to the global economy with mike's concert for a no holds barred look at the global financial headlines kaiser reports. it's the secret incursion into the country. it's the invasion by means of. traditional language. that the bestie copied could be. are still unaware of what's going on in their land still ask noise. i don't know any but. more news today. these are the images.

from the streets of canada. today. please please. please. explain. what. it

was. these are the top stories from the week hidden civilian deaths in iraq emerge in the biggest leak in u.s. military history exposed suggest that washington turned a blind eye to violence in iraq the iraqi prime minister claims the timing of the leak is aimed at disrupting is efforts to form a new government. terror strikes the north caucuses as militants stormed the chechen parliament prompting calls for tighter security measures three people died and seventeen rangers before security forces managed to kill perpetrate. times lie ahead for europe after the announcement of government reforms the french promised new protests over a two year rise in the retirement age what british unions want of massive demonstrations to counter cuts in social benefits and jobs. and it's

a fresh start for moscow as the capital gets a new boss who's already laid out plans on how to change the capital. his top priorities corruption and congestion but later in the program we take a closer look at the new man and his promise. next though the consequences of the financial melt spread throughout the world in the last two years affecting all of us but what caused it in the first place well r.t. talked to those who claim to know the real story in the second part of our special report next. who had brought down wall street. hedge funds. back in two thousand and seven with the blues still in full swing my business partner e. o'connor attended this party just off wall street for traders under the age of

thirty. it reeks of affluence. shiny cars eating food people. only clubs where the sums can be invested in complicated vehicles in secret outside the prying eyes of wall street regulators soon all of the traditional investment firms have there is no wonder so many of these young people wanted in and at the top. and i personally spent five years in a private equity and then made the decision instead of going back to business school to move over to the public side so that was a conscious decision on my part i think most people probably get involved because there is an opportunity to move up the ranks and make more money at an earlier age in hedge funds and there isn't private equity which is the natural progression after a couple years in an investment bank program well if you're going to be in the investment

world the best way to a good investor the best way to make money is to have a hedge fund because you get compensated much much higher. hedge funds were being paid one percent of the assets and twenty percent of the profits in those areas so obviously that was the best way to make money if you were in a good insurance company a i.g. was a leading seller of credit derivatives so a bank for example like goldman sachs would create a c.d.o. it would stick all kinds of subprime loans and packages packages or packages on them into a package and then it will go off to a. and how did aaa rating the pristine credit rating and all that would say you know what you take this package of junk we've just created. kind of insured you know basically right default swap to basically credit and store it got a much better rating than we do so our investors will buy it from you what that will make money we make money everybody's happy former bank regulator william black

told bill moyers this was all deliberate this stuff the exotic stuff that you're talking about was created out of things like liar's loans that were known to be extraordinarily bad and now it was getting triple a ratings now aaa rating is supposed to mean there is zero credit risk so you take something that not only has significant it it has crushing risk that's why it's toxic and you create this fiction that it has zero risk that itself of course is a fraudulent exercise. and. listening to this crisis. made guarantees totaling more than your ability to pay an amount larger than the entire value of the company actually that's a bit of an understatement he i-g.

along with others who sold a rivet is and insured their policyholders to tune of an estimated five hundred ninety six trillion dollars compare this to the gross national product of the entire world and the problem should become more obvious so you were just gambling there possibly trillions of dollars. but i would refer to it as gambling with you know these these transactions were individually individually underwritten very carefully maybe i can provide some background see that might be helpful if they're very good with a. carefully underwritten how come no one wants to buy them how could a i.g. have possibly expected to make good on its promises one thing we know for sure he i.g. executives made huge paychecks selling these credit derivatives to hedge funds and others right up until the economy caved. so we don't need to fear hedge

funds i don't think it's a fair hedge funds i think hedge funds provide. a pretty intelligent investor base more savvy investor base for the market. for. the play the wall street used to invest in the american economy into things that used its money to produce goods and services but then wall street became the american economy our financial system was a reengineered through what's been called financialization with banks credit cards real estate insurance companies as the new power players. capitalism a sort of go off the rails it's ceased to be kapil it's financial i say shut the fact that it's now all about speculation the fact that it's about ponzi schemes and the facts about selling and buying paper from an economy of real goods real

commodities and real services to a system where people were buying and selling money buying and selling assets buying and selling other firms were no new value was created most sensor b. says the whole system has gone predatory i think we had a transition from what probably was afraid of market system to something now that is out of control and probably what i would define as a predatory system frequently in markets that are manipulated or the and about maybe a few out there who are investors mega. basters it's even even that's very difficult to tell we still don't know point factor is making money while so many fact losing money on wall street right now as business week noted what we're observing in all of its bizarreness is the ancient paradox of what happens when an irresistible force meets an immovable object the irresistible force in this case is the u.s.

economy the immovable object is a wall of debt that now can't be paid back we're in a position where the volume of debt market step corporate debt personal debt and even state and local debt is larger than the ability to pay the rise of a credit based economy the ruling disparity between. what is transferred from the middle class to the upper class and middle class watched it savings literally drop to nothing this spirit dollars the paying off. the upper class meanwhile think you down how to make money. how your accurately how to sell their dead promise to pay in the future. real estate expert ron silver men calculates the cost you are talking in recent years over probably every year transfers hungry.

