Mere fleas on the wolf that is capitalism / Features / Home - Morning Star

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Mere fleas on the wolf that is capitalism

Sunday 12 August 2012

by Bill Benfield

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It's getting to be hard times for capitalism's erstwhile spoilt-rotten banking fraternity these days.

Not that capitalist governments are trying to abolish the financial graft that passes for a market economy in these debauched times. Far from it.

But times are tough in the world of profits and margins and when thieves fall out, we all see the results.

Although it would have been gratifying to see the money men of the markets torpedoed by a huge worldwide socialist movement, let's take dissent in the boss-class ranks as a cheerful second best.

The Standard Chartered Bank has been the latest edifice of capitalism to fill everyone - on our side of the fence at least - with pure vindictive glee.

Shares in Standard Chartered PLC dropped sharply last Tuesday, down nearly 25 per cent at one point in early trading on the London Stock Exchange.

Why? Because the New York state department of financial services alleged on Monday that Standard Chartered had schemed with the US's bete noir, the Iranian government, to launder $250 billion (£160bn) from 2001 to 2007.

The regulator ordered Standard Chartered representatives to appear in New York City on August 15 "to explain these apparent violations of law" and to demonstrate why its licence to operate in the state "should not be revoked."

The agency alleged that Standard Chartered conspired with Iranian clients to route nearly 60,000 different US-dollar payments through Standard Chartered's New York branch "after first stripping information from wire transfer messages used to identify sanctioned countries, individuals and entities."

The regulators called the bank a rogue institution and quoted one of its executives as saying: "You fucking Americans. Who are you to tell us, the rest of the world, that we're not going to deal with Iranians."

And so it goes on. The order accuses the bank of falsifying business records, obstructing governmental administration, failing to report misconduct to the state quickly, evading federal sanctions and other illegal acts.

The bank, naturally, denies almost everything - as it would, being an insititution which up until this week boasted of being "boring."

Now, we hold no brief for US sanctions on Iran. They are a political manoeuvre by the US in its geopolitical chess-game to control the world.

But what's happening now is, or should be, a wake-up call to those innocents who fondly believe that capitalism and democracy can exist side by side in the same society. They can't.

The battle between the bourgeois-democratic US government and the money men of big capital should prove that adequately enough. In this relatively small battle it's likely that the US regulators will win.

But it is just a small battle, despite the eye-wateringly huge sums involved.

And the banks have already proved that they are so tightly enmeshed with the capitalist infrastructure that national governments won't let them fail because if the banks fail so, ultimately, does capitalism.

But that doesn't mean that the internecine struggle between the various anarchic and mutually hostile elements of capitalism for dominance is going to be allowed to drift.

After all, capitalists' big weakness is that they don't even like each other. Their very philosophy demands that they fight like cats in a sack.

Free-market capitalism is essentially a war of each against the other as well as a fight against the poorest and most numerous class - us - so any advantage gained by a fellow capitalist is fair game for trashing, unless you can get a share of it.

Another little tale emerging this month gives us a hint of just how this all works.

For many years now, the big entrepreneurs and any cowboy trader who had the imagination rushed off to avoid tax wherever they could.

And that meant our old mates the tax havens. But capitalist governments don't like you evading their tax when they need it to give to their mates the bankers, although you can avoid all you like if it's destined for supporting the poor, the weak and the sick.

So now, when the big banks need the big bucks or they'll keel over and take the good ship capitalism with them, those tax-haven sunseekers are ceasing to be the flavour of the month in the corridors of power.

Even the Cayman Islands is - or at least was - turning on its head and seeking a bit of payback from all those tax exiles lining up to beat the Germans to the sun loungers in the mornings.

And boy, did it shock those expats.

Caymans Premier William Mc-Keeva Bush was proposing what amounts to the territory's first ever income tax.

And it would fall only on expatriate workers - at a minimal 10 per cent.

But it provoked absolute outrage in the pages of the Telegraph. Well, it would, wouldn't it?

So much so that good old Premier Bush dropped it like a hot potato last week.And as someone once said: "Well, he would, wouldn't he?"

