provisions, something that says that if there is a problem, you have a whole system that does not grind to a halt. the approaches uniform across exchange. you don't have a situation where you are turning it off in one place. it just to clarify, the iopb's, these are calculation of the -- you can pull this up and look at it. this is an indicative value. there are many times where this is the price discovery mechanism because they are calculated differently. . .

>> self-help was away that you could avoid a market who was trying to get their own market share up by always being in slow mode. there is an inherent conflict of interest between the exchanges and self-help. if you ignore one market, presumably you get more market share. all exchanges are basically for- profits enterprise and that's a big difference from when this will was put together and some of the tenants behind it were formulated. i do think your question that lrp's are a reasonable pursued and should not be pushed on all markets. if we have learned anything it's that taking time and making sure we interest and exactly what is going, whether it is seconds or minutes certainly could be

debated and it's not a bad thing. if we could get to a market that amongst all the exchanges supported this ability to take inventory of things after you get to a certain price dislocation, that would be a workable and efficient thing for the market. >> we would be interested in seeing something as simple as if you are going to declare -- what are the reasons for it? so that there is a clear trail as to why it was called and was a for a good cause. >> there were hundreds of day. >> there is a record-keeping requirement and a justification requirements when it comes to self-help and i think there are some specific standards before

an exchange or market can do self-help. >> on the self-help, i think there was a provision, as i understand it, that if it is longer than a second you do not have connectivity then they can go on to self-help. >> he keeps trying to get to etf's and keeps getting hijacked away. he had a definitive record on circuit breakers when it comes circuit breaker road. what did you mean by having circuit breakers be the same for etf's as for stocks? >> our view is we were concerned early on when the pilot rolled out about having stocks in the circuit breaker road and not the etf's that might have those in

the basket. if there is a systemic issue, something that is larger, on any given day, one stock or another stocks might not be traded for one reason or another. if one or two stocks stopped trading and it is for a known reason -- news just came out that they can get their heads around it, that's not going to affect the ability to do that their pricing level. you are in price discovery mode. maybe that works for the short term. but in the long term, there should be a synchronization between what is happening and stopping the etf's as opposed to the underlying securities. >> obviously, as the pilot moves to a second phase, a large number of etf's will be pulled

into it. being subject to the pause as the pilot is expanded, do you think it should stop when the stocks in the etf have stopped? >> that would be extremely difficult to put together. it came down to we would not want broad swaths to stop trading when etf's are not there. there should be the safety net beneath the etf just like there are between the securities that make up. >> one thing the script here that the sec and we are looking for are your thoughts on -- that this group here and the sec were looking for are your thoughts on -- we're going to get your advice in a timely way. we're going to get that on the are these etf start to blur into that.

if you put a 5 minute pause -- what does that mean for the overall market? there is a continuum from individual stocks to a small basket etf's to the overall market. i raise that as a question for this panel that i think we're all going to want to get your advice on. >> one of the things many of you brought up today we have not actually discussed at all. perhaps that is just as well, but what are the rules for breaking trades? it seems like we talked about callers as ways of pre-race breaking trades before they get entered, but the difference

between breaking trades afterwards is that you know more when you are deciding whether or not to break a trade than you do when the trade is being entered. do you really think rules should be tracked -- should be set up so that you know whether or a trade is going to be broken? >> absolutely. one of the major issues of may 6th was that no one knew until the wee hours of the night exactly what percentage was going to be. there was a lot of discussion. it was in the joint report regarding the arbitrary decision whereby the 60% was reached. i believe that any rules -- it is one of the unique things we have our capital markets structure, that some of the

others do not necessarily have and i think it has worked well. it is never an enjoyable process for either party at all. but the rules need to be clear, concise and expeditious so that we are not at 8:00 at night saying 60% away, those trades are going to be busted and then finding those trades. it has to be a much more clear process and coordinated across the exchanges and it was not at all. >> did i hear you right in your initial statement that you are satisfied with the new proposed rules of the exchanges with respect to this type of event? >> i would say yes. it starts to go down the road of consistency coupled with stock by stock holds. >> did you have a view on that? >> i agree and support what

that was very heartening for us as well. we did not know what in the heck was going on. it was not good to have that kind of disruption. >> we heard from one investor who had their stock dropped about 45%. it was not broken and he called us up a week after may 6th wanting to know what he could do. it needs to be clear to investors so they know going in what to expect. it needs to be combined with other measures to prevent illiquid trading which might cause an artificial price swing. i don't think you have one without the other. there needs to be clarity for all individual investors going to the trade. >> we need to hear from staff on the subcommittee reports. >> i want to pursue the question about restarting that was

raised. what are the consequences -- you said it was upsetting it was not done in an orderly way, but how significant is this? is this a very significant than? suggestions about how might be bad? >> the reopening after there is a 5 minute's? >> i believe there's some of the most -- would you have a multitude of different market centers, something that is very uncoordinated. we have two different openings now. a list of opening in new york and they occur at very different prices and it's very confusing for investors. at the same time, adding more opening processes and to that when we are trading in milliseconds is something that

seriously needs to be looked at and considered. that is why it gives me great concern when we are holding stocks and starting the reopening process because you get a lot of confusion. with the is using at with halted stocks, almost every one of those have been attributed to how the stock reopened again once it was closed. >> yet there is a trade-off. what is the consequence of not doing it? i think we of seen some evidence of what the consequences. i submit that worst of what could be the preventative maintenance. >> what happens when you place an order? there are these different prices -- >> it's not an easy process. we try to educate our clients

about the differences in the various openings across the various markets. even the options exchanges, there are eight different options exchanges with eight different prices. we try to use technology so that if one exchange opens before another, we try to pull the orders back and said to the other exchange. there is no easy process. it makes it difficult to a big degree. it is the subject of a lot of client complaints, not understanding the differences in the market openings that exist. i think for issuers, seeing different opening prices and how to print in the paper each day can be very confusing. >> the pause itself is a very different. it requires a trade from the

listing market before anyone else trades. are you troubled by that or does that basically make sense? >> i think it makes sense, but i think it's confusing. but what is the alternative? if we are not to have it, it looks worse. i think i would not like to see that as the ultimate end lution to where we are at. earlier in the conversation we were talking about tdang bands and limits down. i thire h been very good program for yeand i so sk that's sometetetom ay change ststststst

the committees actually appoint committee chairs among yourselves -- i know you are thinking about who wants to be a committee chair, but then you get to report. in the meantime, that would be helpful. in the meantime, we are asking staff to report. first is the cross market link it subcommittee which focuses on topics related to the futures markets. this subcommittee addresses topics including the analysis of borders, trading and the broad base contract liquidity and the selling pressure we have seen. the trading practice and rules that can effect futures and equity markets and the arbitrage. that subcommittee -- i see by a

vote of three and one abstention -- there'll be an update from the cftc. the second subcommittee is pre- trade risk-management subcommittee and focuses on topics related to equities, happenshough pre-trade in the equities market. the subcommittee will provide annan oddity and selling pressures on may 6th, provide an in-depth look of the order and trading of select dislocated securities and trade practices and rules around the implications. the subcommittee will provide a review of the latency issues -- that is how long things to --

members of the pre-trade group, -- i thought i had robert? >> i am honored. >> all right. on. amon >> i see that you are speaking up to makee you are represented not to be care. greg berman is going to report to us for the sec. >> good morninghairman and advisory group. i will be summarizing the cross market presentations given by

staff at the two conference calls that were held since the last public meeting. first, on the sixth of july, there are two presentations made. first was an analysis of the s&p 500 futures e-mini order book. on the analysis of the trading lume and price, trading volume exceeded 50,000 contracts per minute at two points on may at the point when prices declined precipitously and ouone hour later, 10 minutes before the close. into two groups. was classified the first group paired aggressi selling to passf buying carried the second paired gressive buying to pass of selling. comparing theseo price changes, we found no clear pattern emerging. however, at thes drop much reed -- ch exceeded

aggrsive volume. aggressive selling turned out to agessiveuying.ent than wi that diffence increasing the threat the afternoon and hing ainim at theime of aharp pce decne. a rebound in the buy-ll different also coinced wh thice rebod. as for asiof t emi orrk, staff reconstructed a limit order book for futures contrac the sixth of may. plotting in the near inside orr book tha this would be the best fiveids an best five ofrs. it apprs to have been well balanced wita er obuy orders generally close to the numberf sell orders. at about 2:30 eastern time, e s a shock -- a sharp drop-o of the near inside ordebook with a drop-off in ders to buy slightly leading.

