and low wages turn all the way with hundreds of arrests and dozens injured in clashes with police. attacks because the report exposes fraud in the world of economics as it continues to sniff out the scandal behind the financial had lines. guys are this is the kaiser report sexual favors for chicken the nuggets. oh my goodness i can hardly wait to get that story but first let's talk about the sinking the ship max you're not talking about the global economy or are you because that's our first headline cruise ship captain refused order to return to a ship so more information is emerging about the coast to can korea and the captain's role in abandoning ship now when something first went wrong the port in italy called the ship and he said no no problem is there's no problem here in fact

it's just a technical error so let's draw a parallel to the global economy because what happened when the stuff first started going wrong for years we knew there was something wrong and what did jamie diamond with did lloyd blankfein what did they say nothing's wrong you know just carry on they're telling the regulators oh nothing to see here people are dropping off drowning in a sea of derivatives and they're doing nothing about it so this guy abandon the ship and he jumps in the life boat trips into the life boat people are dead i would imagine his next job will be skippering an oil tanker for exxon he'll probably be skip bring some huge oil tanker and they can run aground on puget sound that will be his next job because as price on the open skipper market just went down ok so let's go back to the story here because when captain schettino told the coast guard told the people who are regulating the law of the sea when he told them it was just

a technical error but in fact was using that time to get into a lifeboat and escape well once the coast guard found out did they. you know provide him with more liquidity or more coverage know the guy the captain of the coast guard captain gregorio default shouted at him you go aboard it is an order don't make any more excuses you have declared the abandoning of the ship now i am in charge now that's what timothy geithner that's what ben bernanke that's what george w. bush and then obama should have done as in control of the u.s. economy and banking system they should've said lloyd blankfein jamie diamond all you other sh'ma gagne's you have abandoned ship get off i'm in charge right have ben bernanke you've been in charge of rescuing the cruise ship his solution would have been to take a boat out of the ship with a crowbar and make the hole in the boat and all the problems bigger that's the central bank solution to the global economic crisis is to make the whole bigger

with artificially low interest rates this is what's making the situation even worse and of course in europe we find out they're going to expand the european central banks credit lines by a trillion euro that's the exact opposite of what is required to bring some of this accountability that you're talking about the maritime law stepped in people are drowning. they're obviously dying so maritime law came in and said ok we have to impose the law now in the global economy people are dying from the derivatives that are being created that are making the top one tenth of one tenth percent fabulously rich and everyone else is choking on their own fiscal vomit and the regulators are making that easier for the criminals so this captain schettino he's brought to shore he's now everybody knows he's abandoned ship his excuse. captain says he tripped and fell into lifeboat and that's the reason why he abandon ship that

sounds exactly like the excuses that lloyd blankfein and jamie dimon gave to congress i tripped and fell. into tarp that well the algae would be the one that they always is is the market did it the markets unpredictable we don't know what the market's going to do and when the market did what it was going to do we had to do what we did even though they themselves are manipulating the market to create the effects that make them coincidentally incredibly rich and everyone else poor that's just a coincidence but this is the same kind of excuse that well this guy saying he tripped into the lifeboat and so all the way then lloyd blankfein and jamie diamond are saying well the market accidentally made me a billionaire i don't know if you know there's further parallels here max because it's emerged as well that he did he's now confessed that he did. deviate from course to go closer to an island to salute to his friend well he said he's done this before and it's always gone ok but he said i don't know why it happened i was

a victim of my instincts ok well here's an analogy we know that dabbles was coming up a lot of bankers got a devil's purse for hookers the devil has never been higher so to get that really fine hope or material they do stupid banking tricks like don't come for a bank with a few hundred billion dollars worth of debt to generate a huge thing to avoid the poker and that's pretty much what happens at devils so here's a guy running a cruise ship he sees some chick on the beach baby look at me oh people are dead well and accountability and maritime law yes on wall street the city of london no well he said he was a victim of his instincts john chorus line is using that excitement excuse oh it's just my testosterone i'm a victim of my being an alpha male now as no regulators will step up either they've abandoned ship there is one person elf there and that is. oh let's turn to this video sent to us by

