regime against the white house. actually it was slow and steady and look at the will continue to do that this president will continue to do that and i think it's working we've seen the russian economy pretty much collapse but it cannot be u.s. sanctions alone that what's propping up the russian economy and aiming as well as i do is the europeans and so what we need to do is work with our european allies to say let's put more sanctions on let the e.u. put more sanctions on the russians and right now is the time to do it when it's not in the summertime so heating prices that he it's not cold so you have to worry about heating oil is that the third but we've that requires us to get to the come to the table and talk to our allies and try to get something done on that so i agree there but i think the world view overall that amy is suggesting as well who are more engaging across the world in the more engaged become is code word for us for us for us to sending more troops a crabby montreal probably no no that is you know i mean that i'm not he said that that is not my world view i have said it over and over and you put it one of the ways and keep mis characterizing me if you want to have this argument with john

mccain have it with john mccain but you're having this argument with me. i would rather have time thank you both very much as always sprightly and in liking. thanks larry larry thank you the beautiful amy holmes the dashing richard fowler. and i don't want to hear from you join the conversation on my facebook page and share your thoughts with. a. very. clear. let's play.

the. lead lead. lead. a.

hello there i am marinated and this is boom bust and these are some of the stories that we're tracking for you today. is my favorite day of the week here on boom bust it's tech thursday and a word talking facebook today now the social networking site is having a tremendous day and better yet a tremendous year we'll look into why and how coming right then steve hanke is on the show now hank you sat down with me to talk about arjen time debt and there's a bit of it and in today's big deal edward harris and i are covering the latest tech stories from this past week and we're looking into everything from microsoft to amazon from wrist myers latest acquisition you won't want to miss a moment and it all starts right now.

our lead story today. now why have consistently and loudly voiced my opinion about facebook i'm not a fan today i'm giving them nothing but congratulatory praise thursday facebook stock skyrocketed as much as seven point six percent to an intraday high of almost seventy seven dollars giving the company a total market cap of one hundred ninety seven billion dollars that's equivalent to the combined values of both u.b.s. and american express so yeah it's not small now when measured by marketing. facebook is now the fourteenth most valuable company on the s. and p. five hundred and in order to surpass a market capitalization of two hundred billion dollars the stock would need to be at seventy seven dollars and ninety four cents trading at that number which you could very well do now facebook stock is up more than one hundred eighty percent

over the past year and the social network has been lifted to new heights thanks to better than expected quarterly results improved user growth and mobile advertising about sixty two percent of facebook's ad revenue now comes from advertising on mobile devices which according to the market are is expected to eclipse newspapers magazines and radio in the u.s. for the very first time this year so bottom line facebook naysayers can now eat their words myself included because it's pretty clear that facebook has successfully transformed itself into a advertising juggernaut and in reality facebook is probably even bigger than we think the company actually has more than two point two billion active monthly users across its flagship properties including whatsapp instagram and messenger now the total facebook incorporated user base has roughly doubled in only one year's time so basically one in every three humans on the planet are on facebook but hold the

door my dear friend and colleague edward harrison things facebook isn't all that in fact he believes it's bubble licious my word not his so why does ed think it's bubble licious because it's a large market cap stock in fact it's the fourteenth most valuable stock in the s. and p. five hundred doesn't mention before and its value exceeds about two thirds of the top stocks on the dow jones industrial get at the same time it has a price earnings multiple of nearly one hundred times which would mean it would have to have tremendous and i mean tremendous growth in order to justify that multiple and provide a decent i mean even kind of decent return to invest to investors so to. ed basically facebook is like cisco circa one thousand nine hundred eighty nine.

argentina facing some serious debt problems and they have until the end of the month to figure it all out now this isn't the first time that this is happening argentina and fact argentina defaulted on the debt as recently as twelve years ago so why do people even keep buying argentine debt anyway to get a better handle on what's going on in argentina i sat down with dr steve hanke he's a professor of applied economics at the john hopkins university in baltimore and a senior fellow with the cato institute i first asked him if argentina even actually has the money to pay back its bondholders here's what he had to say. well it has the money to pay back the so called hold its never greed to be swapped into. and which will all bonds were swapped for new ones and there was a haircut of about sixty three percent on those and about ninety three percent of the people holding the old bonds greed to the swap so there were roughly seven

percent who did not. and there are. roughly shall we say fifteen billion dollars argentina could pay the. so argentina could pay if they wanted to essentially yes it's a it's a matter of ability to pay is their willingness is not. and this is this is more or less always been the game in argentina. you know if you shake the flower bed there's usually a little flower left in the but again they have got some money and they're not willing to give it up so that's that's been pretty much the history of argentina for a couple hundred years they've been in default on bonds and their creditors about thirty five percent of the time so that's that's an incredible number actually. it certainly is it's a record for not a very good thing to hold the record for now when i ask you where is the argentine

