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Your Money

Two Missing Soldiers I.D. Cards Found; Airport Delays; Detroit Claims Getting Better Gas Mileage Will Cost You and Them; Roller Coaster Ride on Wall Street; Using a Business's Credit Card Instead of Your Own

Aired June 17, 2007 - 15:00   ET

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

SUSAN ROESGEN, CNN CORRESPONDENT: General, the group that claimed responsibility for kidnapping these soldiers has said that these two guys have been killed. Do you have any reason based on what you've found now in this house in Samarra to believe that they might still be alive?
MAJ. GEN. BENJAMIN MIXON, CMDR. 25TH INFANTRY DIVISION: We have no evidence either way. We did an extensive search of the area, to include using specially trained dogs, and we found no evidence of their presence, and all the of the items that we found in the house are currently being exploited to see what can be learned about their other whereabouts.

ROESGEN: So if you've seen no sign of these two in this area, does that lead you to believe that they were never actually there in that house, that just their I.D. cards were taken there and that the video of the I.D. cards put up on the Islamic Web site was done at that house?

MIXON: That's a possibility, because this was definitely a video production center where they could link into the Internet, as well as a possible command and control site. This was a tremendous intelligence find for coalition forces. And hopefully we will find more information on the data that's on the computers about the whereabouts of our great soldiers.

ROESGEN: General, I know that you never stop looking; you're going to continue to look for these two men. But does your search go back to the initial area where they were believed to have been kidnapped back in May?

MIXON: Well, those forces that are down there under the command of the 3rd Infantry Division are continuing the search. We will continue to follow any leads possible as, as you've stated, we never leave a fallen comrade and we will continue the search.

ROESGEN: Would you have anything to say to the parents? I know that here on CNN this morning, we spoke to the stepfather of Private Byron Fouty, and he expressed gratitude to your forces for continuing to look. He expressed concern to your forces that they not be in any danger either. I know we're sort of hoping against hope here that these men are still alive, since there's been no physical evidence of their whereabouts since that attack. Would you have anything to say to the parents? I know that you spoke to them privately earlier. Before you announced the finding of these I.D.s. But do you have anything to say now?

MIXON: I did not speak to them, but other representatives did. I would tell them to not give up hope. We will continue to search. But our hearts and our prayers go out to them for strength during these very difficult times.

ROESGEN: OK, General Benjamin Mixon, we thank you very much for joining us. We will have much more on this story as it continues to come into us here in the CNN NEWSROOM.

Now let's join IN THE MONEY in progress.

PAT KIERNAN, CNN CORRESPONDENT, IN THE MONEY: Time for taxing and congestion at the airport, they'll pad the arrival times so they have time to circle the airport. It's taking longer to get wherever you are going.

ALI VELSHI, CNN CORRESPONDENT, IN THE MONEY: So you got tighter security, you got weather problems, you really have more planes in the air than ever before, a lot of private planes in the air. All sorts of things are happening. And it's summer travel season, so you've got more passengers. Now, back on, I guess it was Valentine's Day, we saw the weather situation, the storm we had, JetBlue getting all the headlines for the delays.

KIERNAN: Not the only airline but the one that didn't have a good enough plan in place to deal with it.

VELSHI: A few months before that, there was another incident. After being stuck on a plane for nearly nine hours recently. Kate Hanni started the coalition for an airline passenger's bill of rights and she joins us now from Washington, D.C. Kate, welcome to the show. You must have been furious.

KATE HANNI, AIRLINE PASSENGER ADVOCATE: Oh, absolutely furious. A switch went off for me and I said you know I will not be victimized by the airlines. And evidently that same switch went off for all of the 5,000 people on our -- the planes that were diverted that night.

You know, Kate, there are two victimizations of passengers as there is. There are these long incidents like yours where passengers have been prisoners on a plane for 6 hours or 8 hours or 10 hours. But there's other thing that we were talking about which is that there are more flights, taking more times, more congestion at the airport. Maybe they only steal a half hour from you at a time but it all adds up. What do we do about that? You feel like you're making any progress?

HANNI: We do. We are making progress. First of all, we brought it to the public's awareness. A couple of days ago we had our report card that we announced for the coalition that raided the airlines and that actually exposed these long taxi-out times and how many planes are affected by that.

VELSHI: You actually -- we can show a list here of what you found to have the most tarmac delays. American Airlines, United and U.S. Airways. HANNI: Yes.

VELSHI: That's a particular concern, getting stuck in a plane on the tarmac.

HANNI: Well yeah, actually departing from the gate with the full knowledge by management that you're not going anywhere for three or four hours before takeoff is a deceptive business practice, and yet there's no law to prevent them from doing it. And we know that many, many Congressmen and Senators have had this happen because we heard about it during the hearings. So the progress that we're making is that we're exposing it. I announced a stranded passengers' hot line during our press conference and I got 769 calls within 3 hours.

