Return to Transcripts main page

CNN Newsroom

Obama Set to Announce Economic Team; Citi on the Brink; Reaction to $20 Billion Cash Infusion for Citi; Holiday Bargains

Aired November 24, 2008 - 11:00   ET

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

TONY HARRIS, CNN ANCHOR: And it is Monday, November 24th. And here are the top stories we're following for you this hour in the CNN NEWSROOM.
The president-elect set to announce his money team today. Plus, Barack Obama's ambitious plan to get the country out of the financial crisis.

One of the world's biggest brands in high finance pulled from the brink. The government rescues Citigroup from near collapse.

A spectacular debacle that cost you, the taxpayer, millions of dollars. Military housing, homes promised for this field but never built.

Good morning, everyone. I'm Tony Harris. And you are in the CNN NEWSROOM.

Confronting a financial crisis. We are just an hour away from a news conference by President-elect Barack Obama. He will introduce his economic team and lay out plans to deal with the country's financial meltdown.

All this as the government tries to keep financial giant Citigroup from collapsing. We will have complete live coverage and in-depth reports from our correspondents Christine Romans and Allan Chernoff on the Citigroup bailout, and Ed Henry covering the president-elect.

You know, a top adviser says Barack Obama will do what's necessary to fix the economy.

Let's get to Ed Henry now live in Chicago.

And Ed, the president-elect delivered the Democratic address on Saturday. What did we learn about his recovery plan, and who is on the money team?

ED HENRY, CNN WHITE HOUSE CORRESPONDENT: Well, good morning, Tony.

We do not have a lot of details yet. But what the president- elect suggested over the weekend is that he's planning on a much larger economic stimulus plan than he talked about on the campaign trail. He talked only about $175 billion. Now some leading Democrats are talking anywhere from $500 billion to $700 billion. What the president-elect also vowed over the weekend is that he can save or create up the to 2.5 million jobs over the first two years of his administration. A heavy task, and what he's going to need to do that is lay out this team of advisers.

First of all, Tim Geithner, the head of the New York Fed, a known quantity on Wall Street, he's in line to be treasury secretary. We'll see him in an hour. And obviously when the news first broke on Friday that he was going to be treasury secretary, you saw that late rally on Wall Street since he's a known quantity.

Also, Lawrence Summers, former treasury secretary, now in line to head the National Economic Council. That's essentially the chief economic adviser inside the White House itself. It's sort of a powerhouse policymaking shop.

We're also learning that Christina Romer will be in charge of the Council of Economic Advisers. That's a separate entity within the White House itself. More about research data, pulling all the information together for the incoming president so he knows sort of what policies he wants to put together. And in particular, what we're hearing is this massive economic stimulus plan that he's already talking to congressional leaders about getting the ball rolling now so that it will be ready to roll out and actually pass in the House and Senate, when he takes office on January 20th of next year -- Tony.

HARRIS: OK. Good stuff. And Ed, you'll be there for us next hour in Chicago live.

President-elect Barack Obama will be announcing his economic team in the next hour. And we will bring you the news conference live from the Chicago Hilton.

Citigroup stocks surging this morning, hours after Washington pulled the company from the brink. Citi, once the world's largest financial institution, brought to its knees by risky mortgages.

CNN's Christine Romans, part of the CNN money team, at the New York business desk.

Christine, good to see you.

CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: Hi, Tony.

HARRIS: Let's drill down a bit here. Let's drill down on the risky mortgages, part of the announcement this morning. The Treasury and the FDIC, I believe, guaranteeing -- is it $306 billion worth of risky loans on Citi's books? My question is, what is Citi doing to get those illiquid assets off its books?

ROMANS: Well, here's the thing, until last week, investors, at least, thought the U.S. government was going to mop up those toxic assets under TARP. Right? And then the treasury secretary said, no, we're going to just recapitalizing the banks, we're going to inject money directly into the banks. That's the best thing for the banks and for the financial system and for shareholders. And then investors turned tail. They said, well, how are they going to get rid of all of these toxic assets if the government isn't going to take them? And Citi was seen as one of the top beneficiaries of the old way we were going to do TARP. Remember the original way we were going to do TARP? And so there was a lot of concern about that.

You know, Citi made a lot of money on these bad bets.

HARRIS: Yes.

ROMANS: When everything was going great -- I mean, I'm not quite sure where the risk management was and where the checks and balances were.

HARRIS: Good point.

ROMANS: Obviously, there weren't checks and balances, otherwise they wouldn't be in this potion. But they went full throttle for these risky bets on the mortgage market and gobbled them up. And now they can't even value them.

And who would buy them? You know, maybe some day in two or three years there will be value for some of these things, these underlying assets. But no one knows what they're worth -- Tony.

HARRIS: Well, Christine, if you can't get those illiquid assets off the books, isn't this good money after bad?

