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NEWS STREAM

From Debt Deal to Done Deal; Violence in Syria; CNN Freedom Project

Aired August 01, 2011 - 08:00   ET

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

KRISTIE LU STOUT, HOST: Welcome to NEWS STREAM, where news and technology meet.

I'm Kristie Lu Stout, in Hong Kong.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: -- the deficit and avoid default.

(END VIDEO CLIP)

STOUT: And a day after more than 70 people are reported killed, more reports of violence by the Syrian army in the town of Hama.

And African Union and government troops struggle to hold off Islamic militants in Somalia, a country that's become the front line of famine.

Now let's take you to the U.S. Capitol, where American lawmakers and the White House have finally reached a debt deal subject to votes in the Senate and the House. The bipartisan agreement would raise the debt ceiling immediately and includes nearly $1 trillion in government spending cuts in 10 years, with more deficit reduction set for later this year.

It has been an arduous process for Democrats and Republicans to reach this point, and there's still no guarantees it will pass when Congress begins voting later today.

(BEGIN VIDEO CLIP)

OBAMA: We're not done yet. I want to urge members of both parties to do the right thing and support this deal with your votes over the next few days. It will allow us to avoid default, it will allow us to pay our bills, it will allow us to start reducing our deficit in a responsible way, and it will allow us to turn to the very important business of doing everything we can to create jobs, boost wages, and grow this economy faster than it's currently growing.

Congress has come a long way since last week, but the true test happens a few hours from now, when the Senate begins voting on the bipartisan bill. Now, we've been told Republicans in the Senate may try to block the vote with a filibuster, but if the debt deal does pass the Senate the bill will move to the House of Representatives for its vote, also expected Monday evening. And if it passes both houses of Congress, then U.S. President Barack Obama can sign it into law.

Now, for more on the U.S. congressional process and what we can expect when voting begins, Richard Quest joins us now live from Washington.

And Richard, what will happen today?

RICHARD QUEST, CNN INTERNATIONAL CORRESPONDENT: That's a good question. The bill, as we now understand it, with its various components, goes to both houses. And as a birthing process, it is likely to be torturous, difficult, painful, and there is no guarantee that at the end of the day, something alive and kicking will emerge.

There are two distinct issues. The first is the bill itself and the second is whether it does the trick.

Let's just look at this bill, Kristie, and go into some of the details.

The first thing this bill does is have an immediate $1 trillion raise in the debt ceiling which will see the U.S. economy certainly through this year and next. That is accompanied by about $960-odd billion in spending cuts. A trillion for a trillion.

It then sets up this super committee, the super-committee of congressmen, half and half, 50/50, Republicans and Democrats. And they will report by Thanksgiving in November.

After they report, Congress then has an up-and-down vote. It can't amend it. It can only accept their recommendations, which takes you to point three.

If there is no agreement by then, automatic cuts. There'll also be a balanced budget amendment vote.

So you see what you have is an exceptionally complicated arrangement where the extremes of both parties will find something they don't like.

Kristie, in brief and in blunt, the Republicans won't like defense spending cuts, the Democrats won't like -- there's no tax raises, and they won't like Social Security and Medicare cuts.

STOUT: Richard, what are your thoughts about the bill, about the deal as it stands now before the voting begins? Do you think it's a good compromise, or is one party conceding more than the other?

QUEST: Oh, I think there's no question the Democrats have had to concede, or at least President Obama has had to concede more than the Republicans on this one. There's no revenue raising at all as we look at it, and there's only the promise of tax reform to come. But it is a compromise, and as the president says, it's not the bill he would have wanted, but it's the bill he got.

The markets are cheerful today. They are relieved in the way that shipwrecked passengers are relieved to be in a lifeboat. But they're not back at shore and there are sharks all around them, and the waters are chopping. This is such a frighteningly complicated arrangement with so many vested interests that could pull the plug.

Do I think that they will all stick together, at least to get through today? I think there's a strong possibility, yes, they will. There's too much riding on it. But once we go beyond today and into the following process, this -- to completely mix my metaphors, this is a wooly sweater that's waiting to get snagged on a nail and literally come apart.

STOUT: And given all the heat this day outside and inside Capitol Hill, you don't want to be wearing or even talking about wooly sweaters, but we forgive the metaphor.

Richard Quest, live in Washington.

Thank you very much, indeed.

