the board and morgan is going on the off and they are already up for enforcement action against the bank. resulting from alleged money laundering violations and risk management issues from the london whale debacle in response to j.p. morgan is diverting hundreds of people to its oversight and control group and cutting costs from several new programs that were just wondering and mark your calendar on the day that it happens exactly when you were hired shadow regulator promissory financial group to rubber stamp its initiatives and finally according to the wall street journal the world is running out of u.s. treasury bonds. you might think that's an extraordinary claim considering the trillion dollar deficit but the forty five billion dollars per month of purchases by the fed are removing a key source of quadrille for the shadow banking 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 sipho

the banks down at the banks would not have a problem if the other banks of the 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 a whatever's up there doing all that a 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 capital case the george i want to go here i want to give george the last word he says 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 aren't making money twice over and this mo

and the regional banks and a lot of themare crying you know they're over regulated and they're not they're not subject to the same rules that the rest of the banking system and exactly and they're still under fire and they're going to be under pressure so i guess we'll have to leave it at that for the things that i mean i do. today we looked at failures fixes and milestones here on prime interest dodd frank might be getting repealed one club the page at a time but brown veterans got the next big thing according to senator brown who spoke with tom hartman who gave us the big picture new banking regulation and it got a little crowded as we talked to felt about new business funding options options the as the see has yet to act on then just gave us the deeds on the youngest workers who can't seem to find jobs and we. pete. incarnation of windows only to find where we can find much of anything if the next debt ceiling drama turns out to be more than kabuki and john boehner will make uncle sam paper holders whole and good news if

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

would be would go to the media who would then advertise the fact that the banks you know could be in a lot of trouble that all these mortgages can be attacked and they want to keep that little secret you know they want the only people to know about the fact that you can potentially wipe the mortgage out or the foreclosure defense attorneys that's why they settle in so many. instances because they just don't want to court precedent and they don't want negative media coverage of such an event well let's try to expose that right now is very interesting that the banks don't want to set a precedent and they don't want people to know that their mortgages can be wiped out if they made a mistake so how many faulty mortgages are how many faulty foreclosures do you think are out there and they could potentially be in this category you know it's interesting that you asked that i saw a report by the office of the assessor or recorder in san francisco he said that ninety nine percent of all foreclosures have at least one year regularity and eighty four percent of those are faulty or illegal now i

that everybody went to the bank at the same time how to run on the bank and 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 see well you wouldn't you wouldn't need banks at that point i mean you would you have a system probably more like i understand the middle eastern system to be were you know interest is not allowed to be charged in banks. do all the 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 he's probably not going along. 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. 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 bro

bank ya. it's part of the recapitalization of the bank. knew they would face a significant haircut, around 40%. but they lost much more in the end because yesterday the share price of bankia was down 52%. that is not authorized under the spanish market route. that is the reason why the market regulator has decided to look closely at the case. >> thanks for that. >>> meanwhile, spanish banks might have to set aside $10 billion in extra provisions to cut bad loans. the new round of provisions adds pressure on the country's weaker lenders, which may be forced to raise capital through asset sales and tap the national revenue funds. >>> pretty volatile session for the nikkei today, up 3%, down 3%, finally closing up nearly 1% in the last seven days. we've seen this sort of activity. down 2.8 pefrs. of course, it doesn't take that 7% fall yesterday. let's get more. joining us is our nikkei corresponde correspondent. toshiko. >> hi. japanese government bond yields shot past 1% yesterday and the country's top leaders are trying to defend their eco

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 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 if but when there's 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 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

the index in free fall. and bankker ben broadbent tells this program that qe is still effective for the united kingdom. ♪ [ agent smith ] i've found software that intrigues me. it appears it's an agent of good. ♪ [ agent smith ] ge software connects patients to nurses to the right machines while dramatically reducing waiting time. [ telephone ringing ] now a waiting room is just a room. [ static warbles ] >>> ralph lauren reports fiscal fourth quarter results before the opening bell today. the retailer is forecast to earn $1.30 a share on revenue of $1.7 billion. thanks very much indeed for joining us. look, what are your expectations for ralph lauren and what are they -- how are they performing against the competition? >> first of all, greetings from jerusalem. i would say my expectations for ralph lauren continue to be bullish. we think they're performing terrifically against competition around the world. it's a small business in china so there versus many other luxury and upscale brands are larger, they're perform

