warned so those with a twenty fifteen vintage subprime auto loans fitch rates these as experienced cumulative net losses projected to reach fifteen percent yeah the vintage twenty fifteen some prime auto loans taste great with some bailout money from long term capital management from one thousand nine hundred ninety thousand but that together with a nice bottle of beaujolais from chernobyl and you've got yourself a fantastic meal for robots ghosts and other retro baits hey you know this is amazing that actually the sub prime auto loan market exists that another words what this means that people who have no income no assets and probably don't even have a driver's license can go into a car dealership and they'll arrange financing for purchase of a car and to simply appease the big three car on manufacturers and the global car industry with sales even though the underlying economy does not support that

amount of sales in the circe because of your mind spinning it's actually institutional investors in a zero percent interest rate wall because member you mention the subprime mortgage crisis that happened in two thousand and six two thousand in two thousand and eight that led to the fed cutting rates down to zero and all other global central banks following this lead to pension funds who are star for yield they need interest rates to be paid to them and that's looking for anything with a higher interest rate than zero percent or one percent and so mortgage lending there were a lot of restrictions placed on banks lending to people with no income no assets so because of the financial crisis they couldn't lend to people with no income no assets so they went looking for what else do americans want and they can afford but there are no regulations on how much we can lend to these people so they went to the more automobile markets and started to say we'll give you these cars you know

and. it doesn't matter if you have any income or any assets will lend it to you plus unlike the mortgage market it's recourse so they can at least seize the car back and then sell it the repo man the repo man yeah the repo man is back now why it's becoming a crisis from two thousand and fifteen is because not only a corollary soaring because of the easy availability of credit but negative equity has hit an all time record the average negative equity in vehicles that were traded in for a new vehicles during the first quarter twenty seventeen has reached five thousand one hundred ninety five dollars per trade the highest ever according to edmonds data cited by auto week dot com the percentage of trade ins with negative equity has surged to thirty two point eight percent also the highest ever average negative equity exceeded four thousand dollars in the third quarter of two thousand and

thirteen and hasn't looked back so what's driving up negative equity he points out is the lengthening terms you know people are getting seventy eight year leases on these cars now so. most of the you know the decline in the value of a car happens the day you drive off the lot and then it continues the fastest decline in the first year or two and then people are turning in their car exchange . but now the car dealerships have a huge negative equity right so when you go to the used car lot to sell your car you don't get zero for the car you have to pay them to take your car so in your car might have a negative five hundred dollar equity on it so you go to a used car lot and you say i'll give you five hundred dollars to take my car out sounds a bit strange unless you put it in the context of people trading up as you say

other words if you try to trade up and you want a bigger loan for a bigger car you want to turn in your ninety seven nissan junker for a twenty eighteen. ford mustang fully loaded might cost seventy or eighty thousand you drive up with your old car and they'll give you the loan to buy that for but they'll subtract negative equity from the missing market works is max keiser you go into a ford dealership or a chevy or mustang or well there or a b.m.w. mercedes anybody you go i'm going to lease the car from you after two years you're able to just go in no cost unless you have any damage to the car traded then they take it. they've already sold on the loan to these institutional investors to pension funds you get another car it might be more on a monthly fee but the institutional investors and their whole dealership situation is set up that there's no risk to you the person leasing the car so unless you have

any damage to the car ok so you flip it for another car these institutional investors are holding the negative equity so it wasn't a problem until there was so much inventory. of. boatloads of inventory all over the place everybody's doing this everybody's in on the scam but now everybody's a negative equity but the eels were high and that's all they care about right so it's similar to the subprime mortgage debacle it's a passive mechanism where that money from the government passes through the fake auto loan business right into the pockets of money managers who then sell off as junk to pension funds yes so they're making a killing the equity in the car business is dropping an hour at a tipping point where it's a trillion dollar market that's imploding here is that also on top of that we've covered the fact that avis hertz all the rental cars there also they they sell off their cars every two or three years once they hit like twenty five thirty thousand

miles on it they flip those cars so there's a huge quantity of used cars those prices are collapsing new car prices are still rising and that's because everybody wants a new car because the credit is so easily available and the term limits are extended so long that their monthly lease rate is only like two hundred bucks on a mustang or some fancy car and they think wow i could afford it but this is what he says is why there's so much negative equity is lengthening loan terms the average new vehicle term in q one of twenty seventeen research record sixty nine months up from sixty four months and twenty eleven according to edmunds data terms between seventy three eighty four months which is seven years accounted for a record. thirty two point one percent of all new vehicle loans and the fourth quarter of twenty sixteen up from twenty nine percent a year earlier among used vehicle loans they accounted for eighteen percent up from sixteen percent a year earlier and then again so we have the lengthening term limits which is

