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Will Bush's Subprime Bailout Work?; What Does Jobs Number Indicate?; Creditors Look to Broker Social Lending

Aired December 8, 2007 - 13:00   ET


FREDRICKA WHITFIELD, CNN ANCHOR: Our top story is in Omaha. A mall reopens three days after a gunman killed eight people and himself. There is added security and one glaring reminder of the rampage. The Von Maur department store, scene of the massacre, remains closed.
And former White House Counsel Harriet Miers back in the news today. Bush administration officials say Miers told the CIA not to destroy videotapes showing the interrogation of two terrorism suspects. The CIA says the tapes were destroyed to protect the identities of the interrogators.

And near Tampa, Florida, a 9-year-old died after being run over by a Christmas parade float. Police say the boy's foot got caught by the wheel and he was dragged under. He was rushed to the hospital but then later died.

And not today, perhaps tomorrow. That's the word from NASA concerning the launch of the Shuttle Atlantis. Problems with the engine sensors have caused the launch to be pushed back twice already. Those faulty sensors could cause the engines to shut down during launch. We'll update the top stories at the bottom of the hour, now time for YOUR $$$$$.

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

CHRISTINE ROMANS, CO-HOST: And I'm Christine Romans. Coming up on today's program, what this week's jobs report means for the future of your money.

VELSHI: Plus, a new service that takes the pain out of, get this, loaning cash to your family and friends, if that's something you want to do.

ROMANS: How could you never have pain loaning money to -- cash to friends and family?

And why you might actually want a little negative feedback on your annual performance review. I think you've never an annual...

VELSHI: Why she wants some negative feedback on her performance review.

A new report, by the way, shows that U.S. home foreclosures, talk about negative stuff, are at a record high. That is according to the Mortgage Bankers Association.

ROMANS: President Bush announced a plan aimed at helping some homeowners with subprime loans to stay out of foreclosure. Treasury Secretary Henry Paulson put this plan together and our next guest says it's needed right now.

VELSHI: Susan Wachter is the Richard B. Worley professor of Financial Management at the University of Pennsylvania's Wharton School.

Thank you for joining us. You heard this plan. What do you think? Do you think it is the right thing right now?

SUSAN WACHTER, WHARTON SCHOOL, UNIV. OF PENN.: It is the right thing. It is necessary and it needs to move quickly because these foreclosures are building on themselves and they are causing more foreclosures as housing prices fall, actually plummet throughout the U.S.

ROMANS: The goal here, of course, Susan, is to try to blunt some kind of foreclosure epidemic, is this enough to do that?

WACHTER: No, it's not enough. But it's a very good start. It's a large start. It is going to take off the table perhaps up to 25 percent of foreclosures and that's important.

VELSHI: Susan, there's this whole issue that is coming up with, you know, in some cases it's not enough and there are other people saying, well, you know, there's this cutoff for who gets this help from the government. And it's people who can't afford an increase in their interest rates.

So they're not going to default now, but if their rate were to increase, they would default, which means all of those people who planned ahead and didn't overextend themselves and read their mortgage loan documents and understood the rates could go up, they're not getting any help. And there are a lot of people saying this isn't fair.

WACHTER: There is a sense of that inequity, and that's understandable. But you know, creditors have the right to renegotiate their debt if they're facing foreclosure and this is a plan that creditors are agreeing to. It's also obviously in the interests of the debtors. It's in the interest of everyone because to the extent that housing prices are -- there's the plummeting of them is stemmed. We have some support for the housing market and this does support the housing market, it helps everyone.

ROMANS: If you have missed a payment, this plan is not for you. If you can afford your mortgage rate increase, you know, if you can really afford it when it goes up, this plan is not for you. If you don't have an income...

VELSHI: This plan is not for you. And if your house is not -- if your mortgage is bigger than your house, it's not for you. So what do we do, Susan, about all of those people for whom this plan isn't going to help?

WACHTER: Well, I take issue with that. The plan will help the overall economy. So it will hopefully help us from going into a recession. But you ask a very good question. What are we going to do with all of those other people? And there are going to have to be interventions. And the interventions are going to have to come from not just the national level, but from the local level, and services are going to have to work with these groups as well.

VELSHI: I want to just pull out a thought here that you've got. So for those of us -- and I don't mean us, but anybody who is upset that this plan isn't broad enough or doesn't include them or maybe rewards risky behavior, you're saying that it's better for us, if, let's call it for argument's sake, a quarter million1houses aren't foreclosed and on the market, it is better for all of us?

WACHTER: It is better for all of us. Because you can see what that will do to housing prices, it's pretty obvious out there. And housing prices are falling. It's a very fragile market and we are, overall, at the verge of a recession as well. So this could help us stay out of recession.

ROMANS: And when you look across the country, you know, they say all the real estate -- all politics and all real estate are local, but when you look across the country, you can see where those housing prices are falling and where they happen to be going up. But, you're right, if you can prevent your neighbor's house being foreclosed on, that is one more home on the block that is not -- (INAUDIBLE) home values were green, that's where they're going up. Red is where they have been going down in the third quarter.

