that time for the common headlines dozens of arrests as rallies both in support of and against what he met through to russia after his name president turned a routine one sixty four percent of the ballots finishing well ahead for another term. former u.s. presidential candidate senator john mccain calls for air strikes a fully fledged military campaign against the syrian regime red cross say funny reaches some parts of the city of homs where civilians between government forces and the position desperate for help. president obama promises his support

to a pro israeli lobby in washington saying the u.s. will not hesitate to use force to enter iran from getting nuclear weapons israel has long been pushing for military action against islam which critics failed to the disaster from the beach. the next maxon stacy unveil some of the secrets well finances would rather you didn't know and so when the kaiser report up next. this is the ca's report magic circles inner sanctums and of course curses stacy herbert tell me more max the topic of conversation today we must be j.p. morgan the credit card for the one percent of the one percent the ticker so you see

this number here one thousand the estimated value in dollars of the materials in a j.p. morgan politi m card if you happen to have an extra twenty five million dollars that you were willing to let j.p. morgan chase manage for you there's at least one perk you can expect to receive that you won't find anywhere else that j.p. morgan palladium card apparently spent around for three years max and there's only a couple thousand people who have this the card itself is actually made with politi and twenty three carat gold reportedly putting its cost of materials alone about it one thousand right well the card allows for the users when they go to an a.t.m. machine or they use it as a purchases that they get the spot price for currencies there's no market making going on there's no spread that everyone else is using a credit card to chase customers who use the non political card of course when they use the machines and they go and make a purchase in a foreign country with their card there's

a huge spread two three four five percent sometimes the bank just breaks or i should say rapes their customers j.p. morgan are subsidizing that top one percent of one percent yes but on the other hand max you can think of it this way burning made off also had an exclusive club not into the whole colloidal you get twenty five million dollars you can be friends of bernie made up oh he's the guy who set up the nasdaq is this just a way for them like one thousand guy. dollar cost credit card that they say gives you entree into jamie diamond's inner circle but is like a laid off policy scheme they need new suckers to come in and become retail customers to subsidize the larceny going up the top it is exactly like a bernie made up it's a it's made off like you know made off was doing great until you had a market sell off and you know it's over trades at a hundred two hundred dollars an ounce j.p. morgan will be bankrupt too just like enron just like made all just like just like

bear stearns just like lehman brothers it's a huge for composers gain by silver short j.p. morgan and make a fortune so speaking of j.p. morgan's inner circles max j.p. morgan offers a peek into trading magic circle just daily is not going to be popular wall street's trading brotherhood the head of j.p. morgan's investment bank has broken a code of silence by revealing how much the firm rakes in as a market maker staley has as he put it opened the commo know by revealing that interest rate swaps came at top at twelve thousand dollars a pop trading loans are asset backed bonds brought in ten thousand dollars a time these amounts reflect illiquidity or the fact that trades are tailor made for clients and in both cases leaving the middle man with extra risk they only need one point five cents for executing a trade of a stock so if a client wanted to buy a stock and make no money but they made up to twelve thousand dollars for an

interest rate swap they open the komodo diamond up as cologne. there's a penpal worth going to tell you should be oh my god well yeah this is just a riveted of course i was an option trader on wall street i know that you could just buy a stock and make a commission or you could sell and out of the money butterfly put spread takes six seven eight times the commissions that's all derivatives are is just repackaging ether charging a thousand times more than just a straight up and down transaction would be financial. action is a complete waste of time and energy and has not reduced risk it has added risk look at what is done to the global economy is created the worst crisis in history because of the router's not because there's more risk but exactly so j.p. morgan just stay here and slate confirming to slate magazine which is reporting this does not challenge this but they say j.p. morgan had to charge twelve thousand dollars because it reflects illiquidity or the fact that the trades are tailor made for clients in both cases leaving the

middleman with extra risk j.p. morgan acts to risk just like they did in jefferson county alabama they sell these like sewer bonds that don't work and then the towns erupted these huge geysers of fecal matter and jamie dimon says look i'm a success i created cars is a sequel matter that's keeping morgan's business plan i was successful i didn't think of pelf of the fecal matter that i created these poor use of produce absolute toxic drugs but we get bailed out of the taxpayer for oh all that well even in the title of the headline here you see magic circle and what's the key ingredient to magic is of course a distraction and that is jamie diamond doing opening his kimono people are grossed out they don't want to see the inner workings of how the sausage of a toxic derivative is made to find out is that he's a financial benefit that's making a market means he's the buyer and the seller goldman sachs or the buyer and the

