Transcripts For RT Boom Bust 20240713

The market down continues as an early fed rate fed doesnt work as planned this is boom bust the one business show you cant afford to mess im christiane and im burnt to born washington coming up the Federal Reserve has taken measures to combat the malays of the cope 19 impact we take a deep dive on the move and the way other Central Banks around the world are reacting plus. We have taken other decisions as well as going up the most important is that we have clues to argentinas borders during the next 15 days a period that can be extended to argentina the borders are closed and amid the outbreak what measures are some nations around the globe taking to slow the spread of which i mean we take a look around the world to see which nations. Traveled to states yesterday. And later several industries have been a casualty of the recent economic slowdown you havent planned as hard as oil we have a live report on how falling demand and a price war has. Been a jam packed show today so lets jump right into. Futures had as limit down before market open monday as the fed said the markets panicking yet again as the fed has expanded all its conventional and unconventional tools which included this weekend cutting its key Interest Rate by a full percentage point to near 0 and boosting its Bond Holdings by 700000000000. 00 markets are still getting slammed triggering a 15 minute hold again right off the open. Target range for our own Interest Rate by one percentage point. Or so that we expect to maintain the rate at this one and who were confident that the economy where that region of it is going to react to would she maximum employment and predictability. Equities saying deeper into bear territory as the dow is now about 30 percent off its all time highs investors are digesting nonstop news flow of companies shutting down operations countries sealing borders and infections spreading in normal circumstances a large policy response such as this weekend would put a floor under risk assets and support recovery however the fear is exponential and markets are questioning what else Monetary Policy can do in mitigating coronavirus induced risks investors are liquidating 1st and asking questions later prefer in cash in the front and nowhere is this more obvious that gold that has crashed down to 14 sixties in just a few days silver has been taking a beat down as well down to its lowest level since 2009 and for the 1st time in Human History has been this cheap relative to gold meanwhile as the fed announces 700000000000. 00 money printing scheme bitcoin has surged almost 15 percent its gain was short lived as it is not immune to the liquidity crisis however big question reigned in. And avoided heavier losses without any external intervention such as Circuit Breakers and bailouts now on the other far end of the spectrum of market intervention many are calling for the markets to shut down temporarily to prevent further selling and quote own the shorts the Philippine Stock Exchange has become the 1st to implement this and announce that its suspending trading until further notice after the market wiped out just over a 3rd of market value since the november highs. Is back below 30. 00 after opec canceled their technical meeting this week that was meant to mediate between saudi arabia and russia sources said that it will be hard for both sides to reach a compromise now and the market warns that extreme oil surplus is possible Monetary Policy is now being discounted as cheap or money does little to restore confidence in the average consumer in the face of a deadly pandemic 0 percent Interest Rates wont make up for much of the massive loss of activity and income for companies and consumers. And for more were now joined by daniel who is author of fed up and inside his take on why the Federal Reserve is bad for america and former Federal Reserve insider so danielle starting off this is the 2nd time that the fed has made a move that the market has now interpreted as being panicked so instead of boosting confidence it actually spooked the market causing this massive selloff right off the open so was the fence response here appropriate it could have they have done anything else differently here. Well i think what we have to really focus on is that the fed didnt have very much of a choice the asian markets had priced in a much messier day than weve had today bearing in mind that today was the worst selloff since 1987 but again markets had already priced in the fed coming in and making an emergency move i think at the fed been silent that we might have even seen more disruption in Financial Markets than what we did see today so sadly theyve backed themselves into a corner and they had to. Ploy all of the weapons that they had all at once and as we see with todays trading that still wasnt quite enough and i think the message in the markets and i think what the market is trying to tell the Federal Reserve is that they need to look to another part of washington d. C. Because the Federal Reserves tools are probably not designed to get down to the average american working american man and woman whos about to be displaced and have their income take a big hit and its interesting that you say that danielle because senator but romney has now actually tossed the idea around of a 1000. 00 stimulus package similar to what bush did i believe in 20072008 when they gave every american i think at the time was 1200 im sorry i dont have that number off head but so they basically returning it through the i. R. S. And giving a 1000. 00 thats the kind of stimulus that i assume youre talking about there but what are the implications of hitting this hard 0 percent Interest Rate floor hitting this floor means that virtually all reserve Countries Central Bank Interest Rates stimulation tolls wont work. Well it means that the that the federal funds that means that the Interest Rate mechanism has been exhausted certainly doesnt mean that that was what occurred in 2008 and clearly the stock market took off for the races after that as the fed fired up the Printing Press so but again they also threw out 700000000000. 