Skip to main content

tv   Your Money  CNN  October 12, 2013 6:30am-7:01am PDT

6:30 am
effort. we have to find a way to make it work. >> is there enough time to avert economic disaster? fareed zakaria joins christine romans on an emergency edition of "your money." it starts right now. i'm christine romans, and this is an emergency edition of "your money: countdown to cri s crisis." fareed zakaria joins me, and i'll talk to him. short-term thinking is causing long-term economic harm. if it's not fixed and fast, you will be stuck with a massive bill. the world's financial system is based on trust, and trust in the u.s. is eroding quickly. behemoths of big business speaking with one voice. >> shouldn't use the threat of causing the u.s. to fail on its obligations to repay its debt as a kujel. >> ought to be banned as a weapon. >> both sides deserve a spanking for this. >> small businesses questioning
6:31 am
as well. >> over and over, they say the same thing. why is this happening? we can't risk a default. >> the administration foretelling economic chaos. >> every american could see their 401(k)s and home values fall, borrowing costs for mortgages and student loans rise. >> our systems are not designed to not pay our bills. >> and the world watching and warning. >> if there was a -- lifting the dell ceiling, it could well be what is now a recovery would turn into a recession or even worse. >> but on the right, a vocal handful of debt default deniers. >> i would rather have a managed catastrophe now, which i don't think will be there. >> i think this is the 11th time i've this discussion about the sky is falling and the earth will erupt. >> and florida republican ted yoho insisting not lifting the debt ceiling would, quote, bring stability to the world market. fact: if america for the first
6:32 am
time in history is not able to pay all of its bills, the forecast is for financial fallout, worse than the collapse of lehman brothers. fact: forecasts are often wrong. but is it a risk worth taking? and that's your money that they are risking. never forget that. fareed zakaria. is there something wrong with our system that this is happening again, three years of this budget stalemating? >> it's a good question. because look, let's be honest. the american system is designed to allow for easy gridlock. the founding fathers created a system fearing english tyranny, so lots of different ways to veto stuff. there's lots of checks and balances. so i think that's part of the issue. but really, what's at work here is something much more dangerous. which is here we're getting into an anti democratic process, which is not the way the system was meant to work. look, if you want to repeal obama care and you're the republican party, you're the tea
6:33 am
party, great. go for it. if you want to get rid of entitlements, cut government spending, that's great. there is a procedure. you pass a bill in the house, it passes in the senate, and the president signs it. what's happening here is because the tea party does not have that ability, does not have a majority in the house or the senate, and certainly the president wouldn't sign it, what it's trying to do is really extortion, which is to say, we will block everything if you don't give us this, which we know we couldn't get passed through the democratic process, normally. that seems to me something quite new. >> and so when the number one concern near-term and long-term concern in this country should be about jobs, a new gallup poll is showing for the first time ever, it's dysfunctional government that is the most important problem we face. things have really changed here. it's our own government that americans are most worried about. >> you know, it used to be -- i was talking to an investor who worried about political risk. that's what investors talk about when they worry about places like indonesian or banana
6:34 am
republics or some african country. and he was saying to me, what we have now realized is the place we need to worry about political risk is the united states of america. >> right. >> it's not, you know -- it's not all the third world countries with dictators. >> i think there is no question we would pay the interest on our bills to our lenders. you have to pay your interest on your treasury bonds. but what could happen in the eyes of the world if we're giving ious to seniors or not managing books properly is unknown and scary. yet this week, i'll tell you, in this testimony from secretary lew this week, on the hill talking to the senate banking committee. and i want you to listen to something that -- a republican from -- republican senator from wyoming said to him. mike enzi. >> government keeps growing and growing and growing. and when it grows, that means there are more people in the wagon and less people pulling the wagon. >> less people in the wagon and -- more people in the wagon and less people pulling the wagon. this is the makers and takers
6:35 am
