good afternoon and welcome to capital account i'm lauren lyster here in washington d.c. these are your headlines for march twenty eighth two thousand and twelve to europe where spain is more likely to be headed for a troika debt restructuring that's what a citi group analysis is saying at least now we've talked a lot about who loses and what our guest calls iraq olives the red you middleton is back from traveling the world and he found some places that stand to cash and he'll reveal the pockets of optimism. the world is an island paradise were and proceeded to the opportunity can be found. at the head will give you the

details and an apple nation you could say we live in one half of all u.s. households own at least one apple product that's according to a c m d c's survey what was so much focus on apple not just by consumers but markets in general are people missing the bigger tech make sure we separate way from the herd we ask you to as well and look at the bigger picture and what this means for entrepreneurs meanwhile get your popcorn or maybe a stiff drink and most global witnesses were back on the hill today reportedly with evidence showing some of the firm's employees were aware of the shortfall in customer accounts days before the firm imploded those star witness edith o'brien did this. i need advice and counsel plays a part. based on constitutional rights and then actually arguably more valuable than what anyone else had to say will tell you when let's get to today's

capital account. now before i get to our guest today let me just give you a repack out of this m.f. global hearing because it's going on right now on the hill when we went on air with the house financial services oversight committee and executives from m.f. global who basically are saying nothing you saw eat at the brian the assistant treasurer plead the fifth which was actually more valuable as one lawmaker even said than what other m.f. global executives were saying which was basically oh yeah it's bad that the money of customers is missing we know that's wrong but wasn't my responsibility i don't remember anything suddenly they all have amnesia this is the c.f.o.

the general counsel the another executive as well one lawmaker said it reminded him of hearings back in the day when he had enron executives in front of him so tomorrow on the show we will have a founding member of the commodity customer coalition and the global customer also a fund manager who saw his account they prize ok he's one of the victims and he was consulting with congress on the hearing he'll be here to brief us tomorrow hopefully he will have a lot more valuable insight to give us that any of the executives claimed to have there before congress today now moving on let's get to today let's step away from the herd to see what everyone may be missing from apple cheerleaders to euro crisis doomsdayers because the research comment from citigroup chief economist smells trouble for spain says reportedly the risk of a spanish debt restructuring is higher now than it's been since the beginning of

the crisis and that spain looks like a target of some kind of troika program this year that's what they're predicting now spain is the fifth largest country economy in europe so obviously a commensurate concern and on the ground not only can we expect a general strike in the country on thursday protesting high and unemployment and changes to labor laws reportedly. a look what else national sex strike you'll see that every day spain's high class hookers refused to sleep with bankers until they open up credit lines to cash strapped families wow talk about hitting all sectors now europe's crisis spells doom and gloom for many countries citizens investors a lot of which we've covered on this show quite frequently now while we focus a lot on the damage let's not forget there may be some bright spots ok and leave it to contrary and bad ass reggie middleton to find them reggie middleton of course

is entrepreneurial investor he's also back from aboud dobby with some hope for us so reggie you come back not only with good stories but with hope which is something that we don't get to talk about a lot on this show every day so let's step away from that kind of europe doom and gloom scenario which we've talked a lot about because you're back from your trip and you say that hey you know i'll be jobby the u.a.e. is uniquely positioned to take advantage of some of this euro doom and gloom how and why. well there are two sides to every trade i'm still i wouldn't call a doom and gloom perspective it's not a reality you know you thought the air should spread from the combat down their point as it is those here those who are alleging or sitting in bed. and it is sort of this the such as myself is the doom and gloom i expect support be thrown in the air that would keep their filth you know for five minutes but as a book when it's down. think of it as a treat when there's

a significant loss to be taken as a game on the other side of the trait to expect significant losses to be taken in the city back there and this is in full agreement with my perspective you know spain has it's come up it's coming. closer bill so we can it's right with performing overpraise that's it's not about the market etc and that's just a question of us being problems. but in cities such as a country such as spain greece portugal italy etc they do have significant assets of value that they will most likely have to consider selling off the problem is usually we have a significant slide a lot of players around the same row but those players who have some diversification i'm now hooked into the same economic cycle as the profit you nations have the opportunity to take advantage and you can see a shifting of the guard. abu dhabi and some of the arab nations are perfect

