domenica 27 novembre 2011

Prepare for riots in euro collapse

Prepare for riots in euro collapse, Foreign Office warns

British embassies in the eurozone have been told to draw up plans to help British expats through the collapse of the single currency, amid new fears for Italy and Spain.

British expats braced for collapse of Euro
The Treasury confirmed earlier this month that contingency 
planning for a collapse is now under way Photo: BLOOMBERG
As the Italian government struggled to borrow and Spain considered seeking an international bail-out, British ministers privately warned that the break-up of the euro, once almost unthinkable, is now increasingly plausible.
Diplomats are preparing to help Britons abroad through a banking collapse and even riots arising from the debt crisis.
The Treasury confirmed earlier this month that contingency planning for a collapse is now under way.
A senior minister has now revealed the extent of the Government’s concern, saying that Britain is now planning on the basis that a euro collapse is now just a matter of time.
“It’s in our interests that they keep playing for time because that gives us more time to prepare,” the minister told the Daily Telegraph.
Recent Foreign and Commonwealth Office instructions to embassies and consulates request contingency planning for extreme scenarios including rioting and social unrest.
Greece has seen several outbreaks of civil disorder as its government struggles with its huge debts. British officials think similar scenes cannot be ruled out in other nations if the euro collapses.
Diplomats have also been told to prepare to help tens of thousands of British citizens in eurozone countries with the consequences of a financial collapse that would leave them unable to access bank accounts or even withdraw cash.
Fuelling the fears of financial markets for the euro, reports in Madrid yesterday suggested that the new Popular Party government could seek a bail-out from either the European Union rescue fund or the International Monetary Fund.
There are also growing fears for Italy, whose new government was forced to pay record interest rates on new bonds issued yesterday.
The yield on new six-month loans was 6.5 per cent, nearly double last month’s rate. And the yield on outstanding two-year loans was 7.8 per cent, well above the level considered unsustainable.
Italy’s new government will have to sell more than EURO 30 billion of new bonds by the end of January to refinance its debts. Analysts say there is no guarantee that investors will buy all of those bonds, which could force Italy to default.
The Italian government yesterday said that in talks with German Chancellor Angela Merkel and French President Nicolas Sarkozy, Prime Minister Mario Monti had agreed that an Italian collapse “would inevitably be the end of the euro.”
The EU treaties that created the euro and set its membership rules contain no provision for members to leave, meaning any break-up would be disorderly and potentially chaotic.
If eurozone governments defaulted on their debts, the European banks that hold many of their bonds would risk collapse.
Some analysts say the shock waves of such an event would risk the collapse of the entire financial system, leaving banks unable to return money to retail depositors and destroying companies dependent on bank credit.
The Financial Services Authority this week issued a public warning to British banks to bolster their contingency plans for the break-up of the single currency.
Some economists believe that at worst, the outright collapse of the euro could reduce GDP in its member-states by up to half and trigger mass unemployment.
Analysts at UBS, an investment bank earlier this year warned that the most extreme consequences of a break-up include risks to basic property rights and the threat of civil disorder.
“When the unemployment consequences are factored in, it is virtually impossible to consider a break-up scenario without some serious social consequences,” UBS said.

The Ikhwan and the Blood of Others

The Ikhwan and the Blood of Others

Whatever the outcome of the Egyptian crisis there is now no doubt that it has reached a significant point. What is that point? It is that point which forces on us a redefining of terms, and by that token the abandonment of an old check-mated game and the time for an open clear space on which the signifiers of a new game of events can be set up.

In an intelligently hosted programme on Al-Jazeera TV a woman speaker for the Ikhwan presented the cold hand of Ikhwani psychology, rejecting the other speakers and droning on with the party line of political party, political systems and the Ikhwan's willingness to collaborate with real power in order to be recognised. Snuggling up to the military today as they did with Nasser.

On the other side of the screen sat Sharief Gaber. He was the voice of that awakening which is happening across the world. Athens. New York. Tel Aviv. Rome. Damascus. Alexandria. Sharief Gaber plainly stated two significant and radical issues.

One - the time of military dictatorship is over. This may be applied to all the cities above.

Two - the political parties are themselves the instrument of oppression since their programme is one of opportunism and thus underwrites dictatorship which alone can grant them their place of illusory power, standing between the masses and the real power structure.

