there is kevin owen here in moscow and i would size headlines for you at the top last eleven pm the syrian government confirms to russia it has begun carrying out the u.n. envoy for peace plan while the opposition is saying western and arab states and promising them millions of dollars to step up the fight against the regime. india's army has been shaken by a major corruption scandal involving the country's military chief it's causing a reshuffle among india's foreign defense applies which could possibly give russia now. i'm president event of signs

a new law relaxing the registration rules for political parties in russia which aims to diversify the country's political landscape. live from moscow this is art. this is the kaiser report so is that in confident and are still rupert murdoch up to sixty ranks keyser he's up to no good rupert murdoch hits out enemies all tall son right wingers rupert murdoch's news corp stands accused of running a secret unit to sabotage competitors according to fourteen thousand emails released to the australian financial review the australian communications minister stephen conroy said the allegations should be referred to the australian federal police for investigation now in response to the max and this is what rupert murdoch

tweeted and we use many different agendas but worst all tall some right wingers who still won't last century status quo with their monopoly with. rupert murdoch. you. know this is. no. joke. whew. i love colostomy bags full. back lee does sound like he's a little bit senile because of course he is responsible more than anybody else of moving especially the american political scene very far beyond right wing they've jumped the right wing shark plays he's on the phone blames the right wingers and he's like oh you created america's ultra low right psychopath and sock loser sean

hannity nightmare or he's blaming the fairy thing he created resulting in the other thing. well max recently he did receive american citizenship and we have always pointed out that america suffers from a norman bates syndrome you know norman bates himself was dressed as his mother murdering people and claiming it was his mother doing it and here's rupert murdoch looking into them we are. you know in his paranoid world he's only sees right wing sort of crazies because his audience senses audience this is what is a right wing fox news watchers are part of the old imbecile. i was. well i'm going to read some responses to him on twitter while you wash your face there and an artist anarchist voice says rupert

murdoch will kind of be asked for you spitting you're the head of a criminal syndicate and no one really cares who gives a twitter account they must be ruining the day for good rupert murdoch is like norma desmond in sunset boulevard you know complaining about the news business then go away and think of smaller there is on this little twitter account on his i phone book boom boom this is go boost. well max let's look at other situations where the person is actually fighting themselves they the entity is actually fighting itself across the world we see guys dribbling their yogurt on their face and we see them chasing their tails so the next headline wall street journal said buying sixty one percent of u.s. debt the federal reserve is propping up the entire us economy by buying sixty one percent of the government debt issued by the treasury department a trend that cannot last lawrence goodman a former treasury official said and the wall street journal he said this not only

creates a false appearance as a limitless demand for u.s. debt but also blunt any sense of urgency to reduce supersized budget deficit i want to coin a phrase right here right now go ahead max i want full credit for it but to some i want to be a page of phrases that place ok that's lucian this is an expansion of debt which is causing here in people who fear that the government's going to start monetizing the debt and in just a patient they're buying gold silver other tangibles what you're describing is the u.s. government is now getting into the mama station of selling debt. that's what people are fearing is coming through what they fear gold continues to go higher because of desolation inflation or deflation those terms are antiquated they're not applicable anymore it's not pleasure and i'm the author of those tour and when you use the term please send me five dollars each and every time you do the max if you read the

financial news or watch any financial news in america they say wow there's so much demand for us yet we're proving people believe in our country but according to the article fed intervention in the government debt market makes demand for treasury bonds appear higher than it really is as foreign creditors and other investors have fled u.s. government debt instruments are looking elsewhere until the government makes serious attempts to curb spending and narrow its keeping deficit good with notes that foreign investors like japan and china that once scooped up u.s. debt are shunning it in two thousand and nine such foreign purchases of u.s. debt amounted to six percent of g.d.p. and has since fallen by over eighty percent to a paltry point nine percent privilege of pennies to be america's little boy you know buying up all of america's debt but then the fukushima disaster they shut down all their new plants and now they've got a huge trade deficit because they have to import oil so japan actually could be the last straw to overly collapse the debt bubble and cause gold to terrible well of

course china was buying actually more than japan was so they pulled back and why coincidentally is obama saying that the u.s. military is going to expand into east asia but let's look at more of this insanity in the global markets and especially coming from the global central banks max germany launch a strategy to counter e.c.b. lars yes well of course we all know that european central bank is essentially the biggest bank germany is preparing a raft of measures to safeguard its financial system and prevent excess stimulus from the european central bank leaking into an inflationary credit boom. the e.c.b. is one trillion euro blitz of three year loans to banks has started to reignite monetary growth in germany even though the key aggregates are still collapsing in southern europe so they created all this money to help southern europe out all of that new created money went directly into germany house prices are up five point six percent because nobody wants to be in south europe pro merkel has also gone and

