wealthy british style. is not the type of. market why not come to find out what's really happening to the global economy with max cons or for a no holds barred look a bit mobile financial headlines tune into cars a report on our g. world

including. bringing you the latest in science and technology from around russia. we've got the future of coverage. i max kaiser this is the kaiser report i'm here in ireland kilkenny ireland there's a new song in ireland it goes like this on i'm looking over a three point six billion euro clover that i overlooked before yes the new president and the new minister of finance people have discovered

a three point six billion euro hole in the accounting budget but they didn't see before such is the way things are going here in ireland herbert yes max this is the luck of the irish speaking the irish going to be the irish times here three point eight billion euros in cuts and tax increases coming in budget michael noonan the finance minister says e.u. i.m.f. bailout condition sacrosanct well you would think that they would match up you know i just talk about a three point six billion dollar magical leprechaun like find by the new president and this three point eight billion dollar requirement of cuts you think would match up but of course in this world of economics we live in all the benefits accrued all the same crux and all the hysteria borne by the general population the word that i'm looking at here max is sacrosanct because it's a word that we see over and over when it applies to any bankers' bonuses or their contracts or their various degree of it is that they write so i looked it up online

sacrosanct means regarded as too important or valuable to be interfered with immune from criticism or violation and treated as if holy yeah well that's the trick isn't it the the bankers have become the new clergy in this globalized financial lived world so while the vatican is suffering catastrophic moral collapse here in ireland with ireland canceling and closing their embassies in the vatican. at the same time they're giving birth to a new papacy of investment bankers who believe they walk on water and go unchallenged through the land of bestowing their indulgences for a small fee of course well of course in ireland now the fed the treasury and the holy troika the head of the treasury and the holy troika i like it so we're going to look at one of the elements of this budget is that they're making it that seven

hundred fifty million euro cuts from the capital investment account for the nation but at the same time this week they paid off seven hundred fifty million euro in unsecured anglo-irish bonds write the word unsecured i think needs to be highlighted there and that means that the issuer is taking a risk fully in the knowledge that there is a strong possibility they won't get paid back and this is what own secured means so the fact that the irish government is deciding to pay those loan anyway shows you the what i would have to call stockholm syndrome they fall in love with their captors haven't they and they believe that they will just give you all money even though you don't in any way legally there's any real statute that would require us to give you this money we're going to give it to you anyway well simultaneously cutting the very phones you would need to grow your economy so they are going to pay this debt going forward because they are cutting the very source of future

g.d.p. growth this is the very definition of insanity played out brilliantly here at the kokomo much festival we're hearing all about how this is all being done from a whole panel of economists who are going into great detail as to why the sudden emergence of a fiscal and monetary papacy is destroying europe and place of the vatican that's now been completely discredited so we move from the fed the treasury and the holy bond holders to some miracles that are actually being created we've talked about one where they found this three point six billion. but over in the u.s. we have this headline and client funds said to be located at j.p. morgan yes they miraculously found those missing funds and j.p. morgan. the guess whether it's. fishes and loaves feeding the masses or turning water into wine you can always rely on jamie diamond to come up with the goods and a miraculous discovery of seven hundred fifty million dollars that was hiding under

the desk phone where i know i put that billion dollars there somewhere so i want to get the life masters on the phone as you know with a billion dollars this well they actually found two point two billion dollars they said the immaculate deception as it was life bouncer's as basically the new virgin birth of derivatives that are created without actual any any financial in some a nation it's merely a child born from the lawyers of a credit the full. life master of the virgin mary oh i see this also made it to the headlines here head of global resigned in wake of bankruptcy filing i'm sure they gave a huge golden parachute as a thank you for destroying that particular for this is a core zine former head of goldman sachs one of the twelve apostles of the new apocalypse i'm sure he's gone to a better place in the banking haven't skies oh yes i believe the pope is going to beautify him and the state of course very soon beautiful beautiful he's going to

