don't keep don't come. welcome back you're just in time for a recap of the headlines turkey admits it's war plane that was taken down by syria may have crossed into syrian airspace in an incident threatening to put the already volatile region on. square is again filled with end we voices as egypt still don't know who their next president is and fear the delay in results could be used by the ruling generals to bargain for power. and a decision on julian assange his asylum is still pending with edward just saying it has to talk to all parties involved but stresses it one ball to any pressure. and now it's time for the bankers to take cover which can mean only one thing it's

a kaiser report. hi max kaiser this is a kaiser report dangerous oh my god it's so dangerous who's the most dangerous maybe in the world why it's the kaiser report it's a server max kaiser that's true indeed and you look very dangerous sitting there in moscow the twenty five most dangerous people in finance max according to josh brown downtown josh brown the reformed broker dangerous in a good way though he says these are the financial media players who are making things very difficult for the establishment to maintain the status quo because we try to have their way allow the banks and other corporations to write the laws that make all of our decisions for us turns out that's not true democracy or capitalism it's something else entirely and we've all had enough these are the folks leading

the charge to take it back number one max keiser and stacy herbert the kaiser report pro that's right ever and we make it difficult for a van to maintain the status quo to maintain the illusion of free markets to maintain the illusion of efficient markets these markets are not free they're not efficient they're being manipulated for the effect of the wealth transfer to the very tip but it's a pretty top and this is causing huge social dislocation strife and revolution and it all goes back to these bankers that are not being adequately covered by so-called mainstream outlets in the united states and around the world you know while we are the most dangerous people in financial media there are a lot of the least dangerous people competing in our headlines max this cable r.b.s. report recommends prosecution. so vince cable is poised to take action against fred goodwin and a small number of other former royal bank of scotland directors as

a direct result of the banks collapse guess what max mr cable secretary of state for business innovation and skills is to pursue the former bankers by moving to disqualify them from sitting on company boards in the future sure a different good when of he's one of the main characters and the countries around the world have their capital to capital the main guy whether it's diamond on wall street or fred the shred goodwin in the u.k. these are the really the pillars of the global banking catastrophe that they are castrated but i mean come on vince cable he wrote in with the liberal democrats on the platform of banking reform if that's his reform vince cable wants is just going to get the big wet kiss you know the middle of the frogger square and promise your undying support just don't peddle the events think think a little more creatively about it well max compare it for example to allen stanford gets one hundred ten years in prison for seven billion dollars ponzi scheme the prosecutor had called stanford arrogant and rewards list prosecutors said he used

the money from investors who bought certificates of deposits or c.d.'s from his bank on the caribbean island nation of antigo to fund a string of failed businesses bribe regulators and pay for a lavish lifestyle that included yachts and a fleet of private jets and sponsorship of cricket tournament now compare that max to fred the shred the f.s.a. report investigation into the collapse of the royal bank of scotland said he had just made some poor decisions and this is exactly what allen stanford had argued and his he had he had invested the seven billion dollars in just bad business decisions well r.b.s. bought you know a.b.n. amro it was a bad decision but also according to the f.s.a. report into the collapse of r.b.s. it said that the bank had a weak capital position it was too reliant on short term wholesale funding well if your friends assure it at r.b.s. . yes and you've been bailed out by the government and you have the profit of of

calling you know a watermelon smash at the bottom of a garbage pit collateral that you're going to base your ponzi scheme on and that's ok if you're sanford then stanford then of course your definition of collateral falls outside of what the insiders in the government are allowing you to call the definition of collateral and that's a ponzi scheme but they're both policies games and they're both resulting in collapse and the bottom line here is i think what we're saying that regulation needs to be regulated by outsiders and not the bankers themselves these bankers at r.b.s. and other bankers they regulate themselves which means they can point to you know a dead rat on the street and say that's a collateral for a multi hundred billion dollar loan of the something you can do about it well now the global economy is falling apart there's deflation is ravaging the globe because dead rats are not sufficient collateral to hold up the entire g.d.p. of the world let's turn to some other of the least dangerous interrogator's financial interrogators in the world so jamie diamond appeared before the house

financial services committee and the headline before he appeared diamond faces harsher and crazier house crowd in second round the house hearing will take more time will be nearly as controlled as diamond faces more than sixty lawmakers most of whom are up for reelection in november and motivated to capture local headlines so i can take jamie down jamie diamond down in two senses basically just say show us the collateral on your books that supports your multi-trillion dollar balance sheet and of course we'll be incapable of producing the collateral because it's all been hypothecated or re hypothecated there is no tier one capital at j.p. morgan there is no there there there is no foundation there is no supply and demand there is slow there is a fraud flow flow and fraud which they value that one hundred forty billion or so. dollars in the marketplace but there's no collateral that doesn't exist at j.p. morgan and they're up you know jamie diamonds on canada our other countries job

