저자: Economic Collapse News · 외국인
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welcome back to the show employers added a seasonally adjusted 287,000 jobs in June for the strongest job growth in eight months nearly every sector of the economy added jobs a far contrast from May's catastrophic numbers to get his take on that Peter Schiff is on the show he's the CEO of europacific capital I first asked him if the June jobs report actually indicates May's jobs report was an aberration here's what he had to say well to me probably June is more the aberration because May was more consistent with April both of those months were extremely weak and I'm very suspicious of the June number we'll see how we revise that next month you know we revise down the May number when we got this number but again even if most of the jobs end up holding I still don't think it validates any kind of legitimate recovery because a large percentage of those jobs are simply you know conjured out of thin air during using the birth death model where the government simply assumes that jobs were created by businesses that they believe started up but also if you look at the demographics all these jobs went to people 55 and older younger workers 24 and under net lost a tremendous number of jobs in June and of course the jobs that we did create were very low paying service sector jobs part-time jobs we continue to Hemorrhage full-time jobs higher paying jobs the kind of jobs that that can support a family and instead we replace them with these low-paying part-time service sector jobs so it is not a good sign for the US economy so you're still concerned about the types of jobs that are being added and and you can certainly argue that the pace of job creation has slowed since the winter I think we've seen a trajectory downward since about February but is it the kind of pace that really signals a possible recession uh Morgan Stanley's Chief Economist Ellen zentner told the Wall Street Journal that to the contrary this actually looks more like a graceful slowing into a lower channel of job growth and that um this is normal at this late stage uh of the business expansion I mean does she have a point there now I don't think so and unemployment is not a leading indicator it's more of a lagging indicator it's when employers are surprised by a downturn in the economy that they adjust their payroll so the fact that so many employers don't perceive just how bad the economy is going to be doesn't invalidate the fact that either we're already in a recession or a recession is going to be starting very quickly and once employers uh figure this out then they're going to be trimming their payrolls I think rather substantially and so as the recession progresses that's when you're going to start to see big layoffs in in fact normally layoffs continue even after the recession is over but this recession is going to last for a long time I think it's going to be longer lasting and deeper than the recession that we had in 08 and 09 which we call the Great Recession so again I'm not really sure what we'll call this one the greater recession uh but it's going to be worse well what about wage gains I mean that's been a point of concern over the past year we want to see those wages go up but in recent months we have seen them uh start to move upwards and in fact in June average hourly uh wages Rose 2 cents an hour to $25.6 and many would argue that indicat employers are finally beginning to to compete uh against each other to attract candidates uh that the the labor Mark Market is tightening I mean what's your take on on why wages have gone up well first of all they're not going up very much that was still below estimates and and prices are also Rising so we do have inflation uh coming back and so wages are rising as well as prices but real wages are still not in fact going up but you do have some mandated minimum wage hikes that have been taking place throughout the country and since so many Americans now have minimum wage jobs those mandatory increases are going to are going to filter through into these numbers but as employers react to the higher minimum wage by laying workers off this is going to begin to bite in fact I'm sure that's one of the reasons that you're seeing massive layoffs for workers 24 and younger because these the workers that are most impacted by a hike in the minimum wage because they have the least amount of skills and therefore they're the they're the the people that are going to be laid off first as a result of increases in a minimum wage and of course it's going to be increasingly more difficult for younger Americans to get their first job because the government is pricing those jobs out of existence and Peter in the last fed uh minutes we learned that there were two things the Fed was really waiting on to make their determination to raise rates the outcome of the brexit vote and the jobs data we now have both so given the full picture I mean what kind of assessment do you think we will get out of the FED at the end of this month well I don't think the fed's going anywhere again as I've said since the beginning since the first time the FED raised rates in December I believe their next move is to cut rats and they weren't really waiting on anything those were just the excuses the Federal Reserve can't admit that the economy is too weak for an additional rate hike so they have to keep pretending that they're contemplating actually raising rates and so they have to make up some excuses as to why they're not doing it right now and while they're waiting for some other data to come in but it really doesn't matter what the data is because it's never going to justify a hike they're always going to come up with an excuse why they're waiting meantime the next thing they're going to do I think is go back to zero in fact they may not stop at zero they may go negative and I do think they're going to restart quantitative easing because I think we've got a much bigger bubble on our hands than the one that popped in 2008 and I think the Federal Reserve finally notices recognizes this and they know that this bubble is too big the pop and say they are determined to blow air into it indefinitely so you think that at this point the FED is looking for more reasons not to hike rates rather than to hike them oh absolutely I mean they tried to hike rates in December and it was a complete disaster uh and so they don't want to do that again well the question is I mean how does the FED handle inflation at this point we know they've said time and time again that they're looking for that Target rate of 2% so how do they back themselves out of that corner because we know the FED has to be concerned about protecting its credibility right well they have no credibility and they can't handle inflation you know it's the opposite of Teddy Roosevelt when it comes to inflation they speak loudly