everybody this is the kaiser report. so excited placing you have been talking about private equity in the hollowing out of the wealth of nations around the world through this model whereby all these assets and wealth creation machines developed through hundreds of years sometimes are just hollowed out and all the equity taken and a pile of debt is left with nations and you know over the past few decades we've seen especially since the financial crisis since two thousand and eight we've seen

austerity imposed around the world so i want to look at one quote from that whole you know berkshire hathaway kraft heinz story from the last week and it's a quote from j.p. morgan about what happened to them and the heaven was from kraft heinz shares fall twenty eight percent after write down and dividend cut j.p. morgan analyst ken goldman wrote about the company because remember three g. capital warren buffett they basically curry's massive austerity across the board with him this conglomerate this merged conglomerate and j.p. morgan analyst ken goldman says and vest for years have asked if three g.'s extreme belt tightening model ultimately would result in brand equity erosion we think the answer arguably came yesterday in the form of a fifteen billion dollar intangible asset write down for the craft and oscar meyer brands i want to think of that as a way to look at the u.k.

economy or the american economy especially in the u.k. where you've had mass austerity imposed on the people and there is like a intangible brand of member cool britannia and all that stuff is just eroded when you actually see the mass homelessness this universal credit system which is imposing horrific grotesque publicity and marketing for the nation as a as a very vile sort of abusive and human rights situation i think there are going to mount a there between the craft hinds hollowing. and destruction of their brand in the collapse of the equity and what happened in the with the austerity in the u.k. and the dismantling of things like the national health service and it did kind of attack the brand of of britain of cool britannia there was this idea that britain was a plucky upstart punching above its weight i remember in two thousand and twelve i

believe during the olympics that were held in london they were really well done and it was a great branding exercise for britain we were actually doing the show in studios that were inside the organization that the government set up to brand britain britain's branding organisation and they work around the clock pushing that and three some a was really the woman who was behind all that and pulled that off and that led her to become prime minister but by the time bragg's it rolls around all of that years and years and years of hollowing out with oliver letwin talked about the merits of privatisation indebtedness hollowing out austerity finally caught up in like heinz craft which has been now being written down and it's become a commodity in the package food industry the brands of heinz and kraft now not really getting a premium in the marketplace like they would have their brands not been decimated

in this way so too is the britain that goes out there in the world stage looking to cut deals but it doesn't have that cachet anymore the brand has been has been hurt badly by the hollowing out the privatisation the financialization the overtake of the entire country by the city of london kind of the end game of the margaret thatcher era so i agree it's a good analogy and the brand of britain is suffering and it's something that once you lose it it's very very difficult to get back you know it's almost impossible to think about the brands of the. that of run into problems once you lose it it's very difficult to get it back america has suffered the same sort of intangible brand equity sort of destruction of their of our sort of brand image not through austerity in the same way that the u.k. has done that and the u.k. does not have a currency it could just print at will like we can but we've done it through

basically. creating in an economy filled with an oligarch e of bureaucrats massive layers of bureaucracy through the health care system an education system in particular which is just saddled these new generations with enormous levels of debt so we have a crisis had has emerged here that is just as grotesque like with opioid overdose i want to look at a headline because this ultimately came from bloomberg they're one of their in a think tank parts or their research and development side where they look at data around the world and bloomberg looks around the world to see which of the healthiest economies which are the most robust economies in terms of the health of the individuals within the economy and the headline reads drugs pushed the u.s. down and global health rankings america plummets to number thirty five out of fifty as overdoses and poor diet slashed life expectancy the united states has tumbled in

the global health rankings as drugs shave years off of the life expectancy portrait index which ranks one hundred sixty nine countries and publishes an esteemed top fifty number one is spain and number two is italy by the way and again like those aren't the two wealthiest nations in europe by far but they have the number one and number two in terms of the health of the actual individual citizens partly because they still have community you know these are very robust communities there they have very little processed food and sugar all the products that warren buffett makes is billions on they don't actually consume that sort of stuff there so you know this is an interesting way to look at what's. actual roshan has cost lives in this situation and america well what donald rumsfeld once called old europe these countries are living higher qualities of life because they have values and they

