what about the reaction of greek citizens to more austerity without any light visibility and it is dark tunnel. those protesters were chanting out with the nazis not exactly a sign of european brotherhood we'll look at the bailouts cost to society and the u.s. forty states have signed on to a twenty five billion dollars settlement with the five biggest banks guilty of foreclosure abuses such as robo signing but who would this provide relief to exactly homeowners are big banks author and former goldman sachs managing director nomi prins will give us the real scoop let's get to today's capital account.

so federal reserve chairman ben bernanke he testified before the senate today last week remember he testified before the house and the media that i saw today was wanting to hear if the good u.s. jobs numbers that came out since bernanke he had last spoke in would change anything about monetary policy or about what he said now remember the jobs report has been deemed good because the headline unemployment number went down a little bit to eight point three percent now bernanke he actually said this understates the weakness of the labor market in that hearing today but here's the thing do these monthly numbers even matter people who crunched them seem to say maybe not david stockman reagan's former budget director in an e-mail that's come out says you basically can pick and choose what you want from the reports to support your thesis or the trends that you want to highlight he says in short if you spend a little time with these numbers you'll know that they're being made up and this

kind of echoes what others that i've been talking about this week john mauldin a financial expert was writing about saying that these numbers are subject to larger visions up or down so taken with a grain of salt and if that's the case and the bureau of labor statistics who puts them out is then the emperor wearing no clothes coming out with these meaningless numbers each month why are markets in the media hanging on them and speaking of news that the markets and the media hang on greek leaders are still in talks over a debt deal that actually got postponed a little bit but then before that they did agree to some more public cuts to workers there's more to come but forget the market and look at the reaction on the streets of greece ok. so those are some protesters burning the german flag that you just saw chanting out

with the nazis so how long will greeks continue to bear the weight of austerity with no end in sight and of policies being pushed by people they don't know working together with politicians they don't trust and these talks that go on with leaders in detroit international lenders we wish we could have insight into what goes on behind those closed doors but we can't so we'll just have to imagine help us. are they just talking to themselves making it seem like they're having a fight when really they're working as one to push through these reforms and again at what cost to society well here to talk about it nomi prins author of black tuesday. the vocal put it right there she's also former managing director at goldman sachs. and we're so happy to have her again on this show know me welcome back to capital count nice to see it thanks for being here i know you were tweeting

earlier today about this situation in greece what would be your message to the private sector and to the i.m.f. as we're seeing pain inflicted once again on greek citizens at the mercy of international lenders and a government led not just by a technocrat in charge but by leaders of political parties that have become deeply unpopular and are trusted. it's tremendously sad and what i tweeted was something to the effect of if iran greece or someone with any form of true humanity and feeling for the population and the economy of greece was actually running greece then the decision would be to forgo paying bondholders to forgo making arrangements with the international banking community with specific private means or through the i.m.f. or the e.c.b. and say sorry we're actually going to take care of our citizens the ones that are

in the streets the ones that are losing jobs the ones that can't afford homes the ones that have inadequate health care and so forth those are the people we'd actually be trying to boost rather than external foreign lenders bond holders and derivatives players and what is so sad and so unfortunate is that the people in power that includes in greece that includes throughout the central entities these major banks obviously don't care and continue to make the situation worse for the population agrees and what i don't understand me is it seems like the conventional wisdom doesn't even allow that there would be these other options some like what you're talking about i want to play a little bit of what ben bernanke he said on the hill about it today and then i'll get your reaction countries like greece and portugal have really no option they have they could not borrow. they were experienced excluded from the private market they're relying now already a hundred percent on the i.m.f.

and european union for funding in. it order to qualify for that funding they've got to show they've got to play in to restore fiscal balance. so he acts like you know something like default isn't even an option but yet putting greece into this trajectory that just will continue this depression where any kind of of the money that the country makes is just going to interest payments under the weight of this huge debt that is the best option why isn't default or debt forgiveness even on the table or part of the conversation well ben bernanke of course is one of the bailout architects for the united states banks and he along with treasury secretary tim geithner and the administration here have made it very clear that they want bailouts to continue because bailouts mean that banks get paid the bondholders get paid that money markets in the united states or are kept whole that there is no crazy losses going on in the financial community and that's what they know that's

where they come from and that's what they support the idea of forgiving debt the idea of even allowing a population to heal itself rather than have from it extracted its future its economic future in order to pay bailouts isn't on the table because that's not in their philosophy because they don't feel the pain they're probably not watching the people in the streets and if they are they're thinking hey you know these people ran up their own death they were like people wanted pensions and they had to be paid in greece was all out of bounds and so now we need to rein it in and that's basically what ben bernanke he was saying in different words in a speech this morning that's what the leaders across europe have been saying that somehow greece needs to restrain itself as opposed to all of the banks the derivatives players the bond holders that bet on greece. and in doing so made the cost of running greece higher for greece and by coming out and wanting their money back and wanting it extracted from the future or economic livelihoods of the population they feel they'll be made whole or even accept

