Pandaigdigang Krisis sa Pinansya

Katapusan na nga ba ng Kapitalismo?

October 2008

Discussion Outline

Ang Financial Crisis at Saklaw Nito

Ugat ng Financial Crisis: Sistemang Monopolyo Kapitalismo

Epekto sa Ekonomya ng Pilipinas at Manggawang Pilipino

Tugon ng Manggagawa at Mamamayan ng Buong Daigdig

Worst fin. crisis since the ’70s

Collapse of 3 out of 5 biggest investment banks Bear Sterns, Lehman

Brothers, Merrill Lynch Collapse of world’s largest

insurance firm American Insurance Group

(AIG) Banking status for bankruptcy

protection Goldman Sachs, Morgan

Stanley World’s biggest bank collapse

Washington Mutual

What happened in Wall Street?

March-08 – Bear Sterns bailed-out by JP Morgan with US$30 B backing of US Federal Reserve

Sep 7-08 – Fannie Mae & Freddie Mac bailed-out by Fed w/ up to US$100 B

each US$1.8 trillion in assets

Sep 14-08 – Lehman Brothers (US’s 4th largest investment bank) files for

bankruptcy with US$613 B in debt Merrill Lynch (US’s 3rd largest investment bank) bought by Bank of

America for US$50 B US$1.5 trillion in assets

Sep 16-08 – American Insurance Group, AIG (US’s largest insurer) bailed-out

by Fed with US$85 B loan US$1 trillion in assets

Largest nationalizations and transfer of debt in history

Mga Naunang Krisis sa Pinansya

1929 Wall Street Crash Great Depression

1987 “Black Tuesday” bailout package of $500 billion

1997 Asian Crisis

Ang Pangingibabaw ng Kapital sa Pinansya

Di maiiwasan ang mga krisis ng labis na produksyon sa ilalim ng Kapitalismo

Basic Contradiction

Pribadong pag-angkin

Sosyalisadong paggawa

Mga Lundo ng Krisis 1870 bunsod ng pagdami ng mga kapitalistang bansa;

paghahanap ng mga bagong kolonya/merkado

1911 – unang pangkalahatang krisis ng kapitalismo bilang imperyalismo; nagresulta sa WW1

1929 – ikalawang pangkalahatang krisis ng imperyalismo; nagresulta sa WW2

’60s-’70s – stagflation; wars of national liberation

’87-’98 – financial crashes in the US, Asia, Russia and Brazil

Mula pagitan ng 1911 at 1929, lumaki ang pagsalig ng monopoly capitalists sa financial markets upang makailag sa epekto ng overproduction

Securities – certificates or electronic book entries representing financial value, and traditionally used as a means of raising new capital. Debt securities – banknotes, bonds,

debentures, notes, commercial paper, deposits.

Equity securities – common stocks

Financialization

Production (industry, agri)

Financialeconomy

Realeconomy

New derivatives (ABS, CDO, MBS, hedge funds)

Stocks, bonds, mutual funds mortgages, loans

Speculative/fictitious capital

Less than 4 times GDP (1980)

Over 9 times GDP (2007) Financial services only

5% of US private sector jobs

1980s

2000s

Massive growth in digital “financial economy” versus real economy

Decreasing share of labor, increasing share of corporate profits

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1970 1975 1980 1985 1990 1995 2000 2005

Year

Ind

ex

Wages and salaries

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1970 1975 1980 1985 1990 1995 2000 2005

Year

Ind

ex

Corporate profits

Shares in national income, 1970-2005

Wages & salaries Corporate profits

Source: Center on Budget and Policy Priorities

By 2006:highest since 1950

By 2006:smallest share

of income on record

Paglikha ng mga “bula”

Likas sa financial capital May “sariling buhay” labas sa

real economy (speculation-driven)

May life span tiyak na sasambulat

1990s dot.com

bust

2007 sub-

primebust

Paglikha ng mga “bula”

Ang Kasalukuyang Fin. Crisis

Rising house prices fuelling debt-driven consumption

Cheap housing loans driving demand, increasing house prices by 80% since 2000

Speculative, self-feeding and no basis in real economy House prices increased faster than housing rents, incomes,

interest rates and the economy Disposable income falling

Rising house prices and “wealth effect” collateral for further debt and borrowing encourages continued consumption

BUT only while house prices rise

1980s

2000s

Soaring household debt

“Securitization” of mortgages

Subprime loans (5% interest)

Bundled as MBS, CDO, etc.

