we. are watching our t.v. live from moscow and here are the top stories today libya's national transitional council is given a seat at the you went after the security council adopts a new resolution which also ease of sanctions imposed during get off his regime but libya's new authorities are still fighting for control over some cities including get off his hometown of syria. meanwhile there's another bid for u.n. recognition with the palestinian president vowing to launch a bid for statehood despite a u.s. promise to veto it and that's a some israeli west there say they're ready to leave the area or that their

government won't block that. and growing tension as service border with breakaway kossovo with a standoff a disputed checkpoints following their seizure by possible police help by nato and e.u. forces local serbs hour block the roads leading to crossings in a protest against what they called the unilateral action of costco's albanians. and up next our special report on the dodgy debt dealers his global gambles the world spiraling into the financial crisis that's coming your way next. who had brought down wall street. hedge funds. back in two thousand and seven with the bullies still in full swing how does this part in real time or attended this party just off wall street for traders under the age of thirty. it reeks of affluence.

shiny cars beautiful people huge buildings were like only clubs where only god the sums can be invested in complicated vehicles in secret outside the prying eyes of wall street regulators who not only the traditional investment firms have been through it's funny it's no wonder so many of these young people wanted him and at the time. i personally spent five years in a 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 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 years in an investment bank program well if you're going to be 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 compensated much higher. hedge funds were being paid one percent of the assets and twenty percent of the profits on those day so obviously that was the best way to make money if you were any good at insurance company a.i.g. was a leading seller of credit derivatives so a bank for example like goldman sachs would create a c.d.o. it would stick all kinds of subprime loans and packages packages or credit is on them into a package and then it would go up today i. and they actually had a aaa rating credit rating and say you know what you take this package of junk we've just created. kind of insurance you basically write. you basically credit in short 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 is happy in the bank regulator

william black years this was all deliberate this stuff that the exotic stuff that you're talking about. it was created out of things like liar's loans that were known to be extraordinarily bad day on 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 it has a 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. the i g 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 ai g.

along with others i'm sold a rivet is and insured their policyholders to the 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 the variance possibly trillions of dollars. but i would refer to it as candling i would you know these surveys transactions were individually individually underwritten very carefully maybe i can provide some backgrounds it might be helpful. if they were carefully underwritten how come no one wants to buy them how could a i.g. 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 but i don't think you're hedge funds i think hedge funds provide. a pretty intelligent

investor base more savvy investor. for a. guy that plays the wall street used to invest in the american economy in companies that used its money to produce goods and services but then wall street became the american economy our financial system was a reengineered through what's been called financialization with banks credit cards and real estate and insurance companies as the new power players. capitalism is sort of gone off the rails it's ceased to be kapil 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 most sensibly says the whole system has gone predatory i think we had a transition from work really was a free market system to something now that is out of control and probably what i would have defined as a predatory system frequently in markets that are manipulated or the an about maybe a few out there your investors mega investors it's even even that's very difficult to tell we still don't know point fact is making money while so many in fact are losing money on wall street right now as businessweek noted what we're observing it only gets bizarreness is the ancient paradox of what happens when an irresistible force meets an immovable object irresistible force in this case is the u.s.

economy and even movable object is a wall of debt that now can't be paid back we're in a position where the volume of mortgage debt corporate debt personal debt and even state and local debt is larger than the ability for the rise of a credit based economy fuelling the ruling disparity the crew who was transferred from the middle class to leave upper class the middle class watched it savings literally drop to nothing this year be spared our need for paying off. the upper class meanwhile figured out how to make money from money who are accurately how to sell their debt honestly paid in the future. real estate expert ron silver men calculates the cost you are talking. over probably every transfer of hundreds. of

dollars hundreds of billions hundreds of billions of dollars billions. from the pockets of the poor people who are far better positioned. choke all victims to go the upper one percent of the population own thirty percent of america's returns to well that is david and 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. is 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. i. talk

. to the mob barrister. ironically piers stearns was. the billions of dollars they received in the bailout did not go to the company's cheer holders. it was the deal that ultimately saves the creditors to bear stearns by forcing it into j.p. morgan at the expense of equity holders michael hudson points out to the homeowners and corporate america on how in hock to the 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 bill. i don't know if there is a lot of sympathy per se to to their point of view i mean we were you know in a similar similar boat so let's take a similar boat perhaps but only one has life preservers the fact 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 straps homeowners facing foreclosure as democrats. the crisis increases disgrace sides. street is leading the mood on the street in a battle for survival we are seeing a second class war in this country such as you've never seen in the entire history of the united states a class a class war except in this case a class war isn't the kind of war the marxist some socialist up about if enough between employers and employees because employment is going to be shrinking. food chain thousand employees would eventually be laid off by j.p. morgan chase 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 well and positioned itself to come out on top by being able not only to foreclose on the property of bettors but to get a government bailout for all of its own losses. employment is going to go to market are going to shrink people are going to default even more on their mortgage debts on their credit card debt on their student loans so you're going to have an exponentially rising trend of defaults you're going to see a transfer of property from debtors to creditors a depression not only 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. was an early read on. the scene a b.b.c. reporter turned to me when others was silent hello why do you think people don't want to talk to you because they hate you they think the media's part of the problem they don't think that you're going to help them thinking about their uk. project either what's been the worst financial crisis in a bottle. certainly or was the media when all this was going on why were there so few naming those investigations in what was to become an economic catastrophe things are leading at worst was happily a bit more you've been incredibly pessimistic august two thousand and seven or the beginning of the end of an era what had gone up was now coming down.

