tv [untitled] August 26, 2011 7:00pm-7:30pm EDT
it. will be a woman believe it. new numbers out today showing a gloomy growth rate for the american economy so are we back in a recession well if you ask ben bernanke you look at long term he says we're ok but is it really a rosy outlook like he thinks. you are twenty four people who introduced. him you'll see why are you going to need a floor. like nineteen eighty-four and still nothing generates as much excitement as apple products it seems but with steve jobs stepping down is it the end of an era. and the fog of war as cloudy information rolls in on both libya and syria on mainstream networks
a simple story there are to get serious from reports on the ground from both countries. getting it's friday august twenty sixth seven pm here in washington d.c. i'm lauren lyster you're watching r.t. so where is the economy headed and what are u.s. leaders doing about it well if you look at the numbers it looks like the economy's going down at least numbers out today show the u.s. economy is barely growing it grew just zero point two percent in the second quarter of two thousand and eleven this is down from what was first estimated and if you look at what that means for the year it means just one percent growth that's down from prior estimates of one point three percent so let's add this to a list of facts that have a condom as such as nouriel roubini saying we're headed into a recession some guests who come on this show economists think we're already in one now the growth numbers are the kind of news that would put pressure on the federal
reserve or the u.s. government to do more but lo and behold in ben bernanke he's highly anticipated speech today in jackson hole he did not announce more quantitative easing as analysts. looking for some of them at least here's what he did say in jackson hole he said that the federal reserve does have a range of tools that could be used to provide additional monetary stimulus he said will consider those and other pertinent issues including of course economic and financial developments at our meeting in september which has been scheduled for two days instead of one to allow a further discussion so two days instead of one it's kind of the first thing you've got to notice and also he put off any kind of a mention of quantitative easing until a later date but is this a bad thing or is this a good thing we'll look into that but more alarming perhaps are his positive economic assessments fresh after the bad growth numbers that i just announced take a look at what he thinks he said the growth fundamentals of the united states do not appear to have been permanently altered by the shock of the past four years
well that's shocking to some people he also said financial institutions have made progress toward normalization but this comes just as bank of america's stock is tanking they got a five billion dollar investment from warren buffett to try to assure people that b. of a is staying afloat is this a sign of what's to come with more banks than just that one dance or all of these questions i spoke with karl denninger of the market ticker and i started off our conversation by asking him if burning his decision to not announce more quantitative easing right now is a good or a bad thing for the u.s. economy here's what he said. a reason to didn't work objectively the only thing it did was live stock prices and now all of the increase that we got over the space of eight months came off in about three weeks so all we ended up with is a temporary sugar high in the stock market and higher gasoline prices while higher gas prices are bad from a consumer groups point of view not good so i don't see why the market would be
looking for him to do more of what hasn't worked or why he wouldn't engage in more of what hasn't worked it doesn't make any sense well who benefits from that because there are a lot of people that are saying that it's like needed and that when it does come it will be too little too late what the benefit of that there really isn't one and that's the problem is that you add things to the balance sheet you basically make the federal reserve balance sheet larger this supposedly puts more money into the system. that changes in monetary supply and credit supply has shown up but it's not producing the expected increase in economic activity because there's too much debt out there in the private sector and people are unable or unwilling to borrow you cannot boost the economy with easier lending when the problem is that people have too much debt so then is this bad out of bullets to do anything about the situation economy and then. they can gauge in what was called in the one hundred fifty to
sixty s. operation twist which would be an attempt to drive down the longer and of the bond curve another which makes borrowing for longer periods of time cheaper the problem was doing that is that banks exist and survive on what's called the interest rate margin or net interest margin him and that is essentially the spread between short term rates and long term rates so if you flatten that out you destroy bank profitability and right now the banks are capital challenged even though they all claim they're not as we saw with bank of america in this little game that they played with warren buffett this week and that's a question i want to ask about bank of america why you pointed out in your blog that they would have gotten if that had turned from warren buffett as they would have gotten from the fat so why wouldn't they just go to the fed for that money could they could borrow that money from the fed for a twenty fifth of what they're eating corn buffett why would you pay twenty five times more six percent as opposed to a quarter percent for money that you supposedly according to the management of bank
