Transcripts For RT Boom Bust 20240713

A bailout package in the billions included in the 2 trillion dollars stimulus package signed on march 27th was about 25000000000 dollars for the Airline Industry but until now the Treasury Department in the airlines had not come to an agreement on exactly how or under what conditions the airlines would receive that money now they greenman which came together late tuesday includes warrants that could lead to the federal government owning equity stakes in the companies and requirements that 30 percent of the assistance would have to be paid back now according to treasury secretary Kerry Stephen minucci and the airlines that will receive the funding include Alaska Airlines Allegiant Airlines American Airlines Delta Airlines Frontier Airlines Hawaiian Airlines jet blue united sky west and Southwest Airlines now conversations continue with airlines regarding their potential participation now thats of course what. Joining us now to discuss this boom bust cohost and investigative journalist pence. Ben thank you so much for joining us today you know yesterday when we saw the reports of this all coming out it was interesting to see how it was written as the airlines have accepted this bailout theyve theyve done a gracious moment and accepted it but i want to start with the issue of repayment here so far we know that about 30 percent of these bailout funds will be in loans and the other 70 percent will be in grants why exactly is that. Right thats where the acceptance part of the story comes from because the airlines didnt want to have 70 percent of these come in the form of grants and 30 percent in the form of loans they wanted 100 percent of them to be grants we dont have to pay any of this back because were so important to america and to the economy of course they didnt get that deal so thats why they went ahead and accepted the 25000000000 this way but heres what we know about it so and some of the stuff is just so ridiculous but i got to tell you for instance the treasury officials are situated turman that 70 percent they say of the grants that the airlines would get would actually benefit taxpayers get this they say in the form of payroll and income tax receipts that doesnt make any sense at all they dont loan someone money if they can pay it back to you and then say thats a benefit to me because they were going to give some of the back in the form of taxes thats thats crazy and so essentially what theyve done is theyre saying 30 percent of it youre going to repay back at some point but i got to tell you this stinks this whole thing 25000000000. 00 going directly to airlines to build them out when in the past we know this that American Airlines and Delta Airlines so Many Airlines have gone into bankruptcy in the past it doesnt mean that those airlines shut down they re emerge from bankruptcy it does not mean the end of the Airline Industry which is what so many in the media are telling us now what are the most interesting portions of this deal is that it does seem to include some ownership stake in the airlines for the u. S. Government how does that work into that actually going to happen. Its kind of a crazy idea you know especially in a moment when you have a trumpet ministration that has been running on the idea that the u. S. Will never be a socialist country the president talks all the time about how socialism so terrible and yet they just put into this deal a very socialist measure which essentially says this that essentially the treasury is going to receive stock warrants worth about 10 percent of the loan amount that exceeds 100000000. 00 now there are some very very Small Airlines that might get less than 100000000. 00 but every major air carrier is getting billions of dollars. Were talking about American Airlines getting Something Like 5800000000. 00 delta is getting around 6000000000. 00 for their part so when youre talking about these Airlines Getting billions of dollars and the treasury is going to now hold stock in those companies which in theory they would say oh the taxpayers hold stock but thats essentially socialism where a Government Entity or the government itself owns equity in a private industry its crazy well bet and i only have about 10 seconds left here with a quick answer but is there any actual possibility that theyre going to take those more its up and actually the u. S. Will take those stakes. It is possible its not likely i guess necessarily but why put it in there anyway so if youre not going to take that stake why would you include it in this bill at all its outlandish for it to be in there and i was one of my people i know were short i want to remind people that meanwhile you have Small Businesses all over this country that dont even qualify anymore for this 350000000000 not in grants but in loans that were going to be made to them and you have millions of companies that cant get anything while the Airline Industry is sucking up all the air in the room and all the money in the room with a 25000000000. 00 bailout for just a couple of companies so were going to get to that in just a 2nd here boom bust coast and investigative journalist ben swan thank you so much for your time there. With us and for more on this bailout of the Airline Industry and some other Economic News were joined by professor Richard Wolffe host of economic update and author of understanding socialism now professor wolf you just heard what ben said and actually that was exactly how i was going to open this interview was how can it they put there they were the 1st to have their hands out and now were seeing even just within the last couple of hours the s. B. A. Loan program is basically falling apart and its already run out of money so what do you make of this whole situation with this Airline Bailout. I could not agree more with your previous interview re he has it right this really burns smelled terribly like a reality for the old to read at least and nobody a lot of those who need it most a small correction the total value of the gift of the airlines is closer to 6060000000000. 00 than 25. 00 yes its 25. 00 in outright grants and loans of the sort you spoke about but theres an additional 25000000000 of what i call loan guarantees in which the federal government says you go to the bank borrow money to get the best deal imaginable because we guarantee the law and if the airlines cant pay it back the government will and then on top of that another 8000000000. 