we'll. bring you the latest inside stanford from the floor. we go into the future. you're watching our t.v. main stories we're covering some forty four people are killed as a passenger plane crash lands in northwest russia trade survivors are hospitalized in critical condition bad weather and airport systems failure are among the first theories of course of the church. claims of more civilian victims in libya after freshening term bombing at least fifteen reported dead children from an airstrike west of tripoli and comes just a day off we have now it's good to use

a good naming of weapons malfunction. and the prime minister of greece is facing a crucial confidence vote on his recent shop with the government the outcome couldn't terminal the push through a new austerity package to secure another much needed injection of cash from you. now max keiser and co-host stacey heard it ask what effect the mountains of debts can have on the nation's self-esteem because a report is next. i am backscratcher welcome to the kaiser report as we have been reporting financial melt. made the world uninhabitable for capital and so now we live in a financial no go zone you are slaves of the talks that have been created

a fall in which we are mr wealth and little of the talks loach slow cheap station herbert tell us more max well i have proof of this not only the revolution happening in greece but we have the financial propaganda to convince you the sleeve of this toxic debt farm to continue incurring more debts. one better self-esteem saddle yourself with mountains of credit card debt new study claims yes being encroached under a mountain of debt is typically frowned upon max but new research has suggested this could actually be a dream scenario for many young adults it claims those saddling themselves with credit card debt will feel empowered and feel more self-esteem oh let me guess this research was financed by j.p. morgan chase. perhaps but the research was actually conducted by rachel dreier an

assistant sociologist at ohio state university and her study found that eighteen to twenty seven year olds who had huge credit card debts not just small credit card debts but huge ones and university loan debt remember this is another scheme they're pushing on us around the world this incurs huge university top up fees and you'll be happier well according to her study that these people are a generation ago or two generations ago the word work implied accumulating savings but now the word work means accumulating debt so what they're saying is you young people out there who are entering the workforce if you work really hard you will accumulate massive debt we think that is propaganda it isn't the whole orwellian war is peace type of newspeak well i think max is actually a post work environment we're no longer creating wealth we only have toxic debt

derivatives to pass back and forth to each other so in this world you have to come up with a new paradigm of what makes one happy and that in the study she claims rachel's wire claims that young people saddled with huge amounts of debts also felt they were more in control of their lives but especially those in the lower economic club . asses so the results show that those in the bottom twenty five percent in total family income got the largest boost from holding debt again it's new speak in other words are saying that if you have huge debts you have more control in your life what they meant to say was if you have huge debts we are in more oh control of your life that's what they meant to say that's what they meaning is you lose control they're in more control well she claims the more debt they held the more debt the bottom twenty five percent holds both education and credit card debts the bigger

the positive impact on their self-esteem and mastery but it again like we talk about the the sickness the mental illness of american society where these people literally the more debt you have in reality the less control you have the less options you have look at those people stranded in america because they have negative equity and they can't pick up and move because they can't sell their property they can't get rid of their home mortgage and the same thing with people with huge student loans they can't take certain jobs they have to take specific jobs for the military industrial complex for example but once again language has been usurped here and they talk about self esteem but what they meant to say was narcissism this huge debt fuels narcissism narcissism is not the same as self-esteem suffer esteem comes from saving money and then consuming based out of

savings narcissism is spending money don't have to consume stuff to pursue your own vainglorious narcissistic ends well let's apply this to societies that large because the first study also conveniently finds that the richest people the richest ten percent of americans feel no benefit from debt lo and behold because they of course have cash and wealth and. resources they don't need fake self-esteem how does this apply to for example wall street is this why they're so miserable and take so many drugs that are so destructive because these guys make a lot of money they're making tens of millions of dollars a year and yet they hold trillions in debt trillion six hundred trillion in credit derivative debt and yet look how unhappy they are they hold trillions in debt for other people over. other people's money or the case other peoples that opi de best

wall street lives day to day well this rachel to fire she also does at the end of her report on her study said that we found that the positive effects may wear off over time but they still have to pay the bills the question is whether they will be able to there needs to be additional research to answer this question positive effect wearing off of this case would mean either prison or. yeah i'd say that that qualifies as having a positive effect to wear off well i'm going to cut through to some footage here you can see in the parliament square in greece this is research for reasons why or she wants to know whether they will be able to pay off their debts these people and whether there or not they need to have additional research to find out what happens when they count pay off their debt this is kind of what it looks like yeah well once again language is being abused or they're saying or talking about the people and their debt it's not the people's debt those people don't have the debt the

