talking in pre-recession territory talk to me a little bit about this. well the g.d.p. quarter to quarter rose two point eight percent one point nine percentage points of that two point eight was refinement of inventory wasn't supposed to be that way remember the inventory replenishment was supposed to be the last quarter it didn't happen that way and so now it's happening this quarter it's happening this quarter at a time of decreasing sales and look at some of the apparel reports that come out you know i had a chart on my blog not too long ago showing a decline in the cubic metric imports of apparel and we've seen j.c. penney's come out it's now competing with wal-mart everyday low pricing forty percent price reductions across the board so we're seeing a lot of signs here you know automobiles held up. pretty well so we had amatory hold up well well if we look at what j.c.

penney's is saying and doing i don't think retail sales are going to be holding up going ahead and in fact i think when the fed came out on wednesday and announced that they were going to hold rates all the way below zero percent all the way through the end of two thousand and fourteen i think they had advance notice of these g.d.p. numbers but year over year. one point six percent the other reason why we're up anything at all is if you look at the g.d.p. deflator point four percent you believe that as an inflation rate i don't i don't think anyone else does either so these numbers were much much worse than what was reported and that's thing you mention about rates being there that's something that we always bring up the people on the show whenever they try to say that things are rosy you wouldn't have an economy on negative real rates if you thought the situation was good but also what about quality of growth that's something else i'd

like to talk about alec to point out because you have a lot of economists that always say would you. new growth and that's it will grow our way out of the problem but if you just put emphasis on growth and not the type of growth how does that prevent us from getting the kind of growth that we got during two thousand where we had a housing boom a credit boom and then when that blew up all we were left with was the nominal debt load. oh the tiger grows we have now is growth in food stamps growth in government programs. growth in government transfer payouts you know it's it's government spending that not private spending that's keeping these things together but you know to get back to to the point that was ironically brought up in devices by the way how come you're not there having fun you're letting a lower number. but. they are they were talking about this equity income problem. look who's responsible for that dmitri why it's the fact that in two thousand the greenspan fed came in and

bailed out all the banks that then made. bad loans to dot com companies bad loans to foreign governments like argentina so in the wake of that greenspan purposely heal a housing bubble who did that benefit that benefited the bankers that benefited wall street brokers that didn't certainly did not benefit anyone that bought a house had their property taxes go up and up only to see property only to see their property prices stay high while the housing crash plunged wiping out stock market in the process then what what is what is the bush administration do what does the obama administration do we bail out the bankers who does that bonus well that benefits the banks that benefited wall street that we have record bonuses back once again so you know you want to look for the source of the income inequity

that they're talking about there by god it comes from the fact now it comes from you know i think you're not going to disagree for me on that actually when i got out of college one of the first jobs i had interviewed for was lehman brothers and they were just busy slice and dice and mortgages they needed underwriters so it was a big boom time for them but i want to play for you part of a of an interview a long interview that jamie dimon gave at davos yesterday we played part of it earlier with laura you might have heard it but i want play this part now and i want to get your take on it. i've always believed are going to muddle through because i don't think there's a better solution unraveling the euro is a terrible thing. so muddle through that that to me is code word for we the banks are going to need to stay solvent stay liquid can do to make profits not go bankrupt while the rest of the economy has to suffer for one two three however many decades it's it takes what does that say to you when he says muddle through without

me bubble through and i think a muddle through i think of japan look at what japan is japan is muddled through now for two decades fighting deflation and then and the endgame of japan is near at hand the endgame of japan is the currency crisis they've now got the g.d.p. of two hundred thirty percent they're expecting to have this year is that muddling through well yeah for the last two decades they muddle through but what about the currency crisis that awaits that and the other interesting thing was with geitner who said oh you know austerity programs well oh those are for greece those are for france those are for germany you know what about an austerity program for the united states and i think stary program in the united states that are you know one point four trillion deficit and we're heading into a recession so you know what that means it's going to get worse and no one believes the recession is coming there are very few people bleeding recessions going united states i think one's right hand look at those g.d.p. numbers you look at g.d.p.

