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Your World Today

Societe Generale: Trading Scandal; Sources: Tentative Deal on Economic Package Reached; Thousands of Palestinians Enter Egypt for Second Day

Aired January 24, 2008 - 12:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

ISHA SESAY, CNN INTERNATIONAL ANCHOR: How much can one man do so much damage? That's what Societe Generale is asking after a midlevel employee racks up billions in bad trade.
JIM CLANCY, CNN INTERNATIONAL ANCHOR: Gazans continue to pour across a blasted border wall and into Egypt. Israel worries about what they may be bringing back.

SESAY: A day after a blast ripped Mosul apart, a suicide bomber targets those sent to investigate.

CLANCY: And think you've had a bad flight? Well, this sexy slap-fest is one of the hottest things on Thai television. But some fight attendants wish the show would go bye-bye.

It is 6:00 p.m. right now in Paris, 7:00 in the evening at the Rafah crossing.

Hello and welcome to our report seen around the globe.

I'm Jim Clancy.

SESAY: I'm Isha Sesay.

From Baghdad to Bangkok, wherever you're watching, this is YOUR WORLD TODAY.

It is one of the biggest banking frauds in history. And according to the bank, it all happened because of one man -- a 30- something trader just halfway up the ladder of France's second largest bank, Societe Generale.

What's more, the numbers are hard to even wrap your head around. Get ready for it -- $7.14 billion lost. Societe Generale says by one of the company's own through fraudulent trading.

Mark Eddo has more details.

(BEGIN VIDEOTAPE)

MARK EDDO, REPORTER, ITV NEWS (voice over): You're looking at a banking boss who really has some explaining to do. How could a young rogue trader go undetected long enough to rack up losses of more than 3.5 billion pounds? DANIEL BOULTON, CHIEF EXECUTIVE, SOCIETE GENERALE (through translator): During Saturday daytime we discovered the existence of a disguised position completely hidden behind our own books, but lodged in our area of market activities. This disguised position was immense and presented considerable risks to the bank.

EDDO: It's the biggest bank fraud by a single trader ever. Paris-based Societe Generale says the trader managed to conceal massive losses by creating fictitious stock transactions. The trader knew how to avoid detection because he used to work in back-room administration.

DAVID BUIK, MARKET ANALYST: I'm afraid it's like really a computer hacker. That if somebody really feels that he wants to get underneath the wire and has the ability to do so by being technically brilliant, I'm afraid in one in a million it is going to happen every now and again.

EDDO: Losses are more than three times the size of those racked up by Nick Leeson, the rogue trader who brought down Barings Bank in 1995. Banking chiefs gathered here in Davos for the World Economic Forum were amazed by the size of the losses this time. Global banking is still reeling from the subprime mortgage crisis, and this is another blow to confidence in the sector.

"I'm very surprised by this announcement. I think this is not good news, not just for Societe Generale, but also for banks in general. It can create doubt, but at the same time, in this period, we are making every effort to be transparent to give back confidence."

Most of Societe Generale's profits from its investment unit have been wiped out by the fraudulent losses. Shares have been suspended and its chief executive has offered to resign. But that was rejected by the board.

The bank has started legal action against the rogue trader and fired his managers. But the big question still remains -- this is supposed to be the new age of transparency and accountability in banking. So how could fraud on such a massive scale have gone undetected for so long?

Mark Eddo, ITV News.

(END VIDEOTAPE)

CLANCY: Our own Jim Bittermann is on this story in Paris right now.

Jim, tell us, what do we know about this 30-something trader? I mean, other than the fact that he is the worst trader on the planet?

JIM BITTERMANN, CNN SR. INTERNATIONAL CORRESPONDENT: He certainly racked up a lot of losses, that's for sure, James.

We had learned late this afternoon from several newspapers, including "The Wall Street Journal," who managed to confirm it from Societe Generale itself -- by the way, we have not been able to confirm that, but "The Wall Street Journal" has. They say that his name is Jerome Kerviel, 31 years old, a graduate of a university down in Leon.

