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tv   Boom Bust  RT  December 10, 2021 5:30am-6:01am EST

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it's a pale on it's extradition. calling for julian a sorry for now that for me calling bright thanks for watching. ah. it's not it? no, no, no, no, no, no, but they did. a high middle now are you on my head up my laptop. that has a knuckle, but my love bob didn't thought now. well, i'm up at a bit a well, i mean a relation strobe with blue
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with this is boom, bought the one business show you can't afford them. it. i'm brand uber and i'm rachel lemons in washington. coming up, kind of ever grad did the label of restrictive default for the 1st time from a major credit rating agency. after it's 30 day grace period come to annette. or that's got what it could mean to the embattled company. plus the drama surrounding the north room to pipeline continue from europe. all the way to the us will tell you which leaders are begging germany, chancellor, not to give the green light to the project that has been years in the making. then inflation have hit the digital fear as online prior to 3rd through a record high in november, we'll discuss the new wave of inflating hitting consumers during the holiday season
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. we got a lot in store to started and we lead the program with an update in the chinese real estate saga. both china ever grant and kaiser group have been hit with the restricted default label after the company missed key deadline for repaying their debt at the beginning of the week. ever grand, which has more than $300000000000.00 in liabilities, was given a 30 day grace period to make more than $82000000.00 worth of coupon payment. while kite them, if it's deadline to repaid $400000000.00 bond. now, while both companies have indicated this week that they are taking steps to address the growing crisis and restructure their debt, countless questions still remain as to what will happen and what the ripple effect . 6 could be for markets around the world. so joining us about host christy i. now christy, with this label of restricted default fits rating seems to be saying that ever grand hasn't paid his debt, but it also hasn't taken any steps to file for bankruptcy or to stop its operation
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. so how much weight does this designation actually carry? it carries a decent amount of weight other sensually, it is a grade higher than default and by fishes definition. and it means that a company has an unclear payment default, but has not entered into official bankruptcy, filing's liquidation or other formal winding up procedures. and now this is the 1st time that ever brand group has officially been labeled as a default, or what that means is that label means that the cost of borrowing for the company has spike. make me increasingly more difficult to conduct business and daily operations. and this downgrade may not have an overt or immediate impact on the chinese process, but it may actually trigger across the falls on the developers $11200000000.00 of out standing debt. and this is also very worrying for all of the creditors, especially the offshore ones, as they're expected to be near the bottom of the queue for repayment. the chinese government's prime motivation is maintained, the social stability,
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which in this case means giving priority to the homeowners. employees and individual investors and programs, wealth management products does not include offshore creditors or investors. now, kristy beijing is been referred to as ever grants problem. they say they are self inflicted and as a result of poor management and reckless expansion. while some were expecting a typical bailout of the chinese government peers to be more focused on reorganization of the company, do we have any idea what that might look like? not quite. what we do now is that chinese policy makers have appointed several officials to oversee the restructuring and the developer in a more hands off approach. so outside of direct intervention, chinese officials have taken steps to limit the impact of every brand default. so regulators last month is some restrictions on bond sales by real estate, friends, and developers, in hopes of limiting credit to over leverage borrows without cutting the loans off entirely. the country central bank also said that they would cut its reserve ratio
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requirements for bank, which would free up about $200.00 a $2000000000.00 of liquidity to boost the economy. so right now it is not entirely clear what the next steps are for ever grant, and it's restructuring. the developer had last said that it was actively engaging with some offshore creditors for restructuring plan. and the company plans to include all of its offshore public bonds and private obligations into this restructuring plan. and a number of major investment firms are now waiting in the wings for repayment, including black rock and alliance. and they would definitely hope to see a restructuring rather than a full on bankruptcy. and also the officials have now taken all working groups at grand and they've been sent off to urge builders to manage risk as well as to strengthen internal controls and ensure normal operations. in the meantime, i know that there's really a lot of pressure in so many different aspects of the saga, and this is something that we've been watching unfold throughout this year. and
