the >> hello, everyone and welcome to "the journal." coming up at this hour -- a moscow court delivers a guilty verdict to russian oil tycoon, mikhail khodorkovsky. germany moves to protect computer networks against cyber attacks. a blizzard hits the northeastern united states, creating a mess for holiday travelers. >> the person once considered russia's richest man has been found guilty in a second trial of my real -- of money laundering and embezzlement.

mikhail khodorkovsky was due for release next year and a verdict drew immediate condemnation as it was seen as politically motivated. germany led the european criticism of the conviction, calling the verdict a step back for russia. >> khodorkovsky smiled at his family and decorum. the judge convicted him and his business partner of stealing nearly two under 20 million tons of oil from their own company. khodorkovsky, a vocal opponent of the kremlin, had been due to leave jail next year. but after the latest verdict, it looks likely he will spend more years behind bars. outside the court, his supporters showed their outrage. they were ordered by police to put away and the-government banners. there were scuffles. around 20 arrests were made.

lawyers said they would appeal the ruling. >> we have no hesitation in saying the court was under pressure. the court was not free to make a proper decision. >> his supporters have no doubt who engineered the verdict. >> the judges under tight pressure from mr. putin. >> the russian prime minister, who thrives under a strongman image, but is thought to want to see him in jail. the verdict will ensure he stays in jail for the vote. >> we ask our moscow correspondent have much political interference was part of the judge's ruling.

>> from the start, this trial has been seen as a political trial, master minor -- masterminded by vladimir putin. the allegations that were brought forward by the state prosecutors have always been doubtful. khodorkovsky was accused to have stolen all of his oil and that's impossible, according to a number of witnesses who -- and along the line of state ministers. it suggests there are political reasons behind the trial and khodorkovsky and his allies are pointing the fingers at the prime minister who they see as a driving force behind this. >> we will have more on the trial coming up later. a suicide car bomber in afghanistan has killed at least three police officers in

kandahar. officials say the vehicle exploded in front of the bank or people were waiting to collect their salaries. the blast damaged houses and buildings in the facility. the region is considered a stronghold of the taliban. in iraq, the deputy interior minister says to bomb blasts left at least 17 people dead and dozens wounded in one of the western cities. a vehicle exploded outside the building of the provincial government. that was followed later by suicide bombing. it used to be a stronghold of al qaeda, but in recent years, local militias have restored relative calm. in ivory coast, a call from it -- call for the general strike from the prime minister has failed to shut the city down. he asked him to go on strike until the incumbent president steps down.

western powers have been increasing pressure on him to step aside. many ignore the strike, but supporters of the paris succeeded in occupying the embassy there and demanding he step down. italian bond disposal experts have defused a bomb found at the greek embassy building in rome. police say the device was similar to two parcel bombs that blew up last week at the swiss and chilean missions in rum, injuring two people. an italian anarchist group claimed responsibility for the blast. >> italian police dispatched bomb disposal experts to the greek embassy in rome. a parcel bomb arrived on christmas eve, but it was not discovered until monday morning. >> we discovered a suspicious package with the correspondence of the embassy.

we immediately informed the authorities who arrived in minutes with the appropriate services and the bomb was neutralized. >> embassy staff were evacuated before the device was successfully disarmed. no one was injured. police say the bomb was similar to to devices that some -- that exploded at the chilean and swiss embassies last week. an italian anarchist group claimed responsibility for the first two bombs and police say they could not rule out an artist involvement in the latest incident. >> german shop owners have reasons to be happy -- to be happy. >> they have done a brisk business and online retailing is doing well. german retail sales over the holiday shopping season have jumped to 0.5% over last year. this shows that consumers here remain confident in keeping their jobs.

this is in stark contrast to economic problems elsewhere in the eurozone. the association of german retailers picks sales will top 77 billion euros for november and december alone, including gift certificates which people are beginning to cash in starting today. >> just one day after the christmas holidays and german shops are bustling again, as here in berlin. many germans are using their days off leading up to new year's to redeem debt certificates they found under the christmas tree. >> we see more and more gift certificates because people are unsure of what to buy. this morning, a customer exchange state giant teddy bear, a present for a 1-year-old child. but the child cried upon seeing it. sometimes it gets to its advocates are a better idea. -- gift certificates are a better idea.

