Transcripts For RT Boom Bust 20240712

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This is boom bust for the one business show you cant afford to miss branch of war in washington coming up the year of economic turn or the turmoil has seen a slight turn for the better at the International Monetary fund has revised its 2020 Global Outlook straight ahead were going to analyze the new report and what impact its going to have on markets plus one of the major giants in the kobe 1000. 00 vaccine race has hit the brakes probably an unexpected event in trials we bring you up to speed on the slowdown and where the world stands in the sport for fear and major markets are major major Global Regulators have come to an agreement on road rules for Digital Currency moving forward later on well have an indepth in tech analysis with a packed show today so lets dive right in. And we lead the program with the International Monetary fund lightly more positive outlook for the Global Economy in the wake of the kobe 1000. 00 pandemic now according to the i. M. F. The Global Economy is now projected to shrink by 4. 4 percent this year and upward revision from joins us from it of 4. 9 percent contraction now the organizations chief economist spoke about the factors which caused the upward revision during a briefing tuesday. As a result of eased lockdowns and Rapid Deployment of both monthly and fiscal policy support. The one hes coming back from the depths of his collapse in the peak of this crisis which was the 1st half of this. Employment levels have partially rebounded after having plummeted to historic lows. That said this crisis is far from over. The ascent out of this calamitous Great Lockdown is likely to be long and even highly uncertain it is therefore essential a tricycle and Monetary Policy support a not treatment surely would draw on as best possible the i. M. F. Also altered its projection for growth in 2021 to 5. 2 percent down from 5. 4 percent in june the Organization Also warned that factors related to the pandemic could delay economic progress. The virus is resurging with localized lockdowns being green. Now if this worsens and prospects for treatments and vaccines deteriorate the toll in Economic Activity would be severe and likely amplified by severe Financial Market turmoil. The growing restrictions on trade and investment and rising geo Political Uncertainty could harm the recovery. Lets go ahead and check in on the state of the economy and markets with tobin smith c. E. O. Of transforming research and Michelle Schneider managing director of the Market Gauge Group and author of the bestselling book plant your money tree guide to growing your well thank you both for being here toby i did want to start with you on what the i. M. F. Is saying here now the i. M. F. Is actually pushing for the International Community to do more to tackle the economic fallout of covert especially towards poor countries who are hardest hit by the pandemic a collapse in Commodity Prices and a plague of locusts africa particularly hard putting 43000000. 00 more people at risk for extreme poverty whats going to be done to help when even established wealthy countries are actually now struggling to raise more funds. If we if we are really. Really. A truly trillion dollars what were now calling. Back life projects that hurt sustainable lasting. Just together because separating the i. M. F. Story is just telling us as separate its not working now its affecting everyone has not just one country obviously its every country want to number 2 you know unfortunately in the situations who are in the rich getting richer next paragraph of humanity and you know one of the you know me from africa you know mr bring it over problem or to going after to. Call on one to go back there. And we dont want a solution that. We all you know countries with just. Who know us you know out who are. Better there will be. You know michelle i want to take a look at markets here really moving tuesday as investors rotate out of cyclicals into Technology Names after no movement on the fiscal aid package here in the United States without more stimulus with Technology Names actually still hold d up because these are traditionally high beta names that drop just as easily as they ride so why are we seeing that rotation now when there is so much Political Uncertainty. One of the reasons that we saw a summer attention i would say actually it was more of a gentle rotation or a tech run supreme is that last week the rotation into cyclicals might have got a little bit ahead of itself right now i think the market is trying to hedge on who might win the election and the stimulus there all is on the table still even if it turns out to be more it hasnt exactly been put to bed and i think the market also knows Going Forward some stimulus package will be there whether its the republicans or democrats that went so when we take a look at what happened some of the stocks that were doing well last week were. Anticipation i think of a more democratic rand and thats why you saw the rotation into retail transportation smallcaps banks been suffering all along for the last couple years and the tech was sort of on pause now today the tech came back strong and this could be people saying well what if trump wins and attack and the tech is going to be strong no matter what happens i believe that we will have an overall swoon obviously if the whole market experiences a bubble like a tremendous 2nd wave but theres optimism out there and that optimism right now is overpowering whats happening with the stimulus which is on the back burner. China is actually also reporting a good quarter with imports growing at the fastest pace this year in september as it makes a fast recovery from the pandemic chinese firms are actually rushing to grab market share as rivals grapple with reduced manufacturing capacity does this just reverse all the manufacturing outflows that weve been seeing since the Trump Trump Administration actually started the trade war with china because it appears that all the manufacturers who left are actually coming back its an even even better position than it was before what do you see until that. I believe 35 years. Actually. And then were just a little thing called the internet now its you know i know exactly where all my stuff is too you know one or 2 square and you were there were no were not going to do that thats not going to change what you know we were just dealing with. In wisconsin because there are 2 and a half years. Because just its too expensive its the core the idea that china did the best in getting back and so commie quickest means a commie very quickly theyre going to be export and as the other countries return you know theyre going. 