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Is Your Food Safe?; How the State of the Planet Affects Your Pocketbook; What it Would Take to Put Life in the Housing Market

Aired October 13, 2007 - 13:00   ET


SUSAN ROESGEN, CNN ANCHOR: Away from civilization and back into the wild. All's well that ends well.
We're going to have "YOUR MONEY" in just a minute, but, first, a look at your top stories today.

Now, in the news, a fire inside a Los Angeles county freeway tunnel and Interstate 5 may stay closed for quite some time. A chain reaction collision set five big rig trucks on fire, 15 in all crashed into each other and there are concerns that the tunnel itself may be damaged. At least ten people were hurt.

The Bush administration is shrugging off some critical comments about the Iraq war from this former top commander retired General Ricardo Sanchez who says the war is a nightmare.

One of O.J. Simpson's co-defendants will plead guilty and testify for the prosecution. More bad news for Simpson, who said he was only trying to collect some of his own memorabilia.

We are going to update the top stories at the top of the hour, but right now stay tuned for YOUR MONEY.

CHRISTINE ROMANS, CNN HOST: OK, welcome to YOUR MONEY, where we look at how the news of the week affects your wallet. I'm Christine Romans. Ali is off today but I'm very pleased my colleague Bill Tucker from "LOU DOBBS TONIGHT" is here for him.

LOU TUCKER, CNN HOST: Thank you very much, Christine.

Coming up on today's program, see if the food you're buying is as safe as you think it is.

ROMANS: Plus, how the state of the planet affects the state of your pocketbook.

TUCKER: And we will take a look at what it would take to put some life back into the housing market.

ROMANS: But first, does this sound familiar? One party is preaching calm while the other seems to feel the government needs to expand its reach to protect citizens from catastrophe. Guess what, we're not talking about terrorism, we're talking about the economy.

TUCKER: Republicans spent the week dismissing recession fears and playing out the overall strength of the economy. Meanwhile, in the Democratic trunk they've been focusing on American insecurities with regards to healthcare, housing and college costs.

ROMANS: So to find out if the economy has become the new politics of fear or insecurity in the 2008 presidential election. We turn now to Karen Tumulty national political correspondent at "Time." Karen, thanks for joining us. Welcome to the program.


ROMANS: I'm great, thanks for being here. Let's talk about the economy, the Republican frontrunners seem to think that it's great and the Democrats are talking more and more about the middle class and some of the financial insecurities. Who's right or does it matter?

TUMULTY: Well, at this point what's significant in a political sense is that they're each talking to a primary election audience and not a general election audience. And on the Democratic side, the candidates are really talking to the economic insecurity of the Democratic base. That's why there is not a single credible Democratic candidate out there who doesn't have a completely developed health care plan. This is the subject we hadn't heard anything about since 1994, among these Democrats.

And on the Republican side, the Republican base is very, very concerned about the party's record on fiscal discipline and this idea that somehow President Bush and the Republican Congress really squandered that. So, what they are arguing over is, you know, who's the greater tax and spender and who would really get through a line item veto and they're arguing less about, with the exception of Mike Huckabee, less about the basic pocketbook insecurities that Americans are feeling right now.

TUCKER: Well I was going to say, Karen, my father who was a rock bed Republican and has given up on the Republican party because he said they abandoned their credentials and it is fascinating to me that the Huckabees and the guys who are running lower down on the Republican side of the primary season, they're the ones who are talking about the same insecurities, the same uncertainties in the economy.

TUMULTY: That's right. You know, it's really become a matter of survival for the Republican Party. A lot of its leaders believe to distance themselves from this record of this Congress and this president when it comes to fiscal responsibility. And, so, while you see Rudy Giuliani and Mitt Romney on stage going after each other on these issues, in fact, what they're doing more subtly is saying, we're not going to be like these Republicans you've seen for the last eight years.

ROMANS: Is this the way we keep hearing the echo of the Ronald Reagan name in so many different places or the comparisons to Ronald Reagan?

TUMULTY: Absolutely. Although, of course, Ronald Reagan's fiscal record was not so great either. However, what he stood for in the minds of a lot of Republicans was a smaller government, more fiscal discipline.

TUCKER: But the phrase that keeps coming to my mind lately is that are we going to have another repeat of, it's the economy stupid.

TUMULTY: You know I think as we move out of this primary season and to the general election season and that is going to be a lot earlier this time around thanks to the fact that the both parties may well have their nominees by the second weekend in February. I think at that point we do get into more discussion of basic economic insecurity. Is it going to overshadow the Iraq war? Probably not. But those issues run a very close second and third, are health care and jobs.

