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Date Posted: 06:54:46 11/23/07 Fri
Author: part 2
Subject: Re: November 23, 2007
In reply to: part 1 's message, "November 23, 2007" on 06:53:34 11/23/07 Fri

IN DEPTH

ECONOMICS AND FINANCE

European Source: This Crisis Is "Without Comparison in Modern
History"

Nov. 22 (LPAC)--A senior European financial source described the
current situation to EIR today, as "without comparison in modern
history." The financial system froze in August, and, since then,
"no solution has been found to the problem."
The source also underscored Lyndon LaRouche's judgement of
the devastating potential of the Ohio foreclosure cases, where
judges have prevented foreclosures because the banks seeking
them, including Deutsche Bank, could not produce in court,
ownership documents for house mortgages. He said that "the
consequences of that are so immense, that there is no description
for it." The fact that so far nothing has happened, is only
because nobody knows about it.
We are now in a new phase, the source said, where "prime"
loans are going under, starting with the AAA-rated ones. "In
every single board room in the world, there is complete panic, as
there is nobody who is able to foresee the consequences of their
actions." He forecasts that sometimes around the turn of the
year, the second leg of the system, the stock market, will go
under.
In this situation--unprecedented in history-- starting
January 1st, new guidelines for the financial markets will go
into effect. Called Basel II, these guidelines will replace old
capital Requirements for banks, with a rating system; capital
requirements will be lowered, and everything will be based on
ratings. But such guidelines were decided when nobody had
foreseen that AAA would become a risk rating, the source said.
So, nobody knows what will happen when Basel II is in place.
[pr_/ccc]

Credit Derivatives Double as Markets Die

Nov. 22 (LPAC)--The size of the global market for credit
derivatives doubled during the twelve months ended June, 2007,
according to a report issued today by the Bank for International
Settlements. Credit derivatives, which are essentially insurance
policies which purport to protect speculators against defaults on
securities, rose from $20 trillion in June, 2006, to $43 trillion
in June 2007. $23 trillion of these derivatives are deals between
the major derivatives banks themselves, while another $18
trillion are between these banks and other financial
institutions, the BIS reported.
Since all of the major derivatives banks are already
bankrupt, the idea that they can insure each other against
defaults is ludicrous: while the credit derivatives system might
be able to handle isolated defaults, it cannot possibly provide
protection during a systemic blowout. Credit derivatives are a
prophylactic accounting fiction used to bolster the illusion that
the assets in the system are protected, but condoms have no value
when the rot is within.
The BIS also reported on the size of the global derivatives
market, which, it said, has increased by 35 percent in the 12
months ended in June, 2007, jumping from $454 trillion to $613
trillion. The over-the-counter (OTC) market accounted for $516
trillion of the total, while derivatives traded on exchanges
accounted for $97 trillion. These numbers should be taken with
large blocks of salt, since the sum total of all derivatives bets
is undoubtedly measured in quadrillions, and any attempt to
quantify the size of the market is foolish, since the bankers
themselves probably don't know, and any number you get will be
outdated before it is published, given the hyperbolic growth of
the derivatives market. [jph]

More Covered Bonds Uncovered, As Banking Crisis Spreads

Nov. 22 (LPAC)--A third bank, Abbey National, the British arm of
Spain's Banco Santander, has now been forced to pull out of the
sale of the mortgage-backed bonds called ``covered bonds.'' It
joins Allied Irish Bank (Ireland) and Ahorro y Titulazicon
(Spain), who also ran into trouble with their covered-bonds
trade.
Although still treated as only a side issue in the financial
press of Europe, the crisis in this sector, for the last several
months advertised as an allegedly "safe" one for private
investors, has turned critical enough to force a one-week freeze
of interbank trading with covered bonds in Europe.
A source with the German Association of Covered Bonds told
this news service on the phone this morning that the covered
bonds problem emerged mainly in Spain and Britain, where private
investors were scared out of those bonds. Many of these
bond-holders apparently came under acute pressure in the most
recent period, to get liquidity by selling such bonds, but the
banks have also been having problems finding buyers. Eurohypo,
the real estate branch of Commerzbank, reports traded volumes as
low as 20 percent below the average volumes traded in the
uncovered bonds market in 2006. The market trading volume in this
sector usually is several hundred million euros every day, but
that's no longer the case, the banking source said. And, there is
a trend among investors to shift from these covered bonds to
state bonds, which look like a safer investment. (rap)

