Is the myth of ethical banking finally being exposed?

Of course there can be no such thing as nice capitalism or an ethical capitalism it just doesn’t appear in the capitalist mindset. So it comes as no surprise to me that the Co-Op bank is finally selling out to the market not that there were against the market before hand just the way it works. It was even reported a few years back the Co-op had funded and invested in arms companies and other such dodge outfits. Ethical I think not.... "American hedge funds have forced the Co-operative Group to relinquish control of its banking arm in a deal that raises concerns about its ethical approach to business for 4.7 million customers. After months of intense talks with two US hedge funds, the UK's largest mutual – and owner of pharmacies, grocers and funeral homes – was forced to cede majority control in the bank as it battles to plug a £1.5bn capital shortfall. The latest twist in the attempts by the Co-op to stave off nationalisation of the bank means that the group, formed by the Rochdale Pioneers in 1844, will be left with a 30% stake when the bank is floated on the stock market rather than the 75% it had originally hoped for when the rescue deal was first announced in June. The Unite union's national officer, Dominic Hook, said the inability of the mutual to keep control of the bank was "a tragic day for the UK". He added: "This is dreadful for the staff, customers and the wider banking industry. This may mean customers will have even less choice on the high street and means we will have yet another finance company seeking shareholder returns over better banking." The loss-making bank was forced to admit it had incurred another £105m of losses caused by mis-selling products including payment protection insurance. Euan Sutherland, the former boss of the retailer B&Q who became chief executive of the Co-op in May, said the renegotiated deal was a good one for the group and its bondholders even though it had forced the group to redraw its original plan. "This is the first bank to be rescued and to survive as a standalone entity without taxpayer money," Sutherland said. But the dramatic change in the ownership of the bank, which is likely to take place later this year, led to concerns about cultural change in the bank, its future approach to its ethical stance and the job prospects of its 10,000 staff. It is also a blow to the government, which had been hoping mutuals would create vast new challenger banks on the high street. Co-op Bank had spent a year negotiating to buy 631 branches from Lloyds Banking Group before abandoning the ambitious scheme in April when its problems began to emerge. Sutherland's predecessor, the Co-op veteran Peter Marks, who led the proposed takeover of the Lloyds branches, will face questions from the Treasury select committee of MPs about when he knew about the losses in the bank. Many disgruntled customers of the bank took to Twitter, one saying: "Closing my account tonight after 23 years run by members for members you have let us down." Another said: "I think I'd rather you'd have taken taxpayers money than to sell out to Corporate Vultures!" The hedge funds that have scuppered the Co-op's original plans are known for their activism at troubled companies. Aurelius Capital Management, best known for forcing Argentina to pay out on its debts, and Silver Point Capital, linked to distressed groups such as Lehman, are thought to have amassed their stakes in the bank's bonds after it was downgraded to junk in May. They had been fighting for a bigger a stake in the bank and in convincing the Co-op to reduce the group's stake to 30% they are also taking bigger losses on their bonds. The bondholders are now expected to put £1bn into the bank – compared with £500m previously – while the Co-op will now inject less than the £1bn it had originally been stumping up to prop up the bank. Led by Mark Brodsky, Aurelius has been involved in debt restructurings as diverse as port owner Dubai World and the US publisher Tribune, owner of the Los Angeles Times. Silver Point Capital is run by two former Goldman Sachs employees, Edward Mulé and Robert O'Shea, and has a wide range of investments covering broadcasting – it bought two US TV stations out of bankruptcy – as well as car-makers and financial services and was involved in the bankruptcy of Hostess, the US food company best known for its Twinkies cakes. The Co-op Group is thought to be ready to make a concession to 15,000 private investors – who were "very elderly and vulnerable", it had been warned. It is expected to swap their bonds for new ones that continue to pay them regular income streams rather than handing those shares. Trading in bonds has been temporarily suspended. The precise details, which are still being hammered out, are likely to be revealed in the coming days. Sutherland said customers should not be concerned about the changing structure of ownership. The Co-op Bank has been a plc for some time but it is fully-owned by the mutual group which is now relinquishing total control." Article in today’s guardian http://www.theguardian.com/business/2013/oct/21/coop-group-bank-us-hedge-funds

