good afternoon and welcome to prime interest i'm harry i'm boring and i'm bob english it's your headline. it's official as they see capital is toast that would be cohen's hedge fund which posted annual profits of over twenty percent and once had fifteen billion dollars under management a grand jury indicted the firm alleging securities and wire fraud and the hedge fund it may have to discard hundreds of millions even billions in profit then mr cohen is not going to die did in fact the indictment doesn't even contain his name you simply refer to as the as a c. owner so go on or it looks like you pulled records are in for no but he made three civil suits from the investors that may not get their money back by the way the soon to be defunct hedge fund accounts by some estimates to be ten percent of daily stock market value at the new york stock exchange don't worry though high frequency

traders have promised to pick up the very end breakstone insider trading later in the show an old tool on the very same topic but it won't be boring and with all the talk of tapering quantitative easing someone has decided to quantify just how much money printing had to do is corporate profits according to the director of market strategy and the brokerage firm in new edge that's about forty seven percent of the earnings of the top five hundred companies since two thousand he said q.e. is like an athlete on that steroids they have lance armstrong and get his tour de france titles and for doping maybe we could apply the same strategies to his chairmanship finally the super rich are heading for the exit in switzerland after getting burned by swiss bankers who sold them out for authorities for tax evasion hundreds of billions of francs police which were not only are they withdrawing cash but they're doing safe deposit box. most important in the story though is what

they're doing with their tash according to the spiegel story they're investing in fine art fine wine and classic cars so gold isn't the only safe haven always follow the capital and right now it's an exit from cash we'll talk about the eurozone debt crisis with author and professor younis photos like this in just a minute. and here's one thing you are running into us. i. euro zone sovereign debt reached an all time high in the first quarter of this year this is despite major government spending outbacks now today the i.m.f.

said that the further central bank interest rate cuts might be necessary so what needs to be done to spark growth in europe earlier i spoke with jani but vikas a professor of university of athens and author of the global minatory now i first asked him about the most recent version of his article a modest proposal for resolving the eurozone crisis is what he said. it's like you know these of these state of advanced disintegration that it finds itself in is because we have four cracks that i'm intimately connected to one another where the banking crisis as a result of the fact that we have a common that it's a. completely separate banking systems imagine living in the united states in two thousand and eight is the state of nevada that sound which their banks about. and the banks on and that along with it and that would have caused a dominant factor destroying the whole of the dollars of the united states of america so we have to do that. the second crisis we have is a crisis problem that we have

a common currency but we have what i call the but in support of perfectly separable debts so every ural debt to the euro zone belongs to a single company unlike the united states where you have a common currency and you have common in the form of the federal governments that in you have those no that whatsoever which is which sounds like you know from and what at least the point of huge sums by each his or her debts but when you have a situation where you've got different states that belong to the eurozone and they don't have a federal. government or for that matter but if it goes up a central bank to back them up at some point when they can't for some reason and of course that is was that will hurt them in a major crisis when it comes to finance their debt their completed it isn't the only thing they can do just go bankrupt default but that would set off a chain reaction of the poles that would bring down of thing so we need

a common only good for the models because it suggests a very simple way of the central bank of europe the e.c.b. two could. do act as a go between member states and financial markets. getting loans on the behalf of merit but it's there and having them service them. so early we have an investment because i see what always happens happen it's happens everywhere when you have a financial sector implosion like the one in two thousand and eight then gives rise to early commonly crisis when the crisis goes from wall soup of main street the first casualty of course is investment best and dries up and when you've got these banking graces and a segment of dead. europe there are places like greece portugal ireland that need the most investment not to be be would. able to produce incomes that will help them pay their debts and look after their banks into the other ones

that get the least so what we need in europe is something like the new deal. we need an investment led to the cavity problem and our suggestion the models proposal is that the european investment banking in the bag you don't wonderful institution . of the world bank and all that we need to do is simply go allow it to the job i'd bring about the government you don't we're not doing for political use and it was actually not of much to be sure. let me read a quote to you that you said the eurozone feature is a central bank with no government and no national governments with no support of central bank arrayed against a global network of mega banks that they cannot possibly supervise are you advocating a fiscal union here and is that even feasible in the current environment when there is so much hostility among some of these member states especially between germany and the periphery. in short not ok it would be great and that the school union

but this is not part of the modest proposal and what makes it more this is that we're not arguing that you've just been union over what we're saying is that we can deal with these problems without moving in a fair bit of that action so that you know you'll be inside the bag if you recall the point i made earlier you. would not be financing numbers things you wouldn't have germany financing or buying the debt but of course what you would have is the european central bank. utilizing. good name international markets to borrow effectively on behalf of member states states but then have them at it pay those loans it's a bit like you know parents good parents. securing a mortgage and we have a youngster who was very low and therefore the interest rate to pay for their mortgages. and then have the youngsters. that he paid the loans it's the only way we can salvage that use and without that this community well at the end of the day