have cultures that go back centuries in the us it's a culture of disposable disposable in the instant fame the insta billionaire instant coffee instant breakfast fast food and they were for a long time the purveyors of the global cultural. hollywood and so when they took a huge brand hit after losing the vietnam war through hollywood they could really insert that or have a historical revision with the likes of sylvester stallone and his movies made it out as though america won the vietnam war so that is to believe that usa usa usa is indefatigable and unbeatable and had never lost any war but that unfortunately has been hollowed out as you have pointed out the equities been collared out by lack of infrastructure spend there's no transportation system

there's no agriculture there's not see in america is plummeting if you look at the chart it shocking it look at almost every other country it's kind of inching up on one side of the chart and then as an outlier is the united states is way over here it is all crashing down from the drugs from having junk food having junk culture having a junk politics and fake news it's all fake and fake doesn't sustain life and you see it in the numbers and years longer if you're born there rather than have the misfortune of being born in america also in terms of you know being at war for the second year in a row the u.s. is also failed to usurp cuba a developing country that has been rewarded for focusing on preventing disease disease screening diet tweaks and exercise rather than treating people after diagnose. says and of course in america they you know the health care system is nearly twenty percent of g.d.p. mean there's massive massive massive inefficiencies and therefore massive profit in

the system so of course that does it would harm you u.s. g.d.p. in fact if you had a healthier population if you didn't eat so much of warren buffett's velveeta cheese if you didn't eat so much of warren buffet's macaroni and cheese if you did not eat so much of drink so much of warren buffett's coca-cola the g.d.p. of this country would decline and perhaps decline in a way like italy their economy has declined since the rise of the euro nevertheless there their health continues to rise because they're not eating this junk and they continue to have a universal health care system just like spain has a universal health care system they also have community they still have ties with their families and their neighbors and their you know local community we don't have that anymore here and life is too busy so in terms of the health care industry the american economy is

a suicide cult and or buffet is jim jones and this is the guy yana massacre and he sells the kool-aid i think he literally does. practically rightly sells a kool-aid or something similar to it with his junk food empires longer the u.s. is a relatively new comer on the world scene it's only you know less than two hundred fifty years old so you know whether it'll make it another twenty or thirty years as hard as the population is dying off at the right that it's currently dying off in the cycle or family gets paid for every people they kill with oxycontin it's hard to bet that the us is going to last another twenty and soarin rates of heart disease driven by the western diet rich in saturated fat sugar and processed me i think it's a misnomer to call it a western diet i think it's an american diet because certainly in spain and italy and france they don't eat all this velveeta cheese a. and coca-cola they don't have that sort of product in fact many including myself have stories of going into restaurants in france and try ordering a coca-cola you might actually see

a coca-cola machine that they might get paid to have there but they'll refuse to sell it to you because that's vile and disgusting to have with your meal. but you mention the sackler family and they produce all the opioids that many people are dying from and the biggest blow has been from prescription painkillers which created a nation of addicts and a market for the synthetic drug fence now which is up to one hundred times stronger than heroin and which has been laced into everything from street jugs to percocet in the last eight years more than two hundred thousand americans have died of drug overdoses driving down the life expectancy from seventy eight point eight years to seventy eight point six you saw the collapse of the soviet union and you saw the collapse of the institutions and society around the people you saw a similar decline in life expectancy you saw an increase in mortality and that was mostly caused to drinking and so that's the last time in the last hundred years outside of war that you've seen something like this is happening in america and you

wonder like it feels like the population committing suicide whether directly or through opioid addiction it feels like you know they feel abandoned and they feel helpless in some way in this and some are a way they feel like all that is around them has collapsed because how how else to explain it and why is it not being treated like a humanitarian crisis like we the people you know rachel maddow care so much about the people of venezuela but you never see her. might call richard branson to do a special tour for the people of america who are committing suicide that's right the sackler family kills over fifty thousand americans a year with their oxycontin poison so in response america is going to invade minutes well and understand that because many people did manure ok how many americans had been there ok last year. sackler family fifty thousand yeah let's go. yeah that's a good idea well we got to take a break think about that for

