tv Boom Bust RT April 17, 2019 7:30pm-8:00pm EDT
broadcasting around the world covering all aspects of business and finance and how it affects you this is the us i'm christi i filling in for bar in washington d.c. we're glad you're on board coming up. after a year of tough talk and turmoil just how much the economies of the trans-pacific superpowers economist richard will lend us a hand to sift through what appears to be a shift in stalemate plus the saudi crown prince has laid out a bold vision for the oil rich kingdom but just how does he plan to finance the nation's ambitious goals will begin to sow the vision twenty thirty and just how big of a role that flagpole will play in it supposes clean energy outlook. and finally after seeing the competition to the finish line i.p.o. has slowed to an idle but that hasn't stopped other companies of the new era from
testing out the road market analysts out a mass helps check out what's in store for companies like central when they decide to go public all of that directly ahead but first we had some headlines let's go. we lead our global report today with china overcoming fears of an economic slowdown due to the ongoing trade war with the united states china's gross domestic product expanded by six point four percent in year over year growth in the first quarter of twenty nine thousand according to a report from the national bureau of statistics the g.d.p. growth outpaced expectations of a six point three percent and came in at the high end of the nation's target range of six to six point five percent the positive game comes on the back of an incredibly strong retail sales tax asset investment and industrial production sector the latter of which grew by eight point five percent year over year from march as china's economy has managed to stay relatively stable the u.s. finds itself embroiled in another. it's bad this time across the atlantic to help
us find our way through the trade hassle for we now bring in richard wolfe professor of economics of america at the university of massachusetts amherst and the author of democracy at work professor great to have you. thank you glad to be here so let's start with china u.s. trade deficit fell it an eight month low in february as imports from china plunged the twenty point two percent drop in imports from china was the main driver in the three point four improvement in the u.s. trade deficit and net exports in the u.s. may be on track to add to the first quarter g.d.p. the trying to administration's now pointing to this as evidence that the president's america first agenda is starting to bear fruit is this temporary or how do you see this being played out. we don't know yeah for the trumpet ministration to make such a claim in the case that they like to play with the numbers it's not serious economics the truth of the matter is that these trade wars have been damaging to the chinese and they have been damaging to the united states both the testimony
however of the chinese economic growth coming in at six point four percent which is between two and three times faster than the american economy has been growing over the same period is a sign that if mr trump thought these trade wars were going to somehow bring china to its knees as a bargaining opponent he is totally mistaken he miscalculated that i really is the chinese have managed to get through this trade war and do pretty well it's the united states that is now struggling to do the same so we understand that china in order to counteract the negative effects of the trade tensions the u.s. is poised to take a more stimulus approach to drive expansion and growth so we're seeing the markets react to talk on stimulus and we see certain sectors rise such as domestic automakers and electric appliances what do we know there. but what we know is that the chinese. his government has been very very successful not just now and not just
in the last two or three years but literally for the last twenty to twenty five years the government in china the communist party whether you like them or not and you're critical of chinese society in other ways is another matter but if you're looking at economic performance growth of the economy growth of jobs and growth of wages they have managed through the ups and downs of the last period even with a crash in two thousand and eight to keep being the number one growing economy in the world and it's an extraordinary display of their resilience that we're observing today did all that just come from increased government stimulus or was there something else at play. well there were other things too yes of course but the government stimulus is crucial it was crucial in the aftermath of tucson two thousand and eight and it has been crucial again in the aftermath of mr trump
launching the trade wars and the charity's impositions on the chinese that they've been able to come through both of those events despite all the predictions of gloom and doom made inside and outside china has to be given to them as a testimony to their skill in managing the economy doesn't mean they won't have problems in the future doesn't mean that there are flaws and difficulties in the chinese economy as in every economy but given all of that this performance is very impressive so now let's move on to the european front the u.s. and e.u. have been battling at the world trade organization over subsidies given to boeing and its european rival airbus that ruling found boeing received at least five billion in subsidies prohibited under international trade rules the u.s. has failed to since removed boeing subsidies and as a response that you have proposed tariffs on twenty billion dollars of u.s. goods how the u.s.
