again at seven and eight pm i'm christine for sound. british. markets try not. find out what's really happening to the global economy with my scans are no holds barred look at the global financial headlines tune into cars a report on our cheap. ok

tom arriving here broadcasting live from washington d.c. coming up today on the big picture.

skies are calm stacey however this is the kaiser report let's talk about my own tony jenour. you know that is going to find stacy ever exactly max i officially have a diagnosis for the fainting traders of wall street the same thing traders of wall street do continue you know the markets have been up and down up and down up and down while the over the last two weeks well it made me think of the fainting goats of tennessee domestic griese of goats in america which have a genetic disorder called my attorney a congenital which is when startled younger goats will stiffen and fall over a few feet from this image here they just fall over and freeze for ten seconds let's look at her and they get up and start walking again like normal like nothing

happened but this is what we see in the markets. do you apply the fainting goats of north carolina to what we see in the marketplace well i think it's a genetic disorder so i think it would be inbreeding. in the financial markets this is the first headline max wall street aristocracy got one point two trillion in fed's secret loans so as you know one of the consequences of aristocracy is often you see in britain so i thought this is what you're seeing is that the fed is breeding. a class of bankers who freeze and start on fall over because the it generates attention from their own or central bank and they like for the sell button then stocks collapse and then they wake up with a quick lie everything back also i might add that this all idea of inbreeding as relates to wall street aristocracy that was gifted over

a trillion dollars by the fed it also reminds me of the word derivatives and the riveters are referential they refer to itself after generation upon generation of trading algorithms that have created this kind of ogre like monster on wall street that only refers to itself and not the general economy or anything anyone is saying in washington. so let's turn to the story here so the wall street aristocracy fed chairman ben bernanke used unprecedented effort to keep the economy from plunging into depression included lending banks and other companies as much as one point two trillion of public money and max this is the most important part of the sentence that goes on about the same amount u.s. homeowners currently zero and six point five million delinquent and foreclosed mortgages write the numbers work out here banks made over a trillion dollars in loans that they knew could never be repaid because they were

lending it to people who had no income no assets no job could they knew that they would be bailed out by the fed to that exact amount of money and let's be honest this isn't a one point two trillion dollar loan this is a one point two trillion dollar gift on wall street equality forgivable loan which is code for gift. so the largest car was morgan stanley and they got as much as one hundred seven point three billion which was three times as much as the company's total profits over the previous decade these are the company's profits if there wasn't for this gifting from the fed to these banks their profits would be zero their start valuations by the way are crashing their liabilities are skyrocketing that's why most people in the know will tell you that banks particularly in france right now and i'm thinking a society in general are about to declare bankruptcy because they are beyond insolvent their insolvent times forty the other thing max is now when it comes to

this matter of compensation by a lot of these bailed out banks they're saying it's the free market we have to allow the free market to reign because otherwise we become socialist marxist and blah blah blah but according to the bloomberg article even as the firms asserted in news releases or earnings calls that they had ample cash they drew fed funding in secret avoiding the stigma of weakness so i ask you max where is the price discovery in our well you make an excellent point price discovery of course being at the heart of free market capitalism the nexus between supply and demand if it's all in secret and it's without bloomberg request for information for for you know freedom of information act request we wouldn't even know about this one point two trillion dollar gift and i'm sure that there's a tens of twenty times more of the gifts behind the vet but there is no price discovery there is price fixing that's what we're discovering here that we're discovering price fixing and we're not discovering price discovery and now if i'm

out with correct you know in the u.k. the royalty they're often fell's themselves to the public saying that the queen only cost sixty nine p. per taxpayer to keep the royal household so the royal household in america however i figure that one point to kill. divided by three hundred million equals four thousand dollars per american so i think that's like four thousand pints of milk rather than one pint of milk at the queen cost well the point being that the average american is subsidizing wall street aristocracy and it's curious that they use the word aristocracy because it goes right back to the whole point of america to begin with was presumably to stage a freedom of revolution of independence against aristocracy and here we are two hundred forty years later back in the jaws of an entrenched aristocratic class that treats the entire economy as rent seeking trog did it schmuck aka. the new

order just invented another nearly zero just for max kaiser on the show the other thing that is important or we've just spent discussing recently how the population in the u.k. doesn't seem to mind so much the wholesale looting of the economy by the top but the looting by the bottom they go crazy and you see this again in this story as well about the aristocracy in america the one point two trillion dollar peek under center fifth two thousand and eight the combined outstanding balance under the seven programs tallied by bloomberg was almost three times the size of the us federal budget deficit that year so again federal budget deficit huge story riling up the masses well where is it about the banks where do they and why don't they care about it the debt ceiling debate going to washington for weeks compared to one point two trillion dollars in looting and then yes the point you make is

