tv Boom Bust RT June 20, 2019 8:30pm-9:01pm EDT
shot down over the rail arm is yet another hike in the market david any other make out of a financial group and former pentagon official michael maloof are on hand to break down the boom in the geopolitical consequences of the. pressure continues to put fire on facebook after social media giant has introduced plans to block their own currency fartlek naylor a public defender is on hand to pick through the me of facebook and we've got a show today so let's go and dive right in. a jump in global oil prices after another violent incident near the strait of hormuz leads our global report today as iran shoots down a u.s. military surveillance drone the latest flashpoint developed in predawn hours on thursday in the gulf region or wednesday night in washington and trip administration officials quickly huddled to assess the situation and possible responses on thursday morning prices spiked after u.s. president donald trump responded to the incident on twitter brant crude prices
surged as much as 3.9 percent while west texas intermediate jump by 6 percent before falling back to the mid pfizer around noon iranian officials claim the drone was in their air space when it was down while the u.s. armed forces directorate for the region central command insisted that the drone was attacked over international waters now joining us to drill deeper into the dilemma are david mack and they need the c.e.o. of mckelvey wealth management and former pentagon official michael maloof thank you both for being here so michael let's start off with the geopolitical aspects of everything going on here we know the importance of the strait of hormuz when it came to congress can you tell us how this has been a soft spot for iran in the past it's been a contentious period contentious area for quite some time you can go back to the to the so-called tanker war during the iran iraq iraq war and then subsequent events leading. up to that when iraq was shipping oil through. canadian ships
i'm sorry on kuwaiti ships and and they were they were attacked by iran and as a consequence reagan. knocked out some of the oil platforms that were there in a very restricted air strike and then stopped and then there was the escort the armed escort afterwards of the ships and then you fast forward again to about 2008 there was another another episode in which. u.s. ships were patrolling the area trying to keep the waterways open and once again small iranian ships are boats rather would try to buzz it in and attack it but nothing of consequence happened but the i would say that the most critical period was during the tanker war which we almost went to beyond just knocking out that
platform but admiral lyons at the time what i wanted to approach weinberger event secretary of defense under reagan to go ahead and attack because we had such a large assemblage of military warships by the. that didn't happen and admiral lot of them subsequently fired so there is an element of restraint here and maybe this can happen again as a result of the latest developments given the fact that trump talked about consequence that it was a mistake perhaps that led to the shooting down in this latest episode perhaps that is an opening for back channels to start working because we are in a real serious flashpoint that's a very important context and analysis from you michael david with tensions right now being high obviously between the u.s. and iran as exports tumble due to u.s. sanctions some are accusing us of trying to provoke a war if there if there is a. you know more of an open conflict what would this do to exports. well i think it
also raises the stakes for china they're still bringing in quite a bit of the iranian oil of course it puts pressure on the reale continues to put pressure on the iranian people in the iranian economy so these are all critical elements to a reduction in exports we've already seen the saudis being willing to make up for that in terms of supplies. i think one of the things we have to recognize is we're in an election cycle and this is almost by necessity something that the u.s. president can today say look i'm showing my merits as a president here's where i'm not only talking tough but acting tough the oil markets are suggesting that he's planning something that the fact that over 90 tweets yes this is iran they should be scared and then this morning he says well maybe it was an accident i think that is a signal for all of us that he just needs to be quiet he's going to be quiet as
they put something militarily in motion and michael let's follow up on that if this conflict or to escalate what would happen actually at the strait of hormuz would it be that one party might try to impose a sort of blockade or would tankers just not go because they would feel it's unsafe what actually would happen i think it could be all of the above it depends upon what would precipitate a blockade if there was an outright u.s. attack on an installation on iran soil iran has already said that if they can't get their oil out nobody's going to and i would suggest that in addition to a blockade for ever how long were shall short that might be iran but also target. saudi oil and gas fields to minimize the ability of saudi arabia to be an alternative supplier if it will from an economic standpoint is definitely going to jack up the oil prices particular for. russia. and because there are
a net exporter as well the u.s. will probably have higher oil prices probably but we are an exporter of oil as well it will be very disconcerting throughout the gulf because not only oil and gas travel through there but a lot of commerce that we don't even talk about for all of those countries in the in the persian gulf so it would be i think overnight you would almost have a global recession set in. so david let's talk about the suppliers opec members are actually meeting on july 1st discuss whether or not to extend a deal on cutting $1200000.00 barrels per day of production this deal was supposed to expire at the end of june what will be the outcome of this meeting. oh well i don't have a crystal ball on what the opec members will decide but i would suspect that the saudi arabia in particular will be supportive of the price and opec will be supportive of the surprise of the surprise of the price and and maintain those cuts
