frame this comes on the heels of remarks made by secretary of defense leon panetta warning of an early an attack as early as april so should we brace should we be bracing for yet another war for you to find out if there is a follow me on twitter at liv's wall had a great night. you know sometimes you see a story and it seems so far like sleep you think you understand it and then you glimpse something else you hear or see some other part of it and realized everything you thought you knew you don't know i'm sorry welcome to the big picture .

more news today violence is once again flared up. these are the images the world has been seeing from the streets of canada. trying to corporations around the day the big. the. i am maxed out of this is because the report got a quarter million pounds you want to blow for some political influence alone number ten downing street place here max kaiser you were right all along by 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'd sarah will host 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 and you can watch 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 bit of post victim did cameron right there actually his wife's name is tim and it was gordon brown's wife who is sarah ok they're all the same one of the social casting kind of maternal looking a feed buffalo a lot of willing bride taking big list non coupes 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 a u.k.

well of course they have these every few weeks don't. 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 tons of a bit of number ten you know to help shape the policies of the of the government going forward it's not a picnic over of the economist magazine shows david cameron is a cult years at a hotel and presumably just at the beck and call of the british called talk or sing 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 in multimillionaires who are donating money to the life 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 oh it's the heisenberg uncertainty principle as expressed itself in the financial austere so that corazon can say it's impossible to determine with any without a doubt that the money was actually here when it was actually there and you can't occupy a particle and speed at the same time and i was actually at that 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 your representation of my nonsensical existence as the governor and senator and friends turn to for money is moon if i say it's coming out of my ears of i really hope that catered within. that's really i thought the catering side rehabilitation doesn't really exist in offices exist what color is and what

days and i don't know i'm junkers on a committed fraud just calling people think up to the bathroom i don't know the difference armor for conflict i do it doesn't matter i don't go to jail a lot because i pay i pay of all the money i pay the people tony i paid money therefore i'm innocent i'm going to say because i paid 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's not even private pays people in a ball administration problems is graft he's a crook that is certain. exactly so he's just standing his ground max you know he had directly ordered even if 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 signed the former senator and governor of new jersey preet prior to that the former c.e.o. of goldman sachs he ordered this transfer now just basically what happened is so 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 made famous by oliver north and iran contra scandal now just called the uncertainty 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. as 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. misapplied bankruptcy and a federal probe uncovered bid rigging of municipal bond investment products but to

name two it may have twenty or thirty. it's an assembly line of straw yes i know you're talking to josh brown of who wrote backstage wall street and he talks about the bucket charts 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 with this institutionalized for us to institutionalize market whereas a d.h. blair or a bucket shop on wall street is a retail oriented shop and its mission is short somewhere and the moyen calls up the local s.c.c. representative and complains about the broker on wall street that the fraud are a five thousand dollars in a pot of money ok and that brokers going down but we're entirely innocent prouty has no sewage and people are floating in their own excrement because jamie diamond

thought he needed another ya payment then that's on the institutional desk and everything's ok they're just sent 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 and 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 diamond 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 you say well you know they might have defrauded jefferson county but those are a bunch of hicks and rednecks down there were california where we want to have

jamie diamond sort of 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 you're going to piggyback jamie diamond's fraud recoverable with that they'll never turn on us because we give them money on the table because we give them a lot of drugs because he's a crook and so he'll never sort of 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 to shave warns of nations behavioral contagion junk poetry say the former president of the european central bank said last weekend that he is 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 is names of the central banks central 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 you need bureaucrats and technocrats to allocate the capital how do they all get the 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 if you give jamie diamond some money out of the table it's in credit so you have a perk of almah you're good for the birds there's some capital quarter 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 there wolf 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 you saying it's going to be impossible for you to make any money you market unless you give goldman sachs your money he's spiking the punch bowl as it's called that's 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 because 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 as an unknown contestant now going to take it public for one hundred billion plus so all the lawsuits that are going to result from greg smith they'll say look don't sue us we'll put in a guaranteed winner in your account one person game day one if you drop your charges that's where my pills all about having worked on wall street i myself have done that many times hello mr jones don't sue us here paine webber oppenheimer or shuras and or lehman because we'll put this hot i.p.o.

in your kill 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 and 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 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 and in order to end communism and what if we had fear communism by financier by the way famously did take medicare and 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 life in 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 asked of 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 mac the 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 thank also former goldman sachs guy they'll do it in any country now does it happen in greece will happen all over europe happen in spain spain ready to hit the wall they'll just at the bottom say sign up all your assets or are you going to cut off all your money so this is pushbutton autocracy in the twenty first century all right suzanne thank so much being on the kaiser report. all right much more coming why so stay right there. the official implication. pulled talk from the top story. on the. video.

