on. one. hello there i'm aaron age this is boom boston these are the stories that we're tracking for you today. first up pimco ball small madell area announced he'll be stepping down as head of the two trillion dollar investment firm so rude slated to take its place i'll tell you coming up an economy economics professor sat down with watch to talk to dad both here at home in the land down under lost in today's big deal ed harris and i talk about decline coming to a vegas casino near you it all starts right now.

after seven years at the helm of the as the big investment management co or pimco mohamed el they are and will be asset management giant in mid march now bill gross will now serve as the primary public face of the two trillion dollars firm mr gross is pimco total return fund suffered industry record outflows in two thousand and thirteen when stocks posted their biggest gains in over a decade pimco is efforts to build a stock fund business wavered it despite many investors looking for a higher yielding alternative investments like equities and junk bonds. elsewhere the prosecution's star witness in the case against former s. a c. trader matthew martoma turned against the former portfolio manager on tuesday dr sidney gilman testified that he lied to the f.b.i.

and regulators for nearly a year about passing insider information in the summer term up now dr gilman said quote i was intensely ashamed of it. i was hoping the whole thing would go away. well it didn't dr goldman's testimony is at the heart of the government's case against mr march emma who they say cultivated a friendship with dr gilman and then corrupted him by seeking to gain confidential information about a clinical trial for an experimental all simers drug being developed by pharmaceutical companies you on and why you. and finally you on musk's electric car maker tesla has installed eight of its fast charging stations across europe four of which are located in germany and cities along the autobahn now with fourteen charging stations located throughout the continent continent tesla's free electric car charging network has significantly expanded throughout europe while tesla's european market is smaller than that of the u.s. in terms of sheer volume there are already a decent amount of tesla customers in european cities with environmental leaning

populations and electric car incentives tesla now has eighty one super chargers installed worldwide and the company launched the three charging stations to help extend the range of its model s. cars which get about two hundred to three hundred miles per charge. well there you have it as always we'll be tracking these stories and keeping you posted on all the latest. fifteen is a well known economist who is considered one of the leading critics of mainstream economics treatment of debt and money now he considers himself a post keynesian in that he had hears to many of john maynard keynes ideas that demand matters in the long as well as the short run but his focus is debt and specifically how hyman minsky's financial instability hypothesis is reflected in

highly indebted economies now right now dr king is working on an ambitious mathematical model of financial instability simply called you know i spoke with steve earlier this week and asked him whether his principal concern right now was private debt take a look. well that's really the the main driver of the economy and this is the amazing thing that economists tend to believe that anything it probably does is good anything about profits that does dozens of bad it will probably think there it is good in public that we did is bad but the ironic thing is normally a new invention would be comment that was completely wrong this president so little wrong because in many ways public debt is easier to handle than private debt for the simple reason that a person who isn't a profit person can't get their own back not to get out of trouble but up to a large degree public sectors that are and can print their own bank notes bank notes to get out of trouble so it's actually the profit that the consumables to

cross use and when you see rising public that that's normally because of collapse in the level of private sector funded sixpence which are specifically because the profit to stop borrowing money much for saussy what caused this crisis and because of conventionally comic book it still hasn't been identified as the cause of the disease was suffering from now so what you have around the world is economists advancing countries to treat the symptom which is public there rather than the cause which is a collapse in the right of growth of profit. and interesting and different perspective than what you hear often now you wrote in a recent blog post on steve king's death watch you you showed us a scary graph of the ratio of u.s. household debt to out but now with the household debt rising from just over twenty percent in the early one nine hundred fifty s. to over ninety percent of g.d.p. before the financial crisis began the question is do you believe this debt will present a problem for the u.s. going forward going to be two reasons one is that the private sector borrowed not

to constructing that's what the the the business sector when it borrowed money can borrow money to have build factories and so on the household sector when it borrowed only borrows to buy houses and therefore you have a housing bubble appearing out of that which built some housing construct. but you mean when it happened too much housing construction and mainly drive of the process rather than actually building new and new facilities that people live in what you need for a robust economy is the new factories to be bill new products to be designed new technologies to be invented and so on and that will fix on borrowed money and that hasn't happened so what david said happened is that households that could borrow going to gigantic skyll dramatically increasing the level of that house to service and therefore being unwilling not only to borrow the money but even to this day in the money they currently have because so much of their money is now devoted or debt service so it means you have a constrained consumption sector and that particular drop becomes out of

