economy minister giovanni trio wants to bring the deficit down to below two percent of g.d.p. but the five star movement and the league are pushing for a looser target the government has threatened to sack tria if he doesn't bend to their will italy has been gradually bringing its budget deficit under control the country was hit hard in the global financial crisis in two thousand and eight within a year its deficit ballooned to five point two percent of g.d.p. but by twenty fifteen it was below the euro zone's three percent benchmark and last year the deficit was down to two point three percent of g.d.p. . the central bank fears that even a minor spike in the deficit would send italy's did out of control is only has the second highest public debt in the eurozone after greece and analysts believe that italy's debt figures are underestimated because they don't adequately factor in the cost of supporting the country's ailing banks. earlier we spoke to a list here with kathy from the brussels based economic think tank bruegel and i asked him if italy can afford an expensive welfar

of magnitude of two percent and this two percent comes from the fact that it would mean that given g.d.p. growth italy would still be on a debt reduction path. let me just because you mentioned the debt and as much was mentioned in the report italy's national debt is the highest and i think that's kind of what is at stake in these days because it is a matter of seeing whether the government respects economic reality and they cannot make reality is that italy has this huge debt you're talking about here has a fragile financial system so if the government is ready to take that out to factor that in and not follow populist promises then the country can remain solidly into the euro zone if a financial crisis is sparked and often you do it in one. unwillingly let's say inadvertently then there with there is very little the government can do not withstanding italy's economic weight ok let's see your tendency for the brussels based economic think tank bruegel on italy and its budget twenty nine hundred thank you so much thank you. here's a reminder of the top stories we're following for you. tu

the international monetary fund predicts the debt levels over ninety percent of g.d.p. hinder economic growth and it also limits government's ability to react if the economy starts to slow down which could kick off a financial death spiral leading the i.m.f. to the conclusion that the world is facing greater financial risk today than it was at the stars of the financial crisis in two thousand and eight. u.s. president reportedly asked aides to move forward with new tariffs on iran's two hundred billion dollars in chinese goods that's according to u.s. media courts but it's unclear when or if the new sanctions will be implemented hughes is trying to take an unfair advantage of the u.s. and the country's bilateral trade relationship. the russian central bank has raised the country's key interest rate by twenty five basis points to seven and a half percent the move comes despite pressure from prime minister dmitri who called on the bank to lower rates to keep cash flowing to businesses and individual lenders but central bank heads ignored the appeal arguing that preventing

growth for not a lot of money you're getting g.d.p. growth per hour per day per hour and there's nothing more productive than slave labor except for maybe prison labor so all of these innovations like the like button is a way to turn what would ordinarily be productive workers creating wealth for themselves into slave labor creating wealth for mark zuckerberg so this is all about male slavery and this is all about the robots. you are taking all the productivity and passing it on through labor arbitrage to the pockets of the tech elite and they do it channeling sort of the financial system which isn't totally the hands of the same one thousand bankers and technologists who make all the lost since ninety seventy one when we went off the gold standard we'd have ability to financial eyes the economy and then you had reagan come in and eighty's early eighty's and then you could have the deregulation which allowed even a greater explosion of financialization and then you had bill clinton who introduced got rid of glass steagall and introduce

say forty thirty forty percent thirty percent of global g.d.p. so that isn't something that china doesn't want to miss out on so anything that impacts china relationships with the western world they can't make it up in emerging markets. thank you and that's it for the show will be back on saturday when privatized and on british airways flights from of the just have to run to conform to the u.s. violation of the iran nuclear deal agreed by britain and russia on saturday we asked the man who could be president of nigeria next about a ward of them's the alleged was like a liberal democrat be to vince cable and u.k. foreign secretary for that have been given out by social media we'll see on saturday thirty eight years to the day you came back to saddam hussein invaded iraq saddam would go on to use w m d against the islamic republic with the knowledge of both the u.k. and u.s. government. please. please. notice anything she. said as that. night. so there was a built. in into him about the question of how they not. look . for the look i. don't want th