He had been working at the bank since 2000, but here's the key -- his first five years were in the back office of the bank. That's the area where they look over the shoulders of the traders. And so he knew the procedures. He knew the control procedures.

So when he became a trader himself in 2005, he knew exactly how to trick the traders and cover up his losses that he was making. He was able to -- apparently, according to the bank chairman today, he knew the timetable, which apparently was key. And because he knew the timetable, he could finesse his personal books for the moment when he was being controlled and then go on and do more trading, and obviously incur more losses -- Jim.

CLANCY: All right. Jim Bittermann reporting live from Paris -- Isha.

SESAY: Well, Jim, up and down and up and down. The Dow has been on a roller-coaster ride these past few days, as each bit of good and bad economic news sends the market up and down, with Asia and Europe following every rise and fall right now.

As you can see, the Dow is up, it's at 12,331. But the big question many people are asking is, where will it go from there? That's what we all want to know. The Dow, you know, making losses of over 450 points at one point earlier on this week, but now you see it is now in positive territory, 12,328.

(STOCK MARKET REPORT)

SESAY: And we're hearing that the White House and congressional negotiators have already reached a tentative agreement on that economic stimulus package.

Kathleen Koch joins us now from the White House with the very latest.

And Kathleen, what are you hearing this hour?

KATHLEEN KOCH, CNN CORRESPONDENT: Well, actually, we're hearing those reports of a tentative agreement from sources on Capitol Hill who are familiar with the talks. Again, saying that a deal, a tentative deal, has been reached between the administration and lawmakers. But right now, House Speaker Nancy Pelosi, Minority Leader John Boehner, are working very hard to sell this tentative deal to their membership -- to Democrats, to Republicans.

Now, what sources are telling us the deal does entail is the Democrats gave up on their insistence that there be an increase in food stamps, that there would be an extension of unemployment benefits, while Republicans gave ground on their insistence that these tax rebates go only to people who were paying taxes. Now, that original plan would have excluded some 23 million Americans who are working, who pay payroll taxes, but simply done not earn enough to pay income taxes.

Now, how much would those rebate checks be for? Now, what we're hearing -- again, this is still tentative -- is it would be a maximum of $600 per individual, a maximum of $1,200 per couple. Both Democratic and Republican aides say that there would also be an amount per child given to families of $300 per child.

Now, clearly, none of this is set in stone yet. The Treasury Department is still working on these.

Negotiators are also hashing out details on tax breaks for businesses. Lots of different things they are looking at there.

But what we are hearing is that a press conference with Pelosi, Boehner, and then Treasury Secretary Henry Paulson, who has been deeply involved in these negotiations, that that will take place at some point this afternoon -- Isha.

SESAY: All right. Kathleen Koch there at the White House.

Though we must leave it, many thanks.

KOCH: You bet.

CLANCY: Let's shift our focus now to the Middle East.

No end in sight. For the second straight day, tens of thousands of Palestinians streaming across the border from Gaza into Egypt. Both Israel and the U.S. are urging the Egyptian government to take control of the situation.

Our own Ben Wedeman has just returned from the border between Gaza and Egypt. He joins us now from Gaza City.

Ben, the concern is not just what -- the fact that they are going across that border, but what they are bringing back. They are worried about cash, they are worried about arms.

What's the evidence on the ground?

BEN WEDEMAN, CNN INTERNATIONAL CORRESPONDENT: Well, what we saw today, Jim, was there are, in fact, more people crossing that border than there were yesterday. A real crush at the border really. We went on to the Egyptian side, and you could barely walk over there.

Now, what we are seeing them bring across -- what we are seeing them bring across is fairly mundane things -- mattresses, and cooking gas, and that sort of thing. But there are indications that the Hamas-led government here is suddenly flush with cash.

They have come out and said they are going to pay the salaries of the employees of the government here early, and that they're also giving a cash handout to the -- to many more than 8,000 farmers in Gaza. So, the Hamas government has more money than they did before, and the suspicion is that they have used this opportunity to bring in the cash.