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investors have really been feeling the panic. we've seen ever graham stock down 80 percent and kaiser doc down 75 percent. so what are some of the long term effects both for these companies and for those who rely on them? well, the long term effect is that there is going to be a loss in confidence, a major loss and competency these real estate firms in the market, which essentially then translates to billions of dollars of asset valley appreciation that has been built up over the last decade. in china now just vanishing. so the other long term effect from the loss of confidence is that creditors are going to be more wary and less likely to lend to these companies. and that again makes the cost of borrowing a lot more expensive. so when that happens, when you have a tightening like that in the market where you can borrow anymore, that slows down growth drastically. of the real estate market in china responsible for nearly a 3rd of its g d. p growth. this could have vast implications on year over year growth. and now the real estate accounts for about 70 percent of the 5 percent of
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household. well. so china's housing flow will affect the growth and prosperity of the middle class as well, which will translate into a slow down of consumption across pretty much all industries. and companies also who rely on these developers, these real estate developers to they will be in trouble as well. ever, grand pays out billions and employed a ton of contractors, builders, materials, and construction workers to build all of these homes. so with all these companies now falling into default, everybody downstream or be pretty much be out of a job as well. now currently we obviously know that the government decided on these curbs, in the property sector, there are central goal was to avoid a bubble bursting in that sector. so even with ever grant and kind of taking steps to restructure their debt, how does the situation impact this ongoing recovery and have about 45 seconds left? well, it means that means that the entire thing is going to be a real wake up call because it shows that the government is not going to be very
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quick to step in and actually get involved. so that means that there's going to be no safety net, it's going to basically just restart the entire cycle. speculation is going to suffer. growth is going to suffer in the meantime, and you will get this entire contraction. and it is part of the life cycle of the economy for right now, people, since we all have such short term memories in the market, because the fear and greed now we kind of forget that speculation often leads to kind of these bubbles birthday. so this is just going to kind of re educate people into being that there are real risks when you get into some of these regulations and investment decisions in the real estate market. certainly a lot of daycare and we will continue to follow up. boom. both kristie, i thank you so much for your time and thank you. and tolan prime minister is raising mistakes in the finance russia north stream to pipeline. the prime minister says he will call on germany's newly appointed chancellor all off shows to oppose the start of nordstrom to claiming that the pipeline will be used against
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europe by russia and former chancellor angle. merkle had grown tired of central and eastern european countries attempting to block the project, but now poland is hoping, the new leadership will have a new view of the issue. george is not disgusted bill by co host, an investigative journalists bank. why now? ban poets prime minister is basically asking germany to quote, not give in over, nor to stream. what do we know? yes, actually, that's what they're extensively framing. the issue as is that, as you pointed out, anglo merkel had already kind of, you know, ignored those cries from eastern europe to say, make sure you stop this pipeline because it's going to harm ukraine is going to harm the rest of europe. it's going to be used as the polish prime minister says, as blackmail again, here are essentially, they're talking about this as if russia is a drug dealer offering kind of a free 1st taste. and once he gets your hooked ones, russia gets you hope you'll be a victim of their pipeline, natural gas and oil,
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all that you can get, but you have to give us whatever we want. and then the clean here is that what they want is to invade and take over ukraine. i got to tell you guys this story. we've talked about it for some time, north stream to the way the u. s. s. treated the way some european countries treated it, but i would say in the last week to 2 weeks, there has been a ratcheting up of rhetoric surrounding your stream to and something unique is happening here. and it appears to me that what we're seeing now is north stream to being framed as an act of war by some countries, and treating it as if war will break out over this specific item over this specific issue. which seems truly bizarre again because russia is not forcing the pipeline on anyone, germany begging for that natural gas as winter approaches. yeah, certainly as bizarre is a great way to describe it, especially when you look at the fact that now we have the u. s. once again, acting like they have some sort of say in the north through do pipeline when they have not been able to stop it up until this point. and now we know that when it
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comes to sort of those back and forth, we saw that the u. s. chose not distinction. russia in the last defense spending bill president by that has now been warning russia that the u. s. and nato will strike back against nordstrom to if russia invades ukraine, which russia has said that it does not plan to do so. sure. why is there that belief there? and once again, why is the us acting like they are in charge of this pipeline on the other side of the world? well, ok, so this is merely speculation on my part. but if look at the rhetoric and how it's being framed right now, and this is what i'm talking about, the framing now seems to be surrounding the idea that nor string to was becoming an act of war. and that intervention on north stream is about national security for ukraine. we talked about financial security, few cram because obviously russia pays a transit fee to be able to run natural gas and oil across pipelines through ukraine to get to the rest of europe right now. nor stream to bypasses that system, rushes already said they'll continue to pay that into the near future so that they don't leave the ukraine in a lurch. however, the way the president by then talked about this week was essentially to say,
