Transcripts For ALJAZAM Real Money With Ali Velshi 20140715

Hula hoops made right here in america. The metaphor for what American Companies have to jump through to bring jobs back here to america. Real money. This is real money. You are the most important part of the show. Tell me what is on your mind by tweeting me or hit me up on facebook. Another big bank pays for its misdeeds. Citigroup agreed to pay fines totaling 7 billion. That is a lot less than the 12 billion the government initially demanded, but its a lot more than citigroups own initial offer of 383 million to avoid a costly civil trial. According to a statement of fact that citigroup had to sign. The bank knowingly packaged shotty mortgages into securities. One citi trader told a fellow bank employ that citigroup, quote, should start praying end quote, because so many of the loans it packaged and sold were likely to go bad. They were faultily marketed to investors as Higher Quality assets. This comes after a 13 billion settle with Jpmorgan Chase in november. Next is said to be banc of america, which may have to pay fines topping 12 billion. The losses sustained by investors suckered by citigroup, helped trigger the worst financial crisis since the great depression. It happened because mortgages were bundled together by the thousands then parcelled out to unwithing investors. That in itself isnt bad, thu the banks represented the entire bundle as safer than it really was. The global flow of credit came to a virtual stand still. You know what happened next. Companies strapped for cash shed expenses as quickly as they could. That meant laying people off. Folks who lost their jobs couldnt make their mortgage payments. It triggered a near Global Economic collapse. We are still paying the price. As it turns out, citi reported its earnings today for the three months ended in june. The bank said its profits plummeted 96 compared to the same period last year, thats thanks in part to 3. 8 billion that the bank put aside in anticipation of todays ruling. That turned out to be pretty optimistic. No matter because investors appeared to be relieved. Citis stock gained 3 in trading today. Still citigroups troubles may not be over. Eric holder said todays settlement doesnt absolve the bank or any of its employees from potential criminal charges in the future. In the meantime where is the money going from the fines . Mary snow has that story. Reporter as the 7 billion settlement, the largest chunk is a fine. It will pay 4 billion to the justice department, 2. 5 billion will go to consumer relief, which includes things like principle reductions on financials of the five states designated to get money, california will get the most with 102 million. That money can also help consumers. Citigroup is just the latest major bank to pay billions for actions leading up to the financial collapse of 2007. In late 2013, the department of justice and Jpmorgan Chase reached a 13 billion settle. In 2012, the doj settled with five bank and Mortgages Services for 20 billion. The potential is certainly for hundreds of thousands of homeowners and borrowers at the end of the day with all of these resolutions to be helped by the consumer relief that we have in these cases. First reports from banks involved in the 20 billion National Mortgage settlement indicate roughly 600,000 home owners received Loan Modifications or refinancing, but that number has net to be independently confirmed by a monitor overseeing sthet lment. One housing advocate says not enough home owners in trouble are getting help. We should be seeing a lot more people saying i had a principle reaction. A lot more people saying i got the go benefit, but were not seeing it. Prosecutors say they are not done and there are several several several institutions they continue to investigate. Mary snow, al jazeera. The governments new aggressive stance enforcing penalties big time is striking. But there are penty of questions that americans consumers and tax payers will to ask. Many people want to know why no senior bankers have gone to prison for their role in bringing country to the brink of bankruptcy. This is the weirdest part of this. Some people say these settlements are a bit perverse, because the people who really paid are the homeowners. Anybody who made bad decisions back in those days isnt paying a fine. Thats true. Thats correct. And thats part of the issue. Thats also part of the glorious portion of today. The shareholders did earn 0. 03 per share. They put aside enough money to give their shoulders something to look forward to. They were short. Yes. But the bottom line was it was up so they are happy. Yes. It was. This is a loaded question because what is fair and what isnt fair . Citigroup is making the case to pay 7 billion, given they had a proportion at itly smaller role in the debacle as they argue, this is too big of fine. Yes, wall street is arguing that we were smaller therefore we should pay less. However, thats exactly what the department of justice wants to get away from. They want to get away from the ideas that your size means this is what your punishment will be. They want the punishment to be what you did not how much you did. And the evidence was strong . Yes, and i think the department of justice is almost scared to bring up criminal charges in 2001 criminal charges were brought in themron case in 2005. And all of those charges were overturned. So you face destroying a company in the process, that every