it's our thoughts they're our hair moscow and have. serious troubles truce at nationwide rallies up along with reports of one going killing as an event brokered cease fire and it's the security council set aside later on a month to send in observance. hopes of a breakthrough by breaking the silence as well as meet with iran over its nuclear program the first time in fifteen months since the sanctions on iran over

suspected nuclear weapons development which turned out not. voting for civilians being good election citizens choosing between alleged murder isn't enough for you for most of us don't have faith of candidates taking on to something entirely a criminal past. up next maxon states expose the dark secrets of the global financial district. max kaiser this is the cuz the report will fans all over the world place mats we're going to look through their eyes because check out this photo of our number one fan jasmine. ball back i think it's because we always talk about lloyd blankfein areas where we showed him and she apparently is providing some of his collateralized poop

obligations he comes once a week or twice a week and sometimes up to five hundred diapers and packages them on in the city of london jasmine's purpose collateralize ing almost the entire reserve is asian going on on wall street and in the city of london right now this is an era of peak collateral because the banks have collateral already everything that they could collateralized and then recall lateralized and again a re hypothecated it and they've done this over and over again and jasmine kept two part of the office to create the additional collateral so that lloyd blankfein and jamie diamond can float even more securitized debt based on collateral that is of course wide we see countries like spain falling greece into the gutter because there's no more collateral of worth to create more securitization to create more liquidity to keep these countries from going under so you say we need more

quantitative easing in the diaper obligation market jasmine is easing quantities of collateral into the global securitization market here's how china is looking at the world max currency war is a hot topic in china so these are photos from the china money report and if you could look at the first photo it shows four different books on currency wars are the top sellers in the. chinese bookshop the number two images dollar crash and number three is the american dream over so this is the view the perception the population of china the one that works to pay off the debts of boy blankfein little lloyd blankfein here it is also a reflection of how their actual leaders think because we have a headline here china views us as a declining power says an insider the senior leadership of the chinese government increasingly views the competition between the united states and china as a zero sum game with china the likely long range winner if the american economy and

domestic political system continue to stumble according to an influential chinese policy analyst the united states is no longer seen as that awesome nor is it trustworthy and its example to the world and admonitions to china should therefore be much discounted mr wang writes of the general view of china's leadership zero sum game and of course there is a word for the one hundred years ago or two hundred years ago mark into lism that all these countries were trying to eke out a growth based on the decline of another country it's only in modern times when we have this idea of central banking or you can have a positive sum game of infinite growth with everyone becoming rabid leslie rich without any extra nellie's or risk whatsoever but as we go back to feudalism as we go back to pre enlightenment pre neo liberalism pre monetarism creek keynesianism

we're going back to the mercantile ism well as they say they view america as not that awesome but most americans think of themselves as you say you say we invade we invade and in fact the invasion of iraq is where the chinese leadership trace the decline of america to in contrast trying to has mounting self-confidence in its own. economic and military strides particularly the closing power gap since the start of the iraq war in two thousand and three he argues america's gross domestic product was eight times as large as china's but today it is less than three times larger than america china's just not that into you. but their power shrunk it was a bridge too far it was a war too many it was a military industrial complex run amok it was the end of america well this is how

many empires end they end with imperial overreach and we see that we see the military industrial complex the prison industrial complex as not only occupy populations around the world they occupy the domestic population it costs a lot of money fifteen thousand dollars to lock somebody up in prison in america even more than that to kill somebody in an oil rich nation but the other thing i want to point to is back in two thousand and four this is a headline from february twenty seventh two thousand and four alan greenspan armed and dangerous so to go with this notion of war this financial war of course one of the biggest generals the most important generals and that was alan greenspan and the headline goes on the federal reserve chairman weird affection for adjustable rate mortgages so he went in front of the population of america he was speaking at some housing conference and he said americans should take out adjustable rate mortgages because recent research within the federal reserve suggests that many homeowners might have saved tens of thousands of dollars had they held adjustable

