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CONNECT THE WORLD

Downward Spiral; Suicide Blast at Mosque; Syrian Official Defends Crackdown; U.S.-Chinese Teams in Basket Brawl; Spilling Secrets; Football Season on Hold; Recap of British Phone-Hacking Scandal; Do News Corp Corruptions Extend to U.S.? International Plea for Aid; Award-Winning Director of Video to Stop Somali Famine; Week on the Web; Parting Shots of Celebrity Walk-Outs

Aired August 19, 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: Downward spiral -- U.S. markets in the red again after another dismal day across the globe. The main cause of concern, Europe. Could a common bond, though, contain the crisis?

Then, spilling secrets -- a "News of the World" investigator is forced to reveal who ordered him to hack phones.

And the football season on hold as some of the biggest names in a beautiful game refuse to take to the field.

These stories and more tonight as we connect the world.

Fear and uncertainty have gripped the markets yet again, ending a turbulent week in a sea of red. A sell-off in the final hours of trading saw the Dow close down. Across the globe, it was a similar story, with the fear of another global recession sending investors scurrying for safety.

Felicia Taylor has been following the highs and the lows and joins me now from New York -- Felicia.

FELICIA TAYLOR, CNN CORRESPONDENT: Well, Max, there certainly have been plenty of them. You know, we saw in today's trade, though, very somewhat contained -- a little bit up, a little bit down for most of the session. But in the last five months, that's when the kicking -- the selling really kicked into high gear. So now we've got the markets off 1.5 percent across the board, which is a bit worrisome, but not unexpected, because we didn't expect to see investors holding onto their positions throughout the weekend.

We -- we don't know if we're going to get any new news out of the Eurozone and whether or not their banks are going to be solvent enough to pay off any of their U.S. debt obligations. And that's kind of what triggered the selling on Thursday's session.

So people don't want to be long in the stock market in case they're getting news over the weekend. And that's what you saw in the final minutes of trade.

However, earlier, I had the chance to speak to the Dallas Federal Reserve president, Richard Fisher, who tried to calm the markets just a little bit, which was some good news. And he doesn't believe that we're going to see a double dip recession.

Is growth going to be slow?

There's no doubt about it. And we saw many banks, earlier this week, JPMorgan Chase, Morgan Stanley, all saying that they've ramped back in their expectations for growth in the fourth quarter and even moving forward.

Listen to what he had to say.

(BEGIN VIDEO CLIP)

RICHARD FISHER, PRESIDENT, DALLAS FEDERAL RESERVE BANK: We have gas in the tank. What the problem is, is that no one is stepping on the gas pedal and engaging the transmission to move our economy forward at the speed we would like to move forward. We're still moving forward. We have the greatest capital plan in the world and the most efficient economy in the world. But it needs to engage. And the whole debt ceiling negotiations, which I considered to be a comic opera, gave pause to business leaders, to consumers, to everybody. We were told by our president, by our Congress, by our Senate, the sky is falling.

And when you get that kind of message from your leadership, it doesn't matter if you're a Democrat or a Republican or whatever you are, you want to pull back and just wait and see what the outcome is going to be.

(END VIDEO CLIP)

TAYLOR: And that's exactly what corporations, investors, a lot of people out there have done, is just sit on the sidelines, waiting for some clear leadership out of Washington on whether or not there's going to be some sort of tax reform and where the deficit spending is going to come from.

This now marks the biggest four week drop in the stock market in the U.S. since March of '09, which, of course, was the pinpoint of the financial crisis -- Max.

FOSTER: OK, Felicia.

Thank you very much, indeed, for everything this week.

So another stormy week on the markets.

But what's the damage?

As we take a trip around the globe, you can see that stocks on Wall Street, despite rallies earlier in the day, all closed down. Across the Atlantic, a turbulent day left the markets reeling, with Germany's DAX the biggest loser.

In Asia, things were even worse, though, with falls of more than 3 percent for Japan's Nikkei and Australia's benchmark S&P/ASX Index.

The fear of another global recession is often used to explain the volatility of the markets.

But is that the complete picture?

Earlier I asked Richard Quest to investigate.

(BEGIN VIDEOTAPE)

RICHARD QUEST, HOST, CNN INTERNATIONAL'S "QUEST MEANS BUSINESS": To understand why the effect has been so severe of what's happened this week, we need to look at the evidence. And now, as detectives, we start to see these little pieces of news are having a disproportionate effect.

It all goes back to 2008, the enormity of the original crime, the Great Recession, the financial crisis. It's taken us much longer to get over what took place back then.

The witnesses, the politicians seemingly out of policies or, if they do have policies, they're not doing a particularly strong job of explaining them. The witnesses are fighting amongst each other.

And then you've got the globalization effect, which we can call the debt virus spreading -- risks of contagion. For instance, the Seoul Kospi Index in South Korea.

How did that fall 6 percent?

Simple, because of fears that the United States won't buy so many of their computer chips and electronics.

And finally, there is, of course, fear itself. We've now reached a situation, quite common in markets, where the tail is literally wagging the dog. But, frankly, it's only when the dog starts sniffing that -- that we get to understand this --

FOSTER: You've taken it too far now.

QUEST: -- this mystery.

FOSTER: Let's end it there and look into the future, if we can.

How do we know when we are in a recession?

There's all this talk about a recession, a double dip.

How do we know when we get there?

QUEST: Technologically, of course, it is two quarters of negative GDP -- at least that's the accepted definition. We don't need to worry too much about that. I would think that if we even get one quarter of negative GDP, then people will say that is a recession.

But we do actually need six months worth. And, in some cases, it will be a close run thing. Many economists take France, take Germany, the U.K., not so much the U.S., but many of these economies are just barely growing. The slightest tip over and they will go back into a recession.

FOSTER: And there are market ups and downs in the way of trying to judge when that happens and to what extent.

So has it been factored into the markets?

