tv Your Money CNN September 15, 2013 12:00pm-1:01pm PDT
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president obama has been focused on syria. what about his domestic agenda? >> gun reforms and comprehensive immigration reform. >> creating middle class jobs. "your money" with christine romans starts right now. a war half way around the world redefining president obama's second term. i'm christine romans. this is "your money." in a moment i will be join by john king and nick christophe for the "new york times." first candidate obama campaigned on getting the u.s. out of wars in the middle east. he argued it was vital to focus on a domestic agenda. president obama is making the case for military action in syria. a person accused for apologizing america now touting america's
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greatness. here is what newt gingrich said during his run for the republican presidential nomination in 2012. >> i believe in the declaration of independence. i believe in the constitution. i believe in the federalist papers. it is clear the president believes in european socialism. the gap is this big. >> this week president obama cited america's exceptionalism as he made his case for action in syria in his address to the nation. >> when with modest effort and risk we can stop children from being gassed to death and make our own children safer in the long run, i believe we should act. that is what makes america different. that is what makes us exceptional. >> russian president vladimir putin takes exception with president obama's claim of american exceptionalism responding with a speech titled
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a plea for caution from russia. i would rather disagree stating that the united states' policy is what makes america different. it is extremely dangerous to encourage people to see themselves as exceptional no matter the motivation. john king five years after the collapse. guantanamo is still open. is putin more in touch with the feelings of democrats? >> democrats are angry at president putin. the president is in a very difficult box here. george h.w. bush left a note for bill clinton saying you may want to focus on domestic issues and every problem is going to cross your desk. president obama is dealing with that man. a man defined as being anti-war, now contemplating military
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strikes in the middle east. in a time he was struggling in his presidency a bit before this. he is in his second term. the economy is recovering. the american people are split on his leadership. the country is divided politicly anyway. you have the irs controversy. you have the nsa controversy. the president was in a political box anyway and then comes this. >> a jobs weary population. the polls show the public -- >> i think putin a little bit overplayed his hand. i always wonder whether it is really written by a public figure like putin or whether this came out of his press advisers. i thought it seemed authentic because no press adviser would suggest denouncing american exceptionalism in a message to
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americans. i think there was a back lash that weakened his case. i thought he came across as very smart and very shrewd and kind of arrogant. >> public opinion and many democrats in congress remain opposed to military action in syria, avoiding a government shut down this month, creating jobs. there is an uphill battle does it put the president's domestic agenda at risk? >> as i noted the president was in a tough political position anyway. immigration reform already was a huge question mark. he is trying to keep the government running. there is nothing on the horizon right now. the president was going to get to the structural problems and entitlements and to the tax questions in our government. the president is trying to keep
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the government open, keep the status quo with the republicans who run the house of representatives right now and get into the mid term election campaign. his health care law is a controversy again and then this. let me be an optimist, at least in the syria debate people are having conversations. much of the debate is a debate about the power of the presidency versus congress, whether syria is in the u.s. national interest. at least there have been conversations if the members of congress could have these conversations on the other issues it would be helpful. will it happen? >> it is interesting the idea of is syria in u.s. interest. for many americans it is their interest for jobs that are doing better. it is hard for them to focus on the idea of the president and military action in syria when they want options on jobs.
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>> i think frankly it seems as if there is something, that the back drop is a bit of a wave of isolationism. we periodically see this in our history. pugh survey says this comes in waves. right now it is the biggest that they have seen in 50 years or so. i was struck by one survey earlier this year when democrats can and republicans alike agreedt that the single area of government that should be cut the most is foreign humanitarian aid. the second choice for budget cutting was the state department and the foreign service has had fewer members than the pentagon has had in vans. these are tiny areas. there is the weariness with the world, weariness with fighting, a kind of compassion fatigue. the end of the day i sympathize
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with that. i share that view but you can't turn your back on the world. they are able to come back and bite you. >> i like to think washington can do more than one thing at a time. we have a whole host of things coming up, budget fights, debt ceiling and drama and what is happening overseas. they will be forced to do more than one thing. so nice to see both of you. have a great weekend. it is a nightmare scenario. the world's biggest oil producers dragged into the conflict of syria. saudi arabia and qatar. are your gas and energy prices immune to middle east conflict? former energy secretary and u.n. minister joins me next.