a little bit don't go away don't even think about going away or i'll force the sackler family to come into your home. my seven years doing drugs my nephews was still in drugs my sister just with doing drugs it was like an epidemic of drug abuse america's public enemy number one in the united states is drug abuse he started going after the users in the prison population who are we started treating sick people people who are addicted to these drugs like criminals while i was on the hill i increasingly became convinced that the war on drugs was a mistake there are countless numbers of people who are in prison for. certain sins for minor minor offenders in the drug trade it's

a lot watching your children grow up and miss you in waves and say by daddy as you're walking out of the business it's just it doesn't get easier. seems wrong. just don't call. me. yet to shape out just to educate and engagement because betrayal. when something you find themselves worlds apart we choose to look for common ground . welcome back to the kaiser report imax keyser time now to return to our conversation with richard field is the author of transparency games how bankers rake the world of finance now i want to set this up

a little bit here we have been talking mostly about deutsche bank i've maintained now for a few years that deutsche bank will be the next lehman brothers it'll be the pin that's pulled all set off a global contagion bank collapse the second leg of the two thousand and eight crisis richard has actually done a lot of work here digging into the balance sheet digging into the statements made by the bank and you know we're going to look at this derivatives burke book richard welcome back thank you very much so continuing on our deutsche bank same first of all is it fair to say there's really two banks in the world with the derivatives book in the multi-trillions one is deutsche bank one is j.p. morgan this global derivatives market that warren buffett called weapons of mass financial destruction it's going to blow up again it's almost a guaranteed certainty is it legit say the odds are that it would be a bank or j.p. morgan though that's where it's going to blow up your thoughts i mean i i agree

with you i'm going to back i want to seem to do it your banker already. and now we or review consultancy. not just every farmer right you have you have a plastic bag there with you what is the point of that i want to explain. usuals. i've created koreans here i'm secure. if you look at the security you can easily value you know everything about the scoreboard you're here you know what's in the bag and you can do with it you know the kind outa now compare that can do much of it. which i prefer to do your job you are secure. is this opaque bag we have no idea what the contents of this bag are. for there is no way to value you instead when you come to a very generic you value with based on

a story that someone else in this case there are a number of someones telling you a story about going to drink or the first group of people who are coming he was story are easy be the banks regulators every year they want a stress test every year they claim the stress tests show that the bank was anthem actual armageddon. is there really truly. no way to. arm the stress test result i y m's test errors are the hook for bailing out going to a bank if it goes out. of it going to a bank was actually like this type of a security you'll be able to see the individual positions you can see in due to rebid of blogs are the derivatives now some would say my god has a lot of data absolutely assess all that behavior that i'm going to have the schools bought and the answer is yes goldman sachs of the world can assess that

j.p. morgans of the world the way our system of mantle systems designed we you and i max don't have to assess the bank ourself we can go to a trust to urquhart an expert one j.p. morgan or goldman and let them do the us asked money and then we can invest based on what their assessment. people do this all the time we use mutual funds now an example we're going to teach it should be able to snap provide transparency invest the title of my book transparency games of bankers rigor world of finance from a conversation with the banks here except what he said is now actually we like opaque products make more money in it then when i visit of course we're besley going to have to provide transparency when that happens we're going to make less money

and have to work harder to make as much money as we were cream usually make. it's an interesting to world we're going to be. risks speaking more broadly what we have is an example of racketeering so when you talk about the fact that deutsche bank is not disclosing their risks and they're using tricks like mark mark to model versus mark to market in other words in a mark to market scenario they would calculate the in a marks a model scenario they have a theory a formula a model that they posit is worth x. y. and z. under certain conditions and the regulators allow them to use that as the value of these securities even though we have discovered over the years that these models are always flawed that they're generally not worth even five cents on the dollar and it's just

