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Woman Charged in Child's Death; More Details on the Piracy Situation

Aired April 11, 2009 - 16:00   ET

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


MELISSA LONG, CNN ANCHOR: In his weekly address, the president stressed the need for a global response to the recession. He says that it's a crisis that recognizes no borders. Now, economists in a latest "Wall Street Journal" survey are also sounding an optimistic note. They predict the recession will end in September but they don't expect unemployment to start going down until 2010.

So, is there some light at the end of the tunnel? Here's senior White House correspondent Ed Henry.

(BEGIN VIDEOTAPE)

ED HENRY, CNN SENIOR WHITE HOUSE CORRESPONDENT (voice-over): After weeks of facing allegations he was talking the economy down, President Obama is now offering his most optimistic assessment yet.

PRES. BARACK OBAMA, UNITED STATES: What you're starting to see is glimmers of hope across the economy. Now, we have always been very cautious about prognosticating, and that's not going to change just because it's Easter. The economy is still under severe stress, and obviously during these holidays we have to keep in mind that whatever we do, ultimately has to translate into economic growth and jobs and rising incomes for the American people.

HENRY: A striking change in tone from even just a week ago in London at the G-20 summit when the president was still emphasizing the negative.

OBAMA: The global economy is contracting. Trade is shrinking. Unemployment is rising. The international finance system is nearly frozen.

HENRY: Since then, the stock market has shown modest gains, and then Friday the "Wall Street Journal's" latest forecasting survey came out revealing economists now expect the recession to end in September.

OBAMA: We're starting to see progress, and if we stick with it, if we don't flinch in the face of some difficulties, then I feel absolutely convinced that we are going to get this economy back on track.

HENRY: The president cited a boost from infrastructure projects in his stimulus plan. And touted a 20 percent increase last month alone in the small business administration's largest loan program.

OBAMA: What that means is small businesses are starting to get money that allows them to keep their doors open, make payroll, and that is going to contribute to overall economic growth as well as help make sure that people are able to keep their jobs.

(END VIDEOTAPE)

LONG: That was the president this week.

Now job losses in these tight budgets we're all under are prompting many people to change the way we shop. Some are turning to consignment stores in order to save some cash and make some substantial cash. Here's CNN's Don Lemon.

(BEGIN VIDEOTAPE)

DON LEMON, CNN CORRESPONDENT (voice-over): Check out the pile of clothing in Kate Gorimshteym's arms.

KATE GORIMSHTEYM, CONSIGNOR: I have some stuff for consignment.

UNIDENTIFIED FEMALE: OK. Perfect. You can get -

LEMON: It could end up paying off for her big time. She hopes.

UNIDENTIFIED FEMALE: Have you shopped here before?

GORIMSHTEYM: No I haven't shopped here before but I haven't consigned.

LEMON: The Alexis Suitcase Consignment Shop in suburban Atlanta and thousands of shops like it across the country are a godsend for Gorimshteym and millions of Americans who in this economy are finding alternative ways to dress well and make a little cash in the process.

GORIMSHTEYM: They are probably going to sell for about $25 that I would get, and there are some that maybe $10 apiece. Every little bit helps.

LEMON: Not everything here is second hand. Some struggling local boutique owners bring new merchandise to consign to owner Brenna Thompson who can sell just about anything, including big expensive name brands like Coach, Prada, Louis Vuitton to name a few.

UNIDENTIFIED FEMALE: Louis Vuitton is one of the most popular. I can't keep these bags in.

LEMON: And consignors know, new clothing and brand names add value.

GORIMSHTEYM: You can also donate them, but since those are really good pieces I thought I can make some money off them and for everybody it's pretty tough out there now because of the economy.

LEMON: Tough, and big retailers know it. In February, Macy's announced 7,000 layoffs. And in March, posted a sales drop of 9.2 percent. Also in March, Nordstrom's sales dropped 13.5 percent. Abercrombie and Fitch, a whopping 34 percent.

LEMON (on camera): Here's what's paying off for consignment shops like Alexis Suitcase and Stephan's Vintage here in Atlanta. Low overhead. Many new clothing retailers who bet on bulk and big inventories are now struggling to unload it.

Professor Charles Goetz says it all adds up to a reversal of fortune for consignment owners.

CHARLES GOETZ, PROF. GOIZUETA BUSINESS SCHOOL: In a recession even though demand goes down, supply, competitors actually drop much faster. So that if you start a business in bad times, by the time the economy starts to turn around, you're actually positioned well.

UNIDENTIFIED FEMALE: We've doubled every year for the last two years in our sales volume. Now we are opening a second store. So we're also going to double in size.

LEMON: Another consignment shop to add to 20,000 others across the country. $8 billion in sales a year. And helping customers save.

GORIMSHTEYM: I can buy more clothes or I can spend the money that I didn't spend on full price items somewhere else like groceries or bills. Or maybe go on vacation.

LEMON: A real life lesson in getting the most for your money.

(END VIDEOTAPE)

LONG: Don Lemon, you just got back from shopping. Boy, oh boy! How much did you spend?

LEMON: No, no, this is not what I bought but I did just come back from doing the story, talking to people.

LONG: What did you buy me?

LEMON: I didn't buy you anything. I wanted to show you some of the things you can get like this. I got this at a consignment shop. Vintage Blinco(ph) which I'm sure could be a couple of hundred dollars.

LONG: How much?

LEMON: I think I paid 40 bucks for it. Same thing for this, vintage wine, this liquor.