a good one you can. castigate looters on the street in london and point to them as being morally reprehensible while at the same time being accommodating for the looting going on in the banking system in the city of london and i don't understand what this is such a stretch for david cameron and i see tony blair opened this paul i.i. hall last week and so on it's a moralize now that he's good friends with the poor about what really should be done in a society that respects human rights while he is the guy who oversaw the transformation of the city of london into alluding economy not to mention the human rights abuses and genocide that player committed in iraq well so you know tony blair was good friends with the guy with the farting camels of tripoli what according to most of tripoli back on the show well now blair is of course wanted he's painting bankers of wall street so this also brings me to continue with this

my own tonic markets theme i mean these guys have my own tonia this is a staged herbert original tonic markets theme. headline reads max bernanke he under pressure to calm markets so you know ben bernanke he is speaking at jackson hole tomorrow and he's under pressure to calm these markets remember i said these fainting goats they figure when they're startled so these these goats these banking goats are threatening to pass out again but i want to bring up one thing about these fainting goat according to the wikipedia older both learned to spread their legs were lean against something when startled and often they continued to run about in an awkward stiff legged shuffle so you don't need to faint if these bankers can just come up with an awkward stiff legged shuffle they can still stay standing you know to the awkward stiff legged shuffle could be the dance craze of the season remember under good buffy's recent x x

patriae sion they have the. it was a call to go the jenkins i got saying to them this is the awkward standing baker dance so if you see the words ben bernanke you leaning up against a wall with his gold like beard you know. he's three q three and q four two five. you know that he's trying to stop himself from fainting due to market my own tonia degenerates yeah i imagine this is what we'll be seeing tomorrow in jackson hole ben bernanke you leaning up against the wall a whole bunch of younger bankers passed out on the ground startled like frozen to round them all up and come up with a nice recipe for sure. but i want to skewer some x. yes he's being asked to calm the markets because there's something like eight trillion has been lights off global markets in the last two weeks and he's why don't you. know well speaking of a bag of shells the u.k.

population barely has that if you look at this headline u.k. household finances are worse than during the height of the recession this is again all these the fainting bankers of wall street are out there in jackson hole begging for money the actual population who is that out there banging on the drums asking people to lock up the little poor people well their household budgets are deteriorating at a faster rate than during the height of the recession in early two thousand and nine and according to an analysis of consumerist finances this was my message to the middle classes in britain who are. you know all upset about the young looters out there on the street you need to join them you need to talk to them you need to join them you know and understand what they're talking about there because your next financial apartheid only grows if there's nobody willing to shut down financial part time so all of you middle class people take all that marmalade off your naked bodies put your clothes on go out in the street stop dogging and start

talking and then finally with this whole you know a shift in wealth that's happening around the world as part of this financial collapse is what it's really about india gold imports may reach oh record so as gold prices are soaring we find that the biggest buyers in the world indians they're increasing their consumption of gold purchases by india the world's biggest user surged sixty percent to two hundred sixty seven tons in the three months ended june thirtieth from one hundred sixty seven tons a year earlier investment demand max jumped seventy eight percent to one hundred eight point five tons o. because let me tell you something analysts confuse us all indian gold buying phenomenon of course for years they buy during the wedding season and they buy as a gift and store of value etc so people assume that when the price of a tire but this would be

a deterrent to buying gold at these high prices but indians are not stupid they realize that all forgot currencies around the world are being debased they've already had the experience of buying gold they've already seen their gold double triple hitting new all time record against the root pay so there's an. installed customer base of gold buyers is the reason the thing called going to triple again these people say oh no there are going to pull out as to why there's like saying you know wow that first to the era when they told me so i am never going to do it again this is make any sense you know. say sarah thanks so much for being on the guys report thank you thanks that's going to do it we'll be right back with much more of stay there. the official. from the.

video. a timer here broadcasting live from washington d.c. coming up today on the big picture of.

a lot of back to the kaiser report imax kaiser time now to go to massachusetts to talk with chris lawrence and chris martenson welcome back to the kaiser report thank you max good to be here all right chris lawrence the markets have been extremely volatile for the last two weeks is this the result of what we saw in two thousand and eight or something new well you both i thank you for. a lot like two thousand and eight we have critics critical owing out all over the place if we keep our eye on the ball remember this is a monetary crisis that it's hard we don't know sweetness as it is a fiscal crisis or financial crisis so i'm looking at the financial sector you look at the b.k. x. or are some of the indicators that are around maybe insurance sectors and you're seeing a lot of distress there. in this rundown and so that's why we're seeing the stress