but they have no stick at all and because they have no stick that's why they have to talk so tough they continue to pretend that if inflation ever were to rear its ugly head that they have the tools to reain it in but no they don't because we have so much debt in the United States States particularly the government and the FED itself and the debt is so shortterm in nature uh on the the federal level that any meaningful increase in interest rates would bankrupt the country uh would collapse all the big banks that were bailed out they would all fail uh the US government would have to default on its treasury debt so the FED can't raise rates but it can't admit that so it pretends that if inflation you know picked up that they would do something about it but they will do nothing about it it doesn't matter how high inflation goes 2 and A2 3% 4% 5% doesn't matter the FED will stay at zero or practically at zero they will never try to reain it in because if they ever tried they would cause a worse financial crisis than 2008 hello hello all right we're here we're on air right now I'm sitting here with Ed Harrison we're talking about European Banks as I mentioned the footsie 100 is up some 20% since February lows despite the uncertainty surrounding the country's recent decision to exit the EU but not every sector is winning in that equation in fact one of the sectors seeing a lot of pain is that of financial services and that's reflected across the board actually in Europe where banks are facing huge losses that's exactly what we're going to talk about right now Ed I've seen some pretty scary charts um from Deutsche Bank um regarding stock prices and credit default swaps is this whole Euro bank crisis a real thing I think the answer is probably maybe is the best that you could say that uh my Mantra is is to prepare for the worst but expect something much better than that you know usually I say prepare for the worst expect the best but in this case I don't think that you can expect the best I think that what uh what they're pricing in with Deutsche Bank both CDs and the share price is the optionality value that is is is that shares are a residual claim on on profits and CDs is really an option value to you know if this company goes bankrupt then we get made whole so in both cases you're talking about option values and what's happened is is is that the bad scenarios have become much more prevalent in terms of people's thinking tell us a little bit more about the CDs CDs why is it so significant and what is deutsche's CDS saying right now yeah so I think that it's not really saying that Deutsche Bank is bankrupt or it's going to go bankrupt but when the credit default swaps rise what it means is there are more people who are concerned that what used to be considered tail risks uh things that were likely to not happen are now going to happen so when you see it going up what it says is is that scenario bad scenarios have become much more prevalent in terms of the probability of outcomes and people are afraid of that now you get these huge spikes up and then they come straight back down which shows that really it's just a panic but what we've seen in the CDs chart for dche bank is is that they've been going up steadily that behind the scenes that completely unrelated to brexit what we we're seeing is is is that people are upset about where deche bank is headed and a lot of it has to do with residual litigation claims against Deutsche Bank uh their huge derivatives portfolio book and their exposure to other other Banks like the Italian Banks yeah I was going to ask you I mean what about Italy because that is what everybody is talking about right now isn't that the real problem area yeah so that is the real problem area the Italian Banks basically I mean if you look at the Italian Banks there was a report in Wall Street Journal last week it said that bad loans as a percentage of loans in Italy are 177% of the total now it's worst in 2008 it was 5% in the United States and right now it that number number 17% so almost 10 times the number of bad loans in the United States so there's no way if all those loans actually went bad that any of those banks are solvent so you have solvency concerns about those Banks and then the question becomes uh how do you recapitalize them right and to what extent can we blame brexit as you mentioned I mean we can't really put all that much blame on brexit because we know this has been happening for a very very long time and we've seen the markets sort of come back so it seems like they're even minimiz ing the tail risk of of brexit what are your thoughts on that so you know the markets are totally separate they're looking at the upside versus with the Italian Banks they're still in the doldrums and I think that really what's going on with the Italian Banks is is that when brexit happened what was a problem that had been festering already became a bigger problem because there was no ability to go to the private markets and actually recapitalize these Banks so the the whole construct in Europe now is is that before public money gets used to deal with any problems whatsoever a private money has to be used that means you have to recapitalize these Banks and then bail in investors that is uh debt holders and potentially deposit holders and so you know these banks have been slipping in terms of their in terms of their share value and when brexit happened they slipped so much that people now realize that the only way out was bail ends there were going to be there was going to be no private money coming into these Banks and that's the exact same thing that we saw with Deutsche that's why Deutsche is in is in trouble as well so now we have to deal with is the the bailin mechanism that the EU is so keen on actually going to happen so it may have exacerbated some underlying issues um what's your perspective on why the whole Italian banking system is is under Fire right now I think that it's under Fire because of the the real economy basically you have an interaction between the real economy and the and and the capital that is that ever since the Euro started the Italian economy has been growing so incredibly weakly that uh as a result bad loans have been piling off and when you have a capital base which is is uh very minimal and can't be and these Banks can't be Rec capitalized they're not going to have any loan growth and so the two sort of feed upon each other and they lead to a problem where bad growth uh in loans leads to bad growth in the economy and vice versa so what's your sense on The Crisis crisis no crisis what are your thoughts my feeling is is is that if you had to call if I had to call I would say no crisis I think that uh this will pass but the problem is still there and it's not going to lead to a crisis yet maybe down the line maybe down the line all right
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