Three-Headed Dog From Hell Becoming Number-One Subprime Mortgage Lender in U.S.A.

June 2, 2007 (LPAC)--The three-headed dog from Hell, Cerberus Capital Management, the private equity fund/hedge fund, is headed toward becoming the biggest subprime lender in the United States, if a pending deal to acquire Option One, the "troubled" mortgage subsidiary of H&R Block, comes through, reported the New York Times on June 1 in a lead story in its business section. After carving up and destroying the U.S. auto industry--first assaulting General Motors, and then, on May 14, announcing the purchase of Chrysler--Cerberus is now out to take over the distressed housing market by buying up more subprime mortgage lending companies.

The fawning New York Times says that Cerberus is the "smart money" which is "swooping in and taking over those battered businesses, seeing opportunity amid the wreckage." The "opportunity" includes making tens of thousands of jobless families in the United States also homeless, when their homes are foreclosed upon. The plan is, that Cerberus, which already acquired control of Residential Capital in 2006, when it took over GMAC, the credit arm of General Motors, and bought up Aegis Mortgage, a subprime lender from Houston, will become "the biggest subprime lender in the country." The plan to buy Option One is still pending.

Lyndon LaRouche has a plan to deal with the likes of the blood-sucking Cerberus: There must be a freeze on home foreclosures in the United States, since it is the banks which are bankrupt, not the victims of their lending policies; and hedge funds should be made illegal. Controlling the hedge funds would also curtail the "locust" practices of the private equity firms like Cerberus. One note on what exactly Cerberus is : While it formally identifies itself as a private equity fund, it plays the same role, and does the same work, as hedge funds, thus blurring the definitions.

The June 1 Times article provides a useful chart on who is buying the bankrupt subprime lending companies. The "smart money" investors include Ellington Capital hedge fund, the Citadel Investment Group, Farallon Capital, Second Curve Capital hedge fund, and Citigroup.

As LPAC has reported previously, the predator fund, Cerberus, is a major funder of the Bush-Cheney faction of the Republican Party, and has also provided major financing for Al Gore, Jr.'s political operations.