Ambrose Evans-Prichard, that mouthpiece of the City of London Establishment, has joined forces with Deutsche Bank to promote the nonsensical idea that commodity prices are at their peak.

Sell, sell, sell, he spews, because “oil will slide back towards its ‘marginal production cost’ of $60 to $80 a barrel; gold will slump to $650 an ounce as the dollar recovers against the euro; copper, lead and tin will slowly halve in price; grains will calm down as harvests in Australia and the Eurasian Steppe return to normal.”

And if there was any doubt he’s lost it completely … “Yes, oil and food price rises have pushed headline inflation to 4.1pc, but core inflation has fallen from 1.9pc to 1.8pc over the past year.” Oh yeah?

In a sense, I can see where he is coming from. He sees the onrushing collapse of global manufacturing as a result of the collapse of the financial system. So, he argues, the demand for commodities will also collapse.

Well, maybe it will. But any such effect will be more than compensated for by the fact simple fact that in the very near future, people aren’t going to want to invest in paper anymore, because they’ll finally realise that it’s all already worthless. Keep in mind, folks, that Gold is only a third of its inflation adjusted highs of the last century, the dollar isn’t going to recover against the euro, and does anybody actually know when harvests are going to return to normal in Australia and the Eurasian Steppe?

–

Update: Right on queue, as predicted by DB and Ambrose, commodity prices are retreating. So was Ambrose right after all? Nope. According to today’s FT speculators don’t have a clue which way to place their bets, “… hedge funds were almost equally balanced between those betting on further declines for oil prices and those expecting prices to rally” and “traders said the outlook for gold was becoming increasingly polarised with bulls encouraged by concerns over the likelihood of further problems in the US financial system and bears finding support from any bouts of dollar strength.”

Particularly for gold, that sounds like clutching at straws to me. Any downward price pressure is going to be more than compensated for, as I said, by the sad facts that the dollar is not going to recover, and oil production infrastructure is crumbling as fast as the financial system.

The Sunday Times reports that the Royal Bank of Scotland is about to announce a £1 billion loss at least for the first half of the year, with anal-ists warning that it could slide to £1.7 billion. That, they say, is the largest loss in UK banking history.

So I’m adding RBS to the UK watch list:

Barclays
Bradford & Bingley
HBOS
RBS

August is going to be an interesting month.

I wonder how many times I’ll get to use that headline? First Priority joins the list.

Failed Banks So far:

Northern Rock
Bear Stearns
IndyMac
First Integrity Bank
ANB Financial
Hume Bank
Douglas National Bank
First Heritage Bank
First National Bank of Nevada
First Priority Bank

Forthcoming failures(?):

Barclays (senior execs jumping ship)
Bradford & Bingley
HBOS
Downey Financial
Corus Bankshares
Doral Financial
FirstFed Financial
Oriental Financial
BankUnited Financial
Washington Mutual

… etc.

With the news today that two more US banks have failed, I thought it would be useful to see where we are with the continuing collapse of the global financial system.

Failed Banks So far:

Northern Rock
Bear Stearns
IndyMac
First Integrity Bank
ANB Financial
Hume Bank
Douglas National Bank
First Heritage Bank
First National Bank of Nevada

Forthcoming failures(?):

Barclays (senior execs jumping ship right now!)
Bradford & Bingley
HBOS
Downey Financial
Corus Bankshares
Doral Financial
FirstFed Financial
Oriental Financial
BankUnited Financial
Washington Mutual

… and many more. Keep you posted.

If there’s one thing I object to in the strongest terms, it’s the use of the Holocaust as a political battering ram to shut people up when they criticise fascist behaviour.

In this case, it was Brazil’s foreign minister, Celso Amorim, who, with some justification, said rich countries’ deception in trade talks reminded him of tactics used by Nazi propaganda chief Joseph Goebbels.

The US delegation, led by Susan Schwab, immediately hurled her decendancy from Holocaust survivors straight back at him, in order to deflect media attention from the fact that the policies of the World Trade Organisation can quite justifiably be compared to those of the Hitler regime.

Bloody typical.

Bank share prices were on a rollercoaster last week. Can it get worse?
–
Yes.

B&B’s share price is down to 36p or so, well below the 55p being sold to investors in its upcoming rights issue - that last ditch attempt to keep itself afloat.

So why, you may ask, are investors queuing up to take a loss on the deal, presently in the order of £60 million?

Could it be because, they’re shitting bricks? They worry that a second UK bank failure will be the domino that topples the rest.

They have good reason to worry. This is only the third attempt at raising extra money, after two previous rights issues failed - the first because the published management accounts were “out of date,” and the second because TPG Capital ran a mile when they saw the books.

Question is, will B&B will have any money left for their balance sheet even if this rights issue does go off successfully, what with a whopping £55m of the raised capital going on the cost of the rights issue itself?

And then there’s the small issue of B&B’s credit rating, which having been downgraded somewhat, means they can no longer act is a counterparty in interest rate swaps. They were counterparty to such a deal. It was there to hedge against exposure to rising interest rates, exposure they face as a result of their involvement with Aire Valley, a mortgage vehicle with £13 billion of B&B mortgages.

The problem for B&B, and their new investors, is that unless they can find another bank to act as counterparty to the interest rate swap, which won’t be cheap, they’ll have to start pouring tens of millions of collateral into Aire Valley.

Suddenly this £400 million rights issue doesn’t seem to cover it …

Bradford & Bingley is in real trouble now. They need to raise some cash for their balance sheet very quickly indeed, and would already be gone if it weren’t for the Bank of England’s Special Liquidity Scheme.

They had originally begun planning a rights issue some months ago with Citibank acting as advisor. When news of that leaked, their then Chief Executive decided it was better to deny all. A month or so after his denial, he had to leave, and they had to proceed with their planned rights issue, planned at 82p per share.

Except that they management accounts they presented for the rights issue weren’t quite accurate. B&B had to admit they were “out of date,” and the rights issue was abandoned.

TPG Capital stepped in at 55p per share, only to walk out of the deal last night having seen the books, using Moody’s downgrade of B&B** as an excuse. TPG clearly felt 55p did not accurately reflect the true state that the bank is in.

So today, in a last ditch effort to keep things honest, Standard Life, M&G Investment Managers, Legal & General and Insight Investment, which together own 14.25 per cent of B&B, have stepped in to fund £179 million as part of a £400 million fund raising deal that will also be priced at 55p a share.

