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CEO Salaries Under Inspection; Dow Surges Leave Many Puzzled

Aired October 21, 2006 - 13:00   ET


ANNOUNCER: From New York City America's financial capitol, this is IN THE MONEY.
ANDY SERWER, EDITOR AT LARGE, "FORTUNE" MAGAZINE: Welcome to IN THE MONEY. I'm Andy Serwer sitting in for Jack Cafferty. Coming up on today's program, no applause, just throw money. When oil prices go up, you want to know who's to blame. Now that they're down, find out who's easing your pain.

Plus, beyond the law. If you're mad at what's happening to Ken Lay's Enron cash, stick around. We'll check on whether the grim reaper gets the last word.

Banking on mom and dad, see if the smell of cash can influence a college admissions officer. We'll look at whether top schools give breaks to kids from rich families. What do you think?

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

You know, guys, outrageous CEO payback in the news, William McGwire from United Health Group and Dick Grasso from the New York Stock Exchange, something to talk about there, right?

JENNIFER WESTHOVEN, "HEADLINE NEWS" CORRESPONDENT: Well how much does McGwire have to give back?

SERWER: Well he got a billion six originally in pay with stock options. Then it goes down to about a billion three, because the stock dropped. It looks like he'll have to dial it back about another hundred million, still ends up with a billion dollars of stock options.

ALLEN WASTLER, MANAGING EDITOR, CNNMONEY.COM: And that is the same thing they are talking about with Dick Grasso. He is going to have to give back some. First of all, you shouldn't cry for either gentleman. They're going to walk away with millions, a lot better than any of us will ever do. I'm sort of like, where's the spanking of the board?

WESTHOVEN: Well, the judge did spank the board.

WASTLER: He gave them a real talkin' to. I want to see some money on the table. I want to say you messed up big time; you have to pay back, too.

WESTHOVEN: I liked that a lawyer who said this is stunning that the judge said from now on CEOs have to tell the board how much they're getting and, you know -- they have to disclose their pay. First of all, that's what they should have been doing all along. You go for the board you say this is what I want, you ask the board, and the board says yes or no. It's not brain surgery.

SERWER: He was also looking for more money and the judge said you can forget about that completely. It's funny, all this excessive CEO pay doesn't really seem to be stopping the gravy train. It seems like CEOs are still looking for that big payout. Because they're benchmarking off each other. You can see how it's hard to stop that, and shareholders not revolting yet, but they probably should.

All right. Oil prices this week came to close to a new low after hitting record highs back in July. Whether you're driving a car or heating a home, that downward swing could make paying the bill a lot less painful. That is the easy part, the hard part is figuring out what sent prices so low so fast, Tom Kloza is going to tell us what's up with that. He's the chief oil analyst at the Oil Price Information Service. Tom, so why don't we just start right with that. How did prices go so low so fast off those summer highs?

TOM KLOZA, CHIEF OIL ANALYST, OIL PRICE INFORMATION SERVICE: They went so low so fast, because we built up so much excess and the excess was built up because of sentiment and sentiment this is the year after Katrina, and that maybe the Katrina/Rita cycle was something that was normal. It wasn't.

Prices rallied to numbers, which were very extreme, and almost incumbent on the weather to deliver some sort of calamity and that didn't happen. All the money that went in on a speculative basis really flooded out of the market and we had the typical sort of 25 percent drop in crude oil prices and about a 40 percent drop in gasoline prices, but a bit earlier than what would normally occur.

WESTHOVEN: OK, you just talked about a lot of the speculative money getting flushed out, a lot of hedge funds lost money and maybe they are staying out of this game right now. But I'm wondering how that plays into gas prices now. Can they stay down at these levels for a little while? A lot of drivers are pleased, there are a lot of economists that think that may bode well for holiday shopping.

KLOZA: Well it should bode well. I mean right now today; we are probably paying about $400 million less per day than we paid in that first week of August. So that's a lot of money. We're paying about $250 million less than the same day last year but it would be more difficult with the year-to-year comparisons. We've seen prices drop about 90 cents, we are not going to see them drop on that order, but it will be difficult for prices to rally until the fourth quarter of next year.