examples where their fortunes are not necessarily tied to the boom and bust because their pockets credit bubbles and set up. as these nations get in trouble and especially in our socialist nations work force and they go about their banks over there which. toxic assets. i would suggest was from my actual clients to take a look at buying assets off. what is normally what has been done in the past but the u.s. crisis is they invested directly into the banks i'm not a big going to banking industry right now because of the bank in the streets being cleaned up i love the players said allowed the banks to collapse are still running the banks with the same employees in the same asset so you have some of the problem but the banks tend to get skater sprains significant have a very distinct human person or two if you take a look at wall street not too far from where i am now. they hire and peaks during

bubbles and they fire and drove through and blooms with relatively little planning so if you could take advantage that mentality but he couldn't trouble i mean start selling off assets in lieu of cutting bonuses significantly or cutting. compensation yeah you can take advantage of that mentality i get a good opportunity there's a better. ok and reggie before we move away from abu dhabi which obviously you touched upon you were just there i got a great photo of you in front of some amazing looking palace if we can bring that up and show or our viewers some sure they will appreciate it so just you know we had a guest on the show yesterday who had just been to dubai both before the bust and after it and said that the general trend though is that the region is moving up enough that it's on the expanse you're just back give us some insight give us some juicy tidbits i mean gold toilet seats investment opportunities whatever take us

there to your fact finding mission. for whatever but. for that we can have that was there. is an economic engine of the. city. though rich region of the u.a.e. and. to be able to buy their credit real estate bust and. commercial real estate building as was much of the world became sort of. dubai has a lot of economic activity most of the major u.s. corporations have. many of the european corporations as well and the way that. they have partnerships where you have to proceed with local companies in order to do business which is and which you may look at companies that do some diversification but do but it doesn't have to be you boil the petro dollar reserves that. would be more. rounded

city. petrodollars. profit the most from the potential bust in europe in the e.u. and potentially even china. still i know what their plans to china story that they somehow took the banks to lend. their way out of the bust what they did was they created a credit bubble with a graphic novel from so the united states just a few years behind the curve ok so you think it's a hard landing that's coming speaking of aboud dobby and all that money and power and you pulled out a headline that all big job the royals are involved in r.b.s. talks this is of course the eighty three percent british taxpayer own banks and i'll be dobby could end up with a stake of more than a third my question is this part of a continuing trend we've seen where developed economies and their banks get so

laden with debt that they need bail out they need help they need capital and they go to some of these emerging markets for that that are more cash rich have not the foreign reserves that we've seen that with europe going to china as well. yeah well it's something that's happened to us for a look at. stanley you look at a few of the us. from asia and from the middle east i don't think the returns were. compensate for this again i would advise my clients and i actually go back. to such a place it's a cherry pick the essence. you will see more of it in the future. but yes the r.b.s. is the way both. the british taxpayer in my opinion it's. too much it and the institution is still in that position to. do much better in the.

future i just don't see it it's a good bet that if you follow the book. it was very clear over three years ago that the beats would go to before that despite that you know with. yeah so as long as we have the same old same business mentality i personally would not interest in the banks of this i mean one of the deals you care if you want to face his preferred stock yeah right ok and you know you mentioned the r.b.s. deal and getting hit by borrowers such as spain you also asked more broadly what happens when liquidity starved capital deprived over leveraged banks fail to roll over underwater mortgage get we mentioned this banish housing that continues to fall and you believe well too i just have a minute left but what do you think the impact of that is going to be. well the base case scenario. if there is a sense of. europe and the other there well it's not miles that sounds bad.

well it's a mild nuclear but it's a nuclear fallout it's a. pretty trivial primarily. the. standard bearers of the fate of the banks the banks are there with their brains and. lapsing and even bailouts and they're basically wards of the state and so in that condition real estate has to follow closely. no it's just no way around it those with capital for that are going to do deals without having. to get rich have the opportunity to cherry pick the income producing assets when the time comes that time is right now ok and that time comes when you have to look for. opportunities and not the. office before you go in a week. before bad news for some good news for others right here i want you to sit

right there when we get back i want to talk about apple but we have to go to break for a minute we'll have more thread you know ten entrepreneurial investor and also still ahead banking can be a risky business but who takes more risk exactly male or female executives will give you our two cents the first your closing market numbers. just put a picture of me when i was like nine years old through. my mistress and i am going to get a. i love rob because he is excellent and pretty. but he was kind of yesterday. i'm very proud of the role with