Sold to other banks and investors

Ang nangyari…

Unemployment/falling wages

Mortgage payment defaults

Foreclosures

House prices fall

Stock values of big banks fall

Bank collapse, credit crunch

The FalloutThe Fallout Various estimates:

Minimum US$400 B in mortgage-credit losses (c/o The Economist) will reduce net lending by

US$910 billion US$945 B worldwide (c/o IMF) Initial US$1-2 trillion, w/c is enough

to create a systemic banking crisis (c/o N. Roubini)

US$25-30 trillion worldwide (c/o FT)

Pagkakataon ang krisis upang lamunin ng iba pang dambuhalang kapitalista ang mga bumabagsak na kumpanya ibayong konsentrasyon ng kapital

“At the end of last year, the three lenders that are now the largest in US banking—Bank of American Corp., JPMorgan Chase & Co. and Citigroup Inc.—collectively held 21.4 percent of all US deposits. Now, with this month’s government-backed sales of the banking assets of Washington Mutual Inc. to JPMorgan and of Wachovia Corp. to Citigroup, the Big Three instantly have a combined 31.3 percent of US deposits...”

Wall Street Journal (Sept. 30)

Impact on the real economyImpact on the real economyin the USin the US

An estimated 2.4 million or 1 in every 50 households in the US face foreclosure.

Savings, health insurance, and retirement funds of millions of ordinary Americans who were enticed to invest in pension funds and assorted financial instruments will also be wiped out as banks and investment houses write-down billions in assets

Credit crunch Recession 2008 3rd quarter job losses = 287,142 15 million jobless, 9.5% unemployment “Contagion” to the rest of the world economy

Tugon ng US gov’t.Tugon ng US gov’t. Ayudahan ang mga kapitalista sa pinansya

Ipapasan sa masa ang bigat ng krisis

“pribado ang tubo pero sosyalisado ang pagkalugi”

Repormahin ang kapitalismo, isalba ang sistema: more “regulations”, safety nets, etc.

Bailout ay magdudulot ng paglaki ng depisito sa badyet at paglobo ng utang ng gobyernong US, magpapahina sa US dollar at magkakait ng mga pondong dapat mapunta sa kagalingan ng mamamayan. Kaya't sa halip na masolusyunan ang problema, inilalatag lamang nito ang mas malaking kombulsyon sa sistema.

Pandaigdigang Epekto

Impact of global financial turmoil

US, EU & Japan and the world economy 52% of world GDP: EU (23%), US (22%), Japan

(7%) EU links with US

24% of exports to US, 15% of imports from US

Japan links with US 23% of exports to US,

12% of imports from US

Impact of global financial turmoil With collapse or crisis of financial institutions:

Investors in them lose their money Further credit/finance for economic activity shrinks (drops

in consumer spending/corporate investment) … sets economic slowdown in motion

US$500 B in global credit-related losses by financial firms so far… eventually over a trillion dollars? (c/o Economist) US$945 B worldwide (c/o IMF) Initial US$1-2 trillion, w/c is enough to create a systemic

banking crisis (c/o N. Roubini) US$25-30 trillion worldwide (c/o FT) Note: multiply by approx 14.5 to get total credit lost

(financial leveraging)

The International Labor Organization (ILO) warns that the global economic slowdown in 2008 will add at least 5 million workers to the ranks of the unemployed worldwide, raising the global unemployment rate to 6.1 per cent. This is based on a more optimistic scenario of 4.8% growth in global GDP, which has been revised downwards by the IMF. A deeper recession would add millions more to the 189.9 million unemployed as of 2007.

Updates (as of Nov. 2008)

Germany and the other EU countries now officially in recession.Collapse of German car industryLayoff of 20,000 automobile workers in 2008

US unemployment: 10 million as of November 2008

Another half million added within January 2009.

Very low consumer confidence falling market demand both for imports and local manufactures

Epekto sa Pilipinas

Impact sa Pilipinas ng kasalukuyang krisis pampinansya sa daigdig

P2 Trillion wiped out in Philippine Stock Exchange (PSE) since August 2007

Paghigpit sa pautang: lower capital inflows to RP, higher cost of borrowing, interest rates

Pagbagsak ng piso: Since the start of the year, the peso has fallen 12.3 percent against the dollar; tinatayang maaaring bumagsak sa P50= 1US$

Pagtumal ng exports ng kalakal: around 16% of RP exports direct to US; up to 70% indirectly dependent on US & EU markets (through export of intermediate goods to TNC subcontractors in China, Taiwan, Korea, ASEAN, etc. for assembly into final goods destined for US, EU & Japan)