LONG: Do you want me to drink this? No, thanks. Maybe a little bit later.

LEMON: No, it's got bourbon in there. No, some of the things honestly that I wear on the air, we started - a producer approached me. And I said you know what I buy from consignment and vintage stores all the time. I got this, like suits that I actually wear on the air. I'm kind of giving away my secret here. This is a suit like from the 1950s. Check out the lining. All I did was took it to the tailor, got it cleaned.

LONG: OK. What kind of price tag on it?

LEMON: I think I paid maybe $100 for it. LONG: But that's vintage. You do not have to spend $100.

LEMON: No, you don't but I mean -

LONG: This is higher-end consignment. All of this other stuff that I wear, even these jackets like some that I wear on the air, people are calling in and say, hey, Don, that's really nice, where did you get that? I'm like I got it from a consignment shop. I think was probably maybe $30.

LONG: And you can also make money by going to a consignment shop.

LEMON: Yes.

LONG: If you have something in your closet, you're doing some spring cleaning, perhaps somebody else would want to wear it but if you don't want to wear it -

LEMON: You know what I do as well, I do the same thing for furniture especially like mid century, modern, I like that sort of furniture from the '60s and the 50's, even the '70s, and I'll go and get a really nice piece and you know, have it cleaned up and it looks new. People go, oh, that's great. You know, I haven't seen that before. Everything always new again.

LONG: All this hour we're talking about spend it versus save it. And you can you save a lot of money by taking your own clothes, taking your own furniture to consignment stores as well, and then maybe going to buy yourself a new piece if you want a new piece at retail.

LEMON: Especially people like you who know it and other people who take care of their things. You know, I take care of my clothing. So I want to ever get rid of it, and take it to a consignment shop, it's really not that worn.

LONG: And you can get -

LEMON: The value, yes -

LONG: Some unique pieces, too. One of my favorite cherish purses is something I found when I was 17 years old at a consignment store.

LEMON: Had one of my dad's suits in there too. It's not on consignment but it's old. It's from the 50s and so I keep it and you know, maybe I'll put it in a consignment store one day and make money.

LONG: And as you pointed out in your piece, we are seeing consignment stores expanding now.

LEMON: Expanding. $8 billion a year in business and 20,000 stores across the country, and growing.

LONG: Real opportunities to save.

LEMON: Yes.

LONG: And spend and get some really unique clothing and touchkey(ph)for your house.

LEMON: You'll have to come over. I'll show you some of the stuff, the furniture I got as well.

LONG: All right. Looking forward to it. Thanks, Don.

LEMON: Let me get the stuff out of your way.

LONG: OK. We're talking this hour about spending or saving. We've been soliciting your comments, soliciting your questions, sometimes suggestions as well. Let's check in with Josh Levs to find out what you have found. Do you have any overarching themes?

JOSH LEVS, CNN CORRESPONDENT: You know what, you guys you got me trying to go through my wardrobe in my head to see if I've gotten anything at a consignment shop.

LONG: I'm sure.

LEVS: Maybe. Didn't Sarah Palin - she did. During the campaign when there was an uproar about her clothes. She says she gets most of her clothes at a consignment shop. OK. Back to the point. Sorry about that. Let's zoom in here, I tell you what's going on. You know, throughout this hour we want to get as many of your questions answered as we can. You got two major ways to contact us, e-mail us and Facebook.

Let's zoom in on the board. I'm going to show you some of the things that we've been getting, Melissa check this out. I pulled together some of the e-mails that we have here. A lot of people asking us about credit cards. They're saying spending is a great idea but you know what as long as my credit cards are charging me so incredibly much in interest, I have to take all my spare money each month and toss it there. We're going to get you some advice on that front.

Also over here on my Facebook page, josh levs CNN, a lot of people sending us questions this way as well. We'll monitor it throughout the hour. I want to show you an interesting thing. Andy Smith said. He wrote us and said, you know what some purchases are actually when you think about it, investments. So one thing we're going to look at this hour is what is a purchase that's also an investment and stimulates the economy. You get that two-in-one. Meanwhile we're going to keep an eye on I-reports from i-reports.com as well. So keep all these things coming in throughout the hour. And Melissa, we're going to get as many answers on the air as we possibly can.

LONG: And it's not only questions as well because some of our viewers have great suggestions. Some people have become very frugal. And we want to hear those tips as well.

LEVS: Yes. They have some really interesting ideas about saving money. Also, we have a whole deal section set up here that I'm going to show you in a little bit. We'll give you some ideas, some websites that you might not have heard about, ways to travel and save money, ways to go shopping in addition to consignment. Lots of ways to save money throughout this hour. LONG: Save it or spend it. That's what we're talking about this hour. Thanks, Josh.

LEVS: You got it.

LONG: And now is now the time to buy a vehicle? There are some great deals. We're going to talk to a car expert and find out if this is the ideal time to buy.

(COMMERCIAL BREAK)

LONG: Car owners are coming up with SOME pretty creative ways to try to save in this recession. In California, lease swaps are becoming more and more popular. There's a website in fact called leasetrader.com that allows owners to trade their car lease online. The company says they traded more than 40,000 leases last year alone.

(BEGIN VIDEO CLIP)

BRUCE DOOLE, TOOK OVER CAR LEASE: Usually you have to put in anywhere from $4,000 to $8,000 down to even get the lease in the first place.

