Transcripts For RT Boom Bust 20240714 : comparemela.com

This is broadcasting around the globe and covering the world of business and finance of the impact upon us all on the inner burrito and im christiane washington heres a look at whats on deck today joyce the bank stock is bleeding after the Company Begins a massive layoffs period International Regulatory attorney miles edwards is standing by to delve into digest shrinking pains. That are back up after iran has responded to its tanker being seized in off the coast of japan alter taught or with above the training joins us to sift through the seizure on the seas and later British Airways is facing a major record find over its data breach molly barrows contributor to americas lawyers lend us a hand to check in on the turbulence facing the english airline showed today the lets go and die right in. A dismissal by president ial decree for the governor of Turkeys Central Bank leads our global report today as president crosses a new line in his push for lower Interest Rates the turkish president s move was announced on saturday which named Deputy Governor murat ois sall to the top post while mr statement cited no reason for the firing the turkish president newspaper to her yet claims that he told legislators from his ruling party what may already surmised the president by the governor because he rebuffed mr push for lower Interest Rates the turkish lira was down by more than 2 percent in Early Morning trading on monday on the news also on monday ill leave public on a Founding Member of the a k party who effectively held the governments economic portfolio for over 10 years said that he is founding a new rival political movement. Another banking a regular. The news in years Punjab National bank is claiming it was the victim of fraud after their 556000000. 00 loan to bush on power and still went shares in the partially owned state owned by 11 percent on monday after the weekend i know smith that the bank had filed fraud claims with police and regulators the Indian Central Bank says they discovered that nearly all of their half 1000000000. 00 loan to shawn was diverted after taking a closer closer look at the bar was books in the wake of the seans bankruptcy p n b has been under scrutiny for lax in london since seeming to lose nearly 2000000000. 00 the bank lent to the companies of the fugitive financier and former celebrity jeweler miramonte and mr modis uncle. Bank begins its a radical overhaul on monday as it exits its Investment Banking and Trading Operations and lets go 20 percent of its workforce the struggling lender is splitting off 74000000000. 00 euros of its assets in an attempt to focus and invest its core units and Retail Banking and european corporate clients the 8300000000. 00 Restructuring Plan is the largest in the banks history as it intends to cut its risk weighted assets by 40 percent this comes after it had already lost 1600000000. 00 on a munis investment it bought before the 2008 financial crisis to put that into perspective the loss is roughly quadruple its entire 2018 profit previous attempts at bailing out the struggling lender has failed as talks of the german kosmos bank broke down now plans easy for the lender involves an out its noncourt assets and dumping them into a bad bank silo this strategy has been used previously during the 2008 financial crisis and allows bank to free up capital that can then be used to bolster up its financial strength dva currently has 43. 5 trillion euros in gross derivative notional and they would be hard pressed to ringfence all of that toxic asset into a modest 74000000000 euro so. Oh joy is the latest bank to fail fall from grace after earlier this year 3 banks on 3 different continents failed indicating that there is a systemic problem and that a new Global Crisis could be brewing and with more of the latest details just publicized wind down or meltdown is international regular regulatory attorney myles edwards. So miles door to bank right now is arguably europes Biggest Investment Bank right up there with barclays banking analyst Stephan Wyler recently said this when we were in rio maybe facing and the financial crisis in the next years i dont believe it but if its coming its not good for the banks generally the overall banking which means that the bank will force all kinds of products over the people usually have their private account somewhere brokerage somewhere still their real estate financing or other financing some of the business is going down substantially and if you have problems anyways it will be difficult to to do the right decisions in that sector. So now do you think this restructuring is a harbinger of a bigger problem within european banks and general deutsche a bank right now is not the only one loaded with trillions of euros and Nonperforming Bank loans and directed at us and this could actually quickly escalate into a broader European Crisis is this restructuring cost cutting measure enough to stabilize a bank or do you think this is just the tip of the iceberg and this is a sign of a bigger problem. I think that its not going to be helpful to panic i think its really symptomatic of whats happening with european banks in general and part of the blame on the European Union because since 2008 u. S. Banking regulators the European Union really has not legislated any major banking reforms or regulatory actions regarding european banks and so now we are in a situation where