coverage. this is r.t. coming to live from moscow and these are our headlines tonight of cheers but also for a few years as a presidential victory sinks in with tens of thousands on the streets but some go too far forcing the police to step. across the atlantic president obama says that an attack on syria would be a mistake dismissing calls for airstrikes by leading u.s. senator john mccain. and obama also brushed off republican calls to weigh in with military force against iran this is to round gives nuclear inspectors access to

a secret military facility while a new round of talks is set to begin with u.n. security council members and. programs continue next maxon stacy reveals some of the dark secrets the big sharks of the financial world would rather you didn't know it's the kaiser report right now on r.t. . this is because report magic circles inner sanctums and of course curses stacy herbert tell me more max the topic of conversation today. 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 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's at least one perk you can expect to receive that you won't find anywhere else the 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 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 played iyam 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 open to the whole colloidal you get twenty five million dollars you can be friends of bernie made off oh he's the guy who set up the nasdaq is this just a way for them like one thousand die. dollar cost credit card that they say gives you entree into jamie diamond's inner circle but is like a made up ponzi scheme they need new suckers to come in and become retail customers to subsidize the larceny going up the top it is exactly the bernie made of it 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 one hundred two hundred dollars an ounce j.p. morgan will be bankrupt too just like and rob just like made all just like just like bear stearns just like lehman brothers it's a huge perk in politics game by still for sure j.p. morgan and make a fortune so speaking of j.p. morgan's inner circles max j.p.

morgan off first peek into trading magic circle just daily is not going to be a popular wall street 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 kimono oh by revealing that interest rate swaps came at top at twelve thousand dollars a pop trading loans are asset backed bonds bought and 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 the twelve thousand dollars for an interest rate swap they open the komodo diamond up as comodo. there's a penpal worth going to tell you 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 butterfly put spread take six seven eight times the commissions that's all derivatives are is this repackaging ether charging a thousand times more than or just a straight up and down transaction would be pretty much a little bit. action is a complete waste of time and energy it has not reduced risk it has added risk look at what is going to the global economy has created the worst crisis in history because of the router's not because there's more risk but exactly so j.p. morgan just daily here and slate confirmed 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 extra 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 success i created cars is a sequel matter keeping morgan's business plans are the success of the bulk of the fecal matter that i create is selling these poor through suppose these absolute pots of drugs that we get bailed out of the taxpayer for call 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 what they find out is that he's a financial benefit that's of 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 is 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 looks manipulate the stock market let's manipulate the office market see the price of telling us let's commit genocide iraq let's commit genocide and i read prefer can show so many acts because the price told us to do so because of the price because replied. hard there's no regulations nobody plays people and you know so again they allege that j.p. 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 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 sixteen cents and services for the poor or so the story repeating itself under the the nazis we know j.p. morgan 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 hole of cost provoking bloops you can bomb the hell out of people and the world will look at that and they see it and they saying 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 they're defenseless against dinon 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 hand-picked 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 pacino's assembly finance committee says that the bankers who share responsibility for peddling the derivatives should pay with their jobs has 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 sorts the laws against kroll there's 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 a 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 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 on able about three hundred. from the toe of

italy's boot to the alps were losing a total of nine hundred twelve million euros on such three of the divs as of march bank of italy data shows like 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 also up in sales then the i.m.f. and 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 these friends and criminals on wall street there's a saying game plan over and over and over again please look beyond italy do you do pass take out these 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

challenge them years ago to say show me one piece of evidence one. that financial innovation has ever helped an economy anywhere nobody has been 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 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 dissolved 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 j.p. morgan chase. so interesting i thought they took the 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 as we went. we keep all the reward you take all the risk we get all the money you get enough and that's like apples and of course nationalism so finally here on 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 collapse an employee in a street car go 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 that that office was ever

saying on the show for months always keep your compliance officer sweet every christmas you have a big cash bonus because it's. acting 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 the 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 i think you have advice for months on the kaiser report thank you matt and i know it much more coming away stay right there. in the morning.

