tv Boom Bust RT July 9, 2019 1:30pm-2:01pm EDT
and former celebrity jeweler new rob moodie and mr modi's own goal. of bank begins its a radical overhaul on monday as it exits its investment banking and trading operations and lets go 20 percent of its workforce the struggling lender is splitting off $74000000000.00 euros of its assets in an attempt to focus and invest its core units and retail banking and european corporate clients the $8300000000.00 restructuring plan is the largest in the bank's history as it intends to cut its risk weighted assets by 40 percent this comes after it had largely lost $1600000000.00 on a muni's investment it bought before the 2008 financial crisis to put that into perspective the loss is roughly quadruple its entire $2800.00 profit previous attempts at bailing out the struggling lender has failed as talks of the german cosmo's bank broke down now plans e. for the lender involves an out it's non-court assets and dumping them into a bad bank silo this strategy has been used previously during the 2008 financial
crisis and allows bank to free up capital that can then be used to bolster off its financial strength dva currently has 40 $3.00 trillion euros in gross derivative notional and they would be hard pressed to ringfence all of that toxic asset into a modest $74000000000.00 euro silo deutsche is the latest bank to fail fall from grace after earlier this year 3 banks on 3 different continents failed indicating that there is a systemic problem and that a new global crisis could be brewing and with more of the latest details just tell you publicize wind down or meltdown is international regular regulatory attorney miles edwards. so miles door to bank right now is arguably europe's biggest investment bank right up there with barclays banking analyst stephan wyler recently said this. when we were in rio maybe facing and the financial crisis of the next years i don't believe it but it's coming it's not for. bank generally is the
overall banking which means that the bank will force all kinds of products over the people usually have their private accounts somewhere to broker it some still there real estate financing or how the financing some of the business it's going. and if you have problems anyways it will be difficult to to do the right decisions in that sector. so now do you think this restructuring is a harbinger of a bigger problem within european banks in general deutsche bank right now is not the only one loaded with trillions of euro's and non-performing bank loans and directed at us and this could actually quickly escalate into a broader european crisis is this restructuring cost cutting measure enough to stabilize the bank or do you think this is just the tip of the iceberg and this is a sign of a bigger problem. i think that it's not going to be helpful to panic i think it's really symptomatic of what's happening with european banks in general and part of the blame on the european union because since 2008 u.s.
banking regulators the european union really has not legislated any major banking reforms or regulatory actions regarding european banks and so now we're in a situation where european banks all of them including deutsche bank are declining words u.s. banks are becoming more profitable and part of that is the fact of the way they're structured so for example the united states 70 percent of investment needs are done through capital markets whereas in europe only 30 percent are done through capital markets so what that says is the united states banking system is healthier because it derives the majority of its income basically from investment related activities rather than lending itself which means a show less assets on their books and they're less sensitive to any sort of interest rate or any other city. 2 ation happening in the economy so you know again
i really believe that with deutsche bank it's really too little too late with them and as you know with deutsche bank since 2016 they've been suffering tremendous regulatory scrutiny in 2016 they paid 40 well they paid $12.00 mil $1000000000.00 fine along with credit suisse for basically selling toxic debt if you move forward to 2017 the federal reserve fund them $41000000000.00 for having an adequate and i money laundering procedures and then also in that same year they pay us regulators $220000000.00 to settle a case regarding the fact that it was alleged that they defrauded governmental and nonprofits by manipulating live bore and other interest rate benchmark so there's
a real crisis of confidence in the market and investors are losing confidence and deutsche bank yeah it's a really remarkable story and you put some important context in there miles and now at this point as part of this restructuring effort they're creating a bad bank where they'll you know sort of scapegoat all of their bad bad assets and so that we've seen other banks try this notably citi group did this in 2009 but it has been seem to be trying to restructure or downsize itself almost every quarter for the past few years will these drastic cuts finally be the end of it all or and will we see even more bloodletting and downsizing perhaps in the next few quarters . i think we're going to continue to see it and what deutsche bank suffers from is really a history of mismanagement and a culture that has made tremendously terrible decisions and what we're seeing now is that analysts on the street including moody's that just recently again
downgraded its fixed income investments we're seeing a situation where there is going to be a continual drop in their share price lack of confidence and again as i said before i think it's going to be too little too late in fact one analysts recently said that its market cap is probably about one 5th of its book value which basically means that there's a question about the assets they even have themselves so i think that deutsche bank will continue to try to do whatever it can do. to stay afloat but you know they have a history as i said of a really poor culture of mismanagement and bad judgment and it's going to take a lot to reverse that and i think that a restructuring is not going to do it alone i think you bring up a really good pie and their market cap has drastically strung the stock has shed more than 40 percent since sewing took over as c.e.o.