ROMANS: Well, that would be the big question. And that's what detractors would say, except that a wholesale collapse of Citi would be far, far worse for the global economy.

HARRIS: We keep hearing that. We just keep hearing that. They're too big to fail. They're too big to fail.

ROMANS: You know what, Tony? Let me tell you something.

HARRIS: So no one can fail now?

ROMANS: I keep saying when does it end? Does it end here? When does it end?

And do you know what my sources tell me? They say, "Christine, that's the wrong question to be asking. This is just the beginning."

HARRIS: Well, is Citi being asked -- I'm thinking back on the big three on Capitol Hill last week. Is Citi being asked to sell nonperforming assets?

ROMANS: They're the only strings that I know of for this. So to get this $20 billion cash infusion out of the TARP, and then they get the backstop of the $306 billion. And there are some strings here.

There's $27 billion in preferred shares that the taxpayer gets at 8 percent interest. So the taxpayer is getting some interest. Also, Citi has to put some kind of caps on executive compensation. I don't know more about that other than they're supposed to do that.

I know that they're supposed to go in and help rework some of these mortgages a la IndyMac and the FDIC. And a lot of people say that worked. When IndyMac failed, the FDIC went in and started reworking some of these mortgages, so Citi's expected to do that.

And they're not expected -- they can't pay more than a penny of a dividend to their shareholders. You've got to pay the government back before you can go out and pay all your shareholders. So there are some strings, Tony, but you know, not many.

HARRIS: Well, Christine, if we're talking about the illiquid assets, if we're talking about these mortgage-backed securities, maybe one thing to consider is getting Sheila Bair of the FDIC the $24 billion that she's requesting.

ROMANS: You and your $24 billion.

HARRIS: Just a thought.

ROMANS: You know, I want to make one quick point.

HARRIS: Sure.

ROMANS: One of the things that people like on the street today is the fact that somebody involved in this Citibank bailout was Timothy Geithner, who will be the next treasury secretary. And they like it on the streets that there isn't what they call transition paralysis.

That means somebody in there right now looking through the wreckage of this financial crisis and trying to craft these solutions is going to be the person leading Obama next year. And so they like the fact that there will be that continuity.

HARRIS: Yes. And so far the markets reacting positively, as we can see, up over 250 -- is that 280 points so far this morning?

Christine, good to see you. Thank you.

ROMANS: You're welcome.

HARRIS: You know, Citi's meltdown -- reaction now from the company and its customers.

CNN Senior Correspondent Allan Chernoff outside Citigroup headquarters.

(BEGIN VIDEOTAPE)

ALLAN CHERNOFF, CNN SR. CORRESPONDENT: "A very positive step" is how the chief financial officer of Citigroup describes the injection of new capital from the government. He says it's a huge amount of capital that should allow Citigroup to endure some very challenging times.

Now, one employee who entered the bank early this morning said to us, "We're going to make lots of money once the economy stabilizes here and overseas." He said that's what the chief executive officer has been telling employees inside of the banks. And indeed, bankers believe here at Citigroup that they are well positioned in spite of the huge losses that they have suffered in the mortgage market, in the real estate market, and the fact that the government had to come in and offer this new bailout.

Customers, well, customers are saying they feel the government simply had to act.

UNIDENTIFIED MALE: Of course you have to be worried. I wouldn't like to be a shareholder at this point. I would prefer to be a client, which is where I am. But I think the government is doing the right thing.

Citi is too big to fail. It would be disastrous for the financial markets and the economy in general.

UNIDENTIFIED MALE: At this stage you've got to step back and say it's probably the right thing to do, because the stock market just has been up and down too much. You can't have the drops we've been having over the last couple of weeks.

CHERNOFF: So we need to stabilize and stabilize Citigroup?

UNIDENTIFIED MALE: You know, I say that, but I hope it works. Nothing has shown me that it's going to work yet.

CHERNOFF: But there is certainly not a celebratory mood here at Citigroup. The bank, after all, announced last week it would be laying off 52,000 employees. And the chief executive officer says he is committed the to streamlining the company's operations.

Allan Chernoff, CNN, New York.

(END VIDEOTAPE)

HARRIS: Well, President Bush is leaving his options open. He says if other financial institutions need help we could see more rescues like the one Citigroup is getting. The president speaking a short time ago with his treasury secretary, Henry Paulson, by his side.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: This is a tough situation for America, but we'll recover from it. And the first step to recovery is to safeguard our financial system.

And last night, on Air Force One, coming back from Peru, I talked at length to the secretary about his recommendation on the decisions made to safeguard Citigroup. We have made these kind of decisions in the past, made one last night. And if need be, we're going to make these kind of decisions to safeguard our financial system in the future.

(END VIDEO CLIP)

HARRIS: Mr. Bush says he talked with Barack Obama about the decision to rescue Citigroup. He says he will continue to keep the president-elect informed about big decisions during the transition.

