this is our see from moscow thanks for being with us the top stories tonight the u.n. seems powerless to prevent the threat of violence on the border with breakaway cause some security council members refused to support russia's call for because it was provinces announced the self-proclaimed republic set up customs control of the ball that was located so try to stop them but blocking roads leading to checkpoints. is fighting for the way in libya where former rebels claim they're advancing onto the few remaining get off the strongholds defensive zone certain punny while they the backed by tanks and heavy weapons as well as it makes. the much anticipated south

street gas pipeline moves a step closer to reality is russia agreements with top european energy giants the project's aim to delivering russian gas to directly to european consumers bypassing of the transom. special report on the white collar criminals who push the world into economic terrible. who had brought down last rate. funds. back in two thousand and seven with the police still in full swing my business partner rory o'connor attended this party just off wall street for traders under the age of thirty. it reeked of affluence. shiny cars beautiful people hitched buns were like only

clubs were on god these sums can be invested in complicated vehicles in secret outside the prying eyes of the wall street regulators soon all of the traditional investment firms had their groove it's funny it's no wonder so many of these young people wanted him and at that time. i personally spent five years in private equity and then made the decision instead of going back to business school to move over to the public side so that was a conscious decision on my part and i think most people probably get involved because there is an opportunity to move up the ranks and make more money at an earlier age in hedge funds than there is and private equity which is the natural progression after a couple of years in an investment bank program well if you're going to be an in the investment world the best way to and you're a good investor the best way to make money is to have a hedge fund because you get compensated much from compensated much higher. hedge

funds were being paid one percent of the assets and twenty percent of profits and jose so obviously that was the best way to make money if you were any good insurance company ai g. was a leading seller of credit derivatives sell a bank for example like goldman sachs would create a c.d.o. it would stick all kinds of subprime loans and packages packages and packages out a little to a package and that would go up to a i. and they actually had a aaa rating credit rating and all that would say you know what you take this job we've just created. kind of insert you basically write to us you basically credit and store it you got a much better rating than we do so our investors will buy from you with that insurance you make money we make money everybody's happy former bank regulator william black told bill moyers this was all deliberate this stuff that the exotic stuff that you're talking about. was created out of things like liar's loans that

were known to be extraordinarily bad and now it was getting triple a ratings now aaa rating is supposed to mean there is zero credit risk so you take something that not only has significant crushing risk that's why it's toxic and you create this fiction that it has zero risk that itself of course is a fraudulent exercise. in. most . cases. even she made guarantees totaling more than your ability to pay an amount larger than the entire value of the company actually that's a bit of an understatement he i-g. along with others from sole derivatives and insured their policyholders to tune of an estimated five hundred ninety six trillion dollars compare this to the gross

national product of the entire world and the problem should become more obvious so you were just gambling. possibly trillions of dollars. but i would refer to it as gambling with you know. these transactions were individually individually underwritten very carefully maybe i can provide some background see that might help from a very good. if they were carefully underwritten how come no one wants to buy them how could a i.g.b. have possibly expected to make good on its promises one thing we know for sure a.i.g. executives made huge paychecks selling these credit derivatives to hedge funds and others right up until the economy caved. so we don't need to fear i'll take your hedge funds i think hedge funds provide. a pretty intelligent best case for savvy investor.

out of. the play the the wall street used to invest in the american economy in companies that used its money to produce goods and services but then the whole street became the american economy our financial system was a reengineered through what's been called financialization with banks credit cards real estate and insurance companies as the new power players. capitalism is sort of gone off the rails it's ceased to be capital it's financial as a ship the fact that it's now all about speculation the fact it's about ponzi schemes of the facts about selling and buying paper from an economy of real goods real commodities and real services to a system where people were buying and selling money buying and selling assets buying and selling other firms were no new value was created and no sense should be

says the whole system has gone predatory i think we had a transition from what really was a free market system to something now that is out of control and probably what i would define as a predatory system frequently in markets that are manipulated for the antidote maybe if you out there your investors maggie investors it's even even that's very difficult to tell we still don't know point fact is making money while so many fact that losing money on wall street right now as business week noted what we're observing in all of its bizarreness is the ancient paradox of what happens when an irresistible force meets an immovable object and you resist the full force in this case is the u.s. economy the immovable object is a wall of debt that now can't be paid back work in a position where the volume of mortgage debt corporate personal debt and even state

and local debt is larger than the ability to pay the rise of a credit based economy from the ruling disparity between rich and poor on this transferred from the middle class to leave upper class and middle class watch and see things literally drop to nothing that's ever spear dollars going into paying off. the upper class meanwhile think you know how to make money. and more accurately how to sell their debt just paid in the future. real estate expert ron silver men calculates the cost you are talking. probably every transfer of hundreds. of dollars hundreds of billions hundreds of billions of dollars billions i should billions.