Because the Cayman Islands has democracy the way the rest of us have piles - a right pain in the bum when it plays up.

It's a wonderful democracy in the Caymans. There's nothing else quite like it. The territory has 56,000 people on a string of little islands.

But at last count in March 2011 it had 91,712 companies registered. It had 235 banks (not branches), 758 insurance companies and assets for the registered companies totalling $1.607 trillion (£1.25tn).

So you can probably see where the power lies there. It ain't in the democratic mandate.

Anthony Travers, the chairman of the Cayman Islands Stock Exchange, described the now defunct tax plan as "probably the single greatest existential threat to the Cayman Islands in over 200 years."

Which is about as far over the top as you can imagine. In fact it's verging on the hysterically nutty, but what would you expect from a man who notoriously described socialists who wanted expats to pay their taxes as the "Tax Taliban."

For now the forces of the exile army of profiteers and tax duckers - a collective noun which encompasses all those who don't want to pay their taxes whether by avoidance or evasion - has won the skirmish.

But the day of the island tax-dodgers is nearly over because the big boys want their money and people such as Mr Travers will be simply swept to the wayside by their own.

For the likes of tax duckers, however, there will always be another scam. They are, after all just the fleas and parasites on the back of the capitalist wolf.

That's why it's the whole system of capitalism, not just its more visible pests, that is the target for us of the Tax Taliban.

Britain's Olympic lift won't last / Features / Home - Morning Star

Features

Britain's Olympic lift won't last

Sunday 12 August 2012

by John Wight  - THE MORNING STAR

For the past two weeks the nation has been engaged in something akin to a group hug over the undoubted success of the London Olympics.

Team GB have done better than expected and amassed enough medals to make Britain seem a nation of high achievers.

This has been reflected in the BBC's blanket coverage of the event, which early on abandoned objectivity for jingoism to the point where on day eight of the Games - when Team GB won six golds - you could have been forgiven for expecting a squadron of Lancaster bombers to fly over the Olympic stadium to the theme from Dambusters.

The uplift the Games have given to the nation is undeniable, as has been the extent to which the likes of David Cameron, Boris Johnson and the government as a whole have sought to extract as much political capital from this event as they possibly can.

Cameron in particular would appear to have lost all sense of perspective as he sets about using the event as a launchpad for the promotion of competitive sport in schools, equating Britain's future prosperity with sustained Olympics success. Running faster, throwing farther and jumping higher are the ingredients of a healthy society all of a sudden, one in which everything will be rosy and bright if we can just harness the competitive spirit and achievements of Team GB.

This of course chimes with the fulminating one-nation Tory "we're all in this together" mantra, the very same the party been spouting since entering Number 10 two years ago to set about implementing the vast experiment in human despair it has the gall to describe as an economic policy.

The disconnect between the fantasy world of a society of sporting heroes portrayed on our TV screens and covering the front and back pages of the nation's newspapers these past two weeks and the reality of the misery and despair which daily engulfs the lives of more and more people was made stark at the High Court last week.

There Cat Reilly and Jamieson Wilson, both from Birmingham, learned from Mr Justice Foskett that workfare - the scheme whereby people claiming jobseeker's allowance (JSA) are compelled to work in return for their benefits - is not a violation of the litigants' human rights and does not constitute slave labour.

The importance of this decision was overshadowed by the Olympics but cannot be overstated.

It affects tens of thousands of people up and down the country, currently working for their benefits in charity shops, supermarkets and other assorted workplaces, where they are typically engaged in menial tasks designed to acquaint or reacquaint them with the world of work regardless of their age, qualifications, and/or career goals.

The controversy surrounding the scheme, highlighted by campaigners earlier this year, has forced some businesses to back out, fearing the bad publicity that has come to be associated with it.

Though trumpeted as providing invaluable work experience to the long-term unemployed, the scheme's opponents allege that in truth it is a source of cheap labour for employers and a form of punishment being meted out to those claiming benefits.