a viewer lindsay out of. stock in the glow of artesia used as an art so the money will tell them you want that as their official ad for the show on that network so as we've said the global economy is listing it's sinking and what do the regulators do over and over they don't arrest the captains they don't fire the captains and tell them that they're no longer in charge no here's a tweet from jim cramer i must just proposes one trillion increase in lending that's what's needed i.m.f. stepping up. the table real heat so in fact the i.m.f. expanded their lending to a trillion now they're looking for six hundred billion more right well this is the

jim cramer stunt we saw in two thousand and eight remember when lehman went bust and there was a liquidity started to freeze up in the system and it looked like banks might have to pay for the mistakes that they made jim cramer went on c n b c and he did a hissy fit this let's let's cut to jim right now this one is in two thousand and eight and bernanke is being an academic it is no time to be an academic it is time to get in the bear stearns call listen open the door facing window he has no idea how bad it is out there is no. he has no you aren't. cramer are you going to has almost every single one of these firms you know where seventy two hours and he has do you want it's like out there now cramer he got his way member right after that paulson went in front of congress and said give us three quarters of a trillion or we're going to declare martial law that came out in the in the testimony later which turned into that was tarp and it turned into when you add all

the extra tarp features almost fifteen trillion in bailouts we know from request freedom of information act that there was a seven trillion chunk that went directly into the banks pocket another seven trillion of ancillary kind of was distributed to these guys very simply have that kind of money been used to bail out the homeowners the recession depression would have been over already two years ago b. obama would have come out like somebody who's a populist representing the people and not somebody in the pocket of the bankers and see kramer would have been taken off the air by now because he's a charlatan and a scam and as hedge fund as recommendations i presume produced an exact gain over the past five years of negative six or seven percent corn in my calculations so but max this. issue of the i.m.f. able to expand their credit facility up to a trillion dollars that's the equivalent of the captain of the ship saying oh it's

just a little technical issue as if the i.m.f. has money as if any of the member nations have money to dedicate it to this facility u.k. faces request for nineteen billion pounds as i.m.f. boosts bailout fund to one trillion dollars. didn't we just cover the fact that the debt to g.d.p. ratio in the u.k. is a thousand percent where do they get nineteen billion they engage in massive off balance sheet enron like special purpose and to defraud they create this debt. simultaneously creating an off balance sheet entity that they hope at some point will be made good when the economy reserve is growing well this is basically the model of the arson who's selling the charcoal of the buildings after he burns them down essentially the u.k. doesn't have as money then they cook it up completely in the shadow banking system

the multi hundred trillion dollar derivatives market is going to expand by another one hundred trillion dollars and that is financial repression financial old pression see and footing the bill if you have any capital you're treated like dirt in this economy if you are as if you are a welfare suit queen like wall street in the city of london they roll up the red carpet but while they're distracting you with these so-called technical measures like increasing credit facilities up to a trillion dollars that they don't have in the meantime they're not only abandoning ship but they're actually preventing you from ever being able to jump off the ship even try to save yourself let alone them coming to your rescue because i want to turn to a little clip here from chris hedges a former war reporter who is now an independent journalist and commentator and here he is on democracy now being interviewed about the national defense authorization

act he is suing the government to try to stop that and he notes that the intelligence community in front of congress testified that they don't actually need the authorization that was being granted to them so he asked why and i think we have to ask if the security establishment did not want this bill and the f.b.i. . director mueller actually goes to congress and says publicly they don't want it why did it pass what pushed it through and i think without question. the corporate elites understand that things of certainly economically are about to get much worse i think they're worried about the occupy movement expanding and i think in the end and this is some positions they don't they don't trust the police to protect them and they want to be able to call in the army and if this bill goes into law and slated to go into law in march they will be able to do that the noose is tightening and the wealth confiscation is accelerating it is so max you brought up this

chicken right now good story so we're going to go to this here woman offered sexual favors for chicken mick now gets police say so los angeles woman was seen going from car to car outside a mcdonald's drive through and what it turns out is that she was offering sexual favors in exchange for chicken make now gets with barbecue sauce i'm not sure it's worth the while she was trading sexual favors now what about greece which is traded their sovereignty for chicken make now gets goldman sachs one greece lost and move back to leave many greeks and scholars aghast greece's culture ministry said tuesday it will open up some of the debt stricken country's most cherished archaeological sites to advertising firms and other ventures well we call this some money in so many months ago they have income producing assets greek greece is not bankrupt they were the victim of a leveraged buyout by hostile raiders on wall street now they'll be converting their assets income producing assets will be going in the pockets of foreign bankers and the people have lost their sovereignty and they'll be bankrupt and

being in the streets as they were that was you know a nice show but there was no okuda talk there was no revolution the government still in place so you lost goldman sachs one all right thanks so much for being on the kaiser report thank you max don't go away my son. coming our way so stay right there.

