Onward With the Mediterranean Union?

From Amitai Etzioni's blog:
http://blog.amitaietzioni.org/2008/07/onward-with-the-mediterranean-union.html

Smart Growth is part of the solution to man made problems and climate change. Transit oriented pedestrian shopping corridors (as in Puget Sound Light Link Rail Station Area Planning & Development) is the best answer to the rising cost of gas: http://www.smartgrowthamerica.org/

Summer Visitors

Tanner flying under a tinfoil roof

Well, we didn't end up hosting the Freedom Festival this summer, and Camp Redington never officially opened either. Everything is ready for next summer though, we can open on schedule in 2009 and take reservations over the winter. We will be open during the Kenny Lake Fair on the 15th and 16th.

Here's a few people who came by; they were our "pilot tests." While mostly family, Brian and Trudy are ACL supporters from back east who made us part of their Alaskan vacation plans. We saw a close brown bear when we took a walk down at 15 mile the last day they were here. I yelled "run" and took off towards the car. They really wanted to see a bear so didn't listen to me, but the bear did (thankfully) and it ran into the woods (and then Brian wanted to follow it!) I really enjoyed their company and it was very inspiring to discuss ACL work with people who studied our website. He said what he most appreciated was how we stick to the facts and provide so many direct links to government sources. It was also pretty cool to find out he used to be in the 82nd, and I'm grateful to know that our Army is still made up of some men like my father. Not everyone discounts our work based on where we live or our lack of credentials.

Justin inside the museum

cousin Jayce

Tanner, Jayce and Nordica

Fred and Aunt Kathy

mosquito hat

neighbors

Brian and me

lunchtime with cousins and Aunt Judy in gertee

Diane and Kathy

Nordica, Fred, Brian and Trudy

And now a word from our detractors

Followed a few visitors to a forum on global warming where one member called the theory a Hegelian ruse and linked to our Hegel page. An academic member retorted thus:

"think you got the idea of using it from that lady's site. perhaps the particular application is your own.

"with all due respect jim, her ideas about hegel aren't really all that sound. she's proceeds from a very specific political standpoint. she's got zero credentials, zero credibility, and gets her mail c/o the clerk at the local grocery market in buttf**k, alaska. it's great that she's making an effort and trying to apply something theoretical to the world around her, but it's like getting advice on sex from a twelve year old. although, these days... (blanked out profanity-ed.)

"your's is a relatively arbitrary application of a long debunked metaphysic. http://www.otcentral.com/forum/showthread.php?s=3bf771ba5d9e4442dcc1120864140092&t=27173&page=3

Buchanan, MacDonogh, Pilger Books Explode Illusion Of American Exceptionalism

Bashing nations for the brainwashing they endure at the hands of globalist propaganda experts is always in fashion. Lies can be told and repeated until finally they are the "official" historical version. The allies' siege of Berlin ended with a Mongol brigade under the Soviet Army given the "freedom" to rape 100,000 women left alive after the bombing. The American forces held back and waited for the Soviets to get there. After the war, the "German" people were guinea pigs for a dialectical theory called "collective guilt". Blaming Americans for U.S. foreign policy is like blaming German women and children for being raped by their Mongolian "liberators." From Peter Myer's elist:

Date: Thu, 24 Jul 2008 17:17:29 -0400 (EDT) From: IHR News

Buchanan, MacDonogh, Pilger Books Explode Illusion Of American Exceptionalism

Paul Craig Roberts

July 01, 2008

http://www.vdare.com/roberts/080701_salt.htm

Which country is the rogue nation? Iraq? Iran? Or the United States? Syndicated columnist Charley Reese asks this question in a recently published article.

Reese notes that it is the US that routinely commits "acts of aggression around the globe." The US government has no qualms about dropping bombs on civilians whether they be in Serbia, the Middle East, or Africa. It is all in a good cause—our cause.

This slaughtering of foreigners doesn’t seem to bother the American public. Americans take it for granted that Americans are superior and that American purposes, whatever they be, take precedence over the rights of other people to life and to a political existence independent of American hegemony.