its place. you know sometimes you see a story and it seems so. easy to understand it and then you glimpse something else and here's some other part of it and realize that everything is. going to. charge the big picture of. what drives the world the fear mongering used by politicians who makes decisions. through who can you trust no one who is you with the global machinery see where are we heading state controlled capitalism is called sessions when nobody

dares to ask we do r t question more. are welcome that let's switch areas because we don't often get to talk about apple or a specific industry like tech but our guest has a very interesting perspective so we are going to find out more about it because half of all u.s. households own at least one apple products that's according to c.m.s. these are all america economic survey and i have to admit that we fall into that category most of us on my team we have our i phones and it's not just consumers it's investors apple is of course a darling. investors in a see a meteorite rise that seen the company's market cap move above that five hundred billion dollar mark which is

a threshold reserved for very few companies according to see if you see it's the only one that's above that threshold now but is there a catch is there something the herd is missing there always is and leave it to reggie middleton to point it out so let's bring him back in here and find out what it is so reggie you follow apple you always find that kind of missing piece that people are not looking at my question for you we get it everyone's of cessed without goal but in focusing on this is the herd missing anything or a bigger trend or maybe where should the smart money be looking now. ok well. the herd is i mean to begin with apple is a phenomenal company i mean done very well. management has executed significant very excellently and they've also managed to take advantage of what their competitors from with apple's products are the result of the previous leader industry leaders basically becoming complacent before the i pod apple was

a computer company they actually had to make up a computer if they started out as a premium product vendor and then microsoft came in they. created an operating system and opened it up to all of vendors therefore dropping margin support where software margins and that put up with a significant disadvantage when apple was seven computer for three thousand dollars soft made a comparable computing computer of similar capability for a thousand dollars over a hundred this eventually put happened to apply and bankruptcy. history steve jobs came back he created the marketing manager let me have what it was and he invented categories such as what he was going to see i part. as a the two piece. media machine he created the app store he invented retail and music retail music and we got it. videos and music he did the same thing

with i. again he took a standard product ok and he made it sexy yet he marketed very well and then he built the tech around it and same thing with i pad if you talk to a lot of users i mean many who are not tech infuses actually think that apple created the tablet computer and this is you know not just missing since one thousand nine hundred two put because microsoft was in effect on the top of this. they did not improve the product for eighteen years. the result is that i suppose it would come and they actually reduce the functionality to the product made it look sexy marketing it and with some functionality made easier to use and more about the user and the rest is history but this happens in cycles. and apple is at risk of being to complete a company despite the fact that measure it's

a good very very well remember. the crime from apple and from i.b.m. . so you're saying something take apple's crown this is the time that that could happen possibly yes if you take a look at apple is doing very well they're almost doing too well the products and across margins on i phone the roughly seventy three percent of the i pad there were about fifty six percent their margins and i pad. which is have been dropping since inception the reason is the average selling prices. but the average cost of production has been going up and at the same time significant competitions going to market if you take a look at the i pad now the most recent i pad which is a media darling is still about as capable as the most capable and put it which is that for this but still people go crazy over the i pad reggie i want to get in here because we just have a minute there's an important part of this i want to ask you about because you say the big trend is that everything is most move towards mobile device and mobile.

computing so what does that mean for entrepreneurs a lot of entrepreneurial people watch the show what's in it for them. well. in a nutshell sort of the history. in a nutshell business he writes. for the most important thing that. i would have stuff inside ok and then the next clause the paradigm shift was that of a business card and after that it was to have a website well. most of my business should be looking for and i was actually have a mobile most confusing especially most network it's something so for. just your laptop or you yourself it's a lot of people would say for yeah we've got to get that mobile app reggie i'm sorry we're out of time running up against the end of the show i gotta go i appreciate you being on you always have so much insight i need

a mobile app for my show that sounds expensive i have to look into it though thanks so much i was regimentals an entrepreneurial investor ok. all right before we go let's wrap up with the loose change i had to shannon per usual to talk about this ok women they don't seem to put up with any kind of funny business any risky business as managers in the fashion industry according to this famous portrayal you could call it. really just. point. and i actually do can tell your incompetence do not interest me to tell someone i'm not going to that girl that she sent me for the brazilian like now.

