u.s. debt default but president obama doesn't agree with the reasoning that any of these fall on promise is not as on debt repayments and hurts u.s. 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 falters 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 hazard in the new brown a bit vitter 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 priorities proportion trading but hedge funds are scooping up the bank trigger

a former goldman partner says the regulatory posture in the us and europe is unequivocal they want to transfer risk to the shadow banking system save soon to see how to interconnected to fail plays out when burning he throws his baby huey out with the liquidity bathwater and here is what's in your frame of interest. crowdfunding 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. distributed more efficiently section

three of the jobs act would expand 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 about his business advisors which is an international management and financial consulting 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 crowdfunding popcorn right now if you want to an equity investment you actually have to be a credit investor with if assuming the jobs act 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 in start up companies that's true and so that you there will be an opportunity that opportunity will be limited by how much these 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 pop forms like 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 essentially 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 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 exchange or give you the game for free or they'll give you that game . i 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 of a crash 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 actually a 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 you've done or stand is if you do if you are investing in donating money whether it's through the p.d.p. lending platform with the crowd sourcing with us through these donations you are able to lose all your money and it's 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 agrah 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 to centrally to leverage or utilize the crowdfunding platform one of the things that some companies actually that are eligible in other words they are eligible to get the sarbanes oxley restriction a bit sort of they don't have to follow the sarbanes oxley regulation as 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'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 a company 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 erik that have projects that are i've already collected or raised a million dollars i mean is this cap going to end the project or the litigation that comes out of this. well right now you can't you can it's a million dollars of it on an equity platform. 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 the only deal with the credit investors so therefore. that was philip alice alice business advisor. i.

have 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 americans while 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 the haven't been have only been keeping pace with population growth in addition only house house of the unemployed workers in the us are under the age of thirty four so with the decrease in the or with the lack of jobs being created and the surplus of people looking for work there's certainly been a lot more competition and there's some employers market that we see here which means that when you look at things like a true level jobs or so-called entry level jobs they're 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 well 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've 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. database 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. 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 in 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 that'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 firm 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. 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 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. og next i will speak with the host of the big picture tom hartman to discuss their exclusive interview with senator brown on too big to fail then prime interest producer bob english and

i will question that story games in the dow are we seeing real growth or is this just a manipulated bubble they were. old . technology innovation all the developments around russia we've got the future are covered. mission. couldn't take free. free. free. free. free. old free blank. free. wealthy british.

really happening to the global economy. elite. have been going

down of the sun and in the morning we will remember that we will. so there are shared brown and david vitter recently introduced a bill that has all the town talking this bipartisan proposal to end too big to fail policies 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 parry and welcome so the us is dig right into the nuts and bolts of this bill under current law the biggest banks are only required to hold

four percent of tear one capital it's to be considered adequately capitalized and under senator sherrod's bill 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 unsustainable as a financial institution that's. well now fifteen percent might not seem like that much to hold but the bills are getting a lot of pushback and a lot of criticism saying that this was just devastating economy and then according to an s. and p. report they started to downgrade banks that should 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 i think it's

a great start right now these big banks these these 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. you know the other institutions are loaning to them at lower rates and plus their exposure i mean 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 which of forty six or seventy six trillion dollars in derivatives that suppose you're down. 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 employers 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. 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 it good for society is it good for the banking industry is it good for america and 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 there's no reason why these banks failed once

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 everybody went to the bank at the same time had a run on the bank and solve it so i mean that was the nature of actually i see so you know in part if banks could if they were required to hold for reserves that way you know would we even need to actually. 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 and banks. do all their 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 plastic 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 bassil yeah we still would because basically we had we used to have two kinds of backs 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 a good old boring bank you know where there were you keep your checking account in your savings account your home mortgage and the boreen those are called commercial but i have to coined that term i love it you know boring bags like you know bring back the green eyeshades you know and 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 the

minister 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 the series 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 is. a whole bunch of stuff fundamentally broken with our banking system and let's take a few slices of that do something about it that says to me that you know congress is waking up to what might be a real crisis down the road well thank you for joining me thanks pleasure to be 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 and 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 you know 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 adding alone has really goosed the stock market and this is something that david stock went. mentioned on our interview with him as well we 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 into the market in two thousand and nine who 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 in extreme forward treasury bonds or 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 the primary dealers 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 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 is 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 thought exercise here i'm going to change a few words of what you just said and kind of freedom. 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 done frankly 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 vitter has got the next big thing according to senator brown who spoke with tom hartman who gave us the big picture of new banking regulations and they got a little crowded as we talked to philip ellis about new business funding options options the as these see has yet to act on then just gave us the details on the youngest workers who can't seem to find jobs and we peaked. 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 john boehner will make uncle sam paper holders whole and good news 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 you 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. download

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in the early hours of a hot july dawn a group of unusually dressed people carefully head on to the shore of one of the me up as tributaries clad in servant military uniform from the days of world war two. in the summer of nine hundred forty one on the sort of deal the crossing the. one hundred thousand people were killed.