00 for the carrier the cargo car of the airplane business which all those companies are involved in so leases are youll mongolias gifts and it will be mostly the discretion of the boards of directors of those airlines so lets say a Dozen Airlines 10. 00 to 20. 00 people on each Airline Board of directors theyre going to be the ones who decide how do you lose all of this money theyve always islas did to profit the shareholders and the top executives there is no reason to assume they wont do this saying now why do you permit this bailout to be controlled by the people who have bankrupted these airlines over and over again well we have to look into a very strange crystal ball to get that incident and as we mentioned i mean they were so generous to have accepted these terms on this but professor wolf i want to go back to the f. B. I. A question i had there is you know were just a couple of weeks into the Small Business program that is supposed to help the Small Business who are hurting and theyre already saying that this could be running out of money at the by the end of wednesday afternoon and yet were still talking about an Airline Bailout so what do you make of that situation. I think youre seeing exactly what went with this country what it the biggest businesses at the biggest farms to support the biggest lobbyists who get what they want in that 800 page bill the smaller businesses have lesser lobbyists and the average citizen has basically no lobbyist at all and thats the bill which you get yes theyre running out i mean let me remind everyone the 1200. 00 that people were going to get and were attached players you know the average income of an American Household about 60 grand a year you worked out that 1100. 00 a week what were being given is one weeks money its already 4. 00 weeks immediately shut down weve been losing money this is a joke when you compare what has been given to average people and the damn lot of knowledge at the top who have more responsibility for this economy and any of the rest of us which they proudly tell us all the time you really have to shake your head in disbelief and now professor wolf you just mentioned the stimulus checks that theyre theyre actually getting peoples accounts or getting direct deposit of course as you may have read according report some of those paper checks may actually be delayed as the Treasury Department ordered that president trumps name be printed on them but new dad is actually saying those who have already received their checks and already are spending it 16 percent of that is going to take out and delivery restaurants 10 percent on gas an additional 9 percent at the Grocery Store and even 5 percent is going to video games if this type of spending actually stimulating the economy or or is it just you know is that just getting people by. Its very minimal getting people by its over at the end of the reach for me give you an example most European Countries heres what they did they told the companies gunfire anybody they dont have unemployment instead keep 300 jobs keep them aware of whats going on at the top we the government will help you pay their wages and salaries for an indefinite period so theyre not anxious when they get the job back at the end it will not go take a different job which may not be the one that they train for all the inefficiencies of what were doing is gone and a much more stable rate read costing more money by all means but theyre not his riches we are so here its purely the way this system favors girls that that is governing whats happening professor Richard Wolfe host of economic up day and of course author of understanding socialism thank you so much for your insight well have you back soon to talk about this. Thank you brant glad to be here. As the total number of cases of the coronavirus has no eclipse 2000000 worldwide lets take another look at the spread of the crowbars globally with r t correspondent sorry traveler sorry whats happening today brenda 2nd week of april marks the deadliest week since the pandemic arrived in the u. S. 3 months ago and now more than 2000000 cases have been reported globally and the u. S. Accounts for about 30 percent of those cases with the more than 600000. 00 nationwide and but at the beginning of this pandemic we all looked at china china right dealing with the outbreak and at the time it seemed to be completely out of control but 2 months later the situation is very different right now after aggressive testing and quarantine efforts that were mandated by china and numerous other countries around the world are also in the beginning stages of managing their own outbreaks which is what appears to be a leveling off so i want you to look at this graph right now so in these countries once so in this country show that flattening the curve does not mean immediate and other chronic virus but a slow decline and a great example of that is france germany italy china portugal and greece which are all already in the curve as you can tell instead of going up there kind of flattening so this is all great news and even though spain and italy have the 2nd and 3rd most reported cases in the world behind the u. S. Both European Countries are beginning to see a decline in the number of newly reported cases so it does appear that the peak of the virus has passed as the numbers and decayed and this is all credit to things lie. Social distancing testing and personal hygiene and now theres also in these countries which have dramatically reduce the spread of virus which is also why some European Countries have started some industries back including spain which has resumed some factories and the latest germany who Just Announced other plan on reopening their economy on april 20th and lets not forget china which had a lockdown but ended in one on on april 8th and the citys transportation hub has actually resumed operations where people are even starting to travel again and wealthy and consumers across. Provinces have even turned their erma store which is of course known for their famous luxury bags and made a record sales in fact some 2700000. 