At what point do we say that the recession has been factored in?

QUEST: Don't forget, markets are, by and large, forward looking indicators. They like at the forward value of earnings and income and revenue of companies. That's under threat.

They look at consumer spending, they look at worries in consumer confidence. And what this is really about is whether or not these massive swings are so frightening people that they stop spending.

Do you buy that new car or dishwasher?

Do you spend extra money on clothes or go on holidays?

When the consumer stops spending, that's when what's promised to be a recession actually becomes a reality. At the moment, we're not there yet. People believe it can be averted. But I think, if you take the consensus, it's dangerous and it's going to be a close one thing.

(END VIDEOTAPE)

FOSTER: So far, policymakers have tried and failed to calm the markets. Yet among economists, there's a growing consensus that pooling Europe's debt could be the solution.

A Reuters poll taken earlier this week found that 41 out of 59 economists thought a common Eurozone bond could finally stem the sovereign debt crisis. Thirty-six out of 60 analysts expect leaders across the Eurozone to eventually agree to issue them.

But earlier this week, German Chancellor Angela Merkel remained unconvinced.

(BEGIN VIDEO CLIP)

ANGELA MERKEL, GERMAN CHANCELLOR (through translator): I think people are looking for a panacea to solve the crisis. Some people have put forward Eurobonds as a magic cure. But I'm not convinced that they would be the ideal solution.

(END VIDEO CLIP)

FOSTER: So, why do a great number of economists disagree?

Let's put that to Jan Randolph.

He's the director of sovereign risk at IHS Global Insight.

Thank you so much for joining us.

What's the -- what's the one single advantage to this?

JAN RANDOLPH, DIRECTOR OF SOVEREIGN RISK, IHS: Well, it would stop the debt crisis overnight. Markets wouldn't be able to play one sovereign off against another within the Eurozone. There will be one single credit rating, one borrowing rate, and everyone -- and huge, deep, mar -- new market, hugely attractive for those who've got hundreds of billions to invest, like China.

FOSTER: And that would have repercussions, obviously, for the U.S.. It would -- because their Treasuries are often owned by the Chinese, of course.

But I'm just wondering, it has to be backed by Angela Merkel, doesn't it?

But she's not going to back something which isn't going to benefit Germany, because they would lose out. Those countries with the -- without the debt are going to lose out to the ones with the debt.

RANDOLPH: Yes. I mean if you ask yourself who's actually pushing forward this idea, it tends to be high debt countries like Italy. Those against it tend to be the net creditor companies like Germany. And these - - the -- the realpolitik of the Eurozone is nothing gets done without the German signature. So they've got to be for something like this.

FOSTER: So sort of accept that they'll pay more for their borrowing?

RANDOLPH: Yes, I mean this is the problem. It would -- it would help reduce the borrowing costs of those with heavy debts. But it would also mean that the Germans we do have to pay more for borrowing costs. And that is the problem.

The other issue, of course, is that Germany quite likes the situation as it is at the moment, because its markets are imposing the discipline in the form of higher interest rates. And that is a better guarantee of -- of Madrid and Rome reforming and getting a grip on their budgets than any promise for a balanced budget.

FOSTER: So what would Germany get out of it, because at the moment, it doesn't look like it's going to happen?

RANDOLPH: Well, I mean there are rising calls even in Germany for this -- this decisive solution. It is in their interests that the Eurozone holds together. They have benefited hugely from the stability around their borders and from the opening of markets both within the Eurozone, but in Eastern Europe.

So they've got the most to lose long run. So they ought to adopt a bit more enlightened self-interest in this respect. But I think they are - - it's not as if they've completely dismissed the idea. They're just saying not now, perhaps in the future. And I think the last -- the last summit between Sarkozy and Merkel, they said basically, we need greater fiscal discipline, perhaps a budget -- a budget balance rule in the constitution of Eurozone governments. And then when -- when that happens, then we can start thinking about Eurobonds.

FOSTER: Let's just talk about the U.S., because this would have a huge impact on the U.S., right, because China has a lot of money invested in the U.S., because Treasuries are the best option right now. But if Europe presents an alternative bond, a global bond, money could leave the U.S. and go into Europe and that would have a huge impact on the U.S., wouldn't it?

RANDOLPH: Absolutely. I mean one reason why U.S. yields are so low, even after their credit downgrading, is that you've got a problem if you've got hundreds of billions to invest like China. There really is only one car park to put it in and that's the U.S. Treasury market. It has no equal, no -- no peer.

But if you create a Eurozone debt market, then you have something nearly as big. And it's hugely interesting -- it's of hugely important significance to the global economy, because you would have a huge, deep market and it probably be a safe haven, as well, although not quite as safe a haven as the small German Bund market, but hugely attractive to long-term investors.

FOSTER: Jan Randolph, thank you very much, indeed, for joining us.

You're watching CONNECT THE WORLD.

Still to come, a deadly stand-off in Afghanistan -- details of a suicide blast in just two minutes for you. It was meant to be kick-off this weekend, but a players strike delays the start of the Spanish football season. That story in 10 minutes.

(COMMERCIAL BREAK)

FOSTER: I'm Max Foster in London.

You're watching CONNECT THE WORLD.

And here's a look at other stories we're following this hour.

In Kabul, suicide blasts, a stand-off and at least eight people killed.

The target?

A British cultural center. Afghan, NATO and U.K. leaders are condemning the coordinated attacks that came on the 92nd anniversary of Afghanistan's independence from Britain. Militants first blew up a truck bomb at the British Council's gate. Another it's got detonated an explosives vest and several fighters stormed inside, leading to an hours' long siege. The Taliban have claimed responsibility.

A suicide bombs also rocked neighboring Pakistan, when a bomber hit a crowded mosque during Friday prayers. At least 43 people were killed and more than 100 wounded. This happened in the village of Ghudni in Pakistan's volatile tribal region.

