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Date Posted: 10:59:51 11/09/07 Fri
Author: part 1
Subject: November 8, 2007

ICLC BRIEFING INTERNATIONAL VERSION

[A7-45-4/BFG001]:BFG:L: [07/11/07][06: ]AM BRIEFING
STAND:[1.1.26/ ][1.1.00/ ][0.1.00/ ] [23:1 ]US POLIT INTELL
SUBJT:[5.1.13/ ][5.3.13/ ][ . . / ] [24: ]STR STUDIES
TOPIC:[060.000 :AM BRIEFING ]
SUB-T:[061.000 :AM BRIEFING, ENGLISH ]
TITLE:[BRIEFING FOR NOVEMBER 8 2007 ] 1 of Pages
SYNOPSIS:
TO:ALL POINTS BY: NBS/PBG/ssu
RE:HOYER. LAROUCHE. PELOSI. IMPEACHMENT.
2 TURNING POINT.
+---------------------------------------------------------------+
| |
| |
| MORNING BRIEFING |
| |
| Thursday, November 8, 2007 |
| |
| |
+---------------------------------------------------------------+

THE DOLLAR SYSTEM HAS ALREADY CRASHED --
WILL YOU NOW ACT TO SAVE THE NATION?

After a review of developments in the financial markets Nov. 7
(see reports below), the world's leading economist, Lyndon
LaRouche, made the following emphatic points:

1. {The U.S. dollar and financial system has already
exploded.} There should be no talk about how the crisis of the
system is "coming"--it's already here. The crash of the dollar
system will cause an explosion of the entire international
financial system. Even the fawning French President Nicholas
Sarkozy, addressing Congress yesterday, warned Washington it's
threatening the entire world economy by allowing the dollar to
fall apart.
Already, pieces of the exploded planet are flying around
like asteroids--but only a fool would say that the asteroids are
"going to cause" the explosion! The planet has exploded! There is
not to go out, from us, anything to the effect of "a trend toward
a coming crisis." The catastrophe is now.
What will LaRouche's critics do now? They all were wrong, in
denying this collapse, and now they've got to respond to it. What
will they do? "The system is collapsing around your heads right
now. This is {worse} than 1929, you idiots! This collapse will
bring a new dark age!"
We're out to bust their balls; don't be polite about this,
to anyone we're briefing and organizing.
(Note: A version of the above statement, edited and reviewed
by Lyn, will be turned into a mass leaflet--in place of the
proposed Pelosi leaflet.)

2. {The Cheney/Bush government is totally discredited, and
some combination of other forces will have to pick up the
pieces.} In reality, the current administration is a fallen
regime. Both the financial system and the government can only be
revived by a new political combination. Somebody has to
re-establish control over the dollar, and over the functioning of
government. That combination had better start the process by
implementing the {firewall} policy put forward in LaRouche's
Homeowners and Bank Protection Act (HBPA).

3. {The problem is that people in positions of power did not
listen to LaRouche's warnings that this collapse was inevitable
under their current policies.} LaRouche warned Secretary of
Treasury Paulson, when he came into office; he warned the
Democratic leaders of the House and Senate repeatedly. He told
them that they had to act to freeze the system, and erect a
firewall to protect the population and the banks, as a step
toward full bankruptcy reorganization of the bankrupt financial
system.

Let's be blunt: {No one}, neither we or the current
leadership, is going to save the financial system. It {cannot} be
saved. We are going to save the nation, and save the economy; but
only a {new financial system} can carry out the rescue. And the
first simple step had better be to carry out LaRouche's indicated
"firewall" legislation now.

Everyone has to be told: Every other option has been
discredited. Now is the time to ram through the only solution,
the HBPA!
- * * * -

In the midst of the full-blown systemic crisis, the
disposition of the Kucinich impeachment resolution on Nov. 6
represents a turn in the situation, directly attributable to
Lyn's and our efforts, including the deliberately "offensive"
website animation on Nancy's "mask." We have given Nancy
Pelosi a critical setback she may not survive. LaRouche's
rejoinder to Steny Hoyer, reproduced immediately below, provides
precise guidance as to how to deal with this situation.

Note: Special attention should be paid to the Cheminade
statement on Sarkozy, included in this briefing. This is just
the way to deal with him, Lyn said.

- NEWS SUMMARIES -

- LaRouche -

LAROUCHE TO STENY HOYER: You're missing the point (see
slug).

