the trumpet ministration in particular i'm never shy of extolling that cannot make achievement enough without merit the american economy of late has indeed been looking great but there is an increasing number of economists who claim that these boom may be short wave understanding the stage and not the global crisis if the bull indeed comes how hard is it likely to be able to discuss that i'm now joined by a rose a founder and c.e.o. at rose and roubini associates mr rose it's good to talk to you thank you very much for your time thank you for inviting me now over the last couple of weeks we've heard a number of prominent economists warn that the global economic growth may be slowing down but i think you've been the most passive mystic of all predicting a new global crisis around two thousand and twenty dot may be similar in scale and perhaps even wars than the one we saw in two thousand and eight is that still a possibility or already a certainty no of course is probabilistic

a session in the sense that we look at various scenarios for the ward economy and we have touch from abilities to them what we do compared to other economists out there and these are. probabilities to such an event to occur around forty five percent and this is based on a number of forces that we see already at play and we can think and we think that over the next couple of years would have got the starting and my actually quite to cozen down. more severe than what we have seen potential in two thousand and eight and more severe than. most economists commonly expect and i think people around the world do you take your predictions seriously especially after your partner and. nouriel roubini accurately predicted the two thousand and eight

downturn i gathered from your writing though that if this next crisis comes it's all regions are likely to be more multi-factor old and the origins of the crisis that is so previously. only two thousand and eight crises somehow originated in the us a surprising mortgage. and then spread to the best of the war although of course. intimate and ultimate causes of the crisis were already present and there were already global lead time different villages in the banking system where already very present day failures of some regulation including bozza to the tendency of buying some bringing a lot of debt assets off balance sheets were global phenomena but of course you know. to me it. triggered off the crisis was

the explosion so to speak of the surprise mortgage market in the us this time around is more a question of having to suggest that the fuck does play. and they originated in in different parts of the war absolutely and in your recent article with new rail roubini you sound reasons for why the next crisis is on the cards but your starts with the united states and what you call morally time fiscal stimulus policies and by that i assume you mean trumps two thousand and seventeen concession off some one hundred thirty billion dollars in additional spending that's went into infrastructural childcare treating the api oid epidemics is there ever a bad time to invest in those areas oh i mean the problem of tax reform and.

to some extent of the fire scouts of the us administration and as they call him quite late in the cycle when the call that he was already very well established had ops on the verge of slowing down but at the time in which the federal reserve was already increasing rates and and therefore de economy was already somehow prone to war inflationary pressures and therefore giving an extra kick why just a final if you wish for political reasons from if you economists standpoint was a big. time plus the point is that the stocks that are forming the parts cuts out of time just to make sure that the. federal budget doesn't completely exposed explode and therefore they tend to expire i was the end of next year and that is when we fear. some negative impact. on the us

economy because the effects of this tax cuts taper off and you my face if you scope cliff but it's not just about the tax cuts there was also additional spending as i said and i think this claim that the stimulus program was ill timed may have said not only trump supporters but also some people on the democratic side who claimed that if there's anything good to come out of the trumpet ministration on the economic front it was proving that fiscal stimulus actually works when the labor market is sure it's over its full potential as was the case in two thousand and seventeen don't you think that the growth in the job numbers counterbalance or justified the negatives that you mentioned like for example be inflationary pressures is always good to you know have more jobs than less jobs but the unemployment rate is now below four. percent nobody really

knows where denied to ease my v. foot on a house or out there so we had already been loaded natural rate of unemployment therefore of course our job. is a good one but then you have to counterbalance what instruments you're using. against that he solved if you actually achieve in terms of voter rolls you my gain a few more quarters of positive growth a few more hundred thousands of jobs but then what happens to inflation and what happens to the reaction of the central bank to beas inflation because the central bank needs to make sure that. inflation remains on top again and we already see that these are both good and then when they are then you start having parked on everything else we discussed on investment potential because interest rates are high. growth and eventually on employment so

