that's like my version of seacrest out. remember when he used to say that? seacrest out. do you have one of those? do you say thank you, god?hour. stock markets in europe have been open for just about an hour now, and share prices are for the most part continuing to plummet. the markets are still reeling from yesterday's selloff worried about the u.s. economy. in syria, protesters promise to demonstrate again today as the military continues its crackdown on anti-government activists in hama. at least 109 people were killed

on thursday, and we heard from one resident in hama who said that number is at least 150. thailand's prime minister has elected yingluck shinawatra as the country's first female prime minister. her ruling party won a clear majority in the general elections, she is the sister of the former prime minister, thaksin shinawatra, who was ousted in a military coup. okinawa in japan has been visited by typhoon muifa. the cyclone dumped heavy rain across the region. it is now a category 2 storm moving west. those are the headlines from cnn, the world's news leader.

"world business today" starts right now. good afternoon, from cnn center hong kong, i'm andrew stevens. >> good morning from cnn london, i'm nina dos santos. fear and uncertainty flood the markets and the losses are piling up around the world. >> the u.s. recovery already on shaky ground, investors brace for the latest set of u.s. jobs figures. okay. let's get straight to those numbers now. in europe, where trading has been underway for just over an hour, this is how things are looking at the moment after yesterday's wipeout on wall street. the european markets are heading for another dismal day, though they have come back from some of their earlier bigger losses this morning. let's not forget that the leading european indices lost

between 3% to 4% yesterday. this is a follow-up. the fatcy down by 1.71. german stocks town by 1.3%. in asia, a similar story. it was a lot worse for some of the markets. the hang seng led the losers all day, but australia's benchmark s&p is not far behind. the hang seng down over 4%. australia also down by 4%. a very big move. commodities sensitive in australia, and commodities a leading indicator on what the thoughts are on the economy. in mumbai, the stock exchange there is still trading. it's also in negative territory. all around the globe looking bad. still the euro crisis is front and center. >> it is, indeed. as you were just saying, there isn't one market around the world that seems it is being spar spared.

that global selloff started in the united states on thursday, where investors took fright over prospects of a recession it was the worst day on wall street since the financial crisis in 2008. all three major indices plunged more than 3%. this was how the numbers stood at the end of what was a truly dismal day. by the close of session, a session that many traders probably thought would never end, all this year's gains, it seems, on those three indices have been totally wiped out. as it has with many of the markets across the world. many people are calling this a panic. this has been in the works for a while now, it was only on thursday that investors lost their nerve. behind a snap selloff, worries about the global economy and a recovery that seems really to have hit the buffers. that's especially true in the united states. jobs data has not given anyone

any reason to celebrate at all. initial jobless claims came out yesterday, thursday, they were hardly changed from june to july. that suggests companies are not hiring fast enough to drive a recovery. a big jobs number comes out today, a job rise of around 85,000, but that's not enough. then, of course, we have the european central bank. the euro debt crisis. the banks purchases of bonds were of portuguese and irish bonds, not the spanish and italian bonds whose yields have been approaching crisis levels. on the other side of the world, in japan, the central bank's decision there to weaken the yen on thursday demonstrated the law of unintended consequences it should have been a boon to exporters, and it was for a while, but to investors, well,

it looked more like a sign of desperation. just adding, nina, to the general fear in the markets at the moment. well, friday is not often a day you associate with fear, is it, but that's what's happening in the markets today. as we just mentioned, the european markets have been trading for a little over an hour. we are going to look at what lies ahead for europe. ftse 100 opened down by nearly 3%, and year to date some of these markets are down already. >> yesterday we were looking for some records of comfort from the ecb, instead what we got was that the european economic uncertainty was particularly high, which, of course, which really rattled the markets. then the token buying of a few of the irish or portuguese bonds and nothing about italy or spain. if we look at what the markets were doing now. you mentioned they were down 3% at the start, they have made