Reza Sayah explains how the attack unfolded.

REZA SAYAH, CNN INTERNATIONAL CORRESPONDENT: Police in Pakistan say a teen-aged suicide bomber carried out this attack. They say he was no more than 16, 17 years old and he walked into the courtyard of this mosque and blew himself up.

This is another one of those attacks that drives home the fact that for some militant groups in Pakistan, no target is off limits, not even mosques, where you have hundreds of innocent people worshipping.

More than 40 people killed in this explosion. More than 100 people were injured.

Video of the aftermath showed an awful scene -- debris, shoes, slippers strewn everywhere, bloodied victims staggering away from the scene, looking for help. In a hospital nearby, you had more victims being treated. Sometimes you saw two victims sharing one hospital bed because there simply wasn't enough room to treat everyone.

No group has claimed responsibility for this attack. But two things to look at here -- the timing and the location of this explosion. The attack happened right in the middle of Friday prayers, right in the middle of the Muslim holy month of Ramadan, a time when mosques are often packed. And, indeed, police say this mosque was filled with at least 300 whispers. Then you have the location of this attack, Khyber District, just west of Peshawar, right along the Afghan border, an area that has been plagued by militancy, not just because of the fighting across the border in Afghanistan, but because of the presence of the Pakistani Taliban in the region.

Reza Sayah, CNN, Islamabad.

(END VIDEOTAPE)

FOSTER: Israel unleashed a wave of jet fighter strikes and militants in Gaza fired back with rockets, after one of the worst recent attacks on Israel. Palestinian medics say Israeli planes killed a boy and militants in three separate attacks. Israel's military says it went after weapons manufacturing sites, as rockets from Gaza into Israel wounded six people.

The hostilities come a day after eight Israelis died in attacks on buses, civilian vehicles and soldiers.

The European Union is preparing to follow the lead of the United States by banning oil imports from Syria. The move would mean that Syria would lose its biggest crude buyer. The proposal for the new sanctions came as more deadly demonstrations broke out on Syrian streets.

In an interview with CNN's Anderson Cooper, the Syrian ambassador to the United Nations defended the government's crackdown.

(BEGIN VIDEO CLIP)

ANDERSON COOPER, HOST, CNN'S "ANDERSON COOPER 360": We've seen countless videos of children with broken bodies --

BASHAR JAAFARI, SYRIAN AMBASSADOR TO UNITED NATIONS: I -- I have --

COOPER: -- returned after weeks in detention. We've seen people being shot at as they try to retrieve the dead and wounded bodies of their friends and families on the street. And we've seen protest after protest broken up with tear gas and security forces, uniformed and not, firing live ammunition into crowds.

Are all of these lies?

JAAFARI: I have also countless of other videos showing exactly the opposite. I am not denying that we have losses of life -- lives over there. I'm saying that we should be objective in our approach while analyzing what's going on in Syria.

(END VIDEO CLIP)

FOSTER: Decades ago, China and the United States began thawing their frozen relationships when table tennis players started some ping pong diplomacy.

Now, as Jaime Florcruz tells us, those cordial times are being fouled by teams from the two countries who turned what was supposed to be a friendly game into a basket brawl.

(BEGIN VIDEOTAPE)

JAIME FLORCRUZ, CNN CORRESPONDENT (voice-over): Sports diplomacy took a big hit in China Thursday when an exhibition game between Georgetown University and a Chinese military team turned into an ugly brawl. With just a few minutes left in the tight game, players started exchanging blows, clearing the bench and abruptly ended what was supposed to be a goodwill game.

Georgetown's exhibition game in Beijing coincided with Vice President Joe Biden's official visit to China.

And earlier, Biden watched an exhibition game between the Georgetown Hoyas and another professional Chinese team. That game ended on a friendly note, but not the Thursday match-up with the Bayi Rockets.

Georgetown head coach later issued a statement. "Tonight," he said, "two great teams played a very competitive game that unfortunately ended after heated exchanges with both teams. We sincerely regret that this situation occurred."

Few mainstream Chinese media outlets reported the brawl. But it drew heated comments from Chinese Internet users, one criticizing Chinese players for showing, quote, "hot temper but not so hot basketball skills."

Jaime Florcruz, CNN, Beijing.

(END VIDEOTAPE)

FOSTER: Britain's Prince William and his wife Catherine visited Birmingham in England today, touring areas damaged by last week's riots. They met with local police, residents and the families of the three men killed in a hit and run while trying to protect property there.

Other British royals have also been visiting affected areas this week.

A roundup of sports news is just ahead right here on CONNECT THE WORLD, including the first weekend of the Spanish football league falling victim to a big row over wages.

Mark McKay will have details when he joins us in a moment.

Plus, in just over 10 minutes, ordered to spill the beans -- the private investigator jailed for hacking into the phones of aides to Prince William is told to name names. The latest developments coming up.

(COMMERCIAL BREAK)

FOSTER: Thousands of Spanish football fans were expecting to see stars like Cristiano, Ronaldo and Lionel Messi in action this weekend, but they are going to be bitterly disappointed, it seems. Players are on strike, wiping out the first round of the Spanish league season after talks broke down.

The players say they want the league to guarantee they'll pay hundreds of players who are owed wages. It seems hard to believe, doesn't it, that clubs can't afford to pay their players?

Mark McKay is at the CNN Center to unravel all of this for us -- Mark, I guess it just depends on the type of club. We're focusing on the big ones, aren't we, when we talk about the big money?

MARK MCKAY, CNN SPORTS CORRESPONDENT: Indeed. We're focusing on the likes of Barcelona and Real Madrid when you're talking the big money, as you said. But when you start growing and really unraveling this, you see that some clubs that don't have those names nor those players have certainly found themselves in trouble.

A growing number of Spanish First and Second Division sides find themselves in financial difficulties. We throw out the likes of racing's Santander Club that went into bankruptcy protection in July. Real Zaragoza applied to into administration last summer.

