broadcasting live from moscow this is archie and these are the headlines. syria says attempts to top of the assad regime have come to nothing as a u.s. led pro opposition group gathers in turkey to discuss ways of ending the conflict. washington for moving ahead with sanctions that penalize companies that help iran to export oil. and to cities across the globe are plunging into darkness switching to light. the event. next is it time to pray for the

high flying american economy rapidly losing altitude or has all the answers. this is a cause a record attempt in the church and this is your captain speaking stacey herbert max if you mean this is your captain freaking. bungalow news exclusive those 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 what happened the burst out of the cockpit running down the aisle make it look in first peanuts well max passengers

have do 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 you know if 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 those wages is crashing but he's not doing anything about it you know they gave that shows inflation and stuff like energy and food is zooming up too dangerous and bernanke is not doing the batteries blinded henri's with the stewardess or talk about cheap

fares this guy's got cheek there he's running around the chief saying and looking for peanuts all day you know exactly max because when the pilots 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 flaps 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 he goes in front of congress to say go look at. just the word thing and of course he 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 he shouldn't talk to ways to push things flying. 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 won't tell you oh it's all fine yes man ben bernanke you running up and down the aisle seen everything is ok you know in fact it is all ok look when bernanke is meds wear off he's going to be like back kone guy called me twenty twelve guy running down the street buck naked slapping the ground with a gorilla stomach was duties of goodies with his ball that he looks like a relatively old you know alpha gorilla sitting back there you know farting. really that's all he does he goes in front of congress and he farts and he paid you

know they're saying 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 stuff shock slowdown in u.k. growth as g.d.p. contracts point three percent so britain's economy contracted more than expected in the last three months of two thousand and eleven shrinking point three percent as a 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 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 are suffering horrible economic calamity and george osborne in learning things you weren't kidding 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 if you think of some swank but he's basically in the financial pressure game huge 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 morning 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 all they're doing is buying cocaine and shoving it up their nose that's all they do a friday or saturday night go to some people in the supply bankers all they're back making 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 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 the 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 ssion 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 dove into 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 of the u k. ranking the u.s. mario draghi and the e.c.b. that's a but then they have to understand what's going on here the the enemy is not al qaida it's not iran it's not anything it's of central bankers it's not an enemy it's what we're saying is these guys are to arranged they're growing bizerk 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 nearer to income inequality these takeaways are truly stunning so remember just like above we saw stunning shocking all we keep on being shocked how surprised why because we've blacked out the gauges 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 the it comes out of the metro system in washington almost all the way the office of the federal reserve bank was a little briefcase you suggesting somebody called them in a straight jacket and got them off 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 or buying

gold or doing something not to be subject to the mad bones 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 to compare this and the clinton era expansion forty five percent of the total income gains when it'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 do 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 a house and the solution is to burn down ten times more of that number of houses

and by the way they've got to buy a lot of fluid from the same people who sold a lot of to begin with that's wall street so of course you can make more money. and then finally max here is another example of how the government got ice and charge of flying our global economic plane how they helped impoverished 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 work to insure 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 you 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. we're talking about here they're going to be bailing out themselves or some ancillary institution based on the aggregation of more deaths you say they talk about reserve on the balance sheets they talk about assets on the balanchine 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 sink deeper down into the muck as a 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

are 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. dollar. no 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 the passenger 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 passed on to us through austerity measures and then those aren't 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 fee so that money goes up to the banker the terrorist at the top like jamie diamond terrorist. list and the cycle continues until you get to

a little gold and this is an inevitable as night follows day states are thanks must be on faster can you max not go away much more coming away to say whether. it's technology innovation all the developments around russia we've got the future covered.

something to tell you what is happening on the streets now is there you go south two forty three very wild parts of the county however i totally disagree i don't think the party got. we're still waiting for the actual resolution to happen. yes welcome back max keiser it is me this is the kaiser report must go to las vegas and talk with erin crown of m. l. hyphen employee dot com where there have bad 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 hour of the show we cover the story of 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 nailing 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 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 deal like f.t. i see the problem being 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 some patients 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 mortgages. 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 is basically if you do any sort of legitimate fundamental analysis of what's in it 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 f.h.a. it's part of the securitization financialization of the economy of the banking sector which is there amid biggest piece of a lot of me it's been going on for decades and it's about taking the mortgages and re offering them and so i still haven't deicing repackaging them and it becomes a 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 relative of a house to house them solve this both be at the bedrock of this thing but the house prices seem to be continuing to fall in 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 so you're seeing some of these reports are going to realize you can't pretend like i think she didn't it's projections that you're going to get one phrase increases basically saving them and saving if you change sure 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 i think she's a little different than most securitized mortgages and that goes into a special securitization called ginnie 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. . gooch could be a shoddy loan some sort and it passes muster for at least an initial period of up to two years he 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. into f a j you're basically home free unless the government gets its act together to come and sue 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 call the feeder funds to feed the ponzi scheme f.h.a. any made a fanny back freddie mac. and he may they're all besley bundled together in this huge ponzi scheme where the underlying asset is 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 the bailouts continue but the bailouts are based on more

poured money which means that the whole system becomes more unstable but hey the top one percent 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 fraud related f.h.a. loans tell us about you know this was related to one of the most egregious scam. as i mentioned there are people who had various ways are frauds 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 faint 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 as 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 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 my own 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 great they started in the early ninety's and then

a fellow named christopher russell out of gaithersburg maryland saw what they were 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 his 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 be you'd be basically presented as

government funds so it could still squeak in and pass muster. so you know sources still wasn't legitimate it was just a dodge but finally in two thousand in the housing bill congress itself woke up at the behest of hud and explicitly outlawed these schemes they 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 coded 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 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 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 seller funded down payment schemes you you get a number like a one hundred billion dollars or so of these. as a p.p.a. link loons that are defaulting at rates i believe in something around thirty percent oh let's talk about these lapses first second so to speak are broadly in terms of who uses the slap suit it seems more like a fly by night sole operator than let's say of j.p. morgan or a government sachs trying to silence people yeah i tend to find this is the third shrivel as libel suit that m.l. employed has been hit with and i tend to find that it's the mid-level companies like such as predatory mortgage operations that i 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've 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 some you know snotty nosed blogger or 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 and help such people because typically 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 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 a blogger someone who basically doesn't have their own in-house legal counsel or

legal team that they know they can intimidate him 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 purporting to do forensic analysis or get your loan modified so just to be careful about that generally you want to get a lawyer on your side when you're facing foreclosure and looking to get along not so that's that's the hot area for free for fraud basically right oh right well maybe it'll be offered as a cost and trust or a.t.f. on the york stock exchange a new way for people to buy and to 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 geyser and stacey herbert and i thank my guests aaron crowne from an al hyphen implode dot com i sent

an e-mail please do so at kaiser reported r t t v dot are you and so next time x. guys are saying by all.