once again flared up. these are the images and seeing from the streets of canada. china operations room today. this is all to do with the twenty four hours a day top stories now is ready to gas and stun grenades me protesters across the palestinian territories at least one person has been killed on the students. remembering six demonstrators you land confiscation over thirty years ago. french police another round twenty suspected is in this in a series of raids in several cities around the country in the wake of the toulouse killings of french presidential hopefuls rand paul and immigrant told during the campaign. underscored officially backing a u.n.

sponsored peace plan for syria nato countries are still funding the rebels britain has promised to funnel additional aid to the opposition with hundreds of thousands of pounds. i'll be back with more of those stories in an hour from now in the meantime a view of some top american stories from washington with capital account. good afternoon above them to capital account i'm more in the spirit here in washington d.c. these are your headlines for march twenty ninth two thousand and twelve m.f. global's collapse has taken center stage on the hill as justice and the safety of customer money in the u.s. banking system hang in the balance so what executives have to say about how things unfolded with an unprecedented one point six billion dollars in customer money missing. i really i don't recall.

well thank goodness we have our sources we speak with the fund manager whose money was vaporized by m.f. global and has been working with customers to get it back also with lawmakers on these hearings and he has the real story for us and is it reminiscent of enron and what can we learn from the clean up of these disasters that we continue to see more and seemingly worse versions of continuing to happen also here in the u.s. after the free market seemed to say it didn't want ammonia and left over meat paying slime in its neat guess who is fighting back g o v i'm talking about the u.s. department of agriculture and the governors of five states that want to bring pink slime back to birds everywhere but you know we think let's get to today's capital account.

yesterday the m.f. global collapse took center stage on capitol hill as the threat of crony capitalism and the sanctity of customer money in u.s. markets really remains in the balance and as the unprecedented unprecedented ok disappearance loss. whatever you choose to call it of customer money one point six billion dollars the money had in segregated accounts supposed to be protected remains unexplained unaccounted for and as m.f. global executives yesterday the legal counsel c. oppose assistant treasurer came to answer eagerly anticipated questions eagerly anticipated issues what did they reveal you intend to invoke your fifth amendment

as to any question that disappeared you only subjects to the ira i was not aware of that transfer before it was made. but i was away for the majority of that week and i apologize in advance if i'm unable to add a great deal of detail will survive responsibility was to oversee the global finance function i was not responsible for and i know you weren't responsible for a rigid system apparently you weren't responsible for anything and that really sums up the tone of those executives up there and what they actually said now speaking of the lawmakers you heard from one and whether their motivation was political theater or they genuinely care i have to give them credit for a much better performance and this guy took the words right out of my mouth pretty much the entire time. how am i supposed to ask you questions if none of you apparently knew what was going on apparently no one did anything wrong but there's

a billion dollars missing that's fair enough i appreciate your consistency in having nothing to add to this discussion this hearing at the reading this this morning listen you reminded me an awful lot of hearing we had in this committee and i'm about how many years go on in one interesting comparison at the end you catch that he compared it and run it have been some time but let's work hall they day at enron. i must respectfully decline to answer on fifth amendment grounds all the questions of this committee and served very well you invoke your fifth amendment rights in response to all questions here today yes i will i respectfully decline to answer the question based on the protection afforded me under the constitution of the united states. and i know how much things change how much stays the same so what does that say about the progress in stopping these kinds of frauds in the financial system as they progress to new seemingly worse levels and with more and

more politically connected people and more consolidated power of too big to fail banks and the alumni they produce behind them to help us answer that stanley harz here he's president of heart capital management he has been involved in this in the sense that he's been in congress talking to these lawmakers he's been in and i phone bill customer that's affected a fund manager and also the founder of the commodity customer coalition that's helping customers in this case so we're really happy to have you here thanks for being on the show thank you for inviting me you know just correct on i'm one of the founders one of the part of the team many of whom have been on your program really are going to start actually thanking you in this network some of the few places on the air that has given adequate coverage to this issue most of the others are just ignoring it and i think speaking on behalf of all of us were appreciative of the work you're going to go you know thank you for that because as we were talking about before we started this interview you know this has so much bigger ramifications than just this one case which has affected so many people and you

can't discount that but this is a good set a precedent about customer money that's supposed to be protected in the banking system for everybody i mean this is just a bigger deal than i think as you said a lot of the mainstream media has has credit for and i think it's a super important story to cover for that reason let's head to it because i know you have been talking to members of congress on behalf of the customers that you are working to help in sending questions to ask gary gensler the head of the c f.t.c. that you get your wish list that sort of thing my question to you what is your sense of how much members of congress and lawmakers get this really understand what's going on and care you know well it is a complicated area there aren't that many people mostly come from. our cultural background who have worked in this specific corner of the financial industry the know much about the futures market and kind of the other side so to speak has been a pretty good job through their lawyers and leaking information etc but this is all just a confusion possibly an accident no criminality and so i think many congressmen have

