Clusters of interacting two-level-systems (TLS),likely due to F+ centers at the metal-insulator interface, are shown to self consistently lead to 1/f α magnetization noise in SQUIDs. By introducing a correlation-function calculation method and without any a priori assumptions on the distribution of fluctuation rates, it is shown why the flux noise is only weakly temperature dependent with α < ∼ 1, while the inductance noise has a huge temperature dependence seen in experiment, even though the mechanism producing both spectra is the same. Though both ferromagnetic-RKKY and short-range-interactions (SRI) lead to strong flux-inductance-noise cross-correlations seen in experiment, the flux noise varies a lot with temperature for SRI. Hence it is unlikely that the TLS's time reversal symmetry is broken by the same mechanism which mediates surface ferromagnetism in nanoparticles and thin films of the same insulator materials. PACS numbers: 85.25.Dq, 03.67.Lx Superconducting quantum interference devices (SQUID) are of considerable interest for quantum information as they can replicate natural qubits, such as electron and nuclear spins, using macroscopic devices. However the performance of superconducting qubits is severely impeded by the presence of 1/f magnetization noise which limits their quantum coherence. This type of noise was first observed in SQUIDs well over two decades ago [1,2], however its origins and many of its features remain unexplained. Recent activity in quantum computing has however revived interests to better understand this magnetization noise. [3,4].Magnetic noise in SQUIDs has several puzzling features. While the flux noise (the first spectrum) is also weakly dependent on temperature, the choice of the superconducting material and the SQUID's area [1,5,6] -the inductance noise (the second spectrum or the noise of the flux noise), surprisingly shows a strong temperature dependence. It decreases with increasing temperature and scales as 1/f α [5] where the temperature dependent (0 < α(T ) < 1) [7]. The flux noise is also known to be only weakly dependent on geometry and the noise scales as l/w, in the limit w/l << 1 (l is the length and w is the width of the superconducting wire) [8]. This along with recent experiments [5] suggests that flux noise arises from unpaired surface spins which reside at the Experimental evidence also suggests that these surface spins are strongly interacting and that there is a net spin polarization [5] as the 1/f inductance noise is highly correlated with the usual 1/f flux noise. This cross-correlation is inversely proportional to the temperature and is about the order of unity roughly below 100mK. Since inductance is even under time inversion and flux is odd, their three-point crosscorrelation function must vanish unless time reversal symmetry is broken, which indicates the appearance of long range magnetic order. As this further implies that the mechanism producing both the flux-and inductance noise is the same, it is not clear on why only the associated spectrum ...