>> i brought my grandfather a card shuffling machine. it did not work and he did not seem happy so he's getting a gift certificate. >> another trip to the department store in grand debts future. as a post-holiday season gets under way across germany. >> automobile stocks in china tumble today when beijing announced plans to introduce a lottery system for license plates and a plan to cut new-car registrations to more than half. the policy is aimed at reducing traffic congestion in the chinese capital by allowing cars with even or odd number license plates to drive on alternating days. analysts expect smaller automakers to be hit hardest. >> beijing traffic is threatening to grind to a standstill as 2000 cars are put on the city's roads every day.

there is frequent gridlock and pollution is getting worse. the government has begun to act by restricting new registrations to half the current level. other large cities to follow suit. it is a worrying development for german car makers who thrive on the china's rapidly expanding car market. volkswagen alone sold nearly 2 million new cars in china between january and november of this year, over a quarter of its global sales. bmw's china's sales topped 153,000. daimler sold 130,000 of its luxury mercedes benz brand this year. german car makers expect the performance to continue next year with volkswagen announcing plans to invest 6 billion euros in china by 2012. these optimistic forecasts are based on china's rapid car market expansion in recent years.

>> the announcement to restrict driving in the inner city of beijing has a knock on effect in europe. automobile stocks were among today's leading decliners. our correspondent in frankfurt as more. >> investors were shocked at the news from china -- said that prospects for volkswagen, bmw and daimler seem to have darkened. what if other cities besides beijing take the same measures and curtail sales of new cars? the investors sold the shares and were the top losers this day, but they have a lot to offer. they have developed in value this year with volkswagen and bmw doubling in value so far. so there was some profit-taking as well. the dax also suffer for another reason -- what is raising the elite of interest rates there and people fear this will further affect orders for export

from german companies. >> looking at several market indices in a bit more detail, we stay away fact -- in frankfurt, the dax blue-chip closed down 1.2%. the eurostoxx 50 was down about the same period in new york, stocks are moving a tad lower following the interest rate hike by the chinese central bank. the dow jones industrials currently nearly unchanged. the euro is trading for $1.31. the german chamber of commerce, the dihk, says the boy and jobs market is likely to continue throughout 2011. the dihk forecast industrial output to increase by 5%, twice the rate the rest of the german economy. this increase is expected to create 70,000 of an expected

total of 300,000 new jobs. next year, especially in electrical engineering and rubber and plastics. >> germany's foreign ministry says to german journalists being held in iran will be allowed to meet with their family members. earlier, berlin summoned the iranian ambassador to express anger over the denial of a christmas visit despite earlier promises. the two reporters were detained in the town -- were detained in october on the case of a woman sentenced to death by stoning. authorities said the men had not obtained permission to work as journalists in the country. the german interior ministry says germany plans to create a cyber warfare defense system to fight spi attacks. authorities registered 1600's for attacks, mostly from china, on computers and mainframes and

government networks and in german industry this year. the government is moving to defend sensitive information. >> the number of attempts to attack government and business computer networks have soared in recent years. the attacks often originated in china, raising suspicion the chinese government may be involved in cyber espionage. >> these attacks aimed to extract know how and confidential government intelligent and economic data which outline how germany has prepared for certain situations. the palace of knowledge is quite big and figures show there is keen manifold interest in it. >> cyber spies are interested in high technology and seek to disrupt targeted networks. in 2007, estonia and computer systems were paralyzed by a tax believed to have come from russia. delegates at the annual congress

in berlin warned companies and authorities not to rely entirely on the internet. >> germany is a classic case. there are efforts to keep critical systems away from the internet, but it is no longer the case in other countries. sometimes, electricity stations are managed by the internet and that could be fatal. we should try to seal them off. >> germany intends to set up the cyber warfare system of the 2011, bundling together expertise from police and intelligence agencies to improve network safety. >> a major blizzard has paralyzed the northeast of the night states. thousands of flights were canceled, leaving many people stranded after the holidays. the states of maryland, new jersey, north carolina, and virginia declared emergencies after record snowfall. residents of america's biggest city and themselves in a winter wonderland on monday. >> new yorkers woke up on monday morning to find hardly any

traffic and usually drowned pact times square. -- easily jam packed times square. up to 57 meters of snow has falling -- has fallen between maine and north carolina. most trains have stopped running. snowplows for the only things moving at new york's airports. 1400 flights were cancelled on sunday, leaving many travelers stranded and uncertain about when they would reach their destinations. >> we should be leaving at 4:30, but it seems like we will make out until tomorrow morning. by wedding is in about a week and half. >> stranded passengers are camping out in terminals, using anything they can find to sleep on, even luggage trolleys. little things count allot in such situations. >> we got lucky.

