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Re: Political Affairs Magazine - The Crash of 2008 and Historical Materialism

charlesb — Mon, 12 Jan 2009 15:46:25 -0000

http://www.thestar.com/prin...

Citigroup, Morgan Stanley merger in works

Merger of giant monopolies ( oligopolies ; a more and more concentrated financial oligarchy) creates a higher monopoly concentration. So, the monopolizing process continues a pace. As Comrade Marx puts it on the larger level of historical tendency of capitalism :

"As soon as this process of transformation has sufficiently decomposed the old society from top to bottom, as soon as the laborers are turned into proletarians, their means of labor into capital, as soon as the capitalist mode of production stands on its own feet, then the further socialization of labor and further transformation of the land and other means of production into socially exploited and, therefore, common means of production, as well as the further expropriation of private proprietors, takes a new form. That which is now to be expropriated is no longer the laborer working for himself, but the capitalist exploiting many laborers. This expropriation is accomplished by the action of the immanent laws of capitalistic production itself, by the centralization of capital. One capitalist always kills many."

http://www.marxists.org/arc...

Lehman Brothers, AIG, Citigroup , Smith Barney, many, just got "killed" ( sort of like Bartzeeni got killed by the Godfather) by ????? _Morgan_ Stanley ? JP _Morgan_ ? Who donnit ?

Morgan ? Morgan ? Morgan? Not that Morgan !
Good gooten Morgan , America !

"Consolidation" is "oligopolization", "centralization of capital"

^^^^

Citigroup, Morgan Stanley merger in works
TheStar.com - Business - Citigroup, Morgan Stanley merger in works

January 12, 2009
SARA LEPRO
The Associated Press

NEW YORK - Citigroup and Morgan Stanley may announce as early as Monday a deal to combine their brokerages, a move analysts say could trigger a fresh wave of consolidation in the troubled and thinning banking industry.

The potential deal between Citi and Morgan Stanley underscores the problems still facing the industry after a year in which several well-known financial firms toppled under the weight of rising losses tied to bad mortgages.

"This really shows the continued vulnerability of the banking system," said Keith Springer, president of Capital Financial Advisory Services.

Morgan Stanley is likely to pay Citigroup between $2 billion (dollar figures U.S.) and $3 billion for a 51 per cent stake in the brokerage Smith Barney, a person close to the negotiations said Saturday.

Morgan Stanley would then have the option to buy the rest of Smith Barney over the next three to five years, the person said. The person spoke on condition of anonymity because he was not authorized to speak about the ongoing talks.

A spokesman for Citigroup declined to comment on Sunday. Calls to Morgan Stanley were not immediately returned.

During the past several months of financial turmoil, many banks have had to overhaul their business models. Morgan Stanley and Goldman Sachs Group Inc. became bank holding companies shortly after rival Lehman Brothers Holdings Inc. filed for bankruptcy protection and Merrill Lynch & Co. was sold to Bank of America Corp. in an emergency sale initially valued at $50 billion. Investors had grown concerned that stand-alone investment banks would no longer be viable amid continued weakness in the credit markets.

A deal to combine the brokerages of Citigroup and Morgan Stanley would not only give Citi much-needed cash, it would also give Morgan Stanley more manpower, analysts said.

"If Morgan and Citi get together, they would be able to put together a retail brokerage unit that is larger than Merrill's thundering herd, which could position them well in the marketplace," said Chris Probyn, chief economist at State Street Global Advisors. "This may be a way of staying competitive."

The move would also be beneficial to Morgan Stanley as it looks to build its less-risky, lower leveraged businesses after becoming a bank holding company. The move would also provide Morgan Stanley a greater sales force to build its growing retail deposit based, which has been among the bank's top priorities in recent months, Lauren Smith, an analyst with Keefe, Bruyette & Woods Inc. wrote in a research note Monday.

Morgan Stanley has been able to hold up relatively better than other financial firms amid the ongoing credit market turmoil, though it did post a $2.37 billion loss during its fiscal fourth quarter, which ended Nov. 30. Still, Morgan Stanley's woes have not been of the same magnitude as Citi's.

Citigroup has been hit particularly hard by the housing and credit crises. Though the bank has received $45 billion in support from the government's $700 billion financial rescue fund, its financial footing remains shaky.

Banking regulators are now pushing Citi to replace its chairman, Sir Win Bischoff, in an effort to restore confidence in the New York-based bank after it needed billions of dollars in government support, according to a New York Times report. The Times and The Wall Street Journal said Monday that Richard Parsons, former CEO of Time Warner Inc. and a Citi director, is likely to succeed Bischoff.

