or of the global financial system and trade system which we've been talking about on two sides of it are the u.s. and china and those two as the i.m.f. pointed out are the biggest debt monger in the world and escalating rapidly and you have these two sides of a perhaps precarious ends but that's why you want in order for a more anti-fragile system maybe not to have so many barriers and sanctions and and restrictions and censorship in the way of that so that the global financial system oh well i mean to your point about interest rates if in fact interest rates are on the way up and the ten year treasury bond is over three percent and heading to a more normalized five or six percent then junk bond market would head to a more normalized thirteen to fourteen percent yes from the current five percent so these companies like we work or netflix are trying to lock in cheap money now before it becomes a lot more expensive but as you point out in the case of we work they have a long term lease obligations so if in fact rates spike and the economy slows they're not going to be able to fill those properties up with tenants so it doesn't

matter what the price of junk is because they will be driving no revenues and they want them to service the debt at any interest rate we saw that in the two thousand and seven two thousand and eight crisis as a lot of these banks like goldman sachs were borrowing long and lending short overnight all these like junk bond basically entities and they ran into a time when there's a mistake that banks make is that this is the bane of banking is that you don't know how to handle your maturity. book written risk the risk associated by being exposed to different points in in the curve along the from you know overnight money out to thirty year money so if they're just applying that to we work it's a high risk real estate play disguised as a start up rate but once they reality hits the fan it could implode and that flicks a spending billions on content assuming that. you know that they will be able to

increase prices to account for that increase in debt service which so far at this moment it's not able to come close yet that able to however the stock is trading at one hundred and hundreds of times earnings which is typically not a great thing going back to this we work really stay is very illiquid it's an illiquid market and that's part of why we saw all the hyper financialization that happened in two thousand and seven to two thousand and eight based on the sub prime market is you solve that problem of the maturity thing is like these thirty year mortgages were packaged into c.d.o. is that were swapping in a changing hand overnight like several times here we have the same thing they're trading like dot com companies though in this paragraph here will remind you of your dot com days the prospectus for the bond offering from we work obtained by alphaville on the f.t. points out that revenues jumped by one hundred three percent twenty seven thousand from a year earlier to eight hundred eighty six million and that the total expenses jumped

one hundred eighteen percent to one point eight two billion based on this well established unicorn strategy the net loss in twenty seventeen jumped by one hundred seventeen percent year over year to nine hundred thirty three you know they have to spend two dollars to gain a dollar sensually and revenues the amazon you know they have lost money for years and years and they now own the market and that's the strategy so we work our netflix our apple or these other companies they are willing to take this enormous risk that they are going to burn through more money than they have could ever raise to gain market share it works until it doesn't work you have amazon netflix are genuine dot com companies this is the real estate company which has huge elisa's long term leases whether or not that's going to write it's like any lampard over at sears yet thinking is going to be the next warren buffett because of a retail foundation not understanding that warren buffett is an insurance based foundation in any lampert is no. their insolvency and sears stock has lost ninety

five percent of us about it and we got to get out of the stock and don't go away and much more beauty coming your way.

so what we've got to do is identify the threats that we have it's crazy confrontation let it be an arms race based on off and spearing dramatic development only loosely i'm going to resist i don't see how that strategy will be successful very critical time time to sit down and talk. welcome back to the kaiser report imax their time now to go to dan collins in shanghai and the author of a china money report that collins welcome back to mexico to go on air again now then the two koreas are signing

a peace treaty who will get the nobel prize for this and how is the bank present and china well my personal feeling at the a.b.c. jinping i don't know maybe donald trump maybe the you know the president so korea it's hard series now the news over here is trying to you know very great news the end of the creek and war after in more than fifty years. kim jong un says he's going to completely denuclearize the north korean peninsula fantastic news on the skeptic side they said we've seen this before two thousand year two thousand and seven several to some and nothing came out of that but i think we're out of at a crossroads we have got a crossroads here because of the donald trump factor i think because of the aggressiveness that nor that the united states has shown over the issue i believe china has finally taken the lead here and there that the puppet masters behind this piece that we see break you know in north korea well you can't discount the role of

dennis rodman in all this i know it sounds a bit crazy but he did he was kim jong un in a way that no one had done before and up on the way really to a dialogue. how will this play out economically are there any sectors that wall the boom as a result of this interview than early to say but keep in mind china is the linchpin for the north korean economy ninety percent of their trade is with china and that trade this year is down some sixty seventy percent because of sanctions because china has actually put on the sanctions the north korean economy if they let loose could boom because. they're so far behind the modern economy and the hard to say what sectors will will will open up the will we see you know how that was the real question are max and how do dictatorships die how does kim jong loon well the kurds are over you know i open the curtains on the world to the north

