Return to Transcripts main page


Julian Assange's Appeal; Phone-Hacking Scandal; Operation DNA?

Aired July 12, 2011 - 08:00:00   ET



I'm Kristie Lu Stout, in Hong Kong.

Julian Assange is back in a London court and back in the spotlight, as the founder of WikiLeaks appeals an extradition ruling.

Now Britain's police are facing embarrassing questions as the fallout from the "News of the World" phone-hacking scandal continues to grow.

And we'll tell you about an alleged plot to capture Osama bin Laden's DNA.

Right now, lawyers for WikiLeaks founder Julian Assange are arguing against his extradition to Sweden. This latest chapter of a lengthy legal saga is playing at London's High Court.

Assange has spent 217 days under virtual house arrest, but has not been charged with any crime. Sweden wants to question him about allegations of sexual misconduct there. A British judge ordered his extradition to Sweden back in February, and Assange is now appealing that ruling.

Now, Assange has claimed the allegations against him are politically motivated, and the case is not related to his Web site. But let's remind you what WikiLeaks is all about.

Now, it launched back in 2006, and it made international headlines in April of last year with this video. The secret tape, it shows a 2007 U.S. helicopter attack in Iraq. It killed two Reuters journalists and a dozen Iraqis.

WikiLeaks claims it has released more classified intelligence than the rest of the world press combined. And the first big dump, it came in July of last year. The site published more than 70,000 classified documents on the war in Afghanistan.

And in October of that same year, the site published almost 400,000 classified documents on the war in Iraq. And they raised questions about the number of civilian deaths and the treatment of detainees.

And that was followed by what's known as Cablegate. Now, starting in late November, WikiLeaks started publishing more than 250,000 secret U.S. embassy cables, and those diplomatic cables have been credited with contributing to the uprising in Tunisia. In fact, the U.S. ambassador wrote about the excess of President Ben Ali and his family and revealed growing public anger with the government.

Assange was arrested in December, shortly after those diplomatic cables starting coming out. And Atika Shubert has been following all the twists and turns of the case. She joins us now live from outside London's High Court.

And Atika, what is the latest on his appeal?

ATIKA SHUBERT, CNN INTERNATIONAL CORRESPONDENT: Well, the hearing is still going on. They'll probably take a break for lunch soon. But basically, his new legal team is making two main arguments.

The first is that the European arrest warrant, which is what Sweden filed, they say is an inaccurate description of the allegations. And that has sort of misled a lot of the judges and their rulings in this case.

The other point that they're making is they say that there's basically been a sort of a mismatch between Swedish law and British law, that these allegations of sexual misconduct in Sweden would not have been crimes here in Britain. And that is something that his lawyers are saying the judges have to consider when deciding whether or not Julian Assange should be extradited.

Now, this hearing today is expected to go on for two days, so we probably won't get to the bottom of it today. But it is still ongoing, so we'll have to see not just what Julian Assange's lawyers say today, but what the prosecution says later on.

STOUT: Now, Atika, if this High Court appeal is not successful, what will Julian Assange and his legal team do next?

SHUBERT: Well, he does have one more chance for an appeal if it doesn't work this time. He can appeal to the Supreme Court, but that will be his final chance there. But again, this is just one step in the process, so it's not like we're going to see him extradited to Sweden anytime soon.

STOUT: OK. Now, Julian Assange, he's been on bail since December. What are the conditions of his bail and what has life been like for him, the WikiLeaks founder?

SHUBERT: Well, he's basically been staying in a country mansion in the English countryside. It belongs to a friend of his. And that's his residence while he's here.

He is under house arrest. He has to where an electronic tag. And he's basically monitored wherever he goes. He also has to report every day to his local police station.

So he really does have some quite strict conditions to his bail. He is restricted where he goes. And according to Julian Assange's other members of WikiLeaks, they say this really sort of infringes upon their working from WikiLeaks. It makes it much difficult for them to do the work that they say they want to do.

In the meantime, WikiLeaks has slowly been putting out some of the leaked diplomatic cables that you talked about earlier, but the kind of huge exposes that were promised such as documents on Bank of America, those have not appeared yet -- Kristie.

STOUT: Yes, thanks for reminding us about that.

Atika Shubert, joining us live from London.

Thank you, Atika.

Now, the scandal rocking Rupert Murdoch's News International is spreading. There are new allegations a reporter tried to bribe an officer to obtain the phone numbers of British royals. And there are new claims that reporters at two newspapers illegally obtained information on former prime minister Gordon Brown -- his finances, his family, and his son's illness.

Now, Brown says he is shocked by what he called the level of criminal and unethical behavior, and he says he's working with investigators.


