now have a great night. please .

good afternoon to welcome to prime interest i'm perry and boring in washington d.c. let's get to our headlines. paul volcker made some controversial statements yesterday in the x. federal reserve chairman who's most famous for whipping inflation then by raising short term interest rates to twenty percent he criticized bernanke he's pedal to the metal bond buying saying that there are risk of inflationary potential and speculative distortions he also said central banks tend to be slow to remove stimulus no kidding paul but we do enjoy our central bankers talking tough from

time to time and don't frighten viewers because if you're. a former general and cia chief who resigned in disgrace well there's still a way for you to cash out another revolving door david petraeus has now joined the private equity giant k.k. are following in the footsteps of james baker the third and dan quayle the move to the lucrative private equity field will help him capitalize on his substantial connections and according to bloomberg a former general will be chairman of a new enter an institute focused on macro economic forecast public policy advice on investments in emerging markets and. what we do know that it was his communications with paula broadwell that got him in hot water in the first place. let's get to what's in your prime interest.

and how we to thousand and eleven the futures and the street was rocked by the failure of a midsize brokerage firm which was forced into liquidation and bankruptcy junk or zine a former goldman sachs c.e.o. and former new jersey governor and senator had made highly leveraged bets on european debt with further money as creditors became increasingly concerned about m.f. global's solvency they demanded more cash and collateral but when the dust settled one point six billion dollars of customers was missing and these were not investors who had decided to risk money on the firm these were customers who simply put cash

in securities on deposit with m.f. global to security. raids former f.b.i. director louis freeh he was appointed the trustee over the parent holding company is suing john corey's sign and demanding a jury trial something that's pretty unusual for a bankruptcy case i talked to earlier today with john breaux co-founder of the commodity customer coalition as well as prime interest producer bob english and i asked john what's the strategy with free demanding a jury trial for corey's on and here's what he said. yesterday is very simple you're. going to work. with. jurors more for i have a very strong. program through artwork and i think there's a graphic right. there when i was doing. there's debris or even here and one creditor over. here and the whole thing around you.

so it will be kind of obvious there. is going to. be more. damages for class. and there's also a class action suit against j.p. morgan and there is and j.p. morgan recently settled can you explain the bank sprawl and mass global and what the settlement means for its customers. well very simply because i know that is good. you're coming back. you're. going. with the gays and with the gays you know where you are. just going to new one do you more of a role or were they were times when every time you have. received. crack or. were buried

we're gone. to cover overdraft. and that's really sort of the start of customer money. misuse for where they were going to and j.p. morgan is all. creditor all the company how many different. organized global carla contrary to the chaos we just savings they should have known that money was coming from customer bosco. and the whole private fund they received it back they drive. drunk or design and is forever signed off on tax free work. picture that is over half our day and what that all means is that the banks have a vested interest in maximizing our conferees as a creditor. services and they will put in that.

recovery for cochran. we think they overstep their bounds and trust the new m.c.i. data magnus and. go shooting with j.p. morgan to maximize recovery. and i think the classic settle that is the right. one with a vase and doesn't win by any good except by facts and once you make out. a customer's both a quick and easy going dollar is the best we could possibly hope for i think the legal fees are going to be in a range of eight million by kind of ask for more we'll talk to you think the copyrights are being recently stated here and. they're going to get one hundred percent of their money back now and i think john will agree in the early days of after the bankruptcy the customers were just left in the dark and that's one of the reasons why john james to a sound of a commodity coalition they did the c c c and it's the customers are going to get

a hundred percent of their money back. but are they going to receive interest on it it's clearly taken a lot longer than it should have and that gets back to the bankruptcy and liquidation structure and just to get that get to that for a second you know the holdings company filed for chapter eleven and that is basically for reorganization and chapter seven would be a liquidation so a lot of people are saying well the holdings company should have filed for chapter seven because at least then the executives would not be able to run the show and they ran the show until louis freeh was put in charge as a trustee and then the broker unit well it was put in a soup equipped with a should which is for securities customers not futures customers well there's also another name here gary gensler he's the chairman of the c. f.t.c. he conveniently recused himself from the entire matter after bankruptcy filing now he did work for goldman sachs and john corazon headed the firm in the late ninety's but according to the c.f. do you see as obvious of inspector general he was advised that he didn't have to

recuse himself and that's global's customers were left in the dark and looks like he was basically an absentee landlord as m.f. global just sunk so what's the significance of this report and can we expect any real changes as a result john. here. there are obviously we want to hear your. words we don't. want to be. divisive. there's. really. no. more.

