it. police in norway will interview anders breivik today. he's in solitary confinement in a prison near oslo. meanwhile police have called off the search for more victims of the shooting rampage on utoya island. 68 people were killed. a formal inquiry into britain's phone-hacking scandals began in london. a woman who worked with the now depuck news of the world tabloid after her daughter's murder now says her phone was hacked. sara payne had defended the tabloid, even writing the last edition, and calling it a force for good. there's been some break for the rain-soaked korean peninsula, and the clean-up is under way. huge tract ts of farmland are flooded in northee kra and about half a meet over rain poured down on the south korean capital in just 48 hours. at least 51 people died in floods and mud slides. those are the headlines. i'm zain verjee, and "world business today" starts now. -- captions by vitac -- www.vitac.com a very good morning to you. from cnn london, i'm nina dos santos. >> and a very good afternoon to you from cnn hong kong. i'm manisha tank and it's friday, july 29. the deadlines get closer and closer. >> and while washington remains in deadlock, what do investors and analysts have to say? we hear from some of the experts. and if the u.s. does miss that deadline, the question is what happens? we'll be taking a look at the possibilities. so we're getting closer and closer, yet another day passes, and it's the same old story in washington. there's still no awe agreement on reaching the debt celling and that leaves us just four days to go until the august 2nd deadline and a possible default. >> well, we thought we'd need to see progress late in washington. progress at least. inestate 10:00 p.m. local time the word came there wouldn't be a vote. republican house speaker john boehner failed to get enough support from his own caucus to bring his own debt ceiling plan to a vote. that plan would have raised the debt ceiling and cut spending but the ultimate conservative party, tea party, wants deeper cuts. >> the bill's not perfect. i never said it was perfect. nobody in my caucus believes it's perfect. but what this bill reflects is a sincere honest effort to end this crisis in a bipartisan way, to send it to the senate where it can receive action. >> john boehner there. over in the senate, meanwhile, democrats say boehner's bill would have been dead on arrival anyway, and they're pushing a plan drawn up by senate majority leader harry reid. before the house republican leader threw in the towel on thursday night, reid had this to say. >> as soon as the house completes its vote tonight or this afternoon, the senate will move to take up that message that they sent to us. it will be defeated. they know that. the american people now should understand that clearly. >> having rejected boehner's bill, house republicans are due to meet in six hours' time to consider their options, nina. let's have a look at how this is affecting the markets, manisha. we're just a little over an hour into trading here in europe. a little over an hour. it is, yet again, another sea of red across these markets. et it's the fifth day of losses for many of these markets and the heaviest coming from the zurich smi line. moody's has placed aaa's possible bond for a downgrade. they say a weak growth opportunities for the country were behind this decision. now, spain's ibex fell on the backes of the news. it's currently trading down by more than 1%. that's the ibex 35 down 1.2% trading at 9543. coming back to the united king dorjs british sky broadcasting or bskyb has reported earnings of $2.28 billion, beating expectations. it it also announced it will be buying back shares and into v-- investors with were pleased with this. let's check out the markets in asia. they closed out the week with the same story we've been telling almost every day. down, down, down again. ramy inocencio has the forecast. >> they fell about seven-tenth of a percent. on top of washington's deadline, earnings report from the electronics sector did not help very much. share prices from nintendo and sony both fell after they unexpectedly slashed their forecast. that's because gaming devices as well as demands for tvs has been pretty week. in hong kong the hang seng fell about the two-thirds percent. its share price jump fourth degree%. over in the mainland the shanghai composite ended down about a quarter of a per senn. petrochina and xinhua both fell 1 and a half to two percent. they expect fuel price earnings to level off. and then down under to the asx 200. well, they ended almost 1% lower because of washington's impact. but mining stocks with big drags here. we have rio tinto. financials fell. >> you know, ramy, we've been so preoccupied by what's happened in washington that sometimes it's easy to lose sight of the fact we are in the midst of earnings seasons. we've had reports across the region. >> nintendo, they slashed their