ROMANS: Let me ask you about the Democrats and differentiating each other with their health care and their different plans. You know, Hillary Clinton I think last week was talking about some kind of an individual retirement account for all Americans to be paid for somehow with the state taxes. Tell me a little bit about whether they have to really differentiate each other from one another to get the vote that they're going for.

TUMULTY: You know, I think they do. And, in fact, probably Hillary Clinton's most remarkable; I think faux pas in what has been an extraordinarily disciplined campaign was when she floated this idea that it's being called baby bonds. Essentially, you would get a check at birth from the government. I mean, this was kind of almost the classic, you know. I think that the kind of almost welfare state that the Democrats have been trying to move away from.

Now, she says, of course, well, I have a lot of ideas and, you know, this was not necessarily a policy position. But you are seeing some pretty expensive ideas being floated dealing with not just health care, but helping you pay for college, helping you pay for a home and helping you pay for retirement.

TUCKER: So many candidates and so many ideas. Good thing we had a lot of time to try to figure that out over the political season as we progress. Karen Tulmuty at "Time." Thank you very much.

ROMANS: Thanks Karen.

Up next on YOUR MONEY why the system that is designed to ensure you're buying safe food maybe isn't as sharp as it could be.


ROMANS: This week brought new concerns about food safety as more products were yanked off store shelves. Among them, chicken and turkey pot pies made by Congara under both its Banquet brand and some generic labels. Although the company didn't issue a recall per se it did ask stores to take those pot pies out of circulation following another salmonella outbreak.

TUCKER: That in a week when the sub-committees met the Consumer Food Safety and Standards for Imports. With a look at whether the food you're buying is being checked out closely enough we're joined by Jean Kinsey she is the co-director of the Food Industries Center at the University of Minnesota. Welcome, thanks, Jean.


TUCKER: One of the issues that came up this week and has been running for quite some time, Jean, is the question of country of origin labeling. A lot of critics of food safety have been saying we need to know where our food comes from. I understand, you don't think it's necessary and maybe think it's a bad idea.

KINSEY: Well, I think that country of origin labeling works well for individual products like a banana or an apple, or a mango where the product is virtually the same all the way through the supply chain, but for most of our foods that are processed in any way, we use ingredients that come from two, three, maybe ten different countries. So, it's impossible to have a true informative country of origin labeling. I think it would give consumers a false sense of security to have country of origin labeling. And add a lot of clust.

ROMANS: Jean, let's talk about that because some consumers do want to know, especially for the processed food. I don't think that they realize, for example, in a Nutrigrain Bar, Kellogg's tells us that there are at least seven countries besides the United States where they're sourcing for the Nutrigrain Bar. The more processed the food, the more thousands and thousands of miles these ingredients have traveled. There are some people who want to know that, frankly.

KINSEY: That may be true, but it would add a lot of cost to the product to be able to trace all of those ingredients and, for another thing, those ingredients aren't always from the same country. They might be from one country one part of the season and another country another part of the season so that having that information is really not going to help.

ROMANS: I realize pet food is different, but in the pet food scandal wheat gluten took them weeks to figure out where it came from and how it was sourced and how it came from one place in China and purchased through a broker in Las Vegas and then it was actually manufactured in Canada and then sent to the United States. That, they say, is an example of where we should know where these things are coming from. Even though it might cost more and it is complicated. Maybe for food safety, it's important.

KINSEY: Well, what we're talking about is a trade off between the risk of a food being unsafe and the cost of that food. And if we're willing to spend enough money, we can probably have all of that information; however, I'm not convinced consumers are going to increase the cost of their food that much.

TUCKER: Jean, that begs the question, what are we talking about in terms of cost? Give us an idea what trade off is exactly.

KINSEY: Well, I'm not; I can't give you an actual cost. My rough estimate might be increase cost the food of 5 percent, maybe 10 percent to have all that information all the time.

ROMANS: It is the law though; I mean the country of origin labeling is the law. You know Congress passed it, listen we represent the people of the United States of America and we want people to know where their food comes from. It has been pushed off over and over again. This is something that is supposed to start happening next year.

Let me switch gears and ask you about the recent recalls. Salmonella in the pot pies, we had a big huge hamburger recall. Is our food safe? Are these outlying incidents?

