we're talking about the shadow banking system in particular have you ever heard of the shadow banking. it's kind of like an ultra side like a bad man side of the banking system the shadow banking market have you ever heard of it yes what you barely i don't know much. i've heard it on the news and i read in the newspaper once but i'm not too sure it doesn't sound as scary as it is yes it's ok have you ever heard of the shadow banking system ok good for you i haven't heard of it either so i'm kind of in trouble no it's kind of like a compliment to the traditional banking system where you go to j.p. morgan or bank of america you have like a mortgage or a credit card or anything like that you have a credit card ok do you know where the debt on your credit card ends up where does it end up the norwegian pension system would you like to know how to tell me how here's how it would happen first you'd have all these pies and then you'd sell the rights to these pies to other people and those those rights would become notes those notes would become tradeable entities and then j.p. morgan would t

it was a free choice of the american population to perhaps make a stand against the too big to fail banks. the banking systemas it is but no no no it is the banks who are saying it's too difficult to make money on low income families the cost outweighs the return on them nessa status the v.p. of american bankers association the lobby group for these bankers she says you can't take a losing account and make it up in bulk you're not going to spend money to lose money except at the banking industry has used this model of losing money on every trade and making it up on both to finance the dot com bubble the housing bubble the crash of one nine hundred eighty seven this is their modus operandi the mouse so consumer products and also products so they lose money on every single trade no it is actually holding the hedge is that they say they're hedging that's why they're constantly going to the government for bailouts to cover the money that they lose by selling things at a loss every single time they sell something they lose money on retail customers because they don't need their deposits or you know they would be

is still with us today it may have been four years ago but it's left a massive hangover in the banking system still being felt by taxpayers many americans and also shareholders and some of these banks and employees in the form of layoffs and it comes to us today a reminder in the form in evidence in news revolving around this bank bank of america so the bank announced it will pay shareholders two point four billion dollars as part of a settlement this is over the acquisition of merrill lynch back in two thousand and eight the evidence suggests that bank of america knew that it was taking on greater losses than it led on and inform shareholders that now the bank admitted no wrongdoing i should mention but before we get into the settlement let's look back at what was in tailed in this deal and to do that we have a reporter who was covering it then and she's covering the financial system now we spoke with heidi moore she is the new york bureau chief for marketplace also there wall street correspondent take a look. looking at what you are writing then there is a headline in the wall street journa

first, the banking system. we havave the most famous and important big bankining sysm andd we had this award in 08 during the crisis, our banking system was the safest t one. and we have an award about that. and welso h have $120 billion -- in these -- invested in these banks because it is safe.. around two times the gdp. >> what i was in beruit consumer cononfidence is alive and well. even irecession -- growth the followining year was.2% in beruit. something i just learned whenn i vited you -- i did not know how much the u.s. leads other exporter as exported to lebabanon. the last stisticscs shows we are more than twice the sisize of your next largest, china. but the gap is closing at american exporterso not move toto continue to take advantage of the market. >> yes, our market i very --e have many opportunities. yes, we have thehe problems of syria and the problems s of the tourism, which is ththe main issue for r the lebanese. they benefit from tourirism. but at the same time, we benefit also from the banking

max kaiser now that the global banking system is entering is endgame of collapse states are going to london do enter the belly of the beast as it were we want front row seats as london the epicenter of global banking for finally ultimately collapses under the weight of its own fraud states there are max that's right we're heading into london where we'll try out some new ideas will put max keiser in the street where he might encounter some of these bank stars well have some more in studio guess we're going to try some new stuff with william bonzai seven all new studio but of course we will bring some protection from the london disease well we're actually we're launching a new cell retires or in a couple of weeks as well so that'll be great to fight the bank's jurors face to face so this london disease features in this first headline max opinion bailed out banks facilitate twenty one trillion dollars of offshore cash hoard so this is investigative economist james henry in a report price of offshore revisited and this came out in july but it's really important to us as we head in to lond

well the word of the day is banks the cocher see and that is a piece of art here by the very suspicious william bonds i seven as you see on the left that's a banking system gorging itself on a giant meal served by the government butler on the right is the people eating a bone and wearing very tattered clothing thanks to talk back staccato but you know you go to the hospital and you get infected by a back stock of virus comes into your trousers and works its way up through the are of various organs and causes you to want to for some reason give benefit of the doubt to various banks that doctors working around the world operating various corporations organizations and global institutions that are in the business oh and to global economy for their own personal gain leaving him with nothing but austerity and join the american dream oh it's awful oh if only i can get. by the banks to close the cockpit virus. well it's very important that one understands however that is only a select group of people who actually are fed by the government butler you know in a way that they are not suspicious because here is a headline max where a woman confused herself for bank

