it's the capitol for usher is something special in the you can see and we have a lot of things to show we get just. before we go we got some breaking news out gunfire and a small explosion of being reported in the brussels central trying stations trying station there has been evacuated that's all we know for the moment of course we'll keep you updated throughout the night up next it's because report. long as. in case you're new to the game this is how it works now the economy is built around corners come from washington washington the media the media. voters elected to businessman to run this country business equals. boom bust

it's not business as usual it's business like it's never been done before. her.

i am max kaiser this is the geyser report when a member of the sub prime crisis that destroyed the global economy in two thousand and eight required central banks to give warren buffett billions of dollars so that he wouldn't have to suffer a single day with. income padding his bank account along with charlie munger and all the rest of the crew on wall street well now we've got a lot of the same thing again. the new sub prime is here and its stock in the glow stacy. this time is not going to be anything as spectacular as the american dream owning your home all that sort of thing your man you know a man's home is this castle this is just the automobile the automobile yes yes tell you more sub prime automobile loans could threaten to take down our economy our ponzi scheme economy and you know the the fed is now tapering

a ponzi they're trying to taper a ponzi right as all of this subprime auto loan detritus comes to market the toxic try to say detritus i say the truck this. that's good so this toxic trifecta for auto loans is fueling hash tag carmageddon institutional investors that manage other people's money grab subprime auto loan backed securities because of their slightly higher yields these bonds are backed by subprime auto loans that have been sliced and diced and repackaged and stamped with high credit ratings but those issued in twenty fifteen make end up the worst performing ever in the history of auto loan securitizations fitch warned so those with a twenty fifteen vintage subprime auto loans that was a good fit 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 nine two 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 word 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 sears 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 pay. funds who are starr for yield they need interest rates to be paid to them on debts 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 yet the repo man is back now. why it's becoming a crisis from twenty fifteen is because not only a car rates soaring because of the easy availability of credit but negative equity has hit an all time record that average negative equity in vehicles that were traded in for 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. 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 a 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 in 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 it we've covered the fact that avis hertz all the rental cars there all said 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 can 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 credit 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 to spray on the on jamie diamond the cockroach but it's also your pension fund your pension fund needs healed with. it's going to have to pay out pensioners retire 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 gotta gotta find me some yield if you don't find me i'm going to go to another bank so he he goes to the car dealership hey you got any subprime auto and 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 his trillion dollar infrastructure plan going you've got to have a car so i guess i 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 that'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 issuing the 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 hash tag carmageddon stay tuned for the second about morehouse tax stuff coming your way.

here's what people have been saying about rejected in the us is it actually just pull along awesome the only show i go out of my way to you know we want to see is that really packs a punch. yeah it is the john oliver of hard to you americans do the same. apparently better than food. and see people you've never heard of redacted the night president of the world bank very. seriously for some of the e-mail. us.

if it. really does she don't consume jail you've been talking to her the whole jellyfish dealing with this hang up on the person in that equal distances wasn't what equals this tells me. this would all be done to tell him to. believe that those all would be mean as this is this is also the us it all took the sitting on.

welcome back to the kaiser report imax kaiser let's go to another segment with vito at the very ease with cable ventures corp veda welcome back all right i know i look at your business card here it has a lovely little color thing of. eight different colors does that correspond i think what the province's was province 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 old 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 to the gun battle as definitely and well and to measure to 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 questions us why the interview works i mean i appreciate we're all very enthusiastic about this but now the mention of a 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 on board is 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 is stands for the office of foreign assets control is part of the u.s. treasury department it's department within that branch that it forces to trade embargo matches against cuba but any other country that where the issue is such as north korea and iran sort of thing. all fact at 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 it 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 in the practice obama has 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 associate to general has chris swiss among others are is the situation will be in the parable us it 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 fact because it's a pure ocracy takes its time and turns it in 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 administration basically so that was a just occasion for the situation so the question is right now what is going to happen under trump is facts are 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. oh 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 time comes and 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 in cuba known as 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 not all but a good number of the hotels in cuba are met are controlled by the military or are 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 q 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 star would currently has a standing claim against the cuban government for fifty million dollars you know so you know it's is daystar would 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 the dollars call 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 so if you well these companies get title you know to these claims if you will so you see a growing a list such as coco chanel 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 a k forty seven is right but i mean obviously you have a 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 a marvel in 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 in 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 increased 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 tier in spirit what happened was when the partner transportation a lot of flights to cuba they gave those airlines flights to undesirable destinations such as callaway so i said we're not on the map was out of exactly where is that right or is it. you dealing with central and eastern kill all of the

great in the in the and this and the. this great infusion there is utterly like a big flame fest and cane sugar plantation what's 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 from miami yes or the event is that irish actor calling pharrell yeah he's this paper's hot famously august. ronnie's babe in hollywood i write your life then just just the thought of having a co a mo hito enough gonna get them 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 how bad it become a very hot destination for us americans with a problem is the average american travel to educated terms of the other destinations for example we have our 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 americas as a million history there and fifty six hundred has never been in history there right as an ecological paradise eco holiday to cuba because it socialism means it 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 a good thing the good thing is that cuba's become a destination for these travelers but you know but i guess i 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 trumps business or what was it just before he became president you know 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 venezuelans and meltdown can 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 have this. goshi with russia and other suppliers for oil but for as individuals who are. advocating gauge meet 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 the whole pressure if you over oil idea fanatic of as a camera in the tourism business it's a christian saying you must visit cuba. and i did because they are called war

babies or call or you know to talk about. what about the banking system in cuba these are essential but of course that definitely is 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 packs 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 him 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 cuba without having to get currency 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 now 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 i'll be obviously is so you have a fishy history how and how can i say there's there well they all say that they're above board they're ok aboveboard well we got to go and i think other times report got it right pleasure for this edition of the tabs or follows me mast as a station i would like to thank our guests of area from cuba ventures corporate generators on twitter it's time to report and so on next time hasta la vista baby.

i don't know what it will be well how it's because you're one of them.

coming up on the hard see millions of american voters data on line we'll tell you who is behind this massive trove and what it means for your personal information. and aim for. when your man is arrested for the beating death of a muslim teenager we'll tell you why investigators won't call it a hate crime and so many disagree. then later on the show why has the mainstream media politicized the shooting of congressman steve scalise media analyst lionel ways and. it's tuesday june twentieth horse.