but appraise this and with hundreds of witnesses millions of documents and a trio of nationally hated figures the trial is proving to be one of the most complex and controversial in the history of european financial crimes but here's the thing at least ireland is attempting to bring justice to those wrong during the financial collapse and here in the us home of the so-called masters of the free world nothing not one banking executive has been brought to trial sure there have been some fines a couple senate hearings the impression that some form of action is taking place but no real action nothing is taking place in fact jamie dimon he just took on twenty million dollars for a job well done this year at j.p. morgan my new same year that he had to pay billions tens of billions of dollars to the justice department of justice will let you decide.

first well and has been critical of the us his response to the housing crisis now while the housing bubble was ongoing he was uncomfortable with the money and debt used to build the american dream but now that we're in a tepid recovery chris believes of big problem keeping us from a more robust recovery is household debt specifically the debt from residential mortgages he wrote all about this in his book titled inflated now i'm keen to hear chris's views on housing mortgages jobs and all the rest of the stuff chris welcome to boom bust it's so good to have you here now i want to start off by asking do you know i've just spent the past few minutes talking about how the irish bank executives they're being held accountable for their actions during the housing bubble now in the u.s. the f.b.i. warned of an epidemic an epidemic of fraud in the housing market but as far back that was two thousand and four that's when they started warning about it nothing's happened and in ireland it's occurred. just this past week u.s.

nothing the question is do you think any american banking executives are going to be held accountable for what they've done during the financial crisis well no i mean timothy geithner the former treasury secretary and larry summers and others have basically said that you can't prosecute the heads of the big banks because it would be damaging to confidence they are afraid of systemic risk and all the southern nonsensical concepts so i would doubt it also so much time has gone by and you've had some other changes in the regulatory world that it would be difficult to prosecute officers and directors of these banks and let's not forget citi group bob rubin whole cast of characters from the new york business community all of whom presided over the world to believe the collapse of that bank and nothing was done so i wouldn't hold your breath. i certainly won't pay now since the crisis began big american banks that paid tens of billions of dollars in fines for wrongdoing

however no one not a single person has been convicted with the exception of one junior trader at goldman that french guy but what do you think about the shareholders being the only ones who have to pony up for fraud committed by bank employees. well it's the shareholders of the banks and also don't forget the bond holders of private mortgage securities are the ones who foot the bill for these settlements that are enriching the politicians who have all of these attorneys general a.g. stands for aspiring governor don't forget and they levy for fines on these banks for a variety of wrongdoing and build their work here in california today kemal the terrorists who put a consumer or a homeowners bill of rights in place carried off the lion's share of the settlement which she's allowed to distribute is she sees fit so there's a lot of politics involved here in the end it's not just the bankers who are the

evil doers it's the politicians as well right it's who's worse it's hard to tell now i want to go right to the housing market. and i'm sorry yeah exactly and it was the right along i want to talk about housing market stuff this is your specialty and chris you've been critical of how policymakers have dealt with underwater mortgages and you've written that congress needs to take a lesson from the great depression and start to aggressively restructure millions of underwater mortgages how do you propose they go about doing that though. well the banking industry back in two thousand and five when they made changes to the bankruptcy laws for a federal judges from restructuring mortgages you know today in the u.s. you still have somewhere between twenty and thirty percent of all homes that have mortgages underwater in other words a house is worth less than the debt so not only can these people not move not go get jobs in new parts of the country but in many cases they're not paying the mortgage anymore so you have this kind of dead weight in many markets nevada

florida. michigan a lot of these states still have very high percentage of the homes that can't trade now what this is done strangely is that makes prices go up here in california for example you've had a huge run up in prices in places like san francisco down here in the south in orange county in part because a good bit of the inventory can be sold so you have a limited supply you have people want to buy homes that actually pushes the house prices up more ironically right ironically it's a very strange situation and i think it's actually a drag on the u.s. economy now and like you mentioned housing prices they're on the rise and fact that's the fastest pace of rise since two thousand and six but underneath the surface all of those underwater and defaulted mortgages they do matter i'm asking you know can you explain to viewers what's going on with foreclosed and bank owned sales versus the rest of the market. well if you think of the northeastern states

are states where you typically need a judge to bang the gavel before the bank can take possession of the house you're talking about years between the point of default and when the creditor gets her hands on the home and they can resolve it so in states like california the southwest they've pretty much gone through the human torrie of homes that needed to be resolved in the ne no we're still basically frozen in place again in part because of consumer protection laws the politicians put in place laws that make it difficult to foreclose and it actually hurts homeowners generally because they can't sell their house and the people who do want to sell have a market or the volumes of have fallen dramatically you know what we have here is a case where and this goes to ireland it goes to the e.u. in general not just for housing where the politicians don't want to restructure bad debt they'd rather print money and try and inflate their way out of the problem and

