tv Real Money With Ali Velshi Al Jazeera January 28, 2014 3:30am-4:01am EST
for sale, at least for now. >> well, you can read more about senegal and see the report again on the website. aljazeera.com. there'll you'll find the top stories, the world news you need to know at aljazeera.com. >> right now your investments are taking a hit over fears of a crisis half a world away. i'll help you make sense of emerging markets and how they are connected to the american economy. and how you can bypass the bank and go to your employer for your loan. and meet the guy that looks at your broken iphone and sees dollar signs. i'm ali velshi, this is "real money."
>> this is "real money," you are the most important part of the show, join our conversation on twitter, facebook. fear, volatility and uncertainty are back. that is a key take away of the topsy-turvy trading in the u.s. stock market. that followed the worst week for stocks. take a look at how the do you jones sank and bounced back before finishing in the red. that is what i mean by volatility. when the roller-coaster ride was over the do youeneded down a quart -- dow ended down a quarter of one per cent. the tech-heavy nasdaq did the worst, losing more than 1%. this is not horrific. the last several day make one thing clear.
those of you that own stocks have to adjust to a new reality when the s&p rose. so far this year it's down 3.6%. we'll talk about the reasons for the market jitters in a moment, including worries about emerging markets. let's review a couple of terms that you are likely to read and hear about if the volatility conditions. let's start with market correction. that's when stocks fall 10% from the highs. we are not close to that now. we haven't had a genuine correction since october january "11. and some market professionals say we may be for some. that's when stocks fell 20%. the left time we had a bear market the federal reserve bailed out the economy. tomorrow, speaking about the fed it kicks off the last meeting of ben bernanke's term as chairman.
on wednesday, day two of the meeting we'll find out if the fed will continue what it started. gradually pulling back on stim u louse that kept interest rates low for years. most expect it will keep cutting back, letting interest rates rise, and that speculation is hurting currencies and stock markets in emerging markets. david shuster has the story. for the last several years, the u.s. federal reserve kept the interest rates low, cost of borrowing down and investors took the money, placing the bets on emerging markets. including investing in markets like turkey, and india. meanwhile, china has helped fuel the growth, by buying raw materials from the countries to manufacture goods that the world consumes. now that the fed is letting rates go higher and china reported a slow down in manufacturing for the first time
in six months, investors are nervous. >> china is important to many emerging markets, especially those that are commodity exporters. signals or indications that the growth is slowing more, and this manufacturing index that was released last week points in that direction, those kind of indicators of weaker chinese growth begin to get a lot of players in the market worried and upset not just about china but the ramifications for other emerging markets. >> investors in the last few days have been pulling their cash out of the marks. the transfer has been hurting the developing nations leading to a run on the currency. >> in the last month the turkish leiera fell 16% against the u.s. dollar. brazil's rial fell by 8
itself. it hakes it harder for the countries to service it debt. it reduces purchasing power of people who live there. as a result u.s. companies will sell fewer goods to these countries, meaning smaller earnings for u.s. companies. that together with letting the interest rates rise higher left many scrambling. >> monetary continues are tightening, hurting the emerging world, in particular the prospect for higher interest rates means u.s. investments are looking for i tractive >> money is coming back into the u.s. away from the emergency world. it's coming back to safe havens, not to the stocks ofst
companies. so the dow dropped leaving many wondering if the strong bull market will cole to an end. >> geoff dennis says the big worry is that market tush u lens could weigh on the global economy. he joins us from boston. i guess that addresses why my viewers should care about what is going on in emerging mark and why this is having an effect on the stock market. draw the line. why is this happening in emerging markets. why do we care? >> i don't think the biggest risk is that this will affect the u.s. economy. the view is that the tush u lens that we have seen will not prevent the u.s. and the european economies improving the the tact that the markets are going down creates a certain
amount of rickses because markets do not like the volatility that we have seen, and there is the possibility that down the road you could see wealth effects on consumers not just in the u.s., but around the world. companies don't like to see the volatility. it may affect a desire to invest. so far it's not enough to affect the economy. >> you look at a lot of these countries that are suffering. when you look at the s&p 500, reflecting the investments of many of my viewers. much of their profitability comes from things that are sold to people in other ports of the world. it could affect your bottom line as an american investor if people in argentina, and the ukraine are not doing well. >> certainly this began with a concern. in my view anyway, with a concern over the so-called flash
index that came out of china on thursday, which got everyone going about concerns that the economy would go there. if the chinese economy were to slow, it would be a negative for developed economies and emerging markets. we think that that is unlikely and suspect the pmi number is probably a one how far, not signalling are slow down. that's what the markets are worrying about, when it came throe it encouraged the markets to look at the countries with week fundamentals. i don't think the news in argentine e, turkey or ukraine is new. it took the chinese data to focus attention. >> in all the examples there are specific things about the economies. it's not a generalised matter. let me ask you this, what should
my viewer, investor, who enjoyed 30% gains across the board do in this environment. >> we are certainly telling investors that the u.s. market will go up over the course of 2014. it's just that i think having seen a 30% rally last year, that maybe we were due some sort of pause. i think that what investors have to do is wait it out, see if we do down in the near term. to be honest. with the u.s. economy to do well and the feds providing liquidity, obviously they are tapering and will continue to taper, we would expect investors to look for a bargain opportunity, possibility before too long. i think as far as emerging mark are concerned, which is what we focus on day by day, the issue is what point do you look at the
economies like turkey and brazil. does it warrant investors getting back into the mark. it may be prem fewer for that to be the case. the logical thing is the u.s. and european markets will probably bottom out. as long as the market is on track it will provide a better 2014. >> thank you for making this simple. geoff dennis head of global merging market exit strategy. >> more and more americans looking for quick cash can look somewhere they didn't dream of looking - the human resources department. >> they didn't make me feel like i was a poor person. i didn't feel that way at tall. this meant a lot. >> we look at workplace loans and whether they are a burden.
