he's a brutal dictator reste killing his own people this is the same narrative we heard about gadhafi the media is right there to echo whatever spin is presented by those in power well how disgusted are you. disgusted richard they had then a fight with people in power they echo what those people say secondly they don't look too closely at the facts and information war kick started as russia and china refuse to stand behind america's position many of chanting russia is killing our children after a veto of the russians and the chinese stand in the way of the un but it was vetoed by russia and china secretary of state clinton reacted differently the russian and chinese veto over him change resolution reacted to with confrontation by politicians clinton suggested russia and china will eventually have to answer to the syrian people working along their pain and news headlines attacking the two countries without detail or context so they present a serious newspaper don't get it it was please not my own my answer to your

question don't be ridiculous the media not showing the will to explain what led to the veto it's a crack in the wall of wives basically were ripping the tissue of lies is being presented by the media here if you look. closely or even at all at what russia was saying that there was violence taking place on both sides you don't understand what was happening was there was an armed insurgency backed by people from the outside but this is an inconvenient truth the media have long dubbed the armed groups a popular democratic uprising and oppressors and the oppressed desperate new please come out of the country and growing cause for the world to stop the killing with all the yelling and screaming there is no time to think about who the opposition might really be and what a toppled regime could lead to it's not enough to just say assad rebels good who are these people it's always possible to replace a be mediocre or a terrible regime with something that's worse journalist matt lee has been covering

the you went for years and knows all too well how the media likes to approach what happens i cover the security council closely enough that i'll say like this sort of the the common sense the knee jerk answered almost everything that happens that russia and china are wrong in the west is right if you're going to cover the security council you might as well actually like try to cover what actually happens rather than if you come in to each day just knowing in advance you know who's good who's bad and what's going to happen i think that you can miss a lot especially when the coverage narrative varies depending on where on the map the conflict stems from the statement that you hear that any leader who kills his own people has lost all legitimacy if that really were the standard i think of you know a not insubstantial percentage of the world's leaders would have lost their legitimacy as the mainstream media sticks with journalism by press release americans who don't dig deeper themselves and up getting just one side of the story with some facts amplified and others unexplained are simply left out the media has gone from informing to misinforming the people and. r.t.

new york. to talk more about media coverage of the crisis in syria i'm joined by russ baker investigative journalist for who lot why dot com and author of the book family secrets there it is on your screen. welcome russ so would you call us media coverage of what's going on there in syria by us. i'd call it a travesty it's even worse i think than the coverage of libya if that's possible and why do you say that well you know who what why dot com we've been studying these things very very closely and we find a complete absence of journalistic due diligence essentially just to give you an example i'm looking at a piece from the new york times from today and they quote extensively from an opposition group talking about how many people have been killed atrocities

a military massacre of fifteen detainees cetera et cetera et cetera and then at the end it says these accounts could not be independently verified and that you have to ask the question well what is that worth certainly if the syrian government makes a claim i think those are treated with a real skepticism and really it all ought to be treated with skepticism also i would apply a bit of logic to it and ask why the syrian government would be doing the kinds of things are saying they're doing which really only serve to alienate the people on a large scale that's that's what they said about gadhafi you'll remember where they claimed that he was giving his troops fayyad right encouraging them to commit mass rape media put that out and of course that you're not to be completely untrue and reza i do want to point out right now we have a new development there that resolution condemning syria was just passed this was expected. that pretty much everyone was on board with this really the only

opponents were it were china and russia i want to ask you how you would contrast how the west how and why the west condemns the syrian regime but kind of turns a blind eye to bahrain and saudi arabia what is behind that. oh well i mean i think that's geopolitics a think all those countries do that russia does china does the united states france britain they all do that i mean it's very important to remember that governments make decisions based on so-called national interest often it's not even that at all it's the influence of powerful corporate interests that fund the campaign so we could keep pulling the camera further and further back to try to see what's really going on in this little tiny stage play we're being presented but the reality is that that it's not about atrocities atrocities has never been the standard it's about the fact that bosher assad represents a particular faction you might say in the arab world that the west would like to

see depart but rest it is we should point out you know there as the death toll rises in syria and reports of these violent atrocities continue to come out that they're being committed there is it getting harder to justify letting a guy. well you see again the problem is that we don't know who's committing these things because they're you know by now if in fact it was the military committing a large scale atrocities it shouldn't be that hard to establish a lot of what we're talking about involves say for example sniper fire from buildings where we don't know who's doing the shooting i think to some extent this reminds me of what i saw in romania in one nine hundred eighty nine when i covered the overthrow there of the dictator ceausescu where there was tremendous chaos and there were all these different factions professional snipers firing on civilians but not all necessarily from ceausescu's very very hard to figure out who was

