morgan is one of those banks. and i think you know that what they were doing was you know the two billion dollar loss has been reported as far is not that great. deal in terms of j.p. morgan's balance sheet but i think it's more symbolic that you have these banks losing money and they're backed by taxpayers which is a problem i don't think what they were doing is something that banks should not be doing i mean banks should be doing it the question is should banks that are have in place a taxpayer subsidy for doing it the answer to that question is probably no although it's not certain exactly what they were doing in terms of the trades i have a problem with banks are too big to fail i think we should have let banks fail i think i think if you have banks that are not too big to fail there's no need for taxpayers to stand behind them and then they can do whatever they want with their money if they will these people are smart people they know the financial markets let them do what they do. these need of light but i m

people for example lending that it posits to banks instead of going to the most conservative banks they just assume that everything's tightly regulated so it's going to be safe so we've lost that relationship between safe banking reputation and conservatism and i think that's actually at the root of the problem well richard if i go back to william it seems that that's the great debate here i mean over regulation or under regulation most people think the banks have been under regulated that's why this happened. i don't think it's a great debate anymore even alan greenspan who was the leading proponent of what my colleague just stated has said oh i got that completely wrong i thought that these markets would regulate themselves because of concern for reputation i thought there was private market discipline and by the way there's nothing regulated about libel or this is something that the british bankers association created for their own purposes and now we know gimmick for their own purposes so no back in the day in the eight hundred was not some wonderful time in banking you had is the l

we just think of our bank as a bank, really. but when they buy another bank, it's a complicated, terrifying proposition. you suddenly have two bank groups have to combine all of the systems. and they codo it very quickly. the customers don't notice it. they are expert at that. and that's a key to any bank that is try to make the large acquisitions. they were able to do it in a way that the customer wouldn't notice it. i mean, this is a bank that was very efficient at really nick they did. and when they came in to these other banks, they were fry tbal. they took away all the corporate credit cards, all the jet planes, they took away, you know, these other banker would have the outlandish bank accounts and, you know, offices decorated like the wild west with lots of companyive trappings and high-rise office building. they kale in and got rid of that. nay ?riew coach. they flying. there. at least at that point. >> we're still in the '90s. >> right. there was this kind of, again, almost like a thriller there was this foreshadowing.

we think of our bank is a bank, but when they buy another bank it's a very complicated, terrifying proposition because you simply have to banks. you have to combine all the systems, and they do it very quickly so that the customers don't notice. well, there were experts said that, and that's key to any bank that trying to make all these large acquisitions. so there were a lot to do this in a way that the customer would notice. this is a bank that was very efficient and really anything they did. and when they came in to these other banks they were very frugal. it took away all the corporate credit cards, all the jet planes , they took away, you know, these other bankers would have these outlandish bank accounts and offices decorated like the wild west with lots of expensive trappings and high-rise office buildings. they came in and cover of all of that. they flew coach everywhere. there were very frugal. >> at least at that point. >> at that point. again, we are still in the 90's. >> but there was this kind of, again, almost like a thriller, there was this for shuttling. and there was a small l

situation were you do banks that stress test on the basis that you don't mark the assets the bank holds to market you can come up with the answer that everyone solvent i mean even my children are sold into on that basis right so j.p. morgan is the leper with the least number of fingers yes i think that's right all right dave smith amount of time thanks so much for being on the kaiser report it's been a great pleasure thanks a lot going to do it for this edition of the kaiser report with me max. stacy herbert are they my guest david smith is going to send me an e-mail please do so it has a reported r t t v are you guys are saying. mission . critical three store charges free. range month free. three stooges free. old free blogs just plug in video for your media projects a free media dog hearty dog tom. cole or.

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sure the regular banking system that everybody smaller with are the investment banks and commercial banks they're regulated entities they take deposits the shadow banking system is a variety of entities hedge funds being an example money market funds being another or entities like special investment vehicles the s.o.b.'s are special purpose entities these are conduits through which money and liquidity flows it comes out of the regular banking system and then detours out it goes into this shadow system and it goes over there and does things the real key to the shadow banking system is that it operates outside of regulatory oversight and that means it has no limits on the amount of leverage that it can apply very very popular vehicles during the expansionary phase of a credit bubble because you can take money out pop it over into the shadow banking system leverage way up and make a very good return on your equity for your troubles so we've been hearing about things like a re hypothecation or of the explosive growth in derivatives a lot of that is happening because and through the shadow ban

