one thirty pm in moscow these iraqi headlines u.s. teams up with our about allies to pressure the assad regime into submission to strike ongoing u.s. efforts to mediate a diplomatic solution. please washington puts the squeeze on syria's ally iran pledging to sanction countries that don't reduce or oil imports from the islamic state. reliving the past start he visits the only remaining soviet forced labor camp of gulag eight years powering tales from his former inmates converted into a museum it's hope the site will act as a permanent historical write. prize

a report up next they with us. exposure this is the cause a record of children attention this is your captain speaking stacey herbert. mean this is your captain freaking. bonzai news exclusive pilot those birds are watching jim cramer there and pressing the print button is ben bernanke he of course and he is in charge of our global economy i thought it was a good analogy to compare this to the jet blue pilot when a little bit bizarre on the flight to las vegas yes well what happened he burst out of the cockpit running down the aisle make it look in first peanuts well max passengers subdue screaming jet blue captain as mid-air rant diverts like

a jet blue flight captain had to be tackled by passengers today after you ran up and down a packed flight screaming about terrorism and al qaeda and a terrifying mid-air outburst he was shouting say your prayers but it is very similar to how the guy in charge of our global financial monetary system is doing the same thing and yet the passengers are not tackling the captain as it were but they're sitting there calmly as if the plane isn't out of control. is the pilot of the american economy then he's not reading the instruments very well that inform him about what the economy is doing the gauge there this is wages is crashing but he's not doing anything about it the games that shows inflation and stuff like energy and food is zooming up too dangerous and bernanke he's not doing the batteries blinded henri's with the stewardess or talk about cheap fares this guy's got kicked fares he's running around the sighing and looking for peanuts all day

you know exactly max because when a pilot in charge of the plane. when they're flying through a storm they're supposed to look just at the gauges and those are telling them the truth because their instinct is telling them something else and yet part of the problem is they keep tweaking the gauges to try to tell them the thing they want to hear but i've used in flying the economic plane of america and when the gauges are showing him what he should be doing making some adjustment to the flaps or doing something correct to actually sustain economic flight he's just basically taking black pain and you know spraying it over that gauge and saying i don't see that gauge he goes in front of congress to say don't look at. just believe me were saying and of course it just is there to promote the agenda of the central banking authority and the car park our city and as a result we got economic armageddon in response to this jet blue situation we had this headline jet blue's c.e.o.

barger pilot is a consummate professional so courts talk about the pilots a consummate professional he shouldn't talk to always or push things flying. but of course he's trying to make sure that the passengers continue to fly jet blue and the same thing you see with the financial sector or the mainstream media they keep going tell you it's all fine yes the man ben pretty running up and down the aisle saying everything is ok you know in fact it is all ok look when bernanke is meds where of he's going to be like that tony guy called me twenty twelve guy running down the street buck naked slapping the ground like a gorilla glue or do you think what it is about his goal that he looks like a relatively old you know alpha gorilla sitting back there you know farting. but i mean that's all he does he goes in front of congress and he starts any debate you know they say oh you're farting sounds like we're all in great shape thank you professor bernanke let's look at some of the headlines that betrayed the everything

is ok bernanke he is a consummate professional he's a hero sort of shock slowdown in u.k. growth as g.d.p. contracts point three percent so britain's economy contracts of more than expected in the last three months of two thousand and eleven shrinking point three percent as a country is dominant services sector weakens and meanwhile household incomes fell one point two percent and the savings ratio eased to seven point seven percent right they've got austerity in the u.k. and as a result the economy is crashing and the g.d.p. is crashing and the people that live there are suffering financial repression they're suffering horrible economic calamity and george osborne in a moment thinks you're in king is ben bernanke is equivalent to the bank of england and he likes to sit back he doesn't have a flatulence problem he's got a gastrointestinal problem that's his contribution to monetary policy around the world and he blabs a few things or some so i can but he's basically in the financial repression game

he's interest rates artificially low so that grannies you know the new george osborne budget it takes more money five billion pounds more from retirees and pensioners and puts it into the pockets of kleptocrats in the city that's on top of the forty five billion pounds that almost boring cameron engineer for theft from pensioners and grannies into the part of the speculators who if you're a park leader h.s.b.c. or the old lehman brothers over doing is going and shove it up their nose that's all they do a friday or saturday i go to the people in the see plenty of bankers all their back making snorting cocaine well let's look at these facts here because the fact is here you have the pilots of the economy of the financial sector in the united kingdom and they've blacked out the gauge that. tells them that there is widespread fraud and money laundering and toxic derivatives that have destroyed their economy so because of that he doesn't see it in fact the solution offered is the figures

