good evening and welcome to the first episode of the council of count i'm laura lister your host here in washington d.c. and tonight over one hundred thousand greeks took to the streets today to protest a new round of austerity measures as the eurozone debt crisis continues could this be coming to a city near you if the crisis takes down europe's banks and spreads to the u.s. is banking system and are some big u.s. banks still teetering on the edge the real years after washington had taxpayers bailed them out also u.s. president barack obama was out trying to sell his jobs bill today on the final day

of his bus tour through some swing states this ad occupy wall street protests across the country continue to punctuate the growing anger over economic issues like joblessness now obama may not be making an appearance at a protest but occupy wall street has some unlikely other supporters you may think of him as one percenters we'll talk to one about why and the g.o.p. presidential debate it was last night in vegas it certainly brought out the wild side and candidates we'll talk about this deprives economic plan that could be hatched from the debates to balance the country's books are right let's get to the capital account.

all right so wall street protests occupy wall street the movement they started over a month ago in new york and they've spread not only nationally but internationally to now we've seen some on wall street in the mainstream media and in washington criticize protestors but when you look at the economic facts they have quite a case for their complaints so let's look at a couple of them let's take student debt because that's been one of the issues that's emerged in the protests here in the u.s. let's look at how it's added in one thousand nine hundred ninety nine eighty billion dollars was the amount of student debt look how it is jumped five hundred fifty billion dollars in june of two thousand and eleven and now we're hearing that total outstanding student debt is expected to talk a trillion dollars this year according to the new york fed now analysts are asking as a result if this is the next sub prime mortgage crisis and you don't have to be a rocket scientist to understand that with unemployment for people aged twenty to twenty four at fifteen percent as compared to nine point one percent overall that

means more graduates can't pay their debt people like actual people protesters who i spoke to at occupy d.c. listen to this guy who went to school because he thought that meant he would get a job but this is what he found. finishing the school of the student was my certification i was unable to get any kind of employment and that led me to be homeless and i've been homeless now for three months with the cation degree and in medical assisting. not able to pay. a. fifteen grand at sallie mae all right let's look at inequality how did that hash out when you look at income gains well let's take a look over the century of the night the twentieth century for nine hundred seventy seven thousand nine hundred eighty one you can see the bottom ninety percent was doing ok there meg making out pretty well but let's look at what happens from one thousand nine hundred two to two thousand their piece of the pie was shrinking

a look at what happens from two thousand and one to two thousand and eight the bottom ninety percent where's their piece of the pie it's totally gone entirely by the top ten percent now it's far as response to the protest us president barack obama has uttered some words in support of the protests of course we've heard those but you have been gone there he's been out trying to sell his jobs bill to swing states over the last few days a bill that has so far failed in the senate but one sympathiser we could maybe wouldn't expect is here to talk about the issues head on and his solutions my next guests here then finance he's president of strategies it's michael pinto himself michael thank you for being on the show it's nice to see you nice to see you as always laura as always now you are not someone michael who i or probably anyone else would peg as a sympathizer or supporter of occupy wall street but when i was talking to you at a conference last week you were saying that you sympathize you understand why they

were out there and you know what michael i think are some of that footage or maybe saw you out there in new york with one of those signs that said tax the rich was that you. it was me. or i to tell you these groups that. you with their solutions. but these protesters have a visceral understanding that the middle class has been way down by our government and our federal reserve now i want to get to all of that but first michael i just want to clarify for our viewers who maybe don't know you can we bring up the new yorker cover shows some of the bankers their version i want to know if just to be clear you identify yourself as one of these guys on the new yorker i don't know if you can see that cover but it's bankers that want things as they are or if you identify with the ninety nine percent. well i'm probably one of those one percenters i can assure you that i could say this to you we need to reestablish our manufacturing base in this country you know manufacturing as a percentage of g.d.p.

in one thousand nine hundred fifty three was twenty eight percent of the economy it has fallen steadily all the way down to eleven percent of the economy we need to end the federal reserve which has caused real the incomes to drop ten percent in the last four years alone we are rather came the middle class these people are sick and tired of being abused by our government and by our central bank and it's not just americans it's the really it's it's a town it's western you're it's the japanese these people are saddled with debt their incomes have been eradicated and unemployment rates are way too high these people should not be shunned were treated as pariahs they have a religion and by a bonafide. right and it should be addressed in the appropriate manner and you are and this is coming from a one person or thank you guys have

