2008 January Merrill Lynch repays Sringfiled MA municipality after complaint that it sold CD Os? on the understanding they were safe assets, and after it fell from $13.9m to 1.2 23rd January Boston USA. Neighbours and supporters rally in front of Melanie Griffths-Evans house to block a foreclosure eviction by US Bank and Owen Financial February
•Oil companies announce record profits. Shell, $27bn, a European record. Exxon Mobil? $40bn, the biggest by any company ever. •Estimate of $400bn global banking losses (USA Monetary Policy Forum) 25th February German HSH Nordbank plans to sue UBS claiming “Mis-selling, mismanagement and misrepresentation of risk.”
March March 25th Bear Sterns ‘rescued’ by JP Morgan after it raises its ‘firesale’ price and with US govt. backing. Hard on shareholders but not on bond-holders or counter-parties which, odds-on include Goldman Sachs
April USA Term Auction Facility increased by $50bn and Interest Rate reduced. 2nd April
TREASURY PRPOSAL GIVES WALL STREET WHART IT WANTS (iht) Bank of England eases conditions of its banking support accepting more dodgy collateral than before. 27th April UK REPOSESSIONS SET TO SOAR AS COSTS SPIRAL
Spring 2008 india (wildcat 83/spring 2008: http://www.wildcat-www.de/en/wildcat/83/w83_india_en.htm): preceding dependence on capital importation & software-related exports led to rupee overvaluation, hitting ‘traditional & labour-intensive’ sectors, eg. textiles, tea, other agriculture. autumn 2008: ‘trickling down of credit crunch’; stock market down 50% jan.-mid-oct. 2008, hitting eg. DLF (real estate), Reliance group, Ranbaxy (biotech). oct. stock market loss at $1 trillion, i.e. more or less 2007-8 GDP. [*?subsequent recovery?] losses attributed to selling by ‘foreign institutional investors’, who previously held around 25% of total float. resulting dollar outflow hit foreign exchange reserves, down from $300bn to 258bn July-Nov. ‘panic reaction’ by companies borrowing from banks for conversion into dollar funds led to ‘massive credit squeeze’, immediately transferred downwards to rural micro-credit. capital flight from rupee caused ‘massive devaluation’: [??] from Rs 39.25 ‘early 2008’ to Rs 50.5 Nov. against the dollar. devaluation accompanied by withdrawal of US orders, so no help to eg. textile sector, but worsened situation for India’s main import: oil & ‘related products eg. fertilizer’. Apr.-Jul. fertilizer imports at $4.1bn, against total agricultural exports of $7.3 billion. trade deficit (oil-driven) up from $7bn to 14bn Aug. 2007-2008. trade deficit unlikely to be balanced by exports: down 20% oct. 2008; bulk cargo shipping rates down 50% Aug.; ‘tonnes of’ china-bound iron ore reported ‘stuck in Indian ports’. many of the SE Zs? at centre of conflict now up for sale. ‘trade war with China intensified since oct.2008’.
May Standard & Poor develops a global agribusiness composite index. Return in the year ending in April worked out at MORE THAN 40% 4th May Cairo food price protest followed by arrests May 6th US military planning for a Tigris Woods Golf and Country club inside baghdad’s Green Zone. Marriott Hotels involved. 12th May INVESTMENT BANKS TURN TO AFRICA IN EFFORT TO BOOST FLAGGING PROFITS (The Indie) 25th May International Energy Authority orders an inquiry as to whether the world will run out of oil soon. Oil price $135 a barrel 26th May AGRICULTURAL LAND PRICES OFFER FARMERS A RICH HARVEST (UK headline) 27 May UN FAO holds food summit. Price of rice doubled since January. Price of wheat doubled since May 2007. Soya beans and sugar also show dramatic price rises.