farmers and cuts food stamps by $800 million a year or 1%. a full house could vote on wednesday. economists have been warning about the rise of automation in the workplace, that machine eens would replace human labour. >> there are concerns about automakes at the world economic forum. martin is the author of "light in the tunnel", automation, dislrting technology and economy of the future. >> thank you for being with us. >> thank you. >> you argued that the middle class lost a lot of jobs to automakes. you think it will go higher up the mooth chain. >> we have a polarized job mark.
a lot of those have been automated. we have been left with a lot of jobs at the bottom. going forward, i think technology will hit at both of those, that missing hollowed out middle will get larger and larger. we see examples of that already. ibm's watson, the computer on jeopardy is an example of the tech knollingly that will move into the higher level jobs and at the same time advancing rob attics and self-service technologies mitting at the lower wage jobs. it will be more of a problem going forward. we had a ceo of robotics saying robotics were killing jobs, but labour costs meant ramped up production lines and demand for workers in the other parts of the business. is that feesable. >> that's true in some areas. in manufacturing some
manufacturing coming back to the united states, because robots are making a lower cost. it does not mean there'll be many jobs there. as robots eliminate jobs, companies don't need to higher people in other areas. across the board i think that the impact in the longer term will be that we are not going to have enough jobs to go around. >> this is a tricky conversation. most think the organization is good, lowering price, and automation is the way things go. what is the solution to wanting more technology and not killing off mainstream middle class and higher earning jobs. >> well, that's the basic paradox. automation has been a good thing. it's what has made us prosperous. up until this point, technology has increased the productivity of workers, making workers valuable. now we are reaching at on infor
example point. a great many people find that their labour is less valuable than more fall available. we need to replace policies. some of those will be radical. >> we look forward to talk about that. we need another discussion. >> martin ford is the author of "the lights in the tunnel", the economy of the future. >> chances are you heard of pay day loans, short term, high interest rate loans with rates and fees. they are hard to pay back on time. they are illegal in 20 states that consider them predatory. now there's a new kid on the block in the short-term lending place. >> work place loans. they are offered by employers. >> they are built as an employer. repayment is deducted from your pay check.
as stacy tisdale reports, as with most loans, let the borrower beware. >> last moment melissa jones a single mother of three boys moved from kentucky to tennessee to accept a job as an account manager at patient focus. >> the move hit me financially at the wrong time of the year. so there wasn't a lot of time to save in preparation for christmas. >> after starting her new position melissa learnt her new employer offered work-place loans. >> i borrowed $700, and it took me six months to pay them back. they took it out of my payroll every two weeks. >> hundreds of large and shall employers are offing workplace loans. the company's contract with half-a-dozen lenders who provide the programs. they are covered to about 100,000 workers. industry watchers say it could grow to 10 million.