of america you don't need that doesn't make any sense and contrary to promoting confidence i think it sounds an awful lot like what happened in two thousand and eight when everybody ran around and said we're will capitalize we don't need money and then three weeks later they blew up well and at the same time just after that deal went through with buffett we see bank of america close to another major developing reported to sell half of its stake in china construction bank so it's bank of america as well capitalized why are they selling assets and getting investment from warren buffett i think in clapping i think the real problem with bank of america is with a geisha risk there are multiple lawsuits pending against them and others that people will file if any of them can see you know succeed nobody knows what the exposure is on that and i don't believe that anyone has an honest accounting of what those assets on their balance sheet are worth and that's ultimately the probably have in europe right now. with all the banks as well is that you have these claims of what these assets are worth and these claims that these banks are
well capitalized and everything is perfectly fine but there's no realistic independent way to take a look at that and evaluated and that's what's scaring the markets right now both here and abroad are you scared that more banks than bank of america are not capital i don't have enough cash and could tank. the real problem especially in europe is that you have a lot of institutions that have exposure to sovereign debt is trading at this point on their two year bond as if they've already defaulted and haven't paid but when you have a fifty percent effective interest rate that's not an interest rate anymore that's the market telling you that there's been a default and that's the recovery that you're going to get on that instrument so essentially the question becomes how much of this stuff is sitting on people's balance sheets and what is the loss and until we get honest answers to that question we're not going to know where these banks are how are we heard ben
bernanke you think about the financial system and institution have normalised you by that know the least of the we still have credit default swaps that are traded over the counter we don't know who is holding the risk we don't know whether or not any of this is being honestly reported i when the say anything's normalized if we had a normal financial market at this point in time short term interest rates would be four or five percent they would be positive against inflation plus economic growth and with inflation a two two and a half in economic growth around one that would mean that you'd have a short term rate of around four and then the curve would go up or from there as long as he holds rates at zero senior citizens and other prudent people are getting hosed their money that should be coming to them in the form of interest is going to bail out these institutions and there's no normalization that's just an absolute nonsense what do you mean when he says that that money that said grandma and grandpa is going to allow people to say and what do you mean by. it's supposed to
cost something to borrow money and people who loan money will always seek to make a profit so if the economy is growing at one percent and inflation is a two and a half you should be earning more than trina half percent no matter how short term you loan your money for well i can't go to the bank right now and put my. money in a cd you get more than three and a half percent anywhere and until that situation resolves the people who have been prudent and have some capital in senior citizens for example to save their entire lives or essentially having that two or three percent stolen from them and given to the banks who borrow for a quarter of a percent from the fed and loan out money to people on credit cards at twenty eight twenty nine percent interest this does not help the person who is prudent but it does great things for the speculators in the stock market in the world markets that haven't done for the banks let the post you know if you're concerned that banks can still fail because you did can't you brought up two thousand and eight right this
is essentially what's being attempted here is what was done in the one nine hundred eighty s. when we had the and in the one nine hundred ninety s. when we had a latin american problem and we've we've had other crises like this paul volcker previously allowed banks to run with capital ratios that he knew were woefully inadequate and he just didn't tell anybody about it and you allow them to use this this actually siphoning other people's earnings capacity is a way to get out of the hole the problem today is there's no demand for the credit that would allow them to earn that money so without the ability to increase credit approx of course the world economic forum approximately by another hundred trillion dollars over the next ten years this can't work and yet you have households that cannot borrow consumers the only place we're seeing consumer borrowing increases is the student loans which is insane we have our young people getting ripped off trying to go to college and then you know what else is there there's nothing you look at the statistics and that's where the borrowing increase is coming from so i