>after some food riots (spring 2008), UN FAO-backed schemes to 'strengthen peasantry & subsistence farming: 'those who drop out of cash crop rat race are supposed to survive on their own small plot of land, backed up by micro-credit & ngo management'. or where 'unable to be tied to own soil', enrolled in labour-intensive rural labour schemes, subject to village council political leaders/'ration shop regime; struggles within NREGS show that rural poor see themselves 'not as individual claimants but waged workers'. iran (http://www.wildcat-www.de/en/wildcat/85/w85_iran_en.htm):
May 2008: Nigerian president Umaru Yar'Adua says it will take until 2015 to generate enough electricity to cover the country through national grid. 40% of population currently covered. Meanwhile crude exports at 2.15m barrels per day, despite 587,000 'lost' to insurgency. 'Commercial & industrial sectors' use private diesel generators. Lack of refining capacity means dependence on fuel imports. smartass blogger says don't bother connecting rural areas to grid, use solar/wind power to 'require villages to develop sustainably' (http://smashthemirror.wordpress.com/2008/05/30/closer-look-at-nigeria/) Aug. 2009: Niger Delta amnesty comes into effect. Sept.: ceasefire expires, extended by Delta militants for one month. Oct.: CNOOC (China) negotiating for $30bn stake in 23 oil blocks; MEND spokesman warns China against 'negotiating with the wrong people before there is justice in the region'. (http://en.afrik.com/article16239.html) Oct. Niger Delta People's Volunteer Force describes just-expired amnesty as 'calculated plot to divert attention from region's underdevelopment & right to self-willpower'. (http://en.afrik.com/article16246.html). MEND also returns to hostilities. Dec. 2009: 'Nigeria: police & vigilante killings out of control' (http://en.afrik.com/article16612.html
June 2nd June UBS and Paramaz countersuing each other over credit default swaps. A FLUSH CITY BROADENS ITS PALETTE In Singapore huge sums being spent on classic French wines 3rd June Police break up protest by parents of children killed in Chinese earthquake. June 7th Oil price hits $139 June 10th Saudis call an OPEC meeting to stem “unjustified” oil price surge. 12th June - SEC proposes rules to prevent conflicts of interest at credit-ratings agencies. -Royal Bank of Scotland raises $23.5bn in rights issue 19th June Official report admits role of biofuel in food crisis. 20th June Arrests of several US bankers and advisers including two big noises from Bear Sterns? 27th June STOCKMARKETS PLUNGE AS TRADERS REACT TO FEARS OF FURTHER SUB-PRIME DAMAGE
July Mid-July US government insures Freddie Mae and Fannie Mac 30th July WTO talks collapse after India and China clash with USA over farm products.
July 2008 http://www.atimes.com/atimes/Global_Economy/JG09Dj02.html: over 'past 18 months' to july 2008, real estate asset crash/'alarming' inflation of 'commodities especially oil & food'. oil up 50% since 2005; rice more than 100% & 'wheat not far behind'; against 'increased demand from china & india' argument, stockpiles 'sufficient' (except east africa): supply/demand inadequate explanation; (economists acknowledge 'speculation' as secondary factor to supply/demand+fuel prices in food inflation); 'commodities incl. food' seen as 'relatively safe investment' due to stable demand compared with eg. houses, computers; imf/world bank deregulation of trade & agriculture allowed market speculation & attendant 'herd mentality' in, leading 'over-inflated food market like mortgage market'; but neither 'underplayed' speculation nor demand (note FLAT per capita consumption in China & India coinciding with middle class increase: therefore DECLINING consumption in remainder of population). consider also: IMF "advice" to 'reduce or eliminate grain reserves', tariff elimination on eu/us food exports, removal of subsidies on fertilizer & 'other agricultural inputs (also IMF/WB); 'since about 1980', mechanisms for government control of food supply removed & replaced by 'national & international private companies' at behest of 'international financial institutions'; but also insufficient to explain recent sharp food inflation: IMF etc policies in place since c.1980, during which time food prices have generally fallen; rising oil, transport & fertilizer prices also contribute to sudden inflation but don't wholly explain it; speculation 'may be main driving factor' in current spike, but 'all was not well before current crisis'. 'since c.1960', transformation of food production from 'local business' with export luxury surplus to 'primarily global business', as 'international trade rules' favour export over local consumption, with disappearance of small farms (across Asia, Latin America, North America & Europe) under agribusiness economies of scale, chemical fertilizer, pesticides, GM Os?. 'knee-jerk' deliberalization of agriculture by 'more than 25 countries & eu' as 'necessary' response but 'not a solution'. (proposed instead: 'deglobalization' of agriculture: national 'food sovereignty, reversal of trade agreements, speculation tax); food crisis as 'convergence of two crises': 'crisis of speculation' & 'crisis of global agriculture' ensuing from IFI/'market fundamentalist' policy >[*'opposite' phenomena from same structural causes, eg. inflation/deflation as identifying characterisitc of (??) perpetual normal crisis?]