Going bankrupt, a more common sign of our times. It is deeply personal, often humiliating. And for many, painfully unavoidable.

(COMMERCIAL BREAK)

HARRIS: Let's get a market check here.

Boy, look at this. The Dow off to a really nice start so far. As you can see, positive territory and then some.

The Dow up 282 points. Reaction to the rescue of Citigroup, for the most part. Boy, you would have to say. Positive so far, but we'll see what happens in the last hour of the trading day.

Anything seems to happen, can and will and does happen in the last hour of the trading day. But a good start to the Dow on this Monday, Thanksgiving week, 287 points in positive territory.

Steve Forbes, the editor of the business magazine "Forbes," has some ideas for Barack Obama. Listen to what he says the incoming president should do.

(BEGIN VIDEO CLIP)

STEVE FORBES, EDITOR, "FORBES" MAGAZINE: First he has to deal with the credit crisis. There's an arcane accounting rule that's now destroying insurance companies after it destroyed banks called mark- to-market. If he wants instant stimulus for the housing market, he should have Freddie and Fannie guarantee explicitly their debt and announce we're going to refinance mortgages at 4.5 to 5 percent, and do away -- bring back the uptick rule on short selling.

And on this economic side, if you reduce tax rates, say, for the middle class of a rate of 25 to 15, reduce business taxes, which now are the second worst in the developed world, from 35 percent to 25 percent, those measures together would help end the credit crisis and get the economy moving again.

(END VIDEO CLIP)

HARRIS: A lot of free advice for the president-elect. Forbes sought the Republican nomination for president in 1996.

President-elect Barack Obama will be announcing his economic team in the next hour. We will bring it to you live right here in the CNN NEWSROOM.

Bankruptcy, it is the bottom line for financial hopelessness, the point when debt becomes simply overwhelming. And it may not surprise you to learn personal bankruptcy is now soaring.

CNN's Kate Bolduan has one woman's story.

(BEGIN VIDEOTAPE)

JEN PALUMBO, FILED FOR BANKRUPTCY: You're a good little baby, aren't you?

KATE BOLDUAN, CNN CORRESPONDENT (voice-over): Jen Palumbo is smiling now, but the last few years for her have been anything but joyful.

There's a lot of soul-searching during that process of, you know, how much in debt am I? And how much do I have in my account? And have I depleted my savings?

And it's ugly. It's ugly when you get to that point.

BOLDUAN: That point was the snowball effect of losing her health insurance, getting hit with more than $10,000 in medical bills, and being temporarily out of work in this foundering economy. She downsized her car, moved in with a friend, and found a job. But it all eventually led to bankruptcy.

PALUMBO: And I was in a situation where it was either, you know, keep paying minimum and continue to drive my credit down because I wasn't paying the full bills on anything, or consider doing the bankruptcy.

BOLDUAN (on camera): More and more people are facing the same harsh reality. The American Bankruptcy Institute says last month, personal bankruptcy filings nationwide jumped 40 percent from the same time a year ago.

SAMUEL GERDANO, AMERICAN BANKRUPTCY INST.: It reflects hand in glove the kind of economic crisis that households are facing. And we expect that number to continue to rise.

BOLDUAN (voice-over): So much so, analysts project the number of new filings this year will exceed one million. Experts, including Jen Palumbo's bankruptcy attorney, say the initial uptick in cases resulted from the foreclosure crisis.

But now...

NANCY O. RYAN, BANKRUPTCY ATTORNEY: Now I'm seeing more people who are more probably higher income who have gone through their savings, who have gone through -- you know, they're starting to cash in retirement. They're doing everything they can, and they just can't hold on.

BOLDUAN: Palumbo says filing bankruptcy is still difficult to talk about. But now with a clean slate, she'll tell you things are looking up as she can finally start looking long term.

PALUMBO: I think ultimately that's how I would like the story to end, would be to have my own farm. That's always been my dream.

Hi Lovie (ph). You're a sweetheart.

BOLDUAN: Kate Bolduan, CNN, Lovettsville, Virginia.

(END VIDEOTAPE)

HARRIS: Keeping your money safe. What to do should you have Citibank checking or savings accounts. Personal Finance Editor Gerri Willis has today's top tips.

(COMMERCIAL BREAK)

HARRIS: Gerri Willis time. You know, Citibank has 200 million customer accounts worldwide. If one of them is yours, you rightly want to know, is my money safe?

Personal Finance Editor Gerri Willis, there she is joining us from New York.

Gerri...

GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: Hey, Tony.

HARRIS: You know how we like to get to the bottom line on these. So give us the bottom line for Citi depositors.

WILLIS: All right. Well, I know people out there are concerned, but the good news is the government is standing behind this bank, Citibank. No buyer here. It's not being taken over. The government is actually guaranteeing bad investments and investing even $20 billion on top of the $25 billion that's already put into the company from the $700 billion bailout passed by Congress last month.

