york times asked max what is going on so they say cast your mind back to february of this year remember barack obama met with all the state's attorneys general agreed to a mortgage fraud deal for twenty five billion dollars the five top banks would basically absolve themselves of any guilt so the five of the nation's big banks including chase and bank of america greed to pay twenty five billion dollars to settle state and federal claims over questionable mortgage practices and promise to work harder to help borrowers who are in trouble to prod the banks the government said it would give them credits against amounts they agreed to pay so these debts have already been discharged. sometimes years ago and now j.p. morgan chase in order to get credits to rig the game for their benefit are sending the letter saying oh that debt you discharged well we're going to forgive you for that debt write well this is all the problem with virtual securities now that the mortgages of virtual securities to begin with they were based on. performing loans

that were handed out to anybody with a pulse they made a mark and that then they stole the loans off to a repackaged loan security and then they sold those off on to the governments around the world including europe and they've all gone bust and j.p. morgan of course menefee selling them improper loans to begin with they made a fee on packaging loans and i just made another big chunk of money by making bets against the very things that just sold knowing that the people who just bought it would go bankrupt now they're going to come and say no we want to credit against a thing we never sold against a thing we made a fee on and by the way we're going to zap the homeowner once again by charging them for the thing that we never had to begin with and by the way you know with some more money who oh this is a constant theme throughout the last few years is they conjure up debts out of thin air and they conjure up assets out of thin air so all of it is a whole ground whenever jamie diamond decided something is an asset you decide he makes it and i was just going to you know the regulators are like blows those. you know so you're getting a billion dollars i mean to buy stock at school are all you know it's the same

thing these mortgages are no value more than jamie diamond it's not i mean jamie diamond stud at least you could you know maybe use it to lubricate your you know chastity if it goes bust on the freeway or something now here's where it gets really awful however so not only are they just essentially defrauding the government getting these credits back for debts that weren't even there but because they're sending these letters at the bottom of the letters j.p. morgan chase letter saying hey we're wiping out your debts we'll also be sending this notice to the i.r.s. because the problem is in most cases the i arrest considers debt that is forgiven to be taxable income. one exception occurs in bankruptcy when a debt is just charged it is not taxable so here these guys have had their debts discharged by a bankruptcy court. and they've walked away from this debt years ago and now they're suddenly liable for taxes because of some of the same banks like bank of america that needed massive bailouts that's right it's

a loan to get the mail that is telling you that congratulations not only did we stream last year but we're going to stray again by giving a tax liability on a phantom piece of paper that never just to begin with and your home is worth less than it was last year but also and give us more money now part of this problem as we've said many times here is that. we keep on just giving money and trying to tweak the system with the same criminals in place now the likes of the financial times are lying oh wall street humbled. right. but the problem is these banks are still banks there's at the end of the day lanny breuer admits that economists have convinced him not to indict corporations who is lanny breuer max well he's the head of the department of justice criminal division and he spoke recently at the new york city bar association on the benefits of deferred prosecution agreements now these are the things that the likes of j.p.

morgan and bank of america i think bank of america's number one perhaps citibank is with these deferred prosecution agreements that they're constantly basically they commit a crime the department of justice says well you won't have to we won't prosecute you if you promise to be good so to his to the new york city bar association lenny bruce said companies also realize that if they want to avoid pleading guilty or to convince us to forego bringing a case all together they must prove to us they are serious about compliance our prosecutors are sophisticated they know the difference between a real compliance program and of make believe here's an idea let's take jamie diamond up in an airplane. open the door and throw him out and say look it's our new program of deferred gravity so all the banks are is out of airplanes at forty thousand feet and try the deferred gravity program there ok oh by the way if you got rid of all the bankers the economy would grow their theory that you need to

defer prosecution to preserve the bank stirrers and their role is somehow helping the economy is the argument that cancer makes to the host that's the cancer argument regarding the deferred gravity situation milton friedman already tried that until a it didn't work so we already know that doesn't work lanny breuer says that he has seen in his office he's had meetings during these deferred prosecution cases from c.e.o.'s general counsels and economists have been brought in to plead the case for these corporations and he said i have heard sober predictions that a company or bank might fail if we indict the innocent employees could lose their jobs that entire industries may be affected and even that markets will feel the effect sometimes though let me stress not always these presentations are compelling two points number one there is no such thing as an innocent employee if you're an employee at one of these banks you're as guilty as sin and you deserve everything

that's coming to you because you willfully engaged in financial terrorism that's point number one point number two that they took all the principles and they packaged into collateralized principal obligation note and they sold it forward and those things don't exist in the present they're happening in the future and they might arrive some day except that every time the principals come they refer them again as part of the deferred justice program you say in the future never a run the prosecution never is here and the bank shares are never given their proper punishment for their action of terrorism that's never happening that's why it's up to the individuals that's why it's up to the pit that's what they're doing that's why they're wrong. eating in the streets all over the world and we're i believe waiting because these banks for the most part are beginning to understand that their days are numbered that's a major success and this brings me to another story we have covered here do friends of actor john q sack want to steal money from grandma's pension now he's peddling

