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New App To Protect Privacy; Donald Sterling's Apology Not Considered Sincere By Many; Is College Worth It? J.C. Penney's Stock Got Hot This Week

Aired May 17, 2014 - 14:00   ET


CHRISTINE ROMANS, CNN HOST: Private moment's gone public. You can lock the door, close the curtains, but like your favorite celebrity, someone wants to know what you're doing at all times.

I'm Christine Romans. This is YOUR MONEY.

You know the latest scandals? A video on TMZ that appears to show Beyonce's sister Solange attacking Jay-Z in an elevator? Donald Sterling, a private conversation caught on tape.


ANDERSON COOPER, CNN ANCHOR, AC360: Did you know you were being recorded?

DONALD STERLING, L.A. CLIPPERS OWNER: No, of course not. Of course not. No.


ROMANS: But it's not just celebrities and CEOs experiencing the death of privacy. Your e-mail and text messages stored on servers, every purchase you make on Amazon, every click of your computer mouse, tracked and analyzed, and we're complicit. We willingly trade our information for convenience. We hunger for every stolen celebrity snapshot, queue after a comedian Robert Williams.


UNIDENTIFIED MALE: It's not big brother any more. It is little snitch.


ROMANS: Europe is trying to walk it back. This week, the continent's highest court, rule that the Google search, about you turns up something you don't like, Google must remove it, if you ask. Google is already fielding these takedown requests.

Tech billionaire Mark Cuban is so concerned about privacy he has a new app that turns your conversations to dust. Texts on Cyber Dust, self- destruct 30 seconds after they are opened. I sat down with Mark Cuban who also happens t to own the Dallas Maverick. We talked about privacy, billionaires and the Clippers.


MARK CUBAN, INTERNET ENTREPRENEUR: First of all, you have no privacy, you know, from the little things like license plate cameras to walking down the street. There are sensors everywhere. There is camera everywhere. And they don't just take pictures, they don't take videos, they listen as well. And then is just a question of tie in the back. Every time you post something on Twitter, every time you post something on Facebook, any picture you take, every time you hit send on your text, you lose ownership of that text.

And so, I created an app called Cyber Dust. And in reality, it was in reaction to my experiences with the FCC. They came after me --

ROMANS: Reading e-mails out of context?

CUBAN: Out of context, right.

ROMANS: All right, of these information is there. It is there forever and you can put together any kind of paper trail you want?

CUBAN: Well, yes. And so they would read an e-mail and I would say the sky's blue. They would say, what you really meant to say, the sky was gray but you knew we'd be watching and so they just added their own context to it. And to the point now where we have such large digital profiles.

ROMANS: Right.

CUBAN: Right. That I wanted to start shrinking my digital profile. And then it occurred to me every text I've ever sent, the minute I hit send I lost ownership of it. It doesn't mean the texts were bad or anything wrong. It can be the most innocent thing ever. But if someone decides to save it, and keep it, and post it on Twitter, post it on Facebook, forward it to a friend, it can take on its own context. So we created this app called Cyber Dust. And it's available on iphone now and it will be available on android and it's a very simple concept. You send a text to another user, now a Cyber Dust user, message, and 30 seconds after they open it, it's gone. It's deleted.

ROMANS: The few billionaires coming out saying that they feel persecuted for their success.

CUBAN: That's the biggest bunch of nonsense ever.

ROMANS: Billionaires are prosecuted?

CUBAN: Are you kidding? Persecute away. Please. I mean, yes. Persecute me any day of the week. I know you're not persecuted. That is --

ROMANS: So why this is? It is the context of envy that America hates rich people?

CUBAN: That is the dumbest I've ever heard in my entire life. Are you kidding me? That's ridiculous?

ROMANS: What should be more fair or do we have is it a fair system right now?

CUBAN: Look, one of the reasons I do "shark tank," right, I that it sends a message to kids and families that the American dream is alive and well. I go and talk to kids --

ROMANS: Entrepreneurship.

