tv Boom Bust RT May 7, 2019 1:30pm-2:01pm EDT
treating today's gandalf you three bridges for a neutral one says the hand to sift through to shake up all their directly head but first we have some headlines let's go. to a last minute snag in the u.s. china trade talks lead to our global report today as u.s. president donald trump threatens to increase tariff rates and apply them to virtually all chinese exports to the u.s. for now the process seems to be on track but twitter threads over the weekend are moving markets on monday the shanghai composite plunged five point six percent while the dow fell as much as four hundred and seventy points before rebounding the markets are reacting sharply to the sudden increase risk of a full on u.s. china trade war as a standoff creates a huge uncertainties for companies trying to decide where the to buy supplies build factories and make investments these strong tariffs on steel aluminum solar panels they fall entirely on the u.s. consumers and businesses who buy the imported products a study showed that by the end of last year consumers were paying three billion
a month in higher taxes and absorb one point four billion a month in lost efficiency this threat from trump was a big surprise for the markets following weeks of so-called positive developments and updates it really is unclear right now whether the threat was a shift in position or just a negotiating tactic it could be that this renewed threat is nothing more than an attempt to extract a few more concessions in the final days of talks here to give us the latest is r t correspondent sara months as aopa hi sarah so all of this comes as the chinese mice present premier was scheduled to come to d.c. this week to china cancel the trip well mr trump took to twitter as you mentioned and he did say that the temper sent will go up twenty five percent on friday three hundred twenty five billion dollars of additional good sent to us by china remain untaxed but will shortly be at a rate of twenty five percent actually this morning a spokesperson for the ministry of foreign affairs of china again showing confirmed
that he would be at least the voice from china would be traveling to d.c. and that will move forward with the talks despite her and this is what he said. regarding the u.s. throat cutting tariffs on chinese goods i think similar situations have occurred repeatedly in the past china's position attitude remain clear and i think the us acknowledges this china us trade talks have been held for ten rounds and have made good progress i think the priority now is for both sides to work together on finding a halfway point we seek a consensus based on mutual respect benefits both countries which would appease not only china and the u.s. but the international community as well and there's a lot of pressure now as the talk is that the clock is ticking and mr trump gave them until friday so a deal could be made as early as this week and that's something that people are hoping for although alison experts are less optimistic than they were last week when we thought they were pretty close to signing that deal and so what could
success possible success or failure look like for the u.s. and china here you know we're talking about the world's two largest economies they've been talking for at least a year now well yes since last summer when these terrorists were imposed mr trump threatened to impose ten percent tariff since january but has since postponed that because he thought the negotiations the discussions were going well including intellectual property theft which has been a major issue just last week we heard from a treasury secretary who had traveled to beijing with the light hisor and they said that progress was made and so this comes as a surprise but trump is now saying twenty five percent and not ten percent so far we know the u.s. has imposed two hundred fifty billion dollars worth of tariffs on chinese goods and beijing retaliated with one hundred ten billion now if trump follows through with his threats nearly all goods that are coming from china will be will face some sort
of tariff and this would total more than a whopping seven hundred fifteen billion dollars in goods now these are the two worlds largest economies like you said we could see the world really hurt from this if a deal is it. made by friday if mr trump doesn't get that deal and it also seems like if you're going to go all the way and use all the terrorist maybe that reduces actual u.s. leverage in that situation in that you know there's nothing left to do to china now and it looks like both leaders aren't there really is no middle ground and that's what experts and ellis are saying it's it's all or nothing for both i mean we saw this with mr trump trying to make deals with other countries like north korea but there's going to have to be some sort of consensus at least that's what we're hoping for otherwise the markets will continue to feel this surmounted all good thank you for joining us. now sticking with our lead story on what the u.s. trying to trade talks in the latest drama whether or not trump terror threat is merely a negotiating tactic meant to speed things up is right for speculation but markets
worldwide are clearly taking this risk seriously and particularly you see sectors such as semis industrials and technology taking a beating and dragging the market down with them here now to help to help us take a broader look at the global impact as tom gandalf the founder and c.e.o. of three bridges financial group. so tom this one right now isn't really impacting the you just the u.s. equity markets but there systemic implications for global trade in europe we saw a massive sell off today with the auto good dropping more than two percent tell us what's happening in europe right now. well you know europe is facing a lot of economic pressure on a number of different fronts and particularly as it pertains to a trade deal with china the challenge they have is that their exports are dominated by men you factor of goods and leading the charges of vehicles automobiles boats and airplanes certainly economic troubles in china will will certainly spill over
