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Washington Think Saddam Hussein Could be Funding Rebellion in Iraq

Aired October 18, 2003 - 13:00   ET

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

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


SUSAN LISOVICZ, HOST: Welcome to IN THE MONEY. I'm Susan Lisovicz, in for Jack Cafferty.
Coming up on today's program: cash for chaos. Washington think Saddam Hussein could be funding rebellion in Iraq with billions hidden in Syrian banks. We'll follow the money trail.

Plus, a stitch in time. Americans want to roll back the clock and trump mother nature as plastic surgery goes mainstream, with the FDA reviewing silicone implants. Find out whether we like the cutting edge just a little too much.

And extra virgin. Sir Richard Branson has put his Virgin brand on everything from airplanes to CDs. We'll look at the business Branson built as he launches yet another new product line.

Joining me today, of course, a couple of IN THE MONEY veterans, "Fortune" magazine editor-at-large Andy Serwer, and CNN correspondent Christine Romans, who smiles through her tears as the World Series begins, a Chicago area native. Flew out just to watch the Cubs on television.

ANDY SERWER, "FORTUNE" MAGAZINE: She's used to it by now, though. She's used to it.

LISOVICZ: And just to watch the Cubs on television.

CHRISTINE ROMANS, CNN CORRESPONDENT: Yes. You know you're in trouble when you fly just to Chicago just to watch the show, just to watch the game on television.

SERWER: In a bar.

ROMANS: In a bar, no less.

SERWER: You don't even go to the game.

ROMANS: No, but you can open the doors and run out in seventh inning stretch and hear somebody great singing. So, no, listen, I'm really sad about it. But it was an amazing playoff season. It really was. And I found that it was really pulling people in who don't usually watch baseball playoffs.

SERWER: That's true. ROMANS: So October baseball, wow. The ivy turning orange at Wrigley, that was great stuff.

SERWER: And they're talking about it on "The View," talking about bringing in people who usually don't watch this stuff. Also, though, the World Series, can you say anti-climatic? I mean, the Yankees against the Marlins, as if we care.

I mean, the whole thing was the playoff series. We get here, I think the Yankees are going to have some trouble with the Marlins' speed, though, because that's something they haven't faced. George Pasada (ph) going to be under the gun. And what about Fox, Susan?

LISOVICZ: Fox is a huge winner. They paid nearly $2.5 billion for the rights to Major League Baseball, the playoffs, and they are laughing all the way to the bank.

ROMANS: And you say it's anti-climatic, but listen, it's 100- year-old team and a 10-year-old team. That's cool, you know? I think that's really cool.

SERWER: Yes, I guess you're right.

LISOVICZ: Fox really likes what you're saying, Christine Romans. That's for sure.

SERWER: Oh, that's too bad.

LISOVICZ: And of course it begins in just a few hours at Yankee Stadium.

And while we're talking about the media, let's talk about perception. Bad news is good news, as anybody in the news business can tell you. Nothing grabs people's attention like word of things going wrong. And there's plenty wrong with Iraq these days.

But the Bush administration says that the media focuses way too much on the rough stuff. And, in fact, there's more to the post-war picture than suicide bombings, power cuts, and crime in the streets, even if you don't hear that much about it. For a look at what's going right, we're joined from Baghdad now by Harris Whitbeck.

Hi, Harris.

HARRIS WHITBECK, CNN CORRESPONDENT: Hi, Susan. No baseball here, but there is a lot of scorekeeping going on, mainly by the Bush administration. We're asked all the time about whether there are any good things to report. And of course there are good things to report.

If you compare the Baghdad of today with the Baghdad of the Saddam Hussein era, there are very dramatic changes. You see that in the media, in the local media, the fact that there are now more than 100 newspapers circulating in the country. And this is, in general, a free and independent media.

There are also street protests on the streets, something that didn't really happen before. And while those street protests might not necessarily be in favor of the American occupation, the very fact that they're taking place here is a sign that the political life here has dramatically changed, and that it is having a direct impact on the lives of the people here.

In terms of basic services, there is now a court system working. Schools are up and running. Electricity is on most of the time and water is on most of the time.

So in terms of infrastructure, the bigger picture, yes, things are working. Probably one of the most visible changes that we've seen this week was the introduction of the new Iraqi dinar (ph). Last Wednesday, a completely new currency circulating in the Baghdad banking system.

No longer was Saddam Hussein's picture on those bills. And people say they're happy about that. They're also happy about the fact that these bills are supposed to be counterfeit-proof. One of the problems that Iraqi consumers faced in the past was that the old bills, which were printed in country, were not counterfeit-proof, so that was a big problem.

Opinion polls here indicate -- there was one that was published just a few days ago -- indicate that people in general are very happy with the fact that Saddam Hussein is no longer in power, but they're not happy with what the occupation has brought them; mainly terrorism, and that is something that we cannot ignore. Terrorism is a factor that you cannot get away from. It affects everybody's lives because it is so unpredictable, and that, the insecurity and instability are probably the biggest issues that most Iraqis face today.

LISOVICZ: Harris Whitbeck, thank you for joining us from Baghdad.

Life in Iraq may not be as bad as many Americans think, but it's also not as good as Washington would like. One big reason is the low- level rebellion under way against U.S. forces. Investigators in Washington think a big chunk of the cash that's funding those attacks belongs to Saddam Hussein, and it's sitting in Syrian-owned banks. Damascus denies it.

For more about that, we are joined by "TIME" magazine's Washington correspondent, Adam Zagorin. And welcome to the program.

ADAM ZAGORIN, "TIME" MAGAZINE: Nice to be with you.

LISOVICZ: This is a serious problem if you have billions of dollars of potentially Saddam Hussein's money that could be funding rebellion in the country, rebellion against U.S. troops. How close is the United States to knowing whether Saddam Hussein and whether that rebellion has access to that money?

ZAGORIN: Well, not as close as they'd like to be. The United States, it was not disclosed at the time, but a little over two weeks ago sent two financial specialists to Damascus to look for the money that it believes is there, along with two financial experts from the Iraqi Central Bank.

They're in Damascus now, as I understand it, but U.S. authorities complain that they haven't been getting much cooperation from the Syrians. And as a result, they can't really determine that much about the money.

SERWER: Adam, Andy Serwer from "Fortune" magazine. I wanted to ask you about our relations with the Syrians at this point. Obviously, tensions are on the upswing here, but how do we balance between a carrot and a stick approach?

You know we have the ability to reach out to them and we have tried to do that. On the other hand, we're also contemplating force. Where do we stand there?

ZAGORIN: Well, the Israelis, for one thing, have recently bombed Syria, an alleged Palestinian terrorist camp outside Damascus. The United States did not condemn that, President Bush did not condemn it. So although we didn't hit them, others have hit them, and we have not objected.

Now, balancing the carrot and the stick, the United States has outlined a number of things that it would like Syria to stop doing. And I guess if the Syrians did those things, relations could improve quite rapidly. That involves the funding of various or hosting of various terrorist groups that are in and around Damascus.

The Syrians say that those groups are legitimately opposing Israel and Israeli occupation of Palestinian lands, and that the officers are just for administrative purposes and don't serve any military function. But the United States also claims that Syria is seeking weapons of mass destruction, which they deny, and then there's this financial component that we just discussed. So if there were progress on those fronts, things might change, but there's not much evidence that there will be.

LISOVICZ: You know, Adam, but really, what can the U.S. do? The State Department long ago identified Syria as a state sponsor of terrorism. There's virtually no business being done with Syria. So short of going in and militarily taking action, what kind of options does the U.S. have?

ZAGORIN: Well, if we want to talk about sanctions, there are two sets of sanctions that could be imposed before too long. One is a set of sanctions that is being voted in the U.S. Congress. The House of Representatives approved sanctions against Syria this week, and of course, the Senate still has to approve it.

If that happens, President Bush has indicated that he will not veto the measure, although he's traditionally been leery of sanctions. And those would isolate Syria economically. But there's another set of sanctions under the Patriot Act, which we mentioned in "TIME" magazine this week, because the senior administration official told us that if the American investigators in Damascus don't get more cooperation from the Syrian authorities, they might impose sanctions under the Patriot Act. And those could be quite targeted. For example, they could sanction a number of Syrian banks where the alleged Saddam Hussein money is located. And although those banks don't deal a lot with the United States, they do need capital to finance a good deal of Syrian trade. And if they were unable to access the capital markets, Syria could find itself a good deal more isolated than it is now.

ROMANS: But Adam, you know this diplomatic dance, all of this, takes months. Already Colin Powell several months ago began this process with the Syrian president. And in terms of U.S. troops in Iraq, months are not something that they want to be facing some kind of diplomatic showdown with. They want to toke off that money immediately.

