rest of it out right meaning that everybody went to the bank at the same time had a run on the bankand solve it so i mean that was the nature of actually i see so you know in part if banks could if they were required to hold for reserves that way you know would we even need to actually. well you wouldn't you would need banks at that point i mean we do have a system probably more like i understand the middle eastern system to be were you know interest is not allowed to be charged and banks. do all their banking based on fees it would change the total structure of the banking industry i don't think you're going to do away with fractional reserve banking and it is probably not going to a long time. i mean you mentioned that you're a supporter of reinstating plastic all prohibited commercial banks. you know from using commercial deposits and into investment activities but if we didn't have this fractional reserve structure would we even need bassil yeah we still would because basically we had we used to have two kinds of backs we used to have. banks that gambled you know the places like

do all the banking based on fees it would change the total structure of the banking industry i don'tthink you're going to do away with fractional reserve banking and it is probably not going to a long time. i mean you mentioned that you're a supporter of reinstating blasted all prohibited commercial banks. you know from using commercial deposits and into investment activities but if we didn't have this fractional reserve structure would we even need bastable yeah we still would because basically we had we used to have two kinds of banks we used to have. banks that gambled you know the places like merrill lynch they used to be generally called brokerage houses instead of banks and you'd go there to buy stock and they would gamble their own accounts in their own stock and things like that and then you had good old boring banking you know where there were you keep your checking account in your savings account get your home mortgage and the boring those are called commercial but i have to coin that term you know boring bags like you know bring back the green eyeshades you know the just.

prohibited commercial banks.you know from using commercial deposits and into investment activities but if we didn't have this fractional reserve structure would we even need. you know we still would because basically we had we used to have two kinds of backs we used to have. banks that gambled you know the places like merrill lynch they used to be called brokerage houses instead of banks and you'd go there to buy stock and they would gamble their own accounts in their own stock and things like that and then you had a good old boring bank you know where there were you keep your checking account in your savings account your home mortgage. the boreen those are called commercial but i have to coin that term i love you know boring bags like you know bring back the green eyeshades you know just. and we need to turn banking commercial banking anyway back into a nice boring business. let the let the wild investors go wild with their investment but now with my savings account with your checking account well now this bill

morgan and bank of america the two big derivatives banks and their obviously huge depository banks they both have more than a trillion dollars in deposits they're using our deposit to support their derivatives books which amount to seventy nine trillion in the case of j.p. morgan and seventy five trillion in the case of bank of america. and the catch is that the derivatives claims go first in bankruptcy so that means they will take all the collateral and they won't just won't be anything left for either the insured or the uninsured depositors would want to jump in here really quick because we're almost out of time but obviously you know you're pointing out that this is a system it's a global system and it's not an but one they're going to be another gigantic financial collapse banking crisis that's going to draw worth the one that we saw last time and of course where the money going to come from is going to come from deposits just like we saw in cyprus ellen is there anything we can do to stop this i know that you're the president of the banking. public bank institute break down what th

system hedge funds are banks. and hedge funds and banks traded treasury securities for cash and the process continues thanks to rehab population now love it or hate it as well greece is the whale the wheels of our modern financial system and the fed is siphoning the greatest time for unintended consequences. all right here's what's in your prime interest. this week hundreds of activists and homeowners gathered outside the department of justice demanding accountability for the wrongful foreclosure that have occurred since the financial crisis of two thousand and eight not in a recent settlement between the federal reserve and the office of the controller of the currency and the major financial institutions homeowners receive just a penny on the dollars for the a legal foreclosure activity or banking errors prime interest producer adjusting underhill has done a full report and here is what she has. seen. in two thousand and twelve and hames mother of three lost her home to foreclosure this is not just it's like oh i

they can trust they're afraid to lend to a bank to another bank because they don't know if they get their money back and a whole credit market seizes up another question that we need to answer as to big to fail really over and at the same. services hearing richard also man the f.d.i.c acting general counsel he had to say this. to resolve. title one that it provides for a living will so we can try to address these institutions so they can be resolved in bankruptcy if they cannot be we have. total two so there is a law that says to big to fail is over that the i.c. has said it's over as the implicit guarantee really over there was law on the books for twenty years that so the taxpayer did not stand behind freddie and fannie that didn't quite work out that way either so let's start with two issues one is this sort of dance around taxpayer money or not and so yes title two sets a path where the rest of the industry can bail out institutions creditors now yes that's slightly better than having the taxpayer but i'm fundamentally offended by thinking that prudently run institutions should

