good afternoon to welcome to prime interest i'm terry and boring here in washington d.c. here's the stories that we're tracking today. the u.s. will pay china ahead of veterans and a medicare recipient that's what house speaker boehner said yesterday pushing a new bill that would help prevent a u.s. debt default but president obama doesn't agree with the reasoning that any of these fall on promise is not just on debt repayments and hurts us credibility he said american families do not get to choose which bills to pay and which ones not to pay but don't tell that to the two hundred thousands to teach defaulters the job not to pay their mortgages in two thousand and eight and who are approaching the three year anniversary of dodd frank and only a third of the bill has been implemented yesterday at a house financial services meeting lawmakers voted to actually go back several

provision one would allow banks to keep trading in the units that enjoy taxpayer protection of the f.d.a. feed we'll talk more all hazard in the new brown a bit better bill with tom hartman in a bit and from wall street to greenwich or maybe the cayman that's the direction bond in credit trading is going big banks are getting ahead of new rules that were her priority reporters are a trading but hedge funds are scooping up the bank trader and former goldman partners says the regulatory posture in the us and europe is unequivocal they want to transfer risk to the shadow banking system stayed tuned to see how to interconnected to fail plays out when bernanke he throws his baby huey out with the liquidity bathwater and here is what's in your frame interest.

crowd funding is starting to gain traction in washington as it provides access to capital that a lot of banks are now willing to offer these loans are funded fractionally by multiple lenders and proponents say credit is distributed more efficiently section three of the jobs act would expand to crowd funding to equity investments but we're patiently waiting on the f.c.c. to release the new regulations for more on this topic i spoke with philip alice the president of alice business advisors which is an international management and financial consultant consulting firm let's see what philip had to say. going to be able to approach these folks that may not know about your investment and really by the way these two hundred eighty six thousand invest twenty one billion dollars in

startups today so if you could reach you know the other ninety five percent imagine what you could do that's kind of the i think that's really the big story here for crowdfunding so then do you have to be an accredited investor to invest in a crowd funding right now if you want to do an equity investment you actually have to be a credit investor with if assuming the jobs gets their act together. and they decide to make the rules then there will be an opportunity for a certain limited number of non-accredited investors to invest in equity investments and start up companies that's true and so that you there will be an opportunity that opportunity will be limited by how much the people make and just similar to you know until you become an accredited investor and then of course you can invest without any without any limitation so then you also have kickstarter who accept donations so are these regulated in any way through kickstarter because you

don't actually have any shares or any piece of the company you actually they're not regulated right now and so it's. eventually you you were able to fund or donate money to a project that could be a video game that you let's say you love a series of video games and the folks that make the game can't don't have the money to come up with the next game you can donate money to them for them to create the next game for you maybe an exchange or give you the game for free or will give you that game and was this a pre-sale if you will but because you're not actually investing in the company you know there's no real regulation and right now one of the big issues is what happens if somebody puts up a scam going to develop something and then they don't develop it that's one of the criticisms of the kickstarter has gotten is that sometimes are not as transparent with the investors because the investor they're not investors the donors if you will because sometimes their money goes nowhere and one of the things have to understand is if you do if you are investing in donating money whether it's through

the p.d.p. lending platform or this through crowdsourcing with it's through these donation platforms you are able to lose all your money at something that that a lot of folks that maybe. especially that have don't have a lot of experience investing might not realize well the jobs agone going to oppose a one million dollar cap and the amount as you are can see over a twelve month period of time is this is a reasonable cap. i think is to test the waters it's a good it's a good cap i think that one of the there are a number of reasons why companies might not even want to go even if they qualified the so-called emerging growth company that e.g. c. which is the company that's allowed essentially to leverage your utilize the crowdfunding platform one of the things that some companies actually that are eligible in other words they're eligible to get the sarbanes oxley restriction a bit sort of they don't have to follow the sarbanes oxley regulations closely.

