June 20, 2007 (LPAC)--A panicked Mark Kiesel, an executive at the $678 billion Pimco, the California-based fund manager, warned June 20 that a half-percentage point increase in the 30-year mortgage rate over the past five weeks--from 6.15% to 6.74%--is creating the conditions for a "bloodbath." The rate increase combined with stricter lending standards for subprime mortgages, means that millions of people will no longer be able to stay in their homes, Kiesel said, warning that the worst is yet to come.

True enough. But Lyndon LaRouche said today that this is not news in itself. A lot of the "experts" involved in this process are all trying to perfect a mathematical formula for betting. But, he added, they all use the same formula, and they are all going to lose. The only "news" is that the nature of the system is bankrupt. It's like the fools who desperately beg to know the exact date of the crash.

Nouriel Roubini, a former Treasury Department director in the Clinton Administration, told Bloomberg "it's not just a housing recession anymore. It looks more and more like an economic recession." Kiesel told Bloomberg News that he is sure the housing crisis will drive the U.S. economy into recession, but then foolishly suggested that it could be stopped if the Federal Reserve would just cut its benchmark rate "at the first surge in unemployment."