Impact sa Pilipinas ng kasalukuyang krisis pampinansya sa daigdig

Pagtumal ng exports ng serbisyo: 90% of BPO revenues from US market

Posibleng (?) pagbagal sa OFW deployment at pagliit ng halaga ng remittances: 33% of overseas pinoys in US; 51% of OF remittances from US

Pagtaas ng presyo ng pagkain at petrolyo dahil sa ispekulasyon sa “commodites futures trading”. Sa bawat 10% pagtaas sa presyo ng pagkain, 2.3 M Pilipino ang bumabagsak below the poverty line. Sa bawat 10% increase sa presyo ng petrolyo, 160TH Pilipino bagsak sa poverty line

Lahat ito ay nangangahulugan ng: lower internal and external demand higher unemployment, lower incomes, lower social spending, higher taxes, etc. in the immediate future

Mga posibleng higit na mapuruhan:Mga posibleng higit na mapuruhan:

Manupaktura: 125,000 manggagawa na ang tinanggal sa manupaktura

mula july 2007-july 2008; 1/3 ng total manufacturing employment sa bansa ay nasa

export-processing zones/ ecozones SMEs: 99.6% of formal sector establishments; 63%

of formal sector employment Construction Wholesale & retail trade Transport (dahil sa epekto sa presyo ng imported na

petrolyo) Agri (dahil sa presyo ng petroleum-based inputs, i.e.

fertilizers at ispekulasyon) BPO

Tugon ng gobyernong Tugon ng gobyernong Arroyo sa PilipinasArroyo sa Pilipinas

Denial, business-as-usual Fiscal stimulus dagdag korupsyon,

paglaki ng badyet deficit (P100 B sa 2008) at utang dagdag na buwis

“Targeted subsidies” pampakalma sa galit ng masa

Partikular na pananagutan ng Partikular na pananagutan ng rehimeng US-Arroyorehimeng US-Arroyo

Pangangayupapa sa US at iba pang dayuhang monopolyo kapitalista para sa patuloy na suporta nila sa kanyang pananatili sa poder (“development aid”, military aid, etc.)

Masugid na tagapagpatupad sa mga patakarang neoliberal para sa interes ng dayuhang kapital

Fiscal reforms (VAT & other onerous taxes) + automatic debt servicing

Pagpatay sa P125 wage increase bill, kontraktwalisasyon, etc.

Sellout ng pambansang soberanya at patrimonya (JPEPA, RP-US FTA, oil & mineral exploration, etc)

Charter change – not only for GMA pol agenda but also to serve US political & economic agenda

War in Mindanao to justify cha-cha & US mil intervention

Ano ang ating paninindigan sa harap Ano ang ating paninindigan sa harap ng kasalukuyang krisis?ng kasalukuyang krisis?

Labanan ang pagtatangka ng malalaking lokal at dayuhang kapitalista na ipabalikat sa mga mamamayan ang buong bigat ng kasalukuyang krisis na nilikha nila papel ng gobyerno

Palakasin ang ating paggigiit para sa pagbasura sa RVAT sa langis, pagtataas sa sahod nang P125 across the board, mas malaking badyet para sa serbisyong panlipunan, moratorium sa pagbabayad ng utang panlabas, at iba pang demokratikong kahilingan ng mga mamamayan.

Palitan at panagutin si GMA Pahigpitin ang ating pakikipagkaisa sa mga

mamamayan ng ibang bansa na lumalaban sa panggigipit ng imperyalismo.

Ang pangmatagalang solusyon sa Ang pangmatagalang solusyon sa pamalagiang krisis sa Pilipinaspamalagiang krisis sa Pilipinas

Ibasura ang mga patakarang neoliberal Tunay na reporma sa lupa Pambansang industriyalisasyon Sosyalismo

Sosyalisadong Pag-angkin para sa Sosyalisadong Paggawa

Hindi kusang babagsak ang sistemang kapitalista sa daigdig at ang sistemang malakolonyal-malapyudal sa Pilipinas, sa kadahilanang patuloy na kinukumpuni at itinataguyod ang mga ito ng mga naghaharing-uri gamit ang lahat ng kanilang yaman at kapangyarihan, panlilinlang at karahasan upang manatali sila sa poder.

Kailangan ang ibayong pagpupunyagi ng lahat ng pinagsasamantalahan at inaapi sa lipunan upang gibain ang mga naturang bulok na panlipunang istruktura at palitan ng isang alternatibong kaayusan kung saan may tunay na kalayaan, demokrasya at hustisyang panlipunan.

Maraming salamat po!