any toy. good afternoon welcome to capital account i'm lauren lyster here in washington d.c. these are headlines for friday august third two thousand and twelve jobs numbers are out for july total non-form farm payroll rather employment rose by one hundred sixty three thousand beating expectations of one hundred thousand with the headline unemployment rate inching up a tiny bit from last month to eight point three percent but given seasonal adjustments and birth death adjustments how much stocking you put in these numbers really and how does the election year back during we'll talk about it regardless us stocks rose today after the report sending the s. and p. toward the highest level since may according to bloomberg earlier what is this dog more going to catch up with the reality that appears far more dismal then doctored

economic data reflects we'll try to answer that plus the latest in this rigged game the london whale was encouraged to boost london whale trade valuations according to the wall street journal by his boss while bank of america is in the thick of the live work progress even subpoenas for information from investigators over how the bank set live also r.b.s. has dismissed four employees for reportedly trying to rig lie board and set aside three hundred ten million pounds to deal with the bank's misdeeds so given all of this just a litany day after day of bad deeds by banks should average folks get out of the ring to casino and where can they go let's talk to michael krieger principal of krieger asset management let's get to today's capital account.

by now dear viewers you probably already know the nuts and bolts of the u.s. jobs report from the b.l.s. for july they came out today i mentioned the headline numbers at the top of the show what i'm more interested in is the choose your own adventure story they lend themselves to this is a good jobs report just listen to the treasury market is acknowledging the market certain knowledge that these numbers are a bit better than expected and that's a good thing for the economy. oh wait this is a bad jobs report listen to this of course today we just got a new number from the unemployment report and it's another hammer blow to the struggling middle class families of america because the president has had policies that put american families back to work and i do put them in place to get america

working again. oh i bet you will because the jobs report said so. and that's just how the report is being used taking numbers and the assumptions that went into them at face value that's not including seasonal adjustments the birth death adjustment the very way these surveys are carried out other statistical tinkering so is an accurate representation of the true job situation in this report sure doesn't seem like it is let's bring in our guest to talk about this and what it represents bigger picture along with another you know few things going on right now we have michael principal of craker asset management also author of the liberal blitzkrieg website and he's a first timer on capital account today that i want to welcome to the show thanks so much for being on. hey lauren thanks for having me on and very excited to be here so are we so let's start with the jobs number because this is just the latest

economic data out today that you know it's pretty hard to figure out what we're supposed to take out of it as mike said luck brought up on his blog u.s. unemployment or u.s. employment rather was down one hundred ninety five thousand jobs if you look at the household survey whereas non-farm payrolls show plus one hundred sixty three thousand jobs so this reflects two different ways that the b.l.s. calculates and looks at the labor market so that's just one example of how you can take different stories out of something like a jobs report just depending on what you're looking at so i'm curious if you think this is an accurate representation of jobs and if so which part. well i think what i think the funniest thing about this this whole charade is the fact that we're making such a big deal out of one one report which as you know as you mentioned with the data tinkering and all that stuff huge seasonal adjustments birth death adjustments to make even a big deal about you know one number in the first place is kind of ridiculous what you really need to do is take a step back and really look at all the jobs reports in aggregate that we've been

seeing and you know they have not been positive and the other thing which is interesting is if you look at the bigger trends are under lying these all these drop reports that we're seeing including this one is that you're seeing the civilian labor force labor force continue to drop so the b.l.s. will just say if you're if you can't find a job and you quit looking for one you're not in the you're not in the workforce anymore so i mean that's how they sort of that's one way they think are it which includes happened in this report but also part time employment that's another trend that you're seeing you're seeing a lot of workers taking part time jobs are not getting benefits along with those jobs it's just this continued squeeze on on the american middle class or the employer the unemployed person so you saw that in this report as well so i mean big picture you know this is nothing we're not creating enough jobs to lower the employment rate significantly and people are getting squeezed on their on their wages so i mean to me it's a joke and the other thing lauren which is interesting you mention that you know a lot of market commentators were saying well look at the equity markets as a as

a reason for this being a good report well than someone explained to me why gold was up sixteen dollars today or so if this was a good report and they didn't expect easing right then why would the gold market rally so i don't buy that i don't buy that mean that all i just think it's self-serving for those that want to make things look good right what do you think is the price i'm just curious more philosophically of the fact that things like a jobs report are looked at so intensely for the day that it comes out in this kind of very narrow way when as you as you pointed out there are a lot of assumptions to question about the very way we collect data like this or the government does i shouldn't say we what do you think of the way economic data like this is used to justify virtually any faith if you want. well is that i mean that you bring up a great point which which you see in every aspect of it just in america's political economy right now which is why we're in so much trouble is this short termism like this one monthly job report is supposed to be you know the the the ark or something