argument. president obama won the election, remember, and it was the makers and takers argument on the right. it's come back around and now it's wagon pullers and wagon riders. is that it at the core of this budget debate here that, too many people are getting too much from government and not enough people are pulling their weight? >> it is at the core, and it's part of the problem. by which i mean to say, look, again, if you feel that way, craft legislation that gets people off medicaid, medicare, social security, get it passed. you know, that's the democratic way you deal with this. you don't do it by extortion, by holding up the legitimate functions of paying our bills. but there's a broader issue here, which is it seems to me that if that is the case, you know, does a government that is totally dysfunctional help -- i mean, i don't understand how -- >> i know. >> burning down the house helps you make that case. >> and it's incredibly counterproductive to shut down the government. you look at this picture of world leaders in indonesian. there is somebody missing there, and it's the president of the
6:36 am
united states. it is counterproductive to be fighting like this at home, fighting against ourselves at home when there is so much work to do around the world. >> it's a huge opportunity. in asia, remember, the president had pushed kind of a pivot to asia, because he felt this is where america's economic future is, the fastest growing part of the world. and it was a very successful move. it was a way of countering chinese influence. well, guess what's happened, because the president can't be there, the chinese sent both their president and their prime minister. they went out there -- inducements of aid. so they're making hay while we're away. >> no question. >> very, very unfortunate. >> final question about presidential leadership here. a lot has been made about the tea party and some would say to changing the script to balancing the budget. should the president show a better kind of leadership? >> i don't believe so. i think, look, it's a plague on both houses on one hand. on the other hand, this is not one of those cases. the president is standing firm on a core constitutional and
6:37 am
democratic principle, which is precisely what we have been talking about, which is you have to -- you know, part of a democracy is, you -- if there is a process in place that is democratic and constitutional, you accept the outcome. you know, whether it's your guy who won or the other guy, you accept that. if it's the legislation you like or you didn't like, you accept it. that core principle is at the heart of our democracy. if the process worked, obama care was passed by the house, by the senate, signed by the president, affirmed by the supreme court, the congress passed a budget on the same way. you have to live with that. and if you want to change it, change it using the same process. don't take hostages. >> fareed zakaria, nice to see you. up next, from political football to an iconic head coach hitting hard. find out why coach mike ditka claims the biggest mistake of his life is president obama's gain. mine was earned orbiting the moon in 1971.
6:38 am
afghanistan in 2009. on the u.s.s. saratoga in 1982. [ male announcer ] once it's earned, usaa auto insurance is often handed down from generation to generation because it offers a superior level of protection and because usaa's commitment to serve current and former military members and their families is without equal. begin your legacy. get an auto insurance quote. usaa. we know what it means to serve. raspberries, strawberries, working at your enamel, once it's gone, you can't get it back. i would recommend using pronamel. pronamel will help to reharden the enamel, i use that every day, twice a day, and i know that i am protected. she loves a lot of it's what you love about her. but your erectile dysfunction - that could be a question of blood flow. cialis tadalafil for daily use helps you be ready anytime the moment's right. you can be more confident in your ability to be ready. and the same cialis is the only daily ed tablet
6:39 am
approved to treat ed and symptoms of bph, like needing to go frequently or urgently. tell your doctor about all your medical conditions and medications, and ask if your heart is healthy enough for sexual activity. do not take cialis if you take nitrates for chest pain, as this may cause an unsafe drop in blood pressure. do not drink alcohol in excess with cialis. side effects may include headache, upset stomach, delayed backache or muscle ache. to avoid long-term injury, seek immediate medical help for an erection lasting more than 4 hours. if you have any sudden decrease or loss in hearing or vision, or if you have any allergic reactions such as rash, hives, swelling of the lips, tongue or throat, or difficulty breathing or swallowing, stop taking cialis and get medical help right away. ask your doctor about cialis for daily use and a 30-tablet free trial.
6:40 am
customer erin swenson ordebut they didn't fit.line customer's not happy, i'm not happy. sales go down, i'm not happy. merch comes back, i'm not happy. use ups. they make returns easy. unhappy customer becomes happy customer. then, repeat customer. easy returns, i'm happy. repeat customers, i'm happy. sales go up, i'm happy. i ordered another pair. i'm happy. (both) i'm happy. i'm happy. happy. happy. happy. happy. happy happy. i love logistics. and better is so easy withrning you cabenefiber.o something better for yourself. fiber that's taste-free, grit-free and dissolves completely. so you can feel free to add it to anything. and feel better about doing it. better it with benefiber.