owning other leaders that they should reduce their capital requirements on their books now that should not be should be the other way around the rest of the world to be attempting to impose minimum capital requirements on j.p. morgan because right now the good the the book value of the company as reggie middleton has said on the show a few times is a less than a zero. max maybe they should also try to just avoid local headlines actually put a stop to fraud well i mean if you're saying that fraud shredding the new york stock exchange or whatever price is trading at they should put a stop water in and they touch stuff rather should be blown out of it i totally agree with it but morality doesn't trade on the exchange for all it doesn't trade of the exchange or jamie down into the sea he only sees stuff that puts money in his pocket every single day based on not having any collateral on his balance sheet that he goes in front of congress a member of congress is there to hear insider tips because insider information is legal in washington they're not there to grill jamie diamond they're there to tease out insider trading tips that's all about the corruption is between washington and

wall street now they just bring bankers up there to tease out the inside information there is jamie this presidential couplings stashing around she going to then giving get coded messages like by this by that here some inside information completely breaking the any sense of any securities act of thirty three thirty four anything that's ever come after that just breaking it willy nilly and calling that something is a performance artist jamie diamond he's a performance artist a fraud but a man off broadway but just him up in a tutu and i won't tell a story downtown where a lot of audience is going to applaud his brilliance and interpret the securities laws in an artistic way but it's nothing to do with the law well max speaking of greek tycoon. facing lax regulation you know jamie dimon is from greek ancestry we have a special report how a greek bank in fact in cyprus like many greek tycoons these days andreas vegan poulos is in trouble this is the marfan popular bank in cyprus which is collapsing and threatening to take down the cyprus economy with it the scale of marfan's

problems poses difficulties for the cyprus government and a parliamentary session on may seventeenth they voted to help the bank villa capital shortfall estimated by the bank of the country's finance ministry and nearly two billion euros the money needed represents a tenth of the country's g.d.p. max right this capital shortfall again some collateral that the banks have on their books minimum capital requirements obvious. slowly bring jamie dimon down there to consult and he will convince the government that fetiches is collateral now based on fetiches collateral to spank is over capitalized this bank should start making fetiches collateralized loans immediately then goldman sachs an issue called fetiches collateralized loan secured bonds to sell to european banks put them on their balance sheets and then six years from now they'll write the sort of aaa rated fed a back collateralized mortgage bond anymore i mean our banks being pretty sorry general and the bank is plain mean we're bankrupt no you just haven't collateralized enough cheese this is the big problem in italy when other earthquake

a lot of parmesan cheese was destroyed that's the collateral for the entire telling banking system that's the real tragedy going on there well the local joke in athens is that marfan popular bank which is part of marfan investment group there is a joke that m i g which they referred to the company as stands for money is gone now greek banks require thirty to fifty billion euros in bailout and this guy vege enough pulis denies any wrongdoing but his travails shed light on a factor largely overlooked in the narrative of the greek economic crisis which is now threatening to force athens out of the euro zone and unravel the currency along with the debts many greek banks built up by lending to each other and to associates so max once again with this benke. we see a golden circle of friends in this case the golden circle includes a group of monks what yes that's a group of monks max maher from popular bank was

a major lender to an order of greek monks who received swathes of prime state owned land in sweetheart deals and who in turn bought shares in m i g a greek parliamentary inquiry alleged serious conflicts of interest and how bank loans were used to finance m i g.'s wider activities and max this group m i g bank they. loans apparently these monks were major players in the stock market and they. bank lent them but they also lands loads of other tycoons in greece they loaned them money in order to buy shares in the bank right here is a classic ponzi scheme we've seen in iceland they got penalized for it but big of the u.k. big in the u.s. you loan money to big guys who end up buying stock in the bank to support the stock price and then the stock price is used as collateral to support more loans now the case of j.p. morgan as i mentioned they're using their stock prices support their naked short position and so over and that's why when silver price goes up it will topple the

bank utterly but what the monks what i suggest is they take themselves public and they do a public offering in the new york stock exchange it could be months incorporated and it's backed up by the monks belief that the collateral that they hold in their books is worth something per their spiritual beliefs that's about as tangible is anything on any other bank's balance sheet so go public get some idiots in new york to take a public whether it's facebook which is drop incredibly or groupon which is a disaster is ingo which is a catastrophe to be a monk it's a spiritual social networking play a value would have one hundred sixty billion dollars what could go wrong but max this golden circle of friends who receive massive loans from the head of the bank is also what caused the crash of anglo irish bank and therefore the i.m.f. bailout of the irish people and with that in mind i want to talk about this point here in this article minola bed in de onis just retired m.p. with the greek socialist party said it was clear there was a lack of substantial regulatory control on the banking system loans were often

