welcome back heather headlights now from here to zero the media on both sides of the atlantic i not to smear tuna sandwich attacks prompted by his new show without a second edition of the program later today. fueling a fire engineers are accused of trying to incite foreign action against syria punching unconfirmed reports the likes of which helped with entry intervention in libya. israel insists it's serious when it comes to threats of a strike on iran the fear is it's not fully prepared for any retaliatory attack. next in our t. rex and stacy take

a closer look at the latest global financial scandals. max kaiser this is the kaiser report there's a new kind of virus can change and spreading throughout the global economy thanks to herbert climax well yes the first headline explosion in student debt drags down housing chart of the day so the chart of the day shows tuition expense has risen about three times as fast as we just since two thousand and one before accounting for inflation according to data from the labor department to issue crime fifty seven percent on an inflation adjusted basis during the period at the same time the average wage for american workers between the ages of twenty five and thirty four dropped seven percent so debt explosion brightest news this debt

encumbrance says it's mushrooming in the education sector is having a knock on effect on the housing sector people can't afford their mortgages or it's crowding out the more the mortgage market with another market that is crumbling so there is more crisis of spreading some sort of a virus of contagion spreading from country to country now it's spreading within interim market debt piles in the same country and it's just a metastasizing becoming much more onerous well debt piles to the british audience will suggest something quite well it's a pain in the in the piles without any question and speaking of debt explosions max so i am with chief christine lagarde and last ditch struggle to raise funds yes christine legarde is here in america and she's looking for money we're dead broke the students have no money we don't have any money but she's here she's begging she's involved in

a struggle to raise funds for the international monetary fund i mean fears that a fresh option of the global. financial crisis will leave the organization short of emergency cash i.m.f. officials so they did not expect the u.s. to respond to the call in an election year since any loan made would have to be passed by both houses of congress gross you had a designer handbag open and course that was counterfeit as well as you pick it up on the street outside the event from one of those bags sellers but to presume that this is not going to be coughed up is is false of course we'll cough it up because it'll be an assessment to once again try to defer the day of reckoning nobody wants to meet their maker in the death excuse me the debt market but the grim reaper is a laughing on the sidelines and you know the other interesting thing about this is is what you mean here she said is that oh we know america won't pay now because of course they're in an election year but it also shows the mentality of this global

financial debt push for a class because the way she's saying you know they had to scale back their six hundred billion dollar money fundraiser because of it's an election year and she knows that therefore they'll get it next year after there's a new president but not this year while the voters have any say and this is the same sort of mentality where they then put in a technocrat well it's amazing that the election cycle has become part of the credit analysis for the global debt market and it absolutely nothing to do with the democratic process of electing representatives it's all about how this affects the debt market and then max here's another good idea for christine lagarde she's out there looking for money she's not having any luck in washington d.c. because of course everybody space in the electorate so there is another group of people right here and ma'am hatten and apparently they feel quite bad about all the money they've stolen from their investors and various joe schmoe xj go back to donors joe baca bagels right here in the streets of manhattan and you know what

they're actually talking to bankers x. goldman employee. seeks leniency for insider scheme a former goldman sachs employee who said he gave away thousands of dollars he received from an insider trading scheme to new york's homeless was sentenced to probation instead of prison guard shanker thirty eight of new canaan connecticut who also worked as a trader at shotton feld group based as long as thirty seven months in prison collected less than four hundred fifty thousand dollars in the scheme his lawyer said so that was a mitigating circumstance he only collected four hundred fifty thousand he got from this insider trading scheme and he was fined twenty five thousand dollars now part of that his defense was that he gave a lot of it to homeless people his girlfriend his fiance was saying you know i walk with him through grand central and he even talks about homeless people he makes them feel good but yeah the shanker is a real shanker on the face of democracy and economics in america this is classic robber baron behavior remember john d.

rockefeller used to give dimes on the street you know the poppers and the presence for p.r. purposes so this is a purely in the vein of trying to appease the the mob from you know getting the pitchfork well the language that his lawyer reviews that was very let them eat cake from bringing the homeless a cup of coffee in the morning and sharing time with them to handing them hundreds of dollars at a time mr shanker has always been able to simply walk past those in the most distress well the lawyer doesn't mention the fact that yes he's walking past these people in distress a lot of them he's the one that goldman sachs put them there. of course and they are conspiring to create this homo's class of as an america or for some reason happy to get their thin dime their cup of coffee from the shanker as you walk through a grand central station when they should be proud more properly taking some actions

