wealthy british style. tires. market. find out what's really happening to the global economy with mike's cars are no holds barred look at the global financial headlines tune into cars a report on our. mission is free couldn't take three months for charges free from a german three. three stooges priests.

the old free blanquita cullum in video for your media project a free media. tom. a very warm welcome to you this is your news today protesters on the. streets they have. the chance to say it's a good move for example the status of the human experiment. with. business right you support it just goes to. global economy and it's all changed things as financial tips. to maintain confidence in hmong kids and. wants to be in palaces recession look e.p. missions close to come. sing

a song like blue close. to fail so we played against the level i think is us crash. team sleep just like such an amazing sweet spots we'll just programs increase the total economy. i am accessor this is a cause report. wanted albeit things that are brought up at eight pm from my max range live show yeah i'm still on tour taking it to the packers station here but what's happening with the bankers and all the fraud well max is this here presidential tour because i see from this little video here somebody in pennsylvania is driving around with a nice what is that in eldorado. and the skies are so empty two thousand and twelve

yeah well something was going to fund our campaign until he lost it all m.f. global what's up with that charles yeah no i think that's a fleetwood cadillac's lead towards. well speaking of m.f. global i have quite a few stories on that but first we're going to turn to a video here and this is bill fleckenstein and he's being interviewed on c n b c and he's asked by the presenter whether or not he thinks he'll see his money back i do think there's some possibility that the money will show up because it occurs to me if in fact funds are misappropriated that would have had to be several people involved with that and i'm surprised if that were the case someone else tried to climb into that hasn't occurred it might just be the sheer volume of people heading for the exits combined with. them could have resulted in this.

hundred million that. well i don't know if like and dimed stain is a bimbo or he's desperately trying to talk his way into getting his money back or both this is kind of interesting that professionals who've written books you know bill's written a book about corruption in the banking sector and when it happens to them whether it's bill fleckenstein or gerald salon today of course is a little more savvy in terms of the fact that he got on mercifully penned stated by the banks built like a size thing was still in denial he's like a wife beating victim oh oh i got my money stolen please do it again well you must have heard this many times when you. lost money for a client says they're paying her they blame themselves that's was fantastic about having customers when i was working on wall street you lose your money and they blame themselves it's fantastic you just keep still no money and they're keep crying about. me help me relieve me of my money and the guilt so here's bill

fleckenstein praying hoping believing that all the good faith in the world that the money will be found well let's turn to another clip or kilts and one of the executives at the c f t c which is a regular meeting this market well he's asked the same thing where is the money good question i've been doing the jerry maguire show what's the money for a couple weeks here we've had people there and it's not where it should be but it looks suspicious as heck to me it's here to farias or illegal they're like personal opinion but that's why we have an investigation the money should be there in groups it's not that money should be sacrosanct it's really troubling oh oh oh it's a coming up reminder remember a few months back use involved in a cancer exchange h s x box office features scandal we got inside information about how he was working with n.p.a. and all the skullduggery get done behind the scenes on that one. now he's claiming

anger and psycho we don't know where the money went of course they went into the account as someone today has said eloquently they support for the community they're just still money now and pretty soon they'll still money accompanied by a knock on the head and thrown into prison that's what happens when you look close the cracks around the system whether it's in greece ireland america the u.k. this is their methodology well he refers to rule one point two five and this is the regulation write it here what rule yeah there are a lot of rules of their parents out there to say you have to see oh yeah so from two thousand and five bankers brokers trading on this exchange share were able to use internal repros to basically buy any debt in the world here he explains that a little bit and one of the things that we did was we allowed these internal reposed back in two thousand and five just to explain to people this is something where you can internally commingle some of the accounts for the part of the day

that we're going to put the commingle exactly what you do is you take the segregated customer money which is supposed to be secretary job number one for us they take that money and they use it for something they're supposed to be a safe investment like maybe a triple a sovereign debt or u.s. treasury but it's a temporary thing you agree to buy it back that's the internal repo let me explain something about the so-called rules and rule one point two point five all of the banks on wall street doing what they're doing today the money center banks the too big to fail banks if they were being governed by the laws that were in place fifteen years ago they would all be in jail today. however because of all the money they've made stealing buying congressmen buying senators buying the supreme court buying the judicial system buying the political process those laws don't exist anymore or they change the law here's rule one point two point five what your two thousand and four regulation one point two five which was. relaxed in two thousand

