eleven thirty pm in moscow these iraqi headlines turkey admits it's war plane that was taken down by syria may have crossed into syrian airspace threatening to set the already volatile region on fire a. live video from cairo's tahrir square which is again filled with angry voices as egyptians still don't know who their next president is and fear the delay and results could be used by ruling generals to bargain for power. and a decision on julian assange asylum still pay day with ecuador saying it has to talk to all parties involved but stresses it won't bow to any pressure. kaiser report up next stay with us here on r.t.

. hi max kaiser this is a kaiser report dangerous oh my gosh so dangerous who's the most dangerous maybe in the world why if the kaiser report states that ever 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 writer that's right ever and we make it difficult for them 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 dicaprio 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 rode in with the liberal democrats on the platform of banking reform if that's his reform vince cable want to just give him a big wet kiss you know the middle of the frogger square and promise your undying support just don't penalty events think think a little more creatively buddy 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 at r.b.s. . yes and you've been bailed out by the government and you have the frog 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 but won't 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 dimon 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 will 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 flow there is a fraud flow flow of 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 there of 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 should 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. or max maybe they should also try to just avoid local headlines and actually put a stop to fraud well i mean if you're saying that fraud training 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 does a trade of the exchange of 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 then 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's jamie this presidential couplings stashing around she going to

then giving get a coded messages like by this by that here's 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 is a performance artist a fraud but off broadway but just about put it to two 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 infected 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 bill of

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 diamond 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 british society in general and the bank it is plain mean we're bankrupt no you just haven't collateralized enough cheese this is the big problem in italy when other earthquake other 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 our phones 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 associate 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 that's a group of monks max wire 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 my 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 lent 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 positions over and that's why when silver price goes up they don't 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 tangibles a thing 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 has dropped incredibly or group on which is 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. where all that capital was mis 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 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 bank accounts are and they're pushing allergenic businesses and the result will be a cancer ridden economic corpse from which a new economy must be born security thanks so much for being on the kaiser report

thank you go a much more coming away stay right there. been living this way the seventeenth century. strict. their communities. they clearly distinguish between their. guard their families and things and the treasure. you know sometimes you see a story and it seems so you think you understand it and then you glimpse something else you hear or see some other part of it and realized everything you thought you knew you don't know i'm sorry welcome to the big picture.

back to the kind of the record i maximize or die now you know doubtless being a college professor because it gave your hero. back hi. 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 gray somehow had some say as to whether or not they default or exit the euro isn't default an exit the only 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 greece doesn't matter what the outcome of the current elections would be and it would be very clear that greece needs to write down at least two hundred to one hundred fifty

billion over its government and this is before we actually start even talking about growth all this isn't growth oriented the forms that's right down not take place through the issue new instruments we have seen that this type of an approach does not work in the second so-called they allowed for greece we have seen that given the. favorable conditions doesn't work in the first case either in the first bailout so it's very clear that. actions and that is the road towards default most likely it is now also given this bleak inability to go if you want the environment in greece given the very clear. between the rural constituencies and urban constituencies between left and dried 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. all right casting time to play a bit of

a thought exercise here let's talk about the irish government had they not decided to bell out the unsecured german bank creditors of anglo irish bank if they had been germany that would have been forced to transfer a bad bad to their population rather than ireland is that pretty much the way you perceive it it was a choice between whether germany. 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 the assume that on there is the outs 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 an alternative impose in the course the resolution of the insolvency onto the shoulder is orthodox there's in germany or somewhere else within the euro to shoot her out across europe not just in ireland is that the insolvent bacon institutions and the investors who are they going to gamble and have lost on the books should have been there to go to the wall they should have been structured they should have been sold they should have been broken to pieces and their assets the proper insolvency the shims should have been allowed to work and therefore the cost of the spare should have been minimized in the my view it would have been minimal anyways simply because the only thing that there was the government in germany or in ireland today needs to do is underpin the system or dimple and that's all there is too far it's 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 assembled there is an asset and a liability for the bank their liability because the bank has to fund them in their markets so writing 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 commission of some of them is the property structure of 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 europe. to get back to the issue here the government in ireland could have simply told angle irish go deal with your creditors and 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 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 suffer 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 does more loans it's a bit of a party's game how much longer can that go on well it's over now it is absolutely and comprehensively over now we have seen with the spain 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 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 there's 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 principle of money in the current 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're really looking at the station where there is not enough debt 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 with consistency consistently misdiagnosing the problem the problem is very simple the problem is accumulation unsustainable rapid accumulation of as the share of their comic 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 the globe i'm not just european not just irish or american with 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 and there is an else and these allow beyond just pertaining to the promises made to the people of those countries some of the special security systems some of their care expenditure and so forth i deeply insolvent those liabilities are a nexus or 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 or bungle arctic scale makes absolutely no sense are a constant thing i'll 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 surely limits would be collateralized by gold to have one of 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 change 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. 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 cull 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're 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 colossal realize that which is super senior to super senior that this 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 go gold standard the countries have gone off the gold standard and the euro far afield money soul of the on the premise that gold standard have tied the hands of governments to spend beyond their control beyond their taxation system so is that is out of. the entire crisis that we're

witnessing today is predicated in part on the same force which is if you need to exit from the gold standard going back onto the gold standard light levels of us thirty you can argue whether they're necessary or not wish the european economies and the united states and the rest of the advanced economies are currently on with them 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 jane going yeah 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 you're saying bye are.

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