Return to Transcripts main page


Shockwaves from Greece Resonating Across Europe; Facebook Sets IPO Price At $38; Spain's Bond Yields Raise 1.5%

Aired May 17, 2012 - 16:00   ET


JONATHAN MANN, HOST: Tonight on Connect the World, shockwaves from Greece resonating across an entire continent. I'm Jonathan Mann at CNN Center.

And fears grow for Spain's banks.

BECKY ANDERSON, CNN INTERNATIONAL CORRESPONDENT: And I'm Becky Anderson in Breschia in Italy until recently Europe's fourth largest economy now deep in recession and on the brink to getting swept up in this crisis.

MANN: Also ahead on the program, status update: Facebook prepares for one of the biggest stock market debuts in history.

And on its way to London, the Olympic flame handed over, the ceremony in Athens.

Thanks for joining us. A month from today, Greeks head back to the polls. Their decision could have far reaching consequences not just for Greece, but for the entire globe with anti-austerity parties taking a Lion's share of the vote in the recent election there are fears that further support of the polls could seal Greece's exit from the EuroZone. What that would mean for the world's finances is not yet known.

In Athens, a caretaker cabinet got down to business. The help of the country's banks likely behind its agenda after Greek savers withdrew billions of euros in the last few days. And now there are reports that the problem is spreading.

In a moment we'll speak live to Al Goodman in the Spanish capital Madrid where the government has been forced to deny rumors on a run of one of its banks. And Becky is in Italy, a country which could find itself swept up in the panic if Greece is forced to leave.

First to Al in Spain. Al, a bank that really none of us had ever heard of suddenly seems like the epicenter of all of the anxieties in Europe. A lot of Spanish people, Spanish depositors taking the scare seriously. How did this start?

AL GOODMAN, CNN CORRESPONDENT: Hi, Jonathan. Well, this is one of Spain's largest banks, but it doesn't have much of an international presence. It was formed less than two years ago by seven regional savings banks. And it got heavily involved in real estate loans. And that's what got this bank and every bank in Spain into trouble, because the big real estate boom went bust. This bank, Bankia, is left with about 20 percent, this one bank, of all the bad real estate loans in the country.

So last week, the government intervened, took control of this bank, but that didn't calm things down. This Thursday, here in Madrid, a media report said that there was a bank run on the deposit and the jitters, the stock continues to plummet on this bank. So finally an economy ministry official comes out and says there's nothing to worry about. The bank puts out a statement, there is nothing to worry about. And that's where we are right now. There is something to worry about, that's what a lot of people think -- Jonathan.

MANN: Obviously hinges on the credibility of the government. Well, the government was selling bonds today, closely watched auction. How did that go?

GOODMAN: Well, actually not very well from the key standpoint. The government is able to sell its bonds and its treasury notes, but it's having to pay a higher interest rate to nervous investors to get them to take the risk. So today, Thursday, more than $3 billion in bonds, three and four year bonds were sold, but at interest rates a point and a half higher than a similar sale just a month ago. And that's the issue for economists and even for the government here is they're going to have to pay back all of this interest. They're in a recession, staggering high unemployment. Where are they going to have the money to do what they need to do if they're putting it all into interest rates to pay back these loans -- Jonathan?

MANN: Al Goodman in Madrid, thanks very much.

As Al mentioned, Spain has already seen its costs of borrowing rise. And it's not the only country at risk if Greece suffers a messy exit from the EuroZone.

Have a look. We have a map that shows the current 10-year sovereign bond yields across the region. Greece is shown here in red, but look at the two countries in orange, Portugal and Ireland. Now both countries have made progress since accepting bailouts. Their yields, or interest rates if you like, remain stubbornly above 7 percent. That's an important number. That's generally seen at the point at which borrowing becomes unsustainable.

Even more worrying are the countries in yellow which include Spain and Italy, two of the EuroZone's biggest economies. While both remain below that 7 percent threshold, it wouldn't take much to send them over.

Becky is in the Italian city of Brescia and joins us once again.

Now Becky, we're not used to seeing you in that part of the world, but does how does the EuroZone worry, well all of us, look from that part of Europe?

ANDERSON: Yeah. Well, things are tough and that is an understatement here.

Let me just give you a sense of how tough. This is a country deep in recession. In fact, it's the fourth recession for Italy since it adopted the euro about a decade or so ago. And one of the reasons that things are tough here are the swinging austerity cuts implemented by the technocrat government led by Prime Minister Mario Monti. You'll remember that he took over from Silvio Berlusconi at the end of last year, some $26 billion in cuts. And those are really, really hurting Italians.

You've got an unemployment rate at a 12 year high at around 10 percent. Youth unemployment at some 25 percent, and consumer confidence is at an all-time low here.