say she's also norman bates she's also psycho she doesn't understand about the c.c.v. situation even though germany is the big and of course all the money printing of the month as asian is causing inflation yes and also all that money printing causes any investor to say wow this system has cracked this thing has gone psycho the european monetary union is going to fall apart and in which case where do you want to be where do you want to hide all your euro's whatever you have you want to buy assets in germany which is perceived as the strongest of the european nations gold and so are up against every single currency last year and speaking of europe max we have some more insanity in the news exclusive goldman's european derivatives revenue soars yes you would have thought the last few years would have told you the best thing to do is run away from goldman sachs's derivatives but no apparently the

europeans are reading into the arms of goldman sachs goldman sachs group's first quarter earnings are expected to benefit from the increased use of derivatives by european clients seeking ways to hedge risk according to an internal report seen by reuters there's a risk against doing business with goldman sachs go especially go to a country like greece they sell faulty bonds a couple of books so they can get into the euro then they collapse then grace in other countries go to goldman sachs out of cure the problem of having dealt with goldman sachs of course the earnings are up there it's a virtuous cycle what kind of drugs are they got these great people taking well they're saying they're going there to. hedge risk time after time on the crisis report our articles have shown if you purchased some credit derivatives from goldman sachs from j.p. morgan look at the entirety of italy municipalities going broke all across italy why because they bought credit derivatives from k. p.

morgan those exploded they cost ten twenty thirty times more than they ever expected far more than those municipalities can ever earn in revenue and here they're going we're going to hedge risk and in fact you're creating risk you're inviting risk that's a fantastic point i mean because i mean this happens over and over again the banks j.p. morgan goldman sachs wall street banks they go to greece they go to europe they go to municipalities in america and they say we're going to sell you a hedging product to hedge you against risk volatility risk or market adverse conditions risk the sales of that product whether it's a classic example are sold to a thousand times greater than the underlying component of risk that they say they're protecting against to the point where they create the instability they create the collapse and of course they've done so in a way where the insurance that they've sold does not work so it didn't work in greece it didn't work in europe it didn't work in municipal it's all of america it didn't work at a i.g.

it didn't work in portfolio insurance in one thousand nine hundred seven it didn't work in the mexican peso crisis the asian financial crisis the dot com collapse the housing mortgage for part the mayor's going to america we have no idea what we're doing going through why growth of merrill lynch risk it never works but they keep going the same product over and over and over again because we're caught in this enormous cap spin of looking at them their old reflection in the mirror and saying well i could trust that guy well exactly so you know going back to the previous bit where we're saying that the buddhist bank will be able to impose counter cyclical capital buffers on lenders and use macs. prudential haircuts in the securities markets is that they're making up all this new stuff when the same the story is the same exact cons going on and on you know the better thing to do would be the simple old saying of putting these bankers in the stocks and telling them to stop you know the old fashioned so their heads are sticking through we get word from a dos and you're thinking no good at that we do stocks and both of these stocks and

tomatoes put their heads through the stock improving tomatoes and i'm max that you're not going to turn into a younger kamikaze or you are just like very well ok so returning to this goldman story max revenue out goldman's investment banking europe increased by eight percent from a year ago to four hundred seventy six million overall client driven derivatives revenue is up one hundred forty two percent year to date in europe. all of this. should be deals but max you can say all you want about goldman but everybody out there every single person in europe knows for a fact now who goldman sachs is and what they do i mean perhaps the only reason why there is this increase is that a former goldman sachs guy is the head of italy a former goldman sachs guy is the head of greece a former goldman sachs guy is the head of the e.c.b. maybe as you trust them selling to these particular entities and it would be nice

to see a breakdown on these good point friends don't let friends do business with goldman sachs and then finally max f.b.i. taught agents they could bend over suspend the law so here's this trickle down this is a something that you see over and over in the wall street markets where they believe that they can bend or suspend the law but here's the f.b.i. they caught it seemed to us that they could sometimes bend or suspend the law in their hunt for terrorists and criminals other f.b.i. instructional material discovered during a month long investigation of the f.b.i. counterterrorism training warned agents against shaking hands with asians and said arabs were prone to. jacqueline hyde temper tantrums well once again it's the norm of a syndrome so these get these ages who are allowed to break the law to pursue the bad guys and oh let's get some opium afghanistan to go chase the bad guys always do some gun running into mexico to go chase the bad guys and of course they become the bad guys they are the psychos of the way attacking them selves in the mirror

because that's what we have a norman bates debt think lation economy stacy herbert thanks so much for being on the kaiser report thank you max don't go away coming back with much more so stay there. hasn't been easy. it is to get the maximum political. material is for. journalism. we want to position. something else.

