Hailstorm swamps one small town in 6ft drifts - and it's still only October

These astonishing scenes are the aftermath of a deluge of hailstones that buried a town in a river of ice.

Ottery St Mary, in Devon, was plunged into chaos by the storm in the early hours yesterday.

First, the area was battered by an astonishing 12in of hail in just two hours. This blocked drains, which led to widespread flooding as the rain began to fall.

More than 100 people had to be evacuated from their homes and 25 were airlifted to safety or rescued by firefighters.

This week Alan Greenspan saw the error of his ways amid dire, and no doubt accurate, predictions that hundreds if not thousands of hedge funds will collapse in the next few months, unleashing a global financial firestorm.

Just one week after bailing out the banking sector to the tune of $4 trillion, leaders in the U.S., Europe and Japan sought to assuage their citizens anger by announcing a raft of proposals to 'stimulate the economy', cut income and business taxes and fund schools. Sarkozy even announced a sovereign wealth fund that will hold stakes in French companies to prevent them being taken over by foreigners.

Brasil has stumped up $50 billion to defend the Real. Imagine what that sort of money could do inside Brasil for schools, infrastructure, medical facilities or policing. The Venezuelan Bolivar is also under pressure.

In a sign that the real economy is being hit very hard, shipping rates for commodities have dropped 90% since May, exposing the very real fact that as Thomas Kositgen put it:-

The emerging markets rely on the strength of the bigger economic powers to grow, [...]

And here is the sad end game of the ripple effect: it takes food out of the mouths of children, it shuts the water taps and it sends hordes of people into lives of despair.....a matter of life and death.

It is already taking the food out of the mouths of people in the West, although the Western media is strangely silent about that aspect. We can expect the situation to get much worse.

Summary: A battle for global economic hegemony is under way. The banking bailouts have moved from the original US proposal of simply buying bad assets to substantial recapitalisation and even nationalisation of banks that just months ago were considered strong and healthy. Bank deposits are rapidly being guaranteed around the world and government guarantees for short and medium term bank debt are freely available. Just who is running these bailouts, and for who's benefit?

Behind much of the apparent debacle lie derivatives and structured assets so, as Tuesday October 21st saw the settlement of many of these instruments effected by the Lehman bankruptcy, we take a look at Credit Default Swaps and some of the myths behind them.

Fundamental changes are being affected to the way banks are required to account for their assets with the hasty dropping or limiting of "mark-to-market" or fair value accounting - what is behind these changes and who benefits?

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"I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs." Thomas Jefferson 3rd president of the US (1743-1826), Letter to the Secretary of the Treasury Albert Gallatin (1802)

Thomas Jefferson was right; he was right when in 1863/64 US agricultural loans were called in at the behest of the Rothschild bankers in London, he was right in the panic of 1906, he was right in the agricultural crisis of 1920/21, he was right in the Crash of 1929 and the Great Depression of the early 1930's and he's right today. However, not even he could foresee that it is not just the people of the US that are slaves to private banking interests but all the peoples of the world.

SOTT Editors Simon Davies and Joe Quinn appeared on UK-based TV show On The Edge on Thursday 9th October 2008.

Watch the 1 hour show (streaming video) below:

SOTT can exclusively report that the legendary and elusive Penn Guinn was recently spotted in the heart of darkness that is England. Our UK correspondent caught up with him and he was gracious enough to tell us about his experience.

Summary: In a week defined by unprecedented government bailouts and collapsing stock markets all financial logic flew out of the window as the US dollar strengthened and gold hardly budged leading many to speculate as to the extent of the rigging of the global gold market in the face of its purported safe haven status.

The announcement, Monday 13th October, that the British government is to take substantial stakes in 2 major UK banks, HBOS and Royal Bank of Scotland and the proposal in the US that the Fed is to take similar stakes in US banks while providing guarantees of bank's senior debt, caused the markets to rally. This despite the fact that it should be clear to anybody that the US is going way beyond bailing banks out and is in fact transferring the future wealth, in the form of future labour and taxation, of ordinary American's into the hands of a tiny financial elite.