then matching orders to sell. prior to about:00, orders to sepiked followed by a revery as the order book filled, proaching its previous ls. these da closely matched the fl data provided by the cme and applaud the may 16t report. we felt we had close was using. the pross the cme the pattern fmhe analysis differs inha tepth of the order can be seen to have been declinthreat today. staff noticed sell ders can be expectedo accumulate over . declining prices. we' not eely comfortable th analy tha por of the ok.

we can say buyide was declining throughout tay. aff has recently obtained data for otherhis as recomme by the aory group. both critil days and the so called normal days. if make a one -- on t 29th of july, we had a second ll. one esentation was made in that case. trader classificion and trader behavior in the june 2010 emini futures contract. then an event data group on may 6th. trading activity patterns observed during the pre-event were notified to classify counts as market makers, every busy trads, by as, seller, opportunistic trader at deutsche trader.

comparing the pre-event to the one on may 6tto the percentage of volumand percentage of trade, activity levels were similar t those of the side categories. the largest differences are for the seller and opportunistic seller categories. seller activity as a percentage of trades increase from 10.10% -- 10 -- decrease from 110% to 6.95 in the event. we also noted that the noise trader activity, albeit small in both, did drop by half. when from 2.2% to one. 04 -- to 1.04%.

this will obtain some estimatatt of changes in the trading activity of any single group. that's all i have. what may wd this up by thanking the advisory group for their insight and guidance. it has been an interesting and summer. it r r r r me of when ias aunivt our researchthe summer. they may not yet be on our th documents will be on committetetetet t t t t t t t tt ons fr ful teeo jim

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the markets. others fell back to manual trading that had to limit their focus to only a subset of securities and were unable to keep up with the unprecedented volumes that were ever more concentrated as yet other market makers continued to withdraw. through the interview process, we were able to trace back a significant number of trades executed as stub "and were subsequently deemed erroneous and broken by the exchanges later that evening. our interviews with market makers were only a first that of a planned series of extensive interviews and conversations with a wide variety of market participants. at this time, we're pleased to report in addition to equity and etf market makers, we have completed many dozens of interviews with market makers, dark pools, high-frequency traders and cross market jurors. it remains consistent with the general theme of a rapid withdrawal of liquidity. the specifics for each

participant for materially based on the type of participants. a detailed summary of the findings will be presented in our upcoming september report. in our second subcommittee call held on july 29th, we covered three individual but related topics. these topics were chosen because they're complicated and subtle in nature, have lots of the technicalities that afforded lots of questions, and not necessarily because we believe they present any problems on may 6th. a number of those topics were discussed today and as demonstrated, there were lots of opinions on these topics. we began with the division of investment management, a detailed presentation about the etf market itself. that's a particular type of product registered under the investment company act of 1940. etf's represent about $700 billion in assets. etf's hold a portfolio of securities and are designed to

track a given index or sector. however, they're not individually redeemable at the net asset value but are traded in the secondary market alongside individual equities. only authorized brisbane's can't engage in transactions with and etf to retain or engage large blocks of etf's. these are done at the end of the trading day for a pre defined basket of securities or cash equivalents. in this fashion, the prices of etf's and the prices of securities that under etf's go through a detailed arbitrage relationship. understanding how these relationships function provide the context and color on the behavior of etf market participants on a six. we then turn to our presentation to by the new york stock exchange on the use of liquidity representation points. that's where an individual trade can be done it --

when the best offer moves below the lower limit, fully automated execution sources and event "on that are marked as slow under the rule six. during lrp, the orders are resolved as the orders are received within the price band. however, that does not self- resolved, it is converted to an before the option and it can be repressed outside of the band. when it is in effect, other exchanges are allowed to trade through any quotes marked as slow. also noted was that trading participants may cancel resting orders anytime during the lrp and reroute. the presentation that nice clothes of a variety of presentations. in hours of the report, we will provide more details on lrp

activity related to the events of may 6th. we concluded the meeting with a presentation by air division of trading and markets on what is known as the self-help exception to will 611 of regulation mns. this requires trading centers to implement reasonable policies and procedures to prevent trade there is of protected quotation that other markets. self-help permits a trading center to bypass the protected quotations of other market experiencing system problems. it was noted the declaration of self-help by one market center against another is not uncommon as these issues arise from time to time. the september report will provide more details in the context of liquidity and market participants behavior related to the events of may 6th. thank you. >> thank you. questions? >> i want to ask you to place

psychologist, but what was it that the market makers told you that prompted them to fear broken trades? why on may 6th? there are lots * one market is volatile, was there some confluence of events that caused it? we hear it a lot in very -- in various aspects of the investigation. >> there's a bit of an unwritten convention regarding rapid price moves of more than 10%. the exchanges can declare trades that all over 10% very quickly as erroneous. this was not a matter of uncertainty of whether the trades were going to be declared erroneous. even if there is complete certainty and the market maker's new head of time what was going to be erroneous, as soon as you

get into an area where something can be declared erroneous, a market maker does not want to be caught with half a buck. they will choose to not participate in the markets all rather than having one side of the trade be broken. >> can you explain a little better -- if at the end of the day, a market were still closed, how do etf's get price? is there a clear rule -- >> during the day, etf's are priced like any stock. its technical and depends on the buy and sell pressure. there's a separate mechanism by which creation and redemptions occur. that is where and etf looks more like a mutual-fund tight to

thenav of underlying securities. at the beginning of each day, a basket of securities is identified as what will be tradable for creation units or be redeemable if you are going to redeem some shares. individual investors do not do this, only authorized participants in very large blocks. even if the markets are closed, the securities can be exchanged and redeemed. there are circumstances where you have etf's on international markets where the end of the days to not coincide. i believe there are lags between the time the actual settlement happen and the transfer occurs. >> does that answer your question? >> i don't know how you would take the closing price of individual stock that's closed, but i assume it's going to be the last trade.

i think with then etf, you would record the end of the day be the last trade. i'm not sure if there's any provision now be different from that. you're talking about of there is a circuit breaker at the end of the day. >> that was the question. but it's not like delivering wheat where you actually deliver the wheat. i assume there's a cash settlement of some kind. >> i don't think there is any special and of de role that the etf price plays, unlike a mutual-fund. >> but you can actually deliver the securities. >> this would only affect the case were in lieu of transferring securities, you want to transfer the cash equivalent of the securities, in which case you need to have accurate pricing. >> maybe the question is, do you actually do the settlement? >> it eliminates the discount on

a traditional fund so you can settle in cash or a subtle in securities. -- settle in securities. >> so what do you do? >> i'm not sure we have been through a time where the market closed at the end -- i'm sure it happened with the spider on october 27, 1997 but not sure how many other times -- >> like the wheat market, we're not -- we're going to a lot of wheat convergence issues in kansas city and chicago. exchange traded funds, you can literally deliver the securities like you could deliver the wheat, at least in theory in kansas city. and in practice, hopefully. but you have to be one of these authorize participants and it

would only be done by large blocks. you ran a complex. >> that is right. >> hopefully they don't have this convergence issue. but i guess they could deliver a stock even if it's not trading? >> the question about what happens if you want to deliver a cash equivalent and the stock was closed is more general. how do you come up with what the and prices for a stock? there are lots of implications. the exchanges would need to come up with an official closing price and i assume what ever closing price was picked was the -- is the one that is relative to the transfer of etf's. >> just to follow up on the data integrity parts of your report of the minutes. do you have a better feel with

respect to exactly what those conclusions of data integrity were based on? was it that they were seeing trades out of line with quotes, or were they trying to execute trades against them and were unsuccessful? do you conclude there was significant data integrity issues across the board or whether they were spotty or what? >> most of the market participants explain that they put automatic trigger an to the system to look for any thing that has the potential to be erroneous data. the first thing they put in is the rapid price move. while there were true data integrity issues we are focusing on in various different platforms and there were internal system issues that some of the participants, it was accurate changes in prices that

i believe triggered the most of these alarms. as soon as you have a rapid change in price, even if it is real, somebody has to look and see that maybe it is not correct. that causes a huge cascade. one lots of securities have rapid changes in prices at the same time, folks can necessarily respond very quickly. each one of those securities need to be looked at individually to make sure the prices are right. if you are collectively looking at a whole bunch of securities and finding dislocations, your assumptions are either if there is something greatly wrong with the feats themselves, because we're seeing is everywhere or the fees are completely correct and there is something fundamental going on in which case that would cause you to pause. regardless of whether not the prices themselves are correct, and the perception of that is going to trigger these types of pauses. >> i understand why people would

not want to trade in a market of volatility, but there were using the category of erroneous data. you would have thought there would have been some mechanism sec rating out these two kinds of problems. so far, we have described they do not really separate the two. one of the concerns in breaking the trades again -- in terms of erroneous data, it seems there is another principle that was here which is trades that were not erroneous but that prices at larger deviations from what people had thought. it seems to me those are two concepts that are quite different better being mixed together. one would have thought there are ways of distinguishing between

these two. >> clearly, erroneous trades and betas -- it's a completely separate concept. the clearly erroneous trade and the cancellation of trade was one process that exchanges got together and we fully described in the preliminary report how the process work and we heard lots of feedback on how they perceive the process. completely separate from that is trading on erroneous data, erroneous market data or trading when you think you are placing an order and don't necessarily get the confirm back immediately and try be systems issues. that's a completely separate path. sometimes, i can imagine a situation where a trade is erroneously placed because of erroneous data and one might want to claim the trade was clearly erroneous. i don't think that's what played into the afternoon of may 6th.

those are two separate processes. >> could you describe process for choosing the 60% figure, for declaring those trades, which ones could be broken and not? was it across all of the trading centers? why 60%? why not 55? why not 65? why not 35? >> the process call was across all markets and then the thought that led to the number. >> i think i might differ to wreck on this particular question. >> the exchanges did get together and i know they agreed on that. i don't know if i could comment on the details. >> what about the other markets?

