the free media. news stories here on. syria says one attempts to whilst the regime of failed even as a u.s. led coalition group of nations meets with the aim of aiding the rebels cause. beijing levels criticism of washington ever it sanctions against countries to keep oil from iran the u.s. wants to stop to iran of income in an attempt to make it abandon its nuclear program. and cities across the globe. to do their bit for the environment

is among those plunged into the. well that's it for me in the news team for the moments here on t.v. will be back with more in half an hour from now in the meantime it's time to pray for the high flying american economy rapidly losing altitude perhaps. has a leonsis. kaiser this is the kaiser record of the church of the church and this is your captain speaking stacey herbert max to humean this is your captain freaking. bongo news exclusive pilot goes birds are watching jim cramer there and pressing the prince 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 yet what happened the first time the topic running down the aisle make it look in first peanuts well max passengers subdue screaming jet blue captain as mid-air rant diverts flight 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 if it is the pilot of the american economy that he's not reading instruments very well that inform him about what the economy is doing the gauge there that says wages is

crashing but he's not doing anything about it the gauge that shows inflation and stuff like energy and food is zooming up too dangerous and bernanke is not doing the batteries blinded or ease with the stewardess or talk about cheap fares this guy's got cheek there and he's running around his butt cheeks and out looking for peanuts all day you know exactly max because when the 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 bernanke is flying the economic plane of america and when the gauges are showing him what he should be doing making some adjustment to the flops or doing something correct to actually sustain economic flight he just basically taking black pain and you know spraying it over that gauge and saying i don't see that gauge because of part of congress to say don't look at. just words saying and of

course it just is there to promote the agenda of the central banking authority and the club talk r.c. and as a result we got economic armageddon in response to this jet blue situation we have this headline jet blue's c.e.o. barger pilot is a consummate professional so course you talk about the pilots a consummate professional is something cockpit always took place trying something. well 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 on tell you oh it's all fine yes man ben bernanke you 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 connie guy connie twenty twelve guy running down the street buck naked slapping the ground like a gorilla going to want to do this is a good reason of his ball that he looks like

a relatively old you know elf or gorilla sitting there you know farting. ok that's all he does he goes before the congress in these parts and he paid you know they say oh you're starting 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 spot shock slowdown in u.k. growth as g.d.p. contracts point three percent so great is a commie contracted more than expected in the last three months of two thousand and eleven shrinking point three percent as the country's 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 all starting 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 and mervyn king saying we'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 to some so i can but he's basically in the financial repression game he has 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 clip the krauts in the city that's on top of the forty five billion pounds that almost born in cameron engineer the theft from pensioners and grannies into the pockets of speculators who if you're a barclays h.s.b.c. or the old lehman brothers over doing is buying cocaine and shoving it up their nose that's all they do a friday or saturday night go to some people who see plenty of bankers other naked snorting cocaine well let's look at these facts here because the fact is here you

have the pilot of the economy of the financial sector in the united kingdom and they've blacked out the key that. tells him 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 it's not 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 necessitate 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 they 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. ranking the u.s. wario draggy and the e.c.b. . they own their thunder stand what's going on here the the enemy is not al qaeda 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 in 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 results of us sitting there like tones 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 nearer to income inequality these takeaways are truly stunning so remember just like above we saw stunning shocking although we keep on being shocked how surprised why because we've blacked out to gauge is the road so you're suggesting that the 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 they becomes out of the metro system in washington almost all the way the office of

the federal reserve bank with a little briefcase you suggesting somebody call plant in the strait jacket and call them up to the insane asylum this is an analogy and i think you know you strap on a parachute and get off that guy's plane and if it means buying silver buying gold or doing something not to be subject to the mad zircon pilot piloting our plane i'm with you on that 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 to compare this in the clinton era expansion forty five percent of the total income gains let's at 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's in control of the

system what should they do they put zero percent who does that go to the rich people because essentially you don't think of it like this there are some of us there in the lighter fluid business they burn down the house and the solution is to grow and ten times more that number of houses and by the way they got to buy a lot of fluid from the same people who sold the lighter fluid to begin with that's wall street so of course going to make more money. and then finally max here's another example of how the government a guy some charge of flying our global economic plane how they helped impoverish the bottom ninety nine percent f.h.a. to bail out risk looming larger after guaranteed binge mortgages so the federal housing administration won't be able to earn its way to financial health this year increasing the 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 its 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 recessions last depression then the f.h.a. what they're talking about here they're going to be bailing out themselves or some ancillary institution based on the aggregation of more debt is say they talk 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 had no assets it was a joke and more of this is happening as you sink deeper down into the muck of

realization of its non existence you come to this do you hear that did you hear that i did that's called gold at the very bottom of this entire posy 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 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 us passengers sitting there like toads on the freaking economic bad well that they passed about assets to the banks of the banks passed to the central banks of the central banks are passing it on to us through austerity measures and then those

are working sort of 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 bankers the terrorist at the top like jamie diamond terrorist list. and the cycle continues until you get to a little gold and this is a new level as night follows day states are banks what's going on keyser paint humax not going but for coming i want to say whether. something good what is happening on the streets no is the you know tough to point to a very wild card to the south however i totally disagree i don't think the parts of the. we are still waiting for the actual resolution to have.

