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CONNECT THE WORLD
Stocks Plunge Over 400 Points on the Dow; U.S. to Al-Assad: Step Aside; Miami Football Players' Perks
Aired August 18, 2011 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
MAX FOSTER, HOST: You are watching CONNECT THE WORLD on a day that turmoil returned to the markets, as you've been hearing. We're going to continue to look at what sent shivers through traders across the globe.
Richard Quest will join me here in the studio.
But first, let's head to New York and join Felicia Taylor, who's making sense of today for us -- Felicia, go for it.
FELICIA TAYLOR, CNN CORRESPONDENT: Oh, I'm not sure I can make sense out of it. But, you know, where this really began was in Europe. And that was the biggest problem, because there was a report out this morning, earlier today, obviously, that said that the European banks may not be able to fund their U.S. obligation. And that sent shivers pretty much through the financial sector all across the board.
European banking shares sinking. American banking shares doing the same thing. You've got Citigroup down today, I think it we are about 6 percent. You've got Wells Fargo off 4.5 percent, JPMorgan Chase down 3.75 percent.
And then it just continued. There was a report from Morgan Stanley describing the fact that we are at the brink of a global recession. And that again sent shivers through the marketplace, because what this has done is turned speculation. You know, Max, we've been talking about this possibility pretty much the last couple of months. But now it's turning into a reality. And that's the problem.
The other sort of rumor that I heard very earlier on in today's session from one of the hedge fund guys that I talk to all the time was that a regional bank stepped up to the ECB and asked for a $500 million loan. The reason that's important is because in banking terms, that's not a tremendous amount of money. And if that's what they need to keep solvent, that's of great concern to the marketplace, because who's next, possibly?
And then in the United States, we got a rash of economic information all pointing to the down side, whether it was an increase in jobless claims, a regional report on manufacturing that was horrendous, frankly, and also consumer inflation kicking up ever so slightly and existing home sales down 3.5 percent. You've got all sectors there pointing to the down side. And that's what put fear into the marketplace.
But what's interesting is people did step in at the end of the day and sort of -- that's what they call bottom fishing, looking for good prices for stocks. So that's actually a good sign that there are buyers out there in the marketplace. There's plenty of cash on the sidelines.
But we had some bad news, also, at the bread -- at the end of the day, at the -- at the close, coming from Hewlett-Packard, now saying that they're not going to be selling PCs. They've -- they're not going to be selling their touch pad anymore. They cut their sales view and that stock was down about 7 percent right at the -- at the word of that news.
But again, you know, all that glitters is gold. People have stepped into the marketplace and picked up gold once again. It's up $34 right now, at $1,828. The guys I talked to were looking for $2,000 in the near term, which, frankly, is quite amazing.
Also, one other bit of news that was a little frightening in the marketplace is that a Swedish financial regulator stepped in to scrutinize the U.S. operations of -- of the European's largest lenders and said it won't take much for inter-bank lending to freeze. That is certainly not anything that any of us want to hear in the near-term.
So, Max, it was a very volatile day. It will probably continue into the weekend, as people may not want to hold onto their positions in Friday's trading.
FOSTER: Yes. I look forward to Friday.
Thank you so much, Felicia.
We're going to -- and it's been such a stormy day across, but we're going to take a spin around the globe. It is a global story today.
First of all, in the United States, this was the -- the closing picture. As you can see, the Dow is down, the NASDAQ down. The S&P 500 was also down, but they were lower a bit earlier in the day.
In Europe's, traders' screens were a sea of red as markets plunged. In Frankfurt, the main DAX index was down 5.8 percent, nearly 6 percent, with France's CAC 40 not far behind.
And while Asian markets avoided similar falls, it remains to be seen what will happen when trading resumes in just four hours time.
The last couple of weeks have been a story of rallies and routs. Yet despite the best attempts of policymakers to steady the markets, it seems the fear of another recession just won't go away.
Richard is with us.
Is the market in meltdown right now, Richard?
RICHARD QUEST, HOST, "QUEST MEANS BUSINESS": No. No. It's not in meltdown, but it is in crisis. It is telegraphing a very deep unease on economic grounds, on worries about the sustainability of corporate profitability, which has been one of the only bright spots that we've had. And it is giving a very firm thumbs down to the inability of policymakers to great to grips with it.
But I think one has to be more nuanced.
What are they supposed to do?
Yes, you can print more money. You could have another fiscal stimulus. But in this global market, with high frequency trading, we're talking hundreds of billions, if not trillions. And they've already poured a lot of money into the global economy.
FOSTER: Are you saying there's nothing they can do right now?