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we will target financially and possibly even militarily target nord string to in the event that russia decides to invade ukraine, which again, there is no indication that russia has any plans to invade ukraine, there's all this talk about military build up on the border between russia and ukraine. george galloway, who appears on our t america all the time, made a statement the other day. and i'll just repeat what he said. he says, go back and look at the numbers. russia has not added a single military unit to the border since 2014. it is ukraine that has a built up on its side right now. rush, it is maintaining the same size build up. so this talk about russia building up in order to invade crane doesn't seem to be based in any fact at all. but to bring your stream too into that. i think it's highly problematic. yeah, it's almost like you're, you're bringing a business deal into what is a very geopolitical issue, and you're kind of tying all of this together just because that's an important issue. and again, germany who needs that gas, they may be hurt by all this anyway. but i want to hit on one more point on this
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whole issue to what you were just mentioning, because russia's president vladimir putin is pushing back on some of this, saying that he would not stand by and allow nato to place missiles in ukraine that could strike moscow within minutes, i just want clarification. is there indication that nato is attempting to do this? well, there is taught that nato might remember there's taught that ukraine itself wants to become a member of nato. no, nato was not saying yes to that at this point, but there is talk right now about possibly putting missile defense systems inside of ukraine, obviously as, as president goodness. and that would be a huge red line for russia. they can't allow that to happen. it's hugely problematic and no country would allow, and i mean, considered if i could, the united states is not going to allow no china to put a missile defense system in mexico and say, well, we put one here just in case you decide to do something. we don't like that's not going to happen. and so what russia's essentially saying is we have to protect our own sovereignty from nato, which continues to expand. and we're not going to allow you to have a build of right on our border of missile defense systems. and hypersonic missiles,
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they could strike moscow, it's, i don't think it's unreasonable and it's something that quite frankly, you know, russia would have to do if there is an indication that nato might put those missiles in ukraine. and unfortunately, this issue is just going nowhere right now. so we will keep an eye on it. thank you so much, ben swan for breaking down for us. you got it. and amazon is now facing a fine of nearly $1300000000.00 from italy's anti trust regulator, which accused the company of abusing its market dominance in the country. at issue here is the push for amazon sellers to exclusively use the company's own logistic service fulfillment by amazon, in order to maintain certain perch. among those incentives is the can coveted amazon prime label that so many customers look for. and with the italian regulator alleging amazon prevent 3rd party sellers from associating with the prime later bull with offers not managed with it's from bill mit by amazon service. now italy argues that the move was all about strengthening amazon's dominance. and of course
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it's profits. the company says it was owned by amazon service is completely optional, is not used by the majority of 3rd party sellers, and the ones who choose to use it do so because it is efficient, convenient, and competitive in terms of price. amazon is now being called to pay up that $1300000000.00 fine, which is notably one of the largest penalties ever impose on a u. s. tech giant by a european regulator. that is a lot of money there. well, you would think that amazon can clearly forward $1300000000.00, right. every time we talk about one of these tech or e commerce diets out there and they get these $1.00, even up to $5000000000.00, you go. they set that aside for find how they operate, but the fact that i hate to be the one i do sometimes has to defend amazon in this . but if you hear what their say, which is that to be billed by, or to get the prime label, you have to use the filament by amazon and the problem with that rachel is. maybe you should because that can assure that it is fulfilled properly. if you use amazon
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regularly, you know, when they're not sold by amazon, not fulfilled by amazon, sometimes you could have problem with products. oh, absolutely. i know for customers, it's all about. if you're on amazon, it's all about getting that amazon prime, making sure it gets there in 2 days. that's a whole part of the experience, lou, it'll be interesting to see where it goes from here and what comes up with, but it's time now for a quick break. but when we come back, online shoppers have faulty inflation, seeing as the new rise, a record last month will bring you the latest on what it could mean for you this winter. and as we go to break your, the numbers at the club with
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oh right now there are 2000000000 people who are overweight or obese. it's profitable to sell food that is fatty and sugary and healthy and not at the individual level. it's not individual willpower. and if we go on believing that will never change as obesity epidemic,
