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Today's Stories March 20, 2008 Millet / Toussaint Mike Whitney March 19, 2008 Patrick Cockburn Robert Fisk Jeff Taylor Ed Ruggero Ron Jacobs Christopher
Fons Sherwood Ross Cynthia McKinney Joshua Frank Robert Weissman Walter Brasch Yifat Susskind Andrew Wimmer Website of
the Day
March 18, 2008 David Price Paul Craig
Roberts Tim Wise Patrick Cockburn Conn Hallinan James T. Phillips Uri Avnery David Macaray Marjorie Cohn Peter Zinn Dan La Botz Monica Benderman
March 17, 2008 Pam Martens Sasan Fayazmanesh Nelson P. Valdés Peter Morici Wajahat Ali Ronnie Cummins Shaun Harkin Ali Khan Robert Jensen P. Sainath Greg Moses Dr. Susan Block Website of the Day
March 15 / 16, 2008 Patrick Cockburn Mike Whitney Ralph Nader Robert Pollin Diane Christian Wajahat Ali Tom Wright
/ Alan Farago Greg Moses Michael Hudson Martha Rosenberg John Goekler Uzma Aslam
Khan Oren Ben-Dor David Underhill Fred Gardner David Michael
Green Rev. William E. Alberts Gail Dines David Yearsley Chris Clarke Poets' Basement Website of
the Day
March 14, 2008 Paul Craig
Roberts Don Santina
Patrick Cockburn
Tim Rinne Robert Fantina
Saul Landau
David Macaray
Franklin Lamb
Michael Neumann
March 13, 2008 Paul Craig
Roberts Mike Whitney
Assaf Kfoury
Andy Worthington Adam Federman
March 12, 2008 Dave Lindorff
R.F. Blader
Yonatan Mendel
Jonathan Cook
Bill and Kathy
Christison James J. Brittain
Ron Jacobs
March 11, 2008 Paul Craig
Roberts Ed O'Loughlin
Ramzy Baroud Kathy Christison
China Hand John Joslin
Mike Averko
Ben Rosenfeld
Thierry Paquot
March 10, 2008 Uri Avnery
Col. Dan Smith
R.F. Blader
Michael Neumann
Bob Fitrakis
and Harvey Wasserman James J. Brittain
Missy Comley
Beattie March 8-9, 2008 Weekend Edition JoAnn Wypijewski
Mike Whitney
Peter Morici
Ralph Nader
Jonathan Cook
Steve Niva
Bill and Kathy
Christison Hervé
Do Alto and Franck Poupeau Eric Walberg
Scott Johnson
Mark Scaramella
Bill Clinton Poet's Basement
Website of
the Weekend March 7, 2008 Patrick Cockburn
Robin Blackburn
Saul Landau
Binoy Kampmark
Chris Floyd
Andy Worthington Will Potter March 6, 2008
March 6, 2008 Vincent Navarro Forrest Hylton Peter Morici George Ciccariello-Maher John Ross Jacob Hornberger Paul Watson Dan Bacher Website of the Day
March 5, 2008 Cockburn /
St. Clair Joanne Mariner Fidel Castro Christopher
Brauchli Steven Sherman Dave Lindorff James Murren Adam Engel Website of Day
March 4, 2008 Wajahat Ali William Blum Bill Quigley Ralph Nader Patrick Irelan James J. Brittain
/ Norman Solomon Jacob Hornberger Andy Worthington Mike Averko Website of the Day
March 3, 2008 Jennifer Loewenstein Alan Farago Richard Gott Wajahat Ali Paul Craig Roberts Robert Weissman Uri Avnery Martha Rosenberg Eva Liddell Michael Donnelly Website of the Day
March 1 / 2, 2008 Alexander Cockburn Paul Craig
Roberts Kathleen and Bill Christison Nelson P. Valdés Christopher Brauchli Ron Jacobs John Ross Robert Fantina Robert Weissman Mohammed Omer Remi Kanazi Bob Jackson Richard Rhames Franklin Lamb Rannie Amiri David Michael
Green Conn Hallinan Faheem Hussain Poets' Basement Website of
the Weekend
February 29, 2008 Matt Gonzalez Jonathan Cook Joshua Frank Anthony DiMaggio Linn Washington, Jr. Binoy Kampmark Robert Bryce Sonja Karkar Dave Lindorff Website of
the Day
February 28, 2008 Patrick Cockburn Fred Gardner Michael Levitin William S.