Now, when we talk about the debt ceiling, we are talking about trillions of dollars, and I want to give you some sort of idea of just how much that really is.

Here is a standard American $100 bill. And the amount we're talking about use thousands, even millions of bills like this. So what does that look like?

Now, Otto Godfrey (ph), who created this image of $100 million in cash, you can see it almost comes up to an average person's shoulder. Now, 10 of those stacks is $1 billion, but we're not even close to the current level of U.S. debt. So let's multiply this by, let's say, a thousand.

This is $1 trillion. And in this image, you're actually looking at two layers of $500 billion stacked on top of each other.

One trillion dollars in cash, in fact, is just so big, that it is bigger than an American football field. It is bigger than a soccer field. It even dwarfs a 747 jumbo jet.

And remember, the current U.S. deficit is nearly twice this. It's $1.7 trillion.

Now, finally, we have heard how the U.S. will raise the debt ceiling to just over $16 trillion. How much is that? What does that look like?

Well, it is just a bit bigger than this. This is $15 trillion, an amount of cash enough to reach over halfway up the Statue of Liberty.

Now, reaching a debt agreement between lawmakers of the opposing parties has been quite the challenge, and many in Washington still are not fully satisfied with the final proposal, including the U.S. president. But if nobody likes it, it just might work.

Brianna Keilar joins us now from outside the White House.

And Brianna, the U.S. president said it himself -- it was not the deal he would have preferred. Did the White House give too much?

BRIANNA KEILAR, CNN WHITE HOUSE CORRESPONDENT: You know, certainly, the White House had to give a lot, Kristie. Did they give too much? You're definitely going to hear from some liberal Democrats that they gave too much. But at the same time, I think there was sort of, I guess, a reality check here at the White House, and amongst moderate Democrats, that following the election, where Republicans swept into power in the House of Representatives, that there was really going to be an uphill climb and there was an expectation that this debt ceiling battle was just going to be brutal.

I think also, when you think about it, the way the president is sort of framing himself ahead of the 2012 election, it's sort of more of a move to the center. And that's why we heard him talking so much about compromise.

The reality was that Democrats in the White House were going to have to compromise. And for the president, at least politically, they worked this into their strategy as he moved more towards the center in trying to court those Independent voters, especially while House Republicans have had to be sort of beholden to those more to the right of their conference.

Now, I want you to listen, because we've talked about, has the president given too much? Obviously, in this second sort of part of this process, which would be a committee looking at how to do more comprehensive deficit reduction, and there are things Democrats and Republicans each want in this, be it tax reform or entitlement reform, the president certainly indicating that he will be fighting for some tax increases in this second part.

Here's what he said last night.

(BEGIN VIDEO CLIP)

OBAMA: Despite what some Republicans have argued, I believe that we have to ask the wealthiest Americans and biggest corporations to pay their fair share by giving up tax breaks and special deductions. Despite what some in my own party have argued, I believe we have to make some modest adjustments to programs like Medicare to ensure that they're still around for future generations.

That's why the second part of this agreement is so important. It establishes a bipartisan committee of Congress to report back by November with a proposal to further reduce the deficit which will then be put before the entire Congress for an up-or-down vote.

(END VIDEO CLIP)

KEILAR: So the president, Kristie, has long advocated for shared sacrifice, or a balanced approach. That whatever sacrifices are made in this process, it should not just be -- it should be shared by wealthy Americans and corporations, and not just hit, as Democrats say, the most vulnerable Americans, the elderly and the poor. And he's continuing to fight for that as he tries to urge for a compromise, because this process is not over.

We'll be focusing a lot on deficit reduction in this whole process that is going to play out here in Washington still for months. And let's not forget there are still some very important votes ahead in Congress. This is not a done deal. This is the process where leaders, Democrats and Republicans, really need to get buy-in from their rank and file, and that's something that's going to be playing out in earnest today -- Kristie.

STOUT: That's right. President Obama, he urged members of Congress to support the deal, meaning that support for the deal is not guaranteed.

Should we be expecting the U.S. president today working the phones to try to secure that support? What is on his agenda?

KEILAR: Publicly on his agenda, it doesn't say that. But that certainly is the expectation.

If there are -- the way this process works -- and it's called whipping there on Capitol Hill -- it's almost sort of an apt description. It's also, you could call it, arm-twisting, which is sort of a colloquialism we use.