to really balance the social contract let's say some acts the judge and listening to all this. evidence that shanker gave all this money to beggars and homeless people the judge just say you don't make a charitable donation with insider trading proceeds what he did with his illegal proceeds is less important to me. it's a typical arrogance and godlike thinking of someone who thinks they're doing god's work hello lloyd blankfein so the next headline is the mother of all info graphics visualizing america's derivatives universe and this is from zero hedge and they're talking about that last month they presented the latest derivatives update from the o.c.c. according to which the top five u.s. banks hold ninety five point seven percent or two hundred twenty one trillion of the entire u.s. derivatives universe which in turn is just a modest portion of the entire seven hundred and seven trillion in global derivatives as of june thirtieth two thousand and one so they provide this info

graphic which also gives a lot of data max for all the crimes going on and where christine legarde might go look for bankers who like to use their ill gotten gains to help some beggars. so first up max. and why bank of new york mellon has a derivative exposure of just one point three seven five trillion considered too big to fail banks it is currently facing among others lawsuits fraud and contract breach suits by a los angeles pension fund and a new york pension fund where b. and y. mellon allegedly overcharged on so many millions of dollars and concealed it fluently but there are. not even two trillion of the relative risk on their books so there's got to be some bigger fish out there well the next step is states three and now if you look at the if a graphics there that the buildings on the right those are made up of one hundred dollar bills so that's just to put into context how big what what sort of skyscraper rates you see behind me here what sort of skyscraper of debt of one

hundred dollar bills they're doing that is exposed hammering you here by the way stacey building a scaffold here with thirteen steps leading up to the news justice yes max well bank of new york mellon or state street another piker another small guy if they don't have enough money for it christine legarde in our feeling generous with all their ill gotten gains there's always a wells fargo has a derivatives exposure of three point three three two trillion it's another too big to fail wells fargo has been charged for its role in allegedly pursuing illegal foreclosures and deceptive loan servicing wells fargo's a slapped with an eighty five million dollar fine by the federal reserve for putting good credit borrowers into a bad credit rating high rate loans in march walkover own by wells fargo paid one hundred ten million dollar fine for allowing transactions connected to drug smuggling and a fifteen million dollars fine for failing to monitor cash used to ship twenty two

tons of cocaine and also failed to monitor three hundred seventy eight point four billion dollars worth of transactions to mexican casas d'acampo usually linked to drug cartels and it was our lungs i want to see the epigraphic of what twenty two tons of cocaine looks like. back to the derivative files of one hundred dollar bills that's a good example graph and look at either way the hundred dollar bills according to the in for graphics is the most counterfeited currency in the world most of them are in grain was ok but again lots of crimes going on at wells fargo so you know these people apparently knew sort of bankers like to talk to those beggars in the street so christine legarde to go talk to her let's talk about some of the more crimes that wells fargo committed they really order their transactions to create more overdraft fees wells fargo's well coby also got a secret one hundred fifty nine billion dollar bailout from the federal reserve they keep you know the crunch and they keep going to the discount window to finance more and more derivatives to put the economy at greater greater risk that's right

and now guess who the daddy of all the derivatives holders are i got a feeling no no to the fact that he tomorrow yes yes yes max jamie's done it over j.p. morgan that's right is j.p. morgan who look at those giant pile that feeds you morgan chase man yeah those are nasty losing disgusting piles of the residence k.p. morgan chase has a derivative exposure of seventy point one five one trillion dollars seventy trillion is roughly the size of the entire world economy the one trillion dollar towers you see in this info graphics are double taxed at nine hundred thirty feet i want to call the empire state building is behind us well it's a lot of the river the biggest service position in the world so it's a bank by the way has another huge position which is bigger than the entire g.d.p. of germany so as soon as the reserve bank goes bust they'll take that country with it as well you've got more derivatives of j.p. morgan than the g.d.p.

of america by many times over for five dollars of g.d.p. of the entire country so as j.p. morgan goes belly up goes bust and jamie dimon is a very. immoral illegally bent type of corporate now mel malcontents. family tree goes belly up but hey he's going to join dimes on the street to do to make a john d. rockefeller impression but let's look at some of the crimes listed here along with him for a graphic about what j.p. morgan is done to keep a seventy trillion piles of derivatives taken morgan is rumored to hold fifty to eighty percent of the copper market and manipulated the market by massive purchases j.p. morgan is also guilty of manipulating the silver market to make billions and two thousand and ten j.p. morgan had three perfect trading quarters and only lost money on eight days lawsuits on home foreclosures have been filed against j.p. morgan aluminum prices manipulated by j.p. morgan through large physical ownership of material and creating bottlenecks during

transport j.p. morgan was among the banks involved in the seizure of six hundred twenty million dollars in assets for alleged fraud linked to derivatives j.p. morgan chase also received a secret three hundred ninety one billion dollar bailout from the federal reserve they got a rap sheet as long as your arm should be in some ways crunch over the c.s.i. manhattan or something and bring them in that forensically look at the balance sheet and say hey this is a murderer jamie diamond is an economy killer so there you go max christine legarde is in town she's looking for people and we have found her apparently a lot of banks are feel bad about the money they steal and they're willing to give a few pennies to those beggars on the street jamie diamond give her hundred jobs here christine lagarde somebody you know i think christine legarde outside of penn station with a fake louis vuitton bag i see here and there i looked and so money for. slush fund for the guy all right days ever thanks much for being on the guys report thank you

don't go away much more coming away stay right there. when you see your story overseas grace rebirths welcome. home to roost. when there are massive cuts from great. empathy to sway to pull the commotions. towards those who live on the current.

