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Connect the World
JPMorgan Chase Downgraded by Fitch Ratings Agency; Talks to Form New Government in Greece Failed Again; Huge Protests After Friday Prayers in Syria Following Deadly Suicide Bombings
Aired May 11, 2012 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
JONATHAN MANN, ANCHOR, CNN'S CONNECT THE WORLD: Tonight on CONNECT THE WORLD, taking a big hit -- shares in the biggest U.S. bank nosedives after JPMorgan reveals a $2 billion-trading blunder.
UNIDENTIFIED MALE: Live from CNN Center, this is CONNECT THE WORLD.
MANN: The ghost of the credit crisis is spooking investors tonight. A well-known banking analyst tells the CONNECT THE WORLD, "We'll all pay in the long term if we don't fix the core problem of the financial crisis."
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Also tonight, could this drug be a great booster, desperately needed in the global fight against HIV AIDS or a big mistake. We'll debate both sides.
And after a nine-month battle, it comes down to just two teams and one big trophy as we rev up for the Premier League finals.
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Thanks for joining us. Forget "too big to fail." Tonight, it's all about "too big to manage." We're not talking about the ghost of the 2008 financial meltdown.
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Right now, at this moment, JPMorgan Chase is reeling and shares are down.
That's because America's biggest bank lost $2 billion in trades gone wrong since April. Despite the stunning loss, the banking giant won't sink but it barely knows what hit them. After a unit that was meant to manage risk put big money on insurance-like bets called "credit default swaps".
We heard a lot about those four years ago when they helped bring down the global banking system down to its knees. And that's part of the big anxiety tonight. Is there a new danger to the world's economy all because of what JPMorgan's Chief Jamie Dimon calls "bad judgment".
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Right now, Felicia Taylor joins us live from CNN New York. In layman's terms, Felicia, what happened.
FELICIA TAYLOR, CNN BUSINESS CORRESPONDENT: OK. So, basically what happened is -- obviously, JPMorgan Chase is an enormous bank. They've got about $2 trillion in assets. They use these kinds of derivatives tradings in order to protect themselves on what could be exposure out there.
Obviously, they have great exposure to the credit market. And so, what happened was they use certain vehicles to protect themselves. And then, obviously, they tried to hedge that exposure with these different vehicles, these credit default swaps or these synthetic securities.
But, of course, what happens with these enormous trades -- and this is a division that's entirely devoted to protecting any kind of exposure that they have -- it's called the chief investment office. When they move money in the marketplace, whether they're buying or selling, obviously its through enormous tranches. This division alone is worth about $300-350 billion.
So, what happens is, on the opposite side of the trade, traders can see where this money is moving. And what they did is they came in and made the opposite end of the bet. So, that's when the models, the sort of strategy that JPMorgan was following, was considered to be flawed.
Because, obviously, the other side of that bet was taking the profit and they weren't actually hedging against it. They were being bet against it in the marketplace. But that's the way the capital markets work.
For one side, there's always going to be a winner and a loser. Jon.
MANN: Felicia Taylor. Thanks very much. Stay with us though. I want to bring in some thoughts of Mike Mayo. He's the U.S. banking analyst who caused this stir after he took an axe to JPMorgan Chase in a way, downgrading America's biggest bank to "underperform" from "outperform".
I talked with the author of "Exile on Wall Street" a short time ago about the buzz circling at JPMorgan trader dubbed "the white whale". "The Wall Street Journal" identified him as London-based Bruno Iksil, also nicknamed "Voldemort". I thought he was something.
He made some very aggressive bets, so I asked Mayo, "if all these anxiety really boils down to the actions of one man."
MIKE MAYO, BANKING ANALYST, CLSA: There's no way you can blame this solely on one trader whose all sorts of checks and balances at large banks -- whether it's limits on how much you trade or the people overseeing the unit or the chief risk officer of the company or the senior manager who are supposed to be drilling and questioning all the actions taken.
MANN: But $2 billion. How did the losses get that big.
MAYO: Well, one reason losses get that big is because the banks have gotten big. The largest banks in the United States are $2 trillion. Do you understand how much $2 trillion really is. It's $1 million times $1 million times two.
The biggest banks are 20 times larger than they were a couple of decades ago. So, it raises the question, "Are the largest banks too big to manage."
MANN: You keep saying that. So, since you are saying, astounding losses like this, disasters like this would have been prevented if all that trading was happening in a smaller firm.
MAYO: Well, larger banks, larger losses. This is not life- threatening in JPMorgan and the U.S. banking industry. The bigger issue is what it says about their controls and their ability to understand what's happening at their own firms.