a plan that takes money from pension funds and gives it to his millionaire buddies according to m f i hyphen miami dot com so in episode three twenty want to report we enter view terry buell and about mortgage resolution partners their plan was to convince san bernadino to use their eminent domain authority to not see these properties that were in foreclosure or abandoned but to seize contracts i.e. the actual mortgages in this case the packages of collateralized debt obligations that have been sold on to pension funds and use those to transfer seize those contracts and give them to this guy's partners now lo and behold the first day of profit to post t.v. they were pushing this they have this guy on the show and john q sec saying this is a great fantastic program to save blighted cities but he and area ana

were speaking as if. eminent domain was going to be used to seize the properties they clearly were not told or informed by this private equity firm what was the true story right i think we're going to actually go to a clip from the turbulance show yes well you were asking her you were saying it's quite prescient actually what you said to her you start this clip off by asking why do people california fall for the same scam over and over despite the financial collapse we've seen happen right here why do people keep falling for the same self bitch from the same criminals in the same town in the same country always what are people at the dope that they smoke and belfour even makes them so stupid terry fuel well i mean this is a case of one wealthy set of investors just taking money from another wealthy set of investors they actually don't even need a twenty percent return i would imagine in this market they'd be thrilled with the tim percent return except that they need that extra twenty percent because they're

going to get sued the mortgage investors already said they'll take this all the way to the supreme court he hears he has a problem though max they are buying underwater homes they are paying they want to buy loans that are already in default they want to do that because those are loans that they know that they can sell to the government right the f.h.a. . and. they make more money for themselves so instead of actually helping the housing market maybe by buying defaulting loans right and reselling those mean they're not even doing that well yeah i mean the shocking thing is that area hoping to is bought or sold out she's hugely wealthy now so she's now siding with the financial terrorist john cusack somehow got roped into this now he's a financial terrorist what they're peddling here is pure fraud as me exposed on our show and the question always is why do people fall for the same scam over and over

and over again and this goes back to our top headline here how to erase a debt that isn't here so they conjure up problems that they themselves curry of too much debt to us fraud in the system and then concoct a system of war debt or more fraud to solve their problem of debt and fraud well yes of course it's the classic case of a sociopath running the system we now have to include john cusack and that who would describe the story with a ball peen hammer and smash the skulls of various grannies walking down the street for a quick buck already stays ever thanks for not being on the kaiser report thank you max all right that's it for the first half the show but stay tuned for the second half i'll be talking to jeremy l. about alternative currencies and financial system integrity.

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welcome back to the kaiser report imax keyser time now to go to amsterdam and speak with jeremy l. artist theorist a programmer with his research he seeks to overcome restrictions and borders whether economic social or scientific journal welcome to the kaiser report thank you max all right jon well western civilization you write is characterized by three foremost taboos sex death and money so let's talk about money we met you at the big conference a let's talk a bit coin first is bit a rube goldberg machine for buying electricity. well marx you see that was one of

the first arguments that actually i started thinking of why do we mind using gold that can lick the city and i quickly understood when i thought where'd that energy exactly goes you see that big car and uses all that energy to make stronger to make it hard to counter fate and pulls it out of an amount of piers that want to participate in the mining on the other side if we look at state currencies how they do out then ticket themself and how they can keep it hard to counter fate they use very thick walls and a large building and armed guards on the perry meter so i would say that it's way better tradeoff what bitcoins dulls pooling all that energy to a large network of peares right so it's more cost efficient to maintain its integrity versus the state controlled field money now and i see the economist magazine as covering that going course we talked about it we're the first

broadcaster in the world to talk about bitcoin last year now it's getting more mainstream except as people in the economist are talking about it and talk about how the system's integrity is maintained in bitcoin compared you know expand on the theme a little bit we already know that electricity is used as you pointed out more efficiently how else is the end secret integrity maintained part of the cryptology. how do these the solving of the crypto currency create the value through crypto currency mining cetera. well behind the demining is fairly simple what to minors do look for numbers that hash into an hash which she said transformative function that starts with six zero zero this is a limited amount of numbers that can be predicted we do know that there is a limit to it and so it creates an asset. we quoted research on the fact that beat

corn as an os it. be compared to all their feet mean at audio resources for instance due to being taken so far as limited os it's i wouldn't say a core and see actually by the very basic so it is quantity of numbers that we know exceeds the in western mathematical tradition if not nature i would call it just in our you know what no magic thirty sion and then those numbers are used as an exchange value. right well you know looking at frederick hyatt's definition of currencies then big calling would qualify as a currency and i think this is a look at how people excited around the world is that talked about competing currencies and that was considered radical and probably never happened but now we have a situation due to the frictionless digital economy of a new born currency like bitcoin emerging from cyberspace alongside other