are we just increasing debt are we shifting the burden of debt of borrowing from one entity to another maybe you can explain for our viewers how this is your modest proposal is a little bit different than what's going on currently in the in the eurozone. what we're doing now to increasing debt massively because in its wisdom the european union has decided to be consultants insolvencies of banks and insolvencies of states by lending money to the insolvent states and you know there is a suicide on policy. because the condition for lending that money. comes from which the old and the new debts will have to be debate so. adding debt on debts in an unsustainable fashion is precisely what's happening today and what we're suggesting in a modest proposal is that we do the opposite that we'd find

a smarter way of reducing the top of that burden of the eurozone over the next twenty years by having the you know bank. play this role that's mediated between member states. and money markets for the purposes of actually shrinking the amount of interest that would be able by the member states of the unit and also if you take into account the other policies that work with you or with the investment led government program all that the purpose of that is to shift i don't savings and we have massive i've been saving saving there's a lot of that amounts of money in your. too scared to be invested in the back of people by having to your opinion vest and banks that mountain of i've been saving see the best ones you journey in which the debt will be used i would add that a lot of those savings are actually at the federal reserve we learned these foreign

ranchers these banks in europe have over a trillion dollars just laying fellow at the federal reserve but i want to get to some of these alphabet soup names are a lot of people in the u.s. are going to be familiar with some of these programs we have that you see a b. b. . how do these fit into your particular program in which is the most important. not only important. these are the institutions will have and will have to use them we have to degrade them rationally the problem so far is that we have used the institution that we have. rather simply matter. and we've created units to. which we've founded on sound and therefore they're incapable of being strong enough to believe that we're giving them so they hope by the by the modest proposal is howard to be lloyd that means that you should that we have in a manner that allows them to get a job and that is to defeat those three four crises that we face and. it's either

complicated in europe we have a central bank like the federal reserve. we have. big european investment bank which can be thought of as if you want. potentially a new deal agency or effecting public investments it's been doing it for twenty five thirty years very successfully you know you talk about the infrastructure of the new deal like the tennessee valley authority i mean are you talking about this is what europe needs to be doing in order to invest in itself. so that if you look at the map of europe for instance you find the eastern part. which is part of the unit green. has infrastructure but they still the nineteen fifties and sixties. no fast lane connecting let's say greece austrian german and if such

a train were to be built there are lots of us train guess who would benefit the most to be greece and. it will be germany because it's interesting because doing it and that kind of investment be mutually advantageous for the whole of europe all we need to do is simply allow the you're going investment bank to go ahead and make that investment you have been investing in the bank can make the best and wants to make the best me but we still have you know we have a silly rule in europe where every investment has to be called financed by the national government we only have about thirty seconds left but who's era do you have with this modest proposal are you making any tread treadway whatsoever right now. is a very interesting story on the white hat behind the closed doors through security no interest you know moms who post but when the cameras are on and the microcosm switched on in

a press conference. it's dead silence because. that was my interview with you on his way to fight this professor at the university of athens and author of the global minatory now you can read his modest proposal on his website but if i could you coming up area on breaks down insider trading and not just the hedge fund kind there's more to it than you might think some even argue it should not be a crime at all after all those in congress seem to get away with it legally and with impunity then i do all sam sets about the very same subject as well as a real dual of the year big beer versus the big banks so let em if you got them and stay to. peace process what peace process the palestinians have suffered over four decades of illegal israeli occupation and over twenty years of the so-called american

sponsor to go she would have gotten them precious little why are obama netanyahu and abbas interested in history does it have anything to do with peace for are there other agendas in play nobody chooses to be homeless nobody chooses to me and now sorrow. isidro for the show to. get in the six pm get out six p. six. they were in. school they. had to me the class people and. they still were against who're. it's tough to think of. and to know that many may not have believed in the wrong. should never be but there are also do different

clues just never should and. that judge is essential. to the streets. that women kidnapped and converted to islam. will be another girl says for the coakley christians of egypt to the constant. shifting to. the way of the cross. as a seed capital advisors has been one of the most successful hedge funds on wall street accounting for anywhere between five and ten percent of the trading volume on the

new york stock exchange and exchange for consistently high returns as they see charges their customers some of the highest fees in the industry however the firm has been under intense scrutiny over insider trading allegations and april as they say capital settled with the security and exchange commission and paid a six hundred million dollars civil penalty but apparently that was not enough to satisfy the department of justice because today a federal prosecutors filed criminal charges against the firm alleging they were involved in a decade long insider trading scheme gaming hundreds of millions of dollars of trust does on its profits these charges could put billions of dollars at risk to be forfeit to the government the feds also want to band in and the vidual residing inside greenwich connecticut the s a c owner for managing client money for the rest of his life. and the visual they are alluding to is stephen cohen insider trading