a small loss but that's better than than nothing and they want to accept as little a loss as they possibly can and i totally the philosophy yeah i totally hear you know me and because you mentioned money market funds let's bring this to the us because investors have been fretting over how a greek bond default would affect money market funds in recent months reportedly firms have moved to reduce their exposure to european banks but nonetheless the s.e.c. is now reacting and there are reportedly close to a proposal to regulate the money market fund industry a two point seven trillion dollar industry i know know me that it's easy for us to be cynical rightfully so over these kind of regulations and we're not fortune tellers but i'm just curious if you think that this could be a step in the right direction. well this is the one thing one of the things that the s.n.c. has has said or proposed that actually makes some kind of a sense to make sure that the money market industry that is. not supported by the

government although it had to be supported by the federal reserve in the treasury department back when lehman was falling apart and people were extract in their funds quite quickly and there was sort of a run on money market funds and they wanted to stop that run so they basically backstop her or guaranteed for certain losses which they then took away a couple years after that so what's being proposed in the i.c.c. is a combination of do we ensure that if there is a run on funds if investors want to take money out of funds there's a stop on that i disagree with that i don't i think of the festers want to take their money and investors include you know regular people and people with pension money who is allocated to money market funds and so forth they should not be stopped out of taking their money out if there's a loss on the other hand i believe that there should be restrictions on the types of securities that money markets can invest in they were they were created to supposedly invest in safe securities and what happened in the wake of lehman brothers and leading up to that run was that money market managers were investing

in pieces of c.e.o.'s and pieces of other types of securities that might have been rated aaa but as we know clearly didn't have that zero kind of a risk so there can be restrictions on money markets but i think that's going to continue to be debated now between the money market managers and the f.c.c. to see what really comes out of that discussion right of course that's where we really see these things fall apart but you made a really interesting point which is that these money market funds are designed to be safe yet we've seen them take risks why do you think we've seen them take these risk on europe do you think this is an unintended consequence of the fed keeping interest rates so low as zero percent in the u.s. . you have to keep in money of zero percent means that anyone who's in a money market fund that's investing in safe security and treasury and so forth is getting very little return on it so the money market managers are saying well if we can't return money to our customers we need to go somewhere where it's more risky i.e. the interest rate is higher in order to provide them

a return so that they will give us their money so it's kind of this catch twenty two rates are low so they look for higher risk that's exactly by the way why the subprime catastrophe started happening because rates were so low in the beginning part of the two thousands of banks look for other ways and other places to extract high interest rates from and hence we saw what happened from a fourteen trillion dollar toxic asset scheme that was based upon that situation right now if they're looking towards europe for higher rates that's that's the reason but what it they're doing is really betting on european countries and then when money markets come out of the bat it hurts the countries even further so it's it's a negative catch twenty two in that respect and what about the impact of dollars wap lines that the fed open for european banks is that kind of a backdoor bailout for these money market funds. it's more of a bailout for the banks themselves to some extent for the money market funds that are customers of the banks in other words the managers that buy their securities

from the banks that are really the bigger players in europe and so forth and it was definitely a backdoor bailout for those banks and a lot of it in the fed even said this is the time when it made the swap loans available went to helping the united states banks who had by their own choice exposure to your and that exposure was not simply lending money to greece but it was a wanted to privatize contracts an immense amount of speculative risk that should not have been backstop but of course was the ok and then i just i want to touch on this because of course ben bernanke the big question of him was how is he going to respond to the new jobs numbers that came out on friday for the united states and then there's people coming out saying who cares these jobs numbers are so massaged so subject to revisions up or down don't put a lot of stock in them do you agree. yeah the reality is on the one hand ben bernanke you wants to play both sides he wants to and will keep interest rates low so the banks will continue to get cheap money so they can continue to look solvent

so they can continue to grow their derivatives books and other types of trading and he can ignore that so that's why he's kind of saying you know take these jobless claims these jobless numbers which came out on friday and had the appearance of a lower unemployment rate with a grain of salt playing both sides and i guess those numbers can be interpreted in a lot of different ways and the reality is we still have a tremendous number of people unemployed the participation rate the number of people who are even bothering to keep looking for jobs is at its highest rate in thirty years the nature of the types of jobs and the amount of money that they provide when people can find them is right slower relative to the cost of living so there are so many qualitative measures that still have to write those numbers no matter how you debate that absolutely such a good start meaningless and know me i want to ask you one more follow up on that we have to go to a quick break but when we come back we will have more with author nomi prins. and still ahead relief may soon be on its way to homeowners who have lost their homes

