves it. Also families watch TV. April 30th there was a basketball playoff game with the Heat and the Bulls, 3.6 million people watched it. Same day, storm front moved through Talladega, Alabama rain delay for five hours, 7.2 million people watched rain for four hours. If that doesn't spice up Corporate America, you don't know what does. Nascar is a big deal. Nextel spends $1 billion in corporate sponsorship. Everybody said that's too much. That's a lot of money.

Two years later, 90 percent of the Nascar fans prefer Nextel over any other phone carrier. And, by the way in the stock market, Georgia Pacific, General Motors, Ford and increase by the way in their numbers, 30 million to $300 million within three days of their announcements. That's why even movies have sponsorships.

WESTHOVEN: But if you start going to the track and you see all these fancy skyboxes, don't you think there might be some kind of a backlash?

HORROW: No. There is time and place for everybody. The fans see glitzy sky boxes allow for part of the $140 million that they use to spend to buy new tracks in Kansas and one in California. They're looking at New York, they are looking at Seattle. That allows for the Nascar folks to expand out to the masses, which makes Corporate America feel like they're advertising to the full country. It is so significant that they're even naming movies and sponsorship of races. At Charlotte two years ago, the Sponge Bob Square Pants movie 400 was held.

SERWER: I don't know if I saw that one. Let me ask you, Nascar has no problem going strictly commercial. They have names plastered on everything, baseball, basketball, football. They're heading that way, though. We're seeing more and more corporate logos. Will we see logos on players' jerseys like professional soccer in England?

HORROW: Yes. Everybody talks about this Vodafone deal with Manchester United before the World Cup and $100 million. It is not pure. It doesn't help the sport. Ticket prices are going up 50 percent. You have to find the money somewhere. The pencils are foul poles at stadium in Miami. And Office Depot had sponsored them. So Spider-man was going to have logos with the spider all over second base. Everybody said that's not pure enough. And you know when that argument gets resolved? When corporations are willing to spend the dollars to increase the spending.

WASTLER: Real quick tell us what kind of presence is Corporate America getting in the World Cup? Is it working for them?

HORROW: Huge. I was there for first game as part of the shellacking to start it with the U.S. It hadn't gotten any better for them. But 30 billion people are watching the World Cup. You have an increase in sponsorship. 80 percent of the homes in Germany. Companies like Adidas increased their sales rate 37 percent. Emberts Airline people are flying that more, Corporate America loves it.

SERWER: Rick, thanks a lot. You have a great weekend too.

All right. Space, the final frontier. At least that's the case for anybody trying to find a place to park in a crowded city. Several companies are testing technology that will help connect drivers to available parking spots n this week's "Brainstorm," I took a drive with Andrew Rollert, the founder and CEO of one such company, Spot Scout.

(BEGIN VIDEOTAPE)

ANDREW ROLLERT, FOUNDER & CEO, SPOT SCOUT: Be careful. I've never driven this car before. You're about to get run over.

Spot Scout is kind of like an eBay of space if you will. Our first application revolves around being able to help people find a sparking space in the area they're going.

SERWER: So you can actually buy and sell parking spaces on the street?

ROLLERT: You can't sell any public space, whether it is a parking bench or on street space. The way it works is the reverse of actually the way the exchange happens now where as you drive down the street and you visually look for signs of somebody leaving and then everybody fights over it. Let me try it.

SERWER: You try it. ROLLERT: It is a new model obviously. Sorry. Can't help you on that way. The way it works on our network is that people are selling information pertaining to their location. When they plan on leaving a space --

SERWER: How do you sign up? How much does it cost?

ROLLERT: It is totally free to sign up. Just like eBay. Free to browse like eBay. The only time we charge is when we connect the person; the spot scout is looking for a space with a person who has a space.

SERWER: How much do you charge for that transaction.

ROLLERT: There would be 15 percent of what the spot caster who put the space on the network for. If a garage charged $20, we would take $3 of that $20.

SERWER: Look there is a parking space. How many people signed up. How many businesses and individuals?

ROLLERT: Now we have about 400 garages nationally.

SERWER: In cities such as what?

ROLLERT: San Francisco, Boston, New York, Miami, Chicago.

SERWER: How many people signed up now?

ROLLERT: Just about 800,000.

SERWER: Wow.

ROLLERT: We haven't gone live yet which just shows you that the public perceives the active looking for parking as a wasteful act, a very needless, useless act. This thing has some torque and if they can stop it by joining a community and getting information, receiving information, their lives will be easier. Twenty minutes wasted looking for a parking space.

SERWER: That's a lot of time.

ROLLERT: You'll never get that back.

SERWER: Right.

(END VIDEOTAPE)

SERWER: Not only does spot scout let you make money off street spaces you can sell a spot in your own driveway. The company rolls out in the fall. So we'll see what the response will be. New York City has no comment at this time on the impact spot scout could have.

Coming up next, superman and super money. A new movie about the man of steel is hitting the screen this weekend. See why the box office on this one is so important. And it is time to hear from you as we read some of your e-mails from the past week. You can send us an e-mail right now to we are at INTHEMONEY@CNN.com.

(COMMERCIAL BREAK)

SERWER: The long Fourth of July weekend is always important for Hollywood as the big studios hope to bring in huge box office numbers and this weekend it is all about the man of steel. Alan has more on why Warner Brothers has a lot more riding on this movie than you might think. What's up that with that?