i had one and she had the other and we wheeled them together. >> staying indoors is the best solution on a day like this. several states have declared snow emergencies and have urged people not to travel. >> in europe, the situation is not better with the snow and ice on roads across jeremy making travel difficult. buildings could collapse under the weight of the snowfall. this has happened in one city where the roof of a gymnasium came down. crews have been clearing snow off the routes to prevent more collapses. many public buildings have been closed as a precaution. crews are looking over time to keep traffic moving and sidewalks clear. forecasters say this winter weather isn't likely to continue well into the new year. it is selling as we speak. >> isn't it fun? >> maybe for you.

>> "in depth" is coming up next. >> dwtv in january -- from a motorized coast -- motorized coach to be intelligent vehicle of the future, 125 years of automobiles on "made in germany." money is his business -- the man at the helm of deutsche bank. powerful and controversial, the world of joseph ackerman. >> once a sleepy alpine village, it is now a top jet set

party destination. a winter fairytale -- january on dwtv. >> he's one of the most well- known prisoners in the world and it appears he will name -- will remain behind bars for some time to come. mikhail khodorkovsky has again been found guilty by a moscow court which hardly comes as a surprise. critics say his first conviction was politically motivated and many say little has changed this time around. he and his business partner now face the prospect of several more years behind bars. prosecutors asked the judge to sentence khodorkovsky to six additional years. the guilty verdict will ensure he is firmly out of sight during the country's presidential elections in 2012. >> khodorkovsky was putting on a brave face as he was led into

court last september. he and his partner are accused of stealing oil worth the 16 billion euros. they have already been convicted of already been paying taxes on. many believe the government just wants to lock khodorkovsky away for as long as possible. >> i do not doubt we will win in the in -- we will win in the end. this is clearly nothing but a show trial. >> khodorkovsky made a huge fortune in the 1990's from russia's rich oil reserves. it made him the wealthiest man in the country. his company was regarded as a model state of the art enterprise. khodorkovsky was one of the country's first oligarchs -- the collection of post-soviet rich businessmen suspected of using dubious methods to make millions. but unlike other or and --

unlike other oligarchs, khodorkovsky used his money to make inroads into politics. he supported the opposition, denounced corruption under vladimir putin's presidency, and criticized state influence on the economy. that proved to be his downfall. in 2003, he was arrested and charged with fraud. he was sentenced to eight years in a siberian prison camp and his oil company was run into the ground with constant demand for unpaid taxes. the latest trial has prompted international protest. many see the case as a political vendetta. vladimir putin's successor, dimitry medvedev, says rule is paramount in russia. but others argue if that were the case, this trial would have never taken place. one thing seems clear -- the russian authorities continue to see khodorkovsky as a danger. >> the latest guilty version

certainly backs that view. although he will remain behind bars, he will also remain the symbolic figure for the russian opposition and civil-rights movement. khodorkovsky became one of russia's most powerful business and by buying state assets cheaply and trading commodities after the soviet union fell in 1991. but the average russian is simply unaware of his plight. state media is controlled and seldom reports on the case. few media outlets take the chance to criticize the kremlin. a show of public support for him and his co-defendants is a rare event. >> a miniature of khodorkovsky made of papier-mache. it picks everyone involved in the trial, as well as those who may be behind it. the exhibition by a young moscow artist a is to show the support for khodorkovsky. >> i admire the accused.

