Max Keiser on Bankers Bonuses Face Off – 27 March 2009

Max Keiser: ….they (Goldman Sachs, JP Morgan et al) are systematically undermining the entire system. They are creating a mechanism to carve out equity and capital for themselves at the expense of society at large.

So in the United States, unemployment is skyrocketing. The uninsured is skyrocketing. The social fabric is coming unglued. You have riots all over the world…in Iceland and other countries due to this financial terrorism that was pre-meditated, on purpose and should be addressed as such.

There is a double standard. Why is the US pursuing so-called terrorists in nations like Afghanistan when they let these guys roam free on Wall Street? They’re the worst criminals of all – they do far more damage.

Interviewer: Let’s leave Afghanistan out of this…

Max Keiser: But why? It’s a great source of poppy and heroin which fuels a lot of these bankers bonuses. Let’s be frank about that.

18 Comments

  1. Dear Catherine: As a side thought: Are you aware of any results from the March 23-24 Meeting/Seminar/Workshop held in Washington DC and organized by the WSJ and George Soros?? Mr Robert Pickle CEO of the International Swaps and Derivatives Association among a number of “dignitaries” attended as an honored guest/speaker…Otherwise, between Max’s constant ranting about the ‘FINANCIAL TERRORISTS” and your correctly naming this a “financial coup d’etat”; besides decentralizing is there a law enforcement organization that can be called upon to bring civity to our forelorn country…and bring indictments as with Bugliosi’s idea that the Bush Cabal can be indicted by state or local DA’s??? Clearly Gov. Cuomo is not the “Sheriff of Wall Sreet” as you so clearly illustrate his prior work during his HUD/FHA days as written about in your website was less than pristine..Well keep up that pleasant effort onward, Richard

  2. Richard:

    I have not seen any results. If there are any reports you can point to, particularly transcripts, delighted to take a look.

    The strongest possibility for enforcement action is state and local legislators and district attorneys willing to act against federal encroachment.

    Check out the Feds vs. States blog post,

    Catherine

  3. Max Keiser just blows me over with his in-your-face candid responses which stun the consensus sleep walking majority. I just laughed and laughed as he spoke truth to people and power. When I showed his previous work from Al Jazerra to my fund mangers I teach about issuing a fatwa against Hank Paulson – they just laughed so hard… because he was saying things no one else dared say. And here, decapitation! Just totally rightously funny and that’s what we need when dealing with such a grave problem. In my book he’s up there with Stephen Colbert… Enough said.

  4. “Why is the US pursuing so-called terrorists in nations like Afghanistan when they let these guys roam free on Wall Street?”

    Sibel Edmonds and Valerie Plame exposed the link between the World Bank, Turkey, and Afghanistan. In today’s Doonesbury, he reveals more of the story. The poor Afghani get nothing. The warlords get a little. The Russian-Israeli Mafiya in Turkey get a lot, and so does the World Bank. It ain’t all that hard to figure out.

  5. So a funny thing happened on Sunday.

    1. I was reading Jim Willie’s last article “China: Partner, Adversary, Rebel.” http://news.goldseek.com/GoldenJackass/1238169622.php . His explanation for the US dollar rise during late 2008 (when reasonable people expected it to fall with US financial chaos) was a massive buying spree of US-T bills by Caribbean bank centers, “from $117 billion in July 2008 to a hefty $204 billion in October 2008.” China and Russia (apparently) is also very very angry with the US. Willie also says in his article on Davos that the major powers can’t agree on ANYTHING right now.

    2.I went to my paperback of Gold Warriors and looked in the index for “Citibank.” 10-page section on the bank (p.222-232). pp226-7 says:”The solution was simple. Citibank would move all Santy’s assets offshore, from Citibank New York to Cititrust in the Bahamas. This would have the effect of putting the bullion outside the jurisdiction of New York courts, blocking any lawsuits contemplated by heirs.” Huh? Wonder if that has anything do with #1.