welcome back to the kaiser report i'm max kaiser time now to go to london and talk with former compliance and market supervision director of the international petroleum extremes chris cook welcome to the kaiser report hello again mix already chris could you predict the eminent and of the oil market why and how well in simple terms the oil market has become like several of the markets almost completely financial are used by the participation was being called passive investors by god almighty masters they call them passive investors in the they also called inflation hedging investors and the participation of these

investors in not just in the oil markets but commodity markets and gates have completely distorted the operation of these markets right now ok talk about the financial ization of these markets it's a curious term the word passive because. as warren buffett calls it these are weapons of mass to. struction financial destruction so there's a very aggressive destabilization going on to make a very few people on wall street the city and london exorbitantly rich while destroying the underlying fabric of these economies but is it safe to say that the connection between the price that you see the paper price has absolutely nothing to do with the real price of the real stuff i think what has happened is that the price of the physical the actual stuff that we we use that it gets refined and into gasoline and then we drive we drive around using it has become inflated it is because basically their participation in these funds in the market has acted to

raise the price to a level which basically the demand starts to get destroyed this happened back in two thousand and eight i gave evidence to the treasury select committee back then they lost interest when the price collapsed and in two thousand and nine maxie basically happened again the price got pumped up and was kept up and see what is being missed here is that we're not talking about speculation we're not talking about people taking a risk so that they can get a transaction profit what we're talking about here is people who want anything but dollars right they basically see dollars being printed all they did see dollars being printed by the multiple billion they saw interest rates at zero percent and they thought well we'll buy equities we'll buy gold we'll buy commodities we'll buy food we'll buy anything but dollars and that is what happened that's what led to

the bubble inflating that bubble is now becoming is being reversed. and the money has been based in the last three to six months has been flowing out of the market again and back to the. back to the u.s. treasury bills and what we're about to see this was the subject of a recent article i wrote. in my view is a collapse of the oil prices exactly as happened in two thousand and eight for exactly the same reasons this inflation hedging money this risk averse money is flowing out of the markets and what we will see within the first six months of this year in my view and this is gone on record saying it you know i'm putting my money where my mouth is sort of thing i believe we're going to see a collapse of the price probably as low as fifty five sixty dollars maybe even less

all right let's talk about all the facts for a second there role in those commodities and dax and their relationship to be in terms of the problems you see in the oil market very interesting story delved into on your recent piece well this goes back a long way goes back almost twenty years it was goldman sachs who in basically came up with what was called the goldman sachs commodity index it's been since been sold off but the g.s.t. i was basically the idea that you could invest fund could invest in a basket of commodities of which energy was crude oil was the biggest by far. and that the genius piece of marketing which they came up with was to basically sell this to investors as what they called an inflation hedge so and they they they sold this concept of actually hedging inflation by investing directly in commodities by creating this fund the c.i. for and then in one thousand nine hundred ninety five what happened. was that

from that time onwards goldman sachs and b.p. were essentially i say joined at the head joined at the head they have the same chairman peter sutherland he was the head of the w.t. oh. very well connected he was the chairman of both organizations for twelve years and for nine hundred ninety nine john browne lowbrow i'm sorry he was also on the goldman sachs board for i think some of the most profitable years for b.p. and goldman sachs. during that that really sort of happy time which they had and the reason that this work max i think was that they in sensually being very astute people. b.p. realized that they were always hedging their production they were always selling futures contracts they were always protecting themselves against

a fall in the price by selling futures contracts and they had a very very big book of contracts i remember that from my ip this is our far back this goes whereas g.s. cie the fund which came into the market took a long term position on the other side of the market what they were doing was they were basically taking on oil risk and offloading the risk of holding dollars and if you think about it what b.p. were doing was laying off the risk of holding all. taken on the risk of holding dollars they were so b.p. were hedging their production and goldman sachs its customers were. protecting themselves against inflation and with that relationship which brought i think broadened and deepened by over a period of years and in my view. difficult to say exactly what was going on.

