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tv   [untitled]    December 8, 2012 6:30pm-7:00pm EST

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so wherever you wherever you are making profits you can make them disappear somewhere else so no movies ever make profits as well because they convince young ingenues to come out there or well known actors to participate in the film and what they do is they give them back and points they say will pay you in the profits and of course the films don't make profits because they make sure that it all goes to their expenses right it's accounting from you know booking some of the games early for games to the executives in the short term losses are amortized over and finity you know as it's all of this the worst excesses of accounting fraud but this is the model that's been picked up by corporations around the world general electric i.b.m. warren buffett they disappear five that are all engaged in hollywood frauds on account of all the footsie one hundred stocks are engaged in some form of i want to counting the governments in the u.k. and the u.s. and the g. seven nations are involved in some hollywood style accounting and this is a great story because the regional hollywood accounts during scamps are going to
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try to go to michigan they promise a meeting with you know scarlet johansson or you know some other owners you know when it comes around and we want to make the film clear the film in your state and the local municipality goes. home and then they rip them off for twenty million dollars and then of course six months later it's all about austerity measures for those poor people nose down to madam pay per view for those breasts well yes it does get very bad here so. pontiac michigan g.m. goes bankrupt pulls out closes down their factory their incomes two of ari emanuel is friends he is wrong emanuel's brother and he's a famous talent agent in hollywood linda nelson and a alford talbott and they put in ten million dollars in an reese exchanges are receiving up to seventy million dollars back from the state to build a studio out of this abandoned factory and the detroit free press has an interview with is
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a alford talban guy and he says i go into things to make money but on this i don't really care i just want to help create jobs and this can create three thousand six hundred jobs you know this is all was the always the rumors and whether p.p.i. schemes here in the u.k. the public private partnerships you know the businessmen in the city of london will say we don't really care about making money so much we just want to create jobs but this is repeated over and over again as they just stick their hand into the coffers of the public and steal billions you know and then they walk away saying geez we don't know it happened we never saw it coming i don't know i got rich and you guys don't understand any of that up until oh i don't know it just seems up every single time of the way they were but the falsehood we never seem to lose the most due coincidence and remember over the course of this whole deal there were several different emergency managers a pontiac which itself was almost bankrupt or bankrupt and so the guy at the time
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who was negotiating with these guys to build this studio there. he asked them for this thirty six hundred dollars number in writing and they refused to give it so he didn't want to do the deal with them but the governor granholm she forced them to do it and they signed it and you know to this day only twelve jobs created thirty six hundred twelve you know that's a rambling error. this is the most important part though max in order to build this studio they needed. they would be borrowing around eighteen million dollars in municipal bonds but they needed someone to back over the objections of some local officials the state agreed to use the state workers pension funds to guarantee the bonds if the investors fail to pay their retirees would be on the hook max do you think the investors failed to pay. the investors fail to pay but the tragedy is that these are monies that are for pensions for police nurses you know
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hospital workers farman and this money that is taken out of their paycheck every week is put into these retirement funds and then the state intercedes they collateralize those funds back a bond which i'm sure the rating agencies moody's picture s. and pay of course are totally corrupt then sure they gave a good rating and then the hollywood people came in and stole that money and then those people lose their pension accounts and you know one of the things in america that's really one of the greatest tragedies is how to farm in the police from the workers the teachers the people who actually work for a living not steal money like on wall street are basically financially raped every single day by these people so well so it did look promising for a bit because disease huge studio decided they were going to make a movie at this studio that was built by this deal you know to save pontiac michigan then in comes two thousand and ten a new governor rick snyder and he decided to end this program the bond still
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existed for this town of pontiac michigan that had built this studio when the bill for the studios bond interest came due in february of this year it paid only a portion two hundred ten thousand dollars the state pension fund had to pick up the remaining four hundred twenty thousand dollars so new york times contacted linda nelson the guy behind this bond offering the guy who built the studio and one of his partners a mr rick oust. he were koski and mr nelson said in separate interviews that they had never considered personally paying for the bond interest a deal is a deal they said and the state agreed to cover the bond so max can you compare that for us to ireland for example great they are simply claiming that for their interpretation of the contract they don't need to pay and they walked away from the deal and the people who got stung of i have to sue them and they'll never get their