it's not working so here in the u.s. of fed's kept rates very low they've been trying to essentially deal with the problem through inflation and they can't make inflation go up in fact if anything it's been going down in this one respect so you know we have a problem that everyone wants to ignore but what you've got to remember is that in the one nine hundred twenty s. when the housing bust started in one nine hundred twenty seven it went for about three or four decades before you soaked up the excess inventory in states like florida and the southwest even in those days so we're really playing that movie you could see florida struggling in terms of home prices for years because nobody wants to deal with it particularly the northern part of the state that's not as attractive meanwhile down in the south miami that area you have arjen times italian right half of latin america moving there it's capital flight so it's a very interesting story and as with all things in real estate it's a local story or a market is different particularly florida florida is just always aware and one to

me about. but chris if you're coming to you know argentina is that it's all going there it has stood out because somewhere about as well as well as for a lot of other latin american countries now chris your company carrington it's a soup to nuts residential housing company you cover investments. me origination asset management service and rentals all of it your name it so you have a really good read on the market now there's been a huge influx of investor capital into the market especially in distressed regions like you mentioned phoenix big a successor and now here's the question are the professional investors the cash buyers buoy in the market in a way that's bidding up prices for everyone else. well they certainly have an advantage in the sense that they have cash and they don't have to qualify for a mortgage also it's very difficult for consumers to get a mortgage today you need a very very high credit score to get a mortgage from a bank not so much with a non bank like carrington and you know the other thing keep in mind is that home prices generally probably peaked at the end of the second quarter of last year even

though certain hot markets are still pulling up the indices that everybody watches in the media if you really look at home prices at the local level markets like massachusetts new jersey they've all stopped going up so what you have of now is said if you look at the case shiller index the latest press release from s. and p. what it tells you is that those five markets pulling the average up remember it's an average but generally speaking in the rest of the country you've seen a pretty marked deceleration in home price appreciation over the last six months so my guess is that the investors who got in in the last year year and a half are a little bit late we stopped putting investors into rental homes two years ago and fact most of those have been sold so you know our view carrington is that rent is pretty much done as far as that ario trade you were talking about before we're the biggest buyer of non-performing loans in the country and we like that business

because we go and we fix some in many cases we keep the family in the house. it's a very good business but to just go out and buy homes in the open market today i don't think that's a really good investment strategy because i think home prices will be flat for the next couple years chris thirty second fact i want to ask a question do you see any local markets becoming bubble. well it's a bubble in a sense that you have limited supply and the buyers whether they're investors or home owners or bidding up houses that are available to trade so you could call it a bubble but it's not a credit induced bubble in the old sense because the fed has stopped but able to get credit to grow if it banks if anything you're underutilized right now they're not making loans it's fascinating you know the top six banks are out of the wholesale market completely so for a consumer to get a loan today it's very hard it's very hard and i know what you really put a cherry on my weekend ahead kind is that it's always better to be informed chris

thank you so much for being on the show that was author and investment banker chris whalen. coming up we're looking at the best of the best from this past week between jim rogers and sam and char we've assembled some seriously quotable quips you definitely won't want to miss this plus that harrison and i are tackling your viewer feedback in today's in the margins guys have some pretty insightful stuff this week way to go and we're pumped to discuss it on air but as we head to a quick break here's a look at some of today's closing numbers of the bell stick around. the european union likes to think of itself as one of the brighter in samara parts

of the world the european commission report on corruption the first of its kind the trees a very different picture in every single member country there is corruption in some cases on a massive scale so what can the e.u. teach the world of corruption. you don't know if you don't per car or responds to ruse. most everyone in my life that i cared about their goal much and then. i came askin well. i was so national champion in track and field and also i was able to go and qualify for the olympic games. you know nine hundred eighty eight i started to experiment with other drugs i had lost all the financial means that i. was really on the street.

black large brown can't. wait to break. free. there's a saying when you're in the arctic you have the entire world at your feet. she looks like a fairly simple shit but really she's not simple little girly i am full of people ever have access to the nuclear i spray just the real king here is that the polar bear and ice breakers come second not a single complex expedition to the arctic can be conducted with the russian nuclear powered fleet of ice breakers we've undertaken a unique operation. the northern sea route russia's arctic ice breakers.