koreans this is and still remain in power that that remains to be that's going to be a tricky move for him that's interesting what you're saying that some of the wars of sanctions that china imposed on north korea sams to have brought them to a negotiating table and of course the sack shows i guess you could say orchestrated by donald trump and donald trump is proving his farai that geopolitics can be saying through the view there's a lens of deal making and and in china of course where they are dyed in the wool dale makers that approach seems to be a working how does it have fact on a broader sense in china in other words the trade war that saddam going the currency war that's ongoing that crop or lesser share but china where a way out and that their relationship them yeah well i believe the china is actually on the losing side of the trade war here you've seen a lot of chinese companies including the buy deal makers the trade alcohol they

heavily reliant on imports. from the united states so. there's a lot of companies that have gone with the chinese government are asking for relief with these new duties the chinese put on american products what i found most interesting is what china has done is e.t.e. the tillicum or what united states did is easy the telecom maker with limited chip exports the chinese companies this is a new phase of the trade war the trade we're getting a lot of press here everybody's talking about it i think china has pulled back they've already announced huge opening up in many sector. the car automotive sector is not going to open up electric vehicles there's a lot of areas now that the train is going to open up their economy and allow more imports in well the same time you mentioned that you know you political you know they're playing a game of google which is you know the chinese game later still means you have your

tears were now one bill one route is that's what this so trying to see you saw us andrew this week max mentioned china now controls it so chemo leader reid said that right well you mentioned the game of go. this is another game to throw into the mix along with chess for d.h. ass forty d.h. ass checkers and now go now when you describe go there to sounds like you're describing mercantile ism which of course has been the chinese room and go to global economic policy that is just grab as much global trade as possible from the other guys in other words they don't have the idea that all can grow simultaneously it's about growing at the expense of your trading partners and of course some of the gold standard that worked out pretty well because as the accounts were settled

in gold and you had some consistency in the current say and the currency was gold but we live in an age of fear and currency and so is a mark until this policy or a game of go as you describe it does that work in a free ad currency where people can just print money all day long in other words. china's weapons here they're buying gold they are buying gold and they are expanding through american tallest approach but america's got the federal reserve they can print money all day long and they control the dollar which is the world reserve currency. so is this match up who wins in this match up down well absolutely i think the last hand the united states had to play is the. federal reserve the u.s. dollar with the china though taking that apart the swiss system built off the from the united states now the united states is even weaponized the swiss system against

russia and the other country that's going away russia china are building their own swiss system the you know we talked about five years ago max are way ahead of the curve of the petro un i mean i've said years ago we're talking about the china movie no oil in to remain be the next phases the remain b. to become a global currency that's what they're they're moving fast on that trying to move all the oil the shanghai futures oil futures exchange opened you know late last year so as we see more oil contracts go into renminbi remain be international trade get settled more and more in order to be really be will eventually challenge the dollar go to toe and then all of a sudden it won't be such a printing game people are going to have to are going to demand real assets for their money right now that would imply a rail ask us for their fat money watch what employ higher prices for real assess and i would suggest that commodities in the u.s. like oil start to trend higher we are already starting to see the oil prices creep

up that might be a result of what we're talking about here you mentioned russia their course russia china are establishing a one bell want to run out going all across asia you're asia and to russia they're creating this huge economic zone which well rival the dollar and interestingly enough there's a rumor is that they summit between donald trump and north korea's kim jong what happened in a city just north of japan what happened to be in russia so how would that play bad as seems remarkable yeah. keep in mind cheney the cheney's former minister won he is now. going to north korea this week and i think they're laying all the groundwork for the trump kim summit to come and i think they're laying the groundwork now to mention i think china's a puppet master behind this piece but they're going to give the credit to donald trump and i think you know the big hand at play in this of course but yeah i mean the summit we will see i think china is already working behind the scenes they're

going to want to demand that the see the nucular inspection sites. has him take those off line what comes out of the summit are they going to ask for american troops to be withdrawn from south korea you know we still have thirty thousand troops sitting in seoul as pawns in this game to where north korea ever attacked the united states would lose thousands of soldiers and then it's instant game on you know what the united states so are they going to mean withdraw those troops so far they haven't asked but it's going to be issue what comes out of the summit but i think the tone coming out of him and what we saw this last week with the engagement from south korea i think we're at a total new turning point and i think china is going to put north korea under its wing and the question why is why is north korea feel so safe not only they want to vala from the united states that they will not be attacked and then they would be nucular as china given north korea nuclear shield have the have they promised north korea military support not forgetting the korean war they lost over