Lind David Macaray Stephen Fleischman George Wuerthner Laura Carlsen Carl Finamore Michael Dickinson Website of the Day
February 27, 2008 David Rosen Vijay Prashad Harvey Wasserman Andy Worthington Wajahat Ali Peter Morici Stephen Philion Michael Donnelly Erica Rosenberg / Website of
the Day
February 26, 2008 Debbie Nathan Alan Dershowitz
Harvey Wasserman Michael Colby Gary Leupp David Orchard Martha Rosenberg Fran Shor Serge Halimi Global Balkans Website of
the Day
February 25, 2008 Roger Morris Anthony DiMaggio Ralph Nader Patrick Cockburn Paul Craig Roberts Peter Morici Dave Lindorff Saul Landau
/ Heather Gray Robert Weitzel John Halle Website of the Day
Alexander Cockburn Paul Craig
Roberts Wajahat Ali Ralph Nader Jürgen
Vsych Fidel Castro Andy Worthington David Macaray Jeremy Scahill David Krieger Ron Jacobs Michael Garrity Brian McKenna Missy Beattie Fred Gardner Boris Kagarlitsky Mike Ferner Dan Bacher Christopher
Ketcham Poets' Basement Website of
the Weekend
February 22, 2008 Mike Whitney Jason Hribal Liaquat Ali Khan Joshua Frank Dave Lindorff Liliana Segura Robert Fantina Yifat Susskind Norm Kent Website of
the Day February 21, 2008 Saul Landau Elizabeth Schulte Helen Redmond Benjamin Dangl Michael Levitin Liam Leonard Patrick Irelan Linn Cohen-Cole Michael Simmons CounterPunch
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March 20, 2008 The Daylight Robbery of BorrowersThe Triple Failing of the Big Private BanksBy DAMIEN MILLET and ERIC TOUSSAINT Since August 2007, US and European banks have constantly made headline news concerning the deep crisis they are going through and its knock-on effect on the neoliberal economic system as a whole. Asset depreciation for these banks currently stands at over 200 billion dollars. Several banking research services and seasoned economists estimate that the final damage will exceed 1,000 billion dollars . How did the banks manage to build such an irrational lending system? Eager for profit, mortgage companies made loans to a sector of the population that was already heavily indebted. The conditions attached to these mortgages--highly profitable for the lender--amounted to daylight robbery for the borrower: the interest rate was fixed and reasonable for the first two years but thereafter rose sharply. Lenders assured borrowers that the property they were buying would quickly appreciate thanks to the boom in the real estate sector. The problem was that the real estate bubble burst in 2007 and house prices started to go steadily down. The number of defaults on payment soared and mortgage brokers had trouble repaying their own loans. To protect themselves, the big banks either refused extra credit to the mortgage lenders or agreed to new loans at far higher interest rates. But the spiral did not stop there, since the big banks had bought up a large number of the original loans as off-balance sheet operations by creating specific companies called Structured Investment Vehicles (SIV), which finance the purchase of high yield mortgages converted into bonds (CDOs, or Collateralised Debt Obligations). As from August 2007, investors stopped buying the unguaranteed commercial papers issued by SIVs, which no longer looked like a safe or credible option. Consequently, the SIVs lacked the liquidity needed to buy up mortgages and the crisis worsened. The big banks who had created the SIVs therefore had to bail them out to stop them going bankrupt. Up to then, SIV operations had not appeared in the banks' accounts (thus allowing them to conceal the risks involved), but now the SIV debts had to come out of the closet and onto the books. The result was general panic. In the US, 84 mortgage companies either went bankrupt or partially stopped doing business between 1 January and 17 August 2007, as opposed to only 17 similar cases for the whole of 2006. In Germany, the IKB BANK and SachsenLB were saved by the skin of their teeth. Recently, in England, the bankrupt Northern Rock has had to be nationalised. On 13 March 2008, the Carlyle Capital Corporation (CCC) fund, known to be close to the Bush clan, collapsed with debts 32 times its capital. The following day, the prestigious US bank Bear Stearns (5th US investment bank) called on the US Federal Reserve to provide an emergency credit line. Bear Stearns is being snapped up by JPMorgan Chase for a mere pittance. Several branches of the lending market are shaky constructions on the point of collapse. They drag into their misadventures the powerful banks, hedge funds or investment funds through which they were created. The salvage of these private financial institutions requires massive intervention on the part of the public authorities. And thus once again, profits accrue to the private sector, and losses to the public purse. Which brings us to a key question: how is it that banks can readily waive bad debts to the tune of tens of billions of dollars yet have constantly refused to cancel the debts of developing countries? Why should the one be feasible and the other impossible? It should be remembered that the debts claimed today from these countries go back in the past to criminal dictatorships, corrupt regimes and leaders pandering to major powers and investors. The big banks lavished loans on such notorious regimes as that of Mobutu in Zaire, Suharto in Indonesia, the Latin-American dictatorships of the 1970s and 1980s, not to mention the apartheid regime in South Africa. How can the banks persist in inflicting the burden of debt on people who have suffered the consequences of despotic regimes funded by the banks themselves? From a legal standpoint, many of the debts appearing in their accounts are odious and as such should not be repaid. But the banks continue to demand their pound of flesh. We should also remember that the Third World debt crisis was caused by the drastic unilateral hike in interest rates imposed by the Fed in 1982. Up to then the private banks had been happily handing out variable rate loans to countries that were already over-indebted. The crash came when these countries could no longer sustain repayments. Today history is repeating itself, this time in the North: overindebted households in the US are faced with mortgages that they can never repay as they watch the value of their properties plummet. The recent waiving of debts by banks can only justify the claims of those who, like the CADTM, demand the cancellation of Third World debt. Why? Because the long-term debt of Third World public authorities towards international banks reached 181.9 billion dollars in 2006 . Since August 2007, the banks have had to cancel a far greater amount, with more still to come. It is clear that the big private banks have failed in three ways:
For all these reasons, the banks must be held to account for their actions over the last decades. The governments of the countries of the South must make a full audit of their debts, as Ecuador is doing today, and repudiate all debts that are odious and illegitimate. The bankers have shown them that such a step is perfectly feasible. It would also be the first step towards restoring the true role of finance, which is to be of service to men and women. Everywhere, without exception. Damien Millet, spokesman for CADTM France (Committee for the Abolition of Third World Debt), coauthor with Eric Toussaint of Who Owes Who?, Zedbooks, 2004. Eric Toussaint, president of CADTM Belgium, author of The World Bank: A Critical Primer, Pluto, London, 2008. Translated by Judith Harris. ![]()
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