6:41 am
this is an emergency edition of "your money." washington working to avert a crisis of its own making, and our weekly look at the business of sports. here's the score. mike ditka says president obama would not be in the white house if he ran against him in the 2004 illinois senate race. ditka tells the "dickinson press" not running was the biggest mistake he has ever made and he probably would have won that senate seat. ditka has described himself as an ultra, ultra, ultra conservative. president became says if he observed the washington redskins, he would consider changing the team's name. protesters in washington and even at away games want the name and logo dropped. the real owner says -- has repeatedly said, he's not changing the redskins' name and this week responded to the recent criticism saying, quote, the name was never a label, it was and continues to be a badge of honor and it would cost a lot of money.
6:42 am
merchandise, stadium signs, new branding, rebranding, the redskins' brand valued at oh, some, what, are $145 million. and finally the partial government shutdown shutting down safety. we told you last week the san francisco 49er player trying to change his last name from witner to hitter in from a big hit he took. now the reports says the paperwork cannot be processed. he tweeted damn government shutdown, lol. the debt ceiling crisis stopped the year's rally in its tracks. expectations so low for some grown-up behavior, just talk of talking sent stocks way higher on thursday. okay, so what now? be brave and ride it out? matt mccaul is president of penn financial. there is a year of stock market gains for a lot of investors. they have good 401(k) returns since the start of 2013, dow up 15%. nasdaq up 24%. s&p 500 up 18%.
6:43 am
matt, what do we do now? >> unfortunately, you know, a lot of people, when they asked that question, you either want to buy or sell. i'm going to drop it right in the middle and say sit there on your hands. do not touch the buy or sell button on your computer. take a break, go on vacation, whatever it is, do not make an emotional decision. those gains are great, and, yes, people do not want to lose them. that's a big reason we saw the market sell off heading into thursday. people thought, okay, i'm locking into gains, happy into an 18% gain. >> one of the first things i learned, don't just do something, stand there. that's sometimes the best advice for individual investors. who if you had sold stocks earlier last week, boom, you would have lost the year's biggest rally. >> exactly, and all the studies back there. when you miss the biggest one or two days of the year, how much that affects you long-term in your portfolio. what's happening, people missed out on thursday, what are they doing? they're buying friday 300 points higher. >> the treasure secretary jack lew told the senate finance committee this is unthinkable, what we're facing here.
6:44 am
listen. >> there is a parlour sport in washington of when is the last minute? you can't do that with a debt limit. with a debt limit, if you look for the last minute and you make a mistake, you have done serious damage to the u.s. economy. to the world economy. it's just not responsible. it's reckless. >> so is this dysfunction and uncertainty something that investors are going to have to get used to? >> i think so. i don't think this is going away any time soon. >> these deadlines. it's going to be governing by deadlines. >> look back in history the last couple years. we had the fiscal cliff coming at the end of 2012. 2011, this debt ceiling debate once again, the s&p downgrade, the u.s. rating from aaa to aa-plus. so we have seen this in the past. also, look at that chart, christine. every crisis we've had within about a few weeks to a month, we had a major rally following that. >> is that because the fed is pumping so much money into the system? the fed is the only one operating here. there's so much money sloshing around. >> i think the fed obviously affects that entire long-term chart which is an up trend. i also believe that people when they invest, they invest for the
6:45 am
long-term, earnings, and where they believe the economy is going to be many years from now. the problem most investors make, they're basing their long-term investment decisions on this short-term event. the government is not going to be shut down forever. >> i've been hearing money managers say people should be more into cash, especially if you've got really nice double digit returns in your stock portfolio. do you think that this is a time for people to really look at the stocks, the bonds, the casual location, and measure make some changes right now? >> i don't disagree with that. completely. but i do to a point, because typically when you have a very strong bull market, we've had one for five years now, the very end is where there is very big gains. a big rally at the end and i still believe you probably have 6 to 12 months left in the bull market so it's not too late for me. and you're never going to pick the top, i get that. but i is still think we can get some more on the up side and you mentioned a key word there. the fed. do you think the fed is going to stop pumping anything into it with yellin now coming in and the fact we have this government shutdown? the fed is not going to stop any time soon. the tapering will not begin until 2014. so with that being said, we have
6:46 am
much higher prices in stocks. >> matt mccaul, have a great weekend. >> thank you. up next, love, american style. why the drama in d.c. is looking more and more like a failing marriage. can it be saved? last week, we talked to a hostage negotiator. this week, we're going to talk to a relationship counselor. next. jc: lunch at that one restaurant we all like? ron: i'm sorry, who are you? jc: i'm your coworker! c'mon guys. i'm driving. hey, you guys comfortable? it's best-in-class rear legroom. and with a turbo engine that gets 35 highway m-p-g. you know j.d. power ranked passat the most appealing midsize car two years in a row? i bet, uh, dan here wishes somebody found him most appealing two years in a row. ron: it's ron jc: ron... exactly. vo: get 0 down, 0 due at signing, 0 deposit, and 0 first month's payment on passat or any new 2014 volkswagen.