mean fifteen billion in cash behind the back of the sofa job in terms of the government's budget in g.d.p. so it's not it's not shoot money and like you say when forming million children in poverty and homelessness is rocket science and so on to ten. it would be a good policy for them to adopt i'm not sure if they will but once it happens a conference it will thank you well this week marks ten years since lehman brothers became the biggest bankruptcy in american history after it came policies like universal credit in britain and around the world what the u.n. said was more than one hundred million pushed into abject poverty joining me now from new york city is lawrence o'donnell formerly vice president at lehman brothers and author of a colossal failure of common sense the inside story of the collapse of lehman brothers larry thanks for joining us ten years this week after the collapse what lessons do you think wall street and the city of london have learned well central bankers haven't learned. much i mean in the years before lehman the federal the federal reserve our u.s. fed kept rates

you know we've reported on the program before that i think it's about a half a percentage point of g.d.p. for the u.s. increase as a result of nafta so overall it seems like a good thing although i guess there are sectors specific deals when you look at the u.s. and canada what are the major things that are going back and forth and what's the key thing for canada now why do they really want to specifically sector specific want to be in this deal. with the biggest thing to think of from the canadian perspective is the impact of the automotive industry so one of the reasons they were driven to the table and that they're part of the party to have taken place through the last couple of nights and in a pretty frantic pace is because of the threat of tariffs and the threat of tariffs on twenty five percent twenty five percent tariffs on canadian auto imports and that would have a tremendously negative effect on the canadian auto industry much of which is concentrated the province of ontario ontario is electorally important but it does fifty percent if it's if it's international trade is with u

we are spending over one percent of our g.d.p. in addressing climate change impacts we're also comeau to climate resilient agriculture initiatives have been taken to increase street coverage from twenty two percent to twenty four percent in the next five years a project toward fifteen million u.s. . dollar is being implemented for the conservation of dust and months the world's largest mango forest and that unesco world heritage site. we have integrated our development programs and our a force to build capacity for combating climate change into make up project titled delta plan twenty one hundred. it is a water centric multi-sector oh no economic plan with a long term time frame. has been developed in consideration of the local geomorphology and of global climate change impact. bangladesh is the only country in the world that has adopted such a long term development plan spending eighty two years. we are shocked. by the continued violation of the rights of the the really people of palestine. this must come to an end. as the chair

international monetary fund predicts that debt levels over ninety percent of g.d.p. hinder economic growth and it also limits government's ability to react if you commie starts to slow down which could kick off a financial death spiral leading the i.m.f. to the conclusion that the world is facing greater financial risk today than it was at the stars of the financial crisis in two thousand and eight. and joining me here the big table is christophe kober christophe you know we've been talking about this big anniversary you were somewhere that actually makes you qualified to talk about this anniversary where were you ten years ago well i had back then i just started working for t w and when lehman brothers collapsed the company sent me to london for a week and then two weeks to frankfurt so i've been out and about covering the implications of this downfall and i remember particularly well the mood of canary wharf the financial center outside the city of london. it shifted between mounting fear growing fear of you know who's going to be next and just this cold aggression

point three billion dollars in chinese loans a debt equivalent to more than a quarter of the maltese g.d.p. now observers wonder if this city's the island nation vulnerable to china's demands

because their plans new debt of two point four percent of g.d.p. was pushed through by the leaders of the two governing parties mateo's of uni and luigi dimaio overruling italy's more cautious finance minister he had pushed for a lower deficit to bring down the country's public debt the mood on the streets of rome is mixed. because of the people and i'm confident because i feel for the first time we're doing something new. i'm very concerned you just need to look at the market this morning it's losing nearly three percent banking stocks are down five percent. the mainland stock exchange has certainly taken a beating and government bonds have also shot up. joins us from the frankfurt stock exchange the german reaction looks just as dramatic. yes spending you can see here behind me on the docks just after noon when the news came out there was a bit of a shock moment really suddenly phones were ringing shuffling down on the trading floor here and what had happened is the some milano of the italian stock exchange had stopped trading in that suspended t