respond to this. well under the rules of the w t o the united states complained that the air bus was getting subsidies in europe the europeans counter complained that their competitor bowlegged was getting subsidies in the united states the w t o has done a multi-year investigation and found both claims were true in other words both contra both parts of the world u.s. and europe were violating the w t o agreement that they signed in terms of providing these subsidies by the way it's a footnote that people should recognize that the violation of these rules is a normal regular part of what countries do to each other so that one will look one of them calls the other one a cheater. it's a little bit of a game since they're all cheating in any case now what happens is the two sides can hit the other side with tyra as an offset to the subsidies which hurt their ability
to compete and that's what you're seeing you're seeing the europeans telling the americans ok now we the w t o has found the you to be subsidizing your airline so we're going to hit you with towers just like you're threatening us it looks like we're going to now have a tower of war between the united states and europe to be taking the headlines now that the war with the chinese is reaching a conclusion according to mr trump he needs i guess to have some war going on somewhere that he can tweet about and if the chinese one is over well then the one with your of can take it's place so this has been one big law at that drama and back this has been a fifteen year long battle between boeing and airbus and now these terrorist seem to be very aggressive and they seem to have come out of nowhere but the timing is actually strict very strategic because if the goal was to her boeing but i want take a very big financial head because they're still reeling from the loss that took grounding
its entire seven thirty seven max fleet and this what even further cripple it is this a way of signaling an end game to this fifteen year long to spit. my fear is no i think that this is just one of a series of charges it is not difficult to find in any other country the kinds of subsidies his zune or at least indirectly that the united states found in the case of us and that the europeans found in the case of boeing so if they want to keep this kind of tit for tat trade war simmering it will be easy to file new charges about other important traded commodities and this will keep going for ever because these things last for years of the. to gauge and and then years for adjudication of what is or isn't a reasonable response what this means is an endless uncertainty a troubling of international relationships and those sure breakdown of the kinds of
alliances that used to bind for example europe and the united states well thank you so much spare time richard well professor of economics i'm raddatz at the university of massachusetts amherst thank you so much. my pleasure thank you. hong kong ensure blue cross has developed a block chain solution to speed up medical insurance claims and prevent fraud the new block chain solution is a permission based network based on hyper leisure and open source modular build approach to block chain all data and transactions are validated in real time reducing fraud and increasing efficiency and cutting costs associated with reconciling client data across several parties some of the servers believe that this service will attract more doctors and medical practitioners to join blue cross
doctor network as the technology will alleviate the need to employ a large and mistreated staff for processing work. has the two years before tween apple and qualcomm finally been squashed the two colossal tech companies have spent years firing across continents of a royalties and patents apple is one of the world's largest manufacturers a smart phones while qualcomm is the largest provider of chips for mobile phones just as the trial started on tuesday in federal court and san diego the two companies agreed to dismiss all legal action worldwide as news broke qualcomm witness a twenty point increase on their stock hitting a high of just over eighty dollars per share applesauce like gains and there are already lucrative stock following the news as well apple appears to have been under pressure to make a deal after intel announced tuesday that a plan to stop selling wireless modem chips including those that would support much anticipated five g. technology after intel c.e.o.
bob swan said there was no clear path to profitability and positive returns in the smartphone modem network the company's stock is doing well up three points just about touching the sixty dollar mark. time now for a quick break but hang here because when we return. the saudi crown prince has laid out a bold vision for the all rich kingdom but just how does he plan to finance the nation's ambitious goals will begin to saudi vision twenty thirty and just how big a role that flagpole will play as opposed to clean energy outlook. and after feeding the competition to the finish line list i feel has slowed to an idol that hasn't stopped other companies of the new era from testing the road market analysts at a madhouse us check out what's in store for companies like when they decide to go public . and as we go to break here the numbers at the close.