15 months ago and right now it's trading at about $7.00 and this traffic decline is somewhat reminiscent of what happened in the early days of the lehman collapse is this bank in a vulnerable position from speculators that could actually jump and short it down to 0 i believe the short interest right now in the stock is currently at about like 5 percent. yeah that's correct i actually view it interesting a lot more like a bear stearns and a lehman because unlike lehman the bank is not in the fall it's not bankrupt they still have some viability but like bear stearns they've made some really terrible decisions which are scaring off institutional and hedge funds themselves and so what's happening is they're shedding people but at the same time they want to promote itself as an organization you can go to that can support your needs other than what it's traditionally done as a business model so what i would say is that the stock will continue to decline but at some point in time like
a bear stearns we may see someone coming in trying to purchase whatever remains of it. international regulatory attorney miles edwards with a masterful explanation thanks so much for your time. thank you very much. time now for a quick break but hang here because when we were turn all the prices are back after ron has responded to what's being seized off the coast. also tawdry horwood somebody trading joins us to sift through the seizure on the seas and later british airways is facing a record fine over data breach molly barrows contributor to american. to check in on the turbulence facing the english airline and as we go to break here are the numbers of the clothes. we.
a. whiting good bit of preview here already in the it seems good to have you know made it seem strange. to be. that. place. i welcome to max kaiser financial survival guide. looking forward to year that's without. yanks this is what happens to pensions in britain. you watch kaiser report. join me every thursday on the alex simon show and i'll be speaking to guests of the world of politics. i'm showbusiness i'll see that.
iranian officials said monday that great britain seizure of an iranian oil tanker was a kid into a robbery i would not be tolerated the iranian tanker was impounded into baltar on july 4th due to an allegation that it was carrying oil to syria which would be in violation of the e.u. sanctions a claim in which the iranian deputy foreign minister. denies. many of us to contrary to what the british government's claim to the destination of the oil tanker was not serious or to the port they have referred to does not have the capacity to host such a tanker the destination was somewhere else it was passing through international waters in the strait of gibraltar so there is no law that allows the british government to stop this tanker and we believe the seizure of the ship is an activity piracy and we demand the rapid release of this tanker. joining us to
discuss the impact of this situation on the oil markets as tabo horwitz of trading so i'm sure the markets must not process this news and moved on by now but what about the prospect of more seizures like this in the future rolling in the oil markets and pushing up risk. well you know i think when you look at the price of oil and you look what's going on and you look at how much we can now pump ourselves and put out and supply that it's really not that big of an ordeal here it may affect brant a little bit but it's not going to affect. oil and i don't think that there's that much of an ordeal i think that iran is looking for a flight right now and i think that's more the case here with some of the actions they've had even with some. there are nuclear talks and other things but again the actual the seizing of the tanker is perfectly fine and i don't see any problem in the markets have not reacted in kank where they're showing the day in the days where they would have been fear and oil would have been much higher 6 than is now
but our oil was barely higher today if at all very interesting so the fundamentals are the market is pretty much flooded this doesn't do much at the surface. now doesn't it really it really doesn't mean a lot because again price always determines and typically in a in a commodity like oil what will usually happen is you will see a big fear bid in the expiring mines or like for example in august all right now from a future standpoint august will be much above the subsequent months behind it right now it's still in perfect formation meaning that the streets are already recognize what's going on and has no fear or no concern right now and on the other side of this just to get a sense of the outer edge of risk for oil markets a blog post at oil price dot com by energy consultant vincent lauerman site it says based on an april 20 teams study by the riyadh based king abdullah petroleum studies and research center so saudi research study in a world without spare capacity in which the strait of hormuz was closed all prices
would have spiked in that scenario above $325.00 per barrel in one does that sound that estimate of $325.00 a barrel sound in the ballpark in the event that conflict were to close the strait of hormuz and to do you think markets are already pricing in perhaps an increased risk of military conflict. oh i don't know 1st of all i don't think 325 dollars is ever realistic i think that's just a big number some may decide you know if you go back to july of 2014 and we had a major scare in oil before we were producing our own oil at this level we only went to 110 i mean the high of oil at all time. and there might have been 160 so again we can look at it and say that it got a double from there but i don't see it and i don't see a real conflict in the strait of hormuz because believe it or not there's going to be either the united states somebody's going to step in and take care of our around in a moment if they decide that they want to to fight and try to depress that issue i