Yes, if there are people who are sitting on the fence, it would not be unusual for them to get a call from President Obama asking them for their support. But this is something the Democrats, as well as Republicans, are going to be doing, especially in the House, where we're expecting that it will be Democrats and Republicans, that it will be a bipartisan vote for this measure, assuming they can get the votes -- Kristie.

STOUT: All right.

Brianna Keilar, live from the White House.

Thank you very much, Brianna.

Now, there is a lot of suggestion that pressure from the public forced Congress to make the deal, including from Twitter. Now, White House aide Dan Pfeiffer confirmed in a tweet to The New York Times' Brian Stelter that the White House believes that e-mails and tweets helped pressure Congress.

You are watching NEWS STREAM. And ahead on the program, a day after reports of a deadly crackdown against anti-government supporters in Syria, Arwa Damon has the latest on a reported new attack that is being met with a new show of protests.

And we go live to Somalia, where thousands of people are hoping to find food and water, even in the teeth of new fighting.

(COMMERCIAL BREAK)

STOUT: Welcome back.

And we turn to Syria now, where we are hearing that the Syrian military has again opened fire on the city of Hama. Now, on Sunday, human rights activists reported that tanks had stormed the city in one of several crackdowns against anti-government protesters.

Now, take a look at this video. It was posted on YouTube.

The activists say at least 71 people died across the country, with about 50 of those deaths coming in Hama alone. Now, CNN cannot independently verify those numbers, or even this footage, but the images and the eyewitness accounts have sparked fresh international condemnation.

CNN is not allowed inside Syria at the moment, but our Arwa Damon has been monitoring the situation from neighboring Lebanon, and she joins me now, live from Beirut.

And Arwa, through social media like the clips we saw just now, we have seen dramatic pictures of the violent raids in Hama and reports of more violence today. What have you heard?

ARWA DAMON, CNN INTERNATIONAL CORRESPONDENT: Well, we did manage to get through to some activists earlier in the morning that are also residents of Hama, and they were telling us that around 7:00, 7:30 in the morning, one of them at least --

STOUT: OK. Unfortunately, we just lost our connection there with our Arwa Damon on the line, but we'll try to reestablish that for you as soon as we can.

You're watching NEWS STREAM. And up after the break -- hold on for just a second. I understand we may have Arwa Damon on the line.

Arwa, it's Kristie in Hong Kong. Are you hearing me?

DAMON: Yes. Hi, Kristie.

If you can hear me, I was saying that we did manage to get through to --

STOUT: OK. We are hearing you. Go ahead.

All right. Unfortunately, apologies again for this faulty connection. And -- yes, my apologies there.

Again, you're watching NEWS STREAM. Let's go to a break right now. We'll try to give you an update on what's happening there in Syria after the break.

And we will also take you to Mogadishu, Somalia, for an update on the plight of the thousands of people there who are not only dealing with the famine, but putting themselves in a crossfire just to seek food and water.

(COMMERCIAL BREAK)

STOUT: All right. Coming to you live from Hong Kong -- a clear night tonight -- you are back watching NEWS STREAM.

Now, Tropical Storm Nock-Ten is no longer. The rain has eased, but parts of Thailand are under water.

(WEATHER REPORT)

STOUT: Now, as you know, the CNN Freedom Project is taking a stand to help bring an end to modern-day slavery. Human trafficking is a horror that hundreds of thousands of people experience very year. Many are shipped across borders in cramped containers, and one man in London is shining a light on this terrifying experience.

Let's take a look.

(BEGIN VIDEOTAPE)

PHIL KNIGHT, HUMAN TRAFFICKING CAMPAIGNER: My name is Phil Knight. And for the next two weeks I'm going to be living in this shipping container.

Here's the grand tour. OK. On the west wing we have basically this, a chemical toilet, just a small air cooler. And it does get intensely hot outside -- health and safety. But, of course, if you were being trafficked, you wouldn't have any of this.

Someone who's locked in here and traveling, sometimes in a container this size they might put, like, 20 people. And they could be in there for, say, five weeks. And I've heard stories of worse. And there's not a chemical toilet, there's not an air cooler. So I think just getting this little taste of the isolation, you know, is going to be hard, but nowhere to what those guys get.

DR. MICHAEL KORZINSKI, DIRECTOR, HELEN BAMBER FOUNDATION: I think we need to look at country of origin solutions where you have in certain parts of the world where the trafficking phenomena is generational, where young people grow up knowing that they will one day be smuggled abroad to work, to earn money to bring back to the family. It's what is expected of them.