When the FTSE opened this morning, there was an initial plunge to about 52p. However, this rebounded almost immediately. Bradford and Bingley’s shares were still trading around the 55.5p mark up until midday (much to the chagrin of FT commentators). After lunch, when the UKs version of the Plunge Protection Team seems to have run out of money, the price has plummeted, currently sitting around 49p.

So the question is, where does this leave the rights issue? In tatters, I would suggest, unless someone steps in to prop it all up a bit. Maybe that’ll happen by the end of the day.

For sure, though … anyone who sold their B&B stock before lunch made the right decision, anyone still holding on didn’t, the group of four rescuers has already lost roughly £30 million, and anyone with cash in an account there may well be finding out very soon just how good the government’s new savings guarantees aren’t.

–

S&P analysts pointed out today that over $3 trillion has been lost from global stock markets in June alone. To put that in perspective, that’s 8.18% of the total value of 52 equity indices lost in a single month.

July isn’t likely to be much better, either. Barclay’s Capital equity strategist Tim Bond is warning of a global financial shitstorm, as a result of an inflation shock. Anyone who has been reading this blog will know that that has been obvious for some time now, so its about time people like Bond began catching up. He is suggesting that US inflation will hit 5.5% by August.

“This is the first test for central banks in 30 years and they have fluffed it. They have zero credibility, and the Fed is negative if that’s possible. It has lost all credibility,” Bond said.

In the meantime, still living in their delusion, earnings forecasts in Asian countries outside Japan are still for 11.6 percent growth over the next 12 months and 15.1 percent growth in calendar year 2009, according to Barclays Capital. Dream on.

Bond again: “[these estimates] are implicitly assuming that inflation will either miraculously disappear on its own accord or that central banks are not going to bother doing anything about it. Neither is particularly believable.”

David Owen at Dresdner Kleinwort thinks we are “staring recession in the face” in the UK. No, really?

“With house prices collapsing and manufacturing orders declining to their lowest level since 1998, can the UK avoid recession? Contrary to expectations, the saving ratio fell in Q1 from 3% to only 1.1%, the lowest figure on record. This helped keep the show on the road, but surely cannot continue, particularly with survey evidence now suggesting a marked deterioration in the labour market,” he spouted.

Another significant piece of wonderful news is that global unemployment rose by 9% in June, news which follows Eurostat’s announcement yesterday that it was revising Eurozone unemployment figures upwards for all months from December to May. The figure for May is now 7.2% and climbing.

There seems to be only one European finance minister talking any sense these days, despite thinly veiled threats from the British financial establishment. The question in my mind remains: when will the commentators and financial anal-ists catch up and realise that globalisation/free trade/fiat money/unbridled speculation/monetarism doesn’t work, and never has? (This links to details of an historical text that you should be able to access from your local library. Michigan University, in common with all members of Athens and JSTOR, does not allow the unwashed masses direct access to their online resources.)

In his book, The Impact Of Science On Society, written in 1952, Bertrand Russell wrote, “At present the population of the world is increasing at about 58,000 per diem. War, so far, has had no very great effect on this increase, which continued throughout each of the world wars … War … has hitherto been disappointing in this respect … but perhaps bacteriological war may prove more effective. If a Black Death could spread throughout the world once in every generation, survivors could procreate freely without making the world too full … The state of affairs might be somewhat unpleasant, but what of it?”

Russell is expressing a view, long held by many who might be considered “oligarchs”, and who, for many generations, have held themselves to be superior to the vast majority of the population of this planet.

The simple fact is that the world is not “too full.” It might feel like it is, sometimes, as our basic economic infrastructure crumbles round our ears, and as poverty forces the people of large parts of the planet into having large families.

Today’s hikes in oil and food prices are not the result of population fuelled demand, unavailability, or as a lack of capability to produce. They are purely artificial, as the result of Policy.

And what is that Policy?

In a word: GENOCIDE.

The population of this planet is staring a dark age in the face. Culturally, we are already there. But in terms of human suffering, the period we are entering now will put all historical genocides in the shade. The policy has been stated many times: reduce the population of the planet from its present levels.

At April’s G7 meeting of finance ministers in Washington, the World Bank issued statements warning of the impoverishment of entire regions of the world as the result of the food crisis, a situation they believe will not change in the coming year.

Robert Zoellick, President of the World Bank, issued a statement at the same meeting, stating that the rise in food prices would be likely to nullify the fight against poverty.

As the saying goes, “no shit, Sherlock!”

These guys can make their statements with confidence, because they know of the activities of speculative kingpin, George Soros, and people like him. For those unaware, Soros was behind the near collapse of the British Pound in 1992.

Georgie has moved on from currency speculation. That form of profiteering only caused economic hardship. Today, he is aiming fairly and squarely at human death. On the 18th June, Goergie told a Budapest newspaper: “Rather than expecting energy prices to go down somehow, we should accept that it must go further up first, for us to be able to solve the [long-term] problem. Prices must go up first so as to encourage people to consume less.”

So Georgie wants us to consume less, which might be fine for you or I, who probably don’t struggle too much for our three meals a day. What happens if you are one of the several billions who only eat once per day? Do they need encouragement to consume less?

Georgie’s mechanism for pushing prices up is typified by his recent aquisition of all the commodities trading and merchandising business of the giant multi-national ConAgra Foods. This aquisition was made by a private investment fund managed by Soros Fund Management LLC, acting as part of a consortium with New York hedge fund Ospraie Management and New York asset manager General Atlantic. The $2.8 billion deal is estimated as the largest acquisition ever by a hedge fund.

The agreement includes 144 ConAgra facilities, located primarily in North America. Renamed Gavilon, the new company provides physical distribution and merchandising of grains, feed ingredients, fertilizer, and energy products; as well as agriculture, energy, and other commodity trading activities, and “risk management services” — i.e., commodity futures derivatives speculation.

It doesn’t stop there. It goes without saying that Georgie is right in there pushing biofuels. Another string to the bow, the biofuels insanity is a strategy that even the greenies don’t want. The ConAgra operations provide “procurement and marketing services” for ethanol and bio-diesel producers, supply chain infrastructure, as well as financial hedging.

Georgie’s not alone of course. Politicians and scientists have all been pushing the insanity that biofuels are the answer to the non-existent Global Warming problem.

And if Biofoolery is not enough, GM is being pushed harder than ever. GM crops are designed to reduce diversity of plant species through cross-pollenation, and more importantly, guarantee control of the food supply chain. The decades long destruction globally of small farming, to be replaced with huge factory farms planting seeds only ever purchased from Monsanto adds to that effect. We even have these two insanities of GM and biofoolery getting it together, with scientists at Michigan State University messing with the genetic makeup of corn to develop a strain that can break down its own cellulose, thus making fermentation easier, and biofuel production more efficient.

