Transcripts For RT Boom Bust 20240713

The corona virus pandemic which has caused a lockdown and near halt of business worldwide is going to have a lasting effect on the Global Economy but just how bad will it get the International Monetary fund on tuesday joins those who say it could create the worst financial crisis since the Great Depression. We are projecting Global Growth in 2022 full. To minus. 3 percent. Now this is a downgrade of 6. 3 Percentage Points from general 2020 Major Division over a very short period of time this makes the Great Lockdown the last recession since the Great Depression and far worse than the Global Financial crises the i. M. F. Chief economist said there will be a partial recovery in 2021 adding the overall g. D. P. Will remain below pretty virus levels the comments come weeks after u. N. Secretary general and tony terras made similar comments saying the pandemic will bring a recession that has no parallel in recent years and that it is the worst crisis since the 2nd world war meanwhile the w t o said last week global trade will fall by between 13 and 32 percent this year alone now theres a lot of rate down here so lets go ahead and bring in some expert analysis from cohost ben swann and christiane i guys thank you so much for joining us christy this contraction of Economic Growth is it simply because of supply chain slowdowns or are there entire industries that will collapse as a result of the economic shutdown. Well run as kind of both you have the slowdown stemming from the shutdowns and businesses which creates massive layoffs and unemployment which then snowballed into lower income decrease Discretionary Spending which then repeats and feedbacks into the chain in a form of slowing demand so its a vicious cycle thats very hard to control once again the mentum the other part of that is that you have entire industries that are on the brink of collapse and theyve been levered to help bring on cheap corporate debt now of course were talking about the oil and Energy Sector hit one of the back on south america well we can also be talking about the gig economy the gig and share to cop a sickly have assets that valuation upwards of several billions of dollars with 0 assets so that economy has a collapse and the fact is it has no assets to back it up or doesnt own its cars being b. Doesnt own any of its real estate making it all the more painful and then finally lets not forget about trade International Trade accounts for a significant portion of the economy but now depend that make borders are sealed essential Industries Like mass make and ventilators are all hoarded not shared and its every country for itself trade barriers are coming back up and trade is expected to fall anywhere between 13 and 32 percent in 2020. Bet i want to bring you into this conversation what does this mean for workers for instance here in the u. S. We are seeing there there will be good were not 100 percent sure that people will actually get these jobs back after this their home orders are lifted because you know if were talking about an economic downturn a recession its something that rivals the Great Depression that means that these jobs will be lost for a long time before things start to rebound right well its very possible they will be by the way i thought that was such great analysis and crissy talking about you know air b. And b. And some of those Massive Companies that really dont own anything so who does own the real estate who does own the vehicles that you know the people travel in for over well its the individual workers and then in many cases those are individual contractors the problem is right now to your point brant. The governments not bailing out contractors or Small Business owners this s. B. A. Rollout has been an absolute joke so far in terms the way its been handled and one of the problems is you have a lot of Small Business owners who are being crushed by it because theyre not getting any help but the majority of people in this country who are employed are employed by Small Businesses so its not just the workers that are hurt but if those Small Businesses cannot come back if those Small Businesses cannot reopen when the time comes because they didnt get help they were promised and yet they were being forced to shut down and thats important for people to remember none of these shutdowns are because people asked for them or indicated they needed them theyre being mandated and forced upon them and then Small Businesses cant make money so yeah youre right a lot of these jobs for workers they may not come back because those businesses might collapse and now kristie there are some big concerns about what this virus means for poor countries around the world now the g. 7 has actually announced that it could suspend debt payments for poor countries affected by the virus or what does it mean for these economies that are a little smaller. So the nice part in developing nations they have previously taken on a lot of debt which are very low Interest Rates and are to borrow so now they need to make payments and thats choking the funding for their other efforts to control the pen next and raytheon share conny so right now these relief measures will allow them to channel more of their scarce Financial Resources toward medical and other relief measures but while these temporary relief measures help i leave that have not 6 months its certainly not enough as these developing countries are at most risk for the pandemic spread as well as for Food Shortages coming up in the future. And it seems like a lifetime ago but just a few weeks ago as the pandemic was getting underway we did a 2nd here on boom bust with you explaining pandemic that they could be released for the 1st time ever can you give us an explanation of one of what pandemic bugs are just to refresh the viewers as to what that is yes who appeared to be bob very briefly these bonds were essentially created in 2014 remember that we had that big scare of ebola around the world and here in the United States well after the bolus scare took place. The i. M. F. Essentially created these things called pandemic bonds which essentially would help small and poor countries deal with a large pandemic and so about 190. 