PRESS RELEASE
EIR's Hoefle:
It's the Derivatives, Stupid!
Feb. 18, 2011 (EIRNS)—In a half-hour interview with LaRouche PAC TV, posted yesterday, EIR economics editor John Hoefle took apart the latest proposals of the Obama Administration which purport to deal with the problems of Fannie Mae and Freddie Mac. In fact, Hoefle told his interviewer, what the Obama Administration is proposing is more of the same old bailout, specifically, of the mortgage-backed securities which the predatory banks used to create the crisis in the first place.
The main goal of the administration, Hoefle said, as it was of the Bush Administration as well, is to protect the derivatives market, the quadrillions of unpayable gambling debts which have been piled up through speculation, and now through the bailouts as well.
"The crisis has always been a derivatives crisis," Hoefle said. And the bailouts were intended to protect the debt, by supporting the values of the fictitious capital which these derivative bets represent.
In fact, the housing policy has never been about housing, or giving people places to live. It's just aimed at saving the securities that were loosely based upon the mortgages created—and, despite all the disasters that were created by that policy, as documented in the FCIC report, that policy of saving the securitization process is still the Administration's policy.
