November 16, 2007 (LPAC)--Lyndon LaRouche commented today on the implications of the Oct. 31 decision by Federal Judge Christopher A. Boyko, to dismiss 14 home foreclosure cases in Cleveland, brought by Deutsche Bank National Trust Co. LaRouche stressed that, implicitly, the Ohio case involves much more than the judge's interpretation. The question posed is whether banks have been duplicating the use of assets. Any suspicion and doubt about this is enough in itself, to bring the system down. The Cleveland case in brief: The plaintiff, the Deutsche Bank Trust, was denied its demand to foreclose on the cited homeowners, because the judge ruled that there was no proper recording with local government offices of the property titles, mortgage contracts and assignments of Deutsche Bank's claimed ownership, in writing, per requirements of the pertinent law. In fact, non-recording is now common, when a homeowner's loan goes into securitazation for further sale on the asset markets, according to financial media commentary on Boyko's ruling. As the Nov. 14 New York Times article phrased it, the process is "fast and cheap," by not bothering with written, physical documentation at all points in the chain.

LaRouche said of the Cleveland case, that in fact, if banks are listing mortgages as collectible assets, with no record in the local registry, the suspicion is created, if not proven, that they could be using the same asset over and over again. The amount of charges against the assets can be far greater than the asset. This "smells of a major problem."

Anyone looking at this can see the way for duplication of use of assets, and for liabilities to vastly exceed assets. It is the nature of the market that no one knows what is pledged on an asset. No one knows what is leveraged onto a price-earnings ratio.

This means that when you are dealing with this situation, you are dealing with a "breakdown crisis, and not with a management crisis." This cannot be "managed."

There is legitimate suspicion that loans have been sold as part of a securitized package, several times over. They are put in a pool, and leveraged. The same nominal asset can be hawked several times over.

When this suspicion comes up in a Federal case, arising in a major city of the United States, it is a legitimate suspicion. "Was this asset used several times over?" Even without proof that this happened in any of these cases, even just the smell of this condition could blow the system out. "These people have been caught with their pants down, when they weren't sitting on the toilet!"

What is involved is someone borrowing the use of indebtedness. It is as if there is an uttering of a check, and signing it, but not allowing it to circulate. The check is just used to create an artificial inflationary process. That's the situation with these kinds of practices. We can conclude that by the very character of the system now, the system is collapsing. What lies ahead is that, "The worst is to come, not 'Things to Come.'"