european banks all of them including Deutsche Bank are declining words u. S. Banks are becoming more profitable and part of that is the fact of the way theyre structured so for example in the United States 70 percent of investment needs are dumb through Capital Markets whereas in europe only 30 percent are done through Capital Markets so what that says is the United States Banking System is healthier because it derives the majority of its income basically from investment related activities rather than lending itself which means a show less assets on their books and theyre less sensitive to any sort of Interest Rate or any other situation happening in the economy so you know again i really believe that with Deutsche Bank its really too little too late with and as you know with Deutsche Bank since 2016 theyve been suffering tremendous regulatory scrutiny in 2016 they paid. 40 while they paid 2012 point 6 mil 1000000000. 00. Fine along with Credit Suisse for basically selling toxic debt if you move forward to 2017 the Federal Reserve fund them 41000000000. 00 for having an adequate and i Money Laundering procedures and then also in that same year they pay us regulators 220000000. 00 to settle a case regarding the fact that it was alleged that they defrauded governmental and nonprofits by manipulating live bore and other Interest Rate benchmark so theres a real crisis of confidence in the market and investors are losing confidence and Deutsche Bank yeah its a really remarkable story and you put some important context in there miles and now at this point as part of this restructuring effort theyre creating a bad bank where theyll you know sort of scapegoat all of their bad bad assets and so that weve seen other banks try this notably citi group did this in 2009 but it has been seem to be trying to restructure or downsize itself almost every quarter for the past few years will these drastic cuts finally be the end of it all or and will we see even more bloodletting and downsizing perhaps in the next few quarters. I think were going to continue to see it and what Deutsche Bank suffers from is really a history of mismanagement and a culture that has made tremendously terrible decisions and what were seeing now is that analysts on the street including moodys that just recently again downgraded its fixed income investments were seeing a situation where there is going to be a continual drop in their share price lack of confidence and again as i said before i think its going to be too little too late in fact one analyst recently said that its market cap. Its probably about one 5th of its book which basically means that theres a question about the assets they even have themselves so i think that Deutsche Bank will continue to try to do whatever it can do. To stay afloat but you know they have a history as i said of a really poor culture of mismanagement and bad judgment and its going to take a lot to reverse that and i think that a restructuring is not going to do it alone i think you bring up a really good point their market cap has drastically strung the stock has shed more than 40 percent since suing took over as c. E. O. 15 months ago and right now its trading at about 7. 00 and this drastic decline is somewhat reminiscent of what happened in the early days of the lehman collapse is this bank in a vulnerable position from speculators that could actually jump and short it down to 0 i believe the Short Interest right now in the stock is currently out about like 5 percent. Yeah thats correct i actually view it interesting a lot more like a bear stearns and lehman because unlike lehman the bank is not in default its not bankrupt they still have some viability but like bear stearns theyve made some really terrible decisions which are scaring off institutional and hedge funds themselves and so whats happening is theyre shedding people but at the same time they want to promote itself as an organization you can go to that can support your needs other than what its traditionally done as a Business Model so what i would say is that the stock will continue to decline but at some point in time like a bear stearns we may see someone coming in trying to purchase whatever remains of it. And our National Regulatory attorney miles edwardes with a masterful explanation thanks so much for your time. Thank you very much. Time now for a quick break but hang here because when we return oil prices are back after ron has responded to a tanker being seized off the coast of japan. Also taught horwitz about the trading joins us to sift through the seizure on the seas and later British Airways thats fine over a data breach molly barrows contributor to American Lawyer and the champion on the turbulence facing the english airline and as we go to break here are the numbers at the close. Join me every day on the alex salmond show and ill be speaking to a guest of the world of politics or business im show business ill see that. Not a movie. But its certainly one of. The much for the little bit over there you know what theyre. Quite a good sort of produce here already for. The trees. Are ronnie and officials said monday that Great Britain seizure of an Iranian Oil Tanker was a kin to a robbery i would not be tolerated the iranian tanker was impounded into baltar on july 4th due to an allegation that it was carrying oil to syria which would be in violation of the e. U. Sanctions a claim in which the iranian Deputy Foreign minister denies. Meet