and nine further relaxed in two thousand and four two thousand and five yeah well this is what is the example of there's a rule in place a law to keep people from stealing like you see a geek in front of winston's jewelry down here on the plaza it's an egg and paris that gate that armor guard the the bulletproof glass is there for a reason because otherwise people would just take all the jewels so there's rules so you're having two thousand and two thousand and four or two thousand and five every single year the banks or the criminals the people who won seventy nine hundred three in paris are his co-author because they exist if i could well you just go to those people decided to rewrite the laws because they want to steal the money with impunity and the regulators. did those bribes well max you mentioned winston jewelers and i do believe it was actually robbed a few years ago by

a man dressed as a woman don't look to me. now that i would never be caught in public with a high heels of that color i'm a chanel man so let's turn to this woman in this next story laurie ferber she's keefe counsel and global and prior to that he was chief counsel at goldman sachs for twenty years ok she'll be very happy with this she's at the heart of this the relaxation of regulation one point two five ok so tiny rule change at the heart of m.f. global failure from december two thousand the c f t c that's when they first agreed to. amend regulation one point two five to permit basically riskier investments that could make more money for wall street or they didn't have to share any of us profits with their clients but they were taking their clients the customer funds the segregated funds betting it overnight but they had to replace it in the morning

so then in february two thousand and four in two thousand and five regulation one point two five was further amended refined to the liking of ferber and the banks in the end the door was open for firms such as m.f. global to do internal repos of customers deposits and invest the funds in the general obligation of sovereign nations ok well here's the here's the thinking that went on here you see because sovereign debt aaa rated or double a right of sovereign debt is considered to be credit worthy but of course the c f t c s e c f s a c f o s a p p p all these regulatory agencies that add up to big bold out of bed soup of nothing they didn't bother to take a look at the fact that concurrently was the sovereign that being is the collateral to perpetrate fraud there is collateralized i'm sorry i credit default swaps and other derivatives that are created to do an end run around the. margin requirement the minimum capital requirement the sovereign debt requirement as stipulated by

basil was a long battle to basil three so they went around that because they've got ten twenty thirty times more credit default swaps and there is sovereign debt how come greece's debt keeps getting downgraded i can ireland keeps finding itself in the pooper how come the entire euro zone is collapsing because every time they announce a bailout of a one trillion or five trillion wall street they could get banks just issue fifty trillion more credit default swaps doesn't matter if you put up one hundred cents on the dollar in a triple a rated sovereign credit if i've got forty trillion c.d.'s to sell make it into the market and drive your sovereign debt down i'm going to win and i'm doing a penn state on you the fact is here that they were leverage fifty to one so all they needed was a decline of two percent overnight and this was on european debt which was moving at three four five six seven eight nine ten percent overnight so of course there was a run on their bank with it but rode it that lumina debt is not a market it's behavior it's manufactured through market manipulation let's be clear

about that that's not a normal market is the normal price discovery happening in this market the prices are determined ahead of time goldman sachs manipulates the markets or j.p. morgan it really started to change the price they traded term and that's where we're at now free market capitalism is dead well i'm surprised you didn't pick up on how i set you up therefore it is lori farber and relation to the tueller theft at winston's because i think soon to that she could be called in fact is own lloyd blankfein just as the general counsel going into these meetings at the c.f.a. c r u a you suggesting that lloyd blankfein is a cross dresser who dress up like this regulator for the see if the saying goes in a meeting with a lobbyist for behalf of his firm playing the woman card he's trying to do how many how much what is oh my god now that i just that is very strange thought of like early on would not know but i mean how far did he go. oh. oh how florida lawyer go

to get these rules change the law if you're a boy well i'm finally on emma who pig fast twenty eleven bank of america merrill lynch is offering to buy claims against m.f. global so bank of america's merrill lynch unit is soliciting for the purchase of claims against m.f. global as you may recall max bank of america is one of the major creditors of m.f. global with j.p. morgan and is reported to be one of the debtors along with j.p. morgan involved of the litigation trying to obtain superiority of their claims over customers whose money was taken last stolen by parties unknown for an hour plus their balance sheet is owned by the federal reserve right so when they say bank of america wells what others carter called bank of america merrill lynch yes they're. just joined into that. with the federal reserve bank is just going to expand their balance sheet by however many trillions of requires to make all these these on

a wholly secure but it's also max the case is here that because of their power in this mafia this syndicate this racket they're able to put these segregated account holders in a distressed position by being more powerful to be able to step in front of them in this chain of creditors standing in line at the trustees yeah well that's true there are there's another leg to the massive manipulation scam of putting these people into a stress position similar to what they do in guantanamo bay and finally on this story jesse's café american says i have nothing against vulture funds per se although what i hear a few of them have done with two of the failed icelandic banks and their former directors proves rule for of zombie banking land always use the double tap. the double refers of course to two shots to the head two shots through the head which. brings me to more giago art center max kaiser vampire

