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tv   Boom Bust  RT  February 4, 2020 11:30pm-12:01am EST

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we're told it's a total meltdown confusion consumes iowa as officials struggle to report voting was only part of the botched i will caucus is the ultimate political metaphor of our time. and welcome to boom bust the one business show you can't afford to miss i'm been one and i'm to see i'm watching 10 coming up. i have continued to have the facts on the market play us stock market fund jump on tuesday while take a loved one it was
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a very good day if i can in fact i'm fast in 2013 so what's causing you like a carmaker tot he felt so high and so much to talk about problems with the iowa caucus and the ad at the center of it is actually scheduled to be used again in a few weeks we're going to break down the tech that let so many people down and tell you what's in store for so much to get through on this very busy day so let's get started. and we begin with a huge rally for the stock market today as the dow jones jump 444 points to open the day this as the markets are rebounding from the coronavirus scare and that's not 1 to say that things with the virus are under control in fact here is a look at the very latest numbers because the coronavirus has now exceeded 20000 cases in china the number of deaths is now up to 425 meanwhile chinese officials are optimistic that the efforts they have made to quarantine cities and roughly what 60000000 people within those cities will pay off the deputy director for
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medical affairs for china says that 74 percent of the corona virus deaths which is about $313.00 of them are in the city of the epicenter of the virus but those deaths could be attributed. part 2 a lack of hospital beds in the early days of the virus spread meanwhile singapore has confirmed 6 new cases of corona virus including its 1st local transmission but health officials there say there is no evidence yet of widespread transmission in singapore because the markets in manufacturing those are still being affected correct yes multinationals are still struggling as production has basically halted completely in china apple has announced that it has temporarily shut down all stores in china which means that it is losing approximately $850000000.00 a sales per week delivery and production will also include delays and analysts estimate that shipments will get cut by 10 percent in q one airlines are also suspending flights to and from china one of the busiest and most profitable routes delta america and alliance united airlines cathay dragon all nippon airways korea
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air and more they have canceled thousands and thousands of flights low cost carriers are getting hit the most in asia pacific areas are expected to lose more than $6000000000.00 in revenue in the 1st half of 2020 alone so you can see that any sort of interruption in china's economy will have a severe impact on the health of any major multinational that dominate the s. and p. $500.00 especially if we consider the fact that china's g.d.p. is now $14.00 trillion dollars or 16 percent of the total global g.d.p. so if that's the case then why are markets worldwide rallying when as ben just point out more cases of the virus have been reported and more deaths have occurred . well let's just call it a good old fashioned market intervention china central bank stepped in to provide more stimulus for the economy the bank announced that it could cut its key lending rates and bank was a requirement ratios in the coming weeks in order to support economic growth the p.b.'s c. also injected yet another 400000000000 r.n.b.
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in liquidity on top of the one trillion r. and b. it already did on monday now this stimulus is meant to make up lost ground from the virus outbreak in order to prevent 1st quarter g.d.p. from falling too sharply beijing is now responding aggressively with both fiscal and monetary stimulus to get growth back on track and stage and industrial sector led recovery know that this is the largest single day money injection since january 20th $1000.00 which halted the entire market sell off the shanghai composite had its confidence restored temporarily at least and climbed 1.3 percent following the crash on monday securities regulators also limited short selling and stopped mutual fund managers from selling shares unless a face redemption now outside of china the strong government action lifted the european equity markets who grew increasingly optimistic about china's chances of staging a fast recovery they catch and the dax come 1.3 and 1.2 percent respectively and now this brings us back over to north america where the markets continues rally
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recovering from the steep sell off last week as it took cues from china and are more hopeful in the strength of the few that sees to stage a nationwide recovery the danger of that of course being if this outbreak lasts longer than one quarter or if the recovery is not as strong as anticipated. and to give us a macro view on the effects of the coronavirus we welcome marshall our back market analyst at levi research institute so 1st of all as equities worldwide are bouncing the oil markets are struggling to find some sort of equilibrium here crude oil prices fell to their lowest in more than a year and less are now expecting a response from opec and show producers to cut supply prices have officially slid into. air market territory now so what does the global outlook look like now. well. 2 look looking a little bit dodgy beforehand in the sense that you know china had already been experiencing problems that trade shock related problems last year it was trying to
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overcome that through stimulus europe was already slowing down the us was the one island of comparative prosperity and this virus certainly will not help it could well undermine the stimulus measures that the chinese government had undertaken near the end of last year which were starting to take effect so far of the data i've looked at i do some work for a canadian data collection company called corporate interim tow and they monitor this on a daily basis and so far they have not seen noticeable deterioration but again it's very early stages and we are monitoring the effects of the corona virus on a day to day basis you know you mention the us well here in the u.s. oil and gas bankruptcies are also rising as low crude prices caused a record number of energy companies to fold in 2019 so how low do you think prices
