Transcripts For RT Boom Bust 20240713

The fed says theyre going to help but it doesnt help the market for them but the one to show you cant afford to mess im good at ive been sworn in washington. Doesnt know theres a rate cut but it doesnt stop markets from dropping your lead a 1000 points will investigate why the fed in the region is not helping us and want somebody of billions into the tech in the little box were going to tell you about at least one huge acquisition. To pay 500000000. 00 for throttling i phone users in order to force them to purchase new phones and batteries but its 500000000. 00 a year were not we have a live report so much to get you on this very busy day so lets get started. The Federal Reserve decided to pull the trigger Tuesday Morning and announced an emergency rate cut of 50 bits in response to the growing economic threat from the fallout of the quantum virus this is the 1st time this has been deployed since december of 2008 during the financial crisis as chairman powell said the coronavirus was having a Material Impact on the Economic Outlook in addition came 2 weeks before the feds scheduled meeting but rather than instilling confidence the market is digesting this as a sign that the weakness is much greater than previously thought analysts have commented that this issue than seemed rushed and panicked and didnt really instill any confidence in fact quite the opposite it damaged confidence making investors increasingly risk adverse so it seems like the fed is stuck damned if it doesnt cut rates in the markets plunge and damned if it does cut rates and the markets take a sign of poor confidence markets were quick to digest the move popping up 300 points before turning negative as participants gauge what the impact of the cuts will be and subsequently tanked over 2 percent and for those of you who have been trading off. When the market says 2015 today was quite reminiscent and should come as no surprise this was a buy then rumor sell the news set up it seems like participants believe that this is nothing more than a temporary bandaid in order to buy time until sentiment improves and fiscal stories figure out the appropriate response the pony response is that rate cuts will solve everything and will fed as well fed and Central Bank Liquidity but this time around a rate cut alone will not be able to uplift the negative Economic Impact no amount of stimulus will help tackle a virus Monetary Policy will not help get people to spend money to travel to make investments to purchase new houses this is a demand shock in which the market is now in uncharted territory and traders were hugely disappointed that the central bank was not prepared to use any additional tools to lift the economy now despite that cut today President Trump is still not satisfied tweeting that the cut isnt enough and another 25 bit is expected in april. And here to give us the latest is danielle de martino booth former fed insider so danielle it really does look like you can be damned if you do and damned if you dont all the analysts and economists we hear from have all said that the fed needs to be more proactive they always act too late theyre behind the curve well look for once the fed is ahead of it and everyone is freaking out its interpreted as the risk to the economy is even bigger than currently anticipated so what do you think did they act appropriately here. Well you know look look look at what a difference 24 hours can make right i mean yesterday at this time were marveling that the dow was at nearly 1300. 00 points now it was now its down nearly 800 points the the fed the market excuse me yesterday was celebrating the fact that it was going to get this emergency rate cut it got what it was clamoring for and then the fed got punished for it to go to go back to how you introduce this segment the fed is damned if it doesnt and damned if it does and you know as of now we have more than 12025 basis. Rate cut price for when they meet on march 18th if markets continue to behave as they are i would say that theres going to be another 50. 00 basis points that are expected and that gets us very close down to the 0 bound and brings about your 2nd question which is what is the fed going to do next then you know is part of the issue here that this is a situation that really is beyond the fed the fed really shouldnt necessarily be the answer to any of this look we saw the fed do the same thing during the 2008 financial crisis even in 2001 really during the tech bubble and in both instances they werent enough to hold back the recession in this case you know since 2000 a weve been looking at what about 12 years of not just intervention but almost market manipulation at some point of the fed just stand back and say lets let this thing ride and see where it goes. Well i think it would be kind of irresponsible for the fed to say lets let it ride that being said and to your point i think the fed needs to step back and say these are rate cuts this is Monetary Policy this is not going to be able to address what is happening in the economy due to the coronavirus this is when you see other fiscal and federal agencies step up to the plate now is the time for the Small Business administration to work in coordination with all of the banking and regulatory authorities to make sure that Small Businesses across america that are going to be hit by this virus have adequate sources of financing to bridge the gap if this is just going to be kind of and into ruction to growth weve already begun to price in a recession i would say that thats almost a certainty at this point but again it is up to other agencies other authorities inside the beltway to address what is going to be coming for so many countless millions of Small Businesses across america now there are some questions regarding the even the efficacy of Monetary Policy in the 1st place and what tools remain as rates move lower so cutting more will be idea before we know it and isnt going negative a possibility now. And why arent additional measures being considered things like easing up on lending standards bridging loans to companies and Small Businesses you mentioned grants and probably the most importantly why are we lifting the tariffs. Or ok so all of the things that you just mentioned outside of the fed possibly growing its Balance Sheet which you didnt mention