could reignite expectations the bank of england may need to add additional stimulus to bolster growth now isn't this the same exact thing that actually has caused these problems yes it is it's more debt for sun cash it's debt because the bank of england has no cash all they do is they lower the reserve requirement for the entire system globally which means that they increase the debt load which means more repression which means more debt service which means more necessity to move billions from the pockets of those who thought they were getting any kind of return in their pension account into the pockets of the speculators exactly so when the pilot does not know and understand and trust his gauges he often causes a stall mid-air as that air france flight from brazil to paris that crashed it was caused by pilot error when they stole the plane by doing the exact opposite of what they were supposed to do they pulled up sharp when they should have been to

wherever they were going right and the people in the u.k. or the u.s. who are suffering as a result they need to understand that the suffering is being organized by urban king in the u k. rick in the u.s. mariel draggy and the e.c.b. . they have to understand what's going on here the the enemy is not al qaida it's not iran it's not anything except central bankers it's not an enemy it's what we're saying is these guys are too arranged they're going they are running up and down our financial economic and monetary aisles they must be tackled and stopped we the passengers on this plane will not stop our central bankers from destroying our economy let's look at the result of us sitting there like toads you know with nothing to do and letting these guys run amok the

rich get even richer new statistics show an ever more startling divergence between the fortunes of the wealthy and everybody else and the desperate need to address this wrenching problem even in a country that sometimes seems a near to income inequality these take ways are truly stunning so remember just like above we saw stunning shocking oh we keep on being shocked how surprised why because we've blacked out the gauges so you're suggesting that these central bankers they need to be tackled they need to be stopped rising up because we can't just sit there like passive toads waiting for the plane to go down so when the it comes out of the letter system in washington almost all the way the office of the federal reserve bank with little briefcase is just in somebody's car called. the strait jacket and cardamom to the insane asylum this is an analogy and i think you know you strap on a parachute and get off that guy's claim and if it means buying silver buying gold or doing something not to be subject to the mad zork pilot piloting our plane i'm

with you. so in two thousand and ten as the united states continue to recover from the recession a dizzying ninety three percent of the additional income created in the country that year. compared to two thousand and nine a whole two hundred eighty eight billion went to the top one percent of taxpayers those with at least three hundred fifty two thousand in income so compare this and the clinton era expansion forty five percent of the total income gains lots of the top one percent in the bush recovery the figure was sixty five percent and now it's ninety three percent so you see here is ben bernanke he he's in control of the system what do they do they put zero percent who does that go to the rich people because essentially you've got to think of it like this there are some of us there in the lighter fluid business they burn down a house and the solution is to burn down ten times more of that number of houses and by the way they got to buy a lot of fluid from the same people sold

a lot of soul to begin with that's wall street so of course are going to make more money. and then finally max here's another example of how the government the guys in charge of flying our global economic plane how they help empower the bottom ninety nine percent f.h.a. bailout risk looming larger after guarantee binge mortgages so the federal housing administration won't be able to earn its way to financial health this year increasing that chance it will need a taxpayer bailout based on an updated forecast from moody's analytics which provides the agency's housing market analysis the u.s. government mortgage insurer which guarantees one point one trillion in home loans had been counting on robust growth and home prices to help rebuild this insurance fund after paying out thirty seven billion dollars to cover defaults the past three years according to an annual report to congress well the thing is and he touched on it already is that if the entire globe is the leveraging of the entire globe is in

recession depression then the f.h.a. we're talking about here they're going to be bailing out themselves or some ancillary institution based on the aggregation of more deaths and say they talked about reserves on the balance sheets they talk about assets on the balance sheet they're talking about debt and every time they talk about a restructuring or a bailout they're talking about increasing the debt over the assets which of course are completely impaired people of m.f. global realize this their assets were impaired they have no assets it was a joke and more of this is happening as you see in deeper down into the muck of realization of its non existence you come to this do you hear of or did you hear that i did that's called gold at the very bottom of this entire posies scheme or about thirty thousand tons of gold in the hands of central bankers and there's

about one hundred sixty thousand tons of gold in the globe in toto and that's where we're going and the rest of the world understands it that's why the central banks are buying it and that's why countries like iran china russia are trading it with each other to get out of the parties game that is the u.s. dollars. well max exactly and as this story shows the reason the rich got richer in a deflationary environment was because they were able to transform their bad assets to a passenger sitting there like codes on the freaking economic bad that they pass about assets to the banks of the banks passed to the central banks of the central banks are passed on to us through austerity measures and then the those are working so they're passing it on back to the banks or then passed it on back to the central banks and that every time you go around the circle you make a cd so that money goes up to the bank or the terrorist at the top like jamie done terrorist. and the cycle continues until you get to