00 s. Just took the number 190000000. 00 was promised in financing for poor countries if they receive those pandemic bonds in the event there was a Global Pandemic which of course we have now and of course but it turns out that. In the midst of this actual Global Pandemic those bonds are helping the countries that had been promised to help so who is actually benefiting from this well and unfortunately that is the reality of this is that wall street is actually a big surprise here right wall street is benefiting from it wall street has done very well with these pandemic bonds unfortunately but the countries that need them cant even get the mccord into the w. H. O. Theres a whole series of rules about how this works it has to be 12 weeks after a pandemic is declared that a country can even receive it you have to have over 250. 00. Deaths in that country and the way that this is been set up right now essentially a lot of these poor nations will not actually be able to receive money from the pandemic bonds even though the w. H. O. Declared a worldwide Global Pandemic so the bonds are not going to pay out to a lot of the countries that actually need them and in the meantime we are seeing again investors having made a bunch of money by buying into these bonds and theyll continue to do so but theyre not actually being used the way theyre supposed to be a big surprise here you know kristie you have the background in wall street that we know you come from here do you play number one how wall street is making money off these pandemic bonds when theyre supposed to use to be helping poor nations. So the way that wall street views it and then again know of no surprise here these are viewed as a short sort of insurance hedge so basically when a pandemic hits the response will pay out but in return because wall street is fronting all of the funding for these theyre getting about between 10 to 11 percent return year over year so all the past decade that weve havent had really a pandemic as big as this one theyve been cashing in on between 10 and 11 percent return and as ben mentioned there are certain criteria that have been mentioned and these criteria are really unreasonable now that we look back into how coronavirus rolled out you have to wait between 10 to 12 weeks for the coronavirus actually hit and by then were already in the mess and its almost too late to really make a dent with these funds and then also mention a lot of these countries are eligible simply because theyre not poor enough or they havent had enough cases but on the other hand of a lot of the countries that need financing the most countries like china italy spain korea the ones that have the most most episodes of coronavirus theyre an eligible because im not poor enough apparently well and its interesting too because when you look at it just because youre not overly affected by the krona virus you dont have that many cases doesnt mean that your Financial System is not being heard as weve seen travel has gone to a standstill so people are coming in and out and even when youre not hit hard a lot of people are still doing the the lockdowns to prevent the spread just in case so its very interesting and well keep an eye on this story who must go spend swan and christiane thank you so much for your time on that. Thank you. As the number of cases of quota by risk nears 2000000 worldwide lets take another global look at the spread of the clone virus with r. T. Correspondent site average or so where we have today brand in europe a few countries are organizing some sort of slow activity back then and that qana me in spain some construction work has resumed and a few factories are also reopening later this week and in austria and italy followed with a gradual easing of restrictions followed some small shops open and then we have denmark that has even allowed small children to return to schools and nurseries later this week and here in the u. S. Were cases are still on the rise and account for most of the confirmed cases and thats governors on both coasts are considering measures to begin to restart the economy even though President Trump has made it clear that only he the president will decide when he would be safe to ease those restrictions but new York Governor Andrew Cuomo has said. That United States doesnt have a king we have a president so well be seeing as soon what those restrictions are that are going to be lifted and who will make those decision but in brand i also want to mention that the odd bracket outbreak in some countries are still far from their peaks a great example of that is india who has jest extended a