ZAGORIN: Well, you're absolutely right. And one of the things that they have doing -- and I'm not on the ground to witness this -- but the United States has a substantial military presence obviously in Iraq, but also they have sent troops repeatedly towards the Syrian- Iraqi border, which is the place where wherever money and infiltration is taking place.

And there have been -- U.S. troops have gone in there. They have seized people and weapons and so on and so forth. And I think that, short of this financial maneuvering that you've just pointed out could take a long time, the U.S. could increase its military presence on the Syrian border. I'm not sure the Syrians would like that, but there might be no alternative.

SERWER: All right, Adam. Adam Zagorin, "TIME" magazine, Washington D.C., thanks very much.

Coming up on IN THE MONEY, the bust boom. Plastic surgery has turned trendy as an FDA panel delivers a new take on silicone implants. See whether we're using our brains when we put our bodies under the knife.

Plus, high altitude and low prices. Virgin chief Richard Branson is ready to shake up the budget airline business again. We'll let him know how you know.

And see the new magazine where hot pants and hot lead meet. It's called "Drill," and it's reading the minds of U.S. servicemen. We'll speak with the editor. Stay tuned.

(COMMERCIAL BREAK)

ROMANS: After an 11-year ban, silicone breast implants may be set for a comeback. This week, an FDA advisory panel recommended that doctors be allowed to once again use the implants. Implants, silicone or otherwise, are just a small part of the booming business of cosmetic surgery. In the last five years, cosmetic procedures have increased by 220 percent, with more minorities and men taking part than ever before.

Joining us to talk about all of this is Sarah Bernard, a journalist who covers trends in plastic surgery for "New York Magazine." Welcome to the program.

SARAH BERNARD, CONTRIBUTING EDITOR "NEW YORK MAGAZINE": Thanks.

ROMANS: There's almost a mainstreaming of the whole cosmetic surgery. I mean, everyone knows somebody who has had a little nip or a little tuck. And I wonder, what does it say about our society, that it's just like going to the dentist almost.

BERNARD: It is. It's not just celebrities, people from California, really wealthy ladies from the Upper East Side, partially because doctors have made it so accessible. You can go on your lunch hour, literally...

ROMANS: You're kidding?

BERNARD: ... they make it so it's a 45-minute treatment to get injectable wrinkle fillers, like botox and the whole generation of things like that. You can get lipo in about a half an hour. So they're making it so easy to get these things.

ROMANS: Wow.

SERWER: Sarah, let me ask you, are you men really doing this? I mean, people have told me I need extreme surgery. Thank you. Extreme. Oh, you should have seen me before I had my surgery. But how much are men really doing this?

BERNARD: You know, they really are doing it. A lot of them are doing treatments like lipo, that we talked about. And believe it or not, even implants. Doctors that I've talked to said men have been asking for, believe it or not, peck implants.

SERWER: Oh, peck implants.

BERNARD: Peck implants, exactly. Calf implants, things that you wouldn't even think of. I think that what's happening is, the more people that are having this, you're realizing you really can get anything done to yourself. If something has always bothered you, you can fix it.

LISOVICZ: Sometimes when you read these stories, though, you have to think that people need injections on the brain. This is invasive surgery, which has consequences.

BERNARD: Right, absolutely.

LISOVICZ: Let's go back to the original story that has prompted a lot of the media attention in the last few days. And that is perhaps the return of silicone implants. Some of the women who testified very articulately had these terribly devastating long- lasting consequences, yet the advisory panel said, you know what, if the company goes along with it, you know, maybe tells patients, prospective patients about the possibility, then we'll do it, we'll sign off on it.

BERNARD: Well, this is a really big issue right now. The reason why people are even considering it is that, given the choice -- they've surveyed prospective plastic surgery contenders -- 90 percent of people would have opted for silicone over saline because it actually looks and feels more natural.

I didn't even know what the difference was. But it turns out that it's really the end result is actually better, I guess, if you get silicone. But the problem is, they've done these tests that have said, you know, in the last two, three years, they haven't found anything wrong. But really, people should have tested them for about 10 years probably to see the full results.

So we're not quite sure what it is. And the FDA...

LISOVICZ: But is silicone more invasive than, say, the saline?

BERNARD: It's not -- no, no. They're both inserted in the same way. It's just that people are saying, over time, silicone can have damaging effects to your body.

ROMANS: I guess I don't have a problem with women who want to look better because of surgery or because of other issues. I mean, it's people who are these chronic, chronic, you know, cosmetic surgery people.

SERWER: You're not talking about Joan Rivers, are you?

ROMANS: I'm not talking about anybody specific.

BERNARD: Because she looks totally natural, actually.

ROMANS: No, but you know what I mean. You can't say that cosmetic surgery is always vain, or whatever, because there are reasons for plastic surgery.

BERNARD: I think it's true. People have described it almost like getting a tattoo. Once you get one, you kind of want more and more and more.

You have you a lot of tattoos, Andy, don't you?

SERWER: Yes.

BERNARD: But I think that is kind of what's happening, because people are starting in their 20s and their 30s to get things like the injections, to get mini facelifts, what they're calling when you don't actually do a deep plane cut into the whole length of your face.

ROMANS: Does this hurt? Does this hurt when...

BERNARD: Yes, it does hurt. And that's something that is a little -- you know, the shows gloss over -- everyone at the end of "Extreme Makeover" is thrilled with their results, but you don't see the recovery process. You don't see how painful it is.

SERWER: So where is this all going? I mean, you mentioned "Extreme Makeover," one of my wife's favorite shows. I mean, I think it's insane.

BERNARD: I love it. She keeps calling and asking for to you get on there.

SERWER: Come on. You should hear.

BERNARD: You started it.

SERWER: I fesed up on it, you're right. So you've got "Extreme Makeover," you've got parents giving 16-year-old girls nose jobs for their sweet 16 party. I mean, where is this all headed to, yes?

BERNARD: Well, I think one of the things that changed since let's say the '70s, is that people are not giving the same looks to everybody. A lot of doctors have been talking about how they've -- they're attempting to make faces look more natural, fit in more with your particular face.

It used to be they had this sort of small upturned nose until everyone got it right.

ROMANS: And braces, too, right?

BERNARD: Exactly. So they're not going for such a mask look anymore. They're trying to make people a little less perfect than they were. So maybe it won't be so obvious if you've had plastic surgery. But I think the real problem is when people feel they have to. If everyone is doing it, if everyone is looking so long fantastic and you choose not to, maybe they're going to feel in a strange way weird peer pressure to get stuff done.

SERWER: All right. Sarah Bernard, "New York Magazine," thanks very much for coming on the program. And I'll see about that surgery myself.

Coming up on IN THE MONEY, branded. Richard Branson turned his Virgin brand into a business empire. He'll tell us about his latest moneymakers and the state of the airline industry.

Also coming up, the magazine that loves a man in a uniform. It's called "Drill," and it's out to make money by talking guy talk to guys in the armed forces. Follow that?

And sharp shooter Smith & Wesson is out to spruce up your life with its handgun brand. We'll tell you how the company is broadening its appeal.

(COMMERCIAL BREAK)

LISOVICZ: Time for a check of some of the week's other stories in our "Money Minute." The Bush administration is beginning to talk more about the job market, and it's getting specific about its goals. Treasury Secretary John Snow said Thursday he wants the economy to produce 150,000 to 200,000 new jobs a month. He said the 57,000 new jobs created in September were not enough and the job market is now his number one worry. If you're on Social Security, you'll be getting a 2.1 percent cost of living increase next year. That translates to about $19 more per month for the average retiree, but most of than crease will be eaten up by a 13.5 percent hike in Medicare premiums, which also goes into effect next year.

And Kmart is out of bankruptcy and apparently not shy about bringing its most infamous or most famous pitch woman back on the air. Martha Stewart will appear in some new ads that begin airing this weekend. This, despite the fact that Stewart is scheduled to stand trial in January on federal charges connected to the Imclone stock scandal.

SERWER: All right, Susan. Another big tech bell weather (ph) is our stock of the week. Tuesday night, Intel said its third quarter profits more than double. The computer chip maker says it benefited from the strongest demand for personal computers since the 1990s boom went bust.

Over the last year, Intel's stock has had a nice run, climbing from around $13 a share to its current price of $32. That's why Intel is our stock of the week. First of all, I got to get it off here. People who say Intel, that bugs me. It's Intel.

ROMANS: It's Intel.

SERWER: OK. It's Intel. We've got that straight.

LISOVICZ: We're in agreement on that.

SERWER: Is this stock still a core technology company? Some people say it isn't.

LISOVICZ: No question.

ROMANS: Well, it is, definitely.

LISOVICZ: Four-fifths of all PCs, right, use Intel chips?

ROMANS: Absolutely. And you know 46 press earnings ratio, that's something to keep in mind, folks, when you're watching this whole Internet space, the technology space. Some of these PEs have gotten very high after...