5 years somehow or miraculously he rushed the other night and turn a little change a you know. A number were. All urges. And i want to hit the markets one more time here before we leave michelle j. P. Morgan and citigroup they both posted beats for the banks now this earning season is shaping up to be pretty good but thats just because expectation expectations are so low as it would seem valuations are still climbing as a result but eventually companies have to stop using coronavirus as an excuse to justify their astronomical valuations is that correct. Well yes i mean right now what weve had in the bank sector as i mentioned earlier is the whole sector has underperformed for the last couple of years so what happened today with j. P. Morgan is that theyve reduced their reserves they had a tremendous amount of buildup of loan reserves but the impact of the virus and the fact that they were expecting a lot of loan defaults and the 3rd quarter has brought some optimism although diamond came out today and said that he still has 34000000 in reserves for loan defaults essential. Theyre expecting the job loss to be less Going Forward and also theyre expecting the g. D. P. To actually get a little bit improved so i think were looking ahead now with the 4th quarter and theres some unknowns for the 4th quarter and thats really basically what youre talking about what happens with the vaccine as we know theres been a blip that really economy continue to open right now thats a question mark and also you know still i think election is not as important but it is definitely an actor there and one of the other thing we should realize about the banks that they made a really good profit in terms of just trading revenue fixed income and equity trading 30 percent Investment Banking 12 percent and even though they cant buy back their own stocks right now theyre making money speculating which is a wave thats gone through the whole country as people are at home. Of the market in tobin smith of transforming research thank you both for breaking us all down for us today. Thank you. And a late stage trial of johnson and johnsons corona virus vaccine candidate has been put on hold while the Pharma Company investigates an unexplained illness in one of the studys participants the Company Released a statement monday and notes in the pause in the trial saying these events quote are expected as part of any Clinical Study especially large studies adding its physicians and safety Monitoring Team would work to find the cause of the illness now the company also would not release any more details regarding the unexplained illness citing patient confidentiality now meanwhile johnson and johnson reported earnings for the 3rd quarter on tuesday beating expectations with a revenue of more than 21000000000. 00 but the news regarding the vaccine trial has caused the stock to fall tuesday. And with that in mind lets go ahead and take another look at the trends and spread of the virus globally with r. T. Correspondent saya tablature where are we so brant covered 19 has now in fact infected almost 40000000 people and total thats have also surpassed 1000000. 00 and in the u. S. Case numbers are now raising nationally as theres outbreaks and there outbreaks continue to spread in the upper midwest and Rocky Mountains and a 2nd wave thats hitting the northeast and in total over 8000000 confirmed deaths with over a confirmed cases im sorry i should say with over 220000 deaths now taking a look at the daily new cases and thats on monday there were almost 46000. 00 new cases reported a 19 percent increase compared to last week now whereas a new cases have been going up continuously all of last week and it appears will be continuing this trend once again death sto have been going down slightly so right now theyre averaging about 5 percent decrease in new. Deaths compared to last week. So the u. S. Is not alone in seeing an increase in cases where throughout the world are we seeing that no the u. S. Is definitely not alone so whereas countries like india brazil and iran theyre seeing a steady number of new cases right meaning that theyre actually never dipped so their cases have been slightly have been steadily high but in europe its Something Different is happening in that theyre not recording some of their highest weekly number of new infections since to start of depend emic now just on tuesday in 1000 cases in europe they jumped 34 percent compared to last week now take a look at some of these numbers not comparing them to the u. S. They might not be that high because ravaging about 45000. 