to europe and create further problems for them yeah we saw the cac and the dax drop more than one percent to the close and now australia they're also hit really hard by this unexpected news we see the australian dollar get land falling as low as point sixty nine sixty five earlier today against the us dollar it now sits at the lowest level so it's january third this year tell us how they're affected by this. well china is actually australia's largest trading partner and of australia's exports a third of them go to china so certainly any economic problems that affect china will will have a cascading effect on australia their economy and their dollar in particular is quite dependent upon commodities and the export of those those commodities of natural liquid gas. iron ore copper those are all things that china needs a great supply enough should demand wind up winning then is going to be affected in a pretty significant way they've benefited actually as the chinese economy has
skyrocketed over the last decade or so and if china takes a step back i think that australia is going to feel it as well. now transit plan may backfire here as china may not want to negotiate with a gun pointed at their head and as this conflict plays out escalates investors are going to try to hedge their exposure and find a safe haven we see them now running into the czech japanese yen today that's a safety against the us dollar so how else can investors seek to reduce their global exposure. well i'm not sure that anybody really likes negotiating with a gun to their head but the fact of the matter is that china needs the u.s. economy they need us as a trading partner and the us needs china as well i also suspect that something will get worked out now whether it ones of being as favorable as president trump wants or as favorable as president she wants we don't know that yet i think that there's a lot of saber rattling going on on both sides at this point. with this. china
with their. walking back of some of the commitments they had previously made so there's a lot of concern obviously on both sides i think ultimately a deal gets done but regardless i think investors should look at the power of learning dividends as a potential hedge against any global unrest from an economic standpoint. real estate. utilities. things that really are not dependent upon china's exports export import business are going to be probably safe havens for u.s. investors. local businesses health care is another one i think is probably a safe haven and something i saw him look at as the tensions ramp up now tom you know there's the u.s. china process is going on there's also u.s. separately u.s. europe talks going on on the trade relationship in theory of the chinese situation
were to be resolved or this process would just fall apart it's possible that those preexisting tensions with europe could then come to the fore maybe on the main burner would be china now would be. u.s. europe trade jenkins and there are a number of significant issues there what's the interaction here between the process with china and the process with europe. well there's a pretty interesting dynamic going on here because some of the things that are on the. plate with regards to the u.s. china deal or concerns for europe as well market protectionism is one state on business is another. competitive environment for smaller businesses a third concern and those are all concerns not just for u.s. companies but for european companies as well depending upon the context of a trade deal with china or europe may find themselves in a in a place where they benefit with no deal and they play it may find them themselves in a play for the benefit with a deal if there is not a deal and china trade with the us tends to break down then europe
might be able to fill some of the void created by reduced exports from the u.s. to china so it's a pretty interesting dynamic and one that's going to be certainly something we'll need to watch moving forward fascinating and you know we were at the end of the year there were so many signs of a slowdown in europe and in china now we've seen surprising signs of strength in the u.s. economy and some less bad figures coming out from china recently what's your big picture take on whether we're headed for a global slowdown this year and how decisive is the outcome of these talks in determining whether whether there's a slowdown or not. why i think the point you just made is precisely why trump decided to choose now to start his twitter storm with regard to the trade deal the us economy is extraordinarily strong right now g.d.p. growth is up unemployment is down wage growth is up inflation is very very low so from a. competitive standpoint the u.s.
economy is a much much better shape actually than we even realize here and i think that's probably why he chose this timing as of now he feels that the chinese commie economy is. not quite as strong as the u.s. is that this point and he probably feels as though he gained a bit of leverage and is in a position to take advantage of the dynamics going on here our economy is in great shape europe has some challenges there's no question about it and perhaps rather than taking an adversary approach adversarial approach i'm sorry about that too the u.s. china trade deal i believe that europe would benefit similarly to the u.s. have something positive gets done and we'll have to see if it plays out that way ok timing can be everything so i'm gandalf of the founder and c.e.o. of the bridges financial group thank you for your time. thanks for having me on preceded it. fox conn's billionaire chairman terry goal has declared of fit to run for president of taiwan goal held to be the nominee for the pro china will mean
down candidate for the twenty twenty alexion where he looks to unseat current taiwanese president cite a one of the democratic progressive party go has called on beijing to recognize and acknowledge the existence of the republic of china taiwan's official title he said taiwan should maintain peace with china while protecting its own uniqueness but there is a fundamental rift between taiwan's pro independence leanings and beijing's reunification push the question of taiwan's sovereignty is highly sensitive election issue and goal has been under intense scrutiny as critics claim he would sell out the self-willed island because of his multibillion dollar manufacturing empire on the mainland go has deep business and political ties in china and most of foxconn assets and production facilities are in china go has met with president trump last week and announced he hopes to be the peacemaker between taiwan the mainland and the u.s.