rate mortgages rather than fixed rate mortgages during the past decade max do past returns ever forecast what the future will hold. well this is correct and when greenspan was encouraging people to take adjustable rate mortgages this was the complete abdication of the role that the fed should be playing in the economy as an independent fed it should as some have described it take away the punchbowl when the markets get too frothy when greenspan spoke of irrational exuberance for example he did not act on his comments and he went even further by making that exuberance even more irrational as a result of the fed clearly by these statements we can say without any reservation that the fed is really no longer an independent body it is completely

been captured under the auspices of the maniacs on wall street i remember what happened with these adjustable rate mortgages that many americans went into it was something like forty fifty percent of all new mortgages after this were adjustable rate but this is where fraud entered because remember alan greenspan also encouraged fraud in the financial markets because he thought somehow it added to liquidity so that's when we came upon the term of exploding arms because remember even though interest rates continue to fall and alan greenspan there for his argument held that your interest payments should have fallen in fact what happened with the interest rate exploded after the first two years of some people's monthly mortgage payments were doubling or tripling well remember in an interview once he left office greenspan admitted that his entire philosophical approach is fine rand objectivist approach to managing the economy he said in his own words was grossly inadequate he actually said that in congress in

testimony and so why we are still preaching his methodology at this point is a test and. too short sightedness and foolishness in washington and on wall street so again we see a declining power this is how china sees it this is how little baby jasmine with sees lloyd blankfein riding the wave the tsunami wave down in of america and let's follow on this mortgage market there americans brace for next foreclosure wave mortgage servicing provider lender processing services reported in early march that u.s. foreclosure starts jumped twenty eight percent in january one big difference to the early years of the housing crisis which was dominated by american saddled with most toxic some prime products with high interest rates where banks ask for no money down or no proof of income is that today it's mostly americans with ordinary mortgages whose ability to meet payment have been hit by the hard economic times

thank you alan greenspan but getting back to what we said at the top of the show in two thousand and eight when the crisis blew up a sub prime crisis blew up in the global economy went into crisis it became obvious that the collateral use for the sub prime market the recent purchase asian market was faulty it wasn't worth even two cents on the dollar the response of wall street the response of hank paulson the response of barack obama the response of all the bankers around the world was to essentially double down and it took all that collateral that was shown to be worthless and they re collateralized it in essence a member of the fed's balance sheet went from less than a trillion to over three trillion and the tarp funds originally seven seven hundred fifty billion under hank paulson's extortion ery congress and all speech is that well over seven trillion officially twenty trillion other officially and this is all because of the attempt to really lend again the same collateral that has been

shown to be worthless to begin with well let's look at the state then of those people who are on. able to afford their mortgages so this next wave of foreclosure crisis is upon america bankruptcy costs and america's household debt crisis yes max americans are too broke to go broke a new study finds in a recent m.b.e. our working paper they found that legal in administrative costs and hit a significant number of households from filing for bankruptcy war over the number of households facing these various has doubled during this decade in the paper examine how household bankruptcy rates responded to the two thousand and one and two thousand and eight income tax rebates using the fact that the rebate payments were distributed randomly based on file or social security numbers we find that after receiving tax rebates ranging from three hundred to twelve hundred households were more likely to file for bankruptcy so that means they didn't have any money

until this free check came in the mail they use it to go bankrupt first of all american companies become a roach motel and what you just described there the cost of going bankrupt. in excess of the cost of borrowing a bunch of money and setting up a corporation and going in business to begin with so that shows you the entrapment that goes on with the banks it's easy to get into the roach motel of the american economy but you can't get out you can't get out you can't afford to go bankrupt so isn't that the very definition of indentured servitude but look these people aren't able to escape their debt servitude unless a lucky windfall of money so look at the fact that it's casinos that are being opened and introduce the lotteries across america because the casino is the only way out you have to have a sudden random gain of money that has nothing to do with you working it just has

to be out of the blue fall from the heavens think you can outrun a global flash crash well it was well under the influence of l.s.d. that a childhood friend of rick ackerman. decided to end a promising career as a commodity trader he was buying and selling pork belly contracts at the time but dropped acid one day hoping to gain valuable insights into the markets insights that presumably lay beyond the grasp of rational thinking chuck had insights all right but not the kind he expected instead of having potentially profitable spreads combo strips and straddles leap out at him from his trading monitor his feeble mind was overwhelmed by images of the slaughterhouse a four hundred pound south dripping blood from a conveyor belt dropping out of a trading oftens don't mix like the whole economy now everybody's dropping out of it in these high frequency trading machines that don't make any sense either they're just as bizarre is like the one armed bandits where the slot machines they're just multi-billion dollar slot machines and gambling is becoming the biggest industry in america as well as the prison industry so you end up with what