The problem for the corporations, at least in the short term, is that the risk of cross-pollenation makes GM unpopular. So until the use of GM is universally accpepted, they need to do something about that. Just another of the “conincidences” in the world, is Colony Collapse Syndrome. Bees, the little stinging insects that we depend upon to pollenate our food supply, are dying out in unprecedented numbers. Is it really a coincidence that this happens within a few years of the development of GM crops, or that certain GM crop manufacturers also happen to belong to a cartel of pharmasutical/chemical/insecticide manufacturers and have had their products banned because they are harmful to bees?

Unfortunately, they’re never too far away from releasing another product.

It can’t get much better for them, can it? Kill the bees which cause cross-pollenation, but that are also needed for the pollenation of the regular food supply. Result: global food supply crisis, and calls for GM crops which don’t need pesticides.

Increasingly now, politicians are coming out and openly pushing the Policy. For example, the heads of the World Bank and IMF met with the finance ministers of the Americas (or, at least, those that turned up) on the 23rd and 24th June. Finance ministers listened to lectures from the IMF’s Dominique Strauss-Kahn and the World Bank’s Robert Zoellick, on the dangers of giving in to the “temptation” of subsidising food and fuel and restoring protectionism, because such policies might fuel “expections of inflation.”

Delegates at the meeting were greeted with a World Bank report on the impact of rising food prices on the Americas. The report asserted that:

• food prices are “relatively low,” by historical standards
• “high food prices are here to stay”
• the cause of the high price of food is rising consumption in developing countries.

Recommended measures included “food for work” programs, and targetted cash hand-outs for extremely poor families who meet specified conditions. Any general national subsidy program, however, would be dangerous, because “it could spur inefficient consumption of these foods by non-poor households.”

The IMF’s Dominique Strauss-Kahn endorsed the World Bank report, and added a warning that governments must stop policies which are encouraging “domestic demand growth … Social protection should not be used to justify a retreat into protectionism, or a delay in measures to cool domestic demand.”

In the film “The Third Man,” by Greame Greene, there’s a classic piece of dialogue spoken by Orson Wells which Greene claimed he didn’t write, but that Wells had added. It fairly well sums up the attitude of global leaders these days. Wells’ character, Harry Lime, was a black marketeer selling corrupted stolen drugs, resulting in many deaths. The scene has Lime and his friend, Holly Martens, at the top of a Vienese ferris wheel, as he attempts to justify his activities.

“Look down there,” he said, “Would you feel any pity if one of those dots stopped moving forever? If I offered you twenty thousand for every dot that stopped - would you really, old man, tell me to keep my money? Or would you calculate how many dots you could afford to spare? Free of income tax, old man? free of income tax. it’s the only way to save money nowadays.”

According to my MP, in a letter to me, there is no hyperinflationary pressure in the global economy. He should know … he’s on David Cameron’s Shadow Treasury team.

Oh dear. Apparently he doesn’t know, because he’s wrong.

Commodity inflation is out of control. Almost all commodity indices were up over 12% in February, and up over 18% since the start of 2008.

Taking a longer term view, wheat futures are 120% above 12 months ago, corn 20%, soybeans 80%, rough rice 55%, and platinum 80%.

The question is, where is the pressure on commodities coming from?

The obvious first point to make is that since most commodities are denominated in US dollars, that the collapse of the value of the dollar clearly has had an impact. However, the dollar is only about 4% lower against Sterling compared to 12 months ago.

Globally, there is nothing to worry about with stocks of crude oil, petrol and natural gas, so the fact that OPEC isn’t doing anything to increase production further to ease price pressures is no surprise.

Metals, on the other hand, have falling stock levels. The same goes for soft agriculturals and grains, which, sadly, have the added pressure of bio-foolery to cope with.

Finally, meat, is directly affected by the price of the grains necessary to grow the livestock.

However, the main pressure on commodity prices is coming from the clear realisation that the global financial system is in an unrecoverable mess. When complex financial instruments are no longer seen as good places for long term investment, and when the collapse of those instruments filters down to traditional paper assets, such as equities, then real physical goods is where the money goes. People seem to be remembering that the economy is physical!

$150 billion has been pumped into commodities markets since the start of the year by fund managers hedging against the (insane) explosive growth in the world’s money supply. The continuing falls in the dollar, along with “difficult” fixed income and equity market conditions, are compounding this effect.

So don’t expect to see commodity inflation go away any time soon. Goldman Sachs predict $200 a barrel oil in the not too distant future. And so, I have a message for David Gauke: pull your head out of your ass. Hyperinflation is here, and its going to hurt like buggery.

So have a guess what kind of company the BBC showcased as the height of British manufacturing talent likely to be affected by the falling dollar as a result of the Fed’s insanity today.

It’d have to be something really impressive, no?

Eh, no.

Whistles.

Yes, the best example the BBC could find of a British engineering firm likely to be affected by the plummeting dollar was a feckin’ whistle factory.

Oh well.

Now that the new year has begun, banks are having to open their books to external auditors. Although many banks have admitted to huge losses during Q4 of 2007 already, the auditors seem to be finding that these admitted figures don’t tally with the reality of the balance sheets.

Reality is dawning that bank losses extend beyond the sub-prime mortgage crisis. A new crisis has been identified - that of consumer spending and its associated credit card debt. Now that home owners are no longer able to pull equity out of their properties to support their corrupt lifestyles, they have stopped spending. While this is bad for our “consumer” economy, it is worse for the banks, as home owners begin to default on credit card repayments.

The Washington Post yesterday quoted Joe Brusuelas, chief economist of the economic research firm IdeaGlobal, who said “We haven’t even scratched the surface of what the losses [in the banking sector] will be. I don’t think we’re anywhere near the end. Rather, we’re still at the beginning of this.”

So, then, we finally have two aspects of the banking disaster in the public eye. We could wait a little longer, until the reality of the unpayability of hedge fund/derivative debt, LBO fund debt, monoline insurance debt and national debt begins to bite.

We could wait and see. Or, we could recognise the truth now … that we are already in a recession. We are heading for a depression!

