Sabbath 12/11/30/120 C

Dear Friends,

Let us look at the so-called sub prime crisis and find out what is really going on. If we assume there are 250 million persons in the US and an average of 2.5 per household we are left with a total of 100 million households. At an average price per house of say $200,000 the total housing bill in the US is 20,000, 000 million dollars or 20 trillion dollars. Holiday homes are not taken into account as these are not purchased with sub prime loans. The sub prime sector is the lower end of this market. The figures given are 1.7 trillion dollars. The number of homes in this sector would be some 8.5 million houses at the average price and perhaps some 10 million houses.

Investment in the sub prime market has been going on now for a few years and has come to the point where the interest rates are now reaching the higher levels set at the end of the two year holiday period. We saw some 40 billion dollars written off in the last quarter of last year and this month a further 20 billion in Citibank and JP Morgan Chase alone. Morgan Stanley is faring worse than JP Morgan Chase. On Thursday 17 January, Merrill Lynch announced a write-off of US$14 billion and declared a loss of US$7.8 billion. That has now reportedly been increased to 16 Billion and 9.8 billion declared loss. Although not as much as Citibank, Merrill Lynch is much smaller and relatively it is a massive blow to their system. Their stock has declined by 49% writing US$42 billion from their peak market capitalisation. The morning news on ABC Radio National stated that to date US$100 billion had been written off and there was more to come in the near future. The report from the Wall Street Journal underestimated the actual write-offs by many billions of dollars for the major corporations. The corporations themselves had understated their prospective losses.

There has been over $30 billion of capital infusion between Merrill, Citibank, UBS, and Morgan Stanley. The money is coming from Singapore, Saudi Arabia, Kuwait, Abu Dhabi, Korea, and Japan. These organisations are being kept afloat with Arab and Asian money. Much of the money is from government investment funds, mainly in Abu Dhabi and Singapore. The foreign investment is being done to avoid federal government scrutiny. In this election year it will become a major feature of the election process. The banks are undergoing rapid recapitalisation to shore up their shaky financial positions. They need to raise money from investors rather than sell assets and cut back on the finance lending. This method distributes the credit squeeze. However these share issues are diluting current shareholder asset bases and returns, which will be at least 50% down to next to nothing anyway. As the write-downs mount, other institutions are forced to seek fresh capital and that will mount over the next weeks and months.

The Wall St Journal also reported Citigroup was forced to bail out seven related entities and thus bring on to its balance sheets US$49 billion in new assets and further erode its capital position.

As the economy weakens more loans to consumers and businesses are soured. They are also caught in a squeeze as their profit margins are pinched due to higher interest to attract deposits.

Credit downgrades to bond insurers will further imperil the banks that have hedged their exposure to billions of dollars in bonds by buying insurance. The value of the insurance diminishes as the insurers are downgraded thus diminishing the value of the bonds on their books.

The banks now want to tap the government funds seeking investment opportunities. This is seen as the cash cow that might save them from insolvency due to the affiliated incompetent risk management and bad mortgage debts. These major banks are selling billions of dollars in stock reducing its lost and actual value. Most of Merrill’s commercial lending unit was sold by its new CEO John Thain recently. Will the refilled coffers halt the slide?

The Australian Stock Market had the worst falls for decades over the last two weeks. The local market lost about $83 billion over the course of the week, and about $136 billion over the past two weeks, as measured by the All Ordinaries index. It was reported as being hurt by mainly offshore factors, such as concerns about the US economy and hefty earnings losses reported by major US investment banks.

There is more to come and one should ask what is going on? Could some one tenth of properties be in liquidation as it seems?

The real problem is also the foreign ownership limitations in US law. The aim seems to be to force the foreign ownership and control over the 5% limit and force the raising of the limit under the Bank Holding Company Act to relieve the crisis. The Federal Reserve is its own watchdog in this aspect when it should rightly reside with Congress. The watchdogs could require the banks to maintain higher levels of capital reserves. The low level of capital reserves is much of the reason most of the securities are worthless now. Merrill would be exempt from that however, as it is not a commercial bank. Supervision is problematic as the Committee on foreign investment in the US is led by the Treasury Secretary who is under extreme (internet) criticism at present for the Wantagate scandal.

Investment is being diffused so as to not alarm the public and the few politicians and regulators that have an idea of the seriousness of the issue. The Bush administration is welcoming the investment, reportedly so as to not appear protectionist.

The stocks are skidding as a result of public misgiving about using extremist measures to control the situation. So what is it all about?