The Bush regime has come up with a preemption doctrine that justifies attacking a country in order to prevent the country from possibly becoming a future threat to the US. "Threat" is broadly defined. It appears to mean the ability to withstand the imposition of US hegemony. This insane doctrine justifies attacking China and Russia, a direction in which the Republican presidential candidate John McCain seems to lean.

The callousness of Americans toward the lives of other peoples is stunning. How many Christian churches ask God’s forgiveness for having been rushed into an error that has killed, maimed, and displaced a quarter of the Iraqi population?

How many Christian churches ask God to give better guidance to our government so that it does not repeat the error and crime by attacking Iran?

The indifference of Americans to others flows from "American Exceptionalism", the belief that Americans are graced with a special mission to impose their virtue on the rest of the world. Like the French revolutionaries, Americans don’t seem to care how many people they kill in the process of spreading their exceptionalism.

American Exceptionalism has swelled Americans’ heads, filling them with hubris and self-righteousness and making Americans believe that they are the salt of the earth.

Three recent books are good antidotes for this unjustified self-esteem. One is Patrick J. Buchanan’s Churchill, Hitler, and the Unnecessary War. Another is After the Reich: The Brutal History of the Allied Occupation by Giles MacDonogh, and a third is John Pilger’s Freedom Next Time.

Buchanan’s latest book is by far his best. It is spell-binding from his opening sentence: "All about us we can see clearly now that the West is passing away." As the pages turn, the comfortable myths, produced by history written by the victors, are swept aside. The veil is lifted to reveal the true faces of British and American Exceptionalism: stupidity and deceit.

Buchanan’s strength is that he lets the story be told by Britain’s greatest 20th century historians and the memoirs of the participants in the events that destroyed the West’s dominance and moral character. Buchanan’s contribution is to assemble the collective judgment of a hundred historians.

As I read the tale, it is a story of hubris destroying judgment and substituting in its place blunder and miscalculation. Both World Wars began when England, for no sound or sensible reason, declared war on Germany. Winston Churchill was a prime instigator of both wars. He seems to have been a person who needed a war stage in order to be a "great man."

The American President Woodrow Wilson shares responsibility with Britain and France for the Versailles Treaty, which dismembered Germany, stripping her of territory and putting millions of Germans under foreign rule, and imposed reparations that Britain’s greatest economist, John Maynard Keynes, correctly predicted to be unrealistic. All of this was done in violation of assurances given to Germany that there would be no reparations or boundary changes. Once Germany surrendered, the assurances were withdrawn, and a starvation blockade forced German submission to the new harsh terms.

Hitler’s program was to put Germany back together. He was succeeding without war until Churchill provoked Chamberlain into an insane act. Danzig was 95 percent German. It had been given to Poland by the Versailles Treaty. Hitler was negotiating its return and offered in exchange a guarantee of Poland’s frontiers. The Polish colonels, assessing the relative strengths of Poland and Germany, understood that a deal was better than a war. But suddenly, the British Prime Minister issued Poland a guarantee of its existing territory, including Danzig, whose inhabitants wished to return to Germany.

Buchanan produces one historian after another to testify that British miscalculations and blunders, culminating in Chamberlain’s worthless and provocative "guarantee" to Poland, brought the West into a war that Hitler did not want, a war that destroyed the British Empire and left Britain a dependency of America, a war that delivered Poland, a chunk of Germany, all of Eastern Europe, and the Baltic states to Joseph Stalin, a war that left the Western allies with a 45-year Cold War against the nuclear-armed Soviet Union.

People resist the shattering of their illusions, and many are angry with Buchanan for assembling the facts of the case that distinguished historians have provided.

Churchill admirers are outraged that their hero is revealed as the first war criminal of World War II. It was Churchill who initiated the policy of terror bombing civilians in non-combatant areas. Buchanan quotes B.H. Liddell Hart: "When Mr. Churchill came into power, one of the first decisions of his government was to extend bombing to the non-combatant area."

In holding Churchill to account, Buchanan makes no apologies for Hitler, but the ease with which Churchill set aside moral considerations is discomforting.