6:47 am
you may be muddling through allergies. try zyrtec-d®. powerful relief of nasal congestion and other allergy symptoms -- all in one pill. zyrtec-d®. at the pharmacy counter. hearty cheeseburger. creamy thai style chicken with rice. mexican-style chicken tortilla. if you think campbell's 26 new soups sound good, imagine how they taste. m'm! m'm! good!
6:48 am
♪ male narrator: there's something positive being generated in california. when ordinary energy is put in the hands of extraordinary people, amazing things happen. the kind of things that drive us to do more, to go further, to be better. we're dedicated to being a company you can count on, because you've always been customers we believe in. your energy plus ours. together, there's no limit to what we can achieve.
6:49 am
this is an emergency edition of "your money." remember this economic crisis, the collapse of lehman brothers, mid september 2008? the economy was in free-fall. stocks tumbling. the great recession was hitting with full force. and millions more would lose their jobs. well this week, a survey of consumer confidence posted the biggest weekly drop since then, since lehman went bust. about three times as many people now say the economy is in poor shape as those who say it's doing well. you can thank washington for that. for other stories, give me 60 seconds on the clock.
6:50 am
it's money time. ♪ >> raising children is more than just a daytime job. parents are happy 35% of the time caring for kids and feel the same way 19% of the time at work. there will be no women on twitter's board of director when is it eventualitily goes public. all seven members are male. the lack of female leadership is a problem in silicon, but google, and others have one at least female member. starbucks is giving akwa free cups of coffee this week. if you bought a cup for a friend, starbucks gave you a free one in return. >> have a good day. >> reporter: the ceo says americans need to come together. this is the new $100 bill. it went into circulation this week after months of delays. the new look includes a 3d ribbon and color-shifting ink. and the next craze in 3d printing, food. a developer at the
6:51 am
southwest-southwest ecoconference is printing pizzas. that's if the fda gives approval. also this week, jet blue allows family members to pool their frequent flyer mile and it's letting customers decide who qualifies as family. really anyone you want to share your miles with. so it won't be families with crying babies, that's rough. not as rough as the family feud in washington. i bought everything in this house! i spent my money! >> you might not have made it if not for me, sweet cakes jrk. >> it's not exactly "the war of the roses" but all of the mudslinging on capitol hill can sound like a bad marriage headed for divorce. wendy walsh is a clinical psychologist and author of the "40-day love detox." wendy, i was thinking of you, i
6:52 am
don't want to make light of the situation in washington, but last week, a hostage negotiator on. this week, we need you to tell us, are these irreconcilable differences? >> i don't think they are. but i want you to understand, a lot of americans can relate to in, christine. it's a blended family metaphor. think of obama as the never before married bachelor who marries a single mother with, and that with be john boehner. he's never been a governor. he hasn't had to have the harmonious relationship with the others on the other side of the aisle, like tip o'neill, our clinton with newt gingrich. he's not good with the chitchat. not, how was your day, stuff. and you take boehner. actually having a hard time choosing between his angry stepchild, the tea party, who loves confrontation, and his new marriage. at the same time, boehner's husband, if you will, obama, is about to become a star. let's talk about it.