>> i believe erroneous trades are within the domain of the exchanges. >> trying to explain the process may be the enemy. each of the registered tracy -- each of the registered exchanges to had trains in a secured finra + -- trades in a security plus finra, and some of the dark trade volume worked together to have a single decision with respect to erroneous trends. -- erroneous trades. erroneous trades are predictable without those work and the sec worked with the exchanges for sometimes -- for some time when it involves a single erroneous trade or a machine gun-like number of errors going in the same security. there is much more flexibility

and difficulty when instead it stems from a market reaction that then flows like a waterfall in large numbers of securities. in that situation, there is much less guidance, there was some situations in september and october during the credit crisis, but not quite like this. in those circumstances, exchanges had more flexibility and less guidance on how to work in a situation where there is no clarity that there were any error trades. there were not. but there was was a massive market panic reaction that from a market structure standpoint resulted in trades that could not be justifiable. in that situation, the last one was an opinion. in that situation, the exchanges were cheering about only --

about only breaking the most extreme trades because as has been mentioned several times, these positions to not stand alone. they are traded out of that part of hedge positions and part of a variety of combination positions. the breaking of trades, particularly when it is not terribly predictable always has consequences. i think it is fair to say there's nothing justifiable about 60% as the number rather than 50 or 70, it's an effort, given the unique nature of this in the absence of evidence in a particular area of trades to only knockout trades that would appear to be by some standard undoubtedly for persons involved not normal and not real. for better or for worse, that was the point the exchange's planned on, 60%. >> did you put a bunch of

pieces of paper and had and pick one? >> i was not there, so i will let testify out happened. >> do you have any information about who the market participants were his trades were broken? >> we're still working on the exact details of that. our final upcoming report in the devil goal into more detail. our initial inclination was to follow the retail pass. we believe quite of not -- quite a number of those trades for retail trades. most of the professionals got out of the market as it is the declines started happening. the market makers began to pullout. your institutional asset managers would have pulled out. many of those trades were originally retail trades. >> this is a question more for the sec or finra, but i know the

may 18th said how many trades, which you are asking who is behind them and that will be able to summarize that for the public? >> to follow-up from your comments, that seems to say the last part of the declines, down to the stub quotes was all due to retail trade and the retail traders cost this dramatic decline? >> who is getting stuck with the bad side of that trade? the way they structured their offers -- >> i take a group of stop loss orders or market orders from retail traders since all the professionals were out of the market. now we have the lash -- the last part of the flash crashed determined by retail trade rather than professionals?

>> i do not want to get to head of the final results, but what we are seeing is that most of the professionals had exited the market. but many of the retail investors, some of them were stop-loss orders and were triggered automatically. others were market orders that folks but in right there as they saw the decline going down. it was less around they got stuck with the bad trades. there were the only ones trading at that particular time. those trades were later cancelled for the obvious reasons. >> at what point from 60% up toward 40 and 30 were the professionals out and the retail's still in? >> i don't think we have details at that level. what i can tell you is there were about 20,000 broken trades. if you plot the numbers of

securities and the trades and what the lowest point was, you will find it is a barbell. quite a number of the trades fell 10%, 11%, 12% and the huge number fell 90% or more. the area between 20% and 90% is very sparsely populated. you either what all the way down or you stayed at 10%. the difference between 50% at 60%, we are talking handfuls of trades in those regions. you either win all the way down to a stub "-- is dubbed "or close to it or you went out aid nom all about or -- [unintelligible] >> i think we will have a cross- section of analysis in the final

report. that is not saying anything about the broken trades. most trades are small lot sizes today. >> [unintelligible] >> could you repeat that? >> or the broken trades spread across all markets? >> i believe we have a table in the preliminary report that illustrates the 20,000 or so broken trade straight different markets had different percentages. the new york stock exchange to not have any broken trades because of their lrps. others do not accept market orders. they will actually turn that into a limit order. others execute the market orders directly. one thing i would like to note is market orders are often converted to limit orders

before they get to the exchanges themselves. there's a limit to what the exchanges can do in terms of treating a market order if they receive a limit order for one penny. that's a limit order for one penny. the situation is a little more complicated than just sending the orders straight to the market centers themselves. >> we were talking about a large fraction of the broken trades being etf's. can you answer some of the same questions about the etf's? were there a lot of retail trade in the etf's that are broken? >> my comments are for all broken trades and the 60% or more of the broken trades were etf's. so everything applies etf's to the themselves.

-- everything applies to the etf's and his elves. >> susan, did you have questions for this or did she want to share -- there were fibers important topics about market orders and limits, all of the six or seven topics we talked about it you want to share with other members of the committee. >> i remember in etf's was that word the predominantly broken trade. i don't remember whether or not the futures market had many broken trades. >> jim can answer that. >> it did not have any broken trades. >> thank you. >> any other questions? we're going to stay in our

seats, but greg -- are you going to do anything? that makes it easier. maybe it has already been done. i would like to thank greg berman and gm with regard to -- and jim with regard to what they have done. early september, staff will deliver a follow-up report. to the joint advisory committee based on the research they have conducted these last three months. once the committee has received the report, the next step would be to link the staff report back to the broader mandate of the joint advisory committee and to that end, we would subsequently ask this committee to prepare a

document, may be a shorter document and the staff has done -- to be delivered to the commission's ideally by early october. we know you are all busy and everything, but we are trying to move this along, that would address the following points. any specific recommendations you may have regarding cross market policies direct and -- directed and related to the issues of may 6th. cross-market issues are all of the six, seven, eight items -- some of those items earlier were identified around the collar of market orders. the pilot program, all of the things we talked about earlier, the pauses and limits and so forth.

those topics. included with that is the cross- market policy, circuit breakers across the market. secondly, general areas of further consideration for the cftc and sec policy based on any cross market teams. some of those were talked about earlier today. cross market themes about the fragmentation in the markets and so forth. there were a lot of things raised by some members here like priority roles. what are the committee wants to advise us on -- the two main areas are the cross market issues related to basics and -- related to may 6th. this committee does not go away with this report. you are not off the hook yet. to aid you in the process, we're happy to have staff members of

the sec and cftc joint advisory committee collect your individual thoughts on each of the points, aggregate, synthesize the information, helped organize the final document. greg germond and robert cook is here, the sec runs the division of market >> we have different names over here. maybe we need to harmonize that. you have not those from our chief economist side. they're all available to help out. i want to turn to my fellow commissioners because they also -- at think each of them have some thoughts, too.