Do you think we're going to see housing prices continue to fall...

WACHTER: Absolutely.

ROMANS: ... even if we can blunt the worst of this? I mean, homeowners should expect lower prices?

WACHTER: Unfortunately, in much of America housing prices are going to continue fall through this year as we do have the resets and we're not curing all of them.

VELSHI: One last question for you, Susan, people are asking at this point if we have some sense of the end in maybe a year or longer away. At what point does this become an opportunity for people who are prepared to buy property?

WACHTER: When it's clear that we don't have a recession in our future.

VELSHI: Very good. Susan, thank you very much for joining us. Professor Susan Wachter of the Wharton School at the University of Pennsylvania.

ROMANS: It's fascinating to think that prices could still continue to fall. I know last week Robert Shiller from Yale told us we could have a period of years of decline in home price.

VELSHI: Yes. It's going to be an interesting year to watch, at least in the next 12 months. And much of America might be biting its nails over this housing market, but for the super wealthy in New York City, residential sales are still very high.

ROMANS: Forbes magazine out this week with its list of the 10 priciest home sales of 2007. The top five mega deals are in Manhattan with developer Harry Macklowe leading the list. He paid, Ali, $60 million for nearly an entire floor of the Plaza Hotel.

VELSHI: I don't know if that counts in the housing mix, you want to buy an entire floor of a hotel. Baseball star Alex Rodriguez could grab sixth place in Manhattan -- or for his Manhattan place if his $39 million townhouse purchase goes through by the year's end.

ROMANS: Thirty-nine million.

VELSHI: Thirty-nine million, nice.

ROMANS: Nothing. All right. Up next on YOUR $$$$$, the jobs report is out. We will have a look at what these numbers can tell you about the economy.


ROMANS: The American economy added 94,000 jobs in the month of November.

VELSHI: You know, we just had our monthly jobs report and we talked so much about these other things, about mortgages and oil, but the jobs is such an important thing, the unemployment rate held steady at 4.7 percent. So some people think that means we're out of the woods, no recession coming, it's all good. Is it?

ROMANS: I don't know, joining us now is John Rutledge, chairman of Rutledge Capital. He is going to tell us what he thinks is happening in the economy, whether 94,000 jobs is enough to make us confident about the jobs market and what it all means.

Hi, John.

JOHN RUTLEDGE, CHAIRMAN, RUTLEDGE CAPITAL: Hey, how are you doing? Good morning.

ROMANS: Are we going to avoid a recession? Our last guest just said she thinks we're on the verge of one.

RUTLEDGE: There is going to be no recession, 94,000 jobs is like kissing your sister -- your ugly sister. So it's a little bit soft.


ROMANS: My sister is beautiful. She's really lovely.

RUTLEDGE: It's a little bit soft. But it's better than a stick in the eye. And the economy is growing. It's a little soft because of the housing issues, that will go away. And the world is growing now 5 percent this year, the highest rate in recorded history, profits are growing. You know, this is, this is not far from as good as it gets.

VELSHI: It is sunny where you are. They say the weather is good in San Diego all the time. It is sunny where you are.

Look, for our viewers who are watching this and they hear about the Dow which makes move that are 200 and 300 points with some regularity now, they hear about oil prices, they have to deal with those oil prices, they know that our foreclosures are at a record, our home prices are the lowest they've been or they've been dropping as quickly as they've been in 25 years, which one of these economic indicators, which one of these numbers do you use to decide how sunny is it for you?

RUTLEDGE: I think we sometimes tend to pull a Pee-wee Herman where some numbers come out and then we run around screaming about it. You know, more people own houses in America as a fraction of the population than anywhere in the world, it's a number roughly 60 percent. Net worth...

ROMANS: Some of those people aren't going to keep on holding on to those -- their houses, though. All-time high for...

RUTLEDGE: But very small numbers. We have in America $60 trillion of net worth in the household sector. That number is up $20 trillion in the last five years. So, this is not the end of the world, it's a problem, but the real problem with that, with the mortgages is that the bond market stopped functioning a couple months ago.

Without a bond market to buy the mortgages from the mortgage issuers, mortgages can't happen. That's what really took the bottom out. It's really a temporary blackout like happens with the electricity once every year or two, or it's trying to drive in the fog when you can't see very far ahead.

You know, this will end, blackouts are always temporary and the fundamentals underlying the economy are all very strong.

VELSHI: I want to look at this unemployment report as it plays out across the country. So the national unemployment rate is 4.7 percent now. It has been there for a little while. Let's look at how it looks when you look at the whole country. What we've done is in green are those states where the unemployment rate is somewhat lower than the national rate, and in red are those states where the unemployment rate is somewhat higher than the national average.

