tv Boom Bust RT October 1, 2020 3:30am-4:01am EDT
oh no buyers dropping more than 30 percent annually straight ahead we analyze the extreme drop and the state of the real economy here in the u.s. plus big tech is seeing an influx of anti-trust cases as tech tensions continue to rise across the globe later on in the show where to take a look at the cases and what's at stake moving forward with a packed show today so let's dive right in. and we lead the program with the latest economic data out of the united states the commerce department reported wednesday gross domestic product fell by a record 31.4 percent in the 2nd quarter of 2020 now the number was a slightly better than the 31.7 percent decline projected in august the contraction was more than triple that of the previous record holder of 10 percent in the 1st quarter of 1958 now economists expect substantial gains in the 3rd quarter as millions of americans have gone back to work and businesses have started to open their doors to customers once again and on that same no private sector companies
added $749000.00 jobs in the month of september according to payroll firm a.d.p. a.d.p. reported the sectors that gained the most jobs were trade transportation and utilities followed by manufacturing than leisure and hospitality which has just been decimated by the cove in 1000 pandemic and the health and education services sector so what does this all mean for the overall state of the economy and the prospects of a recovery let's go ahead and get some expert analysis from professor richard wolfe author of the sickness is the system and capitalism fails to save us from pandemics or itself and boom bust co-host christi i thank you both for being here professor wolf i want to start with you many people still believe that this rebound is still intact and that the 3rd and 4th quarter will swing back and expectations are that the economy will expand at an annual rate of 30 percent as businesses have reopened and millions of people have gone back to work as we just mentioned now do you see this as realistic given the current recovery tragic. sorry. no i don't i think
there's you're going off a lot of wishful thinking is it possible yes or no modern 15 questions were answered with good numbers there is they are our grandchildren magnet which has been really seen at least 3 of affable always lean he. thinks that's what we have to look at how damaging is it to our you with cities and schools how much of the education one thing destroyed or cut back or reduced what is the morning term effect on supply lines and all the older things that make an economy work we have seen tremendous damage done and we're only at the beginning of sorting out what the effects are and so traditions that we're all going to have a robust a recovery that really is the election focus dream. and of course
those numbers may say that we saw again but whether we're really feeling it on main street as we've talked about that main street wall street dichotomy here many times over is certainly to be seen kristie the market was up substantially wednesday as lawmakers tried once more to pass a crowbar as a deal after weeks of stalemate but markets fell drastically as house speaker nancy pelosi and treasury secretary statement failed to come to an agreement although both sides said they will continue to work together and then they kind of rebounded just a little bit before close what are you taking away from market movement on our wednesday afternoon well i think we talked about this numerous time the twin myself band and a host of other guests that we had on the show but none of us and i mean none of us believe that a deal would actually get done in the 11th hour the market was just extremely optimistic today something that something could get done and stocks were roaring up today and that included economic sensitive names such as airlines industrials banks cruise lines they were all home for that something would get done and that's what it was this was a whole. rally the money this was
a very misplaced hope rally and apparently stocks are bouncing a little bit again the hope that talks will now continue and craft a package that would eventually get passed in both chambers of congress but currently as it stands right now the senate and the house are quote very very far apart making it clear that the senate will not come up to the 2.2 trillion mark so morgan stanley as well as other big banks they've also cited that additional stimulus package just before the end of the year is unlikely to be delivered and there can be expected to be more fiscal gridlocks to come with a divided government so we can definitely expect as well professor wolf calls political theater to come as we get more finger pointing between democrats and republicans over who is responsible for this lack of progress over a very much needed stimulus bill professor wolf who we just talked about those job numbers put out by a.d.p. i mean we're looking at in the last 24 hours companies like disney they laid off $28000.00 employees across its parks royal dutch it cut between $7.90 jobs and down
reducing its workforce by 6 percent a couple that with what we just talked about that stimulus package without a new stimulus package the airline industry is saying at least 30000 jobs are in jeopardy is a bailout necessary to keep this economy moving forward even at the slow pace that you just mentioned or is that not going to do anything to help us out here. well you know the ironic answer to your good question is no we're already in an on ruling continuous. rimini an example of this year the federal reserve has begun not only printing money which it was that we before and making it available to banks which was the week before the federal reserve is now directly lending to corporations it's applying corporate bonds in the market directly indirectly what this means is that it requires peroration in america is now on life support from the government and the problem that corporation has free cheap money interest rates