00 cases per week but i should say but thats the heres the difference see for example in the u. K. Their average grew from 575 cases predate to almost 17000 in russia their cases it went from 3000 to almost 14000 spain on the other hand their average has gone from 250 to almost 10000 and france there 7 the average of new cases had been as low as 530 in mid july but theyre now averaging 8500 now even in italy you know they took a really conservative approach lockdowns theyre also seeing and new wave of cases now i also want to mention that increased increased case numbers are also partially the result of more testing right but this is the thing the deaths there are also up 16 percent compared to the previous week and several of these countries are going to be revealing new restriction this week in order to further spread further stop to spread but most likely its going to be curfew set in Public Places and more mandates set on masks and socializing and as ive said before over and over again brand that the only option on the table right now is to stop. Spread of the globe in 1000 is a vaccine and that brings up the point can you give us an update on these phase 3 trials were seeing. So these are the companies right now currently in phase 3 but once again theres another company thats facing a major hurdle so of course last month we had astra zeneca they halted their global trials after patient developed a major side effect now theyre u. K. Trials they resumed their u. S. Trials have now halted then there is johnson and johnson like you mentioned they have also halted their trial as of right now so that leaves only 3 Companies Left still moving towards the time line to actually come up with a vaccine and then theres of course maryland based company. Which there for these 3 trials has launched in just this month in october so dont expect anything soon then there is a pfizer by you and tag which still does not have even another data on their trials to have a vaccine distributed this year in 2020 so were looking at 2021 then lastly there is a more during which has been working in partnership with and i ate now if my during our scorn of ours a vaccine is proven safe and effective its going to be at least under april of 2021 for it to hit the market so again lots of if then lastly its also very tempting to look at all these companies that are going to come up with a vaccine as an on and off switch thats going to bring back life normal as we knew it before the virus but that might not even be the case since some of these vaccines may even ruptly withdraw from the market because they turn out to be not saved even after their approved friend or 2 correspondents are injured thank you for keeping us up to date. And the European Union has been given permission to impose tariffs on 4000000000. 00 in boeing jets and other u. S. Goods the World Trade Organization announced tuesday now the ruling comes after the body previously allowed the us to impose tariffs of 7500000000 dollars on air bus jets and other products from the you know this case dates back to 2004 when the u. S. Levied a complaint against European Countries over subsidies to air bus prompting the e. U. To respond with a case against american subsidies for boeing tariffs against the u. S. Though arent sure a sure thing as the e. U. Trade commissioner sent out a tweet tuesday after the ruling saying the e. U. Will immediately reengage with the us in a positive and constructive manner to decide on the next steps are strong preference is for a negotiated settlement otherwise we will be forced to defend our interests and respond in a proportionate way. Not for a quick break but here because when we return the future of been tech seems bright as the Global Regulators have agreed on a framework moving forward on the other side of the break we bring you up to speed with them. And as we go to break here are the numbers of. The world. Thinks. We should ask. We said. That. Is enough. But im also the most companies you know ive been there give them says if they please when i meet. People in the school you know because you didnt you know just do so you just pull you through a coke. Machine. You kind of the. Kid is. Likely to come to you in the studio. So to. Speak is he. And welcome back Central Banks around the world are coming together to decide on rules for Digital Currencies specifically stable quoits now these are coins that would be used in cross border transactions like Facebooks Libra for example now existing National Rules do not fully cover stable coins the Financial Stability board said in a statement adding that regulators should ensure global stable coins are fully accountable keep at it safely and have affective safeguards against Cyber Attacks and Money Laundering so lets unpack this with blue bus cohost and crypto analyst ben swan and kristie i thank you both for being here i want to start with ben here what rules if any have actually been established as part of this. Well know those specific rules brand so far have been established but its its kind of a framework i guess you could say that these g 20 countries are working on but essentially what it really comes down to and i really kind of bashed here is the idea that we need to create a set of rules that prevent Digital Currencies from being outside of our control outside our manipulation a Central Banks and really outside of the world of innovation as soon as Central Banks get involved what they do is they limit innovation and they limit choice within the market because they dont want financial choice when instead it really becomes about what weve got to protect against Money Laundering weve got to protect against privacy weve got to protect against volatility and so weve got to create a stable coin a lot of this goes back to kind of what they spoke has been trying to create right this libor a project that theyve worked on which is were going to create a stable coin that will be pegged to and tied to Central Banks so that in the future the prices are really go up or down in it which means that ultimately it is run by the banks for the banks and not by the people for the. Kristie not to be done by the coming wave of Central Banks adopting Digital Currency the European Central Bank President christine the guard said monday the e. C. B. Is very very seriously looking at the creation of a digital euro are we going to see virtually every central bank adopt some form of Digital Currency in the next decade. Yeah i think were definitely going down the path towards digitalisation so its not far fetched to think that yes within a decade every central bank will have