s that were made up of those bonds and the theory was that the banks who had suffered such severe losses because the drops of value of these assets that the government would come in and buy them up and the original idea behind the program in the way treasury was able to get it passed through congress was through a promise that once it bought up all these assets it would then use use its control over all these mortgage related assets to actually modify mortgages and that was something that was written right into the bill so the idea behind tarp originally was two parts one bailout the banks absolutely but the second leg of it and the part of that was really necessary for it to get the necessary votes from the democrats who still control both houses of congress was this promise for a big mortgage modification program and it was written right there on the front page to preserve homeownership of course what happened after the bill got passed though unfortunately or fortunately depending on your perspective they never went through with that plan and instead they took hundreds of billions of d

range of regulation the last few years and now we have essentially nationalize the banks. actually on the floor of the room so out of time gentlemen many thanks to my guest today in new york london and in san francisco thanks to our viewers for watching us here r.t. see you next time and remember rostock rules. mission free credit take should free zones for charges free from ajman free. free studio time free. download free blogs can plug in video for your media projects a freebie deodato r.t. dot com you.

to cross-talk the fate of the world's biggest banks i'm joined by andrew schiff in new york he is an investment consultant for euro pacific capital and author of the book how an economy grows and why it crashes in london we go to sam bowman he's head of research at the adam smith institute and in san francisco we have robert good news that he is co-founder general counsel and policy director for green lighting institute all right gentlemen crosstalk rules in effect that means you can jump in anytime on and if i go to you in new york do the banks still think after the debacle with j.p. morgan chase that they're still too big to fail i thought we got over that in two thousand and eight two thousand and ten well well well some of the banks are too big to fail and that's that's a creation of crony capitalism which is you're right i don't think it's a creation of capitalism but we have we decided after the compassionate crisis of two thousand and eight that we were not going to let these banks fail because it was in our national interest no i disagree with that at the time but we essential

were all told that tarp was needed to prevent a great depression instead tarp funds have made the big banks richer and given them an even greater feeling of invincibility so this happened last bill barofsky special edition. of the great also want to understand just how far right and radical the republican party has become its really official republican party platform more on that in tonight's lone liberal rumble and if you are eating something that could kill you when you want to know before you put in your mouth the g.m.o. industry does not want you know what so what secrets are they hiding explain more insights to take. joining me tonight for a special edition of conversations with a great minds as neil barofsky you know was the former special united states treasury department inspector general charged with overseeing the seven hundred billion dollars tarp bailout prior to coming to washington neil was a former united states assistant attorney for the southern district of new york here and a bachelor's degree in economics from the wharton school of business at the university of pennsylvan

attraction of the bank was that it was highly trustworthy because of the religious affiliation of. owners but going back to william i mean the year zero which is what i was advocating at all this if there was one currency that was a highly politicized centralized construct it's the euro what i'm actually talking is getting government completely out of banking completely out of currencies and moving to a completely voluntary private system so richard do you believe banks can regulate themselves. yes i do i mean come on in line if you think they can do that we have conclusion. but i'm talking about a situation where they wouldn't be bailed out by the government either implicitly or explicitly i mean we've seen them self regulation of past there was highly successful for example with the london stock market and there are plenty of other examples and if you don't behave properly under a self regulation environment you get booted out of the club but unfortunately we have moved to stay regulated admin's when everybody in the club is corrupt. well

they have barely dented the bank. and meanwhile, jpmorgan, the reason upon it wamu was for its vast network across the country and especially on the west coast. wamu a dozen of bridges. they have the branches now. they're doing great, so they got an amazing deal, the deal of the century. >> too big to fail god bigger than we lost a major corporate headquarters. >> what about the auditors, deloitte & touche, what about the board? why didn't they blow the whistle? whited may come forward? >> the auditors have been the most under extreme end of any group they think during the financial crisis and none of them to my knowledge, i could be wrong about this, blew the whistle at wamu. there were along many of them on the board for years and they were very much sold by the amazing performance that kerry killinger delivered in the decades before. so they weren't really asking any tough questions until it was too late and then waited an extraordinarily long time to actually get rid of kerry killen and put a new management when th