they can file for example their i.p.o. confidentially there's a number of things that today actually companies can do right now under the jobs act. and one of the things that you know if you if you if you're looking to do that some companies say you know what we don't want to be identified as an emerging growth company because then you know investors might think oh we're you know. we. may not be disclosing everything or we're not as robust a company as the company had to go through the whole robust process so that's that's another issue to contend with there's actually some folks that qualify that are in fact. also if you manage what's going to happen on different platforms like on the day eric that have projects that are i've already collected are raised a million dollars i mean is this cap going to and the project or the litigation that comes out of this i mean well right now you can't you can you it's a million dollars and on an equity platform ok and that's after that's post jobs so

that hasn't happened right now some of the folks like you know circle and crowd funder and so forth they're actually broker dealers and they only deal with the credit investors so therefore. that was philip alice alice business advisor. i. if you agree with alan greenspan who recently said the stock market is the key player in the game of economic growth and the economy is doing pretty well the dow jones industrial average closed at historic fifteen thousand yesterday in addition to the gave the stock market we have also seen increases and home prices and

according to the as the average wages are no longer a trailing inflation but the picture is a bit bleaker for young adults in the u.s. workers aged twenty five to thirty four are the only age group with lower average wages in two thousand and thirteen than from two thousand in the year two thousand and for more on youth unemployment numbers we turn to prime interest producer justin underhill thanks for joining me thanks for having me so just seeing what are some of the major factors contributing to high unemployment for young american well the recession has certainly taken a toll on younger workers there's been a lack of job creation and the jobs that have been created haven't been have only been keeping pace with population growth in addition own the house of the unemployed workers in the u.s. are under the age of thirty four so with the decrease in the with the lack of jobs

being created and the surplus of people looking for work there's certainly been a lot more competition and it's an employer's market that we see here which means that when you look at things like a true level jobs or so-called entry level jobs are requiring more and more experience sometimes two to three years of. and a recent survey cited in c.n.n. money showed up forty percent of college graduates that have graduated within the past two years are in jobs that do not require a college degree that's really amazing the recession in two thousand and eight a fact that almost every country in the world how does you are you are youth employment compared to some of the other countries well if we take a look at unemployment or excuse me non employment for people aged twenty five to thirty four years old. and by the way not employment is more than unemployment

it's unemployment plus discouraged workers and those in school this is basically the percent of people that are not working currently and these are all affected by the economy and we can see that in two thousand and eight there was a strong uptick in employment rates for most countries specifically the u.s. had a pretty sharp uptick which is important to note because if we look at the u.s. in two thousand it had one of the lowest non employment rates of all the countries where by two thousand and eleven. among the highest appear it was still comparable to to two thousand and eight the levels that we saw it's also important to note that europe is the yellow line and that's an average of all the european countries in the o.e.c.d. data base and that's substantially higher this includes countries like germany spain italy which have substantial non employment rates but if we were to look at

places like france and germany they have a pretty low in this graph it would be in the low twenty's which is comparable to japan great britain and canada which the u.s. is substantially higher than all these countries. but what this doesn't take into account is specifically the types of jobs that are being created whether they're temporary part time or are minimum wage jobs and this is where japan comes into play so japan didn't see much of an uptick in its non employment rate during the recession but we have seen a fairly steady decrease and it's not employment rate over the past ten years. this is in part due to the fact that there has been a pretty strong increase in temporary work and temporary help huge and sees in japan so just because the unemployment rate has been decreasing doesn't mean it's

necessarily in a better situation and so what's the driving trend for that as well specifically for japan there's a system of lifetime employment where workers are loyal to the company and the firm is loyal to the workers but what we've seen over the past two decades or so when they had the recession they were firms started hiring temporary workers more so because they didn't have to have the commitment to the workers they didn't need that loyalty and they also didn't need to pay benefits and training also they didn't have to do as much. we're also seeing an increase in these temporary help agencies in europe as well specifically italy and to some extent in the u.s. . with. that means that there's going to be a lot less upward mobility for some of these people and the ramifications are still to come last friday the b.o.'s release their job reports numbers and beat

expectations but a lot of these jobs were and are very war or in retail i mean how did those numbers play into this. there's a lot of factors that played into this but they were better than expected but again temporary work was one of the major factors thanks christine. i've next i will speak with the host of the big picture thom hartmann to discuss his exclusive interview with senator brown on too big to fail then prime interest producer bob inglis and i will question that story games in the dow are we thing will grow there and this has been manipulated bubble they were. just israel's massive attack near damascus days ago why do serious raging civil war then there's the issue of chemical weapons should western support of assad's enemies people draw on it it's proven that the rebels are using them against their own people. the worst year for those things only white house or the. radio guy and a lot of a.o.

minestrone cricket because they want to watch closely to do because you've never seen anything like this armstrong. potentially deadly blizzard taking aim for the northeast it's expected to hit stunning in a few hours from new york to maine we have team coverage of the storm. but what we're watching is the very heavy snow moving into boston proper earlier today it was very sticky you can see it start to become much more connery down saying the bottom line there is still a lot of snow out near a good place for snowball fight the flu. season it is going to be pretty incredible day there and even record snowfall throughout what's been like nobody's allowed to be driving lessons to them urgency here who are exceptions.