beauty parlor to be to be beautified by the pope the thing about the vatican they've got it they need to rebrand themselves because all the old terminology nobody can get it to get behind in the lore. so you're going to have his old new do he's going to have a no you don't make up make over is going to be unified theory to think that the same core scene. well. i like how the guy commits a crime again another sacrosanct element of the futures market is of course that you don't comingle funds he broke that and for that he says he will not seek his twelve million dollar severance that is sacrosanct in the contract he's not going to seek it he's going to it's this charity he's going to give back to the community still should be this to the occupy wall street movement where these guys are saying well we won't take the bonuses because they realize that the next step after that is a pitchfork up a string string as we say on the show well speaking of occupy wall street we're

going to move over to some of the martyrs of this financial new financial trinity this holy troika we have now and this is a little clip from mayor bloomberg of new york he was asked what he thought of the occupy wall street protesters. why. we. are friends of. course everybody should go to. these pickings i mean i think everyone needs to pick a side of this growing conflict between the top one percent and everyone else and you take a risk i mean this is we're bringing risk back to capitalism it's the risk of being impaled but he's also pointing out that we should be beautifying angelo mozilo he's the martyr of the subprime crisis because look the guy was forced to leave with only a two hundred eighty five million dollar payout and after being brutally repressed

by the government that he was forced to give all these loans to all these poor schmucks out there and all he received was two hundred eighty five million payout what do you think of this man ok so you're talking about the former head of countrywide country but of course it was bought up by merrill lynch i suppose which got bought up by bank of america which will be soon bought up by j.p. morgan and the problem is. big to fail but don't look under mine a curtain things get bigger and. this basilica he of course was caught red handed falsifying documents and committing forgery of course documents and giving loans to muskrats who are living in tree stumps half a million other time in calling that a legitimate loan made and getting huge fees as a result and then when that when boss they got a huge payout from the government of course that's run by crony friends of mazola

who are occupying all the regulatory authorities sure they were the friends of angelo mozilo where the famous christopher dodd included you know they were congress people and senators who received special interest rates on loans from mozilla so that's right he made fraudulent loans made his illions of dollars and gave it to politicians to help them reelect themselves and he's off there sunning himself on a yacht laughing his two who are some of the other martyrs the prime crisis. in order well default him so i'm sure considers himself to be a martyr he still doesn't understand yet or jim jimmy cayne over there parents turn a martyr of this horrible. to put it in biblical terms there was a flood of credibility that came and destroyed the miracle workers as they were turning essentially what you could call dog poop into securitized mortgage backed

securities traded amongst the major banks around the world it's called transubstantiation. that's exactly right stacy herbert transubstantiation is exactly the term this is in other words at the eucharist it's not a figment of the bone and blood of christ this is the actual bone and blood of christ during the eucharist that's the concept of transubstantiation so you're saying applying that to the subprime mortgage market and by recent characterizing. it is essentially dog poop and having movies give it a aaa rating credit it becomes godlike actually it becomes worth something it's a liveries you to the american dream it was often called that was that heaven was the american dream yeah before america went bankrupt they had this idea speaking of transubstantiation i have another headline here and you mention this in your first evening here at the kilpi nomics festival you talked about where you would see the fraud happen and it happens via the i.p.o. market groupon values soars on first day of trading controversial coupon

seller now worth nearly eighteen billion dollars the shares popped thirty percent on the first day tell us about it was there would be this huge i think i said thirty to forty percent pop on the first day and sure enough this is exactly what happened this is first of all groupon is a ponzi scheme all their original customers are canceling out because they don't make any money off taking advantage of what groupon offers which are discounts to the point you are losing massive amounts of money so all the original customers are not resigning up so they need new suckers to come in to groupon that's the very definition of a ponzi scheme so now this is an eighteen billion dollar ponzi scheme but when it was taken public of course the first day pop is critical and this is engineers by offering a very few number of shares and that all in the aftermarket the banks who underwrite this offering are buying in the aftermarket which is technically illegal but it's something called ladder and they do it anyway so laddering of i.p.o.'s means that you can engineer a price appreciation there's very little stock in the float you can't sell it short

