and see what i'm doing when i'm not reporting the news you can follow me on twitter and it was all i'll be right back here at seven. i.m.s. kaiser this is the kaiser report so goldman sachs caught breaking the law again stacy erbert max kaiser indeed s.t.c. fines goldman sachs twenty two million dollars over a holes the securities and exchange commission on thursday fined goldman sachs group twenty two million dollars over allegations that the wall street bank didn't how policies to prevent analysts from sharing nonpublic information to the firm's traders the exchanges took place and weekly huddles where goldman's research analysts met to provide their best trading ideas to the firm's traders and later passed them on to a select group of top clients s.e.c.

said well yeah a lawyer called glass steagall was present prevented this exact thing from going on the communication between the analysts and the bankers within the organization and this was there after the glass crash and depression in america and they pass some laws to try to keep these groups from talking to each other but now goldman has formalized their fraud with this weekly huddle that they get together i suppose it shows the the huddle is like a football huddle because the blankfein likes to touch the little guys but behind so i think is what was the main objective of this organ of this meeting well in fact you said it was a crime but this is a fine they're paying so i think the f.c.c. is actually treating it like it was cuddles that went a little bit wrong i mean this is their mollycoddling pay well what happens when cottle's turn into something more than that you say and you know they should sign when you join one of these firms very strict rules and regulations about getting

a little bit too probably but so they have to be careful that they're just whispering little nonchalant so and so's into each other's. ears about so and so being bought and sold it's called inside information isn't it and they've they've created a weekly meeting to call the inside information meeting yeah exactly ok they're trading information back and forth with their the between the bank and the analysts and the traders would start not supposed to do and they claim all the time they're not doing their claim we don't need any more regulation we don't need a restoration of classical because we don't do this we're perfect guys and if we do we'll pay our for the crime right but they're paying just a small fine twenty two million dollars how much does that represent of their profits it represents six months bill it sparks a steak house basically is what that amounts to luckily they'll get whacked and one of these times are going to get whacked if they keep doing this so max in two thousand and seven according to the f.c.c. the new york investment giant began a program known as a symmetric service initiative where analysts shared information and trading ideas

for meetings with some investor clients yeah symmetric warfare exactly there's a some of the asymmetry here is a clients are getting hammered their clients are getting oil e screwed the insiders at goldman and their privilege clients to make money trying to get inside information by lobbyists and by congressmen to pass laws to make it easier to trade inside information those filling the enrolled in weekly asymmetry information meeting with even more grist for their insider trading mark manipulation mill that they used to pot line their pockets i'm told that they're lucky not to be down the sparks an appropriate well that's where gangsters hung out in the seventy's and eighty's and these are the new gangsters of new york now they said the f.c.c. said these meetings these so-called huddles these little cuddles blankfein steam happened between two thousand and six and two thousand and eleven they do leave out max a very important huddle are several huddles between lloyd blankfein this traders and

their analysts and certainly. treasury secretary who would that be max bought. paulson i mean you go to the two thousand and eight period we find out later that paulson thanks to a whole with the insiders on wall street told folks that the government was going to be bailing out these institutions printing money to do sell the banks all triple and quadruple during that period of time based on hardball between hank paulson congress and wall street and billions of dollars were siphoned out of the economy and put into the pockets of few folks who used most of that money to pass laws to make it easier to commit the same crimes over and over again yes those hurdles you were talking about with hank paulson they were actually involved he met with these bankers from goldman sachs he met with hedge funders who used to be at goldman sachs and told them despite going in front of congress and telling congress. we will not bail out fannie mae and freddie mac.

they will not be put into receivership into conservatorship and in fact he was telling them that we're going to do it so you cannot this is our little huddle our little cuddle but i want that that's exactly right and this is a one of the most blatant examples of really this modern crypto engineer financial fascism when you've got the hank paulson's in the revolving door between wall street and washington trading on inside information leading to this amalgam of fraud that's poisoning the waters of our financial system and causing widespread austerity despair discussed outrage create revolution womack's you bring up the word fraud and according to joseph devore in a tourney at close in o'connor in new york and a former assistant regional director and the s.c.c.s. new york office he said the fine was not in consequential for a settlement that involves technical violations of internal policies and procedure is best to see past that spic the technical violation that's bats that's what i'm

talking about secularly they need to take the money that they make from training us inside information to go and pass laws to eliminate each subsequent technical aspect of the laws that were there to stop this violation of these chinese wall conversations from happening to begin with so when you replace the word law when you hear the word technical no matter what they do if no one playing fine came into this room stabbed you multiple times live here on camera it would be a technical violation of knife laws. exactly this is technically was a violation of the no knife into the lunchroom a lot the fact that there's a pool of blood underneath the t.v. presenter is really not to be focused on at this time because technically he's not violating anything of substance so he can. nof weather is where it's completely rob