single one of those emails matters, and you need a jury understand thats the thousands and thousands that were pored through in evidence. Yes, the attorney general has left the door open to say criminal charges may come. It used to be in the old days that you would have these is the lmentes and you did not admit or deny any responsibility. Now hes making them say, yes, we did this, and he is not saying you are absolved. This is correct. And i think the department of justice will act on further charges based on how wall street acts as a whole rather than the individual banks. What is your sense of as you saw in marys story, we are dont really have a sense of where this money goes. Were at 45 billion in settlements now, and by the time all of those ones you just mentioned go through, we could be close to fines. I dont think there is a sense this changes anything, but what is quite interesting is that they said this must go to relief for real human beings that can go to real destination destinations. And it must be done by 2018. So the department of justice in this particular settlement said 2. 5 billion has to go directly to relief that people can identify, go into lenders that they can speak to and say im claiming my portion of the citigroup settlement. So i think while its not real y an overall feeling, they are allowing people to feel some consolation. Is there any sense that the banks are Getting Better at sounding less tone deaf in wrong. I think thats a difficult thing for banks to say. Even with b p they did not want to say what we did was wrong, but they will say we will take responsibility. Polythank you so much for joining us. Thank you very much. All right coming up, manufacturing in america comes full circle. Companies like the one that make the houla hoop you see here are trying to bring jobs back to america. Ill tell you why that is easier said than done, much like what my colleague is saying here. That story and more as real keep it here. Families ripped apart. Racial profiling sometimes they ask questions. Sometimes they just handcuff people. Deporting dreams. Destroying lives. This state is literally redefining what it means to be a criminal alien fault lines Al Jazeera Americas hard hitting. Theyre locking the doors. Ground breaking. We have to get out of here. Truth seeking. Award winning investigative documentary series start with one issue education. Gun control. The gap between rich and poor. Job creation. Climate change. Tax policy. The economy. Iran. Healthcare. Ad guests on all sides of the debate. This is a right we should all have. Its just the way it is. Theres something seriously wrong. Theres been acrimony. The conservative ideal. Its an urgent need. And a host willing to ask the tough questions how do you explain it to yourself . And youll get. The inside story ray suarez hosts inside story weekdays at 5 eastern only on Al Jazeera America we are living in weird economic times. The u. S. Economy looks and feels very different depending own which barometers you are looking at, and how granular you get. The job market provides a good example. The u. S. Economy created 288,000 jobs in june. That is the fifth straight month of 20,000plus job gains. A feet that has not been seen since the tech boom of the 1990s. That is the view from 10,000 feet. Drop down 5,000 feet, get a closer look. Things get cloudy. The number of people working parttime because their hours have been cut back, increased by 275,000, to 7. 5 million in june compared to may. The government says these people ar are working parttime for economic reasons. It raises the question of why the u. S. Economy isnt creating more fulltime jobs for people who want them. Lets look at another troublesome fact about americas ground. Even though were five years into a recovery, wage growth is not robust enough for help middle class workers. Average Hourly Earnings rose just 2 compared to a year ago. Barely keeping up with the rate of inflation. Thats a problem. The job market and wages are just part of this picture. There are plenty more, including a stock market that continues to reach records but whos gains are not being felt by the 45 of americans that dont own stocks. Or the rebound Housing Market where the homeownership rate is now below 65 for the first time in years. The devil is in the details thats according to chief economist at a security company. I talked to him about the unbalanced recovery. The problem really comes down to two things. The global issue, where we have excess supply of goods and services. And then we have the tierney of threemonth earnings, which Means Companies have to hit these double digits earnings target every three months, and the easiest way to do that is squeezing back costs, and the biggest cost is labor. And now we have a record share of National Income going to the corporate sector as opposed to the labor sector. And thats why you get the unevenness in the economy. Because those people who have the assets, who are the owners of capital are reaping all of the rewards. If there were a political show, which it isnt, you would have somebody saying this isnt fair. Im not thinking about fair right now. Im wondering about what the longterm effects on the economy are . Well, you begin to become more like europe. You wind up with an economy that winds up are growing at or about trend. Worse it winds up as a japan scenario where you have inflation that cant accelerate growth. And or the asset holders begin to suffer