GORDON BROWN, FMR. BRITISH PRIME MINISTER: I think what happened pretty early on in government is that "The Sunday Times" appear to have got access to my Building Society account, they got access to my legal files. There's some question mark about what happened to other files, documentation, tax and everything else.

But I'm shocked. I'm genuinely shocked to find that this happened because of the links with criminals.


STOUT: The former prime minister's wife, Sarah Brown, responded on Twitter. And she writes this: "So sad to learn all I am about my family's privacy -- it's very personal and really hurtful if all true."

Now, police said that they found thousands of potential targets in the "News of the World" phone-hacking scandal. And as CNN's Brian Todd reports, breaking into someone's voicemail might be easier than you think.


BRIAN TODD, CNN CORRESPONDENT (voice-over): For "News of the World" reporters to have allegedly hacked into the voice mail of murder victim Milly Dowler, of celebrities or terror victims, experts say they wouldn't have to be experts.


TODD: In speaking with telecom and cybersecurity experts, we picked up three basic techniques hackers can use to get into your voice mail. First, they can dial into your voicemail network, keep trying default pass codes like 1111.

ROBOTIC VOICE: Enter password and pound sign.


ROBOTIC VOICE: Log-in incorrect. Try again.

TODD: Many cell-phone providers give users default pass codes to retrieve voice mails, and many users either never bother to change them or change them to bad pass codes like their birthdays, information that can be obtained from places like Facebook.

We spoke with Anup Ghosh, founder of Invincea, a cybersecurity company.

(on camera): A second method for hacking into someone's voicemail is to spoof your phone number to make someone's voice mail think that it's their own phone accessing the voice mail. To do that you sometimes can go to a Web site that lets you get a spoof phone number. And Anup Ghosh and I are going to do that.

(voice-over): We buy a spoof account on, a legitimate Web site for pranksters. It allows us to call any number we want, make it seem like it's coming from any number we want. Then, from another phone, we call Anup's cell phone, disguised as his own number.


TODD (on camera): Ignore the call.


GHOSH (via phone): This is Anup Ghosh. Please leave a message. I'll return the call when I can.

TODD: You hit star.

ROBOTIC VOICE: You have one unheard message.

TODD: So we were able to hear your voice mails just now, a very simple process if you just dial a series of numbers.

GHOSH (on camera): That's absolutely right. I have a PIN set up on my voicemail account, but if I'm dialing my voicemail account from my phone, I get straight into it.

TODD (voice-over): Some carriers require you to give a pass code to access your voicemail from your own phone. Some don't, making it easier for hackers. A third method to hack into a voicemail --

MAHAFFEY: They can call your network operator and pretend to be you and say that they lost your password and that they need to get access to your account, supplying information such as your Social Security number, your date of birth, and your mother's maiden name, and they would be able to get access to your full account.

TODD: So how do you protect yourself? Experts say you can call your carrier and set a pass code for your account itself, so that even if a hacker knows a lot of that personal information about you, they don't know that pass code.


Brian Todd, CNN, Washington.


STOUT: Now, ahead on NEWS STREAM, 10 weeks after U.S. forces killed Osama bin Laden at his compound, a doctor is in Pakistani custody for allegedly having helped the CIA try to collect DNA. Confused? We'll explain the connection.

And Russia's Volga River is the site of a tragedy and now an investigation.


STOUT: Welcome back.

The latest suspected U.S. drone strike in Pakistan has targeted what was believed to a militant hideout near the Afghan border. Thirteen alleged militants have been killed.

Pakistani intelligence officials say the drone fired four missiles in the Shawal area of South Waziristan. And on Monday, a similar attack killed 10 suspected militants in North Waziristan.

Ten weeks after U.S. forces killed Osama bin Laden in Pakistan, Pakistani forces have detained a doctor suspected of having helped the CIA ahead of that operation.

Reza Sayah joins me now with more, live from CNN Islamabad.

And Reza, what exactly is this doctor accused of doing?

REZA SAYAH, CNN INTERNATIONAL CORRESPONDENT: Well, here's what we know, Kristie.

A Pakistani intelligence source has told us today that this Pakistani doctor is in custody. It's not clear if they're going to charge him with a crime.

What we do know is that he's been suspected of helping the CIA with a plot to locate and confirm the whereabouts of Osama bin Laden. And these are fascinating details.

According to this intelligence source, this doctor staged a fake vaccination campaign and advertised free shots and free vaccinations to the people and children of Abbottabad, where this Bin Laden compound was located. According to the British paper "The Guardian," he had hired two nurses, two female health workers, who were going around from house to house. And the plan was to get to the Bin Laden children, extract some blood from these children, or use the syringes from these vaccinations to match their DNA samples with DNA samples from Bin Laden's sister, who had passed away in Boston, Massachusetts, last year.