economy headed down the economic policies there have been a. complete disaster really since they gave up and started breaking the rules of convert ability so this would go back before the actual default on the bonds this would go back and in one thousand nine hundred nine they started breaking most of their own rules around the convert ability system that linked the peso to the dollar and then. eventually we've had many years now with kirshner's and power and it's been one. irrational economic policy after the other so the economy's quiet vulnerable and i think if they don't default on the bonds economy of probably shrink by maybe a percent and a half or something this year if they default who knows it could go down by

two and a half percent three percent and terms of a contraction which is a very severe. depression actually. no the default here is the result of a u.s. supreme court ruling on debt held by restructuring holdouts as equal to that held by people who participated in a restructuring years ago now you mention this briefly before but can you explain the reasoning here of the chords on the you know perry past sue debt clause that focusing on the parapets you part well that simply means that in short all of bondholders have to be treated equally so. the judge ruled and was upheld on appeal the u.s. judge that is a u.s. court. if any payments were made to those ninety three percent of the bond holders who in two thousand and five swapped their old for nude with

a haircut so for is involved that payments would have to be made to the seven percent they would have to be made whole. in order for the suit provision to hold. insured let me let me summarize here getting in the illegal we we don't want to do that if we can help but. treating all the bondholders equal with the interpretation of the u.s. courts is the payments made to the. ninety three percent who agreed to the swap would trigger the requirement that the hold would have to be paid no and made and made whole no. so do you think the us supreme court decision sets a precedent that will make restructuring like argentina's more difficult teacher. well no i don't i think it what'll what will happen is you had

a chaotic default in two thousand and one in argentina and that default led eventually to this agreement in two thousand and five for the debt swap and it's the chaotic part of the thing the origin times were were ill advised and. in in the policy sphere they were quite irrational too so if they had bad legal advice. they were getting way out ahead of their skis too clever by half kind of a latino thing and they they didn't structure these bonds right in the provisions or were poorly written and as a result of that that's why you have this potential for this huge trigger to go off if they hold her paid their fifteen billion dollars then if that occurs

on a voluntary basis before the end of two thousand and fourteen that means that that all of people who agreed to the swap they're made whole too and then the bill runs a like one hundred twenty billion or something like that a very large number which which argentina. they don't have the liquidity is to pay it of course they have the assets if you look at the balance sheet of argentina they could liquidate and privatized a lot of assets and they probably could end up paying one hundred twenty billion over some. it of time but but that's again getting out in the weeds and complicating things i mean they're really in a pickle now because of poor and nissho legal advice and a series of very imprudent political judgments on the part of argentina i mean that's the problem i see it i want to move on to ukraine now the u.s.

is rocketed up sanctions on russia because of the ukraine crisis and many expect more to come so do you expect more and if so what impact will they have. well. i do anticipate that there will be more sanctions i mean there's just a drumbeat. on capitol hill and a lesser degree in brussels but in general there is pressure to ramp up sanctions and the just how hard does by depend on the nature of the sanctions i mean one thing the warmongers in the in the united states would like to close down the ability of the russian banks and financial system to to use u.s. dollar clearing facilities well that would be a crusher but for russia but it also i think would be extremely

stupid and irrational for the united states to engage in that kind of thing because basically they're contaminating their own payment system by by saying oh this isn't an open system where will decide the politicians that are so popular on capitol hill will decide who's going to be able to enter the club and on what terms they will be allowed to enter the club. that was dr steve hanke a professor of applied economics at john hopkins university. time now for a very quick break but stick around because when return of coral done a girl is on the program now carl sat down with me to talk about tech where were balls and security concerns and not space and then in today's big deal edward harrison and i are talking all things technology and remember you can see all segments featured in today's show on you tube at youtube dot com plus boom bust our t.v.