KNIGHT: What somebody who is being trafficked or somebody who is being tortured goes through is -- you know, there's no break in it. There's no - - they don't get time off. And I'm lucky in that, at the end of this, I'll get -- the doors will open and I'll get to come out. And I know that.

I just can't believe that, you know, I'm about to go in here. And people go in here and they're stuck. You know? And it's just so scary.

(END VIDEOTAPE)

STOUT: Now, this week, NEWS STREAM will take you to New Delhi. And we will share the story of nine girls who were rescued from an Indian brothel and learn how authorities found them, and meet one policewoman who patrols the red light district trying to make a difference.

All that and more, this week, right here on NEWS STREAM.

Now, let's go back to the situation inside Syria. We are hearing reports of more violence in Hama. It's the town where 50 people were killed over the weekend.

Now, CNN, we are not allowed inside Syria at the moment. Arwa Damon has been watching the situation closely from Lebanon, and she joins me now on the line from Beirut -- or rather on camera.

And Arwa, what is the situation in Hama today?

DAMON: Well, Kristie, what appears to have transpired is that at some point overnight, these Syrian military units appear to have largely withdrawn from the city. However, residents and activists we were talking to said that on top of some government buildings there were still sniper positions.

At around 7:00, 7:30 in the morning, according to two residents who are also activists taking partaking in the ongoing demonstrations in Hama, they said that they heard what sounded like tank fire, followed by, according to one of them, intense small arms fire that lasted for around 20 minutes. They did not at that stage have an accurate idea of what sort of casualties were caused.

We are hearing some reports. We're working on trying to confirm that.

Meanwhile, a doctor who CNN spoke to earlier said that the Syrian military had blocked off routes to the cemeteries. People still afraid to venture out into the streets because of the sniper positions and other military positions around the city itself. People apparently being forced to bury the bodies of the dead in gardens in back yards, in public parks.

The medical situation there quite dire, according to two doctors who we in fact spoke to. People inside these hospitals really struggling.

They were describing the horrific scene yesterday where they quite simply did not have enough room for the wounded. They were tending to them in the hallways -- Kristie.

STOUT: Arwa, can you tell us more about Hama and the people who live there? I mean, Hama has long been a flash point city there in Syria. But why has it been a symbol for the uprising against the regime?

DAMON: Well, Kristie, Hama itself has been quite symbolic in terms of longstanding uprisings when it comes to those who are trying to make a stance against the regime, against the Assad regime. Back in 1982, the current president's father launched a bloody crackdown against a Muslim Brotherhood armed, in that case, uprising that was taking place in Hama. There aren't any exact figures as to how many people were killed, but some estimates go as high as 40,000. And people in that area and across the entire country, in fact, most certainly do remember that having taken place.

In this most recent uprising in Hamaa, that's been one of the areas where we have been seeing some of the largest demonstrations, if not the largest demonstrations taking place, the government have largely withdrawn its forces, but then earlier in July and now more recently tried to launch two more crackdowns there.

If the government is able to clamp down on the uprisings in Hamaa, that most certainly would send a very stern message to the rest of the country, Kristie.

STOUT: That would, indeed. Arwa Damon joining us live from Beirut. I'm happy we were able to get you patched through. Thank you very much for keeping us updated on the situation there.

Now you are watching NEWS STREAM. And coming up next, as U.S. lawmakers come to an agreement on a debt package, we'll get market reaction from Europe and Asia.

And a new threat to those fleeing famine and drought in Somalia. We'll go live to Mogadishu.

(COMMERCIAL BREAK)

STOUT: I'm Kristie Lu Stout in Hong Kong. You're watching NEWS STREAM. And these are your world headlines.

Now planted (ph) flash, the U.S. deficit and raise the debt ceiling is set to go before Congress on Monday. Republican and Democrat readers reached the 11th hour deal late on Sunday. The U.S. is under pressure to raise its debt ceiling by Tuesday or risk a default on some of the country's obligations.

In Syria, the flash point city of Hamaa is said to be under attack again from government forces. According to activists, tanks have been on the move and the military has been firing heavy artillery. Human rights groups say at least 70 people were killed in an armored government crackdown on Sunday.

