NAB Will Shock Wall Street
By Robert Gottliebsen – Business Spectator, Australia (25 Jul 2008)

To the Business Speculator, Australia:

Good piece. Thanks.

You stated that “NAB had 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.”

I was the U.S. Assistant Secretary of Housing/FHA Commissioner responsible for cleaning up the last housing bubble bust in 1989, including oversight responsibilities for the Resolution Trust Corporation.

Our loss rates on a number of portfolios were that high, if not higher. In addition, we saw numerous communities with default and loss rates that were higher. I recall one town where 70% of the mortgages were in default and owned by FHA, Fannie and Freddie. Given the various banks and savings and loans that were resolved out, we saw institutions with such loss rates.

The reality was that the massive defaults in 1989 were engineered in a process that made a great deal of money those who organized it. What has happened in this most recent round is that the same players have figured out how to engineer more losses by marketing the securitized assets and derivatives globally.

The fundamental scam, however, is not new. We have seen it before. Other than some aging and retirements, it appears to be the same people, same companies, same game.

James Turk calls it the central banking-warfare model. It is at least five hundred years old.

Keep up the good work,

Catherine Austin Fitts