LPAC TATTOOS FASCIST AHLEMANN in Virginia voting (see slug).

POMONA, CA BECOMES THIRD CITY to call for Homeowners and
Bank Protection Act. "If Pomona can do it, anyone can," says
LaRouche (see slug).

NEW JERSEY HBPA ENDORSER GORDON JOHNSON easily wins
re-election, despite Bergen Record slander barrage against
LaRouche. (See slug)

- Economics -

AS DOLLAR PLUMMETS, China hints at dumping more U.S.
Treasury holdings (see slug).

ACCELERATING CRASH IS ON, COMPLETE LOSS OF CONTROL BY
CENTRAL BANKS (see slug).

BOND INSURERS FACE WIPE-OUT, threatening deeper crisis (see
slug).

`FIRE SALE OF ASSETS' is next phase in banking crash (see
slug).

KOREAN FINANCIAL WATCHDOG Chairman warns of global bust (see
slug).

HIGH-END HOUSING COLLAPSE GROWS: Luxury homebuilder suspends
sales at two major projects in Southern California (see slug).

TOP CALIFORNIA ECONOMIST DEMONSTRATES THE PROBLEM. (See
slug)

- Science & Technology -

CHINA PLANS TO ORBIT its first space station by 2020. (see
slug)

WESTINGHOUSE-TOSHIBA BUYS SOUTH AFRICA'S PROVIDER of Pebble
Bed Modular Reactor. (see slug)

ANOTHER NON-PROLIFERATION ORGANIZATION to beat up other
countries is in the making (see slug)

- United States -

KUCINICH MAKES CASE FOR IMPEACHMENT in feisty television
appearances (see slug).

DOWNFALL OF CHENEY--AND PELOSI--NOT `OFF THE TABLE' NOW (see
slug).

ESCALATION ON CONYERS HEALTH CARE BILL: Coalition ups
pressure on Presidential candidates to adopt universal healthcare
plan (see slug).

HOW HEDGE FUND MONEY bought up Rohatyn and Pelosi's
Democratic leaders (see slug).

BUSH TOPS NIXON IN UNPOPULARITY. Latest Gallup poll shows
50% of Americans "strongly disapprove" of Bush. Nixon was at 48%
in February 1974, before resigning, according to {Raw Story.}

AT&T TECHNICIAN SAYS NSA was "sweeping up everything," and
should not get immunity from lawsuits. (See slug)

TORTURE LAWSUIT against private military contractor to
continue. A federal judge yesterday refused to dismiss a lawsuit
against CACI brought on behalf of more than 200 Iraqis charging
torture and abuse at Abu Ghraib prison (see 4/14/06 and 4/21/06
EIR). The suit could set a precedent for dealing with other
contractors such as Blackwater, legal experts say. [ews]

- Ibero-America -

MEXICAN YOUTH RESPOND TO TABASCO CRISIS. See ops report and
leaflet which follows.

- West Europe -

CHEMINADE NAILS SARKOZY on U.S. trip, demanding he oppose
the practice of waterboarding, used by the Nazis against the
Resistance (see slug).

STRIKE WAVE SWEEPS FRANCE, as Sarkozy dines at White House
(see slug).

LONDON UNDERGROUND RETURNS TO PUBLIC CONTROL, after
`disastrous" privatization (see slug).

- East Europe -

RUSSIAN PARLIAMENT UPHOLDS PUTIN'S moratorium on CFE Treaty
(see slug).

- Southwest Asia -

GRAND AYATOLLAH CALLS FOR IRAN-U.S. TALKS to avoid war. (see
slug).

OLMERT SAYS SYRIA SHOULD ATTEND Annapolis Peace Conference
(see slug).

