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U.S. Government Concerned With Synthetic Drug Usage; Liberation Party Losing Some South Africans` Support; Celebrities Boycotting Beverly Hills Hotel in Support for Human Rights

Aired May 8, 2014 - 04:00:00   ET


CARL AZUZ, CNN ANCHOR: This Thursday, May 8, we are happy to have you along for CNN STUDENT NEWS. I`m Carl Azuz. You might not have heard of synthetic drugs. This can describe a wide range of chemical substances that mimic the effects of other drugs like marijuana or heroine. The U.S. government says synthetic drugs can be even more dangerous than then illegal ones they try to imitate. Synthetic ingredients are sometimes more potent. They are untested. The names in ingredients are often changed to prevent drug busts, but that doesn`t always work. Yesterday, the government announced more than 150 people have been arrested over the past four months for making or selling synthetic drugs. Police seized hundreds of thousands of drug packages and more than $20 million in cash and other assets.

The government`s particularly concerned about synthetic drugs in part because a 2012 survey found that one in nine high school seniors said they used synthetic marijuana. That was that group`s second most frequently used drug behind actual marijuana.

Next up today, Janet Yellen, she`s the leader of the Federal Reserve, the Central Bank of the U.S. She expects the U.S. economy to grow "somewhat faster than it did last year. But she has some concerns. For one, the U.S. housing market. It`s weak, homes are at selling as well as economists expected. One thing the Fed`s doing is keeping interest rates low to encourage people to borrow money for purchases like houses.

Interest rates are one tool at the Fed`s disposal.


ZAIN ASHER, CNN CORRESPONDENT: So, we`ve had that phase that, you know, money makes the world go around, but you may have asked yourself once or twice, OK, well, who makes the money go around? So, the answer is the Federal Reserve or as my friends and I like to call it, the Fed.

So, the Fed is pretty much unlike any other U.S. institution that I can think of.

It`s run by board of governors based in Washington D.C., it has 12 (INAUDIBLE) banks located around the main banking centers of the country, some places like New York, San Francisco, Philadelphia.

Presidents of these banks and the board of governors, they meet eight times a year to make big policy decisions and to ensure the economy is moving at a stable (INAUDIBLE).

So, Congress oversees the Fed, but the Fed doesn`t really answer to Congress. The Fed operates completely independently because it doesn`t care about politics. All it cares about is basically two things: number one, keeping prices stable and number two, trying its best to ensure that everybody who wants the job gets one. So, if the economy is heating up, it tries to cool things down by raising the cost of borrowing, my making it harder to borrow money. And if things are getting too cold, it does the opposite. So, you can sort of think of the Fed like Goldilocks. It doesn`t really like things too hot, too cold, it wants everything to be just right.

So, you probably want to ring - OK, well, you know, how does the Fed work its magic? What its secret weapon? The answer is, interest rates.

So, the way the Fed gets interest rates at just that right level at that sweet spot is through buying and selling U.S. Treasuries and other bonds. So, when it wants to cool the market down it sells you as treasuries. Stashes away the cash, and not reduced the money supply. So, that makes it harder to borrow money, and that basically slows down economic growth.

When really wants to heat the market up, it essentially starts buying up U.S. treasuries and other bonds that floods its markets with cash and fuels economic growth. So, it`s not necessarily a perfect system, but it works, at least for now, and as they say on Wall Street, don`t fight the Fed.


UNIDENTIFIED FEMALE: See, if you can I.D. me. I`m a nation that`s the world`s largest producer of platinum. I have three capitals including Pretoria. You`ll find me in the southern north part of Africa. I`m South Africa, and I`ve been governed by President Jacob Zuma since 2009.

Even though 79 percent of South Africa`s population is black, the country didn`t have its first black president until 1994. The reason - Apartheid. South African government policy of segregation. It discriminated against people who weren`t white. It was officially over by 1994 when Nelson Mandela was elected, and his political party was expected to do well in Wednesday`s election. Though scandals surround the country`s current leader.


