tv Worlds Apart RT June 12, 2019 11:30pm-12:01am EDT
i. this is a boom bust broadcasting around the globe and covering the world of business and finance an impact upon a soft brito another day another twist in the rocky trade relationship across the pacific from the u.s. cracking down on china to the port problem facing the people's republic john quelch the dean of the business school at the university of miami is standing by to break down what lies on the horizon for beyond the hostile trade rhetoric you control risks are not unique to china and the u.s. may start to feel some heat despite some positive news for the stock market professor wood richard wolf is on hand to help us sort through stocks and what we can expect moving forward as u.s. has opened up to multiple fronts on its trade war we've got
a jam packed show today so let's go ahead and dive right in. the ongoing trade war with china leads our global report again today as wall weighs consumer division c.e.o. richard you confirmed an indefinite delay in the company's much anticipated new line of laptops while we was set to reveal a new line of windows laptops at c s asia in shanghai this week although they didn't plan on a while announcing a release date trade sanctions imposed by the u.s. government have hampered wall weighs ability to procure products from american companies including microsoft software and processors made by intel you also told c.n.n. we see on one stay the weiwei may never be able to release their new laptops if the company remains on the u.s. commerce department list. despite the setbacks in the consumer electronics field while his chief strategy architect one sean told the financial times while was working with volkswagen's audi and a joint venture between china's g a c and japan's toyota busy to provide their
a high tech for self driving vehicles the waterway executive added that he expects the vehicles with autonomous driving components in 2021 or 2022 and that they would be available in china and europe. from tech to food in china the country's consumer inflation grew to its highest level in 15 months and may the consumer price inflation rate jumped to 2.7 percent in may that's the highest level since february of last year the number grew 2.5 percent in april the spike is mostly due to the ongoing african swine swine fever outbreak in china that is pushing up the prices of pork and weather issues that have caused a shortage of supply of fresh fruits that plus the ongoing trade dispute between the u.s. and china has created uncertainty in china's economy fresh fruit prices rose in may by a record 26.7 percent year over year and cork rose by 18.2 percent over the same period of time meanwhile the country's producer price inflation the metric for prices that
factories charge their wholesalers increased by point 6 percent in may. going. to survey the slew of china news today as john quality of the business school versus miami welcome back to. thank you 1st of all what is your take on the story that we just reported this continuing swine flu swine fever i should say have been demick which seems to be driving an increase in the chinese inflation rate and this unusual rise in fresh fruit prices by nearly 27 percent in may. it's important because of food prices are. very visible to chinese consumers and chinese consumer confidence can be affected negatively by these kind of dramatic spikes. on the swine front one of the things through realize is that the agricultural sector in china remains extremely fragmented there are
literally millions of small farms and small produces across china and so while beijing has done a very good job of developing national standards for food safety the level to which an inspection service exists across the range of provinces in china remains limited and as a result enforcement of the standards at the local level on behalf of consumer protection remains somewhat weak. as a result you have these outbreaks which are not necessarily nationwide in scope of this point but they are spawned outbreaks which end up disrupting supply chains and causing considerable inflation in individual cities individual markets there's no doubt that the weather related factors in southern china have seriously
affected fresh fruit production but this is also interesting because chinese consumers as they've become wealthy more and more of the middle class are looking to buy fresh produce and so again at the market if there is considerable volatility in retail prices that has an impact on consumer confidence and consumer trust in the government frankly room and hong kong has been in the news with the protests against a law that would allow allow extradition to the people's. look at china now the hang seng index in hong kong is recording and sharpest drop in 5 weeks could this political controversy have a lasting economic impact in your view. i'm not sure about the last thing i can all make an impact but the hang saying is down 11 percent off its 52 week high and you know one of the interesting things to note here is that we've just come through the
30th anniversary all of the events in tiananmen square in 1989 the memories of tiananmen square linger long and hard in hong kong and i think it's been an example of perhaps. political naïve it say that the administration there has promulgate did this extradition legislation around the time of the anniversary the 30th anniversary and that that has had a provocative effect on the large student population in hong kong which is always very keen to defend democratic freedoms and sees the extradition legislation as really quite draconian allowing for any hong kong citizen or anyone on the street in hong kong in fact to be detained and. transferred to
