back here tomorrow with more news and in-depth interviews. let me let me or john will let me ask you a question. on this network which we're having the day we have our night show. the view this time which spans staying there again during the break we'll be united we talk about surveillance. that afternoon and welcome to prime interest i'm perry and boring here and washington d.c. gets our headlines. so how much is a botched worth nowadays ten million dollars if you're facebook and the new twist

is the nasdaq exchange itself that's ponying up but the ten million dollars won't go to investors instead they go through the security and exchange commission which is the highest such penalty against an exchange this comes after last year's trading debut of that made up market dr bird a multi billionaire who left traders and investors in the lurch separately and nasdaq has agreed to pay investors two million dollars for the trading glitches that plagued the opening day. and switzerland what's known as the bashed in the bank secrecy has formally paved it to be us over allegations that our. swiss banks like u.b.s. have alerted americans into setting up accounts that would not necessarily be reported to uncle sam and the new a legal framework is set up by the swiss a government will allow dozens of banks to settle with u.s. authorities a move was expected to bring in billions to the treasury we're going to talk about the debt ceiling later today with one would drop the public notice and finally

headline brown herbalife of. back in the news with the new auditor. had formally retired their accounts because of an unrelated and that are trading charges against the auditor and its place and now is pricewaterhouse coopers but there's a catch as journalist francine mckenna points out and seems you see this close that it performs substantial consulting work for herbalife during periods that have to be read audited this code in paris independent something that is prohibited by as these the rules well maybe the as the c. can use that ten million dollars from nasdaq to start enforcing sarbanes oxley whirling arbroath let's get to what's in your prime interest.

back in january house republicans struck a deal with senate democrats to temporarily suspend the debt ceiling and exchange of congress didn't pass a budget which the sit in the senate has not done in about four years the members of congress would have their pay with held under the no budget no pay act the debt ceiling debate was separated from the debate on spending cuts which house republicans have retained only said they would not vote on increasing the debt ceiling without a match as congress continues to kick the can down the road on reigning and our ever growing trillion dollar debt the debt ceiling was reinstated on may nineteenth at sixteen point seven trillion dollars which we've already hit currently we're operating under extraordinary measures and just to keep the government running joining me now is lynn wood brooks of public notice to discuss. and so nice to have

you here. so. yes i was head on may nineteenth there hasn't been a lot of talk or discussions about this on capitol hill why is it that the quietus the right well you know capitol hill they like the way to the last budget and even though they did hit the debt ceiling in the middle of may they have until around october perhaps to use these extraordinary measures where they're borrowing against the retirement of federal workers and other things just to get by so you know nothing's new here in washington you know even though they have time to plan now they're really not. think that might change before they go home for the august summer recess but up until this point there's been very little talk on this issue which is unfortunate well i was that worried when they passed no budget no pay because they suspended the debt ceiling which didn't exist for several months did that concern you was this a concern and what was keeping keeping congress in the administration from just spending out of control during that time well you know it is concerning to me in

the fact there could be unintended consequences we probably don't want washington to be in the habit of suspending the debt ceiling you know we were promised so no budget no pay that they would use that to pass a budget well they passed a budget in the house passed a budget the senate what they didn't tell us is they didn't pass a budget so that leaves us exactly where we were with no budget they bought more tom to have this debate good so in terms of your second part of the question i wasn't worried about the president spending more you know than the current law allows him to spend you know i'm sure there is a little bit of leeway the administration had but for the most part you know if there's going to be money spent the cost of tuition requires that to be authorized and appropriated by congress that's got and it was interesting that we had the senate and the house both passed a budget but nothing became law because then they had to come together and make one budget that fits and then send it to the president to sign off that or he doesn't sign it and he does the the budget is one of the most confusing mechanisms in

washing. it's in the form of a resolution not a law but the congressional budget act that started this whole process requires that the house and the senate pass a budget on or before april fifteenth we haven't seen that happen in an incredibly long time and was a budget important it's a blueprint we need a blueprint on how we spend it also sets the top level spending amounts on the appropriations committee and it does allow the tax measures and spending measures to be fast tracked for the senate where the filibuster doesn't necessarily apply and you can pass legislation with a simple minority vote instead of a supermajority vote and public notice launched the campaign bankrupting america and you guys published a video that by some humor in the debt ceiling debate and i want to play that for our viewer is. this your here. well that's your problem there can't you fix it we can make deceiving tolo if you try to ignore me it's not going

