November 23, 2007 (LPAC)—The reader should continue to take note of all the flying pieces of the financial system. Keep in mind, everything being reported on, is the residue of a collapsed global financial system. What must be done very quickly, is for the U.S. Congress to adopt LaRouche’s economic recovery policy, otherwise civilization as a whole will be doomed for a long time coming. The leading item of the day will focus the reader on the gravity of the collapse, nevertheless, continue to follow the thread of these floating pieces.

Take what happen today in Britain as a case in point:

An examination by The Guardian of the books of the British mortgage lender Northern Rock revealed "a massive hole" in its assets as they discovered that 53 billion pounds of its mortgage portfolio is sitting in an offshore trust called "Granite Master Issuer" on the Island of Jersey. This calls into question whether Northern Rock will be able to pay back the Bank of England the 24 billion pounds it has borrowed. In addition the BoE has extended a guarantee of 14 billion to depositors. Apparently it is these 53 billion held in Granite that has been used to finance new credit.

The Guardian quotes Richard Murphy, a forensic accountant as saying, "This should be a concern for the Bank [of England] and Treasury particularly if the emergency loans have actually been used to finance the activities of Granite rather than Northern Rock. It would be harder for the government to secure preferential treatment over other creditors if it is shown that the money was actually for Granite's benefit."

Meanwhile a report from the Bank of England and the Treasury asserts that if Northern Rock defaults on its 24 billion in BoE loans it could "drive a coach and horses" through the public financing through the budget into a huge deficit. In another sign of the collapsing British housing market, Kensington Mortgages, which has specialized in sub-prime mortgages, announced that as of today it will not offer sub-primes. Kensington is owned by the South African Investec bank.

Keep the thread in mind from the last news slug on: 'How Companies that “Insure” Bonds Are Going Under.'