hold gold and this is a new novel as night follows day states are reflecting what's going on patrick thank you max don't go away much more coming away to say whether. something good what is happening on the streets no is there you go to point to very wild cards without however i totally disagree i don't think the parts you got. we're still waiting for the actual resolution to have. the filmmaker. believes. the rector's coast was a real life. prison on the margins. yes

welcome back max keiser it is me this is the kaiser report must go to las vegas and talk with erin crown of n l hyphen implode dot com where there have bed three hundred eighty eight implosions since two thousand and six aaron welcome back to the kaiser report a max good to be back all right aaron in the first half of the show we cover the story of f h a housing bailout facing a bailout risk after guarantee binge tell us about the f.h.a. and its role in facilitating fraud in the transfer of the costs that the fraud is to the taxpayer. you know f.h.a. was founded in the that's the depressions basically provide support to an ailing housing market and like so many well meaning programs you know maybe medicine initial goals but stuck around and basically turned into

a gigantic venue for private actors to you know to raid the government coffers and indirectly raid the taxpayers and the problem being that a sensibly f.h.a. self-supporting has its own insurance fund socially kind of deal like f.t. i see the problem being and the actuarial assumptions and the underwriting so the question is you know what happened to this thing and the housing boom you know and potentially other periods like it where underwriting standards became shoddy if not criminal and these things go into. a program like f.h.a. and begin to violate the actuarial assumptions and therefore the solvency of this thing so people are starting to catch on that there's a big problem with f.h.a. in the way it could be the latest housing bubble and the you know mortgage free for

all and the housing market crash and i would i would certainly agree with that it's it's in big trouble and we're starting to see mainstream reports catching on to this and potential need for a bailout and there were two reports i believe just in the last six months alone one was from wharton and one was from george washington university and with these reports found as basically if you do any sort of legitimate fundamental analysis of what's in if a cheese portfolio it is way worse then their official assumptions and projections of their own solvency to the tune of fifty fifty billion plus ok so at bates it's part of the securitization financialization of the economy of the banking sector which is that the mid biggest piece of a condom e it's been going on for decades and it's about taking the

mortgages and re offering them and slicing them and pricing them in repackaging them and it becomes a bloated middle of the american global economy and what supposedly is backed up by assets these assets are the houses themselves or the mortgages or just the derivative of a house to house them solve this post be at the bedrock of this thing but the house prices seem to be continuing to fall a year las vegas which is one of the biggest trouble spots in america house prices in las vegas are doing what now well they're continuing to decline and that's that's the case certainly in the worst bubble spots in the country and overall we're still seeing home price declines. and you see you're seeing some of these reports are going to realize you can't pretend like f.h.a. didn't it's projections that you're going to get home for race increases basically saving them and saving the f.h.a. insured it's fun if you've got the opposite in reality which is continued declines so you know this is this is obviously reality coming in you know the real reality

train crashing through. me had one thing to what you just said so if it is a little different than most secured eyes mortgages in that goes into a special securitization called a genie may which is explicitly government backed so if you can if you're a mortgage originator and you can manage to get an f.h.a. loan underwritten by f.h.a. . which could be a shoddy loan some sort and it passes muster for at least an initial period of up to two years it goes into one of these ginnie mae securities and it becomes government backed explicitly so basically when she get in the gate with a potentially. poorly written possibly fraudulently limply underwritten run into you if a.j. you're basically home free unless the government gets its act together to come and see you for organized fraud which is starting to happen now right so as you point

out once you get into the gates or in other words once you enter the ponzi scheme like a bernie made up are these it requires more people to go into what they call feeder funds to feed the ponzi scheme f.h.a. any may fannie mac. freddie mac. anyway they're all besley bundled together and there's huge parties where the at all i doubt that it's houses without price to think about and as the economy continues to strike and as tax revenues continue to collapse because everyone is continuing to pick up part time jobs at least a full time jobs then be bailouts continue but the bailouts are based on marquard money which means that the whole system becomes more unstable but hey top one percent is. gets richer in providing the arson that is the economy now you are the victim of a slap suit as a p.p. as a result of your reporting on a case of mortgage lending fraud related f.h.a. loans tell us about yeah this was related to one of the most egregious scams of as

