Hit and run: Sunday readings — 05-10-08

Pheewww…

One American government won’t have to intervene in their national bank anyway… (Penguin News, via Mercopress):

IN the light of the global financial situation, Standard Chartered Bank’s Stanley Manager, has offered reassurance to individuals, companies and the Falkland Islands Government, all of whom have significant funds held by the bank.

“At this time, we can reassure you that, despite the turmoil in the financial markets, Standard Chartered remains in great shape. We have a clear and consistent strategy; we do business in markets that we know intimately, with products we fully understand, and with customers with whom we seek to nurture and build relationships.

“At Standard Chartered’s Interim Results announcement in August, we demonstrated that we are well capitalised, with a strong liquidity position and no direct exposure to the US sub-prime housing situation.

Laugh, and the world laughs with you

Chilean President, Dr. Michelle Bachelet explains recent Latin American history to U.S. investors (Santiago Times):

“Why has there never been a coup in the United States?” joked Bachelet to a group of prominent U.S. investors. “Because there is no U.S. embassy in the United States.”

A new world order…

Venezuela, according to John McCain (Jesus’ General):

And, one longer piece to read:

“During the past decade, Latin America has become the most exciting region of the world,” Latin America’s favorite gringo writes, in an article also suggesting that the United States of America is becoming Bolivia or Guatemala… and not in a good way:

…
Sixty years ago, US planners regarded Bolivia and Guatemala as the greatest threats to its domination of the hemisphere….

…This wonderful anti-market system designed by self-proclaimed market enthusiasts is now being implemented in the United States, to deal with the very ominous crisis of financial markets. In general, markets have well-known inefficiencies. One is that transactions do not take into account the effect on others who are not party to the transaction. These so-called “externalities” can be huge. That is particularly so in the case of financial institutions. Their task is to take risks, and if well-managed, to ensure that potential losses to themselves will be covered. To themselves. Under capitalist rules, it is not their business to consider the cost to others if their practices lead to financial crisis, as they regularly do. In economists’ terms, risk is underpriced, because systemic risk is not priced into decisions. That leads to repeated crisis, naturally. At that point, we turn to the IMF solution. The costs are transferred to the public, which had nothing to do with the risky choices but is now compelled to pay the costs – in the US, perhaps mounting to about $1 trillion right now. And of course the public has no voice in determining these outcomes, any more than poor peasants have a voice in being subjected to cruel structural adjustment programs.

A basic principle of modern state capitalism is that cost and risk are socialized, while profit is privatized. That principle extends far beyond financial institutions. Much the same is true for the entire advanced economy, which relies extensively on the dynamic state sector for innovation, for basic research and development, for procurement when purchasers are unavailable, for direct bail-outs, and in numerous other ways. These mechanisms are the domestic counterpart of imperial and neocolonial hegemony, formalized in World Trade Organization rules and the misleadingly named “free trade agreements.”