nationwide lockdown for 3 more weeks leaving 1000000000 people on their servier restrictions and youll see that india has almost 11 more than 11000 confirmed cases and a little over 390 deaths but experts say india has not conducted enough has and that the true number of factions are actually much higher last i want to mention that millions of indias poor papa. Lation have been left almost completely without support as jobs have pretty much advantage and incomes gone brown so i want to go back to something we actually spoke. Theres been talks of business is using a 5 year pyramid which is a hierarchy which is a system that china has used previously he talks about that yes exactly so businesses have long relied on a 5 tier pyramid called the hierarchy of controls to reduce workplace restore employees and this will be the basis for Companies Planning to get back to work which china has already like you said implemented so the most affected is the elimination and it goes from most effective to lease effect of the elimination is removing the hazaras so obviously you cant do that until of axiom is found then the 2nd most effective is the substitution now this works for an example in a company where you can eliminate substitute one toxic for another you cant obviously swap out this virus for another the 3rd most effective is the Engineering Controls and Engineering Control is when you isolate people from the hazard keeping them out whole and thats what theyre doing right now globally right then there is a administrative controls thats when you change the way people work like for example in our line of work a lot of reporters are working from home but that doesnt obviously apply to every industry so you can do that right now then there is that p. P. P. Which china has implemented and that p. P. P. Stands for protect the worker with personal protective equipment so i think of it this should be eating feast mags and telling their employees constantly to wash hands and thats exactly what china is doing so governments and companies are facing a very difficult choice in the coming weeks they can either reopen businesses with expensive hygiene controls or were trying to work with fewer controls and accept the risk of a 2nd wave of infections or to correspondent sites average or thank you so much for your help. You can always find the latest news and information regarding the crowbars on portable t. V. Tracker time now for a quick pause but hang tight markets are surging but they are not necessarily reflective of the state of unemployment and. Well break it down with some expert analysis straight ahead and as we go to break here the numbers of the quote. The Unemployment Rate is not protected to reach 30 percent in america higher than the Great Depression the stock markets up 30 percent from recent lows and the size of the Central Bank Balance sheet has expanded by trillions so the question is which came 1st the expansion of the Central Bank Balance sheet or unemployment what is the cause and what is the effect as weve been saying on the show for 10 years Central Bank Balance sheet expansion is the unemployment because it causes the deflation that causes the economic duress that creates the unemployment. Join me every thursday on the alex simon show and ill be speaking to guest of the world of politics sports business im showbusiness ill see you then. Is youll media a reflection of reality. In a world transformed. What will make you feel safe. Isolation community. Are you going the right way or are you being so. Direct. What is true what is faith. In the world corrupted you need to descend. To join us in the depths. Aura maybe in the shallowness. And welcome back markets here in the us are in the green tuesday continuing the mostly upward trend we have seen over the last week so i dont want to waste a time here and lets get right to the details of markets with shawn hyman editor of the logical investor and boom bust cohost christy i would welcome her back now christy you called me bad luck bright yesterday but tell us whats going on in the markets today i go there up. Well yes equities open up sharply on tuesday as investors were more optimistic about the coronavirus outlook with major indexes up over 3 percent johnson and johnson was the best performing name in the dow as a lead rallies in Consumer Discretionary is and consumer staple names and for the 1st time since march the nasdaq has scrambled back above key Technical Levels above its 50 and 200 Day Moving Average is now corporate earnings kicked off on tuesday giving us a 1st look at how devastating the recent shutdowns have been for corporations j. P. Morgan reported that it missed expectations with earnings plunging e. P. A. s at 0. 78 down 71 percent from the 2 dollars and 60 0. 05 support a q one of last year profits dropped to 69 percent year over year which is the biggest annual drop since the financial crisis as the bank recorded a surge in credit losses to 8 point 3000000000. 00 as a braced for surge and defaults j. P. Morgan also announced that it has added 6800000000. 