Now, for depositors, Tony, this means no changes to your checking account or any other account you might have.

HARRIS: OK.

WILLIS: However, if you have an account with Citibank, you want to make sure you're within those FDIC coverage limits. Here's a breakdown of what they are.

This is an insurance policy the federal government gives you. If you have a single account, you want to make sure that the money you have is less than $250,000 at Citi. Joint account, under $250,000 per co-owner. Retirement accounts the same. The reality here is you've got to make sure you're within the federal guidelines to get coverage.

Now, here's the news you need to know about. If you have stocks, bonds, mutual fund shares, life insurance policies or annuities, those aren't covered by the federal insurance program. So you want to make sure you pay attention to that as well.

HARRIS: And those limits raised substantially, recently, as I'll recall. WILLIS: That's right, part of the bailout. Part of the bailout.

HARRIS: Right, exactly.

Gerri, you said there's another less obvious issue for customers of Citi and other banks benefiting from the bailout. What's that?

WILLIS: There is. Well, look, bank fees.

I know you don't pay a lot of attention to this. They are high. They are rising.

HARRIS: Yes.

WILLIS: Not only are these institutions getting taxpayer- financed bailouts, they're also charging you sky-high fees. Consider Citigroup. That's who we've been talking about. It's raising interest rates on a fifth of its 54 million credit card holders -- there are about 10 million people -- by 2 to 3 percent.

It's happening with lots of companies out there. They're really pulling in the horns on the credit card debt.

In fact, fees are setting new records across the board. Consider these results from a new bankrate.com survey. Check this out.

Bounced check fees up 2.5 percent. Interest checking minimums -- now, that's if you have a checking county that pays you an interest rate, they keep raising how much you have to have in the account as a minimum. This year it's up 4 percent. ATM surcharge, if you use an ATM out of network, those fees are up 11 percent.

These numbers are going higher, higher, higher every year. And we are bailing these folks out. So consider the fairness in equity of that.

You really want to pay attention to the small print on your statements you're getting from your bank. That's how you're going to find out what new fees might be in your future.

HARRIS: Yes. Just go to your bank's ATM if you can. And I know it's tough to do that sometimes. But man, those fees are ridiculous.

WILLIS: It is tough to do that. You've got to pay attention and be on the watch.

And of course, a lot of people out there as well, Tony, they have been paying attention to Citi because they've been offering sky-high returns for people investing in certificates of deposit. So you might not want to shop on the basis of who is actually offering the highest rate of return. You might also want to think about safety and soundness.

And if you have questions, send them to me at gerri@cnn.com. We want to hear from you.

HARRIS: And Gerri, we are watching a nice rally so far. The Dow up over 300 points on the day.

WILLIS: Love that.

HARRIS: Thanks, Gerri. Appreciate it.

WILLIS: My pleasure.

HARRIS: OK -- 298.

As the most serious credit crisis in decades rocks your finances, CNNMoney.com has some advice and some answers. Just check out our special report, "America's Money Crisis," updated all the time. That's at CNNMoney.com.

You know, there are ways to give gifts that can help you keep your cash this holiday season. iReporters are sharing ways to share the holiday spirit.

(BEGIN VIDEO CLIP)

CHARITY WOODS, IREPORTER: Hi. I'm Charity Woods. I'm here chatting with Kathie, and we're talking about how we can contribute in our own way to make things a little bit better during these economic times.

One thing that I do is I provide food for a gentleman in my neighborhood who is homeless. And I provide clothes and things like that for him. I think, you know, it makes him feel good to know that somebody looks out for him.

And then also, we provide food for each other. And our family and our neighbors, we get together and try to have a good time and lift our spirits. You know, food and socializing and talking, you know, and just really sharing our feelings with one another. I think it makes us feel good and feel better.

You know, my family, we don't do anything else. We will feed you. And so we found that that's a way to kind of help us get through. It cuts back on our grocery bills and it lifts our spirits, and we're able to sort of sit back and laugh at the good and the bad.

And so that's one way that I've learned how to contribute in these hard economic times, and to just help push through and look after somebody else while looking after yourself.

Thank you.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

HARRIS: Barack Obama's economic stimulus plan expected to be much bigger than the $175 billion package he proposed during the campaign. We will learn more when the president-elect speaks next hour. He outlined his goals over the weekend.

(BEGIN VIDEO CLIP)

BARACK OBAMA (D-IL), PRESIDENT-ELECT: I have already directed my economic team to come up with an economic recovery plan that will mean 2.5 million more jobs by January of 2011, a plan big enough to meet the challenges we face that I intend to sign soon after taking office. We'll be working out the details in the weeks ahead, but it will be a two-year nationwide effort to jump-start job creation in America and lay the foundation for a strong and growing economy.

We'll put people back to work rebuilding our crumbling roads and bridges, modernizing schools that are failing our children and building wind farms and solar panels, fuel-efficient cars and the alternative energy technologies that can free us from dependence on foreign oil and keep our economy competitive in the years ahead.