Israel's also worried, of course, that they've used this opportunity to bring in weapons to allow some of their militants who are abroad to come out. We've heard Israeli officials say that they suspect other militants are leaving Gaza to go get military training in places like Iran and Syria, though there is no confirmation on that. And, of course, Hamas would deny it.

But certainly it appears there is no end as far as the opening of this border, despite the pressure from Egypt -- from Israel and the United States, who have been calling for Egypt to bring this situation under control. What we saw is that the Egyptian border guards continue to stand by and watch as this flow of humanity continues -- Jim.

CLANCY: Live from Gaza, Ben Wedeman.

And thanks.

SESAY: A tall duty in Iraq's badlands.

CLANCY: Coming up, U.S. troops trying to set up outposts in northern Iraq, but insurgents countered their every move.

SESAY: Also ahead, a U.S. ally in the war against terrorism gives a grim warning. Pakistan's president talks about the urgency of his country's fight against extremists.

CLANCY: Plus, attitudes at high altitudes. A television series about a fictional cabin crew ruffles feathers in Thailand. We'll tell you why.

(COMMERCIAL BREAK)

SESAY: Hello, everyone.

An Iraqi city already in mourning is reeling from a new attack.

CLANCY: The northern city of Mosul is under curfew at this time as officials there are vowing to hunt down those trying to terrorize the population.

SESAY: The U.S. military calls Mosul the last urban center where Al Qaeda in Iraq still has a strong presence. That group is being blamed for a bombing today that killed a top police chief and two other officers.

CLANCY: Now, the police chief and the officers were touring that site where there was a massive explosion a day earlier when an insurgent dressed up as a policeman blew himself up.

SESAY: Wednesday's blast killed at least 34 people and injured 224 others. Authorities say a weapons stockpile exploded just after Iraqi soldiers arrived there to investigate.

Well, our Michael Holmes got a first-hand look at just how dangerous Mosul can be. He was embedded with U.S. troops there and tells us what they are doing to make the city safer.

(BEGIN VIDEOTAPE)

MICHAEL HOLMES, CNN INTERNATIONAL CORRESPONDENT (voice over): Mosul, in northern Iraq, is a melting pot. Over a million Kurds, Shias and Sunnis sharing a vital piece of the Iraq puzzle. Much of the city is peaceful despite outbursts of violence as seen this week. But there are also pockets that look like battlefields, because they are.

UNIDENTIFIED MALE: Every time we come through here we get attacked -- small arms, RPGs. I had a pressure plate up here the other day. We always get pipe bombs on the road.

HOLMES: Captain Jerry Jones (ph) is part of an Army engineering unit building a combat outpost here to be shared by maybe 120 U.S. and Iraqi troops, trying to quiet a very noisy part of town. They're in the first hours of construction, and at their most vulnerable.

Parts of western Mosul are the wild west. And the area of Yabsat (ph) is the wildest.

UNIDENTIFIED MALE: Anything. I mean, you name it, it's happened in this area. I'm really surprised, knock on wood, that we haven't received indirect fire here.

HOLMES (on camera): Think it will happen?

UNIDENTIFIED MALE: Oh, roger. I'm expecting it any time.

HOLMES (voice over): He was right. Perhaps 30 minutes later, two RPG rounds fired at the COP. Neither did much damage.

The problem in Yabsat (ph) and some other pockets of the city are hard-core insurgents who escaped the troop surge in Baghdad and hope to set up shop here. Post-surge, Mosul has become a magnet.

In the months to January 14, there were 683 attacks in this area, but none inflicted casualties. The COP, so new it's not being named, is crucial to hunting out those insurgents. The first step -- finding the right location.

(on camera): It's not been easy. You see, when Army engineers drove around this area looking for likely locations, for the combat outposts, they'd take photographs and things like that. The insurgents would be watching and they'd come back later and blow the building up.

UNIDENTIFIED MALE: The joke is, if we want to take a building down, we don't have to do it. All we do is have to go out and take pictures of it and the insurgents will blow it up for us.