deflator that they're using where they came up with this preposterous g.d.p. in the first by you know we're on a fast track towards recession right here right now. bernanke the you know acted is trying to stave that off with preannouncement that they're ready to do another round of quantitative easing what it was that doing as propping up oil prices that sending gold higher and that keeping interest rates low it's destroying everyone on fixed income so is his policies are counterproductive not contribute to the to this income inequality and distorting those on fixed income. that's what they're doing they have not learned a thing so the thing i'm actually worried about is that these heroes is a negative real interest rates these q.e. programs these lock in rates until twenty fourteen and beyond that they may actually work not that they'll work you know what the p.r. rationale is but they'll actually work in preventing banks from going bankrupt and

keep the financial system afloat while the rest of the economy can use the kind of model to do in this new normal of high structural employment eventually leads to social unrest and that's what we saw a kind of with the occupy movement and we're seeing more and more what do you think what do you think about the political dynamic that's going to come out of this. oh we're saying social unrest right now certainly in greece we're seeing social and unrest in the italy. big major major strike over there hardly anyone even reported and i didn't have time to report on and on my blog we're seeing politics in france the trade barriers in france spain is vectoring with france bickering with spain. the president of france is is want to do things to protect french interests meanwhile spain is careening with twenty two point eight percent unemployment and the trade policies are not for was in the purpose of the euro zone was to get

everyone together well the trade policies now in in france are isolationist not revolving around we had started cozy proposed and then backed off of just told in financial tax so you know what's up with that what's up with that with the banks protesting and i think it's a bad idea in the first place but cozy look preposterous to propose this and then back down on behalf of the banks so you know yes we're going to see all of the same kind of stuff happen here in the united states you know we're heading into another room recession i think why many rate we're going to let me get if i can just because i want to bring it back to greece because you mentioned greece and you have that p.s.-i which is just basically it's it's a it's a deal to to have greece restructure that with private creditors involved really quick because we have to go what do you think is going to come out of these negotiations are we going to eventually get that greek default sooner rather than

later. well let's recognize that greece is already fault i mean here we've written these bonds down already fifty percent the next card is going to take seventy six percent the s. and p. or movies or french one of the three came out and said you know the this is a default it's just the default it's triggered credit default swaps it's looks increasingly likely that we're going to have a credit event but you know that drove this thing out now so long at great expense that the banks are probably prepared for this now you see these not prepared for this now it is easy b.'s in a situation where the e.c.b. it's going to have to take some losses on its but there are major shakes and i'd start interesting that you don't know what i got of this start interrupt you missed but we have to go i wish it wasn't live we continue it but that was that was investment advisor percent the pacific capital my commish said lock and and thanks for tuning in that's a better show for today you can follow me as always on twitter covering delta and

you can follow or not lauren lyster and you can give us feedback on our show are you two channel on you tube dot com slash capital account i'm demeter you can feed us from everyone here at capital account have a great night. the

top stories the arab league holds its observer mission in syria over the upsurge of violence while russia slams the new u.n. draft resolution to end the conflict saying it's unacceptable because it targets regime change. protesters in poland vowed to continue fighting the international anti web piracy part that they say brings internet censorship under the guise of protecting copyright. yet another blow to the struggling euro zone is the credit ratings of five nations are cut despite the crisis tightening up from the world economic forum. i'm kevin allen thanks for being with us i'll be back with you for

the news in full in sixty minutes time on this channel but now next in new look to the ten pm hour you just twenty seconds away from the alone a show coming to you from washington d.c. . welcome to the lone a show where we get the real headlines with none of the mersey working we live in washington d.c. now today i are going to take a look at new economic figures coming out for the us ample take a look at some of the goals that obama laid out in his state of the union address