mainland china for trial. and back to the dispute with the us it's probably too soon to invoke the cold war as a reference for this trade dispute but there was a notable drop off in attendance from china at the annual select usa investment summit here in the united states hosted officially by the u.s. department of commerce just $76.00 delegates from china attending this year reportedly down by half from 2 years ago is this a special case because of the direct involvement of the current administration in that event or do you see a real trend starting of. a division in these conferences that seemed for a while to have put aside national legions as. well chinese overseas direct investment has fallen precipitously in the last 3 years and the numbers for china investment into the u.s. for example were $55000000000.00 worth of investment dollars worth of investment in 2016 falling to 9000000000 in 2017 fall into 5000000000 in
2018. over old china has read directed its foreign direct investment away from the u.s. and europe towards belt and road initiative countries. but this is not to detract from the fact that the drop in the u.s. foreign direct investment is particularly high part of that is a function of us regulators blocking chinese acquisitions in the u.s. in fact last year approximately 14 deals. potential acquisitions were blocked by the us under the safe us regulations and as a result obviously the actual numbers for foreign direct investment into china from china into the u.s. of fall and so the attendance of this conference is really
a reflection of these realities that's interesting a lot of that decline apparently is as you know due to official decisions from citi has declined ing that chinese investment i had to get your reaction to white house economic spokesperson larry kudlow who said on a rival network that the u.s. could still hit 3 percent growth for this year even if there is no way as aleutian of the trade fight with china is that a credible prediction. i think it remains a credible production. obviously the recent job creation numbers were relatively low and recent manufacturing order numbers have been a little bit soft but the fed of course has indicated that it stands ready to and so the free with a rate reduction if needed to keep the economy humming along it's worth noting of course that the u.s. g.d.p. growth if it's 3 percent for this year will still be hof of the
g.d.p. growth in china which is for costs to be between 6 and 6.5 percent for 2019 right and another head turning comment this week came from the head of the u.s. china business council who said the u.s. was trying to murder while away he basically allege that the white house could have banned simply banned while way from u.s. infrastructure but their actions indicate ambition beyond that to not just keep them out of u.s. systems but put them out of business what's your reaction to that claim well obviously huawei is a flagship national champion company for china and for chinese technology as it's a wonderful company it's brought terrific innovation already to the marketplace and in many markets not just in not just in consumer. smartphones as we as we have seen but beyond that they have very very strong
technology and one of the things that we're seeing gradually is that this tariff war is morphing into a technology war where the united states is using blocking tactics to try and slow down competition that might gain a march on u.s. competitors world wide so by. seeing. u.s. companies such as google and microsoft and so forth from selling their products or services thing. products they of course are making weiwei products potentially less attractive in the global market so even though why waste selves very little in the united states as it is if these actions on the part of the u.s. government prevent huawei accessing technology upgrades from its
u.s. suppliers or buying qualcomm chips etc that is potentially going to slow walk away down and therefore put a little bit of a break on wall ways ability to dominate the 5 g. networks globally now excellent insights from john quelled steen at the unit of dean of the university of miami's business school thank you very much for your time . thank you. and turning from china to any of the corporate affairs ministry there is seeking to ban 2 well known accounting firms from doing business in india for 5 years over alleged failures and auditing the now mentor us bank l i n f s financial services ministry officials have potential petition the national company law tribunals for a 5 year ban on deloitte haskins cells and an affiliate of k p m g b s r n associates over their failures and on its wing of infrastructure leasing in financial services the ministry accuses accountants at the 2 firms of colluding
with the management of i l n f s to conceal the poor state of the failings banks finances those charges were 1st officially leveled last month after investigation by india's serious fraud investigation office last year another big name in accounting p w c was barred from on a sing listed on the indian companies for 2 years over similar charges and another case. for a quick break would hang here because when we return financial risks are not unique to china as the u.s. may start feeling some heat despite some positive news from the stock market professor wolf richard wolf is on hand to help us sort through stocks and what we can expect moving forward as you opened up multiple fronts on a trade war and as we go to break here are the numbers of the court.
