good afternoon and welcome to capital account i'm lauren lister here in washington d.c. and here are your headlines for march ninth two thousand and twelve u.s. unemployment remained at eight point three percent it's being touted as sturdy because it was unchanged that's by mainstream media headlines of course but with more than half of those jobs added deemed low paying work by analysts and more than a happening the professional services jobs added been temporary ones is this so-called recovery built on makes donald's jobs and piecemeal work i'll talk about it new while the u.s. deficit is expected to hit a record all time high in february will break take a break from the eurozone crisis to talk about the u.s.

for a minute but not a break entirely because greece got more than eighty five percent of private sector bondholders voluntarily on board for the largest debt restructuring in history the greek government will use collective action clauses to push that number up to ninety five percent which if you're wondering works a little like this. should we. a little money. which means private bond holders won't be able to refuse the deal they'll be forced to swap their bonds so will c.d.'s be trigger who's making this decision exactly and what president does this deal set for the rest of europe and after going bankrupt and thus far it looks like taking more than a billion dollars in customer money that remains missing when i went down and the lowball executives could still get several hundred thousand dollar budget this is.

how it is not even possible we're going to talk about it let's get to today's capital account. so when you were in the u.s. unemployment rate did not change it's still it eight point three percent according to government figures that came out today this is solid news for the mainstream media and for president obama and his photo op earlier but here is the good news. we just both know that last more than. two hundred thirty three thousand private sector jobs. however as analyst david ater of c.r.t. acquitted by. about one hundred sixty thousand of those private jobs which is more than half are low paying work and per b.l.s.

of the eighty two thousand professional and business services jobs added more than half of those forty five thousand were temporary the number of part time workers they didn't change and remember these are no part time workers because they want to be part time workers it's because they can't find more work that's stuck eight eight million people so that is for people who are looking for a better job then i guess mickey d's types jobs or full time work it seems good news though for one industry. yes. i'm talking about guns gun makers smith and wesson stock with a twenty three percent this morning near three year highs this is after the gun maker reportedly hiked its full year sales forecast. i are on a higher order backlog strong demand for guns and rifles temp workers i don't know

getting prepared for the worst for the zombie a car pocalypse we've been talking about lately and speaking of zombie apocalypse all of this amounts to less tax money for the u.s. government to take in while it's still spend spend spend and in fact the amount of this spending and lack of money coming in has amounted to the largest monthly deficit or in history for february that's according to c.d.o. projections there's more we're going to get to a beloved karl denninger and here he is trader and author of this book the leverage how cheap money will destroy the world and coral i know you're going to have strong opinions on this so thanks for being on the show this friday let's get straight to this c.d.o. report that says they agree was the worst month ever for the u.s. deficit the highest or i guess lowest however you want to look at it. before this streak which has been forty one months of deficits the longest streak ever was

eleven months so another record there it looks like how can people talk about an economic recovery as we're hearing on the mainstream media and from some policymakers when you have this kind of a budget deficit issue you can't what you have to do is to g.d.p. divided into twelve because there are twelve months and then look at the deficit given months is a slice of g.d.p. and when you do that what you're really looking at is false to me if the government is generating board borrowing money and study it is just what you go into the store i mean well you don't have in your credit cards. early it makes the guy who builds t.v.'s or cars or whatever. but in the long run it leads to playoffs unemployment destruction of the current purchasing power and we put it this now as as you've noted for the better part of four years we're still doing it we started with the basics got in trouble and we're still just really trying to cracow asset bubbles and having some success in the stock market really the world's speaking of asset

bubbles and credit card purchases let's talk about u.s. household credit card purchases because another number that came out from the federal reserve shows that u.s. households increased their debt for the first time since before lehman brothers collapsed cents things were really really bad now it's up twenty five percent which i guess doesn't sound like a lot that was for the fourth quarter annualized but i don't know is this a good thing that people are charging up the credit cards again or is this just perpetuating the same problem. well they're not charging a credit card so i do a series on third report every month when it comes out and that's to gene and gene release and the place that it did has been showing up and has been skyrocketing student loans and when it comes to credit cards it's been a social but last year there abouts just last month it was actually down very slightly the problem with charging off student loans is that they seem to be the last sucker that's left you can't me people who run up credit for these things