that would be my guess. and michael what do you think well i think it will definitely create a. problem for us in the near term and and for the world in the near term as i said earlier there's no unless we can calm things down and we can get people to talk. this is going to result in something very very serious. and michael are going to go back to jail political nature of what's happening with iran who's going to be affected the most if there is a slowdown in that state is it going to affect the world economy oh yeah it's going to affect it literally overnight and any time there's a an episode just like today the price spike tremendously that was just an oil it's going to be another goods as well and the countries that trade in there are going to be dramatically affected look the straits of hormuz as one of the most critical choke points of the world and as a consequence. really represents
a real flashpoint should any crisis develop and iraq iran rather i think can sustain a lot of trouble a lot of damage just like they did during the iran iraq war and they're used to this they've been there and done that and i question of whether trump wants to go ahead and commit now i want to point out one other thing and that a is that during the $62.00 cuban missile crisis we actually had a plane a you to shut down a pilot killed but president kennedy then. was very restrained in not responding militarily i'm hoping that this could be the beginning of a calming down period. more a very apt historical precedent you're citing there michael and david there is within opec some internal drama as well iran obviously has been falling down the group's production rankings as u.s. sanctions have kicked in and exports of fallen by the 100000 barrels per day from
2500000 previously. also saudi arabia seems to be turning more and more towards russia not an opec partner but not opec member but seems to be a very influential outside player what can you tell us about the growing relationship. or the growing relationship if you go back to the bush administration we in the us of made a mess of our mid-east foreign policy starting with bush it got worse with obama and it doesn't seem that we are in the current administration making any real positive u. turns so it's pretty natural to see the realignment of interests both with israel and rest of russia as well as saudi arabia and russia and of course china continues to play a significant role what you're really talking about is a long term story of. which we've played a significant role since that since the suez canal debacle in $56.00 you know we've played a significant role and now the question is will we continue to or are we creating
a world in which we we will be more marginalized ultimately i think the oil story $21000.00 in 2020 becomes a dollar story in a gold story as you see the deterioration in the fundamentals for the u.s. currency. fascinating david mcilvaine and michael miller thank you both so much variance. great to be with you. and other comedy news more iron will be going on the global market after a brazilian appeals court issued a ruling that allows the ballet corporation to resume operations at the do mine within 72 hours stock rose on the new york stock exchange by more than a full percentage point on the news of the ruling prosecutors that spend operations at the mine in february after at least 240 people were killed by a flood of water mud and mining waste when
a tailings dam burst near the town of ramadi now it's pressing. or to make up for lost time and in an official filing the company affirmed a previous guidance that forecast an output range for iron ore and pellets between 307332 1000000 tonnes even indicated that they were expecting actual production to log in closer to the midpoint of the range rather than the lower and as previously indicated. staying in south america argentina's unemployment rate jumped to 10 point one percent in the 1st quarter exactly a full point from the previous 3 months that new unemployment figure sets a 13 year high and in the case that $1920000.00 argentines are out of work also in q one of 2019 argentina's g.d.p. fell by 5.8 percent the rate of the fall that leads seems to be slowing after the after the argentinean economy contracted by 6.2 percent in the final quarter of 29 seen the unfavorable figures arrive as president morales. gears up for what may be
a tough reelection fight most likely against former president senator and 1st lady cristina fernandez de kirchner who has been publicly positioning herself for a run since december argentina's economy has also been battered by inflation and weakness of the peso on currency markets. the s.n.p. index opened at a record high on thursday after the federal reserve reassured investors that it was ready to cut interest rates as soon as next month to counter the growing risk to the global and domestic growth dovish comments on wednesday reinforced the idea to expect to potentially 3 rate cuts this year the market got happy very quickly in the perfect storm of optimism leading into president 20 summit with china as m.b. close at highs of 2957 but how long will this optimism last let's not forget the reality economic growth is slowing in the u.s. and around the world a potential peak in corporate profits is in progress debt is still beyond obscene
at the corporate government and. consumer levels and of course you have the continue trade war with china while a rate cut will make money easier to get and stimulate consumer spending it doesn't change the backdrop and this pop of optimism in the market will be temporary as a rate cut won't be enough to stymie a market drop from a trade war follow history now tells us that the stock market's reaction today to a rate cut hopes are playing out exactly as they did the last 2 times the fed hinted at a rate cut that was at the end of 2000 and the 2nd half of 2007 and in both cases it was just around the time the s. and p. index went from a near all time high just like today to falling over and plummeting in 2001 the fed announced a surprise cut that sent the nasdaq up 14 percent in a single day and then following that day the nasdaq would fall 57 percent before hitting bottom in 2007 that was right when the subprime mortgage crisis exploded
there was a brief period when you have rising stock prices and rising brand prices when the market actually hits an all time high this historic lee though didn't last and has been followed by a sudden market downturn and right now trade policy is driving the market narrative and if we secure a deal with china before the end of this year the fed may not have to lower rates at all. time now for a quick break but stay tuned because when we return pressure continues to be put on facebook just as a social media giant has introduced plans to launch their own digital currency barlett naylor a public citizen is on hand to sift through the scrutiny of facebook's foray into the internet and as we go to break here are the numbers at the close.