    3. I read a Gary North article mentioning Soros saying commercial real estate to fall 30% in the US, but PRICE INFLATION otherwise.

    4. I read GEAB’s 2009 March 16 article making me now believe that the “euro will implode” meme the last few months is mostly disinformation. http://www.leap2020.eu/GEAB-N-33-is-available!-Growing-Transatlantic-tensions-on-the-eve-of-the-G20-summit-An-illustration-of-Wall-Street-s-and_a2940.html
    . GEAB also says that the major powers can’t agree on ANYTHING right now.

    5. I wanted to know if China was really angry or if their public diplomatic position of hating the US dollar was just for domestic consumption. Did some searching for “yuan” and “reserve currency.” I found that China began EXPERIMENTING in DECEMBER 2008 with neighboring nations on making the yuan fully convertible. [holy **expletive**] But no details. [For those that don’t know, China’s currency is not fully convertible on world markets which allows the nation to control capital flows and prevent attacks on their currency by speculators (like Soros)…but this also prevents the currency from being used as a reserve currency like the US dollar or euro.]


    If China REALLY is angry with the current situation, they will throw off the whole “exporting nation to get richer” idea and focus on domestic production AND consumption. My guess is that a fully convertible yuan would appreciate from the current dollar peg A LOT. With Russia agreeing to barter on their side, they would need one more major power’s cooperation (Japan?) to become a regional Asian hegemon. And this would mean that all US imports from China would probably double in price (my guess)…which explains the whole rapid US inflation idea I couldn’t rap my head around before).

    Oh boy.

  6. byron,

    http://www.asianews.it/index.php?l=en&art=14131
    “The first experiment is limited to transactions between Hong Kong and the neighboring provinces. It is also proposed that the yuan renminbi be used in 8 neighboring countries, including Russia. With these countries, agreements have already been signed for the settlement of contracts in the Chinese currency. Perhaps it is no coincidence that the news was released on Christmas Day, when Western markets are closed, reducing the impact on the dollar.”

    It’s experimental. No announcement to make it fully convertible, but China is using the mere possibility as a bargaining chip.

    I’ve been trying to think of what “bargaining chips” the US really has besides military might and information wars. The biggest poker chip the US has are:

    1)allowing access to the largest market in the world
    2)control of oil
    3)control of food

    #1 has kept Japan towing the American line for the last 30 years…but this trading system seems broke right now. Maybe the US offers Japan the end of General Motors, and China ownership of our overpriced commercial real estate?

    Japan usually tows the western line, but never fully trusts the West as well. This is why they heavily subsidize their home ag industry because of the possibility of widespread famine (like in Germany) after the world wars. Japan has also seems to be limiting the number or nanotech patents they publish the last few years…without any apparent decrease in funding research.

  7. I have an idea they’re siphoning off trillions of dollars to fund infrastructure for an even bigger scam. Pitting productivity vs. unproductivity. Carbon credits on global, national and down to a personal level. Previously they’ve only been able to market human activity. It occured to me after the global lights out following the G20 meeting. In the name of climate change and saving the planet. There’s a market for inactivity. Possibly lynchpin of the new world order economy and it’s agenda for monitoring human activity. It could even bring about mandatory Sunday rest (global lights out), require mandatory attendence to a world church and fullfill some bible prophesies. Mark of the beast for one.

  8. How could we NOT leave Afghanistan out of this…

    There was a Dilbert cartoon a few months ago that also hinted at the drug cartel being the source of funds for the bailouts.

  9. Crac,

    Should the Yuan become fully convertible and become the reserve currency, what challenges do you see for China? Can they handle it from the economic standpoint?

    For example, #2 should improve quite a bit for China as well as any other import good or resource. But their export business will suffer tremendously. Is their population wealthy enough to consume all the goods they produce as well as all other imports and still sustain a 7% growth rate which the country needs? Does the country have enough resources to export (including technology) to keep trade balanced? Resorting to tariffs will likely undermine their effort. I would think that a country that can survive independently is the country whose currency can act as a reserve. I also think that the Cultural Revolution and lack of a consistent law has damaged the people quite a bit and are serious obstacles. I have no documentation of these, only how they have conducted themselves in world business and trade.