JOHN LOVETT, SOLD LEASE ONLINE: I've run my credit since. It is completely off. It is a paid lease. It's done.

(END VIDEO CLIP)

LONG: Experts say the site works because buyers are much more flexible during a recession.

Maybe you're still too worried about the economy to try to make the jump and buy a new vehicle. Lauren Fix is a nationally recognized auto expert known as a car coach. She is in New York where the New York Auto Show is under way. And Lauren joins us now live. Lauren, nice to see you.

LAUREN FIX, AUTOMOTIVE ANALYST: Good to see you, too.

LONG: I'm curious right now.

FIX: A little windy out here but we have some great cars.

LONG: Looking forward to learning more about them. First and foremost, what are people most interested in right now and are they going to get the deals on what they really want?

FIX: Well, it's funny, I mean, the U.S. government thinks that we all want electric cars. But the truth is we want cars that fit our needs and what that might be and hybrid if you live in the bulk of the country. If you live here in New York, it makes sense to have a vehicle like that, but if you live in Omaha or Buffalo or St. Louis, it may not be the right choice for you. So that's why I brought some alternative vehicles that you can choose from, showing you that not just the Europeans but the domestic manufacturers are starting to figure it out and bring you cars that you want.

LONG: All right. Let's start with the white car. Yes. That's the higher end that you're going to show us.

FIX: And Audi. Right. This is an Audi Q7. It is an alternative to what we thing of as hybrid. It is diesel. Now turbo diesel injected is something that is now available in all 50 states. It is something that consumers are wanting because hybrid vehicles you can't tow anything. However with a turbo diesel you can tow anything. No more black city icky loud cars. These vehicles give a phenomenal fuel economy. You'll actually save money, budget with gasoline. Even though the cost of the car is a little bit more, you'll save it in the big picture.

LONG: What's that bright car behind you?

FIX: Oh, this car is great. This is a Ford Fiesta. And Ford will be bringing this vehicle to our country. It is a world class platform that will replace the focus. This car gets about 30 miles in a gallon, possibly more once the actual production of the vehicle comes into place. What's also nice about the Ford Fiesta is it's going to be between $13,000 and $16,000. An amazing car to drive. A lot of fun. If you drove an old Ford Fiesta back in the '80s, like I had one. This is an awesome car. I drove it yesterday. It's really fun.

LONG: Low sticker price. And also a car like that you can park in a big city.

FIX: Yes. Exactly. And the other thing is for those of us who don't live in the big city - and I live in Buffalo. We don't have the big city but I love fun cars to drive. General Motors has the Camaro. Now we remember the Camaro from a while ago. They took it off the market, it is finally back. It really has some nice lines like the old '69 Camaro lines. It picked up some nice Q lines but the great thing is 26 miles to a gallon. It's around $26,000. Available in a six cylinder and a v-8. This has just been launched. You should be seeing these at your dealership. General motors will do very well with this. They already have a back order on the Camaro. So that will tell you people do want to buy American cars. They build safe and they build smart cars that people want.

LONG: Let me ask you about that. For people that are concerned about buying a car from a troubled automaker, should they be worried about getting parts down the road, or about getting a car from a company that could potentially go for bankruptcy or file for bankruptcy?

FIX: Right. Well, the bankruptcy is not a dissolve - first off, Ford is actually doing better of all the three U.S. manufacturers. There's zero concern there. General Motors and Chrysler, GM is paring down their brand lines. They have to keep product for 10 years. The government claims they're going to back the warranty, as I have said, well I hope we don't have to wait 90 to 120 days to get my money like I do on everything else with the government. But there is going to be backing when it comes to the warranties with Chrysler as well. They also came out showing the new Jeep Grand Cherokee. So there's a lot of new vehicles coming out. They wouldn't be building prototypes and production cars if they thought they were going to be going out of business. So, worst case scenario if the companies dissolve and return back to us as better, stronger companies.

LONG: Lauren, I want to bring in my colleague, Josh Levs, he has been talking to our viewers. And I know he has some questions from viewers right now.

LEVS: You hear me out there, right? You got me, Lauren.

FIX: I can barely hear you.

LEVS: OK. Let me just try to project it here. We're getting a great question from one of our viewers who's asking us a very simple question - is it possible to refinance an auto loan? Give us the basic 101 on financing and refinancing for cars.

FIX: OK. First, if you own a car and you are not leasing it, you can refinance it but you have to be careful that you don't finance more than the value of the vehicle. That's how we got in trouble to begin with. People had vehicles they were upside down which means you owed more on that vehicle than it was worth. And the worst thing you can do is refinance something you already owe more than the car is worth.

In that case, sometimes it is better to sell the car. You may have to figure out other ways to do that, sell the car and find something that's more within your budget. If you have a lease, you cannot refinance it, you have to keep that lease. To get out after lease is very expensive and one of the things you want to do is try to sell that lease off because it will never be to your advantage.

LEVS: And let me give you a follow-up, it's also a question that we got on Facebook, maybe there is a way to say this. If you have a car loan right now, you still owe several thousand dollars but you're really interested in one of the deals out there, should you wait to pay off your loan first or should you just go buy a new car right now and then pay it off steadily after that?

FIX: That's an excellent question. I have had a lot of people ask me that. It depends where you are in the loan. If you own that vehicle for three years and maybe you've got two more years to go, you're right in that window that makes sense to look for another vehicle. If you just bought the car 16 months ago and you're thinking it's now is the time to do it, it is not. You'll get hurt very badly whether it comes to selling that car or trading it in. Certain cars have more value. If you got something smaller like a Ford Fusion, or something like that you'll be OK in trading it in.

