tv Boom Bust RT August 28, 2019 7:30pm-8:01pm EDT
this is boom bust broadcasting around the globe and covering the world of business and finance in the antarctic and in the burrito and i'm feeling like content can't look at what's on back to. back down and buy the global economy piling up on the gloomy picture back there richard wanted on his trip through what about may be on the horizon. a little you don't johnson and johnson may be a major breakthrough in the opioid crisis and a disaster for j. and j. but their stock is doing just fine. with trading joins us to break down the latest
opioid expose drug companies and the rest of the farmers all that in the supply bottlenecks slowing down the latest fast food craze in one spicy show let's go. another step toward a hard break between the united kingdom and the european union leads our global report today as the queen of england approves prime minister boris johnson's request to suspend parliament queen elizabeth specifically granted the prime minister's request to prorogue the parliament in september effectively narrowing the window in time for the opposition or dissidents or mr johnson's coalition to legislate a barrier to a no deal brags that mr johnson has given every indication of being dead set on taking the u.k. out of the e.u. want to 31st without a deal if the e.u. does not submit to his demands regarding the so-called backstop on the border between ireland and northern ireland some experts on the u.k.'s unwritten constitution say the move effectively makes parliamentary privilege. no deal
brogues at nearly impossible the pound sterling was a renegade currency markets on the news with action on the options market showing expectations of volatility reaching the new highs since the beginning of this year . the u.s. 30 year bond yield fell to a record low of 1.907 percent early wednesday morning while the yield curve inversion continues to worsen we talk a lot about this to tell inversion as this is a notable and highly watch recession indicator that has correctly predicted the recession the last 7 times the spread today fell 6 bits is extending the losses from previous sessions when it registered its lowest level since 2007 in addition the spread between the 3 month and the 10 year sank to $3054.00 that now we haven't seen it that low since march of 2007 the $310.00 has now been inverted for 3 months and history has shown that we have had a recession 100 percent of the times where it has gone negative for at least 3 months the bid for treasuries began overnight as johnson's announcement sparked
fears of a no deal and loss of its largest trading partner you can see yields actually fall and worldwide italian yields fell below one percent for the 1st time ever german french heels also fell to record lows global risks have now increased as we monitor trade developments between the u.s. and china the white house is scheduled to impose the 1st stage of u.s. tariffs of $300000000000.00 worth of chinese goods on sunday meanwhile china is prepared to respond with tariffs on the us products on the very same day so with all of these negative data points why is powell still suggesting that we are cycle that is the big question on everyone's mind are we currently mid cycle like 9095 or 98 or are we late cycle like 200-2007 powells answer was not satisfactory to the markets and right now the balance of probability is leaning towards late cycle it's hard to argue mid cycle from the real data that we're seeing here. their profit
margins and growth are outright declining on a year over year basis for both public and private companies housing has failed to rebound despite having lower rates now and cyclicals are underperforming significantly cyclicals are the most sensitive to macro changes in the economy and they have sold off hard this includes transports industrious materials construction all of these look like they're in late cycle some might actually even argue the end of cycle there's also concern now that the fed is impotent and lacks the stimulus capabilities to jumpstart a recovery the fed has become like the e.c.b. there is nothing that they can do to generate the kind of growth we need to offset this like they did in 2015 now coupled that with a strong dollar the fed might actually be forced to cut rates faster the strong dollar as we mentioned before is the big risk in the equation it has every law opportunity to break lower with everyone cutting rates but it didn't so if we get that uncontrolled rise in the dollar it would take the dynamics significantly towards a fast or slow down and global growth
a much faster slowdown in commodities and a much faster deceleration of emerging markets so what we're experiencing right now is eerily similar to the 1900 cycle that was one of the longest cycles we had in history was to fall slowdowns exactly like the one right now so eventually that broke so will break this current cycle people right now i just don't think i want to believe it because we're seeing equities markets at all time highs and unemployment at record lows but remember unemployment is a lagging indicator unemployment was at record lows in 2002007 the equities market was also at all time highs in 200-2007 so that's why you don't trust the equities market you trust the bond market the bond market tells the full story and right now it is screaming that the global economy is quickly slowing down the world has traditionally been dominated by equities but today we have to shift our mindset across multiple asset classes to piece together all the data points and assess the situation from the. where we saw the 1st signs with the f.x.