never an american bank involved because they are in the pocket of the american bank lobby. so many sins in the world which any commentator including the american bank will tell you sit at home. the american authorities don't go after an american bank. >> the company said that well over 99.9% of the transactions related to u turns complied with the regulation and the value which did not follow the u turn under $14 million compared to the 250 billion alleged. for more we join our panel of experts. welcome to you both. let's just explain, maybe peter you can, what are u turn transactions before we get into anything else. >> as i understand, a bit of a crash course in this, but as i under it, essentially, what this is about is about iranian banks that were not able to deal directly in the u.s., but still needed to process u.s. dollar transactions and, therefore, basically getting other banks to handle those transactions for them and because the u.s. was -- because of sanctions and because of worries about terrorist financing and money laundering and other things the u.s. had set

system has the shape of a functioning banking system but it's mostly fraud if you took the fraud away would there be anything left well there but what there should be. look it's not just investment banks that have manipulated markets through proprietary trading it's retail banks that have time after time after time mis sold systemic play to ordinary people things that they don't want don't understand and don't need you can can't dozens of times that they've done this so what is a bank when it's supposed to be boring isn't it it's not supposed to be kind of highly complicated by the way proprietary trading is tax amounts of the manipulation of markets through a dominant position in information generally derived from conflicts of interests a dominant position in. it's equal science and the dominant position in computer science and look just last week we saw that company use mathematics in communes computer science went wrong it cost them a fortune economy then named knight capital yet well when you talk about proprietary trading as having a dominant position isn't that the same as

the minority. and coming up next banks are game playing roulette a with the global economy is future that's discussing crosstalk with peter lavelle state shoot for that. and. lo and welcome to cross talk on peter a little crony capitalism this is what critics call america's banking system again the world has witnessed the specter of a major financial institution reporting a tremendous loss of years after new financial regulations were designed to avoid such a debacle do the world's biggest banks still believe they're too big to fail. and . start. to cross out the fate of the world's biggest banks i'm joined by andrew schiff in new york he is an investment consultant for euro pacific capital and author of the book how an economy grows and why it crashes in london we go to sam bowman he's head of research at the adam smith institute and in san francisco we have robert good news that he is co-founder general counsel and policy director for green lining institute all right gentlemen crosstalk rules in effect that means you can jump in anytime on and if i go to you in new york do the banks still think afte

force the other banks to follow suit. o they were just the most popular company anywhere. >> you now they were very good at some of the hard things in a financial services acquisition, merging computer systems. they would do it over a weekend. tell us a little bit about that. the customer would not even feel anything monday morning. >> absolutely. so we don't think about these things. we just think of our bank is a bank really but when they buy another bank it's a really complicated and terrifying 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

and they essentially forced the other banks to follow suit. so they were just the most popular company anywhere. >> very good at some of the hard things in the financial-services acquisition merging computer systems. they do it over a weekend. tell us a little bit about that. the customer would not even feel anything monday morning. >> absolutely. you know, we don't think about that. 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

to the entire banking system. to the entire banking system. nt wamu is leading the charge comes with everyone, almost every financial institution was going forward as well and wamu is frequently competing with countrywide to make the most option arm mortgage and sub prime mortgage and all these risky mortgages. >> was there an understanding in the front office of the complexity in which these mortgages were being ratcheted up the food chain? >> there was wamu as an wamu headquarters said please had some understanding as they celebrate to believe they had some understanding. at the ground level, absolutely not. these loan officers frequently nuclear making mortgages to people who had no chance of paying them back at all. but in the back of their heads they been told by headquarters wall street is buying them and wall street will do something with them. so these people who are just normal people at the street, a lot of them don't have degrees, but they're making a ton of money and commission are being told wall street will take these mortgages an

for lending to subprime mortgage buyers you basically cooked the system so banks were lending to the worst he said that that is unless it's one of the it's one of the biggest the biggest kripke ailsa's we've had in the bank in fact in history in recent years robert i believe anybody is promoting the valuation well reply in san francisco analysts samurais sure sam is from london and he's been reading the reactionary republican mantra on this matter the community reinvestment act had nothing to do with predatory lending nothing to do with it however it is true that big banks like country y. game theirs. and claimed that these predatory loans were eligible for the right we're almost out of time i want to give you the last word to educate and to help me what do the banks need to do for us to like them again you got twenty seconds. well i mean i mean you mentioned for apple i mean you have one likes apple but of apple that fails it doesn't bring the rest of the economy down to i mean that's something that i think you know there always and that's the true about banks of

the deposit is won't be at risk the leverage of the banks will be something reasonable and the investment 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 t