describing the trump administration's iran policy is confusing contradictory and incoherent would be an understatement as members of his administration beat the drums of war the president suddenly inject themselves into the conversation with words to the contrary what is the world thing. democracies do not deport human rights defenders over there peaceful expression democracies do not rule over millions of people for another people you know for decades on there is a larger context here and that context starts with the fact that israel has been occupying palestinians for 52 years and that occupation itself has
deteriorated the most basic ideas of what a legitimate democratic government looks like inside of israel. came here where did you work before you came here when you live. in many us states capital punishment is still practiced convicted prisoners can spend years waiting for execution but most of the time the victims' families they are very much in favor of the death penalty there are some people because of what they did have given up the right to live among us somebody even proven innocent after years on death row but how many more exonerations is it going to take before we as a society realize that this is not working and we actually do something about.
sri lanka is asking china for a nearly 1000000000 dollars dollar loan to improve the country's roads and energy infrastructure is the island nation attempts to recover after bombing after the easter sunday bombings that killed more than 200 people sri lanka has already started negotiations with china's asian infrastructure investment bank according to the country's finance minister mangala some are we were we are who said the situation we have been discussing with the. nearly an additional $1000000000.00 for further development of the power and highway sectors sri lanka also already faces boatloads of debt to china as a previous government borrowed for other infrastructure projects that never came to fruition following the april bombings because governments said they expect a 30 percent decline in tourism to the country that will that the climb will cause in turn a loss of nearly $1500000000.00 in revenue for the island nation. new reports are
coming out of the quadriga investigation at ernst and young analysts discover the co-founder drawled cotton was allegedly transferring user fund off the exchange and using them for his own margin trading on other platforms also found inflated revenue figures artificial trades and ultimately the withdrawal of crypto currency deposited by users on his exchange it seems that all these illicit activities could be traced back to one individual. who many speculated face faked his death in india in a region known for issuing fake death certificates as new reports arise regarding his mishandling of customer funds and commingling company assets with user assets it seems increasingly plausible that khan managed to pull off a disappearing heist identified at least $80000000.00 and bitcoin have remain unaccounted for having been sold via an unnamed 3rd party exchange. and in other
digital currency news facebook's plans for their take on the cons. a stable coin called libra have suddenly sparked a push for regulation from elected leaders and financial authorities around the world including the g. 7 group of nations here to discuss in depth is bar bartlett naylor financial policy make it public citizen bartlett welcome back and this is the 1st time we've had you back on the show since our friend barb chilton passed away i know you said you didn't like to recognize and thanks very much we miss part shelton those of us in the progressive community to whom he gave voice and i know viewers of boom bust missed him as as to why we surely do i really appreciate that bartlett getting to leave we've seen a remarkable reaction from elected leaders you know financial regulation beats especially here in the u.s. suddenly seeming to spring to life after this announcement fishel interest from the g 7 as an entity and individual member states can you just quickly catch us up on the various reactions and what are the concerns they're raising about libra we're
talking facebook here we're talking the way a huge number of the world's population communicates with one another so when you intersect that with currency which ever since cave people is the way people exchange things of value we've moved on in the last you know couple 1000 years from barter then that's the purview of government of nations sovereignty and so you intersect those 2 and you have natural nervousness in the united european response was was quick in the united states the republican controlled senate banking committee announced hearings on july 16th and already there's a hearing scheduled next week in the house financial services which is led by democrats. and on top of that right now it's facebook seems to be getting investigated for antitrust violations already and previous say they've had trouble even securing user data so in that respect isn't it kind of scary that now in addition to user data they will be in charge of securing our assets and our money
and that. has to be perhaps the chief concern facebook is free we intersect with it for free and so. we wonder what is their value proposition well it's selling advertisements it's not it's not something that we imagine but they're collecting our information and surgically selling it to advertisers who can micro target their audience well they're supposedly selling libra for free they're not even quote going to own it will be a geneva based nonprofit but but again what you buy is almost as precious if not more than the cat pictures that you post on facebook and they will know precisely how much is being spent this consortium and some more specifics of the pushback are worth noting include the governor of the bank of england mark carney saying that the bank would examine the bout with an open mind but not open door and the be either u.k. treasury and the financial conduct authority have been consulting over how to