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are going to have to get to see kind of mass bankruptcies form a mid large cap in the player. well you'll start seeing the lows when you start seeing a massive bankruptcies and as you say been sustained by these relatively unstable financings from from wall street and they've actually. perpetuated. drilling long well beyond what would be normally economically sustainable prices and that's been going on for a long long time but the other feature if you like a lot of this is related to hydraulic fracture fracturing or fracking is weak popular recall it and and the issue is that. you know when you 1st of that these whales have a very very high output in the in the initial stages and then the they tend to deplete very rapidly so you combine the rapid depletions with a unstable financing structure and you have the makings for a real financial calamity in the oil patch in the in the u.s.
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companies that kind of leverage to the hilt right now so now let's talk about the broader market we've always been very critical of government intervention in the markets in the u.s. whether it's in the rebuild markets that are still out of control right now to these permanent open market operations that are in effect so they do nothing more than to basically prop up the market but it seems like overnight china also did the same thing and injected yet another round of liquidity to build a floor and restore confidence in the market so is this kind of a good thing that a flash crash was potentially avoided and confidence was we stored or is this further instilling a bad habit for the market that the central bank will always step in and bail it out whenever things get bad. you know i think it's the latter i mean look at some point you will get a major pullback in the markets and you know but unfortunately markets have become addicted to cheap liquidity and you know when these activities of the federal reserve started i jokingly said boy it's
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a good thing that we've stopped doing things like we so it does seem that you know we've got this rather unstable librium whereby if the markets show any signs of crashing or crash dynamics forming then the central banks to step in and this in turn. moral hazard kind of behavior in the marketplace in the end it looks to me like in the u.s. in particular we're seeing signs of a moral hazard which is usually a very problematic development that occurs right before you get a crash so i personally am very very concerned about it yeah kind of playing off of that you know this liquidity injection called the market kind of mid freefall out of the posit fell 3 percent. balance that up to end up 1.3 percent it's the 2nd time the p.b. o.c. is that it this week as you just said this is not a sustainable solution if the market starts to roll over again say tomorrow with a p.b.'s c. be there to catch it again and at what point do you have to let the market correct
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itself. well i mean it's not even a question of letting the markets correct themselves at some point they will lose control of that so that's the real issue i mean that i think once you get these dynamics coming into play i mean if you look back at in 2008 for example you had the federal reserve cut interest rates very very aggressively throat the spring of 2008 i think. $400.00 basis points off the interest rate structure but you know by the time we got to september we had you know crash dynamics fully in place and that's the problem that once it starts you know the the there's very little the central banks can do to rest it so and on top of that you've got a very unstable credit structure underneath that you've got a huge amount of private sector debt and i don't think the truth be told that we were really resolved structurally the problems that we experienced in 2008 we sort of slipped under the what that under the rug and deferred them for for time so i
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think this does create a very problematic kind of situation for capital markets going forward while i they're going to be on china once again tomorrow to see how they open and whether or not there's going to be another drop marshall our back market analysts and let me research thank you so much for your time. thanks for having me. or both while way n.z. t.-e. are asking the f.c.c. to not move forward with the designation that claims that both companies are threats to u.s. national security get november we told you that the f.c.c. had voted 50 to initially designate walk away and z t e as. national security risks it was a movement to block both companies from having access to an $8500000000.00 government fund the purchase telecom equipment for rural communities while way claims that the f.c.c. is action was quote designed to implement a campaign by certain government officials including members of congress in order
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to single out while way for burdensome and stigmatizing restrictions saying quote well meanwhile z.t. is asking the f.c.c. to take additional time to assess enhanced means that it has made adding that quote z.t. has spent hundreds of millions of dollars to implement a compliance program relating to u.s. export control compliance regulations quote in the november vote by the way the f.c.c. also proposed requiring all u.s. carriers to remove and replace equipment from both while way and z t from their existing networks meanwhile vodacom is set to launch 5 g. services in south africa later this year that's things to a roaming agreement that the company has reached with liquid telecom so liquid announced last month that it was building the whole cell 5 g. network allowing others to roam on its network vota com which is majority owned by britain's vodafone says it will manage the 5 g. networks on behalf of liquid but did not say exactly when or where that 5 g. service would be available and going back to that issue with the f.c.c.