we're doing use essentially hosing our young people who are you just don't have the life experience to realize what they're signing up or it's terrible thing but it is currently close to a trillion dollars yeah worth of debt that has been loaded onto the backs of our young people yeah when they get out of that school that they're taking out all this debt for not a lot of jobs for them because we know that youth unemployment is high which brings me to the other forms of employment that we do theologic have jobs and this last job report we got created some analysts saying that the private sector jobs that were created a whole lot of those are low paying jobs so when we look at the deficit and we look at the kind of jobs that are being created it doesn't seem like the numbers add up to me karl and that how we're going to get out of this math that's both for unemployment and the deficit. they don't and that's where the real problem resides we have a labor participation rate that barely moves the west wants a lot of data all that much of war this morning when the release came out we have

a large number of people who cheat back into the workforce in the problem is that when you look at the actual rate of job increase compared to the increase in the population you find that we have really created any jobs at all remember that population in the country goes up if we bought this well and so you have to create enough jobs every month in order to covertly increase in the working age population we're not and what is that number again is it still what is that to in order to just account for a population growth a new people they're entering the workforce it's a little over two hundred thousand monthly so when we look at a. change the labor participation rate ticked up a couple turns people into dense it all went up but in fact it has been for old since purposes of last year's it still is it should be were last year we ticked up a little bit too so there's been no real movement of sorts and yet that makes headlines the anger and a little increase in the participation number range that's been something that i've seen in the mainstream which is interesting because they're saying it's flat let's

talk about the banks though because he did mention them and another report came out from the g.a.o. yesterday which was very insightful car let's take a look at this because i want to pull out the exact line that was the most interesting to me if we can bring that up because it said as of january thirty first two thousand and twelve three hundred forty one institutions had accidents c p p excuse me and this is basically the part of tarp where most of the banks got their bailout money and about seven hundred participants now. i don't half of these guys made that c.p.p. repaying with funds from other federal programs and aside from that there's more the number of institutions missing scheduled dividend or interest payments had also an. chris i'm really curious about though the fact that banks have been paying back this that's money that they owe with money from other federal programs which really get to this issue of karl how can we know just how much money has been diverted

from u.s. taxpayers like you and i to the financial system it's a tremendous amount and that's where the problem is if you look at where the issue began and it was of course the more interest if you look at the decrease in mortgage credit outstanding on the folks the one when dismissed started i said we had about three trillion dollars worth of damage to take an area in fact we've taken about a fifth of it here and the reason the banks are still in operation is because they first took bailouts and then they'd managed to find ways to shift in order to allegedly repay it but in fact they didn't really repay it they just took a twenty dollars bill out of pocket for it differ on it so you know which party dollars really good or rich or. this is a shell game it's been going on. for quite some time but when you look at the total debt they're sure what you see is that if you militia is all showing up now in the federal government and so you have to look at this is a systemic issue it is no one back up we are not recent faster than we're

increasing g.d.p. which is how we got into this mess in the first place and we not change what we're doing we have not changed what we're doing and yet going back to tarp and the government bailouts and you say that all of this money is just getting saddled on to the government that we still hear the talking point that the government made money on target here at apple and the mainstream media once i want to play one of our favorite sound byte for you kyra. do you know that taxpayers actually made money on the wall street bailout because the news they may not t.m. but they did on the last report about how does that make you feel any differently than yours. if i were right in my culture. if you were right sure but if he did his research there is plenty of information it shows about wrong so how is that still the conventional wisdom if we could just you know kind of laugh about this for a second well you can't tell people the truth about things like this they want your . you out of office they most certainly won't watch it when you're in the chain or

these particular institutions because we're is the choice of common street media he does not really notice that you wrote but you know that you know the truth what else is there to say yeah that's all you have to read i'd wish that that was blasted all over headlines and that was brought to the occupy wall street protesters instead of be hammering them for not knowing that the government made money on tarp according to phony reports but i do want to stay on the banks for a second because switching gears just slightly we do have this news on greece that they got the private sector to commit what they needed to to the bond agreement but they are going to be able to trigger this collection at collective action because cacs whatever stand for sorry probably to get out exactly right but basically it's going to be able to force about ninety five percent participation in this is expected to trigger a credit event triggering c.d.'s which the i.s.d.n. has not decided on yet my question to you on the i asked a voting committee are big banks like j.p.