VELSHI: Is that hot line still open?

HANNI: Yes.

VELSHI: What's the number?

HANNI: 1-877-flyers-6.

KIERNAN: Kate the story from JetBlue and the others back on Valentine's Day was in most cases they were making the decisions they were making with good intentions. Do you think that's true?

HANNI: No. I think that they did the very best thing they could have after the passengers exited the plane. I think their customer service was excellent. But during the incident and I testified in New York with the head of the Port Authority, they did not call the Port Authority until, you know, very, very late in the game. And the Port Authority had no idea that those jets were out on the tarmac. And the FAA had no idea that they were there, because they were not even under the purview of ground control. So the reason for them being out there was entirely JetBlue and their management not wanting to cancel those flights and refund the money of those passengers and deal with -- there's a new phrase that we're coining and it's actually an insider phrase called passenger migration. JetBlue does not have reciprocity with other airlines. So once you cancel your ticket there, they can't put you on another airline.

KIERNAN: Good point.

I don't want to make this all about revisiting JetBlue. Constructively for the summer, are there things you can do as a passenger as defense against this?

HANNI: Well, the first thing you need to do is pack for a 15- hour flight even if it's a two-hour flight.

VELSHI: Food, water.

HANNI: Well, I have an emergency kit here. It's got an astronaut diaper in it. We've got a camera so that you can document whatever happens. If you're on the tarmac and they're telling you it's a weather problem but the sky is sunny, take photographs. If you're in the plane longer than four hours and all the passengers want off, get a list of the passengers and send that list to the captain of the ship or the captain of the plane and say, you know, we feel we're being held against our will. We want to go to a gate. Let us off now.

VELSHI: Kate, good advice. Thank you so much. We've passed that number on to our viewers. Good luck and keep us posted on how things develop on that front, Kate Hanni.

HANNI: You bet.

VELSHI: To be fair, Kate also had their study also had a list of the best airlines in terms of on-time performance. We can show you what that looks like. I think she's right. There's a level of frustration -- by the way, there's the airlines.

KIERNAN: Hawaiian, Aloha and Alaska.

VELSHI: Unfortunately, they're not the ones we fly to get to most locations here on the east coast in the summer. The frustration is when you're out there and can't do anything about it. If you're sitting at a gate or an airport, you've got options.

KIERNAN: Even when you're at the airport, if I call ahead, two hours ahead, and they say the flight is on time but sometimes they know darn well the flight didn't take off from where it was coming.

VELSHI: So it couldn't possibly be on time. We'll see where this goes.

Coming up, Detroit says getting better gas mileage is going to cost them and you a bundle. Are they taking you for a ride? We'll find out.

(COMMERCIAL BREAK)

VELSHI: Welcome back. Christine is on vacation. Our friend Pat Kiernan is sitting in. Anybody that knows him knows he's the gadget guy.

KIERNAN: I don't know about, but I wired this thing up last night because I know we were talking about compact fluorescent light bulbs, this is not a compact fluorescent but this is the kind of light fixture that they love to install in everybody's houses now.

VELSHI: They are smaller, they fit into the --

KIERNAN: You can recess them. You can have a whole strip of them. I was in the Home Depot a couple of days ago and I saw now that they have the MR-16 bulb, which is the little bulb in a compact fluorescent. They managed to shrink a fluorescent light bulb down. Here it is, here is what it looks like. You can see the little fluorescent tubes that are winding through there. The thing about that now is that you can, in the space that you thought you could only have one of those energy pig incandescent bulbs, you can put one these in and you can make the planet a greener place. VELSHI: All right. So your houses, your apartment will be greener. When Christine is here she often reminds me that I can reduce my carbon footprint by unplugging the VCR when I leave the house.

KIERNAN: Hold. You still drive that truck?

VELSHI: And the problem remains that I drive the truck and the truck gets 17 miles to a gallon. I suspect that's a problem that I share in common with many Americans.

KIERNAN: Because you did that carbon footprint thing.

VELSHI: I measured my carbon footprint and for all of the bulbs and VCRs and all that, the problem is my truck. Some of that is my problem. Some of that is with the folks who make cars. There's a bill in the Senate right now that will increase fuel economy standards for the first time in 20 years. It's not a big increase in fuel economy but Detroit says it will break the industry or whatever part of the Detroit auto industry isn't already broken. Detroit is pushing for a watered-down version it and our resident myth buster Jennifer Westhoven joins us now to clear the air as it were about that.

