market why not. why not what's really happening to the global economy with a much stronger or a no holds barred look at the global financial headlines tune in to cause a report on our. time now for a look at our main headlines here at r.t. it today gives final approval to its new prime minister tasked with bringing order to the country's finances but in spain voters prepare to pick the leader they hope will be their natural savior. a shortage of little cattle spray police and mace peaceful student protesters versity on a national crackdown on equality occupy movement. thousands of egyptians are back into square calling for the military to increase its rule after

a controversial paper proposes to make its our planet. the time now for the banking bigshots to take cover because are forces next. well. technology innovation all the developments around we've got the future covered. max kaiser this is the kaiser report hey you there in london i'll be as king said a girl at eight pm for my max range live show yeah i'm still on tour taking it to the bankers say sir but what's happening with the bankers and other frauds 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 still in say two thousand and twelve yeah well so what they were going to fund our campaign until he lost it all i'm f. clogged all what's up with that general yeah no i think that's a fleetwood cadillac fleetwood. well speaking of it and i will have quite a few stories on that 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 was asked by the presenter whether or not he thinks i'll see his money back i do think there's some possibility that the money will show up because it occurs to me that if in fact funds were misappropriated that would have had to be several people involved with that and i'm surprised that if that were the case someone has been tried for the crime yet and that has not occurred in might be the sheer volume of people heading for the exits combined with bad system could have

resulted in this missing six hundred million that like a lot of bill fleckenstein staying as a. east. desperately trying to talk his way into getting his money back or both this is kind of interesting about 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 what with more savvy in terms of the fact that he got on mercifully appends stated by the banks bill fleckenstein his name was still in denial he's like a wife beating victim oh oh oh i got my money stolen please do it again well you must have heard this many times when you. lost money for clients as a banker they blame themselves press was fantastic about having customers when i was working on wall street you lose the money and they blame themselves five plastic you just keep still no money and they're keep crying about. help me relieve

me of my money in the guilt so here's bill fleckenstein praying hoping believing all the good faith in the world that the money will be found well let's turn to another clip and one of the executives at the c f t c which is regulating this market well he's asked the same thing where is the money good question i've been doing the the jerry maguire show us the money for a couple weeks here we've had people there is and it's not where it should be but it looks suspicious as heck to me it's either to fairness or illegal. 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 o.o. bart chilton is that it keeps coming up reminder remember a few months back he was involved in a cancer exchange h. as 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 like oh we don't know where the money went of course they went into the count as so one day has. so eloquently they spoil it for a good movie they're just steal 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 regulation right if. what a rule yeah there are a lot of rules and they are there to see you have to say oh yeah so from two thousand and five bankers brokers trading on this exchange share were able to use internal repos 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 and just to explain if you will this is

something where internally commingle some of the accounts for the part of the day that we're going to push to co-mingle exactly what you do is you take the segregated customer money which is supposed to be sacrosanct job number one for us they take that money and they use it for something that is supposed to be a safe investment like maybe a aaa sovereign debt or u.s. treasury but it's a temporary thing you agree to buy it back that's the internal report 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 and 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 are they trying to law here's rule one point two point five

what year two thousand and four regulation one point two five which was. relaxed in two thousand and then 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 that's in a paris that gate that former guard the the goal of proof glass is there for a reason because otherwise people would just take all the jewels so there's rules so you're out in two thousand and two thousand and four two thousand and five every single year the banks or the criminals or people who were nine seventeen ninety three in paris got their has cut off because of their access to credit the drug you still go to those people decided to rewrite the laws because they want to steal the money with impunity and the regulator said if there's bribes well max you mention

winston jewelers that i do believe it was actually robbed a few years ago by a man dressed as a woman don't look him in a bowler can't live now but i would never be caught in public with high heels of that color i wish to know ma'am so let's turn to this woman in this next story laurie ferber chief keef counsel at m.f. global and prior to that she was chief counsel at goldman sachs for one twenty here is ok she'll be great. she's at the heart of this the relaxation of regulation one point two five ok so tiny rules 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 i could make more money for wall street but they didn't have to share any of those profits with their clients but they were taking their clients the customer funds the segregated funds and setting 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 to play rated or double a right of sovereign debt is considered to be credit worthy but of course the c f t c c c. c f o. all these regulatory agencies that add up to big bold doubtless but soup of nothing they didn't bother to take a look at the fact that concurrently with the sovereign debt 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 puzzle one doesn't to battle three so they went around that because they've got ten twenty thirty times more credit default swaps than there is sovereign debt how come greece's debt keeps getting downgraded how come ireland keeps writing 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 killing wall street they could have banks just issue fifty trillion more critical faults a lot doesn't matter if you put up one hundred cents on the dollar and a triple a rated sovereign credit if i've got forty trillion c.d.'s to sell naked in the market and drive your sovereign debt down i'm going to live and i'm doing the penn state 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 break right with it but rather that move in the market its behavior