i welcome back to the kaiser report guys are time now to go to new york city and speak with reggie middleton boom bust blog dot com where you can subscribe to one of his forensic analysis of markets and companies exclusively. welcome back to the kaiser report reggie thank you very much max good to be here all right reggie first last year the fed purchased sixty one percent of the total net treasury issuance your thoughts. circular argument. to myself and i buy it out. of the demand for. significant man if i buy. see what happens if you actually allow the market price if it is able to get away

with it he was going to get away with it because the economic power in the world and that may. be he has some quarters but it does bring doubt when you have to purchase your own debt in such large amounts in order to. bring about. the low yields and. reserve policy that the fed has zero presented to the starving banks in creating significant distortions and price discovery markets bond markets. it's a market so it's a big mess and. i think if we were to swallow the medicine back in two thousand and seven two thousand and eight we could have avoided the significant price distortion which will not happen so yes one of the markets is being distorted of course is the price of oil right because as the fed is monetizing its own debt buying its own debt this is frightening people to run into places like oil because they realize

that the fed is playing an incredibly risky game correct it appears you know the price the world is going up without an apparent measure an increase in demand and when you have no increase in price without increasing demand there is something askew. or it was going to put gas in my car last night four dollars seventy five cents a gallon you know. that's excessive. makes me want to walk right by reggie where people are blaming a barack obama for the price of gas there why aren't they pointing the finger at the federal reserve the federal reserve the treasury are printing money that's debasing the value of the currency that's why the price of gas is going up now will the release of any oil from mr teacher reserve have any effect on the money printing that's going on that it was going to have an effect on the money printing i think the other way around as you said the money printing most likely has an effect on prices the release of the reserve and i'm not all expert you know just as

a disclaimer but i am very good at common sense and valuation of oil reserves will cause a trading. drop in prices temporarily but the other factors in play me because oil prices to rise again we've been through this scenario before in two thousand and eight and remember the system if you can spike in oil is what many. as a straw that broke the camel's back because the market the equity markets are correct. in general and then consequently the credit markets it's quite possible because i believe the recovery that you see in the mainstream media is a full recovery the numbers they see are growing up but if you take a look at the numbers and it just ritu out there that just means you have missed this you have a roughly fifty seventy sixty percent misses of the economic numbers that we released yesterday throughout the last week you know that's not a recovery that's actually the opposite right in going back to that two thousand or

a period when oil was i don't want forty seven ourself chorused was a instigating economic factor that caused the revolution and egypt and across the entire region so high prices stand. revolution whether it's the french revolution the egyptian revolution or most revolutions throughout history now the u.s. federal government has recently taken over much of the student loan market that market now is passed a trillion dollars according to fitch and yet more than twenty five percent of student loans are delinquent is this the next sub prime disaster. what is the next miss price credit disaster again the term so prime is a term that the mainstream media latched onto because it was easy it was convenient but you know when the mortgage market collapsed they had nothing to do with subprime and it's a problem and it was the first to go because the subprime borrows had to because finances but the reason why the market collapse was a lack of proven underwriting so it was basically giving money for free the student

loan market is this basically the same thing i want to have inflation and education pricing ok rampant inflation there's no reason for tuition costs for an aside as they have going it's not as if the quality of the quantity of education has risen in the commensurate basis with because it's so you have the inflation combined with the fact that you have i mean higher industry based lending towards those who are chasing inflated inflation combined with the fact underwriting is a joke. basically everybody wants to go against the law combined with the fact that you have ranted on the climate among youth so you comply with unemployment. with with very very slack underwriting with the pricing of the product being. sold for to be purchased shooting up like you know five crackers then it's a recipe for disaster so go the respective cause with those things so prime let's say. that credit underwriting. bubble. and bust rice cereal

