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Your Money

Disaster-Proofing Your Investment Portfolio; Don't Let the Weak U.S. Dollar Stop You from Traveling in Style; Negotiating Your Salary; Economy is an Election Issue

Aired November 10, 2007 - 13:00   ET

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

FREDRICKA WHITFIELD, CNN ANCHOR: And a claimed author Norman Mailer died today at the age of 84. He once famed with his very first novel "The Naked and the Dead." Based in part on his army service during World War II. He won Pulitzer Prizes for two other works as well, "The Armies of the Night" and "The Executioners Song."
And Broadway stagehands have gone on strike. The first show to be canceled was an 11:00 am matinee performance of "How the Grinch Stole Christmas." The walkout is expected to shut down most of the plays and musicals in New York's theater district.

We'll update the top stories at the bottom of the hour. Now time for YOUR MONEY.

ALI VELSHI, CNN HOST: Welcome to YOUR MONEY, where we look at how the news of the week affects your wallet. I'm Ali Velshi.

CHRISTINE ROMANS, CNN HOST: I'm Christine Romans. Coming up on today's program a guide to disaster proofing your investment portfolio.

VELSHI: Plus, why the weak U.S. dollar doesn't have to stop you from traveling in style.

ROMANS: And later some smart answers to tough questions. Inside tips on negotiating your salary, this is the time of year to do it.

VELSHI: Bad for us though, with the dollar falling, gas prices rising and the housing market continuing to slow and the stock market sinking and the economy is front and center as an election issue and that is reflected in a new CNN poll out this week.

ROMANS: The survey found that the economy is the number one issue voter's care about in the race for the White House. CNN senior political analyst Bill Schneider has more.

(BEGIN VIDEOTAPE)

BILL SCHNEIDER, CNN SENIOR POLITICAL ANALYST (voice over): Here are the issues voters now rate as the most important in their vote for president, the economy now tops the list. Just ahead of the war in Iraq.

MARK ZANDI, MOODY'S ECONOMY.COM: At the heart of our current economic problems is the evaporating housing market, the plunge in sales, construction and most importantly house prices.

SCHNEIDER: When the economy is bad, the economy is the issue that was certainly the case in 1980 when Ronald Reagan got elected and in 1992 when Bill Clinton won on the economy stupid. At the time of those two elections, only about a third of Americans said things were going well in the country.

Compare that with the last three presidential elections. In 1996, 2000 and 2004, solid majority said things were going well and this year -- it looked good in January when 57 percent of Americans thought things were going well. But that number has been dropping all year, it's now only 42 percent.

ZANDI: The job growth has slowed quite sharply over the course of the past 6, 12 months and this current rate of job growth unemployment will continue to rise.

SCHNEIDER: Right now the more important you think the economy is the more likely you are to vote Democratic. In a trial heat between the two front-runners Hillary Clinton leads Rudy Giuliani by 27 points among people who feel the economy is an extremely important issue. She is five points ahead among those who say the economy is very important.

While Giuliani leads among those who say that the economy is moderately important or not important. Democrats like to remind voters that the economy was booming in the 1990s, that wasn't a boom. Republicans say that was a bubble.

Christine, Ali.

(END VIDEOTAPE)

ROMANS: Fascinating stuff. For more on the money issues that you, the voter, care most about we're joined now by Greg Valliere.

VELSHI: He's a chief strategist at the Stanford Washington Research Group, hey Greg welcome to the show. It shouldn't be a surprise to anyone. The way the economy is going whether or not it is good or bad or hot or cold, its front and center. We can't avoid these massive moves in the Dow and oil and things like that. Does it surprise you and will it continue to be a front and center election issue?

GREG VALLIERE, STANFORD WASHINGTON RESEARCH GROUP: Well, that's the issue, isn't it, Ali. Timing is everything. It's a real problem for the Republicans now, but if I'm not mistaken the election is next November, not this November. If Bernanke is right that things get better be spring and that housing starts to recover, maybe by the fall it won't be quite as bad for Republicans, but it's not going it help them.

VELSHI: All respect to the smart folks at the Fed, they really haven't been right for several months.

VALLIERE: He sounded particularly clueless this week. He wasn't sure. Just put his finger up in the wind. They don't know what is going to happen. In an environment this toxic for the Republicans, this is still another reason why the Democrats should have a really good election.

ROMANS: Let's say what it is that Bernanke, the Fed chief said this week. He said that the Fed has its eye on the mortgage crisis, on the spike in oil prices and that growth will slow "noticeably" in the fourth quarter. None of those things are a surprise and I'm not sure how much voters are calmed by knowing the government has an eye on these things that they have more than an eye on in their family budget.