The Psychosis of Systems-Society

The very frame, structure, pattern of society, which had until now seemed actual, solid, founded on material itself has now begun to fragment, disintegrate and collapse. As it does so, a further condition is revealed, simply that that very frame was in itself illusory, a simulation of stuff, a non-existent presence sustained by a mathematic of ever multiplying dementia so that where before it had a decimal connection to things, that in turn had so increased that from hundreds to thousands it had hurtled into being millions. In the final phase of its enmeshing power it had turned into billions and ultimately, trillions.

The political class who had been set there to extract payment of these - now unpayable - sums, tried in vain to break the public's will and force payment of a debt they, the political class had underwritten. It was not called a debt, but rather, to veil the whole procedure, the deficit.

When the masses rioted, from New York to Athens, radical action against the political class was due. They had failed their masters, the bankers. In Athens a leftist government was replaced by a non-elected entity with an outsider as leader. He was called a technocrat. He was, in fact, a banker.  In Rome a rightest government was replaced by a non-elected entity with an outsider as leader. He was called a technocrat. He was, in fact, a banker.

It had finally happened: le Coup de Banque!

Bankers Have Seized Europe

Bankers Have Seized Europe: Goldman Sachs Has Taken Over

Sat Nov 26 2011
by Paul Craig Roberts

Global Research, November 26, 2011

On November 25, two days after a failed German government bond auction in which Germany was unable to sell 35% of its offerings of 10-year bonds, the German finance minister, Wolfgang Schaeuble said that Germany might retreat from its demands that the private banks that hold the troubled sovereign debt from Greece, Italy, and Spain must accept part of the cost of their bailout by writing off some of the debt. The private banks want to avoid any losses either by forcing the Greek, Italian, and Spanish governments to make good on the bonds by imposing extreme austerity on their citizens, or by having the European Central Bank print euros with which to buy the sovereign debt from the private banks. Printing money to make good on debt is contrary to the ECB’s charter and especially frightens Germans, because of the Weimar experience with hyperinflation.
Obviously, the German government got the message from the orchestrated failed bond auction. As I wrote at the time, there is no reason for Germany, with its relatively low debt to GDP ratio compared to the troubled countries, not to be able to sell its bonds. 
If Germany’s creditworthiness is in doubt, how can Germany be expected to bail out other countries?  Evidence that Germany’s failed bond auction was orchestrated is provided by troubled Italy’s successful bond auction two days later.
Strange, isn’t it. Italy, the largest EU country that requires a bailout of its debt, can still sell its bonds, but Germany, which requires no bailout and which is expected to bear a disproportionate cost of Italy’s, Greece’s and Spain’s bailout, could not sell its bonds.
In my opinion, the failed German bond auction was orchestrated by the US Treasury, by the European Central Bank and EU authorities, and by the private banks that own the troubled sovereign debt. 
My opinion is based on the following facts. Goldman Sachs and US banks have guaranteed perhaps one trillion dollars or more of European sovereign debt by selling swaps or insurance against which they have not reserved. The fees the US banks received for guaranteeing the values of European sovereign debt instruments simply went into profits and executive bonuses. This, of course, is what ruined the American insurance giant, AIG, leading to the TARP bailout at US taxpayer expense and Goldman Sachs’ enormous profits.
If any of the European sovereign debt fails, US financial institutions that issued swaps or unfunded guarantees against the debt are on the hook for large sums that they do not have. The reputation of the US financial system probably could not survive its default on the swaps it has issued. Therefore, the failure of European sovereign debt would renew the financial crisis in the US, requiring a new round of bailouts and/or a new round of Federal Reserve “quantitative easing,” that is, the printing of money in order to make good on irresponsible financial instruments, the issue of which enriched a tiny number of executives.
Certainly, President Obama does not want to go into an election year facing this prospect of high profile US financial failure.  So, without any doubt, the US Treasury wants Germany out of the way of a European bailout.
The private French, German, and Dutch banks, which appear to hold most of the troubled sovereign debt, don’t want any losses. Either their balance sheets, already ruined by Wall Street’s fraudulent derivatives, cannot stand further losses or they fear the drop in their share prices from lowered earnings due to write-downs of bad sovereign debts.  In other words, for these banks big money is involved, which provides an enormous incentive to get the German government out of the way of their profit statements.
The European Central Bank does not like being a lesser entity than the US Federal Reserve and the UK’s Bank of England. The ECB wants the power to be able to undertake “quantitative easing” on its own. The ECB is frustrated by the restrictions put on its powers by the conditions that Germany required in order to give up its own currency and the German central bank’s control over the country’s money supply. The EU authorities want more “unity,” by which is meant less sovereignty of the member countries of the EU. Germany, being the most powerful member of the EU, is in the way of the power that the EU authorities desire to wield. 
Thus, the Germans bond auction failure, an orchestrated event to punish Germany and to warn the German government not to obstruct “unity” or loss of individual country sovereignty.
Germany, which has been browbeat since its defeat in World War II, has been made constitutionally incapable of strong leadership. Any sign of German leadership is quickly quelled by dredging up remembrances of the Third Reich. As a consequence, Germany has been pushed into an European Union that intends to destroy the political sovereignty of the member governments, just as Abe Lincoln destroyed the sovereignty of the American states.
Who will rule the New Europe?  Obviously, the private European banks and Goldman Sachs. 
The new president of the European Central Bank is Mario Draghi. This person was Vice Chairman and Managing Director of Goldman Sachs International and a member of Goldman Sachs’ Management Committee. Draghi was also Italian Executive Director of the World Bank, Governor of the Bank of Italy, a member of the governing council of the European Central Bank, a member of the board of directors of the Bank for International Settlements, and a member of the boards of governors of the International Bank for Reconstruction and Development and the Asian Development Bank, and Chairman of the Financial Stability Board.
Obviously, Draghi is going to protect the power of bankers.
Italy’s new prime minister, who was appointed not elected, was a member of Goldman Sachs Board of International Advisers. Mario Monti was appointed to the European Commission, one of the governing organizations of the EU. Monti is European Chairman of the Trilateral Commission, a US organization that advances American hegemony over the world. Monti is a member of the Bilderberg group and a founding member of the Spinelli group, an organization created in September 2010 to facilitate integration within the EU.
Just as an unelected banker was installed as prime minister of Italy, an unelected banker was installed as prime minister of Greece. Obviously, they are intended to produce the bankers’ solution to the sovereign debt crisis.
Greece’s new appointed prime minister, Lucas Papademos, was Governor of the Bank of Greece. From 2002-2010. He was Vice President of the European Central Bank. He, also, is a member of America’s Trilateral Commission.   
Jacques Delors, a founder of the European Union, promised the British Trade Union Congress in 1988 that the European Commission would require governments to introduce pro-labor legislation. Instead, we find the banker-controlled European Commission demanding that European labor bail out the private banks by accepting lower pay, fewer social services, and a later retirement. 
The European Union, just like everything else, is merely another scheme to concentrate wealth in a few hands at the expense of European citizens, who are destined, like Americans, to be the serfs of the 21st century.

