tv Boom Bust RT August 20, 2019 5:30am-6:01am EDT
inside china. showed it is let's go. continue to rebound on monday adding to the gains posted last friday after the dow had its worst session of 2019 treasury yields are now staging a comeback after the 210 inverted and indicator which has correctly predicted the last 7 recessions we've had over the past 50 years this bounce here further reiterate our thesis that the short term risk is now to the upside so while the fundamentals are complete garbage right now in the short term the market does have some legs as continued stimulus and rate cuts will set a temporary floor here in the equities market so we begin the week off in a risk on mood as we get yet another stimulus shot from the central bank this time from china the p.l.c. has finally launched a long awaited reform to replace its existing fixed benchmark lending rate with a new fluctuating loan prime rate this is now to further lower real interest rates for companies essentially amounting to a rate cut the new l.p.r.
will be set on tuesday and subsequently on the 20th of each month as a benchmark rate for banks to price in new loans now more than 30 central banks around the world have cut interest rates just this year as countries move to shore up their economies amid rising concerns of a global growth and trade complex germany's central bank just issued a warning that the country could be slipping into recession as g.d.p. for the 2nd quarter contracted point one percent this further puts pressure on the rest of the country as the e.c.b. to step in as the fall of europe's largest economy will certainly have why despite implications for the rest of the world the e.c.b. is now expected to cut rates which are already at historic lows and signal a restart of a trillion euro bond buying program in order to spur on growth germany is now just one of several major global economies now facing potential recessions the u.k. economy shrunk in the 2nd quarter and growth pretty much flat line in italy and is on the cusp of defaulting with a debt at 132 percent. of g.d.p.
mexico just cut its raise on friday and initial data suggest that brazil just slipped into recession in the 2nd quarter and finally hong kong hong kong where the protests have now gone on for 11 straight weeks disrupting businesses and sending real estate prices plunging as critical global financial hub the protests are now wrecking havoc on the local economies as well as having rippling effects across multiple markets option traders are now ramping up bets against the hong kong dollar they got premiums on the put options have crept up to the highest level since 2016 as traders bet on the dollar peg breaking this is a really interesting time right now the home dollar is pegged to the u.s. dollar but the economy is now slowing and now the protests are calm pounding those problems the h.d.d. has now tumbled to the lower limits of the currency bag so hong has had to puke up billions and billions of dollars to defend the h k d $9000000000.00 so far this
year so when you peg your currency to another you at the anchor you actually adopt their monetary policy you adopt their yield curve essentially you let jesus take the wheel and let them run york economy it usually works pretty well you follow the anchor but if one is in decline while the other anchor still strong such as the case with the us now on a relative basis you now have to import the tiger monetary policy and rates curve of the u.s. this spells disaster for the one that's in decline so we'll have more on that in a bit when we join sara and hong kong. and to break down all of this and the increasing the interesting state of the global economy we are joined by peter schiff c.e.o. of euro pacific capital and horwitz chief market strategist trading peter this seems to be a moment of instability and uncertainty with experts disagreeing on what the numbers we can all see me and speculating on what numbers are coming to settle some . these arguments about the direction of the economy of china germany the us and
the global economy so i'll just 1st ask both of you to give us your basic assessment of where those 3 big economies are right now and where the global economy is heading in this moment peter why don't you go 1st. well 1st of all of the rate cuts that your reporter just mentioned globally they're not going to help the situation the problem in the global economy is not that interest rates are too high it said the amount of debt is too high and the reason there is so much debt is because central banks have already kept interest rates too low and lowering them even more doesn't solve the problem it actually makes the problems bigger because it encourages even more debt and so this is counterproductive and i think the u.s. is in the worst shape i think we are on the verge of finishing the great recession that we started in 2008 only the problems are much larger today than they were then and i think the back half of this recession is going to be far more severe than the