In this regard workfare fits in with the philosophical bent of the Tories, for whom society is defined by the deserving rich at one end of the spectrum and the undeserving poor at the other.

Cat Reilly, a university graduate who's been unemployed since 2011, was volunteering at a museum before being forced onto an unpaid work scheme at Poundland for a period of six weeks, where she says she spent her time cleaning and stacking shelves.

Jamieson Wilson, unemployed since 2008, was informed that he must complete 30 hours of unpaid work every week for six months or else lose his JSA for up to 26 weeks. He refused and had his benefits stopped, whereupon the father of three was forced to live on the charity of family and friends.

While Justice Foskett did acknowledge that the Department of Work and Pensions (DWP) had made errors in the way it communicated details of the work programme - the right in Reilly's case to opt out for example, and sanctions if the claimants refused to take part - he denied the allegation that it amounted to forced labour.

Here he focused on a somewhat quixotic interpretation of Article 4 of the European Convention on Human Rights (ECHR), prohibiting forced labour and slavery.

Instead of understanding Article 4 as a constitutional protection against these practices, he chose to focus on its association with the colonial exploitation by a state of a subject people.

Given that the European Convention on Human Rights was drafted just after the second world war, with Article 4 framed in that context, this interpretation is clearly a narrow one.

In his ruling, the judge stated: "The convention is, of course, a living instrument, capable of development to meet modern conditions, and views may reasonably differ about the merits of a scheme that requires individuals to 'work for their benefits' as a means of assisting them back into the workplace."

Predictably the government was delighted with the ruling. A spokesman for the DWP said: "Comparing our initiatives to slave labour is not only ridiculous but insulting to people around the world facing real oppression."

Also delighted was the usual chorus of right-wing commentators for whom the unemployed need whipping into shape and are suffering from moral turpitude, not an economic policy which has deepened the recession and seen thousands of jobs axed.

Dominique Jackson, writing in her blog for the Daily Mail on July 4, deserves pride of place here.

"The German slogan 'Arbeit Macht Frei' is somewhat tainted by its connection with nazi concentration camps, but its essential message, 'work sets you free,' still has something serious to commend it," she wrote.

These can only be the words of someone who has swapped their moral compass for a mince pie.

In the midst of Olympic fever young people in Britain are being inculcated with the belief that they can be the next Jessica Ennis or Chris Hoy if only they dedicate themselves to the task.

The energy being expended by Cameron and co in spreading this message calls to mind Bertolt Brecht's dictum: "Unhappy the land that is in need of heroes."

Given the increasingly vicious attacks on the poor and the unemployed in the country, Britain increasingly becomes a nation more in need of the next Rosa Luxemburg and Vladimir Lenin than either of the aforementioned Olympians.

As the saying goes, "they that sow the wind shall reap the whirlwind."

Scottish independence: SNP opposition grows over plan to scrap anti-Nato policy - News - Scotsman.com

Scottish independence: SNP opposition grows over plan to scrap anti-Nato policy - News - Scotsman.com

Scottish independence: SNP opposition grows over plan to scrap anti-Nato policy

Opposition to SNP policy switch on Nato has grown

By EDDIE BARNES
Published on Sunday 5 August 2012 03:09

AS MANY as 12 SNP MSPs are likely to join a campaign later this month to urge the party to retain its policy opposing Nato membership.

The campaign is to be launched at the Scottish Trades Union Congress at the end of August, with the influential trades union group also preparing to put its weight beh­ind opposition to reform.

Westminster leader Angus Robertson outlined plans to overturn the party’s opp­osition to Nato membership earlier this summer, saying it was time for the SNP to reverse the policy so it could remain part of the nuclear 
alliance after independence.

Scotland should sign up, Robertson said, as long as Nato agreed that the new country should not play host to nuclear weapons and could opt out of wars not sanctioned by the UN.

However, the reform – due to be voted on at the SNP’s
annual conference this autumn – has already roused growing opposition from among the party rank and file, which believes it sends out the wrong message about how Scotland, as a newly 
independent country, intends to start out.

