inflation there is no inflation all the peter schiff sort of people said there was going to be massive inflation because of all this money printing and quantitative easing and negative interest rates there's no inflation however because of the debt bubble and the black hole of debt there and that there would be bigger deflation and yet here we've seen as janet yellen recently suggested that the fed should create future booms right that the fed to deal with any crash they should promise market participants which eighty four percent of stocks in the u.s. are held by the top ten percent but that they should promise market participants a boom and is this the sort of melt up are we seeing an irrational exuberance again are we see is this what the fed wanted is this an engineered you know you do have amazon you do have apple worth a trillion dollars there are several other heading towards that as well. you know this looks like a melt up you see in the chart that that chart looks like a melt up right well in a flash it was just at the dollar was going down in value but the dollar's been moving up gold moving down so you know from the classical economics perspective we

don't see inflation when we see this financial engineering and we see only money being printed and given to people who support the politicians who print the money i mean that's that's either inflationary do flooded area that's that's corruption at least this company did does have twenty million dollars in revenue so i mean there was their shares up ninety percent ninety four percent in one day and then it crashed all the way down below so it was negative for the day and then after market it went up another ten fifteen twenty percent so it was pretty crazy but at least they had revenue back in the dot com days when you had this this was the likes of every single company that went public during those i.p.o. days of the dot com boom negative earnings they didn't have any revenue so it least they have revenue so this was completely normal market action i think what caught people's attention the. numbers you know the size of these ten billion dollar

twenty billion dollar moves but again relative to the market as a whole this is the new normal because they multi-trillion dollar corporation so you have to adjust your thinking accordingly you also have to adjust your thinking accordingly in this new era of. you know many free services online this is the new dot com era back in your day there was a different sort of dot com era and there was an irrational exuberance but now you know you facebook is a free service google lets you search for free they provide you all this content for free robin hood which is one of the most successful trading apps it's just an app and millennial so i've downloaded it there's something like four million active users mostly because they offer they allow you to buy and sell shares for no fee no fee at all and you're trading i don't know what it was when you were a stockbroker back in the eighty's but i'm sure it took a lot of money across investors a lot of money to execute

a trade well on robin hood it's nothing well right before deregulation in the eighty's it was forty cents a share standard trading on wall street well here it's free it's free allegedly but in fact robin hood investing app secretly makes millions selling millennial user data to high frequency trading firms so it's not just selling your data like facebook and google do it's actually selling it to high frequency traders which explain to the audience what high frequency traders might do with this information whether front running trades and other words if you can trade for one one millionth of a second and you have information fed to you by in this case robin hood about trades coming down the pike and several seconds in the future you can put a trade on before then front run the trade and steal money essentially to drain money out of the out of the system so high frequency trading is a way to as we've said before. it's like siphoning gas out of your gas tank if your

neighbor shows up and sticks a tube in your gas tank and siphons gas use call that stealing if a high frequency trader shows up with a server next to the stock exchange and steals money they call it market making anyone else or just say hey they're stealing but here robin hood is selling data to high frequency traders to allow them to steal from their clients but they say well the service is free you know where this free come from it came from when the dot coms were first being rolled out in the one nine hundred ninety s. the cost of building these companies was so low and the cost of the raw materials that being electrons were free so they could say you know it with this get a million users first and then go raise money used to be the completely opposite you need to raise money and then go bill to find users but that that got reverse in the ninety's what happened in the two thousands with the introduction of big data so big data the ability to take that free information that was being given to these platforms and monetize that that's very pernicious that's the introduction of other

elements into this economy that many are arguing are highly undesirable well a few things stealing from millennial to give to the rich that's how they describe what robin hood app does when they sell their their data now that robin hood was by the way the founders come from high frequency trading so obviously they're going to be looking at how to that's their background they know that they could sell this data that's where they were going that's was their plan it wasn't generosity it wasn't my head hey we love you millennial kid involved in the markets it wasn't like a lot of millennial think that they think that it's all social justice warriors that run all these free company here's the latency problem in other words even with high frequency trading on wall street there's still a multi one millionth of a second latency but if your customers are giving you the data in real time there's no latency problem at all you're just rights. ceiling and your cost of stealing is