kind of avoided it for that reason why i do want to thank chairman oga bauer and the members of this specific committee the house financial services committee the oversight subcommittee in particular has been the only place in congress and i would say in my opinion the only place in the whole u.s. government that seems to care about this situation about justice for customers and trying to get us restitution of our money the other branches of government including the judiciary as well as the executive branch and regulators like this you have to see have really been largely missing in action and again we appreciate what they're doing and we're trying to help them any way we can whether it's providing background information and educating them as to the nature of our futures trading and why this should never have occurred and was clearly illegal i mean the commodity exchange act is a seventy year old law that basically protects customer funds that need to be segregated. even show that clip of congressman cop a lot of what i respect and ask him for questions yesterday but at the end of the

hearing he was still saying if criminality has taken place well there's a concept in the law of the the translation from the lion is it is what it is on its face in other words the very fact that the money is missing shows that a crime took place so we should really be moving beyond that to figure out who committed it and how can we rectify the situation and recapture the money for clients right well why do you think everybody is so afraid to use words like fraud or that you heard the general counsel yesterday for m.f. global who was just bumbling over whether to call this missing money that should never have been missing that and she avoided why is everybody thought that well i think because deep down inside particularly mr. who is not some innocent country lawyer or someone who was just providing general purpose of vice cheese in my opinion probably the mastermind behind a lot of what took place the structure of the repos etc she's on the international advisory council of the c f t c she is one of the most famous derivatives and

futures attorneys in the world and her experience and connections with mr corazon goes all the way back to the time they worked together at goldman sachs whenever there was an attempt was made to restrict for example the use of customer funds repos in the kind of investments they could make if she and mr corps are on a plane or on the phone speaking with gary gensler with part shelton in order to keep the rules as they were to enable them to leverage up the bets and continue basically using our money place part of the at risk to support their bet how important you think they called a connection is oh i think i think in terms of a connection with the existing goldman sachs' company there were a number of transactions that i remember reading a report that a lot of the assets that were sold in the final days of the company were purchased by goldman so there's an involvement there i think what's more interesting in this is not proof of any kind of criminality or whatever but it is kind of an interesting coincidence that almost all the key players involved you can find

a connection back to working together at goldman sachs and that's what i mean i guess maybe facts samphire slake an accent ferber. william dudley at the fed who gave the primary dealers status j.c. flowers who hasn't been mentioned very much but he placed from what i understand for a brick or design in the role of leading m.f. global because he had an investment in m.f. global and it wasn't doing well and he thought this was a way to maybe try to energize his investment it's curious that had only just as been brought out anywhere that actually just records and remains a managing partner of j.c. flowers' company and he remains on the one that boards of his they and yet no one stopped about the conflict of interest possible dealings between those two companies etc so you find goldman everywhere and yet of course gary gensler. gary gensler had assured casey i mean how how is someone a former crony you can see who contributed to mr reelection campaign in new jersey and he's supposed to be in charge of regulating it you know a lot of the spin masters from the other side were leaking stories and the rest of the mainstream press are going to get by you guys who are on top of it that the

trail has gone cold yeah what i would say to that is if you haven't even taken the bloodhounds out of the kennel how can you say the trails want quote there's been nobody looking after what really happened behind the story again with the one exception of this committee which i'm very grateful for but they are not a court of law they can indict anyone they can't force via clawback or money to come back to us so at some point in time hopefully what we hope is that we can kind of change the investigators in a sense because of these hearings into doing what they should have been doing already five months ago which is actively pursuing this case well let's talk about if anything came out of the hearing yesterday in regard to that because we did hear a few of the executives at least say that they've been questioned by investigators or were due to be questioned by investigators do you not take that to mean that there is an active d.o.j. or f.b.i. investigation and i was in the room and listening very carefully people are well ordered up if they're not lawyers themselves like mr verver right of the very careful in what they say and how they say it and if you kind of roll back the video

or or the transcript from that. mr steenkamp said that his lawyers had been in contact with he had never personally never been questioned right was ferber's admission was going to be questionable april sixth by the d.o.j. that's right this is an event that happened on october thirty one a billion dollars goes missing and you don't you don't question the top executives in the company you know if i steal one of these chairs that we're sitting on here today i'll be in d.c. lockup in about five minutes being interrogated a billion dollars disappears and the head of a company who were clearly involved in the decisions that caused this to happen aren't interrogated to me that smacks of if not cover up a lack of desire to really get to a rapid conclusion. into this. one can attribute political motives to that because of the corps and obama connection. because of the cronyism that we talked about before without i don't have no proof of that the obama team doesn't come to me to consult on the campaign trail you know you have their presenting up to last they

