tv Boom Bust RT August 20, 2019 11:30pm-11:59pm EDT
this is boom boss broadcasting around the globe and covering the world of business and finance an impact on daybreak on washington here's a look at what's on deck today tears continue in the trade relationship between the u.s. and china will in no small part because of protests that continue to shake hong kong archies surmounts this deal goes on the ground bringing us the latest from the autonomous territories and speaking of those fears leaders of both nations are trading blows with each side bringing their demands to the table. of the institute for china american studies on him to sift through the stakes for trade and finally there is good news for the bank says the f.b.i. has adjusted the volcker rule but more importantly what does this mean for consumers for when they were a public citizen when the hand of break down what the rule change means especially in the wake of global rate cuts and finally resolve over to the e.u. where the latest crisis is unfolding in italy as the nation's prime minister has announced his resignation argues alex mahela bichon joins us to give us
a look at inside what could be unfolding in the euro zone you've got a poncho today so let's go and dive right in. the ongoing protest movement in hong kong on the prospect of intervention by the central government legal route report today as hong kong's chief executive says she can see a way out of the crisis which now seems headed for a collision with the trade in terror a fight with the united states 1st we go to hong kong for the latest with our 2 star who filed this report. weekend's mostly peaceful protests demonstrators are saying that they're not giving up on their 5 demand they fear their autonomy is shrinking earlier today hong kong's chief executive kerri lam spoke to the public about setting up a platform for dialogue with various sectors of society we will start immediately a platform for dialogue with people from all walks of life so this is something that we want to do. in
a very sincere and humble manner i am my principal for shows committed to listen school what the people have to to tell us and we want to reach up so the community as soon as possible when asked about the 5 demands lamb said the independent police complaints council will be conducting a fact finding study to be released in approximately 6 months their report will include police brutality and those who have filed complaints on the anti extradition bill although lamb again reiterated the bill is dead the crowd pushed on why the word withdraw has not been used meantime anti-government protesters are gearing up for another weekend of demonstrations we spoke to is now gone so why are we why is hong kong's to hold his term or despite the government and protesters role the media has also played a major part in the movement at the forefront since day one principal reporter from
the local stan news described his struggle as a journalist and i seem to be us to a free society. seems to have some 70 degree of freedom of press about the. planes getting. worse and suspecting it to get even worse because. according to some reports. chinese officials when they evaluate what happened from jordan to august. they've picked out one of the it's the played to control the media this all while twitter and facebook banned hundreds of social media accounts believed to be connected to china those targeting the ongoing hong kong protests on accusations of an alleged propaganda campaign took a. all the protests narrative if there's any common ground from both sides for half
is that they want to avoid a prolonged conflict and restart stability to their island reporting in hong kong farah montecito r.t. . meanwhile chinese state media is warning the united states not to connect the hong kong protests to the ongoing trade negotiations between the 2 nations and an editorial published by the state run people's daily on monday the publication said the 2 situations should not be linked characterizing the hong kong protests as an internal matter writing quote making a fuss about hong kong will not be helpful to economic and trade negotiations between china and the u.s. they would be naive in thinking china would make concessions if they played the hong kong card another editorial published in the global times which is run by the people's daily shared a similar sentiment saying the u.s. should stop its meaningless threat of linking the chinese us trade talks with the hong kong problem beijing did not expect to quickly reach
a trade deal with washington more chinese people are prepared that china and the u.s. may not reach a deal for a long time. and despite the calls to not relate the protests in hong kong to the trade talks president on trump waded into that exact territory at an airport in morristown new jersey on his way back to the white house. i think would be very hard to deal if they do. violence i mean if it's another the tiananmen square it's i think it's a very hard thing to do if there's violence. during an address to the detroit economic club u.s. vice president mike pence also urged beijing to resolve differences with protesters that it would be harder to make a complete trade deal if there is violence in hong kong. but for the this is something to do. with the image of the. being
a fool to respect the integrity of hong kong's laws to decide over a show. this is yesterday it will be much harder for us to make a deal. something violent happens in hong kong. there is certainly a lot to unpack here and to do just that we are fortunate to be joined by surat gupta a senior asia pacific international policy specialist at the institute for china american studies. thanks for coming back and 1st of all the u.s. and china seem to be making parallel or mirroring statements here and while the chinese government may have been trying to push the hong kong issue away from the table where they're negotiating with mr trump it seems like they've still effectively by invoking them created a connection between the issues and mr trump just waited right into and created a bit of a red line here are these 2 tracks of the trade negotiations and the hong kong