Citi has reported four straight quarters of losses totalling $20.2 billion through September 2008 and is expected to post yet another loss when it releases fourth-quarter results on Jan. 22.

Citi could report an operating loss as large as $10 billion during the fourth quarter, according to the report in the Journal. About $4 billion of the loss would be offset though by a gain from the bank's sale of its German retail banking operations in a deal that closed late last year, the newspaper said.

Citigroup declined to comment Monday on the newspaper reports.

Analysts polled by Thomson Reuters, on average, forecast a loss of $1.14 per share for the fourth quarter. Based on Citi's outstanding share count as of Sept. 30, that would equate to a loss of about $6.21 billion. Analysts do not always include special one-time gains in their estimates.

A sale of Smith Barney could provide Citi needed cash to help further offset the mounting losses and help the bank streamline operations to reduce costs amid the ongoing credit crisis.

"It looks to me like they are rethinking the business model that Sandy Weill had, which was a one-stop shop model," said Probyn, referring to Citigroup's former chairman and chief executive. "Now they are thinking about maybe going back to a more streamlined division."

Weill built Citigroup into the conglomerate it is today through a series of mergers and acquisitions over the past couple decades before handing the reins to Charles Prince in 2003. The bank has been criticized for years that it had grown too big for its own good, with many investors clamouring for a break-up of its units.

But while Citigroup has struggled with its size, its competitors have gotten bigger.

Rivals JPMorgan Chase & Co., Bank of America Corp. and Wells Fargo & Co. all made acquisitions in the last year to better diversify their businesses.

Bank of America bought Merrill Lynch & Co. and mortgage lender Countrywide Financial Corp. JPMorgan, meanwhile, scooped up storied investment bank, Bear Stearns Cos., in March, as well as the lucrative deposits of failed thrift Washington Mutual Inc. And Wells Fargo beat Citigroup in its pursuit of troubled Charlotte, N.C., bank Wachovia Corp.

Re: Political Affairs Magazine - Another Crisis of Capitalism

charlesb — Mon, 12 Jan 2009 15:22:18 -0000

http://otrans.3cdn.net/4559...

Re: Ten Best and Worst of Marxism for 2008

charlesb — Sun, 11 Jan 2009 18:39:07 -0000

!. Wall Street bankers and bridges-- a quote from Anatole France slightly modified

^^^^
Turned into its opposite. The original has to do with poor people sleeping under bridges.

Re: Depression Economics and Fundamental Change

charlesb — Wed, 07 Jan 2009 18:28:00 -0000

Freddy the Finance Freeloader Economy

he New York Times / December 22, 2008 / Op-Ed Columnist

Life Without Bubbles
By PAUL KRUGMAN

Whatever the new administration does, we're in for months, perhaps
even a year, of economic hell. After that, things should get better,
as President Obama's stimulus plan â O.K., I'm told that the
politically correct term is now "economic recovery plan" â begins to
gain traction. Late next year the economy should begin to stabilize,
and I'm fairly optimistic about 2010.

But what comes after that? Right now everyone is talking about, say,
two years of economic stimulus â which makes sense as a planning
horizon. Too much of the economic commentary I've been reading seems
to assume, however, that that's really all we'll need â that once a
burst of deficit spending turns the economy around we can quickly go
back to business as usual.

^^^
CB: Can't go back to business as usual sounds like a Workers World
slogan from a few years ago.

Why can't things go back to business and finance as usual ? Has there
been some fundamental crisis in capitalism ?

Wouldn't it be a mistake to
believe that this tendency of imperialism to decay precludes the rapid
growth of
capitalism ?

^^^^

In fact, however, things can't just go back to the way they were
before the current crisis. And I hope the Obama people understand
that.

^^^
CB: Do the Wall Street people understand that ?

^^^^^

The prosperity of a few years ago, such as it was â profits were
terrific, wages not so much â depended on a huge bubble in housing,
which replaced an earlier huge bubble in stocks. And since the housing
bubble isn't coming back, the spending that sustained the economy in
the pre-crisis years isn't coming back either.

^^^
CB: What about the $ 8 trillion just spent on Wall Street revival ?
Spend that and more on mortgagors, autoworkers, debtors and workers of
all types.

^^^^

To be more specific: the severe housing slump we're experiencing now
will end eventually, but the immense Bush-era housing boom won't be
repeated. Consumers will eventually regain some of their confidence,
but they won't spend the way they did in 2005-2007, when many people
were using their houses as ATMs, and the savings rate dropped nearly
to zero.