would come to but i think certainly it's and it smells of a lack of desire to aggressively pursue this case and that's one of the things that's been most frustrating it's not that complicated i think congressman posey had it right yesterday when he made the casino analogy if you and i are at a casino and all my chips are growing i can't get more credit at the window of the casino i can just reach over and take your chips and use them for my bed i'd be in custody in two minutes yeah that question remains if you can if you're john karr as i'm well he may exist to just to make to remind our audience of all of those connections you have corazon who has been a bundler for obama he when he goes and testify before members of congress those were his former colleagues that because he was a member of congress you have again the goldman sachs connection you have there's sound bites have vice president biden saying when they have a problem when they're figuring out how to solve it economically they call it john corazon you know so it's really throughout this whole thing obviously we don't you know know exactly what i like but it's important biden being the genius that he is

if you look at those sound bites both obama and biden attributed the stimulus plan through to the genius idea of john but of course biden always has to go over the top if you play back those videos which are available online he calls were one of the most honest. and still ahead where did you end up global customers think their missing money is and do they stand a chance against that true big to fail interest in getting it back we'll have more with stanley harvey first their closing market numbers. well. it's technology innovation all the rest of the limits of

around rush hour we've got this huge earth covered. welcome back now as i said earlier our guest was also an m.f. global customers so he's been personally affected i asked what it's been like trying to get his money back he explained how different it's been from past bankruptcies in this industry. the firm that preceded m.f.

global was refco they went bankrupt i had an account there at the time and basically the account and all the money was seamlessly moved to another broker within a matter of twenty four hours and that's the way the system is supposed to work and so really our commodity coalition came together about a week after the bankruptcy when we were all kind of in shock and growing despair of the day because not only was nothing being done no one was even saying anything there were no pronouncements about this you have to see the c.m.e. nothing was being done the money was gone we were left with our response is wide open by the way and we were blessed with the worst of both worlds we had one hundred percent of our risk and zero percent of our equity at that point and the whole manner in which the bankruptcy was structured is in my opinion critical to our ability to get money returned to us and has really been explored a lot in these hearings but i hopefully it will be enough for me it will be we've exported a lot on this show so i don't want to spend too much time on that i do want to talk about how carson got into this position of risk in the first place and we have this

rhetoric that comes out from executives that these were these chaotic final days but were they really i want to play what janet have a colleague who was on this show her earlier this week said about her due diligence what it tells her about this cataclysmic trade decors and with involved and. even what he was long and given what he was short as stated in the march report at least when you look at what was happening during two thousand and eleven i believe that there were several days in two thousand and eleven when m.f. global was in negative equity position and there should be investigated. so it was he's saying is true that would imply that they had been short many days or more than one day in two thousand and eleven it would have possibly needed to depend a customer money other occasions and they did and maybe just this time they were caught is there any merit to that and you know i think that's exactly correct and again i've heard reports like i don't have

a smoking gun of not i'd be happy to present it you hear that they were really playing games for months in terms of intraday borrowings intricately between the broker dealer and the commodity side also different parts of the world you know when a company gets really short of cash and if they're trying to hide what's going on they'll play games like going during during into a company repos taking advantage of different time zones becoming between japanese you case with affiliates etc so believe there was probably some of that going on but again although i can't prove it there's a pattern here going back to the fact that this came out of the feb second theory that they were had already worked on a great for glass or emergency plane they knew they were they were really speeding on very very thin ice and for mr berger yesterday to say though she didn't know there was a big problem and next essential threat to the company until that weekend saturday sunday why did she hire bankruptcy attorneys on the day before on friday it appeared in ours it contracts out there it's in that it's in the documents from the

bankruptcy court and obviously she must have spoken to them even a day or two days before that they knew this was coming or that were potentially coming and speaking of hiding risk i want to talk a little bit about the reports and maturity trade was what eventually caused the demise of m.f. global i don't want to get too technical but our viewers aren't dumb they're quite smart and i want you to kind of speak to how this exactly works and in what way m.f. global and other firms that have done this in the past have used an instrument like this to high risk and therefore undertake more aggressive exactly you know i'm not an expert in this area because that's not my nature even though i've worked as a. and an executive of some some large companies in the in the agribusiness area this is not something that i would have ever complicated because contemplated because of the risk involved and because it really does involve kind of hiding what you're doing in terms of the accounting treatment of it but it's a balance sheet it's off balance sheet and that's a question to congressman have been asking at face value whether whether it's going

to continue to be off balance sheet but in essence and this goes back you can actually go back to the december fifteenth hearing and congressman's posies question some of which i helped him with. what you generally want to do in these situations is get the money to lend it to the internal repos or some other mechanism by because of what london or london financial markets are wide open to a tough occasion there's no limits on leverage so once you get the money there you can leverage it practically to infinity and john corazon being again i've never met the man but from what i've read vanity fair and elsewhere having an extremely large ego and being almost addictive in terms of his trading style wanted to get as big as he could get with almost really no trading capital you know and with global it was it was a small stodgy growth rate for him to do very good job brokerage wise but they didn't have the capital to support those kind of trades so he wound up taking a little bit of capital that they have a lot of capital that was on their books that was ours that was customer funds