WASTLER: Tom what about, let's talk about the weather a bit. The U.S. government is saying hey it might be a mild winter this time around, it seems like we have the speculative money in there, but a warm winter is a warm winter is a warm winter. If it is a warm winter this year can we see prices go down lower and stay low? KLOZA: Yes, I mean generally when crude oil prices go up in the wintertime, the Sherpa that takes them higher is the high heating oil prices. Right now you have heating oil prices that are trading at 14 or 15 dollars a barrel of crude, if I were to run a ten-year average it's more like $4 a barrel. These are excessive numbers for heating oil and it's basically betting that it will be a colder than normal winter or even a brutally cold winter and that's not what the forecasters are saying. They're talking about El Nino, which would be el ka bon to the heating oil market.

SERWER: Tom OPEC late last week cut production by 1.2 million barrels, or I should say said they were going to cut production, the price of oil now about $58 a barrel. Some suggest about $10 of that is global tensions, everything going on around the globe. You buy that?

KLOZA: Well I think there's some global tension, but I think more than global tension, it's the notion that at any moment something could happen that would send prices up to a super spike high. That's one reason why a lot of index funds and investment money has flowed into oil. You know, at some point when that doesn't happen, the money will flow out. We're not going to unravel very quickly here. We may trade between 50 and 70 dollars a barrel for crude instead of some of the excessive numbers we have seen.

WESTHOVEN: Tom I want to ask you about the gas conspiracy theories. I bring it up because sometimes we have viewers that are upset when we talk about it, and some when we don't talk about it. Now that we have you, I want to ask you about it. I haven't seen a Wall Street analysis commentary saying the capacity is down a bit, there's sort of this question, and do they do that to try to stabilize the price of gas? What's your take?

KLOZA: There's really no conspiracy. It's the same conspiracy that leads to fall foliage. Prices are almost always dropping in the last 100 days of the year. They reacted more excessively this summer and went up earlier, so they dropped earlier than normal, but I would think we're giving our politicians too much credit for competent if they said they had the ability to orchestrate the lower prices.

WASTLER: Tom, let's think about a different conspiracy, the conspiracy to make money. If you're an average investor and watched oil was rocketing for a while, now it seems to be dropping a bit. Is it advisable that maybe this is the time to start thinking about adding oil to your portfolio in anticipation of someday the price is going back up?

KLOZA: Well, I think that's the mindset right now. It's a limited resource, but we don't know when the next technological breakthrough will be. Most of the folks that talk about oil never going below $50 a barrel again don't factor in recession. I think refining is a good bet. There's a lot of talk about additional refining capacity, but it doesn't happen until 2010 or 2012, so probably more than being invested in oil or in natural gas, the refining end of the business looks like that might be the end that could prosper longer. SERWER: The mentality is striking. This summer we were running out of oil and now we're awash with the stuff. Do you think the Chevron discovery in the Gulf of Mexico changed the psychology?

KLOZA: It helped change the psychology. That occurred very close to the time that we had the terrorist attack overseas that reminded people that terrorism just won't impact supply, it can impact demand as well. Certainly with these numbers that we have and forward prices close to $60 or higher for the future, you'll have a lot of capital going into oil. It still only costs something in the single-digit range to find oil and bring it to market. So by historical measures, these are really excessive valuations.

SERWER: OK, Tom. It's Tom Kloza who is the chief oil analyst for the Oil Price Information Service, thank you very much for coming on the program.

KLOZA: Nice to be here.

SERWER: When we come back, cashed out. Ken Lay was convicted of stealing millions from Enron. See how his death and a judge's decision are changing where that money goes.

Plus, scaling the ivy-covered walls on a stack of bills. We'll hear an argument that rich kids get a break from elite colleges.

And wiggle room. Find out how to parallel park a car by letting the car do the hard part.


WESTHOVEN: When Enron founder Ken Lay died, that meant his convictions for fraud and conspiracy were wiped off the books as though they never even happened. Attorney Kendall Coffey joins us now to explain this legal ruling and what it means for Enron case going forward.