inside the bank saw somebody pointing out the fact that bank of america is stealing money so that the words aren't perfect but it gets them actually max when we were pushing the panic button when we were saying there's fraud happening in the system there's manipulation happening in the system there's a fake bubble in the system we're pressing the panic button and here's what was told to the global you know panic button pushers this is a clip at somebody. me from two thousand and seven bertie ahern he was the prime minister of ireland at the time here he is talking about the naysayers those pushing the panic button sitting on the sidelines or on the fence craven and moment is a lost opportunity in fact i don't know how people who engage in that don't commit suicide that's right that was the response at the time that the market fundamentalism this ideology that's pushed by the freaks on these think tanks whether it's measles or adam smith institute they get these folks around the world like bertie ahern who's a market fundamentalists at the time to suggest that for anyone challenging th

but the bank failed. >> we know that much. but you actually, you would people who were not the highrollers, just believed in the seattle thrift. >> that was the sort of misconception about shareholders. yes, they were just a short sellers in the last days. there were a lot of mom-and-pop people in washington state across the country who had invested since they are ipo in the 80s, so that looks like a big sack. >> is a big stack. i'll take of my classes so i can read and figure that out at home. i am not screening the senate dance, so it's going to be on national television. i vastness before. why should mr. killen derby in prison? [applause] >> this is the best question to ask. >> superstack a lot about the regulators, but we haven't talked a lot about the regulation. there have been multiple investigations into wamu as there have been many other financial institutions. and the short answer is that there was no law at the time and still not to be honest if they could hang these guys on. they literally could find nothing illegal

when the central bank chooses to act and redistribute purchasing power is the central bank is actually determining who gets to decide what in the economy when the central bank transfers purchasing out of the banks through quantitative easing. it transfers real power to command the economy. to the financial sector and away from the productive. industries and business people and entrepreneurs and individuals and so as the financial sector of the operates more power it controls move for the economy and so if it is effectively central and the central bank is saying the fine that the sec is it should have more power all right final question john the global economy. if we know that the only outcome is going to be a debt jubilee of some sort because there's no way five hundred trillion and more in debt it's going to be paid off with a global economy of a sixty or seventy trillion g.d.p. output so what's the timing on this and now what will be the winners and losers well there are three of us yet there is the debt to the what we forgive the debt and start again larry's lic the nation weather s

morgan for example but the other banks were in the same situation if you look at the they the overall 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.

closing a foreclosure on on the exact same house because the banks lost track of who actually owns the loan so that the right person has the means to foreclose and this gets back to you know the rule of law and property rights which are hundreds and hundreds of years old and and what some economists say are what what delineates developed nations from from developing nations so. this is really serious stuff that was done and as i guess we're going to talk about the settlement itself was really not even a slap on the wrist and you know want to play this clip from president obama after the settlement came out kind of praising what has what the settlement was all about let's take a listen to what. we have reached a landmark settlement with the nation's largest banks that will speed relief to the hardest hit homeowners and some of the most abusive practices of the mortgage industry and begin to turn the page on an error of recklessness that has left so much damage in its wake well they say of president obama and other politician lauding the settlement as

system is a small banking system and that's the point right supposed to lend out money it's supposed 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 l

a vocal critic of the government and the banking crisis. nightly business report it brought to you by: : >> tom: consumers were holding back on spending and home prices were rising for the second month. home prices in 20 metropolitan areas rose from may according to the schiller home price index double what was expected. it was a mild day for wall street. investors still on standby waiting to hear what happens when the federal reserve ends its two day meeting tomorrow afternoon. >> the dow jones industrial average fell. and the s&p 500 also down 6. >> susie: the fed meeting. our guest tonight does not expect central bank policy makers to announce a big new plan to jump start the economy. the senior adviser at blackrock. >> bob, why don't you think the fed is going to announce a big stimulus program tomorrow? >> i think, susie that stimulus programs of the size qe 1, qe 2, and potentially qe 3 are for emergencies. and while we have a slow economy, it's hardly an emergency like existed before. so i think they're going to need more time to see

economy losing steam let's get to the days capital account. we have a central bank extravaganza of meetings and front page anticipation of action this week the z.b. meets after mario draw got markets really excited saying this last thursday. these c b is ready to do what ever it takes to preserve the euro and believe me it will be enough. now this got speculation swirling about whether the e.c.b. may resume its bond buying program now of course the boom does they poured water on this idea that very next day but according to reports people are expecting or bracing perhaps for some action and on this side of the atlantic the fed is meeting and we've seen a number of reports focused on what the central bank may do in the wake of a lackluster g.d.p. report showing one point five percent annualized growth and also below target inflation numbers so in reading the tea leaves about what the fed could do bloomberg compared july rhetoric from ben bernanke himself to february rhetoric in part to deduce the fed could cut the interest it pays banks for excess reserves take a lis

