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by FourthBase » Wed Jun 29, 2016 4:34 pm
by American Dream » Wed Jun 29, 2016 4:58 pm
Diana Johnstone’s poisonous nativism
It should probably come as no big surprise that the preponderance of articles appearing on CounterPunch favored Brexit. It goes hand in hand with the tilt toward Vladimir Putin whose hostility to the European Union is generally considered in these ranks as practically on the same level as Che Guevara’s call for “two, three, many Vietnams”.
Most of the authors are sensible enough to admit that there were nativist tendencies at work but they were secondary to the more important need for allowing Britain to return to the pro-working class economic policies that Tories and treacherous New Labour overturned. Jeremy Corbyn’s role in all this is ambivalent. On record for opposing Brexit, some thought he dragged his feet in speaking against it under the influence of his press secretary Seumas Milne who was about hardcore a Putinite you can find.
Leave it to Diana Johnstone to break with the sane Brexit consensus at CounterPunch and plunge deeply into UKIP territory. An ardent fan of Vladimir Putin, Johnstone was bold enough to tell CounterPunch readers a while back that Marine Le Pen was on the French left:If “the right” is defined first of all by subservience to finance capital, then aside from Sarkozy, Bayrou and perhaps Joly, all the other candidates were basically on the left. And all of them except Sarkozy would be considered far to the left of any leading politician in the United States.
This applies notably to Marine Le Pen, whose social program was designed to win working class and youth votes. Her “far right” label is due primarily to her criticism of Muslim practices in France and demands to reduce immigration quotas, but her position on these issues would be considered moderate in the Netherlands or in much of the United States.
Much of the United States? I suppose so if you are referring to the sort of people who listen to Rush Limbaugh every day and look like the people Diane Arbus photographed.
In today’s CounterPunch Johnstone ruminates on how “How Forcing People Together Tears Them Apart”. Well, heavens yes. As David Duke once put it, forcing whites to live next to Blacks is inviting disaster. The best thing would be to have separate homelands for each race. No matter his excesses, the white nationalist is savvy enough to take Putin and Trump’s side against the dreaded globalists.
Of course, the main cause of friction is immigration. You get all those Jamaicans, Pakistanis and Poles swarming into good British neighborhoods with their strange clothing, foods and musical tastes. Feh, who needs them. Even worse, their foreignness goes hand in hand with stealing jobs from good Englishmen whose ancestors after all have been here for millennia and invented democracy.
by MacCruiskeen » Wed Jun 29, 2016 5:04 pm
by backtoiam » Wed Jun 29, 2016 5:53 pm
“Italy will do everything necessary to reassure people,” said premier Matteo Renzi. “This is the moment of truth we have all been waiting for a long time. We just didn’t know it would be Brexit that set the elephant loose,” said a top Italian banker.
The First Casualty Of Brexit: Italy Prepares €40 Billion Bank Bailout
by Tyler Durden
Jun 28, 2016 5:27 AM
Barely has the market had time to digest last week's Brexit vote by the UK, a vote which may never actually be implemented if the "sturm und drang" campaign unleashed by the EU and the ECB on UK capital markets succeeds in changing the mind of enough "Leavers" to the point that the entire referendum is called off and Boris Johnson never triggers the Article 50 clause, and already Europe's most financially troubled nation, Italy, is using Brexit as a pretext to unleash a €40 billion ($44 billion) bailout of its insolvent banks.
As the WSJ reported earlier, the Italian government is considering a capital injection for the country’s banking system, after Italian lenders were hit by a sharp selloff in banking stocks Friday, triggered by Britain’s vote to leave the European Union. Of course, Brexit has nothing to do with it: instead, as everyone knows by now, Italy's banks are beset with €360 billion (and rising) in bad loans, some 18% of total bank balance sheets, chronically poor profitability amid record-low interest rates, thin capital buffers and high costs. It was precisely these concerns that the recently created Atlante "bad bank" was supposed to address until it became painfully obvious that its total war chest of €4.25 was woefully inadequate to put even the smallest dent on Italian bank insolvency.
According to Ambrose Evans-Pritchard, the country is the first serious casualty of Brexit contagion and a reminder that the economic destinies of Britain and the rest of Europe are intimately entwined. Morgan Stanley warned in a new report that eurozone GDP would contract by almost as much as British GDP in a "high stress scenario". “When Britain sneezes, Italy catches a cold. It is the weakest link in the European chain,” said Lorenzo Codogno, former director-general of the Italian treasury and now at LC Macro Advisors.
So, in the spirit of never letting a Brexit crisis go to waste, Italy has decided to use the British referendum as the scapegoat and demand nearly ten time as much in new capital to be used (and abused) as Italy's banks see fit. As the Telegraph adds, an Italian government task force is watching events hour by hour, pledging all steps necessary to ensure the stability of the banks. “Italy will do everything necessary to reassure people,” said premier Matteo Renzi. “This is the moment of truth we have all been waiting for a long time. We just didn’t know it would be Brexit that set the elephant loose,” said a top Italian banker.