i mentioned there are people who had various ways of fraudulently getting these mortgages underwritten by f.h.a. and backed by the government and one of the most egregious scams was what is called seller funded down payment assistance and these operations are more than one of them would arrange to get the meager three percent down payment required by a just so the borrower had some skin in the game but they figure out how to get around that by basically having the seller mark up the home typically was a home builder trying to move inventory have the mark up the price take the difference and donate it to a nonprofit set up by these operations and then use that money to cover the downpayment so essentially unit with an inflated home loan back by the government homeowner who never brought anything to the table and this was probably recruited off the street and didn't know what the heck they were doing was not really educated as to what was going on usually deceived as to whether this so-called

donation for the downpayment was charitable so in effect you have a one hundred percent government backed home loan without the government being aware that this is a situation on my own basis probably without the borrower being aware and with be the lender the private lender the builder or other seller and the broker and possibly realtor making out like bandits through this transaction so there were a number of operations that did this the first was nehemiah corporation out of california and they got pretty great they started in the early ninety's and then the fellow. named christopher russell out of gaithersburg maryland saw what they're doing and thought hey you know this is great i mean we can really make out like gangbusters here and his innovation was to market the scheme aggressively to the sell side so that basically you could have

a builder that's sitting there has all this inventory they can move probably you know in late two thousand sixty thousand seven and attach one of these down payment schemes to it to basically move the inventory at any price and chuck chuck it as future toxic waste onto the books of f.h.a. so we wrote about one of these schemes russell's latest company was operations called the great america program and this was after an i.r.s. crackdown on the scheme and so to get around that he started laundering the money through an indian tribe so that it would he be basically presented as government funds so it could still see squeak in and pass muster. so you know its forces still wasn't legitimate it was just a dodge but finally in two thousand and eight in the housing bill congress itself woke up at the behest of hud and explicitly outlawed these schemes they basically

put a provision in that said you can't launder money to get around the f.h.a. downpayment requirement so they had to shut down but it wasn't all we wrote about that on our site and said hey this is what was going on quoted government reports in the i.r.s. ruling when they cracked down on it and say this is completely ridiculous that this was going on and there was only at that point that they sued us. so they tried to shut us down to get us to take the article down basically for for bringing visibility into the whole scheme and now this scheme is starting to be understood as a major problem with f.h.a. and if you look at the quantity of loans that went through these solar funding down payment schemes you you get a number like a one hundred billion dollars or so of these. as a p.p.a. linked loons that are defaulting at rates i believe it's something around thirty percent oh let's talk about these lapses for a second so people are broadly in terms of who uses the slapp suit it seems more

like a fly by night sole operator than let's say a j.p. morgan or goldman sachs trying to silence people yeah i tend to find this is the third sure of all this libel suit that m.o. employed has been you know with and i tend to find that it's the mid-level companies like such as predatory mortgage operations that in most cases have had to shut down but in some cases continued to try to push these lawsuits to try to save face but generally they are vulnerable to their wrongdoing coming out and becoming known when in the past and often cases they've had run ins with the regulators and have have paid paid their protection fees you know they paid little settlements or they've pushed back on technicalities and lawsuits and things like that and essentially been allowed to keep keep trucking so they don't like it when you know snotty nosed blogger independent online reporter uncovers that there is actually

something much more widespread and organized going on and you know the government's not going to run and help such people because typically that the regulators have failed in these cases and there's going to be generally little sympathy from anyone else because you get allegations of oh it's just someone who's disgruntled or just picking on this upstanding company it's paid its dues. so that's that's the kind of situation it's generally a mid-sized financial company against an independent journalist or blogger someone who basically doesn't have their own in-house legal counsel or legal team that they know they can intimidate them with a lawsuit and possibly just just bankrupt them or get them shut down by force all right so now finally you keep an eye on the mortgage lenders what's the next fraudulent practice we should look out for the big thing out there is people who are looking for help with loan mobs so there are

a lot of scams out there with people who supported you friends are going to ellis' or give your loan modified so. be careful about that generally you want to get a lawyer on your side when you're facing foreclosure and looking to get a loan not so that's that's the hot area for free for fraud basically right now oh right well maybe it'll be offered as a closed and cross party t.f. on the york stock exchange a new way for people to buy into fraud that is america dot com all right erin crowe thanks so much for being on the kaiser report thanks max all right that's going to do it for this edition of the kaiser report with me max kaiser and stacy herbert and i thank my guest aaron crowne from an al hyphen implode dot com and i sent an e-mail please do so at kaiser reported r t t v dot are you until next time last night are saying by all.

if. russia would be so much brighter if you knew all about.