If you try to trade in an SUV or a truck, the dealers don't want them either unless they're diesel powered. So it's something that you have to keep in mind when you're looking to refinance or to purchase a new vehicle. There are some phenomenal deals, up to $4,000 off on some of the vehicles that are out there. So make sure to do your homework on the internet.

LEVS: Well, thanks to Lila and David for those questions. And Lauren, thanks for the great advice. Great stuff.

LONG: Lauren, thank you so much. And Lauren Fix, again the car coach. She hails from Buffalo, New York. Fellow Buffalo girl. Nice to see you on the streets of New York. Lauren, thanks so much for your great advice. Appreciate it.

FIX: Thank you.

LONG: And coming up, we're going to continue to talk about your money. Should you spend it, should you save it right now, should you be refinancing your mortgage. And if you're contemplating it, what do you need to know. We're going to talk about that, coming up.

(COMMERCIAL BREAK)

LONG: When you think about retail therapy, is now the time to spend? Should you feel comfortable? Right now spending? Joining us with some answers now to your financial questions is Katie Benner of "Fortune" magazine. Katie, we're curious what you'd tell people about spending right now. Because a lot of people are starting to - did you lose your mic? You there? OK. A lot of people are starting to get those tax refunds back and are considering whether they should save it or spend it. What would you say?

KATIE BENNER, "FORTUNE" MAGAZINE: I'm so sorry, I can't hear a word you're saying.

LONG: Well, that's OK. We'll work to get that connected for her. Or to get the earpiece connected. In the meantime, let me check in with my colleague Josh Levs who's been looking for your questions, looking for your suggestions as well. I know we're going to be talking about mortgages coming up in addition to whether or not we should be spending or saving.

LEVS: We are. Let me quickly tell you, because some people are just joining us. We got two major ways to send us your questions, e-mail us weekends@cnn.com or my Facebook page, josh levs cnn. We're going to be hearing your questions up next about mortgages. A lot of people, Melissa, asking us whether it is worth refinancing really. They think it sounds all great and exciting, then they go and apply for it and they find out that the closing costs alone are more than they make in four, five, six months. So a lot of people wanting some specific advice about that. We're going to get that in just a minute.

LONG: Well, not only closing costs but also with the market trends the last couple to few years, some people have lost so much equity in their homes that they can't actually refinance.

LEVS: These are all the kind of things we're going to get to and some answers too. Coming right up.

(COMMERCIAL BREAK)

LONG: Here are some of the stories happening right now. The American ship seized by pirates in the Indian Ocean, this week has docked in Kenya without its captain. He's still being held hostage in a lifeboat now said to be some 20 miles from the coastline of Somalia. A military official says the pirates on the lifeboat shot at U.S. sailors during an attempt to rescue him earlier today. The sailors did not return fire.

A California woman facing child murder charges. Melissa Huckaby is accused in the death of an eight-year-old neighbor. The victim's body was found in Huckaby's suitcase in an irrigation pond earlier this week. Police say they have no theory or motive in this case.

A tornado that hit Murfreesboro, Tennessee killed a mother and her baby. Dozens of people were injured. At least 250 homes damaged or even destroyed. The same storm system is blamed for one death in South Carolina.

Our special hour continues, the message this week from the White House to homeowners - take advantage of a record low rates on fixed mortgages.

(BEGIN VIDEO CLIP)

PRES. BARACK OBAMA, UNITED STATES: We have now seen some extraordinary jumps in the rate of mortgage refinancings. And everybody here represents families who have saved hundreds of dollars a month, thousands of dollars a year, in some cases, and that's money directly in their pocket.

(END VIDEO CLIP)

LONG: So here's a look at what mortgage rates are doing right now. Right now the average rate on a 30-year fixed is 4.87. That's up a little from last week but it's still much lower than it was a year ago at this point.

President Obama says the increase in refinancing is a sign the federal programs to help homeowners are in fact working. Let's bring in Bob Moulton, he is the president of the Americana Mortgage Group. He is in New York. Nice to see you.

BOB MOULTON, AMERICANA MORTGAGE GROUP PRESIDENT: Nice to see you, too.

LONG: Thanks for joining us on this Saturday.

MOULTON: Thank you.

LONG: So now is the time to refinance, is that correct?

MOULTON: There's been no time better than now. Right now rates are at record lows. We have homeowners refinancing in the 4s, anywhere from 4.38% with points or 4.78. The whole mortgage industry right now is experiencing phenomenal volume. I haven't seen this in 20 years. But the volume is helping homeowners save money as long as the house comes in at the value that they think they have and as long as they qualify for the loan.

LONG: Let me ask you about that value. Because people who have bought a home recently may have lost too much equity to refinance. Correct? MOULTON: Correct. I mean, what homeowners should do is before they start the refinance process, go on to zillow.com, go on to propertyshark or go on to the tax assessor's office to see what the home is worth. A lot of time homeowners think their house is worth more than other houses in the area simply because they paid a certain amount or put a lot of money into the house. But realistically speaking the value of the house is going to be affected by what someone sold their house for that lives in their community or within a certain radius of their home.

LONG: So, Bob, what are you supposed to do? You call up the company that currently holds the mortgage, see if they're willing to negotiate, and then you call others and comparison shop essentially. Right?

