August 4, 2007 (LPAC)--In his July 25 international webcast, Lyndon LaRouche explained the lawfulness of the current speculative blowout in terms of the "bookends," or boundary conditions at either end. One end is that of the original credit issuance; at the opposite end, after the original credits are leveraged tens of times over, they are reloaned by banks for new speculative bubbles, such as leveraged buyouts (LBOs) and initial public offerings (IPOs).

The credit-issuing end in recent years has depended on the yen carry-trade, the borrowing of Japanese yen at super-low interest rates,--and on the home-mortgage swindle. But now, the yen carry-trade has choked up, and the home-mortgage bubble has burst. The money is no longer there for the banks to lend at the opposite "bookend." As the result, a gigantic world speculative bubble, which must either expand exponentially or collapse, is now imploding in on itself.

LPAC has reported how LBOs are now being cancelled faster than they can be announced. Of the estimated $500-600 billion which banks have already committed to future LBO deals, most of it will never actually be available. Kohlberg Kravis and Roberts (KKR) had to cancel its LBO of British retail chain Alliance Boots. The banks which were the intermediaries of Cerberus' takeover of Chrysler Corporation have had to take 95 cents on the dollar, rather than get stuck for the whole $2 billion.

Now the IPO (initial public offering, speculative stock floatation) bubble has also burst, and for the same reason. After getting killed with mortgage-backed securities and all the rest, the intermediary banks no longer have the money. Already this year, $37.9 billion in IPOs have been withdrawn or postponed in Wall Street alone. There are 230 IPOs in the pipeline so far for this year.

Among the companies delaying or cancelling IPOs, is KKR, which has yet to announce a date for its $1.25 billion IPO offering. Other recent postponements and cancellations include:

* Cunico resources, which has mines in Eastern Europe and Zambia. They were planning to sell $600 million in shares on the London Stock Exchange, but put it off, according to Reuters (July 3)

* SAF-Holland truck part supplier of Germany, with a $200 million offering in London.

* Third Point hedge fund of the U.S. with a $690 offering in London.

* Diamond Circle Capital with a $400 million offering in London.

* Quark Pharmaceuticals of the U.S. cancelled its Nasdaq offering.