LISOVICZ: So it's not only the stock price. It's the price to earnings.

ROMANS: It's the price to earnings, which Andy, of course, has given us a one-on-one about before. But I want to also talk about something else that the company said. That it expects China to surpass the United States in PC purchases by the year 2010.

SERWER: Right.

ROMANS: Is that troubling or...

SERWER: I think Legend (ph) is the name of the PCs they make there, right? Legend (ph), the brand.

ROMANS: Well, it's amazing if you think about all of these companies that are moving their technology operation overseas because that is where the big growth is coming. And that's (UNINTELLIGIBLE).

SERWER: Right. And of course the stock used to be $70 back in the day. That day would be 2000.

One thing this company is doing really, really well is getting into the wifi business. That's the wireless Internet, and really their chips are number one in terms of getting that technology going on laptops. So it's really made a big bet there and it really seems to be paying off very nicely.

LISOVICZ: Who are their top competitors, actually?

SERWER: Well, AMD used to be -- Micron. And they're still kicking around, but they have a tremendous amount of market share, don't they?

ROMANS: Well, this is a Dow component, it's an important component of the Nasdaq 100 as well. So one reason why the markets have done well.

SERWER: And they've had some great leadership too, you know. Andy Grove (ph), Craig Barrett (ph), Paul Oltolini (ph) is set to take over that company very soon. All these people who have grown up in the company. Some say, you know, you can't do that anymore, too inbred, but these are three strong guys.

ROMANS: You know, a viewer might not even know how to find out if they have this stock in their portfolio. I mean, it's probably in a lot of the big mutual funds. Just go look at the top 10 holdings in all of your mutual funds.

SERWER: Right. Everybody knows it, right?

ROMANS: It's probably a core holding. You might not even know that you own it, but you do.

OK. We have to step out for a minute to pay some bills. But when we come back, a new tune for Richard Branson. The music business has already made the Virgin CEO one of the world's richest men, and now he's going for more. He's going to be along to explain.

And a new magazine aimed at soldiers that's long on skin and short on camouflage. We'll find out what it takes to make money off the military when IN THE MONEY continues.

(COMMERCIAL BREAK)

LISOVICZ: With over 250 companies, some call Richard Branson a serial entrepreneur. From records and real estate to travel and telecom, Branson is hooked on finding the next deal and making it happen. So it's not much of a surprise that the chairman of the Virgin Group has some new projects up his sleeve. Andy and I sat down with Branson earlier this week and asked him why he's taking on another venture, Virgin Pulse, a new line of Virgin electronic products.

(BEGIN VIDEOTAPE)

RICHARD BRANSON, CHAIRMAN, VIRGIN GROUP: We like a new challenge and (UNINTELLIGIBLE) dominate the electronics business around the world. And so we thought we would put our toe in the water and develop a range of electronics which were sexy and exciting, good value.

LISOVICZ: Like MP3s and wireless phones?

BRANSON: Yes, all the -- DVDs, CDs, you know, things all packaged together into one and so on. And initially, we're launching it for the first year through Target and the Virgin record stores in America. And will learn the business. And then if that works, we'll take it global and see how it goes.

LISOVICZ: You know, it's interesting, because you, yourself, don't even use a PC. You're low tech, Branson, and you're going into this market with very big, established competitors.

BRANSON: I think that one of the advantages of having myself as chairman of this company is that, you know, I'm not an electronic buff. Sony very much direct their products as if everybody out there is electronic buffs. So you've got hundreds of knobs on all their products.

Their literature is extremely difficult to understand. So we're trying to simplify it, so people like myself will actually you know, be able to read the literature and be able to use the products and enjoy the products. And so sometimes it's not such a bad thing not to be -- you know, to completely be computer illiterate.

SERWER: I want to switch gears and go to talk about airlines a little bit, because obviously you're a huge player there. But you're talking about coming to the U.S. with a discount airline.

I mean, come on, Richard. There's already JetBlue. There's already AirTran. Never mind Southwest. Again, aren't you coming into a crowded business?

BRANSON: Well, it's a very big market in America. And there are a lot of places in America that are not being serviced by JetBlue or Southwest. And we've got -- again, we've got a great brand. Virgin Atlantic flies to most of the major cities in America, and we think that we've got a chance of making a go of it. So mid next year, Virgin USA will start flying.

SERWER: Which cities are you going to -- where is it going to be rolled out?

BRANSON: Well, because we're not launching for another seven or eight months, we actually don't want to announce now where we want to fly to, because we don't want our rivals to get in there before us.

LISOVICZ: But "The Washington Post" is saying that you partner up with Atlantic Coast, which is a regional airline?

BRANSON: It's the first I've heard about it. I think, at the moment, our plan is to start from scratch. You know, to employ people from scratch. And most of our successful businesses are not in partnership with other people.

LISOVICZ: But you face certain restrictions because, in fact, you are not a U.S.-based company.

BRANSON: Yes. I mean, one of the reasons we, you know, for instance, didn't -- I mean, JetBlue originally wanted to be Virgin Blue. And one of the reasons we didn't get into bed with them was we weren't able to own an airline in America.

We've now decided that if we carry on waiting forever, we'll miss the boat. And we'd rather own 49 percent of the company than nothing. And so we will bring in other partners.

LISOVICZ: You know, when you talk about starting a new business from scratch, it requires capital, a lot of capital, especially for airlines. Have you ever thought about taking your company public? I mean, the markets are coming back, the Nasdaq is up better than 40 percent this year.

BRANSON: Well, I think individual Virgin companies will come to the market, amd Virgin Blue in Australia is likely to come to the market before the end of the year. Virgin Mobile has been an enormous success in America and in the U.K., and that we may well take to the market in the next couple of years. Our top company we will always keep private, and it's nice not to have the magnifying glass on everything.

SERWER: Well, I want to follow up on that, because, you know, of course, it is a private company. You've got offshore partnerships. A lot of people point fingers and say, is this guy really paying his fair share of taxes? I mean, how would you respond to that?

BRANSON: Well, I mean, like anybody, if we can avoid paying taxes, we will avoid paying taxes. We pay an awful lot of taxes, but you know, if it makes sense to set up a company in America rather than Britain, or in France rather than America, we will do so. We will try to mitigate our taxes as best we can, but we still pay tens of millions of pounds in taxes most years.

LISOVICZ: But you are a self-made man. I mean, you've totally gone against the grain. And that's been part of the beauty of it. You never completed high school, you're a billionaire. You're kind of a bad boy.

Do you think you could ever play by Wall Street's standards? I mean, wouldn't that sort of...

(CROSSTALK) BRANSON: I'm trying to think if that's a compliment or not.

LISOVICZ: I mean maybe you have a wear a pin striped suit occasionally.

BRANSON: No, well I think Wall Street will have to take us in our clothes or whatever. I mean, if we go public, if we take individual companies public, we'll play the public game. We'll get executives on board who are willing to troop around Wall Street, and we'll get the right chairman on board and we'll get the non-execs on board.

And there's no point in doing something unless you do it properly. I personally might not troop around Wall Street and get other people to do it.

LISOVICZ: Last quick question. We're almost out of time. Any hot air trips planned in the near feature?

BRANSON: I think I've finished the hot air ballooning. But in about 10 days' time we may be announcing something which will be quite fun and which I think you'll quite enjoy following.

(END VIDEOTAPE)

LISOVICZ: That was Richard Branson, chairman of the Virgin empire, and one could safely say, one of a kind.

ROMANS: Absolutely. You know what I really like about this guy? At a time when big CEOs, people who own a lot of different companies, are trying to pare down to their core brand, find strategic reasons why they should keep companies along the same line, he's going out there with all kinds of different ideas. If it's a good enough story, good enough idea, he just chases it.

LISOVICZ: And he's going after the big boys. He's going after Sony, he's not afraid to say.

SERWER: Right. I mean, he's done that his whole career. I also him very refreshing on a personal level.

He's actually rather a humble guy. He comes in here unescorted. You know, he says, quite candidly, "Some of my businesses fail. I'm trying new things."

"I live down in the Caribbean. I have a great life. I'm the luckiest guy in the world." I mean, it's just so nice to hear someone who is uninhibited like that.

LISOVICZ: And he's fun. He has fun. I mean, he does hot air balloons, he does these publicity stunts. He's a colorful guy, and he's a lot of fun for us to cover, that's for sure.

ROMANS: Absolutely.

LISOVICZ: Up next on IN THE MONEY, guns and fun. Discover a new magazine that's out to prove boys will be boys, even if their servicemen.

And handgun maker Smith & Wesson targets a new kind of customer. Find out how the company is taking its brand beyond the shooting range.

(COMMERCIAL BREAK)

SERWER: All right. The bazooka meets the bikini in a magazine making its debut this week. It's called "Drill," and it's designed for the American serviceman -- and we do mean man.