CUBAN: Yes. Anybody can start a business. When you watch that show, you see people come out of the smallest towns with the simplest ideas that they believe can turn into something big and they do. It's the number one show watch on television -- they tell us, the number one show watched by families together.

ROMANS: Right.

CUBAN: Right? That tells you the American dream and its desire to be successful and to an entrepreneur, it's growing.

ROMANS: You put your foot in your mouth. You get kicked out of the league. We all know these NBA bylaws now. We know Donald Sterling with the culture of that team, the culture of him has taken over the entire personality of the team. You got the Missoula CEO who had to step down from his job because he gave a donation Prop 8, six years ago. You got NFL players this week who are being fined or suspended because of their personal opinion, but public reactions to Michael Sam kissing his boyfriend on ESPN. And you have Donald Sterling who could lose his team for as you say, being a moron. Should we be in that place? Take someone's personal property?

CUBAN: First of all, again, I can't comment on Mr. Sterling, but what I can say is we are a franchise organization, right? So, it's not in the -- it's not apples to apples and taking property. And that's kind of what I've learned since my original comments. You know, it's like if the -- someone who was a McDonald's franchisee started talking about spitting in the French fries.

ROMANS: He'd lose his franchise.

CUBAN: He'd lose his franchise, right. So that is why they call the New York franchise, whatever. So put that aside. But outside of the NBA, again, going back to privacy, if I have to worry about what I say in my own home, if we have to censor ourselves because of what might be said, again, I'll go back to my apps. I have a Cyber Dust, right? We -- I created it to replicate a face to face conversation, and in a face-to-face conversation, people shouldn't be taking notes. But as it turns out, maybe they are. Maybe someone's recording it. And so, I think -- those of us who are smart will start taking precautions to shrink our digital footprint to nothing, right? We won't let her so we don't have to censor ourselves. Because it's not so much what you say, it's where it's recorded and how it's presented.

ROMANS: And it's everywhere?

CUBAN: It's everywhere.


ROMANS: For NBA owners, the league is always watching. That's one reason why Cuban insisted to me he would not talk directly about Donald Sterling.

You know, Cuban's pretty outspoken and no stranger to breaking the rules. Mark Cuban accounts for 10 percent of all fines levied by the NBA from 2000 to 2013. All of the other owners combined make up just nine percent.

Coming up, Donald Sterling says he's sorry. He's so sorry that he probably insults Magic Johnson. He's not the first mogul to make a bad situation worse from BP to Target to Paula Deen, I have a list for you of the worst apologies in business. That's next.


ROMANS: An epic fail. That's the consensus on the apology delivered by Donald Sterling this week during his interview with our Anderson Cooper. Now, Sterling could have learned a lesson from those before him. Instead, he lands on top of the list of the worst apologies in business.


UNIDENTIFIED MALE: I'm really sorry. I am. I'm sorry.

UNIDENTIFIED MALE: It doesn't matter if you awe apologize if it's not sincere.

UNIDENTIFIED MALE: Apologies don't have to be sincere. It's just the act of the apology itself.

ROMANS (voice-over): The art of the apology may be lost on Larry David. But the corporate suite doesn't always get it right either. After dealing with the deepwater horizon oil spill in 2010, BP's CEO Tony Hayward offered this.

TONY HAYWARD, CEO, BP: I'm sorry. We're sorry for the massive disruption it's caused their lives. And you know, we, there's no one who wants this thing over more than I do. I want my life back.

ROMANS: He got his life back. He was replaced less than two months later. And Comedy Central South Park rubbed it in.




ROMANS: Nothing says "I'm sorry" like free pizza. That's what chevron offered residents of Bobtown, Pennsylvania after one of its gas wells exploded killing a worker. The "Daily Show mocked Chevron's attempted apology.

UNIDENTIFIED MALE: Everyone calm down. OK. Sounds like you're hungry. I know just the trick. Pizza!

ROMANS: Comfort food couldn't help Paula Deen. She took a scene on the "Today Show" to apologize for making racist comments and she got biblical.

