guys are this is the kaiser reports you know markets are made up of rewards and then risks the problem is that over the past five years ten years fifteen years all of the rewards of been sucked up by a few people and in exchange they have all the risk on to the general population the result has been the widest wealth and income gap in generations and the violence in the street stacey herbert talk to me more about what's going on well max in my headlines this week social media and the rise of financial activism doesn't mean this is this is an article which is mentioning our crash j.p. morgan by silver campaign it also talks about eric cantona and his bank run campaign and it talks about how the rise of social media has allowed people who care about the financial crimes and financial crime wave going on around the world that we now have the ability to reach out to people all over the world victims all

over the world of these financial crimes and communicate with each other and organize you know when the markets are the risk reward ratio is becoming balanced you say and it's happening visa v the internet there restoring balance to this idea of economics and capitalism and markets and all of the disproportionate pilfering of reward and the disproportionate externalization of risk by the select few who are the oligarchs who control the core of the system on wall street by using proprietary technology and political connections that's being unwound on the internet and we're seeing a return to the mean and remember as you return to the mean you see more bankers on the sidewalk getting pummeled after they fall out of the or they jump out of the window as the article quotes you and says that j.p. morgan's quantz fail to plan for civic on. rest risk if the disgruntled populace

buy enough silver coins the metal traditionally seen as the people's money the price of silver could rise to a level where the bank would be forced into bankruptcy by short positions because regret at this moment we all the people of europe all the people of america many other people in asia and around the world are being forced into bankruptcy themselves because of these like the j.p. morgans derivatives positions you can make them go bankrupt and that that it's perfectly within the purview of the population to bust over and put j.p. morgan in the more it would be j.p. morgan and let me point out of something about the short position there's a lot of scuttlebutt on the web talking about the contracts comix contracts the open interest on these contracts and what to some firms in terms of the silver supply and how this relates to the net short position on j.p. morgan's books but let me add that yeah i also have to look at the reports coming out of the bank of international settlements and they covered the total global

derivatives market including items on the past as reports that point to precious metal shorts of which there are close to two hundred billion worth of these shorts and that's where the j.p. morgan's particularly pernicious liability since you've got to forensically dig into the numbers and you've got to really understand the macro picture you can't simply look at the one point of reference and make a faulty conclusion i might say well i want to look at some other financial activists or at least you know people who use the internet social media in a way to communicate to people. truth or facts that are being hidden by the likes of j.p. morgan or the federal reserve bank of america or the european central bank or the irish government. so first one is john williams of shadowstats dot com and i want

you to look at this chart he makes of the chew unemployment situation so you see the bottom is the you three number this is the number that the government tells us is the number of unemployment as you see it's just under ten percent the next level up is give you six number and this is reported by the government as well but they don't tell it to the media the media doesn't hype this up but that's the the broadest range that the government continues to count and that is up you know over fifteen percent but if you look at the real numbers if as unemployment used to be counted before bill clinton you see that it's over twenty two percent unemployment in america and this is as a result of there being no financial activist prior during these past decade financial activism it used to be called labor negotiations there used to be a thing in america called the union there used to be collective bargaining there used to be wages that were improving to keep pace with inflation and then. came

along and of course fired the air traffic controllers and the senate motion moved to dismantle the labor movement in america and so labor has unfortunately not kept up with the wall street crowd and so since we don't have labor or wages being fought for anymore it's come down to something new called financial activism yeah well actually i'm a little talking a little bit bigger than that because wages are like negligible people make what twenty forty fifty thousand dollars you know talk about the trillions and trillions and trillions of dollars of bad debts that were created over the last decade or two and because there were no financial activists and the social media merging in order to tell people what was happening and that trillions not forget about ten dollars an hour away john talking about trillions and trillions that your potential wrote and keep in mind that those all those debts have no function in the economy but just she. rate fees for the creators to create this enormous

