tv Prime Interest RT October 5, 2013 12:29am-1:01am EDT
i think it's going to be easy. but everyone's. best to. say i don't know if i'm going to make it to the end look i'm still filming so i'm just like on the left i don't know what to do. the kaiser report imax kaiser financial holocaust financial chair financial apartheid yes all the cost and terror and apartheid of the lions and tigers and bears of our day but dorothy you can rise up just click your heels and storm the palaces with a collateralized debt obligation of your own so let's take buckingham palace
kensington palace st james palace and windsor palace rolled up else isn't a one to higher leverage collateralized palace obligation and re conquer the world we can do it dorothy's with a royal ass a yacht of our own the people's infinitely re hypothecated palace obligation bonds what a fantastic idea stacy herbert of course only in the u.k. would they come up with an idea of backing their wealth of creating wealth through property so this is the first head by max and it's turned crown estate into sovereign wealth fund labor m.p.'s to urge britain's eight point six billion pound crown estate should be turned into a sovereign wealth fund to rival governments backed investment funds that have sprung up across europe the middle east and asia in the last twenty years a group of labor m.p.'s will say this week basically this is a great idea because other countries like norway famously have a sovereign wealth fund from the wall that north sea oil britain could have had a sovereign wealth fund had they created one based on a north sea oil but instead they reply now that into
a house by kulish and bubbles you know part of the reason they don't have a sovereign wealth fund is due to the bubble popping in two thousand and eight norway was not so foolish other countries are sovereign wealth funds here in the u.k. they're saying take the palaces that are owned by the crown and i think you mention eight or nine billion pounds worth wrapped owes into a palace backed bond essentially and then you can use that as a fractional palast lending obligation facility and spin that to eighty ninety one hundred billion pounds to go out there and buy. strategic assets around the world i'm not sure why this is not a good idea i think the queen would be more than happy to add something useful to the economy after fifty or sixty years of sitting on her duff and here's a way to turn her assets into something that could be productive i'm all for it. well the crown estate is eight point six billion pounds worth it's the palaces the land but also be large parts of reason street and oxford street all that area they did have an eleven percent return on it now this money however they do not control
it goes directly to the treasury so what they're saying is that they could use it i guess leverage it up and vest overseas in china in hong kong and in infrastructure projects domestically and to pay down debt so i'm assuming they want to leverage it up and use this as more of a speculative vehicle because all these other sovereign wealth funds that they talk about are dominated by oil natural gas which puts a lie to the fact that you can somehow like magically spin your way with debt and financial products into the wealthiest nations in the world but goes back to the creation of the petro dollar in the one nine hundred seventy s. when the u.s. defaulted on their bonds and went off the gold standard that was the first major default by america of their bonds in one hundred years then they went on this petro dollar standard and increased the supply of dollars around the world and other countries starting really in the wake of the asian financial crisis in the late eighty's started to build up these huge reserves china has trillions of dollars in
reserves made up of a chilling us dollars and then more chileans of other currencies and of course these other countries like norway have these huge strategic sovereign wealth funds britain however they sold sixty percent of their gold under gordon brown they have no sovereign wealth fund and they've got an economy that's overly reliant on fraud and really hypothecation so yes i say to the queen elizabeth respectfully turn all that the news to collateral into something that can help the nation think of it as being on the vanguard in this global financial war and when it's not sexy don't you want to be a war queen you can be like there's a financial we're going we're going to put up a post as collateral to fight the financial war you know it's exciting get on t.v. make a few speeches you could make a movie about it you'd be the spain is some of these previous monarchs they've made movies about that are now canonized in hollywood you too can be famous in hollywood too yes. well in the u.s. and u.k. we have sovereign debt funds you could say but to show you the size and the scale of the sovereign wealth funds in the rest of the world the number one is norway
which has seven hundred thirty seven billion dollars number two is saudi arabia than dobie china china has two different funds which are in the top five kuwait hong kong singapore russia singapore so you see that the only way up there is either to have natural wealth of oil. or commodities or you actually have to work for a living and export and create thanks well that's a good point either you're have workers that are exporting and you can have a sovereign wealth fund like china or you've got oil that you are exporting that can create a sovereign wealth fund the in the u.k. you have neither you have neither a robust export market or do you have any more oil because a north sea oil is now basically put and no amount of shale drilling is ever going to replace that supply of gas and oil so and i just want to correct myself helen mirren did do an excellent job for trying to wean elizabeth on the in the west and during some production where she wore the tiara and uttered
