08-28-2007, 08:22 PM
ACTION MUST BEGIN IMMEDIATELY DURING SEPTEMBER, OCTOBER
Lyndon LaRouche replied as follows today, to a question e-mailed earlier by Giorgio Vitangeli, economist, author, and director of the monthly "Finanza Italiana," Rome:
"The needed action of reform must begin immediately during the rapidly unfolding weeks of September and October. The possibility of launching the first of a series of phased reforms has been created by the rate of accelerating ferocity of the breakdown now already in progress. We are already witnessing the rapidly rising storm presently hitting the mortgage-based securities system and the banking system, that with inevitable global, early, chain-reaction effects hitting all nations, world-wide. The present world monetary-financial system is now thrashing wildly on its death-bed. Soon, without drastic reforms of policy, the movements of the sick man will become more and more violent, but, then, become less, and less, and less; then, soon, without the needed drastic reform, the sick man's movement will finally cease.
The present floating-exchange monetary ship, the ship launched by the U.S.'s George Shultz, and captained, until recently, by Paul Volcker and his successor, mad Captain Greenspan, is sinking. Passengers who are reluctant to move off that floating system now, are to be mourned. This response by me should be read against the background defined and outlined in my just recently published, 44,000- word prolegomena for a U.S. Democratic Party's 2008 Presidential campaign platform, "The End of Our Delusion." The Preface and the first two of the three chapters of that prolegomena are devoted to the indispensable historical and physical-scientific background which is necessary for comprehension of the relatively more crucial programmatic features, which are addressed in the third chapter of that prolegomena.
As I indicated in my international LPAC webcast of July 25, 2007, where I announced the actual opening of the breakdown-phase of the worldwide monetary system, the new global crisis is already under way. That international crisis is a general breakdown-crisis of the present world monetary-financial system, but NOT NECESSARILY an economic breakdown-crisis. The physical economy can be saved, if appropriate reforms are made in time; the planet's present, "floating exchange-rate" monetary-financial system can not be saved.
The crisis will proceed in successive phases. We have entered the first phase, which is typified by the collapse of a global real-estate bubble on which the entire current monetary- financial system hangs today. The most immediate of these challenges, is being presented at this time. The U.S.A. and other governments most now react to the need for an immediate placing of home mortgages and chartered banks of the U.S. under bankruptcy protection by law. This measure is the indispensable lawful protection needed to prevent an uncontrollable, chain-reaction, hyper-inflationary collapse of the present world monetary-financial system as a whole. An uncontrolled crisis of that type would be comparable to the chain-reaction set into motion by the Fourteenth-Century collapse of the House of Bardi.
At the present moment, a set of very influential and other public and private U.S. figures, of which I am a functioning part, have formed a de facto pilot-group in support of what I have proposed as providing protection for households against foreclosures of mortgages, and also providing protection for chartered banks, but not other kinds of financial institutions operating outside the chartered banking system itself.
This emergency reform is indispensable. Without it, other reforms needed could not be implemented successfully. We must return immediately, to a virtual reestablishment of a global, fixed-exchange-rate mode of Bretton Woods system of international and national credit. This must be understood as in the form which had been intended under U.S. President Franklin Roosevelt, and not the form matters took, immediately, under President Harry Truman.
The general reform of the world's monetary-financial system must be premised on an underlying physical-economic commitment expressed in chiefly long-term capital investments in capital-intensive modes, and in a global climate of a simple underlying interest-rate for long-term lending of 1-2%. At least half of the investment would be in long-term modern infrastructure, and the remainder in agriculture and industry. The combination of the elements of this program will represent an investment cycle of about fifty years maturity of new obligations generated.
Without U.S.A. cooperation with Russia, China, and India in creating a nucleus around which to bring in other nations, the needed organization of a revival of the physical economy would lack the indispensable "political detonator" which the launching of such a general reform requires. If relevant forces in the U.S. present that proposal, to form a sponsoring body for the assembly of a broader range of nations (as a coalition within the UNO) to Russia, China, and India, it were reasonably certain that Russia would accept a serious such proposal, and, with Russia's participation, the conditions for the formation of a sponsoring group of the four will exist. On the matter of lapse of time, we must take into account the shocked state of mind in nations which are witnessing the daily disintegration of the system, under their eyes."