It's reported -- the numbers out there, Max, some 200 players in the top two divisions that have not been paid by clubs, some of whom are in bankruptcy protection, owed a total of around 50 million euros, or $72 million.

So big money and certainly a big problem at this point, with matches being canceled and postponed -- Max.

FOSTER: Yes. So what will this mean for the fans?

What can they expect to happen?

When will they get their games?

MCKAY: We don't know that and it's going to be a very unique weekend. There was so much buildup.

You remember, the Spanish Super Cup that was held earlier this week between Barcelona and Real Madrid?

We saw this as kind of an appetizer to the first week of the season, which was supposed to kick off on Saturday. Well, that's not going to happen now. Maybe with these matches that have been postponed, the two sides can get back to it and really start to get down to the -- the nitty- gritty of this -- the -- the negotiations.

Unfortunately, all we've heard is that both sides are far apart when it comes to these issues. There are more meetings set for Saturday, another scheduled session for Monday, in hopes of working it out, they certainly hope, that they will get the second round of matches in.

We'll just have to see when this stalemate breaks.

Elsewhere in sport, we can talk tennis. With the U.S. Open on the horizon, Clijsters made her comeback to the WTA Tour two years ago. She said she wouldn't play as many tournaments as she did before. She has the responsibility now of raising a family. But I wonder if she had any idea how little she played this year?

Over the past five months, the Belgian has only played in five matches. Friday, Clijsters confirmed she's not going to play in this month's U.S. operation, the final grand slam of the year, an event that she won the past two seasons.

The reason is said to be an abdominal injury. She's already missed this year with shoulder, ankle and wrist trouble.

And we have football news from England. Life not great for Arsene Wenger at this moment. England's Arsenal haven't won a trophy in six years. The Gunners, of course, just lost their skipper, Cesc Fabregas to Barcelona. Now, Wenger himself in trouble with UEFA. It's European football's governing body. And they have opened disciplinary proceedings against the French coach. He violated a touch line ban during a Champions League qualifying match against Udinese on Tuesday.

Wenger, who was prohibited from contacting the bench, was seen giving instructions to his assistant in the stands, who then passed them on to the dugout via mobile phone. He could now face a possible extension to the ban, which will be decided -- or at least discussed, as they continue this hearing on Monday.

In fact, we're going to hear from the Arsenal boss and have much more on the -- the league strike in Spain. We'll open it up to the world of sport. In fact, "WORLD SPORT" on air just about an hour from now, right after "BACK STORY" -- Max, have a good weekend.

FOSTER: Thank you very much.

Good luck with the show.

We're looking forward to it.

Now, one of the most notorious figures in Britain's phone hacking scandal forced to name names.

But will this private investigator reveal whose orders he was following?

Then, a short film goes viral and rallies celebrities to help end the famine in Somalia. Our big interview with the award-winning director is coming up.

And when stars and politicians get their feathers ruffled, some stomp off. But there's a right and a wrong way to walk out of an interview.

(COMMERCIAL BREAK)

FOSTER: You're back with CONNECT THE WORLD on CNN, the world's news leader. Let's check your headlines this hour.

Markets across the globe have ended a turbulent week on a low note. Late sell-offs saw the Dow close down by more than one and a half percent. In Europe, Germany's DAX index took an even bigger fall, with stocks in Asia suffering the most.

Officials in Tripoli say a NATO air strike has destroyed the home of Libya's intelligence chief. A short distance away, fierce battles are raging over Zawiya, a crucial city on a main supply route. Rebels say they control most of Zawiya, including its oil refinery.

(VIDEO CLIP)

FOSTER: A New Zealand special forces service member was among the eight people killed when suicide bombers attacked a British cultural center in the Afghan capital. Two explosions at the gate led to a siege that lasted for hours. The carnage comes on the 92nd anniversary of Afghanistan's independence from Britain.

The pope led a service in Madrid on Friday. Thousands of young pilgrims are witnessing the various ceremonies. They -- they're in the Spanish capital as the pope presides over World Youth Day celebrations.

Time to come clean. That message from a British judge to a disgraced private investigator who became a key figure in Britain's phone-hacking scandal. The judge is demanding that Glenn Mulcaire reveal just who ordered him to illegally tap into the voice mail of famous people.

Dan Rivers has details on that and the latest arrests in the widening scandal that has shut down the popular "News of the World" tabloid.

(BEGIN VIDEOTAPE)

DAN RIVERS, CNN SENIOR INTERNATIONAL CORRESPONDENT: Anti-corruption officers in London have arrested a 51-year-old police officer on suspicion of leaking information about the phone-hacking investigation.

This is just the latest in a long line of revelations about phone- hacking, so we've put together this recap to try and help you understand what's going on.

RIVERS (voice-over): Heard about it but don't get it? Well, here's your phone-hacking 101. It's done by illegally accessing cell phone voice mails. Unscrupulous journalists would obtain the personal cell phone numbers of celebrities, politicians, even crime victims.

Because most people don't change their voice mail code, the default "1-2-3-4," journalists could access the person's voice mail and bingo, a free pass to eavesdrop on sensitive messages.

The practice was known to have been carried out at the "News of the World," the flagship paper in Rupert Murdoch's media empire. He had enjoyed a privileged position in British society, courted by successive politicians, until the nefarious practices of some of his journalists were uncovered.

Now, listen to how politicians are talking about Murdoch.

JOHN PRIESCOTT, FORMER DEPUTY PRIME MINISTER, GREAT BRITAIN: Everybody around him scared to death to do anything that he doesn't like. So, he's the spider in the middle of this web, and it's about time we took him on.

RIVERS (on camera): So, if Rupert Murdoch is the spider, let's examine this complicated web around him.

Rupert Murdoch's son, James, is chairman and CEO of News Corp Europe. Rebekah Brooks reported to him as chief executive of News International.