over the situation but they never solve the problem that these banks don't trust each other so they're going to put up gold which is the only real collateral you can ever put up for any training and that's been true for five thousand years and it also effectively monetizes gold which is something people say can never be done ever again and yet there's a c.m.e. saying gold is money that's what that means and central banks around the world are reversing themselves by though buying gold going forward and you know i'm just waiting for the right moment because of course you referenced j.p. morgan referencing my technology and all their derivatives transactions i have course i've built in a back door into that technology and when the moment is right i'm going to pull the plug in that stocks go to zero people so how do you know stocks go to zero and i can tell you because i'm going to pull the plug on that piece of well of course on this derivatives market the biggest holder of derivatives the biggest wielder is j.p. morgan chase with ninety trillion dollars here's the headline j.p. morgan u.

and i mean, he had a connection to his brother, max, who was the head of the banking, the warburg banking consortium in germany and the netherlands. and so what we have, this was an international group pier really representing international interests. there is anything that was the epitome of the big bad bankers of the world, these were the guys. what happened, they knew that there was going to be some kind of a move to control banking. the new congress is going to pass some kind of law to regulate banking. so instead of being stupid about it they decided to take the lead. they said, we will read the bill we will make sure that it is to our liking, and so that is what it is all about. they went to the island were no one knew, they have a meeting that was in a great deal of secrecy. they denied that they went for many years thereafter. but they actually drafted the poor reserve act on jekyll island in 1910. it took that much time to promote it and get it through congress. >> henry davidson, senior partner. assistant secretary of the treasury, president of national city bank of new york. pa

of the because the federal government got in got in bed with banks first of the federal reserve back second with the f.b.i. see the one hundred thirty s. and lastly with this. range of regulation the last few years and now we have essentially nationalize the banks. actually are flying out of time gentlemen many thanks and i guess today in new york london and in san francisco thanks to our viewers for watching us here to see you next time and remember us talk rules.

the big banks run them. they are the ones that got goldman sachs and all of them in our -- what caused this problem, said all those things overseas, ruining our economy. as we are hearing the same things again. too many regulations on banks. people need to wake up. we do not have enough, or the right ones. every time dodd-frank comes up, they are fighting for it, fighting for their big buddies on wall street. i would not trust wall street or big banks as far as i can throw my neighbor. because of this problem is wall street and the big business. it is not as people out here who lost our jobs in the factories. thank you. guest: he raises an interesting point. republicans did fight against dodd-frank. they phrased it as big government, creating another government agency. congressman, like barney frank, would say the banks had messed up, they needed a new regulatory system. still see that tanner in congress as republicans try to chip away at dodd-frank. host: take as back to when dodd- frank was still being form

towards this harsh over the top military like attack on truly innocent then where are they against the banks because we know and we've catalogued here newspapers around the walls mainstream media is reporting on the thousands and thousands of suicides and death across europe in the united states that additional suicides because of the financial collapse paul moore former top regular internet boss was saying you know go back to world war two you had over seven million people die as a result of the depression of the post crash era he said this is the biggest humanitarian crisis sense world war two and he believes that there will be more than the seven million people perishing as a result of the global financial scandal doggery and the other thing we pointed out on this show a while ago. oh is that the whole new york the fake new york attack against standard chartered was just a shakedown and here in this first headline you see exactly that it was a shakedown london fairings seen surging as finance firms add new york jobs banks insurance and other financial services firms may eliminate a total

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

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 those 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 when 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 shad

markets here and abroad were disappointed that the european bank took no immediate action. on wall street, the dow jones industrial average lost 92 points to close near 12,879. the nasdaq fell ten points to close at 2,909. drought conditions grew even worse in part of the plains states over the last week. a government report today said kansas, missouri, nebraska and oklahoma are especially hard hit. meanwhile, the u.s. house passed a republan drought bill to help livestock producers. democratic minority leader nancy pelosi said it would make more sense to pass a comprehensive, five-year farm bill, as the senate has done. >> make no mistake. we should be voting on a farm bill not a drought bill. i have great sympathy for the needs of our cattlemen and those who are suffering from the drought. but i think that this bill is just another indication of doing something that doesn't meet the needs of the issue that our economy requires. >> sreenivasan: on the republican side, house speaker john boehner said it was today's drought measure, or nothing at all, because the farm bill is