LaRouche Proposes Homeowners and Bank Protection Act in Foreclosure Crisis

Hmm. How about removing FDIC insurance from all the banks and just letting the chips fall where they will.

I've already subsidized all those people who choose to live along the Gulf coast with increased insurance premiums. Let the people who purchased homes beyond their means move down market a bit. Let the banks that underwrote bad loans go out of business.

Lyndon LaRouche is a loon of the first degree. I've been aware of him and his inane cackling since he first ran for President (or one of his first, (now) constant runnings for that office.

I think he was one of the first MKUltra/LSD overdose experiments.

"I think" ... don't think, you make yourself look incredibly stupid.

Something has to be done, and i'm liking Kucinich more and more.



PRESS RELEASE
Kucinich Points to Roosevelt Recovery Precedents

Aug. 20, 2007 (EIRNS)—In a discussion with the editorial board of the Boston Globe on Aug. 17, Democratic Presidential pre-candidate Dennis Kucinich promised to create a new version of Franklin Roosevelt's Works Progress Administration (WPA), putting Americans to work building infrastructure. Kucinich put the idea forward as a serious response to the financial and economic collapse-crisis now coming on.

In Dover, Maine, Kucinich said, "There are trillions of infrastructure needs," according to Seacoastonline.com. "By rebuilding schools, roads and bridges, for starters, Americans will have ample job opportunities at good wages."


California Consumer Groups Demand Foreclosure Moratorium


August 22, 2007 (LPAC)--Challenging the inadequate response of the California legislature to the exploding housing crisis, a coalition of consumer groups held a press conference and testified in Sacramento on Aug. 21, demanding immediate action to halt foreclosures and keep borrowers in their homes.

Some of the legislative action they call for comports with LaRouche's newly issued emergency "Homeowners and Bank Protection Act of 2007," however their action package lacks the Federal component needed to support a national rescue effort.

Coalition groups included California ACORN, California Reinvestment Coalition (CRC), the Center for Responsible Lending (CRL), Consumer Federation of California (CFC) and Consumers Union.

Dorothy Hicks said, "Two years ago, I had an affordable mortgage and owed only $9,000 on my home. After two refinances and [undisclosed] details, I have no business and may soon have no home." Indeed, data out on Aug. 21 showed California's foreclosure filings tripled in July from a year ago.

"California is projected to see nearly half a million foreclosures among subprime loans originated between 1998-2006," the CFC press release notes. "Yet, [the state] has taken no action" to deal with the subprime mortgage collapse and irresponsible lending practices."

"With record levels of foreclosures and more coming, California's homeowners, housing markets, and economic growth are all at risk," CRL director Paul Leonard said at the press conference. He called on legislators to lead efforts to "reduce foreclosures," aid borrowers and "reduce risks for new subprime loans."


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Lehman Brothers Closes Mortgage Unit as Layoffs Hit Mortgage Offices

August 22, 2007 (LPAC)--Lehman Brothers plans to shut down its subprime mortgage origination business, BNC Mortgage, slicing 1,200 jobs. At the same time, Accredited Home Lenders and HSBC announced a combined loss of more than 2,000 American jobs as the collapse in the U.S. mortgage bubble started hitting a huge employment sector.

The San Diego-based Accredited Home Lenders Holding Co., announced today that it will shut more than half of its mortgage operations and fire about 1,600 people. It expects to close its 60 retail branches and five support centers within two weeks, and has halted all wholesale mortgage applications from brokers. The cuts will shrink Accredited's workforce to from 2,600 to 1,000.

Capital One Financial, the McLean-based financial services company, said it was closing a mortgage banking subsidiary and eliminating 1,900 jobs, joining a parade of firms that took steps yesterday to adjust to the widening credit crunch.

The U.S. mortgage unit of HSBC Holdings announced yesterday that it will close its office in Carmel, Indiana, and lay off about 600 workers. The firm suffered several billion dollars in losses from U.S. real estate and mortgage operations during the first half of 2007.

San Diego-based Accredited had struck a deal in June to be acquired by the private equity firm Lone Star, but as financial markets froze up, the $400 million deal fell apart, Bloomberg reports.


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ECB Must Act Like Roosevelt, Not 'Like a Frightened Child'

August 22, 2007 (LPAC)--University of Maryland economics professor Peter Morici, in a column published today ("Hedge Fund Con Men at the Heart of Credit Crisis") makes this trenchant comparison between the actions of the central banks in the credit crisis, and those of U.S. President Franklin Roosevelt:

"It's a modern-day run on the bank, where the banks become the depositors, and the hedge funds and equity funds are the banks. Unfortunately, the ECB [European Central Bank] behaved as if it were Franklin Roosevelt, and is in out of its depth."

Roosevelt did more than just provide liquidity; he closed the banks in 1933 so that depositors could not withdraw their savings, and stopped the banks from foreclosing on farm and home loans until sanity resumed." FDR, at that time, faced a foreclosures crisis just like that now sweeping the United States. Physical Economist, Lyndon LaRouche has address the remedy to this very same crises, today, in his Homeowners and Bank Protection Act.


