PRESS RELEASE
IKB Bank Stock Collapse Continues;
LaRouche Comments
That U.S. Press Will Cover It Up
July 30, 2007 (EIRNS)—The Lyndon LaRouche Political Action Committee (LPAC) issued the following release today.
As Gabriel Heater would have said, "There's bad news in the financial world today." By 1430 Frankfurt, Germany time, the Industriekreditbank (IKB), stocks of which lost almost 16% at the Frankfurt Exchange by 10 AM on Monday morning, kept losing when trading of its stocks was resumed. Even after an emergency intervention by the bank's biggest shareholder, Kreditanstalt fuer Wiederaufbau. By 14.30 local time, IKB had lost another 8%.
While the news of this panic over the IKB only surfaced on Monday morning, Lyndon LaRouche noted that clearly the facts about the trouble this bank was facing was already known. "Don't look for coverage of this event in the U.S. press," said LaRouche, who made the collapse of the financial system a central focus in his July 25 webcast called, "Party Leaders are Faking It." "They won't report it; a lid will be put on, and they'll call it a local event."
Whereas this morning, no details on what happened on the U.S. real estate bubble market that sent IKB stocks down, were available, this afternoon, market rumors had it the sub-prime disaster had made "institutional investors so uncertain that the refinancing of IKB's Rhineland Funding fund was endangered."
The bank, otherwise prominent in funding of German mittelstand firms, is engaged to a larger extent on the U.S. sub-prime market, a banking source in Frankfurt told EIRNS today, adding that many other German banks are in the same exposed position, as "nowhere else in the world can one get the capital today, to secure the promised 7-8% or more revenue for the shareholders." But the risks are enormous in that sector, naturally, a truth that has been widely neglected but which hits home these days. The source hinted that the real problem may even surface in Japan, as many of these sub-primes turned into collateralized debt obligations—CDOs—are bundled and end up in Tokyo, for refinancing—an aspect of the yen carry trade.