and then some banks started to go bankrupt their bank runs when people found out that their bank had created so much money out of thin air that their gold backing was so low that it became a risk to put your money to keep your money in that bank and when that happened banks are lobbying with the government to create a central bank and the purpose of the central bank was to make rules that all the banks now had to follow as to how much they could inflate how much money they could print out of thin air so that with that all the banks would inflate together at the same rate so that the risk of bank runs would now disappear and that's what's happened and as a result inflation has become rampant if you look at the value of our currency today compared to the value of currency hundred years ago. about ninety nine percent of the value of the currency has disappeared and that's because of inflation and that's that's because the government has allowed bangs to create money out of thin air it's a government issue privilege to the banks and the banks are happy to to take advantage of it. and of

community banks regional banks in the united states at the time they had something like twelve trillion dollars worth of assets less than two hundred billion or two percent consisted of toxic as. says that we're falling in value all the rest of it was basically whole loans of one type or another that probably would have generated some losses over many years but there was no immediate down happening in these banks there wouldn't have been lines you know at the teller window all of this was just a lot of baloney that was it had told by the panicked man in washington namely bernanke he and a couple of people on the fed and paulson and the goldman i gang running around with their hair on fire on the third floor of the treasury building just one of the great it was i called it a coup d'etat and i use the words vice of lee because effectively that's what it was washington didn't have a clue bush was in the dark the congress was buffaloed in a field people basically did a very terrible thing why i really appreciate your comments on that we recently interviewed she was bear who asked we asked h

banks can lend in london lend up the monetary base the fed can indirectly influence bank lending by keeping interest rates low which means that banks need to lend more and take on riskier investments to try to maintain their net interest margin but while the base has tripled we have seen the money supply increase substantially but it hasn't increased at the same rate we haven't seen an unprecedented fanchon of the money supply which you might expected when there is you might have expected some complication we haven't seen the inflation or even hyperinflation that some have expected while the monetary base was increasing we're just seeing why haven't we seen a more drastic increase in the money supply or one of the reasons that we haven't seen more drastic increase in the money supply is because of interest on excess reserves now this was something that the fed started in two thousand and eight during the crisis and it's sounds exactly like what it is the fed started issuing interest on xmas reserve banks held and that basically meant we saw a spike huge spike up in excess reserves h

the banks down at the banks would not have a problem if the other banks so that would be stupid banks and stupid people of any institution well wall street the moral hazard problem but get on straight fannie and freddie of giving them good. wall street so figure now for ever is up there doing all that a handful of people and yeah while the one percent of their people are angels it depends on the institutional framework you created we created a system designed and it failed but it was not a capital ok george i want to go to you i want to give george the last word search with because it looks like capitalism is working just fine for one percent go ahead . yeah and you know i don't know whether the deposit insurance is ready or very much to do with it i mean look at what's going on now i mean the banks are essentially getting interest free loans from the government which they then lend back to the government and then pocket the interest that they make on that so and then this money then goes into the stock market so the banks are again making money twice over and this money is not think

and then some banks started to go bankrupt their bank runs when people found out that their bank had created so much money out of thin air that their gold backing was so low that it became a risk to put your money to keep your money in that bank and when that happened banks are lobbying with the governments to create a central bank and the purpose of the central bank was to make rules that all the banks now had to follow as to how much they could inflate how much money they could print out of thin air so the odds were that all the banks would inflate together at the same rate so that the risk of bank runs would now disappear and that's what's happened and as a result inflation has become rampant if you look at the value of our currency today compared to the value for currency hundred years ago. about ninety nine percent of the value of the currency has disappeared and that's because of inflation and that's that's because the government has allowed bangs to create money out of thin air it's a government issue privilege to the banks and the banks are happy to to take advantage of it. a

the bank there was some signs that the banks were in fact going to cause larger problems when lehman failed commercial paper lending rates went through the roof and they went from something like one percent to something like five percent and commercial paper is the way a lot of major u.s. corporations borrow money to finance their activities their inventory their short term production and so companies like g.e. and other companies were getting in trouble at the time because borrowing became extremely difficult so to say that it wasn't going to wall street i think is incorrect how how big it would have been is hard to know and so that's something that we ought to just take a guess on. bernanke there is one thing bernanke e have that he has studied history very well and if there's any credit i can give him is to understand at least how these credit crisis can get worse if something isn't done so i don't agree with that i think that you have to create a system where bailouts are not depended on i agree with that i'm certainly not in favor of governments jumping in every few few crises h