a household one and soon won't be there so we have many many financial reasons what economy is now causing stagflation ok what about interest rates there are the fed's zero rate policy it has all interest rates so low and here in the u.s. that the household debt service ratio vanity u.s. is at three decade low now it won't pull lower household debt service costs help to sustain an american recovery. it certainly makes a doozy of a household's you have borrowed money to continue servicing that there it doesn't make it easy for retiree's they thought they were doing the sensible thing by saving money and buying back bonds and so on and you begin to get. them to consume so because both ways low interest rates make it easy for those in debt to spend an image make it harder for those who aren't and save money to spend so it really casts of the self doubt many many ways and the trouble is if you have an economy where people have that much to it it isn't just the servicing costs that matters to

those people it's also the fact that they can only continue repaying that if they continue having an income and of course what that means is the even the threat for almost right down to zero if you have an enormous debt level and you're looking at that debt level you think what's the. the probability of me hanging out of my job in the future and if you think of probability is low it will not consume no matter how the voting rights fall so it's really the fact that we live the private sector and take on that much debt and fundamentally that's because the financial sector profits by creating debt and already talk about america being dominated what was and how it used to call the military industrial complex that's been replaced by a far more dangerous object i call the politico financial complex and the politicians can't imagine an america without a financial sector of the scale that it is but the size of the financial sector is the major cause for america's problems so it's going to be

a long hard road to reduce that debt level and get it to the down to the side where the financial sector falls back to being the servant of the physical economy rather than a small stop and unfortunate that's what we live but they do and in many ways the zero interest rate policy of the fed is perpetuating betting that imbalance in the american economy ok now is the situation in europe different because of the euro. i mean this is one of the most insane policies that are carried out and one of the reasons you can separate how insane it is is the side who opposed it and normally we could get a lift when right wing split on particular policies that with the right wing can still be in favor of pretty dry lifting tends to be in favor of protection and so on but ironically here i can take a person from the far right and spectrum of the american economic supplement milton friedman you can't get much more right wing in milton friedman and when godly on the far left wing and one of the right instructors of non-orthodox know an equilibrium approach. to economics and both of them said the road was the

protection of you waiting to happen about ten years before it came into existence and i was sort of god when god leaves making the best statement about it and saying that the people who put the road together. because they didn't establish a treasury but they do this at which the central bank must believe that a central bank is all that's necessary and therefore the capitalist economy necessarily which is equilibrium in harmony without needing external intervention from a government sector because that's wrong you're right there's not a non-issue by the way he said this will ultimately lead to a process when the private sector has a financial process and the only expect from this process will be by the immigration will stop action now when he wrote that not in ninety two and beloved in review of books he would have been scoffed at this in extremis alarmist. apparently paranoid individual how bit can you would describe the situation of auckland and spain and portugal and greece today when i hear many many reports of young portrait in particular for example immigrating to mozambique to find

a job while now the euro has made the european situation that bad and now you get people who again the divide myself in economics more mainstream perspective a cold all of us deciding the year i was a catastrophe because you cannot just have a central bank if you're going to have a single current so you must also have a treasury which can distribute. government created money when this downturn and one particular part of that rule a marginal as mass and because the europeans didn't establish that and they're imposing searches based on the master of trade which must be one of the most insane to go mccready's ever invented that's why europe is two or three times as bad as america program now private debt they're extraordinarily high in many european countries as well like like you mentioned but here we have a chart here and it breaks down the debts as a percentage of output and corporate and household debts they're all well over one

hundred percent of g.d.p. in the euro zone so the question is where do you see private debt in the eurozone as most problematic. well the probably the most the most extreme is england but one of the reasons that england has that extreme level of debt it was evident maggie thatcher's big bang turn to england into this into the scent of hot money and financial speculation around the globe it's no surprise that things like ideology has value and so on it could in england rather than occurring in america so. it's got the most problematic level of the same time it can be kept alive by hot money and from frankly illegal money the most wiring i think in many ways in terms of a domestic situation would be the netherlands because they've got an extra strongly high level of household debt a high level of corporate debt as well and they've now been going backwards economically the some several years without the problems of spain without the problems of greece and so on so i'd say the netherlands are the most extreme

example. now coming up after the break more with steve keen we talk about the australian economy and housing market plus in today's big deal at a harrison and i talk about what a big deal it is that some vegas casinos have started accepting bitcoin today just today they started and as we had a quick break here is a look at some of today's closing numbers with the bell stick with us.

we welcome erin made an abby martin to be terrific oh show me our team at work. it's going to give you a different perspective give me one stock never i'll give you the information you make the decision don't worry about it i'll bring you the. revolution of the mind it's a revolution of ideas and consciousness is pushed through the system extremely probably would be described as angry i think in a strong. or single. the

but. it was a. very hard to take out. once again. that had sacked the center right there. and. the piece.

