Transcripts For RT Boom Bust 20240712

The day or thinks. We dare to ask. Quote this is boom bust the one business show you cant afford to miss im fair monteiths they are going to washington coming up tech stocks continue to hold down markets that the selloff continued for a 3rd straight day and going to war manufacturing laws in the dreamliner jets parking another at a investigation we have a lot to get to fill out to get started. U. S. And European Drug makers are now pledging to prioritize safety as the main focus of the corona Virus Vaccine Development will mine a leading Vaccine Developers made a historic pledge to uphold the integrity of the scientific process as they work toward potential global Regulatory Filings and approvals of the 1st covert 1000. 00 vaccines well the companies include pfizer johnson and johnson and astra zeneca to name a few this comes as americans brace for a 2nd wave experts predict more infections following a Holiday Weekend as we approach flu season will meanwhile india became the worlds 2nd worst hit country just behind the u. S. Where more than 90000 cases were reported in just 24 hours pushing india pos residual with more than 4200000 cases and europe is seeing its 2nd wave as spain set a new daily record of more than 3700 new cases in just 24 hours this is the biggest count since the country came out of the strike lock down and with School Starting to reopen director of the coronation center for Health Alerts and emergencies said the country needs to be alert and vigilant. Going to give them the schools are now opening some have already opened most schools are opening this week in a staggered way and others open next week so we should see the impact of these reopening at the end of next week or the start of the week after that we need to be alert and vigilant the regional governments are very aware of what could happen we hope it will not happen in france and the u. K. Well they also saw a surge in new infections cases have surged sense those countries also came out of their lockdown well this comes as the World Health Organization is calling on countries to invest in their Public Health system they stressed the importance of preparedness for the next pandemic. Killed is defo nation of social economic and political. That means investing in Population Based services for preventing detecting understanding diseases. This will not be the last ponder me. 3. Bricks him under me excited for 2 for life but when the next plunder me comes the woman must be ready more ready than he was this time. Will tech stocks have been carrying the market since the start of the coronavirus but now were seeing the pullback will the nasdaq fell as much as 4. 3 percent on tuesday and its down more than 8 percent in just 3 days well the s. And p. Is down nearly 2 percent but whats causing this plunge lets bring in to us cohost christine and Michelle Knight are part and director of Trading Research and education for market couch dot com christine lets start with the tech its obviously taking a big beating again and its leading these declines whats contributing to this price action today. You know as a high valuations in these mega cap stocks have been stretched far beyond historical levels and this is something that weve warned about multiple times previously on the show that it was just simply not sustainable nor did it make any sense at all the market was rallied up on excessive optimism from cheap money is now correcting itself and it was actually revealed late last week what was behind these many bizarre movements in tech so we had observed previously and so theres a really strange rally where despite the market the up more names were actually down than up in lacked a lot of breath and i was fueled only by a handful of names so now it was revealed that softbank was the primary catalyst behind the tech rally as a billions and billions of dollars worth of u. S. Equity derivatives so i stopped and invested in startups and unicorns and measure capital such as air b. N. B. And it has now made a huge flash and drove those so that is why the s. And p. Kept rising alongside the vix which just hit a record high at the same time the s. And p. Also hit their all time highs so according to the wall street journal softbank spent roughly 4000000000. 00 buying call options which due to be in better leverage in aa. Its basically the equivalent of buying hundreds of billions of underlying in stocks so that sparked this massive upward movement only a handful of tech names so now soft bank is actually exiting the train stop and disclose that it quote spent 10000000000. 00 on public equities and have already sold 7000000000. 00 of them so thats on thursday and friday that can now be attributed to the gamma squeeze unwind by soft bank so this will start to become a major problem for that we tell day to day traders who are about to see the rally that theyve been enjoying since march come to a screeching halt well thats exactly what were seeing here in the now seeing some lows we havent seen since even before march michelle lets talk about the latest stimulus for those talks ended obviously in a stalemate congress is set to return to session today but how optimistic are we that anything substantial is really going to get passed this time around mcconnell says hes ready to pass something smaller bill how optimistic are you. Where we are in the Election Year and its coming upon us rather quickly with a lot of issues circumventing the election just here domestically with social unrest and then internationally with the china and u. S. Trade tensions threats from china to reduce their buying of the u. S. Dollar or even more of their their fear of inflation theyve already sold 109000000000. 