HOLMES (voice over): Across the road, evidence of that. And, in fact, the insurgents tried here, too, these two buildings hit by two car bombs. But still, they hope this remaining structure will in two weeks be enclosed, furnished, and home and workplace to those Iraqi and U.S. troops.

Large parts of Mosul give locals and soldiers some hope. Well- stocked stores open for business, and here, on the banks of the Tigris River, a bustling marketplace. "Business is OK," this young vegetable seller tells us. "Things are getting better slowly."

UNIDENTIFIED MALE: And then this afternoon, the concrete will get here and we'll put the key walls up.

HOLMES: Back at the COP, work continues. Many of the soldiers will sleep in tanks and Humvees until the main building is complete, fully expecting to be shot at, not expecting to leave anytime soon.

UNIDENTIFIED MALE: We've got a pipe bomb, and they're going to detonate it.

HOLMES: As we left, another reminder that this is an area far from tamed. A small bomb not 500 meters from the COP's front gate. Demolition experts spot it and destroy it.

(END VIDEOTAPE)

SESAY: Well, I'm pleased to say Michael is now back in Baghdad, and he joins us live.

And Michael, the coalition forces pushing hard against al Qaeda, but al Qaeda pushing back.

HOLMES: Yes. I spoke to -- actually, on this last embed, I was up in the north of Iraq for the last eight days, in fact, spoke to several generals and several senior colonels as well. And they all said that this is an unusual fight in that the surge in Baghdad has pushed a lot of those insurgents, al Qaeda, Al Qaeda in Iraq, local insurgents, south and north of the city. Mainly to the north.

And it is in areas like Mosul, and particularly in the western part of that city, and even out into what appeared to be almost deserted areas, that you've got this hard-core now of al Qaeda fighters. One general said that these are the types of fighters that will come out of a house if they are cornered, guns blazing, wearing suicide vests, and they are not the types to surrender or go meekly.

So, he said the kinetics, as the military puts it, of the fight have become very intense. And with 30,000 of those surge troops meant to go home in the months ahead, this fight is becoming very crucial, and there is almost a race on to try to corner as many of these hard- core fighters in the north as possible before their troop drawdown begins -- Isha.

SESAY: All right. Michael Holmes there in Baghdad.

Stay safe. Many thanks.

CLANCY: Well, live from the four corners of the globe, this is YOUR WORLD TODAY. SESAY: Coming up, a full look at the World Economic Forum in Davos, Switzerland, including a sit-down interview with embattled Pakistani president, Pervez Musharraf. It's a conversation you don't want to miss.

CLANCY: And talk about a turbulent flight. The TV flight attendants are having too much fun and the real ones want them grounded.

(NEWSBREAK)

(COMMERCIAL BREAK)

ISHA SESAY, CNN ANCHOR: Welcome back to our viewers joining us from around the globe, including the United States. This is YOUR WORLD TODAY. I'm Isha Sesay.

JIM CLANCY, CNN ANCHOR: I'm Jim Clancy. These are the stories that are making headlines around the globe.

Jerome Kerviel has been named as the French trader who lost Societe Generale, France's second-largest bank, $7.14 billion. The bank said the man's trading practices are completely fraudulent.

SESAY: A top Iraqi police chief and two officers were killed while inspecting a deadly blast site in Mosul. Authorities say they were targeted by a suicide bomber wearing a police uniform. Thirty- four people were killed at the same site Wednesday when a massive weapons stockpile exploded.

CLANCY: Tens of thousands of Palestinians still streaming from Gaza to Egypt. This the second straight day of the exodus. They're buying everything from television sets, to food, to cigarettes, even camels. Israel and the U.S. urged Egypt to ensure control of the situation amid fears of weapons smuggling.

SESAY: Well, for many Palestinians, this is the first time they've been able to leave Gaza in months. And while many are going on a shopping spree, others are reuniting with relatives they haven't seen in years. But as Middle East correspondent Aneesh Raman reports, fears of being separated again overshadow the joyous reunions.