Welcome to the program. First things first, can you just let us know, this was legal protocol, right? Ken Lay didn't get any special favors when his convictions were erased.

KENDALL COFFEY, ATTORNEY: The judge had no choice. It's actually two days, before a jury where witnesses and other witnesses have their say about the facts and before an appeals court when appellate judges have their say about the law. Legally speaking, this conviction was not yet a done deal, so it had to be erased.

SERWER: Let me ask you, where do we go from here in terms of litigation against his estate? Can you lay that out for us Kendall?

COFFEY: Well, the litigation continues, but the conviction would have been a spectacular shortcut to liability. Without that conviction, now the different litigants, including the S.E.C., are going to have to prove the fraud, the other misconduct, in order to make the case against Ken Lay's estate the old-fashioned way, one witness and one document at a time. Still going to be done, they will still probably be successful. But much more time-consuming and expensive.

WASTLER: Well, does this mean, then, that Ken Lay's family essentially; they'll get a fair chunk of change just by dragging it out?

COFFEY: It means they have an ability to drag it out longer, whether they'll end up with anything given everything that's happened in this case and given all the evidence there is to establish the responsibility of Ken Lay, pretty doubtful, but it will take longer, and it certainly will be more of a process now.

WESTHOVEN: I know we're talking about the American legal system, so asking you to make an estimate is a little crazy, but really say you worked for Enron or invested in Enron, Ken Lay said this is a great time, invest in our stock, your entire retirement savings vanished, what could you reasonably hope for?

COFFEY: Very little with respect to Ken Lay's estate. Billions of dollars of loss are such that whatever a single person has in their estate after all the legal fees and expenses have been paid to the lawyers in the criminal defense case are going to end up being pennies on the dollars for investors.

SERWER: Let me ask you about this money again and Ken Lay's family. This stuff fascinates me. They say they have $45 million. Is it frozen? Can they send it to Switzerland? How much do they get to live off? What's reasonable? Can't they spend it all on trips to Hawaii? I know if they bought houses, this could be seized, but I would just spend it if I were them I guess.

COFFEY: Well sometimes judges can issue preliminary seizures orders that has happened with some of the Enron defendants, you remember practically every Andrew Fastow had was frozen early on in the case. One of the things that won't happen now, though, is as a result of the criminal conviction; the judge could have entered very substantial restitution orders founded upon the criminal case. That would have been a spectacular quick way perhaps as early as next week, had the sentencing gone forward to effect secured assets.

WASTLER: Mr. Coffey, we've got Jeff Skilling, Ken Lay's, I guess, partner in crime, if you will. He's still got a boatload of problems; he is coming up for sentencing soon. Does this event have any bearing at all in his case? Can the prosecutors go after him now that Ken Lay is out of it?

COFFEY: Lay's passing will not help Skilling in the slightest. Indeed, Skilling is going to be walking before that court next week not in the shadow of whatever happened to Ken Lay, but in the shadow of people like Bernie Ebbers, the former Worldcom executive, who, as we remember, was convicted, had both days, was sentenced to 25 years in prison. That is the reality that Skilling is walking into when he goes into court next week.

SERWER: All right. Big picture here, Kendall. Have we learned anything here? And I guess more importantly what about executives, are we taking anything away from this? Does it serve as a deterrent? COFFEY: I don't think this case of Enron is so singular in terms of the dimensions of it. I think what it will tell executives around the country, if you get caught in bad stuff, you could get hammered, but does it reform the basic day-to-day work of the boardroom in how they are going to maximize profits in the short term in order to maximize the benefit of their options. Certainly people will be more careful than they were, but whether anything is fundamentally changed, it's much too soon to tell.

WASTLER: Kendall real quick here, when Ken Lay died, there was a lot of speculation around the Internet and just swirling in the e-mail ether, if you will, about the timing of his death seems remarkably fortuitous for his family. Do you have any thoughts on that at all?

COFFEY: I think there's no evidence to show that this principle about the fact that somebody dies before the appeal is over causes the conviction to be erased that people have intentionally availed themselves of that. No evidence of that here. The reality is he's beyond the punishment of our society and presumably has passed on to a higher authority to judge Ken Lay.