because it was all done between consenting adults you know. but i am i would be as a former regulator myself i must say i would be very interested in running back through all the interaction between those two firms from ninety ninety five. until two thousand and eight even more recently they have a bit of a false laddering in fact with these two parties acting in coordination with each other to completely obliterate the price signal mechanism and manipulate markets now of course viewers of this program know peter sutherland from his role in getting the irish government to throw the nation into perpetual debt servitude but bailing out angle irish bondholders so here's an all star all star the world of financial crisis better sutherland so tell us what dark what is dark inventory and why does it matter what's happening is that people are essentially leasing. selling

oil. today and they're buying it back a month from now this is the physical oil they're essentially bax leasing the oil and they're not doing it on exchange they're doing it between consenting adults completely opaquely what's happening is essentially some of the inventory that producers have and it could be b.p. it could be almost anybody could be the saudis it could be many producers no one knows exactly who it is but it is definitely going on the only people transparent in this are essentially shell who are vented transparently into a relationship with e.t.f. securities to essentially lease their oil and give price exposure the oil price exposure to the customer but most people are not doing this transparently so what's happening max is there is oil which the entire industry thinks is owned by the producer but it's not been sold already to somebody

else and what that means is when they see the price going a certain way in the physical market or the forward market they think are well will sell vase and then what happens is what they don't realize is that the person who bought it from them actually already has control of the oil and they get what's called squeeze what we're talking about max is a market that has become entirely corrupted entirely corrupted micromasters. well known commodity expert he gave evidence to congress in june two thousand and nine and he brought the world down on his head the entire financial world down on his head because he was saying exactly what i'm saying he was talking that he was saying that passive investors as he called them have no place in the commodity markets in fact no place in any market because they destroyed the price mechanism

if you think about it mark. the normal price mechanism you know speculators traders they buy they sell at a profit or try to or they sell and they buy back at a profit and it's a two way market and it's a zero sum game that's the market everybody thinks they're in the real market out there has been corrupted by the presence of people in it who are not buying to make a profit they're buying want to avoid a loss this is just not visible people the general public are participating in a market that is basically dead it's a zombie it's a walking dead market ok so just to emphasize your thesis there were looking for a trap door to open up under the price of oil and a price. moving down to the fifty five dollars a barrel range now imagine saudi arabia there for

a second so crosscut when the arab spring broke recently in countries all over middle east north africa saudi arabia immediately gave their population a huge bonus cash bonus to try to appease them and this worked pretty well based on this high price of oil if in fact your scenario plays out oil drops to fifty five dollars a barrel the saudis can no longer buy off their population what they are oil cash are they going to be in the line of fire for a revolution as we have seen in other north africa and middle eastern countries i believe that is the very reason what you know the price dropped in two thousand and eight before from one hundred forty seven dollars to thirty five and i think it's fair to say that there were crisis meetings all opec and all the rest and i think what's happened there's been a reaction to that you know they're basically entered into this sort of arrangement because they're prepared to give away some of the upside in protection against some

of the perceived downside and. yes if the prize those fall. they're going to need to look again well how how on earth could they reinflate the price to levels that which they comfortable of course. that's not difficult to do i guess it's safe to say that saudi arabia is mostly in the paper business and more so than actually in the oil business i think there are a lot more in the paper business much than people realize but i have no proof i would just be very interested in seeing the transactions that go on in that market all right fair enough chris tucker out of time but thanks so much for being on the kaiser report it's been a pleasure max thank you and that's going to do it for this edition of the kaiser report with me max kaiser and stacy herbert our thank my guests chris cook if you want to send me an e-mail please do so at kaiser report r t t v dot are you don't forget to follow me on twitter so next time x. guys are saying by all.

the world with. its technology innovation all these developments from around russia we've got the future covered.

with the blood still flowing and the body count growing the arab league reportedly wants to carry on monitoring inside syria despite being slammed for being totally in effect. silenced and thrown out iran's english language press t.v. news channel gets kicked off british airways for fell falling off a foul of broadcasting laws something that the channels dubbed a clear act of censorship. romanians are one of their present protests against corruption and low wages turned ugly with hundreds arrested and.