So for people who are looking at this map, there's that big swath of mountain states just past the Midwest that look like they're growing and they're doing pretty well, Texas seems to have a lower unemployment rate, even Louisiana is doing well with some oil workers and some construction. There is definitely a pattern to this map. It's not across the country. RUTLEDGE: Absolutely. You know, the pattern is that if you have a wrench in your hand, you're screwed and if you have a keyboard in your hand, you're doing just fine. Because the big event that has happened in the world is capital owners can now move their capital anywhere in the world they want, but workers still find it difficult to move very far.

So, as capital gets redeployed around the world, it leaves some people's hands and leaves some people that are frightened and angry and poor. But it also benefits other people. So, it has set up almost a class war in America. That's that map that you're talking about. The Midwest is hurt hard by this. The West Coast itself and, of course, the west coast in Florida is where the big housing bubble was, and that's where all the damage is right now, too.

ROMANS: All right. John, we have to leave it there. John Rutledge, as always, from sunny San Diego, thanks, John.

VELSHI: All right. Coming up next, learn how to generate income while lending your child money. We'll tell you about it when we come back.


ROMANS: Nearly one in five Americans say they can't afford the health care they need. That is from the latest version of an annual study by the Centers for Disease Control in Atlanta. Nearly 20 percent of the adults surveyed said they needed at least one of five basic kinds of health care but couldn't cover the cost. Those five categories: medical care, prescription drugs, mental health treatment, dental care and eyeglasses.

VELSHI: Well, a report shows that car loan delinquencies are at their highest level in years. The survey from Lehman Brothers found that payments for about 4.5 percent of loans made in the year 2006 were at least 30 days late. That's up 2.9 percent from the previous month. It's the biggest one-month jump in at least eight years.

The auto loan industry isn't expecting a crisis on the scale of the home mortgage mess, but the rise in delinquent payments might show that those credit problems are spreading from the housing market to the broader economy.

ROMANS: And a check on more than 1,200 toys and other children's products has found that 35 percent, 35 percent contain lead. A national coalition of environmental health groups released a study this week, among the items showing excessive lead levels, a Hannah Montana card game case, a Go Diego Go! backpack and Circo brand shoes.

Most of the products still on store shelves. Many were found with lead content well above the federal recall standard. Just 20 percent had no trace of lead at all.

VELSHI: Do you think -- we often talk about when you are starting a business, the idea of going to family to raise money. But when times are a little tough, that can be very dicey. It can be tempting in some cases, but can also put some relationships at risk.

ROMANS: Well, it -- to buy your first home or to even try to start a business, sometimes you have to go to people, you know, your rich uncle, for example, your retiring parents, to get the money together. But it can be, as you said, a very dicey situation with all kinds of rules to follow and sometimes you need some help.

VELSHI: So we have got some ideas. Joining us now is Asheesh Advani. He is the CEO of Virgin Money, and one of the pioneers of what is known as social lending and a guy I used to know when I was in high school. He's...

ROMANS: Really?

VELSHI: ... doing very well for himself.


ROMANS: Wait, Asheesh...


ROMANS: ... did he wear a vest when he was in high school?


ADVANI: Ali, I think he has always been a snazzy dresser, how about that?

VELSHI: Thank you, Asheesh.

ROMANS: Well, what about his hair style in high school?

VELSHI: You can stay.


ADVANI: It hasn't changed much. How about that? It hasn't changed much.


ROMANS: Social lending, this is not giving 20 bucks for your friend to go out for the weekend. Social lending, what is it?

ADVANI: No, it's more than that. I think what we've learned is, is about 6 million loans between family and friends, usually for things like home purchases and small businesses. And there's need for order to the chaos.

VELSHI: Well, so what is this? What do you bring to this whole thing? Tell us how this would work. Walk us through it.

ADVANI: Sure. What we do is we document and manage these loans. So not only do we do the promissory note or recording a private mortgage, we also handle all the payments. So on a monthly basis through direct debit and direct deposit, we handle all the payments and we do the tax reporting and help people really handle it in a business-like fashion.

VELSHI: But what happens if Christine decides she wants to loan me some money?

ADVANI: What you do is you call us or you go to the Web site, which is, and we would, for a small fee, set the whole thing up for you and manage it for you.

ROMANS: So it's like, say your uncle is going to help you start a restaurant, right? So you have got $25,000 in the restaurant, and he expects to be paid back after three years. You need to structure it some way so that you're both happy with the investment, there is a way to restructure it if something goes wrong so that you're not causing family feuds over the 25 grand that your uncle lent you and your (INAUDIBLE) -- as you point out, your uncle doesn't get mad when you take a family vacation before he gets paid back.

ADVANI: Yes. It happens all the time. It is so convenient to say, pay me back in three years. That's the worst way to do it because it's hard for even successful entrepreneurs to save up a lump sum of $25,000. It's best to have some kind of payment plan.

VELSHI: Asheesh, what level of lending does this become worthwhile? Because you said there is a fee. So, you know, how much money should be involved and what kind of loans would this best work for? Is it mortgages, is it $25,000 to start up your business, is it a bigger loan? What works well?