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money back versus ireland where it was unsecured debtors to anglo-irish bank they never had an obligation to pay those debtors and yet the government is forcing the population to suffer austerity measures to pay on the long hours is outstanding old debt that was never required by them to pay never done in their name to begin with and when you go to ireland when you go to dublin that this generation that hasn't emigrated are sitting there saying we have a moral responsibility to pay i know ours that's a lot of cons wallop easier you know stupid moron if you pay that because it says right there in the common of the bond you don't have that obligation and. speaking of the debts of bankers it is hollywood accounting that accounted for the disappearance of a lot of it repo one hundred five for example was a great scam modeled on hollywood you know when they come looking for their money you just shift it one other place and hide it in various accounts and the global financial system collapse and because of that we have zero percent interest rates
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now and this is another thing about moral obligations a lot of people will tell us oh we can't have interest rates rise because then my mortgage rates will go up and i'm on a floater tracker rate and i need every single penny i can get rate cuts to push up insurance premiums one of australia's largest insurers says falling interest rates will push up insurance premiums peter harmer of c.g. you says when interest rates fall obviously investment returns reduce and therefore the original premium to the client needs to go up that we've been covering this for a number of years when you lower interest rates towards zero not only do you kill the same years but you destroy the insurance industry to give an example this bank of england just put out a study they're saying that in the u.k. people are saving seventy billion interest on their mortgages due to lower interest rates however they're losing a hundred forty billion pounds on lost income on their pensions and retirement accounts so for every time they lower those interest rates you lose double the money and they call that moving towards building
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a better economy it's absolutely insane but then again without the insanity you have nothing left and then finally future generations have to deal with the financial carnage during the off hours on sunday the national association of insurance commissioners approved the new rules that would allow life insurance companies to lower their reserves for future claims so because of zero percent interest rates max they're saying that they're not making any returns so they have to increase premiums but in america you know a lot of people just don't have any money for the premiums they're already paying so now they need to go speculate therefore they need lower reserves so that they can invest more in collateralized debt obligations and credit default swaps and various financial products side. chance means no ability to maintain private property which means no ability to sustain capitalism which means that the entire free market system is being destroyed by ultra low as zero percent interest rates and before we go i should mention talking about disney for a second that the person who played the voice of mickey mouse for the disney cartoons was married to the woman who played the voice of many mouse. wow
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she never thanks so much for being on the kaiser report thank you stay tuned for the second half i'll be talking to matt taibbi of rolling stone. a. little beasts and much brighter. morning song from feinstein.
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totty dot com.
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welcome back to the kaiser report imax keyser time now to go to new york talk with journalist and author matt taibbi of rolling stone magazine recently been writing about the banks just can't remember anything that's i mean welcome back to the kaiser report. how's it going max super lie first of all i have to ask you something enough four years ago or so you came out with the giant vampire squid goldman sachs sucking the life blood out of america and he painted
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a fairly. not very flattering portrait of lloyd blankfein but the a lot has happened over the past four years so the question is is a lloyd blankfein still the biggest douche bag in america and on wall street back. you know i think it's it's a close race now if i had of i had to pick between him and jamie diamond i'd probably go for jamie done that at this point. you know goldman first of all goldman isn't as dangerous as chase because it's not a real commercial bank so. and then you know jamie dimon performance last year testifying before congress was just it was just awesome it was so condescending and and sneering and of noxious that that kind of heads him head for i don't know how do you feel about the well of course of the jamie diamond i think maybe taking the lead in the douche bag award so naturally he's leading the race to replace geithner as fed as the new treasury secretary but i want to do i focused on read
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a couple of your recent stories as always you are digging deep into the stories and a couple of characters that stand out first of all this is brian moynihan the c.e.o. of bank of america and was putting on quite a performance when they were trying to dig into his acquisition of countrywide and all the scandals and fraud that happened after that tell us about it becker america's essentially being sued by everybody in the world for crimes that they committed and also offenses that there are subsidiaries there acquisitions like countrywide and merrill lynch committed. primarily connected to the sales of fraudulent mortgages mortgage backed securities in this case they're being sued by m.b.i.a. which is the model line insurer. which they claim was fraudulently induced to insure countrywide mortgages so m.b.i.a. wants to do what has long wanted to depose brian moynihan the c.e.o.