VALLIERE: I'll tell you something, Christine, the Republicans have a problem to the following extent. If it's Giuliani or Romney, I think those are the two clear front runners their economic prescriptions are pretty much the same as President Bush's. It is not like they're going to offer anything different.

VELSHI: What can they offer? Let's say someone got really smart and decided as Bill told us a few minutes ago, it's the economy, stupid. That's how they're going to run on this thing. What is the solution? I mean in many cases this is the market, energy is where it is, stocks are where they are and the housing slump, these things go in cycles. What could anybody say to possibly fix this?

VALLIERE: The Democrats will say, we'll do better than the other guy, we can't do any worse. They'll blame the other party, obviously. I think there are some things the Democrats will talk about, letting maybe Freddie and Fannie put more mortgage debt into their portfolios. That can help the mortgage market. They'll talk about several issues in terms of what you can do it stimulate the economy and I just don't see anything new coming out of a Giuliani or a Romney.

ROMANS: What can the Democrats do differently? Say people vote because they're so ticked off about the economy, do Democrats even have the ability to do anything differently or is it just out with the bums who brought us this or who we think brought us this situation?

VALLIERE: Once the Democrats get specific on proposals then those proposals become a target and, in particular, they have to worry that they'll be identified as the party that wants to raise taxes. I think everyone agrees the income gap is a real issue and needs to be addressed. If the way you address it is to just raise taxes that might not help the Democrats very much.

ROMANS: You think taxes is the story for 2009? You think this is the story we're all missing, don't you?

VALLIERE: I really do, Christine. Even if a Republican wins, he will be faced with the expiration of the Bush tax cuts. If Hillary wins, I think she'll go right away with a tax hike. I think for all your viewers there is the real possibility in 09 of a higher top rate at the top end and, more importantly, a higher capital gains rate. So if people have family-owned businesses or other assets, they might want to get rid of, I think they might want to do it in '08 with a 15 percent capital gains rate rather than '09 when it could be 20 or 25 percent.

ROMANS: You think higher taxes are coming regardless of who ends up in the White House or controlling Congress, et cetera?

VALLIERE: Sure. The Democrats will control both houses that are a no-brainer. They will say to a president Giuliani, if you don't go along with tax hikes, we'll let everything in the Bush tax cuts expire at the end of 2010. That's quite a bargaining club they'll hold over a Republican.

VELSHI: Greg, good to talk to you. Thanks so much. Greg Valliere, chief strategist at Stanford Washington Research Group.

ROMANS: All right. Up next, steps you should be taking right this very minute to protect your investment.

(COMMERCIAL BREAK)

VELSHI: Well brand-new worries about the credit mess threw Wall Street into a tail spin again last week. More than once the Dow fell more than 300 points in one session. Like the old days. News like that could make you wonder whether your money might be safer under your mattress than out playing in traffic on Wall Street.

ROMANS: You can build a portfolio to take a beating. Michael Cuggino is president and portfolio manager of the Permanent Portfolio Fund in San Francisco, which itself is designed to be pretty disaster proof. There are some of us out there watching the ebb and flow of the stock market. We're watching gold, oil, rates and listening to Chairman Bernanke talk about what is happening in the economy and thinking ...

MICHAEL CUGGINO, PERMANENT PORTFOLIO FUNDS: And we're confused.

ROMANS: Yes, we are thinking we are a little confused. What can we do at this point? Is it time to be disaster proofing your portfolio or should you always have a little disaster proofing in there?

CUGGINO: Always have disaster proofing. The money for rainy day, put that aside and be very diversified with that money to cover you against all sorts of scenarios.

VELSHI: Just to stop you. Put that aside doesn't mean put it in your mattress.

CUGGINO: Absolutely not. Invest it.

VELSHI: Put it to work.

ROMANS: With certain principals.

CUGGINO: Putting it in your mattress actually loses value due to inflation. Even though inflation has been relatively benign lately, we've seen indications it might be going up. You remember the high inflation during the 1970s and not doing anything with it makes it go down in terms of value. We heard about the decline in the U.S. dollar. VELSHI: How do you protect it and yet make some money?

CUGGINO: What we advocate is a strategy of using multiple asset classes. Most people think of investing they think of either stocks and bond and not much beyond that. We advocate an approach that uses stocks and bonds both U.S. and non-U.S. stocks and bonds, but also precious metals like gold and silver, natural resource stocks, both foreign and U.S, real estate investment trusts, corporate bonds as well as treasuries.

VELSHI: Did you say real estate?

CUGGINO: I sure did.

VELSHI: You're prepared to invest money in real estate today in America?