ADVANI: For personal loans we charge 99 bucks. So any loan over $5,000 is worth it. For mortgages we charge $700 because we actually record the mortgage and help you get the tax benefit, so borrowers can deduct the interest just like they would if they went to a bank. And in that case it makes sense if it is a little bit more.

ROMANS: And then you get a little fee every time that mortgage check is written or something, right? Just like a $9 fee or something?

ADVANI: Exactly, we charge $9 per payment. So for businesses you can structure it as quarterly payments or annual payments, for mortgages it makes sense to do it monthly.

VELSHI: What's the connection to the Virgin Group?

ADVANI: So Virgin is launching a major financial services business in the U.S. And we're starting with the friends and family proposition which always gives people more flexible loans with grace periods and usually a couple of percentage points cheaper.

We're going to attach that on to give people the best deal on start-up loans for businesses, home loans and student loans. We're launching student loans in a few months.

ROMANS: And quick, Asheesh, let me ask you about a mortgage. Say, you know, I can't afford the down payment on a home, but my parents can help out. How do I do that?

ADVANI: It's a great deal because your parents are earning usually a couple of percentage points more than they would if they had the money in the bank. And you're saving at least a couple of percentage points against what people are paying for piggyback or second mortgages. So the family unit is keeping thousands of dollars in the family, usually about $8,000 a year at least, and you're saving a few thousand dollars as a borrower as well.

ROMANS: Keeping the money in the family and robbing the bank, kind of.

VELSHI: (INAUDIBLE) this guy, I grew up with some smart people, huh?

ROMANS: I was going to say...


VELSHI: Asheesh, I always guessed something good of yourself. What a real pleasure to have you with us. Thank you so much.

ADVANI: Thank you. Good to see you too.

ROMANS: Asheesh Advani, thanks.

VELSHI: Asheesh is the CEO of Virgin Money. Very interesting idea, huh?

ROMANS: I think it is a very -- I mean, it takes the -- sort of the peril out of loaning money...


ROMANS: OK. Coming up, shopping online can save you a lot of hassle, but it also comes with some risks.

VELSHI: What you need to know about avoiding becoming a victim this holiday season. That's coming up next on YOUR $$$$$.


WHITFIELD: Hello, I'm Fredricka Whitfield in Atlanta. A quick look at what's happening right now. Success in Iraq could mean shorter tours of duty for U.S. soldiers. A general says the Army might start cutting back those 15-month deployments by late next summer.

And there is tight security as shoppers return to the Omaha mall where a gunman killed eight people and himself on Wednesday. Funeral services for some of the victims are planned for Monday.

And the Oprah/Obama tour kicks off in Iowa this afternoon, generating steam for Democratic presidential candidate Barack Obama. The hoped for result, Winfrey will attract women voters away from Senator Hillary Clinton. And the space shuttle launch delayed again. NASA won't try again until tomorrow at the earliest. The Atlantis mission has been on hold since Thursday when two external fuel tank sensors failed pre-flight testing.

Coming up at the top of the hour, my interview with Tom Brokaw. He talks about the first time he went to Haight-Ashbury during the '60s, the birthplace of the hippie movement.

Now, back to more of YOUR $$$$$.

ROMANS: OK, do you buy Christmas or holiday gifts online?

VELSHI: I did most of my shopping online.

ROMANS: Do you really?

VELSHI: I would say more than 95 percent of my shopping online.

ROMANS: Do you know even shopping online has potential risks, I mean, to your security, to your privacy. There is all kinds of, you know, perils fraught in shopping online.


VELSHI: You know, the thing is, I think most people have gotten over that fear and yet they're still there. I mean, the fact is, I don't really pay that much attention to it, but they're there. The Better Business Bureau, BBB for short, has some advice on safe shopping this holiday season if you're shopping online. The message is do business with people you know and trust.

ROMANS: Steve Salter is the vice president of Better Business Bureau online. He joins us now. Hi, Steve, thanks for joining us.

STEVE SALTER, VICE PRESIDENT, BBBONLINE: Hi, thank you. Glad to be here.

ROMANS: I know you guys have -- like your BBB online has some 10 top pieces of advice for people who are buying their gifts online, but you have got five, I think we want to boil it down to, and you know, and knowing who you're doing business with is really important here.

SALTER: Well, it really is. And you said it best right off the top, shop with businesses that you trust. Either Web sites that you have been to before or Web sites that you have researched. There are a number of ways to research companies online now and there are a lot of factors you can look at on a Web site itself to know whether or not it's worthy of your business.

VELSHI: Do you trust those ratings, like a lot of sites will tell you this merchant has this many ratings or this (INAUDIBLE) -- you know, is that the way you should figure out whether something is trustworthy other than the obvious big ones that we all know?

SALTER: Well, the ratings are helpful, I think. Those are generally consumer feedback ratings that accumulate over time. And if a merchant has a high rating from a number of people over time, that is a good sign.

But all of these things are -- I think of them as bricks in a wall that you're building, evidence that you're putting together for your case. Another indicator, for example, is trust marks that third parties might give to sites that meet certain standards.

