he barely missed the m.f. global bankruptcy by luck he had pulled his money out of m.f. lobal got in a fight with the broker he was caught up in the rough go bankruptcy luckily he got his money back now after this where he has had his money with p.f.g. and it is frozen he cannot get it here is his assessment. seems to think it's becoming destruction of the problem and. honestly if you try to change but. when we went in and invest in the us we invest a lot to be the safest least i mean of course to a bit of the risk of the treats you build the risk of the commodities on the future going through it's that you go to but no longer reserve that you're going to bear the risk of the leaders not doing their job. so should we be considering that i don't know what systemic risk that regulators are going to be doing their job because it seems we have plenty of evidence that they're not now in this customer's case he was using his account to fund his business in egypt because obviously business right now in egypt since the revolution has been tough he tells me and now he doesn't know

john rowe has been fighting for customers of m.f. globalfighting for them to get their money back he's co-founder of the commodity customer coalition and he's here now to help us understand how this affects investor confidence and the broader picture so first thank you so much for being on the show today we really appreciate having you on on a day like today thank you yeah absolutely so first you said i saw you quoted in an article you're having deja vu why are you having deja vu john row over this nine months after a global. dollars. property being you know to be charitable this is appropriate why the commodities broker and us in. such a short time we've got the first instance on just the early. in the way there was with them a little so it seems like we're still pretty much the same a similar process and. speaking of that process you have been going through it with m.f. global you've been looking at all of the fine print of how that was able to happen i want to know the c.r.t.c. in january said it found no material breaches of customer fu

i mean it's tough after the flash crash m.f. global g. paul j.p. morgan shenanigans i mean how do you trust the financial system and i mean that's what we're really in d.c. to you know to try to help and help shore up investor confidence working on getting our interim work with the facility plan which will give commodity customers a former county insurance we're working on getting special prosecutors. appointed to to actually prosecute some of the fraud that have been committed and tighten up regulations in a smarter way where where there are simpler easier in our stand and more in forcible rather than just getting more pieces of legislation like dodd frank which just make things more complicated and create more and more loopholes for these guys to. get through so there are some efforts being made by those gentlemen but let's attack this from a slightly different angle now not from those trying to fix the problems but those who've made a living exploiting them remember this case a crazy any christmas in august oh you know blow played crazy he's goi

for m.f. globalal insider, one-time democratic governor and former senator, jon corzine seemed full of regret when he testified before his old colleagues in december. >> let me be clear. it never gave any instruction to misuse customer funds. i never intended anyone at m.f. global to misuse customer funds. >> republicans and notably fellow democrats voice blunt criticism. >> this is a glaring, glaring example of why the american people are rapidly losing faith in our ability here in washington to get our hands around this. >> while there may be no criminalcation and the executive mace not escape civil penalties, on a political note, one analyst told fox, corzine's fall from grace is bad for the democratic party given he was once seen as insider and money whip. bret? >> bret: thank you. >>> the government is changing terms with fannie mae and freddie mac, they're dealing with concerns that the mortgage companies could exhaust the federal support they were guaranteed when the government took them over

fraud m.f. global fraud all how you're looking for a way out of the financial system you may be interested to hear what jim grant has to say about planting trees and first or closing market numbers. dreaming of a luxury used see room trip with open air entertainment. a little bit of exercise to get in better shape. queasy with all my healthy ingredients. in this case something to remove our summer sales on our cheap. welcome back so why would anyone want to give their money put it in an investment knowing. that they would receive nothing in return or they would lose money after all was said and done in a perceived safe haven like treasury or or government bond well let's look at today's news cycle p.s. g.'s founder and c.e.o. arrested he admitted it is suicide no he attempted suicide to fraud going on according to his note undetected for twenty years so does fear over protection of your property rights factor in to what our guest calls a bubble in perceived safe havens where you don't have to listen to

you know, here with m.f. globalhe prosecution of the predecessor, revco, from which this group m.f. global emerged. back then, they were committing a similar maser, it was fraud and crime, stealing customer money for use by the company. >> greta: in this -- what you know with m.f. global, what were they doing that is escaping, apparently, any criminal charges. >> they did a major no-no. they dipped into segregated customer funds, which are supposed to be kept separate and not to be touched for general corporate purposes. it appears that there was a run on the bank because a very risky bet that corzine had made at the parent company level. they dipped into that customer money, which they weren't supposed to do to cover the bets out of the bank. when the music stopped, there was an enormous cash shortfall. and these customers, again, who are supposed to be protected under the law, were left with pennies on the dollar, 70, 80 cents, huge losses as a result. >> greta: all right. let's put this in other terms. i was a cr

with it the new york times deal book is reporting the criminal investigation into the collapse of m.f. global is heading into its final stage with that customer money that still went missing and went out charges expected against any top executives. or in other words. one of these sort of a. deal the moving of money from cloying accounts to buy spanish did not so they go into us to go to jill. we'll hear hear more let's get to today's capital account. now you can probably find recent headlines or data points inspiring talk of the u.s. housing stabilization but when you look at the foundation of an actual recovery is there one because you can't forget about the zombies i mean it's going back and if you were you were going to say are you sure the problem there is going to. start going. well are you going to have no idea that he went into is not your. just like that you may think they're coming out selling and rebuying what purportedly drives primary demand in the u.s. but with underwater homeowners stuck and households with impaired credit stuck because of an inability to qualify for a mortgage

