eleven thirty am in moscow these are your r.t. headlights student protests against jewish and hikes in canada enter their hundred day is demonstrations in defiance of a new emergency law turned violent leading to dozens of injuries and hundreds of arrests. the largest summit in nato history wrapping up in chicago block leaders reaffirming a plan to end the afghan war by two thousand and fourteen but keeping a presence in the country beyond. germany enthusiasm for in europe wide austerity under fire from british opposition politicians who warn of may spell disaster for the global economy. and speaking of economic matters all things financial up for

debate with the kaiser report stay with us next. i'm out of kaiser this is a kaiser report this is a news show that's taking down a major financial terrorist j.p. morgan we've got them on the run thank you for selling the stock short thank you for taking your physical silver off the market this financial terrorist is going down safely ever max you said we've got them on the run in fact the entire global banking and financial system has the runs there runs on the bank in greece and spain and j.p. morgan the biggest bank in the world the biggest financial terrorist they actually have their balance sheet has the runs what's incredible is that people around the world realize that this financial terrorist network led by jamie diamond and j.p.

morgan is met there come up and in the reality based world that is now imposing real world accounting on these terrorists and people are now taking the money out of the banks and i want to be like m.f. global customers where j.p. morgan just steals their money and with a great thing that stacey is that they're busy now covering their butts they don't have the wherewithal to keep the price of silver and gold artificially cheap with their fake supply paper silver that's why these markets are exploding this is fantastic we're going to take this terrorist out you know barack obama has been lobbing moment i've got my jamie diamond moment he's going down max you say they're covering their butts and they really ought to because they have explosive runs on their balance sheet and now j.p. morgan's two billion dollars trading loss is already three billion dollars and counting jamie diamond said it could get worse and it is the j.p. morgan trading loss that was two billion dollars four days ago is now three billion report nelson schwartz and jessica silva greenberg in the new york times why

because every hedge fund in the world knows j.p. morgan is. stuck in a position so big that it cannot wind it and they're taking the other side of the trade max right you live by the sword you die by the sword this is the same kind of shenanigans morgan and goldman did to greece they sold the company short into oblivion they did it in ireland they did it to montgomery county jefferson county in the united states now the headers are doing it to them they're the they're the pig and the pope they're the ones getting beaten up and they deserve it and it's going down like a ton of bricks and it keeps selling it short keep buying physical silver and you force max at it here first on the kaiser report you told us hedge fund guys out there you said short the sucker the suckers going down operation go go go the money is easy to make you so j.p. morgan stuart your buy silver is just a trade of the year you're already outperforming warren buffett by five hundred percent make it another five hundred percent so here's another headline on this topic of j.p. morgan max hedge funds i further profits from j.p.

morgan last. ten years a police helicopter by the way and i think you are in danger i mean seriously on the run as well as having the run on its balance sheet but actually that's the latest shipment of silver i'm having taken out of the country and we've got about ten or fifteen of these shoppers running around the clock to take my silver out of this country because this country is going down like great my friend take your silver and gold out or be left holding the proverbial bull diaper of jamie's cock up as j.p. morgan weighs up how to limit its losses so it's cornered max is stuck in this position it's got his massive london whale position it can either wind the hedge fund or attacking them as a former broker yourself who has himself been cornered to one of these positions is there any way out but total loss i really cry for them blue i've been in this situation myself before two billion about three billion according to my friend jim

willie it's eighteen to twenty billion in total market cap of the company itself is one hundred forty below. that company's stock as i've been saying all along it's going to zero it's going the way of lehmann going in the way of enron you helped us do it the show is taking the terrorist down jamie diamond is going to be unemployed soon so the article goes on to quote one prominent hedge fund manager who is familiar with the trade but declined to be named of course he said this is not jamie diamond against one other fund this is the my of one against one hundred another fund manager then says i think some funds will make a reasonable amount but it's not george soros against the bank of england or john paulson versus us sub prime one of the fund a fund manager said referring to some of the most profitable and famed hedge fund trades of the past twenty years right and one of soros just reported last week a massive spike up in his position in gold yet well that's pretty interesting because we said here when he sold it that he would just buy a straight back well he's it's one in and out now he's back into gold because he

