or book reviews to themselves just to play it safe or to leave it off there but for more of the stories we covered you can check out our youtube channel youtube dot com slash our team america can also head on over to our web site r.t.l. dot com slash usa and you can follow me on twitter liz wall for now have a great night. don't know for sure the creation so choose your life stream quality and enjoy your favorite. t.v. is not required to watch all its all you need is your mobile device more charts any time.

good afternoon and welcome to capital account i'm foreign minister here in new york city for a very special show we have a lot in store for you because the e.u. parliament moved one step closer to an acting tighter bans or curbs actually i should say on high frequency trading a. plea to do so now add them to the list of countries that do not include the united states so why is this and why is the u.s. so behind the curve as our guest former nymex board member david greenberg says we'll hear from him plus we saw oil rebound after it had closed to its lowest in eight weeks and reportedly if you look at the headlines this is because of china and speculation about stimulus but really when you step further back what has changed so much in the world that oil has gone from fifty dollars a barrel in two thousand and seven to over ninety now just five years later maybe it doesn't add up we will hear from our guests and plus we are in new york on a day that u.s. g.d.p. was revised down one point three percent on an annualized basis that is not very

much growth it is pretty paltry now a little bit of trivia one thousand nine hundred twenty nine stock crash it saw effects in times square so we headed out to times square for a special loose change to see if we're seeing any impact from what's going on in the economy now let's get to today's capital account. all right so as i said at the top of the show the e.u. parliament committee voted unanimously for tighter restrictions on banks trading in this included curbing high frequency trading they voted towards that now add this to a list of countries that have either proposed or enacted bans or some kind of provisions

regulating more tightly high frequency trading ok germany canada. also australia i believe so where is the u.s. on this list and why is it not on it especially after we've seen the flash crash of two thousand and ten and more recently the knight capital debacle well i'm in new york which means i had a chance to sit down with a real industry veteran oks a commodities and futures industry veteran he was the board member at the new york mercantile exchange and he was president of the ny mex clearinghouse so he really has been intimately involved in monitoring these markets and seeing where regulation has faltered he says in the case of high frequency trading the u.s. is way behind the curve late to the party if you will he also said with all the focus on washington dysfunction directed at congress that's taken a little bit of the attention away from the regulators who deserve some of that scrutiny too but you don't have to hear from me here's more from him. and my real question to them was how could you be so far behind when you have other countries

like canada and germany coming out being proactive and then you know the united states just you know months ago saying well we need to learn about this and then they just keep you know the they have to learn about it but they should have known about it she should have been on top of it we were at the forefront of electronic trading we were the ones that where when it really moved and it kicked in specially with the chicago mercantile exchange with low backs this is been around for a while and for them to be this laid out it just you know it's got to scare the investor kind of as a whole and just to clarify when you say we knew this was going on we knew about this who you're referring to well as an exchange you know board member the only board member i think in the world that ever voted against electronic trade and i was worried about the volatility in the markets i didn't think that the regulations were in place and i don't think them a lot of the markets were structured to handle this amount of volume coming in which we can which we can talk later so it's not a it's not you don't need to be a rocket scientist to have figured out that with this influx of speed and volume

and money trading products that never traded these products before that there are going to be some issues you may need to be a rocket scientist in order to program algorithms but you don't have to be one to know that there may be the well if you absolutely have to have the tell you from the mind owns one of the largest high frequency trading companies in the world and it was i was lucky enough to go in and see his operation and i said to my we're going to go up and see your traders and he's like i don't have traders i literally have. of rock and he made the joke of rocket science and i walked up there to have the conversations with these people to see the operation that's on there after twenty five years of seeing how the floor worked and how normal commodities work it was it was a real eye opener and it changed my views on a lot of this interesting you know i want to go back to a couple of the things you said because one thing you said it was really interesting was there is a lot of focus. what's wrong with washington what's broken and a lot about focus is on congress congress can't come up with

a decision the administration and congress can't work together there is this dysfunction you actually think that that is distracting from major issues with say regulators where they're not getting it right it's kind of i was thinking europe is distracting from the u.s. as fiscal problems because europe such a disaster when the u.s. has problems of its own so in the same way is congressional dysfunction distracting from the problems of the regulator it's all the things that when the parents are messed up nobody's watching the kids and if you really think about you know the heads of washington that's what we've seen and we've all suffered from it greatly have had this gridlock and that filters all the way down but you know the other agencies don't get the press i mean we've had m.f. global we've had here we've had night these are all going to be little little we what i call little explosions before the major quake you know everybody looks at this that whole you know look how much money was four hundred million dollars loss