is a very serious crime with civil and criminal penalties as thomas the choreo quoted in the wall street journal the message that's coming allowed in clear from the government is they're not going to tolerate insider trading on wall street to better understand what exactly as they see capital advisors did wrong let's break down the serious crime by definition insider trading is the buying or selling of security by someone who has access to material nonpublic information about the security essentially it's buying or selling stocks of a public company based on information that the public does not have access to the rules defining who is considered an insider are complex they could stretch as far as any person related to the company including brokers employees and family members but in general and a vigil insider would be any individual who. knowingly and then trades on that knowledge now the justification for in insider trading being illegal is because if

you have inside information it would be fair it's other investors who don't have access to that so also believe it raises the cost of capital and decreases overall economic growth as they see capital advisors is alleged to have hired numerous portfolio managers and research analysts who are engaged in a pattern of obtaining and tighter inside information from dozens of publicly traded companies and at times the recommended trades to the f.c.c. own are based on inside information specifically what as they see did it was they hired individuals who had close ties to the industries they were involved in these close ties could include someone who worked in the industry beforehand or simply someone who has colleagues and friends that work in the industry they traded in other words employees were being paid for the relationships they have made throughout their careers but some argue with this should not be a crime because there are no victims involved here and making economic sense murray rothbart wrote

a major difference between the crime of insider trading and other crimes is that insider trading is a crime with no victims very simply it's using superior knowledge to make profits this is after all is what entrepreneurship and the free enterprise system is all about he claims there are no victims here because both parties the seller and the buyer profit even went to third party is involved you want to trade based on luck capital resources are better to be in the hands of the knowledgeable than the lucky he goes on to make the case that in all other sectors ignorant businessmen would go out of business but only in the financial markets do we want the ignorant to have access to limited resources by a good luck limited capital resources should be rewarded to the most efficient and who understands the market's best no one cried criminal when the top securities regulator cashed in of the to. security is a lobbying firm but when wall street hires someone for their connections and relationships we call their private illegitimates their revolving door is present

in all sectors the government included but it seems as though latter gave the attention and punishment and that's the breakdown of insider trading now it's gets you to dave a legal. joining me is political commentator sam sachs lowered a comfortable there i'm feeling comfortable in here a few times to sort of your jacket off my hands loosen tied to her story big banks meet big beer large beer companies including miller coors are putting pressure on the federal reserve to crack down on wall street miller coors a major aluminum buyer asked the fed to toughen oversight of banks like goldman sachs and j.p. morgan both banks are accused of manipulating

a lot of prices by controlling large metal warehouse is part of the london metal exchange network your thoughts so basically we have banks running a racket that's screwing over companies like these big companies that other companies that use aluminum the bigger picture here is this wall street the wall street economy the fire economy finance insurance real estate used to be about ten percent of our economy now it's about twenty five to thirty percent of our economy is starting to dominate our economy and it's doing that because it's preying on all the other industries in our economy through these rockets through price manipulation through all this stuff do we want an economy that functions based on manipulated fake money or do we want to have condom either functions on actually building stuff and actually selling and buying stuff now if you will kind of on your side here but i'm just going to play devil's advocate it only adds a tenth of a penny. to each aluminum beer can so it's not really coming through the case rumors anyway due to like three billion dollars that attend the penny adds up it's

like the office space where they're just doing fractions of presidents superman whatever it is a lot of productions that stuff adds up for superman ok it is because wall street has been deregulated for decades now which is giving it the tools to be able to engage in this sort of manipulation in this predation on other sectors of the ok i'm going to add to your argument here goldman sachs and i was talking about this on news the other day goldman sachs has been in the commodities industry for decades they became a bank holding company in two thousand and eight that gave them access to fed money so yes they were already big and commodities and now they're even bigger because they have and we don't have these walls that separate them from the gambling side from the depositors side j.p. morgan got into this in a big way they were involved in crude oil when the crude went from one hundred forty five dollars down to thirty dollars they just bought cargo ships or rented and put them out to sea and waited for the price to rise and so there is a an entire vertical industry now in the commodities market that's based on free money from the fed so that is i agree the free money from the fed is making it

worse for the banks and just a fact that the banks are even allowed to compete in these commodities markets is a big problem all right so we're in a little bit of agreement here and maybe allowed sort of we're just going to move on to the next subject as we talked about earlier stephen cohen and sac capital are back in the lot of light the hedge fund was charged with wire fraud and securities fraud according to the new york times the charges were filed under the theory of corporate criminal liability now this allows the government to attribute employee criminal acts to a company itself and that makes sense because corporations are people right. mitt romney that's just there i guess this is part of a sweep that they did that is doing here are going on inside the f.c.c. doing that whole government not cracking down on on insider trading and that's so convenient let's go after the banker criminals who are basically committing acts against others. i think it's the objects who are trying to get the upper hand on other bankers but let's not go after the bankers who are trying to get the upper