reduced so according to the article robin-hood except payment for order flow but on the back of the envelope calculation they appear to be selling their customers orders for over ten times as much as other brokers who engage in the practice as a conflict of interest and is bad for you as a customer a lot of other brokerages wouldn't do this and more sophisticated investors. would rather you charge them and not sell their their order flow too high for traders the exchanges like the new york stock exchange are selling the data frequency traders not the brokerages so they're to exchanges were involved in this massive corruption but what robin hood is saying is that we can make it even more efficient by becoming a brokerage and buying gaging in this corrupt activity and by curing elaine see a problem and by stealing from our customers because as they say if the service is free you are the product exactly it's interesting that the data from

these as worth ten times as much as what other brokerages are able to sell to high frequency traders so perhaps it's because. their. execution of trades is free so there's more volume and more front running ability to scalp all of these you know millennial trading on the life the till re because a lot of these millenniums most investors will invest in things they know if they know apple and they don't own a samsung phone now they'll tend to buy apple shares rather than samsung my guess is the premium is tied to speed because of the high frequency trading game it's all about speed look at goldman's could figure out a way to go backwards in time and still money from trades in the history they would do it but the second best option is to just increase the speed in the here and now to steal at a much rapid pace yeah i mean they could put some latency on the robin hood app in

terms of executing the trade you don't know and they we know from experience we know from the experience of all the facebook information that came out that all your data is being sold to these various groups around the world in order to manipulate you well the fact is nobody really dropped it in fact there was a moment for a while and facebook you know users but it's kind of dropped off now but nevertheless they know that these people won't give up the free execution of trades even though they're they know now that they're being scalped but most people won't still take the free trade this is the new social contract yeah you know john locke would have argued you know a couple hundred years ago that the social contract is if the government betrays you it's up to you to revolt i think that was the social contract between the governed and the governing bodies the new social contract is the wall of the government constantly pick our pocket twenty four seven donations don't throw us in

jail yeah that's the social contract don't throw me in jail and i'll let you pick my pocket all day long that's a new contract in terms of this particular story seemed more like your concept of casino gulag as long as they get just like when you go into it to see. you know in vegas the house always wins but you come out feeling like you won because you got a free drink at the poker table so people feel like well it was a great time these people probably feel like the same thing but i want to quickly do in the last few minutes here i want to point out that mortgage rates head to six percent ten year yield to four percent yield curve fails to invert and fed keeps hiking there's an interesting thing that just happened which shows that the u.s. treasury ten year yield is ready for the next leg up and the yield curve might not invert just yet the ten year yield climbed over the three percent hurdle again and there was none of the financial media excitement about it as there was one that happened last time it just dabbled with three percent on monday climbed over three percent yesterday and closed at three point zero eight percent today and it was met

with shrugs in other words this move is now accepted here's the ten year treasury you see it keeps on surging and will for her at will street dot com is predicting it could possibly surge again and that mortgage rates could be right now they're four point eight percent based on a thirty year mortgage with twenty percent down and most people don't put twenty percent down but he says it's heading for six percent and none of the markets are pricing any of this stuff because i guess they're on robin and trading for free because the bond pocalypse trade was a widow maker for ten years true and everyone's forgotten about it and that's generally when these types of things rare their ugly head and you talk about mortgage debt there's also student debt which is bigger than the sub prime debt ever was an uptick in interest rates means student debt apocalypse and another bailout so print another sixteen trillion dollars over there in the government because it's a casino ok much more coming your way right after the break don't go away.

with gold. make this manufacture consent instead of public wealth. when the running clubs isn't protect themselves. when the final merry go round lifts only the one percent. we can all middle of the room signals. million real news. i've been saying the numbers mean something they matter to us of over one trillion dollars in debt more than ten white collar crimes happen each day. eighty five

percent of global wealth if you want to be ultra rich eight point six percent market saw thirty percent rise last year some with four hundred to five hundred three per second per second and bitcoin rose to twenty thousand dollars. china is building a two point one billion dollar a i industrial park but don't let the numbers overwhelm. the only number you need to remember is one one business show you can't afford to miss the one and only boom but. it's hard to imagine the decades after the war a nazi don't tell was still active and rich in the nineteen seventies crittle had as the chair of its board a man convicted of mass murder and slavery at ash was a german company ground until it developed some to divide a drug that was promoted as completely safe even during pregnancy and it turned out to have terrible side effects what has happened to my baby is anything ball you