So the BBBOnLine trust mark, for example, other trust marks that indicate security or privacy, practices by Web site. Those are all good indicators but it's real important that when people see those, you click on them to verify that they're real because they could be...

VELSHI: Not just a graphic that somebody put on their Web site.

SALTER: Exactly, it could be fake.

ROMANS: And don't click on some of the other stuff. I mean, you can be someplace where you -- that you think reputable, but then there's other stuff out there to click on that can get you in trouble.

SALTER: Well, you're exactly right. And one of the worst things you can do online is to be misled by links, sometimes they're flashy banner ads, sometimes they're unsolicited e-mails that take you off to other sites, not the one you think you're going to, but that's how scammers often get their hooks in people.

VELSHI: Let's talk about paying with a credit card. It is something that...

ROMANS: We hear that all the time.

VELSHI: Yes. I mean, people still -- if you are going go online, it kind of goes hand-in-hand that you need to use a credit card if you're making those purchases, because that offers you another layer of protection?

SALTER: It offers you a couple layers of protection. That's right. First of all, credit cards are protected by federal law. And if your credit card is stolen or misused, consumers are generally not going it be liable for any damage in that circumstance, as longs as you report it quickly to the bank who has issued the credit card to you.

In addition to that, if you have a problem with the merchant, a legitimate merchant from who you bought something, you can challenge that charge and work out the dispute and have the charge temporarily taken off your account while you're getting it worked out.

So there is protection against theft and protection against legitimate disputes that happen in the course of business.

ROMANS: You know, a debit card is essentially cash, I mean, we hear that all the time. And it is great if you are trying to control your spending and not have the credit card...

VELSHI: But you don't have the protections.

ROMANS: ... so you don't have those protections. You also say trust your gut. And you bring up just a harrowing story of a Chicago couple who thought that they had won a car through somehow -- through some site -- online shopping site, and it turns out that it was a complete scam.

SALTER: Yes. Just this week we have had fresh reports of a scam involving a car that was listed, a brand-new car listed on a classified ad site for a very, very good price, ridiculously low price, frankly, for a new car. Once they got into talking to the scammer, the scammer had a line for every question they had.

He explained ultimately that the car belonged to his son who was unfortunately killed in Iraq and he was "looking for a good home for the car, looking for someone to take care of it for him." The end result, unfortunately, is that the person sent away, they wired money outside the country, about $3,500 to cover the shipping and the handling and that sort of thing.

We keep hearing these sorts of stories, they are really unfortunate, especially this time of year. But it's that path down the dark alleyway of unsolicited e-mail or following a classified ad. The key is for people to stay on the good Web sites and to go there themselves.

ROMANS: And trust your gut. I mean, if it sounds too good it be true...

VELSHI: It probably is.

ROMANS: ... it probably is. All right. Steve Salter, the Better Business Bureau online, thank you so much for that.

SALTER: My pleasure, thank you.

VELSHI: Coming up next on YOUR $$$$$, what you need to know before your annual review with the boss. You really need to hear this. I wish I had. Stay with us on YOUR $$$$$.


VELSHI: Well, it's the season for holiday bonuses, if, of course, you're lucky to work enough for a company that gives them and smart enough to manage how to get one.

ROMANS: Right. And before you rejoice about the holiday bonuses, we should remind you that it is also the season for the dreaded annual review. And you need to know how to handle that review and to make it a productive experience for everybody.

VELSHI: Well, Brad Karsh, our good friend, is the president and founder of JobBound, a job services company for students and professionals. He has got some advice on how it is you should handle this review.

And, Brad, as always, I'm all year ears.


VELSHI: You, too.

KARSH: You know, a lot of people go into this process very intimidated, very scared, very nervous. Hey, I'm going to get a review. And that is the absolute wrong approach to take. You should go into this experience recognizing it's a way for you to grow and to get better. People are incredibly nervous about this and incredibly defensive and that's the wrong thing to do.

ROMANS: Defensive, a lot of people, no matter what, even if it's the most constructive of criticism, they don't hear anything else, they just hear that criticism. But isn't review -- by definition, isn't there supposed to be something you're supposed to improve upon for the next year? People should take that and really take it to heart.

KARSH: Everybody should be improving, from the president on down to the junior most employee. Everybody needs to get better. But people go into this and kind of think it's a battle or an interrogation with their boss and they put up this screen and sort of think, bring it on, boss, you have got nothing on me, I was flawless over the last year.

VELSHI: So, Brad, let's say I'm doing your review, I'm sitting there saying, Brad, I think you should -- I think you need to get a different tie and I think you should -- I think you should...

ROMANS: I don't think I can tell you that...


VELSHI: You should come out of your shell a little bit. And I tell you these things and then you're sitting there, it's not what you expected to hear.

KARSH: Right. And the first thing you want to do in a review is, be calm, ask for clarification, make sure you understand what the person is saying. We get very emotional in these things. And we hear things very differently. Ali just said to me I should change my tie, I'm thinking he thinks I'm ugly, right? How dare he say I'm ugly?