a few nonsensical jibberish as monarchs do but here's i'm saying go big time go big go big big big big big don't settle for just a west end production of your life get a big truck and hollywood thing going on you can do it if you put up the palaces as collateral for a sovereign wealth base hypothecated debt obligation bond that will take you could buy she could probably buy the singapore sovereign wealth fund and then just take that you know this think imperial you're a queen think like a queen hughes's speaking of the queen david cameron is my next headline david cameron profit in tax cuts are not dirty words so the prime minister told the tory conference that firms must be responsible and accuse labor of anti-business agenda so he said that this is no longer the party we're not going to say that profits are a dirty word i'm saying if david cameron really believes a profit not a dirty word then why not go to google amazon and vodafone and say well if you're making all these profits then why don't we tax you on those profits in other words
these companies google amazon vodafone and others they don't believe in profits because then they'd have to pay taxes so they don't report any profits or barely a miniscule amount of profit you don't like ok here you have the companies that sponsor david cameron they don't believe in profits enough to report them so david cameron or here's another thing here how about the taxpayer in the year. k. are taxed only on their profits instead of their total revenues like a corporation corporations are only tax on revenue and profits that are adjusted after all the deductions how about tax payers saying well after i adjust all my my revenue in the same way a corporation does oh by the way i didn't make any profits last year therefore my tax liability should be zero zero but if you have one of the other i as i've said before david cameron you are duplicitous douche you know and you should ask a few or just go away nobody likes you just as to if you just go what. well he this is how he would accounting to never have profits so this is something that
he aspires to anyway they want to attract hollywood he and george osborne have talked about attracting hollywood there they have more hollywood productions here than hollywood so this is something that they want and this is the accounting methodology of his government where they never have a profit that's part of the reason why we only have sovereign debt funds and so they they can always say oh we're always in debt we can't give you anything in exchange for all the taxes you're sending us when least in all these other fifteen huge sovereign wealth funds around the world they're getting something in exchange for all their national wealth here we get nothing but the queen waving every once in a while when she drives past cameras a special purpose vehicle and s.p.v. . just a receptacle to put a lot of garbage rhetoric that he spews on the b.b.c. but when you add it all up and monetize what is worth it's negative value he's actually dragging this he's a negative sovereign wealth fund every time he opens his mouth the sovereign wealth
of britain drops. britain sovereignty will increase the sky s.t.'s feud. well you know one of the big backers of the tory party the conservative party and david cameron is why so speaking of profits he's there in this final headline here payday lenders are taking money they shouldn't from bank accounts now the interesting thing of how they're able to do this is this concept which is the concept of financialization this is the reason why we only have sovereign debt funds and perpetual that here debt spirals into place terry spiles and this is the concept called continuous payment authority c.p.a. it gives the company who you sign up to whether it's like you know the gas company or any sort of service like wonga it gives the company power to take money out of your account via your debit card unlike a debit card however max you cannot cancel it yourself you need to tell the company
to stop taking money out of your account and the company can however automatically reinstate collections and this practice is illegal in the united states but it's legal here and two billion pounds of the past four years have been taken from british population out of their bank account through these methods well that's true isn't it otherwise part of the role of a prime minister is to protect a citizen from invasive presence or a lender's or financial terrorist and david cameron has advocated this role as protector of his people he is living longer charges and allies rates of five thousand percent and meanwhile prosecuting loan sharks that he catches that are charging less three thousand or three thousand five hundred percent so again here you have a prime minister that has committed acts of treason by allowing wanga which is a predatory financial terrorist to have access directly to people's bank accounts and i beseech the queen to step in go down the house of commons and let you and lecture david cameron or just fire him i believe it's within the modern does
a constitutional monarchy constitution monarchy you've got. equal billing queen you've got right up there with the constitution there's a house of parliament and there's the queen you're supposed to be like equal partners on all this go down there. is ease of treason is about you know good get rid of them you've got the power to do so i have to say that it is not just the conservatives that have done this also happened under labor new labor so this is a continuous payment authority that is allowed here for debt slaves this is a concept that is why we don't have a sovereign wealth fund is because we have continuous payment authority this is the financialization the constant interest payments now in two thousand and nine the law changed so that if you tell your bank to cancel the payments they must do so if the bank continues to allow payments out of your account and in theory it needs to refund you in rebirth the charges however banks have not always apply these rules because there's different regulatory authorities controlling the banks and then the
payday lenders and they're neither saying that the other the other party is responsible they say for taking these continuous payment authorities but i mean h.s.b.c. would have to take time off from laundering money for mexican drug cartels when they're responsible for the death of sixty thousand mexicans beheaded to launder money for h.s.b.c. they'd have to take a break from doing all that hey don't diss the profits man no matter where they come from it's all good their estates never thanks much bring on a cause report thank you rags stay tuned for the second half all out more. point being in the car showroom. the new fashion show. also design. in the business shop window. luxury is a school. this is the last call.