For a look at the magazine and why the people behind it think it's a good business idea, we're joined by the editor, Isaac Guzman. Isaac, welcome to the program. I've got to ask you, though, I mean, there's "FHM," "Maxim," stuff already out there. How is this magazine different?

ISAAC GUZMAN, "DRILL" MAGAZINE: This magazine is different because we're taking a new idea to the servicemen. We're saying, we recognize the great job you're doing for our country. We recognize the duty you feel. But we also say, hey, when you're off-duty, out of uniform, on leave, you need to have a good time.

LISOVICZ: And that's why you have a Desert Fox on the cover?.

GUZMAN: I've got Desert Fox here, and she's going to show you a good time, absolutely. And "Drill" magazine is a way, if you've got down time -- and everyone knows, even in a battle zone, you've got like six hours of waiting for the two hours of action that come your way. This is a magazine you can take with you, you can go up there, you can spend a couple of hours with it, get some laughs, take your mind off things and have fun.

ROMANS: You have 80,000 in circulation, but there must be a great pass-around rate. I mean, I can imagine (UNINTELLIGIBLE) and the Wal-Marts near the bases.

GUZMAN: Right, right. It goes around the tent.

ROMANS: Yes, and it gets passed around quite a bit.

GUZMAN: We definitely think that's going to happen. We definitely think that we're going to see a lot of guys passing it around.

LISOVICZ: But you don't want that, right?

GUZMAN: Well, we don't want that, but we also think we're going to create a sense of community, where guys are going to want to buy more than one copy. We're going to have contests, we're going to have things that bring them into the magazine, where having a copy of the magazine is going to be kind of your ticket into like the culture, the moment, the community being in the armed force.

ROMANS: What about controversial issues? There are beautiful women, you know, "How I got so drunk I couldn't barely make it back to the ship" kind of stories.

(CROSSTALK)

SERWER: I have to see that. I love that.

ROMANS: Yes, exactly. That name was withheld for safety.

So I'm wondering, are there going to be political issues? Are there going to be, you know, why it's OK for us to be in Iraq? How to respond to people who are protesting, you know?

GUZMAN: Absolutely. I think throughout the ages, you've always seen the American serviceman have had to weather the tides of politics, administrations and ideas. And we're really kind of taking their side in this, and basically, you stay under the surface, you do your job, you do your thing, you have fun with the magazine. Politics, decisions, big ideas, that's kind of on the outside of this magazine.

LISOVICZ: OK. So then let's talk about advertising, which is the lifeblood of any magazine. Of course, the first big ad that you see after the cover is "Jeep."

GUZMAN: Totally appropriate. A perfect ad.

LISOVICZ: And what about like the really grand slam, big paying Calvin Klein's, the perfumes, colognes, all those? Are they coming forward, the fragrances?

(CROSSTALK)

GUZMAN: Well, there's a branch of Ralph Lauren, and I forget which one it is. But one of the Ralph Lauren brands does something like 65 percent of its total business in the entire world through the military exchange system. So there's Ralph Lauren Polo saying, we want to be a part of this.

LISOVICZ: So they're an advertiser?

GUZMAN: We believe that they will be in the next couple of months.

SERWER: Is this sanctioned by the military, by the way? Is the military involved in this?

GUZMAN: The military is not involved. I mean, we definitely have gone and talked to people on bases. We've talked to some of the brass.

We obviously had to pass -- every magazine on the base has to go through a certain kind of vetting process. But in no way do they have anything to say in the editorial content or the direction we've taken. They've kind of just had a hands-off thing, and I think they're kind of waiting with bemused detachment to see what we're going to do.

(CROSSTALK) ROMANS: No "Drill" magazine for the women out there?

GUZMAN: Hey, if this one takes off, then we could definitely target that market, too.

SERWER: Christine, you could do it. It's an idea for you. Start it up.

ROMANS: OK. Isaac Guzman, "Drill" Magazine, thanks so much.

GUZMAN: Thank you.

ROMANS: Coming up, some killer styles from one of the world's top gun makers. We'll have the latest on the fashions and housewares catalogue from Smith & Wesson.

And you can tell us how we look and sound by emailing us at inthemoney@cnn.com. Stick around.

(COMMERCIAL BREAK)

LISOVICZ: Webmaster Allen Wastler joins us now with a bold, new solution to stop all those annoying spam emails. He also has the fun site of the week. Do tell.

ALLEN WASTLER, WEBASTER: Well, you know what, I've thought about this, and I've talked to all of my geek friends and said, well, you've got to have the filter and you've got to have the back server and you've got to have the domain and everything. It's just not going to work. Technical solutions out the window.

Let's go with an economic one. Let's tax email. Let's start taxing it, OK? The ISPs, that would be Internet service providers...

LISOVICZ: The government would love that.

WASTLER: ... can do it -- the government needs the money.

ROMANS: But only if you didn't tax emails within a certain company. Like, I want to be able to email Susan as much as possible during the day.

WASTLER: Right. Within a certain company or even within a domain. You know, say you're in one service provider's little community and you just want to have buddy talks and everything. That's fine. But the moment that you take it and say we're going to the outside Internet world, let's go, tax that bad boy.

LISOVICZ: Has that idea actually been floated?

WASTLER: It's been floated from time to time. A lot of people in the Internet community go oh, no. The Internet should be free.

(CROSSTALK)

ROMANS: It's like the telemarketers and the free speech thing, you know? I mean, you're impeding on my right to be able to go out on the street and talk to people.

SERWER: And bother people -- and bother them.

LISOVICZ: But it's reached a chronic stage now.

WASTLER: Think about this, OK -- the reason you don't get a barrage of direct mail -- you get some junk mail, but the reason it's not flooding your living room is that eventually there is a limiting cost, OK? So if you make it that there is a cost to send all of these things out, you're going to start weeding it out and weeding it out.

SERWER: But wait a second. What about the poor people who work in the filter business? Aren't you going to be putting them out of work? No, seriously. I mean, I wonder how many people who...

(CROSSTALK)

WASTLER: (UNINTELLIGIBLE)

SERWER: ... actually work in our company filtering out -- I know they're really cranking it.

WASTLER: Tell me, Andy, are they successful?

SERWER: No, they're not. I wonder how bad it would be if they weren't doing it. I mean, how many emails do you think they're -- or how much spam are they preventing? I mean, I'm getting tons of it, but would it even be worse if they weren't there? I don't know.

LISOVICZ: You can always count on computer breakdowns, though. I mean, the folks in tech ops aren't busy.

WASTLER: Yes, they're very busy. Now, it's interesting you bring up the company angle. We have surveys all the time, and this is done by an outfit called Inside Express and Unspam MLC (ph). And keep in mind, that's a spam consultant, so they're in the business of making you worry about spam.

But they say, OK, 62 percent of porn spam, people -- they surveyed 1,500 people -- makes it a hostile work environment. And 63 percent say the (UNINTELLIGIBLE) should be stopping it. Uh-oh, I think I hear the HR department getting a little nervous, saying, oh, no, you're not going to say that we -- oh, you're not going to sue us, are you, OK?

They say ISPs are disingenuous when they say they can stop it. And they say they'd be more productive -- 40 percent say they'd be more productive if they weren't having to ace out spam all the time. OK? Now, Charles Schumer, Senator...

SERWER: Senator Schumer.

(CROSSTALK)

WASTLER: (UNINTELLIGIBLE) all of the populous sort of causes. He's waving the survey around this week in the Senate, saying that's why people should sign up my do not registry legislation. Let's push this thing through, let's get it on board. That's not going to work. But you can see they're trying to get corporations more interested in the issue, because it's the corporate tech guys, they're the ones in the best position to hammer this guy.

LISOVICZ: Allen, we're all on board with you. We hate spam, but we love the fun site of the week. And this is a great one.

WASTLER: Got one for you. OK, we've got the World Series and everything, right?

LISOVICZ: Right, (UNINTELLIGIBLE).

WASTLER: Then you need to go to Heckle Depot, OK?

LISOVICZ: Christine really wants to go there.

WASTLER: Hundreds and hundreds of heckles. You can throw them out. There it is. That's the site.

And they've got is categorized by umpires, by fielding hecklers, by batting hecklers. Picked out a few of our favorites.

OK. For fielding, you've got about as much control as two rabbits on a first date! There's more holes in his glove than a Florida presidential ballot.

SERWER: And Bill Buckner.

WASTLER: And here's a good one. The cow that was used to make your glove just turned over in its grave.

LISOVICZ: But you know, Allen, I have to tell you, one of the best cultural heckles, I read it on the same site, was "I've got Internet stocks in better shape than you."

ROMANS: We love that on IN THE MONEY.

WASTLER: Here's one that we love.

SERWER: All right, Allen. We've got to leave it at that, I think. Allen Wastler, webmaster. I love that title. That's awesome. Thanks a lot.