00 worth of all bonds as the 2nd largest holder there threatening to sell more not buy more and then of course the 2nd wave of the virus and the fact that we do have the end coming for furloughed workers and also the lawn mower torrie im coming to an end so i would find it very difficult and then just based on what weve seen historically over the last 4 years where a crisis is about to hit except for a pandemic which of course nobody could controlling all of a sudden medically people get their things together and next thing you know that will be some talk of a stimulus etc so i think it will happen i do. Well were looking at a possible Government Shutdown if something there the government going to run out of money by the end of this month so they really need and to get on this and address this pressing matter as people are like you said im unemployed not going to be returning kristie i want to turn to commodities to oil fell below 42. 00 and its 5th session of declines whats contributing to the slide in oil. So this is really interesting rotation that we see in the market because as we just said tech is declining and Growth Stocks is also declining getting beat so you would expect that some of that capital would be rotating into like the lower value sectors in the stock that had been such as hotels and lines and energy but that is totally not the case here oils plunging even more than the nasdaq now with brant telling below 40 dollars for the 1st time since june so this droplets sparked by a concern of a sudden buyers cases around the world as well as the waning chinese demand that china has been the Largest Consumer up to now so only 4 of the 10 engine refiners surveyed said that they were trying to buy more saudi crude for the rest of the year so right now i would be national oil they have also cut prices on tuesday in the latest response just like that demand so todays move is a very clear sign that the market is seriously worried about the future of oil because other factors are stuck play here including the end of the summer driving season as well as more supply from the opec coming online so over supplies were turning again and contributing to the equity market losses today and in addition to the plunges in the small price brants 3 month time strand its nearing the widest containing go since late may so the exporting nations are now planning to meet on september 17th in order to view the Market Conditions well these markets are definitely not looking good michelle i want to talk about President Trump and how quick he is to touting the economy and especially we saw you know the labor market numbers at the end of last week and how he said it was it will be it was doing so well he did say that next year will be the. Greatest economic year in the history of the country under his leadership of course assuming that he whens and that were going to see a v. Shaped recovery probably a super of the shape recovery i mean we did see nasdaq like christy said earlier hit some all time highs record highs however were seeing markets respond now to whats going on what do you think. Well hyperbolic pontification aside and i want to say that as well as high current. The market itself is very interesting kristie you had mentioned something about Growth Stocks and value and thats something to note in that right now has starkly value to growth the ratio or the difference its only been at this place twice before 19282000 of course we know what happened in the ensuing years now that doesnt necessarily mean that were heading for a major crash but the economic has a new company even before the pandemic was sort of sputtering along yes we had growth but at 3. 43. 6 percent it wasnt anything too tremendous and some of the other sectors of the market besides tech were really just kind of floundering along looking at the small caps for example they have not participated in this move up although theyve been dragged along the brick and Mortar Retail of course its been a sector thats been really beat up you mentioned the concerns with oil and gas that stuff like continues to be concern and even transportation so were looking at the supply demand situation in the United States it hasnt been robust in a while what will make it come back its kind of hard to fathom really the markets been living off of free money as you mentioned 0 Interest Rates the Printing Press that the fed continues to pour out the money supply growth has gone crazy so i think what would be probably a more appropriate conversation which would never happen of course would be more of the stagflation environment that i think we may be heading. Were already seeing signs of as we get into 2021 regardless of who wins because things will have to unravel well especially like we mentioned i mean this the market is not doing any better kristie you mention it is obviously drastically changing and basically overnight within the past couple of days of course the National Debt is only growing kristie whats your take on President Trumps comments. Well i think that it is excessive pontification and because of the. Crisis is going to be one of the most serious things because the more the china u. S. Tensions arise the more china is going to feel the need to respond and one of the ways that they actually responded was to a star unraveling the u. S. Treasury trade not because they think that this is going to be the Nuclear Option to hurt the u. S. But simply because they feel that it is a risk caring so much it is a risk the u. S. Debt which is 3. 