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volatility is back. a possible diplomatic solution could avert a u.s. military strike on syria. and the oil market and stock market investors on edge. fears of potential u.s. action pushed oil prices to a two-year high. syria isn't a major oil producer but some worry the conflict could spread to neighboring countries. >> the nightmare scenario is if you have lan-out mid eastern war that includes the persian gulf. under those circumstances you can see the price of crude go to $140 a barrel. >> that would not be good for drivers, of course. the threat of fighting in the middle east brings up images of cars stretched around the block waiting for gas. the u.s. is not as dependent on
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middle eastern oil as it used to be. america is producing more of its own oil and using less. that means fewer imports for overseas. today imports account for about 40% down from 60% as recently 2005. most of the oil coming in isn't from the middle east. in fact, the top export of the u.s. is canada. canada is the largest expert of the united states. the former governor of new mexico and served as u.s. ambassador to the united nations. when you see the kinds of concerns about syria it brings pictures of the 1970s. america is closer to energy independence. how does that change the calculation for this president? >> short range, middle east
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instability, the volatility is going to increase oil prices more higher prices at the pump. our base is strong. long range it looks good, but short range this instability is a problem not just for a producer country like us but for consumer countries, europe and japan. >> and the president has made that a key goal. i want to play something he said during the state of the union. >> today no area holds more promise than our investments in american energy. after years of talking about it we're finally poised to control our own energy future. >> at the same time he has infuriated many republicans by delaying approval of the keystone pipeline. attacking syria, no. obama has it backwards. america's interest is to increase american energy and
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jobs. does another potential mid east war make the case for more domestic energy production put pressure on this president to approve keystone? >> no. i don't think it is related. i think what we have is a dramatic increase in shale gas, natural gas that is going to cover us. it is going to make it okay. the president can make a keystone decision independent ont that. the supply is sufficient. what i think is happening in this country which is positive is more oil and gas abstraction but also a dramatic growth in renewables, the standards for gasoline, electric cars. >> how would you deal with syria right here? >> i support the president. i think we should proceed with military strikes. if there is a diplomatic solution i'm very skeptical of
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russia. i'm very skeptical of syria. i think there has to be international inspectors in a diplomatic solution, not political inspectors, very technical. i think it has to be comprehensive. but across the board i think the longer range is this man, assad, is not good for the international community. >> public opinion is not there yet to support a strike. >> we are very war weary. iraq, afghanistan, people want money spent at home, on education, on issues related to job creation. i don't blame them. at the same time we do have int international responsibilities. it effects israel, a close ally. it effects a region that is critical of energy supply. europe receives a lot of this oil.
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japan. so america is still the indispensable nation. we have to do the stuff that nobody else wants to do because it is our international responsibility because of our size and power and moral leadership. this is a human rights issue. this was a war crime. these strikes were limited. we are not getting boots on the ground. it is extremely, extremely volatile. >> thank you for joining us. what do you think of the new iphone? investors are not impressed. and what about the fingerprint censor? how secure is it? ♪
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in less than 140 characters twitter announced it's filing to become a public company and sell shares to the public but this filing is confidential. the microblogging site is able to keep details private for now under a provision of the jobs act because it makes less than a billion dollars in revenue a year. twitter will have to make information public 21 days before it starts pitching sales of shares. the biggest tech of the year belonged to apple. it was a colorful launch for iphones. apple shareholders were seeing nothing but red as the stock dropped five percent. this is apple we are talking about. >> here it is in a highly
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anticipated event at apple headquarters in california, tim cook unveiled apple's newest flagship device the iphone 5 s. the main features it comes in three colors, silver, gold and space gray. it has a new a-7 chip inside which apple says makes it twice as fast. and improved camera features a better image stabilizer and bigger flash and a fingerprint censor called touch i.d. >> the history of fingerprint censors on notebooks is not good. this is a different technology. until people have had a chance to use it for a while is the question. >> reporter: the new iphone 5 s starts at $199 for the 16 giga byte with a two year contract. apple unveiled the 5 c made of plastic.