giovedì 24 novembre 2011

Debt Free & Interest Free Money

Banking for the Big Society

Beneficial allocation of money

Who allocates money?

Where money comes from

Richard Werner: Banking & The Economy

Anonymous Message to Police - This Will Not Be Tolerated

Vulture Funds Feeding on the Dispossessed

Down by Law: Vulture Funds Feeding on the DispossessedPDFPrintE-mail

FRIDAY, 18 NOVEMBER 2011 11:13
I am glad to see the renewal of interest in "vulture funds," where predatory elites buy up bits of the debt of impoverished nations from various creditors – at pennies on the dollar – then use the courts of the 'developed,' 'civilised' world to force the debtor to cough up the full amount, plus punitive interest payments. The Guardian is running a series of articles on this heinous practice (herehereherehereherehere and here), and CounterPunch has a good piece as well.

I wrote about vulture funds back in 2007. This was one of the many posts which were destroyed in the many hack attacks on the website. So I'm taking the opportunity to re-post it full here, as background to the new push to combat these avid feasters on human misery.

Down By Law: Vulture Funds Feeding on the Dispossessed

(March 2007)
I. The Lessons of Civilization

Every day, millions of people around the world are taught hard truths about how the instruments of "civilization" are used to help the powerful at the expense of the deprived. They see the brutal hypocrisy behind the soaring rhetoric of noblesse oblige that issues from the citadels of wealth and privilege. They see, and learn, that raw self-interest is the true coin of the global realm; they see it in the ruins of their own lives and in the blighted futures of their children. Is it any wonder, then, that many of them come to reject the putative offerings of civilization and embrace extremist or nihilistic or "asymmetrical" responses to their distress?

Every instance of systemic or institutional injustice contributes to the growing instability of the world community, to the violence and corruption and despair that howl outside the shrinking "Green Zones" of prosperity and security in the developed nations. This holds true at every level, from the vast and glaring crime of aggressive war, as in Iraq, to obscure rulings on arcane points of international finance – as in a London courtroom last month, when the British High Court upheld the right of a well-connected financial predator to feast on one of the world's poorest nations.