and on hulu and who dot com slash boom dash but now before we go to break here are a look at some your closing numbers the bell on that. big bucks but. we're going to do that you know the price is the only industry specifically mentioned in the constitution and. that's because a free and open press is critical to our democracy shrek albers. role. in fact the single biggest threat facing our nation today is the corporate takeover of our government and our cynical we've been hijacked by handful of transnational corporations that will profit by destroying what our polity harbors once built my

job market it on this show we reveal the big picture of what's actually going on in the world we go beyond identifying the problem try rational debate and a real discussion critical issues facing america but are you ready to join the movement and welcome the. world. science technology innovation all the rest of the limits around russia we've got the future are covered. something back to the shows out in the next wave of technology seems to be wearables with the mobile phone market reaching saturation companies like google with its recent announcement of the android where are hoping that this new frontier

will be the next area of growth however with various privacy and data concerns wearables might just be another way for consumers to expose themselves i spoke with blogger and author karl denninger about what worries him in this new sector and i asked him about privacy issues in wearable technology and light of apple's i.o.'s security concerns here's what he had to say. maybe huge problem with wearables in the whole internet of things concept in general and that is do we don't have some kind of reasonable assurance on security i don't want these things anywhere near me . and i'm one of the early adopters if you will when it comes to things like going home automation and building my own systems to control my house and your lighting heating your conditioning the pool's things like this but the idea that you can have built in by manufacturers these sorts of back doors. is really a problem you don't think about the person that's walking around with some kind of

fitness tracking device on the wrist all day long that's monitoring your blood pressure in there or you know their heart rate things like this that data is incredibly valuable to people who want to use it and you know you say well you know who would really care about that well your health insurance company might care. they also like be very interested in the g.p.s. track from your phone did good that shows you going past and into liquor stores for example there's a thousand uses for this kind of data and it's one thing to grant access to involuntarily it's quite another to have it taken from you without your knowledge or consent. now karl the u.s. economy shrank at a pace of two point nine percent in q one and i've asked a lot of our guest about this because it's a shot in the large number for an expansion what do you think is going on in the u.s. in the u.s. economy. well i don't believe a lot of the numbers that i see so there is this seasonal adjustment factors

that get put into some of the government reports are utterly comical so i tend to work off the unadjusted numbers because a lot harder edged them although even there you have to wonder whether the data collection is any good. i frankly was not terribly surprised to see that kind of a contraction but it does mean that the money printing games that have gone on and the credit pumping that has happened within both the u.s. congress and the federal reserve and let's not get this backwards either the fed is the puppet of the government not the other way around. what this is shown is that these policies have an end point where they stop working and we've reached that so now you know people say well the fed is is reducing their or their bond buying their tapering it's going to go away in october and they're doing this because the economy's doing better the truth is they're doing this because the bond laddering systems that are in place and all of the various pension and other funds are

reaching a point where the pain exceeds their ability to tolerate it and so it has to stop but at the same time without credit expansion as we've had over the last thirty years you're going to see the truth of what our economic activity has really been over that period of time is not positive at all so what are you seeing in retail sales given your view on the economy. well he tail sales again are driven to a large degree by credit expansion so what you're seeing now is that as that terminates that cycle terminates the ability to drive retail sales expansion also terminates and so we are seeing a slowdown in area in and i think that's going to continue i don't believe any once you know anyone credible thinks that we can really gets reports percent g.d.p. growth rates on a five year rolling basis over the next five years and you know most of the economic projections are being made in the forward views within the stock market in

other marketplaces are being based upon disk promise i think this is just absolute nonsense so the fed seems to be more worried about the economy than it bennett lets on but after all it's still in plain quantities and that's important to remember and the fed funds rate is effectively zero right now so do you think it makes sense for the fed to ease given the state of the economy. no the fed needs to pull the quiddity out of the system it needs to cut this game out stop the bond buying in essentially allow the rates to go where they do the problem you have is that the fed isn't really the driver of this you have to remember that the federal reserve white shirt can only buy and sell things that are government guaranteed that's the charter and that's the law so if the federal government was to run no deficit there would be no bonds for the for the federal reserve to buy when you look at it from the perspective of the top down the problem with monetary policy is coming from the federal government's not coming from the federal reserve we need to stop spending

money we don't have and that's the root cause of those sort of credit expansion cycle that we've seen over the last thirty years we're now to the point where it's not working anymore to goose apparent economic output and so you're going to get want two things either the government's going to stop this in which case we're going to have to pay for all of this expansion that wasn't real or they're going to keep trying to do it it which point somewhere will go from zero contribution to output to negative contributions and then you end up in a death spiral where it's forced to end and the results are a tad catastrophic on the economy now risen guest on our show francis coppola made an interesting observation on twitter recently and she wrote quote regarding the income inequality debate it's very simple inequality between countries is falling inequality within countries is rising so do you think q.e. has enhanced inequality here in the us. yes but again we're looking at the wrong thing you have to remember that when when you run a deficit at it as

