and these hedge fund so you know it really became apparent by the fall of zero seven you know about five months before the firm collapsed that you know he really wasn't down and dirty with the business and beyond that that the subprime mortgage business he he really didn't have a good clue about what was happening in that business and it later came out that really nobody did you know the management style of bear stearns was very siloed so different parts of the company really didn't have a clue what other parts of the company were doing and you know at the end you know everybody kind of thought the guys at the top had some sort of bird's eye view. and in fact they didn't but beyond that the firm was it was effectively mortgaging itself and refinancing that mortgage every day for many years in the commercial paper market and the reason they did that was because it was it was a lot cheaper to do than taking on long term debt so you know there were a lot of things that were done to maximize profits you know for the executives at the firm and certainly jimmy cayne led that and at the end it ultimately doomed them how much did that j.p. morgan pick up their sterns for what was

a deal ultimately consummated that well it was ultimately consummated at about ten bucks a share whatever originally had come out in the number everybody remembers is that on on that monday march seventeenth st patrick's day the public learned that the company was going to be sold for two dollars per share and what happened after that was that which effectively meant that j.p. morgan was going to buy this firm for barely more money than in the firm's headquarters building on madison avenue was worth what happened was that there was a shareholder revolt and at one point jimmy cayne was exploring the possibility of actually blowing up the firm and taking it into bankruptcy and and just effectively said you know i'm going to take everybody down with me so after that revolt it was clear to jamie dimon and everybody at j.p. morgan that there was something that was going to have to there's some concrete contractual problems as well that left morgan exposed so at the end of the day the firm was picked up for ten dollars a share and they got that deal done in may a couple of months later you know so. by any comparison it is one of the

great steals of buy on wall street probably in history right and then of course j.p. morgan after acquiring those assets for less that pennies on the dollar they turned around and got a multi hundred billion dollar bailout from an american taxpayer so fantastic for jamie diamond again another legendary scam stir clarify some of the points here going back to the one nine hundred ninety nine and a long time capital management scandal that has fun collapsed and wall street came together to balad out with this huge multi-billion dollar bailout one firm did not participate and there was a stigma attached to that firm was that bear stearns or lehman it was actually both bear lehman only pitch there every firm on the street was told by the president of the new york fed that they all had to kick in three hundred million dollars per to bail out long term capital management what ultimately happened was that lehman only kicked in a hundred million and bear pretty much told the fed to take

a hike cain basically sold bear stearns as really a vendor for a long term capital he cleared all of long term capital trades and you know he didn't see why he needed to kick in money to save this firm and in fact of course he didn't you know and that's really when when one term capital collapsed in ninety eight and that was really going to turn too big to fail was a point and it certainly set off a huge moral hazard problem for wall street that we saw it reared its head again in zero eight on a massive scale and so you know there are certainly a lot of parallels between what happened in two thousand and eight and what happened on a much smaller scale in one thousand nine hundred with long term capital management all right so let's talk about what's happening now the criminal proceedings and lawsuits that have been launched against bear stearns j.p. morgan sense the collapse terry bull who we follow on the show she's got a guest on kaiser report eve worked on details that are leading to a lawsuit can you give us some details and updates on that i was. worked with after

terri who's just been a huge fan of the film for since they won and done a lot of really great reporting on this subject surrounding bear stearns and these other banks after she wrote an initial article in the atlantic i was contacted by a law firm who is bringing an action on behalf of some of the model line insurers the biggest thing that's just come out is the f h f a's lawsuit civil suit which was released this past friday which details actually individual defendants at bear stearns all of whom were running their mortgage operations and are now in very high paying jobs at other firms. allied bank jeffrey hirsch lives are at goldman sachs these guys have have landed in a jobs at other places so and although this is a civil suit not a criminal procedure proceeding the word i hear is that based on the outcome of these proceedings you know some indictments are being bandied about and talked about so you know i think that after you know certainly the justice department lost the case against iraq and his co-manager of the hedge funds at bear stearns where

they were acquitted on nine counts i think they've they've really been going to school on how exactly to prosecute these people for the malfeasance that they participated in and you know i'm hopeful that some of these people you know pay for what they did because certainly a lot of e-mail documentation as well as i witness information apparently more than thirty whistleblowers have come out in some of the suits to describe the incredible level of fraud and malfeasance that was going on both on the factory floor at various mortgage operation that really went all the way to the top going to leave it there and make verbinski thanks so much for being on the kaiser report thanks for having max all right that's going to do it for this edition of the kaiser a four with me nice guys and stacey however i think my guest next it want to send me an e-mail please do so it has a report art see t.v. that are you and the next time this is baghdad or saying.