allowing people to afford a more expensive car on paper anyway rising transaction prices is also causing so much negative equity so the new car prices are very high because credit is available vehicle prices have surged in general and consumers buy more expensive models because the low interest rates a longer loan terms makes this possible by keeping the payments down and we've seen this in education we've seen this in health care prices are going up at twenty thirty percent a year because the government is there with subsidies in the case of obamacare the government is there in the case of underwriting all it's almost all student loans in america they guarantee them so it's easy to get a loan to go to university and when there's nothing else happening why not extend your ability to sustain your life for four years by taking out some loans from the government and so the prices go up because nobody cares about the price because the

credits there for them right i mean the big point here for me as you described at the top here is that there's some prime market was reformed to some degree and the wall street cockroaches were unable to penetrate that market as they once did so the wall street cockroaches along with their brothers and sisters in the city of london had to get into the economy another route they found the car loan racket and it turned into a trillion dollar car accident because those cockroaches are never told stuff there's no nobody in the justice department has a can of raid there's spray on them on jamie dimon the cockroach but it's also your pension fund your pension fund needs yield with. it's going to has to pay out pensioners retired right now and they are assuming an eight to nine percent return treasuries are only returning less than two percent or two percent so they they need ilda in there they're desperate there and they're calling up jamie dimon every day saying come on you got to got to find me some yield if you don't find me he'll

i'm going to go to another bank so he's he goes to the car dealership hey you got any subprime auto loans so it is a feedback mechanism and i want to say you know i mean this is like a step down from housing because member after the subprime crash many americans moved into cars they moved into their cars and that was the one thing in the way america infrastructure set up and of course trump hasn't got us trillion dollar infrastructure plan going you've got to have a car so i guess they assume this is a sure bet you're going to win with this but this kind of reminds me of like leading up to the great depression the previous massive crash before the two thousand and one is a lot of that was about all the loans for radios which seems like quite simple and silly today but they were very expensive back then and everybody wanted a radio in the house and it was extended on credit everybody was buying radio on credit and that all fell apart. yeah that's right it's remarkable piece of history

there but you know wanting a high yield is not a crime but selling faulty securities that are. criminally packaged is a crime so that's where it would be great if the rule of law were imply it were imposed on the sellers of this junk this faulty well they never have any. it's all about the debtors in our economy now everybody in participating in the economy agrees that debtors are the ones that should only be responsible for anything that people lending no responsibility you're the bad debt a year for the one reason why it all fell apart but somebody has to take responsibility for the guy issue a male loan that's how capitalism used to work yes there should be some rule of law in terms of how to market and distribute financial products in america that is a non existent at the current moment and so now we have a car carmageddon as it's called car mageddon hash tag carmageddon. carmageddon stay tuned for the second more hash tag stuff coming your way.

about your sudden passing i've only just learned you were yourself and taken your last wrong turn. your act caught up to us we all knew it would i tell you i'm sorry . so i write these last words in hopes to put to rest these things that i never got my chance to. i remember when we first met my life turned on each. ten my feeling started to change you talked about more like it was a key still some marshawn to those that didn't like to question or are. secretly promised to never be like. it said one does not leave a funeral the same one enters mind gets consumed with this one to. speak to

us there are no other takers. to claim that mainstream media has met its maker. the. kids. in the business going on in kim's. redoes should i'm concerned jodie then and i can do a little jellyfish deal in the sand on the horse and in that other equal distance as my son and what he feels are still safe going on in. his will don't we don't see

telling him to live the way that devotional moodiness is as it does so to us it all took the sitting on. if you choose not to post the official girlfriend. i'll let the law. still. hold me. in the loop in a dose of the i will give you. this if you. just

. have to leave the most but you can really do the barbecue at the bar. was i don't know that my mind off of the whole point itself was a sort of i think so. but the investigate police officers behavior as well. l.j. drugs on the web and i'll bet a presence here. calling people as you close. welcome back to the kaiser report imax kaiser let's go to another segment with vito at the very ease with cable ventures core data welcome back all

right i know look at your business card here it has a lovely little color thing of. eight different colors does that correspond anything what the province's promise is basically that i'll break out of each province heidi so and have on it would be. robots to the west i mean obviously a ping out of the you know the which is west of that which is a major a tobacco cigar producing area and these promises date back to one. basically the birth of the island basically the birth of the country if you will right now it goes back a good battle as definitely and well and to measure its use now was the situation with the treasury department hey if we go back the way it works is i ask the questions and then you ask the question as us why the interview works i mean i appreciate we're all very enthusiastic about this but now that you mention via let me ask about some if i were to mention ofac yes i mean i mean the question about