PAUL DEEN, CELEBRITY CHEF: If there's anyone out there that has never said something that they wished they could take back, if you're out there, please, pick up that stone and throw it so hard at my head that it kills me.

ROMANS: But Deen couldn't butter up her sponsor. They fled and her Food Network show shut down. Deen is attempting a comeback.

But for Lulemon's former chairman, there was no coming back from comments about the company's high-priced yoga pants.

CHIP WILSON, LULULEMON ATHLETICA: Quite frankly, some woman's bodies just actually don't work for it.

ROMANS: Co-founder Chip Wilson tried to apologize after offending customers, but as may have (INAUDIBLE) was only to employees.

UNIDENTIFIED MALE: I'm sorry to have put you all through this.

ROMANS: Sales stalled. The stock plunged. Wilson resigned.

ROMANS: At Target, CEO Gregg Steinhafel apologized for a hack that exposed tens of millions of customers' private information. "I'm sorry" came with free credit monitoring and 10 percent off for a whole weekend. Sales fell, the hack expanded, he resigned.

STERLING: And I'm so sorry, and I'm so apologetic.

ROMANS: The lesson for Donald Sterling in business, saying sorry isn't enough. It's how you say it.


ROMANS: My next guest is laughing and crying through that piece. Bill McGowan is CEO and founder of Clarity Media group who specializes in crisis management, something all those people needed. He is also the author of "Pitch Perfect."

Bill, a long list of bad apologies in business. Is there a playbook for hoe to do it?

BILL MCGOWAN, CEO, FOUNDER, CLARITY MEDIA GROUP: Well, you have to take narcissism out of the equation. And I think for are a lot of these people, it is a very difficult thing. And you heard the clip of Donald Sterling, saying I'm so apologetic. He is actually like talking about itself as a third person which is kind of a bizarre thing. And you, it is always about them. Me, me, me, me. You have to be absolutely selfless in an apology. ROMANS: No. If you're sorry as Donald Sterling says, he has then hire an anti-trust attorney to suffice the fine that your bosses, the NBA has put on you, are you really sorry then?

MCGOWAN: It doesn't certainly seem like about sincerity there. Although in that interview with Anderson, he also hinted that he wasn't going to fight the other NBA owners and taking the team way from him. So, it's great possible that this is something of a recent development with him, after the interview.

ROMANS: I have to say there was a long list of things to choose from, both you know, sort of stupid comments from corporate executives and business leaders, but also then just the actual apology that makes it worse. What can CEOs and public figures learn from this crisis?

MCGOWAN: Well, I think Donald Sterling in this case should have had some short list or long list, preferably, good deeds he's done for people in his organization of color and people he's dealt with in real estate, acts of promoting other peoples careers or mentoring people or acts of generosity that had happened over the years so he can actually show good deeds that could counterbalance this terrible image he now has. I think if he had those and probably would have highlighted those in the interview, but apparently he doesn't.

ROMANS: If you were advising him, what would be his one next step?

MCGOWAN: I think he should not sit down for another interview.

ROMANS: Stop talking?

MCGOWAN: Yes. More is not more. And my other advice to him would be, don't have anything come out of your mouth spontaneous. Clearly, the Magic Johnson portion of the interview was not planned. It was not on any message sheet and it was the worst part of the interview.

ROMANS: And bizarre.

MCGOWAN: Terrible. Absolutely. Don't pull other people under the bus with you.

ROMANS: I know.

All right, Bill McGowan, founder and CEO of Clarity Media group. Thank you so much.

MCGOWAN: Thank you so much.

ROMANS: You know the weather's getting warm and kids are going to be out of school soon. No matter hour hectic your schedule, please never miss the money news that matters most to you. Just take one moment right now, set your DVR to auto record YOUR MONEY.

Thank you.

Coming up, if you have kids, all right, earmuffs. I'm about to say a bad word. But it's the only word we can use to describe it. Does your job suck? How bad is it? A tool to help you find out, next.

Also ahead, think like a freak about education.


