tv Keiser Report RT July 11, 2013 12:29pm-1:01pm EDT
a long time now and it has to do with the theatrical aspect of markets that it's all theater and when you talk about s. and p. or movies and their ratings it would be like a critic of the new york times or for slate magazine or some other critic to review a show and they say oh it's a bomb show in other words that's what the right again she's doing they're giving. a some kind of rating as a static that they like the paper that the document is printed on they thought the executives gave a good performance response saying you know acting responsibly but has nothing to do with the underlying security of these securities the really gives these and actually nothing to do with these securities in terms of their viability as investments that's not what they're in the business for they're in the business of applying some kind of theatrical rating that people out there applaud or they boo and has to do theater of markets to price is the thing is the theater of markets is
priced propaganda it's completely subjective anyone who thinks its object of that there is an ironclad price that means something isn't it is going to be sucked into them all of this this cuisinart are a fraud well that's an important point to make is that people want certainty and predictability the market participants bizarrely want predictability and this is how economics has become such a con job is that it's not a hard science they can't tell you exactly what's going to happen it's just solved and relies on puffery as whatever their ideology or hope or wishes are for the economy they say well perhaps it could all work and these look good to me that's all they ever know is that to them the residential mortgage backed securities look good because everything's going up well this isn't again why someone like paul krugman is misunderstood he is merely like giving a review like you would on a broadway show on. of barack obama's economic policies in terms of its merits as
a theatrical showcase but there's no economics to appall programs talking about anyone who knows anything they can nomics will say paul krugman is an economic illiterate and yes he is but this job is not to analyze economics his job is to give it and either a thumbs up or thumbs down rating for the average american slob whose mind is so much that they only think in those terms of thumbs up thumbs down what's the latest at the movies what they're going to be entertaining themselves with these are meant to be entertainment vehicles not investment vehicles other people to get their own skulls well speaking of entertainment many say that americans don't get irony but s. and p. is arguing in this case that it's quite ironic that in fact the u.s. government is suing them on behalf of bank of america and citi group who are they actually the banks who asked s. and p. to rate this stuff remember we discussed this case a few months ago before they actually filed before this went before a judge and it was the government saying well citigroup and bank of america were
duped by your you're giving them a thumbs up they really thought this was a good film right so it's again it's the economics of narcissism america hires are banks tirade against you to give a rating the rating is that they give a good rating that they paid for and then as a result they're being sued for fraud and duplicitous behavior however it's just so fulfilling narcissistic loop of fraud and so they should be surprised by their own fraud because they committed the fraud why citigroup's i'm surprised the fraud that they committed when they committed the fraud why is the u.s. policymakers surprised at their economies falling apart when it's their prescriptions that put it into the falling apart to begin with wires georgiou for making all this fraud in the u.k. because they love to be entertained they love their show but it's not economics i assure you there's nothing underlying any of these assumptions i make on economic sense well part of the reason why they're being sued is because essentially bank of america citibank and all the banks in the u.s. of course are actually ward. at the state they're federally insured deposit corp so
the federal government steps in on their behalf where as s. and p. and moody's and fitch are not wards of the state but we're going to move on to the next headline regarding puffery and this is when you know so much puffery confuses the population that takes it as fact british public wrong about nearly everything survey shows a new survey for the royal statistical society in king's college london shows public opinion is repeatedly off the mark on issues including crime benefit fraud and immigration so regarding benefit fraud for example the public thinks that twenty four pounds of every hundred pounds of benefits is only claimed official estimates are that just seventy pence in every hundred pounds is fraudulent so the public conception is out by a factor of thirty four but again it makes sense to feed the public a good story has no underlying economic basis so the public is financially
illiterate on purpose because they're just being fed a line to keep them amused while they're shopping bester role and it's all meant you know when they have the cows lined up at the top are they go down the zigzag path and they have people petting them and showing them pictures and stuff that from the otherwise they might get over on the slaughter house same thing in the u.k. george osborne is petting it's a petting zoo for george osborne just keep shopping keep shopping don't mar the slaughterhouse yet and of course this is goes with the political puffery and privatization and the cumulation of debt is people actually are participants in the economy and yet they have no understanding of what the market economy around them what the price signals are and what the truth is so how are they able to you know you need full facts everybody needs to know the facts in order to participate in the market. the me and the the politicians here want to
force an economy up a market upon everything whether it's the health care system or the train systems everything but here people have no understanding of about the very facts in front of their face when i was on wall street we had a saying prostitute kerry prospectuses nobody would get laid. ok if you tell the public what's in the what they're getting into they are not going to get into it you have to lie so s. and p. lives all the major accounting agencies lie it's called puffery and all that mater accounting issues profit. the city of london puff puff george osborne the biggest puff or the magic dragon. george osborne the musical the magic of borat he smokes his own belly button lint he lies all day and takes his check and laughs all the way to the bank but think of being fantastic musical in the west and you know speaking of puffery by the way they've just allowed the f.c.c.