QUEST: No. I'm saying it's going to take time. And the sooner that people accept this, it's going to take time. And there will be these tremendous hiccups. This is not your typical cyclical recession that's borne out of a demand-led. This is not that way at all.
FOSTER: It means you're going to be very busy, Richard, over the next few months.
QUEST: No question about it.
QUEST: This is not going away.
FOSTER: OK, Richard, thank you very much, indeed.
Well, today is just part of a much bigger picture. And Richard says it's going to keep going on. And if you take a look at this, you can see just how much the FTSE, the Dow, the Nikkei have plunged since the beginning of the year. This really does tell the story.
So where all the money going?
Well, have a look. The Dow down 5 percent this year. It's not actually as bad as the other markets, though, even though we often do focus on the Dow because the daily movements are so negative.
Let's have a look at the other markets. The Nikkei, the problems aren't in Japan. But look at the Nikkei, down more than 12 percent since the beginning of the year. The other main market here in London, the European financial center, the FTSE, the main index, down 13 percent -- very, very bad news.
But we've mentioned gold. Felicia was talking about gold. And that's the chart that really bucks the trend, up 28.69 percent on the year, $1,800 an ounce, getting very, very close to $2,000 an ounce, extraordinary figures that we never thought we'd see them but we're seeing them now. And it could go on.
Gold isn't the only safe haven at the moment. Despite recent fears over America's deficit, the price of the U.S. Treasury bonds is soaring as investors switch from equities.
Fred Bergsten is the director of the Peterson Institute for International Economics.
It's fascinating, isn't it, Fred, because there's real irony there. So many of the problems were associated with U.S. debt, but people are going toward that as an investment, as a safe haven.
It's ironic, right?
FRED BERGSTEN, PETERSON INSTITUTE FOR INTERNATIONAL ECONOMICS: Ironic in a sense, but typical in another sense, when people are running out of other assets. The question you just raised, they have typically tended to go into Treasuries. And they've done it now with a vengeance.
I think that's the answer to your question.
You said, where are they putting their money?
They're putting their money in U.S. governments. That's driven interest rates here to unthinkable lows in terms of both the -- the Two- Year notes, the 10-Year -- 10-year bonds. And I think that's basically your answer, it's the safe haven. And people are running into it.
FOSTER: And they're going to keep running into it, aren't they, for now?
Richard is right, we're going to have a lot more negativity in the markets for some time. But try to give us some hope here.
Where is the growth going to come from?
Because we're talking about global economics here, right, and where the future growth will be. And people are increasingly thinking it's not going to be Europe and America.
So where is the growth?
BERGSTEN: Well, I think there is very good news. And I think it would be a mistake to despair. Half the world economy is now made up by emerging markets and developed countries. As a group, they are growing in excess of 6 percent, maybe even more.
One should probably downgrade their growth prospects a little bit in light of what's happened recently, but not much. We have done a big review here at our Peterson Institute. We maybe knocked down the growth forecasts in the emerging markets half a point. But it still looks very strong. It still looks above 6 percent, still close to 7 or 8 in Asia, at least 5, maybe more, in Latin America and sub-Saharan Africa.
So one should not despair. It's a -- a rotational change in leadership, to use market terms. It's away from the three big high income areas -- the U.S., Western Europe, Japan -- in the direction of the emerging markets.
I think what's happened of late is a marking down, a further marking down of the growth prospects in the rich countries.
The U.S. numbers for the first half, I think, really were a shock. The second quarter was very weak. The first quarter got downgraded. And the historical numbers, going back three or four years, were revised downward, indicating the U.S. recession was worse than we thought, the U.S. economy has not yet recovered its pre-recession peak.
So I think it's a market downgrading of the economic prospects in the rich countries.
The corresponding side of that is that the relative growth performance of the emerging markets looks even better. So I would think more and more money goes in that direction, obviously limited, to some extent, by absorptive capacity...
BERGSTEN: -- and -- and market capability. But that looks to be increasingly the growth area. And I think it will continue to impart positive outcomes for the world as a whole.
FOSTER: OK, Fred Bergsten, thank you very much, indeed, for joining us on the program.
You are watching CONNECT THE WORLD.
And in just a moment, Israel launches an air strike on Gaza in response to a string of deadly attacks. We'll be live for you from Jerusalem with more.
FOSTER: I'm Max Foster in London.
You're watching CONNECT THE WORLD.
Here's a look at other stories we're following for you this hour.
No more hedging or hesitation -- for the first time since the Syrian uprising began, the United States is calling explicitly for President Bashir Assad to step down. The Obama administration condemned his regime's ferocious brutality against pro-democracy demonstrators and said President Al-Assad has run out of chances to implement reforms.
Other countries are already joining the call for him to go. We'll have much more on this story in 15 minutes.
