tv Boom Bust RT August 17, 2019 8:30am-9:00am EDT
all that and more with from the asia and the u.s. perspective that gives us continuing coverage in china with an exclusive interview with the vice president strategy at all way. plus we discuss the implications for britain's economy of course johnson also rumored early august brags that we have a packed show today so let's go and. after a violent week where we saw losses worldwide following the 210 year old inversion we're now seeing a sharp rebound as equities recover this is part of the market capitulation we spoke about on wednesday where the vix fear gauge on the one to 4 month futures had inverted indicating that we were too far extended so now u.s. equities are quickly rebounding european and asian stocks are also posted modest gains on friday while treasuries paired some of their advances expectations for further stimulus by the central banks are now growing and the markets got a lift today when the e.c.b. all the red came out calling for an impactful and significant stimulus package in the next september meeting this was the 1st point that we made that the markets
ever since $1071.00 have always rallied following the fed rate cuts for an average of 6 months markets now currently anticipate a cut from the e.c.b. as deposit rate of at least 10 bits and a resumption of bond buying meanwhile mexico also joined the global easing tide and became the latest country to surprise with a rate cut the 1st in 5 years canada whose yield curve inverted by the most in nearly 2 decades is likely to cut next the bank of japan also announce that it will step in with further cuts and bond purchases in order to keep yields from sliding thailand also plans to step up with a $10000000000.00 economic boost in order to hit their 3 percent growth and counter an economic slowdown so while markets are now enjoying a temporary reprieve getting a lift from government stimulus worldwide this is borrowed time a rate cut will not save us from recession but it can buy us time like a temporary steroids shot for the market as to. radar is now price and
a floor of negative indicators are still flashing warnings of a hard landing that should not be ignored. us home building fell for a 3rd straight month in july housing starts point 4 percent to a seasonally adjusted rate of $1190000.00 units last month this is especially bad considering that we are hitting at sitting at super low mortgage rates right now john deere a bellwether for the agriculture and farming industry missed earnings and lowered guidance on friday due to the high degree of uncertainty around the u.s. trade war with china equipment sales at the manufacturer declined 3 percent compared with the same last quarter fell in many many machinery manufacturer caterpillar also mr earnings and revenue estimates last month and cited farmers' disappointment and postponement of major equipment purchases this data falls in line with previous reports of a slowdown in capacity as businesses tighten spending as trade war head winds intensify retail sales in the u.s.
were decent for the month of july as it increased by point 7 percent in july versus estimates of point 3 percent the steady pace of consumer spending is somewhat reassuring is a hell of a healthy labor market and no one employment rate however keep in mind that these tend to be lagging indicators recessions have always followed after an all time low unemployment rate. then here now to orient us in a seemingly disoriented global economic scenario is steve kean the credit of economics on an author of can we avoid another financial crisis steve welcome back fair number of commentators were talking up recession risk in the u.s. earlier this week especially since the final segment of the year yield curve inverted here in the united states and the end of a long shift there but then we she said. rising strength in u.s.
retail but again on the other hand we see this weakness in the u.s. housing market what's the real risk of a u.s. recession and which of these divergent indicators should we be paying the most attention to. well i found my general this is ready right and that is that the japanese are declining for eyes and that is that you and had to cross back in not did not even ready spot so much profit there. and the out of the mouth that it's been slowly de lay bridging the level of the $2.00. they found about one finds lasagnes america to exactly the same thing on the dotted 70 s. and it's being ignored by all of my instrument called and by this central banks so whenever these are central banks. on a me it's actually kush from the private sector the daily bridging and the calls of poland that matter suspects recession again so that's what i. that's that's my general framework and while the reserve has done of course in the last couple ready
of days but right stop believing they're going to time and i that meeting economy that's actually. companies less willing to borrow money credits imagine that's what's causing a downside and right now i think does the main end to this having said that i don't think there's much interest. at the moment instead of the way the old is being interpreted because the old code isn't billeted ali because the fed reserve was short and too much on the top and hasn't responded not that it's a lot of what has happened but it's not full credit for fools who will for wanting anything like 2007. so another big slowdown scare this week was actually germany after the official g.d.p. think i showed a contraction on point one percent in q tip so we may already be in a 2nd quarter of the contraction which would meet that textbook definition of a recession is the german recession already on its way and similarly what's the
most important metric to follow when trying to make that call. i think it is germany's having a recession and germany's christ didn't have a credit because german banks and german policies are actually discouraged brought in borrowing and they've survived mainly on huge strides. but that is a self-inflicted problem as germans are obsessed with running a balanced budget or even better that i think runs this is what monetary theory of the sauces is the government runs its course the private sector they have the same deficit and the as a private sector doesn't borrow money in sight. then what you have is actually decline and. so this is an ongoing lot of the germans they're trading that the entire economy like a household when a house all of them can spend less than a dollar and they will put my own side when a country tries to do it what actually happens is the attempt to trade the savings actually turns out completely out of line and so generally. having