Now when you think of Italy, John, you think of fashion, don't you? And interestingly enough, at the high end of the fashion industry here is actually holding up, but it's the mid-sized companies all over Italy that are being hit by what's going on here at present.

I spoke to a fashion manufacturer when I was in Milan just about 24 hours ago and this is what he told me about how things are for companies like his. Have a listen for this.


PAOLO BASTIANELLO, ITALIAN CLOTHING RETAILER (through translator): We feel very tired and sometimes very depressed because two years ago some very crucial decisions should have been taken by the government, but they looked in a different direction. Also, Europe is taking too much time to make decisions. Greece is an example of what happens when decisions have delayed, it becomes too late. We are trying to (inaudible), but it is getting hard.


ANDERSON: All right. Well, no real surprise then, but here as we're seeing elsewhere is a wave of sort of a discontent and the rise of parties that you may not recognize as mainstream political parties. I was at a rally last night in a northern suburb of Milan, organized by a grassroots movement known as the five star movement. And that's lead by a guy called Beppe Grillo, not your average politician.

This is a guy who for some 30 years as a comedian has been using political satire to really poke fun at mainstream politicians here in Italy. And he is really riding a wave of popular support. People were telling me at the rally that they are absolutely fed up with politicians who are out of touch with people here in Italy.

Watch this guy. Tomorrow night we'll be in Rome. And I have a full interview with Beppe Grillo. He's a fascinating guy. Keep his name in mind, because he's somebody on the rise. Not I will say as radical or as extreme as some of the parties that we're seeing on the rise in places like Greece and Hungary or even the National Front in France, but an interesting guy. And really sort of giving a sense when you see the support for him just where this country is going.

In Rome today earlier we got a sense of how people there feel about the potential for contagion of this Europe-wide crisis, particularly out of Greece. This is what people told us.


UNIDENTIFIED FEMALE (through translator): I have heard that going beyond Greece, other countries would fall like a domino effect.

UNIDENTIFIED MALE (through translator): For sure there will be a chain reaction, a domino effect that will have an unavoidable impact in Italy. So the situation in the near future is absolutely very worrying.

UNIDENTIFIED MALE (through translator): If Greece leaves, other nations of the say way could also leave and there would no longer be, I believe, the concept of the European community and the European common market.


ANDERSON: Well, joining us now is a senator here in Italy, Mario Baldassarri. He is the head of the finance committee here in Italy. And he's former deputy finance minister in the government of Silvio Berlusconi. So thank you for joining us.

Some will criticize you and your former boss, Silvio Berlusconi, for being profligate in the years leading up to this crisis. And we'll say you guys did Italy no good at all. What do you say to those who criticize the Berlusconi administration?

MARIO BALDASSARRI, ITALIAN SENATOR: Well first of all, I never had the boss, I have also my ideas. 10 years ago, five years ago, two years ago and tonight. So my idea is that what we have to clean up what is the problem about. There is a small country in Europe, which is Greece, 11 million inhabitants, over 320 million people in the European EuroZone. So it's like during the crisis in a counsel and asking to trade with the dollars, with the (inaudible), with the United States of America.

So the key point, the political point is that we don't have yet the United States of Europe. But we need to behave as we would have a United States of Europe.

So two years ago to face the Greek crisis would cost $40 billion to the European Union. Now, after two years of mistakes it will cost $150 billion euro and it might be that Greece will have to get out of Europe.

So the point is -- the point is this, what is the political decision that Europe -- yeah.

ANDERSON: Yeah. Two questions to you at this stage. Let's get specific about Italy here. Mario Monti certainly suggesting now beginning to suggest that we need to be less of austerity and more growth. Do you agree?

BALDASSARRI: Yeah. But the point is that Italy is in a very different situation, much more solid. The key point for Italy is that we did the adjustment in terms of balancing the budget, but the way we did, which is increasing taxes and not cutting (inaudible). It's not lasting too long.

So now Italy face a domestic problem, how to cut government accounts according to country expenditure, how to cut taxes, how to give support to growth, because there is no balance in the budget target if you don't have enough growth. If the Greece proves that you can never have...

ANDERSON: One question very briefly, sir. Let me ask you this can you conceive of Italy leaving the euro at any point in the near future?

BALDASSARRI: There is no way out of Europe. There is no way out of Europe for Greece, for Italy, for Spain, mainly for Germany. You know, this is a political question that Europe needs to have some kind of a new political union making the decision as a union, not taking the decisions out of the bilateral. We can not ask the Greeks to adjust in six months the disaster they did over the last 10 years.

ANDERSON: And we're going to have to leave it there, sir, because I know we have some breaking news. We do appreciate your time and your thoughts this evening. The senator here in Italy.

