Economy
Bail-out blackmail Print E-mail
By Mick Brooks   
Thursday, 25 September 2008

paulson.jpgLast week US Treasury Secretary Henry Paulson unveiled a dramatic plan to arrest the present financial crisis and prevent future economic catastrophe. It is to cost $700bn.

It sounds like a breathtaking break from neo-liberal philosophy. It’s not really. Neo-liberalism was always a giant lie. Homeless people don’t matter. People in danger of losing their jobs in a recession don’t matter. But, when it comes to banks and billionaires, self-reliance is for the birds. These people are hapless bums.
 
Capitalism has failed. Period. Print E-mail
By Rob Sewell   
Tuesday, 23 September 2008

1929.jpg“I like thieves. Some of my best friends are thieves. Why, just last week we had the president of the bank over for dinner.”  W.C. Fields.

The capitalist system is in the throes of the worse financial crisis since the Great Depression. This is the view not only of the billionaire George Soros, but also of the International Monetary Fund, the custodian of the capitalist system, and all the serious capitalist commentators. 

 
Socialism for the rich, capitalism for the poor Print E-mail
By Michael Roberts   
Monday, 22 September 2008
socialism-for-the-rich.jpgAfter a week of turmoil on financial markets, on Saturday 20 September President Bush said he was proposing to spend $700bn of taxpayers’ money to buy the rotten mortgage assets held by the banks on Wall Street.  He said he was doing this to help the average American family with their homes and jobs.
 
Financial meltdown deepens Print E-mail
By Michael Roberts   
Tuesday, 16 September 2008

lehman.jpgAs I write, financial markets in Wall Street, New York, the City of London and all over are in turmoil.  In just 24 hours, two out of the four largest investment banks in the US have disappeared.  Lehman Brothers, around for 158 years, has declared bankruptcy and 25,000 employees around the globe have lost their jobs. 

Merrill Lynch, the world’s largest investment bank, has been taken over by the largest high street bank in America, the Bank of America.  Bank America was virtually ordered by the US financial authorities to take over Merrill Lynch, paying $50bn.  Otherwise, that bank too would have gone bust, putting thousands more out of work.  Even worse for capitalism, it would have meant that both Lehman and Merrill Lynch would have defaulted on their contracts and obligations and thus brought down many other banks (15 were rumoured to be in trouble). 

 
Fannie and Freddie nationalised – let’s take over the rest Print E-mail
By Mick Brooks   
Monday, 08 September 2008

fannie.jpgThe Financial Times has hailed the effective takeover of Fannie Mae and Freddie Mac by the US government as “what could become the world’s biggest ever financial bail-out.” Treasury secretary Henry Paulson has promised he will pump in ‘unlimited liquidity.’ Don’t you wish the government would grant you unlimited liquidity? When it comes to the food and fuel bills of the poor and the working class, the British and American governments find that the cupboard is bare. But now it’s not bare. Predictably markets all over the world have breathed a sigh of relief. Fannie and Freddie have effectively been nationalised – and big business thoroughly approves!

 
The credit crunch – one year on Print E-mail
By Michael Roberts   
Tuesday, 12 August 2008
forsale.jpgAs I write, it is one year since the great global credit crunch began. On 6 August 2007, America’s second-largest mortgage lender American Home Mortgage Investment Corp filed for bankruptcy.  Three days later, France’s biggest bank, BNP-Paribas announced that it was freezing redemptions on three of its investment funds in sub-prime mortgages.  Immediately, the European Central Bank announced it was injecting E75bn into the financial system.  Only a few days later, the US Federal Reserve Bank announced a 50 base points cut in its funds rate and injected extra liquidity into the system.  The credit crunch had begun!

One year on, this earthquake in the global financial system has left banks, insurers, pension and municipal funds, hedge funds and private equity companies tottering and falling.  Collateral damage has been immense and the after- shocks are still to come.