Israel has launched an air strike in Gaza just hours after seven people were killed in a string of attacks in the country's south.
CNN's Jerusalem Bureau Chief Kevin Flowers has more details for us now -- Kevin.
KEVIN FLOWER, CNN JERUSALEM BUREAU CHIEF: Well, Max, the Israeli prime minister, Benjamin Netanyahu, took to the air waves tonight with a statement to the Israeli people saying that the attacks in Gaza, the air strikes in Gaza were retaliation, pay back, if you will, for the deadly attacks that took place in Southern Iran today that claimed the lives of seven Israelis, six civilians, one Israeli soldier and also in that -- also in that attack, seven of the assailants were killed, as well.
But back to this attack in Gaza. The target was a Palestinian militant group called the Salahadeen Brigade. They're part of another group called the Popular Resistance Committees. It is this group that Israel says was responsible for the -- the horrible attack in Southern Israel today.
They said members of this group at some point crossed from the Gaza Strip into Egypt and then crossed into -- back from Egypt into Israel to carry out this attack.
But one of the most worrying things about this attack for Israel is not necessarily Gaza, but it is about the Egyptian Sinai Peninsula and what the Egyptian military is able to do to -- to basically tackle Islamic militants in that -- in that peninsula from basically playing host to Palestinian militants who cross through tunnels and -- and basically stage and plan complex attacks on Israel like this.
So a lot of worries, a lot of concerns in Southern Israel. And also a lot of worries in the Gaza Strip among the population there that they're going to see more reprisal attacks from Israel -- Max.
FOSTER: Kevin, thank you very much, indeed.
In India, an anti-corruption campaigner has scored a victory against the government, as police relax restrictions on his plans for a hunger strike in a public area. Anna Hazare is expected to leave prison on Friday and start his two week fast, even though police say he's free to go now.
Thousands protested his arrest on Tuesday for planning a public gathering against rampant corruption in India. Authorities feared it would get out of control.
Coming up on CONNECT THE WORLD, the University of Miami Hurricanes in the U.S., in the middle of a storm.
Did college athletes accept cash, jewelry and even prostitutes from a man who's now behind bars?
It's a play -- it's a pay for play scandal at the heart of a big sports business.
Plus, just in 10 minutes, world leaders call on Syria's Assad to step down.
Is the demand falling on deaf ears?
FOSTER: A scandal is threatening to bring down one of the premier college sports teams in the U.S. with huge financial repercussions.
Before we get to those nitty-gritty details, a few background facts for you.
College football is a very big business in the US. Last year, the richest schools pocketed more than a billion dollars in profits for the first time.
Take a look at the top five earnings schools. The University of Texas made more than $68 million in profit during the 2010 season. They were followed by Georgia, Penn State, Michigan and Florida.
Each earns tens of millions of dollars just from their football programs.
But while the schools make millions, the players receive only a scholarship -- or that's at least the way it's supposed to work. The players are officially scholar athletes -- amateurs, not pros. But reportedly, at one powerhouse school, the University of Miami, players get a lot more. A booster, basically, a supporter with money and thirties -- and a supporter of Miami says he showered players with gifts, even call girls.
Well, David Mattingly has more on this story from Miami on the pay to play scandal.
DAVID MATTINGLY, CNN CORRESPONDENT: Former University of Miami booster, Nevin Shapiro, had a lot of access to players over the years here at the University of Miami.
And he says from 2002 until 2010, he broke a whole host of NCAA rules involving what sort of gifts and services you can provide to these players.
He says over those years, he was involved with 72 student athletes here, most of them football players and it is involving, he says, about a dozen current players. He says he bought them gifts ranging from jewelry, watches, to close. He's paid for lavish trips to his yacht, also to nights out on the town at clubs. He says he took players to strip clubs.
He also says he arranged prostitutes for Miami players, as well as arranging sex parties for some of these players. And on one occasion, Shapiro says that he paid for an abortion for a stripper who claims that she got pregnant by one of the University of Miami players.
Of course, it's very serious for this program. The NCAA says they've been looking into this for months already and if the allegations prove to be true, then the NCAA says it could have impacts on programs all across the country in the way they deal with boosters like Shapiro.
But for right now, all eyes on the University of Miami and the future of their program in the wake of these allegations.
David Mattingly, CNN, Miami.
(END VIDEO CLIP)
FOSTER: Well, CNN "WORLD SPORT'S" Mark McKay joins me from CNN Center -- and, Mark, this really is a peculiarly American thing, isn't it?
But this is a very big deal. It's a big sport and it's big money.
MARK MCKAY, CNN SPORTS CORRESPONDENT: Yes. And I'd love to take you to a college football Saturday, Max. Come on over. It is a wonderful atmosphere and it's pure ascent every Saturday in the fall in the United States.