John, back to you.

MANN: Becky, it's the number they've been waiting to see on Wall Street. Breaking news this hour from Facebook on the eve of one of the biggest stock market debuts in history, the social networking giant has just revealed its share price.

Let's got to Felicia Taylor at CNN New York. The anticipation has been enormous. Give us the number.

FELICIA TAYLOR, CNN CORRESPONDENT: $38 a share, that is the magic price that Facebook has assigned to its initial public offering which will begin trading on the NASDAQ exchange at 9:30 Eastern time tomorrow Friday May 18. Now this has been, as you said, in great anticipation all day. We didn't know when it was going to happen after the opening bell, but we knew at some point. And literally it happened within minutes.

Now what this does it values a company at $104 billion. It will raise approximately $18 billion for the company and marks it as the second largest IPO in U.S. history behind Visa.

Now this is at the upper range of -- a range which had been increased just recently to $34 to $38 a share. It was going to be somewhere between $25 and $34 a share.

What'll be interesting, though, is how much higher that stock goes at the open tomorrow. Traditionally with these kind of tech offerings, they can even double. We saw that happen with LinkedIn. Often times it will trade somewhere between a 10 to 20 percent rise. That would be normal. What you don't want to see is that the stock was either too severely under- priced or too severely over-priced, because that clearly would punish either the buyer or seller on the initial public offering as of tomorrow.

But again $38 dollars a share is the magic price that Facebook has given to its initial public offering. And I'm glad I didn't have to wait until 8:00 tonight to find out.

MANN: That's a whole new chapter in one of the most amazing stories in American business. Felicia Taylor will have more on this coming up.

Also still to come tonight, a surprising development in the war crimes trial of Ratko Mladic. We'll see why Bosnians waiting for justice will have to wait even longer.

Then, fans mourn the death of the queen of disco, Donna Summer.


MANN: Welcome back. You're watching CNN. This is Connect the World and I'm Jonathan Mann. More on Facebook's breaking news which we've been telling you about. The social networking giant has set its share price. We know now it is $38 dollars. That's in fact the very high end of the range we were lead to expect. And it means the company would be valued at about $104 billion. We'll bring you team coverage in about 10 minutes time.

Here's a look now at some other stories connecting our world tonight.

Judges at The Hague have suspended the war crimes trial of Ratko Mladic just a day after it began. Attorneys for the former Bosnian-Serb general requested the delay. They say prosecutors violated court rules by concealing evidence. It could be weeks even months before the trial resumes. Mladic drew gasps from the courtroom today by smiling and giving a thumbs up when prosecutors described his alleged crimes during the 1990s Bosnian wars, including the massacre at Srebrenica.

Blind Chinese activists Chen Guangcheng says China has agreed to issue him a passport in just the next 15 days, the first indication of China of when he might be allowed to move to the United State. Chen, you'll recall, was at the center of a diplomatic row between Washington and Beijing last month when he sought refuge in the U.S. embassy after escaping from House arrest.

A huge shake-up in the ranks of Syria's largest opposition group. Burhan Ghalioun says he's resigning as the head of the Syrian National Council. The coalition has been rocked by in-fighting for months. And just hours before Ghalioun's announcement, a network of activists had threatened to leave the coalition accusing him of monopolizing power. Ghalioun says he'll step down as soon as a new leaders is chosen.

Today disco legends Donna Summer lost her battle with lung cancer.


MANN: Dubbed the queen of disco, the Grammy winning singer had a string of hits in both the 70s and 80s, including this "I Feel Love," "Last Dance," "And She Works Hard For The Money." Her family describes her as a woman of many gifts. Donna Summer was 63.

We're going to take a short break now, but when we come back now, but when we come back will this man be seeing red in the coming days? We'll talk about potential candidates to manage Liverpool. You're watching Connect the World.


MANN: You're watching Connect the World live from the CNN Center. Welcome back. I'm Jonathan Mann.

Have a look at the scene in Athens Thursday as the Olympic flame was officially handed over to representatives from London. The games will start, of course, in the English capital, July 27. But as Princess Anne, Mayor Boris Johnson, and David Beckham were taking the symbolic flame onto the next leg of its journey, an Olympic row was ignited in Israel. Don Riddell is here with more on that.

This is a matter of symbolism, but really profound emotion and the Olympics are mixed up in it inextricably.

DON RIDDELL, CNN SPORTS CORRESPONDNET: Absolutely, Jonathan. The London Games this summer will mark the 40th anniversary of the dreadful Munich massacre where 11 Israeli athletes were killed almost 40 years ago. And the Israeli government, in fact the deputy foreign minister, had written to the International Olympic Committee saying, look, we'd really like a minute silence to commemorate our lost athletes in London. And the IOC refused them.

