VoyForums
[ Show ]
Support VoyForums
[ Shrink ]
VoyForums Announcement: Programming and providing support for this service has been a labor of love since 1997. We are one of the few services online who values our users' privacy, and have never sold your information. We have even fought hard to defend your privacy in legal cases; however, we've done it with almost no financial support -- paying out of pocket to continue providing the service. Due to the issues imposed on us by advertisers, we also stopped hosting most ads on the forums many years ago. We hope you appreciate our efforts.

Show your support by donating any amount. (Note: We are still technically a for-profit company, so your contribution is not tax-deductible.) PayPal Acct: Feedback:

Donate to VoyForums (PayPal):

[ Login ] [ Contact Forum Admin ] [ Main index ] [ Post a new message ] [ Search | Check update time | Archives: 1, 2, 3, [4], 5, 6, 7, 8, 9, 10 ]

[ Next Thread | Previous Thread | Next Message | Previous Message ]

Date Posted: 18:49:22 11/17/07 Sat
Author: part 1
Subject: November 17, 2007

ICLC BRIEFING INTERNATIONAL VERSION

[A7-46-6/BFG001]:BFG:L: [07/11/16][06: ]AM BRIEFING [1]
STAND:[1.1.00/ ][3.4.10/ ][0.1.00/ ] [21: ]ECO-FIN
SUBJT:[5.1.11/ ][4.1.11/ ][2.1.11/ ] [24: ]STR STUDIES
TOPIC:[060.000 :AM BRIEFING ]
SUB-T:[061.000 :AM BRIEFING, ENGLISH ]
TITLE:[BRIEFING FOR SATURDAY NOV 17 2007 ] 1 of Pages

SYNOPSIS:

TO:ALL POINTS BY: MICHELE STEINBERG/JWS
RE:MORNING BRIEFING, SATURDAY, NOVEMBER 17, 2007.
2 IMPEACHMENT. HBPA. THE END OF THE FINANCIAL SYSTEM.

+---------------------------------------------------------------+
| |
| |
| MORNING BRIEFING |
| |
| Saturday, November 17, 2007 |
| |
| |
+---------------------------------------------------------------+

LAROUCHE: THE "LEGITIMATE SUSPICION" THAT BANKS LEVERAGED
UNOWNED MORTGAGE PROPERTIES, COULD BRING DOWN THE SYSTEM

On Thursday, there was the Federal Reserves Weimar-style
pumping of $47 billion cash into the banks--the largest infusion
since the Sept. 11, 2001 attacks. Then there was the
back-to-back collapse of Fannie Mae's stock--a 10% loss on Nov.
15, and a 13% loss on Nov. 16. Fannie Mae, the mortgage giant is
the owner or guarantor of $2.7 trillion of U.S. mortgage assets.

On the news of the Fannie Mae disaster, Lyndon LaRouche
overthrew the apple cart of "business as usual", and drew out the
implications of Oct. 31 decision in Cleveland, Ohio, by Federal
Judge Christopher A. Boyko, to dismiss 14 home foreclosure cases,
brought by Deutsche Bank National Trust Co. The judge found that
Deutsche Bank did not {own} the property it was forceclosing!

"This sounds very, very serious," LaRouche warned. The
question posed is whether banks have been duplicating the use of
assets. Implicitly, the Ohio case involves much more than the
judge's interpretation. "The judge has stumbled into something
which could be the leveraging of the same asset over and over by
different companies," LaRouche said, and "any suspicion and doubt
about this is enough in itself, to bring the system down."

The Cleveland case in brief: The plaintiff, the Deutsche
Bank Trust, was denied its demand to foreclose on the cited
homeowners, because the judge ruled that there was no proper
recording with local government offices of the property titles,
mortgage contracts and assignments of Deutsche Bank's claimed
ownership, in writing, per requirements of the pertinent law.

"This is {deadly}," LaRouche said, and it probably goes to
the whole mortgage bubble. As the Cleveland case suggests, if
banks are listing mortgages as collectible assets, with no record
in the local registry, the suspicion is created, if not proven,
that they could be using the same asset over and over again. The
amount of charges against the assets can be far greater than the
asset. This "smells of a major problem."

Anyone looking at this can see the way for duplication of
use of assets, and for liabilities to vastly exceed assets. It is
the nature of the market that no one knows what is pledged on an
asset. No one knows what is leveraged onto a price-earnings
ratio.