that's why you tend to use holy see in account to seek to come on. come on now i know that you are partial to the financial instability hypothesis which essentially posits that a different jilly t. all of the system increases in good times partly because economic actors don't want to upset growth even when they realize that it may not be our gammick or sustainable how much does it apply to what you now see them eric in economy and would you guys far as to say that the current flies right now the harder they fall is going to be in two thousand and twenty yes that tends to be the case and you mention correctly hyman. financial instability hypothesis which is somehow still ethical books although is being increasingly accepted the monk mainstream economists. in two thousand after the two thousand and eight crisis

effectively things get so incrementally war single times and people tend not to realize that the number of positions because. expose speculatory of zero will to speculate favored their way. and then eventually when something happens seventy something tends to be an increase in interest rates that goes beyond a certain point then you tend to have and if they're still in the high you of being then more severe the downturn tends to be now is study clearly when the fed has increase rates that a short period of time from the peak at a session a compaction or automatic slowdown as always occurred and it would be quite unusual if were these were not to be the case especially because nobody really knows where is the level at which interest rate because three liver stick to now has spent the

last couple of months and well almost a year already extolling he's administration economic genius the job growth the economic expansion and he said only on the willing to share any of the credit with the previous administration but i wonder if this next crisis as you predict come wouldn't be fair to blame it exclusively on him no i look at it is like a question of blaming people a lot of ministrations. even perhaps policies we leave. history. told us time. after the two thousand and eight two thousand and nine crisis. fed to the government that became a democratic administration at the point. in part of why to some stun shows stimulus both in terms of monetary easing and in terms of fiscal easing in the community. to to in fact work plus the symbolisation of the banking system

by a somebody such as the da and so on so these policies of work to because the economy has recovered and recipe somehow is worth the work a little less so in other countries but part of decisive b. was not apply this but in particular the fiscal stimulus so is very hard for any politician of any color domania ministration to stop the pot of tea when his going in fact they would like the pot to go jenas long as possible what we claim is that the market forces assad the devane surely. downturn because inevitable with their video i mean a station in whatever they call it of by i mean a station might be now mr rosen i know that you also contend that if these benefits storm hits the policy tools available to the current administration for addressing

it will sorely be lacking why is that. more than locking i would say that i might be constrained well down the globe because so know what this cold policy space my be. reduced any can be reduced because just think about just to make a very simple example. u.s. fed that has interest rates they started to five twenty five because before the previous crisis they teach the truly zero and the maybe they are going to go up to say three three and a half percent you can see already did that the fed has less room to cut interest rate that's sort of a deduction in policy space the balance should be below to relieve. q.e. and the programs from the fed. the four or five trillion us dollar. chains

follow the being spied of the quantitative tightening fiscal space in most countries stop the the fight to the last crisis we that to g.d.p. ratio of our own thirty forty fifty percent only song that in that the countries stuff there from a higher level but most countries now have been debt to g.d.p. nation in the hundred percent space the us being one but that would be france it could be day u.k. could be other countries that have been virtually. been fiscally beatrice in that in the past so once they have to up lie those instruments fiscal and monetary policy they might find less and less policy space in other jurisdictions and in particular in europe there is be a song some foam on a vault against a deposit is there would i hope that the five decries is in particular their

standard to measure is that what i know that which means that if more of those policies were to be adopted in the future hopefully sions mine will be as it has seeped into as they were going to pass that mr rose let me stop you for a second here because we need to take a very short break but i hope we will come back to this discussion and look into the implications of that potential economic crisis a bit more stately and. this is cruel. to the heat actually physically pulled it out of the ground you have well well well well well well well well well well well well well well. there's a lot of money with you. and with that comes. a lot of

a lot of people from all over the country. you don't make a hundred thousand dollars a year. there's an issue. here in the. they were told sixty dollars a day hard work well work is not easy. and so they want to relieve their stress of how do they relieve their stress. these and then move back out like these men that comfort these men that. people have been murdered up here people can raise their massive drug issues up here give a boom you have everything else that comes along with money.