It's interesting, actually, because Jacques Rogge, the head of the IOC actually was an athlete in Munich 40 years ago. I actually talked to him earlier this year about how it felt for him to be there and he admitted that it was very emotional, but they decided that the games would carry on.

Now Rogge has said in his response to the Israeli government that whilst they're not going to allow this to happen, they do frequently commemorate these lost athletes, but that hasn't cut very well with the Israeli government and their families of these Israeli athletes say they're going to continue their campaign, because they really want this minute of silence to happen in London.

MANN: OK. Well, I don't want to pass over the importance of that kind of event, but the sports world is talking about something else centered on Liverpool today. They're trying to fill a job.

RIDDELL: That's right. Yesterday was all that, Kenny Dalglish who was fired by Liverpool's American owners. Today it's all about who his successor is going to be. Every time a high profile job comes up there's always a dozen names thrown into the hat. It would appears that Wigan's manager, Roberto Martinez, is in poll position at the moment. His current chairman, the Wigan chairman Dave Whelan said that Martinez has been approached. Whelan says that Martinez will be interviewed by Fenway Sports Group within the coming days.

He's a really young, dynamic manager. He's only 38-years-old. He's done great things with Wigan, which is a small club in the Premier League. In fact, they ended the season with seven wins out of nine games, beating Arsenal, Manchester United, and Newcastle and Liverpool in that run. So it may well be that he inadvertently helped shoo Dalglish out the door and he could well be succeeding him at Anfield.

MANN: OK. One more thing to talk about, it's not gold per se, it's gold clubs, an amazing story about the clubs themselves.

RIDDELL: Yeah, this is a great story. Brandt Snedeker is an American golfer heading to the world matchplay championship in Spain. His plane was forced to make an emergency landing, because one of the passengers had a heart attack. In the shuffle, his luggage was lost, that meant his golf clubs were lost. So it meant that when he teed off against Thomas Bjorn earlier today, he had to cobble together a random assortment of clubs.

He got a few irons from various places. He got a putter from the pro shop. One of his -- rivals, John Sanford (ph) the Australian lent him a driver. And he started playing really, really well with them. Meanwhile, his clubs arrived at Malaga Airport and they were being driven to the golf course. They were reunited at the fourth hole by which point Snedeker was playing so well he said, you know what, I don't really want my clubs. In fact, he wasn't even allowed to swap them anyway, because he had already started his round. And he said I'm playing so well with these clubs I'm going to carry on.

He won five and four, which is a pretty convincing win. The match play and he said he likes that driver so much that he's not going to give it back to John Sanford (ph), he's going to keep it for himself.

MANN: Keep the club.

You know, don't mess with a winning thing. Don Riddell, thanks very much.

Still to come on Connect the World, the big reveal: on the eve of its market debut, Facebook finally announces the share price. We'll look at how the buy-in and whether it's worth it.

Then, alone and far from home: how Afghan teenagers end up living on the streets of Paris.

And then, born in the USA. New data shows just how diverse a nation America has become.


MANN: Hello. Welcome to our viewers across Europe and around the world. I'm Jonathan Mann and these are the latest world headlines from CNN.

Greece has installed a caretaker government to run the country until new elections are held in June. The last nationwide vote put a deeply polarized range of parties into parliament and they were unable to put together a ruling coalition.

The Spanish government has been forced to deny a rumor on a run of one of the country's banks. Shares in Bankia fell after a newspaper reported that savers had withdrawn more than $1 billion euros over just the past week.

We're following breaking news this hour from Facebook. The social networking giant's final IPO price before it starts trading tomorrow. Shares are set at $38 each, that's a very high end of the range, and it means the company would be valued at about $104 billion.

Investors have been waiting all day for the price. Felicia Taylor has more live from New York. And Felicia, just a few days ago, even Facebook wasn't talking about a number that high.

FELICIA TAYLOR, CNN INTERNATIONAL CORRESPONDENT: Well, that's absolutely right. They increased the allocation range from $34 to $38 a share. As you mentioned, this is at the higher end of that range, now, at $38 a share.

It values the company, as you said, at over $100 billion, and now makes it the third largest IPO in US history behind Visa and General Motors. So, this is clearly one of the most exciting IPOs that the Street has ever seen.

It is anticipated to open tomorrow on the NASDAQ exchange at 9:30. But don't be surprised if that could be delayed, because literally, all the allocations, all the orders that have been put into place for these 421 million shares that are being offered now have to literally be processed through the system, and that could take some time.

So, while this is certainly going to be an exciting Friday, I'm going to call it a Facebook Friday on the exchanges, don't be surprised if it opens a little bit delayed.