in october 27th the german newspaper published amount of the european union the last 30000000000 euros as a result of its very anti russian sanctions. it particularly affected easter. many polish films went broke and he committed suicide . going to his own camp to claim that i was i was of on the good i'm a poor top level but on the political rundown. on these if. you have to finance my view on the host i'm going to. have other kind of
unknown. and then let's see in the in the polling. on does. we are in a strange situation where everybody is making a lot of noise about military action against iran but nobody in the part of that alliance actually wants to do it. there's no desire for it so do you hope that iran makes a mistake. somehow. and then does it some kind of confrontation and then the iranians will be forced to come to the table you know begging for some kind of solution on american terms but you know i think that is dreaming that's a pipe dream.
there are 2 big proposed mergers to report today to salt systems of france has made an offer to take over method data solutions a firm that markets software for use in clinical trials of new medical treatments for 5 point $8000000000.00 mega data reform reportedly accepted the offer which works out to a price of $92.50. $0.25 per share meditator shares pushed toward $100.00 late on tuesday as reports of the offer circulated only to fall closer to $91.00 on reports that the deal was moving forward meanwhile in media merger news giant private equity firm k k r is offering $7700000000.00 to buy out and dusters in the axle springer media group axel spring your own properties including the online outlet business insider and then german newspaper billed k k r has promised if the 63 euros per share offer is approved to keep their new stake in actual springer for at least 5 years to give the media group time to stabilize after an expected low
single digit decline in sales for this year that assurance seems to have sought help secure support for the deal from frida springer widow of the company's namesake and founder. of argentina agricultural exporters say they are ready to pick up the slack of the trump administration eventually does impose trade tariffs on mexican imports and mexico strikes back against the us the us currently captures 95 percent of mexican cord import purchases and is the top exporter to mexico of wheat the president of the argentine grain exporters trade association gustava a day ago to us said told reuters that tit for tat terrorist between the u.s. and mexico would neutralize u.s. exporters advantage and lower transport costs to mexico and change the game for argentina exporters mr david us told the news agency right now argentine corn has a very competitive price and there is plenty of volume available for export to
mexico u.s. president donald trump announced last week that his terror threat against my sco was indefinitely suspended and suggested he may still impose the tariffs if he finds fault with mexico's implementation of their agreement on migration issues. and here to give us his usual bracing economic update is richard wolffe professor emeritus matters of action. at the university of massachusetts and hearst and the author of democracy at work a cure for capitalism welcome back professor wolf. glad to be here glad to be here the 1st item i want to see up for you is this apparent admission by the congressional author of the trump tax cut former house ways and means committee chair kevin brady of taxes that the tax cuts will not pay for themselves it's a little bit like the emperor's saying well i may be a little underdressed what's your reaction to this concession. well you know it is pathetic isn't all the game played by corporations and rich people when they want
to pay fewer taxes and the game is simple you can't say honestly i don't want to pay push it on somebody else these are already the richest people and the biggest corporations so they hire economists who are sadly for sale to come up with interesting ways to suggest that cutting taxes on big corporations won't shift the burden to the rest of us either in having to make up those taxes or in suffering a loss of public services so they make up ideas like this one if we cut the taxes it will boost the economy and if more people are working in the economy is doing better everybody will have to pay more taxes and in the end the taxes will be repaid by the economic growth that this tax cut will produce in other words pie in the sky everything is going to get better just cut our taxes now and you'll see what mr brady is admitting is they said all that including him they said all that they promised all that and now we see as happened so often that it was just b.s.
