you know who it's endangering former prime minister john howard who had a couple of shoes thrown out of the middle boulder yes this is a video from recent john howard had on australian t.v. and somebody did the right thing by trying to hit it with a couple issues. so the other major story is going on right now around the world political analyst stacey her max well here is the headline bankers caused credit crisis for kicks bankers blew up the financial system for the thrill of it according to one british academic and a new book in blood on the trading floor waste sacrifice and death and financial crises dr paul crossthwaite claims that his empathy logical studies of investors and traders found evidence of an element of masochistic satisfaction in running up losses now you've told me that this is what you experience as a broker on wall street that's right there's a sadomasochistic there's

a masochistic element to dealing with the client some of them enjoy getting screwed you know roughed up by the broker and you don't see your best clients and in the case of wall street bankers they try to find pension fund managers these are the best they've got huge pure pools of capital and some of them like to get beaten up they go to permissive on the weekend they like to get you know hedge funds calling up during the week to get them to lose billions of dollars because they're sick and this is what is coming out now this is a crisis it's not about fraud so much it's about six psycho financial terrorist i've got a financial terrorist right here stacy that looks like lloyd blankfein to remax you know sly blankfein c.e.o. of goldman sachs easy financial terrorists now since these guys have been proven to be very ill and psychologically addicted to losing people's money what's happening in the foreclosure fraud stacey is knowledge is coming out now that for example a three hundred thousand dollar morgan. that they foreclosed on they get paid like

nine million dollars on a credit default swap because are pathologically trying to kill people it's it's an extension of the whole cost so this man as a whole cost perpetrator lloyd blankfein so i'm trying to think what we should do to him should we waterboard him how about waterboarding lloyd blankfein well let's look to the native american indian because this is dr paul cross that way in this book says that the modern credit crisis is the equivalent to the traditional native american practice of potlatch a ritual ceremony which the chiefs of rival tribes competed to destroy ever greater quantities of their own possessions as an expression of power and importance remember during the height of this crisis was when lloyd blankfein said he was doing god's work just suicide bankers or it's a weird cultural macho thing i can the can can destroy more than you can you know the psychology of these c.e.o.'s is the same as

a child ripping the wings off flies but i'm not sure what you really do with lloyd blankfein here should we waterboard oh well why don't you put it out to the audience and ask them i'm thinking decapitation i'm thinking do competition well let's look at what lloyd blankfein himself wants to do to the u.s. economy and speaking of destroying your own wealth goldman the fed needs to print four trillion in new money reflect what four trillion do not just print one point seven trillion last year just in march i think your mayo this year yes so they're they're arguing one of their analysts is arguing essentially that we need to create four trillion more in order to basically lower the cost of funds for them well this is all the central banks of the world lining up in a circular firing squad there trying to assure mutual destruction by a race to the bottom to see who can destroy their own currency the fastest as a. attempt to export of course in america there is no export except for maybe porno

and donuts well there's another suicide banker in america that citibank if you look at the next headline oh this is an outrageous story you in there listen to this story in the osama bin citibank suicide banker reveals trillions more in financial c four ready to take out major american cities so this is of course the headline written by yourself max but you're talking about richard cohen who is a former senior vice president and business chief underwriter with citi mortgage and he told the financial crisis inquiry committee that in mid two thousand and six i discovered that over sixty percent of these mortgages purchased and sold were defective because citi have given reps a warrants to the investors that the mortgages were not defective the investors could force city to repurchase many billions of dollars of these defective assets this situation represented a large potential risk to the shareholders of citi group but of course the

shareholders of citi group are always say jump to the suicide bankers right and remember now i think majority of citigroup is owned by the american people seventy five percent of it is and after richard bowen wrote this in a letter to robert rubin who was the head of citi group this guy richard bowen was fired and what's at citi do well apparently they increase the volume of defective mortgages they were selling to fannie mae and freddie mac. to eighty percent of all of their mortgages the martyrs they blow themselves up because they believe in this fundamentalist ideology of free market capitalism where the quicker and more whole aish asli you murder your fellow american and global citizen the bigger the payout the credit default swap and you would you still owe a lot of you know you didn't go out didn't go the way of bear stearns and lehman brothers and you know gee the spawn of the devils. future. she do yes.

