this is boom bust the one business show you can't afford to miss i'm sorry on the stand washington coming up u.s. unemployment claims are down for the 11th straight week but some are having trouble finding the good news in that nearly 46000000 unemployed and a new trade war may be brewing not with china here. we'll tell you what a possible to. have a talk show today so let's go and die right in. the u.s. unemployment numbers are in and the latest figures from the labor department reported 1500000 more americans filed for unemployment last week this is up from the expected 1300000 well this also marked the 11th straight weekly decline in applications but also the 13 consecutive weeks or week where jobless claims remain

above 1000000 well this is a total of more than 45000000 americans have filed for unemployment as a chronic virus continues to slow the u.s. economy and with many states reopening and some old jobs returning the total number of people receiving unemployment actually slightly fell well to talk more about the markets we turn to our panel of the out of training group co-host chrystia i am let's start with you unemployment data came from came back and it's worse than expected but something else was also quite unexpected there we're getting it our actual on employed workers how did this happen. so when the. group was put into the drafting more really. the rules are. limit which contributes to that but also people are only considered unemployed if they look for jobs in the last 4 weeks they discount a lot of people who have given up on building for jobs and with people. kind of

discarded kind of job market or maybe afraid still get in corona virus there's less people than looking for work plus they really picked up how much you get paid for unemployment so you're seeing a lot more people get it and that's where that disparity comes in with the numbers where there's more people that are receiving you know harassing your input well originally adam correct me if i'm wrong but i believe the unemployment numbers took into account those who weren't looking for jobs because of the pandemic is that still the case i don't believe so i thought it's only within the last 4 weeks and then outside of that it's not counted. that's that's what i. heard on the stock market now for you but i believe it's just the last few weeks i see ok christie meanwhile there are still some huge backlogs in the unemployment payments to millions of americans what is out looking like now. well right now there are still a lot of americans who lost their jobs during the crisis and they've been unable to collect their unemployment checks like just on twitter alone you can see from these

photos these massive lines in kentucky in the capitol where you have massive lines of people flocking to the state capitol early morning wednesday in order to see person help in person because they haven't been able to get on the phone or do it online so most of these states not just kentucky they've been overwhelmed with the 10s of millions of unemployed insurance benefits claims that are filed and most of these systems have been in adequately staffed or just load balance to handle this surge of demand which has resulted in crushing computer systems clogged phone lines that further compound the problem so now we have more than 20000000 americans who are currently receiving checks and but many others are still unable to even access their 1st time check and benefits are struggling now to pay for food and rent and now in california where i'm at the backlog has now officially topped over $1700000.00 in 2 months so that means 1700000 california workers who filed claims during those 2 months they are still waiting for their 1st time payments you know

you said these lines are form because people can't even get a hold of them but out of going off of this looking at this this backdrop has this expectation for the v. shaped recovery that's been overly optimistic that people have been expecting how can we get this bounce back in the market and how is it pricing in when new unemployment claims are back up over a 1000000. it's a really good question i think when you talk about what you do specific about. because this is the stock market which is. and we've seen some. remind me of the internet bubble and. just. when they were. just really rational. and it's not natural but if you talk about the economy. that's not going to be recovery. with jobs. you know. the world is not going to be

a better place than the stock market is not because the world more could be should be calmer yes. no i don't know it's not and it's definitely been been this roller coaster of that we've been seeing in the market with the volatility and much like you said with this possible 2nd resurgence kristie let me turn things to a little bit of the tension there has been between china and the united states secretary of state my pompei i just met with china's top diplomat yang joshi on wednesday what came of this meeting. all right now diplomatic observers are saying that this meeting showed that both nations they do not want their bilateral ties to be derailed especially ahead of the u.s. presidential election so expectations were fairly low for this meeting but at least tempers were kept in check as they discuss very sensitive topics such as taiwan hong kong the china belgium wrote initiative the high tech race the arms race as well as others so afterwards the u.s. released a statement stressing the importance of american interests and the need for fully

reciprocal dealings between the 2 nations across commercial security and diplomatic interactions meanwhile china also released in their statement that it hoped the u.s. would be accommodative and push their bilateral relations back on track for coordination cooperation and stability and also reiterated that china's stance on hong kong and taiwan was purely an internal affair and opposes any sort of foreign interference so now while the meeting was quite tempered there's clearly a strained relationship not to mention the fact that this meeting it was not. publicly announced in advance and it's still not clear to to this point which side has proposed it to begin with which really highlights the tension and the mistrust right now that now permeate between the world's number one and number 2 economies and we saw this play over and over again after the trade war which is still in effect they've only signed a phase one will probably will be seeing the face to anytime soon and i want to move over to commodities when will or will ever the u.s.

