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tv   Real Money With Ali Velshi  Al Jazeera  July 28, 2014 5:30am-6:01am EDT

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rooftops. i'm in mexico city. don't forget you can keep up to date on the day's news and all the developments on our website, live blogs, analysis, videos can all be found there, that is at al jazeera.com. ♪ it is a revival on the bayou, cheap natural gas from the fracking boom is bringing new jobs to old industry towns and creating new challenges, plus a shipping shake-up. how big changes at the panama canal could shape roads, bridges and harbours in america for years to come, and institution alibiers scooping up houses at barring -- institutional buyers scooping up houses at bargain prices are slowing down. i'm ali velshi, and this is "real money".
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appear hydraulic fracturing or fracking creates controversy, but creates an abundance of natural gas in the united states. that has caused u.s. prices to plummet. today oil trades at about 22 times the price of natural gas. in 2006 it was only about seven times the price, and that caught the eye of the global industry. energy companies like sassal in south africa and sempra in california are looking to cash in on cheap energy prices. that means new jobs and developments. to get an idea of how big the boom is you have to head to western indiana, where technology will be used in a complex changing the region. we have the story. >> reporter: at a pipe-fitters
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yard in western louisiana, matt brown is learning a new trade. the baton rouge native is one of hundreds who see opportunity in this remote bayou parish, where an industrial revival is under way. he's enrolled in a technical stool for pipe fitters. >> what brought me here was the works, two years ago. i came to get a job, i have a career path i'm on, and came to school to get certified and make more money. >> reporter: cheap natural gas brought on by a boom is reshaping towns like these in louisiana. the opportunities are about to get a lot bigger. a few miles down the road a south african petrochemical company called sassal is making a large foreign investment in u.s. history. in these empty grass fields, sassal is building a massive complex expected to bring 7,000 construction and 1200 high-skill
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industry jobs over the next five years. >> for each of the 1200 jobs that will be created because of our project in south-west louisiana, we estimate that six or seven other jobs will be created in the community to support those jobs - whether it's health care workers or restaurant workers. >> that is starting to reshape the region. >> there's not enough apartment complexes in lake charles, so what is happening in lake charles is the same thing that is happening in north dakota. camps. >> reporter: dozens of the camps are cropping up to handle a sas ol project that is so big it will close 26 public roads and cut into the uorate, which -- unemployment rate which hovers around 5%. >> now that energy dropped in the united states, it's opened up a world of opportunities that couldn't have existed otherwise.
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>> sassal's first plant will convert natural gas into diesel fuel. a technology advanced by nazi scientists. the second will produce etha leap, a raw chemical used in plastics and paint. >> together you have about $21 billion in spending, which is by far the largest capital investment in the history of our state, if it takes place, and one of the largest single investments in the history of the county. >> over the next 5 years 30 companies are expected to for $90 billion into dozens of petrochemical projects. keep in mind louisiana's g.d.p. is about $250 billion.
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all the developments on ou
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>> edge of eighteen coming september only on al jazeera america
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continues. it probably will not surprise anyone to learn that the u.s. imports more than china than anywhere else in the world. america imported 440 billion in goods - electronics, toys, shoes up 331% since 2001. here is what is interesting - for years most of the goods were shipped to the west coast and trucked east. panama has a multi billion plan to shake up the shipping world. it is expanding the panama canal, making way for the bigger ships and u.s. ports are scrambling to keep up. we have our report. >> reporter: is the 6.8 billion and counting the panama canal expansion is an attempt to reshape global shipping routes. a century ago president teddy
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roosevelt was instrumental in opening the canal. a short cut between the atlantic and pacific ocean s. today it is too narrow, among them the ships used to move goods from asia to the united states. 18% is shipped through the canal. panama hopes to win more of that business with super sized lots. >> joe biden joined the panamanian president for a look at the work in progress. >> the arrival of the new ships presents an opportunity for countries to transport goods more cheaply than ever before. it's a challenge for all of us modernize. khelleded to open in 2016. the new canal -- scheduled to open in 2016. it will be open to bigger ships, 25% longer and 50% wider than the ships using them today.