to look good. i'm going to move it's. how is it that you can compare the u.s. federal budget to it does every american household well you know it's very challenging but what we try to do in this campaign is really break it now where the average american can understand what's going on and you know we have a debt ceiling and what's happened in years past administrations past both parties is raise the debt limit and we've seen very little action to really have serious reforms that we need i mean right now the debts over one hundred percent this the entire u.s. economy and most professors and scholars in economics will tell you that when that happens it can stranger ability to grow an economy and there was also a study by rinehart in robot that you probably saw and then came after them this

weekend and he they said man you know when. wrong and he's saying they're wrong and that having large amounts of debt does not construct an economy do you have any comments on the survey that well i mean all i can say is look what's happening right now in europe look at spain greece italy debt doesn't matter and to start with the premise a dead doesn't matter is is this a false promise and there was you know there are some smarter errors that were pointed out in that study but the premises reach that level of debt does affect economic growth us think that promise still stands now i want to go back to what we're we're speaking about on comparing the u.s. budget to a household and there have been criticisms of this as well matt tavi from rolling stone wrote that the national debt is totally unlike a family budget for a good zillion reasons not that the list of which being that families cannot raise money by or deflate the size of their budget you know laterally and their family members die instead of extending existing indefinitely and comparing your family

budget to the sovereign debt of the united states is like comparing to kindergarteners tossing paper airplanes to the apollo eleven mission and i agree we have a spending problem is it over are we oversimplifying here well i mean the things that come out of washington are complicated so when you use that analogy the federal budget to the average american household you know it's not going to be perfect but i think the core of that argument still stands i mean when you talk about households cannot spin their way into oblivion we have think that's true and the reason so many people put it in household terms is so the average american can understand it i mean look we're talking about trillions of dollars in deficits as far as i can see in billions and it's hard to for the average american really understand that so that's why so many people in washington use that in the knowledge you so the average person you know in middle america can understand how this impacts them but what came out of this argument why is the passage of no budget no pay saying that we will pay our. creditors before we. things like

medicare and v.a. so. anywhere where are you on that argument well you know we saw that argument come up in the last two weeks in the house. it did allow they should allow people that hold our debt to get paid first in terms of it being a good starting point the debate you know that's where i think we are it's where the house republicans have started the debate is it perfect policy probably not but you know when you're talking about these budget issues they are complex when you're talking about only spending what you take and that that requires very difficult decisions to be made but you know do i think that's going to come become policy probably not well now that we've hit the debt ceiling we're operating under extraordinary extraordinary measures can you explain what they are and how they work sure so you know we've seen this happen for years all types of ministrations of uses so it's nothing new but when the debt ceiling gets hit in statue they use several basically accounting gimmicks to allow us to buy in this case they're

buying a couple of months tom and i was like i was saying you know they'll borrow against a federal retirement and things like that with the intention of paying it back but it's just moving money around to give them a little bit more leverage till the they reach a conclusion on this debate of federal retirement is that social security no this is just the federal workers that put forth money into their or their plans or similar for one case but this isn't so sure and what we have from social security well we have you know you have the so sure to trust a lot of americans think that's a lockbox with their name on it with their money and it's not i mean for so many years when social security ran surpluses washington spent that money so you bring up a good point that money's been spent and they've got to see a transition right what do you think that selling ceiling debate is going to look like well you know we're going to see this unfold over the next few months it looks like both sides you can be sticking their ground i hope that washington comes in.

whether on some big type of bargain you know is that going to happen i can't say but i can say these are major problems we're facing these in our country today and requires tough decisions we can address these now or we can address some later in the longer we wait the harder it is to address the fiscal imbalances we have in the united states of america but with all the other scandals that are just plaguing congress and the administration right now do you think that's going to make it less likely to add debt. to lucia's i think it's too early to tell think it is distracting you know it does bring up the point of what's going on in the administration is it incompetence is it purposely targeting conservatives in terms of the i.r.s. scandal i don't know but it does kind of change the debate here and something that we wouldn't force of forcing them up to go is into the debate so it could change things absolutely what do you think is a bigger priority either addressing tax reform or the budget i think the budget i

mean you know we see some of that right now in the house so they're talking about a three part bill that raise the debt ceiling which would raise the debt ceiling cut spending and have tax reform i think it's dangerous to have tax reform in this debate and look in the fiscal cliff debate in january we already raise taxes and we raced back to significant so yes we need a huge debate on iraq this time before thank you so much as this one what broke the public now i thank you. stay tuned because when we take a harder look after her secretary treasury and fed chairman a front man a larry summers you won't believe what he did when he was president of harvard and then prime interest producer bob inglis and i explored the lighter side of sovereign debt straight from the madison avenue state.