(BEGIN VIDEOTAPE)

ANEESH RAMAN, CNN CORRESPONDENT, (voice over): They just keep coming. Thousands more Gazans making their way into Egypt, tasting freedom for as long as it will last. And they are buying everything. Just past a border crossing in a normally sleepy towns, it's boom time on main street. Need cigarettes? No problem. Need motorbikes? The only problem there is squeezing them all in. At the gas station, chaos.

"It took me all day yesterday," Hussan (ph) says, "to make one trip. And I went back to Gaza exhausted but quickly made my way back here. In Gaza, we have nothing. We need this to live."

And while Egyptian shop keepers are cashing in, the police are on edge, at times forcing us to stop filming.

But these makeshift markets are only part of the story of what's happened here since the wall came down. It's not just about supplies. It's also about families for the first time in years being reunited.

Repi (ph) arrived in Egypt yesterday, surprising his cousin Sulomon (ph). The two hadn't been in touch in three years.

"I was expecting to see perhaps no relatives," Sulomon says. "We never know if they are alive there. But when I saw my cousin, I can't describe how happy I was."

For Repi, with four kids and no income in Gaza, he feels subhuman.

"In Israel, they have hospitals for dogs. In Gaza, we don't even have working hospitals for humans. All we want is to be treated as good as the animals are treated in Israel. That is how bad it is in Gaza. We have nothing there."

For right now, though, it is joy all around. Gazans feeling free, Egyptians enjoying the frenzied shopping with scrupulous detail. Both sides know this will all likely soon end. Palestinians will have to go back, families will be split once again. But for now, Gazans are loving the moment.

Aneesh Raman, CNN, Elarish (ph), Egypt.

(END VIDEOTAPE)

CLANCY: Meantime, Israel's foreign minister urged the world's political and business leaders to boycott Iran. Zipi Livni is among an Israeli delegation attending the World Economic Forum in Davos, Switzerland. Hala Gorani spoke with the Israeli president, Shimon Peres, about Iran and about that situation in Gaza.

(BEGIN VIDEOTAPE)

SHIMON PERES, ISRAELI PRESIDENT: The last thing we want to do is collective punishment. (INAUDIBLE), look, you can complicate this situation, everybody can complicate it as much as they want. But basically it's a simple proposition. Let the Hamas stop shooting (INAUDIBLE). It's as simple as that.

HALA GORANI, CNN CORRESPONDENT: The criticism, though, is that what Hamas is doing doesn't justify the collective punishment of a million and a half people.

PERES: We are not collective punishment whatsoever. We are very careful. There is enough food, there is enough fuel, there is enough medicine. I don't say there is plenty. But the whole story begins with this simple reason -- if you shoot at me, what do you expect me to do? I shall probably apply. And we are telling the Hamas, gentlemen, stop shooting and stop crying (ph). The minute they stop shooting, there won't be any punishment and there won't be any shooting and there won't be any accusations. And also ask them, why are they shooting? We love (ph) Gaza completely. They took our settlements from Gaza. There was no single Israel civilian, no single Israel soldiers. The land is yours. Why are you firing? Why are you firing at our kindergartens or schools or people? What for? Tell us.

GORANI: Let me ask you, has the Israeli government spoken to the government of Mr. Hosni Mubarak and asked him to do something about the border situation?

PERES: Oh, yes. We have an ongoing dialogue all the time on talking (INAUDIBLE).

GORANI: He said he's going to leave it open.

PERES: Well, then it will be his problem. You see there were times that the Gaza was under the control of Egypt in the past. If Egypt wants to control it to control it.

GORANI: What is Israel prepared to do with regards to Iran? A unilateral military strike against Iran, is that something you're considering?

PERES: Well, not as (INAUDIBLE) as that. We say, what is the problem with Iran. One is that they are having a bomb and that of their having a very kinetic policy. If (INAUDIBLE) they'll produce a bomb, we shall not say well. But if Ahmadinejad is producing a bomb, we are worried. Because the difference between Iran and Israel is very clear. There is nobody in the world that threatens the existence of Iran or our security. Iran is threatening the existence of Israel openly, clearly. And when you have such a threat combined with a nuclear bomb, it makes us worry, yes.