(END VIDEO CLIP)

HARRIS: The Obama administration gearing up, the Bush administration winding down. You know, a lot can happen in the two months before Obama takes office. An economic danger zone in the transition period.

The story now from Jim Acosta.

(BEGIN VIDEOTAPE)

JIM ACOSTA, CNN CORRESPONDENT: It's an American transition tradition. President-elect buys his time and puts together his cabinet, while the current commander-in-chief winds down, bidding the world farewell. But there are growing fears this tradition has left the nation in a power vacuum, exposed to an economic crisis without clear leadership.

BOB SCHIEFFER, "FACE THE NATION": This interim period. How would you describe this period? Some economists say we're in a pretty dangerous time here right now.

AUSTAN GOOLSBEE, OBAMA ECONOMIC ADVISER: I think it's a dangerous time. It's hard to deny that.

ACOSTA: One Obama economic adviser says the incoming president has urged the current president to do more to fix the economy.

GOOLSBEE: We have repeatedly called on the administration to do things like a stimulus, but the president did not appear to be interested in doing that.

ACOSTA: Mr. Obama has kept a low profile in transition, maintaining there's only one president at a time. But some Democrats say this is no time for the future president to stay on the sidelines.

SEN. CARL LEVIN (D), MICHIGAN: I would like him to become -- at least offer to become more involved. And I think that offer would be welcomed, not just by the Democrats in the House and the Senate, but also by the White House itself.

ACOSTA: One idea is to change the Constitution, and swear in Mr. Obama as soon as possible.

THOMAS FRIEDMAN, "NEW YORK TIMES" COLUMNIST: I think we should seriously consider moving up the inauguration date. Because I don't know that we have two months to have a political vacuum at this moment in this economic crisis.

ACOSTA: Former Secretary of State, James Baker, is proposing a historic face-to-face meeting between both men to generate ideas to stabilize the markets.

JAMES BAKER, FMR. SECRETARY OF STATE: I think just the mere fact of their sitting down together and seeing if there's not one thing they could come together on would do a lot to restore confidence and remove the anxiety and fear that's out there.

(END VIDEOTAPE)

HARRIS: And Jim Acosta joins us live now from Washington, D.C.

Jim, good to see you.

Let me pick up on the Jim Baker point there. I think that's pretty intriguing. Any momentum that you have picked up for a meeting between the president-elect and the president, with their respective teams, across the cabinet table I'm envisioning here, to work out proposals? That might be an encouraging sign for the markets.

ACOSTA: Don't bet on it, Tony. After all that, there may not be much hope for dual presidential initiatives. As one adviser to the Obama transition team put it, the next two months are an opportunity, is the way he put it, to put together a team and a plan. So as much as everyone would like to see these two men get together, there are several problems.

One is they don't see eye to eye on the economy. That's one.

The other is, and James Baker sort of eluded to this yesterday, that if President-elect Obama were to, you know, get together with the president and hammer out something, that he would sort of in a way be tied to this current administration and its handling of the crisis, which is something the Obama transition has said they're not big fans of.

So for right now, what we're expecting to see is this rollout of this economic team that the president-elect is planning for today. And they're hoping to ride some of that momentum. They like what happened to the markets on Friday. They like what's happening right now. And they think that that's having an effect.

HARRIS: All right. Jim Acosta for us in Washington, D.C.

Wishful thinking on my part.

ACOSTA: Yes.

HARRIS: Jim, appreciate it. Thank you. ACOSTA: You bet.

HARRIS: President-elect Barack Obama will be announcing his economic team in the next 30 minutes. We will be brining it to you live from Chicago, right here in the CNN NEWSROOM.

So there are just four days to go until black Friday, and the unofficial start of holiday shopping season. A new survey out today says many of you are planning on spending less this year than you did last year. Whoa! Susan Lisovicz is at the New York Stock Exchange with more.

Susan, I say whoa because if we spend considerably less, that could be a real problem for the economy, and the retail sector in particular.

SUSAN LISOVICZ, CNN CORRESPONDENT: No question about it, Tony.

Let's not call it black Friday, let's call it bleak Friday. What we do, what we spend, accounts for more than two-thirds of economic activity. So yes, if we're going to spend a lot less that is not good. And it should be kind of a duh that, yes, Americans are going to cut back on spending this holiday season. You were just talking about the state of the economy with Jim -- 55 percent of those surveyed by the Consumer Federation of America and the Credit Union National Association said they were planning to reduce spending this holiday season. That's way up from an average of 30 to 35 percent last year.

The No. 1 reason, well, economic uncertainty. Others said, having less money or the desire to save what money they have influencing decisions. More than 10 percent cited higher prices while 9 percent said lower income was the most important reason for spending less this holiday season -- Tony.