the banks took a lot of heat, it was justified, but since then, the industry has taken major steps tos. i talked about that yesterday in this segment. working with tough eer regulations, raising capital. and a better system of checks and balances. but then banks continue to get beaten up by washington, where they push for hasher regulation remaining in full force. i'm not comparing the errors exposed in washington to what happened in the financial crisis, but what i am saying is that trust is gone on so many fronts. trust in our financial system, trust in our ceos, trust in government, trust in our leadership. the last thing we need now to get that trust back is new barriers to transparency and covert operations to take down groups just because you do not agree with them. no, that will not get trust back. that does it for "closing bell." have a great weekend, everybody. see you on monday. "fast money" begins right now. >>> live from the nasdaq market site in new york city's times square, i'm melissa lee. party like it's 1995. how this rally mirrors one of the most distinctive years in

the risk. that asset. that bank's books haven't changed they just been turned into dollars or liquefied so if you look at a chart the only way that this money is going to flood the money supply and devalue the currency is if people take out loans and that the presumption that if the reserves go up then. the banks can create more loans but they haven't and actually the reserves have nothing to do with the loans they create really so if you look at the chart the amount of lending that's going on right now is the same as in two thousand and eight it hasn't gone up and that means there's not more money in in the money supply so you might ask why is the fed doing this first it's to help the governments because it allows the government to borrow essentially interest free from their own central bank since since the federal reserve rebates interest to the to the government and second supposedly it helps the long term interest rates so it helps homebuyers with their interest rates because now you have the federal reserve compe

even from the bundes bank, the ecb and more importantly from the bundes bank saying effectively that those right for monetary policy to be expansive. and the ecb can take further action. meanwhile, jpmorgan is putting out the help wanted signs. the bank is looking for more directors to serve on its risk committee. this is amid calls by changes for its corporate governs. it could include marketing experts. separately, jpmorgan says it received a wells notice from the federal regulatory commission in march. this means it could face an enforcement action over bidding practices in certain markets. the fdrc had found evidence the bank manipulated trading in the california and michigan electricity markets. jpmorgan in frankfurt just offer marginally. >>> and microsoft has named amy hood as its new cfo. she's currently the head of finance for the company's office division. she'll replace peter cline who announced his departure last month. she's the first woman to hold the cfo job. microsoft acquisition ves skyped and business networking company yammer. her appointment is seen as a surprise.

the. banking system is head of the f.b.i. see as a long time practitioner of policy in washington then all the rest of these wall street characters combined and what happens that's why i call it a coup d'etat she is ignored she is told to keep quiet while the interlopers from wall street do the damage that they did. and i would i would agree that she will bear has provided great leadership with her work at the f.b.i. see and i want to get your take on the younger generation which is inheriting a very rough economic future and i don't know if may or may not be available to them yet they're paying into them they're inheriting unsustainable amounts of debt including federal debt and personal that there is that over a trillion dollars in outstanding fix-it loan debt and unemployment among young people as high as twenty seven percent you know what would be your advice to young people who have and are struggling to find in employment well they should be appalled by what their current generation is done we have had a party for the l

and the bank of japan to do. because of course mrs west has seen this movie before it was called the great leap forward and it brought about what is known as the three years of natural disasters or if you prefer the three years of difficulty in which between fifteen million and forty three million chinese died during the great famine brought about partly by central planning gone completely freaked out amok mrs wang no. is this that's why she's buying gold stacy yes she is and of course she's seen the central planning and how it goes because only three years of disaster of natural disaster we have this is our fourth or fifth year of manmade disaster. you know the great leap forward mao's they don't lead the campaign based on the theory of productive forces and he intensified it after being informed of the impending disaster from grain shortages so he saw that it was addict it was making it worse and he doubled down just like what we see across europe across america certainly in japan they're doubling down on a disa