are near 0 is the way to solve the problem which is why corporations are loading up on debt at levels we have never seen in american history that's the slow moving underlying chiller of any long term recovery that has to be factored in you can't look at her month the month of statistics your example of disney's a perfect example they were waiting till the last minute opening something would happen to get people back in the a theme parks it's not going to happen and so now you're going to see the staggered unemployment because you don't want to do it all at once that will only do whatever a month's among the number of unemployed might seem to suggest and professor wolf i have to ask your opinion on this because a tuesday on the show we had 2 different analysts give us 2 different distinct perspectives on this next question you know when we talk about they've been talked about a lot because the the they because just decimated by the pandemic do you think that there should be another bailout for airlines or should we let them fail if they
have to. well i think at the very least we ought to take a long hard look at our airline industry the kinds of duplications the kinds of cold sculptured markets that are not working before we throw another stimulus at all bunch of the airlines that have you know demand and. very little likelihood of the man coming down but all right a consolidation a mixture of governmental and private management the crisis otherwise you're just continuing this now group test situation where yet another industry is on perpetual life of what you can state each grant is worth a few months but as the months mount up it's beginning could be an endless subsidy and let's remember when you give money to the airline industry you're giving it to the board of directors of very small number of people who are going to be using it
in what andrew way they speak big they're taking into account the long term decline of their industry it's bizarre that the rest of us and the public won't do to say it and it's interesting because we don't mention it as much as we did at the beginning of the pandemic but we're still possibly a year out before things return to normal especially within the airline industry so you have to keep that in my chris i want to add on one last story before we go here the chinese r. and b. is on pace for its strongest month against the dollar since 2008 what's behind the strength. well that's basically the strength of the investors investors have boosted both china stock and bond market as yields on the 10 year recently top 3 percent which is about $230.00 bits over the comparable u.s. yields so more and more people are flowing money and funds into china so the chinese government has previously purposely kept its currency weak in order to drive up export and trade but recently both on shore and the off shore on shore and
the army has strengthened significantly in the 3rd quarter suggesting that the government is now more willing to allow market forces instead to drive up the currency so the strength of the chinese exports over the past 3 months have actually kept pace despite the strengthening of the r. and b. so that currency value has not hurt demand quite yet so furthermore china has also reported that the authorities plan to reduce barriers to the r. and b. internationally in an effort to promote and integrate into the global financial system so now we've talked about this before that china's strict currency control is one of the main reason why foreign investors don't flock to the r. and b. and why chinese assets aren't as popular with the foreign investors and currency is one of the most valuable assets that the government has control over and they are loath to give that up but they're finding that by actually loosening their grip on the currency regardless of whether the r. and b. exchange is actually free floating in the future or not these reform steps could be enough to untap an avalanche of overseas investment flowing into china whereby all
strengthen both the chinese economy and its position as a rising power richard wolffe host of economic up there co-host christiane thank you for that expert analysis. i. earlier data from the madonna crowbars vaccine trials appears to show that the. drug is safe in older adults now a small study published in the new england journal of medicine found the vaccine produced virus neutralizing antibodies in people over 56 years old an age group that is prone to severe cold in 1000 symptoms study was an extension of bitterness phase one safety trial conducted earlier this year results were similar to those in younger participants one of the study's lead researchers from emory university in atlanta dr evan anderson told reuters the findings are reassuring because of munity
tends to weaken with age but there is part of operation warp speed and one of 11 companies in the final stages of phase 3 trials the last step required before vaccines can be approved for widespread use company shares spiked as much as 4 percent on the news wednesday. so with this in mind let's take another look at the trends and spread of the virus globally with r t correspondent sites have a day or so where are we when the you know brand another day just more and more increases and right now close to $35000000.00 a globally recovery rate scale at around 75 percent that's $1000000.00 and counting now just in the u.s. more than $7400000.00 confirmed cases deaths asar passing 211000 now staying on the u.s. let's take a look at the daily new case and deaths for tuesday which were $43478.00
now that's a 13 percent increase compared to last week down 2 percent from yesterday but still an increase from the previous week and. 918 were reported yesterday a 17 percent decrease from the numbers we saw last week now nationwide though we're still so although the number of the deaths is going down nationwide we're still seeing a decrease in still in dad but several states. are still doing well now these states have had the highest growth in. reported deaths over the last 14 days here and take a look you know some states like alaska seen a 400 percent increase in deaths compared to last week north dakota 187 percent music 143 percent south dakota and.