here's mitt romney trying to figure out the name of that thing that we americans call a dollar. i'm sorry i missed the guy who cares an awful lot about my country you sir are a fool you know what kind of mind the terrorist cells in your neighborhood all want to give us a defeat terrorism be a liberal and the christian. can secure the borders. you know the polls are going to distract us from what you and i should care about because they're profit driven industry that sells of sensationalistic garbage he calls it breaking news i'm abby martin and we're going to break that.

world. series technology innovation all the least a million minutes from around rush hour we've got this huge you're covered. i. know when we talk about the revolving door we often think about it shuttling people between washington and wall street but today we're going to highlight another stop on the shuttle the ivory tower and the lucrative consulting fees available to those in academia and who better to highlight this conflict of interest then mr larry summers. we are now seeing reports that he's the top pick to replace

a federal reserve chairman bernanke so let's see where summers got his start he began his career at mit in the late seventy's where he first met ben bernanke mario draghi and stanley fischer who he would eventually succeed as chief economist at the world bank it was there that he drew criticism for his views on toxic wait now i'm not talking about the actual are not talking about financial toxic assets which he later supported and actual toxic waste he approved a memo that said quote i think the economic logic behind dumping a load of toxic waste and the lowest wage country is impeccable the underpopulated countries in africa are vastly under polluted. later in the late one nine hundred seventy s. while serving as deputy treasury secretary he worked closely with robert rubin and alan greenspan to overturn the glass steagall act and he also worked to ban

proposed regulation of all privately traded derivatives he testified to congress that the parties to these kinds of contracts are largely sophisticated and financial institutions that would appear to be eminently capable of protecting themselves from fraud and counterparty and solvency. summers would go on to become the president of harvard university which boasted the largest endowment fund of any american university the fund was loaded with these very derivatives that he supported but an employee of the fund management company as ira smacked fired off a warning letter to summers about the positions and challenge of the competence of the fund managers for her trouble she was fired but she was eventually proven correct when harvard lost an astonishing twenty seven percent of its and down meant because of these a very derivative positions summers eventually resigned his post at harvard and two thousand and six after a speech he gave where he suggested women are biologically inferior to men in

scientific reasoning but during his time at harvard he had begun supplementing his income through consulting and speaking engagements for financial institutions after he left in two thousand and eight he made one point seven million dollars from speaking engagements goldman sachs paid him a hundred thirty five thousand dollars for one speech and summers would eventually donate to charity the forty five thousand dollars paid by merrill lynch that was after the firm nearly collapsed by losing billions in the c.d.o. derivatives market. but his greatest act was to come in two thousand and nine when it seemed three hundred and fifty billion dollars of tarp bailout funds might not get congressional approval so larry summers as chief economist advisor to president obama sent a pair of letters to congress he was critical of the way tarp had been handled and pledged that bailout money would be used to aid homeowners and foreclosure further

banks would be denied funding unless they agreed to increase lending above baseline levels but the foreclosure victims got little relief and the banks did not commit to lending in the end the three hundred fifty billion dollars remained approved. and that's the profile of mr larry summers he was a front runner in the race for fed chairman. and it's time for the daily deal with bob inglis and i hope your suit is comfortable they're going to be here for a while well thanks for joining us now let's talk about sovereign debt now and starkly the japanese have had one of the highest household savings rates in the

world and the citizens patriotically buy government bonds at very high rates but with an aging population forced to spend its savings to survive the rate has plummeted over the past decade and in europe there are concerns about some countries becoming insolvent which raise concerns about the fate of the european union itself spanish italian portuguese greek and even french bonds have become unhinged at times since a financial crisis in higher yields mean higher interest payments a vicious cycle in the here even in the u.s. where bonds are thoughts of the relatives. save there are concerns what happens when the largest marginal bond buyer that is the federal reserve stops buying treasury debt as a part of quantitative easing right so it seems the global sovereign bond markets might be entering a crisis era it's no surprise then that the new banking rules such as basil three force banks to own more sovereign debt run better not withstanding and for the investing public bonds are promoted as a safe way to has portfolio and reduce volatility but they're not without their own

risk when interest rates turn the corner and eventually they're going to rise divine that are paying out such low rates like wanted two percent are going to lose market value right in a kind of reminds us of one of those drug commercials where they list all the benefits and you know they go on and on at the same. well we thought it would be interesting to make one of these commercials and let's roll it. when you're searching for relative safety and investments where can you go the weight of portfolio underperformance can hurt in so many ways don't believe that moody's and s. in peace a sovereign debt can help sovereign debt is a tool that can treat many symptoms of portfolio imbalance tell your broker right away if your net asset value deteriorates were if you have thoughts of liquidating your account sovereign debt is not approved for as in the ratings under triple b. minus and people reaching for yield should not use sovereign that may lead to