This needs to be dealt with now. But how? And by whom? The last time there was a global economic depression, this was the commentary in the news**:

“Stock prices have reached what looks like a permanently high plateau.” - Irving Fisher, Oct. 17, 1929

“There will be no interruption of our permanent prosperity.” - Myron E. Forbes, President, Pierce Arrow Motor Car Co., January 12, 1928

“I have no fear of another comparable decline.” - Arthur W. Loasby (President of the Equitable Trust Company), quoted in NYT, Friday, October 25, 1929

“In most of the cities and towns of this country, this Wall Street panic will have no effect.” - Paul Block (President of the Block newspaper chain), editorial, November 15, 1929

“I cannot help but raise a dissenting voice to statements that we are living in a fool’s paradise, and that prosperity in this country must necessarily diminish and recede in the near future.” - E. H. H. Simmons, President, New York Stock Exchange, January 12, 1928

“…despite its severity, we believe that the slump in stock prices will prove an intermediate movement and not the precursor of a business depression…” - Harvard Economic Society (HES), November 2, 1929

“For six years American business has been diverting a substantial part of its attention, its energies and its resources on the speculative game… Now that irrelevant, alien and hazardous adventure is over.” - Business Week, November 2, 1929

“This crash is not going to have much effect on business.” - Arthur Reynolds, Chairman of Continental Illinois Bank of Chicago, October 24, 1929

“Financial storm definitely passed.” - Bernard Baruch, cablegram to Winston Churchill, November 15, 1929

“Hysteria has now disappeared from Wall Street.” - The Times of London, November 2, 1929

“… a serious depression seems improbable” - Harvard Economic Society, November 10, 1929

“This is the time to buy stocks.” - R. W. McNeal, market analyst, New York Herald Tribune, October 30, 1929

“Unless we are to have a panic — which no one seriously believes, stocks have hit bottom.” - R. W. McNeal, October 1929

“[1930 will be] a splendid employment year.” - U.S. Dept. of Labor, New Year’s Forecast, December 1929

“The former great periods of prosperity in America averaged eleven years. On this basis we now have three more years to go before the tailspin.” - Stuart Chase (American economist and author), NY Herald Tribune, November 1, 1929

Whether or not the majority of people believed what they were reading, they didn’t act. Then it was too late …

“All safe deposit boxes in banks or financial institutions have been sealed… and may only be opened in the presence of an agent of the I.R.S.” - President F.D. Roosevelt, 1933

Reading down through these quotes, they don’t seem so different in substance to those of today. The question is, then, are we likely to see the bankers coming up with a plan, or their lackeys in Parliament?

The world’s economic woes can be fixed, but only if we act. The solution can only come from us - the people who have average household incomes or less. We are the (increasing) majority, and will be suffering most in the coming months and years. We need to be organising around principles to maintain social stability and the general welfare of the people of the nation.

We must require action from our elected representatives which will give absolute priority to the continuity of the essential functions of government (foreign wars, removal of civil liberties are not essential!), and which will give equal priority to maintaining the function of basic economic infrastructure, agriculture, manufacturing, and the distribution of goods and services essential for the lives of people and households.

There must be a moratorium on home repossessions. Remember, it’s going to be people renting properties who will be hardest hit by repossessions, as the landlord allows his buy-to-let mortgage to go to the wall first, in order to try and keep the primary home.

This should go hand in hand with an absolute guarantee of the bank deposits of individuals and small businesses, and protection of the high street bank branches which are necessary for a functioning economy. Any section of a bank (or private company, for that matter) involved in speculative activity should be offered no protection whatsoever.

The National Health Service must be maintained.

There must be an end to the so-called “independent” central banking system. Central bank issued currency must be replaced with government issued credit, which will primarily finance projects which develop our basic economic infrastructure: water management and general sanitation; mass transport of freight and passengers; power, with primary influence on nuclear and in the future, fusion; basic urban infrastructure; national and international mass systems of education, science and healthcare. Large scale, long term investment in these improvements in basic economic infrastructure supplies the foundation upon which the potential for real economic growth depends, and in contrast to the present solution offered by the central banks of dropping multi-billion pound loans on the financial system, financing these projects in this way is non-inflationary.

Generally, the rule should be that Government should stay as far out of the day to day affairs of people and small businesses as possible.

So don’t sit on your hands. Organise locally. Build up your group of collaborators, and reach out to others of a similar mind. Make sure that your MP recognises that he works for you, not for the financiers and cartels. Make sure that your MP realises that you will not tolerate anyone who works in the hope of a future payoff.

Time is short, but there is still time.

–

** Thanks to contracycle at the Politics and Current Affairs forums for this.

Yesterday evening’s ITV news reported that the majority of British people see David Cameron as more of a leader than Gordon Brown. This view is echoed by the Telegraph, which seems to be leading the anti-Brown campaign these days.

The Telegraph, that City of London mouthpiece, wants to get rid of the “weak kneed” Fabian, because they see Cameron as the “tough guy” who will steer Britain through the austerity needed to deal with the collapsing economy, and push imperialist provocations abroad. In an effort to bolster Cameron’s chances by questioning Brown’s capabilities when the going gets tough, the Telegraph’s Ambrose Prichard has been amazingly honest about the state of the economy, with a steady stream of doom and gloom articles in recent weeks and months.

Prichard’s honesty is echoed from time to time by other City of London mouthpieces. Jacques Attali, writing on the 3rd of January in the French financial weekly, L’Express, said “It is the whole world which seems to be going over the precipice … as if a collision of trains going at full speed was being prepared. As if, in a vortex emptying the bottom of a bathtub … [T]here is no stability in sight for the global economy.”

He went on, “Beyond the subprimes, many other debts are circulating and no one knows how the banks will be able to honor them: those of hedge funds, of monoline insurers, of LBO funds, and of holders of credit cards, which form a pyramid amounting to much more than the bank’s own funds, which would have been closed a long time ago, had the central banks not agreed to refinance them all without restraint.”

However, unlike Prichard, Attali dared to identify the link between the proceeding financial collapse and the eruption of chaos in an increasing number of nations of this planet. “That the murder of an opposition leader of a country of the South [Pakistan] would so gravely shake the Asian financial markets, and with them those of the entire world, reveals the extreme fragility of the planet.”

Attali is not the only commentator to notice a link between financial collapse and increasing chaos. In his homily for the Feast of Epiphany, the Pope said “It cannot be said that globalisation is synonymous with world order, it is the opposite. Conflicts for world order and the pillaging of [natural] resources, water, and raw materials make the work of those who strive for a just and fair world, all the more difficult.”

And in South Africa, Thabo Mbeki’s mother, wrote in a letter to the South African people, published in the Johannesburg Sunday Times. “The anarchic tendencies that have taken root in the ANC lately,” she wrote, “coupled with the blatant disrespect towards the highest office in the land, raise high suspicions of a Third Force in operation … South Africa wake up. Zemk’iinkomo Magwala Ndini!” (The cattle are being stolen, you bloody cowards!)