behind that and i think my my point here is that we've got to be deeply deeply wary even those numbers we're being told even the numbers that a ban ki moon asserts he says that one of his people gives him those numbers well where does she get them whenever i've looked at those things and try to really understand it turned out that they came from very very questionable sources originally and out sometimes there are two sides to a story why do you think why why is it that the media doesn't really dig deeper into reporting the full picture of what is going on there and that some of these details are being left out. again i think it's a matter of self-interest and you know in general i mean the reason i started who what why is because i just didn't feel that the media in the united states were really very good that they people were taking the kind of risks and showing the kind of courage and independence that needs to be shown in these situations but the reality is that atrocities are horrible the reality is that people everywhere ought

to have democracy. i'm the biggest advocate of the syrian people having whatever kind of government they want to have the concern here is are we getting accurate information or is this whole thing being played i mean assad and his government have been there for a long time they've been brutal for a long time as you mentioned the saudis the bahraini xin other governments have been brutal for a long time china certainly commits atrocities on a daily basis in tibet and we don't see the west doing anything about that so i really do think there's a double standard and that's the way the press ought to play it and quickly last i just want to ask you how this kind of coverage in the u.s. media is affecting public perception of what is going on and syria well you know ordinary people were very busy we don't have time we don't have the historical background the perspective to understand what all of these things mean to understand that syria is run by a minority. shiite faction in

a predominately sunni country that they're aligned with iran against saudi arabia that saudi arabia faces its own poorly covered revolt by in a shiite oil raising region these are the big questions and these are really the things that the public doesn't hear about and they need to hear about it because otherwise what we're experiencing is a tremendous kind of mass migration from one viewpoint to another purely based on these very deliberate and calculated propaganda campaign thanks for coming on the show that was a vast baker founder and editor and chief of the who what why dot com. well capital account is up next on our t.v. let's check in with lauren lister to see what's on the agenda today lauren hey liz how's it going today we have some exciting guest lined up we have henry blodget c.e.o. and editor of business insider to tell us why he has a message for some multinational corporations he's writing about today starbucks

wal-mart some others we're also going to talk fraud a derivative a derivatives trader the manager has been an industry forever is going to tell us why he believes it's alive and well witness m.f. global just the same as it was in two thousand and eight all right laurin that's coming up next again i just want to update we will have an update at five on the vote that was just passed at the u.n. general assembly will see you at five.

news today violence is once again. these are the images the world has been seeing from the streets of canada. joint operation to rule the day. to emulate. the air.

but. it. was. good afternoon and welcome to capital account i'm lauren lyster here in washington d.c. here are your headlines from february sixteenth two thousand and twelve bank of america citi group goldman sachs j.p. morgan morgan stanley the list goes on they could all see their credit ratings cut moody's has said it could cut seventeen global firms due to funding issues of regulatory burdens and a more difficult operating environment not to mention one hundred fourteen european financial institutions speaking more down the street with traders is reportedly a greek default is on everyone's mind in part because of the bigger fear surrounding credit default swaps so what is this risk really and wal-mart

mcdonald's starbucks how do you feel about paying your employees so little that most of them are poor henry blodget c.e.o. and editor of business insider is asking this question in a post today so is this what's wrong with capitalism in america the reason for the shrinking middle class the so-called economic recovery that has been pretty abysmal and is the whole rich job creator thing fact fiction are held up by fraud and the wrong type of regulations we're going to ask mr blodgett himself and speaking of fraud have too big to fail banks become a little too much like this. what do you do i mean construction. if we wanted something we just took it and you didn't even think about it. the mafia are the biggest most connected firms getting away with criminal fraud that is not being investigated with the rez not being made because the mob is running

things for themselves we'll look at m.f. global and some of the too big to fail we'll look back at mortgage derivatives we'll speak to someone from the derivatives industry who has seen it all firsthand and makes the case let's get today's capital again. so moody's the ratings agency has warned it's considering downgrading the investment banking world's biggest players us includes bank of america goldman sachs j.p. morgan morgan stanley the list goes on i like the way the wall street journal put it they said moody's is worried about everything in investment banking and speaking of worries art cashin of u.b.s. in his note this morning says traders are worried about a greek default but they're really worried about what happens in credit default

swap markets we we thought everyone was perfectly hedge so what kind of risk is really lurking in the u.s. banking system and what could it do to an economy that sputtering along here in the u.s. as for why we're buttering along henry blodget c.e.o. and editor of business insider has a message to send big multinational corporations today to make his point he writes dear wal-mart mcdonald's starbucks how do you feel about paying your employees so little that most of them are poor how did we get here from the days when henry ford decided to pay his workers well enough that they could afford to buy his cars and once a solution henry blodget is here he's also author of the wall street defense manual a consumer's guide to intelligent investing he's going to break all of this down for us and first of all thanks so much for being here welcome to capital account thank you for having me i'm so glad to finally be here so let's start with this note which you guys put on business insider art cashin says he's worried about