UNIDENTIFIED MALE: The more knowledge you acquire, the better you will do period. But that doesn't necessarily mean that the college track is right, especially when you're overpaying.


ROMANS: All right, is college worth it? One-half of the freakonomics team weighs in. That's next.


ROMANS: All right. Here it comes. This is a word I don't unusually say on television but it is actually the only word that sums it up. It is the only word ever used in this sentence. Does your job suck?

Our friends at CNN MONEY came up with a question to help you decide. So the question is, do you like what you do? That is the big question. I'm going to say, yes, because I'm saying yes.

Do you get along with your boss? Yes or no? Take our quiz and find out. Is your job challenging? It should be challenging. That's what makes it fun, right? I want you to take the full quiz and get your results at We want to know what you think.

All right, lunch with the former fed chief, silencing Twitter troll, milking Disney's "Frozen." Give me 60 seconds on the clock. It's "money time."


ROMANS: Want to grab lunch with Ben Bernanke, an anonymous bidder shelled out more than $70,000 for a meal with the former fed chairman's, all proceeds went to charity.

Finally, a way to silence people who bug you on Twitter. A new mute button let's you hide tweets and re-tweets and they'll never know you've muzzled them.

Disney has no plans to let go of "Frozen." It is the highest grossing animated movie of all-time. Next stop, a Broadway musical.

The head of the international monetary fund snubbed by the Smith College class of 2014, Christine Lagarde cancelled plans to deliver the school's commencement address after students objected. Nearly 500 signed an online petition protesting the IMF policies in developing nations.


ROMANS: And a lot of backlash this week from professional women who said, hey, why are you snubbing one of the most powerful women in the world? We've been waiting a long time to get to these levels of power and to be snubbed by college kids, not cool.

All right, the country with the best infrastructure and the best workforce will lead the 21st century. And we're falling behind on both. So, how do we ensure that our workforce can compete globally? A big part of it providing the best education for American students. And that may require some outside the box thinking. So I asked Stephen Dubner, the co-author of "Freakonomics" and the new book "Think Like a Freak," I asked how we fix our classrooms. He told me it all starts with thinking small.


STEPHEN J. DUBNER, CO-AUTHOR, THINK LIKE A FREAK: A few economists went to China, this poor, rural province of China and they noticed something, which is that almost none of the kids wore glasses. They thought that's kind of weird. Why? Well, they tested the kids. A lot of them needed glasses but they just weren't wearing them for a variety of reasons. So they ran a pilot program. They said we'll give half of these 500 kids who need them glasses, $15 a pop. The other half will leave and that will be our control group in measure. The kids who got glasses suddenly were scoring a full grade ahead. That is a small -- now, you don't solve every big problem all at once. That's kind of the point of thinking.

ROMANS: Well, there is so many levels to switch in education in particular. I was talking to Mark Cuban, the billionaire, the owner of the Dallas Mavericks. And he said, we should limit student loans to $10,000, because university are getting all these free money and students have no idea of the value of the thing they're buying, because they don't understand the value of what they're buying it with. It's all inflated and artificial. What do you think about that?

DUBNER: I think there is probably a lot of truth to that. So, I haven't looked at that issue very closely. We have looked at the whether college is worth it. The big, broad issue.

ROMANS: And --

DUBNER: The short answer is? Yes. The long answer is also yes, but a lot of caveats there. It depends what you study, it depends how much debt you take on and also depends who you are. Here is one way to think about college.

Think about the opportunity costs of going to college. What that means is, what would I do with those four years or two years or maybe if you are doing more, six or eight or ten years if I were not doing that and what would I do with the money? Instead are paying money, earning money?

So I think there are a lot of people for whom. And I am not surprised to hear Mark Cuban say that because look, he's the kind of guy who has the wherewithal, the unbelievable energy and entrepreneurial drive and super smart, the super smart guy.

So for someone like him, college may be one of the worst options. For many other people one of the best. The returns to education overall, however, I would argue, among the best investments to any human could make at any point in history. In other words, the more knowledge you acquire the better you will do, period. But that doesn't necessarily mean that the college track is right, especially when you're overpaying.

