today. first up billionaire hedge fund manager bill ackman just wrapped up his latest presentation on the shortcomings of nutritional supplement producer level life so what did you say and why is he calling this presentation the most important of his career with look into it coming right up then francis coppola is on the program that madame called plus the down with me earlier to discuss financial warfare pretty tough stuff at the moment and in phase big deal edward harrison and i are discussing subprime auto credit risk and the straw that breaks the camel's back it all starts right now. another day another tile added to the rich mosaic that is the bill ackman herbalife

saga tuesday morning billionaire hedge fund manager bill ackman declared loudly and to anyone who would listen that yet again he believes herbalife is a pyramid scheme the pershing square capital boss gave what he called the most important presentation of his career to hundreds of folks gathered at the equitable conference in midtown manhattan for more than a year and has been loudly shorting herbalife a nutritional supplement company that he believes is a pyramid scheme his presentation tuesday focused on the company's so-called nutrition clubs but did act means bark proved worse than his bite as herbalife c.f.o. john de simone said it what see yes this did and that during our presentation herbalife stocks surged fifteen percent and while the two hundred fifty plus live presentation was very decked out with detail there wasn't any major bombshell in it now the biggest takeaway. it was that act and believes the company is skirting

labor laws with its nutrition clubs are going to ledges that herbalife has fictitious customers in a fictitious business opportunity he called herbalife a fraud perpetrated by a senior management and members of its founders circles chairman's club and president's team conceived designed and executed to exploit the poor ackman said that pershing square spent fifty million dollars on the investigation in claims that herbalife targets the poorest of the poor he then shared some slides based on documents that from a whistleblower at the company he also showed in the numbers of mcdonald's and herbalife nutrition clubs in queens new york and he pointed out that while the mcdonalds are spread out the nutrition clubs are all piled on top of one another the ackermann herbalife saga has been going on for more than a year and a half in late two thousand and twelve ackman publicly declared that he was short herbalife after revealing his bet however a number of fund managers most notably carl icahn is now but he again piled on by

going along the stock after restructuring most of his short to options stands to gain two billion dollars of the company fails so far however it has ripped up millions in paper losses on his bet so will his latest public disparagement help him collect on his position certainly not today. the macro economy us is looking more robust and the fed is trying to figure out when the right moment will be to start raising rates of course this is an extremely extremely difficult process raising rates too late might require the fed to act aggressively but raising rates too early might push us back into

a recession never good now to get a better handle on some of these issues i spoke earlier to francis coppola an expert in banking and financial risk management she shares her thoughts on banking finance and economics at the blog coppola comments dot com now before we discussed monetary policy i first wanted to get her perspective on financial warfare and sanctions i asked her if she could explain how sanctions constitute financial warfare here's what she had to say. well these days the financial system is immensely important not only to banks and to of new people and so close but also to governments so one of the ways of i guess expressing displeasure that stop short of blowing people up is actually to make it very difficult for them to use a financial system and that's pretty much what i mean by sanctions as financial wolf. so you know from reading it it i take away that you felt then that the u.s. had already prepared the ground for more extensive attacks on russia's fragile

economy so where do you see the sanctions issue heading and what kind of economic impact do you think that will have. well i think the u.s. is probably going to do more sanctions and i think they will be financial ones basically because they are very effective i mean when you have to look at what happened even just with these what they've done so far which is minimal really the ruble fell the fell. that doesn't sound too terrible until you realize that the currency falling on the stock market for the house knock on effects into the real economy it's causes problems for the price of goods it has effect effects on people and it sounds terrible to say this but actually one of the purposes of sanctions is to impact ordinary people in the hopes that they will there will be some feedback to the government about changing their ways really. do you see any knock on effects in the european union oh yes. germany particularly and