    Thanks,

    Jarno

  10. Jarno,

    I don’t know. China would have to balance unemployment in the short term to long term interests. And I wouldn’t believe China’s mythical 7% growth rate; China reports their numbers differently than every Western country(or even Japan), and was obviously lying about their growth rate during late 2008. China announced growth even with tens of thousands of factories idled AND the announcement of lower energy usage.

    The US business model that depends on high credit is broken.
    If the real estate boom HAD NOT happened, unemployment would have been much higher 2002-07.

    The only thing that can save the system AND be good for most Americans would be a breakthrough in energy technology lower operating costs across the board for all businesses. Otherwise, it’s just mass inflation with high unemployment for all. I thought maybe 6 months ago that sovereign wealth funds from the Middle East and Asia could just bailout the residential and commercial real estate markets….but that seems unlikely now since this would not help relieve unemployment in those same foreign countries.

  11. This from the Beeb:

    It’s a mystery that has got British law enforcement officials and others across the planet scratching their heads. Put bluntly, enough heroin to supply the world’s demand for years has simply disappeared.

    The United Nations Office on Drugs and Crime (UNODC) describes the situation as “a time bomb for public health and global security”.

    http://www.bbc.co.uk/blogs/thereporters/markeaston/2008/10/map_of_the_week_the_mystery_of.html

  12. It’s refreshing to see someone with the guts to speak the truth to the sleeping masses, many of whom chose to display their ignorance in a public forum, under the guise of being “financial experts.” Just like we can look back now & view people laughing at Peter Schiff’s comments in 2006 on youtube, in a few months, when the world is in the full throws of the Great Depression II, everyone will say, what happened to the billions we gave the bankers, & why weren’t they prosecuted for their crimes? (& then the masses will seek them out & it just may turn out to be exactly like the French revolution…) altho of course I hope it doesn’t come to decapitation!

  13. “Decapitation”. I think it’s a brilliant pun… “de-CAPitation”. Take away the marbles. To my way of thinking, the main thing is that all of this chaos/complexity/details/ranting/investigating/psychoanalysing simply points to the fact that a “price system” will not work in a high-tech world on a finite planet. When will we start addressing that?

