Demand a Global Movement to divest from fossil fuel and crushing debt loads the industry has about 86000000000. 00 of rated debt due the next 4 years and as analysts have warned before below 50. 00 per barrel Many Companies will be unable to service their debt obligations this in turn has the Banking Sector as these Companies Start defaulting big banks including j. P. Morgan city Group Wells Fargo and goldman are down between 9 to 13 percent today as the selling pressure intensified across all sectors u. S. Markets triggered a 15 minute halt at the am the dow fell over a 1000 points as investors continued to seek safer assets the yield on the 10 year dropped below 0. 5 percent for the 1st time ever in the history crude prices have become a bigger problem for the markets than the coronavirus now as itll be virtually impossible for the s. N. P. To bounce when the Energy Sector is down 15 percent. Interestingly enough gold the defacto safety asset is not spiking instead it is trading flat someone down indicating that people are selling without prejudice this type of broad based sell off is indicative of a cash crunch and that leverage funds are receiving margin calls forcing them to sell out of assets like gold in order to free up cash analysts are now expecting the central bank to cut another 75. 00 bits in its march meeting next week even though Monetary Policy is unlikely to be effective at the moment reuters notes that mondays move has wiped out approximately 2. 00 trillion dollars in value off the global stock market no kristie i mean it is been a crazy day here with markets pretty much all across the board as you just mentioned but why are we really seeing this right now weve seen buyers come in when weve seen these massive selloff weve seen the departures come in and buy it up so it brings it back up so why are we seeing that now and are we not going to see that rebound it is because the oil sector is one of the basic cornerstones of the entire u. S. Equity markets right now were seeing a collapse of the entire industry and that in turn has the stomach implications for the entire market we all remember what happened in 2008 when people at the faulted on their Mortgage Loans and that had ripple effects all across banking consumers etc or say the same thing now thats why financials are down so much today because the oil sector is going to hit the entire broad base commodities sector is going to hit the u. S. Financial sector and that in turn will hit start consumers we tell us all the way down the line and were going to talk about this at length here in just a minute but i do want to bring something up because as weve talked about whats going on with the Airline Industry especially due to the coronavirus thats whats actually been pushing these oil prices down and now today boeing who is generally fared well even despite their 737 max problem theyre down 12 percent on monday and theyre not because federal regulators were not actually happy about some of the stuff thats going on with the 737. 00 max they had a bundle of wires that they said oh thats safe dont worry about it and regulators were saying no so theyre even feeling the pain on this day of massive massive. Off so well probably say about probably airlines and or that well Energy Sector as well absolutely lets bring in rick rule c. E. O. And president of Sprott Holdings whos joining us out of vancouver so request saying the energy junk bond market absolutely crashing today as Shell Companies now are able to meet their debt and Interest Payment obligations so just like we just said in 2000 when we looked at which banks had the most exposure to bad mortgages lets take a look here at which banks now have the most exposure to a wave of the falls and the sale shell patch. The truth is that the pain will be widespread across American Banking from regional banks as an example texas banks and oklahoma all the way through the biggest banks in the nation as you pointed out in your head are all the big banks are off today the real surprise i think might take place in the e. T. F. Market though you noted that theres an awful lot of non Investment Grade or junk rated debt in Public Markets issued by Oil Companies i read the other day that about 15 percent of non Investment Grade ranked bonds in the market are issued by oil and Gas Companies and a lot of those are held in e. T. F. That are income e. T. S. The difficulty with that is that if Retail Investors begin to sell those. Well the e. T. F. Themselves are quite liquid the bonds that underlie them are less liquid what happens in an e. T. F. In a sell off like this has the has the effect of a bank run so my suspicion is that the very large banks that have access to liquidity from the fed will actually behave better than some of these junk bond e. T. F. Smites might fare well see over the next 2 or 3 weeks or reckoning is certainly coming and credit markets with regards to energy now or you know can the oil sector actually recover from what were seeing here on monday i mean is the shell salvageable i mean what is the Systemic Risk risk of sub 30. 00 oil for opec you. U. S. And russia for that matter and how does this abrupt arrest of the saudi royal family members actually play into whats happening here with oil today. Well theres several questions there lets unpack them the 1st thing about the oil the oil industry is of course it survives gretta notwithstanding the world runs on oil the truth is and we said this on your show before the cure for low prices is low prices a period of oil pricing below 40. 