all of the things that you just mentioned are well outside of the of the feds purview it is not the feds place to address any of the things that you just mentioned and if i would if i would say that there is one thing that the last 3 generations of fed chairs have done were talking Greenspan Bernanke and yellen it is that they have allowed themselves to be bullied pushed into a corner and do they have a fiscal lifting when it really is not their place to do so this is the time for jay powell to say the Federal Reserve is happy to coordinate with any entity in washington to help facilitate and youve got any type of policies that are going to provide relief but our direct toolbox is not efficacious it does not work in a domain what is going to be harming the u. S. Economy very quickly will have about 30 seconds left but to that point how dangerous is this dependency on the food as you mentioned a lot of things that christine mentioned or outside the purview of the fed but the fit is been operating somewhat outside of its purview for some time now it seems like at some point we either have to cut some dependency on them or we have to allow them to take on more of a role i mean i would never want to see them take on more of a role but it seems like we have to go one way or the other last word here. Does it does seem that way and this is what happens when the fed has allowed the tail to wag the dog has allowed the market to dictate Monetary Policy it is back them into a tight corner it is unfortunate to see the markets making Monetary Policy and if the fed has to make a stand and draw a line that now is going to be the time not when were at the negative found. Both former fed and i thank you so much thank you. While the stock market. Has been taking a beating now for really over a week some companies are moving into massive expansion in light of the coronavirus one of those companies is massachusetts based Thermo Fisher which has just agreed to pay no less than 10000000000. 00 for the netherlands based on a Molecular Diagnostics company bulking up in the field of Infectious Disease testing Thermo Fisher generated about 25000000000. 00 in revenue last year providing analytical instruments and equipment for Research Analysis and diagnostics for pharmaceutical companies and biotechnology laboratories the acquisition of wayne gen which did about 1530000000 last year is a Life Sciences and diagnostics supplier they specialize in Infectious Disease testing seems pretty timely doesnt it in fact its been most recently been developing a test to detect the corona virus for chinese hospitals currently using that test right now to evaluate exactly how well that actually works. Time now for a quick break but hang here because when we return apple agreed to pay 500000000. 00 by throttling i phone users in order to place a new battery but its 500. 00 nearly enough to have a live report and as we get a break here the number at the. Were feeding our hopes our dreams and desires our money to compete this creates a what do we get back to you know i like thats thats a bad deal so when is technology jumping out of the street when its the goal is you helping need to keep you healthy for it or to keep you know connected and i missed it so we will live in an area the post screen area where we will live with less and all these screens and it will be more in harmony or it will help us. And welcome back some bad news for south africa as the country has officially entered its 2nd recession in 2 years thats based on numbers from the final quarter of last year the numbers are not good showing that south africas economy shrank 1. 4 percent in the 4th quarter and 0. 8 percent in the 2nd in the 3rd quarter excuse me you know the Main Industries which have contracted were talking Agriculture Transport in construction quarter by quarter agriculture dropped 7. 6 percent transport down 7. 2 percent construction 5. 9 percent the treasury has cut the nations 2020 Economic Growth forecast to 0. 9. What a life of the feds rate cut today there are a lot of questions as we just explored and go about how much control the fed has not over just Monetary Policy but really over the entire market its one of the reasons the cryptocurrency were created in the 1st place to push back against central banking last week we were joined by former congressman and author of in the fed dr ron paul and i began by asking him about this very idea about the power of cryptocurrency use to break the control of into d. C. Like the Federal Reserve over the economy and i asked him if he believes that crypto will be able to create disruption needed not just in banking but in so many other industries as well. I think this technology is fantastic and thats why i encourage it i dont understand exactly how it works but looks to me like its a tremendous way to transfer information and do it with more secrecy than the government gives us a but we dont know how long that will last but i think that that is important i think what crypto people have picked up on this technology and they use it i think theres a lot of questions remains on that is what is the crypto currency and that only the market can decide i dont think the people who created it the people who use it or what the governments going to do so theres a lot of unknowns about that but when it comes to the technology i think this is as significant as the invention of the telegraph you know which was unbelievable and intervention or invention and a change in chance for information and storage of affirmation in a more secretive manner again the great analogy that we always hear about is why email did for a traditional mail is what crypto currency will do for our property transfer and so as we are watching so much of this insecurity and uncertainty in the market right now do you think that have to a currency will move forward as kind of a safe haven asset somewhere to gold. And i dont i dont know that and i dont think anybody knows that because it. Certainly has been for several years fantastic but the last year to. Raising questions even the last 2 weeks are questions raised you know i watch all the markets although i dont get involved in the crypto currency markets i keep looking at the try to help me understand it is this is this like a stock is it like a bond is it like a commodity is it like a currency and tell you the truth it doesnt follow any one of those so that maybe is understandable because its unique and its different and its a stablish ing its own you know its own status but my great interest in this has been actually political and that is making sure its legal and making sure that. The idea of committing fraud is still going to be illegal its bad enough the government currencies when it comes to our currency its laden with fraud if we can find something that is fast and and anonymous and secret and and. All so something that can be done you know efficiently efficiently i think that is good but i want to competing currencies i want to be legal i want people to not to commit fraud i think that the market will tell us you know for a good many years i watched the gold market for a good many years as long as i could remember up until 1971 and i listened to what was true and i said well still to 35. 