welcome back to the kaiser report imax keyser time now to go to new york spica dr michael hudson author of the bubble and beyond michael hudson welcome back to the kaiser report thank you very much max all right michael hudson despite interest rates at record lows the prime minister here in the u.k. has had to enter does a scheme to underwrite fifteen percent of the deposit on properties valued at up to six hundred thousand pounds what does this tell you it tells me that england is doing exactly the same thing that australia and the united states are doing their banks are and trouble and the what they want to do is really inflate the real estate market so that the prices flow being high enough to cover all of the bad
loans that british banks have made in australia they're giving similar. pushes in the united states the federal housing authority has said well we can lend money get government guaranteed loans to homebuyers up to forty three percent of their wages so what you're saying is a huge transfer payment of wages into the hands of the banks making loans to buy i press the high priced real estate and the amazing thing is that in london just as in america and australia they're saying that homeowners are getting rich from of the rising price of their homes that the government is pushing up but they're not getting rich at all they're just getting further and debt and it's the banks that are bailed out so well the london government is pretending to hope homeowners they're really hoping the banks right you started off by saying
that the banks are in trouble so they are bringing in this government. backed scheme but they're pushing it here in the u.k. as an opportunity for people to get on the property ladder as it's called but as you're pointing out this is about once again bailing out the banks correct yes correct all right let me ask you this you know when the government subsidizes the property market and people can use their homes as collateral to go to the bank and take money out the so-called turning your house into an automatic teller machine they're subsidizing people who are now part of this new rent class in the u.k. at the same time dr watson they're penalizing people who are on so-called benefits they're victimizing one group of people that the government subsidizes but they're lauding another group of people that are also being subsidized by the government i have called this financial apartheid they're discriminating against one group of
people using finances and using interest rates your thoughts well there's a deception here i use that term that they used to use your home like a good day when you take money out of the piggy bank you don't owe a debt you simply have let shaving but what they really mean is instead of taking money out of a bank take out a loan and you're going to have to empty your piggy bank in the future in the future saving that you do to pay this money that you're borrowing is going to take the form of paying down a debt of accumulating money in a bank account so that by using their rhetoric to pretend that what they're doing is helping the homeowners they've turned economic language upside down and made it appear as if people actually have a bank asset what actually is going into debt they calls debt saving and that's crazy all right let's talk about the u.s. housing for a second in the u.s.
the property market is also booming but half of the properties being sold are paid for entirely in cash primarily from private equity and hedge. this hedge funds using their own cash of course or other people's cash to talk about this phenomenon well that's not a bubble phenomenon that's the actual reverse know that the federal reserve has lowered interest rates as you pointed out to under one percent for bank borrowing the pension funds and the hedge fund saying how are we going to make money more than the one percent that we can get in government bonds so all of a sudden instead of making loans to people to buy property they're buying distressed properties buy them up for very low prices from the banks and the way to make money now is by buying house and reading it out well the same thing is happening in america today that did happen during the bubble when you have absentee owners buying houses all of a sudden or they got it out they're going to look around to find somebody who's
willing to rent the house so they can make a profit. to cover their current expenses as well as making the capital gain they want so out of the higher the house prices go in these hedge fund areas the lower the wrench go because another look and they're looking for somebody to buy for rent so what you're having indeed is two hundred percent hedge funds coming in and they're hoping now that they can sell out is a capital gain and in fact they've made twenty percent over the last two years on the run up so far but now the federal reserve has the following problem other economy is not recovering people are not having enough jobs to pay iran so all of a sudden all these hedge fund purchases need somehow to get the market pushed up so that they can cash out and take their capital gains at the expense of homeowners at the expense of people who are actually going to live in these homes and that's what economic policy is all about needed states right now well if you look at the recent
history of these financial predators going back five or six years they were making these no no income. no asset loans ninja loans to people really in a way that was completely asymmetric if you will in terms of the risk because the banks were able to sell that risk on where the homeowners accepted all the risk they got these homeowners into enormous a debt then all the banks decided you know i we're going to go into debt we can have a banking crisis because we inflated a huge bubble then they wanted and they illegally foreclosed on these properties they stole the property from these people that they fraudulently sold the mortgages to to begin with and try to get inside information against their own clients as goldman sachs did now what you're saying is five or six years later after basically throwing these people out in the street they end up buying them up for all cash with money that they get a zero percent interest rate they charge them rent on people that were living there to begin with and now they're in a crisis again which will probably lead to another bailout of the hedge funds like we saw with long term capital management is that about it yes exactly what's
