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Anderson Cooper 360 Degrees

Dow Rallies on Word of Geithner's Possible Appointment; The Clinton Factor; The First School

Aired November 21, 2008 - 23:00   ET

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


ANDERSON COOPER, CNN ANCHOR: Tonight, breaking news and half a trillion dollars; the stunning financial impact of Barack Obama's reported choice for treasury security; Wall Street jubilation, that was the result. The Dow following up on yesterday's massive sell-off by rising nearly 500 points today, almost all of it on word that the president-elect has settled on Timothy Geithner, president of the New York Federal Reserve. The formal announcement could come as early as Monday; the news, breaking all evening.
New developments as well on the Hillary Clinton state department job and along with state national security advisor, commerce, even where the girls will be going to school; we're talking about all of it tonight in the hour ahead.

We start with CNN's Ed Henry, hard at work tonight -- Ed.

ED HENRY, CNN WHITE HOUSE CORRESPONDENT: Good evening, Anderson. You're right.

We start with Tim Geithner. What Obama aides say is that there has been a bit of a personal chemistry developing between he and the president-elect. They're both 47 years old, young and on the rise; but more important than chemistry is confidence, confidence in the markets. We saw the Dow go up today on the news that Geithner is going to be picked likely early next week and that's because he's a known quantity on Wall Street; he's been running the New York Fed. And what the Obama team is saying privately is they realize there is a bit of a leadership vacuum right now.

As this international financial crisis has been deepening, you have President Bush as a lame duck, you have the treasury secretary Henry Paulson as a lame duck and under fire for his management of these various these bailouts and what-not. And Barack Obama has been saying, "Look, there's only one president at a time. I don't have the authority to take over yet."

So there's a gap here; there's a leadership vacuum. And normally, you put your national security team up front first but instead the Obama team has decided to put up the financial security team first. And that's why we're expecting as early as Monday to see Tim Geithner and other key economic advisers team rolled out. They know that -- the Obama team -- that they got elected on the economy trying to fix it, do something about it and that's why they want to put their team out there first next week to try and instill some confidence in the markets - Anderson. COOPER: Well, Ed, after weeks of leaks and questions, we're now hearing reports that Senator Hillary Clinton will accept the secretary of state department post.

HENRY: That's right. What key Obama aides are saying is that this is finally on track and it's going to come after Thanksgiving. They're going to do the economic stuff first but then they'll get to the national security team. And the bottom line is that the key potential hurdles from Bill Clinton's charitable activities, his presidential library, his paid speeches and the like; that's been cleared.

They had lawyers working furiously behind the scenes from both sides, figuring that out. The Obama team says they're satisfied. They plan on moving forward on this after Thanksgiving. All the signals from the Clinton camp are it's not a done deal but it's close -- Anderson.

COOPER: All right. Ed, stick around. We've got a lot more to talk about, about Geithner, the markets and what it all means for the economy, also for your wallet.

Suze Orman is going to be with us tonight. She's going to be answering your questions live on the phone. We'll give you the number in a moment; we'll also take your e-mails.

First though, the "Raw Politics" of a secretary of state Clinton, who you will remember, took some pretty tough shots at Barack Obama during the primary on foreign policy issues. More on that from Tom Foreman.

TOM FOREMAN, CNN CORESPONDENT: Anderson, the depth of Hillary Clinton's foreign affairs experience was hotly debated during the campaign. Apparently her resume held up well enough to convince one of her strongest critics, Barack Obama.

(BEGIN VIDEOTAPE)

FOREMAN: Her eight years as First Lady opened critical doors for her education and top level foreign policy as her husband dealt with Somalia, Bosnia, Northern Ireland, the Middle East. Witnesses disagree on how many meetings she attended or how involved she was and some dispute her accomplishments.

Nevertheless, she lays claim to a good bit. In Northern Ireland, she says she helped bring Catholics and Protestants together. In Kosovo, she says she helped open the border for refugees fleeing the fighting. And in China, she spoke out forcefully about women's rights.

SEN. HILLARY CLINTON, (D) NEW YORK: Human rights are women's rights and women's rights are human rights once and for all.

UNIDENTIFIED MALE: It's 3:00 a.m. and your children are safe and asleep. Who do you want answering the phone?

FOREMAN: Still, during the campaign, some of the most pointed exchanges over foreign policy were between Senators Clinton and Obama. She suggested he was naive and not ready for that call in the night. His fans skewered her for saying incorrectly that she came under sniper fire during one trip to Bosnia and he hinted she was padding her resume.

BARACK OBAMA, PRESIDENT-ELECT OF THE UNITED STATES: She's yet to cite what experience, in fact, prepares her for that 3:00 phone call.

FOREMAN: Now, however, both see good in a partnership.

