jamie jamie jamie you had better know a little banker boy again haven't you jamie diamond yes your bank j.p. morgan is in the news again for fraudulent of a song again for defrauding investors again so get ready for the bleeps again yesterday morgan bank is being sued by new york attorney general schneiderman e-mail show that bear stearns now owned by j.p. morgan sold c.d.o. as they described as sacks of and also a great thing are m.b.a.'s which i guess means a gargantuan malins of or to kaiser report is the only financial news program to

have been covering this since two thousand and ten with the help of our insider jamie diamond double ganger mr rat. say. well max yes you're getting into the language of the e-mails that have emerged in this civil lawsuit filed by eric schneiderman j.p. morgan unit is sued over mortgage securities pools new york attorney general eric schneiderman has filed a civil suit against j.p. morgan as a civil suit not a criminal suit the complaint contends that bear stearns and its lending unit e.m.c. mortgage defrauded investors who purchased mortgage securities packaged by the companies from two thousand and five to two thousand and seven so max investors lost twenty six percent of their investment in just the two thousand and six and two thousand and seven bond that is twenty two point five billion of eighty seven point five billion of bonds that bear stearns had packaged and sold up to pension

funds and others but you do it to me what did you lose those people twenty six percent of the money knowingly brutally. why did you do it you know good rat. well max we've covered this with terry buell a number of times so we've covered the since november two thousand and ten and in fact the investigation however from eric schneiderman did not even start until april two thousand and eleven so we're way ahead of this story on this thanks to terry buell and nick for bits who we're also going to have on the show next week eric schneiderman did this suit on behalf of the residential mortgage backed securities working group which is allegedly a task force that obama has tasked with actually investigating on a federal and state level these alleged mortgage fraud. and this task force max so in case you really think that jamie dimon something might happen to him or bear

stearns to exparel stearns guys well lanny breuer is also on this alleged task force and lanny breuer if you'll recall we just covered him recently where he was the one who spoke before the new york city bar association saying that deferred prosecution arrangements are perfect i love them they're the best way to deter banking crime. but i didn't. blow straight rat all right we've talked about her prosecution agreements in the past having a way i mean there are where you can't make this stuff up there are there guilty but we're going to defer to the prosecution much of the cost j.p. morgan itself in response to the civil suit said we're disappointed that the new york attorney general decided to pursue its civil action without ever offering us an opportunity to rebut the claims without developing a full record instead relying on recycled claims already made by private plaintiffs

that this private plaintiff of course max is back a formerly giant insurer who insured many of these c.d.o. isn't mortgage backed securities that have now blown up and we covered this two years ago two years ago well before. or this eric schneiderman even thought of this and we covered it with terry buell so let's go to that episode and now we've got j.p. morgan bear stearns suing abacha suing these folks for accounting fraud for acting in bad faith it's also a little bit about this yes and back didn't didn't do their homework ok when they were in sharing some of these products they relied on bear stearns and e.m.c. now by j.p. morgan to sell them product that the raiders said was aaa rated and to say that the loans that they're putting in there they know are going to work out and that they're going to perform ok well am back it has now learned that bear stearns actually according to the lawsuit. knew they were putting in bad loans they knew

the loans were defaulting before they even sold it to them you know to those to terry you know for doing investigative journalism on this piece two years ago exposed and now finally it's coming to light but during those two years time say see what happens is that a bank loan j.p. morgan they figured out a way to securitize their potential liability and to sell it on to some pictures market make money on their guilt they're never going to pay any sizable or meaningful penalty because they can always package their guilt as a kill back security sell to some poor bank in europe and then that will go bankrupt and they'll porus more austerity measures in greece you know j.p. morgan itself is using the fact that it was bear stearns that package these fraudulent securities as a way for them to whitewash themselves but as terry people mentioned in that interview two years ago and back itself in their civil suit in their private suits against j.p. morgan well they say that it was j.p. morgan itself that basically forced them to go bankrupt by refusing to pay out on

the fraudulent bonds that they had gone bust they should have known what second thing is this idea that morgan can claim that their responsibility is limited due to the fact that this was all done over a barrel. turns but remember the reason why i had the global financial crisis in two thousand and seven two thousand and eight was the too big to fail concept banks were getting too big so when it congress allowed to happen as a result of that they allowed the banks to get even bigger so now j.p. morgan bought several banks including bear stearns and they're bigger than ever which means our political leverage is greater than ever which means our culpability factor goes down to the lowest level it's ever been and this is of course wall precipitate more bank failures which will then mean that j.p. morgan will buy another bank and become even bigger so robert peston of the b.b.c. covered this in j.p. morgan subprime who are and he said you know that the e-mails note that bear