MOULTON: Well, you should really - I mean, when you say call others, I mean, that's key. Because this industry is really driven by rates. When people shop for a mortgage they'll go down to the local penny saver or they go to the yellow pages or some local newspaper and they'll put together a little matrix and they'll start writing down what rates they are quoted. Really what they need to start to think about is the same way you shop for a cardiologist or a veterinarian or an accountant, is ask someone, a family member, a friend or a business associate, who's closed a mortgage with a reputable loan officer and ask them if they had a pleasurable experience.

Start there. Because that loan officer needs to understand how to navigate through this whole new mortgage maze. Things are different right now.

LONG: The key there, reputable. How do you know if you're dealing with somebody who is reputable?

MOULTON: Well what's happened in the last couple of years is we've established a national database called the MLO registration, mortgage loan originator registration. In order to be a participant in this industry, you have to go through a credit background. You have to go through a criminal background, and you need to go past the standards that are now established by the banking department.

Loan officers also need to have continuing education. This is all new within the last two to three years and it is a way to make sure that this person is going to be representing the interests of the homeowner in the transaction.

LONG: Bob, we have questions from viewers. I want to turn to my colleague Josh Levs, he's been communicating with some of them.

LEVS: Yes we have and Bob, thanks a lot for doing this. I know you named a few Web sites. Just now, I want to tell all our viewers that by the end of the hour, we'll get all the names of these Web sites and we'll post them all in one place where you can find them. So you'll get the information that way.

Now Bob, I want to zoom in on the board. I want to tell you something. This is the most popular question we've had today. I'm using one example here. This one says in the end, "I cannot afford the expensive closing cost. I'm already so stretched financially. If I take this refinance, I feel like I'm starting back from zero. Is refinance really worth it?" That's from Jonathan in New Jersey.

Bob, a lot of people saying they keep hearing people on the news say refinance, sounds so fantastic. They can't afford the closing costs. Should they still pursue this and how can they get around those very expensive charges?

MOULTON: Well, two things there. First, they should always roll their closing costs into the loan amount. So if they owe $100,000, they should do a rate and term refinance for the $100,000. Add another $5,000 if that's the closing cost estimate provided in the good faith estimate to the loan amount and they should refinance that over time.

Because the $5,000 or $4,000 in closing costs are going to be spread over 30 years and they're not going to feel it as an out of pocket expense. They're going to feel a small monthly charge.

Closing costs, which is this big "mystery," is very simple. There's three real simple categories. There's fixed expenses, variable expenses and prepaid items. Your fixed expenses including things like your appraisal fee, your bank attorney fee and bank fees, such as processing, application and underwriting.

Your variable expenses are your title charges, origination fees and in some states they have mortgage tax.

The third item is prepaid items such as real estate taxes, homeowners insurance and per diem interest on the day you close until the end of the month. That's a wash because you can have escrows from your existing lender that's going to go from the left pocket to the right pocket.

LEVS: We're near the end, there are these possibilities, that they're able to take those steps.

MOULTON: Yes.

LEVS: And we're going to get the name of those Web sites to help all the viewers try to do that for themselves. Melissa?

LONG: Bob, thanks so much for your great advice. I know you are sticking around for the rest of your hour. We're talking about your money, should you save it? Should you spend it?

Here's a way to save -- whether or not you have a green thumb, you might want to develop one. We're going to talk about how being green at home can keep the green in your wallet.

(COMMERCIAL BREAK)

LONG: This story just into us here at CNN. We have new information on the controversy surrounding President Barack Obama's upcoming visit to Arizona State University. Now as you know, questions arose over reports that the school was not going to give the president an honorary degree as it has to other graduation ceremony speakers. Kate Bolduan joins us now live from Washington with more on the story. Kate?

KATE BOLDUAN, CNN CORRESPONDENT: Hey there, Melissa. Well, we just received this information just a few minutes ago. As you mentioned, this is surrounding the fact that some controversy that the president was not going to receive an honorary degree from ASU, which is often the case when a president agrees to speak at a school.

Now we learned that ASU is naming and expanding what they call their most important scholarship program in his honor, calling it the President Barack Obama Scholars. And in a statement it says it will offer thousands of students with the greatest financial need the opportunity to go to college.

So we're hearing now that he's not getting an honorary degree, but the school says he's getting what they think is a better thing, they're naming a scholarship after him. And in a statement, the president of the school says that although the focus has been around this honorary degree, he says, "We never felt that was the only or even the best means of honoring his tremendous service to our country." So that's the latest.

LONG: Kate Bolduan, thanks for the update.

BOLDUAN: Of course.

LONG: Back to our theme today of save it or spend it, how to deal with tough economic times. And growing a garden in these times can stretch your food budget. And also help to you eat healthy. Fredricka Whitfield has more on recession gardens.

(BEGIN VIDEOTAPE)

FREDRICKA WHITFIELD, CNN ANCHOR (voice-over): Planting seeds of change. Because of money and market moments like these --

ALI VELSHI, CNN CORRESPONDENT: U.S. stocks ended the day lower.

GERRI WILLIS, CNN CORRESPONDENT: Americans are cutting back on their use of credit cards.

UNIDENTIFIED MALE: It is now looking really quite similar to the first year or so of the Great Depression.

WHITFIELD: And perhaps this moment, too.

MICHELLE OBAMA, FIRST LADY: This garden can not only feed my family, but it's going to feed all the staff at the White House.

