and yet. we are. rachel martin here broadcasting live from washington d.c. coming up today on the big picture.

stacy herbert i remember back in the day a famous quote from maggie thatcher. tells more yes she said there is no such thing as society and the middle classes rejoiced as all that public housing came onto the markets and they were on the property ladder today they are actually very surprised that there is no such thing as society and they're outraged and they act as if there's no context to the under arrest in the u.k. so i want to take you to a headline from two thousand and nine in the economist magazine global tinderbox two thousand and ten could be a year that sparks unrest yeah this is we covered this when it came out the economist magazine bleakly was handicapping social unrest picking trying to figure out what countries are most prone to it and so do you point people are saying where does this come from who could have seen it coming it was it was

a whole feature story in the total people total people and this is separate from their political unrest index this is their social unrest index and if you look at the map you see that britain is. at a medium risk of under arrest social unrest if the world appears to have escaped relatively unscathed by social unrest in two thousand and nine they grow despite suffering the worst recession since the one nine hundred thirty s. it might just prove the lol before the storm and they cite not only the increase in poverty but they say poverty alone does not spark on rest they also cite exaggerated income inequalities poor governance and lack of social provision. that your grade year they chop the economic support out from underneath the vast majority of the population there's a great sugar high of real estate appreciation which everyone interprets as their

newfound riches even though it's all based on that and it all is now been washed out to sea and they're all being broke again resulting ultimately in the very predictable social unrest in a city like london as predicted in any camp and talked about by the economist magazine which call it a social cohesion risk and the results today are being viewed as somehow isolated without context or historical precedent or so now nobody knew that they were coming and that is completely false exactly and now a lot of people are saying that you can't understand this in any way it's just sheer mindless evil because there have been no austerity measures implemented yet and yet today i was reading the financial times and we're thinking the bank of england said that inflation would reach as high as five percent this year so this is ignorance on a wide scale that. the population don't understand inflation as an austerity

measure that's right the austerity measures have come in the form of excessive bank fees you know when these people who are not part of goldman sachs inner circle may take money out of the bank they get raped by the banks with these fees they're in financial austerity and. when you're charged twenty nine point five percent or higher for your credit card rates again goldman sachs employees get negative interest rates on their borrowed money it's jim crow laws as applied to interest rates it's basically financial apartheid and these people are living in a financial prison and this was a prison revolt and many commentators are noting that these rioters are just reflecting the looting that has happened from the banking class now let's look at how the politicians who remember just reflect their population of voters interests and what they demand look at how the difference of how they treat these

people are u.k. riots young yobs back on streets despite david cameron's pledge so this is from the telegraph and they're demanding harsher sentencing then that is being handed down to eleven and twelve year olds the photo you see in this article is a twelve year old who stole a basically a ten dollars bottle of wine and he's been given a referral order which means community service and rehabilitation and this is not enough they want prison for this twelve year old for stealing a ten dollars bottle of wine well a parent cameron has to decide whether he's going to allow plundering in the city of london to finance his economic growth george osborne has to make this decision or whether he's going to outlaw plundering in the city of london and therefore outlaw plundering in the rest of society you can have both david cameron you can allow plundering the city of london and then outlaw it in the ghetto. but you created from the city of london plundering so it was

a phrase that you see on top of the line alive s t f u s t f you david cameron because you're completely off base here you are a total product of an elitist school of banking schmucks well max let's look at a quote from david cameron about these young looters the eleven and twelve year olds he says quote if you're old enough to commit a crime you are old enough to face the punishment so i want to wind back to earlier this year from january two thousand and eleven in this headline cameron warns against banker bashing so u.k. prime minister david cameron yesterday said he understood the public anger towards the nation's banks but warned against banker bashing there is blatantly obvious that your own bankers are financially raping your people who write oh they're. not very good guys are in their pocket they go you should lock well you go yeah