Buchanan documents that Churchill’s plan was to destroy 50% of German homes. Churchill also had plans for using chemical and biological warfare against German civilians. In 2001 the Glasgow Sunday Herald reported Churchill’s plan to drop five million anthrax cakes onto German pastures in order to poison the cattle and through them the people. Churchill instructed the RAF to consider drenching "the cities of the Ruhr and many other cities in Germany" with poison gas "in such a way that most of the population would be requiring constant medical attention."

"It is absurd to consider morality on this topic," the great man declared.

Paul Johnson, a favorite historian of conservatives, notes that Churchill’s policy of terror bombing civilians was "approved in cabinet, endorsed by parliament and, so far as can be judged, enthusiastically backed by the bulk of the British people." Thus, the terror bombing of civilians, which "marked a critical stage in the moral declension of humanity in our times," fulfilled "all the conditions of the process of consent in a democracy under law."

British historian F.J.P. Veale concluded that Churchill’s policy of indiscriminate bombing of civilians caused an unprecedented "reversion to primary and total warfare" associated with "Sennacherib, Genghis Khan, and Tamerlane."

The Americans were quick to follow Churchill’s lead. General Curtis LeMay boasted of his raid on Tokyo: "We scorched and boiled and baked to death more people in Tokyo that night of March 9-10 than went up in vapor in Hiroshima and Nagasaki combined."

MacDonogh’s book, After the Reich, dispels the comfortable myth of generous allied treatment of defeated Germany. Having discarded all moral scruples, the allies fell upon the vanquished country with brutal occupation. Hundreds of thousands of women raped; hundreds of thousands of Germans died in deportations; a million German prisoners of war died in captivity.

MacDonogh calculates that 2.5 million Germans died between the liberation of Vienna and the Berlin airlift.

Nigel Jones wrote in the conservative London Sunday Telegraph (April 18 2007): "MacDonogh has told a very inconvenient truth," a story long "cloaked in silence since telling it suited no one."

The hypocrisy of the Nuremberg trials is that the victors were also guilty of crimes for which the vanquished were punished. The purpose of the trials was to demonize the defeated in order to divert attention from the allies’ own war crimes. The trials had little to do with justice.

In Freedom Next Time, Pilger shows the complete self-absorption of American, British and Israeli governments whose policies are unimpeded by any moral principle.

Pilger documents the demise of the inhabitants of Diego Garcia. The Americans wanted Diego Garcia for an air base, so the British packed up the 2,000 residents, people with British passports under British protection, and deported them to Mauritius, one thousand miles away.

To cover up its crime against humanity, the British Foreign and Commonwealth Office created the fiction that the inhabitants, which had been living in the archipelago for two or three centuries, were "a floating population." This fiction, wrote a legal adviser, bolsters "our arguments that the territory has no indigenous or settled population."

Prime Minister Harold Wilson and Foreign Secretary Michael Stewart conspired to mislead the UN about the deported islanders by, in Stewart’s words, " presenting any move as a change of employment for contract workers—rather than as a population resettlement."

Pilger interviewed some of the displaced persons, but emotional blocs will shield patriotic Americans and British from the uncomfortable facts. Rational skeptics can find a second documented account of the Anglo-American rape of Diego Garcia online here. An entire people were swept away.

Two thousand people were in the way of an American purpose—an air base—so we had our British dependency deport them.

Several million Palestinians are in Israel’s way. Pilger’s documented account of Israel’s crushing of the Palestinians shows that our "democratic ally" in the Middle East is capable of any evil and has no remorse or mercy. Israel is an apt student of the British and American empires’ attitudes toward lesser beings. They simply don’t count.

Those who are the salt of the earth take precedence over everything.

Paul Craig Roberts [email him] was Assistant Secretary of the Treasury during President Reagan’s first term. He was Associate Editor of the Wall Street Journal. He has held numerous academic appointments, including the William E. Simon Chair, Center for Strategic and International Studies, Georgetown University, and Senior Research Fellow, Hoover Institution, Stanford University. He was awarded the Legion of Honor by French President Francois Mitterrand. He is the author of Supply-Side Revolution : An Insider's Account of Policymaking in Washington; Alienation and the Soviet Economy and Meltdown: Inside the Soviet Economy, and is the co-author with Lawrence M. Stratton of The Tyranny of Good Intentions : How Prosecutors and Bureaucrats Are Trampling the Constitution in the Name of Justice. Click here for Peter Brimelow’s Forbes Magazine interview with Roberts about the recent epidemic of prosecutorial misconduct.