a fancy way of committing fraud but to make my point here about racketeering if your bank exists in a world where the regulators are in on the racket the money managers to buy these bonds and buy the stock or sell the stock like a warren buffett for example as an on the racket they mutual funds are in on this racket. they press the wall street journal and other financial presses in on the racket this is a racketeering scam this is to be charged under rico by anti rico and take it out as organized crime because this is organized crime richard your thoughts and i'm not a parson go so far so say to organize. one to get past the bankers ok i start with the bankers yes those guys do not want any somewhat commission showed that in the one nine hundred thirty s. the conclusion of the commission was that it's wall street's greatest two thousand

and eight cannot be good for the purpose. keeping the banking system from in her room by the way i designed it were supposed to be keeping the system from imploding. that was supposed to be the responsibility of the investors who got to see what was going on with transparency. it was the investors again who has guts to do something but they couldn't because the whole case of the regulators in panic stepped up and tried to replace investors the hubris of. announcing that the banks can withstand finance arm again because they told us this and then walk around which is what bernanke he said i mean there's a whole speech on this and then go tell everybody the media by the way stocks didn't want to go out into what's going on in these banks again it's

a black box to them banks they also don't want to say happen is a back out to government in the regulators jump an awkward a couple months ago as stunning final count. of the actual times where he admitted that he was standing in the middle of a bank run. because he had works for years he didn't have. he was sitting there thinking should i report this or should i not report it not did not because he would go if he reported it would trigger a greater financial crisis or no i get it i get it that the the financial press are weak and they are compromised and they're venal and they should all be fired i understand that. and in frasier over in the u.k. has done a good job he wrote the book shredded about royal bank of scotland and all these

transgressions we're talking about with deutsche bank multiply that times ten for oil bank of scotland they actually isolated u.k. companies and set them up to be shot down and ripped apart and sold for parts on a flea market their own customers and they wonder why they thought of me is so bad when they were the biggest foreign banks in the u.k. is actively seeking the destruction of their other of their customers but less so we got a couple minutes left i want to talk about deutsche bank in order to bail out this opaque derivatives wilting bankrupt insolvent behave if that's being kept afloat by the german government and with the racketeering influence of all participants they want to do a shotgun wedding with commerzbank to try to bail them out that way what are we going to see there richard nothing good commerzbank doesn't have a very good business model itself at best they're hoping to be able to strip bit of

expenses from commerzbank in terms of management team and be able to use that expense to help recapitalize. and scrap this what we kept ration is we're not going to bank makes makes a. have that power earnings goes to the bankers a sponsor's so the bill is slow process by which you could possibly wreak havoc was one of these institutions by way by design all the losses are going to be could be recognized today without disrupting the financial system don't you think we can show a massive black hole where it used to have equity that would also be ok because people who are dealing with going to a bank i don't want to deposit insurance to get repaid or they would expect the german government to extend. the us insurance to the wholesale work

so literally all the losses could be realized unfortunately that are the game that claim for the last decade. with the regulators is they're trying to. right to be clear the banks liabilities are greater than the g.d.p. of germany so they are they are much greater than the g.d.p. of germany they live bill and he's of deutsche bank if they were made all by germany germany would cease to exist as a country so what they have to do they have to they have to hope that there is a consortium of central banks around the world like was the case of long term capital management long term capital management got the central bank of central banks around the world to bail out american banks so that yacht owning scathed in greenwich connecticut would miss a payment on their boat you know that's unfortunately we live in this type of world where if you have influence on wall street you are above the law as eric holder had

said and you get to participate in racketeering schemes with impunity as we pointed out on the show and many show shows before it right you know we seem to hold these bankers up us having the divine right of gods and we can't upset them because they might not favor us with their trinkets every now and then anyway richard fascinating stuff we got to go thanks for being on the kaiser report thanks for having our audience that's going to do it for this edition of the kaiser report with me max kaiser and stacy herbert like to thank our guest richard field is the author of transparency games how bankers rigged the world of finance if you want to catch us on twitter it's kaiser reith court until next time we go.

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