inventive currencies now in the u.k. we have the bristol pound and others but i want to return for for a second to this hashing they talked about in terms of the mining you say that there are numbers out there that begin six zeros and that the mining commences based on locating these numbers just i don't want to spend a huge amount of time on this but just a little bit more in terms of how that works there is a fair amount of cold air on data and uses a lot of beach shifting and actually tricks to elaborate the genesis code which is d.r. reaching of off the chain off the block chain into. a chain of transactions so after things get to mind after mani mani or beat corns get found after days components of the os its parts get found then users can actually exchange damns so trade them through contracts these contracts are signed so basically every

transaction him because he's a contract and the books change so what people downloads at the beginning when they start for the first time to program actually contains all the he story or front sections in the he story of the docks chain a name bitcoin so basically it's an asset that gets found at the beginning and then on top of that all different sections dect movie around are recorded they are recorded against the pseudo nico numbers actually i would argue that to claim to be course. anonymous it's not true because i can be annoying which says anything else that can be actually passed through a d c p a p. s on the internet but then you have to use start and you have to use a lot of measures to actually ensure that your connection is anonymous and is not tracked to a certain location in the ward where your a.t.m. or access point is so basically it's

a. section against certain numbers of accounts that actually well exchange is a contract about who gets who minds who mind that that value who gets it then we straighten it sounds a bit like an enormous virtual charmbracelet. actually it's a fascinating. thing. going it's called triple signed accounting and i believe what beat going to really is in front of the ward at large and not just as hackers that created it it's a revolution in accounting science you know they. call triple accounting we know it double accounting is you know double accounting and double entry bookkeeping center was the beginning of modern economics to a large extent five hundred years ago and in early this began now we've got a concept called triple accounting talk about it well i am not really an expert

into that and actually did our boots to be read and i am trying i mean gauging dam and i hope to make sense out of feet of that at least a year of study that i'm engaging in might be but basically i would like just to mention that the double accounting system to double book which was created in fourteen ninety six by a fly at least he described it and poses the basis for a for a ford mock at how it was running at that time in venice look up what charlie was his name then dead too. holding on as the main way we used to make sure that there are no duplicate in what we pay what we get paid and it's running since five or six hundred years like that and as you often remind us this system is hacked all over actually people are sticking advantages of all kinds of hacks that been done already in that accounting system and so we have an economy in which people don't

trust so much anymore so to say and i think creating a new accounting. system in which people actually can can can trust can compose can can can trust the bad. it can make things better for the community set around when we talk about accounting we talk about labor we talk about people time is not anymore just clicking around or being able to send morning from one computer to the other piece probably much more what we're looking at right that notion of accounting is very important is only for the big four accounting firms left there were double that number not too long ago but every few years one of them gets embroiled in a major accounting scandal whether it's arthur andersen and enron that blows up those firms and then they become too big to fail they become a monopolist in their own right and there's

a huge outcry that maybe at the center of this global financial crisis is not the fund managers it's not the banks it could be the accountants who are submitting these reports on a quarterly basis giving their blessing to the balance sheets of these banks and corporations when they knowingly fraudulently cooking the books we've talked about that many times in the latest edition of the economist as i just mentioned they talk about that going and here's a quote it turns out that occurrence you can thrive even when no one is making laws for it so what are your thoughts on this is it better for a currency to remain completely outside of the current league. system journal it's something that we have to negotiate and something that we have to find out and discover for sure to have a smaller economy it makes that economy weaker in a way but also more integral i think the clash is on values right now we are standing at a point in now he's studying which we don't. do the market doesn't reflects anymore

the values that participants would like to see in it so people drop out and invent their own tools i think would be made to be good thing to have is an alternative and ultimately because at least it sends a signal to these monopolies and to it is fraudulent too big to fail. that if they continue doing like debt if they don't lease then then people will go another way whether the people we need to do that or not that's i think an articulated negotiation that we have to unfold in he story right there is a bit of contention now in the big going community whether to stay completely outside of the current legal framework or to risk being subsumed by the speaker up to buy it as now we see wide scale corruption throughout the entire global economy now our current financial muntari systems are filled with all sorts of laws and yet as the financial system has proven they like any integrity into the void comes

bitcoin but what other disruptive technologies and conti's do you see challenging old economic and monetary orthodoxy german bitcoin is the most. the most notable example and any other instance today north is not emphasizing on currency i think that the movements of transmission down for instance have started to from the very roots food and food production and all what's behind the twitchy stance support and all. you so you see i think the movements did actually pointed out the first instance of exodus if we want to call it like that from toward the white economy in a moment in which she didn't want it to respect the way they felt like producing food and eating it so we have communities like. many of them in england that to have constituted also did little money without using high technology for it you

were spot. on in many other places of the war. that out of this kind of couldn't see vouchered like currencies and for the hackers i think the turning point for the beat going on was in a moment in week should we keep eeks had to cut their funding sources there by us to actually receive donations that was a time in which network neutrality was actually in the eyes of everyone violated and the hackers are not feeling any more debt debt is the network reliable for their operations that's all the time we have general thanks so much for being on the kaiser report thank you a lot. and that's going to do it for this edition of the kaiser report with me max kaiser and stacey herbert our thank my guests jeremy from so many now please do so at times reporting r t t v are you until next time next guys are saying.

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