WHITFIELD: A boom in vegetable and herb gardens, sprouting in backyards across the country. Much like what America cultivated in the Great Depression and then during World War II, so-called victory gardens are back in a big way. KATE GUNDERSON, HASTINGS NATURE & GARDEN CENTER: Back in World War II, people were pressured to build victory gardens to help with food shortages and food rations. And now the term victory has kind of come into a new meaning for people where they can overcome the recession now.

WHITFIELD: Kelly Williams (ph), her daughters Emma and Kate are anxious to get their hands dirty, even though they needs lots of help getting started.

UNIDENTIFIED FEMALE: What would you recommend? I don't really know how to do this.

WHITFIELD: Williams has tried this once before.

UNIDENTIFIED FEMALE: I tried to plant tomatoes a year ago and they never bloomed.

WHITFIELD: Inspired by a few things, including her wallet, she's determined to try it again.

UNIDENTIFIED FEMALE: We love to eat salads, and to save a little bit of money. And to teach them about being outdoors and trying something new. We thought we would do it. And I saw an idea, we're going to take an old children's sandbox and turn it into our little vegetable garden.

WHITFIELD: The Williams' will spend about $60 buying everything they need including starter plants and a combination of soils and fertilizers, all the ingredients for a fun family project with frugal roots.

UNIDENTIFIED FEMALE: Tomatoes, cucumbers, bell peppers. She has a watermelon plant that they grew in preschool. We're going to try that and some green beans.

WHITFIELD: It is a trend bursting in benefits. According to the U.S. Department of Agriculture, for every $100 spend on vegetable gardening, the potential yield is $1,000 to $1,700 worth of produce. This in a year when food prices are expected to jump another 5 percent. For nursery businesses like Hastings in Atlanta, sales of items supporting vegetable and herb gardens are up nearly 20 percent over last year. Because demand especially from novice growers has been so high, Hastings offers lots of free advice, including free handout garden designs.

GUNDERSON: It's been a really wonderful thing for us. We're one of the industries that's really seeing enjoyable aspects to this crunch.

WHITFIELD: And as Hastings manager Kate Gunderson tells me, the customers vary.

GUNDERSON: We're seeing people, a lot of people from their mid 20s up into their 30s that have never done any gardening before. The other group that's really interesting are the people kind of mid 50s into mid 60s who grew up with family gardens in the back, but then for maybe the last 20 years have done nothing more than perhaps grow a tomato. And they're really interested in getting back in and growing several different things.

WHITFIELD: A project helping households save money, eat healthier, and help boost the economy of at least one blooming industry. Fredricka Whitfield, CNN, Atlanta.

(END VIDEOTAPE)

LONG: And Kate Gunderson, who was in that lovely hat in that piece joins us live.

GUNDERSON: Thank you.

LONG: Where's your hat? It was beautiful.

GUNDERSON: Oh, I took it off for being inside.

LONG: OK well she joins us now here from the Hastings Nature and Garden Center here in Atlanta to talk a little bit more. What are some of the basics when you're trying to create that garden? Because a lot of people -- you're seeing a lot of foot track of people who want to try.

GUNDERSON: Absolutely. We're seeing so many people who want to save a little bit of money at the grocery store and there's so many easy ways to do that. Even people who aren't used to gardening and don't necessarily have space in the yard or aren't willing to invest into that time right now can do simple things like a pot like this.

LONG: OK, well I want to ask you about costs for a moment. Because you said you can save money at the grocery store, but you do have to lay out cash up front.

GUNDERSON: Yes, but can you buy a $4 basil plant, and then have basil all summer long, whereas if you were going to use basil in your recipes in the kitchen, you have to go back every week and buy another thing of basil, one for $4. One plant will grow to be two feet tall and feed a whole family for a whole summer.

LONG: What else did you put that in little garden?

GUNDERSON: This started right here as just kind of a cook's garden. I have some dill, some cilantro, some oregano and some basil that most gardeners like to use and most cooks like to use.

Another thing that we've seen with the recession is a lot of people who like to eat at nice restaurants are now exploring cooking. So it is really exciting to be able to try to have their own fresh herbs and vegetables at home so they can recreate what they used to go out to eat for.

LONG: Seems the basic that everybody tries, the tomatoes, the easiest it seems.

GUNDERSON: They are, and the most fruitful. One tomato plant will feed two people all summer long, even if you eat a lot of tomatoes. And you can do something simple like this to start for just $25. You have your basil, you have some parsley and you have tomatoes. So you can do some good Italian cooking.

And I also have a little bit of a strawberry in here so when these all go away in the winter, that strawberry is going to fill out the pot and you still have something pretty and green on your balcony.

LONG: I know there are people that are watching that don't have a sprawling back yard, they live in a condo, an apartment, maybe they have a rooftop. These would be great options for them.

GUNDERSON: Absolutely. Even if you only have a stoop, even if you don't have a balcony, you can still put one little plant like this out.

LONG: OK and what do we have here?

GUNDERSON: This is mint. This is great. People who want to explore gardening but are maybe a little afraid or don't do a lot of home cooking, you can have a simple single herb. A lot of people use mint in tea, in mojitos, or just hot water. So this is something that you can still save some money at the grocery store and have something beautiful and green at your own house.

LONG: You didn't bring the mojitos.

GUNDERSON: No, those are for later.

LONG: OK and again, you're seeing an up increase in your foot track of a lot of people want to come in. You have a master's in this. You really know what you're doing. So this can be intimidating to people.