realizes that the paper money world is collapsing and there's runs on banks around the world people want physical wealth and this was why these banks you know they don't want to be the victim of the scam of having like m.f. global customers remember m.f. global customers have their wealth stolen from jamie diamond personally over a billion dollars he stole it he's not in jail but let's put him in handcuffs with these folks was just getting on and just an more simply beating the the stuffing out of jamie i love it yeah well on the subject of them piling on i think you have to plead with the hedge fund managers out there again because on the topic of them piling on this quote goes on i'd have thought the people involved already have a position on i think people are looking at what makes sense some people might think we can push it a bit well look it's prisoner's dilemma or game theory because a lot of these funds rely on morgan for their own credit to go do their day to day operations but one of these funds going to break ranks are going to outperform all the rest by saying we don't need this diamond character anymore this pig and the

rest of funds are going to follow suit so this is a classic. then reaction remember they can make it short sell j.p. morgan stock which is a counterfeit j.p. morgan stock and sell short like the lehman brothers took it to zero with counterfeiting bear stearns took it down with naked short selling naked short so morgan stock taken to zero make a bundle by physical silver we're winning well we actually have some naked short selling stories coming up before we go on to that i want to finish with this j.p. morgan story how j.p. morgan's hedge blew up in one easy chart now the chart that they show basically we're just going to say it's showing delta collapse and you see that downward slope there that's j.p. morgan was losing money during that because the first major drop right there you see that's from q.e. one so every time the fed dumped money into the markets it was actually costing j.p. morgan a lot of money and they had to take on more hedges to zero hedge right well greed and avarice were likely strong drivers that blindfold a brutal excel in his colleagues to the fact that they were getting too big and

that the position was out of control every means fact that it was a combination of the fed e.c.b. actions to squelch the stomach risk entirely and a total reliance on models that is now bleeding to every other credit index and just as we said leading to increased losses at j.p. morgan. hedge they call ahead to avoid compliance with the law yeah but the important thing here max is this is collateral damage the federal reserve has been quantitative easing the printing money dropping stuff out of helicopters perhaps one of these helicopters that are both flying over us here they're dropping money all over the place and the reason they're doing is because the likes of j.p. morgan itself destroyed the financial system and now because of this quantitative easing it's actually trapped j.p. morgan in this position that ultimately will destroy it so it was the banks time to go this is collateral damage the connection between the fed and j.p. morgan member their share ninety trillion dollars derivatives balanchine if that

connection is busted then both morgan and the fed go bankrupt and the big question of the day is. once it becomes clear that the rats are fleeing the sinking ship of their morgan jamie reach into barack obama's account barrack's got over a million dollars with a pm reportedly lease deal directly from the president you can do it jamie commit that act of tyranny my friend so we move on from there we move on from j.p. morgan to another whale in the whole cons the global scene we have and that is goldman sachs this is a really remarkable story because it deals with a concept called naked short selling an illegal act but it's one that is considered a mythical by many propagandists now before we go on therefore can you explain to us the difference between short selling and naked short selling well short selling is a legitimate market procedure you're borrowing at security and selling it with the hope of returning later at a lower price it adds balance to the market there's nothing wrong with short selling per se but naked short selling is when you're selling stock that doesn't

exist it's the same thing as counterfeiting and this is been a story that has been in the shadows for years and i remember when we reported on it originally a few years ago it was such a taboo subject that my wicked pedia page was taken down for a year before it was restored as that story came to light well exactly but in terms of the propaganda this notion that it's a myth here's what matt taibbi uncovered looking through these documents he said we also find out here how wall street professionals manipulated public opinion by buying off and or intimidating experts in their respective fields and one e-mail made public in this document a lobbyist for system of the securities industry and financial markets association tells the goldman executive how to engage an expert who otherwise would go to work for our quote more powerful enemies they would work with overstock on the company's lawsuit he said quote he should be someone we can work with especially if he sees that cooperation results in a resources both data and funding while resistance results in isolation absolutely