KINSEY: For the most part, these are outlying incident. You know, we've had -- we prided ourselves on having one of the safest food supplies in the world in the United States. Recently, basically within the last year, we had lot of high-profile food borne illness incidents and they seem to be happening with greater frequency, at least that's our impression. What we're not sure of is whether this is more media attention and more information about them. Or whether they're really are a greater number of incidents.

TUCKER: Jean thank you very much, Jean Kinsey, the co director of the Food Industry Center at the University of Minnesota.

ROMANS: And Lout I just want to point out 76,000 people a year sickened by food borne illness and 5,000 people a year die from food borne illness and 15 percent in our record amount of our food is imported. So bottom line here is that food safety is something that is definitely in the headlines and something the FDA and the White House have been talking about. Trying to figure out how to as one analyst told me yesterday, how to take something that is a space age globalized food system with horse and buggy inspection technology and horse and buggy technology and trying to make it something that works for everybody.

OK, coming up after the break, our changing climate and how it's changing the way you spend your money.


ROMANS: Hot, dry weather has caused severe droughts in southern California, parts of Arizona, Nevada, Idaho and Montana.

TUCKER: But the southeast states seem to be getting hit the hardest, as some cities and towns face the possibility of actually running out of water. Susan Candiotti has the story.


SUSAN CANDIOTTI, CNN CORRESPONDENT (voice over): Bob and Melanie Bluett used to take pride in caring for their lawn, but their priorities have changed.

MELANIE BLUETT, GEORGIA HOMEOWNER: If there's no water to drink, that's where your priority is.

CANDIOTTI: Sixty one counties in Georgia are under restrictions for water use due to severe drought conditions. Many face the possibility of completely running out of drinking water. The Bluett's are doing their part to conserve.

M. BLUETT: While it's warming up, you can catch all of that water and if I catch the water in those little litter pans I pour it into there.

CANDIOTTI: And later in to her thirsty plants. But that is not all.

BOB BLUETT, GEORGIA HOMEOWNER: I don't know if there is a rule, but go two times before you flush.

JEFF KILLIP, JEFFERSON PUBLIC WORDS DIRECTOR: The water level is to right about here.

CANDIOTTI: Jeff Killip's is the public works director for the city of Jefferson, Georgia. He says the situation is so severe in their city that water is being piped in from other areas and that translates to a temporary hike in water bills.

KILLIP: A regular residence their bill if they use the same quality of water will increase 150 percent. We're hoping with good conservation techniques and observations their water bill shouldn't even change at all.


CANDIOTTI: Sydney Roberts is a program manager for South Face, an organization dedicated to promoting sustainable homes and communities. She says there are many low-cost conservation solutions for your home. The first place to check is outside, 50 to 60 percent of the water being used by a typical homeowner is outdoors. A rain barrel is one way to catch and store water for your lawn and plants. Another large water user, toilet flushing. So, make sure it's not leaking.

ROBERTS: A cheap way to check that is to put a couple drops of food coloring in the tank of the toilet and walk away for a couple hours and see if any of the food coloring has gone through into the bowl. If it has, then you have a leak.

CANDIOTTI: You can also turn off the tap while washing your hands, brushing your teeth and shaving. Methods the Bluett's hope will also provide some conservation in the wallet.

How much money do you think sir that you might save by taking these steps?

B. BLUETT: Well, compared to last month when you're watering, we'll probably save at least $100.

CANDIOTTI: Susan Candiotti, CNN, Atlanta.


ROMANS: Wow, you know that is going to cause some people to really have to, beautiful lawn, washing the car, sometimes you have to sacrifice for the good of the community.

TUCKER: You do, but, you know what, people are not always happy doing that. I lived in California during the middle of an extended drought there and people were outraged hat they were rationing car washing and watering of lawns.

ROMANS: It is tough in some of these places.

TUCKER: Now officials in Atlanta say the city does have enough water stored to last for maybe two or three more months. Meteorologists are calling this dry spell one of the worst in the region's history.

ROMANS: You know with the extreme weather raising questions about climate change, too, we're going to look at how these extremes could affect your spending. For that we're joined by Janet Pierce, she is a senior research fellow in economics program at the Pew Center on global climate change. Janet Peace, sorry about that. Thanks Janet, how are you?


ROMANS: Let's talk a little bit about these particular incidents here, the southeast as Susan just reported, just really dry and parts of the southwest, as well. What is this going to mean for the people who live there in terms of the prices of the things that they're paying and the utilities. Will it affect their pocketbooks?