and you know twenty minutes with night that's going to seem like nothing in the future if these regulators and the more kids don't get in line and sort of protecting the customer and you think that's as a result of as far as the earthquake what would be the earthquake or or the what what cracks or what fault lines cause that earthquake is it high frequency trading is it derivative is that leverage is it a combination of everything so. it's all of the above you know when people say it's all that's wrong is higher frequency trading well that's too narrow if people say all that's wrong with derivatives that's too narrow this is going to be a sum of everything and if you really put everything together it's very scary to see just how big it's become i think the markets the program in is have just gotten so far ahead of itself you know we've you know we killed around my roommate when i was in that he was torn into the computer. school syracuse university and i he was

brilliant and i said to him one day well we'll never see the technology in that's no hundred years and we've seen the last hundred years so he says to me david they're making thing called microchip you're going to see more in five years and you have seen the last thousand and that's what's happened in the last five years here we've seen greater leaps and bounds in trading and the river goes and the money that's coming into the market than we've ever seen and it's happened so fast that i just don't think that the regulators are up to speed and not only that you know it's very hard when you're you know paying the regulators you know their staff what their opinion compared to what morgan stanley or goldman is pay and you can't that's not an even fight you're not going to get that expertise you're not going to get that and regulatory body and at what we're on expertise i know you've been somewhat critical of the level of expertise somewhere like this the f.t.c. what kind of lack of experience do you think is there well what i find amazing is that myself and a few other people that i know that have broad experience in the exchanges and

clearing and trading you know we offered to go down just talk to see if you see you know let's just you know sit down and we can explain some of the situations that are going on we were all yeah that's great that's great but then of course you know we were you know rebuffed they didn't seem to want to hear of some of the hard facts and some of the true facts because the bottom line is you have republican commissioners you have democratic commissioners they were all appointed they all have to answer to somebody who then has to answer to a lobbyist and a lot of these trading companies and a lot of these big banks have huge lobbyists in washington and yet you know you and i and i have to tell you something when it will if they stand up and say hey this is a great idea you should do it well then you probably shouldn't do it. because they're angry there's probably something going right exactly right let's think about what happens every time the regulators get close and it just happened again the regulators get close to getting better. and i have to get admit they are learning that learning quickly however what we hear well we've just postponed the they have

to follow it was rule one point seven three till next june of two thousand and thirteen it was just going to be implemented how many times we've heard that when there's something that's just about to start well there's a postponement or it's been dismissed and to me you know that's just you know when i was on the remarks you know when on the board we used to say politics was a contact sport well washing the contacts has got to be ultimate fighting yeah you know because it's just when any whenever anything starts getting close it just gets because it gets dissolved and i think that's in the long run really going to hurt you know not only the american people but i think it's going to be a world structure and i think it's going to be a problem ok i want to a piggy back off of that to get into swaps because that's an example of a regulation that's just been delayed regulators delayed the comment period for rules for swap dealers to hold more capital and collateral when trading an over the counter derivatives which are the riskier derivatives they are nontransparent swaps

regulation was a part of dodd frank it's also taken a long time i think it wasn't that long ago that they just finally decided what constitutes a swap. one of the moves is to move swaps onto exchanges is that. a fed accompli does that mean ok everybody back home derivatives we got a way that neymar no because what's going to have is you know it's a great concept. however it's not as easy said and done i mean again i don't think they're they've got a good grasp on the new futures markets and how to regulate them now they're put on this on a swap market that this simple swaps will be able to be put on an exchange but the exotic swaps and o.t.c. products you know there are there are products that have made i mean let's take a clear point for for instance when i was on the board and we invented clear board you know everybody thinks that these exchanges and these trading companies make

these products for the good of the people well no they're all for profit companies we created a clear port because we knew that the triple a company could not trade with a triple b. company there were more as wouldn't even talk so we invent a port where they can do this trade drop what we call drop it down on non-us anonymous clears it takes all the risk well if you really think about it in the o.t.c. more hit last year there was i think actually there was two point six trillion dollars in margin variation and there's a lot of money and wesson with a ton of money and what's also even more amazing that the notional value of the o.t.c. market is about seven hundred nine trillion dollars so you put that in perspective if you have any kind of per cent small percent pick up of a major player forget forget i'm a flow will forget night this is going to this is going to go all around.

all right now couple no it's clear poor that is a clearing service open to over the counter participants in the market just f y and also the regulation he was referring to it's a c f t c regulation for exchanges one of the provisions having to do with risk management clearing now still ahead do not go away we'll have more of my sit down with david greenberg on so whopped and oil and you will not want to miss dimitri kovtun as my heading to times square to look for economic indicators but first the closing market numbers.