Campaign insiders say more than ten MSPs have already agreed to sign up to the cause, though their identity is not yet being revealed. The SNP union group, one of the major affiliated groups, will now put its name to an amendment at the SNP conference urging that the existing policy should remain in place.

The anti-Nato campaign is likely to question why Scotland should join the alliance, given the lack of obvious 
external threats. It will also cite evidence from defence 
analysts who have warned that joining Nato would hamper the party’s long-standing demand that the Trident submarine base at Faslane is rem­oved after independence.

SNP member and trade union­ist Bill Ramsay said: “This is the first time the
party has had any open debate on this issue for some years. We intend to flesh out our critique of why joining Nato will damage the Yes campaign and the referendum.”

The campaign will also insist Robertson’s motion is aired properly at the conference, saying the matter is of such fundamental importance that the debate must not be “rigged” by the leadership.

BNP (Bigots, Nonces & Perverts) ‘cashing in’ on Da Vinci rapist row as Nick Griffin plans to join protestors - Edinburgh Evening News - Scotsman.com

BNP ‘cashing in’ on Da Vinci rapist row as Nick Griffin plans to join protestors - Edinburgh Evening News - Scotsman. com

BNP ‘cashing in’ on Da Vinci rapist row as Nick Griffin plans to join protestors

SDL activists with placards from the BNP s Pro Fam group

By DAVID O’LEARY
Published on Friday 27 July 2012 12:00

BNP leader Nick Griffin has been accused of attempting to “cash in” on local protests against Da Vinci rapist Robert Greens by addressing a rally in Dalkeith tomorrow.

Members of the far-right party are due to meet at the Adventure Playground in Dalkeith before heading to the town centre where they will stage a demonstration against Greens being rehoused near to where he raped a Dutch 
student in 2005.

More than 50 members are expected to attend the rally.

BNP Scotland’s national organiser David Orr said: “I phoned Nick about the Robert Greens protest and he agreed that it was disgusting that this guy has been rehoused back in the community. He straight away agreed to come and support the people of Midlothian.

“The BNP is against any sex offender being rehoused in the community regardless of race or ethnicity, they don’t deserve to get out of jail or even breathe again.”

The far-right group has been accused of attempting to hijack and politicise the protest against Greens, with members of its affiliate the Scottish Defence League seen in attendance at the recent protest outside Midlothian Council offices in Dalkeith.

A spokesperson for the Edinburgh Anti-Fascist Alliance said: “Nick Griffin is putting in an appearance in an attempt to cash-in on the local protests against Robert Greens. Local BNP activists have been infiltrating the protests – pictures can be seen of known fascists holding placards with the Pro Fam logo, which is a BNP front group.”

The Get Robert Greens Out of Midlothian campaign which has more than 14,000 supporters has been quick to distance itself from any fascist links with the Scottish Defence League and BNP.

Protest leader Kelly Parry said: “We were donated those placards and accepted them in good faith. These guys just turned up at the protest and began handing them out. They just read “Pro Fam: Protecting the Family”, nobody had a clue as to their political connotations. In actual fact we turned away a number of people who arrived wearing BNP T-shirts.

“As a campaign we do not support or condone the views of the SDL or BNP in any way, in fact we strongly oppose their views.”

The BNP’s own trenchant law and order and anti-sex offender stance has been compromised of late by several instances of its own members’ offences. Rhyl BNP organiser, Ian Si’ree, was convicted in June of making and possessing 138 illegal images of child sex abuse.

Meanwhile Lancashire member, Nigel Hesmondhalgh, was imprisoned for nine months after a series of degrading photos and videos of children were found on his home computer in 2011.

In 2010 Northampton BNP activist Darren Francis was jailed for a sexual relationship with a 13-year-old girl. He was described by police as “every parents’ worst nightmare”.

When asked to comment on this, David Orr, said: “Like I said before whether you are a member of the BNP or not, if you commit any type of sex offence you do not deserve to get out of jail or even breathe again.”