europe the picture is a little more complicated the average is about eighty three percent debt to g.d.p. but you have some e.u. members including big ones like spain and france that are one hundred or more and so obviously you have the basket cases like italy and greece so what sets this off eventually the bond markets are going to get wise to this and it's possible that a contagion begins in the united states or it begins in europe and spreads worldwide and policy of the central bank certainly in the united states has mishandled this badly in the last ten years as did the previous administration with its anti growth high tax redistribution us policies aid and abet it by janet yellen in the federal reserve who kept interest rates artificially low and was very slow to unwind a lot of the extraordinary liquidity measures otherwise known as q e one two and three inside the united states so now central banks are woefully unequipped to deal with that next crisis and because interest rates are still very very low bed that this nobody but surely rising let me just bring it to another possible

and the united states last despite the fact that the uki spent just nine point one percent of its g.d.p. on health care and the united states almost double that. if we didn't exist or probably cat doctors disappeared overnight it began the n.h.s. that's how the n.h.s. works with a relatively small budget you're able to cover the majority of health conditions. today the yuki's primary care provides ninety percent of all health care for only eight point five percent of the total health budget. i would hope that our privatized system is the envy of the world it means that every person this country has been titled in to develop a past the relationship with someone you remember them and know it's wrong with them and be able to help them through periods of stress or physical ill health the uki is said to have a higher percentage of doctors working in primary care compared to other european countries. britain is also internationally recognized for having the highest number of people with an assigned primary care provider one thousand percent of the population are registered with a general prac

has very strict rules about debt limits they're not being more or less than three percent of g.d.p. so we have to wait and see whether that. says they're going to care more about italians and they're going to care about the e.u. so they're going to increase spending i think for political reasons as well so interesting before we let you go professor i wanted to circle back on a matter that we talked about once or maybe twice and that is something that i assume is not going to happen but i quite frankly have not paid a super lot of attention recently and that is the trumpet ministrations proffer to. try and reduce taxes yet again going no place fast or as or anything new you got it going no place for tax reform to they're calling it and the house is going to take that provision up i think this week or next but needless to say it's not going to gain weight of the senate we're going in the midterm elections we know what's going on there absolutely got the midterm elections coming up in november and it's possible that the house could change from democrat to republican hands who knows wha

i mean there's more dollars than g.d.p. in the private sector this is a this is not unprecedented situation and i do think that you can really look. indicators such as the status of the u.k. as has been reliable as being a reliable indication of what's going on but what we do know in the american economy is that skill shortages are beginning to impact labor markets. anybody who's a global in america basically is you know can get a joke so the economy is i think in a pretty advanced stage of its credit cycle i don't think we can really i mean you keep talking about all this money sloshing around the system and the fact that we have failure of crisis governor at the same time you can't really call that money money has starkly is a store of value or a means of exchange but we're talking about family by the central bank that is for political favoritism and for political outcomes that's not money that those are coupons that are printed by a centralized autocracy to further their power structure but it's not quote money as i unde

off about twenty nine trillion dollars and that's a key thirty nine percent of the world's g.d.p. and it's actually and china was. likely to be able to take advantage of the and we're also looking at one belt that's going to be financial products coming up china needs to come up with loans and this is one of the ways that china could perhaps not rely on this trade with the u.s. going forward and growing its economy it sounds like a trade war could actually spark quite some progress for the chinese later home for us in singapore german chancellor angela merkel mikami because on sunday discuss extra measures to avoid large scale diesel bans across the country among the most contentious issues engine retrofits which the sector so far opposed for the summit ended in conclusively. perhaps b.m.w. wanted to show a little goodwill the c.e.o. came to chancellor angela merkel's office in an electric car for his company there's a lot at stake the same for mercedes boss techa and v.w. management they'll be meeting with macko finance minister shots and transport minister sure once again the su

