recess feet now with the palm of your. comb it's been a year since the uprisings that brought down the regime of moammar gadhafi in libya but with some of the former rebels armed to the teeth and still largely in power the country's future remains in the balance human rights groups say libyan militias are out of control and the interim government is either unable or unwilling to bring them to heel there's also evidence that the torture and abuse of gadhafi supporters amnesty international has warned that army troops pose a serious threat to democracy in libya pharaoh's manji an editor in chief of the pan african social justice network tells r.t. the situation is worse than it was during the khadafi regime. since the day to invasion of libya. as being. gross human rights it's not just torture there is. indiscriminate killings there are extra judicial killings there's summary execution leave them

coto gadhafi. members is found to have been some really executed nobody has been through to do justice or the huge amount of sort of being put in the by the europeans by the americans of. this place is going to send it to into. the bowl civil war to situation not only that sense is once that it was under the the rule of gadhafi. type police are searching for two more suspects in a failed terror plot they say targeted israeli diplomats in bangkok three iranians have already been detained over two days explosions in the thai capital tehran which is under international pressure over its nuclear program denies involvement israeli prime minister though has called iran the greatest export or of terror in the world as artie's reading the reports from tel aviv some israelis aren't convinced. like the battle drones are growing louder and louder with

israel continuing to this really harsh rhetoric towards iran accusing them essentially of terrorizing the entire world community there was a harsh statement which called to impose paralyzing sanctions on tehran all this while iran made it clear that they are indeed ready to sit down for talks to continue talks on its nuclear program but the prime minister of israel has made a statement saying that a rainin aggression should be stopped so there of course that brings forth many theories that the military confrontation with iran is imminent and nowhere are these fears more prominent than in israel according to the latest polls less than fifty percent of the israelis support the idea of going to war with iran most of them believe that israel has enough problems of its own and that you don't really need a confrontation with iran there is of course the issue of palestine which never really completely goes off the table then there is the rather strained relations with

lebanon which some fear may escalate into a renewed conflict and the latest of those concerns of course is the issue of egypt where the muslim brotherhood said they might reconsider a peace accord which they do have with israel in response to u.s. pressure in regards really enjoyed scandal so a lot of people in israel primarily are thinking that perhaps israel should stop the rhetoric it does carry on right now and focus on its internal problems and the problems on its borders rather than really push forth with aggressive rhetoric towards iran. russian special forces have killed seven suspected militants in a counter terror operation in russia's north caucasus that of the chechen republic says the leader of the gang was responsible for a number of attacks in the region the anti terror operation in the border of chechnya and dagestan has been underway since monday the visual say some thirty gunmen have been hiding in the area helicopters and artillery have been deployed to ferret them out reports say up to thirteen police officers have been killed in the

ongoing operation turning now to some other stories making headlines across the globe a suicide bomb targeting worshipers has killed twenty six people and wounded dozens in northwest pakistan the bomb went off outside a mosque in a busy market in the town of are close to the afghan border thousands of pakistani civilians have died in bombings over the last five years most of them carried out by sunni islamist militants. german president christian wolf has resigned the opposition demanded he step down over accusations he accepted illicit favors while serving as governor of lower saxony including a private home loan from a friend's wife on thursday prosecutors called for his immunity v.p. and immunity to be lifted chancellor angela merkel expressed regret at wolves resignation and says she'll seek agreement with the opposition on a new president. a major armed robberies been carried out of the asian a limpy museum in greece two thieves enter the building where they bound and gagged

a female employee before stealing up to seventy important artifacts greece's culture minister submitted his resignation after the incident friday's robberies of the second major museum in the last two months in january works by pablo picasso n.p.a. mondrian were stolen from the country's national gallery in central athens. and careen is up next with all the business news stay with us here on our. our welcome to business here in r.t. thanks for joining me european gas consumers will now get russia fuel with a ten percent discount the country's gas monopoly gas says it's agreed to a price cut but fought off calls to increase the spot price component in its contract the concession comes after a long drawn negotiations with some of the gas pumps biggest customers including france's t.v. have swears and wind gusts of germany gas promise long term supply contracts are indexed to the price of crude but its customers demand the company switch from an