i mean obviously when you have a car that's critical when out you know you're huge debt crisis so those are the echoes of two thousand and eight months different this time is gold gold and silver i was signaling that maybe this time i think people are understanding that this is a monetary crisis too it's not just some weakness in the financial sector chris martenson i saw an interesting statistic a couple of days ago that all of the market capitalizations of something like the twenty eighth biggest banks and continental europe the add them together they still wouldn't equal all the market capitalization of one company apple computer i think that's certainly a lot about apple computer but more importantly it says a lot about the european banking system their market capitalization and these banks in the europe and in the u.s. same awfully thin when you look at the amount of debt they're carrying the bottom line here is that this is fundamentally a crisis of insolvency it always has been a crisis of insolvency the big banks are trying to treat it as a crisis with quitting the their big and easy big federal reserve chose to give us

liquidity you saw the federal reserve wonderful report by bloomberg coming out in which showed that the federal reserve's with prior over a trillion dollars of actual cash liquidity and even that wasn't sufficient to passionate wall in the ship it's really fundamentally an insolvency situation that's what we're going to happen to use up to i think that's where we're going in this next leg of this downturn and i'll get to that one point two trillion dollars get from the fed in a second but i want to go back to what you just said talking about the activity or that the daisy chain aspect of these banks i'm thinking back to two thousand and eight it was revealed that lehman brothers. their own little pet bank that they would hide their dad speed for each reporting quarter was needed this is part of what you could look up and find out the repo one l five scandal they have this bank they were hiding debts and they were shuttling back and forth to avoid the regulatory scrutiny and to avoid the disclosure of all there that it seems to me that that particular scam peekaboo accounting or debt shuttling is

done on a huge global scale it didn't play into what you're saying how much of that is incidental how much of that is more is so has more of a nefarious twist to it i think it's much more widespread then is commonly believed anybody thinks the repo one fire began and ended with lehman we got that one bad apple out of the bureau really needs to have their head examined this is clearly common practice there's all kinds of accounting tricks and shenanigans that can be done let's face it wall street can afford the best of the greatest and they are just how we're going you know manning. the government regulators are going to return and that's kind of human and we're sometimes those theories. through revolving door into the regulatory apparatus would it be wrong to say that when people talk about the shadow banking system as gordon brown former prime minister of britain call that what percentage of s.

and a banking system what accounts for this type of fraudulent debt shuttling to avoid regulatory scrutiny would you guess on a percentage basis it's hard to say that because one number i go by you know we look at the number of our mortgages that are out of the week when or in default and it's over one in ten at this point in time so we look at the total size of the mortgage market we find it's over ten trillion dollars so we're rounding bigger asli year we find there's a trillion dollars in losses somewhere where our goods if we go back through all of the losses that have been reported so putative holders of those same mortgages we don't find a trillion dollars missing anywhere we find a fraction of that and so without the ability to have real regulators come in and force this more to market which we abandon by the way quite willingly openly we'd be in mark to market and allow them to do more to fantasy and that's the world we live in and this is the important point our markets are really driven by confidence they require confidence people investors have to have the sense that being know where the written risks are people don't know where the risks are at this point and

for good reason because every time we scratch under the surface we find another huge example of where things have been hidden ok so they're saying you can't hide these massive multi-trillion dollar bets forever however the federal reserve bank under ben bernanke it seems that their solution is to try to keep interest rates at zero percent for ever so that the liability that interest costs associated with these debts will never have to be paid there's a jackson hole meeting coming up he's being you know asked by the market to do something in the face of all this calamity is number one can we do anything number so am i right to say that this is their own percent interest rate policy as an attempt to keep the. dollar debt burden primarily head in a closet somewhere is certainly an attempt at the entire rescue such as it was starting in two thousand and eight the current really has to be called by its proper name which was the rescue of the big bank balance sheet act two thousand and

eight and this is always been about repairing their balance sheets look at the big financial institutions i've picked on banks there are just really little financial network oh in which the shadow banking system is one that we've got pension funds we've got insurance spawns we've got the entire fire secor finance you know insurance real estate the whole sector everything bernanke is going to do is to get credit flowing again because that was he has got to know since we had. too little credit flowing through the system and he's done everything he can to get the credit flowing again and i think every step is taken has been right if that was your diagnosis but from my diagnosis the patient was suffering from too much debt not too little credit and so what we have to do is recognize that those debts can't be paid back under current dollar terms and there is no possible way to get out from this using crude production and somebody is going to have to eat those losses politicians step into the fray every step of the politicians with the exception of maybe iceland have so far come forward and said we want the taxpayers to eat those