6:53 am
the affordable care act is really obama's signature legislation. it's been law for a few years, approved by the supreme court. and now it stands to really make him a star. now, boehner's jealous. so he's doing what a woman often does, which is she stops sleeping with her husband. which is the worst thing you can do. >> that is quite a metaphor. you have taken it to the very, very extreme. i will -- i will say, wendy. [ laughter ] we know that money and couples has always been a real tough issue. there's research out of utah state and the national marriage project shows couples who argue about finances once a week are more than 30% more likely to divorce than couples who disagree about finances a few times a month. >> right. >> here's the thing. that's what this is about. they're disagreeing about money. this is all about money, how to spend it, and the priorities in the household, and the -- >> you love to think. -- you think about money, christine. even couples who think about the
6:54 am
voice. money is the convenient metaphor. it's currency they use. i think this rift in the relationship goes back to 2011 with the grand bargain that didn't happen, and boehner close the the door on ever negotiating with obama. the problem is, these two are forgetting about the rest of their children. which are us. the american people. they have to present a unified front, against the tea party, and think about the rest of the children in the family, and put that ahead of their own individual needs. that's what saves marriages. >> you know, sometimes it feels like they're fighting about one thing, and then suddenly the fight takes a turn and they're fighting about something else that's not related to the first thing. fighting about obama care, now fighting about balancing the budget. that happens in couples, too.
6:55 am
we use money and sex as the fight ng things in the relationship, but it's always about power. and compromise. everybody has to remember that what they can accomplish together is so much greater than what either can do as an individual. >> this is a fun metaphor to explore. it was fun. i don't mean to make light of it, but it really was fun. wendy walsh, have a nice weekend. >> nice to see you, too. up next, who's winning and who's losing in the debt showdown in washington? why miley cyrus may very well come out on top. [ male announcer ] at humana, understanding what makes you different is what makes us different. we take the time to get to know you and your unique health needs. then we help create a personalized healthcare experience that works for you. and you. and you. with 50 years of know-how, and a dedicated network of doctors, health coaches, and wellness experts, we're a partner you can rely on --
6:56 am
today, and tomorrow. we're going beyond insurance to become your partner in health. humana. still running in the morning? yeah. getting your vegetables every day? when i can. [ bop ] [ male announcer ] could've had a v8. two full servings of vegetables for only 50 delicious calories. [ crashing ] [ male announcer ] when your favorite food starts a fight, fight back fast with tums. heartburn relief that neutralizes acid on contact and goes to work in seconds. ♪ tum, tum tum tum tums! they always have. they always will. that's why you take charge of your future. your retirement. ♪ ameriprise advisors can help you like they've helped millions of others. listening, planning, working one on one. to help you retire your way... with confidence.
6:57 am
that's what ameriprise financial does. that's what they can do with you. ameriprise financial. more within reach. that'make my markcan do i wawith pride.ork. create moments of value. build character through quality. and earn the right to be called a classic. the lands' end no iron dress shirt. starting at 49 dollars. ido more with less with buless energy. hp is helping ups do just that.
6:58 am
soon, the world's most intelligent servers, designed by hp, will give ups over twice the performance, using forty percent less energy. multiply that across over a thousand locations, and they'll provide the same benefit to the environment as over 60,000 trees. that's a trend we can all get behind. but do you really? [ female announcer ] neutrogena® makeup remover erases 99% of your most stubborn makeup with one towelette. can your makeup remover do that? [ female announcer ] neutrogena® makeup remover. welcome back to this emergency edition of "your money." sometimes in the midst of the gloom and doom, you have to laugh. queue congress and the cam ares they love -- cameras they love. the gym is open, but the staff
6:59 am
furloughed. they have to provide their own towels? >> the electricity, the towels, they're not provided by jim fairies, they're provided by taxpayers. >> of course, all you can do is laugh, the government shutdown, look no further than miley cyrus and "saturday night live." ♪ stop what we want oh, yeah, yeah ♪ ♪ one, two it's our house we can boot out who we want to ♪ ♪ it's our floor we can say what we want to ♪ ♪ it's our floor >> oh, yes, sometimes you just have to laugh. okay. coming up on brand-new "your money" at 2:00 p.m., consumer confidence landed the largest drop since the lehman brothers end. and a death in a georgia high school gets more mysterious, when he was rolled up in a gym mat, it was ruled
7:00 am
accidental. but new clues, including that the teen's body was stuffed with newspaper and organs removed before burial, has the family insisting their son was murdered. ? >> 12 days into the shutdown. less than one week until we hit the debt ceiling, and here's what we have to show for it. >> there have been constructive talks. they're accused of plotting to kidnap husbands and torture them and ask for money. they're not the typical thugs. they're rabbis. >> ever try to use frequent flyer miles for a flight only to find out you are just a few short? jetblue has a solution in a groundbreaking tradition to its loyalty program.


info Stream Only

Uploaded by TV Archive on