>> thank you, very much, mr. chairman ted first and foremost, i would like to build on what you were just saying in recognizing the importance of this advisory committee to ensure that we have an orderly working at marketplace pet a lot falls on your shoulder. by -- marketplace. all lot falls on your shoulder. i appreciate you, mr. chairman, and chairman shapiro getting such a distinguished panel. i just finished reading joseph stieglitz's book. since we are not paying them, i will plug them. one thing struck me today. that was hearing from the panel members, not the advisory committee, that what happened

on may 6 can happen again -- can happen again, and they expected to happen again. mr. chairman, you made an analogy of a terrible auto accident that i was involved in, and what happened to stock. there was a big difference. in my case, somebody broke a rule -- somebody went through a stop sign. we do not have a rule here that was broken that caused this. that is what we are looking as an advisory committee to provide us with the rules of the road to ensure that these accidents do not happen in the future, and certainly not to the magnitude that they happened. i want to build on something the chairman did when he started, talking about the barney frank- christopher dodd bill. it is mandated that we work more closely with the cftc and the

sec, working together and two chairs have been working. they have already started the meetings that have been mandated. steps are going through those. i hope, mr. chairman, that we would follow up in a similar format that we have here, where we have an open public meeting, where everyone is pretty to the types of recommendations and things we were mandated to take a look at, and what our staff will be recommending to us. to that extent, there are other regulatory bodies i still feel we ought to be working with as well to ensure that we get that out there. i would really like to thank the staff of both the cftc and the sec for the work they have done for us, as it commission, and also for this advisory committee. since we are not paying you, we did not expected to shoulder all

the burden of that. as we stay in an agriculture area, work them like a rented newell. get as much out of them as you can. >> law. i do not know what to do with that last statement. one thing i want to say is the commissioner is absolutely right -- the cftc and sec are working tirelessly together. we'll have a number of staff round tables on the bill. some of the might start later this month. between the sec and the cftc, they have identified four or five topics that will be open to the public. i do not think we will have as many cameras here, but they will go through a number of topics related to data, and possibly to these new swap-execution facilities, and so forth, and jointly hear from the public on very critical issues.

the sec commissioners and the cftc commissioners will be allowed to go, but the staff will run them, which saves mary and me from running these things, too, probably. commissioner summers. >> thank you, mr. chairman. i want to follow up and say i appreciate the panelists being here today, and all of the committee members. it is extremely important for us to look at this coordination across markets reaching the equity markets, the security options, and the futures, and how to appropriately impose the tools we have on those markets like circuit breakers. i think that the markets have evolved in products like equally and equity index futures have increase, yet we

have completely different market structures and different rules on either side. some of the issues that we talked about today -- high- frequency trading, co--location, and just general market structure issues are before both of our agencies. i cannot really stress enough how forums like this to increase the dialogue and cooperation between the two agencies is extremely helpful to me, and to us all as regulators. thank you, you all, for being here. >> we are bound to get a sound bite here. >> thank you, mr. chairman, and everybody, staff, in particular. thank you to the advisory committee. people will say it will happen again. the answer is it could. i think it is less likely today with some of the changes that

are being incorporated. as we move further down the road, it will be even less likely. you cannot give this certitudes. as we are talking about all of these issues, and the suggestions were fascinating, but people come up with these phrases about what happened on may 6. they say it was the perfect storm, where a collection of culprits. i think, sometimes, it is too easy to rely on that when we do not know what it was specifically. "well, it was a bunch of things." i am not saying it was not a bunch of things, but the panel should be looking for a smoking gun. one of the areas, and i am not saying this is a smoking gun, but one of the areas that was discussed today is the gap between the consolidated take and the premium stake on the

stock exchange. at times, there was more than a 20-second delay. we need to make sure there was not any price trading. these elk rhythmic trades could have gone simultaneously, but on a real-time feed, from new york stock exchange, and then sold on the delayed seed -- feet, right away, hundreds of times, and collectively, it could've been a larger amount. when i started thinking about this, -- we have a technology advisor committee and ask these questions then, to make sure that i was not thinking this was crazy as a conspiracy. four of the folks on this panel thought i was crazy to ask. of course, that could be going down.

i did not feel as naughty about asking the question. maybe there is -- as nutty about asking the question. maybe there is nothing to it. that 20 seconds might not be a lot to some folks, but in these markets, it could be huge. i hope it -- i hope these elgar resnick price profits -- price pirates are not seeing -- seeking things they should not have gone off after. >> thank you. do have anything, right? joe? >> to the below questions. we have been talking about the u.s. market. i gather there have been similar spikes in a couple of other markets. has your staff looked at any other markets where a knowledge

of this kind have occurred? wheat ridge where anomalies of this kind have occurred -- where and ptolemies -- where anomalies of this kind have occurred? >> we are aware of the different structures that exist in different international jurisdictions, and other types of markets. there is something very unique around the u.s. equity market in that it is fragmented. 12 of are at least nine to the news. -- is then used. people like to use the no. 40. 40 times 40 is something we can learn.

>> even if there are the specs occurring without the complexity, and bars might be more prone, that it would remind us, that even without that, we have something to worry about. >> we're also looking at the order book activity on other days. two of the day's work in the third quarter of 2008, where there were sharp breaks as well. we want to analyze them, and see in what ways was may 6 different? how did the order book in all on those days? >> let me just mention that i think australia had a big spike. in their case, it was a wrong order. somebody pushed the wrong button. the reason i mention that is

that it shows the fragility of the system to a mistake. that is at least one thing one wants to worry about, and if that is the case, then, obviously, in a world with all the kinds of fragmentation we have come of the problems could be much worse. >> we have some outstanding research from other trades done in the united states. in general, the market's comeback to very quickly in recognizing the error. i would be glad to send the advisory group that paper, if you would like. >> just one more question. that has to do with the christopher dodd-barney frank bill. are there particular issues they raise that you think interact with what we should be doing? >> i cannot speak for the sec,

as you know. the cftc largely swings in the terrain of derivatives. i do think market structure it issues -- structure issues will play a tremendous role. congress enacted a bill that said all standardized derivatives have to come to a clearing house. there are various estimates. it seems that would be a majority of the marketplace, by far. it does, after that, and need to be exposed to transparent trading venues. if they could be swop-execution facilities. from the world of the futures market, which, as people have pointed out, has been less fragmented than the securities market, the over-the-counter and derivatives marketplace might have multiple trading platforms. that could be dozens.

the bill actually fosters competition among these trading platforms. i think it will be helpful, as you are thinking about fragmentation and market structure issues. congress has dealt with the broad policy. there will be swapped-execution facilities. there are supposed to be multiple participants making bids and offers to multiple participants. it is what people, many too many. there is transparency. it is for enhancing transparency and the efficient -- the efficiency of markets. that is the goal of the statute. it is probably more around the trading then use that it is very similar types of issues -- that very similar types of issues might arise. >> one that was raised this morning was that the bill

encourages trading on exchanges and clearing houses, but also allows for over-the-counter. some of the issues we have been talking about -- dark pools as opposed to transparency raise the concern that how you organize the transparent part can affect the magnitude of the trading that goes in the dark pools. >> absolutely. i think kindest addressed -- absolutely. i think congress address part of that. even the bi-lateral transactions need to be reported on a real- time basis. we need to sort through the sec, and how to do that. in terms of what is on the swap execution facilities, congress

also addressed it by saying it was a multi-party to multi- party. the dark pools are sort of a proprietary platform, if i understand. it appears, et least to this reader, i cannot speak to my fellow commissioners, that congress sort of address that, and said it needs to be multi- party, to multi-party. it might be addressed right there in the statute, in a sense. those will be subject to interpretation, obviously. >> i guess i am wondering what we could do that would be useful, and perhaps maybe the question is what is actually feasible in terms of the various incentives for public liquidity

display that were talked about today -- things like treating cancellations no differently from just having them freely available, changing priorities, a change in access fees, where re-data structures, and so forth. -- rebate structures, and so forth. some of them are under regulatory provision. what is the scope that we can think about here? >> well, i would hope that you would help the two commissions on things that are in our authority and jurisdiction. though you could take up, and i think it was one of the earlier panelists that sought -- that had recommendations about the tax situation, the sec and the cftc do not have those authorities. it would be best to recommend things that are within our

authority, or if you think there needs to be a change in law it should be related to our specific authorities. when i use the word tax, i guess i meant charge for cancellations. >> i think the wonderful thing about the advisory committees, and this one is an extinct group, is that we are not looking to live view. if you have a recommendation, we want to hear that. the immediate thing is the events of may 6, and the cross- market issues there, and then some general market issues. since the panel does not go away, we hope there would be a lot of other advice, but we would like to -- what is feasible is also what is doable in a timely way. it is the first report from the divisors, the eight of you.

susan, annie? >> i guess i was wondering, after the september report, and if there are recommendations that come out of that relating to circuit breakers or different types of orders -- some of the market rules of trading kind of stuff -- what other kind of issues are the two commissions interested in having the committee look at? >> if i could ask -- you are really saying what might be the agenda for this committee be on this? it is an excellent question, but why don't you allow chairman shapiro, myself, or some of my fellow commissioners to come back to you, as we sort through this first. i think i understood your

question. >> yes. >> it would be good to hear from the advisory group about what kind of things they think they ought to look at. that would be very helpful. >> this group was set up immediately with the may 6 event. chairman shapiro and i have been talking about it since the presidential transition, and then the acting chairman had suggested that we have this to. we work with congress to have this authorized because we could not spend money on behalf of the sec, and they could not spend money on behalf of us. we have to change an appropriations law to do a joint advisory committee. it is a great country. [laughter] >> we did that with the support of many great members of congress. we look for this to be a committee that goes on to talk about emerging risk.

