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.

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

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

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 assets that were 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 meltdown 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 group 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 and a few 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

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

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

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

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

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

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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

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

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

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 i think oh 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 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 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 good bring back the green eyeshades you know on the just. and we need to turn banking commercial banking anyway back into a nice boring business let the let the the wild investors go wild with their investment but not with my savings account you know not w

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

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 expansion of the money supply which you might have expected when there is you might have expected some sort of amplification 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 x. is held and that basically meant we saw a spike huge spike up in excess reserve

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's 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 and all. i don't i don't think they're going to see it as is the threat i think right now they're looking into it to see to determine actually how useful 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 and 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 and trying to figure out exactly what is good and isn't 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

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 and see big to fail really over and at the same. i know 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. can be resolved in bankruptcy if they can. we have the total too 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 august will start where there was a 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

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 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 in the bank of england has control over has been a 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 silver will keep going iron of course but going 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 that they know that the western central bank old boy vaults are empty so now they're just playing a ga

public bank institute break down what that is and how we can break this monopolization of the banking is taboo to start managing your own funds we have about a minute half left. well we do need a different system and we really can't fight wall street what we need to do is just leave wall street and set up our own banking system this would be there we have one model in the us that's the bank of north dakota owns its own state bank and north dakota was the only state that escaped the credit crisis but globally forty percent of. banks globally or are publicly owned these are largely in the bric countries brazil russia india and china and they escape the credit crisis and they did it because they have these very secure publicly owned banking systems where the profits go back to the public they are not allowed to gamble in derivatives and they are directed to use their. credit creating power to support local business and so they get their economies moving again. all right so there's there's multiple things people can do kind of just opting out of investing in wall street and there's other

somehow we're turning banks the victims.y're the ones that did the subprime loans, they're the once that did the robo signing, the banks are the ones that screwed up the mortgage -- >> nobody forced anybody to borrow any money. no one put a gun to anybody's head and said, you should buy a bigger house. >> we're not talking about people who bought bigger house, we're talking about people who were sold toxic products that enriched the bank? >> who was sold a toxic product? an institutional investor. that's their problem. people who ran up credit card debt or mortgages, you know, nobody forced the man on the street in this country to borrow a single dollar at all. everyone did it voluntarily. >> they just figured, hey, you kn know, everyone else owns a home, even though i don't make the money to afford this, i'm going to do it anyway, and then when everything falls apart, i've got to blame somebody. >> what you are capturing is why most people in america are furious about the banks, there's been expose about subprime loans and

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

and bank after bank after bank, they took those loans, they knew they were defective, and notwithstandingthat, they never told the investors. in fact, they told investors quite the opposite. so you look at that pattern of behavior and i think it raises very serious questions about whether this is criminal conduct. >> narrator: this was among several referrals the commission made to the justice department for further investigation. we asked chief of the criminal division, lanny breuer, why such referrals hadn't led to charges. >> i can't really talk about any specific case. but phil angelides and i have had very direct and very good conversations. but in reality, in a criminal case, we have to prove beyond a reasonable doubt-- not a preponderance, not 51%, beyond any reasonable doubt-- that a crime was committed. if we cannot establish that, then we can't bring a criminal case. but we don't let these institutions go. we've brought civil cases. we've brought regulatory cases. and the entire approach here is to have a multipronged, comprehensive approach to what gave rise to the financial cr

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

other banks as far as violations go. there are very specific terms they have agreed and are legally obligated to follow, they have to get back to home owners within five days of a request for a modification on a mortgage, to tell them if there are deficiencies, missing documents. the homeowner has 30 days after that to fulfill the deficiencies and the bank has to make a decision in 30 days. they have been violating that. we have 220 complaints about wells. 129 about bank of america. we're taking them to court. >> and the context of this, i've done some reporting on this and talked to folk on the other end of this, totally kafkaesque stories of sending loan documentation in 12 times, 12 different people, they lose it, sending in checks that get lost, horrible things going on which was the thing that created the settlement in first place. >> they have new obligations. in addition to whatever work is being done by the monitor, parties to the settlement, new york is a party, have the right to enforce it. we're following the

member says the bank could introduce negative bank rates.ave more. we'll come back after the break and we'll hear why it just won't go away on the next half of "worldwide exchange." we'll be back in just a few moments. ♪ roomba, roomba, roomba, roomba ♪ ♪ roomba, roomba ♪ roomba, roomba ♪ roomba, roomba ♪ roomba, roomba ♪ got a robot vacuum ♪ cleaning up my life ♪ and it's gonna cut through ♪ filth and funk ♪ just like a knife ♪ dirt won't come back again ♪ thanks to ♪ my brand new friend ♪ got a robot vacuum ♪ cleaning up my life i want to make things more secure. [ whirring ] [ dog barks ] i want to treat more dogs. ♪ our business needs more cases. [ male announcer ] where do you want to take your business? i need help selling art. [ male announcer ] from broadband to web hosting to mobile apps, small business solutions from at&t have the security you need to get you there. call us. we can show you how at&t solutions can help you do what you do... even better. ♪ >>> the stocks follow the streaks. >>> the stocks follow the streaks. >> annou