welcome back to worlds apart by the grinnell of rosa founder and c.e.o. of bros and roubini associates mr rose. just before the break we were discussing this very gloomy scenario that you painted out and i heard you say that if. indeed happens the political implications in the two thousand and twenty electoral year could be massive especially taking into account the character of the current american president what is your worst fear is not just. is not just in the u.s. in a number of countries political developments have shown a very different direction from the past now that i got in the u.s. we had one of the there my be. two potential severe

downturn is the possibility that presidents facing potential. economic crisis tend to turn that instruments to gather. consensus around them that has been has happened a number of times in the past and by other instruments i think you mean the some sort of foreign policy crisis and in your article specifically you mention iran as a as a potential target right exactly because what i was about to say is that presidents can work effectively all on trade migration foreign policy and defense almost without. necessarily consent of congress and congress by the time might be divided the not necessarily of the same call of the president in which case having going to work a lot on trade in migration is the finance and foreign policy they instruments that

in mainz in the hands of the president and therefore in my be tempted to some form of. intervention in the middle east being a potential target there you really build a respect for all he's a legit recklessness an impulse even trump is the first president that hasn't initiated a new conflict that the first president in i think three day kates and even when it comes to syria he said to me bomb syria but the russians would tell you that it was done in a very careful in a very limited manner what makes you believe that trump would indeed move from he's been bastid threats to the actual bombing because so far he hasn't done it and in fact in my north we are talking about a probabilistic scenario here and in my waiting some friends here everything we are saying a number of assumptions that we are. making on then different fronts

and is the quality being of them the might be. resulting in the severe downturn that we are discussing foreign policy from the us is one of them but not necessarily a d. only one in fact a mighty allies that again engaging american troops seeing the least off that having taken to withdraw from them my not be as pages and initially. you know appearing and therefore in my no go for that we're just saying that is that's an option on the table historically leaders do you indeed look for distractions abroad because that's where it's easier to find animals to blame but trump is unique in having no shortage of anime's at home what it would be easier and perhaps more logical for him to blame all the potential failures on saboteurs at home like for example the fat definitely and that's not excluded at all in fact

we were seeing that. already some wrote some of the. rules so no commenting on what the fed has done by making him some statements about what the fed. should do. in order to allow the u.s. economy to grow even faster potentially if that if you did so when rates were bayley at two percent and growth was three percent unemployment falling you can you can imagine the kind you can use when the economy my biggest lowing down interest rates will be between three and perhaps three and a half percent and unemployment at ops on these where yeah you can you can definitely see how we can increase. that i totally against defend don't think that

potentially congress again if he gets at least house of it in the hands of the democrats off that means time elections now as the and off last year about half of the u.s. is public dad was owned by foreign investors mainly china and japan given tromps post on trade with china do you think beijing or even toll killa may change that asked try to just with regards to the american holdings it's it's very hard to to have a new deal in a. catastrophe in order to do that because that i man in deep and liquid and safe enough spaces where to park a massive amount of reserves that both china and japan have and we know they're out of pocket of the geopolitical. scattering clean place and therefore as i was saying for them to change this

strategy you really need a change in the geopolitical believe you're now in china you need to concede that they yes we have a saying. trade skin mischa's the way we might define them of course some tightness might be her thing and my view being china we saw that already. but biddy ali today it is that the. underlying technological war much more important than then the trade scheme issues that we see on the surface and this is a down day for a drink agenda playing to twenty five that the chinese government is pursuing and in order to get to leave the ship i mean the number of. high tech and top industries of the future is really more of that trade dynamics that is on on the surface so geopolitics said this. they just more run out around this kind

of conflicts rather than full confrontation isn't as long as is remains in in this kind of space we didn't see china and japan changing completely their allocation of reserves now speaking about responding to that potential crisis more broadly the two thousand and eight crisis like left a very strong unpleasant off to taste because of the financial sector bailouts you know nationalizing losses while privatizing profits do you think these too big to fail mantra can and should be applied again. a number of measures have been taken from the regulatory perspective by a number of countries around the globe in north of the to diminish the so-called too big to fail. all e.c. leaving we'll see various forms of separation within banking