us to contrary to what the British Governments claim to the destination of the oil tanker was not serious or to the port they have referred to does not have the capacity to host such a tanker and the destination was somewhere else it was passing through International Waters in the strait of gibraltar so there is no law that allows the British Government to stop this tanker we believe the seizure of the ship is an act of piracy and we demand the rapid release of this tanker. Joining us to discuss the impact of the situation on the oil markets as talked about before with a bubble trading so im sure the ma. Markets my thought process this news and moved on by now but what about the prospect of more features like this and the future rolling in the oil markets and pushing up risk. Well you know i think when you look at the price of oil you look whats going on and you look at how much we can now pump ourselves and put out and supply that its really not that big of an ordeal here it may affect brant a little bit but its not going to affect deputy i. R. L. And i dont think that theres that much of an ordeal other than i think that iran is looking for a fight right now and i think thats more the case here with some of the actions theyve had even with some of their nuclear talk and other things but again the actual the seizing of the tanker is perfectly fine and i dont see any problem in the markets have not reacted in kind where theyre showing the day in the days where they would have been fear and oil would have been much higher than is now but our oil was barely higher today if at all very interesting so the fundamentals are the market is pretty much flooded this doesnt do much at the surface. No doesnt it really it really doesnt mean a lot because again price always determines and typically in a in a commodity like oil what will usually happen is you will see a big fear bid in the expiring months or like for example in august all right now from a future standpoint august will be much above the subsequent months behind it right now its still in perfect formation meaning that the streets are already recognize whats going on and has no fear or no concern right now and on the other side of this just to get a sense of the outer edge of risk for oil markets a blog post Oil Price Dot Com by Energy Consultant Vincent Lauerman site it says based on an april 20 teams study by the riyadh based King Abdullah Petroleum Studies and Research Centers for the Saudi Research study in a World Without Spare Capacity in which the strait of hormuz was closed all prices would have spiked in that scenario above 325. 00 per. Theyre all in one does that sound that estimate of 325. 00 a barrel sound in the ballpark in the event that conflict were to close the strait of hormuz and chew do you think markets are already busy pricing in perhaps an increased risk of military conflict. Oh i dont know 1st of all i dont think 325 dollars is ever realistic i think thats just a big number so i decided you know if you go back to july of 2014 and we had a major scare in oil before we were producing our own oil at this level we only went to 110 i mean the high of oil at all time i think might have been 160 so again we can look at it and say that it got a double from there but i dont see it and i dont see a real conflict in the strait of hormuz because believe it or not theres going to be either the United States somebodys going to step in and take care of our around in a moment if they decide that they want to to fight and try to depress that issue i think its more of a veiled threat so i dont i dont see the rest i think the markets have already accounted for whatever is going to happen there right now knowing that the United States or somebody will step in and take care of iran if they decide that they want to push this a little bit farther down recapping the opec meeting from last week this defacto opec plus coalition effectively thought here a b. And russia are driving opec supply policy even as opec market power fades as u. S. Oil output increases so whats your take on the outcome of this latest round and the prospects for the future. Well but it is a worthless organization begin with they have no value they have no power you know if you go back you know 15 years ago yes they had power over the states and they could force the price of oil as we go back into the seventies and eighties when they were really a true control but now the 1st of all they cant keep their word within the group of the group of opec you know they say theyre going to theyre going to cut down supplies and meantime they always find a couple of nations that are pumping like crazy anyways so whatever opec says is basically worthless is that its not worth the paper be printed on or the words that are spoken to know how to take their from baba and now whats the feeling among your peers you talked about the slowdown in oil demand and the big factor there seems to be the u. S. China trade war so whats the feeling among you and your peers about a resolution of that coming anytime soon whos got the most to lose from either a resolution come soon or a prolonged standoff in that fight. And why the of the markets say that theres no resolution sooner rather than later i think china is going to be forced i know that they have really talked about they want to play the long game when they can outwait everything but theyre getting it theres a lot of damage being done in china right now