greatest power on the planet economically militarily etc and in order to maintain that power we're literally feeding on ourselves and building up enormous debts and and regulatory structures that are that are are making it difficult for us to to even maintain ourselves yeah yeah let's bring up the u.s. debt because that's a really big set of antlers the u.s. has in terms of how it's grown and becomes so over sized so what eric though because we're not seeing this in treasury yields what are the maladaptive traits that we see developing as a result of these huge debt outliers. well i think i think what's happening in the treasury market is something that may not be directly related to two maladaptation it's rather a response by investors to changes in the marketplace so as your guest jim

graham brought up last week there is a bubble in safe haven assets and i endorse that point of view so you have negative yields on five year swiss bonds negative yields on danish that and invisible yields on german u.s. and so on so that's a response by investors to a very real. disease let's call it in the global financial markets in which there is so much manipulation so much so much. fraud so much uncertainty even as to as to whether your brokerage account is going to be there tomorrow and that a lot of investors are making what i consider a rational choice in in putting their money somewhere where they at least will get it back right the worry about return of capital not return on capital how does price fixing eric and the rigging of markets by the fed and other monetary authorities in the west fit in here with the maladaptation and the arabs

becoming too big. well it's it's a late stage phenomenon it feels to me in the western world where if we look at europe and the us exclusively. these are these were the powers that emerged in the second world war and there they emerged and strengthened throughout the ensuing decades because they were relatively free market societies and the us has been a free market society for a long time. so as those the congress have progressed they have become. alas a free market oriented to the extent that the zero eight crisis opens the door to government manipulation on a monumental scale so instead of doing what a healthy organism would do which is to say ok i got i took

a trauma blow or i got sick i'm going to just heal instead of keeping dosing ourselves the governments have been involved in in sending bailouts to every possible place they could send a bail out running up that's the process they have been manipulating almost every single credit market whether it's sovereign debt whether it's the debt financial institutions whether it is. mortgage debt now student loan debt and the list goes on and on and on let is the must absolutely yeah my real world investors is in k. go ahead is incapable of determining ok what what's a real price what's a real value what's a real anything and not knowing they they choose not participate right and i want to bring up we have an endangered species list of the endangered species free market prices so eric i guess my question for you is what's not on what is priced

accurately anything. well as i wrote about a week ago when you want to comes to live war which is the basis of trillions of dollars of loans and securities some have even estimated as high as five hundred trillion which is a number that's so high it's hard to even believe once you start messing around with live war. it is a kin to two moving magnetic north or moving a g.p.s. system you literally don't know where you're going to land or what direction you're heading so. it's something not rigged ok you could say you could say a home price isn't isn't rigged maybe but then but then the investment value of a home relates directly back to interest rates and interest rates relate directly

back to the fed funds which is manipulating by the federal reserve and to live well which is really a by the reserve perhaps and by traders for certain so all asset values somehow fluctuate around these interest rates of of of dubious value right and so you're saying people are saying ok well i want to take my hands off the steering wheel i don't want to drive this car this is too scary i don't know where i'm going there are no free market price signals so in this environment i know i read you said fear isn't meaningful insight i guess i want to know if you think there's a proper response. well i think piers meaningful insight with respect to the financial markets broadly. so i mean you know again jim grant was on your show talking about growing walnuts. it almost gets the point where you have to go you have to go so low tech and so extreme in some ways in order to find markets that are relatively untouched so. a walnut tree would be an

example but beyond that there are agricultural markets that are still relatively untouched there's there are a number of real estate markets that are untouched there are private partnerships that that devote themselves to facets of the of the credit markets that are relatively untouched. and by those fast i mean there are there are mortgage backed securities that are offering high yields those had been manipulated and had been. influenced by the by both traders and by central banks but at the moment less so so there are little pockets of opportunity where investors can. can look for a non manipulated financial asset and hope for something better than one point three percent from a ten year treasury you know better than nothing and along at the conference here