one of the things that came out of the crisis in 2008 is to have an outside group of experts advising these two market regulators, bring harmony amongst them, and be on the harmony is to say what are the emerging issues? what is the next thing? you have commissioned into service with a specific task of may 6, but it is much broader than that. what d.c. on the -- what d.c. on see on the horizon, and past october? >> it is very clear there have been very good changes in the structure and the performance of these markets in very recent years. those effect both liquidity in

the markets and incentives for various market participants to gather information. one of the other all previous ones talk about the incentives of those doing fundamental research and their ability to extract returns for those investments. in some ways, it seems to me, that one of the questions is not only a question of stability, but also the efficiency of these markets, with respect to the issues with which the fundamental roles of these markets -- these markets play in making the real economy work better. i think that should be an important focus. >> maureen o'hara? >> the sec concept release is all about that.

i think we want to make sure we are not duplicating what they're doing, and moving on beyond that. those issues are there. that has been on the table for three or four months. 0 foot, we will be able to add to that. >> could i make a comment about staffing? we do not have an identifiable staff that reports to us. i presume the sec staff and the cftc staff are available to us. i would hope that we would receive from the joint staffs a summary of the various suggestions that have been made, so that we would not be starting from scratch when we receive a document from you in september. >> i think, davn excellent suggestion. technically spei tim, are jim and pam --

you not the official committee staff? can you follow up what are the things -- with what are the things outside market experts and analysts have suggested? that is what you're really saying. >> yes, so we can consider that in a time frame between now, and the time we received the report so that the report has some relevance for us in terms of the suggestions that we might make. that would give us an opportunity, collectively, to make suggestions that any of us might have. i hope we would have a procedure for circulating papers without having a public meeting about what we might think. >> all in compliance with the federal advisory committee act.

>> i understand that. you have given us, over the past, some documents that have been helpful -- subsets of testimonies, but i would also urge the staff to give to us, if it is available to them, any written papers and documents that might be helpful to us in making decisions and evaluating suggestions. this is, as you know, an extremely difficult subject matter, and very technical, and we need all the help we can get. >> a couple of stories from the associated press -- the $700 billion u.s. program launched in response to the global economic meltdown at a far greater impact overseas than the planned bid on the u.s.. billions of dollars in u.s. rescue funds wound up in big banks in france, germany, and

other nations. jobless benefits rose to the highest level in six months. it is a sign hiring remains weak and employers might be cutting back with their staff. >> former cuban president fidel castro made a rare appearance. he addressed the general assembly. he warned that tension between iran and the united states could result in a nuclear war. he responded to questions and comments.

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>> message to the national assembly. >> at the outset, only eight weeks ago, i believed that the imminent threat of war had no possible solution. so dramatic was the scenario we faced before us, that i saw no other alternative than perhaps the likelihood of there not being any survival by this region, that had no reason to be a direct target.

it was difficult with the knowledge that human beings always claim to the faintest hope. despite all this, i made an attempt, and fortunately it didn't take me long to realize that there was some hope. a very profound hope, in fact. additionally, without the taking advantage of this opportunity, then the disaster could lead to the worst possible consequences. there would therefore be no hope for the salvation of the

human species. nevertheless, i am now sure that it will not end this way. quite the contrary, pirelli we see conditions that are developing that could lead to a situation that would have been unforeseeable until very recently. one man will have to make the unprecedented decision. the president of the united

states, who surely because of his multiple concerns has not yet realized that, although his advisers are now beginning to understand this,, we can see this unfolding through very simple steps taken. such as the tortures inflicted on geraldo that stopped. this is a situation that had not occurred in over 12 years of its implacable hatred. the efforts both against cuba and against him. today, we can state that the next step will be authorizing

adriana to visit him, or his immediate release or maybe both. i found out from her that his spirits -- his spirits are higher than they have ever been in the last 12 years of unjust and cruel imprisonment. given that iran will not give up one that of the demands of the united states and israel, and that several of the combat resources available have already been mobilized, and that an attack would be launched as

soon as the deadline has been agreed by the security council on the night of june 9, 2010, stipulating the norms and requirements established. be of man's plans cannot exceeded. in this critical scenario, president barack obama would issue the order of this preannounced and harold attack -- and heralded attack following the norms of the large

empire. in addition, and that same point, in which the order would be issued -- that is, in addition, the only -- it could only -- it could lead to an incalculable number of nuclear weapons accumulated in an absurd competition between the powers. he would be ordering the instantaneous death not only of hundreds of millions of people, including an incalculable number of inhabitants in his own country, in an edition to

the cruise of all of the ships that make up the u.s. fleet deployed on the seas surrounding iran, simultaneously. the conflagration would spread in the near and middle east as well as throughout eurasia. it was a coincidence that at this specific moment, the president of the united states is a descendant of africans and whites.

of muslims and christians. if this is achieved, and we need to be aware that that is what we're doing here. the leaders of the most powerful nations on the planet, both allies as well as adversaries, with the exception of israel, would urge him not to do this. the world would then render all the honors that he deserves.

the current order, the current world order would not survive, and inevitably it would collapse. it would collapse immediately. the so-called convertible currencies would lose their value as instruments of the system that has imposed, both sweat and sacrifice without limit on the peoples. new modes of distribution of resources and services, education and the direction of

social processes would come to the surface easily, but if war were to break out, then the current social order would suddenly disappear and the price would be infinitely greater, and the non renewable resources could be preserved. climate change could be prevented the useful efforts of all human beings could be insured to be attended to.

the essential body of knowledge, culture, science, that is at the service of mankind could be ensured, children and adolescents and young throughout the world would not perish in a nuclear holocaust. this is what is desired, it is deemed comrades of our national assembly. now i am here to respond for my comments. i am also here to respond to any questions that you may have. i am ready to listen to your opinions. thank you very much. [applause]

[captions copyright national cable satellite corp. 2010] [captioning performed by national captioning institute] [applause] >> before i offer the floor to those representatives that would so ask for it, i would just like to say one thing.

and i am fully convinced that i speak on behalf of all of us. i'm going to say this as briefly and specifically as possible, as brief and specific as an order said at the time said, "thank you, commander, for giving me the pleasure of hearing you and see you, as large as life as ever. i would now like to offer the floor to my comrade." >> dear commander in chief, raul, distinguished

representatives, guests. today we participate in a historic event in our national assembly. the commander in chief, representative fidel castro is here, seated in his place. he was never absent. he was always here as a shining beacon supporting us, guiding us, from his sick bed as he was convalescing, always a identifying himself with the people, through his remarks, who is present here, addressing and denouncing terrible events where the fate of our country and mankind are threatened. this is not the first or the

third world we are speaking of. the threat is faced by our entire planet, and it is only you, as an internationally prestigious figure who does not know lies, who has no debt with anybody. only you can denounce these events, knowing that with certainty the empire can ever be satisfied with the reality of its defeat. is ready for any infamous act, including a holocaust. comrade, in 1885, jose marti said i know the monster because i am in it. in july, 1958, from the sierra maestra, a headline appeared in the newspaper that was always in the office of the minister, hanging on her wall, that was

an inspiration, according to her, for working until the very end. having seen the rockets that were launched, i swear that the americans will pay dearly for what they are doing. when this war ends, there will be a new and longer war, a greater war, the war that i will launch against them. i realize that that will be my true destiny. currently, a genocidal carefully, a genocidal policy to defeat us will be launched against us. my question, commander -- will obama be capable of the cruelty

of giving the orders to launch a nuclear war, given the imminent likelihood of the collapse of the empire, and also freeing the five heroes? >> not if we can persuade him. [applause] >> comrade josefina iredia. >> i am the representative from

guantanamo. here, commander in chief, fidel castro, representatives, today we feel profoundly please because our commander's health has improved as he recovers, and every day he shares his knowledge and examples to help us develop our social socialist programs and our main triumphs of the cuban political system. commander, received on behalf of the people of cuba and what,, our love and -- of cuba and guantanamo, our love and admiration, the youth that see you as a guide, that you are still never abandoning the ideas of our leader after celebrating the 100th anniversary.

all of you, and your colleagues, continue to live in the hearts of the cuban people, the people remember and read their tribute to you, and we still maintain a live our expressions defending our principles, your words are manifest in our daily lives among our children and adults, in our urban centers among our people. all of these ideas came from the deepest sense of your heart, and they continue to be disseminated through your examples of dignity, brotherhood. we wish you utmost success and congratulations, working for our country. we know that your colleagues in the barracks, these ideals continue to remain current in your book on strategic victory, recalling the victories in the sierra maestra. it is a continuous trouble

recognizing the commanders, the captains, the lieutenants, those who have articulated their ideals, principles, disseminated with transparency, recognizing those who have launched against the enemy's offensive. this book is a source of pride to us, and we ensure that everyone will be familiar with the struggles, our history, your struggles on behalf of our people. that will be passed on to the next generation. i would also like to say that we hope to receive this great gift, and when will we be able to read and analyze this book? we would just like to express our heartfelt love and appreciation. thank you. >> comrade pablo has the floor.

