tv [untitled] December 16, 2011 8:31pm-9:01pm EST
max kaiser this is the kaiser report yeah time magazine finally recognizing what everybody else already knows there's a global insurrection against bragger occupation stacy ever tell us more well max in order to talk about this story truck really i must have a little bit of this case is too young to suit lewd now this is a plainclothes sort of can here because of course you can walk around new york city holding a can of kaiser's jet blue suit so take a look at the artwork here but the real cam looks like well a lot of people don't realize it's actually alphabet soup so you can spell out david cameron as a schmuck why are enjoying some hearty broth well it is the favorite super of the s.l.a. i don't know if their photo made it into their actual time magazine but of course they are part of the spirit of what time's person of the year the protester from
the arab spring to athens from occupy wall street to moscow a year after cheese and fruit vendor set himself ablaze this set to spread across the middle east to europe in the us reshaping global politics in redefining people power yes people power is on the march i think the arc of this whole movement is quite interesting it goes back really ten years twelve years to the anti-globalization movement which kind of petered out for lack of vision but then it was resurrected as this global insurrection against banker occupation or occupy wall street or the uprisings all across the middle east and north africa next year in two thousand and twelve we're going to see the economies of scale can again so all these millions tens of millions or hundreds of millions of people around the world to realize that collectively they are purchasing power if channeled correctly can topple these corporate and banker occupying forces don't you think yes it. max
you know the interesting thing watching this time new story being covered here in the u.s. is that all the commentators several of them actually came up to the point where they couldn't mention the name and they couldn't they talked about the dictators that were overthrown in the middle east and then they got to the occupy wall street and they just couldn't say the name of what it was they couldn't name the culprit because it's like they are too scared of it really happening in their own country right the common theme throughout these countries are wall street and city of london banks third of course you don't hear about it in the city of london or in america because this is not the areas that provide safe harbor for these financial terrorists so time magazine of course they want to get the commercial optic from spreading them eamonn of global insurrection against banker occupation they want to sell some magazines but they don't have the journalistic integrity to point the
finger and say it's all about goldman j.p. morgan barclays h.s.b.c. the true financial terrorists that are people are finding finally figuring out must come down well of course they have some photos of various protesters around the world and they also have that clenched fist image but they also look at the yellow dog that we call them in athens so they are inviting people out there to send me pictures of your because i have one carry pierced giago harry so we had to have these you know does that little mask us as we storm the banister barricades or fraud yes well that's a fantastic idea everyone must have their own dog yes well actually my mind they don't carry a sort of a sock puppet called design and look at he didn't do it this he's a pretty brutal giago dog in fact. in the next headline that's why i had to remove harry from. the root core sign new and used client funds says duffy
so m.f. global holdings ltd chief executive officer john chorus line knew that the company made a loan out of segregated customer accounts before it went bankrupt c.m.e. group incorporated chairman terence duffy told the senate does the whose company is and global regulator a principal exchange is the one and said yes well it's becoming clear stacey herbert is that once anyone puts money into a bank they no longer have the rights to that money it's now the right of the bank to control any money in the bank all of the protections for anyone who's putting money in any of these banks or brokerage firms are now gone they're a blitter rated thanks to all the deregulation of the last ten years orchestrated by criminals like john corazon but max the important bit about this testimony from duffy is that john corey's line had only testify earlier that day
that he knew nothing about global taking segregated funds so they caught him lying under oath now typical a this would mean that there is some kind of penalties but since this is a wall street crime look for the supreme court to suddenly convene and rewrite all of the criminal code pertaining to this case making this type of lying under all of the legal for the benefit of national security you know the trustee james kids is also quoted in this article because he told the senate i don't think we're magically going to come to a heart of gold at the end of the rainbow whether or not they'll ever find the client funds missing one point two billion he said or more he did say that both the commodities exchange act and the securities investor protection act give a priority to customers and if there is a shortfall there are provisions that both. statutes that say other assets ought to
be reached to cover those shortfalls he added however max and this is the important bit that other parties may see that issue as a matter of conflict i j.p. morgan and other creditors right this is the amazing thing of going back to the commodity futures modernization act of two thousand where they legalized derivative trading before that it was considered a form of gambling but they legalized derivatives trading it also gave banks that have huge derivatives positions like j.p. morgan the ability to claim that those derivatives positions are existing outside or above any existing laws that would protect any current accounts by any customers so derivatives the things that have destroyed the global economy are now preserved at the expense of all customer accounts and so if the notional value of derivatives is ten times bigger than the global g.d.p. paying then every single customer account in every single bank account the world is
really nothing more than a blank piece of paper with a bunch of symbols on it but it's not your money or your securities no no no those are now on the ownership of banks like j.p. morgan who have no compunction about simply stealing it for national security well speaking of a stealing funds for national security purposes and global cash. presumed its own so it can pay the bankruptcy trustees so here you have james good j.p. morgan negotiating basically to keep the twenty five point three million dollars in cash held at j.p. morgan which is presumed to be m.f. global's but j.p. morgan apparently credit deal with the trustee saying that they could have to catch it and if global granted j.p. morgan alina all of the company's assets try so j.p. morgan is cutting deals outside of the legal framework what's also amazing is that the. the silver that was in the m.f.