home.

to. all the people. in india she's available from the go to the joint be the children's the home of the greeks we go to the grand imperial college the tallest was the school until you can

go with little children with your civility to go clear brotherson candles which is used to retreat. it's a bird it's a plane now it's the first meeting of the congressional super committee so will these lawmakers use their powers to defeat america's kryptonite or is the defense budget simply invincible. and a group of researchers claim they have the power to force the the arab spring egypt's revolution and the violence in libya but how often one of those analysts are exploring what exactly future holds. and he is being point a domestic terrorist but is it possible brown crowder was just in the wrong place at the wrong time running with the wrong crowd we'll have his side of the story.

it's friday september thirteenth four pm in washington d.c. i'm christine freeze out you're watching our team starting off today a look at poverty in america a new numbers out today that paints a bleak picture i just how much and how many people are suffering across the united states the u.s. census bureau published data today that shows that the number of americans living below the poverty line rose to a record forty six point two million people last year take a look you can see that is the highest number of people so for the census bureau began tracking poverty figures in one nine hundred fifty nine months outline. on the top there now the second line is the rate of poverty which is about fifteen percent that is one in five americans living with less than eleven hundred one hundred thirty nine dollars for a single person or less than twenty two thousand three hundred fourteen dollars for

a family of four now these numbers come out the same day of the first meeting of the group tasked with cutting at least one point two trillion dollars from the budget deficit over the next ten years the so-called super committee made up of twelve members of the u.s. congress and the group is supposed to take a look at everything when deciding where to trim but when it comes to the military budget there are some heated opinions and that was certainly apparent at last night's republican presidential debate on candidates were asked if they would decrease defense spending to help balance pending. there's no authority constitution to be the policemen of the world and no nation building just remember george bush won the presidency on that platform in the year two thousand and i still think it's a good plan for living like senator santorum responder's i know you strongly disagree. on your website on nine eleven you had a blog post that said basically blame the united states for nine eleven on your

website yesterday you said that it was our actions that brought about the actions of nine eleven now congressman paul that is irresponsible a pristine united states running for someone who's running for the president i'd say to the republican party should not be parroting what are some of it not and said not to read. we should have we are we are not. we are not being attacked and we were not attacked because of our actions we were attacked as new talked about because we have a we have a civilization that is antithetical to the civilization of the jots and they want to kill us because of who we are and what we stand for and we stand for american exceptionalism we stand for freedom and opportunity for everybody around the rules and i am not ashamed to do that. that exchange between congressman ron paul and former pennsylvania senator rick santorum so

a lot of challenges here and i think it merits a closer look gareth porter is an investigative journalist who specializes in covering u.s. national security policy and he joins me now to talk about this and i know this is sort of an area area of your expertise and you just wrote an article that came out a couple nights ago called ignoring post nine eleven death of innocence and you talked about this notion held by so many and we just got sort of embodied in what sense rick santorum said in this debate last night talk about this sentiment and what it means and how it poses of course what santorum said is the official line of not just the u.s. government but more concretely the national security part of the government because unless you take the position that the the threat of terrorism including one of them has nothing to do with u.s. military presence in the middle east or wars that the united states fights on the soil of islamic countries then you're going to have a problem justifying

a policy and so what happens here is that within the u.s. government and more broadly as it is essentially spread through news media in this country to the general population we get the general notion that what we can't talk about any link between the wars that the united states fights in the islamic lands against islamic people and the threat of terrorism when in fact you know it's very very well established that there is such a link and in fact in my article i quoted perhaps the most. the most important most significant official document which represented that linkage which which presented in a front form a way that linkage which was the two thousand and six cia national intelligence estimate on global terrorism what it said was. is that the u.s. invasion and occupation of iraq had in fact been the biggest single force in

building up popular support for jihadism and essentially giving them more and more recruits to carry out terrorism and it went on and on and especially. actually foreshadowed what has actually happened but we would find out that not only in the islamic countries but in europe and the united states homegrown jihadism would become a serious problem because people respond if they are islamics to this perceived threat to islam and yet when you ask people making the rules when you ask government officials i know you spoke about it was this nothing new i used about i can see thousand seven one thing that a former state department corner for counterterror terrorism daniel benjamin gave an entire list of things that the u.s. should do to combat al qaeda and the one thing that he didn't say was pledging that the u.s. would pull out of afghanistan and iraq that's right tell me only that i know you caught him tell me a little bit about his answer when you asked him why didn't i think it's harder in

the coffee break i said shouldn't the us pledge to the islamic world never to do this again and to get out of islamic countries with our military forces be the most important thing it should be done he paused for only a moment he said you're right and then he said but we can't do that and then he said the reason is we would have to explain to the families of the people who died in these wars that they died in vain now they said such an important things are going on i think that's that really really it is very important and there are so many people who know someone who was lost in these wars and that is the one thing they fear most yes but that's not the real reason well and by the way mr benjamin then went back to the state department as counterterrorism coordinator and he's been doing that during the obama administration so he was clearly still part of the us when he made that speech and the important thing is that he did. contest my point but through is clearly a cause in the focal length between these u.s.

