Archive for the ‘Financial crisis’ Category
The financial system established in England after 1688, based on usurious lending to the state by private bankers, is reaching its final blowout in the form of a series of devastating bubbles and a massive bailout of the financiers with public money. But the issuance of money doesn’t have to be in the hands of a private consortium: another credit system is possible.
Posted by smeddum on October 8, 2008
Russia’s Medvedev outlines measures for handling global crisis
Prime-Tass
EVIAN, France, Oct 8 (Prime-Tass) — Russian President Dmitry Medvedev outlined Wednesday his vision for handling the global financial crisis, ITAR-TASS reported.
“(The crisis) has been caused by some countries’ economic egoism,” he said at the World Policy Conference in the French spa resort of Evian in the run-up to a meeting with his French counterpart Nicolas Sarkozy. “As we can see, now this crisis threatens to undermine the stability of global (economic) development.” Read the rest of this entry »
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Posted by seumasach on October 8, 2008
The text below is the full text of the governments latest rescue scheme. This has been presented via the media and and right across the political spectrum as some kind of nationalisation or partial nationalisation of the banks. Here are the references to the governments role in this arrangement and the conditions attached:
“the Government is establishing a facility, which will make available Tier 1 capital in appropriate form (expected to be preference shares or PIBS) to ‘eligible institutions'”
“If the Government is to provide the capital, the issue will carry terms and conditions that appropriately reflect the financial commitment being made by the taxpayer. In reaching agreement on capital investment the Government will need to take into account dividend policies and executive compensation practices and will require a full commitment to support lending to small businesses and home buyers.”
“The current expectation is that the guarantee would be issued out of a specifically designated Government-backed English incorporated company.”
“In order to facilitate this process the Government is making available £25bn to be drawn on by these institutions if desired to assist in this process as preference share capital or PIBS and is also willing to assist in the raising of ordinary equity if requested to do so.”
“It is being made available immediately to the eight institutions named above in recognition of their commitment to strengthen their aggregate capital position.”
In summary, there are “expectations” that the government will take shares in the banks “if desired”. Apart from that £200 bullion plus is to be made available subject to vague commitments. The banker’s word is his bond: the government bond is the banker’s This statement makes absolutely clear the subordination of His Majesty’s Government to the banking cartel. Britain is now a fully-fledged kleptocracy which claims entitlement to all available wealth in the country. The process of the fleecing of the population through inflation, taxation and assorted acts of fraud has now been set in motion, in earnest.
Cailean Bochanan
8th October, 2008
Guardian After consultation with the Bank of England and the Financial Services Authority, the Government announces that it is bringing forward specific and comprehensive measures to ensure the stability of the financial system and to protect ordinary savers, depositors, businesses and borrowers. Read the rest of this entry »
Posted in Financial crisis, Uncategorized | Tagged: bailout of bankrupt britain | 1 Comment »
Posted by seumasach on October 7, 2008
Can anyone think of another offshore financial speculator economy whose currency has become very vulnerable against the Euro?
Leigh Philips
EU Observer
6th October, 2008
Iceland’s trade unions want the country to join the European Union in return for help in an economic rescue plan, as the island state’s government holds emergency talks to shore up its teetering economy.
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Posted in Financial crisis | Tagged: bankrupt iceland, financial collapse | Leave a Comment »
Posted by seumasach on October 7, 2008
Doug Noland
Asia Times
7h October
Click on link above for full article
I still owe readers a thorough analysis of the Q2 2008 flow of funds. For now, I’ll just point out some data relevant to the current state of acute fragility.
Looking back, Total Non-Financial Debt (NFD) expanded US$578 billion during 1994. By 1998, NFD growth for the year had surpassed $1.0 trillion. Non-Financial Credit increased $1.153 trillion in 2001, $1.415 trillion in 2002, and $1.676 trillion in 2003, before reaching the $2.0 trillion milestone in 2004. Incredible as it was, debt expansion then surged over the next fateful three years. Growth rose to $2.319 trillion in 2005, $2.428 trillion in 2006 andthen to last year’s record $2.561 trillion.
Importantly, this historic credit inflation inflated asset prices, incomes, corporate cashflows/earnings, government revenues, and various types of spending throughout the US and global economy. It was a self-sustaining bubble bolstered by ongoing credit excesses, asset inflation and resulting purchasing power gains. But NFD growth slowed sharply to an annualized $1.726 trillion during this year’s first quarter and then sank to $1.127 trillion annualized during the second quarter. Credit growth is now in the process of collapsing.
We are today witnessing the acute stage of bursting credit bubble dynamics. It’s an absolute debacle, and there’s little our well-intentioned policymakers can do about it other than try to slow the collapse. To be sure, there were momentous effects to both the economic and financial structures during the bubble period between 1994’s $578 billion non-financial debt growth and 2007’s $2.561 trillion. It is also worth noting that financial sector debt expanded $462 billion in 1994 compared with $1.753 trillion in 2007. Mortgage debt almost doubled in the six years 2002 through 2007 to $14.0 trillion, while financial sector borrowings rose 75% to $16.0 trillion.