to foreclosure fraud but is the settlement that would require banks to provide these billions of dollars to good to be true look in to our conversation with nomi prins first your closing market numbers. here is that so much in which of course you wanted to be exposed to michelle for years being called a very big deal in many homes you are dealing with the entire tech sector but there's the. old. technology innovation all the developments around russia we've got

a few jerks harbored. welcome back let's talk about another aspect of the u.s. economy that is it healing or is having a hard time in the u.s. housing and forty states have signed on to a twenty five billion dollars settlement with the five biggest banks that are guilty of foreclosure abuses such as robo signing of documents but who would this really provide relief to homeowners or is this kind of a good deal for the big banks that are part of this settlement will know me princes back author of black tuesday to talk more about this know me before we get to that i just want to follow up with one thing on the b.l.s. numbers because if you're saying you know basically they're meaningless and there's so much that's not included in them and who knows if they even are accurate why do markets and the media put so much stock in them if the b.l.s. numbers are kind of the emperor that have no clothes has ever won just decided ok

we're going to pretend that the emperor has clothes and we're going to trade on that information every month anyway. i think trading in general looks for reasons and if a b.l.s. unemployment number comes out it's something to look towards it's something to trade on if it looks like it's low or that means something good and i think they're just really looking for a reason they're not really analyzing too far in the media goes along with that it's a headline number it's easy it's up it's down there's no need for interpretation and that's been the accepted mode of trading and reporting on it yeah i completely agree let's switch gears to this settlement with the foreclosures in the robo signing and those five biggest mortgage banks that are involved i know this has been going on for a long time it's been going on for thirteen months there's been one delay after another but now the new news is that this is closed this settlement might happen twenty five billion dollars to help homeowners presumably and also let the banks sign off and have a settlement is this

a good deal for who banks or homeowners. as usual it's a it would be a good deal for banks in the disguise of being good for homeowners it's it's a different way of doing that the ham program which which obama had come out with which was supposed to help millions of homeowners and didn't and the reason it didn't was because it gave the banks the power to decide whether or not they would refinance or restructure mortgages for individuals so they had individuals going into default at the request of the bank so that the banks would be able to supposedly help them and they're not helping them in exacerbating a bad situation so that was a disaster and it is an ongoing disaster so this is another take at the same type of situation except now the notion would be that there would be government subsidized twenty five billion dollars and out of that money seventeen billion dollars which is the numbers being discussed of course nothing is really been decided but seventeen billion dollars will go as credits to these five banks from which they would be able to decide which of their customers they want to work with

would kind of be a different version of have customers would say all right here's this mortgage it's underwater we want refinancing can restructure can we reduce the principle the banks would be in the power seat of deciding how they use their portion of that seventeen billion dollars to do their job which is to work with customers to refinance or restructure their debt which is something that the government did with the banks when it provided them all these subsidies and bailouts a few years ago but which wasn't carried over into the homeowner community which is why foreclosures have continued to rise defaults continue to be bad in the housing market continues to be anemic so really all it's doing is giving them an extra option to do their work and the kick would be that if they don't work with borrowers to refinance then the government would take away these extra credits that they were giving them to do their jobs anyway and yet the banks are having a problem with this because they really just don't want to have any one tell them

what number should be set. upon on the one hand on the other hand they want to get out of any future lawsuits any future fraud problems that they could have and so part of what they would want from any settlement aside from getting this money to help them do their jobs and manage the risk that they took on is to be free of any prosecution of course and know me we just have a minute but i know you've said that nothing is going to well i don't want to paraphrase you but the issue of marking to market these these mortgages that are on banks' books will anything really improve and tilled that is where the pressure is . now and this is what i've been saying from the get go is that if money had gone towards borrowers when mortgage values relative to homes were declining that would have helped this entire housing situation it would have also helped borrowers and it would have helped banks but now what happens is banks have all of these homes on there and mortgages and on their books that they're not properly marking so banks

show themselves to be healthier than they actually are when they actually have collateral or homes that are forward deuced in value relative to the loans that they gave borrowers on the back of those homes and so they're not showing an honest portrayal of their value and yet they're getting subsidies and cheap loans and build outs anyway right so a continuation a lot of a lot of the problems we've been talking about over the last few years i certainly appreciate you being on the show and giving us your expertise that's always such a pleasure that was off there are no mean pain you. think. all right before we go we wouldn't want to miss an opportunity to give us to give you our three cents on a couple stories and we have