Now, back in 2000, Andy Coulson worked for Brooks when she edited the "News of the World," a paper he later edited before he went to work for the prime minister, David Cameron.

Now, David Cameron is linked by a thread of friendship to Rebekah Brooks, who lives in the same part of Oxfordshire as Cameron.

You could also spin a link between Andy Coulson and his former deputy at the paper, Neil Wallis. Neil Wallis is good friends with Sir Paul Stephenson, Britain's top policeman until he resigned amid allegations he'd accepted lavish hospitality from a health spa that Neil Wallis had a PR contract with.

Sir Paul Stephenson led the Metropolitan Police. It's alleged that some corrupt officers were selling contact information on the royals to the "News of the World's" royal correspondent, Clive Goodman, who hacked into Prince William's phone.

Well, this web is now really rather tangled, but you get the general impression. It's very complicated.

RIVERS (voice-over): From the police to politicians to the press, three cornerstones of the British establishment which have been tarnished by the scandal.

And the arrest of the paper's former Hollywood correspondent leaves unanswered the intriguing question, were celebrities in Tinsel Town targeted, too?

RIVERS (on camera): And this call to order is also significant. It means that one of the people who was originally convicted of phone-hacking, Glenn Mulcaire, who was imprisoned in 2007, may be forced to reveal who ordered him to hack phones, which journalists at the "News of the World" told him to hack into other people's phones.

It could be a sensational development next week.

Dan Rivers, CNN, London.

(END VIDEOTAPE)

FOSTER: Well, when the scandal exploded, many began wondering if the Murdochs' other news outlets also engaged in phone-hacking, especially those in the U.S., Murdoch's most lucrative market.

Well, the FBI has even launched an investigation. Eric Boehlert is a senior fellow with the watchdog group Media Matters for America. He's also the author of "Lapdogs: how the Press Rolled Over for Bush." He comes to us from CNN New York today. Thank you so much for joining us.

Was the culture --

ERIC BOEHLERT, SENIOR FELLOW, MEDIA MATTERS FOR AMERICA: Sure.

FOSTER: -- in the "News of the World" unusual? A pocket of culture within the wider News Corporation machine?

BOEHLERT: I would say yes and no. I mean, there's a certain Fleet Street culture of sort of adopting the dark arts in terms of obtaining information in literally any way possible.

That culture does not exist in the United States, even in the celebrity tabloids, and I don't think it exists at News Corp at Fox News or certainly "The Wall Street Journal."

But I would say yes because we do see a strain of corruption and criminality within News Corp in the United States. News Corp companies, not necessarily the media outlets, but other subsidiaries, have had to pay hundreds of millions of dollars to settle lawsuits in the last couple of years.

One of the lawsuits was a hacking lawsuit. One of the lawsuits was about how a News Corp company had hacked into its competitors computers.

So, I think there's a larger News Corp culture, which is, there are no rules. We make them up. Rupert said it's OK.

FOSTER: We don't often get to hear the details of these court cases, do we? Because there's this culture, as it were, in the board room to reach settlements outside courts.

BOEHLERT: Right.

FOSTER: So therefore all the parties involved go quiet.

BOEHLERT: Right.

FOSTER: So, I wonder --

(CROSSTALK)

BOEHLERT: Well, it --

FOSTER: Yes?

BOEHLERT: In the United States, there was one case -- again, this was a subsidiary, News America, which is sort of a marketing company. That case got to trial for a few days, and it was so damaging, they ended up paying $30 million, essentially, to stop the trial.

Again, this was the allegation that a News Corp company had hacked into a competitor's computers. News Corp conceded that its computers were used for the hacking, but claimed it couldn't figure out who did it.

An expert who looked at News Corp's investigation determined it was sort of a joke, sort of reminiscent of the internal investigation that News Corp did in the early days of the phone-hacking scandal in Britain.

So, there is sort of a pattern, hacking followed by these sort of inept investigations where News Corp says, "Oh, we're clean," only to find out later they're really not.

FOSTER: And how do -- how clean does this leave the Murdochs? Because when Rupert Murdoch --

BOEHLERT: Right.

FOSTER: -- appeared here in London talking about the "News of the World," he was very clear to say he was very disappointed in the managers underneath him --

BOEHLERT: Right.

FOSTER: -- because he didn't have a clue about this. But does this leave the Murdochs clean? Because if it does, it suggests they're not in great leadership, but does it leave them clean? Is this a problem beneath them?

BOEHLERT: Oh, it's a huge problem beneath them. It continues to be a very pressing legal problem in Britain. I think in the United States it's more of a PR problem and a reputation problem.

For the last couple decades, Rupert Murdoch has been toasted as sort of this master of the universe. One of the most important media moguls on the planet. He's been toasted in all the glossy magazines in the United States running incredible successful media companies, movie studios, television, courting politicians.

He's gone from this sort of master of the universe to the -- really now this sort of Nixonian figure. Sort of a broken man who can't stop this cover up from stopping.

So, I think in the United States, he's taken an extraordinary hit on his reputation. I don't think it's -- he'll ever get his old reputation back. And I think News Corp now in the United States just sort of in general is now synonymous with lawbreaking.

FOSTER: And very quickly, there's a big question now about who's going to succeed him, right?

BOEHLERT: Yes, right.

FOSTER: It's not necessarily going to be his son.

BOEHLERT: Well, the question is James -- yes -- yes, James Murdoch was always supposed to be the successor. I think he's probably going to be called back in front of Parliament again. There's all kinds of indications that his testimony in July was not accurate.

The question is, how long does News Corp want to continue to have its most senior executives completely tainted with this.

FOSTER: Eric Boehlert, thank you very much, indeed, for joining us from New York.

You are watching CONNECT THE WORLD. Still to come, the famine relief campaign that's gone viral.