what about banking a new bank research reports as a higher proportion of female executives on bank boards leads to a more risky conduct of business authors say the main reason is that women executives tend to be significantly less experienced their male counterparts and a lack of experience drives risk taking now the biggest bank i should mention has one woman on it six person board and findings are based on an analysis of a german bank executives team from ninety four to two thousand and ten dimitri what is in their pool of women that are ruining business in the risk takers ok the number of women are so disproportionately small in this industry compared to men that i can't help but think this is just some kind of a red herring to keep them out that's saying that women take more risks so it's saying it in a bad way not in a way that it's good they're saying that they're i don't know beyond it is bad to have on your board i don't believe it though i don't know i mean it's true that some of the biggest like wolves that will just tear your face off the work on wall

street there's no question about look i'm sorry it is and you've done the work on wall street look at the no no we're going to be ripped off the taxpayers base across this country i'm pretty sure they're all men. of your head office and your wall of water well i worry about anyone ripping my head off as long as they don't rob our country and so far i haven't seen any women do that or it will look i might agree with you all right but i. find if you use a good standard in here. basically the report was written by three so that just goes to show c i don't know if that necessarily matters because i believe that anybody can execute analysis or objective reporting in a way that's probably fair i just don't believe or buy these results of a risk taking is good. but. it's reality and then women many women want her then kill everything in sight and destroy the

enemy you can have a nice story there's nothing to bring back let's move on speaking of destroying some cheaters are having their chances of cheating destroyed oh look. so you may have heard about the twenty students from long island dimitri do you know these guys because this is your neighborhood they were charged with participating in a scheme in which teenagers hired other people to take the s.a.t.'s college entrance exam for them. how incredibly easy it is to cheat the system there is absolutely no security in place whatsoever to prevent criminal impersonation like we see here from happening until tao students will have to submit their head shots in advance with their test application for the s.a.t.'s or a c.t.'s and a photo will be printed on the admission ticket it's a post to rule out cheating or you think i think i don't care because the s.a.t.'s are a joke and their bias of people first of all that if we're smart they're ready for

the racially they're racially biased the for people of different races have a hard time doing well this is because culturally they have it's made for white people and government if you think white americans there's no morally on these have no actually i didn't put the dollars people some of the most people i've met are people that did well most of these because intelligence in my view is a combination of actual intelligence over or under i don't know how you do the fraction basically you have but you have other grazing is a combination of us more your process where you think you are and you know what idiots think is that these and the well because they're smart and they deserve something sorry success is actually going to be proven in the rest of life and yes it is or means he was a good or evil person i don't care lunch. is wrong with your. bush and the war when i'll come i don't have. political rules were you think this is tell us even though you have a vote on please stop endorsing cheating on this show. honestly i just don't think that this is going to do away with the cheating i mean when i took the test it was

a giant college lecture hall there were so many people in there there's no way they're going to be able to check every and verify every single picture you say to them look at what you have to do the banks are just listening the brain is not going to do that all the entire system is built to reward why we put people out to cheat we should be encouraged he is not no no no no we use it in no way going to help. american or more ok to rob and steal ok no it's there may be no way to get ahead in america the conventional ways dimitri but i really don't think that we should stop having people aspire to change that and i think it's professorial be a sucker cheery sure it's going to course kill off and that all of us were done but it was over a number of your drivel that's it i'm just getting to me to your we love you that's all we have time for thanks for tuning in do not forget that tomorrow we will have a founding member of the commodity customer coalition also an m.f. global customer who saw his account quote unquote vaporize yeah right he is going

to recap everything that we didn't hear today and his hearing because basically executives said nothing and in the meanwhile don't forget to follow me on twitter at lauren lyster give us feedback on the show it you tube dot com slash capital account and for everyone here thanks for watching and have a great night. wealthy british soil the sun. is not on the right. market why not. 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 reports. coming to your social auntie hopefully cation your money for the one called touch from the all you choose option. life on the go. video on demand oxys minefield costs. or is this feature now in the palm of your. question. on the call get off sometimes you see a story and it seems so for lengthly you think you understand it and then you glimpse something else and you hear or see some other part of it and realize everything you thought you knew you don't know i'm tom harvey welcome to the big picture.