these great wall. now let's continue on this theme of how the banking looters are treated differently from the looters to take ten dollars bottles of wine here's a little clip. from the third week of july two thousand and eight in the heat of the beginning of the real market meltdown. so hoops trillions of bacary trillions were handed to bankers based on their fraudulent activities which destroyed the global economy they got drunk that's right and they committed massive fraud and they're all being applauded as entrepreneurs meanwhile these so-called looters and the ghettos of london

they should be going down to goldman sachs office and j.p. morgan's office and getting in line to take jobs because they've demonstrated the ability to loot and plunder and still that makes them qualified to be investment bankers they should all be given jobs you know why they won't be given jobs because lloyd blankfein of jamie diamond don't want competition if they were actually pro-capitalism they would set up a ghetto investment bank and put these kids to work raping employing the global economy but that won't happen because h.s.b.c. barclays loans u.k. banks that were bailed out by the federal government bailed out by the people don't want competition so here you have the leader of the free world george w. bush at the time apologizing and providing an excuse for the bankers he's saying they were drunk now here's what happened to a loser in brixton brixton looters jailed for six months so my back a bell twenty three took several i pod touches an i pod nano devices from

a currys in brixton when interviewed by police bell said she had been drinking heavily and followed a group of boys into currys she took items from the floor of the store now she's been sentenced to six months in prison but the population is begging for more they want her puppy. longer drunkenness is not an excuse and this twenty three year old girl's case no it's not an excuse for some schmuck on the ground and if you go to the city of london on a friday night you'll see investment bankers in suits and ties deprecating i met there they go to good for that now so they get reprimanded for that no they would applaud a brawl both as david cameron says george osborne so back to the social unrest in the. the us is very low on that list but let's look at a few little headlines from the u.s. nearly fifteen percent of the u.s. population relied on food stamps in may according to the united states department of agriculture now in that clip of george bush he went on to make

a joke about how expensive property was in texas and it's called right on him saying all the fraudulent activities of the bankers was excused by their drunkenness so he's making the connection between all the banking activity and inflation that the middle class tends to love in the property prices in the meantime the bottom of the ladder fifteen percent of the u.s. population is on food stamps and food stamps of course supplied by j.p. morgan yeah who are feeding both sides of this nightmare they're kind of like the food company that sells junk food and diarrhea medicine they've got goals and covered so j.p. morgan they create the inflation with food stamps and then they create they should be selling collateralized bonds tied to the inflation adjusted food stamps nightmare and there was nothing but a parasite i agree with what i mean who says that the entire u.s. banking system is a parasite on the world oh i grew so let's look onto another case of hypocrisy that

happens on a global scale high frequency firms triple tree in route the stock markets fast this electronic firms boosted trading with three fold during the route that are raised two point two trillion dollars from u.s. equity values stepping up strategy. that profit from volatility so over this past week while all these markets have been in turmoil seventy five percent of american equity volume in august was due to high frequency trading i predicted as i said that of course moody's would downgrade u.s. debt because it would increase volatility they downgraded exactly as i predicted and it volatility increased substantially exactly as i predicted this is the new profit center for wall street churning and burning u.s. sovereign debt sovereign debt around the world this is their new profit center now this is a very interesting quote from the article again think of all these this swift justice that has happened in the u.k. against young people who have stolen items worth ten bucks or so u.s. prosecutors have joined

a regulatory investigation into whether some high speed traders are manipulating markets by posting and immediately canceling waves a rapid fire orders justice department investigators are working with the f.c.c. to review practices that quote are potentially manipulative. as a high speed looting high frequency trading high frequency looting every day goes on the alan greenspan of the world ben bernanke of the world the barack obama's of the world will say well that's how the economy works reading liquidity the system we're making a market but yet when somebody down at the ghetto steals an i pod somehow that's morally abhorrent it's the exact same thing they're morally equivalent you have to decide cameron what kind of society do you want they want to they want to go down a factory path and say there is no society we're just going to kill each other for the available few bucks a quid or do we have some kind of republic or some kind of civilisation but you can't have both you can't have just one set of rules for your friends and another set of rules for the people who aren't from the same school that you want to know because there's two sets of laws there's two sets of rules there's two sets of