NEW YORK CITY FORECLOSURES ARE MICROCOSM OF GLOBAL COLLAPSE
http://www.larouchepac.com/news/2007/08/...lapse.html
A devastating study by New York State Senator Jeffrey D. Klein released on Aug. 27 names the top ten banks which hold the subprime mortgage notes on foreclosed properties in New York City. Among them are Deutsche Bank, Wells Fargo Bank, or U.S. Bank, N.A. (which are the three top lenders to New Yorkers with the highest number of foreclosure filings between July 1, 2006 and July 31, 2007). Over that period foreclosure filings listed from these banks were: Deutsche Bank, 2,299; Wells Fargo, 1,791; and U.S. Bank, N.A., 1,711. The notorious opium bank HSBC was in fourth place with 989 foreclosure filings.
As LPAC reported Aug. 27, an expected 60% increase in the rate, over 2006, of foreclosure filings is likely by the end of 2007. Klein's survey covers the 5 boroughs of New York City and the adjacent counties of Westchester and Nassau. The foreclosures are particularly hitting African-American and Hispanic borrowers in these areas with rates ranging from 15% to 87% in various neighborhoods.
In just 2005, statewide in New York, subprime loans totaled $28.5 billion and of those it is predicted 20.9% will fall into foreclosure this year.
Sen. Klein, who has proposed legislative action, is clear: "The sub-prime lending crisis has reached a climax and the effects can be felt at every level from the world financial markets, to the individual homeowner, to the homeowner's neighbor whose property values plummet as communities are flooded with foreclosures." It is "unacceptable" to "remain idle" as people "slip into economic depression," and it is "unconscionable that a bank can knowingly buy debt that was accrued through predatory loans perpetrated against the very people this country is supposed to protect..."
THE TALLER THE BUILDING, THE LONGER THE JUMP: MAJOR BANKS CONTINUE TO COLLAPSE
http://www.larouchepac.com/news/2007/08/...psing.html
More top banks are being revealed as having heavy exposure in the asset backed commercial paper (ABCP) bubble on both sides of the Atlantic and deep into Asia and the Pacific. The international press reports the following victims:
* The Boston based State Street bank has been identified as having no less than $22 billion of exposure in ABCP, held in six "conduits" which account for no less than 17% of its assets. This is the highest exposure of any European or American bank revealed so far. This compares with the 15% exposure of the German IKB bank and the 6% of the German WestLB bank according to timesonline.
* Standard and Chartered stock price came under pressure last week and into this week amid rumors that Whistlejacket Capital, its $18 billion conduit was in trouble. This followed a decline last week of HBOS stock price by 4% following its bailout of Grampian Funding, its $35 billion conduit.
* The stock price of Singapore's largest Bank, DBS Group Holdings, fell by 2% after it admitted it will have to fund a $921 million worth of ABCP. JPMorgan told its clients to avoid DBS stock, reported that it held a Singapore $10 billion bond portfolio classified as "held for trading" according to Reuters.
* Barclay's role in organizing the "SIV-Lites", (Structured Investment Vehicles) for Sachsen LB, which collapsed last week, has brought the British bank under deep scrutiny according to today's Financial Times. This, according to the FT, has left Barclay's with an exposure in the "low hundreds of millions of dollars." They also report that Edward Cahill, the Barclay's executive responsible for setting of the Barclay's own as well as Sachsen's SIV-Lites, has not been seen since his resignation last week.
* Raptor Global Fund of Tudor Investment, an $8.5 billion hedge fund, lost 8% of its value this year, mostly in August.
"WITH THIS GLOBAL FINANCIAL CRISES UNFOLDING, U.S. MUST WITHDRAW TROOPS FROM IRAQ IMMEDIATELY"
http://www.larouchepac.com/news/2007/08/...hdraw.html
Lyndon LaRouche called for the immediate withdrawal of all American military forces from Iraq, citing the unfolding combined housing and banking crises, that make any extension of the U.S. military engagement in Iraq a total folly.
