be patient with i think a lot of foreclosure resistance and things like that i think to just seeing that apathy in fact is not dead in this country has been pretty inspiring to a lot of people to witness as this does continue jay myers and contributor for truth dot org and that's going to do it for now but for more on the stories we cover go to r.t. dot com slash usa or youtube dot com slash r t america and you can follow me on twitter at christine. good afternoon and welcome to capital account i'm lauren lyster here in washington

d.c. and these are your headlines for march sixteenth two thousand and twelve first are we seeing an emerging market for this. kind of glow in the west all first craig smith now a congressional budget office whistleblower has come out alleging she was fired for not accepting the wall street party line pressured not to be pessimistic about banking and housing outlooks it's certain to feel a little like this. there's. no. that's right. we'll see where it goes with the twenty five billion dollar mortgage settlement was states and bank shows whistleblowing can actually payoff we'll talk about it but that brings me to is there just no winning against the too big to fail banks when one judge jed rakoff rejected the f.t. two hundred eighty five million dollars settlement with citi group it was over toxic mortgage debt well it was because citigroup wasn't forced to admit liability that he rejected that will now

a federal appeals court has stopped just short of rejecting his rejection saying he overstepped his authority come on what is it gonna take to these them admissions of guilt and speaking. simply to not know where the money is or why the johnsons not been reconciled since. remember that well the end of global brokerage trustee says they know where some more the money is they want to distribute another six hundred eighty five million dollars to customers while another of the trustees had been asked by u.s. lawmakers to abort his mission to pay bonuses to m.f. global exams so just who are these trustees will explore this and more let's get to today's capital account.

where do i begin on this friday we've got whistleblowers we've got whistleblower naysayers too big to fail banks at the crux of a lot of it the question of trustees and courts regulators the congressional budget office maybe all doing their bidding least that's how it seems sometimes from the outside and we have a few people coming now from inside seeming to confirm that now the latest whistleblower comes from the nonpartisan arm of congress the c b o she alleges in the wall street journal and fully on zero hedge that she was fired for not telling the wall street lying here's an excerpt of what she says she says i was repeatedly pressured by the cvo assistant director deborah lucas to not write nor discuss issues in the banking sector and mortgage markets that might suggest weakness in

these sectors and their consequences on the economy and households now land families the senior staffer she says she wants to work around the policy framework of a v.p. for morgan stanley with analysis shared from goldman sachs to speaking of toeing the line of wall street let's switch gears to m.f. global now we have followed the john chorus line quite extensively on this show but now let's talk about this why on earth would the trustee want to pay out bonuses to executives of a firm that went bankrupt taking one point six billion dollars in customer money with it at least in the sense that money is still missing so we can just go with that burnout here to talk about that as someone from the futures industry he is a veteran of the industry has been following this very closely hot on the trail martin allin host of the uncorrelated investing show and author of his book you see here high performance managed futures and we've had him for it's nice to have you

here in washington d.c. thanks for being on the show it is too good to see you so now we have talked about the john corazon angle extensively and i talked about that. global angle with you now i want to talk about the too big to fail angle because and the global wasn't too big to fail it did fail obviously there is that too big to fail angle and that junk or zine is goldman sachs alum and very connected but there is a too big to fail angle in this story and i want us to set that up i want to play a sound bite from john course i'm talking about customer money to put it in context but back office in chicago explicitly confirm for me that the funds were properly transferred and i understood that j.p. morgan chase was satisfied since he executed billions of truly billions of dollars of traits with m.f. global. they sure did and j.p. morgan with m.f. global's the largest creditor brand the documentation i've seen is j.p.

morgan as much of a story here as m.f. global and how so well it's a fascinating angle that's for certain a j.p. morgan had a number of conflicted rules that were could still be and. cleared and settled the trades so they want to position it pretty much see everything that was going on and probably better than us in the futures industry and in the futures industry there was significant talk about what was going on and what transpired that week before the bankruptcy that is not being made transparent to us and what is that and what role do you think it can morgan has and well from what you well there are a number of angles that i think j.p. morgan is interested in for one they received a significant wire transfer but we haven't discussed is j.p. morgan's role in the bankruptcy process you know they essentially have a significant role in selecting the creditors bankruptcy trustee who my sources tell me is given the task of investigating fraud but remember there's no fraud in m.f. global we don't talk about fraud that's the unmentionable topic just like in your