PEACE: Well, I think they're very likely and I think all of us are likely to see a rise in the cost of food. You know, this drought is impacting crops. It's impacting fruits, vegetables, of course. It's also impacting hay and, you know that's what you feed your cattle. I think we can also expect to see a rise in the price of meat.

ROMANS: Not just for the people who are in these areas that are affected. Their own homes and their own pocketbooks, but the rest of us could feel the impacts from this, as well.

PEACE: Oh, I think, absolutely. We have pretty much a national and global market for many of our food items and I think you can expect to see a rise in the price of food. I seen estimates that we already in the first, the second quarter of this year we saw, you know, food prices rise by about 5 percent.

TUCKER: Janet, you mention the global impact, as well. Could you talk about that? You're mentioning the impact in the United States, but does this extend beyond our borders?

PEACE: Well, it definitely does. And Australia, for example, has been under a really severe drought for the last six years. And it's really devastated their wheat crop and Australia is a major exporter of wheat. And just to give you an example, the reduction in the quantity of wheat from Australia has pushed up, constricted the supply availability around the world and pushed up the price of wheat.

ROMANS: We saw Al Gore get the Nobel Peace Prize on Friday for his work on global warming. Is there any way to sort of throw it open to the bigger picture of global warming and what we here at CNN have been talking about the planet in peril between what we're seeing on a localized basis here and the overall picture. Can you draw that link for us? Is there a link to be drawn?

PEACE: Well you know that's really a hard question and I think it's very difficult it say with precision that the drought in the southeast, the drought in Australia are directly linked to climate change, but I think there's no doubt that from all the climate models, they're all telling us that this is the kind of thing that we could expect to see more of in the future.

TUCKER: You know, I'm reminded of the phrase by Joan that she wrote a number of years ago, which was the politics of California is the politics of water. What you're talking here is that we're now looking at a national political issue, is that how you see it, Janet?

PEACE: Well, you know, I grew up out west. It's very dry area. And used to seeing, you know shortages of water and there's a cost of having a shortage. You actually reduce the dilution effect of your irrigation and you reduce the dilution effect of your streams and there are health impacts associated with drier climates. You know, we see more, longer allergy seasons. It really is a national issue and the longer we wait to really do something about it, the more expensive it will be.

ROMANS: Certainly is a huge discussion. It actually gets to be a political discussion, too, when you start talking about global warming. But Janet Peace, senior economist at the Center for Global Climate Change, thank you.

TUCKER: Coming up, the author of irrational exuberance on whether the housing market is going to look exuberant any time soon.

And later, selling versus renting. If you've got a home on your hands, you may want to consider it.


ROESGEN: And here are the top stories in the news this hour. Senator Ted Kennedy is at home and on the mend. He is recovering from surgery to remove blockage from an artery on Friday. A spokesman says the Massachusetts senator will be back at work in a few days.

Secretary of State Condoleezza Rice is in Moscow meeting with human rights activists. She's warning that the Kremlin has too much power under President Vladimir Putin. She says it could undermine Russia's commitment to democracy.

Outrage in Florida after seven former boot camp guards and a nurse were acquitted in the death of a 14-year-old black boy. An all- white jury took just 90 minutes to deliver the verdict. The justice department is now looking into possible civil rights violations.

Coming up at the top of the hour, a former American commander in Iraq, the top commander now calls the war a nightmare. That's coming up in 30 minutes. Now back to YOUR MONEY.

ROMANS: All right, Tucker, how long have you been at your house?

TUCKER: Six years.

ROMANS: Six years, and so it is not a big event for you, this is not an investment, well, kind of.

TUCKER: It's a college fund, but you know.

ROMANS: You will live in this house for a while.

Patience is a virtue, when it comes to decisions about money. You better have an awful lot of patience if you're planning to sell your house.

TUCKER: You should, indeed, more and more people are finding that they're putting their house on and it is taking longer to unload them and once the sale goes through, the home owners are getting less cash and that has a lot of people panicked.

ROMANS: Robert Shiller joins us now, he is a professor of economics at Yale University and chief economist at Macro Market, and he is going to tell us how we are supposed to navigate this housing market right now. There's a ten-month supply of existing homes on the market. What does that mean?

ROBERT SHILLER, YALE UNIVERSITY: Well, traditionally that is that we're in for a period of slow decline and that's what the numbers seem to be showing at this time and it may continue for a substantial time.

ROMANS: We're talking about price declines, are we talking about --

SHILLER: Price declines.