EU Commission Announces Funds for Transport Projects Involving
Germany

Nov. 22 (LPAC)--EU Commissioner for Transport, Jacques Barrot,
announced in Brussels yesterday that, for the five-year period
from 2008 to 2013, his department will co-fund altogether 29
projects which are located in Germany, either in whole or in
part. The list includes the planned extension of the high-speed
rail track from Paris to Stuttgart, to Vienna and Bratislava; the
EU co-funding would amount to 338 million euros.
The biggest-single project among the 29 mentioned, will be
the upgrading of rail transport infrastructure on the route
Berlin-Palermo via Erfurt, Nuremberg, and on through the Austrian
Brenner Tunnel to northern Italy. To this the EUR will contribute
960 million euros. Also the Danish part of the Fehmarn Belt
Bridge will be funded, with 374 million euros, but no funding has
been provided for the German part. Nor was co-funding granted for
the Munich Transrapid project; apparently the German Government
has not even asked for that.
The plan for the European Transport Network, of which these
projects are a part, has been an integral part of the much more
ambitious Productive Triangle/Eurasian Landbridge drive by the
LaRouche Movement since 1989. The LaRouche plan, however, called
for using magnetically levitated trains, a technology only now
being picked up on in discussions in Denmark and Munich. (rap)

UNITED STATES

U.S. Sends Written Missile Policy to Russia

Nov. 22 (LPAC)--The Associated Press reports today that the U.S.
has submitted a formal proposal to Russia for cooperation on
ballistic missile defense. This follows Foreign Minister Sergei
Lavrov's public complaint that no written proposal from the U.S.
side had been received, weeks after the 2+2 meeting of foreign
and defense ministers from both sides to try to reach an
agreement on how, and if, a missile defense system in Europe
should be deployed. On Nov. 20, President Putin himself publicly
complained about the lack of a U.S. response.
On the table, has been the proposal made by Russian
President Vladimir Putin personally to President Bush at
Kennebunkport last June, where the Russian President called for
Russian-American cooperation on missile defense, as a move toward
a strategic partnership. The proposal was hailed by SDI author
Lyndon LaRouche as a potentially major breakthrough.
According to AP, the proposal that was submitted yesterday
will be discussed when Secretary of State Condoleezza Rice and
Lavrov meet Monday before the Middle East peace talks in
Annapolis, Md. The documents deal with U.S. plans to install a
radar in the Czech Republic and missile interceptors in Poland,
and Russian plans to suspend participation in the Conventional
Forces in Europe Treaty, or CFE.
AP reports that the U.S. offer includes: integrating U.S.,
Russian, and NATO missile defense systems to expand protection of
both Russia and the West, (which has been stressed by NATO
members), allowing Russian experts to make regular inspections of
the U.S. missile-interceptor site in Poland, which, U.S.
officials emphasized, is contingent on approval from Poland,
(which is, by no means, assured); and, delaying the activation of
the U.S. missile interceptors until it is clear that Iran can
reach Europe with ballistic missiles, (which evaluation, the
Russians have insisted upon).
AP reports that Russian officials have reacted positively to
the proposal of delaying activation of the interceptors. But
Russian negotiators insist that the offer include a binding
treaty that would detail specific terms for activation, said a
Russian official, and the United States would likely object to
such a demand. [mgf]

Former Iraq Commander Backs Dems' Iraq Troop Withdrawal Bill

Nov. 22 (LPAC)--Lt. Gen. Ricardo Sanchez, who headed U.S. combat
operations in Iraq in 2003 and 2004, says that he supports
Democratic-sponsored legislation which calls for bringing home
most U.S. troops by the end of 2008, according to Associated
Press.
In a statement to be broadcast on Saturday for the weekly
Democratic radio address, Sanchez says that Iraqi leaders are not
doing what is necessary to bring peace to their country, and the
U.S. can't force them to do so. He adds that the bill passed by
House Democrats -- which President Bush is threatening to veto --
"makes the proper preparation of our deploying troops a priority,
and requires the type of shift in their mission that will allow
their numbers to be reduced substantially."
Last month, Sanchez said that the U.S. mission in Iraq is a
"nightmare with no end in sight." [ews]