a recession. and steve circling back to asia china also seems to be slowing down but from a higher gear sort of speak clearly not in recession but with growth rates still well above the us but when you back will made into such high recent growth rates a significant slowdown can still be very uncomfortable at the margins what would you say is china's status right now and where is it heading. now that sean is actually a we had a mixture of both the government stick to the sas luxury theory and opting out as much government money as necessary to run a leave the structure it's creating both in china and out soft on it with pro. it but at the same time they got through the 2000 and cross bar i credit demand to compensate western exports and you've had a pretty much a doubling of the did little sinchon a huge amount of speculation. about a lot of which is coming coming across now but what you've got is even the usual
government spending balancing the decline in profit spending with credit not necessarily slowing down but. a lot of those credit by sed projects going bankrupt . islamists it's very hard to answer for the fundamentally with ready the government spending and instead of spending its infrastructure in trying to continue growing very very vaults all my worry about china of course is. very levelheaded in alice is always from steve keen the crown funded professor of economics on petrie on check out that content very interesting and author of can we avoid another financial crisis thanks for joining us. on the next week with the last leg of the yield curve the 2 ten's now in markets got spooked and lost some of the worst sessions of 2019 let's see how they ended up in moscow the molex ended
down hitting a one month low where industrials and materials lead the decline as we see the 1st real signs of a recession on the horizon net capital outflows in the 1st 7 months increased by 1.6 times to $20000000000.00 as investors now seek safety over an asia the shanghai markets rallied up in a ball of how weak and they are 1.3 percent china's central bank now set the daily midpoint weaker than 7 per dollar for the 7th consecutive session markets seem to be bouncing back as the terror threat has been pushed back temporarily until at least december 15th giving exports a little boost over in japan the nikkei recovered from its midweek scare when the benchmark member. but it still ended up down 1.3 percent for the week as investors are now betting that the bank of japan will ease further and expand stimulus of a global slowdown as the economy recovery there quickly shifting to a more preemptive easing stance rather than waiting for any hard evidence
indicating a loss of the momentum down and the hang seng continued to fall closing down about one percent for the week as a rise continued for the 11th straight week disrupting multiple businesses and shutting down the airports now this resulted in a huge disruption of the day to day functioning of one of the world's most important financial centers it is now turning into a struggle of wills between the bears betting against hong kong equities and the mainland chinese investors who are now rapidly buying that dip and attempting to restore stability short selling volume on the climbed up to 17 percent this week in total turnover the highest since 1908 main then now remains the net buyers for the 21st straight day on friday over in india the sensex managed to eke out a very small game barely a percent positive market reaction to all the data released showing that retail inflation had eased to slightly in july however the upside right now is limited as the rupee is now the worst performing asian currency in august slipping 3.2 percent
since august 1st down australia suffered this worst week tumbling down 2.9 percent leading into the weekend the dailies on the chart looked nasty as were breaking all sorts of major support levels here the market actually lost a total of $60000000000.00 in value wiping out all of the gains that made over the past 2 months and finally the all shares in south africa they ended down as local sentiment still remain bearish treasury yields for the developed markets have continued to high with all eyes now on the inversion materials mining and resources also declines as forecasts are now being adjusted for a slowdown in the near future now let's head over to danielle for that years and then america. thanks kristie there is a big trend in this week's arrows in europe in the americas see if you can spot it starting in paris with the cac down for the week in response to that week's events significantly down on monday rallying mid week before another sharp drop on thursday then up by more than one percent on friday not enough to make up for those
earlier losses and in the week in the red the dax another red arrow no surprise there with the gloomy news this week on german g.d.p. growth contracting point one percent in quarter 2 footsie in the u.k. also down with a similar story with gains of 7 tenths of a percent on that index on friday not enough to offset the results from earlier in the week as breck's it drags on and we'll have more on that later in the show moving to the americas starting with the cold we get another red arrow on the board for the week despite a favorable report out last friday from bonn colombia predicting 3 point one percent growth for colombia in 2019 overall from 2.7 percent in the 1st half of the year another red arrow at the brazil and if you look at the 5 days across these markets and exchanges it's remarkable to see the pattern falling on monday rallying mid week before sharper drop on thursday muddling through friday and we see that pattern again here turning to north america and why you see the nasdaq and s. and p.