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the 16 giga byte model is $199. one posted fancy name for cheap plastic. another asked when i get my finger prints on this thing? iphones hit stores september 20. >> zain asher is here to take us through some of the details. what if you want someone else to access your phone like your spouse or you want to read your teenage daughter's phone material? are there caveats for that? >> you can register more than one thumb print. you can by pass the censor. >> other people are talking about security, how vulnerable will this be if the censors can be hacked? >> you have to remember the thumb print is going to be
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incrypted and stored on the actual phone and not stored on an apple server somewhere. it is on the actual cloud. that gives you some degree of protection. one thing is how advanced the censor is. for example, a high end thumb print censor might analyze 12 points on your thumb. experts say the iphone 5 s probably won't use that many. you have to remember the fewer number of points there is a chance that someone could pass for yours. it is highly unlikely that you ever meet them. >> absolutely. is it a safety upgrade or a different way to protect users? >> it is safe to say this is probably more about sales than safety. experts i spoke to said a thumbprint censor is probably more secure than a four-digit pass code which has about 10,000 possible combinations and if a hacker was to go through that it would take them 15 minutes to
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break into your phone. if you had a nine-digit pass code it would take a hacker about 2 1/2 years. a thumbprint censor probably falls in the middle. >> the nine digit pass code is something i will forget. >> you can do like a ten or 20. >> i didn't know you could. >> what about the post it note? that is not safe. what do james bond, victoria's secret and marijuana have to do with your money? [ male announcer ] these days, a small business can save by sharing.
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here is the score. the average nfl ticket price is up three percent from last year. the new england patriots have the highest average ticket, $117 a ticket. the cleveland browns have the lowest at $54. that is not enough to park at a dallas cowboys game, the price tag, $75, the highest in the league. most expensive beer, redskins fans. the five dollar beer is making a comeback. the median household income in the country is $50,000 for the whole year. floyd money mayweather earned that in 3 1/2 seconds of the first round of his championship fight this weekend. that's all guaranteed win or lose. he will get a cut of the pay per
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view profit which will likely mean millions more. obama care opponents are invading times square. the heritage foundation unveiled a billboard that reads warning, obama care may be hazardous to your health. my prediction you have not seen the end of the big money lobbying against obama care. stay tuned. for more stories that matter to your money give me 50 seconds. it's money time. >> from crisis to bailouts to billions in profit, five years after the financial melt down the citi group bailout is over. taxpayers you made a $15 billion profit. who replaces ben bernanke? the latest maker a letter signed by more than 300 economists
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urging president obama to choose yellin. part time employees at victoria's secret flagship store in new york city joining the fight for more pay. the latest so-called hot investment could leave your portfolio up in smoke. online offerings of stock relating to all things weed are everywhere. remember this car used in the james bond movie "the spy who loved me" imagine the surprise for one couple who found it in a storage locker. the car sold at auction for $920,000. up next, five years since the fall of lehman brothers. but has anything changed on wall street? we take a long hard look next. df i go ahead of you? instead we had someone go ahead of him and win fifty thousand dollars.
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five years after the melt down and the banks are back, are you? i'm christine romans. this is "your money." five years ago america and the world launched to the edge. >> major sectors of the financial system are at risk of shutting down. >> we did not mislead our investors. >> the fall of lehman brothers nearly brought several to their knees. others were swallowed by bigger banks. >> what a week. the bailout debate reaching a fever pitch. >> the crisis spread and morphed
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into a global freeze of credit that threatened the world with economic depression. millions of jobs were lost, millions of homes foreclosed. congress was presented with one choice and one choice only, bailout those banks that got us in the mess in the first place. >> the problem here is not deregulation but nonregulation. >> regulate they did. thousands of pages of new rules. the bill proposed 398 new rules for banks, credit card companies and other financial institutions. but more than three years later only 40% of the proposals have gone into effect and not a single senior executive from any wall street bank faced charges. there have been billions paid in fines, higher capital requirements imposed on the banks. >> of all the bad incentives
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going into 2008 unfortunately still there. i think we are still in a very dangerous place. >> five years after panic took hold is your money any safer? >> we are going to answer that question. professor of economics at harvard university. five years ago this week lehman failed. wrote this week's time cover story. it appears to be a crisis wasted. too big to fail banks are up to 40% bigger today. you ask americans how they feel? they don't feel safer. how did wall street win? >> in a word lobbying. there has been a tremendous amount of time and money on the part of the banks put against lobbying for dodd-frank rules to be watered down, delayed, made
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weaker. the stat that only 40% of the rules have been written so far is very telling. banks are complaining about rules of having to use five percent of capital. it is unbelievable we have these problems still in the system. >> are we safer, ken? >> we are safer at this moment. if you look back five years we could have had a second great depression. authorities did creative things and we didn't. i completely agree that they were very timid. i think lobbying was a big issue. i think they are scared if they rough it up too much. >> i think you bring up a great point because in a way we did a great job of saving the banks and averting the catastrophic moment. we did not do a good job of making the underlying structure
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safer. >> i want to go back. i want to walk down memory lane. the people who fixed the crisis did not see it coming. this is 2007. >> we do not expect significant spillovers to the rest of the economy or the financial system. >> this is happening against a back drop of an economy which is very solid. >> from that day just to the first three months of 2008 that solid economy take a look. the s&p 500 down 12%. in the first quarter of 2008, gdp, economy, economic growth cratered. here is greenspan. >> i was wrong 30% of the time and there are an awful lot of mistakes in 21 years. >> some of the people helping us
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in the crisis are going to be helping. how do we know they are getting it right? >> if my plumber got it right 70% of the time i wouldn't hire him again. >> they are not doing it completely right. we don't face these things very often. there are people who say if you do what i said, if you just spend a lot more money or did a lot more everything would have been fine. if we wouldn't have let lehman fail everything would have been fine. we don't know. >> one thing, we can start by paying regulators as much as your plumber gets paid. there are a number of things we can do. there can be a new system of paying credit agencies. the money culture in washington there are things we can do.