The case involved the little-known but highly lucrative world of "vulture funds" – or as its practitioners prefer to call it, the "secondary market in sovereign debt." It works like this: private investors buy up bits of the debt of impoverished nations from various creditors – at pennies on the dollar – then go to court to force the debtor to cough up the full amount, plus punitive interest payments. In the London case, a New York vulture named Michael Sheehan and his off-shore, UK-registered front company, Donegal International, were trying to turn a $.3.3 million debt purchase into a $55 million profit bonanza squeezed out of the Zambian people, some of the poorest on earth. Donegal won the case, even though Justice Andrew Smith ruled that Sheehan and one of his associates "were at times being deliberately evasive and even dishonest" in their testimony, as the Financial Times reports.

The amount Donegal is asking for would effectively wipe out the debt relief Zambia would have received this year from the deal signed at the famous "Live 8" summit in Scotland in 2005, when the G-8 nations agreed – amidst much harrumphing self-congratulation – to a large-scale debt relief and restructuring program for poorer countries. Zambia had earmarked the relief money for health programs and education, in a country where the life expectancy is 37, more than half a million children have been orphaned, and 1 in 5 adults have HIV, as Oxfam reports.

Justice Smith indicated that it is unlikely he will grant the company the full whack of $55 million when he makes his final ruling later this month; indeed, Smith made clear his distaste for the enterprise, but said current law compelled a ruling on behalf of the vultures. Even so, Sheehan and the boys will still walk away with a hefty profit – and many Zambians will die of disease or sink further into poverty and ignorance as a result. Meanwhile, some of Zambia's assets have been frozen until the final amount is set and the payoff to Donegal discharged, causing further financial distress to the poverty-wracked country, which is trying to emerge from the shadow of the corrupt and undemocratic regime that took on many of the onerous debts.

Although there are some novel elements to the Donegal-Zambia case, in many respects it is a typical example of how vulture funds use legal back alleys to profit from human misery. Donegal – a British Virgin Islands incorporation of Sheehan's U.S.-based firm, Debt Advisory International – uses all the tricks of the trade, including highly-placed political influence. For years, DAI paid huge fees to the lobbying firm of Jack Abramoff – the convicted wheeler-dealer at the center of the Republican Party's fund-raising (and fund-shuffling) apparatus, a man who had direct entrée to the White House before his current turn in prison stripes took him out of Beltway circulation.

And Donegal, like all vulture funds, preys on poor nations that are undergoing restructuring or forgiveness of debt. They pluck off small chunks of outstanding debt here and there – the Zambia case stemmed from Donegal's purchase of a 1979 loan from then-Communist Romania to Zambia to buy tractors – then, through the vagaries of financial law, they can hold up major debt relief until they reap vast profits from their miniscule share. Debtor nations are thus blackmailed into settling with the vultures in order to clear the way for large-scale initiatives like the G8 measures to take effect.

But Donegal's squeeze play on Zambia is actually rather mild compared to the operations of one of the giants in the field, a pioneer in global vulturing: Elliott Associates L.P., a New York-based hedge fund established by Paul Singer. In addition to managing $6 billion in assets for Elliott, Singer doubles as a major moneybags for the Republican Party. As Greg Palast reported last month on BBC's Newsnight, Singer has been George W. Bush's biggest donor in New York City – no mean feat among the Wall Street kingpins of whom Bush said in 2000: "Some people call you the elites; I call you my base." Singer has given Bush and the Republicans more than $1.7 million since that disputed 2000 race – and is now a top fundraiser for GOP presidential candidate Rudy Giuliani, promising to raise $15 million to put all of America on "Giuliani Time," as Palast reports.

Currently, Singer is hoping to litigate a $10 million purchase of Congo-Brazzaville debt into a $400 million payday – a magnificent profit to be wrung from the populace of yet another of the poorest nations on earth. And this latter point – the real targets of vulture funds – should be kept in mind For although it's true that the debts of these distressed nations are often run up by corrupt regimes – often in collusion with the lofty financial institutions of the civilized world, or with governments of the "developed" nations seeking political advantages for themselves or financial gain for their cronies – it is the ordinary people who pay the price when these bad debts come due.

But it was Singer's assault on Peru in 2000, with its hardball tactics of legally sanctioned extortion, that has proven to be the classic of the genre, clearing the path for a flock of vultures to swoop down from the financial heights and feed on the carcasses of ruined economies.