The question is, who is stealing the cattle?

Since the summer, it is estimated that $1.5 trillion in bank assets have been wiped off the books, and an equal amount of equity has evaporated on world stock markets. The idea that the crisis can be “solved” by hyperinflationary injections of cash is insane. If anything the crisis is only going to get worse, with a collapse of the insurance sector and a popping of the derivatives bubble.

And it is in this context that the globally increasing levels of assassination, ethnic cleansing, tribal conflict and general chaos, can be understood. None of these is a local or regional event. They are all part of a single strategy aimed at one objective: the destruction of nation states resulting in the consolidation of the raw material wealth of the planet, in the hands of City of London based private cartels - today’s British Empire.

It’s not hard to see the shape of the “invisible” British Empire if you shine a light in the right places:

• Virtually all the offshore financial centres that dominate this globalised, deregulated planet, are located in British or Dutch colonies, like the Cayman Islands, the Dutch Antilles, the Isle of Man, the Grand Bahamas, etc.

• Britain has a history of working closely with the raw materials cartels, through the private mercenary industry, particurly Executive Outcomes, Sandline, Defence Systems Ltd. These cartels already own the lion’s share of the precious metal wealth of Africa, Australia, and South America.

• British counterinsurgency methods, pioneered during the 18th and 19th Century heyday of the British East India Company, are still practiced on a global scale, by British intelligence operatives and “former” officers, now operating under private cover. In fact, it could be argued that the privatation of large sections of the Ministry of Defence and the secret services in recent years is just a reversal of the nationalisation of the British East India company and its intelligence organisation begun by Lord Shelburne.

• The Commonwealth, made up of 53 nations spanning the globe, accounting for one-fifth of the land mass of the Earth, and a very high percentage of its strategic resources and population. Though nominally an alliance of independent states, the Commonwealth was founded in the late 19th Century as a perpetuation of the British Empire.

“If you’re looking for the origins of Kenya’s ethnic tensions, look to its colonial past,” wrote Africa specialist Caroline Elkins in the Washington Post on the 6th of January. “Far from leaving behind democratic institutions and cultures, Britain bequeathed to its former colonies corrupted and corruptible governments … Added to this was a distinctly colonial view of the rule of law, which saw the British leave behind legal systems that facilitated tyranny, oppression and poverty rather than open, accountable governments. And compounding these legacies was Britain’s famous imperial policy of ‘divide and rule,’ playing one side off another, which often turned fluid groups of individuals into immutable ethnic units, much like Kenya’s Luo and Kikuyu today … We are often told that age-old tribal hatreds drive today’s conflicts in Africa. In fact, both ethnic conflict and its attendant grievances are colonial phenomena … Britain was determined to protect its economic and geopolitical interests during the decolonisation process … It’s not hard to discern similar patterns … in other former British colonies such as Pakistan, Zimbabwe and Iraq that share similar imperial pasts.”

It is the apparatus of the British Empire that has been unleashed, all around the globe, to foment chaos and provoke warfare. Global assymetric warfare, in combination with a global financial and economic collapse, is the last phase in the great game which will bring about the New World Order.

Yesterday brought confirmation from JR Tokai that they would be proceeding with plans to build the first long distance maglev train between Tokyo and Nagoya, despite the lack of government support. The line is expected to be in operation by 2025.

Tokai originally announced the plans for the line in April 2007. “The reason why the plan has not moved even a bit is because the government isn’t able to bankroll it,” railway president Masayuki Matsumoto told the Nikkei business daily.

The new line will run in parallel with the Shinkansen bullet train, a conventional high-speed rail line which will need replacement in the coming decades.

Japan’s maglev technology set the international speed record of 581km/h in 2003. This new maglev should run at about 500 km/h, according to Tokai. The Chinese maglev, using the German Transrapid system, runs at about 430 kph over a 30.5-km route.

Tokai believes that the new line will be profitable enough to pay off the debt necessary to finance the project within 10 years of the service starting.

In the meantime, the USA continues to demonstrate that it would rather plough billions of dollars into destroying itself and other nation states, than invest in modern infrastructure, as Congress axed its rather pathetic $149 million contribution to the international fusion reactor project, ITER.

This is the second time that the US has removed itself from the project, the last time between 1999 and 2003.

While I hope that the US will come to its senses and invest in modern, high energy density technologies again in the near future, I fear the pressure to invest in windmills instead will be too great.

Coming on top of many years of underinvestment in food production, Al Gore’s push for ethanol based fuels is having a devastating effect on world crop reserves.

It is projected that US wheat stocks will fall to a 60 year low of 7.64 million metric tons, for the wheat marketing year of 2007-2008.

U.S. soybean production will be 5.06 million metric tons, a 68% decline in a single year. This reflects the drastic shift of U.S. soy production to corn for biofuels.

An Illinois Agriculture Extension Service economist, David Good, wrote an article entitled, “Can U.S. Farmers Plant More Corn, Soybeans and Wheat?” on the 18th of December in agricultureonline.com, concluding that “Early projections for 2008 suggest that U.S. harvested acreage of corn, soybeans, and wheat all need to be larger than in 2007, by a total of about 7.4 million acres. With rising prices of other commodities [fuel, fertiliser, electricity, chemicals] and limited amounts of uncultivated acreage available, it is difficult to see how such an increase can occur.”

In Canada, the Vice President of the Agriculture producers Association of Saskatchewan, Don Connick, warned in DiscoverMooseJaw.com yesterday, “We have struggled with low grain prices for years while our costs of production have continued to rise. Many grain growers have gone out of business, taking off farm jobs, or seriously eroding their equity just to stay in business.”

As as result of these drops in production, as well as insane hedge fund speculation, inflation is spiraling upwards. I’ve discussed rising food prices in Europe recently. In many Central Asian and Caucasus states, the inflation rate has hit double digits. In Kyrgyzstan it reached 20.1% during the January-October period in 2007. Although Uzbekistan denies it, the International Monetary Fund claims that Uzbekistan’s inflation rate is now 12.2%. In Kazakstan, inflation was 13.4% for the first ten months of 2007.

In Georgia, inflation is at 11.2%. It’s about the same in Azerbaijan. Both Kyrgyzstan and Tajikistan rely on wheat imports from Kazakstan, which has decided it’s more lucrative to export surpluses to China and India instead. Reports from Tajikistan, where inflation is running at 14.9%, say the price of a 50 kilogram bag of flour has risen by 20% over the last year. In Uzbekistan, which is scheduled to hold a Presidential election tomorrow, regional media outlets have reported that the price of flour has risen between 10% and 37% depending on quality.