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of bank of america which now owns countrywide. for the simple reason that they want to get his opinion on whether or not bank of america should be liable for the the mistakes that countrywide made so they they fought the effort to get. morning and to pose for a long long time and then they finally did get to depose him in the spring of last year and it just only only just became public deposition and in this deposition morning and literally says that he does not recall the acquisition of countrywide. you know it's only the biggest and most important acquisition in the history of the company but as c.e.o. it just somehow kind of slipped his mind you know looking at this crisis now over four or five years into it and it's almost like they have to compare it or make the comparison to vietnam you know this is america's new vietnam you know that war america was unable to get out of it and they blew an entire generation thousands
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died and trillions spent and now you've got a new vietnam it's called the banking crisis the bankers are in charge they're blowing billions hundreds of billions and trillions it's a quagmire if the word from the vietnam era the quest mire we're in another quagmire except now it's in inside the borders of america and they can't seem to get out let's talk about another character you're talking about stevie cohen famous hedge fund manager i describe just bracing himself recently talk about it if you can stephen cohen has long been kind of on the fringes of a number of scandals he's been. sued by a number of companies who claim that he has been involved in various market manipulation schemes that cohen you have to understand. he he got rich. doing a very particular kind of trading where there was a sort of high velocity trading where he would take an enormous position in
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something and then as soon as it ticked one way or the other for even a second or two he would he would dump his shares so this is kind of strategy where if you had some kind of inside information you could make a massive amount of money in a very short period of time and a lot of people have a long accused him of exactly that so he is now sort of formally being linked to an insider trading case in which he sold off seven hundred million dollars worth of shares in a pair of biomed companies just a couple of days ahead of the release of news that those companies had flunked a drug drug trial that would have made them a lot of money it turns out that one of his cohen subordinates had spoken to a doctor who was involved with one of those trials and again just like morning hand when they ask owen about his conversation with the subordinate and what led him to sell off nearly a billion dollars worth of stuff he said he didn't remember i didn't remember the
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conversation so nobody remembers anything is this kind of the theme of all this yeah i guess the irony here is that the drug in question was an anti all timers and these two guys seem to demonstrate you know you know ok there was a joke that that i thought was there to be made but i just couldn't figure out a way to make it that wasn't tasteless. but definite definitely it was ironic for sure all right so as you've been covering the unfolding scandals in the u.s. banking system for example the model an insurance industry when you first come across this as a journalist and you approach this really you know your background is in more generalized journalist and also and everything but this. is right they said when you when. and peeling the onion of these frauds and he comes across something called model line insurance what do you do is this just another layer of corruption and is it shocking to you that you keep finding other huge systematic layers of
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fraud amongst layers of fraud yeah absolutely i mean i think this entire scandal has been fascinating you know just from an educational standpoint because. you know most of us reporters who are now forced to cover stuff like this because it's so central to the american political narrative in a way that it never was really before we've had to learn about a lot of things that we never knew anything about in these. you know model on insurance industry and what happened to it in the wake of the mortgage crisis is really an incredible story because there's a there's an interesting sort of philosophical question here basically these are you know bond insurance companies or investment insurers so if you are selling a mortgage backed security or a municipal bond the people who pool those investments may also insure them with these insurance companies so that the people who are buying these investments feel
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even safer now the question is that these insurers know that they were insuring a crappy investment and just not care because they were getting you know paid upfront in their commissions or were they genuinely hoodwinked by companies like bank of america and countrywide and it's it's kind of an open question i've heard people on both sides of that equation make that argument that a lot of these companies knew exactly what they were getting into when they were insuring all of these these toxic mortgages well there's a tremendous amount of quid pro quo that goes on between these organizations and institutions in the case of m b i and they take a stake in the very properties that they're supposed to be and sharing or underwriting so they have a vested interest in committing fraud you know i don't know if you've got a very heavily into this or not. but the four remaining major accounting firms in america are now all implicated in major fraud as well this goes along with all of the rating agencies being involved in frauds head oh yeah as you mentioned like
