>> The Federal Reserves emergency action to lower interest rates to near 0%, the first
time since 2008 by the way, did nothing to prevent yet another Wall Street plunge today.
So this story has been updated since we produced it, the numbers are actually even worse than
what I'm about to explain, but the Dow Jones Industrial Average sank by 2,200 points at
the opening bell.
By the way, as we film this video right now, it sank to 3,000 points with the S&P 500 and
the tech-heavy Nasdaq falling by around 8% each, triggering a circuit breaker, this is
now the third circuit breaker, that halts all trading on the exchange floor for 15 minutes.
So the Dow has fallen nearly 6,400 points since its record high on February 12th.
And the chaos came just over 12 hours after the Federal Reserve unleashed a series of
crisis response measures, slashing rates to almost zero, injecting cash into Treasurys,
and announcing coordinated efforts with central banks across the world to ensure liquidity
as the coronavirus pandemic takes a hold on the global economy.
Now I'm going to go into this in an easier way to understand in just a minute.
But before I do I wanna go to this thought, this video of the president of the United
States during his press conference yesterday, this is during the coronavirus task force
press conference.
It's meant to ease nerves, let people know what the government is doing to help them
economically, but more importantly what the government is doing to help them prevent the
spread of the coronavirus.
He opens it with this juvenile monologue about the Federal Reserve.
Take a look.
>> For starters, they've lowered the Fed rate from what it was, which was 1 to 1.25, and
it's been lowered down to 0 to 0.25.
Or 0.25, so it's 0 to 0.25.
That's a big difference, it's quite a bit, about a point.
And in addition, very importantly, the Federal Reserve is going to be purchasing $500 billion
of treasuries and $200 billion of mortgage backed securities, and that number can increase,
but they're gonna start with that.
And that's really good news, that's really great for our country.
It's something that we're very happy.
I have to say this, I'm very happy and they did it in one step.
They didn't do it in four steps over a long period of time, they did it in one step.
And I think that people in the market should be very thrilled.
And that brings us with the strongest country in the world by far financially in every other
way.
>> So that was how the press conference began yesterday.
And I couldn't help but notice the facial expressions of everyone surrounding Donald
Trump as he's talking about the importance of the Fed rate.
Especially because it's had really no positive impact at this point on the stock market and
that shouldn't be the opener.
The stock market shouldn't be the number one priority in your press conference when people
are really worried about their health, worried about what this means for their families,
for their jobs.
>> Yeah, okay.
So the one that you were saying it has to be an easy way to understand it for folks
who may not know, right?
So if you start your press conference when you're talking about the health and the status
of our response to this pandemic, then people may tune in looking for some answers that
would affect them.
I get there's tons of people that are affected by what's going on in the stock market.
So I think I've underplayed that a bit in the past when I say only these top people
actually care or know, have a big, has a big effect on their lives has affected a lot of
people's lives.
But even the people who are like, middle class folks who have some stake in the stock market
when it comes to things like your retirement, and things like that, or just general investments
you have on a smaller scale.
Yes, that means something but it doesn't mean anything if you're dead.
So we see who he's addressing first cuz those are the most important to him.
We see the type of person he is, it's been that way since the beginning.
We're not worried about containing, or testing, or finding a way to limit a spread.
We'll find a way to make sure that we still have enough liquidity and money for the people
it's going to.
So that's where his interest is and he said we're still the best in the world among this
and everything else.
That's his focus.
He never not plays his card, never doesn't play his cards right out in front of you.
If you want to play poker, play it with Donald Trump, he'll tell you what he's got when he
gets when he's got a bad hand, he'll tell you.
So, check this out.
It's pretty good hand, right?
So this is how he approaches things and we've seen it over and over again.
So I get you're trying to do something you think is good news to start with.
But his cluelessness and departure from reality in real Americans, really shows here.
>> But yeah, he can't say everything about the crisis at once.
I know that part of a press conference, and in that press conference, and in other press
conferences he's mentioned, I wanna keep people safe.
But when you take the temperature of how often he should probably be saying I want people
to be safe and I want people to be healthy, he stumbles through that and he's not doing
it enough.
And it doesn't read as that's what's important, this is important to him.
He is the business president, everyone who for hundreds and hundreds of years has said
boy, we need a businessman in charge, and it's always a man.
We need a businessman in charge.
We need to see what happens if we run this company like a business.
Now that, and Donald Trump was that guy.
And he should know how to talk about this stuff.
>> Totally, I know.
The way that he was just simply trying to communicate what the Federal Reserve lowered
the interest rate to.
It was as if he doesn't know how to communicate these things at all.
So near 0%, 0.25%, that's 0.25.
What are you talking about right now?
We want to know what the government is doing when it comes to our overburdened, stressed
healthcare system, right?
Are we doing enough to stop the spread of coronavirus in order to prevent the healthcare
system from being so overwhelmed and overburdened that they literally have to make decisions
about who they can and cannot treat, right?