increase taxes on the wealthy furthermore defense spending was cut from five point two percent of g.d.p. in one nine hundred ninety to just three percent in two thousand the house passed the tax increase without a single republican vote that vote was particularly difficult for democrats after bush forty one has popularized this phrase. push and i'll say no. and they'll push again and i say to them read my lips ah and candidates for congress were asked to take no new tax pledges and while the bill passed it cost many democrats their election in one nine hundred ninety four republicans won control of the house and clinton nomics faced tougher hurdles in congress clinton omics was first kept the us economy moving along in addition to policies put in place like welfare reform and free trade deals such as the north american free trade agreement and significantly financial deregulation was taking place within the clinton administration and then through the nine hundred ninety nine gramm leach wiley law which repealed the glass steagall act a law enacted the in one nine hundred twenty nine aft

figures yet to come in what do you expect actually just been announced so we've twelve months or g.d.p. figure of five point two percent growth till the end of june which is just about in line with market expectations but it still shows that growth this is the climbing over the end of the previous the first quarter two thousand and eighteen it was seven point four percent annual growth so we are seeing a slowdown in the official growth rate was ok well bring and you're closer to the source than we are thanks for that what does turkey's economic decline as you describe it mean for the country's political stability also with regards to the conflict in syria. well fortune i think the president had any doesn't have any real domestic challenges but he is facing in terms on a national level but there are local elections coming in march next year people do tend to vote and so you they have their local elections coming in march next year and people do tend to vote on national issues as well so it's going to be a bit of a challenge for him i think going for those local elections in previous gri

those are the primary drivers and of course consumer spending that's seventy percent of spending of g.d.p. in the u.s. of a i know what it is elsewhere but that the consumer doesn't spend the markets can't go up because there will be no profits and john in the u.s. market we've seen some very positive earnings report among the program and those are reflected in the markets but you know what do you think is driving sort of these overall buoyant numbers other than the earnings reports what's the underlying line there is the economy just doing better is it tax cuts what do you think. people earning money and as you know it's expensive to live so people have to spend baby spend so that's good for the economy it's good for the companies and may not be so good for the individual that becomes part of the the equation but as i say it's spend baby spend and everybody's involved in it so far even if your income is not what it used to be it's a strong it may it may be a good income again not as high as it was maybe so maybe ten years ago even for some people but everything is so expensive you got to

of magnitude of two percent and this two percent comes from the fact that it would mean that given g.d.p. growth italy would still be on a debt reduction path. and this year tariffs you know they're speaking to us here in europe temperatures are dropping after a scorching summer time then to wrap up in your favorite woolly garments but what does a drought in australia have to do with the cost of your winter wardrobe quite a lot as it turns out. hungry lambs as a dried stricken farm in the eastern state of new south wales. astray produces ninety percent of the world's merino wool exports. but after one of the driest seasons on record many sheep farmers are struggling to keep their flocks alive what at the moment were about thirty eight forty thousand balls last this form of the what we had last week so that's really awful so weak that we've lost so far already for from this trail. to drop in production comes at a time when global demand for not full fibers is surging at this well auction instead me the bids are coming in fast and strong. well it's certainly a great spark in demand at the

when the trade deals are fixed and made fair, g.d.p. will go even higher and potentially much higher than that and if you go back to election and go back to campaigning, nobody ever would have said that was possible except me and maybe a few others that believe in me. thank you all very much. [everybody talking at once] >> it's time to go. president trump: anything is ossible. >> can we ask about syria? bout syria. president trump: i think it's a in the situation province, it's being surrounded and they feel they have 35,000 of their enemy there and yet you have three million people living there and i'll just tell you that they will hopefully be very, very judicious and careful because the world is watching. that cannot be a slaughter. if it's a slaughter, the world is going to get very, very angry. and the united states is going to get very angry too. >> you're not going to allow it to happen? president trump: i'm watching it very closely. it's surrounded right now, the province, it's surrounded by a lot of people with a lot of weapons