Now, we haven't been able to independently verify that these two nurses managed to get into the Bin Laden compound, but today (INAUDIBLE) who told us that, indeed, late in April, there were these two nurses going around from house to house, administering these vaccinations. We actually spoke to one woman who said she accepted one of the vaccinations.

One U.S. official has told "The Guardian" paper that, indeed, this plan was in place, but it didn't succeed in getting the appropriate DNA samples. So a lot more information that we're working on gathering, but it certainly drives home how complicated this plot was and the lengths the CIA went to, to locate Osama bin Laden back in May.

STOUT: Yes, that's for sure. I mean, if true, this is an incredible rouse to confirm the identities of the people who were inside that compound.

Now, news of this fake vaccination drive, along with yet another suspected U.S. drone strike, will only further sour the relationship between Pakistan and the U.S.

Reza, your thoughts on the diplomatic fallout from all of this.

SAYAH: Well, it's negative. This relationship is poor. It's already in the tank. And certainly these drone strikes, this news of the arrest of this Pakistani doctor when he was helping -- allegedly helping the CIA, is not going to help relations.

Talking about those drone strikes, another one today, another one yesterday. A total of 23 suspected militants killed.

Pakistanis, the public here, despise these drone strikes. They accuse them of killing a lot of civilians. Of course, it is incredibly difficult and oftentimes impossible to verify if they're indeed killing suspected militants or civilians.

Despite the controversy, despite the poor relationship between Pakistan the U.S., it's clear that the Obama administration is pressing ahead with these drone strikes, more drone strikes than ever, under the Obama administration, as we listen to the call to prayer here in Islamabad -- Kristie.

STOUT: And thank you for that explanation there.

Reza Sayah, joining us live from the Pakistani capital.

Thank you, as always.

Now, the Taliban are claiming responsibility for the shooting death of Afghan President Hamid Karzai's half-brother. Officials say Ahmed Wali Karzai was hosting a gathering at his home in Kandahar earlier on Tuesday, when a guard shot and killed him. The Taliban say the guard was working for them.

Ahmed Wali Karzai was the Kandahar provincial council chief. And a cable leaked last year by WikiLeaks said he had once claimed to be the most powerful official in Kandahar. And according to the same cable, Ahmed Wali Karzai denied allegations that he was selling narcotics.

Now, let's go back to one of our top stories, the scandal rocking Rupert Murdoch's News International and how it's spreading. There are claims that reporters at two papers illegally obtained information on former prime minister Gordon Brown.

CNN's Dan Rivers is live outside the British parliament at Abingdon Green in London. He joins us now.

And Dan, I understand that senior police officers are facing questions from British lawmakers. What's the latest?

DAN RIVERS, CNN SR. INTERNATIONAL CORRESPONDENT: Yes, that's right. This is a committee of parliamentarians who are questioning the police officers who are currently in charge of this investigation and who were in charge of it in the past.

They're asking them detailed questions about why they didn't realize how widespread this was when they did their initial investigations. Peter Clarke, the deputy assistant commissioner, is being questioned at the moment. He launched the initial probe into allegations that members of the royal family were having their phones hacked into, their voicemail messages hacked into.

That resulted in one tabloid journalist and a private investigator being imprisoned. And Peter Clarke was basically saying at the time, we were very focused, we wanted to go after these particular individuals connected with the royal family. There was no suggestion at the time that it was bigger than that, and therefore they didn't look at the wider picture.

They had 11,000 files from one of the private investigators, Glenn Mulcaire, that they had to go through. Now we know those files contain the names of lots of other people, from former prime ministers, the current chancellor, the finance minister here, to pop stars, celebrities, murder victims, terrorist victims. The list goes on and on.

Back then, according to Peter Clarke, they were solely focused on looking at who had hacked into the royal family's voicemails, and they say they prosecuted those two individuals.

STOUT: Dan, we heard earlier the reaction from Gordon Brown, the former British prime minister. He said he is shocked by the level of criminality. But what is the reaction from News International? How is News International responding to all these allegations?

RIVERS: Well, they are saying with regard to the allegation that "The Sun" newspaper, another News International title, obtained the medical records of Gordon Brown's son Fraser. They're saying they gained those records legally, without any -- sort of breaking the law, from a tip-off, basically. Someone rang them with the information. And they're saying when it comes to the other allegations, suggestions that they tried to obtain bank details and so on, well, they're saying we'll looking into it, provide us with the evidence.

Their critics will say look, they have at every twist and turn in this police investigation sought to obstruct. That's what the police have been saying all this morning in evidence before these politicians, that "News of the World" have consistently withheld evidence, not cooperated, and so on. So they are coming under an enormous amount of flak.