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and specifically while wayne's e.t.e. it's very political move again as we've talked about because there's no real evidence that these carriers wall ways of phone companies e.t.f. the phone company have any kind of back doors actually built into their services but what it does do is it denies both weiwei and access to that $8500000000.00 fund which telecom companies rely on heavily in order to essentially subsidize in rural communities yeah actually hinders the competitiveness of the market and way is now arguing that this entire move is actually unconstitutional so we'll see how we end up there time now for our quick pas but stay there because just on the other side of the break they get their take has in fact the fast since 1013 what's causing the electric car maker stuff to go. and so much to talk about with the problems of the iowa caucus in the app at the center of it it was actually scheduled to be used again in just a few weeks but that's now been changed some breaking news on that front we'll tell you all about it and as we go to break here are the numbers at the close.
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i walk through the streets of moscow now blood 100 people i was found 8 of them would have the changes of leukemia in the blood that they don't have leukemia because in order for them that leukemia they need the d.n.a. changes they also need an environment that's receptive and one of the biggest areas of growth in medicine in the future is be targeting veyron changing you so the cancer doesn't want to. thank you because if
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you pump the. shells around watch this video and they're tracking this tiny little wire we don't need a crate with him he will just. freaking out and he won't let us bring him anywhere near. breeding dogs or caged in inhumane conditions on puppies i mean 67 years you know they've been locked up in cages outside you see no protection from the weather the heat you know the cold air the rain the snow the funder nothing they have no protection. look at you. to get to kids. across the u.s. crude puppy mills are supported. most of the poppies that are coming from these large scale factory farming operations are. at stores even a good business is a really good. it's been a shocking amount of the organized opposition to adverts to increase the standards
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of care for dogs in commercial breeding so many most of that opposition is coming from huge agricultural groups and industries. to deal with jobs. welcome back the justice department's antitrust of course one officer has now recused himself from the department's investigation into whether alphabet the parent company of google has been unlawfully suppressing competition assistant attorney general mcindoe rai he may head had worked for google and had them as a client years ago when he advised the search giant as it sought approval from the f.t.c. to buy internet ad firm double click the justice department says that the current antitrust probe progressed and as it did realize that he needed to recuse himself of course for months there have been calls for direct him to recuse himself
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including from massachusetts senator elizabeth warren who is also running for president joining us now to discuss is the editorial director of the american institute for economic research jeffrey tucker himself. took a long time to step down here i mean he really only recused himself as the justice department started to really focus on the doubleclick acquisition which arguably you could look at that and say that became the biggest piece in this antitrust puzzle correct. yeah that's exactly right and he had to recuse himself i mean i guess nobody actually once did this because then the problem with this kind of public announcements is that you're revealing to everybody that these antitrust actions are inherently political and that there's a self interest on the part of government officials in in them so yeah there's a revolving door between private enterprise and government bureaucracies so just having to make this announcement just sort of underscores that and undermines public confidence and then to trust which is
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a good thing actually because there's no end to trust action on the part of the justice department that isn't already kind of tainted with these sort of actions and that's certainly true in the case of this google action yeah and in his case there were teams case i mean he wasn't just someone working at the justice department he is the chief antitrust investigator what's interesting is that the attorney general himself bill barr actually has brought in separate antitrust litigators into his office separate from these other areas so google could be facing out of an interesting moment where they face action from parts of the justice department that they haven't had to deal with in the past as i could possibly throw a wrench and how they proceed. i suppose you know all these things are battles between interest groups you know it's it's google versus google's competition i mean that's what it's all about and the government machinery there is just there to i don't know how you say like like the resolve the fight between the 2 and pick the