before they were arrested, they were handsome oligarchs i did not care about. but now they're standing up for their ideals. >> a few finishing touches and the exhibition is ready. everyone knows their views are not shared by the most russians. >> i was that my parents last summer in the small town where they live. when i told people about the khodorkovsky exhibition, a lot of people asked who he was. they don't know anything about him. there is no information available. >> few russians have heard about the boarding school set up to educate orphan children. his mother shows visitors are on the school on the outskirts of moscow. the opposition politician remains contact with the family. >> khodorkovsky did not flee

russia when he had the chance. he stayed, fought and sacrificed his freedom for his ideals. he is a unique example of civil courage. i'm convinced that sooner or later, russian society will appreciate that sacrifice. >> khodorkovsky's mother received support from the students and teachers and the kremlin critics. he feels the white russian public is ill informed about his influence. >> the vast majority of russians formed their opinion about what is going on in the country and the basis of the information they receive on state-run media channels. they only disseminate propaganda. >> this students at the boarding school have been targeted. state media reports is nothing but a school for criminals. but the 160 students here are proud of their school's founder, no matter what the rest of

russia thinks. >> we talked earlier to a member of the german-russian parliamentary group and has been following the trial. we began by asking her about her impressions of the proceedings. >> in this court room, there has not a chance for arguing and discussing what is really the truth. the prosecutors have only been reading pages and pages and pages and they'd never discussed an argument given by the lawyers. they would have to act spontaneously and the judge would interrupt the trial. prosecutors could withdraw and came back again with written pages. you did not have the impression

that with in this courtroom, there was a true search for the truth. >> after the verdict was postponed, you asked the german government and european commission to step up pressure on russia to ensure a fair trial. that seems to have happened without success. why? >> the statesmen and stateswoman of the european union to not act enough together. there is not enough joint action. we have given russia and the kremlin the chance to divide each other up and, remember nikolas sarkozy having a good friendship with vladimir putin and getting an oil field for the hotel. we have a bilateral agreement -- and oilfield for totale.

the possibility that the kremlin could act and by one by one european states was very bad. on we would have needed joint actions by the big firms. they all want to invest in russia and russia wants them to invest. if they would have been more outspoken that they need the rule of law in the country where they invest, maybe the kremlin would have understood. everyone just went on coping the money would come fast enough. that they would get by and it would not happen to them, what happened to their enterprise. >> thank you very much.

with that, we wrap up "the journal" at this hour. thank you for joining us.

>> abirached: hello and welcome. i'm raya

>> abirached: hello and welcome. i'm raya abirached and this is world business your weekly insight into the global business trends shaping our lives. this week we are looking back at some of the best stories of the last 12 months... a year in which the rare earth metals, vital for the manufacture ofmany high tech devices, become much better known. china controls 97% of the world's supply and thisyear slashed exports, exposing the vulnerability of the us and japan in relying on a steady supply from the middle kingdom. >>reporter: saudi arabia has oil; while china has very valuable rocks. this is baiyun obo (pronounced bye-yoon oh-boh), inner mongolia; mile upon mile of mineral rich craters - blasted, shovelled, shifted then processed

to produce, from here alone, over half of the world's supply of rare earth metals. these elements like lanthanum and dysprosium are light, malleable and have strong electrical and magnetic properties. rare earths are essential to modern, tech-driven, urban life - in fact, your mobile phone or laptop could well contain a piece of northern china. >>anwen: as we entered the 21st century, it was clear that rare earth is the treasure of new materials. it's the key hi-tech material - and in many sectors, there is no other metal substitute. >>reporter: and, for now at least, there's virtually no alternative to china - which controls 97 percent of the global rare earth supply chain. the us used to dominate the market. but in the mid 1980's, china ramped up production and undercut prices - rendering exploitation of north american reserves unviable. for most of the past 20 years, the developed world

has allowed its own mines and processing plants to close, relying on low cost chinese supplies instead. but technology hasn't stood still. today, industries dependent on rare earth metals - including fibre optic cables that power the internet, flat screen tvs and alternative energy applications - account for an estimated five percent of the global economy. as the world embraces the "green revolution" - developing alternatives to fossil fuel power - demand for rare earths is expected to grow by 10 percent annually; spurred on by governments offering incentives to low emissions products like hybrid cars. >>dekang: when the electric motor starts, the petrol engine stops. so no fuel consumption and no exhaust. compared with a standard engine car, this hybrid can save 41.7 percent on petrol. >>reporter: each toyota hybrid uses up to two kilogrammes of these key metals