markets with a gripe in asian currencies and the dollar's unbridled strength and then come the fixed income markets when it started to invert and now you have the cyclical starting to roll over in equities and soon the commodities will be the next to fall . and here to break down the global economic scene are there is a rich professor ritter was professor of economics emeritus at the university of massachusetts amherst and the author of democracy at work so richard this is the big question on all the traders and investors mind right now are we missed cycle are we late cycle because the evidence seems to point to a late cycle or where do you think we are right now. i'm with the people who say we're at the late cycle i literally am waiting almost every day now for the kind of straw that breaks the camel's back if you allow the metaphor of for the event that really takes us over the edge and it may indeed have happened over the last 24 hours with the end of the parliament in great britain let me remind everyone the
foundation of british democracy was the creation of a parliament to replace a king so that no single person or single party could dominate british politics that there would be a place for debate disagreement and arriving at a decision in that way for boris johnson to cancel parliament to use a maneuver to get rid of this body is a statement of refusal that the problems of english capitalism are so severe that they have to take this action it's a little bit like the disruption that is coming from the trade war between the united states and china it edge to the late cycle danger of recession another variable risking to take us over the edge. and professor with markets today despite these troubling signs in the fix income market the crissy pointing to is
there anything holding up the equities market right now except perhaps expectation that the fed will sort of for. i think you have to see the equity market as now a kind of bubble in and of itself all of the increase in the quantity of money pumped into this economy since the crash of 2008 and 9 all of the low interest rates because they've been low for a long time they rise and fall but they didn't lower and they're now getting lower it's still that is an enormous amount of money that is not going in to producing goods and services because the mass of americans don't have the money to buy them so where does the money goal that's being pumped in the answer is it goes into the stock market it provides a kind of boost that brings the stock price further and further away from the basic economy and history teaches us as that gap grows it's only a matter of time before people realize that the only thing keeping up the stock
market is this money creation and that will come to an end at a certain point and then lord help us as to what happens as the stock market crashes right and staying on the u.s. one datapoint that has developed is that on higher income consumers have started to pull back on their spending which poses a significant threat to a comic expansion in a. increasingly unequal economy where high end consumption accounts for so much output is there any way to regain that confidence at the top of the income scale it's become so important right now. i don't see any on the horizon i think when you see as you open this story when you see the 10 year treasury falling below 2 percent people are not are so nervous people in the investment community which is what generates high incomes for a large number of america. it's people they're all so afraid of what's coming down
the pike that they're willing to invest in the very low amount of money interest coming under 2 percent after you pay your taxes which you have to $1.00 federal interest that's virtually nothing you're you're holding your money in what is safe only because despite that it doesn't earn anything for you it's at least safe in the hands of the government and you're so afraid of every other investment that's what you do when you have that in the financial community it's only a matter of time before it seeps into the rest of the community and of course they hold back on big expenditures because they become afraid to sell us our life cycle i think our life cycle as well why those policies tell insist that we are currently in a myth cycle situation right now and do you think that the fed right now is behind in the yield curve and they will have to later on be forced to drastically cut rates in order to try to. control of the environment. i think the reason mr powell says it is he wants
a little bit of security and safety before he cuts rates more i think you're right he will have to do it because the force of the decline threatening the united states economy is simply too strong but he does not want to be seen as providing what mr trump wants when he wants it mr trump has claimed the economy is great it isn't and if people recognize that because of all the signs you've discovered and you've discussed today then he is in deep trouble for his reelection next year so he needs to juice the economy to boost it and he wants lower rates but if the fed does that it looks like it's in his corner pumping up his political survival which is a dead devastating break from its notion of being above republican versus democratic politics so he asked to try. create rule but i think in the end he will have to do it mr trump will abuse the meaning of all of that and will push this
recession maybe back enough months to get mr trump reelected but remember the longer you postpone the correction for one of capitalism cycles the worse that cycle often becomes we should have learned that lesson in 2007 it seems we haven't and we're going down that road again professor richard wolfe author of democracy at work find him on twitter and patriot thanks for your time. thank you. b.p. is selling their oil drilling operations in alaska to private whiling gas farm hill car in a $5600000000.00 deal while the oil giant has space criticism from environmentalists to halt drilling operations in the region they said that it had no bearing on the sale b.p. owns a 26 percent stake in the prude hold the oil feel the oil field has produced more than $13000000000.00 barrels of oil since exploration began officials from b.p.
said the deal is part of an effort to raise $10000000000.00 over the next 2 years to boost their bottom line b.p. c oh bob dudley said that the sale will help the company to pursue new advantage opportunities b.p. started operations in alaska in 1959 and it was a key force behind building the 800 mile transit lask a pipeline. now for a quick break would stay tuned because just on the other side the ruling against johnson and johnson may be a major breakthrough in the opioid crisis but you can tell by looking at their stock price and you'll share is simply trading joins us to break down the latest with this for j. and j. and the rest of the farm sector and as we go to break here are the market numbers at the close.
for this interview but you believe that that it's a stupid. personal belief or should still spin. so what we've got to do is identify the threats that we have it's crazy confrontation let it be an arms race off and spearing dramatic to follow can only really i'm going to resist i don't see how that strategy will be successful very critical time to sit down and talk. officer. to get up off the ground began to. hurt them freeze on the sounds of an mit grown man mislead essentially.