a reason to be out there i want to touch on a couple of things that you talked about but first why do you blame a bad critique and on a problem that we're saying well with the federal reserve doesn't you have to understand this morning who in your view which has understand the federal reserve was established who milk banks money that is their goal with a view is they increase the money supply but outstrips the amount of savings that bailed the loan so they do it is they increase in counterfeiting your currency they drop interest rates or now when you go to the bank you money you're saving in the bank you get almost nothing yet what they're also doing when they create and counterfeit money is creating inflation so long term interest rates rise short term interest rates are new look to lower that. sure you'll curb or you'll spread that's where your banks make money so they have increasing margin and a lot more money to loan out and they end power and bankrupt the middle class you

know when real incomes for your discretionary purchasing power drops and take into the extreme guess what the middle class can only afford the basic necessities they don't have any discretionary purchasing power and that means the economy thought there's and the g.d.p. drugs and unemployment rates are so much skyrocket now michael i was sorry didn't mean to step on your at on your tongue i just want to get in your book but you're suggesting if the united states and the bad and the federal reserve bank and say some banks go bankrupt in the us and americans lose their money that's going to be a lot of pain right always holds up first of all ethnicity insurance has been research one hundred fifty thousand dollars so i don't think many of these protesters have an account at their local bank more than two hundred thousand dollars and that's each account you can spread it over many different names so we're not they're not going to lose money we need to let these fat cat bankers feel

we were street banks on the backs of the middle class and i stand toe to toe with these protesters i guess agree with some of their egalitarianism socialistic solutions they might not agree with my solutions whatsoever but they have legitimate great and it must be addressed what is the solution to something like inequality because on the one hand you're saying that it's because prices have great bend on the other hand it's because wages for working people have stagnated over the last thirty years. right well we need to bring in firstly you need to bring back manufacturing you have to lower corporate tax rates we can be more competitive you have to address the under listing recommendations that unions are offering you have to reduce regulations and then there and then incomes will flow and nominal terms but real incomes will rise because their taxes will be lower and their inflation rates will be lower so their purchasing power increased then we can

compete with our overseas competitors and we're. here but what does that mean what would that mean for average folks without unions with no regulations does that mean people are working class laid away at wages in order to compete with folks in china we don't have to compete with the chinese one for one on the in the textile industry we have a very high level of manufacturing in this country we can develop more jobs like boeing in the aerospace field we don't have to compete one for one with sleep labor in china no do not do that but when you do you can go to for average people that are lower but what a way to do for average people in the u.s. today go lower to the market. nominal in nominal terms lower wages have to fall so they're going to have to go lower use that. in real terms in other words if i told you that you can make forty dollars an hour working for g.m.

but you could so you you could big three dollars and where you are not a job where you can make three dollars and have a job yet your tax rate will be lower. and you're pushing the increase by reducing reducing the amount of inflation so you really should use with are you going to run on that and increase the number of people employed in this country all right i'm going to have to we're at a time i don't have to run those numbers by my analyst here and when i do you will have your back on the show to talk about him until then i look forward to seeing you again out there with your sign tax the rich the rich i certainly appreciate you being on the show michaels i read it i love you again that was michael pence our president of pent up portfolio strategies. all right it's time now for word of the day this is the fun part this is where i

break down a financial term or concept for our very smart viewer but maybe not the financial expert so where is the bear is the word of the day hello welcome to the show you're welcome to the count like our live now all right so what is my word of the day thanks obvious. it is leverage and one reason why it matters right now is because of this the german finance minister wolfgang has broached the idea of leveraging the euro four hundred forty billion euro european financial stability facility to a maximum of one trillion euros so that's what's being reported so what exactly is leverage well let's look at the definition leverage it is the amount of debt used to finance a firm's assets a firm with significantly more debt than equity is considered to be highly leveraged so what exactly does this look like let me give you a real example so if we could bring up

a chart that shows what it looks like two to lever up you have assets you have things like a car or a hole in commercial real estate so me i certainly don't have the money to buy those things many people don't need banks don't or don't want to so with a little bit of money i can lever up i can borrow in order to buy these things so with a little bit of money i'm getting huge assets but you can see that this is what tilts the scale so you can only imagine that something goes horribly horribly wrong if these assets go down in price if something goes wrong that isn't what you expected someone's losing money and it's not pretty and that's what can happen when you are to leverage the problem with this as jeffrey's. at the wall street journal points out is that leverage only gives the short term allusion a firepower at the cost of a huge increase in risk now he was talking about figure ozone crisis and what they're dealing with over in europe but now you can see specifically why leverage

is a problem and what it is and if you have any ideas for word of the day that you want to hear feel free to let us know you can go to our you tube page which i'll give you the end of the show or tweet me out lauren mr. aczel had right here on the capital account as greek protests continue on the streets is the euro zone heading for a banking crisis and put it spread to the u.s. are there already some banks teetering on the edge here in america but first here closing numbers.

