August 27, 2007 (LPAC)--A Frankfurt banker who asked that his name not be used, warned that the British housing bubble is still more speculative than the now-exploded American bubble. Furnished apartments in the City of London are being purchased for 460,000 pounds,-- almost a million dollars. Naive investors expect a 30-40 % return per year, on top of ever-rising prices,-- many will fall flat on their noses.

Why did Sachsen LB and the other banks continue to work with Barclays even after its first big CDO hoax was exposed in 2001? The source said that this could only be explained by greedy delusions of easy money through mortgage loans, plus extra big money on top of that,-- which has all failed completely, as one can see now.

The German financial regulator BAFIN cannot be blamed for the lack of control at state-owned West LB and Sachsen LB. It is the politicians who remained inactive and ignored BAFIN's warnings who must be blamed.

Highly-leveraged loans will produce more casualties during September, he said, especially because many investors have apparently learned nothing from the crisis, but are deluded into thinking that the situation has been "stabilized."