00 of fresh quantitative easing in last nights announcement and that also was not enough to me earlier rate the markets i think right now were still waiting for the next shoe to fall with concerns that that next she was going to be in the credit markets not necessarily the stock market now what do you think is going to happen in the credit markets but the crisis in the credit market that is pretty much sparked by big oil was that actually cause us to pretty much fall off a cliff would there be any any way to turn the ship around once that happens. Well its very difficult to say because you have. To understand where the credit crisis is coming from you just have exxon mobil for example downgraded for the 1st time since 2016 when Oil Prices Went into the twentys as they did today that thats going to take quite a few Energy Companies down but you also have the likes of m. G. M. The huge casino operator draw down its entire credit line kraft heinz also drew down its entire credit line this afternoon and that company has recently been downgraded to junk and because we have 10 trillion dollars in the corporate debt market in america you have to ask yourself where the potential Sleeping Giant lies and where the disruption might come from we have to remember that several years ago when it was our to october of 2018 it was none other than General Electric debt which started off a daisy chain so this point we dont know but we know that this entire cycle has seen the inflation of a huge Corporate Credit bubble in america and that that is likely where the source of risk in the system is is existing right now me mentioned 10 trillion dollars theres 4. 00 trillion dollars right now that is at risk of being downgraded to junk as we speak sun now Monetary Policy is going to be very limited in its effectiveness thousands of businesses and millions of households are now about to suffer extreme Economic Hardship as theyre starting to see losses and layoffs so is there anything that could be done at this point to prevent the economy from falling into a technical recession. Well i think that that discussion is probably moot at this point and im not trying to be insensitive its just the very idea of social distancing nationwide is so dramatic in an economy that last year was 78 Percent Services it was even a bigger year in terms of the Services Contribution to the economy than your typical year when you see about 2 thirds contribution because Business Investment fell off last year so if youre talking about social distancing in order to get the virus under control that is going to put the. Let me into a technical recession and do so very quickly again the onus falls back now on congress and the white house to help the average american working american so that they can bridge this gap without without bankruptcies and evictions and all of these crazy things that we think of when it comes to true familial hardship in this country things to keep track of former fed and sided and you know too much you know but thank you so much thank you. And as the world takes increasing measures to control the spread of covert 19 the director general of the World Health Organization says nations arent running enough tests which are crucial to understanding and controlling the spread of the virus we have a simple message for all countries test test test. Because every suspected gays and with the number of confirmed cases shooting up above 175000 with more than 7000 deaths the spread of people is being taken into account as germany has limited those who can across their borders for not only german citizens those who reside in the country but work elsewhere and vice versa can enter the country germany joined austria the Czech Republic denmark hungry lithuania poland and switzerland as european nations with border controls due to the virus argentina will also close its borders to nonresidents for 15 days as will peru here in north america canada has also made a decision to close its borders to those who are not citizens or permanent residents as is always the case some exceptions will be made in each one of those countries countries state and local municipalities are also making a greater effort to promote social distancing in france french Prime Minister Edward Philippe announced the closure of all nonessential businesses and locations including restaurants cafes cinemas and clubs spanish authorities are taking similar measures as the number of confirmed cases in the country jumped to 8000 with nearly 300 deaths of course in the situation stores like supermarkets and pharmacies will remain open here in the u. S. Cities across the country are taking various levels of precautions the governors of new York New Jersey and connecticut have called on bars restaurants and movie theaters as well to close several other states have made similar measures including massachusetts and washington. And in the midst of the coronavirus essentially causing the u. S. And other countries to grind to a halt there are enormous questions looming about how many cases will their ultimate leigh be how willing will all this go on and in the short term where will we be struck next and how bad will it be in those areas currently there are 2 companies that are using a Artificial Intelligence to come back rotavirus the 1st company a canadian startup blue dot. The virus by analyzing news reports social media posts and government documents by doing this is reportedly able to help detect an outbreak the 2nd company is in for vision and they have launched a coronavirus ai solution that helps Frontline Health care workers detect and monitor the disease more efficiently so joining us to talk about how ai is on the front lines the fight against grown a virus and to give us an update on how the rest the world is dealing with the virus we join or were joined by bus cohost ben swan ben thank you so much for joining us today. Ben when it comes to out how efficient is ai in terms of tracking this virus. Yeah you know i guess thats kind of a big question a big umbrella in terms of what you can do obviously its wide but if were talking about the specifics you know you mention that company blue dot and what blue dot is doing is very interesting is taking information specifically from social media posts from news reports from Government Agencies its compiling all of it together and its trying to anticipate where theres going to be an outbreak interestingly guys if you look at what they were able to do blue dot and its a tool was actually able to predict some of the locations of where corona virus was going to be the hardest hit before the World Health Organization even declared a public warning about it even before by the way the c. D. C. Did so the ai seems to be working pretty well in that respect also interesting. You have the alibaba now has a power diagnostic system get this they claim its 96 percent accurate for those diagnoses that they can detect the virus within a matter of