JENNIFER WESTHOVEN, CNN CORRESPONDENT: Well we really want to look at some of the claims here that Detroit, they haven't been explicitly saying this number but there was a big "Forbes" article where they talked to the automakers. And it sounds like what they were hearing was that it would cost $8600.00 more for you to get the same American car with this better mileage. So their argument was Americans are ever going to pay $8600. When we talked about this on "Headline News," almost all the e-mail was, I'm not paying $8600, that's too much.

KIERNAN: You didn't ever believe when they started with the hybrids, the first time we went for a drive in a hybrid was five years ago. Now they're everywhere. People are catching on to it.

WESTHOVEN: Hondas and Toyotas that are comparable don't cost $8600 more.

VELSHI: They don't cost $8600 more. What's the problem?

WESTHOVEN: Exactly, what's the problem? That's something coming up. While Detroit has been fighting tooth and nail they've also been putting up these ads, I don't know if you have seen them, that are basically, they are kind of scare tactic. The way that I am going to phrase it is they basically say bye-bye Expedition, hello Yugo, we're all going to be driving tiny European cars if this passes.

VELSHI: We heard this argument from the American automobile for a long time that the reason they make all these big cars is because Americans like to drive them.

KIERNAN: Yeah, that and the difference between the truck category and the car category. They can actually play some games with the fuel standards. WESTHOVEN: That's been the big thing. In the meantime while they've been playing games with the fuel standards, Americans are increasingly, right, buying Asian made cars and they are getting better mileage over there. A lot of Senators are arguing, look enough is enough; all of this stonewalling is essentially crippling Detroit. As long as we've been listening to you and leaving the mileage standards alone, they've actually slipped and gone down in some of the years that we've watched. And Detroit has lost hundreds of thousands of jobs.

KIERNAN: These targets they're talking about are 15 years out before they get to the final goals.

VELSHI: Their average is, it's not like they need every car to get 40 miles to a gallon or something. It's the whole average of all of the cars that you build has to slightly move up. So if you're Toyota and your Honda and you have these hybrid cars, you're ahead the game.

WESTHOVEN: In this new amendment they may get more time. They're looking for those exemptions for the pickups and the SUVs. Maybe they'll get them, but it's very interesting to watch them play this game to try because these SUVs, they do eat up so much gas mileage. The Senators are saying, look we've got to worry about pollution, too and our dependence on oil. It is not just what people --

KIERNAN: We have to be accountable ourselves. There's that Census Bureau survey that came out, 9 out of 10 workers commuted to work by car in America, 77 percent are driving alone. The public transit average for community work in America 4%. That's not good use of fuel.

WESTHOVEN: It's not.

VELSHI: Getting out of my truck will do, again as I say, more than the compact fluorescent. If we can learn some better habits out of this thing.

WESTHOVEN: But they've got to make public transport better in many cities.

KIERNAN: We have to stop building our cities that everybody is ten miles from public transit.

VELSHI: Jennifer, good to see you. Thank you so much for that.

We're going to take a break. When we come back we'll tell you why Wall Street has been reaching for the Dramamine this week.

(COMMERCIAL BREAK)

KIERNAN: Triple digit move on the Dow one day, another day, another day.

VELSHI: Yeah. I mean it's kind of the price for having a Dow that's above 13,000, right? It used to mean something. It really has been a roller coaster ride for investors this week, but you might want to get used to it. Susan Lisovicz is at the floor of the New York Stock Exchange as she always is. You are feeling this 100-point moves a few times this week.

SUSAN LISOVICZ, CNN CORRESPONDENT: Yes, I mean there's no question about it, the volatility is here. Going into Friday, five out of seven sessions we saw triple digit moves either upside or downside. But your point is well taken, Ali, that when you're at levels of 13,600, 100 points isn't even a 1 percent move. So it has to be considered. Just like a million bucks ain't what it used to be, a triple digit move isn't what it used to be on Wall Street.

And, you know, none other than Warren Buffett pointed that out a few weeks ago, the Oracle of Omaha saying look we're at all-time highs remember, not the Nasdaq but the Dow and so those are pretty lofty levels, 100 points isn't that big of a move.

KIERNAN: You say a million bucks isn't what it used to be. You really need $5 million to do what a million used to because inflation is out there.

LISOVICZ: To live like you do, Pat. Big welcome back to you by the way, great to see you and Ali together again. Inflation has been really one of the movers in the market. Let's be fair on that. And certainly we had plenty of inflation reads with wholesale and consumer prices. And it's funny how Wall Street interprets it. You know, the headline number, the overall number shows, whoops, and a big jump in overall inflation because of energy prices, specifically what we're paying for gas. But if you strip it out -- I mean, we still all use gasoline for our cars, right? But if you strip it out, it just showed a tiny fractional movement both wholesale level and consumer level. That spurred on the bulls.

KIERNAN: You can make yourself crazy though if you sit there and press the refresh button on your Internet to look at your stock prices.

