LaRouche: ‘The Fannie/Freddie Crisis Is the Collapse of the Greenspan Bubble’
Posted by smeddum on July 11, 2008
PRESS RELEASE EIR
LaRouche: ‘The Fannie/Freddie Crisis Is the Collapse of the Greenspan Bubble’
July 11, 2008–This release was issued on July 10 by the Lyndon LaRouche Political Action Committee (LPAC).
The intensifying crisis of the government-backed mortgage enterprises Fannie Mae and Freddie Mac “signals the final collapse of the Greenspan bubble,” economist and Democratic statesman Lyndon LaRouche commented today. “This is not a crisis of these two institutions,” LaRouche emphasized. “It is the concentrated collapse of the entire globalized debt bubble Greenspan created—falsely called the ‘U.S. subprime mortgage bubble’—falling onto these two institutions. And it signals that the next phase is the total explosion of entire financial system.”
Fannie’s and Freddie’s huge mortgage-bundling and mortgage- securitization operations, with their resulting highly debt-leveraged condition, do not result from Fannie Mae’s secondary mortgage function as defined by President Franklin Roosevelt’s New Deal; rather, LaRouche insisted, these are the direct result of Fed Chairman Alan Greenspan’s using these institutions in the creation of giant real estate-based debt bubbles from 1990 on. “Greenspan created this monster,” LaRouche said. “This Greenspan monster is the problem today. The Greenspan debt-bubble monster, and the EU’s Maastricht Treaty forced through by Margaret Thatcher’s British government in 1990, are the keys to the current, worsening physical-economy breakdown in both Europe and the United States. The next phase is a total explosion of all the banks, the entire financial system.”
Fannie and Freddie have been widely reported this week as “insolvent,” threatened with bankruptcy collapse, and requiring a huge government bailout in the near future, as a result of taking on huge losses in the collapse of the mortgage bubble. Their stock market values have been driven down to 15-year lows, and their costs for borrowing have been driven up to more than 2% higher than Treasury securities, which is unprecedented. The two are handling over 80% of the secondary mortgage market in United States, all the other financial institutions in it having gone bankrupt or fled the mortgage markets.
“The policies I’ve proposed have to be enacted immediately now to prevent total financial collapse,” LaRouche said, referring to his Homeowners and Bank Protection Act, proposed two-tier credit regulation of the U.S. economy, and emergency meetings among major nations to establish a New Bretton Woods, a modified return to the Bretton Woods monetary system principles put in place under FDR.
In These New Times 
Lyn Marcus said
When you read anything by convicted felon and tax evader Larouche, always understand that he runs a cult which has to recruit a few people to stay alive and needs a a lot of money to keep his life style alive.
Larouche has been writing about economic collapse, a New Dark Ages, humanity being wiped out for 4 decades as a cult leader. His angle is to take uncertainty about whatever current events there are and use that to both recruit new and naive kids . He also has to keep the long term memebrs hopping like jumping beans around the clock for 16 hour work days, 6 to 7 days a week for as long as they nevcer figure out how this all works.
This wacky cult has been at it for decades and burns through money and people at a fast clip. The cult targewts a specific layer of angry or diseffected people with target info to entice you. This yuear they are busy rasing money from Hillary supporters, a few weeks ago they sent their boiler rooms to call conspiracy buffs and interst rate watchers. It is all a cult led by a madman who knows enough to keep this charade going for years and years.
Check out sites like
lyndonlarouchewatch.org
laroucheplanet.info
justiceforjeremiah.org
kenkronberg.com
factnet.org has thousands of posts by former memebrs who show you how the cult is run. Just look under “discussion”
inthesenewtimes said
I know Lyn. I approach his material with caution, but we choose articles on their merits- I thought this one was OK.