the filmmaker. and. the lead in. the director's cut of real life. prison on charges. yes welcome back kaiser is me this is the cause a report let's go to las vegas and talk with erin crown of m. hyphen implode dot com where there have been 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 the show we cover the story 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 depths of the depression to 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 raid the government coffers and indirectly raid the taxpayers and the problem being that the sensibly f.h.a. self-supporting has its own insurance fund socially kind of feel like if the i see the problem being the actuarial assumptions and the underwriting so the question is you know what happened in 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 some sions 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 wake of 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 the ports catching on to this and potential need for a bailout 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 what these reports found is basically if you do any sort of legitimate fundamental analysis of what's in if a chines portfolio. is we worse then their official assumptions and projections of their own solvency to the tune of fifty fifty

billion plus ok so f.h.a. it's part of the securitization financialization of the economy of the banking sector which is now and the biggest piece of a lot of me and it's been going on for decades and it's about taking the mortgages and really offering them and slicing them and bicycle repackaging them and it becomes this bloated middle of the american global economy what supposedly is backed up by assets these assets are the houses themselves or the mortgages or just the derivative of the house the house themselves both be at the bedrock of this thing but the house prices seem to be continuing to fall now 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 starting to

realize you can't pretend like f.h.a. didn't start actions that you're going to get home for race increases basically saving them and saving the f.h.a. insurance fund 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. only had one thing to what you just said so effigies a little different than most securitized mortgages and that goes into a special securitization called jenny mae 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 of 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 loan into f.h.a. 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 obvious game it requires more people to go into what they called peter of funds to feed the ponzi scheme f.h.a. any may be bad freddie mac. fannie mae they're all besley bundled together into this huge ponzi scheme where the underlying asset is houses but the house prices are going to go down and as the economy continues to shrink and as tax revenues continue to collapse because everyone is continuing to pick up part time jobs at least full time jobs then the bailouts continue but the bailouts are based on more part money which means that the whole system becomes more unstable but hey the top one percent is. it 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 fraught related to f.h.a. loans tell us about yeah this was related to one of the most egregious scams as i mentioned there are people who had various ways or frauds and only 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 f.h.a. just so the borrower had some skin in the game but they'd figure out how to get around that by basically having the seller mark up the home typically has a home builder trying to move inventory have them 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 down

payment so essentially you end up with an inflated home loan backed 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 down payment 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 a limb by limb basis probably without the borrower being aware and with the 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 pretty sorted in the early ninety's and then

a 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 of 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 be you'd be basically presented as government funds so it could still say squeak in and pass muster. so you know

sources 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 it basically put a provision in the 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 till we wrote about that on our site and said hey this is what was going on could it government reports in the i.r.s. ruling when they cracked down on it and said hey this is completely ridiculous that this was going on and it 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 to 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

downpayment schemes you you get a number like a one hundred billion dollars or so of these as a as a loon's that are defaulting at rates i believe it's something around thirty percent also talk about this lapse it's first second so people are broadly in terms of who uses the slapp suit it seems more like fly by night sole operator if then let's say it j.p. morgan or goldman sachs trying to silence people yeah i tend to find this is the third shrivel it's libel suit that m.l. included and you know with and i tend to find 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 had run ins with the regulators and have have paid paid their protection finian's you know they paid little settlements or

they've pushed back on technicalities and lawsuits and things like that and socially been allowed to keep keep trucking so they don't like it when you know snotty nosed blogger independent online reporter uncovers that there's actually something much more widespread and organized going on and you know the government's not going to run into 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 and it's that's paid its duty as. so that's that's the kind of situation is 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 a loan. so there are a lot of scams out there with people reporting to do forensic analysis or get your loan modified so let's be careful about that generally you want to get a lawyer on your side now when you're facing foreclosure and looking to get a loan not so that's that's the hot area for for for fraud basically right now well maybe it'll be offered as a closed end trust or a.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 has been good for this notion of the kaiser report with me max kaiser and stacy herbert i thank my guests aaron crowne from an l. ife an enclosed dot com does that mean e-mail please do so at kaiser reported r t t

v dot are you and i max keiser saying.