(BEGIN VIDEO CLIP)

KEVIN MACDONALD, FILM DIRECTOR: I think that it's created a huge awareness, and you just need to go onto the internet and go onto Twitter and you can see people are talking about this. And you're reaching a kind of person who maybe doesn't watch the news.

(END VIDEO CLIP)

FOSTER: We speak to the award-winning film director behind the film that has inspired some of the biggest stars to join the call for aid in Somalia. That's our Big Interview, coming up.

(COMMERCIAL BREAK)

FOSTER: A permanent step into Somalia. Turkish prime minister Recep Tayyip Erdogan has announced his country will open an embassy in Mogadishu. It's part of a massive aid campaign in the famine-struck nation.

He made the announcement during a visit to the capital. He also committed to building vital infrastructure, including schools, houses, wells, and roads.

The Turkish prime minister has also called on other wealthy countries to do more to help, a plea echoed by aid agencies.

The UN is appealing for $2.5 billion in humanitarian aid for the region. So far, countries have contributed almost $2.2 billion.

The U.S. has committed the most of any country so far, $575 million. The European Union is contributing $176 million. The UK has committed another $188 million. Also, Japan is sending $96 million, and Australia has committed $82 million in emergency aid.

As the Turkish leader has argued, some countries are not digging deeply enough. He's not alone. Britain's international development secretary, Andrew Mitchell, has just returned from Somalia. He warns the African region is on the verge of a catastrophe.

I spoke to him shortly after he got back from Mogadishu, and I began by asking him what he witnessed in Somalia.

(BEGIN VIDEOTAPE)

ANDREW MITCHELL, BRITISH INTERNATIONAL DEVELOPMENT SECRETARY: Well, I was able to visit Mogadishu yesterday. During the course of the visit, I was able to meet many people who had come in some cases hundreds of miles from outside Mogadishu to find food.

I met one lady who'd walked for 10 days, 150 miles, with her six starving children to a feeding center in the middle of Mogadishu. So, there was some evidence of success in terms of feeding very dislocated people.

FOSTER: So, what did you read as the most important thing that countries like Britain can do?

MITCHELL: We know that there are 400,000 principally children, who are at very grave risk of dying as a result of this famine, all of them suffering from either acute malnutrition or serious acute malnutrition.

And the experts tell us that we haven't seen these levels, these dangerous levels of malnutrition since the famine in 1992. So, there is an urgency to get food and water through to the affected population in southern central Somalia.

And also to vaccinate children against measles. Britain, through UNICEF, will vaccinate more than 850,000 children against measles, as well as providing bed nets for 100,000 families to protect them from malaria.

Cholera is already prevalent throughout nearly all of Somalia, so it's not just about ensuring that we're able to feed and provide water for the affected populations. It's also trying to ensure they don't die from the after effects, when the rains come and waterborne diseases are prevalent.

FOSTER: It all costs money, though, doesn't it? How -- what sort of money is Britain committing? As the situation gets worse, is it committing more money?

And how do you justify that to the prime minister, who's obviously grappling with the situation with budgets, he's having to cut budgets to keep the economy strong?

MITCHELL: We have led the world and tried to show what needs to be done. Other countries, too, are now responding. Canada and Australia, not least Germany, today. And it is essential that these funds are provided if we are to prevent what is already a huge humanitarian disaster turning into a catastrophe.

And in response to your question about the budget, we made it very clear when we came to power that we would not seek to balance the books on the backs of the poorest people in the world. I'm very proud of that commitment that Britain has made. And we've seen British people from across the country supporting this appeal.

FOSTER: In the buildings behind you, there is a sense of frustration that certain countries, certain regions, aren't pulling their weight in the same way as countries like Britain and Canada. Can you name and shame a few countries that should be contributing more? Perhaps have more of a stake in Somalia?

MITCHELL: I spend a lot of my time talking to my opposite numbers in other countries trying to make the case that we have it in our power to stop this catastrophe. We are able to do that if we all put our shoulders to the wheel.

And I'm really intent on trying to get that argument across, make sure that that persuasive message is heard rather than naming and shaming those who could do a lot more.

(END VIDEOTAPE)

FOSTER: Well, there you are, the British point of view. Well, the gravity of the situation has not been lost on some of the world's biggest celebrities who are putting their weight behind a new social media appeal.

It's called the "I'm Going to Be Your Friend" campaign. Central to it is a short film by director Kevin MacDonald. Tonight's Big Interview is with the Scottish-born director.

(BEGIN VIDEOTAPE)

(MUSIC - "HIGH TIDE OR LOW TIDE" BY BOB MARLEY)

FOSTER (voice-over): The latest film project by Scottish-born director Kevin MacDonald illustrating the harrowing reality of the famine in Somalia.

The short film is central to the Save the Children's global appeal for help.

MACDONALD: I've been working on this sort of authorized big documentary about Bob Marley's life and it's coming out early next year. And I showed that, I showed a rough cut of that to Simon Fuller, who --

(CROSSTALK)

FOSTER (on camera): He knows all the --

MACDONALD: -- I believe you know, the music mogul extraordinaire.

FOSTER: The man behind "American Idol."

MACDONALD: Exactly. The biggest man in contemporary music. And he loved the documentary, and he wanted to do something for Save the Children. He wanted to do something to raise awareness of the situation in east Africa at the moment, the food crisis.

And so, he said to me, we could use this song, "High Tide or Low Tide," it seems very appropriate in its lyrics, and make a little film, which will be out on the web. It's only a minute and a little bit long.

(MUSIC - "HIGH TIDE OR LOW TIDE")

FOSTER (voice-over): But that was enough to get more than 150 big names behind the campaign. David Beckham, Lady Gaga, Britney Spears, Justine Bieber, just some of the stars using their social media power to raise awareness about the appeal.

FOSTER (on camera): It's going to be a very interesting test, isn't it? Because you've got the biggest names out there in the internet and social media involved in this. But have you got a sense so far of the awareness it's created?

