it's of the doubt however i totally disagree i don't even think the party began. we are still waiting for the actual revolution to happen. if you just joined us for a while mark marty and i for must get with you twenty four hours a day top stories now. coming grips the u.k. ahead of a possible tanker driver strike and with fuel costs escalating london paris and washington consider releasing oil reserves to push down prices. tens of thousands to just as across spain as workers protest against cuts and labor reforms with anger boiling over. it comes a day before the government is expected to announce more painful austerity measures . and the arab league backs a u.n.

sponsored peace plan saying it must be confronted immediately and completely. neither side in the conflict will trigger a proxy war driven from approval. to take for my money back with more news stories in full detail in half an hour from now meantime next kaiser's here with a look at the latest financial headlines showing no mercy to the men and women behind them. mascot of this is because the report got a quarter million pounds on a blow for some political influence how low number ten downing street days are 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 and areas he's in office and he

in sara all homes 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 or you can lodge your own agenda that's closer to the interest of the general population being discussed by lawmakers on live television the the other corruption of it live in the house of commons with in full color loyalty camera fraud story mill the middle post victim cameron right there actually his wife's name is samantha it was gordon brown's wife who is sarah ok they're all saying one of the central casting kind of maternal looking beefy buffalo a lot only bribe taking because non poops well max they're offering up an independent inquiry of course to examine whether he breached white hole rules by entertaining donors and whether policy had been influenced improperly. another

independent inquiry yes you can 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 but a 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 call she hears of the hotel and presumably just at the beck and call of the british call talker saying 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 billionaires and 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 emerged between bryant the former treasurer of m.f. global and john corey's sign that 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 as fear 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't occupy a particle and speed at the same time and i was actually at the location i didn't know what was happening in this location and it's impossible to make this determination they're innocent by the virtue of a scatter gram or you'll representation of my nonsensical existence as the governor and senator for money is good advice is coming out of my ears and i really quite complicated within. this recall to cater inside the real publication doesn't really

exist unless it exists what color is it were things that i don't know i'm junkers on a commuter for just going take will take you to the bathroom i don't know the difference under for control i did it doesn't matter i don't go to jail a lot because i pay i pay about the money i pay the people money i pay cab or money therefore i'm innocent i'm going to have cars i pay the money that is not at all to bated that certain whether the money is worth says that's uncertain but the fact that he uses money in bribes and pays people new bali ministration bribes is graft he's a crook that is certain. exactly so he's just standing his ground max you know he had directly ordered edith of 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

brian transferred the money from a segregated client account to the m.f. global account and then to j.p. morgan so thus delivering to her boss plausible deniability plausible deniability they famous by oliver north during the iran contra scandal that was just called the certainty principle of 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 has 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 u.s. public finance a so-called pay to play scheme in jefferson county alabama that contributed to the

biggest ever u.s. misapply bankruptcy and a federal probe that uncovered a good rating of municipal bond investment products. we could make twenty or thirty. it's an assembly lot 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 eighty's and ninety's 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 as the institutionalized market or as a d.h. player or a pocket shop on wall street as a retail oriented shop and if mr short somewhere and the moyen calls up her local s.c.c. representative and complains about the broker on wall street of fraud or over five thousand dollars being a pot of money ok then the broker is going down but where entire municipality 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 chamar and 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 all i think they provide good service i think they've been highly ethical with us yeah well 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 whores 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 to be 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 lest the first call list they feel like we're going to piggy bank you'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've given what's abroad because he's a crook and so he'll never sort of us until he does and then is to look so let's look at again we're looking to. for evidence of policy shifts thanks to these billionaires a multimillionaire is giving politicians money tree shape warrants of nations behavioral contagion junk poetry show the former president of the european central bank said last weekend that he was worried that controversial quantitative easing and other nontraditional steps that global central banks have taken since the financial crisis could be here to stay he said it might all work out we 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 cycle 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 technocrats to allocate the capital and have the allocate the capital well we know that if you're going to david cameron you give him a quarter million pounds and he'll allocate capital to you we know that in america to give jamie diamond some money under the table he'll allocate some credit to you have a perfect all or you're good for that there's some capital program for you to 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 then bernanke he delivers more muppets to you because he's saying he's going to introduce more you saying it's going to be impossible for you to make any money you market unless you give goldman sachs your money you spiking the ball but as it's called those exactly right the greg 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 uncontested now they're going to take it public for one 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 of course 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

oppenheimer or shearson early men because who put this hot i.p.o. in your account and you make instant profits so drop your lawsuit ok how planes 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 when the sudden pulling of short term credit to 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 permanent 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 an order to end communism and what if we had fear communism by financier's by the way famously did take medicare social security in her later years which is a total hypocrite and her costly doesn't make any for it concerns but what you're saying here is that what these bankers are telling you is that like two thousand and eight is. 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 as it 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 to have 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 he wants and they did in two thousand and eight with hank paulson former goldman sachs guy they'll do it in any country now does that happen in greece and happen all over europe happen in spain spain is good ready to hit a wall does is it to go out and say sign off all your assets or are you going to cut off all your money so this is a push button autocracy in the twenty first century irises ever thanks much great on the kaiser report thank you but it's all right much more coming why so stay right there. and.

