We had a stock market crash in the year 2000, and then in 2008, we had a crash in stocks and real estate. The next crash is going to be in stocks, real estate and bonds — including a lot of sovereign debt, corporate bonds and a whole lot of other bonds that will be crashing at the same time. So, it will be all of the standard financial asset classes, including the traditional ‘safe haven’ of bonds that are going to be crashing at the same time that the world monetary system is falling apart.Read More
“Such is the world of user acquisition in tech today: as growth becomes increasingly expensive, somebody must be footing the bill for all of this wasteful spending. But who?”
“The first, as you might guess, are early stage funds’ limited partners, particularly the future limited partners that invest into the next fund. Their money, after all, is what pays the VC’s newly trumped up management fee: marking up Fund IV in order to raise money for more management fees out of Fund V, and so on, is so effective because fundraising can happen much faster than the long and difficult job of actually building a business and creating real enterprise value. It might take seven to ten years to build a company, but raising the next fund happens in two or three years.”
“The antidote is two-fold. First, we need to return to the roots of venture investing. The real expense in a startup shouldn’t be their bill from Big Tech but, rather, the cost of real innovation and R&D. The second is to break away from the multilevel marketing scheme that the VC-LP-user growth game has become.”
Cutting Caracas out of the international market has already triggered a widespread humanitarian catastrophe causing ordinary Venezuelans to suffer the consequences.Read More
French, German and Spanish banks are now far too exposed to Italian debt for their respective governments to even entertain the idea of pushing Italy to the edge. “Brussels would love to see our defeat,” said Claudio Borghi, the Lega economics chief and budget chairman in the Italian parliament. “They think that we’ll surrender if they cause a crisis for our banks.
Lorenzo Bini-Smaghi, a former member of the ECB board, disagrees. He believes that events are following a similar script to the onset of the Eurozone debt crisis in 2011. “The economy risks tipping into recession in the fourth quarter. The Italian government has not understood this. The crash is going to be violent.”
There are very clear reasons behind these sanctions – and they are not related to national security. It’s all about “free market” competition.Read More
Cold Wars are useful for capitalists. They can justify massive military expenditure; they can justify patriotism and squashing dissent; they can justify loyalty to the strong leader. The trade war Trump has started might sound good to his base, but is likely to hurt many of them, as Canada, Europe and China are smart when they retaliate, knowing fully well that they will harm his base.
So part of Trump’s goal is to fire up his base by being tough on the foreigners. Trump has decided that the US is in a power struggle with China for global dominance. He is not the first US capitalist politician to believe that. US strategists have talked about making a pivot to China for more than a decade now. Trump has decided to lurch toward China.
Trump is trying to square a globalized world through a national-based American capitalism. It won’t work. And the more the US government tries to achieve that the more the dollar and American power falls into decline. Which makes US militarism a greater compensatory danger.Read More
After all, that’s how the west, Europe in particular, has enslaved, plundered and raped Asia, Africa and Latin America for centuries. So, what the World Bank does today is but a modern continuation of colonialism disguised as development assistance.Read More
On Reality Asserts Itself, Prof. Leo Panitch says it’s a dilemma that the gradualism of European social-democracy and attempts at a more radical transformation have so far both failed; Panitch says a first step towards democratizing the economy is to make finance a public utility – with host Paul JayRead More
Chamath Palihapitiya, a venture capitalist and owner of the Golden State Warriors, put a name to it: Amazon, he told an audience of fellow investors, “is a multitrillion-dollar monopoly hiding in plain sight.”
Economists have recently begun to document a link between corporate concentration and rising inequality. Dominant companies, they’re finding, are funneling the spoils to a small number of people at the top. And by reducing the number of their competitors, these companies are also making it harder for workers to get a fair wage and for producers to get a fair price. A particularly troubling data point in this research is the loss of a long-standing pathway to a middle-class life: starting a business. The number of new firms launched each year has fallen by nearly two-thirds since 1980, and many economists believe that corporate power is to blame.
The IMF’s main task consists in stabilizing the global financial system and helping out troubled countries in times of crisis. In reality, its operations are more reminiscent of warring armies. Wherever it intervenes, it undermines the sovereignty of states by forcing them to implement measures that are rejected by the majority of the population, thus leaving behind a broad trail of economic and social devastation.
Because of its global status as “lender of last resort” governments usually have no choice but to accept the IMF’s offer and submit to its terms – thus getting caught in a web of debt, which they, as a result of interest, compound interest and principal, get deeper and deeper entangled in. The resulting strain on the state budget and the domestic economy inevitably leads to a deterioration of their financial situation, which the IMF in turn uses as a pretext for demanding ever new concessions in the form of “austerity programs”.
The consequences are disastrous for the ordinary people of the countries affected (which are mostly low-income) because their governments all follow the same pattern, passing the effects of austerity on to wage earners and the poor.
IMF programs have cost millions of people their jobs, denied them access to adequate health care, functioning educational systems and decent housing. They have rendered their food unaffordable, increased homelessness, robbed old people of the fruits of life-long work, favored the spread of diseases, reduced life expectancy and increased infant mortality.
Greece is the microcosm case example of the new form of 21st century imperialism. In ‘Looting Greece: A New Financial Imperialism Emerges’, published in 2016 by Clarity Press, I described this new form of exploitation organized at the State to State level on a national scale, in which State institutions and apparatuses now play, in the 21st century, an increasing direct role in extracting surplus and value from workers and small business classes on behalf of the big capitalist banks. This is a form of imperialism different from pre-20th century (described in the classic work by Hobson) and early 20th century explanations (influenced heavily by Lenin and Hilferding).Read More
Wall Street did not let the Lehman Brothers crisis go to waste. The banks that have paid the largest fines for financial fraud are now much bigger and more profitable. The victims of their junk mortgage loans are poorer, and the economy is facing debt deflation.
Was it worth it? What was not saved was the economy.
An elderly couple in Western Australia found themselves to be victims of a mortgage fraud that ultimately cost them about $200,000 and their marriage, when a door-to-door salesman on behalf of a real estate developer pushed them toward an overpriced home purchase – and one of Australia’s “big four” banks, Westpac reportedly modified the couple’s disclosed income in order to get them a loan that they shouldn’t have qualified for.
Brailey concluded that the banks, government and FOS were “all in unison like a big bloody club trying to convince the public that these people deserve what they get because they’re greedy, sophisticated investors.
An analyst from UBS, Jonathan Mott, has estimated that as much of $500 billion worth of Australia’s $1.7 trillion mortgage book could be made up of similar types of loans, often referred to as “liar loans”.
Skyrocketing debt, Wall Street deregulation, a fraying social safety net, and a diminished dollar could soon leave the United States looking like Greece.Read More