JEANN CUMMINGS, THE POLITICO: She's a high profile woman, that's a good thing for his new team to bring in. Plus, I think that she has the chops to go out there and to speak to the world.

FOREMAN: Senator Clinton has expanded her experience in her eight years in the senate particularly through her work on the armed services committee. She's been to Afghanistan, Iraq, Pakistan, many countries and no doubt she will get to go to many more as madam secretary -- Anderson.

(END VIDEOTAPE)

COOPER: Tom, thanks. Let's talk strategy now.

Ed Henry rejoins us; also the "New York Times" Marcus Mabry and CNN senior political analyst, David Gergen, who pretty much called it last night saying Mr. Obama needed to act and act fast.

David, there have been so many conflicting reports, at least, about what's been going on behind the scenes. Are you surprised that it finally appears to be a done deal with Hillary Clinton?

DAVID GERGEN, CNN SENIOR POLITICAL ANALYST: No, I'm not, Anderson. We've been talking now for several days that it was likely to happen.

They had to work through all those different financial receipts for Bill Clinton to make sure that there were going to be no embarrassments; that they could live with everything. She had to, as one of her aides was saying today, she had to sort of think about it and let it settle for a while. But I think they're very close.

And Anderson, the other point tonight is that the rumored and the news -- it is pretty hard choice to be national security advisor is an extraordinarily capable person as well, the former commandant of the Marine Corps, four star Jim Jones, very highly regarded, tough. He'll be big enough to handle.

When you have all-stars on the national security team you need a big person in that NSC job because you're the person that coordinates or you're the honest broker among them. And to get former commandant of the Marine Corps who is so well respected, knows Afghanistan well, knows Iraq, independent minded and a close friend of John McCain.

COOPER: Interesting. We're going to talk more with our panel ahead.

You can weigh in as well. There's a live chat happening now at ac360.com as there is every night. Also check out our live web cast during the break. Right now, it's floor crew Friday, Erica is off. Our floor crew has taken over; you can only watch it during the commercial breaks at ac360.com. After the break, what Hillary Clinton brings to the world stage, but also who she brings, the Bill Clinton factor. A look at their relationship and how it has changed yet again with this decision.

Later, a look at Sasha and Malia Obama's new school; we'll show you why they picked it and which other White House kids have gone there.

And Suze Orman is with us tonight. She's going to be live, taking your calls, answering your questions for the markets all over the place and the economy on the ropes. The number, dial 877-648-3639; that's 877-648-3639 or go ac360.com and send an e-mail and follow the link. We'll be right back.

(COMMERCIAL BREAK)

COOPER: Timothy Geithner and Hillary Clinton, two sources close to the transition calling him on track for the treasury and one inside source telling us the process is moving forward to make her secretary of state.

More now on our "Strategy Session" with Ed Henry, David Gergen and Marcus Mabry.

So Ed, Bob Woodward was quoted today by a blog, fishbowl.com, as saying that the Obama camp must be quote "Smoking something if they think that they're going to be able to control the Clintons;" his argument being, look this is a couple who's used to doing what they want when they want. Are there any Obama aides who share that concern?

HENRY: There were some that were concerned about bringing her back into the fold. Look, there's two ways of looking at this. On the positive side, Barack Obama by bringing in all these heavy weights, like Clinton, like General Jones, expected to come in and also the leading choice we hear for commerce secretary is Bill Richardson, another heavyweight in politics who ran against Obama for president. The positive side of that is he seems comfortable in his own skin, willing to bring in an all-star team, as David said, unlike President Bush who's faced criticism that he was sort of afraid to have divergent opinions in his cabinet, that he just wanted yes people, this shows maturity on the president-elect's part that he wants to bring in all these heavyweights.

But on the negative side, you're right. It might not just be a team of rivals, it could be a team of egos. And how do you keep all those people in check, especially with the Clintons; it's not just Secretary Clinton potentially but former President Clinton as well -- Anderson.

COOPER: Marcus, some are questioning whether Obama and Clinton's kind of rocky past, especially during this company, is going to get in the way of forming a tight relationship that's probably necessary between a president and secretary of state. Do you buy that?

MARCUS MABRY, INTERNATIONAL BUSINESS EDITOR, NEW YORK TIMES: I don't think it will. As Ed was saying, it really is a measure of the maturity and the confidence of the president-elect. We saw with George Bush exactly the opposite. The only person in his cabinet who's kind of more famous than the president when he took office was Colin Powell, his secretary of state. What we saw was that the secretary of state was actually shunned and there was some resentment among the Bushies about the stature of the secretary of state.

I think in this administration what we're seeing is a sign that a nation faced with a magnificent problems and president-elect Obama believes he needs a very strong team to go out there and tackle those problems. It's a good sign right now.