  14. Sorry it took this long to find the site:

    A Call to Action
    Here are the top 20 principles for rebuilding the financial system,
    as developed by participants in The Wall Street Journal Future of Finance Initiative.
    1 STRENGTHEN UNDERWRITING STANDARDS
    Bank management and bank examiners must
    enforce the banks’ minimum underwriting standards,
    focused on the borrowers’ ability to repay
    debt from income. Extend supervisors’ authority
    beyond banks to mortgage brokers and other
    bank agents. Ensure national real-estate appraisal
    standards.
    2 BOLSTER FDIC
    Bolster the Federal Deposit Insurance Corp.
    and provide it with additional funds and flexibility
    so there is capacity to handle escalating bank
    failures.
    3 REGULATORY OVERHAUL
    Streamline the regulatory architecture so there
    is more effective and consistent regulation across
    financial services and an end to regulatory arbitrage.
    Improve effectiveness of regulators. Provide
    them with better training, pay, status and resources.
    Specific industry experience desirable. Testing,
    licensing and continuing education required.
    4 CREATE A NEW CLEARINGHOUSE
    Create a clearinghouse to enhance transparency
    for standardized credit-default-swap contracts,
    including individual corporate names and
    indexes. The clearinghouse would also extend to
    overnight financing and interest-rate swaps.
    5 RAISE CAPITAL REQUIREMENTS
    Writers of credit-default swaps should face
    higher capital (reserve or margin) requirements.
    Banks heavily involved in the CDS market should
    face a further surcharge for concentration risk.
    6 ENHANCE COLLATERAL
    Enhance collateral requirements on over-thecounter
    derivatives to protect the system. To minimize
    the effects of financial-institution failure,
    regulators should segregate customer collateral in
    the event of a bankruptcy by a firm involved in
    the credit-default-swap market.
    7 SMARTER SECURITIZATION
    Improve disclosure in securitization, improve
    underwriting standards, require all parties in the
    process to have “skin in the game.” Create meaningful
    standards for transparency of financial
    flows in all instruments, and make the information
    available in an easily accessed form.
    8 RATING-AGENCY REFORM
    Eliminate special status of rating agencies. Reform
    pay structure for rating agencies to align incentives
    better so they are paid over time as their
    ratings prove to be accurate.
    9 CONSISTENT REGULATORY SYSTEM
    Include nonbank financial institutions under
    regulatory umbrella and require them to provide
    information to the systemic regulator. Regulation
    should be risk-based. Firm-specific information
    should be private, and only aggregate information
    made public.
    10 CONSTRAIN LEVERAGE
    Limit leverage across large, systemically important
    financial institutions, and enhance capital
    requirements for certain products. Be clear about
    how risk gets measured for purposes of leverage
    and capital requirements.
    11 LET TARP CAPITAL BE REPAID
    Make regulators explicitly state conditions
    for the repayment of money to the Troubled Asset
    Relief Program.
    12 EXECUTIVE COMPENSATION
    Limit the government role in executive compensation
    to companies where the government
    has a stake. Companies should be sure executive
    compensation provides the right set of incentives.
    13 TRANSPARENCY BEFORE REGULATION
    Systemic risk regulator should require all
    firms first to provide information. Regulation
    should be limited to those deemed to pose a systemic
    risk. Intermediaries with sufficiently long
    investor lock-ups and sufficiently low leverage relative
    to risk should be granted a safe harbor from
    regulation. Regulator should publicly disclose
    cross-industry liquidity and concentration risk.
    14 PRICE AND VOLUME TRANSPARENCY
    The industry should publish price and volume
    data on over-the-counter derivatives.
    15 FED SHOULD BE SYSTEMIC RISK REGULATOR
    The Federal Reserve should be the systemic
    risk regulator of nonbank financial institutions. It
    is important that the regulator be independent
    and apolitical. We recommend using private-sector
    advisory bodies. In order to take on these responsibilities,
    the Fed may have to reallocate
    some responsibilities to other agencies.
    16 ENSURE SUCCESS OF PUBLIC-PRIVATE
    PARTNERSHIPS
    To improve the chances that the Public-Private Investment
    Program works, the government should
    recognize that many sellers of these assets are reluctant
    because of the impact on their balance
    sheet, and should allow for regulatory forbearance
    on capital requirements or accounting flexibility.
    17 ACCOUNTING RULES
    Have a sensible set of accounting rules to reflect
    value for financial reporting and capital
    purposes.
    18 NEW RESOLUTION AUTHORITY FOR
    NONBANKS
    Create an FDIC-like model for winding down nonbank
    financial institutions that pose system risk.
    Adopt global standards for determining how different
    classes of creditors are treated.
    19 AUDITORS ENFORCE CONSISTENT MARKS
    Encourage disclosure of disparate asset
    marks, by asking auditors to raise instances of
    price discrepancies among clients.
    20 LIMIT FORECLOSURES
    More efforts to limit foreclosures through interest
    and principal reductions, rent-to-own and
    other creative solutions. Create a new federal
    agency with sufficient resources to limit foreclosures.
    Force banks to identify potential troubled
    borrowers.

  15. The Wall Street Journal Future of Finance Initiative principles describe a protocol for insiders, by insiders who are part of the cabal that created the problem in the first place. More of the “foxes guarding the henhouse” collective wisdom designed to protect the interests of big money and continue the game as usual.

    There will be no end to the boom and bust cycle until gains from speculation in land are taxed away by the state.

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