Frederick Douglass

"Power concedes nothing without a demand. It never did, and it never will. Find out just what people will submit to, and you have found out the exact amount of injustice and wrong which will be imposed upon them..." Frederick Douglass

Wednesday, January 26, 2011

War On Labor And Other Activists

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Blogger's Note

re The Revolution In Tunisia: Nawaat means 'the core.' [ Thx Sam ]


If you are interested in the revolution in Tunisia you must read this:

The Revolution In Tunisia ( part two )

To illustrate how universal the hostility to the so-called unity government is, here's an article from Khalil Amiri, London investment banker. Below it is his bio from the "about" section of his blog:


Khalil Amiri is a financial strategist in Capital markets in London. He is a former assistant professor of Computer Science at Imperial College and worked as a researcher at IBM (NY) and HP Laboratories (CA). He holds a PhD from Carnegie Mellon University, Pittsburgh, USA. He likes to debate and write on politics, economics and technology, especially as they relate to Tunisia. He is a firm believer in free markets and in the value of and need for rewarding individual enterprise. But he is also an advocate of the essential role that governments ought to play in social support programs, education and healthcare to all citizens. He has therefore been branded by friends as a “cafe socialist”, as they claim he espouses “socialist” values in over-coffee debates while working in investment banking during the day. While he thinks this criticism is unfounded and unfair (wa saoufa you7asaboun, bikolli 7azm), he paid tribute to their wittiness by naming the blog after it.

The Revolution In Tunisia

Here's a great article from a great website:

[Unfortunately most of the material at Nawaat is in French, a language I can read fairly well but in which I lack fluency. If anybody can translate something from that website ( or any other for that matter ) I will be only too happy to post it here. Also, if anybody can translate "nawaat" from the Arabic for me I'd be grateful.]

Thus far I've been watching the rebellion in Tunisia with guarded optimism. Quite often these uprisings are the work of misanthopes at the IMF or World Bank who wish to dislodge a government because they disapprove of its policies, or they wish to gain control over some industry or resource. If this is the case, then it's much more likely the latter as the deposed lackey, Ben Ali, was most amenable to the merciless "free market" policies crafted by the international banking mafia. However, if there is something in Tunisia which the Lords of Capital covet, I have been unable to identify it. I've scoured the trade/industry sites for any mention of Tunisia and have found none. As far as I can tell, the revolt is autochthonous, that is to say a genuine, uncontrived, uninduced event. But whether it is autochthonous or the predatory machinations of capital, The people of Tunisia are winning, and that's worth celebrating.

Please do not believe what you are reading/hearing in the Western press. Here's a handful of their lies:

First, they are trying to convince the public that it was a release by Wikileaks that caused the rebellion, this despite the fact that it was over a month old before the "leak." In fact, the leak occurred two days after Ben Ali fled the country. This is a fairly desperate attempt at damage control.

Second, our media is telling us that the opposition leader, Moncef Marzouki, is a popular figure among Tunisians whom they wish to head the new government. CNN ( CEE No News ) aired video of Marzouki landing in Tunis and being mobbed by the adoring crowd. When one reads the Tunisian press one gets a very different picture. Here's a video ( scroll down ) in which Marzouki tries to participate in a street demonstration and is attacked by by-standers. I don't know what's being said as the exchange is in Arabic ( presumably ), but the caption says that he was subjected to insults and accused of being an agent of the West:

Third, we are told that the people of Tunisia support the so-called unity government. It is difficult to find any support, even mainstream, for this idea. Everybody in Tunisia is calling for an entirely new government. In fact, not only are most opposed to the "unity" government, many are calling for these hangers-on from the Ben Ali Regime to be prosecuted. Here's an excellent article typical of what one finds perusing the local press. It's in French, the title says something like "RCD ( Ben Ali's ruling party ) out? All the parties have to go!" This one is more radical than most, but the contempt for the unity idea is representative:

Fourth, our subverted media is insisting that the rebellion is subsiding. It's escalating. The largest union in Tunisia has called for a new round of strikes and the number of demonstrators clogging city streets is increasing now that the police have been thoroughly tamed.