We have a shortage of medical supplies, whether it's gloves, face masks, respirators.
I'm sure you guys have seen those stories.
People want those issues to be addressed front and center, and he opened that press conference
with this news of what the Federal Reserve did.
And honestly, the Federal Reserve has exhausted their measures.
When it comes to stimulating the economy, and most people expected this outcome of not
really helping.
Because we're having an issue with the supply side, right?
Everything shut down.
So if everything shut down, people aren't able to go to work, people aren't able to
go out and buy things.
There aren't products that are being produced worldwide, because everything is shut down.
The Federal Reserve lowering interest rates is gonna do nothing to solve that.
>> In the history of American economics, when you lower interest rates then there's more
money flowing around and people are able to do more stuff with it.
And people have said ever since 2008 when we went to zero, we've slowly raised the interest
rate, but it's been, and you heard them use the term, near zero for years and years and
years.
Near zero is not zero, now it's at zero.
So it was always like, listen, everybody's got there, I went out to the gas station and
bought me some Spam and some vittles and I've got a mound on my table about this high.
And I can probably eat my way through it and feel pretty confident if I have a little bit
left.
But when I take that last Slim Jim out and I look down and I got nothing left, then I'm
gonna panic.
And that's what the market is doing because they know it's not over yet.
And they're looking at their supply of interest rate cuts, and it's down to literally zero.
>> Yeah, so at this one of the key parts of this article that stuck out to me, that's
one of their main things that they use when you want to cut it to this low.
Well, the main thing you use when you have an economy that's tumbling to a recession,
I think you guys already pointed out, so now there's no more options left.
And I love that analogy because it's sometimes, and these people putting those terms when
people see things, and real live situations like this, where they can see man, this is
the dire strait that we're at.
No, on top of that, let's not forget.
I'm not sure if anyone else has forgotten this part.
He's been demanding, begging, threatening the Fed for months if not a year, to drop
things to zero.
>> He goes after the wrong pole hard, yes.
>> Hard, they did it during the Obama administration.
Why did they do it during the Obama administration?
For different reasons than just saving your backside from embarrassment of the way you're
running the country.
So there is part of his giddiness, he's like finally, I have been asking for it.
He probably thinks in the back of his mind the Coronavirus came running, is spreading
across, everyone's in a panic, now we can finally get those Fed rates where I want it
so it can help me out.
Little did he know, that wasn't gonna work.
>> Yeah, what's amazing is okay, so he's only concerned about looking good for re-election.
And what has he constantly cited as the economy doing well?
The stock market, so once the stock market plunges, it hurts Trump in two ways.
First of all, his own personal wealth, right?
And I'm sure he's got money in the stock market.
But more importantly, he's got a lot of debt.
So lower stock, I'm sorry, lower interest rates mean that it's gonna be a little easier
for him to service that debt, but he's worried about re-election.
And one other thing I wanted to add to this is look, what's happening right now with the
economy is bad, don't get me wrong, but what this means for the future is far worse.
Because keep in mind that one of the biggest issues with corporations is that they're over
leveraged, right?
And what the Federal Reserve just did wasn't just lower interest rates, banks don't need
minimum reserves, meaning liquidity, money, cash, minimum reserves anymore in order to
borrow more money, terrifying.
>> Yeah.
>> Terrifying.
>> That's been, that's, they've developed these protections over time because that was
happening before.
>> Exactly.
>> Say, you have to have $10 in the bank to borrow $100.
Now it's like no, here you go.
>> That's for banks.
>> Yeah, and they're gonna protect themselves, that's the only thing.
>> So you think about, banks have that right?
I want you guys to go out, I mean, don't go out.
But imagine this scenario cuz you've been out before.
Don't go out and run around to businesses.
But go out and try to buy a car.
Go out and try and-
>> With no money.
And go to a Mercedes dealership.
When the guy runs up on you before you get out of your car, when you just pull up in
the front and there's three salesmen at the front of your car going-
>> Yeah.
>> And you get out, and they say what can I help you out with today man?
It's a slow day, what's going on?
What are you looking for?
What do you need?
And you go I'm looking for your most expensive SUV that's probably $150,000 and I don't have
any money, I lost my job.
I don't have any money, and you know what?
I'm not worth much of anything else.
>> And I have a lot of debt.
>> Yeah.
>> I already have a lot of debt.
That's, what our are currently.
>> Show me, I'd like to test drive it, now Jeeves.
You know what they'll say to you?
Get the eff off.
>> But you know what?
Honestly, that's the responsible way of doing it, right?
You don't give loans to people who don't have any cash, who have a ton of debt.
That's why you have credit scores.
Think about it in the context, though, of these massive corporations that are already
over leveraged, and we're doing away with any of the requirements necessary to determine
whether or not they should take on more debt.
>> Just about your metaphor like people trying to buy cars.
The government should step in for people who have bad credit scores to try to build that
up.