protests already effectively intitled entangled and isn't a chinese intervention and therefore u.s. pullback from trade talks becoming increasingly likely the longer the protests continue. yes they are partly in tangled and they will have their will become even more entanglement if china makes sticks of violent action in hong kong i would submit that the chances of the chinese entering and taking a while into action to to quell the protests is very very low and therefore the protests the trade talks will stand or fall on their separate merits and not so much because of hong kong and frankly i believe i would say that the sale of the f. 16 stood taiwan is a big a factor in determining china's responses and its growing lack of trust in the united states than the situation in hong kong frankly that's
a very interesting insightful comparison and that's very helpful and looking at how this could play out executive kerry lamb said on tuesday that she could see a way out her words from the impasse what's being discussed what she proposing and how likely is this trial balloon to fly and produce a real resolution here. this trial balloon act. really could prove could create the basis of our evolution it is a starting point what i will say about the hong kong protests is it's been going on for a long time but there's no guarantee that it will continue for just as long the protesters effectively exercise during night time during the week and on weekends throughout the week and come september a lot of the students are going to be going back to school there's talk of a boycott of school on monday as a cetera et cetera but so long as there is no violence i think the hong kong government has begun to bend in terms of being open to a to
a judge led police inquiry inquiry of police actions there's again repetition of the extradition bill being dead and i presume the the word withdrawal is being held back once once the negotiations actually begin but what i would think she's trying to do is begin an ongoing dialogue with broader civil society including the protesters once a while and seems to get tamped down we'll have to see if that comes about to not and even before this latest round of tough talk between us and china we saw some other economic consequences of the protests in the resignation of the c.e.o. of cathay pacific airways now a legislator who sided with the protest movement has also resigned from a position with cathy why did he quit and are we going to see more similar scenarios i can say and perhaps at other companies as a protest go on. cats it has been a very interesting example out here simply because it is so heavily linked with
with hong kong it's one kong's main main carrier i was in hong kong last week and the and hong kong international airport is filled with cathay but cathay pacific aircraft the legislator resigned he had been an expired lit with cathay i think he was he felt he was bringing negative publisher. the to cap in making things harder for them but also as we've known beijing as applied some strange untruth out here including denying any captive pilot caught up in the protests from not just one cafe but flying over chinese airspace and so i think beijing has really targeted on the place a finger on cafe hong kong government have to have followed that line and i would submit that kathy is a very specific in for the company and that this is not necessarily the case that will be more widespread i believe there was a full page advertisement recently by by by forbes who worked at some of the big
accounting firms what they did it in their names and not under the name of anthony young et cetera et cetera and the companies have been has. have chosen to not not to be at associated with that advertisement so i think companies will be in there there's a lot of money frankly to be made in hong kong and companies are just going to be a little cautious on this front and rather than get ahead and support the protest that expert insight is always from sharab gupta of the institute for china american stories thanks for joining us. you're most welcome. and even with a 90 day reprieve in the contentious fight between the united states and china and states and while way of china the chinese telecoms founder said in a monday memo that this is a live or die moment for his company in the internal memo wrenching fate called on his team to work more aggressively to meet sales goals and said the company will go into quote battle mode to stay relevant in these trying times adding the company is
facing a live or die moment if you cannot do the job then make way for our tank to roll and if you want to come on of the battlefield you can tie a rope around the tanks a political long everyone needs this sort of determination mr wrenn rand went on to promise the firm will remain steadfast during this crisis and he ultimately expects survival for weiwei. meanwhile the world's lot 4th largest smartphone suppliers shalmi reported an 87 percent drop in net profit for the 2nd quarter 2019 the beijing based tech companies net profit fell to 2000000000 yuan in quarter 2 down from 14600000000 for the same period last year revenue grew by 15 percent in the same period to up to 51900000000 yuan up from 45.2 in the 2nd quarter of $28.00 team the revenue increase was fuelled by an increase in the price of the company's phones on the news the company's stock saw
a 3 percent increase in trading on the hong kong stock exchange. time now for a quick break but stay tuned because when we return there is big news for the banks as the f.d.i.c has adjusted the much discussed bogle rule but more importantly what does this mean for consumers bartlet neighbor a public citizen lent a hand to break down what the rule change means especially in the wake of all those rate cuts and finally over to you where the latest crisis is unfolding in italy as the nation's prime minister has announced his resignation argues alison hill that's trying to show to give us a look. commune folding in the euro zone. as we go to break here are the market numbers up to close.