00 in reserves this quarter as c. E. O. Jamie dimon emphasized the need to remain well capitalized and highly liquid given the strong likelihood of a severe recession now much of the optimism stems from improving conditions as 10 states have reported that theyre making coordinated efforts to reopen businesses shut down by the coronavirus now these include washington oregon and california led by california governor Gavin Newsome and new York New Jersey connecticut delaware pennsylvania rhode island and massachusetts led by new York Governor Andrew Cuomo now collectively these 10 states generate almost 40 percent of the total u. S. Economic output so as these plans are still in early stages companies are still bracing for at least months of limited revenues many are scrambling to raise debt in order to ensure continued liquidity but the credit market has tightened but the spread between risky high yield debt and u. S. Treasury widening sharply to about 9 percent now from 3. 5 percent in january airlines especially have been hard hit with Global Airline losses climbing up to 3 114000000000. 00 representing. A 55 percent drop in 2020 passenger revenue compared with last year now there are still no ms ability on when travel restrictions will be eased so while a further slowdown in the penned them expanding is keeping sentiment and optimism some supported analysts are still reluctant to trust a long lasting recovery Goldman Sachs warned that this downturn could be 4 times worse than the crandall crisis with the u. S. Facing the highest Unemployment Rate since world war 2 and as fiscal and Monetary Policy raise to put off fires one after another during this pandemic the fed has become the lifeline to main street as well as wall street the fed and treasury are becoming the main lenders to american businesses and in doing so its putting american capitalism at risk so what is the fed going to do when it keeps on backstopping everything where is the market price discovery then when this its all over will the fed actually retreat now i want to branch out here as shown earnings are out for wells fargo and j. P. Morgan as we just said there they are as christine just said that if they and they have foreshadowed that the rest of the earning season is going to be pretty bad even with the negative revisions that look is not great the so then why are we seeing a rally in markets here on tuesday and really almost the last week when we knew these were coming. Yeah absolutely now weve had is really you know you weve had a sell off that was 35 percent and then were seeing the recoil of that and more thats just because youve got institutional shorts that are covering those shorts and you cover a short with a buy so that makes buying pressure youve got institutional traders that go in for quick trades of a day or a week or a month thats pushing things up and that can evaporate and turn very quickly as well and then youve got the retail money which are just regular everyday mom and pop people theyre fishing for bottoms thats going in and trying to buy on this as well and its pushed you know the market back up towards only down about 16 percent now weve still got one more leg to roll over and head lower and well probably see that happen unfold in the next coming weeks or so now kristie theres more talk about reopening the economy as you just mentioned whats that going to look like and how would it help when there is really still no demand if people really are going out and frankly we dont know what people are going to want to do when we dont have a vaccine or whatever may be used to control the spread of this virus. Exactly were going to see less strict of measures is probably what they mean by reopening the economy theyre going to be open in phases with slowly businesses getting back to business but ultimately its going to fall on consumers and demand so in the recent whole sports fan show that 30 percent dont know that theyll ever feel comfortable attending a live event in the current this year and travel more than 2 thirds of respondents said that they wont be ready to get on an airplane with a 3 months and only a 3rd said that theyll be willing to stay in a hotel so while businesses start to reopen again it will initially be very similar to what china actually experienced a huge demand shock and suddenly you have this void left where we previously saw massive consumption so you will see production ramp up take some time for demand after that and showing what are you seeing with the prospects of reopening the economy to what christie just said if you do start to get those businesses back to work but there isnt the demand theyre going to start having the a lot of overhead that they have to pay that theyre not making any money and now they have really no excuse they cant say oh the doors are still closed due to the coronavirus. Yeah i think that they really dont need to make it like a blanket thing across the nation i really think they need to analyze where the pandemic has been the worse and open those areas more slowly like new york and new jersey things of that those places and then also maybe open it a little quicker in places where like for instance in texas weve had 300 some odd this in a population of 29000000 people in texas so thats very very very low so open places like that a little bit quicker and then you know eventually open places a little bit slower that have been more highly impacted and then dont let people you know travel to the high impact places as well for quite some time on the 1st round of paychecks stimulus is getting to. Is this going to make a difference for u. S. Consumers. Some so that i mean you know if you take an average person that makes 50 or 60000. 00 a year and you pretty much shut his business down you know theres 45000. 