bankers gave them their debt. they're suffering from other people's debts it's not their dead that's why they're having a revolution it's the global insurrection against banker occupation part of the i'll blow your part of it i'm going there are a part of it i've got some good news if rachel dwyer is correct in that you know more debt will make americans happy well i have a headline that suggests it might be looking for. very good for their self-esteem soon china migrant workers clashed with police for a third night a thousand protesters set fire to cars and damaged government buildings last weekend you know the city in china's manufacturing heartland of you so these are the chinese workers in china working for slave labor wages in order to feed americans who are just sleeves on a death farm with cheap plastic goods and they don't look happy they look like they want to make some more money that might mean the americans actually have to start using more of their credit cards at wal-mart or the store to see the usually

spruces up people's feelings and you know themselves you know but the thing is the prices are going to continue to go higher so americans should be very very happy their self-esteem should be booming you know forty two percent of all new jobs in america are low wage so they're going have to resort to credit cards and apparently that makes you happy but. now the downside of this your happiness your self-esteem is going to be denied to you by h.s.b.c. h.s.b.c. says well run down u.s. card business buyer not found so c.e.o. of h.s.b.c. the largest bank in europe said he was upbeat in the medium term on the economy in the united states but the card business there did not make any strategic sense well . yeah yeah well so obviously max keiser the h.s.b.c. was the very first bank to pull out of the u.s. mortgage market in two thousand and six two thousand and seven household financial and now they've been trying apparently to wind down their business first they've

been trying to find a buyer for this business because they do not want exposure to the american consumer they want to expand their exposure to the asian workers striking and protesting and rioting in china right there trying to aggressively get out of the u.s. market because they know that with no jobs no savings you eventually the credit card business will collapse including visa master card that's correct and i would also note that h.s.b.c. is there for denying americans the right to life liberty and the pursuit of self-esteem. is calling out all of their lending facilities in an america yes and we're also moving the bank apparently to asia you know they're going back to their asian roots ages b.c. you know what they're getting out of the entire western model going east you know that should be a lesson to everybody watching the show go east that's where the opportunities are but let's look at an example max of what happens to americans when they get cut off from this debt stream this new debt that h.s.b.c. is no longer willing to supply these people with let's move to europe remember i

said let's compare american citizens to what the european countries are like ireland goes dumpster diving on sea floor looking for cash so cash strapped ireland resorts to selling sea cables for scrap copper is now selling eight thousand euros per ton and there are many cables that been laid down off the sea. ireland for the last hundred something years and they're going to go dig it up and try to sell it off and pay off some of the debts of the nation that's run copper down on the seabed and the irish people the irish government are dr stork along and they're diving masks and they're free diving under six feet down to try to get copper from the sea to pay off certain credit card debts and to buy themselves a nice pint of guinness a lot of the churches of course in ireland missing the iron roofs that have been torn off to pay for again us and the entire country is being sold off on e bay and so finally now remember at the beginning of the show i said that the debt apparently does not make the rich happy no rich people hate money well because we

know wall street has tons of debt they own tons of debt and it's not making them happy because greece's credit rating cut again on higher risk of default so they have now been downgraded they're continuously downgraded this time by standards import and it looks like default is coming closer and closer we got the triple hook you know the triple hope to trickle have to see see see. hoo that's a bad one well apparently. the c.d.'s the contracts the this is the big problem here is the debt on the bonds which french and german banks own so they own greek sovereign debt but they have insured themselves and who has insured them who's provided that insurance but american banks and they apparently are exposed to this greek portugal and irish debt by up to about one hundred twenty nine billion which is a real castle have to hand over to these european banks but at the same time to the

basil requirements of trying to get banks to increase their capital ratios here you have this cluster bomb. explosions between europe and greece that could wipe out one hundred twenty seven billion galaxies in america and this is really an interesting showdown in the global financial war isn't because you've got insurance and bonds were to see the products in the u.s. we've seen this played out would be a scandal of the subprime scandal in every aspect of the past three years of financial collapse the controlled demolition and depending on who sits where during the collapse and financial system depends on who survives and apparently the key here is not greece actually defaults because then american banks would suffer catastrophic losses as compared to european banks and this of course cannot be communicated to the american people because nobody in congress actually knows what a c.d.s. is or even what a bond is well yes and max finally i'll say on this is that you know in the first

great depression you had the beggar thy neighbor policy of devaluing your currency but everything was against gold then so you could do that now with beggary my neighbor who where does the debt the low well who holds the bag who's holding the toxic debt back at the end of the day stacy ever thanks so much for being on the kaiser report thank you don't go away much more coming your way so sit right there . in owning. such a. thing . you are the most. one of the most extreme environments on the planet this is antarctica and people have to be aware that they are far away from civilization sean combs discovers

