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YOUR MONEY

What the Candidates Are Saying About the Economy and Your Stake in It; Places to Stash Your Cash; Turning Today's Political Memorabilia into Tomorrow's Investments

Aired February 3, 2008 - 15:00   ET

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


ALI VELSHI, CNN HOST: How Super Tuesday could change America's political landscape and the future of your cash.
CHRISTINE ROMANS, CNN HOST: Plus, why the job situation in this country just took a turn for the worse.

VELSHI: Why one author says your spending habits need to change.

ROMANS: We are ready to get started right after "Now in the News."

(NEWSBREAK)

VELSHI: Welcome to YOUR MONEY. Where we look at how the news of the week affects your wallet. I'm Ali Velshi.

ROMANS: And I'm Christine Romans. Coming up on today's program, what the candidates are saying about the economy and your stake in it.

VELSHI: We are going to have some ideas for places to stash your cash right now.

ROMANS: Plus, campaign's finance, learn how to turn yesterday's and today's political memorabilia into tomorrow's investments.

VELSHI: But first, the Fed again takes drastic action to sure up the economy. In just eight short days, the Federal Reserve slashed interest rates by 1.25 percent points. And we haven't seen that for before in a long time.

ROMANS: The Fed cited financial markets remain under considerable stress. Credit has tightened further for some businesses and households. There is a deepening of the housing contraction, and softening in labor markets. The Fed lowered that key interest rate to 3 percent. After the move, the president said there are uncertainties in this economy but he sees underlying strength.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: The signs of the economy are slowing. There is some uncertainty in the economy, but in the long run, you have to be confident about your economy. Our economy is flexible and resilient.

(END VIDEO CLIP) VELSHI: Meanwhile, the check from the government to boost the economy is a little closer to your mailbox. The House passed its version of the bill this week. The Senate is expected to vote early next week. So stay tuned for that.

ROMANS: This is what we learned about what's happening in this economy. As foreclosures skyrocket, homeownership rates are now falling for the first time in 20 years. The economy lost jobs in January, and economic growth in the final three months of 2007 slowed dramatically, that is the weakest growth in GDP as we call it for five years.

VELSHI: That is not to mention a rough go on the markets, for the first month of the year. The Nasdaq had the worst month in its entire history, dropping almost 10 percent. The Dow ended the month down a little less than 5 percent down. That was after 15-days of triple digit swings. Seven of those days the Dow shot up. Eight of them it tumbled.

ROMANS: OK, so the make or break Super Tuesday primary is just days away. The outcome could shape your race and the economy.

VELSHI: For a look at what is at stake for you financially on Super Tuesday, we are joined by Mary Jacoby of the "Wall Street Journal."

Mary, the economy has become the main part of the talk. One way or another is what the candidates are talking about right now. I just got off a week-long trip across the country talking to Americans about the economy. It is the number one concern, the concern of Americans. Are these candidates handling it well?

MARY JACOBY, "WALL STREET JOURNAL": Yes you are right it has become the main concern. Even a month ago, you weren't hearing so much about this on the campaign trail. This is an issue that will favor the Democrats. We are not in a general election right now. This is something that when there is turmoil in the domestic economy and people are feeling insecure; they generally turn to the Democrats for answers. We have between Hillary Clinton and Barack Obama not a lot of difference on this.

You would have to think that maybe Hillary would have the advantage, because she is experienced and she has been in positions longer than Barack Obama and especially is associated with the time of prosperity in the 1990s when her husband was president.

ROMANS: Mary, let's talk about what those two positions are. We will start with the Democrats; we will talk about Barack Obama and Hillary Clinton. How do their stimulus plans differ? How do their plans to goose the market and help the mortgage crises, how are they similar and how are they different?

JACOBY: It's interesting. Hillary Clinton proposed at first in the middle of January, a pretty modest stimulus program and then she had to reverse herself and come out with a larger one. Barack Obama has more than 250 million costs on his stimulus plan. It would put $250 in to the pockets of many people, even those who aren't income taxpayers. The Hillary Clinton has focused heavily on assistance to people who might lose their homes in the subprime foreclosure crisis and on energy heating assistance.

VELSHI: We saw numbers out last week that showed that in 2007; more than 400,000 Americans lost their homes to foreclosure. On the Republican side, John McCain is sort of almost playing up the fact that he doesn't think the economy is the strength. Mitt Romney is hammering away at the fact that he's a good businessman and a good manager. Those distinctions seem clearer on the Republican side than on the Democratic side?