00 a month that theyve lost but youre giving 1200. 00 back if theyre not above a certain amount that they were made on their taxes last year so you know in my head will make the rent possibly probably not going to help them make their mortgage and if it lasts for any length of time its not going to help them that much at all and then when you think about is going to help certain places of america better than others like in texas where the cost of living is lower its going to help them more but when then when you get to higher income brackets in places like california where it starts to taper off its going to help them less well absolutely as weve discussed if theres no place to spend your stimulus youre going to put it back into bills and when you put those back into bills that does not stimulate the economy does it keep your head above water absolutely unfortunately it does not stimulate the economy what a stimulus check is needed for now chris i want to ask you a quick question before we wrap up here as we brace for more of these negative earnings as we saw today will we see a big selloff and get to retest the lows or are things going to just keep going up because people are hoping for the best. So. I also think that we are headed for another lay down because once we have the slew of negative earnings we will have an expectation rebalance so right now expectations are high but i thought agent havent really come down enough so we did see j. P. Morgan expectations get lower but apparently the earnings their Earnings Report actually showed that what they reported was actually a lot worse than what the street expected so as we get more data points we can get an increasingly more accurate picture of what were working with and at that point we will either violent these gains back up and retest the lows or we might potentially just churn and grind continuously lower as we have not the previous liquidations of panic selling that weve seen before but just another earnings to a balancing. Cohost christiane and shawn harmon of the logical investor thank you both for your time today. Thank you. And finally its no shock that streaming demand has skyrocketed due to the ongoing lock downs around the world frankly weve seen the data from internet giants that proves exactly that point now roku as we just talked about earnings announced they estimate an increase of 49 percent in streaming hours on their platform in the 1st quarter of this year compared to the same period last year now spiking to more than 13000000000 hours watch think about that teen 1000000000 hours watch now you may actually be watching this program boom bust right now in Crystal Clear High Definition with the portable t. V. App on your roku device right at this very moment and why wouldnt you when you could watch it instead of watching it in standard definition now on that news to roku saw a 10 percent jump in their stock price and added more than 1000000000. 00 to their market cap despite saying that the company could lose as much as 60000000. 00 in quarter one of 2020 and thats it for this time you can find the brand new portable t. V. Episode smartphone through google play and the Apple App Store by searching portable t. V. Or streams to your t. V. By downloading the portable t. V. App on apple t. V. And as i just mentioned on roku devices you can also find our coronavirus tracker on the portable t. V. App 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 boom bust r. T. So you next that. Because you. Want to be done. You know there are tracks in the wired. Music he will turn you. Anywhere near. Conditions on the i mean 67. Theres you know theyve been locked up in a cage outside you see no protection from the weather the sheep you know the courtier the rain the snow the funder nothing they have no protection. To get you. To get through kid. Across the u. S. Cruel puppy mills are supported by dog shows and stores most of the puppies that are coming from this large Scale Factory farming kind of operations are being sold and it stores even joined a good businesses are involved like the mom center there has been a shocking amount of organized 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 dont buy dog. One else chose seemed wrong. But old roles just dont hold. Any old belief yet to shape out just they become agitated and in gains from it equals betrayal. When something find themselves worlds apart we choose to look for common ground. Its just every small cycle dont. See the link you see sometimes they can be cities usually they dont believe its going. To take a little shots walk to see it next dont. Give a solution safety feature. So that he. Joined me every thursday on the alex simon show and ill be speaking to us from the world of politics sport im show business ill see you then. Welcomed on contact today we discussed the cias hacking of the Global Intelligence network with William Bennett point you know everybody there what theyre doing what theyre thinking what theyre planning i mean you have the opportunity to manipulate them any way you want by causing certain things to occur and making certain suggestions to certain areas or you know set just simply outright blackmail against them or anything you can leverage against them or anything that they against somebody they really care about so you have an opportunity to do all of that. The Washington Post recently published a piece about a swiss company