david frederick son. the ceo and melissa's boss allow the employees to focus. >> nice to come to work and not worry about getting the car fixed or making a doctor's payment. >> work place loans are a creative funding option. 30% of u.s. households go outside the banking system for loans. >> individuals who are in the income ranges of $50,000 annual income for above. >> here is how it works. you fill out an application online, share how long you work, your salary and information about your credit history. the lender verifies your employment and checks your credit history. >> loan sizes pay from $150 to $10,000. most, like melissa are in the $700 range. repayment terms are before four and 36 months. once the size and rate of the
loan is determined, you get the money. repayment is set up with the human resource department and is deducted from your pay check. some report repayment history to credit bureaus. >> all of the loans are credit building loans, meaning we report the positive repayment history to credit bureaus, to help people repair. >> buyer be ware. when you add up the fees work place loans carry a percentage rate between 36 and 165%. well, that's half the cost of the pay day loans borrowers can still get into financial trouble. any time you carry 100% interest rate, it's quickly becoming a burden that people can't carry. something that you can't get out of. >> the credit repair that attracts borrowers could bes reversed. >> if that makes you less able
to pay credit card bill or a car loan payment, those are going to be dell ink wednesdayies that are reported to the credit bureau. >> important to people like melissa is the loan provided short term releech. >> they didn't make me feel like a poor person that needed to borrowo money. that meant a lot to me. >> today on twitter and facebook i have asked you sips companies are offering short-term loans, would you borrow cash from your employer. denise tweets: >> tell me what you think by tweeting me. all right, coming up next -
>> apple sold a tonne of iphones in the final three months of 2013, but not enough to satisfy wall street. they sold 51 million, but analysts expected sales of 55 million, because apple launched more than one mod ill of its signature smartphone. the 5 s and the 5 c. an updated version of the ipad launched. sales topped expectations. the forecast sales was disappointing, $2 billion below expectations. apple shares are down 7%. apple junkies spend a lot of money keeping up with the latest iproducts, but one thing apple was concerned about was making money. >> i-crack started with two dudes fixing products in the
dorm room a few years ago. now there's 429 itechs who will fix your phone or tab the hours after it's broken. it was named a promising company. anthony martin is a cofounder andins us from california. good to see you. thank you for being with us. >> thank you for having me. >> i very seen these. none are as successful or as big as yours. how did it start? >> we were in college, we realised it was a hot bed for iphone mishaps. we expanded. we were young, at 420 locations, it's all an ondemand experience, we provide experiences for our
customers and want to make it that way forever. repair is only the beginning. tell me how this works. i shattered my screen on my phone. >> we put in basic information. we'll reach out for you. we management at home, work and the office provide a 99 year warranty. for all of you that have this device have an upgrade. we'll request itech to buy the device from you. we ping that against, to check if it's lost or stolen against universal databases and can pay quickly.
>> you sell this thing, it was allowing people to fix their phones on their own. we have do it yourself kits and you can fix it within an hour of receiving the kit. coming with the tools, the parts and training for you to do it successfully. you guys got funding or developed out an incubator. in winter of 2012, we participated in an incubator. we had, i believe, 64 companies with us in this incubator program. the most incredible social experience to only have one social excuse to build your company. it's a huge kata fault for us. we networked with a bunch of silicon valley's brightest and helped us to move into the life-cycle company. >> what makes your business do better or worse. when apple comes out with a new phone, does it hurt or help you.
>> we believe it helps us. apple had 51 million smartphones purchased. we know that 34 of those will break within the first 12 months of ownership. it's a huge market. apple has a huge eco system and we want to make sure the devices work in the way they are meant to operate. they have tremendous upside. we look forward to the future. key strategy officer. don't forget the question. some companies are offering short-term loans. would you borrow cash from your employer? tweet me. follow us or leave a comment on facebook. log on to the website to see more stories aljazeera.com/realmoney.
>> state of union is on tomorrow. the president is dealing with a relatively uncooperative congress, in a country where the rich are getting richer and poor are poor. the middle class is fighting to maintain it. i'll bring you my version of the state of union as it relates to your prosperity. i'll tell you where we have come and where we are going with the housing equality. i'll give you the details on the things i hope president obama and congress will deal with, and with an eye towards your prosperity, because it's my view that the more you know about the economy, the better you can make financial decisions. i don't know if you watch the state of union address. americans are so jaded by politics and washington's inability to achieve basic goals that i understand in you justize disengage figuring washington doesn't have much of an impact.
unfortunately washington does matter particularly if it decides to rally behinds things that matter dealing with have and have not society. the coverage starts at 7:00 pm eastern. i hope you join us. that's our show for today. thanks for joining us. >> welcome to al jazeera america. i'm thomas drayton. >> president obama will address the nation on tuesday in his fifth state of union.
income and the economy will be the top the agenda. approval ratings are low going into a state of union address. coverage begins 6:00 pm eastern on al jazeera. >> the city of pittsburg is dealing with a spike in overdozes, two dozen people have decide from heroin dosed with morphine. >> spy agencies in the u.s. and u.k. can collect data from cell phone apps. according to documents from edward snowden. the leaked document reportedly shows intelligence agents taking information from gains in social networking apps. >> during an interview with the bbc sochi's major said there are no gay people. the social network pointed several gay and transgender networks. >> the arctic weather slamming
the mid west to the south. more than 100 million people reeling from the deep freeze. america tonight with antonio mora is next. you can get the latest news on aljazeera.com. highlighted her story to galvanize america, hadiya pendleton. >> whether he is backed or not is a different story. >> and true moral courage to stand against your own. the rebel rabbi tells us why he must speak out.