England's forgotten Urban Guerilla: Inside the Angry Brigade

Inside the Angry Brigade / Features / Home - Morning Star

"YOU ARE YOUR OWN LEADERS. HAVE YOUR OWN TACTICS. CONTROL YOUR OWN STRUGGLE -- SOLIDARITY
BOGSIDE, CLYDESIDE, JOIN THE ANGRY SIDE" 

Inside the Angry Brigade

Thursday 19 July 2012

by Solomon Hughes

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In an era when mass protest and activism is again on the increase it's salutary to remember the police's habit of infiltrating rebellious groups.

Papers I've received under the Freedom of Information Act show that one of the leading suspects named by police investigating the Angry Brigade - Britain's bomb-planting urban guerillas of the 1970s - was in fact a police informant.

Gerry Osner was named as an Angry Brigade suspect in 1972, but police documents from 1968 say he was their informant inside the anti-Vietnam war movement.

The Angry Brigade bombing campaign began in 1970. The "angries" planted bombs in what their communiques called "a planned series of attacks on capitalist and government property."

Between 1970 and 1972 their bomb targets included the homes of government ministers and Ford executives.

Their communiques, with the help of a "John Bull" printing set, announced that "we have started to fight back and the war will be won by the organised working class, with bombs."

They also claimed that "organised militant struggle and organised terrorism go side by side."

The late 1960s and early 1970s saw a massive international rise in political and industrial struggle, including the anti-Vietnam protests and the 1968 French general strike.

The Angry Brigade were part of a small but significant move towards terrorism on the fringes of this wave. Unlike the Italian Red Brigades or Germany's Baader-Meinhof group, the Angry Brigade didn't kill anyone.

Its bombs were designed to destroy property and create spectacles, not to take lives.

But they certainly played with bloodthirsty ideas - promising that "pig blood will flow in the streets" and claiming to be "the man or woman sitting next to you. They have guns in their pockets and anger in their minds."

A concerted police operation led to the arrest and trial of people accused of the Angry Brigade attacks in 1971 and 1972. The police swoops gathered up both people found to be linked to the bombings and people who were innocent of any crime.

Those arrested included Stuart Christie, who had been freed from a Spanish prison by an international campaign in 1967.

Most of those arrested came from a "new left" background, but Christie was a Scottish anarchist. He travelled to Spain in 1964 to help his Spanish comrades in a plan to kill the country's dictator Francisco Franco.

The attempt to assassinate the fascist leader failed and Christie was jailed for 20 years. After he was freed by the international campaign, Christie lived in London under fairly regular police surveillance.

In December 1972, shortly after the trial of the Stoke Newington Eight led to some convictions and some acquittals, the police announced they were seeking "two people who we are most anxious to interview."

Deputy assistant commissioner Ernest Bond said they were looking for "Gerry Osner and Miss Sarah Poulikakou" in connection with the bombings.

Bond said they were "living abroad," adding that he had asked "Special Branch men in the Republic of Ireland" for help.

Christie - who as the trial showed was not an Angry Brigade member, but did know many of those involved - told me he believed Osner was part of the Stoke Newington Eight Defence Campaign set up to aid the defendants, but was not likely to have taken part in Angry Brigade actions.

But the document in a bundle of papers I received shows that Osner was an informant.

The papers show that the authorities were genuinely very alarmed by the large, angry protests at the US embassy against the Vietnam war and the related growth of the new left.

Panicked reactions included mobilising a "bomb squad" lest protesters use explosives and seriously considering, though ultimately rejecting, the mobilisation of troops to "contain" demonstrators.

They also leaned on the BBC and newspaper editors to be less sympathetic to marchers.

One paper from senior Home Office official F W Merifield refers to a Special Branch report. It says: "Such reports we have on extreme violence come from sources like Jeremy Osner, a student on whom a HOW is being submitted, and are not very credible. Nonetheless there is enough wild talk to give the police considerable cause for concern."

"Jeremy" is almost certainly a mis-spelling of Gerry. His name is correctly cited when he was identified as among the 45 "leaders of the movement" in another Special Branch paper.

An "HOW" is probably a Home Office Warrant allowing police to intercept Osner's post. It seems that Osner was an informant, albeit one not entirely trusted by the police.