oil based formula due to the influx of cheap spark gas prices. now as a warning to spur rich or to the super rich if you're planning to buy a mega yachts and russia do it now the finance ministry says it's working out a way to impose a new or actually tax next year that's after prime minister putin said he wanted to tax conspicuous consumption that's the price for not investing in the development of the country russian tycoon are well known for their love of expensive boats you do hear will also apply to things such as cars and houses however lawyer under a cold blood says such measures often have the opposite effect there are plenty of property in russia to be taxed and luxury goods the question is what is the purpose of the text because we cannot make clearly the global experience to straights whatever they introduce a tax there was no economic benefits of it but instead they might have started

flowing away from the country and probably to be bought outside of people moved outside of the country so the only purpose of the taxes i see you see is the social . if you want which is the candidate is trying to achieve through use campaign basically to calm down the differentiation between the super rich and the poor people in the country. let's take a look at the markets now currencies. first the euro is trading a bit hard to both the dollar and the ruble on hopes greece will see a long awaited bailout deal next week and the ruble is high against the u.s. currency supported by stronger crude. and friday's trading session in the black british stocks gained ground driven by banks and miners investor sentiment was lifted by upbeat retail sales data progress on pieces bailout. ended the week mixed with a miser cruisin point one percent on the whole stocks did well rising to a six month high all traded at its strongest level in six weeks let's check on the

index movers on the my six energy stocks you raised earlier games with down half a percent financials finished mixed with bag half a percent higher in waiting by the economist magazine's course it is as the world's second best stock in terms of return on investment over the past decade. the bank has struggled to reverse early losses ending flat market in stein from. the reports . you know the few factors are playing against each other one we've been getting all the positive marker data i'll be knighted states for the whole week on the other hand we did not have there is a lucian with a great story this week which markets are pretty much expected so basically you know is down near zero that is there are flood performance in the markets this week . for me in the business to get to find more stories on our website r.t. dot com thanks for watching.

well for the. science technology innovation all the is developed from around russia we've got the future covered.

up because. it's all designed to keep you close in your own world as a prison. you know you leave somebody in there for a couple hours like that in a stress positions. you have this fear of the unknown and the stress sort of building and. i've seen interrogations go on ten twelve hours they chose remember from marilyn manson and metallica slayer the two songs would be angel of

death and raining. to kill the enemy going through war coming up here into iraq i mean look into baghdad. johnny put the bodies hit the floor which is the rock n roll band it was fitting for the job we were doing a. wealthy british style holds a. lot of. markets why not. find out what's really happening to the global economy cause a report. if

. nine thirty pm in moscow these here are the headlines the u.n. piles pressure on the syrian regime to step down as the general assembly adopts a non-binding resolution russia says the draft fails to address the armed opposition. greece's next bellowed could be creeping closer despite the e.u.'s ever mounting demands but some countries who kept their national currencies are proving to be better off. and libya marks a year since the revolt that eventually brought down colonel gadhafi but rival

minute militias still run unchecked in the interim leadership is accused of having no real power. up next to look from washington d.c. for some economic perspective with lauren lyster and capital account stay with us. 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 out seeing 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 too big to fail banks become a little too much like this. what do you do some 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 and credit default swap markets we we thought everyone was perfectly hedged 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 blodgett 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 in 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 a very good entry so that doesn't really reassure me let's talk about what 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 downgraded them and what on earth took something so long and again bank thanks of essentially been deteriorating for four or five years here the problem is very simple american consumers borrow 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 see 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 it's 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 say 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 it 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 has 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 entrepreneurs 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 have had an incredibly strong middle class where people have a lot of disposable income to buy products that is why the economy has 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 now 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 bits 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've 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 thought they could afford his cars and we're 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 are all well 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 for selves you step back what you see is that wages as a share of the economy 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 mention 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 the fifty's and sixty's with higher taxes in 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 ahead m.f. global remember the firm the declared bankruptcy last fall well we'll let you know

what's going on with all that customer money and why did john edwards i isn't in jail should he be the first your closing market numbers.

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 junk or assign in jail exactly let's back up to brief you remember f. global is the firm that declare bankruptcy last fall as usual the problem was leverage and debt huge positions on european sovereign bonds pushed him over the cliff the 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 junk

or design 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 noble informed that the see if you see an c.m.e. going to be the same time that the shortfall was real and their customer share group funds 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 girls to lend to 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.