ing the end of global customers and having the us bail them out is ok because he was wearing using the right fork at lunch and so finally on this goldman sachs story this guy joseph devore the former f.c.c. guy he says that it makes sense that the commission was able to negotiate a penalty settlement over four times the two thousand and three pound awfully sad moment so yes goldman sachs already paid a penalty in two thousand and three for this exact same technical violation but they have more leverage now because of the financial collapse to plead with goldman sachs and pay a little bit more money this time around. a little more money for your lawbreaking in your criminal behavior please don't worry those who do school did this one if you could. use poor bureaucrats. you know this is outrageous that the f.c.c. is begging goldman the to write up the fine if they're cough the ball well yeah it's sort of actually you know saying you know what you guys are shameless

lawbreaking thugs banks are scum and how about we bring it out of sparks and wacky you know i love these chinese banks who give you know they take a baker's out back and like to kill him that's a deterrent death is a deterrent now speaking of technical violations we have some more technical violations from another big day you and me you kill me over it it took the good violations of the go boots. violation little so this approach of the took ok if i can park it in where i was too little money a lot there's but. good that's me i don't need ok i don't want to well these are technical violations from the other big. on the street who's a bigger group bob. cole says bluebird fun. new look good no look it's j.p. morgan state we die where god is the the ships. this is like a little blood on their. table the dollar j.p.

morgan said to transform treasury to prop trading this is again brings us back to the last eagle j.p. morgan chase and company chief executive officer jamie dimon has transformed the bank's chief investment office in the past five years increasing the size and risk of its speculative bets according to five former executives with direct knowledge of the changes achilles machree hired in two thousand and six as the chief investment officer as top executive in london led an expansion into corporate and mortgage debt investments with a mandate to generate profits for the new york based bank three of the former employees said diamond fifty six closely supervised the shift from the c.i.s. previous focus on protecting j.p. morgan from risks inherent in its banking business such as interest rates and currency movements. oh or do we begin first of all they said they're increasing the size and the risk yes by triple that the triple that we're living in an era of the

too big to fail banks acting like purana eating our everyone's lunch so here's a guy name macas prerelease the killings of bacchus. achilles mackerel killers of mackerel this comes into the into the coliseum with a plan to transform yet another market into an over secure toxic waste dumps the jamie dunn is going to extract these from well max some of macro says bets are now so large that j.p. morgan probably can't on wind them without losing money or roiling financial markets the former executive said based on knowledge gleaned from people inside the bank and dealers at other firms bruno excel another london based trader in mattresses group gained attention last week after moving markets with his trades drawn in comparison to federal reserve chairman ben s. bernanke use power in the government bond market were briganti is to the treasury market excell is to the derivatives market but they're too big to unwind right

without tossing massive financial disruption did they get too big to unwind by accident no that's the idea we get too big to unwind on purpose so that we don't need to on the wind because this is a skiing were we are out there extract ing rant from everybody who's even kids don't really connect to this economy they must go through this interest rate scheme perpetuated by the burning and the j.p. morgans of the world and the costs are rising and they end up suffering and these guys are mafioso they're the mafioso wow you mentioned mafioso so let's turn to this further information about this story here the cia is growing size and market power have made an increasingly important customer to wall street trading desk in a market influenced by head. loans and other investors the former employees said positions and credit derivatives have become so large that some market participants dubbed him baltimore it's after the villain of the harry potter series who is so

powerful he can't be called a name this is not good when you have bankers who people are afraid to mention their name yet i know brings us back to that first story about goldman sachs the s.e.c. is afraid to mention goldman sachs is crimes by name so it's called a technical violation please don't tell us lloyd blankfein writes the sole idea that too big to fail is a problem so we need to rein in we need to bring graham we need to bring in the balkans we need to bring in new legislation we need to have elizabeth warren do it table dance for a couple of congressmen down the sparks and say you know to try to stop all this was a complete farce because it got much bigger got much worse the whole thing is going completely out of control stays there but thanks so much for being on the kaiser report thank you max the way much more coming why so stay right there.

