world with. its technology innovations all the developments from around russia we've got the future covered. this is r.t. before we get to the kaiser report here your headlines gathering to strike tens of thousands of people in spain unite in protest against labor reforms it's just a day before the new prime minister announces a fresh round of austerity measures it's seen as the first real test for spain's leader who took office just three months ago. fuel frenzy motorists across the u.k. filling up on petrol ahead of a possible fuel tanker strike this comes as france says it's in talks with britain

and the u.s. to release oil reserves. the arab league split over how to deal with the syrian crisis but some members advocate diplomacy while others want to arm the rebels with force i mean while the syrian government and opposition are under pressure to enforce the u.n. peace plan calling for a cease fire. plus the five member bloc of the brics countries are takes on the mighty dollar and the euro in their bid to reform the global economy and the mastermind of the creation of an alternative a global reserve bank that would rival the i.m.f. and other u.s. dependent parties. next year out so you know there's just no mercy for max keiser as he takes on the latest financial stories with extreme prejudice this is art.

backscatter this is the kaiser report got a quarter billion pounds on a blow for some political influence hello number ten downing street place here max keiser you were right all along about david cameron david cameron hosted dinners for millionaire donors in downing street flat influence peddling the thing that cameron said he was against when he ran for office areas he's in office and he and sarah all hoes dinner for you the corrupt business person for a quarter million pounds and we'll put your agenda right there the house of commons and we'll debate it right there you can launch your own agenda that's closer to the interest of the general population being discussed by lawmakers on live television than the other corruption of at large in the house of commons with in full color will do camera fraud story mill bit of pause victim cameron right there actually

his wife's name is samantha it was gordon brown's wife sarah ok they're all the same one of the social casting kind of maternal looking beefy buffalo a lot alike taking because none poops well max they're offering up an independent inquiry of course to examine whether he breached the white hole rules by entertaining donors and whether policy had been influenced improperly. another independent inquiry yes a huge hit well of course they have these every few weeks. if they keep john snow and jeremy paxman over something to talk about to chat about while they're taking you know all of their how many times a day bit of number ten you know to help shape the policies of the of the government going forward is a matter for the cover of the economist magazine shows david cameron is a calls years at a hotel that presumably just after beck and call of the british called talker city

well let's move on max because we've got lots of headlines here you know they're going to spend hundreds of millions of pounds waste hundreds of millions of pounds to find out that david cameron actually did not break any rules but we're going to look at the headlines because all the facts are there for you to determine whether or not a billionaire isn't multimillionaires who are donating money to the likes of barack obama and prime minister david cameron whether or not they're influencing policy new details emerge on m.f. global but no smoking gun apparently you know there were some e-mails going back and forth that have emerged between brian the former treasurer of m.f. global and john corey sign but apparently there's no smoking gun because this is a unique weapon in the hands of politically connected and that their guns don't smoke well it's the heisenberg uncertainty principle as expressed. in the financial or sphere so that corazon can say it's impossible to determine with any

without a doubt that the money was actually here when i was actually there and you can occupy a particle and speed at the same time and i was actually a location i didn't know what was happening in this location and it's impossible to make that determination therefore i'm innocent by the virtue of a scatter graham pick or you'll representation of my nonsensical existence as the governor and senator and frost turned chief for money is no and if i say it's coming out of my ears and i reply perfectly that we're going to. health is really hypothecated inside the rehabilitation doesn't really exist unless i says as what color is it what days of i don't know i'm john corazon i can afford just going take a tinkle to the bathroom i don't know the difference i'm a frickin cook i get it doesn't matter i don't go to jail why because i pay i pay obama money i pay the people going and i take care of our money therefore i'm innocent i'm innocent because i pay the money that is not at all to bated that certain whether the money is worth says that's on certain but the fact that he's money in bribes and pays people involved ministration plods these graphs he's

a crook that is certain. exactly so he's just standing his ground max you know he had directly ordered a different brian to transfer two hundred million to j.p. morgan in london where tony blair is the international advisor of course for j.p. morgan london well of course on the former senator and governor of new jersey prior to that the former c.e.o. of goldman sachs he ordered this transfer now just basically what happened is he just o'brian transferred the money from a segregated client account to the m.f. global account and then to j.p. morgan so thus the liver into her boss' plausible deniability plausible deniability they famous by oliver north during the iran contra scandal now just called the certainty principle finance well let's move on to another headline from j.p. morgan here j.p. morgan claims number one for government debt after jefferson county so j.p. morgan has emerged from the worst financial crisis since the one nine hundred