to. the. same wrong lol just don't hold. me. to shape out this day become educated and engaged equals betrayal. when so many find themselves worlds apart. she still looks for common ground. interest rates spike gapping the spread is widening into what i call the interest rate apartheid if you're in the wrong side of the friends of jeffrey epstein you end up in a bantustan of extortion ery credit card rates if you're a friend of jeffrey abstain then you get the insider rate of negative and you get
paid to lend money or to borrow money from from the bank. in this community there are people who believe that it's ok. it's really hard there are no jobs and you see that i've got kids and ask and as a parent. i can come up with arguments and there's a lot of conflict within the game and between the teams most of the conflicts i would say are overblown. and most of them. close one of the children's children is good because the state of california makes 6000000000 dollars you have to prison complexes to get some point in your life where. you don't care anymore nobody cares about you so you don't care mind anything.
welcome back the spotlight of scrutiny on big tech companies in the united states is about to become brighter as attorneys general from as many as 20 states are reported to be preparing a massive antitrust investigation the new york times and wall street journal both reported on the investigation planning with the journal citing sources that say forming processes could start as early as next month amazon apple facebook and google all face obvious and serious risks from an investigation into anti-competitive behavior given their increasingly integrated roles in many sectors of commerce creating many niches for market power to be exploited and for investigators to scrutinize over a very long term big will now have to deal with state level scrutiny added to a broad investigation by both the justice department into antitrust issues in tech
and an antitrust probe into facebook by the federal trade commission. and staying on the regulation and enforcement beat a much discussed financial post financial crisis form the so called so so called vocal rule is set for a significant change at the federal deposit insurance corporation or f.d.i.c gave the green light to a proposal involving 5 agencies with relevant responsibilities here now to sort it all out for us is bartlett naylor financial policy advocate at public citizen now bartlett 1st of all let's remind ourselves what was the volcker rule why was it so important that it be passed post-crisis and what was the role of that rule in solving this problem of proprietary trading that we hear about the 2008 financial crisis took place for a number of reasons but one of them was that large financial institutions made some pretty disastrous bets bear stearns went bust because some of the positions on its trading book were found to be far less valuable than bear stearns had represented to the public did a layman. others even after the financial crash j.p.
morgan self professed best managed bank in the world lost something like $6000000000.00 when a couple of guys made a bad bet so the financial crisis crash and banking stability generally can be jeopardized when proprietary trading that's the speculation that takes place goes awry section $619.00 of the 2010 dodd frank law known as the volcker rule after the former federal reserve chairman basically says don't trade with the positives money it has a bunch of exceptions those exceptions are the problem what happened today and will happen is that the regulators are relaxing those guardrails on proprietary trading right and so the specifics of what they voted on today center on the definition of proprietary trading essentially expanded that can you go into the details of exactly what the term now will be construed to mean they took what they took away
from a proposal last year was the so-called fair value accounting prog fair value means that if you have a whole bunch of assets and accounting rules require you to mark them as if they are traded today we're going to consider them subject to the volcker rule restrictions and they took that away what does that mean numerically director mardi gras enumerated that about half of the speculation assets or half of the assets f.d.i.c insured banks more than 600000000000 dollars will no longer be subject to the volcker rule they basically will be able to be traded at will with no cops watching whether or not that's that's a problem and could blow holes through the bank's capital base right and that member the vote was $3.00 to $1.00 at the f.t.c. in the dissenting vote see board member and former chair of martin gruen berg said
. that under the rule approved today on tuesday he said the vocal rule will no longer impose a meaningful constraint on speculative and proprietary trading by banks and bank holding companies benefiting from a public safety net that sounds pretty serious what's the worst case scenario of what could happen after this change what's worst case scenarios that can blow through their capital and again capital is simply assets minus liabilities and the banking sector is only about 6 that that difference it's only about 6 percent so when you allow the likes of j.p. morgan taking morgan has $1.00 trillion dollars in deposits $800000000000.00 of that goes back out in the form of loans but the other $600000000000.00 is being traded if only a small amount of that is lost and you lose money and speculation far faster than you lose it and alone then we could have serious problems on our on our hands we can blow through that very thin level of capital at the likes of j.p.