spread in pay that's why c.e.o.'s of the banks on wall street get a billion dollars a year for a hedge fund manager and somebody who actually does a work for works for a living like a cop or a teacher gets peanuts but they create the debt not because they're trying to grow the economy but because they're trying to grow their bonuses salary and now the debts hanging there is no way to to internalize it and ben bernanke is not a complete loss and now they're at this point were things are blowing up financially speaking but you bring up these fees that takes me to the next headline because this is an issue that janet have a koli brings up in an interview she gave her c.-span following presentation she gave to the federal housing finance agency and the report was called repairing the damage of fraud as a business model but as you bring up fees all use this clip first this was a massive ponzi scheme and one of the characteristics of the ponzi scheme is that you see exploding volume and exploding revenue very rapidly and that is what banks

and investment banks saw this became a larger share of their revenue now in order to be able to pay all of that needed money from new investors to pay off old investors and those were the mortgage lending people who invested in mortgage lenders who were getting double digit dividends the fees and bonuses that were being extracted by people who ran mortgage lenders just look at angelo mozilo compensation as a case in point and then the investment bank says managers and employees were taking unprecedented salaries and bonuses then she addresses this issue that we couldn't have seen it coming right this is the excuse everybody is using so take a little look at this clip and crony capitalists are excusing this behavior today with a lie and that lie is oh well you know the rating agencies the banks they thought that housing prices were just going to continually go up but i'm here to say. that

no structured finance professional uses in the sumption of ever rising prices when they do an analysis it's just on its face ludicrous to ask you to believe that highly sophisticated people who wanted to get millions of dollars a year did all of their analysis based on the assumption that housing prices would always rise well let me give you some insight after working on wall street myself for many years after the thing blows up you always say nobody can predict markets but to get people out of the markets you know you can't predict which way things are going so of course the bankers are shall run the economy will say member the iraq war was sold the same way it's going to finance it we're going to predict that they're always going to pay for the invasion but this is a typical leverage buyout mentality of a broker is like we know how this really works we're smart we're we've got quantitative analysis right donna mr britling we know we know which way it's going now ninety nine percent of the time it blows up and then ninety nine percent of the

time the excuse is always well we never saw i would we don't i never knew you put always done it was the footage was used to blow up who looked at me when. i didn't think well of all these we couldn't see me coming there was one guy who stood out above all others he was the one that walked on water oh his majesty jamie diamond but when i met him you'll recall that was the time the congress was saying they might tax bonuses by ninety percent the banks still had to mark their books to market and they were all looking really bad and people were demonstrating outside of j.p. morgan's offices when i met with jamie he looked like he was falling apart he was just a basket case he kept repeating himself several times during that meeting he said that if we have to have you know three people in my office that's what we're going to do he was worried about the survival of his bank was very distraught at the end of the meeting he said i think i'll go home and have two martinis tonight instead of one and i thought you know if i were you i wouldn't even. be having any martinis

i've been hitting the gym i didn't say that to them but you really look distraught you know this is the kind of thing where you worry about people going home and putting a bullet in their heads yeah there's a lot of jump janet oh oh there goes another cracker hey you know but this is why i understand actually warren buffett bought into fruit of the loom which is an underwear manufacturer because jamie diamond has had to change his underwear like every five minutes that's what inspired him to that well then she she does go on to actually talk about j.p. morgan. basically manipulating many commodity markets from the gold market to the copper market and to the silver market she mentions our campaign of shorting silver now and i want this final clip to look at this a call or you know somebody called them and he was from georgia and he basically said he called for other friends of christ to condemn the people who took out the mortgages that they were the ones to blame for all of this and it was because of

the mortgage holders that the entire financial system collapsed and this is some of her response and yet it seems that people are being vilified in this country for the mere fact that they owe money and guess what being delinquent is not a crime. being foreclosed upon is not a crime going into bankruptcy in this country is not a crime. foreclosure fraud showing up in court with phony affidavits committing perjury that is a crime. and yet we are lionizing bankers and vilifying debtors bright i mean look . the banks committed financial rape so do you blame the victim of rape this was a premeditated violent financial rape committed by j.p. morgan now who you blame the victim or the rapist well this is why we need