HARRIS: Wow. So, Susan, is there any good news in the survey?

LISOVICZ: Well, actually, you know, it's interesting that some people are saying higher prices because, you know, when it comes to shopping this holiday season, no question you'll be able to stretch your dollars more this season. Expect deep discounts at the malls this Friday. You know, from my observation they're already out there.

HARRIS: Yes.

LISOVICZ: More discounts will be had on cyber Monday, the first day back to work from the Thanksgiving holiday. The National Retail Federation says nearly 85 percent of online retailers will have special promotions that day. So expect bargain hunters to bring their credit cards to work next Monday.

Meanwhile, well, there is plenty of bargain hunting on Wall Street today following the government's plan to rescue Citigroup and the imminent announcement of President-elect Obama's economic team. Checking the numbers, the Dow Industrials up 306 points, or 3.75 percent. The Nasdaq and the S&P 500 are up at least 4.25 percent. That's a nice rally for the first day of this holiday shortened week.

HARRIS: If we could --

LISOVICZ: That's a holiday in itself.

HARRIS: How about this, Susan, if we could just get through the last hour of the trading day in good shape, wouldn't that be wonderful?

LISOVICZ: Amen to that, brother Tony.

HARRIS: All right, Susan. See you next hour. Thanks.

So we get it. These are tough times. And holiday shopping is going to be a little tougher this year. Veronica De La Cruz has been online this morning and she joins us with some tips.

Veronica, good to see you. Good morning.

VERONICA DE LA CRUZ, CNN CORRESPONDENT: Good to see you. Good morning.

Can I call you brother Tony? Is that OK?

HARRIS: Absolutely. Any time you want.

DE LA CRUZ: OK, good. I'm glad.

All right. Well, we've got some ways to save, Tony. We're going to go ahead and show you this special online at cnn.com. You can find it at cnn.com/shopping. Lots of ways to save. Lots of links to different articles. Starting with this one. This is an article from realsimple.com which offers up advice, Tony, like saving yourself from buyer's remorse by doing a lap -- maybe doing a lap around the mall, giving yourself 30 minutes before making that purchase.

And it also says to forget being shy and simply ask for that discount or free delivery. These are tough times. Salespeople are going to get in there and do whatever they can.

Also, do some hybrid shopping. Browse the stores. Find the items that interest you, then hit the web to find the same thing cheaper online.

The special also links to other articles like this one -- 50 gifts for $50. People are always wondering what to get someone. And there you go. Fifty gifts for a bargain.

Or this one, if you're crafty, simple ways to save some cash this holiday season by making gifts yourself. This article offers tips on how to make everything from stuffed animals to stationery from recycled books, also knitted socks and headbands.

And then of course you can always weigh in on the quick book. The question is: Will you be spending less on gifts this year than in previous years? And what do you think, Tony?

HARRIS: It's less. It's less. It's got to be less. It's got to be less.

DE LA CRUZ: 77 percent of people are saying, yes, you're absolutely right.

And we've also been taking up a discussion on the Facebook group. Most people have been posting ways to save, offering their advice.

This is Dong Tran in San Francisco who writes, "Our family switched to a secret Santa gift exchange several years ago. Ever since we've spent about 10 percent of what we used to on Christmas gifts. Anybody who is not old enough to understand the process is automatically eligible for a gift."

That's a great tip, right?

HARRIS: That is. That's good.

DE LA CRUZ: Good tip.

And of course, you, too, can join in on the discussion. Just search for Veronica De La Cruz in the CNN NEWSROOM with Tony Harris. You can also follow me on Twitter at twitter.com/veronicadlcruz.

There's the picture, Tony.

HARRIS: Oh, look at that.

DE LA CRUZ: He looks so suave. You look handsome, so handsome.

HARRIS: Hey, I tell you what, I like the Kenny Loggins approach to the holidays (ph). Shower the people -- that's James Taylor -- shower the people you love with love. Lots of hugs, lots of kisses this holiday season.

DE LA CRUZ: I love that.

HARRIS: Let me see if I can get the music cued up next block.

Veronica, appreciate it. Thank you.

So you want some more ideas on how to save money? "Tightwad Tod" gives his advice. That's next in the CNN NEWSROOM.

(COMMERCIAL BREAK)

HARRIS: Well the economy is a downright drag right now. But you shouldn't have to give up everything. How to save on clothes, the movies, restaurants, travel. "Tightwad Tod" Marks knows it all. He's a senior project editor for Consumer Reports. And he has his own blog -- Tightwad Todd.

Good to see you, sir. Thanks for your time this morning. "TIGHTWAD TOD" MARKS, "CONSUMER REPORTS": My pleasure. Happy to be here.

HARRIS: Yes, I've got to ask you, are there really good deals out there right now? Just sort of the general question here. I've got to tell you, I went to Circuit City recently looking for a really good deal after the closure announcement and was really disappointed.

Are there some good deals out there?