global collectively all their one hundred forty thousand pounds that the quantity of silver disappeared from all those accounts but now magically has appeared on j.p. morgan's balance sheet as you know there are massively short somewhere they've been scrambling for a way to cover their short position rumor has it that just a few weeks ago was about to be busted and j.p. morgan technically have to go bankrupt so what do they do to prevent going bankrupt i've always said j.p. morgan is like enron one day to wake up it'll be worth zero in order to stop that from happening two weeks ago as it almost did two weeks ago zero j.p. morgan stock price they wanted to m.f. global accounts one hundred forty thousand of them they took to so many other commodities and just stole them that's their that's their response to their criminality and why they got away with it for national security there was a brief headline that they might possibly face consequences i don't think it's real but this is from zero hedge j.p. morgan stop breaks down a news company's role as this little lender to be productive so they post a picture of a bloomberg headline morgan actions as this lender likely to be proof says
liquidator and if you see this there's a nice chart of the players and j.p. morgan share price but the liquidator of the endless little brokerage said that certain actions of j.p. morgan the lender to the brokers parents are likely to be the subject of investigation but max if you look at the stock chart it's felt less than three percent whereas goldman sachs fell over three percent at the same time so i think it's more an issue it's just the global financial system melting down not that there's ever going to be any justice for jamie diamond or any of their role and global fraud well remember what happened over enron a few people in the jail one of the i think was the chairman blows brains out the so we have something to hope for let me just say that they were really hypothecation and hypothecation is going to be as important going forward as they were special purpose entities account if remember and ron had to oversee. seven
hundred special purpose entities accounted for they had all the dead bodies of their balance sheet we don't hear about those anymore now we're about hypothecation and re apothecary of the infinite hypothecation through the bowels of the regulatory nonexistent city of london of course all leading to a j. p. morgan stock price of zero and then if there's any justice there's like jeff skilling going to jail and the chairman a blow his brains out now speaking of bankers max i have this headline here beggars cost each one of us eight pounds forty for every pound they produce studies show so beggars can to day be exposed as a huge drain on society costing the rest of us eight pounds forty for every pound they produce a study by say the tenth the new economics foundation the average banker destroyed forty two million pounds a year in value well creating just five million pounds well absolutely versus the biggest revelation that must bring shouted from rooftop to rooftop you
know it cost servant eight times more in liabilities to keep these exotic pet banking fraudsters alive than any benefits accrued there all of not only don't they don't add any value and no jobs and no germain g.d.p. growth they suck it out of the economy at a ratio of seven to eight to one what do you call that's a financial cancer that's not an industry well and this is why you have the global insurrection against banker occupation because in the mainstream media you just see the propaganda that enables these baxters so the media will tell the population that oh this bank deserves a million pound bonus because he treated five million pounds and wealth so he's just taking a share of his contribution to society they fail to mention that in making that five million pounds of value q destroyed forty two million pounds as a. never talk about the externalities they never talk about the externalities and
this is what's causing the austerity to be imposed in places like the u.k. which i just saw in the u.k. people are now homeless rate is skyrocketing as well as the jobless rates all thanks to cameron at his club del bodies in the city of london people are dying in the streets now that's the real cost big for bailing out real kleptomaniacs stacey eric thanks so much for being on the kaiser report thank you all right don't go away much more coming your way so stay right there.