is all about by the way what is that is the question i think it is is what the quest for what. i'm saying that's what this congress is about is about trying to find the sort of alternative. that's the fair sets that have a chance of providing a return. away from the middle ation of western governments and agencies isn't that crazy that that's that that's what it's come to trying to figure out where these pockets are that are manipulated that actually are fair are subject to the free market and we're looking at walnut trees and farms and other things like that before we go i want to talk about in this atmosphere of fear there are some responses that kick in when you're afraid there's a fight and there's light and in europe i thought it was interesting because you've been talking about the difference between both of these spectrums in regards to one country and one investment you have german bund yields which are at record lows but

yet you showed that it's more expensive or was it a point to insure against german defaults it was more expensive to do that than to insure against default of instruments that were rated much lower you compared it to viacom so these are two really different stories but they're both revolving around the same country the same bond markets so how are you supposed to know what to do there or what does this tell us even that there's these different file light scenarios yeah that's. right without without being too arcane german bond yields are very very low just like treasuries but the price of insuring german debt is very very high higher than the debt of lowly rated u.s. corporates so that's a that's that anomaly a conundrum and does it mean something yeah it means the financial markets are crazy it means it's very difficult to to figure out how to how to position yourself it in a safe way. so. you know i don't want to say

there's nothing to do here there are things to do but there at the margin and at the core of things that used to be safe i think you have great respect or perceived to be written safe are actually in fact risky and the solution is relatively simple the solution is to is to allow free markets to operate freely but at the moment the powers that be in europe and the us have zero desire to do right they all right are to step in and tend to internet pilate absolutely that's the case eric cry i'm so sorry i have to interrupt and cut you off but i really appreciate you being on the show i guess big and learns what you've heard about aren't true thanks so much eric cry at a tour of the daily reckoning. and still ahead a record high yield on spanish bonds the i.m.f. may be wanting to dump the euro following a ban on short selling in spain and italy and those are just the headlines you've

probably seen widely reported coming out of europe coming up after the break mike shut lot will tell us the alarming news you haven't heard the first your closing market numbers. cultures that so much is going to be in the can which of course you want on a few of them so here it is is the u.s. still number one in the world opinions differ sharply though there can be no doubt american supremacy is being challenged by a number of the. guitar 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 realize everything you thought you knew you don't know i'm tom harvey welcome to the big picture.

thanks. all right where do i begin with europe today there are just there's been an onslaught of headlines all bad pretty much that i've seen coming out of europe indicating that the. solution or at least the pretending that there was a sustainable solution has once again run out as we knew would happen we see spanish yield spiking we see the i.m.f. saying hey maybe we want out a greece is in is you europeans have your other funds all set up and ready to go and those are just a few of the headlines but what about the ones that you haven't seen widely reported might shed lock has been diving into those he's investment advisor for sick of pacific capital and he is going to tell us all of this really good dirt

that you need to know that that somehow is escaped the headlines because probably there's just so many already thanks so much mike said locke mishra being on the show today. oh pleasure to be back on the show lauren how are you i'm doing really well it's nice to see you you look very happy given how much bad news is coming out of your ass but maybe that's because you've largely been right about europe all along and here are some indications that are kind of on the periphery but are really interesting that you're writing about michelle i haven't heard about black monday in italy but you haven't you're talking about messages on facebook and twitter that have gone viral so what is black monday and why is this significant in your view. black monday it was really just a reference to the markets they were they were europe got hammered today spain was a one point down five percent actually recovered to be finished only down a percent or percent now for something but in italy we're going to have good contacts all over europe and they send me these links and they might be in german or they might be an italian or they might be and spanish i get links from

a guy name brand almost every day from spain but today i go one from italy and it was from a website there was an italian website there was talking about messages going viral elop there on twitter and on facebook and it's panic and one person said on twitter anough of this agony this please give us back the euro so the that's what social media is saying in europe it's actually not very pretty if you follow that through that's interesting how do you weigh the anecdotal evidence on social media i guess the twitter indicator if you will against their bits of news and information that you have coming in. well actually you will just look at i mean there were absolutely soaring across the board today almost one hundred basis points that's one full percentage point from five and a half percent to six and