. >> tom: an update on the hunt for missing money from failed brokerage firm m.f. global. investors might not get all of their money back. james giddens, the bankruptcy trustee in charge of returning customer cash, today told a senate panel he expects to recoup about 90% of the cash. but so far, he's only uncovered about 80% of the funds. there's still about $1.5 billion unaccounted. his outlook is in conflict from the testimony of another trustee, louis freeh, who said he's confident all customers will be made whole. still, giddens warned lawmakers, getting all of the money back won't be easy. >> we very much would like to pay every customer 100%, however, it will be a time- consuming, difficult and uphill battle to be successful in marshaling substantial additional assets, needed to pay commodities customers 100%. >> tom: today's hearing in the senate looked at the bankruptcies of both m.f. global and p.f.g. best. the two futures brokerages failed within nine months of each other, leaving customers with massive losses. >> susie: a rough start to the trading day here at t

they never find anything you didn't see any charges come up against john cause online with the m.f. global scandal e can't fly and you know one point six billion dollars you mentioned about goldman sachs being fined over five hundred million dollars what was it two weeks ago h.s.b.c. being saw in for money laundering and it's more than just the financial institutions just this week blackwater you know that wonderful mercenary firm that keeps changing its name yeah they just got fined for selling arms and they will fly again a few years earlier you look at what's gone on in just this year over eight billion dollars in fines collected. from drug company it's from military contractors and mercenary contractors from the financial institutions you don't see one head roll this is they call it a justice system is criminal it's not a criminal justice system you have a bunch of flunkies a bunch of suck ups and a bunch of bureaucratic lightweights that keep swinging through revolving door was from government to the so called investigation agencies and enforcement agencies that barrow down to their a

m.f. global lehman brothers the whale trade from j.p. morgan the list goes on all goes through london london apparently has the worst regulatory environment in the world of course blith masters of j.p. morgan the wicked witch of derivatives also is based in london. learned in london itself and also we learned from m.f. global that unlike the united states the thought of being able to hypothecate a real hypothecate one hundred forty percent of a security for a longing lending requirement you can read hypothecate to infinity in london you could resell the same thing over and over and over again what about the regulatory environment in london what is the cesspool in london going to shut down actually if you look at the regulatory rules and the system it's not bad at all it's not that they didn't have the power it's that they didn't any source the rules and we haven't invested in their white collar crime properly you can steal a water bottle in a riot and get put in prison by for thirty days and david cameron can you know rant on about how b

we've seen i've heard many stories of customers of m.f. global who had their money taken they put it in parent financial group and now the money has been taken from there so is there a role that people are more willing to put their money somewhere they at least perceive not to be safe because they're more afraid of it being taken. out of us that is certainly that's part of it i think there's an overarching fear of something terrible yet not strictly definable. and yet this is such a very a gated financial landscape there is this thing without a name this year that causes people to settle for less than nothing on fixed income investments yet there's also some strong enterprising feeling still in the world. you know the world is a presbyterian say of sin and sorrow to be sure that is perennial yet there are companies such as google that are in the business of codifying and making accessible the sum total of the world's store of knowledge for free that would seem to be encouraging. the higgs bo's'n apparently has been unmasked i mean that every day

boy they whack you down but not a few names john cause i know and by the way the law firm that m.f. global used is attached to the attorney general and his assistant attorney generals law firm i mean what is six years old you can see through this stuff look at it one after another the game is rigged look what happened about a week ago. a jury found this guy that the feds were trying to prosecute from citi group and they let him go because they asked i wanted no this is from the foreman of the jury i wanted to know why the bank c.e.o.'s wasn't brought up on trial i'll tell you why it's very simple they're better than us that's right they're better than we are they make hundreds of millions of dollars doing dirty deals we have to work for a living with those suckers we pay for their criminality and that's what's happening in america and by the way. look what china is doing to the person you know they're ready to execute our yeah and look at the iranians that everybody hates they just found four bankers guilty and they one of their going to ditch talking about executing them and that's what i