financial activism is we need to work together against the banks there's not work against each other to enable the banks to continue to defraud us all yeah you would think that would be pretty easy concept for people to understand. things you are thanks for being on the kaiser report thank you max all right when we come back i'm talking with still otherwise known as the cool false who'll be talking to us about what's happening up there in canada state. issues that some of you are going to try to. work. again on the brink after a less than successful election in allegations organise calling organ trafficking and. hungry for the food we've gone to. the biggest issues get the human voice face to face with the news makers.

all right welcome back to the kaiser report you know not a week goes by when i don't get an e-mail from one of you in email address by the was kaiser reporter r t t v dot or you you send me e-mails all the time asking max what's up account of what's going on with canada people encounter i want to know what's going on with canada so we have nicole foster here in the studio back on the kaiser report nicole welcome back thank you very much for having me and i've spent a lot of time in canada call i have i lived there i've lived there for the last ten years i also grew up there so although i have. born in england i spent more than half my life in canada now couple questions first of all the canadian banks are viewed as rock solid and they did not have the kind of problems that other banks around the world have had during this subprime meltdown you know they had a big reform movement not too long ago and i guess to set the stage for having a lot better sound policies in place. are these banks as

bulletproof as we are led to believe not a tall and they're not that many of them there has been a lot of consolidation but there are not that many they're not highly liquid and although we didn't have subprime in the same way they did in america sort of lending five hundred thousand dollars to wal-mart greeters to buy enormous how that we didn't have that but we did have forty year mortgages with no down payment these were the people who were driving marginal prices in red hot markets like thank you for even now that we don't have that anymore we have thirty five year mortgages with five percent down which is still a pretty extreme situation from the point of view of offering credit the average house price in vancouver's over a million dollars so basically when that bubble burst that is going to have tremendous consequences for the canadian banking system ok so this housing market in town it is still at the moment you could characterize it as being on the upswing it's peaking at the moment i read it you're saying you're saying this today the

housing market is peaking and in spots like vancouver with million dollar shacks clearly and the mania you see signs of the mania if you will encounter to watching this right now right now are coughing up along there saying how dare you suggest that this market's in a bubble don't you understand work and then. the kind of mentality you see it that . this is what i gathered are you noticing this is well this kind of entrenched mentality absolutely this is the psychology of a bubble when you're in a bubble you can't see it for what it is so i find talking to people that real estate in canada is like talking to americans in two thousand and six there's this tremendous sense of to. nial and in canada there's this real sense that we're special when energy superpower our banks are fine these are other people's problems and i'm telling you they're absolutely not other people's problems we just haven't seen them yet our economy held up longer than the us partly because of the canadian dollars a petro currency and so we had we had a lot of support from from the oil industry into the end of two thousand and eight but nevertheless we are in

a massive bubble right now and there is going to be an enormous comeuppance canadians are terribly in debt more so than anyone else in the world really in terms of level of personal that people pay fifty percent of their income on average for mortgage costs in places like thank you for the seventy percent that is a very substantial fraction of income and this is absolutely a bubble not just in red hot places like bank hoover but i mean st john's newfoundland where there's the oil industry offshore or saskatoon saskatchewan these are places that never had any money at all but the prices have absolutely skyrocketed they've just seen parabolic increases and this is absolutely characteristic of the bubble now the bags the seams let me let me let me get your take on this it seems that because the banking system in canada it did go through a crisis. recently and they reform the system and they did offer a lot of consolidation there isn't really a monopoly in the canadian banking system they're allowed to for example very competitive so the fees one. is in charge in the canadian banking banking system