bush bush forty two when he takes over great really a great economy with budget surplus us g.d.p. fell in the wake of nine eleven but recouped in two thousand and three through two thousand and five which saw three point five percent rate the deregulation of the financial sector continues with laws and various rules and then the housing market starts to go gangbusters and here to talk about what was taking place is kathy the co-founder of real wealth network kathy welcome appreciate you being here what was going on with housing then regarding prices in particular up into the crash and with foreclosures cathy. i was a mortgage broker at the time and i can tell you it was very very easy to give anyone a loan i was shocked and i wondered and i kept asking who is approving this pseudo who is sitting in a boardroom saying sure we can give you a nina loan to no income no assets needed to anyone and so when you have an abundance of money that can be given freely to anyone without any background checks really no credit checks you're going to you're going to see people take that money and

into into fifteen of these that forty three third largest economy in the ward in terms of nominal g.d.p. ours are gap between them has increased from us dollar five forty three in two thousand and sixteen to us dollar seventeen fifty two in twenty eighteen we have achieved every g.d.p. growth rate of seven point eight six per cent inflation has decreased by five point four percent poverty rate has dropped from forty one point five percent in two thousand and six to twenty one point four percent in eighteen during the same period extreme poverty has decreased from twenty four percent to eleven point three percent. our foreign experience was us dollars seven point five billion in two thousand and eight two thousand and nine fiscal year. into a t eighteen it too grew up to even dollar thirty two why.

been able to to really get away with it per a while now yeah but you're looking at correlations of g.d.p. thinking of it as a normal country like in western europe i mean some people refer to the index you should be looking at in the christie production rail disbursements or even satellite danger of lights at night you're looking at the wrong statistic when you judge that debt to g.d.p. ratio that you're basing that on well you still you still a twelve trillion dollars economy it with a major impact on the global economy so if you're talking about two hundred to five hundred billion in tariffs china has already devalued their currency ten percent this year so they're clearly worried about something and that is having major impact on other emerging market countries that trade with china so it's a currency war that's come out of a trade war ironic that the that when trump announced more terror of the yuan against drop again dropped good for the chinese economy for exports well that is exact. this is one of their defense mechanism so every time that trump is thrown another measure they will

capital spending is about 30% of g.d.p. higher than it ever has been.hen you have that kind of equation you start to import goods in bigger quantity its. there has been a demand for the dollar as well. it has been going to long-term capital. so in the end it's looked at from that point of view that's not too bad a situation. of course, with like all of these elements to be temporary andes that why you have a central bank and a fiscal side as well. some of the elements come for reasons that are not closely -- juliette: with things such a divergens, how much of an impact is that having for opportunities? how worried are you at this point? jamie: well, higher interest rate environment would affect us. but i think all countries will be southeast asia look at each other from a competitive point of view. currencies will adjust to the changing circumstances to remain competitive. were our point of view we are a local economy. it's a really higher interest rate area that would affect us. the balance sheet, how it's structured, we're a philippine peso company. t

fair enough g.d.p. is growing ok. take a look at this chart. you can see g.d.p.quarterly basis has come down. 0.4% to the last two quarters year over year only about 0.6% and the p.m.i., the white line going down still above 50. purchasing managers, manufacturing. still signaling growth. you can see a bit of a down trend. i think that's why people are wondering, what's draghi up to here? could it be that he is seeing broader measures in inflation besides wages, besides other indications, growth getting strong enough? sure. that is clearly what he sees. that's what he says. but people are saying maybe he is also trying to make sure everyone is ready. everyone is set up for an interest rate hike by the end of summer next year. toward the end of 2019. unless trade war. he did raise the red flag on rising protectionism and is concerned it could take a big hit out of economic growth in the eurozone. i think that is one thing at this point that could maybe change draghi's tune just a bit the next time we hear from him. for now he seems pretty upbeat, optimistic, and on

doesn't necessarily have to contract globally but you're going to see the share of that g.d.p. shift from the as i said from the importers to the export is in effect and in terms of the world economy though is that is that a dangerous thing is that something that the world economy can absorb should we be worried by this. well it certainly can become a headwind i don't think at current price levels it has to be we just just recently we had a booming global economy prices were above one hundred dollars a barrel but i think every every extra dollar per hour you go you do start to cut prices and particularly in places like the u.k. where you have a fall in currency as well these things can get exacerbated and we are generally looking at a kind of stronger dollar environment so a lot of countries are facing a weak a national currency which obviously you can buy less oil with so sometimes these effects can be compounded and that can actually lead to big problems not necessarily for the country as a whole but particularly for consumers and consumer led economies just very very briefly