in their drive motor and rechargeable battery. and this carmaker alone plans to double production to one million units in 2011. but from hybrid cars, to tech gadgets, to huge windfarms sprouting around the world, producing tomorrow's green technology is fraught with problems. first, the eco-contradiction: mining and processing rare earth elements in china is a dirty business- even in a large plant like this. many smaller plants don't bother to treat toxic chemical laden run-off properly, instead dischargingwaste straight into rivers. and then there's the supply chain itself - which is now under pressure. and china has upped the ante. in a bid to control prices and consolidate a fragmented, industry, an export quota was introduced in2004. this has decreased every year since, with an export tariff rising. 15" overseas demand now

surpasses the quota - leaving downstream western manufacturers vulnerable. >>mackie: the us and the eu complain that china's rare earth production strategy - trade, taxation, investmentand export policies - violates its world trade organisation commitments and distorts competition. the chinese, on the other h if others want more rare earth metals, then they should exploit their own resources. >>reporter: so rare earths are now highly political. and especially so for the us military which, in a glaring example of supply chain neglect, depends on imports of these metals for sophisticated radar and weapons. to bolster global supplies, plans are now in place to have two new rare earth projects - in california and australia - operational by 2014. however, baiyun obo will still be, by far, the world's biggest mine- though china wants to ensure that its output is used mainly to develop domestic tech manufacturing, especially

as other countries, including south africa, canada and brazil, are sitting on reserves. >>anwen: they have their own resources, can develop their processing industries and they have their own market demands. why do they only depend on supply from china? it's unreasonable. >>reporter: china is of course cheaper. that aside, it's not out to totally deny others of more rare earths - the likes of which are used inthese eco-friendly washing machine motors. these low-noise, energy efficient components are made in the us with rare earth metals from china. the finished parts are then shipped back to this factory in china's qingdao for assembly. >>sheng: they are good at producing parts. and in partnership, we make the job easier. the two companies are responsible for design and development, but our suppliers produce the components. >>reporter: but by cutting its export quota, china - with its near

monopoly of rare earths - is in effect strong-arming parts makers to move production here in order to guarantee supply. for foreign companies, this presents a considerable sovereign risk. for the chinese, such investment would help realise the goal to move the economy further up the value chain. rare earths are of such high strategic value, that tensions between the key players will certainly not be in short supply. >> abirached: last year european airlines lost 4.3 billion dollars. at the same time one of the uae's two major airlines, emirates, made almost 1 billion dollars and the other, etihad, is the world's fastest growing airline. so why are they so successful?

>>reporter: dubai's airport keeps on growing. in 2012 its third terminal will become the world's largest building - at least by floor space. it needs to be - as emirates' home base it has to keep pace with the airline's staggering expansion. this year alone it has ordered 25 billion dollars worth of new planes.>>clark: rather than contract, rather than drop our fares, rather than lay off people, rather than cancel orders we went completely the other way. >>reporter: emirates did however cut union costs some 17%. it put pressure on its suppliers, dropped routes or changed the planes flying them and offered the employees the chance of unpaid leave. dubai's airport also operates longer than its european counterparts and it is playing during the air up to 18 hours a day. but perhaps a more fundamental reason the airline made money is a combination of new long range aircraft and simple geography allowing it to link any two cities, anywhere in the world, via

a stop over in dubai. >>pearce: i think the geographical location of the gcc is key both to the expansion strategy and also the success that has been seen already by many of the airlines in the middle east. it does place those hubs within reach of a single flight to most of the larger markets in the americas, in asia in australasia and in europe. >>reporter: such rapid growth has led some rivals to argue that the airline must have had help from the dubai government. an accusation the airline dismisses out of hand. >>clark: the day you can you show me where we are subsidized i will resign. it's as simple as that. >>reporter: the competition is picking up. after its founding in 1985 emirates enjoyed 18 years as the uae's sole carrier. then, in 2003, abu dhabi, the uae's capital and richest emirate, decided it also needed an airline, to help fuel its growth strategy.