He was certainly involved in the 1968 demonstrations. Tariq Ali, one of the key organisers of the Vietnam Solidarity Campaign (VSC), told me: "I remember Gerry Osner. A few of us always thought he was an agent provocateur. Soon after this was put to him he and his girlfriend disappeared."

Osner retreated from VSC, which organised large, loud, angry and militant protests but always rejected wild calls for individual "terrorism."

He resurfaced around those connected to the Angry Brigade in 1971. He and Poulikakou did indeed flee to Ireland. Poulikakou changed her name to Sue Richardson and went on to be involved in a variety of anarchist and community causes until her death in 2011. Osner's movements are unknown.

There's a strong if circumstantial case to suggest Osner was acting as a police informant in Angry Brigade circles and that the police announcement that they were seeking his arrest was a way of preserving his cover.

It also seems likely that Poulikakou was unaware of this, given her subsequent role as a well respected activist.

The Osner papers show that the police wanted informants in both legal, non-violent and illegal, violent political movements. They did not seem to distinguish between the two.

They also suggest - given Osner's role in VSC - that the police were pretty lax about informants becoming provocateurs.

You can read more from Stuart Christie at www.christiebooks.com
Follow Solomon Hughes on Twitter: @SolHughesWriter

If you have enjoyed this article then please considerdonating to the Morning Star's Fighting Fund to ensure we can keep publishing your paper.

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DEDICATED TO PC SIMON HARWOOD - Oi Polloi - THUGS IN UNIFORM

DEDICATED TO PC SIMON HARWOOD AND HIS COLLEAGUES - Oi Polloi - THUGS IN UNIFORM

What the Barclays scandal shows: 'Casino capitalists' rig financial bets in favor of the 'house'

What the Barclays scandal shows

What the Barclays scandal shows

'Casino capitalists' rig financial bets in favor of the 'house'

By Jon Britton

JULY 14, 2012

Former Barclays CEO Bob Diamond gives evidence to the British Parliament's Treasury Select Committee.

The fact that the existing economic order is untenable is proved by the very vulnerability and weakness of the system which has turned the planet into an enormous casino and millions of people … into gamblers distorting the function of money and investment, since what they seek at all costs is not production or the increase of the world riches but to turn money into more money. Such a distortion will lead the world economy to an inevitable disaster. — Fidel Castro Ruz, Jan. 1, 1999

Fidel Castro's acute observation about modern capitalism more than 13 years ago holds more truth today than ever. The frenzied speculation that dominates Wall Street, Lombard Street and other financial gambling dens produces not one iota of real wealth. The owners and traders of the giant banks that operate the “global casino” invite hedge funds, wealthy speculators and other “high rollers” to place their bets, using financial instruments known as “derivatives.” The derivatives represent bets on the movements of interest rates or prices of underlying assets over specific periods of time. The banks themselves take the other side of the bets.

More conservative investors such as pension funds also use derivatives, but to protect themselves against adverse movements of interest rates or prices or to insure against outright defaults on their bond holdings.

Typically, interest rate derivatives are pegged to “reference rates,” such as the LIBORs, the London Interbank Offered Rates. Agreed-upon reference rates are required to determine which side wins the derivative bets.

The various LIBORs are the interest rates the major banks operating in London—which include New York and European banks—“think” they can borrow money at from other banks over maturities ranging from one day to one year. These interest rate estimates are collected daily at 11 a.m. by the British Bankers' Association, averaged after the highest and lowest numbers are discarded, and then reported to and made public by Thomson Reuters.

You can look up the three- and six-month LIBOR rates in the Wall Street Journal, Investors Business Daily and other financial publications. The rates are of wide concern, since they also commonly serve as reference rates for lenders setting the interest rates on adjustable rate mortgages, credit cards and other types of consumer credit, as well as loans to businesses.

The rates actually charged by the lenders are determined by adding a “margin” onto the reference rate, and that sum can vary widely depending on the risk perceived by the lender. It is “reset” periodically, often every six months, based on the most recent LIBOR rate.