full year's forecast earnings by a whopping 82%. that's because gamers aren't so interested in their handheld 3-d game players which came out five months ago. that would be the 3-ds. that's the biggest fall in the past two decades. you're looking at a year to date. nintendo share prices dropped a whopping 47%. it's a similar story, not so bad for sony. they cut its profit estimate for the year by about 25%. this was yesterday. that's because of weak demand for tvs like this bravia over in the u.s. and europe. sony's share price year to date has also dropped by about 35%. but, you know, it's not all doom and gloom. they say its net income surged to about $1.31 billion. this is for the six months to may. forecasters had been -- forecast had been for earnings for about $1.09 billion. so that was a bit of good news that led to the jump in share price. but in the aviation world, a bit of turbulence. this is for singapore airlineses. they missed its first quarter estimate. yesterday they reported an 82% fall in net income for april to june period. that's because of high fuel costs and flat demand that were responsible for that. >> ramy, thanks very much for that round-up. u.s. stocks ended down for a fifth session in a row on thursday, as well, of course, as the debt deadline continues to loom. al son kosik wraps it up on wall street. >> job claims and pending home sales boosted trade but ongoing worries over the debt, dow lost 52 points. the nasdaq gain 1 point. shares of exxon mobil. they post add second quarter profit or more than $10 billion but that was actually less than what analysts were expecting. it also increased spending on natural gas exploration by almost 60% as it gears up to meet future demand. strong aerngs trample pled expectation expectations. for the first time. green mountain is the dominant player in the sing f-serve coffee brewer market. it said sales of single cusp rose more than a half. green mountain shares have tripled in value since july and analysts say there's still room for more gains. >> coming up friday, the much anticipated first reading of second quarter gdp is due out. analysts expect that it grew at a very slow pace last quarter. many call for a growth estimate of less than 2%. that's a wrap for the day on wall street. i'm alison kosik in new york. coming up on "world business today," as the u.s. debt deadline gets a close-up, we'll bring you three fresh perspectives on a deadlock that's become a debacle. tinted s with scientifically proven soy complex and natural minerals. give you sheer coverage instantly, then go on to even skin tone in four weeks. aveeno tinted moisturizers. then go on to even skin tone in four weeks. any questions? no. you know... ♪ we're not magicians ♪ we can't read your mind ♪ ♪ read your mind ♪ we need your questions ♪ each and every kind ♪ every kind ♪ will this react with my other medicine? ♪ ♪ hey, what are all these tests even for? ♪ ♪ questions are the answer ♪ yeah ♪ oh hello and welcome back. from cnn london and hong kong, you're watching "world business today." of course, all eyes are on washington as they have been for days and weeks now. the fact is no one knows for she sure what will happen if the u.s. defaults. we spoke with three experts with their dpin ger on the pls. jim rogers, stephen roach, and d dick bove. first let's hear from jim rogers. speaking to me earlier on, he had some harsh words for the ratings agencies when i asked him whether the u.s. could lose its aaa credit rating. >> first of all, in the real world, it has moved. anybody who knows about economics knows that the u.s. is no longer a aaa credit. now, yes, moody's and standard & poor's didn't seem to know that but moody's and standard & poor said they were a aaa until they went bankrupt. >> the question is where should investors put their money? >> i think you'll make more money in other commodities like silver or rice or natural gas, some of the things that are down. certainly you've got to own real assets because all over the world central banks are printing money and whenever they print it. real assets are the way to protect yourself. >> okay. so jim rogers believes the u.s. has lost its aaa rating already. guess what? he's not alone. morgan stanley's stephen roach agreed. >> there's already been a downgrade. one of the ratings agencies, it's beside the point. i think most serious investors wlrks they happen to be sovereign governments from overseas or institutional investors don't look at u.s. treasury denominated paper with the same sense of security that they used to. they just don't truss washington to come up with a legitimate deal, even if there's a televised press conference where they all congratulate themselves in dodging the proverbial bullet. >> so if serious investors view the u.s. is already having suffered a downgrade, why haven't the markets tanked? well the banking analyst bove says people aren't taking it at all seriously. >> at