because all the stocks hold by the underwriters and what you do with that pop of course is you pay off all the litigants in your lawsuits so all the law people are still in the underwriters maybe it's goldman sachs or j.p. morgan anyone who's got a lawsuit pending they use the i.p.o. stock as payment as hush money to pay them off they use it to take care of any errors and there are accounts which they've accumulated by doing illicit illegal deals over the years and. churn that a few times and they use it basically as a currency to favor political courage because of course in washington a most lobbyist insider trading is legal and they use it to help their campaign to deregulate market so they can further perpetuate their fraud and embezzlement of the markets and the american and global citizens through outright manipulation and fraud and welcome group on the biggest fraud of the week yeah that's the interesting thing about this is that unlike a lot of the last wave of crime banking crime the subprime crunch is that almost

all of the financial media saying openly that this is a ponzi scheme is its own investments but still a pop thirty percent just goes to show you that the the business of america fraud on wall street is still alive and kicking and despite all the macroeconomic events that are plaguing the rest of the world well thank you thank so much for being once again the kaiser report thank you max don't go away much more coming your way so stay right there. you know sometimes you see a story and it seems so you think you understand it and then you glimpse something else you hear or see some other part of it and realize that everything is ok. i'm sorry it was a big. critic

a free. free. free. free. free. free. video for your media. free card. imax tiger this is the kaiser a part time at the cocoa nomics festival in kilkenny ireland and we're about to speak with constantine. lecturer in finance for trinity college dublin and holds a number of other senior research positions of international companies and organizers he was also mentioned in today's irish times as one of the new breed of economic rock stars constantine welcome to the guys that really works to be here all right let's talk about this i know irish t.l.

as this is the really the talk of the conference so far so give us more background on this and some of the numbers and what's going forward while the background is related anglo irish bank and the miser's the destruction of the proper banking because there was a banking system around the world is probably the most reckless ledger we have in the advanced economies during the cause of the latest boom which predate the current crisis it was the bank which was known as the parking lot bank because that's the amount of time it took them to approve multimedia and you were along by the time the sales person leaves the client the loan would be approved by the time the sales person gets into the car i only just got in there how did all the risk you know measures get abandoned how did that what was their technique there how do they simply not be able to apply any risk analysis was for the rest of the banks they didn't have to do much of what is going also because liquidity funds and was very cheap sources also with whatever you lose in the market you can make back in terms of the high margins in terms of the appreciation on that as a base which is

a typical classical if you want us a bubble so in some ways if you think about it not just a large bank there were just more extreme case but the entire banking system in europe and in the united states operated like kind of like a fire engine. out who were in the cheap liquidity and then spread into the very kind of you know indiscriminate way across the court to be in the hope that some loans will pay back and some loans will go up ok let that keep. money goes out there to feed speculation in real estate and that real estate is used as collateral to perpetuate more loans and so this is the way the ecosystem if you will of how things got completely out of hand because it became a self-fulfilling prophecy as long as they kept making these cheap loans the asset prices had to go up and sell such time as you had a classic blow off exactly on the blow off was also a precondition by the fact that there was systems regulatory system supervisor systems both in europe and in particular in ireland but also in the united states which have very verted the efforts or you want to pressure which is building up in

the system itself by creation of those artificial assets artificial if you want increases in our civilizations and also the if you want pricing of the six and the maturities and the other within the system all of that was there verted by the regulatory system into if you want kind of concentrated allocation of the east into one particular colossus of sub assets in the case of the united states that was the class of for example that it would have instruments in the case of the case of ireland it was the class of assets we should related to the property development and property investment and things like that so not only the risk was growing on the books on the balance sheets of the banks and it was unchecked in the christ but it was also diverted which we see in greece today right now in part is an outcome of the poor regulatory environment of the global banking system which has treated the government bonds of insolvent governments and we knew that greece was insolvent for a decade plus without even without discovering what we have learned since then about the deeper rates of unsold and see such as the goldman sachs deals that they have