i call the casino gulag model of an american you know creating enough access nonsensical paper to fund the food stamps all right stacie member thanks so much for being on the kaiser report thank you max so a much more coming away so stay right there. you vote for bush will. always stands by one vote for kerry for kerry so the people that are going to be validating this machine can stand there all day long and vote for somebody and it will be right every time but the guy can walk up here and if he hits the right buttons. you can flip the boat that.

i am not surprise or this is the kaiser report time not to go out of boulder colorado on top of the retirement of rex pax newsletter we're talking here are three hours ben of market was a market record on the floor of the pacific coast exchange and you can find more about him at rick ackerman dot com rick ackerman welcome back to the kaiser report effects thanks for having me on all right rick ackerman will anyone be able to out run a global flash craft with the title of one of your recent posts tell us about someone in the swarm got it kind of riled up and you know they're not nearly always and. had one guy say geez you guys have been a lot of the mortgage the so long and you're just making a big mistake reality says it's still higher but. the stuff i seem to think that

it's it market where debts a collapse are big warning signs that he's got the past civil fleet was since the may chance that they did two thousand and seven crash really was the warning sign stocks came down very hard that day because of somebody to switch and we see a lot of things that happened was elected the board and came back in about eleven minutes but i think that really was in even if the problem even if it was a kind of mechanical error that sent the market plunge in that day of the those things don't happen to begin with unless the psychological conditions are clicks and leaves as i wrote in that commentary we've enabled machines to panic at about ten fails and the speed of humans. may not be possible to do research realty. right now on the subject of markets market integrity in these markets be calm

distorted in that they're no longer supply and demand so much as they are being driven by algorithm algorithmic trading algorithms and these huge locals these huge deep pocketed players who have a bias i mean in the case of the metals market and you track metals quite closely over their respects there seems to be a definite. ceiling put into gold and silver for example from those who are you know they're really doing the bidding of what i call the paper bugs the fed and the investment banks etc. you know immediately the trading. john mainly by normal networks you know i work in the trading it when i'm a primary it's in the city it's more involve equals trade votes in brazil as well and chamber hill came in they would pick up size more kits and

a lot this is great you know if you do want to lead a broader sense of the. trade it is of course working acres and not trade with each other. but it turns out the chamber who was against me were still ahead of me. anything that i saw the register visible an opportunity in brazil they were already moving the more cuts away from me. that's the case now and when you look at some of the options markets you'll see some markets and things that barely ever trade you know you go into some of these stocks with the exposed relatively liquid and you'll see that there are side thousand them options in the bid inside the walls of the also and the thing may have jaded fifty clone trucks in the latest week what those markets they did more it's need is that there are players out there ready to do so and so is but only on the basis of some hits calling in that there

has to be the end of their side of the trade gives them an advantage to do that size so the size markets move around a lot but they are opportunistic in the way that only a war network sees all of them or it's the same. can understand ok if i were describing their name the price the current price they might be trading a relatively low volume but on either side of the price you might see these monster on earth that get triggered when a price direction either an either direction but the transparency of these markets is such that really the there's only an insider group that knows where these monster orders are setting and they also have the wherewithal to trigger these monsters orders in their favor and additionally to get. back to the subject of class crashes and algorithmic trading and high frequency trading and what we're seeing is a lot of these spoof orders these fake orders that are thrown in there by the hundreds of thousands at a time to simply. cause

a direction all moves in a ways that are completely outside of anyone's definition of what an economic function of these markets should be your thoughts well you know just in the last couple of weeks the regulators and. not only taken a look at it they made it to looking at the high speed traders the traders. one example they used in the various and terror of trading is called the hide and slide order and essentially would have allowed for. a market maker or an algo trader to put bids in lawson's there since leafs unction his deeds of was there just a shadow. if you trade retail cost. typically you have to buy the author and sell the bid with the whole point of algo trading is to get a real there. is no one else they even if they see them they have. the