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cover. plenty of mission free cretaceous and free zones for charges free. range month free risk free studio time free. download free broadcast quality video for your media projects and free media. all right welcome back so on any given day oil seems to make moves enough to be newsworthy and today is no exception we saw oil go up the most it has in eight weeks and this is after it had been falling now these are often attributed

these moves to macro economic factors to supply demand conflict concerns expectations of stimulus in an economy for example china which is what the headline reads today but let's look back at another headline let's just go to two thousand and seven it's just easy to pull up take a look at this ok this is just a few years ago or oil prices tumble briefly trading below fifty dollars a barrel so five years ago we had fifty dollars a barrel oil what has changed so significantly in five years that it now trades above ninety dollars a barrel as the world really changed that much we have wars we had conflicts that would impact oil prior to two thousand and seven so our gas has a really unique perspective because he has been in the trenches for a long time watching this but first we talked a little more about swaps and swap regulations and the the evolution of swaps and

derivatives so more with david greenberg on that. so we're getting into this exotic derivatives market now because it's kind of funny we went from derivatives to exotic derivatives well the it's just one more way for these traders and other companies to try to raise money for their for their balance sheets whether or not there's a real purpose for every swap and every o.t.c. product that would be an interesting question ok and the takeaway is that exchange is don't solve any of those issues and they also put into the equation a profit motive which would then what incentivize just more derivatives more market making for these kind of exotic derivatives exactly clear ports started out with i think fourteen products and now it has three hundred you know exchanges bottom line when we all went public we all there was a shift. when you're public you have to have your quarterly earnings you have to be your numbers every every quarter and your go in and with all companies that what i

see and i think this is part of the problem that with a public company that even if they don't beat the whisper number they get they get slammed in their stock price i think you're seeing exchanges in many companies not only exchanges but some big companies and we've seen this you know going through some of the public trading companies is that they take on do risk to try to lever up to try to beat those numbers and they probably would want high frequency trading to stay as it is with the exchanges definitely one hundred it's a trade. off you was on from c.m.e. was on with maria bartiromo the other day and i watched the interview and he was defending high frequency trading that it's very good in this very thing that doesn't hurt the the the average trader and i happen to agree with him i was completely against that but now if you take the high frequency traders out there are no more locals on the commodity floors in a local with somebody like me that made markets you know back and forth there are no more specialists on the floor of the stock market so if you took the high frequency trading out you'd have a bit an offer of that a truck in the truck you go through and we just have

a minute but where i want to bring us full circle to just show the impact. i may be somewhere where people don't really expect it we've seen crude oil go down recently and now i think it's up a little bit today but it was an eight week low this is often attributed to demand and supply issues macroeconomic conditions concerns about growth in china news of stimulus and china. war conflict you actually think that the rise that we've seen over the last few years which has been substantial you said you remember the day that oil was fifty dollars a barrel is a few years ago did anybody know that everybody was like i can't believe it's a fifty dollars a barrel yeah and you say not much has changed in the last few years except for high frequency trading so how do you think that that is responsible in part for it's not only the high frequency trading it's the electronic trading to begin with you see the high frequency traders trading you know within the day it's going back and forth that's why you're seeing these big swings but when we were in exchange

and it was basically the two hundred of us in the pit that were crude oil specialists or locals that we call those and you have fiber and you goldman and morgan stanley and they had a few hedge funds that were crude oil hedge funds that it was a much smaller niche market and the market you know we went through to go for as we went through some massive economic times and the market handled as far as you know there was there was there was an even flow that went back and forth and a spike for us was two or three dollars over a week or two ok now what happened is that when we try to imagine you had this little market here and then everybody could put everybody everybody in the world who had money to trade this market so now you have hedge funds that will never know what a barrel of oil is never really know that expiration is on x. day and you have to be flat and all this other stuff but you have all this massive amount of money flowing into a market that was never originally developed for this amount of market flow so what

happens now is that you know it's not the supply and demand. market that i traded you know when i when i traded you know crude oil was up two dollars but you know at the end of the day you could sell to the cows come home because the odds are it was going to be up to fifty now if we have two dollars at the end of the day and it could be up five dollars by the end of the day simply because when these electronic platforms come in and the algos come in and they're trading with other people's money and they're trading with an extraordinary large balance sheet it's just a momentum trade and think about a crude oil came off nine dollars this week eight or nine dollars give or take you really think the world's driving change that much within a week where it's going to be that much different in a month this expiration is only for i think it's two weeks from now you know i've seen crude drop nine dollars within three days of expiration expiration whereas that was where it's priced that it was very simple that last trading day that's going to be the price of that everyone's going to buy it at the world did not change their driving habits that quickly there is