growth is the banking system. your take on why you were actually seeing a bit of a boom happening that others are not really talking about, and how does the banking system play into that? >> i should be really clear. what i said in that piece was that once the head wind emanating from 2008 have subsided, and i thought that would take another three to four years, not right now, but three to four years, i think we could surprise on the up side. in terms of banking, i think the banking industry has made a much faster recovery than anyone could have imagined. it really has turned the corner in terms of the earlier, very serious concerns about capital liquidity. i think the banking system has surprised everybody by how quickly its rebuilt its capital and liquidity. i think those concerns so prevalent a year and a half ago are really behind it. now the issue surrounds earnings. fundamentally, i think the banking system has recovered faster than people thought it would. lending levels are recovering faster than people tho

this is just money that's parked in various accounts of the visible system is part of what they call the shadow banking system the dark matter and dark energy of the global financial system it's where the global multi hundred trillion. dollar drug money is active as well but again it's all roads lead to london to the crossroads this is what the next bit here says is that most of the money is actually held in the the center of this offshore world is actually the u.k. and that includes jersey isle of man cayman islands british virgin island of course the cayman islands as the favorite of perhaps the next president of the united states mitt romney and the article says quote the u.k. is arguably the center of the offshore world now it says a lot of this facilitation of this debt to these offshore tax haven is helped by the too big to fail banks they're the ones that move this money for the likes of mitt romney it's the too big to fail banks that were bailed out but the article calls them a unique thing here i think it says that they're so too big to fail that they're actually too big to be true. right this

the pboc pumped $58 billion, a record amount into the banking system this week. broad based gains in financial, resources and developers. shares in hong kong followed to he said well in the green with chinese energy majors and banks leading the gains. elsewhere the nikkei also finished higher helped by utilities and financials. but sharp shares slipped nearly 4% despite reports on a financial life line from its major lender. some units tanked following the parent company bankruptcy filing. bank and miners helped the australian markets end a three day losing streak closing higher by half a%. and the sensex trading along the flat line at the moment. back to you. >> thanks very much. pippa, it's almost a battle of markets this morning between spain and china, between kind of the macro europe uncertainties we were just talking about in the sense that policymakers whether do more. but there's the sense that it's just not enough. >> we are seeing in emerging markets, workers are saying i need to get paid a lot more. and if you don't pay me more, i'm going to protest on

all right so before the break we covered bank of america but what about the financial crisis legacy how much of that is being felt more broadly in the banking system and how much has to be worked out still in the form of litigation or layoffs more with heidi moore marketplace wall street correspondent and new york bureau chief. so much i mean if you look at it i mean you can measure the losses there or the actual lawsuits or class action lawsuits and the potential charges they have to take on those that the banks have to take on those but really look at how much they've lost in their stock price look at how much they've lost in their book value when banks have lost so much value that sandy weill the father of big banks is saying they're not making enough money to survive anymore let's break them up then you know something has really gone wrong in the industry and the question is do they recognize it right i mean this is the big debate do people within the industry realize that it really does have to change or do they think that right now it's just kind of a cyclical moment things aren't so great and they'll be able to go back to making money in th

will it be ratified and active in providing direct support to the banking system in a country like spain? although the attention has been on the european central bank and what it might not do, the preconditions are the critical issue. the quality of the program, the ability to provide direct support to banks. >> what about the scenario is bought -- with deposits in spain? >> it is sort of an important issue that if it continues will be something that can drive this. i think the point that john made are right and one thing he did not mention was we have that european banking unit coming at. essentially, if they can construct this banking union, that would allow you to do deposit insurance, those things are fundamentally uncertain. there is an awful lot of moving pieces here that have to go forward. i would come back to the notion and the sense of what has changed over the last month. to me, the biggest change is the attitude -- >> the question you have to ask yourself is what is that euro about? is a social decision or an economic decision? if it's a social decision, it says that politici