we did an exposé on naked short selling and that machinery. of wall street the propaganda machine kept that information out of the public domain as best as they could by going so far as to take me off with their p.d.f. before hank paulson referred to naked short selling themselves during the lehman scandal then the genie was out of the bottle now we find out that goldman was actively involved in this obviously counterfeiting is an illegal operation in the american economy but this is the way goldman and morgan make their money they counter fit the counterfeit bonds a counterfeit options account for its over futures contract yes so it's counterfeiting in this case because in this goldman versus overstock case they didn't actually borrow the shares there were no shares to deliver and they knew this so matt taibbi goes on to explain naked short selling saying these hard to borrow stocks stocks that cost money to borrow are called negative rebates in some cases these negative rebate stocks cost so much just to borrow that

a short seller we need to see a real price drop thirty five percent in the stock just to break even so how do you short a stock when you can't find shares to borrow one solution is you don't even bother to borrow them and then when the trade is done you don't bother to deliver them you just do the trade anyway without physically locating the stock so max talk about this in terms of counterfeiting well this is exactly what is the very definition of counterfeiting and when people ask well how does the global economy get swapped with six hundred or seven hundred trillion in derivative contracts and understand that most of those contracts were counterfeit into existence by simply creating credit default swaps which is yet another form of counterfeiting invented a j.p. morgan invented by blight masters there's no collateral behind it there's no economic purpose behind it it's just a way to generate fees purely by counterfeiting i mean counterfeiting almost assuage the outcome of world war two people recall and it was definitely a way the outcome of the financial wars of the twenty first century the terrorist

goldman morgan or using counterfeiting to snuff out some ocracy. well actually. that helicopter out there is not the police this time that's fox news i think they're trying to get take some of our him ok so propaganda they should take the camera down here and get real this is sort of spewing the party learn from the terrorist masters again so anyway matt taibbi goes on with this story looking at the documents and he says in this case that resulted in the absurdity of these like the following disclosure in this document which goldman executive admits in a two thousand and six e-mail that just a little too much trading and over stock was going on quote two months ago one hundred seven percent of the float in was short exclamation point in other words matt taibbi says one hundred to seven percent of all overstock shares available for trade were short a physical impossibility a less someone was somehow creating artificial supply in the stock goldman clearly knew there was a discrepancy between what it was telling regulators and what it was actually doing we have to be careful not to link locates to fails because we have told the

regulators we can't so what do you have to say about this they're lying to the regulators right there live the regulators a korea big supply which is just storing the market and on the flip side as far as the dow jones is concerned they create a big demand with computer trading eighty six percent of computer trading so you have a fake dow jones in an artificially high level and a big artificially low price for gold and silver into that chasm is driving the freight train of reality will take precious metals up much higher in the dow jones and j.p. morgan down to zero thanks so much for being on the kaiser report thank you max don't go away much more coming away stay right there. the rain gear is interesting for the murder. when it suffers. under.

the distances are. predictable. well the room a. secret laboratory. was to build the its most sophisticated robot which doesn't give the doing about anything tombs mission to teach creation why it should care about humans. this is why you should want your only on the orgy dot com. max kaiser welcome back to the kaiser report time now to go to new york speak with francine mckenna francine mckenna welcome back to the kaiser report hi max how are

you ok francine mckenna the whole financial world has got the runs great bank spanish banks j.p. morgan's balance sheet your thoughts well the j.p. morgan situation is still developing i just wrote something this morning about the accounting my feeling is that it's a hedge that's not a hedge i think they're just calling it that but basically they're hedging a portfolio and it doesn't qualify for hedge accounting. they just made a big bet it got out of control they clearly were not in control of the situation all right so as an auditor yourself you would look at this and say this does not qualify as a hedging accounting it isn't back to speculative bet outside of the volcker rule they only call the heads to go around the volcker rule it's a two billion dollar loss now they're saying it's a three billion dollar loss and counting jamie diamond says it could get worse work at the go we're hearing reports that it could get to eighteen to twenty billion