According to the WSJ, the chairman of Lower House’s Finance Commission, Maurizio Bernardo, confirmed that the government is studying options to support the banking sector, including a capital injection, and said a law decree “with measures going in that direction” could be approved by the end of this week. So far no decision has been taken as the government is monitoring how markets respond after Friday’s steep downturn.
They said how such an intervention would be implemented is unclear at this stage. it is also unclear how such a direct state recapitalization of Italian banks using public funds would be permitted by current EU and ECB regulations, which prohibit state bailouts of insolvent banks, although Europe has a long and illustrious history of finding massive loopholes to that particular prohibition. Last but not least it is unclear how existing stakeholders, shareholders, bondholders and uninsured depositors, would be impaired under such a bailout.
Italian officials are studying a direct state recapitalization of the banks, to be funded by a special bond issue, the Telegraph adds. They also want a moratorium of so-called ‘bail-in’ rules and bondholder write-downs, but these steps are impossible under EU laws. Mr Renzi raised the subject urgently at a meeting with German Chancellor Angela Merkel and French president Francois Hollande at a Brexit summit in Berlin on Monday. “There has to be a suspension of the bail-in rules and state aid rules at the highest political level in the EU, otherwise I don’t see how this can work,” said Mr Codogno.
The new bail-in reform this year has brought matters to a head, catching EU authorities off guard. It was intended to protect taxpayers by ensuring that creditors suffer major losses first if a bank gets into trouble, but was badly designed and has led to a flight from bank shares. The Bank of Italy has called for a complete overhaul of the bail-in rules.
The WSJ adds that the government could invoke an exception to this rule under European law during exceptional market conditions. “I believe the measures could include a mix of public and private funds,” Mr. Bernardo said.
Meanwhile, Italy has certainly picked a great catalyst on which to blame the crisis that has been sweeping its banking system for the better part of the decade. The aftershocks of the U.K.’s vote to leave the EU in a referendum Thursday continued to rattle financial markets Monday, sending European shares sharply lower, with bank and travel stocks leading the declines.
Banca Monte dei Paschi di Siena SpA shares were down 12.2% on Monday, while Intesa Sanpaolo SpA was down 12.5%. Italy’s FTSE MIB lost 12.5% on Friday, with banking stocks the worst hit.
To be sure, yet another bailout would be a welcome move for banks which have been struggling to reduce their massive exposures to soured loans. As reported previously, investors have so far been unwilling to pay the prices banks were asking to sell their bad loans meaning Italian banks are stuck: they can't mark their bad loan to market without taking a massive hit to capital, and there are no willing buyers at current prices.
How did Italy arrive at the €40 billion numbers? Just like in the case of Neil Kashkari's "back of the napkin" TARP calculation which estimated US bank needs at $700 billion or 5% of the total $14 trillion in residential and commercial mortgages, so Italy is using a similar rule of thumb. Consultants have calculated that to bring around €200 billion of bad loans—the gross amount of soured loans where debtors are considered insolvent—closer to market values, the banking system would need a collective write-down of bad loans of about €40 billion. Some estimates place the write-down needed at roughly €30 billion.
And there's your €40 billion bailout total.
Banks have so far refused to take such a drastic action as they believe the market price of bad loans should be higher, in particular considering the value of collateral backing part of those bad loans. The problem is that in recent weeks most potential hedge fund buyers have balked at these bank offer prices.
For now Italy pretends to be in denial:
“Italian banks have the capacity to face this crisis on their own,” said Giovanni Sabatini, general manager of Italian banking association ABI, commenting on the option of government support to the sector.
However, following the next near-death experience of an Italian bank, the official narrative will quickly change.
Currently, it is practically impossible for Italian banks to raise capital. They are caught in a pincer as the ECB simultaneously demands compliance with tougher capital adequacy buffers, in some case demanding fresh infusions of capital three or four times. The banking squeeze has become politically explosive in Italy after thousands of small depositors were wiped out at four regional banks late last year. They were classified as junior bondholders, even though most of them were just ordinary savers who did not realize what was being done with their money.
Curiously, according to Codogno, the ECB is "unwittingly destabilizing the banks in an overzealous attempt to make Europe’s banks safer." It is almost as if Mario Draghi had greenlighted Brexit as the designated "crisis" that would be used to enable the circuitous bailout of Italian banks, the same banks of which Draghi was regulator during his tenure in the Bank of Italy, and whose actions have led to numerous lawsuits questioning the legality of the central bank under Draghi.
Italy is now paralyzed under the existing eurozone structure. Analysts say it desperately needs a US-style bank rescue along the lines of the ‘TARP’ in 2008, which used federal funds to mop up bad assets and stabilize the banks. This is forbidden by the eurozone. The likely outcome is that Italy's PM Renzi will be "forced" to take matters into his own hands and enact a unilateral sovereign rescue of the Italian banking system in defiance of the EU, unless he wins concessions soon from Brussels. Those who know him say he will not go down in flames for the sake of European ideological purity.