No, listen, ask for clarifications. Hey, Ali, is there a specific tie you don't like? Do you think I'm better off with blues as opposed to reds? What exactly do you mean by that?

ROMANS: Also maybe a few weeks before you're going to go into this review, sit down yourself and think of the things that were your real achievements over the year, where you added shareholder value, where you kept a client, where you saved some money and be ready to go in with those, and be ready to write a rebuttal and ask to have it put on your file in case you don't like the way the review turned out.

KARSH: Right. Because the review is supposed to both the good things as well as things for you to improve on. So it should have a nice balance of both of those. If you find that you're getting nothing on the good side and that it's all just very negative, very constructive, then you owe it to yourself and to the company and your manager to write a written rebuttal. It's perfectly acceptable.

ROMANS: What if three out of four years you have got -- more than half of the feedback from your review is negative, is that time to find a new job?

KARSH: It might be time. You know, you may think, hey, I wonder what this says about me. Maybe I'm not the employee that I thought I was, or what does it say about this company if they're not valuing the work that I'm doing.

ROMANS: I'm sure it's the company.

KARSH: Yes. Another thing you can do is ask for 360 feedback. So maybe you have a tough relationship with your boss but you work with a lot of other people. Ask them to provide some feedback and have your manager collect that.

VELSHI: Well, how do you handle giving feedback to those to whom you report or those with whom you work? I mean, that's not as built- in a system, is it?

KARSH: No. Some companies do have set 360 feedback, but others don't. And you know, any good organization, any good working relationship, there should be feedback going back and forth both ways, constructive and positive. And if you set up an environment -- a working environment where everybody is getting feedback and feeling good about it, then it shouldn't be such an intimidating and overwhelming process.

ROMANS: And, Brad, what if you're the one who is doing the review for your employees, people you really like, but you do know that there are things they need to improve upon? Is there any advice for the boss here?

KARSH: As the manager, you want to make sure that you talk to them about the good stuff and also let them know that the constructive feedback you're giving them is for their benefit. The fact of the matter is we're used to feedback always being bad or something that we did wrong.

Everybody gets positive feedback, everybody should be getting constructive feedback. So if you set that up with your employee, hey, I'm going to talk about some great things as well as some things to work on, then they should appreciate and even embrace that feedback.

VELSHI: Brad, it's always great to talk to you, great advice. Thank you so much. And, frankly, I think your tie looks great.


KARSH: Thanks, Ali.

VELSHI: Brad Karsh, president and founder of JobBound.

ROMANS: All right. With wheat increasingly sold to produce biofuel, even the world's number one past company is not immune to environmental concerns.

VELSHI: I sat down with Guido Barilla, he is the fourth generation chairman of the Barilla Group. Now in addition to revealing the secrets of good pasta to me, he shared his concerns over those rising costs that are making his beloved product more expensive.


GUIDO BARILLA, CHAIRMAN, BARILLA GROUP: I think it's a ghost in this situation because pasta consumption, wheat consumption is very important for the world to feed the people. And to transform a raw material so valuable as wheat in energy, it is something that we really should think about, because there are not enough crops, not enough land dedicated to the destination for the eating products -- and all the products we eat. So, it's a very debatable issue.

VELSHI: What happened during the time where people were really starting to watch their intake and in many cases watching their carb intake? Because pasta is one of the easiest things to cut out of your diet if you're trying to get rid of carbs.

BARILLA: Absolutely. The (INAUDIBLE) has declined quite a bit for about three, four years, between 2 and 4 percent. But then the people realized that the low-carbohydrate diet was an obsession more than a good diet. Because everybody needs a equilibrium (ph). And carbohydrates, we cannot avoid carbohydrates. Carbohydrates are really the fuel for our life. So pasta has come back and we're regaining -- the (INAUDIBLE) is regaining volume and the people are back to the product.

VELSHI: As somebody who grew up around pasta and the business, how do you even conceive of the fact that some people think maybe we eat too much of it? Can someone eat too much pasta?

BARILLA: As is everything, you can eat too much of pasta. But pasta consumption in Italy is about 45 pounds per year, which is quite a lot. And probably in the south of Italy there are people that eat a big dish of pasta twice a day, that's maybe too much. But a consumption of seven times per week is quite fine.

VELSHI: How would I know if I'm eating good quality pasta or bad quality pasta?

KARSH: It should not stick after you have been cooking. It should be very firm and as we say in Italy, al dente. And you should like it, most of all.

VELSHI: That doesn't seem to be problem for me, liking my pasta. What is your favorite? What do you like? What is the good pasta dish?

BARILLA: I like definitely spaghetti, spaghetti with just oil and parmesan.

VELSHI: That simple?

BARILLA: That simple. That's it. That's the secret.


VELSHI: I was very hungry after that interview.

ROMANS: I don't think I cook it right.

VELSHI: He even says it in a way that makes you want to have it.

ROMANS: I know.