But it is big business and becoming so. And it really is a big deal, Max, in terms of everyone being out there on a level playing field, so to speak.
In the course of the University of Miami, as David just reported, the scope of the alleged indictments and payments is so huge, talk of the NCAA, the U.S. sports governing body, clamping down on this particular program in the wake of this and implying the so-called death penalty is certainly being talked about.
What that means is the death penalty closing a program for a season or more. It has been done in the past and it's very crippling to a college football program.
Scholarship athletes, as you mentioned, Max, do receive room and board and certainly an education. They don't get paid and perhaps that's at the gist of this matter, should they get paid/
Certainly, the debate will continue in light of this scandal -- Max.
FOSTER: So when you're talking about cleaning up the sport, I mean where there's big money, there's going to be corruption at some level, isn't there?
But in terms of cleaning it up, what are -- what are the big plans/
You've mentioned a couple of ideas.
But how can it be cleaned up?
Can it be cleaned up?
MCKAY: Well, there's no easy answer, Max. Everyone wants this to be clean, but it's not an easy answer at all. When this scandal broke, the head of the NCAA, Mr. -- President Mark Emmert, actually, he was meeting with the university president about a week before, promising reforms to come down the road to get to the cheaters.
As far as cheating in football is concerned, Max, perhaps the NCAA can work closely -- who knows -- with the National Football League. There have been talks between the NCAA president and the commissioner of the NFL, perhaps not to have the NFL act as sort of a safe haven for these athletes who are accused of cheating to go cleanly into the NFL. Maybe there's something that could be done there.
Of course, the -- the boosters, the -- the fans that had that money certainly have to be watched closely, as well.
The NCAA -- NCAA president does admit there are fundamental problems that need to be cleaned up.
A whole lot more going on in sport, max.
We are back with "WORLD SPORT" in just over an hour.
I'll see you then.
FOSTER: Good stuff.
Mark, thank you very much, indeed.
The United States drops the carrot, meanwhile, and picks up the stick, as -- as patience runs out with Syria.
Coming up, we'll tell you about unprecedented new sanctions against the Syrian regime and calls for its president to go.
Also, free speech versus public safety -- when does government have the right to regulate or even cut off Internet and cell phone services?
FOSTER: You're back with CONNECT THE WORLD on CNN, the world's news leader. Let's check the headlines for you this hour.
Markets have plunged in the US and Europe over fears that they could be heading for another recession. The Dow fell 419 points in New York to sell off following the report from Morgan Stanley warning that both regions were dangerously close to recession.
A Reuters reporter on the scene says Libyan rebels now control a key refinery -- oil refinery in the western town of Zawiya. The refinery's capacity is about a third of Libya's total. The anti-Gadhafi forces have been edging ever closer to the capital, Tripoli.
Israel has launched an air strike in Gaza just hours after seven people were killed in a string of attacks in the country's south. The attack has targeted a bus, other vehicles, and soldiers near the Egyptian border. Israel blames militants in Gaza.
Former Ivory Coast president Laurent Gbagbo and his wife Simone have been charged economic crimes and are in custody. According to the public prosecutor, they've been charged with crimes including armed robbery, looting, and embezzlement.
Today marked a turning point in the world's relations with Syria, starting with a long-awaited statement from Washington.
Fed up with the regime's deadly crackdown and empty promises of reform, US president Barack Obama explicitly called on Syrian president Bashar al-Assad to step down. He also imposed harsh new sanctions, freezing state assets, and banning the import of Syrian oil.
Mr. Obama didn't speak to reporters, but his Secretary of State did.
(BEGIN VIDEO CLIP)
HILLARY CLINTON, US SECRETARY OF STATE: The people of Syria deserve a government that respects their dignity, protects their rights, and lives up to their aspirations. Assad is standing in their way.
For the sake of the Syrian people, the time has come for him to step aside and leave this transition to the Syrians themselves. And that is what we will continue to work to achieve.
(END VIDEO CLIP)
FOSTER: Now, others quickly joined the call for President al-Assad to go, including Britain, France, Germany, Canada, and the European Union.
President al-Assad says military operations in Syria are now over, but you'd be hard-pressed to find people who still take him at his word.
Week after week, month after month, he's claimed his government is attacking only armed gangs, but Syrians themselves and the video they're risking their lives to film tell a very different story.
FOSTER (voice-over): The uprising begins back in March, when protesters take to the streets of Daraa in the south to demand freedom and to end corruption. At least two people are killed during clashes with security forces.
As the violence and the death toll grows, President Assad goes on television.