well i can imagine it can go much much bigger the thing is. is that you're talking about the corporate office this is not the area where we should have expected this kind of risky bets and certainly it should be probably the most controlled area it's right there under their nose for them to have gone this far it sounds like they took every kind of control there there is off in order to allow this guy to pay to as diamond said make some money right and once again in london france scene where the collapse lehman brothers collapse made off collapse this trade again in london j.p. morgan collapse there's no regulatory framework at all in london whether somebody's going to step in there and stop the financial terrorism in london because it's destroying the american economy france and i don't know it's crazy i look at this situation and you see just a bunch of imperial c.e.o.'s and way too much confidence put in people like jamie diamond that they've got things under control and instead i think they're taking

advantage of it i said long time ago that they ought to put course zein behind bars there's a lot of other people that are taking advantage we've been writing a lot about aubrey mcclendon over a chesapeake there's a lot of people with their heads a think that they can get away with stuff and they're right they're getting away with stuff right now hedge funds of course sense blood in the water there's a bit of a conflict with the hedge fund community because they rely on morgan for the cheap credit to fuel their speculative bets but at some point one of them is going to break ranks and just go whole hawg in and start to dismantle this take at some point they're all going to follow suit according to game theory isn't that correct i would agree and i think that it's not necessarily true that we should look at some of the other banks and ceiling to see if they're taking advantage of these holes in the regulatory infrastructure to their taking advantage of cheap money from the fed and they're making big bets because they're all in a race to take advantage of it while the window still open a lot of people make

a comparison to george soros that is bet against the british pound i believe it's a one hundred ninety three he pocketed a billion pounds. and as a result of that but it was one guy with a very large credit line taking on the bank of england here you've got hundreds of hedge funds better in on this trade with the buying power in the you know what's called a trillion dollar buying power potentially so that how risky is that one hundred forty billion dollars market capitalization of j.p. morgan stock could this stock go to zero as we saw with lehman brothers i don't know about zero but i think it can go a lot lower j.p. morgan has a lot of problems they've got a lot of legal contingencies litigation against them they've got a lot of other questions about their silver positions they've been sort of immune from scrutiny and from any kind of deep look because there's been so much going on in bank of america and. citi group and now they make one mistake that they have to admit to and hopefully some people will be taking

a deep dive my disappointment is that you've got one auditor back there with m.f. global with j.p. morgan with bank of america and they don't seem to be doing their job at all peter have you see francine you mentioned silver and while j.p. morgan has now been forced to pay attention to their fraudulent accounting on their heads positions in london they have not been able to maintain that naked short position in silver as a result silver is having a huge day on the upside can we hope now that silver will be allowed to trade freely based on that real demand for silver and that once we get this criminal j.p. morgan out of the picture that's i think a lot of people's hope we'll see how culpable is the federal reserve in allowing this debt holik this just this this this degenerate gambler jamie diamond from throwing the country under the bus how couples the fed well i think the fed

and all of the regulators are very culpable because they've been putting jamie diamond on a pedestal. he was the one that supposedly came out better than everybody else out of the crisis and they've been letting him just run wild i think that there's not been any deep look at j.p. morgan and the deep look at jamie dimon unfortunately the shareholders didn't hold him accountable either at the annual meeting this week they revoked it to allow him to hold the c.e.o. and the chairman spot which i think is just utterly ridiculous there's got to be a bigger bigger checks and balances in the board of directors is the first stop the auditors is the second stop and the regulators certainly should be looking at what they're doing with the subsidized money that the fed is providing via basically zero interest rates right well we know america suffers collectively from stockholm syndrome and they fall in love with their captor the terrorist jamie diamond now let's go over to goldman sachs for a second because internal documents this is