Collectivism, from A Dictionary of Sociology

I just love it when I read "official" source explanations of communitarianism that back up everything I write about it. This one is even more special since it explains the direct tie between community policing and Etzioni's brand of communitarianism, i.e. "Communitarians claim to have influenced the development of social policy in America (Etzioni has been a policy adviser to the Clinton administrations) and Britain (where communitarian ideas are said to have found favour with New Labour). Community policing, for example, is a policy consistent with communitarian ideals."

collectivism
A Dictionary of Sociology | Date: 1998

"collectivism -- A term with a general and a variety of specific applications. In the most common usage it refers to any political or socio-economic theory or practice which encourages communal or state ownership and control of the means of production and distribution. Particular applications vary greatly since there are numerous examples of collectivist organizations.

"Farmers organized into collectives were, until recently, a significant social group in the former USSR. These farms controlled the labour inputs of members, fixed rates of remuneration, and determined the content of agricultural production. Many were the result of a violent forced collectivization of peasant and family-owned farms during the Stalinist period. Agricultural collectives in China have had a more varied history. One of the most popular schemes was a ‘responsibility system’ introduced in the 1980s, whereby individual peasant households signed a contract by which the land still belonged technically to the collective, but was assigned to individual households for their own use. These contracts specified obligations on either side, for example with respect to the provision of tools and equipment, payment of taxes, and meeting of production quotas. A particularly interesting form of collective—the workers' self-management of the economy—emerged in Tito's Yugoslavia. However, sociological research confirmed that the theoretically democratic distribution of influence within the enterprise was not matched by the real power of Workers' Councils, which tended in practice to be largely symbolic.

"The collectivist critique of liberal and other theories of individualism argues that market relationships are competitive, tend also therefore to be divisive, and undermine those communal bonds which are necessary between individuals if they are to cope with misfortunes to which all are in principle vulnerable. For example, social welfare theorists argue that unrestrained free exchange causes welfare problems, as evidenced by the housing market which fails to provide shelter to those in demonstrable need. One of the most celebrated collectivist defences of the welfare state was made by Richard Titmuss (see The Gift Relationship, 1970), who argued that welfare systems should be defended by reference to arguments about altruism. His argument was that people should receive welfare as a gift from strangers, an expression of social solidarity, rather than as an entitlement or right derived from a complex network of reciprocal relationships. Thus, in the case of blood donations, Titmuss maintained that if this ‘most sacred’ of commodities were to be commercialized then the moral bonds between individuals would become wholly contaminated by calculations of self-interest and market price. As he puts it, ‘In not asking for or expecting any payment of money those donors signified their belief in the willingness of men to act altruistically in the future, and to combine together to make a gift freely should they have need for it. By expressing confidence in the behaviour of future unknown strangers they were thus denying the Hobbesian thesis that men are devoid of any instinctive moral sense’. This communitarian view of welfare as an expression of the common values that bind otherwise disparate individuals together may be contrasted with the more individualistic conception of welfare derived from the theory of citizenship. The latter implies that claims to welfare resources are simply an extension of the legal and political rights that are characteristic of liberal democracies and, therefore, that collective welfare is quite consistent with the theory of liberal pluralism. Welfare states are simply adjuncts to markets; that is, rational deprivation-alleviating institutions and policies, resting on the individualistic principles of reciprocal obligations and exchange. Communitarianism, by contrast, embodies a vision of a social order that fosters intimate communal bonds.

"During the early 1990s, the term ‘communitarianism’ was appropriated by a small group of mainly American social scientists, linked by a common hostility to the philosophies of liberalism and libertarianism. The sociologist Amitai Etzioni was one of the prominent founders of this movement (see his The New Golden Rule: Community and Morality in a Democratic Society, 1996). Etzioni argues that the advanced industrial societies of the capitalist West suffer from ‘rampant moral confusion and social anarchy’ because individuals have been given too much freedom and not enough responsibilities. Etzioni and other communitarians are in favour of more obligations and fewer rights. They tend to shun economic explanations of social problems, preferring instead to blame everything from crime to excessive consumerism on the moral decline of the family, much of which can be traced to the increasing employment of women outside the home. Etzioni claims this has created a ‘parenting deficit’ which prevents ‘effective personality formation’ in infants, increasing reliance on child-care facilities that often amount to little more than ‘kennels for kids’, and in due course producing a generation of young people who lack the moral fibre to resist crime, drugs, and early sex.