>> dear comrade, commander in chief, commander of our armed forces, and the president of the council of ministers. esteemed representatives of the national assembly and special guests, based on the recent information -- let me reiterate that as a result of the recent weeks provided through the leaks that has a broader public in the u.s., we have learned about the crimes that have been committed as well as the

corruption that this has led to. that have become a concern within the u.s. as well as the measure -- as well as the major financial crisis that has been manifest with many closures of businesses, bankruptcies, loss of jobs, loss of homes, of social security, and that we are seeing a disappearance of the middle class, also threatening the american way of life. although it is true, as a u.s. member of congress said, that wars are a disaster, that u.s. troops are of greater numbers. on the other hand, an

increasing number of u.s. members of congress, but a minority that is honest about their own roles, a group of them, 52 out of 114, have stated, and i quote, "the wars in iraq and afghanistan have cost the u.s. more than $1 trillion in direct cost, and more than $3 trillion in total." at one point where our national debt, according to the statement, exceeds $13 trillion, we cannot allow for any more of these wars to take place. it is time for congress to reject any funding that is not

focused on returning our men home." so the messages that wars have led to adverse situations. aren't there moral, ethical, and political considerations to oppose war? and in this context, it would appear that war does not concern as much, that it has generated crimes, created corruption, that the economy has gone from bad to worse, the bankruptcies have taken place, that unemployment levels have increased. people have lost their homes. we have seen a diminishing of the middle-class, and young americans have lost. we need to ask, would it be different if the war were not

successful, if it were not a disaster and that casualties were light and only in combat, that there were no corruption by any parties, that the economy were prosperous, that the middle-class remain stable, sound? would we need to ask ourselves, if it were successful, would that the justification to continue with wars? would we oppose wars, as was done from the very beginning by barbara lee from california? the u.n. has lost these wars within their own boundaries. what they need to do is withdraw from these territories of countries that have been attacked. we forget that wars of aggression per se are crimes

against people, where more civilians always die then come back -- always divan come back -- always die then come back. the dow castro indicated that the world can be free of nuclear weapons. -- fidel castro indicated that the world can be free of nuclear weapons. today we remember that we think of the launching of two atomic bombs in the history of mankind -- we should remember the words of president franklin delano roosevelt on generates 6, 1941, when he gave his address -- on

january 6, 1941, when he gave his address to congress during the state of union, when he explained that he understood that by being free from fear, free from fear, which translated in global terms meant a reduction of weapons to the point and to such a specific level that no nation should have the capability of launching acts of aggression against neighboring countries, no matter where on the planet. the americans should read more their history, to be more aware of the recommendations made by their own past leaders. we need to avoid wars, and that

is only possible through total disarmament. we need to conquer wars, and that can only be done by practicing peace. if this does not happen, then we will not be standing on the hill to be able to see the new dawn of mankind. thank you very much. [applause] >> thank you. before i offer the floor to other representatives who have asked to speak -- can you hear me? i am going to offer the floor to the rest to speak. but let's try to be as concise

as possible. i think i give an example that this can be done. i just wanted to say, let me clarify. obama would not issue the order if we persuade him. that effort to persuade the president of the united states is something that we are hoping that this would serve as a contribution to that persuasive effort. today, for example, we are doing something that is never done. we are, first of all,

broadcasting this assembly meeting through cubavision. we are broadcasting this event through all of our media, and it's not just the cuban media. we have invited the most renowned journalists, a tv journalists, from venezuela. we have walter from telesul. they are broadcasting this event simultaneously. [applause]

>> mario is also here. we invited him and he is also broadcasting this live through venezuelan television. we have alesa, who is broadcasting live these proceedings here. the first half-hour was even being broadcast by cnn -- in other words, the major news networks, those that we want to have listened to this, are broadcasting does. i can give you a quick calculation, and i would say if we were and to -- probably this broadcast would cost $100 million a minute if we had to pay for it. of course, we are aware of that. we could continue speaking here

so that we can assure that our words will have these repercussions, these impacts. [applause] >> serrano has the floor. >> comrade, dear commander-in- chief, cmdr. one thing i do not want to lose sight of is we want to first of all wish you a happy birthday. we know that you continue to be younger and younger, and all of of our young people are supporting you. we are there, heart and soul,

supporting you in the struggles. i did want to ask one question. based on the experience of the flow of exchange that comes from the united states that shows solidarity with cuba, we would like to say that we agree that within that society there are significant human values. we believe that this is one of the reasons why we agree with your comments, this message that you have conveyed that this is the time for persuasion, and president obama should hear us. in u.s. society, we continue to hear people from different political and in ideological groups, and they all agree ultimately, although they expressed themselves differently, but they agree there needs to be a new perspective vis-a-vis the rest of the world. today you said that even president obama has in his own makeup as a citizen -- he

represents two different cultures. don't you think this is a time where we need to intensify the dialogue between civilization, and build further into this, and find a solution for many of the challenges of the world is facing today? thank you. >> let me respond by saying we have very little time for dialogue, although i consider that to be indispensable. but they need to be brief, without wasting a moment. i tried to explain in my message that everybody should work in that direction. i have no doubt that the chinese are also moving in that direction. they are very aware about the current international situation.

i have no doubt that the russians are also moving in that direction. i see it. i perceived it. i feel it. so i am talking about two major powers. in addition, in the case of the u.s.s.r., they are currently facing a major disaster as a result of climate change. the same evening we stated when we addressed the documentary "home," produced by the french film maker, where he worked with everybody's corporation -- we have another example of real disaster. in fact, i have more, detailed information here. we have now temperatures of 40

degrees centigrade. in that country, they are suffering the consequences of this. this is seen worldwide. and we need to make sure that the world moves forward. and we have made some progress along these lines. and that is our duty. this is -- it is not something that should be -- that we should be praised for. this is our responsibility. we need to move forward. that is what we are trying to do. the dialogue between civilizations is wonderful, but that is a dialogue over four years. we are talking about a dialogue that must be addressed in just a few weeks.

at least that is my opinion. it is not going to be done right away. it is not just these problems that need to be addressed with this new scenario. the number of problems are infinite. but i hope that the most outstanding, most intelligent human beings do what they can and at least make those first steps in reality, and not grope in the dark. otherwise, what is going to happen? do we see the end of the empire? the empire that is sustained through the force of war? wars are no longer instruments for sustaining the empire. the advantage with obama is that he is not nixon. nixon was a cynic. that country has had presidents. many of them were cynical. others were ignorant.

reagan was a total ignoramus. we had president carter, who was a decent human being, or president roosevelt. roosevelt -- the atom bombs would not have been launched over hiroshima and nagasaki. they would not have been dropped. it was done by truman, who was ignorant, irresponsible. he did not even drop these weapons against a military objective. there was no need to drop these bombs. the japanese were already defeated. the emperor had already made the decision to put an end to that war. that was before nuclear weapons were dropped. one was dropped, then a second one. do you know the power that nuclear weapons possessed that are accumulated worldwide? for example, just comparing the

destructive capacity of those first two bombs and those that are today stockpiled by mankind , and the two most powerful nations, the u.s. and russia, the explosive power of the weapons of cumulative worldwide are equivalent to 450,000 times greater power than the two weapons that destroyed hiroshima and nagasaki. it may appear -- it does not seem very meager. it is so destructive. what is left after that destructive power? nothing. thank you. >> comrades.