wars on islamic territory and continued killing of civilians particularly in the islamic countries and the continued support for jihadism very very strong support for jihadism throughout the middle east and even in the united states as we know i mentioned a little earlier that today was also the first meeting of the super committee on capitol hill. twelve it's mostly bipartisan twelve people charged with cutting spending one point two trillion dollars in the next ten years the military budget is a tough sell for a lot of people i think that senator jon kyl from arizona even said he would quit the committee if this was proposed this was put on the table talk about some of the challenges when we look you know it's one thing to say the military budget is not the table and it's another thing entirely to actually cut serious money from the point that i would make is that what we saw in play in the republican debate between ron paul and run santorum rick santorum excuse me and the politics of super committee are the same politics essentially it's really

a fundamental divide between those people who are. essentially have tied their careers to one of two sorts of political forces either the israeli lobby or the arms lobby in this country these are the two most powerful groups politically in terms of being able to get members of congress to do what they want through the financing of course of course there is a huge lobbying arm that has to do with defense contract contractors the war industry the people building these weapons are certainly making lots of money they're doing fine in this down economy but i should point out defense secretary leon panetta does not accept lobbying money and yet he much different from the tune he's saying back when he was chair of the house budget committee back twenty years ago when he said the time is now to think about cutting military spending now and i want to play you something that he said because he called that this this idea a doomsday mechanism so play what he's that it. if it did happen it would

result in a further round a very dangerous cuts across the board defense cuts that i believe would do real damage to our security our troops and their families and our military's ability to protect the nation so it's not just members of congress who may or may not get lobbying money to fund their campaigns i mean this is the defense secretary that states members of congress would get campaign money from the from the arms lobby and it's bureaucrats who are whose institutional interests are obviously the same as those of the arms industry that is to say to promote defense he has no credibility he's he's speaking and on behalf of the most powerful concatenation of interests the world has ever known this this alliance of arms lobbyists of people in the military industry on one hand the military services and the civilians who run the department of defense this in fact is the most powerful group of

political forces that has ever been assembled in one country and that's why you get a republican party that is almost completely run by people who are beholden to those interests investigative journalist gareth porter great having you there is so much more to talk about we didn't even get to the impact of kerry china and went that is having on our defense budget maybe we'll talk about that another time really want to thank you for joining me on a saturday. i want to talk now about a system that has been created to help gather data about cultural trends across the world it's a system that we can thank the internet for that has helped researchers use google books to search terms and connect the gun it's called cold ceramics now on one hand researchers have use it to study the origins of words where they came from and when but one report also found that by analyzing thirty years' worth of news articles culture omics quote have predicted the revolutions in tunisia egypt and libya and the location of us all and in lines bunker to

a two hundred kilometer radius in or pakistan so i want to talk about this and get to know more about it and to do that i have the author of that report to leave the track taro he's also the assistant director for tax and media analytics at the university of illinois. hey there in your report that you have several charts and graphs explaining how tracking news reports forecasts forecasts or could forecast the egyptian revolution talk to me how does this work is that thank you for having me on the show it's exciting to be here i want to the idea behind this is so like a hundred million news articles so this is thirty years of media from across the entire planet it took that extract it ten billion people places and things connected by about one hundred trillion connections and this is too big for any computer today but when i think the news is wrong tools that look through that and try to see are one of the interesting powders that you can get from the news when you do this and one of the things that came up immediately was this notion that the tone towards countries if you take all the news coverage across the entire world

and see what is it saying about you git is it is it is it optimistic about its outcome or is it pessimistic it turns out that seems to move in interesting ways and if you look back to what's coming out of the economic literature right now so twitter predicts the stock market or you know blogs predict movie sales there's a lot of work that's saying that if you just try to use news or social media. measure the trolls have a global pulse that does a really good job of being the forecast economic events and the question is then does that work for society to advance them so if you take all the news around the world and you say give me every news article published on earth about egypt and you look at the tone of that by month you want to put this graph that seems into a pretty good job of telling you hey egypt is it's accelerating in negativity and. it's even simpler if you take all the news coverage about it live and you make a map and you take all the news coverage you take every city reference in that news