"Communitarians deny that they are advocating a return to the 1950s-style division of labour (formal employment for men, back into the home for women), and proffer instead a range of ‘pro-family practices and policies’, such as Etzioni's ideas for ‘peer marriage’ (a two-parent family, in which each partner has the same rights to extended ‘family leave’ after the birth of children, underwritten by a hardening of the laws against divorce). More broadly, communitarians favour a social order in which ‘the community’ identifies the common good, and persuades its members to act towards it. In this way arguments in favour of (say) safer driving will succeed because they have moral force.

"Communitarians claim to have influenced the development of social policy in America (Etzioni has been a policy adviser to the Clinton administrations) and Britain (where communitarian ideas are said to have found favour with New Labour). Community policing, for example, is a policy consistent with communitarian ideals. Critics have suggested that communitarian arguments are both vague and naïve. Who will pay for extended parental leave-of-absence from employment? What if ‘the community’ endorses values such as homophobia or racialism? What happens to dissenters, who refuse to conform to the ideals of the two-parent family and marriage for life, and are not persuaded by mere exhortation alone? Communitarian social policies are also said to be authoritarian in effect if not intention. See also BROKEN WINDOWS THESIS; COMMUNE; GIFT RELATIONSHIP."

broken windows thesis
A Dictionary of Sociology | Date: 1998

"broken windows thesis -- A thesis which links disorderly behaviour to fear of crime, the potential for serious crime, and to urban decay in American cities. It is often cited as an example of communitarian ideas informing public policy." http://www.encyclopedia.com/doc/1O88-brokenwindowsthesis.html


© A Dictionary of Sociology 1998, originally published by Oxford University Press 1998

Pilgrims, Zionism and the New Age, by Bobby Garner

Peter Myers is a former Jesuit whose website is called "Neither Aryan Nor Jew." I found him many years ago when I was researching the Zionist connections to Amitai Etzioni's communitarianism. I immediately recognised his fine scholarship and appreciated his work on higher tribalism. I've used hundreds of his links and email forwards in ACL research (his British Zionism chart is on our conspiracy theory page) and I depended on him for a crash course in economics 101. Much of what he posts is slanted toward the left and he doesn't write about communitarianism. I've always found him to be polite, helpful and friendly. I decided to ignore the fact that he ignores communitarianism (since that is the "normal" response to our work anyway).

Bobby Garner (congregator.net)is one of very few people I know of who has studied communitarianism as the philosophy and the religion behind the emerging supranational system. He is the only person I know who's made the direct connection between Lucifer worship, Alice Bailey and the communitarian world service workers. He's made numerous attempts to introduce Bailey, The Plan and the communitarian formation of the emerging world government to Myer's elist. I don't know why I thought that maybe Peter would respond if another man said it. So far, Bobby's references to Zionist communitarianism have been ignored the same way mine are. Both of us have begun to openly question why alternative academics, researchers, writers and radio hosts exclude important information from their works.

Here's an email Bobby just sent to Myers:

Peter,

When I recently discovered the Pilgrims Society, an elite group of Anglo-Americans founded in 1902, I immediately recognized a possible connection with "British Israel" as covered in The Union Jack. However, hard evidence was illusive as most observers have noted the apparent hostilities between certain Pilgrims and Zionism. That however, should be expected as a function of any well organized subterfuge.

Then while searching my private library for information on the Pilgrims, I found Burton J. Hendrick's 1923 book The Jews In America, which is generally recognized for first bringing the "Jewish Problem" to the attention of the American people. As expected, Zionists condemn this book as anti-Semitic ("Hendrick's book encouraged the growth of anti-Semitism during the 1920s."), and true to form, use it to discredit the author. In an article Spurious Anthropology, published by The Nation in Oct. 1923, the author commented, "It is surprising that so keen a journalist as Henrick did not recognize that by piling up his contradictions in...[such] gross a manner he has made the indictment self-defeating."

