Global Economic News
Inter-Alpha Group Targets China
Dec. 6 (EIRNS)Journalist and spook Ambrose Evans-Pritchard warned of a new real estate credit bubble that is about to blow, in a column posted on the Daily Telegraph website on Dec. 5. He wasn't talking about Europe or the United States, but about China! Under the headline "China's Credit Bubble On Borrowed Time as Inflation Bites," Evans-Pritchard cited two banks that are members of the Inter-Alpha Group, Royal Bank of Scotland and Société Générale, as his sources about an imminent collapse of the Chinese real estate bubbles in Shenzen, Shanghai, Beijing, and Nanjing. Citing recent reports issued to clients by the two banks, advising customers to take short positions on credit default swaps on Chinese five-year bonds, Pritchard made the insane claim that China could soon come unglued unless the government is able to "puncture the credit bubble before inflation reaches levels that threaten social stability." He quoted Société Générale analyst Albert Edwards: "I remain convinced we are witnessing a bubble of epic proportions which will burstcatching investors as unawares as the bursting of the Asia bubbles of the mid-1990s."
Lyndon LaRouche commented today that this is nothing less than Inter-Alpha Group's assault against China, something that has been going on for some time. LaRouche compared Inter-Alpha with Samson, tearing down the walls of the Philistines' temple to bring everything down with him.
The Fed and the Caymans: New 'Jaw-Dropping' Bailout Details
Dec. 8 (EIRNS)The Federal Reserve was forced to release the details of its bank bailouts since mid-2008, showing that the Troubled Asset Relief Program (TARP) was just pocket change, and that the bailout was in the many, many trillionsperhaps in the range of $16 trillion. Much of it went to foreign financial firms, and/or was loaned by the Fed against worthless collateral, in violation of the Federal Reserve Act. The disclosure was forced by analyses from the staff of Sen. Bernie Sanders (I-Vt.), pursuant to a budget amendment submitted by the Senator.
Three aspects of these reports are most shocking. First, foreign banks and financial corporations tapped 4,200 different loans/securities purchases under 13 different bailout programs of the Fed for $3.8 trillion total: the credit/financial arms of Toyota, Mitsubishi, Nissan, BMW, VW, Honda; the central banks of Mexico and Korea, and the Arab Banking Corporation in Bahrain; the British Empire's Inter-Alpha Group banks Société Générale, Banco Santander, Royal Bank of Scotland, and Banco Popular; and other European megabanks ING, Dexia, HSBC. In one Fed program, the Commercial Paper Funding Facility (CPFF), foreign financial firms got 68% of the $396 billion in bailout loans.
Second, under one of those programs, the Term Asset-Backed Securities Lending Program (TALF), the Fed loaned at least $60.8 billion to more than 100 hedge funds, private equity funds, and other funds located in the Caymans or other British offshore havens.
These hedge funds are, right now, conducting intense speculation on the bonds of various European nations, in particular Spain, Portugal, Ireland, Belgium, and now Germany; and they are publicly attacking the European Central Bank for failing to throw in enough of its own money, to make sure they make superprofits. Is the Federal Reserve currently lending to those funds? Or, through the IMF, to those government?
Third, much of the information which the Sanders amendment required on what collateral the Fed was taking for its many trillions in bailout loans, is missing from Fed's disclosure. But what Sanders' staff estimates so far, is that 36% of the collateral pledged to the Fed's "primary dealer" (overnight) credit facility was merely stocknot allowed under the Federal Reserve Actor bonds ranked below investment grade. Another 17% of the collateral was unrated credit or loans.
The biggest mass of low-grade/illegal collateral was pledged immediately after the September 2008 Lehman Brothers collapse, by Morgan Stanley and Merrill Lynch, which were clearly going to collapse themselves, without the Fed bailouts.