VELSHI: That's what a lot of folks do, as Susan knows. Susan, if you look at those stock prices and you have been looking at them for a few years, you've seen fantastic performance. In fact the best sector of all is the financial sector.

LISOVICZ: Right, and of course as you and Pat well know, Ali, that was really one of the pillars of the great bull rally in the '90s. You take a look at J.P. Morgan, which is one of the financial companies in the Dow 30; it certainly had wild swings this week. Tuesday when the bond market, when we saw the yield, the interest rates go to five year high on the ten-year note which is tied to so many consumer loans, including mortgages, J.P. Morgan fell nearly 2 percent. The next couple of days, nice rallies on J.P. Morgan. It's kind of a volatile time.

We do have a Federal Reserve meeting in less than two weeks. And then in July, by mid July, we'll be getting a crush of quarterly earnings to find out how Corporate America did in the second quarter. So we have a lot of data coming in. It could be more volatility ahead, guys.

VELSHI: Susan, next week, big week for me. You know what I'm doing on Monday?

LISOVICZ: Oh, you're going to be here at the New York Stock Exchange.

VELSHI: I am filling in for you.

LISOVICZ: So I might as well never come back, they're going to love you so much. I might as well take the summer off.

VELSHI: Leave me notes on the login on the computer. Good to see you Susan.

LISOVICZ: Always great to see you. And Pat, welcome back.

KIERNAN: Thanks Susan.

VELSHI: Well coming up on IN THE MONEY, see if those in store credit cards are really worth that instant 20 percent discount you get for signing up. We are coming right back.

(COMMERCIAL BREAK)

ROESGEN: Now in the news, coalition forces in Iraq have found the ID cards of two U.S. soldiers missing since an insurgent attack in May. The I.D.s were found in a raid on a suspected al Qaeda safe house near Samarra. No one was in that safe house and no word on the faith of the soldiers.

Closing statements are now under way in the ethics trial against the prosecutor in the Duke Lacrosse rape case. District Attorney Mike Nifong tearfully announced yesterday that he plans to resign, but he could lose his law license.

A computer glitch is now mostly fixed on the International Space Station. And in a space walk, an astronaut stapled down a section of the shuttles thermal heat blanket, easing the concern over the shuttle's safety during re-entry.

Coming up at the top of the hour, a 5-year-old comes out of the woods naked, scratched and hungry, but alive, after two days alone. Don't miss her incredible story.

Now back to IN THE MONEY.

VELSHI: You can tell a lot about a person from what's in their wallet, even if you're not an identity thief. One of the things I think you probably could find out a difference between Pat and me is that Pat will have probably an American Express and a Visa, maybe a MasterCard, and I am more likely to have different kind of cards. I was walking through the mall --

KIERNAN: Because business in a mall. VELSHI: You can into a J. Crew or the Gap or in this case Banana Republic, any store that you go into that takes a major credit card also takes their own credit card. So why would you use their own credit card?

KIERNAN: I did this at Banana Republic a few months ago. They've all got the teaser rates. They say if you sign up for the credit card today, you're going to get 10 percent off. What, this is Gap, 15 percent off all your Gap card purchases today.

VELSHI: OK. So the idea is you sign up, you get the 15 percent off. And that's fine. It's a good deal if you keep track of this. Let's just talk about if you didn't keep track of it or you carry a balance what this operation would look like. We talk about interest rates all the time. The Fed rate is 5.25 percent. Everybody wants to know why that matters to them, it doesn't. The prime rate, which is always three points higher, is 8.25 percent, that matters a little more. The average credit card rate, if you carry a balance, is 14.56 percent that's average.

KIERNAN: But then look at the store credit cards.

VELSHI: Take a look at the Gap.

KIERNAN: This is 21 percent; Wal-Mart's card is at 22 and change.

VELSHI: So that 15 percent that you gained is fantastic, if you can keep track of it.

KIERNAN: If you pay that on time and then cancel the credit card, you get your 15 percent and it was a great deal. The problem, when you look at some of these store credit cards, they've got a delinquency rate getting close to 30 percent.

That means a bunch of people took that offer and didn't pay, didn't pay on time, they're holding a balance over.

VELSHI: You're way worse off than when you started. With us from Washington is Ed Mierzwinski he is of the U.S. Public Interest Research Group. He's done some work in this. Ed do you think we characterize that fairly, that it's a great deal for some people and a really bad deal for most people.

ED MIERZWINSKI, U.S. PUBLIC INTEREST RESEARCH GROUP: Absolutely correct. It's a bad deal for anybody that carries a balance. They trick you or not trick you but encourage you with the impulse of getting 10 percent off today or a teaser rate off today, take this card. It's got a higher rate. If you keep the balance, you're going to pay and pay.