morgan goldman sachs firms like pimco i'm just curious what impact that has a bear voting. my sis of i understand that there was a report of deception in that the decision has been made to the editor and that was not unexpected you really can't say no in a situation like this where force has been applied because if you did then what you would have done is to clear that credit default swaps or focus instruments there with nothing you could go even further and say they're frauds it doesn't make any difference nobody would qualify them the day after you made such a decision so that they're going to get triggered here is a foregone conclusion the problem be columns the now you're going to shift your speculation from greece into other places that have a great deal pressure that's very similar such as portugal spain and while the credit default swaps are outstanding against greece is a few billion dollars if you see the same kind of a check run against one of these other countries in europe it's going to be an

entirely different situation because there you're talking about hundreds of billions of euros and the money just simply doesn't exist to cover it and then your honor real quick all i can call we're going to leave it there for today that break on on and talking about all of these various things all this really fantastic news on this friday that with karl denninger author and trader. oh and still ahead bonuses for m.f. global exactly that's a joke right big idea and we'll break it down with a reality check but first your closing market numbers. you just put a picture of me when i was like nine years old i like to tell the truth. i confess and i am

a total ghetto friends that i love driving hip hop music and pretty. she was kind of good but yesterday. i'm very proud of the role without she has played. oh. you know sometimes you see the story and the scene so. you think you understand it and then something else here's some other part of it and realize that everything is ok you don't know i'm sorry welcome to the big picture. what drives the world the fear mongering used by politicians who makes decisions to break through that sort of way who can you trust no one who is you know view with

a global missionary zeal where we had a state controlled capitalism is called sessions when nobody dares to ask we do our t. question more. welcome back so as i was starting to get into before the break greece's bailout is reportedly moving forward after greece did get more than eighty five percent of private sector investors to agree to the debt swap now this is again to reduce greece's debt so it could take on more debt from international lenders to address the problem of too much debt but that's for another moment today the greek government also approved using collection acton collection action causes cacs to

force more investors to take part in the swaps which is expected to bring that number up to ninety five percent of those holders now greek officials hailed the debt deal take a listen because the switches from the previous articles are true for the first time since the structure of the floor of the those are unique to the robot financial markets or is it a unique case of a global financial markets because other countries in the euro zone are saddled with too much debt and coupled with austerity unemployment not enough growth could be a big problem so what precedent does this set exactly well bestselling author felipe bagus is here to help figure that out he's author of this book tragedy of the euro and he is here to tell us how the tragedy is impacting us today thanks for coming on to the show welcome back. and you are great to have on because

you are a german economist you're sitting in spain you're at the heart of where this is all really going on so before i get to what precedent this sets for greece for other countries as i just mentioned we do know that the e.c.b. has been doing quite a lot so that the government and banks can have more time to figure out the situation in other countries as a result we've seen its balance sheet explode and we're often very critical of the fed's balance sheet on this show but i want to bring up the e.c.b. because it's actually increased very very much and it's expanded more than the feds has in the past three to four years how large is this to you. but it's. just. and. that is. it is actually backed by the very best by loans to its own governments and banks yeah and just to give our viewers a live in

a little bit more context if i could bring up a chart that shows what the balance sheet equals as far is portion of g.d.p. it's quite staggering it's a third of g.d.p. compared to the federal reserve's balance sheet which is nineteen percent of u.s. g.d.p. the bank of england which is twenty one percent and the bank of japan's which is thirty percent but moving on from that i want to look at the greek deal because in a report from the think open europe in europe they said that at the start of this year thirty six percent of greece's debt was held by taxpayer backed institution it's by two thousand and fifteen after this deal has gone through that sure could increase to as much as eighty five per cent so let's go through the scenarios does this mean that this is going to amount to a lot more political and economic strife in the euro zone as we see taxpayers responsible for all of this debt and greece could have a situation that interior is even further. good grief when you.