front half. and bob what's your take on the same question on the risk of recession in the u.s. and germany a big slowed in down in china and the prognosis for the global economy and 210-2020 . and why i think that the the world economy isn't obviously in a dire straits right now you can see that there rushed on the lower rates as peter was saying i think death creates a problem and of course there's way too much debt and i think of china doesn't do something with that with the trade deal i think they're going to be a lot more troubles of course it's always hard to get accurate numbers out of china but they're in trouble as it is they had trouble before all this started and they're only to get worse but they don't really care about what goes on because they felt they can hold busy out longer here we've got issues i think we're in the very early stages of recession here and i'm not as dire on the situation in the states as peter is but i do think that we are going to recession i do see a fairly big selloff coming out again timing that saw i could never do that but i can tell you that i would not be surprised to see
a 25 to 40 percent haircut and equities because right now the fed continues to kick the can down the road is addressing the real problems of free markets trade and what the interest rate markets trade were supposed to because if they wanted a free market interest rates would be naturally higher because all these peer to peer lenders are males are lending out tons of money and the bank is buying those loans from them versus lending to the public so they're creating a massive amount of debt even going to this new 3 and a half percent more again have we seen this movie before so the end of the day i think we've got troubles i think a big recession is coming but i still think that will be ok when this is over and i don't think it's the end of the world i think it's a natural sell off from an overbought market that's been totally overvalued with the chase for you so pay it out we know you love gold but now we're seeing a kind of a slight rotation out of call it and other safe haven assets after that big need jacquie action on wednesday last week and looks like the market has kind of calmed down a bit and while we know that things aren't great fundamentally it looks like the investors in the meantime are going in a risk on mode to capture the short term stimulus so what's your move and how are
you playing that's my attention. well i'm not rotating out of gold in fact people should be buying more gold on this dip i think anything below 1500 now is a good entry point to buy into gold is special and people realize or traders that the only reason that we've saved the market from collapse is because the central banks have capitulated particularly the fed we are now cutting interest rates were headed back to 0 they have end quantitative tightening the next move is back to quantitative easing this is all designed to help the stock market but it's going to help gold even more than the stock market because all the money that they have to print to prop up these stock bubbles is going to be better for gold than it is for stocks of course the stocks that will benefit the most are gold stocks and so if you want to buy stocks and years speculator that's where you should be looking and just saying tax your fundamentalist bob you seen quite a lot over the years as well and every single recession we've had now is actually
like a poster child that we kind of blamed all on in the 1990 there was a savings and loan crisis in the 2000 that was the dot com bubble bursting in 2007 it was a sub prime mortgages so one of the poster child of this one day. well it will be the 1st of the butchering of what's going on with the federal reserve that it has a number of the 1st and foremost because they're always behind the curve and they're trying to react when the horse is already out of the barn so that will be it will be i think it will be another financial i mean you look at the debt structure of what's going on right now and of course the united states americans are typically by the month societies as long as they have a job and they can afford to pay for by the money they're going to be buying well who's going to pay for all this that when we have some slowdown which are already starting to see so i think the fed by the way they're acting right now and allowing people to get in nohow this cheap money or supposedly cheap money will eventually create the bigger problem and i group peter 1500 gold is a great level to get in which is what we talked about in fact i wrote about this
morning. thanks so much peter schiff and todd horowitz thank you both for insight thanks guys. in argentina voters are angry out over the struggling economy put their support behind alberto fernandez the opposition candidate in the primary election instead of the current president murray so mccreight argentina is already struggling with the economic turmoil and outcomes of the primaries with salt in the market on trees markets collapsing legal journalist molly barrows contributor with america's lawyer joins us now with more so molly why would the markets respond like this to voter support. in short it's money and there's just not enough of it to go around the country so fernando says the country needs to renegotiate the repayment terms of the loan it took from the international monetary fund or i.m.f. because in the current conditions he says the country simply won't be able to do it