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industries refining and petrochemicals business since early this year pox appeared to be gaining steam in february when saudi crown prince mohammed bin salmen visit india meeting with reliance chair and india's richest man move cash money. the minority stake in the company could run saudi aramco around ten to fifteen billion dollars if the deal is made it will be expected to be around june of this year reliance has faced criticism recently for being too big having a hand in too many industries including energy textiles natural resources retail and telecommunications reliance stock was up following reports of a possible deal but that has since leveled off saudi arabia is poised to begin work on one of its flagship projects under the umbrella of their vision twenty thirty initiative the plan called me on aims to create a new mega city in the northwest part of the kingdom possibly funded by the
eventual i.p.o. of the nation's oil giant aramco with more we're joined by r.t. outlook's mohela vege who's in toronto hi alex how are you very good how are you doing great so alex tell us a little bit more about the neon project. well the on the project should have been they're hoping to have shovels in the ground within the next few months start that baby up it's a massive project and it's actually a cooperative project between you and a group called misc foundation the misc foundation is actually it's the nonprofit organization run by prince mohammed bin solomon so this is a big deal for him now neal is this mega-city that they're thinking of building we should bring up a map or this just so you get an idea where this is going to be happening it's in saudi arabia it's a very close to the egypt and jordan border and basically it's a five hundred million dollar project very very ambitious extremely modern city something like we haven't really seen yet on this planet and the prince really
wants to push this baby through now if you look at this there's a there's a nother facet to it it is very close to international area waterways that are used by a lot of people and israel is right around the corner from there so many people are thinking that this might actually stoke the fires in saudi arabia for them to recognize israel as a state which would be geopolitically speaking massive move least in that region and why wouldn't say at least i'd say that it would be globally because israel is really you know one of those situations of the middle east that kind of keeps things going from a perspective internationally from the u.s. and russia any to any big players are involved in this game so of course looking at the crown prince himself we know that he's been in talks with netanyahu in the past while their days seem buddy buddy and this project could move these things forward now talking about this project and b.s. has made it very clear that he wants to see saudi arabia change he wants to move
away from oil to high tech and this city would be exactly that will be high tech and with that of course you need manpower to work in high tech so he wants to put some of this money forward towards that as well so that they can actually train people. to be working in this new industry that they bring this is completely in line with vision to two thousand and thirty it's about moving the country forward and that's exactly what they're hoping to do and this would be really a massive project and i'm not some start to get things and kick it up and move forward so how does a possible saudi aramco i.p.o. play into this mega-city initiative i imagine they'll be funding it. and you're here right on the right of the money there when you look at a ramp go obviously an i.p.o. is something that they're very interested in and we talked about bonds last week they made a lot more money than they thought they would it with their debt bonds i.p.o. we're looking possibly two thousand and twenty so money moving forward in that
direction and they want to use that money to invest in their future and that's a big move on the saudi plan a but it's it would be a kick start you can use this this massive amount of money that it surely would happen if a radical goes i.p.o. we don't people are going to invest we saw that with the debt bonds we saw that bankers really don't care about of reputation that saudi arabia has and something like this can actually change that reputation if they keep moving in the right direction so you know bankers have short term memories the rest of us maybe not so much again we're talking about money here when it comes to seize also spoke about money going to the labor force as i just mentioned and there's a ready international interest here we can look at japan's softbank when it comes to energy and this is a big facet of it this city what they would like to see is that it's fueled completely by renewable so by wind and solar softbank from japan is that they want to get into that electricity game they want to invest so something along those lines think it's very progressive the thought process is very progressive and this
could possibly bring saudi arabia into a new day where it could be a leader a progressive leader something that we haven't seen in the past from that country. there we. had actually making ambassadors and to the pike as well as this just kind of a privately funded by saudi well like i just mentioned japan and the soft bank is into it and it's really ok i mean you look at it who's going to be funding it's going to be international interest if this thing kicks off the way it's going to kick off if there's five hundred billion dollars you're going to see international interest from it you're probably going to see interest from the u.s. you'll see interest from u.s. banks china china's got its hands in everywhere it's a smart country the way. working we know about the plane and the the road belts all the way into europe so i mean this is something that could be interesting to a lot more than just japanese investors in the bigger picture. thank you so much alex first time having you thanks.
