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today violence is once again flared up. these are the images the world has been seeing from the streets of canada. showing operation to rule the day. keyser this is because the report magic circles inner sanctums and of course curses stacy herbert tell me more max the topic of conversation stay 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 poll adium 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 one thousand right while 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 open to the whole a polaroid you get twenty five million dollars you can be friends of bernie made off although he's a guy who set up the nasdaq is this just a way for them like one thousand dollar. her cost credit card that they say gives you entree into the jamie diamond's inner circle but it is like a major policy scheme 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 burning made of it's 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 enron just like made off just like just like bear stearns just like lehman brothers it's a huge ferkin policies game but are still for sure 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 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 stealing 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 middleman with extra risk they only need one point five cents per 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 opens tomorrow but. 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 auction trader on wall street i know that you could just buy a stock and make a commission or you could out of the money butterfly put spread take six seven eight times the commissions that's all the ribs are is just repackaging each that are charging a thousand times more than just a straight up and down transaction would be financial innovate. it is a complete waste of time and energy it has not reduced risk it is 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 daily here and slate confirmed 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 extra risk just like they did in jefferson county alabama they sell these like sewer bonds that don't work and then the towns erupt of 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 in the thick of pelf of the physical matter that i created selling these poor through suppose these absolute toxic drugs that we could build off 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 or to find out is that he's a financial benefit i guess 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 let's manipulate the stock market let's manipulate the options market see the prices are telling us let's commit genocide interact let's commit genocide and i read prefer can chose the media because the price told us to do so because we knew the price because we're. other there is no regulations nobody pretty people who know so again they allege that taking 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 sixty incense and services for the poor or to syria repeating itself under the the nazis you know j.p. morgan had an active van and funding the nazis along with coca-cola and i.b.m. are they doing now oh they're funding a genocide in italy again it's perfectly reverting to type their homeless sidle genocidal hole of 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 kimi diamond 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 they're defenseless against dinon who's blitz wielding whole cost provoker of a no way to defend themselves they knew no to the weapons. they defend themselves they have no they have no governments in the case of greece they have a j.p. morgan and pick technocrat in there 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 know a mafia racket when they see it now iris valenti who chairs 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 fraud 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 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 powder things from the toe of italy's boot to the alps were losing a total of nine hundred twelve million euros to be of that is as of march bank of italy data shows that 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 do. downgrade the country as a sovereign debt then the hedge fund will come in with hundreds of billions of dollars of naked credit default swap and sales then the i.m.f. or the troika needs to be will come in and say we're going to put in the technocrat to clean up this mess then all the assets of italy including the twenty four hundred tons of gold we transfer to these frickin criminals on wall street there's a saying game plan over and over and over again please wealthy in italy who do best 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

calends then years ago to say show me one piece of evidence one. that financial innovation has ever helped in a colony anywhere nobody has been able to give them any evidence i am here showing you that there is no evidence that it has done anything but destroy economies it's destroyed this town of casino italy it's destroyed three hundred all their money supply now we're going to move on to greece default swaps don't have to pay is the default 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 dollar bailout was a credit event ok we all know that greece apparently did not default but guess who sat on is does the terminations committee. morgan chase. so interesting i thought they took risk in providing the market making function

in this credit default swap market you know they don't take any risk they just get the reward but that's their definition of capitalism as we went. we keep all the reward and take all the risk we get all the money you get enough and that's like up close and of course less 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 collapse an employee in a secada 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 but we know who approved at the compliance officer and that office as

i was saying on the show from us always keep your compliance officer sweet every christmas big cash bonus because it's. sacked me for this raise that at the end of business actually the markets are already closed so that's the number one the transaction could not have taken place to the markets were closed at that time of day they get 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 the average time for months on a kaiser report thank you matt and i know i was wrong coming away stay right there . the official. line pulled from the. video. feed now in the palm of your.