banker i'm sure there i am i think there. are i think our thanks so much for being on the kaiser report thank you max go and much more coming why stay right there. you know sometimes you see a story and it seems so you think you understand it and then eclipse something else you hear or see some other part of it and realize everything you thought you knew you don't know i'm sorry welcome to the big picture. well. it's technology innovation all the developments around russia we've got the future covered. the

official tea i think a show. called touch from the. video . she's smiling. as a speech now in the palm of your. i am max kaiser welcome back to the kinds of reports i'm not to go to new york state and speak with barry ritholtz of ritholtz dot com barry is a market analyst blogger journalist and author of bailout nation welcome back to the kaiser report barry thanks but i mean that's all right barry first let's talk about your piece in the washington post what caused the financial crisis the big lie goes viral tell us about it well there's been this tendency amongst people who

helped create the crisis and rather than admit that radical deregulation and allowing bankers to set their own rules and granting special exemptions for the five largest banks to ignore the leverage limitations or allowing derivatives to be completely unregulated with no reserve requirements and no counterparty disclosures rather than say hey this was really a big mistake hoops instead they've created this force narrative this argument that you know what really caused the crisis it was the government forcing banks to lend all that money to minorities and inner city poor people that's what caused the crisis the fascinating thing is the data overwhelmingly says that's not the case we know they took red leverage as soon as they were given permission from twelve to to one. nearly fifty to one we know that they engaged in

all sorts of speculative activity where they didn't understand the risks their models were just wildly optimistic they were so busy counting profits and bonuses that they didn't pay attention to the bottom line look it all comes down to some very very simple rules banking is supposed to be boring the job of a banker is to make decisions about who is credit worthy and who is not and give you an idea of how we reckless the banking industry became not only did they create these no doc loans they stopped validating loan to value of the home they stopped valuating credit scores and most importantly they stopped asking borrowers how much money they earned and that is the single most important factor in determining if someone's going to repay a mortgage or a loan how much do they actually own earn can they service that debt so when i hear this nonsensical things banks were forced to make loans to poor people nobody told

the banks don't check in con don't check credit ratings don't check all the usual metrics that have worked for thousands of years it's just nonsense and when i see people propagating the big lie like that it makes me stop and say what are these guys hiding and it's pretty clear what they've been hiding they have an intellectually bankrupt ideology and it's causing global damage to the economy are you mentioned the leverage ratios being increased from twelve to one and the banks are leveraged fifty to one even the federal reserve bank itself has leverage fifty to one that goes back to two thousand and four i believe when greenspan lifted that cap but you refer to that as ignoring leverage limitations but isn't that a hard coded lot in terms of what the leverage limitations are corning under laws in place is it going back to the balance on yes ok so they are their thought now it depends on who master. depends on which financial institution talking about if

you're talking about depository banks they have reserve rules which are implemented by the f.b.i. see and others if you're talking about investment banks there's the one thousand nine hundred five rule that limited them to twelve to one of the five biggest investment houses in the u.s. got a waiver of that ironically it was called the bear stearns waiver bear stearns lehman merrill morgan and goldman the only ones somehow exempted from that last stop and think about what that means here is a lot applies to everybody except you five guys who happen to be the single biggest donors to congress and that by the way that waiver was granted by the security and exchange commission the bezel rules for depository reserves how much they have to hold what's fascinating about those is that they've been whittled away over time so the amount in reserve has come down fairly substantially which allows their leverage to go up so anything that gets in the way of profit regardless of risk

there is a lobbying effort to try and reduce that it was very successful with the f.c.c. it's been somewhat successful with the federal reserve and the f.b.i. see and that's why there's so little capital in all these banks both in the u.s. and europe in fact the underlying cause of the entire global headache that we're still dealing with is too little capital too much leverage all right so the law is that they have to have certain amount of capital versus a leverage on the books and what happens i'm only saying is that when if anyone starts to sniff around then they do something about lehman brothers did with the famous report one of five scam where they simply move debt off the balance sheet temporarily to satisfy a regulator that might be looking at them and then when the regulators leave the room they put that back on their balance sheet is not also the case these off balance sheet entities are hiding huge debt first of all what lehman brothers did with one o five that's just broad as this let's not words mince. let's not pussyfoot around

with this there are a bunch of criminals some of those some of them go to jail and unfortunately most of our prosecutorial staff are too busy chasing other nonsense but there's just no doubt in my mind that dick folds and his c.f.o. should be wearing stripes suits with numbers that is criminal you cannot hide one hundred billion dollars or fifty billion dollars at a time in spending and then put it back at the end of the the quarter i don't know where the f.c.c. is i don't know where the u.s. attorney general is this it's laughable that's number one number two if you look at them the movement that's starting to pick up a little speed in the united states people have been moving their money away from the big banks to the small local community banks and what we found is that these small community banks they're much more solid they weren't involved with the rivet if they were involved with subprime lending they embrace what we call boring