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stevie collins and ray and fraud as so isn't this matt taibbi can we say that this is a criminal racket and why can't we go after this as a racket with anti racketeering laws people who have tried and incidentally they have tried with with stevie cohen there was a famous case. in who actually was in that famous but there was a case here in new jersey where an insurance company called croman forster which is a subsidiary of a canadian company called fairfax insurance they sued cohen and a number of other hedge fund guys and a couple of investment banks and and some other people for exactly the behavior that you describe and they tried to use new jersey's rico statute because it's one of the fuse that few states were that you're allowed to bring a private racketeering claim against. you know anybody but the courts wouldn't allow them to use rico and that case was dismissed and so it set
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a precedent it's just very hard to bring a racketeering claim against wall street people judges have not yet wrap their head around the idea that that's exactly what's going on and so they're reluctant to go there where the reality is it racketeering is that is exactly what's going on you have this confluence of different types of organizations ratings agencies hedge funds insurers banks mortgage lenders they're all incentivized to commit fraud together and so they're all members of an organized scheme and so you know rico law is exactly the way you would want to attack that but nobody's really gone there yet all right now with this this will rock it is going global and it touches in the central banking. as well saw for example recently the libel or scandal which came out of london as so many of these scandals do the ai g.
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the limb is made up they really had their hard work here in london where they allow for infinite rehire papa cation or the infinite collateral is ation of the same security over and over again which is the basis for many of these frauds is legal here in london now they're going to get rid of mervyn king is retiring they're bringing in a central bank from canada mark carney and he is tasked with trying to clean up this mess but what do you think about this idea that the entire country of britain was unable to find a single banker unseen by scandal. it's certainly not it's not complimentary to the british banking system that's for sure but you can understand the decision i mean this look look at all the major banks in england they have been you know invariable to one degree or another and owe a lot of these scandals you know there are r.b.s. and barclays and. you know this library scandal which is this mushrooming and nobody knows exactly where it's going to lead and incidentally it's connected with
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the central would with that with the bank of england so you know promoting from within is probably not an option because there's there's a lot of corruption there that's yet to be uncovered i would imagine right connected to bits library mess so yeah i mean this is this is sort of an eliot ness situation where you have to bring somebody from outside chicago to clean up the mess of chicago. that's not what it was what it sounds like to me right so you need the untouchables they come in and somehow they're going to bring this all up but i want to ask you we've got about thirty seconds left so this is actually more of a pitch do you get to consider a story maybe you've already written it but this is how right as the two thousand and eight meltdown was occurring apparently the h.s. as to be judged more and. money laundering scandal and other banks with the cambio attached to mexico they actually there was a moment when the only cast circulating in the entire global system. after the
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credit freeze was the drug cash from from drug cartels apparently only six months later only after they called off the serious fraud office called off the investigation that the drug cartels turn the spigot back on with the actual cash did the crisis begin to abate now is that a story from the table you know what i mean it's definitely an interesting story you know i was in russia when a similar story broke the bank of new york scandal you probably remember that one in the late ninety's were turned out that you know because illions of dollars of russian mob money were flowing into the you know through new york. but you know if it's true if it turns out to be true the drug money was the only liquidity that was that was keeping the system alive during the crash of two thousand and eight that would be an incredible story if that were true all right about ten you're out of time thanks so much for being on the kaiser report. all right thanks a lot next take care and that's going to do it for this edition of the kaiser
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report with me max kaiser and stacey her but i will thank my guest matt taibbi from rolling stone if you'd like to send me an e-mail please do so as a reported r t t v dot ru until next time that charges and by all. the. stories technology innovation all the developments from around russia we've got the huge earth covered. eaves.
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