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they'll carry up to three times the count capacity of containers. >> there has been an arms race in the shipping industry. shipping lines are investing in bigger ships. we have to keep investing in bigger infrastructure to deal with the crate flows. >> more than 70% of container traffic is shipped to the west coast. goods heading east are offloaded for transport by truck or train. most of the shipments go to the east coast via the suez canal. some manufacturers will be able to save time and funny travelling to east coast ports like new york and savannah, georgia. hoping o attract the ships, port cities up and down the coast ever spending billions. in new york city, construction workers are raising the bridge to accommodate taller ships. in miami, port officials are building better trucking routes,
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including a 4-lane trucking tunnel and engineers plan to dig a deeper and larger harbour, extending eight miles into the atlantic. what promises to be a windfall for the east spells competition for the west. >> the panama is a threat, combined with investments in the american south-east ports. it's a competitive world in the port industry. >> some predict pacific ports could lose 10-20% of its shipments. to combat the threats, the port of seattle invested 1.2 billion through infrastructure in 2012. five million is ear marked for cranes and upgrades. los angeles, the biggest port, is spending 1.3 billion to protect market dominance. the suspending on both coasts may be a gamble. there's reason for optimism. with 1.5 million containers
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moving through the port, shipments are at a high. the fiercest competition sparked by the expansion of the panama canal will be between east coast ports, battling to steal market share. among the biggest winners is you, the american consumer. they are among the conclusions of a transportation and infrastructure special of the. he calls this a true feel-good story. >> for the american consumer and businesses, there's upside. additional goods that reduce transportation costs means cheaper agriculture. electronics in the stores, and cheaper input products for business, they can export those advanced industrial products to other markets across the world. it's a bin win. the real question is between the ports, is it a zerosome games. how often is that different versus global economic forces
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and trade demands that may flat line or grow at a certain rate. different to what the panama canal's upgrade that they are experiencing on the current infrastructure they have. >> it's great business for the panama cannes am, and remarkable -- canal, and remarkable saving for theships. we look at the north-west passage through the arctic. anything to get a ship to port faster has an effect the the bigger point is you see the big uptick if we see an increase in global trade. >> it's how much the u.s. can network with the world. we see over the last 30-plus years it's grown faster than g.d.p. it's a smart investment for the panay mannians. in the short run, five years, there'll be may scores, elected officials, country officials who may be surprised at the lack of
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results for the new investments. that doesn't mean the economic community will not be in a good shape. in miami, or jacksonville - it's a smart investment. some things are not changing. the big effort we are looking for is for americans to be trading, producing and consuming more. >> this is infrastructure, it's hard to put a return on investment. you see the upgrades. you mention savannah. miami, and the bayonne bridge in new york. but the fact is what is - who is really going to get the benefit from this early. norfolk has a report accommodating super ships. >> there's a few ports on the east coast that we expected to be open, when the canal opens, extended to 2016 due to construction and legal kerfuffle. we have new york, norfolk, miami with their new investment, and baltimore as well.
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savannah has been the fastest growing port. jackson and boston are winners. the biggest participation winner can be nimy. they have had great support. you mentioned in the opening video, interim enhancements on the dock side and the land side to smooth traffic in the community. and connect maimy to the rest of the country versus competitors. >> the single biggest winner is along the gulf coast. soya bean producers and other product may ship more goods south. again, feeding no the asian appetites, instead of being imported - this is an exports. >> you mentioned where a container comes off the ship and becomes a truck or railcar. let's talk about trucking and rail. there'll be people worried they
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are not going to ship goods from the west coast to the east coast. will rail prices become cheaper? >> yes, there's great coverage about how rail terms, the large class oneforms may look to -- class one firms, may look to lower the rates to carry more traffic across what is called the american land bridge. it's important to note that there's a concerted effort by freight rail to hold on to the longer distance business. the longer they haul it, the more money they make. rail will be involved, including the east coast, the longer travels have something for them. too much attention has been solely focussed on the coast coast to lose business. >> if you are not watching this or following the story, is this going to be transparent to consumers. different? >> we'll probably not notice.