Democratic deficit in Europe

Right across the Euro zone and beyond the crisis in capitalism is deepening by the day. When all seems calm and stable another shock is set off the latest in Cyprus where people’s personal bank accounts have been raided by 10% on their savings to bail the country out. Were people asked first? No they weren’t this is the democracy of the Euro in action. Or not. Since the onslaught of austerity was placed on the shoulders of working people and the poor across Europe people’s democratic rights as limited as they always are under capitalism are being slowly eroded under our very eyes. This crisis is not just a financial crisis it’s a series of crisis’s and one that myself and certainly the Committee for Workers International CWI including our own MEP Paul Murphy MEP have pointed out for a while now the democratic deficit we are seeing in Europe now. The ruling class is not afraid to take away democratic rights if their system or profits are under threat and wish to safe guard their interests. Although now Greece has a elected government back in power and Italy well who knows they are still trying to figure something out already we have seen the lengths the ruling class will go to safe guard their system by installing their own men in power. The imposition of the 'technocrats', in reality bankers, in both Italy and Greece, shows the seriousness of the crisis for the capitalist class nationally and across Europe. To try to save their system across Europe, the democratic rights of people to decide who will govern them have been trampled on. The markets, through the Troika of the IMF, EU and ECB, have usurped democracy and placed their own men in charge to ensure that the cost of this crisis is placed on the shoulders of the working class, unemployed and poor. The technocrats elevated to rulers in Greece and Italy, Lucas Papademos and Mario Monti, are the banking sector's choice of leader. Monti was an as advisor to Goldman Sachs until his appointment. Papademos was a former vice-president of the European Central Bank, and has publicly been opposed to the write down of Greek banking debt as it would hurt the banking sector. Goldman Sachs was described in a 2010 Rolling Stone article as: "The world's most powerful investment bank" and "a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money." It can manipulate "whole economic sectors for years at a time, moving the dice game as this or that market collapses and all the time gorging itself on the unseen costs that are breaking families everywhere - high gas prices, rising consumer credit rates, half eaten pension funds, mass layoffs, future taxes to pay off bailouts." These 'technocrats' have been presented to the world as the experts who will be able to solve the financial crisis, as some sort of wise men who can rise above politics. It has been put out that these men will put the 'national interest' first. This is a lie. The 'dictatorship of the technocrats' is an attempt to divorce economics from politics. The technocrats will act, not in the interests of the mass of the people, but in the interest of the people they represent - the financial elites. The protest movements and strikes that have swept across Greece and Italy need to be intensified against this anti-democratic and anti-working class move by the national and European establishment. No matter how much they try to persuade us that the technocracy is above politics, a mass movement of workers, the unemployed and young people which builds its own party, can brush away this dictatorship of the markets and start to create a society that is democratically run in the interest of the mass of the people.

The markets rule

"Can there be any doubt but that we are witnessing a full frontal assault on democratic rights by European bondholders, bankers and speculators facilitated by the leadership of the European Union?"

Joe Higgins, TD (member of the Irish Parliament), Socialist Party (CWI Ireland)

As recently as a year ago when I and others on the Left wrote and spoke about ‘the dictatorship of the financial markets’ many people thought we were exaggerating. However after the events of the past few weeks, can there be any doubt but that we are witnessing a full frontal assault on democratic rights by European bondholders, bankers and speculators facilitated by the leadership of the European Union?

The political and financial establishment in the United States responded to the financial collapse caused by the insane, greed driven, speculation in the sub prime housing market and the toxic debt packages that were traded among the world’s most ‘prestigious’ banks, by allowing the very same authors of the disaster to write their own bailout terms and ram them down the throats of the American people.

Former and serving chiefs in the world’s biggest investment bank, Goldman Sachs, were centrally involved. Goldman Sachs made a fortune on the sub prime scene at its height and then, with consummate cynicism, made another fortune speculating on the inevitable crash of this gigantic pyramid scheme built on the exploitation of poor and middle income Americans.

The first thing you need to know about Goldman Sachs is that it is everywhere’, wrote Matt Taibi in Rolling Stone Magazine two years ago. Comparing it to a vampire squid sucking the economic lifeblood of humanity, he continues, ‘…the history of the recent financial crisis which . . .doubles as a history of . . . the suddenly swindled dry American empire, reads like a Who’s Who of Goldman Sachs graduates.’

After the dramatic events of the last few weeks, The Rolling Stone writer could now say much the same of the European Union response to the disaster in the Eurozone.