are quite high and this gives them a pretty strong revenue base but so what i'm getting from here is a. crisis the global crisis the global real estate meltdown it's just it's just for an encounter they did they didn't escape it they just it's just it's been deferred we are going to be playing catch up to the downside in the fairly near future i would think and what we've already seen in the united states and a lot of parts of europe most notably ireland these dynamics are absolutely coming to canada it's just a question of when i don't think it will be that long the banking system apart from . from it's exposure to real estate and there's also a tremendous commercial real estate problem commercial real estate we haven't seen that fall even in the united states yet it is absolutely coming canadian banks have also acted as reinsurers for in the derivatives market for a number of extremely risky things so i think we're going to see that in number of cases the buck stops with a canadian bank and we haven't seen the collapse in that he's coming in the

derivatives market yet we're still in the extended percent phase where we haven't seen price discovery and mark to market it is coming and when it does it is going to knock out the sports from under canadian banks just as much as it will other banks voters are also picked a trough to maybe in real estate a top to bottom what's your prognosis there what it will how much of a collapse you're talking about well i magine real estate falling and people will think this is extreme by about ninety percent on average which is a very i never thought a way shots later in post production you see me doing this a lot give you know it's a cheap effect i guess it's it's all very exciting so ninety percent yes ninety percent of the way you get to ninety percent fall in in real estate prices is imagine a credit collapse which is which is where we're going we're moving to a deflationary credit collapse so if your pool of buyers ends up being the people who can buy a property for cash do not need to borrow money to do this and who choose to use

incredibly scarce cash for that purpose at that time that pool of buyers will be extremely small and so you can you can get enormous price collapses when you simply undercut price support at anything remotely like current levels ok so the only holdout so far in this global real estate nightmare is god canada i just australia is still you know frothy too much to see keane's consternation but ok canada of the other is the banking system. is that it is the economy as reliance on the wall that what what dr michael hudson calls a fire economy. finance insurance and real estate is a lot of the g.d.p. based on all of the services and all the financing and and all of that coming into it so we see that whole domino effect once the right real estate prices start to collapse you see all the jobs in the mortgage service area the real estate all this it's a big domino thing this is this is yet to come and this is a similar situation and we're going to see in canada absolutely twenty percent of

g.d.p. is to do with home construction twenty percent of g.d.p. home construction i'm not i'm don't have the figures in my in my head for it's a sure snack and financial services but it is going to be absolutely massive and this is a huge overexposure to the very things that are the at the center of this financial crisis so absolutely can it is going to suffer in the same way that everybody else does with with the collapse of finance and insurance and real estate we do have a fair fairly large manufacturing economy but everything we manufacture eighty percent of everything we manufacture we sell to america right so when americans can no longer afford to buy our goods our manufacturing sector is going to take a massive hit as we've already seen with the auto industry and that is not finished yet by the way this is still in the fairly early stages of collapse ok kak canadian dollar supported in large part due to you know you refer to it just as a petro currency and we've got huge oil reserves in the form of the tar sands or

oil sands around that alberta i guess is concentrated in that area a couple of questions number one is a cost effective and is a loss of the u.s. export market and they get of and is this going to be enough to offset all the other economic problems and therefore is the canadian dollar is it also vulnerable the canadian dollar is going to be vulnerable for a couple of reasons the us dollar should show significant strength on the deflation of dollar denominated debt which will create demand for dollars so i think as the u.s. dollar shows significant strength the canadian dollar will weaken in comparison. partly because of the dynamics for the u.s. dollar but also because of a fall in oil prices and when you mention tar sands tar sands are essentially an arbitrage between a gaseous feel natural gas and a liquid fuel in the form of syncrude there's very little net energy gain in doing that you put in almost as much energy as you get out so this is what synthetic