This means that when you are dealing with this situation,
{you are dealing with a "breakdown crisis, and not with a
management crisis."} This cannot be "managed."

There is legitimate suspicion that loans have been sold as
part of a securitized package, several times over. They are put
in a pool, and leveraged. The same nominal asset has been hawked
several times over. When this suspicion comes up in a Federal
case, arising in a major city of the United States, it is a
legitimate suspicion. "Was this asset used several times over?"
Even without proof that this happened in any of these cases, even
just the smell of this condition could blow the system out.
"These people have been caught with their pants down, when they
weren't sitting on the toilet!"

What is involved is someone borrowing the use of
indebtedness. It is as if there is an uttering of a check, and
signing it, but not allowing it to circulate. The check is just
used to create an artifical inflationary process. That's the
situation with these kinds of practices. We can conclude that by
the very character of the system now, the system is collapsing.
What lies ahead is that, "The worst is to come, not 'Things to
Come.'"

The essential thing is that the whole damn system is going
down. When people ask, "When will it collapse? Will this push
into a collapse," that's a fallacy! The system is already gone.

LaRouche's Leadership Now

There is {no excuse} for Congress not to pass the Homeowners
and Bank Protection Act. As the above case shows, there is no way
to know the value of assets--it's impossible under the practices
of this system. So, the values must be {frozen} as the HBPA says.

There is also {no excuse} for Congress not to impeach Dick
Cheney. Nancy Pelosi and Cheney will be "partners in murder" if
the Iran war occurs as Cheney plans it. On Nov. 14, following a
Capitol Hill forum, Rep. John Conyers (D-Mich.), the House
Judiciary Committee chairman, told reporters that the impeachment
resolution against Cheney is "under active consideration." He
refused to provide any further details, describing the Cheney
impeachment, accurately, as "the most sensitive matter before the
nation." Conyers added, "Every member up here is being besieged
by people demanding an impeachment action be begun.'

During that forum, former Sen. George McGovern said that
there is more evidence to impeach Cheney than there was against
Richard Nixon. LaRouche outlined the grounds for impeaching
Cheney in 2002 over the false pretenses used to attack Iraq. Now,
on the eve of Cheney's next war on Iran, there is no excuse for
delay.

LAROUCHE

LYM LEADER ADDRESSES NATIONAL BLACK CAUCUS OF LOCAL ELECTED
OFFICIALS (NBCLEO) on HBPA in New Orleans.

JOE NEAL, FORMER NEVADA STATE SENATOR, ADDRESSED THE FDR
LEGACY CLUB of the Los Angeles area Democratic Party Thursday
evening.

IN GERMANY THIS WEEKEND, the BueSo and LYM will organize
with the new statement by Helga Zepp LaRouche, calling on the
railway engineers to use their ongoing national strike as an
opener for a broader debate about the economic-financial collapse
and the NBW/Firewall alternative to breakdown. The statement,
which will appear in the upcoming issue of {Neue Solidaritaet},
also points to the paradox that everywhere in the world,
especially in China, there are huge investments made in the
railway grid, whereas in Germany, the government is obsessed with
selling the railways off to locust funds. The statement
furthermore recalls the WTB plan of 1931, as the policy which,
had it been adopted then, would have created the German
equivalent of FDR's New Deal.

THE SONORA, MEXICO EVENT ORGANIZED BY THE LAROUCHE MOVEMENT
ON THE WATER CRISIS was a brilliant intervention, Lyndon LaRouche
commented today. The way the floods were brought in to
demonstrate the water plan, really worked. (See slugs)

TOMORROW IN BRUSSELS, THE FRENCH ORGANIZATION WILL INTERVENE
IN A MASS RALLY by Belgians that want to maintain national unity.
Our squad there will deploy on Sunday with a leaflet calling for
Belgium, presently a dysfunctional constitutional monarchy, to
become a republic, as the way to build and keep national unity.