len are you still active with the devils and lloyd blankfein into the room i'm sure what do you think some of the e-mail right now kaiser reported on t.v. are you sure we want to bore or decapitate lloyd blankfein next whig next show based on the e-mails coming from you i want to go buy a box cutter ready for the decapitation i mean if it took down the twin towers it can certainly take down lloyd blankfein so some email cards are reported r t t v dot ru next year we should bring in many macs thank you not even texan to do the waterboarding or the decapitation oh this is going to be so what is going on you know the g twenty met this weekend they did nothing to sort out the banking crisis and now let's look in the u.k. where they're introducing massive austerity measures to finance the bailout four of the bankers cable looks to avoid confrontation as he sets out banking vision so this is the business secretary of the coalition government vince cable who made

headlines around the world when he was able to identify all the fraud going on in what was happening during the credit crisis the the collapse of the markets and now at once he's in power of course as happens all around the world and all of our western democracies i guess now he doesn't want to have any confrontation with the poor fragile bankers because they're very emotionally upset about you know people pointing out that their crime wave and it's very upsetting to them and well they might take down the whole system again if if you don't stop making fun of them the bankers might be upset is that right yeah but you know vince cable and the politicians and the government and the economists around the world tell the people that you french people are ridiculous for for resisting austerity for resisting paying for the bailout of the suicide bankers that you're the one that has the problem vince cable goes on a confrontation now he doesn't inskeep. bankers might not like him in my thought

pick him for volleyball the bankers money not pick the cable to come to their cotillion. over you're not socially acceptable anymore poor vince but the biggest confrontation of all is of course with the united states because the united states is where harboring all of the suicide bankers they're also printing up all the money for the suicide bankers and we saw. right before the g twenty finance ministers met this past weekend germany says fed is headed wrong way with monetary easing so here you have in the u.s. timothy geitner in the congress you know alleging that we're going to say that china is the currency manipulator but here comes germany and says the u.s. is the currency manipulator this is german economy minister reiner brood earl he says excess of permanent money creation in my opinion is an indirect manipulation of an exchange rate so the us gets accused of the currency manipulation right

that's right the us has a world reserve currency they're manipulating their currency by manipulating the current the interest rate so there was interest rates not a free market functioning it's manipulated by the pull of bureau as it were the nazis that run the federal reserve bank with hank paulson as the himler of this current fascist takeover of america and germany is saying you know we've seen this before you can't let these criminal nazi types take over your economy trust us it's a bad idea and of course americans are like worms are free food stamps that you stole the money from the rest of the world just don't tell us how you get the money just give us the money well that happened to germany do the people don't want to know where the money came from they just one of the free food stamps they don't care where the government got the money they don't have the government killed people in afghanistan killed people in iraq they're going to bomb iran to steal the money from the they don't care this look the free money of the american people we don't you know we look at least tells us they're just killing they're committing

war crimes or committing genocide for what so that these fat trog apply to the suburbs to take a little triangle down a wal-mart by chinese made toothpaste. the german economy minister was actually talking not about interest rates but about money printing and the fed is expected to announce as you know goldman sachs is laying the groundwork for this was saying the fed should buy four trillion dollars and new quantitative easing new money printing you know goldman of course would say they would want for chile because they get the commission goldman gets a commission on repackaging all the bad debt goldman's got this this longer about going this slush fund this this business of dealing in crooked coupons crooked currency crooked securities insider trading insider mean market manipulation high frequency trading which is a goldman sachs scheme to defraud the american public to defraud the world and steal billions of dollars and they themselves admitted this member that caught the program was trying to cross border and they said they can use it to manipulate markets golems a self admitted larcenous stick a leech parasite islam came black regulator during yes no crisis referred to