ROMANS: Price declines are coming. Your biggest assets are probably going to be worth less and it is going to take longer to sell it. How long could this last, do you think? Is it even possible to forecast?

SHILLER: It's hard to forecast and there are some mixed signals coming out. But in the last housing downturn, according to our S&P K. Shiller 10 City Index it took 4 1/2 years before home prices started turning up again.

TUCKER: This is a little bit of a reality check, isn't it Robert, in a way, that a house is somewhere you live, not an investment vehicle, not something that you flip, which is what people began to look at their house as.

SHILLER: People have really changed their thinking about housing in recent years and many people, I know because I've been chip case my colleague and I have been doing surveys on home buyers and many of them have extravagant expectations. They don't just think it's a home it's a way to get rich. That's part of what is fuelling the boom in the past years, in the 2000's because people think it is going to do so well.

TUCKER: Bottom line is this is a cycle and I can't help but be reminded of the Internet boom and bust in the '90s where everybody forgot Robert that what goes up oftentimes does in fact come down. It's just a natural part of the economics of things.

SHILLER: Well I think it is the natural part of a boom psychology. So in the '90s we got this idea that we ought to get rich by finding some investment that does really well, when the stock market disappointed us we thought, hey, it has to be something else. Maybe its housing and we just continued right along with the same kind of enthusiasm for the housing market.

ROMANS: I don't feel bad Robert for those people putting no money down and getting interest only loans and were flipping condos in hot markets and making a fortune. I don't feel bad for them, really, that this market has cooled off, maybe as Bill says, the way it should. But I do feel bad for people who have found themselves in an adjustable rate mortgage in a house that is maybe too big for them with college tuition bills coming up and as we reported earlier with a higher heating oil bill this summer or this winter and maybe wages that aren't going up. That is going to hurt some people, isn't it?

SHILLER: Yes, I think a lot of people go to a mortgage lender thinking that the mortgage lender will tell them whether they're suitable for this mortgage and they trust this person. You know, especially lower-income people with maybe they don't know much about the mortgage market. And, you know, some of these lenders were not really forthcoming. A lot of people didn't even realize that their mortgage payment was going to reset to a higher value in the future.

ROMANS: So Robert, you know bottom line for us, wrap it up for me. I want to sell a home right now, under what conditions should I do that? I want to buy a home right now, what can I expect? Just in general.

SHILLER: Well I think that we have a substantial chance of home price decline. So that means if you are going to buy a house because you really want it, OK, go ahead. But if you're in the margin and you can't make up your mind, you might wait a while. If you're selling a house, you know, maybe you should take a lower price, get it over with and not just hang on there forever.

ROMANS: All right. Robert Shiller, thank you so much for joining us today with your wisdom and advice. Thank you, sir.

TUCKER: Well you know some desperate sellers are choosing to rent out their places, Christine, rather than take a financial hit.

ROMANS: That's right. Ines Ferre joins us from CNN Espanol, she joins us with more, I actually know somebody that this is happening to. A friend of mine in Chicago getting married. He's got a condo, she has a condo they bought their dream house and now they have three mortgages. Two rents coming in -- but, apparently, it is not really that unusual. People are saying, look, I will not take these prices or they're not finding a buyer and so they're renting.

INES FERRE, CNN CORRESPONDENT: Right, exactly. It is not that unusual. I have spoken to a lot of people in Florida and in Connecticut and in the tri-state area in Nevada. With so many homes up for sale, more and more homeowners are opting to rent. Maybe that they can't sell their property and they want to get some type of money flowing in to pay for the mortgage and the taxes. Some feel they don't want to sell it for less than what they think its worth. And they want to, you know, keep it until the market gets better maybe betting that in a couple years it will.

Let me give you an example. We'll show you a house here. It is a three bedroom in Vegas in a gated community. The seller put it up for sale and she was hoping to get $345,000 for it. But when she realized she wasn't going to get that kind of money and she decided to rent. Listen to this.


LEANNE LINSKY, HOMEOWNER: When other people in the neighborhood put their homes up, they're putting it up for considerably less, you know, $20,000, $30,000 less and it was still sitting, their homes are still sitting on the market for more than 60 days, which isn't so bad, but when you consider what the market was where a home on the market for one day was selling then it makes a huge difference.

ANTONIO DEL ROSARIO, MANAGING DIRECTOR, BARAK REALTY: It is not a good time to sell. Hang on to it, rent it out. If you can. If you can get positive cash flow or even break even.