ECONOMY AND FINANCE

LAROUCHE: THERE IS "LEGITIMATE SUSPICION" of the duplication
of home mortgage assets, shown in case of the October Federal
judge decision in Cleveland to refuse Deutsche Bank National
Trust Company to foreclose on 14 homeowners. Even without proof
this happened in this, or other instances, just the smell of this
condition could blow out the system. (See lead)

NET CAPITAL OUTFLOW FROM THE U.S. IN SEPTEMBER WS $14
billion, said a Treasury Department release on Nov. 16. After 10
years of postive inflow to the U.S., this was the second
consecutive month of net outflow, following $150 billion in
August. In both months, were was a net liquidation of U.S.
Treasury notes by China and Japan, which in September was about
$3.5-4 billion each. (See slug)

JAPAN CENTRAL BANK CHIEF SAID GLOBAL ECONOMIC GROWTH COULD
BE HURT BY AN ESTIMATED 5% THIS YEAR BY THE U.S. SUBPRIME
MORTGAGE CRISIS and the resulting financial turmoil, in a
commentary on Nov. 15.

FANNIE MAE FALLS ON ITS FANNY; Its Stock Down in Double
Digit, Two-day Plunge. (See slug)

A PARADE OF LOSS ANNOUNCEMENTS by Mortgage Firms and Banks,
Led by Fannie Mae's Big Stock Plunge, includes Barclays, Freddie
Mac, et al. (See slug)

CRUMBLING NORTHERN ROCK Sees Departure of Chief Exec and
Four Board Members. (See slug)

U.S. CITIES POSTPONE BOND BORROWINGS, As Credit and
Bond-Insurance Dries Up, from Chicago O-Hare Airport, to Dade
County, Florida. (See slug)

WHITE HOUSE SAYS, "WHAT BANKING CRISIS?" (See slug)

VIRGINIA GOV. KAINE ANNOUNCES NEW "FORECLOSURE TASK FORCE,"
to Deal with Home Mortgage Blow-Out. (See slug)

U.S. INDEX OF INDUSTRIAL PRODUCTION FELL in Octover, in a
broad decline ranging from home appliances, to mining. (See slug)

CHINA: SUB-PRIME LOSSES and threat to exports. (See slug)

SECURITY/CULTURE

YOUTH CONTRACT KILLERS FOR DRUG CARTEL; VIDEO GAME KIDS--a
case study from Texas. (See slug)

UNITED STATES/CANADA

REP. CONYERS SAYS IMPEACHMENT RESOLUTION AGAINST CHENEY is
"Under Active Consideration." (See slug)

REP. KUCINICH ON IMPEACHMENT: "DO IT NOW!" (See slug)

HOUSE PASSED "BARNEY FRANK" BILL 291 to 127, on Nov. 15,
which does nothing about the current foreclosure crisis; Senate
passed housing bill proposing more funds for "counseling." (See
slug)

The U.S. Army desertion rate is at its highest level since
1980; since the 2003 invasion of Iraq, the rate has increased by
80%, and since 2006, by 42%. In fiscal year 2007, approximately 9
out of every 1,000 soldiers deserted.

Iraq War Supplemental Spending Bill Blocked in Senate as
Democrats continue to hide behind Pelosi's mask. (See slug)

U.S. facing "no-win" situation in Pakistan, says Graham
Fuller, former senior CIA official. (See slug)

Democratic Presidential candidates said on Nov.15 they would
step up pressure on President Musharraf over democracy, and
criticized White House policy towards Islamabad.

IBERO-AMERICA

ARGENTINA WILL HAVE ITS NATIONAL DEVELOPMENT BANK under
President Christina Kirchner. (See slug)

MEXICAN SENATOR ON BUILDING WATER PROJECTS and thinking
about the future the way "normal people used to do." (See slug)

SONORA GOVERNOR SUPPORTS PLHINO AGAIN, and says its time
Mexico stop exporting everything cheaply--including its own
people. (See slug)

WESTERN EUROPE

British Moves to Create Unrest in Pakistan Now Out in the
Open. (See slug)

Great Britain's new top intelligence chief, Alex Allan, is a
"Deadhead;" he even keeps a Grateful Dead website. (See slug)

Majority of Germans Shift to Back Railway Workers' Strike.
(See slug)

Polls, Profiling and Other Dirty Operations Target Belgium
for Break-Up. (See slug)

AFRICA

South Africa and Zimbabwe cooperating against Britain's
"regime change." (See slug)

South African officials have said little about the two
attacks in one night recently against the nations primary nuclear
research facility. (rma)

SOUTHWEST ASIA

China Pulled out of London Talks on Iran that were to
discuss new sanctions. (See slug)

Although Pakistan does not have diplomatic relations with
Israel, outgoing Pakistan Foreign Minister Khursheed Mehmood
Kasuri says Pakistan has never been out of touch with Israel in
the last 50 years.