back some of those gains. down about 2% in london, dax, about 2%, paris made back some of its losses. milan fell the most, about 5% yesterday. if we look at what's happening there today in spain and italy, the markets, again, nina, in the red as we can expect mass panic selloff across the board. >> the other thing we should mention to viewers is that the yields on the ten-year spanish and italian bond are sky high. currently standing at about 6.5%. 7% is when it becomes too expensive for these countries. they could be facing a bailout. >> we've been seeing this whole bailout concept once again. we saw it with greece, portugal, possibly with spain as well. the concern now, a lot of people are asking this and we have spoken about this before, is

this the lehman moment for the eurozone? is this the moment no one wants to talk about? >> is it. >> germany is doing well. then you have the likes of spain, portugal and italy. how long can you keep bandaging up everything and keeping it together? that's a big question. is it too big to fail? maybe. but how long can you keep it going. >> keeping 17 nations with completely different economies going has always been the test that the euro faced. and the eurozone as a bloc. >> jean-claude went against the bundes bank to go against the portuguese. that is significant, isn't it? >> it is. it just seems like the problem right now in europe is a unity aspect. how do you come together on a

united front and pull this together? that's a problem. we heard angela merkel will speak to nicolas sarkozy again today, and this brings in the concept how do you keep the eurozone together? 17 countries with such diverse financial aspects. >> it who have been the $64,000 question a few years ago, i'm sure it's 64 trillion now. let's take another look at what happened here in asia today. going back over those markets, hong kong moving -- or dragging the markets down, suffering the heaviest losses, down 4.3%. the nikkei closing down 3.7. shanghai down more than 2%. s&p down by 4% even. let's take a step back for a moment and see how the region has done so far this year, we heard earlier nina said all the

gains in the dow have been wiped off this year. that's what the asian markets have done this year. for a long part of the year, early part of the year, the emerging markets were out of favor. they had been coming back into favor. the nikkei down 5% since the beginning of the year. all the markets down around about the same, except australia, 13% down, sensitive to the global changes and global economic conditions because it is a strong commodity-based index. here with me in the studio to look at where things go from here, is mike koenen. if there's any similarities that you're seeing or echos that you're hearing from 2008, the lehman's collapse, the market panic. >> the only thing is people in asia are looking at the situation wondering why it is effecting us like it is this

started off as a budget discussion in the united nations, raising the debt ceiling, and asian markets are selling off. if we go beyond that, we don't see similarities. we see the economies in this region in reasonable shape and at the moment it's more of a crisis of confidence in the equity markets as opposed to a crisis of the financial system, which is what we were facing back in 2008 and a global economic slump, which we are not there yet. >> you are saying it's more about sentiment than fundamentals. >> yes. >> so sentiment is such a powerful driver any way, where would you say we go from here? >> we came into this year thinking that the u.s. economy was going to surprise on the upside. and we went through the first quarter and beyond seeing evidence to support that. we suddenly hit the brick wall realizing that the u.s. growth is going to be sub par, below long-term trend levels, and most in the market expected that to

be the case but lost track of where we were in that argument. suddenly we have been confronted with the fact that the u.s. is a lot weaker than we thought. the administration has been blaming that on the japanese earthquake and on the high oil price. the most recent revisions in gdp numbers out of the u.s. suggest this soft patch was hit earlier than those two events had a chance to have an impact. now we are facing the reality, the u.s. is a little bit weak. >> little bit weak and with no sign of where the upturn will come from. it's not going to come from europe. the chinese economy has been slowing down as interest rates rise there. the global growth engine is sputtering as you're saying. where will it restart? it look like it will weaken further, doesn't it? >> certainly short-term sentiment will weaken a bit further until we see some sort of consensus in europe and perhaps more bipartisan in the united states around the budget issues.