a plot to make sense arctic is so special the destructive are merely the wildlife in antarctica is the place you live in the slums of. expeditions to the bottom of the earth artsy. welcome back to the guys report imax guys are time now to go to athens and talk with radio show host and blogger at covering delta wordpress dot com dimitri coffee and us dmitri welcome to the cause the report case made to try to not write to me three here on the kaiser report we recently discussed your coverage of the charges of treason lodged against george poppen trails the prime minister give us the details of this case well apparently this as you said i'm on the rudder and i have a radio show in new york and this story just kind of blew up after i heard the allegations

made by a member of parliament a certain part of the menace of many look at the eye which is a opposition party in greece that's it's the other party them in a small crowd kind of going to run the country over the past thirty five years and he made these i positions on the floor parliament where he essentially accused the prime minister of acting as a foreign agent against the greek government and that's the profit it needed directly or indirectly as well as possibly members of the family and possibly members of his cabinet from the sale of one point three billion worth of credit default swaps from how unopposed bank a public banking arm of an armed at the government has about thirty three percent stake in two private books to a specific firm but he actually names on the floor probably. and he actually he actually cites people on the management people on the board it was a pretty deafening out occasion and it was one that he was prompted to make by a certain face who was leader of another minority party in the parliament. and i

should mention that after after making those allegations and after i wrote my article the firm he cites came out with a full denial but they said that not only been a day now by any credit because our projections from running posts back on greek temple but they didn't buy any species yes period no they never advised in their clients. and the the the m.p. actually did not provide publicly the evidence that he he claims he has the salmon it into many hands and got on national television afterward and said but no one you know that's no one should try to where that is suggesting that he's been threatened and that he won't be threatened and that this information is in many hands but we haven't seen the specific evidence for this specific firm out of the larger context of the article that i wrote about is something that you've talked about on your show before you tried to get us on the show and who along with george not us filed the lawsuit against the greek government speculators for their role in this larger

financial or kind of syndicate project using the derivatives markets on the one hand the c.d.s. market the insurance market and the naked short selling wheat brands on the other hand with the me a central bank which extended the settlement period for shorting government bonds from three days and ten days and then it kind of all plays into this whole thing because it's not just about. these specific bonds that they were bought by banks in the spring and summer of two thousand and nine and then sold in december after the new government came to power to some third party that that third party has not yet been confirmed but it's also a question of the larger question of who owns all these other derivative contracts that are bets against the greek the flux. and already the people in negotiations over did over a bailout for greece are they owners of this city have any any interest in this so there are these massive potential conflicts of interest and one of the things that the m.p. asked for besides everything else was that the prime minister come to parliament

and he hear you provide evidence along with other people is that if i could lead everyone of themselves or not person subs you know. provide evidence to say what do i or do i not have an interest in collapse of the country because i'm involved in negotiations and that's a major potential conflict of interest ok so one point three billion in credit the . there was a sale and somebody took possession of these credit default swaps at some point during this period of time that you mention and afterward there was a reset now for a something along the order of a twenty billion dollar profit now there is a way to confirm all first of all can we definitively say that these were sold i have evidence to support that it was solid i actually had and i don't make a claim on the in fact on the post on the article that i wrote one of the things

that i made a point early on was that the numbers didn't really work out for me i wasn't really sure how whether he was talking about one point three billion notional or what because the m.p. actually says they're at the time that he was making allegations that some of these contracts that were expiring were at the time worth something like twenty seven billion euros and that if there was a full credit that they would be worth sixty eight so the math couldn't really work out for me i tried to talk to people that work in c.v.s. to explain that and i wasn't able to get any kind of clear answers so i don't know if they were if they were sold from the initial sale to the firm again after bad. i don't have an answer for that question ok if the c.d.s. contracts are still held by the hellenic bank then the money that the greek government is seeking to offset their losses would have would be reduced correct what is certain is that they sold their only umbrella before star so were they have

been better off the absolute were better off because it was an insurance contract insuring against the fall and even if they didn't have a default those let insurance contract was rising in value so so in that sense the absolutely better off meant that would have saved them from a complete default no but but metaphorically metaphorically it's also something that i could kind of the country was most vulnerable it was the one thing that it was directly correlated to the health of the economy indirectly so the more in dire straits the country was in negotiations with the i.m.f. and with the e.u. the more value this asset would have so it's the least thing that you would want to get rid of once you've come into the government and you've looked at the books and said ok we're cold cow you know our deficit is way above or we've been saying it is our national debt is way worse our economy is way worse and we have this credit protection on our books it's the one asset that we know is going to. be help of our economy so you would think that if you're functioning with the national interest in