why you paint twenty five basis points on bank process when the fed when you're worried about lending by the banks or the reason is to give the banking system a revenue flow with public expense with us that's the reason so so how can we how can we do this and what do you advocate do you advocate and in the fed tomorrow and do you think that that would cause kind of a massive depression where the state could potentially get more control seize more control i mean how can we wean ourselves off of this very i mean just on yeah i have no perfect foresight here but you know the thing is the real working under the current system is an eternity of stagnation i mean the us i mean we're suffering terribly right now i mean so if we if we bring and young people are not getting jobs and we're seeing middle class incomes being pummelled we can't save money anymore and make money in the old fashioned way i mean this is what central banking as done to us know we don't need a sense of the system a central bank in i mean a nineteenth century system of the style system would be much better but even there's problems there i mean you know bipedalism there are l

this is this is three card monte so that's about as good as his word it's not the euro it's the whole banking system and the banking system is collapsing worldwide and so the euro is just a part of it will the euros stay together if it's if the there is there is no telling what they may pull out but let's understand the g twenty just was going to have this grand meeting just got back from mexico and all these brilliant leaders were going to put their minds together and come up with a solution and they don't have any answers and the reason they don't have any answers is there's no solving it so what did they do well you saw yesterday the federal reserve went back into operations was and then read today's headline central banks ease credit as european leaders meet this step friday just as european leaders in rome are preparing to seek agreement on ways to pull europe out of its crippling debt crisis gives banks more possibility to get ready cash let's put that in layman's language it gives the banks the right to rate jump that they have and all this garbage that's weighing them down as credit worthy a

it still has to go through the bank system. >> just interesting on the one hand they're cracking down on banks with so many different kinds of regulations and trying to force them into different businesses and out of others while doing things on the monetary side. now trying to funnel capital through the banking system. and if they're going through the existing banking system, fine. but if they're doing anything that would expose them more correct corre directly to the risk -- >> i think that may be the problem. now, can cloud computing dissolve borders? beccy meehan spoke to howard and started by asking him how remote data storage can help overcome challenges for companies doing business abroad. >> this allows customers to build their own private clouds so they can continue to manage their own infrastructure inside their data center, but provide to their business as a service, but also obtain it from public clouds and service providers. so it dissolves some of the borders from a technical point of view and allows that service to get delivered. but on top of that then, there are shall

wealth is being transferred from them to the government to cover up the fraudulent schemes of the banking system so here's what the new york times concludes of course any economic policy will produce winners and losers and it seems unlikely that policymakers are deliberately sacrificing retirees either to stimulate the economy or to grind down government debt more likely older americans and other savers are just unintended casualties like the new york times they would volunteer to be a guard at a concentration camp that's the mentality we're talking about they would be like well who saw a poll and covering the expansion of the nazi empire we know who you know there's winners and losers poland was a loser you know the blitzkrieg oh you know it happens you know it we could do a thing about it you know there are times as a shameless a shill for financial terrorism and. who's over there in the new york times talking paul krugman the keynesian who's justifying more central bank oppressions it's disgusting well so here we have presented this story here that savers have lost their telling you the inter

the bank reports a loss for the quarter. also in banking today, a top british regulator thinks the bank to bank interest rate system known as libor can be fixed. libor interest rates are used as benchmarks for trillions of dollars in loans, including auto loans and home equity lines. at least a dozen banks are under investigation for possibly manipulating the rates. among the recommendations from the u.k. regulator: direct government oversight of officials in charge of setting the rates. >> tom: this week we've been taking you to trading pits from new york to chicago hearing what traders say about the upcoming presidential ection. tonight, it's the livestock futures pit in chicago. here's diane eastabrook. >> reporter: the summer drought has unleashed a bear market for livestock. cattle and hog prices have tanked as farmers slaughter herds to avoid high feed prices. >> we certainly need a rally. >> reporter: livestock trader tres knippa has been keeping a closer eye on cattle prices than on the presidential election. knippa doesn't see huge policy changes coming out of washington from either candidate and he's not sure that

>> i think the unintended consequence, to me that is that the banking system is still weak. the regulatory agencies and the bank examiners are very concerned with things taking on risks. if banks don't take on risks and get the money flowing to businesses and other types of investments, then it really will not have an impact. the fed could wait over 28. the fed has over done things before. unless the banking system is really active here and getting out funds to increase investments and to have businesses make decisions that will increase employment, the fed could find itself in this for a long time. not just do the end of this year, but to the end of next year. liz: gerald, thank you very much. again, all you have to do is look at this bottom ticker here and you can see the market skyrocketing. here at hewlett-packard, the stock was down marginally, now it is up more than 1.5 were sent. let's just talk for one second about this. you are making money if you are in stocks today. overseas, big news, just about 36 hours after a horrible attack on that u.s. embassy in libya, there