what more would you like to see from the banks? >> i think that we need to break up the big banks. > and why are they too big? and why as a former director of the seiu private equity project would you know what's right for the banks? >> why do you mean, why would i know -- that's clearly -- >> why would you know -- >> what kind of question -- >> -- for you to make that statement? >> because i live in a country, just like you do, that has experienced a financial crisis that grew out of the hubris and the greed and the size of the big banks. because like every american, i can read the newspaper and i can talk to people who haved th edh their drives destroyed by banks that are so big -- everybody talks about regulation, that the capture is so great, that we don't have the regulation we need. we don't have the supervision of the banks we need. so when you say, how come banks are too big, they're too big because they're too big to fail. they're too big because the attorney general of the united states said we didn't investigate them because we were worried that it would be bad for the ec

member says the bank could introduce negative bank rates. ve 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. >> announ

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 value. u.s 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 and 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

metro system put money that prepaid prepaid money on deposit with the scandinavian bank and the scandinavian bank entered into these comp. plex repo transactions with a g when it blew up the d.c. metro system could not get their money back so all i'm saying is if you put money into the betting system like the new york racing association it's very possible that that money is becoming part of the shadow banking system but it is too right that horseracing is the only on line betting only legal online betting i mean there's still some offshore stuff that you can do and you know if you happen to know a bookie that's all done by telephone and words and whatnot but you know i think we have our own horse race that we've been talking here about we've come up with a couple of names so we're going to have the bankers. first up is bernanke you last stand ok bernanke he's last in how many have compared this smallish but tolerable thoroughbred to the horse that cited him irrational exuberance but there are a few critical difference between the two bernanke is less standard b.l.s. has added a number of pay

well what it says about the banking industry is the part that actually the high watermark for banking was two thousand and seven two thousand and eight the problem is that banks are a six seven hundred year old institution affectively finding planck's the double entry bookkeeping in general in the middle ages another days they're just out of did the internet is effectively doing their business model in peer to peer lending is growing exponentially and ultimately banks are horribly hideously expensive and inefficient at what they do and when we find in the internet age there is a business that's inefficient and expensive to operate it then ultimately it gets destroyed by digital competition so does that mean that as well as the banking industry tries to move away from the brick and mortar branches we're going to see more job cuts going forward oh absolutely i mean the problem at the moment is i mean look at the u.k. i mean they've just announced the better part of two hundred thousand job cuts will it affect service within banks well probably not because actually pretty frank service i

metro system put money that prepaid prepaid money on deposit with the scandinavian bank and the scandinavian bank entered into these complex repo transactions with a g when it blew up the d.c. metro system could not get their money back so all i'm saying is if you put money into the betting system like the new york racing association it's very possible that that money is becoming part of the shadow banking system but it is too right that horseracing is the only on line betting only legal online betting i mean there's still some offshore stuff that you can do and you know if you happen to know a bookie that's all done by telephone and words and whatnot but you know i think we have our own horse race that we've been talking here about and we've come up with a couple of name. so we're going to have the bankers. first up is bernanke you last stand ok burnett accused last in now many have compared this smallish but tolerable thoroughbred to the horse that suffered him irrational exuberance a few critical difference between the two bernanke is less standard b.l.s. has added a number of payrolls to

the banks are helping to lead this rally. morgan stanley ceo james gorman facing scrutiny today at his shareholder meeting. and one week from today is the big one. that huge vote that potentially could separate for jamie dimon the chairman and ceo-ship there at jpmorgan chase. >> and what the bank is doing leading up to that too. >>> and the white house battling scandal politics. eric holder ordering an investigation into whether criminal activity took place at the irs. there's also the scandals involving benghazi and seizing phone records of reporters, namely the associated press. it seems the list goes on. but if all of this is consuming washington, is there any oxygen left for things like tax reform and immigration legislation? is that good or bad for business? a live report on all of that from washington. >> feels like election year. >>> here's how we stand. it was off to the races from the get-go this morning. we've hovered near these highs of the day for much of the afternoon. dow was up a hundred points a to the high of

