Executive Intelligence Review
Subscribe to EIR


LaRouche: Expect an Expanded Wave of Foreclosures

Jan. 31, 2008 (EIRNS)—This release was issued today by the Lyndon LaRouche Political Action Committee (LPAC).

Lyndon LaRouche today repeated his warnings about the quickening pace of the collapse crisis. "Expect a sudden, greatly expanded wave of foreclosures. This is ready to happen internationally. The system is so rotten, there is no possibility" that it can be forestalled. Briefed on yesterday's announcement by Standard & Poor's that they will downgrade over a half-trillion dollars worth of home mortgage-based securities, and various other kinds of collateralized debt obligations, LaRouche reiterated that anything that breaks out in any one part of the world, now has an effect throughout the system. The impact of events is international. The S&P move, and other actions, portend a wave of foreclosures.

S&P announced its intention to downgrade its ratings of up to $534 billion of sub-prime bonds, including $270 billion worth of U.S. mortgage-backed securities and $264 billion of global collateralized debt obligations backed by all kinds of securitized assets. This will further downgrade the holdings of all tiers of financial institutions. Some of the entities in question include the largest U.S. regional banks, such as Atlanta-based SunTrust Banks Inc., Seattle-based Washington Mutual Inc., and Cleveland-based National City Corp.

LaRouche said that, until the end of 2007, certain measures were used to block the force of the collapse process, but this is over. "It has been pent up, blocked up, as long as they could hold it.... The rate of collapse with each thing will accelerate. The idea that we could get to the Summer political conventions before a collapse is like something out of Harry Potter." And Harry Potter is no damn good.

New rounds of chain reactions are now in effect, and every attempted bail-out, using hyperinflation, just adds to the hyperinflation.