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"Fiscal Cliff" and Your Portfolio; Top Entertainment Stories of 2012; Home Prices Climb in October; Heat Win NBA Finals Rematch
Aired December 26, 2012 - 09:30 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CAROL COSTELLO, CNN ANCHOR: Blizzard warning in up to six states. In one of those states, Arkansas, the National Guard has been called to provide ambulance service for residents. Up to eight inches of snow was falling to areas around Little Rock.
Heavy snow and strong winds will lead to whiteout conditions across the Ohio River Valley. The heaviest snow is expected to move into western Pennsylvania and New York state this afternoon.
Hundreds of American families wanting to adopt Russian children may have their dreams dashed. Russian lawmakers are given final approval to a ban on such adoptions, and they sent the bill to President Vladimir Putin, all seen as payback for a recently signed U.S. law imposing travel and financial restrictions on human rights abusers in Russia.
There are just six days left until the U.S. crosses over the so-called fiscal cliff. And just in case Washington doesn't make a deal, we're doing our best to get you ready. Every day this week, we're taking a look at how the fiscal cliff, if we go off the fiscal cliff, how that will affect you from the increase in your tax bill to planning for your retirement.
Today, we're going to focus on your portfolio.
Ryan Mack, president of Optimum Capital Management, joins me via Skype from Detroit.
Good morning, Ryan.
RYAN MACK, PRESIDENT, OPTIMUM CAPITAL MANAGEMENT: Good morning to you. How are you doing today?
COSTELLO: I'm good. Thank you so much for being here this morning.
You've got some advice for people to manage their portfolios in case we go over the fiscal cliff. So let's start with the first step. You need -- you say you need to review your asset classes.
MACK: Well, essentially, there's a study done back in the '80s, by the (INAUDIBLE) study, simply says over 95 percent of your portfolio return will determine exactly how you choose the mixture of stocks and other investments you have in your portfolio. So, with the assistance of a qualified adviser making sure you have the right mixture of stocks and balance your portfolio, it can be ever so crucial especially during the volatile time that we see in the markets today.
COSTELLO: So, if you make any changes, I guess you have to take into account what your tolerance is for risk.
MACK: Yes. I mean look, we've seen the markets going crazy right now, a lot of individuals are looking up and downs, the ebbs and flows, and a lot of things we're telling the folks we work with is that, let's look at it more long-term, first of all. This fiscal cliff might seem extremely large right now. We still look at the more long-term view. It's going to be a small blip on the overall screen.
So, we're going to see a lot of volatility but can you deal with this volatility. And if this volatile has caused me to lose a whole lot of sleep, it might have an indication you might want to make some changes.
COSTELLO: Yes, it's hard not to have a knee-jerk reaction. But before we get to that, talk a little bit about tax deferred accounts. How will the fiscal cliff affect them?
MACK: Yes, this is -- this is the beautiful part about this is that the biggest concern individuals are having that we've worked with and that we've been talking to is that what is going to happen with my taxes? What's going to happen with my dividends taxes, capital gains?
So the best part about it, if you're dealing with non-qualified accounts, then you might have to be concerned about that but qualified accounts or tax deferred accounts such as your 401(k)s, such as your individual retirement accounts, your Roth and traditional. These accounts are tax deferred and many 529 plans, college savings plans, different types of accounts that are tax deferred and some are even tax free such as 529.
And so, maximize these type events and eliminates a lot of the risk or concerns that you might want to have with your taxes because these are tax deferred accounts.
COSTELLO: OK. So probably safe to say don't touch them. But how can you avoid the knee-jerk reactions when you see you're losing so much money?
MACK: I mean, we've seen it. I mean, the bottom line is that, you know -- remember back in 2009, the sky is falling, Chicken Little, and everything's going wrong and we can't seem to, we want to jump out of the market -- well, those back in 2009 missed a 130 percent return in the market because they dived out at the bottom. So, we don't want to be a part of the individuals who, you know, we want to buy -- we want to buy low and sell high. And again, that might be an old cliche but it really does work.
What a lot of individuals are trying to do, they're doing is, hey, I want to sell -- I want to get rid of all the risk and just jump out because the fiscal cliff seems too much to take. This is one small blip in a very long-term scheme of investment strategy. Five-plus years we should be looking at, not just a few months time span that's really caused by political agenda. Our economic agenda and your fiscal house said that let's look at the long-term strategy.