3 trillion which is the highest level ever because that is what happens if the u. S. Just decides to i dont know do you feel because that is a that is a very real possibility and i think both sides of the political aisle are looking at this and saying we need to scale back a little bit on this which is why i think theyre hopefully going to to make some sort of deal and come up with a compromise with this new stimulus bill must cohost christine and Michelle Snyder market gauge dot com thank you both so much for your time today. On tuesday General Motors announced it was acquiring 11 percent stake in the cola corps worth about 2000000. 00 well the u. S. Electric truck makers shares they popped as much as 53 percent following the announcement while g. M. Shares they also jumped 6 percent now under the deal the 2 companies will build a Hydrogen Fuel cell electric pickup truck than a cola badger nicola founder and executive chairman Trevor Melton said nicole is one of the most Innovative Companies of the world General Motors is one of the top engineering and Manufacturing Companies in the world you couldnt dream of a Better Partnership than this the truck will compete with tesla cyber truck and its expected to start production in late 2022. It looks like boeing is keeping Qatar Airways as a customer and the 2 sides reach a deal that would begin deliveries as early as 2022 meanwhile production problems of a specific plane model have boeing officials answering again to the f. A. A. Charges has the story. Khatami become the biggest purchaser a boeing 777 x. Planes as the company commit to take all 60 aircraft at a house on order all this as the f. A. A. Investigates potential manufacturing flaws in some of boeings 787 dreamliner zx. Today boeing confirming qatar is moving forward with 6770 x. Planes the companys largest fleet by far the 1st aircraft arriving in 2022 and deliveries will continue to 2029 qatar c. E. O. Akhbar all baker said in the statement it is a very good airplane and we will take them all for fleet replacements we are happy it has been delayed otherwise we would have been taking delivery during kovac 19 the aircraft was originally supposed to be delivered at the end of 2019 but engine issues have slowed the test program significantly as well as increased scrutiny from the f. A. A. After 2737. 00 max crashes killed 300 and 46. 00 people the news of the agreement comes just days after the f. A. A. Announced its investigating potential manufacturing flaws involving some boeing 787. 00 dreamliner according to the wall street journal production problems at the dreamliner factory prompted air safety regulators to review Quality Control lapses going back almost 10 years boeing has said airlines operating at 787 dreamliner has had removed 8 jets from service as a result of 2 distinct manufacturing issues in fuel sludge sections the f. A. A. Said in a statement the agency continues to engage with boeing it is too early to speculate about the nature or extent of any proposed airworthiness directives that might arise from the agencys investigation. Boeing says that the rest of the inservice fleet has been determined to meet load capability and that its inspecting air. Means in production to ensure any issues are addressed prior to delivery but they do add that some airplanes have shims that arent the right size and some areas do not meet skin flatness specifications the company said in the statement individually these issues while not up to specifications still meet limit load conditions when combined in the same location however they result in a condition that does not meet limit load requirements meantime the f. A. A. Could require inspections covering hundreds of jetliners after issues out one plan such as a directive could impact between 900 and a 1000 reminders that have been delivered since 2011 reporting in new york Trinity Chavez r. T. Time now for a quick break but stay here because when we return china is calling out the United States for bowling its tech for President Trump threatens to decouple the worlds 2 largest economies as we go to break here the numbers are the clouds. Ellwood forward to talking to you all. That technology should work for people. I robot must obey the orders given by human beings except where such orders would conflict with the 1st law your identification we should be very careful about Artificial Intelligence the point over you see is to trust our government here. Are the areas charged with Artificial Intelligence will summon the demon. The obamas protect its own existence which exists. I feel that. You just have to fly between 2 things and as fast as you can. Do much because i was watching the producers in which the british or the. National association for some of the other natures. Of the original stories important the stench of ice water rushes in racing is competition in the extreme whoever follows the specified route between the lines with the fastest time just to get a. Reasonably good youre going to hit every church. Plus loucheux