otherwise he acknowledges that the loan did help the country in a bailout but says debt restructuring is desperately needed for to protect the country's financial interest so under president mccree argentina signed a stand by agreement with the i.m.f. in mid 2018 for $57000000000.00 that is the largest in the country's history fernandez described alone as harmful because he says it puts the country essentially in submission to the i.m.f. and he says they simply can't repay them under these conditions and argentina is latin america's 3rd largest economy the peso currency is struggling annual inflation has climbed about 50 percent and after the election that didn't help the peso plunged 20 percent in argentina stocks lost 30 percent investors had put their faith in mcrae's efforts to tighten spending which was part of the deal when he got that loan but the people it seems are disillusioned by the country's economy under mcrae's leadership so it looks as if they are throwing their support behind his challenger fernandez and in terms of explaining the crisis right now friend of the
show mark weiss book for the some sort of for economic and policy research i was an op ed today in the new york times. on the question of how do we explain this crisis there but he points to something very much in the front of the minds of argentina voters which is the as you mentioned the role of the i.m.f. here the biggest. bailout agreement in their history what will the agreement play in mr current political troubles and consequently on the other on the flipside mr fernandez is rising political prospects. yes well you nailed it the i.m.f. is not a bad peg to hang your hat on if you're mccree i mean rather if you're fernandez because it is simply not a very popular organization in the country of argentina it's widely blamed for the country's 2001 economic collapse there and mccurry promised to rein in spending as part of the loan deal that he made with the i.m.f. and unfortunately that meant making cuts that were seen as hurting poor middle class families especially under soaring inflation and unemployment and poverty
rising as well so mccree had an ally at the time in the then head of the i.m.f. christine lagarde now she is leaving the organization after being tapped to head up the european central bank and that essentially is mccree without an international ally on his economic initiatives during this re-election bid so while the $57000000000.00 i.m.f. bailout remains there are questions if the next managing director will be a sympathetic to the president in argentina since legard included some interesting provisions on social spending and gender equality and she worked also to sell the deal to the public understanding that the organization didn't have the best reputation in latin america and she was trying to make some of the. you know basically acquiescence to that loan to try to renew support for the i.m.f. in latin america so considering the country's economic struggles continuing struggles impressed rationed and marquees lost by a wide margin of votes it was a political risk he took when he made that deal with the i.m.f. made that loan but it looks as if it did not pay off it might have been
a gamble it hurt his chances as you saw he lost in this primary election and his chances of winning. in the upcoming general election as a result are seen as very dim so it was the i.m.f.'s relationship with argentina that could have played a downfall in mccready's losing in that primary election fascinating report legal journalist molly barrows thanks for joining us. thank you so much. time now for a quick break by here because when we return protests continue to rock and we are on the ground our team correspondent brings us the latest on the unrest. and as we go to break here the numbers at the close.
race are gapping and the spread is widening into what i call the interest rate apartheid if you're in the wrong side of the premise of geoffrey epstein you bantustan of extortion ery credit card rights if you're a friend of jeffrey epstein then you get the insider rate of negative and you get paid to lend money or to borrow money excuse me from the bank. or done this with some. turned into a round the experimentation field cultural chemicals we know that these chemicals
have consequences they are major irritants there's no question. otherwise why would that the chemical company workers themselves be geared up and suited up locals attempt to combat the on regulated experiments that often in day you have many of these people one foot into the biotech pharma and the other foot in the government regulatory bodies this kind of collusion is reprehensible while the battle goes on the chemicals continue to poison hawaii and its people so one has to ask the question whether there is a form of environmental racism going on in hawaii whether these companies feel they can get away with this because the people have less political power. when the whole make just manufacture game sentenced him to public wealth. when the room in clusters and protect themselves. with the financial
welcome back here in the united states the trumpet ministration is making a full court press to tamp down a growing chatter about a possible u.s. recession and arguing that the ongoing terror fight with china is not affecting u.s. consumers or dragging on the u.s. economy on sunday president trump said he is not ready to resolve his spite with china the latest sign of a porch a protracted and costly debacle ahead for the world's 2 biggest economies also on sunday the administration's economic message man warns kudlow and trade advisor peter navarro did their best on the sunday talk shows to amplify mr trump's optimistic take on the u.s. economy mr navarro bristled repeatedly at any suggestion that u.s. consumers were paying the price of the trump tariffs and in an eye raising appearance on fox news mr kudlow seemed to struggle to clearly state the message of the day which was quote there is no recession and cites. the united states to