you know that we that we look at forever for all our answers and it's going to tell us what everything's happening it's the same thing with corporate earnings as well companies are so concerned about making the number for a quarter they're not even investing in the long term in a lot of cases so it's this it's the short term thinking it's just looking at one quarter or one month. you know that is sort of captured america and in particular the elites in america they're sort of running the show which is which is why we don't confront any of our big big picture problems which is why we have such a stagnant economy so i mean that's that's what i sort of take out of it when you look at this it's such a circus to just be talking about one report which really was a nonevent if you look at the one hundred sixty three thousand jobs that's not even enough to to to absorb the population increases in this country so it's crazy and that's a really good point you bring up which is that in this country you can no longer tackle anything long term because whether it's politics and you're working around an election campaign cycle or business and you're a c.e.o. that's managing earnings and managing expectations on

a quarterly basis you're always looking at the short term picture it's such a great point and you mentioned when you look at that bigger picture it's a much more dismal economic picture than any one piece of optimistic data would suggest you know we had g.d.p. that now it's just inching along and us we have manufacturing numbers that show that manufacturing is slowing down in the euro zone in china just more of a bad picture but yet the stock market doesn't seem to be reflecting at least what i see as the economic reality that it should which is more dismal then these excited rallies that we see so why do you think that is. well there is a there are a lot of reasons for that but one of the things is investors are very aware and they've sort of been conditioned on purpose by the central planners central bankers to to basically not sell you know when you're if you're a huge mutual fund company and you're managing let's say trillions of dollars hundreds of billions of dollars you know you can you're not going to just want to

be in and out of things you're going to if you're going to sell your to make that decision based on you know a six to twelve month view and what we've seen is whenever the market has any sort of sell off whatsoever one percent two percent that's like it's like the end of the world now for the central planners and what do they do they do a drug you did last week they come out and they start spouting and they start threatening and they start saying they're going to print money and so all of these things are very much in the heads of investors and they don't feel like they need to sell but the other thing warren is that if you look at and i've made this point before it's actually very few stocks that are holding up the indices we all know about apple that's been a huge that's been a huge stock just in general but but also if you look at like a wal-mart which i've written about i mean that's essentially a food stamp play in some of their stores as much as forty percent of their revenue is actually food stamp money so so what you're seeing is it's investors are crowding into these large cap dividend paying stocks as

a place to sort of hide and have equity exposure but think that their risk is limited to the downside so it's actually a very few stocks that are there holding the market up and that's so interesting because you have government in every way that influencing it whether it's the food stamp play a wal-mart or the hope or despair or just the expectation of what central bankers are going to do i want to ask your opinion on on what this dynamic means to people getting out there thing i don't want to play i want to bring up a story that came out earlier this week hedge fund manager bacon lewis more bacon and he he said he's given back two billion dollars and made constrained markets that this is twenty. percent of his main hedge fund have given it back to investors saying it may be too big for him to achieve past returns as liquidity and opportunities have become more constrained now bacon from what bloomberg reports seeks to exploit economic trends this is his method of making money and to me

macroeconomic trends as all about central bankers policymakers what they're saying what they're doing and how much they're influencing everything so what role does that have in people saying i'm out i don't know how to play the ben bernanke he indicator. right so so basically i mean most people that go into the investment business or have gone into the investment business you know they're in it to look at companies to to for to invest in corporations right bet against them but in favor of them changing dynamics on the ground but you know at the moment you're seeing a lot of macro fund manager saying this sort of thing you know it's not it's not fun anymore the business isn't what it used to be it's not it's not about looking at companies and trying to invest in them it's really all day every day what you're thinking about is what are the central bankers going to say next or what are they going to do next and that's you know not why people got involved in this business to begin with so you're seeing professionals believe you're seeing the retail investor as well leave if you look at the outflows from equity mutual funds i mean it's been consistent for for over a year now just

a flood of money out of them actually into fixed income funds as people just don't want to play the game anymore and quite frankly i don't blame them you know i know sometimes i'm going into a stock trying to buy a stock or sell a stock and i'm not trading that much volume i'll move the thing i mean that's scary that's scary so imagine you know if you're if you if you if you're running ten billion fifteen billion or more you know you can't even play in a lot of names anymore there's just no one there's just no one else to take the other side the liquidity is so bad i mean the i don't professionals you're in a really bad situation though when professionals and and the retail public both think it's a rigged casino and don't want to be involved and that's where we're at now unfortunately that is an interesting point do you think that politics and the economy are linked in a way i sense a politics that rather policy and the economy are linked more inextricably than ever before or are have there been other times like this and we just have a minute number going to go to break. ok i mean sure there's been other times like

this but i believe we're the key point historically not just economically but politically as far as the monetary system itself right the one that's been in place the one that's in place since one thousand seventy one is the paper u.s. dollar floating currency system which i believe is breaking down now the power structure does not want that to break down because that is the source of their wealth and power and prestige so they are of course doing everything possible behind the scenes politics con to be manipulations to keep this game going the way it is but my belief is it will be it will it will have to be changed completely aha only get back maybe we'll find out what you think needs to happen to be to change that we're going to have more with michael krieger principal of creator asset management in a minute and still ahead you responded now i'll answer check out if your comment caught my eye this week and viewer feedback i'll respond to your meltdowns over some gender stereotyping comments you allege i made earlier this week but first your closing market numbers.