thursday will be a big day for tech initial public offerings image sharing site pinterest and video conferencing platforms soon video telecommunications will have i.p.o. thursday impinges initial filing they have plan to sell seventy five million shares at between fifteen and seventeen dollars a share with a total valuation of ten dollars ten point six billion at the midpoint it is expected that the price will exceed the initial range the site reported seven hundred fifty six million in revenue in two thousand and eighteen and their filing document that is a sixty percent increase year over year but still posted a net loss of sixty three million meanwhile xoom is planning to sell shares between thirty three and thirty five dollars apiece that is an increase from the prior range of twenty eight to thirty two dollars in their filing document this is revenues shot up one hundred and eighteen percent last year to three hundred thirty
and a half million dollars the company that also specializes in enter office messages well likely be the calm for an expected slack i.p.o. later this year. with this is very exciting week for tech i.p.o.'s as unicorns are finally going public here to help us break it down is adam ash c.e.o. of the adam mesh trading group welcome. thanks for having me so adam we're looking at zoom a video conferencing software that announced on tuesday that they have increased its price range from twenty to thirty dollars per share to thirty three to thirty five dollars per share this must mean that the books are multiple times oversubscribed at the top of the range it would give zoom a nine billion dollars market cap that is a nine times increase in the last round of funding so why are investors so excited about zoom. because it is the rare unicorn that is profitable whereas all the other ones are losing massive amounts of money zoom is going public
and it's already profitable and i'll tell you something else about the technology i just partner with a guy named steve wright meister that stock news in these a fin tech specialists and he has a zoom every day and we have like five different people on the meetings in all different offices and whoever speaking it switches to technology is so cool and when you think about all the we works and this day and age of remote offices it's the perfect technology right now so not only is the usability growing but again it's a profitable company going public and we haven't seen that in a while absolutely not so right now it seems like the only true comms are legacy web based meeting providers like cisco systems google hangouts and skype and i think this one is being compared towards more like wild software companies such as like sales force and twelve leo what are some a concept you're looking at prism. i think like you said sales force because it is so much connected to those remote offices people are using it from all over
it's going to be a functionality of the business as i said my team i'm seeing people having meetings on it every day so when you. something that's ingrained in the d.n.a. of a company the valuation will go higher because it becomes something that you can't live without but as the demand grows it's going to come in towards the high end of its range absolutely but then also the main question is are there margin sustainable right now they're both staying on eighty percent gross margin is that actually sustainable as they continue to grow. well as they go public and raise even more money i'm sure they'll invest in ways to create more of a demand but you're right it's funny people value the companies that are losing money because the only get better and then use a company that's when you say well can this only get worse so time will tell i've got to roll with the hot hand there's a thing we say in truth it's the flames and zoom right now it's maintaining those
margins without the help of the public when you get the public so more money behind it maybe it will grow even more and maybe if they grow even more it doesn't matter about the profit margins because if you have bigger numbers you can have a smaller profit margin and still make a lot more money smaller piece of a big guy so let's move over to the pen trust real quick they'll trade undertaker symbol and ass on the new york stock exchange thursday so what's interesting here is that they have set their i.p.o. range from two fifteen to seventeen dollars value at ten point six billion at the midpoint so that is two billion less than the valuation they received in the last round of funding two years ago when pinterest raised one hundred fifty million at twelve point three million valuation and that's even less than the round prior to that when they raised three hundred sixty seven million at an eleven billion validation in two thousand and fifteen so pricing down pricing below the last round is known as a down round and that leaves investors very concerned what do you make of this.
companies like goldman sachs who got in the two thousand and seventeen for over twelve billion valuation and you're looking at it now. possibly reaching ten. you know they don't feel good but for us the public are going to have a shot at this and even at the high end of the reins ten billion i like it here's why pinterest has two hundred fifty million users two hundred fifty million advertisers are flocking to it because you're in a buying mood when you're on pinterest facebook for comparison has two point two billion users so call it ten to one but the valuation on pinterest versus facebook facebook is valued at fifty times what the high end of pinterest ranges be so even though it's only ten times as many users the valuation is fifty times more so if pinterest is able to scale their advertising revenue you could be looking at a real buying opportunity when they go public i'm definitely going to have my eye
on this one because i think the valuation is exciting and the so-called down round might be an opportunity for investors to get in yeah exactly so i think we're seeing like a much slower pace of growth here whereas most investors in the private market actually accustomed to more of a j. curve or a hockey stick kind of trade directory so i think right now what we're seeing is that the private market is actually sucking a lot of the value out before it even has a chance at the public market but you're saying that right now is an opportunity for us yeah i'm just looking at the comps two hundred fifty million users which could grow and all the upside in revenue and i was like the fact that it's already gone down so we're not chasing the top because if you look at what just happened with lift you'd rather buy low than by high rise. at a match the trading day thank you so much for your time. thank you rob. that's it
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