wish to do away from the officer. of his group. the obviously did a kind of lunge for the web in one's midst and then when it happened on trace one and i'm suspicious didn't you know i never saw any contact with. any kind of went back to where they were so the answers back here they're going again 15 feet apart at this point and that's when the officer pulled out his gun and even turned 3. welcome back the government of canadian prime minister justin trudeau is rejecting calls to suspend trade talks with mercosur trading blog over a major member brazilian president jeroboam scenarios policy of clearing the amazon rain forest to make way for logging and agribusiness opposition parties had pressed mr trudeau who faces an election later this year to follow up on statements from
his fellow fellow leaders in france and ireland who said the european union's trade deal with mercosur could not proceed if brazil did not commit to protecting the lungs of our quickly warming planet but on tuesday international trade diversification minister jim carr said kim of the will proceed with the talks on a trade deal which could take years without any commitments from mr burleson narrowed to protect the amazon on one say the presidents of colombia and peru announced a regional summit on saving the amazon on september 6th in the colombian amazon region of the. it was on rangers across brazil bolivia brazil colombia ecuador guyana peru cerner and venezuela. and there is more news in the quickly developing legal endgame around the staggering corporate profits that fueled the opiate use addiction and overdose crisis in the united states yesterday we reported on the blockbuster game changing 570 $2000000.00 judgment against the u.s.
drug giant johnson and johnson for their profit while corporate complicity in the nation's deadly addiction crisis the judge in the case found that johnson johnson had deceptively market addictive products and the judgment against seem to have galvanized other market players with other major exposure to opiate related risk to subtle perhaps most prominently the poster family for the crisis are the factors the founding family of the drug farm purdue pharma and though they are preparing to seed ownership of the company and that it declared bankruptcy as part of a settlement that put value between $10.00 and $12000000000.00. i reported $3000000000.00 of that total will come directly out of the fact our family fortunes other drug companies including and no international and allegan are also reported to be in very advanced settlement talks. and joining us now to take a look at the market reactions on the opioid crisis and pharma stocks is danielle a director of options simpler trading welcome back then you know in the way in the wake of this opioid crisis johnson and johnson was found guilty and find
a record $572000000.00 but that amount as big as it is was significantly less than the penalties sought by oklahoma and the other states and tribes that are part of this lawsuit sending the stock actually trading up after the news so it seems like a fine was you know perhaps a drop in the drop in the bucket for j. and j. who brought in revenue of 81000000000 dollars last year it's similar to the split you spoke line over privacy issues earlier in the year they're still on prozac surely one because people have already priced it in is enforcement of regulation on these companies in this day and age really affected at all. i would say it is and i mean just by looking at one day of price action sometimes we're going to see a weird move like that however if you go back and look at last december this situation with johnson and johnson is that ever since the is best so the scandal came out the stock prices never recovered those levels and so while today may show
one thing i think in the long long term it's going to continue going down and right now if there are any benefit to actually being this big the pharma industry has consolidated drastically over the past 10 years but if you look at the big names j. and j. lilly pfizer. is mark popham out against the s. and p. $500.00 most of them have actually underperformed the exception was jan jan abbott by caroline so is there a point to holding these big pharma names as opposed to a smaller biotech that continues to actually drive innovation and drug discovery. so for me biotechs are very volatile and so i don't really prefer to hold those actually do like holding health care names specifically mark just because it is a nice slow and steady name and so investors have to look and think ok what do you want do you want something that is more volatile could be more explosive or do you want something that's more slow and steady and in the long run i still consider them slow and steady winners and speaking of john and stan you know amazon is
joining up with alpha bit k.-r. and warburg pincus to partner up with go just the right healing giant of indonesia apparently under the under the terms of these partnership amazon will invest in gold and use the company's delivery infrastructure also for amazon orders a big deal for go jack can you give us a story there. so amazon is just taking over the world most people haven't noticed but amazon has been buying of different companies all over the place particularly in retail and in the transportation space so all they're doing right now is continuing to add to their giant machine. and some tiffany's while they topped earnings revenues actually fell short as hong kong disrupted jewelry sales and tourist spend less across the u.s. so tiffany has now lost 6 selling days in hong kong due to the protests and they are the 4th largest market because of them and now they try to know for your outlook citing the impact of tariffs on a strong u.s. dollars so not
a luxury good sales are highly sensitive to downturns in the economy so are we've seen the beginning cracks in consumer confidence and retail spend here. yes definitely and there has been some cracks especially when it comes to luxury goods but i think the most important part here that i'm noticing is that more and more companies are coming out and noting in their corporate earnings reports that they're seeing an impact from the trade war and so even though we're collecting money for a treasury department once companies start showing an impact on their bottom line that. it is when it's going to start reverberating throughout the economy even more and right now they're also corporate insiders have been selling stock at record pace about $600000000.00 per day in the month of august what do you make of all of this selling especially from corporate insiders who as you know are very well informed investors. right now the stock market's an incredibly volatile state the stock market does not like the discord between the fed and between the president they also do not like the escalation of the trade war that was initially what