a million people million soldiers so they are you know they're in the game and they're going to support north korea right well yes imagine the sanctions have really put a lot of pressure on north korea and it seems that donald trump maybe locked up the geopolitical chess board argo gorup board and looked at where the u.s. was wasting the last monday and the military budget and said hey now those troops in south korea could probably the ball and we can save a lot of money right there let's get that in laotian and that. the result that brings anthem play china south korea and russia and as a way to unravel this enormous military apparatus that the u.s. as much as half of tax dollars approximately one point five trillion annually goes into the pentagon's budget and you know i think the pentagon burns to one hundred

fifty thousand gallons of oil a day or something extraordinary at say their thousands or millions or something unbelievable so it's an unbelievable drain on our energy resources so just as a single point of failure or a single point of leverage and same like trump is maybe playing a very interesting game here now let's move on to the block chain a bit going to china is relaxing of heavy handed response to bitcoin is that true what are your thoughts i think china china has to users there's been going in there is blocking the block she was actually incorporated in the last five strategic five year plan from the chinese government angulo of april twenty eighth announced a one point six billion dollar investment on blocking startups three offices free human resources or handled the bank of hong jules getting involved in moving loaning money to blocking startups onto of course the home of ali baba its

financial a financial book two hundred fifty billion dollar i.p.o. we talked about it before max trained so far ahead and spends fifty times the rate u.s. has in mobile payments shenzhen is also known as something similar to compete with one job changes the whole of tents and in many high tech companies so china is big on the blocking the p.t.o. see people's bank of china has already done trial runs with their own crypto currency that leads into crypto they're not such a big banner because they want to like every other government they try to control your money control your life with your lease which is which is the paper money. so you know i mean me may have known it there was a latina given to a conference here a few weeks ago would rightly attended and we were thrown out and right before lunch the government came in and literally yelled everyone's got to go and over a thousand people we had exit conference the more he was most in fact but then when

he started talking about crypto wallets and how you can get your money out of the country then it got shut down so yeah well that no kidding me well i got a twenty second is going to make a comment on saying ok. so you know kim is the chinese oil company the first trial runs with blocking with gas imports in exports where it's completely the centralized entry and spirit in all parties and both have a record of it so chinese companies are moving back on blocking and i expect them to be the world's leader just like they are with mobile payments all right dan rather thanks ray on the kaiser report. that's going to do it for this edition of the kaiser report with me max kaiser as they say it will one write us on twitter it's kaiser report time by a.o.l. .

it was one of the most controversial products of our time to solve a vegetable fat. twenty seven production grew to sixty three. rapid growth an international demand for cheap oil has led to the massive expansion of the plantations which in the destruction of the rain forest. came to the zero a lot more than ten million pounds of unique rain forest has been destroyed it's a process that just keeps going. lemme warhawks selling you on the idea that dropping bombs brings peace to the chicken hawks forcing you to fight the battles they don't believe you stop spreading tell you that they'll be gossiping probably less files a little one day. off advertising telling me you are not cool enough to buy

their products. these are the hawks that we along with our lives. russia says it is still waiting for other nations to admit they manufactured after the president says his country produced and stored a nerve agent similar to that used in the poisoning. one chemical weapons watchdog contradicts its own chief who earlier said up to one hundred grams of knowledge was used to poison a former russian spy. i don't want to hear about it. on the. albums of palestinians demonstrated on the israel gaza border for a sixth consecutive friday and are met with live fire and tear gas from i.d.f. soldiers. to journalists mount a legal battle in the u.s.

against alleged inclusion on a government kill list they say they are wrongly suspected of having links to terror groups. the latest on those stories you can head to our t.v. dot com that does it for me but the talented and always accurate mickey aaron will be here about an hour's time coming up next though cross talk looks ahead to a meeting between the leaders of the u.s. and. hello and welcome to crossfire considered. after sixty eight years the two koreas are on the verge of signing a peace treaty a donald trump. in the works is peace coming to the korean peninsula well it's

possible the foreign policy blog in the corporate media are less enthusiastic after all conflict is their business model. crosstalk in the korean peninsula i'm joined by my guest. watching he's a senior fellow at the institute for china america studies also in washington we have john merrow he is former chief of the north east asia division of the bureau of intelligence and research at the u.s. state department as well as author of korea the peninsular origins of the war and in new york we cross to daniel lazhar he is an author and freelance journalist who writes frequently about the middle east eastern europe and the us constitution right gentlemen cross-like rules in effect that means you can jump in anytime you want i always appreciate so let me go to you first in washington if you look at the mainstream media and particularly the cable stations all the focus on the korean

peninsula is directed towards this summit trying to me how with the north korean leader but really i think it's much more important happening this week and if the two koreas coming together how does this change the situation on the peninsula if north korea and south korea can find some kind of meaningful and let me stress meaningful reproach moment go ahead in washington. let me in response to your question laid out right over here that the real credit for the what the situation the opportunity that we have today is because of president mungy in south korea you know if we had a the same or a conservative south korean government in place today what would have happened is kim jong un would have gone through with his condense testing schedule and then after that he would have gone straight into his bunker emerging from time to time with grave threats and snarly garley threats to blow everything up the fact of the