in terms of the longer term trends, they are already set. we are seeing this shift away from dependency on developed economies and much more about growth in the emerging world. >> but they're still linked. >> they're more than linked. clearly we are dependant sector. markets where we have heavy amount of retail involvement, retail investor involvement. if you look at hong kong, taiwan, korea, these markets, we saw investors heading for the exits today. >> where do you put your money? >> short-term, we have seen that rally in so-called safe havens, gold we saw rally significantly in the last few days. sold off a bit now, still that will attract more dollars, incremental dollars. treasuries attracting more dollars, even though you have

this specter of credit downgrade. ultimately as we get through the summer and get more clarity around the scope and shape of the recovery in the u.s. and the situation in europe, i think money will flow back into emerging markets. >> for the moment, keep selling. >> you can be bargain hunting, there's good stocks out there, but potential for more downside. >> all right. thank you very much for coming in. nina? when investors get the jitters about shaky equity markets, typically they head to gold and bedrock currencies like the swiss franc pushing up the prices but as the stock market row unfolded on thursday, the price of gold fell. it lost $37 at one point off a high of more than $1,680. since then the price of gold has staged a little bit of a comeback but is still off its

highs as investors don't see a safe place at parking their money. up $15.10, but well shy of 1,680 an ounce. let's look at oil. it's down from the high of almost $114 a barrel at the end of april. it lost more than a quarter of its value since then, already trading down $1.60 at 85.06. quite a market of this fall has come off the back of the stock market slump with investors betting on slower growth. and the jobs numbers today will also effect commodities like this, particularly oil. it's all about the jobs numbers, isn't it? we've seen the selloff in the world markets. investors are looking for any good news. we have jobs numbers coming up. will it lift spirits or continue to dampen spirits? well have predictions just ahead. stay with us.

a sea of red. markets around the world follow wall street's lead. you're watching "world business today." investors may have something to look forward to this friday, that's the u.s. employment figures. nonfarm figures are due out in new york, and they may help to ease the panic so far, but jobs data has been up and down so far. let's have a look at the numbers in more detail. for the month of march, the united states economy gained 194,000 new jobs.

that's above the 150,000 that actually it needs to create to keep pace with its own population growth. for the month of april, things got even better. the recovery gathered pace and added 217,000 jobs. look at what happened here. we saw an 88% slump between april and may because the united states added just 25,000 new jobs for that month. then in june, things seem to have gotten worse. just 18,000 new jobs were added. the betting is that july will see some kind of improvement on this miserable figure. let's look at what analysts are expecting. what they're forecasting is we may see a pick up in growth creation for jobs, adding about 75,000 new jobs. and in just over an hour -- four hours from now, what we'll know is we'll know whether these forecasts are right. but the different from 217 new jobs for the month of april to an estimate of just 75,000 new jobs is significant.

this is what people are worried about. the recovery is getting weaker, and the figures speak for themselves. >> absolutely so many hopes for a strong second half recovery in the u.s. as well. nina, it's interesting they talk about 200,000 as being the number where that will tackle the jobless rate, start bringing it down. a long way from that. exactly where is the u.s. economy losing jobs and where are new hires finding the best shot at work? felicia taylor sorts it out for us from new york. >> reporter: it seems like there's been a flurry of layoffs and it's reaching across a broad swath of the economy. planned job cuts surge 10 a 16-month high last month. it's a reminder of the dismal jobs picture in the u.s. with the tech sector, large-scale layoffs have been rare, but research in motion shed 2,000 jobs. cisco is getting rid of 6,500

jobs. also the economy may be stalling in the drug sector. merck is getting rid of 13,000 by 2015. even the defense industry is not immune. lockheed martin shedding 6,500 jobs. those are voluntary layoffs, but it is a sector that could feel more pain because of just agreed upon debt ceiling deal. borders is closing its doors so almost 11,000 people will be out of work. those working in the financial sector are the hardest hit. goldman sachs getting rid of 1,000 people, maybe more. credit suisse 2,000 globally. hsbc is reducing its work force by 25,000 employees. challenger gray and christmas, an employment consulting firm, says the financial sector has planned to cut 21% more jobs this year than 2011.