>> i am from [unintelligible] dear commander fidel, comrade, we feel enormous satisfaction to be here once again seeing you after all the time that has elapsed since your recovery. we have always been thinking of you. we have always had you with us, day-by-day, throughout this time. you have been our open reference that we can consult. you have maintained us up to date about the world. you have kept us informed about the evil causes and effects of corporate capitalism. you have warned us of the dangers that the human species faces with the deterioration of the environment. in recent days, you have also reflected upon the real possibility of the unleashing of

a large-scale conflict that we still cannot imagine its ultimate consequences, as we are all aware in this complex world of contradictions, and a convulsive one. commander, we have placed all of our hopes in latin america and the caribbean. that is why we would like you to discuss your perspective about the political scenario for latin america over the next few years. in some countries, we will see presidential elections coming up. thank you very much. >> comrade, at the outset i thought that a war would be unleashed, and on the basis of that i thought it would be unavoidable. i tried to imagine who would be

scared this. who would be spared the immediate total destruction? and i realized there was one region of the world that does not possess nuclear weapons, does not threaten anyone. there was not any reason to launch any bombs against this region. i am referring to latin-american and the caribbean, stretching from the u.s. border all the way down to patagonia. i do not think the falklands will merit being hit by bombs. i do not know. but latin america does not possess any weapons, as well as a part of africa. we know that we have our medical brigades deploying near australia, in east timor.

there we have deployed physicians. we hope it will not be affected. today, we discuss what are the effects of the spread of radioactive emissions. we know that in the desert in the united states, in arizona and nevada and throughout that region, the americans conducted many atmospheric tests without telling anyone. there were damages, but there were not destructive. i remember once when khrushchev exploded a 20 megaton bomb, which is 100 times more destructive than the bombs over hiroshima and nagasaki. and it was launched into the atmosphere. there were radioactive emissions over many areas. but how many of those kinds of

tests have taken place? i do not know. i do not know whether there would be the hope for survival. when i spoke with economists from the center for global economy, they were asking what can be done, given a situation like that, a very challenging situation. because if this was not discussed and all of a sudden one of my colleagues said, "what do you think of this scenario" -- it seemed like science fiction. what if everything were destroyed? what if the latin american countries were spared this? if you are in a situation like that as an economist, as a scientist, what would you recommend given this scenario? that was the question i posed to these economists. i continued to reflect further on this. i reached this conclusion.

i have absolutely no doubt that when you asked me a question about -- with this scenario that i have assumed, and i met with the center -- this was about a month ago. i have been reading constantly the news coming from other areas, and today the objective has to be even greater. if there is a nuclear war, and if we are able to preserve our scientific knowledge, a lot of what is today in existence, never have we seen a similar situation in history. there has never been another

instance where we have seen any other species like human beings. human beings were the first. the only date back a few thousand years, as we see it today. and we know that we also had the big bang theory. and all of the scientific advances have, for the ideologists, the religious theologian's know this, that the theory is harder and harder to sustain. they have to reinterpret their teachings. i pointed this out in an article that talked about the

evolution of man. it has been 18,000 years of evolution. well, evolution does not just go back 18,000 years. 18,000 years ago, there was just fire and matter. evolution began on the planet with the first microorganisms. that does not diminish the theologians interpretations, but what is the notion of time? time is something invented by man. man invented time. and how do we explain the beginning of time? that is what science has contributed to, to this body of knowledge.

and we know that the sun is not eternal. even the angels talk about the final extension of the sun. of course, that would end our sources of energy. that is where we get our energy from. therefore, if we are going to situate ourselves properly, some of these previous concepts that were mentioned do not contribute to a solution to the problem. we all hope that we are realistic in the way we view the problem. let us not try to focus our solutions, our approaches, with old ideas. we need to look at the real nature of these threats and we

need to find new approaches to the problems. >> representative leva has the floor. >> i just wanted to say that i, just as everyone else, have come here to listen to you, to learn from you. frequently you have said that if hitler had had a people like the cuban people he would never have done what he did. i think it is only through your example, through your teachings, to your inspiration, and with a highly educated people. you can overcome the most malicious threat, which is u.s. imperialism.

i would like to continue to listen to your comments. [applause] >> thank you. >> you are welcome. >> yeah reminded me yesterday. you send me a picture with your children. i want to thank you for that. i heard you at the monument to jose marti. you spoke there. you have picked up on these new ideas. you have good ideas. but i am warning that we need to make sure we make the most of overtime. sometimes, we talk and talk.

we are at the midnight hour and still have not addressed the true challenges. i never thought i would have to reiterate this so often. that is why i would like to or for the floor to the next speaker. >> i am from the province. commander, president, esteemed colleagues, i am going to be very brief. we have, over the last few days, been reviewing some historic documents. i found the biography of alfred nobel. i just want to read two lines

from his writings in his will and testament. he said, "what is left of my fortune will be distributed in the following way. the capital will be invested in stocks, and this will serve as a fund whose interest will be distributed every year through prices, and the prizes will be for those who in the previous year have been responsible for providing the greatest benefit to mankind. after he talked about literature, he said, "part of my will will be given to those who have worked most arduously and diligently in strengthening

brotherhood and reducing or eliminating existing armies, and celebrating and promoting peace ." now we find a nobel peace prize that mankind is facing right now. we have shimon perez from israel also facing threats, and in our own country, in our hemisphere, we are facing a situation in costa rica where we also have a nobel laureates. we know that many challenges are being faced in terms of weapons of destruction. you, comrade fidel, without being a nobel laureates, you are working and struggling to spare

mankind from these threats. i also asked, "what is the role of all of the nobel laureates worldwide in the struggle that you are so involved in?" what would the nobel foundation say? i also think that walter, who is with us -- he says that our only -- i think that walter is going to have to add to his report -- this is my opinion, cmdr. >> thank you. i think this is very interesting. i just wanted to say -- let me

just be specific on this point. a specific point that i think we need to analyze. i am being very straightforward. i have three questions. i would like to pose them to you. these, i think -- everything hinges on these three questions. the first one -- this is a question for all of you who are present here. it is for the representatives, those who are representing the press, to consider. although i know they cannot talk

openly, this is a question for everyone, those of you who are here. you can respond. just jot this down. the powerful empire -- if it were to withdraw its demands that irani and merchant ships be inspected, that is a question. my next question. for all of the cubans that are at this meeting, not venezuelans and everyone, but for cubans,

does anyone think that the iranians, 8000 year-old culture -- a thousand year culture more associated with the concept of death than we are -- do you think that they would not show the courage that we have shown up to oppose the demand of the united states? let me reiterate. does anyone think that the iranians, a thousand-year-old culture which is more closely related to the concept of death than we are -- do you think that they will not show the same

courage that we have shown in opposing the demands of the united states? a third question. this is for everyone. are there any solutions to this contradiction? i would add -- i am not going to say exactly what i added. but i would like to have you try to answer these questions. i think everything hinges on knees.

>> juan miguel gonzales has the floor. >> my family, my son and i, we feel totally committed to our people, to the world, and to the american people. i would like on behalf of my family to convey to the american people and to the president of united states if they can hear me -- you can hear me or my son. ensure that families throughout the world and the families of our heroes will be able to come

back and enjoy their families as we do. thank you. [applause] >> i would like to offer the floor to representative ofelia ortega suarez. >> commander in chief, president of the council of states, representatives, special guests, and friends, you, commander, have discussed the need to persuade barack obama.

and you have given us the inspiration we need for affecting this change. what you said this morning -- you provided us with a change for renewing our hopes to ensure that things can change. i would like to just briefly refer to what happened during the previous people's assembly comrade alarconan called us to mobilize urgently. we did that. we received in our e-mails very quickly almost an immediate call to action. we received the document that was passed by the congress in english, french, and spanish. we were able to distribute that too many organizations

worldwide. these messages were quickly disseminated. it was a very rapid mobilization. the results were obvious. you, commander, are calling upon us to mobilize in order to prevent this nuclear war. that is a call to action. we need to ask ourselves what needs to be done. i think the three questions you post are very clear. currently, the world council of churches and the secretary general are the basis -- they have issued a declaration against nuclear war. the commission on international affairs has also addressed these issues very directly. last year, the evangelical women's conference sent a letter to barack obama because on

thanksgiving the u.s. president can issue a release for our five heroes. we thought november that release would take place, that news would be forthcoming. we are going to reiterate because we have the next thanksgiving coming up. we are going to once again ask that our five heroes be released from prison of the next few weeks. therefore, i would say that what we need to analyze, and i do not know if the commission on international affairs -- i do not know if a special commission could guide us, in terms of the mobilization efforts that need to be conducted immediately after this assembly, with all of our resources. we must muster our resources. what specific actions need to be implemented? that includes answering the three questions you have already

posed to us that refer to the resistance by the iranian people. those people will resist the way we did. we need to focus on new actions that need to be carried out within the commission on international affairs. all of the efforts that we need to move forward with it after you're inspiring words this morning, were you called upon us almost with the same urgency as the efforts for combating illiteracy that cuba was also involved in. yes we can. we can mobilize many forces today to prevent nuclear war, to join ranks with those countries that are on the verge of war, and to do what we need to do. i would like to hear you, to hear your words and to perhaps

guide us on the kinds of initiatives that we could undertake today as members of the assembly, as members of the party, or as citizens of this country. thank you. [applause] >> ofelia, you responded very well. i am very satisfied with the answer. you have pointed out what needs to be done. that is we need to continue with the maximum amount of energy, following what you said, to try to spread the word with as many people as possible to convey that message. you also talked about specific dates. you were hoping, for example, that the comrades would have

been released by that date. i thought that one week is too little time. and december is too long. [applause] >> comrade de la rosa. >> dear comrade, colleagues from

the council of ministers, president of the assembly, representatives, guests will, i wanted to take the floor and speak on behalf of the cuban university students, who are very joyful to see our commander here once again, leading our people in such complex challenges faced by mankind. i speak on behalf of the 22 athletes that represented our country at the recent university international competition. the work crowned champions a little while ago. in the international year of youth, progressives throughout the world are looking to celebrate the 16th anniversary of the students for peace, solidarity, and social transformation.

we will overcome imperialism. we will develop in particular the african continent and south africa, an event that will be devoted to important figures in history -- nelson mandela and fidel castro. [applause] >> what message would you come part -- in part on the thousands of young people and students that will be in that continent? >> it would be the same message, more or less, that i conveyed it to the cuban youth leaders, that i conveyed when i spoke with them. i was asking -- where are you.