The amount of money potentially affected by the LIBOR rates is at least $500 trillion, British regulators have estimated. Other estimates range as high as $800 trillion! That is more than 10 times the annual Gross World Product for 2011, estimated to be about $70 trillion.

As the Barclays scandal reveals, the “banksters” have been rigging this gigantic gambling operation by secretly manipulating the LIBOR rates, thereby realizing virtually guaranteed windfall profits on their own bets. These ill-gotten gains come directly at the expense of those taking the other side of the bets, the speculators who are “counter-parties” to the derivative contracts—for whom most people are not inclined to shed tears.

But like all speculative profits—and profits in general—these gains come indirectly at the expense of workers the world over. The workers are the real producers of all value over and above wages—the ultimate source of profit—and in today's bankster-dominated, debt-ridden economy they are increasingly deprived of the very wealth they alone create.

As the U.S. economy de-industrialized following the disastrous stagflation of the 1970s, industrial capitalists increasingly turned into money capitalists, transforming their accumulated capital in the form of money into loan and speculative capital. Such capital, as Fidel Castro noted in 1999, “seeks at all costs … not production or the increase of the world riches but to turn money into more money.”

To add insult to injury, when a general crisis of overproduction such as the “Great Recession” of 2007-09 threatens to bring down the entire credit system, the “too-big-to-fail” banks are bailed out with taxpayers' money.

How they rigged the system

E-mails between Barclays' traders and those in the bank submitting LIBOR estimates shed light on how the betting in the derivatives market was rigged.

According to a U.S. Commodity Futures Trading Commission report, one Barclays trader wrote to a submitter: “We have another big fixing tom[orrow] and with the market move I was hoping we could set [certain] Libors as high as possible.”

Such requests, the report said, were frequently accepted by Barclays’ submitters, who e-mailed responses such as: “always happy to help” and “Done…for you big boy.” (The Telegraph, June 27)

Obviously, since more than one bank had to be in on the deal to have the desired outcome in the reported LIBOR, there had to be collusion between the banks submitting estimates to the BBA. No doubt such favors were traded back and forth, with each bank in turn reaping windfall profits on its derivative positions at the expense of their “counter-parties.”

The result was that the profits of the participating banks soared. The banks, in turn, rewarded their traders with generous bonuses for their “outstanding” trading results.

That collusion occurred among the major banks was confirmed by the $453 million settlement Barclays' reached June 27 with U.K. and U.S. regulators. According to the settlement, between 2005 and 2008, Barclays traders repeatedly requested that colleagues in charge of the LIBOR process tailor the bank's submissions to benefit their trading positions. Barclays staffers also colluded with counterparts from other banks to manipulate rates. (money.cnn.com, July 10)

This activity clearly violated even the most flexible norms of bourgeois legality. In terms of the sums of money involved, it could eclipse the banks' cut for laundering hundreds of billions in drug money in recent years. (Liberation News, June 11, 2011)

Jeffrey Shinder, an antitrust attorney with New York-based Constantine Cannon LLP who has been following that LIBOR litigation, said potential bank liabilities could be “massive.” “This is potentially the mother lode in terms of potential damages,” he said.

While it is not possible to predict a specific loss amount, damages could be in the tens or hundreds of billions of dollars if the lenders are found liable, Shinder said.

“Everyone in the industry knows if you knock down a few basis points here and there [a basis point equals 1/100th of 1 percent—JB] billions of dollars shift between counterparties,” he said. Adjusting LIBOR up or down affects the interest rates on scores of financial instruments. “This is price-fixing,” he added. (Bloomberg News, July 5)

Estimates lowered in 2007-09 to stave off bank runs

In addition, between late 2007 and early 2009, Barclays made artificially low LIBOR submissions. This was during the height of the financial crisis, and the bank was afraid that “if its submissions were too high, it would get punished in the markets as investors questioned its health.” (money.cnn.com, July 10)

Getting “punished in the markets” most likely would mean bank runs—the panicky withdrawal of deposits before the bank collapses. Clearly, once Barclays started the practice of falsifying its estimated borrowing costs, the other major banks were forced to follow suit.