I would love to tell you that the revolution in Tunisia is an anti-capitalist one, but it doesn't appear that a majority of the populace yet see the need for direct democratic control over those institutions which affect their lives. I'm not optimistic that that will change. Nevertheless, the people have rid themselves of the wretched, soulless little man who betrayed them to capital, and now have their oppressors running scared. So I say vive la revolution! Le pouvoir au peuple Tunisien!

Monday, January 24, 2011

Class War Alert: Demonization Of Public Employees In New York Continues

In the city where the economic collapse of '08 was planned and executed, there the richest denizens, the titans of capital, are demanding that public sector employees take cuts in pay and benefits. It is the exorbitant wages earned by those at the bottom of Gotham's income spectrum, such billionaires as media mogul Mort Zuckerman insist, that are bankrupting the city and state of New York and inhibiting an economic recovery.

Creating animosity within the working class, in this case between public and private employees, is an old strategy. It goes back at least as far as the Roman Republic and the Gracchus family, probably much farther than that.

Ask the average working-class American if he supports free enterprise and he will most likely affirm. Ask the same person how he feels about Wall Street and you might hear invective. Would that I could live long enough to see the day when people figure out that they are the same thing.

Sunday, January 23, 2011

The Struggle Against Austerity Measures In New York

Labor Notes editor Mark Brenner interviewed on WBAI ( major progressive radio station on the East Coast ).

Worldwide State Terror Against Labor Continues

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The Grand Deception ( part six ), Matter And Anti-matter

MBS were thousands of loans cobbled together and sold as bonds, collateralized debt obligations ( CDO ) are bundles of MBS, or bundles of tranches of MBS.

A CDO might sound like a loan secured by some type of collateral, it's nothing of the kind. When the housing market could no longer keep up with Wall Street's demand for MBS to sell, the investment banks began to combine tranches from multiple MBS, usually the most risky, and sell them as bonds. The marketing angle was that while each piece of the CDO was high risk, together they would be less precarious as it would be considerably less likely that they would all default. What this did for the banks, beyond giving them new product, was to enable them to take the lower-rated tranches of MBS and raise their rating. This made them easier to sell ( or so the argument goes, more on this later ) as most bond buyers avoid junk. These CDO followed they same tranching and redemption regime as the underlying MBS.

So mortgage lenders made loans; sold them to Wall Street; the banks bundled them into bonds and then when demand outstripped supply, they repacked and repackaged and repackaged. Inevitably, some market speculators began to understand that these mortgages upon which the new business model was based were not likely to be repaid, and they began to look for ways to short the housing market. Fortunately for them, our friends at Goldman Sachs had invented something called a credit default swap. A CDS is an insurance policy on an investment. Even more fortuitously for prospective shorters, JPMC went one step further and invented the naked credit default swaps. This enabled speculators to buy insurance policies on investments in which they played no part. With a NCDS, one didn't have to own the CDO to buy a policy against it. A NCDS is simply a wager on whether a bond will be redeemable.

Like any insurance policy, one has to pay a premium. For speculators shorting CDO, timing is especially important. Say you have a ten million dollar policy against a CDO default, and that your premiums are a million per year, if the CDO busts a year after you bought the policy, then you made nine million: you paid one year's premium ( a million dollars ) and got ten million from your policy. If the collapse happens two years after you took out the insurance policy, then you make only eight million, and so on.

So why were the investment banks so keen to get repackage tranches of MBS to get better ratings? There are bond buyers who prefer non-AAA rated bonds due to their higher yield, it should make no difference to the bank as they make as much from the sale of BBB as AAA bonds. What I can allege and what I can prove are different things, but here are some factors to consider:
While riskier bonds have better yields and may be a better investment, if one is considering shorting them then lower-rated bonds present the thorny problem of higher premiums. Obviously, it costs more to insure high-risk bonds. Using the example above, if the ten million dollar policy has yearly premiums of 1.5 or two million dollars, the NCDS is considerably less profitable.