as well, as you start having a downward spiral. The asset holders. The top 5 or 20 , whatever you want. The issue is until this becomes a problem, they tend to control the levers of power, i dont mean to say anything bad about it. Its just the way it goes. Until they see this inequality, this lack of wage growth as a major problem, were not likely to see change. What is the best argument to them to say this will come back and bite you . They are already starting to sense it. When i get out and talk to corporations and the chief financial officer, the ceos, the operating officers, there is this growing sense that something is wrong, that they are fighting against headwinds that they just cant figure out what they are doing with. And then have children in school or going to school and they are sitting there with student loan debt. And they are beginning to see what is the real outlook for my children going forward. You are starting to see that shift into the discussion, and what do we do about it . And the real answer is, you have to do something outside of the bounds of the threemonth tyranny of earnings, and no one that. There are so much things we can do, and then there are things from the outside. Downward wage pressure, because there are lots of people around the world who will work for much less wage than americans will. How do you counter that pressure from the rest of the world . Thats a real basic problem. On the other side of it should be a fiscal policy profile that is designed to give relief to allow households to have more spendingable cash and focus more on domesticrelated products rather than imported products. But the political environment isnt allowing us to get it done. And the Federal Reserve is the one engine that has been trying to get things going. Now you have a mix in the federal Federal Reserve, and they are starting to pull back that stimulus. And i think thats why you saw the First Quarter with negative gdp, because the Federal Reserve is taking some of that stimulus away, and the economy has him. You paint a bleak picture if we dont fix this. But in fact you are optimistic that the economy is dynamic. If you were running for office this year, and you were to say here is how we make a better economy, what are some of the basics . The first thing is basically i would change the tax laws. The problem with americas threemonth tyranny of earnings. If i change the capital gain tax laws, where anything after five years a tax free, suddenly you have a longer focus. Youll be getting ceos, being questioned, what is your fiveyear plan. I bet if you ask 90 of them today, what is your fiveyear plan, they dont have one. Right. And that is just the opposite of what you have happening for for example michael del [ technical difficulties ] you need companies to have that background where they can go and do things that may be less than a 10 return in the next year, but make a higher return over a longer period of time. Office . I would love to try, but i dont think they would let me. Okay. In the casino business no one bets in pink, as in pink slips. Ill have more on what atlanticty needs to do to survive. Plus hundreds of millions of dollars to clean up space. Ill tell you how they plan to do it and why. On tech know, what if there was a miracle . Graces stem cells are in this box. That could save the live of your child. Were gonna do whatever we can would yo give it a try . Cell therapy is gonna be the next big advance in medicine tech know, every saturday go where science meets humanity. This is some of the best driving ive every done, even though i cant see. Tech know. Were here in the vortex. Only on Al Jazeera America. Drug companies are not kicking the habit of doing deals to lower their tax bills. The generic drug maker is buying a piece of abbott labs for more than 5 million. The Pennsylvania Company will reincorporate in the netherlands to lower its corporate taxes and free up cash that is held overseas. It gives them a wide array of abbott brands. And one of the largest inversion deals ever is on the table. They are close to buying the Irish Company shire for 53 billion. Here is a festering u. S. Health care problem fit for the emergency room. Visits to the er. Way too many people heading to the emergency room dont need to be there, but they often go there because they dont have healthcare coverage. That makes healthcare a lot more expensive for the rest of us. The hope is that obamacare will reduce some of that by giving more People Health insurance. In the meantime a partnership in the seattle area could cut costs and provide a model for reducing unnecessary er visits. Alan tell me more about what this is about. Good evening, ali. This is a big City Hospital and a small government funded community clinic. They are trying something new. This is a Pilot Program aimed at solving one of the more difficult problems in our healthcare system. Heart palpitations put this patient right where he should be, in the emergency room, getting a thorough evaluation. Im joe. Nice to meet you. And next door a patient with an infected toe is right where he should be. At a walkin community clinic. Receiving treatment from this nurse practitioner. Its taking the two entities and putting them together. Howard hopes to cut down on visits. Prescription refills, sore throats, ear aches, those types of things where you dont need to go into an emergency room. Reporter 95 of hospital visits reported as unnesz. And 11 are