groups and so on so forth in order to make them you know it's still honestly implemented and no it is not going to is not going to happen between now and then also because memories are processed and a financial institution has been such that in fact some of the distinctive fall this is what i've been somehow already a relaxed and so dick western will. be able to withstand a novice if you have price and if they're not was going to pay for them now if they answer the first question is they should be more it is ian than they would into pos because they have bets a capital eyes and they have more liquid assets that was that is out of that evolution that was imposed but they might know we stand complete market crash let alone a meltdown and in this case fiske of resources will always be a vein surely they do. doll of course would be to play sions even more and

therefore that's why there's that. severe political crisis. the next financial and economic crisis that you've pointed out in your article that the idea of bailouts will be particularly intolerable in the countries with resurgent populist movements but these kind of populism is self-contradictory because people simply don't want national money to go into saving big banks but they also don't want to see their savings evaporate do you think governments even the populists governments can really afford not to be populist in the sounds of providing some sort of a kirsch and for the population in dealing with the banking situation yes you pointed out correctly. contradiction in. economic positions it's easy to find an enemy where the fault in the way of

their. political opponents and so on that's that's easy much more difficult to explain how things are once you stop telling people look you my hate the banks but where do you put your money. you put them in the bank and what happens if the vanko zonda you don't see your money anymore now you want me to intervene ok so these kind of reasonings would be much more healthful to make people understand of real dynamics that in why people locked on consequences of crisis that of khowst nobody wants a different stories where the previous crisis. that is being say conflict of interest between politicians market a fisa pencil and then mix and so on the has made the situation worse and therefore the whole my feel betrayed by the elites so to speak of the economy and society in their. for they have this kind of

a sentiment by the even if that were to occur the first line of the fancies making sure that the banking system is time realize people have access to the savings and only off that then you think about solving the somehow the the domestic izing from dot now speaking about populous very quickly one interesting point you make is about europe and the concern that the new crisis may simplify the existential problems of incomplete monetary union with inadequate to risk sharing and you even suggest that it may prompt eataly and others to actually added the euro zone altogether would that be a rational economic decision as far as the tally and that concerned ok let's. take a step back yes the front of the monetary union is incomplete makes vulnerable to

shocks now if those shocks were to occur to this new order that the markets of that we said in in the report then. political leadership over eurozone countries left to make a decision in the to make a step forward as it happened in the past in finished and complete in the. money if you need an audience stead allowing the shocks to be a symmetric and leaving some countries in great difficulty assuming that this political we love not making a first of this happens in the mind of the day you might be by in my also not be there if for example that is also the twenty one thousand european elections is in favor of these more nationalist part of these less in favor of for the european integration then it's a question of how individual countries will react to that and even if is not irrational decision it is not even the fees and i don't want the decision italy and other. and she's my be finding themselves in the fringes of the euro area in that

very difficult spot and then the point will be if the market forces politico will out of people's will the determines whether the moment you knew remains together or not and that is in my not well mr rose i wish i could ask you if you more questions on that about unfortunately our time is up thank you very much for sharing your perspective with us today. thank you for inviting me i encourage our viewers to keep this conversation going on our social media pages and hope to syria same place same time here on worlds apart.

descending into tribalism and cultural trench warfare a highly contentious brett kavanaugh supreme court nomination process has ignited conscience and anger on both sides of the aisle interestingly and ironically the point where there is wide agreement is the recognition the status quo. and sadly with no way out. just manufacture consent to stick to public wealth. when the ruling class is protect themselves. when the final merry go round be the one percent. we can all middle of the room sick. i mean real news is really.

the headlines here on our to international the u.s. threatens that saudi arabia with repercussions if riyadh is found to be responsible for the disappearance of a dissident a journalist in turkey demanding everything that we want to see what's going on here that's a bad situation this is serious it's time for the united states to rethink our military political and economic relationship with saudi arabia contempt will be met with contempt. an american graduate student is detained a at an israeli airport and held for a week over her alleged support for the boycott divestment and sanctions movement. and the people on the caribbean island of martinique could call on the french government to take responsibility.