KIERNAN: What should people be doing if you're enticed by one of those offers? You have to stay on top of the bill or so you think they should not bother?

MIERZWINSKI: I think you should be on top of the bill. There are people for whom that's a good card to get. If you don't have good credit, it's easier to get those kinds of cards. But they're going to think that they've got the card in their wallet and it's saying "use me, use me." you're going to be spending more time and money in that store than you were before. You've got to make that tradeoff.

VELSHI: Pat, I recently put in a home theater system and I bought my stuff at Best Buy, and I took the offer, the offer was you don't pay a cent till I don't know 2086 or something like that.

KIERNAN: Which again ...

VELSHI: As long as I get it on time. If I miss it or I'm late, all of that interest comes due. Would you have done that?

KIERNAN: You know, I'm good at keeping a calendar. But to remember the exact date that the Best Buy bill or whatever it is due, it's tough.

MIERZWINSKI: That's a tough one, by the way, because sometimes that interest will be retroactively due to the date of the purchase.

VELSHI: That's exactly right. If you don't make those payments by the date -- if I don't pay it in full until the exact date, the whole thing is gone. All the interest I avoided for three years or two years comes due. But, again, strikes me if you're organized like Pat, you can save yourself some money with these different offers and systems.

MIERZWINSKI: I think you're exactly right. But whether a credit card from a bank or these kinds of credit cards, there are really two kind of people. There are the organized people and there's everybody else. You have to really make a choice, if you're carrying high-cost credit card debt; they've got a lot of ways to ding you. Even if you're not late with the credit card, some of the credit card companies will ding you. If you go over 50 percent of your limit with your balance, some credit cards may ding you with a higher interest rate.

You've got to pay earlier and earlier each month to avoid the late fees. And the late fees don't come by themselves. They often come with an additional increase in your interest rate. So I've got to be careful, like you say.

KIERNAN: And simple advice that doesn't strictly relate to this situation, but if you need to have a little extra money and you're borrowing somehow, one of these store credit cards isn't the way to do it. Some of the higher interest rate credit cards aren't the way to do it. What's the best way to take on debt if you have to?

MIERZWINSKI: I think more people need to think about shopping at credit unions rather than banks. More people then they are qualified to join a local community or a store -- I'm sorry, a credit union related to where they work or where they live. A credit union has much easier terms, much easier to qualify. The worst thing about cash advances and those little checks that some credit card companies mail you are cash advances, is they come with a higher interest rate than your regular purchases. The interest rate becomes due immediately. And when you make your payments, your payments go to the lower interest rate of your purchases until you've paid off all your purchases before they even start paying off the higher interest cash advances. So credit unions are better.

VELSHI: Quick question for you. If you did take one of these offers as 15 or 20 percent or don't pay until and you've done it the right way, you've paid it off, do you cancel that credit card or do you keep it open?

MIERZWINSKI: I'd advise people that they should cancel it, but you don't have to cancel it. People think that having a lot of open credit cards is bad for their credit score. In fact, these cards generally have lower rates than I'm sorry, they have lower balance limits than a bankcard. So they don't hurt you as much. What hurts you more is being over 50 percent of your limit on your cards? But the thing that people should understand as well is that with your credit score, an "a" on a bankcard is worth more than an "a" on a store card.

The credit-scoring computer likes bankcards better than it likes these. But if you're a high-risk consumer, this is a good way to get the start down the way to good credit. Get the store card first, build up your credit, and then get the bankcard.

KIERNAN: And the mystery of what the credit-scoring computer does is a one-hour program in itself.

VELSHI: Topic for another day.

MIERZWINSKI: Coca-Cola formula.

KIERNAN: Ed Mierzwinski with the U.S. Public Interest Rate Research Group, thanks Ed. God information today.

MIERZWINSI: Thank you.

VELSHI: And you know, I've not been fantastic about keeping up some of those payments sometimes. I've been hurt by my own wisdom.

coming up next on IN THE MONEY more than a dozen movie sequels are coming out this summer. Are they great movies or are you just not a very demanding audience? We'll find out.

(COMMERCIAL BREAK)

VELSHI: A couple of things you can count on when summer comes around, the nice hot weather and movie sequels. There are no less than 14 movie sequels out this summer.

KIERNAN: It sort of brings up like a chicken and an egg thing, which is which came first, the audience or the sequel? Because people go to these things.

VELSHI: They certainly do and they lay out a lot of money to go to them. The movie industry is not hurting. Why is it all about sequels? Why are they not more creative about this? Here to answer that question or try to is our old friend Paul Dergarabedian, he is the president of Media By Numbers. Paul, quite a phenomenon, isn't it?