take most. of this was on the idea to move on a little bit with the lucian that bennett maybe never lost but there would be a. one way. or silly real need are we seeing some kind of imperial europe reemerge where the core is essentially taking control of the periphery but this time not with armies they're doing it by sending in the trike and settling on with debt buying them well i think it's the other way around it's hard work. and they will look at the. explosion. very. informal

and from bailouts. be fine. but somebody didn't care of a benefit for a really long time from the periphery being able to build up credit and especially subsidizing the exports of i proposed country like germany. well if you look at it from the individual it what you really want is not to export to give away your stuff but we import if i heard somebody say sell my goods or rather father people i am exporting if i buy castro giving up importing so what's more interesting for me well i would prefer only to import and that is what the military did just consume more than the center because this is very low confidence the middle position the they have been in and they want to continue this and this can only be done by continuous transfers. from because of the very well so then how

come germany is going along with it why isn't there anything here get there see that need to get out of the euro zone well you know germans have. complex they think they have to make up for for the second world right they have been reeducated after the second world war all the political class of a couple of course has very strong in favor of this even i the ideal of ever more centralized european organization there and there was pressure by a violent state so there are many reasons why don't you has gone along with along with it of course the jumble relation would broadly not if they would be asked what they are not what other pressing because i think the last time we talked you thought that the german population was still on board for all of these solutions and i think the sentiment has changed. yeah the sentiment is. changing. but the

problem is that never. established but it's beyond the scope sample strongly support europe but it's domes which have been the first to you should have used then they would have said no and that's i mean they would say no to the example well and that's interesting because that's an issue you have from germany to countries like italy and greece where technocrats have been put in to impose these measures such as austerity and a lot of people have blamed the problems that these countries are experiencing economically on austerity and this vicious cycle but at the same time is the one component of this that you need the private sector to invest again and don't they need to feel like they're about bought him in order for them to invest again and when that involves liquidating more of the debt and i just need a quick answer there please is. there something and that the ford would be the best answer for for greece or for more countries. i would recommend

all of. governments to. actually all of them to just to just liquidate all the debt yes and probably no one would lend them any more. so and there you go start from ground zero start from scratch thanks so much for being on the show and bringing us your perspective from spain that was the lead author and our best selling author i should say and professor. ok it's friday which usually means viewer feedback but today there was a story that caught our eye and we could not over look at something to get you

infuriated before the weekend it sorry but it is mandatory ok m.f. global is at stake here john correspondence for him remember that went belly up becoming the eighth largest bankruptcy in the u.s. with a reported one point six billion dollars in customer money still missing and it's allegations it was stolen by the firm investigations of course are ongoing we have been reporting on it a bunch and will continue to but what do you know that deal for customers not a bad deal for exacts look at this headline and as global still set to pay bonuses three top executives of m.f. global holdings when it collapsed could get bonuses of as much as several hundred thousand dollars each under a plan by a trustee overseeing the securities firms bankruptcy case people familiar with the matter said come on you have got to be kidding me ok who are these people

the c.e.o. the finance chief the general counsel i think we have pictures if you want to see them but they don't but you can google and they've been on the board helping the guy in charge of unwinding m.f. global maximize payouts for creditors ok that's what they're getting rewarded for you know creditors banks like j.p. morgan who have made out pretty well in this bankruptcy as opposed to the customers who can't get their money back but the thing is this is all too familiar we have seen this before let's look back. ai g. bonuses outrageous but legal we've seen this before paled out approximately one hundred eighty billion dollars worth of taxpayer money then they gave out a billion dollars in bonuses including four hundred fifty million bucks to employees and the very division that was largely responsible for driving the company into the ground they were the ones that wrote insurance that could never be paid you could call it fake and to give an example joe cassano who was in charge of

it all of that division pocketed two hundred eighty million dollars in cash and an additional thirty four million and bonuses under a retirement agreement marked confidential because on also got a reported one million dollar a month consulting fee now i g.'s subsequently cut off those payments but still walked away with more than three hundred fifteen million dollars a fourteen in media reports and government documents the fact that they had him on retainer for a million dollars a month after the collapse was probably because he knew where all the bodies were buried which is out rageous since he helped to put them there because this is what we see people when they're criminals they get paid off when you're a customer you get screwed you're a sucker so when is this going to stop we don't know but as far as i'm a global goes we're going to talk more about this with futures and options industry better and more in the lead next week he's been investigating m.f. global so be sure to stay tuned for him amongst a lineup of other great fantastic guests but for now that's all we have time for

that's it for our show thank you so much for tuning in do not forget to follow me on twitter out lauren lyster give us feedback on the show at youtube dot com slash capital account but for now from everyone here at the show happy friday thanks for watching have a great weekend and a great night. culture is that so much a commercial comes on it comes over here is the republican party going along just march to november is very likely former massachusetts governor mitt romney will eventually capture the. download the official t. up location on the phone called touch from the choose ops to. life

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