to the capital account i'm learning the story. all right welcome back so people are writing on the streets again and greece more than one hundred thousand people reportedly took to the streets today to protest

new budget cuts take a look at this video. so you can see just how violent it is that i just ran by literally on fire so needless to say it's not just protesting i mean there are people getting hurt out there there are people getting. lit on fire so this is what's going on in the midst of greece trying to pass a budget cuts spain was downgraded two notches moody's is hinting that france's credit rating may be at risk a german bond auction failed europe ban credit default swap trading and hopes that the european union summit this weekend will deliver a plan to tackle the debt crisis and fears of contagion has certainly not been realized yet so it appears the euro zone debt crisis is nowhere near out of the woods and with some of europe's biggest banks on the line the question is could we be heading towards a banking crisis and could contagion ripple across the u.s.

meanwhile plenty of signs that u.s. banks bailed out by taxpayers and washington three years ago are doing so hot from accounting gimmicks to risky assets because some u.s. banks still be teetering too close to the edge regardless of what happens in europe help us figure this out is to meet you in r t contributor he also covered the austerity riots in greece just earlier this spring so you know that situation first hand so i guess the real question here i mean we keep hearing about new plans and new hopes for a resolution to this eurozone debt crisis we see many people hoping this weekend it will come to an end but this has been going on are we going to see some kind of european bank collapse similar to lehman brothers because they got a lot of that was a lot of concern about. a lot of concern about some of the french branch so that's a source of a lot of anxiety. if it was last weekend or last week so that could not get nationalized it's so there's a lot of conservative european banks because they're very exposed to peripheral europe and now for example. spreads on french the french

credit default swaps have risen substantially and one of the reasons why is because there's a concern that the person the person is going to go into the core and that is ultimately caused by the banks and the exposure of the banks in europe and then that could feed into the united states which has been a source of trouble for morgan stanley is an example get into. because how does it effect the united states if that bank and france pale a lot of the bank news international and capitals international so these banks have exposure is not just just they're not it's not just a matter of national borders american banks have exposure to european banks some of them for example could be issuing credit protection against sovereign debt that's going to that's what we saw with the i.g. even after they were bailed out the reports over the summer that they were issuing greater protection against against certain sovereign countries in europe or or banks in europe so there's a lot of counter party risk and the fear is that if banks in europe go down for

example american banks are exposed to the derivatives market and other places so that's the concern so it's a huge web there's a lot of counterparty risk let's look at the how u.s. banks are doing regardless of the sovereign debt crisis that's going on in europe i want to bring up this graphic to show you so in two thousand and nine five banks held eighty percent and degree of that is and america now four banks hold ninety three percent nearly all of us derivatives there goldman sachs group bank of america and j.p. morgan so three years after these banks were bailed out and when we've heard washington claim that their priority is to end too big to fail are is there more risk at these banks who are much more concentrated right so that the bigger to fail and the funny thing about the banking sector is traditionally a bank is supposed to expose risk right so when you go to a bank as a as a corridor say here i am on the bar or bank says ok we're going to do due diligence we're going to investigate and see who you are at your credit worthy and if you are

what we're going to lend you what the kind of the risk the reward is we're going to lend money to you thanks have now got into the business of hiding risk and we see that more and more with with what they're doing the recent thing is the accounting sharing is that they've got into with trying to find ways to generate revenues and and and earnings when in fact they may have assets there are. nonperforming are underperforming so they've become kind of experts misrepresenting what the value of their company is and i think that's one of the reasons why you see their stocks getting hammered and you see a lot of volatility in bank stocks because people are very concerned about where the risk lies on their balance sheet so do you think that risk is well founded or do you think that that bunch of investors just all freaking out and of course it's well founded because you've got an economy that's not that's. maybe headed into recession or we're already in recession so loans that are having to mark to market on bank balance sheets are loans that are underperforming will perform worse we are concerned about leverage in the banking system so whenever you have leverage you

have hidden risks or you have lack of transparency and you have an economy that could be going back to tank investors are going to be very concerned makes perfect sense because i kind of liquidity as they float and you talk about some of the accounting gimmicks or whatnot i mean just to recap morgan stanley beat earnings but they benefited math of lee from i counted again debit valuation adjustments j.p. morgan same thing one point nine billion dollars of the net revenue we've gained that way bank of america moved part of their fifty three trillion derivatives book to another subsidiary backed by at d.c. insured deposits so are these normal legitimate accounting gimmicks or is this kind of scary enron stuff where with this exact so we've seen enron in the present exists and you know the bench of course tell you that the accounting methodology of the user and fair girl for whatever type of response they want to do with this and that but accounting irregularities in the use of fraud in the accounting had been at the heart of how banks have been able to hide wrist and leverage remember we had