is allowing hedge funds to start advertising so wait until you think people are confused now and don't know anything about the world around them hedge fund start advertising and daytime television is going to be like those drug manufacturers that advertisers say take this new drug for a disease we just invented and here are the risks then they run fifty pages of risks the absolved of my law bill it will be like here's john paulson the worst hedge fund manager in the world buy into his fun and here's thirty pages of disclaimers absolving anyone from any risk of buying into this ridiculously overpriced junk fund now speaking of the political proffer here in the u.k. so people are very confused they think the welfare bums are their normal neighbor next door joe sixpack next door whereas in fact it's the banking sector they're the ones that suck out and lead to pon the economy of course now we're going to turn to this headline about bankers and what bankers think about the population confused by
puffery europe's rich could face up rising similar to peasants revolt europe's rich baby boomers are behaving like the nobility in the peasants revolt and could face an uprising by the younger generation if the situation doesn't change h s b c's chief economist has warned so here's a chief economist of h.s. . b c one of the more notorious global banks around the world well the chief economist there is saying that just like the thirteen eighty one peasants revolt you're going to see that here right now we haven't seen and he says about that i am intrigued at the moment that the youth are quite peaceful and i wonder whether that might change it is very difficult to predict but youth movements might become more focused on their own rights rather than the economy at large right you know on this show we've been warning about social upheaval and we've talking about the loss of social cohesion and the the joining up of the uprisings in turkey and brazil
in countries around the world once you get those global insurrection against banker occupation organized and he's h.s.b.c. analyst is quite right to know that they themselves are in the crosshairs now when i talk about this is not really directed to the rabble rousers as such it's more directed to the people they just b.c. i know quite well having been in the industry for many years i'm really talking to those people to make sure they're insulated against the risk of a social uprising people who would say that i am talking to the the rabble rousers i think missed the point here i'm talking to you that person was something to lose . this is not going to go away we screwed up well this is stephen king the chief economist for h.s.b.c. and he's saying that he's he recognizes he listens to the show watches the show so but you know of course facing the peasants revolt are the fake monarchies across the gulf nations and this brings me to this story where saudi arabia writes off
five point three billion dollars in loans the finance ministry said on saturday it had consumed loans worth four hundred ninety million dollars and been taken out of state owned financial institutions by twenty thousand seven hundred ninety two saudi nationals now of course that's about the size of the. prints class there are about twenty thousand princes so it could just be writing off those loans but they also wrote four billion dollars worth of mortgage payments for the next two years off as well well here's a good and less than economics that goes back to two thousand and eight when barack obama took office as president united states he had two choices you could bail out the creditors that is the banks or it could bail out the debtors the mortgage holders he chose to bail out the banks and in fact the escalator the crisis and debt have never been higher in the gulf countries they made a wise choice to bail out the debtors because they know that you don't want armed citizenry storming the palace gates and throwing them bombs out but the u.s.
unfortunately made the wrong choice now they face insurrection risk and i say that not as to the people that would be organizing the insurrection i'm saying that to the people that have something to lose that you have a risk now that you need to take onboard however you know the united states as you said last week is similar to saudi arabia in that they're really they don't need to write off as that's because they could print as much as they want they have the world's reserve currency in europe and i know you're going to talk to your yanis varoufakis in the second half we see genuine on the rest as stephen king is warning people at the baby boomers are maintaining and retaining all of their rights you have fifty percent plus on employee used unemployment in greece and spain and portugal and you know everybody sitting there hoping nothing happens stephen king is amazed that it hasn't happened not stephen k. . you know i mean we've got to cut it off there thanks for explaining that steve herbert thank you rags don't go away stay tuned for the second half
a whole lot more. you know sometimes you see a story and it seems so you think you understand it and then you glimpse something else. welcome to the big picture. least be cool language. programs and documentaries in arabic. reporting from the world talks about seventy odd p. interviews an intriguing story for you to. see when troy.