LaRouche warned, "We now have a combination of a banking and housing crisis, which is only the front-end of the biggest financial collapse in modern history. For anyone to talk about extending the war in Iraq, under these already unfolding conditions, is insane." LaRouche elaborated, "We need an immediate withdrawal of all American forces from Iraq. It can and must be done, by effective diplomacy. We can create the kind of coalition of Iraq's neighbors and other nations, by diplomacy, that would make the immediate withdrawal of American troops a stabilizing factor. Let us face the real problem, standing in the way of this only viable solution: The President of the United States is becoming more infantile by the day, and the Vice President of the United States is a criminal. Dick Cheney's removal from office is therefore an immediate, urgent priority for the U.S. Congress and others."
LaRouche returned to the issue of the global financial collapse, already unfolding. "We must change the agenda of the U.S. government to address the biggest financial crisis in history. We must address the immediate housing crisis, the danger that the entire banking system is about to collapse. We must, therefore, disengage from the Iraq war. Start the process of getting the troops safely disengaged now," LaRouche demanded. He further elaborated, "By announcing the immediate withdrawal of American troops from Iraq, we can begin, today, to redeploy our forces, out of Baghdad and other combat zones, in preparation for their orderly withdrawal--as we work, diplomatically, with Russia, China, Europe, the neighboring countries, including Iran, Syria, Turkey, Saudi Arabia and Jordan, the nations of the Organization of Islamic Conference (OIC), and others. This can be done, immediately. Clearly the complete withdrawal of American forces will take some time, but the policy must be set now, and the issue of the global financial collapse, the systemic disintegration, must be directly acknowledged."
LaRouche noted that he appreciated the sentiments of some Congressional leaders, like Sen. John Warner (R-Va.), who has called for the President to announce a token withdrawal of American troops by the end of the year. But he warned that this is insufficient to address the true nature of the crisis. "Some people are beginning to think that the Iraq war is part of our national heritage. That is the real tragedy; to keep the troops there--except for some perverse desire to please those among the British who wish to see the United States destroyed before Bush and Cheney leave office."
LaRouche concluded, "Therefore we must leave now. There is an immediate case for diplomacy, not continued shooting.
The United States is becoming more infantile by the day, and the Vice President of the United States is a criminal. Dick Cheney's removal from office is therefore an immediate, urgent priority for the U.S. Congress and others."
Lyndon LaRouche replied as follows today, to a question e-mailed earlier by Giorgio Vitangeli, economist, author, and director of the monthly "Finanza Italiana," Rome:
"The needed action of reform must begin immediately during the rapidly unfolding weeks of September and October. The possibility of launching the first of a series of phased reforms has been created by the rate of accelerating ferocity of the breakdown now already in progress. We are already witnessing the rapidly rising storm presently hitting the mortgage-based securities system and the banking system, that with inevitable global, early, chain-reaction effects hitting all nations, world-wide. The present world monetary-financial system is now thrashing wildly on its death-bed. Soon, without drastic reforms of policy, the movements of the sick man will become more and more violent, but, then, become less, and less, and less; then, soon, without the needed drastic reform, the sick man's movement will finally cease.
The present floating-exchange monetary ship, the ship launched by the U.S.'s George Shultz, and captained, until recently, by Paul Volcker and his successor, mad Captain Greenspan, is sinking. Passengers who are reluctant to move off that floating system now, are to be mourned. This response by me should be read against the background defined and outlined in my just recently published, 44,000- word prolegomena for a U.S. Democratic Party's 2008 Presidential campaign platform, "The End of Our Delusion." The Preface and the first two of the three chapters of that prolegomena are devoted to the indispensable historical and physical-scientific background which is necessary for comprehension of the relatively more crucial programmatic features, which are addressed in the third chapter of that prolegomena.
As I indicated in my international LPAC webcast of July 25, 2007, where I announced the actual opening of the breakdown-phase of the worldwide monetary system, the new global crisis is already under way. That international crisis is a general breakdown-crisis of the present world monetary-financial system, but NOT NECESSARILY an economic breakdown-crisis. The physical economy can be saved, if appropriate reforms are made in time; the planet's present, "floating exchange-rate" monetary-financial system can not be saved.