hand on consumers and on main street right typical here's the problem is it's very easy to detect insider trading it's kind of hard to go after for the d.o.j. to go after and prove fraud in intent but the securities and exchange commission has had these algorithms in place in a modern monitoring system to monitor suspicious activity before very very civilians and so it is it's all about headline grabbing and say we're doing something but they're not going after the right to go after the people who are kicking millions of americans out of their homes on the legal documents the robo signing let's not talk about the little rubber centers i'm talking about the main see likely to be authorized that stuff going up let's go after those people and then we can also go after the ins and there's also the other problem of the revolving door i think one of the reasons that we're not going to as you see is not going after these big banks is i mean the current head of the f.c.c. is mary jo white she came from a white shoe law firm and was representing these guys and she revolved through those doors three separate times so the people at the chart at the head of these

agencies are very conflicted they don't want to go after they're for going to their agencies or from these industries and a whole other component are these intelligence firms that are between congress and these financial markets so they're feeding whatever laws might be coming down the pike in congress giving that information to the banks so that they can profit off and ahead of time there is movement in congress to do something about that and then you know what have they got thrown out there cantor thank you all right and spencer baucus the chair of the house banking committee finance committee ok we're going to move on to a final subject we've got about ninety seconds senator warren's proposal mccain's proposal to reinstate a form of glass steagall has attracted a lot of attention critics say that separation of commercial banking from investment banking wouldn't prevent another crisis will it i'm just going to repeat what elizabeth warren said only that this is because she's starving because i don't . there's any counter-argument to this fact that from the bee founding of this country every ten fifteen years we had a major bank you panic and then after glass steagall in one nine hundred thirty two

after the whole everything fell apart we went sixty seventy years without another major bank you panic a coincidence well i think it gets down to a moral hazard when you have the federal reserve with a wink and a nod always willing to bill somebody out and giving away free money that's the source of the problem now i do think that in the current system that we have we should have a wall but the thing is the reason the dollar as it's propose is not really going to give us any better solution because it's just going to shift one side to another it's not going to put a real wall like that was in place before there's too much money at stake here no absolutely i mean when we're talking glass steagall maybe we should be talking about the older one that was put in place that was much stronger it's hard to get something like that in place nowadays for all the reasons we've just talked about over the last few minutes a revolving door of money in politics and sam we got to read here so if you want to weigh on today's show be sure to like us on facebook at facebook dot com slash prime interest you can follow sam here at sam said and you can follow me english.

thank you so much for your vote on that they will. and it was an evasive day here at prime interest it seemed as though with the essays the owner is in the clear for now even though mr cohen's firm was handed down and went and burning he continues to walk towards the back door of his humble office on constitution avenue even as his favorite toy the s. and p. five hundred has been exposed as a manipulated friday and that wretch moved towards the exit door. cash they're collecting because those forces and vented you know breezy oh and then yawn as

explained his proposal modest as it may be to help your of exit its financial crisis then we explained in just how insider trading works and you may or may not be guilty of any wrongdoing at all about no we're going to sign off thanks for watching come back tomorrow from everyone at prime interest i'm sorry i'm boring everybody can. download the official publication yourself choose your language stream quality and enjoy your favorite. if you're away from your celebration of the full it just doesn't do so now with your mobile device so you can watch on t.v.

anytime anywhere. they all told you my language as well but i will only react to situations i have read the reports i'm likely to put in the know i will leave them to the state department to comment on your latter point of the month to say please or carry out a car is on the docket no going to. do no more weasel words. when you made a direct question be prepared for a change when you're done you should be ready for a. printout of speech and down the freedom to cross. i've seen the per session of the cross many times it doesn't matter if there's snow a heat wave or hail stones from people keep on going but i didn't expect anything

just one i told myself i keep on going as long as my heart told me to watch that's all i want to at the moment. i can't send so mind she's singing i'm carrying these sayings on my shoulder. do you want me to put a bandage here no that's fine a lot of people were so exhausted they could barely walk their feet hurt and some of them fainted we will bring you back to it three two wanted to keep going i don't know what tomorrow will bring. more news today violence is once again flared up. these are the images the world has been seeing from the streets of canada. trying to corporations rule the day.

military helicopter as seen above the square in cairo heavy all moves into the sixty. to break out between supporters and opponents of the ousted president mostly now and investigations on the. protecting people's freedoms or a time team to sway voters germany's motives are questioned as a demand stuff of privacy regulations worldwide that's after being called a red handed helping washington gather private. and u.s. lawmakers threaten sanctions to any state of the child to n.s.a. leaker edward snowden as president. of the media one potential safe haven told us see that i've learnt this dispute over the whistleblower.