00 a barrel reduces sustaining Capital Investment which over a year and a half or so reduces production it also shuts in new investments remember that oil wells deplete every day you pump an oil well your business gets smaller you have to drill a new one to replace it in some period sime so in truth the cure for low prices is low prices the impact on the u. S. Shale industry is very very different thats a capital intensive business it is highly highly highly reliant on low Interest Rates and High Oil Prices because its capital intensive and because the decline ratio is so high the u. S. Oil Services Industry and the shale industry focus sort of on the delta between the cost of capital and near term oil pricing which is a fancy way of saying that shale prices will decline precipitously at this oil quote the interesting thing to me is that the 2 alleged protagonists in this dispute the saudis and the russians both recently announced very very Large Capital programs the russians 150000000000. 00 program in arctic siberia the saudis 100000000000. 00 sale Shale Program pardon me in the gulf this oil price undermines both of those projects remember the 1st comment over time the cure for low prices is low prices the cure for high prices is high prices markets in fact work that shouldnt come to any solace for Oil Investors in the near term however. And now as we see this entire crash happening right now the company mr in is dropping measures to blunt the entire economic fallout of oil so what measures can they possibly come out with that will have any effect on the market side from a total bailout of the sector. Im tempted to say thats above my pay grade. Its very difficult to fight something as big as a market my suspicion is youll remember rahm emanuel saying never waste a great crisis my suspicion is that the Political Forces will use this 1 event as an excuse to further artificially lower Interest Rates and make much more credit available my understanding is that the the feds are looking to increase the repo rate that is the overnight. Lending availability so my suspicion is that the only tool the Trump Administration really has a vailable to it is further quantitative easing and further manipulation of already unreasonably low Interest Rates and now rick i mean is this the bottom of what were seeing right now i mean it is monday the bottom of oil markets are going to go lower and really at the end of the day where is the reap what the rebound look like. The markets are already disconnected from reality the truth is in the very near term as buffett famously says the market is a voting machine not a weighing machine youre playing on peoples emotions and peoples narrative and when people are panicked and i think people are panicked anything can happen in the near term the International Energy agency suggests that the fully loaded cost to produce a barrel of Oil Worldwide thats the United States indonesia china russia saudi is about 60. 00 a barrel that means lifting costs discovery cost capital cost also prior year write downs so right now in a very gross since. The industry is making the stuff for 50 or 60. 00 a barrel selling it for 35. 00 a barrel losing 15 or 20000000. 95 times a day this gets rather boring its clearly unsustainable but in the near term its not about arithmetic its about narrative and panic wreck wealthy. Thank you so much. A pleasure thank you. And the World Health Organization announced monday that the threat of course the corona virus becoming a pandemic is real as the number of cases now exceeds 100000 with cases showing up in more than 100 nations. Its certainly troubling that so many people and countries have been affected so quickly. Knowledge. As a foothold is so many countries the threats of the bundle meek has become there he says researchers are now reporting the number of cases outside of Mainland China have tripled in the past week eclipsing 30000 cases as of monday so if it was pointed out that of the 80000. 00 cases in Mainland China 70 percent have already recovered from the virus outside of china south korea italy and iran have been most affected by the virus with at least 70000. 00 cases in each nation now in response to the growing number of cases in italy Prime Minister just said because he actually signed a decree on sunday restricting movement in the northern regions of the country now the restrictions will affect 17000000 people including those in the cities of milan and venice the w. H. O. Director general made note of efforts to control the spread of the virus. The great advantage we have these diet the decisions we only make as governments businesses communities slimy lease and individuals. Could any influence the trajectory of the sea. For more on this were joined by she chose assistant professor at the Yale University school of Public Health and figure so much for joining us and i do apologize i 70000 there it is actually 7000 cases in italy iran and south korea respectively there and now were seeing more cases outside of china as we just mentioned there been inside in fact confirmed cases have tripled outside the country in the past week and the w. H. O. Is touting the ability to limit the spread of the virus as we just heard but did the quarantines inside of china actually make a big difference here and what other actions should be taken worldwide. You know theres quantity well the cantin twine or and also the massive lock down indeed. The prevention of the spread of the wires to. War at least the by some time for the rest of the International Community by the. Largest