Singer put a new twist on an old piece of legal boilerplate – the "pari passu" clause – that had been part of debt instruments for more than a century, as Charles D. Schmerler notes in the New York Law Journal. The clause essentially means that all creditors of the debtor nation must be treated equally. When Peru, which had been devastated by the financial crises that shook global markets in the 1990s, struck a deal with governmental and private creditors that would allow it to manage some $3.7 billion in reduced debts, Singer – who had bought $20 million of Peruvian debt for $11 million on the secondary markets – refused to go along. Under pari passu, Singer said, it didn't matter that the other creditors were willing to restructure Peru's debt; he was their equal (despite the minor chunk he owned), and so his needs must also be met. After losing one round, he found friendly courts in America and Belgium that agreed and declared that Peru's debt relief program could not go through until Singer was paid – not just the $20 million he had purchased at knock-down prices, but an extra $38 million in capitalized interest as well. What's more, Peru's assets were frozen until the vulture got his feed. The country was unable to pay its other creditors under the $3.7 billion restructuring, and was thus in danger of defaulting on the new deal, which would have had catastrophic effects.

Peru fought the case but could make no headway against the multibillion-dollar deep pockets of Elliott Associates. Finally, just before defaulting, it bowed to main force and paid Singer the full $58 million. (The strongarm boodle arrived in Singer's coffers on October 7, 2000 – just in time for the home stretch of Bush's presidential run and the successful machinations that followed his second-place finish.) What's more, as Schmerler notes, the Elliott rulings have destabilized the entire structure of international debt relief, giving vultures a new weapon to hijack major restructuring programs and shake down cash-strapped debtors.

II. Broken Mercy

But let's be clear about one thing. What the vultures are doing is legal. They are building on two decades of precedents in which Western courts have "all but abandoned the protections against liability previously afforded sovereign (nations)," as Schmerler writes. "The debate now centers firmly on issues of enforcement."

And here we see financial law echoing long-running trends in foreign policy and domestic governance: first, the steady erosion of the idea of national sovereignty in the face of bristling official doctrines of military "pre-emption," then the equally relentless encroachment on individual liberties – personal sovereignty – in the Anglo-American "homelands." In these areas too, the debate centers firmly on "enforcement": What country do we strike next? Which freedom should we curtail now? Are there any limits to the powers of the "unitary executive" to spy and torture and jail indefinitely as he sees fit? The rise of the vultures is of a piece with this growing institutional bias toward authoritarianism and punishment. The quality of mercy is increasingly strained, often to the breaking point.

Taking advantage of this draconian zeitgeist, the vultures operate profitably in the moral murk that shrouds the system of international debt. As noted, the debts accrued by poor nations are often the result of foolish or venal choices by despots (and a willing lack of due diligence by lenders). But it is hard to prove that a given debt is, technically, an "odious debt" – financial obligations "knowingly contracted without the consent of a population and without benefit to it," as New York attorney Jeff King told me. Odious debts are more narrowly defined than vulture funds. But with the standard practice of "developed" governments pushing arms deals and cozy arrangements for cronies on corrupt or unstable Third World regimes, the line marking off "odious debt" is vague indeed.

"Vulture funds may be morally odious, but the debts they enforce are not necessarily odious debts," said King, a research fellow at the Center for International Sustainable Development Law. "For example, the original debts in the Donegal case were meant for the purchase of agricultural machinery from Romania for the use of Zambia, a seeming benefit. Zambia later defaulted on that debt, and Romania sold it to Donegal."

Ironically, Donegal stepped in to buy the debt just before Zambia itself was about to redeem it. The original 1979 debt had a face value of $15 million; Romania had agreed to accept $3 million for it in 1999. Then Donegal intervened, offering approximately $3.3 million for the debt. In last week's court hearing, Zambia – whose case, in a further irony, was argued by Tony Blair's older brother, William – charged that "Donegal's local agent had bribed civil servants to pass the debt to Donegal rather than allowing Zambia to pay it off at a heavily discounted rate to Romania," the FT reports. But the court ultimately rejected the bribery charges.

"Thus the debt generated legally by Donegal was itself not necessarily odious in the technical sense," King said. "The moral outrage generated by this case is that Donegal seeks to realize an enormous profit at the expense of Zambia's desperate population."

That indeed is the crux of the matter: the disparity between the legality of vulture funds and the immorality of their pernicious effects on the world's most vulnerable people. It is this brutal disparity that teaches the dispossessed of the world the true meaning of the fine words that flow from the mouths of the powerful. "Blowback" doesn't always come from the launching of reckless wars or other high-profile depredations; it can also come from the sight of one's child dying of a preventable disease, while the guardians of civilization reward predators armed with the rule of law.