GORANI: Right. I think the world understands your concern. I think what the world wants to know is what your response might be. In other words, in other words, is this going to stay diplomat or would you support military action against Iran as the president of Israel?

PERES: I would think it's a world problem, not an Israeli one. We are not the littles of the world. We can express our opinion. Now suggestion is really to take economic and psychological measures. We don't recommend any military action.

GORANI: Let me ask you about Prime Minister Ehud Olmert. He's rather unpopular in Israel. In fact, after the Israel-Hezbollah war, his approval rating was in the single digits. The lowest in history. And he doesn't regret anything he did during the Israel-Hezbollah conflict. Do you think he should step down?

PERES: Look, democratically is not necessarily just popularity. It's the freedom to criticize as well. Some people criticize and criticize him. Now you elect a government for four years and you postpone the judgment until the end of the four years. Because if you judge a government daily, you may get the wrong conclusions. There are many difficult things that you have to do before you can achieve something serious. So if you have a poll and a poll date, you may get the wrong conclusions. So I think the way to judge any prime minister, including Olmert as well, is on the day of the elections. GORANI: OK. So you -- essentially what you're saying is, you think he should stay in place despite the fact that such a vast majority of Israelis don't approve of him?

PERES: Look, there is not (INAUDIBLE) to ask his resignation. There is rather a press that is (ph) polls but we'll let (ph) parliament. And the decision make up members of the parliament or the voters themselves. (INAUDIBLE) you don't run a government by polls. And you cannot run a situation by public relations.

GORANI: All right.

PERES: There are tough decisions on the road (ph).

(END VIDEOTAPE)

CLANCY: That's Israeli President Shimon Peres there talking with our colleague, Hala Gorani, there in Davos, Switzerland.

You can check out more on the World Economic Forum on our website. All of it's waiting for you at cnn.com/davos.

SESAY: OK. Want to turn our attention to Africa now. And the former U.S. secretary-general can bring both men together. He can even get them to shake hands. But it is ultimately up to President Mwai Kabaki and opposition leader Raila Odinga to break Kenya's political impact. Both men met privately with Kofi Annan on Thursday. It's their first face-to-face meeting since last month's bitterly contested presidential election. More than 500 people have been killed in violence that followed that vote.

CLANCY: All right, Isha, we've got to take a short break here, but coming up we're going to turn to the race for the White House.

SESAY: One candidate's putting all his eggs in one basket. But will the bold strategy pay off?

CLANCY: We're going to take a look at Rudy Giuliani's decision to skip most early contests and instead focus on Florida. Might have been a mistake.

SESAY: Might have been.

And then it's definitely a fan favorite, but is the soap suitable for prime-time TV?

CLANCY: You decide, coming up.

(COMMERCIAL BREAK)

SESAY: The delegate-rich state of Florida is the next big test for the Republican presidential candidates in the U.S. The sunshine state's primary is set for Tuesday. A new "St. Petersburg Times" polls shows John McCain leading the race, Mitt Romney right behind with Rudy Giuliani and Mike Huckabee following. Well front-runner John McCain talked about the Bush administration's plan to stimulate the sluggish economy.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN, (R) PRESIDENTIAL CANDIDATE: This package seems to me the product of what you get when both sides sit down and negotiate. If we're going to put some more money back in people's pockets, that's fine, but I really think that we've got to make the tax cuts permanent. We have to get rid of this alternate minimum tax which could attack 25 million American families.

(END VIDEO CLIP)

SESAY: Well, Rudy Giuliani banked his entire campaign on winning Florida. Basically ignoring the early primaries. And now he's changing his focus from terrorism to the economy. But will his strategy work? Dana Bash updates his chances from southwestern Florida.

(BEGIN VIDEOTAPE)

DANA BASH, CNN CORRESPONDENT, (voice over): On the stump, Rudy Giuliani's theme of tested is retooled. The economy now trumps security as he tries to ward off embarrassment in Florida.