VELSHI: And the way he described it, I can't get pasta to...

ROMANS: No, al dente is not sticking together, no. I need to get it in a restaurant.

VELSHI: Yes, interesting story about Barilla pasta. He was saying that the packaging and the shipping is these days not only -- it is not only the product, but with oil prices and with -- you know, everything is expensive about buying pasta, but everybody likes it.

There was more to that interview, by the way, and if you want an extended look at that, check out They'll have it posted there for your.

ROMANS: All right. Up next on YOUR $$$$$, wait until you see who's watching you or your children on Facebook and what they could be finding out.

VELSHI: Stay with us.


ROMANS: A remarkable apology this week from the 23-year-old CEO of Facebook.

VELSHI: I thought you were going to say from our 23-year-old Jennifer Westhoven who is back with us.

We're very happy to have you here.

ROMANS: I'm sorry, she turned 24 last month.

VELSHI: Good to have you back. I have an account on Facebook. I think the concept is absolutely neat. The social networking site that allows people to do all sorts of stuff, but they got themselves in some trouble.

JENNIFER WESTHOVEN, CNN CORRESPONDENT: This was a big blunder and it has got some users upset. It has got journalists upset. It has got privacy advocates upset. Facebook was essentially spying, in a way, on its users. It was tracking many of their moves around the rest of the Web.

Now this has been one of the hottest social networking sites. It is a little bit -- MySpace is bigger than Facebook, but Facebook has been growing faster, more than 50 million users and thousands of them were outraged by this Beacon tracking program. They can now turn that program off. So, again, the CEO, yes, he's like a wonder kid and he was...


VELSHI: He is the 23-year-old we're talking about.

ROMANS: And he said, we handled it poorly, we should have never done this in the first place, we should let people should have the choice. But people were really ticked off.

WESTHOVEN: And he apologized on a blog, which I just think is a very modern way.


VELSHI: What I think is interesting is how people were outraged about their privacy on a social networking site, because people say so much and put so much information on those sites in the first place...

ROMANS: It's all about advertising, right? I mean, it was like they were trying to glean what you were doing so they could sell the...


ROMANS: ... advertisements, is that what it was?

WESTHOVEN: Well, but one of the reports that came up was there was a guy who bought a diamond ring for his wife and all of his friends, it flashed up on their screens.

VELSHI: Including his wife.

WESTHOVEN: His wife. Christmas ruined, he said.

ROMANS: Awwww.

VELSHI: Good thing he was buying it for his wife, is all I've got to say.

WESTHOVEN: I was going to say, yes.


VELSHI: Let's talk about cars.

WESTHOVEN: Well, we just got an update on this story. There is an energy bill that would set tough new standards for fuel economy. Well, it hit a hitch in the Senate after it won approval in the House earlier this week. Now, it would be the first major increase in fuel economy standards in three decades. It called for fuel economy to rise by 40 percent by 2020, up to 35 miles a gallon and it also required the nation to be using seven times the amount of ethanol that we're now putting in our tanks, and that would be by 2022. It was also going to put an end to $13.5 billion worth of tax breaks for big oil.

ROMANS: Those tax breaks just fueled hatred from the left. They were very upset about those.

VELSHI: And Barilla of Barilla Pasta was talking about the fact that this move to ethanol is causing other grains to go up. We talked about the -- last week we talked about increase in beer prices because of hops and barley, increase in pasta prices.

WESTHOVEN: But it's basically dead for now in the Senate, but there could be more talks.

VELSHI: Let's talk about the color silver. What's so neat about it?

WESTHOVEN: Well, I like this because, you know, I don't drive a car, right? But this is changing -- after I read this, I changed the way I looked at everybody else's cars. If you do drive a silver car, I'm sorry, you have just been downgraded. Yes, apparently after a seven-year run at the top, a long run, DuPont Automotive -- their job is to watch paint dry, I guess, says, white and pearl white is now the most popular color for cars.

VELSHI: Seriously?

WESTHOVEN: Yes, in the U.S. and Canada.

VELSHI: (INAUDIBLE) boring. You went from silver to white?

WESTHOVEN: Well, this is crucial for carmakers and dealerships, right? Because they don't want all of this burnt sienna models on the lot. They have got to plan really far in advance. But also for people, it's very telling. Apparently DuPont says that when white is most popular, it's always a transition color. It's usually only popular for a little while and then some other color comes in by storm and they don't know what it is yet.

ROMANS: What color is your car?

VELSHI: It is like a red -- dark red, rusty, kind of color -- but you know...

ROMANS: One of those new metallic-y reds?

VELSHI: It is, yes. I know that because I had a dent and then I went to get it repaired and he said, oh, if you had a solid color, it would be a lot cheaper than it's going to cost you to repair this.

ROMANS: Jennifer, our car is yellow -- bright yellow and it says NYC on the side.

VELSHI: Really?


VELSHI: Oh yes, yes, got a little white on top. And you've got to pay the driver.

