in broadcasting live from our studios in central moscow this is our chance to get right to your top stories. syria says attempts to topple the assad regime have come to nothing as a u.s. led a pro opposition group gathers in turkey to discuss ways of ending the conflict. trying to slimes washington before moving ahead with sanctions that penalize companies that help iran to export oil. and cities across the globe are plunging

into darkness switching the lights off for earth hour moscow also joined in on the event. next is it time to pray for the high flying american economy rapidly losing altitude skies or has all the answers. x. prize or this is the kaiser report attention attention this is your captain speaking stacey herbert. in this is your captain freaking. bonzai news exclusive pilot goes 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 that went a little bit bizarre on the flight to las vegas yet well what happened he burst out of the cockpit running down the aisle naked looking for his peanuts well max passengers subdue screaming jet blue captain as midair 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. is the pilot of the american economy and 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 is zooming up to danger. and bernanke is not doing the batteries blinded or ease with the stewardess or talk about cheap fares this guy's got kicked bears he's running around his butt cheeks saying about looking for peanuts although 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 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's just basically taking black pain and you know spraying it over their gauges so i don't see that gauge you

go in front of congress and say don't look at it just believe me we're saying and of course it just is there to promote the agenda of the central banking authority and the club talk or say and as a result we've 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 who shot the cockpit always officially saying. well of course he's trying to create 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 wear off he's going to be like that coney guy calling twenty twelve guy running

down the street buck naked slapping the ground like a gorilla could do the quantities of this ball that he looks got a look at a relatively old you know alpha gorilla sitting back there you know farting. i mean 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 contracts had more than expected in the last three months of two thousand and eleven shrinking point three percent as a country is dominant services sector weakened 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 and mervyn king zimmermann 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 a lot of terry policy around the world and he blabs a few things or some so i think 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 clipper 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 berkeley's or h.s.b.c. or the old lehman brothers over doing is going and shoving it up their nose that's all they do

a friday or saturday night go to some 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 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 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 crash 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. breaking the u.s. mariel draggy and the e.c.b. . but then you 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 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 take ways are truly stunning so remember just like above we start stunning shocking all we keep on being shocked how surprised why because we blacked out the gauges so you're suggesting that the central bankers they need to be tackled they need to be stopped let's not be we can't just sit

there like passive toads waiting for the plane to go down so when they it comes out of the letter system in washington almost all the way the office of the federal reserve bank with little grease case you should just send somebody. on a straight jacket and call them up to the insane asylum and 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 blows zork pilots 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 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 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 a lighter fluid business they burn down a house and the solution is to burn down ten times more that number of houses and by the way they've got to buy a lot of fluid from the same people sold a lot of sort of 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 the guys in charge of flying our global economic clean how they help empower the bottom ninety nine percent. bailout risk the 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 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 us 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 write 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 is less depression then the f.h.a. would have 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 reserves 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 had 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 that did you hear that i did that's called gold that's the very bottom of this entire posies 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. 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 a freaking economic bad well that they post about assets to the banks of the banks

passed to the central banks of the central banks or passed it 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 to the central banks and that every time you go around the circle you make a fee so that money goes up to the bank or the terrorists at the top like jamie diamond terrorist. list and the cycle continues until you get to whole goals and this is a new novel as night follows day states are rethinking much because repaint humax went away once more tell me what to say rather.

yes welcome back max kaiser is me this is a cause a report must go to las vegas and talk with arian crown of m. heisman employer to come where there have been three hundred eighty eight implosions since two thousand. six aaron welcome back to the kaiser report a max could be that all right aaron in the first half we cover the story at a housing bailout facing a bailout risk after guarantee been tell us about the f.h.a.

and its role in facilitating fraud in france for of the costs that the fraud is to the taxpayer. you know if it 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 met its initial goals but stuck around and basically turned into a gigantic venue for private actors to him to raid the government coffers and indirectly raid the taxpayers the problem being that a sensibly f.h.a. self-supporting has its own insurance fund socially kind of deal 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 came 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 reports 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 the. washington university and what these reports found is basically if you do any sort of legitimate fundamental analysis of what's in f.h.a. is 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 that i'm a biggest piece of a lot of me and it's been going on for decades and it's about taking the mortgages and re offering them and so i send them a bicycle 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 the mortgages are just a derivative 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 now year 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 seem to realize you can't pretend like f.h.a. didn't it's projections that you're going to get own price 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 reid reality train crashing through. only had one thing to what you just said so if she's a little different than most secure dies 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. managed to get an f.h.a. loan underwritten by f.h.a. . could be a shoddy loan some sort and it passes muster for at least an initial period of up to two years and 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 lindley underwritten. into f.h.a. you basically home free unless the government gets its act together to come and sue you for organize 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 burning made of ponzi scheme that requires more people to go into what they called peter funds to feed the ponzi scheme f.h.a. ginnie mae fannie backed freddie mac. fannie mae they're all best lee bundled together in this huge ponzi scheme where the underlying asset is houses but 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 a full time jobs then the bailouts continue but the bailouts are based on more car 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 fraught related f.h.a. loans tell us about you know this was related to one of the most egregious scams as i mentioned there are people who had various ways are frauds 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. ha 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 it 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 you end up 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 chad whether this so-called donation for the down payment was charitable so in effect you have a one hundred percent government back home 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 is transaction so there were a number of operations that did this the first was nehemiah corporation out of california and they got pretty brady started 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 toxic waste onto the books of f.h.a. so we wrote about one of these schemes russel's lay. the company was operation is 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 be presented as

government funds so it could still see squeak in and pass muster. and so you know sources still wasn't legitimate it was just a dodge but finally in two thousand and eight the housing bill congress itself woke up at the behest of hud and. explicitly outlawed these schemes to 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 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 say 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 down payment schemes. you get a number like a one hundred billion dollars or so of these as a as a p.p.a. link loans that are defaulting at rates i believe it's something around thirty percent also talk about this lapses first second so people are probably in terms of who uses the slapp suit that seems more like fly by night so a lot writer than let's say if a p. morgan or a goldman sachs trying to silence people yeah i tend to find this is the third said sure of all this libel suit that emily and you know with and i tend to find it's the mid-level companies like such as presence or mortgage operations that in most cases have had to shut down but in some cases continue to try to push these lawsuits to try to save face but generally they are vulnerable to their wrong doing 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 fifteen's 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'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 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 that's that's paid its dues so that's that's the kind of situation is generally a mid-sized financial company against an. journalists or bloggers 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 that's the next fraudulent practice we should look out for the big thing out there is people who are looking for help with loans. 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 or when you're facing foreclosure and looking to get a long model so that's that's the hot area for for for for basically right oh right well maybe it'll be offered as a closed 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 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 guests aaron crowne from an al hyphen implode dot com first i mean email

please do so at kaiser reported r t t v dot are you in for a lifetime max keiser standing by all. the. technology innovation. developments around russia. for the future are covered. home. from.

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