potentially avoidable. The law requires anybody coming to an emergency room receive treatment. But the personnel are not allowed to suggest that there might be alternatives that they could say go to the clinic down the way and receive a more appropriate level of treatment. But patients here might walk by the afterhour clinic sign and get the hint. Hopefully that might draw somebodys attention and say, sew, okay, maybe thats really what i need. Maybe i dont need to go to where all of the ambulance traffic is. The clinic pays the hospital a dollar a year in rent, and shares space used for other purposes during the day. The 7monthold Partnership Benefits both entities. The er is right there, in case walkin clinic patients have serious problems. And the clinic gets to see more people who they can help get into the system. We are helping keep people out of the er who dont need to use those resources, and getting people into our organization, into healthcare, which is what we want to do. Its a partnership both hope can be a model for us. Follow us. We have worked out some of the clin kinks, and see if you can apply it in your region. Reporter both are hoping to provide the right care at the right place at the right price. We dont have statistics from the hospital yet. But Linda Mcveigh at the clinic says they have seen 3,000 patients since they opened their doors. Them. Alan, we know emergency room procedures are expensive. In doing this, does the hospital risk giving up some revenue stream to this clinic . This they do admit that they might. And it might be a problem in the shortterm. Those visits from my research can range from 900 to 1,300 in a middle range. So that is a lot money that might not be coming into the hospital. But a lot of those patients are indigent patients using the emergency room as their primary care, and a lot of people might not actually end up paying foez bills if they can be siphoned off of the clinic next door. The clinic is set up to deal with medicaid, medicare, and people who can pay on a sliding scale. After an er treats somebody, they can suggest maybe next time try next door. Alan good to see you always. Thanks for joining us. You bet. With College Students struggling under mountains of debt, it is no surprise they are seeking companies to help them pay their loans. But today the attorney general called those companies scams. Those companies charge as much as 1,200 with promises of lower monthly payments, removal of wage garnishments and loandefault settlements, but matgan says those firms do little more than fill out applications for borrowers. No comment tonight from the companies. Lets bring American Manufacturing jobs back to america. Thats easy to say, but not as easy to do. Ill tell you why, using houla hoops coming up. Al Jazeera America presents a global finacial powerhouse the Roman Catholic church, they have an enormous amount of power accusations of corruption. There is a portion of the budget that takes care of all the clerical abuse issues. Now we follow the money and take you inside the vaticans financial empire. When it comes to money, this is one of the sloppiest organizations on earth. Al Jazeera America presents. Holy money only on Al Jazeera America its a chilling and draconian sentence. It simply cannot stand. Its disgraceful. The only crime they really committed is journalism. They are truth seekers. All they really wanna do is find out whats happening, so they can tell people. Governments around the world all united to condemn this. As you can see, its still a very much volatile situation. The government is prepared to carry out mass array. If you want free press in the new democracy, let the journalists live. Volkswagon says it will build a new sport suit illty vehicle at its plant in chattanooga versus its company in mexico. Last week the United Auto Workers voted for a new union in chattanooga. And vw says it will recognize the union if 50 of the workers join. There has been a decadeslong decline in u. S. Manufacturing jobs. Recently there has been a lot of talk about manufacturers planning to bring some of those jobs back to the United States. The boring name for that is reshori reshoring, but its an important concept. And it is driven by a variety of things. One is may labor isnt as cheap in mexico as it was. But there are significant challenges facing businesses hoping to bring jobs back to north america. Reporter in the 1970s one in four American Workers held some sort of manufacturing job. Today only about one in 10 oclocks in at a factory, and few will consider joining these fields. Americans earn more than Chinese Workers in absolute terms. But over the last few years, chinese manufacturing wages have increased more than 330 . A restoring expert at the firm at carney. Sexy. But bigname companies are trying to change that. In response to higher labor and transportation costs, and desire to control quality, roughly 200 American Companies have once again started manufacturing some of their products on u. S. Soil. But this restoring trend comes with challenges. With a growth of 650 jobs since 2010, manufacturers are looking for skilled workers. In though United States, however, only 10 of the businesses are manufacturing. Difficult. Today workers require math, science, and Technical Skills to operate complex machines. Another challenge has to do with the machines workers are using. In the u. S. Machines have not been updated as quickly as their overseas counterparts. According