seller they manipulate the market because they're buying and selling to create a fake price that fake prices propaganda that's used to engineer social change and political change oh let's invade iran let's first manipulate the oil market let's manipulate the stock market let's manipulate the office market see the prices are telling us let's commit genocide iraq let's commit genocide and i read the first consumers monomaniacs because the price tell you know because of the price because replied. harding there's the regulations nobody british people know so again they allege they can work and has taken some risk in these swaps that they're selling all over the world they're very profitable margins so let's look at some headlines max j.p. morgan swaps occupying casino prove curse like world war two destruction world war two the battle for casino leveled the italian town and its hilltop now the thirty three thousand residents are digging out from the rubble

left by wall street six decades after u.s. led forces ousted the nazis from casino a new generation is grappling with the fallout from the debts of post-war rebuilding borrowings that grew because of a derivative that backfired soaring costs forced casino eighty miles south east of room to settle an interest rate swap with j.p. morgan chase in two thousand and nine leaving the town unable to pay for daycare for sixty incense and services for the poor or three repeating itself under the the nazis we know j.p. morgan we had an active fan of funding the nazis along with coca-cola and i.b.m. were they doing now oh they're funding a genocide in italy again it's perfectly reverting to type they're homeless sidle genocidal hola cos provoking nincompoops you can bomb the hell out of people and the world will look at that and they see it and they think oh my god this is a violent act and we must stop these people or you can send in some interest rate

swaps and everybody says well that's capitalism it's there's nothing corrupt about that jamie diamond looks great in that kimono no he must be a nice guy we can't do anything to stop this because we can't stop capitalism or they can't defend themselves against financial terrorism same thing in greece same thing in italy same thing in countries around the world are defenseless against dinon blitz wielding whole cost provoker they no way to defend themselves they knew no to the weapon. they defend themselves they have no they have no government in the case of greece they have a j.p. morgan and pick technocrat in there to say yeah goldman sachs same thing there's no way to defend it because they say it's capitalism you know it's not it's mafia it's a racket and italy should of all countries no a mafia racket when they see it now iris valenti who cares casinos assembly finance committee says that the bankers who share responsibility for peddling the derivatives should pay with their jobs heads rolling is the least we would expect

she says when people's attitude is to cheat others new rules are needed to prevent it happening again well there are rules in place against mafia rackets it's called rico there are all social laws against for all this also was against murder well i think that's an interesting point somebody in italy who has a reputation for taking the law into their own hands the local causal nose throat is not happy with the fact that they're being mafioso out mafia by outside forces on wall street will this lead to the credit event in the in the form of a regime change in their statement to the investing class in their propaganda amplified through the financial media and the groovy slate media you know j.p. morgan is arguing that they themselves j.p. morgan is sacrificing themselves to capitalism we are the market makers taking a risk but time and time again we see that even

a country where you would think they would know how to defend themselves against a mafia racket they are unable about three hundred powell g.'s from the toe of italy's boot to the alps were losing a total of nine hundred twelve million euros derivatives as of march bank of italy data shows right the so j.p. morgan moves in with their advance team to destroy the economy using derivatives then the rating agencies will come in and. downgrade the country as a sovereign debt then the hedge funds will come in with hundreds of billions of dollars of naked credit default swap and sales then the i.m.f. of the troika needs to be will come in and say we're going to put in a technocrat to clean up this mess then all the assets of italy including twenty four hundred tons of gold we transfer to these frickin criminals on wall street this is same game plan over and over and over again please look to italy to do plus take out these suckers here is it a case where financial innovation this these guys in their kimono stand in front of

the world and say our financial innovation is needed to save the world poll volcker calends them years ago to say show me one piece of evidence one. that financial innovation has ever helped an economy anywhere nobody has the venerable to give them any evidence i am here showing you that there is no evidence that it has done anything but destroy economies this destroyed this town of casino italy it's destroyed three hundred although many said now we're going to move on to greece default swaps don't have to pay is their default insurance and greek debt won't be paid out the international swaps and derivatives association said after it was asked to rule whether part of the nation's one hundred seventy billion dollars bailout was a credit event ok we all know that greece apparently did not default but guess who sat on it is does determinations committee vote morgan chase.

so interesting i thought they took risk in providing the market making function in this credit default swap market no i don't think any of us just get the reward that's their definition of capitalism as we went. we keep all the reward you take all the risk we get all the money you get nothing that's like apples and of course that's realism so finally here on j.p. morgan fast furious at m.f. global in days leading up to firms collapse one hundred sixty five million dollars transfer okayed in a flash so apparently at four fifty three pm five days before m.f. global holdings ltd collapsed an employee in a sick aagot office asked a coworker to move one hundred sixty five million dollars from one of the securities firms bank accounts to another approved came the response one minute later according to an e-mail reviewed by the wall street journal within fifteen

minutes the money moved to an m.f. global account at j.p. morgan chase yeah well we know who proved it to compliance officer and in that office as i was saying on the show for months always keep your compliance officer sweet every christmas give me a big cash bonus because you. sakti for this reason at the end of business actually the markets are already closed so that's number one the transaction could not have taken place because the markets were closed at that time of day they get him to come in and sign off on a piece of paper that commits for this transfer completely outside of the normal workings of the markets committed massive fraud is the same scam for thirty years ok so you haven't time for much on the kaiser report thank you matt and i know a much more coming away stay right there.