>>shemmari: we are going to be doubling the population within 2030 when you think about those kinds of numbers there is a lot of significance of residents, not just transiting of population, and businesses comingto abu dhabi. >>reporter: abu dhabi's etihad is, like emirates, following a strategy of rapid expansion. >>hogan: what we've seen is an eleven percent increase for the first half over the same time last year - we also took eleven aircraft in the second half of last year too. >>reporter: at present etihad is still losing money and is reticent to release figures, but its ceo says that this would soon change >>hogan: we're targeting to break even at the end of next year - and to move into profitability. >>reporter: profitability that escapes the established carriers of europe. lufthansa was down 135 million in thefirst half of the year, ba lost 250 million dollars last quarter alone and air france klm suffered a staggering loss of nearly 2 billion dollars in the last year. the volcanic ash cloud may have played

a part, but the main reason the legacy carriers suffer is simply - legacy, while those from the gulf have been able to start efficiently from scratch. >>pearce: the performance of airlines in the middle east is certainly helped by the fact they were green fieldset ups, they weren't hampered by the legacy working practices and systems that many of the larger european airlines are struggling to deal with. and we're seeing lots of labour disputes in europe atthe moment - which are really the result of those legacy practices. >>reporter: some airline analysts also believe europe's taxation policy is playing into the uae's hands since someone flying from, say, asia to the united states can just as easily stopover in the low tax uae rather than london and avoid the extra charges. >>tarry: if we have, as we do have, taxation on the environment, people might want to avoid coming to the uk to change aeroplanes and you can avoid that by going through a carrier in the gulf. >>reporter:

and there could be some more turbulence on the horizon, with the extraordinary growth of the uae's airlines raising the issue of overcapacity - a common feature of the airline business. >>pearce: well, in the airline industry there is always the problem of overcapacity - it's an issue that has really held profitability down ever since the industry started in its full commercial form. >>reporter: dubai is already building a second airport which will funnel 160 million passengers through the emirate. abu dhabi has plans for 40 million passengers while neighbouring qatar, with its own airline torival both emirates and etihad, has plans for 44 million within the next five years. but this sort of expansion, albeit on a smaller scale has been seen before... >>hogan: probably asked the same question about asia in the nineteen seventies when you saw the asia hubs being created with cathay, with singapore, with malaysia next door to singapore. >>clark: there will never be a question of capacity outstripping demand for emirates. in truth with what we have ordered

and will order we are still short of capacity even when all these airplanes are in place. >>reporter: when talking about the gulf there are no certainties but as the centre of economic gravity shifts further eastwards there are for example 2 billion people within 4 hours flying time of the uae it seems that the new breed of carrier is now cleared for takeoff. >> abirached: still to come on world business... the brave new world of automated trading, where speed is king. is shark diving in south africa a valuable tourist attraction or does it just put surfers and swimmers on the menu. coming face to face with jaws.... and the rest in just a moment on world business... >> abirached: since stocks

and shares began to be traded, markets have fluctuated, sometimes wildly as confidence and panic swell, than crash prices. the reason for this of course is that even traders are often irrational and emotional. but increasingly stock trades are being handled not by people, but by machines and it's a trend that looks set to grow. >>reporter: once, trading floors looked like this. but in the 80s computers swept most of the old bear pits away, today a sizeable bulk of trading is carried out by deskbound brokers. even this could soon change as more trading becomes entirely computer controlled. >>misra: if we go back to the floor trading days where we had lots of individuals on the floor reacting to market movements, now it's almost like the movie terminator, you've got a lot of machines in a room and they're making trading decisions. >>reporter: one

example is hft or high frequency trading, in itself not that new, but huge leaps forward in technology coupled with market deregulation have made this form of automated trading massive. >>todd: high frequency trading has been around at one level for a long time, it's just the frequency and thesize of it has increased dramatically and that is an advent of the way technology has advanced. >>reporter: technology that runs increasingly complex mathematical programmes, which automatically search markets worldwide for minute changes in share prices and carry out transactions at an unbelievable rate. >>todd: when we are talking about high frequency traders we are talking milliseconds. >>misra: you have got systems like chi-x where you are actually seeing on average 600 microseconds. >>reporter: that's fast. far faster than humans could even process the price information. as a result the sheer number of trades has rocketed. in the us only 2% of financial companies are high frequency traders, but they account for nearly 75% of equity trading volume. and by dealing