dollars hundreds of billions hundreds of billions of dollars billions i said billions. from the pockets of the poor. who are far better. than their show called victims to go the upper one percent of the population own thirty percent of america's returns to well that is dividends interest and capital gains five years ago they'd raise their proportion from thirty seven percent to fifty seven percent and today it's. estimated that the upper one percent of america's population. it's almost seventy percent of the returns to. the percent seventy percent that's huge yes that is it's unprecedented it's essentially it makes america look like a third world banana republic. pocky

having to lobby the barrister. ironically bear stearns was also the billions of dollars they received in the bailout did not go into the company's cheer holders but to those to whom. it was a deal that ultimately saved the creditors to bear stearns by forcing it into j.p. morgan at the expense of equity holders michael hudson points out to both the homeowners and corporate america on how in hock to the debt machine many corporations are effectively in negative equity or in and technically insolvent position headed by the financial sector by the banks themselves really sympathy for the demonstrators in the bill. i don't know if there's a lot of sympathy per se to their point of view i mean we were you know in a similar similar boat so to speak a similar boat perhaps only one has life preservers the fact that the government

now is funneling money to a major bank and saying if you can do that with a bank why not do it with strapped homeowners facing foreclosure as democrats thank you. god was. crisis increases desperation signs hutchinson street is reaching more on the street in a battle for survival we are seeing a second class war in this country such as you've never seen in the entire history of the united states a classy. class war but except in this case the class war isn't the kind of war the marxist some socialist talk about it's not between employers and employees because employment is going to be shrinking. fourteen thousand employees would eventually be laid off by j.p. morgan chase it's a class war between creditors and debtors it's going to be

a fight between the financial sector and what's called the real economy the economy of production and consumption and the financial sector has prepared and position but so to come out on top by being able not only to foreclose on the property of bettors but to get a government bailout for all of its losses. because . employment is going to go down market they're going to shrink people are going to default even more on their mortgage debts on their credit card debt on their student loans so you're going to have an exponentially rising trend of defaults you're going to see a transfer of property from debtors to creditors a depression not only a depression but an economic polarization it sounds bad yes it's very bad.

the media was now out in force covering the protests many would not talk to the feeling that. there wasn't there were protests. to me when i tell so why do you think people don't want to talk to you because they hate you they think the media is part of the problem they don't think that you're going to help them thinking. what's the worst financial crisis in modern times. we was the media you would all this was going on. why were there so few naming those an investigation in what was to be common economic catastrophe things are only going to get worse i want to talk a little bit more you've been incredibly pessimistic august two thousand and seven marked the beginning of the end of an era what had gone up was now coming down.

foreclosures were up ninety three percent from the year before. in london there was a run on northern rock bank more bank write downs followed billions that few b.s. and citi group fannie mae the largest source for home loans reported a three point five five billion dollars loss for the fourth quarter in march two thousand and eight the fifth largest investment bank in the world bear stearns was on the verge of collapse many of the nation's most respected financial journalists are still getting it when i get my money out there no no no bear stearns is fine do not take your money i just really look at there's one k. boy other than the plus four hundred pairs turns is not in trouble i mean if any are more likely to be taken over don't move your money but that's just been silly don't be silly the media was complicit says dean starkman a financial journalist now with the columbia journalism review the business press

former colleagues of mine friends of mine did not really recognize and understand what they were up against how dramatically the way the world it changed the lending industry had changes things that you've kind of documented how out of control wall street had become and i think it's a real contributing factor tactic to to how we got to where we are today. even compares the journalists who cover wall street to reporters sent to iraq he said they too were embedded but in the corporate culture. the great panic of two thousand and eight is the equivalent for the bit business media what the iraq war was from that for the washington press corps is the national story of the last seventy years so the parallel is fair you could further extend the analogy a little bit to think about the idea this concept of being embedded so that the

press corps itself was sort of imbedded within a particular narrative. that has its origins on wall street i don't think that analogy is is out of whack at all. there was one more factor those few in the media covered because it was about the media about the infusion of nearly three billion dollars in advertising revenues from dodgy lenders and credit card companies between two thousand and two when the housing bubble took off until its crash in two thousand and seven. benchley an entire industry became predatory predatory like criminal. yet deceptive marketing and mass as a as a function of corporate it started in america and is now everywhere some say the united states has infected the world with a kind of financial aids. the

people who these mortgages was sold to. a large majority of these people were poor black people or that he know people in other words this was targeting minorities especially so this resulted in the biggest transfer of wealth from the poorest people in america to the richest institutions in the world i think that the majority of people. they feel that this is a problem for as you say this is this is a banking problem stock market problem this is investment problems for they are parasites it's interesting because it's a gentleman says things are much more controlled here but i got to a bank to get my house they really made sure of the body i think that america is heading for a really deep crisis of a whole before. you have a you have a deep ideological cultural division you're going to have i don't see that having