corporate investment bank. so -- would be synergies, cost synergies, means, resources between the different businesses. and the third, the continuing cost on our expenses. >> as part of the plan, societe generale will cut up to 700 jobs at its headquarters in paris. that's fort first part of the plan. then it will cut some jobs at the banking unit, but the bank is negotiating with trade unions. some other banks have announced some cost reduction. credit agricole. 15% of cost reduction at the investment banking unit over the next three to four years, but we don't have the precise details about the road map for this cost production plan. share price is flat. over to you. >> stephane, thanks for that. plenty more to come. meanwhile, the german shares allianz says all of its business segments reveal a 24% rise in quarterly net profit during the same period last year. samsung avoids a full quarter it won't be adjusting guidance. despite the reaction of one analyst, not doing what you would have thought from that res

work with the bank of japan which worked with the bank of israel working with the bank of australia and canada to collectivize monetary policy around the world into collectivizing monetary policy and then they're asking for individuals to sacrifice like the cypriot they have to give over their savings for the good of the collective that's being managed by the e.c.b. marriage i ben bernanke you mark carney coming over here to the bank of england and people are buying gold to protect themselves against the collectivism of the central planners the central government authorities the central bankers and the result is quite stunning in that the as you point out mal when faced with destruction double down double down now did mrs wang of course and saw that mal they were bureaucrats when faced with catastrophe instead of having the humility to say. i'm a jerk and we've got to change same thing with federal reserve ben bernanke you're barack obama instead of having the humility of just facing the public and saying i freaked out i'm an idiot we've got to change course they're doubling down on the

is wall street or city of london any of the big banks are they entering that bank marketplace at all. not that i'm aware of there is there's i have talked to senior people at banks that find it really interesting and they're definitely looking into it and they're really trying to decide what they're going to what they're going to do but banks are traditionally very slow to move on on things like this do you think they see bank points as a right at all. i don't i don't think they're going to see it is a threat i think right now they're looking into it and to see to determine actually how you see. well it is for for criminal activities and you know if it's something that they can control when i when i talk to the banks they look at it they say you know how well can we trace back the path of this money the source of funds and whatnot so right now they're just they're just studying it trying to figure out exactly what is good is good for and if we did start to see some of the big banks enter into this marketplace way areas you think they would emerge and for. more investing and big point

drowning in central banking we're drowning in central banking right now and quantitative easing that's where the bubble is it's not going to end anytime soon until there are some negative consequences one of the problems we're going to have in the global economy is currency devaluations that's the solution for an individual country for the issues they are facing right devaluations against what well just nine hundred seventy one when the gold window was closed everyone's been trading against each other so now there's a recognition that everyone is evaluating against against what well there is only one answer to that they will have to come back and say we're all going to devalue against gold just like they did in the 1930's and that's what's happening anyway because people in china people in asia people the middle east people in the emerging economies are buying gold hand-over fist of physical gold because they realize the devaluation is coming it's coming they're not stupid only the people of america and the u.k. are stupid enough to think that there won't be a return to a gold standard

central bank. he said what traders wanted to hear -- the fed will continue its bond-buying until the labor market has improved substantially, which is not yet the case, meaning that the flooding with cheap money will continue. money which should help the economy to recover, but which is also driving the markets, including the dax, to new record highs because investors can only get an acceptable return with riskier assets. the central bank in the u.s. is not alone. >> let's get a closer look at those market numbers. the dax saddling the day at yet another record, about 0.7% higher. the euro stoxx 50 also higher today. in new york, the positive trend continues -- actually, it has changed direction and is lower, but it was positive earlier. the euro-dollar is currently trending lower. sony has announced it is considering a proposal to sell a big chunk of its film, tv, and music operations. >> the idea apparently comes from an american hedge fund this as money from the sale could be invested in sony's