Hendricks was an associate editor of Pilgrim Society member, Walter Hines Page's World's Work magazine, published by Doubleday, Page & Co. Does this sound like a good name for the magazine of someone who thinks of himself as a World Server?

Walter Hines Page (August 15, 1855 - December 21, 1918), Pilgrims Society member, an American journalist, publisher, and diplomat. Educated at Trinity College (now Duke), Randolph-Macon College, and Johns Hopkins University studying Greek classics. Editor of the St. Joseph Gazette, the Forum and Atlantic Monthly. Partner in the publishing firm of Doubleday Page & Company (publisher). Wrote “The Rebuilding of Old Commonwealths” (1902), the same year the Pilgrims Society was founded. Founded and edited the "World's Work" up to 1913. He was the United States ambassador to the United Kingdom during World War I. A proud Southerner, he admired his British roots ... As ambassador to Britain, he defended British policies to Wilson and so helped to shape a pro-Allied slant in the President and in America as a whole. WALTER HINES PAGE

On July 8, 1929, Time magazine timely published the "New World's Worker". Can there be any doubt that certain members of the Pilgrims Society were prominent in Alice Bailey's address book of "Master's" among whom her letters were privately circulated? Were the Pilgrim's all working in unison creating the chaos out of which order to their specifications could be realized? Was Karl Marx their prophet, or was his claim of "Order out of Chaos", meant for their instruction.

A site search of http://users.cyberone.com.au/myers produced two occurrences of "Jews in America", but not in reference to the book. Neither do you mention the Pilgrims Society or The Union Jack. "British Israel" gets one honorable mention in the same sentence as " Jesus was king of England" Shame on the poor soul who would believe that. There was one mention of the "World's Work" in regard to universal peace.

I notice that you point out many of the contradictions, seemingly in order to discredit the various participants in the debate, but you seldom seek a resolution such that all the pieces of the puzzle fit nicely together.

Are you trying to solve the puzzle? Or, are you cutting out the pieces and shaking them up so that none cling together? Is shaking things up also the function of professional "academic scholarship"? Or of Public Journalism?

Or maybe you really didn't know about the Pilgrims Society.

There is indeed a powerful high force in the high places! You must know about them because their existence governs your future to a disturbing extent. They are the source of fiat money; the powers behind central banks; international financiers; warmongers; globalists; cartel monopolists; and the force suppressing precious metals. JFK, whose father was a member, strayed from the plan! As Zad Rust commented in "Teddy Bare, The Last of the Kennedy Clan"(1971)--- "The Warren Commission had no other mission than to conceal the truth, and it was relentlessly helped in this mission by many official agencies and by some powerful organized Force of universal scope and character. This Force of Darkness has already brought the world very near to the point of no return on the road to total annihilation of the liberties of man and the independence of nations, and to the enthronement of the Antichrist." - Meet the World Money Power

Bobby Garner
http://www.congregator.net/
http://apps.congregator.net/Blog/
Free to forward or post.
P.S. Bcc's to undisclosed recipients.

Apocalypse Down Under: Aussie bank’s write-offs signal doom for Wall Street

For years we've read articles assuring us that a huge economic disaster was looming. While it was never a focus of our research, we've become convinced our system's crash is necessary to bring about massive communitarian change. The world's final transference into communitarian global governance is hastened during any kind of a panic. A big stock market crash could be very useful in subduing arrogant, selfish Americans who use up more than their share of the world's precious resources. What makes Americans think they have the right to own anything anyway?

What is The Stop Excessive Speculation Act, and why was it blocked? One of the sponsors, Senator Patty Murray (D-WA) was responsible for bringing the WTO Ministerial to Seattle in 1999. Main sponsor Harry Reid shares values with DLC-Third Way Senate leader Evan Bayh, and Reid introduced the “Pandemic Preparedness and Response Act” in 2005. He's a player.