Aired October 18, 2003 - 13:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
SUSAN LISOVICZ, HOST: Welcome to IN THE MONEY. I'm Susan Lisovicz, in for Jack Cafferty.
Coming up on today's program: cash for chaos. Washington think Saddam Hussein could be funding rebellion in Iraq with billions hidden in Syrian banks. We'll follow the money trail.

Plus, a stitch in time. Americans want to roll back the clock and trump mother nature as plastic surgery goes mainstream, with the FDA reviewing silicone implants. Find out whether we like the cutting edge just a little too much.

And extra virgin. Sir Richard Branson has put his Virgin brand on everything from airplanes to CDs. We'll look at the business Branson built as he launches yet another new product line.

Joining me today, of course, a couple of IN THE MONEY veterans, "Fortune" magazine editor-at-large Andy Serwer, and CNN correspondent Christine Romans, who smiles through her tears as the World Series begins, a Chicago area native. Flew out just to watch the Cubs on television.

ANDY SERWER, "FORTUNE" MAGAZINE: She's used to it by now, though. She's used to it.

LISOVICZ: And just to watch the Cubs on television.

CHRISTINE ROMANS, CNN CORRESPONDENT: Yes. You know you're in trouble when you fly just to Chicago just to watch the show, just to watch the game on television.

SERWER: In a bar.

ROMANS: In a bar, no less.

SERWER: You don't even go to the game.

ROMANS: No, but you can open the doors and run out in seventh inning stretch and hear somebody great singing. So, no, listen, I'm really sad about it. But it was an amazing playoff season. It really was. And I found that it was really pulling people in who don't usually watch baseball playoffs.

SERWER: That's true. ROMANS: So October baseball, wow. The ivy turning orange at Wrigley, that was great stuff.

SERWER: And they're talking about it on "The View," talking about bringing in people who usually don't watch this stuff. Also, though, the World Series, can you say anti-climatic? I mean, the Yankees against the Marlins, as if we care.

I mean, the whole thing was the playoff series. We get here, I think the Yankees are going to have some trouble with the Marlins' speed, though, because that's something they haven't faced. George Pasada (ph) going to be under the gun. And what about Fox, Susan?

LISOVICZ: Fox is a huge winner. They paid nearly $2.5 billion for the rights to Major League Baseball, the playoffs, and they are laughing all the way to the bank.

ROMANS: And you say it's anti-climatic, but listen, it's 100- year-old team and a 10-year-old team. That's cool, you know? I think that's really cool.

SERWER: Yes, I guess you're right.

LISOVICZ: Fox really likes what you're saying, Christine Romans. That's for sure.

SERWER: Oh, that's too bad.

LISOVICZ: And of course it begins in just a few hours at Yankee Stadium.

And while we're talking about the media, let's talk about perception. Bad news is good news, as anybody in the news business can tell you. Nothing grabs people's attention like word of things going wrong. And there's plenty wrong with Iraq these days.

But the Bush administration says that the media focuses way too much on the rough stuff. And, in fact, there's more to the post-war picture than suicide bombings, power cuts, and crime in the streets, even if you don't hear that much about it. For a look at what's going right, we're joined from Baghdad now by Harris Whitbeck.

Hi, Harris.

HARRIS WHITBECK, CNN CORRESPONDENT: Hi, Susan. No baseball here, but there is a lot of scorekeeping going on, mainly by the Bush administration. We're asked all the time about whether there are any good things to report. And of course there are good things to report.

If you compare the Baghdad of today with the Baghdad of the Saddam Hussein era, there are very dramatic changes. You see that in the media, in the local media, the fact that there are now more than 100 newspapers circulating in the country. And this is, in general, a free and independent media.

There are also street protests on the streets, something that didn't really happen before. And while those street protests might not necessarily be in favor of the American occupation, the very fact that they're taking place here is a sign that the political life here has dramatically changed, and that it is having a direct impact on the lives of the people here.

In terms of basic services, there is now a court system working. Schools are up and running. Electricity is on most of the time and water is on most of the time.

So in terms of infrastructure, the bigger picture, yes, things are working. Probably one of the most visible changes that we've seen this week was the introduction of the new Iraqi dinar (ph). Last Wednesday, a completely new currency circulating in the Baghdad banking system.

No longer was Saddam Hussein's picture on those bills. And people say they're happy about that. They're also happy about the fact that these bills are supposed to be counterfeit-proof. One of the problems that Iraqi consumers faced in the past was that the old bills, which were printed in country, were not counterfeit-proof, so that was a big problem.

Opinion polls here indicate -- there was one that was published just a few days ago -- indicate that people in general are very happy with the fact that Saddam Hussein is no longer in power, but they're not happy with what the occupation has brought them; mainly terrorism, and that is something that we cannot ignore. Terrorism is a factor that you cannot get away from. It affects everybody's lives because it is so unpredictable, and that, the insecurity and instability are probably the biggest issues that most Iraqis face today.

LISOVICZ: Harris Whitbeck, thank you for joining us from Baghdad.

Life in Iraq may not be as bad as many Americans think, but it's also not as good as Washington would like. One big reason is the low- level rebellion under way against U.S. forces. Investigators in Washington think a big chunk of the cash that's funding those attacks belongs to Saddam Hussein, and it's sitting in Syrian-owned banks. Damascus denies it.

For more about that, we are joined by "TIME" magazine's Washington correspondent, Adam Zagorin. And welcome to the program.

ADAM ZAGORIN, "TIME" MAGAZINE: Nice to be with you.

LISOVICZ: This is a serious problem if you have billions of dollars of potentially Saddam Hussein's money that could be funding rebellion in the country, rebellion against U.S. troops. How close is the United States to knowing whether Saddam Hussein and whether that rebellion has access to that money?

ZAGORIN: Well, not as close as they'd like to be. The United States, it was not disclosed at the time, but a little over two weeks ago sent two financial specialists to Damascus to look for the money that it believes is there, along with two financial experts from the Iraqi Central Bank.

They're in Damascus now, as I understand it, but U.S. authorities complain that they haven't been getting much cooperation from the Syrians. And as a result, they can't really determine that much about the money.

SERWER: Adam, Andy Serwer from "Fortune" magazine. I wanted to ask you about our relations with the Syrians at this point. Obviously, tensions are on the upswing here, but how do we balance between a carrot and a stick approach?

You know we have the ability to reach out to them and we have tried to do that. On the other hand, we're also contemplating force. Where do we stand there?

ZAGORIN: Well, the Israelis, for one thing, have recently bombed Syria, an alleged Palestinian terrorist camp outside Damascus. The United States did not condemn that, President Bush did not condemn it. So although we didn't hit them, others have hit them, and we have not objected.

Now, balancing the carrot and the stick, the United States has outlined a number of things that it would like Syria to stop doing. And I guess if the Syrians did those things, relations could improve quite rapidly. That involves the funding of various or hosting of various terrorist groups that are in and around Damascus.

The Syrians say that those groups are legitimately opposing Israel and Israeli occupation of Palestinian lands, and that the officers are just for administrative purposes and don't serve any military function. But the United States also claims that Syria is seeking weapons of mass destruction, which they deny, and then there's this financial component that we just discussed. So if there were progress on those fronts, things might change, but there's not much evidence that there will be.

LISOVICZ: You know, Adam, but really, what can the U.S. do? The State Department long ago identified Syria as a state sponsor of terrorism. There's virtually no business being done with Syria. So short of going in and militarily taking action, what kind of options does the U.S. have?

ZAGORIN: Well, if we want to talk about sanctions, there are two sets of sanctions that could be imposed before too long. One is a set of sanctions that is being voted in the U.S. Congress. The House of Representatives approved sanctions against Syria this week, and of course, the Senate still has to approve it.

If that happens, President Bush has indicated that he will not veto the measure, although he's traditionally been leery of sanctions. And those would isolate Syria economically. But there's another set of sanctions under the Patriot Act, which we mentioned in "TIME" magazine this week, because the senior administration official told us that if the American investigators in Damascus don't get more cooperation from the Syrian authorities, they might impose sanctions under the Patriot Act. And those could be quite targeted. For example, they could sanction a number of Syrian banks where the alleged Saddam Hussein money is located. And although those banks don't deal a lot with the United States, they do need capital to finance a good deal of Syrian trade. And if they were unable to access the capital markets, Syria could find itself a good deal more isolated than it is now.

ROMANS: But Adam, you know this diplomatic dance, all of this, takes months. Already Colin Powell several months ago began this process with the Syrian president. And in terms of U.S. troops in Iraq, months are not something that they want to be facing some kind of diplomatic showdown with. They want to toke off that money immediately.