CUGGINO: My belief would be failure of an investor to not have real estate in a portfolio leaves a whole in their diversification strategy. I mean, there's no question that real estate is a significant part of our economy and, so, failure to have exposure to that leaves you open or leaves you a little bit more undiversified than you otherwise would be.

So yes, even like times like this one might argue that when assets decline and there is craziness everywhere that is a good time to look at areas to invest as a long-term investor.

ROMANS: Let me talk about gold and natural resources. We have been hearing these bullish calls on gold for some time and, in fact, the metal has been climbing as a safe haven, I don't know exactly all the different reasons why it's moving up. Will it continue to move up? Is it too late for somebody to get into gold now?

CUGGINO: It's moved incredibly in the last few months and so you may have some consolidation in the short term or some pull backs?

ROMANS: Is that a buying opportunity?

CUGGINO: I think in the long term it is. I think the trend will go up. To me, it's no secret that gold has gone up. The Federal Reserve has cut the federal funds rate twice. There is potential for one or more rates going forward and that's in response to the credit crises that we've seen. Whether or not that is the right decision or not, the future will tell us.

But there is no question that it's inflationary. I don't think it's any secret that we've seen oil goes up to $100 and that we've seen gold and silver go up and a decline in the value of the U.S. dollar. These things all make sense in the context of more and more dollars in the economic system chasing around the same level of goods and services and that, by definition, is inflationary.

VELSHI: Let's go back to the screen that we had up of the things you invest in. One thing about Michael that has made him successful over the years, you have been very disciplined and don't shoot in and out of things very often. When you look at the classes of things that you invest in, if somebody is watching this at home, gold, silver, Swiss franc, real estate & natural resource stocks, aggressive growth stocks, bonds and other assets. What kind of -- give me a pie chart? How much should I have in gold and silver and other currencies and things like that? How do you divide that up?

CUGGINO: It depends on a number of factors, a person's risk profile and when they should need the money and what sort of money they are going to need in terms of day-to-day life. So I mean it can be different for everybody. We can't do individualized portfolios for people that are not what we're in. We've come up with a strategy and allocation percentage that we think works in the long term in most cases and relatively disciplined about it.

VELSHI: Roughly, gold, stocks, bonds.

CUGGINO: We're at 20 percent allocation in gold.

ROMANS: You had a nice move with that, 20 percent of your mutual fund is gold; gold has had such a great run. That's been the right bet.

CUGGINO: It has definitely helped our portfolio performance this year, I mean year to date we're up around 13.5 to 14 percent.

ROMANS: The Dow I think is up 6 percent and widdling those gains as we speak last week. So outperforming the market, which is what people want to do? People are trying to outperform the market with their diversified strategies.

CUGGINO: Absolutely, I mean if you're not in it to make money, what's the use? You want to preserve capital and also provide growth. If you're not making money, why bother? We have a 20 percent allocation in gold and we have a 5 percent allocation in silver, which behaves similar to gold but it is a little bit different.

We have a 10 percent allocation to non-U.S. fixed income to provide income for an investor and that also provides a hedge against the declining U.S. dollar, that's worked for us. We have 15 percent allocation to match U.S. and foreign natural resource and commodity stocks.

Again, real estate and commodities in this environment have performed well. We also have a 15 percent allocation to U.S. growth stocks. That's just in the event that the economy really does truly grow versus the crash due to housing, which I tend to gravitate towards that view more than the we're in a free-fall situation. Then 35 percent allocation in U.S. treasuries and high-grade corporate bonds, again, to provide income to an investor and also in the event that the dollar strengthens and, you know, it's still that reserve currency of the world, which I do think it will be long term.

ROMANS: Michael Cuggino, thanks for stopping by, really appreciate the advice on how to disaster proof that portfolio. It is nice to see that the major stock market averages and indices.

VELSHI: Are still up.

ROMANS: Even after a crazy week.

VELSHI: Some are still close to not be.

Still to come, attention all parents, why this holiday shopping season could be something for you to worry about. Stay with us, we'll tell you that story when YOUR MONEY continues.

(COMMERCIAL BREAK)

VELSHI: Another popular children's toy was found to be incredibly dangerous this week. You can't make this story up. The toy is called Aqua Dots and if they're swallowed the beads in this toy metabolize into the chemical equivalent of a date rape drug.

ROMANS: its incredible two children in this country have collapsed vomiting and sinking into comas. Both have since recovered. Three children were similarly hurt in Australia where this problem was first found. You know, it's yet another recall of a toy made in China and it seriously challenges these repeated exertions by industry executives and insiders who say this will be the safest holiday shopping season ever.