Just one month ago, the top management of JPMorgan reassured investors, saying that everything was fine with their investments and here we are, four weeks later, and everything's not so fine.
So, either they didn't do their homework or, more likely, they did their homework and still, they didn't get the correct answer until a few weeks later.
MANN: Or, potentially, they weren't honest which leads me to the next question. One of the extraordinary things for those of us outside of the Wall Street community is that after everything the Wall Street and the world have been through, no one on Wall Street has been prosecuted or gone to jail.
Is there any suggestion that anything illegal happened this time.
MAYO: There's zero evidence that anyone was dishonest. I truly think, knowing the track record of this company, they simply got it wrong. But I agree with the broader point that in our financial system, we have a crisis of accountability.
And the top people running these companies, the overseers, all need to be held accountable for when they mess up. And heads will certainly roll at JPMorgan.
MANN: What about the rest of us. The last time Wall Street had an "adventure", if you want to call it that, with big exotic financial instruments, the whole world ended up paying for it. Are we going to pay for this one.
MAYO: This is not life-threatening or big macro-economic political uncertainties out there but we will all pay for this over the long-term if we don't fix the core problem of the financial crisis which still hasn't been done.
And that one factor that caused the financial crisis more than any other, and that's still in place today, is faulty incentives. And as long as you have faulty incentives and, perhaps, in this case, it was a trader who can make a lot more money if his bets went well. Or it could be compensation from senior management of these banks when they get it right and make a lot of money when they lose. They don't lose a whole lot.
We need to fix incentives like those. And the incentives of the overseers who too often get paid by the companies that they oversee. Until we fix those incentives, yes, we will all pay in the long term.
MANN: Mike Mayo. All this placed into regulator's hands, so it's important to ask, "Has trading become so complicated and costly that no bank can really control all these activities."
Let's get back to Felicia Taylor who has been looking at the bigger banking industry from our New York studios. Felicia, a big shock, a very big number -- are there going to be big implications for this.
TAYLOR: Well, they're big implications because, you know, banks have a special obligation to the public to avoid these kinds of risky trades. Because when they go wrong, as you said, that's a big number, they can take down an entire economy.
We saw that happened with Lehman Brothers not in terms of an entire economy but an entire bank. So, that's why there are implications here for what they call the Volcker Rule where banks are meant to be restricted from these source of management of risk or risky trades as some people call them.
And they realize, since we're using clients' money, following on clients' orders, not using the bank's money to make intentional profit for the bank. I mean, it's all well and good when it goes right but when it doesn't go right, obviously, the implications are very severe for the bank itself.
And, like I said, they have a special obligation to avoid these kinds of risks for the public because it can bring down the bank or, certainly, affect an entire economy. So, this is going to definitely be more of a specific scope for the regulators in Washington.
You already can see, you know, Paul Levan who is behind the Volcker Rule stepping up and saying that this has to be put into place faster than we will be seeing it which is coming up in July. So, there's no question there of bigger implication.
Is it going to bring down -- excuse me, JPMorgan Chase which took over Bear Stearns, it is not. I mean, in context, the number sounds big to people like you and I -- $2 billion. But if you put that in context to what the actual division is worth which is $350 billion, it's not a rounding error, but certainly, it's a small fraction of what JPMorgan is actually worth.
So, it sounds large but it's not in terms of the bigger picture for them. The losses could accelerate towards the end of the year. But, then again, because of the kind of trading that they're doing, they could see some gains. It's unlikely but, at least, it could be mitigated.
MANN: Felicia Taylor, I've got to start thinking about $2 billion as a small number. I'll work on that --
TAYLOR: In context.
MANN: Thanks very much. Coming up on CONNECT THE WORLD, a glimpse into the relationship between political power and the press in Britain. What the former senior aide to Rupert Murdoch told an inquiry, just ahead.
And, except for a thrilling finale, the Premier League drives for close with a home garden (ph). That story and more in CONNECT THE WORLD.
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MANN: You're watching CNN and this is CONNECT THE WORLD. I'm Jonathan Mann. Welcome back.
Tonight, Greece is looking to its President. He has to try to get the country's political parties working together. PASOK party leader, Evangelos Venizelos, has failed to form a new government. He is the third politician to strike out since just Sunday's elections.
The latest development broke a short time ago. Journalist Elinda Labropoulou joins us now by Skype from Athens. Elinda, no deal. What happens now.
ELINDA LABROPOULOU, JOURNALIST, ATHENS, GREECE: Well, the parties that got the majority of votes since Sunday's elections have now all had their chance to try and abolish the government. They have all failed.