WASTLER: And the final authority does the final authority.

SERWER: Well put.

WASTLER: Mr. Coffey, thank you so much for joining us.

COFFEY: Thanks for including me.

WASTLER: Kendall Coffey of the law firm of Coffey & Wright.

And now it is time for this week's "Look Ahead." The big story of the week will be the Feds' decision on interest rates, and its policy statement. That's on Wednesday. We'll also get some important real estate numbers. September's existing home sales will be out on Wednesday. The new home sales report will be on Thursday. Don't forget to catch our fearless leader, Jack Cafferty, his special program "Broken Government" it airs right after this program at 2:00 p.m. Eastern Time. You can catch it again at 9:00 a.m. Eastern Time on Sunday.

WESTHOVEN: Good show.

WASTLER: It is, excellent program.

And of course for in-depth analysis of all things financial log on to

Now come coming up after the break, ring in the new. The Dow has been playing around in record territory this week. We'll talk about whether Wall Street is breaking out the party hats.

Plus see if the college admission officers start seeing dollar signs when rich kids apply.

And trash, find out how the plot line of an NBC show triggered a suit by an appliance company.


SERWER: The Dow hit the 12,000 mark this week and that had a lot of people in the news media buzzing, but were the folks on Wall Street as interested in the milestone that's the focus of this week's "Street Talk." Well I think they were. Because it means mo money, when the market goes up they are doing better that is generally the way things go, and of course, you know, there are some points here, tries to grab suckers in. When you see the 12,000 mark, people are saying we're excited we're going to send money in. Little people have to be careful about that, I think. Also when you go to 12,000 or 11,000, the percent basis is not as big as it was when the index was lower.

WASTLER: It's only 30 stocks that make up the index. And actually I've heard some schools of thought saying you shouldn't get too excited about it, it's more of a flight to safety kind of in the equity market of going with the big boys and not exposing your risk of the smaller caps. You hang out there more than I do, Jennifer. What do you think about that?

WESTHOVEN: In the small caps?

Actually what I'm kind of interested in is we're talking about Wall Street and the media, but I'm interested in about the Main Street. You know, there is this argument that people have been scared away from the markets, they were day trading five and six years ago, they had a great time, then they lost a lot of money and ever since then they've said that's it, I'm not investing in stocks, and now they are actually looking at the numbers, it is looking a little safer, it didn't happen all at once, and that they're being willing to get to it. A lot will depend on the housing market, of course.

SERWER: The environment is benign. I mean oil prices have come down a lot, interest rates are stable, the job market is doing OK, so there's stuff to be optimistic about, including corporate profits. There are some micro things going on out there, too, like hedge funds. Hedge funds as we talked about invested in those commodities, energy, oil, natural gas, they're into stocks now, and it's interesting, I found out the other day that the redemption period for hedge funds -- if you want to pull money out is November 15th, so the hedge funds have to report at the end of October to their investors, so they want to look real good, so they're buying up stocks that have had good runs to make themselves, they call it window dressing, right? So that could be another reason.

WASTLER: The mutual funds do that.

SERWER: We'll see what happens as we head towards the end of the year.

Coming up on IN THE MONEY, cashing in, we'll speak with a reporter who says the rich get an easier right into ivy-league schools. Surprise, surprise.

Also ahead busting the golden handcuffs. Meeting an author who's out to give the middle class its independence back.

And curb service we'll tell you about an invention that takes the stress out of parallel parking. "Brainstorm" is on the way.


WHITFIELD: Half past the hour, Now in the news, President Bush met for 90 minutes this morning with his top military commanders. They may be changing strategy in Iraq as violence escalates there. The U.S. military says three marines were killed today by enemy action in Anbar Province.

Conflicting reports in an attack in an Iraqi town of Mahmoudiya. Iraq's defense ministry says at least 20 people were killed and 30 others wounded when three parked motorcycles exploded at an out door market. But the interior ministry says three people died and 40 wounded when several mortar rounds landed on the market.

Burning freight cars hang from a bridge in Pennsylvania after a train derailed yesterday about 25 miles outside of Pittsburgh. The cars carry grain alcohol. Officials fear a possible explosion and evacuated nearby homes and businesses.