steve says it all comes down to the bottom line, that's profits. >> corporate america is trying to get itself to grow at high double digit rates but the economy is stuck in slow gear. the only way the corporate sector can grab a bigger share of the pie is if it starts to take away from somebody else, in particular labor. that's what it's doing. >> there are brought spots. google added about 2,000 jobs in the second quarter. union pacific is rehiring positions that it recently got rid of. about 1,500 new positions by the end of the year. health care still generates jobs, but not as much as before. health care employment has grown by about 13,500 in june. but that's the slowest pace since january. thankfully there is still job creation when it comes to small business. a new report by adp says small and medium-sized businesses, businesses with up to about 500 employees, created about 100,000 jobs last month, compare that to

larger firms with 500 or more workers which added about 9,000 new jobs. with an employment picture like this, it's not hard to see why the recovery is in need of a lifeline. mom and pop shops are also looking for a lifeline. coming up, richard roth shows us that what used to shine in new york, the side street entrepreneurs has lost its luster.

welcome back. you're watching "world business today" live on cnn. typhoon muifa continues to lash okinawa, japan. owen has been tracking the storm for much of today. how is it looking? >> we've been tracking it for quite some time it was a super typhoon a couple days ago, now it's a category 2 storm and lashing okinawa over the last couple of hours. this is a very slow-moving storm, west-northwest at 7 kilometers per hour. that's a problem, because of its position. the center of the storm is just to the south and west of okinawa island. so those inner rain bands here containing those dangerous winds have been lashing okinawa for the last several hours.

look at the scene on thursday as the system made a close pass. hurricane-force wind gusts over the last 12 hours here. this is a sustained, prolonged event here. not only are we dealing with strong winds but also torrential rains. classic trees there flying in the wind. that will continue over the next several hours as this thing continues to move off. look behind me at the rain tallies, upwards of 200 millimeters of water at the airport here. we've been gusting upwards of 130 kilometer per hour winds across oak nokinawokinawa. the core winds are close to the island. we will see gusty conditions there, and that won't subside for another 12 hours, think i. then where is it headed? i think east of shanghai in 48 hours. however, this is a cone of uncertainty here, and there is a chance that it could strike

shanghai, that is it could make a direct landfall here in the next 48 hours. one computer model forecasts is hinting if not showing that. so we'll watch this closely here. the warning center still insisting this will go to the north. and briefly to emily. emily has fallen apart across hispaniola but we could regenerate. look at the scenes in puerto rico as emily dumped a significant amount of rain there. and it may not be done. if you are watching us from the united states, from the state of florida, we could be dealing with a re-emergence of this tropical storm over the next few days. computer forecasts are indicating that. we will watch it closely for the bahamas and also for the potential threat of impacting with florida in the next three, five days. >> many thanks for that, ivan. andrew, stormy s yy skies o

markets as well. >> you could say that. still ahead, more on the uncertainty which is rattling investors across the world this hour. stay with us.

welcome back. you are watching "world business today." >> let's see what's going on in europe. 19 minutes into the trading session, here's where we stand at the moment. significant losses across the board. some of these markets opening down in excess of 3%.

so far i can tell you we have our eighth day of losses for world markets. world markets have lost $4.5 trillion on the back of concerns. andrew? >> extraordinary numbers. the index of global -- of global stocks is down 10% in the past ten days or so. that's officially a correction. gives you an idea of this selloff. though it's big today, it has been building. in asia, investors taking a hammering, particularly in hong kong. hong kong down 4.3%. all the markets getting hammered. shanghai getting away with most likely 2%. it wasn't just those big markets, if you look at seoul, taipei, mumbai as well, all taking big hits. look at taipei, 5.6%. closely tied to the u.s. economy in terms of an exporter is taiwan, that's why you see that big selloff in taiwan. how did the day play out on

