either it's an investor entrepreneur who is just like hey this isn't fair that the banks got bailed out there shouldn't be socialize risk then you know them then benefiting though from the profits but does bad refutation have any impact on the actual banks certainly as a huge impact they could lose deposits they could lose business remember these are all international institutions who are asked to do and try to do business all over the world when you have a choice and you do because there are a lot of big banks the one with the worst reputation has a tendency to lose you see people move their money elsewhere you see people move their trading elsewhere you see companies use other folks for stock underwriting so where the rubber meets the road it cannot help your basic business to be seen in such low esteem and it will hit you across the board from your supplier relationships with other businesses to your relationships with intended or hoped customers and loss of relationship with existing customers and then now we know that the banks to in the us have a lot of risk ok we just come out and say basically we could cut all of investment banking i spoke to some people that said where his mood has been for the last

several years this is not new news coming out today though the bank of america will consider selling its retail branch network in texas it's us trust you know if it was forced to raise capital i just said in my lead up a couple other banks said hey we're going to change accounting so we're not going to mark to market we're going to do it a different way where we don't have to realize the actual value are all of these sending up red flags to you about the risk in the banking system. absolutely what we know full well that there's a wide or two notch downgrade quite likely coming for the ratings agencies on the big american financial institutions led by the full service banks that have investment banking and broker dealer operations as well as retail banking and least many of them we know that if your rating is caught you actually it costs more for you to borrow money and you have to post more cash as collateral against your activities one thing you can do therefore is change your accounting to make it look like you have more cash or sell some of your units to actually raise more cash and

lower your risk and i think we're seeing different banks play to different concerns that they might have whether that's bank of america or morgan stanley or the other big names and there's a generalized fear that the regulatory environment is going to be hard for banks going forward that they're not going to return to the profitability of two thousand and six two thousand and seven and that they may be downgrading downgraded in the not too distant future i mean they need to have more cash on hand they need to be even more careful and they need to play with the rules a little more to free up what cash is left and in some cases that takes a form of the mark to market provision in terms of their asset account there and when you talk about playing with the rules one thing i thought was interesting with with the news about morgan stanley and goldman is that they're marking to market to get away from capital requirements that are going to come down by accounting that way if they do it the with the other accounting method they don't have to hold more capital is this an example of regulation backfiring and actually creating more risk or hiding risk because banks just get around it. yeah i mean part of what you see

here is if the regulators really push banks who haven't fully healed from the zero eight zero nine scenarios and the losses particular loss of confidence which you spoke to in the sort of confidence quotient there or the prestige factor that these banks are going to look to find ways to use the capital they have more aggressively to make more money and also to use the capital they have more loosely from an accounting perspective to appear more well off of lies than they might be under a different accounting standard because they're under public opinion pressure they're under regulator pressure and probably most importantly they're under profit pressure because the economic environment today is a shadow of its former self if we look at the first few years of the twenty first century so is there a ticking time bomb on wall street that we're maybe not going to see because of all the things you just talked about i'm not sure if we have a ticking time bomb on wall street but we've definitely a situation here where people are kind of yet to fully factor that american financial institutions are going to make less money they're going to be pushed to

take less risk which means less profit they're going to have less employment they certainly have less clout and they probably going to have less political power than they've had for most of the last thirty years and that's a struggle and they'll push back against it but the looks fairly clear here and fighting the changing tide is generally speaking is not a very successful undertaking some people might be carrying now before we go you mentioned other threats europe japan oil shocks that combined with what we're talking about with the u.s. banking sector which we know is huge what are we looking at economically for the rest of two thousand and twelve and is this what the s. and p. do and if it doesn't look good. yeah i mean s. and p. is also trying to kind of rebuild its own reputation that was shattered by its constant habit of closing the barn door after the horses got out so they want to be ahead as opposed to behind the way they were with the housing crisis the way they were with the financial crisis the way they were with the european sovereign debt crisis now they're trying to be proactive of course when they are proactive they do tend to make the economy worse i think we're seeing asset markets which are