So what will support the economy if cautious consumers and humbled
homebuilders aren't up to the job?

A few months ago a headline in the satirical newspaper The Onion, on
point as always, offered one possible answer: "Recession-Plagued
Nation Demands New Bubble to Invest In." Something new could come
along to fuel private demand, perhaps by generating a boom in business
investment.

^^^
CB: "Business investment" ? That's kind of vague.

^^^^

But this boom would have to be enormous, raising business investment
to a historically unprecedented percentage of G.D.P., to fill the hole
left by the consumer and housing pullback. While that could happen, it
doesn't seem like something to count on.

^^^
CB: Ye olde entrepreneurial spirit is not up to it anymore ? Wow,
capitalism really is a spent force. What is to be done ?

^^^

A more plausible route to sustained recovery would be a drastic
reduction in the U.S. trade deficit, which soared at the same time the
housing bubble was inflating. By selling more to other countries and
spending more of our own income on U.S.-produced goods, we could get
to full employment without a boom in either consumption or investment
spending.

^^^^^
CB: Ah , the Entrepreneurial Spirit revived: A Free Trade Bubble !
Maybe the South Seas are fertile again .

^^^

But it will probably be a long time before the trade deficit comes
down enough to make up for the bursting of the housing bubble. For one
thing, export growth, after several good years, has stalled, partly
because nervous international investors, rushing into assets they
still consider safe, have driven the dollar up against other
currencies â making U.S. production much less cost-competitive.

^^^
CB: The strong dollar makes our sales weak.

^^^^

Furthermore, even if the dollar falls again, where will the capacity
for a surge in exports and import-competing production come from?
Despite rising trade in services, most world trade is still in goods,
especially manufactured goods â and the U.S. manufacturing sector,
after years of neglect in favor of real estate and the financial
industry, has a lot of catching up to do.

^^^^
CB: Runaway plants; what goes around comes around.

Anyway, the rest of the world may not be ready to handle a drastically
smaller U.S. trade deficit. As my colleague Tom Friedman recently
pointed out, much of China's economy in particular is built around
exporting to America, and will have a hard time switching to other
occupations.

^^^
CB: Yeah. Those Chinese are knocking down all Yankee walls with
commodities as artillery.

^^^^

In short, getting to the point where our economy can thrive without
fiscal support may be a difficult, drawn-out process. And as I said, I
hope the Obama team understands that.

^^^
CB: Do you mean we are going to have to be patient with the O team
because there are no quick fixes for late, late, last stage capitalism,
imperialism ? or are we in a real fix ? Will O fix your red wagon ?

^^^

Right now, with the economy in free fall and everyone terrified of
Great Depression 2.0, opponents of a strong federal response are
having a hard time finding support. John Boehner, the House Republican
leader, has been reduced to using his Web site to seek "credentialed
American economists" willing to add their names to a list of "stimulus
spending skeptics."

But once the economy has perked up a bit,
^^^^
CB: Just like that ? Presto chango ?

^^^

there will be a lot of
pressure on the new administration to pull back, to throw away the
economy's crutches. And if the administration gives in to that
pressure too soon, the result could be a repeat of the mistake F.D.R.
made in 1937 â the year he slashed spending, raised taxes and helped
plunge the United States into a serious recession.

The point is that it may take a lot longer than many people think
before the U.S. economy is ready to live without bubbles.

^^^
CB: Like forever ?

^^^^^

And until
then, the economy is going to need a lot of government help.

^^^^^^

CB: This is not a free market, even when the government is not paying
out trillions so obviously to the "private" sector. It's not a free
market, because the "too big to fail" institutions don't have to worry
about "freely" failing ever.

Freddy the Finance Freeloader Economy

Re: Political Affairs Magazine - Reflections on the (Unplanned) Death of an Ideology

charlesb — Wed, 07 Jan 2009 16:42:10 -0000

The agitation that should be foremost right now, because it's right in everybody's face is to not get away from the 8 trillion dollar gift that the federal government just gave failing Wall Street mega-banks and insurance companies. We can't let that act fade from the mass public consciousness. That is, _the_ main thing for the conscious sections of the working class to keep blasting out as agitation right now is that the Wall Street's biggest banks and insurance companies got a trillion dollar gift with no questions asked as to what they would do with it or no demands like "it was your own fault that you went bankrupt", so when the various citizens in foreclosure and debt crisis, cities and states , in debt crisis demand billions there should be no questions as to what it is for and no comments about "it was your fault that you went into debt." And every local activist should be pushing her or his local leaders to make demands for a bailout to some local organization or n.g.o. or g.o. . Give the People the Money ! To me that is the foremost working class conscious demand of this moment of economic crisis.