issued based on a network of personal relationships starving those in the real economy small and medium businesses of farmers and access to finance so this is what happened in the ten years leading up to this global financial catastrophe is that all these golden circles of guys around the world. were all that calcutta always missed allocated to them and therefore the real economy collapsed people lost jobs they were lost real wealth and therefore they don't have the money to bail out the banks that speculated their wealth away right in banking circles is called a ponzi scheme in nature we call it cancer cancer is a it invades the body it's a you know it starts to eat the body it is evermore the body to support itself the crowds out all the functioning aspects of the body and it kills the body kills the host same thing with these bankers around the world they're a cancer and they're pushing our legitimate businesses and the result will be a cancer ridden economic corpse from which

a new economy must be born say spirit thanks so much for being on the kaiser report thank you dr way much more coming away stay right there. we'll. its technology innovation all the developments from around russia we've got the future covered. back to the kind of the record highs are done out of dublin to speak of the

economist professor cause a. problem came back crying three or thank you marx delighted to be with you guys all right constantine in the run up to the greek election the media the politicians of the world acted as if the voting population of greece somehow had some say as to whether or not they default or exit the euro isn't default an exit the. only a future in store for greece not only it is in store only for greece but it is also in store for the rest of the eurozone by and large of course we have to qualify what we mean by default in the case of greys doesn't matter what the outcome of the current elections would have been in with a big very clear that greece needs to write down at least two hundred to one hundred fifty billion of its government debt and i says before we actually start even talking about growth all this isn't growth oriented the forms that's right down cannot take place through the issue new instruments we have seen that this type of an approach does not work in a second so-called bailout for greece we have seen that given loans on favorable

conditions doesn't work in the first case either in the first bailout so it's very clear that greece is still on the very same road as it was before the elections and that is the road towards default most likely it is now also given this bleak inability to go if you want environment in greece given the very clear talent between the rural constituencies and urban constituencies between left and right start as was the borders and change the borders it's very clear that now that he's is on the road towards that disorderly default you fold where it will be unilateral it will be brutish and it will be very abrupt. erica ascertain time to play a bit of a thought exercise here let's talk about the irish government had they not decided to bell the unsecured german bank creditors of anglo irish bank if they had been germany that would have been forced to transfer

a bad bets to their population rather than ireland is that pretty much the way you perceive it it was a choice between whether germany for. kicks the debt standard their population but the choice was made not to let that happen but instead to have anglo-irish debts be assumed by the irish population is that a fair statement in my view the proposition that you have put forward is correct up to a point it is there in the sense that there are stocks there's a ceiling on there is that out of the banking system all to the international investors international bond holders foreign investors and foreign banks that is true but i think it is also not necessarily correct to present that term to impose in the course the resolution of the insolvency or to the shoulders or ducks there's in germany or somewhere else within the euro to shoot her ross you are not just in ireland is that the insolvent bacon institutions and the investors who have taken

a gamble and have lost on the books should have been there gone to the wall they should have been structured they should have been sold they should have been broken to pieces and there. the proper insolvency visions should have been allowed to work and therefore the course the spare should have been minimized then the my view it would have been minimal anyways simply because the only thing that there was a government in germany or in ireland today needs to do is underpinned the system or to pull and that's all there is to flores the liabilities as far as the assets of those institutions go in fact you can make an argument that in countries like. ireland there is a room there to use the insolvency on the balance sheet of the banks to dissolve the insolvency on the balance sheet of the households because remember household loans are simultaneously asset and the liability for the bank their liability because the bank has to fund them in their markets so right in down the debts of

the banks when they become insolvent allows you to write down the assets of the banks such as household loans we could have had the combination of some of that is the property that is structurally the bank and sector in europe making it truly open truly competitive as capitalism should require and at the same time help the household as well we've chosen the worst possible scenario whereby the taxpayers here in the entire burden and yes you're right it is the small country there's a part of them that are carrying the burden for you. to get back to the issue here the government in ireland could have simply told angle irish go deal with your creditors in germany and we're not going to backstop your loans this would have avoided much of the austerity in ireland some share it would have been better for the irish people had have they got their government not sided with their german creditors all right now up to sixty billion euros is going to greek banks as in ireland in iceland before it

a small group of bankers apparently gave generous loans to each other and their golden circle of friends how much longer can we peripheral nations afford to start for the debts of these cronies and their unsecured creditors so there's a golden circle of loaning money to buy stock in the bank that goes higher uses collateral deaths more loans it's a bit of a ponzi scheme how much longer can that go on well it's over now it is absolutely comprehensively over now we have seen with this pain in the last couple of weeks that the contagion is no longer implied it is actually physical and real we're also a scene now with cyprus being made in seoul but by the crisis outside. with borders by the crisis in greece and particularly the banking system and sovereign system so there is not really any road left to kick the can down i mean we're in the open field right now in the can as as flawed as it can be. well the folks at the g. twenty meeting which is become the most important international gathering these