welcome back to the kaiser report i'm max kaiser time not to go to dr michael jackson dr michael can walk with a kind of a rick lanka very much max it could be bad all right now dr johnson let's talk about germany it's a powerhouse exporter and yet the german government is imposing austerity on its customer nations across europe as a former balance of payments economists for chase manhattan bank how do you see this working out well it certainly can't be good german e insists that other countries bring their budget deficits within three percent of the cittie how on earth is germany going to heat up a sec sports if you look at the last five or ten years the growth in german exports to greece and spain and portugal and the mediterranean countries have just about equaled the increase in the government budget deficits and that's normal keynesian economics when a government runs a bunch of deficit this is purchasing power into the economy which is how the economy is expanding the government doesn't run

a budget deficit then you're not going to have this purchasing power injected into the economy and if it doesn't have the purchasing power how is it going to buy imports and if it can't buy imports how will it buy them from germany which has been supplying most of them so it's as if the german bankers and bankers throughout europe are following this kind of automatic clank clank clank thinking in the head budget deficits are bad without thinking wait a minute without purchasing power how are our industrialists going to sell you certainly don't want west germany to have a. much unemployment as east germany or else other going to be in as much trouble as everybody else michael hudson certainly the e.c.b. which is really a holdover from the blunder spank and it's run out of germany they are now being very commentating are they they're expanding their balance sheet they're doing what we saw in the united states when under the tarp program they got the l d r o program but this is very much against the d.n.a. actually well of germany isn't it well it's also against what most people think of

as running a budget deficit if you're in america or england or most countries you think of a government running a budget deficit of hiring people buying goods and services mainly military goods or arms but you think of the government buying things and things that employ labor to produce but that's not the kind of budget deficit the whole world has seen since two thousand and eight you have the government not spending money on the real economy but giving money to the banks and bailing them out so all this extra money this trillion dollar bailout fund that europe is doing is giving it to the one percent to the financial sector to the bankers and now they say our financial system has screwed up so badly that we have to cut welfare cut pensions cut medical care cut social spending take money from the ninety nine percent to give to the one percent and they pretend that this is natural evolution not a roll back towards the kind of world we had five hundred years ago when they used to call it feudalism an oligarchy right those couple of points they're all first of

all so they're they're taking on their deficits they're they're expanding the deficit but in the worst possible way they're not doing it to expand growth in a way that's normally associated with the deficit expansion they're simply assuming a lot of toxic debts and they're working hand in hand with the bankers who are getting a privileged seat at the table and the austerity measures are the result but not from any sound economic policy just because they end up with the leftovers there's really no typical cabul or even to discuss what's happening people think of running a debt. yes that is spending more than you have but what's the good what they're doing in the in the central bank is printing money not spending it printing ious printing debt and giving it to the banks so it's a whole give away now they could have printed money and given it to the ninety nine percent but they're saying we're under the constitution of the european union we're only allowed to print money and give it to the one percent to the banks we are not

allowed to print to do what the federal reserve in america does or the bank of england does or what central banks are created to do we're not allowed to create money for government spending like america printing its greenbacks in the civil war we're only allowed to print money to give to the banks and to spend in the financial markets to buy bonds to make sure that the banks of europe can borrow from us at one percent and buy high yielding pounds at eight per cent and make a lot of money that's what they call entrepreneurial ism now talked about people making money in capitalism by creative destruction this is destructive destruction and it's a pure giveaway and it's an amazing ripoff and what is most surprising is that in germany the social democratic parties and the other green parties nobody's criticizing this it's as if i found out in germany they've stopped teaching the history of economic thought they've stopped teaching german history so when the bundesbank says no there is no alternative what they're saying is we will make sure

that nowhere in the curriculum does any european student get to know the third many alternatives if we can only narrow the educational process we can make people think there isn't any alternative but to take from the ninety nine percent and to give to the one percent and that's why europe is in trouble it's why america is in trouble doing the same thing under the obama administration and it's making europe and america look like latin america used to look like when the international monetary fund came in and said you need an oscar. thirty program because we're just we're representing our constituency the one percent let's talk about language for a second because you just say well there is no language to describe what's really going on it's unprecedented in a lot of ways but then again you also mentioned we're going back to more feudalism a feudalistic model so it comes down to language in a lot of ways in other words they're really bottling old wine in new bottles if i got that correctly there that the concepts are kind of similar it's it's about