00 an ounce and theyre still presumably but eventually the market answered in spite of all the mischief of Central Banks you know the market answer right now the big question is how is gold reacting to some of this because the bank of International Settlement this past week said oh golds going up too fast so they dump a lot of gold and that makes it artificial so its not as easy to figure out what the markets doing. When the governments always involved even the stock market is the whole point. The goal of the number one goal and purpose of the Federal Reserve at this present time is to pry prop up the stock market and and therefore making decisions is the most Important Information to anybody in investing or savings or doing whatever it is the price of money the Interest Rates it is totally distorted so this makes it pretty tough for people to say oh i know exactly whats going to happen and sometimes they can prod things in a certain direction but i think there are some pretty sound rules in Monetary Policy laws of economics that will hold true its just that one thing for sure we dont know when theyll be nobody knew when the brand would finally cave in but it finally did and this whole system this whole Monetary System and that is why we should have competition and allowed to sort this out to find out how the market why my provide an alternative to this illegal corrupt system that were dealing with today you know and you keep mentioning about the market being propped up in terms of this propped up market that we are witnessing right now this idea of Central Banks Central Planning has become not a way of supporting markets its become the driver of the markets completely controls the cryptocurrency and block chain basic on amaze bring some balance dealing back into that system or is that the great threat to the system because the system isnt supposed to be balanced anymore its supposed to continue in this propped up fake manner. Yeah thats hard to say because every the limitation and. You know natural laws of what happens with monetary and fiscal policy is its always interfered with what governments might do and they have to change their mind all the time you know early part of september last year we were going to continue to do exactly what they were doing a little bit annoyed and and the market changed they had to change their position but in essence. Same way with crypto the threat to crypto and a threat to gold are exactly the same as the government and the government keeps an eye on everything they keep an eye on and they and i think the governments of the world right now the biggest threat and maybe crypto will help us out on that is the Cashless Society but then when i read about people who get it i get a visit by the i. R. S. Because theyve been in the crypto business they made some money and made some profits and they know that and they have to cough up and and they get their bill from from the i. R. S. So governments dont know why competition and theyll do almost anything and everything this is the reason why if anything a lot of people who think along my lies think we need all law Less Government interference in our lives we need to have people who believe in liberty and responsibility and taken care of themselves and not being taken care of and thats why its an coming because the whole prevailing attitude now in this Current Campaign is how much free stuff is going to be there hundreds of trillions of dollars its total insanity so i think were getting very very close to a lot of a reassessment and it wont be as simple as turnin the switch on oh everything will be settled if we have if we can do use gold and silver for an exchange or everything will be settled because everybody who understand how to transfer crypto currencies without the government knowing everything that we do so theres a lot of unknowns out there except for the fact that the Current System doesnt work and it wont work and we cant continue to finance our welfare warfare state and that will be the good part of what were looking at dr ron paul former u. S. Congressman and author of in the fed thank you so much. Thank you. Legendary investor and the bag math you actually found it under pressure from hedge fund john Elliott Management to read. And in his risky investments this comes after suffering the loss of which we work at about 20 other investment leading to vision funds 1st ever loss of nearly 9000000000. 00 for 21000. 00 Elliott Management corp has increased its stake to about 3 percent in soft bank and has been pushing for changes demanding that soft bank buys back a significant chunk of its shares improve transparency and make the board of management more independent and diverse Masayoshi Son promise to rein it in and be more careful in his investments in the near term though it looks like vision fun too has been delayed as investors have gotten spooked Masayoshi Son is now backed up into a corner by elliott whos demanding buybacks of 20000000000. 