banking they borrow money at four percent they lend it six percent and they're out on the golf course at four pm and that sort of local community banking that's sort of credit union banking is potentially the biggest threat to the major banks there's six or seven thousand of these banks in the united states some of them are five and ten branches large some of them are one or two they're all insured by the f.b.i. see so your money is safe there it hasn't been enough to affect their quarterly earnings yet but if that were to happen i think you would really start getting people's attention i cry we've been watching these banks commit massive fraud not not the community banks the credit unions as you were just mentioning but the the too big to fail banks the big wall street banks they're in violation of the minimum capital rules without a doubt they're violating the law every day we've been watching this grow over the past few years but recently just this past week i think we're setting

a new. standard for criminality with this with the global scandal it seems that they're just reaching right into people's accounts and taking their money directly what's very talk to me is this a new chapter and in the fraud mass what do you think it's your money you think you're entitled to your money that's a lot of money and if we decide we're going to need it to leverage up even more the hell with you we're taking it m.f. global there's just a whole different order of magnitude this basically you know when you fill out an account form there are all sorts of things about what the bank or the investment house can do with your stock let's say we can hypothecate it we could shorten against it we could lend it there's a bunch of things that could be done and it's supposed to be governed in regulated pretty clearly this is a pretty bright line as to what you can do and what is just out now theft at least what it appears so far at m.f. global and maybe they'll find the missing missing six hundred million dollars maybe

you know it's in a draw or someone made a line entry somewhere that's wrong but from the the appearances we've seen this looks like someone just backed up the truck wiped out the clients' money and said to hell with them we're stealing it it's just beyond outrageous and i think if anybody is going to jail in this whole past five year period it has to be someone from m.f. global if they can find this money there's no other description for it it's just grand theft all right now and j.p. morgan bank of america creditors to m.f. global are saying our claims come ahead of the customers is that it isn't proper you know when you're involved in this sort of bankruptcy litigation everybody says that sort of stuff i think that there's some insurance on the accounts and there's some guarantees but if it turns out that the creditors have a superior claim to people who are opening accounts why the hell would i ever open an account with anyone if you andy. mattress sales are going to take up because

that's going to become the new banks it's unthinkable that somehow an outside credal or is going to have a superior claim to. somebody who actually had their money with the brokerage firm in this case it's a combination of s.c.c. and commodities futures regulators who was supposed to be watching this look at the key takeaway from all of this is regulators can only do so much if someone is intent on stealing they're going to steal what you have to do as a regulator or a government is make sure that when these people get caught they're get thrown in jail as a discouragement to other people might take away from the crisis of zero seven zero eight zero nine is still whatever the hell you want and run for the hills nobody cares no one's going to prosecute you maybe m.f. global get get us to the point where someone goes to jail and that acts as a as a discard judgment to future people but right now the lesson that they're going to

teaching in business schools is don't do what lehman did don't just screw up a little bit do it bear stearns did screw up really big and don't worry if you're a bond holder you'll be made whole yeah i don't think a lot of people realize that when you open a brokerage account you sign off on documents that you're bound. to arbitration for any disputes you don't get to go to a jury escrow going to go to a judge ninety eight percent of all. complaints against the industry are on resolved nobody ever gets their money out of the industry and the purpose is that a judge rake off on the citi group case to two hundred eighty five million a city under the stall judge or a cross says that yes the sea is going to have to figure this out because they the federal judicial system doesn't have dominion over these criminal acts sound there is no law governing the criminal acts of these various banks is is there. it's good

to be the king listening you know when you have a congressional system that is based on e-bay when you could buy a congressman or senator or when they get sold to the highest bidder who gives about regulation who cares about any of that you can do whatever you want we have got three seconds left what do you think about this story that congress is legally allowed to engage in insider trading with pre i.p.o. stock given to congress people and it's not legally considered to be a bribe your thoughts it's consistent with everything else we know about the parliament of whores that is the us congress they are up for bid you know we really need a third party to actually see if we can maximize how much we could sell them for our place your bed by a congressman get whatever regulation you want passed that's how america works in two thousand and eleven all right private all right all stock confines much being on the kaiser report and my pleasure max are to make you work with the love problem

that's going to do it for this edition of the kaiser report with me max kaiser and stacy herbert i was like my guest barry ritholtz of riddles dot com you can follow us on twitter you can follow us on facebook you can follow me max keiser on twitter and follow me instead of stay here because i'm trying to stay heard ahead of her and trust me that's what you want to do is going to send me an e-mail senator kaiser reported artsy t.v. dot are you until next time x. guys are saying.