I don't know if it's going to come to fruition or not as far as its ability to work together but it means he is a strong leader and he has confidence on bringing together people with strong opinions and strong egos.

COOPER: David, what does it mean about her future though, she can't be involved in partisan politics as secretary of state, she can't fund raise, can't campaign. Is her future political career over?

GERGEN: I think that she's effectively out of the running for 2012. I don't think that she can challenge Barack Obama in a set of primaries in 2012. She could potentially come back at the end of another four years if that worked out.

The important thing here, yes, there is a risk that they will not get along. There's a risk whenever you put a group of heavyweights into the cabinet. George W. Bush when he got that roster of heavyweights, he never forged it into an effective team.

That's the test of leadership for Barack Obama. Can he make this a team that pulls together in the same direction? But he certainly has put together a roster of all-stars.

And I do think this. That with Hillary Clinton and Barack Obama, the dynamics of the relationship, the psychological dynamics have changed since there was time it looked like he needed her to win for the presidency; turned out he won it without her. That puts him, now that he's president, in a much stronger position psychologically.

My hunch is that even though there is a risk, my hunch is that given the fact that they share the same destiny now that they're actually going to develop a very close working relationship. I think the surprise is going to be on the up side, the surprise is going to be that they become better partners than anybody imagines.

MABRY: I think David is right. And I think if you look at -- we have not faced the foreign policy changes we face now since Franklin Roosevelt in World War II. I think you need strong personalities and I think it says a lot the fact that we have an administration that's going to have these people in it.

COOPER: Ed, what does all this mean for Joe Biden?

HENRY: That's a good question. He may be looking like the odd man out. He was brought in to the fold because of his foreign policy credentials, the idea that he would have a large portfolio and would sort of check a box on the resume that Barack Obama didn't have.

Now, bringing Hillary Clinton into that space, she is an international rock star in her own light. And now she's going to be the chief diplomat all around the world. That doesn't give Joe Biden a lot of room to run, especially if you bring in General Jim Jones as well; you have a four star retired general in the National Security Council Staff.

In fact, I'm being told that that's one of the reasons why General Jones has not signed on quite yet. He's still negotiating this with the president-elect because Joe Biden doesn't necessarily want him to have that much power. This is something that still has to be worked out. Joe Biden might feel like the odd-man-out here -- Anderson.

COOPER: And David Gergen, what about Bill Clinton in all this? Obviously he's got a huge international portfolio, a huge international presence. You can't, I guess, talk about her without talking about him.

GERGEN: I think that's right. I think it's going to be tricky; it's going to be worked out week to week. There are people on Hillary's team who worried about Bill all during the campaign as you well know.

I think this. Bill Clinton has shown enormous loyalty to his wife and her professional life. The fact he's willing to give up all this income, give up a lot of gifts to the Clinton Foundation, the Clinton Global Initiative is so near and dear to him, he will continue to build that. But he's going to be doing it.

He has been saying recently that we sort of flipped. She used to work in the non-profit sector and I worked in the government, now she's working in the government and I'm working in the non-profit sector. I think Bill Clinton will continue to do a lot of good in the world and over time maybe they can even use him in some of their diplomatic efforts. I think they're going to have to wait on that and let her get settled in before they try very much of that.

MABRY: I think they're really going to need that marine commandant in the national security adviser role because that is the role of gate keeper to the president. That's the person -- that's a role where Condi Rice actually fell down on the job keeping the secretary of defense, Rumsfeld in her case and secretary of state Colin Powell in the first bush term in line. You need somebody who's strong who's going to be able to do that.

COOPER: We're going to leave it there.

Marcus Mabry, Ed Henry, David Gergen thanks.

More now on the Bill Clinton factor. Let's look at him.

Bill Clinton, as David mentioned is her greatest cheerleader, but at times he's also been her greatest liability and they've been married now for 33 years.

For much of the time, she stood by him. Now the roles have changed, especially with this new appointment. Take a look at their relationship up close.

(BEGIN VIDEOTAPE)

COOPER: A new chapter is about to begin for her, for them and after years of defending her husband and sacrificing her political ambitions for his, the roles have dramatically changed.

HILARY ROSEN, HUFFINGTONPOST.COM: I think that Bill Clinton would do anything that Hillary Clinton asked. This is really a partnership.

COOPER: The partnership was first formed at Yale. Soon afterwards, Hillary forfeited her aspirations for him.

Did it surprise you when she decided rather than to become a trial lawyer in Washington, to go to Arkansas?

BETSY EBELING, HILLARY CLINTON'S FRIEND: Oh, yeah. When she called me to say she was going to go to Arkansas to see if this really going to work. I remember thinking, "Arkansas, exactly where is it; it's one of those A states somewhere out there."

COOPER: As Bill's political career rose in Arkansas, she remained by his side, determined to see him succeed.