stearns traders on one package of these securities noted that sixty percent of the loans were already delinquent and yet they packaged it up and sold it to investors a further securitization was described as we said at the top of the show a sack of in a breather oh no they would suck cadavers in they package him up their research characterize them they put them all up in a men's thumb and so nice mincemeat christmas pot of cadavers which they created could never collateralized debt obligation they sell to do it your banker b.n.p. in europe then a buck goes out of business and then they impose more austerity measures so the austerity measures are direct result of this fraud and accounting fraud by j.p. morgan the people are suffering. so we covered that last year the carl levin of the senate he was famously the famous senate hearing where they kept on having to bleep it out because it was a deal from goldman sachs that they sold to investors to remember that evidence was

passed to the department of justice probably lanny breuer and he decided there was no case so if you think there's going to be any sort of case here with the same exact language the same exact apparently sat that was collateralized many times over and sold to all sorts of people but the other thing was because these mortgage bonds had just gone bust so fast all the mortgages underlying the mortgage securities they went bust so fast originators of those loans were supposed to buy them back and bear stearns was supposed to get that money from them and then give it to the investors but what bear stearns did is they did go to the mortgage originators but they gave them a sort of sweetheart deal they negotiated a lower price a lower fee took the money and never gave it to investors so again this is the civil suit remember it's not a criminal case here well you know this is the new cold war you know what i mean by that is remember people lived under the threat of somebody pushing the button the big button starting off a chain reaction of atomic bombs you know this is the new cold war j.

me diamond j.p. morgan if you go after them they'll push the button to crash the market this is the way things operate now so people are living in fear of this world war three which is about to explode because they've got their finger on the button to crash the market just like nuclear physics lead the potential to blow up the world you've got economics and financial theory now creating the ability to blow up the financial world people in mainstream media and economists are discussing well if you keynesianism is it milton friedman ism it's like discussing you know the mechanics of an atomic bomb was being dropped on hiroshima that's not really the point isn't the point is that is blowing up and killing people. will the point is that this financial bomb exploding jamie diamond is the arch master enemy an evil incarnate who is killing hundreds of thousands of people suffering austerity because he's got the weapons of mass financial destruction and he's using them he's using them now

while peston at the b.b.c. goes on to say quote it is noteworthy that banks in the u.s. and u.k. that are trying to clean themselves up cannot yet escape from the costs of the sins of their past the such a lame comment they can't escape the sins of their past they've done nothing but a scape the sins of their pals as anyone go on to jail they paid more than a token civil fine robert peston mainstream blowhard know they haven't what about some deterrent for committing a crime. well speaking of sins and escaping the sins of your past the same story the same stick is going on here in the city of london right here behind us on the headline here on the independent bad bankers war and repent or go to jail right facts right that might ever happen repent or go to jail this is the mainstream media is trying to play catchup now because they realize that the

harm will jump they haven't done any significant reporting on how this cold war a financial destruction of mutual destruction has been taken place now they have these bogus headlines that they're going to repent or go to jail i mean it's a little bit too little too late well let me explain what's going on in this headline max britain's top financial policeman promises criminal prosecutions and every dark corner of the city so this is martin we spoke this week he's now heading the financial conduct authority so frigging british conduct authority he raised the prospect of u.s. style prosecutions of senior executives in the future we want individuals held to account what about now i mean libel or rigging was a grand global cartel there are thousands and thousands of e-mails of them conspiring to rig markets thousands of e-mails of them bragging how much they stole how much how easy it was to take this money and here they say we want these u.s.

stuff i hope prosecution just a new guy to come along and administrators new paragraph making rattling the cages and such most time martin wheatley will be replaced by some new bureaucrat and he will have been kicked upstairs and work for the very regulator that is supposed to be overseeing and i get a nice fat paycheck because he's a scam artist well in fact speaking of artist max on this final note here we did get a video communique from the artist taxi driver regarding this story bad bankers weren't repent or go to jail. possibly in the future not since study said frank. because i think. straight i didn't break you know not i'd go and someone might. gary i know i know i'm not by the exact. day. i get. what

justice is that guy gets on like that all right then i know right. then that. that night the finals. oh that guy talk perfect sense all right stacy eric thanks so much for being on the kaiser report thank you write stuff l.a. much more coming why so stay right there. you know sometimes you see a story and it seems so thankfully you think you understand it and then you glimpse something else and hear or see some other part of it and realized everything you thought you knew you don't know i'm tom part because i think.