a half percent in spain today on the to your treasury the ten year treasury had seven and a half percent uncharted territory what was it learned three weeks ago rejoice the prime minister of spain was saying crisis all of that lasted what three weeks now we're seeing it in italy and the mood is really gotten you know pretty extreme there they're blaming president obama they're blaming i a mouse they're blaming the builder burger they're blaming everyone and we're seeing the rise of the five star movement and i'm really stunned about this one because i don't understand why this is not made front page news in the wall street journal yet but i think it will best be group though who is a politician there and anti politician almost running for office in italy and he's running on a platform there that says you know we're going to kick out all these politicians

and his own personal viewpoint is we need to get off. of the euro and default on it you know that's pretty big news in and you don't hear a lot about it laura that is pretty big news i feel like there is a sense that for whatever reason i haven't really just heard about italy it's kind of been not i guess the problem child to do your the way that maybe spain has been recently but another thing you point out about italy is ten cities major cities that are on the verge of collapse so what is really at stake here does that mean more pressure for the federal government does that mean that despite the efforts to prop up italy it's still crumbling from with then what do you what do you take from that ten cities including on the lawn of naples ten big cities ten major so. it is actually a whole slew of small ruins they claim have already gone the bit in the dust and they're talking about defaulting on their debt meanwhile the state the federal

government of italy is demanding more taxes more austerity measures more firings. so you know where does it end i think it's going to end in protests in the streets and winced when spain or the protests last week i said italy's next i think we're going to see it and that's what they were tweeting about today saying you know we're going to organize some protests here it's going to spill over into italy and right now look at it greece is blowing up spain's blowing up it always blowing up all at once the nineteenth euro summit has already broke down on the twentieth break that's how the world are going to they're going to declare another summit but what can they do what's it going to do yeah i mean there doesn't seem like a lot that they can do i'm with you there but i'm curious what you think is the relevance of protests in the streets of italy because we've seen them all over europe and i hate to sound like

a callous person but it doesn't seem like any amount of protests i've seen in the street there have translated into any kind of pressure for politicians they still do they still do what the international lenders want at the end of the day so what difference would it make. well i actually made a difference in groups and you know look at the radical left wing from what you buy are six percent to real close to winning the election i'm waiting for the time to learn some politicians are going to stand up in front of voters and say. here's your own truth. golden boy we're going to default on the euro that person someone is going to come along and say that warren and that person is going to get elected . there is a prediction there i want to prediction from you on this because you mentioned the spanish yields and a key spanish or yield going above seven percent to seven point five percent but we've seen this before we've seen spain get to this dangerous seven percent yield

price i'm curious at what point is there the turning point where spain can no longer borrow from the markets and where spain does need a bailout. it's there right now it's going to happen i believe the consensus opinion right now is that that is exactly what's going to happen bear in mind that germany flirted with excuse me greece. with. so to have major was they going to greece flirted with that seven and a half percent for a while they came in and the president of the e.c.b. john kotter say at the time you know how many victory parties celebrations do they have overgrazed before greece finally imploded and we've seen a number of these same celebrations here over in spain and denials they were denying today you know we've had so many to die on how many of your civil denials do you have to add before the country really implodes and i

think we're there i i think it's spain is on the verge of a huge breakdown here i think italy's going to follow and there's not enough money in the or the self to bail them all out so what are they going to do we're at a crisis moment here i expect are going to announce another summit probably this weekend will say what are they going to come up with is there is another rabbit left in the hat i don't think so i've said that before but i'll say it again dead at some point that runs out of the rabbits well it seems like it's getting close to that key rabbit moment where there are no more little bunnies left to pull out but you say there's not enough money to bail out spain and italy but is there even enough money to bail out spain because arguably isn't there not enough money. no there is no i don't see i mean there are two hundred billion euros for what's really going to be i think it's probably going to be closer to three hundred four

hundred maybe more and if this is we're talking about a situation we're talking about a bit of this is things not even funded it's not even passed muster in the constitutional court of germany i don't know how they're going to rule but their rulings coming up chembur twelve or thirteen something like so and already they're adding to what they want to use him to do well it's not even get rid of fide in germany the constitutional courts not agreed to it thanks so much that was mike said like investment advisor for thyca pacific capital and that is all we have time for that's our show today thank you so much for watching and make sure to come back tomorrow and in the meantime you can always follow me on twitter and you can give us feedback on you tube dot com slash capital account or catch any shows you missed missed on hulu at hulu dot com slash capital account from everyone here thanks for watching and have a great night. the