machine on the dot com. hi i'm max kaiser welcome back to the uk as a report time now to go to new york and speak with aaliyah mcgrath good men author of the siloam the renegades who hijacked the world oil market les is also a journalist formerly with the wall street journal welcome back to the kaiser report welcome back happy holidays thanks so much now lead time magazine has just named the protester the person of the air the high price of oil of course contributed to global uprisings oil is still at one hundred dollars per barrel opec says it's so high due to speculators they. say it's due to supply constraints so who is right in this debate that the speculators driving the price
up or are we running out of oil well i think that i.e. a they don't really have. an axe to grind or an eye to save as they say in the sense that they're just looking at what the fundamental thing to be you know a pack is. he has a slightly more complicated situation because they want to keep oil prices the highest possible without any backlash so for them to say it's the speculators this is pretty convenient i don't completely disagree with them having said that but i believe they're both speaking to certain truths i don't know if it's proper to spend it all the way one way or all the way another way all right let's talk about the strait of hormuz because there's rumors that it may be closed obviously on the rumor the price spike three percent do you see this as a viable risk going forward in the next couple of quarters from what you're hearing is this a rumor that has some legs to it is this going to happen do you think i don't know i can't speak to that i do know that the strait of hormuz. and the oldest trick in
the book whenever they're trying to push prices they always say something about hormuz so i don't know if you can just just based on the rumor itself is enough i haven't heard anything beyond the rumor myself and i don't know of any traders who felt strongly about it in fact yesterday when i spoke to a few of the they're mostly laughing because this is an old firm or that's been in the market forever they're always scared of something happening or. whether or not that was going to happen i think remains to be seen right so the rumor the result in the price spike of three per cent which is an enormous intraday move in any commodity and after reading your book the asylum talking about oil traders and a lot of the high jinks that goes on there how much of these rumors are just put into the marketplace by traders of speculators as a way to scare the markets and to make a good quick buck but i think the structure of the market is such now that that is
very easy to do whereas in the past when you had the trading floor and then you had banks. and the like all trading from different locations but the each had their own sort of pool of information they would often start to break each other for example someone would start a rumor and then. trading floor would run with it and they would do a lot more investigating into it i think because now it's moved largely to the screen you don't have the same sort of shy and groups of people who are able to share information with each other which obviously had its own problems in the past because they were front running prices but now the problem is on the screen a rumor can start and who's to say it's not true you don't have the large group of people often in these training trading floors you might have your office but it's really every man for himself so if they hear a rumor they're a lot less likely to be able to start to break it really quickly the way they used to be in the past. in the past you know they were pretty good at figuring out if it was something like a bank trying to start a story or if it was legitimate ok so if
a training firm. unlimited credit unlimited margin at almost zero cost at almost zero cost and they are able to program algorithmically automatic trading to kick in and force prices to loom to levels worse human beings then react isn't it therefore true that most of the trading action today is by computer generated rumors as a form of price propaganda just simply shocked a lot of human beings it's making silly decisions well it's true that most of the trading now is electronic and as a result as you know it's easy to click your mouse and one of the traders who i spoke to this week he said you know remember in the past when prices went up they would almost fight to go higher and then they would fall fast and he said these days what we're seeing is sort of the opposite effect with screen trading you see
the price jump and to go down and he said as a result he actually feels that there is a lot more control over keeping prices propped up than in the past when it was a different sort of market and the structure was different wasn't just clicking a mouse in order. to prop up the price it was not as easy to do that these days you see price jumps of three dollars yesterday five dollars sometimes even ten dollars you don't even have a war that is breaking out or an oil well that's exploded nothing like that in the past that's what it took to make prices to that exactly so it's no longer a case of price discovery it's price propaganda and as you just described we don't have price discovery which is the balance of buyers and sellers we have computers predetermining the price at which they want a commodity to trade to gain a lot of stupid human beings and then that price is fixed by computers will have access to unlimited credit at almost zero cost let's talk about another major fraud
m.f. global another major scandal how do other trainers in new york where you are. being wronged by one of their own because now we've got a broker dealer robbing other into broker dealers so the fraud has moved up from retail to institutional how do people feel about this in new york yeah it's funny the same day that i keep my wall street had its big you know sort of final rally i guess you could say they were having an occupy wall street bankruptcy court situation going on with a bunch of former traders and people in the futures market who were finding all their assets for and against them so it is definitely an issue of more wealthy people versus more wealthy people instead of the very lowly unfortunate people versus people so i think as you see people getting bolder yes they will move up the ladder you'll start to see more of this happening and the crux of this problem is americans are still largely self policing you had the chicago mercantile exchange