moral paths that are being managed at the same time and one happens to be controlled by the folks that are doing the stealing and there's not the ghetto kids but george osborne's bodies but they're the mass those are the older plot. skull the needs to be brought to book and not the poor schmucks in the ghetto that are the victims of your crimes you've got blood on your hands george osborne you're swimming in it. that's important for the population it's up to the population as well the population i have to say is much more outraged by these young fogg's and in the ghetto than they are by the older thought in the city they are clearly more out ways and they are demanding their politicians the very same politicians i might add that only months ago were caught stealing tens of thousands of pounds for the taxpayer in fake expenses so by computer equipment and white screen televisions

just as these looters were doing well most of the people who are criticizing the uprising in the ghetto will be joining the uprising. that's what the french revolution will teach the best with as we know from history this year but thanks so much for being the cause a report thank you stay tuned much more coming your way so don't go away. the official. called talk from the. video. now in the palm of your.

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welcome back to the kaiser report i'm max kaiser time now to go to kansas city missouri and talk with the man responsible for putting more than one thousand bankers behind bars in the nineteen eighties professor william cable work bill black welcome back to the cars a report thank you all right professor black markets around the world are once again in chaos as bank shares around the world tumble with things a different hat eric holder a personal banking criminals in two thousand and nine. yes but things would have been far better if his predecessor mu casey had pursued and it's a question of you could have prevented the entire crisis obviously what happened in

the obama administration is they decided to clear victory and go home and so secretary geithner has been going around saying that he saw the entire financial crisis for less than it cost to deal with the savings and loan debacle and of course this is complete nonsense and the chickens have come home to roost and they're being slaughtered as we watch seems like they're basis for not pursuing a criminals on wall street is to make a case that well it's not about chickens that old joke of what he allen when he was a doctor says that there my brother thinks he's a tech and the doctor says take these pills and their brother says wait on the stand we need the eggs in other words the joke being that the criminality is what's needed to keep the system functioning the u.s. has become a cop partner see it thrives on the criminality if arrives on the fraud is that too much or is that correct that block it doesn't thrive it's the most destructive thing but what thrives is the c.e.o.'s and this is what the nobel prize winner in

economics george there are a lot of and his co-author paul romer wrote about it in one eight hundred ninety three and their title pretty much says it all looting the economic underworld of bankruptcy for profit and what they said not quoting them is that this kind of fraud by the c.e.o.'s using accounting is a sure thing so it's a sure thing under to c.e.o.'s will get rich the way they get rich unfortunately is going to literally making bad loans which create a lot of phony accounting income so it's also guaranteed that they will ruin the economy and then the question is are they. prosecutor is going to take them on and we've had two administrations in a row now bush knew about ministration that have allowed these criminals to operate with near total impunity probably arguments in our living and anyone.

even for five minutes ten cell that this is a case of learning and why is it that obama can't if there's a need to look up the word looting in the dictionary is it not his problem buggin it's not unique to obama this is the last two administrations and indeed under the clinton administration as well specially near the end where they pass commodities futures modernization act to stop all regulation of credit default swaps but he's a hint three administrations that have adopted policies that are in our gerri going in criminology are highly criminogenic means they will produce epic amounts of fraud and then you had attorney general the casey under bush famously refuse to even investigate the major frauds saying that they were still completely and i'm going to voting right color street crime and then it's revealed in the new york

times that secretary geithner intervened to try to prevent even investigations much less prosecutions of the largest banks and so we have this bizarre incredible concept. from stress resegregate and areas took to financial stability is to leave the frauds who caused this crisis in control of our largest banks and then to bail them out and then to seek political contributions from them i will start with the rating agencies for a second because they're eyeing the period when the collateralized debt obligations were created the securitization and the derivatives explosion throwing the two thousands the rating agencies gave aaa ratings to what could be ostensibly referred to as crap and now suddenly the rating agencies are turning

similarly on the very banks that they were in bed with festive couple of months ago was as a shift in the in the in other words in organized crime many times you'll have enter scene in warfare between the gambino then some other crime family is a criminal criminality the rating agencies are they gone to war with the funds in the us government to turn in for gang war going on oh there's a great publicity skinner going on what is everybody in the world talking about standard and poor's this is the greatest creation of free publicity in modern financial history so the stuff that they gave the aaa ratings to was actually referred to in the trade at the time before it blew up as toxic waste in india have been for in that phrase for over a decade. the f.b.i.