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Posted in Financial crisis | Tagged: financial collapse | 1 Comment »
Posted by smeddum on October 6, 2008
French Premier Francois Fillon:
We’re on “the edge of the abyss”
By Mike Whitney
06/10/08 ‘”ICH” — – Years from today, when the current financial crisis is over, historians are likely to agree that it would have been far better if the Bush administration had declared a state of emergency earlier in the process so that the necessary steps could have taken to avoid a complete financial meltdown. The media could have been used to bring the American people up to date on market-related developments and educated in the bizarre language of structured finance. Knowledge is power; and power can prevent panic. Read the rest of this entry »
Posted in Financial crisis | Tagged: financial meltdown | 1 Comment »
Posted by seumasach on October 6, 2008
Japan, with interests rates next to zero, has played the role of piggy bank to the global economy in recent years. Now this “carry trade”, one of the pillars of the global financial system is unwinding.
Kosuke Takahashi
Asia Times
3rd October, 2008
TOKYO – Faced with a gloomy outlook for the faltering United States financial system and serious worries about a global slowdown, the Japanese yen is looking to be one of the winners in the turmoil as investors increasingly seek to reduce risk.
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Posted in Financial crisis | Tagged: financial collapse, yen caary trade | Leave a Comment »
Posted by smeddum on October 6, 2008
A global downturn in the power of the west
By Dominique Moïsi
Published: October 5 2008 18:21 | Last updated: October 5 2008 18:21 Financial Times
It is telling times when the FT prints an article that should appear in the Socialist Worker, with a few changes in jargon and an outlook that actually assesses Western power and not just capitalist crises. As to Europe, the author, here, is rather one sided: have a look at our Editorial.
It is not too early to assess the first geopolitical lessons of the current financial maelstrom. As the crisis unfolds, trends are emerging. The near collapse of financial capitalism both confirms and accelerates a revolution that was already under way in international politics. Who are the losers and who are likely to be the winners – that is, those who lose the least – in the present mess? In the language of Wall Street, the west is down and the state is up. Moreover, democracy itself risks falling into disrepute if solutions are not found to the crisis. Read the rest of this entry »
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Posted by seumasach on October 4, 2008
US corporate greed and political complicity
Redress
3rd October, 2008
Paul J. Balles predicts that the next great disaster for the USA won’t be from terrorists abroad giving Washington a lame excuse to go to war, but it will be “a severely pained American public rising up … against the US corporate monarchy”.
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Posted in Financial crisis | Tagged: financial collapse | 1 Comment »
Posted by smeddum on October 3, 2008
US Dollar Doomed as Credit Crisis Turning into a Currency Crisis
Currencies / US Dollar
Oct 03, 2008 – 02:18 PM
By: Jennifer_Barry Market oracle
When the precious metals were smashed out of nowhere and the dollar started climbing this summer I became very worried. I didn’t question my conviction that commodities are in a bull market, or that precious metals in particular are undervalued. I felt something sinister was at work. Neither move was justified on a fundamental level. I assumed that something very bad was about to happen and the metals needed to be brought lower in advance of the bad news. Read the rest of this entry »
Posted in Financial crisis | Tagged: dollar collapse, economic collapse | Leave a Comment »
Posted by seumasach on October 3, 2008
For all that Europe has adopted the language of neo-liberalism, it has a way to go catch up, or rather, slide back to the UK and the USA. That this was the case was shown by the endless Anglo-saxon tirades against “socialist” Europe. Just how far the neo-liberal rot had set in will be revealed by this crisis, but I suspect it will pale in comparison to the devastation over here. Unlike the UK, Europe still has a substantial high-tech industrial base, thriving agriculture, good infrastructure and high levels of education. It still has a bureaucracy which has served as a check on oligarchy and a robust dirigiste tradition. The EU doesn’t run a huge current account deficit nor is its public sector saddled with massive debt from PFI/PPP schemes: the Euro is a rising currency. Sometimes we forget that we are actually members of the EU such is the permanent mood of hostility promoted by our press. It’s time to recognise our good fortune and to enter fully into the spirit of building Europe and to join the Euro as soon as possible.
Mary Dejevsky
Independent
3rd October, 2008
The vast majority of European financial institutions are not in difficulty
President Sarkozy has called European leaders to Paris tomorrow to discuss what everyone is fatalistically calling the global financial crisis. But it is not a world financial crisis, is it? It would be more accurate to describe it as a crisis of what the French used to call, with a contemptuous Gallic shrug, the “Anglo-Saxon model”.
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Posted in Financial crisis | Tagged: join the euro! | 3 Comments »
Posted by smeddum on October 3, 2008
The New American Century: Cut Short By 92 Years
By Mike Whitney
02/10/08 ‘ICH” — – America’s time as a superpower is coming to an end. The financial crisis was just the last straw. Whatever good faith was left after the invasion of Iraq, the shrugging off of international treaties and the shameless disregard for human rights, is now gone. The United States has polluted the global economic system with worthless mortgage-backed securities and, by doing so, has pushed 6 billion people closer to a long and painful recession. That’s not something that can be easily forgiven. Read the rest of this entry »
Posted in Drive to Global War, Financial crisis, Multipolar world | Leave a Comment »
In These New Times 