that includes the you in the new unit take on mortgage fraud reasons anthony rand was going to help us hash it all out then we're going to speak to the very first official occupy candidate his twenty nine year old who considers himself part of the occupy philadelphia movement and he's running for congress in the democratic primary so is going the way of the tea party really going to be looked at in a positive way by the occupiers and as republican candidates bemoan the influence of negative campaigning in the elections will speak to somebody who's been doing opposition research for years and has written about this political underworld in a new book so just how much money goes into it and what are the shady practices that most americans don't know about we're going to all that and more for tonight including a dose of happy hour but first let's take a look at the mainstream media has decided to miss. all right so it's a nice we're going to start off by doing a little bit of backtracking you see last night there was yet another republican

debate this one hosted by c.n.n. and moderated by wolf blitzer and conspicuously absent from last night's debate was talk about defense spending and whether it's the right or wrong way to go a little odd considering that in debates prior we've heard the candidates say a lot about what they think needs to happen there i don't want to cut defense money i want to bring the troops home i'd probably have more bases here at home we were closing them down in the one nine hundred ninety s. and building them overseas that's how we got into trouble so we would save a lot more money and have a stronger national defense and that's what we should do we have a president in states who said he is going to cut veterans' benefits cut our military at a time when these folks are four five six seven tours coming back in and out of jobs sacrificed. everything for this country in the present states can't cut one penny out of the social welfare system and he wants to cut a trillion dollars out of our military and hit our veterans and that's just got under this president in

a prior presidents we keep on shrinking our navy our navy is now smaller than any time since one thousand nine hundred seventeen and the president is building roughly nine ships a year with a raise that to fifteen ships a year not because we want to go to war with anyone but because we don't want anyone to take the the hazard of going against us we want them to see that we're so strong they couldn't possibly defeat us. right so you could be saying well no no we've already heard what the candidates have to say about defense spending why would we want to listen to any more you see yesterday the obama administration released their defense budget with all of the details i mean they laid out specifically where the four hundred fifty billion dollars in cuts over the next ten years will be falling so you think now there's an official plan c.n.n. it would have made the candidates revisit their statements from paul for example and i think we already know how ron paul's feel about all this feels about military spending so maybe we wouldn't be really heard anything new there but mitt romney the candidate would constantly be mown what president obama is doing to this

country supposedly apologizing for america abroad which by the way he's never done and cutting the navy and making us less safe or rick santorum who thinks that all the defense cuts are falling on the backs of veterans and instead of offering up that the administration cuts from some incredibly expensive and completely unnecessary weapons systems and says instead it says chop away its social programs so let me just give you a few details about what exactly is in this new plan that president obama and leon panetta have laid out if you want a really good read out i suggest you get a wired stage room but i'm just going to point out a few point facts. first and foremost if you want to address mitt romney's claim that our navy pales in comparison to the navy that we had in one thousand nine hundred eighty eight at the obama administration is not building enough ships and he'd build fifty to year once break a few things down there right you know the obama administration is not going to be building fifteen ships a year because guess what mitt that will cost billions of dollars more and here i thought you were in a fan of big government spending secondly to even try to compare our naval fleet

today to that of nine hundred seventeen is absolutely ridiculous and anybody who works in defense can tell you that the entire point of the new strategy the new weapons of the us is supposed to be about is all about quality and not quantity remember panetta is whole line about a smaller leaner but more agile flexible and technologically advanced force so some ships need to be retired because they don't even have the capability to shoot missiles the way the latest ones do now there are substantial cuts being made to military personnel and veterans benefits and personally i think that we're going to do just fine with eighty thousand fewer troops and twenty thousand fewer marines at the entire plan from now on is not to long out drawn long drawn out land wars anymore especially if you consider that a lot more money is going towards buying fancy new drones according to obama's new budget there is going to be funds for sixty five new predator and reaper drones now what i think is complete b.s. is that the f. thirty five joint strike fighter family now the most expensive weapon system we've

ever invested in just got a reboost from defense secretary leon panetta despite consistent flaws being found so that's what should go not the funds to the veterans benefits but anyway i think i'm getting ahead of myself here the whole point is that where defense cuts will land is now very clear thanks to this very detailed plan that has been released the secretary of defense the chairman of the joint chiefs of staff all say that just because there are cuts coming in no way does that lead to a military decline in fact defense spending is going to continue to grow for the next ten years even with the four hundred. billion cuts it just won't grow as much as it has been every year since nine eleven and so when you have so many of the republican candidates attacking the president for defense cuts being hypocrites calling for less government spending and yet wanting to build fifty new navy ships a year you just would think that maybe c.n.n. and wolf blitzer want to ask them a few specifics would tell them to quit their grandstanding and point out exactly