That other banks were involved in manipulating LIBOR rates is confirmed by reports in the financial media that suspicion has fallen on all the banks that participate in the LIBOR process. Deutsche Bank, Royal Bank of Scotland, Credit Suisse, Citigroup and JPMorgan Chase are among the institutions that have acknowledged they are being investigated by regulators. (money.cnn.com, July 10)

Could these investigations, in part at least, be “blowback” on the part of the super-rich “victims” of the rate rigging by the major banks? Could the earlier revelations concerning trading losses amounting to at least $4.4 billion suffered by JPMorgan Chase in its London operations—as reported in its latest quarterly report released July 13—be tied in as well?

A falling out among thieves?

These latest revelations, on top of predatory lending, drug money laundering and other criminal behavior, shows that the banks are criminal enterprises and need to be seized for the public good...

There is so far no direct evidence that this is the case, but there is circumstantial evidence. The unusual aggressiveness by the regulatory authorities in going after Barclays and other banks, the avalanche of unfavorable publicity in the capitalist media, and the hostile questioning of Barclays' now ex-CEO Bob Diamond in the British Parliament suggests a possible falling out among the thieves of the financial world. Also, the settlement of $453 million imposed on Barclays, plus the resignations of its two top executives, is an unusually hard slap on the wrist for financial wrongdoing, even though Barclays has agreed to cooperate in the investigation.

Moreover, a large group of hedge funds came together to force JPMorgan Chase to swallow the huge multi-billion-dollar loss on their derivative position in the corporate bond market reported earlier. According to Wikipedia, Saba Capital Management, Blue Mountain Capital, BlueCrest Capital, Lucidus Capital Partners, CQS, and III are all known to have benefited from taking the opposite position to JPMorgan Chase.

This operation was initiated on Feb. 2 at the Harbor Investment Conference at JPMorgan Chase's Manhattan office by Boaz Weinstein of Saba Capital Management speaking to an audience of investors. He had noticed, Wikipedia reports, “that a particular derivative was losing value in a manner and to a degree which seemed to diverge from market expectations.” It turned out that a JPMorgan trader, known as “the London Whale,” had been shorting the index by making huge trades.

Investors who followed Weinstein's “tip” did poorly during the early months of 2012 as JPMorgan strongly supported its position. However, Wikipedia reports, by May after investors became concerned about the implications of the European financial crisis, the situation reversed and JPMorgan suffered large losses. No doubt the hedge funds involved were overjoyed at the gains they had achieved at the expense of JPMorgan Chase—though the latter is hardly suffering as it still reported an overall profit of nearly $5 billion in its latest quarterly report.

Banks are criminal enterprises and should be seized

Whatever the outcome of the various investigations now in progress—and many more details are sure to emerge in coming weeks—one thing is clear. These latest revelations, on top of predatory lending, drug money laundering and other criminal behavior, shows that the banks are criminal enterprises and need to be seized for the public good and to avoid, in the words of Fidel Castro, “an inevitable disaster.”

The 2012 presidential election campaign of the Party for Socialism Liberation calls for putting the assets and profits of the banks under the people’s control to:

• Fund a massive jobs program! Jobs for all with union wages, rights and benefits. Full rights for all workers regardless of citizenship or legal status.
• Provide free education for all—cancel student debt! Fund free, quality education for everyone from Pre-K through college,
• End all foreclosures and evictions! Abolish interest payments to the banks—access to affordable housing for all.

By seizing, or expropriating, the assets and profits of the major private banks that are owned by the richest of the 1 percent and putting those funds in a democratically controlled and publicly owned People’s Bank, we can have an economy that serves the 99 percent.

To bring this about, we need to establish a government of the working class and its allies, which will make seizing the banks a top priority. Such an outcome will not only save us from the otherwise inevitable disaster casino capitalism has in store for us but will open the road to a society in which the producers of wealth will for the first time collectively own it, democratically control it, and ensure that it is used for human needs instead of profit.

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