notoriously bad at charting a middle course oscillate between a really pure form of fear and a fairly pure form of greed while i'm happy to see relatively better economic numbers coming in over the last few months and that is good news i would i would caution folks it looks like people got a little ahead of themselves what they think is happening here the united states is now forecasting relatively high economic growth at least in the private sector on high profits with no wage growth with a persistent over eight percent unemployment and with the other really big problem that we're apparently planning to do really well over the next few years through exports and nobody to mention that twenty percent of all our exports go to the european union which is in the worst recession it's been in years and then another ten percent of our exports go to japan which is also in one of the lower growth periods it's been during its twenty year economic downturn so it's not exactly clear to me what areas of strength we plan to export ourselves into and we still have consumers burdened with a housing crisis with stagnant wages now for five years and i think we've kind of

overlooked some of the risks to feel good about the future which has a value but we're nearing the point where we've overdone that to a point that makes me at least as an economist somewhat nervous great point max really great to have you on the show to break this all down thanks for being on capital account your first time as max rod wealthy is chief economist and senior analyst at green press capital. thank. our it's friday it's time for some viewer feedback now we have a lot of free market capitalism discussions on this show and in response to one i thought that this was a great comment w. dead them brought it up a great point for discussion and debate said there will never be a free market it's

a utopian dream just like there will never be pure communism in which everyone is equal the rich and powerful always find a way to exploit the situation to their benefit the reality is that you are not even starting from a clean slate you believe that if the government disappear that existing power relations will magically come undone that is a really excellent point i'm going to bring that up to my next guest like a jeffrey tucker to ask about that and speaking of one viewer responded to that saying as tucker puts it we're living in a very distorted world right now or is the profit leonard cohen saying almost two decades ago things are going to slide slide in all directions won't be nothing you can measure anymore now i got a song for you since you brought up singing from jeffrey tucker himself take a listen to. the it's funny one of them i mean like these make. those rumors whole.

go. no money printing song to end on on this friday that was at a debate between jeffrey tucker and dean baker another one of our guests about the bed they were both on our show that week and we talked about the debate and so someone asked us where can we see the debate between tucker and baker now we were there we filmed it we played some sound bites but seeing as there is an appetite for more we're going to put together about fifteen minutes best from the debate will put it on our you tube channel next week so look for it hopefully monday you can go to youtube dot com slash capital account if you don't know but you should know because you should be a subscriber because the best way to stay in the loop of capital account ok this comment made me want to address an issue that often comes up they said lauren was in a hurry to interrupt the guy when he started speaking positively about nuclear energy so this was an interview i did with the rockwell and people often think oh you cut someone off because of some nefarious reason we're really guys i just have to break down that i have a hard break that i have to go do i have to go to break or the end of the show or

the next segment there is literally nothing i can do yes sometimes it's awkward off and i wish i could just go on and blow through it but it's just not how it works either i cut him off or shannon pulls the plug and i don't think you want that now we had european member of parliament nigel for raj this week talking about the risk of revolution and political assassinations in greece with the debt crisis of course raj is known to be outspoken but what i liked was that our viewer stephen guilfoyle an economist and trader and one of our favorite tweeters tweeted back he said for raj says it but who hasn't thought it could happen like that and i think that's really interesting to just show how widespread these beliefs are even though maybe you know you only hear someone that's very outspoken say them on t v that is all we have time for but i also appreciate all of your nice remarks which i didn't get to read a couple that lucky for me we have your feedback again next week but just know that i appreciate all of them but for now that's all we have time for thanks so much for watching the show feel free to follow me at on twitter at more in this or give us.

baggett youtube dot com slash capital account also come back on monday everybody like the boob indicator more going to have the inventor of the boob indicator on the show on monday is a blogger reform broker but for now if i'm ever in your capital account thanks for watching and have a great weekend. top

stories this hour pressure grows on the regime in syria but there are fears that if damascus falls the nation's key ally iran could be left stranded propelled into action. not to vote on whether russian language spoken by a third of its population should an official status of russian speakers say they are being discriminated against in the baltic states. and the idea of euro unity hold strong despite the region's crumbling finances as some schools are accused of brainwashing people into believing the project is in front of. the back with more news stories in half an hour from now in the meantime the show tackles the latest

us that's next on r.t. . welcome to the ilona show we look at the real headlines with none of the mercy come alive out of washington d.c. now it's time to speak to jeremy scahill about his new piece on yemen and how our counterterrorism policies have backfired then jason leopold joins us to tell us why he's suing the f.b.i. the cia