ROBYN CURNOW, CNN CORRESPONDENT: This is the first election since the death of Nelson Mandela. And it`s his party, the Liberation Party, the ANC that is guaranteed to win at the polls and give Jacob Zuma, the president, a second term. But many of these voters have become disenchanted with South Africa 20 years after that first democratic election. Scandals involving the president, for example, have angered many. A recent report has said that the president misused public funds to privately upgrade his own home. So, what does that mean when these people go into these voting halls and mark their ballot paper? Well, the question is how much support will the ANC lose and will opposition party, such as the EFF, and the Democratic Alliance gain more support. But in the end, the ANC will get more than over 60 percent of the votes, say polls, because there`s still deep emotional attachment to the party that liberated South Africans. Robyn Curnow, CNN, Alexandra, South Africa.


AZUZ: Next report takes us from Brunei to Beverly Hills. First, a bit about Brunei. This is the South East Asian country that`s a little smaller than Delaware. And it has less than half of Delaware`s population, about 422,000 people live in Brunei. Almost 80 percent of those people are Muslim. And their government just instituted a strict form of Islamic law called Sharia law. Under Sharia law certain acts like leaving Islam or committing adultery are illegal, in some cases they are punishable by death. Not at Beverly Hills. A landmark there, the Beverly Hills Hotel is part of the hotel chain. Brunei`s leader invests in that chain. And because they disagree with Brunei`s Sharia law, a number of celebrities have stopped staying at the hotels. That`s having some side effects.


UNIDENTIFIED FEMALE: Beverly Hills Hotel employees packing a City Council meeting pleading members to not pass a resolution condemning the laws of a country half a world away.

ANNA ROMER, POLO LOUNGE SERVER: It strangles our livelihood. It causes us to be unable to support our children, our families. My sick grandmother in Vietnam.

UNIDENTIFIED FEMALE: But the pleads failed to stop it from passing.

UNIDENTIFIED FEMALE: With tremendous honor -yes.

UNIDENTIFIED FEMALE: The Beverly Hills City Council resolution targets this man, the sultan of Brunei, a small South East Asian country. Brunei recently enacted new Islamic Sharia law that punishes adultery, abortions and same sex relationships with flogging and stoning.

The sultan is reportedly worth more than $20 billion and has the best seat in the hotel chain that owns the story Beverly Hills Hotel.

JAY LENO, COMEDIAN: Maybe people just become aware.

UNIDENTIFIED FEMALE: Celebrities now vowing to boycott the iconic hotel and the entire chain. Richard Branson tweeting, "No Virgin employee nor our family will stay at the Dorchester Hotels until the sultan abides by basic human rights.

LENO: It`s all economic, you know. How big an economic impact will it have? Let`s find out and see.

UNIDENTIFIED FEMALE: The hotel says the boycott has already cost it more than a million dollars, but will try to avoid layoffs.

CHRISTOPHER COWDRAY, CEO DORCHESTER COLLECTION: It`s getting to hurt our employees. And they have - nothing to do with them, no whatsoever.


AZUZ: Trojans, tornadoes and eagles - welcome to the CNN STUDENT NEWS "Roll Call." We are starting today in Topeka, Kansas, with the Trojans. They are making our roll at Topeka High School. Spinning up to Anoka, Minnesota. Hello to the tornadoes. Thank you for watching it, Anoka High School. And in Tolland, Connecticut, the eagles are soaring over Tolland High School. It`s great to know you all are watching.

It`s teacher appreciation week and we are featuring your comments. From our student viewers already on Facebook, Min appreciates Ms. Carey at Buscan International Foreign School. She makes science interesting and inspires me to become a scientist. Mackenzie`s favorite teacher is Mrs. Makos. "She`s helped me with my math skills and made me a better student." Sarah writes, `Mr. Marquez is one of the best social studies teacher someone could have. You`ll never get lost in his class." Laverrio says, Coach Wingo is world history teacher is very chill and laid back. Any teen would be happy to have him as a teacher. And Sean says Mrs. Hall teaches us a lot about how America came to be and how current event affect us.

If you never wondered what it looks like when a relatively small hovering pile of twisted plasma shifts back and forth a little bit before blasting off in the space, well, NASA`s got your answer. You`re looking at a prominence eruption, something that scientists say is pretty common on the Sun and no threat to us here. This view is from NASA`s solar dynamics observatory, an $850 million space craft that orbits the earth, staring at and studying the Sun. There`s plenty of space for puns here. You could say, it really heats up interstellar interest, that it gives a startling view, that it`s plasmatic, enlightening, illuminating, radiant, brilliant. It`s certainly something else and it lets us end our show on a sunny side - hope you make more space again for CNN STUDENT NEWS tomorrow.