To add insult to injury, a wind borne fungal disease - a new wheat stem rust strain - has appeared in Yemen, having managed to cross the Red Sea, from East Africa. This disease is now in a perfect place to attack the Indian subcontinent where 25% of the world’s wheat is grown. This disease is highly virulent, a strain having destroyed 40% of the spring wheat crop in North America during the 1950s.

In Pakistan, India, and Bangladesh, 300-400 million people survive on wheat based diets.

Global food prices are out of control.

In Chicago early trading today, the new benchmark price of wheat for March delivery rose 30 cents to $10.09½ a bushel, more than 7.5 per cent higher than the expiring December contract of $9.39 and first time it has ever traded over $10 a bushel. The December contract expired on Friday and the March 2008 contract became the market’s benchmark today.

New benchmark prices for corn are also more than 5 per cent higher than previously. Corn for March 2008 rose to $4.43¼ a bushel, the highest level in 11 years for a front-month contract.

The benchmark prices for soyabeans delivered in January rose on Friday to a fresh 34-year high of $11.92¼ a bushel.

Rice, also for January, has jumped to an all-time high of $13.310 a hundredweight.

In the UK, food inflation was already running at an annual 5.1 per cent in October and analysts expect higher food prices to push overall inflation up for November. The UK November figures are due to be published tomorrow.

The Italian Central Statistics Institute recently released figures which show that in October alone, bread prices increased 10.3%; pasta, 6.4%; milk, 5%; poultry, 7.3%, fruit, 5.3%. If price increases in August and September are added in, Italian consumer associations calculate an average increase of €400 for the average family food bill at the end of the year

And in Germany, between November 2006 and 2007: bread increased 5.4%; butter 46.1%; Camembert cheese 10.4%; eggs 6.2%; yogurt 11.1%; milk between 22.9% and 27.9% (depending on the category); noodles 6.2%; fruits 3.3% (but green paprika even 21.4%!); curd cheese 37.2 %; wheat flour 19%; rice 6.6%; salt 4.7%.

Bill Lapp, analyst at US consultancy Advanced Economic Solutions, told the FT today: “We’ve already seen food prices increase this year at their fastest pace since the early 1980s, but the full brunt of those increases will begin in earnest in 2008.”

In September 2007, I wrote to my MP, David Gauke, who sits on the Conservative Party Shadow Treasury team, expressing my concerns of the even then obvious economic collapse and inflationary pressures. He replied:

“You raised a number of important issues … First you raised the prospect of ‘the collapse of the global economic system’ and the emergence of hyper inflation. However, as far as the UK is concerned, most commentators seem to believe that inflation will remain around the 2% CPI target and, if anything, the recent turbulence in the financial markets may result in CPI inflation falling below this figure. My personal view is that there are concerns about inflation in that Gordon Brown’s fiscal policies have made the Bank of England’s job more difficult and that the interest rate cut in August 2005 was a mistake and that subsequent corrective action was necessary. However, I do not believe that hyper-inflation or the collapse of the global economic system is imminent.”

Well, Dave, all I can say is, oops …

The London travelling public’s free morning rag, The Metro, reported today that this month’s nationwide 3.2% drop in house prices was as a result of people trying to get their properties sold before the requirement to provide a Home Information Pack.

Contrary to most so-called experts predictions, London’s drop in prices was a massive 6.8%.

“The substantial drops in asking prices are further confirmation of the underlying trend of more sellers re-adjusting their prices downwards to try and tempt buyers in deteriorating market conditions,” the BBC reports Miles Shipside, the commercial director of Rightmove, as saying.

While it may be the case that HIPs have had some impact, it’s ridiculous to suggest people in London would choose swallow an average £40,000 house price drop just so they could sell their house quickly enough to avoid paying the few hundred pounds for one.

People are constantly telling me that London will be least affected by a house price correction because there will continue to be huge “demand” for housing there. If commentators could be honest for once, they would be reporting that demand has fallen away as a result of a lack of available finance. It is irrelevant that people will continue to need homes in London - that’s only half of the “demand” equation required to support the market. If the finance isn’t available, the market has only one way to go.

Auditors are in a difficult position in these post-Enron days, with the demise of Arthur Andersen on everyone’s mind. If they refuse to rubber-stamp the banks’ fictitious valuations, the banks will collapse, but if the auditors allow the fiction, they run the risk of being severely punished for malfeasance.

So Peter Spencer of Ernst & Young’s Item Club argues that the British “government must suspend a set of key banking regulations at the heart of the current financial crisis, or risk seeing the economy spiral towards a future that could ‘make 1929 look like a walk in the park’.”

The regulations mean that banks forced to take off-balance sheet assets from troubled structured investment vehicles on to their books had little choice but either to raise money from abroad or cut back dramatically on their spending, he said.

Spencer tries to blunt the clear meaning of his statement, by claiming that the banks are refusing to lend to each other, not because they are insolvent, but rather that they are being prevented from lending to each other because the regulations are overly restrictive. The regulations he blames are the capital requirements set by the international Basel agreements, which require the banks to have an 8 percent capital reserve, which Spencer said should be cut to about 6 percent.

He dismissed as “window dressing” the move announced by central banks around the world this week to pump extra money into the money markets and increase the type of collateral they will accept in return, in an effort to get them running again.

“This won’t get to the core of the problem: the fundamental lack of collateral. As these problems drag on, the consequences for the macro-economy of not relaxing [the Basel regulations] are unthinkable.”

In reality, its absurd to suggest that a mere 2 percent reduction in capital requirements would head off a crisis that would make 1929 look like a “walk in the park.” What the auditors are really saying is that, as the rules are currently constituted, the banks are already insolvent, and that the capital requirements must be lowered so that the auditors can certify their books for one more year.

James Turk, founder and editor of GoldMoney, was quoted in the Asia Times yesterday as saying, “pleas to the Federal Reserve by US investors to lower interest rates are no different than those made to the Reichsbank to create more currency to make up what was being lost to inflation. The dollar is headed the same way as the doomed Reichsmark, and Fed chairman Ben Bernanke is taking actions that are basically little different from those taken by the head of the Reichsbank. The clear conclusion is that the dollar is headed the same way as the Reichsmark. Failing demand is eroding the purchasing power of the currency, and the central bank responds to it by creating more currency units — ‘printing paper’ in the case of Reichsbank and ‘adding liquidity’ in the case of the Fed. They are in fact exactly the same thing.”

Well, that depends on what the banks will do with it, doesn’t it?