So, now, it is down to the President of the Republic to try and bring them together to form a national unity government. What happens next is that the leader of the third party, Evangelos Venizelos, will go to the President tomorrow and say that he wasn't able to form a coalition and ask the President to call all the political leaders in to see what can be done next.
So, this is what the President is going to have to do. If by the seventeenth of May, no decision has been reached, then he has to hold a new election.
At the moment, there's slim chances of a national unity government being formed this week. There are a lot of differences between the main political parties. So, it is increasingly likely that Greece may be going to a next round of elections.
MANN: Elinda Labropoulou in Athens. Thanks very much.
Here's a look now at some other stories we're following. A high profile former newspaper executive took the hot seat Friday in front of an inquiry into media ethics in London.
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Rebekah Brooks answered questions about her relationships with some of Britain's top political leaders.
REBEKAH BROOKS, FORMER CEO, NEWS INTERNATIONAL: I think, if a politician or a prime minister ever put a friendship with a media executive or a media company in front of his or her abilities to do their professional duties properly, then that is their failing.
And, I think, if a journalist ever compromised their readership or their role as a journalist and through friendship, then that is their failing.
MANN: Brooks resigned from Rupert Murdoch's News International after a public outcry over accusations of phone hacking at the "News of the World" tabloid.
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Egyptians living abroad are getting a head start on the country's landmark presidential elections.
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Expats began casting ballots Friday at Egyptian Diplomatic Missions worldwide. More than half a million Egyptians are expected to vote overseas before the May 17th cut-off. Elections within Egypt itself begin May 23rd.
Thirteen candidates are competing to be Egypt's first post-revolution president. Many expats say, they're grateful for the chance to help make history.
UNIDENTIFIED FEMALE: It felt -- it was bittersweet because it couldn't have been possible without all those who died, lost their eyes, their limbs. We have to think about them at a moment like this because they made this possible. And, at the same time, it's victory because it's the first time that you actually vote without the results being pre- arranged and ending up with 99.9 percent. So, may the best man win.
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MANN: Mass protests across Syria Friday after two suicide bombs rock the capital Damascus Thursday.
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Thousands took to the streets, accusing the Syrian regime of trying to destroy the peace plan. But the regime says, terrorists carried out the attacks that killed more than 50 people.
Meanwhile, a large explosion has just been reported in the northern city of Aleppo while opposition forces has no word yet on any casualties.
We're going to take a short break now but when we come back, the Premier League title race has gone down to the wire as Manchester City look to be crowned champions for the first time since 1968 on Sunday.
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Welcome back. You're watching CONNECT THE WORLD. I'm Jonathan Mann.
It has been one of the most exciting seasons in Premier League history and it will all come to an end on Sunday when we'll find out which club will clinch the title. In a moment, we'll bring you CNN's interview with the head of the Premier League.
But, first, a reminder of the key moments in the tournament so far.
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UNIDENTIFIED MALE: Remember this. A cracking goal by Manchester City's Yaya Toure against Newcastle last Sunday, helping propel his team to possible glory in the Premier League's 20th season.
Celebrations like these ensure the climax of the world's most-watched domestically will be one no football fan will want to forget. Also on the pitch, no shortage of controversy. Not least racial abuse allegations leveled against former England captain John Terry and Liverpool star Luis Suarez.
A sad reminder the beautiful game still has an ugly side. Off the pitch, drama, too, ghost goals like this one ensuring the debate about goal-line technology continues to dominate the back pages.
And multi-billionaire owners like Roman Abramovich of Chelsea with their big bucks and celebrity vice meaning questions of financial fair play continue to dog the game.
A season then to reflect upon with awe, admiration and a dose of angst as we take our seats in the stands for games that will make or break the global footballing fraternities' hearts.
BECKY ANDERSON, CNN CORRESPONDENT: In this 20th season of the Premier League, how would you rate it.
RICHARD SCUDAMORE, CHIEF EXECUTIVE, F.A. PREMIER LEAGUE: Well, I think, I'll rate it very highly. When you look at the fact that we are still competing for the title. We've one match to go. We're still competing for the champions leagues spots.
In fact, we don't actually know how many champions league spots we've got because of the Chelsea factor in the champions league. And we're still fighting out a relegation but, yes, we've got to go down as one of the best.
ANDERSON: Richard, the national broadcast rights package is worth, ballpark figure, over a billion dollars. Where are the big growth markets and what is the global broadcast rights package worth.
SCUDAMORE: At the minute, our current three-year global rights are worth about 3.5 billion pounds. The growth markets, well, we're in a very fortunate position and we're very well hedged. We broadcast in 212 countries. So, plus there might be some economic downturns in certain areas and Europe certainly looks, you know, pretty flux in terms of the -- in terms of the economy.