approach the issues that leap represents so it's really unusual now to see such a broad pushback especially against such a powerful entity such as facebook so are we seeing a change and regulator addict and perhaps in the entire field of virtual currency well ideally it's nice that regulators who have been drifting off into nap time especially in the united states if not in europe only 10 years since the financial crash are waking up and if nothing else if libra takes hold even a fraction of the market we've now created a whole new type of too big to fail problem if for some reason there's a glitch if there's a little friction in the movement of libra we would have to bail out you know basically the entire world these are almost unfathomable problems that this that this particular project poses. that you mentioned generally some of the issues the g. 7 specifically cited around libor of financial stability issues including supreme protections
surveillance as well as monetary what they called mana. policy transmission issues can you translate those terms for us especially the 2nd one in explaining these our president is having an almost daily feud with the fed chairman powell over whether or not interest rates should go up or go down by a quarter point well if you had libra as the main currency in the world we would be affecting the value the cost of money is the cost of whether the economy is going to accelerate or decelerate and so monetary policy is one of the 2 ways a nation can juice its economy through the government by making money cheaper or by spending more such as on projects and if you somehow put something else on top or replace that ability to change the value of money you have taken away one of the main labors of how a government affects its own economy so now stepping back where i saw facebook partners in this project and how do they get particularly the credit card companies
figure into the problems that regulators are starting to consider very interesting and this this project introduces some realities that some of us don't pay enough attention to the credit card companies visa mastercard already know exactly what we're spending but they have realized that what's as valuable as using their card is alliances with other commercial companies where you're buying this so selling the information to brand x. that this person is buying brand y. is something that is of value to them and so as facebook learn from selling cute cat pictures for free on the internet it's information and so visa mastercard know that information is the real coin of the future and that's the real currency perhaps nailer financial policy advocate and public citizen thanks as always thank you for having me.
and finally it appears everyone is ready to get into the self driving car game the latest entrants renault and nissan just entered into an exclusive partnership with way mell a subsidiary of google parent company alphabet the 2 companies are working to build a stable of self driving vehicles in the 2 manufacturers home nations of japan and france in 2017 when will launch a limited self driving taxi service in phoenix arizona with the service launched an all in december 28th the partnership was also research commercial legal and regulatory issues when it comes to self driving tech much needed work as the technology moves so much faster than the regulatory environment in the announcement companies also said in the agreement that will last for an initial period but further details on what that means were not divulged this is very interesting kristie we see renault and nissan who seem to be parting ways in the wake of the
carlos ghosn scandal they had their partnership that seems to be dissolving but this this issue of self driving cars seems to be important enough that they just working on a brand new year and something to bring them together perhaps exactly as of this looks like they're divesting into good assets. that's it for this time you can catch boom bust on directv channel 321 dish network or streaming 247 up but a t.v. . and a 132 door as always it is up at youtube dot com slash start to see you next time. even for the owners. to choose this pet food industry is telling us what to feed
our pets really more based on what they want to sell us then what's necessarily good for the pet turns out may not be a so for the people believe we have animals that have you know diabetes in arthritis and they have auto immune disorders allergies we are actually creating these problems it's a huge epidemic of problems all of them i believe can be linked to fairy simple problem of diet and some dog orders so heartbreaking stories about their pets streets the larger corporations are not very interested in proving or disproving the value of their food because they're already making a $1000000000.00 on it and there's no reason to do that research. thanks guys or financial survival. when customers go by the reduced price. then else well reduce and lower. that's undercutting the what's good for market bucket
for the global economy. we had one man 3540 years old. it off this child in the water. some 30 fisherman well this child later in his left. i guess to some. elements of all the whole. another man of the mfi was stubborn and hurt the most. i believe that this is one of the therapy is to love. tom. absurd to really harsh things that happen in life time.
when lawmakers manufactured them sentenced him to public wealth. when the right wing clusters and protect themselves. with the financial merry go round of lives only the one percent. of the time doing all middle of the room signals. to lose ground i mean real news real world. just driving the trump administration's iran policy is confusing contradictory and even incoherent would be an understatement as members of his administration beat the drums of war the president suddenly injects themselves into the conversation with words to the contrary what is the world the thing.
was. it. was like a computer. trump isn't ruling out and i am strongly against a wrong following a u.s. drone being shot down in the strait of pullman as further escalation comes as you are it makes them. to save the overall nuclear deal. the u.k. government suspends new arm sells to saudi arabia after the court of appeals rules their previous exports broke the law became its represents a thicknesser convict ready for peace activists who say that reality is using british made weapons to devastating effect in yemen also this hour. i. probably know it's water cannon and tear gas so you.