they'll. they'll. they'll. so there is sherrod brown and david vitter recently introduced a bill that has all the town talking this bipartisan proposal. by imposing high end capital standards on the biggest banks i'm joined now with the host of the

big picture tom hartman who met with senator sherrod brown yesterday about this new well tom thanks very joining me a pleasure to be here perry and welcome so the us is digging right into the nuts and bolts of this bill under current law the biggest banks are only required to hold four percent of tyr one capital it's to be considered adequately capitalized and under senator sherrod spill that would be changed and here is what the senator had told you yesterday about that. it sets capital standards high enough for me banks have to hold equity in their of a long as a as a fifteen percent of their assets and that means if the bank has a seven or eight percent drop in value because of some market forces or some mistakes they make they still are protected against going under against the unsustainable as a financial institution that's. well now fifteen percent might not seem like that much to hold but the bill's getting a lot of pushback and a lot of criticism saying that this would just devastate the economy and then

according to an s.n.p. report they started to downgrade banks they said brown better be passed. do you think that these are reasonable standards to impose on the banks yes i do in fact i think i don't think it goes far enough but you know it's i think it's a great start right now these big banks these these have a handful five six seven major banks that control an amount of cash equal to sixty five percent of the g.d.p. of our country because they have this implicit government guarantee because they're implicitly so so too big to fail there's this moral hazard issue associated with the you know people are you know other institutions are loaning to them at lower rates and plus their exposure i mean the none of this considers the derivative exposure that blows my mind i mean there there you know just just one of the bad thing is j.p. morgan the other day the. financial times are two of forty six or seventy six trillion dollars in derivatives that slows your account. i mean it's not even

covered so if you say ok you have no reserves against that so it's like. i think what this is really at the bottom of is to try to put these banks on a more even footing with community banks state banks credit unions other kinds of institutions so that's a reasonable thing speaking about the employees that an exposé guarantees. there is you know there's a lot of other guarantees out there that we not might not be considering with the federal deposit insurance and then you have reserves from the federal reserve do you think you know the contribute to having more hazard than the banking industry as well. you know arguably yeah i mean any any kind of backstop you know of any institution falls into the into the area of what's generally referred to as moral hazard the question is is that good for society is it good for the banking industry is it good for america. you know insurance came out of the great depression because

people had put their money in banks the banks failed when they lost all their money and that wasn't a good thing for the country and that's the reason why these banks failed was because they were lending on fractional reserves meaning that we would put our deposits and then the bank would hold only parts of that and then they went along the rest of it out right meaning that if everybody went to the bank at the same time had a run on the bank they would be insolvent so i mean that was the nature of actually i see so you know if banks could if they were required to hold for reserves that would you know would we even need to after well you wouldn't you would need banks at that point i mean we do have a system probably more like i understand the middle eastern system to be were you know interest is not allowed to be charged in banks. do all the banking based on fees it would change the total structure of the banking industry i don't think

you're going to do away with fractional reserve banking and it is probably not going to a long time. i mean you mentioned that you're a supporter of reinstating blasted all prohibited commercial banks. you know from using commercial deposits and into investment activities but if we didn't have this fractional reserve structure would we even need bastable yeah we still would because basically we had we used to have two kinds of banks we used to have. banks that gambled you know the places like merrill lynch they used to be generally called brokerage houses instead of banks and you'd go there to buy stock and they would gamble their own accounts in their own stock and things like that and then you had good old boring banking you know where there were you keep your checking account in your savings account get your home mortgage and the boring those are called commercial but i have to coin that term you know boring bags like you know bring back the green eyeshades you know the just. and we need to turn banking

commercial banking anyway back into a nice boring business let the let the the wild investors go wild with their investment but not with my savings account you know not with your checking account well now this bill also brought together again members from across the aisle did mr the senator mention anything about it and thinking this would actually have a chance of becoming law yeah he said you know a year ago he was pretty pessimistic about it this year he's much more optimistic i mean david vitter is about as conservative as you can get is right and and sherrod brown is about as progressive as you can get as a democrat and for these two guys to both be saying there's something fundamentally broken with our banking system there's a whole bunch of stuff fundamentally broken with our banking system and let's take a few slices of that to do something about it that says to me that you know congress is waking up to what might be a real crisis tell the road ok well thank you for joining me and tom hartman. thanks very much for being here.