00 just in one day so all positive signs for the economy so but we also resell countries flattening the curve by brand theyre also countries that have not had flattened like the u. S. U. K. Brazil and india who are really struggling too slow with the number of infections and exports are actually warning that india might be the next major outbreak while south america is also struggling to stop the spread of the new coronavirus cases including countries like brazil in ecuador which are likely being way under reported it going back to retail as you just mentioned quickly how is the u. S. Doing so were obviously seeing Grocery Stores and pharmacies in high demand at the moment right but many other businesses have closed and consumers are drastically cutting their spending because guess what 15000000 americans have lost their job and as a result u. S. Retail sales plunged 8. 7 percent. This month the largest decline ever way worse than previous recessions which rose back there into 2008 and ran the Retail Sector accounts for more than one in 10 u. S. Jobs the only other industry in the us that actually employs more is health care and stores that generate billions of dollars in rent for commercial landlords ad sales for local Media Outlets and local cell level receipts for state and government so this is really trickling down to everyone and were seeing all the pain happening right now in the economy r t correspondent sorry herbage or thank you so much for that excellent report today. Margaret can always find the latest news and information regarding the coronavirus on portable t. V. s coronavirus tracker time now for a quick pause but hang tight because well be right back and as we go to break here the numbers of the quote. Her. Comments the code name change the International System u. S. Trying to relations be altered is the experience the. Style to me and this is to put on the chain on the stand could you know that thats. What youre going to show. Just to. Show. You some more push. Pull you produce not just the most unusual not among the old so the east. Of. The world is driven by a dream shaped by one person. Thinks. We ask. And welcome back Global Equity markets are bleeding again after would have been a mostly positive 7 day stretch so lets break down whats happening with some expert analysis from todd horwitz chief strategist at bubba trading and boom bust cohost christy i am going to start with christie here so christi tell us whats going on with equity markets today. Well bargains open sharply down wednesday as we start to get Economic Data and weak banker earnings coming in all below expectations and mind you know expectations i have already been lowered or a my eyes low are ready so theyre coming in even worse and that we sell about 500. 00 points around the open and close down almost 2 percent so today the department of commerce reported that march wintel sales saw the biggest drop on record and the biggest annual decline since the financial crisis so now we have all the nancy j. C. Penney preparing to file for bankruptcy and now thats been closing all 850. 00 of its stores and furloughing its 95000 employees across the United States marshal showed that retail sales plunged 8. 7 percent in march with clothing in excess and shopping 50 percent of all my food and beverages which dropped 25 percent and then you also have new York Manufacturing numbers coming at an all time low 78. 2 percent so now essentially again a double whammy the 2 big pillars of the economy the consumer and the business all getting hit and all coming and worse than expected you know kristie were going to get to some of some of that Bank Information in just a minute but i want to talk about oil is actually kind of had a dismal day here whats going on in the oil sector. Well done 80 i crashed below 20. 00 overnight before struggling back up a bit as huge inventory builds were reported and the i. A. E. A. Commented that this is a historic Production Cut it wont really be enough to counter this record demand slump this year demand theyre saying could fall by 29000000. 00 Barrels Per Day in april driving demand to its lowest level in 25 years now stockpiles are rising everywhere and at this rate white storage will be exhausted very soon and since this entire Historic Deal doesnt really kick in until next month the battle for market share is still on to win asia right now how this price war between me and saudi arabia and just how its icy for crude after saudi arabia initiate a price war again our lands week and now bob i want to bring you in here dont worry i dont forget about you i want to follow up on a lot of this oil here it looks like texas is attempting to lead oil Production Cuts now we havent had a free market in the oil industry in some time with all the intervention but at least there was the illusion of that free market book but with Texas Producers now pro rationing Oil Production is this the beginning of the end for the u. S. Free markets in oil. That if you look at the free markets in general when you have the Federal Reserve the largest ponzi scheme of the world of legalized by this game thats always a problem i think that youre going to see this going back and forth this goes back to the old bread days where they need to cut production because theyve got to resign the supply and i think that the free markets will will win out in oil because again all theyre doing now is trying to accept the bleeding it but if you look at oil going into the future june oil is higher than may and july is march higher than ball so again were seeing some bullshit action behind the scenes but we are seeing right now is that you know many are always coming off the board tomorrow and its just theyre just sell you because again there is that going to increase in the man but the market is pricing in a bigger demand coming down the road i think we will see it once these idea of the economy open again you know kristie were. Are bracing for a slew of negative earnings reports and this is where the banks come back in because weve seen 4 of the big guys the big banks really take a beating this week alone. Is this an indication of how just how bad things are going to get are or are they could get worse. This is an early indication of bank of america as expected report of big badness on earnings despite the lowered expectations coming in even worse so profits were down 45 percent during the year and the stock sank 6 percent so and in response so now most of these big banks have now reported giving us an early look at the damage theyve all reported more than 40 percent decline in earning all across the board and now the big 7 u. S. Banks have already set aside some 27000000000. 