from the pockets of the poor. who are far better. choke all victims to go up or one percent of the population own thirty percent of america's returns to well that is evident interest in capital gains five years ago they'd raise their proportion from thirty seven percent to fifty seven percent and today it's estimated that the upper one percent of america's population. almost seventy percent of the returns to. the percent seventy percent that's huge yes it is it's unprecedented it's essentially it makes america look like a third world banana republic. talking. to the mob they are still. ironically beer stearns was also the billions of dollars they received in the bailout did not come to the companies

cheer holders but to goon. it was the deal that ultimately saved the creditors to bear stearns by forcing it into j.p. morgan at expense of equity holders michael hudson points out that those the homeowners and corporate america are now in hock to the debt machine many corporations are effectively in negative equity or in and technically insolvent position headed by the financial sector by the banks themselves. really sympathy for the demonstrators in the book. i don't know if there's a lot of sympathy per se to to their point you know i mean we were you know in a similar similar boat so to speak a similar boat perhaps the only one that has life preservers the fact that the government now is funneling money to a major bank and saying if you can do that with a bank why not do it with strapped homeowners facing foreclosure as democrats

thank. god. the crisis increases disgrace sides hudson says no street is leading the mood on the street in a battle for survival we are seeing a second a playoffs war in this country such as you've never seen in the entire history of the united states a class war a class war except in this case the class work isn't the kind of war the marxist some socialist talk about it's not between employers and employees because employment is going to be shrinking. food chain thousand employees would eventually be laid off by j.p. morgan sure it's a class war between creditors and debtors it's going to be a fight between the financial sector and what's called the real economy the economy of production and consumption and the financial sector has prepared and position that so to come out on top by being able not only to foreclose on the property of

debtors but to get a government bailout for all of its own losses. because . employment is going to go to market they're going to shrink people are going to default even more on their mortgage debt on their credit card debt on their student loans so you're going to have an exponentially rising trend of default you're going to see a prince for a property from debtors to creditors a depression not only a depression but an economic polarization it sounds bad yes it's very bad. the media was now out in force covering the protests many homeowners would not talk to them like that but that. there wasn't really much at. the scene a

b c reporter the knee when others were silent hello why do you think people don't want to talk to you because they hate you they think the media is not a problem they don't think that you're going to help them thinking about their. project item what's been the worst financial crisis hit bottom. sir we was the media would all this was going on when we were there so feeling in those investigations in what was to become an economic catastrophe things are only going to get worst once happily a bit more you've been incredibly pessimistic august two thousand and seven marked the beginning of the end of an era what had gone up was now coming down. foreclosures of ninety three percent from the year before. in london there was a run on northern rock bank more bank write downs followed billions that few b.s.

and citi group fannie mae the largest source for home loans supported a three point five five billion dollars loss for the fourth quarter in march two thousand and eight the fifth largest investment bank in the world here stearns was on the verge of collapse many of the nation's most respected financial journalists were still getting it wrong get my money out there no no bear stearns is fine do not take your money i didn't write if there's one k. boiling in a plus for hundreds of my pastors is not in trouble i mean if any are more likely to be taken over don't move your money from that says and say like don't be silly the media was complicit says do you start a financial journalist now with the columbia journalism review the business press former colleagues of mine friends of mine did not really recognize and understand what they were up against how dramatically in the world it changed the lending

industry had changes things that you've kind of documented how out of control wall street had become and i think it's a real contributing factor tactic to how we got to where we are today. start even compares the journalists who cover wall street to reporters sent to iraq he said they too were embedded within the corporate culture. great panic of two thousand and eight is the equivalent for the business media what the iraq war was for me for the washington press corps is the national story of of the last seventy years so the parallel is fair you could further extend the analogy a little bit to think about the idea this concept of being embedded and that the press corps itself was sort of imbedded with it up. a killer narrative that has its origins are on wall street i don't think that analogy is is out of whack at all.

there was one more fact to this hugh in the media covered because it was about the media about the inclusion of nearly three billion dollars in advertising revenues from dodgy lenders and credit card companies between two thousand and two and the housing bubble took off until it's crashed and can thousand and seven. thankfully the entire industry became predatory predatory like criminal. yet deceptive marketing on a mass as a as a function of age it started in america and is now everywhere some say the united states has infected the world with a kind of financial aids. the people who these mortgages were sold to. a large majority of these people were poor black people or that he know people in other words this was targeting

minorities especially so this resulted in the biggest transfer of wealth from the poorest people in america to the richest institutions in the world and i think that the majority of people. they feel that this is a problem for as you say this is this is a banking problem stock market problem this is investment problems for the european side it's interesting because a gentleman says things are much more controlled here like out of a bank or at my house they really make sure if somebody i think that america is heading for a really deep crisis of the i'm told before. you have a you have a deep ideological cultural division you're going to have i don't see that having an ovoid mess of unemployment you have extreme wealth and extreme poverty and you have a population. that's not the case here i think what we're going to see in the united

