tv [untitled] December 17, 2011 12:31pm-1:01pm EST
finds around the supreme leader guilty in obscenity of blaming for helping the nine eleven terrorists but critics say it's part of a smear campaign paving the way for a new war. more all those stories since thirty minutes time after the cars report goes gunning for more shady finances. 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 stacey tell us more well max in order to talk about the story truck really i was ten a little bit this case is too young to suit lewd now this is it plain clothes sort of canned here because of course you can walk around new york city holding
a can of kaiser's geo suit so take a look at the artwork here but the real cow 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 the actual time magazine but of course they are part of the spirit of what time's person of the year is the protester from the arab spring to athens from occupy wall street to moscow a year after chinese and fruit vendor set himself ablaze descended to spread across the middle east to europe in the u.s. 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 of 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. top all these corporate and banker occupying forces don't you think yes and max you know the interesting thing watching this time news story being covered here in the us is that all the commentators several of them actually came up to the point where they couldn't mention the name or they couldn't. they talked about the dictators that were overthrown in the middle east and then they got into 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 the 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 the 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 that 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 have to have these you know what does that little mask us as we storm the banks through
barricades of 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 john for design and look at he didn't do it this he's a pretty brutal giago dog. sex is the next headline that's why i had to remove harry from the room chorus line 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 says 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 blown aerated 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 junk or resign and only testify earlier that day that he knew nothing about m.f. global taking segregated funds so they caught him lying under oath now typically they're sort of main that there are 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 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 a 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 priority to customers and if there is a shortfall there are provisions of 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 a 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 us stealing funds for national security purposes and this global cash. presumed its own so it can pay the bankruptcy trustees so here you have genes 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 the cash is granted j.p. morgan alina all of the company's assets price so to. if you are going is cutting deals outside of the legal framework what's also amazing is that the silver that was in the m.f. global collectively all their one hundred forty thousand accounts 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 they're massively short some where 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 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 and news companies rule is 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 and the school brokerage that certain actions of j.p. morgan a lender to the brokers parents are likely to be the subject of investigation but max if you look at this chart it's felt less than three percent whereas goldman sachs fell over three percent of the same time so i think it's more an issue of 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 an enron 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 the word special purpose entities account every member and ron had over 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 of real pop occasionally in front of hypothecation through the bowels of the regulatory nonexistent city of london of course all leading to it j.p. morgan stock price of zero and then if there's any justice there is 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 bankers 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 think tank 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 costs seven eight times more in liabilities to keep these exotic pet banking fraudsters alive than any benefits include their 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 in 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 banks tours so the media will tell the population that oh this banks 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. making that five million pounds of value destroyed forty two million pounds so they 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 rate so thanks to cameron and his club bodies in the city of london people are dying in the streets now that's the real cost big for bailing out real kleptomaniacs stays here at thanks so much for being. a report thank you all right don't go away much more coming your way so stay right there.
a journalist formerly with the wall street journal and welcome back to the kaiser report welcome back happy holidays thanks so much now live 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 the i may say it's due to supply constraints so who is right in this debate is it 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 us or we say in the sense that they're just looking at what the fundamentals seem to be you know a pack usually 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 now there's rumors that it may be closed obviously on the rumor the price spike three percent do you see the. viable risk going forward in the next couple of quarters from what you're hearing. 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 about 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 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 member 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 result in the price spike of three percent 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 or 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 the 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. if they hear rumor there are a lot less likely to be able to circuit 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 to simply suck 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 fight 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. commodity to trade. in 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 retell 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 frozen against them so it's 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 global and now you have a situation where they weren't able to catch anything in time it doesn't seem like that artists were very good and yet 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. 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 that took the risk so. it of course the defense from john chorus on m.f. global is that they are 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 gun 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 he's thirty year old lawyer and he actually doesn't even practice law he has had fun that's he's more of a self described techno geek that has fun largely runs itself he hires traders and that's why he's 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 taken 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 corner 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 and of course they felt that was their money where it should be more . and 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 creditor to the customers and that's all being debated right now but there are a lot of people fighting. against hedge funds traders traders banks pitted against banks are still am a grass goodman what chance 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 the law firm of james good and the bankruptcy court and if you look at the law firm's website 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 the c c f c c trying to unravel and investigate what happened but everyone seems to have too many hands and 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 clear 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 they didn't ask for it to be taken it be like a 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 first like i
. said the production at current. producing oil wells is declining in a rate of seven percent a year and that's a newer sources of oil more expensive so we've got this peak oil peak energy scenario playing out now your thoughts seems like the international energy agency you know they've never been right on every time. i think there's something to be said that the meter producing fields are producing last we wouldn't have we wouldn't have horizon with deep water drilling and we wouldn't have tar sands being exploited so heavily and if it wasn't that we were now scraping as hard as we could for every last bit of fossil fuels we can get here 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 what's 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 kaiser report thanks for having me max happy holidays or that's going to do it for this edition of the kaiser report with me max kaiser and stacey herbert our thank my guest leah mcgrath goodman you can follow us on the report either twitter or facebook you can send me an e-mail the report r t v are you until next time just as much as are saying by all.
i believe. they started the other large putting you know off the revolt gave life to the arab spring people but it's a change in the country is yet to come as we report tonight. plus kazakhstan says its western oil town is now back of the control after independence day why it's left at least eleven dead in the central asian country. and guilty as charged the new york court finds that or rather the supreme leader did to help the terrorists behind the nine eleven attacks with critics saying it's part of a smear campaign paving the way for a new war.