BASHAR AL-ASSAD, PRESIDENT OF SYRIA (through translator): Our enemies are working daily and scientifically in order to undermine the stability of Syria. We acknowledge their intelligence and their -- but we also think that they are stupid in choosing the target Syria.
FOSTER: Despite acknowledging the call for reform, Assad makes no mention of lifting the country's emergency law.
At the beginning of April, human rights activists say at least ten people are killed in Duma, a suburb of Damascus. Witnesses say security forces fire into the crowds.
The government tries to quell the protests by lifting the country's emergency law, but it does little to stop the demonstrations from spreading.
FOSTER: Europe and the United States condemn the violence and begin to draw up sanctions.
SUSAN RICE, US REPRESENTATIVE TO THE UNITED NATIONS: The Syrian government's actions to repeal the decades-old emergency law and allow for peaceful demonstrations were clearly not serious.
FOSTER: At the end of April, the Assad regime sends thousands of troops into Daraa with soldiers shooting indiscriminately, according to human rights groups.
In early May, troops and militia know as the Shabia are sent into Baniyas and later Homs, Syria's third-biggest city.
As the crackdown continues, the UN Security Council debates whether to condemn the violence, but Russia and China block action.
On June the 12th, Syrian forces enter the town of Jisr al-Shughour, the scene of what the government claims was a massacre of government troops just days before. Thousands of terrified Syrians flee to the border with Turkey to escape the fighting.
Later that month, President Assad goes on television again, blaming armed gangs for the violence and warning that reforms will take time.
ASSAD (through translator): We have to distinguish between those and those of the terrorist. Those the terrorist are very few, but it is very influential.
FOSTER: By the end of July, the crackdown has spread to Hama. By then, an estimated 1,700 people have been killed. The UN finally acts, issuing a statement condemning the violence.
Saudi Arabia follows suit and, along with Bahrain and Kuwait, withdraws its ambassador from the country.
Yet until now, almost five months after the uprising began, no country has been willing to back the protesters' ultimate demand and call for Assad to go.
FOSTER: Well, the US decision on Syria was made in coordination with key allies, including Turkey. One US official says Turkey has gone from seeing President al-Assad as a brother and a friend to someone who greatly concerns them.
Turkey is criticizing the crackdown, but why it isn't calling for Syria's president to go is still an open question. I spoke earlier with a Turkish foreign ministry spokesman.
SELCUK UNAL, SPOKESMAN, TURKEY FOREIGN MINISTRY (via telephone): We are talking with various governments, including the US, of course.
We are taking the parts of the countries in the immediate location, have been talking with them for a long time, and we have been talking with our Western partners as well, including the US.
But we have been very vocal in criticizing the Syrian government because of their implementations towards its own people and --
FOSTER: But nothing's going to change. This criticism just isn't having an effect, is it? That's the point.
UNAL: Yes, unfortunately, our expectations are not being met, and we will continue to be vocal in this respect.
FOSTER: And you will continue to have your expectations not met?
UNAL: No, that's not the case. We will continue to raise our voice on the expectations that they -- Syria should stop responding to people's request by military means.
FOSTER: Is it your diplomatic policy that you're not going to call for a head of state to step down? Will that never happen?
UNAL: Everything is on the concentration and, of course, every country has its own steps to take in order to avoid any kind of bloodshed or instability in their country.
Syria is a very important country for us. That's why anything in Syria has also a lot of possibility of affecting us. That's why we have been very vocal in criticizing the Syrian government, and we will continue to do so unless they stop the operations.
FOSTER: Is there some discussion ever that President Assad should be asked to resign, to step down? Is that ever discussed within Turkey?
UNAL: Every scenario is being considered and discussed, of course.
FOSTER: So, why has that been dismissed in government circles?
UNAL: Well, I did not say that it's been dismissed or its been considered. Every country, every government has its own policy, and it's being trusted to declare itself, and today, the Turkish National Security Council has convened to discuss various issues, including first and foremost Syria, as well.
FOSTER: The Turkish Foreign Minister's visit to Syria earlier this month didn't have any great impact, did it? So, I'm wondering how that affected relations between the two countries.
UNAL: Well, first of all, the almost seven-hour meeting between the Turkish Foreign Minister and President Assad did bring something, at least. We were asking them to leave Hama, and the Syrian forces in the first day left Haman. Then they allowed our ambassador to visit the re, to see it with our own eyes.
They also met the man to have the certain international media to see that Hama was recovered by the military unit.
However, there are other steps that they have taken of course did not meet our expectations.
FOSTER: Well, many have questioned what -- why it took so long for the United States to call for the Syrian president's exit. Why did it hold back when it was relatively quick to call for regime change in other Arab states?
Well, CNN's Senior State Department Producer, Elise Labott, joined me here in the studio with some of her perspective.