LEADING DEVELOPMENTS

DOLLAR CRASH WENT COMPLETELY OUT OF CONTROL

Nov. 7, 2007 (LPAC)--With Bank of England Governor Mervyn King
telling the {Financial Times} that the world's central bankers
are now holding conference calls with each other every day on the
credit collapse, it was obvious today that they had lost all
semblance of control of the hyperinflationary dollar crash
underway.
* The price of gold in dollars leaped to $845;
* The price of oil in dollars passed $98, headed for $100
and quickly beyond, in all estimations;
* The dollar fell to nearly $2.11 to the British pound; to a
60-year low against the Canadian dollar; to below $1.47 to the
euro; nearly to 113 yen/dollar; all of these are accelerating
plunges;
* Wall Street financial interests were demanding that Fed
Chairman Ben Bernanke promise another interest rate cut, in
Congressional testimony tomorrow--an hysterical demand given the
hyperinflation already set off by central bank money-printing to
save the banks;
* The New York Stock Exchange Dow-Jones index fell 360
points, and other indices by comparable degrees, as all financial
and insurance stocks were plunging, some by 10-15%;
* Morgan Stanley, which had just reported a billion-dollar
loss in leveraged buyouts which failed, discovered $3.7 billion
in new losses in mortgage securities, joining virtually all big
banks in the tank;
* Moody's Investors Service started cutting rates on $33
billion of debt of the big banks' structured investment vehicles
(SIVs), hitting 16 SIVs of Citigroup, British HSBC, and Germany's
WestLB. [pbg]

LAROUCHE TO HOYER: YOU'RE MISSING THE POINT

Nov. 7, 2007 (LPAC)--In response to a statement from the office
of House Majority Leader Steny Hoyer (D-MD), which, in the wake
of the commitment of Rep. Dennis Kucinich's resolution for the
impeachment of Vice President Dick Cheney to the House Judiciary
Committee, repeated the mantra of Speaker Nancy Pelosi that
"impeachment is off the table," Lyndon LaRouche issued the
following statement:
"Respectfully, your office's message misses the crucial
points.
"1.) The ouster of Vice-President Cheney is an existential
issue of the immediately highest importance for the continued
existence of our republic. Failure to oust Cheney now would
represent the gravest clear and present danger to the continued
existence of our present constitutional republic.

"2.) The only legislative issue of comparable importance
for our republic is the immediate enactment of my proposed fire-
wall legislation, HBPA, without which a social crisis, combined
with a chain-reaction disintegration of our banking system were
virtually inevitable for the short period immediately ahead.

"3.) The Speaker may have a contrary agenda, but that
agenda is not presently in the existential interest of our
republic. Political egos can not be given priority over the
interests of the existential interests of our republic and its
people."

LPAC MOBILIZATION `TATTOOS' AHLEMANN IN VIRGINIA'S `GROUND
ZERO' OF THE HOUSING BUBBLE

Nov. 7, 2007 (LPAC)--Loudoun County, Virginia Sheriff Steve
Simpson won re-election in a contest shaped by the LaRouche
Political Action Committee (LPAC)'s mobilization against his
Republican opponent, Greg Ahlemann. LPAC's beefed-up campaign
squads in Loudoun, called "national `Ground Zero' of the real
estate bubble" by LaRouche, got a warm popular reception for
LaRouche's Homeowners and Bank Protection Act of 2007. But with a
special mass leaflet, they also skewered Ahlemann's
anti-immigrant crusade as a fascist front.
Sheriff Simpson ran as an independent, defeating both his
Democratic challenger and Ahlemann, despite the Democrats winning
most local races, in the voters' rejection of GOP race-baiting
and immigrant-bashing.
The hyperinflationary housing `boom' of the last six years,
especially intense in Loudoun County and areas of Virginia and
Maryland near Washington, D.C., helped draw large numbers of
Hispanic immigrants to the region. Now that that bubble is
collapsing fast, some Republican factions are trying to whip up
voters against immigrants as the cause of economic problems, a
hoary fascist-populist tactic in economic collapse periods.
LPAC leaflets circulated widely in the county's neighorhoods
and churches. Close observers of the sheriff's race said the
LaRouche intervention had created a strong dynamic against the
attempts to generate anti-immigrant hysteria. This made the
difference overall and, unexpectedly, in Eastern Loudoun
precincts targeted by the fascists, where Simpson had little
resources or campaign activity.
After Ahlemann's October 15 press conference showing off his
Armageddon tattoo (Israeli and pre-American Revolution colonial
flags linked by a cross), {EIR} exposed his campaign as "part of
an international theocratic, fascist underground, connecting the
Blackwater corporate leadership to armageddonist Protestant and
Catholic operatives." [ahc]