winner takes it all the loser standing small the russians. as left empty handed after a london court dismisses hefty lawsuit against billionaire. turkey's pitch for a syrian intervention hits a dead end at the u.n. leaving nato countries warning they might simply bypass the security council. plus republican mitt romney accepts his nomination as presidential candidate with a promise to show russia more backbone but critics like that that is not his greatest asset. online on screen international news and comment live from the new center here in the. russian billionaire roman abramovich has come out on top of

a high profile court jule with the london based compatriot in one of the most expensive cases in british legal history the judge dismissed the multibillion dollar challenge from controversial tycoon buddies but it's all ski and a trial which offered a red glimpse into the lives of the super rich more in the case now from laura smith in london the final verdict in this case found again. which means that he will receive at the end of the more than five point six billion dollars that he was asking for. in court this morning. was he a brave looking very upbeat saying he had confidence in the british legal system but that it was being read he held his head in his hands. and as he was leaving he appears to have lost confidence in the british legal system now this is a case that has opened up for the viewing of the general public the. old brushes

make a richard what they got up to back in the nineteen ninety's the wild east as we called it that we're talking about stiff sums of money off shore bank accounts elicit payments made between people often in massive sums of cash. or of kools five star hotels ski resorts and enormous business deals done only on the strength of a handshake with no documentation which of course has made this case a very difficult one to judge it's brought to london to school building billionaires along with their own two roses megger expensive lawyers and bodyguards who walked around this area in the shades in a menacing way but he spent his of his case says that he was done out of billions of dollars when he says that promote it intimidates him into selling shares in russian metals and oil companies for a fraction of what they were but abramovich says that in fact. when net for

business partners that he was making payments to it is also key but they were only for political protection. roof in russian which has become a common hollins in the legal circles here in london as a result of this case is that he did make regular payments to put his old ski up full of political protection but he says that they weren't anything to do with the partnership they were often made in huge cash sums up to five million dollars hundred different cash and totaling several hundred million dollars he says that he paid for but is off key to travel in a private jet that he bowled him a french chateau and he also bought him jewelry for his girlfriend but as he wanted five point six billion dollars on top of the one point two billion that he received . back in two thousand and two. this has been one of the biggest civil trials ever held in british legal history it's been hundreds of hours and resulted in millions of dollars worth of legal fee so we've heard the results of this case. when this

time around we may see more cases of this nature here in london. the timeline of all the claims and counterclaims in this multibillion dollar. website to get more insight into what went on right inside the courtroom earlier today by checking our london bureau twitter feed the latest tweets there say the verdict called parties by surprise and he's considering an appeal he was described by the judge as deluded in some of his testimony and his evidence was deemed weak. britain and france are warning they might bypass the u.n. altogether after turkey's push for a no fly zone over syria but strong criticism of the security council and chris

demanding sweeping powers to protect refugees fleeing war and a move that would amount to military intervention but international reaction has been cool with strong reservations about militarizing the humanitarian effort. reports from new york. well the security council remains very much divided over how to deal with the syrian crisis the high level meeting that was taking place in new york focused on the humanitarian circumstances in syria right now and how they continue to exacerbate according to u.n. officials at least two hundred twenty nine thousand syrians have fled the country in the past eighteen months spilling over to neighboring countries turkey has the security council to consider setting up refugee camps inside of syria outside countries would safeguard this is a suggestion that the syrian government say they are very much against russia and china also opposed it saying that it could only create more conflict and violence

but we did hear all western countries address the security council their representatives calling once again for syrian president bashar al assad to step down britain and france the foreign ministers of those countries today made a new call encouraging for more defections within the syrian government and the syrian military the russian ambassador to the united nations vitaly churkin i did address the security council and raised the issue of the fact that the unilateral sanctions that western countries including the u.s. britain france those sanctions that they've placed on syria are only hurting the syrians because up on the stool this incudes imposed by passing the u.n. security council have nothing to do with actual efforts to settle the syrian crisis we complicate the lives of average citizens and do not allow them to meet their elementary needs or fully enjoy basic human rights this is not only our conclusion but also that of an independent commission in syria.