ROMANS: What are other freakish ideas you have for fixing our education system?

DUBNER: I tell you, one thing we didn't get in the book. There's a project that began here in New York called school of one. And it's now got a different name. It is called new classrooms. And I love this idea.

But what the fellow who founded it, his name is Joel Rose did, is he thought, you know, if you went to sleep 130 years ago and woke up today, the world would look very different -- transportation, television, almost everything.

One thing would look similar which is the classroom. So Joel Rose thought what if I experiment with different modes of education within the same classrooms? So, some kids will sit with the teacher. Some sit with other kids to work on math problems. Some have a virtual tutor on a computer. Some play a computer game. Unless I can take every kid and experiment with each kid, learning in different styles, then at the end of the day test each kid to learn how did they best learn a particular piece of material?

And overnight, your algorithm will computes for each kid how that kid learns best and the next morning they come in and they have kind of a playlist to determine what they should do the following day based on how well they did with which styles of learning the previous day. I mean, that is brilliant.

Again, I can't say whether it will really work and there will be pushback from teachers unions immediately, let's say. But if you want to think about taking a situation like education, which we plainly don't love how we're doing right now, I think it's worth thinking about very, very new ideas rather than trying to, you know, just push on the edges a little bit like we tend to do.

ROMANS: A lot to think about, but an education, he says, start thinking small.

All right, up next, J.C. Penney hasn't been cool for a really long time but the stock sure got hot this week. We are going to have "the buzz," next.


ROMANS: So Walmart is blaming weather for as did appointing first quarter. Paul La Monica joins us now for the buzz. That's what 90 seconds on the clock and let's talk about Walmart's sniffles, I guess, in the quarter.

PAUL LA MONICA, LAMONICABUZZ: Yes. I really wouldn't believe that excuse. They did say the weather had an impact but their guidance for this quarter isn't very good and last I check, there is no snow in the spring. Another thing to keep an eye on, if Walmart's numbers were bad, how bad were Target's when they report this week? They fired their CEO just after the quarter ended. I don't think it is just the data breach. Their numbers are probably going to be terrible.

ROMANS: Another retailer, J.C. Penney to watch here. Look at the end of the week. This big jump here, 20 percent jump in one day.

LA MONICA: Yes. J.C. Penney has some good news. Sales growth was better than expected, but they are still losing money. There are a lot of short sellers on this stock. I think they have a little bit of a squeeze going on. J.C. Penney is still struggling, sears another retailer that was up and down this week, because they're selling their Canadians assets. Both of these companies, a lot of questions about their long-term future.

ROMANS: Somebody's old name. But you look at the worst days for J.C. Penney back here. And there are people who made it awful lot of money. That is why you are talking about the short squeeze?

LA MONICA: Definitely. I mean, traders, this is a great stock. If you're a long-term investor, I'd stay away from this.

ROMANS: Let's take one last got here, the greed. What's happening in the market?

LA MONICA: Yes. There is a lot of fear right now.

ROMANS: Start of the week. It is just started the record with records. Ended the week with a fear, extreme fear?

LA MONICA: Yes. A lot of people I talked to note that we just have a market now where people are looking for excuses to sell because stocks did so well in 2013. This fear read index we have on CNN Money, showing extreme fear right now, I think is an indication that there is still lot of skittishness.

The real economy doesn't jive with what the market is doing. And every now and then you get weak economic data and the sell-offs. The Walmart earnings, obviously, didn't help.

ROMANS: Paul La Monica, thank you.

And thanks for spending your Saturday smart with us. Make sure to head to CNN Money for the latest on the massive $35 million fine General Motors is set to pay. It's a result of its delayed recall for that ignition switch problem.

ROMANS: Paul La Monica, thank you.

And thanks for spending your Saturday smart with us. Make sure to head to CNN Money for the latest on the massive $35 million fine General Motors is set to pay. It's a result of its delayed recall for that ignition switch problem.

CNN NEWSROOM starts right now.