that. you.

i am my skies are welcome back to that kaiser reports i'm now to go to new york talk with kaiser report favorite dr michael hudson dr height in this latest book is the bubble and beyond fictitious capital debt deflation global crisis dr michael hudson welcome to the kaiser report thanks very much max all right now i want to get into some late breaking news here sheila bair tim geithner tim geithner is suddenly emerging as the boogey man is he rightfully should feel a bears in the mix talk to talk to tell us what's going on here charlotte bear is much more angry in this book than she was at her famous exit interview with the new

york times magazine that she gave when she left she said that. in the first place she well i don't close down citibank and that geithner refused to do it and that when they looked at citibank as the f.b.i. say that insurance corporation they couldn't just untangle the bank from citi cork with all of that chunk mortgage checked evades speculative activities and sheila bair describes in detail the meeting they had at the white house when she said look . the treasury secretary came in said we're going to force j.p. morgan chase all the other banks to take twenty five billion dollars loan h.p. this huge gigantic bailout and she said it was all the same study back to the entire tarp or that they sent was saving the banking system wasn't against saving

the banking system at all it was to save citibank alone because it had been involved so early criminalised and sheila bair came to the alternate banking group of occupy wall street two weeks ago i was there and she said the problem with the financial system is it's been taken over. or by the mafia and that is the the wall street mafia essentially have spent criminalized and they've taken over the government to such a degree that when she tried to enforce the law she couldn't do it they've put in a attorney general holder over the fuses to prosecute campaign contributors refuses to prosecute wall street and i just got back from the eleventh both been meeting in kansas city and also the american monetary institute meeting in chicago everybody is talking about now the rumors are all out about tim geithner's role in all of this when the obama administration took over plan to lead its role

as head of the new york a federal research where the sticker advised of bass give away of wealth to wall street and public expense. it was the oh robert ruben to citibank can become the hit for a salary of about twenty million dollars a year but the bank has got together and said to him you know we need you interest rate we need a very sophisticated slowly crook like you to bail us out and to give us true billions and billions of dollars trillions of dollars you're the only guy who can do it stay in when the secretary of the treasury when you step down what the japanese call sent from heaven we'll take harry and then you'll get the big payoff you'll be a big millionaire you'll be a player just do the looting for us it's our inside man and we'll do it and geithner said there's one thing that i want i would have to make sure that

elizabeth warren is out i don't want to run i want complete control so there's no law enforcement there's no intake crime in portsmouth there's no one thing if we're going to steal we have to do it right i'm paraphrasing the discussion. it's almost like the old. in the late thirty's you know and the mafia would come to that but oh well if there is just the attorney so that he wouldn't prosecute them ever since alan greenspan was put at it over there they put it the regulator in church it wouldn't prosecute let me jump in for a second to mention alan greenspan and of course he got rid of brooksley born over to see you have to see now you're saying that sheila barrett f.d.i.c she was basically forced to walk the plank and geiger is behind it all the mac to valley and master and the result is a crime in a genic criminal enterprise and watch geiger he leaves where he goes well of course

he's going to go to wall street somewhere to make a killing on all of his contacts the insider trading but the economic theory that is used to justify this crime spree comes under two had ngs there's the trickle down economics there's milton friedman monetarism or there's keynesian deficit spending and but they've tried both of those you've got record deficit spending and record monetary stimulus but the economy is still contracting why is that is just because the criminals of completely taken over and we should look at any economic theory any more dr michael hudson because it's not about economics anymore it's about rape and pillage what you're quite right max this is what makes the wall street financial oligarchy different from the mobsters in the one nine hundred thirty eight movie wall street does something that the mug can do they've taken over the educational system and the government statistical system to keep picked

what they're doing as wealth creation and of deficit that you've just mentioned hasn't been the kind of deficits that you had in the 1930's or that in after world war two they're not deficits oh government spending in the real economy to employ labor to build roads. build infrastructure or even to build armaments these deficits are very different these deficits are money dropped from the helicopter on wall street they call up the head of the federal reserve ben bernanke the helicopter ben bernanke he because he said i'm going to drop money on the economy but ben bernanke his helicopter only flies over wall street it doesn't over the rest of the economy it only go up bunning on wall street and on the banks the big guys in the bondholders know what sheila bair said when it comes down to it people talk about bailing out the economy but she said it's all about the bondholders and her book is sort of an exposé in this and again this is written by