in bulk at speed hft companies can make money where sluggish old school traders can't. >>lester: shares traditionally were market made either on the telephone or the floors of exchanges in the 1980s, spreads tended to be a lot wider. high frequency trading firms tend to make markets inside those spreads and they can do it in much smaller size and tighten the distance between which you can buy and sell shares at. >>reporter: however to do this takes some serious computing power and that takes space, but data centres can be based practically anywhere. nearly an hour's drive from the financial district of london, in a dreary satellite town is ld5 the heart of trading firm equinix's financial operations. >>reporter: for obvious reasons we can't show you the exact location as they take security very seriously indeed. but once past the bulletproof glass, mantrap, air lock and biometric scanners you can, under escort, have access to 16,000 square metres of technical space.

>>schwartz: in coming to slough we were able to find a very large facility but also with access to power which is critical to the growth of electronic trading but also with close proximity to major telecommunications routes to allow people to connect both to other exchanges and other places around the world. >>reporter: which is vital, because no matter how fast you trade, someone will be competing to trade even faster. by "co locating" in the same building as exchanges and communication hubs milliseconds more can beshaved off transaction times. >>schwartz: at the velocity that many of our customers are trading, at many trades per second, being able to reduce that latency improves their performance, improves their chances of being successful traders. andso, whereas before people worked very hard to shorten the distance by being in the same city, now it's literally about being in the same room and having, you know the speed of light

work to their advantage. >>reporter: however this brave new world is not without its problems. in may this year the dow jones plummeted nearly a thousand points in a matter of minutes in a "flash crash". that some argue was caused by volatility following hft firms pulling out of the market. others believe it was simply a very human reaction. >>carjat: chief executive, atrium networks what we have seen recently is that some of the hft might just simply pull out of the market and that can cause an issue, because all of a sudden that liquidity pool that was there all of a sudden haddisappeared and significant volatility ensues. >>hemsley: i think that one of the biggest problems was there was a lack of certainty about whether a trade that had been executed in the market was going to stand or not. >>reporter: what is certain is that regulation is high on the agenda across the entire financial industry and asa relatively new and rapidly evolving area hft is sure to come under the spotlight. >>misra: there is a high frequency witch hunt

as i call it out there at the moment, whether it's the regulators pandering to political sentiment. >>lester: i personally believe there's enough regulation in the equity markets as there is! in terms of high frequency trading, they're a natural force, they... we think add positively to the market, don't exacerbate volatility, and are not there to be regulated out. >>reporter: however it is regulated high frequency trading is here to stay and as technology continues to develop will no doubt become faster and even more efficient. >>misra: there's been comments out there about "are we going too fast? should we slow systems down in some way?" actually that over turns mores law which means every few years the price of technology halves and the capacity doubles. and if we look at technological advancement and human advancement, that flies in the face of that and if we took that approach of just slowing technology down i think we'd all be living in caves again. >>keith todd: the level of sophistication in algo trading

and high frequency trading is going to continue to increase. at one level almost an infinite number of possibilities. and that's what makes the markets, andmakes them very, very interesting. >>reporter: and could even make the vilified banker a thing of the past as well. >> abirached: the idea of getting into the water with a great white shark would turn many people's blood cold, including mine. but in south africa an industry has sprung up to cater to thousands of tourists keen to do just that. however the business is causing controversy, with accusations it attracts sharks to areas popular with swimmers and surfers. >>reporter: the film jaws has a lot of answer for in whipping up fear and misunderstanding about the great whiteshark...one of the world's greatest apex predators...but that terror

has also lead to a tourist boom in south africa with bookings to get up close and personal with him doubling in world cup year. >>scott: gansbaai ...200 kilometers east of cape town and home to the greatest concentration of great white sharks in the world ...and people just love to come and see them. >>reporter: shark-cage diving is now thought to be the number one adventure activity in south africa. in gansbaai alone, it brings in around 40 million dollars a year, with hollywood helping all the way: >>reporter: kim, the sharklady, maclean pioneered shark-cage diving in 1992. she is one of only a few recognizedoperators