it's not the italian banks and it's not the spanish banks.strian banks, banks in lex yum bourg. they are not going to take that money after deposit in their central banks and put it into the periphery. but the interesting dynamic is furs a german investor and they take the overnight bond rate negative, bunds go lower and you're searching for yields so you'll be pushed more into the peripheral space. so it will have some impact on asset classes. >> david owen, chief economist, thank you. daniel sticks around for little bit more. >>> meanwhile, allianz has reported a 24% jump in first-quarter net profit, boosted by pretty performance in asset management units as well as lower costs with influensura claims. it has its highly quarterly revenue on report, numbers largely in line with a preliminary report released last week. let's just check on the stock price, barely moved because we had that preliminary report. anyway, joining us for more, first on cnbc, is the cfo of allianz, dieter wemmer. thanks for joining us. how could you categorize this? >

paul krugman by supporting the bank of england in the federal reserve bank's ultra low interest rates is supporting wal-mart's ability to squeeze the economy to the point where factory workers have to die so that big fat obese american travel to get a deal on a t. shirt so first of all let's look at this image of the girl being pulled from the factory rubble seventeen days later now we'll cut to the freedom tower the spire is put up there now the desk there almost the equivalent a thousand people died in bangladesh this is the question about two thousand in america you know three thousand died when the world trade center collapsed but here you have consumers who don't care. about these dead bangladeshis you had george bush stand on the pile of rubble at the bottom of the tower saying go shopping go cause these deaths there in bangladesh essentially and americans ten twelve years later are still demanding people pay for those people that died trillions and trillions and trillions and trillions of dollars have been spent because the world trade centers came down but the number of civili

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 at 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 social banks are going to have to declare bankruptcy so gold will keep going our silver will keep going iron of course bitcoin will then break down 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 game with a g

>> 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?

>> yes. >> smith: and you saw the instructions coming down from the banks? > yes. >> smith: what was the highest defect rate you ever saw on a job? >> oh, gosh. we had a job that was, like, 50%. but then the word came down, everything got renegotiated and redone... >> smith: in other words, you would come into a job, you'd find 50% of the loans were defective, but then the standards would be loosened so that you could qualify those loans... >> right. >> and mark them as not defective? >> right. >> smith: isn't that fraudulent? >> yes. >> smith: is this something you think is important for the government now to be prosecuting? the kind of fraud that you saw? >> yeah. i mean, it's... if it's still within the statute of limitations. >> smith: the department of justice says that it's very hard to prosecute these kinds of crimes, because you have to prove criminal intent. >> yes, sir. >> smith: how do you respond to that? >> i think if i was sitting on the jury and i saw this information, that i could pretty well assure myself that there'd been criminal intent. >>

first thing you want to do is deal with the bank. if they are not able to make the loan by themselves, then go to our website, which is www. sba.gov, and look for the local page to see the local san francisco financing sources. but before you do that, the takeaway message here is that before you go to a bank, make sure you are cleared to do that. you do not want to go to a bank looking for financing for your business and ask them a question that will immediately give them a sense that you are not ready. you go to a bank and say, "how much can i borrow?" they will tell you, "i do not know, but probably not from us." you need to know exactly what you're looking for, how you are going to use the money, and how you will be paid the bank. part of the process is make sure you are prepared. the first thing you need to do is take a advantage of the resources that can help you develop your business plan and really be prepared to go to a lender. being able to answer the questions you know that they will be asking is part of what we do as well.

even according to the bank of japan's calculation, a one percentage point rise on the yields on government bonds is going to translate into mark to market losses equivalent to roughly about 10% of tier one ratio for big banks, 20% for regional banks and even as we have been emotionally getting hyped up about the effects of abe-nomics, the data has been patchy. the jury has been out there as to whether abe-nomic sess working. we haven't seen that come through. return on equity, mizuho for one is still in the single digits and we are in a transitional environment. japan is still the world's fastest growing society, as well. so the jury is out there and how much abe-nomics will work, that's going to be interesting. very quickly, dollar/yen, we're getting close to 100.5. more downside coming from greater china. the speculation is out there that the official china pmi released this saturday is skirting around the boom or bust level of 500. probably goes to show why we're seeing that rally in base metals. >> chloe, thank you for joining us. a lot going on. joining us now is nicholas smith from c