wall street on thursday? it started bad and quickly got worse. take a look. >> yesterday's gains, they were just a mirage. we're watching stocks plunge. chipping away at investor confidence. the pace of selling for the dow pick up steam. >> this is a market you need to pay attention to when you have a steep delinement. >> 370 points. 407. massive plunge. continuing to take this massive plunge. close to two times as bad as the worst day we've had this year. >> people standing up there applauding. people at home not applauding at all. >> probably applauding because finally the end of the trading day came, and futures on the s&p 500 are pointing to something like a 1% lower open once again today in the u.s. the market jitters hitting on floors across asia as well. tokyo finishing the day a few hours ago. the nikkei closing down about

3.7%. the low the point since one week after the east japan earthquake. let's go to kyung lah in tokyo. you have the currency issues, you have the global economic issues now. >> reporter: certainly, at least if you're a trader today you felt like you can't win. one of the market analysts we spoke to said there was one word that summed up exactly how traders felt today, how the market felt today, and that is spooked. if you think of how japan ended the market day yesterday, slightly optimistic, up a quarter percent. the bank of japan introduced more monetary easing. when asia went to bed, things were looking good. then wall street came online, the dow plummeted, so investors in asia woke up with anxiety. they were very confused. they weren't quite sure exactly what led to such a large dip since a lot of the economic fundamentals, at least from this

perspective appeared not to shift that much. five minutes before the nikkei open, before the tokyo stock exchange officially opened for business, the economics minister here said europe, asia, and the united states needed to practice some good fundamentals, coordinated effort to try to make sure that the cycle of fear did not spread, that people tried to remain calm. when the tokyo stock exchange opened, we see what happened. it fell 4%. you see how the market day ended, down 3.7%. >> the japanese people, kyung, they have been in and around recessionary economic times now for close to 20 years, if not longer. do many of them play the stock market in japan or are the losses here more confined to the big institutional players? >> it is confined to more of the institutional players.

where you see the mr. and mrs. watanabe's playing the market. a lot of people pay attention to what the yen and dollar are doing. if you get out on the street and talk to people -- everybody knows about the yen. but when you talk about stocks and the nikkei, we're looking at the exporters. that's more difficult to conceptualize on the streets of japan, how an exporter losing so much money eventually translates to the hallowing out of production in japan. that, in turn, leads to fewer jobs. >> absolutely. at the end of the day, it's always about jobs. kyung, thanks for joining us. kyung lah joining us from tokyo. nina? andrew, this share selloff swept the world and dashed hopes of a recovery among investors everywhere on the planet, but there may be a spike in store when it comes to u.s. jobs numbers that are due out later on today. let's look at what analysts are forecasting. they are expecting the united

states economy to add about 75,000 new jobs in july after two months of very slow employment growth, indeed. we'll know in just under four hours from now whether the united states has managed to add a few more jobs than it did last month. as we told you on this show earlier on, that figure has come down from 217,000 just two or three months ago. >> yeah. another thing to point out, in the last couple of months, the jobs number has disappointed massively compared with what was expected coming well under that the economy left one street-level business in new york scuffling. the shoeshiners are having a harder time than ever, but as richard roth explains, they are more than determined to keep business from walking away. >> look at your shoes. how long are you going to ignore that? >> reporter: if your shoes are scuffed, you can bet don ward will let you know. partly because the recession has

roughed up the shoeshiners. >> the way the economy is now, it's fallen off bad. >> shine men like ward have adjusted their style so customers will warm to them. >> i initiate the contact and have to work harder because, yes, people have gotten away from doing their shoes because we're a society now of me, me, me, now, now, now, press a button, it's there. convenience. >> reporter: new york city is turning into the city that never shines. >> you need to clean those. >> he's very compelling. he's funny. i see him all the time. but as far as going and doing it, i'll do it at office, at the building. it's easier. >> people don't get their shoes shined anymore. >> reporter: grand central terminal provided shoe shine stands to almost eight shoe shiners 20 years ago that number dropped to three.