>> Right.
>> And that should be the way we're looking at it now.
Like Mom and Pop shops and people that are trying to struggle to stay afloat, but the
instinct of the government until now has not been that.
>> No.
>> The instinct of the government is like, yeah, let's take care of the big boys.
And that's what's so frustrating to me.
>> So one final part of the story that I wanna make sure we get to.
After the Federal Reserve cut the interest rates, there was a little tiny spike in the
stock market.
And Trump was so proud of that spike, that apparently he sent autographed charts of the
stock market out, okay?
>> Yeah, we've, >> So there's an example of it.
So, at the very end, you see like a little bit of a, let's go to the next screen.
>> It's a big tick.
>> Yeah, see that little tick at the very end?
That's what Trump was real proud about.
And that's why he gave out autographed copies of what the stock market was.
>> Yeah, I tweeted out a little video when he's like it's the biggest spike we've ever
had in the stock market record, record spike in the stock market.
And that's his tone deafness is deafening.
He's all absolutely trying to convince you that you should be over the moon with this.
And I get it, he's a BS artist.
But as we learn from how he describes what's happening in the economy, how he tries to
communicate the efforts taken by the economists who know more than him, he knows nothing.
>> You know nothing Don slow.
>> There's a reason why he ran casinos into the ground.
He doesn't know how it works.
He's like the guy who goes to Vegas.
I got these friends, they go to Vegas, and they'll spend $5,000 and lose it all.
And then on the last day, they win big, win 500 bucks and they go I'm back home, I got
500.
I said bro, you lost 4,500 overall, do you not know how this works?
You had this much money in your wallet, you came here and now you got 500 left.
I think you'd end up on upside down on this.
>> But you need to, but that's why TYT is so important because for years and years,
we've been talking about how the big businesses run themselves and how they're the true beneficiaries
of socialism.
They're the ones that get the big handouts >> Yes.
>> Donald Trump, this is proof, there's an in the LA Times, or in the New York Times
about the airline industry, and you can say what you want about the rest of it.
But it gives you some stats about, in the time when the airline industry Is making record
profits, and I'm talking in 2006 they were making like $500 million in profit.
And now they're making $7.6 billion in profit.
They're the first ones to say hey, I'm in trouble, give me a hand out, when in the meantime
they were doing what?
Stuff you've heard on this show millions and millions of times, stock buybacks.
>> Exactly.
>> It is literally what they were doing.
>> Yes.
>> And they aren't passing it on to their employees.
In this experience with coronavirus, I know flight attendants who have said that, when
the flight attendants want to put gloves on to protect themselves, the airlines are like
no, we don't want to freak people out.
>> Too late.
>> They prioritize the way people are feeling, guess what?
Those people are already freaked out.
>> Right.
>> Over the health and safety of their employees.
This is how the economy works.
We've been saying it for months and months, and years and years.
And this is where it bears out, the stock buyback programs that they underwent instead
of doing what they should have done.
And instead of Trump honoring the Federal Reserve as we have this 12 years of unprecedented
growth, saying it is time to raise the interest rates, we need some runway in case this we
say unprecedented 12 years ends.
We need to be making more arrows.
We need to be buying more Slim Jims to put on the table.
But they didn't do it, and now they're like, my gosh, it seems like I needed another.
>> They could have seen it coming.
I know we've been filibustering you on this, but there was a part, and this an NPR article,
they pointed out part of the problem with the stock market is that how many cities are
shutting down.
We know cities are shutting down, restaurants, and movie theaters, and entertainment venues
across the country.
Part of that is affecting the stock market.
Makes sense, right?
These are the business that are having problems.
So because of that, if you think about it, people aren't going to work.
Maybe your waitresses, your drivers, or whatever, they are having issues with their job and
their work situation.
They are losing out, so therefore the stock market is.
This is such, it highlights, it illustrates the moment so much that stock markets needs
workers, right?
They need people to work in these businesses, to prop up these businesses.
>> And consumers.
>> And consumers to do it so they can make it happen.
When they're not there, the stock market suffers.
Why is it that we're always helping out the stock market in a way, but we're obviously
just working, but that's helping them out, but when it comes the other way, that never
works this way?
As you mentioned, they hoard all this and bring it back in when it's something that
can be actually given to your employees and make for a much more robust economy.
But instead, we'll keep it to ourselves.
And when workers have a problem because of something like this, we're screwed being the
stock market and we just don't know how this could have happened.
>> Right.
>> It's a one way street when it comes to things that are benefiting the other and that's
the way it's always been.
>> You're so right.
There's no congressional debate about whether or not the Fed should do something to help
stimulate the markets, right?
There was no debate about that.
Whereas when it comes to the average American worker and what's going to be done for them
when it comes to paid time off, there's the debate, there's the concession to what Republicans
want, which is a giant loophole for massive corporations.
So they don't have to pay sick pay time off, all
of that.