three. three. three. three blown video for your media drug free media gargi dot com. half past the hour now you're with r.t. and a quick look at what's making headlines around the world to give you an scenes of celebration as well as protests as bloody no to putin wins russia's presidential race there were more than two hundred arrests in moscow however as protesters refused to disperse after a city center rally. former u.s. presidential candidate senator john mccain calls for air strikes and a fully fledged military campaign against the syrian regime red cross aid finally reaches to parts of the city of homes where civilians caught between the government

forces and the armed opposition have been 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 prevent iran from getting nuclear weapons and israel has long been pushing for military action against the islamic republic which critics fear will trigger disaster for the region. next up max and stacey on bail some of the secrets world finance serves a would rather you didn't know it's all up in the report coming up next. keyser this is the cause report magic circles inner sanctums and of course curses stacey 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 estimated value in dollars at the ritz here in a d.p. morgan palladium 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 is at least one perk you can expect to receive that you won't find anywhere else that j.p. morgan palladium card apparently has been around for three years max and there's only a couple thousand people who have this the card itself is actually made with palladium and twenty three carat gold reportedly putting its cost of materials alone about one thousand right while the card allows for the users when they go to an a.t.m. machine or they use it as 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 they use the non palladium 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 rakes 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 an open to the whole a polaroid you get twenty five million dollars you can be friends with bernie made off oh he's the guy who set up the nasdaq is a system way for them like one thousand. dollar cost credit card that they say gives you entree into jamie diamond's inner circle or does what they're made of the game they need new suckers to come in and become retail customers to subsidize the larceny going on at the top it is exactly like a bernie made up it's made off like made off was doing great until you had

a market sell off and you know was so over trades at one hundred two hundred dollars an ounce j.p. morgan would be bankrupt too just like enron just like made all just like g.e. just like bear stearns just like lehman brothers it's a huge first in politics game but i still wear shorts and a p. morgan and make a fortune so speaking of j.p. morgan's inner circles max j.p. morgan offers peek into trading magic circle just staley is not going to be popular in 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 talk 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 they make no money but they made up to twelve thousand dollars for an interest rate swap and open the komodo diamond open as komodo. as a penpal or as don't tell it should be oh my god well yeah this is just derivatives 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 out of the money bought or fly put spread and make six seven eight times the commissions that's all derivatives are is this repackaging that are charging a thousand times more than just a straight up and down transaction would be pretty much a lot of. ocean is a complete waste of time and energy has not reduced risk and has added risk look at what is done to the global economy it's created the worst crisis in history because of the router's not because there's more risk but exactly so take the morgan just daily here and slate confirming the 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 you know 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 are people matter but keeping morgan's business plans are the success of belsen the fecal matter that i created selling these poor mr produce absolute toxic drugs that we could build off of the taxpayer for call up well even in the title of that headline here you see magic circle and what's the key ingredient to magic is of course a distraction and that is genie 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 what they 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 guy or 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 libya later or oil market let's manipulate the stock market let's manipulate the options market see the prices are telling us let's commit genocide in iraq let's commit genocide and i read prefer says monomaniacs because the price tell just do so because looting of the price because replied. harvick there is no regulations nobody plays people and you know so again they allege they're taken morgan 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 to use battle for casino leveled the italian town and its hilltop abbey 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 in fence and services for the poor or three repeating itself under the nazis we know j.p. morgan had an active and funding the nazis along with coca-cola and i.b.m. were they doing now all their funding of genocide in italy again it's clear from the reporting to type the homeless side all genocidal all cost provoking income

groups 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 dimon looks great in that kimono 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 a guy who's blitz wielding whole cost provoker they no way to defend themselves they knew no to the weapon. to 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 yet 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 know 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 also laws against for all this all sorts of laws 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 cosa nostra is not happy with the fact that they're being mafioso out mafia by outside forces on wall street will this lead to 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 units of power these from the total of italy's boot to the alps were losing a total of nine hundred twelve million euros on such 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 would come in with hundreds of billions of dollars with a naked credit default swap and sales then the i.m.f. of the troika in the c b 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 the twenty four hundred tons of gold we transfer to the criminals on wall street this

is the same game plan over and over and over again please welcome to italy who do best take up the suckers here's 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 paul 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 a better able to give him any evidence i am here showing you that there is no evidence that it has done anything but destroy economies is destroyed this town of casino italy is destroyed three hundred although many said polities now we're going to move on to greece default swaps don't have to pay is their fault insurance on 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 is those determinations committee oh sepi morgan chase. so interesting i thought they took risk in providing the market making function in this credit default swap market at you know they don't take any risk they just get the reward that's their definition of capitalism hence we went to. make it all the reward you take all the risk you get all the money you get nothing like up close and of course nationalism so finally here i'm j.p. morgan fast furious and that's 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 its a cargo 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 no no no prove to the compliance officer and that office as i've been saying on the show for months always keep your compliance officer sweet every christmas give me a big cash bonus because it's. actually 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 stacy have a nice for much of the kaiser report thank you matt and i go way much more coming away stay right there.