the moment, everybody thinks this is just a big political gain and everybody thinks that by august 2nd, you know, some deal will be reached and everything thinks that we'll go on as we did before. and as a result of that, we're not seeing any major movement in treasury yields, we're not seeing any movement in corporate yields. and the stock market, i would say, is doing reasonably well. once it dawns on investors that there is a serious problem here and that it is not being resolved, i think it will be a shock to the markets. i thunk you will see interest rates rise meaningfully in the private sector. i think treasury rates will start to go up, and i think you will see a setback in the stock market which could be relatively significant. >> three very interesting opinions there on the situation. four and a half trillion, that's how much u.s. debt foreign nations hold, and they're watching congress with considerable consternation. we'll take a look at who holds that debt and see why one asian economist says it looks familiar. hello and welcome back. you're watching "world business today" live on cnn. it's not just the american investors worried about possible defaulting on its own obligations. more than 35 countries collectively hold more than $4.5 trillion worth of debt. china is the biggest hold efer of u.s. treasuries with almost $1.16 trillion worth. japan is second with more than $192 billion invested. other securities investors include the uk, brazil, and various oil exporting nations. finance officials in many of those countries aren't just worried. they're also angry. china released a strongly worded commentary saying, quote, the well being of many other countries are also in the impact zone here. but as international correspondent stan grant reports china is too heavily invested in the united states to be able to cut and run. >> reporter: china is flush with cash. it has the highest foreign currency reserves in the world. it needs to put that money somewhere. at the moment, a big bulk of that is invested in u.s. treasuries. so that raises concerns here about a potential debt default if the u.s. would wipe off the lot of china's investment. there are concerns that china may, in fact, pull out of its u.s. reserves. but you have to think again about that. speak to most analysts and i'll tell you one thing. beijing rule has realized it may not like it, but for now they're stuck with the u.s. >> they really can't sell too many treasuries without impacting the price of all the treasuries that they'd still be holding. they really -- there aren't that many other markets that are as deep or as liquid as treasuries. in fact, there are none. so when they accumulate reserves, this is really the only place they can put them. >> >> reporter: so despite fears of a default and the fierce china has, there's a harsh reality. china exports, if they want to keep the currency low, it has the a lot of cash in reserve and they have to put the money somewhere. it's tied in the united states. in the words of one analyst, china's policy, buy, hold, and grumble. stan grant, cnn, beijing. so just how angry are cry sneeze leaders at the united states right now? let's hear from once again from morgan stanley's agent stephen roach. >> they're pretty appalled at this drama that's played out in washington right now. i've had various senior officials in china, as recently as ten days ago, tell me they really think the recklessness of the united states government is irresponsible and bordering on wreaking great havoc in the broader global economy. >> stephen roach there. the japanese are worried as well. not only because they're the second biggest holders of u.s. debt. 15 years ago japanese politicians waged their own battle arguing fiercely over spending cuts and tax hikes. as one economist kyung lah, he's got an overwhelming sense of deja vu. >> reporter: a standoff, a political dubai that seems unwilling to close, history repeating itself. he has a pointed view about the current battle in washington from living through a similar debate in japan a decade ago. >> it's an exact replay of what we went through in japan 10 15rks years ago because i think u.s. got the same exact disease we caught ten, 15 years ago. >> reporter: march 1996, japanese politicians gridlocked in an ugly and devicist debate over government bailouts. opposition leaders had sit-ins. japan's economy was still recovering from its real estate assets bubble bursting just like the u.s. in the wake of the subprime cry sichls japan's private sector was minimizing debt, not maximizing profit because its balance sheeting were under water just like the u.s. today. japan's bunt deficit sky rocketed, and a year after the bailouts, the government turned to what they believed was the real economic problem, the deficit. do you see this as deja vu? >> shockingly so. playing with the default, this is basically a bluff, right? i think it's a really