morgan chase and company deutsche bank and barclays are among a handful of banks recently subpoenaed in a joint new york connecticut investigation of possible manipulation of the benchmark international lending rates new york attorney general eric schneiderman and connecticut attorney general george jepsen had also subpoenaed citi group and u.b.s. earlier this year live where manipulation. put that together with the steam is recognition of gold as a currency that gold and silver are currencies live or is the price of money it has direct relation to money gold and silver are money when you manipulate live or you're manipulating the entire global currency markets and people say the next five hundred trillion dollars of the securities refers to the global currency market gold and silver now unimpeachably money so therefore lie bores about manipulating gold and silver as well so if bar chilton or have to see if they see or of jeff christian around these people come out and say no silver you know we don't the total facts on it they haven't read the wall street journal or the financial tim

which actually had conspired with another bank colonial bank to steal more than a half a billion dollars of tarp funds and we were able to stop that fraud before the money went out the door and lock up a bunch of the bankers who are you know who are involved in that fraud including that c.e.o. is now serving thirty years and we also saw a lot of fraud that i think that would have been preventable which was fraudsters taking advantage of struggling homeowners through that broken bad mortgage modification program you know that we've had debt if i had i'd seen similar schemes from my prosecutorial career and i remember literally begging the treasury department to go out there with information campaigns for advertising so as to warn homeowners about this type of fraud in advance fee fraud where basically bad guys promise to get modifications for upfront fees and do nothing but unfortunately treasury really ignored my concerns and and that really took up a lot of our resources trying to shut those schemes down and try to put those people in jail i understand the if you were a bank. because of

bank bailout.hat's how it's unfolded over the last five years. how did those view the crisis and were they right in their analysis and/or begin and potential solutions? >> banking system was on the brink of collapse and as a result of experiod die show us action by governments around the world the banking system was saved. >> we need to keep global financial industry, we need the different players to play by the same rules in different countries and different financial centers. >> while we have economic recovery it's not at all yet clear how strong it will be and how sustainable it will be. >> we should stop the bank bashing and blame game because at the end everyone who is intelligent observer of this knows that not one group has caused the crisis and not one group can stop the crisis. >> personally think there's overall too much fear compared with the situation. overall i think, you know, the large banks in europe have cleaned their balance sheets, have strengthened their financial structure, add

are involved banks involved j.p. morgan the reason they do it is to protect their massive silver short position that they inherited from bear stearns as part of that corrupt deal that was done during the two thousand and eight collapse the silver vigilantes like eric sprott and others are buying physical silver in the market to destroy j.p. morgan's ability to continue this game much longer and once the price of silver overcomes or ability to manipulate it j.p. morgan crashes balance sheet is technically worth zero and that stocks going to go the way of enron fraud flow f f fraud flow is the collateral backing j.p. morgan's belge if you take away the fraud again stock goes the way of enron same thing with goldman sachs same thing with warren buffett's pet bank walk over which is that heavy into fraudulent sub prime lending again again where is warren speaking out on this oh he's there and see him b.c. you know having a five thousand dollar amberger and here's another story we've been way. ahead of wall street's kanga

banks all over the world will get sucked into this. likely u.s. banks, european banks.ong running question is whether this ends up in court and when the cost will be to the banking system. we have the issue of asymmetric risks. if we're in a position where they're have to pay out what could potentially be extraordinarily large settlements, another hit to the banking system, another need for capital raising, longer period before banks are robust enough to return to lending. >> a threat of instability across derivatives market? across lending markets keyed off libor rates if they adjust the way that rate is calculated? >> i think if we adjust going forward, which looks likely that's what's going to happen, i'm not sure we'll see any instability because of that adjustment. i think it will come around to wh to happen to contracts that existed because of legal action. i think it's retrospective but that doesn't alter the fact if the banking system takes another what could be a huge financial hit, the length of time it will take before balance sheet adjustment gets done will

to be sort of like a utility you know banks were never supposed to be these big. leveraged hedge funds essential and that's what they are right and yeah i mean we don't even have a need to call them even banks it's crazy so that's that's the key point that i really want people to go through their heads through their they're basically economic threats to the economy monstrous threats to the economy would be a better way to describe the big banks i think you know as far as political options looking at the ones that we have for president of the united states mitt romney and obama i know wall street has thrown more of its money behind mitt romney this time around last time they overwhelmingly supported obama in the previous election but i don't really care about that when i look at their policies they look at exactly the same when it comes to the big banks dodd frank don't give me that that that's a bomb going after the banks it looks like business as usual for the big banks to me it's the small guys that get crushed so is there any kind of option for the american pub

do that on the banks do it. well yes i mean apparently the banks have been doing it but i'm just saying that some of the governments are also doing it in the magnitude of losses involved when the governments really markets on a much greater basis so when the federal reserve decided to rig interest rates after the recession of two thousand and one decided to flood the market with liquidity the senator with the global crisis we're seeing today and yet all the attention is on the banks and not so much on governments and central banks and they're a much bigger problem ok what do you think of that william it seems like this is very very serious well. yeah well what serious is the apology is that are coming for this outright fraud so let's begin with that the government of course the central banks are supposed to set short term interest rates that's not rigging and that's not unlawful it is unlawful for cartels to rig raids it is unlawful for cartels to manipulate rates and that is not in fact uncommon in fact adam sm