But what's interesting is to see what's going to happen throughout the trading day. Oftentimes, a tech IPO can open up even higher than what the price range has been, what this upper end has been. According to the SEC, it can't really trade much more than $41, $41 a share. But however, when we saw Linkedin offered, it went from about $41 to well over $80.

Now, what's the problem with that? It sounds like that's a good thing if the stock literally doubles. But what it means is that the underwriters, Morgan Stanley, JPMorgan Chase, Goldman Sachs, didn't price the allocation correctly.

So, if you happen to get in at $38 a share and sell it for, let's pick a random number, $50 or $60, that's great. But for those people that are getting in at that $50, $60 mark, it's not great. That means that the price was inaccurate. So therefore, their potential gain or for increased profits reduces even that much more so.

Nevertheless, $38 a share is the magic price for Facebook stock to begin trading on the NASDAQ on Facebook Friday. Jon?

MANN: Felicia, help me with something really basic. They're putting a company worth $100 billion on a market in less than 12 hours and they didn't know the price? In fact, they added more shares? It seems so improvised. It's hard to believe that's a good way to run a company. Is this normally the way it's done?

TAYLOR: Absolutely. What they've been doing is over the last few weeks, a month or so, they've been on what they call a roadshow. And what happens is they determine how much demand there is.

No surprise that there's great demand for Facebook. Obviously, there was going to be plenty of buyers of this stock.

And what happens, though, is that they determine the price based on demand, based on the number of shares that they're offering. So, there's an X number of shares out there. They've decided to increase that offering by 25 percent to now $421 million a share (sic).

Let's put it this way. If you were an original holder of the stock and I as an underwriter came to you and said, listen, we can offer these shares at $34 a share, but if we increase the offering out of that big kitty that we've got for $38 a share, you're going to be more likely to obviously take that $38 a share, right? It only makes sense.

So, this process takes time. They have to allocate and figure out what the correct price is. Like I said, pricing an IPO is key to the success of the stock moving forward.

And of course, they also have to decide how much demand there really is. Once that IPO is offered, how much more demand? How many other people are going to step into the marketplace and be able to step into the marketplace? This takes time to process all that sort of thing.

What they did by announcing right at the closing bell at 4:00 on Thursday's trade is waste no time. Normally what would happen, as opposed to closing any of the allocations, which happened at 4:00 PM Eastern Time on Wednesday, that should have happened today or normally happens the day before an IPO comes.

But they took another 24 hours to price this stock, which lets people know that they're very serious. This isn't just some guy running a tech company. This is -- he's doing it the right way, he's doing it according to Wall Street, and he's wasted absolutely no time in issuing these shares. Jon?

MANN: And starting Friday morning, the market will decide. Felicia Taylor.

TAYLOR: Absolutely.

MANN: Thanks very much. Facebook may be making friends with Wall Street in a big, hundred billion-dollar kind of way, but is it still hot property among the cyber set? We went to London's trendy Carnaby Street earlier today to hear what some Facebook users actually think, and here's what they told us.


UNIDENTIFIED MALE: Almost everyone uses it. If you have a computer and you don't have Facebook, you're left out.

UNIDENTIFIED FEMALE: I do it every day, so it's definitely a part of my life. It's definitely an integral part of communicating with other people. So, yes.

UNIDENTIFIED MALE: Probably less important than for most people. A lot of my friends use it a lot more than I do.

UNIDENTIFIED FEMALE: I'm more into Twitter now, anyway.

UNIDENTIFIED MALE: Facebook is the most valuable company that I can think of right now. Well, social media organization. I'll buy shares.

UNIDENTIFIED FEMALE: It's a very expensive company for not a lot of visible assets.

UNIDENTIFIED MALE: It's probably reached saturation point, now, I'd say. Because it was bought for billions and is worth billions. I can see it getting any more profitable.

UNIDENTIFIED MALE: It's not necessarily a company I'd trust, with the privacy issues and everything.

UNIDENTIFIED MALE: I see it at least being prominent for the next five years, and I don't know what the next step is. Maybe holograms through Skype. I don't know.



MANN: Well, a lot of you may be wondering how to buy Facebook stock. CNN's Chief Business Correspondent Ali Velshi walks us through the process and the potential pitfalls we should be very obvious about buying the shares.


ALI VELSHI, CNN CHIEF BUSINESS CORRESPONDENT (voice-over): Don't worry about the IPO. For your purposes, Facebook shares start trading on the NASDAQ on day one.

MATT MCCALL, PENN FINANCIAL GROUP: There's probably going to be a frenzy of many individual investors out there buying whether it's 5 shares, 20 shares --

VELSHI (on camera): Yes.

MCCALL: -- 100 shares, through their online account paying $9 to do that. So, yes, that's going to be the first day. Everybody out here watching can sit in front of the computer --


MCCALL: -- and be an owner of Facebook.