issued some form of c. D. C. And i think that corona virus kind of actually accelerated and pushed the entire timeline up a couple years because the pandemic actually caused ecommerce to rise almost 20 percent in terms of volume and sales between february and jim so there is a lot more confidence in Digital Payments and significant changes in Consumer Behavior and the way they transact the contactless payment these days so another tailwind that is driving this decision is the globalization and competition once one country has successfully implemented and rolled out a seat in d. C. I think that that will be the start of it Digital Payments has always been the future so once its been proven that it can be done at scale i think other countries will be forced to follow or else just risk falling behind so the e. C. B. Said that they will make its decision by the middle of next year whether to go ahead with a proposal for the euro system c. D. C. Or not so major considerations are still on the table and could the potential for Cyber Attacks rights to privacy and whether a central bank issuing a Digital Currency means that it will acquire to sense of information on users so spoiler it does it will also have to look into legal considerations such as the implications of different design features and the basis for insurance so while it doesnt replace cash entirely it will supplement it and will be very difficult to get rid of cash because cash is still king but in a lot of places already store fronts and then theres i make it very difficult for people to spend cash these days so just to clarify this whole thing because we talk about Virtual Currencies Digital Currencies then obviously crypto is a whole nother thing so is what e. C. B. Is maybe looking into is really just an additional currency that would be regulated like the euro its not anything. Off of that correct. Its i would say it is the euro right all these Digital Currency said whether it be the European Central bank whether it be Chinas Central Bank whether it be the u. S. Federal reserve right anyone whos looking at creating a Digital Currency is just looking at creating a digital version of their already created currency which means theres no limits on that theyll print as much or in this case issue as much as they want to it doesnt really change anything it becomes the exact same thing as you have with with Central Banks today but as christy said the thing that does make a difference is that if you are a person who wants to hold on the cash or you use cash. Whatever level of privacy that remains with cash that all completely goes away and now ben according to a new report from Pricewaterhouse Coopers economists forecast a Tipping Point in 2025 if block change technologies are adopted at scale across the world and expect block chain applications to boost global Gross Domestic Product by 1. 00 trillion dollars what do we need to know about this. Yeah i think what we need to know is that look blog chain is obviously the future weve been saying it for a long time certainly the countries that Price Waterhouse cooper is looking at is china india japan these are the countries that are really going to see the biggest surge into this space but look block change is an incredibly valuable component the problem is that these what these National Governments want to do is they want to take block chain and they want to remove it from its actual usage as a way of creating does decentralization in the Monetary System thats what block is most successful for and would be was originally kind of designed for in the 1st place that has lots of applications beyond that but to take blood chain and to remove the application that creates peer to peer transaction and to remove the ability of people to be able to interact with each other 1. 00 to 1. 00 another and to decentralize and instead to treat it simply like a giant ledger really robs a block chain of its authority and robs it of its potential and now kristie finally of the g 20 said in a report on tuesday it is working with the i. M. F. The world bank and the bank for International Settlements to formalize the use of central bank Digital Currencies all of this seems to be moving us towards a heavily regulated crypto and Digital Space and i know youre going to be concerned about that arent you. This is concerning but in a way its a good step towards regulation but theres still a long way to go because according to this a 4 by the end of 2022 the g 20 members i. M. F. And the world bank they want to complete the Regulatory Framework for stable coins and c. D. C. s so thats in 2 more years and in 2 years weve seen at least 3000. 00 i. C. A. O. Projects go boom or bust and thats for ever and a nascent industry and like that the currency is so yes while the industry is going to be more heavily regulated i dont think thats going to be anytime soon and minute this entire thing is only talking about stable coins and c. B. D. Seats so i mean thats great now what about utility clients privacy quite securitize tokens and now even the fight against so i think regulation is going to have a hard time keeping pace with the level of innovations but i do think its a good thing now for developers and entrepreneurs because as theyre creating all these projects its been a pain to figure out what it is or isnt considered a security what can or cannot be issued or whom it can even be marketed to well well continue to cover this on boom boom bust cohost ben swan and christy are crypto experts thank you both for your time thank you. And thats it for this time you can catch boom bust on demand on the brand new portable t. V. App which is available on smartphones and tablets through google play in the Apple App Store by searching portable t. V. Portable t. V. Can also be downloaded on a newer model phantom smart t. V. Either as well as a bloke who devices or simply check it out horrible t. V. Well see you next time. 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