italy and france do have extensive trading the next with russia so diseased to give up. sanctions will affect the ability of countries in companies in the european union to transact with russia there's no doubt about that and therefore we could expect that there would be an impact on the european economy as well. it will affect those countries in particular and here is. as a whole i think now according to central banks the global economy is still fragile and this is why they are keeping rates at record lows right now but given central banks reaction function in past economic cycles do we run the risk of responding too late. we do i wrote about this recently i looked at the minutes going back to nine hundred fifty four and discovered that in every recession they had raised rates too late and then too much after each recession

so we are running the risk of leaving it too late and then panicking the raising them too much and that's because munch policy takes time to feed into really canonic effects but the f o m c and the central banks in other countries are having to make decisions on a month by month basis based upon backward looking indicators so quite often they're making decisions about what's going to happen going forward and what effect them under policy is having based upon what's just happened which may be nothing because they only did it last month it's quite a problem trying to judge when to raise rates and by how much now when central banks begin raising rates they usually continue to do so so is it possible that raising rates to wait means having to be more aggressive since the mere act of starting to do employ this rate hike regime increases credit demand as it's a signal to borrowers to lock in their rates now. there is a risk and in fact again we've tended to see that in the past when they have

started to raise rates they've often raised them quite a lot quite quickly which has quite quite aggressive effects on the economy to be fair the last time we went into a tight tightening cycle which was in two thousand and four they didn't do that they raised them very very gradually over a period of about two years the problem was they raised them a bit too much and then held in too high. but they did actually raise in very very gradually so an effect on the economy was gentler me to go back to ninety four where they raised some very fast there was there was a huge spike in and nobody wants a repeat of that what do you make of wrong. policy like the tell all. this is a live one of the moment isn't it i think rules rules economic rules like that are useful basis upon which. economists can make judgments about whether think the economy is going what they should be doing but i wouldn't like to see

a particular rule rigidly locked in you masturbate this rule at all times i think if we had obeyed what the table said in two thousand and eight. we might be in a much worse shape now than we are so i would like to see a position where. if. members and other central bank policymakers can't make their own judgments based upon their own information versus why should we rely on monetary policy as a way to steer the economy at all since it's only impact on the real economy is through interest credit and financial asset channels. this is interesting as some people think we should only use muncher policy and some people think that you should combine it with fiscal policy my only view my own view is policy has limitations and a lot of people have said that it has difficulty gaining traction. because we

cannot create stone anymore it very easily but i also think it has quite serious distributional problems we've seen that with q.e. where it's really just raised prices for the rich there is a trickle down effects to the real economy but it's perhaps nowhere near as effective as a fiscal stimulus would have been as indeed we had in two thousand and nine so myself i don't think munchie policy should be the only thing we use i think we need a partnership between monetary and fiscal and macro dental these days as well given that we have more banking system given how much as a person as local one property prices have risen in this economic cycle are you at all worried about household debt i'm always worried about household debt. in very some country to country i mean u.k. where i think household debt is a huge problem is something like one hundred forty percent of g.d.p. and that's existing debts and yet our house prices haven't fall in the way that they did in the us and we're trying to encourage people to borrow more to be able

to afford houses i think it's a huge worry i think we have to find some way of enabling people to get their balance sheets under control for me the way to do that actually is perhaps some kind of debt forgiveness and i know that people have talked about this but more important in the u.k. is to get people's incomes up we've had six years of stagnating. wages and falling really incomes that's a real risk with indebted households is that they've just become on an affordable after well. that was francis coppola founding editor of coppola comment dot com. time now for a very quick break but stick around because when we return anthony randolph so is on the program mr endows i sat down with me to discuss what effect popped asset bubbles will have on state and municipal finances then in today's big deal edward harrison is back and he and i are discussing credit risks plus remember you can see all sidelines petered in today show on you tube you tube dot com slash boom bust

our teeth and on a dot com excuse me hulu dot com slash live dots there it is and we're going to break here are a lot of summer closing numbers of the bell stick around. and try to. pull it out of. your life or if you're treating everybody.