the mission creep couldn't take three. more charges three. months three. three stooges three. the old free born to be old for your media projects a free media oh don carty dot com. the on. the on. the on

the it. is easy. to. see. the one i am asked as a welcome back to the kaiser report special in studio guest matt taibbi matt welcome to the kaiser report great to see you and course rating all your stuff on a rolling stone and first of all course a quick question i mean you're writing all these stories about banks and and what's going on on wall street but are you writing about finance or are you writing about

about crime stories basically it's funny the winds have gotten so blurred it's basically an organized crime story and that's really that's what i'm trying to do lately is since convince readers that it's not really an economic story or a final story it's organized crime there's no difference at all yeah i mean that the language that people use the bankers it's a high pollutant and they use these right to fall swaps and derivatives and collateralized debt obligations but they could go. just as well be talking about you know whack a guy behind a dumpster at sparks total essentially it's the same thing so you write gangster banks keep winning public business they're the then the business of doing the business of the public in essence and they can even though they're clearly violating the law they're continuing to get these contracts so tell us about yeah this is an example where it's exactly like the old mafia business in the old days we had municipal building and it was a mafia group that would prey upon some local municipality and the different mafia

groups would divide up between each other which tear which town they got the service their garbage who got the service the laundry here who got to do this and that the cement the construction and that's exactly what we have with modern. investment banking all these investment banks and essentially divided up their territory they are artificially lowering their bids for investment banking business so a town goes out and it wants to issue a bond and all the banks all of them will suspect bank of america chase they're all colluding to submit artificially low goods and everybody is losing out and it's exactly the same activity that we had with mafia groups it's just that it happens to be bonds that are garbage well bonds as they're called great which bonds right exactly so now another interesting aspect of this is that the mob as gone global right wall street mob and you see in casino italy there's a big story base of ray and other and you've covered this extensively so it couple

highlights there and give that global the globalization of this absolutely the that's one of the problems with prosecuting this kind of crime is that it's it's so good it's so cross territorial and you're across jurisdictional but there is no one law enforcement body that can really aggressively prosecute this kind of crime and they also have a tendency to go. regulatory shopping essentially they seek out the areas where the regulations of the weakest are the regulators who are the weakest and that's where they'll base their operations that the laws are are less powerful so it's very very hard to nail them down for things like the swap manipulations or the really big story i think that's about it this year is the manipulation of why bore which is the new burgeoning case that's coming out and nobody really knows where they're going to prosecute the case yeah that story and i don't know if you follow this one or not but bank of new york was caught in a multi-trillion dollar custodian business for pensions and and what not they were

stepping in front of all the trading of the form of throat running for explorer and just scalping the pennies billions and billions and now they're saying oh we're not sure we could prosecute that story it's like office space that movie is exactly one period of time but you do it a million times right now that's initially rolling stone of course is a pop culture a great magazine and it got back to the hunter s. thompson days of coverage of the politics of the sixty's and nixon and there you are you're at the in the magazine in the writing is different then you're going to find the long wall street journal of financial times because you bring in a real literary sense to it it's great to read even if you're not interested in the in the details of the stories it's well written so that as a writer one of the challenges it's kind of a bit of a tangent story mr rose wanted to ask this i was a writer when you're talking in this space because the material so well paid for any crimes are when you talk about inflation it's

a crime that no one is really aware of happening it's creeping it's all around you how do you deal with that i mean as a writer as a journalist and go through your thought process on that a little bit yeah it's incredibly complicated challenging because this is part of the reason that these guys get away with as much as they get away with because the instant in trying to explain some of these crimes you know you can't do it in a thousand words you can't even do it. isn't words it takes sometimes six seven eight thousand words to explain how manipulative one of the municipal bond market works or you know what he was doing before the crash all those things so the first thing that i try to do always is i try to connect the activity to a real world consequence i'll find somebody who actually ended up losing money and then i'll try to connect that that consequence to the crime so for instance in jefferson county alabama you start with you know somebody who got laid off or

somebody you had to pay a sewer rate that was five or six times what it should have been and then you kind of work back from there and you show how j.p. morgan chase's the situation to the sort of bribe its way into the lap of the local infrastructure resulted in that person having to pay all that money and so it's definitely a challenge to i mean you yourself know the verbiage and all it is is is a count of lies for all these crimes that it's very very difficult to sort through and the crisis that happened in two thousand and eight the result of this was not any reform but that the too big to fail got even more to big to fail they got too big to fail yeah i listed about specifically a piece that you've written the bank of america too crooked to fail. so it's a great other fantastic you know home run piece to walk us through a little bit talk about you know we just tried to do with this pieces is kind of walk people through what the consequences of too big to fail are and what what it really means what people don't understand is when these companies get this big and

bank of america this is back up to the show you got out of business in two thousand and eight they made it to catastrophic this is back during the crash one was to acquire countrywide. which is the giant subprime lender and the other one was the one money when they were essentially forced to acquire merrill lynch so they had these two gigantic albatross around their neck but instead of putting it out of business. how do conversely had the opposite effect their company got so big so artificially big because of these acquisitions and now we couldn't let it go out of business and now we're stuck with this company and essentially no matter what they do no matter how many different kinds of ethical misdeeds they didn't involved with we really don't have a choice anymore but the slap them on the wrist kind of hope to get better and continually bail them out and this is this is what we tried to show in the piece we can sort of just listed all the different things that they're involved with from municipal bond. to reading lie boards to all the mortgage backed