in south africa. she's passionate about the animals. >>maclean: i actually started the shark cage diving many years ago and really at the back of my mind was to educate people and to simply to take people out with their fear and bring them back with a new perception about great whites.... it's a good thing because it is creating an awareness..and it is changing people from saying, you know, the only good shark is a dead shark to wow, what an awesome animal, what a graceful animal, rather than man-eating monster. >>reporter: around 30,000 tourists a year pay around 180 dollars a trip to be lowered into a metal cage to come face-to-face with a great white. the predator is enticed toward them with a heady mix of chum...a soup of blood and fish. >>it was incredible i could have reached out with my finger and touched its nose. it was quite scary. >>reporter: but shark-cage

diving has not been without controversy. since its development in south africa in the'90's, it has coincided with an increase in a number fatal shark attacks further down the coast closer to cape town. many blamed shark-cage diving and said it attracted great whites to humans. however scientists and conservationists say there's no link. >>titley: scientific research has been done which says that it doesn't and you tend to sort of like, if peoplehave done research, you tend to think that it's true. i think that it is an interesting situation because it is not done with other animals...but i don't think that there is any real connection between shark-cage diving and shark attacks. >>reporter: the great white has been protected since 1992 and its numbers have increased, particularly around the cape peninsula. nearly eight years ago, craig bovim

was attacked by a 5 metre-long great white. hewas diving for lobster when he noticed the animal swimming parallel to him: >>bovim: he turned away and i lost sight of him and next moment i saw off the surface, which was this very large fin bearing down on me...and i knew he was coming to get me...and he did...and i tried to get out of his way unsuccessfully and by throwing my arms up at the last second, managed successfully to avoid him biting my head. >>reporter: somehow, craig managed to get away and in spite of his injuries and survived to tell the tale. at first he was the poster-boy for the anti shark-caging lobby...he's now mellowed but still isn't entirely comfortable with it: >>bovim: just because they propose that it is good doesn't mean that it is actually sustainable and it is ethical...and it's an excuse...they are also making a lot of money out of it, so they have to justify their business. >>reporter:

to protect swimmers and water sport's fans, shark spotters was set up in 2004 to cover the most vulnerable beaches, crucial in a country where tourism brings in around four billion dollars annually. >>reporter: with its system of flags - black means poor visibility - red means sharks nearby, it has made peoplemore aware. >>thurtell: i do surf various spots where there aren't shark spotters...but it's nice knowing that there is somebody watching the water...not that they can always see clearly though. >>reporter: despite 4 fatal shark attacks last year and one death in january, humans are not top of the menu forthe predator who is much more interested in cape fur seals and fish: >>sikweyiya: i have quite a lot of respects for sharks and i think like, ever since i've worked with the shark spotters, i've changed the way i've thought. >>reporter: whilst the responsible shark-caging boats follow a self-regulated code of conduct, the south africangovernment is

about to formalize the industry. operating licences will only be granted to those following strict guidelines...to make sure the only sharks out there.....are the ones swimming in the water. >> abirached: that's it for this week's world business. thanks for watching. we'll see you again at the same time next week. >> abirached: hello of the best of europe.

venice seems to be every italy connoisseur's... prague has always been beautiful... germany... the irish civilization... the eiffel tower was built... hope you've enjoyed the magic of... [ lilting flute music playing ] the beauty of the highlands is powerfully felt

in the vast rannoch moor... hundreds of desolate square miles much enjoyed by hikers and lovers of nature. [ flute music continuing ] [ bagpipes playing ] the windy expanse of the highlands -- this is where piping feels right. roadside pipers entertain travelers for tips on the road into glencoe.

boy, that's great. thank you. can you give me a quick tour of your -- of your gear and everything? yeah, surely. you've got your bag, hand-sewn -- hide bag. lovely. then you've got your two bass, your tenor drone. the blowpipe. to fill the -- to fill the bag. yeah. and you've got your standard keyboard. it's where your music comes from. so is you can play the recorder, you can actually -- you have to fill the bag but when you play this -- can i give it a whirl? yeah. okay. so you're gonna power the organ, and then i will try to cover all these holes. [ off-key droning ] [ playing screeching notes ] very good. my first lesson.