mind that you would never get rid of this asset it wouldn't make any sense from data from that point of view and that's actually a point that the m.p. makes and that's right says he alleges that the prime minister is functioning as a foreign agent because he says only foreign agent would sell an asset that has such national about him during a time of national crisis ok now the crowd to fall continuing to play a key role here and it has now emerged that american banks have written credit default swaps so if greece defaults american banks have to pony up one hundred twenty nine billion to french and german banks in other words the french or the german banks own bonds that. will take a haircut but it is the american banks who stand to take catastrophic losses because they're the ones who bought the c.d.'s if in fact there is a default so the question is were the american banks suckered into buying these c.d.s. contracts in the same way that george public was suckered into selling them or is

there something else going on you know you know what has a really good question i've been i've been trying to figure out what could be o's with this sovereign c.d.s. market in general for some time now because as many people have pointed out in some cases it's clearly fake insurance and in the sense that there are c.d.'s contracts on u.s. treasury debt and in my opinion if you have a u.s. default who exactly is going to have a capital reserves to pay out the claims on insurance contracts on the on the u.s. thought so in general it's to me it just this fits in another example of this massive counterparty risk risk that exists in the system that i think functions as a sort of massive source of anxiety for a lot of these banks so there's interest agree factor which makes them push countries like greece further and further into debt in the middle not to take a haircut but i think is also a fear that. we don't even know was going to happen if we took a twenty percent haircut because not only do we have greek debt on our books but

who's on the other end of the slops that we've sort of these you have these credit default swaps insured protection that we've taken out as a hedge to to hedge our risk so i think i think that's the real issue with all these these credit people swaps and means. and these sovereign debts on balance sheet sense that no one really knows who's exposed and who's not exposed and how much exposure is one bank able to deal with and how much is another back here are we it's could seems like we're kind of the same place they were at how many years ago with reman and with aig and all the stuff that happened that we counter party risk right you refer to c.d.s. products as fake insurance and what came out after the a gene the lehman brothers can. lapse was that c.d.'s contracts are in fact fake insurance for one thing and it typical insurance contract or some kind of reserve against losses with a c.d.s. contract there are zero reserves so it's a purely a gambling instrument that is missed asked the size to encompass trillions and

trillions of dollars of the spectrum of bets and so on follow up on what you just said there there is some much confusion about who owns what which is what we experienced right before lehman collapsed and the global financial collapse of two thousand and eight is the greek economic financial collapse shaping up to be lehman part. of the senate. and i mean are you actually did an interview recently before i came to athens because i'm based out of new york that's where my radio show i interviewed just the rock and who who is a former economist for the i.m.f. river plate a vision and we were watching plan and he was on the south side of sums for particularly the arch of the collapse and we talked about this exact situation and he made the point that the e.c.b. has roughly eighty billion in capital reserves and they greek banks hold roughly one forty hundred forty billion to be said because right now right you have the city which is funding the greek central bank through the european system central banks and that's allowing the greek banks to remain liquid because they're

insolvent and they're able to continue to pay out in fact it was the fourth month month over month that we've seen the clients and the central bank be several government restructured biggest withdraw our restrung roughly i think thirteen point one billion so eleven billion euros so it is perfectly it's perfectly feasible perfectly possible that peace could could be a lehman in that sense because it's huge if it defaults and even if it picks a haircut and that's and again they goes back to my point which is why are these banks so obsessed with not getting even the smallest erika when we know that the greek government can't possibly think this back and anyone else here in greece right now knows that the greek economy is falling off a cliff anyone who's interested in trying to get interest payments is. not is clear is is not doing what they should be doing clearly if there are predators the only thing that predators are achieving right now is their liquidating assets the liquid in public companies whether their monopoly over their profitable not monopolies or not we recently i think sold the balance of ok which is

a public telephone company for something like eight euros a share or something like that and they're also looking to take that they can land and mineral resource rights we're hearing about rumors again stuff that used to be considered untrue or just rumors in the past about oil in the ionian natural gas the a-g. and mineral rights and the gold reserves in the creek here about bogus stuff now and i think what what you're seeing from the creditors point of view is let's try and liquidate as much as we can it's leveraged buyout hostile takeover of a country just not a little bit use on priests we're not going to worry about the interest payments because the country just like an economic activity spells that nothing's going to come in so i think i think that's the focus it's not so much a focus on trying to keep the money flowing from there whatever losses they get maybe they just don't try to recoup them from the c.b. and from the f.s.f. and anything like back and like we did with tarp and the federal reserve in the us i'm sure you want to be too and made in line one made one too and all that's all right that's going to do it for this edition of the kaiser report dmitri fiennes

thanks so much for being our guest right thank you max or push it and if you'd like to send me an e-mail now please do so as a reported r t t v are you i want to thank my guests dimitri and stacy herbert until next time this is max saying by. the way.