Coming up at 2:00 Eastern, he takes on the left, right and center and shows if your government is broken. The Jack Cafferty special "Broken Government" at the top of the hour.

Now, back to more of IN THE MONEY.

WASTLER: To get into the top colleges like Harvard, Brown and Stanford you need good grades and even better S.A.T. scores, right? Not if you happen to be the son or daughter of a wealthy donor or celebrity. And there's some other back-door policies that may surprise you. Pulter Prize winner journalist Daniel Golden wrote all about it in his new book "The Price of Admission." How America's ruling class buys its way into the elite colleges. Mr. Golden is the deputy bureau chief in Boston for "Wall Street Journal" and he joins us from that city. Thanks, Dan, for joining us.


WASTLER: Now, we've heard about legacy applications all the time, you know, the kid of some alumnae of the college always getting into the front of the line, so to speak, but you seem to be saying it's worse and more widespread than that. Knock it down for us.

GOLDEN: The preference for children of the rich is not limited to alumni children. There's also a college admissions euphemism called development preference, which is a preference for children of politicians or celebrities or corporate executives who you might expect to give a lot of money if their children are accepted. Then there's all the athletic preferences that favor kids that play blueblood sports, squash, sailing, women's crew, men's crew, equestrian events, even polo. WESTHOVEN: Just to take the other side for a minute, same I'm a wealthy donor. I'm not, but let's say I am a wealthy donor right, my kid is, say, a B student, but boy, I love my kid, I'm a great parent, I'm out there batting for my kid. Apparently colleges say even if tuition is $30,000, the college actually pays $40,000 per kid to really educate them. What's wrong with me giving -- I think a million is a going rate, my kid gets in and that money helps all the other students.

GOLDEN: Well first of all, it's fundamentally unjust. These colleges are non-profits, they're supposed to be educating the diamonds in the rough and fulfilling goals of upward mobility and equal opportunity, so for every kid they allow in like your son is a B student, they're passing over eight or ten A students with tremendous test scores who don't have the money to pay up.

The other thing is they can raise money in other ways besides lowering their admission standards. In my book I document how Caltech and some other schools, they raise plenty of money, they have sizable endowments and yet don't use these preferences, they don't give an edge to alumnae children or children of corporate executives, who can give them a lot of money. They assess students strictly on merit and yet they are able to raise money. So it's a false dilemma to say the only way they can raise money is by giving a break to a B or C students who happen to be rich.

SERWER: Is it really the case, Ddaniel that President Bush's daughter Lauren applied to Princeton, sent the application in a month late, a month late and was accepted? I see my friends' kid applying to schools, they're sweating bullets, prep testing for S.A.T.s, begging, pleading doing everything they can trying to make themselves and here she is throwing it in a month late and getting in. That's outrageous.

GOLDEN: That's right. She did apply late. That's not an isolated instance. The children of the very rich and powerful they have a completely different admissions experience. For example they're much more likely to have an interview directly with the admissions dean rather than with a staffer. The president of the university might show up to escort them around the campus. If they're waitlisted, they often get preference taken off of the wait list. Harvard even has something called the Z list where it puts children of alumnae and big donors where they're waitlisted, and then at the end of the year after everybody goes home and the rejected students can't complain anymore, they're quietly accepted not for that September, but the September after, after they take a gap year, so there's all kinds of mechanisms that colleges use systematically to favor wealthy children.

WESTHOVEN: OK, speaking of the Z list at Harvard, you went to Harvard.

GOLDEN: Yes, I did.

SERWER: Were you on the Z list?

WESTHOVEN: Yes, when did you get interested in this? Was there something at Harvard maybe that made you start thinking something was going on?

GOLDEN: Maybe it was in my subconscious when I was at Harvard, because I was not a legacy or kid of preference, I was not a member of the elite social clubs, so I noticed there was a world I wasn't really a part of, but it just evolved just a few years ago from my reporting for the "Wall Street Journal" on the Michigan affirmative action case, where, you know, white students were suing the University of Michigan saying, hey, we got rejected and we should have been accepted because we had better records than black students who got in. I started looking at affirmative action for some of the privileged white students at Michigan and many other elite universities.