(BEGIN VIDEOTAPE)

CHRIS BYRNE, TOY WISHES: This one is something we first saw, I guess last February and said, oh, my gosh, this is wild. It's easy to use, fun it play with and it's called Aqua Dots from Spinmaster.

ROMANS (voice over): With great fan fare last month "Toy Wishes" Magazine recommended a dozen must-have toys this season. Among them, the Aqua Dots toy.

BRYNE: Very excited about this one.

ROMANS: But now the magazine has taken Aqua Dots off its list because this toy is incredibly dangerous. If swallowed, it metabolizes into the chemical equivalent of the date rape drug, GHB. Now, 4.2 million Chinese-made Aqua Dots toys have been ordered off store shelves in the U.S. The Consumer Product Safety Commission says "Children who swallow the beads can become comatose, develop respiratory depression or have seizures." Industry executives have said this will be the safest holiday season ever for toys but this recall is a blow to that exertion. And a reminder of the escalating imports safety crises.

DONALD MAYS, CONSUMERS UNION: You can push manufacturing overseas but now you'll have it beef up your safety net and you have to have a system to catch unscrupulous business practices which certainly sounds like the case in Aqua Dots.

ROMANS: The problem was first discovered in Australia. Where the product named toy of the year. The manufacturer says a Chinese factory substituted a toxic chemical for a safe glue. Millions of these toys have already been sold in this country. Aqua Dots quickly climbed Wal- Mart's top-selling toy list.

(END VIDEOTAPE)

ROMANS: Incredibly this is a toy that has been on the shelves here in this country since April, 4.2 is the number of the recalled. The Consumer Product Safety Commission says get it out of your house, folks. Consumers Union says they're concerned because only a small percentage of recalled toys are actually returned to the toy stores. Toys "r" Us says they don't care where you bought it, how much you paid for it, bring it to Toys "r" Us and they'll take it back. Toys "r" Us will accept this toy. Government says get it out of your house.

VELSHI: Unbelievable story. That really is, that's a new one.

The nation's largest drug maker is about to pay out some big bucks, by the way, Merck, which makes Vioxx, will need nearly $5 billion to settle thousands of lawsuits and, of course, what was one of the largest civil lawsuits ever.

ROMANS: The settlement covers folks who suffered heart attacks and or strokes after taking that pain killer. But after all is said and done, it looks like each plaintiff, if they accept the settlement will receive just about $100,000 before legal fees and expenses.

VELSHI: There are about 27,000 individual lawsuits. It wasn't a class action suit. Still some that won't be settled by this, but that's the big development in that story.

ROMANS: Another startling fact for you here this week. A new report says veterans make up more than 25 percent of the homeless population. The national alliance to end homelessness says nearly 200,000 vets slept on the street or in a shelter on any given night last year.

VELSHI: Now, between 44 and 64,000 veterans are classified as chronically homeless, which means they will be homeless for long periods of time. Other veterans, nearly 500,000 are experiencing what the report calls severe housing cost burden, which means they pay more than half of their income for housing. And in the general population, that is just too much of your income to pay for housing. It puts you in danger of becoming --

ROMANS: Interesting, veterans make up a greater proportion of the homeless population than they do of the general population. So it shows you that there is an issue there. Some say a serious issue that needs to be addressed immediately.

Coming up after the break, traveling on the U.S. dollar in 2007, like it's still 2005.

VELSHI: Plus, when you get that new job offer, don't tell them how much money you want it earn. That's just one of the tips we have for you in negotiating your salary when YOUR MONEY comes back. Stay with us.

(COMMERCIAL BREAK) WHITFIELD: Hello, I'm Fredricka Whitfield in Atlanta. Here are the top stories in the NEWSROOM. President Bush and German Chancellor Angela Merkel mixing business with pleasure at the Crawford Ranch. Global warming, war in Iran dominating the talk.

A new twist this morning in the hunt for the wife of a Chicago area police officer. Drew Peterson is now suspected of killing his wife, Stacy. She has been missing since October 28th. Investigators also plan to dig up the body of Peterson's third wife to see exactly how she died.

And oh, so slowly the shuttle "Atlantis" creeping towards the launch pad earlier today at the Kennedy Space Center. "Atlantis" taking six hours, really closer to seven to cover just three miles. The shuttle is scheduled for launch December 6th.

And he faces a pretty tough job ahead, he's already at work. Retired federal judge Michael Mukasey is officially the nation's new attorney general. Mukasey was sworn in during a low-key ceremony at the Justice Department yesterday and got right down to business. A more formal ceremony is planned for next week. Mukasey replaces Attorney General Alberto Gonzales. He resigned in the fallout over the U.S. attorney firings.