Iranian President Mahmoud Ahmadinejad will begin an official
visit to Bahrain, the base of the U.S. 5th fleet, on Nov. 17--his
fourth to a Persian Gulf country in the last nine months.

Saudi Arabia is building up a special 35,000-strong rapid
reaction force to protect its energy installations from attacks
by militants targeting the world's largest oil exporter.

OTHER ASIA

Pakistan's outgoing premier Shaukat Aziz warned on Friday
that Islamabad would not be bossed around. Pakistan is a
sovereign country and no one can dictate it, state-run Associated
Press of Pakistan quoted Aziz as saying in a television
interview.

China Banks Pouring Funds Into Nuclear Energy. (See slug)

India, China Trade Grows Rapidly. (See slug)

Another Glaring Failure of India's Manmohan Singh Government
(See slug)

Vicious Cyclone Killed more than 500 in Bangladesh (See
slug)

LEADING DEVELOPMENTS

Fannie Mae Falls on Its Fanny; Its Stock in Double-Digit Plunge

Nov. 16 (LPAC)--The stock value of Fannie Mae, owner or guarantor
of $2.7 trillion of U.S. mortgage assets, plunged 10% on Nov. 15,
and by late morning today, fell another 13%, to $37.44. This came
on the occasion of suspicion that its newly announced accounting
figures for write-offs and losses, understate the size of losses
hitting the mortgage-finance company. To no avail, Fannie Mae
executives held a conference call this morning to defend their
statistics, which also involved a change of accounting method.
Fannie Mae has reported a loss for the Third Quarter of $1.39
billion.
Founded in 1938, as part of the FDR New Deal effort to
supply liquidity for housing, in 1968 the Federal National
Mortgage Association--known as Fannie Mae--went private as a
GSE--government sponsored enterprise. It is authorized to make
and back loans, but it does not have government guarantee. During
the years of the Greenspan Home Mortgage Bubble, Fannie Mae came
to be a principal player in the market of U.S. mortgages,
derivatives and all manner of Bubble instruments. Fannie Mae
falling on its fanny means that there is no bottom to the
collapse, unless there is emergency intervention. (mgm)

A Parade of Loss Announcements by Mortgage Firms and Banks, Led
by Fannie Mae's Big Stock Plunge

Nov. 16 (LPAC)--Fannie Mae's double-digit stock plunge over Nov.
15 and 16--the biggest since the 1987 market crash--leads a
parade of other big names losing share value as they post huge
losses in home mortgage-related financing activities and
speculation. Year-to-date, the value of U.S. financial stocks is
down 15% overall, as measured by the D.J. Wilshire Index of
financial firms.
* Barclay's, one of the world's major banks, yesterday
reported $2.67 billion in charges and write-downs for securities
tied to subprime mortgages.
* Bear Sterns stock dropped 3% on Nov. 15, after its
long-term rating was downgraded a notch by Standard & Poors,
following an asset write-down by Bear Sterns of $1.2 billion in
its Fourth Quarter.
* Shares of Freddie Mac, a U.S. GSE (government-sponsored
entity) like Fannie, fell 6% yesterday, by $2.49, down to $39.37.
* Novastar Financial Inc., a major player in subprime
mortgages, saw its share value drop 25%, or 53 cents, down to
$1.56 yesterday. There are now expectations that Novastar, linked
to Wachovia Bank, will declare bankruptcy. Novastar, which
reported a $598 million loss in the Third Quarter, is currently
not in compliance with covenants of operation with Wachovia, and
is still functioning on a waiver which expires Nov. 30. There is
a scramble to pay down debt and take other contingent actions,
which may fail. (mgm)