done to hide parts of the some parts of the debt as well but even apart from that we knew that it was deep in solvent all you need to look is a current account has not been sold and in the last twenty years or more than just one year probably out of what are then by the way in the last ten years there's only been sold in for one year in terms of a current account surplus and this is what was going on the governments were continuously using the banking system to from the markets through the motto through the banks as well and there's. encourage the banks to accumulate the liabilities of the state. so that he's not only. was rising and was on price but it also got come pounded by the fact that the schools least if you want the books of capital it was treated this is the reason at the same time as these guys ok it's sounds to me as if you can buy insurance on a car accidents let's say of say it's a formula one high speed car race and you're buying insurance on a driver but you're dividing up that insurance into the racing around the track

approaching the wall getting closer to the wall and then actually crashing into the wall and then pricing each one of these differently and then saying the actual crash into the wall itself or the actual crash happens this in fact we're not even going to count in the overall make trix of risk and there are factors going to ignore that bit and we're going to trade the other bits approaching the crash separately exactly that's exactly what was happening in kind of the political blocs to bounce very much extreme events at the tail of the problem to do so they force all the risk into extreme events and then they say statistically it can't happen that's right and they price everything else as if there's not going to be an extreme event which keeps capital cheap which keeps out the pricing rises up in the regulatory slash financial system around the world is that in effect we were playing russian roulette and after every round we will go to new bullets into the bar so sooner or later we've had the entire bar loaded that was no pro the probability of blowing your brains out in this current environment was hundred

percent by the end of the game and this is exactly what will this is important to note that the the chances of this catastrophe happening were one hundred percent oh absolutely true the difficulty of course that is different from knowing expos stuff to the fact that the will how to how can the one hundred percent probability and knowing at the time because the game was so big and the game was moving so fast the . banks like a large banks were moving very fast up their rates remember that back in two thousand and six and five of the director of the davis summit in switzerland the globe the world economic forum summit actually voted as the best in the world and all of that was predicated sold on one line of the profitability ok when you say they're moving up the ranks you're talking about they're moving up their ranks in terms of their ability to lay off these bad derivative bets on the global market at exchange rates and derivative rates and rates of exchange that are feeding into their bottom line because their cost of capital is essentially negative isn't it

that's right they know first of all explain this a little bit because people are seen as i mentioned it's all a time when people are confused by this because they're used to a credit card at sixteen percent or seventeen percent i say no these big banks are cost capital is less then zero explain that well in many cases it depends on the time and right now they're facing less than zero cost is because they get unsubsidized loans from the government and they can go and use these capital injections too if you want borel from the central banks the cheaper rates so as a result we can think of patient right now that is big in the last three months have received a sizable injection of capital in form of the government is the notes and government bonds what they did with those bonds is that they took those government bonds they put them on their balance sheets then the went to the people we go to the purchase with with the city they put them as a collateral from u.c.b. a one point five percent interest rate and then bought more government bonds in the markets so as a result of that in august september right after it was done on july thirtieth when

the injection of capital went into the largest banks in august september the irish banks who are the largest banks bought more than three billion worth of the government of ireland and this is all who would govern the government bonds government bonds went up in price the government turned around and immediately started presenting that as the case of the bill is a sham that it's all this is not working that there isn't this common. deal to. a lot of the bones in the whole ponzi scheme continues to roll in over both in terms of the reputational knock on effect on the government with its claims to be and the banks pretend that they're healthy and the government in return pretending that the banks are healthy because that helps them to pretend that they're themselves healthy isn't this a form of propaganda of course it is a precise propaganda now people absolute associate propaganda with political propaganda with scapegoating ethnic groups or religious groups and propaganda and terms of jingoism and and patriotism but this is