EUROPE

As Stock Market Plunges, Danes Think of Larouche Candidates

Copenhagen, Nov. 22 (LPAC)--A more sober mood is taking over the
Danish financial markets and the press, after the recent months
of denial of the global financial breakdown crises. In the recent
national election, LaRouche candidates ran under the slogan
``After the financial crash: Maglev over Kattegat,'' and they
were often asked, ``What financial crash?''
Today, the leading Danish financial paper, Borsen, reports
in an article headlined ``Panic-like mood is pressuring US
stocks,'' that financial uncertainty is continuing to frighten
investors away from Wall Street. And after reporting the high
losses of Nov. 21, the article quotes an analyst: ``It's a
panic-like market where there is a growing feeling of unknown and
unquantifiable problems that only time can solve.''
Borsen reports on the 30% collapse in the stock value of
Freddie Mac Nov. 20 after losses of two billion dollars, noting
that Freddie Mac needs 6 billion dollars to weather the crisis.
It notes the heavy losses by Countrywide Financial and a series
of financial houses, and statements by Alan Greenspan that this
is going to be long period of troubles. The article ends by
stating that Wall Street takes a day off on Thanksgiving, but
that the investors have little for which to give thanks right
now.
Also on Nov. 22, the front page of Borsen's Internet site
shows a picture of the Danish parliament, with LaRouche candidate
Tom Gillesberg's election poster from the recent election
prominently in front. The picture accompanies an article on
candidates not getting elected to parliament, but still getting
millions of crowns in financial support from the state
(http://borsen.dk/politik/nyhed/120947/). Tom Gillesberg is not
getting any of this money, but there is obiously good reason for
publishing his poster anyway: Everybody is thinking of his
prophetic warnings of the impending financial crash in the recent
election campaign as the financial crises deepens, and as the
leading Danish stocks have lost 15% of their value over the last
five weeks. [tg]

Under Investigation: Norwegian Group Uses Facebook to Hire an
Assassin

Nov. 22 (LPAC)--Norwegian police have started an investigation
into a Facebook group that is raising money to hire an assassin
to kill Islamist militant leader Mulla Krekar, who is resident of
Norway.
The Facebook group was started earlier this week by a
28-year-old Norwegian man, and, through Nov. 20, had reportedly
been joined by 400 other Facebook members. Mulla Krekar, leader
of the Al-Qaeda-sympathizer terrorist group Ansarul-Islam, which
is active in Northern Iraq, is facing deportation from Norway,
and extradition to the U.S., for his suspected involvement in
leading terrorist operations against the U.S. military.
The Norwegian man's identity is given on the Facebook site,
with a bank account number where Facebook members may donate to
pay the assassin. "To kill Norway's enemy number 1. Since Krekar
is hiding behind freedom of expression and calling for the
killing of the enemies of Islam, as he calls us, hereby I start a
group for people who are willing to donate money to give a
certain person a bullet in the head," states the announcement.
The Norwegian daily Dagbladet reports today that the group
is now removed from Facebook, but police still want to
investigate the case. [hus]

Ensure That No One Will Ever Be Hungry Again

VATICAN CITY, Nov. 22, 2007 (VIS)--At midday today, the Pope
received participants in the 34th general conference of the Food
and Agriculture Organization of the United Nations (FAO), which
has its headquarters in Rome.
In his English-language talk to the delegates, the Pope
indicated that "all forms of discrimination, and particularly
those that thwart agricultural development, must be rejected
since they constitute a violation of the basic right of every
person to be `free from hunger.' These convictions are in fact
demanded by the very nature of your work on behalf of the common
good of humanity."
Benedict XVI highlighted the paradox of "the relentless
spread of poverty in a world that is also experiencing
unprecedented prosperity, not only in the economic sphere but
also in the rapidly developing fields of science and technology."
Such obstacles as "armed conflicts, outbreaks of disease,
adverse atmospheric and environmental conditions and the massive
forced displacement of peoples," said the Pope, "should serve as
a motivation to redouble our efforts to provide each person with
his or her daily bread.
"For her part, the Church is convinced that the quest for
more effective technical solutions in an ever-changing and
expanding world calls for far-sighted programs embodying enduring
values grounded in the inalienable dignity and rights of the
human person," he added.
"The united effort of the international community to
eliminate malnutrition and promote genuine development
necessarily calls for clear structures of management and
supervision, and a realistic assessment of the resources needed
to address a wide range of different situations. It requires the
contribution of every member of society -- individuals, volunteer
organizations, businesses, and local and national governments --
always with due regard for those ethical and moral principles
which are the common patrimony of all people and the foundation
of all social life."
Benedict XVI continued his talk by saying that "today more
than ever, the human family needs to find the tools and
strategies capable of overcoming the conflicts caused by social
differences, ethnic rivalries, and the gross disparity in levels
of economic development."
"Religion, as a potent spiritual force for healing the
wounds of conflict and division, has its own distinctive
contribution to make in this regard, especially through the work
of forming minds and hearts in accordance with a vision of the
human person."
"Technical progress, important as it is, is not everything,"
the Pope told the FAO delegates. "Progress must be placed within
the wider context of the integral good of the human person. It
must constantly draw nourishment from the common patrimony of
values which can inspire concrete initiatives aimed at a more
equitable distribution of spiritual and material goods."
"This principle," he explained, "has a special application
to the world of agriculture, in which the work of those who are
often considered the `lowliest' members of society should be duly
acknowledged and esteemed."
In conclusion, the Holy Father recalled how "FAO's
outstanding activity on behalf of development and food security
clearly points to the correlation between the spread of poverty
and the denial of basic human rights, beginning with the
fundamental right to adequate nutrition. Peace, prosperity, and
respect for human rights are inseparably linked. The time has
come to ensure, for the sake of peace, that no man, woman and
child will ever be hungry again!" [krn]