PAUL DEGARABEDIAN, PRESIDENT, MEDIA BY NUMBERS: It is. And every year it seems like there are more and more sequels and people keep saying there's not enough originality in Hollywood but they keep lining up. I like the chicken and the egg analogy because if all there are is sequels, then that's what people are going to go to. Out of the past six weekends, five of the weekends have been top lined by a sequel. I think also with "Fantastic Four" opening that will be yet another sequel at the top of the chart.

KIERNAN: Not only that. When you look at the numbers from some of these movies that have been out this year, "Shrek" did $42 million the first time out, "Shrek 2" did a $108 million, "Shrek the Third", a $121 million, "Pirates of the Caribbean," the last two movies have been $100 million plus. I'm just talking about opening weekend numbers here. We are proving this is what we want.

DEGARABEDIAN: We are, and there's no reason for the studios to stop making these sequels if the numbers bear out the fact people want to see them. What we have seen is a lot of these sequels open bigger than their predecessors but in the long haul the finally domestic gross they're kind faltering, they are not holding up as well. Thank goodness for the worldwide returns because that really feeds into the bottom line and those moneys help the profit margin so to speak.

VELSHI: Let's lay the whole thing bare. A movie typically unless it really does substantially well is going to do better than the year before it or the ten years or 20 years because of what we lay out for a movie these days. There are no screens typically; there is more hype, more advertising and higher ticket prices.

DEGARABEDIAN: That's right. And higher ticket prices drive all these numbers up. But if you look at the attendance figures, they're pretty flat. And in some cases these big opening weekends, they don't fuel a long-term success. It becomes an opening weekend business, but I think with going back to the whole idea of sequel sequels, is that there is brand name recognition. What the studios usually try to do is bring back the original cast and original director to give people some sort of comfort factor and when you're plunking down your $10 or $12 for a movie, if you know what you're getting going in, like going to a restaurant where you know the food is good. You know what you're going to get with a sequel and there is a comfort level.

KIERNAN: Yes and sometimes you know especially the teenagers on a Friday night, they want that comfort level. They want to have some fun for two hours and then they move on.

VELSHI: That's right.

KIERNAN: Is there an ability of Hollywood to cater to two audiences at once? Can they make movies that appeal to intellect and are original on one hand and not make a ton of money but do enough profits there that that will work and then still make the sequels on the other side?

DEGARABEDIAN: Well, I think what Hollywood does; it subsidizes those smaller more intellectual based films with these big blockbusters. I mean that feeds the whole bottom line, it's this big machine and you have to feed that machine with these big summer style blockbusters in order to subsidize the cost of the smaller more intimate films. That is interesting, a film like "Knocked Up" for instance which is one of the few original films out there, because not only are sequels derivated there's a lot of others remake films based on other media. There's not a lot of originality out there but it seems audiences are loving this.

VELSHI: Is it art? Is it good? Is it a good trend? It's fantastic for Hollywood if you keep milking everybody until you make "Shrek the 18th" until the teenagers aren't interested.

DEGARABEDIAN: Well I think what it is in the summer, you know summer is 18 weeks, let's say, and it accounts for 40 percent of the total year box office. If he hooves the studios to create their least risk in that time frame. Bringing sequels out every weekend kind of mitigates their risk. Then we have to look for the fall and holiday period for the Oscar worthy films, the more intellectually based film, and those types of things. If the audience didn't show up, they would change their ways. But nobody is signaling to Hollywood that they hate sequels at that this point.

VELSHI: Well good to talk to you. Thank you for talking to us about this and validating some of our views. Of those ones that are some of the big ones, I probably want to see "Shrek the Third."

KIERNAN: Have you seen "Knocked Up" yet?

VELSHI: No.

KIERNAN: Excellent. Don't take any kids, though.

VELSHI: OK. I don't have any kids to take, that I know of. I saw "Pirates of the Caribbean: At World's End." It's actually the first movie that I left before the end of it. Not that I hated it. Because I was bored and it was entirely too long.

KIERNAN: The end was supposed to be the best part.

VELSHI: That is what I heard. Not only did I drop $15 bucks but I may drop another to see what I missed. I love what I do but if I didn't, I don't know what I'd do. Maybe I'd open a business. It's risky but for some people it's the realization of the American dream. Betty Nguyen has the story of one man whose risk is literally taking the cake.

(BEGIN VIDEO CLIP)

BETTY NGUYEN, CNN CORRESPONDENT (voice over): This is the aptly named bakery born out of owner Warren Brown's forever cakes.

WARREN BROWN, OWNER & FOUNDER, CAKELOVE: Baking cakes from scratch is something that I started after I began practicing law.

NGUYEN: The health care litigater was disenchanted with his day job, so he started thinking about his future.