to get that tax cut through and then the chips fall a year later and we have a story like today but by this time most people have forgotten and the damage has been done certainly and you took note on twitter of some wage news in the united states what's the latest news for people who work for a wage in the united states. it's very very hard that's why i put out the tweet about it today the bureau of labor statistics the government agency in charge of doing this kind of research announced that over the last month here in the united states average wages when adjusted for the inflation went up point 3 percent well at least you might say they went up 5.3 percent but when you look closer it's the hourly wage and then when you look even closer you discover that the weekly hours worked went down by point 3 percent which effectively meant that the weekly
wage which is what of course matters to most workers went nowhere another month in which wages stagnate as they have been doing for decades now which is one of the reasons the economy doesn't get going and we're all so afraid of when the recession is coming because even though we've put more people back to work we're not painting them the way we once did by raising their wages in step with the rising productivity so it's very bad news about the government but of course president trump will tell us how great the economy is since he either doesn't know or doesn't care what the actual statistics tell us and on the other side of this at the same time you know you're noting the stagnation in wages the 3 major u.s. stock exchanges are apparently approaching all time highs do you think they'll reach that mark soon or will they have a fall back before they eventually reach those levels. well there's
a big debate going on in the financial press over the just that question everyone knows the recession is coming the capitalist economic system we live in has a recession everywhere in the world every 4 to 7 years the last downturn we had 2009 is more than 4 and 7 years ago so we are due for one and the only question now is when but here's the interesting thing about stock markets sometimes they go with the economy other times there were no alternative today there were no alternative money isn't going to produce goods and services because americans can't afford to buy them but their salary and their maxed out on their credit so the money instead of bruising jobs and producing real output is going instead into the stock market that's where the money is going is bidding up the prices of stocks so the stock market looks good but the underlying economy where we live and work that's not looking good at all and that sometimes happens and the is usually
a sign that within a short amount of time the underlying not good economy is going to yank down an overvalued stock market interesting no prison chunk has been lashing out at the federal reserve for some time demanding a cut in interest rates you see a possible scenario where that could happen walk us through that scenario. it's really very sad but it has to be said mr trump is being advised correctly by economists that we're due for a recession overdue for a war well if one hits in 2019 or even worse if it hits next year it is going to ruin his reelection campaign he can't wait he wants to do everything to at least postpone the recession beyond the election so it doesn't own do his chances at reelection he doesn't care at the densely that this hurts. a lot of
people because the longer you put it off the worse it usually is when it finally hits so he wants the interest rates to come down but the federal reserve doesn't want to do that because we've been doing that for the last 10 years and there's a lot of extra money and a lot of extra effort that has gone in and people are afraid if you keep doing that you're going to wreak a real havoc with our economy so mr trump asks mr powell the man he put in the federal reserve to lower interest rates mr powell says not so quick mr trump says i want to get reelected mr powell answers that's not my job my job is to take care of the american economy so how does mr trump get mr powell the lowered interest rates he makes the world full of dark clouds a trade war with china a trade war with india a trade war with mexico to get people so worried about a downturn that mr powell to postpone that to delay it to do what he's supposed to
do with it is to counter bad news will not cut interest rates because of all this dark news which just happens to be what mr trump wants to get elected again interesting interesting and we also saw a surprisingly big john surprisingly weak u.s. jobs report last week what are the chances quickly in your of you of a recession in the next 2 years the united states. i would say it's better than $3.00 to $1.00 that there we're going to have a recession the only real question is how deep will it cut how long will it last and made of 3rd question will it be timed in such a way to affect the election the way we did back in 2008 when the crash it but we're due for a while and capitalism has never gone very long without one we're overdue so the odds are overwhelmingly we're going to have one you hear here folks from richard
wolfe author of the. marcus at work and care for capitalism thanks as always. thank you. ride sharing giant goober has been toying with the idea of a service that would not just drive you around but could fly you as well during that were elevate summit here in washington d.c. the company announced they will begin testing guber air service next year in melbourne australia as well as the previously announced cities of los angeles and dallas the company hopes to roll out the air taxi service in 2023 if all goes well during the event or also showed a virtual reality rendering of the posh cabins you'll write in when you hail an air the v. hold the company plans to use called vertical takeoff and landing vehicles will be accessible via the up and riders will need to be picked up and dropped off at sky ports that were sky ports have elevated allison also stated that he anticipates using the service eventually will be less expensive than owning a car in major cities throughout the world. that. you can catch boom bust on direct
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you know what was the. president trying so is he sending an extra 1000 troops to poland under a deal signs during the polish latest visit to the white house. and. the u.s. officially requests the extradition of wiki leaks co-founded julian assange songs it's done stateside he could be jailed for 175 years. survivors of london's grenfell tower 5 start legal action against u.s. companies whose materials are claimed to have contributed to the tragedy. the latest on these stories head to r.t. dot com coming up next crosstalk discuss his online censorship teaching for the.