And as is often the case, northern Minnesota is getting an early taste of winter. An inch and a half of no and it was blamed for several traffic accidents.

Coming up at the top of the hour, a long shot presidential candidate drawing big crowds today in Philadelphia. Find out why he's so popular. At 2:00 p.m. Eastern in "The Newsroom." Now back to more of YOUR MONEY.

VELSHI: The U.S. dollar took another thrashing this week with the euro hitting yet another record high against the greenback and the British pound climbed to hit its highest rate against the dollar in, I don't know how many years. It's expensive.

ROMANS: Like 26 years. I mean when you think about it, if you are going to Europe or you are going to the UK you're going to pay a lot more today than you paid two, three, four, five years ago. That European vacation got more expensive. Going on vacation even in Europe it doesn't mean you'll go broke. Doug Stallings is a senior editor at Fodor's Travel and he going to tell us why we're not going to go broke. Because I look at those numbers and I think that little three day weekend to Paris just got a whole heck of a lot more expensive.

DOUGLAS STALLINGS, FODOR'S TRAVEL: It's probably not any more. It depends on where you go. You can go to Paris and if you can find a cheap hotel and stay for a while, or even better, stay in an apartment, I think you can do better.

VELSHI: That is a good idea. But I'm curious about as the dollar continues to fall, most folks think that may continue for a while, how do you go, like other places, where can you go where the dollar isn't falling against the currency of a country where the dollar is pegged, you know, so that you're not losing out on the currency?

STALLINGS: You can go to a place like Panama. Panama has always been pretty cheap in and of itself and because the currency is the U.S. dollar and it's a good deal and there's a wide range of experiences there rain forests and beaches and luxury hotels in Panama City and even some shopping.

ROMANS: What about Central America in general. There are some good values in Central America even places that aren't pegged to the dollar.

STALLINGS: Yes, Central America is pretty cheap and I don't think it matters where you go, you will get a good value for the dollar whether it's Mexico, or Honduras or Nicaragua.

ROMANS: I wonder if there is more domestic travel by Americans saying this is the time to see the Grand Canyon because I paid 86 cents for the euro just, you said 2001, about $1.44. That's a big, big difference for the Euro and British pound and others and even the Canadian dollar.

VELSHI: No discount to go to Canada, but our makeup artist tells me she's going to Argentina for New Year's and my office colleague, Jason Carroll, who's a correspondent here, tells me Buenos Aires is a great place to go and there is still great value there.

STALLINGS: Even though the peso has started to regain some of distance that it lost against the dollar, it is still a very good place because the peso is relatively weak and the dollar goes a long way. A lot of luxury for very little price.

ROMANS: You mentioned Vietnam. What if I don't want to go on how many hours -- have you been to Vietnam?

VELSHI: I have not been it Vietnam.

ROMANS: The big trip you want to take in Asia to Vietnam. It is pretty far away. You need some time and you need some dedication to that trip. You also mentioned Poland, Prague, and Budapest, places that are in Eastern Europe, a little bit closer seven or eight-hour flight. Poland, Prague, Budapest.

STALLINGS: Any of the major Central European capitals are all cheaper than Paris, London and Rome. Your money will go a lot farther in Poland than it will in any western European country and even though some hotels are still priced in Euros, so you lose a little bit on the exchange rate there, but, still, it's a very good value.

VELSHI: All right, some ideas for you as you retool. I'm definitely one of these people who have been retooling my travel plans for 2008 based on where the dollar is going.

ROMANS: But you're still going to travel.

VELSHI: I'm going to travel, I'm a travel guy. I like to ride a motorcycle and be great it find some places in the U.S. ROMANS: Have you been to the Grand Canyon?

VELSHI: I have been to the Grand Canyon and I have actually rented a motorcycle and ridden around there. That might be an idea.

STALLINGS: Rent a motorcycle in Argentina.

VELSHI: Might be a good idea.

ROMANS: All right. Doug Stallings thanks so much, Doug.

VELSHI: Coming up next on YOUR MONEY, how the Hollywood writer strike could affect the shows you watch and the movies you want to see and how it's already doing so. Stay with us we give you some tips on how to handle it.

(COMMERCIAL BREAK)

ROMANS: Hollywood's writers walked off the job this week and, listen, a lot of folks care how this strike is going to go because if it isn't settled soon the walk out could hit the TV shows and movies that you want to see. Already hitting the TV shows. Comedy shows on hiatus and movies, I don't know, maybe they could be next.