GERGEN: Whatever else you may say about this relationship, I think they had both been deeply loyal to each other in that sense.

COOPER: That loyalty has been tested numerous times. The rumors of infidelity hounded him during the 1992 presidential race and she fought back.

H. CLINTON: I'm not signature here as some little woman standing by my man like Tammy Wynette. I'm sitting here because I love him and I respect him.

COOPER: Then at the White House, the lowest point.

BILL CLINTON, FORMER PRESIDENT OF THE UNITED STATES: I did not have sexual relations with that woman.

COOPER: But the affair with Monica Lewinsky did not destroy their relationship or her trail blazing ways as First Lady, although her sweeping health care plans were crushed, she made the job her own.

LISA CAPUTO, FORMER PRESS SECRETARY OF HILLARY CLINTON: Hillary Clinton never takes the chips when they're down. It's always if the chips are down, how do we pick them back up and start moving forward again?

COOPER: After Washington, the Clintons moved to New York and that's when the tables began to turn. She made a name for herself; first as senator, then as a shrewd and determined presidential candidate.

H. CLINTON: Let me tell you something, when it comes to finishing the fight, Rocky and I have a lot in common. I never quit.

COOPER: She lost the race of course but in the process gained a new identity and new respect.

GERGEN: Before the campaign, she was, to some extent, seen as an extension of her husband. After the campaign, she seemed very much as a heavyweight in her own right.

COOPER: In her own right and in her own way. For the ultimate power couple the roles have been changed and with it, their relationship.

(END VIDEOTAPE)

COOPER: Fascinating. Your calls coming ahead with Suze Orman; the number, 877-648-3639. She'll answer your questions; anything you want about the economy, about your money.

Also the latest on Attorney General Mukasey who collapsed at a dinner last night; what doctors are looking for? That's the video of him just about pass out. What, if anything, they uncovered today?

And later, the Obama girls' new school; safe to say a big change from their current one. But they'll have some big names pals there if they'd like and we'll tell you who when "360" continues.

(COMMERCIAL BREAK)

COOPER: All right. We're going to be talking money with Suze Orman tonight. She's going to be here live in a few moments to take your calls and your e-mails. The number 877-648-3639 or go to ac360.com to click on the link for the e-mails.

But first, Tom Foreman has a "360 Bulletin" -- Tom.

FOREMAN: Thank you Anderson.

Attorney General Michael Mukasey was back at work today after collapsing during a speech last night here in Washington.

(VIDEO CLIP OF MICHAEL MUKASEY COLLAPSING)

FOREMAN: Scary stuff there. The 67-year-old AG was rushed to a hospital. After a complete work up doctors ruled out a stroke or heart attack and they say he just fainted.

Without explaining why an Arizona prosecutor is seeking to drop one of two first-degree murder charges against an 8-year-old boy accused of fatally shooting his father and another man. The motion filed today would lift the murder charge in the death of the boy's father.

In an emergency session today, the Nebraska State Senate overhauled its Safe Haven Law. Now, only newborns may be left at a hospital without their parents being prosecuted. The old law didn't specify and age limit and since it went into effect in September, 35 children, most of them 10 or older have been dumped by their parents.

And Verizon says it has fired the employees who breached Barack Obama's cell phone records. The company would not say how many people were involved but described the motivation for cracking the cell phone as idle curiosity; that's not something you can do with the president- elect.

COOPER: If that's all it takes to break the cell phone records, imagine someone who's determined to do it and not just idly curious.

FOREMAN: They're going to have to tighten up that security a bit, I'm afraid.

COOPER: Yeah, I hope so.

The naming of a new treasury secretary hit Wall Street like a shot of adrenaline today. We'll tell you more about who this man is and what he's going to do. Ali Velshi and David Gergen join me live for that.

Also ahead, are you nervous about managing your money in a meltdown, Suze Orman will be here, taking your calls. Again the number 877-648- 3639.

And the suspense is over, Sasha and Malia Obama have settled on a new school. They have a long roster of famous alumni from 1600 Pennsylvania Avenue. We'll tell you all about it when we continue.

(COMMERCIAL BREAK)

COOPER: You can see how the Dow skyrocketed today on reports that Tim Geithner is Obama's pick for secretary of treasury. By the closing bell, the Dow is up nearly 500 points.

Geithner is the same age as Obama, 47, currently heads up the New York Federal Reserve. He's well-known on the Street and to our panelists: CNN senior business correspondent Ali Velshi and CNN senior political analyst and former presidential advisor, David Gergen.

So Ali, what do we know about Tim Geithner that would create this kind of reaction in the market?

ALI VELSHI, CNN SENIOR BUSINESS CORRESPONDENT: Well, I think some portion of the reaction that we got is that we have a treasury secretary and another portion is that it is Tim Geithner. About 24 hours ago, David Gergen was saying right here on this show, that the priority at this point has to be given to picking a treasury secretary.