ELISE LABOTT, CNN SENIOR STATE DEPARTMENT PRODUCER: Basically, this has been a kind of slow roll toward the US calling for him, saying those magic words for him to go.
And you've seen over the last couple of days and weeks the US being called upon to say those magic words, and I think what the US wanted to do was kind of line up all its ducks, get the Europeans, get the Arabs, get the Turks sufficiently upset enough so that when the US says it, it isn't just a lone US call.
Because you heard Secretary Clinton the other day say, well, if the US calls for him to go, so what, big deal? Then what's going to happen. So, what she's been talking about is this growing international chorus of condemnation.
And I think in the last couple of days, you've seen this growing anger towards President Assad for not stopping the violence.
FOSTER: We've spoken to the Turkish Foreign Ministry, though. They have no intention of calling for him to go. So, it's -- has Secretary Clinton failed in some way in having to make the announcement herself before the Turks did?
LABOTT: Well, I think you're going to see the Turks ramping up their actions towards President Assad. They've gone from President Assad being an ally and a brother to someone they've had concerns about to someone they really feel doesn't belong in Syria anymore.
Yes, they're scared to say he should step down, but I think you heard Prime Minister Erdogan over the last couple of days say that Turkish patience is really running thin. He compared the situation to Libya where the Turks tried to mediate and after a while, they just gave up.
So, I think the Turks are pretty close to giving up on President Assad, and that support was really critical for him.
FOSTER: So, what do the -- what does the American government need to happen now? What do they want to happen diplomatically next?
LABOTT: Well, I think you saw the Europeans' call and the Canadians' call today. The US issued these very strong sanctions on the Syrian oil and gas sector.
And now, I think, you need to see those European sanctions, because that's what's really important. The United States doesn't have any real investment in Syrian oil and gas, but the Europeans do.
They're also looking for countries like India, China, and the Arabs, all countries that have significant investment in Syria, to take some action.
So, I think what they're hoping is this is going to be -- give momentum to these kind of actions. Today, the UN Security Council's having some consultations.
They're hoping that they're going to get a briefing from the UN Humanitarian Human Rights Commissioner, and I think that briefing is supposed to give more momentum for these growing calls for President Assad to step down.
FOSTER: Elise Labott.
Well, a US fact -- a UN, rather, fact-finding mission says Syria is guilty of widespread attacks against civilians that may constitute crimes against humanity. It says it may be time for the International Criminal Court to get involved. The UN Human Rights Council will take up the case on Monday in an emergency session.
Now, shutting down cell phone services on the subway in order to stop a protest? Authorities did that in California, but it's become a free speech firestorm, and that debate is going global.
You probably remember these pictures of flames and rioters here in London. Could that have been prevented by cutting communications? That debate -- hot debate -- up next on CONNECT THE WORLD.
FOSTER: Here in the UK, there are new questions about whether the government or law enforcement can and should regulate cell phones, the internet, social media, sites like Facebook, for example. It follows a week of violence across the country.
So, where do you draw the line between free speech and public safety? Well, it's a global debate, from those riots in London to revolutions in the Middle East.
We want to start, though, with a case in San Francisco in the US. That's where the agency that runs BART, that's the subway system, shut down mobile phone services, hoping to stop a protest before it happened.
DAN SIMON, CNN CORRESPONDENT: We're at a BART station in downtown San Francisco, and this saga all began when protesters threatened to disrupt passenger trains and put a wrinkle in the commute for thousands of people who rely on BART on a daily basis.
Well, that prompted BART to shut down the cell phone communication on several of its platforms. It actually thwarted the protest, but it angered BART critics, including the hacking group Anonymous. It hacked into a BART website, and since then, BART has been on the defensive, saying it had to shut down the cell phones because it was a matter of public safety.
BART, meanwhile, has been battling an image problem. There have been a couple of high profile shootings involving its police officers.
The most recent one occurred last month when officers shot and killed a homeless man who was allegedly carrying a knife, and that's what's prompted a flurry of protests and everything that's followed.
Dan Simon, CNN, San Francisco.
ATIKA SHUBERT, CNN CORRESPONDENT: Here in Britain, we've already had two people sentenced to four years in prison for inciting a riot via Facebook.
And in fact, social media played a critical role in the riots last week. We know that Twitter and BlackBerry Messenger were two of the ways that rioters actually organized some of the looting online.
It was considered such a threat that Prime Minister Cameron told lawmakers he was consulting with police to see whether or not it was appropriate to stop communication on social media if there was any evidence of plotting disorder, violence, or criminality.
Now, as you can imagine, a tremendous backlash from critics who say that would be a violation of free speech.
I'm Atika Shubert in London.