There are some very big growth areas for us in Asia. And we also think the Americas -- and there's been some great audiences.
ANDERSON: The game is not lacking in controversy. It never is. Let's kick off with goal-line technology. One of the classic this season in the F.A. cup semi-final -- a ghost goal for Chelsea against -- as you know, I support Spurs -- again in the final, another goal that was disputed.
I know you're on the record as saying, "It's important that we go down that route now." Is there one argument against goal-line technology or is it --
SCUDAMORE: Matter of fact, there's many arguments against it. I mean, as soon as we can really strictly test it, as soon as we can get into a proper discussion with those that are providing the technology, as soon as we can logistically manage it, I'm sure we will introduce it as soon as we can.
ANDERSON: When.
SCUDAMORE: It's quite technical. It's kit. They idea that it'll be fully tested it in our stadium, all 20, by August of this year would be impossible. I would hope that we will be able to persuade our clubs. It's the right thing to do and to make the investment, probably, by the start of next season. So, 13-14.
There's been a rise of the ugly side of the game this season, that of racism.
SCUDAMORE: Well, I don't quite like the question since "it's the rise of". There have been a couple of incidents, high-profile incidents but, generally, you know, across the game, the trend is being, as you know, completely the other way.
In terms of the -- for instance crowd incidents, in terms of what happens, you know, generally, in the game.
ANDERSON: I'm told regularly by players, with respect, that there is still -- there are players that feel that there is still racism in the game. From the terraces, in the dressing room --
SCUDAMORE: What happened this year has been a wake-up call. I think it's been, you know, a call for all of us which is to get around the table again, as we are doing, to see what more can be done. Because, else, we might reduce it and what must be eliminated for many places, as you say.
The fact that it does still exist somewhere and even if the instance are isolated are more reduced, then we're not complacent to that.
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MANN: Well, the run-off to the title race has been filled with mind games between the managers of Manchester City and Manchester United. Maybe, we should call them "man games" instead of "mind games". Mark McKay has all this.
MARK MCKAY, CORRESPONDENT, CNN INTERNATIONAL: Yes and Manchester City, Jon -- the title is there for the taking. It really is.
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City will close their first top flight crown in 44 years with a victory of a relegation-threatened QPR on their home grounds, on City homes grounds of Eastlands on Sunday. City level with the reigning champs Manchester United on points. But City do have a superior goal difference, meaning, by something totally unexpected, City will have the Barclay's Premier League crown in their grasp by weekend's end.
Manager Roberto Mancini, the man many are (inaudible) for City's turnaround and makeover has communicated to his club how important this weekend can turn out to be.
ROBERTO MANCINI, MANCHESTER CITY MANAGER: You play the last game, if you win, you can win a title. Sure, that is a big game. And in this situation, we should play against the team that play for congregation (ph) and it would be hard, it will be difficult. More than Newcastle and more than United.
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MCKAY: Mancini is on record as saying, he believes Manchester City, his team, can dominate the Premier League, Jon, for years to come. But they have to win that first title to get all that -- that ground work laid out for them.
MANN: It kind of seems pre-ordained at this point. What do you do if you're -- I mean what is Alex Ferguson saying about this. Is he resigned to the way this is going to go.
MCKAY: Well, yes and no. You know, City has it in their grasp but Manchester United is still clinging to hope.
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Manchester United will have a lot to do, Jon, in their final match away to Sunderland. They do trail by goal difference.
But listening to Alex Ferguson, he sounds as if he's certain as to how this race will turn out but with an asterisk attached.
ALEX FERGUSON, MANAGER, MANCHESTER UNITED: It's not going to be easy because on the face, he expects to be winner. And so do I. But as long as human beings -- like human beings, you'll never know. You just hope something stupid happens.
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MCKAY: Yes, something stupid may happen like Queens Park Rangers who are threatened with their allegation. Maybe they can stand up and do something totally unexpected against Manchester City. But even Fergie knows it's City who's to lose.
MANN: We kind of know which way this is going to go. And you know, once this is behind us, London, the people of the U.K. will be looking to the Olympics which is coming, bringing all of its fun and frivolity and weirdness.
MCKAY: And artworks. It happens in every Olympic city.
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Artwork that some like, some dislike. And so, we have for you, Jon, the latest in a sculpture that's gotten a bit of attention for better or for worse. It's the ArcelorMittal Orbit tower. It opened Friday in East London to visitors.
The steel sculptor, a hundred and fifteen meters tall, it catches the eye but mixed reviews. Some residents have complained, "It doesn't signify a thing." It simply towers over their community. Backers say they'll bring a landmark to continue to bring visitors to the Olympics.