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that industry has been influencing very deeply. the medical and scientific establishment, ah, what's driving the obesity epidemic? it's corporate. me. when we've talked about the rise and share the civil war in america, and it could either be between the have yachts and the have not. it could be between the big coin states like texas or florida between the non bit point states . but the rising tension is comparable because of the rising coefficient that is now spread between the very top and the and the bottom is getting extremely why the welcome back. i was rising. inflation continues to remain in focus. the price of online
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goods hit a record high for the month of november. the prices rose 3.5 percent year over year . according to the adobe digital price index, the highest increase in 2014. when the american tech company started tracking online prices. now some of the categories that saw the biggest increase include a peril which was 17.3 percent compared to last year. home improvement and sporting goods. each side increase of nearly 7 percent, while appliances and groceries each that 4 percent above where they were just last year. now we will see government numbers on the consumer price index friday, as accountants pulled by reuters suggest prices rose by nearly 7 percent for the month of member year over year. so what does all this data tell us? as the federal reserve begins, tapering, asset purchases and investors look at when they may possibly see an interest rate hike. join is not. here's our good friend, tobin's met the, the ceo of transformative research and tobin. i want to get to a point here that i know you're ready for because you remember, well, and you to is you come on the show. very often we've talked about transitory
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inflation. and you told us a while back and it was a while back. so i want to give you that credit that this was in fact trans dory. now j paul backs obviously, maybe we need to retire that word and find out something some other word to describe this. so what are you seeing now? well 1st of september i think was when we talked about still being transferred. but remember, when the data changes, you got to change your perspective. and when we got late data in september, we saw that housing prices. so let's go back. inflation is not just a few things going back up in price. if everything going up in price and in housing in the house rental equivalent united states, we take the average price of the house and then we take a mortgage rate, we say how much it cost to own that home. well, those numbers came in in september, and that made us change from transitory to sticky because in the united states is a 6 to 12 month lag of getting those prices into inflation. if you added that to 2022 big boy,
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we're going to have real inflation across all parts and it's going to be higher in 2022. the 2nd thing you gotta understand is base case, right? someplace that goes up the last year. 2020 prizes went down obviously. so 2021 is going to be higher. so because the bass case was so low. the issue now is, is the bass case we're making for 20? 22 is now a good 45 percent higher because just of those of housing rental cars and then a bunch of other stuff happen. remember, you know, use cars. we have some of these idiots and craddick things that happen. but in the real world, what we're afraid of is what inflation gets bad is when you're like boiling water, that's the economy all the time to boil over. and people start to expect prices are going to be higher. when that happens, behavioral economics one, a one kicks in, and now people buy more because they think it's going to be higher price. and that sets up that negative feedback loop or higher prices beget higher prices. so the
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final point is normally in capitalism, higher prices is what kills higher prices because more capitalism comes in. we lower the prices, but because of the supply chain because of off showing, etc, but high prices, they're not caring high prices. energy prices are high because energy companies don't want to money. we've talked about that a lot. the chase money the way. so everything that held inflation down is not holding inflation down any longer. and that's why we changed our perspective, by the way. that's why we bought a home builder stocks where we're making stupid money because we're a 1000000 and a half homes. bless united states wages. they've got up starbucks up in buffalo just went union. so wages, home, equivalent, rent, and energy are not going down into 2022. and that's why in a transitory, you know, what i appreciate have, and then whenever you come on here, you always give us sort of an economics one on one lesson to start things off. now when it comes to those online prices that we mentioned, the beginning of the segment,
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how do those correlate to what we may see from the government, cpi numbers. i mean, are they all sort of on the same level? now they're not, i mean it's, it's a basket of $24.00 goods and services and clothing is down about 3 percent. i know you spend a little bit more than your money on quality, but most people don't. the idea here, the idea here is that the price is that you paid for my nike shirt that i bought yesterday. it was about 20 percent higher than it was before is because they're all made in china. and that's not going to change. wages have gone up in china also just the supply chains have to change the cost to deliver it is about $60.00 times higher than it was 2 years ago. so you've got to take this piece by piece, but the ones that really move the needle home, read equivalent energy and then wait strikes. so if the wages are going up, the same rate of prices were ok. unfortunately, wages are going to be about fix percent, and i think the print we're going to see tomorrow is 7 and a half, maybe 8 percent. and that's where people get