VELSHI: What happens next? Robert Thompson is the director of The Center for Study a popular television at Syracuse University and much more serious title than the job he has because he knows everything about how these things affect us. Robert tell us about this. We've seen some TV shows, the daily comedy-type of shows and the late-night shows have gone into reruns. What else?

ROBERTT THOMPSON, SYRACUSE UNIVERSITY: Yeah, you know, that's a pretty big deal. If this were 1967 and late night went away, OK, you'd lose Johnny Carson for a while, no big deal. These late-night comedies are an important civic discussion of us and citizens of the Republic. What John Stewart does on his daily show and Steve Colbert on his program have really become an important voice in this important year as we move towards the presidential election?

I think it's a sad thing that that voice is silence. So those are gone already. The second thing, soap operas may be the worst affected by this. They have episodes in the can until about January. But if this strike keeps going and networks put other things on in the daytime instead of soap operas my guess is they will never bring the daytime soap operas back. The casts are too big, they are too expensive to make. If this strike goes on for six months, it could be the nail in the coffin of 75-year-old genre of the American soap opera which started in radio.

The third biggest affected programming, of course, is the serials. "24" has been shelved, they had about eight episodes of it done, and they'll wait until they finish the rest. "Lost" we heard is going to play the eight episodes it already had done, that will end in a cliff hanger and be a really, really short season.

ROMANS: Let me ask you about "24" because "24" and "Lost" both have huge fan bases that are very vocal. "24" will they run if this strike or when this strike is resolved, will they begin at the beginning of the season then or could the whole season be out because they want to run these back-to-back?

THOMPSON: Right. I think the latter will be the case. Unless this strike gets solved very, very soon, which there is no indication that it will? If they ran what they had made so far, they'd have to change the name from "24" to "8." it wouldn't end, it would be in the middle of the day. This would be a "24" less season and as soon as they can make the rest of the episodes they'll do it. You have to run them back-to-back, long hiatuses aren't good.

ROMANS: This is the point of the strike; you want to inflict pain so that you can bring attention to what the situation is.

VELSHI: Little hockey strike. You can inflict so much pain that people just go away.

THOMPSON: That's exactly true. What a lot of people, I don't think during primetime people will go to the Internet but they will go to DVDs and the rest of it which exactly justifies what the writers want. If these income streams for content are going to be DVDs, downloads and all the rest of it, they want to make sure that they are in that equation in a fair way. So, in some ways, the new technology that is threatening the very way of doing business is also the thing that they need to resolve in this strike.

VELSHI: This strike, is it meaningful? Do we think these writers don't get paid enough money? No idea what these writers make and whether they should be paid more. If they want a cut of the DVD and download action, they should get it. Because that is the way the future is. Is this a reasonable strike?

THOMPSON: I think it's absolutely reasonable. They get a very small percentage as it is, but it is hard to get public sympathy for anybody in Hollywood. If you have coal miners striking or people with dirt under their fingernails striking you can get the public sympathy. I think most people think that anybody involved in big-time national Hollywood television entertainment are driving around in huge cars and lunching at, you know, the fanciest restaurants.

Most people don't know that the majority of people are not working very regularly. There's a very small percentage at the top that are making lots and lots of money and a lot of those people depend upon the residuals that they get to live and eat for that matter from project to project. Even though they are only asking 8 cents per unit on the DVDs as opposed to 4 cents with billions of dollars in DVD sales, that's a significant difference.

ROMANS: Sure. I don't know, I would disagree with you that everybody thinks everybody involved in Hollywood are the big stars. I think a lot of working men and women who are writing these scripts and on soap operas and all other kind of shows that they don't get the big, the big credit or the big limousines. I don't know. I wonder if you're seeing on the picket lines you're seeing some support for the -- certainly seeing support for the writers from the actors. ROMANS: You see the actors going out there and supporting them.

THOMPSON: Of course, they'll get to really put their money where their mouth is in June when they come up for contracts. It may take the actors and the directors to join this when their contracts come up to really finally settle it because then it would mean a complete shutdown.

VELSHI: Robert, good to see you. Thanks for letting us know a little bit about this. Robert Thompson is director of The Center for Study, a popular television at Syracuse University.

ROMANS: Again, one of those really great jobs. He studies popular television.

Coming up next on YOUR MONEY, what you need to know about negotiating your salary before you even open your mouth.

(COMMERCIAL BREAK)

ROMANS: When you're switching your job and getting a new job, you want to make sure you're in the driver's seat because you want a new job, not because you've been told to get a new job. But when this happens when you're switching jobs you have to update your resume and apply, you have it interview and often the most difficult part of this process actually comes once you receive an offer for the new job.

VELSHI: Because then the fun is over.

