December 14, 2007 (LPAC)--The global financial system may have died back in the summer, but that hasn't stopped the bankers from trying all sorts of efforts to revive it.
The big one is the coordinated effort by the major Western central banks to pump liquidity into the banking system and to take worthless paper in as collateral. Already in October, LaRouche had ridiculed U.S. Treasury Secretary Paulson's superfund bailout plan: "The whole thing stinks. It's fishy as hell," LaRouche said on Oct. 19. Now there's more:
Five French banks are launching their own version of Paulson's ill-fated bailout plan, creating a fund to hold $1.5 billion of asset-backed securities, as if putting the paper into a different pocket in any way solves the problem of it being worthless.
In England, there is growing talk of nationalizing the bankrupt Northern Rock, which is already on life support via a credit line from the Bank of England.
In the U.S., the newly installed leaders at Citigroup have decided to do what they repeatedly said they would not, and take what remains of their SIV exposure back onto their own books, and the prospect of a merger appears to be a more likely prospect each day.
Countrywide, the overexposed mega mortgage lender, is also going fast, despite cash infusions from Bank of America and Paulson's latest plan to stabilize mortgage-related securities; its foreclosure rate doubled last month, the level of late payments is soaring, and its stock price is tanking. Countrywide's lending practices are under investigation by the State of Illinois, and U.S. Senator Charles Schumer is trying to stop the Federal Home Loan Bank from subsidizing Countrywide and other bankrupt lenders.
Even in Switzerland, where the gnomes are known for their "conservative" approach to banking, top bank UBS announced a 19.4 billion Swiss franc recapitalization, on the heels of a $10 billion write-off and expectations of more.
The New York Post portrayed Countrywide CEO Angelo Mozilo as a turkey on a rotisserie, and that image also works for the system as a whole. This turkey is dead and isn't coming back to life, no matter how much cash they shove up its aperture.