Let's not make a rush to make any rash decisions and do some things that we'd look back on and say, wow, you know what?: I missed a lot of good return, because I made the decisions, a little bit too harsh.
COSTELLO: All right. Thank you so much, Ryan Mack, for joining us this morning. Ryan Mack will be back with us all week, tackling the fiscal cliff effect on your pocketbook.
Tomorrow, we'll get Ryan's take on what could be a ballooning tax bill for many of us.
Chris Brown and Rihanna keeping people guessing about the next chapter in their lives. Their story, one of our top 10 entertainment topics of the year.
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UNIDENTIFIED MALE: The war has started. And we are hopelessly outgunned.
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COSTELLO: Oh, I love that movie. We are going back to the movies big time.
"USA Today" reports box office ticket sales are heading toward an all- time high, breaking 2009's record. Hollywood's take has been boosted by some blockbusters including that movie, "The Avengers." According to boxofficemojo.com, "The Avengers" took in more than $623 million over a five-month period. Woo!
Tom Cruise is big at the box office but he made it into the year's top entertainment stories for something he did off screen and you probably know what that is.
Here's Nischelle Turner with our rundown.
NISCHELLE TURNER, CNN ENTERTAINMENT CORRESPONDENT: Catchy dance tunes, celebrity tunes and the tragic death of a singing icon -- just a few of the topics that had people talking in the world of show business.
Here's a look at CNN's Top Ten Stories from 2012.
TURNER (voice-over): The song was almost inescapable, Carly Rae Jepsen's viral sensation "Call Me Maybe". It earned the young singer two Grammy nominations and countless reenactments online, like this video posted by the U.S. Olympic swim team. The force is strong with Disney. In a move that caught many by surprise, "The Star Wars" franchise fiercely independent creator George Lucas sold his company, Lucas Film, to the entertainment empire for more than $4 billion. What's more? Disney's announced plans for three more "Star Wars" films.
It's the superstar relationship that has Hollywood asking: are they or aren't they? Chris Brown who then beat girlfriend Rihanna in 2009 said in October he's renewed his friendship with the singer. But is it more than just friends? Song collaborations and vague tweets from Rihanna have suggested otherwise.
JEN GARCIA, SENIOR WRITER, PEOPLE: They want to keep everyone guessing and don't want to explain what's going on with their relationship to anyone in the world.
BROOKE BALDWIN, CNN ANCHOR: The Jacksons, the family drama turning into one big reality show.
TURNER: More turmoil for the Jackson family last summer as Michael Jackson's teenage daughter Paris announced on Twitter her grandmother and guardian Katherine Jackson was missing, forcing a judge to suspend her guardianship of Michael's three kids.
BALDWIN: Katherine Jackson, she's back home. She says she wasn't kidnapped.
TURNER: Michael's siblings disputed the claim, saying their mother was resting in Arizona under doctor's orders. A judge later restored Katherine as permanent guardian of Michael's children.
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HONEY BOO BOO, REALITY TELEVISION STAR: Lindsay's tearing up my pants, mama.
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TURNER: Whether it was a pleasure or guilty pleasure, audiences couldn't turn away from TLC's hit reality show, "Here Comes Honey Boo Boo", about a child beauty pageant contestant and her family.
TURNER: Rapper Psy went from a relatively unknown performer to a world phenomenon after his catchy dance tune "Gangnam Style" hit the web.
TURNER: The music video featuring the South Korean star song and trademark dance shattered records online, becoming the number one watched video on YouTube with more than 970 million views.
But Psy's newfound fame wasn't without controversy. Harsh anti- American remarks he made during a performance in 2004 resurfaced online. He apologized saying his lyrics were emotionally charged and resulted from events in the war with Iraq.
COSTELLO: New sexual misconduct accusations against the former voice of Elmo.
TURNER: In one of the most surprising stories of the year, Elmo puppeteer Kevin Clash was forced to resign from "Sesame Street" after being accused of being in sexual relationships with minors. His lawyer says the cases are without merit, but Clash still opted to leave "Sesame Street" after 28 years.
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KRISTEN STEWART, ACTRESS: I love you.
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TURNER: "Twilight" stars Kristen Stewart and Robert Pattinson had been one of the hottest celebrity couples, until a highly publicized fling between the actress and the man who directed her in "Snow White and the Huntsman" rocked Hollywood.