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download free blogs just plug in video for your media projects a free media dog r.t. dot com. welcome back before the break we were talking about what my guest says is a rigged it system which both professional investors and retail investors now believe is rigged i want to talk now about who is doing the rigging besides central planners because also we have to look at the too big to fail banks as more come out more news comes out into the live war probe and the attempts to rig lie bore we now know that bank of america just got subpoenas for more information into how they were dealing with live boring and submitting their submissions in addition r.b.s.

is just another example they've left four people go reportedly for trying to influence live bor and also they've set aside a huge chunk of cash to deal with misdeeds of which libel rigging is one so i want to bring back michael krieger principle of krieger asset management and guess what folks he used to be one of those guys on wall street that took big firms so maybe you can give us some insight into that his past life that is so michael kroger i do want to ask you know we talked about central planners what role do too big to fail banks have in the rigging of this system and how that affects everybody else because like i said we have new revelations about libel or also the london whale trade we just found out according to the wall street journal and some sources that talk to them close to the investigation they say hey guess what the london whale boss was telling him to fudge a valuation so how does this impact the dynamic work we're discussing. ok yes so so too big to fail banks ever since i decided to leave wall street i never work i didn't work at

a too big to fail bank i worked at sanford bernstein before i decided to resign but . i have said i said it then and i'm sad i've been saying it for the years sense that these institutions these too big to fail banks are the most are the most dangerous possible entities that you can have on the on planet earth and danger to civil liberties our country the economic future every everything because they now are protecting their power and influence by doing manipulations and national machinations in the market of course what they'll do is if they don't get their way for example like let's say because you know that the executives of course these banks talk to the central planner in chief ben bernanke in his and his minions and of course you know he'll ask the banks you know what do you think what should we do and if the banks throw a hissy fit you know and they're not going to buy or they're not going to support the market or they're not could do a lot of these things that the fed and government rely them to on them to do to kind of make things look good you know things could get under rule and nobody wants

that so they kind of have a gun to the head it's like everyone sort of has a gun all these all these power structures the central banks or the politicians and the banks the too big to fail they also have guns pointed at each other's heads saying if you know if you mess with me i'll pull the trigger and in the banks of course a key role in that because they are the gate keepers of the of the financial system absolutely and what they do in theory is not what they do in practice which is another weird dynamic to this the fed can say hey we're going to create money we're going to stimulate the economy but they're just trusting or thinking that banks will do what they're supposed to do in theory which is lend it out instead what they've been doing is just telling you right back to the bad. well oh go ahead and do you want to add something i'm just going to say like like joseph stiglitz said which i thought was a great quote he said a good banking system is a small banking system and that's the point right supposed to lend out money it's supposed to be sort of like a utility you know banks were never supposed to be these big. leveraged hedge funds essential and that's what they are right and yeah i mean we don't even have a need to call them even banks it's crazy so that's that's the key point that i

really want people to go through their heads through their they're basically economic threats to the economy monstrous threats to the economy would be a better way to describe the big banks i think you know as far as political options looking at the ones that we have for president of the united states mitt romney and obama i know wall street has thrown more of its money behind mitt romney this time around last time they overwhelmingly supported obama in the previous election but i don't really care about that when i look at their policies they look at exactly the same when it comes to the big banks dodd frank don't give me that that that's a bomb going after the banks it looks like business as usual for the big banks to me it's the small guys that get crushed so is there any kind of option for the american public in dealing with what you say is the most dangerous thing facing them these too big to fail banks. no no absolutely not i mean they both they both understand as i was saying before they both understand that if they go sort of after the banks you know the banks will just sort of let things crater and not you know protect the system and make it look good and then and then they're in trouble

so as president is sort of beholden to the banking system that's the big problem we have the like you know for me the big issue that i always say to people is this is if you look at the the topics that are never discussed by the two main political parties and the leaders of them which would be romney and obama right now it's those things that we need to be discussing the most which is which is an aggressive foreign policy it's protecting the too big to fail banks it's an erosion of the bill of rights and civil liberties it's supporting the federal reserve system all of these things obama and romney are completely in agreement on and those for most important issues in america today we're not even going to discuss them with these two candidates and that's a real tragedy for us and i know in that regard you wish that ron paul had not tried to run on the republican ticket but would rather have tried to compete as a third party candidate but what difference do you really think that would have made because there's a lot of blocks to actually running as a third party candidate difficult to get on ballots this country is wired for