JACOBY: Yes, I agree with you on that. I talked to one of McCain's advisers on the economy recently. They backed off some of the harsher comments that even President Bush backed the stimulus plan that would give us a tax rebate or money in people's pockets. This is something that Senator McCain has said we should be looking at monetary policy. We should look at tax cuts and monetary policy. We shouldn't interfere with a direct injection of money.

I am not sure how he is going to vote on that, because these votes are coming up after the Super Tuesday. They have backed off on that a bit. Mitt Romney has the advantage, I would think, over McCain on economic issues because of his background and he has been talking about it a lot more on the campaign trail than Senator McCain has.

ROMANS: Republicans in general focus much more on tax cuts and business incentives and that side of the equation rather than the unemployment benefits and the food stamps and that side of the equation. You can really see the difference in the parties about how they want to address what is happening in the economy and how do we avoid a recession.

JACOBY: That is what it is. It's a theoretical question right now. By the time any of these people are elected, the moment for action will be passed. So what we are talking about is a philosophical difference between the two parties on how to handle this.

VELSHI: Mary, good to talk to you. Thank you for joining us. Mary Jacoby is a reporter with the "Wall Street Journal."

ROMANS: OK, so many candidates, so many issues, lets lay it all on the line as far as the economy goes.

Senator Hillary Clinton is in favor of a 90-day moratorium on foreclosures. Housing fund to assist city and state economies hit hard by the mortgage meltdown. She is also proposing energy assistance for families facing sky high heating bills as Mary Jacoby just said.

VELSHI: Senator Barack Obama wants to establish a $10 billion fund to help people facing foreclosures. He is also pitching a $75 billion stimulus package and wants to eliminate the marriage penalty and extend the child tax credit.

ROMANS: And what are the Republicans talking about? Mitt Romney opposes a government bailout of the mortgage mess and wants mortgage companies to be held accountable on the subject of economic stimulus, he is proposing rolling back tax rates for all Americans and lowering the corporate tax rates.

VELSHI: Senator John McCain said he would consider greater federal assistance on the foreclosure issue but a government bailout should be the last resort. He proposes a stimulus package which would include retraining grants at community colleges as well as lowering the corporate tax rate.

Mike Huckabee is against the government bailout as well in the mortgage crises. He is proposing that lenders work with those that have borrowed to keep them from foreclosure. He also wants to abolish the IRS and move to a consumption tax or what they call a fair tax. He signed a pledge not to raise taxes. We have done some looking into that fair tax stuff on this show. It is not necessarily all it is cut out to be.

ROMANS: So consider that when you cast your vote. Consider your money when you cast your money. Up next on YOUR MONEY, the job market takes a hit. We will show you where you can find a job these days.

(COMMERCIAL BREAK)

ROMANS: The latest employment report out this week shows a surprise drop in jobs in January. The first time in four years we have lost jobs in this economy.

VELSHI: Employers trimmed payrolls last month, as you say the first time in four years. Jeff Joerres is the chairman and CEO of Manpower an employee services company, he joins us now to break this down for us. He makes a lot of sense out of making this make sense for all of our viewers.

Jeff, unemployment rates and large numbers like that don't matter to most people. Most people are worried about whether their job is going to be there and whether there is any chance of losing it. Tell us what this report tells you.

JEFF JOERRES, CEO, MANPOWER: Any time you get a report like the BLS Report which offers some good trend direction, you do have to break it down. There is no surprise in construction. If you break it down, the number of jobs lost in construction in the month of January were identical in the number of jobs in the service industry.

We are seeing some tradeoffs happening. We know there is softening in housing, residential, densely commercial. What we are still seeing from our clients and hearing from many people is they are still looking for people. We are definitely in an area where there is a lot of confusion and a conundrum between the talent you need and some industries and sectors that are in a little bit of trouble.

ROMANS: We don't know that if there is a recession or if there will be or if we will just have several quarters of just barely squeezing by, if you there is a recession, you are talking about overall job losses in the economy. And that will be for the first time we have seen in several years. Where can we expect there to be job growth if we see a recession where there is overall job loss?

JOERRES: Well, I think we would still see -- of course, every recession has a different personality, if you will. A lot depends on where the consumers are spending money. What we are seeing is we are still seeing good growth in some of the services areas.

ROMANS: What part of the services areas, health care, teaching, it can be flipping burgers, lots of different things?