a number of other government agencies all for failing to follow the rules when it comes to foil requests and do we get the feeling the ads are following you wherever you go and we're going to spectate speak to trevor tim about the trail that companies and websites are collecting on you have all that and more feature night including a dose of happy hour but first take a look at the mainstream media has decided to miss. all right so it's friday the week isn't quite over yet there's still a lot of news happening in the world today but the mainstream media is basically checked out and they are going full force on what tomorrow will bring. police in new jersey are preparing to shut down streets of new work ahead of tomorrow's private funeral for whitney houston the parking lot behind me is the one where it is believed that these celebrities and all the invitees some fifteen hundred people it's one of the parking lots they'll be using among those preparing to pay respects to whitney houston denzel washington mel gibson jamie foxx and janet jackson to

name a few also we just found out the darling who is whitney's godmother will be performing but now they're talking about maybe the drugs affected the organs and there was failure over time we don't know yet this morning we're also getting a clearer view of some photographs never seen before of whitney as a young woman you know the first thirty six hours were very respectful of whitney you so much for a special thing to do would be to stay home and watch the service on television it is going to be aired over all the network channels and that would be the best best place to see it. are let me just make one thing clear here i am and always have been a huge whitney houston fan not kidding i listen to the bodyguard soundtrack on repeat nonstop when i was a little girl so the news of her passing saddened me and i think that she deserved to be commemorated celebrated as a groundbreaking female artist with an unmistakable voice that makes everybody get the chills just listening to it but having said all that i'm also going to go ahead

and say what i think needs to be said what i'm sure many others out there are thinking of the coverage coming from the mainstream media is a little bit overboard i mean we have entire channels dedicated to entertainment news but what happens when every supposedly real news channel just whiffs which is entirely to entertainment coverage well let's see they stop talking about the economy over fifteen percent real unemployment they stop talking about our war in afghanistan in which men and women are still losing their lives on a daily basis they stop talking about our civil liberties being a road it thanks a lot makers they have taken advantage of fear the word terrorism stop talking about the civilian deaths the perceptions of the u.s. abroad. due to our policies i guess you could say or hey let me know they don't really cover those things on a regular basis either even when there isn't a celebrity story to cover and ok you have a point right maybe saying if they stop isn't the right word to use maybe it's more like continue to find an excuse to ignore this story or that but it's worth

pointing out right so let me just give you one more story that i think deserves some attention but hasn't and will not get it citigroup has agreed to pay one hundred and fifty eight million dollars in a settlement over bad loans the bank passed on to the federal housing administration to insure now we know all about this thanks to a whistle blower now that rare breed write the off that is forced to sacrifice their career risk attack on their character the destruction of their personal life to point out wrongdoing the kind of person that should be held up and shown support but which this administration instead has seemed to wage a massive war against something the mainstream media also doesn't cover but here we have a case that was actually a success for the whistleblower in the sense that it led to citi group having to pay a fine once again just like with the massive fraud foreclosure settlement that was just reached between forty nine states and the five biggest banks settlement itself pretty much a slap on the wrist let's not forget that this is the same citi group the received forty five billion dollars in bailout money and yet for knowingly passing on bad

loans the f.h.a. actually encouraging their employees to do so causing millions of dollars in losses and taxpayers insurance claims and profiting off of it all they have to pay one hundred fifty eight million dollars in a fine let me just remind you that just in the fourth quarter of two thousand and eleven citigroup's net income totaled one point two billion dollars that is just in the fourth quarter and those are considered to be dismal earnings so now let's go through a couple more details of what exactly this lawsuit exposed at that citi group was up to pro publica is it a nice job of pointing out the juiciest bits for us today the quality control unit in charge of reviewing the mortgages the bad ones that they were selling they have . marching orders to pass questionable loans by brute force how the company even started basing compensation for some employees on how many loans got through quality control and those who pushed through the bad loans were rewarded and at the awards ceremony those that actually do the quality control work were humiliated according to this whistleblower how to top it all off at one point citi erased the