a tremendous amount of speculation it's market now remember everybody hates speculators on the way up they can push the envelope doing that and they want to go the wrong way those drivers everybody because that is what worries and what worries me is like listen i love being short they used to kid around on the floor that i knew the left side of my pad. i am a natural sure it's more fun to trade a short market it's faster markets go down fast and they go up as a trader that's what we got our rush however we just came down these nine dollars what worries me is that there was a time years ago when i was trying to trading just started there was a rumor that israel was flying planes over to iran the market on one thousand contracts on our overnight access system that we had rallied five dollars well that was before all these big bangs that everything was planned what's going to happen if so do you think that kind of an attack i mean it could go somewhere where you think oil could be at you know people could around about two hundred i have to be honest with you i think it could go to one fifty give or take before if there's

a rumor if there's a real attack and something really happens there's. there's nothing to stop this market anymore and that's and that's the problem and that's going to grow and it's going to be vicious and we're going to have to leave it there but i appreciate you giving us all your insight david greenberg thanks so much thank you all right now stay tuned for a while back sir because there's a little more that interview on how high frequency trading impacts the retail trade or maybe not as much you as you would think but when it's a problem for everybody but for now let's take a look at loose change. ok we're hearing you guessed it times where you can tell by the surroundings are you back on new york. because we did. research and it's time. to make money to stock market hit times square hard is it bad like many businesses have

a down in this new rise more entertainment industry you didn't. think about her so the story goes that the former mayor rudy giuliani really made an effort to get at times square to turn it into. this. kind of a pervert version of give me a little bit to live. up to. really both armies on a bus that i don't even know if they're just as. we'd love it. or as for her from her body. kind of indicators like the out indicator like this and i. think up there.

which. merrill lynch i think. there is morgan stanley. does it clear that it. has its banks what do you think that that are here and good times where women are going to be with her because it was something that you know the bank of america but the burglar got a are more serious with us great reporting or is there markets cranks or the snow they're thinking about sprays the fixer image up i think i assume that the more exposure of the more problems up for geragos or holidays the more problems there isn't court are in big trouble all right i mean so it's like third that's actually . an indicator of where you're serving i really serve because you don't remember but i want to get our next story you keep it. right up there and that's. something you know that one of the. electronic ones and there was

a new york post today i was looking at the not paper at the new york buy anything about how they're never going to talk about it on our i cut i think we're making fun of oh ok still time for time. so. i'd make fun of something that waited to get my underwear on i mean when late in the technology already and yet and seventy million views on you tube and the senate and house and parents and what i've done far less of it i think i play an important part of all so much i think that some of you say look we are just like residents who i respect a lot is going to show soon i know whose whose heart on our pull up why don't they go price i promise sucker i love them but there's no meat on a stablished that you're not a problem but i didn't you called me ask you about it another tour i did another no be fine p.r. public sector out to me and people out there and whatever any help with this it

happened and steve still alive and we're seeing that with. snapdeal with the iphone five now. it already did the math and her mind you know sure that's a good because you just look a little bit the sand but the point is it never to bring up with if it happened if jobs are alive i mean if you could never understand i mean it's a kind of factual you don't know what would happen if our farts and steve jobs was alive but so you think in this one no competition for apple i think that this thing worthless or you don't mind is going to turn you know there's a value undervaluation a lot more incredibly intelligent branding and bizarre terms you can actually convince someone of their drinking sand and then when they're drinking enough and they're going to get water to drink or sat. here i don't know what you're saying but let's i know margaret schools around here are where what happened here and just well before we go there's a story out there what by a household that's just like that we know that the make up problem that

unemployment is here to just nine hundred twenty nine gave rise to this is to poor sometimes where we think you see any opportunity for that to happen again with a weak economy throughout the solution but what i mean is a peep show indicator i.e. a peep show indicator in the us that's better tuners i think until we see some real peep shows some real kind of you know dirt in times square we want to really tell now bought a bus will be looking for us i will start by you know what is going on there our look for the people showed up for the pizzas and believe me they're about that we have time for our very special new york times square. you'll let us know what you think about the peep show indicator because that's all we have time for but thanks so much for watching and be sure to come back tomorrow . and you know in the meantime you can follow me on twitter at lauren lyster go to our facebook and like it watch us on you tube or on hulu and be sure to come back tomorrow from everyone here thanks for watching and have

a great night. download the official publication so choose your language stream quality and enjoy your favorite. t.v. is not required to watch all its all you need is your mobile device watch our t.v. any time and. don't tell me how much mike.