we just think of our bank is a bank really but when they buy another bank it's a really complicated andterrifying proposition because you suddenly have to banks. you have to combine all the systems than they do it very quick he so that customers don't notice. wamu is expert of data and that was the key to any bank that is trying to make all these acquisitions. they were able to do this in a way that the customer would not notice. i mean this was a bank that was very efficient. at really anything they did. when they came in, these other banks, they were very frugal. they took away all the corporate credit cards, all but dead planes. they took away you know, these other bankers would have these outlandish bank accounts and you know office is decorated like the wild west with lots of expensive trappings and high-rise office buildings. one that came in and got rid of all of that. they were very frugal. >> at least at that point. >> at that point. again we are still in the '90s. >> right but there was this kind of again, almost like a thriller, there was this foreshadowing and it was this sm

clearly, and obviously it's not just the uk banks. you rattled off swiss banks and dutch banks. this started with abn amro in 200 was the first bank where there was -- where this issue of u-turning, trying to clear iranian transactions first came up. i think this is -- it's evolving into a u.s. versus uk spat but that's not where it started. >> editorial saying maybe they should take a look at u.s. banks. do you think that's overdone? >> there were regulatory lapses in the u.s., which is where the financial crisis started. there's an element of -- the uk is feeling under siege from the u.s. at the moment. i don't think this particular instance is about the u.s. versus uk but i think it's turning into that. >> this about a new regularitor isn't it? isn't this about a new regulator coming out and breaking rank and using extraordinary language in -- >> they called standard chattered a rogue institution. there's suspicion this is a rogue regulator. the way these situations normally work is regulators and investigation work behind the scenes, come to an agreed set of facts, and they

destroying each other and of course you can't have banks destroying its other without central banks assisting and destroying each other and of course central banks policy of quantitative easing out of the say keep rates artificially low only to benefit a select few and meaning the savers around the world subsidize criminality in the city of london and wall street isn't that also part of this kind of suicide mission were all the banks are lined up in a circular firing squad all absolutely. quantitative easing is demonstrable way and imperatively shown to enrich the financial sector at the expense of everyone else because of an effect known as the cancel out of facts whereby when you introduce new money into the system it doesn't i then the purchasing power or does it transfers the purchasing power from the old money to the new money so what what what we have is. the banks they get is the money and they get the old per cent and the people who are. with the old money the people are the retirees. and want holding dollars is purchasing power for the benefit of the backs. right so to put

investment banking took a nosedive and brought in even less than retail banking. as a result, deutsche bank has announced it will cut 1500 jobs in that division alone, but that is not the only problem facing the bank. market regulators have launched a special probe into the suspected manipulation of the libor interbank lending rate, and deutsche bank could face billions in fines and penalties. >> those weak earnings results had an impact on the broader market in europe as well. the blue-chip dax closed the day just slightly lower and similar story for the year of st -- euro stoxx 50. the dow jones industrial average also slightly lower in the day. the euro trading at $1.2306. >> crisis in syria, it is day four of the regime's offensive against rebels in the city of aleppo. both sides have been claiming successes, but it is very hard to verify those claims. >> the district of salahadin looks like a war zone. rebels are using everything they have got to defend against the onslaught from government forces. general who deserted to the opposition dismissed claims that

morgan bank kill yourself bank have a nice day since your attention was going to support thank you max and i go much more coming your way. will. technology innovation all the developments from around russia we've got this huge you're covered. sigrid laboratory to mccurry was able to build the world's most sophisticated robot which on fortunately doesn't give a darn amount anything tunes mission to teach creation why it should care about humans enduring this is why you should want your only on our two dog calm. water back to the kaiser report on max kaiser timeout a goatee and his kingdom and talk with john as ease of deezer nomics dot com john as these walk in the kaiser report fantastic the maps are old john aziz there was no liability lesser crime there was no sir prime studio crime so why is everyone so upset with the bankers everyone's upset with the bankers because since the year nine hundred seventy one the bankers have got a much much much much richer and everyone else has got much as much or as a percentage of g.d.p. you know corporate profits and. the financial sector profits

or fix to use the proper word so the federal reserve the european central bank the swiss national bank all the rest are in the business of imposing their judgement on the marketplace so they do this many ways most visibly they they set a money market interest rate that goes in this country by the name of the federal funds rate and that rate happens to be zero zero zero s. before tax mind you so the savers get zero before tax the speculators get to borrow at zero with which to finance their speculations so one can make. a good many arguments against the nebulae sion of rates and i have but the library scandal it seems to me is is this as a scandal is almost infinitely insignificant the significant scandal is that is the ongoing manipulation of rates by our central banks why do you think more people are making that connection have more so upset about live our lives why aren't we more upset about central bank manipulation of rates as a reality i think that i think there is a ritual loathing of of big money and big financial institutions that is certainly understandable not entirely mispla

