World Financial Crisis Part 3

In case you were wondering what the next crisis might be -

even in this World Economic Forum crowd, full of fund managers and chief executives, conventional pro-market arguments didn't seem to resonate. In an anonymous, electronic vote by the members of the packed auditorium, 50.7 percent agreed that government debt poses the biggest threat, 37.3 percent worried most about protectionism and only 12 percent feared overregulation the most.

[url=http://globalresearch.ca/index.php?context=va&aid=17346]Ben Bernanke and parallel universe theories for banking and finance in Amerika[/url] There's a tear in the fabric of space-time in Washington and blowing bubbles down Wall Street.

[url=http://www.guardian.co.uk/world/2010/feb/04/barack-obama-china-yuan]Obama to CPC in Beijing: Stop being so interventionist and get with the neoliberal agenda on currency[/url] ... so that marauding capital can play yo-yo with China's economy! CPC to Obama: Get real!

NorthReport wrote:

 

State Farm cancels thousands in Fla.
125,000 customers to be cut during hurricane season

 

http://www.msnbc.msn.com/id/35220269/ns/business-personal_finance/

I can't really blame them that much. It's getting more and more impossible to make money on hurricane insurance as the frequency and power of storms increases (thanks global warming!). When multi-billion dollar hurricane losses happen every year either the premiums must rise to accommodate that or the insurance companies will decide it's not worth providing. If you want an example of big business that unusually is entirely behind efforts to limit climate change, it's the insurance industry - especially the reinsurers into whose laps all these claims must eventually fall.  

[url=http://www.foreignpolicy.com/articles/2009/04/15/the_next_big_thing_neom... Next Big Thing: Neomedievalism[/url]

 The next Renaissance is still a long way off 

Capital flight begins out of Greece as the government has the temerity (and the desperation) to make rich people pay their taxes

Descent into Barbarism: The US and NATO Wage War on the World

http://www.globalresearch.ca/index.php?context=va&aid=17517

"Similar historic junctures have been witnessed before when capitalism floundered from its inexorable tendancy to make the rich richer and the poor poorer. Disturbingly, the release valve for the system and its bankruptcy has always been war...In our time, war, it seems, has already begun. The US oligarchy and its NATO allies are waging a veritable war on the world.."

Here's a good recent summary of the views of J.B. Foster et al over at Monthly Review: The Age of Monopoly-Finance Capital.

Samir Amin, whose views Foster makes reference to, has a related article that can be found over here:  The Battlefields Chosen by Contemporary Imperialism: Conditions for an Effective Response from the South . Amin clearly focuses on what the Global South needs to do, how the genuine left in the Global North can help, and so on.

Amin, taken together with Foster's piece, gives a very solid strategic view of the current impasse and what can be expected in the future.

It Is Too Late to Prevent the Collapse of the G7

http://www.informationclearinghouse.info/article24675.htm

"Greece is irrelevent. We are all now insolvent.."

Chinese real estate bubble about to pop?

 Jack Rodman, who has made a career of selling soured property loans from Los Angeles to Tokyo, sees a crash looming in China. He keeps a slide show on his computer of empty office buildings in Beijing, his home since 2002. The tally: 55, with another dozen candidates.

“I took these pictures to try to impress upon these people the massive amount of oversupply,” said Rodman, 63, president of Global Distressed Solutions LLC, which advises private equity and hedge funds on Chinese property and banking. Rodman figures about half of the city’s commercial space is vacant, more than was leased in Germany’s five biggest office markets in 2009.

Foreclose this! Man bulldozes home before bank can take it.

http://www.spiegel.de/international/world/0,1518,678026,00.html

Quote: On the international stage, China's monetary policy officials are givers, not takers. They are starting to issue government debt abroad, even though the country doesn't need to borrow any money. But many states, for example Brazil, India and Russia, are happy to have an alternative to the US bond market. They buy Chinese bonds, and the Chinese in turn use this money to buy Russian, Indian and Brazilian bonds. This has created a second monetary circuit alongside the dollar.

This won't replace the dollar as a global currency in the foreseeable future, but it will help to prepare the ground for its replacement. Xiao Gang, the chairman of the board of directors of the Bank of China, said last summer: "The time has come to internationalize the yuan."

..a change is gonna come.

NoDifferencePartyPooper wrote:

Debt Dynamite Dominoes: The Coming Financial Collapse

http://globalresearch.ca/index.php?context=va&aid=17736

"Assessing the Illusion of Recovery.."

In 2007, the British Defense Ministry released a report in which they analyzed future trends in the world. It stated in regards to social problems, “The middle classes could become a revolutionary class, taking the role envisaged for the proletariat by Marx.” Interestingly:

The thesis is based on a growing gap between the middle classes and the super-rich on one hand and an urban under-class threatening social order: ‘The world's middle classes might unite, using access to knowledge, resources and skills to shape transnational processes in their own class interest’. Marxism could also be revived, it says, because of global inequality. An increased trend towards moral relativism and pragmatic values will encourage people to seek the ‘sanctuary provided by more rigid belief systems, including religious orthodoxy and doctrinaire political ideologies, such as popularism and Marxism’.[95]

It's gut check time for the left and progressive people everywhere. The time is coming.