a story that matt taibbi has blown wide open over there rolling stone the lawyers for goldman somehow let into the public domain documents that show that goldman was engaged in naked short selling and just for the audience out there. maybe just briefly your thoughts on how that works and are you shocked or was this pretty much expected i'm not shocked at all i think we all know this about goldman and it's a shame people have to see stuff on paper and then still defend it again goldman sachs another peter if you see audit client goldman sachs has been denying that they're the bad guys and we all know that this is how they're making money they basically get in and get out faster than everybody else and doing things like naked short selling and telling people that they have the securities that they need to have borrowed when they really don't. this is the kind of thing journalists certainly live for somebody makes a mistake like this an attorney makes

a mistake like this and something they've been fighting so hard and spending so much legal cash to. prevented somebody makes a mistake and it's all out there as you would say naked for the world to see i think there's probably going to be more to this story now that it's out they're going to have to come back and see if they can spin anything to try to mitigate that damage right so in a two thousand and six e-mail goldman sachs executives trading in overstock a company that they targeted for annihilation using weapons of mass financial destruction they quote two months ago one hundred seven percent of the float was short francine mckenna as an accountant is that the counting on that possible to sell short one hundred to seven percent of all the stock that exists obviously probably not but over stock is not not an innocent party here what's unfortunate is that the case that this is related to is over stock so goldman sachs has the ability to defend themselves by talking about the the the culprit on the other side

it's a crazy thing but one thing god comes out with one thing on revels they'll be something else and it just gives some of us more things to chase after and we'll find it we'll find out eventually but for us the mckenna explained what is the difference between naked short selling and counterfeiting. well i'm not one to say that short selling itself is a bad thing but certainly naked short selling is just it's just a speculative bet and it's it's certainly dangerous in the wrong hands that's very invasive for the audience out there that might not have gotten the picture clear naked short selling is counterfeiting it is the but selling paper that you are creating out of thin air and claiming regulatory safe harbor because the regulatory agencies are sleep at the switch that is unconscionable and as an act of terror any

deserving of the highest penalty the law can provide if not higher i want to get back to this story goldman sachs of course now implicated in major. scandal merrill lynch of course is also involved in this thomas trend fell just saying in two thousand and five we do not borrow borrow negatives i've made that clear from the beginning why would we want to borrow them we want to fail them so once again very own document is very own words talking about the double negative of selling short naked with the effect of causing financial duress what it can is it just because people have never taken in the counting course on wall street or they just outright criminals i think certainly there's a lot of people that don't appreciate the accounting you've got people calling the j.p. morgan situation that had them and they don't really understand that basically none of it and it's very clear in the financial statements qualified for hedge accounting that tells me that it's nothing but

a speculative but merrill lynch is on by bank of america bank of america has its own things going on and they and here did quite a bit from merrill lynch the accounting is sort of relegated to the background and it takes a lot for people to put their mind around that and they nor it if they can just be talking from a trader from a speculative chatter perspective ok once again if francine if you can kind of walk us. through how the links in the system might play out here let's say that morgan goes the way of lehman brothers how would this reverberate in the banking system i'm not so sure j.p. morgan is going to go the way of lehman i actually thought that that was going to be bank of america but i think the problem is that we don't know and we don't know what's under the covers the banks have been very good at not disclosing anything until they're pushed pulled controlled forced and then forced again and certainly the f.c.c. is not been doing a very good job just sort of nudging them in

a friendly way to try to say more they ought to force that hand and then we can basically see what's there i was not for any of the bank bailouts i would like to see the dust settle back in two thousand and eight so we could start fresh instead we just sort of let the thing linger and bought more time but bought more time for what so they can go back to what they were doing before and maybe even worse ok so finally of the remaining too big to fail banks bank of america you feel could be the one most likely to go belly up i still think bank of america is the most vulnerable i think citigroup has a lot of crap but there are smarter than bank of america i think bank of america scrambling and i'm still very very negative on bank of america all right france mckenna right a time thank for being on the kaiser report thank you and that's going to do it for this edition of the kaiser report with me max kaiser and to stacy herbert i was like my guest francine mckenna is going to send me an e-mail please do so and i was

a report at our t.v. are you and so next time i got a saying by all. technology innovation all the developments around. the future every.