shale rebound to prepare endemic levels do you see this happening. i mean. it's not going to be something i see how a near term future. and that goes along with all the should be kind of groove you know. like myself it was important to me for a 100 days like i'm signed you know comfortable so i'm going out playing golf but i still want to get on and there are. people that i know that have worked in offices their whole lives there. and as number spike in other areas is something i think that goes with with no not with start up at the office will get there but you know if you ask her yes yes it will come back but the bigger question i worry about these companies like your chance of which are. you know. the last to come back and that's where you get into

a piece of survival look at it you could start to see more and. companies look to consolidate and. so. i do really. if i was in that industry and i needed in the near term because i don't think you're getting the energy sector has definitely been hurting a lot kristie about a minute left but the u.s. production has plunged by $600000.00 barrels per day is this a new normal. it certainly does seem to be the new normal because right now we're taking we're taking production cuts all around the world and especially places such as the middle east such as russia such as venezuela which rely more much more heavily on the oil economy and then the u.s. so those economies are definitely hurting and at the 1st chance it gets whenever demand actually rises again they're going to they're going to be surging oil back into the market that's only going to drive prices down so the u.s. is going to be more so collateral damage in the midst of all of that especially because they are looking for more of these cut out a mesh of the trading group and the best co-host christine thank you both for your

time today. thank you. there are now fears the trade war. but a rough between the united states in europe after u.s. leaders walked away from negotiations over taxing big digital companies like google amazon and even facebook will some european countries plan to move forward with new international taxes anyway which could then lead to the u.s. to retaliate with tariffs on some of their products were legal journalist molly barrows together with america's a lawyer joins us now with more molly good to see you why are european leaders proposing new international tax rules. well there they say it's long overdue that there needs to be a major update and over all these international taxes in order to bring it up to the modern digital era they're basically looking at big digital companies that are based in the u.s. getting corporately tax in the u.s. but not having to pay corporate taxes anywhere else in the world where they have hundreds of millions of customers and are raking in hundreds of millions of dollars each year so you're being countries have started to levy these digital taxes in the

past year and they had them on hold as long as the u.s. was willing to negotiate well this week u.s. trade leaders said we're not like in this it looks like it's going to move forward regardless and they feel like they're being unfairly targeted essentially because the current rules say you can only be taxed in the country you're producing the product you have to have a physical presence in order to be faced with corporate taxes but these countries are still i mean these companies are raking in a lot of money in these other countries where they're not based but their customers are because it's a digital era and the u.s. says well if you're going to write these rules to where companies that make a certain amount that's what they're proposing is that companies that meet a certain income threshold are the ones that are taxed that immediately makes a number of these very big companies that are based in the u.s. targets is what u.s. trade leaders are saying they feel like they're being discriminated against so they're not happy about and that's why they walked away well at least it looked like there was supposed to be a conversation about this we've seen the united states the great wars with other

countries in the last couple of years and some took effect he you know he managed to to get into one with. china the world's 2nd largest economy and that causes a lot of harm to to the economy especially to certain sectors like farmers for example but how is a potential trade war now stemming from this and break it down for us what would that look like with the european union right like you said sara we can't afford another trade war with any country at all much less dozens and that's essentially what you could potentially be looking at because there's 140 countries that were part of this group if you will that was trying to negotiate new tax rules and the united states has been seeing this coming for some time it's no real surprise that they don't want to participate i think people realize that they don't want to see their companies paying taxes but basically what the u.s. is saying is hey if you're going to if you're going to make us pay taxes which we think are unfair then we're going to add tariffs on to your products so some countries say they're going to wait before they move forward we're talking about tax rates of anywhere from 2 and a half percent to 7 percent from countries like italy france hungary

a few and many many others but france is saying you know what we don't care that you are way we're going to go ahead move forward with our digital tax i think 3 percent and that's when u.s. trade leaders said you know what you can do that and then we're going to start taxing your goods france including shipping of champagne. basically other i don't like shopping items purses and bags yes only go to all the good i mean it's a shame much like you said we can't afford another trade we're not only because of what we've seen with the u.s. in china but because of what the world is experiencing recessions all over the european union the united states just turned into one so a lot of companies are countries already hurting but are u.s. companies still subject to this new tax. actually no because current tax treaties i mean they are they are they don't have any control over is what i'm saying current tax trees don't exempt the us from being able to say we're not going to pay it i don't know exactly how that will break down if they just keep walking away from

