August 10, 2007 (LPAC)--The Securities and Exchange Commission (SEC) is examining the books of major Wall Street investment banks, looking for hidden losses on subprime mortgages, the Wall Street Journal reported today. The SEC is looking at how the major banks calculate the value of subprime mortgages and collateralized-debt obligations (CDOs); questions have been raised as to whether these firms, and also hedge funds, have yet-reported losses on mortgage-backed securities or CDO's. 

Lyndon LaRouche suggested that when the central banks decided not to go for bailout early in the week, they didn't know the full extent of the losses taken by these banks and funds; but when banks started dumping their liabilities, they exposed huge liabilities which hadn't been reported.