The crisis will proceed in successive phases. We have entered the first phase, which is typified by the collapse of a global real-estate bubble on which the entire current monetary- financial system hangs today. The most immediate of these challenges, is being presented at this time. The U.S.A. and other governments most now react to the need for an immediate placing of home mortgages and chartered banks of the U.S. under bankruptcy protection by law. This measure is the indispensable lawful protection needed to prevent an uncontrollable, chain-reaction, hyper-inflationary collapse of the present world monetary-financial system as a whole. An uncontrolled crisis of that type would be comparable to the chain-reaction set into motion by the Fourteenth-Century collapse of the House of Bardi.
At the present moment, a set of very influential and other public and private U.S. figures, of which I am a functioning part, have formed a de facto pilot-group in support of what I have proposed as providing protection for households against foreclosures of mortgages, and also providing protection for chartered banks, but not other kinds of financial institutions operating outside the chartered banking system itself.
This emergency reform is indispensable. Without it, other reforms needed could not be implemented successfully. We must return immediately, to a virtual reestablishment of a global, fixed-exchange-rate mode of Bretton Woods system of international and national credit. This must be understood as in the form which had been intended under U.S. President Franklin Roosevelt, and not the form matters took, immediately, under President Harry Truman.
The general reform of the world's monetary-financial system must be premised on an underlying physical-economic commitment expressed in chiefly long-term capital investments in capital-intensive modes, and in a global climate of a simple underlying interest-rate for long-term lending of 1-2%. At least half of the investment would be in long-term modern infrastructure, and the remainder in agriculture and industry. The combination of the elements of this program will represent an investment cycle of about fifty years maturity of new obligations generated.
Without U.S.A. cooperation with Russia, China, and India in creating a nucleus around which to bring in other nations, the needed organization of a revival of the physical economy would lack the indispensable "political detonator" which the launching of such a general reform requires. If relevant forces in the U.S. present that proposal, to form a sponsoring body for the assembly of a broader range of nations (as a coalition within the UNO) to Russia, China, and India, it were reasonably certain that Russia would accept a serious such proposal, and, with Russia's participation, the conditions for the formation of a sponsoring group of the four will exist. On the matter of lapse of time, we must take into account the shocked state of mind in nations which are witnessing the daily disintegration of the system, under their eyes."
NEW YORK CITY FORECLOSURES ARE MICROCOSM OF GLOBAL COLLAPSE
http://www.larouchepac.com/news/2007/08/...lapse.html
A devastating study by New York State Senator Jeffrey D. Klein released on Aug. 27 names the top ten banks which hold the subprime mortgage notes on foreclosed properties in New York City. Among them are Deutsche Bank, Wells Fargo Bank, or U.S. Bank, N.A. (which are the three top lenders to New Yorkers with the highest number of foreclosure filings between July 1, 2006 and July 31, 2007). Over that period foreclosure filings listed from these banks were: Deutsche Bank, 2,299; Wells Fargo, 1,791; and U.S. Bank, N.A., 1,711. The notorious opium bank HSBC was in fourth place with 989 foreclosure filings.
As LPAC reported Aug. 27, an expected 60% increase in the rate, over 2006, of foreclosure filings is likely by the end of 2007. Klein's survey covers the 5 boroughs of New York City and the adjacent counties of Westchester and Nassau. The foreclosures are particularly hitting African-American and Hispanic borrowers in these areas with rates ranging from 15% to 87% in various neighborhoods.
In just 2005, statewide in New York, subprime loans totaled $28.5 billion and of those it is predicted 20.9% will fall into foreclosure this year.
Sen. Klein, who has proposed legislative action, is clear: "The sub-prime lending crisis has reached a climax and the effects can be felt at every level from the world financial markets, to the individual homeowner, to the homeowner's neighbor whose property values plummet as communities are flooded with foreclosures." It is "unacceptable" to "remain idle" as people "slip into economic depression," and it is "unconscionable that a bank can knowingly buy debt that was accrued through predatory loans perpetrated against the very people this country is supposed to protect..."
THE TALLER THE BUILDING, THE LONGER THE JUMP: MAJOR BANKS CONTINUE TO COLLAPSE
http://www.larouchepac.com/news/2007/08/...psing.html
More top banks are being revealed as having heavy exposure in the asset backed commercial paper (ABCP) bubble on both sides of the Atlantic and deep into Asia and the Pacific. The international press reports the following victims:
* The Boston based State Street bank has been identified as having no less than $22 billion of exposure in ABCP, held in six "conduits" which account for no less than 17% of its assets. This is the highest exposure of any European or American bank revealed so far. This compares with the 15% exposure of the German IKB bank and the 6% of the German WestLB bank according to timesonline.