securities reports that these guys were involved with ripping off the ham program you know that obama's mortgage program ripping off people who have prepaid regular murder cards to get their unemployment insurance benefits is just one scam after another but we have to turn the other cheek and to sort of let it happen what mainstream media like m.s. seem to say which is cable network dedicated to the ticker tape basically and cheerleader for all this so you got to like a warren buffett oh come on who celebrated as america's sweetheart billionaire he's got a big position a bank of america wells fargo bank he's directly involved in this fraud rolls fargo bank the story with the drug laundering of the mexican cartel right roy tokyo with acquired by wells hundreds of billions of dollars connected to the chain lane changing in mexico twenty two tons of cocaine basically what that what it what they covered well and so you have a warren buffett will go on saying b.c. he's investing in these companies right and yet these are places you go alley you

know i mean he's the great genius the oracle again from the pop culture side the rolling stone side you go from jimi hendrix star spangled banner you know it was stock to warren buffett playing a ukulele it is ending a meeting. and people are celebrating that as a milestone and cultural you know achievement how did we get this far down the slide what happened it's. mazing you know i remember a mag rope in a family of journalists and i remember when i was a kid reporters hated powerful people it was a sort of a thing that was part of this business we we have a thing we wanted to stick it's a man if you was doing something wrong different body kind of what we did thought that that was their role to kind of take people down to pay when they when they got too big for their britches but i don't know maybe i don't know if you have the same experience but in our business something's changed there's a completely opposite dynamic now in the media which is that we worship powerful

figures we grovel and slobber at their feet and it's been a terrible thing for america because there's nobody really asking these questions and these guys are allowed to get away with a lot more because they have the presumption of correctness every time to come out with some new horrible scam they're always given the benefit of doubt by reporters and it's just that it's the unfortunate thing yeah whistleblowers are being attacked there's no ministration but much more than any other administration in history is attacking whistleblowers right and journalists are under attack all over the world and stopped at borders in our own country in the u.s. and it's become you know as you say the dynamic has completely changed but let's see we've got a limited touch on this john cores and scandal and m.f. global because here is kind of a new chapter because what we what we have discovered is that the discourse scandal he reached into customer accounts right any took money that segregated customer money so it's not just billionaires playing with each other in ways that ultimately

do cause problems this was a direct this is just stealing stealing you know no way to round it it's so but of course iran is nothing has been for brought against them straight talk about this and this is an incredible thing i was just out in california last week and i'm doing some research about how we prosecute say welfare fraud in america right and there was a case that i heard about where a woman. who was on welfare she was on public benefits and she she used public. daycare at a time when she was not allowed to use it and they prosecuted for fraud and put her in jail because she used to government service at a time when she wasn't supposed to technically right so we actually put people that they meet they make forty or fifty felony cases a month in these california counties against these very very small time. people but you know john course i mean he steals how many how many hundreds of millions of

dollars it was i mean and again it wasn't a sophisticated operation it was just like you're talking about it's like one day you know a businessman gets desperate he reaches that embezzles his own company to pay off a drug habit or whatever that's what this was how is this guy still walking around how is there no case it's worse than the trayvon martin thing and this is this well in a way i mean it's it's just it shows you we live kind of in these two different worlds where there's one set of rules over here and what sort of rules over here well it would make a trayvon martin comparison it know here's a guy who's getting murdered in the street over italy and karzai is committing a fraud openly in the street in the glare of the spotlight right and people are wondering what is that really a crime and there's a similarity there like there's only just got murdered in the street people i wonder if that's wrong right here the guy course i he just blew it just stole his money like tom is that is that wrong finally that's eighty given the arc of the story everything going to run out of stories in this on this topic and i said you

know it's funny i was just talking about that with another journalist and we both we both talked about how it's like a lifetime job security thing with this with this topic there's just an endless bottomless well of these of these scams and you know if you do appeals to your sense of humor i mean the there are incredibly dark in there and some of them are quite ingenious actually but they just never end i mean it is is that your experience they just simply could never run out of its own. i believe in this post anytime soon right exactly and that's a big thank so much being on the kaiser report thank you all right that's going to do it for this edition of the kaiser report with me max geyser and stacy herbert or i think my guest matt taibbi of rolling stone that has some e-mail please do so at kaiser reported r t t v dot are you until next time nice guys are saying.

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