WASTLER: Dan, we're running out of time here, but I want to get to, who gets hurt in this kind of process and situations? We've talked about various strata and various ethnic groups. Who gets hurt in this?

GOLDEN: The biggest victims are the kids who are not connected, particularly Asian-American students. I interviewed one young woman, Asian American, got tremendous S.A.T. score 15 something out of 1600, I said congratulations and she said, no no, we call that an Asian fail. If you don't have 1600 and you're Asian you are not getting in the Ivy League. Because there is so many tremendous Asian American candidates, and then also outstanding middle class and working class white students who don't have a connection. You know these colleges say we take 1 out of 10, but if you don't have a connection your odds are probably 1 in 30, 1 in 40. It's a very uneven, unfair system they're applying to.

WESTHOVEN: All right. Thank you very much, Dan. And for your book and for standing up for the idea that you ought to be able to get into school based on how you do and how hard you work.

GOLDEN: Thank you very much. I appreciate it.

WESTHOVEN: There are lots more to come here on IN THE MONEY. Up next, boxed in, a cubical can feel like a tight fit for white-collar workers these days. We'll hear from an author who's willing to give the middle classroom room to maneuver.

And cars that drive better than you can. Find out why in our "Brainstorm" segment.


WESTHOVEN: From Capitol Hill to the boardroom, the middle class is getting squeezed. Now a new organization is aiming to fight back. United Professionals is taking a stand for unemployed, underemployed and anxiously employed white-collar workers. Before Jack took off for the weekend, he sat down with author Barbara Ehrenreich one of the cofounders of United Professionals, and asked her why she started this organization and how it works.


BARBARA EHRENREICH, CO-FOUNDER UNITED PROFESSIONALS: Well we began to think there had to be some way where people were white- collar, meaning generally college educated. We hear every day on CNN that the middle class is getting beaten up, and that it's eroding yet you don't see a lot of fight back, there is no response. There's a lot of passivity, so the idea is you join, go to, you join, the dues are really low, a dime a day, you could afford that, Andy.

SERWER: I can barely.

EHRENREICH: And one of the things we're going to be doing is just providing a way for people to come together and share their experiences, talk about what we've been going through and what they think is important to change. Then the other big, big thing is to begin to be an advocacy group for people in these situations. That means issues like health insurance, unemployment insurance, which is almost nonexistent right now. It only covers about a third of people who get laid off, and the whole problem of credit and debt. Those are some of the things we're looking at. We want to be a voice on behalf of people who are suffering from those issues.

WESTHOVEN: Does that mean you're replacing something like unions, service unions that have been out there for white-collar professionals have largely disappeared. Is that something more like the ARRP? I'm trying to get a better sense of what this organization looks like.

EHRENREICH: Well we can't be a union, because for one thing, we're reaching out to people in a variety of occupations, and people who don't even have a job, you know. So this is very open, something you become a member, it doesn't matter where you work, I mean you could be a marketing executive one day and you could be working at Wal-Mart the next day, you know, sorting stock, unfortunately that could happen, but you would still be a member of United Professionals, so it's not a union model. We're very supportive of unions that exist for white-collar people, and we in no way want to compete our undercut them. But look, the great majority of this country has no union, whether they're white or blue collar.

WESTHOVEN: When you say they're meeting and telling stories, are they meeting in person? Are they meeting on the Internet? How does it generally look?

EHRENREICH: A lot of it is Internet. We've only been in existence for one month; it's amazing to me how many people want face- to-face chapters. We have people now in over 200 cities saying they want to build a chapter in their city, so they want to get together face-to-face. I think that's great.