JOERRES: Clearly, health care you are seeing it. You are still seeing it in, if you will, called hospitality and eating establishments. Entry level positions in companies are still happening. What you are not seeing is, as the demand drops for goods and services, you are starting to see and we have seen for some time now, there are 28,000 jobs lost in manufacturing. That's difficult on the environment of the labor market because those are typically higher paying jobs.

VELSHI: You know one of the things that we like to talk about here and we sometimes put up a map of where job growth is in different states and where unemployment rates are lower or higher than the national average. That sort of assumes the degree of mobility on the part of the worker.

When you have lost manufacturing jobs at a plant in a rural part of America, you can't necessarily up root your family and take them to another part of the country that's booming. If you can retrain like some of the presidential candidates are talking about, what would you suggest is an area to retrain into for long-term prospect?

JOERRES: Clearly, your spot on is the imbalance of where things are in Michigan is in a lot of trouble from an employment place. You can go two states over, and it is not as bad. If you are looking at retraining, you have to pick a spot that is going to retrain that's going to excite you.

When you are looking at health care, you are looking at professional services, some of the entry level journeyman positions which have been lost in this economy, the drafters, the electricians, these are great opportunities. It is unfortunately an 18 to 24-month training program that individuals have to go through.

ROMANS: Jeff Joerres of Manpower, thank you so much Jeff.

JOERRES: Thank you.

VELSHI: Jennifer Westhoven joins us now with the story of foreclosures and some big news we had this week.

JENNIFER WESTHOVEN, CNN CORRESPONDENT: These were some grim numbers. Foreclosures soared last year; more than 400,000 families and households lost their homes. December foreclosures were merely doubled compared to the same month a year ago. Filings for the year up 75 percent, California, Florida, Michigan, Nevada, they felt some of the worst levels of foreclosures. The effects of course have spread out all across the country. We are now at one out of every 100 homes in some state of foreclosures. That is a surprising number. And that of course can mean anything from getting that first letter that says you are three months behind in your payment all the way to repossession of your home.

ROMANS: The Treasury Department says there are some 4,000 new callers every day to its Hope Now Hotline. What the government is doing with lenders is for people that aren't already behind. So there is a lot of people trying to figure out where they kind of stand in all this.

VELSHI: What is the sense of whether this gets worse or better in 2008?

WESTHOVEN: We have got, it looks to me like, six to eight months of a lot of mortgages still resetting. That's a lot of people facing sharply higher mortgage payments. That's just the beginning of the foreclosure process. We could have a long pay to go.

ROMANS: We have these prime loans, these payment options and mortgage interest loans. That are prime loans, 2009 will be the big year for those.

ROMANS: We haven't even kind of dealt with that end yet.

VELSHI: Well the good news is, if you are an investor in Exxon Mobil, have you made some money in that?

ROMANS: Isn't that an interesting, two takes on the economy.

WESTHOVEN: What a tale of two cities. The headlines about rocketing oil prices, at one point, $100 a barrel. This is terrible news for drivers, it is frustrating for people who are struggling to make their mortgages, there are also having to pay more. But a bonanza for Exxon Mobil, the oil giant said it cleared more than $40 billion.

We don't say that much unless you are talking about the national debt. This is the most that any company that we know of, any publicly traded company has ever made in one year. It was a similar profit picture though for Chevron and Conaco (ph) they also ...

ROMANS: You have people in Congress who were like, this is why we are outraged when we go to the pump. Those are earnings that become political.

VELSHI: The question is what you can do with $40 billion. Apparently, you can just about buy Yahoo!.

ROMANS: There you go.

WESTHOVEN: With all that money, Microsoft wants to bring in this new weapon in its fight with Google. It is bidding about $45 billion to take over Yahoo! Microsoft wants to get much deeper. It wants to be a bigger player in Internet advertising. On Friday, Microsoft bid $31 a share. That's a 60 percent premium for Yahoo! stockholders. And boy did they need it, they have been suffering for a long time, Yahoo! stockholders, watching their money shrivel.

ROMANS: Yahoo? Stockholders just got kind of a birthday present.

VELSHI: Except that the government has said they would like to review this deal. Microsoft has a bit of a history about not having these things sail so smoothly between the approval processes.

WESTHOVEN: Yahoo! Management has firm opinions about how they feel about Microsoft. Do they have to take this bid? Are they going to some other media company and try to get a white knight to rescue them?