intro you said the money vanished you know that many people. are telling me that well let's let's get on on the talking points with the party line of the terminology you just said something really interesting i want to get into the trustee in what way was j.p. morgan involved in the trustee is as you said tasked with the credit being responsible for the creditors louis freeh or louis freeh louis freeh the former director of the federal bureau of investigation essentially my sources tell me that j.p. morgan was the person who requested a louis freeh to be the creditors trustee j.p. morgan is essentially operating in the. creditors committee why what right is j.p. morgan i have to select the bankruptcy trustee in this in a case like this. well they've been through a number of bankruptcies don't forget so this isn't their first rodeo the lehman bankruptcy i mean j.p. morgan in the lehman bankruptcy i'm told essentially went in and took seven billion

dollars out of the lehman the states and then they had to come it out and with lawsuits to get the money back and that's essentially what's happened here you know money has been taken out of customer segregated accounts under what many people including myself in this industry say are questionable circumstances question will be under the shadow of a doubt and for people to say that there is not a fraud investigation ongoing i just don't get it at all it's not about what you think that's about ok well if fraud is investigated and fraud is determined here's the key customers have the priority rights they should have had ok because right now the way this bankruptcy is being handled creditors have the priority they're on equal footing and how the bankruptcy process started it was just phenomenal it should have been a chapter seven bankruptcy in my opinion written into the bankruptcy code is chapter seven provisions for a brokerage firm m.f.

global is a brokerage firm by all practical standards the reports they filed with the government so their brokerage firm why is this a chapter seven as opposed to a chapter eleven we're not reorganizing but what the chapter eleven allowed to have happen is top management is running the company so right now the people who have the documents that most people i've spoken to and myself included exist that clearly define who gave instructions to wire money when those instructions occurred and how this whole thing went down the those people that are managing those documents are the same people who may be and dated and something along these lines and louis freeh it according to media reports has incentivize them i think they may get bonuses. is if they turn up the most amount of money for creditors and what exactly is the incentivizing them for he's in sunrise in them and it is his legal

duty to to get the money for the creditors so he isn't son of isaac. more money to come back for the creditors and that's that's what he's assigned to put my sources tell me the department of justice has given him the title of our eyes and ears in. ok well if the department of justice is relying on louis freeh i know personally because he's a bankruptcy trustee well it hasn't officially announced by the department of justice a lawyer that i am familiar with in the situation in in the customer rights fight has an e-mail from the department of justice where he essentially complained of the department of justice about some of the obvious what he considered obvious fraudulent behavior of the partner the justice said to him you need to talk to louie freeh really just so you think louis freeh is the eyes and ears and building any kind of a fraud case against global yet he is there to get money back

for the creditors and has been appointed by j.p. morgan who stands to lose if this is found to be fraud because customers will be prioritized over them which is how the law is written the law is written so that customer segregated accounts come for us so the law says customer segregated it segregated accounts come before all else are you implying that regulators. the i guess apartment of justice by putting louis freeh and charges being eyes and ears. as well as the trust in this case are doing the bidding of the market essentially and i want to too far and i want to be a conspiracy theorist fair enough i don't either ok well you're building a case here let me preface it by saying there has been some signal. we question was active abuse by certain regulators and i've run in the great regulators to this process i've run into great congressman through this process but there was

a case where the f.c.c. apparently withheld critical disclosure documents and allowed m.f. global to float a three hundred million dollars bond offering now the reason these documents that they withheld were critical is because it identified that john corps sign apparently had set this straight up so all the risk was associated with these segregated accounts and all the reward went over to london where obviously we know the regulations my people different they're very different so are you saying the f.c.c. purposely did. i don't i can report the facts yet the facts are the these documents were received by the f.c.c. on may thirty first two thousand and eleven the facts are these time stamp a document september second which is not in accordance with their traditional policies then after they filed the documents after m.f. global floated the bonds then they went back down and took the document down and

refile stamped with the correct dates. i've submitted this information to congress i know that a number of congressmen are very concerned i have been told that there is an a c c investigation ongoing and i think i saw something alluded to that in the new york times article mark real quickly we're going to go to break in about a minute before we do because we're going to keep you i want to talk more about this he just briefly tell our audience why do we care why are you investigating that's why you're looking into this i know you've been in this industry a long time a lot of people would say what i am well i'm in this industry number one and so i think that. you know we have to defend our industry and i profit based on the success of the industry you know i'm in the industry so initially when this all came down i was the friend in the industry and defended the interests of the industry because quite frankly if if this is allowed to stand customers could lose money again this could happen again and i think it will do irreparable damage

to the commodity markets if what does occur is a lot of stuff ok well we're going to give you all we're going to get a break for just a minute but when we get back we're going to talk about the other trustee and stick on the too big to fail so we'll be right back with more with mark no len author and host of the uncorrelated investing show and also still ahead you commented were listening so am i going to respond to your comment and viewer feedback next week while you will find out just ahead but first our closing market numbers. wealthy british style sun. times.