dangerous game to play. as an american citizen who lived through the japanese experience the last 20 years, this is really sad to see u.s. making exact same mistake that japan made in 1997. >> reporter: in 1997 japan's prime minister reduced government bore ohhing and raised sale taxes in an effort to cut the deficit. what followed? six quarters of negative growth and recession, a continued meltdown in the banking system, and japanese economy that today still remains in stagnation. calm heads and sound economic policy, whatever the u.s. decides, must rise above the rancor in washington warns koo or they could follow in japan's muddy economic footsteps. >> they're working hard to reduce the budget deficit but they're doing it at the worst moment in u.s. history. >> reporter: the big difference between the japan of the '90s and the u.s. of today is the impact on the rest of the planet. the u.s. is the world's largest economic power. so a default or overall economic slide spells bad news just for america but for the rest of the global economy. kyung lah, cnn, tokyo. now, if you want to comment on any of these stories on the show, getny touch with the whole of the wbt team on the facebook page go. to facebook.com/cnnwbt and let us know your thoughts. >> up next we'll get to the bottom of its origins and see who's to blame for america's blowout budget. that's negts. with your mortgage, worried about foreclosure. we can help you keep your house. all we ask for in return is that you submit to our plans for galactic domination. [laughing] [laughing hesitantly] [laughing evilly] sign. announcer: if you're facing foreclosure, talk to the right people. speak with hud-approved housing counselors free of charge at... ♪ sing polly wolly doodle all the day ♪ ♪ hah > from cnn london, i'm nina dos santos. >> and i'm manisha tank from cnn hong kong. a warm welcome back to "world business today." >> these are our top stories this hour. the clock is still ticking as the u.s. congress has yet to vote on raising the country's debt ceiling. republican house speaker couldn't muster enough votes from his own party to pass his plan. democrats on the o'hand who control the senate say they'll back their own plan. if a deal isn't done, the u.s. will pit its bore ohhing limit and will technically default on tuesday. moody's says that it's reviewing whether to downgrade spanish downgrade. right now spain has an aa rating. a formal inquiry into britain's phone-hacking is under investigation and there are shocking details. a woman now says her own phone was hacked. sara payne had written in the tabloid in the latest edition defending their reputation. let's get back to our main story. the u.s. debt deadlock. let's take a look at how much money the united states could have if congress doesn't raise that debt ceiling on august 2nd. the think tank at the bipartisan policy center was founded by some of washington's most influential. these include howard baker as well as this man. he's the former senate majority leader, tom daschle. he's a democrat. their research suggests the united states actually has enough revenue for the month of august to pay the interest on its debts and to stave off a default. but here comes the key bit. the country would have to slash spending radically. let's crunch the numbers now. the united states is likely to get about 170 to $3.2 billion in federal tax revenues in the month of august. what it has to do is balance it against this amount. this is about $306.7 billion worth of as yet unauthorized spending. to get to those two figures, what you have to do is cut spending by no less than 44%. then if we move along and take a look at exactly where the cuts may come, this is what you see. as you can see, the united states will have to be spending about $29 billion on interest to make sure that it keeps that costed aaa rating. it will have to pay the interest on its bonds to form a default and next comes the next big check. we've got social security amounting to no less than $42.9 billion in total. next is medicare and medicaid. those are no less than 50 billion dollars. then troops andive service and veterans programs. those together make up about $5.9 billion. that in turn leaves you with $39 billion to divide between departments that normally get about $172 billion worth of funding and these include all sorts of important things such as defense contractor, tax refunders, foorksd education and as you can see it's a significant amount of money. it looks like monopoly money. you know, manisha, the stakes couldn't be higher. i try to answer this question. can the u.s. survive without a debt ceiling not by words of politicians but numbers torque let the numbers speak for themselves, manisha. >> yeah, they certainly do, don't they? nina, thank you. so how did the u.s. get to this point? there's more to the country's money problems than meets the eye. john vause explains. >> how is it they buy themsel