matter is that moon is the person who has been able to tease kim jong il kim jong il on out it. into the sunshine and has an open and shone in the pot through it to global integration and as well as not science reconciliation. in the south korean progressive government has the lead this process for reconsideration which has dramatically altered the dynamics on the on the korean peninsula of course the olympics also have helped and therefore it is north and south they extend that they leave the process that they would have dragged the other parties along including the united states and credit allies with the peninsula parties ok john let me go to you more or less the same question here because the dynamic changes considerably if there is a peace between the two koreas after sixty eight years they start coming to some

kind of defense and security measures that both can accept then regime change as it were that we hear so many people talking about in in the washington foreign policy blob that kind of is taken off the table because that would not be in south korea's interests go ahead john in washington. right peter well i think i think you overstated it a little bit i do give president moon a lot of credit but i think the main credit i never thought i would say that i know obviously belongs to donald trump i know you're going to say that. this this this this is this is the man who said he he wanted nothing more than to sit down and have a hamburger with kim jong un and looks like he's going to get his chance right now there are apparently still cia people liaison people behind in pyongyang at least according to the south korean media and people are hard at work and mr pump aoe is the guy that's been running this. formerly from his post

as cia director but hopefully in a few days as secretary of state so i think i would agree the president deserves a lot of credit and certainly with a progressive government a lot of things are possible that weren't underpass can conservative regimes but i think we have to give president trump his do as well and i just i just hope things go ok it's a topsy topsy turvy world exactly and you know and i'm very happy that this process is going on let me go to daniel i don't care who gets the credit i think that is really low on the hierarchy a bit of an important see are getting peace on that peninsula where you have the most heavily armed border in the world after sixty eight years of considerable american military presence is there and the chinese have come in and in ways that i think we'll find out in the future they were very constructive here it's the result that counts most importantly go ahead daniel well. let me speak up for ken jiang on

ok i think it's played his cards extremely well. this is not in the door a political endorsement of him by any means but he is the very smart yeah player yeah and he has done. very good job. he's. kind of you know seize control of the opening seize the opening that that trump accorded him and has really run of the i think it's a it's a pretty impressive performance ok let's go back to washington. and i think what's really important here i mean it's good to get down to really the details here because we have a do you need arise south korea i'm sorry korean peninsula means north and south so that means that american nukes would not be allowed there i mean this is the kind of opening that i think the north korean leader was looking for he's looking for a grand bargain and you know what folks he's been asking for a grand bargain for

a while and i think he had to go through all of the theatrical of the missiles and the launches and you know all of the heated rhetoric back and forth this was the opening that he was looking for and it was a south korean leader that opened the door and we got a nod from donald trump i mean we'll find out where it goes so you know it really gets down to the details of what that means because we know all along north korea wants security guarantees maybe russia in china can be guarin tours of that go ahead so open in washington you're absolutely correct on that i mean the devil is in the details in terms of how do you go about staging a clearer solution in terms of how that process works out the mechanics of that process but you're absolutely correct on that point with regard to denuclearize the nuclearization that it is not just a north korean affair it needs to be a peninsular affair let me throw out a useful principle which might be useful. both in terms of denuclearization as well

as in reduction of conventional forces in terms on the peninsula and in terms of the hostilities that are there in terms of denuclearization we're talking of course complete verifiable irreversible nuclearization of north korea they can have a civil nuclear program which. civil nuclear program which will be very intrusively watched over by the i.a.e.a. full scope see if guards etc etc but what that means for south korea is that of course they have this civil of very extensive civil nuclear program but there will be no strategic forces on their territory and they want to even be an extended deterrent to south korea provided by the us so long as there is complete nuclearization of the north now the parallel fact which north and south korea frankly need to work out because the nuclearization is essentially a topic of discussion between north korea and the united states with regard to conventional forces what the disposition of the end of the day needs to be that the

peninsula is is kind of insulated from the larger the geopolitics off the north east asia south the south korea has already shown that it is not not terribly interested in getting into things like a regional ballistic missile shield well it's not interesting i'm going to eilat for a line we're going to final we're going to find actually let's yeah we're going to find out just how far the pentagon wants to go along with it john let me go to you because if you get if you look at the mainstream media and the punditry that we are bombarded with all of the time and the mainstream media is really not on board here is it just because they don't want to see succeed at anything or in the military industrial complex i mean south korea in there and that region of the world is a nice. trough for arms in the u.s. as a vast military establishment there and that needs to be paid for i mean.