Great back story here, though, Jon. It really is a project orchestrated by London's Mayor who, on a chance encounter, persuaded a steel billionaire named Lakshmi Mittal to provide 19 million pounds of the 22 million pounds of funding for this.
How did they meet -- a chance encounter in the lavatories of the 2009 World Economic Forum in Davos, Switzerland.
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MANN: Wow.
MCKAY: Yes.
MANN: You know, I'll make one quick comparison. When the Eiffel Tower was put up, people thought it was ugly, too, and it should be taken down. So, maybe we'll have the Eiffel Tower of our time.
MCKAY: A lasting legacy. And many of them, the Olympic cities have provided for better or for worse.
MANN: Mark McKay. Thanks very much.
MCKAY: OK, Jon.
MANN: Still to come on CONNECT THE WORLD --
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A little blue pill that could be a lifesaver for countless people with risks of contracting the virus that causes AIDS. But the risks might outweigh the benefits.
And why South African journalists fear that corruption is being kept under wraps.
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MANN: A warm welcome to our viewers across Europe and around the world. I'm Jonathan Mann and these are the latest world headlines from CNN.
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U.S. banking giant, JPMorgan Chase is blaming a staggering $2 billion- loss on a flawed and poorly-executed hedging operation. That, according to the CEO Jamie Dimon.
The news sent JPMorgan's stock lower at trading but other banks' shares dragging at other banks' shares with it.
Greek socialist leader, Evangelos Venizelos, has failed to form a coalition government. He's the third party leader to try since Sunday's elections. It's now down to the Greek President to get parties working together. And if he doesn't manage that by Thursday, new elections will have to be called.
Former "News International" executive, Rebekah Brooks, says British Prime Minister, David Cameron, sent her message of support when she resigned from her post last summer during the phone hacking scandal.
Brooks says, she was testifying Friday at the Leveson inquiry into media ethics in London.
Huge protests after Friday prayers in Syria following Thursday's deadly suicide bombings in Damascus. A short time ago, the opposition says a large explosion went off in the northern city of Aleppo, close to the ruling party headquarters. No word on any casualties.
Those are the headlines this hour.
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It could be a turning point in a decades-long battle against the virus that causes AIDS. For the first time ever, a U.S. Advisory panel is recommending a drug to prevent HIV infection, not just treat it.
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Clinical studies show Travada can lower the chance of contracting HIV by as much as 73 percent in some people. Now, the drug is already used to help treat AIDS patients. But if U.S. Food and Drug Administration accepts the panel's recommendation, it could soon also be used on healthy people considered at risk. w A final decision is expected next month.
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Supporters say, the drug could help save countless lives but critics say, it could actually do more harm than good. Let's look at both sides of the controversy.
We're joined by Michael Weinstein, President of the AIDS Healthcare Foundation in Washington and Stephen Boswell, President and CEO of Fenway Health in Boston, Massachusetts. Gentlemen, thank you both for joining us.
Dr. Boswell, I wonder if we could start with you. Why use an expensive drug with potentially serious side effects to do a job with modest or some reliability that condoms are already doing with extraordinary reliability.
STEPHEN BOSWELL, PRESIDENT AND CEO, FENWAY HEALTH: Well, we would use something like this because the consequences are becoming infected or so onerous. The main approach that we take in medicine is generally to multiple different tools in our toolbox to actually address an issue that a patient may be facing.
So, in the case of hypertension, for example, we'll use medications, we'll suggest weight loss. We'll talk about dietary changes, talk about exercise and suggest that all of those tools be used together to actually create a package that is much more effective as a whole, decreasing the risk of transmission. And any single one of those elements might be by itself.
MANN: Michael Weinstein, does that make sense to you.
MICHAEL WEINSTEIN, PRESIDENT, AIDS HEALTHCARE FOUNDATION: Well, it would if it weren't for the fact that there's no reason why people would use condoms if they are taking medication. And the reality is, yesterday, we said at the hearing that only 18 percent of the participants took medication every single day.
Overall, the main study that was used to justify the approval only had a 44 percent rate of effectiveness. That's extremely low. So, the main medicine thing -- like, if we go buy a medicine, is do no harm and this certainly can do harm.
You know, this will result, in my opinion, in more infections because people will falsely believe that they're protected when they're not.
MANN: If they're saying just how serious the problem is, how desperately the world needs to find a way to solve it -- if you look at AIDS numbers around the world, the numbers are staggering. According to the most recent U.N. report, more than 22 million in Sub-Saharan Africa have HIV AIDS. That's about five percent of the adult population.