to the burrow of economic analysis, on average, American Manufacturing assets and economy are 20 years old. Its the aging asset base which companies havent spent enough to maintain and keep up they productivity levels. In the 60s, 70s, and 80s, overseas. The relationships that the manufacturers had with these suppliers have severed. They dont have those contacts. Many suppliers have scaled down their operations. Reshoring companies could initially face higher labor and manufacturing costs, which could hurt their bottom line, yet its a risk come companies are willing to take. There is the concern that higher u. S. Labor and production costs may mean higher costs for consumers. But some surveys have suggested that consumers are willing to pay more for products made in america. Walmart has pledged to put 50 billion more towards americanmade goods on its shelves over the next ten years. Lets talk now to a small california manufacturer who makes fitness hoops like well, i dont actually have one with me, but youll see it in a second who has jumped through hoops. It brought all manufacturing back to the United States recently. That has helped create six fulltime jobs at the companys facility in venice beach, california. Joining me is the founder and ceo of hoopnautica. Thank you for being with us. You just heard the piece. Tell us why you brought your manufacturing back from china . Were very focused on producing the highestqualify product that we can, and the problems we were incurring working with our manufacturers, were outweighing the deliverable we wanted to provide our customers with. You had some issues in fact. Somehow your design ended up in somebody elses hands and product . Yeah, our manufacturer wound up providing our tooling to another manufacturer just down the road, and then our knockoff product started getting produces less than a few blocks away. And they dropped the price lower than what we were paying to manufacture our product with, so they started approaching all of my distributors and offering them competitive pricing to that which i was offering them. Eventually we just started buying our own knockoff product to save cost and i thought that was ridiculous. It cant possibly be we understand that labor prices and costs are getting higher in china, but were not at parity, so it has got to be costing you more. I dont have one of your hoops. So show me yours. This is mine. Tell me about your houla hoop and what it costs and what it costs to make it here versus china. This would cost me about 2. 50 more to make it here than in china. So now we source the Raw Materials locally in the United States, and we have a labor force in venice that puts the hoops together and wraps them very carefully and with a lot of love. Our hoopers really depend on us to put out a highquality doing. Has this affected the price that you charge for these hoops . You know, we kept the price the same and we, you know, didnt make as much margin in this product as we did originally. But instead we decided to really focus on investing in to our teachers across the United States, and in our training programs, which has a higher profit margin for us. Lets talk about mexico. Theres some mexico involved here. And you are go move some of this manufacturing to mexico . Yeah, we have had issues of scaling in the past, where we havent been able to manufacture all of the hoops we needed in venice. So thats why we originally outsourced to china. Now we have a relationship with a manufacturer in mexico, where if we need to produce many, many, hoops, we can meet those demands by using our studio in venice and mexico. I have my houla hoop here. Its quite fantastic. The last time i had anything to do with a houla hoop this seems much more advanced. They are weighted, so they are designed for adults bodies. Just the weight of the hoop alone is going to make it easier for you to make it go. I cant see if its now . No, that would cost us some [ laughter ] what is your goal in the end . Are you going to be manufacturing in different places . Some in mexico . Some in california . Or will you go somewhere else in the states . This i have to tell you, i really enjoy manufacturing, you know, right close by to home. I my l. A. Teacher trainings are now within 30 feet of where we produce all of the houla hoops, and its really fun to play mr. Rogers neighborhood and take everyone through the factory. But as we scale, it will be wonderful to at least control part of the manufacturing at home in venice, and outsource mexico. Gabby good to talk to you. Us. Thank you so much. All right. Very bad luck in Atlantic City as casinos give up the game and leave new jersey. Plus the sky high cost of cleaning up space junk, why it has to be done, and how the heck you do it. Stick around. Well be right back. Saturday prop 8, really made us think about this process of coming out. Meet the committed couples gay marriages, straight marriages. Have the same challenges. Its all about having the same options as everybody else. That fought for equality saying i do changed everything. Every saturday, join us for exclusive, revealing and surprising talks with the most interesting people of our time. Talk to al jazeera saturday 5 eastern only on Al Jazeera America th. Al Jazeera America. Atlantic city has been on a losing streak over the last couple of years, and the odds dont look like they are changing any time soon. The Trump Plaza Hotel and casino, plans to shut its doors for