91 percent and then you have states like missouri and wisconsin didn't have such a high percentage of deaths but the highest number of 1000 hospitalizations on record and obviously this is not just unique to the u.s. because in europe they're now seeing a 2nd wave of the pandemic and it's really taken a few countries by storm in fact several countries are now reporting more in daily cases than they did during the beginning of the pandemic back in march let's take a look at specifically i want to take a look at spain and france because there are both saying you'll see that stores the end us had 10 or 29th you see the numbers keep going higher and higher the next one is of france france is also seeing a huge jump in numbers so obviously the good news is that they're all role death
rate in europe though is a lot lower so there are higher numbers could also just be contributed to more people being tested than before brant and we just talked about madonna's in their vaccine but are we any closer to actually getting a back seat approved well like you said there are in there are large scale face 3 trial and of course that's the final stage of her seeking mergence the authorization or approval so we'll know really soon on were during a down there is pfizer we're concious seeing in all media appearances and talks about investors their chief conflict being. telling everyone that they'll have a result a report by of their effectiveness of their vaccine by october so we'll know very soon maybe either of those vaccines are going to be effective and not just effective but actually a vailable an n r a large scale for consumers brant arky correspondent cites editor thank you for keeping us up to date. time now for a quick break but hey here because when we return big time is seeing an influx of
a terrorist cases as tech tensions continue to rise across the globe later on we take a look at the cases what's at stake moving forward as we go to break through the numbers of the. killed. my name it sucks to see. this jack see what i don't see to show. up at the border you know if you. want to know we've got to get it down to cause you need to move. you know. the speech
and i use that down 6 to make it a day easier and also teach school on strategies to people. who. you know. who these clubs people who close the schools who comes during his child to see a music that. i love who dies because he makes me copy i love he dies because he makes me copy plane to fly. and when you go to. the beyond i said because it's back of my mind i would love to darn close. i doubt. there are loads of birds or head.
welcome back the e.u. may be instituting a new crackdown on tech giants like google facebook amazon and apple new n.h.s. rules would mean the tech giants cannot favor their own services or force users to sign up for bundles of services that crush competition now according to reuters under draft language in the agreement gate keepers such as companies with bottle neck power or strategic market status will not be allowed to use data collected on their platforms to target users unless this data is shared with rivals there's a lot to talk about here so joining us now to discuss his boom bust co-host investigative journalist ben swan and international regulatory attorney myles edwards thank you both for being here today thank you ben i want to start with you this is been an issue for some time but many of these proposed regulations from the e.u. come from come from complaints made by google's actual rivals what are those complaints
yeah it's kind of been a long time coming if you will so essentially the way it works is the e.u. has a system that we don't have here in the united states as part of a settlement that google made with the e.u. it's something called choice stream which every quarter google essentially does an auction that lets android users with their mobiles decide what their default search engines will be and they give them essentially 4 choices what this what they choose from essentially this was part of a settlement that google had with the e.u. with this 5000000000 dollars dollar settlement but the problem is is that you have search engines like duck that go that say in fact that google is has not gotten better they have not resolved the antitrust issues in fact this is what doug said quote the current remedy is not a remedy at all it is fundamentally rigged by google to benefit google they say that the e.u. has been waiting for data in order to prove that google is again reading these practices in order to favor themselves duck that goes says now that that data is available they have sent over their data to the. there's other companies as well in
germany there's one called it which is essentially a search engine where every time you use it they plant a tree someplace they don't make much money and so if you don't have a big advertising budget you can pay to play scheme that google has set up where you essentially pay google even to be a part of this screen choice auction if you will so the whole thing is a mess it was supposed to make things cleaner and it doesn't seem to have done that so it's essentially saying that google will allow you to pay us then to the highest better than you could become the search engine correct them. well it is sort of they say you have to pay us to be in the sweepstakes and then users get to ultimately decide if you're going to be on their phone but what these companies say is that's not how it works that you have to have a lot of money in order to just be part of the sweepstakes in the 1st place so it doesn't create choice and it's rigged by google in order to favor google that's when they're saying miles now google's already paid the $5000000000.00 just fine