extend a reprieve given to a while way that allows u.s. companies to sell to the chinese telecom giant as long as they're selling repairs or updates to existing systems u.s. commerce secretary well ross announced the decision in a statement on monday say as we continue to urge consumers to transition away from hallways products to recognize that more time is necessary to prevent any disruption the decision offers relief to companies like google whose android operating system is used phones the company had previously warned that failing to update the operating systems could create security concerns it should be noted that huawei has also released their own operating system called harmony recently and currently use on smart t.v.'s this is the 2nd abatement by the u.s. since adding way to the so-called entities list. and as the hong kong protests are becoming increasingly violent investors and traders are growing concerned about the impact on the local economy and the financial stability of one of the most
important trading hubs in the world the most recent concern is the currency peg to the u.s. dollar which is rapidly deteriorating katie has been pegged to the u.s. dollar since 1904 and for 36 years the u.s. was a growth engine of the world and followed hong kong used to be the biggest port in the world it was a dollar based exporter and re exporter of the world but now we see a shift caused by china china has built up its southern ports and essentially choked off hong kong before 2001 hong kong made up 30 percent of china's g.d.p. but today it's barely 2 percent it's functionally an important today is a net importer and relies on china for 80 percent of its services exports so if we look at hong kong today it really doesn't make sense to peg it to the u.s. dollar as the macros have changed drastically couple that with the perfect storm of violent riots a slowdown of chinese capital inflows and a tremendously over leverage banking system that is 9 times g.d.p.
looks like it's going to crack that may now have to defend this peg and it's quickly burning through its reserves to do it this is now being questioned as the 2 economies are too divergent and it seems to make more more sense to peg it instead to the r. and b. with more in hong kong we got a fair amount to bring us the latest. protests continued over the weekend for the 11th straight week with 3 protests approved by the hong kong police on saturday alone. after last weekend's violent protests police had a water cannon vehicles on standby to use if needed so far over 700 protesters have been arrested. the demonstrations began in opposition of an extradition bill. which hong kong chief executive kerry lamb now claims is dead but for protestors this simply wasn't enough demanding the complete withdrawal of the bill and
anti-government protesters are now including even more demands from their government hong kong police held a press conference in an effort to respond to the public many fear that this will turn into some sort of revolution now there are reports showing chinese army on their way and gather that the change on border at one point will you allow them to come in according to the basic law and the national authority to turn out he only rests with the home government as well as the chinese central government therefore the police are not in a position to comment on due process of turning over only but i can guarantee that the home police is capable on saturday protest began in the afternoon with a peaceful teachers march followed by another peaceful pro-government rally that lasted just one hour organizers said 476000 people attended the pro police rally while police said only 108000 were present people gathered in support of the
island's police force there hope the government can restore peace to their city there was a hive you. know i walked home called to bring back peace because these people are making hong kong a real mess but tensions grew later saturday evening at the montauk police station protesters began throwing eggs and other things out police then i'm police responded by taking to the streets clearing them from protesters they showed up in full riot gear with police cars 1st several blocks clearing the street we saw no violence tonight but we were prepared just in case the police fired tear gas it seems like the protesters called it an earlier night than expected but they're looking for a schedule of the protests that will take place tomorrow. on sunday anti-government protesters showed up and kept their word it's our 2nd day of protests here in hong kong and you can see that people are starting to move toward this is the start of
where the protesters are scheduled to be walking to the current park where causeway bay and 8 leading up to look like they're going to be thousands of protesters here today sunday's theme peaceful rational and nonviolent there were groups from 2 sides the peaceful rationality camp and the valiant resistance camp which include those wearing masks. or they yellow dog we're here because the hong kong government does not listen to our 5 demands and also because of the police brutality so that's why we're here to walk for freedom but we are not giving up because we have a conscience and i will peacefully walk today and i will be with the pro peaceful camp and today we will not be divided in the crowd were also several families with children is ok but when a some go down i will take them to my 2 home protest organizers from the civil human rights front took the stage in the middle of victoria park leading crowd chants holding. the mood on the road was the and calling for