SOUTHWEST ASIA

Syria To Make Decision on Annapolis Summit

Nov. 22 (LPAC)--It appears that a decision will most likely be
made today on whether Syria will decide to attend the Annapolis
peace summit. The London daily Al Hayat has a story claiming that
Syria will not attend unless the Golan Heights is a topic. But a
final decision will not be made until the Arab League meets to
decide on its own attendance. This decision will be decisive on
whether Syria attends. Syria and Saudi Arabia are expected to
make formal announcements by the end of today.
According to the format of the conference, one of the three
sessions will deal with a ``comprehensive peace,'' which is where
the question of Syria can be discussed, although it is not a
formal part of the agenda. Russia has asked Syria to attend, and
Jordanian King Abdullah has traveled to Damascus to make that
request. So, it really appears that Syria is being ``courted,''
and not pressured to come.
The Jerusalem Post reports that the Syrians have been
offered a deal by the U.S. and France, that if they attend the
conference, don't hinder the Israeli-Palestinian process, and
don't stand in the way of an election of a president in Lebanon,
then the U.S. and France would neither work to isolate Syria or
bring down the regime, and not press to appoint an anti-Syrian
president in Lebanon. This was the message carried to Assad
through the Jordanian King.
``Annapolis will not achieve its goals without Syria,''
Syrian journalist Ziad Haidfer wrote in Al Watan. ``Syria is
being asked to throw its weight around. The attempts to isolate
it have backfired.'' [dea]

Saudis Provide the Most Foreign Fighters in Iraq

Nov. 22 (LPAC)--Saudi Arabia was the source of 41% of the foreign
fighters who came into Iraq during the past year to carry out
suicide bombings or other attacks, according to an analyis
conducted by the U.S. military and leaked to the New York Times.
This is consistent with the efforts of the British- and
Cheney-allied Prince Bandar grouping in Saudi Arabia, to build up
a fundamentalist Sunni ``buffer state'' in al-Anbar and other
border areas of Iraq, as {EIR} has previously reported.
Although 40% percent was the previous rough estimate for
Saudi fighters, detailed analysis of documents and computer data
seized in a raid on a desert camp near the Syrian border provided
substantiation of this, with biographical data on more than 700
fighters who entered Iraq between Aug. 2007 and Sept. 2007. In
reporting this today, the New York Times also notes that foreign
fighters make up only a small portion of the insurgency in Iraq,
which remains overwhelmingly Iraqi and Sunni. Of more than 25,000
inmates in US detention camps in Iraq, who are suspected of
insurgent activity or considered a threat to security, only about
one percent are foreigners.
And despite all the propaganda aimed at Iran by U.S.
officials, only 11 Iranians are in U.S. custody. [ews]

Washington's Favorite Terrorists Organize Anti-Iran Petition in
South of Iraq

Nov. 22 (LPAC)--Today's Washington Post features a story claiming
that more than 300,000 Shi'ites in southern Iraq have signed a
petition denouncing Iran for fomenting violence in Iraq, and
claiming that Iran has taken over all of southern Iraq.
Only after puffing the petition, does the Post admit that
the petition drive is being backed by the Mujaheddin-e Khalq, an
Iranian exile group which is listed by the U.S. government as a
terrorist organization, but which nonetheless is harbored by the
U.S. in northern Iraq for its potential use against Iran. [ews]