ROMANS: It's two different cultures, really.

VELSHI: Who would have thought five years ago that Microsoft would have been fighting off an on slot from Google? They are in different spaces but now I think we will look back at this as a real turning point in technology and how we deal with the Internet.

WESTHOVEN: I like the idea that people that use Google use it quickly. They search. People who tend to use Yahoo! They have an e- mail account. They stay there. They use it all the time. They are more stuck to that. In some ways, that be could be more of a revenue spending.

VELSHI: Jen, good to see you.

Coming up after the break, the best way for you to make money in a stock market likes this. Are there actually deals out there? I'm going to tell you how to find them.

(COMMERCIAL BREAK)

ROMANS: Wall Street had quite a wild January. The Nasdaq dropped almost 10 percent. It's worst January on record. I guess that means the Nasdaq is on sale.

VELSHI: The Dow didn't do as badly, but it lost nearly five percent. It wasn't a steady slide down. We saw 15 days of triple digit swings. The biggest one-day loss 370 points. The biggest one-day gain was 299 points and the biggest one day swing which was when the Fed cut the rates, 631 points.

ROMANS: That was crazy. If you have a 401(k) or an investment portfolio that includes stocks, you are probably watching those swings and feeling queasy about the market.

VELSHI: I feel bad about it because I'm often there doing reporting on it and I often feel like they should ignore me.

There are some good bargains out there. Our good friend, Doug Flynn, certified financial planner and co-founder of Flynn, Zito Capital Management is going to tell us where you can find them.

ROMANS: Don't run away right? VELSHI: No, I guess there is two ways to look at this. One is there are always deals. There is something that goes up. Very rarely where an entire market, where all stocks goes up and down. Two, some people shouldn't worry about it.

DOUG FLYNN, FLYNN, ZITO CAPITAL MANAGEMENT: No. This is the whole idea. If you look at the pricing level and the evaluation of stocks versus bonds, bonds are overpriced and stocks are under priced. In a 401(k) where you are not going to touch the money for 10 or 20 years, this would be a great time to add into it. It is very good if you are adding into it off your paycheck.

ROMANS: I know I sound like a broken record but if you had a good year in international stocks, it is time to bring that down and get your balance back to where you should be for your goals.

FLYNN: That's exactly right. Not just international, but also stocks versus bonds. You take a look at what your allocation is. A lot of people do have too much international. How much is too much, 25 or 30 percent. Some people have way in excess of that now. You have to look back to the U.S. and say, the U.S. relative to the international markets are also on sale.

VELSHI: At some point, it comes back. I always think it is an interesting indicator of all this investment we are seeing from other countries into U.S. companies. There is some sense with some companies, boy what a bargain, let's get in and buy.

FLYNN: Absolutely. Then, you are going to have things work themselves out as they always do. I always think if you don't need your money for five or 10 years, when do you want to be buying it. You want to be buying it when things are off a little bit. It is very hard to do. You hear it from people. They want to make sure they are doing the right thing. But a long term goal that is the place to be is in the market.

ROMANS: I have to ask you about this subprime, which some people are calling subcrime. We heard they are expecting more losses as banks started really tally up what is wrong. We heard from a drug company that has exposure to bad CDPs . How can we be sure that all of that stuff isn't going to keep coming down and if I go and buy some index funds right now that things are going to be 10 percent cheaper in two months.

FLYNN: That's the argument for not putting it all in today. Whether you take your refund that you are going to get or rebate from the government and invest it or you take money you are saving every week off your check into the market, you probably don't want to just drop it in. It may go down a little bit before it does go up.

I have to be honest with you. I think when you look at the valuations of bonds; they are already priced in as we are already in a deep recession. The same thing with stocks. That has already been filtered into the market. Buying bonds is almost more risky than buying stocks right now. Because they build that into pricing structure of it. Equities long-term when we aren't in such a deep recession, and we come out of it, that's when you are going to make your money.

VELSHI: Their are sectors that do well in downturns. Are there places where investors can go without getting into individual stocks? Particular sectors that you would recommend at this point?

FLYNN: Well as always, it is not just stocks and bonds. You should have had some exposures into commodities and into gold. People let those things become a large part of their portfolio. A five to 10 percent exposure in each of those would be very well. You would be down a lot less; in fact you would be up a lot this month.

VELSHI: There is no panic in Doug Flynn's voice. Thank you for being with us. It is always a pleasure to see our good friend, Doug.