POMONA, CALIFORNIA IS THIRD CITY TO CALL FOR HOMEOWNERS AND BANK
PROTECTION ACT

Nov. 7, 2007 (LPAC)--On Nov. 5, the City Council of Pomona,
California became the third legislative body in the nation (after
Pontiac, Michigan and Jackson, Mississippi) to pass a resolution
supporting Lyndon LaRouche's Homeowners and Bank Protection Act
(HBPA). The vote was a unanimous 6-0.
The text of the resolution follows below, and waits only to
be signed by the mayor, who has supported the resolution, before
being sent, with copies of the LaRouche HBPA leaflet attached, to
U.S. Congresswoman Janet Napolitano, and the State
Representatives and Senators representing Pomona.
The organizing process which led to this victory began in
early September, with an email by Lyndon LaRouche Political
Action Committee (LPAC), which was already mass-leafletting the
HBPA solution in southern California, to the larger cities in Los
Angeles County (Pomona is the sixth-largest).

- RESOLUTION -

A Resolution of the City Council of the City of Pomona Calling
upon State and Federal Officials to Develop and Implement
Policies to Protect Homeowners Impacted by the Current
Difficulties in the Sub-Prime Mortgage Industry

WHEREAS, the City of Pomona values and encourages home ownership
and recognizes the stability and investment that it brings to
neighborhoods; and

WHEREAS, the current difficulties in the sub-prime mortgage
industry have created challenges for our regional residential
real estate market and international financial markets; and

WHEREAS, these financial difficulties in the residential real
estate market could result in significant numbers of foreclosures
throughout Southern California, including Pomona; and

WHEREAS, foreclosures can have a very negative impact on the
quality of life in our neighborhoods by creating vacant
properties and family dislocations; and

WHEREAS, elected and appointed officials at the State and Federal
levels are currently discussing a number of policy options to
respond to the crisis in the sub-proime mortgage industry and to
minimize the impact on homeowners;

NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of
Pomona as follows:

SECTION 1: That the City Council of the City of Pomona calls upon
elected and appointed officials at the State and Federal levels
to develop and implement policies that will promote homeownership
and protect the stability of local communities by providing
alternatives to foreclosure for at-risk homeowners; and

SECTION 2: That these policies should be focused on the
objectives of minimizing the number of foreclosures, providing
financing options for at-risk homeowners, expanding access to
mortgage capital for first-time homebuyers, and requiring greater
accountability and disclosure by lenders; and

SECTION 3: That included among the policy options to be given
serious consideration by State and Federal elected and appointed
officials should be the Homeowners and Bank Protection Act of
2007; and

SECTION 4: That a suitable copy of this resolution by presented
to the State and Federal officials representing the City of
Pomona.

SECTION 5: The City Clerk shall certify to the approval and
adoption of this resolution and it shall become effective
immediately upon its approval.

APPROVED AND ADOPTED THIS 5th DAY OF NOVEMBER 2007

TO NICOLAS SARKOZY, ON THE QUESTION OF TORTURE

Nov. 7, 2007 (LPAC)--This statement was issued in Paris on Nov.
7, 2007 by Jacques Cheminade, President of Solidarité et Progrès.

Nicolas Sarkozy is currently in the United States. Yet it
appears, from the exchanges between different American Senators
and Michael Mukasey, George W. Bush's new nominee for Attorney
General, that "waterboarding" has been practiced and is still
being practiced by that country.
The frontrunner for the Republican Party presidential
campaign in November 2008, Rudolph Giuliani, rushing to support
the Bush administration, indicated that he is favorable to
"agressive interrogations" for terror suspects "with the help of
tougher methods." Also, it is known now that airplanes,
contracted or belonging to the CIA, transported prisoners with
the support of the United States authorities, towards third
countries in order to carry out more aggressive interrogations.

Whereas, the American term "enhanced interrogations"
corresponds exactly to "verschaerfte Vernehmung" used by the
Gestapo to describe that type of practices;
Whereas, "waterboarding" has been practiced against the
French resistance during the Nazi occupation;
Whereas defining torture only as that which leaves durable
scars or leads to death, excluding all other violations of human
dignity (strangulation, hypothermia, unbearable noises and
lights, sleep deprivation) is absolutely unacceptable to the
State of Law and contrary to the principles of the American and
the French constitutions themselves.
Whereas Nicolas Sarkozy, when he was minister of the
Republic, declared himself shocked at statements made by Islamic
intellectual, Tariq Ramadan, during a TV show called "100
minutes", on the question of stoning of women--even though
Ramadan was envisaging then a moratorium of this infamous
practice in certain Muslim countries--and that then Minister
Sarkozy was indignant that his interlocutor did not condemn this
practice fully and totally;
Whereas, Mr Sarkozy claims to be the friend of the American
people, and the honor of the people is put into question by the
practices of its present leadership, that a majority of the
country opposes besides.