negotiations but i don't think this issue is going to go away and that's why there is a real threat of a trade war in the legs you mentioned before. donald trump president all trumps trade war that's ongoing with china this could potentially be a problem here as well because he's. launched a series of trade investigations into numerous european countries basically saying hey are you unfairly taxing us if you are then we're going to put more tariffs on you so it's this tit for tat retaliatory attitude that could potentially lead to even more economic problems not just at home but across the globe so you know u.s. companies may think they have the choice to walk away but you know the biggest thing that these tax taxes the new tax system or actually has going for it is that you know they're outside the scope of tax treaties so they the u.s. doesn't really have a leg to stand on to say no we don't want to pay it well there were already taxes implemented over the air bus issues that we saw with the united states putting tariffs on certain products from from europe so i mean only only time will tell but it doesn't look like you said like this will go away i hope and pray that we don't

come into another tit for tat trade war because again the united states and other world markets cannot afford anymore molly barrows contributor with america's lawyer thank you so much for your time. sarah. time now for a quick break but stay here because when we return chairman jerome powell says the federal reserve is ready to buy a corporate bonds to keep the market moving but critics say it gives the fed too much power to pick winners and then pick losers as we go to break down the numbers on the. i.

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xom at the cell in that country critically ill kovan 1000 patients published earlier this week however w h o chief ted rose adding on gabriel said research was providing green shoots of hope and should be reserved for serious cases in which it has been shown to provide benefits all this while the agency hopes for a vaccine by late 2021 we are hoping that didn't 2021 that we will have $2000000000.00 of one or 2 or 3 effective vaccines to be distributed around the world because of all the investments going into this week let's see we will have $2000000000.00 us by the end of 2021. we should be able to vaccinate at least these priority populations. there are about a dozen kovan $1000.00 vaccines in early stages of testing worldwide the w.h.o. is currently working on developing an allocation framework for how these act scenes that would be distributed. reading a better idea of how the federal reserve banks corporate bond buying program will

play out will corning to fed chairman jerome powell the program will entail mostly individual company debt rather than exchange traded funds well powell told the house financial services committee on wednesday over time will gradually move away from e.t.s. and move to buying bonds powell said it's a better tool for supporting the quiddity and market functioning well joining us now to discuss the best co-host investigative journalist and michael pentode but let's start with you explain this corporate bond buying program to us and exactly how it works you know a lot to talk about here but essentially back in late march the fed announced they were going to embark on really 2 facilities which they said would jump start this $9.00 trillion dollar corporate debt market and what they said they were going to do was essentially go about buying bonds directly from the issuers in one case and in the other case they would then purchase them on the open market now as you just said the german drum powell on wednesday came back and said that rather than doing

that through e.t.s. they would now kind of focus on buying them directly from the issuers themselves so that's kind of the general picture of what this consists of but obviously there's a lot of details when you really look into how the fed is going about doing this or whether or not they even can be doing this under the way that the laws are structured right now it is and it's been criticized for it now it's a big move on their part from what they've already done michael what makes this program so unique though compared to other efforts by the fed it to keep this us economy moving forward. well 1st of all thanks for i mean the program so 1st of all is the size you know from the weight of the great recession already through the peak of that there's a balance sheet that was 7 years in duration and instead of increasing. $3.00 trillion dollars well you know what in less than a year the fed's balance sheet increased by $3.00 trillion dollars it is now $7.00 trillion dollars in size and by the way the fed's balance sheet is supposed

to be something composed of government guarantee that it's mostly buying sure asia reads resource resupplying funds for the said funds market which is over a lending between 2 banks but we're not actually get the rate to buy junk bonds collateral is a loan obligations treasury and the fed are set up for usual offices and not many people care because stocks are almost back to an all time when michael powell is saying that the fed to keep markets going to keep market liquid but there is obviously a lot of criticism in this program. yet who is that where the fed's mandate i thought it was full employment stable prices of course they would place a presence now means 2 percent inflation and there's a symmetrical target so now it has to be above 2 were the same duration and amount that it was below 2 and right now the way the fed measures inflation is 0 so this