ZAGORIN: Well, you're absolutely right. And one of the things that they have doing -- and I'm not on the ground to witness this -- but the United States has a substantial military presence obviously in Iraq, but also they have sent troops repeatedly towards the Syrian- Iraqi border, which is the place where wherever money and infiltration is taking place.

And there have been -- U.S. troops have gone in there. They have seized people and weapons and so on and so forth. And I think that, short of this financial maneuvering that you've just pointed out could take a long time, the U.S. could increase its military presence on the Syrian border. I'm not sure the Syrians would like that, but there might be no alternative.

SERWER: All right, Adam. Adam Zagorin, "TIME" magazine, Washington D.C., thanks very much.

Coming up on IN THE MONEY, the bust boom. Plastic surgery has turned trendy as an FDA panel delivers a new take on silicone implants. See whether we're using our brains when we put our bodies under the knife.

Plus, high altitude and low prices. Virgin chief Richard Branson is ready to shake up the budget airline business again. We'll let him know how you know.

And see the new magazine where hot pants and hot lead meet. It's called "Drill," and it's reading the minds of U.S. servicemen. We'll speak with the editor. Stay tuned.

(COMMERCIAL BREAK)

ROMANS: After an 11-year ban, silicone breast implants may be set for a comeback. This week, an FDA advisory panel recommended that doctors be allowed to once again use the implants. Implants, silicone or otherwise, are just a small part of the booming business of cosmetic surgery. In the last five years, cosmetic procedures have increased by 220 percent, with more minorities and men taking part than ever before.

Joining us to talk about all of this is Sarah Bernard, a journalist who covers trends in plastic surgery for "New York Magazine." Welcome to the program.

SARAH BERNARD, CONTRIBUTING EDITOR "NEW YORK MAGAZINE": Thanks.

ROMANS: There's almost a mainstreaming of the whole cosmetic surgery. I mean, everyone knows somebody who has had a little nip or a little tuck. And I wonder, what does it say about our society, that it's just like going to the dentist almost.

BERNARD: It is. It's not just celebrities, people from California, really wealthy ladies from the Upper East Side, partially because doctors have made it so accessible. You can go on your lunch hour, literally...

ROMANS: You're kidding?

BERNARD: ... they make it so it's a 45-minute treatment to get injectable wrinkle fillers, like botox and the whole generation of things like that. You can get lipo in about a half an hour. So they're making it so easy to get these things.

ROMANS: Wow.

SERWER: Sarah, let me ask you, are you men really doing this? I mean, people have told me I need extreme surgery. Thank you. Extreme. Oh, you should have seen me before I had my surgery. But how much are men really doing this?

BERNARD: You know, they really are doing it. A lot of them are doing treatments like lipo, that we talked about. And believe it or not, even implants. Doctors that I've talked to said men have been asking for, believe it or not, peck implants.

SERWER: Oh, peck implants.

BERNARD: Peck implants, exactly. Calf implants, things that you wouldn't even think of. I think that what's happening is, the more people that are having this, you're realizing you really can get anything done to yourself. If something has always bothered you, you can fix it.

LISOVICZ: Sometimes when you read these stories, though, you have to think that people need injections on the brain. This is invasive surgery, which has consequences.

BERNARD: Right, absolutely.

LISOVICZ: Let's go back to the original story that has prompted a lot of the media attention in the last few days. And that is perhaps the return of silicone implants. Some of the women who testified very articulately had these terribly devastating long- lasting consequences, yet the advisory panel said, you know what, if the company goes along with it, you know, maybe tells patients, prospective patients about the possibility, then we'll do it, we'll sign off on it.

BERNARD: Well, this is a really big issue right now. The reason why people are even considering it is that, given the choice -- they've surveyed prospective plastic surgery contenders -- 90 percent of people would have opted for silicone over saline because it actually looks and feels more natural.

I didn't even know what the difference was. But it turns out that it's really the end result is actually better, I guess, if you get silicone. But the problem is, they've done these tests that have said, you know, in the last two, three years, they haven't found anything wrong. But really, people should have tested them for about 10 years probably to see the full results.

So we're not quite sure what it is. And the FDA...

LISOVICZ: But is silicone more invasive than, say, the saline?

BERNARD: It's not -- no, no. They're both inserted in the same way. It's just that people are saying, over time, silicone can have damaging effects to your body.

ROMANS: I guess I don't have a problem with women who want to look better because of surgery or because of other issues. I mean, it's people who are these chronic, chronic, you know, cosmetic surgery people.

SERWER: You're not talking about Joan Rivers, are you?

ROMANS: I'm not talking about anybody specific.

BERNARD: Because she looks totally natural, actually.

ROMANS: No, but you know what I mean. You can't say that cosmetic surgery is always vain, or whatever, because there are reasons for plastic surgery.

BERNARD: I think it's true. People have described it almost like getting a tattoo. Once you get one, you kind of want more and more and more.

You have you a lot of tattoos, Andy, don't you?

SERWER: Yes.

BERNARD: But I think that is kind of what's happening, because people are starting in their 20s and their 30s to get things like the injections, to get mini facelifts, what they're calling when you don't actually do a deep plane cut into the whole length of your face.

ROMANS: Does this hurt? Does this hurt when...

BERNARD: Yes, it does hurt. And that's something that is a little -- you know, the shows gloss over -- everyone at the end of "Extreme Makeover" is thrilled with their results, but you don't see the recovery process. You don't see how painful it is.

SERWER: So where is this all going? I mean, you mentioned "Extreme Makeover," one of my wife's favorite shows. I mean, I think it's insane.

BERNARD: I love it. She keeps calling and asking for to you get on there.

SERWER: Come on. You should hear.

BERNARD: You started it.

SERWER: I fesed up on it, you're right. So you've got "Extreme Makeover," you've got parents giving 16-year-old girls nose jobs for their sweet 16 party. I mean, where is this all headed to, yes?

BERNARD: Well, I think one of the things that changed since let's say the '70s, is that people are not giving the same looks to everybody. A lot of doctors have been talking about how they've -- they're attempting to make faces look more natural, fit in more with your particular face.

It used to be they had this sort of small upturned nose until everyone got it right.

ROMANS: And braces, too, right?

BERNARD: Exactly. So they're not going for such a mask look anymore. They're trying to make people a little less perfect than they were. So maybe it won't be so obvious if you've had plastic surgery. But I think the real problem is when people feel they have to. If everyone is doing it, if everyone is looking so long fantastic and you choose not to, maybe they're going to feel in a strange way weird peer pressure to get stuff done.

SERWER: All right. Sarah Bernard, "New York Magazine," thanks very much for coming on the program. And I'll see about that surgery myself.

Coming up on IN THE MONEY, branded. Richard Branson turned his Virgin brand into a business empire. He'll tell us about his latest moneymakers and the state of the airline industry.

Also coming up, the magazine that loves a man in a uniform. It's called "Drill," and it's out to make money by talking guy talk to guys in the armed forces. Follow that?

And sharp shooter Smith & Wesson is out to spruce up your life with its handgun brand. We'll tell you how the company is broadening its appeal.

(COMMERCIAL BREAK)

LISOVICZ: Time for a check of some of the week's other stories in our "Money Minute." The Bush administration is beginning to talk more about the job market, and it's getting specific about its goals. Treasury Secretary John Snow said Thursday he wants the economy to produce 150,000 to 200,000 new jobs a month. He said the 57,000 new jobs created in September were not enough and the job market is now his number one worry. If you're on Social Security, you'll be getting a 2.1 percent cost of living increase next year. That translates to about $19 more per month for the average retiree, but most of than crease will be eaten up by a 13.5 percent hike in Medicare premiums, which also goes into effect next year.

And Kmart is out of bankruptcy and apparently not shy about bringing its most infamous or most famous pitch woman back on the air. Martha Stewart will appear in some new ads that begin airing this weekend. This, despite the fact that Stewart is scheduled to stand trial in January on federal charges connected to the Imclone stock scandal.

SERWER: All right, Susan. Another big tech bell weather (ph) is our stock of the week. Tuesday night, Intel said its third quarter profits more than double. The computer chip maker says it benefited from the strongest demand for personal computers since the 1990s boom went bust.

Over the last year, Intel's stock has had a nice run, climbing from around $13 a share to its current price of $32. That's why Intel is our stock of the week. First of all, I got to get it off here. People who say Intel, that bugs me. It's Intel.

ROMANS: It's Intel.

SERWER: OK. It's Intel. We've got that straight.

LISOVICZ: We're in agreement on that.

SERWER: Is this stock still a core technology company? Some people say it isn't.

LISOVICZ: No question.

ROMANS: Well, it is, definitely.

LISOVICZ: Four-fifths of all PCs, right, use Intel chips?

ROMANS: Absolutely. And you know 46 press earnings ratio, that's something to keep in mind, folks, when you're watching this whole Internet space, the technology space. Some of these PEs have gotten very high after...

LISOVICZ: So it's not only the stock price. It's the price to earnings.