We hope that in the name of the most elementary morality, of
the rights of man and of the citizen, and of the duty to tell the
truth to one's friends, the President of the Republic will
publicly intervene, during his trip, against all forms of
torture, including waterboarding.
If he doesn't, we will have to observe that in the face of a
situation which violates that which makes man most human, our
President of the Republic practices a double language, which is
absolutely intolerable. Politically, we are convinced that France
should denounce the very source of this unacceptable policy, and
that is Vice President Richard Cheney.

ECO-FIN

DOLLAR PLUMMETTING: CHINA HINTS AT DUMPING RESERVES

Nov. 7, 2007 (LPAC)--The U.S. dollar is "losing its status as the
world currency," Xu Jian, a vice director of China's central
bank, was quoted as telling a conference Nov. 6 in Beijing. China
will further diversify some of its $1.33 trillion of
foreign-exchange reserves, the world's largest, suggested Cheng
Siwei, vice chairman of China's National People's Congress. "We
will favor stronger currencies over weaker ones, and will
readjust accordingly," he said at the same Nov. 6 conference.
For this, and reasons of disastrous U.S. financial and
economic policy, the value of the dollar has continued its drop
today against both commodities--oil and gold hitting new
long-term highs--and other currencies, falling .9% against the
Euro to $1.47, and 1.2% against the Yen, which was 113.26/dollar
as of noon Wednesday. The currency drops were the biggest since
September for the dollar.
Chinese investors have already cut their holdings of U.S.
Treasuries by 5% to $400 billion in the five months to August,
according to Bloomberg News.
The pound sterling hit $2.10 in trading in London, the
highest level since the early Thatcher era, the {Telegraph}
reported. The U.S. dollar was also down against 14 of the world's
16 biggest currencies, falling to the lowest since the 1950s
against the Canadian dollar, reaching a new record against the
euro, and its weakest in more than 20 years against the
Australian dollar. [ajt/ron]

`FULL-BLOWN FINANCIAL CRISIS' AS BOND INSURERS FACE WIPE-OUT

Nov. 7, 2007 (LPAC)--Fitch Ratings threatened to cut the AAA
ratings of the world's largest bond insurers after a review of
their $2.5 trillion exposure to the global market in
collateralized debt obligations (CDOs, parcels of repackaged debt
securities).
This could strike at the heart of the financial system,
warned Toby Nangle, a fixed-income fund manager for Baring Asset
Management, the {London Times} reported. "Banks have transferred
huge volumes of credit risk from their books to the insurers, so
that the banks' balance sheets look, superficially, in reasonable
shape," he said. "But if the monolines [bond insurers] fail,
the credit exposure that banks have hedged will revert, and the
scale of the banks' exposure runs into many tens of billions."
The biggest banks have been reporting multi-billion-dollar
losses, but the {Guardian} quotes Credit Suisse analyst, Jonathan
Pierce as saying, "Things could get worse in our view. It seems
increasingly likely that recent events could escalate into a
full-blown financial crisis." [ajt]

KOREAN FINANCIAL WATCHDOG CHAIRMAN WARNS OF GLOBAL BUST

Nov. 7, 2007 (LPAC)--"Chairman Kim Yong-duk of the Korea
Financial Supervisory Commission yesterday called on the world's
central banks and financial regulators to take measures to tackle
the ongoing global credit crisis," according to the Korea Herald.
Kim said at an international conference held by the Bank for
International Settlements in Sydney, Australia, that "governments
and central banks should make joint efforts to prevent an abrupt
bust of asset bubbles."
Kim cautioned that a sudden drop in asset prices could
severely hurt the global economy. His only solution was that
"Financial market watchdogs should ... participate in the
anticrisis campaign of the Executives' Meeting of East
Asia-Pacific Central Banks, a regional cooperative organization
of central banks and monetary authorities."
That organization, if it had any idea how to deal with the
financial crash and salvage the world's economies beyond,
reorganizing seating assignments on the Titantic, has not made
such plans known. Chairman Kim is not talking about the only
workable plan, Lyndon H. LaRouche's New Bretton Woods monetary
reform. (ron)