As a result, Brexit will be just the scapegoat used by Renzi and Italy to circumvent any specific eurozone prohibitions. And if it fails, all Renzi has to do is hint at a referendum of his own. Then watch as Merkel scrambles to allow Italy to do whatever it wants, just to avoid the humiliation of a potential "Italeave."
http://www.zerohedge.com/news/2016-06-2 ... nk-bailout
by Iamwhomiam » Wed Jun 29, 2016 8:31 pm
by Project Willow » Wed Jun 29, 2016 11:08 pm
by AhabsOtherLeg » Thu Jun 30, 2016 12:13 am
by MacCruiskeen » Thu Jun 30, 2016 4:38 am
Ahab wrote:Should've put money on it.
by seemslikeadream » Thu Jun 30, 2016 7:36 am
by American Dream » Thu Jun 30, 2016 7:57 am
Who Brexit Benefits
The British Leave vote cannot be reduced to racism — but that is the primary way the outcome will be experienced.
by Richard Seymour
Nigel Farage, leader of the UK Independence Party, at the European Parliament in December 2011.
The racists have successfully articulated a broad antiestablishment sentiment — originating in class injuries, regional decline, postindustrial devastation, generational anxieties, etc. — along bigoted, national chauvinist lines.
The Leave vote cannot be reduced to racism and nationalism — but that is the primary way in which it has been organized and recruited and directed, and that is the primary way in which the outcome will be experienced.
That this was achieved so soon after the fascist murder of a center-left, pro-immigrant member of parliament, is stunning in a way. It says something about the truculence of some of the chauvinism on display. It says something about the profound sense of loss which a reasserted “Britishness” is supposed to compensate for.
There is a lot of finger-wagging on Twitter and elsewhere about how the exit voters have just triggered economic self-destruction. House prices will fall, savings will be diminished, the pound will weaken, jobs will dry up.
Well, that’s all true. Except. Not everyone benefits from the insane property market. Not everyone has savings. Not everyone benefits, as the City of London does, from a strong pound. Manufacturing has suffered from that priority. Large parts of the country have been hemorrhaging jobs for years.
“The economy” is not a neutral terrain experienced by everyone in exactly the same way. And some of the votes, coming in core Labour areas, not necessarily strongly racist areas at first glance, indicate that. So people have voted against an economy that wasn’t working to their benefit. (That doesn’t mean the practical alternative will not be worse. I suspect it will be a great deal worse.)
Labour Party leader Jeremy Corbyn did the best he could in this scenario, offering a conditional, critical defense of Remain. Had he joined in the rah-rah cheerleading for the European Union, had he not prefaced his support with some serious criticisms, Labour would be looking at a bleak scenario in these mid-to-north England areas which have gone Brexit. By at least sounding critical, and above all keeping his distance from the Tories, he has probably avoided a Scottish outcome for the party in these areas.
But Corbyn was also not the dynamic factor in this referendum. The racists were. The chauvinists were. And the culture wars now afoot were signaled by UK Independence Party leader Nigel Farage, who greeted the victory with what can only have been a calculated dog whistle: Leave had “done it,” he said, “without a single bullet being fired.”
by Searcher08 » Thu Jun 30, 2016 8:24 am
by stefano » Thu Jun 30, 2016 8:32 am
by American Dream » Thu Jun 30, 2016 8:46 am
While Brexit clearly hands victory to the bigots of UKIP and the Tory right, a victory for remain would simply have perpetuated the anti-democratic neoliberal masochism that produced the motivation for people to align themselves with these bigots in the first place. In this light, we have to stop seeing the rabid nationalism of the far-right and the neoliberal cosmopolitanism of the pro-EU camp as polar opposites — in reality, the former is the logical outgrowth of the latter; its deformed Siamese twin in flesh and blood. The only thing the pro-EU camp was able to offer British voters was a continuation of the structural conditions that led to Brexit, combined with fanatical fear-mongering over the consequences of that outcome.
Ultimately, the British vote to leave the EU, whether it eventually materializes or not (and there is no guarantee that it will), is symptomatic of a much deeper and much more debilitating crisis: a structural crisis of democratic capitalism that has in recent years evolved from a global financial crisis into a deepening legitimation crisis of the political establishment, which is now in turn exploding into a full-blown crisis of governability of the existing social and political order. The fault-lines currently opening up in British and European politics would have eventually laid waste to the stability of the continent’s postwar order regardless of the outcome of this particular referendum. Brexit will simply speed up that ongoing process of political decomposition.
It is important to remember in this respect that David Cameron did not call this referendum because he truly cared about the opinion of ordinary people on the EU. Like Alexis Tsipras last year, he called the referendum in a risky and desperate gambit to keep his flailing party together — to silence the Tories’ eurosceptic right wing, disarm the constant backbencher challenges to his leadership, and inoculate the government against future defections to UKIP. This vote was never really about the EU; it was about one of the figureheads of Europe’s crumbling neoliberal center trying to reassert his hold over a party that was once the stable bedrock of the UK’s landed aristocracy and its metropolitan bourgeoisie, but that is now rapidly disintegrating in the face of a resurgent reactionary right.
by coffin_dodger » Thu Jun 30, 2016 8:55 am
Searcher08 wrote:
I actually can't add anything to the smiley. Does MI5 have some deep dirt on BoJo...?
by seemslikeadream » Thu Jun 30, 2016 9:18 am
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