But the big picture here is now this is no longer confined to one News International newspaper. It's now involving "The Sun" and the world respected "Sunday Times" as well.

STOUT: And Dan, I know you're keeping an eye on the political fallout. How is Labour using this scandal to undermine the government's credibility?

RIVERS: Oh, Labour are absolutely reveling in this. I passed one senior Labour figure earlier on this morning who had a big grin on his face and saying how Ed Miliband had a fantastic week -- he's the Labour leader, leader of the opposition here -- because they have got this Achilles heel that they can go for the prime minister, David Cameron, with that he hired Andy Coulson, the former tabloid editor of the "News of the World."

He was taken into the heart of Downing Street as a communications adviser. And it's now emerged that numerous people warned the prime minister not to do this, that there was evidence against Andy Coulson, that it would be risky, that it would backfire.

The prime minister has said that it was his decision and his decision alone, and that decision now appears to have backfired spectacularly, with Labour consistently challenging the prime minister about his lack of judgment in hiring Andy Coulson, knowing now that what we know is that he was questioned on Friday for about nine hours and the police continue to look into his role as to whether he sanctioned this not only phone hacking, but bribing police officers as well, to by information on the royal family.

STOUT: Dan Rivers, joining us live from London.

Thank you, Dan.

Growing allegations of illegal activity at Rupert Murdoch's News International papers are already having an impact on his bid to take over the satellite broadcaster BSkyB. Now, News International says it is withdrawing plans to sell off its Sky News Channel. That had been part of the BSkyB acquisition plan.

Britain's media secretary is now asking that the deal be reviewed by the U.K.'s Competition Commission, which could put off a decision for months. And the deputy prime minister, Nick Clegg, has urged Murdoch to reconsider the bid because of public revulsion at the scandal.

Still ahead here on NEWS STREAM, tragedy on the Volga River. Dozens of people are still missing after a tourist boat sinks in Russia. And we'll hear from the survivors.



Russians are observing a day of mourning for the victims of a river disaster. Services are taking place across the country. Flags are flying at half-mast.

At least 71 people were killed when a tourist boat sank on the Volga River. As Colleen McEdwards tells us, dozens more are feared dead, and many of them children.


COLLEEN MCEDWARDS, CNN INTERNATIONAL CORRESPONDENT (voice-over): Tragedy strikes Russia. What was to be a holiday cruise turned deadly for so many. The tourist boat Bulgaria sank in what seemed like no time at all on Sunday in Russia's Volga River.

UNIDENTIFIED MALE (through translator): The vessel sank within three minutes. There were no announcements. It flipped to the right side, swerved, and went down. There were no explosions, nothing.

We were literally thrown out. That's how we survived.

MCEDWARDS: Rescued and distraught, so many passengers were on vacation with their families. Now so many loved ones are gone, and many of them are children.

UNIDENTIFIED MALE (through translator): Our whole family was on that ship. We lost everybody, my wife and grandchildren.

MCEDWARDS: It is a long, terrifying wait for any news about the missing. More than 200 people were on board, and tensions rise on land as the time passes.

UNIDENTIFIED FEMALE (through translator): We are telephoning everyone, trying to learn anything about our dear ones. We called the police, but they said to contact the search and rescue service. We did, but there was no reply.

So we came here to find out at least something. But even here, nobody knows anything. My niece was there.

MCEDWARDS: Divers search the sunken vessel. More bodies surface, but the teams focus on the survivor stories.

MARAT RAKHMATULLIN, RUSSIAN EMERGENCY MINISTRY (through translator): Yesterday, some people made it to the shore on their own by swimming. There were such cases. The police found them and brought them to Kazan.

MCEDWARDS: During a meeting with economists on Monday, Prime Minister Vladimir Putin spoke about the victims.

VLADIMIR PUTIN, RUSSIAN PRIME MINISTER (through translator): It's a great trouble, people who were having a vacation together with their families and children. Today, it has become clear that dozens died. I am sorry, and I would like to convey the words of support to the victims and to the families of those who have lost their loved ones. Let's pay tribute to their memory.

MCEDWARDS: Putin stood in silence. President Dmitry Medvedev announced an investigation and declared Tuesday, July 12th a day of mourning in Russia.

DMITRY MEDVEDEV, RUSSIAN PRESIDENT (through translator): It is clear even today that such a tragedy would not have happened if safety rules and technical regulations had been observed, even in foul weather.

The Russian prosecutor's office says the ship did not have a license to transport passengers. It was overloaded. It was last repaired more than 30 years ago.

The investigation may find the reason for this tragedy, but for those who mourn, nothing is going to bring back their loved ones.

Colleen McEdwards, CNN, Atlanta.


STOUT: Many people suffering there in Russia.