social disruption so i dont think currently in the us. At this stage of doing that a. Lot of cost and the disrupt everyones life and these are politically. Not feasible but i think there are many other half hours taken by china could be learned by the u. S. And also other European Countries and the International Community for example social distancing is very helpful weasel to continue the wire as if we can cancel necessary trips and conferences social gatherings that were delayed the spreading of the wires and also for those patients. Having some concern about being in fact leave then still there the measures should be taken to have early diagnosis early isolation and early treatment and that would be about half or otherwise if we leave them on the community in a family there will be a concert tour of infection and also eyes. House insurance measures should be taken for example in china starting from. Generally the cover the cost and the emission cost of the hospitals but they gradually did that the 1st of the coverage only the come from the cases about the scenes and many people were not able to become firm so they also covers those suspected cases ive seen for americans this is especially important because there are larger lumber of people under insured all without the any insurance so cover those costs of where the financial burden and also add to the provider level to try best to reduce across the infection rate but eventually i think the bottom line is even if we are not able to reduce the total amount of people being affected by we cant get that amount of infractions more smooth we solve the heating the capacity of the house here infrastructures and we can treat People Better and see more lives and currently as china is recovering theyre actually deploy a lot of medical practitioner out to middle east especially iran in order to help spread how to contain and quarantine and what practices are affected so right now the d. H. L. Is actually just stopping short of saying that the quote a virus and a Global Pandemic so what is the significance of actually giving the bias this title. So i believe that service was very important. Theres a global effort to curb that out of the border crossings all but this is to be coming last and alas the fact you we small countries like iran like 100. 00 countries and territories are being in fact the sole its very important to to share the information of the travelers and tracking those. Potential people who are in fact id and also i would to see a very important to have. The iranian because without knowing everyones individual risk of being diagnosed and being in fact it is hard to have anyone to have correct this Risk Assessment to attend those social gatherings so we understanding that information the larger gathering can be very detrimental to the society so i like to morrow songs and yesterday in the west coast of america so there was some sort of all these was against that but was still ongoing so that was. Something need to really need to be a war zone people can have a larger source or these tense we cannot avoid the people i have been their jobless. Absorbed all the help of the by the other people around quickly here because we only have about a minute left but i do have a question about travel you know weve seen a lot of travel restrictions and kind of we weve seen this being a business show obviously weve seen in the Airline Industry just faltering amid all of this happening with the growth of virus weve seen cruise ships off and struck off the coast with the kind of quarantine before theyre able to bring them in is it safe to travel right now i mean even domestically but especially internationally. Yeah if you travel. All or was. Very easy to get impacted by the by people is spreading to others so the safe. Travel issues like a war they use logic Public Transportation like to try to drive instead of taking those Public Transportation and try to know why those less is 3 travels on the gatherings thank you so much each an assistant professor at the school of Public Health care Shell University thank you for your time. Time now for a quick break but hang here because when we return the chairwoman of wells fargo has stepped down just days i heard of a rash like hearing in which she had to testify break down the shakeup at one of the americas largest banks and i think get a break here in the red number at the club. And were going to fulfill that promise is probably to the people you know weve all but the truth. Really really. You want to work. All. The link up. The. Banks failing and countries failing and now in love but theyve got a huge crisis and of course big plans come to the rescue. Descriptions sound appetising even for the owners. To choose pet Food Industry is telling us what to feed our pets more based on what they want to sell us necessarily good for the pet turns out may not be the best people believe we have the animals that have. To have auto immune disorders allergies we are actually creating these problems its a huge epidemic of problems i believe can be linked to very simple problem of diet and some dog owners so heartbreaking stories about their pets less treats to larger corporations are not very interested in proving or disproving the value of their food because theyre already making 1000000000. 00 on it and theres no reason to do that research. And welcome back twitter c. E. O. Jack dorsey will not be removed from his position the Company Announced monday though social media giant reached a deal with activist investor Elliott Management w