CAFFERTY: What about the fact that the forces that are driving the middle class out of business are all emanating from the most part from Washington, D.C., that the government inclusion with the big corporations are seeing to it that there's no increase in minimum wage, that illegal immigrants are allowed to drive down wages overall in this country, corporations are allow allowed to do away with their health insurance plans. How are you in a position to deal with those forces that are so large and so powerful and have such a widespread effect on the people that you're talking about here? EHRENREICH: Well, those things are not going to change Jack, the things you're describing are so true, so real, the big government has not taken the side of the middle class or the working class or whatever you want to call it, it doesn't. It takes the side again and again of the corporate employers. So, you know, that won't change unless we make our voices heard. That's the only way it will change. If they know there are people out there who are just not going to vote for these politicians anymore unless they absolutely guarantee that they're standing up for us in Congress.

SERWER: And just quickly how many people have signed up already?

EHRENREICH: We're getting them every day. They said about 200 want to build chapters. Actual members are coming in in the -- it's less than a thousand we want to get 10,000 by the end of the year.


WESTHOVEN: If you're a fan of Ehrenreich's writing, she said she is not giving up her day job and in the meantime you, which check, out her blog on the UP Website.

In this week's "Brain Storm" the latest high tech cars to hit the road. Jen Rodgers goes behind the wheels to see if all the bells and whistles make your driving life any better.


UNIDENTIFIED MALE: Don't touch the wheel, don't touch the gas.

JEN RODGERS, CNN CORRESPONDENT (voice over): With it's new ls- 460, Lexus hopes to help the parallel parking challenge, but it's not as simple as just pushing the button on the roughly $70,000 car. I canceled it?

UNIDENTIFIED MALE: Yes, they plugged pulled the plug on you.

RODGERS: The driver needs to find an acceptable spot, nothing too tight and line up the car through a series of steps.

PETER VALDES-DAPENA, CNNMONEY.COM: It's something that I think someone will play with a once in awhile, but honestly it takes longer to park the car using that system from my experience than it would to park it from myself.

RODGERS: From no hands to no feet. Mercedes f 600 will set you back six figures, it features cruise control that in some situations accelerates and brakes on its own. You set the maximum speed. It moves confidently through traffic, maintaining a safe distance from the car in front of you.

I'm still not using my feet at all. Now it's slowing me down.

UNIDENTIFIED MALE: Yes, because this car in front of you, it's recognized is going slower than you are. RODGERS: One of the newest safety features from Mercedes Benz is this night vision system, which allows you to see up to 500 feet in front of you at night. Like the Lexus, the Mercedes also features a backup camera. With more technology loaded into than dash now than Apollo 11 had when it landed on the moon, some drivers are facing a technology overload.

MARK CURTIS, MERCEDES OWNER: I don't like it, I don't use it, I turn it off.

RODGERS: Mark Curtis owns a top of the line Mercedes, but don't ask him to find the night vision button.

CURTIS: They should give you a lesson on it.

RODGERS: Even if drivers aren't using all the features, Mercedes say they help sell cars so far the $17,000 night vision option has exceed expectations.

UNIDENTIFIED MALE: It's something we can't make enough of.

RODGERS: The key to profitability with new advancements is making them available to the masses. Your shot at the car with all the fixings may not be as distant as you think.

UNIDENTIFIED MALE: The x classes and $80,000 at least. It may trickle down to $30,000 or $40,000 cars, but I wouldn't expect to see that on your Toyota Corolla soon.

RODGERS: The option least likely to make it's way down the automotive food chain, the massaging seats.

UNIDENTIFIED MALE: It's like little seats going boop, boop, boop, up and down your back.

RODGERS: Jen Rodger, CNN, New York.


WESTHOVEN: Coming up next on IN THE MONEY, NBC is getting nice ratings for it's new show "Heroes." But not all the publicity has been the good kind. And it's time to hear from you as we read some of your e-mails from the past week. Send us an e-mail right now, too. We are


SERWER: Sometimes good publicity is in the eye or in this case the hand of the beholder. Allen Wastler has the story of a lawsuit that seems frivolous but may not be -- Allen.

WASTLER: The number here is 14.1 million. What is that, you ask? That is the number of people who watched the pilot episode of "Heroes." Have you seen this show on NBC? You'd love this show, Andy. It's about everyday people getting super-powers and they're going to save the world in stuff. But for a while there, if you got stay tuned into episode three or four, they're like, I want to see the pilot and how this all started, you couldn't find it anywhere for a while, because they took it off. Why? If the first one, indestructible girl, there she is, she's a cheerleader, right in but anything that happens to her, she can recover from, so to test out her theory, she sticks her hand in the garbage disposal, rips it out for your viewing pleasure.