SOUTH AND EAST ASIA

New Provocation Against China Aims To Destabilize Cooperation on
New Bretton Woods

Nov. 22 (LPAC)--Over recent days, leading economist Lyndon
LaRouche has stressed the absolute necessity of getting
cooperation from China in order to establish the urgently
required new monetary arrangement needed to replace the
collapsing world system. It is in this context that the latest
provocation from the U.S.-China Economic and Security Review
Commission must be evaluated.
The Commission, established by Congress in 2000 as part of a
``bash-China'' campaign, released its report on Nov. 21. As
reported, typically, in a front-page article in the Washington
Times, the conclusions include the following:
``The Commission concluded that China is developing its
military in ways that enhance its capacity to confront the United
States. ... For example, China has developed the capability to
wage cyber-warfare and to destroy surveillance satellites
overhead as part of its tactical, asymmetrical warfare arsenal.''
The report also claimed that China was engaged in a
``large-scale industrial espionage campaign'' with ``scores'' of
cases involving spies.
A Chinese spokesman has already responded to the report's
allegations, including those on China's currency policy.
Congress has apparently learned nothing from the fact that
its previous provocations against the People's Republic of China,
have resulted in an accelerating pullout by China, one of the
U.S.'s largest creditors, from the dollar--as Lyndon LaRouche had
warned. Or is the Commission perhaps another British tool,
seeking to manipulate a conflict that will destroy the United
States? [nbs]

Go-ahead for Maglev-Producing Factory in China

Nov. 22 (LPAC)--Shanghai is planning to build a manufacturing
capacity for the low-speed maglev variant, a genuine Chinese
development, in its suburban Nanhui District, the China Daily
reported this morning. The trains produced there, are expected to
serve the urban railway transport system, city officials revealed
yesterday. For the Chinese, "urban" means an area as large as the
German Ruhr region.
The Nanhui factory, which will cover an area of 230,000
square meters, is designed to produce 60 Maglevs and 300
levitation frames each year. Each train will have a maximum speed
of about 100 kilometers per hour.
The announcement on the Nanhui project came after a Nov. 21
seminar held by the Shanghai Committee of the Chinese People's
Political Consultative Conference which discussed the planning of
Lingang New City in Nanhui. Now a small city, Nanhui, which is
close to the Yangshan Deep-Water Port, will cover a total area of
almost 300 square kilometers, and have an estimated population of
800,000 by 2020. The pro-maglev decision is part, therefore, of a
big urban development program in the region, including the
development of productive industrial manpower. (rap)

Asean Signs Charter, Resists Pressure to Isolate Myanmar

Nov. 22 (LPAC)--Resisting heavy pressure from Western governments
and media, the ten South East Asia nations of ASEAN signed an
economic and political charter on Tuesday Nov. 20 without in any
way disfranchising its member-nation Myanmar. The Charter, whose
purpose is to increase the economic integration of the involved
countries, along the lines of the European Union, does contain a
"human rights" provision, but with no delegation of authority to
either the ASEAN organization as a whole, or individual members,
to intervene in the internal affairs of member countries.
The entire international media establishment, including the
New York Times, the Financial Times, the Wasington Post, the Wall
Street Journal, etc., along with such official government bodies
as the U.S. Senate, the U.N. and the U.S. Commerce Department,
among others, exerted pressure on the ASEAN meeting to exclude,
punish, isolate, or in any possible way, hurt Myanmar over its
internal situation. The U.S. Senate, for example, had unanimously
adopted a resolution urging the bloc to suspend its "errant"
member Myanmar. That suggestion was quickly rejected by ASEAN
secretary-general Ong Keng Yong, who said confrontation is not
the answer, according to the AFP.
The meeting, which was held in Singapore, and was also
attended by China, Japan, and South Korea (the Plus 3), would
have been an ideal venue to discuss economic development measures
for the still largely impoverished region. The conflict around
Myanmar, however, took all the attendees' attention away from
such actually relevant matters. Besides signing the Charter, a
number of fairly weak "green", "Stop Global Warming" proposals
were passed.
Chinese Prime Minister Wen did take the opportunity to have
a well-publicized meeting with newly-installed Japanese Premier
Fukuda, and S. Korean President Roh Moo-hyun, on the sidelines of
the ASEAN meeting. (ron)

*** END OF BRIEFING ***

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