Japan is expanding its ban on beef shipments to a third prefecture. Now cattle from Owaki can no longer be sold after tests found radiation levels that exceeded safety standards. The country's food supply is still under scrutiny following the nuclear crisis at the Fukushima power plant.

Norway's prime minister and members of the royal family attended a memorial service for victims of the twin terror attacks. The parliament speaker read the names of all 77 people killed in Oslo and on Utoya Island. And the prime minister announced August 21st will be a national day of commemoration.

Meanwhile, a British newspaper is shedding light on how the suspected killer prepared for the attack. Now Britain's Sunday Telegraph says Anders Behring Breivik purchased bomb making chemicals and other equipment through the online auction site eBay.

Now back to the latest on Washington's debt compromise and welcome reaction its getting from investors around the world. Now stock markets have been surging on the news.

And for a look at the numbers, Nina Dos Santos joins us from the trading floor of BGC Partners in London. And Andrew Stevens is at the Hong Kong Waterfront.

Now Nina, European trading is still underway, how does it look?

NINA DOS SANTOS, CNN INTERNATIONAL CORRESPONDENT: It's looking pretty good at the moment, Kristie. We do have cautious optimism among some of these trading desks behind me. Obviously, investors cautiously optimistic that we're not just getting an 11th hour deal passed through, but that these measures will eventually implemented.

The big question now, Kristie, is whether even if they are indeed implemented, given the kind of white knuckle ride that U.S. lawmakers have given holders of U.S. debt, well the question is, will the ratings agencies still take away that coveted AAA credit rating from them.

Now one of the things we should focus in on is how this is affecting the dollar, because the dollar has been pretty beaten up of late. It's rising just a little bit against some of its currency peers. That is some relief. But you know what some of the investors have been telling me here across the city of London is that even if we do see the FTSE 100 that's putting on about 1 percent of the biz at the moment, that's still only a small percentage of the kind of ground that it has to regain.

We should remember that that FTSE 100, for instance, has lost about 4 percent over the last week during the past five trading sessions. And so we have plenty of way to go to try and get investors confident in these markets once again, Kristie.

STOUT: So still a little bit cautioned there. Nina Dos Santos there in London. Let's go to our Andrew Stevens at the Hong Kong waterfront. And investors here in Asia really cheering the news, Andrew.

ANDREW STEVENS, CNN INTERNATIONAL CORRESPONDENT: Well, they certain gave a thumbs up, Kristie. But I don't think it was a sort of a free for all in the markets as far as their optimism is concerned. As Nina was saying, there's still a lot of caution out there at the moment. Will this deal actually get done? And what will it mean for the rating of the U.S. debt?

Now one number in the markets over the last few days is that they were expecting to see debt cuts of -- deficit cuts, I should say, of around $4 to $5 trillion out of this deal. Now what we've seen is $1 trillion -- virtually $1 trillion promised and another $1.5 trillion likely. So what that means is it still looks like it could be a bit of a shortfall between what the markets are expecting and what's going to be delivered, which could take the shine off this market.

Speaking of the markets, we saw the Hang Seng here up around about 1 percent. In Tokyo the NIKKEI was about by 1.3 percent. Stock got little moved in the Shanghai. And Australia getting a bit of a boost.

So there is that initial optimism, Kristie, but at the moment it's certainly not solid optimism certainly in this part of the world.

STOUT: Yeah, the deal is still in wait and see mode. Andrew Stevens live in Hong Kong. Nina Dos Santos live in London. A big thank you to you both.

Now, we'll just have to see how the U.S. stock markets react. And for the opening bell, the latest on the U.S. debt deal, stay tuned for World Business Today. That is in less than half an hour from now.

Now the situation in Somalia is becoming more complex even as it gets more desperate. Now rural families with no food and water are setting off by foot for the capital with little more than the clothes on their backs now only to arrive there and find they risk getting caught in a crossfire.

Now last week government forces backed by African Union troops launched an offensive against Islamist militants in northern Mogadishu. But Somalia's al-Shabbab militants appear to have started their own attack in the capital despite the beginning of Ramadan, the Islamic holy month.

Now CNN's Nima Elbagir joins us now live from Mogadishu. And Nima, have you seen -- have you witnessed al-Shabbab's offensive there in Mogadishu?