know she said is just cut short many so they don't mind victims i have to this day received no compensation they never apologized for the suffering that. not only want the money i want the revenge. well. welcome back to the kaiser report imax keyser time now to. chicago. talk to michelle lock of mish talk dot com manish welcome back to be back what's with these o's max is that about maybe or chicago or both or another piece of evidence it's kind of. for example you live in chicago have you ever been to second city t.v. . i have been there actually ok fair enough have you seen

a chicago cubs game yes i have all right so you know chicago was there for cancer congo make a decent pizza. i'm well i think they do max but. you claim that pizza pot pie which is a combination of really is really key that looks like pizza you claim as a chicago in that that's real pizza now that's not that's just not possible miss. macks last move i had zero attorney does. fair enough miss us initial jobless claims of hit their lowest level since one nine hundred sixty nine the trump a condom e is booming your thoughts what's your take well you know max i've got to say i've been wrong about this for quite some time so a lot of people here been expecting

a stock market. correction somebody were calling for a crash and it could happen. i expect more like a japanese scenario where the stock market once it finally starts declining just keeps going down for years without ever having a crash but you know by by all measures about everything but ows ing is is looking you know pretty reasonable all but that's always what happens at the top bubbles one could have said that things looked reasonable in two thousand and again in two thousand and seven max so the question here is when this bus not whether or not things look good right at the moment. yeah but jobless claims are down so the trump mix of economic policies has resulted in more jobs that's pretty clear is it the tariffs is it the consumer. office here is a question for at kenya

a robust consumer economy because america is seventy percent consumer driven that's what the america is about as style like europe that's welfare driven it's america it's consumer driven seventy percent of g.d.p. is consumer so consumer confidence is up whereas during obama consumer confidence was always down how instrumental how pivotal is that with the u.s. economy because if people don't have confidence they're not going to be out there are consuming and you're not going to see great numbers but trump just inspires people to consume mesh well i don't think as sure consumer confidence can turn on a dime let's go back to two thousand and seven we had people two thousand and six actually we had people standing outside the straits lining up around the block. for the right to enter a lottery to buy a florida current oh two weeks later there were no lines and no one wanted the

condo's that's how fast consumer sentiment can change here. you know as for trump driving this with tariffs small businesses medium size businesses are complaining even large businesses are complaining trump doesn't care he's going ahead with these tariffs anyway the now what we're talking about here so far is he's put tariffs on about two hundred fifty billion dollars in goods that's not two hundred fifty billion dollars in tariffs rather that's ten percent tariffs on two hundred fifty billion dollars worth we just haven't had time yet for that to filter and it will now he's talking about upping that another two hundred sixty seven billion so over five hundred billion in tariffs and used. talking about

upping the percentage from ten to twenty five any expects to do this by christmas ok years threaten to do it by christmas and all it is expectation is actually the now we're talking about the prices of goods all goods from china going up by a certain amount what is that amount well the ones devalued about ten percent some are talking about a fifteen percent rise or twenty percent rise perhaps in the cost of goods and you know mannix that's not a good thing and there's no way anyone can claim tariffs which are a tax on consumers and which are going to under do you substantial piece of is tax cut which by the way was front loaded so that's what we're looking at here max yeah on lots of cars wages go up by twenty percent you know during the whole period when china was taking all american jobs they had

a situation where consumer costs at places like wal-mart went down and they went down faster than american wages so that the american worker didn't really feel it because they're able to buy stuff because they got more keep that and the fact that they were getting their wages cut now it's the reverse ok prices are going up but if i were to look at that with bottlenecks in employment wages got up so wages go up faster than the price of stuff then it's all goodness i mean there's inflation and that could be a problem how serious is that potentially going to be if the inflation genie is let out of the bottle and by that i would i would mean that wages actually start to enter a wage price spiral something we haven't seen and decades of as you know we've not seen that since one of the seventy's or eighty's maybe the. let's look at this realistically. the. everyone's talking about the big jump in