VELSHI (voice-over): Still interested? First thing you need is a brokerage account.

VELSHI (on camera): Once you decide you want to buy the stock, it's easy, as long as you live in a country that allows you to trade US stocks, you just go to the site of an online broker. I happen to use TD Ameritrade, but they all work the same way. You click on trade, stocks and ETFs, buy -- let's say 50 shares of Facebook. FB is the ticker.

I want it to be a market order, which means it doesn't matter what the price is, I want 50 shares. I review my order, and if it all looks right, I just click on this, place the order. Then I'm an owner of Facebook stock.

VELSHI (voice-over): Now, the only good reason for you to buy Facebook stock, or any stock for that matter, is that one day you'll sell it for more than you paid for it.

ROBERT PECK, PRESIDENT, CORISE: I think you'll be getting a very strong return there when you compare that to any other returns you had out there.

VELSHI: Robert Peck specializes in internet and tech stocks. He says don't worry so much about day one, week one, or month one. He believes Facebook could double in three years time, based on the fundamentals of its growth prospects.

PECK: That's one of the reasons when, if you're holding the stock for the longer term, I let the near-term gyrations settle in, let the supply/demand curve settle out. And then, if you get an opportunity to buy with the idea of holding for the longer term, I think you can get a good compound annual return on your money.

VELSHI: I know you. All you just heard Peck say is that it could double, and you probably ignored the part about gyrations. Groupon and Zynga are examples of recent IPOs where prices surged initially before settling below the IPO price.

The stock could be volatile, and if you're a newbie, consider placing a limit order for the stock, meaning you'll pay up to a certain amount for it and no more, like an auction bid. With a limit order, maybe you'll get the stock, maybe you won't.

Either way, you might already be investing in Facebook without even knowing it. Many retirement accounts which invest in broad-based growth or technology stocks may be early buyers of Facebook. And unlike you, the managers of those funds will get in at the IPO price.

PECK: We think that's a great thing, because we think they'll get exposure to the stock at a lower price than where they could probably get it on the first tick of when it starts trading. So, we'll give them exposure to it at wherever the IPO price settles at.

VELSHI (on camera): If you're not into all that risk but you like Facebook and it's a momentous occasion, you want to be part of it, you know what you can do? You can buy one certificate of the stock.

You can buy it online, you don't have to open a trading account, you don't have to take any risk. You buy it, you frame it, you put it on your wall. There is something in this for everyone.

Ali Velshi, CNN, New York.


MANN: Still to come, a heart-wrenching story about children who trade one hardship for another. They leave a war zone for the promise of a better life but end up homeless among strangers.


MANN: Welcome back, I'm Jonathan Mann, you're watching CONNECT THE WORLD, and we're going to tell you now about the world that some youngsters are facing, a world they never chose. They traveled thousands of kilometers dreaming of a better life but instead found a bitter reality.

The children were from Afghanistan, and they took desperate steps to escape it, to get away from war and poverty, their families sending them to France for work. But all too often, they end up hungry and homeless. Dan Rivers explains why.


DAN RIVERS, CNN SENIOR INTERNATIONAL CORRESPONDENT (voice-over): He's just 14 years old, alone, and far from home. Like all these teenagers queuing up for a bed for the night in Paris, they've all risked their lives to escape poverty. Most are from Afghanistan.

Almost all these children were smuggled to France by people traffickers. Their families paid thousands of dollars, hoping for a better life for them in the West, but this is the reality. A grim wait for a bed, hoping charity worker Venus Colin will pick them so they don't have to sleep on the streets again.


RIVERS (on camera): Yes.

COLIN: Isn't it for you?

RIVERS: Yes, right.

COLIN: It is for me every night, to see that people, that families are ready to send their children so young so they can have a better life, because there they don't have no hope.

RIVERS: The staff now have to make a really difficult choice. There are 45 children here, but there's only space inside for 25, so 20 of them are going to sleep out on the streets in this appalling weather.

RIVERS (voice-over): Venus picks the youngest. The rest are left on the street.

Mohammed is typical. Orphaned by war and disease, he shows me the park where he lived for months after arriving in Paris. A relative paid $4,000 to smugglers to give him a better life, yet this park became his home.

MOHAMMED, HOMELESS TEEN: That time is a difficult time for me in my life.

RIVERS: But now, Mohammed has got help. He shows me the reception center run by a charity, France Terre D'asile. It gives children like him a safe place to hang out, watch films, socialize, and play, often something totally lacking in their tough upbringing in Afghanistan.

MOHAMMED: We have in Afghanistan just war. Not other --

RIVERS (on camera): Just fighting.