ROMANS: At least it is not black and white. That would be a little bit of a problem. We're not riding in black and white cars anymore.

VELSHI: Great to see you, Jennifer Westhoven. As Christine can probably tell you better than I can, raising kids can be a tough enough job.

ROMANS: Ali has got the story of a former stay-at-home mom who retired from raising children and turned her attention toward faith.


ALI VELSHI, CNN CORRESPONDENT (voice-over): Sally Bingham is a woman of the cloth, but what she preaches is one part Bible and one part being green.

REV. SALLY BINGHAM, GRACE CATHEDRAL: Two of my greatest passions are the environment and my Christian faith. So bringing those two things together was probably the epiphany, when there became the opportunity to be a priest and talk about stewardship of creation from the pulpit.

VELSHI: Bingham is an Episcopal minister at Grace Cathedral in San Francisco. But 16 years ago, instead of raising environmental awareness, she was raising children.

BINGHAM: Prior to becoming a priest, I spent most of my time being a wife and mother. And it occurred to me that people who sit in the pews and profess a love for God should be the people that are protecting the creation.

VELSHI: So in 1991, at age 51, Bingham went to study at a seminary. And now she preaches her environmental sermon from the pulpit and across religious lines through her Regeneration Project. The organization helps religious groups around the country make their facilities more green.

BINGHAM: One of the really fun and exciting things about this ministry is the fact that it's interfaith, because it brings Muslims, Jews and Christians together around a table, standing in solidarity on a particular issue. And I have been completely overwhelmed by the affirmation and the growth of this ministry over the last three to five years -- utterly startling to me. But that tells me that I just happened, by the grace of God, to be in the right place at the right time.


VELSHI: All right. Up next, talk about a bake sale. What drove one woman to bake, get this, 96,000 cookies?

ROMANS: That's a lot of cookies.

VELSHI: You don't want it miss this, stay with us.


ROMANS: Pharmaceutical companies spend billions of dollars finding cures and treatments for diseases, but when too few people have an ailment, there simply is not enough financial incentive for the drug companies. It's a cold reminder that it is a business.

VELSHI: That wasn't good enough for one New York City mother with a sick 3-year-old boy and a treatment she was told wasn't available. So, she took matters into her own hands.

CNN's Mary Snow has this fascinating story.


MARY SNOW, CNN CORRESPONDENT (voice-over): Liam Witt is engine 1 ladder 24, smallest firefighter. But the toddler is up against the health equivalent of a four alarm fire and it came with little warning.

DR. NAI-KONG CHEUNG, MEMORIAL SLOAN-KETTERING CANCER CTR.: Neuroblastoma is a rare cancer that affects children and infants. It can be silent and it can be quite devastating.

SNOW: Liam was diagnosed nine months ago with advanced neuroblastoma, a cancer of the nervous system. The 3-year-old has had surgery, chemotherapy, and radiation to rid his body of the cancer. He now receives anti-body treatments called 3F8 (ph) at New York's Memorial Sloan-Kettering Cancer Center to prevent it from coming back.

GRETCHEN WITT, LIAM'S MOTHER: All right. I know you don't like these, but let's do it really fast.

SNOW: Defeating neuroblastoma is difficult. Only 30 percent of children with high-risk cases survive. The threat of relapse is high and the funding for new treatments is low. Dr. Nai-Kong Cheung is head of the neuroblastoma program at Memorial Sloan-Kettering.

CHEUNG: Neuroblastoma is an orphan disease, it's approximately 600 to 700 new cases a year in the U.S. And that small number, there's very little interest from the pharmaceutical company to make new drugs.

SNOW: That's why the unique antibody treatment Liam receives is entirely funded by philanthropy. But this holiday season, hope for Liam and other kids with neuroblastoma comes in three unlikely flavors, chocolate chip, citrus shortbread, and snicker doodle.

WITT: We are in the process of baking 96,000.

SNOW: Liam's mom, Gretchen Witt, is running a massive bake sale. Her goal, raise $250,000 toward a new and advanced version of 3F8, the treatment Liam currently receives.

It's all part of a larger effort by a group of neuroblastoma parents, they're determined to raise the $2 million needed to get the new 3F8 treatment into the early stages of production and testing. It's a fight Witt says has changed everything.

WITT: There's not a time when one of my children doesn't hold my hand or say my name or ask for a kiss that I don't appreciate it and recognize it in the moment.

Ready, set...

SNOW: This holiday season Gretchen Witt is baking not just for fun or to feed others, but for life itself, the life her son is fighting for with every growing moment.

Mary Snow, CNN, New York.


ROMANS: Wow. Witt has received a lot of celebrity support from big names in the food industry like Emeril Lagasse and Bobby Flay. Sally Sampson donated the cookie recipes.

VELSHI: Well, for more information, visit The deadline for ordering those cookies is December 15th.

Well, thanks for joining us for this edition of YOUR $$$$$. You can catch Christine later today at 6:00 p.m. Eastern on "LOU DOBBS THIS WEEK."

ROMANS: And 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.