HIGH-END HOUSING COLLAPSE GROWS: LUXURY HOMEBUILDER SUSPENDS
SALES AT TWO MAJOR PROJECTS IN SOUTHERN CALIFORNIA

Nov. 7, 2007 (LPAC)--Miami-based homebuilder Lennar, facing
significant price reductions, has stopped taking orders at one of
its largest and highest-profile projects in southern California,
known as Central Park West in Irvine, amid mounting inventory of
unsold homes in the area. {Builder} reports that the company says
it does not want to discount the units in its first "urban
village," whose home prices range from $500,000 to $2.9 million;
and has refunded earnest money to buyers who had already
purchased homes in Central Park West. Not only has Lennar halted
construction of two neighborhoods within this village of 1,318
home units, consisting of townhouses, lofts and flats, but it has
also suspended construction on two high-rise projects in Anaheim.
[ajt]

CALIFORNIA ECONOMIST: THIS CRISIS IS SERIOUS!

Nov. 7, 2007 (EIRNS) -- In a candid, off-the-record discussion, a
leading economist in California told EIR that the coming budget
crisis in the state goes way beyond the "usual fuzzy math" that
has characterized past budget crises. "There are no reserves to
fall back on," he said. The only reserves we had came from
Schwarzenegger's borrowing in 2004, and that has been mostly
spent." He added that California will not technically become
bankrupt, if revenues keep falling, because the state "will
always pay its debt first."
But there will have to be major cuts. Asked if the 10%
figure in cuts for education, health and transport -- which has
been bandied about in the media -- is a realistic figure, he
said, "No, there is no way we can cut that much." He also ruled
out a tax hike, as not "feasible politically."
EIR then asked, what options remain for the state? Whether
you like it or not, he answered, there is a significant
discussion about going with privatization, starting with the
University of California system! He said the system gets $4
billion from the state, to cover its annual budget of $20
billion. The rest comes from tuition -- which he said will have
to be increased -- and, a growing amount from the private sector.
He added that it will not be long before private toll roads and
bridges, and other major infrastructure, will be built. "The
state can no longer afford to do anything about crowded highways,
collapsing bridges. It will be private capital that will be
brought in." When asked how he can believe that, given that
private capital markets are frozen, and the banking system is in
disarray, he said, "I'm not talking about new roads this week.
This financial crisis will soon pass, and privatization is the
way of the future."
In conclusion, he was asked to comment on what is
increasingly apparent, that the axioms of the "new,
post-industrial paradigm" don't work. Well, he said, we have
gotten by through anomalies, e.g., the tech bubble and the real
estate bubble. So far, we have made it, even though we have
exported our manufacturing and gone to a service economy. "But,"
he concluded, "you may be right. This paradigm might not work for
the long haul. Then we will have to develop a new paradigm,
because the old one you are promoting, of FDR, has gone the way
of the Dodo bird."
It is worth noting that this economist is a professor at a
major university, and is promoted as an expert on state budgets
and finances. (hcs)

`FIRE SALE OF ASSETS' NEXT PHASE IN BANKING CRASH

Nov. 7, 2007 (LPAC)--"Risk rises of asset fire sale" is the
banner headline across the front page of today's {Financial
Times}, under which lies a large graph showing the dollar
collapsing from $1.34 to the euro in October to 1.4552 today, a
drop of 9% in just less than two months. Under this graph are
three others, also for the last two months. One shows the price
of gold zooming from $740 to $820, another the price of crude oil
from $80 to $98, and a third, the collapse of the ABX BBB index
of value of U.S. mortgaged-backed securities from a high of 29
to the current 18.
The {Financial Times} reports that U.S. Treasury Secretary
Hank Paulson's brainchild, the Master Liquidity Enhancement
Conduit, is "dead in the water," following Citigroup's
revelations of huge writedowns. The credit-rating agencies have
deemed a "clutch of complex debt vehicles to have defaulted," all
of which will force the sale of "these assets, inevitably at
heavily discounted prices." On top of Citigroup's surprise Nov. 6
announcement of a new, $11 billion writedown, Morgan Stanley
could be in the hole for about $6 billion in writedowns,
according to David Trone, of Fax-Pitt Kelton.
If that's not enough, the {Financial Times} reports that
there is worry for the health of U.S. bond insurance companies,
whose high credit ratings and insurance are essential to the
issuance of bonds and other commercial paper. Playing into this
picture is the announcement that Standard and Poor's and Moody's
have received default notices for another $5 billion worth of
collateralized debt obligations (CDOs), which are causing some of
the huge losses being reported by the big banks. [dea]