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the best hope is a silent wind, $0.05, $0.10 off a product in the grocery store, making up these numbers. within reasons, consumer electronics. it will be unspoken. that will be the name of the game. there's a cliche that freight doesn't vote, you don't notice it until there's a problem. let's say the west coast strikes, the east coast from previously. in some ways you don't want to know about freight. for business it's a big deal, and understanding how smoothly the transactions can be made are massive, and especially for the opportunity for american exporters, having bigger amounts of good, whether it is grains to advance products to the growing middle classes in asia. the panama is a generational investment and we'll see a generation to see full returns. there's no question that the american economy benefits. >> it's great to point occupant the
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export opportunities. specialist. next - housing market starting to recover. investors are going elsewhere >> a shocking america tonight investigative report... >> you take someones hopes and dreams of childhood, and then out right steal their money >> wishing to start a family >> we lost over $20,000 trying to do surrogacy in mexico >> but left with broken hearts and empty pockets >> how much money do you owe people >> around $350,000 >> praying on the vulnerable >> i have nothing to hide, if i was a scam artist, i would have cut and run from here >> surrogacy inc. an american tonight investigative report only on al jazeera america
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>> we're here in the vortex. only on al jazeera america. after a brutal winter the housing market showed renewed life. the recovery is not as strong as hoped. especially with mortgage rates cheap, and a strengthening job market. new and used home sales are running behind last year's pace, we are on the road to recovery, and people, president obama, say institutional investors are to thank for that. in the last two years they spent billions buying up hundreds of thousands of distressed single family homes and turning them into rentals.
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now that the prices are stabilizing. institutional investors slowed buying. they are going else were. there's term it's caughting home price appreciation to slow down in hot markets. after double-digit home aprooshz in the last year, is it a bad thing. [ auction call ] >> reporter: this was the scene when dozens of institutional investors convened to buy up hundreds of single family homes in a single afternoon. >> sold subject to receipt of funds. >> reporter: since 2011 institutional investors spent upwards of $50 billion, buying 386 family homes. the home sales have declined. blackstone, for example, the
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largest of the institutional investors tells "real money," it's acquisitions are down 70% since last year. >> particularly in some of the hottest markets where the institutional investors started out. they are pulling out. >> reporter: there could be a downside for investors pulling back. when properties were sold, when investors stop buying, prices fall. we are seeing home price prooshzs slow down. the question is is that going to be a soft landing or will we see markets. the home price index shows that nationally home values have been appreciating since 2009. in markets like phone. hit hard by the foreclosure
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crisis investor purchasing is down 14% from last year when buying was at its peak. home appreciation values went from 30% last year to 6% in may. >> 6% home price appreciation is good. the question is how far will that fall as the players pull out even more. >> analysts say there are other factors to take into account for the slowing of home aprooshz. >> institutional investor interests is one of many factors to the broader housing market slow down, which includes higher mortgage rates and less affordability. that's the show for tonight. coming up next week on "real money" - jobs. the employment picture has been improving, but there's more behind the numbers. we tell you where the jobs are and who is hiring. that's if for me. thanks for joining us.
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[ ♪ music ] ♪ >> announcer: this is al jazeera. ♪ hello there and welcome to the news hour and i'm at the headquarters in doha, median unconditional cease fire in gaza as the shelling goes on. more palestinian children are killed and wounded on the festival of eat. the u.n. says the shooting down of a malaysia passenger plane over ukraine may be a war crime.