I think we should have a march on Wall Street with a demand for the Wall Street corporations that got the bailout to report to us in detail and full transparency what they are doing with the $ 8 trillion of US taxpayers' money they got .

And the masses already agree with us, and see this. It's popular right now. We want to tattoo it into everybody's mind and memory. The Great Wall Street Bank Heist of 2008.That will help create a mass consciousness that can generate a class movement from the bottom up to change Washington.

Yes we can !

Re: Ten Best and Worst of Marxism for 2008

charlesb — Wed, 07 Jan 2009 16:35:18 -0000

10. Inability to get more than five Reds blogging daily. What is the problem? You used to have the biggest mouths on the block!

^^^^
Check out these listservs for googobs of Reds daily. Listservs are more collective than blogs.

http://lists.econ.utah.edu/...

http://archives.econ.utah.e...
http://archives.econ.utah.e...
http://lists.econ.utah.edu/...

Re: Ten Best and Worst of Marxism for 2008

charlesb — Wed, 07 Jan 2009 16:28:41 -0000

5. Failure to bury Lenin’s mummified remains. Let the man rest in peace! Come on comrades this is the 21st century! (and what’s up with all those vampire movies)?

^^^^^
CB; True. But burying people didn't just come into fashion in the 21st Century. _It_ is the old fashioned way.

Re: Ten Best and Worst of Marxism for 2008

charlesb — Wed, 07 Jan 2009 16:20:54 -0000

Ten best reasons that the US is not a free market economy. Best answers to be on the David Numberman show:

1. Wall Street Bankers are not free to sleep under bridges at night.

Re: Political Affairs Magazine - Wilfred Sellars and Marxism

charlesb — Wed, 07 Jan 2009 15:55:37 -0000

Crane uses the example of a fig tree to clarify Sellars' views. An old fashioned materialist ( such as Lenin ) might say that we have the notion of a fig tree as a result of having learned how to use the words "fig tree" as a result of our early education. Our senses were presented with a particular object, our parents say "fig tree" and we learn that this "given" is to be referred to as a "fig tree."

^^^
Charlesb: However, In _Materialism and Empirio-Criticism_ , Lenin disagrees with Mach that atoms are not real objects ( Mach thinks they are just aids to thought). So, since Lenin knows that humans ( at that time) could not sense (see, hear, smell or touch) atoms directly, Lenin must know that words and concept are formed both by direct reflection and by a more complicated process.

Re: Political Affairs Magazine - Reflections on the (Unplanned) Death of an Ideology

charlesb — Mon, 05 Jan 2009 13:51:30 -0000

Because markets aren't self-adjusting and because a healthy, dynamic economy requires public financing and governmental regulation of the financial markets, it is obvious that the US is in dire need of a form of economic therapy far different from the free-market quackery practiced by the Bush administration.

^^^
CB: On the other hand, we can say , objectively, that the US is _not_ a free market in fact, because of the $8 trillion bailout of some of the biggest Wall Street financial oligarchs. It is a monopoly, no "free" system , fundamentally. Bush and administration have administered the biggest non-free market ever.

Re: Political Affairs Magazine - The Crash of 2008 and Historical Materialism

charlesb — Fri, 02 Jan 2009 18:15:51 -0000

My analysis of the current scientific and technological revolution
- discussed a few years ago here on Marxism-Thaxis is based on
extending the logic that Marx developed in _Capital_ I in the chapters
on machines and factories.

Part IV: Production of Relative Surplus Value

Ch. 12: The Concept of Relative Surplus-Value
Ch. 13: Co-operation
Ch. 14: Division of Labour and Manufacture
Ch. 15: Machinery and Modern Industry

Marx noted a two "pronged" process: 1) greater cooperation, i.e.
formation of factories, increased local socialization of labor, and
2)machines. In the late 20th Century, the revolution in machine
technology, with a revolution in communication and transportation,
including the development of computers, robots, containerization, mass
trucking, just in time delivery, et al., the overall tendency to
"cooperation" , bigger and bigger factories, and factory towns was
negated and reversed, turned into its opposite. The points of production
were scattered geographically and thinned inside factories. This is a
dialectical negation of the negation , qualitative change, a revolution,
a dialectical leap, because one aspect of the contradiction - machines -
negates the other aspect -cooperation.

As this is derived from Marx, I'd call it a Marxist defintion of the latest scientific and technological revolution