bubble blowing what the whole market. greenspan era now we recently discussed ad like j.p. morgan claims number one for a government that after jefferson county the article notes that despite the role in two of the biggest scandals in the history of u.s. public finance the company is still the biggest player in municipal finance why are glorified bucket shops like j.p. morgan bank of america goldman sachs a lot of continue to operate in such a capacity. but. most have for there's not a single reason so i give you my opinion which i'm going to culture as fact but this is my pin in case somebody disagrees with me fact but you have marketing for some reason a lot of the consumers of the services of the big banks. in my opinion they should be less knowledgeable they believe that you have to be bigger to be better and that's just not the case you know if you take

a look at the research for my book i read circles around all the big banks for five years running the general tauriel expenses the logic of my research staff budget so how is it i mean to run circles around them is a conflict of interest that drives them which prevents them from performing such as the most recent new york times editorial from the employee you know make clear as i think you come up with for a while so you have. to because humans are the product of thinking that if you go to a white shoe big name investment banks will get the brunt of the. combined with the fact that these banks have to over almost all of the public companies they're no longer private partnerships so they have to go quarter by quarter they can plan years ahead of their private partnerships they have to impress court about quarter in order to outperform everybody else quarter by quarter you have to take advantage of clients it's a must if you don't take advantage of clients the only way to outperform is over the long term but outperform quarter by quarter that money that performance has to

be extracted from somewhere and if you extract it from the clients the same clients are you supposed to be serving ok in addition you have entities like j.p. morgan but to a much greater extent goldman sachs who have in total put say at least billions of dollars of capital into lobbying you know you lobby the government the government is your client you're now bonded with your client in a way that might not facilitate the best possible outcome of the transaction and i'll go and buy something from you but i love your bosses to give me a better deal so i get you to pay more for less services that catch twenty two allows for all types of financial shenanigans to happen and you know potential rating of the client such as the jefferson county view such as many of goldman sachs clients and j.p. morgan clients have found out time and time again the way to break that is to limit the effect of lobbying and limit the network effect of having so many expect

interest within government but they're not the only ones that can come out and take a look at the performance of investment banks from two thousand and seven to present it seems like they possibly could be the only ones that can opt out you know that's not communication exaggeration but hopefully i get the point across you know that needs to be more diversification of government and it needs to be a greater. acceptance of capacity from outside of the banking industry for to consist of government protests on. in terms of services for the banking industry that's right all the clients are just collateral damage while the firm is busy blowing up the economy talking about mark zuckerberg c.e.o. of facebook the company's going public hundred billion dollars or so he maintains fifty six point nine percent of the post i p o o o t m shares unprecedented your thoughts on this i.p.l. . a smart man obviously very persuasive or has

a very large one of the two but you know good for him. but what's good for him is not good for the shareholders i can see myself giving money. to a company in exchange for stock where i have no say so in what the company does with over fifty percent ownership of the voting shares he controls the company you see is that a very intelligent guy i've nothing against the man if i could i was him i'd love to have control of a multibillion dollar social networking company as well but if you go look take. ok has you ever ran a public company before you know as the ever ran a company had this before with a proven track record of success some would say yes but how does facebook does he have any competition significant competition you know it's about a focus of the most powerful internet and media companies the road going for ok if you combine all of that is it understands that we concentrate so much when one person without a successful track record now i'm not saying you need

a successor to succeed but it definitely helps to combine that with the fact that the pricing facebook is overvalued outrageously best case scenario the best case scenario possible there's to overvalue but many things about and that's the best case scenario you know goes the last time the absolute worst case scenario came to play for does come into play if something goes wrong he has he's the c.e.o. period he's also going to pass without a vote in shop so if you didn't have the grammar a marketing machine. otherwise known as goldman sachs and the rest of those that wall street aides who look at this as a simple business like a friend of yours came up and said well i want you to invest in my business but i'm going to have told us they saw what happens in the business i'll save the stock but all you get is a financial return so no say so what happens i'm competing against the most powerful companies in the world and i don't have much experience at this but you know i was going very fast you know my growth has slowed significantly up to now

and i may have one hundred billion dollars no problem here it goes right unlikely but you know with the again you know the. bigger is better. than the good people consider oh well they've created such a buzz that fundamental is a common sense of actually going by the wayside right well you know corporate governance suggest that this would be illegal as recently as twenty years ago so it shows you how the laws have changed in the past twenty years for something as blatantly illegal as this terms of corporate governance to go to go ahead all right reggie miller thanks so much for being on the kaiser report ok you're very very welcome i look forward to going back again. thanks and that's going to do it for this edition of the kaiser record with me max kaiser and stacey herbert my guest middleton oh the engine is boom bust blog dot com so honest i mean i'm pleased to report it r t v are you until next time actually.