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a little jiggy and they started to say, hey, let's load up on sale. let's load up on batteries, lights up and blah, blah, blah, because the price are going higher and then it becomes a self fulfilling prophecy. and that's interesting point there to, because i wanna move over to the fad because i want to get to that before we run out of me because the fed has started to taper its asset purchases. my initial thought there was that this would wind down by next summer, but now a new survey from the financial times and several other surveys have found that economists believe they will stop making asset purchases by the end of march. you agree with that? prediction is that going to help anything? yeah it's, it's absolutely going to happen. i mean, we've seen that from sort of our fed inside people. does that help the, the unique situation in a pandemic because of the price rises? no, it's not going to make a difference. we have one and a half 1000000 people out of the out of the workforce, basically just a long haul. cobit issues never had that before. we certainly have 5 or 6000000 unfortunate souls who have died, many of whom are in the workforce. they're gone, where people have removed that. so we're,
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we're sure about $6.00 to $7000000.00 people in the labor force. and when labor force is tight, you have to offer more pay. next, just the way it is. and that's not going away. and it's a structural change guys. it's not, we're not going to import $5000000.00 new skilled labor people are low skilled labor people. next 6 months, so it, that problems not going away. and the fat is going to have to start raising lower rates. it, you know, they're fed funds rate to accommodate that. we think they're going to be at about one and a quarter rate by june of next year, and that's going to affect some stock prices because if you sell your stock sells for 40 times, your annual sales and interest rates go up risk re asset. those high risk assets are going to go down in value and tobin. i know that we talk so much about this and you've kind of mentioned throughout this segment is this is a different situation that really we've ever seen before. there's all of these different things that are normally would solve the problem and they're doing nothing of the sort right now. now also, the federal reserve has pointed to the idea of maximum employment as the gauge for
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when it might raise rates. but the fact is here that with job with claims that if it's due, your low just this just a day, and they're not looking towards inflation data on those directions. so, i mean, where are we going with all this? well, again, in the new new normal we are at full employment. if you're minus $6000000.00 labor workers based on jobs available, that's what i would call full employment. and the question is, how many people are out of the out of the workforce because of kids? because of the, you know, the 2100 dogs at cos here in scotsdale have you take care of kids on a monthly basis, blah, blah, blah. so, but all that is chopping, you know, there's no firm relying here. and i'm afraid if you know people might generate, i don't, i think i'm the only guy i know who's working any longer. everybody's retired or move to someplace. they're gone. there's a huge amount of millennials that are getting higher wages in moving and i would
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like to move in homes, but they can't buy them. so it's not in inflation issue. are all, well just go back. we have all the climate we possibly get and we're not going to solve that problem in one year, 2 years or 5 years. we've tried to solve all the world's problems today, talbot, and unfortunately, i don't think i've done any of that to get them transferred. thank you so much for that. i get to see you guys. a boom on the on demand on the portable tv app available on smartphones, tablets, the google play in the apple app store by searching portable tv, portable tv. you can also download it on samsung, smart tvs and roku devices, or simply check it out at portable dot tv. well see you next time. mm. a video on michelle
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clausen. pretty much be with the with the coordinate a dealer to work with quite a blue. yes. give them a boise, and like you to form a visa that the chemist out will, you will like with what i want to talk to somebody yesterday with ways figured out those. they might not spanish video yet because the launch with a transparency for the powerful privacy for the bell. this case about
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privacy. what people care about is power. junior, nissan just become a symbol of the battle for privacy. information is power. that's what's going on in the world. a huge struggle with governments and corporations to want to keep information secret and others who the democratic rights of should be pushed forward . and people have a right to know what to watch, how assange helped shift the conversation around transparency and come see what the battle has done to them. i feel like children's life like it, coming to an end. we are in a conflict situation with the largest, most powerful employer in such a situation. it's remarkable to survive. i just
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i can use an arti weeklies founded using the sound can be extradited to the united states. washington has one is to pale in a london court against the previous ruling, the block to san from being sent to the us to face trial on espionage charges. his whole case may now we're turn to a lower cold to be re heard. and also this are a provocative and threatening action. russia slammed, she cried, pretending to breach it's maritime borders. ne crimea take intentions between the 2 to a new level. ah, good afternoon. welcome. just gone 2 o'clock here in the russian capital you watching art international. we'll start with that breaking news too because the london court has ruled that we.


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