to give you the trailer. China is pushing back against the u. S. Crackdown on its Tech Companies theyre launching an initiative on global Data Security and saying that it will oppose what it calls us balling. With regard to Digital Security we are trying to has always been broad and level with openness and cooperative with all countries especially those intentionally smearing spidering china while delegation which could make such a promise like china will be beneficial to the mutual trust and cooperation on Digital Security issues market among all countries. Chinas initiative on global Data Security is being established to oppose the u. S. And what china calls a pledge they send up of. The Data Security along with double standards well joining us now to discuss digital bus cohost an investigative journalist and swan and board member of the British American Business Association for which hillary lets start with you clearly this initiative being set up by beijing is happening in order to to resist u. S. Pressure being applied on these chinese tech firms does this mean the u. S. Effort to damage chinese tech is actually working well i think it is working to a certain extent yes of course but i would say sara that if you look at the jefferies analyst on headed up by addison lee as he says this actually could be a lose lose proposition why is that that is because the chinese currently are importing even more chips Semiconductor Chips than they do or oil so they have actually a 10 Year Initiative which is to manufacture about 60 percent of their own chips by 2025 theyre ahead of schedule and if they stay on schedule that means theyll be manufacturing 70 percent of all the semiconductor tripps chips internally domestically there in china so the lose lose proposition could be that the ban on china means that a lot of the u. S. Manufacturers of Semiconductor Chips are going to be out of business and actually i think bill gates and others have been microsoft have been. Vocal about this especially because i know the u. S. Weve talked about this before does rely heavily on the pricing on getting these chips for cheaper and less money from china etc then youve been critical of the u. S. On this matter but not necessarily in support of the chinese. Yeah theres a surly in support of the chinese because i dont think its a kind of and in some game where its either one side or the other i think that what the u. S. Is doing though is a mistake in terms of specifically targeting Chinese Companies because what it does is it sets us up in a very precarious position where the u. S. Government is taking a position on the operations of private companies so again we can discuss whether or not the Chinese Government has influence over those companies i think certainly they do but its still so its a very sticky precedent over what companies the u. S. Government can target and in this society this supposed to be a Free Market Society which obviously were not truly that but we should be we aspire to be and if we are truly ever going to be a Free Market Society then you dont want government to pick winners and losers and decide what companies to shut down which which to control again having said that you still have the antitrust laws you still have things you have to be concerned about in terms of Companies Getting too big but i do think in terms of china we dont want government to decide what companies can operate what can and cannot happen in which companies can be simply taken away as in the case of tiktaalik which the u. S. Government obviously has been trying to do and weve been saying this time and time again with now shutting down from not a lot no longer allowing a Chinese Investment here the chinese are or the americans the u. S. Is where are worried that the chinese will come in invest by and take control over the country and essentially be the 1st over the United States hellery we know that stock in chinas top chip maker they fell sharply after the u. S. Government said that it was considering placing export restrictions on the company now is this because the markets realize that the trumpet ministration theyre not bluffing when it says it will crack down on these companies well actually yes sorry youre right of course and most people do realize that doesnt really bluff he tends to do what he says hes going to do something sticks by things that he said yes on monday actually yesterday the stock tumbled and hong kong about 23 percent overall oh dont forget were talking about snake the semiconductor. Semiconductor might. The Factoring International court makes stock though year over the year is up 53 percent and the reason is that 53 percent is like i just mentioned they are manufacturing so many chips at a rapid rate theres a tremendous amount of mess and investment has fought to china because most people recognize in Global Investors recognize that the chinese are ramping up this production and i would say that given what trungpa said most people know and can predict that the manufacturing will be more intensified over there because they know the chinese are planning that they wont be able to import from the u. S. Well u. S. China relations have been increasing weve seen this that thats no mystery or no surprise but President Trump said that now hes considering decoupling the u. S. Economy from china and that china now says its considering doing the same thing what exactly does that mean though