BROWN: I don't want to have a midlife crises that I can predict. I know that I don't want to continue practicing law for the rest of my life, and I know that I love food. I didn't grow up like making cookies and cakes with my mom. So baking for me was something that was very new, and I had a fear of flour. I put myself through the Warren Brown culinary school. I marched through different recipes, experimenting and trying. The thing that I say to myself that made me say you've got to get out of this law by day, baking by night, was that I physically ran out of gas. I had to go to the emergency room. The doctors said, listen, you have to slow down.

NGUYEN: So Brown turned his full attention to making a career out of cake. A year and a half after Brown quit practicing law his first Cakelove store opened. There are now three in the Washington area but it's not the only outlet of his passion.

BROWN: Here's a guy who is on a quest to learn more about baking.

UNIDENTIFIED MALE: For me it's a total dream.

BROWN: When I'm baking, I'm happy. I didn't have that practicing law. With cake, I finally got to this place where I always wanted to be.

NGUYEN: Betty Nguyen, CNN.

(END VIDEO CLIP)

VELSHI: Part of that is the name, Cakelove.

Coming up next on IN THE MONEY, we're naming names. Names of stocks that you can ride into retirement. Stay with us.

(COMMERCIAL BREAK)

VELSHI: These are just 10 of the 40 names on "Fortunes" stocks to retire on list. It is one of the most popular stories this week on the CNNMONEY.com Web site and as always managing editor Allen Wastler has this weeks stories to click.

KIERNAN: Allen good to see you.

ALLEN WASTLER, MANAGING EDITOR, CNNMONEY.COM: Good to see you gentlemen. That was one, OK. Everybody is hot after stocks. If you want to see all 40, go to the Web site. What else was really hoot was interest rate fears. Had a lot of people clicking on the site on stories of rising mortgage rates and the end of the era of cheap money. It's gone. People were piling in trying to see what's going on.

VELSHI: Did you see the 30-year fixed mortgage?

WASTLER: Up over 5 percent. The 30-year mortgage is up over 6 at 6.7 percent. All of that because of the Treasury Bonds. They popped up. Especially popular but that's a panicky one. There's another fun one. I hate to do this because it's a free commercial for Steve Jobs and Apple. It's hype. It's lots and lots of hype, OK.

KIERNAN: Say your thing and then we'll get into it.

WASTLER: You may have heard there's this thing called the iPhone coming out June 29th.

VELSHI: Woo!

WASTLER: It's going to be hot. Any time we put up an iPhone story, they pile right into it. But there's a potential worm in the Apple. There's already some backlash about the lack of physical keyboard buttons on the iPhone because everybody -- you like to sense that click. Some people are saying that might be the thing that doesn't make the iPhone the big hit the iPod was.

VELSHI: Like people used to a Palm or a Blackberry or something where you have buttons, like this. Buttons like this, which you press. So you click it and you have the sense that you pressed a button. On the iPhone it's a virtual keyboard.

KIERNAN: You have to get a feel for where they are.

VELSHI: The idea is you might not know you pressed the "a" because you didn't feel it. One I've been looking at on eBay, the web sites for sale that have the term iPhone in them. I-phones for sale, iPhones forever, iPhones are us. I'm changing my I-Velshi.

WASTLER: Also here is another rule or wrinkle that they are getting ready for some telecom wars because of this. AT&T has the exclusive rights to the iPhone.

VELSHI: You want an iPhone, you have to sign up with AT&T.

WASTLER: They're figuring a lot of people are going to dump whatever contract they have and just pile into AT&T and give AT&T a nice little boost. So, you know --

VELSHI: You know, this thing happens on June 29th, right?

KIERNAN: I was watching, getting ready to watch the 11:00 news last night and the iPhone commercial came on. I was so pathetic, I took my DVR and rewound it so I could watch the commercial again because I wanted to see what the screens look like.

WASTLER: Oh!

KIERNAN: Because they're not --

VELSHI: This goes also the guy who brought a light fixture on the set.

KIERNAN: The whole marketing spin here is that they're not letting -- there are two of them, I think, the last I heard.

VELSHI: Did you try - I tried to get an advanced sort of version to try out. WASTLER: Did you do the usual journalist thing; we need to have one to look at.

VELSHI: We might get a grubby used one next week after somebody called a tech journalist has played with it.

WASTLER: Want to see it, here it is, psych.

VELSHI: You may not be pleased to hear this, but on the morning of the release of this, I'm planning to be at the Apple store talking to the --

WASTLER: With the huge lines of people and all the Apple faithful --

VELSHI: Do you feel like in the news business whether he we cover things like that maybe we're contributing to the hype?

KIERNAN: Was it Windows 95 everybody was midnight at the electronics stores?

VELSHI: Now it's the video games. The video game releases Halo or the Wii players. Maybe it is us.

WASTLER: We're hypers.

VELSHI: All right, Allen.