think it's more of a veiled threat so i don't i don't see the rest i think the markets have already accounted for whatever is going to happen there right now knowing that the united states or somebody will step in and take care of iran if they decide that they want to push this a little bit farther down recapping the opec meeting from last week this de-facto opec plus coalition effectively saudi arabia and russia are driving opec supply policy even as opec market power phase as u.s. oil output increases so what's your take on the outcome of this latest round and the prospects for the future. well but it is a worthless organization begin with they have no value they have no power you know if you go back you know 15 years ago yes they had power over the states and they could force the price of oil as we go back into the seventies and eighties when they were really a true control but now the 1st of all they can't keep their word within the group of the group of opec you know they say they're going to they're going to cut down
supplies and meantime they always find a couple of nations that are pumping like crazy anyways so whatever opec says is basically worthless is that it's not worth the paper be printed on nor the words that are spoken to know how to take their from baba and now what's the feeling among your peers you talked about the slowdown in oil demand and the big factor there seems to be the u.s. china trade war so what's the feeling among you and your peers about a resolution of that coming anytime soon who's got the most to lose from either a resolution come soon or a prolonged standoff in that fight. and why the of the markets say that there's going to be a resolution sooner rather than later i think china is going to be forced i know that they have really talked about they want to play the long game and they can outwait everything but they're getting it there's a lot of damage being done in china right now based on the sanctions and the tears and things are going on and they can only lower the winds so much to account for that so i think that there will be a deal sooner than later i think that you're going to see the taken care of and i
think really what we're looking at now is for a deal that both presidents can come out and say we did our job we did a good job and we both came out winners and it's fact that matter is is that of china would just wake up and basically smell the coffee and make a fair deal then we would simply have a fair deal and everybody would benefit in the long run but the markets themselves you know were and were near record highs so they're not concerned right now about the trade deal and the grain markets would be one of the big things that are affected are not all getting hurt either based on this they're only her base that right now on oversupply but they're still prices are so much higher than when this all started but then the equities market as effectively rally in something because of the anticipation that we're going to be lowering interest rates so one could argue that right now it's actually an artificial environment that the fed reserve has paid at. a time high state strategy that now they're trading thank you so much for your time. thank you so much every day. argentine officials say the 4 nation mercosur trade block fresh off successful trade negotiations go seasons with
the european union seems poised to pursue a trade deal with the united states the argentine foreign minister said last week that mercosur would move quickly to negotiate deals with the u.s. as well as singapore and south korea argentine president marie sumac relator confirmed his ministers claim on plans for an agreement with the u.s. and china and canada to the target list published reports seem to confirm that u.s. trade talks with argentina began in march though mr america's chief of staff notably characterized the trade deal with the us as a cold war a long term project and while the minister said brazilian an argentine officials are engaging in the talks it was still not clear from reports if the deal would include the other 2 mercosur nations a part of why and or why. south korea them president and on monday warned that ongoing trade tensions between south korea and japan could hurt the global semiconductor and smartphone display market while president moon hopes for
a diplomatic solution to disputes between the 2 nations seoul is open to enacting countermeasures if needed. but if south korean companies begin experience you know actual damages our government would have you no choice but to have an unnecessary response judgeable i hope things don't come to that region we urge japan to measure and call for bilateral discussions for the issues are no good because you don't follow the japanese restrictions on exporting 3 minerals crucial in the manufacturing of electronics to south korea officially went into effect on july 4th japanese exports are now required to receive government approval to ship them to korea a process which can take 90 days this restriction stand to cripple 3 of south korea's 4 most profitable companies including samsung l.g. and s.k. . british airways is facing
a record fine of $183000000.00 pounds or nearly $230000000.00 after compromise the company's website and stole the personal information of about $500000.00 customers we will surely journalist a contributor to america's lawyer is here with more on the fine 1st of all lowly why was british airways hit with such a large bond over this breach. yeah i think a lot of people were surprised by the size of that fine and it's the result of a new law that went into effect last year the general data protection regulation our g.d.p. our well that law is designed to hold businesses accountable for the personal invaluable information that they collect from people in june of last year hackers diverted british airways customers to a fraudulent website and harvested the personal information of about 500000 customers including their name addresses some credit card information among other things and the breach was blamed on poor internet security will british authorities say that is no excuse and businesses need to make every effort to protect that it
