well they can be negotiated and afforded some degree in. place. yeah the. low possibly it's not traded now but it could be in the future. here will she article the headlines that have possibly her. brother deaths in syria as an arab league ultimatum to damascus to end the violence has just passed and russia says the bloodshed would only end of by size put down their arms. also there are reports of more that sent hundreds of people injured in interpol in clashes with police as turns of thousands protest for an end to the military's grip on colonel. kind of gadhafi son saif al islam has been captured by leaving authorities apparently trying to escape to new shadow and say he will be tried in the country

and not at the hague which means he could face the death sentence. to call for protesters about things that clears the park in new york after being evicted by police and she's died while california student september straight my office is accused of having her on the ground down on at least four protests. and it was you know to live from moscow the kaiser report is up next they changed. max kaiser this is the kaiser report hey you there in london i'll be asking set of borough at eight pm for my max range live show yeah i'm still on tour taking it to the packers station herbert what's happening with the bankers and other frauds contacts 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 his kaiser solenn say two thousand and twelve yeah well something was going to fund our campaign until he lost it all and i'm f. global summit that general yes no i think that's a fleetwood cadillac's likud. well speaking of it and i have quite a few stories on that first i'm 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 i'll see his money back but i do think there's some possibility that the money will show up because it occurs to me that 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 has been tried for the crime yet and that has not occurred it might be the sheer volume of people heading for the exits combined with bad system could

have resulted in six hundred million that like a lot of gulf like and feinstein is a. are desperately trying to talk his way into getting his money back. 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 general. a lot today of course is a little more savvy in terms of the fact that he got on mercifully appends stated by the banks bill fleckenstein is saying 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 fast was fantastic about having customers when i was working on wall street you lose the money and they blame themselves pass to you just keep still no money and their kid crying about. help me relieve me of my

money of guilt so here's bill fleckenstein praying hoping and believing that all the good faith in the world that the money will be found well let's turn to another clip or 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 jury regarder show was going 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 you know farias or illegal in the 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 and it's really troubling oh no bart chilton is keeps coming up reminder remember a few months back he was 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 says it eloquently they still look for a good movie there just steal money now and pretty soon they'll steal money accompanied by a knock on the head and thrown into prison that's what happens when you look close the crabs are on 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 that they have there to see if the state oh yeah so from two thousand and five bankers the 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 look things that we did was we allowed these internal reposed back in two thousand and five just to explain it well this is something where you can

internally commingle some of the accounts for the part of the day that we're going to post 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 that 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 congressman buying senators buying the supreme court buying the distal 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 year 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 plausible scenario in paris that gate that former guard the the bullet proof glass is there for a reason because otherwise people would just take all the jewels so there's rules so here you have in two thousand and two thousand and four or two thousand and five every single year the banks or the criminals or people who were nine seventeen ninety three in paris got their heads cut off because of their existence i call it the crybaby i still got it those people decided to rewrite the laws because they want to steal the money with impunity and the regulators said it was a bride 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. little now but i would never be caught in public with high heels of that color i'm a chanel man so let's turn to this woman in this next story laurie ferber chief keef counsel m.f. global and prior to that she was chief counsel at goldman sachs for twenty years ok she'll be great being with us 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 that could make more money for wall street or 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 aaa rated or double a right of sovereign debt is considered to be credit worthy but of course a c f t c c c. c f o s f o p p p all these regulatory agencies that add up to big bold up a spread soup of nothing they didn't bother to take a look at the fact that concurrently with the sovereign debt being is 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 one level two bezel 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 how come arlen 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 trillion wall street the crooked banks just issue fifty trillion more credit default swap doesn't matter if you put up one hundred cents of a dollar in 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 win and i'm doing the penn state on 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 roland is that movement is not

a market 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 lose the margin of the price they pre-determined 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 there for it this laurie farber and relation to the jeweler theft at winston's because i thought as soon as that she 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 b you suggesting that lloyd blankfein is a cross dresser who dressed up like this regulator for the c.n.c. seeing goes into meetings and lobbies for behalf of his firm playing the woman card he's trying to seduce how many how much what is oh my god now that i just very strange thought of well you're right on it here it's not

a no but i mean how far did you go. oh. but also large and lloyd go to get these rules change the law if you're a boy finally on m.f. coup pig fast twenty eleven bank of america merrill lynch is offering to buy claims against m.f. global so bank of america is 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 when they say oh bank of america wells what others. call bank of america merrill lynch they're. just joined into that. with the federal reserve bank they're just going to expand their

balance sheet by however many trillions of requires to make whole these these on the whole the 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 it'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 justice cafe 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 more giago art center and max kaiser them pyar banker konqueror there i am i think. all right stacey hammer thanks so much for being on the kaiser report thank you max go a much more coming why stay right. well . technology innovation all the developments around russia. the future are covered.

i am our skies are welcome back to the kaiser reports i'm gonna go to new york city to 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 all right barry first 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 loops instead they've created this false narrative this argument that you know what really caused the crisis that 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 that the 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 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 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 it 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 was 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 law 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 their thought now it depends on who mass it depends on which financial institution talking about if you're talking about the posits ory 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 bear stearns lehman merrill morgan and goldman the only ones on how 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 basil 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 repealed one hundred five scam where they simply moved that 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 o five that's just fraud is this let's not mince words let's 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 they fold 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 rivet if they were involved with subprime lending they embrace what we call boring banking they borrow money at four percent they lend it at six percent and they're out on the golf course that at four pm and that sort of local community banking that sort of credit union banking is potentially the biggest threat to the major

banks there is 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 put 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 mask lobel 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 just a new chapter in 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 short 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 on j.p. morgan bank of america creditors to m.f. global are saying their claims come ahead of the customers is that it is not 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 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 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'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 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 the dock. immense that you're bound.

to arbitration for any disputes you don't get to go to a jury as correct as to go to a judge ninety eight percent of all the 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 of two hundred eighty five million a city under the stall judge or a cough 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 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 fuck about regulation who cares about any of that you could do whatever you want about three seconds left when you think about the 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 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 also dot com thanks so much for being on the kaiser report my pleasure max sort of make you work with the well problem that's going to do it for this edition of the kaiser report with me max kaiser and stacy herbert our 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 keiser 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.