in the futures market, that confidence has been hit by the bankruptcy of m.f. global, and the admitted fraud at p.f.g. best. farmers started trading futures in chicago in the middle of the 19th century. today, pension funds, hedge funds and individual investors have millions of dollars on the line in corn, soybeans and other products. as diane eastabrook reports some old-style market participants say these newer players are making it tougher for them to trade. >> reporter: for 164 years farmers, grain elevators, and food companies have used futures contracts traded in chicago's commodity pits to hedge risk. alpha baking company uses them to lock in prices for the wheat and natural gas used to make its breads and rolls. president larry marcucci's been trading futures for 30 years. about eight years ago he noticed it changed. >> it used to be if the market went up a couple of cents or went down a couple of cents a day that was a big deal. then it started bouncing around 10, 20 cents a day. >> reporter: marcucci thinks "so called" financial participants are the reason. t

invalidate all of your trades we're going to raise your bank account like jamie dimon does that m.f. global regrowing to check you out of this financial system now you're on the breadline and you're shrugging your shoulders wondering who is up and. and goes on to say that it is a national scandal that seventy five percent of of australia's stock exchange turnover is being conducted by unknown people who solvent see is uncertain and who could cause an australian market meltdown if they collapsed a can says these unknown people are not only manipulating the market but are the main cause of the violent share price fluctuations in turn these fluctuations are driving retail investors out of share markets again the retail investors are going on strike we saw this in the middle of the financial crisis they invested have not returned to the market the only people there are are the central bankers not like the phrases solvency uncertain because this is a growing concept and dilemma around the world because the collateral that is put forth by these banks is being exposed as worthless f.d.i.c for exam

street but the fact remains john aziza i'm curious what you think about this a i g limon brothers m.f. global the london whale barclays lie bore ages says p.c. money laundering standard charter they all went through london and it all touches on something you've been talking about here really hypothecation because only in london do you have infinite really hypothecation that is to say you can sell the same security an infinite number of times with no collateral correct and that's the problem you know glossed ego was repealed because the u.s. banks felt like they could be true london where you had infinitely above the geisha so i do i think there is something sick of the heart of the city and i think that thing is the ability to multiply up a tiny base of collateral to whatever level you want i think i think that's absolutely connected with. all of these scandals i'm not i don't i don't i'm not completely convinced that what standard chartered is done is particularly awful because i'm not sure the united states really has any right to be dictating. to individuals and businesses which countries

trading in babylon shall be put to death as a thief now compare that to the commodities traders at m.f. global who. sees the hundreds of millions of dollars of funds of these of these small farmers across america and where's john course on where a strong core design. needed to turn to something that will give people a thought a second thought about committing crime if there's a penalty involved and they might think twice about committing a crime or programming a computer to commit the crime for them they also note that in seventeenth century britain counterfeiters were smeared with tar from head to toe tied or shackled to a stake and then burned to death so we often talk about the counterfeiters of today using naked short sales and naked credit default swaps and creating capital out of thin air and using that as a weapon against us that's exactly equivalent to counterfeiting and counterfeiting has to be punished you can't let naked naked short selling and naked credit default swap trading go on completely and punished and then any hauled before congress claimed that you're making a market or a

pilfering and larceny and not only directly out of their accounts let's say jamie diamond taking m.f. global money out of segregated accounts directly to conver his bets but you also have an advance in computer algorithmic trading that will do the stealing for you there's a new fund out james it's a it's a it's an algorithmic lee driven fund that mimics superstition so it avoids the number thirteen it avoids popular superstitions in order to. create a fund that capitalizes on magical thinking so you're saying there's a problem of magical thinking and what wall street is saying is let's create a fund that have algorithmic trading bots that go into the market and trade based on the majority's view that magical thinking will solve the problem so you see my question is is that every single social catastrophe is viewed by wall street as a new way to package a securing security product and trading vehicle to enrich the top one percent of the top one percent so how do you stop that kind of predatory behavior by wall street you know they also have funds that capitalize on divorce i would assume that

like wall street will skate again a ten month investigation into the collapse of brokerage firm m.f. global and where exactly one billion dollars in customer money disappeared to is unlikely to lead to any criminal charges according to those involved with the case again a billion dollars disappeared and no one is owning up to it or where went and investigators can't find any criminal activity and there's only two places where that kind of money can disappear without raising any red flags and without leading to any criminal arrests and that's wall street and the pentagon but this latest bank heist doesn't compare to a decades long highs that's been perpetrated against the american middle class which is the subject of a new film debuting in new york and los angeles this weekend the name of the film is heist here's a clip. this country is working for the richest people deal leads them so nobody else. this is been the greatest wealth transfer in history at least the american kind if not mankind this is science books who are in charge of running the economy and a line of red light red light and