Additionally, following the G7 meeting at the weekend it was announced that central banks around the world would provide unlimited US dollar funding to the markets in order to ensure sufficient liquidity is available at all times.

Amid this turmoil the auction of Lehman Brothers bonds at just 8.825 cents on the dollar, resulting in Credit Default Swap payout this coming week of 91.375 cents on the dollar by all sellers of Lehman CDS's, a devastating payout for the sellers, passed almost silently.

The arrest in Yemen this week of a group of "Islamist militants" has provided more evidence that the Israeli government and its associated agencies are still hard at work fabricating "Islamic terrorism" for the enthrallment of the 'educated' masses back home and in the 'enlightened' West:

Yemen seizes 'Israel-linked' cell

Tuesday, 7 October 2008
BBC News

Yemeni President Ali Abdullah Saleh has said the security forces have arrested a group of alleged Islamist militants linked to Israeli intelligence.

Mr Saleh did not say what evidence had been found to show the group's links with Israel, a regional enemy of Yemen.

The arrests were connected with an attack on the US embassy in Sanaa last month which killed at least 18 people, official sources were quoted saying.

Israel's foreign ministry has rejected the accusation as "totally ridiculous".

"A terrorist cell was arrested and will be referred to the judicial authorities for its links with the Israeli intelligence services," Mr Saleh told a gathering at al-Mukalla University in Hadramawt province.

"Details of the trial will be announced later. You will hear about what goes on in the proceedings," he added.

The 17 September attack was the second to target the US embassy since April. Militants detonated car bombs before firing rockets at the heavily fortified building.

Mr Saleh did not identify the suspects, but official sources were quoted saying it was same cell - led by a militant called Abu al-Ghaith al-Yamani - whose arrest was announced a week after the attack.

An Israeli foreign ministry spokesman said the Yemeni president's statement was without foundation.

"To believe that Israel would create Islamist cells in Yemen is really far-fetched. This is yet another victory for the proponents of conspiracy theories," Igal Palmor said in remarks reported by AFP.

Is it really "far fetched" to believe that Israel would fabricate Islamic terrorist attacks? After all, is it not true that Islamic terrorism is Israel's 'bread and butter', without which Israel would stand naked, for all the world to see, as the brutal occupier that it is? And is the same not true of the US and British governments?

Lest we forget the past, and the very recent past at that, below are a collection of mainstream news reports that leave us in little doubt that Israel (closely followed by the US and UK) has its fingers all over "Islamic terrorism" in the Middle East.

The one thing that's been proven is the absolute fear-mongering that's being used to drive us is false. I've seen members turn to each other and say if we don't pass this bill, we're going to have martial law in the United States. -- Rep. Brad Sherman, October 1, 2008

We've had a bad feeling these past several years, as those of you who have read these pages may know, that the Iraq disaster wasn't so much a resource grab or to encircle Iran and Russia, nor just to protect Israel, but something more sinister: training soldiers to be mindless killers so that when they're brought back home they would have no problem killing their fellow citizens when martial law is declared and the cow pies really hit the fan.

Summary: The big financial bailout plan finally passed in the U.S. Congress Friday over the strong objections of the public. Will the bailout prevent the coming depression? Probably not. Mortgage securities are only a part of the problem.

The bailout plan is more than just a giveaway to the rich as represented by the big banks (although it is that). It probably is a panicked attempt to forestall the real potential crisis: a collapse of the huge, unregulated hedge funds based on derivatives and Credit Default Swaps (CDS).

Sleepwalking into disaster, the human race appears to have crossed the point of no return in more than one area:

- The American people are playing with fire by supporting religious extremist and political dunce Sarah Palin - and they will get burned.

- In the process they may also burn a considerable portion of the rest of the world.

- Synchronously, the financial system gets the last, gentle push over the abyss; hungry and poor people will provide lots of excuses for fascism - some will even ask for it.

- The climate is acting up, as it usually does during this time of the year, but the Sun is not behaving according to expected cycles, and together with a few clues here and there, we wonder if something in the cosmic/geophysical system has not changed for good.