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largest the deepest pockets on behalf of the biggest complaints you know that's that's basically what it's all about i mean look for about a century we've pretended as of trust is backed by some sort of science you imagine you know economists sitting there with the models trying to figure out of this truly competitive this is sheer nonsense it's all about who's paying who who's supposed bring breezed by home who has the you know the largest stakes and who's paying off whom and that's what's really behind. every one of these actually trust actions and this is going to be no different i mean if google is pillaged and gets broken up by the justice department it will be on behalf of its competition and i can promise you if you look deep enough you will find the payola you know behind it and the officials who are getting the money so this this recuse meant by the d.o.j. official is nice and cause medically beautiful we pretend as if we have a good government is just nonsense somebody is getting paid by somebody no matter
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what happens angle both certainly greased a lot of wheels along the way and speaking out we're learning that this week for the very 1st time they had just how much ad revenue than you tube is pulling in from pre world google reports that you tube and on an annual basis generated 15000000000 dollars last year and contributed roughly 10 percent to all of google's revenue so that's about one 5th of facebook's revenue how do these kinds of numbers impact anti-trust investigations. we're going to really matter and i tell you what if you look at these numbers 1st of all they're slightly lower than some of the most exaggerated expectations but they're still astonishing i mean i remember the days when when when you tube was shelling out the big bucks for overages on its on the server equipment that sort of thing and people were asking the question how is this crazy free service ever going to make money you know the sort of in the late ninety's so the fact that it's so lucrative right now is actually tremendously exciting and to me is a great illustration of how the market always out where it's all the intellectuals
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. but think about these numbers i mean so right now you have you to earning more advice of a new a.b.c. c.b.s. and fox news come by and so this is a huge thing and with this is the future the internet streaming and you tube has got a brilliant future as compared with the old world technology and i think the shock waves are huge here so you're going to have no evermore. more of these industrial players out there wanting to slit google's throat actually that's really what's going on it's actually a difficult position for google to be in. you know the trumpet ministration you know every every bureaucratic you know wanting to go after them plus all these industries that are ready to go on the hunt right now so i think google's already laureate up and that's probably a good thing because it's going to get i think pretty hot for them and no question i mean i don't question your free market guy right and so when you talk about
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antitrust it kind of infringes somewhat on that free market idea of the government going to come and get involved how do you balance that we've got to be quick here but how do you balance that with the fact that in the case of facebook and google they basically control the entire online internet advertising model and in doing so they're actually choking out content creators that are independent choky not anybody who really doesn't fit their world view how do you balance those 2 things and say you can't choke everyone else out but at the same time still maintaining free market or can you yeah this is a decent question that i would answer as follows one is we need deregulation and telecommunications and the communications industry generally there's too many regulations that are keeping out of starts and competition so and google by the way is a big backer of these things because they want to big build a big motor around themselves but i would also say this sometimes the market out with the planet is sort of especially with trust don't forget how many years was that a decade or longer that the microsoft antitrust suit went on so i don't think that google's position of the market right now as is assured even though it looks like
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it right now but you can take a snapshot of the market say that's it let's break them up i say let the market play itself out and see who wins it'll be interesting to see editorial director for the american institute for economic research jeffrey tucker thanks so much. another very good day for tesla as the company's stock skyrocketed another 20 percent on tuesday it's the largest one day gain that tesla has had since 2013 the rise was fueled in part by a quarterly profit panasonic's battery business with tesla and an investor report predicting that its shares will increase more than 10 fold by 2024 so it tells the stock it's up over 300 percent since early june those numbers are important things to better than expected financial results and the ramped up production of that new car factory in shanghai but the latest rise was clearly helped by panasonic which reported its 1st quarterly profit in its new battery business with tesla after going through years of production problems at the legs and then then there was the prediction by our can best which says that expectations on tesla stock is that it