In Southeast Asia, we're talking about 4 million people with AIDS. That's just 0.3 percent of the population but it's a lot of people. In Eastern Europe, Central Asia, 1.5 million people -- an enormous number. And in North America, roughly 1.2 million people, that's about 0.6 percent with AIDS.
But Dr. Boswell, let me go back to places like Africa and Asia where governments are struggling to cope with a bill of pain for medication for AIDS and HIV victims and this particular drug, Travada, works out on a monthly rate of a cost of what -- a thousand times more expensive than condoms.
It just seems like an enormously expensive solution to the problems condoms are already addressing.
BOSWELL: Sure. And this is not something that we're going to suggest for use in every instance to actually prevent transmission. So, in every case where someone may be at risk, this may not be a tool that we suggest.
But it has been clearly shown by a number of health services researchers, including some researchers at Mass General Hospital here in Boston, Rochelle Walensky, that in certain settings, this is a very cost- effective approach.
Remember that the treatment of this disease is tremendously costly. And once you're infected, in fact, you'll need that treatment, at least, as we are currently conceiving that treatment for the rest of your life.
So, it is a very costly disease to get. And it is that fact that actually can make this in the right setting, a very cost-effective tool, among many other things, that we offer patients to try to decrease the risk of transmission.
MANN: Let me jump in on that note. Because you two are experts, I am not. But what is clear even to non-experts is that women cannot frequently control the risky behavior of their partners. And, so, there's a suggestion that if you give this drug to a healthy woman whose partner is at risk, then, maybe, she can protect herself.
A woman who can't force her partner to stop a promiscuous behavior or even use condoms. Michael Weinstein, does that make sense in that context.
WEINSTEIN: Well, two of the studies that were done in Africa for women were stopped because they were not effective. But we're only treating 7 million of the 34 million people infected with HIV. And what we know is that when a person is treated and their virus is under control, they're rendered 96 percent less effective.
So, the best way to control HIV is to promote condom use and to treat the infected. I mean, we act as if condoms have failed. In reality is that we've done a very poor job of promoting them. We don't advertise on television. We don't have them available in bars and nightclubs. We don't educate young people about them in the schools.
So, they were giving up on condoms in favor of a medication. But, also, we're going to give this medication to young people. There's a high correlation to kidney damage. And yesterday, not only did the FDA say they don't want to require the people be tested for HIV before they go on a medication but they didn't make it a requirement that their kidney function be monitored which is a reckless act on their part.
MANN: Dr. Boswell, we'll give you the last word. It sounds like, at best, this is a good idea but it's not the breakthrough anyone would pray for.
BOSWELL: No, we think this is an incremental improvement in the toolbox that we have to actually try and prevent transmission of HIV. The CDCs, the Centers for Disease Control, has very well-thought out guidelines that actually focus on how these tools can best be used.
And they need to be used -- this particular tool needs to be used in a clinical setting under a clinical supervision where a physician is actually able to monitor what's happening with the patient.
But in the right setting, this can definitely have an effect on the risk of transmission and is an important new tool for us to try to decrease the number of people infected.
MANN: Stephen Boswell of Fenway Health and Michael Weinstein of the AIDS Healthcare Foundation. Gentlemen, thank you both for being with us.
As you can imagine, this is a very hot discussion on social media right now. Lots of comments on both sides of the argument.
Keira Rodriguez posted this on our Facebook page: "One can never have too much protection against HIV," she says. "If this drug can help prevent someone from being infected, hooray for Science."
Dede wrote that, "If this drug has no side effects, I think it should be used if it is found to prevent HIV."
And Skye Walker wrote that, "It may prevent HIV but not other sexual diseases."
That's an interesting point we heard as well. Thank you all for taking part in the conversation.
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Coming up on CONNECT THE WORLD, their job is to uncover corruption but, increasingly, South African journalists are finding that they, too, are under investigation. We'll tell you by who, next.
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(COMMERCIAL BREAK)
Welcome back. We begin this hour by telling you about an enormous blunder at JPMorgan Chase --
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A trading mistake that cost the firm $ 2 billion in estimated losses. Now, we have this word from the Fitch Ratings Service. It has downgraded JPMorgan Chase. Its long-term issuer default rating has gone to A plus from AA. Its short-term rating is down as well.
Fitch has placed all parent and subsidiary long-term ratings on Ratings Watch Negative. Once again, part of the impact of this enormously costly mistake with $ 2 billion trading error is affecting JPMorgan's reputation. And, now, from Fitch, its credit rating as well.