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European Central Bank Keeps Pumping, as Germany Goes Critical


August 22, 2007 (LPAC) -- Once again, the European Central Bank offered a special credit window of 46 billion euros ($62 billion) of extra overnight money yesterday. This comes on top of its "routine" tender of 229 billion euros for the coming week, which is considerably higher than the previous 192 billion Euro "standard."

Alexander Stuhlmann, chief executive of Germany's WestLB bank, said the problems in the U.S. housing market were making it difficult for German banks to get credit lines from their foreign partners, according to Business Daily. He told reporters that German banks were in a "not uncritical situation."

Market insiders are reported to point out that the number of Euro-zone banks with acute re-financing problems in their mortgage and commercial paper operations is growing. The leveraged credit market, which had re-funded the bubble, has dried out, and private banks in the euro-zone have only the European Central Bank to turn to for extra bridging loans from one day to the other.

A substantial share of 280 billion euros in commercial papers cannot be rolled over now, the Frankfurter Allgemeine noted today.


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"Shocking" Treasury Rate Volatility Shows Crisis Continuing



August 22, 2007 (LPAC)--A move by the New York Federal Reserve Bank on Aug. 21 to try to revive the seized-up markets which deal in short-term commercial loans, triggered a near-freeze of the market for 30-day U.S. Treasury bills themselves on Aug. 22, showing that the international credit-market crisis is now whipsawing even the rates on U.S. sovereign debt.

After the Treasury nearly failed to sell the $32 billion in 30-day bills it was auctioning, the interest rate on these bills zoomed up to 4.75%, more than two percent higher than 30-day bills already in circulation. Only the day before, Aug. 21, rates on the same bills had {fallen} by a full percent in one day, an unprecedented volatility in the market for U.S. Treasuries. "The auction was quite shocking. I've never seen that happen in the bill market before," the Wall Street Journal quoted Dresdner Kleinwort bank's chief of Treasury trading. Other analysts called the trading "extreme and abnormal."

These short-term Treasury bills are normally used as collateral for banks and funds investing in 30-day asset-backed commercial loans to private companies, but this whole $3 trillion market has broken down in the past two weeks, and the same banks and funds have been massively buying the Treasury bills themselves, instead. Interest rates on this short-term commercial paper had gone up from below 5%, to 6% in less than a week. The New York Fed was trying to force liquidity into that stricken market, and got a massive backlash against the Treasury bills, showing the super-volatility of financial markets on the edge of panic.

[link to www.larouchepac.com]

No disrespect, but that sounds rather ruinous.

The deal is protection of the banks, but under government control. The FED is not under Government control as we speak and letting the banks go under is a recipe for disaster.

Regulate them.

"Let the banks that underwrote bad loans go out of business."

That's would be all of them wouldn't it?

Society would cease to function over time, and just how is it that yourself would escape the multitude of problems arising from this?

When the shit well and truly hit's the fan, watch even the worst of the politicians learn how to put toothpaste back in the tube.

I'm not sure I follow you. Banks are regulated by the Fed, and to a far lesser degree by the Office of the Controller of the Currency. So long as the Fed exists it is not likely it will relinquish its role as regulator. Are you suggesting that the Fed be abolished?

Thousands of community-based banks will rise up to fill the void created by banks that go under.

Society would not "cease to function." It would change.

The question is where do we want to be 20, 30, 40 years from now? Not, what will make you comfortable tomorrow?

Very excellent points. However:

Yes, society would not cease to function, and it
would indeed change -- but in that word "change"
you're glossing over an awful lot of misery. Do you
think we should stand idly by while scads of people
die (especially vulnerable people -- elderly, kids,
the sick, etc.) for lack of basics in the increasingly-
likely event of a serious meltdown?

The deal is: it is necessary to have an activist
government to limit the carnage, but at the same time
(and this is very tough indeed) a government that is
seeking to eventually (the 20, 30, 40 years of which
you wisely speak) make itself unnecessary, and
that is serious about decentralization as quickly
as circumstances allow. The problem is that current
or foreseeable circumstances -- i.e. collapse, with
all the human horrors that that would entail -- will
NOT allow truly rapid general decentralization, until
the crisis is quelled. I realize that what I am calling
for is an extremely difficult trick. Nevertheless that
is what is needed.

I suggest Kucinich/Paul as The Ticket which contains
elements of BOTH of these essentials:
[link to www.godlikeproductions.com]

I think this question merits an answer...

It is also worth mentioning that a "serious meltdown"
already exists -- or comes close to existing -- for 10s
of millions of poor people, and increasingly for the
middle class, as wealth disparity increases and as society
increasingly resembles a large-scale feudalism (the rich,
and the poor, with little in between). Of course, this
disparity will only grow worse -- much worse -- in the
coming years, as the crisis deepens. What is President
Paul going to do about it? Shrug it off, chanting stale
libertarian bromides like "just let the free market..."
blah blah blah. Sorry, not adequate.

PS: I SUPPORT RON PAUL.