don't see how this can toss a work all right you know i just i get this going for just one more minute can i just i want to get an answer to a question that you hinted to earlier but i want to know if you had to make a prediction had to bet would you say we're going to see a bank collapse coming up here or any kind of a repeat like we thought two thousand and eight with lehman and bear stearns oh yeah i thought. this comes out of europe though i don't think it initiates in the united states but there's enough risk here in the united states that's been shamed off that it will absolutely come to the us i don't believe that this bailout that they're attempting to put together over in europe is going to succeed figuring out the timing on it is extremely difficult but i would not be surprised to see something go wrong with this or the end of the year or early in the twenty's well all right well there is your prediction before the end of the year at the same predict when people are thinking we're going to see more quantitative easing i want to see how these out by out i appreciate you being on our show that was karl denninger from the market there now someone who has done
a good job managing money despite the turbulent economic times this guy steve jobs of apple he of course resigned as c.e.o. this week now he started out with a vision of a different world just let's take a look back. on january twenty fifth and from computers into things macintosh and you'll see why nineteen eighty-four. like nineteen eighty five. i was the super bowl commercial that introduced the macintosh back in eighty four but fast forward to now and jobs has led the company not only thirty times after those years but to now be one of the most innovative and rich earlier this month apple had more cash on hand than the u.s. government did to pay its bills that was around the debt ceiling debate time and
also later this month it came out that apple had seventy five percent of the market cap of the entire european bank stock index so the market almost the same as all european banks now its success really is credited to the vision and the unconventional tactics of jobs he's known for selling dreams instead of products and for telling people what to think in his words he said this that it's very hard to design products by a focus group a lot of times people don't know what they want until you show it to them screw those focus groups who need them so he's known as a visionary leader and many in the tech world that are talking about how his departure really marks the end of an era so does this mean that we're that we're going to see a rise in an era of mediocrity well to answer this i'm joined by pete i hope i pronounced as a name right p.c. magazine's news director i hope i got that right thanks so much for being on the show now java is really yeah jobs is really known for innovation and he once said
that innovation had absolutely nothing to do with r. and d. money here is actually what he said in his words if we could put that up he said innovation has nothing to do with how many are indeed dollars you have when apple came up with the mac. i.b.m. was spending at least one hundred times more on r. and d. it's not about the money it's about the people you have how you are led and how much you get it and i think a lot of people think that a lot about success had to do with how it was led and how much steve jobs got it so do you think that his departure really marks the end of vision ery leaders in america. yes and no terms of missionary leaders in america i think we're always going to have visionaries i think there are code of a different world today particularly in tech today it's the sort of mark zuckerberg type this thirty year old genius to sort of makes this more can solve where it's at
giving this product away and looks to me money bria advertising or some other model and steve jobs is from a different generation and him and bill gates probably the most prominent examples of of the geniuses of yesteryear who are very product focused very user experience focused and so in that sense yes it does mark the end of an era all right a bull and of an era for that but you seems like you still think that there's an areas will continue just in a different way but let's talk about jobs its legacy because everyone is talking about how jobs was such a visionary in his way in a certain way that end of an era with him leaving but he was also known to be very meticulous very micromanaging and not very politically correct he's known for a number of very public fights widely reported in the press confrontations was that an important part of his formula for success to. oh absolutely i think sort of you know it's a little bit quirky but there's two jobs is
a very passionate guy. you know he's a very passionate leader and you know it was all about his vision of the customer experience and anyone who would dare challenge that he would go up against them. you know one of the. you know more famous fights was his fight over or to be flash on the odd phone and the i pad and it was portable devices and it's funny because it wasn't quite a fight in the war of words kind of sense but i mean the very fact that the he decided not to put that on those devices kind of made it if i. can also to go on oh sorry i did miss a franchise but also to they're going out in public fights with a doctor a reporter and with a college student who is going to questions going to him with questions so a lot of kind of things that people look at that are not necessarily politically correct i'm curious why this works for someone like jobs but not for say a c.e.o.