GARCIA: Kristen Stewart moved out of the home that they shared together. She released a very public statement asking Robert for forgiveness.
TURNER: Pattinson apparently did forgive, just in time for the premiere of "The Twilight" saga, "Breaking Dawn Part 2" in November.
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CANDY CROWLEY, CNN HOST: Celebrity splits sending shock waves to the entertainment world.
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TURNER: After nearly six years of marriage, Katie Holmes filed for divorce from Tom Cruise in June, blind-siding Hollywood's biggest movie star.
GARCIA: What was so incredible is how Katie Holmes had everything just so well-prepared.
TURNER: Although Holmes asked for full custody of their daughter Suri, the couple eventually settled amicably on the divorce just two weeks later, ending one of the most high-profile celebrity marriages.
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PIERS MORGAN, CNN HOST: You're watching CNN, the breaking news of Whitney Houston's death.
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TURNER: It was a tragic end to an iconic singer's successful but often troubled career. Whitney Houston who battled with drugs and alcohol for decades died February 11th in a hotel bathtub at the age of 48, the night before the Grammy Awards.
Houston's death was an accidental drowning with the effects of heart disease and cocaine use as contributing factors.
TURNER: Nischelle Turner, CNN, Hollywood.
COSTELLO: Good news for the economy: home prices are up at the biggest annual rate in more than two years.
Alison Kosik up next from the New York Stock Exchange.
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UNIDENTIFIED MALE: We know this issue of food supply is looming. We know it's out there. I don't think enough people are really aware or thinking about what's to come. With so many mouths to feed in the world, it's going to be -- it's going to be scary.
The United States imports I think about 85 percent seafood consumed. And I think from a food safety, food security point of view, I think the United States needs to wake up and begin producing its own seafood.
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COSTELLO: Forty-seven minutes past the hour. Time to check our "Top Stories".
President Obama leaving Hawaii today to return to Washington for a last-ditch effort to reach a fiscal cliff deal. The Senate and House are expected to reconvene tomorrow. As you know we are just six days away from -- from possible across the board tax increases and spending cuts.
Former President George H.W. Bush is still in a Houston hospital his wife, Barbara, and other relatives at his side. The 88-year-old has been in the hospital for more than a month with a lingering cough and recently had a low grade fever. Doctors remain cautiously optimistic about a full recovery.
A claim of Facebook privacy breach within the Zuckerberg family. Co- founder Mark Zuckerberg's sister says a family photo she posted on Facebook was reposted by another woman on Twitter. Randy Zuckerberg called that woman out on Twitter. The woman apologized saying she thought it was quote, "Public because it was in her Facebook newsfeed". I hope you got that.
In China the world's longest high speed railway opens to connect Beijing with Guangzhou, that's just 1,500 miles. It slashes the travel time between the two cities from 22 hours to just eight. 1,500 miles in eight hours, but tickets start at $138 and they're a little pricey for some people and many travelers say it's still cheaper and faster to fly.
A report just out this morning shows home prices up in October, the biggest annual gain in more than two years. Alison Kosik joins us again from the New York Stock Exchange. Tell us more.
ALISON KOSIK, CNN CORRESPONDENT: So this is a bigger gain than analysts were expecting Carol. Home prices in 20 of the biggest cities in the U.S. went up by 4.3 percent in October compared to October of last year and as you said it is the biggest increase in more than two years.
Now prices also they've gone up for five months in a row so that's more good news as well as far as the momentum goes. And you know what; this jives with a lot of the other housing reports that have come in on the positive side talking about home sales, home building, builder confidence, all of those are showing this upward momentum, so yes, housing is definitely in recovery mode, and it's really helping to boost the entire economy.
In fact we saw that with third quarter GDP that housing is actually helping to push the entire economy forward because it accounted for a decent chunk of GDP but, you know, don't pop the champagne cork just yet Carol because home prices yes they're down 29 percent from their peak hit in 2006 so yes we're seeing this momentum happen in the housing market but we've still got a long way to go -- Carol.
COSTELLO: We're never going to see the numbers we saw in 2006. So come on.
KOSIK: Never say never -- never say never.
COSTELLO: I don't know that would be a miracle. Which cities are doing the best, by the way?