Now, the trick is the garbage disposal was the incinerator made by Emerson Electric. So Emerson Electric saw this and said, wait a minute, that's not the proper use of our garbage disposal, and NBC, what are you doing? We're going to sue you for putting a bad light on our product.

WESTHOVEN: Couldn't they digitally fudge that?

WESTHOVEN: They could.

And NBC said, we'll edit and everything. Just pointing out connections hear, which I have to give credit, a columnist on our Website made the connection, Paula Monica, GE which owns NBC, also has this appliance division.

SERWER: Here we go.

WESTHOVEN: So there's your conspiracy. You've been looking for a conspiracy theory, Jennifer? We got it for you.

WESTHOVEN: They probably thought they were playing nice with the company.

WESTHOVEN: My theory is that nobody even thought about it.

SERWER: But the other thing is, is Emerson doing this not to be frivolous but to get publicity? I didn't know any brand names of garbage disposals until now. Now I know about the incinerator. Now I'm going to buy one.

WASTLER: NBC gets P.R. out of the whole "Heroes" thing, because we had to tell you about the indestructible cheerleader.

SERWER: I want to meet the cheerleader, but --

WASTLER: Litigation that's a win/win for everybody.

SERWER: Absolutely.

WESTHOVEN: Indestructible cheerleader, OK.

Every year in American more than 600,000 people are released from prison according to the Department of Justis, many with nowhere to go and no job. Within three years, nearly 7 out of 10 of them land right back in jail, but one woman is determined to change that in this week's "Life after Work."

(BEGIN VIDEO CLIP) VALERIE MORRIS, CNN CORRESPONDENT (voice over): As an antique dealer for 30 years, Martha Rollins worked at revitalizing used items making them new and beautiful. Today her work is similar, only now she's helping restore people who were previously incarcerated.

MARTHA FRANCK ROLLINS, FOUNDER, BOAZ & RUTH: We believe that the prisons and jails are filled with gifted people, and we're helping to release these gifts back to society.

MORRIS: Rollins founded Boaz & Ruth in Richmond, Virginia, it is a nonprofit offering jobs, career training and life lessons like anger management and public speaking. Trainees work at one of Boaz & Ruth's six businesses, they are all located in an area desperate for an economic boost.

ROLLINS: It had been empty blocks, dealers on the corner selling drugs, high, high crime, and by rotating the businesses here where no sane retailer would ever go, we're bringing hope back to the neighborhood, people getting meaningful jobs, paying taxes, becoming productive citizens. It's making a difference. The other part of my job is living in the miracle of transformation of people and realizing that I'm transformed daily, too.

MORRIS: Valerie Morris, CNN.


WESTHOVEN: Stay with us. We'll be right back with a lot more IN THE MONEY.


SERWER: Now it's time to read your answers to our question about whether you think this is a good time to get back in the stock market.

Louise writes, "Heck no. The Dow is just 30 stocks and its new record is really misleading when you consider inflation. You can still make more with pitiful CD's."

Jack in New York City writes, "The Dow highs mean nothing because everything else costs a lot more. Gas is much more expensive than it was in 2000 and so are property taxes. Any gains you could make in the stock market would not cover those new expenses."

And Shirley in Idaho writes, "Yes, lets all put more money in the stock market so the big corporations can ship more jobs overseas and pay their executives bigger bonuses. I'd like to find a way to invest my money in companies that are creating manufacturing jobs right here in the U.S."

Now for next week's e-mail question of the week, "Have you moved in the last five years and if so, why?" Send your answers to, and you should also visit or show page at

Thanks for joining us today for this edition of IN THE MONEY. Thanks to "Headline News" correspondent Jennifer Westhoven, and managing editor Allen Wastler. And be sure to stay tuned for Jack Cafferty and his special program "Broken Government" coming up next here on CNN. We will see you back here next week Saturday at 1:00 and Sunday at 3:00 see you then.



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