The interest on the sub prime debt of 1.7 trillion dollars at 6% over two years is 102 billion per annum. If we assume that the 6 % was paid then 204 billion was paid. If 100 billion dollars was written off to date and 75 billion in the British and US banks alone we are writing off the entire interest bill on the entire debt which is ridiculous. We are not being told the full story. The system can be solved simply but they don’t appear to want to solve it. The fixing of the sub prime rate and the control of the asset sale is easily done and would limit the loss. The loss even under fire-sale conditions now could not be more than five to ten trillion dollars. There is much more going on than the loss on housing in the US.

The reality of the market is that central banks and investment banks have a symbiotic relationship. The theory is that one party, the investment banks benefit. The central banks control the system. The system is contrary to law but was established by the US presidency (and also in Australia by the Labor system in government) contrary to law and the constitutions of those countries.

In this case the investment banks have introduced questionable sub prime CDOs into the asset backed paper market and crippled the capacity of the central banks to maintain the markets necessary for investment banks to profit. They deliberately destroyed their own financial base using an asset base that was artificially created by sales using the central bank and another financial house. That appears highly unethical if not treasonous and when committed on other nations it can be construed as a hostile act to destabilise a national economy.

We have now seen what appears to be a deliberately engineered collapse of investor confidence that has now prevented commercial banks from selling their hundreds of billions of dollars plus inventory of asset-backed commercial paper to investors who no longer have confidence in the product.

In March 2007 US$156 billion of asset backed commercial paper was issued. In October 2007 only US$5 billion was issued thus indicating a total collapse of the market. This cannot be legitimately described as a contraction.

So the banks (many outside the US) are now holding the bad debts with no real security in these worthless paper CDOs. Even Australian local government authorities have invested rate-payers funds in this worthless US paper. Some people think that it was not the intention of the investment banks or their symbiotic twins the central banks. Don’t you believe it!

Now German and French and British banks and Japanese and US insurers such as the massive AIG are reeling from multi billion dollar losses from investment in these sub prime CDOs. It is estimated that money market funds own as much as 300 billion of this sub prime debt. Their ability to refinance these funds is seriously in doubt.

The British government is about to nationalise the Northern Rock bank in the UK to salvage its funds.

The backlog of this questionable debt has now frozen the ability of credit markets to provide the additional credit to these junk-rated corporations dependent on this finance and the entire system appears certain to collapse.

The world has never seen anything like it. It cannot be simple stupidity on such a large and systematic scale.

The scheme was to create a pool of dependent investors in the lower income levels and trap them into a variable rate mortgage, which would double in interest at the end of two years. Thus the investors could literally rape the financially vulnerable using non-biblical principles and an unethical system. The system of increasing interest is actually legal and government sanctioned in Australia. It is theft and against God’s laws. They deserve to be caught in the pit they dug for the American sub prime borrowers and to catch themselves on their own snare getting out.

The consequence may well be the collapse of confidence in the entire monetary system based on paper money and promissory notes.

There must be another explanation of what is happening.

The answer is that this crisis appears to have been deliberately engineered to fleece or even bring down the world financial system and the pension funds and effectively transfer control of the economies of the world to the New World Order.

It will prove to be without doubt the greatest act of treason perpetrated on the American people and the greatest act of financial violence ever perpetrated by the US on its allies and innocent nations. A Fascist European Union will rise out of the ashes of the current system. The real aim of these people is to establish a global money system to match the global economy. National monetary systems are at odds with this drive for the NWO Global Economy thus a crisis must be engineered to panic the populace into accepting the introduction of the global monetary system. They may have to do it by regions at first but the end aim is the single world currency unit.

The destruction of the national integrity of Canada is almost complete.
“More than 12,000 Canadian companies have been taken over since the 1989 Canada-U.S. Free Trade Agreement. Since January 2006, foreign takeovers of some $156 billion have been consummated…There only are a handful of widely held Canadian companies now listed on the Toronto Stock Exchange – surely an abnormal situation for a sovereign nation.”

This analysis of this issue is reported on

The American union is being undertaken by stealth through the US Council on Foreign Relations (CFR). The US citizen is not being informed of the elitist agenda in case they rise up in arms.

It will come to a head in 2008 and begin the disaster that will be the New World Order and the system we call the Beast Power. It will escalate into an attempt at world control and then total global war within a very short time. That is why the US elitists wants bases all over the world and are prepared to invade and bomb any nation that stands in their way. That is why people such as Ron Paul and Kucinich in the US are being sidelined and their arguments are not heard. These elitists don’t want it exposed and the US media is complicit. The journalists are dumb dogs in the biblical sense.

From Passover this year we will explain how these madmen will achieve it and what is to happen to the world and to them as a result.

Wade Cox
Coordinator General