ROMANS: All right. Coming up, why some of your favorite stores are slashing prices and why one author says you need to change your spending habits right now.

(COMMERCIAL BREAK)

(NEWSBREAK)

VELSHI: Welcome back to YOUR MONEY.

Super Tuesday is just a couple of days away. We are all over the issues and what they mean to your wallet. We are going to break it all down coming up.

ROMANS: But first in headlines, Wal-Mart says it is slashing its prices by up to 30 percent.

VELSHI: Are these sales enough to get consumers to spend? Alina Cho has more.

(BEGIN VIDEOTAPE)

ALINA CHO, CNN CORRESPONDENT (voice-over): Wal-Mart has its own economic stimulus plan, rolling back prices from everything to food, to clothing, to flat screen TV's. Thousands of products up to 30 percent off. Why now? The Super Bowl.

TRACY FERSCHWEILER, WAL-MART STORE MANAGER: Now is when the customers need the savings. This is a huge week for us it is Super Bowl and preparation. This is the eighth biggest sales week of the year.

CHO: Veronica McNeil has two kids and has recently lost her job. Her husband is an iron worker and the family is feeling the pinch.

VERONICA MCNEIL, SHOPPER: If I am here to buy baby stuff and I see a TV at a good price, I will grab it.

CHO: With rising gas and home heating oil prices and Americans loosing their homes, money is tight. Retailers know it.

MITCHELL SPEISER, TELSEY ADVISORY GROUP: The consumer is, needless to say, very soft, very weak right now. Value does drive transactions.

CHO: In Seattle, even Starbucks is offering coffee for a buck.

Fast food restaurants are all pushing their dollar items too.

McDonald's dollar menus might seem like a draw but the company's stock is actually down 20 percent from last month's all-time high. The company's CEO says its strategy is recession resistant but not recession proof. Wal-Mart hopes bargain prices on things like flat panel TVs will be too much to resist.

Why buy a TV?

UNIDENTIFIED MALE: Because I am a Giants fan and I need the big TV for the Giants game.

CHO: Alina Cho, CNN, New York.

(END VIDEOTAPE)

ROMANS: You already have a big TV.

VELSHI: I have always thought that buying a TV for Super Bowl is a bit of a scam.

ROMANS: Retailers believe that some kind of stimulus is needed to encourage consumers to go out and buy those TVs.

VELSHI: Is increasing consumption the thing that is going to save this country. Best selling author and entrepreneur Robert Kiyosaki doesn't necessarily think so. He joins us from Las Vegas.

ROBERT KIYOSAKI, AUTHOR, "RICH DAD, POOR DAD:" I believe so. I think so. Wal-Mart is just going to give the money to China, which is a big part of the problem.

VELSHI: It doesn't necessarily create a job in America but it is not really getting back into the economy and helping us.

KIYOSAKI: It helps some things. There are two kinds of people in the world, consumers and investors. The consumers will get poor and the investors will get richer.

ROMANS: Robert, that is the great thing that I wanted to ask you about. We keep hearing how you have to get out and spend this money so that we can get the economy back on its feet. I keep thinking, I don't really care about the economy if I have a problem in my own financial situation. As an investor and consumer, I should be taking care of my own finances first, right?

KIYOSAKI: If you invest first and consume second, you will do well. If you consume and never invest, you will be in bad shape.

VELSHI: Robert, some Americans are so heavily in debt, pay interest on that debt. If you have this windfall, let's call it $1,000, do you invest it or do you pay your date down? KIYOSAKI: If you mismanage your money, nothing is going to help. I always invest first, consume second. If debt is at 18 percent, obviously, pay off debt.

ROMANS: You want to learn how to invest so that you don't have to be fighting about living within your means. You want to expand your means by doing some good investing.

KIYOSAKI: Right. I don't like those guys who say give up your lattes and big screen TV. I think what makes people depressed are, to tell them to live below your means. People who consume, they always will be forced to live below their means. That's the problem.

ROMANS: You know Robert even if you are an hourly worker out there listening to this program thinking, I am barely making it week to week, there is a way you can put $25 a week or $25 a month away and start investing in ETF stocks. There are ways to make sure you get in there, right?

KIYOSAKI: Right now, I would say the ETF on silver is the biggest bargain I have seen in years. This is 1987 all over again. The stock market crash and the savings loan went out of business in 1987. The real estate market went down the tubes. That's the best time to get rich. The average person thinks it is the worst time because they are consumers not investors. Right now, investors are saying, thank you. This is the best time.