 
Outsourcing in the UK: how widespread? Print E-mail
By Fred McDowell   
Tuesday, 12 August 2008

cleaners.jpg“Outsourcing of public services to the private and voluntary sectors has almost doubled to close to £80bn in little more than a decade and makes up a far larger part of the economy than previously thought.” (Financial Times 09.07.08) A third of all public services – far more than previously thought – are now delivered by the private and voluntary sectors, according to this report commissioned by the government.

 
The WTO's Last Gasp? Print E-mail
Monday, 04 August 2008
Most had already proclaimed it dead, and were surprised to learn that the WTO was meeting in a frenzied attempt to conclude its "Doha Round" negotiations. The prospects for wrapping up a deal were slim, and many expected the WTO to lapse quickly back into coma. With the collapse of the talks, that is precisely what happened.
 
Poor old Mervyn Print E-mail
By Andy Viner   
Tuesday, 22 July 2008
Mervyn KingWasn’t it good of Mervyn King, the Governor of the Bank of England, not to accept a pay rise of £100,000? What a model/example of restraint to us all! Instead he would only take 2.5% pay increase each year for the next five years, out of his annual salary of £289,551. We must feel sorry for him. That means he will only get a bit more than £7,000 pay increase this year. How did anyone work out that he should get such a pay rise in the first place? The way the economy has been going over the last year, it can’t be .
 
Back to boom and bust Print E-mail
By Eric Hollies   
Thursday, 17 July 2008

boom-and-bust.jpgFor ten years Gordon Brown has been mouthing the phrase “no return to boom and bust”. Now we see it is meaningless. Darling in his Mansion House speech in June also brushed off the threat of recession, asserting that “our economy will continue to grow.” But there has been a boom and it has turned to bust. Brown and Darling are denying what is going on in the real world before their eyes. They can’t do anything about the recession since they are not prepared to act against the source of the problem, the capitalist system. More and more people will begin to see that if the only way we can control the economic system and make it work in our interests is if we own it.

 
Why you should worry about Fannie and Freddie Print E-mail
By Mick Brooks   
Monday, 14 July 2008
fannie-mae.jpg Fannie  and Freddie Mac sound like two characters out of the old West – with her in a gingham dress and him in a check shirt. But Fannie Mae is the Federal National Mortgage Association and Freddie Mac is the Federal Home Mortgage Corporation. They’re both in big trouble and, if they’re in trouble, so are we.
 
Hedge funds, speculation and capitalism Print E-mail
Wednesday, 09 July 2008
hedge.jpgHedge funds are in the news again. They don’t much like being in the public gaze. We wonder why. Does their speculation cause prices to go up? Do they drive firms into bankruptcy so workers lose their jobs? These are the questions being asked. Let’s see what they get up to.
 
Black swans and the economic crisis Print E-mail
Friday, 20 June 2008
black-swan-theory.jpgBritish capitalism is in big trouble.  The official annual inflation rate has hit 3.3%, its highest level for 16 years. The governor of the Bank of England, Mervyn King, has been forced to send a letter to the Chancellor of Exchequer, Alastair Darling, to explain why the Bank has been unable to keep inflation from rising at more than 2%, which is the target set by the government for the Bank.
 
Bradford and Bingley collapse brings UK recession closer Print E-mail
By Socialist Appeal   
Monday, 02 June 2008

bradford-and-bingley.jpg Bradford and Bingley are the latest bank to catch a cold in the present financial crisis. They’ve declared a loss of £8m for the first four months of 2008. This compares with £108m profits they made in the same period last year. The main reason for the losses is because they’ve had to write down £89m of their assets. ‘Write down’ is banker-speak for the fact that they realise they can whistle for their money.

 
Wishful thinking Print E-mail
By Michael Roberts   
Tuesday, 20 May 2008
stockmarket-stock.jpgStock markets around the world have been rallying. They are up 15% since they hit a low for the year in mid-March and they are now hardly down in value since credit crunch began last August. Investor optimism is rising that the great global credit crunch is nearly over. Now that the financial sector is in trouble, the weakness of capitalism in its downphase of profitability is being exposed. It is paving the way for a serious worldwide economic recession, despite the current optimism of the stock markets.
 
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