lehman there and they were using. i forget the specific type of repo they were using repo one hundred five to kind of shift risk around their balance sheet and borrow money when they needed it and offload risk when auditing was coming so that's central to the way the banks have been able to lever up right and we just talked about levering out so people should know what it means that. we certainly appreciate you break it all down for us as we await more news out of europe there's certainly a lot coming out right now that was nature causing us our producer who's also a blogger covering delta dot com. all right we started the show with all of the headlines that were very important to

break down we think you need to know now we want to end the show with some of the headlines they are just talking about so to reach or cocaine as joins us again he's our producer and then shannon donahoe in the control room she cannot leave she is too important there but we want to hear her input none the less so this is being reported by business insiders a story on our website joyce bank actually own a casino so here it is an essentially is this banks deciding that instead of just. acting like gamblers they're actually going to gamble and buy casinos but i don't think this is the difference or this is this is this is their version is a part of their core competencies in fact this may actually be an example of you saying the banks saying we're going to not just kind of go into what we feel confident but we want to take the technology and the experience of the casino industry and behavioral economics and other and move things and just kind of ingest that into our business model expand and kind of use this these models for our

clients and our deposits so i think this is a good move for those are going. to move in the right direction dimitry they got taxpayer money they benefited twelve billion dollars specifically from the bailout of aig i again so i'm putting a bill or at the cosmopolitan casino robber you thinking along you're thinking along the lines of retail banking get doesn't exist anymore it's time so exactly this is the. banking casino banking gamble the money away leverage up and i think. in this environment what do you think that investment i don't know i'll be ready to have my debit card and i'll be out like a slot machine and that's what i'm. hoping hopefully you can make some money back for the five dollars debit card fee that b. of a is going to start charging exactly all right let's move on to consumer can benefit in this ponzi scheme just getting let's move on all right so last night g.o.p. debates we saw them in vegas and we saw a lot of i don't know however you judge it interesting lightning maybe ridiculous

things come out of that but one of the more interesting. one liners was michele bachmann her brilliant idea is that the way that we can get money in to make up for this foreign aid that the u.s. gives people abroad countries abroad is to how the rockies pay us that for liberating them she said this could also apply to libya is this a new financial model for the u.s. government that's broke to a re. patriot some of that money i think it is i mean i think it's a great idea is that it was just just invading and being the protector for all these ventured nations and freeing people i think that he was circus a very serious. but i look i think i think that the u.s. government has a good idea here this is a great way to kind of generate a free for the military you know if we're going to go into iraq and we bomb you and we will bring your people you should be paying us and this is also a great revenue model for brands as well they can get into syndicating loans for

some of these contractors and they collateralized that and selling it off in treasuries have different investors and this could open up a whole new avenue whole new revenue stream for the banks as well this is this is a big one so for people that say the united states goes into these countries to open them up to corporations this is a way that now wall street can cash in on that get on the action also absolute this is just another great was on bennett to rebut. this is a huge possible market for for wall street banks to call them liberty bonds so that instead of being in the bonds for world war two or whatever it is going to be liberty bonds for the middle east and north africa well and the thing that's funny too is that the military industrial complex a lot of people say can't wind down there's too much bureaucracy around it if you're on the right you know you don't want to cut defense spending if you're on the left you say you know there's still many challenges to doing so. here's a way to capitalize on that so even more money for the one percent. that's what it

all boils down to shannon you know you know what i did understanding that let's move it out all right speaking of the one percent what is the ninety nine percent to do well is this a hint batman may film scenes from the new movie at zuccotti park so is that in the savior of the protesters is the villain in the next movie going to be jamie diamond as you know morgan is going to be a banker it could be jamie dimon it could be lloyd lifetime it could be it could be any one of these bankers we haven't seen really a bank villain in the background series and i think this is an opportunity for warner brothers and d.c. to really kind of take advantage of that opportunity and you research that we haven't seen a banker a villain we're going to see batman can save the day and bring that to light villains usually kind of captured a common enemy but that's it for today thanks so much for tuning in to our show please follow me on twitter out lauren mr give us feedback on the show at youtube dot com slash capital account and please be nice i'm more and less there and until

tomorrow from everyone here at the capital accounts have a great night. more news today violence is once again flared up. these are the images the world has been seeing from the streets of canada. showing corporations rule today. we'll. bring you the latest in science and technology from around russia.

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