goldman sachs and other banks collectively as parasites and like any parasite the parasite wants it infects the host a whole starts believing that the parasite is doing good it's like that stockholm syndrome thing so you've got like geithner or obama obama's become who is a woman who got turned around by the seventies liberation army patty hearst obama's like the patty hearst of our day the senate he's gone down there but you know attacking folks with a machine gun given to them by the crooks on the federal reserve and he's saying is that he's doing good this guy's kind of shutdown well that's all the time for we have on this part of the show stacy ever thanks again for being on the kaiser report thank you max don't go away much more state.

welcome back to the cause report time now to go to new york and talk with reggie middleton of boom bust blog dot com reggie middleton welcome of the kaiser report thank you all right now you write in a blog that deserves your zero interest rate policy is literally starving j.p.

morgan now this is the exact opposite of what most people would think explain that does it lowers the cost of capital to effectively zero if you lower the cost of capital to zero people don't respect the capital so you're not really making you know giving up the capital you simply loring the respect for the capital in the system. j.p. morgan is not making any money on this interest bearing assets so everything that is invested in it has a much lower return the common belief is that j.p. morgan can borrow money at zero percent and then invested at x.y.z. percent and they captured a spread that's free money but again there's nothing with the free j.p. morgan is not doing business because a capital is not respected and b. the economy's in adult rooms so there's we know where for them do business if you look at their metrics all of their conventional traditional banking businesses have been on a down trend especially anything interesting lead it or anything related to their

has been on down trend for the entire year young people understand that for the saver and the pension fund. holder out there if they're getting zero percent on their investments of course they are starving to death and the assumption as you point out is that the banks like j.p. morgan are in fact benefiting by this because they are borrowing and zero and investing at two or three or four percent making that spread but we are saying is that basically the j.p. morgans in the same boat as everybody else that they are literally starving themselves or burning the furniture to heat the house at some point that game is up and what happened j.p. morgan simply declares bankruptcy i mean what do they have to fall back on if they're basically committing suicide banking as i like to think of it j.p. morgan is a significant push in the fredric of this economic environment the us so. i think politically be very difficult for j.p. morgan to the bankruptcy never rule it out though because that's not what i do i look at things as they are not as i think they should be what's going that what's

going to happen no matter what guarantees the bad assets a copy purge from the economy one way or the other that's going to happen now what's going to happen sometime in the future now j.p. morgan has a huge derivatives book we know this and you've done some work on looked at this pretty closely how does their derivatives book look these days it's big j.p. morgan's the largest by far i have a q. graphic on my site that has the sovereign state of j.p. morgan where it has j.p. morgan with ninety six trillion dollars of so notion of the river of value and that outstrips everybody else when i say everybody else that's the entire world ninety six trillion notional value derivatives and people bandy about big numbers out there that the total derivatives books of all these banks are six hundred seventy trillion dollars and it's expanding is it contracting so what is that as a percentage of the total derivatives out there in the system there are a lot of technical division of guys who always comment you know notional value was

a nominal number you can't really use it but notional value does give you an indication of kind of party risk you know so if you know ninety six. of anything and you have it with another party you have ninety six dollars of risk with another party now if you take the market value of the fair value of the market value of j.p. morgan's to rid of is much lower but that is still a multiple of a good twenty something times j.p. morgan's tangible equity so you know there's a significant amount leverage there and they still want to risk that two hundred twenty something trillion dollars' worth of notional divider of exposure is spread around five banks five banks so there's absolutely no way in the world you know you can assume that these banks tonight hedge almost all the different exposure in the world with each other so if one bank goes down it's going to drag everybody else along with it because they simply borrowing the money from each other or borrowing value and risk from each other so j.p. morgan is going to say that the stock has