thirty s. is the most profitable u.s. bank as parlayed crisis era loans to cities and states and a willingness to outbid other firms and local government bond auctions into becoming the top underwriter of municipal debt last year this is a turnaround they say for j.p. morgan's municipal bond department which has been marred by its involvement into the biggest scandals in the history of the us public finance a so-called pay to play scheme in jefferson county alabama that contributed to the biggest ever u.s. miscible bankruptcy and a federal probe that uncovered bid rigging of municipal bond investment products. to name two we could make a tornado or thirty. that's an assembly line of straw yes but i know you're talking to josh brown of who wrote backstage wall street and he talks about the bucket shops of the nineteen eighties and nineties who got put out of business once they were caught defrauding customers so why is it that just because these are

municipalities and so-called sophisticated. investors and treasurers why do they continue to be able to defraud over and over and over and over again but it's institutionalized it's the institutionalized market where is a d h blair or a bucket shop on wall street is a retail oriented shop and its mission is short somewhere and demoing calls up our local s.c.c. representative and complains about the broker on wall street of fraud or a five thousand dollars peanut butter money ok then that broker is going down but one time is a prouty has no sewage and people are floating in their own excrement because jamie diamond thought he needed another yacht payment then that's on the institutional desk and everything's ok they're just send cameron more money so let's also look at this quote from california treasurer bill lockyer so he was interviewed about them doing business with j.p. morgan i haven't found an investment bank that hasn't had some problem in the last three years we do business with them at all i think they provide good service i think they've been highly ethical with us jamie dimon is the leper with the most

fingers down there wall street people like doing business with them because of all the stink and horrors that rip people off twenty four seven he's got the nicest i think it's look the bertie made off investors thought he was defrauding the markets but they thought they were making he was giving them a cut so they didn't mind here he's saying well you know they might have defrauded jefferson county but those are a bunch of hicks and rednecks down there where california where we want a teeny dime is consorting guys he's not going to rip us off they just don't know what he's saying they've been highly ethical with us as far as he knows because they're on the insider list the first call list they feel like we're going to piggy bank they're going to piggyback jamie diamond's fraud we're comfortable with that they'll never turn on us because we give them money on the table because we give them a lot of bribes because he's a crook and so he'll never turn on us until he does and then it's too late so let's

look at again we're looking to. for evidence of policy shifts thanks to these billionaires and multimillionaires giving politicians money trish a warrant of nations behavioral contagion janklow tree shade of former president of the european central bank said last weekend that he is worried that controversial quantitative easing and other nontraditional steps the global central banks have taken since the financial crisis could be here to stay he said it might all work out might be able to unwind all of this but he said that the extraordinary actions will be likely be part of a new permanent regime this means that the central banks subtle planning is responsible for all capital allocation the idea of free market capitalism according to according to central bankers is no longer applicable because these economies are too screwed up they need central planners any bureaucratic paper crafts to allocate the capital and how they allocate capital well we know that if

your friend david cameron you give a quarter million pounds and he'll allocate capital to you we know that in america to give jamie diamond some money out of the table will allocate some credit you have a purple collar you're good for that there's some capital probably for you too you know this goes in line with what i'm saying is that they're influencing policy so only a week or two ago their world was shocked about greg smith's letter to the new york times claiming that goldman sachs calls its clients muppets well as soon as he said that what happens two weeks later ben bernanke he delivers more muppets to you because he's saying he's going to introduce more easing it's going to be impossible for you to make any money you market unless you give goldman sachs your money these spiking the points pour as it's called that's exactly right the craig smith letter got a little too close to goldman sachs federal reserve bank so they're going to flood the room with a lot of cash which will make a lot of people some short term gains and you know as we've talked about on the

show before taken i. p.o. initial public offering like facebook for example goldman sachs takes a huge position for fifty billion dollars illegally by the way that's an unknown contestant now they're going to take a public four hundred billion plus so all the lawsuits are going to result from greg smith they'll say look don't sue us we'll put in the guaranteed winner in your account numbers on game day one if you drop your charges that's when my peels all about having worked on wall street i myself i've done that many times hello mr jones don't sue us here paine webber or oppenheimer or shearson or lehman because we'll put this hot i.p.o. in your account and you make instant profits so drop your lawsuit ok how pins every single day that's the law as written by brokers with hot i.p.o. shares so you mentioned capital allocation so we see here the age of the shadow bank run this is from the new york times tyler cowen he says the bank run is back the modern bank run means a rush to withdraw from money market funds the disappearance of reliable collateral for overnight loans between banks with the sudden pulling of short term credit for

a troubled financial institution but these new versions are in some ways still similar to the old both reflect the desire to pull money out of an endeavor and to be first out the door and both can set off a crash so he says now we have the introduction of the term as country as bank so your nation becomes the banker of last resort but also all of these measures he's saying are also permanent from the central bank this current quantitative easing and that the central bank may end up taking over much of the allocation of capital so here you have iran's disciple alan greenspan with the help of ronald reagan who deregulated the markets in the name of iran's in order to stay and communism and what if we had fear communism by financier is by the way famously did take medicare social security in her later years which is a total hypocrite and her philosophy doesn't make any different than sense but what you're saying here is that what these bankers are telling you is that in two