>> it was a business that was very, very common decades ago, around the city everywhere. we have the opportunity in the grand central neighborhood to keep them alive. >> reporter: as the old story goes, joe kennedy claimed he avoided the 1929 market crash when he received a stock tip while getting a shine. instead of wall street tycoons, it is now all the shoe shiners who need all the tips they can get. >> we need to get back to the way things used to be. i will be pitching clean your shoes. >> reporter: so these street-level businessmen are expanding their services. >> the majority of people wear sneakers and scandals, i now start cleaning sneakers. >> reporter: a fading profession may become a memory for consumers not willing to sit for a shine. ♪ there's a shine on my shoes >> reporter: richard roth, cnn, new york. nina, this volatility this

selloff looks like it's set to continue for some time yet. any way, nina and i will be back later in the day to bring you all the latest on what's happening globally around the markets. for the moment, that's it for this edition of "world business today." i'm andrew stevens. >> i'm nina dos santos. you are watching cnn. "marketplace middle east" is next.

this week on "marketplace middle east" a sigh of relief as the u.s. reaches a debt agreement but concerns continue especially with regional investors. and the trial of hosni mubarak. address he goes on trial in cairo, we look at what this means for the country's recovery.

after weeks of political maneuvering on capitol hill, they have agreed to increase the debt ceiling. later this year, bipartisan congressional committee will be tasked to come up with more specifics for the cuts that are be particularly painful. despite an agreement, there could be lasting damage. the world's rock-solid confidence on america's economy suffered a severe blow and investors in the middle east have been watching the debt debate closely. >> reporter: the u.s. debt deadlock had the international world on edge including the middle east. market watchers in this region like the rest of the world kept a keen eye on the u.s. debt issue. one of the main concerns here was the possible knockdown effect on the dollar because many of the middle east currencies are pegged to the dollar. it's a bond that's historic.

>> once the u.s. became the hedgemonic power in the region, the dollar became the de facto standard. >> reporter: the dollar has been on a downward trend falling some 17% since june of last season. >> they'll stick with it because it is a popular payment system and the oil market runs on dollars. the central banks and the gcc have been holding dollars through the massive inflation and political and fiscal problems of the 1970s. they rode the dollar up through the late '80s in the early '90s. >> reporter: as the u.s. debt debate heated up there were concerns about middle east investments into u.s. treasury bonds or t bills. the region's financial institutions are estimated to hold about $720 billion worth of t bills, though some put that number near a trillion.

the saudi central bank is said to hold more than half of those. the threat to the u.s. triple-a debt rating sent bond prices lower, but economists say a selloff is unlikely. >> i think it will be difficult for gulf investors that are invested in the u.s. t bill environment to actually exit it to find alternative. >> reporter: but confidence if the mighty u.s. economy has eroded. europe is reeling from its own debt crisis, and the rest of the world is still emerging from a global recession, which means the options for investors may be limite limited. >> he ruled egypt for almost 30 years, but this week deposed president hosni mubarak went on trial for his life. mubarak faces several charges including corruption and allegations that he ordered the killings of anti-government protesters this year. but will the trial bring with it

a new beginning for the country? i sat down with the founder of citadel capital to find out what the next 12 months might have in store for the country. >> i think the next 12 months, the growth will be lower, probably. the reason why it's lower is that investments at this point in time are not northcoforthcom. they want more visibility as far as the constitution, as far as the parliamentary elections, presidential election before they commit long-term capital into egypt. >> what is the biggest challenge now? do we have a clear line of sight or a staircase on the political front of what will happen? constitutional reform? parliamentary elections and presidential elections? it doesn't seem clear now? >> one of positive aspects that are happening now, is that at least we have visibility on the political process. that will be parliamentary