From Peter Myer's elist:

(1) National Australia bank’s write-offs “signal doom for Wall Street”

From: Paul de Burgh-Day, Date: Mon, 4 Aug 2008

Apocalypse Down Under: Aussie bank’s write-offs signal doom for Wall Street
By Mike Whitney
Online Journal Contributing Writer
Aug 1, 2008, 00:31

http://onlinejournal.com/artman/publish/article_3571.shtml

Monday’s trading on the New York Stock Exchange (NYSE) was a real humdinger. It started off with the White House announcing that this year’s fiscal deficit would soar to a new record of nearly $500 billion. That was followed by news of rising oil prices, weak quarterly earnings and a slowdown in consumer spending. Plunk, plunk, plunk; one domino after another.

By mid-morning the markets were in full retreat. That’s when investment giant Merrill Lynch announced that it would notch a $4.6 billion second-quarter loss and write-downs of $9.4 billion on collateralized debt obligations (CDOs) and other mortgage-related assets. That’s when the dookie really hit the fan. Stocks quickly went vertical and the rout was on. By the closing bell the Dow was down 240 points. Traders staggered from floor of the exchange slumped-over and bedraggled, looking like they just got a missive from the draft board. The optimism is being wrung from the markets faster than the credit at an over-levered hedge fund. Every day brings another dismal surprise.

And, yet, on Tuesday, the market staged a valiant comeback surging 260 points in a matter of hours. It was enough to give the fund managers a bit of a lift and hope that things are finally turning around. But the market’s woes are far from over. They’re deeply rooted and spreading like Kudzu throughout the system. The International Monetary Fund summed it up in warning they issued earlier in the week: “Global financial markets are ‘fragile’ and indicators of systemic risk remain ‘elevated’ . . . Credit quality ‘across many loan classes has begun to deteriorate with declining house prices and slowing economic growth.’ Bank balance sheets are under ‘renewed stress’ and the decline in bank share prices has made it more difficult to raise new capital. [There is an] ‘increased likelihood of a negative interaction between banking system adjustment and the real economy.’” (Financial Times)

The IMF also stuck by its earlier prediction that total losses to financial institutions from the credit crisis would reach $1 trillion ($945 billion) a sum that will have devastating consequences for industry, consumers and the global economy. Tuesday’s festivities on Wall Street are likely to be short lived. It’s just a one day lull in the storm.

Over at Nouriel Roubini’s blog, Dr. Doom made this observation about Merrill Lynch’s troubles, “Merrill Lynch’s decision to ‘sell’ a good chunk of its remaining CDOs at 22 cents to the dollar has been widely praised as the firm finally recognizing the full extent of its losses on these toxic instruments. This batch of $30.6 billion of CDOs was already marked down to $11.1 billion. Now with the ‘sale’ of it to Lone Star at a price of 6.7 billion Merrill Lynch is taking another $4.4 billion write-down and ‘selling’ it at 22% of the original face value. But is this a market-based ‘sale’? No way, calling this transaction a ‘sale’ is a joke.” (Nouriel Roubini’s Global EconoMonitor)

This isn’t a “sale”; it’s more like abandoning a sinking ship. The investment chieftains are getting scorched by their downgraded assets and have started dumping them at any cost. There’s no market for mortgage-backed anything now, and there won’t be until housing finds a bottom. By the time that happens, most of the CEOs and CFOs in the mega-brokerage houses will be squatting on street corners on the lower East Side with tin cup in hand. It’s that bad.

The Merrill Lynch deal illustrates just how crazy things have gotten. Merrill said it “will provide financing to the purchaser for approximately 75 percent of the purchase price.” Whoa. In other words, the banks are so anxious to offload their junk-paper, they’re almost paying people to take it off their hands. Now that’s desperation! No wonder the market is snorkeling its way to the bottom of the fishbowl. The problems haunting the financial markets have cross-pollinated with the real economy and are spreading misery everywhere. Unemployment is rising, growth is slowing, inflation is up, the dollar is down. We’ve heard it many times before, but it’s still jarring to see General Motors stock fall below Bed & Bath, or Starbucks shut down 600 stores, or million dollar McMansions sell for $425,000, or millions of middle-class families join the food stamp rolls. That’s tragic no matter how you slice it.

Now that the working stiff is maxed out on his mortgage, worried about losing his job, and trying to keep food on the table, the least congress can do is scatter the oil speculators. Right?