seconds and theyre using a i they say to do that so theres a kind of a wife a brother here but it seems to be doing at least helping in some some respects now a lot of the current concerns over the virus are how quickly and severely these cases could build up so many Health Experts are talking about what has happened in italy as a guide for the u. S. And theyre saying about the u. S. Is about 11 days now behind italy in terms of the spread so how does italy provide a possible blueprint for the u. S. Yeah as your question you know italy if you consider the fact that they are the hardest hit country at this point outside of china so you have china and then you have italy has now moved into that 2nd place slot obviously a much smaller population in the United States but what were watching is the number of infections that take place there and then how they begin to spike up they begin to climb very rapidly thats what happened in italy thats what were expecting to see happen here in the u. S. But i gotta remind you guys and i know you guys know this but for viewers out there its important to remember that there are true cases the true number of cases out there and then there are the reported cases and one has nothing to do with the other reported cases means of those just the ones that we know of and thats a very small number right now the true number is probably much higher the c. D. C. Has even taken a couple of stabs at it and they claim it could be as many as half a 1000000 people in the state of ohio they think there could be as many as 100000 cases alone just in the state of ohio so we dont actually know what the true number is and thats one of the reasons there is i think so much for lack of a better term panic on the part of authorities because theyre not sure you know when those numbers continue to climb when they finally get a level off and thats why were seeing so many calls for no public gatherings and now bennett at this point virtually everyone across the world is basically being affected and some sort by the lockdown limitations on events etc now if we look at china is there any clarity in terms of how lockdowns might have actually prevented the continued spread of the disease when they say you know theyre actually beyond the worse still. Yes china is a really good example of christie you can talk to this all day long she she understands shes actually explain it to me well so heres how shes explaining to me which is that you know in china when they Say Something they say youre going to do something everybody does something thats part of being in that top down communist system that they have and so they were very successful at locking down cities about 60000000 people in the city so you would think they would have still had a lot of spread but they didnt have that in fact when you look at what i just mention about the true cases versus the reported cases what we saw was after the 1st lockdown in china that was their initial lockdown the number of actual true cases kind of slowed and then after they locked down those additional cities as well a total of 60000000 people in population the actual spread of the virus stopped in china and its been declining in the true cases declining ever since so for china at least this whole process of locking down cities and people corney being quarantined has been very successful in stopping the spread. Ben the swan cohost of boom bust investigative journalist krypto curtis currency analyst just a friend of our little baby so much for your insight. Guys that its. Time for a quick break but hang here because when we return several industries have been household names on the recent economic slowdown but hell have been slammed as hard as the oil sector straight up the problems we have a live report on how falling demand in the price war has drilled into the trial and as we get a break here the numbers out of the club. Now its point scoring we have what would be historically considered one of the greatest financial crises of the past 150 years and where does it fall into the category where how do you classify it i think were going to see a global depression and to your point how quickly do we get out of it the activist fed the problem there is that there per script and thus far have caused the problem so there actually is the problem there needs to been fed the Central Banks need to be removed from the equation because they are the problem. Last sunday. Morning the beach he could host those 2 teams youll be sent its. Not always. Going to. Be utopia because you know he said he needed. A little bit of new comer to have. To show. Respect to the sash risto empty im cool with. That you called the british mr west imo the just. And welcome back as the crow virus a pair. Demick continues to take a toll on airlines more american carriers are cutting Flights United Airlines announced sunday they will reduce 50 percent of their flight capacity in april and may the airline said expects flights to be at most 20 to 30 percent fall down from close to 90 percent before the onset of the pandemic united stock is down more than 15 percent on monday alone and down more than 50 percent on the Year American airlines also announced cuts of 75 percent of their Long Distance flights starting monday and going through the 1st week of may in the u. S. Alone they will cut flights by 20 percent in april and 30 percent may now according to a report monday us our lives will ask for 50000000000. 00 in assistance to ease these losses meanwhile in europe German Airline and their subsidiaries announced they would cut long haul seat capacity by up to 90 percent with european flights only operating at 20 percent capacity things could get worse for airlines as us acting Homeland Security Homeland Security secretary chad wolf said all options remain on the table in response to a question of whether the chump administration is contemplating a complete halt of domestic air travel now meanwhile the president of the European Commission proposed a restriction of nonessential travel to the e. U. Green form today our g. 7 tartness that reprint posts to introduce a temporary restriction on nonessential travel to the European Union why thats because we think nonessential travel should be reduced right now to in order to not spread the virus further be it to rescind the European Union or by leaving the European Union but also to avoid nonessential travel not to have a lot of potential strain on our house kisses to them. And has been assessed on travel takes a hit due to the crowded virus oil prices are