500 index all busy down for this dramatic week we see that same shape i mentioned in the charts for these exchanges almost to the minute tracking the market movement moving events of the week and finally answer ron so canada it's no surprise following the trend all red arrows as we can europe in the americas the ts acts like the dow had its worst day of the year this week on wednesday and that is your global stock market wrap for the week. time now for a quick break but hang havoc as miley attack iraqi families as they i guess that's continuing. with an exclusive interview with the vice president of strategy we just . the implications of boris johnson polls the room early august greg said and as we go to break here are the numbers at the close.
join me every 1st day on the alex simon short and i'll be speaking to guest of the world of politics small business i'm showbusiness i'll see that. paradise with some around turned into a round the experimentation field but agricultural chemicals we know that these chemicals have consequences they are major irritants there's no question otherwise
why would the chemical company workers themselves be geared up that suited up locals attempt to combat the on regulated experiments that often in day you have many of these people one foot into the biotech pharma and the other foot in the government regulatory bodies this kind of collusion is reprehensible while the battle goes on the chemicals continue to poison hawaii and its people so one has to ask the question whether there is a form of environmental research going on in hawaii whether these companies feel they can get away with this because the people have less political power. welcome back hong kong airline cathay pacific c.
rendered his designated tendered his resignation on friday the move comes amid tensions between the airline and beijing over the company's employees taking part in anti-government protests gripped hong kong for the last 2 and a half months airline's chief customer and commercial officer paul. lew who also serves under hog resigned from his post hog issued a statement about the situation saying quote these have been challenging weeks for the airlines and it is right that paul and i take responsibility as leaders of the company augustus tank and when who serves as c.e.o. of heiko an engineering company owned by the airlines parent company swire pacific was tasked to take the reins of cathay the company's stock price has suffered hitting 10 year lows this week trying to save us from regulatory issue to safety demands of cathay and required the airline to give full information of flight crew flying into the country's airspace. china while a technology has faced accusations of technicians helping the african governments
to spy on their political opponents this is just the latest in a series of concerns about the telecom giants aspirations to penetrate world markets r.t. america ceremony is our headquarters and sat down with one of the company's heads to discuss these allegations. tension between the united states and china have only gotten worse in recent months and. has been the forefront of a lot of these united states that the telecom giant close to the national security this is something while we have repeatedly denied our to america has been for a while we have ordered here in china diving deeper financing we sat down for an interview with vice president of strategy andrew williams and it's a private company owned by its employees as i say there's about 100000 shareholders and to me as someone that's come to this company i think it's extraordinary the
benefits of running an organization like that because people don't necessarily just pick up their paycheck at the end of the week of the end of the month they have a real vested interest in the commercial success and the quality of the products and services that the company produces and the latest allegations against wall way the wall street journal ripped. did while we technicians and at least 2 cases personally helped african governments spy on their political opponents unnamed senior surveillance officers said it was always employees received help from the offices in wally's headquarters uganda's top digital supplier while we were a few did the claim and said they'd never been engaged in such hacking activities we have neither the contracts nor the capabilities to do so you really have to check everything assume nothing. and trust almost nobody and that's that's a process in the system that we stick to and work with many of our partners around the world on that basis during our visit to always cybersecurity lab the telecom
giant highlighted security as a top priority and said they're the most transparent company in the world this despite facing growing international scrutiny we refute it quite vociferously. again it just feels like it's one of those stories that come up now and again go to completely and verify it it sounds like even though the companies that have been cited in terms of involvement have made it very clear they don't even have contracts in. one of the countries involved so it looks like the story is unfortunately really just fake news and we have to suffer with you know as i say periodically while we pledge its commitment to continue to provide the best technology and support for its customers all while continuing to fight the u.s. ban reporting in shenzhen china. are. turning to quiet politics and asia and oceania australia is not making any friends this week after an acrimonious regional meeting the australian delegation led by recently
reelected prime minister scott morrison reportedly demanded the removal of references to keep quiet protection goals such as phasing out coal limiting temperature increases to 1.5 degrees celsius and reaching the 0 greenhouse gas emissions by 2050 the foreign minister. the island nation of ghana want to so the talks were fierce at times and nearly broke down as other island nations facing existential threats from rising sea levels prost for urgent action the prime minister of tuvalu a newly sopel water told mr morrison in a joint press conference you were concerned about saving your economy in australia i am concerned about saving my people into vaal who later australian deputy prime minister michael mccormick aggravated the row mr maccormack scoffed at his neighbor's demands for a phase out of coal which he says would cost australian johns' while he said of those neighbors facing rising seas called they'll continue to survive because many of their workers come here and pick our fruit pick our fruit grown with hard
