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 medicare recipients 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 promise is not just on debt repayments 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 falters you chose not to pay their mortgages in two thousand and eight and two are approaching the three year anniversary of dodd 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 on the f.b.i. see 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 and credit trading is going big banks are getting ahead of new rules that were her priority porous area trading but hedge funds are scooping up the banks trader 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 saved 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 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 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 consulting consulting firm let's see what philip had to say. you're going to be able to approach these folks that may not know about your investment and really by the way these two hundred thirty 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 i think that's really the big story here for

crowdfunding soman do you have to be an accredited investor to invest in a crowd. on a pop up right now if you want to do an equity investment you actually have to be an accredited 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 right so then you also have pop warmth like kickstarter here except on a chance 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 are 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 we'll 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 now that you're actually 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 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 on the especially that have don't have

a lot of experience investing. not realize all the jobs agone going to oppose a one million dollar cap and the amount issuer can issue 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 did 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 it's 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 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 if this cap going to and the project of the litigation that comes out of this i mean well right now you can't you can it's a million dollars and on an equity platform ok and that's after that's post jobs so that hasn't happened yet 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 they're not. that was philip alice alice business advisors. 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 age 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 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 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 non employment rate has been decreasing doesn't mean that's necessarily in a better situation and so what's the driving trend 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 very were 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 have 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 the story games in the dow are we seeing real growth or is this a manipulated bubble they were. some .

of the going down of the song and in the morning we will remember that we were we were. modern russia was built on coal. fuel for its factories. coke for its steel. coolers it well and heat for its people. joined me james brown to meet the men who spend their lives underground and work in one of the world's most dangerous professions. woodlands. hearts of coal on altie.

download the official publication to. so choose your life stream quality joy you'll save the earth. if you're away from your television well it just doesn't matter how would your mobile device you can watch on t.v. anytime anywhere. so they're shared brown and david vitter recently introduced a bill that has all the town talking this type r.'s and proposal would end too big to fail policies by imposing high and 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 doing 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 senators 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 bills getting a lot of pushback and a lot of criticism saying that this was just devastating economy and then according to you and. n.p. report they threaten 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 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 that 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 florida the six or seventy six

trillion dollars in derivatives that suppose your account. i mean it's not even covered so if you say ok they have no reserves against that so it's like. i think what this does really at the bottom it 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 as thinking 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 it good for society is it good for the banking industry is it good for america and you know the insurance came out of agree. 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 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 if banks could if they were required to hold for reserves that way you know would we even need to actually see well you wouldn't you would need banks at that point i mean. you would you 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 they 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. 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. you know 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 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. the boreen those are called commercial but i have to coin that term i love you know boring bags like you know bring back the

green eyeshades you know just. and we need to turn banking commercial banking anyway back into a nice boring business. let the let the wild investors go wild with their investment but now with my savings account with your checking account well now this bill also brought together new members from across the aisle the minister the senator mentioned anything about it and thinking it would actually have a chance of becoming 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. 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 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 and tom hartman thanks

pleasure to be here. and it's time now for the daily do 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 to a 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 may 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 first step 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 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 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 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 it had 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 the extreme for 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 that 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 dealer is you know they see this money first from the fed which is the biggest bang 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 now 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 c.p.i. excludes food and energy because people who drive and don't eat. right you think. so you know something else that's going on and microsoft recently announced that they'll be overhauling the windows eight operating system what 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 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 such 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 right why it's all volatile markets i think you make a good point they can't any banks and the regional banks and a lot of them are crying you know they're overregulated and they're not they're not subject to the same rules that the rest of the banking system and it's 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 ok thanks i mean i do.

today we look 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 the see has yet to act on then just seen gave us the deeds on the youngest workers who can't seem to find jobs and we peeked through the evening incarnation of windows only to find what 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 here's some other part of it and realize that everything you thought you knew you don't. charge is a big. real

damage. complexity of this oil spill is not something you just by looking at dirty birds we have between. four to five million people in this directly affected area of the coast and it's pretty clear why it's not being reported because b.p. can't afford to have a reported all along the gulf coast are clean they are safe and they're open for business if b.p. is the single largest oil contributor to the pentagon the us war machine is heavily reliant upon b.p. and their oil this is a huge step backwards for the mocker see it's a step forward for the oligarchy carex it is toxic is a look a lot like spraying and. it was it was not a picture that either the government or b.p. really wanted to have out there i don't want dispersants to be the agent on. his bills.

spectacular regiments a military hardware parade in the heart of russia's biggest cities as a country commemorate sixty eight years since victory in world war two. cracks widen between china and japan with beijing questioning the ownership of a group of islands piling pressure on an already sensitive territorial dispute. and growing worries over so-called benefits tourism in the e.u. member states take steps to fan off migrants from poorer countries.