and improve the commercial links between the three sides he discussed how taiwan can exploit close ties with both china and the u.s. as the race for advanced technology ramps up. crap times and now as it would restate full year and quarterly results for twenty sixteen twenty seventeen and the first three quarters of twenty eighteen after employee misconduct of fabricating a number of transactions related to suppliers and procurement crap heinz had already disclosed in february that the f.c.c. was investigating as accounting policies so this earnings restatement does not come as a surprise news of the investigation plus the company lowering the value of its crap in oscar meyer trademarks by fifteen point four billion led to a one day twenty percent drop in the company's stock price the company said it does not believe the restatement was quantitatively material. totaling about two hundred eight million dollars berkshire hathaway is the largest shareholder and wrote down
over three billion dollars related to its investment in kraft heinz as shares of the food giant tumbled more than twenty four percent year to date in the latest c.c. filing the company said the investigation did not identify any misconduct by any member of the senior management team. time now for a quick break but here because when we return chris martenson a pretty prosperity joins us to break down the impact of terror threats on global oil markets and as we go to break here are the market numbers at the closing bell.
you're relying on data that is not very well to find like g.d.p. number of the gross domestic product number is notorious for being very opaque and it doesn't really give a picture that you can draw any minute inclusions from a that's true of almost every number that's produced by the government because it behooves them to control the data because the data controls the algorithms and the index. what is it calling the coin is magic and the new type of digital currency essential lies digital scarcity chancellor. of second for bankers call the
genesis blog for reason civil disobedience a source of optimism because i can control my own financial destiny it's just a new way of coming to consensus it's a game changer in the human history this is columbus discovering a new world this paradigm shifting technology that transforms economics and finance in a heartbeat the apollo eleven landing on to the next and stacy. in twenty four to you know bloody revolution to. the demonstration going to be relatively peaceful political protests to be creasing the violent revolution is always spontaneous or is it you know we hear i mean i lived. in the. school in the middle of the former ukrainian president recalls the events of twenty four. invested over five billion dollars to assist ukraine in these
another cold. secure and prosperous and democratic. join me every thursday on the alex salmond show and i'll be speaking to us of the world of politics or business i'm show business i'll see you then. when the first century both of these. elements. and the moment do it is entertainment if you would like to interact. which is happening to individuals are using their judges through facebook through to it how they were. interacting with. those seeing the results.
welcome back the malaysian attorney general has approved the extradition of a former managing director at goldman sachs to the united states to face charges including three mt three counts of money laundering and the one m.t.p. corruption case granting a request from the u.s. department of justice that managing director at goldman chong wa known to english speakers as roger also faces charges in malaysia the malaysian attorney general told reporters that will face trial in malaysia as soon as proceedings in the u.s. are concluded mr sapir you're at goldman former goldman partner tim liason or has already pled guilty to charges in the one empty case one m.t.b. was a state developments initiative that allegedly became a slush fund for disgraced former malaysian president najib resign. and associates
goldman is under legal scrutiny for the role in arranging the total of six point five billion dollars and bond sells for what for one m.t.b. from two thousand and twelve to two thousand and thirteen earnings are raising fees of six hundred million dollars. and the latest unemployment figures from spain show a significant drop in the jobless rate for the month of april spanish labor ministry statistics show a month to month drop of two point eight percent and the number of those seeking work over ninety one thousand fewer spaniards were rest were registered as unemployed in april bringing the total number of unemployed workers down to roughly three point two million that positive outcome has a bit of an asterisk on it as the easter shopping season is believed to have given the spanish economy the usual seasonal boost after seasonal adjustment the number of jobless fell by an estimated nineteen thousand a poll by the national statistics institute shows the spanish rate of unemployment for the first quarter still trending high among european economies at fourteen
point seven percent. and here to dive into more of the details on our lead story in the u.s. china trade talks is chris martenson founder of peace prosperity. so chris welcome back let's talk about some of the effects of the latest episode of this trade talk reality show the world has come to watch early reaction right now shows oil falling across grades and types on the news that the heightened risk of these u.s. tighter talks are not producing an agreement what's your first take on the latest bumping from president trump and the reaction from the oil markets. well that oil markets actually rebounded pretty strongly into the close there finishing up actually green on the day and we hit a peak in the oil market better than it will cohen thinks it's been falling for a little while it certainly had a tough night work a lot of things did in the overnight markets went out two tweets of one hundred words total i think came out from trump rattled