elections, there will be constitutional changes, and, three there will be presidential elections. so, if you have all three, and you have a clear time line, relatively clear time line, i think that process will take 18 months, 16 months, 20 months to unfold. at that point at least you have visibility on the political process. >> huge knee-jerk reaction, the people who go to tajir square, and you can't govern on a knee-jerk reaction. isn't that a huge danger for foreign investors? >> i think it's extremely important to have elected governments. you need people who have the authority by the people to be able to govern. at that point in time they can take painful decisions and move the country forward on a clear economic path. at this point in time, as you said, we have knee-jerk reactions. that is causing a lot of

consternation. >> the rule of law s it important to have it in place, meaning that the former cabinet, former president, his two sons, have to go through this legal process? is it the right thing to do right now? >> i think it is the right thing to do, but we have to differentiate and be careful. any government, former government officials who did not benefit from the decision that he made should be given amnesty. >> how about the challenges against fraud for president mubarak and some of the other cabinet members? do you pursue that for the next 12, 24 months? >> at this point in time, i think there was corruption in the previous government. we need to examine the policies that were right and to pursue them and to build on them, to build on institutions that were right. to build on ideas that were right. and not to take everything that was from the previous regime and throw it. having said that, corruption is

a clear red line as far as i'm concerned. in other news, saudi arabia is looking to top its neighbor the united arab emirates. the saudi billionaire unveiled plans to build the world's tallest skyscraper in jeddah. it will cost $1 billion and take 36 months to complete. up next, in israel, how protesters are taking to the streets over rising prices. and a crackdown in syria leads to more sanctions. man on tv: ...rbis and 36 homers. swings at the first pitch and fouls it deep back into the stands. [ding] [fans whirring] announcer: chill raw and prepared foods promptly. one in 6 americans will get sick from food poisoning this year.

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became a symbol to many in the region for democratic and political reforms, now neighboring israel is facing ongoing calls for change. thousands of people took to the streets this week over soaring costs for housing, food and other basic goods. >> reporter: it was an impressive display of people pow their some likened to israel's tahrir square. more than 100,000 middle class israelis taking part in a nationwide protest to express growing resentment at the government's handling of the economy. >> enough. remember there are people. it's not money. it's people. it's human beings. it's feelings. >> they open too many doors for tycoons, for rich people, for mergers to make their own rules, to take our money, to get

richer. >> reporter: the protests had been going on for three weeks and have been centered in makeshift tent cities that activists have raised in urban neighborhoods throughout israel. the movement began with opposition to escalating real estate costs because of a housing shortage. and have broadened to include complaints about increasing prices on everything from education to health care to cottage cheese. the speed and scale of protests in a country that enjoyed steady gdp growth and low unemployment have taken israeli policymakers by surprise and left them scrambling to come up with a response. >> you know, when somebody says we want a house here tomorrow, you can't meet that demand, but that's-- that's, any way, part of the political rhetoric. that's not a real demand. >> reporter: real or not, the protests are having a political

impact. israel's prime minister, benjamin netanyahu has created a special group to look at the problem. the rapid rise of the tent city movement has prompted a fierce debate in israel about what sort of country it wants to be. a regional beacon of free capitalism or staying in its socialist past. >> it increased the struggle on the welfare state, whether we shall improve it or we shall go to the direction of the united states. >> reporter: for now, many of the protesters can't say exactly what it is they want changed, but have pledged to stay in their tents until they're confident that the government's response is serious.

kevin flower, cnn, jerusalem. a bloody beginning for ramadan as syria cracks down on protesters. human rights activists say nearly 2,000 people have been killed since the uprisings began in march. in response, the european union slapped more sanctions on syria, imposing a travel ban and an asset freeze on a number of syrian officials. for more about the program, visit our website, cnn.com/mme, or send your comments by e-mail to mme@cnn.com. you can check out our webpage in arabic as well at arabic.cnn.com/mme. that's it for this edition of "marketplace middle east." thanks for watching. we'll see you next week.