well maybe not so much. i don't i'm not sure because we won't know the full details of exactly what happens in that period there until after one of our justice is to move ahead with the federal prosecution. and a lot of the stuff comes out but at the end of a what it means is the city of regulator froze when they shouldn't be allowed their violent and only companies to go ahead and go into chapter eleven federal court management is not aware of shortfall several days after it was very clear they were not and they know that you were involved they knew it involved. and then they knew that they were actively working with to try to go into bankruptcy that would work so i mean i want to investigate this and how it happened and how all the government man chapter eleven was all of you know our innovation west said hey we want to be

somebody here has got to my paper wires is bought from all the various versions of our last one for feeding into chapter seven it doesn't belong to everyone and of course a year later that's exactly where the creditors are holding up what we're part of reaction to just getting the liquidation nominated and providing it when people are getting big money or orders. i think that the f.t.c. they will articulating. the process by which product works and then just. you know the next share the first with the f.t.c. maybe you know the first to work for goldman sachs. and if that is the case that's wonderful with people who've got experience in the market major conflicts arise we know. well there is speculation that gary gensler might not get a second trial partially due to the values and that of all bob what do you think of all that i think that gary gensler was compromised but not necessarily because he

used to work for john corps and he didn't even work in the same. general area scores and so i do think it was a little bit ridiculous it was a copout that judge recused himself now he was working heavily on swaps regulation at the time and people have to understand that it was a big coup for the c.e.o. to see to be able to regulate a big portion of the seven hundred trillion dollars derivatives industry and that was really his focus i don't think gary gensler really cared about the futures and it's true that much and that's what we saw when the like you said to see it to see was kind of an absentee landlord in those early days and the fifty's the pop regulator if this is up for reauthorization if i were congress you know which might open the doors for the opportunity to see change here and you've said you have an innovative way to to make more prosperous protected if there's another and that paul can you talk about your plan dying. we recommend the former as a guy says issue there's agreement between the different that together governor

money for bankers. are made with a very very simple basically there's two bags of lumber the laws that govern mining program are they work together we're going to group it was back in front of rob. and then say good bye and bankruptcy because well in reality is we're going to run the money for customers are they in general records. and the and therefore it was via the ninety one automatically mean to disparage through her not to receive. any money left in the city got to go to a package or all are well and i'd be ninety nine there was an se underwent a bankruptcy with this were all very smart and brave nominees and the judge ruled the p.c. existed exactly your and gordon. in the making rules that if it was an investor is a agreement with the partner about what is out there and there is

a whole. people say well you got to pay for priority here where you got your brand or you're going to get all these lawyers involved in all our committees under there you're going to get no we're going to be back and right on for a week later or bankruptcy you're going to be here for. americans to go but we understand there were. secured creditors you agree we're reminded of the stock over the we're going to your debtors are ours are we will get money back where you were so our planet or whatever it is a commodity or for there's you know to subordinate your interest we're going all over here we're going to. call the creditor we're going. to crush them or. maybe we have nobody to go order we have more priority there in your work. that was john rau co-founder of the commodity

customer coalition and prime interest producer bopping us states into because up next i'm going to air my exclusive interview with from the big conference with trail c.e.o. jerry and that we get to the top of regulatory environment around first of all currencies and exchanges and bob and i are going to do about a fleet of rock concert in spain. here's mitt romney trying to figure out the name of that thing that americans call a dollar. i'm sorry i'm just a guy who cares about what you sell art school you know what that is so.

that's why. featurism be on. the front. usually the. union distracts us from what you and i should care about because they're a profit driven industry that sells a sensationalistic garbage he calls it breaking news i'm out the mark and we're going to break this that.