policing m.f. global although they're making so much money off of m.f. global and now you have a situation where they weren't able to catch anything in time it doesn't seem like that on its were very good and. yeah you have these situations now where you have fairly wealthy people and hedge funds fighting to get money that was literally stolen from them by their broker so i mean yeah it's sort of a new world i mean one of the hedge fund managers i talked to said let this be a lesson that if anybody takes your money no one is going to help you and right now there's a big struggle trying to figure out who's going to be helped if anybody well i mean beyond learning a lesson from this it points to an obvious problem in the banks like j.p. morgan feel that it's within their purview just simply take money out of people's accounts so that they don't suffer even a penny of loss even though they're the ones who took the risk so. it of course the
defense from john course on m.f. global is that they're self policing so that the congress will say in a hearing you broke the law and his defense is well we're self policing so what does that in i mean i mean what does that mean i mean as a mass murderer can go down to a seven eleven and gunned down thirty people in his defense give me well i'm self policing so therefore it doesn't i just as well read it well it'll be a lot less people to worry about in terms of welfare it goes i'll be dead all right let's move forward so tell us about the article you wrote for forbes the boy wonder global nightmare yes so and this stuff goes into what you were just saying one hundred fifty years the futures trading we've never seen people who just had a brokerage account literally find their money taken from them so this is one of those people the thirty year old lawyer and he actually doesn't even practice law he has had fun that he's more self described techno geeks that has fun largely runs itself he hires traders and that's why he able to go to bankruptcy court and take
all this time to fight this he was able to get about eight thousand followers within two weeks other people also had their money and what he's doing is pulling together people at northwestern where he graduated and a couple law firms that. have m.f. global clients people also whose money was taken and he's brought them all together and they're basically working around the clock to show that customer money should not be lumped into the larger state along with j.p. morgan and other creditors but some interest are trying to do including j.p. morgan bank of america and a few people the creditors committee are trying to let the customer funds be lumped in with everyone else which isn't really fair because the customers didn't agree to lend money to global they felt it was their money where it should be morgan is a creditor because they agreed to be a creditor so this man james could tulis is saying no way come first this was literally taken from us and the problem is the bankruptcy judge doesn't really know
anything about futures he's just a bankruptcy judge is just another case he has to figure out whether or not he's going to allow super superiority to the creditors to the customers and that's all being debated right now but there are a lot of people fighting and you have hedge funds pitted against hedge funds traders pitted against traders banks pitted against banks are actually on the ground goodman what does he have against going up against j.p. morgan and a trustee that has that close relationship to j.p. morgan it's a real david and goliath story i think. j.p. morgan has given a lot of business to this law firm of james good and the bankruptcy court trustee and if you look at the law firm's web site it's just pages and pages of business from j.p. morgan so unfortunately it can't be really seen as a neutral. of the c.m.e. whose former executive is now the head commissioner at the watchdog agency in washington d c c o c c trying to unravel and investigate what happened but everyone
seems to have too many hands in too many pots too many conflicts of interests and i don't think that's a good idea it seems like almost no one here seems pure other than this thirty year old lawyer who's just trying to get his money back and trying to make sure customers get their money back they just want what's theirs back in. they didn't ask for it to be taken it be like if bank of america went bankrupt and all of our bank accounts just ordinary people's bank accounts were taken it's like that so let me get back to the oil for a second said that production the current producing oil wells is declining in a rate of seven percent a year and that the newer sources of oil are more expensive so we've got this peak oil peak energy scenario playing out now your thoughts it seems like the international energy agency you know they've never been right on every time but i think there's something to be said that the meter producing field are producing last we wouldn't have we wouldn't have horizon with deepwater drilling and we wouldn't have tar sands being exploited so heavily and if it wasn't that we were
now it's great being as hard as we could for every last bit of fossil fuels we can get you know these things are very expensive and you wouldn't be doing it if we still had low hanging fruit so we're obviously moving into a non low hanging fruit situation any way you want to spend it that's obviously with happening because the oil companies want to pay so much more to do things like shale and things like tar sands if they don't have to they would rather just drill somewhere easy well the great thing about fracking which is another result of having go peak oil is that a lot of the water is actually flammable so in recipes like cherries to believe you can actually have the recipe explode spontaneously without actually having you know to use anything but their water coming out of your tap so it's a recipe book about flaming water and i'm sure oprah winfrey will sell a million copies so this is america genius at work all right well liam a graph goodman that is all the time we have thanks so much for being on the cause or report thanks for having me back happy holidays are those going to do it for
this edition of the kaiser report with me max kaiser and stacey herbert our thank my guests leah mcgrath goodman you can follow us on the report either twitter or facebook you can send me an e-mail the report of r t v are you until next. this is nice guys are saying by all. get are sometimes you see a story and it seems so for lengthly you think you understand it and then you glimpse something else you hear or see some other part of it and realize that everything you thought you knew you don't know i'm tom harpur welcome to the big picture.
hello i'm telling are going to washington d.c. and here's what's coming up tonight on the big picture first up in this week's conversations with great months we will be joined by a woman who had vision the ninety nine percent movement long ago but just two weeks until the iowa caucuses g.o.p. primary candidates were the very best behavior in last year's is absolute best behavior of the year in the final debate last night for the republicans any closer of a subtle nominee and later a daily take that will deepen the latest mess.