1. Pandaigdigang Krisis saPinansyaKatapusan na nga ba ngKapitalismo?October 2008

2. Discussion Outline Ang Financial Crisis at Saklaw Nito Ugat ng Financial Crisis: Sistemang MonopolyoKapitalismo Epekto sa Ekonomya ng Pilipinas atManggawang Pilipino Tugon ng Manggagawa at Mamamayan ngBuong Daigdig 3. Worst fin. crisis since the 70s Collapse of 3 out of 5 biggestinvestment banks Bear Sterns, LehmanBrothers, Merrill Lynch Collapse of worlds largestinsurance firm American Insurance Group(AIG) Banking status for bankruptcyprotection Goldman Sachs, MorganStanley Worlds biggest bank collapse Washington Mutual 4. What happened inWall Street? March-08 Bear Sterns bailed-out by JP Morgan with US$30 Bbacking of US Federal Reserve Sep 7-08 Fannie Mae & Freddie Mac bailed-out by Fed w/ up to US$100 Beach US$1.8 trillion in assets Sep 14-08 Lehman Brothers (USs 4thlargest investment bank) files forbankruptcy with US$613 B in debt Merrill Lynch (USs 3rdlargest investment bank) bought by Bank ofAmerica for US$50 B US$1.5 trillion in assets Sep 16-08 American Insurance Group, AIG (USs largest insurer) bailed-outby Fed with US$85 B loan US$1 trillion in assets Largest nationalizations and transfer ofdebt in history 5. Mga Naunang Krisis sa Pinansya 1929 Wall Street Crash GreatDepression 1987 Black Tuesday bailout packageof $500 billion 1997 Asian Crisis 6. Ang Pangingibabaw ng Kapitalsa Pinansya 7. Di maiiwasan angmga krisis ng labisna produksyon sailalim ng KapitalismoBasic ContradictionPribadongpag-angkinSosyalisadongpaggawa 8. Mga Lundo ng Krisis 1870 bunsod ng pagdami ng mga kapitalistangbansa; paghahanap ng mga bagong kolonya/merkado 1911 unang pangkalahatang krisis ng kapitalismobilang imperyalismo; nagresulta sa WW1 1929 ikalawang pangkalahatang krisis ngimperyalismo; nagresulta sa WW2 60s-70s stagflation; wars of national liberation 87-98 financial crashes in the US, Asia, Russia andBrazil 9. Mula pagitan ng 1911 at 1929, lumaki angpagsalig ng monopoly capitalists safinancial markets upang makailag saepekto ng overproduction 10. Securities certificates or electronic bookentries representing financial value, andtraditionally used as a means of raisingnew capital.Debt securities banknotes, bonds,debentures, notes, commercial paper,deposits.Equity securities common stocks 11. FinancializationProduction (industry, agri)FinancialeconomyRealeconomyNew derivatives (ABS, CDO,MBS, hedge funds)Stocks, bonds, mutual fundsmortgages, loansSpeculative/fictitious capital 12. Less than 4 times GDP(1980) Over 9 times GDP (2007) Financial services only5% of US private sectorjobs1980s2000sMassive growth in digital financialeconomy versus real economy 13. Decreasing share of labor,increasing share of corporate profits01111111970 1975 1980 1985 1990 1995 2000 2005YearIndexWages and salaries000000001970 1975 1980 1985 1990 1995 2000 2005YearIndexCorporate profitsShares in national income, 1970-2005Wages & salaries Corporate profitsSource: Center on Budget and PolicyPrioritiesBy 2006:highest since 1950By 2006:smallest shareof income on record 14. Paglikha ng mga bula Likas sa financial capital May sariling buhay labas sareal economy (speculation-driven) May life span tiyak nasasambulat 15. 1990sdot.combust2007sub-primebustPaglikha ng mga bula 16. Ang Kasalukuyang Fin. Crisis 17. Rising house prices fuelling debt-drivenconsumption Cheap housing loans driving demand, increasing houseprices by 80% since 2000 Speculative, self-feeding and no basis in real economy House prices increased faster than housing rents, incomes,interest rates and the economy Disposable income falling Rising house prices and wealth effect collateral for further debt and borrowing encourages continued consumption BUT only while house prices rise 18. 