a greek default yes traders are worried but what they're really worried about is what happens in the c.d.s. markets no one knows how big it is who the counter parties are worst of all whether the c.d.s. contracts will actually trigger and what many would consider a default but i've also seen reports in the fast that in the past that we know what the nominal outstanding exposure of greek c.d.s. is so what's the deal here is this a big threat or is this not a threat. well this is the problem is that nobody knows and we go back to the financial crisis two thousand and eight two thousand and nine one of the biggest and clearest lessons was you have all these incredibly explosive derivatives that the banks aren't even even required to disclose that can destroy the capitalist system and yet here we are two years later and it's the same thing all over again and so the answer no matter what anybody tells you is nobody knows because again credit default swaps are insurance there is a belief that if somehow greece defaults voluntarily that that will not trigger

a default i think a lot of people would disagree with that and the fact is that nobody knows how much their exposure there is so really your guess is as good as mine which is that my guess is probably not very good and right so that doesn't really reassure me let's talk about it you're no better off than yeah yeah which i guess is the issue and as far as the possible downgrades of all of these investment banks up to three notches according to moody's they're warning why is moody's downgrading these banks possibly if all of these banks are in such great shape as we've heard them claim in the past. why are they downgrade them and what on earth took something so long and again they have essentially been deteriorating for four or five years here the problem is very simple american consumers borrowed debt up to their ears we are just starting to reduce that level of debt the banks have a huge amount of toxic assets still on their balance sheets they will say that everything is just fine but it clearly is not they just don't have to market to

market anymore so we can pretend that everything is totally fine so the big question for moody's is where have you been for a couple of years well this has been developing but if you look at banks again consumer debt in the us is very high consumers will have to reduce that debt that will reduce spending the banks have to work it off so it's no surprise and perfectly intelligent of moody's to say look it may be a rough decade for banks and so the downgrade seemed very warranted and the question of where have the ratings agencies been is certainly not a new one but i think the issue which you're getting out which is debt doesn't this all tie into this that a bank is inherently leverage that the assets on their books are other people's liabilities and if the economy takes a dive so do banks assets so can't we just say that no one really knows what shape the banks are and and that the biggest threat is a deflating economy and maybe this is why we have zero percent interest rates. i don't know that this is the reason we have zero percent interest rates is to bail out the banks that's it it is allow the banks to recapitalize slowly they can

borrow money for free and they can lend it back to the government at three percent the easiest three percent spread in the world you lever that up many times and you can see why bankers took home huge bonuses a couple of years ago when everything was cranking now though the spreads are coming together so it's a little bit harder to make money or banks in terrible shape they're not in terrible shape because they have been given so much free money to bail them out so the question is just what can they earn over the next few years and i think that's probably what moody's looking at and saying look it's just not going to be a great period for banks and the banks are on life support and when we talk about the economy and when your recent posts you make this argument that rich people don't create jobs and you point out what creates jobs is a healthy economic ecosystem and we need consumers to do that but one of my questions for you is that the problem with our ecosystem is that it isn't healthy and one of the reasons for that is that we have a corrupt banking system that extracts wealth and debt of creating growth.

corruption is a very strong word and a lot of people say that they want to say why aren't bankers in jail all these laws were broken the fact is lots of very intelligent aggressive prosecutors were looking at laws that would have been very popular to charge a lot of bankers with crimes and everything else they couldn't find anything to charge anybody with and i don't actually believe that that's because the prosecutors are wimps or the system is so corrupt that everybody's been bought off i think the problem is that our laws allowed everything almost everything that happened in two thousand and eight two thousand and nine so i don't think it's a corrupt banking system the point that i'm making on in terms of rich people not creating jobs is there's a huge celebration of business people and on her nerves in this country especially with the republican party saying look we have to cut taxes more because we've got to and sent our job creators to go out and create jobs and the fact is that sure entrepreneurs and investors play

a role in the job creation process they are essentially the seed that they're planning the seed that starts a company but a company will not survive without healthy customers and in this country for fifty to one hundred years we haven't had an incredibly strong middle class where people have a lot of disposable income to buy products that is why the economy's been so strong now our middle class is in trouble it's disappearing and all the jobs are becoming wal-mart jobs so the customers for all the businesses that the really rich people want to create are getting weaker and weaker and that is just simply not a sustainable system and so what creates the jobs it's the healthy economic ecosystem it's not one rich person with money to invest right but when you talk about that healthy economic ecosystem you talk about the producers you talk about the workers now we also need a healthy banking system. we need a healthy banking system but it's not a radical change the big problem with our banking system was that we helped our banks we encourage them to borrow and gamble and there were massive bonuses and

