tv Boom Bust RT February 5, 2020 1:30pm-2:01pm EST
it's good because the state of california alone makes 6000000000 dollars a year of prison complexes you get some point in your life where. you don't care anymore no i cares about you so you don't care mining anything. but a 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 to cologne and i continue to have the facts on the market play us stock market fund jump on tuesday well take a lot of it was a very good day if i can in fact i'm fast and can tell the 13 so what's causing you like a car maker 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 lets 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 is the dow jones jumped 444 points to open the day this as the markets are rebounding from the coronavirus scare and that's not 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 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 in part to 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 temporary 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 american airlines united airlines cathay dragon all nippon airways korea air and more they have canceled thousands and thousands of flights low cost carriers are getting his the most and asia pacific carriers are expected to lose more than $6000000000.00 in revenue in the 1st half of 2020 alone so you can see that
anywhere that 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 as specially 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 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 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. and 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 an industrial sector led recovery know that this is the largest single day money injection since january 20th $1000.00 which halted the entire. our market selloff 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 it faced redemptions now outside of china the strong government actions lifted the european equity markets who grew increasingly optimistic about china's chances of staging a fast recovery the cac 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 recovering from the steep sell off last week as it took cues from china and are more hopeful in the strength of the seas 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 could oil prices fell to their lowest in more than a year and analysts are now expecting a response from opec and shell producers to cut supply prices have officially slid into bear market territory now so what does the global outlook look like now. well. looking a little bit dodgy beforehand in the sense that you know china had had already been experiencing problems a trade shock related problems last year it was trying to overcome that through stimulus europe was already slowing down the us was the one. who compared to 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. i do some work for a canadian data collection company called corporate interim toe 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 are going to have to get to we see kind of mass bankruptcies form a mid large cap energy player. well you'll start seeing the lows when you start seeing a massive bankruptcies as you say 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 found these whales they have 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. companies that kind of leverage to the health 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 us 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 restart 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 there in the markets and you know but unfortunately markets have become addicted to cheap liquidity and you know when these activities of the fed reserve started i jokingly said boy it's a good thing that we've stopped doing things like we so it does seem that you know we've got this rather unstable equalitie 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 us 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 after the shanghai composite fell 3 percent and bounce that up to end up 1.3 percent is the 2nd time the p.b.'s 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 itself. well i mean it's not even a question of letting the markets correct themselves at some point they will lose control that's so that's the real issue i mean i think once you get these dynamics coming into play i mean if you look back at in 2008 for example you had the
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 it 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 swept under the rug and deferred them for for a time so i think this does create a very problematic kind of situation for capital markets going forward while i think i'm beyond china once again tomorrow to see how they open and whether or not that'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 i. know both wall 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 baggage november we told you that the f.c.c. had voted 5 to 0 to initially designate weiwei 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 we 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 to single out while way for burdensome and stigmatizing restrictions saying quote 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 wall way and z. . 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 protocol 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. 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 wall way and access to that $8500000000.00 fund which telecom companies rely on heavily in order to essentially subsidize in rural communities yet actually hinders the competitiveness of the market and always now arguing that this entire move is actually unconstitutional so we'll see how we end up there time now for our quick pause but stay there because just on the other side of the break they get their take has in fact the best since 1013 what's causing the electric car maker stock to go so high 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.
we're told it's a total meltdown confusion consumes iowa as official struggle to report voting results for the botch i will caucus is the whole timid political metaphor of our top. china chose to build their economy in such a way as bad spawn the crisis of the crop of virus and for that there is an economic downturn and the us could inherit a benefit of that economic baldrick a similarly the us build its economy in a way that causes other kind of extra analogies that are highly detrimental to the us economy. is
a leader just a must. have . actually knowing. what i want. and there's no no don't you know you're not. can if you get away with all of them ok if true. was not an animation at a local battle day only 3 of a garage. that had been. the one that had been. given for people. who give the new nightly. what the how do we slow our d. assumed. the new no no no jane need the whole corn go before. adam and
now but i will not turn out in. 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 rock 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. realized that he needed to recuse himself
of course for months there have been calls for direct him to recuse himself including from massachusetts senator elizabeth warren who is also running for president joining us now to discuss 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 wants to do 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 their 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 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 the 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 into 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
largest the deepest pockets on behalf of the biggest complaint 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 this. 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
what happens angle both certainly greased a lot of wheels along the way and 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 antitrust 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 a server equipment or 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 right but think about these numbers i mean so right now you have you to earning more advair 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 now 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
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 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 will 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 the shares will increase more than 10 fold by 2024 so tell us the stock is 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 will hit 7000 dollars by 2024 compared to where it was on monday at $780.00 of course that 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
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 app 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 all are 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 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 after 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 it's 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 in just 2 weeks bad news there but the good news late breaking today that will not happen and the vatican caucus has said there is no democratic party said 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 populations actually logging into the app like a simple data also brought the entire thing down and remember these were the individual caucus goers on the up and just the precinct captains and 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 over 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 parboil t.v. or stream us to your t.v. by downloading the portable t.v.
app on apple t.v. and online at horrible t.v. harbaugh t.v. will be available on more devices and as always you can hit us up at youtube dot com slash boom bust r t c about your next time. thinking of getting it done once begun or she. didn't know and there are a few strands in this tiny little wired we don't need to create with him he will just start freaking out when it's raining anywhere near thousands of breeding dogs that caged in conditions of puppies i mean 67 years you know they've been locked up in a cage 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. you.
know it's. across the u.s. crude puppy mills are supported by dog shows and still most of the puppies that are coming from these large scale factory farming kind of operations are being sold at stores even giant good businesses are involved like congo. there has been a shocking amount of the organizing opposition to adverts to increase the standards of care for dogs bred in commercial breeding for so many most of that opposition is coming from huge agricultural groups and industries that have nothing to do with jobs don't buy dogs. but.
rather. the clock keeps ticking no final result in iowa where the 1st democratic party caucus of the 2020 a legend season has been. caused by a new up for. political people in germany where the ruling centrist party breaks its own. with the right wing alternative for germany to the premier of the region. on french borders rocked by scandal as a former champion figure skater publishes rape allegations against her coach she alleges 1st took place when she was.