a special cameo alone and kosky the illustrious host of the alone a show is here with us dimitri is still out sick so i think that this is a very exciting replay i am very excited the little i made dimitri get sick just so i can come on now to talk a little bit. ok so basically there is a new buzz about a threat to global markets first here's a hint. reportedly the new buzz word is an extraterrestrial it's extraterritoriality or e.t. and this in this case the u.s. is the global alien that is threatening markets acting unilaterally with aggressive new market rules that critics say will hurt u.s. firms foreign banks and international markets and one fell swoop so this is

obviously in reaction to the financial crisis concerns that the u.s. is going beyond its authority do you buy this of course i don't buy i find it very hard to believe because we haven't even seen the u.s. government been able to instill any kind of really strong regulations i mean you had dodd frank but i think that was a very soft job everybody would agree they haven't gone after anybody in terms of criminal prosecutions of the financial system so now finally in one fell swoop they're going to be able to instill this on the entire international global economy if they can even do it here at home i don't know either that i wouldn't be surprised if this wasn't coming from you know people out of the united states but if you have like jamie diamond and brian moynihan pointing this new phrase to try and get the u.s. to stop with the regulations shannon we've been talking a lot about aliens on this show with these stories here time period you have your protection to the global markets needed to. bring in the high. back and in case you know that you. know all of these things come to fruition i think the markets will

need to borrow money i think that they my buy i don't know if i buy it maybe in the case of when the u.s. goes over to banks in other countries and tries to find out information on their clients but let's move on with one other example of this which i think kind of says exactly what we're saying which is in the u.k. they are having another hearing to talk about banker bonuses and we know they've already capped banker bonuses for state owned banks at two thousand pounds so here's another example where it seems like another country goes so much further than the u.s. when it comes to reining in something like banker compensation at banks where the u.s. has bailed out i mean it's a really good point we did bail out the bank sort of the same time people would absolutely screaming go crazy because that's un-american you can't put caps on how much somebody is going to make or you know what kind of bonuses they're supposed to get this is capitalism at work is that's what i'm assuming the argument here is they think that these bankers deserve these insane bonuses absolutely not but but never ever would they allow caps here i think we do think that's what it's about

that that's perceived as anti american or anti capitalist and that's why it would never fly in the u.s. despite the fact that these banks were bailed out i mean that's my guess and it's also not forget that nobody wants to piss off wall street too much there's supposedly anger at the obama administration but the biggest campaign donors speaking of campaign donors let's talk about a story that i know you're probably going to be talking about alone and so i wanted to get your take on it obama is now giving his blessing to his super pac he's signed off on his campaign to urge supporters to donate to it it's priorities usa people are freaking now because for one the president has often spoken out about this kind of money about secret billionaires that kind of thing here's an example. well this week the supreme court reversed a century of wall that i believe will open the floodgates for special interests. so that was after citizens united was passed i think that people are blowing this out of proportion i. i say don't hate the player he game on not really sure and i don't know i kind of agree with you in that sense for one thing the president not only

said that at a state of the union address a couple years ago just the other week he was also talking bad about the super pacs and saying that you know he thinks they have a negative influence on the economy and suddenly we see republicans all singing the same tune here and so it's just i mean come on that was kind of a very quick capitulation that you had there because suddenly they released the figures you realize that republicans are far and away outspending the democrats and it scared them but exactly why he wants to win more than he wants to stay on that message come on he was getting completely dumped out when i got a bill you know what do you have a you know in order to learn it's a game but i you know let's fix it there are people out there that are trying to fix it and get its of the united overturn and get down with that but i don't think you can hate people for trying to work within that system if that's what exists we have to leave it at that that we don't have right here. that's all we have time for thank you so much for watching and from everyone here capital account have a great night.

russia and bloodshed in syria will only be found of both government and opposition forces lay down their. western countries regime change rhetoric and recall the ambassadors from damascus also. because system of law and order for many many years for the seach or the mother. why do we need brussels to tell us what we can accommodate. the fury in the u.k. terror suspect spiritual leader in europe is. back on to the streets of london after the european court of human rights forbids his deportation. on the first signs of a rift between the u.s. and post mubarak egypt says washington's threats to. change its position on the. west and. back with more of those stories in

a little over half an hour from now in the meantime discover the challenges faced by the occupy movement and stay with us for expert opinion on how u.s. unemployment rates have risen sharply despite positive reports from the government all this much more for you in the show next on our team. welcome to the lone show where you get the real headlines with none of the mercy we're going to live out of washington d.c. now it's not going to speak with chris hedges about what he calls a cancer within the occupy movement he's referring to the black bloc then colonel lieutenant colonel daniel al davis is going to join us and tell us about a report he just submitted to congress that says the pentagon is intentionally misleading the public about the war in afghanistan and edward harrison will talk to us about what.