market why not. come to. find out what's really happening to the global economy with much stronger or no holds barred look at the global financial headlines tune into cars a report on. the official. so called touch from the. video. all costs. live feeds in the palm of your lips to. call. the led mission in liquidation three lives four charges three the rangelands three lists three the studio three a

leg the old. video for your media projects a free media. the list celebs. all right welcome back we're talking about m.f. global and we're looking into a no other player in this case which is the trustee or the trustee so i mentioned earlier that and this was something we reported on prior to this the wall street journal had reported that louis freeh said that he wanted to pay out bonuses possibly to m.f. global exacts well now the senate agriculture committee sent him a letter opposing the bonuses he said this it is they said that excuse me it's difficult to understand why we would even consider pay anyone a bonus while nearly one point six billion dollars in customer money is still missing and it is absolutely outrageous to propose paying bonuses to the very

people who were responsible for the firm's operational legal and financial management at the time that the customer money disappeared mark i want to bring you back in this is marking the lead host of uncorrelated investing show a veteran of the futures commodities industry how significant is it that they wrote him this letter well i think it sends a much deeper must sons of us is that they're dissatisfied on the whole bankruptcy process is entirely questionable and people familiar with this industry and familiar with this process are just outraged do you think that this will have any teeth though because to be honest i mean i work in washington i see letters like this written all the time i see hearings all the time and nothing happens well i can't guarantee about congress and i don't you know pretend to be subject to right can tell you this i've been in some congressmen who i think are a little ridge and you know who this is affront to this effect in farmers ok so it's one thing for too big to fail to pick on a leader to pick on

a bear stearns right now they're picking on farmers and retirees included in professional investors but you know i look at senator roberts from kansas who seems to have some passion congressman posey congressman grimm these are guys that in my opinion are are stepping up their their their little it's time that we stop this. in my opinion the too big to fail banks and everything that surrounded them is putting the economy and peril if it's wall that's nothing new come on that's been going on since the financial before the financial crisis obviously gets higher and it's bigger than that because here is what's going to happen if a medical bills a lot of the standard my opinion people are going to be afraid to invest in the united states i already speak to a lot of people who feel that way as a result of m.f. global i'm sure you do as well i question to you because we're talking about the threat of some of these too big to fail banks and the actions we have seen this week a lot of whistleblowers coming out saying that i mean greg smith came out obviously

in an op ed that just made huge waves now we have this c.d.o. whistleblower coming out saying she was essentially asked to do the bidding of wall street and then dismissed when she did not you also have a backlash coming out against them and with greg smith the thing i've heard repeatedly from people on wall street in the enterprise in the business press is they'll never work on wall street again you know forget it you don't you don't talk out of you don't speak out about it is there a code of silence oh absolutely this economy look at what's happening in the some of the situation who's fighting it's individuals you know we're the major institutions in our industry or the final battle where frankly we're in a battle for our lives and there's been a cone of silence in our industry and there's been a sweep it under the right attitude and you know i think that's the you know the whole thing about too big to fail is some of the arguments you know we can't attack them because they're so critical to our economy when you know what we're headed for a debt crisis let's just face it and to be difficult entirely correlated to economic prosperity that's how wall street for the most part we need to take

a look at it and you know when too big to fail fails who's going to bail amount and you know i don't i think we need to ask that question now pro-tax person or grow country i think i can answer that i want to talk about one other aspect of this m.f. global case because there is another trustee that is i believe representing the customers right ok so this is james ok. so there's actually news out there he came out last night i believe that he's trying to get six hundred eighty five million back to customers six hundred million of it is the it is on the business down on us exchanges right he had he had a little more you have a little cushion in there ok still this whole process with the bankruptcy trustee to me is unusual what i want to bring out an unusual aspect of that according to you you have this chart that you sent me of where kind of this web of money what is it about this that you think is unnecessary or fishy. to me that charts are

ok this is trying to explain the money flow and the way i look at this these people are trying to confuse the issue this came from trustee giddens office who's allegedly working on behalf of customers if you want to show the money flow you know you could have done it with five lines five lines five there are a lot more than five lines there mark you know from m.f. global to j.p. morgan would be one of those five suits there's an inducement simple and there are a number of things he came out when when this first started he was prepping the media to assume look customers have to share customers have to get used to the idea that they might not might not come out first which i'm almost out of time i just have a minute the question becomes why because this is an argument that happens with regulation all the time which is that it starts out small and then there's all of this confusion piled onto it loopholes makes it too confusing for people to understand and at the end of the day that serves the wall street players because no one can