* Standard and Chartered stock price came under pressure last week and into this week amid rumors that Whistlejacket Capital, its $18 billion conduit was in trouble. This followed a decline last week of HBOS stock price by 4% following its bailout of Grampian Funding, its $35 billion conduit.
* The stock price of Singapore's largest Bank, DBS Group Holdings, fell by 2% after it admitted it will have to fund a $921 million worth of ABCP. JPMorgan told its clients to avoid DBS stock, reported that it held a Singapore $10 billion bond portfolio classified as "held for trading" according to Reuters.
* Barclay's role in organizing the "SIV-Lites", (Structured Investment Vehicles) for Sachsen LB, which collapsed last week, has brought the British bank under deep scrutiny according to today's Financial Times. This, according to the FT, has left Barclay's with an exposure in the "low hundreds of millions of dollars." They also report that Edward Cahill, the Barclay's executive responsible for setting of the Barclay's own as well as Sachsen's SIV-Lites, has not been seen since his resignation last week.
* Raptor Global Fund of Tudor Investment, an $8.5 billion hedge fund, lost 8% of its value this year, mostly in August.
"WITH THIS GLOBAL FINANCIAL CRISES UNFOLDING, U.S. MUST WITHDRAW TROOPS FROM IRAQ IMMEDIATELY"
http://www.larouchepac.com/news/2007/08/...hdraw.html
Lyndon LaRouche called for the immediate withdrawal of all American military forces from Iraq, citing the unfolding combined housing and banking crises, that make any extension of the U.S. military engagement in Iraq a total folly.
LaRouche warned, "We now have a combination of a banking and housing crisis, which is only the front-end of the biggest financial collapse in modern history. For anyone to talk about extending the war in Iraq, under these already unfolding conditions, is insane." LaRouche elaborated, "We need an immediate withdrawal of all American forces from Iraq. It can and must be done, by effective diplomacy. We can create the kind of coalition of Iraq's neighbors and other nations, by diplomacy, that would make the immediate withdrawal of American troops a stabilizing factor. Let us face the real problem, standing in the way of this only viable solution: The President of the United States is becoming more infantile by the day, and the Vice President of the United States is a criminal. Dick Cheney's removal from office is therefore an immediate, urgent priority for the U.S. Congress and others."
LaRouche returned to the issue of the global financial collapse, already unfolding. "We must change the agenda of the U.S. government to address the biggest financial crisis in history. We must address the immediate housing crisis, the danger that the entire banking system is about to collapse. We must, therefore, disengage from the Iraq war. Start the process of getting the troops safely disengaged now," LaRouche demanded. He further elaborated, "By announcing the immediate withdrawal of American troops from Iraq, we can begin, today, to redeploy our forces, out of Baghdad and other combat zones, in preparation for their orderly withdrawal--as we work, diplomatically, with Russia, China, Europe, the neighboring countries, including Iran, Syria, Turkey, Saudi Arabia and Jordan, the nations of the Organization of Islamic Conference (OIC), and others. This can be done, immediately. Clearly the complete withdrawal of American forces will take some time, but the policy must be set now, and the issue of the global financial collapse, the systemic disintegration, must be directly acknowledged."
LaRouche noted that he appreciated the sentiments of some Congressional leaders, like Sen. John Warner (R-Va.), who has called for the President to announce a token withdrawal of American troops by the end of the year. But he warned that this is insufficient to address the true nature of the crisis. "Some people are beginning to think that the Iraq war is part of our national heritage. That is the real tragedy; to keep the troops there--except for some perverse desire to please those among the British who wish to see the United States destroyed before Bush and Cheney leave office."
LaRouche concluded, "Therefore we must leave now. There is an immediate case for diplomacy, not continued shooting.
The United States is becoming more infantile by the day, and the Vice President of the United States is a criminal. Dick Cheney's removal from office is therefore an immediate, urgent priority for the U.S. Congress and others."