ROMANS: So your call is the ETF on silver. Robert Kiyosaki thank you so much, "Rich Dad, Poor Dad" is the book. A lot of followers out there. Thank you for joining us.

KIYOSAKI: Thank you.

VELSHI: Coming up next on YOUR MONEY, the Senate is set to vote on its version of the stimulus package this week. Find out if that means a bigger rebate check in your pocket. Our panel is going to break it down for you. Stay with us, you don't want to miss this. You are watching YOUR MONEY.

(COMMERCIAL BREAK)

ROMANS: Having this incredible week about politics, about money, about the markets, about the Fed. Joining us now in New York, personal finance editor Gerri Willis and "AMERICAN MORNING's" Greg Hunter joining us from Las Vegas.

I want to talk about what is going on here. I want to start with you, Gerri, first with the Fed and the stimulus. Are we seeing Washington getting it all together to help us all get over what's going to be a recession?

GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: They are doing their best. As usual, government doesn't have every tool in the world to fix things. You know what? Sometimes the economy is bigger than the government. Here is what's going on. We have a lot of Fed rate cuts out there working in the economy. Unfortunately, mortgage rates actually perked up a little bit. So that's not great news. I have to tell you, there are opportunities out there for people and I'm sure we are going to get to talk to them about them in just a moment.

VELSHI: Greg, you are definitely when it comes to the economy and where things are going, you have a glass that's half empty and it seems to be getting a little lower. Tell me what you think Americans should be concerned about right now? Is this situation at the bottom or are we going to be worse to come?

GREG HUNTER, CNN CORRESPONDENT: I apply my consumer investigative skills to the economy. Here are the headlines. The banks are in trouble. They just had Bank of America had a 95 percent loss in profit. How about Wachovia, 98 percent loss in profit.

Let me make that completely clear to the average guy, that's like a guy making $1,000 every two weeks coming home to his wife and saying, hey, honey, my pay has been cut down to $50 every two weeks or in Wachovia's case, $20 every two weeks. The banks are in trouble.

We had a point and a quarter rate cut, $150 billion stimulus package in eight days proposed. The rate cut, 1.25 percent. The package is coming. I am with Robert Kiyosaki on hey listen this stimulus package is ridiculous. These are people that can't manage their money anyway.

So, we should be building infrastructure and putting money into technology and super batteries that be power electric cars. Things like that. We are getting no return on $150 billion investment.

WILLIS: Greg, you know this is creating some opportunity for consumers out there. I know the banks are suffering. They are really desperate for capital. They are starting to raise rates on short-term CD's right now. You can get one to three month CD right now that pays as much as a three or five. I know that is probably not your favorite tool for making money over the long-term. It is creating places where people can go to try to make some money.

ROMANS: You are talking about the banks; I hate to say it there are the smart money on Wall Street isn't making money on buying the banks after they got slammed. Everyone is worried there is more coming. S&Ps there is going to be more losses. But those ...

HUNTER: The smart money on Wall Street, aren't these the guys that has lost billions and billions, back in December when we were talking about whether or not we were going to go into recession, 60 billion by banks in financial, 60 billion, last I checked, capital formation doesn't start with losing 60 billion. Now, we are up to $130 billion loss. That's big money.

VELSHI: You follow this all very closely. Nobody follows the housing sector more closely than you do. Is there going to be a buying opportunity sometime in the next few months in the housing market or are you still sitting this one out? WILLIS: Sometimes in our lifetime, there will be a buying opportunity. I think it will shake out differently in different markets. I was in Detroit not to long ago. Median house price there $39,000. Is that going to turn around? Not soon. There are other markets where this will turnaround much more quickly.

I know there are a lot of people out there sitting on cash who are thinking, now is the time to buy my vacation home. I am going to start looking. This will, at some point, turn around.

Ali, you were just interviewing somebody the other day who was saying it feels like the bottom to me in this economy.

VELSHI: That is always the tough one to guess. We are going to take a break and continue our conversation with our panel with Gerri and Greg. We will talk a little bit about how this should influence or help you make a decision when it comes to Super Tuesday.

Stay with us. You are watching YOUR MONEY, we are coming right back.

(COMMERCIAL BREAK)

VELSHI: We are back with Gerri Willis and Greg Hunter. Because you know all of us together follow so closely what is going on in the markets and in business and real estate and everything that is going on. We wanted to have a good conversation with these two about what is happening. Gerri is right here in New York and Greg Hunter is in Las Vegas.