started off all this stuff all of the selling right now essentially we are just in a state of really a state of indecision and a state of insecurity and so that caused the selling that causes people who have profits to want to get out of it and the emotions ramp up and it just gets even more serious and moving to aviation jet blue is notably getting a lift in its stock today after being greeted by analyst after dropping 15 percent before it looks like it's starting to finally look attractive as a growth name what's to catalyst for this reaction here and what's driving their growth. so people like to fly like to fly in particular but what i see the problem with jet blue is even though it's slightly up today on the longer term the chart is very sloppy and overall the transportation sector which includes aviation trains stuff like fed ex all of this right now is slowly trending lower
which again is another recessionary signal. and you know she director of options it's simply trading things so much thank you. a forgery crisis is quietly roiling in the world gold industry gold bars progeny stamp with the logos of major refineries are being inserted into the global market to wander in the. go gold these fakes are harder to detect them previous generation where blocks of cheaper metal were then played with gold this new forgery however is professionally done the gold is real with very high purity levels only the markings are fake without the markings the stamp of a prestigious refinery such gold would be forced into the underground networks are priced at a discount but by faking the marking gold that has been processed in places that were not the excess the wall such as africa venezuela or north korea they can then
be injected into the markets channeling funds and diluting the true supply of gold in the last 3 years bars worth at least 50000000 dollars stamped with the swiss refinery logos have been identified and found in the vaults of j.p. morgan one of the major banks at the heart of the bolian market at least $1000.00 bars have been found and experts fear that there's a lot more in circulation and even more being produced every day these forgeries are sophisticated and today's high gold prices have triggered a boom in the gold mining authorities so far have no clearly is on who's making the bars but it is clear that in this ng gold is quickly spreading into the supply chains worldwide we should really reconsider this gold as a safe haven trade as j.p. morgan cited that face gold could result in losses and to the banks and clients. and finally meatless meat is the latest fast food craze recently there was burger king's impossible whopper and now kiev sees beyond fried chicken made with plant based meat from beyond meats k.f.c.
launched the product at one location in atlanta in atlanta on tuesday and the products sold out of the meat was chicken nuggets and boneless wings and 5 hours customers started to line up at the franchise before 8 am local time and lines of cars stretched for several blocks executives with k.f.c. said they sold as much of the product in those 5 hours as they would usually sell of their popcorn chicken executives added that they are currently looking into the next moves with the product including the possibility of a larger test or a national rollout rollout of the mean. chicken meanwhile in the world of meat full chicken sandwiches fast food chain popeye's louisiana kitchen has been in a chicken sandwich battle with rival chick fil a and bad news for those hoping to wrap their hands around the new pop by sandwich the company has announced that they expect to be out of stock by the end of this month with an inventory that was supposed to last through october that was actually it was such a brilliant player by doing this little influence or battle online between chick
fil a and popeye it's been so much popular in the last couple of days right up and some people have also pointed out maybe it was a mistake busy to start on social media fight when the other guys probably can go viral and we see the social media videos of people at the popeye's going viral we'll see how it plays out exactly it's also cool cause when you have arby's just doing the complete opposite thing with their veggies. they really offer sounds to tastier than these fads that by this time you can catch a boom bust on direct t.v. channel 321 dish network how to 80 or streaming 247 on t.v. the free t.v. ads to 79 more is always said it's up at youtube dot com slash boom bust.
them. and one. but i think when my slides and send it up i get one when there's real buddy. dave both a lot on his own product one of them when i do survive and this one. put them to i don't want that i or i can't listen to me as i knew she was going to that accountable to get out of the i am question game because he already had
a chicken does. a female move out of one of the last young enough but otoh before out of the. show it's the same brawl but old roles just don't hold. any new world view yet to shape out just a bit comes to educate and in the game and equals betrayal. when so many find themselves worlds apart. she's to look for common ground. what politicians do something good. to put themselves on the line to get accepted or rejected. so when you want to be president or injury. or somehow want to.
have to go to beatrice to see what will befall the 3 of them or can't be good. interested always in the waters of the cottage. there should. the british prime minister secures the queen's approval of suspended parliament until mid october in what is being seen as a risky move to block in peace it chances of avoiding a no deal brags that. as the global outcry continues over the fires and golding vast tracks of the amazon rain forest the brazilian government's business practices and ties to washington come under increased scrutiny. and russian journalist a good deal. is released from pretrial detention he spent a year in ukraine in jail.