wages ok they jumped they're up just as one month by the way so it could be an outlier could be real it may continue or it may not but what we're actually talking about here is average wages have gone up. about i think the last report i recall was two point nine percent ok then the year over year inflation is nearly that not quite so wages average wages are going up. a little bit more than inflation right now but average wages distort . it's it's not the low end person or even the median person because i just did a report on their ass. made hand wages especially for men if you look at it this is really phenomenal are lower than they were twenty years ago incredible all of the

increase in household income taxes i found this study fascinating was all because women's wages are finally he's catching up with men now that's a good thing but you you average it all together women are going like this and men are going so actually just slightly down here over the course of twenty n. years i mean and this is what causes angry white men max but. the. when you start discussing averages a lot of it is skewed by wages that are going up really well like eight or nine to ten percent for the top people of course are the ones that spend the money but the median person and the low median person is getting killed here max these are the people that are getting hurt and you can see it in the housing say. ale's debt.

down no four months in a row today existing home sales were flat mortgage rates are rising it's going to impact the housing market i don't know word stars for the crisis start no one does either you have a day and it wasn't oh how they miss you a saying is that wait you just said wages are going up more than reflection and housing is becoming more affordable housing the bad ok. coming more affordable you can you can you can see because it's the bottom and person trying to buy the law house it is unable to existing home sales were down for months in a row hardly a sign that things are more affordable max you've got this backwards you're saying house prices well look at the house and that was climbing by two ply one nine in the second quarter on ok the stock market and the jobs numbers. the stagnation in the housing would imply that there's no houses moving of the houses

are not moving at the current levels you're going to say an adjustment in prices that sounds like a rising stock market and higher wages yes that's the did the housing number is one piece of a bigger economic pie again agree all right michelle a chance here is there for a second so janet yellen you're a number he ran the fed for a while she recently suggested that the fed should promise to deliver future booms the she said she said to deliver future booms what it what are your thoughts on this. crazy the she's got a heart occurred before the. horse here. the reason why what she's talking about what she said is the fed needs to commit to a boom if we have another major decline substantial decline and i refuse the word crash or not. but well. what. what she's failing to look at

is the cause of these crashes or recessions. are actually the boom there proceeded it so and the curious thing about this is she is asking the fed to do what it exactly has been doing asymmetric policies at the bottom keeping interest rates too low too long at and at the tail end of every decline adding fuel actually creating the next boom she's just sang let's have more of it when the bigger amplitude than we already have and we saw it first with the dot com bubble in two thousand we saw it again without using bo and we saw it again right now i believe there's an even bigger bubble now max people think to do bubbles and bonds it is is actually in corporate bonds max. the amount of junk borrowing to propel and actually that's one of the things fueling jobs max is all

of the corporate bond junk bond issuance this floating around that supports both jobs and it supports. the low employee unemployment rate it's going to bust max bubbles bust right i mean this is she's just repeating what alan greenspan kind of advantage during his reign at the fed the so-called greenspan put that market should never go down the fed's it is it's a vain and make liquidity available they have now a sponsibility unlike paul volcker who took a much different approach to the job federal reserve chairman michel block hopelessly can stay around for an aside but we got to go for now thanks for being on cars report. let me beg on mats all stare out for one more up fantastic and that's going to do it for this edition of the kaiser report with me max kaiser and stacy herbert like to thank our guests mish should look oh miss talked up if you

want to reach us on twitter it's kaiser report and next time. what politicians do something to. put themselves on the line. to get accepted or rejected. so when you want to be president i'm sure. some want to be. the two going to be close to see what the floor three of them or ten people. interested always in the waters of. the city.

when you. look at that is to present a book called the but. it's going strong states about seeing. just chill.

and that. i like the idea that i. had to get that out. and that to the money at that one the money of the two. that it. didn't get them i think that is out the will it is how much of the island i think after i'm gone a long time not a lot about how the now growing so i mean somebody pull down and get.

them out of them out so out of a mob of people. that i would have. to really see i'm not so. good that they do. things about the truth so yeah i'm after. all if you film unknowable. everything is. just.

on the sidelines of the u.n. general assembly be iran's nuclear deal creates yet more cracks between world leaders as they age use says it will continue trading with the country in direct defiance of the west sanctions. new details released by russia's defense ministry appear to contradict israel's claim that its jets had left syrian airspace at the time a russian military.