ROMANS: I wanted to ask you guys about the president, you know the president on Friday said that there is a troubling sign in the most recent job numbers, that there are serious signs that the economy is weakening. It was just December 17th when the president first said there were storm clouds in the economy. Are we starting to get a realization from the administration and from Washington that there is something brewing here?

WILLIS: I think it's a statement of the obvious. Don't you? I mean we all know ...

ROMANS: Are they late?

WILLIS: Yes. We all know the economy is weakening. So many people presume it's a recession. It is all about what do I do next to shore up my financial self to make sure that my wallet is safe. I don't think that comes as a surprise to anybody. Greg, chime in here.

VELSHI: Gerri is great at giving advice and tips on how you might look at these situations. I want to pin you on the wall on this. You have been calling this for a long time. You have been talking about how much it is getting worse. What do you do if you have money? What do you do about it, Greg?

HUNTER: The first thing you want to do is you want to try to limit your risk. Robert Shiller, who I talked to back in October, said, hey, listen, the housing crisis is the first inning of a nine inning ballgame. This is going to go on for a while, the housing crises. That's a big driver of the economy. When people aren't building houses, that means a lot of paychecks, durable goods aren't being bought. Illegal immigrant label that doesn't show up on the pay roles is a factor there.

Big ticket items aren't being refinanced. The housing sector is huge. The first thing you want to do is brace yourself for what could be a bad economy. If I am wrong, you will always have the money safe. Pay down your debt. Get out of any kind of debt and don't get into any big ticket items and be careful about what you are doing with your money.

ROMANS: There is the economy and what everybody should do to help the economy. There is also your own personal economy and what you should do with that. And Gerri has been very, very good about giving people advice on that. Let me ask you all about the presidential candidates and on the campaign trail. Economy number one issue, it is likely to stay that way. Whether it is a shallow recession or no recession, whether it is something worse. Are we hearing good, solid results on the campaign trail, Gerri?

WILLIS: Results, you mean are they giving good economic advice? It's very predictable. The Republicans are saying the way out is to cut taxes. The Democrats are saying, the way out is to spend money. It is not too surprising there. Interesting, the two parties have come together for this economic stimulus plan. Some of the benefits aren't even being talked about, what could happen with jumbo mortgages that those rates could come down under the terms of this plan. This could be very big for folks out there.

I agree with Greg, you have to be careful, watch your wallet, save some money. Savings rates, returns right now for savings vehicles, they are in the toilet. They are terrible with this rate- cutting. You still have to invest in the stock market.

HUNTER: I am not really a big believer in that at this point. The reason why is that you can't answer this question. When you buy home for the long-term -- in this part of the business cycle, we are about where we are in 2000. Where are we? Also, the S&P 500 includes companies like Exxon Mobil just made 40 billion dollars and we are still at about where we were in 2000, maybe a little higher. Put in the loss of value of the dollar and we not doing so hot there.

Also, nobody on the campaign trail is talking about the tar baby. We just added almost a trillion dollars to the national debt ceiling; we are at $10 trillion. Nobody wants to talk about it. What they are talking about is this ridiculous $150 billion stimulus package to give people who aren't handling their money properly any way. We ought to be investing this in infrastructure and technology that pays dividends to the country.

VELSHI: I'm going to take you lead on that one. Greg Hunter thank you for being with us. Gerri Willis thank you for being with us. We will continue this discussion all the way through our talk about politics and the economy. As Greg says, forget tax cuts and economic stimulus for a second. The real money could just be a mouse click away.

ROMANS: That is right, the real money in politics. The rarest political memorabilia can be worth thousands of dollars. So even if your favorite candidate is long gone there is still hope for the souvenirs you might have picked up along the way.

(BEGIN VIDEOTAPE)

ROMANS (voice-over): It won't be just party nominations at stake on Super Tuesday. The value for political collectibles hangs in the balance as well. Mark Warda who has been selling political memorabilia of all kinds for 40 years.

MARK WARDA: You could buy buttons today for two or three dollars each if that is what your budget is or you could buy buttons for $5,000 or $10,000.

ROMANS: With so many choices out there, Warda says look for items that are limited edition and colorful.

WARDA: If you look for things that are unusual. Not just a name button that says Nixon on it or McCain or Obama. If it is a simple button that they made a million of, there are going to be millions of them around 30 years from now. If it is a small group that made something or a little union made something in your town that might be worth something someday.