little dancing happy friday now this past week we had some great great guests on a show jim rogers said some pretty remarkable stuff parts of which weren't even aired in our original broadcast plus sam and tara and francine mckenna said some things about the financial accounting world that you're definitely going to find interesting take a look at your opinion what's your emerging market share the most promise for investors right now. the best of places like me and mara north korea chido some some parts of the chinese economy they have said that they're going to

give incentives and spend a lot of money on some parts of their economy you should to russia russia is in good shape i mean this is astonishing to me russia doesn't have exchange controls russia has huge international reserves has natural resources totally disliked by everybody i mean russia's i'm sorry to put money in russia well you know i'm astonished i was very sure russia for forty six years even i even i am putting money in russia now now i did ask you did you say north korea and their. i did say if i could put all of my money into north korea i would know it's illegal for american so i put any money in the north korea but no north korea's of the north korea today is where china was in one thousand nine hundred ninety eight wonderfully exciting place where me and more was in two thousand and ten two thousand and eleven just beginning to open up in change now jim we spoke with george magnus last week this kind of a non sequitur but he told us the emerging markets crisis that it has only just

begun and i want to play you a clip from that interview so here it is. people are calling the volatility in these markets and emerging markets crisis is it an emerging markets crisis. well our i think it is ok because i think every crisis needs. a long road. now jim do you agree with george that an emerging market crisis is only just beginning. the problems in the emerging market and first for lots of emerging markets some better than others but there are some serious serious problems out there and they are going to get worse turkey indonesia india this is not over yet brazil there are plenty of them that have serious serious problems and it's not they're not being resolved part of the problem of course a major problem is the federal reserve in america has interest rates at such a tiny low level that people can borrow lots of money and that america is printing

a lot of money so there's plenty of money and the quidditch a lot of money to be borrowed and so a lot of countries have borrowed the money which cover it cheap rates which covers up their problems they haven't addressed their problems and so now now we've got a huge problem facing us and it's going to get worse this is not over yet you should be worried and be careful and be prepared now i want to ask you about trade agreements and there's a lot of talk lately about the trans-pacific partnership here in america want to what's your view on it and when the deal be good for growth. well open markets and free trade is good for everybody it makes everybody have a higher standard of living yes some people suffer as they get dislocated but overall in america three hundred twenty five million americans we're all better off some people some people be much better oh so i'm less better all put overall we're better off so cheap free trade and t p p assuming the conditions are more equitable

and honorable would be wonderful for everybody there's no question that opening markets is great do you want to go back and buy expensive t.v.'s again of course you don't you want to go back and buy expensive cellphones again of course you don't you want to buy cheap of fish and cellphones and products and that's what you get when there's open markets and free trade sam what do you think of companies like herbalife an amway and even avon whose entire business model is based solely on multi-level marketing. if i within my retirement from crime i'd start a multi-level marketing company put for believe based in utah because china doesn't want to. really so i feel as though that says a lot given that you who are a self-proclaimed former white collar crime or convicted white collar criminal. is multi-tiered marketing a fraud it's a quasar lies scheme to defraud people out of their money basically it's

a business of selling hope most of these people that are recruited don't make any money and even the ones that do make money if you factor in the time that they put into it it's below minimum wage you get a better living flipping hamburgers at mcdonald's. ok well here is someone who would agree with your activist investor bill ackman he's been extremely vocal about herbalife being a pyramid scheme and his fund pershing square capital it's so sure of it that he's taken a one hundred billion dollars short position in the company now the question is why would such a sophisticated investor be so vocal about a potential pyramid scheme if they weren't absolutely positively certain that it was in fact a pyramid scheme. well i believe that i believe that it's a pyramid scheme i don't think that herbalife is going to sue acme because then they'd be open up to discovery because that would give that subpoena power and you know you don't want to piss off short sellers going through your books of records now here's the question you know press waterhouse cooper they've come in and they've looked at the books they're new auditors and they've given them

a clean bill of health and herbalife they certainly have plenty of cash cash flow to fund the library at various ways like a prize i'm sorry to interrupt your pricewaterhouse coopers looking at the books as kind of like k p m g looking at crazier these books when we were words as a criminal i used to brag about what it did financial reports it's a nonevent in fact the big four accounting firms they feel between twenty five and forty nine percent of what it's inspected by the p.c.'s will be a nonevent. the accounting industry was complicit in the failures that created the financial crisis which obviously began in two thousand and seven certainly that's sort of the promise of a lot of what i talk about both on my blog you know other publications that now when i speak at events the auditors are right there in the middle and they work both sides of the equation so for example peter b. c is the auditor of j.p. morgan which was the major banker to an of global and of global they couldn't be

completely unaware of what was going on and of the transactions that might have caused problems same thing with ai g. and goldman sachs and the problems that they had with transactions and marking them correctly peter b.c. is the auditor of both a i.g. and goldman sachs and all of the auditors play important roles you know auditing government agencies like the fad we're below it is in charge like the treasury where k.p.n. g. is in charge and the tarp program which peter you see and ernst and young got lucrative contracts after the crisis to try to help clean up now can you give me a specific example of the types of transaction issues you're referring to. well let's look for example goldman. and global peter b. a c. was fully aware of weaknesses in their systems and weaknesses in their ability to control the transactions that corps and started doing he really pushed that company