profits associated with that then when people made stupid bets and they made bets on wall street we said who you know you can't pay the price for that the whole system would crater if we didn't come in and rescue you so it's the moral hazard associated with that that he's just basically destroyed the whole idea of capitalism which is you take risk you get rewarded if you do well the banks blew it and yet they were bailed out and so that's the fundamental problem we definitely need banks and i think if you go back to a lot of arguments about what should have been done in the financial crisis in my opinion the banks should have been seized they should have been restructured and then they should have been refloated where the shareholders would have lost everything but the banks themselves would have stayed together and it would've been fine we do need that system but the banks are healthy enough to lend now the problem is that businesses don't want to borrow any money because consumers are so tight with all the debt that they've got that they can't spend money on products

and when you talk about the wages that they're paid at starbucks that wal-mart those sorts of places then you argue you know hey raise your wages a little bit you can afford to how do we even get here from the time when you know even you were writing about when henry ford paid his workers more so they could afford his cars and where in business schools c.e.o.'s weren't just taught to prioritize the bottom line to shareholders above all else they were taught that you're supposed to pay fair wages and have social responsibility. it's a very good question and it's in part the fact that the idea that the business should concentrate on more things other than the bottom line the fact that that sounds so insane to people and rages so many people just shows you how far the pendulum has swung and the point that i'm making again is that people say the reason the middle class in trouble is that american manufacturing jobs have gone overseas it's true we've lost those jobs but it's not that they're manufacturing jobs it's that they paid well and now we have low wage service jobs and people go

well if it's just that they're low skilled if those people want to make more they go get more skills that's just not true the reason that service jobs are low paid is because companies are saying we're going to pay our workers as little as we can and we're going to keep as much profit as we can verse elves you step back what you see is that wages is a share of the economy and are an all time low corporate profits are near an all time high and you look at that say why is that it's because companies are paying their employees a little so my point is wal-mart you made twenty six billion dollars last year of operating profit spread the wealth a little bit yeah yeah absolutely before we go broke quickly you mentioned taxes as one of the romneys for inequality you mention the low taxes they can come up a little bit but it was for example to take that that these and sixty's with higher taxes and a bigger government responsible for a more equal society or was it because business is paid their workers more as we're talking about. well i think a combination of both i think there's no question that taxes can come up a little bit on the highest earners and again you even breathe that in certain

circles and people attack you as being a socialist and communist it's just crazy how polarized things have gotten so taxes can come up a little bit but also exactly as you say we had many many more good middle class jobs at that point and that creates huge purchasing power in the economy and in talking about the things that i talked about the post today it's emphasizing that it is that we cannot have a system that gets more and more unequal it just simply will not work we've got to rebuild the middle or the whole thing is going to crater and that's in nobody's interest obviously and with that dire projects and i really appreciate you being on the show thanks so much that was henry blodget he's c.e.o. and editor of business insider. and still at m.f. global remember the firm that declared bankruptcy last fall well we'll let you know what's going on with all that customer money and why john corps zines isn't in jail should he be the first your closing market numbers.

you just put a picture of me when i was like nine years old and just you know look true. i may confess and i am a total get over friends that i love driving hip hop music and for. that he was kind of the jester. i'm very proud of the world without you it's a place. oh. you know sometimes you see a story and it seems so you think you understand it and then you glimpse something

else you hear see some other part of it and realize that everything you thought you knew you don't know i'm charged welcomes a big picture of. what drives the world the fear mongering used by politicians who makes decisions to break through it's already been made who can you trust no one who is you know maybe you with a global missionary see where we had a state controlled capitalism is called. sessions when nobody dares to ask we do our t.v. question more.

so m.f. global what's going on there remember we were talking a lot about them when they were always on the hill the executives but what's happening this is of course the issue of what's going on with customer money and the future of commodities trading and regulation and why isn't john corazon in jail exactly let's back up to brief you remember n.f. lobel is the firm that declare bankruptcy last fall as usual the problem with leverage and debt huge positions on european sovereign bonds pushed him over the cliff this c.e.o. was junk or resign former c.e.o. of goldman sachs former u.s. senator also governor of new jersey in the past customer money went missing ok to the tune of one point six billion dollars according to the bankruptcy trustee john core zein and other executives testified before congress saying they didn't know where the customer money was then we heard this from a regulator. at about two am monday morning october thirty first and then i will

inform the c.f. you see and see in me that approximate the same time that the shortfall was real and that customer share good ones have been transferred out of segregation to the firms that broker dealer accounts there you have it now these customers range from farmers to hedge funds to famous trends forecasters like gerald celente a guest of our show now some reports say the money has vanished is still being searched for there's customer money trapped overseas that they're dealing with and because of the way the bankruptcy has been treated the customers are at the end of the line to get the money back meaning m.f. global's creditors namely j.p. morgan got their money first so what is the deal j.p. morgan gets its money some poor farmer gets screwed and john course what happens to him he gets off scot free what is this exactly. what do you do some construction.