Mexican Senator: Let Us Think About the Future, as "Normal
People" Used to Do

Nov. 16 (LPAC)--Political leaders in the north of Mexico are
demonstrating the courage to change their axioms. Under the
headline, "Yes to a Vision of the Future," on Nov. 11, Sonoran
daily {El Imparcial} published the closing speech given by
Sonoran Federal Senator Alfonso Elias Serrano, from the PRI
party, to the Regional Forum "Let's Build the Bridge to the
Future: the 21st Century PLHINO." There, the Senator called for
turn away from the errors of NAFTA, back to the commitment to
building long-term, great projects which "normal people" had four
decades ago.
The Nov. 9 forum, attended by over 500 people, was organized
by the 21st Century Pro-PLINHO Committee, founded at the
intiative of the LaRouche movement to mobilize the political army
required to build the tri-state water management project known as
the North West Water Project (PLHINO). Sen. Elias Serrano and
other Congressmen from Sonora yesterday credited the Pro-PLHINO
Committee and its forum, with securing the Mexican Congress's
decision this week to allocate 30 million pesos to finance the
feasibility study required to build the PLHINO.
Sen. Elias told the forum:
"A few weeks ago, I heard one of the members of the
Pro-PLHINO Committee of the 21st Century say that forty years
ago, people held a larger vision of the future ... that then,
there were more normal people.
"And this made me reflect on at just what moment did we
cease to be normal people; at what moment did we stop thinking
about the future, and concentrated on resolving day to day
problems.
"But it's not a question of regretting or seeking someone to
blame for what could have been, but was not. Rather, it is a
question of recovering, as a Nation, the vision of the future
that we had in the days when great infrastructure projects were
proposed in Mexico; in the days when advances were made in space
exploration internationally; in the days when our universities
carried out ambitious research toward eradicating diseases and
epidemics in the world.
"And this is where the North West Water Plan (PLHINO) comes
in, because it proposes to bring water from [the state of]
Nayarit to Sinaloa and Sonora, through the construction of great
engineering works transporting surplus water from one basin to
the other, by means of 16 consecutive rivers that stretch from
Santiago in Nayarit, to the Yaqui in Cajame, by means of which 16
billion cubic meters of water that currently pour into the sea in
that area, could be exploited. With this, we would be in a
position to confront the great challenges of food, water and
energy that we will need in the future, and to resolve in part
the problem of immigration.
"With the launching of the Free Trade Agreement (NAFTA) in
1994, and under the notion that it was more feasible to import
food than to produce it, we stopped farming in countryside at the
rate that we had been, and we became dependent on the United
States for food. Now, we realize that conditions in the world
have changed regarding food supply and demand.
"Already in the past few months, we have had a taste of what
is coming if we don't find alternatives for meeting Mexican's
demand for grain, to keep tortilla and other basic product prices
accessible.
"At the same time, we have emerging countries like China and
India which, in recent years, have been growing at historic
rates, and their people, now with greater buying power, are
demanding more and better products from the countryside.
"This foretells a series of challenges that are to come in
the area of food, water and energy.
"That is why we must put everything we have into pushing for
the PLHINO. Because it would guarantee Mexico's food sovereignty
with nearly 400,000 new hectares for agriculture in the three
states which would benefit... it would create thousands of jobs
in construction, tourism, industry and the countryside, including
more than 5 milllion agricultural jobs; it would generate the
capacity to produce more than 1,000 megawatts of clean and
cheaper energy, and it would provide Sonora with more than one
billion cubic meters of water.
"The PLHINO must be seen as both a matter of State and of
national security, and any analysis of it must focus on the
benefits that it would generate for the quality of life of the
citizenry. Of course, the PLHINO requires an important investment
of resources, but this is not a short-term project, but rather
one that will come to fruition step by step over the coming
years, which will also allow the use of novel financing options.
"In sum, one must remember that Rome was not built in a day
and that, as the popular refrain goes, if these things were easy,
everyone would do them." [vfr/ggs]