Marx on ‘Technical Government’

Political Crisis in Italy and Greece: Marx on ‘Technical Government’

In recent years Karl Marx has again been featured in the world's press because of his prescient insights into the cyclical and structural character of capitalist crises. Now there is another reason why he should be re-read in the light of Greece and Italy: the reappearance of the ‘technical government.’

As a contributor to the New York Tribune, one of the widest circulation dailies of his time, Marx observed the political and institutional developments that led to one of the first technical governments in history: the Earl of Aberdeen cabinet of December 1852 to January 1855.

Marx's reports stood out for their perceptiveness and sarcasm. The Times, for its part, celebrated the events as a sign that Britain was “at the commencement of the political millennium in which party spirit is to fly from the earth, and genius, experience, industry and patriotism are to be the sole qualifications for office”; and it called on “men of every class of opinion” to rally behind the new government because “its principles command universal assent and support.” All this excited Marx's derision, which poured forth in his article “A Superannuated Administration. Prospects of the Coalition Ministry, &c” (January 1853). What The Times found so modern and enthralling was for him sheer farce. When the London press announced “a ministry composed entirely of new, young and promising characters,” he mused that “the world will certainly be not a little puzzled [to learn] that the new era in the history of Great Britain is to be inaugurated by all but used-up decrepit octogenarians (...), the bureaucrat, who served under almost every Administration since the close of the last century; other members of the Cabinet twice dead of age and exhaustion and only resuscitated into an artificial existence.”

Alongside the judgments of individuals are others, naturally of greater interest, concerning their policies. “We are promised the total disappearance of party warfare, nay even of parties themselves,” Marx noted. “What is the meaning of The Times?” The question is unfortunately all too topical today, in a world where the rule of capital over labour has become as feral as it was in the middle of the nineteenth century.

Economics and Politics
The separation between economics and politics that differentiates capitalism from previous modes of production has reached its highest point. Economics not only dominates politics, setting its agenda and shaping its decisions, but lies outside its jurisdiction and democratic control – to the point where a change of government no longer changes the direction of economic and social policy.

In the last thirty years, the powers of decision-making have passed inexorably from the political to the economic sphere. Particular policy options have been transformed into economic imperatives which, brooking no contradiction, disguise a highly political and utterly reactionary project behind an ideological mask of apolitical expertise. This shunting of parts of the political sphere into the economy, as a separate domain impervious to change, involves the gravest threat to democracy in our times; national parliaments, already drained of representative value by skewed electoral systems and authoritarian revisions of the relationship between executive and legislature, find their powers taken away and transferred to the market. Standard & Poor's ratings and the Wall Street index – those mega-fetishes of contemporary society – carry incomparably more weight than the will of the people. At best political government can ‘intervene’ in the economy (the ruling classes often need to mitigate the destructive anarchy of capitalism and its violent crises), but they cannot call into question its rules and fundamental choices.

The events of recent days in Greece and Italy are a striking illustration of these tendencies. Behind the facade of the term ‘technical government’ – or ‘government of all the talents,’ as it was known in Marx's day – we can make out a suspension of politics (no referendum, no elections) that supposedly hands over the whole field to economics. In an article of April 1853, “Achievements of the Ministry,” Marx wrote: “The best thing perhaps that can be said in favour of the Coalition ["technical"] Ministry is that it represents impotency in [political] power at a moment of transition.” Governments no longer discuss which economic orientation to take; economic orientations bring about the birth of governments.

In Italy, the key programmatic points were listed last summer in a letter (meant to remain secret!) from the European Central Bank to the Berlusconi government. To restore market ‘confidence,’ it was necessary to proceed rapidly down the road of ‘structural reforms,’ an expression now used as a synonym for social devastation: in other words, wage cuts, attacks on workers’ rights over hiring and firing, increases in the pension age, and large-scale privatization. The new ‘technical governments,’ headed by men with a background in some of the economic institutions most responsible for the crisis (Papademos in Greece, Monti in Italy), will set off down this road – no doubt ‘for the good of the country’ and ‘the well-being of future generations.’ And they will come down like a ton of bricks on anyone who raises a discordant voice.

If the Left is not to disappear, it must discover again how to identify the true causes of the crisis that is now upon us. It must also have the courage to propose, and experiment with, the radical policies necessary to achieve a solution.

Marcello Musto is a Professor of Political Theory at York University, Toronto, Canada. This article was first published on his blog The photo is by helst1. 