warned in two thousand and four that there was an epidemic of mortgage fraud using their words and predicted that it would cause a financial crisis if it were not a step down and nobody thinks it was stemmed the mortgage bankers association which is the trade association of the perp's had an anti-fraud unit called maradi which reported to the entire industry in two thousand and six following three things first that stated income loans also called all to a were and i'm quoting an open invitation to for us there it's second that the incidence of fraud in these loans was ninety percent and third therefore these loans deserve the phrase the banking community used behind closed doors which was loans now add two more facts to this first

we know both from logic and investigations that it was overwhelmingly a lenders that put the lies in wires loans and second by two thousand and six roughly thirty percent of all new mortgage originations in the united states were liars' loans is really important to understand something that very few account of a sudden interest they aren't a treatise dichotomous in other words there are two categories that don't overlap liars' loans and some product that is not true sub prime loans by two thousand and six roughly half of also prime loans were liar's loans and that's where we get that overall figure of about thirty percent of total mortgage originations in two thousand and six were liars remember ninety percent fraudulent that means.

well over a million fraudulent loans a year and after the f.b.i. warning and after the marring warning the industry dramatically increased the percentage of liar's loans that it made that means when standard and poor's moody's and fitch were giving triple a ratings on the collateralized debt obligations of the c.d.o. those were primarily backed by fraudulent mortgages something day in bed s. and p. fitch and moody's were all warned about and so they all deliberately adopted of the financial version of don't ask don't tell and there's a infamous s. and p. memo from two thousand or two thousand and one in which the poor professional rater asked for the loan files so we can actually reduce the credit quality of the sample

of loans so what happens he gets back in flame graham from his boss in all capitals trouble explanation saying that it is totally outrageous to ask to see the loan files that people that merrill lynch's of the world believe in brothers putting these c.e.o.'s together don't even have a loan files and never looked at the loan. can you compare the looting going on in the u.k. with the looting by the bankers yes when your most elite or most powerful members of society. opt strategy of what a famous french economist very conservative called plundering then as he said they will develop a morality that doesn't simply permit plundering but valorize as it.

and when that happens the moral structures of the society will inevitably deteriorate in the upper classes that we still polite. in the underclasses it leads to street looting so ok well let's follow up on another word so we've got the looting going on in both sacked strata of society now the public has demanded something like sixteen thousand police to go into the streets to stop this street learning where were they and demanding similar actions to start the pig looting it hasn't happened and the obama administration has followed the bush policy is doing everything possible to prevent the public from targeting what it should be targeted uli polluters obama's famous statement to the big bankers in person was i am the only thing standing between you

and the pitchforks. now of course he's not supposed to stand between the elite criminals and the justice system and none of us want pitchforks or at least not many of us want pitchforks we want good apolo prosecutions by jail time just as what happened in the savings and loan crisis where the justice department worked with the regulators and achieved more than a thousand felony convictions and more than ninety percent conviction rate and those are only the. cases designated as major by the justice department although most all of those people were prosecuted typically they were prosecuted successfully so this was a great success against the lead white collar criminals in history and we can emulate it any time and you are absolutely right your question if the people will

wake up and demand us demand as i have that holder resign that he be replaced by a real prosecutor and just be made a priority and it will happen all right or left lane of their black ice let's bring on a cause or a part. and if you mess all right i'm going to do the business on the kaiser of course me max kaiser and stacy herbert i was i guess bill black there are so many now please just reported our t.g.v. dot ru until next time the bags guys are saying buy off. the for. me he.

says.