MARKS: Well, you know, you make a good point. A lot of times people ask me, wow, I heard about such and such a chain going out of business, they're having a liquidation sale -- I'm going to clean up.

HARRIS: Yes.

MARKS: And the reality is you don't always clean up. Because what happens at many places is that they jack up the actual retail price.

HARRIS: Thank you, yes.

MARKS: And what they do then is then make these pronouncements of huge discounts of 50, 60 percent off. But it's off a price the product never sold for.

HARRIS: Exactly.

MARKS: So you have to be very careful. Do your homework through price checks.

HARRIS: All right. Now, are there deals out there? Forget about the Circuit City example.

MARKS: Sure.

HARRIS: Are there some deals available? Here we are leading up into black Friday and cyber Monday. And what do you think; are there deals available?

MARKS: Oh, absolutely.

I've been covering this business for 20 years here. And I have never seen the level of discounting in all classes of stores that I have seen --

HARRIS: Oh, come on. Really?

MARKS: Oh, absolutely.

I it started -- my inbox -- I hadn't come back from my summer vacation from very long and all of a sudden my inbox was flooded with offers in late September for all kinds of discounts from every store from luxury goods companies to discounters to mainstream department stores. So I noticed something really was moving around on unprecedented levels. And my inbox -- what I do is I sign up for e- mail alerts from all my favorite stores.

HARRIS: Awesome.

MARKS: The reason is I do that is because you can often get e- mailed back exclusive coupons good for reductions that other people don't get. So I do that all the time.

HARRIS: That is good, that is very good, yes.

MARKS: Yes, yes. But the deals are out there. And they're not going to be out there just on black Friday. People have this notion in their head that black Friday is the be all and end all of shopping dates. It's not.

The discounts have been going on for a while. There's a lot -- just before I got on with you, I got an e-mail from Macy's saying take off 20 percent additional on Wednesday and Thursday of this week leading up to black Friday. I'm getting these things all the time. So wait, don't be in a rush.

HARRIS: So Tightwad, so if I'm not on the -- if I'm not getting the e-mail alerts, how do I go about finding these great deals? Do I -- I don't know -- do I grab the Sunday paper and get the ads? Or do I go online to the Web sites of some of these big retailers?

MARKS: You do both.

HARRIS: You do both.

MARKS: The Internet has made -- it's great because of price transparency. You never have to guess as to what's a good deal anymore. If you have a certain store you like to go to, if there's a certain restaurant, a certain theater you like to go to, you go on to those sites, you look for the local ads in your Pennysaver, in your value pack coupon order. Or you go online and you can often find off- hour specials.

You want to go to a movie? Don't go on a primetime Saturday night or Friday night if you can avoid it. You want to save $5? Go at off hours. Now of course we can't sneak away from work and go during the middle of the day. But there are times in our schedules when we have a little bit of flexibility. And those flexible moments are where the savings can add up. If you like to go to movies, ask -- almost every theater chain offers these kind of discount booklets.

HARRIS: That's true.

MARKS: Go to five movies, get the sixth free. Buy $25 worth of concessions, get $10. So it's always there. If you're a loyal customer, you can find out about coupons. And if you're a good digger, you'll be able to unearth these bargains everywhere you go.

HARRIS: Man, you make this sound really exciting.

MARKS: It's the thrill of the hunt.

HARRIS: Yes, it's good. All right, "Tightwad Tod" Marks with us.

Good to see you, sir. Thanks for your time.

MARKS: My pleasure.

HARRIS: Promised a better life while loved ones are serving overseas. Why some military families are feeling let down.

(COMMERCIAL BREAK)

HARRIS: That's a rising R&B star, Chris Brown. The kids call him C. Breezy. I don't know what that's all about. Artist of the Year at the American Music Awards last night. The 19-year-old -- geez, he's that young -- dominated with three awards. Kanye West, tantrum free for the night, picked up the two trophies. Alicia Keys went into the show -- nice that you dressed for the occasion, Kanye -- went into the show with five American Music Award nominations. She went home with just two statues. Chris Brown's girlfriend, right there, Rihanna, beat Keys to win the Favorite Female Soul R&B Singer and Favorite Female Pop and Rock Singer.

CNN's hero of the year in Los Angeles this weekend. An all-star tribute to people making a difference.

(BEGIN VIDEO CLIP)

ALICIA KEYS, SINGER (SINGING)

(END VIDEO CLIP)

HARRIS: Pop start, Alicia Keys, among those performing. There ceremony was an opportunity to recognize all of our inspirational nominees, like Anne Mahlum. She started a Philadelphia running and support club for the homeless called, Back on My Feet. Mahlum, her volunteers, shelter residents and friends, exercise together.