down yet again monday thus further denting the Global Demand for. While joining us to discuss all the chaos affecting the Energy Markets is r t correspondent. What exactly are we dealing with in terms of the oil surplus well at the moment and we are facing the largest supply glut in history last time we had such a crude crude surplus was between 2015201636 extension 0 1000000 barrels but add to moment that could reach between 801300000000 barrels so here the few reasons 1st we had slower than anticipated growth in china so of course the demand was down then came the chrono which really slowed down the economy and brought down the demand for Energy Markets more bad news again for Energy Markets then all of a sudden when we had this pandemic and which has really slowed down the economy all of a sudden and we had the largest the biggest oil nations on the planet started a price war and then now this spike this supposedly really good news from the feds oil markets are just not reacting well the u. S. Benchmark has plunged below 30. 00 while international brant crude has crashed 10 percent also below 32. 00 per barrel so no matter what the u. S. Government is doing right now Energy Markets are just getting scoop spooked for there are just so you know good news at the moment for Energy Market and theres a service in the midst of all this the u. S. Actually decided to purchase crude from Strategic Petroleum reserves or that was Strategic Petroleum reserve what do we need to know about that well the u. S. Plans to buy 77000000. 00 barrels for the s. P. R. Strategic Petroleum Reserves within the next 2 weeks now s. P. R. Has the capacity to hold about 713000000 barrels not currently to hold some 635 now the main reasons behind Us Government to replenish the s. P. R. Is to take advantage of course the extremely low oil prices and its also to give some kind of support to the u. S. Shale industry at 7. The 7000000. 00 barrels purchase that could bring that could give the shell industry about 2400000000. 00 now whether thats enough to give the Shale Industries some kind of relieve thats very questionable because even with the 1. 00 trillion dollars injecting back to the markets we saw markets move very little so that still remains to be very questionable so at this point that brings us to our next question what can Energy Companies still gain well where can they actually profit at this moment well take a look at this chart im going to have to put up for you these are our u. S. Shell producers and they know they need they require the price of crude to be very high you know even some in the 7280. 00 range previously in previous years and thats no longer the case due to technological advances right we have hydraulic fracturing horizontal drilling so oil prices at the moment need to be in the 40. 00 range for them to make any kind of profit now shell producers have mostly budgeted it for 50. 00 to 65. 00 to make any kind of profit for 2020. 50 percent this year at 31. 00 a barrel only a handful of us shell producers can actually make any kind of profit and thats because drilling cost producers about 20. 00 per barrel to actually make any kind of profit so that leaves shell producers facing prices way above their costs of production and only a few handful of shell producers can even make any could even stay afloat and like for example in north dakota theres only 6 producers that could actually still make a profit at this level in the permian only a dozen can and this is from a few 100 shell producers are were talking about and to give you an example like occidental they have their them one of the few that has their cars is below 30. 00 a barrel but this by their low cost advantage their shells are critter shares are being currently traded. 12. 00 and thats about 65 percent down from previous years so even having such a low cost advantage its not doing Energy Stocks any kind of favor so the moral of the story is there is absolutely 0 good news happening right now for any Energy Company when oil prices are at this low and so we have theres a little bit of time left but i did one just ask you this i mean this Oil Price War thats happening right now with this have happened had we not had the coronavirus and this complete you know shutdown of the airspace space i mean its not shut down legally its just shutdown where people are flying anywhere with this still happens it still might have happened because we still had such a lower demand and asia so that we still had a crude prices are very low so biggest producers like saudi arabia like russia like iraq like the u. A. E. Still needed to bring up the price of oil but never did they think by doing this you could actually get so much lower temps are to correspond to thank you so much for me. Ali baba cofounder jack ma is making good on a promise to send 500000 coronavirus test kits and 1000000 facemasks to america in his 1st ever tweet posted photos of a China Eastern Airlines jet loaded with pallets of test kits and masks headed to the United States the Jack Ma Foundation in the alley bob if and foundation said they had previously donated supplies to other countries in need including japan south korea italy iran and spain isnt the only billionaire stepping up the bill and Melinda Gates foundation has also announced it would give 100000000. 00 to the effort to fight the spread of the virus other Chinese Tech Companies including 10 cent tictac owner by dance have pledged resources to fight the pandemic as well. By this time you must on demand on the brand new t. V. Ad. And the Apple App Store live on t. V. Or stream. On apple t. V. And online. And you can also find our coronavirus tracker on the portable t. V. Where you can get the latest news and information about the spread of the virus and as always check us out on you tube dot com slash start to see you next time. The white house scrambles to shield the u. S. Economy from a further stock market battering over coronavirus fears unveiling a huge stimulus package. France declares war on coal bed 19 even deploying the military into the streets of paris at says that you increase the containment efforts while Member States slam their border shut. The borders of the entrance of the European Union and the shamans will be closed we are forced to stop Flight Connections to these countries and establish control of the swiss border without a valid reason revelling in and out of the country will no longer be allowed. And Australian Special forces face a backlash after graphic video emerges showing a soldier shooting dead and