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What is the Fed?; Protests in Hong Kong
Aired October 10, 2014 - 04:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CARL AZUZ, CNN ANCHOR: Fridays are awesome. This is the 10 minutes of commercial free current events known as CNN STUDENT NEWS. My name is Carl
Azuz. If you were to ride a rollercoaster with ups and downs like the stock market`s had recently, you`d be sick. The Dow Jones Industrial
Average is exactly that, an average of 30 significant stocks in the New York Stock Exchange. It`s one measure of how the whole stock market is
doing. Wednesday, it jumped; yesterday, it dropped. 335 points, its worst day of the year in points. Why? One reason is the European economy.
Investors are getting nervous that Germany, Europe`s biggest economy, could slip into a recession. And when investors get nervous, they sell stocks.
Another reason, The Fed. Its recent moves indicate that it thinks global economic growth may be slowing down.
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ZAIN ASHER, CNN CORRESPONDENT: So we`ve all heard that phrase, that, you know, money makes the world go around, but you may have asked yourself once
or twice, OK, well, who makes the money go around? And so the answer is the Federal Reserve, or as my friends and I like to call it, the Fed. So
the Fed is pretty much unlike any other U.S. institution that I can think of. It`s run by a board of governors based in Washington, D.C. It had 12
Federal Reserve banks located around the main banking centers of the country. So places like New York, San Francisco, Philadelphia. The
presidents of these banks and the board of governors, they meet eight times a year to make big policy decisions and to ensure the economy is moving at
a stable clip. So the Congress oversees the Fed, but the Fed does not really answer to Congress. The Fed operates completely independently,
because the Fed doesn`t care about politics. All it cares about is basically two things. Number one, keeping prices stable. And no. 2,
trying its best to ensure that everybody who wants a job gets one.
So if the economy is heating up, it tries to cool things down by raising the cost of borrowing by making it harder to borrow money. And if things
are getting too cold, it does the opposite. So you can sort of think of the Fed like Goldilocks. It doesn`t really like things too hot, too cold.
It wants everything to be just right.
So you`re probably wondering, OK, well, how does the Fed work its magic? What is its secret weapon? The answer is interest rates. So the way the
Fed gets interest rates at just that right level, at that sweet spot, is through buying and selling U.S. Treasuries and other bonds. So when it
wants to cool the market down, it sells U.S. Treasuries, stashes away the cash, and that reduces the money supply, so that makes it harder to borrow
money, and that basically slows down economic growth. When it really wants to heat the market up, it essentially starts buying up U.S. Treasuries and
other bonds. That floods the market with cash and fuels economic growth. So it`s not necessarily a perfect system, but it works, at least for now.
And as they say on Wall Street, don`t fight the Fed.
AZUZ: In Hong Kong, the city`s government has called off talks with protesters, and it`s not clear what will happen next in the standoff
between these two sides. Some background. Thousands turned out in recent weeks, most of them students. They blocked access to Hong Kong`s business
district. They demanded a greater say in how Hong Kong`s leader is chosen, without intervention from mainland China. Hong Kong`s current leader was
approved by China. He says the upcoming elections will be fair, and his government has called the protests illegal. But it also scheduled talks
with the protesters, talks the government called off when protest leaders asked supporters to keep their occupations going.
JIM SCIUTTO, CNN CORRESPONDENT: The protests in Hong Kong have set the territory`s population in direct confrontation with its political masters
in Beijing. Here is the history. For 150 years, Hong Kong was ruled by Britain, and as a result, Hong Kong people came to enjoy a number of
freedoms that are unheard of on the mainland, freedom of the press, freedom of expression, and freedom of assembly, the right to protest. Now, when
Britain handed Hong Kong back to China in 1997, China promised to keep Hong Kong`s special status. They called it one country, two systems. Including
allowing Hong Kong people to have direct election of their chief executive, their governor, so to speak, by the year 2017. It is that promise that
Beijing is now reneging on, saying that the Hong Kong people can vote, but it`s Beijing that is going to choose the candidates.