mission free critique and free in-store charge free. range month free. free stews free. food free volunteers to be your for your media project and a free radio don carty dot com. welcome back to the cause or a poor imax cause or time out to go to the australia to speak with such as heated das a derivative expert and the author of extreme money the 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 of events had not occurred in grace that would trigger payouts of three point two billion dollars in greek credit default swaps your thoughts max this is incredible greece writes off one hundred billion in debt

they can't pay anything they don't have to erase to rub together they need a massive bailout and test book they have not proposed 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 get to fold well what would happen at all these credit default swaps which basically create insurance contracts would be treated and there was the dreaded c. word contagion and so when they came to doing this bailout and doing the debt write downs but they decided to do was to do it in a very clever way which is to do this as they fall into three exchange and basically the banks would basically take the hit but they would do it of their own volition not that stage the right out but believe it or not and it could be twenty one percent now 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 a voluntary so that's the first thing and then the next issue is what happens if everybody doesn't agree well then what we're going to do is put in what's called a collective action clause which means the majority can rule that basically these contracts are h.p. has been contracts to be rewritten in a particular way and everybody has to go but that's the second thing that happened the third thing that happened was the european central bank and the alice it will banks which between them about fifty five billion euros with 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 a got bonds 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 books went along to this

strange surreal body called the sea the sea says which is terminations committee and this is specialist body which was set up under what was known as the big bang protocol to thurmon whether or not there's a credit event and they were asked to pint all the 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 of priority to the european central bank and the el centro banks because not of itself constitute a credit fed which to me is pretty extraordinary but this whole coles whole thing calls into question whether he's contracts a real contract or basically just these fake contracts like pollock villages and that's what the key issue is. an insurance product an insurance contract is put in place 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 what they're saying is that these credit default swaps that are supposed to be insurance are not in fact insurance a lot they don't hear 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 and 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 concerned product called the court of the court lot which has been proven to be a theory that doesn't exist masters soon vented them is obviously

a terrorist a financial terrorist and the great people are suffering austerity critics param inflation fred thousand 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 fossil absolute stars 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 the thins what we call general merchantability other with the 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 explained to them what had happened here that basically this contract couldn't work they'd 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. well if there's a flood but the most amusing thing about that little bit is pimco of which

obviously bill gross e's a big swinging whatever actually voted to say that they had to be due credit to vent so at least we know if one thinks that their product might be fraudulent but the chinese walls within people. walls of steel and separate everybody was hard lets keep on the same of the walls of chinese walls 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 t a determination committee that determined there was no credit event so if one counterparty can determine whether or not that counter party 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 internal products that we

invented we brought to market because we're on the committee determine whether we payout that's just an outright fraud to win a racket it's not i mean let those why why are we putting on the boy stasis. really round the corner oh yeah we are pretty one of course because everyone's talking about current forecast and terms of whether or not a legitimate chronic investment fraud people are suffering austerity in greece they are dying as a whole cost inherently played throughout the entire global only das i think the fundamental thing here is that you are 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 that and basically it could work the first thing is let's look at it right off since two ways of producing good one is to write it off the second is to as you correctly say start the greek people get the money to pay back the dead and we have

a bit of both and that part of 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 out but it's even worse than that the one twenty percent level that we talking about that greece has to go down to the church they fiddle the numbers for god's sake to get there if you look at the graph of the greece growth pass that the troika proposed there at minus six this year next year they're about square and then after that in perfect unity they grow at four or five percent could somebody explain to me the math underlying that we not see also a fundamental break to democracy i mean do you see what's happening in spades the spanish government has come down and said look you know this is 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 believe in paris and brussels perhaps we ought to get a technocrat a government in portugal to do what we want there's a fundamental breakdown here of 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 dominate tricks with a nazi flag i do 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 her claims last tell us about your main criticism of financial and very 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 can provide safe payment systems that can provide a few that's pretty much it but the economist god bless their hearts and souls affectively have to side with our 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 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 it 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 is ok with an actual innovation it breaks 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 is just massive it's a financial sense we have central bank balance sheets which we've got 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 for the countries come up with five year plans because that's basically the only way 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 volcker said the. the only financial innovation was a dam was the automatic teller machine and the way we going with currencies seen when you put your cut at the a.t.m. you won't be able to drive any money but you know i sense that little blog i did to a few people who said to the economist one urging the economist if they had any decency to publish it in full do you think they're going to do that now but i mean your point being that not only is the financial derivatives market which is all based on the black shawls 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 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 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 if you find that in australia as well oh absolutely i think most of these people are dealing in fiction but great back to your point they do tricky to the rich seeking behavior of the financial institutions and they need to address that and nobody that nobody in mainstream media or politics wants to address that that's what needs to be addressed all right thus are out of time i have 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 us 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 until next time x. guys are saying bye.