an ovoid mess of unemployment you have extreme wealth and extreme poverty and you have an armed population. that's not the case here i think what we're going to see in the united states i hope i'm wrong but i think united states is heading towards an abyss as the crisis worsened politicians family will go up to realize that the economy they had deregulated was imploding congress was finally being asked to act ironically the pitch was made by a republican treasury secretary henry paulson a former c.e.o. of goldman sachs in the years that that firm made massive profits in housing securitization and speculation. when this do so in order to avoid the continuing series of financial institution failures and frozen credit markets that threaten american family's financial well being the viability of

businesses both small and large and the very health of our economy the question would government intervention fix the problem or make it worse would it reward the companies that profited from massive fraud or would it lead to more fraud. treasury secretary henry paulson and fed chairman ben bernanke he began a push through what might be called the final plunder the real story was not widely known except. on c.-span on thursday at about eleven o'clock in the morning the federal reserve noticed a tremendous drawdown of the money market accounts in the united states to the tune of five hundred and fifty billion dollars we were having an electronic run on the banks their estimation was that by two o'clock that afternoon five and a half trillion dollars would have been brought out of the money market system of

the united states would have collapsed the entire economy of the united states and within twenty four hours of the world economy a shell shocked congress was given a c three page plan in essence it gave paulson total control to spend seven hundred billion dollars some saw it as a power grab others sold a deliberate creation of the crisis to push through a corporate agenda. to troll the media enough to ensure that the public will not notice that this bailout will and get them for generations what was unique was the refusal of congress to hear any testimony from expert witnesses or to have harry billion dollar bailout for wall street is being driven by fear not fact this is too much money in to short a time going to too few people while too many questions remain unanswered why aren't we asking wall street to clean up its own mess when we passing new laws to stop the speculation which triggered this why aren't we putting up new regulatory

structures to protect the investors how do we even value the seven hundred billion toxic assets why are we directly helping homeowners with their debt burden why aren't we helping american families faced with bankruptcy why are we reducing debts for main street instead of wall street isn't it time for fundamental change. that our debt based monetary system so we can free ourselves from the next grayson of the federal reserve by the federal reserve in the banks is that the united states congress or the board of directors of goldman sachs congressman poussin it's his remarks were not widely reported either they were still refusing to make new loans the oversight of paulson's program was criticized because millions could not be accounted for fraud is to seat and the essence of fraud is i create trust in you and then i betray that trust and get you to give me something of value and as a result there is no more effective acid against trust and fraud especially fraud

by top elites and that's what we have although all the facts are not in about who got how much and under what terms many in the public see the bailouts as a way to loot taxpayers as fraudulent as the problems they were addressing. yeah brought over to capitol hill for the summer of two thousand and nine the crisis had not abated unemployment continued to climb foreclosures to mount bankruptcies to grow markets to shrink firms to fold and tensions to tear apart families and communities i think you will see a bunch of people get died and get some prison sentences more importantly that the bigger question to me is will we see a structural change we go through blog bad recession while we waste our money struggling to rebuild the dod sustainable system that should have never been erected in the first place because new regulations were beginning to be put in

place trillions had been spent by government on stimulus programs these measures were clearly not enough so-called reforms often pump money into the very institutions that caused the problems the bailouts benefited the wealthy deficits and debt grew by the trillions it became clear that the structure of our economy has yet to be transformed to walk over the course or. in june two thousand and nine president obama announced new financial reforms saying the crisis was caused by mistakes. minute recognizing the government's inability to police wall street investor jim channels says his reforms are doomed to fail and it's a little bit tough because the guys who are the bad guys are one step ahead of the of the cops on the beat every single day for starters we need a full investigation like the one that followed the great crash of one thousand nine hundred twenty nine we need to know who benefited from one of the most

insidious crimes in history how did wall street's wizards engineer distance says and who is complicit with them who the big fish ever be prosecuted the media too has to wake up to shift the debate to include the need. the deeper change going to crack down on white collar crime since this is my film i get the last word this financial crisis will not be turned off like a light switch millions are struggling to survive as conditions get worse. for you to get your. tail. and everything. to the same level something. created there was all lot of partying there was a lot of backslapping there was a lot of extract a lot of extraction should lead to a major reaction. blunder in an age of major structural

change there have to be an age of protest and pitchforks first. to. food. banks talking. to. experts. we thought. this one shoe box loves. one.

easy. prime. time. on the company to. become the first of. its toxic assets. toxic.

dear mom i'm sorry that i had to do this i've been in so much pain in the past year that i can't take it anymore the stomach and chest pains have been getting worse and no doctor has been able to help me please know that i'll finally be at peace with no more pain i wish i could have had a life with it was a bit always pictured her being my wife and mother to my kids i love you all see you all in heaven when your time comes i'm going to meet jesus christ. thousands of u.s. troops in iraq received one of these drugs a drug called lariam and it may have prevented many soldiers from getting sick the question tonight is whether or not soldiers were adequately warned about its rare side effects serious life changing side effects.