morgan right and it's striking that we're talking about this relaxation of this guardrail as you say at a time when recession fears are increasing so following the logic through what could happen if when this intersects with perhaps the coming recession the single biggest problem with big banks right now is that they are making too many leverage loans that means loans to company that are already in indebted when the economy falters those are going to be the 1st companies to default what a bank will do trying to maintain margins is double down arguably on its prop trading to make up where they're making losses in its loan portfolio so it can hasten the insolvency of a big bank very interesting times of living through get good to be guided by par bartlet naylor a public citizen thanks for your time thank you. a
split in italy's populist ruling coalition has prompted the country's prime minister to step down giuseppe conti who held the position for just over a year is blaming his right wing interior minister matteo salvini for the political crisis which could potentially weaken italy's economy and status in the european union with more we're joined by our cheese alex mahila bit in toronto al it's good to have you back italy's now former prime minister conti is saying demands for a fresh election from within his coalition are both selfish and irresponsible what do we know about this latest squabbling within this fractious coalition. well as you mentioned he's blaming everything on the table sylvie who is an interior minister and also the leader of the league party now think back to lead party used to be a separatist party and for the for northern italy to separate from the south and then they became all loving italian party but they are far right and they've joined forces with contacts party 5 star which is also seen there both seen as populist
and euro skeptic now there are differences though obviously which of fracture these 2 parties immigration being one of the big things the league is anti immigration kaante is not that kind of man he hasn't signed off on keeping immigrants off the beaches and salvini was ticked off by this as well as many other things like condi is done he has basically said the contract hasn't done enough for italy what condi is saying those of you just taken advantage of a situation here there's a rift in the party the league is polling high this guy is all about himself and his party it's not about italy well salvini will say it's all about italy i am the guy who's the nationalist and i'm fighting for my country so this is what's happening here and this is why this coalition is split and our continent has resigned and as you mention immigration has been an area tend to within the coalition also economic issues have caused the leaders to butt heads so what does this sort of stalemate now mean for italy's already fragile economy. makes things
worse obviously we're talking about it unstable governments a government that is cracking at the seams which means that both the financial institutions of that country as well as government into the institutions are weakened at this point which is obviously not good for the economy now we're a lot of people are looking at this as a chance for an another election to be pushed that's what everybody thinks salvini wants but that's not a certainty we have a prime minister we have a president the president of italy can stop that from happening he can actually form a coalition with the democratic party that would be moving more center left and leave so totally out of the equation so. as it stands right now obviously this isn't looking good internally in italy it's a ready a country that has a debt even though it is one of the 8 largest economies in the world and when something like this goes down well it just makes the country look on stable to investors right and speaking of the view from the outside the e.u.
is also very concerned about this obviously when you have a prospect the trivial prospect of a collapse in a euro zone economy the e.u. takes a big interest what's their view of this and others in other stakeholders on the continent. but obviously the e.u. and other investors in italy are worried about this as i mentioned you know that you have a massive public debt here and that's very worrisome and on aside from that when you have a unstable government like we're seeing right now that signals a lot of bad things but you know what when it comes to bondholders there is a bit of an upside here here let's look at this chart it gives you an idea what's actually going on when it comes to money being invested in the country don't know what's interesting here is that you definitely see a dip when this crack happened a few weeks ago when you things were looking at red alert here that this is this coalition is going to fall apart but now just with the word put out just a simple word that there might be no reelection there actually is are no new election i should say that they might be avoided and that the country could build
a new coalition as weak as that would be because just imagine the democratic party with 5 star these are 2 very different parties it would be a weak coalition and but it's still there is the chance of avoiding another election what bondholders are as well as the e.u. are worried about is a cell vini government which would go far right and obviously salvini has been talking about just putting the country more in debt getting you know spending more money on italy which worries everybody especially europe which is so worried about that debt in the 1st place very interesting situation he's just back from mentally 10 rested ready and well informed court. spahn it alex my helmet thanks so much. thank you. that's it for this time you can catch boom bust on youtube dot com slash boom bust r t c n x time.
join me every thursday on the alex simon show and i'll be speaking to guest of the world of politics sports business i'm showbusiness i'll see you then. you know world of big partisan movies a lot and conspiracy it's time to wake up to dig deeper to hit the stories that mainstream media refuses to tell more than ever we need to be smarter we need to stop slamming the door on the bath and shouting past each other it's time for critical thinking it's time to fight for the middle for the truth the time is now for watching closely watching the hawks. cast calendar is darn alfonzo mongering has died there's change from page change
dard serve now or right. his 1st words were that allow us here a challenging post you've got 2 years to live. i have no doubt that what happened was scriven in. the sense concentrate machiavelli's $1000000000.00 industry these companies had a huge financial motivation to sow these problems there are numerous stocks showing that. doctors were keen to chest x. ray concentrates for insights of its own that patients want gives them doctors the raunch to quite go through from the start why they would give me some security procedures. and prepares to die i don't know which question michel but aren't being
allowed to live where so many have. italy's prime minister resigned soon accuses interior minister met teo salvini of pushing the country into a political crisis. the u.s. military announces plans for new intermediate range hypersonic misato pulling out of the i.n.f. treaty with russia and test launching a new chris a cruise missile. and u.s. attorney general william barton renewed the acting director of prisons after the suicide of geoffrey abstain. plants it from me andrew cuomo will be here next hour with all of your world news headlines stay with us for the financial news and the kinds of reports next.