a different form of propaganda it's a financial propaganda where if the government and the bankers colluding together can create the illusion of a trend then they can come around to say that things are getting quote unquote better but the same time forcing through more dry coating of sturdy measures right european governments through the systems of corporatism that have existed here for decades this is the governments mode in europe over there can only pull the sea and bullets as well as governments by consensus of interest groups and how they were chosen different fascism because people say passion is a connection between i would be controversial here and you know i always said that that is basically there is no difference until you come to the point of the differentiation of national dimension or national as they mention the european corporatism so they doesn't have the nationals that mention it is more benign but economically from a can only point of view the system of organizations exactly the same ireland has been ruled for the last twenty years by social partnership social partnership

includes government on one side of the table. no not a side of the table there are trade unions there are social people or what we called in other words environmental groups groups which tried to come back poverty and some of them actually have noble if you want objects as well and then on the other side there is a big organisation which unites all large businesses in this country called beck and they said for years. the entire economic party even though despite the fact that the majority of them actually conceded very little to the fight is most of the rise according to is driven outside of people and it is decided outside of that they believe is decided by the exporters as decided by multinational corporations decided by foreign investors who are never at the table i mean my drive down from the airport on talk radio they were saying openly that while there is a level of acceptance with this term that ireland has lost their financial independence and they're speaking about it in those terms as if well you know as

you know we've lost our financial independence isn't that the same thing as losing your independence it is exactly the same thing because in today's terms they call to be in the financial structure of the court to be which on their rights is really what the fines the sovereignty because we don't have the army we do not have wars thank god we don't have physical conflicts over the borders the only conflicts we have a competitiveness conflicts and compete in this in the end is determined by things like infrastructure institutional infrastructure human capital that exists in the country the productive capacity of the court i mean that's the quality. of the economy that is precisely what i'm talking about the economic independence here their ability to influence those that mentions those components of economic you know if you want to come in deed that is the country say that the euro project was brought on to stop wars in europe but now what the euro and the institutions of come with this crisis and the i.m.f. and others coming in for foreign creditors etc there is in fact

a war going on that is up toward facilitated a new kind of one. but there is this week was very much clear part point whereby the european political project has foody decoupled from the democratic project we should be very careful by the way when we're talking about europe and europe has two components that has a very sick component the so-called euro zone the common currency component which is really a very deep mistake because it was never based on the premise of the democratic institutions of checks and balances and as a result of that it became anti-democratic as we have seen this week and europe at large. is very beneficial and very productive institution if you want because it is a fusion of free trade the mobility of people the mobility of capital this is exactly what we want this is exactly what we need we need more of it and all of the they say in the economies outside of the eurozone are saying exactly what we do not need is more integration which is artificially grafted onto the foundations which is so shaky democratically that the country cannot hold

a referendum on something so fundamentally important such as loss of its economic sovereignty as we have seen in greece constant saying or again that's all the time we have thanks so much for being on the kaiser report all right that's going to do it for this edition of the kaiser report from kill comics in kilkenny ireland i want to thank my guests cause i think you can find them on the web it should be easy because he's a rock star beacon omics so next time there's a backscatter saying.

from los angeles to chicago to birmingham twenty trauma centers have closed since two thousand severe problem is not enough inpatient beds not enough earth emergency department beds and not enough nurses some members there to take care of all the people who are the only real health care system that we have in the city of los angeles is the los angeles fire department in fact when i started my venture is a firefighter i didn't want to ask i started out going to just do firefighting it's about eighty two percent of what we do the for the power of this medical but that a rescue couple weeks ago waited four hours for i've waited sometimes three hours i wouldn't say it's a frances and living with her for hours and fifty minutes standing against a wall and we have a federal law that mandates that you can't turn no one away who seeks care and emergency for.