records of nearly one thousand potentially fraudulent loans and for all of this they don't get any criminal charges they just have to pay a fee so if this is the way the justice is done and the system is never going to change once again the mainstream media didn't even touch this settlement they've got bigger things going on that informing the public of massive fraud on the part of the biggest banks in the country there's a celebrity death they go all out and all other news they choose to miss. well two months after nato strikes killed twenty four pakistani soldiers after an official pentagon investigation reports say that the obama administration is actively considering issuing an apology or at least an expression of contrition it would be a rare move and it makes us think of the many civilian casualties of u.s. drone strikes for which there are no apologies let alone figures released considering that the cia doesn't publicly discuss its program but the civilian toll

is not only felt in pakistan but other countries are relayed shadow wars as well so today let's talk about yemen and a new piece for the nation magazine jeremy scahill takes a look at internal conflict in yemen and how u.s. counterterrorism policy has not only been taken advantage of as a cash cow for the saudi regime but how it's also strengthening the very threat that it seeks to eliminate al qaeda in the arabian peninsula so joining me to discuss is jeremy scahill national security correspondent for the nation magazine jeremy thanks so much for joining us tonight and i guess i'm just going to start with the way that you start off your piece you start by focusing on an area called zinjibar and you say that really the yemeni forces attempts to take it back was a turning point a very incredible important test for regimes that tell us why is it that holds so much significance well let's remember that president obama began bombing yemen less than a year into his presidency the first u.s.

airstrike authorized by obama was in december of two thousand and nine and it was not a drone strike actually it was it was a cruise missile strike launched from the ocean and it slammed into a very poor remote bedwyn village and it was allegedly aimed at al qaeda members but in reality the people that were killed were forty more than forty who are by the winds that lived in this very remote area and in fact this was this episode. became somewhat infamous around the world because in the wiki leaks cables it was revealed that general david petraeus who at the time was the centcom commander actually went to yemen and met with president ali abdullah saleh after this missile strike and the two of them conspired to cover it up in fact salis said will continue to say that the bombs are ours and not yours and so what with that kicked off a string of air strikes that president obama authorized some of which hit the intended targets and others hitting civilians or killing important tribal leaders or

opponents of solids regime so i put all of that out there in response to your question because you have to understand the context of what we're going to talk about when we talk about what's going on in zinjibar in the south of yemen right now is three years of sustained airstrikes where a lot of civilians have been killed and even in cases where the so-called right person has been killed yemenis don't like the fact that the u.s. is bombing their country and so in may of last year a group calling itself. the supporters of sharia law essentially marched into town in zinjibar which is the capital of abi on province and they chased away the local authorities and they declared themselves the rulers of this town and they did it in a number of areas and when when the u.s. funded units who were responsible for fighting counterterrorism were confronted with this group coming in they simply fled and they left behind their weapons that the u.s. had provided them and then when the yemeni military not trained by the united

states not supported by the solid family was tasked with trying to clear the city these militants for months are all shari'a took the u.s. weapons and started to shell the yemeni national forces and some analysts that i spoke to in yemen believe that the saleh regime allowed these guys to come in and take the city to sort of send a message to the united states that if you allow me to leave or if you push for my departure and i'm talking to you from new york right now and i'll have. well it's always in new york at the ritz carlton hotel he was trying to basically say the united states i'm the only guy who can fight terror in yemen and it's without me this is what's going to happen across the country the problem is for that from a u.s. perspective this is really blowback whether or not follow allowed it to happen whether or not under all shari'a is actually just a crude sort of front for al qaeda in the arabian peninsula has become irrelevant because the political ideas of entourage shari'a very conservative islamic ideas

shari'a law imposed with with violence on a population has brought law and order and has gained support of tribal leaders who are quite simply fed up with u.s. airstrikes in the u.s. support for the the sollie club poxy and all the brutality that comes with a break in here for a second to right because you're talking about sol a who wants to send a message to the obama administration to us that we can't do this without him but do you also think that those u.s. trained forces are taking advantage of the u.s. means only come from higher up or is also work on a lower level that they were right about this in your piece that this is perhaps a cash cow that they're exploiting this and letting the situation get worse on purpose. right i mean well let's let's remember too that it was under president bush's. you know time in power that the united states began funding arming and training these so-called counterterrorism units that are run by salis son lee who's the head of the republican guard and then yeah who's the head of the