MACDONALD: Well, I think that's created a huge awareness, and you just need to go onto the internet, go onto Twitter, you can see people are talking about this.

And you're reaching a kind of person who maybe doesn't watch the news. You're reaching a different sort of --

FOSTER: Is that the intention, though?

MACDONALD: Yes, it's the -- it's actually -- you know, I think there's so much call on people's attention these days, and one of the ways that you can actually get people to really focus is to go to the star who they love, the star who they -- who they follow, and have your appeal on their site, and then it has that --

FOSTER: They've bought into it.

MACDONALD: They've bought into it, they think it's important, so you should, as well, and just take the time to click through.

FOSTER: Obviously, when people are made aware of the film, they then watch the film. Very powerful, quite disturbing, quite upsetting.

MACDONALD: Yes.

FOSTER: On purpose?

MACDONALD: On purpose. I think it has to be. I think that if you're going to give money and make people feel like this is something that's worthwhile, you have to make them realize that there's a very, very serious situation --

(CROSSTALK)

FOSTER: So, a Justin Bieber fan --

MACDONALD: -- people have died.

FOSTER: -- for example, a 12-year-old girl seeing a very powerful --

MACDONALD: Well, why not? I think teenagers are often the most compassionate people there are.

FOSTER (voice-over): Stories based on fact are MacDonald's forte. Academy Award-winning documentary "One Day in September" and the BAFTA Award-winning "Touching the Void" are among his credits.

Most recently, the London-based director invited the online community to film a moment of their day for a piece of cinematic history.

MACDONALD: We made a film called "Life in a Day," which -- the concept of which was to ask people all around the world, anyone who wanted to, to film on the 24th of July, 2010, so just over a year ago.

And people from 192 countries, that's pretty much every country in the world, responded. We got 80,000 clips sent in. It's them taking you into their lives and filming what's important to them and showing you very intimate things.

And that's what I think is so fascinating about social media and about what the internet, in a way, has done to writing and filmmaking is that you can be -- gain access to so many different individuals' lives like this and be inside their lives, in a way.

I was so fascinated that on the first day of watching it, I saw inside somebody's bedroom in Pakistan, and then I was in a mosque in Iraq, and then I was at a sheep farm in New Zealand. You're thinking, wow, this is a voyeur's delight, it's a voyeur's dream.

FOSTER: And now, he's in the final stages of documenting one of the most powerful voices the world has known, Bob Marley.

FOSTER (on camera): You've got great access on that shoot. What new have you discovered? What are his fans or other people going to learn new from this?

MACDONALD: There's new versions of songs, like "No Woman No Cry" that obviously, one of the most famous songs there is, and in there is --

FOSTER: You've uncovered new music?

MACDONALD: New music, there's people speaking who've never spoken before, his children talking, his fellow musicians.

There's an awful lot in the film about his private life and about all the women of his life. He was -- famously loved women, and he had children, I think, from seven or eight different women. He has a very large family.

So, a lot of people talking about that, but some of the women in his life talking about that. There's his wife talking about what it felt like to have all this competition, in a way.

And then, there's also the key to him, I suppose, is the fact that he's mixed race. His father was white, and his father was much older than his mother. His mother was like 16 or 17 and he was in his early 60s and they had this brief relationship, and out of that came Bob.

And he always felt that he wasn't accepted because he was not accepted by black people in Jamaica or by white people. And that sense of wanting to belong and wanting to prove something, I think, is the thing that is his -- the key to understanding him as an artist and as a man.

FOSTER: It was also the key to his making, wasn't it? Because he appealed to everyone.

MACDONALD: That's exactly it. He appealed to everyone, and he deliberately set out to sort of go across racial boundaries, which again, bringing us back to the Save the Children film and that whole appeal is why he's so appropriate to this.

It's saying, people in Africa are your brothers. They're your friends, as well. They're not just another, they're not just, you know, in a foreign country you can forget.

(END VIDEOTAPE)

FOSTER: Kevin MacDonald. Coming up on CONNECT THE WORLD, pulling the interview plug. Sometimes the heat is just too much for celebrities and politicians, but there's an art to walking off. We'll explore that next, so don't go anywhere.

(COMMERCIAL BREAK)

FOSTER: Middle-aged men singing and dancing in tight, colorful pants. A soldier's emotional reunion with his huge dog, and an A-list actress who gets loud and rowdy, all part of this week's viral videos, of course, presented by our very own Phil Han.

(BEGIN VIDEOTAPE)

PHIL HAN, CNN DIGITAL PRODUCER: Welcome to another edition of Week on the Web. This is the place where we want to bring you up to date with everything across social media over the last seven days.

First up, though, this video was one of the most popular, and it includes Anne Hathaway doing something you might not expect.

ANNE HATHAWAY, ACTRESS (rapping): Yo, I'm a paparazzi, I don't play no Yahtzee, I go pop-pop-pop-pop-pop-pop, my camera's up your crotch, see - -

HAN (voice-over): The Academy Award-nominated actress appeared on Conan O'Brien's show and spoke -- or should I say, rapped -- about the number of paparazzi that have invaded the set of "The Dark Knight Rises."

HATHAWAY (rapping): Don't act so hotsy-totsy, (EXPLETIVE DELETED), I know that you from Jersey, pop-pop-pop-pop-pop-pop --

HAN: Hathaway played Cat Woman in the Batman sequel, which is out in the summer of 2012.

HATHAWAY (rapping): You love to feel my pop!

(CROWD CHEERS)

HAN: Fans have uploaded dozens of clips online of behind-the-scenes filming, from the Batmobile to Batman's new Bat Wing.

(MUSIC - "GEE," BY GIRLS' GENERATION)

HAN: No, you're not looking at the latest boy band out of Asia. This is a parody of the popular Korean group Girls' Generation, performing their hit song, "Gee."

Now, I'm not sure if this group of 40-something men think they have a future in the music business, but this YouTube video had more than a million hits in just three days.