As you said, he's the president of the Federal Reserve Bank of New York, he's 47, he's a former treasury official under Bill Clinton. And he's really been the voice of the Federal Reserve with respect to Wall Street. He was involved in all those deals AIG and Lehman and he knows what's going on, there's no learning curve at all for Tim Geithner.

But at this point, what needed to happen is that Obama had to signal some sense of leadership on the economy and that's what's happened here and the market has reacted very positively to it.

COOPER: David, do you think it was the auto -- I mean we were talking about this last night that we need decisions now. Do you think it was the auto situation that tipped the hand? GERGEN: We now know that they were already moving along with Tim Geithner but the last two days when it has been apparent I think that there has been a leadership vacuum in Washington; that somebody needed to step in. That Barack Obama needed to take action, they did accelerate this.

And I think it was not an accident that the word leaked today. I think they really wanted to stop the slide in the markets. Ali has been talking about this now for a couple of days. If they'd had a third straight day of the bad market going into the weekend, it would have induced a lot of panic.

I think they were smart to get it out there now and next week they can go with a formal announcement. And beyond that, as Ali said, they picked a man really with a stellar reputation.

I happen to be a Larry Summers fan. But Larry will be the first to tell you, this is a very high class appointment, someone who is at a young age of 47, relatively young age has established over the last years as career civil servant an excellent reputation.

I can tell you, back in the Clinton days, both Bob Ruben and Larry Summers used to tell me, get to know Tim Geithner, he's a rising star. He's going to make a real difference in the world. Get to know him.

And Paul Volcker was the fellow who headed up the group that selected him to run the New York Fed. He has great credentials. He's going to be up against huge problems.

COOPER: No doubt about that.

Ali, Paulson who's the current treasury secretary has said that he doesn't want to spend any more of the bail out money until the Obama administration takes over. Now Geithner's officially being named on Monday, as we're all expecting. What does that do for the economy?

VELSHI: Well, what it does is allows Henry Paulson to have somebody who he can have these discussions with or at least somebody who can track what's going on. Tim Geithner can start to get a team in place at the treasury so that they're ready go to go.

But more importantly, there are major, major issues he's going to have to confront as soon as the inauguration takes place, the auto bailout. The fact that there's $350 billion left to spend of the federal bailout. The fact that we will have lost close to two million jobs if not more by inauguration day. He has got a few things he's got to start working ahead on.

And you know, to David's point, Larry Summers, it really came down to Larry Summers or Tim Geithner. And there is a lot of reporting tonight, including from the "New York Times" that Larry Summers may have some very important role in this administration, an economic role. So this might be a major advantage to this administration that might have the top two people in economic policy.

COOPER: Go ahead, David. GERGEN: There is a power vacuum.

I'm sorry. There is a power vacuum. It's an interesting question how soon Tim Geithner will leave the New York Fed because he has been one of the prime architects with Paulson and with Bernanke of this bailout effort. And so that seemed to be a cloud over his head at one point but then over time we've learned that he actually was the one who wanted to step in and save Lehman Brothers and he was overruled on that; it turned out that he was right.

He early on was blowing the whistle against lax regulation of these derivatives. That He is more anxious and, I think, much closer to the Obama point of view is to step in and save on housing, he's more of an interventionist as it's called.

He's a career civil servant but he seems to be very much on the same wave length. I think during this interim period, Anderson, he's going to be pushing, along with Obama in a quiet back scenes way for bridges out of this. They are not going to sit here the next 60 days doing nothing.

He has the capacity as does Obama to push things along with the Congress and with treasury department, possibly with the White House, with the auto makers. They need -- they can't wait 60 days and I think they'll move.

COOPER: All right, David Gergen, let's hope so. Ali Velshi, thanks again.

We're getting personal next. In a week in which Wall Street lost $1 trillion, some of it probably yours, where do you go for advice about how to manage what's left of your investment? How about one of the smartest financial advisors around? When we come back, Suze Orman is going to be taking your calls; 877-648-3639 is the number. 877-648- 3639.

She'll be here on the other side of this break.

(COMMERCIAL BREAK)

COOPER: We're facing the worst economic crisis since The Depression. So far this month employers have announced more than 110,000 job cuts and as we said, the Dow lost $1 trillion this week alone. Economists say brace for more bad news.

So how do you keep your job, your home, your money? What do you do with your investments? We're digging deeper tonight with Suze Orman. She's joining us live, personal finance expert host at NBC's "The Suze Orman Show."

Suze, thanks for being with us. I saw you mentioned yesterday that you actually bought stocks when it was low yesterday. This gets me to my first e-mail from a viewer.