states i hope i'm wrong but i think united states is heading towards an abyss as the crisis worse and politicians family woke up to realize that the economy they had the regulated was imploding congress was family being asked to act ironically the pitch was made by a republican treasury secretary henry paulson a former c.e.o. of goldman sachs in the years that that firm made massive profits in housing securitization and speculation. we must do so in order to avoid a continuing series of financial institution failures and frozen credit markets that threaten american family's financial well being the viability of this is both small and large in the very health of our economy the question would government intervention fix the problem or make it worse would it reward the companies that

profited from massive fraud who would lead to more fraud pressure e secretary henry paulson and fed chairman ben bernanke he began a push for what might be called the final plunder the real story was not widely known except soon into the on c.-span on thursday at about eleven o'clock in the morning the federal reserve noticed it from andersen draw down of a money market accounts in the united states to get. five hundred and fifty billion dollars we were having an electronic run on the banks that their estimation was that by two o'clock that afternoon five and a half trillion dollars would have been brought out of the money market system of the united states would have collapsed the entire economy of the united states and within twenty four hours the world economy a shell shocked congress was given a three page plan and has since

a good cause and total control to spend seven hundred billion dollars some saw it as a power grab others sold a deliberate creation of the crisis to push through a corporate agenda. control the media enough to ensure that the public will not notice that this bailout well and get them for generations was unique was the refusal of congress to hear any testimony from expert witnesses or to have eric billion dollar bailout for wall street is being driven by fear not back this is too much money into short a time going to too few people while too many questions remain unanswered when we ask you all street to clean up its own mess when we passing new laws that stop the speculation which triggers why aren't we putting up new regulatory structures to protect investors how do we even value the seven hundred billion toxic assets why are we directly helping homeowners with their debt burden why are we helping american families pay for bankruptcy why are we reducing bets for main street

instead of wall street isn't it time for a fundamental change in our debt based monetary system so we can free ourselves from the neck of the federal reserve by the federal reserve in the banks this is the united states congress or the board of directors of goldman sachs congressman consented to his remarks were not widely reported either he was still refusing to make new loans the oversight of paulson's program was criticized because millions could not be accounted for fraud is the seat and the essence of fraud is i create trust in you and then i betray that trust and get you to give me something of value and as a result there's no more effective passage against trust and fraud especially fraud by cop elites and that's what we have although all the facts are not even about who got how much and under what terms maybe in the public see the bailouts as a way to loot taxpayers as fraudulent as the problems they were addressing.

because we're out of a capital for the summer of two thousand and nine the crisis had not abated unemployment continued to climb foreclosures to mount bankruptcies to grow markets to shrink firms to fold and tensions to tear apart families and communities i think you will see a bunch of people get tighter get some first sentences more importantly that the bigger question to me is will we see a structural change go through bad recession while we waste our bodies struggling to rebuild that odd sustainable system that should of never get her back to the first place as a new regulations were beginning to be put in place trillions had been spent by government on stimulus programs these measures are clearly not enough so-called reforms often pump money into the very institutions that caused the problems the

bailouts benefited the wealthy deficits and big grew by the trillions it became clear that the structure of our economy has yet to be transformed to the gulf and the cursor. in june two thousand and nine president obama announced new financial reforms saying the crisis was caused by mistakes. by news and recognizing the government's inability to police wall street investor jim channels says his reforms are doomed to fail and it's a little bit tough because the the guys who are the bad guys are one step ahead of the of the cops on the beat every single day for starters you need a full investigation like the one that followed the great crash of one thousand and twenty nine we need to know who benefited from one of the most insidious crimes in history how did wall street's wizards engineered this disaster and who was complicit with them will the big fish ever be prosecuted the media too has to wake

up to shift the debate to include the need. a deeper change and a crackdown on white collar crime since this is my film i get the last word this financial crisis will not confirmed off like a light switch millions are struggling to survive as conditions get worse. due to kitchen. table i'll probably. exists. only to the same people something like the one. being created there was all lot of partying there was a lot of backslapping there was a lot of extract a lot of extraction should lead to a major reaction and ruling egypt blunder in an age of major structural change i have to be an age of protest and pitchforks first. letters. sent to get.

food. to college. kids. just. for the. lunch you have zero loves. one she drops.

on. thank you yes. thank you. i'm a company not. just a. toxic. tux.

please. louis please.

just say. smug. wealthy british scientists. sometimes it's priceless. margetts why not. find out what's really happening to the global economy in the country for. smoke. clean you the latest in science tends to consume from the ground.