and it's time now for the daily deal all joining me as our t.v. producer bob isn't this exciting we get to talk about the stock market in quantitative easing correlation causation all the good stuff all our favorite yes well yesterday the dow hit a record high of fifteen thousand what does this mean it means it's good news for everybody who's been invested in the stock market since the last crash which is probably nobody i mean not only did you have to be you know did you not have to be invested in the market you had to be in the right stocks so while this is probably good for the market overall a lot of people just aren't feeling their two or one k.'s back up to their four one k.'s right now so i think it a lot about what's going on in the stock market it has to do with what the fed's doing their bond buying program they buy bonds eighty five billion dollars

a month they're quantitative easing and we actually have a graph that maybe we could pull up here that shows since two thousand and nine and this is actually when the fed first stepped into the market with its quantitative easing program and there was this incredible correlation between the s. and p. five hundred which is the broader market and fed assets the size of its balance sheet so there is a lot going on here and it was kind of alluding to earlier it's not necessarily you know correlation doesn't necessarily equal causation but there is a very there's a very strong case to be made that the fed through its liquidity provisions and liquidity acting alone has really goosed the stock market and this is something that david stockman had mentioned on our interview with him as well he should add in a very short amount of time that the fed doubled its balance sheets well yeah that's the monetary base and what it did. i guess let's back up a second the way the fed actually gets. in the market in two thousand and nine it was only doing this maybe once or twice a week now it's doing it just about every day the size of the purchase of that have

gone up but it has relationships with primary dealers through what are called permanent open market operations or pomos so it does these operations and it gives the primary dealers money and the strange forward treasury bonds are n.b.'s securities whatever the fed happens to be buying that day and as a result these primary dealers are the first to get what's called hot money and this is really going into financial assets what we've seen what we just saw in this graph now when primary dealer is you know they see this money first from the fed which is the biggest of banks so it's really no surprise to see that the dow is showing signs of asset price inflation and this is just the beginning signs of inflation was this money starts to make its way into other sectors we're going to see inflation and to other capacities of our lives and the last thing to rise during times of inflation is always salaries so as salaries of the workers to you know the cost of electricity and your food is going up your wages are not going to keep pace with that but it's

a good thing that excludes food and energy because people who drive and don't eat exist right. into it so you know something else that's going on and microsoft recently announced that they'll be overhauling the windows eight operating system with over forty million lines of code it was just too complicated and confusing for p.c. users since the launch of windows eight there's been a fourteen percent decline in p.c. sales and the whole reason microsoft did this was to help increase sales obviously . well in just a little. i'm going to change a few words of what you just said and kind of feed it back to congress recently announced that they'll be overhauling the dodd frank banking laws and over eight hundred pages it's just too complicated for regulators and banks now since the signing of dodd frank there's actually been a fourteen percent decline in proprietary trading which you would think it's good now congress thought this law with its colorful prohibit on bailouts would restore

confidence in the large banks but it's actually made people more skeptical of them and alternatives such as credit unions and community banks well there's a benefit so just a little comparison between dodd frank in the windows eight operating system and i would say that i have a lot more confidence in microsoft than i do in the regulators to get dodd frank or right why it's all volatile markets i think you make a good point with a community banks and the regional banks and a lot of them are crying you know they're over regulated and they're not they're not subject to the same rules that the rest of the banking system and exactly and they're still under fire and they're going to be under pressure so i guess we'll have to leave it at that for the things that i mean i do.

today we looked at failures fixes and milestones here on prime interest dodd frank might be getting repealed one club the page at a time but brown veterans got the next big thing according to senator brown who spoke with tom hartman who gave us the big picture new banking regulation and it got a little crowded as we talked to felt about new business funding options options the as the see has yet to act on then just gave us the deeds on the youngest workers who can't seem to find jobs and we. pete. incarnation of windows only to find where we can find much of anything if the next debt ceiling drama turns out to be more than kabuki and john boehner will make uncle sam paper holders whole and good news if you've got the most and while you're at it don't forget dow fifteen thousand and twenty thousand are bust but if you're counting on your thanks for

watching it and make sure you come back tomorrow be sure to follow us on facebook at facebook dot com slash prime interest from everyone here a prime interest i'm hearing and boring and have a great night. you know 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 that everything you thought you knew you don't. charge is a big. old . technology innovation all the developments around

russia. the future are covered. lucky. for. me.

to live on one hundred thirty three bucks a month for food i said try it because you know how fabulous bad luck i got so skinny i mean. i believe as i'm sitting here looking really nuts. and we're all very slow or sleepy at. worst you are going to lower my doubts to the radio guy in fort lauderdale minutes from it. what quote we're about to give you never seen anything like this i'm told. they got is i'm out in martin and this is going to set so.