Sonora Governor Campaigns for PLHINO, and Industrialization

Nov. 16 (LPAC)--Sonora Goveror Eduardo Bours yesterday continued
the campaign for construction of the tri-state North West Water
Project (the PLHINO), calling such infrastructure projects the
key to increasing Mexico's ability to feed itself.
Speaking to agricultural producers in the south of the
state, the governor warned the global raw materials crisis faced
by Mexico will not be short, but this represents an opportunity,
as well as a problem for Mexico, he said. We must reformulate our
agriculture policy, and increase our food production
capabilities, and infrastructure projects such as the PLHINO are
the best way to do that, he said. Mexico also needs a State
policy of promoting more value-added agricultural production
(i.e., more industrialization, less raw materials), because right
now it is exporting everything cheaply--including its own people.
On Nov. 9, at the Regional Forum on Water, Energy and Food
organized by the 21st Century Pro-PLHINO Committee, Gov. Bours
endorsed completion of the PLHINO--first proposed in 1960!--as
the task which this generation must fufill.
Briefed on the mobilization for the PLHINO by many of
Sonora's leadership coming off the Pro-PLHINO Committee's forum,
Lyndon LaRouche today reiterated his decades-long support for
national water projects in Mexico such as the PLHINO and its
counterpart, the North Gulf Water Project (PLHIGON), which would
transfer water from the south of the country north. These
projects are a matter of national security for the United States
itself, LaRouche has said, because of the security they would
bring to its neighbor, Mexico.
The flood, which devasted the south of Mexico, just as
representatives of northern Mexican states gathered to discuss
the regional water projects required to end the drought devasting
their region, demonstrates my point, LaRouche said: Mexico has
water! If these infrastructure projects had been built, as his
friend Mexican President Jose Lopez Portillo (1976-1982) had set
out to do, the flooding would not have occurred, jobs would have
been created, and agriculture would have expanded. It should have
been done before, and it should be done now, he said. And this
should be pushed internationally. [ggs/wfw]

ECONOMY AND FINANCE

White House Denies Reality of a Banking Crisis

Nov. 16 (LPAC)--In an exchange with {EIR} correspondent Bill
Jones today, White House Deputy Spokesman Tony Fratto denied the
reality of a banking crisis. What follows is the exchange:
EIR: Tony, there's been a lot of discussion, necessarily, on
the housing crisis and the White House has taken some measures
with regard to the foreclosures--which probably will prove
somewhat inadequate. But there has not been enough attention
placed on the second shoe which will drop as a result of those
foreclosures, and that is those banks who have given out these
loans are going to be forced to close their doors as the money is
not coming in. Has the President and his economic team taken
consideration to the possibilities of a banking crisis coming out
of this crisis in the sub-prime market?
MR. FRATTO: I'm not sure that I agree with the
connect-the-dots story that you have outlined. And I think if
you had been--if we had been talking about this issue 20 or 25
years ago, that might be exactly what you might have expected.
One of the complicating factors in the housing sector is that
that connection between the borrower and the bank is not the same
thing that you see today, and that's because loans are sold now
in secondary markets and securitized and sold around the world.
Now, there are benefits to that and there are also problems
associated with that. Some of the benefits are that you spread
risk everywhere. Some of the problems is that the lender can't
go down to their community bank and ask them, how can we find a
way to keep this mortgage going so I can stay in my home?
It is an incredibly complex relationship in that sector.
Secretary Paulson, the HUD Secretary, Alphonso Jackson, are
working on this. They're working with lenders and borrowers to
try to bring them together and to keep as many Americans in their
homes as possible. That's what the President wants to see. And
we also hope that some of the administrative actions that we've
taken, that the President announced a couple months ago, do help
more than you think they will. We also call on Congress to pass
the legislation that's been sitting on their desks for some time,
so that we can make more progress.
EIR: A follow-up with regard to the banks. Obviously
they're not the major lenders to the housing market, although
there still is a lot of exposure. There are people who have
taken money from banks to buy their houses and now they find
themselves in difficulties, which will have a direct effect on
the banks. But there's a second problem to that, to the extent
that the banks have often used the sub-prime market to hedge
funds in order to cover other loans that they have, and so that
the effects of the sub-prime market is much more extensive in
terms of the entirety of the banking system than simply the
relationship of a lender to a borrower. And that will have its
effects, to the extent that the banks will not get the predicted
funds that they have gotten--that they have expected through
going out on the sub-prime market.
MR. FRATTO: That's true, and like I said, we hope that some
of the reforms that we've talked about, and some of the work that
Secretary Paulson is doing with banks and with the secondary
markets can help to improve that. It is a very complicated
issue. [WCJ]