ROMANS: It's the price to earnings, which Andy, of course, has given us a one-on-one about before. But I want to also talk about something else that the company said. That it expects China to surpass the United States in PC purchases by the year 2010.

SERWER: Right.

ROMANS: Is that troubling or...

SERWER: I think Legend (ph) is the name of the PCs they make there, right? Legend (ph), the brand.

ROMANS: Well, it's amazing if you think about all of these companies that are moving their technology operation overseas because that is where the big growth is coming. And that's (UNINTELLIGIBLE).

SERWER: Right. And of course the stock used to be $70 back in the day. That day would be 2000.

One thing this company is doing really, really well is getting into the wifi business. That's the wireless Internet, and really their chips are number one in terms of getting that technology going on laptops. So it's really made a big bet there and it really seems to be paying off very nicely.

LISOVICZ: Who are their top competitors, actually?

SERWER: Well, AMD used to be -- Micron. And they're still kicking around, but they have a tremendous amount of market share, don't they?

ROMANS: Well, this is a Dow component, it's an important component of the Nasdaq 100 as well. So one reason why the markets have done well.

SERWER: And they've had some great leadership too, you know. Andy Grove (ph), Craig Barrett (ph), Paul Oltolini (ph) is set to take over that company very soon. All these people who have grown up in the company. Some say, you know, you can't do that anymore, too inbred, but these are three strong guys.

ROMANS: You know, a viewer might not even know how to find out if they have this stock in their portfolio. I mean, it's probably in a lot of the big mutual funds. Just go look at the top 10 holdings in all of your mutual funds.

SERWER: Right. Everybody knows it, right?

ROMANS: It's probably a core holding. You might not even know that you own it, but you do.

OK. We have to step out for a minute to pay some bills. But when we come back, a new tune for Richard Branson. The music business has already made the Virgin CEO one of the world's richest men, and now he's going for more. He's going to be along to explain.

And a new magazine aimed at soldiers that's long on skin and short on camouflage. We'll find out what it takes to make money off the military when IN THE MONEY continues.

(COMMERCIAL BREAK)

LISOVICZ: With over 250 companies, some call Richard Branson a serial entrepreneur. From records and real estate to travel and telecom, Branson is hooked on finding the next deal and making it happen. So it's not much of a surprise that the chairman of the Virgin Group has some new projects up his sleeve. Andy and I sat down with Branson earlier this week and asked him why he's taking on another venture, Virgin Pulse, a new line of Virgin electronic products.

(BEGIN VIDEOTAPE)

RICHARD BRANSON, CHAIRMAN, VIRGIN GROUP: We like a new challenge and (UNINTELLIGIBLE) dominate the electronics business around the world. And so we thought we would put our toe in the water and develop a range of electronics which were sexy and exciting, good value.

LISOVICZ: Like MP3s and wireless phones?

BRANSON: Yes, all the -- DVDs, CDs, you know, things all packaged together into one and so on. And initially, we're launching it for the first year through Target and the Virgin record stores in America. And will learn the business. And then if that works, we'll take it global and see how it goes.

LISOVICZ: You know, it's interesting, because you, yourself, don't even use a PC. You're low tech, Branson, and you're going into this market with very big, established competitors.

BRANSON: I think that one of the advantages of having myself as chairman of this company is that, you know, I'm not an electronic buff. Sony very much direct their products as if everybody out there is electronic buffs. So you've got hundreds of knobs on all their products.

Their literature is extremely difficult to understand. So we're trying to simplify it, so people like myself will actually you know, be able to read the literature and be able to use the products and enjoy the products. And so sometimes it's not such a bad thing not to be -- you know, to completely be computer illiterate.

SERWER: I want to switch gears and go to talk about airlines a little bit, because obviously you're a huge player there. But you're talking about coming to the U.S. with a discount airline.

I mean, come on, Richard. There's already JetBlue. There's already AirTran. Never mind Southwest. Again, aren't you coming into a crowded business?

BRANSON: Well, it's a very big market in America. And there are a lot of places in America that are not being serviced by JetBlue or Southwest. And we've got -- again, we've got a great brand. Virgin Atlantic flies to most of the major cities in America, and we think that we've got a chance of making a go of it. So mid next year, Virgin USA will start flying.

SERWER: Which cities are you going to -- where is it going to be rolled out?

BRANSON: Well, because we're not launching for another seven or eight months, we actually don't want to announce now where we want to fly to, because we don't want our rivals to get in there before us.

LISOVICZ: But "The Washington Post" is saying that you partner up with Atlantic Coast, which is a regional airline?

BRANSON: It's the first I've heard about it. I think, at the moment, our plan is to start from scratch. You know, to employ people from scratch. And most of our successful businesses are not in partnership with other people.

LISOVICZ: But you face certain restrictions because, in fact, you are not a U.S.-based company.

BRANSON: Yes. I mean, one of the reasons we, you know, for instance, didn't -- I mean, JetBlue originally wanted to be Virgin Blue. And one of the reasons we didn't get into bed with them was we weren't able to own an airline in America.

We've now decided that if we carry on waiting forever, we'll miss the boat. And we'd rather own 49 percent of the company than nothing. And so we will bring in other partners.

LISOVICZ: You know, when you talk about starting a new business from scratch, it requires capital, a lot of capital, especially for airlines. Have you ever thought about taking your company public? I mean, the markets are coming back, the Nasdaq is up better than 40 percent this year.

BRANSON: Well, I think individual Virgin companies will come to the market, amd Virgin Blue in Australia is likely to come to the market before the end of the year. Virgin Mobile has been an enormous success in America and in the U.K., and that we may well take to the market in the next couple of years. Our top company we will always keep private, and it's nice not to have the magnifying glass on everything.

SERWER: Well, I want to follow up on that, because, you know, of course, it is a private company. You've got offshore partnerships. A lot of people point fingers and say, is this guy really paying his fair share of taxes? I mean, how would you respond to that?

BRANSON: Well, I mean, like anybody, if we can avoid paying taxes, we will avoid paying taxes. We pay an awful lot of taxes, but you know, if it makes sense to set up a company in America rather than Britain, or in France rather than America, we will do so. We will try to mitigate our taxes as best we can, but we still pay tens of millions of pounds in taxes most years.

LISOVICZ: But you are a self-made man. I mean, you've totally gone against the grain. And that's been part of the beauty of it. You never completed high school, you're a billionaire. You're kind of a bad boy.

Do you think you could ever play by Wall Street's standards? I mean, wouldn't that sort of...

(CROSSTALK) BRANSON: I'm trying to think if that's a compliment or not.

LISOVICZ: I mean maybe you have a wear a pin striped suit occasionally.

BRANSON: No, well I think Wall Street will have to take us in our clothes or whatever. I mean, if we go public, if we take individual companies public, we'll play the public game. We'll get executives on board who are willing to troop around Wall Street, and we'll get the right chairman on board and we'll get the non-execs on board.

And there's no point in doing something unless you do it properly. I personally might not troop around Wall Street and get other people to do it.

LISOVICZ: Last quick question. We're almost out of time. Any hot air trips planned in the near feature?

BRANSON: I think I've finished the hot air ballooning. But in about 10 days' time we may be announcing something which will be quite fun and which I think you'll quite enjoy following.

(END VIDEOTAPE)

LISOVICZ: That was Richard Branson, chairman of the Virgin empire, and one could safely say, one of a kind.

ROMANS: Absolutely. You know what I really like about this guy? At a time when big CEOs, people who own a lot of different companies, are trying to pare down to their core brand, find strategic reasons why they should keep companies along the same line, he's going out there with all kinds of different ideas. If it's a good enough story, good enough idea, he just chases it.

LISOVICZ: And he's going after the big boys. He's going after Sony, he's not afraid to say.

SERWER: Right. I mean, he's done that his whole career. I also him very refreshing on a personal level.

He's actually rather a humble guy. He comes in here unescorted. You know, he says, quite candidly, "Some of my businesses fail. I'm trying new things."

"I live down in the Caribbean. I have a great life. I'm the luckiest guy in the world." I mean, it's just so nice to hear someone who is uninhibited like that.

LISOVICZ: And he's fun. He has fun. I mean, he does hot air balloons, he does these publicity stunts. He's a colorful guy, and he's a lot of fun for us to cover, that's for sure.

ROMANS: Absolutely.

LISOVICZ: Up next on IN THE MONEY, guns and fun. Discover a new magazine that's out to prove boys will be boys, even if their servicemen.

And handgun maker Smith & Wesson targets a new kind of customer. Find out how the company is taking its brand beyond the shooting range.

(COMMERCIAL BREAK)

SERWER: All right. The bazooka meets the bikini in a magazine making its debut this week. It's called "Drill," and it's designed for the American serviceman -- and we do mean man.