a book value does anyone know the book value as a result we don't talk about book value anymore we just talk about a kind of a. conceptual algorithmic value if certain conditions exist i'm a stickler on these terms such as book value. just to give you a quick overview of. how i look at things accountants in general they tend to make relatively poor investors because they. business activity ok they don't count economic value so in order to measure the value of something on the books you have to look at both the risk and reward so if you look at book value but you don't adjust it to the risk that was taken to create that book value you. have a very incomplete picture of what's going on. with that being said where those just for risk or not just the risk would be economic value and not just if it was their kind of book value either way most people have no idea what j.p. morgan's book value is because they like and not to pick on j.p.

morgan almost all the other banks have never come clean with the true market value with their assets you know the assets have to be mark to market in order to get a true value their argument for the other side is well we don't want to market long term assets to market because we intend on keeping them long term which is nonsense you know if they're worth what they're worth right now and if you don't intend on selling them then you don't and that's understood but the value is what the value is right so it's a misnomer to use that phrase book value as it applies to banks currently because none of them have any book value they have enterprises which are based on gaming the system and to that extent they're able to pay themselves bonuses but as an underlying viable business that does something constructive no there's nothing there let's move on to the foreclosure crisis and the mare america j.p. morgan of course essential to this new crisis again fraud being their principal business tell us about what the what the foreclosure pipeline looks like for j.p.

morgan so we get an idea of what their earnings might be or not be a company with no book value three months down the road be aware when you use the term earnings again the using an accounting term. not to pick on you because all of well i. understand that in a business model based primarily on fraud you need to have a separate nomenclature continue because most media and everybody else in the cells i was to use a kind. earnings that's the view ward from doing business that can be manipulated j.p. morgan and again not to pick on j.p. morgan and many of the other banks increase their earnings during the week quarter by releasing provisions and reserves for future and present risks. in my opinion that's a mistake the justification of doing it was that the credit metrics were improving margins but steadily but if you graph j.p. morgan's foreclosures versus j.p. morgan's delinquencies you see the lines start to whiten with the foreclosures lessening the event which is increasing despite the fact that may be decreasing

they're increasing significantly in relation to foreclosures what that means is that j.p. morgan is creating an extensive and increasing pipeline of better assets that have to be gotten rid of foreclosure and any time foreclosures or slow or stop that pipeline simply increases so the the countdown to let's call tarp two the second ground extortion of congress by whoever is the treasury secretary at that time probably jamie dimon. is on the on the table so what how many more weeks or days or months before jamie diamond or the new treasury secretary geithner is gone by then we'll be in front of congress threatening congress once again give us another future alien dollars are we're going to you know essentially declare martial law in the united states how many how many more days and weeks before that is the case i don't know if that's going to be a hard sell you would be

a political genius to go pull that off in my opinion but i don't predict the future person in my opinion is you know to be a lot lot less expensive. to simply let the insolvent fail than it would be to tempt tarp failure you keep talking about let's look let the bad credit collapse let the banks suffer the consequences look things fail i mean a sell is almost like you're living in america during of some kind of free market capitalism. something but we know that that's not the case anymore why is capitalism why's free market enterprise why is the market clearing mechanism in the price discovery mechanism the thing that built a country for one hundred fifty two hundred years why is that such an alien concept why are they fearing this is it just pure psych psychosis or are they just greedy well you have all of this in command or in charge and they don't want to lose their position which is perfectly understandable i mean if you and all of the good chance that you probably wouldn't want market pricing market price clearing through the market as well because you may be displaced with that being the case it's going to