like the former c.e.o. of hewlett packard who turned that company around and was credited with reviving it but he had to resign because of some of his improper behavior. it's true i think a big chunk of it has to do with the secret culture of apple and their sort of fortress of information jobs himself was huge example hardly ever gave interviews very rarely made public comments i mean outside of you know rehearsed. corporate keynotes so when he would come and say something. you know he was usually . just so so unexpected and. it was just kind of wow this is you know that it wasn't so much the substance of what he said it was just like steve jobs came out and said something but i will say by and large those communiques he would send out were very much on message if you look at them you can
sort of see what the passion that he comes when he talks about something like you know. you know why why buy an i phone and rather than an android phone or with so you had a famous fight with blogger on from gawker right about that little guy yes or no if he had done what they ate these the e.o. did and had an improper relationship they were thin payments alleged we have been able to get away with that because the house actually. you know that's a really good question i would say he kind of already has in some ways there was some questions from years back about accounting practices and there was a little bit of question of whether you can survive. i don't know how seriously it was really taken but you know because steve jobs is was so into girl to the to the vision of apple and and and and the culture of our police handpicked all of the top executives including his successor tim cook. i think you know you probably would
have found a way unless it was something pretty you're creatures all right and then just yes or no is there some kind of is there something to that that these visionary anything that's the leader is how this kind of dark side as well. i think you're i think there's something to say about. you know i'm trying to think of other examples but i mean you know it's really comes down to the passion i mean if you have this passion for what you're doing and jobs has lived and breathed. for since you came back i mean fourteen years i guess it is now it's really comes down to that. you know if it's coming from a darker place where you're trying to hide some peanut you're really not it for that. for for the projects you're in charge of and i think that is sort of what separates the jobs you. proprieties if you will from other stuff like say more heard. about of course was the former c.e.o. of h.p.
and my guest was pete paschal p.c. magazine's news director now let's not forget that biting still rages on in libya and admits that the united nations is urging all sides to avoid acts of violence and u.s. officials are saying there's no place in the new libya for revenge attacks and reprisal meanwhile british tornado jets have been firing cruise missiles at colonel gadhafi compound in his hometown this even though nato claimed it would not help rebels hunt gadhafi down now as the tide continues to turn in libya our chief correspondent reopen ocean has the latest from there from tripoli her report. he still remains the goal number one for the rebels and since the beginning of the operation here in the libyan capital tripoli we've been hearing numerous reports and we've been hearing numerous statements by the rebels by the leaders of the rebels that they know his whereabouts as you remember they even announced that they've captured a captured safe well islam gadhafi his son and then it turns out that he actually
hasn't been captured he has been detained or at least has been released so we cannot say for sure what's happened but i turned out to be you know not true then we've been receiving information that the rebels know where gadhafi is here in tripoli and they live inside but they've cornered khadafi and that's been in had winds on many international news channels for quite a while but it actually didn't with any concrete detail and concrete success and today as well we are receiving reports that the rebels have flooded the streets of tripoli trying to hand down khadafy in one of his district in the south of the city the district known as abu slim. has always been stronghold of his supporters but actually we this information has
been confirmed and we still have no sign of khadafi actually. apparently and definitely this battle is far from over and we saw while driving from the tunisian libyan border to the capital tripoli differs a lot from what we used to see here in june and july when the western part of the country had been controlled by kentucky's forces. flags. waving everywhere and all the buildings all the walls covered with profit he's saying arabic english and french are welcome to you libya welcome to freely. also everywhere. is. complete it's just absolutely different country absolutely different. picture and trademark rebels. pick up tracks we used to see in benghazi in the parts of the country before kind
of a symbol of the fight against the regime here now everywhere so we can definitely say that. before the smallman peace part of the country is actually in the rebels' hands meanwhile reminders of the recent battles everywhere we've seen many guns and tanks spurns cars there on the road there are many many checkpoints on the road to tripoli like we've seen at least twenty or gunmen welcoming in everybody with a celebratory shooting but actually we also got a feeling that the rebels are the only people left in libya because of the cities we've been driving through loot bans and am to like go cities we've been many many cars loaded with personal belongings and we've seen lines along lies at the border from the part of libya towards tunisia so people are fleeing this country and that's clear because it's not safe here and politically that's quite unclear what's