with the. technology innovation all the developments around russia we've got the future of coverage. welcome back to the casa report i'm max keiser time now to go to sydney australia to speak with such additive das a derivatives expert and the author of extreme money a masters of the universe because the i asked the a the international swaps and derivatives association has determined a few days ago that the credit advance 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 writes off one hundred billion in good they can't pay anything they don't have to erase truck to get that they need a massive bailout and here's what they have not to focus it this is remarkable and now let's go back a little bit in history and write about july last year this whole thing became an issue because everybody was concerned about if greece actually could to force. well what would happen and all these credit default swaps which are basically credit runs 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 not that states the right outs were believe it or not and you get to be twenty one percent they got fifty and the real

losses are going to be a round about seventy five to said if this is voluntary all the confessions extracted by the spanish inquisition a voluntary so that's the first thing and then the next issue is what happens if everybody doesn't agree well then we're 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 this bond contracts to be written in a particular way and everybody has to go that's the second thing that happened the third thing that happened was the european central bank and the others it will banks which between them about fifty five billion euros with the greek bonds didn't want to take any hit 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 dogs which basically said well if there is a cac close put it in well too bad it might apply to us and so what happened was a couple of people who had bought insurance on these great bones went along to this

strange surreal body called d.c. b.c. says for terminations committee and this is specialist a body which was set up under what was known as the big bad protocol to thurmon whether or not there's a credit event and they were asked to find where all of 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 and the banks is not off its self constitute a credit which to me is pretty extraordinary but this whole culls whole thing calls into question with a piece contract a real contract or basically just these fake contracts like part of villages and that's what's the key issue it's pairing up because. insurance product 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 that they can employ on the balance sheets of this very of 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 hear anything they're worthless and and then 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 fault 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 the core of the fatwa which has been proven to be a theory doesn't exist life masters whom vent of them is obviously a terrorist

a financial terrorist and the great people are suffering austerity for this experimentation print 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 court of the fall swaps and insurance product that doesn't exist well i think you have to be right and the simple reason days anybody sold a product like this. in the normal course of the thing is 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 this contract couldn't 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 said this was like selling flood insurance and

not paying out with there's a flood but the most amusing thing about that little bit is spin off which obviously bill gross is a big screening whatever actually voted to say that they had to be due credit to vent so at least we know if one thinks this product might be fraudulent but the chinese walls within. our walls of steel and separate everybody was hard to keep on the same of the walls the chinese walls the separation it 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 as 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 pay out that's just an outright fraud on a racket is not i mean let's us why are we beating around the bush task. the poor yeah we are pretty well in the bush because everyone's talking about corn and forethought in terms of whether or not illegitimate product ever it's not fraud people are suffering austerity in greece started buying a whole cost in your rightly point zero zero one zero zero eight dollars i think a fundamental thing here is that you're absolutely correct but c.d.s. is the 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 doubt that and basically it could work the first thing is let's look at the date write off this two ways of reducing did one is to write off the second is to as you correctly say start the greek people get the money to pay back the day 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 never going 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 has to go down to is a jerk they feel the numbers for godsake to get there if you look at the graph of the greece growth path that the troika proposed there at minus six this year they exceeded their about square and then after that in perpetuity they grow at four or five percent could somebody explain to me the math underlying that we now see also a fundamental break did not proceed i mean do you see what's happening in spain the spanish government has come down and said look this you know this deficit reduction i think working kids so we want a bit of rope here so we can actually not cut as aggressively and the moment that happens we hear out of delayed paris and brussels perhaps we ought to get a technocratic government in portugal to do what we want this

a fundamental break that here in democracy and i think that is where the real pressure is going to come these protests are going to stop there's going to be huge political issues in europe and essentially. when you get effectively to german chancellor for better or for worse painted as a dominatrix with a nazi flag i don't think that's good for your a blog do you think max let's talk about something interesting in the economist magazine recently ran a special edition praising financial innovation you wrote a blistering attack on your claims last tell us about your main criticism of financial and they innovation in the economist and the media's role in promoting this canard well 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 hating tools that's 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 a 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 but that's the cost of progress but the most egregious part about this is a simple cost benefit analysis has 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 in 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 the idea what they

could they could run the economy and then they have a goal 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 were able to provide any money but you know i said that little blog i did to a few people who said to the economist one urging the economist that if they had any decency to publish it in full do you think they're going to do that now but i mean if your point being that not only is the financial derivatives market which is all based on the black saul's 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 now you've got the mainstream press like the economist who is unrepentant in their promotion of financial holocaust and financial apartheid and that nobody is

offering any checks and balances here there is it for example united states and united kingdom all criticism of banks is censored i know that personally from having done reports for their major outlet 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 do it recognize the risk 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 you back on soon thanks for being on the kaiser report good to be with you max and that's 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 look at 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. guys are saying.