ROMANS: And it is a mind field of mistakes you can make and every one of those mistakes actually affects how much money you're bringing home, which is the bottom line.

VELSHI: So we are going to talk about negotiating your salary. Ines Ferre joins us now to talk about this and given everything we're dealing with in the news today, when somebody gets a job offer it may not be top of their mind to say, can I ask for a little more money given the shape the economy is in.

INES FERRE, CNN EN ESPANOL: Exactly. I know a lot of people are thinking that, if the economy is slowing, how much wiggle room do I have to negotiate a salary? Experts say that no matter what the job is most of the time there's something that you can negotiate.

Now, of course, a lot depends on the industry, the position and if you're the right fit, but as a perspective employer absolutely wants you, it's exactly that they're expecting you to negotiate. I asked one expert how to do just that. Listen to this.

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FERRE (voice over): What are some of the pointers that you have for negotiating a good salary? LESLIE EVANS, VIRTUALCAREERCOACHING.COM: OK, point number one, don't negotiate until you get the offer in writing. You can indicate during the interview what you would like, but don't negotiate until you get it in writing.

Point number two, research the market. Know what a company will pay you. Point number three, know what your priorities, is it getting the best salary possible? Is it flexibility? Is it complete health care coverage? Know your priorities before you go in.

FERRE: What about when a perspective employer asks you how much you want to get paid for this? You don't want to give them something that is too high to turn them off but you also don't want to short change yourself. What do you say to those people?

EVANS: You want to get them to offer a number first. You'd like to say, I'd like it get paid fairly for what you want me to do. You know more about what that would be, why don't you tell me what this job is paying.

FERRE: What if you have other job offers? Does this come into the picture when you're negotiating?

EVANS: Yes, if you have another job offer it is great because it creates leverage. You can tell the other company you have another job offer and you can use it to increase the terms if you do it successfully.

FERRE: Now let's talk a second about women negotiating. A lot of women feel, I can't negotiate as well as men, why?

EVANS: It's a mindset with women. Women have a hard time, for some reason, taking a stand for their value. I would say before you go in, you look them in the eye and take a stand for your value. Know what you're worth in the market.

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FERRE: And whatever you do, experts say, don't lie about how much you made or other offers on the table. Employers have a way of finding out and it could cost you your job.

ROMANS: Ines we have heard it over and over again. You are not the first one to tell us that women make sure they're negotiating the right salary off the top. Over the course of a lifetime when you start too low or below what a male counterpart is getting because he might be more aggressively, for whatever reason, negotiating a salary, over the course of a lifetime that is a lot of money.

FERRE: Right exactly and you know another negotiating tip is, silence. Something where you can say, um, so somebody offers you something and then you kind of sit back ...

ROMANS: You never regret what you don't say. You never regret what you don't say.

VELSHI: I couldn't speak to that example.

ROMANS: Which is tough when you're on television trying to talk for a living. Another thing that was interesting, never say the number first. That's a little hard, especially if somebody is grilling you, how much would make you happy?

FERRE: Right. A lot of experts say the first person to say the number usually loses. So, you don't want to throw out the number first. You always want them to throw out the number first it you.

VELSHI: One of the other tips was really know the research. Know what they're likely to pay you. What the range is. For whatever reason you do have to step up with a number, at least you have a ballpark.

FERRE: Exactly. And there is so many Web sites out there that will tell you all of this. The other thing is you have to think about all the things that a salary is made of. Perks. You know one thing that you can even negotiate is, for example, when you're getting the job offer, well, I actually had a vacation planned for Labor Day Weekend, I had a wedding to go to this day, can I have that day paid and could I take it off and get it paid? You have a lot of things you can negotiate.

ROMANS: Vacation times, too, if you've been one place for a long time and you go to a new place and you only have two weeks vacation you need another week of vacation if you can't give this salary. One thing my sister-in-law Kathleen said, no matter what number the person says that they're offering you, tell them a number back and end with three because you'll have a smile on your face. Always end in three. There's a smile on your face and then it is always more than they offered and they usually smile back and say, OK.

VELSHI: Ines good to see you, thank you so much.

FERRE: Thank you.

VELSHI: Ines is going to back with us next week talking about negotiating the raise.

ROMANS: Exactly how to negotiate a raise. Once you got the job and the salary you deserve ...

VELSHI: That end in a three.

ROMANS: With a smile on your face then you have to get an increase next year.

VELSHI: Ines thank you we will see you next week.

FERRE: Thank you.