counterterrorism unit the idea behind it was at these forces were going to fight al qaida and they were going to work with the united states and that's where they were going to be given all this funding and all this weaponry and all of this training many people in yemen say they've never actually fought any terrorists that what they had their entire purpose is to defend the regime and so yeah i think that you know it's to their benefit to have the perception that there's this huge problem with terrorism and terrorists in yemen but i also think that it's i think you're right in what you're saying but i also think that they they kind of played the united states and they played the terrorism card you know there's been more you know prison breaks in yemen then there were you know then that crew from that fox news show prison break broke out of prison i mean michael scofield the big character of that show must be working for al qaeda because they're breaking out of prison like every week and lo and behold they break out of prison as soon as the yemeni government wants more counterterrorism funding so you know this is a very complicated game and i think that you know american officials are quite

arrogant when they meet with the leaders of very poor countries and i think they always thought they were smarter than sully and he's a better chess player than john brennan and the other american officials he deals with well what do you think at the end of the day right because a lot of this has to do and ends up being a vicious circle right they don't like the fact that i don't blame them rightly so that u.s. airstrikes are killing civilians and wreaking havoc right in yemen on local populations at the same time they see sollie allowing this to happen backing it and so they end up going elsewhere for now i think going to the al qaeda in the arabian peninsula but do you think that if the u.s. had no presence there at all clearly better off. well that's certainly what a lot of yemenis told me including yemenis that are very pro-american and they the they say that if the u.s. had just left us alone we probably have less terrorism in yemen than we do today i mean i certainly think that while the united states or the obama administration may be very proud of the fact that for instance they killed anwar a lot t.

who's of course a u.s. citizen and samir khan who was killed along with him was also a u.s. citizen let's remember that two weeks later they the u.s. military and cia forces killed sixteen year old of the raaf mana locky who was unaware a lot he's sixteen year old son also a u.s. citizen so we've killed three u.s. citizens in a two week period and when i would ask yemenis about that they would say to me well what about the forty something bedouins that obama killed or what about the governor of mara province who was killed in an airstrike and there is a hero you all focus on the americans we're focused on our people that you're killing you say that these guys are terrorists we say your drones are terrorism so you know i do think that the united states names needs to back away from this idea that you know you can engage in this cruise missile or drone strike fuelled war of attrition and kill the finite number of bad guys in the world because that's just not the way it works we're creating more enemies so at the end of the day i think the yemenis who say there would have been less terrorism at the u.s. not than this or are they're probably right and i think that that's

a i think that's a defensible position and it should inform some u.s. policy going forward we don't learn from our from our horrid mistakes i mean look at the disaster in afghanistan right now what's the end of that going to be the taliban have to be brought to the table because they have indigenous support in some of these areas the u.s. is so afraid of the word islam that they are pushing aside perhaps the only political forces in these countries that could stabilize them these are religious countries there's going to be some religious form of governance in it that is indigenous to people so you know that the us needs to back away from just thinking being kill your way to peace and start negotiating with the people that actually can bring some form of. that in these countries when they bring that up to you and in your face you're talking one of the tribal leaders there who says that why don't we get paid by the us right or that they paid off the lockerbie bombing and so why can't we get some kind of compensation for that do you think about the good idea you know what that fix anything or what is the way forward i mean you know it's kind of funny and you know you and i have talked about

a variety of countries that that sort of dot the landscape of the zone declared wars that the obama administration is waging in every country that i've been in the last year or so in afghanistan and somalia and elsewhere sometimes people think i'm a cia person and they want to sort of cut a deal with me or ask me why i stopped paying them or they want to you know send a message and in yemen it was no different where you know i met with several tribal leaders who said why doesn't the u.s. put us on the payroll like they did with the awakening councils in iraq you know as a people study history they see what happens elsewhere and you know everyone's running their angle but you know that's that that i think is a very dangerous slope that you can start falling down back into the one nine hundred eighty s. you know style contra stuff where you start arming all these local forces and you know the u.s. doesn't doesn't have any credible intelligence on the ground in yemen and the last thing they need to do is start putting a bunch of bunch of shakes on the payroll and they don't know where their weapons are going to go or where the money is going to go i guess they get out of any.