Giles Fraser :

So, to recap: corrupt German companies bribed corrupt Greek politicians to buy German weapons. And then a German chancellor presses for austerity on the Greek people to pay back the loans they took out (with Germans banks) at massive interest, for the weapons they bought off them in the first place. Is this an unfair characterisation? A bit. It wasn’t just Germany.

James Galbraith on Greek Referendum

Worth reading.

The Deeper Meaning of Cyprus

Worth a read

This is good too.

Britain's Record "Debt"

 Will Hutton :

Nor is it true that Britain has record public debts. It did have a record annual public deficit in 2009/10 as the budget papers say. But that is not debt. Debt is an aggregate figure, the consequence of cumulative deficits over decades. Expressed as a proportion of GDP, debt has been higher than current levels for most of the last 250 years. Indeed, with the cost of servicing public debt at the lowest since the 1890s there have been very few decades since the 1760s when the cost of servicing public debt has been so low. Britain, despite the Orwellian attempt to misuse language, does not have a debt crisis.

Europe’s Deadly Transition From Social Democracy to Oligarchy

Read this

I know I'm sounding like I'm just repeating the same story again and again. But what the hell else is there to do? This is now so blatantly happening. Another week, another story of a redistribution of wealth and power from the 99% (and government agencies that still have democratic responsibility to them) to the 1% wealthy elite.

So many people seem to vaguely perceive this. Many people are talking. But no one seems capable of stopping it.

Money quote :

This competition between banks and government explains the false accusations made that government credit creation is more inflationary than when commercial banks do it.

Austerity Bites

The reality of Greek austerity

European Stability Mechanism

Not sure how much of a conspiracy theory this is but if it's even half true - and right now it seems horribly plausible - it's another extraordinary coup for disaster capitalism. 

Banksters' Lies

Surprised?

Why The Violent Suppression Of OWS?

OK, dumb question. Why wouldn't there be a violent reaction to try to extinguish this movement?

Still, Naomi Wolf spells it out clearly :

But wait: why on earth would Congress advise violent militarised reactions against its own peaceful constituents? The answer is straightforward: in recent years, members of Congress have started entering the system as members of the middle class (or upper middle class) – but they are leaving DC privy to vast personal wealth, as we see from the "scandal" of presidential contender Newt Gingrich's having been paid $1.8m for a few hours' "consulting" to special interests. The inflated fees to lawmakers who turn lobbyists are common knowledge, but the notion that congressmen and women are legislating their own companies' profitsis less widely known – and if the books were to be opened, they would surely reveal corruption on a Wall Street spectrum. Indeed, we do already know that congress people are massively profiting from trading on non-public information they have on companies about which they are legislating – a form of insider trading that sent Martha Stewart to jail.

Update : The Silence of Obama 

Goldman Sachs Conquers Europe

I just don't know what to say any more.

Post Democracy

Aditya Chakrabortty :

Until this weekend, Monti served as an adviser to the world's number one investment bank, Goldman Sachs. As for Papademos, his biggest political intervention before becoming prime minister was to argue against the recent eurozone deal to write off half of Greece's debts – it should, he claimed, be a far smaller discount, so as not to hurt banks. One man was a banker, the other defended their interests, and yet the claim is that they have shed those prejudices in the past few hours.

Seumas Milne :

No wonder nationalist anger is growing. And all this to deliver a death spiral of spending cuts and tax increases that are sending Greece ever deeper into slump and debt. It makes no sense. Unless it's understood that it's not the Greek economy that's being rescued, but European and US banks exposed to Greek debt. To protect the rentiers and prevent their own failures from seizing up the European credit system, Greece has undergone the deepest ever fiscal squeeze in a developed state without the possibility of any compensating monetary stimulus or devaluation – because of its euro membership.

Austerity Has Failed

Robert Peston :

"The situation in Greece has taken a turn for the worse, with the economy increasingly adjusting through recession and related wage-price channels, rather than through structural reform-driven increases in productivity". 

Or to put it another way, Greece's austerity programme is succeeding in impoverishing Greek people with little in the way of discernible benefits to the Greek private sector and the capacity of Greece to start earning its way in the world. 

The protesting mob in Athens would probably not dissent from that view.

You think this might be a wake-up call to the ConDem coalition?

Shooting Banksters In A Barrel

Daniel Davies (d-squared) tries to defend bankers against the accusation that they're responsible for the 2008 crash and continuing world economic crisis.

He doesn't do a particularly good job, but he elicits this great response from "Bloix" :

I’m sure I’m being naive in assuming that Daniel doesn’t already know this and is intentionally ignoring it, but here goes:

1) There was a bubble in housing prices. This means that people bought houses, not to live in, but because they believed that the house they bought would appreciate faster than any other asset they could invest in. The appeal of such appreciation was multiplied many-fold because houses are the easiest and most common investment for ordinary people that supplies large amounts of leverage. The ordinary buyer had no appreciation of the risks of leverage but well-understood its benefits. There was a lot of activity in buying up, flipping, and trading houses that had nothing to do with the need for shelter. This activity made a lot of money for a lot of people – real estate agents, mortgage brokers, inspectors, title insurers, and lenders.