thousand and eight. if they want to they can push the button and markets stop working completely because there is no price discovery there is no free market capitalism is just acid allocated by the central banks that are using that privilege to write laws to make it easier for them to become richer and to destroy the economy and that people on the street who they will characterize as terrorists if anyone objects to the max fact that their wealth is being stolen but by pushbutton autocracy this is an evolution an autocracy you just simply push a button and credit freezes pannikin says and congress will write any law you want to they did in two thousand and eight with hank paulson former goldman sachs guy they'll do it in any country now this would happen in greece will happen all over europe happen in spain spain spain ready to hit a lot of those at the bottom say sign off all your assets or you're going to cut off all your money so this is pushbutton autocracy in the twenty first century prices ever thank so much being on the kaiser court thank you all right much more coming why so stay right there.

well. technology innovation all the developments around russia we've got the future covered. welcome back to the kaiser report time now to go to new york and speak with joshua brown author of this new book he had a good look at it backstage wall street in which journos chills the world about all the tricks wall street uses to convince you to act against your own financial

self-interest el castor welcome to the kaiser report max now toshiba brown it seems like you hired greg smith to go out there and write that letter to the new york times to help promote a report is that true yes it's very true i owe him a basket of flowers and fruits. all right figure great jeff brown people were shocked shocked that goldman sachs refers to his clients as the muppets despite all the wealth destruction of the past decade but population still believes that wall street is there to help them make money of course in your book you explain why that's not the case but why what about this great smith letter do you think it's a much ado about nothing or is it going to have legs as they say in the show business you know i was i was actually pretty critical of of his of his op ed and people are somewhat confused about what the difference is between me and him because i've just written this kind of how lall wall street book so major

difference is that greg is delusional he seems to think that over the last five years something has changed so i think i think greg is kind of full of himself in thinking that everything was fine for twelve years and then all of a sudden something changed it's always been this way if you do the research in the history of wall street and main street will. lation chips which is what my book covers there's never been any difference it just becomes more or less obvious depending on the era that we're in cash a lot of times on business cards on the retail brokerage industry it'll say something like financial consultant so people expect that when they go they go to a financial professional that they are receiving some kind of consulting services so it integrates misled or he exposed the fact that in fact the brokerage industry is a carny side show that's ripping you off these make the same point in your book what about this level of fraud as it relates to the institutional side of the business

just because when you hear about municipalities better being sold junk not junk bonds but literal toxic securities from j.p. morgan goldman sachs and these towns across america are going out of business because of the bucket shop tactics that you explore in your book what about the systemic fraud and the fact that these external systemic fraudsters are now in high positions in government what about this josh just because someone is in a quote institution or a quote acquitted investor it doesn't necessarily mean that there were any snorter then an individual investor and the protections of institutional investors and a credit investor's meeting wealthy people are significantly less than they are for other people it's assumed that well this guy's which in a he's adopt the reason lawyer or he runs a pension plan for a bank don't worry about him he'll take care of himself and of course that's never the case but i think the more important point here max is that there are the fundamental conflict and problem on wall street for the average american right now

is this there are two standards of care the first band of care the traditional is what's known as a suitability standard meaning the product that i sell to a customer as they are broker or financial consultant or whatever i want to call myself does not have to be in their best interest it simply has to be so. suitable given the investors risk tolerance goals etc meeting i can of them something like in a share mutual fund with a five point seven five percent front end loaded even though it's not a good thing if i were the client's fiduciary from a suitability standpoint it's a suitable investment there was a poll in two thousand and ten they asked afterward americans whether or not you know whether or not their their stock broker was their for do sherry have a fiduciary obligation to that ninety three percent of african-american said yes in fact he does and they were all wrong so there's a difference between being someone's for do sherry and just being someone's broker

who's held to the lesser suitability standard and no one knows the difference other than people in the industry i think that's something that needs to change and i've dedicated a lot of mights on on the blogs and in the book trying to bring that out well in terms of sounds like you're parsing words a little bit in my case i had a serious seven zero growth as license and go it's expired and i left the business but i still have to have a license and in acquiring a license see the differentiation between suitability and for do sharing it within the spirit of such of the license gives you the right to be a licensed stockbroker there's a very similar although technically what you're saying differentiation but the spirit of this is that you're not supposed to gallop your client's eyes out and rip out their head and you know who's on their neck but let me get back to this point about pension funds versus doctors ok for doctor gets involved goldman sachs broker the goldman sachs broker rip his eyes out and ruined his knife that's the doctor's