00 so basically the Biggest Issue as he puts a quote i need money to return to shareholders versus i need money to invest. In the way mo the driving car service or buy alphabet announced monday that it has raised 2250000000 in his latest fund raising round that included investments by silver lake and the Canada Pension Plan Investment Board Anderson Horowitz horowitz excuse me and the Parent Company alphabet this is the companys 1st external investment why it was looking to lead the way in the thomas Vehicle Technology that includes a ton of us delivery and trucking in january way more announce that it would begin mapping and eventually testing its thomas long haul trucks in texas and parts of new mexico the company is also tested and hoping to launch in a thomas on demand right Healing Service called way mo one using its own of its vehicles in the suburbs around phoenix the company is also locked in an exclusive partnership with nissan to research how commercial Autonomous Vehicles might work for passengers and packages in france and japan. Get this apple has agreed to pay up to 500000000. 00 to settle a lawsuit over it quietly slowing down older i phones at the same time that it was launching new models by throttling the functions of the older i phones apple creative incentives for users to buy replacement phones and batteries we all knew this was happening right will this. Class action settlement that apple would have to pay get this consumers get a whopping 25. 00 per phone 25. 00 with a minimum total payout of 310000000. 00 so joining us now to discuss these cases Molly Burrows contributor with americas lawyer molly i see the story my head was exploding with how ridiculously low the settlement is 25. 00 for i phone is virtually nothing theres really no indication here of how much money apple made with this practice do we know how much they were making were probably talking about billions right. Oh absolutely now i dont have any numbers that relates specifically to purchases that were made as a result of using that software that basically slowed down on their phones but apples quarterly revenue at the end of 2017 the beginning of 2018 was 88300000000. 00 band it was an all time record apple said so now then the 2 are connected but the company did credit that growth to the highest revenue ever from its new i phone line at the i phone x. L. It does look as though they made a big chunk of money although i phone sales still huge still in the 30 something billions theyve slowed over the past couple years now how did apple doing this what are they doing this via updates. And thats exactly how theyre doing it theyre doing it with these suggested recommended updates and it was users that started to realize that there was a connection between this particular date and changes in their phone course apple has lots of reasons why they said they sent that update but theyre not necessarily meeting any fault in this they just said yes we recognize a connection but it was unintentional if you will you know the lawyers for the settlement so that was fair and reasonable and adequate im sure they think so theyre getting their money but heres the problem that i have with it is youre talking about 25. 00 i went into yesterday to buy a 3 cable right its this long its nothing because 35. 00 books what can you go to an apple store and even buy for 25. 00. This is possibly making anybody whole. I know thats a great question and we really need to pin those attorneys down in the settle in this case but when it comes to Class Action Lawsuits that is terminology thats used basically to set it up for approval because its taking into current plaintiffs that are involved as well as future people that may have problems with these photos they can essentially make a claim on the settlement as well but it seems like its more a get again a slap on the wrist that is just acknowledging that apple did this and yet heres 25. 00 to these customers i mean at one point in 2018 there were like 5 dozen people that were individually suing apple over this particular issue so if each one of those individual lawsuits and got on you wonder how much and maybe some of them did what their settlement would be but in this particular case most of that money i think some 93000000. 00 is going to go to the attorneys that are representing this case because they brought it in the form of a class action thatll be legal fees that that will be covered thatll cover their legal fees but yeah 25. 00 it doesnt seem like much but we do see it over and over again i mean did apple settle another lawsuit you know just a few years ago for a similar amount that affected a great number of customers as well never admit to did anything wrong to you if they walk away with all this money mostly girls contributed to americas lawyer thanks for your insight. Robin hoods 10000000 strong user base yesterday it was one of the worst days in the markets why because traders watched helplessly as the market climbed up almost 4 percent on the rally while they were completely left behind unable to trade an outage yesterday began around 9 30 am eastern when the Company Experience what it called instability in its infrastructure communication broke down and resulted in outages that took down the companys app website and help center it was perhaps the worst time in history because it coincided with one of the biggest single day gain in the history of the dow all in all markets gained 1. 00 trillion dollars in value while robin hood use. Benched on the sidelines feeling robbed this was especially painful as many users sold out during the previous 10 percent plunge in the markets leaving them with minimum exposure to the upside monday many users have banded together and are calling for a Class Action Lawsuit against the 7600000000. 00 startup but to get ahead of it robin hood is now reaching out to customers to compensate users on a case by case basis and they better have some deep pockets because as of tuesday robinhood its still down and traders can either close nor open positions to play the volatility surrounding the rate cut and robin hood is is trying to take the position that in their terms of service right there is a line that says we cannot guarantee that this service will be accurate up to date and usable for every minute of every day for every minute of 2 full days and were talking Financial Services this is the markets that were talking about of theres not even a possibility that you can be down had to be completely accurate or it could be considered what Insider Trading front running even uptick its unbelievable the that its happened and the question now is how long will it continue to happen well that is it for this time you can gauge group us on demand of the brand new portable t. 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