happening next you got it ok so here you have a class of predatory financier as i mean in the u.k. it's amazing to me that having the experience of fannie mae and freddie mac. the u.k. seems like the going to replicate an enormously fault flawed policy and nobody seems to be calling it on them in the media in the press or in the city of london and yet we know that these policies are going to fail that i have said that within twenty four months this u.k. housing bubble that george osborne has created will collapse do you think my estimate is too aggressive or go ahead new light which may first of all you say the banks are great rip off you're absolutely right and then you say this is a failed policy it isn't failed it's us through the people the banks the banks shouldn't people who run the government that isn't failed that's a great success to impoverish in that country turning integrates turning america
into latvia that's their definition of success that's not a failure you've got to decide which side are you on well if i remember. adam smith who wrote the wealth of nations this seems to be a repudiation of everything that was talked about during the unlike mitt and now we have the bankruptcy of a nation using financial weapons of mass destruction as warren buffett has called it for the express purpose of impoverishing people why is that wrong yes absolutely correct so if you're going to do the opposite of adam smith what do you do you make a big public relations campaign saying adam smith is our patron saint we're for free markets and what they mean by free markets is turning adam smith upside down to adam smith as you just pointed out a free market was one that was free of an islamist said that the logical most logical castles alam text finally began to recollect what the british landlords had taken after the norman conquest but not all the free market means three for the
banks free for the landowners to exploit the rest of society and do ers are to accuse them of doing running out of industrial capitalism to a halt so by bailing out the banks and the real estate sectors england and raising the price of housing and raising that indebtedness of british workers you can say goodbye to british manufacturing how can britain afford to hire workers when they have to pay such high costs for housing. right now i want to get your comment to something that david cameron said raissa layout is conference party speech he said that britain should not be afraid of profits and that profits is not a dirty word but i think about companies like amazon google and vodafone here in the u.k. they don't like profits because if they reported their profits they'd have to pay taxes which they don't so is he just fullest is he inept izzie what's his problem is he just stupid david cameron or is he just a tool of the bankers all of
a sudden there is a use of the word profit in a different way you know and in our country the hotel a queen the queen of mean leona helmsley said army the little people pay taxes you can say of amazon and the other is only the little people make profits rich companies don't make profits they make capital gains they expend all of their profits pretending to take them in offshore banking center is i think it or amazon or google operates out of ireland or out of centers just like no oil companies operate out of convenience so the idea is not to declare a profit on your income so if you look at the corporate profit statements and you compare them to the national income and product accounts they're completely different because the government knows that all of the east. losses are not really losses are they know that the accountants are making the balance sheet and when i worked for ups. trying to figure out what standard oil position was the
standard oil pressure i said where the profits made it i made it where you produced that oil and brought in that made air and the treasurer said well i made right here in my office where me and wherever we find it we don't have to pay taxes on them it's all a. just pretend fictitious game and you're right that the law says you're not allowed to make a toting statement that is unrealistic and to do transactions solely for the purpose of avoiding taxes and yet that's what most of the corporations do today they make off sure but i don't shape items they made. all sorts of florida fellowships and banking on plates for the sole purpose of not reporting profit and the countries where there are i like europe and north america. dr
michael lots and i want to get a quick comment on something i've noticed that apple computers got about one hundred forty hundred fifty billion dollars parked off shore they don't bring it in the united states because they don't want to pay taxes on that money here we have carl icahn a corporate raider having lunch and dinner with the c.e.o. tim. tim tim cook saying that we're going to get them to buy back their own stock he tweets about it after he's bought the stock and he makes a billion dollars doing so isn't this just kind of like violating everything anyone would hold sacrosanct about markets and free markets you've got insider trading market manipulation offshore tax avoidance all wrapped up into one scenario between call like our apple is the most egregious example of corporate malfeasance i've you've ever seen as an exercise in serialism here you have that oil which is the most cash rich company in the world with over fifty billion dollars if there's any country in the world that doesn't have to borrow that's f.
. what i can us doing is worse than what you described max he's saying apple should borrow the money to buy it's own stuff so despite having to us huge cash savings offshore it should borrow here and use the money not to make a profit not to invest in more research and development not to buy other companies that are useful for what it's doing but simply to buy it so i'm stuck and make money from money financially so essential eight. here having the absurdity of apple borrowing money at the same time but it savings are going way up this doesn't make any sense at all except as a tax avoidance measure right so once again we're back to only the little people report profits all right dr michael hudson at a time thanks so much for being on the kaiser report it's always a pleasure back and that's going to do it for this edition of the kaiser report with me max kaiser and stacey herbert i'd like to thank our guest dr michael hudson if you want to contact us please tweet us at kaiser report until next time x. factor same bio.
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