Wednesday, May 2, 2012

May 2

Greeks protest their government's austerity measures, May 2011

Last October the far-right party Chrysi Avgi, also known as Golden Dawn, won its first seat in Athens city council. Since then it has held several anti-immigrant rallies in areas with large migrant communities. Fascist activists are also alleged to have carried out random revenge attacks on innocent migrants after a Greek man was stabbed to death in central Athens in March.
‘I never come out of the house during the night, because I’m afraid of the fascists,’ says Abolzar Jalily. ‘I came from Afghanistan to be safe.’ Jalily left his home after receiving death threats because he worked as an interpreter for foreign forces. Now he faces a fresh threat from a violent fascist movement operating with near impunity in downtown Athens, where Jalily lives with his family.
‘In one attack the fascists killed some refugees and injured more than 150 people. They beat them very badly and they could not go to the police because they would do nothing for them,’ he says.
Tania, a Bulgarian immigrant who has lived in Greece for 10 years, says she is too afraid to travel downtown after hearing stories about Albanians being randomly attacked. ‘There are some fascist organizations that are trying to blame foreigners for many things that happen here, one is taking their [Greeks’] jobs.’
Conditions for migrants in Greece are likely to deteriorate further. The new austerity measures will mean greater penury for those who are already last in line for state support and living wage jobs.
‘I am a single mum and I have no help from the government,’ explains Tania, who is a maths and physics graduate, but works as a cleaner and nail technician. If you are a foreigner here, you have no social services to help you.’

Sound familiar? Far right candidate Marie Le Pen garners 6 million French votes in the latest national election. Alabama, Arizona, and other states implement punitive anti-immigration laws. All of this has the effect of diverting our attention away from the looming debt crisis that will consume us all.  How quickly we forget. 

Pundits and politicians like to send up the Greek example as one to be avoided. Here is an excerpt from ABC news intended to enlighten us.

 Why is Greece in debt?
Like any state (or person, for that matter), it spent more money than it took in. After the switch to the euro, the traditionally strong Greek public sector saw wages rise to ultimately unsustainable levels. To compound this, the retirement age in the country is low (by Western standards) and benefits are generous.
But that alone is not enough to sink an economy.
Mass tax evasion, on the other hand, can certainly do the trick. And it did in Greece. When people and businesses don’t pay their taxes, it limits revenue. So when the money inevitably ran out, Athens turned to European banks for loans. Soon, the government was borrowing billions and those debts, like subprime mortgages in the United States, were often repackaged as complex commodities  and sold off around the continent. Everyone, especially banks in France and Germany, wanted a piece. Now they have it.

They had help. From wiki: (Goldman is being criticized for its involvement in the 2010 European sovereign debt crisis. Goldman Sachs is reported to have systematically helped the Greek government mask the true facts concerning its national debt between the years 1998 and 2009.[71] In September 2009, Goldman Sachs, among others, created a special credit default swap (CDS) index to cover of high risk of Greece's national debt.[72] The interest-rates of Greek national bonds have soared to a very high level, leading the Greek economy very close to bankruptcy in March and May 2010 and again in June 2011.[73] Lucas Papademos, Greece's new prime minister, ran the Central Bank of Greece at the time of the controversial derivates deals with Goldman Sachs that enabled Greece to hide the size of its debt.[74] Petros Christodoulou, head of Greece's debt management agency began his career at Goldman Sachs.[74] Mario Monti, Italy's new prime minister and finance minister, who heads the new government that took over after Berlusconi's resignation, is an international adviser to Goldman Sachs.[74] So is Otmar Issing, former board member of the Bundesbank and the Executive Board of the European Bank.[74] Mario Draghi, the new head of the European Central Bank, is the former managing director of Goldman Sachs International.[74] António Borges, formerly head of the IMF's European Department is a former vice chairman of Goldman Sachs International.[74] Peter Sutherland, former Attorney General of Ireland is a non-executive director of Goldman Sachs International. Karel van Miert, former EU Competition Commissioner is an ex-international adviser to Goldman Sachs.[74] These ties between Goldman Sachs and European leaders is an ongoing source of controversy.[74] )

Why does Europe — indeed, the world — care so much about Greece’s debts?
One of the perceived perks when Europe got together on a single currency (Greeks, for instance, gave up the drachma for the euro) was that a strong Europe could prop up an individual state in a time of need. But what’s happened is that Europe itself has become too weak, in the aftermath of the global financial meltdown, to bite the bullet on a country like Greece. A default would shatter otherwise monetarily strong countries like Germany. The Germans, like the Americans, would be left with a host of “too big to fail” banks ready to do just that. 

It is critical that we remember how we got here. We can't be blinded by big numbers. We can't scapegoat the 'immigrant" as the walls of our institutions collapse around us. They didn't create this monster. They didn't benefit from it. The pigs who did are being driven to work where they continue to push this horrific system to the breaking point.  And most of us live in the false sense of security that it won't effect us. It has, it is, and it has only just begun. The very same forces and institutions that are foreclosing on homes are foreclosing on countries. The "bond vultures " as they are known in the trade will be paid. An example:

 In the past three months, US asset managers Loomis Sayles and BlackRock, Swiss private bank Julius Baer, French asset manager Natixis, German investment fund StarCap and Luxembourg-based Ethenea Independent Investors were among a raft of funds to have bought Greek sovereign debt in the secondary market.
Between them, they acquired around €150m (£133m) of Greek debt, public filings on Bloomberg show. Market sources said there is still a lot of activity in Greek debt, despite the crisis, with data from public filings just the tip of the iceberg.
On average, Greek debt is trading at around 50% of face value, but markdowns are smaller for short-dated bonds and larger for longer-term debt. If bonds are redeemed at par as part of a second bail-out, vulture funds may as much as double their money, debt traders said. The Telegraph. 
In plain English:  These vultures win if the government pays the bond holders at face value. The government is desperate to satisfy these bond holders demands because if they don't, if they default, it takes them out of the system for the future. But lets name it. There is no "government entity" that pays as we are witnessing. It is the Greek people who are out the money. They will sacrifice jobs, pensions, health care so that these vultures can feed. The profits of these vultures is at the expense of the Greek citizenry. It is of course perfectly legal. It is what capitalism is all about.

This is one tiny trade. Imagine when the calls come in ( the bonds are due) to retire the outstanding debt ( bonds) that is on the books. The Economist publishes a debt clock here.  This indicator of where the 40 trillion dollars of debt is located only identifies the numbers on the books.  
Read the story of the 300 trillion dollars worth of derivitives here.  No one knows who holds these instruments nor,  how they will be cleared. 

OWS organizers bristle when outsiders tell them what they might want to focus on, what are the issues to be addressed, and what they might propose to alleviate the problems.  They want to keep the movement amorphous, open and horizontal. May Day is over. The "black block"  has wreaked its havoc, peaceful demonstrators have made their presence felt,  and nothing, nothing has been done to alleviate the problem. Turn away, leave it to the bankers to be the only ones who know how this game is played, and we will be consumed by their greed.  We have to get smarter. We have to do the hard work of averting  this disaster. It isn't going to happen as a result of a one day protest. We have to build a new economy. 

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