a lot of markets but looks like the markets kind of shrug that off oil is pretty strong right here and i think there are a lot of geopolitical factors that are going to weigh on the price of oil as we go forward. so i know you try to have a scientific bend in your analysis but there's a lot of factors here that are hard or impossible to quantify such as present trends and shifting moods and how tired i may respond to threats and blunt demands so do you have a prediction on whether the u.s. and china will reach an agreement or what are the chances of success at this point . i would very much agree with your prior guest you had on you talked about how you doesn't think that either side is going to get exactly what they want i think that's actually in the cards certainly the united states is a strong economy and that gives a little bit of negotiating leverage and negotiation grow as a leverage so it looks like trump you know what he's in a good audience got stock market pretty much near all time highs he's got a strong economy to work with looks like good leverage china has
a ton of leverage in this story too and so my view at this point is it looks like we're going to get a deal it's going to come through it's not going to be quite what anybody wants but they have been all and yes trying doesn't back china into a corner where they don't have any way to save that there's no good out they may surprise us if they are backed into that kind of corner. now taking another angle on this we saw a equity markets falling worldwide earlier today but how are commodities markets doing we saw gold a week ago hitting a peak of twelve eighty five announce as you know and mr typically fled to safety in precious metals what's happening what's happening there. well with gold specifically it got a great start to two thousand one hundred and it's given up almost all of its gains pretty much flat on the year which if you want to believe what the gold market is telling us it's not a lot of concerns about safety at this point i mean very much a risk on games that through december mo's for all the equity markets across the
world so looks like i'm not taking much of a read from gold that commodities very interesting story there it was just two weeks after three was announced that we saw the commodities in a very long. the theme down cycle is all across the board included that's on oil green soft metal low kinds of things and it's only been recently we've started to see some recovery in that but still the ratio between commodity prices and equity prices is not a multi generational skill so commodities are not yet up off the floor in the story yet and i think that's really indicative of where we are in this global story. in terms of supply of all the commodities that we need right now very interesting and also we touched on oil obviously saying oil rebounded today after some drops in the morning but you know on some specific commodities cotton and corn futures also slumped today while soybean contracts are headed toward their largest drop i
believe in nine months there is the oil price chart there but all in all looks like a risk off day as investors are trying to hedge their bets in the event that there is perhaps a full blown trade war or that this process takes a turn for the worse where should investors go if they're looking for a safe investment if they are spooked where would be the safe place to go be right now. right now that would be in u.s. dollars and if you're going to be a nerd you might as well be in t. bills and get yourself you know some yield off of that and the reason for that it's that you know it's the world produced a lot of excess funds and put a lot of those at this farm through the central bank conduit into this financial system we saw a lot of theory trades a lot of speculative investments got made and it's those you know what i found when the market gets me just one who knows what the trade and that means dollars but thought that with the dollar go it's so it's a pretty safe place to be when you get into that ripped off environment or when the stimulus won't pull money flows into reverse course as the speculative carry trades
go up and well and i wish it was different but a huge huge portion of our markets are simply hot money looking for a solid pond and you know and often that means in the speculative flows one of the cheery trades are being. put across the world markets in this way so i'm looking at the dollar to see places people are really looking for safety right now and that would be a fairly short term place to hang out not about one. thank you so much kurt marsalis and founder of prosperity thank you for insight. you're welcome. that's it for this time you can catch boom boss on directv channel three twenty one dish network channel two eighty or streaming twenty four seven on clear t.v. the free t.v. at channel one thirty two are as always had us up at youtube dot com who must r.t. the next time.
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with. me me me me me them with. the kremlin reveals that it's laying the groundwork for possible talks between america's top diplomat. european commission president scoops the leader of the year award and confesses he made a mistake by not interfering in the u.k. twenty sixteen directed referendum. and russia the victims of sunday's plane crash in moscow which killed forty one people including a twelve year old girl.