Now, up next here on the program, we'll take you to Libya. And according to some of Gadhafi's soldiers, the regime is unraveling. And we'll tell you what they're saying.

And the U.S. blasts the leader of Syria, saying the government is stirring up anti-American sentiment. But now Damascus is firing back. We'll bring you the latest.


STOUT: I'm Kristie Lu Stout, in Hong Kong.

You're watching NEWS STREAM, and these are your world headlines.

Now, we have this in to us. Rupert Murdoch and his son James have been asked to testify before British lawmakers on Tuesday. Lawmakers in London are already questioning some of Britain's most senior policemen about why they did not investigate evidence of phone hacking sooner.

Now the former prime minister Gordon Brown is the latest high profile figure to be named as a potential victim of illegal conduct at News International. The Guardian newspaper says The Sun and The Sunday Times obtained private information about his finances and his son's illness.

Now the half-brother of Afghan president Hamid Karzai, Ahmed Wali Karzai has been shot to death at his home in Kandahar. The provincial governor's office says one of his body guards shot him and the Taliban are claiming responsibility.

Now lawyers for WikiLeaks found Julian Assange are arguing against his extradition to Sweden. Now he faces questioning on sexual misconduct allegations. Assange denies the accusations, describing them as part of a smear campaign and calling them politically motivated.

Now to Libya now where we are getting rare insight into the state of Moammar Gadhafi's forces. Now some Libyan soldiers now in rebel custody say the Libyan army is falling apart. Ben Wedeman reports from the rebel controlled town of Zintan.


BEN WEDEMAN, CNN INTERNATIONAL CORRESPONDENT: Modern, well-armed, professional army is what appears frequently on Libyan state television, but Libyan prisoners of war recently captured by rebels in the western mountains paint a different picture.

Opposition fighters are holding more than 100 Libyan army soldiers and officers in this school in Zintan. We've blurred their faces at their request over fear of reprisals against relatives living in areas still under Moammar Gadhafi's control.

The prisoners speak of shortages of fuel, food, and ammunition, of a Libyan army beginning to fall apart.

Mohammed, a naturalized Libyan from Mali, was captured by rebel fighters in Goalish (ph) last week.

"The morale of the army for a while now is gone," he says. "In all units, there have been many desertions."

"More than half of the men in my unit deserted," says 30 year old Jamal, a captain.

All of the men we interviewed said they had no desire to fight. And several referred to special units, many composed of naturalized Libyans from sub-Saharan Africa whose job it is to kill anyone fleeing the front.

"Whoever retreats is shot," says Khalid (ph), an 18 year army veteran. "We're not to retreat. We had to advance."

Mehdi (ph), originally from Niger, was part of one of those units.

I understand your job was if any Libyan fled from the front lines to shoot him. Is that correct I ask him?

"Correct," he responds.

That was your job. So you were there with a Kalishikov. And if you saw any Libyan running away from the forward positions you would shoot him? I ask again to make sure we understand one another.

"That was our job," he answers.

Did you shoot anyone? I ask.

"No. I didn't shoot anyone," he says.

In recent weeks the rebels in the west have captured heavy weapons and new ground from Gadhafi's forces, pushing back an enemy that appears to be losing the will to fight.

Ben Wedeman, CNN, Zintan, Western Libya.


STOUT: Now the U.S. says Syria must protect diplomats and embassy property, that comes after pro-government demonstrators mobbed Washington's embassy in Damascus on Monday. Now the pro-government crowd, they broke windows and spray painted walls. Some tried, but failed to get inside the building. U.S. officials say it is the third such attack in four days. And no injuries have been reported.

And another groups descended on the French embassy, burning flags and destroying vehicles.

Now a spokesman for the U.S. State Department blamed Syria's state run media for inciting the violence. Now the U.S. Secretary of State Hilary Clinton stopped short of calling on President Bashar al Assad to step down, but she made it clear that the U.S. does not want him to stay in office.


HILARY CLINTON, SECRETARY OF STATE: President Assad is not indispensable. And we have absolutely nothing invested in him remaining in power. Our goal is to see that the will of the Syrian people for a democratic transformation occurs.


STOUT: Now Damascus is now responded to Clinton's remarks, condemning them as, quote, "an act of incitement."

Now a national dialogue conference in the Syrian capital has entered its third day, but few opposition members have shown up for these state sponsored talks. Arwa Damon has more from Damascus.


ARWA DAMON, CNN INTERNATIONAL CORRESPONDENT: "We have to admit that without the huge sacrifices of the Syrian people, the bloodshed both civilian and military in more than one province, such a meeting would not have happened."

That admission, part of the opening remarks by the Syrian vice president who also acknowledged that the highly touted national dialogue conference was taking place in an atmosphere filled with doubt and suspicion.