of four point two percent you know in europe the g.d.p. of two or three percent is considered a great success so you know i think this is commendable here but you think he said the state loses. in the streets in the history of our country. or is in laughable. i mean. it's a funny way to state it i think that. i mean i'm not too concerned i think that with trump we need to clearly separate trump's rhetoric from trump's actions and you know focus on what he's doing and you know if there are people who who don't like you know his rhetoric and his personality and you know that's that's fine and and maybe this was a case of that. shifting to domestic politics john how would you describe the current state of process for confirming a supreme court justice in the particular case of kavanaugh or in general in general and you could be specific in general i would say that it's absolutely horrendous and apparently getting worse i mean the situation with merrick garland i think is one of the great political tragedies of the past ten years and in terms

the g.d.p. began retracting during the third quarter of two thousand and eight and ended up negative point one percent for the year followed in two thousand and nine by a negative two point five percent. rate unemployment for two thousand and eight was seven point three percent but went up to nine point nine percent the next year home foreclosures jumped by eighty one percent in two thousand and eight up two hundred twenty five percent from two thousand and six as over eight hundred sixty thousand families lost their homes just in two thousand and eight and another two point eight million families received at least one foreclosure notice in two thousand and nine and for more on the impact we are joined by john grace president of investors advantage corp and henry ford which our friend the c.e.o. of straw mark it john thanks for being here both of you thanks for being here john what happened in the u.s. stock markets were generally overall not good but explain. well i started out good year two th

specifically with regard to turkey with this growing you know five point two percent second quarter g.d.p. it's a seven point one percent in q q one seven point three last year i mean those signs are great on growth i mean so what is it inflation or what else is the problem in turkey that's causing the lyric to dive so deeply. well i mean you know emergency emerging markets had a great two year rally in fact two thousand and nine to two thousand sixteen i think it's safe to say if you were in u.s. stocks you didn't need to be invested anywhere else however two thousand and seventeen we saw strong rallies in emerging markets across the board so there's it's just and area that has a lot of volatility i would say that turkey's crisis won't cause any emergency market crash like the way forbes put it with randy brown turkey's current financial crisis bears a striking similarity to the collapse of thailand's currency in one thousand nine hundred seventy which did ultimately lead to a financial meltdown across asia however you know we've seen the depreciation across the emerging market currencie

of course the work goes to chinese labor as this is one of the ways that china manages to keep its g.d.p. figures so good here in china but what is happening so is that a lot of these countries are finding themselves more and more in debt to china in fact the international monetary fund estimates that a third of african countries are now having difficulty meeting their repayments now china says that a lot of these countries were in debt to other lenders before china started giving them money but nevertheless there is concern that the amount of indebtedness is starting to weigh heavily on the g.d.p.'s of these various countries but of course there's another reason for having this gathering i suppose in beijing adrian is that china really wants to make more friends now more than ever. that's right these african countries represent a very important bloc of places voting bloc places like the united nations and of course at the moment with china embroiled in a deepening trade war with the united states it wants to be able to present a united front to be able to say look we have more than fift

europe the picture is a little more complicated the average is about eighty three percent of debt to g.d.p. but you have some e.u. members including big ones like spain and france that are one hundred or more and so obviously you have the basket cases like italy and greece so what sets this off eventually the bond markets are going to get wise to this and it's possible that a contagion begins in the united states or it begins in europe and spreads worldwide and policy of the central bank certainly in the united states has mishandled this badly in the last ten years did the previous administration with its anti growth high tax redistribution us policies aided and abetted by janet yellen in the federal reserve who kept interest rates artificially low and was very slow to unwind a lot of the extraordinary liquidity measures otherwise known as q e one two and three inside the united states are now central banks are woefully unequipped to deal with that next crisis because interest rates are still very very low but bad that there's nobody but surely rising let me just bring you to another possi