For a look at the magazine and why the people behind it think it's a good business idea, we're joined by the editor, Isaac Guzman. Isaac, welcome to the program. I've got to ask you, though, I mean, there's "FHM," "Maxim," stuff already out there. How is this magazine different?

ISAAC GUZMAN, "DRILL" MAGAZINE: This magazine is different because we're taking a new idea to the servicemen. We're saying, we recognize the great job you're doing for our country. We recognize the duty you feel. But we also say, hey, when you're off-duty, out of uniform, on leave, you need to have a good time.

LISOVICZ: And that's why you have a Desert Fox on the cover?.

GUZMAN: I've got Desert Fox here, and she's going to show you a good time, absolutely. And "Drill" magazine is a way, if you've got down time -- and everyone knows, even in a battle zone, you've got like six hours of waiting for the two hours of action that come your way. This is a magazine you can take with you, you can go up there, you can spend a couple of hours with it, get some laughs, take your mind off things and have fun.

ROMANS: You have 80,000 in circulation, but there must be a great pass-around rate. I mean, I can imagine (UNINTELLIGIBLE) and the Wal-Marts near the bases.

GUZMAN: Right, right. It goes around the tent.

ROMANS: Yes, and it gets passed around quite a bit.

GUZMAN: We definitely think that's going to happen. We definitely think that we're going to see a lot of guys passing it around.

LISOVICZ: But you don't want that, right?

GUZMAN: Well, we don't want that, but we also think we're going to create a sense of community, where guys are going to want to buy more than one copy. We're going to have contests, we're going to have things that bring them into the magazine, where having a copy of the magazine is going to be kind of your ticket into like the culture, the moment, the community being in the armed force.

ROMANS: What about controversial issues? There are beautiful women, you know, "How I got so drunk I couldn't barely make it back to the ship" kind of stories.

(CROSSTALK)

SERWER: I have to see that. I love that.

ROMANS: Yes, exactly. That name was withheld for safety.

So I'm wondering, are there going to be political issues? Are there going to be, you know, why it's OK for us to be in Iraq? How to respond to people who are protesting, you know?

GUZMAN: Absolutely. I think throughout the ages, you've always seen the American serviceman have had to weather the tides of politics, administrations and ideas. And we're really kind of taking their side in this, and basically, you stay under the surface, you do your job, you do your thing, you have fun with the magazine. Politics, decisions, big ideas, that's kind of on the outside of this magazine.

LISOVICZ: OK. So then let's talk about advertising, which is the lifeblood of any magazine. Of course, the first big ad that you see after the cover is "Jeep."

GUZMAN: Totally appropriate. A perfect ad.

LISOVICZ: And what about like the really grand slam, big paying Calvin Klein's, the perfumes, colognes, all those? Are they coming forward, the fragrances?

(CROSSTALK)

GUZMAN: Well, there's a branch of Ralph Lauren, and I forget which one it is. But one of the Ralph Lauren brands does something like 65 percent of its total business in the entire world through the military exchange system. So there's Ralph Lauren Polo saying, we want to be a part of this.

LISOVICZ: So they're an advertiser?

GUZMAN: We believe that they will be in the next couple of months.

SERWER: Is this sanctioned by the military, by the way? Is the military involved in this?

GUZMAN: The military is not involved. I mean, we definitely have gone and talked to people on bases. We've talked to some of the brass.

We obviously had to pass -- every magazine on the base has to go through a certain kind of vetting process. But in no way do they have anything to say in the editorial content or the direction we've taken. They've kind of just had a hands-off thing, and I think they're kind of waiting with bemused detachment to see what we're going to do.

(CROSSTALK) ROMANS: No "Drill" magazine for the women out there?

GUZMAN: Hey, if this one takes off, then we could definitely target that market, too.

SERWER: Christine, you could do it. It's an idea for you. Start it up.

ROMANS: OK. Isaac Guzman, "Drill" Magazine, thanks so much.

GUZMAN: Thank you.

ROMANS: Coming up, some killer styles from one of the world's top gun makers. We'll have the latest on the fashions and housewares catalogue from Smith & Wesson.

And you can tell us how we look and sound by emailing us at inthemoney@cnn.com. Stick around.

(COMMERCIAL BREAK)

LISOVICZ: Webmaster Allen Wastler joins us now with a bold, new solution to stop all those annoying spam emails. He also has the fun site of the week. Do tell.

ALLEN WASTLER, WEBASTER: Well, you know what, I've thought about this, and I've talked to all of my geek friends and said, well, you've got to have the filter and you've got to have the back server and you've got to have the domain and everything. It's just not going to work. Technical solutions out the window.

Let's go with an economic one. Let's tax email. Let's start taxing it, OK? The ISPs, that would be Internet service providers...

LISOVICZ: The government would love that.

WASTLER: ... can do it -- the government needs the money.

ROMANS: But only if you didn't tax emails within a certain company. Like, I want to be able to email Susan as much as possible during the day.

WASTLER: Right. Within a certain company or even within a domain. You know, say you're in one service provider's little community and you just want to have buddy talks and everything. That's fine. But the moment that you take it and say we're going to the outside Internet world, let's go, tax that bad boy.

LISOVICZ: Has that idea actually been floated?

WASTLER: It's been floated from time to time. A lot of people in the Internet community go oh, no. The Internet should be free.

(CROSSTALK)

ROMANS: It's like the telemarketers and the free speech thing, you know? I mean, you're impeding on my right to be able to go out on the street and talk to people.

SERWER: And bother people -- and bother them.

LISOVICZ: But it's reached a chronic stage now.

WASTLER: Think about this, OK -- the reason you don't get a barrage of direct mail -- you get some junk mail, but the reason it's not flooding your living room is that eventually there is a limiting cost, OK? So if you make it that there is a cost to send all of these things out, you're going to start weeding it out and weeding it out.

SERWER: But wait a second. What about the poor people who work in the filter business? Aren't you going to be putting them out of work? No, seriously. I mean, I wonder how many people who...

(CROSSTALK)

WASTLER: (UNINTELLIGIBLE)

SERWER: ... actually work in our company filtering out -- I know they're really cranking it.

WASTLER: Tell me, Andy, are they successful?

SERWER: No, they're not. I wonder how bad it would be if they weren't doing it. I mean, how many emails do you think they're -- or how much spam are they preventing? I mean, I'm getting tons of it, but would it even be worse if they weren't there? I don't know.

LISOVICZ: You can always count on computer breakdowns, though. I mean, the folks in tech ops aren't busy.

WASTLER: Yes, they're very busy. Now, it's interesting you bring up the company angle. We have surveys all the time, and this is done by an outfit called Inside Express and Unspam MLC (ph). And keep in mind, that's a spam consultant, so they're in the business of making you worry about spam.

But they say, OK, 62 percent of porn spam, people -- they surveyed 1,500 people -- makes it a hostile work environment. And 63 percent say the (UNINTELLIGIBLE) should be stopping it. Uh-oh, I think I hear the HR department getting a little nervous, saying, oh, no, you're not going to say that we -- oh, you're not going to sue us, are you, OK?

They say ISPs are disingenuous when they say they can stop it. And they say they'd be more productive -- 40 percent say they'd be more productive if they weren't having to ace out spam all the time. OK? Now, Charles Schumer, Senator...

SERWER: Senator Schumer.

(CROSSTALK)

WASTLER: (UNINTELLIGIBLE) all of the populous sort of causes. He's waving the survey around this week in the Senate, saying that's why people should sign up my do not registry legislation. Let's push this thing through, let's get it on board. That's not going to work. But you can see they're trying to get corporations more interested in the issue, because it's the corporate tech guys, they're the ones in the best position to hammer this guy.

LISOVICZ: Allen, we're all on board with you. We hate spam, but we love the fun site of the week. And this is a great one.

WASTLER: Got one for you. OK, we've got the World Series and everything, right?

LISOVICZ: Right, (UNINTELLIGIBLE).

WASTLER: Then you need to go to Heckle Depot, OK?

LISOVICZ: Christine really wants to go there.

WASTLER: Hundreds and hundreds of heckles. You can throw them out. There it is. That's the site.

And they've got is categorized by umpires, by fielding hecklers, by batting hecklers. Picked out a few of our favorites.

OK. For fielding, you've got about as much control as two rabbits on a first date! There's more holes in his glove than a Florida presidential ballot.

SERWER: And Bill Buckner.

WASTLER: And here's a good one. The cow that was used to make your glove just turned over in its grave.

LISOVICZ: But you know, Allen, I have to tell you, one of the best cultural heckles, I read it on the same site, was "I've got Internet stocks in better shape than you."

ROMANS: We love that on IN THE MONEY.

WASTLER: Here's one that we love.

SERWER: All right, Allen. We've got to leave it at that, I think. Allen Wastler, webmaster. I love that title. That's awesome. Thanks a lot.