europe over anti-competitive practices that ben just mentioned but critics actually say this is not stop google's behavior at all just as ben said what do you make of this whole situation you know and i think the critics are absolutely correct to me when we look at it there was a number of. whereby google violated the european union's hand i trust laws and the major one was with the licensing term agreements for both the customers and the manufacturers so with the manufacturers they were charging them up to 40 euros a phone just to license google and preventing them from using any other search engines and for the customers they were signing these very restricted agreements where they could not download or use any browser or pay system other than the one provided by google so with google they have such a large market share internationally and especially in europe that i think they consider this just the cost of doing business and now it's interesting that you
mention all of those points because there's also reports that china is now preparing to launch its own probe into alphabet claiming that the company has leveraged its dominance of the android mobile operating system to stifle competition competition but is this a response to the u.s. crackdown on wall way or is there more to it. i think it's both i think yes in part it is the response to while away and of course the issue that wall weighs had where they cannot use the android operating system so they've created their own operating system but i think it's more than that again it is an issue of the fact that everywhere google goes they essentially break the rules and as miles just said it's the cost of doing business google knows that it and it can continually break rules here in the united states it can break rules across europe it can break rules in asia anywhere it once too and essentially they'll just pay what they need to pay because they make so much money doing this breaking the rules that is just a fraction of what they could mean it's essentially the same as saying if you break
into my house you take everything i've got i'm going to charge you a $50.00 fine mr well then sure that's fine and you can give me your final give me about 15 i'll take the rest that's what google is doing they're essentially ripping off consumers and users in nations all around the world and then they're paying very small fines comparatively over time in order to continue the same practices it is not until these become criminal charges that i think google will stop and it's interesting because we saw that same situation with facebook where they basically had a whole whole coffer filled with billions of dollars because they were ready to pay the fines they just set it aside it's part of their budget i mean it's ridiculous miles what you make of the situation here in china. i mean it is incredibly ironic because most if not all of google services are prohibited in china so this is a very political situation you have the government controlled military run while way petitioning the state committee on and i trust about google but google services
are not available because most of the manufacturers use really an open source type of. software platform so to me it's really very political in nature and has less to do with any of the facts and you wouldn't see and just on a follow up to that miles you don't anticipate google would be paying any fines even if they were levied in china because like you said all of their products are actually banned there for the most part anyway right. right because what could be the remedy that you can't do business in china because that's done already and if there was a fine and they needed to pay it as ben said before they would pay it but again it's i think it's really primarily a nonevent primarily because wall way is the pariah of i.t. worldwide they've been banned including in the united states so they're looking out a way to get exposure and possibly try to make inroads elsewhere. and there's
a whole discussion we could have about that miles for sure but i want to give you one last go before the program is over africa games continues its battle with apple over the removal of fortnight from its app store monday judge of ongoing dollars rogers expressed skepticism about epix arguments particularly its claim that it did not pose a security threat to apple because it is a well established company and partner is epic's argument here with apple falling apart because this is all about app store fees and kind of a doowop way between google and apple correct and you're right in fact if fell apart from the beginning i mean it was doomed to fail because what this is is this is not an antitrust case it's a breach of contract case what epic. did was created their own pay system which had none of the security protocols that the apple system did clearly to avoid paying them the 30 percent and the judge actually i believe screamed at their attorneys and said listen like you lied this is an omission has nothing to do
with and i trust you are being noncompetitive it happens with the fact that you breached the contract you did not follow the terms and you don't want to pay apple their share so i think it's a case which is really doom i mean $1.00 interesting point is there is now the coalition for apps fairness which is basically a fortnight hinge and tender and they've come together in kind of a loose coalition fight these types of situations but i think it's a very hard road and i don't see them are they only get all gotta go international regulatory attorney miles add words and boom bust co-host ben swan thank you both for your time thank you. and that's it for this time you can catch us on portable dot t.v. we'll see you next time. i
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