is what's happening now opens the treasury market the municipal bond market the corporate bond market did jump on the market the c l or it did and by proxy the real estate market and the stock market they're all in a massive bubble all by the federal reserve if you never simple a whole remind you that in 2019 they were reducing the size of the best bells went in for him surely and to 3.7 trillion and the wheels fell on the economy it went bad security and lower rates 3 times from 2 or damn percent 1.75 percent so the fed is strapped they just never are why this balance sheet is going to grow and grow and grow and so we sat flayed our way into it with all the rates had already been lower and us hearing had already been lowered prior to preplan demick but i think people forget that i guess the point you bring up a good people forget how much the fed actually how many of these entities the fed actually own but better tim go ahead. they only i mean i'm sorry spent under

somebody else i was going to them for i was watching some other channel say c.n.n. b.s. i would say the real name of the channel and they should and this is what they said . is not really an elephant in the room because they are not buying oh well market prices below this all the mortgage there's surely these mortgage prices we should be very concerned doesn't sound like a free market these days ben michael just pointed out some of the biggest problems right now but there's been other criticisms that indicate that what the federally is doing isn't even legal is that true. well it's not really legal because it's exactly what michael just said he made several great points there but essentially what you're talking about is the fed has a mandate for unemployment as he said they deal with interest rates they keep those interest rates low there's a lot of questions even about the tactics they already use of the devaluation of the dollar as a result of what the fed has been doing but here's where this is especially significant is what michael pointed out here is that ultimately the fed right now

is buying junk bonds they are buying an essentially bonds that look if you go back to 2008 what was the problem that we had we had bundled junk bonds that is essentially crashed the market the 1st time the fed is now going out and buying these up right now and saying that this does fall within their mandate because essentially the fed is pretending that its mandate is to save the u.s. economy it is not the mandate of the fed to save the u.s. economy and by the way when the fed decides unilaterally that this is now its mandate it also means that the fed is deciding what saving the economy equates to and the fed doesn't that have the authority to do that and to decide what it has the authority to buy and to take up so essentially what's happening is the market is being flooded now and the only thing the fed in the past has been allowed to do is buy up these e.t.s and now they're saying we're not going to do that anymore we're going to go directly to the issuers of these junk bonds and we're going to

buy directly from them where is the accountability in that process and there is 0 well about let's turn it over right now to the employment numbers we've talked about this early in the show we've seen the unemployment benefits rise to new levels now saying that there should be extended beyond july while others are saying that they're going to be docked the weekly unemployment check that people are receiving why is that. so essentially what's happened is this with the unemployment insurance and issuance that's been going on since coronavirus came along congress up the amount that people receive by the additional $600.00 the problem with that is by upping that to $600.00. dollars and that was supposed to last until july 31st by doing that you're essentially making it. basically a better value for someone to be unemployed and receive that check than they were having the job that they lost as a result of coronavirus so there are a lot of workers out there who say right now i'm making more money through unemployment than what i was getting right by actually going to work so i don't

plan to go back to work or i'm going to hold off as long as i can the problem is yes you're trying to help people in the short term by saying we don't want there to be a big shortfall but what jerome powell is telling congress is that is that congress needs to extend this and keep it going indefinitely in even give a timetable for when to do it he just says continue with past july and keep it going and if you do that your d.d. incentivizing businesses to reopen and people to get back into the right force not my internet dangerous thing that's why investors are so into the market michel last question the fed will probably not lift all companies with so much stimulus that not all factors what does have strong factor that we're looking at some stock strong picks in your opinion. well 1st of the say that ben is very great and he's got great hair. i would say this that it is 29000000 people unemployed right now so if you're out there buying momentum stocks and stocks you could get crushed where you were you know high right now you can't really buy the bond market because a 0.7 percent a 10 year offers little to no protection option to chase. roe i would say you have

to do is you know some precious metals farmland. and maybe some play in platinum other than that where were you hiding i mean i ran an active strategy long short story and you story very well for us thank god but if you're tacitly managed you're going to get slaughtered. well absolutely and i will see how much more the fed plans to do because they won't stop until they said that the recovery is maybe in a few years michael pentode president and founder of pentode strategies been best co-host investigative journalist and so on thank you both for your time today. that's it for this time you can catch him bust on demand and catch us on youtube dot com slash boom bust r t we'll see you next time. expound

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