a government what you're doing is to krishi eating the purchasing power of every unit of currency that you have in circulation that's factually what's going on it's an arithmetic thing has nothing to do with what you want to call it so who does that hit first and the answer is that it's the poor in the middle class because they cannot lever up and use the game playing that you've been able in order to try to stay ahead of it the very wealthy on the other hand can do those things now of course with this comes risk for everybody that manages to beat this game and become wealthier on paper at least there are several who attempt it and find themselves with nothing when the crash comes we saw that during the housing boom and bust we saw it during the nasdaq boom and bust and we'll see it again this time there are an awful lot of people who are multi-millionaires written billionaires on paper that in fact have nothing because all of it is manufactured by leverage and when

the margin calls com they're going to end up bankrupt it happen the last time it will happen again. that was author and blogger coral karl denninger time now for today's big deal. time with and we're here when you know me on my favorite day of the week tech there is to ensure we're discussing a bunch of the latest tech stories the starboard end first a lot of news coming out of microsoft on wednesday their fiscal fourth quarter performance was released barely meeting the projections of analysts and that doesn't sound too bad but they also just announced massive layoffs so what's happening over microsoft give you the lowdown so basically microsoft. platform shift here will go into the mobile space and computers are decades technology and microsoft is trying to fight another uphill battle to move into that space which is

now increasingly dominated by. which right now to early today and by android google system so they're firing a massive number of people even though they just took over nokia nokia employees going to take the brunt of this and they're going to try to turn around the ship i don't think they can do it i think that basically microsoft is going to live off their past laurels going to try to do more acquisitions but it's going to be a tough road they're going to like the idea of of this particular period speaking of which thank you for bringing that up i.b.m. and apple big deal coming out there now can we talk about that you know what will this deal really change anything for either company in your opinion i think it's you know it's not really that big a deal from my perspective i think you know this was about the bring your own device type of thing that people bring their own devices to companies and that's really a big problem but once you get ahead of that problem by saying look we have a solution to deal with the corporate environment but you know people are going to

consumers who are actually working call prison. i phones anyway it's not really going to add up much juice to phones and i think that the market saturated any was so i don't think it's that big a do ok now amazon officially launched its first mobile wallet application and over the course of this year we've seen major new products from amazon like fire phone and fire t.v. so edward tell me about this what's going on what does this mobile wallet what will do why is it great to me the mobile wallet as they introduce it is pretty much nothing. i think it's the first pass for the. good in terms of iterations but i was completely underwhelmed of what they're able to do and it's not big on it's not like a paper whatever but everyone knows that amazon is getting into the payment space they're good they're putting the marker down for that and i think that they will ramp aggressively into making this a soup to nuts type of

a platform not just for users or but also for companies as well now i want to run to yahoo now earlier this week yahoo announced its plans to buy florrie and app analytics service and it underscores president could possibly be the company's largest acquisition and. myer so big question what is an app analytics service and why would yahoo basically it's a targeting advertising targeting service so yahoo has really fallen off the wagon here in terms of advertising they've sold out most of the advertising to you to microsoft where they're trying to do is make it so that they can target ads better have a say to advertisers look stay with us or come to us because we have these analytics and we can definitely target your advertising better and therefore you should use us over other companies i think it's a very good acquisition for them so it's a positive even though she might break the bank to. make percent on record first off now on to bear what is that hoover i love of her by the way that there are.

moves in to asia they're facing different bad. including a possible ban in seoul and getting a handle on beijing's that vaccine traffic problems i mean if they can get a handle on that the. sky's the limit so how does a launch overseas compares to its service here in the u.s. what do you think i think you know it's this when you're an eighteen billion dollars company basically you go to launch everywhere and ultimately what we're going to see is that they're not to be the dominate markets as much as they want in other places to get the band that you're talking about traffic problems in beijing we have all sorts of problems in europe i think what we're going to see is that they're not to be able to read as aggressively as they want and as a result of the growth is going to slow and people will be disappointed we'll see whether the vcs get out before that i say this breaks my heart because i love it over and i know i'm rooting for them to succeed but you said that lift and hello can service all my needs as well have you heard yeah my son had just like the album

written for the river on the high although that's all the time we have for now thank you had as always but please check out our facebook page facebook dot com slash boom bust our t. and please tweet out us at aaron aid at edward and h. problems here bimbo thank you for watching and we'll see you next time.

thousands of palestinians in the west bank vent their anger at israel in the largest protest against the ongoing gaza offensive which killed more than eight hundred people. and eye witness says a british journalist working for he was beaten and tortured by ukrainian soldiers amid growing calls for his release. and ukraine's prime minister resigns and the really ruling coalition collapses running the country into a political deadlock.