In the Face of Financial Crisis

Bernard-Henri Lévy


In the Face of Financial Crisis, Redo Ancient History

The Huffington Post, 11/23/11 08:13 AM ET

Rome and Athens, epicenters of the economic and financial storm currently shaking Europe and the world. You read it right: Rome and Athens. In other words, the two cradles of Europe. Two of the three sources (Jerusalem, thank heavens, not yet included) of its ethics and its religions. The double matrix of its languages. The great blocs of faith and memory that seal its destiny. The site of the invention of the models of democracy and citizenship we have lived by, until this very day. The source of our knowledge and of our legal concepts. The idiom of our double commerce, of things and of minds. The native land of our philosophers, our rhetors, our jurisconsults, our pontiffs, and our artists. Our compass, in both senses of the word. Our secret but all the more imperious ancestry. Obviously, I'm leaving things out. I'm leaving out a great deal. For this is a sign that, clearly, points to two things. First, it is Europe itself that is in crisis. Not finance. Not the economy. Europe. Its culture. Its genius. Its unconscious conscience. Its immemorial and its memory. All that makes up its bases and its origins. Its heart, that beats more and more faintly. Its soul. Its common and hidden grammar. The distinction, that it invented, between law and right. Or between man and citizen. The articulation, that is its own, of multiple forms of the Multiple and of the unique name of the One. In short, its being. Its substance. To such an extent that, in order to understand what is happening, to know what it entails when we speak of the crisis of the debt or of the euro, to understand, just to understand, what the popular movements of protest currently shaking Rome and Athens, the two great capitals of European intelligence, are saying, we should be rereading Gibbon, Humboldt, or even Polybius -- these theoreticians of the fate and the fall of the Athenian paradigm or the Roman road -- rather than Friedman or Keynes. There was the time when the Greek Idea spread, via the Empire, and then through its budding catholicity. There was the schism, early in the second millennium, between the masters of the Idea and those of the medium, between the inheritors of Athens and those of Rome, each retrieving their own. In the midst of crossing over to the modern European political project, there was the reconciliation of 1965, with the lifting of excommunications, the peace of the Churches and their priests, the disarmament of minds. Well, perhaps we are entering into a new new phase, outwardly resembling a rapprochement, in superficial appearance a reunion, but this time for the worst. Sudden and cataclysmic, as though Rome and Athens joined together in the same disaster, as though both dead legacies were conspiring in the same amnesia, posturing of relations, caricature. So it is. Second, the solution to this crisis will be neither financial nor economic, either, but once again, according to choice, either spiritual, moral, or political. Governments of technocrats, of course. Eminent civil servants, experts, competent individuals, Mario Montis and Lucas Papademoses, very well. Plans of austerity and rigor, stress tests for the banks, reformed States that have broken off with Berlusconian antics, obviously, and no one can escape it. But if the above is exact, if it is no accident that Rome and Athens are the two names of this suspended apocalypse and of its horsemen gone mad, if, behind this explosion of sovereign debt, the apprehensively expected bankruptcy of States, the widespread crisis of confidence, the speculation, the crazy money, the increasing irresponsibility of the actors involved, all hiding, henceforth, behind an anonymous and inevitably irreproachable "System ", there is, indeed, this radical unbeing, none of these efforts will touch the heart of the matter. If it is really the seat of Europe, its axe of foundation, its symbolic and imaginary double name, its profane religion that are struck to the quick, none of these measures will suffice, not one of these ligatures will reshape the world of Europe, and there is no reform that will succeed in staving off the anticipated catastrophe. Europe was established, a first time, by substituting the word of the citizen-magistrate for the sayings of the oracles and auspices. It reconstructed itself a second time by favoring reason over anathema, preferring that a consciousness become transnationally national to the schism of faith and corps. Well, here, in the same way, we must confront these new soothsayers (the agitators of the financial markets), and the new grand excommunicators (agents of the triple A ratings), with a word, a wisdom, a manner of speaking and listening of the archons and the polemarches, faithful to the best of European heritage.
Go back to Rome. Restore Athens.
That is the only plan.
For the rest, in other words the administrators, will follow, as usual.

mercoledì 23 novembre 2011

Corzine, Goldman Sachs alumni



By Kurt Nimmo, INFOWARS

It is not certain if John S. Corzine will ever do the perp walk - or even be compelled to answer questions - for his role in the disappearance of over a billion dollars in the MF Global swindle.
The House Financial Services Committee, however, has started a laborious investigation process, no matter how timidly. It has asked Corzine to testify about the collapse of MF Global and the whereabouts of hundreds of millions of dollars in customer money that mysteriously went missing.
It should be noted that Corzine will not be compelled to answer questions or even respond to the request by the House Financial Services Committee. If push comes to shove, the committee has the power to subpoena Corzine and his underling, Bradley Abelow, the firm's chief operating officer. It has yet to say one way or the other if it intends to do this.
The FBI and the Commodity Futures Trading Commission are now involved finding out what happened. An investigation may take months - long enough for the scandal to fall out of view so it can be swept conveniently under the rug.
It looks like Corzine may avoid accounting for the money or facing responsibility for its disappearance. Instead, blame may be shifted around and lawmakers will spank the regulatory agencies supposedly overseeing the industry.
Corzine is Goldman Sachs alumni and as everybody knows Goldies are above the law.