NIMA ELBAGIR, CNN INTERNATIONAL CORRESPONDENT: Well, Kristie, we were at the front line yesterday at -- in the northeast of Mogadishu and recently retaken territory that the African Union were hoping to use to secure the area around the displace camps from further al-Shabbab attacks, today we're being told by the AU that that area is under renewed assault from the al- Shabbab.

We've been hearing mortar attacks. We've been hearing gunfire. Even here on the base, which is quite far in from that front line there, Kristie. It does feel like all the intelligence that we've been hearing from sources about weapons shipments coming across the Red Sea from Yemen, all the intelligence that we've been hearing about the mobilizing of troops by al- Shabbab, all of that seems to be culminating in this huge offensive they've now launched today here in Mogadishu, Kristie.

STOUT: An Nima, I'm trying to understand the thinking of al-Shabbab. Why does the militant group deny that there's a famine? Why do they deny food and aid access to the scores of desperate people there?

ELBAGIR: Well, Kristie, one of the main things that's come out of this tragedy is a real undermining of support for al-Shabbab, the fact that a lot of the support for al-Shabbab that had still remained had harked back to when they were part of the Islamic (inaudible) in 2006 which really showed Somalis about six months of the most security, the most stability that they'd seen in a very long time.

That came to an abrupt end when Ethiopian forces, with the support of the international community I should say, came in here and ousted out al- Shabbab. That served to really ratchet up anti-Western sentiment and support for al-Shabbab. But in the time since then, the African Union has come in. They've seen African Union forces trying to bring back some form of stability. They've seen African Union soldiers out in the camps trying to support what aid efforts are trying to get through. And then now with al-Shabbab saying that this famine that people are trying to survive and live through is actually a fabrication of the United Nations, fabrication of the international community to justify coming in more strongly when people know that their relatives, their friends, their neighbors are dying, that has been the final swing against al-Shabbab and really seems to be supporting this African Union push, Kristie.

STOUT: It's incredible, isn't it, that they continue to think this way despite lives and so many lives being in the balance.

Now, Nima, you are there on the front line of famine. The United Nations has declared a famine into southern areas of Somalia. Why is this country so vulnerable?

ELBAGIR: Well, its' a combination of weather patterns that are affecting the entire region, but it is also -- you know, it's just the basic lack of security, it's the basic inability to stay in areas in a secure situation so that you can grow crops, so that your livestock isn't constantly under attack, so that you're not constantly moving from your homeland back into Mogadishu.

Mogadishu at the moment has 1.5 million displaced people. That's not only a huge burden for the people who've had to come in from those areas, and we're hearing from some of these displaced people that they've had to pay $100, you know money that they really don't have, just to come into the capital, but it also puts further pressure on the resources of the capital though really meager resources.

You know, we've been speaking to aid workers and medical professionals here who say that they're running out of medicine. You know they're coming in, they're weak, they're malnourished, and there's no support for them.

And then that cycle just renews itself next year when there's a bad crop. People's ability to survive that and try and sow any seeds into the land is completely decimated. And the international community really needs to not just focus on delivering aid, it also needs to try and finally find some sort of solution to the security issues here, Kristie.

STOUT: And to break the cycle finally. Nima, thank you so much for reporting on this devastating story for us. Nima Elbagir joining us live from Mogadishu. You don't want to miss her video report. You can find it at CNN.com

Now to Libya now where rebels in the eastern city of Benghazi say that they rounded up dozens of people reportedly loyal to leader Moammar Gadhafi. A spokesman says it was part of an operation to destroy the pro-Gadhafi cell behind last week's assassination of the rebel's military commander.

Now still in Libya, but moving to the west where after bitter fighting a celebration of sorts in a town won by the rebels last week. Michael Holmes reports.

(BEGIN VIDEOTAPE)

MICHAEL HOLMES, CNN INTERNATIONAL CORRESPONDENT: After the battle, the congratulations of victory and the sounds of silence. The town of Takut all but deserted save for some of the rebels who the day before took it from Moammar Gadhafi's forces. The civilian population long gone, except for Mahmoud (ph), he fled when Gadhafi forces took over here in April and returned the moment he'd heard they'd been forced out. He says it was a sad homecoming.

UNIDENTIFIED MALE (through translator): I was happy to come home until I saw the house, it was ransacked. My neighbors had their homes burned.

HOLMES: Takut is one of half a dozen town taken by hundreds of rebels in a determined push on Thursday, fighters under equipped, undertrained, but now battle hardened and brimming with confidence.