what it is the bothers them in this new budget but no i guess there just wasn't enough time for that last night they had much more important questions to ask but i asked each of these gentlemen why they think vera was would make a great first lady congressman paul. so who's going to be the best first lady question away but as commander in chief what exactly do you think of the strategic outlook and the increased spending on defense has been laid out by the administration and the pentagon yeah that little bit they chose to miss. well there are some new economic figures coming out today showing that u.s. g.d.p. expanded at a two point eight percent annual rate in the fourth quarter of last year that was the fastest pace in want to have years for u.s. economic growth of it was again lower than what economists were expecting to answer

why maybe we should look at government spending which fell by two point one percent in the last quarter which is the biggest drop since one nine hundred seventy one according to bloomberg and we can't say if these warnings have been made before specifically by federal reserve chairman ben bernanke and when he cuts it's going to have an impact on growth but do these numbers tell us the austerity is the right or wrong way to go here to discuss with me is anthony rant as the director of economic research for the reason foundation anthony thanks for coming back on the show are we think of this g.d.p. growth two point eight percent is it good or is it just not good enough it's a really weak number i mean not only were people expecting more but more importantly if you look at what comprises most of what is in the two point numbers it's inventory building and we saw this happen last year where towards the end of the year there's a lot of inventory build over most businesses didn't quite meet the demand and so you're going to see lower economic growth coming in the next couple quarters if that's really sort of where the trend is at but the other thing is

a majority of g.d.p. numbers that have come out like first quarter first the first time advanced numbers are come out over the past four or so years they get revised down so it's two point eight for now but if the trend of what we've seen either be is anywhere close to where it's been the numbers probably get revised down a bit lower than where it's at stephen weaker and you would think that after all that stimulus spending that we would be you know in such a fantastic place for this you know the spending is long gone right and so this is part of the problem here is that like i mentioned the government spending went down by two point one percent. yeah i think like that and bernanke you say that this is what happens when you cut and so i mean do you think that affects the discussion at all either every republican candidate is still calling for more cuts in government spending and they think that a magically make the economy grow well to the degree that growth in the economy is dependent on the government spending that when you cut the you know when you cut government spending then you're going to have a drop off in the economy i think that's where the idea that austerity is helpful

sort of comes into play here is it's not helpful in the immediate quarter after you cut it's helpful down the line because you're removing a government which is in sort of intruding on the private sector and then when to pull back the government you are the private sector to step in a place then you know three four quarters down the line that's really going to see a lot more robust growth what we have seen over the past three years of sort of massive spending and bush you know the bush administration's spending is just even both negative growth in two thousand and nine but even then coming out of the recession you know one percent growth one point seven one point three two point eight revised down to two point three just really tepid growth not the kind of robust growth that we're used to seeing in an economy that's largely driven by the private sector what do you think about ben bernanke out this week essentially saying that interest rates are going to stay where they're out until at least twenty four you know some people get overly excited about that because that means that interest rates are staying low but it also seems like kind of a gloomy outlook because he's saying that we think things are still going to be

pretty bad and moving along pretty slowly for the next two to three years at least he's being honest this time as opposed to last year in the face of the had this really rosy outlook about two thousand and seven which are two thousand and eleven which i thought was going to be ridiculous at least to being honest this time but the idea that we're going to keep interest rates low through two thousand and fourteen if you look at i mean that was just the phone see decision if you look at some of what the other fed governors are looking at their thing about two thousand to two thousand and sixteen it is it is unbelievably asinine there's no other word for it i mean it is it is mind boggling you're wrong. the approach of the fed has been. highly interventionist over the past several years it is done absolutely nothing positive q.e. two absolutely operation to us absolutely if you ask anybody that's looking the markets. do you mean the exact same words unless you're some of the people that are able to benefit from a lot of the carry trades and be able to use this free fed money to invest on your own behalf beyond that it's not helpful at all and the idea that we're going to