days they seem to believe that they will come up with a solution similar to what we just talked about a minute ago that there will be a new global credit facility some using the i.m.f. as a new central bank to float trillions of of paper to restrict characterize all these loans possibly backed by the special drawing right which is the currency of the i.m.f. and this has been growing in importance over the last ten years this is what they believe that and so far given the recent history of these crises over the past twenty years it's hard to make a case that they won't be successful your thoughts no i don't think there can be a successful ultimately and you know there's well as you know i do every piece of that every liabilities such as the house to be backed by something real in the economy even the printing of money in a current fear system is still a bond that the exercise when you talk about the banking system whereby the fifty

banks around the world right now all the banks hold more than three times the global g.d.p. in terms of assets you really are looking at the station where there is not enough debts that they can print them surely without turning the entire global economy into one big zimbabwe you know that would solve any sort of the problems the thing about it is that we keep consistent and now it also does well i agree with you completely consistent consistently misdiagnosing the problem the problem is very simple the problem is accumulation of unsustainable rapid accumulation of as the share of the economic activity and there's the driver of economic activity for. the last twenty five plus years depending on the country to start with in italy it's over forty years now so as a result of that way into global not just european not just irish or american but global prices if you look at their unfunded liabilities almost all of the countries

around the world advanced economies right now in terms of their unfunded liabilities on top of their existence there is an else and there's a lot of bill just pertaining to the promises made to the people of those countries some of the social security systems some of the care expenditure and so forth i do believe insolvent those liabilities are a next and so three times those countries g.d.p. is in the case of greece it actually is ten times in case of ireland it's over four times you know some countries have less some countries have more but on average it's about three times so we've never reached the corner of those countries to the level of three times on the future promises plus about two and a half times on the current promises five and a half times never again with no absolutely upside potential from it because this is. it doesn't make any sense the proposition we should have been more there that the global scale pangle arctic scale makes absolutely no sense constantino or get into the idea of a pan galactic securitized bond even though that's very tempting to get to dive

into that but what do you think of the idea of floated by germany for a european redemption fun in which debt above the master truly limits would be collateralized by gold do they have enough gold. they better do it. again this is yet another system whereby you park the way that they are and you pretend that they somehow disappear because you changed the collateral even at the financial kind of from financial science point of view and i use science in a very loose terms of course here if you think about collateralized pools we've seen what happens with collateralized pools when the actual on the lines. the value changes you have to keep it alive isn't it so the european union my capitalized the pool the current valuation of gold when inflation happens or gold price changes the pool will have to change again you have to cut capitalize it with something else the collateral is never really food security the other thing is also if you create

the collateralized that means that you are creating a super super senior in a sense that we're already have in europe that the i.m.f. and troika which is super senior over the solver and they're now we're going to have a collateralized debt which is super senior to super senior i think the complexity of this structure translates directly into the yields into the boards on the ground so for example in the system like that what will be the sustainable long term yield on italian ten year bond if you take today's figures of say six point two percent six point three percent you have to are the premier for overkill and you lose a ship or so obviously you increase seniority on kolaches ation as a result of that you're looking at the least thought in terms of the cost of borrowing for the sovereigns across europe in the future as well i mean that once again there is no way over skaven very simple problem where you have too much that you go into how to structure right while having the price of the underlying

collateral gold in this case change is not necessarily a bad thing it's what kept the world economy growing for decades under the classical gold standard it's called the gold standard and that seems to me where things are going anyway where they came from regardless because nobody can sustain these ponzi schemes of paper forever that is absolutely true except let's remember why the countries have gone off the gold gold standard the countries have gone off the gold standard and you're a fart if you have money so all of the on the premise that gold standard have tied the hands of governments to spend beyond their control the year on their taxation system so is the result of. the entire crisis that we're witnessing today is predicated in part on the same force which is if you need to do that from the gold standard going back onto the gold standard will imply the levels of us there are at it you can argue whether they're necessary or not wish the european economies and the united states and the rest of the bonds the quantum is are currently on willing

to undertake this is why the idea of the kind of collateralized pools for storage of boards of all those bonds away is not really going to be politically feasible from the. wealth of your state a lot of talk about the gold standard another day because rather time thanks so much for being on the kaiser report card and team going to have thank you any time and that's going to do it for this edition of the kaiser report with me max kaiser and stacy herbert our thank my guest constantine gardere because i mean email please do so at kaiser reporting r t t v dot ru until next time by our. own home.

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