now in the palm of your. on the call to come. mission. critical three. three. three. three. three. three. four year media project free media carty dot com. welcome back to the kaiser report time now to go to new york and speak with joshua brown author of this new book get

a good look at it backstage wall street and which journos chose the world about all the tricks wall street uses to convince you to act against your own financial self-interest now josh welcome to the kaiser report goes your max about social breakdown it seems like you hired craig 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 the spite 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 critical of all 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 book 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 themself 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 relationships which is what my goal covers there's never been any difference it just becomes more or less obvious depending on the era that we're in trash a lot of times on business cards on the retail brokerage industry it'll say something like financial consultant so people would expect that when they go they go to a financial professional that they are receiving some kind of consulting services so it it in greg smith later 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 trust because when you hear about municipalities better being sold junk not junk bonds but literal toxic securities from j.p. morgan to goldman sachs and these towns across america are going out of business because of the bucket shop tactics that you explore in your book about the systemic fraud in the fact that these six term systemic fraudsters are now in high positions in the government brought about this josh just because someone is in a quote institution or a quote accredited investor it doesn't necessarily mean that they're any snorter they had an individual investor and the protections of institutional investors and a credit investors meaning wealthy people are significantly less than they are for other people it's assumed that well this guy's which in and he's about 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 standard of care at the traditional is what's known as a suitability standard meaning a 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 suitable given the investors risk tolerance goals etc meeting i can tell them something like an a share mutual fund with a five point seven five percent front end load even though it's not a good thing if i were the clients to do sherri from a suitability standpoint it's a suitable investment it was a poll in two thousand and ten they asked awkward americans whether or not you know whether or not they're for their stock broker was their fiduciary had

a fiduciary obligation to them ninety three percent of african-american said yes and that he does and they were all wrong so there's a difference between being someone's who 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 nights on i'm on the blogs and in the book trying to bring that out but it just sounds like you're parsing words a little bit in my case i have a series had a series seven brokers license until it's expired and i left the business but i have a license and in acquiring a license see the differentiation between suitability and for do sherry it within the spirit of a subset of the license gives you the right to be a licensed stockbroker there is a very similar although technically what you're saying differentiation but the spirit of this is that you're not supposed to get out your client's eyes out rip

off their head and you know on their neck but let me get back to the point about pension funds versus doctors ok if a doctor gets involved in the government. backstroker the goldman sachs brokerages eyes out in 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 through or through a third party so here you have third party institutionalized fraud now this is a this is a huge problem no backs you and i really see eye to eye on that point and i think to the fact that the regulations stay sickly state that you know it 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 yes your 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 talk in the book about famous bucket shop d h blair which is a notoriety of austrade as being the inspiration almost for movies like boiler room where you have these brokers who are participating in a classic bucket shop scandals like pumping and dumping etc they of course went out of business but a pocket stop like goldman sachs stays in business wise that i think there are some pretty big differences between the the wire house firms and the penny stock comp and dumb firms 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 places. it's 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 farms doing it i think there's a difference between that kind of stuff versus what you're 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 all right 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 the current over the counter stock where the spread between a pin in the asp is not reported as a commission you're taking down stock on the only ten are desperate putting in a dollar or two dollars on a sales credit which could be ten twenty thirty five percent of the equity and you wiping people out now that they're going then look like i said i'm making

a mark in the relatives of the buyer and the seller i'm going to pack in a ten percent credit to my firm and that they will and from when you start when you're greece or a pension account or some retired person or mutual fund you're down from day one how is that different one is lloyd blankfein not in jail bad she got me on that i haven't really looked at the way the the the institutional side is trading in and amongst themselves it's not necessarily my area i would say that though really 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 on 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'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. well him at twitter at reformed broker as well and the way i would characterize this book is that it's a book of some of the thirds 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've nailed it in your next series seven and i'm an x i drop my series seven as well and i think that there's really no reason in this day and age for anyone to buy investment products from someone who's 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 sell you something that they know more about and that they're taking the more jaded and i think the 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 vice i just want to follow up our last conversation on the show talking about the new hot the wave 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 when 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 their 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. with escrow accounts there later in fees on top of it and these are restricted shares of stock they're selling this to people as though they're buying pretty i.p.o. shares in facebook when in reality what they're really buying is shares of a fund that own stock that may or may not 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 shares of facebook at a discount it's a law i don't have them they won't give them to you or you are about to be screwed and i think 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 i know but book is called backstage wall street journal

brown is the author he's the reform broker thanks so much for being on the kaiser report thank you max all right i'm going to do it for this edition of the kaiser report with me max kaiser and stacy herbert and i thank my guests josh around 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 maxed out as i go. through. three.

if. please please please please please please please. please please. please. please. i get plenty.