The rebels have long held the western mountains here known as Nafousa (ph), but getting control of the plains below, the towns there and supply route has long been a crucial aim.

UNIDENTIFIED MALE (through translator): This will help it make it easier to get to Tripoli and also protect our backs.

HOLMES: Whalid (ph) was in the fight on Thursday. His morale boosted like those of his comrades, one step says their confident commander, closer to Tripoli.

UNIDENTIFIED MALE (through translator): Any victory we achieve is a moral and military strike to the tyrant Gadhafi forces.

HOLMES: At least six rebels died in the events and more than 30 were wounded, yet these dusty deserted towns are rated by the fighters as a significant prize in the big picture.

The chances of a negotiated settlement are fading, however, and despite the confidence of these men, the Gadhafi regime scoffs at their gains and remains in power. The war that has now ground on for more than five months looks likely to continue to do so with no end in sight.

Michael Holmes, CNN, Takut, Western Libya.

(END VIDEOTAPE)

STOUT: Now just ahead here on News Steam we will get a complete sport update as this woman continues her assault on golf's record books. Alex Thomas will be here with all the highlights next.

(COMMERCIAL BREAK)

STOUT: Welcome back.

Now two big names in the world of women's sport have proved you're never too young or too old to achieve success. Now rising star and a proven champion were both in the winner's circle on Sunday. And Alex Thomas can tell us more -- Alex.

ALEX THOMAS, CNN SPORTS CORRESPONDENT: Yes, Kristie.

Well, Serena Williams has been at the top of the tennis world for a decade or more, golfer Yani Tseng is just 22 years old, but both were victorious at the weekend.

Tseng has become the youngest to win five golf majors after defending her British Open title at Carnoustie in Scotland successfully.

This was how she did it. The overnight leader on this picturesque course was actually Caroline Masson, but she endured an awful final round of 78 and concluded six bogies and a double bogey. She finished tied for fifth in the end. While Yani Tseng stormed through the field shrugging off a bogey at the first to make six birdies, including this one at the final hole. Her score of 69 left her at 16 under par and four strokes clear of the rest of the field staying British Open champion for the second year running.

(BEGIN VIDEO CLIP)

YANI TSENG, GOLFER: So many (inaudible) making the history on this golf course. And I just feel wonderful. It's my honor to win in the British Open again.

(END VIDEO CLIP)

THOMAS: So Yani Tseng looks set to dominate women's golf for years to come, something which Serena Williams has already achieved in tennis. But the 13-time grand slam winner started the Stanford Classic ranked a lowly 169th in the world.

She beat Sabine Lisicki, the Wimbledon semifinalist, and Maria Sharapova on her way to the final in California where she faced top French player Marian Bartoli.

During the first set Bartoli twice up a break of serve, but each time the former world number one rallying back. The pressure exerted by Williams proving too much for her opponent. This unforced error putting the American one set up.

And Williams went on to dominate the second set. Bartoli coming into the net here, but Serena guesses right, hits the winner, and goes 5-love up. And although Bartoli did get a game, her solid service game from Serena Williams sealed a straight sets victory gaining revenge over the woman who beat her at those Wimbledon championships.

(BEGIN VIDEO CLIP)

SERENA WILLIAMS, TENNIS PLAYER: I feel really good. I'm happy to walk away with a win. I haven't won a tournament in a while. So it's really good. But I'm not finished. I don't feel by any means that I'm finished. I feel like, OK, let me just dust my shoulders off and keep pushing.

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THOMAS: Now the Formula 1 world champions Sebastian Vettel says he's very hungry to win more races after going a third grand prix in a row without a victory. Vettel was only runner-up on Sunday's race in Hungary, which was won by McLaren's Jenson Button.

In a rain effected event, Vettel started on pole, and the young German showed no intention of losing his lead despite the ever changing conditions. His Red Bull teammate Mark Weber didn't fare as well, falling from sixth to eighth, another tough day for the Aussie.

Lewis Hamilton meanwhile, winner of the previous week's race in Germany, took over at the front when Vettel ran wide on the fifth lap. That was a fiery end to Nick Heidfeld's race when his Renault caught fire shortly after leaving the pits. He'd later say he'd never seen anything like that before.

Seven time world champion, Michael Schumacher spun his car on the 28th lap and soon had to retire with a (inaudible). Problems, then, for the seven time world champion.