from ation the people who trusted them because having it stolen is more than just an inconvenience as you know these days well that fine was levied by the information commissioner's office or i.c.a.o. and that's a government watchdog group that holds the public's information right and the i.c.a.o. said it was the biggest penalty it handed out and it's the 1st to be made public all under these new rules from the g.d.p. are so will we see more big fines like this if there are future data breach as. it is definitely likely so the g.d.p. our law has been described as the biggest shake up to data privacy in about 20 years it's now mandatory because of that law to report data security breaches to the information commissioner it also increased the maximum penalty to 4 percent over turnover so in this. case the be a penalty amounts to 1.5 percent of its worldwide turnover in 2017 which is actually a lot less than the possible maximum fine could have been so until now the biggest penalty was 500000 or about 625000000 imposed on facebook or 500000 i should say
imposed on facebook for its role in the cam bridge analytical data scandal and that was the maximum allowed under the old data protection rules that applied before the g.d.p. or law took effect so the message is clear out of this new law that corporations are expected to treat customers data with the utmost care or there could potentially be a very big penalty to pay. and what is the company's what is british airways official reaction to the fine and the findings of yeah so officially they're saying they are surprised and disappointed that comes from alex cruz british airways chairman and chief executive so in the i.c. his initial finding they were not happy about it at all but he said they responded quickly to the theft they apologized to their customers they cooperated with the investigation and british airways also said it found no evidence that there was any fraud linked to those accounts that were connected to the data breach although some customers have said otherwise that they did experience fraud as
a result of that breach so be a has a little under a month to appeal this decision and the company leaders say they intend to defend the airline vehemently including making appeals if that is necessary so they're shocked like a lot of people but it will be interesting to see if it's upheld so now all of the government do with the fine money. well this penalty is divided up between the other european data authorities who are implementing similar rules and while the money that comes to the i.c.a.o. goes directly to that treasury it will be up to individuals who feel like they were affected by that breach to claim money from british airways which provided no information on whether any compensation had actually been paid under that breach either so under these regulations authorities in the european union whose residents have been affected will also have the chance to comment on the i.c.'s findings so this is just part of a bigger picture across europe including britain to hold companies accountable for all that valuable personal information they store of us just for the pleasure of
doing business on their website. so how can british airways actually prevent this from happening in the future this was essentially a phishing attack so british airways had no knowledge that an alternate web site was in place. well they have said that they have since made steps to improve security and that these breaches are going to be harder to do so obviously the old time will tell will find out if that's going to be the case but they say they have made progress in preventing future attacks like that and i think that's the goal of these heavy farai is that essentially to get these companies who perhaps were a little lax or maybe had let a few things fall through the crevices make those necessary steps to protect their customers because it's more than just an inconvenience when their data is lost or stolen or used for nefarious purposes. wally barrows contributor at america's lawyer thanks for your time. thanks so much guys have a great one. that's it for this time you can catch on direct t.v.
channel 321 dish network. or streaming 247 on t.v. the free t.v. ad. or as always it is up at youtube dot com slash start to see you next time. during the great depression. mr remember there was. never. there was it was bad you know much worse day but there was an expectation that things were going to get better. there was a real sense of hope. there isn't today to do you see america i wish to turn principles of concentration of wealth and power. reduce democracy. engineer election manufacture. another principle according to.
one set of rules for the rich. that's what happens when you put her into the. roof we'll switch is dedicated to increasing power for chills just as you'd expect one of the most influential intellectuals of our time speaks about the modern civilization of america. if you will not obey the voice of the lord your god will be careful to do all these months and. then all these courses shall come upon you and overtake you. and then the white people the stone prophet you. must pretend to black people if they get rid of whites only problems will go away. with and remove the. presence of the physical.
people being tortured to death expression the elderly people in the dome. not been the case why of course will find themselves affected by credit and. point to one defect scenes in greens it's all sweats and lots of. what are you going to have for dinner true they feel they need to be asking for a. bad cold flu civil war in south africa easy never to. profit from was there and not be in the total viewer and to date.
and you try and be professional you try and leave it outside the door you try and put it in the compartment. and so you can forget about it but little by little. these little whispers come and for me it was actually putting some ice into my wife's glass of gin and tonic and the song on the sound. reminded me of how we called in bali which was with banks of supermarkets i. think.
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