Regolare le mega-banche si può

Regolare le mega-banche si può: la Svizzera lo dimostra
di Maurizio Blondet - 23/11/2011



La Banca Centrale Svizzera ha imposto a UBS e Credit Suisse (i suoi colossi “troppo grandi per fallire”) una severa cura dimagrante, obbligandoli a liberarsi di attività ad alto rischio e a restringersi, concentrandosi sulla normale attività di credito commerciale e gestione del risparmio. 

L’occasione dell’intervento è stato il salvataggio della UBS, che nel 2008 ha ricevuto 6 miliardi di franchi svizzeri (5,2 miliardi di dollari) dallo stato, e ha messo 60 miliardi di dollari di “attivi a rischio” presso un fondo garantito dalla banca centrale (il Credit Suisse aveva rifiutato l’aiuto pubblico, ed è stata obbligata a cercare capitale fresco, essenzialmente fornito dal fondo sovrano del Qatar).

Al contrario delle altre banche centrali (vedi Federal Reserve e BCE) che hanno finanziato a pié di lista le perdite incorse dalle loro banche in speculazioni azzardate senza porre condizioni, la Swiss National Bank ha obbligato UBS e Crédit Suisse a rivolgersi a revisori dei conti indipendenti, che hanno intervistato il personale per capire in che pasticci si erano cacciati per perseguire i loro bonus miliardari. S’è visto che la UBS s’era buttata a corpo morto nei derivati, non solo mantenendo i suoi CDO (Collateralized Debt Obligations, insomma tranches di mutui sub-prime cartolarizzati) con il rating AAA, ma comprandone da altre banche, per poi ‘coprirli’ con Credit Default Swap. 

I revisori independenti (che però le banche sotto esame hanno dovuto compensare a loro spese) hanno stilato un rapporto rivelando i dettagli più sanguinosi della speculazione. Questa informazione è stata resa pubblica. 

Dopo ciò, la banca centrale svizzera ha dato la prima bastonata: forzando le due banche ad alzare la riserva obbligatoria (il cuscinetto di capitale proprio) al 19%, misura senza precedenti che da sola costa alle due banche un 18 miliardi di dollari ciascuna .

Seconda botta: ha obbligato UBS a delineare il proprio business per un ritorno al normale, tagliando a sangue le proprie attività come banca d’investimento: rinunciando alla metà dei suoi 300 miliardi di attività derivate, e ad uscire da ‘industrie’ come la cartolarizzazione di cosiddetti “attivi” (securitization, ossia lo spaccio a terzi di debiti che qualcun altro sta pagando) e prodotti finanziari strutturati complessi. Come si legge in un comunicato della stessa UBS, “la banca d’investimento sarà meno complessa, tratterà meno Risk Weighted Assets, e richiederà sostanzialmente meno capitale per produrre profitti sostenibili agli azionisti”. Il Credit Suisse ha promesso di fare lo stesso entro il 2014.

Ciò dimostra quanto vuota sia la minaccia dei bankster internazionali che , di fronte alle più timide proposte di regolamentazione, rispondono che si stabiliranno all’estero, nei paesi dove la regolamentazione non c’è. Risulta che la UBS ha anche provato a spezzare la sua sezione d’investimento a rilocarla altrove, onde sfuggire all’occhio della Swiss National Bank: ma s’è accorta che la fuga era impraticabile. Per certe operazioni c’è bisogno di avere alle spalle una banca centrale credibile, e Giappone e Cina non amano nuovi arrivi stranieri; hanno scoperto che la nuova entità non riusciva a finanziarsi a tassi competitivi; e che occorre restare vicino ai clienti, e i traders devono restare fisicamente vicini ai venditori. Insomma, la globalizzazione è una tigre di carta di fronte ad una risoluta volontà politica. Il regolatore elvetico ha spiegato che, dato che le due banche che si sono comportate irresponsabilmente avevano accumulato “attivi” pari al quintuplo (500%) del Pil svizzero, la messa sotto tutela era una priorità nazionale.

Maurizio Blondet