understand it but that is do you see this is similar i do here's the bottom line that isn't being discussed. is worth more to certain and cities dead than it was a lot and before we go who are those entities in your view i can't name this man oh come on give us one well j.p. morgan obviously there are a number of these if you look at who profits off of this global spark it's fascinating the carcass will bring you back on to talk about the carcass thank you the vultures are for now that's it with mark mellon mark millennia excuse me host and author thank you. so i say. hello and lists sixty. all right it's friday time for viewer feedback we took a little break last week but we are back because there's so much to respond to

turbo trana one said such an informative show i asked my dad when i was ten which is about thirty five years ago about why he does not invest in superannuation his answer was that they will rob you i learned very early never to trust anyone with your investments but i'm surprised how many have so much faith in their investment adviser and third party controlled investments with these wall street guys get up to you does not surprise me at all well let me just say your dad sounds very smart i wonder if only then he knew that not only could wall street be stealing from you but also the federal reserve was zero percent interest rates there's so many more levels these days speaking of that we talked this week about the ben bernanke he covered you see there on the atlantic magazine which asks if he's a hero or villain and mr jim jack noted the atlantic made a typo it should say that he visit there oh that's supposed to be here of course we thought that was very clever and we had even smith of naked capitalism on this week

talking about the greg smith no relation some of the viewers at that an assistant to sixty six said great to have even on the show you're slowly peeling the onion of banking corruption going back two hundred years in the usa i'd also suggest that there is a bigger picture at play here namely american ethics and lack thereof the us approach in all matters is one of the hedge amman a.k.a. the vampire squid protecting its power over a possible you know what we thought i was a really great point because the reality is no you can't legislate or regulate or ality or greed and that seems to be a recurring theme that you cannot get away from and so much that we cover with the banking industry and wall street and the things we've seen over the past several years and the vampire squid which is goldman sachs for anyone who's living under a rock or not watching this show regularly. it is a really interesting metaphor to the u.s. approach especially as you see u.s.

military bases spread out like tentacles to all over the globe so i have to hand it to you good metaphor there and our market said love the bank man and robbers that was a plasma graphic we put up with jamie dimon in lloyd blankfein is a man and robber when we compared their p.r. now the bottom line he said according to our of your we all know how crooked corrupted banking system is and how it's aided by paid for politicians and of course aided by the leader of the vacant cartel the federal reserve is a problem that will never be corrected until the citizens of this country demand more from their elected officials in short due to the revolving door and other issues we will always have the fox guarding the henhouse knowledge is our protection now i think it really remains to be seen how much politic titian's actually listen to citizens who lack the political capital of the bank so it's no secret and we talk about on this show all the time how powerful the banking lobby

is the top one or two in contributions to members of congress and the president no matter how much citizens demand it doesn't really seem to be getting through so we'll wait and see and out of not convinced but as for the knowledge part of your comment i do i couldn't agree more fully and i really hope that we on this show are helping you with that and i agree about how truly important it is more people need to learn and understand what is going on in the economy and finance moving on terry boule investigative journalist was on this week she's talking about her latest story about scandal in a hedge fund world money and sex and a research seven six two two said great guest and loose change which is our banter segment is that's becoming my favorite part of your show dimitri prompted me to be there is the only person on television saying the things he's saying but the rest of us are thinking lauren you of course are the show thanks for. much but could do to you all none of the dissent from nation being spewed about r t is

a working even the real news network is jealous and trying to lash out at r.t. unfortunately we need to get organized on the same team on the side of truth and try gritty and yes i am with you i would blow my whistle if it wasn't so loud i couldn't agree more now a week without greek news on our show is just not like us we have a great producer it's all over and this week we had greased the ts so we didn't really talk about the troika moving forward on the greek bailout which happened but we did see finance minister venezuela's victimized by a drive by yogurt attack there is the aftermath there and then another viewer tipped us off to this story that's pretty intriguing it also didn't get much press about another alleged attack look at this a great prosecutor pressed charges of treason and trying to destabilize the country against a known suspects on wednesday over an alleged two thousand and eight plot to overthrow the then conservative prime minister caused just kind of on this court official said the plan was hatched a war efforts by the current us government to improve energy relations with russia

and including overthrowing and even killing the premier it was not clear who was behind it now our producer it's no secret is great and he remembers hearing about this story over the summer but didn't really go anywhere but these charges have been filed now so it is kind of interesting so we'll keep our eye on it we want to throw you that great kid because it wouldn't be a good week without one but that's different and that's all we have time for thanks so much for watching the show you not forget to follow me on twitter out lauren lister give us feedback on the show at youtube dot com slash capital account because i will respond to it too next week because we have a great lineup of guests including gingold in two is an amazing guy he's over at oxford school thinking of new ideas for our globe you know share them but for now from everyone here at capital account have a great weekend it is good night. if

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