oh well. a lot like that i. think. sometimes nothing. is and. it's not just the story you'll be. if you see the stage it will be. featured on the. right. first street. and i think that you're.

on our reporters there in. the in the. economic downturn in the find a long day to do your shanghai and the rest of life joining me taking the lead every week. welcome back now also bubbles and the after about farm simply isolated to wall

street and your t.d. ameritrade account miscible and state governments also depend on the stock market to meet their pension liabilities for their workers so when asked about those pop some local governments can find themselves in some very hot water i asked anthony rand director of economic research at the recent foundation what he thinks the effect of pop asset bubbles will have on state a municipal finances and pension plans here's what he had to say. well that is there's probably like six or so. seven questions actually that are all wrapped up in there because each probably has something that's a little bit different but one of the biggest issues let's just take the last one you mentioned for pensions is that in order to hit their investment targets and hitting their best and targets it is required so that their assets and liabilities stay in line which is not had not been the case for state municipal pensions in order to do that they've had to expand out the risk portfolio. of all their assets

and so you now have instead of the old way that pension public pension systems were they were largely invested in long term bonds that mature it at the same time that people were retiring so that they could actually pay out these promised pension benefits with the assets they had available as they have a much more widely diversified portfolio which again sounds great for the individual investor when you talk about pension funds that means that you're going to have. all these funds that are now scrambling for where about twenty five percent of their investments are is they're going to get no yield from that that means that they're going to have to shuffle what amounts to across the whole country trillions of dollars into other assets simply because of a pop bubble that means that you're going to see price fluctuations in assets all across the country in ways that would otherwise exist except for the bubble so i don't know i don't want to sit here and say that i can tell you exactly what's going to happen other than it's going to be mis allocation it's only it's going to be money flowing into assets only because. as factors instead of what's going on in

those in those particular assets and that's going to create financial instability that's going to be problematic. now can you tell us a little bit about the phoenix pension reform act. so the phoenix pension reform act is one of a few sort of attempts the have been engaged by municipalities this this year to try and deal with unfunded liabilities and the risk that is inherent in any defined benefit pension system another similar type of initiatives in ventura county. are you are watching our international we've got breaking news because some of the bodies recovered from the crash site of flight m.h. seventeen have arrived in the netherlands they were flown on a transport plane from the ukrainian city of harkov you can see the pictures there

let's join our teams paid to all of the dutch military airport and i'm hovan peter good to speak to you what is the scene there where you are. well right now we've just had our first glimpse of the first of two planes that are coming here to the military air base in and eindhoven this is one of two planes are going to bring the first forty bodies of those who were killed on board that malaysian airlines flight seventeen when they see these two flights land they will taxi to the area just over my right shoulder after that there will be a short military ceremony before the last post on the bugle is played and we will hear a minute they will then have a minute's silence closer to the top of the hour which will be four o'clock local time here in the netherlands after that the coffins that are on board will be unloaded they'll be given on the guard by representatives of the. over all of the

the armed forces the military police the army and the navy and the air force and i should tell you the first plane has just touched down i believe that is the australian plane the australian and dutch air force have been collaborating on this forming what they called a an air bridge in order to bring all of those bodies back from ukraine here to the netherlands for identification and to get as much equipment into ukraine as possible so that a full investigation can be carried out as they say the first of those planes has landed actually i believe that is the that's a plane from the netherlands it seems that's come in we were here at the. just last night we saw the australian plane leave or expect that one to come in a little later as they say the first forty bodies are arriving here in i'm tovan. there is believed to be sixteen coffins on board the dutch flight this just landed in another another twenty four on board the australian plane which we should expect