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Now, South Africa inspired a continent and indeed the entire world when it cast off the shackles of Apartheid and held its first-ever free elections in 1994. All this week, we've been reporting on the growing concerns that the very party that fought for democracy in South Africa may now be undermined.
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We focused on lots of issues. One big one, the country's police force and how, with little faith in South Africa's Men in Blue, some people are being forced to take the law into their own hands.
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Tonight, it's the turn of the media and the alleged attempts to muzzle it. As Robyn Curnow reports, some journalists believe their freedom to report the truth is under attack and there are fears that a controversial new bill would make uncovering corruption almost impossible.
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ROBYN CURNOW, CNN CORRESPONDENT (Voice-over): Wearing a red jacket like a protective suit of armor, 25-year-old newspaper reporter, Gwalisile Khanyile, looks at her latest front page scoop.
Inside are revelations about corruption, nepotism and secret slush funds in South Africa's police.
CURNOW: What was the fall out from you writing this article.
GWALISILE KHANYILE, REPORTER, SOUTH AFRICA'S "THE INDEPENDENT": I had agents following me around. I would lock my door in the morning. When I come back, the door would be unlocked. They were phoning my family and friend, even family friends, threatening them. And they made sure that I was alienated by everyone.
CURNOW: Often, the intimidation is in broad daylight. Here, undercover police are seen taking away a reporter from the South African "Sunday Times". He's held in secret for more than 16 hours before being released, never charged with a crime. He continues to expose government corruption.
So, too, does editor Nic Dawes and his team at the "Mail and Guardian". His newspaper remember only too well the day of the censorship here.
From your archive, newspaper from 1986 -- perfect example of Apartheid censorship.
NIC DAWES, EDITOR, SOUTH AFRICA'S "MAIL AND GUARDIAN": That's right. This is the Apartheid government attempting to ensure that South Africans don't know about what they're doing in their violent crackdown on protests across the country.
And the editor of the "Weekly Mail" showing South Africans that they're not allowed to know by blacking out the newspaper.
CURNOW: He worries that blacked out pages and imprisonment for journalists exposing government secrets are now a very real possibility again.
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"Take a stand," says this advert, warning citizens of a so-called Secrecy Bill. The ANC says it's to protect state secrets. Journalists say it will muzzle press freedom.
Because journalists or whistleblowers could be jailed for up to 25 years if they even possess classified information.
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DAWES: What's very clear is that South Africans understand and remember what it was like to live in a situation when national security was used as an excuse to keep from people information that they needed in order to exercise and realize their rights.
So, very clearly, I think we may end up in a situation again where we have to show people what we're not allowed to tell them.
CURNOW: The ANC wants to protect more state secrets. The media, Gwalisile Khanyile says, are willing to pay a high price for an open society.
KHANYILE: If it means going to jail for 25 years then so be it.
CURNOW: Why. Why will you do it.
KHANYILE: You know, I love my country so much and all these things -- this corruption, this looting, these manifestations (ph) -- it's just destroying our country.
CURNOW: For now, it's the media versus the ANC and the standoff is not yet over. Robyn Curnow, CNN, Johannesburg, South Africa.
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MANN: We have some good news for the media in South Africa. The ruling ANC has suggested changes to the bill which would allow classified information to be published but only when it uncovers criminal activity.
Journalists we've spoken to say that while that's a step in the right direction, corruption would still go unchecked. We're joined now from Johannesburg by ANC Spokesperson, Jackson Mthembu. Thanks so much for being with us.
Is it clear to you, is it clear to ANC, is it clear to the people of South Africa that the government was just overreaching with this bill. Is everyone breathing a sigh of relief including the ANC.
JACKSON MTHEMBU, SPOKESPERSON, ANC: Well, thank you very much for having us. First of all, the ANC has no intention of covering corruption with any piece of legislation, including that piece of legislation under discussion.
Therefore, that's why that piece of legislation is being handled by Parliament and Parliament is making various sweeping changes to the original piece. In fact, there have been many sweeping amendments that have been made to that piece of legislation.
And now, again, our Parliament has made other amendments to the legislation so that, indeed, there cannot be, by any stroke of imagination, a possibility of people being stopped from reporting about corruption, reporting about criminality.
So, indeed, the ANC in Parliament is dealing with that matter. But you'll also know that that bill is still a bill. It has not been passed as an Act of Parliament. We also have at South Africa, a constitutional court. If that bill cannot subscribe to the provisions of the condition, definitely, it will not pass the scrutiny of our constitutional court.
Therefore, we are very confident in South Africa and at the ANC that there is no bill that can be passed by our Parliament that will be against the rights that the press enjoys. And that will also be against the rights of the South African people.