when i visited the twenty third team that point conference in san jose i had the opportunity to sit down with jared khanna the c.e.o. and founder of trade hill which is the first u.s. big going to exchange platform as you may know virtual currencies are entering a dense regulatory environment here in the united states i first asked mr ken what are the f.x. federal and state regulations and know your customer laws are having on his exchange. server and it depends it depends on the amounts you're trading and what not a trade deal we're really focused on compliance that's that's our priority so we don't do any trades unless you verify your identity with us or you can come to our office in san francisco and verify in first and we have a notary that can make a copy of your identification or we can use our online services as well what are

the regulatory requirements to operate an exchange i. side of the u.s. but u.s. customer and so it depends once again on the state but. federally you're supposed to register even if you're operating in another country and for example city california if you have employees are should say officers in california if you have service banks or customers in california you need to register with california so they don't operating outside of the country is not it is not an excuse as far as the u.s. government's concerned and even if you are registered for example with f.s.a. in in the u.k. they're still going to want you to comply with the u.s. laws if you have american customers so there are options exchange is. there are and they're at risk for prosecution by the u.s. government if they don't comply with u.s. law. what i mean is based in japan. and they were just they just had fun seized by

a department homeland security and there's there's other exchanges that are operating in europe and south america as well. as now god is having serious competitor i know now they're facing off for the challenges but i guess maybe before the seizure and that may have any serious competitors in the markets behave . i think they've got about a sixty percent of the market give or take right now so there is some some pretty serious competition from from bit stamp trade you know we deal with high net worth individuals and people are looking to buy and sell large amounts a big point so we definitely compete with them in that area what are your clients look like are in what it was the demographics of your clients most of them or individuals that want to make high risk investments or hedge against their currency risk with you know the dollar or the euro so it varies from you know some some libertarian types that you know want to put you know fifty thousand dollars into it or the other day i had a billionaire walk in and he said how much can i buy ok you know he said you know

can i put five million in here and just. he just wants to get away from the dollar . are you seeing that as a trend oh yeah for sure the seas are jumping all over this d.c. yes they're used to high risk investments with high returns you know you look at you know if you if you got into facebook years ago you knew it was either going to be a big success you're going to see this huge return or you're going to lose it all and they're trusting other accustomed to seeing giant returns or losing their investment. how do you feel about peer to peer lending and some of these social lending bangs do you see that as a child as well as a more v.c. is getting involved in these types of. investments as well i think i think that's going to continue to grow and i think i think that coin helps enable that because you don't have to go through traditional print to it it's own system that's easily integrated with i think peer to peer lending and back point i mean i think you can say some of the same challenges of having to deal with all the state regulations

and are you guys working together at all with the critic you're living talking to people and yeah not any specific companies now can you see any correlation between the two. for sure i mean they're both the roads emerging technologies that enable people to really you know control their finances you know in ways that we're not we're not accustomed to normally when you when you want to move a large amount of money you go to the bank now you can use when you want to loan money to someone normally you would go to the bank so you can bypass the entire thing. is wall street or any of london any of the big banks are they entering that bank marketplace at all. not that i'm aware of there is there's i have talked to senior people at banks that find it really interesting and they're definitely looking into it and they're really trying to decide what they're going to what they're going to do but banks are traditionally very slow to move on on things like this do you think they see bank points as a right and all. i don't i don't think they're going to see it is

a threat i think right now they're looking into it and to see to determine actually how useful it is for for criminal activities and you know if it's something that they can control when i when i talk to the bank say look and they say you know how well can we trace back the path of this money the source of funds and whatnot so right now they're just they're just studying it trying to figure out exactly what is good and isn't good for and if we did start to see some of the big banks enter into this marketplace way areas you think they would emerge and for us. and for more investing and big point there and maybe a company or i would i would. i would think that they might use it for international settlement initially because it's a it's a much easier system to settle between banks they could piggyback on the top of it they don't have to necessarily actually send coins but you're talking about changing a system that's been around for one hundred years you know it's the wires or you