“Investors and hedge funds are scrambling to buy risky assets again, renewing bets on the yen ‘carry trade’, piling back into equities and pushing up commodity futures,” Ambrose Evans-Pritchard wrote in the Telegraph yesterday.

So there you have it. Stupid speculation got us here, and the first thing on everyone’s mind when they get more cash, is more stupid speculation.

As a result, inflation is here.

Or is it? The European Central Bank issued a report yesterday claiming that inflation in Euroland is at 2.6%, and that consumers’ perception “might have been magnified at the current juncture by the extensive media coverage of [food] price increases in some countries.”

In fact, consumers’ perception of inflation has been magnified by the reality of food price increases. For example, the Italian Central Statistics Institute has released figures which show that in October alone, bread prices increased 10.3%; pasta, 6.4%; milk, 5%; poultry, 7.3%, fruit, 5.3%. If price increases in August and September are added in, Italian consumer associations calculate an average increase of €400 for the average family food bill at the end of the year, on top of the increased fuel bills, mortgage or rental rates, and utility bills. It’s really not misrepresentation to exclude food and energy prices from the headling inflation rate, is it?

But then again, maybe my perception of the ECB’s lying is just magnified at the current juncture by extensive media coverage …

In a last ditch attempt to breathe life into the dead patient before heading to the pub for a final hoorah, the world’s central banks yesterday announced huge liquidity injections in the form of loans to the national banks. The BBC used the word “unprecedented” in its evening news reports, and carried a comment from an “expert,” who explained they were just adding “some oil to the engine.” The inflationary effect of this move is already being felt, as oil jumped back above the $94 per barrel mark.

Back in June, when lenders seized and tried to sell collateral from two failed Bear Stearns hedge funds, it was quickly discovered that the collateral could be sold for nowhere near the value the funds carried the assets at on their books, with buyers offering a reported 30-50 cents on the dollar. The lenders were forced to cancel the sales, not because of the losses they would take on the transactions, but because of the impact on the market as a whole of such an action.

The central banks’ actions today are designed to prevent such sales on a far wider scale. It is market confidence that the banks are trying to prop up. “Sentiment has been deteriorating fast in the global financial markets,” a source told Reuters. “This operation is less about liquidity and more an attempt to restore confidence.”

Speaking of confidence, I was chatting to some colleagues yesterday evening, one from New York. He commented on the behaviour of investors in the US, who, despite the clearly collapsing economy over there, continue to behave like nothing is happening. The stock US indices continue to climb. It occurred to me that its all very reminiscent of the over confidence of dot com investors just before the bubble popped.

Of course, there are so many bubbles in the process of popping right now that will make dot com seem like a gentle stroll in the park, and I really wonder if anyone is really dumb enough to believe that the central bank move will have any positive effect whatsoever.

The longer this goes on, the harder it’s going to be. We need to recognise that the patient is indeed dead, and that the only way out of this mess is through a new Bretton Woods style economic summit, and a new financial system.

Without the nutters that have run the system in the last 40 years or so.

China clearly understands that the key to the success of a modern nation state lies in top class basic economic infrastructure. They plan to lay 4000km of new track and electrify 3000lm of existing track every year until 2010, as part of a plan to build 19,800km of new railway lines, modernise 15,000km of existing railway lines, boost passenger train speed and increase the load of freight trains.

To finance this part of the plan, they have raised more than Rmb45bn ($6.1bn) in their biggest ever bond deal. The domestic bond issuance, which comprises fixed rate seven-year, 10-year and 15-year bonds, was increased by Rmb10bn on the back of strong demand from investors.

With its economy growing at 11 per cent and its debt market growing faster than any other country in the region, China also appears to be largely unaffected by the credit squeeze that has seen a sharp reduction of bond and loan issuance in Europe and the US.

I wonder why that is, eh?

Could it be because the money they are borrowing is backed by real physical infrastructure, rather than worthless pieces of paper based on hyperinflated mortgage and derivatives markets?

China is one of only a few countries working to develop Maglev technology, although the penny does seem to be dropping elsewhere.

Evoking memories of the Great Depression, the spectre of thousands of people applying for a few jobs has returned to the USA.

The Cleveland Plain Dealer reports that over 6000 people turned up at a new Wal-Mart branch in Cleveland’s Steelyard Commons, with only 300 jobs on offer.

Mia Masten, Wal-Mart’s director of corporate affairs, Midwest division, went on to tell the Plain Dealer that in Chicago recently, 25,000 and 15,000 people applied for a few hundred jobs at two Wal-Mart stores there!

Wal-Mart isn’t exactly the kind of place people willingly seek jobs if there’s somewhere better to work. Amy Hanauer, executive director of Policy Matters Ohio, a policy research organisation based in Cleveland, said these ratios are reminiscent of bread lines in times of great poverty. “That’s Depression-era kind of imagery,” she told the Plain Dealer.

“You can’t have an economy that works that way,” Hanauer said. “It speaks to the need to generate a different kind of employment in Cleveland.” She noted that Ohio has a legacy of manufacturing. “The question is, how can we reinvigorate that?”

I … can’t … imagine.

Well, they didn’t do it yesterday after all. Instead, the ECB waited until today to make a huge injection of cash to help bailout the rapidly sinking European banking system - €178 billion to be exact.

The banks are due to repay this money in 7 days. Unfortunately, the ECB has found that banks have been a tad reluctant to do that in the recent past. So it has placed the banks on the naughty step and tried to reduce such liquidity injections - a strategy which, since the system is deceased, has not worked so well.

Last week, the ECB provided €27 billion in overnight money, but failed to collect €10 billion owed from previous loans. The banks involved begged like desperate gamblers that they still needed the money.

Should we expect a half-a-trillion euro bailout next week?

The economic news continues to get better and better. City of London speculators are betting, via some new tradeable derivatives contracts, that the UK housing market will follow the US, with a drop of 7% in the coming year.  The FT is reporting that these contracts have seen a surge in trading volumes in the last few months. In other words, its a certain bet.

In the meantime, the so-called “credit crunch” continues apace. The European Central Bank is likely to apply more inflationary pressure today, by injecting an unprecedented amount of previously non-existant cash into European money markets. Interest rates in short-term lending markets have risen at a pace not seen since August, as investors shy away from risk and banks become increasingly wary of lending to one another, according to the Wall Street Urinal.

Former US Treasury secretary, writing in todays FT, says: “The odds now favour a US recession that slows growth significantly on a global basis.”

As I’ve said before: no shit, Sherlock?

The European market for trading “Covered Bonds” was shut down yesterday afternoon for at least a week, because of unprecedented volatility. Covered Bonds are asset backed securities, which are considered to be super-safe, because they are not only secured against highly rated mortgages, but also give the investor a claim against the issuer.