ROMANS: All right, earlier this week banking giant Citigroup announced its CEO was resigning due to billions of dollars in losses. Billions with a b. More than they thought, more than anybody else thought and a really troubling situation there. VELSHI: Now retired treasury secretary Robert Rubin has taken over as chairman of Citigroup's board and Rubin also leads the charge at another organization with an entirely different mission.

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VELSHI (voice over): The Bronx, southeast Washington, D.C., the Mississippi Delta, all stark images of poverty and a sharp contrast to the life of a former U.S. Treasury Secretary, but Robert Rubin made one trip to the Bronx that completely changed his perspective.

ROBERT RUBIN, CHAIRMAN, LISC: Astounded. Because what I saw in the south Bronx, which, in a sense, was the symbol of bourbon decay at one point was block after block after block of renovated housing that was the beginning of new business activity. It was the creation of a real community. And, so, I said, well, how did this happen? That's when I learned about LISC.

VELSHI: LISC it the Local Emission of Support Corporation it's a non-profit organization that helps community groups fund projects to redevelop run down neighborhoods.

RUBIN: I left treasury in July of 1999 and Michael came to me and said our chairman is going to step down and we'd like you to be chairman and that was the first thing that I did and the reason I did it was I think that these problems of the inner cities and of the distressed rural areas are critical issue for our country. Socially, morally but also very much economically.

VELSHI: Rubin is still active in the for-profit world. He was recently named chairman of the board for financial giant Citigroup as they search for a new CEO, but the work with LISC remains important.

RUBIN: I think that the best way to get a sense of how important LISC is to go on a little tour of project sites. You get a sense of really how great these accomplishments have been.

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VELSHI: Well, he's going to have a lot more work ahead of him now at the top of Citigroup.

Well coming up, meet the head of a company whose job is truly a treat. It is really every child's dream come true.

ROMANS: This is a good one, don't go away.

VELSHI: You want to stay with us for this.

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VELSHI: Do you like ice cream?

ROMANS: Yes chocolate.

VELSHI: That's your favorite flavor? ROMANS: Yes. I am very boring I have to get the same brand, same kind, chocolate, I won't say the brand.

VELSHI: Are you easily swayed? Do you ever try other ice creams?

ROMANS: Never.

VELSHI: That is interesting because I sat down with the CEO of Dreyers Ice Cream, Dreyers Andeies. Gary Rogers is his name; guess what, not much loyalty in this business.

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GARY ROGERS, CEO, DREYERS: I'll be honest with you, Ali, flavor comes first. I wish it were the brand. But if you're a cookie dough fan and you can't find Dreyer's cookie dough, you'll buy somebody else's cookie dough.

VELSHI: How did you get into this business?

ROGERS: I stumbled it to it. I went broke in the restaurant business and was looking for something to do that would be an extension of what I'd learned in the restaurant business, even though it was unsuccessful and I met a guy who had a little ice cream company in Oakland who was struggling with his financials and needed a loan from the bank he couldn't get and I asked him if he'd consider selling the company and he said not until just now.

Three days later I had an option to buy his business for $1 million. I didn't have $1 million and I didn't have any money, really. And so he asked me how I was going to pay for it. I said I'd write a check. We did, we put together a deal and bought the company in 1977. Actually, for $500,000 in equity and we just sold it to Nestle for $3.2 billion. So, it was a pretty good run.

VELSHI: How have you been in this business for 30 years and look the way that you do?

ROGERS: Buy these really tight girdles for men. Well, I eat ice cream every day. I exercise a lot, I try to balance my affection for ice cream by cutting back else where. But I have at least a little bit of ice cream, kind of like we did here, every day. I feel like it's my duty. When you run the largest ice cream company in the world you have to eat the product every day.

VELSHI: Do you have favorites or do you try things out?

ROGERS: Vanilla is my favorite but I try things out. You have to. People bring me new flavors all the time. You have to try this, am I going to say, no? It's a tough job, Ali, but somebody has to do it.

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VELSHI: It was a tough interview. ROMANS: Oh yeah I'm sure. A lot of entrepreneurs and CEOs most have gone broke somewhere along the way before they really hit success. Takes kind of a risk-taking business personality and I was interested to see he went broke before he had gone into the ice cream business.

VELSHI: $3.2 billion is what they sold it for. With all the different products out there by the way and they have many. Gary told me a third of the sales are vanilla. I didn't ask him about the chocolate, but people like their flavors. Very interesting.

Well, thank you for joining us for this edition of YOUR MONEY. You can catch Christine later today at 6:00 p.m. Eastern on "Lou Dobbs This Week."

ROMANS: And of course you can see Ali every weekday morning on "American Morning." We'll see you back here next week.

VELSHI: Saturday at 1:00 and Sunday at 3:00. See you then.

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