very very shortly now just to explain a little bit about what will happen once the bodies have been unloaded there is a fleet of hirst's of funeral cars that's just on site here they'll be taken from here to. there to a town not too far away from amsterdam that's the the town of hilson actually to be more correct to be taken to a military base near the town of his'n that's a military base that is the center for training for medical training for the dutch military so they have the facilities in which to to house those bodies and in which to start the identification process now this is a this was a major. point it was issued by the dutch prime minister marketer he's expected to speak a little later on he said on monday that there was only one main priority for the people of the netherlands get those bodies here get them out of ukraine and get the the identification process underway to try and give these families that have been really battered from pillar to post emotionally over the last few days to give them

some kind of of rest by to know that their loved ones are. in the netherlands for those dutch citizens that were killed there back home of course there are many other citizens of other countries that were onboard that plane all of the identification will take place here before those bodies are repub treated now. the superstar into your center out to the netherlands forensic institute sorry to interrupt you there peter we're getting the pictures of the second plane coming in as well you've mentioned there were sixteen bodies on board dutch plane and twenty four on board the australian time that's why we're getting pictures of two planes coming in what's the scene greeting these planes as they arrive is a scene of press the families i'm sure the brief families are there waiting what's what's greeting these two planes as they arrive. well there are a large number of families expected to be here at the here in eindhoven as well as

the dutch royal family. we'll see the queen of the netherlands here they'll be giving in the case of expected to address the families also prime minister mark who will also be addressing them as well as he said he had promised this was a big promise from him that he would get these people back here that's what we're expecting to see and to say they will be greeted with with full military honors as they arrive so yes both planes on the ground right now that is the australian plane that i mentioned that is just landed there that has twenty four coffins on board this is really though the first of what will be many routes like this take and they do hope that by friday all of the bodies can be brought here to the netherlands to try and be identified so that they so that their families can can finally say goodbye to their loved ones in a respectful manner i mentioned earlier on just before the second plane landed that one of the organizations that were taking part of the n f i the netherlands forensic institute is one of the top forensic laboratories in the world they are going to be on point with helping to identify any of those bodies they have and we

understand that in malaysia family members have been giving d.n.a. samples in order to to help with that identification process i'm just looking right now we are expecting these two planes to come as i say just over my right shoulder before the. before those bodies are unloaded and the the the commemorative service does begin while if while i'm talking to you they do play the last post on the bugle that it will be that the signal for me to be quiet we will respect a minute's silence here but yes many relatives have come here to the to the air base also many dignitaries from from the netherlands also the ambassador to the netherlands of australia is here as many as well as other dignitaries australia of course did suffer terribly in this disaster as well but it was the netherlands that suffered the most almost two hundred dutch citizens i. been here now for almost a week and be meeting some of the families and some of their friends of those the people who are on board and really communities that have been have been struck dumb

by this tragedy it was something that nobody expected i think one of the most most poignant things i did see was in the town just outside of what if illiteracy outside of amsterdam. that was run by two people who were on board the flight in the window there was a sign for the postman saying we've gone on holiday we'll be back in two weeks deliver the mail next door of course the people who were in that store next door they're absolutely heartbroken they were just people breaking down in tears while we're speaking to them really heart wrenching and emotional scenes here in the netherlands also. it out so really this is a coming home ceremony you've mentioned there the you've been in the netherlands now for the best parts of a way i mean how do you put into words what the atmosphere is like in the country right now. very somber today is a national day of national mourning all around the country flags are at half mast

people really it is a day of it's a day of national mourning a day of national grieving people experts x. there giving their condolences to those who died what is what is really heartbreaking is because of the size of the netherlands it isn't a big country almost everybody knows somebody or at least knows somebody who knows somebody who has been directly affected by this and has lost somebody on board those planes they're just moving into the patton nearby just behind me you may be able to see on some pictures both planes there now once the engines are shut off we are expecting to see this ceremony commence and then the those bodies start to be unloaded and put into those funeral cars to be taken to the military base where the identification process will begin. peter. we've got pictures of the planes coming into land you've mentioned all sorts of dignitaries in the mood as well in the country can you just recap who is there. and