BEN WEDEMAN, CNN SENIOR INTERNATIONAL CORRESPONDNET: The authorities in the UK and elsewhere might think that shutting down communications networks is a good way to bring unruly elements back under control, but before they touch that kill switch, a cautionary tale from Egypt.
For five days during the revolution here, the former regime shut down the cell phone networks and the internet for five days, hoping to nip the revolution in the bud.
But it was a blunt weapon that hurt friend and foe alike. It damaged the Egyptian economy, damaged its reputation and, for many people who had been sitting on the fence, it convinced them that the regime was willing to do anything, even bring the country to a screeching halt, in order to hold onto power.
Power which, of course, in the end, it lost.
Ben Wedeman, CNN, Cairo.
ARWA DAMON, CNN CORRESPONDENT: The Syrian government regularly monitors and tries to regulate communication, taps phone lines. And this is not even something that it necessarily tries to hide. State-run television has broadcast what it said were secret phone calls between activists.
Activists, for their part, fully aware of this, often will only make a brief phone call on their cell phones or send a quick text message before they'll remove the battery to make it more difficult to trace them.
When it comes to military operations, we've regularly seen the government shut off the internet, land lines, the cell phones as well, and so activists developed a smuggling network to try to get satellite phones and other technology to the various areas under key, so that they could continue to get their message out and post those videos that we keep seeing emerging on YouTube.
Now, when it comes to the internet, interestingly, the government unblocked access to social media sites like Facebook. Activists say it's so that they could continue to spy on them when they were online.
Either way, despite all of the government's efforts to try to control communications, activists have always found ways to circumvent the government's various blockades and efforts, and demonstrations most certainly have not let up.
Arwa Damon, CNN, Beirut.
FOSTER: So, are there limits to free speech? And if cell phones or Facebook should be regulated, who decides on how far do they go?
I want to bring in our guest panel. We've got Mitchell Langberg. He's a trial attorney and an expert on freedom of speech. He's in our LA Bureau. And also social media guru Jeff Jarvis, who joins us from New York. Thank you both for joining us.
Jeff, first of all, is there ever a case for the authorities to interrupt services like Facebook or telecom services?
JEFF JARVIS, SOCIAL MEDIA EXPERT: Essentially, no. This is speech, and speech is -- is sacred, as far as I'm concerned.
And let's not forget, we don't know what these tools really are. To say that it's a telephone is wrong, it's much more than a telephone. It's the press, it's the Guttenberg press in everyone's pocket.
And so, we really have to stand behind, I think, much higher principles of free speech in understanding what this really means to the public.
To try to cut it off, the problem here is the governments, I think, are trying to demonize this technology, they're afraid of it, they're thinking it's being used against them and, in some cases, of course, it is. But that's what we the people have a right to do.
FOSTER: Are they blaming the services, sometimes? Where -- for -- things that the criminals are doing, they're blaming the services inappropriately sometimes, is that your view?
JARVIS: Yes. And that if you cut off the bad, you cut off the good. It's a blunder bus approach to this that maybe people in these places were trying to call a doctor or trying to report the news, who were trying to do many things.
And to use this to cut it off, what it does is, David Cameron, for example, or the BART finds itself in the same boat as Mubarak, and that's not where free governments want to be.
FOSTER: Mitchell Langberg, what's your view?
MITCHELL LANGBERG, US TRIAL ATTORNEY: It's not the same boat at all. We can see a big difference between what Jeff said occurred with BART, what occurred in London last week, and what occurs in the Middle East as people who are virtually freedom fighters are fighting their way.
And some -- it comes down to, first, whether we're dealing with a relatively free government, as we are in the UK and the United States or a regime, as we did in Egypt.
And the other issue is, what is it that's prompting this shut down? In BART, they were trying to stop a protest. That was probably way too far under our first amendment.
In London, there was already existing violence going on, and even under the US standards, which are much more stringent, the government can inhibit speech when there's an imminent threat of lawless behavior.
So, that's exactly what's happened, that's exactly what the government in London is -- in the UK is thinking about regulating, and it's appropriate. There is a balancing that has to go. The free speech rights, whether in the United States or in the UK, are not limitless. They're not absolute.
And my point is --
FOSTER: Jeff, can I --
JARVIS: What you're doing is you're cutting off --
JARVIS: You want to cut off a few who are violating laws that already exist, and those laws are there, and you can prosecute them under those laws, but on the basis of this fear that it's technology, you're going to cut off the rights and the use that we all have this technology, because you're blaming the technology. Which is a Luddite view of this and doesn't hold.
FOSTER: But Jeff --
JARVIS: Yes, I'm sorry, but this does put Cameron in the same boat as Mubarak, trying to shut off the internet.