visit. more news today violence is once again fled upland from these are the images the world has been seeing from the streets of canada. giant corporations are today. i'm not used to the tundra to freedom i mean my dear. in second grade i ran away from the boarding school with two of my friends will be around to the tundra.
welcome back to the kaiser report imax guys are time now to head over to athens and speak with economist yanis yaro factis yanis welcome back to the kaiser report. thank you max it's a pleasure all right yet as greece has just met with the troika seeking the next tranche of ballot funds what is the latest unfortunately we're going to get them like we've been getting them out for you that have you. there is that there is a charade being formed here as you know marks every month or every second month that comes here pretending to be harsh of the government or the government tending to be bargaining with the troika but in reality this is. just they're just playing
out a script the goods of which is to ensure. that public debt takes on private debts and do all of the crisis is abusive to go to the shows taxpayers and then they may decide what to do about this but whatever they do it's not going to end well. let me ask you a question because what you're describing there is. an engineering wealth confiscation scheme and we've got two other examples of something going on similar in cyprus obviously you had a situation where the government came in and stole money from people's bank bank accounts and in ireland it got a situation now where angle irish bank was caught on tape gaming the government colluding with the government to defraud the public out of billions of dollars is greece any different than these other two countries is there in another words is it just basically collusion amongst members of the i.m.f.
including germany who are actively trying to defraud the greek people and essentially steal all of their hard assets i think a little more nuance that max. i wish it was simply a case of well it's case and what i hear is a situation where. fictitious capital fictitious wealth disappeared overnight after two thousand and eight and it was a question of who is going to pay for it all was going to cover for it how would it will be very cozy relationship relationship between the political establishment the needs of our countries of the euro zone and their friend bankers are going to shift the burden of the loss of this fictitious capital on the docks paris and name a different fault either through unemployment or through tax hikes or through ing be that in the case of cyprus. confiscating bank accounts so in greece of course they're using the austerity measures that they're imposing and it's kind of
a carrot and what the other phrase carrying the hammer approach where they impose austerity measures but then they dip feed a little bit of a bell of money so the austerity front what's the what has been the measures so far and is there any any sign that the debt is being reduced and all at all of course not that is reaching only because according to the heights. but this is a whole point about the state where you have a social economy which is imploding where where private expenditure. is falling very simply too slowly and of the same time the public is forced by the troika to squeeze itself almost out of existence the sum of private and public expenditure which is g.d.p. collapses and then the state kalac collapses so even if they have managed to use and they have managed to use public expenditure the deficits are not shrinking and
dates because the politicians are taking are pushing only to taxpayers shoulders weak shoulders huge the. on behalf of x. . but we always knew that it was part of a very well conceived plan for two thousand and ten to shoot the good of the crisis from the books going to burn and various national banks on to the spears in a lot of people would describe what happened in greece as a leveraged buyout in other words greek greece before the collapse was roughly a four hundred billion dollar economy and you had collusion and cooperation amongst amongst others goldman sachs john paulson has fund manager pappa dreyer the former head of grace to essentially borrow a lot of money to take the country over and now they're selling off the assets to
pay back part of that loan and then most of the income producing assets will go into the hands of foreigners and overseas bankers now for that's a to make sense he needs interest rates to do what they've been doing for thirty years that is to say go down interest rates have been going down for thirty years as part of a secular bond market bull market in bonds so two questions number one is the secular bull market in bonds over because it appears as though interest rates are now starting to move up and maybe we're at the beginning of a secular bear market in bonds and so the second question is will this rising interest rate environment complicate an already complicated situation in greece yanis. well you will question is quite separate from your premise. and your question is much more broad and it's not doesn't just but again to greece i think that we are probably going to have to see