that the couple is actually stepped up bed to go have a no go. The couple in is is separating the 2 economies so thats the phrase thats being used but actually the chinese are recognizing that trump isnt bluffing and that trump means what he says and theyre hedging their bets because you know it looks like maybe trump will be reelected if biden is elected obviously hes had so many connections to china over the last 50 years he probably wont be as stringent so what are they doing the chinese actually do coupling themselves one of the major issues of course has been given the virus a lot of the antibiotics i think 98 percent of manufactured in china whether its for medical production medical supplies and or semiconductors the decoupling is happening on both sides of the pacific well and many are predicting that biden will actually take a hard stance i mean we hear palosi we hear both sides of the political aisle saying that china is a threat and it is a problem then. Yeah i dont believe that at all look i think that everyones trying to kind of follow whats wrong has been saying President Trump whether you like them or not as been a way out in front of confronting china he did it in his 2016 campaign hes doing it again whats fascinating here and what no other president would be doing whether republican or democrat i think its you can argue with this the president actually may try if he gets a 2nd term here to move manufacturing out of china in the area of pharmaceuticals in the area of chips a lot of people say its impossible it cant be done theres no way youre going to be able to bring those jobs back to the United States while he thinks he can do it and if hes able to he would actually manage to do something that no other president republican or democrat has even attempted to do in the last 40 years that i dont how is that going to hurt hillary how is that going to hurt the u. S. Citizen the american consumption where manufacturing yes will be here but want to be more expensive how how is that going to play out well actually maybe more expensive but certainly with more american employment and they caught what trump referred to and it has a noble address as the carnage across america where you see manufacturing had left america due to nafta and obviously manufacturing moving to china due to tax incentives to do so from previous administrations youre going to see with Great American employment it may be a somewhat more a little bit more expensive but there will be such affluence and such a cash flow here that it wont matter as much it will balance out and its safer what weve learned from this will have played is that its far safer for manufacturing also to be in the u. S. Rather than offshoring and weve seen far and im going to go had been if i can just say one thing about that to you there is a myth associated with this if you go back into the america of the 1940506070 before jobs were being off shored and sent off to mexico and then into china for decades americans made products here and products were not so ridiculously expensive that people couldnt afford the correct the corporations have sold us a lie that says that if you have jobs here in the United States you will be able to afford anything items wont be cheap any. But look at the results of that we have millions of americans who dont have jobs or good paying jobs and a middle class that has vastly disappeared but yeah we have some cheap stuff from china well that also when you link this to the current riots the social Economic Situation in america wisconsin thats where that was the heart of manufacturing at one point detroit was the heart of you or us order industry that was what has decimated a lot of these riots i mean you know a lot of the always about racial issues but its because everybody there is an employee its time to bring time to bring that employment back to United States the question now during this pandemic benson and heller for which thank you both so much for joining us today. Thats all the time we have for today but looking back. Were entering into this strange place you know i think about in the ninetys in the beginning of perpetual copyright and so a copyright essentially laws become perpetual and intellectual creativity is dead and to a large degree now after petrol live at home so the dynamism that would be coming with new household creation is dead and to a large degree propecia wall money printing money and money pritchard oberg so we have this deadening of Economic Growth because the printing money keeps the Zombie Companies and the zombie banks alive so were were basically burying ourselves to them for perpetuity. Nobody was theres a workable big. Moves and sure there. Is a very clear and its. Almost a move. So she wrote the book you. Used the book with the girls discovering the use of the. User but. Of course you. Just find germany saying its there were a few supposedly russian opposition figure Alexei Novelli was poisoned with novae chalk the russian doctors who 1st treated him claimed thats pure fiction one must go demands proof. Cd a figure of the better result position is arrested on the border with ukraine but it made differing versions of events president shares his understanding of what happened in an interview with russian journalists. The british governments handling of the pandemic has forced many state Health Service doctors to consider quitting according to a new poll found. That