FOSTER: Let's break this down and make it a bit less academic. Let's just take an example. A police officer in Manchester sees that there's some sort of incitement on Facebook. There's a guy that says, "Right, we're going to organize a riot down the road, I'm not going to tell you exactly where it is for an hour, say. I'll let you know in an hour."
And then, suddenly, everyone's talking about that event, and it's pretty clear that that event is going to kick off. The police can stop it happening by shutting down the service.
JARVIS: No, they can't. That's -- that's the problem. Didn't Mubarak learn that he couldn't shut down his revolution by shutting down the entire internet?
FOSTER: But on one particular case, that one particular riot, they can stop that particular riot.
JARVIS: No, they can't. You're making an assumption they can. They don't always stop it. Period. It won't. It's foolhardy.
FOSTER: But the rest of the people being --
LANGBERG: Yes, they can.
FOSTER: -- communicate. They aren't going to know where it is.
LANGBERG: The government has a job to try to protect people, and they've got to balance the rights of people against that job. And when there is an imminent threat of lawless behavior, especially dangerous lawless behavior, then under -- in the United States, we call it a time, place, or manner restriction.
There's -- for a limited time, there's a certain kind of speech that's being limited, and the government -- because the government has a significant interest in it and there's no less restrictive alternative, it's perfectly appropriate.
And the conduct of rules need to catch up with the technology, and that's one of the problems here.
JARVIS: Oh, I think --
LANGBERG: Jeff's idea is --
JARVIS: Couldn't disagree more --
LANGBERG: Jeff's idea is great in principle --
JARVIS: I think that you already have the law, you have the --
LANGBERG: I'm a big fan of first --
FOSTER: OK, yes, carry on, sorry. Jeff, one second. Just carry on, your thought.
LANGBERG: I'm a big fan of the first amendment, here, the free speech rights. But the fact of the matter is is that in principle, they're a good idea, and in practice, they need to be protected. But they can't be absolute. Jeff knows that.
When there's a police officer involved in going to somebody's house on a domestic dispute, he's not going to let people pick up the phone. That's free speech, too.
FOSTER: OK --
LANGBERG: There are limits.
FOSTER: Mitchell, I just want to --
LANGBERG: And you can't say it's absolute.
FOSTER: OK, thank you very much, Mitchell. Jeff, I just want to ask you, this is a debate that everyone's having. The problem is, the services we're talking about are privately run. So, who's going to decide this in the end? What's going to happen?
JARVIS: I wrote a book called "Public Parts" coming out soon, in which I argue that these are decisions that we the people, the citizens of the internet, need to make above and apart from government and corporations. These are principles we have to talk about.
This is our Guttenberg press in the pocket, I'll say again, and these are precious tools of publicness that we have.
And so I think we need to have the kind of discussion we're having right now, but have it not in the specifics of one episode or one hypothetical or one law, even. But instead, these are principles of humanity that we must discuss going forward in a new world.
FOSTER: OK, Jeff Jarvis and Mitchell Langberg, thank you both for joining us. The debate continues. We'll be back in a moment.
FOSTER: Dog lovers beware. The American Kennel Club is reporting a 49 percent increase in pet thefts in the US this year. Many dogs are stolen so they can be resold on the internet or held for ransom, even.
The club says fitting your four-legged friends with a microchip to identify it helps pets get returned. It also recommends keeping your dog on a lead, which is sound advice.
Well, as it turns out, dogs are also doing our jobs. In tonight's Parting Shots, proof you really can teach an old dog new tricks.
MEGHAN HAYWARD, WABI TV-5 CORRESPONDENT (voice-over): At first glance, six-year-old Kaleigh seems like your average golden retriever, but she's got quite a trick.
SHARI DUTHIE, OWNER, WHITETAIL GOLF COURSE: One of the golfers, and I'm not even sure now who it was, decided to see if she could -- how smart she really was, I guess. And they gave her the key, and she started bringing it back to the clubhouse.
HAYWARD: Golfers returning their carts at Whitetail Golf Course in Charleston can cut a corner thanks to Kaleigh.
DUTHIE: Pretty stunned. Everybody laughed. The ones that are used to it, they give her the key, they go to the parking lot, she brings the key to the clubhouse. They don't even have to come to the clubhouse.
HAYWARD: Her owners say it's become a full-time job.
DUTHIE: Pretty much tries to get all of them, unless she's very tired at the end of the day from a busy day.
HAYWARD: Members of the golf course are impressed.
UNIDENTIFIED MALE: A little surprised, but I've known the dog for a long time, so -- and I -- I just gave her the key.
FOSTER: So now you know. I'm Max Foster, thank you so much for watching. World headlines and "BackStory" will follow this short break.