it's manufactured through market manipulation let's be clear about that that's not a normal market there's no normal price discovery happening in this market the prices are determined ahead of time goldman sachs manipulates the markets or j.p. morgan if you let them are just to keep the price they pre-determined that's where we're at now free market capitalism does dead well i'm surprised you didn't pick up on how i set you up there for it this laurie farber and relation to the jeweler theft and at winston's because i think assumed that he could be goldman sachs's own lloyd blankfein just as the general counsel going into these meetings at the c.s.t. c r a q a you suggesting that lloyd blankfein is a cross dresser who dress up like this regulator for to see if he's seeing goes in and meetings and lobbies for behalf of his firm playing the woman card he's trying to do how many how much does all my god now do i just very strange thought of her and on here it's not know what i mean what how far did you go. how far did lloyd go

to get these rules changed the law if you're a bad boy well i'm finally on m.f. cuckoo 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 now that were close their balance sheet is owned by the federal reserve so they say oh bank of america wells with others caught their bank of america merrill lynch they're. just joined into the. with the federal reserve bank is just going to expand their

balance sheet by however many trillions of requires to make whole these these unholy security 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 you know well that's true there was 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 tap refers of course to two shots to the head two shots through the head

which brings me to. art center max kaiser the vampire banker hunter there i am going to. stay sober thanks so much for being on the kaiser report thank you. go a much more coming why stay right. years ago in the largest country in the. generator. where did it take. in the united kingdom she's available insists the house bill and the one who took the old away from the hotel because it will sits on the millstone hutto some of the old country house holiday in the pool goldman's house the regrets the crimean choose to feel the insecure tell the world

paul reubens hotel. i am max keiser welcome back to the kinds of reports i'm not to go to new york city 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 for having me. 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 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 who 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 one to nearly fifty to one we know the thing gauged 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 to give you an idea of how were 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 income don't check credit rating 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 at fifty to. even the federal reserve bank itself as 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 all yes ok so they are there for now it depends on who mass it 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. cia and others if you're talking about investment banks there's the one nine hundred seventy 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 there 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 s.e.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. though the law is that they have to have certain on a capital versus a leverage on the books and what happens and what we've seen is that when if anyone . starts to sniff around then they do something about lehman brothers did with the famous repub one hundred 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 isn't that also the case these off balance sheet entities are hiding huge debt first of all what lehman brothers did with one thought that's just fraud as this let's not mince words is not pussyfoot around with this they're a bunch of criminals some of those some should 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 it folds and his c.f.o. should be wearing striped 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 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 riveted as they were involved with subprime lending they embrace what we call boring banking they borrow money at four percent they landed at six percent and they're out on the golf course at four pm and that's sort of local community banking that 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 have. and 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 i.m.f. 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 the new chapter and in the fraud max 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 through word 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 there's a pretty bright line as to what you can do and what is just out now to theft at least what it appears so far ahead of global and maybe they'll find the missing missing six hundred million dollars maybe you know it's in the draws 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 lived out the client's 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 enough global if they can find this money there's no other description for it it's just grand theft all right now on j.p. morgan bank of america creditors to m.f. global are saying our claims come and. of the customers is that is that 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 again natura sales are going to take up because that's going to become the new banks it's unthinkable that somehow an outside credible or is going to have a superior claim to. somebody who actually had their money with a brokerage firm in this case it's a combination of s.b.c. and commodities futures regulators who are 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 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 disco argument to future people but right now the lesson that they're going to be 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 that's correct and 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 end. theory and the purpose is that a judge rake off on the citi group case the 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 so there is no law governing the criminal acts of these various banks is there it's good to be the king listen 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 a good out regulation who cares about any of that you could do whatever you want about thirty seconds left what do you think about this story that the congress is

legally allowed to engage an insider trading with pretty 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 u.s. 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 bet 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 contracts much for being on the kaiser report my pleasure macs are to make you work with the low problem that's going to do it for this edition of the kaiser report with me max kaiser and stacy herbert i want to thank my guests barry ritholtz of riddle's dot com you can follow us on twitter you can follow us on facebook you can follow me max kaiser on twitter and follow me instead of stacy her because i'm trying to stay her ahead of her and trust me that's what you want to do is going to send me an

e-mail senator kaiser reported r t t v dot ru until next time x. guys are saying. it's.

called.