of the. back now is more proof steve it keen now dr keane has been warning about a crash and australian house prices and in the second part of my interview with him i asked him to give us an update on his view of the housing situation there in australia take a look. fifteen fifteen days and months off and take in regular sky news all about what should happen to interest rights no doubt but that they publish what i say but every time i say copyrights i had and introduced loan to value controls for example which is the simplest way to control the amount of money in a bank and lend to find and so i also pushes now because that's been ignored ignored ignored ignored it noise and been in office of this year and lo and behold the new zealand central bank introduced one devaluation controls so rather than

this being up with it why do you buy me it's now a concrete on a course that was ignored by the australian reserve bank and what has happened in state it with rights falling down there it was a rifle and employed provides lies for eight percent to an opposite that. generally headed lower in the next year. that has meant that mortgage rates of fall into five percent of the order of five percent and people who are looking at their returns on becoming absolutely flat levels think why do not buy a property instead so we now have the baby boomer generation who made money out of the bubble in the first place diving back into the market as investors and we have now had the highest level of so-called investor borrowing into the housing market in our history so about fifty percent or more of the borrowing is so-called and this is less than ten percent is now for the bottles the remainder is people upgrading their houses so consequently house prices now too expensive for people who don't own the house wouldn't consider buying one but what's keeping the bubble

going is that speculation by the first time buyers with more importantly more dangerously we have the world's largest superannuation scheme superannuation wealth of these drugs in their retirement scheme look like the american for a one k. is one and a half times the size of the economy and recently about five or six years ago the government allow people who manage their own superannuation funds to borrow money to buy housing so that means is one of the rather one in the house trillion dollars of money sitting there potentially to buy housing industry and it could be three or four trillion dollars when you believe that one half trillion dollars are best astronomical now i'm talking about australia it's hard not to mention china so i'm going to do that sound of the con of me at slowing and commodity years has slowed right along with that my question is what impact do you believe this will have on the australian economy. well. to save america's news israel matches call that big of a china's news as a stray it will catch pneumonia but the question of when judge when is china's news

and how effective are its prophylactics against that that that's news china's stimulus is the one of the second major reason of the trade and through the financial process so well the first reason was we restarted that housing bubble with lot of what the government called first time and is supposed to mature more accurately read part of those time vendors boost by giving people who boring money to buy their first house two or three times as much government money up to twenty thousand dollars from the government bought to buy a house as opposed by out and that was the bubble the restart then when that side to peter out that's when china's enormous increase in its financial stimulus for its economy to overcome the impact of global financial process on it came through and hit our mineral exports and gave us a huge novel and the bullets of minerals of course but also investment to build new bonding facilities and so on so we're now dramatically beholden to what happens to the chinese economy now i regard the chinese communist party leadership is possibly

the most intelligent leadership on the planet but also caught in the up in the bubble to manage the system but also with massive reserves so i'm not about to call them to think china will solve this i know many other people are talking about the possibility of call when they maintain the financial the mentum to keep this from the bible going but if they do then we will see a collapse in outs and to try and eclipse the now growth materials exports and that will also will completely cut the ground out from these drying economy which certainly sitting at a time of rosin the level of unemployment in australia despite the impact of that investment and the export them so we're suffering a slow believe blacks are the reality of the destroyer is not different to the rest of the world we're all caught up in this financial process we have time for one last questions i want to ask you which company is specifically what do you feel on the impact of an australian housing slowdown would affect most.

well on a company like borel that depended on the production of new housing for the large part of the this syle they were obviously going to be a victim of the hobby and all of the world would pick their stock out those houses there and ultimately the banks are the ones of the most exposed because now the banking sector is asset backing is fundamentally the acid back into the valuation of the strike and housing and if that stops the software then their excessive levels of valuation are going to fall down remember of course the back in ninety ninety when japan when through the first bubble economy that we should all of learned from and we all fail to learn from by saying that's just a japanese problem back at that stage none of the ten biggest banks in the world the japanese now none of them up now i think the strategy that i think has got something out of one all is that one of two given the size of our economy that's outrageous one of two of our banks are certain it will stop ten banks that's ridiculous given the size of our economy so that of. steve thank you so much for

your time manner and say we love having you on the show and hope to have you back on very soon and thank you thank you walk america by. there was steve keen professor of economics at the university of western sydney now it's time for today's big deal. mr ed harrison joins me now to talk bitcoin and vegas yeah. now we talk about because a lot on this show and a lot of people would call big gamble but today for the first time we're going to talk about bitcoin and gambling coming together as one in none other than las vegas nevada that's right two separate vegas casinos have announced that they will become the first commercial gambling institutions to allow the use of the unregulated virtual currency bitcoin now the cone golden gate hotel and casino when the deal

