hello there i'm aaron ade this is boom boston these are the stories that we're tracking for you today. first up pimco ball small madell area and 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 watts to talk the data both here at home and 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 in will be asset management giant in mid march now bill gross will now serve as the primary public face of the two trillion dollars from mr gross's pimco total return fund suffered industry record outflows in twenty thirteen when stocks posted their biggest gains in over a decade because efforts to build a stock fund business wavered 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 that 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 yuan and why it. 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 i 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 probably does is good anything about private fifty do dozens of bad if a private think there it is good in public that you do it 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 be in their own directness to get out of trouble but up to a large degree public sectors that are and can print their own back notes back those to get out of trouble so it's actually the profit did ensue caused across use and when you see rising public debt that's normally because of collapse in the level of private sector funded sixpence which are specifically because the prophet who stopped 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 our steve king's death watch you you showed us 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 or it's 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 the housing bubble

appearing out of that which built some housing been struck. but you mean when it happened too much housing construction and mainly drive of the process rather than actually building new a new facility for people who 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 even said that is the households that the bar are going to gigantic skyll dramatically increasing the level of their house or service and they're all 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 war debt service so it means you have a constrained consumption sector and that particular drop becomes out of the household wanting 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 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 us is at three decade low is now one full low household debt service costs help the stain an american recovery. certainly makes a doozy of a household's you have borrowed money to continue servicing that it doesn't make it easier for retiree's they thought they were doing the sensible thing by saving money and buying bank bonds and so on if they can get. them to consume so because about why it's 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 accumulated that much there isn't just the servicing cost that matters to those people it's also the fact that they can only continue repaying that debt if they continue having an income and of course what that means is the even the credit 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 on to my job in the future and if you think a 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 today and fundamentally that's because the financial sector profits by creating debt and already talk about america being dominated what is it how it used to call the military industrial complex that's been replaced by a file more dangerous object i call the politico financial conflicts 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 stock and unfortunate as well to live but they do and in many ways the zero interest rate policy of the fed is big picture writing 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 i've carried out and one of the reasons you can separate how insane it is is the site 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 free try 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 milton friedman and when godly on the far left wing and one of the right instructors of non-normal the docs know an equilibrium approach to to economics and both of them said the road was the protection of the waiting to happen about ten years before it came into existence and i sort of god when god leaves making the best statement about it i'm 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 the government sector because that's wrong you wrote this not in ninety two 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 a law must. occur in a paranoid individual how bad it 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 you get people who again the recipes that divide myself in economics more mainstream

perspective i pulled all of this aside in the year i was attached or fee because you cannot just have a central bank if you're going to have a single currency you must also have a treasury which can distribute. government created money when this is down to the new one particular part of the rule among mass and because europeans didn't establish that and they're imposing searches based on the measure of trade which is 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 arizona 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 center of hot money and financial speculation around the globe it's no surprise that things like a.r.g.s 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 glaring i think in many ways in terms of a domestic situation would be the netherlands because they've got an extremely 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 markets plus in today's big deal i did 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.

crosstalk rules in effect that means you can jump in anytime you want. the piece of legislation was terrible to say the i'm very hard to make out a letter to get along here a plug that never had sex with that her make their lives let alone. listen to this little i'm

lists lists about. the. we welcome their name and have remarks to be terrific hosts on the our team at work . it's going to give you a different perspective give you one star never i'll give you the information you make the decision don't worry about how breaking with. the revolution of the mind it's a revolution of ideas and consciousness. with the system it's very very produce would be described as angry i think i'm a strong. leader single. back now is more from fever keen now dr king 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. months up and take in regular sky news all about what should happen to interest rates and i doubt that publish what i say but every time i say. it's i had and introduce loan devaluation controls for example which is the simplest way to control the amount of money in a bank and lend to finance house butchers now that's been ignored ignored ignored it nor the north and then an august of this year lo and behold the new zealand central bank introduced land evaluation controls so rather than this being up at the view by me it's now a concrete idea of course that was ignored by the australian reserve bank and what has happened instead of with rights falling down there it was a great feeling going to implode like three percent two and a half percent down generally headed lower in the next year. that has meant that

mortgage rates have fallen to five percent of the order of five percent and people who are looking at their returns on both becoming absolutely flat levels think what enough property instead so we now have the baby boomer generation to make money out of the bubble in the first place diving back into the market is and the. 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 in this is less than ten percent is now bought was the remainder of people upgrading their houses so consequently house prices now too expensive for people who don't own a house wouldn't consider buying one but what's keeping the bubble going is that speculation by the first time buyers will more importantly more dangerously we have the world's largest superannuation scheme superannuation wealth of the. 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 they means is what are the brother of one of the house trillion dollars of money sitting there been treated by housing industry and it could be three or four trillion dollars when you believe that one and half trillion dollars up 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 if you save america's news israel catches cold but to give a child it's news as a stray it will catch pneumonia but the question of when joy when to try to snooze and how effective are its prophylactics against that but that's no 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 of what of what the government called. it is supposed to which i'm more accurately

read part of those time vendors boost by giving people who borrowing 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 because the bubble the restart then when that started to peter out that's when china's enormous increase in its financial stimulus for its economy to overcome the impact of the global financial crisis on it came through and hit our mineral exports and that was a huge novel and the bolts of minerals of course but also investment to build new mining 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 probably 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 paul when they maintain the financial the meant to keep this that

they have a bubble going. but with they do then we will see a collapse announcement of trade and a collapse and now road materials exports and that will also will completely cut the ground out from these drying economy we're certainly seeing 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 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 would you be all 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 sile there obviously going to be a victim harvey norman of the world who defected a 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 in housing and if that starts to soften 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 non 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 on vinyl is 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 when the first 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 a bit coin and vegas yeah. now we're talking about because a lot on this show and a lot of people would call big again bill 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 co-owners golden gate hotel and casino when the deal las vegas casino hotel will begin accepting big points today as payment for hotel rooms and what do you think about this good idea bad idea i want to hear 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 called over in terms of retail and we have these two companies in terms of casinos and over time you know crypto currencies as a payment method because you know the algorithm it will be because it will become ubiquitous so it's kind of always see the 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 pickling friend gets the less exotic things but the big one purchases at the casino hotel will be processed through big pay now big pay is 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 it pays 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 it 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. 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 you could have your employer pay you via that payment system so it was fantastic to me i don't see any problems there you know the fees that you get 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 but 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 called 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 said. some of the same things that 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 it 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. from there he now reason horwitz which is the 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 over the platform might be application will will endure but. seller by we i mean 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 based on speculation at this point and you know the potential crash is pretty hot i think that because it 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 a great the so we're to ups the pretty flowers afterwards of 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 you said please check out our facebook page at facebook dot com slash boom bust r r t also follow walk on twitter at aaron eight and edward edward any age on twitter from all of us here boom bust thank you for watching until next time check out. as

a new physician i swear to abide by the crowd to go. to the best of my ability and judgment. i will prescribe for the good just my patients. i will not give deadly doses to anybody. or advise of those to do so. i will never do harm to. doctors of the dogs on. old. technology innovation all the developments from around russia we've gone to the future or covered. i've got a quote for you. it's pretty tough. if they were it's not story.

but if this guy like you would smear bad guys instead of working for the people most issues in the mainstream media are working for each other dr wright was a danger to my home. they did rather.

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