the royal bank of scotland is an excellent retail bank.y have five largest players, rbs control about 80% of the market. you know how much we love, love, love cramerica. it's much more concentrated than here where the top five banks are going at it because they only own 40% of the market. this is a fabulous corporate bank in the u.k. when it comes to commercial banking, rbs controls 30% of the market in britain, thanks to that old boys network over there that seems to run everything. you have a high quality retail commercial bank. one trading to lloyd's, another u.k. bank which has the british government as the largest holder. the reason they trade at such a huge discount is the because they have other businesses too. okay. these around that good. >> the house of pain! >> there's the markets division, 22% of the company here, rbs, used to be one of the biggest fixed income houses trading in the world, but this is not a good business to be in right now. ever since the downmarket, we want shrinkage at rbs. the worries are going to become a r

if your bank takes more money than a stranger, you need an ally. ally bank.eds an ally. ♪ melissa: most people would it take setting up shop in this economy is no easy feat, especially in a tough environment like new york city, but wall street's newest shoeshine shop is offering its most female clientele a combination of the looks and a little elbow grease. this guy is a genius. ticket out. ♪ >> our business model is blt on a female staff giving shoeshines. lots of financial people down here. quite stressful jobs. you walk away from the job to go into that shoeshine. you wanted to talk to somebody, sit down at converse of them. >> the dow want to talk of money or whatever is going on. and most of us don't know about the stuff, so i gue that's a good thing. >> we greek people of the door. we helped them off. that doesn't happen that every shoeshine place. ♪ we have college students, almost and actresses. >> really positive. working here is really great. >> of come back about four times. this is a better experience. butterflied. have a good time when they're he

the bank there was some signs that the banks were in fact going to cause larger problems when lehman failed commercial paper lending rates went through the roof and they went from something like one percent to something like five percent and commercial paper is the way a lot of major u.s. corporations borrow money to finance their activities their inventory their short term production and so companies like g.e. and other companies were getting in trouble at the time because borrowing became extremely difficult so to say that it wasn't going to wall street i think is incorrect how how big it would have been is hard to know and so that's something that we ought to just take a guess on. bernanke there is one thing bernanke e have that he has studied history very well and if there's any credit i can give him is to understand at least how these credit crisis can get worse if something isn't done so i don't agree with that i think that you have to create a system where bailouts are not depended on i agree with that i'm certainly not in favor of governments jumping in every few few crises h

bank based in minneapolis. surprising result, jpmorgan, a bank that touts its customer service, was in the mid toll low end of the pack in nearly every category. the big banks not performing as some of the more nimble peers. but melissa, i think the most interesting thing, ally, a bank that didn't exist until 2009 is best in class across the board in this study. >> ally. who knew? kala, thank you. coming up next, leading tech investor dan niles rips a page from his playbook and gives us his best ideas. in japan sell-off fears climb. we tackle the area of the market which has become too hot to handle. but first, find out how blackrock's chief investment strategist is prepping himself for this rising rate environment. jack rosenberg joins us live on the other side of this break. stay with us. we went out and asked people a simple question: how old is the oldest person you've known? we gave people a sticker and had them show us. we learned a lot of us have known someone who's lived well into their 90s. and that's

i know you've been looking closer at the bank. i want to talk about general europe definitely in more detail, but starting off with the banks, you've done some research about where the strong banks are in europe at the moment. are we still seeing a lot of the weakness that was there a year, two years ago, persisting in periphery euro? >> well, i think many of the banks have recapitalized. there's less liquidity concerns with the ecb action. italy and spain, a two-tier banking system is starting to development. but generally speaking, there is a slow de-lev raemging trajectory. banks have delevered $2 trillion of assets over the last year in europe. >> 2 trillion?

the banks in the u.k. and in the u.s. they borrowing gold from the central banks to make good on physical delivery which range of the gold in fort knox has been hypothecated it means the gold the bank of england has control over has been hypothecated and then re hypothecated as to say there's been loaned out to be sold into this marketplace so when the prices finally break free of the shackles of manipulation you see a ten thousand dollar price on gold which as i say there's a ninety nine percent possibility of that happening in the next thirty six months these central banks are going to have to declare bankruptcy so gold will keep going are similar will keep going iron of course bitcoin will then break down and head toward much higher levels well he's suggesting it's the clash of the gold titans because the fact is that china russia and these other countries in the region including turkey and india they know that the western central bank old boy vaults are empty so now they're just playing a game with the