RUDY GIULIANI, (R) PRESIDENTIAL CANDIDATE: I did it with New York City. And you can go and look at the results to the economy of New York City. I've done it with businesses. I've done it before. I can do it again.

BASH: Giuliani says he wants to jump start the economy by simplifying the tax code immediately.

GIULIANI: Ultimately, if it's passed, you will be able to file your taxes on one page. One page.

BASH: His biggest challenge -- getting Floridians to listen. Before this appearance, volunteers worked the phones to beef up the crowd. A packed house, but lots of people who can't vote in Florida.

And where are you from?

UNIDENTIFIED FEMALE: Greenen (ph), Indiana.

UNIDENTIFIED MALE: From down here visiting from Pennsylvania.

BASH: There are fresh signs Giuliani's strategy to skip most early contests in search of a Florida win may not be working. A new poll here shows Giuliani now statistically tied for third with Mike Huckabee. A 10-point fall from his Florida lead a few months ago.

So why is it that you seem to be losing support, not gaining support?

GIULIANI: I think the reality is that we are gaining support. I think the issues that we're hitting on are the ones that are the key ones for the people of Florida. And the most important one is, you know, proven leadership.

BASH: There, his obstacle is John McCain, on TV with this new ad.

MCCAIN: There's no one more qualified to meet our national security threats. I've been dealing with these issues my entire adult life.

BASH: And McCain appears to be competing for Florida's top spot with Mitt Romney.

MITT ROMNEY, (R) PRESIDENTIAL CANDIDATE: And I will go to Washington using the experience that I have in the private sector in the real economy to strengthen our economy.

BASH: There's a saying here in Florida that the more south in the state you travel, the more north you are. And we encountered a number of New York transplants that Mayor Giuliani is banking on here. But after dominating Florida for months, it seems the political terrain has shifted and the boisterous former mayor from America's largest city is suddenly having trouble getting his voice heard.

Dana Bash, CNN, Estero, Florida.

(END VIDEOTAPE)

CLANCY: Well, the Democrats have been busy, too. The Democratic presidential candidates, after all, have to face off in their own primary in South Carolina this Saturday. Some of the Democratic faithfuls are raising concerns about party unity. As we've all watched this week as the bitter fight between Hillary Clinton and Barack Obama takes on a seemingly more negative tone, well some suggest Bill Clinton may be responsible for escalating this fight. The former president says, well, that's the media's fault. He let loose on our Jessica Yellin.

(BEGIN VIDEOTAPE)

JESSICA YELLIN, CNN CORRESPONDENT, (voice over): Remember this guy? Bill Clinton, the policy walk.

BILL CLINTON, FORMER U.S. PRESIDENT: We are facing the prospects that a couple of million people could be foreclosed on. All the experts are worried about is moving into a recession.

YELLIN: And in South Carolina, Hillary's campaigner in chief.

UNIDENTIFIED MALE: Is Senator Clinton tough enough?

CLINTON: Half the time, when she shows how tough she is, people say she's too tough.

YELLIN: He spent almost two hours working this Charleston crowd in that artful Bill Clinton way, fighting to win here.

CLINTON: One of my rules is, never look past the next election or you may not get past the next election.

YELLIN: At first he seemed to tread lightly when criticizing Obama. Here for supporting the Bush energy bill.

CLINTON: He voted for that I think because there was a lot of -- I don't want to overstate this. I think he did it because there was money in there for ethanol.

YELLIN: But when I followed up after the event, the president unloaded.

CLINTON: I never ever heard (ph) a public complaint when Mr. Obama said Hillary was not truthful, and off (ph) character, and was poll-driven when he had more pollsters than she did. When he put out a hit job on me at the same time he called her the senator from prunejob (ph), I never said a word.

YELLIN: The question that triggered this? I asked him to respond to a charge by an Obama supporter and former head of the South Carolina Democratic Party that the Clinton campaigns tactics are "reprehensible" and "reminiscent of Lee Atwater," the late Republican mastermind.

CLINTON: They're feeding you this because they know this is what you want to cover. This is what you live for. But this hurts the people of South Carolina.