Here is what`s at stake. It`s precisely Hong Kong`s special status that has made it so attractive to so many people. 60,000 Americans live there.
Hundreds of thousands of foreigners. Hundreds of foreign companies, including American companies, as well as thousands of mainland Chinese, who
come to Hong Kong precisely for those freedoms that Hong Kong has but mainland China does not.
Now, from China`s perspective, however, protests are a direct challenge to Beijing`s rule, and they worry about them not only in Hong Kong, but they
worry about protests there spreading to mainland cities, and that`s why, if you are living in mainland China right now, you are not seeing any press
coverage whatsoever of those protests in Hong Kong. You can`t even read about it on social media.
So what now? The trouble is, neither side seems willing or capable of backing down. From the Chinese side, Chinese president Xi Jingping, who
was once heralded as a reformer, is actually just as repressive as his predecessors. In some ways, more so, cracking down on dissidents,
censoring news coverage of stories like the protests in Hong Kong.
Now, from the Hong Kong perspective, though, people there feel that they are fighting for their very lives. And this is one thing to keep in mind.
25 years ago, when the Chinese government brutally cracked down on popular protests in Beijing, the people of Hong Kong mourned, and those memories
are still raw. The fear today that Hong Kong could suffer the same fate.
AZUZ: We`re getting tropical on this Friday`s roll call. Starting in South America and working our way north. Paramaribo is the capital of
Suriname, and it`s where we`re online at the International Academy of Suriname with the Toucans. On the Hawaiian island of Honolulu, there is
the La Pietra Hawaii School for Girls. The Lady Panthers are watching the CNN STUDENT NEWS today. And we conclude our call in Concord. It`s a town
in Vermont, and it is where we`re happy to see the Wild Cats of Concord School.
We have covered two significant viral outbreaks this school year. One is the highly deadly Ebola virus. The other is called enterovirus or
enterovirus D68. It`s far less dangerous than Ebola, and it`s much more likely that you`ve been exposed to it. In fact, doctors say that most
people who get enterovirus D68 have nothing more than a runny nose and a cough, and that as a whole, it`s a lot less impactful than the flu. Still,
it has sickened hundreds of people in more than 40 U.S. states. It was linked to the death of a 4-year-old last month. So if you`ve had cold
symptoms, how do you know when it`s time to see a doctor?
UNIDENTIFIED FEMALE: Here is what you need to know about enterovirus D68. Enterovirus in general has been around for decades and it`s fairly common.
In fact, the CDC estimates 10 to 15 million cases in the U.S. every year. But this year, confirmed cases are much higher, with more severe symptoms.
Who is most at risk? Infants, children and teenagers. That`s because their immune systems are still developing. Adults can get it too, but they
are more likely to have mild to no symptoms.
The symptoms are much like a bad cold. The runny nose, coughing, a fever, but more severe cases include wheezing and difficulty breathing. That`s
when it`s time to call a doctor. And here is the scary part. Enterovirus may also be linked to a small number of cases of a mysterious neurological
illness. This was reported in Colorado, Boston, and Michigan. One child in Michigan even developed partial paralysis.
So how is the enterovirus spread? Much like a cold. It spreads through the air and lives on surfaces like doorknobs or toys. But there is no
vaccine. The best way to protect yourself is to wash your hands and avoid touching your eyes, nose and mouth. And stay at home if you`re feeling
AZUZ: Cat plus cafe equals cat-fe. That`s the idea of this event in Los Angeles. It`s part cat petting zoo, part eatery, part animal shelter.
Because the food isn`t all you can take out. If you bond with a cat, say over coffee or a sandwich, you can adopt it. The goal is to get all of the
animals adopted out, and yes, they are kept separate from where the food`s made, so there is no risk of sharing a hairball with a hairball.
What does the menu look like at a cat-fe? Bet they have calid (ph) coffee, cat-puccino, cat-fe au lait, Americatno, mochichito (ph), purrshinstant
(ph) frappercino (ph), himalatayan (ph) and of course, Javanese. Those are some fresh brewed puns right there, y`all. Have a great weekend. Hope to
see you Monday.