But Jenson Button, when all this mayhem was going on around him, seemed to benefit. His tactics and tire choice spot on. He took the lead, holding off his teammate Hamilton who was given a drive through penalty for forcing another driver off the circuit with 23 laps remaining. And the Britain just had to stay out of trouble, which he did. Button holding off Vettel to celebrate victory on what was coincidentally his 200th gran prix, the same circuit where he secured his first F1 win back in 2006.

So although he was only the runner-up, Sebastian Vettel increased his lead in the driver's championship to 85 points over his Red Bull teammate Mark Weber. Button now has 11 F1 grand prix race victories throughout his career.

(BEGIN VIDEO CLIP)

Jenson BUTTON, MCLAREN DRIVER: I think we're going into the break on a nice high. But I think every day we're on holiday we're going to be thinking about (inaudible), excited about coming back and hope to doing the same again.

(END VIDEO CLIP)

THOMAS: Yeah, the F1 championship back in three weeks' time, Kristie.

More sport for me in a couple of hours when we talk about America's new German football coach.

STOUT: Alex, thank you.

Now, it is not a sport, per se, but if all jelly fish were as innocuous as these in Palau, maybe swimming among them could be. After the break, I will take you to an unusual ecosystem where evolution has taken some very strange turns.

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STOUT: Welcome back.

Now a few thousand kilometers south of Tokyo and hundreds of kilometers east of the Philippines, we find the island nation of Palau. It is a country dealing with dramatic environmental changes, ones that researchers say could offer insight into global climate change. Let's take a look.

(BEGIN VIDEOTAPE)

STOUT: It is a marvel of mother nature, millions of jelly fish can be found in this lake in Palau. Isolated here for thousands of years, these jelly fish have evolved from its relatives in the open ocean. Tourists can now swim with them, their sting virtually innocuous. It's one of the world's truly unique ecosystems, but life here hangs in delicate balance.

Unusually warm water temperatures in 1999 nearly wiped out the entire population. Scientists feared the devastating impact global warming would have on Palau's delicate ecosystem.

UNIDENTIFIED FEMALE: If this does happen again, I'm sure the jelly fish will be gone.

STOUT: For these Pacific islands, even the slightest change in the environment is acutely felt, but the cause remains uncertain. Some scientists are cautious about making the connection to climate change, which calls for a long-term view that many studies can't yet provide.

Still, these changes persist. Here in the southern island of Peleliu residents have noticed an alarming trend, one that threatens their food security. This patch used to grow taro, a staple in the Palauan diet.

FELIX SENGEBAU: The people who are working in this taro patch didn't notice that the water was seeping in from the ocean.

STOUT: As a low lying nation, rising sea levels could prove to be a real threat to the way of life here.

Locals abandoned this patch last year. Researchers are now taking a closer look at the impact of climate change on this remote community.

SENGABAU: I know Palauans are very, you know, strong people. But it's going to take time for us to adapt.

STOUT: Taro farming is hard work for 74 year old Reiko Kubarii, but it's a tradition she is keen to protect.

REIKO KUBARII, PELELIU RESIDENT: Sometimes when you come to the taro patch, all the leaves is yellow. And after months is becoming brown. And when you come, the taro is no good.

STOUT: Now her family has no choice but to turn to imported food. Instead of taro, they eat rice brought in from California.

KUBARII: Before, I used to live with my mom and there was not like that. But now, it's really different.

STOUT: These changes make for an uneasy future. And for this community, getting answers will be key to protecting the way of life here.

(END VIDEOTAPE)

STOUT: A beautiful part of the world there.

And from tiny Palau to the tiny country of Monaco now and one woman's very expensive excursion and not for the usual reasons. Now it is said that her Bentley swerved, causing a costly pile up. Now the $360,000 car sideswiped this, Mercedes S Class that's worth around $108,000. And then the Mercedes knocked a Ferrari F430. The price tag on this nearly $202,000. An Aston Martin Rapide, it costs nearly the same, and that valuable vehicle and a Porsche 911 also joined the pile up. So the Porsche's $115,000 makes the grand total for cars in this fender bender right around $1 million bucks. And it all reportedly happened right outside one of the world's most famous casinos.

The driver of the Bentley probably would have lost less money inside.

And that is it for NEWS STREAM, but the news continues at CNN. "WORLD BUSINESS TODAY" is next.

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