you know sometimes you see a story and it seems so you think you understand it and then you glimpse something else you hear or see some other part of it and realize that everything you thought you knew you don't i'm tom part of the big picture. welcome back to the kaiser report i'm max cars or time not to go to the australia to speak with such as you to das a derivatives expert and the author of extreme money a masters of the universe toss the i asked the a the international swaps and derivatives association has determined a few days ago that the credit of events had not occurred in greece that would trigger payouts of three point two billion dollars in greek credit default swaps

your thoughts max it's incredible greece rocks off one hundred billion in debt they can't pay anything they don't have to euro struck to get that they need a massive bailout and guess what they have not proposed that this is remarkable and now let's go. back a little bit in history and roundabout july last year this whole thing became an issue because everyone he was concerned about if greece actually did to fold well what would happen and all these credit default swaps which are basically credit surance contracts would be triggered and there was the dreaded c. word contagion and so when they came to doing this bailout and doing the write downs what they decided to do was to do in a very clever way which is to do this as a voluntary exchange and basically the banks would basically take the hit but they would do it of their own volition now that's stage the right as well believe it or not going to be twenty one percent they've got fifty and the real

losses are going to be right about seventy five to said if this is voluntary all the confessions extracted by the spanish inquisition of olive tree so that's the first thing that in the next issue is what happens if everybody doesn't agree well then what are we going to do is put it what's called a collective action clause which means the majority can rule that basically these contracts are going to be these got contracts that have to be rewritten in a particular way and everybody has to go by that's the second thing that happened the third thing that happened was the european central bank and the other central banks which between them about fifty five billion euros with the greek bonds didn't want to take any here and certainly they wanted to be excluded from the effects of the collective action flows so what they decided to do was do a sneaky exchange before the real exchange with boards which basically said well if there is a cac close to the well too bad it would apply to us and so what happened was a couple of people who had bought insurance on these great dogs went along to this

strange surreal body called d.c. b.c. said for terminations committee and this is special is the body which was set out under what was known as the big bang protocol to thurman. whether or not there's a credit event and so they were asked to find where all these three events to some extent constitute a credit event that what they said is one which is the exchange itself and three which is the. giving off priority to the european central bank at the outset will banks does not offer self constitute a crate of it which to me is pretty extraordinary but this whole culls whole thing calls into question with a these contracts a real contract or basically just these fake contracts like part of glitches and that's what the key issue is right now thus. an insurance product an insurance contract is put in place and in this case is

a financial insurance product that gives the market a sense of comfort in terms of the amount of risk if they can employ on the balance sheets of this very these various banks now which are saying is that these credit default swaps that are supposed to be insurance are not in fact insurance at all they don't share anything they're worthless and and now that it's been proven that they're worthless and now that the insurance has been proven faulty this is caused . a need for some extra national credit facility like the e.c.b. and the troika to bail out the banks who sold us faulty insurance which in turn means more austerity suffered by greek people so the greek people are subsidizing the experimentation into a faulty insurance product called part of the fault line which has been proven to be a theory it doesn't exist by masters whom granted them is obviously a terrorist

a financial terrorist and the great people are suffering austerity for this experimentation doesn't exist so is it safe to say that there will be more austerity measures from the greek people and all of europe and the rest of the world to subsidize the experimentation in these part of the fall swaps insurance product that doesn't exist well i think you have to be right and the simple reason days if anybody sold a product like this. in the normal course of events what we call the general merchantability in other words a product has to be fit for purpose well there's no way this contract would fit and if you actually went to any insurance regulator and explain to them what had happened here that basically is contracted work let's say well this is actually amounts to a fraudulent contract and we would investigate and probably prosecute and indeed bill gross from pimco came out and say this was like selling flood insurance that doc paid out with there's

a flood but the most amusing thing about that little bit is pimco of which obviously bill gross is a big spending whatever actually voted to say that they had to be due credit to vent so at least we know one thinks the product might be fraudulent but the chinese walls within our walls of steel and separate everybody was are both keep on the same of the walls the chinese walls the the separation that used to be place between the gambling part of a bank and the utility part of a bank what used to call glass steagall that came into effect after the last time j.p. morgan blew up the economy j.p. morgan is one of the several banks that sat on the i s d a determination committee that determined there was no credit event so if one counterparty can determine whether or not that counterpart has to pay out isn't this i mean it's a racket j.p. morgan is saying that we don't have to pay out on the insurance products that we