Charla asks, "You mentioned to look for major companies to invest in that pay high yield dividends or exchange traded funds. Could you give us an example of a few of these types of investments so we could examine for ourselves?"

What do you recommend people invest in?

SUZE ORMAN, PERSONAL FINANCE ADVISOR: Well you know, as you look at many these companies, you have seen that they've gone down major companies. I'm not going to give names right now because every time I give a name, you'll run out and you'll buy it and then who knows what can happen.

You can actually look at companies that have gone from $40, $30, $20, $10 a share that are paying serious dividends, Anderson. They're paying close to nine percent in dividends right now.

One has to think about what do you do with money today? If you have safe money, you put it maybe in a money-market fund. You know that the feds are going to lower interest rates or so if the market has priced it in. And the fed funds rate is scheduled to go over the next months or so down to almost zero. That means interest rates on money market accounts and savings accounts are going to be non-existent.

What's wrong with if you have time on your side, ten years or longer, why not start dollar cost averaging at this point in time into these stocks that are paying high dividend yields at eight percent, nine percents, some of them. Even if they cut their dividend in half, you'll be down at four percent or five percent.

And when the market returns a few years from now, then you'll start to make some money so they're all around. There's like are 30, 40, 50 of them out there at this point in time, they're really quite easy to find.

COOPER: We have got Virginia on the phone from California. Virginia, what's your question for Suze?

VIRGINIA, CALLER FROM CALIFORNIA: Oh thank you.

My question is, my husband's company closed last year and we've been living off of his unemployment, my salary and credit cards. We now owe over $100,000 on our credit cards and our house is obviously worth a lot less than what we owe. Friends have suggested that we declare bankruptcy. Is that something we should do?

ORMAN: Here's the thing. Whether you should do it or you should not do it, the question really becomes are you going to have to do it? There is a rule and the rule goes like this. When you owe more money than you make, you are essentially bankrupt. Currently, all you're making is maybe a little bit of income and your unemployment.

$100,000 in credit card debt is an extraordinary amount of credit card debt. Your minimum payment on that credit card debt is it not is about $3,000 a month? If she's there? Maybe she's not there. That is a lot of money, so, yes. When you're in a situation like you're in, you're under water in your home, not working, $100,000 in credit card debt, you may really have to claim bankruptcy because you will not have another choice.

COOPER: William in Georgia has A question about small businesses, William.

WILLIAM, CALLER FROM GEORGIA: Hi, Suze.

My question is we hear a lot of talk of the auto industry being the backbone of our country and loans are very difficult to get for small businesses and unemployment is on the rise. I just don't hear any talk of the small businesses being the backbone and if the federal government plans to provide grants or loans to small guys like us trying to create jobs and build our business when it's impossible to get a loan to increase sales and really go after the dreams of just the average person in America.

ORMAN: You know, we always value the small business owner in America. It's a vital part of our economy. You are having the same problem consumers are having today, even if consumers have money to purchase goods, purchase a home or car, go to school, good luck getting loans today because the money is still frozen in many ways, and the credit card companies and lenders are very afraid to lend out money because they're afraid with unemployment on the rise that people will not have the money to pay back those loans.

You are in really the same situation as many people in the United States are. And as soon as we can get money to start flowing again to really where everybody's trusting one another in terms of they're going to be paid back, then I think you'll see, you'll be there to be able to be the backbone of the United States of America just like really I think small business people always have been.

COOPER: We have got an e-mail from Steve from Washington State.

"Should I lower my contributions to my 401(k) to the level that I would get the max company match and take the rest and invest myself?"

ORMAN: I've always said, Anderson on your show and all the other shows, I would only invest up to the point of a match in a 401(k) in good markets as well as bad markets because the investment choices within a 401(k) truthfully are very limited.

Mainly they have mutual funds and maybe your company stock. Beyond the match, if you have credit card debt, that's where the money should go first of all; eight month emergency fund then.

If you have money to put in a retirement account beyond the match, you're far better off doing a Roth IRA or a traditional IRA where you have many things you can diversify them on, individual bonds rather than just bond funds in a 401(k).

But here is where you can find individual stocks with high dividend yields or exchange traded funds with high dividend yields. It is right there where you want to be more than in a 401(k).

COOPER: All right, we're going to have more calls and more e-mails with Suze Orman right after the break. The number again, 877-648- 3639.

Also ahead, Sasha and Malia will be following in the footsteps of Chelsea Clinton and other VIP Washington kids when they arrive at their new school in January. We'll tell you where they're going and why, when we return.

(COMMERCIAL BREAK)

COOPER: We've got more calls with finance expert, Suze Orman, We're taking your calls and your e-mails. We've got Toby on the line with a question for Suze.

Toby, what's your question?

TOBY, CALLER: Hi, Suze.