FERRE: That's really the key. Will renting it cover your mortgage and other costs? Is it the best option for you?

TUCKER: But there is also, the uncomfortable idea that someone needs to discuss. If you own the home and I know because I was in this position with a condominium. Do you want to become a landlord? I never wanted to become a landlord and I ended up in a position where I couldn't sell it, I couldn't even sell it for the mortgage and we became unwilling landlords.

FERRE: That is the thing that is the number one issue is being a landlord is really no fun. I mean, my father was with a couple of properties and he would get phone calls there is a leak, we need to fix this and that and, so, you really have to be willing to do that. But a lot of people, you know, they don't want to, they don't want to sell it for less than what they think it's worth. They don't want to sell it for a price that they could have gotten one year or two years ago.

ROMANS: The other side of that, you're renting it out, your renting it out and you are barely covering your expenses and if Robert Shiller is right you have prices going down for the next four years. When you sell it in four years, you could get less than you could get now. FERRE: That is the thing, is they're betting that the market is going to get better in a couple years and that seller that we showed you, actually, she is renting it for $1,700 a month and she's breaking even. She is hoping in a couple years she'll get the price she wants.

TUCKER: Just a quick note. The upside of that is if you hold that property for long enough and you rent it long enough, you can do something, and you can't do it if you sell it at a loss. If you're a landlord, you get to realize a capital loss. That that can be helpful.

ROMANS: You get to take the late-night phone calls.

TUCKER: My washing machine broke.

ROMANS: I know. I lost the garage door opener. Thank you so much.

TUCKER: Well, up next on YOUR MONEY, black belt techniques for bargaining to get just about anything.


ROMANS: If you're like me, there's a price tag on something and you just pay that price tag. Have you negotiated or bargained for something? I guess outside of a car.

TUCKER: No, I have. Matter of fact, but it's rare. I'm typically the kind of guy who walks in a store and it says $12.50 I say it costs $12.50.

ROMANS: I'm that way, too, but a lot of people bargain for everything. A recent consumer report survey of more than 2,000 people found that bargaining the price of everything from furniture to electronics, even medical bills really is much more common than any of us ever thought.

TUCKER: Medical bills?

ROMANS: Medical bills.

TUCKER: Our next guest will tell us when and how to bargain effectively. Todd Marks is the senior editor with "Consumer Reports" and Todd, thank you, welcome.


TUCKER: Give me some advice because I am typically, I have done some bargaining in my life, but for the most part, Todd, if it says that price, that's what it has to be.

MARKS: Well you know what, I thought it was that for a lot of years, too. But this result of this unique survey that we did here really shows that it pays to haggle. We asked people, do you bother to haggle if you did, what is your success rate? How much did you save? We found out that people generally haggled for almost everything, medical bills, furniture, appliances, home electronics, jewelry, collectibles, bank credit card fees and most of the people who try to do that actually saved and won.

Matter of fact, this percentage was over 90 percent for many of the things that people bargained for and oftentimes they save $50, $100 or more. Nothing was out of bound.

ROMANS: I do, I have bargained on credit card fees now that you mentioned it. I was outraged at a $49 fee that I didn't think I deserved and I called in, but I was very nice and I said this usually doesn't happen and I promise I'll be good and does how you haggle or how you address the person, is that going to influence your success rate?

MARKS: Absolutely critical because most people don't haggle because they're either embarrassed to be told no or they feel they're not entitled, but all it takes is the right approach and a bit of nerve. Think of it like when you're going and you want to ask somebody out on a date but you don't bother to do it because you're afraid of being rejected. It's the same thing here.

If you take that right approach, you can be wildly successful. First thing I always tell people is, don't demand anything. Be empathetic, be polite. Go up to the person and say I saw this at another store and say, can you work with me on it? If you see a product that is perhaps slightly blemished, there is a minor flaw in it, maybe a missing button or the zipper is broken or something is on a clearance rack and you say I know this stuff has been here for a while and I'll be willing to take it off your hands, if you can give me maybe an extra 10 percent or you offer to pay cash.

Do you know when you use your credit card merchants charge these retailers anywhere from 2 to as much as 8 percent per transaction fee just to use the card? Ask if you can have the money that they would normally pay to the credit card company as a discount. There's a lot of different tactics you can use.

TUCKER: You know, that is absolutely fascinating, first of all, but there are things on here, furniture products, I understand. Todd, that's not foreign to me. But the notion of negotiating your medical bills is fascinating to me. How do you do that?