australian enterprise and over. and the ongoing reality show our soap opera we know as brags that had another interesting episode this week as a major character who's been trying to keep himself on the edge of the state finally made his big play here to give us the tea people say is hillary ford wedge a board member of the british american business association so hilary let's just get right to the main event of this week on bragg's that which was jeremy corvet who has been remarkably cautious and slow to make a clear move on bragg's that he finally made his big move and essentially called out the opposition members and conservatives opposed to no deal brags that he joined forces with labor to prevent that outcome so walk us through work or been proposed and where are we after his big play yes he called of course is the leader of the labor party the opposition party and what he wants to do at all costs is to
be in power so what he's trying to do is he's trying to sort of muster a coalition he says he's going to call a no confidence vote and he's aiming to yes he's aiming to rally those tory backbenchers many of whom were originally remain knows the liberal democrats and anybody else basically that will join him in trying to walk to the. directs it no breaks it deal that johnson is going to push through by october 31st and so he's we're basically looking to head a caretaker government and sort of a transitional government which would be a coalition of all those different factions and know what about those m.p.'s who have said no deal would be a grave threat to the u.s. the u.k. economy and perhaps even the stability the integrity of the u.k. as we know it with regard to northern ireland and scotland how safe or dangerous it is is it for them to pass on an opportunity to be seen as blocking a new deal briggs's over their discomfort with the caretaker even a caretaker government headed by germany corbin we saw the mayor of london so he
can try to force the question is essentially for the lib dems sort of pressure to work you're right he did try to force it i would say that the greatest existential threat is jeremy corbett because he would have a socialist government the markets would collapse he would be very anti-business and pro-union and that is at a time when actually we've seen you know the rate wages raise to the highest level they've been in many years for the british worker so i actually think he's more of an existential threat i think actually m.p.'s are going to be very reluctant to join him because boris johnson is such a force that of course what boris johnson has in his back pocket pocket is his relationship with donald trump on him and impending or potential trade deal so i think it's going to be raillery risky for anybody who backs jeremy corbyn so i think they're going to try and stand fast and not cave to that pressure now the other dramatic event of this week was this m.p. the chair of the foreign affairs committee in parliament a member of prime minister johnson's conservative party he suggested that the pm
could unilaterally pull out of the e.u. within 10 days so how did they react to this suggestion and what did this tell us about how we're doing here actually because the yes you're referring of course to tom took in hand he is the m.p. from canada mailing and this was sort of a twitter statement that he made and so actually what's the opposite of a twitter war to took to twitter proposition. me things that it's just he's floating that idea almost like sort of like a worst case scenario maybe it was to brace the markets i actually think it would be unlikely within 10 days only for mainly 2 reasons i think that that would would shock international markets number one businesses are ready but maybe not within 10 days and also a lot of british holidaymakers of course are in europe at this time so that would throw them into a little bit of a conundrum returning to that back to the u.k. with this happening when people weren't prepared passport and customs wise and hillary pulling back for a bigger picture you mentioned the news on wages this week the national to statistics office or this week the basic pay rose by 3.9 percent in the 2nd quarter
the fastest rate of growth on that point since june of 2008 point food in with the other elements in the larger picture well i think that is it's great news it's great news for the british worker and of course what it does is it proves the brics it was all about the work of rex it is about those that want jobs and want good wages in the u.k. not about global leaders not about those that were that are out of touch with the average worker across the u.k. and this actually fits very well with boris johnson strategy and i think it's great news for him and great news for anybody who's going forward with a no breaks it because it shows stability and an underlying on the line prosperity for the british worker. now looking forward here the story broke earlier today that the prime minister is going on a diplomatic blitz this coming week meeting with his counterparts in france and germany and ireland as well as the european council president oliver tusk ahead of an upcoming g. 7 meeting so we can kind of safely assume that brags there will be in the agenda but what do you think mr johnson's pitch will be when he sits down with these other decision makers is a totally right of course brics it will be on the agenda i'm sure and it did just
come at this news to just come out i think there are 2 factors here i think that both mccraw and markel are going to be completely different to talk to the jury so they ever had she did not have a microphone to talk to who has a 14 percent 27 percent approval rating and angela merkel uncle merkel is facing 14 percent of german products that were born in germany from from germany by the u.k. and now bought from the u.s. so both macro and merkel are weakened and i think that's going to bode very well for boris johnson that's another reason i think he's going on the splits he also needs to sort of bypass the e.u. and go directly to those leaders because those leaders are being pressured by businesses in their countries. so it was always hold for which board member of the british american business association those are joining us pleasure. and that's it for this time you can catch boom bust on direct t.v. channel $321.00 dish network channel $280.00 or streaming 247 on pluto to be there
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i. i'm not going to. look at. the trump administration urges congress to permanently real. suspended must serve feelin's program prompting and i'd cry from rights groups. also coming up for us issues a warrant to seize the remaining old. supreme court ordered its release earlier this week the vessel had been impounded by british royal marines in the mediterranean last month. on the family of a girl rejected from germany's most repeatable boys' choir sues for gender discrimination but a court in berlin rules otherwise sensei's it was.