A significant trust deficit that the government says it's beginning to repair.

BOUTHAINA SHAABAN, SYRIAN PRESIDENTIAL ADVISER: I think if you talk to these young men and women inside when I left this noon many of them told me this is the first time we truly believe that the government intends real and radical reform.

DAMON: On the first day of the conference, more than 90 people spoke out, a clear indication that there are many here who want their opinion heard. Being debated inside, how to implement the various reforms promised by the president to include how to set up a multi-party system, a new electoral law, revisiting or perhaps even rewriting the entire constitution, and a new media law that would allow for more freedom. The government says that this is the first step towards a new and democratic Syria.

But the majority of the opposition says this conference is a farce. Real dialogue cannot begin until the violence ends.

Activists say that more than 1,400 people have been killed since protests began in Syria around four months ago. It was the pressure exerted by those chanting for freedom and the end of the regime that led to this conference. But they are not represented. Refusing to talk to a government they say that continues to slaughter them.

Most prominent figures also boycotted like Louay Hussein. He has good reason to doubt the government's intentions. He spent years in jail for voicing dissent.

LOUAY HUSSEIN, OPPOSITION MEMBER (through translator): Just last week when they were inviting us to this conference, at the same time they detained tens, killed tens despite their invitation for dialogue. The government has not proven that it is serious about dialogue or political resolutions.

DAMON: The government insists it is, blaming the violence on armed gangs.

SHAABAN: There's nothing we want more than to wake up tomorrow morning and find no violence in Syria and no bloodshed in Syria -- no bloodshed in Syria. But I think this requires everybody to participate and to believe that it is (inaudible).

DAMON: Al Tayyeb Tisini, an opposition figure who did attend tells us he came with a single purpose, to hear the government's answer to one question.

AL TAYEB TISINI, OPPOSITION MEMBER (through translator): Do you really have a program of reforms, or are you buying time to continue on your path of tyranny.

The government always says yes to reforms. This yes should be translated into reality.

DAMON: Arwa Damon, CNN, Damascus.


STOUT: And we will get a world sport update next as Argentina finally turned on the style at the Copa America. Don Riddell will have all the highlights next.


STOUT: Welcome back.

Now world stocks are taking a beating on Tuesday. And the euro hit a four month low against the dollar. As you can see, the markets across Europe are down for fear of contagion in the Euro Zones debt crisis is sending shares lower, that after Italy's finance minister quit talks on the country's austerity plans.

Now Asian markets (inaudible) on Tuesday after report raised red flags at more than 60 Chinese companies. And there's reprieve across the Pacific, now U.S. futures point to a lower open for the Dow in the next hour as the debate over raising the U.S. debt ceiling drags on.

And there was no breakthrough at a White House meeting on Monday between the U.S. President Barack Obama and congressional leaders. At issue was the president's push to raise the U.S. debt ceiling.


BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I've been hearing from them that this is one of the things that's creating uncertainty and holding back investment on the part of the business community. And so what I've said to them is let's go.


STOUT: Now Republican leaders say that they won't approve any deal unless it includes spending cuts to offset additional debt. Now they are also refusing to pass any deal that includes tax increases.


JOHN BOEHNER, SPEAKER OF THE HOUSE: The American people understand that tax hikes destroy jobs. The last thing we should be doing right now at a time of 9.2 percent unemployment is enacting more government policies that will destroy jobs.


STOUT: Now Treasury officials warn that raising or failing to raise the $14.3 trillion debt ceiling by August 2nd could trigger a partial default on U.S. debt. So what happens if Congress can't come up with a deal? Don Foreman shows us the fallout from default.


TOM FOREMAN, CNN CORRESPONDENT: We're all hearing about trillions of dollars of government spending is very hard to keep track of, but it's easier to think of in terms of your own home. And fundamentally what you have to be aware of is if we went into default the concern is that it would upset the value of the dollar and interest rates, which as you know can affect almost anything.

It's just a theory. We've never been here before. This is what people are talking about.

For example, the value of your home. Interest rates could rise. That can mean that you pay for your mortgage, depending on the value of your house, where you're buying it, what kind of mortgage you get. Same thing can be true of cars. The cost of buying a car can rise. Gas prices could increase, because prices are increasing everywhere, that would be one of the things that would go up. Plus, the roads could be in poorer quality, frankly because if the government is having trouble paying for everything, they're not going to be able to do certain things.

Look at the breadwinners in the household here. Here's dad over here, let's say that he has a job. He has a chance of becoming unemployed obviously if his employer gets into trouble with money. He can be losing money on his retirement account. Plus, if he's trying to run his own business, he can have a very hard time getting a loan, because money tightens up in a circumstance like this.

What about mom. Let's say she works for the government. She can wind up furloughed obviously. Credit card rates could rise as well.