continue to be pushing this out through at least two thousand and fourteen is that's really dour that's you know that's going to be making this vision of what we could be that long come true and so this is where we get to the problem that you and i consistently talk about is that perhaps before you think about having incredibly low interest rates you need to deal with the fact that there are a lot of people that have homes that are underwater right that are already just so far down in the dumps that they can't even take advantage of these things right now and so president obama in his state of the union address announced i don't don't know why it took him three years to do it you know to finally create a unit to look into some of the mortgage fraud what do you think about what's going to help we've got people that have been looking into mortgage fraud you've got state attorneys generals that would look into mortgage fraud if you have with you you're going to need general direction i mean all i want and he gets out of her exactly about her is hard core about it and he's been hard core since he stepped into office as attorney general and he's going to be leading up this unit which is basically just a federal version of what the states have been doing already. it's it's great we

need to be stopping mortgage fraud i'm not in favor of mortgage fraud but this federal unit does almost almost nothing to change the actual nature of what's going on in our in our approach why they do that because they don't know how or because they can't for example let me tell you about a little story that we did on yesterday's show in arizona where the state is trying to do this and look into bank of america and suddenly all these people the file complaints are no longer calling them back turns out the bank of america said hey you will help me re modify you know give you a lower rate if you promise to never ever speak ill of us. and they just silenced everybody and i guess when you need help from the bank what are you going to do it all right well i mean that it's coming or they making it impossible in that house in the federal government or a unit possibly when there's a federal government can do just as much about that as arizona government can a story like that comes out which is pretty ridiculous by a bank to say something like that and it gets to the media and then you can crap all over the bank for saying that having a federal mortgage unit doesn't make those stories come out any more in the states

you know it's again it's not but we're it's not that i'm saying let's have more mortgage fraud it's let's not depend on this federal mortgage unit to do anything more than what the state attorney generals have already been able to do i don't think it's going to help much we shouldn't be putting our faith in another one of these programs because it is largely a smokescreen just like the federal refund program that was also announced in the president's state of the union he said in context of we you know we need to get construction workers back on the job and we have all these homeowners that are underwater and people are struggling to make their mortgage payments so we're going to take a fee we're going to put on the banks and we're going to have a mortgage refinance program for people even beyond fannie mae and freddie macas essentially what he said but to be able to qualify for any kind of a program like you outlined unless what the one the details come out is completely different than what he said you're going to have to be have been current on your mortgage for six months or more so it means that this program only helps people who have been able to make their payments presumably people that don't need federal government money to be able to make their payments so that's you know up to three

thousand dollars as what he had around three thousand dollars that's that's great that's money but that's that's a stimulus you know it doesn't it doesn't it doesn't it doesn't help everyone is any of our towns really good in a state of the union address it's not like they're going to do that again as an answer on our mortgage fraud unit sounds really great in a state of the union but it doesn't help us really quickly to timothy geithner and i guess this wasn't really shocking but he basically told bloomberg in an interview that if a lot gets reelected he's not going to be sticking around for that second term. right is i mean you're out of your reality but i don't know if i can i do not i'll change that we're going to the regime how much control how much you know of the moves you think are really plays well at the very least a guy who was deeply involved and the federal reserve in new york fed has oversight of of wall street directly over the entire build up of the mortgage bubble the financial crisis at the very least that person should not be the secretary of the treasury so do you have any faith that he won't replace them with somebody just

like i don't i mean you know they'll be laughing as if he goes in and the answer will daley anybody any brains and somebody else maybe just maybe just as bad but it almost can't possibly be worse than them having somebody that was deeply involved in all that continue to try to clean up the mess and not be able to do anything about it we're able to say when he makes a better job hopefully exhibitor anthony thanks so much for joining us tonight. well coming up next in the show you some shocking statistics on private prisons holding on documents and immigrants we're going to take a look into opposition research and the industry that can make or break political campaign.