open up that military airport at the moment. yes well with the dutch prime minister mark who. is here he's going to be addressing the. the families of those so if their families so it is a brief families he'll be addressing them also the king and queen of the netherlands that's king will have alexander and queen maxime they're expected to address them as well now there had been some. voices in the country that were wanting to see more from their leaders when it came to this they wanted to see more action now there was a press briefing held on monday in which the prime minister mr due to promise not he spoke to journalists on and m.p.'s from all of the parties in the dutch parliament and said that his number one priority was to get people home and then he wanted to concentrate on an investigation to find out exactly what happened but yes the us the australian plane just behind me that's coming in not says the plane has

twenty four of the those killed on board those planes will pull into a parking just behind be side by side before the the unloading goes on but yes there are representatives of the australian government here i mentioned the ambassador of australia to the netherlands is here he may address the the the families as well but yet a very somber mood here in eindhoven but certainly across the whole of the netherlands right now as the whole country stands in well dumbstruck grief at the moment it is tragedy in a lot of people very pleased that finally these bodies are coming home. where you are watching our team international we bring the live pictures of the moment from eindhoven in the netherlands where a military plane to bring the first forty bodies back from the mh seventeen plane crash or the crash in the east of ukraine our reporter peter all of our as you can see is on the scene there the two planes pulled in one dutch plane with sixteen

bodies on board and an australian playing with the twenty four of the victims or the first forty victims who are returning home to the netherlands that we can see right now. dignitaries and lead. is from the dutch government that to greet them is going to be a military ceremony as well we believe plays a key role can you tell us about what can we expect when the the unloading of the bodies begins. will represent i'm sorry the little bit loud the judge is coming in just right behind me like holy see you have. representatives of all of the all the forces of the netherlands the military police the army the air force the navy will all carry each of the companies from the everglades to the few people that take it away to the military base is expected to be a very soft but seventy days old we are going to be observing it in silence that may come close to the top of the aisle way which will be will be am local time.

there was a huge problem for this to be done and a very respectful audience make sure that the correct amount of respect was paid to those who died there as the real shock and disbelief amongst the people of the netherlands following the news that almost two hundred of those in this one of three in this instance almost more playing in the has really affected everybody in the country the whole the whole mood of the nation has as being very very soft but . they have there hasn't been any real good towards any policy we have heard a few people complaining that the obviously that's military sent to the border to secure the crash site but we had the prime minister on monday he said that wasn't an option that wasn't something that they would do that he was willing to work with all its national mall to bring these bodies pocket as we are seeing just behind me the list of those bodies all doubt all soiled this will hopefully bring some kind of rest like those families that it be told the faults and crippled by this not of

the downing of elation airlines flight seventy eight i'm not sure if you are if you can still hear me particularly well but i'm going to ask you a couple of quick. nonetheless hopefully the engines of those planes will be turned off soon but you mentioned there are almost two hundred dutch citizens were killed in this in this tragedy you've been there for as i say for the best part of wait now what can you tell us about about some of the victims and some of the communities that have been affected. i was in the just the other day a day after yesterday and there was a restaurant that was a particular. main particular spot in the city of rotterdam now the the owners of. the only one of the owners of the on his mother were all on board the plane they left behind a son in his early twenty's he's now the only surviving member of that family now

to commemorate that what we did see was a march to the center of the city of rotterdam with everybody dressed in white. marching in silence and laying flowers there the floral tributes that we've seen have been been immense from. all all parts of the country and schiphol airport where the flight of course originated from and everywhere around we've seen just real outpourings of grief horrific scenes of family members breaking down in tears but the planes have now come to a halt and i can tell you that some of the taking trees are gathering there and we are getting ready for a minute's silence the last post in the bugle will play and then there will be a minute's minutes of silence to remember the remembrance of those who died on board that tragic flight ok well we're keeping an eye on the pictures we are expecting that military ceremony and of course the the moment silence as well so we're going to keep an eye on those pictures and bring them to you.