What about the daughter here? Let's say that she's in the military. Same sort of problem. Her salary could wind up being limited or delayed. She possibly could get IOUs from the government until they can work out all their problems. And, think about this, all the private contractors who supply things and services for her to do her job and for all sorts of government offices might layoff people because again those services, those things, maybe something the government simply can't afford.

What about the son over here, he's trying to go to college. Student loans could become harder to obtain. There could be restrictions on financial aid he hasn't seen before.

Even grandma down here could end up with Social Security delays, retirement benefits reduced. And here is the real trick in all of this, you may note that many, many of these elements are things that are also being talked about in trying to control the budget. So one way or the other we could be seeing elements of many of these things. That's why so many people here in Washington feel like homeowners across this country, average citizens, really are with them between a rock and a hard place.


STOUT: Tom Foreman there. And we will have much more in the next hour of CNN. World Business Today will have a complete market recap. Plus, all the early action as trading gets underway on Wall Street. That starts in about 15 minutes from now right here on CNN.

Now Argentina's Copa America campaign has been disappointing so far, but the hosts, they finally came to life on Monday. Now Don Riddell has all the highlights for us -- Don.


You know, hosting a major tournament really is supposed to be fun, but it's been a pretty anxious few days for Argentina. Last night, as you say, they finally put in a good performance, advancing to the quarterfinals with a 3- nil win over Costa Rica.

Lionel Messi was under the most pressure to repeat his club form for his country. And, after two draws in group A, he and his teammates did eventually step up. Nicolas Burdisso signaled onto Tino's (ph) intentions with a thumping head of midway through the first half. He was denied by the woodwork, but the hosts found a way through just before halftime.

Fernando Gago trying his luck from distance. And while the keeper saved it, Sergio Aguero was in position to put his team in front. That's always a great time to score, right before halftime.

And they didn't have long to wait for another goal. Seven minutes into the second half, Messi with a superb through ball, Aguero could hardly miss.

Argentina were getting into the grove now. And their fans were getting a glimpse of what they see every other week at the Nou Camp, Messi was given way too much time here and threaded it through to Angel Di Maria for a third goal.

That's how it ended, Argentina are through to the quarterfinals.

Colombia topped the group, though. Argentina progress in second place while Costa Rica must wait and see if they can survive by virtue of being one of the two best third-place teams.

Aguero, by the way, is the tournament's top scorer with 3 goals.

Meanwhile, the team's former player and manager, Diego Maradonna is recovering after a car accident in Buenes Aires. Maradonna and his partner were taken to hospital after his car crashed with a bus. The injuries are said to be minor. The crash is under investigation.

Now after a day off, the peloton is back on the road in the Tour de France, but the fallout continues from that spectacular crash on Sunday. Teams Sky says it is considering legal action after their rider Juan Antonio Flecha was hit by a television car. Dutchman Johnny Hoogerland was propelled into a barbed-wire fence and needed 33 stitches to treat deep gashes in his leg.

Onto boxing where the Klitschko brothers have been reflecting on Wladimir's recent and comprehensive victory over the British boxer David Haye. The Ukrainian siblings now hold six of the heavyweight division's belts. Wladimir told me earlier that a rematch with Haye was unlikely and for now he's just enjoying a job well done.


WLADIMIR KLITSCHKO, BOXER: It has been for more than two years the hassle between David Haye and us and there's been a lot of talk and there's been a lot of promises, some of them have been delivered from our side, the others not from the other side. So the fight was an amazing stadium in Germany and was a rainy day and it was a little bit complicated. And it was a lot of different fans and mentalities, because the fans came from the U.S., from the UK, from the former Soviet Republic, from Germany. So it was a lot of atmosphere and a lot of, you know, different mentalities in the same spot.

But it's -- I will never forget this fight.


RIDDELL: They're great boxers. They're great brothers. And you can see the full version of that interview on Tuesday addition of World Sport. 5:30 pm if you're watching in Central Europe or 11:30 pm where you are, Kristie.

STOUT: Well, thank you for giving us the preview there. Don Riddell joining us live in London. Take care.

Now up next call it an extreme endurance test, a CNN team battles the elements at an arctic camp where a small group of scientists are working to save the environment.


STOUT: Welcome back.

Now all this week we are previewing a going green special event. It starts Saturday when environmentalist and CNN special correspondent Philippe Cousteau takes us on an adventure to an ice cap in the Arctic Circle. Now this location is considered ground zero for climate change research. So it's no surprise that you'll find adventurist scientists coming and going.


PHILLIPE COUSTEAU, CNN SPECIAL CORRESPONDENT: Well, quite a bustling scene here. Everybody is in a great mood. We've got people bringing gear off, people putting gear on. We've got about seven people that are heading out of ice base back home to their families. So there's a lot of excitement.