the banks down at the banks would not have a problem if the other banks of that would be stupid banks and stupid people of any institution one of the moral hazard problem but get on straight fannie and freddie of giving them good. wall street so figure now for ever is up there doing all the handful of people and yeah while the one percent of their people are not angels it depends on the institutional framework you created we created a system designed to fail and it failed but it was not a catholic george i want to go here i want to give george the last words it was because he looked like capitalism is working just fine for one percent go ahead. yeah and you know i don't know whether the deposit insurance is really a very much to do with it i mean look at what's going on now i mean the banks are essentially getting interest free loans from the government which they then lend back to the government and then pocket the interest that they make on that so and then this money then goes into the stock market so the banks are again making money twice over and this money is not think used in a

here on the stand working its way around in the bank we have our knives out for. the previous the fight to spank staying there again here in a situation where being i'd like to talk about your name and we. spoke. but. it's. the so cool. to. long-term capital management was a large hedge fund that nearly blew up in one thousand nine hundred eighty eight i spoke with alluding careening an associate professor from the university of san francisco and the author of the cross crisis of crowding earlier about this event and how it was similar to the financial panic in two thousand and eight of take a look there are some similarities in the sense that in the long term capital case it was the case of a levered bank in other words of the ball a lot invested and they had a complicated position in a market that became very crowded meaning that lots of people were doing the same type trades and what happened is once a slight shock occurred and that market didn't look so good as people started selling it put pressure on them in others and with their leverage it into the causing

because all central banks are mimicking what the federal reserve and the japanese central bank are doing because they have to because they're all drowning in the liquidity provided by the u.s. federal reserve and the bank of japan in global currency war a new front opens in the south pacific from way down under comes a new front in the push and pull over world currency values stung by the rise in the new zealand dollar affectionately known as the kiwi the country's central bank last week acknowledged that it had intervened and foreign exchange markets to try to fight any further appreciation yeah this is the global currency firing squad all the currencies are lined up in a circle. they've got their currency print button ready to go and they print print print and they're all trying to devalue concurrently so that nobody is the loser however that is like warren buffett says when the tide goes out you see who's not wearing a bathing suit in this case it's going to be japan so japan will be the country that shows up as the one that enters into a hyper inflationary spiral and of course this i

break up the banks. >> maria, look, banks have stress testing.higher capital, have the cfpb, as ben said. >> all right. alex, we are going to get back to that conversation. we obviously had a technical difficulty there with the live shot of alex sanchez. you get the point. we have seen, in fact, a lot done on the positive side for banks, raising of capital, cutting of debt. yet the breakdown between the industry and the -- and really society continues. we'll watch that. >>> up next, is the irs watching you? up next, why you may want to think twice about what you post in your social media sphere. wait till you hear what the irs is scrutinizing and how you can figure out if you're being targeted. >>> following the trail inside the obama administration. republican congressman kevin yoder speaks with me exclusively about his call for a full and independent evaluation in the irs scandal. wait till you hear his take on this irs mess. stay with us. [ male announcer ] with wells fargo advisors envision planning process, it's easy to follow the progress y

, want more transparent banks.doing in the face of all of this? >> well, i think all of us have had major increases in our capital, which i think is a good thing. i think there have been major improvements in liquidity for us, not so much, because we were all very prudent from liquidity. and i think that's a good thing. i think it's the non-safety and soundness on load on the regulatory side that's the biggest burden. and i think the tragedy there is that those burdens are going to put a lot of small banks out of business. they simply can't afford the kind of investment in non-safety regulatory compliance that we're being asked to pay for that we can afford. but i think it's making it harder and harder for mid-sized banks to compete, frankly. so i think the irony is that for political reasons, people have focused on the non-safety and soundness issues, and that actually reinforces the position of the larger banks versus the smaller banks. >> absolutely. well, we'll be watching how you navigate this regulatory envir

the clampdown on bank secrecy comes as the european union present head with its proposal for a banking union one that the deputy leader of the u.k. independence party believes could make it easier to read depositors accounts. we all know why the trying to do this we all know what the it's basically to harmonize banking across the european union to create a banking union which is what the germans in particular ones because they know in the end if they are going to be a people's bank accounts like they've done in cyprus if they are going to do this to begin countries they need this banking union and in many ways they will need to be a people's bank accounts to ensure that the euro continues because bailouts are going to keep coming of course we know that slovenia is now in serious trouble spain has only which is a youth unemployment which is sixty percent in greece we have soup kitchens on the streets of athens we have people leaving children on the steps of churches because they can't afford to live so there will be more bailouts in the pipeline and obviously the european union has to l