forcing deaths on subpoena paul and then. you wrote about this recently about fraudulent conveyance very key concept in all this speak about i was in germany making a talk at the. i mean it convention in berlin and the the idea fraudulent conveyance is basically is that if a creditor makes a loan to a better without knowing how that can pay the loan is declared null and void now this law goes back over two hundred years to when america was still a group of colonies and the state of new york had very rich farmland in upstate new york and british creditors sharpies used to come over here and they would say we want to get that farmland what we do they would make a loan to a farmer for the crops or whatever and then they would call in the loan that back then before. times you could call in the loan whenever you wanted just before the

crop was in they crawl in the loan the farmer couldn't pay and they'd say ok you default we're taking your land so new york passed a fraudulent conveyance last thing that if a creditor like it pretty sharky makes a loan to a farmer without having any idea how the borrower can pay in the normal course of business like after the profits and then the purpose of that loan was fraudulent the purpose was to grab the property and that loan is null and void now that that law is still on the books since new york. became a part of the united states and in the one nine hundred eighty s. that law became important during the corporate raiding movement because companies that were rated a rater would borrow the money to buy up the stock holders buy the company and the raiders a bit each other against each other to say who's going to borrow the most money and the winner was whoever would pay all of the corporate cash flow to the banks and they were hoping to come out with

a capital gain by breaking up the company now they not only they call it breaking up the company what they would do would be to seize the pension fund and pay off the creditor with a pension fund they would do what sam zell recently did with the chicago tribune and deepwater leveraged buyout of the chicago tribune grabbed the employee stock ownership plan and then paid the creditors with us not going to ship plan drove the caribbean into bankruptcy and then told employees g.m. story we're bankrupt all of us say that your pensions and your savings are all wiped out so the employees have brought a fraudulent conveyance suit against them sell it still on the books and i think this principle that loans should be brought into the ability to pay should be the principle that governs say greeks foreign debt foreign government debt the debt of all of ireland iceland all of these countries that now are europe is saying ok or else if you can't pay us give us the parthenon give us your water and sewer system

give us your ports give us your real estate all of this under the fraudulent conveyance law would greece would say wait a minute you want us the money without having any idea how we can repay the creditor pass to bear some of the problem. you stiffed us and you actually had went to the government and goldman sachs charged about seventy million dollars to fake the balance sheets to make it appear as if we could pay. this is a fraud we are not going to pay this is an odious debt what are you going to do. what do you say about the situation in ireland where the angle irish debt that they're paying off is unsecured debt they don't even pretend is that it's secured debt it's unsecured by definition they're paying it off there's not even any any scintilla of a pretense why they should pay that off what are they doing well the reason that isn't security is it turns out that the average mortgage in ireland is worth three times as much as the underlying collateral is worth now obviously ireland should

have done what iceland did and said look there's no money to pay. and you can have all the bad mortgages. you can take in but we're not going to take the private debt onto the public balance sheet in a matter of fact earlier this week the president of iceland gave a wonderful speech saying well in iceland we really didn't have much of a chance not to pay the debts but why on earth should any country have to say fifty one percent have made a bad gamble how is it that the one percent the financial sector can say we won't lose a penny but we are willing to push your country into a lost generation a lost decade of depression so that you will lose not the financial sector this is morally wrong and it amazes me that in politics of europe not a single political party is raising the moral issue what they are saying from the social democrats to the labor party is is how can we pay going back to germany and

greece of course after world war two there is huge forgiveness for german debts which is the basis for their recovery is there some hypocrisy here well that was a german economic miracle let's just say they have a short memory because it's not taught in the school books anymore and that's what happens when you let bankers subsidize the schools that give you the school books the german economic miracle started with the allied monetary reform of the one nine hundred forty seven and it monetary. form was addict cancellation all debts except for the money that employers sowed their workers for the last few weeks or so and a minimum balance. all the debts were cancelled and that sort of free market was a free market is a market free of debt free of rent free of obligations it's a clean slate and the reason the allies did this were most of the deaths rode by the nazis and they didn't want the nazis to come out of the war with an advantage

like they did in our allied countries where you leave the thieves in control so the idea was to make the term and start with a free market in a free market was a market free of debt and there's no memory of that they think somehow a free market is a market free for the bankers to tell the rest of the society pay up or we'll take your property your homes and your whatever the cities have and whatever is in the public domain all right dr michael jackson out of time thanks for being on the kaiser report that's it the whole day just for this. and i'm going to do it for this edition of the guys report with me max kaiser and stacy everett i think my guest dr michael hudson is going to send an email please just now my ties are reporting r t t v are you the next time nice guys are saying.

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