a two party political system so how do you both move the conversation forward in a way that matters the way that i would say ron paul has with issues of the economy the fed sound currency but also actually be a viable candidate actually be competing for the title you want yeah. sure absolutely and i'm under no illusions that if ron paul you know ran that he would that he would win i mean i don't think he would have but i mean it would have been an interesting run the the point is right the parties are also rigged to not allow a guy like ron paul who is a threat to the establishment the status quo to ever get anywhere so but but but even even even with that you saw everyone else saw how effective ron paul was still in getting the minds to open up in bringing issues that weren't being discussed in american politics to the fore. so so my view would have been this is his last hurrah right he's retiring from congress this is it what he should have done is gone to the wires a third party candidate because at the least right even though he wouldn't win he would be up there right now he would be talking he would be engaging people people

you know people like me who are very passionate about issues that he's passionate about and you know are now sort of the more alive is going into this election in the sense that we're not you know at least this way we would have high spirits and you know be donating money be having conversations with people now i mean what there's nothing to talk about with obama and romney so it's sort of like we just have to suffer through another one of these pro wrestling dog and pony shows which is become what it which is what american politics has become it's almost like what you were talking about with investors throwing their hands up and saying i don't want to play with politics it's the same thing because it's a rigged game it's a two party system that at the end of the day on a lot of core issues has the same kind of policy and it really excludes other options so i appreciate you being on the show was really interesting talking to you you're going to come back that was michael krieger principal of krieger asset management. thank you.

all right it's friday so let's end on a light note the meltdown that some of our viewers had on you tube over my biased stereotypical statements on gender earlier this week when dimitri and i were discussing the impact of having women on boards of directors and how that impacts positively a company's performance so byron and five wrote on you tube lauren at twenty five ten which is the part of the interview where we were talking about this you busted on dimitry for stereotyping women but then you immediately proceeded to stereotype just as strongly women are harder workers really there were a lot of comments like this and you know what i know it would be easy to say lauren

is just stereotyping and i know our audience is largely male so it probably is a tough crowd that i'm playing to anyway but this is actually substantiated by the fact folks here is a survey from the fit career site which tries to do some real accurate reporting on what's going on in the workplace and they found that fifty four percent of women worked nine or more hours per day versus forty one percent of men ok so that backs me up eleven percent of women work six to seven days a week compared to seven percent of men look that backs me up too and sixty eight percent of women work on vacation including checking e-mail taking calls or they just don't take vacation at all versus sixty two percent of men so there are a few cold hard facts backing out my stereotypical statement so i just wanted to make sure you know i was running my mouth like a crazy person. moving on sam and her on this week are sam and was on our show this week he is a former fraudster white collar criminal who now is reformed probably because he

got caught and he told us what he thinks would really deter white collar crime fraud at the big banks he said jail just isn't really a deterrent because criminals don't think they're going to get busted so gloomy found a way around that he wrote execution is a good deterrent well there's nothing really i can add to that i'm not actually for capital punishment but i do appreciate your creativity and getting around that barrier that sam laid out now carter one hundred two wrote i wanted to respond to this he said doug casey would be a great guest this is a really good show and will thank you for the compliment and guess what doug would make a great guest in fact he did make a great guest he was on the show last week you can catch our entire interview with him at youtube dot com slash capital account was totally enlightening this comment i just had to bring up because i just loved it sorry this is a little bit of a brag but our viewer said this program is like dark chocolate it's good and good

for you so. thanks and magic to hans wrote another song on our comment boards that i thought i could end on because it's friday so what would be a friday without me doing something to make myself look stupid he says sing along to the flintstones theme so i guess i'm going to banks there's me the banks toure's there are a modern mafia family from the town of new york they manipulated me trading bonds or securities make lost i can't do the rest but i gave you enough so. i did enough to get a fake applause so i guess that makes it better and just before we go last week we had our first ever co-hosting between jim records as my cozen studio and a guest at a studio and a viewer said this is the best episode i've ever seen records and rule another said best show yet well done capital count so i am so glad that our first ever special

guest co-hosting endeavor was a hit will definitely try to do it again and on that note i'll leave you because that's all we have time for thanks so much for watching and do make sure to come back next week for a fresh week of awesome shows and the meantime you can follow me on twitter at lauren lyster you can give us feedback on the show any you missed see that doug k.c. interview that our viewer wanted to see and subscribe that's at youtube dot com slash capital account you can catch us in h.d. on hulu and you can go have a great excellent weekend getting your dose of capital count online until we're back here with more on monday have a good night. for .

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