way beyond its core way beyond the kinds of things that it was really in business for but investing in sovereign debt and peter you see never raised any kind of concern about the weak internal controls or the weak corporate governance corps and was trading on behalf of the company while also being chairman and c.e.o. in one supposed to be keeping an eye on everybody else there you have some awesome stuff from this past week the best of the best from don't bust time now for in the margins. it's in the margins but the one the only mr edward harrison now every friday ed harris and i put you the viewer into the driver's seat letting you steer the show with your comments questions and concerns all sent in social media twitter you tube

facebook you know all that stuff now let's get right to it our first comment comes from stevenson he writes. here it is free trade is good without social dumping you may pay less for your t.v. or cell phone but you definitely lose a lot of jobs it is and it is fair to ask which bargain is better in france before the huge industrialization of china things cost more but at least there wasn't structural unemployment as we see today i mean we were doing just fine but some economists said it said to us it could get better now we see if we had to ask the people to choose between paying less for consume for consuming or lose their jobs what would they choose there is no coming back don't don't don't. the question is. free trade friend or foe well you know that's the common i was going to. friend if you think of it in its real form but what we really have is men it's true

there's a big difference between free trade and manage trade and there are all sorts of little provisions that are slipped into this thing about nafta for instance in terms of the huge agricultural subsidies that we have so basically you know we're subsidizing the farm bills getting passed now hundred billion dollars bill ten billion of subsidies go into commodities and those are then shipped out to mexico you know obviously you have a huge price advantage if you're a massive agricultural company in the united states and that's going to destroy businesses and jobs in mexico so that's not free trade and that's what you get with these such a misleading you know free trade agreement such a misleading title i'm not going to another question of this comment it comes from and why it's a bunch of numbers he writes. money is a belief system there is no value in money the value comes from the belief that it will help you acquire goods and services the ultimate financial solution is to say screw it and not use money engine should we say screw it do you think that money

system is good or bad or do you say well my view is that money is not a good system the money system that we're working with is not in fact it's destabilizing everything that we're looking has happened in terms of crisis and so forth has been since we've gone into feed the bretton woods system was much more stable there were no major financial crises during the bretton woods system which lasted for over thirty years since bretton woods system has come into play with crises in seventy four seventy eight eighty we've had a crisis in eighty four eighty seven on and on so every three or four years is a crisis and the reason is the money system that we are relying on so is and why five nine nine zero totally off or does it make evolved. in any way shape or form i think the wall i would say look at it this way really what the problem is is that we number one you have you can print unlimited amounts of money and number two is

the dollars at the core you know people want to cumulate dollars and that means that you automatically have a current account deficit that's going to destabilize you girl and now is it all always turns out that's all we have for now but you can see all segments featured in today's show on you tube and you tube dot com slash boom bust r.t. we also love hearing from you so please check out our facebook page at facebook dot com slash a bust you can also tweet us at aaron ate at edward and it's from all of us here have been bused thank you for watching have a great weekend see you next time. the

. economic down in the find out. in the rest. of the every week. so.

the european union likes of think of itself as one of the brighter and fairer parts of the world a european commission report on corruption the first of its kind betrays a very different picture in every single member country there is corruption in some cases on a massive scale so what can the e.u. teach the world how corruption. new york london. the whole world. can see trujillo of the original one the one on the end. of the corner of the end of the street another one the more transparent society gets the money or the public tears become we see military and state and police forces mobilized against people who blend into the city who inhabit the city the more people trust electronic devices the more. fear that it has

a thousand on phase. is obviously more for the latest because it's pink. women wanted to avoid rape they really need to buy guns and. this is the one that i want to go away from once again it's the fear factor for all. definitely a target of the gun lobby and one not one that killing money but if somebody would you would describe her. i'm noticing more and more that's really scary marketing tactics which implies that women have some sort of moral obligation to protect their family and young girls shoot out here. so we do have a pink or. more kids young kids choke on food than are killed by firearms if being armed made us safer in america we should be the safest nation on earth were clearly not the safest.

the first medals of soft cheek twenty four tina being handed out with norway and the netherlands making the most of day one. equipment failure could have ruined the dreams of olympic gold for some german skiis and biathletes already if their russian opponents haven't put a rivalry aside to help them out. scenes of street violence and golfing balls and. protesters clashed with police inside government buildings ablaze all amid soaring unemployment economic stagnation and corruption. plus a suicide bombing reportedly carried out by a british citizen in syria sparking fresh fears that hundreds of western vote.