GUNDERSON: Yes. And the hardest thing for people I find is just to get in the door. But if you come to a place like Hastings, you can talk to somebody like me and I will help you do whatever you want.

LONG: You'll hold their hand.

GUNDERSON: Yes, absolutely.

LONG: Thanks so much, appreciate it.

GUNDERSON: Thank you.

LONG: And you know, we're also talking about victory gardens here today. And Josh Levs, I know you have i-Reports about victory gardens.

LEVS: You know what, it's a phenom. I didn't realize this. This new thing, people all over the country are doing. Zoom in., I want to show you this. Check this out. We've got a camera that can close in on the board.

This is our assignment about it here at ireport.com. Check it out. All of these are just -- these are just some of the ones we've gotten. People showing us their victory gardens. And this is the best, it comes from Allison McKee (ph) in Phoenix. She says that her garden is a victory over overpriced foreign goods at the supermarket. And she does really what you guys were just talking about. She uses the little space she has in her house. She's managed to put down some fruits and vegetables there.

We're going to scroll through a few others. Denver urban garden. People are really breaking this down. And ultimately i-Reporters giving people a how-to manual. No matter what kind of house you have, people are describing in pretty good detail what they grow, how they grow it, how they take care of all these things. So keep them coming, folks. Right there, look at that, nice patriotism. Ireport.com. We'll keep an eye on that and we've got more answers to your questions coming right up.

(COMMERCIAL BREAK)

(BEGIN VIDEOTAPE)

SEAN CALLEBS, CNN CORRESPONDENT (voice-over): John Belushi's character in "Animal House" believed in the healing powers of beer.

JOHN BELUSHI, ACTOR: My advice to you, start drinking heavily.

UNIDENTIFIED MALE: You better listen to him, Flouder. He's in pre- med.

CALLEBS: These students at Rice University are making that a reality. They call it biobeer. It might sound like a dorm room experiment, but folks, this is cutting-edge science. In order to make the healthy brew, they needed to add one special ingredient -- a substance called resveratrol.

PETER NGUYEN, GRADUATE STUDENT, RICE UNIVERSITY: It is a little bit after miracle molecule.

CALLEBS: Recent studies at the Mayo Clinic found it can help fight heart disease and cancer. If resveratrol sounds familiar, well you might have heard of this while sipping a glass of a different alcoholic beverage. Or watching old episodes of "I Love Lucy."

JFF SILBERG, ASST. PROF., RICE UNIVERSITY: One of the most common places that people get it from is red wine. And that's because it's found in grapes.

CALLEBS: And since the average American drinks more beer than wine every year, biobeer could have a big impact. The project is still in the works. But they're hoping to raise a glass to health by the end of the year. But you still need to know when to say when.

NGUYEN: You probably won't get less hung over, but you'll be healthier the next morning.

CALLEBS: Sean Callebs, CNN.

(END VIDEOTAPE) (COMMERCIAL BREAK)

LONG: Should you spend, should you save? Well, we're talking about the economy right now. And another indicator of an economic turnaround is that temp agencies are reporting an increase in demand. Insiders often say that translates into new jobs down the road.

(BEGIN VIDEO CLIP)

SUSAN ZINGARO, FIRSTPRO STAFFING: My division is a temp to hire division. And when there is a recession, the temporary workforce is the first to go. When we're on a comeback, the temporary workforce is the first one back. So we are definitely seeing an increase in our or. Companies are hiring. A little afraid to pull those full-time people back on their permanent payroll so they use temporary people to do that. And in that, we see the movement coming back. That's a very positive sign.

(END VIDEO CLIP)

LONG: Real optimism from that young lady who works with temp agencies.

Let me bring our guest back in this hour, that's Bob Moulton, who is a mortgage broker. Lauren Fix an automotive analyst who has moved inside, nice to be inside. And of course, my colleague Josh Levs as well. He's been fielding your questions and your suggestions today.

I want to go back to the optimism right now because a lot of people are saying this could be a real opportunity for you if you are trying and have the ability to spend right now, if you have the savings, if you are confident in your employment situation.

So Bob, I want to ask you about potential changes people should be making to their homes right now. Is now a great time since so many people have not been building to maybe do home renovations?

MOULTON: More people are doing home renovations. They're staying in their houses. Where you had double income, no children, those people that are looking to buy a bigger house realize that it is too costly and what they're doing is adding extensions to their house, renovating, putting on additional bedrooms and bathrooms. So we're seeing a lot more renovations now than we have in prior years.

LONG: And you think it is a good thing to be doing now if you have the cash?

MOULTON: Well if you have the cash, or you can take out a mortgage to finance the addition, if you have the equity in the house.

LONG: OK What about buying a car right now or leasing a car? Lauren, what do you think about going out and leasing right now? Or if you are really in the driver's seat, should you be buying?

LAUREN FIX, AUTOMOTIVE ANALYST: Well I know for a fact this weekend a half a dozen friends of mine have said the incentives are so great, I've been waiting so long, I'm going to go buy a car.

So as I know right now, about five or six people have purchased cars this weekend. And luxury cars are still leasing. That still is where people want to get the Audis and the BMWs, that's a leasing area and they're very aware of that.

However, if your job is not 100 percent secure, people are then kind of looking to the GM, Ford and Hyundai plan that might work for them.