the result is that both the banks toure's and the banks on wall street have billions and billions and billions of dollars that they can buy pretty easily and given that what better place to put that money that in a bind politicians and the laws and regulations that those politicians can write have trial most of the money wall street bankers are making right now is being made in ways that were completely illegal for more than seventy of the last eighty years and they bought some politicians got the laws changed and for most of the twentieth century if they made that kind of money they would have paid upwards of seventy to ninety percent income tax on until they bought some politicians and got those laws changed to in the two thousand and eight election cycle the banks hers were betting the democrats would help them out so they invested over one hundred seventy million dollars in that party a bit more than they gave to republicans and of course those are just the official donations they may have given a lot more through invisible sources groups like karl roves so-called charity that doe

banks can do trading they're not subject to. they're not subject to not being there don't they can make some mistakes. now the irony said not be lost as sandy weill was at the helm of citigroup when it was becoming the behemoths it is today he was instrumental and pioneering the one stop shopping bank model even violating remaining provisions of glass steagall at the time in the process here is inside jobs filmmaker and predator nation author charles ferguson talking to us about it take a listen citi group wanted to acquire travelers did acquire travelers before the glass steagall act was repealed and so it was at the time and illegal combination of a commercial break in an investment bank is travelers which was at the time an insurance company also owned a large investment bank. but greenspan the federal reserve gave them a pass gave them a one year exemption in during that one year exemption they got the law changed they got glass steagall repealed. fancy that and now the chairman the former chairman is advocating for somethin

separate investment banking from commercial banking. why?> i think it is surprising today, but it wasn't surprising then 20 years ago when i was chairman of securities industries association. we had ver have very few commerk members. investment banking was completely separate from commercial banking. and so we were defending the idea that an investment bank and independent firm should be able to compete without uncle sam's backing and frankly commercial banks have deposit insurance so therthey are different creature. cheryl: you said basically we didn't learn anything from history, the loan debacle the 80s because they were insured. he said we didn't learn anything. >> it seems we didn't because when congress finally got rid of glass-steagall and it had been shipped away by federal regulators before that, they had a perfect example of what goes wrong when you have federal deposit insurance you lsen laws. that is what happened in the 80s, they were able to get many more powers, 100 billion of taxpayer money. cheryl: use it whenever a nation p

small banks. they have been trying to explain to people that small banks are not the wall street banks, tried to bridge the divide. trying to doll i that. >> our caller talked about how small banks have a lot of regulation they have to deal with. because they are smaller and had to deal with a lot from washington. tell us about when you're pressured were about those comments. guest: small banks are right now try to fight that, as the regulation, bank overhaul law is being implemented. they were promised that a lot of the regulation they would not be given the same treatment. they are arguing they are not seen that. so they are asking for a two tiered system. host: we are talking about banks that still of t.a.r.p. money. there are more than 300 of them go up to $111 billion. here is a message from jim. why do we save small banks? guest: as the last caller said, the small banks are four small communities. i am from a very small town. there was no big bank in that town. it was a small community bank.

gold been swapped with the gold of other central banks so that other central banks might intervene in the gold market to keep the us government's fingerprints off. the transaction and we believe there's gold there we don't think the drawing of it really accomplishes much we want to get into the records to see how many ownership claims there are to it so this doesn't answer your questions drilling drilling holes into two to five percent of the u.s. is gold that is reportedly still there is stored there is not going to solve it now let's talk a little bit more about manipulation but of the silver market because this is another story that's come out this week is this article in the financial times that the u.s. is for your probe of possible silver market manipulation has essentially gone cold that they don't have enough evidence to pursue a legal case in your research and experience is that true is there just not enough evidence to move forward with any kind of real case if the if the silver market is not manipulated we learned today it's the only market that is not manipulated and i wou

the european central bank waits and watches. it's leader mario draghi takes no new moves to support the euro-zone. >> susie: i'm susie gharib. knight capital pegs losses from its trading fiasco at $440 million, but the hit to wall street's reputation could be much more. >> tom: and, we continue our look at regional banks, with one of the largest, bb&t c.e.o. kelly king joins us. >> susie: that and more tonight on "n.b.r."! >> reporter: all talk, but no >> tom: all talk, but no action. europe's central bank today failed to announce any new concrete plans to help clean up the euro-zone's financial mess. susie, e.c.b. president mario draghi said he's ready to do more, but offered no immediate steps to solve europe's financial crisis. >> susie: tom, it was a huge letdown for investors around the world. draghi had raised expectations when he promised last week to do whatever it takes to protect the euro. when he failed to deliver on that, markets sold off in europe, and here on wall street. the dow lost 100 points, the nasdaq and s&p