last vegas casino hotel will begin accepting big points today as payment for hotel rooms and if what do you think about this good idea bad idea i want to hear your thoughts i think it's just the beginning what it's basically showing you is that big cooling is going you know they're going mainstream i mean these are really the biggest hotels or the best hotels in las vegas but it's the beginning you know you start with some calls over in terms of. we have these two companies in terms of casinos and over time you know cryptocurrency is as a payment method because you know the algorithm will be because it will become ubiquitous so it's kind of what we see with a guy we were talking about this before you know it you said the internet it's it was fringy when it first started people like the internet that's creepy but now you know like requiring. less exact things but the big one purchases at the casino hotel will be processed through big pay now big pay as a service that streamlines transactions using tablet mobile interfaces tablets

programmed with bit pay will be installed it each cashier allowing users to easily pay for services using their mobile wallets and. it seems like the pay is one of the biggest winners here when she say no i would definitely say no the question is quite a currency war is it a payment. or is the payment aspects of you know paid the most interesting and what is that here one of the payment that's a good question because you know you're looking at not just the currency aspect of it but you're looking at the fact that it's on your mobile it's a payment system think of pay pal or any other payment system i mean to me that's the real innovation within terms of bit is the fact that it's a payment system and it is a direct threat to something like paper but it's not just about paper it's threat there but it's also a threat to the current banking system just imagine that you don't even have to have a banking account you can use because to make transactions in

a very low or no cost way in the same way that you would be able to move money around in the banking system without any delay mediately right now you can have your employer pay you via that payment system so it is fantastic to me i don't see any problems there you know the fees that you have slapped with for simply i don't know moving money from one account to another you know like you said the checks they need to clear their time but having it instantaneous they would be brilliant you know i agree and you know the real question is how can we get this payment system to settle down in terms of the store of value in terms of the you know the how much because it is worth it in terms of the actual application the platform a bit because of crypto currencies i think that this is an idea that is definitely moving mainstream now you're mr popular on twitter you have a ton of followers that i noticed yesterday that you had a long conversation yesterday on twitter or battle if you will now a conversation about big coin in general can you tell us

a little bit about that because it's fun to watch your marc andreessen who is a venture capitalist one of the founders of netscape wrote a great article about bitcoin and he's saying. some of the same things i'm talking about he was talking about bitcoin being you know as a venture capital something that he was really looking into in terms of the technology and he's thinking he was saying you know economists are always talking about it in terms of the currency you know forget about the currency don't talk about the currency it's the technology underneath and he was saying you know the internet started as a whole frenzy kind of thing when i was in it with netscape and look at it now look at it today it's it's really taking over and he thinks that one will go in the exact same direction and reason he was my sake into internet. he was in that. from there he now has injuries and horwitz which is a venture capital company great so now what i want to ask about big question are you saying the big question itself could crash and burn that is that would you think is going to happen or platform might be application will will endure but.

seller by the good question in terms of will bitcoin actually work over the long term i personally i think that big call ins value is going to it's based on speculation at this point and you know the potential crash is pretty hot i think the big court is probably a bubble but you know the application the technology the platform is there not just for currencies but for other things and definitely in terms of the payment system i think it's great that so we're two ups you know pretty flowers afterwards novels all of that it's all for now but you can see all segments featured on today's show on you tube or you tube dot com slash boom bust our teeth well so love hearing from music please check out our facebook page at facebook dot com slash boom bust r r t you also follow walk on twitter at aaron eight and edward edward any age on twitter from all of us here at the bus thank you for watching until next time shower.

it was. very hard to take. that back with that break we're.

going to. interim agreement with the rent is no in effect what are its prospects can't it israel and its congressional i want specifically the senate to kill the deal and if for some miraculous reason all sides agree to keep to the agreement what can we expect next. i got a quote for you. it's pretty tough. they wait substory. let's get this guy like it's done working for the people hold tissues the beach. ritual bridegrooms days and. they did it well.

coming up on our team diplomatic talks to bring peace to syria start off on a better time on the syrian government demands that foreign governments stop supporting syrian rebels the u.s. secretary of state john kerry doesn't see any way forward unless syrian leader bashar assad gives up power the latest on these talks just ahead. and the former governor of virginia has and his wife have been indicted the feds say they've you legally accepted gifts from all wealthy donor is this government corruption or politics as usual will dive into that ahead. and the company behind candy crush the candy crush saga has trademarked the word candy and bands.