00 in credit last provisions and thats lost as 4 times greater than the provisions set aside last year and the most since a financial crisis so the question is will that actually be enough all the banks are expecting massive massive defaults and delinquencies and no man knows how bad the delinquencies and rouse will be and as a result they will face even bigger profit declines later on now Goldman Sachs luckily also reported losses dragged down by debt and Equity Holdings but it was buoyed up by gains in trading so out of all of us wall street here is Goldman Sachs derives the biggest share of its revenues from trading and m. And a so in that respect it was slightly more insulated than its peers and did but better. Lets go to bubba noted fed enthusiastic the old saying dont fight the fed is certainly apply here in the last week weve experienced one of the best rally since all way although today not so great but will this actually hold that should we just ignore fundamentals here or are and just buy whatever the fed is buying at this point. I. Think its going to hold i think when you when you look at the overall picture youre seeing the sugar rush the artificial buying right now i think i dont buy that the markets are going to make new lows before its all said and done right now youve got the fear of missing out playing in because again youve got this issue that were all is can you go. With your money i mean you can go into the back into the bonds or in our banks because theres no place to go so money is flowing in but were in right now the markets are extremely a liquid right now you have no volume so all youre seeing here is some artificial movement before its all said and done as the fed is always on the past is this markets going to fall apart and again we will find somebody will overcome but i believe be much lower than we are today and now. Finally i want to head over more thing the Small Business bailout fund is expected to run out of money we just mentioned this a little bit ago it is expected to run out of money by the end of wednesday but most Small Businesses are still actually waiting for the loans to even be approved whether theyve even it been able to apply so much because its been such a problem so what happened all that money and are we going to expect more government money coming soon. I think that theyll get their money the ones that have apply i think the role be more the big problem with these packages where you know brands is that when when that when the governments got to negotiate the other party where we have to be at the time to send to the left theyre going to stick all this crap and these bills which at the end of the day we pay for anyways so because theres all this is all going to come back in tax money at some point and thats the problem with this whole deal i understand whats behind it and i know we want to get people working but without the economy rolling and without companies in business its kind of hard to figure that even the stimulus money is going to help because theres nobody theres no velocity of money theres no turning of money were just in a bunch of illiquid things right now Todd Horowitz chief strategist at bubba trading and boom bust cohost chrissy i thank you guys for that expert analysis. And during these times of social distancing in lockdowns many of us are forced to work from home for instance here on boom bust we rotate weeks hosting and producing the show from our homes and from the office you see there about this day ok here every other week me generally this means operating systems a few miles away and a convenient matter but what if your project was over 100000000 miles. As a way well scientists at nasa are doing just that with the mars curiosity rover in a post on tuesday the space agency explained how a team of hundreds of people are operating the rover from their homes much of the work that would be generally conducted on Super Computers is now being done by a laptop or on web services its not just maintaining the rover either the team said it recently drove up iraq drilled a sample and sent the data back to the team to be analyzed as if it was a normal day at the office even if that office is nasa thats it for this time you can buy the brand new portable t. V. Apple billboard smartphones through google play in the Apple App Store by searching portable t. V. Or stream us to your t. V. By downloading the portable t. V. s on apple t. V. And roku devices as well you can also find our coronavirus tracker on the portable t. V. s where you get the latest news and information about the spread of the bars and as always check us out on you tube dot com slash boom bust our to see you next time. In our market which i think is a great market to give an indication of where prices are where theyre heading the fact that fine art of something and other auction houses has gone up dramatically over the past 10 or 1520 years spectacularly so its not reflected in the price some bread. And now its starting to be that way so that inflation that we saw in the High End Products is down going to end up being in the staples like wheat bread food chicken i just saw somebody post an image of a chicken for sale somewhere that price was a 100 percent. Humanity is on the edge of a precipice thanks to continuing destruction of the natural world. You just seem laid out a lot of bills lots of. Losing much of a later period of. Less than nothing you can hold up. The bill you. Got over the war. Or the. Only dealing in muslim lands as a little boy can sit around and stuff it and ship them through that disables the movement. Of human activity has brought us to the brink of the worlds 6th major extinction of it and the people in this film just come to get anymore. Lead. Live from the World Headquarters of the r. T. America in our Nations Capital this is the news with rick sanchez pedal get everybody im rick sanchez i want to welcome all of you for all over the world who are watching us right now especially those of you who are watching on portable t. V. The app and play conversation is turning toward what will actually happen in the future how will our lives actually change and heres what i mean by that a lot of people have been led to believe that had some designated time some magic