So this is quite an experience, quite a wonderful opening to an amazing adventure.

It's an emotional good-bye for the first group of Catlin team members. As the DC-3 plane departs, it's our last connection to the outside world for nearly two weeks.

Our first taste of camp life is lunch, a get to know you session between camp veterans and new arrivals.

UNIDENTIFIED MALE: I'd like -- obviously just like to welcome you to the Catlin Ice Base.

COUSTEAU: After weeks at ice base, all of these scientists are now old hats at dealing with the frigid temperatures.

Now that we're acquainted with the crew, it's time to get acquainted with the camp and get settled in before evening sets in and the temperature drops.

Ice base is made up of four principle heated tents -- two science tents, a communications tent and a mess tent where meals are served. Lined up in a row, they lead to the unheated toilet and eight unheated two person tents surrounded by an electric fence to shock any nighttime prowlers.


STOUT: Now Phillipe Cousteau there with a preview of our going green special Extreme Science. You can see that here on CNN Saturday night, that's 9:00 pm here in Hong Kong, 5:00 in Abu Dhabi.

Now here in Asia, cyclone season is in full swing. And we look at the Pacific Ocean to see if there is any storm threat. Guillermo Arduino joins us with more on that -- Guillermo.

GUILLERMO ARDUINO, CNN WEATHER CORRESPONDENT: Temperatures are perfect for cyclone development, but there are some other characteristics that we need. And in this case we have it. So a newly formed tropical cyclone is here in the Pacific Ocean far away from land right now, but close enough to some islands. So we're going to look at in a second, because you know we get so much rain these days, and especially during these months because of the plum rains, this system does not go away.

So before I tell you anymore, let's roll video coming from two places. One is Hefei. And so we have a lot of rain in the last hour. So I'll give you the specifics in a second. And of course, because it's rain saturated, it's rained for so long, is that we get the floods.

So two places, Nanjing and Hefei in China getting rain. And the rain will continue to fall.

So, again, we have the moisture coming from the south here and also stationary boundary that affects not only China, but you see countries into the northeast again.

So that extremely heavy rain continues to be a possibility in the area.

Now if we add a cyclone to it, and that's what we see right now with tropical storm 8, the system will continue to move towards the west. Right now, we do not have a specific landfall when it comes to big masses, big land masses, but for the time being we have to look at it very closely because it continues to form and it's closer to areas that are already saturated with rain.

So again, the rain will continue as you see especially through the next days, and especially in these areas of China where we were showing you the video right now with more rain. And the Korean Peninsula with so much more rain, so it is a problem.

One of the cities that we were showing you is Hefei here with 73 millimeters only and you saw the floods over there. That's an indication that it's already saturated.

Also looking at more rain a little bit off the Korean Peninsula right now which is a relief in the next 48 hours. And no rain yet into Pakistan where we need it, because we are seeing these temps for Wednesday especially close to 40 degrees while other parts of India, especially farther south from Pakistan, we see the relief is already there. Not in Jaipur, though, but into Mumbai we do see it.

The temperature right now in Hong Kong is 29 degrees.

Let's do the city by city forecast and we'll see you in a minute.

So you see the monsoon will continue moving northward. For the time being, it's right there on the border between India and Pakistan. In Pakistan, they're waiting for it big-time.

So also, pay attention to the rest of tonight if you're in Asia or the rest of the day if you're in Europe. We'll be talking about the U.S. heat. It is getting to dangerous levels. So if you're coming here, you have to get ready. Coming up, more information on it.

And also, let me tell you that in Europe we see severe storms that are popping up and especially this is the turn for France. So it's going to cool down a little bit. But we have two areas in Europe where we are likely to see severe storms, especially so here in central to eastern parts developing due to this low pressure center. Now is the turn for northern France.

So these storms are bringing about normally severe delays at airports or (inaudible) delays at airports, but also it is getting to dangerous levels.

So that's pretty much the makeup of the situation right now. We'll continue to elaborate on it throughout our coverage on CNN. So stay tuned -- Kristie.

STOUT: All right. Strong warnings in many parts of the world. Guillermo, thank you very much for the update.

And that is news Stream, but before we go let's check out live pictures from the International Space Station. Now two ISF astronauts are getting ready for a spacewalk. And the crew of Shuttle Atlantis will help choreograph this excursion. Usually the spacewalkers spend the night in the station airlock before venturing outside, but they're using a new preparation technique, this is being done for the second time ever.

Now the space walk is scheduled to last six and a half hours. And it will be the last one in the presence of a shuttle crew. Atlantis, as we all know, is on its final journey. The very last mission for the program.

You're watching CNN.