MARKS: A lot of people in this country are uninsured or underinsured or perhaps they're particular health insurance policy doesn't pay the full freight of what a procedure costs. What I would urge people to do and what people are very successful at doing is approaching the doctor, not the office manager. You've got to deal with the decision maker. That's the guy or the gal in the lab coat. And you say, listen, my insurance company will only cover x amount of dollars and the rest is going to come out of pocket. Would you possibly be willing to take the negotiated amount that the insurance company would pay you for this service?

I have been successful at and I know many others that have. If your approach is kind and considerate and empathetic and with your tale between your legs a little bit, you might be successful, 90 percent of those who sought a lower medical bill got one in our survey. ROMANS: Well bottom line too if you tell them, listen, I'm in dire straits here and you'll get a little bit from me or none from me. It might make the difference between their insurance headache or their payment headache, as well.

MARKS: Right, except I wouldn't go for the jugular and demand a discount. You know the old expression you catch more flies with honey than you do with vinegar, it works in this area, too.

ROMANS: They do have the upper hand. Diamonds are a little different, aren't they, Todd, than medical bills.

MARKS: They are, but, again, everything is negotiable.

ROMANS: All right. Todd Marks, "Consumer Reports," thank you so much. Fascinating. Thanks Todd.

Coming up next on YOUR MONEY, a prediction about your home heating bills for this winter.

And some of the week's other top stories.


ROMANS: Jennifer Westhoven is here with some happy, cheerful news today. Things that happened in the business world this week that are going to make you richer and happier.

JENNIFER WESTHOVEN, CNN CORRESPONDENT: Some tough news. Don't shoot the messenger. The first story we'll talk about is for this winter, no matter how you heat your house, it is probably going to cost you more. In fact, it will cost you $88 more taking the average bill up to $977, says the Department of Energy.

Get this; many of us will do better than that because most of us Americans use natural gas or electricity and lucky thing, because that bill is between $850 and $900. It is people who heat with oil who are getting stuck. Now look at that bill. Almost $1,800 and they're paying 20 percent more this year. Most people who heat with oil live in the northeast and that's skewing all these average numbers higher.

TUCKER: I have to ask you who are these people because my heating bills are much higher than this and I don't have a big, giant home and I'm looking at $997 and I think if I could get by with that this winter, I would be doing great.

ROMANS: You live in the northeast.

TUCKER: Oh I do don't I?

WESTHOVEN: They're predicting a colder winter, as well.

TUCKER: That's not good.

WESTHOVEN: Maybe if it is not colder --

ROMANS: The good news is that wages and everything and benefits are up so they'll cover that number.

TUCKER: Wait a minute.

ROMANS: Tainted toys, tainted pet food, and tainted fish, tainted this, and tainted that, tainted lipstick.

WESTHOVEN: Lipstick.

ROMANS: Sure. Tainted lipstick.

TUCKER: Why not?

WESTHOVEN: This is stunning. This is not a recall, by the way. But this is a study that's out recently that says they have found lead in certain brand of lipstick and they are some popular brands that we're talking about here. Not just the drugstore brand like L'Oreal we're talking about Christian Dior, that's an expensive brand.

The study looked at many brand name red lipsticks and found that more than half of them contained lead. These are things that we all have in our purse right now or medicine cabinet. So it is something to look out for. One thing that came up here, the companies have said, hey, these are just trace levels of lead.

ROMANS: That doesn't make me feel any better.

TUCKER: You know all I can think of is eight pounds. That's the phrase that's in my head. Eight pounds. That's how much lipstick an average woman consumes in the course of a year. Eight pounds is not trace.

ROMANS: Wow, that's incredible. Now, I guess if you're a pregnant woman or nursing, this is when you're not supposed to have trace amounts of lead on your lips.

WESTHOVEN: Companies also say well look it's not like candy, you don't eat the whole lipstick thing, but you're making a great point that is a lot of lead. The other lipsticks don't use lead at all.

ROMANS: Let's talk about how you get rid of these lead-tainted things. This is the big scandal. Millions of individual toys have been recalled. You know, even another recall on Friday of a bunch of Winnie the Pooh characters from J.C. Penny. What do you do with this stuff?

WESTHOVEN: Well I would love to be able to say to you, hey just take it and call the company, but a lot of times it is very difficult to know exactly what to do. It's very murky, the laws aren't always clear on this. You can't just put this out on the curb because if you do, it could end up in your local land fill which means it could end up in your soil and back in the water supply underneath. This is a big problem. Even if we give them back to the manufacturers, what do they do with them?