WHITNEY CROWDER, AIRMAN'S WIFE: I think he knows.

HAN: Many of us know the strong bond between a dog and their owner, but how long can it last?

CROWDER: Sit.

HAN: Well, this is the greeting one dog gave his soldier owner after being away on duty for nine months.

TREVOR CROWDER, SENIOR AIRMAN, U.S. AIR FORCE: Emmitt? Do you not recognize me?

(LAUGHTER)

WHITNEY CROWDER: Oh!

HAN: Now, this isn't something you see in New York City every day. This footage shows a runaway bull on the loose on Liberty Avenue in Queens.

(CAR TIRES SCREECHING)

HAN: You probably don't want to try this at home. The AC Cobra did spin after spin and, remarkably, other than the floor, there wasn't one mark in the house.

(MUSIC - "YOU AND I" BY LADY GAGA)

HAN: And the number one music video from the past week is Lady Gaga's latest song, "You and I."

That video has nearly five million views.

I'm Phil Han, CNN, London.

(END VIDEOTAPE)

FOSTER: You don't even need to go on the internet. Phil just brought you up to date on everything.

Now, you may have read about it online or even seen it right here on CNN. Former U.S. Senate candidate Christine O'Donnell walking off the set of "Piers Morgan Tonight."

She quit the interview when Piers asked her for her views on gay marriage, an issue she has previously spoken about.

In tonight's Parting Shots, Jeanne Moos asks if you're going to walk - - if you're going to talk, rather, talk the talk. Make sure you also know how to walk the walk.

(BEGIN VIDEOTAPE)

JEANNE MOOS, CNN CORRESPONDENT (voice-over): Who doesn't love a walk out? Sometimes it makes great TV when host and guest disagree.

PIERS MORGAN, HOST, CNN'S "PIERS MORGAN TONIGHT": Why are you being so weird about this?

CHRISTINE O'DONNELL, FORMER U.S. SENATORIAL CANDIDATE: I'm not being weird, you're being a little rude.

MOOS: But if you're going to walk out of an interview, here's how not to. Do not have your PR person intentionally block the camera.

MORGAN: Where are you going?

MOOS: And if you're going, go, don't linger.

O'DONNELL: All right, are we off?

CARRIE PREJEAN, MISS CALIFORNIA, 2009: Larry, you're being inappropriate.

LARRY KING, HOST, "LARRY KING LIVE": What?

PREJEAN: I'm not going to talk about --

KING: I'm asking a question.

MOOS (on camera): If you're serious about walking off, we recommend you don't keep looking off the side at your PR people.

(voice-over): It sort of dilutes the defiant act of walking off if you're looking for advice from the sidelines.

KING: Who are you talking to?

DAN HARRIS, ABC NEWS CORRESPONDENT: Do you ever worry about your moment having passed?

(PARIS HILTON SCOFFS)

UNIDENTIFIED FEMALE (OFF MIKE): Can I -- I was curious about one thing --

MOOS: Do not do as Naomi Campbell did. Do not whack the camera.

Do not overturn furniture just because the host called then quarterback Jim Everett a girl's name, Chris Everett.

(FURNITURE CRASHING)

MOOS: And do not drop a string of F-bombs as comedian Andrew Dice Clay did.

ANDREW DICE CLAY, COMEDIAN: A guy wants to open his (EXPLETIVE DELETED) mouth --

(CROSSTALK)

UNIDENTIFIED MALE: All right, Andrew --

CLAY: He was doing a little (EXPLETIVE DELETED) --

UNIDENTIFIED MALE: Thank you very much, we thought that you could --

CLAY: You know, it don't (EXPLETIVE DELETED), so you know what? (EXPLETIVE DELETED) the whole (EXPLETIVE DELETED) network.

MOOS: If you must cuss --

ROBERT NOVAK, JOURNALIST: I think that's bull (EXPLETIVE DELETED).

MOOS: Try to confine yourself to a single expletive bleeped. Remember, TV producers love walk-outs. Your walk-out is likely to end up as a promo.

SARAH FERGUSON, DUCHESS OF YORK: Sorry? What's the question?

UNIDENTIFIED MALE: It's the weirdest interview you'll ever see.

FERGUSON: Delete that.

UNIDENTIFIED MALE: What sent Fergie completely off the rails?

MOOS: If you want to see an expert walk-out, check out the young Donald Trump --

DONALD TRUMP, CHAIRMAN AND PRESIDENT, THE TRUMP ORGANIZATION: Do this interview with somebody else. You don't need this. Do it with somebody else.

MOOS: KISS front man Gene Simmons was being interviewed with his significant other of 28 years when Joy Behar brought up his claim that he slept with 5,000 women.

GENE SIMMONS, KISS: My back is good. My schmekel not so much.

SHANNON TWEED, SIMMONS' GIRLFRIEND: That's very nice of you to joke about it.

SIMMONS: It's a joke.

TWEED: (EXPLETIVE DELETED) off.

SIMMONS: Where are you going? Thanks for the question.

MOOS: His companion headed off toward the New York skyline.

MOOS (on camera): What she didn't know was that the only way out of here is through this fake garden wall.

MOOS (voice-over): So, momentarily corralled, she paced.

SIMMONS: Please come back here.

TWEED: You know what? No. You joke about it, and it's not funny.

JOY BEHAR, HOST, HLN'S "THE JOY BEHAR SHOW": Shannon, you want to come back?

TWEED: I don't really.

BEHAR: She doesn't.

MOOS: Before your walk-out, make sure there's someplace to walk to.

Jeanne Moos, CNN.

SIMMONS: Shannon, come back!

MOOS: New York.

(END VIDEOTAPE)

FOSTER: Invaluable advice from Jeanne for all future guests.

I'm Max Foster, thank you so much for watching. The world headlines and "BackStory" follow this short break.

(COMMERCIAL BREAK)

END