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>> one of the things as we move forward. we are going to have to taper. we are going to have to pull back the reins on all of this fed influence in the economy. we have never been here before. how do we know we are doing it right? >> we don't. it works well on my blackboard. i have been teaching it for 20 years but it is a theory. it hasn't been done. i'm not sure why they are doing it so soon given that high unemployment and continuing economy. >> the kindling is just starting to burn taking away the fed stimulus right now would be blowing it out. do you agree? >> we don't know. i think it is fair to say i think it is early. i don't think they should be doing it so soon. i'm more worried about europe, china, emerging markets. i don't think the end of the tapering is the end of the world. >> meantime american people when
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you ask the question are you safer today than five years ago, they don't think they are. your cover piece says wall street won. american people don't feel like they won. >> i think this goes to the disconnect. if you ask what the biggest risk is to the economy right now i don't think it is a lehman style blowup. we have increased capital. it is the fact that the finance in the real economy are still disconnected. banks are not doing what they were set up to do which is loan money to real people and real businesses. we need to remore them. >> it is still held up in the government. if the government said we backed the banks and we think they are healthy now and are not going to do it again. i think it is necessary to restructure the financial system
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more. there is a lot of legacy debt, old debt hanging over and the banks are improving balance sheets. i think if we do things to increase competitiveness in the financial sector that would help. >> i think the most powerful person in the world right now is ben bernanke. who is better? yellen or summers? >> i think they are both very good. they are both brilliant. >> old coke is better than new coke. professor will not pick a lane here. >> i am friends with both of them. i think they are both brilliant. they both have great leadership. >> hundreds of economists say janet yellen. >> i think she is the right choice for the moment. they are both brilliant economists but if you think
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about the connection of who is best positioned to create that and regulate the banking system i think janet yellen. >> i don't want my fed chief to be right 70% of the time. >> try to find another country that is better. >> i know. thank you so much. nice to see you again. five years after the collapse of lehman brothers many every day americans are struggling in this economy. what about the very public faces of the men and women who ushered in the down fall and those who tried to fix it? zain asher joins us with a look. you may remember the former ceo of lehman brothers. he led his company to the largest bankruptcy in american history. he has struggled to land a full time job. he launched his own financial advisory firm in 2009 and serves as an adviser to a green technology company. he made headlines after suing his ex-son-in-law for not paying
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back a $9 million loan. next up is zillow. many people blamed him for issuing loans for those who could not afford them. he has kept a low profile after the crisis. next up henry pollson was the treasury secretary. he heads up a think tank he founded in 2011 to promote a cleaner environment. next up is timothy gietner who was running the bank and went on to being treasury secretary. he joined the council on regulations. and the next up is elizabeth warren. she was tapped in 2008 to oversee the $700 billion bailout program. she is now a senator for
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massachusetts. what about you, the american consumer? before the crisis a lot of us were splurging on home loans we couldn't afford. many of us out of work and in foreclosure. we are not borrowing as much but are not earning quite as much either. coming up five years after the financial crisis housing is slowly recovering. break out the aspirin. why there is still a housing hangover in some spots. side-by-side, so you get the same coverage, often for less. that's one smart board -- what else does it do, reverse gravity? [ laughs ] split atoms? [ flo chuckles ] [ whirring ] hey, how's that atom-splitting thing going?