good in september. It is now the fourth casino to close or threaten to close its doors since 2013. And the purge may not be over yet. Joining me is a reporter with the philadelphia inquirer. Thank you for joining us. What is going on in atlanta city . What is going on here is competition. And basically you have got this ring of massive competition now in Atlantic City that really exacerbated when pennsylvania opened its market in 2006. Pennsylvania has now 12 casinos, and the philadelphia suburbs, are a were a substantial feed market for Atlantic City. You lose a third of your base from pennsylvania, and you lose your other third from new york, because they have their own casino and racetracks, and you are down to nothing now. Basically what is happening is there are too many casinos and not enough gamblers to fill them all. did Atlantic City do anything wrong or is this just what is happening around Atlantic City. I talk to several gaming analysts, and they said you cant stop competition when all of these states are legalizing it, and making it their priority to get casinos. And basically the fault for Atlantic City, is when the first casino opened resorts to 2006, they were Just Cruising along, making money hand over fist. In 2006 they made 5. 2 billion. They have made over 40 of your revenue stream has just been spliced off and it isnt coming back. But the problem is to answer your question directly is Atlantic City didnt reinvest in doing all of these other things now that it is forced to, develop its beach front, more concert venues, more convention halls, and now its scrambling, but has no money. So now what do you do . To some degree the remaining casinos, and some are newer and fancier will benefit from the fact that there will be new casinos, but that money isnt there to invest and make it a designation like vegas did. Atlantic city started to look tired and warn out, and now other options exist. Absolutely. Thats exactly what has happened. So the big difference with las vegas, is Atlantic City is predominantly a day trip drive market. Youll go to vegas for four or five days and stay in hotels and do your thing out there, and you are willing to spend the airfare to do that. But Atlantic City is a drivein market. You have the opportunity to build things up to people want to be there for two or three days, but people are staying in philadelphia to gamble. They are saying in maryland if they are from maryland, to gamble. So that drivein component has been decimated. Because why would they drive 60 miles to Atlantic City to philadelphia, when you have sugar house down the street 20 10 minutes from your house. Is there an obvious solution . Is there a market Atlantic City can target . Is there some solution . Is there something on the table that can help revive Atlantic City . City officials like the major envision creating a beach resort, where you have more things to do with the family, nightclubs, entertainment, lots of beach concerts. But here is the problem, three months out of the year they make a lot of money, but what do you do in the winter . And thats where Atlantic City is having a very difficult time competing with the warmclimate places you can go, including las vegas in the wintertiwintertime. And people arent flying to Atlantic City. You dont have an Airport Infrastructure to support people coming in. So you have all of these infrastructure problems. And right now the best thing you can hope for is to go after midweek conventions. People from baltimore to stay there and fill the hotels and keep them open in the wintertime. Right now its looking very grim, unless you can change this around and get them there beyond the summer months and beyond friday and saturday night. Suzette, speaking of weather, the weather has stopped you from getting to the studio, but thank you very much for being here. Thank you for having me. Water is fast becoming a precious precious comedy out west, and nowhere is that more evidence than in las vegas. Northern nevada wont cooperate with the plans. Reporter home on the range, and the skies are not cloudy all day in nevadas cowboy country. A few hundred People Living an oldfashioned life. Tom bakers family grows alpha fa, corn, wheat, and oats. Water is the limiting factor in any kind of growth, whether its agriculture or the cities or any kind of industrial growth, and if our Water Resources are depleted at all, well laoing lose things like this pretty meadow and a lot of area. Reporter what tom baker wor worry about is this, 300 miles away, a dee hydrated las vegas, plans to build a pipeline to suck the water out from under the residents the feet. This is a balance that you have to have between where are you going to allocate your resources with where are you going to get the most benefit. Reporter locals consider this a water grab. Some call it a vegas pipe dream. But Southern Nevada believes northeastern nevada could provide a third of its water supply. Farmers fret about depleted resources and say they dont leaves. This is an area where the blowing. Reporter once marshland, when an earlier plan drained this place dry it killed vegetation and life. Almost the entire community in snake valley has come together against this pipeline. This event raises money for legal fees. Rural nevadians believe the best court. We are in court at the state and federal level, and we feel we have a very good chance in both areas. The environmentalists and ranchers generally arent on the same