know based off telegraph you know this is this is nothing banks or you know the tories fully slow to change so. i think the first thing you're going to see is some some venture arm of the bank is going to is kind of you know put their feet in water and with with a big company and you know get involved with it invest in it first they're going to you know offer you know secured secured banks like our i'm sorry solid account relationships with cornstarch i think that's how they're going to get they're going to it's two different for a bank to adopt it they're going to have to just get involved with start ups and i'm talking about this mines here and that's one of the big banks they're. operating off and things like we really have a global spirit man across the world where do you see this going and you think plays a part in it and. i think. with with what's with this from happening in countries like cyprus it brings a lot of attention to decline i don't think there's a lot of people that are fleeing you know greece and cyprus to buy big coins but

what it did is it really brought it to the forefront and it really showed people that there is an alternative that they can't just tax you on a just remove your funds so i've had a lot of people that aren't from greece or from cyprus but they look at it and they say that really scared me you know now i want to i want to look more closely. and that was my interview with gerry cannot the founder and c.e.o. of trade how. and it's time for the daily deal this is perry and tell me why you see bon jovi in my notes explain this ok well one of the recession hit countries in europe us rock

band bon jovi is essentially going to play a free concert in madrid spain so spaniards can afford to go there because we can organize originally had left spain off the tour list because they fear they would not be able to fill all the seats with the hiring of unemployment so bon jovi just said he would sell the tickets at cost to the spanish fans but i don't know if this is fair to the other countries in europe have to pay full price for their tickets while spain is getting out what do you think i guess it depends on how much you like jon bon jovi i mean what do what is he going to do if you go to cyprus maybe you can just charge them but i think it speaks to a larger problem in europe which is kind of structural the way the currency system is set up in the fiscal system is set up i mean what do you think well i think this brings up you know other issues in europe where the more conservative countries such as germany are having to live within their means while all the pigs are benefiting from the inflationary measures so we're talking about portugal ireland

italy greece spain etc but these countries are part of the you are part of a unified monetary system but they don't have a fiscal core in other words all the things that the governments do to pass regulations that governments have their own bonded showing systems they're not coordinated so they have this problem that is developed over time where the pigs the so-called pigs i like to call them the club med states they can borrow at german rates they can borrow at very low rates and then they can spend that money so there is a structural problem here but is the solution really trying to create a politically unified europe i mean what they could do is just go back to their own currencies and that's really the issue that we're talking about that. another issue in portugal where some economists are starting to gain traction in calling for their own currency and then the book why we should leave the euro made the best sellers less important all but leaving the euro was a very taboo issue in portugal this book has helped spark a public debate. it's been debated in greece and the thing is if one state

pulls out of the euro there's going to be a floodgate the powers that be cannot afford to have the floodgate opened so there's going to be a tremendous amount of pushback i don't care how many books you sell in portugal you're just not going to be able to gain traction and trolled there is a true implosion in the financial new financial crisis and we haven't seen that yet and there was a poll taken in portugal is that only twenty percent of the people support pulling out of the year because they're still benefiting benefiting from it in certain ways there's a lot of inertia there's a lot of traction. things have to get worse before they get better very well thanks for joining me bob if you want to follow us you can follow us on facebook at facebook dot com ryan interest and also on twitter at perry an artsy and. english. thanks so much.

and have been unfair day on prime interest we discussed the tragedy of m.f. global after john corazon demolished the firm and while so you have to use the officials turned a blind eye when we dug into the legacy bank regulations which are a century old that are stemming the tide of an invasion and it might not be fair that spaniards get to hear the new jersey rocker on the cheap will everyone else plays by. price there is nothing kosher about general petraeus is cashing in after a scandalous communication but hey if you look up player in the dictionary you won't see any reference to life so get over it they were watching come back tomorrow and parry and boring it's prime interest a great thing. to

live on one hundred thirty three bucks a month for food. if you know how fabulous. i mean. i know that i'm sitting seems really nice. and we're all very so personally apologized to the. worst for going. flat out sick of a. radio guy in fort lauderdale minutes from a quick profit i want to watch closely a politician because you've never seen anything like this i'm told. that's. what is going on guys i'm out in march and this is breaking the set mysterious.