losses here's what people are starting to catch on and have a story look at europe a lot of theory unhappy people that are expressing themselves on the street saying this doesn't feel right and there's a good reason for that it's just it's not correct and i think the central banks have fundamentally of the all to look at this problem in the right way ok imagine iceland let's use iceland as an example of a policy of letting the banks fail tom picking up the pieces they're after and moving forward and on the other extreme i guess you have to point to a country like japan that has supported their banking system now for twenty heirs through this zombie banking period i'm not realizing the losses eating up their entire country savings and now going and. a period of rapid decline so those are the two choices and first of all for those who argue that it would be impossible for america to have experienced icelandic repudiation of the debts and simply allow

banks to fall the too big to fail banks what do you say to them and second of all are you saying basically that we're stuck in a japan like a zombie economy well first of all we're absolutely getting ourselves stuck in a japanese argument economy and to those who would say listen these banks were too big to fail it would have been too disruptive you know think about the deflationary impacts that would have happened this could have led to all kinds of things potentially uncontrolled you know hank paulson of the time back in two thousand and eight walking into congress mentioning things like martial law and very scary things that everybody wanted to avoid at the same time we're having this too big to fail discussions we've had too little of the discussion around the idea or too big to save if something is just too large to save everything we're doing and attempting to avoid too big to fail we're doing this we think time wasting resources shuffling trillions where they're actually doing no good they're just disappearing into a rock hole we're not getting any bridges out of the deal our energy infrastructure isn't being or all we have no new educational initiatives we don't have any

investments that all we're doing is taking sunk cost that is wrecked debt we're just trying to recall creative destruction shouldn't been happening isn't happening because it can't be hidden forever it's going to come out in the meantime what we've done is on very unfortunately we're used to the odd time in a lot of resources attempting to sustain the unsustainable that's the way i look at it and i think the markets are starting to confirm that view and working people are coming around to that which means we may still have a very destructive wave of financial instability in front of us that's actually what i'm i think is most likely at this point in time and we have a fiscal situation which is deteriorating apa periphery and starting to deteriorate towards the center of a very visible in europe at this point in time but it's going to come to the. us eventually yeah i mean the really that to add that and sell to andrei and the u.s. on top of all this spending trillions fighting tyrants overseeing and doing nothing

about fighting the tyrants on wall street now you mention this one point two trillion dollars so we talked about it briefly this gift that was disclosed through the freedom of information act that bloomberg put forward and these secret loans that went to the banks and they're individuals at these banks and the c.e.o.'s at these banks and this is really the emergence of what some are now calling an aristocracy in the u.s. is the public now beginning to understand that they're living under the the the the in arras to craddick monarchical system again that they the whole revolutionary war for independence was basically now we've got a round trip back to feudalism i'd like to say yes but it's not be real that we really have cracked one percent here in terms of awareness of what's really going on here not only what we're able to recapture we have media capture all of this is very predictable exactly what happens when you have high concentration moneyed interests that are allowed to own all sorts of things freedom from politicians to

cable news stations to newspapers so i think a lot of people are starting to in my line of work upon more people who are voting with their feet as it were trying to find ways to protect their assets pull grassroots out of a system that they see is fundamentally a symmetrical corrupt you can one that favors one party or another that is the party over everybody else and so we're starting to see that you look at retail money flows into mutual funds and i think that's telling part of the story look at the price of gold we're seeing a story told again we were all over the place that people are fundamentally walking away from what we see is a rigged game and they were very unhappy about having to do that because we don't have any alternative currencies in the u.s. there isn't a war we can go across we're not like zimbabwe where we can use u.s. dollars. if we choose or we could hire savings in whatever the poor who is he happens to be the united states we're really captive over here and so this is the thing i'm experiencing most people asking the question how do i dodge what seems to

be a very shiny bullet and i can't control there's nothing i can do about it so you know here we are facing you know the prospect of q e three or you know some other big bailout or another series of bailouts will be in we don't even have any faith that when we announce it but look they told us at our q e two that was nice but that was a fraction of the size of the secret bailout that was happening behind closed doors so people get the sense that yes there's huge amounts of money it's flowing all over the place but not to them it's going to well connected and this is really unfortunate dynamic because our markets again require confidence in order to stay in and who can have confidence in these markets watching the volatility seeing where the money is flowing not understanding with the risks really knowing an art of hearts that there are balance sheet disasters just scrolled away it's intense it's very very profound period of instability room all right gold pitchforks i guess is the message chris martenson thanks so much for being on the kaiser report my pleasure all right that's going to do it for this edition of the kaiser report

with me nice keyser and stacey however i thank my guests chris martin said if you want to send me an e-mail please do so at kaiser report at r t t v are you until next time this is back guys are saying by all. the earth earth. the . thank. you.