What they care about is not going to be in the news coverage tonight because you don't care about it. What you care about is this. And the Obama people know that. So they just spin you up on this and you happily go along.

The people don't care about this. They never ask about it. And you are determined to take this election away from them. And that's not right.

YELLIN: Former President Clinton is accusing the media of creating conflict about race. But actually, he addressed the issue first. He told voters that both Obama and Hillary Clinton are winning votes because of their race and gender. And, he said, that's why some people think Senator Clinton will not win here in South Carolina. Read into it what you will. As Senator Clinton has said, they are in it to win it.

Jessica Yellin, CNN, Charleston, South Carolina.

(END VIDEOTAPE)

SESAY: Well, it's certainly heating up.

Coming up, immoral, hot-tempered sex addicts, Jim.

CLANCY: You've got even me interested. You got all of us tuned in, I guess. It seems everybody in Thailand at least is tuned in watching this new soap opera that shows flight attendants in the worst possible light. SESAY: Everyone, that is, except the real flight attendants.

(COMMERCIAL BREAK)

CLANCY: Romance, intrigue and lots of slapping. Sounds a little bit like "Desperate Housewives."

SESAY: Lots and lots of slapping. But it's actually a new soap opera. It's a hit in Thailand, but not with flight attendants.

CLANCY: They're complaining that this new soap opera called "Battle of the Angels" is an insult to their professionalism.

SESAY: Well, is it? Dan Rivers takes a test flight.

(BEGIN VIDEOTAPE)

DAN RIVERS, CNN CORRESPONDENT, (voice over): They call it "Battle of the Angels." A soap about airline hostesses who serve up more than just a mid flight snack. It's full of guys slapping girls, girls slapping girls, guys slapping guys. Cat fights are a major part of this high-octane, high-altitude drama. From fights on flights, so sex during stopovers, the prime-time show is packed with lust, lunging and luggage four nights a week. And it's infuriating some of Thailand's real flight attendants.

PICHITRA TAVEERAT, CABIN CREW UNION MEMBER: I think there's far too unrealistic in terms of my carrier. You know, we don't really ending up fighting. And I'm worried about that, too, the image being tarnished, you know.

RIVERS: The flight attendant union has already convinced the government to change the rating of the soap from PG-13 to PG-18 and they've successfully lobbied for an end to all those skimpy uniforms. Producers have agreed to lengthen the skirts but can't understand all the fuss.

TAKONKIET VEERAVAN, PRODUCER/MANAGING DIRECTOR: I tell you the truth, this drama is not any stronger than any other dramas on Thai television these days.

RIVERS: The producers say it's supposed to be entertaining and they've been contacted by some cabin crews who are big fans despite complaints of the union.

The Thai government is now going to mediate in the dispute over this controversial soap. Cat fights, sex scenes and skirt lengths will be on the agenda as both sides argue about what is suitable to put on Thai television.

The star of the show is dismissive of suggestions it demeans flight attendants.

NAMTHIP JONGRACHATAWIBOON, ACTRESS, (through translator): Maybe they think a little too much about it. RIVERS: The "Battle of the "Angels still has more than 20 episodes to run. Providing, of course, the government doesn't ground them for giving Thailand's cabin crews a bad name.

Dan Rivers, CNN, Bancroft.

(END VIDEOTAPE)

SESAY: But, seriously, those tight, skimpy skirts I'm sure they'd have a probably pushing that trolley down the aisle.

CLANCY: Well, you know, it's drama like the man said. But it's real, like the Jerry Springer show.

SESAY: Yes. Yes. And I'm not sure. I can understand why some people are a little bit upset. It's a little racy.

CLANCY: Yes, I can understand why the stewardesses, even the pilots don't like to see that one. Although it would be . . .

SESAY: It's not going to win any prizes for acting either.

CLANCY: All right. We've got to go.

SESAY: That's it for this hour. I'm Isha Sesay.

CLANCY: I'm Jim Clancy. Wherever you are in the world, stay with CNN.

(COMMERCIAL BREAK)

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