KOSIK: So the cities that took the biggest hit during the recession they're also seeing the biggest increases. For one, Phoenix, prices there are up more than 20 percent from last year. Also on the list, those areas like Detroit and Miami that were really hit hard during the housing bust. Both have recovered from their lowest housing prices that we saw during the recession.
Now only two of the 20 cities that were measured showed a decline. They include Chicago and New York City. But you know, New York also had a much smaller housing bust and you know it's all relative. Even what's considered a really low price in New York is really hard to afford anyway. So yes it's all relative -- Carol.
COSTELLO: Almost impossible for most of us.
KOSIK: Yes exactly.
COSTELLO: Alison Kosik, thanks so much.
Today's "Talk Back" question, "Do you have the right to know who owns a gun in your neighborhood?" Oh, your responses next.
COSTELLO: Oh the weather outside is certainly frightening. You're looking at affiliate pictures from WXIN of Indianapolis, Indiana. You can see it's foggy and it's snowy there. It's just absolutely terrible driving conditions very dangerous here. So hopefully people in that area of the country are snug as a bug in their homes and they're going to stay at home for quite a while.
Blizzard warnings -- blizzard warnings are in effect for several states while strong winds and a mix of rain and ice could impact the entire mid-Atlantic. As you can see in Washington, D.C., just a little snow on top of the White House this morning, nothing serious. But sure is cold. Cold everywhere this morning. But I guess it is December, right?
Let's get to our "Talk Back" question of the day "Do you have the right to know who own guns in your neighborhood?"
This is from Jeff, "Brilliant idea, now the crazies, the gangs, thieves, know where to concentrate their efforts or more importantly where to avoid."
This from Shawn, "It is a public service. The information is public. Gun owners seem to think that the Second Amendment is more important than the First Amendment. My right not to be shot should be more important than their right to shoot me."
This from Susan, "Being in the public record and publishing it in the paper are different matters. That was wrong."
This from Sherry. "I'd like to know who owns the guns. I would prefer choosing a home in a gun-free zone."
This from Brian, "I'm confused shouldn't we be going after the people that can't be trusted? Registered owners are registered because they can be trusted."
This from Dan, "Absolutely not, not only does it target these people for burglaries but it also lets criminals know who doesn't have a weapon to protect their homes."
This question got a lot of response this morning. I think we got 200 in about 15 minutes. So keep the conversation going, facebook.com/carolCNN or you can tweet me at CarolCNN.
COSTELLO: A rematch of last season's NBA finals turned out to have similar results. The Miami/Oklahoma City battle was the biggest of five presents the NBA gave to fans on Christmas Day.
The game came down to the final seconds. The Thunders' Kevin Durant -- you're going to see him here -- he has a slam. Oh. That brings OKC to within one point. But that was as close as they got. Lebron James finds Chris Bosh under the basket and Bosh makes the easy two. The Heat remains at the top of the NBA East with the Knicks.
The Knicks by the way, trying to keep pace, taking on the Lakers in L.A. Carmelo Anthony's three-pointer puts them up in the third quarter. But Kobe Bryant, oh, he was solid at crunch time. He finished with 34 points, becoming the all-time scoring leader for Christmas Day games. Lakers win their fifth straight.
Virginia Tech's football team is honoring the victims of Sandy Hook Elementary school and the university's own 2007 tragedy. Players wearing decals on their helmets with the number 58, those killed in the two shootings plus initials of the two schools and two of the colors.
Virginia Tech cornerback Antone Exum showed his generosity to strangers. He took his bowl game present, a $470 best buy gift card and spent it on three kids who just happened to be in the store. He just wanted them to have a happy Christmas. That's awesome.
That's a look at sports this morning.
The next hour of CNN NEWSROOM starts right now.
Happening now in the NEWSROOM, shattered windows, roofs torn off and scores of power outages. A winter storm slams through the South and Midwest. And it isn't over yet. We'll tell you where it's headed today.
L.A. begins a gun buyback program today five months ahead of schedule. We'll talk to the mayor about the reasons for moving it up.
Christmas is over, but the shopping isn't. If you're heading out to return that gift that wasn't exactly what you wanted or you want to get in on big post-holiday deals, you will not be alone.
NEWSROOM starts now.
Good morning. Thank you so much for being with us this morning. As Washington wrestles with the fiscal cliff, cities across America are struggling with gun violence.
Two firefighters shot as they rushed to fight a fire in upstate New York. They will be buried today.