page a lot of times, and so we have had it has brought us all together. Reporter the Southern Nevada Water Authority has spent millions of dollars buying up nearby ranches and their accompanying water rights. The bakers decided not to sell. We could make a lot of money, but we dont know what we would do with it, and the thought of selling you know, we really dont want to do that. Reporter away from the glitz and glamour, the bright lights of las vegas, lies the rest of nevada. The people here will fight to keep their water before letting desert swallow them up. Up next. Space junk. They are prime targets for collisions. Im going to tell you what the government is doing about it. Al Jazeera America presents yeah, im different. I wanna do what god asks of me. 15 stories one incredible journey edge of eighteen coming september only on Al Jazeera America Six Communications satellites were successfully launched today. It is part of 17 satellites the company has to have in orbit by the end of the year. While the launch was a success, todays operation wasnt perfect. They hoped to reuse the rocket booster that sent the rockets into space. But the booster didnt surprise the launch. There is much celestal garbage threatening the satellites we use for gps and tracking. So the government has launched a program to help get rid of the debris. Jake what is this system meant to perfect . Basically, ali you are familiar with the opening scene of gravity, where all of this debris comes in and wipes out the Space Shuttle and all basically earthbound communications. That is a real thing. Its called the kessler cascade. And it is happening now. There are collisions going on up there, and debris falling out. But it takes decades, not the first few minutes of a movie, so the department of defense realizes there will be a greater amount of junk as the decades go by, and we have to get out in front of this now. This is not going to be attacking these little pieces of junk in space. Right. I understand there are more than 23,000 pieces of junk bigger than 4 inches in space. What is it going to do . Its like an air Traffic Control system. Thats right. This isnt an owner dome. Its an air Traffic Control system. And before now the system we had could only track about 23,000 objects up there, thats because it was the only ones bigger than 4 inches. And now there is am build by Lockheed Martin that can track objects a couple inches smaller. Thats because we have seen this everincreasing number of collisions in 2007. The chinese blew up a defunct satellite and added a thousand pieces of debris to the mix. So were getting to this place this this saturation point that kessler theorized would happen and it is happening now, by god. We have the system of adjusting where satellites should be, is there a better system in the works . Something that would allow us to clean up space . Obviously this isnt going to be enough. Everything falls back to earth. Thats how you destroy a satellite. And you cant even really get a satellite up there. They wont give you the necessary radio connectivity with your satellite, unless you canproof that you have a plan for tipping your satellite back into the atmosphere and burning it up. Theres now several new systems various space agencies are seeing things like this footage that just came out of australia last week of space debris burning up in the atmosphere. This was a rock et launch, and it turned out to be just space junk. And all of these agencies are saying we have to come up with a system. The japanese launched this amazing system that sends up literally leash between two small satellites, and it will s p pieces of bebrie that cross their orbit. It slows down and falls out of their atmosphere. But there will be a legitimate industry opportunity coming up, where people will be deorbiting space junk on purpose. Wow. Jake thank you so much. Earlier on the show i told you about citigroups 7 billion settlement over accusations it cheated investors. Some of the settlement money will go as relief to consumers. Much loift go to homeowners in states hit hard by the bursting of the housing bubble. Todays announcement got me thinking about the victims of financial fraud. Bernie may doffs ponzi scheme was thought to cost investors billions, but later it was fonted that only 17 billion in principle was invested in the scheme. Madoff has been sentenced up to 150 years in prison for his crimes and a trustee was appointed to try to recover as much money as he could. And give it back to his clients. More than 5 billion has been returned to investors. Part of the problem is making sure all of the claims against madoff are legitimate. The other thing is making sure parties that receive money deserved what they got. Many investors pooled their money into feeder funds. This month the victims fund trustee lost a legal bit to try to go after foreign feeder funds, and he is trying to figure out his next move. To five years on, some money has been recovered and people who invested have only gotten some of it back. Thats our show for today. Im ali velshi. Thanks for joining us. Pass hopes for a ceasefire in gaza israels cabinet agrees to an egyptian peace proposal. Hello, im jane dutton with the world news from al jazeera. Also on the programme the Libyan Government says most of the planes at tripolis airport, 90 , have been destroyed by fighting with rival militias. Half a Million People have fled into russia from ukraine since fighting beg