support for their cause decided found repression is already being being carried out by the home police force almost equally own ready to head home the actions of their own government and don't call police force the international community's image he was home home is being told by the home police that heavy rain didn't stop the protesters who march from a packed park to the streets well into the night protesters marked police with laser pointers after police previously claimed them to be dangerous weapons it's just all these affairs if not all but on sunday night the hong kong government responded to the rallies by voicing their concern for the peaceful yet disruptive protests. it's causing several road closures it's most important to restore social order as soon as possible the government will begin sincere dialogue with the public when everything has calmed down but demonstrators ensured they would
continue their protests every week we will stand up. every week until we get what we reporting in hong kong. parties. then finally mugari the luxury carmaker unveiled their latest limited edition vehicle at a classic car show in california on friday with only 10 to be made the cento dead she will cost a massive $9000000.00 each but she is powered by an 8.0 lead or 16 engine supplying nearly 1600 horsepower the vehicle goes from under 6 from 0 to 60 in under 2.4 seconds the top speed of the super car is electronically limited to 236 mph oh is that all super car gets its inspiration from the blue god e.b.
one's hand of the early ninety's gentle did she means 110 in italian an easy 110 were manufactured in italy near where lamborghinis and ferrari's are made but the 110 mark a resurgence of the big adi brand that had gone had been gone from the world stage since the 1950 s. well at $9000000.00 you know i don't know does it look like a $1000000.00 car i don't know it's a beautiful car but i have to say it's like a car that depreciate has so why would you ever want to spend $9000000.00 on that not to mention the repairs and maintenance on something like that it's crazy i mean maybe it works differently at this level of a collectible it's not just like you know the car that starts depreciating once you take it off a lot maybe it's a collector's item we'll see notes on a car like that is about a quarter of the price every single year so you're paying about $2.00 in maine a. year that. and saying that's it by this time you can catch a boom box on direct t.v. channel 321 dish network to 80 or streaming 247 on pluto t.v. the free t.v.
app challenge to 79 or as always it is up at youtube dot com slash boom bust r t c and. cash cow and is downright alfonzo any longer. this change from page dard serves our right. whose 1st words were i had a lot of a c. or a challenging post you've got 2 years to live. i have no doubt that what happened was scriven in.
the sense concentrate market is a $1000000000.00 industry these companies how does huge financial motivation to solve these problems there are numerous studies showing that doctors were keen to chest x. ray concentrates free in fits of its own that patients gives them is the wrong place to play golf term for stuff why that would keep me from secure those whose day. people still die i don't know which question or so i tried being hard to live when so many have. so what we've got to do is identify the threats that we have it's crazy on sunday shouldn't let it be an arms race is often spearing dramatic. to follow through the only closely i'm going to exist i don't see how that strategy will be successful it's very critical time to sit down and talk.
in this community there are people who believe that it's ok to suffer actually it's really hard there are no jobs and you see that i've got kids that ask and as a parent. i can come up with lots of arguments and there's a lot of conflict within the game and between the 2 teams most of the conflict i would say overall is around money and most of them money is made. close one on the children's clothes seen on each other is good business the state of california alone makes $6000000000.00 a year off to prison complexes to get some 20 alive where. you don't care anymore no cares about your so your care might anything. join me every thursday on the elec simon chill and i'll be speaking to get us out of the
world of politics sports business i'm show business. the headlines in our say the u.s. confirms it has carried out the 1st test of a cruise missile previously banned by treaty signed between moscow and washington over 30 years ago. the u.s. attorney general. the director of prisons after the suicide of geoffrey epstein we discussed the conditions at the jail where he took his own life but his former lawyer is fundamentally wrong with that is that jeffrey upstream did not belong or not to sell it to begin with and it has been revealed to british social media network. and his part of the u.k. government plan to tackle radicalized.