a very low liquidity and upper level interest rates for a long wired to go because these global crisis is creating a dearth of aggregate demand worldwide so i'm not particularly wired about the increase in interest rates i know that this is a talk in the united states with the better one gets of announcing that he is pulling the plug from to eat but they've got to be a premise max we've got to agree whether it was a levered buyout or not i wish it where i wish there was a conspiracy there was no conspiracy made it was estimates spontaneous disorder was happening in the years up before and let it be fed up and they're oh my no personally he came in in two thousand and nine after the colby's us that had already happened and he was criminally negligent in the way he had to be but he was not about the conspiracy to sell out because i don't believe that and i need to state that and i didn't think there was a conspiracy what was going on between two thousand in late ninety nineties and two thousand and make as you know was just
a free for all i mean finance and i didn't find finance here lies a shred computer on amok and because of the law in that it states that you mentioned they were just searching for heels and grace had hired new software that was all and the money was flowing into ireland to spain and to greece just stupidity looking for year end without any concern about the bubbles that would be created and the way that they themselves the finances would would suffer when the bubbles bust this is not conspiracy i think just sort of spontaneous stupidity. right well just for the record of correspond day i was involved in a scandal involving credit default swaps and implicated in some behind the scenes graft and bribes so that's on the record so people can look it up on google and get all the details so let's talk about germany first second they are the senior partner in the troika and their exports have just plummeted so how are they
going to be able to function in their role and being able to underwrite this whole european wide troika led re configuration of the economy in europe yanis. fair to have years ago i wrote an article in which i compared the greek bailout deal that was imposed by germany and greece and to pick up as a new website treaty and that data lives from has all to do with the fact that if you recall the cite treaty was the first treaty imposed by a victor some defeated countries when i defeated country which ended up being a boomer and that hurts the victors that imposed it more than the defeat it so the blunder was making it back in two thousand and ten was a germany's imposing upon the benefit of countries over sight reading which is going to prove to be a boomerang for germany as if this be proved catenary because
a great part of the germany has it it really wants to be the year the protection of it and divided got unsee but it doesn't want the federal democratic process simply because a federal government in europe would mean that the germans win control it but i have a balanced way out of when you say that germany is not pursuing a federal democratic process it sounds as though germany is playing to type as they say in hollywood where they are in what some of described imposing kind of an imperium over the arrows on through the back door with their actions is that too heavy handed to describe germany in this way or at how you see ungracious again i don't think that it was german isn't tension to create the fourth reich and in barry i think that it's falling into that situation as a result of lack of comprehension of what it takes to keep a monetary union together. they need to have
a fiscal union if they're going to keep this your guidance it together they understand that but at the same time the understand that if they do respect the rules of one person one vote then they want to be able to control the federal treasury that should be running it so they are caught like a. rabbit facing you know in the middle of the night and oncoming truck they're stuck in between you know jumping left or jumping right jumping to was afraid of that action or staying the course that got indoors which is going to lead to a bit of a disintegration of the year now let's talk about italy for a second they've just been downgraded. what's going on there are they on the road to a ballot what do you hear what's happening in adelaide yanis italy is facing a gigantic credit crunch two thousand and eight like the north part of italy which is kyle industrialized and very modern and efficient and so on is
experiencing a completely unnecessary recession recession which is imposed upon it effectively by german posts and that is that the way that it is being felt is rick complete collapse of the. credit system and this credit crunch is. of course it is now a new mutual enforcement relationship with the problems of their own government has and their financing its debt and yes no answer your question directly i can see how italy's going to avoid the bailout through various i mean the next six months all right gonna start all the time we have thanks so much for being on the kaiser a part. thank you all right that's going to do it for this edition of the kaiser report with me max keiser and stacy i read i'd like to thank our guest yanis varoufakis if you'd like to get in touch tweet us at kaiser report and so next time ask the same bio.
i mean very early. life martin at nine pm moscow time the american public throws its support behind edward snowden with a poll showing most citizens approve of his whistleblowing activities i mean to know who's helping internet users avoid the government snooping that snowden on. washington said to live a full fighter jets to the egyptian military as president obama refuses to call the overthrow of the muslim brotherhood a coup promising egyptians to criticize u.s. involvement in their country's affairs. british lawmakers warn the toppling the assad regime in syria could have disastrous consequences in a report highlighting the threat of radical militants getting a hold of chemical weapons. and a high profile corruption case draws to a close here in.