a conservative midwestern republican not by a radical and to the of old fashioned republicans that don't exist in the republican party anymore that are coming out with righteous indignation saying what's happening is wrong it's predatory and the system cannot be fixed without sending a whole lot of people to jail i mean let me ask you this question about ben bernanke and he came out with his quantitative easing to infinity they're going to buy mortgage backed securities billions of dollars every month for ever dr michael hudson why can't he just retire the mortgages themselves be retired the mortgages that would help the mortgage over is the homeowners but that's not his constituency he wants to especially pump money into the banks but i take it by taking twenty nine trillion dollars worth of chunk mortgages on to the government spent on chase getting in exchange. bank. commercial bank deposits at the fed

and government ious and then he takes these having what these at face value hundred percent back to you instead of ten percent value he then sells them at a very very low price at ten cents on the dollar. and the banks that have already got a hundred percent value for these mortgages can buy it back from the government at ten cents on the dollar and make another twenty nine trillion dollars let me ask you a question you wrote in your latest piece so instead of financing it is the u.s. banks don't lend against what may be produced in the future they make loans against collateral already in place including entire companies they wrote a long piece of excellent piece talking about the financialization of the global markets this seems to be the nuttall of that piece right here this question of collateral and you're contrasting today's environment with the old days where collateral actually meant something but talk a little bit about that well that's what makes the bubble economy different from

what's described in the textbooks if you look at the textbooks that students are taught you have a picture of a factory with smokestacks and workers with lunch pails walking in and out of the factory produce the goods and services the workers spot but that's not what banks make loans for they don't make loans to build factories or to build anything then it won't only against collateral that's already in place real estate that's already there or oil and gas reserves or they'll end a corporate raiders to take over a company that's in place and the corporate raider doesn't build up the company and hire more labor with lunch pails sizes the labor and cuts costs grabs the pension funds and says we're going to go bankrupt if you don't renegotiate your actions from defined benefit or you know what you're going to be getting to define contribution plans for all you know is what you pay in ok let me do a bit negotiate or we're going to go bankrupt and wipe out your pension altogether so you know. i mean part of the predatory and shrinking process let me let me jump

in for a second because the comment was made this week from a private equity investor saying we can get money from the banks to buy companies but we can't get loans from the bank to service the companies that we bought. in other words the companies that they bought are car companies that need money to continue in operations they can't get those loans but to your point they can't they can't get loans to take over companies using the assets of the acquired company as the collateral that's kind of what you're saying right yes the bank credit is only available for alluding it's not available to maintain industry is part of the neoliberal plan that was brought in by reagan and thatcher in the 1980's credits available only for extracting money from the economy quickly only for emptying up the economy and shrinking it until the united states ends up looking like greece or ireland or b.s. or iceland so as soon as the election's over we're going to see the result of just

an internal economic collapse everybody's bailing out all right finally you see that in europe we are seeing an oligarchic counter revolution against democracy explain that. angela merkel explained last year that when the greeks are going to have a referendum on do they want to have those austerity to pay taxes to pay the bankers she said the problem with austerity is they're going to vote against bill you know the bakers we cannot afford democracy so she said we have to put in a technocrat a technocrat is a euphemism for a bank lobbyist like tim geithner is it a technocrat. and so they said we're going we have the european central bank are going to point a technocratic ruler what the romans called a proconsul to act on behalf of the banks you cannot vote that's what central bank

independence is the government policy in your country in greece and spain and portugal is going to be controlled by the bankers bankers are independent of the political process and we have the european central bank are telling them what to do by what's called can do now it is in other words we set the conditions on which we will be willing to bail out your bank so that your day can pay us who've all want money to them so we will lay down the condition for you to us and the it to the great say wait a minute we don't want to pay you we want the economy to run for ourselves and the europeans are saying that's the microstate you can't have it anymore that era is over. all right dr michael hansen the godfather of economist thanks so much for being on the kaiser report thank you very all right that's going to do it for this edition of the kaiser report with me max kaiser and stacy herbert my guest dr michael it's i'm going to say i mean please do so at kaiser report at r t t v dot

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