But my real solution is if you're insecure about your job future, this is not the time to buy a car. Maintain your car, the do it yourself market or do it for me market has expanded dramatically and the Car Care Council is very aware that people are keeping their vehicles around 11 years now. So don't just go out and buy that car because incentives are so great. Really look at your numbers and your budgets and see what you can afford.

LONG: Those plans you mentioned by the three automakers, those are essentially safety nets for people.

FIX: Right. And it gives you that little bit more confidence. Again, you want to read that small print, too. Ford's plan seems to be the best of the three where they are willing to offer $1,000, where General Motors is saying well, we'll give you $500.

LONG: Lauren, I'm sorry, I have to break our conversation up. I apologize, that was a big premature. OK, we are going to go to this news conference out in Massachusetts, in Buzzards Bay. We're learning more about the captain who of course is being held by Somali pirates. We're hearing from family and friends.

CAPTAIN JOSEPH MURPHY, FATHER OF SHIP'S NEW CAPTAIN: We'd like to thank a few people. Unfortunately, this is going to appear a bit scripted but we have a lot of people to thank and I didn't want to leave anybody out.

First of all, I'd like to thank god for answering our prayers. He's given us the best news that any familiar could ever get. We got our son back. I'd like to thank the Obama administration and Maersk Lines Limited for their professionalism in handling this situation. I'd also like to thank and take particular thanks for the men and women of the U.S. military who continue to ensure the safety of our son in Captain Phillips.

There's been a tremendous outpouring of support from American citizens, in fact citizens from around the world. We're most thankful for that. I'd like to thank Senator Ted Kennedy, Senator Kerry, and the Massachusetts congressional district, as well as Mass Senate President Terry Murray, who took the time personally with our family and expressed their concerns. We really appreciate it.

Finally, I'd like to Captain Phillips and his family for his courage and his personal sacrifice. He's made tremendous sacrifice for his crew, just incredible courage. Very, very thankful. He's done everything that he could possibly do and he has saved our son. So we want to thank him. We know the difficulties that the Phillips family is going through and we continue to support them. We believe that Captain Phillips will survive this situation. We want him to know that he has the support of all of us, the American people and people around the world. We appreciate his courage. We know that he will survive because he will never give up. At this moment personally, as a family, we'd like to say that we are truly proud to be Americans. Thank you very much.

QUESTION: Have you spoken with your son? Did you get in a brief phone call with him?

MURPHY: Yes, we did.

QUESTION: Can you share just a bit?

MURPHY: He said, dad, this has been unbelievable. And he said the facts will be known very soon. He said he couldn't speak about anything. In fact, he didn't even know what was -- about what the plans were. So he really couldn't answer those questions.

QUESTION: What did you say to him?

MURPHY: Well, I said this is going to be a tough sea story to overcome. He's got a great sea story here.

QUESTION: Any idea when they'll be able to come off the ship and head home?

MURPHY: First of all, this is an ongoing security situation. It's now a crime scene investigation so it would be inappropriate for us to comment. And quite frankly, as I told you before, he really didn't have any information, couldn't tell us.

QUESTION: How proud you must be of him to have had to take over the helm at a time like this. What do you think it's been like for him?

MURPHY: Well, I think every captain who's commanded a vessel remembers their first command, the first day of their first command and their first challenge. I just can't imagine the memories that he's going to have taking over and -- under fire, as it was. And it's the way it should be. He's done a good job.

QUESTION: How hard do you think it would be for him to have left his captain behind?

MURPHY: Well, he did mention that and thank you for mentioning that. He said that the crew was very disappointed that they had to leave the captain behind. I said by doing so they were following orders and perhaps doing what was best perhaps in his case. They are very concerned about his safe return. I'm sure, if asked, they would immediately go back on-scene and rescue him, if possible.

QUESTION: What are your thoughts about the amazing connections between the academy, your son, Captain Phillips, and presumably the benefits that all of the crew members are enjoying because of their education here? MURPHY: Well, we train professional mariners of the highest order. This institution takes their fiduciary responsibilities, their parentis locus responsibilities very seriously. We're very proud of the young men and women who graduate from this school and I think it is evidenced today by the effort, the professionalism, the courage of these young people in a situation that none of us would really ever want to have to be in.

(CROSSTALK)

MURPHY: Yeah, I guess he hadn't had any sleep for 36 to 40 hours. He certainly didn't get his mandatory eight hour rest period.

QUESTION: Thinking about what your son and the rest of the crew have escaped and what Captain Phillips still faces, can you give us a sense for your thoughts with respect to Captain Phillips' family in contrast to those that your family has now?

MURPHY: Well, my family of course has had a tremendous burden removed from our chest. We know that our son is safe. We know that the crew is safe and we're very thrilled with that. However, in the first moments of this incident when we realized the magnitude and the danger involved, my family came together and the rest mutually among ourselves for support and so forth. I'm very impressed with the way the Phillips situation has handled this situation. Mrs. Phillips is under incredible pressure and our hearts go out to them.

QUESTION: Any thoughts on how this situation is so serious in that these pirates have attacked so many ships. I guess it was a revelation to most people worldwide that there were as many hostages on other ships by these pirates and how big of an international situation this is and could be.

MURPHY: And I think we have to thank the press for that. The fact that they chose an American ship was a wake-up call for people here in the United States and around the world. If there's any residual effects from it, hopefully we get Captain Phillips out alive, it is that something is going to have to be done about this.

QUESTION: What do you think should be done to prevent these types of events?