portfolio downgrade cash haemorrhaging basis point leakage spreads blowing out seizure of assets and should not be taken at the commencement of a tightening cycle ask your broker and come back to sovereign debt. but we like to thank all the production staff who played a part in making this commercial where sovereign debt really is an issue that we need to talk about right and who's actually going to be buying this debt let's talk about how the federal reserve buys it first let's say that the treasury has an auction. and there are various banks called primary dealers they have to participate in these auctions according to their range with the federal reserve in the treasury department now the federal reserve doesn't buy them directly it's a maturing bond on its port for on its portfolio let's mention that primary dealers like me who are the crimea is how you become primary dealer and why why isn't everyone offered this unique position with the federal reserve sure the primary dealers are banks and big brokers and what they do like i was saying is they have

an arrangement with the federal reserve and the treasury they have to participate in all treasury auctions but they also in gauge what the fed the fed is buying eighty five billion dollars a month forty five billion dollars in treasuries forty dollars billion dollars in m.b.'s and these guys are primary dealers participate in these auctions with them now m.f. global was a primary dealer and it was kind of a big deal for the make gave them a lot of status and the interesting way this went down and what happened. they eventually went down but the way that they became a primary primary dealer is interesting they had all kinds of regulatory problems in two thousand and seven two thousand and eight they had a trader blow up part of the firms and not as big as junk or as i did but it was about one hundred forty million dollar trade in the wheat market i think and the c f t c was scrutinising about global and as part of the deal the federal reserve bank of new york is the one who has to approve all primary dealer applications they said you need to clean up your act for a year and we'll see what happens and maybe you can become the primary dealers and

guess who m.f. global hired to help them over that your long period. probably very yes predatory financial group headed by gene ludwig you know the former the former officer of the contrary to the current currency and he's the guy that's hired dozens and dozens of former high level regulators at his firm prominent tory and it's called the biggest shadow bank the biggest shadow regulatory firm in existence so back to the back to the m.f. global story i'm going to close this tight little boat here. after prom and tory came in they reviewed m.f. global's risk controls and what happened after a year everything looked good march two thousand and ten they signed off john corazon enters a firm and he starts putting on these trades now some people will say oh. you know he's a new guy at the firm from and tory was a was advising them on their prior risk controls but really they were controlling and they were managing their risk and customer deposits on an excel spreadsheet and

that's how they eventually lost control of customer firms in the final chaotic days so i know you have a lot of gray inside. there your experience in the finance service says i want to talk more about this tomorrow as well but we do have one announcement we want to make larry king is now the newest member of our team at our team and beginning and they're going to start airing larry king at now and politics with larry king on the r c american network at five o'clock right after exactly right after us so in june larry king's existing show larry king now will be carried right here are to america and i think we have a promo that we can view here real quickly. i

would rather questions to people in positions of instead of speak on their behalf and that's why you can find my show larry king now right here on our t.v. question more. and it's i was waiting for that fourth. really looking forward to asking larry king's one question. you're in wars you're at or two so and you want to weigh in on today's show you can follow us on facebook at facebook dot com crime and trysts justin you can follow me on twitter english. and my twitter handle as herion r t you think.

so it's been a day of retribution and redemption here on prime interest that's the c extracted a ten million dollar pound of flesh from the nasdaq with a president like that mary jo white may not have to go back to congress for more money this year we saw how stubborn governments are going hat in hand to investors to buy their ever so sovereign debt and uncle sam also twists it at you at bankers arms across the pond and up the outs the swiss might not be guarding the pope but there we might be carrying the pope but they're not guarding american tax dodgers anymore and how about the debt ceiling well we got a bit of plaster dust out of our i started staring up with lynwood gross of public

notice we put larry summers on the notice with his hat gig speaking gigs that is thirty five one hundred thirty five thousand dollars is a nice payday from goldman if you can get it and larry summers dead after paying for tarp and thinking harvard's endowment thanks for watching and make sure you come back to tomorrow from everyone here at prime interest i'm terry and boring publicly. download the official ati application to yourself choose your language stream

quality and enjoy your favorites. if you're away from your television on the ball it just doesn't matter how would your mobile device you can watch ati anytime anywhere please. please

. to live on one hundred thirty three bucks a month for food because you know how. i got so many i mean. i know i'm seeing the same thing really messed up. in the real story so personally apologize and. worse you are going to. fly down sort of a. radio guy in fort lauderdale minestrone something i want to watch close to because you've never seen anything like this i'm told. how the folks i'm at a martin and this is breaking the sex stores have pleaded guilty.