(BEGIN VIDEO CLIP)

ANNE MAHLUM, CNN HERO: It feels really strange for me to be standing up here in front of all you being referred to as a hero. I've been thinking a lot about what that word means, and a hero, as defined, means distinguished courage or ability, admired for his brave deeds and noble qualities. And it makes me think where we went wrong, that treating others, whether they are homeless, black, white, rich or poor, with anything less than respect and kindness is heroic.

(END VIDEO CLIP)

HARRIS: Wow.

Well, watch Thanksgiving night to see who you voted as the CNN's hero of the year. Learn their amazing stories and dare to be inspired by all 10 amazing heroes. Anderson Cooper hosts "CNN Heroes, An All Star Tribute," Thanksgiving night at 9:00 Eastern, only on CNN.

Let's get a check of the weather now. There's the man, Rob Marciano in the CNN weather center.

Good to see you, doctor.

ROB MARCIANO, AMS METEOROLOGIST: Hey, Tony.

You listen to a lot of those stories of things that those people are doing, you really start to feel like you're not contributing.

HARRIS: Like we're underachievers.

MARCIANO: Exactly.

HARRIS: Good point.

MARCIANO: The world is a better place for them. We appreciate it for sure.

(WEATHER REPORT)

HARRIS: Hey, keep us honest on that Wednesday forecast, a lot of folks hitting the roads.

MARCIANO: Yes, we'll be busy. Will do.

(CROSSTALK)

HARRIS: Promised a better life while loved ones are serving overseas. Why some military families are feeling left out.

(COMMERCIAL BREAK)

HARRIS: And we are just minutes away from hearing from President-elect Barack Obama. He is announcing his economic team. We will bring you that event live, right here in the CNN NEWSROOM when it begins.

A promise unfulfilled. In Washington State, a project to build new homes for military families is a lesson in doing things wrong.

CNN's Chris Lawrence has details.

(BEGIN VIDEOTAPE)

CHRIS LAWRENCE, CNN CORRESPONDENT: Hundreds of military families were promised brand new homes on this hillside.

UNIDENTIFIED FEMALE: And then two and a half years later, we're still here.

LAWRENCE: The Navy partnered with a private developer to build 141 homes here. But it never happened. So families are stuck in neighborhoods with no playgrounds, living miles from base in cramped old homes.

UNIDENTIFIED FEMALE: Problems with gas leaking because of the furnaces. LAWRENCE: This military wife is afraid to go public with her complaints.

UNIDENTIFIED FEMALE: I don't want any retribution to come down on my husband.

LAWRENCE: The land the developers selected is full of deep ravines and protected wetlands, an empty field not suitable for hundreds of homes.

(on camera): Nobody from the company took a look at this property before they paid $6 million for it?

JOHN JACK, WHISTLEBLOWER: Apparently not.

LAWRENCE (voice-over): John Jack was the building director for developer, American Eagle. Jack says he was fired when he documented his company's mistakes and complained to the Navy that nothing was getting built for the families.

JACK: They deserve more, they got less and the military doesn't care.

LAWRENCE: The Defense Department says it's turned over thousands of new homes to private developers, under 90 deals similar to American Eagle's.

JOE SIKES, DEFENSE DEPT. DIR. OF HOUSING: We have really six of them that had a problem with the developer. John Jack worked for the bad developer.

LAWRENCE (on camera): How does all this just slip by without anybody saying, hold on?

JACK: It's a lack of oversight.

LAWRENCE (voice-over): Last year, American Eagle sold the Navy contract to a new developer for five times its initial investment. The company then broke up and partners went their separate ways.

JACK: It's a disgrace. Our military families deserve more than this.

LAWRENCE: Jack filed a whistleblower lawsuit against some of American Eagle's partners. They responded in a statement saying his allegations have no merit. But the government held the company somewhat accountable.

SIKES: We've gotten, I think, about a half a million in damages from them in the northwest project.

LAWRENCE: True, but the Navy also forgave another $14 million in delays and cost overruns. American Eagle's partners say it wasn't their fault. And the Navy basically agreed. Now the project's in the hand of that new developer who's looking for a usable plot of land outside Seattle. Resident hear their homes could be ready next year. UNIDENTIFIED FEMALE: I'm not holding my breath on that.

LAWRENCE (on camera): I asked the new developer point-blank, is there any end in sight? Well, they hope to close on a new piece of land by early next year and if, if, everything goes well, move those families into the new homes when school starts next fall.

Chris Lawrence, CNN, Marysville, Washington.

(END VIDEOTAPE)

HARRIS: And hello again, everyone. I'm Tony Harris. Here are the headlines from CNN for this Monday, the 24th day of November 2008.

The president-elect unveils his money team this hour. Live coverage straight ahead. We will ask our guests what the chosen ones bring to the table in this time of crisis.

More and more people lose their jobs and turn to food banks for help. But nowadays, you can count food banks among the needy.

Zimbabwe refuses to let a former president and other VIPs into the country on a humanitarian mission. Jimmy Carter talks to CNN International, in the CNN NEWSROOM.