coverage and make it into a map and you end up with a map were all looked roll roads lead to about two hundred kilometer radius around where he was actually found that i go after i mean this could be a little bit concerning you know you talk about this are imitating life or death life imitate art i mean do you think it's possible what you say is true and connecting these dots really is relevant is it possible that the needier could manipulate what is happening you know to make things thin larger magic than they are to fuel some of the unrest in some of these places and that's that's the that's one of the reasons for using things at such scale because if you so for example within egypt the egyptian press was pretty muted about the protests in the early days and so by looking were all you're getting around that you're working no single government could have as much control about its media and so the idea is that yes you do have that risk when you look at small scale but if you get everything being said on earth i mean you know this study looked only at news but in the future you

know they're using social media if you look at social media there are twice as many words that the twitter instate today there were in the new york times over the last sixty years in another three years of twitter keeps up its current growth and it will be as many words post a twitter as an all the books in the last six hundred years and so when you restart skills it becomes harder and harder for any single entity to try to control that or or try and. things are what you and i will yeah and i wanted to ask you i mean things like what you guys left out was news articles but i was curious sort of about the role of social media certainly when i want to know anything now i just go on twitter and kind of check that out i mean is that part of what you guys are using now in terms of your research so the idea obviously i want to look at historically and so i want to be able to look back over decades because if you look at egypt today you know you might see that dip and you might wonder well is this something that happens periodically or is this really significant you know in

mubarak's regime and so you know the idea now is obviously in the you don't now days you have social media you have all kinds of emerging media video audio. imagery so that's certainly something that's starting to be explored that's certainly something that i started to look at now you know there's a lot of questions you know in terms of you know twitter is very popular in certain areas of the world not the other areas of the world you know twitter and social media tend to emphasize more technology verse and entertainment versus you know world events so there's some interesting questions that have to be addressed but you know these are the exciting you know these are exciting things we've recently aaron now we have so much data and so much computation power you know the ritual point where we can we can start taking those baby steps towards trying to better understand you know human society well i can only imagine after watching this our viewers i want to know and i want to know what else have you found what can we expect next have you been able to connect some dots to look ahead in the coming

months and years to get the world going to look like that's that's the next step is to do we're actually working towards a public order of public website where people would be able to go and actually see you know see things up you know every few minutes about what's going to happen in the world and that's the next step is to give people give the public greater access to this information so you can even give me a little hint as to and terms of what you found. you know one of the problems with giving forecasts is you run the risk you suffer from prophecy if you say my data says this country is collapsing tomorrow you make a public announcement you wrote the risk of causing that country to collapse but you know this i will say for example in the study one of the findings was saudi arabia was probably going to remain stable for the foreseeable future and here we are a number of months later and saudi arabia is still stable so you know if i had to make a forecast that would certainly be the one that i'd make you know and i would say

you know that we're just starting to explore this and you know i think there's a whole world exciting new findings to be found and possibly that arabs arab spring that has in some ways carried into summer may carry into winter perhaps possibly this would be the interesting question this is this you know right now it requires so much computing power to do the work it's there right now. you know we had to do it after the fact we only use the data that was available at the time but we had to do it after the fact right now we're speeding it up so we can do exactly that so that we can try to you know offer offer predictions into the future i will certainly some really really interesting stuff glad to have you on to break it all down for us assistant director for tax and media analytics i think university of illinois and champagne khalifa tarring thank you so much for having me sir. also ahead here on our team he protested at a republican national convention and i think he knew he was arrested and labeled a domestic terrorist here brown crowder story of becoming the subject of

a high profile government case coming up next. we just put a picture of me when i was like nine years old i like to tell the truth. it says i am a total get a princess i love rap and hip hop music and. he was kind of the jester that. i'm very proud of the algeciras it's a place. to

. live. welcome back well it would be difficult to refute the point that since nine eleven we as a society have changed profoundly we think differently about how the world sees us

we travel differently and many of us don't think twice when we hear stories about our government using enhanced form of well intelligence gathering to prevent violence two young men learn this the hard way and they attended the republican national convention in two thousand and eight and were encouraged by a friend and mentor to take their protest to the next level that friend and mentor turned out to be an f.b.i. informant and one of those men was just released from prison the other remains locked up for another two years now earlier this month their story came out in a documentary on p.b.s. and here are some clips from it this case was investigated by the f.b.i. and by the secret service as a domestic terrorist i want to go to the bar and see the protests because i want to change the world and i believe it can be changed slowly somebody. that is. because we have seen today detail extensive use of informants inside told to.