I was wondering why, Tony Robbins said earlier on the show tonight that some of the stocks that were $70 and $80 just a few months ago are now down to $3 and some of them $5. They could bounce back. But last night, you said that we should probably stay away from those cheaper stocks.

ORMAN: Yeah. You know why. I really love Tony. Let's make sure that Tony is a financial expert more than just a coach to make sure people get to where they want to go in life. Everybody knows that once a stock goes under $5 a share, it becomes a very speculative stock.

I would be the first one to say I would really love for those stocks to bounce back, please remember a lot of those stocks are facing bankruptcy right now. The first stocks that go under during a bankruptcy is a common share of stock, which is what those stocks are.

There are different structures in companies whether it's a corporate bonds, preferred stocks and so forth, but given this type of an economy, if you want to take a flyer and see what happens, okay, but most people, there are good stocks that you can buy, solid stocks you can buy. And I would just be very, very careful.

And again, that's not to say that maybe if you bought it at $2 a share, that it might not be at $30 or $40 again one day, but you have to be very careful. Once a stock is under $5 a share, it is a very speculative stock.

COOPER: Deandra in California has a housing problem. Deandra what's your question?

DEANDRA, CALLER FROM CALIFORNIA: Yes. Hi, Suze.

I purchased my house for $189,000 five years ago and the house next door is selling for $89,000. I'm wondering what -- should I -- me and my wife, we're able to make the payment true enough but I don't think it's fair. Is there any way you know, can we re-buy this house or, you know --

ORMAN: Well, here's the thing. Yeah. This is what they're trying to deal with right now. What do you do when real estate has fallen as tremendously as it has? For those people, especially who are having problems making that mortgage payment, when they're under water? Again, hopefully we will have a situation where they will allow you to modify your loan.

They will allow you to decrease what you owe on these home loans, however, you currently aren't in financial trouble, you're paying your mortgage on time, so you will have a more difficult time getting a reduction if you'll be allowed to do at all, on your home loan as somebody who is in already serious trouble in paying their loan.

Is it fair? I am so sorry to say, it is not, sir, there is nothing any of us can do about that.

COOPER: Another e-mail from Tony; this one in California.

He says, "I'm 36, my retirement is a private IRA in mutual funds and it's down 30 percent since the collapse of our financial market. Should I continue to buy mutual funds on a monthly basis with my dollar cost average or should I buy stocks of good companies?"

ORMAN: You know, Tony, it depends how much money you're putting in. In an IRA, the maximum that you can put in is $5,000 if you're under 50, $6,000 a year if you're now 50 or older. That is not a lot of money to be able to buy individual stocks with.

When it's smaller amounts of money, you're far better off in an exchange traded fund or a no loan mutual fund; one without any commission on it whatsoever. Then individual stocks; when you're buying individual stocks, hopefully you have enough money to diversify so that you can buy at least ten stocks, 20 stocks. You really should never have more than four percent in just one position of an individual stock.

Depending on how much money you have, you might be better off in mutual funds than individual stocks. And if you're young and you have at least ten years or longer, preferably longer, until you need this money, yes, you should continue to put money in the stock market and dollar cost average. And again, it very well could go up, it could go down. I think over the long run, we're still going to head down lower.

COOPER: You think we're going to go lower?

ORMAN: I do, Anderson. I know we rallied today at 500 points and I know that we're all feeling good, good, good, the market's back. How many times just a month or so did we go up a thousand points in a day, then down, up, just because President-elect Obama is saying who he's putting into office. While we may feel hopeful about that; that still isn't an economic change and a salve of the problems that are going on in the United States today that have caused these markets to go down.

When I see gold going up five percent, six percent in one day like it did today as well, we have a dichotomy there. So I still want us to be careful because really, nothing has changed when you look at the stock market and you look at the economy.

COOPER: Sylvia in Ohio has a question. Sylvia as quick as you can, what's your question? SYLVIA, CALLER FROM OHIO: I happened to take out a loan a few years back. It basically was a loan shark disguising as a finance company. I wanted to know would it be wise for me to borrow from my 401(k) to pay these people off because right now, I'm only paying like pennies on the principle, the rest of it is going in interest and I'm a single income, so what do you think?

ORMAN: Here's the thing. It depends on the interest rate that you're paying. If you're in financial trouble, here's just what I want to say to you, please always remember that 401(k)s and retirement accounts are protected against bankruptcy so I'd have a very hard time at this point in time taking money from a 401(k) with the market so low to pay off anything right now. If there's any other way to get out of that loan, I would do so.

COOPER: Suze Orman, thank you so much. Appreciate your time tonight. A lot of good advice.

ORMAN: Any time, Anderson.

COOPER: Coming up next, a look at Sasha and Malia Obama's new school, the details, the tuition, the history, the sea of past students include a who's who of White House kids.