U.S. Lost in Capital Outflow Again in September

Nov. 16 (LPAC)--The $150 billion outflow from the dollar and U.S.
investments in August was called "stunning," and "incredible"
because it reversed a mass influx of the world's money into U.S.
dollar investments which often reached $100 billion a month
throughout the whole "globalization" era.
But the U.S. Treasury released data Nov. 16 showing that the
outflow from U.S. investments continued in September as the
dollar continued to fall. Although this time the net loss from
U.S. investments was only $14.1 billion, it included, again, net
liquidation of U.S. Treasury and other securities by China,
Japan, and the "Caribbean banking centers" of London jurisdiction
and control. The China and Japan net liquidations, about $3.5-4.0
billion each, are a very small fraction of those countries'
dollar reserve holdings, but it is clear that their massive
support of the dollar by absorbing vast quantities of U.S. debt,
has stopped.
It had to. The dollar debt assets foreigners were buying
included trillions in speculative mortgage-bubble and related
securities which are now illiquid, and whose value is collapsing.
CNBC reported Nov. 16 that on television programs in China,
"expert" investment advisors are telling individual Chinese to
get rid of investments in dollars, and go into those in other
currencies. [pbg]

U.S. Industrial Production Index Dropped in October, Reflecting
Both Mortgage Bust, and Overall Decline

Nove. 16 (LPAC)--The index of industrial output in the United
States, showed a decline of 0.5% (from prior month) in output of
factories, mines, and utilities. The figure was released by the
Federal Reserve today. Despite unreliability of such statistics,
the contraction of the U.S. economy is so gross, that the falling
index gives an actual indication of declining output across the
board. Fed and Treasury Department figures show subsector
declines:
* Factories made 0.4% fewer goods in October. (Factories
account for four-fifths of what's called industrial production,
with the remaining portion accounted for by mining and
utilities.)
* Utility production dropped 1.6%.
* Mining output, including petroleum drilling, decreased
0.6%.
* Motor vehicle and parts production fell 1%.
* Consumer durable goods production, including furniture and
electronics, dropped 0.6%. The decline in sales of consumer
durable goods goes along with the home mortgage bubble blow-out.
For example, Whirlpool Corp., the largest home appliance
manufacturer in the world, posted a decline of 8% in its Third
Quarter sales this year.
Capacity utilization of productive facilities is also
declining, even as the capacity itself has been shrunken by the
drastic takedown of the auto and other manufacturing sectors.
Capacity utilization fell in October to 81.7% down from 82.2% in
September. (Capacity utilization is actual production taken as a
percentage of potential production from plant and equipment.)
(mgm)

U.S. Cities, Projects, Entities Hit by Loss of Credit

Nov. 16 (LPAC)--As turmoil worsens for banks and all credit
institutions, U.S. municipalities and entities are forced to
delay bond issuances and borrowing, including for vital
functions. Among the recently delayed or postponed municipal bond
issuances are the following:
* Chicago O'Hare International Airport--$960 million
* Puerto Rico Public Building Authority--$900 million
* Miami-Dade County, Florida--$540 million
One factor in this picture, is that the insurer of municipal
bonds--also of mortgage-backed-securities--are in crisis. Share
values of the major insurers are plunging. On Nov. 15, shares
fell 7.2% in one day for Ambac Financial Group, Inc., which has
lost 48% of its share value in the past three months. Yesterday,
executives of Ambac started criss-crossing the country to meet
with municipal bond issuers, investors, and banks to attempt to
calm panic. (mgm)

Virginia Gov. Kaine Announces New "Foreclosure Task Force" to
Deal with Home Mortgage Blow-Out

Nov. 16 (LPAC)--Virginia Gov. Tim Kaine (D) yesterday announced
the formation of a new state entity, the Virginia Foreclosure
Task Force, to address the worsening home mortgage and credit
crisis. This is the latest in a number of state-level rearguard
actions, given the fact that so far, Congress refuses to face the
full scope of the systemic financial breakdown since the
speculative mortage-bubble burst. In June, Maryland Gov. Martin
O'Malley (D) likewise launched a task force. Speaking in Roanoke
yesterday, at a housing conference, Kaine said, "My goal is to
have policies in place that will help Virginians before they are
faced with foreclosure."
By nature, the efforts of both Virginia and Maryland, are
confined to buying some time for a few home mortgagees in trouble
in the future, and otherwise, giving advance warning to
borrowers. The Maryland task force has issued such
recommendations as mandating a 90-day grace period for homeowners
who have defaulted on mortgage payments, etc. But nothing is yet
implemented. Kaine did not give a timetable for what his new
taskforce is to do.
As of June 30 in Virginia, 5,800 homes were already in
foreclosure; 4,000 of those involved the "non-traditional"
mortgages, with trick conditions. Overall, during the period
covering 2005 and 2006, according to the Center for Responsible
Lending, Virginia had 28,550 homes in foreclosure; Maryland had
38,352 in foreclosure. In Virginia, "It's getting worse and
worse," warned Helen O'Bierne, director of the Center for Housing
Leadership at the Richmond-based group HOME (Housing
Opportunities Made Equal). As reported in today's {Washington
Post}, Bierne also pointed out that, in its own terms, the new
Kaine agency would not even be going into effect soon. The
Virginia General Assembly will likely not get to considering the
"emergency" taskforce until January, 2008, because no time is
being made for it in the current session. (mgm)