Where there is fire, there is smoke. And in that smoke, from this day forward, my people will conspire and plot and plan for the inevitable day of capitalism's downfall - the day when it finally and self-destructively turns its weapons against its own kind. The day of the writing in the sky, when your cities lie buried under ideological rubble! When the sea is a dead sea, and the land is a wasteland out of which I will lead my people from their captivity! And we will build our own cities in which there will be no place for war pigs except to serve our ends! And we shall found our own armies, our own religion, our own dynasty! And that day is upon you... now!  - Caesar, Planet of the Proles

An interesting contrast between two different business cultures -

Royal Bank of Scotland and Commerzbank both reported poor financial results this week. Commerzbank accordingly did not offer its investment bankers bonuses. RBoS, however, paid well over a billion pounds out in bonus despite now being a state-owned company.

http://www.nakedcapitalism.com/2010/02/rbs-pays-billions-while-commerzbank-bankers-get-nothing.html

An interesting, if unsurprising, economic metric - employment agencies are having more trouble than usual placing people in work.

“IN 2008 10m people came to us, and we placed 4m in jobs. In 2009 it was 11m, and we only placed around 3m. It’s been a tough year.” So says Jeff Joerres, the boss of Manpower, an employment-services firm best known for its army of temporary workers.

The Financial Coup d'Etat: Consolidation of America's Economic Elite

http://globalresearch.ca/index.php?context=va&aid=17742

"It is hard to see how any of the fundamental problems in the financial system have been addressed to date...we are still driving on the same winding mountain road, but this time in a faster car. Now that the 'Too big to Fail' Wall St. elite know that the government will come in to bail them out, they are engaging in even riskier behaviour then before. Corporation cunning has developed faster than the law of nations or state. It is hard to face the fact that we have been so taken advantage of and abandoned by the very people we supported and had put our hope and faith into...."

Iceland: Overwhelming rejection of Icesave bill in national referendum
By Jordan Shilton
9 March 2010

Saturday’s referendum in Iceland on whether to accept a deal to pay back nearly €4 billion to Britain and the Netherlands resulted in a massive “no” vote. More than 90 percent of the electorate voted the proposal down, with only 1.5 percent in favour. There were more blank ballots cast in the referendum than votes in favour of the proposal.

The referendum concerned demands by Britain and the Netherlands for the full repayment, with interest, of the monies the two countries paid out to depositors in the Icesave online bank which collapsed in 2008.

http://www.wsws.org/articles/2010/mar2010/ices-m09.shtml

A good set of talks from the Roosevelt Institute's Make Markets be Markets conference on financial reform:

http://economistsview.typepad.com/economistsview/2010/03/make-markets-be...

Lehman Bankruptcy Report Exposes Wall Street Criminality

http://wsws.org/articles/2010/mar2010/pers-m15.shtml

"The 2,200 page document details accounting fraud on a massive scale, involving secret transactions that enabled the bank to falsify its level of debt and conceal the scale of its laosses from toxic mortgate linked assets.."

The only hope in the USA is for the middle class to rise up but will they?  I doubt it.

Nouriel Roubini is being depressing again - and probably also right -

At the end of the day, resolving private-sector leverage problems by fully socializing private losses and releveraging the public sector is risky. At best, taxes will eventually be raised and spending cut, with a negative effect on growth. At worst, the outcome may be direct capital levies (default) or indirect ones (inflation).

Unsustainable private-debt problems must be resolved by defaults, debt reductions and conversion of debt into equity. If, instead, private debts are excessively socialized, the advanced economies will face a grim future: serious sustainability problems with their public, private and foreign debt, together with crippled prospects for economic growth.

Hipsters on food stamps! (and not just ironically)

I guess people on this program can't win - they either get bashed for buying chips and pop or for buying organic vegetables and artisanal cheese.

China - the national version of the movie "Speed"

Because China lacks the social safety net of the developed world, unemployed people aren’t just inconvenienced by the loss of their jobs, they starve; and hungry people don’t complain, they riot and cause political unrest. 

Remember the 1994 movie “Speed”? A young cop (Keanu Reeves) had to save passengers on a bus that would explode if its speed dropped below 50 m.p.h. Well, China is like that bus with 1.3 billion people aboard. If the Communist Party can’t keep the economy growing at a fast clip, the result will be catastrophic. 

I hope nobody is the national version of "Speed 2", because that's just horrible to contemplate.

China doesn't really have a comprehensive socialized medicine program anymore. People living places they officially aren't supposed to (and that's many millions of people) don't have access and those who do have to pay large fees. The government is addressing this but it's not changed yet.

Euro Crisis: Latvia and the PIGS

http://globalresearch.ca/index.php?context=va&aid=18144

"The very future of the EU is being torn asunder as the rich members turn their backs on the poor. The iron law of capitalism -- the strong protect their own interests at the expense of the weak, is once again being played out. Squeeze the worker. Communist propaganda you might say but unfotunately true...In other words, the entire western world is insolvent and each country is facing its own day of reckoning, starting, appropriately enough, with Greece, the home of western civilization.."