invented we brought to market because we're on the committee determine whether we payout that's just an outright fraud racket is not i mean look because why why are we beating around the bush task. moriarity round the corner oh yeah we are pretty one of the worst because everyone's talking about corn aforethought in terms of whether or not illegitimate product and that's not fraud people are suffering austerity in greece they're dying as a whole cost in your rightly the quake european toward low below the radar i think the fundamental thing here is that you're absolutely correct but c.d.s. is a part of the problem the real issue here is let's look at what the greek package really does and the fundamental thing is it does sweet f.a. we all know that and basically it could work the first thing is let's look at the date write off this two ways of reducing get one is to write it off the second is to as you correctly say stuff the greek people get the money to pay back again and

we have a bit of both in that but for the rest of europe places like portugal ireland spain italy and indeed in other countries they just starving themselves so this is difficult to work and the debt levels are going to keep going up but it's even worse than that the one twenty percent level that we talking about that greece goes to has to go down to is a jerk difficult numbers for godsake to get there if you look at the graph of the greece growth path at the troika proposed they're at minus six this year they exterior about square and then after that it perpetuity they grow at four or five percent could somebody explain to me the math underlying that we now see also a fundamental break to democracy i mean you see what's happening in spades the spanish government has come down and said look you know this you know this deficit reduction and eight working kids so we want a bit of rope here so we can actually not cut as aggressively and the movement that happens we hear out of the live in paris and brussels perhaps we ought to get a technocratic government in portugal to do what we want this

a fundamental breakdown here in democracy and i think that is where the real pressure is going to come these protests are going to stop is going to be huge political issues in europe and essentially. when you get effectively the german chancellor for better or for worse painted as a dominate tricks with the nazi flag i do think it's good for europe blog to do you think max let's talk about something interesting the economist magazine recently ran a special edition praising financial innovation you wrote a blistering attack on her claims das tell us about your main criticism of financial invade innovation and because of this and the media's role in promoting this canard but look i think we should have a debate about financial innovation i'm a simple man i basically said all along that you know france can do certain things basically it can match savers and borrowers they can provide safe payment systems they can provide if you pretty much it but the economist god bless their hearts and souls effectively have decided that financial innovation is in the american bill of

rights so basically it's self-evident truth that financial innovation must be very very good so the argument is any regulation must by definition be bad we should allow these people to do that and the economist had the absolute total goal to say in this well it doesn't matter if a few people get burnt because you know there's a few tough products out there the cost of progress but the most egregious part about this he's a simple cost benefit analysis is ok well financial innovation did bring certain things but then let's look at the other side of the equation which is the costs the costs of the global financial crisis as you correctly point out the human sense he's just massive in the financial sense we have central bank balance sheets which have gone from three billion i think about three trillion to fifteen trillion a five times multiplier in four years i mean basically we're running a soviet style economy in the west at the moment because i'm just hoping that the countries come up with five year plans because that's basically anywhere they can

run the economy and then they have the gall to say well actually you know it's still good but the point is they also never try to quantify one benefit and i actually with paul volcker here when vocus said. the only financial innovation was a dam was the automatic teller machine and the way we going with currencies seen when you put your card at the a.t.m. you won't be able to provide any money but you know i sense that little blog i did to a few people who said to the economist one economist that if they had any decency to publish it in full do you think they're going to do that you know what i mean if your point being that not only is the financial derivatives market which is all based on the black cells surprising volatility formula which gives the right for banks to trade on ether and call that productivity not only is that been discredited now by the complete disseminate the blowing up of the global economy but i've got the mainstream press like don't the economist is unrepentant in their promotion of financial holocaust and financial apartheid and that nobody is

offering any checks and balances here there is a free for example united states and united kingdom all criticism of banks is censored i know that personally from having done reports for their major outlets and it gets out right censored or censorship or any dissenting view unbanked terrorism in the biggest economies of the world do you find that in australia as well oh absolutely i think most of these people are dealing in fiction but going back to your point they could recognize the real seeking behavior of the financial institutions and they need to address that and nobody but nobody in mainstream media or in politics wants to address that that's what needs to be addressed right duster out of time out to have it back on soup thanks for being on the kaiser report good to be with you max all right now is going to do it for this edition of the kaiser report with me max kaiser and stacy herbert and i want to thank my guest the famous das that's all i need to know just like of das he's written a book extreme money you must read it you can send me an e-mail at kaiser report r

t t v are you can follow me on twitter and so next time x. has are saying by our.

all.