So why would the banks care about this as they only sell the CDS and are not themselves at risk? The answer is proprietary trading. Banks not only buy and sell financial instruments on behalf of their clients, they can, within certain ( woefully insufficient ) limits, engage in investing themselves. Indeed, the larger banks and the hedge funds they own are the largest investors of all. JPMC and Goldman Sachs, the largest brokers of MBS and CDO, were also the largest buyers of CDS. While they were selling CDO and MBS to their clients who would later sue them, they were buying insurance policies against those same investments. Yes, that's right, they were creating financial vehicles, telling their customers that they were worthwhile investments, and then placing bets with their own money that these bonds would go belly-up.

If you are starting to think, dear reader, that the investment banks pimped these CDO to their unsuspecting customers, then bought CDS at just the right time, and got out of the CDO business just before the crash occurred so that they had no liability on their books, well, guess what? You are right. That's precisely what did happen.

One of the greatest myths of the collapse was that JPMC and GS were in danger of collapse. Their only problem was that the insurers who had written CDS for them would not be able to pay. Fortunately for them Hank Paulson did his infamous face-boite and decided not to buy up toxic assets, which is what Congress allocated the requested bail-out money for, but instead to use the embezzled funds to pay off GS's CDS on behalf of AIG and other insurers. How good for them.

One last thing to ponder: It was suggested that the bail-out money be used to pay off the mortgages that were in default, and make other arrangements for defaulters to pay the government. After all the argument was that the credit crunch which brought the economy to a standstill was due to the lack of money coming from mortgage borrowers. The government lending money directly to home-owners would resolve this problem. Again, what I can say and what I can prove are different, but if this had been done the banks would not have been able to keep the bankrupted properties, and the insurers who issued CDS would not have had to pay on these policies. These would be great outcomes for the public, but less lucrative for those who held CDS policies.

Monday, January 17, 2011

Deja Vu All Over Again

Despite how it might appear, the reason our overlords in high finance periodically sabotage our economy is not the short term profits they harvest from its ruins--that's just a perq'--the principal motive is class war. The poorer and weaker we are, the stronger they are.

Isn't it odd that during all those years when MLK campaigned for racial equality, for the right of black wage slaves to live in parity with white wage slaves, there was not a single attempt on his life? It was not until the last years of his life when he spoke out against war, became a spokesman for organized labor, and called for more equitable distribution of wealth, that he was killed by a "lone nut." It makes no difference to the Man where His servants sit, so long as ride in His bus, over to His factory or office, and fatten Him with the fruits of their labor. Disputes in the servants' quarters are of no concern to the lord of the manor, so long as production continues apace. On MLK Day, it's important to remember that it's not about race, it's about class. Dr King understood that when he attempted to fashion a "poor people's army," we should too.

Thursday, January 13, 2011

Home Sweet Gone

Think of how profitable this has been for the banks. When they "lend" money for mortgages, there is no actual transfer of funds from the lender to the borrower, new money is created and credited to the borrower. It doesn't cost the bank a cent, and they get the property if the borrower defaults. In each of these foreclosures, the bank collected at least some payments, perhaps several, from the borrower, none of which are they obligated to return. And when the borrower is unable to keep paying, the bank gets the property free of charge. As Al Capone once astutely observed:
"Wall Street is the crookedest street in America, what a fucking racket they got."

Class war coming to your living room.

Tuesday, January 11, 2011

Is There Really A Budgetary Crisis?

Public and other employees have to take pay and benefits cuts but there's enough money for increasing the Pentagon's budget:

Thursday, January 6, 2011

Sunday, January 2, 2011

Just in Case You Thought You lived in a Democracy

Our role on the plantation? Sometimes we're the slaves, and sometimes the cotton.