synthetic yes but it was turning oh really comes from the what is it exactly top stanzas it's tar surrounding sand grains but you have to put a lot of energy into melting it to separate it from the savory sort of a well done drilling through rock and i find a reservoir of oil that i suck up i've got instead a geological formation which is a lot of oil is just infused into the crust there you simply it is you know going to pull it out you've just got a kind of a swamp of rock and oil you can either if you have a surface deposit you can scoop it up and take it away that way and then melt the bitching and off the sand or if it's a deep deposit you can actually pump the heat down and then pump the oil the liquid oil up as you have melted it down there so there are two different ways of doing it so there's heating that's a lot of energy and norma's about is the energy to heat it up and extract you're saying is these really is neutral or negative you know you get almost no more energy out than you put it very natural gas is likely to be

a more valuable fuel in the future anyway because conventional natural gas peaked in two thousand and one so using enormous reserves of natural gas to turn it into energy interests in the form of syncrude i think is is just completely ridiculous and of course you just run out northern alberta in the process and you have an incredibly water dependent process going on in a very water constrained environment where it could be oil sands at the expense of farming or ranching or even people living in some of these areas the water constraints could be so significant right that that is years that the water required to process but we're seeing. with global warming which some like to deny exist manmade global warming that of course that even the supply of water around the world is becoming scarce yes i mean as you get the melting of the glaziers you could actually lose the source for some of these rivers so what is now a water constrained area could become a drastically more water constrained area and what you do with tar sands you create

these massive tailing ponds that are so talk sake that birds that land on them never take off again what happened again to look at seems like a geological wasteland suddenly i mean i think a lot of people don't realize that over the past twenty years canada's gone from being kind of a hippie free zones of being a military petro google a well i wouldn't is not an exaggeration a bit but i don't i don't see its military being a particularly significant factor pretty much anywhere in the world but it has moved away from a sense of well public service certainly and and that but also the environmentalism that people once tended to associate with canada the kind of things that are going on in the energy sector out west are really quite horrendous fracking chemicals that end up in the ground water see it with so much in the way of chemicals and methane in the ground water that people can set their well water on fire in places in alberta there is a lot of exploration for for coal bed methane in b.c. we've already seen occasionally pipelines for coal bed methane get blown up by

people who seriously object to them which is not the sort of thing you associate with canada but i think there's a lot more of that coming in the future now is the sugars that. i don't eat sugar. well ok we have to cut it off there are actually a special kind of a special here on the car as a rhetorical fos and what's your website by the way let everyone know who wants to send you their opinion about europe about what's happening in canada please tell them where they can direct their attention but let me i'm just you know a guy in the middle of the web site is called the automatic earth which is that the automatic earth all one word dot blogspot dot com. we have a comment section it's at the very bottom of the page so you have to scroll down through what will be a very long post just go to the very bottom of the page there's a link that says post a comment so you can do that if you choose to do that right super walt call fos thanks again for being on the kaiser report you're very welcome all right that's going to do it for this edition of the kaiser report with me max kaiser and stacy herbert and i thank my guests nicole fossil the automatic earth if you were to send

me an e-mail please do so at kaiser reported r t t v are you until next on this is max kaiser saying buy off.

ston debate me is there and the u.s. senate expected to vote and ratification of the start nuclear arms const trees in the next forty eight hours it ends at mons of delays and efforts to a monday times which would have sunk the deal to reduce russian and american nuclear arms but signed by by presidents unable. to of the so-called bric nations cement trade ties russia and india secure a multi-billion dollar deals on a trip by the president but of that of. poland rejects moscow's report into the i proved plane crash that killed the polish president and ninety five others but aviation experts say the russian probe was open as. of next going

to show the king of these start treaty and paulson's should banning wiki leaks from i phones that and lot small from our washington studio. for the feel we've got. the biggest issues get voice face to face with the news makers. welcome their loan or shell well get the real headlines with none of the mersey we're going to live out of washington d.c. today the start treaty passed a key procedural vote allowing it to enter into the final stage of voting tomorrow we're going to speak with max bergman about the nuclear arms treaty between the u.s. and russia and what it means for our world that's the f.c.c. has voted on mean.