moving into london leveraging up through the repos keeping it off the balance sheet and hiding it from regulators and from their accounts until about august until finra kind of caught them already in this very exposed position and you know that's in essence what happened do you think that if it's found that j.p. morgan does have this customer money there's any way that you guys can legally get it back and do you think j.p. morgan being in a position to do a lot of due diligence on a global on a global it would have had suspicions about their ability to meet with marching up a lot of due diligence is really an understatement one of the most interesting points that came out yesterday is the. they were already on the no no no debit they were on a close watch because j.p. morgan very well if they had run out of money and why and they asked for the comfort level yesterday j.p. morgan said it's an extremely rare occurrence to ask for that letter they knew that money was not money that they should be touching to pay back the j.p. morgan credit on your question from day one of the all of us had very strong

suspicions and nothing's happened since then that our money is a cheapie more than you know we were going to get it back however is to break through the safe harbor provisions of the bankruptcy code because they've already grabbed the collateral and you can do that if you show that some sort of criminality took place and there's criminality of all different flavors and varieties that we throw all through this situation and remember j.p. morgan had its hands all over m.f. global as the largest creditor also the underwriter of m.f. global's revolving credit facility their custody and it goes on and just a reminder he mentioned we hypothecation how major of a part that place you can find our breakdown of that very important term on our you tube channel we get a word of the day on it. all

right before we go let's lying down with some loose change we've got in a tree and shannon to talk about this first mcdonald's pulled away and then petitions to and what's been dubbed pink slime found in ground beef in school lunches in grocery stores went viral on the internet and then this. the maker of the meat additive known as pink slime is suspending production at all but one of its plants the ammonia treated filler came under fire and social media and so people got laid off pink slime closing down people pulling it oh but wait not everyone hates pink slime after all the u.s. department of agriculture the governors of five states are coming out supporting the company's beef products inc that makes this pink slime are going pink slime has been unfairly labeled and is actually a safe low cost way to make ground beef leaner and cheaper so my take on this

is that the free market basically decided we don't want pink slime in our meat once they knew what was in it and then the government said oh no wait we don't care what you want this is good you need this disgusting animal byproduct ammonia treated by part of product in your burgers there will that's that's the government's job the government says uncle uncle sugar says this is this is what's good for you want to help you but with the really doing is doing the bidding of large corporations ok so this is going to go from the residue with legislate with basically saying let's show off your face full of pink slime balls and other stuff that would have what's his name from the great outdoors those in the hot dogs but all in your mouth and here's a commercial and we're doing a favor so just to remind you of what's in pink slime because i actually didn't know animal by products including low grade beef trimmings from connective tissue spinal rectal intestinal material all treated with ammonia gas to kill food borne

illness that causes bacteria now this is a government who has thought people's ability to drink raw milk or distribute it but they want you to eat ammonia laden rectal tissue this is good for you because you learn good for you good stuff shannon the only thing i can say is somebody needs. where's the beef. where is the beef i don't know the figure it was in the recuperation yeah exactly ok let's move on the fourth annual summit is going on in new delhi and these are some of the largest and fastest growing emerging countries brazil russia india china south africa now they did some business they reportedly did agree to the to work on a common development bank between the five countries that something we've talked about is along the lines of the world bank some analysts are saying it could be an alternative to the world bank and i.m.f. for these countries they also signed two packs which would increase trade or

encourage trade between the nations because they're offering loans to each other and their own respective currencies so are countries trying to send the message they've had it with the dollar circumvent it and are they trying to answer this. the question is how do you bury up in a way that is like you want to do what slowly you thought it would suddenly but very politely they'll tell us your time is over so is that what they're trying to say to the dollar they say no dollars of pariah currency as michael has been told me in that interview which was a great interview on this very issue but i mean a year ago this is not a new issue for the developing world is trying to find a way to gently euthanize the dollar that sort of thing so yeah but i think people look i want people to use this we don't have it up here but the brics logo looks a lot like a marijuana plant on and i think that this is a part of a marketing campaign for the bridge hunters to make their alternative currency look cool ok so ok look at that and i'm going to go we've seen

a lot of these deals between countries to train their own currencies and i do think that there are meaningful also they take some time so you have some time to prepare took about three years for russia and china to train local currencies so there's little food for thought but that's all we have time for thanks so much for tuning in don't forget to follow me on twitter at warren lester and give us give us the scuse me feedback on the show in you tube dot com slash capital account from everyone here thank you so much for watching and have a great night. home . home.

home. mom.