the colors i thought was interesting i bored you i mean you were bored by that question obviously but you know a lot of people out there are color theorists or artists or painters really love cuba for the culture of it we have a lot of spanish speakers around the world who watch our show and i mean put that down and live a so ofac what is it tell me about it it stands for the office of foreign assets control is part of the u.s. treasury department it's department within that branch that enforces trade embargo matches against cuba but any other country that where the issue is such as north korea and iran sort of thing. oh fact that the other day is this government by which tells american companies individuals what they can and cannot do with cuba since this party executive branch exists. and the pleasure of who the present happens to be whether it's reagan bush obama cetera so i was under obama because he wanted to relax sanctions with cuba and bring things down toward

a road of getting ready embargo all together. all fact stepped in to say ok we're going to lax certain restrictions the problem with that is that is an attack this obama factor sent mixed signals about what that really means for example during hellbound illustration of fact was continuing to do you know to impose multimillion dollar fines against various foreign banks for doing business with cuba we're talking banks from b.m.p. paribus to societe generale has chris swiss among others are is the situation will be in the power bus was the most serious because all fact long the stretch the justice department actually wanted to impose as much as i believe eight billion dollars against that by not just for transactions involving cuba but transactions involving other countries such as around and syria among others obviously the reason why there's such controversy which cuba is precise because obama's law post

mom policy the esoteric question as to why this is still happening is because a fact of fact because it's a pure ocracy takes its time in terms of citizen fines against a given bank so for example two thousand and fourteen when obama was kind of pushed my policy. the fines were for transactions that predated his an estrangement basically so that was the justification for this situation so the question is right now what is going to happen under trump is still going to impose fines against banks based on situations that happened during a lot of part of the obama administration rights of obama listen that yeah ofac was still processing thread. so fines for banks busting the sanctions right previously and there still have an inventory or backlog of stuff yeah they're still going through it and then trump comes and i guess it is then again different again right

so how does that play yeah you know right now to trump a very mixed message because you know he's toying with the idea of scaling back some of obama's policies. the speculation right now so he may scale back as far as telling americans companies that they cannot do business with companies are controlled by the cuban military is a conglomerate cubanos guy s.-a which among other things controls a number of hotels there which include at least one hotel that's being currently matched by starwood hotels as a military control to hotels now all but a good number of the hotels in cuba are met are controlled by the military or actually because it's the engine of growth for the cuban economy right now it's a source of hard currency dollars if you well and you know basically i mean it helps support the system there it's a talk about starwood starwood hotels i think in the announce a big luxury hotel right there something going on there well they're there currently matching three luxury hotels at least one of which is match is actually owned by the queue military itself so the question is how did that happen you know

the other question is how this happened in context of the fact that starwood currently has asked any claim against the cuban government for fifty million dollars. so you know it says daystar was still has to answer the question in terms of how that's been done obviously this has been done with the approval i will fact a million dollar claim goes back to one goes back to for the revolution if pre-revolution yeah so how did all this time i was called starwood or was it part of another hotel conglomerate or right exactly because you have x. number of companies and i believe office depot is on that list through a series of mergers not position if you will these companies get title to these claims if you will so you see a growing a list such as coke is a little i want to build a big hotel but that is fifty million dollars claim right and the government controls the hotel. all right starwood you know well starwood does a lot of business in hot zones like at the military some for weapons and swap out for that ah you know they will you know tell us a gun you get towels you get you know access to the weight room and

a collision a cough right i mean you serious whole thing russia right well ok forty seven is right but i mean obviously you have the situation where. the situation with the claims is crucial to seen things move forward between the two countries in terms of congress seriously considering the idea of lifting sanctions against cuba because that's the real logic behind the embargo to begin with the fact that cuba nationalized all american assets there so once you take that logic away say ok we settled the claims this isn't that why do we still have this environment place you know so you have groups right now such as engage cuba gauge cuba right now is a lobby base here in washington and they're getting a lot of corporate support right now to help push for further trade hurting gauge meant which it would because nowadays when people hear cuba to see multimillion dollar signs and terms of potential for a lot of trade a lot of business happening there right now i understand like jet blue in these

airlines they got ok nonstop let's go to cuba and they they increase lines and they're ready to go and then six months later or a year later they're saying you know at the traffic's been pretty slow we're going to cut back on some of these lines are not getting the boom that we thought we were going to get why well that's a mixed bag the reports that you've been hearing have to do with certain second tier airlines such as front here in spirit what happened was when the partner transportation a lot of flights to cuba they gave those airlines flies to undesirable destinations such as callaway so i said we're on the map was out of. that right there is it well you're dealing with central and eastern kill all of the great in the in the and this and the. this great infusion. like a big flea infested cane sugar plantation it was going on now i mean the issue for american travelers is when we think of cuba all we know is have an outside we're