responsibility but a pension fund managers managing money for other people it's a third party transaction they have no idea what's going on in a lot of times we find out that these pension managers are in cahoots with these brokers on wall street and they're ripping these people off unmercifully in a way this through through a third party so you. yes third party institutionalized fraud now this is a this is a huge problem though back when i really see eye to eye on that point and i think the fact that the regulations basically say that you know an institution is on their own because they're smarter they should know better is not really taking into account the fact that the money that the institution is managing is retail money at the end of the day if you're managing a pension fund yes you're an institution but the people whose money is with you that's individual investors money that's people that are expecting to retire so i don't understand why there would be two different sets of protections whether

someone's acquitted or institutional versus whether someone's retail so i think you and i one hundred percent agree there are you could you talk in the book about famous bucket shop d h blair which is the notoriety and loss trade as being the inspiration almost from movies like poil room where you have these brokers who are participating in classic bucket shop scandals like pumping and dumping etc they of course went out of business but a bookshop like goldman sachs stays in business now is that i think there are some pretty big differences between the the wire house firms and the penny stock comp and done for of of the ninety's what i would tell you though is that the bucket shops are still alive and well there are a lot fewer of them because the regulations have tightened the needed order for them to stay in business but they're still out there the latest things that they're doing or private placements private real estate investment trusts things that are

not opaque that can't be more market necessarily things where there's a lot of room to play around with the numbers and to have that asymmetric information differential that stuff is still going on to this day although there are less firms doing it i think there's a difference between that kind of stuff versus what you were talking about with. with the goldmans and the larger farms i don't know that you can really say that they're the exact same thing let me give you five words and tell me that resonates with you and that it and forget it ring a bell yes all right so here you have no that carried over the counter stock were they the spread between the pin the ass does not report it as a commission you're taking down stock on the over the counter desk you're putting in a dollar or two dollars on a sales credit which could be ten twenty twenty five percent of the equity and you wiping people out now how is it different then look like i say if i'm making a mark derivatives on both the buyer and the seller i'm going to pack in a ten percent credit to my firm and the day one from when you start with your

grease or a pension the cap or summer tour person or mutual fund you're down from day one how is that different wisely played by not jail back she got me on that i haven't really looked the way the the the institutional side is trading in the months themselves it's not necessarily my area i would say that though really is to just get back to my original point i think when you look at the way individuals versus institutions are treated by wall street there should not be two different standards of protection and that you and i agree and i don't understand why we assume the guy managing funds for retirees at a bank is any smarter than the individual who is accorded extra protection from the street i think everyone should be treated with the same standard of care and right now it's just not the case all right let me let me hold up a book again ok the book is called backstage wall street joshua brown is the author he's got a website called reformed broker you can follow him at twitter at reformed broker

as well and the way i would characterize this book is that it's a book of self-defense it tells you how to defend yourself against that phone call at six o'clock at night from some broker who is looking to get you into the next big thing is that a fair characterization josh absolutely max i think you nailed it you're an ex or is sat in on an x. i did. my series seven as well and i think that there is really no reason in this day and age for anyone to buy investment products from someone who is making a commission on the sale of that product that is not financial advice that is not a fiduciary role being carried out all that is is somebody selling you something that they know more about and that they are taking the more injured in and i think you absolutely dale that nobody needs to be pitched anything over the phone in a meeting at a seminar people need to defend themselves people need to read the book and understand the difference between sellers of products versus providers of advice i

just want to follow up our last conversation on the show we're talking about the new hot wave of social networking sites like groupon and facebook is coming down the pipe twitter is a big phenomenon and now we've had some some training action in those stocks groupon went public for example and so what are your thoughts currently on this sector and we only have about thirty seconds but are you still generally thoughts on the sector i mean this is typically the sector that people are going to get phone calls about they'll get that phone call that says hey mr jones it got this social networking stock it's hot as a personal there's one thing that i think everyone should be aware of and i probably write something about it right now some of the bucket shop brokerage firms that still exist have figured out a way to buy shares from twitter and facebook employees who need liquidity they're taking the shares they're bundling them in these private funds with escrow accounts

they're layering fees on top of it and these are restricted shares of stock they're selling this to people as though they're buying pre-i p.o. shares in facebook when in reality what they're really buying is shares of a thaw and that own stock that may or may need up be sold at some point it is probably the biggest scam going on right now people are cold calling investors with this thing i. everyone should be on their guard if somebody calls you up and offers pre i.p.o. shares of facebook at a discount it's a law i they don't have them they won't give them to you you are about to be screwed and i think that that's the number one thing that's going on right now with the social media companies do not trust anyone who's got something that's too good to be true facebook twitter etc was a great example all right enough the book is called backstage wall street joshua brown is the author he's a reformed broker thanks so much for being on the kaiser report thank you max all right that's going to do it for this edition of the kaiser report with me max kaiser and stacy herbert or that my guest joshua brown backstage wall street wanted

to send me an email please do so at kaiser reported r t t v r u n so next time ask as i go.