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ago but below the peak. thanks to rising home prices 2.5 million more borrowers no longer owe more on their homes than the home is worth. mortgage rates are very, very low right now, still low rising but low but for many of the under water homeowners they are stuck. i spent time with a small business owner left behind by the housing recovery. >> reporter: the math on katie's house is upside down and her family is feeling queasy. >> we are paying almost $1,000 more a month than what we should be. >> reporter: 4.75% is the average rate for a 30-year fixed mortgage. they aren't paying that. they have one mortgage over 6% and a second one that is higher. >> 11%. >> that's almost three times what is the going rate.
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>> so you haven't been able to lower these? >> no. we have tried three times. >> they can't refinance because they owe too much. banks won't generally refinance more than 80% of what a home is worth even if you are not a risky bet. >> and you have never been late on these? >> never. >> because the loans are not be the answer for anything as a business owner. >> you have to live with it or put it up for sale. >> the girls may be dancing, but mom and dad can't dance around this. >> $50,000 is what they're
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saying we need to give to them. i don't know if i want to part with $50,000. >> would it hurt your reputation as a small business owner? >> definitely. there's no doubt about it. i've just opened another business and, you know, it's my name. >> for now, they're staying put and feeling frustrated. >> she's called the bank multiple times to see what we could do. you know, they won't even work with us. >> and with mortgage rates creeping higher, families locked into the high rates of the past may have missed a real opportunity for the future. >> all right, impossible to refinance for people like the kualas and soon, harder to get a loan in the first place. next year, you won't be able to borrow as much money and be cover ds. at the same time, new mortgage rules go into effect. those restrict the types of mortgages lenders can provide.
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we're going to be really watching closely here to help you through the changes in the real estate mark. coming up, if you're buried under crushing student debt, help is out there. we're going to tell you how to get it next. push push dillac ats from the ground up to be the world's best sport sedan... ♪ ...people noticed. ♪ the cadillac ats -- 2013 north american car of the year. lease this cadillac ats for around $299 per month with premium care maintenance included.
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there's only a small portion of borrowers, 60, 70, 80, even a hundred thousand dollars in student debt. for some, a low-paying job. for students with high loan balances and low wages, there is a solution no one is talking about. the income-base repayment program gives borrowers a break. and that break is about to get bigger. here's how it works. those with government-backed student loans can apply and the government considers their income and their fanlly size and reduces monthly payments depending on the amount of the loan for those who qualify. but borrowers must reapply each year. the reduced payments won't be more than 15% of discretionary income. thanks to obama care, that bill will be dropped to 10%. that's it. 10%. capped there. so if you identify got a kid in
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high school or middle squochoold check this out. it's not a long-term solution to rising college costs and ballooning student debt. bud that gateway is getting narrower every day. i cement some time with a mother to help her son. >> i started saving when he was two and he's 19 and it's never enough. >> reporter: patricia rodriguez needs $13,000. >> where do you get an extra $1200 a month? >> don't you worry about borrowing all of that money? >> ye. >> her son jason is a sophomore at the university ofhearted ford, but patricia's savings are gone. >> reporter: nothing in american life has risen so quickly than the cost of college, up more than 500% since 1985. >> there's no reason a college education should cost $30,40,50,000 a year.
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>> reporter: why is it so expensive? some say the easy money has created a tuition bubble. others say it's simple economics. >> you have to go to college to get ahead. we base kwlid have a fixed amount of supply. when demand is going up and supplies doesn't, prices rise. >> and so does debt. two-thirds of students have college dealt now averaging $26,000. >> right now, i'm almost $60,000 in debt which will affect my ability to get a mortgage and it will affect what kinds of jobs that i choose. >> reporter: and jobs are what it's all about. americans with a college education are likely to be employed. and they earn more money. more than 36% of recent grads
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are working in job that is do not require a college degree. >> what we want to do is rate them on who's getting the biggest bang for their buck. >> you also have a great time in college. >> but finding the bucks in the first place, that's the real struggle for parents like patricia. >> all you want is your kids to go to school and do well. and that's what he's doing. and we don't have the money. >> few americans will ask p if e costs keep rising. lower unemployment rates and much higher wages. salaries rose 2.4 pnt from last year. that's according to a new report out this week. and the extra help from the
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government will hopefully make it easier. i want you to head to our blog at cnn.com/yourmoney. i want to tell you all about being a big time nfl quarter back. we'll see you here next week. have a great week. >> hello, empbl, i'm fredricka whitfield. hundreds of people are fatsing in colorado right now. president obama gives his take on his ground-breaking deal with russia on the syrian crisis and reveals his goal in confronting syria on its suspected chemical weapons attack. police, police opened fire and the suspected doesn't get hit, but two bystanders do.
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