Nov 19, 2007
The following article is translated from the November 9 issue of Lutte Ouvrière (Workers Struggle), published by the revolutionary workers organization of that name in France.
One after another, the heads of Merrill Lynch, Citigroup (the biggest bank in the U.S. and the world) and the Union Bank of Switzerland (USB), three of the biggest financial companies in the world, were fired. These companies' stockholders blamed these executives for the companies' billion-dollar losses.
From real estate speculation in the U.S. to the unbridled world financial speculation that it fed, the entire financial system is affected. No one really knows how far the crisis will go. From week to week, the enormity of the sums squandered in speculative operations has increased at a dizzying pace. It began with some mortgage companies and then spread rapidly to all the big banks, including outside the U.S. Thus Merrill Lynch's October estimates of losses in speculative investments rose from 4.9 to 7.9 billion dollars. At Citigroup, financial analysts estimate the bank will need to take 30 billion dollars from its own funds to cover investments that today are worthless.
The most recent estimate of the size of funds lost this year due to financial speculation in risky mortgage loans in the U.S. varies from 100 to 350 billion dollars. That's equal to the total budget of the French government.
But it's the population, the working people of all these countries, who have already been asked to pay for this monstrous waste. In the U.S. an estimated two million families face foreclosure. Tens of thousands of construction workers have already been laid off, as well as tens of thousands of bank and financial service workers throughout the country.
The governments in the U.S. and Europe have intervened in this crisis for months. They are not trying to prevent the layoffs or foreclosures or bankruptcies. They are trying to bail out the banks. This summer, tens of billions of dollars in public funds were put at the disposal of banks weakened by all their speculative activities. Just recently the Federal Reserve bank made 41 billion dollars available to the U.S. financial system.
When will they stop trying to make the population pay for their speculation? When workers force these parasites to put the capital they have accumulated in the hands of the population to meet its own needs.