on the faulty george cong. missions free critique and free in-store charge free. range ones free. free. use free. download free volunteers to be your for your media projects and free media gogarty dot com. welcome back to the kaiser report imax cars are time now to go to sydney australia

to speak with such as heated das a derivatives expert any author of extreme money masters of the universe does the i asked t. a the international swaps and derivatives association has determined a few days ago that the credit advance had not occurred in grace that would trigger payouts of three point two billion dollars in greek credit default swaps your thoughts max this incredible greece writes up one hundred billion in bed they can't pay anything they don't have to your eyes to rub together they need a massive bailout and can't support 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 did to fold well what happens at 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. doing the debt 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 the right as well believe it or not and you get to be twenty one percent they've got fifty and the real losses are going to be right about seventy five percent if this is voluntary all the confessions extracted by the spanish inquisition a voluntary so that's the first thing then the next issue is what happens if everybody doesn't agree well then what 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 small contracts they could be rewritten in a particular way and everybody has to care about 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 where they got bonds which basically said well if there is a cac clause put it in well too bad it would apply to us and so what happened was a couple of people who had bought insurance on these greek gods went along to this strange surreal body called the sea p.c.'s that's what the nations committee and this is special is the body which was set up under what was known as the big bang protocol it is term and whether or not there is a credit of it and they were asked to pine whether 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 of priority to the european central bank and the else it will

banks because not of itself constitute a credit fed which to me is. pretty extraordinary but this whole cult whole thing calls it to question these contracts a real contract or basically just these fake contracts like part of kin villages and that's what p.s.u. it's all right now does an insurance product an insurance contract is put in place and in this case it's 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 sheet it is very at these various banks now what you're 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 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 detroit 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 a credit default swap which has been proven to be a theory it doesn't exist life masters whom vented them is obviously a terrorist a financial terrorist and the great people are suffering austerity for this experimentation for it 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 fatwa absolute terms 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 fence what we call general

merchantability in other words a product has to be fit for purpose well there's no way this contract with fear. and if you actually went to any insurance regulator and explain to them what had happened here that basically this contract didn'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 or not take 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 swinging whatever actually voted to say that they had to be due credit prevent so at least we know one thing's for certain their product might be fraudulent but the chinese walls within people are walls of steel and separate everybody was hard let's 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 the 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 central 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 close why were we beating around the bush task. we don't need the rather poor yeah we are getting on of course because everyone's talking about corn aforethought in terms of whether or not a legitimate product ever it's not fraud people are suffering austerity embrace they're dying there's a whole cost inherently to play throughout the entire global olivares i think the

fundamental thing here is that you're absolutely correct 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 older 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 sick it is to as you correctly say start the greek people get the money to pay back a bit 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 devil ovals 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 past that the troika proposed there at minus six this year they could see it there about square and then after that it perfect unity

they grow at four or five percent could somebody explain to me the math underlying that we now see also a fundamental breakdown in democracy i mean do you see what's happening in spain the spanish government has come down and said look you know this you know this deficit reduction he's working kids so we want a bit of rope here so we can actually not cut his aggressively and the moment that happens we hear out of belief in paris and brussels perhaps we ought to get a technocratic government in portugal to do what we want this a fundamental break out here a democracy and i think that is where the real pressure is going to come these protests are going to start is 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 dog with a tricks with a nazi flag i don't think that's good for europe long 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 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 france can do certain things basically it can match savers and borrowers it can provide payment systems could provide a few that's pretty much it but the economist god bless their hearts and souls effectively have to side 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 is bad we should allow these people to do that and the economist had the absolute total gold to say this but it doesn't matter if a few people get it because you know there's a few tough products out there but the cost of progress but the most egregious part about this is 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 is just massive in the financial sense we have central bank balance sheets which have gone for 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 anywhere they can run the economy and then they have the gall to say well actually you know it's still good to the point is there also never try to quantify one benefit and i actually with paul volcker here who invoke it said the i. only financial innovation worth a damn was the automatic teller machine and the way we going with currencies since when you put your card at the a.t.m. you won't be able to drive any money but i sense that little blog idea 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

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 i get 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 this was apple 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 censor their center here for 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

rent seeking behavior of the financial institutions and they need to address that and nobody but nobody in beit stream media or politics wants to address that that's what needs to be addressed all right us 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 all right 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 up to us he's written a book extreme money you must read it you can send an e-mail at kaiser report r.t. t.v. or you can follow me on twitter until next time x. guys are saying bye. you know. sometimes you see a story and it seems so or like you think you understand it and then he glimpse something else and you hear or see some other part of it and realized everything you thought you don't know i'm sorry welcome to the big picture. much.

if. any believe me to get. me. to meet. some of the folks.