WASTLER: You know in the past few years, Warner Brothers has usually ridden into the movie season with a 20 percent market share. Now it is about 10 percent. When you're magazine division is having trouble getting the ads, your AOL division is trying to keep the subscribers and of course ratings always a big issue with your networks, you really want your movies to do really well. Well this year we don't have Harry Potter, we don't have the "Lord of the Rings." We have "Superman" and so far the reviews are good. We're not just saying that because we're all cogs in the great machine that is Time Warner.

SERWER: We should point that out.

WASTLER: We should point that out. But apparently people are receiving "Superman" well. Which would be good news for the movie division.

WESTHOVEN: So I feel like the clip of "Superman" saving the burning plane. Is that right?

WASTLER: Well no they are saying actually, I haven't seen the movie yet, but they are saying that there are religious overtones, the father and son and all this. Gives a new element to the Superman mystique. So it sounds kind of interesting.

SERWER: We have a lot of superhero movies out there that is for sure. And I just wonder if we hit a saturation point some how.

WASTLER: Some people are wondering about that. For Time Warner, if "Superman" goes down, there isn't a lot in the pipeline. Lady and the Warrior, Aunt Bully, their foray into whether they can do the Pixar thing.

WESTHOVEN: The whole summer felt really flat.

WASTLER: Yes it has. The one I'm betting on is snakes on a plane, baby. Gotta love that one.

SERWER: All right. What about the "Fun Site of the Week?"

WASTLER: All right. Andy how New Jersey are you? We found a Website where you can take this test. Find out how New Jersey are you. It is funny for people who don't live in New Jersey and are not in the New York metro area either. Because there are some interesting questions there, some interesting questions like this one.

Have you ever found yourself at a diner after 1 am Jennifer?

WESTHOVEN: Of course, in high school all the time. New Jersey has the greatest diners. Disco fries, baby.

SERWER: Exactly.

WASTLER: I have another one. Have you ever been to places featured on the Sopranos? Well I certainly have.

SERWER: I have a yes on that one too.

WASTLER: But I can't say --

SERWER: I can't say. We got another one?

WASTLER: Yes. Do you feel both offended and proud when Hollywood makes fun of New Jersey?

WESTHOVEN: Of course.

SERWER: Don't care.

WASTLER: I kind of do. That's why you scored the lowest.

SERWER: I scored a 35 out of 100. What did you score, Jen?

WESTHOVEN: 75 percent. Or it was 85?

SERWER: How about you Allan? What did you get?

WASTLER: I was 56.

SERWER: And I don't live there, never lived there. You've lived there a lot. Born and bred.

WESTHOVEN: Sure.

SERWER: Proud of it?

WESTHOVEN: Sure.

SERWER: It sound like it works, Allen.

WASTLER: It does. We identified the Jersey girl.

WESTHOVEN: At least I got rid of the hair. You should see my high school pictures.

SERWER: We would love to. Next week.

WESTHOVEN: In this week's "Life after Work" Retired marketing and public relations executive Franny Martin, she says she's feeling younger at 60 than she did at 19. She's spending her retirement making hundred of cookies every day and shipping them all around the world. Valerie Morris has her story.

(BEGIN VIDEOTAPE)

FRANNY MARTIN: This is the beginning of the best chocolate chunk cookie you'll ever taste.

VALERIE MORRIS, CNN CORRESPONDENT (voice over): It may be a simple cookie recipe, but to 60-year-old Franny Martin it is her calling.

MARTIN: I started baking with my grandma when I was 4 years old. I was so fat and innate with what she did, that I was set up by her side. It is in my blood, it is what I love to do.

MORRIS: The former marketing and public relations executive opened cookies on call after retiring from the corporate world.

MARTIN: I wanted to do something that had meaning for me. That would make other people happy.

MORRIS: Martin's business began out of her home with delivery and online orders. She had just one cookie, the chocolate chunk hazelnut. There are now 61 kinds and a retail shop in Douglas, Michigan.

MARTIN: We do upwards of 700 a day and we ship them all over the world. One customer actually said the angels should take care of my hands because they thought the cookies were that good. My business keeps me happy. Happiness keeps you young. I feel younger at 60 than I did at 19. That's just -- a few more wrinkles and my back is not as strong.

MORRIS: Valerie Morris, CNN, New York.

(END VIDEOTAPE)

WESTHOVEN: On our "Life and Work" story next week, a 58-year-old who is spending his retirement breathing and training a rare breed of mustang. His mission is to insure their survival; they were once among the most prized warhorses in the world. We'll be right back with more IN THE MONEY.

(COMMERCIAL BREAK)

SERWER: Now it is time to read your answers to our question about the best way to punish companies that hire illegal aliens.

Mary in Virginia wrote, "Businesses that break the law should lose their operating licenses. And the Social Security Administration should get more funding to notify businesses that employees are using bogus numbers. This will be a lot more affective than building some wall." J.J. in Colorado wrote, "Employers of illegal aliens should be jailed and their business operations confiscated. Also, victims of crimes committed by illegal aliens should be allowed to sue their employers."

And Douglas in Virginia wrote, "There are already good penalties on the books. The law says employers that are found to hire many illegal aliens can be fined between three and ten thousand dollars for each offense and put in prison. The problem is not finding out how to punish the companies, but decided whether we will punish them."

Now for next weeks e-mail question of the week, "Is Warren Buffett's charitable gift inspiring you to give more money to charity?" Send you answers to INTHEMONEY@CNN.com. And you should also visit our show page at CNN.com/INTHEMONEY that is where you will find the address of our "Fun Site of the Week."

Thanks for joining us for this edition of IN THE MONEY. Thanks to "Headline News" correspondent Jennifer Westhoven, and CNNMONEY.com managing editor Allen Wastler. We will see you back here next week Saturday at 1:00, Sunday at 3:00.

See you then.

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