MOHAMMED: Yes, just fighting.

RIVERS (voice-over): Mohammed shows me his home on a map. He traveled more than 6,000 kilometers, risking frostbite and border patrols as he climbed mountains to cross Iran and Turkey.

RIVERS (on camera): And how long did it take you to get to France? How many months?

MOHAMMED: Nine months.

RIVERS: Nine months?


RIVERS: And you traveled --


RIVERS: -- in a car?

MOHAMMED: Afghanistan, Pakistan, Iran, Turkey, Greece, Italy, France.

RIVERS: So, a long, long way?

MOHAMMED: It's a long, long way, but it is dangerous for everyone.

RIVERS (voice-over): Aid worker Beatrice Allan says the boys are told by smugglers there'll be jobs waiting for them in France. She recently had to explain to one teenager that's not allowed.

BEATRICE ALLAN, FRANCE TERRE D'ASILE: Having to explain to a 14-year- old that it's illegal for him to work here was exceptionally distressful for him, and he didn't even want to get in touch with his family back home, because he didn't know how to say it to them.

RIVERS: These boys must prove they're under 18. Without papers, that's often impossible, meaning their best hope is getting into a charity hostel like this. When it's full, they sleep on the street. Their dream of a better life in the West remains just that.

Dan Rivers, CNN, Paris.


MANN: You're watching CONNECT THE WORLD. When we come back, young American. We take a look at the changing face of the United States and ask what it means for the future.


MANN: Welcome back. You're watching CONNECT THE WORLD, and here's a way the world is changing. New numbers show that minorities are becoming the majority in the United States. Census data released today reveal over 50 percent of children under the age of one are minorities, defined as anyone other than non-Hispanic whites. Tom Foreman breaks down the latest stats.


TOM FOREMAN, CNN CORRESPONDENT: Statistically, this looks like a little bitty change, but it's a huge one in terms of society here and how people react to it. This is where we were back in 2010. The minority population in the country in terms of people under one year old, babies, basically, was just under 50 percent, and now it's just over 50 percent.

How has this happened? Well, there have been two things. First of all, massive Mexican immigration for 30 years into this country, not just from Mexico, other places. But the Mexican population has led the charge for 30 years, huge population influx.

Plus, higher per-family birthrates among the people who came here. Now, the immigration part has actually stopped pretty much, but this has continued. This is the primary driver of that big push, particularly in the Latino population, which is driving that growth in the minority groups here.

Why does that matter? Look at the overall numbers. Whites are still about two thirds of the country, about 197 million, Hispanics about 52 million, blacks about 44 million, Asians about 18 million, 8 million or so others. You may notice those numbers don't add up exactly to 311 million, the overall population. That's because people can claim more than one category. But still, massive advantage to the white population here in terms of overall dominance of the culture.

So, why does that birthrate matter? Because of this. Median age. The median age for the white population is now over 40, largely beyond childbearing years for most people. The median age for the Hispanic population, 27.6, still deeply in the childbearing years.

That suggests that even though we're just beginning to see the tip of this change right now, at least over the next few years, you still could see a lot of minority families producing a lot of young children, and that number could keep moving up with all sorts of impacts on education, health care, and politics and the economy.


MANN: Tom Foreman. The new data show that most young Americans will be much more accustomed to diversity than, say, their grandparents were. Joining us now to talk about the transition is Mark Mather, associate vice president of the Population Reference Bureau. Thanks so much for being with us.

Let me ask you, when you look at the politics of this, the economics of it, the consequences of it, are we going to see Kansas looking like Los Angeles soon?

MARK MATHER, ASSOCIATE VICE PRESIDENT, POPULATION REFERENCE BUREAU: Well, it's certainly true that we're seeing minority growth all across the country. I don't know that Kansas is going to look like LA anytime soon, but we're seeing this diversification occurring mainly in the child population, but it's going to move up through the age distribution, and soon we'll see the labor force see major transformations, as well.

MANN: How is that going to change life in the United States or the United States that visitors see when they come here?

MATHER: Well, we're becoming a much more -- obviously a much more multicultural society, and I think even the census categories that we currently have, in 20, 30 years, they might kind of lose their meaning.

We're going to become such a melting pot that these current designations that we have for whites, Latinos, blacks, and Asians, those kind of designations might disappear as we have a lot more people who are multiracial identifying with more than one race, more than one ethnicity.

MANN: Is there going to be a power shift? I ask that question, because let's be honest, essentially white Protestants and Catholics have run this country ever since it was founded, and now we have a black president campaigning against a Mormon. Are we going to see more minorities moving into more positions of influence and introducing this country and the world to their cultures?