Wrong. On Monday, the Financial Times reported, “A US Senate proposal designed to curb speculation and increase transparency in the energy markets was blocked by Republican legislators on Friday. The move frustrates Democratic efforts to show the party is taking action on record petrol prices. The Stop Excessive Speculation Act, sponsored by Harry Reid, the Senate majority leader, fell 10 votes short of clearing a procedural hurdle.”

Unbelievable. Four dollar gasoline and millions of consumers that are flat broke and congress still refuses lend a hand? What a scruffy band of sandbaggers.

The scariest news of the week comes from Down Under, where the National Australia Bank (NAB) announced it would “slash a £400m bond sale by two thirds. The retreat comes days after the Melbourne lender shocked the markets by announcing a 90pc write-down on its £550m holdings of US mortgage debt, an admission that it AAA-rated securities are virtually worthless. . . . The decision by National Australia Bank to make drastic provisions on its US mortgage debt could have ramifications in the US itself. It opted for a 100pc write-off on a clutch of ‘senior strips’ of collateralized debt obligations (CDO) worth £450m -- even though they were all rated AAA.” (Ambrose Evans Pritchard, “Australia faces worse crisis than America,” UK Telegraph)

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/07/30/cnoz130.xml

This is a huge story with grave implications for America’s struggling banking system. No wonder the establishment media is avoiding it like the plague. If AAA rated CDOs are worthless, then some of the biggest financial institutions in the country will be packed off to the boneyard feet first.

The original article appeared in the Business Spectator and was titled “NAB will shock Wall Street,” by Robert Gottliebsen. “Shock” is an understatement. This is more like a meat cleaver crashing down on a butcher block. Schwook! This is a must-read for anyone who is following the meltdown in the financial markets.

Here is an extended excerpt from Gottliebsen’s article:

http://www.businessspectator.com.au/bs.nsf/Article/NAB-will-shock-Wall-Street-GV4M7?OpenDocument&src=stf

“The National Australia Bank’s decision to write off 90 per cent of its US conduit loans will have dramatic repercussions around the world. Wall Street will be deeply shocked when they understand the repercussions of what NAB has done. It is clear global banks have nowhere near provided for their exposures to US housing loans which in the words of John Stewart are experiencing a ‘meltdown.’

“We are now way beyond subprime. NAB says that it is suffering a 55 per cent loss on American housing loans -- an event that has never happened in the history of a developed country in recent memory. This is an unprecedented event and means that the cost of bailing out the US financial system is now far beyond the highest estimates. A US recession is now locked in, but more alarmingly, 55 per cent loan losses point to the possibility of a depression.

“It means the cost of bailing out housing exposures to the two mortgage insurers will be so great that it will leave no room to bail out anything else and there are several US banks that are now in big trouble. NAB says that the dislocation in the residential market is separate from the corporate market, but the flow on is inevitable.” (The Business Spectator, ”NAB will shock Wall Street”)

The conduits are off-balance sheets operations run by the banks which contain hundreds of billions of dollars of bonds which are now essentially worthless. So far, many of the banks have not accurately reported the losses from these operations hoping that the housing market will stabilize and the value of the bonds will rebound. The action taken by the National Australia Bank is a “game-changer”; it’s like the Grim Reaper swooping down on Wall Street and lopping-off the top of every big investment bank in downtown Manhattan.

Gottliebsen again: “The global banks have been marking to market the assets they held on their balance sheet, but the vast amounts held in so called ‘conduit trust accounts’ have not been written down because they were not marketable. NAB wrote them down when they saw the bad mortgages. . . . US banks have written down $450 billion in bad housing loans. The revelation from NAB means that they will now certainly need to take provisions to $1,000 billion. But write-downs of $1,300 billion and perhaps even more are on the cards.” (Business Spectator)

Tuesday’s “sucker rally” in the stock market was just the convulsive writhing of a dying bull. It won’t last. Once the bad news sinks in, investors will pull up stakes, equities will fall, and banks will crumble. The big hand just inched a little closer to midnight.

Mike Whitney lives in Washington state. He can be reached at fergiewhitney@msn.com

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