WASTLER: Take care, guys.

VELSHI: All right. Coming up next, one kind of suit that no cleaner wants to handle. We'll tell you about the judge who took his dry cleaner to court. Stay with us.

(COMMERCIAL BREAK)

VELSHI: Christine is off this week. Pat has been kind enough to fill in for us. You're a veteran of morning news. How long you been on morning news?

KIERNAN: Ten years on this stint of getting up at 3:00.

VELSHI: And I just started that about ten months ago. I've got to tell you, you've got a system down. I don't entirely. It's played havoc with my system. In particular, I stopped -- I don't go today gym anymore?

KIERNAN: You don't make time for it.

VELSHI: I've not able to make time. The other day I'm traveling, I'm in a hotel room and I'm watching an infomercial, as I tend to do. I saw something and I brought it. I brought it with me and I want to show it to you. I ordered it. It's a several CD set called Hip-Hop Abs. Sean-T is the artist on this one. Apparently designed so you can do stuff at home without -- it's Hip-Hop.

KIERNAN: Let me look at that.

VELSHI: I think we can actually check a little of this out.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: There we go. We're going to groove here. Now, put your hand up like that he this.

(END VIDEO CLIP)

KIERNAN: Is that you there?

VELSHI: That's not me. That's Sean-T.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: So this is the way you can enter the dance floor. Watch how I come to you. Watch, watch, watch.

(END VIDEO CLIP)

VELSHI: You think I can do this at home?

KIERNAN: I can't picture you doing it at home more than twice.

VELSHI: It's a four CD set. He's got dance moves. I was a little bit taken. I thought to myself, I never have to leave my house and it's not that bad. Let's try a little bit. This is how I come to you. Ho-ho. It's not working out?

KIERNAN: And next week on IN THE MONEY Ali will be shirtless.

VELSHI: The good news, of course, is that I'm rarely shirtless, because I have a very good dry cleaner.

KIERNAN: But this thing in D.C. is crazy.

VELSHI: If you didn't hear the story, Kyung Lah will tell you about it first. We have this story of this man, a judge, who is, well, basically taking his dry cleaner to the cleaners.

(BEGIN VIDEO CLIP)

KYUNG LAH, CNN CORRESPONDENT (voice over): There's no shortage of opinions about the multi-million dollar pants.

UNIDENTIFIED FEMALE: He should not be suing for $65 million.

UNIDENTIFIED MALE: He's just greedy.

LAH: The lawsuit begins with part of a suit. Pants, to be exact. Roy Pearson, seen on the left here, is a Washington, D.C. administrative law judge. According to the complaint, he dropped off the pants at Custom Cleaners. Pearson claims the owners, Gin and Sue Chung, lost them and these gray pants aren't his. When he complained Pearson says the Chungs wouldn't honor their satisfaction guaranteed sign. He's alleging fraud suing for $54 million, lowered from the original $67 million complaint.

CHRISTOPHER MANNING, ATTORNEY FOR CHUNGS: This is quite possibly the most amazing example of frivolous and ridiculous litigation.

LAH: That may be but the case is set to be tried in District Court, the Chungs, on the hook for tens of thousands of dollars in legal funds so far have even started a Web campaign to help raise money to keep their business afloat. The nonprofit group American Tort Reform wants Pearson fired from his job as a judge.

SHERMAN JOYCE, AMERICAN TORT REFORM: We'd even consider raising the money to buy him a new suit.

LAH: The Chungs' attorney says they offered to settle for $12,000 but Pearson has declined the offer. Some customers say that is even outrageous.

UNIDENTIFIED MALE: I would ask them to replace the pants that are it.

LAH: Pearson has not spoken publicly. The Chungs say this two- year-old court battle has so drained their finances and ruined their credit; they're considering returning to Korea their native country. First they have to deal with this court matter here in D.C.

In Washington, I'm Kyung Lah.

(END VIDEO CLIP)

VELSHI: What do you think?

KIERNAN: There is this customer service issue, this District of Columbia consumer protection act that allows for this $2 million penalty, that is how they're adding this up to this number. But it's a pair of pants.

They have the two signs in the store, the one is satisfaction guaranteed, and the other is same-day service. The judge has said the same-day service can't be considered in the lawsuit.

VELSHI: The satisfaction guaranteed is the basis of this. I think you and I take the position there should be strong customer service and customer protection laws but I think we agree some can go too far.

KIERNAN: There needs to be accountability. But there's a line where it's gone too far.

VELSHI: Pat great to have you here, thank you so much for joining us and thanks for filling for Christine, she will be back next week. And thank you for joining us for this edition of IN THE MONEY. You can catch me every weekday morning on CNN's "American Morning" and we will see you back here next week Saturday at 1:00 and Sunday at 3:00. Have a great week.

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