not familiar with destinations like for example very general michael mann's remake of miami vice yesterday that cigarette boat from miami yes or the event is that irish actor con farrel yeah this baby was hot famously august. ronnie's babe in hollywood i write your life then just just the thought of having a co a mohit oh enough gonna get some so hot i'm right down the mud you're like wait a minute you know yeah i don't like one hundred twenty miles an hour as you can it's dangerous you should keep your clothes on right exactly i mean you know i have as become a very hot destination for us americans with a problem is the average american educated terms of the other destinations for example have very darrow which is cuba's answer to can't khun base we have a lot of these resort towers there and all that have a place in the north central of the north central coast of cuba. which has been the most beautiful beaches anywhere in the caribbean but like i said the average american is as no history there and fifty six hundred has never been in history

their right as an ecological paradise eco holiday to cuba because it socialism means there hasn't been any production there ever yet is no overdevelopment there if you well know development that. is an eco paradise but that's the good thing the good thing is that cuba's become a destination for these travelers but you know but i guess they're basically you know does that tug going back and forth among trump officials in terms of how to handle cuba the other member what is trump's business or what was it just before he became president you know tourism luxury tourism real estate that sort of thing and the key reference i point out to is kept can and do make republic which is a venture that he built along local partners there back in the two thousands at least let me just jump in for a second out running out of time and i know yeah it's i'm a cuba venezuela yeah it's a hot issue right and there's energy issues involved there and venezuela's and meltdown can you talk on that a little bit yeah i mean basically in situations that you know cuba has sweetheart deal of as well to provide services doctor you know health care professionals that

sort of thing in return for cheap oil so that was a very good deal for a number of years but because all the chaos is happening in caracas right now the oil shipments are going to significantly so the cubans find some haven't. goshi with russia and other suppliers for oil but for as individuals who are. advocating gauge went with cuba if you will it's going to put a certain pressure on cuba to be able to negotiate for more deals with the united states and other western powers if you well for more development on the island so i mean i think that's a potential positive effect if you will on this whole pressure if you over oil i got an idea for an attic of as it can be in the tourism business it's a christian saying you must visit cuba. and i'm going to idea because they are called more babies of color you know to talk about. what about the banking system in cuba these are essential but of course that definitely is that the situation

right now between the united states in cuba basically is that you know obviously for a long time because of the whole war on terror if you will which you know how all these powers are added on to the sanctions program most american pacts have been scared to even touch cuba the glaring sensitize a small regional bank in florida pompano beach florida actually cost stone gate bank somehow someway those guys managed to convince ofac to give them a license to do business with the cuban banking system so as a result if you're an american visiting cuba right now you can get a stone gate credit card or master card visa for use in cuba you know that's never existed over the years because of the embargo the reason why you have the major banks such is wells fargo and chase among others doing the same thing is that they're scared of the cold compliance regime if you will invite i think i get like a debit card loaded up at this port a bank writing a spending using came about without having to get car seats change whatever is

convenient same as a bank a bank stone gate bank ride exactly because are they above bar is not some kind of wacky you know miami vice type thing you know that's the whole point zero point is still gave bank. you know got the pools most back to do business with cuba the first place ali obviously is so you have a fishy history how and how but so there's the world will say that they're above board above board well we got to go because report got it right pleasure for this edition of the kaiser appalls me mast as a station i would like to thank our guests of area he's from cuba ventures core of generators on twitter ties a report and song next time hasta la vista baby. people

with stories to tell. those who desire to. stand. still some. users. see first since. they're here to speak are you there to hear. here's what people have been saying about rejected in the senate is pull along awesome the only show i go out of my way to launch you

know what it is that really packs a punch oh yeah mr john oliver of hard to be americans do the same we are apparently better than the blues. and see people you never heard of love. redacted tonight was the president of the world bank so they can go right many seriously send us an e-mail. social environment. right. chemical discoveries over the last century made every day life easier but at what cost this is cereal is exceptionally sick. no wonder it's confidential. says sister years old industrial giants reap the benefit ignoring the caused by chemical production. you know as if

these people aren't people just experimental animals decades later the toxic environment continues to poison lives and we found these astronomically high levels of dioxin levels that my staff think maybe some of the highest levels ever found in the united states for almost thirty years this very serious problem had not actually been addressed what will that investigation into the chemical industry secrets revealed. this goes to. the earth there's. a. need. to. be. good.

or evil. breaking news a strain here suspends its airstrikes alongside the u.s. led coalition in syria as tensions grow between washington and moscow over the us of a syrian. afghan local speak exclusively to us about the horrors unfolding in the north of the country as a new islamic state takes root and special report coming out. with one. reason for terror attack country in just three months.