Silvio Berlusconi has just been peremptorily removed from office at the diktat of the speculators in the European financial markets, not because he was a despicable charlatan, but because they weren’t confident he had the authority to force through the drastic austerity on the Italian people which they see to be necessary to recovering their gambling debts. The replacement they have secured as the new Italian Prime Minister, Mario Monti, is a ‘graduate’ of Goldman Sachs, having been an international adviser to the bank.

The new President of the European Central Bank, Mario Draghi, is also a graduate, a very senior graduate in fact. He was a Vice Chairman and Managing Director of Goldman Sachs. This is the same bank which conspired with a right wing Greek government to falsify the national accounts so that Greece could join the Eurozone. The same Goldman Sachs also which specialises in speculating against the currencies and debt of weaker economies in order to make massive profits oblivious to the social dislocation and human suffering which this activity causes to working people and the poor in the affected countries.



Mario Draghi

In Greece former Prime Minister Papandreou has also been removed at the diktat of the markets and the leadership of the EU. The new Prime Minister Lucas Papademos was a major banker, Governor of the Bank of Greece in fact from 1994 to 2002. He is now tasked with bludgeoning the Greek people with a savage intensification of austerity and massive privatisations. Like Mario Monti in Italy, he is really a direct representative of the very sharks in the financial markets whose activities caused the current frightful crisis in the first place.

Monti and Papademos are both members of the Trilateral Commission a secretive organisation founded by US oligarch, David Rockefeller, to coordinate the strategies of US and European big business. In addition Monti is a member of the Bildergerg group an even more secretive and sinister strategising body for the world’s major capitalists.

Monti and Papademos have been foiseted on the Italian and Greek people respectively without ever having been elected. Monti is joined in the new Cabinet by an equally unelected conglomerate of representatives of big business and banking interests.

In all this we see the reality of what it takes to ‘satisfy the markets’, ‘give confidence to the markets’ and ‘reassaure the markets’, phrases faithfully repeated without questioning by just about every establishment commentator and journalist in Ireland and all over Europe. Shamefully the political establishment of this State, like their European counterparts,connive in this crushing of the democratic rights of millions of Europeans in the interest of the private profit of the private financial corporations which orchestrated these ‘coups d’etat’.

There is only one solution to the present crisis that is so destructive of society. The power of the financial markets must be challenged and broken by mass action of the ordinary people of Europe. The financial institutions must be brought into public ownership and democratic control and run for the benefit of the big majority.

The ruling class let their mask slip revealing who really runs the world

in this eye opening video on you tube
http://t.co/iQzsPYzR

a clip from the BBC news channel yesterday they interview a hedge fund invester to talk on teh global economic crisis. He reveals how the ruling class capitalists really see the world and who really has the power. He stated that there is nothing anyone can do about this oncoming crash and its going to be huge. Far bigger than 2008 and we must get prepared for this as people are going to loose a lot of money.

he went on to say when questioned what can governments do to give confidence to the markets. He replies that is a tough question. Fact is now none of the investers have any confidence in any rescue package and are dreaming of a recession as they see it as a way of making money.

The stark honesty of this guy tells us for the first time how the ruling class elite work and how they see a recession. They do not care about people or the destruction it may cause the social impacts only making money.

The guy goes on to say governments do not rule the world, Goldman sachs do. A very telling point i think as i think he is spot on. The governments do the capitalists dirty work making investing and making money easier. They really have no power at all when it comes to the running of their system.

I think as marxists we have known this for a very long time and have been warning people that this is coming long before others in the media caught on. This next crash is going to eclipse the 2008 banking crash. Whether we can recover or be left in a stagment flat economy with little to no growth for a very long time it remaisn to be seen. But it does bring back the point that all cuts need to be opposed limiting the cuts as some on the left seem to strive for will turn out to be fruitless and make no difference at all. We must oppose all cuts to jobs and services and look to push this system down. The working class when strong and organised is f ar more powerful. Class war is really kicking off and we must be ready for the fight of our lives. We simply cannot loose many are saying.

I'd recomend all to watch t hat you tube video though and just think what it really means and who holds the power. It is not government or the tories as you are told. They are just the puppets of a capitalist system ripping this planet and its people apart for what ? for money dirty filthy money and that is all they care for.

We need a different system a system based on peoples needs over greed and profit. A system of socialism where the wealth is not concentrated among a few but the many.

Join the fight today and resist wherever you can. THis is not just about the tories being incompetent thsi is far more than this now.