happen over time because this. is too large so it's just a matter of how long it takes either you do a twenty year japanese and counting because japan is still sitting in the round of q.e. or actually engaging in it or you do a much sharper cliff which will be much more painful but which will bring true organic economic development and growth much quicker so it's just a matter of time and the. rate of descent and then sent the faster you descend the fed's us in but you have all got the issue. i can almost guarantee that there's going to be some type of disruptive creation seem to happen with bear stearns lehman brothers washing mutual cetera the issue is the problems of two thousand and eight are the exact same problems we have right now in the fourth quarter of two thousand and ten except for the fact that the government has almost perfected a lot of its liquidity injection methods measures and as i explained in illustrate

a little earlier with j.p. morgan the liquidity injection measures stopped much of the fall but did absolutely nothing to cure the problem and the only way to cure the problem is the pricing the proper pricing of the assets is sitting on bank and real estate and other companies don't sheets so so finally as we look ahead to this announcement this quantitative easing announcement that's forthcoming so basically based on what you're saying here is that if the idea is to get rid of the oligarchs and to return to some economic. system that is at least nominally democratic that number should be as close to zero as possible is that a fair statement i don't believe in a totally free market system because it's very difficult to maintain these sets of control so i believe that there should be some safety net and that safety net and should support conventional traditional banking in other words everybody who has every joe six pack in grandmother who has the money and see these should have that

amount protected same thing the pension funds etc. some of them can even stay in a position if they're putin enough to stay in those positions from a financial perspective but no bailouts no safety nets for you know financial corporate america you know you sink or swim on your own abilities with that being the case much of the a showing that they cannot remain in that position which is why the government came in and build everybody out to begin with but no the big man the little man the light on their own you know you have a big wave there in the swimmer drowns be just as simple as sound you know. i don't buy it reggie i mean sounds like the u.s. having somebody else try to do that you're saying give the oligarchs a little bit of room you know the us gave asylum bin laden a little bit of room also in afghanistan when that didn't work out too well either so i'm not sure if you give the oligarchs any any room but this is when this announcement comes out in terms of the quantitative easing we'll see how that plays

out hope to have you back on but thanks for being on the kaiser report reggie middleton let me just one quick correction i'm not saying go drugs any more room to give everybody else what do i get the everybody gets very just that that said i'm in favor of it arcs having some power ok so you know no it's not what everybody every every every everybody gets the same five feet you know what if you could do five if you do with it all dogs don't get less than five more neither does but you middleton neither does max kaiser and who survived the five he survives really does it does it well i mean that you're counting there in terms of accounting for all these people getting five feet and ending up with some being oligarchs and others not it sounds like you've got some quantitative analysis from mit working there in the back room to come up with some algorithms to demonstrate how this is possible to create you know three hundred sixty degrees out of a twenty degree you know obtuse all right anyway we got to go with thanks for being on the kaiser report ok you're welcome and that's going to do it for this edition

of the kaiser report with me max kaiser and stacy herbert and i want to thank my guest reggie middleton if you want to send me an e-mail please do so at kaiser reported r t t v dot ru until next time this is max kaiser saying by you know.

a fresh wave of strikes in gold but the majority are fast becoming tired of the costly disruption particularly after retirement reform getting parliament's approval anyway. as countries struggle with huge project costs the governments of the largest states become a pain for the problems of smaller nations and call for amendments to the lisbon treaty. a new arrest in an f.b.i. sting of homegrown terrorism in the u.s. and criticism of the agency's entrapment tactics catching the wrong people. and also sending too much junk mail might put one man in jail russia's investigation into one of the world's biggest spammers on the run and slashes circulation of e-mail ads by one face.

in central moscow this is the francis sing another day of disruption and another crippling two hundred million euro loss for its finances the pension reform people have been protesting against has already been rubber stamped and it seems the tide is now turning against the unions who've been paralyzing the country's economy caterina's are of a has more than saving face the french trade unions are still taking people to streets despite the fact that reform they're protesting against is a given still angry french citizens say the show must go as ordinary persons look on drinking their coffee and mineral water members of trade unions and students continue taking to the streets just outside the french senate protesting a reform that is pretty much already guaranteed to.