1980s2000sSoaring household debt 19. Securitization of mortgagesSubprime loans (5% interest)Bundled as MBS, CDO, etc.Sold to other banks and investors 20. Ang nangyariUnemployment/falling wagesMortgage payment defaultsForeclosuresHouse prices fallStock values of big banks fallBank collapse, credit crunch 21. The FalloutThe Fallout Various estimates: Minimum US$400 B in mortgage-credit losses (c/o The Economist) will reduce net lending byUS$910 billion US$945 B worldwide (c/o IMF) Initial US$1-2 trillion, w/c is enoughto create a systemic banking crisis(c/o N. Roubini) US$25-30 trillion worldwide (c/o FT) 22. Pagkakataon ang krisis upang lamunin ngiba pang dambuhalang kapitalista ang mgabumabagsak na kumpanya ibayongkonsentrasyon ng kapital At the end of last year, the three lenders that are now thelargest in US bankingBank of American Corp.,JPMorgan Chase & Co. and Citigroup Inc.collectivelyheld 21.4 percent of all US deposits. Now, with thismonths government-backed sales of the banking assetsof Washington Mutual Inc. to JPMorgan and of WachoviaCorp. to Citigroup, the Big Three instantly have acombined 31.3 percent of US deposits... Wall Street Journal (Sept. 30) 23. Impact on the real economyImpact on the real economyin the USin the US An estimated 2.4 million or 1 in every 50households in the US face foreclosure. Savings, health insurance, and retirement funds ofmillions of ordinary Americans who were enticed toinvest in pension funds and assorted financialinstruments will also be wiped out as banks andinvestment houses write-down billions in assets Credit crunch Recession 2008 3rdquarter job losses = 287,142 15 million jobless, 9.5% unemployment Contagion to the rest of the world economy 24. Tugon ng US govt.Tugon ng US govt. Ayudahan ang mga kapitalista sa pinansya Ipapasan sa masa ang bigat ng krisis pribado ang tubo pero sosyalisado ang pagkalugi Repormahin ang kapitalismo, isalba ang sistema: moreregulations, safety nets, etc. Bailout ay magdudulot ng paglaki ng depisito sa badyet atpaglobo ng utang ng gobyernong US, magpapahina sa USdollar at magkakait ng mga pondong dapat mapunta sakagalingan ng mamamayan. Kayat sa halip namasolusyunan ang problema, inilalatag lamang nito ang masmalaking kombulsyon sa sistema. 25. Pandaigdigang Epekto 26. Impact of global financial turmoil US, EU & Japan and the world economy 52% of world GDP: EU (23%), US (22%), Japan(7%) EU links with US 24% of exports to US,15% of imports from US Japan links with US 23% of exports to US,12% of imports from US 27. Impact of global financial turmoil With collapse or crisis of financial institutions: Investors in them lose their money Further credit/finance for economic activity shrinks (dropsin consumer spending/corporate investment) sets economic slowdown in motion US$500 B in global credit-related losses by financialfirms so far eventually over a trillion dollars? (c/oEconomist) US$945 B worldwide (c/o IMF) Initial US$1-2 trillion, w/c is enough to create a systemicbanking crisis (c/o N. Roubini) US$25-30 trillion worldwide (c/o FT) Note: multiply by approx 14.5 to get total credit lost(financial leveraging) 28. The International Labor Organization (ILO)warns that the global economic slowdown in2008 will add at least 5 million workers tothe ranks of the unemployed worldwide,raising the global unemployment rate to 6.1per cent. This is based on a more optimisticscenario of 4.8% growth in global GDP, whichhas been revised downwards by the IMF. Adeeper recession would add millions more tothe 189.9 million unemployed as of 2007. 29. Updates (as of Nov. 2008) Germany and the other EU countries nowofficially in recession.Collapse of German car industryLayoff of 20,000 automobile workers in 2008 30. US unemployment: 10 million as ofNovember 2008 Another half million added within January2009. Very low consumer confidence fallingmarket demand both for imports and localmanufactures 31. Epekto sa Pilipinas 32. Impact sa Pilipinas ng kasalukuyangkrisis pampinansya sa daigdig P2 Trillion wiped out in Philippine Stock Exchange(PSE) since August 2007 Paghigpit sa pautang: lower capital inflows to RP,higher cost of borrowing, interest rates Pagbagsak ng piso: Since the start of the year, thepeso has fallen 12.3 percent against the dollar;tinatayang maaaring bumagsak sa P50= 1US$ Pagtumal ng exports ng kalakal: around 16% ofRP exports direct to US; up to 70% indirectlydependent on US & EU markets (through export ofintermediate goods to TNC subcontractors in China,Taiwan, Korea, ASEAN, etc. for assembly into finalgoods destined for US, EU & Japan) 33. Impact sa Pilipinas ng kasalukuyangkrisis pampinansya sa daigdig Pagtumal ng exports ng serbisyo: 90% of BPO revenuesfrom US market Posibleng (?) pagbagal sa OFW deployment at pagliit nghalaga ng remittances: 33% of overseas pinoys in US; 51%of OF remittances from US Pagtaas ng presyo ng pagkain at petrolyo dahil saispekulasyon sa commodites futures trading. Sa bawat 10%pagtaas sa presyo ng pagkain, 2.3 M Pilipino angbumabagsak below the poverty line. Sa bawat 10% increasesa presyo ng petrolyo, 160THPilipino bagsak sa poverty line Lahat ito ay nangangahulugan ng: lower internal andexternal demand higher unemployment, lowerincomes, lower social spending, higher taxes, etc. in theimmediate future 34. Mga posibleng higit na mapuruhan:Mga posibleng higit na mapuruhan: Manupaktura: 125,000 manggagawa na ang tinanggal sa manupakturamula july 2007-july 2008; 1/3 ng total manufacturing employment sa bansa ay nasaexport-processing zones/ ecozones SMEs: 99.6% of formal sector establishments; 63%of formal sector employment Construction Wholesale & retail trade Transport (dahil sa epekto sa presyo ng imported napetrolyo) Agri (dahil sa presyo ng petroleum-based inputs, i.e.fertilizers at ispekulasyon) BPO 35. Tugon ng gobyernongTugon ng gobyernongArroyo sa PilipinasArroyo sa Pilipinas Denial, business-as-usual Fiscal stimulus dagdag korupsyon,paglaki ng badyet deficit (P100 B sa2008) at utang dagdag na buwis Targeted subsidies pampakalma sa galitng masa 36. Partikular na pananagutan ngPartikular na pananagutan ngrehimeng US-Arroyorehimeng US-Arroyo Pangangayupapa sa US at iba pang dayuhangmonopolyo kapitalista para sa patuloy na suporta nila sakanyang pananatili sa poder (development aid, militaryaid, etc.) Masugid na tagapagpatupad sa mga patakarangneoliberal para sa interes ng dayuhang kapital Fiscal reforms (VAT & other onerous taxes) + automaticdebt servicing Pagpatay sa P125 wage increase bill, kontraktwalisasyon,etc. Sellout ng pambansang soberanya at patrimonya(JPEPA, RP-US FTA, oil & mineral exploration, etc) Charter change not only for GMA pol agenda but also toserve US political & economic agenda War in Mindanao to justify cha-cha & US mil intervention 37. Ano ang ating paninindigan sa harapAno ang ating paninindigan sa harapng kasalukuyang krisis?ng kasalukuyang krisis? Labanan ang pagtatangka ng malalaking lokal atdayuhang kapitalista na ipabalikat sa mga mamamayanang buong bigat ng kasalukuyang krisis na nilikha nila papel ng gobyerno Palakasin ang ating paggigiit para sa pagbasura sa RVAT sa langis, pagtataas sa sahod nang P125 across the board, mas malaking badyet para sa serbisyong panlipunan, moratorium sa pagbabayad ng utang panlabas, at iba pang demokratikong kahilingan ng mga mamamayan. Palitan at panagutin si GMA Pahigpitin ang ating pakikipagkaisa sa mgamamamayan ng ibang bansa na lumalaban sapanggigipit ng imperyalismo. 38. Ang pangmatagalang solusyon saAng pangmatagalang solusyon sapamalagiang krisis sa Pilipinaspamalagiang krisis sa Pilipinas Ibasura ang mga patakarang neoliberal Tunay na reporma sa lupa Pambansang industriyalisasyon SosyalismoSosyalisadong Pag-angkin para saSosyalisadong Paggawa 39. Hindi kusang babagsak ang sistemang kapitalistasa daigdig at ang sistemang malakolonyal-malapyudalsa Pilipinas, sa kadahilanang patuloy na kinukumpuni atitinataguyod ang mga ito ng mga naghaharing-uri gamitang lahat ng kanilang yaman at kapangyarihan,panlilinlang at karahasan upang manatali sila sa poder. Kailangan ang ibayong pagpupunyagi ng lahat ngpinagsasamantalahan at inaapi sa lipunan upang gibainang mga naturang bulok na panlipunang istruktura atpalitan ng isang alternatibong kaayusan kung saan maytunay na kalayaan, demokrasya at hustisyangpanlipunan. 40. Maraming salamat po!