a ninety three percent from the year before. in london it was a run on northern rock bank a move bank write downs followed billions that few b.s. and citi group fannie mae the largest source for home loans reported a three point five five billion dollars loss with 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 are still getting it wrong get my money out there no no no no bear stearns is fine do not take your money i was right look at this one k. boiling of plus four hundred pastors is not in trouble i mean if any are more likely to be taken over don't move your money that's just been silly don't be silly the media was complicit says steve stark men of 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 the the world had changed the lending industry had changed as things that you kind of documented how out of control wall street had become and i think it's a real contributing factor tactic to to how we got to where we are today. start thinking piers the journalists who cover wall street to reporters sent to iraq he said they too were embedded but in the corporate culture. the great panic of two thousand and eight is the equivalent for the business media what the iraq war was from that 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. peculiar narrative that has its origin but on wall street i don't think that analogy is out of whack at all. it was one the effect of this you in the media covered because it was about the media about the infusion 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 its crash in two thousand and seven. they actually the entire industry became predatory predatory like criminal. yet deceptive marketing of mass as a as a function of. it started in america and is now everywhere some say the united states has infected the world with the kind of financial aids.

the people who these mortgages was sold to. a large majority of these people who are poor a lack of will or that he know people another way it's 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 killed this is a problem for as you say this is this is a banking problem stock market problem this is investment problems for their parasite but it's interesting because the gentleman says things are much more controlled here right now to a bank to get my house they really make sure it's a body i think that america is heading for a really deep crisis of a cold 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 an armed 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 fowley woke up to realize that the economy they had deregulated was imploding congress was finally being asked to act ironically the pitch was made by a republican pressure is 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. the stew's so in order to avoid the 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 and 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 would it lead to more fraud. chris research very 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 know except through my own interview on c.-span on thursday at about eleven o'clock in the morning the federal reserve noticed a tremendous drawdown 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 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 shill shocked congress was given a three page plan and in a sense it gave paulson total control to spend seven hundred billion dollars some saw it as a power grab others saw the deliberate creation of the crisis to push through a corporate agenda. troll the media enough to ensure that the public will not notice that this they are allowed willing get them for generations oh it 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 backed this is too much money into short a time going to too few people well too many questions remain unanswered when we ask you wall street to clean up its own mess when we passing new laws to stop the speculation which triggered why aren't we putting up new regulatory structures to protect the 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 family space for bankruptcy why are we do you think that's 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 net relation of the federal reserve by the federal reserve in the banks is this the united states congress or the board of directors of goldman sachs congressman who since 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 to seat and the essence of fraud is i create trust in you and then i trade that trust and get you to give me something of value and as a result there's no more effective against trust and fraud specially 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 balance as a way to loot taxpayers as fraudulent as the problems they were addressing. because yeah right away the 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 tight it gets up presence that says more importantly that the bigger question to me is will we see a structural change go through blog bad recession body waste our body struggling to rebuild that odd sustainable system that should have never been erected in the first place as 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 debt grew by the trillions it became clear that the structure of our economy has yet to be transformed cookoff in the cursor. in june since 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 cops on the beat every single day for starters we 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 the streets 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. the deeper change in a crackdown on white collar crime since this is my film i get the last word this financial crisis will not confirm golf like a light switch millions are struggling to survive as conditions get worse. for you to get you straight to jail ultimately. it's. going to be some people suffer every day when the securities were being created there was a lot of partying there was a lot of back slapping there was a lot of obstruction a lot of extraction should lead to a knee jerk reaction to the ruling egypt blunder in an age of major structural change or will there have to be an age of and pitchforks first.

let's. send it to. food. to college. this. is. the. experts. we call this a truck. and she. loves.

money. easy. yes. i'm a company not. just a. tux.

decades back in tottenham one thousand miles from the north pole. the iraqi team is taking on a trip to spitzbergen non-typical ago. where twenty years after the u.s.s.r. scottish couso between life is still going strong. in the world synonymous statue of lenin presides over a ghost town near the summit heritage has become a tourist site for those overcome by the cold war and the sounds. of. the close up special edition on our t.v. .