going to happen next so as you can see situation on the ground is very complicated and the rebels are now facing many many problems. litter is the rebels have repeatedly been talking about elections and constitution changes but actually that's that's not easy and that it's not easy and i was there apart from market correspondent reify notion telling us why on the ground in tripoli meanwhile in syria our correspondent there says the country could be headed to a libyan scenario r.t. correspondent arena glue show is in damascus she told my colleague in moscow why she thinks you could see a repeat of libya and she first book about the protests we started a. thousands of people have taken to the streets in syria this has become sort of a friday custom for the past five months for people after their friday prayers to come out on the streets and protest the regime for what we know so far is that the
majority of the protests have been happening in the whole district of syria not particularly in the mass this itself although there have been seven arrests there as well today and yesterday for example most of the protests for it up to two thousand people out in the streets have been taking place in cities bordering. in cities and regions bordering syria is syria and turkey of course you have to remember that on thursday the most prominent political cartoonists in syria has been severely beaten by armed men now it is assumed that those men were from. the governmental regions groups and of course that has spurred a large wave of protests the cartoonist is now in hospital and of course a lot of people are saying that this has been something that the government has been doing but of course the government is saying that. the crackdowns which they
have been carrying out with thousands of people and people dying in the process the reason for the crackdown is the government says it's because there have been armed groups infiltrating syria from various other countries including places like iraq or saudi arabia and they say those armed groups are behind are behind those who are protesting against the change of the regime now we did speak to some people who would not talk to us on camera who did say that fortunately there is some grain of truth to that that the armed gangs which the government just talking about have sort of developed this strategy of when they come behind the protesters who are protesting. the current regime and they start shooting and then the armed forces the police. starting to shoot back as a result you have these protesters who are stuck in between a rock and a hard place and they're the ones dying and this is this is what's happening according to those people who have been to the growth has been all circling to the
policeman who did not like i said who did not want to talk on camera so in fact the situation in syria is very volatile and it's basically hanging by a thread because unfortunately and this is the cries for change of governments amidst the cries for reforms to be implemented unfortunately there is also experion violence which is starting to come up and is starting to shine through unfortunately there has been a lot of religious tension in the country as of late and this is a country which is not used to that so what we're facing right now at this point is is a pos is the possibility of a big mother a libyan scenario breaking out in this middle eastern country there you have it from our to correspondent arena evolution go there in damascus now in response today russia announced a diplomatic initiative to try to stop the violence in syria the russian ambassador to the united nations said moscow will send an envoy to damascus on monday also introduced a draft resolution to the u.n.
security council now this comes after earlier this week the u.s. in europe introduced a draft resolution however russia and china boycotted the security council meeting to talk about it and the russian government had a strongly negative reaction to it according to the ambassador r.t. spoke with him first hand russia's ambassador to the u.n. the tally churkin here is what he said about this announcement. they're frustrated that we have so far we have not seen any sign of the opposition being ready for and putting into dialogue with the syrian authorities so we thought that. the to put all those things in the resolution and to have the resolution passed that the security council. would signify a continued involvement of the security council in a positive way not towards the elevation of the crisis but hopefully towards establishing dialogue and having the violence go away and of course what we're seeing from our colleagues the u.k. and others from the security guards completely different it's a it is not in line it's completely contrary from the philosophy and principles of
the presidential statement it's completely biased and that leaning exclusively on the syrian government that doesn't have anything above the need for dialogue doesn't cut as your position for the log in fact our concern is that it's going to push the and the more extreme the more destructive elements of the syrian opposition towards a. certain even stronger efforts in order to topple the syrian government so that's why we will not like at all what the hell with them colleagues are trying put you by that is aleutian and and propose an alternative to that to keep the security council involved but the predator involved in a positive way now that russian draft resolution is also supported by china south africa and brazil and with that printed up our show from one of stories we covered go to r.t. dot com slash usa check out our you tube page it's youtube dot com slash r t.