MANN: You mentioned the constitutional court which is such a timely thing to bring up because people are afraid that the ANC is hostile to the constitutional court. The President himself has made some statements which suggests he would like to undermine its authority.
All through this week, we've had some really remarkable reporting on a range of issues that really cuts to something many people in South Africa feel -- that they are disappointed that the ANC really hasn't given them the protection of the country's laws. It hasn't given them the services. It hasn't given them the transparent government. It hasn't given them the full democracy that they were expecting.
So, let me ask you, as a leader of the ANC, are the people you run into, are your own members disappointed with the government that the ANC is providing.
MTHEMBU: They definitely are not. In fact, let's just start with their protection. You will know that we are one of the few countries, probably, in the world that have got institutions that are provided by the constitution. That's a false democracy.
Those institutions and organizations are independent of the state. They are, amongst others, the public protector, who does her work without any fear of paper. And any person in the public domain can uphold the public protector to investigate any government minister or any department.
And she has done a sterling work as well. But, again, apart from the public protector that is provided in the constitution, we have got the auditor and we've got a myriad of institutions that's a part democracy. Therefore, our democracy --
MANN: A number of institutions and the laws are remarkable but I'm just curious about the larger issue which is, so many South Africans are telling and I'm wondering if they're telling you that there are still not enough johns. There's not enough plumbing. There's not enough running water. There's not enough electricity. There's not enough of the things that they thought the ANC would bring.
MTHEMBU: We are fighting a legacy of over 350 years of oppression and neglect. That started with colonial rule where, indeed, some people in other countries were party to this situation that we find ourselves in.
And our democracy is only 18 years old. Therefore, for all of us to deal with neglect and oppression and discrimination -- if in around these issues that you are raising, of over 350 years within 18 years, is a little bit of a challenge.
But, indeed, you can ask people of South Africa, in the 18 years we've done a lot with regard to bringing water where there was no water before. In the former homelands, we have brought electricity where there was no electricity before.
We agree with you. There is still a lot that we still have to do. Taking on board the bad lucks (ph) that have been there when we took over in 1994. But having said that, you talked about the constitutional court, we respect the constitutional court. In fact, there is a desire within government and there is a discussion now of making the constitutional court the Apex Court in South Africa.
MANN: And also the debate rages and so, we'll have to have you back on some other time to talk about it. For now, Jackson Mthembu of the ANC, thank you so much for joining us.
You're watching CONNECT THE WORLD. When we come back, take the precision class for music, mix it with the sensuality of Tango. What do you get. Find out in our "Fusion Journeys", next.
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Welcome back. She's considered one of the greatest classical violinist in the world. But throughout her career, Sarah Chang has never had to experience the intensity of Tango dancing until now. Take a look at this.
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SARAH CHANG, CLASSICAL MUSICIAN (Voice-over): My name is Sarah Chang. I'm a classical violinist. I've traveled to Buenos Aires to learn all about the Tango -- the culture, the music and the dancing.
I think Tango is an art form. I think it mirrors a human's emotions and the relationship between a man and a woman. And I also think that it overflows into the music-making. I don't think it's so much about rhythm and rigidness and the being on time and doing everything perfectly.
I think it's more about being free and letting your emotions flow over and just, sort of, playing with the audience and having fun. And I think it's much more of connecting to a certain type of music.
My journey is ending tonight at the Buenos Aires Club. We're playing a new version of a work by the famous Tango composer, Carlos Gardel, called "Por Una Cabeza". We're integrating classical elements into this arrangement so I can bring some of my own personal style to the performance as well.
I think, one of the differences between a classical concert and playing in a Tango club is that in a ----- you're on stage and the lights are incredibly bright and there's this respectful distance between the performer and the audience. And, of course, you connect on an emotional level but there's that sheer distance between you.
But in a Tango club, you're all together and the audience is right in front of your face. And they're feeling -- they're feeling every breath that you're taking.
UNIDENTIFIED MALE (through translator): We have invited an important guest. We are going to bring together the worlds of classical music and Tango. And so, big applause, for Sarah Chang.
CHANG: The musicians that I got to work with this week, they showed me that it's not so much about being so not perfect and getting everything so completely connect like a team (ph) but more about feeling and emotion and connecting with your audience and we were just being moved by the moment.
For me, this journey has been truly humbling. And I just had so much fun. I'm still on a -- and I'm really not (inaudible) right now.
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MANN: They're fascinating and fun. You've got to love them. Check out who we'll be profiling next week on "Fusion Journeys". Get a sneak preview at cnn.com/fusionjourneys.
I'm Jonathan Mann and that was CONNECT THE WORLD. Thanks for watching us. The world headlines are next after this short break.
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