The Consumer Product Safety Commission says you should return the toys to the company that's recalling them. I will just say, I looked up Mattel, the most well-known recall, went on their Web site to try and find information and I couldn't find it. It might be in there, but it wasn't easy to find.

ROMANS: What to do with your toys that need to be recalled. Some people have said that a lot of people don't return these toys, they just throw them in the garbage and I'm pretty sure that's not good for the environment if they're tainted with lead.

TUCKER: I don't return the toys but that's because my kids are grown up and I have boxes of toys, well, I think might have been recalled, that sit in my basement and I honestly don't know if they are part of the recall or not.

WESTHOVEN: You might want to put a note on them, because apparently a lot of them are turning up at thrift stores.

ROMANS: And eBay, eBay just last week issued some new guidelines about you how people shouldn't sell these things.

Now there is another news headline that we haven't mentioned, very important, I would say this is the biggest news of the week, of the year, of Jennifer's life, our good friend Jennifer Westhoven is getting married! To wonderful guy named Joe.

WESTHOVEN: He is a wonderful guy.

ROMANS: We're so proud of you. We're so happy for you. We're playing "Here Comes the Bride" and our good friend Pete is bringing you a wedding cake in the beautiful fall colors of the beautiful fall wedding.

WESTHOVEN: Thank you so much. I still have to fit in my dress, though.

ROMANS: Too late now, just go for it. Jennifer Westhoven we're so happy for you and so proud of your lovely fiance, Joe, and wish you all the best from all of us here.

TUCKER: Congratulations, Jen.

ROMANS: So she's getting married, after you get married and you spend your whole life working and being happy, and then you retire. What would you do if you retired today? Relax? Not necessarily.

TUCKER: In fact, in this week's "Life after Work," Ali Velshi meant a former investment banker who quit climbing the corporate ladder which turned out to be a much more strenuous challenge.


ALI VELSHI, CNN CORRESPONDENT (voice over): It is a sunny day in San Francisco and Allison Levine is heading to the beach, but not to work on her tan.

ALISON LEVINE, FOUNDER, DAREDEVIL STRATEGIES: I'm down here at Ocean beach training for a six to eight-week expedition to Antarctica that I leave for at the end of November. What I'm going to be doing is crossing the continent from the ice shelf to the South Pole. It's about 550 miles of Antarctic ice and it is the coldest, windiest place on earth.

VELSHI: But Levine isn't a stranger to harsh environments. This former Wall Street investment banker has trekked to the North Pole and climbed the highest peaks in the world, including Mt. Everest. Still her biggest challenge is overcoming her own body's limitations. A congenital heart condition and an extreme sensitivity to cold.

LEVINE: One when I was 17 and another one when I was 30, and 18 months later to celebrate my good state of new health I wanted to do something that I wouldn't have been able to do before.

VELSHI: Levine discovered this love of climbing during a vacation to Mt. Kilimanjaro and found she was hooked. Wasn't long before she left her desk job for good and took up climbing and lecturing as a new way of life. One she says she can live by for many years to come.

LEVINE: The only way I was going to be able do the things that I enjoy doing is to be an entrepreneur and start my own business. I have two or three months that I can go out and do the things that really get me excited about waking up every day.

VELSHI: Ali Velshi, CNN.


TUCKER: Still to come on YOUR MONEY, a sneak peek at the office of the future. We have cake here on the set.

ROMANS: Congratulations, Jen.

WESTHOVEN: I'm lucky, he's crazy.


ROMANS: Is Bill Gates still the world's richest man?

TUCKER: No. Carlos Slim, the cell phone operator down in Mexico overtook Bill Gates.

ROMANS: Bill Gates feeling relatively poor. You won't believe what Bill Gates is up to this time. Ali got a sneak peek at a new program that Microsoft is hoping will change the way you work. Bill Gates one of the richest men in the world and Ali Velshi, you know, who is rich in love and kindness and education, you won't want to miss Ali's one-on-one interview with Bill Gates next week on YOUR MONEY.

OK. Thanks for joining us for this edition of YOUR MONEY. And thanks to my "Lou Dobbs Tonight" colleague Bill Tucker. We'll see you here next week Saturday at 1:00, Sunday at 3:00.

TUCKER: It was fun. Appreciate it.

ROMANS: Thanks, Bill.