algal traders are between markets all over the chilling city plea where the regulators get interested is when whatever method of trading cheesed is giving the trader a significant advantage of the public. isn't we're just algate traders knew each other off the regulators wouldn't care if the algo traders seem to have a leg up or reach a it's in the becomes of it since i reckon i want to ask something else that sense your experience as a market maker and trader i'm pretty sure you have an opinion on this now it's come out recently that more and more traders are using computers to read material actually read the printed material that comes out of the press and then to construct algorithms based on what they're reading. and have put trays on

the floor based on what they've read and of course this will impact prices one way or another which would have the effect of generating more printed material which would be picked up by the same algorithmic traders and you'd have this this daisy chain as mobius loop this circle this feedback mechanism would be in place so you're not going to be larry not only the prices were high frequency trading but there's a potential here to manipulate prices by putting out a wall of printed what's called price propaganda because using search engines except for having a look at this it's been covered within the last six months it seems to be gaining some currency your thoughts i know guys to work with. these would be wasted searching billions of web pages and chat rooms to slane snippets of discussion that would supposedly have some impact on the star and although i'm sure they're probably should get noise to the sales there. it's done i

think mainly a small way would be surprised or the bit. of ways of each truck and see whether the discussion would give them some. small change which for the help in the store or in some cases as you suggest they. might be noisy out there it is likely to move the stuff so but i don't think it's a big thing and i think whoever is it is probably getting the ball out the side out he's talking about what the club's illegitimate in the book is put out there with the explicit since moving the morcha so i think the regulators terms of the distance are last thought about class crashes as they relate to currencies. obviously the currency markets the biggest currency is the biggest market overall of many trillions of four x. traded on a daily basis and it seems that the going for. already here there's going to be

caught a currency war between the euro the dollar and the chinese run. based on what you see in the markets how do you see that playing out. well the interbank market even relative to the exchange traded or acts that it's really hard to. they're slow chill i mean business. recently was simply on the bar on one side or the other and you know the whole of the the biggest market that sense was not made of this is the exchange markets but i think a flash crash the conditions are there simply because everything is kind of tied together you know the more council together and the biggest of them all of course is the dollar a kill now we've had recently the dollar i say we meaning they. you

know the whole financial markets are so they're wired in the literal sense in the psychological sense and or they have run market on reveling without bringing all the others with it and actual now it's you know you had what you call slate is safe to say for instance to the dollar treasuries they are anything but a little chilly perceptions that i think they. will continue and of languish. to safety because we're an integral it's a nail in the dollars and we see strong as sale of the euro and so the slow money keeps going euro dollar euro dollar euro dollar. we don't have a section. is where the real safety is that's why it's developing a base and we're. so rick ackerman you talk about filtering out the noise you talk

about technical analysis and it's true right that technical analysis the times to remove a lot of the psychological elements to these these markets paint a picture that one can trade around and divorce oneself from any kind of psychological bias now given all that changes with class crashes and what we've just been talking about here with algorithmic trading and news reading etc as this impractical analysis if you had to modify your work or is it still consistent throughout the still works as you've been working on it now for quite a number of years that's a very interesting question because. gold very closely for one. mainly because just in order to sort out all the oil you should know when you get into why things are more variables and you can keep track of so i just tend to a. purely technical readings of the markets to keep me honest if you could be

a good idea of where things should be. and i have to say gold and silver over let's say the last sixty sixty million months of the increasingly adept at sliding the the kind of the threshold that circe technicians and i keep desir as. morning that should make money selling to trend history misses force and bet against it so if you're betting against your being against the idea that the central banks nearly one. minute we stop you sitting in the subject the all of the more constrained real interest staged more exposure and the whole game will be over all right rick ackerman arad of time but thanks so much for being on the kaiser report thanks max all right that's going to go for this edition of the kaiser report with me max riser and stacy herbert and i thank my guest rick

ackerman from rick's pics if you want to send me an email please is our cries reported r t t v are you until next time x. guys are saying.