Also ahead Sarah Palin talking turkey and what her people are saying about that unfortunate photo op at a slaughter house. If you haven't seen the video yet believe me it is worth sticking around for.

(COMMERCIAL BREAK)

COOPER: The president-elect being a parent as he drops Sasha and Malia off at school, their school days in Chicago are soon going to be over. In just a few weeks the Obama daughters will be attending school not far from the White House.

We know now which one it is and why the next First Family thinks it's the best choice. As you'll see, it's a familiar setting for White House kids.

Joe Johns has more.

(BEGIN VIDEOTAPE)

JOE JOHNS, CNN CORRESPONDENT: They may not have chosen a dog yet or their White House bedrooms. But Malia and Sasha do know where they'll go to school. Here it is, Sidwell Friends founded in 1882 by a Quaker teacher as among the elite private schools in Washington.

SALLY QUINN, "WASHINGTON POST": Sidwell Friends is a Quaker school, first of all, and it's really infused with Quaker values; it's very much about peace and community. It's very progressive, has about 40 percent minority.

JOHNS: Michelle Obama's spokesperson says a number of great schools were considered. In the end, the Obamas selected the school that was the best fit for what their daughters need right now. What's so special about Sidwell?

There is the philosophy. Sidwell says its students and faculty are on a search for truth and the school follows a Quaker belief "that of God in each of us inspires shapes everything we do and inspires us to show kindness and respect toward one another and apply our talents in service to others."

BO LAUDER, PRINCIPAL, FRIENDS SEMINARY: I think it's a great fit for the Obama family because the school is a very rigorous academic place that places a lot of value on intellectual inquiry.

With Obama's position on war and his own commitment to hope and to the future, I think that he feels probably that the school will equip his children well for bringing about a better world.

JOHNS: And Obama often seems in tune with Quaker principles, seeking consensus with others, talking rather than fighting with opponents. And at least in the case of Iraq if not Afghanistan, opposing war even when the majority supports it.

The Obama girls aren't the only first family children who have opted for Sidwell.

QUINN: Chelsea Clinton went there. Al Gore, young Al Gore went there. The Nixon girls went there. Teddy Roosevelt's children went there. The Biden grandchildren go there. They're very, very good about security. They understand about that and they also understand about children who are in the public eye a lot.

JOHNS: Sidwell isn't cheap. For the lower school where Sasha will attend second grade, tuition is nearly $29,000 and more for middle school where Malia will be in fifth grade, but Sidwell can afford to ask top dollar.

QUINN: Sidwell is a happy school. The children who go there are children who really feel good about themselves at the end of the day, they're happy children. It can be a really magical place.

JOHNS: Joe Johns, CNN, Washington.

(END VIDEOTAPE)

COOPER: Looks like a very nice place, indeed.

Up next, a 360 Thanksgiving shot turkey Palin follow-up. Not sure that made sense. The governor speaking out about all the squawking over her turkey pardon with the turkey executions going on behind her. We'll have that.

(COMMERCIAL BREAK)

COOPER: Time now for our "Beat 360" winner, Tom, it's our daily challenge to viewers to come up with a caption better than the one that we can think of. So here is the photo for tonight. President-Elect Barack Obama stopped into a Chicago diner today, picked out a piece of pie. That's the photo.

Our staff winner is Jack who quipped, "I'm Barack Obama and I approved this pie."

I like that one.

Our viewer winner is Heather from Austin, Texas that said, "This is almost as hard as picking the family dog."

Heather, your "Beat 360" t-shirt is on the way. Congratulations, you can check out all the entries and play along Monday at our blog ac360.com.

And in our "Shot" tonight we're talking turkey again with Sarah Palin.

Tom, I'm sure you've seen this video. Her staff is quite unhappy about yesterday's problem in Wasilla.

Palin had just performed her first ever turkey pardon as governor sparing a turkey named, yes, Thanksgiving, from a holiday feast. Palin was talking unaware that a guy behind her was butchering some less fortunate turkeys behind her. And the turkey is still alive, it was being butchered, it's quite gruesome stuff.

Palin's spokesperson said today the governor had no idea what was going on. The cameraman ignored a request from one of her staffers not to include the bloody scene in the shot. The staffer said, quote, "We're unhappy about it and the station is not happy either, adding "This was an attempt to lighten up and do something non- controversial."

Didn't really work out.

FOREMAN: I don't remember this much coverage of Alaska governors in the past. I'm pretty sure the turkey pardoning last year, I don't remember that up there.

COOPER: Went off without a hitch, probably so.

Tom, thanks very much for filling in tonight.

That does it for this edition of "360." Thanks for watching.

"Larry King" starts right now. Have a great weekend. I'll see you on Monday.