>> here i am, in the last row. >> you asked for the floor. >> i am back here. >> did you ask for the floor? >> i am just reflecting on your three questions and i will respond to them. [applause]

>> commander in chief, i am the president of the people's council of malagua. specifically, very specific, what do you think could be the role of the european union to try to prevent the conflict? i would like to get your opinion regarding the importance of russia and china after having not be towed the security council resolution. how significant is that? >> i do not want to judge events that took place, whether they were done correctly or not. what is important is what is going to be done now. i know that they are decisively

carrying out efforts to prevent war. i think that is very, very positive. i think that answers your question. [applause] >> dear commander in chief, i have taken a lot of notes from your comments. there is one thing you said, that you have to be an analyst and not look at things with old, traditional ideas. you need to find new approaches

to these challenges. there were a couple of things here that may reflect that in the province of gramma, i and the president of the teachers' association, we were able to establish relations with u.s. teachers. we received a large delegation of teachers from the u.s. in our province. they visited [unintelligible] and other provinces. i, as part of the leadership, was able to establish contact with many american educators. now communications have broken off. perhaps i need to make an effort

to restore many of these contacts and friends. i realized in this analysis that in the political and it theological struggle, where people need to know one another, i think this is something we need to focus. i found outstanding educators who have a great deal of admiration and experience throughout the country. i remember i met with 10 educators who had been selected to go to the united states. my family was like, are you going to do this? i finally was not given the authorization to go. but now i am ready to try to establish that closer cooperation. and i know that many educators who have visited and showed

their admiration -- they are going to join the ranks of this initiative and the struggle we are facing now. the other question that you addressed had to do with -- and this is for all the cubans at this meeting. do you believe that the iranians, who are much more facing death than we do -- do you think that they would not have the courage to face the u.s.? we, the cuban people, who love life, love life more than death, we have struggled for many, many years. we continue to love life. we continue to struggle. and we ensure that those who come here -- we know this is a

very important. i have no doubt that the iranians will be able to resist for as long as necessary. they will never yield to the demands of the u.s. government. that was what i wanted to say, cmdr. i wish to the best of health on behalf of the people. long live our commander in chief. long live our nation. long live our revolution. [applause] >> ranier saldivar. >> i represent the municipality.

colleagues, comments, commander castro, i would like to congratulate you on your upcoming birthday. do you think israel could be persuaded to not attack iran? that would then unleashed a war. thank you. >> no. [applause] >> frank fernandez has the floor. >> dear fidel, role, and all of our comrades here, i share the same emotion of everyone else by seeing you here. you know how much we admire you, and how much we are pleased to see you here so strong and clear.

we are in all of the brilliance of your memories and comments. among the artists, there is no doubt that the majority of artists have always been against war. they have used their talents, and their talents to show their anti-war sentiment. but many people, many citizens -- sometimes we believe that by saying something that is enough. not all, but a significant portion of the world, knows that what comes out of cuba is always

censored. they are not disseminated by the mainstream media. i was thinking about this. i asked. if all of the admirers, the fans of artists, would like to send a letter, what means could be used? i know in some cases they may not have internet services. they may not have the information. but what could you suggest to make that dissemination effective? you might think that i agree with this, i have the same desire to save the world, and to do what has already been discussed to prevent the destruction of the planet, to prevent war, to address economic and financial crises. as you have explained, and i think it is understood by almost everyone -- how can we convey

these messages, and tell the average person who shares the same feeling as we do? sometimes we ask ourselves, how can i send a letter to obama? how can i am sure that my ideas are disseminated? is there any possibility? could you provide us with any suggestions? that is my question. >> i would not advise that you send a letter to obama, because millions of letters are sent. he will never read "your comments are. you asked me a question. what can be done? what can you do to disseminate your opinions? they are positive ones. i would just ask you to continue to think about how to resolve this problem. i do not have an answer. i do not have a specific answer.

i do not have a specific answer. i do not have an answer. i cannot say how to do it. i am sure there is thousands of ways. you have already enumerated some. you must know many people who have the internet. that is what i suggest. you find those ways. >> comrades, i ask that we need to be even more brief comment and we need to now conclude our meeting. this meeting should convey a very clear message. the comments by fidel -- we need to urgently take action, to do

it in a creative way. we have spoken at length about this. comrade ofelia already gave an example about the action we took. we know she is a representative that honors this legislature. she is a member of the world council of churches. once, i called her to ask that she take some steps in addressing some of the many challenges faced by the group of five. we know she has been sending a lot of e-mails and getting in touch with so many people she knows around the world. that is what needs to be done. what i said to the members of the commission on international relations, not just to approve a formal document our declaration -- you need to think up new, creative ways to say how we can

replace that machinery of misinformation generated by the empire that can use all of the cutting edge technology. that cutting edge technology is at our fingertips as well. we need to use that to the utmost effectiveness. i do not think this is the time to formulate a work plan, but it is the time to at least assume a specific commitment that we will do everything possible. as an example, i have always said the same thing -- that whatever we do for the group of five is not enough compared to what the group of five has done for themselves. they have done that in isolation. in the case of herardo, he did

not have any technology available, just the phone and written correspondence. they tried to answer letters. they have contact with thousands of people throughout the planet. from prison, they respond to each and every letter. if they can do it with their limitations, imagine what those of us who are free can do. as my colleague sylvia once said, the idea is to add love and devotion to what we do. i hope that this is what the discussion would conclude, the message we would conclude with. i want to thank you for not just having come to the national assembly to discuss issues and listen to us, and to respond to

such vital issues. this has been going on for quite a long time. in fact, no one on this planet is doing so much for peace and for the salvation of our planet than comrade fidel. [applause] i understand that he has other things he has to do. his appearance here is not the only task he has today to do. he has many other tasks, and he carries them out with the revolutionary passion and energy that characterizes him. i would like to ask fidel, comrade fidel me, to provide us with a final conclusion for this

special assembly. >> excuse me, commander. commander? commander, you have asked three questions, and i was just saying that i was responding. please excuse me. i do not want this assembly to and without having stated the commitment that we have. the weapons of the empire -- we know they may be deployed. but the conflict with iran is going to be very serious. when fidel calls us with his body of knowledge, we have enough arguments to convince obama. but we have to determine whether president obama is intelligent enough to be convinced.

he can resolve these enormous contradictions. he has the solutions. but he needs to move quickly and show himself willing to make himself free of these limitations. thank you. [applause] >> i would like to ask if you have had an opportunity to get a copy of the book "victory and strategy"?

all right. i know several of you do have it. others to do not, i know it is not easy to get because it is still being published. i think we have up to 60,000 copies printed. the book is now being sold. for every book that is sold, five will be distributed or sold, or will be deaths. we will resolve this.

i committed myself, once the book was launched, that i would have the second book published, the strategic counteroffensive. i have been working on this. i have been working on the book over the last few days. it is almost ready. many of the ideas are already written. and i am not going to describe the events of a battle that i worry about, and who participated. obviously, these are things i cannot invent. i need to use a lot of historical materials, documents, and put them altogether. but that is almost ready. and i hope there is going to be enough time to publish that book and be able to submit it to

you. the other day, i was saying -- obviously, my most uncertain -- my most important concern and activity was to hold this meeting. this is the culmination of my efforts. tomorrow, i am going to have the pleasure of meeting with visiting venezuelan journalists. that has already been agreed upon. others are also coming. i think it is going to be a very useful meeting so that we can discuss the same questions i already posed to you.

other issues may arise. i am also going to discuss the official launching of the book. for now, i have nothing else to do. i think i have extra time. we have to start thinking, all of us, as the poet said. we need to -- with the literary prize that was given. i know that pays a major reward. i believe that because of the humor, the profound ideas, i

think we need to disseminate that at home. well, that is all i had to say. nothing else, comrades. thank you very much. [applause] thank you for a your attention. hopefully, we will see each other again soon. [applause] [applause]