MATHER: I think that's definitely going to happen in the future, especially if you look at the Latino population. That's the fastest- growing minority group right now. They're making up more of the population. They're going to make up more of the electorate. And so, politicians are going to have to start paying attention to these minority groups, and they're going to have more political power.

MANN: Now, countries around the world are finding their ethnic mix is changing, and you can think about many countries that have had some trouble, some resistance. It's normal. People are used to the world they were born into and less accustomed to seeing that world changed.

Is it going to be different in the United States, though? I ask that question because France is a French country traditionally. It's an ethnic nation state. The countries of Europe are ethnic nation states. The United States really doesn't have an official ethnic group.

MATHER: No, it doesn't. Because we have this long history of immigration, I don't think it will be as much of an issue here as it is in some other places.

But at the same time, if you look at the non-Hispanic white population that, as was mentioned, they're getting older. We have all of these baby boomers who are now starting to reach retirement age, most of who are white. And so there is some culture shock there for these older whites who are seeing this really rapid growth of a population that they may not be accustomed to.

MANN: The face of the country literally changing. Mark Mather of the Population Reference Bureau. Thanks so much for talking to us.

MATHER: Thank you.

MANN: More now on the financial crisis hitting Europe. In just the last few minutes, an update of the story we've been bringing you early, the Spanish banking situation. Well, the credit rating agency Moody's has downgraded 16 Spanish banks and Santander UK. Let's go right to Felicia Taylor at CNN New York. What's Moody's saying?

TAYLOR: Well, basically what they're saying is that there's greater fear about the feasibility and credibility of these 16 Spanish banks. I do want to point out, though, that this was in the news and there was -- this is not entirely unexpected. We've been hearing about this.

And frankly, Standard & Poor's downgraded Santander back in April, so there has been this underlying feeling this could happen. But nevertheless, what they're pointing to is the fact that there are rising loan defaults, a renewed recession in Spain, which we knew about, and restructure -- restricted funding access, which is very much a concern.

And this comes on the heels of what was -- word in the news earlier that there was a run on the mortgage lender Bankia. Now, the economics finance minister did come out and deny that and say that was not happening, but nevertheless, the stock of Bankia was down about 29 percent.

Now, what's significant about Santander is that it's the largest Spanish bank, so obviously this is not good news for them in the prognosis for the long term. However, if there's one little shred of good news, if you look at the actual report for Santander, while they have been downgraded, they have a stable outlook now as opposed to a negative outlook.

But again, this underscores the fear of the viability and credibility of the eurozone banks. Obviously Spain has a much greater economy, much larger economy than Greece, so this points to the fallout that everybody has been concerned about.

And indeed, the ten-year note in Spain has now crossed 6.3 percent. And you can see the reaction in the US marketplace within the last hour of trade that this is of great concern, definitely, amongst the US traders her on Wall Street. Jon?

MANN: Felicia Taylor in New York. Thanks very much.

That almost does it for us here at CONNECT THE WORLD, but before we go, let's head back to Becky in Italy. Becky?

BECKY ANDERSON, HOST: That's right, Jon, thanks for that. And we're traveling through the country, taking the temperature of the economy here, and there's no doubt things are tough, as we were saying a little earlier on.

But if there's one thing that is guaranteed to put a smile on Italians' faces even in these austere times, it's racing cars. If you throw in vintage into the equation, well, you've got a formula that really will help to make people to feel happy.

We're here in Brescia today for the start of what's known as the Mille Miglia Race. This is a thousand-mile race started in 1927 that starts in Brescia and goes all the way down to Rome and comes back to Brescia.

In the past, this race took about -- well, I can tell you exactly, 10 hours, 48 minutes and 7 seconds, that was the record. These days, it's a little more leisurely in its pace. It takes about 3 days. I caught up earlier with a legend of this game, Sterling Moss, who still holds that record. Have a listen to what he said about this race.


STIRLING MOSS, FORMER RACE CAR DRIVER: It is amazing how many Italians are here. People who don't know -- know very little about motor racing, they all know the Mille Miglia, because it's such a romantic race.


ANDERSON: We're going to be in Rome for the show tomorrow, and you're going to hear a lot more from Stirling Moss then.

We'll do a lot more, as well, on austerity here because as I say, things aren't easy, people feeling incredibly depressed. Folks here saying that they are really fed up with the politicians here, they're fed up with what's going on, and we are seeing the rise of parties who are really in touch with the common man here in Italy.

That's all coming up tomorrow here on CONNECT THE WORLD at this time. And as I say, the Mille Miglia Race, if only for a few hours today, really put a smile on thousands of Italians' faces. Jon, back to you.

MANN: Becky Anderson, keeping fast company. Thanks very much.

I'm Jonathan Mann and this has been CONNECT THE WORLD. Thanks for being with us. The world headlines up next after a short break.