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will hit 7000 dollars by 2024 compared to where it was on monday at $780.00 of course our prediction is based on this tesla launching a fleet of portable robo taxi autonomous cars. brennan announced plans to ban the sale of new gas diesel and hybrid vehicles by 2035 in an attempt to reduce air pollution and fossil fuel emissions this is 5 years earlier than planned and now more than a dozen countries around the world have announced plans to crack down on the sales of new gas and diesel vehicles consumers will now have a choice between electric and hydrogen vehicles but the challenge still remains if there is enough supply of 0 emission vehicles for everybody in less than 15 years the market share for battery electric vehicles and $29000.00 was just 1.6 percent while hybrid electric vehicles have 4.2 percent share dominated at 65 percent and diesel at 25 well throughout the day on tuesday americans waited to know what the
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winner of the iowa caucus on the democratic side we are as of this recording still waiting but for almost a full day the democratic party of iowa could not release the results in part because of a new app they attempted to use on caucus night the app was created by a tech company. shadow that's not scary the company is owned by a digital nonprofit group acronym shadow was co-founded by a team who worked on hillary clinton's campaign for the 2016 democratic nomination acronym it was founded by the c.e.o. tara mcgowan who was part of president obama's 2012 campaign and those establishment relationships are drawing a lot of attention and raising a lot of questions here's the thing we do know about the problems with the iowa officials say there was no problem with the app but then they said this quote we found inconsistency is in the reporting of 3 sets of results in addition to the texas that was being used to tabulate results we are 'd also using photo results in a paper trail to validate that all results match and ensure that we have confidence and accuracy in the numbers we report in quote but do they apparently know in to in
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testing was done in advance on the sat and the additional claim is that the app was overloaded and after the iowa democratic party spent $60000.00 to have the app created apparently only 2 months of development was put into the app that's according to the new york times but remember the company acronym which acquired shadow said at the time of the acquisition that they were buying the company quote focused on building the technology infrastructure needed to enable democrats to run better and more efficient campaign saying quote so in the event of the ad going down or not going down why is it been so hard to get the numbers precinct captains claim that instead of using the app they attempted to simply call the numbers to the party headquarters some of those precinct captain said that they were on hold for up to 2 hours only roughly 170000 iowans were involved in the democratic caucus is a very small number of people to pull numbers from one last point the same app that was used monday night in iowa was said to be used in the upcoming caucus in nevada
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in just 2 weeks bad news there but the good news late breaking today that will not happen and about across the caucuses said there are no democratic party is that they will not use the app nor will they work with the company shadow or akron. behind the well that was a complete waste of time effort money software and the fact that they have managed to shut down with such a small number of populations actually logging into the app like a simple details that have brought the entire thing down and remember these weren't the individual caucus goers on the up it's just the precinct captains lastly and this is kind of interesting apparently this company shadow also just in july had people who judges campaign as one of their clients how do you not have a conflict of interest by allowing you to have a candidate as what are your clients and then working for the caucus itself makes no sense a lot of egg on their face for them to get out now that's it for this time you can catch bo must on the man on the brand new portable t.v. app available on smartphones or google play and the apple outside by searching t.v. or stream us to your t.v. by downloading the portable t.v. app on apple t.v.
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and online at t.v. bball t.v. will be available on more devices and as always you can hit us up at youtube dot com slash boom bust our teeth see about here next time. welcome to maximize your financial survival. looking forward to. this is what happens to pensions in britain. watched as a report. we're told it's a total meltdown confusion consumes iowa as officials struggle to report voting results for the botched i will caucus is the ultimate political metaphor of our time.
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and then there's the numbers you know not. all of them ok if there. was not a master plan yeah it will be like a battle they only asked me if i could watch that i'm not going to be. the one that has. given people. give the nod to me i mean come on what the how do we. assume. one you know and i know you need the whole corn to go for. that out on a horse so and i think just. the
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4. fold from gives his annual state of the union address takes it to him to to talk about his presidential achievements what apparently given the cold shoulder to democratic speaker nancy pelosi. is stronger than ever before the number one producer of oil and natural gas great economic success we did our job. iowa caucus chaos this time there's no external influence to play with the democrats are left red faced over a new low ball to make the voting procedure more efficient. thing or not fail my wallet for a music festival in sweden draws anger online as it allows children as young as.

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