see. welcome back to the kaiser reports on how to go to new york and speak with joshua ground author of this new book good good look at it backstage wall street in which job is the world about all the tricks wall street uses to convince you to act against your own financial self interest down josh welcome to the kaiser report

pozo max about the issue of brown it seems like you hired greg smith to go out there and write that letter to the new york times to help promote your book is that true yes it's very true i owe him a basket of flowers and fruits. all right speaking of grapes just brown people were shocked shocked that goldman sachs refers to his clients as the muppets despite all the wealth destruction of the past decade the 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 in the in show business you know i was i was actually pretty quick hold 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 tell all wall street talk so the 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 is kind of full of himself in thinking that everything was fine for twelve years and then all of the sudden something changed it's always been this way if you do the research in the history of wall street and main street relationships 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 touch 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 it in great smith's letter he exposed the fact that in fact mcgregor dentistry is a carney side show that's ripping you off you 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 we 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 in the fact that these six term systemic fraudsters are now in high positions in government what about this stuff just because somebody is in a quote institution we're a quote accredited investor it doesn't necessarily mean that they're 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 and of care the traditional is what's known as a suitability standard meaning the product that i sell to a customer as their 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 suitable given the investors' risk tolerance goals etc meeting i can open something like an 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 suit. ability standpoint it's a suitable investment it was a poll in two thousand and ten they asked afterward americans whether or not you know whether or not they are for their stockbroker was their fiduciary how to do sherry obligations to them ninety three percent of african-americans said yes in fact he does and they were all wrong so there's a difference between being someone who could do sherry and just being someone's

broker who's held to a 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 nights on i'm on the blogs and in the book trying to bring that out as it sounds like you're parsing words a little bit in my case i have a series had a series seven zero growth as license until it's expired and i left the business but i set out having a license and acquiring a license the the differentiation between suitability and fiduciary 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 where you're saying differentiation but the spirit of this is that you're not supposed to gallop your clients eyes out rip off their head and you know who they're not but let me get back to this point about pension funds versus doctors a paper doctor gets involved with goldman sachs broker the goldman sachs brokerages eyes out and ruins live that's the doctor's responsibility but

a pension fund manager is 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 that's true through a third party so here you have third party institutionalized fraud now this is a this is a huge problem no baxi when i really see eye to eye on that point and i think to the fact that the regulations basically state that you know it institution is on their own because. is there some order 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 expected to retire so i don't understand why there would be two different sets of protections whether

someone's a credit or institutional versus whether someone's retail so i think you and i one hundred percent agree there are you talk in the book about famous bucket shop d h blair which is a notoriety on wall street as being the inspiration almost for movies like poor little room where you have these brokers who are. participating in a classic bucket shop scandals like pumping and dumping etc out there of course when out of business but a poor pitstop like goldman sachs stays in business why is that i think there are some pretty big differences between the the wire house firms and the been 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 and made it harder 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 to 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 firms i don't know that you can really say that they're the exact same thing or let me give you five words that will tell me that resonates with you and that it and forget it ring a bell yes all right so here you know the carry over the counter stock where the. the spread between the pin in the ask is not reported as a commission you're taking down stock of 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 like mean people out now how different they would look like i said i'm making a mark directives on both the buyer and the seller i'm going to pack in a ten percent credit to my firm and that they would from when you start when you're greece her pension account or summer tour person or neutral point you're down from

day one how is that different what is late like i'm not in jail back she got that i haven't really looked at the way the the the institutional side is trading in amongst 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 that the individual who's 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 the 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 reform to 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 of josh absolutely massive think you've nailed it in your next series seven almanacs i drop 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're taking the mortgage than and i think you absolutely nailed it 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 talking about the new

hot leave of social networking sites like groupon and facebook's coming down the pike 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 don't get the phone call that says hey mr jones you've got this social networking stock it's hot as a pistol there's one thing that i think everyone should be aware of and i'll 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 what in reality what they're really buying is shares of a thaw and that own stock that may or may made 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 think 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 lot i 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 is a great example all right enough the book is called backstage wall street joshua brown is the author he's the reform program 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 want to send me an e-mail please do so at kaiser reported r t t v are you until next time ask others i shall.