European banks were ordered by the European Covered Bond Council to cease trying to market these bonds to each other, at least until Nov. 26. Reuters reports that this action became necessary after the price of buying derivatives contracts to insure these securities against default, shot upwards, in extremely volatile conditions. “In light of the current market situation and in order to avoid undue over-acceleration in the widening of [default] spreads,” the Bond Council said it had to act.

This is a big escalation in the global financial crisis. The covered-bond suspension hits Europe’s banks in particular, because this trillion-dollar market is dominated by German banks such as Deutsche Bank. Covered bonds are one of the oldest, largest, and supposed-to-be safest parts of the bond market, even considered “surrogates for government bonds.” Yet now, they cannot even be traded by banks.

Don’t worry, though, it’s just a “slow down.” There’s no collapse, and it’s certainly not systemic. Eh?

The cost of commercial leases is plummeting in the City of London. The big banks are putting their requirements for large lets on hold, and are opting for short term, 18 month leases, instead of the normal 10 to 20 years.

This is being seen as preparation for big layoffs at the major banks as the collapse of the financial system continues. This will hit rent prices and therefore property prices. City property prices are believed to have fallen already by 5 or 10% since spring, according to a report in The Times. A number of highly leveraged speculators who have in the last two years bought properties on yields that were below the cost of debt, based on the idea that price would go up, are all out of the business now.

HSBC, which sold its own office building in the Canary Wharf for 1.1 billion pounds, in fact loaned 800 million pounds to the Spanish real estate company that bought the building. Unfortunately for HSBC, they’re still sitting on the debt, and haven’t been able to sell it on thus far.

Yesterday, the Fed pumped another $47.25 billion into the markets, the biggest injection of cash since just after 11th September 2001. The Fed is run, of course, by Ben Bernanke. Ben’s a nutter, just like Mervyn King. In 2002, when the word “deflation” began appearing in the business news, Bernanke gave a speech about deflation. In that speech, he mentioned that the government in a fiat money system owns the physical means of creating money.

He went on to say that control of the means of production for money implies that the government can always avoid deflation by simply issuing more money. He referred to a statement made by another nutcase, the late Milton Friedman, about using a “helicopter drop” of money into the economy to fight deflation. After that speech, Ben got the nickname “Helicopter Ben.” In a footnote to his speech, Bernanke noted that “people know that inflation erodes the real value of the government’s debt and, therefore, that it is in the interest of the government to create some inflation.”

Well, he’s certainly keeping his word.

The Bank of England really is a scam on the UK taxpayer. We borrow money from a bank that we own, pay interest on it, and only get 25% of the profits back. And then, as soon as Mervyn King’s banking buddies get into trouble through greed and wrongheaded stupidity, we bail them out using loans underwritten by the taxpayer.

Darling has admitted in a letter to Vince Cable, that we, the taxpayers, will likely lose money on the loans extended to Northern Rock. Why? So that the Chief Executive can get his big bonus payoff when the private equity buyout comes off?

If it comes off.

The private equity firms aren’t going to buy a lemon. Oh no. They’ll make sure the taxpayer carries the can, so they can buy up what remains of the business in the January sales.

Yesterday, King gave signals that the Bank would probably be reducing interest rates in the new year, which resulted in further devaluation of Sterling against the Euro. That’s despite acknowledging that inflation will continue to accelerate. How does that work, then, Merv?

What a circus!

As the global financial system disintegrates at an ever accelerating pace, the Federal Reserve finds itself in an impossible position. In an analysis in today’s Financial Times, senior Barclay’s Bank economist, Tim Bond, says that on one hand, “U.S. monetary easing [that is, the Fed's two emergency rate cuts in the last two months] is provoking an almost immediate acceleration in inflation” worldwide. The reason, Bond notes, is that the dollar’s fall is so steep already, that Asian (and Ibero-American) central banks are having to keep their interest rates low, or lower them, and to print more of their own currencies in order to buy dollars and slow down the dollar collapse: The net effect, is that the inflation the Fed is creating is pumped directly into those Asian economies, forming speculative bubbles on top of their export growth. So the Fed is threatening these economies with the same super-bubble collapse which has already hit the U.S., Britain, Spain, etc.

But, says Bond, the Fed is under tremendous pressure to do more of the same, because of the credit collapse and bank crisis. So it is pulled hard, in opposite directions, simultaneously.

Inflation is becoming harder to hide for the UK as well, hitting 2.1%, above the government’s target of 2%. So the BoE is in a similar dilemma as the Fed, with inflation pressures increasing on one hand, and a collapsing economy on the other. What’s a banker to do?

In the meantime, Deutsche Bank says that bank losses from the continuing collapse of the subprime mortgage securities could eventually reach $300 billion to $400 billion worldwide. Wall Street alone will be forced to write down as much as $130 billion, with the rest of the losses coming from smaller banks and investors in mortgage-related securities. Already last month, Citigroup Inc., Merrill Lynch & Co. and Morgan Stanley each announced write-downs in the ten’s of billions of dollars, led by Citigroup with write downs of more than $40 billion. The author of the report, Mike Mayo, expects total write downs at HSBC, UBS AG, Royal Bank of Scotland Group Plc and Barclays Plc to be “ballpark $5 billion or so” each. This could cause major problems for banks– HSBC, for example, has a $45 billion mortgage services business, and only $2.1 billion in loss provisions. Mayo apparently makes no estimate of what Deutsche Bank’s own losses might be.

And now, today’s “stating the bleedin’ obvious awards.”

Reuters reported yesterday that unsold goods are piling up in warehouses as the housing meltdown and soaring oil prices strain consumers, “raising fears that already glum fourth-quarter growth prospects may tip toward recession.”

The Independent reported today that Blackstone’s president warned that the sub-prime crisis on Wall Street was getting “deeper, darker and scarier” yesterday as the US private equity firm posted a loss for the third quarter, hit by a fall in real-estate revenues and charges related to its initial public offering.

And the NYSun reported today that Jim Melcher,a Wall Street “superstar” who runs Balestra Capital Partners, says he’s “worried about a recession. Not a normal one, but a very bad one. The worst since the 1930s. I expect we’ll see clear signs of it in six months with a dramatic slowdown in the gross domestic product.”

So there you have it. Not a pretty picture, is it. Its not too late to sort it all out, but we have to recognise that the system is gone. There is no solution within the present system. Its time to act. Call on your elected representative to encourage his government to organise a new Bretton Woods type conference. Today.