BOND INSURERS IN TROUBLE, COULD TRIGGER A MUNICIPAL BOND CRISIS

Nov. 7, 2007 (LPAC)--Fitch Ratings has threatened to downgrade a
group of U.S. bond insurance companies, which may "set off a
fresh credit crisis and cause contagion across America's $2,400
billion municipal bond market," reports the London Daily
Telegraph today.
The warnings of downgradings concerned insurers CIFG
Guaranty, Financial Guaranty Insurance Company, Ambac Assurance,
and Security Capital. These are the so-called `monoliners' whose
insurance helps junk paper get triple-A ratings. These insurers
are guaranteeing debt with `leverage' of up to 150 times.
The problem is that these companies are key insurers of
municipal bonds, so if their ratings go down, so do the ratings
of the municipal bonds they insure. The Telegraph's Ambrose Evans
Pritchard quotes one municipal bond market advisor, that any
down-grading of these insurers would be a "crushing blow" to the
municipal bond market. "I have never seen a crisis of confidence
in the insurers like this before," he said.
While the bad debt damaging these insurers is mostly
subprime-backed securities, especially collateralized debt
obligations, it is enough to "poison the vast pool of muni bonds
that they insure." [dea]

SCI-TECH

CHINA SETS THE SCHEDULE FOR ITS SPACE STATION

Nov. 7, 2007 (LPAC)--Leading Chinese spacecraft designer Long
Lehao, for the first time set a timetable of 2020 for China's
launch of its own space station, or "workshop", as reported today
in China Daily.
The 20-ton module, which would be serviced by Shenzhou
manned spacecraft, would be quite small in comparison to the
half-million-ton International Space Station, which China has not
been allowed to join. But China would be only the third country,
after the Soviet Union and the U.S., to provide a facility for
the long-term presence for humans in space.
Later in the day, Xinhua reported that Li Guoping, a
spokesman for the China National Space Administration, told a
press conference that the government had not issued a specific
plan for a space station, but said that the national plan only
goes to 2010, which appears to leave the space station door open.
Over the past week, China has announced that it is
proceeding apace with its next-generation Long March 5 rocket,
which will be needed for heavy Earth-orbiting payloads, and to
land men on the Moon. The key technology needed for this
up-graded launcher, which will be able to place 25 tons into
Earth orbit, is liquid hydrogen fueled engines, which Long said
are now undergoing ignition testing.
But before the new rocket is ready, the Long March 3A, which
is in service now, will be able to launch China's next lunar
project, which will land a small rover on the Moon. Recently,
NASA Administrator Mike Griffin has remarked that even with its
current rocket tedhnology, China could send men to orbit, though
not land, on the Moon. China has also targetted the 2020
timeframe for its first manned lunar landing. [mgf]

WESTINGHOUSE-TOSHIBA BUYS SOUTH AFRICAN NUCLEAR FIRM

Nov. 7, 2007 (LPAC)--In what could turn out to be a major boost
to the Pebble Bed Modular Reactor (PBMR) -- arguably the safest
and most versatile of the nuclear reactors in operation presently
-- U.S.-based Westinghouse Electric Company, a group company of
Toshiba Corporation, has bought the South African firm IST
Nuclear. IST Nuclear is a leading provider of services and
systems for South Africa's unique Pebble Bed Modular Reactor
(PBMR) project.
Westinghouse, who opened its newly-acquired South African
operation on Nov. 5, "has long been a proponent of the PBMR, and
this acquisition will allow us to become even more involved as
PBMR moves toward commercialisation," Nick Liparulo,
Vice-President of engineering services for Westinghouse, said in
a statement. At this point in time, however, Westinghouse is in
the bidding for building 2-AP1000 pressurized water reactors in
South Africa.
IST Nuclear was instrumental in the early development of the
Pebble Bed Modular Reactor, working with South Africa's
state-owned power supplier Eskom and US-based investors including
Westinghouse. More recently, IST Nuclear supplied a helium test
facility for the PBMR. The company is also under contract to
design key systems for a PBMR demonstration unit to be built at
Koeberg, South Africa's only nuclear plant, by 2011. [RMA]

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