House Passes Housing Bill Which Doesn't Address Current Crisis;
Senate Proposes Increased Funds for "Counseling"

Nov. 16 (LPAC)--Yesterday, the House voted 291 to 127 to pass a
bill sponsored by House Financial Services Committee chairman
Barney Frank (D-Mass.) and Rep. Brad Miller (D-N.C.) to reform
and provide accountability for mortgage practices and to provide
minimum standards for consumer mortgage loans, among other
things. The large, bipartisan vote demonstrates the fear that the
foreclosure crisis has inspired in both parties, but the bill
includes nothing resembling the kind of firewall protection for
homeowners and banks that has been proffered by Lyndon LaRouche
with his Homeowners and Bank Protection Act.
That the bill was not intended to help those homeowners who
are in trouble now, was stated at the outset of the debate by
Frank, himself, when he told the House that "What we have today
is a bill that cannot undo what happened but makes it much less
likely that it will happen in the future." The amendments offered
during the debate by both Republicans and Democrats also did
little to address the current crisis, being mostly aimed at
tweaking the provisions in the bill. The White House has not
threatened to veto the bill, but it did complain that the bill
"unduly restricts" access to credit.
Earlier in the day, Senate Republicans blocked action on a
bill modernizing the Federal Housing Administration even though
the Senate banking Committee passed the bill on a 20-to-1 vote.
Senate majority Leader Harry Reid (D-Nev.) told reporters
afterwards that "We have a crisis out there," then proceeded to
list a series of measures that the Democrats are proposing that,
like the House bill, will not really help most of the people
caught in the crisis. The most substantial proposal is a
provision for $200 million in the fiscal 2008 appropriations bill
for the Departments of Transportation and Treasury that will go
to non-profit organizations to provide foreclosure counseling.
The non-profits, said Sen. Patty Murray (D-Wash.) "are being
inundated with these families who are trying to figure out how to
deal with the personal impacts of this." [cjo]

Chief Exec, Four Directors Depart Crumbling Northern Rock

Nov. 16 (LPAC)--Five resignations were announced today by
Northern Rock, the failed British mega-mortgage lender, now on
financial life-support from the Bank of England. This follows the
departure in October of Matt Ridley, Northern Rock's chairman.
Today the Chief Executive of the bank, Adam Applegarth, resigned;
and four non-executive directors of the bank board will
leave--Sir Derek Wanless, Nichola Pease, Adam Fenwick and
Rosemary Radcliffe. Over the Summer, Northern Rock, the largest
single player in the recent years of the British home-mortgage
bubble, crashed, as particulars of its non-performing loan base
became known. There were were runs on its bank branches all
across Britain. Only heavy cash infusions from the Bank of
England, and certain international banks, have kept up the
pretense of a future for Northern Rock. One potential buyer is
the Virgin Group, which today released some particulars of its
offer. An alternative offer for Northern Rock comes from Olivant,
the fund created by a former CEO of Abey National Bank. The talk
is for the departing Chief Executive Applegarth is to stay on
until something is arranged by late January, 2008--a tricky
contingency, given that the financial system itself is
unravelling. (mgm)

[ Next Thread | Previous Thread | Next Message | Previous Message ]

Replies:

[ Contact Forum Admin ]

Forum timezone: GMT-8
VF Version: 3.00b, ConfDB:
Before posting please read our privacy policy.
VoyForums(tm) is a Free Service from Voyager Info-Systems.
Copyright © 1998-2019 Voyager Info-Systems. All Rights Reserved.