2) Housing prices could not indefinitely go up faster than the rate of inflation because eventually there would not be enough buyers who had the income to qualify for the mortgages needed to on the higher home prices. Therefore, in the absence of “creative” financing, the run-up in housing prices would soon have stabilized and perhaps dropped a bit.

3) Mortgage brokers and lenders therefore created mortgage products that were designed to allow people to buy houses that they could not possibly pay for based on their income – balloon mortgages, teaser rates, interest only loans, even negative amortization.

4) If the mortgage lenders had had to hold the risk of these loans, they would never have made them. But they didn’t, because they could sell the loans to the banksters, who then packaged them in their creative products and sold them off as AAA-rated securities to insurers, pension funds, and the like. After the banksters took their large cut off the top, the money from these investors funded the loans to the ignorant buyers who were put into the creative mortgage products by the petty crooks who worked for the mortgage originators.

5) Without the market in mortgage-backed securities made by the banksters, there would have been no money to fund the creative mortgage products, and thus no possibility of a bubble anywhere near the size of the one that eventually burst. The whole point of the mortage-backed securities market was to keep the bubble inflated. Obviously it couldn’t go on for ever, but it was very, very profitable while it lasted.

6) The banksters either were world-class idiots or they were well-aware that the mortgage-backed securities they were selling to clueless institutional buyers were trash. As we know that they are not idiots, the only possible conclusion is that they were intentionally passing off trash.

People who peddle fake goods are usually considered to be crooks. But banksters who knowingly peddled enormously high-risk securities, while claiming that they were as safe as US treasuries, are walking around with billions of taxpayer dollars in their pockets. They own Congress and the administration. They write the tax code and dominate the Federal Reserve.

After smashing up our retirement accounts, destroying our pension funds, wiping out the savings of millions of people who bought into the rising market, and putting any number of us out of work, they sneer and pontificate and preen and strut their way across the major cities and TV screens and high-end resorts of all the world.

The only justification for the investment banking industry’s existence is that it does a better job of allocating investment capital for productive purposes than any other method of doing so. What we’ve just seen is that, far from allocating capital efficiently, the banksters allocated capital in a grotesquely wasteful manner for year and year, a manner that just happened to put huge amounts of that capital into their own individual pockets while leaving the institutions they worked for at risk of insolvency. And when that risk came to pass, the obscenely rich individuals suffered not at all, while the government bailed out the institutions.

So. Please. I don’t know anything about you personally, and I’m sure that you’re a wonderful fellow who loves dogs and is charming at parties. But the industry you are part of is a force for evil in the world. Everyone who is not dependent on that industry for a living knows it.

Re-inflate And Accumulate

Dmitry Orlov :

if the real physical economy is collapsing, unemployment keeps going up, more and more people are excluded from the economy all the time, then that gives you the ability to print money because the two things balance out. So you have this deflationary trend, of the economy collapsing, of property values and various asset prices falling, and at the same time you can re-inflate the economy by printing money. And that money ends up in the pockets of very few people who then use it to buy up physical goods. So that’s really the trend, we see this concentration of paper capital.

Naomi Klein is good on daylight looting.

So, for those of you who don't know, riots and looting are breaking out around London tonight.

Watch twitter for up-to-date news.

A couple of thoughts :

It's now blatant that this is NOT appearing on the BBC front page. Clearly the media have been told not to report it in case it encourages more people to join in.

Despite this, reports are raging through Twitter.

There may be some sense in which Twitter IS helping spread the meme. People keep posting new hashtags of places where riots may be happening. Other twitterers then dismiss these, but in at least one case, Dalston, people were initially saying there was no riot, but later the shopping centre was attacked.

The Guardian thinks it's being organised.

At the same time, my bet is that it's a "bazaar of violence", as in a number of independent actors only loosely co-ordinated :

- There are presumably some people who want to protest at the police shooting on Thursday, especially as there are doubts over the assumption that it was a criminal who started it by firing at the police.

- Undoubtedly there are people involved in the looting after last night's riots in Tottenham and who realised that they really could just grab a lot of stuff.

- There are kids who probably are pissed off with the government for cutting their EMA.

- Perhaps there are political anarchists.

- And maybe just bored kids looking for excitement.

The question is, has the mob tasted blood? Have dozens, perhaps hundred, of teenagers, brought up in a materialist culture, wanting more than they can afford, just realised that if they go out at night en mass they can just take it?

No doubt this is not an organised political protest with any kind of coherent demand. It's an unfocussed anger, often mixed with selfishness. Does that make it any less of a political phenomena or response to the catastrophic political times we're in?

In one sense, I'll say yes. It certainly is less political. Politics does need goal-directedness, not just raw anger. At the same time, it would be remarkable if this wasn't in some way responding to the continual promises of austerity, depression and future poverty coming from the government and media. For all that the rioters lack the term "indignati".

Of course, it's kind of depressing seeing the reactionary comments on twitter and other social media. People calling for the army to be sent in to deal with the "scum" etc.

Still, it's understandable people are scared. And undoubtedly many innocents have lost jobs, homes or livelihoods in these riots. I'm sorry for them.

Paul B Farrell :

Remember Friedman: "Just let the free market set currency exchange rates, he said, and trade deficits will self-correct." Friedman was wrong by trillions.

Krugman calls it correctly.

Text of the moment : The Occult Technology of Power