ROMANS: The saying goes to the victor's go the spoils but Warda says the rarest and hardest to find collectibles are from the losers.

WARDA: You might want to take a chance and buy up the Dole buttons you can find.

(END VIDEOTAPE)

ROMANS: Warda says the most popular items are buttons and postcards. Those are the ones that can go up to thousands of dollars. T-shirts on the other hand, they have little to no value to collectors. It sounds like you might be better off hanging on to the Michael Dukakis or Fred Thompson for when you are doing your hip-hop ads.

VELSHI: They are always good for sleep shirts. What about the hot sauce?

ROMANS: That was an interesting one too. It is not a button or postcard. There are a lot of new things out there. Now, you have Barack Obama, Mitt Romney. Now, remember, our experts say that the losers whose stuff is worth more.

VELSHI: If you are the president, there will be lots of stuff about you.

ROMANS: Think if this is the first Tuesday with all those different states. Think of how much stuff there is out there to collect. VELSHI: There is always a way to make money. Coming up on YOUR MONEY, the most important events that could affect your wallet next week. We will tell you about those so stay with us.

(COMMERCIAL BREAK)

VELSHI: All right. We have a lot coming up in Washington and on Wall Street next week.

ROMANS: That's right; Carrie Lee is here to tell us what we need to pay attention to. Something is going on Tuesday.

CARRIE LEE, CNN CORRESPONDENT: We have all been talking about Super Tuesday. I want to point out that the economy, front and center for most Americans now. With Friday's weak jobs report, let me show you a Clinton ad to show you how crucial this issue is. There is an ad, it is called free-fall. This is to give you one example of what the candidates are doing.

It opens with a sky diver plummeting to earth. It mentions foreclosures, interest rates, health care costs and then all of the sudden, the sky diver opens his parachute, the music starts and people clap and it says the person you can depend upon to fix our economy and future and they show Hillary Clinton. It was very dramatic; it gives you a sense of how important the economy is for voters this time around.

VELSHI: I came back from Chicago. I was in Chicago this week because of the Fed rate. I think I just got the one window you could fly out of Chicago without bad weather. If you are in Chicago, there is something you can do indoors.

LEE: That's right. The auto show. Even if you are not there, this year, for the first time, they had six web cams set up. This opens Wednesday for the media. The Chicago Auto Show. A couple of new things coming out, first of all. Ford has something called the transit connect. This is a tiny little compact kind of truck van sort of thing. It is a European commercial van, there is a look at it, it is coming to the U.S. Hummer has a mid-size pickup truck called the 3t (ph) Hummer sales have been down. I think they were down 22 percent last year.

VELSHI: It could be that fuel economy thing.

ROMANS: A little celebration going on in Louisiana.

VELSHI: They have a crazy Tuesday thing going on.

LEE: Not Super Tuesday but fat Tuesday. The big question is, how successful is Mardi Gras going to be? We know thinks the third Mardi Gras since hurricane Katrina. Usually, they get hundreds of thousands of dollars in revenue. But last official study 2000 they made over a billion dollars, last year, estimated 800,000. So far, the estimates are that 90 percent of the hotels are booked. About 72 percent of the restaurants have reopened since Katrina. So hopefully we will see some positive numbers. ROMANS: If you are not in New Orleans watching Wolf Blitzer's beard grow while he is on the air for hours and hours. You can be watching ...

VELSHI: Even though the economy has weakened, in New Orleans with the dollar where it has been for the last year, some Americans are going to New Orleans as opposed to overseas.

LEE: That is true. There are all these specials on Bourbon Street.

ROMANS: Carrie Lee, thank you Carrie.

LEE: Sure.

VELSHI: Thank you for joining us for this edition of YOUR MONEY. Make sure you stick with the best political team in television for unprecedented coverage as Christine says on Super Tuesday.

ROMANS: Forty hours, starting Tuesday morning at 6:00 am with "AMERICAN MORNING" and Ali, you will be there right?

VELSHI: I will and make sure to watch Christine later today at 7:00 p.m. Eastern on "LOU DOBBS THIS WEEK."

ROMANS: Ali is there every weekday morning on "AMERICAN MORNING" and he will be there Tuesday. We will see you back here next week.

VELSHI: Saturday at 1:00, Sunday at 3:00.

(COMMERCIAL BREAK)

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