July 2008: EU in intensive lobbying over 'Singapore Issues' in Africa, eg. investment protection, competition policy, government procurement. Removed from WTO agenda at Cancun 2003, but now back in form of bilateral 'Economic Partnership Agreements' (EPA). Europe threatens withdrawal of African trade preferences unless markets are 'opened' this way. (http://www.spectrezine.org/Africa/Bond.htm) Interim agreement initialled Nov. 2007. Sept. 2009: some smaller African countries/former SA clients signed up in June (Swaziland, Lesotho, Botswana); South Africa, Namibia, East, Central & West Africa still negotiating See also: www.afrol.com; allAfrica.com. Sep. 2009: European demand for intellectual property clauses in EP As? is 'hidden threat to securing food supplies and agriculural biodiversity' (http://www.africa-eu.org/In-depth/Food-crisis)>korean madagascar land-grab/coup >china-angola oil boom >ghana oil onstream >nigeria: delta amnesty and chinese overture, rejected by delta militant leaders mid-negotiation with government & western oil groups >(looting of nature: gas 'flaring' & non-capture of available energy) >south africa: anti-immigrant riots, public sector/stadium builders strikes, abahlali attack.
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September Estimate of $1.4 trillion banking losses (IMF) 17th September Federal Reserve to lend AIG $85bn in return for 80% of the company 8th September Freddie Mae and Freddy Mac to be temporarily nationalized without the word being used.
September 11 2008 http://www.atimes.com/atimes/Global_Economy/JI11Dj02.html: 'how can both high & low food commodity prices be a problem for the same group of (exporting) countries?': 'small farmers may benefit (from high prices) at the time of year when they sell cash crops, but when own produce is exhausted & they have to buy food, 'hurt like any other consumer'; last major commodities boom late 1970s: average prices of 22 major commodities since then 'deflated against index of developed countries manufactured exports' for 30-year comparison. a few minerals up: oil, iron, copper, phosphates at 59, 96, 103 & 45%. (tin down 54%, aluminium & gold flat). fertilizers 'fastest rise of all commodity groups' (no statistic). 'combined with oil prices, this suggests that food crisis is one of fertilizer & energy-heavy 'intensive' agriculture. crop inflation 'will benefit low-input smallholders more'. 'meanwhile', 12 agricultural prices down significantly (exceptions: bananas up 17%, rubber & tropical logs flat). corn, wheat, rice, soya: down 25, 19, 45, 28%. coffee, cocoa, sugar, cotton down 50%+: TO 37, 35, 44, 43% of previous levels (affecting eg. Ethiopia, Burundi, Cote d'Ivoire, Burkina Faso); price regulation argument: coffee & tin subject to regulation agreements collapsing in 1989 & 1985. among sharpest falls since then. tariff (etc?)-based national stockpiling of high-yielding rice 'over 40 years' in China & 'green revolution' India. commonwealth/eu price support for ex/territorial exports until wto dissolution.
October 2008 'foreign policy in focus'. http://www.fpif.org/fpiftxt/5583 'commodifying nature's last straw' (etc group report title): 'extreme genetic engineering', i.e. extraction of 'high value chemicals, polymers & other molecular building blocks' from sugars in biological feedstocks: 'agricultural crops, grasses, forest residues, plant oils, algae etc') in 'sugar economy' or 'carbohydrate economy'. 'convergence' of funding from 'energy, chemical & agribusiness giants', eg. Du Pont?, BP, Shell, Chevron, Cargill (leading to university-industry deals, eg BP-Berkely $500m), & 'unprecedented alliances between oil, pharma, chemical, agribusiness, automotive & forest products sectors (eg. Du Pont?-Tate & Lyle-Genecor; US Do E?-Cargill-Dow-Du Pont?-Shell-Iogen); main focus on fuel (esp. ethanol, biodiesel), which 'swamps chemical & material markets'; industrial agrofuels as 'single greatest factor' driving food price inflation [>]; 'Nature' says synthetic biology 'might be tailored to marginal lands': Steven Chu cites Latin America & sub-saharan africa. >'single greatest factor': 'a note on rising food prices', donald mitchell, unsaveable pdf linked to fpif article: world bank food price index up 140% Jan. 2002-Feb. 2008; us/eu biofuel production increase as single most important factor, without which 'export bans & speculative activity would not have occurred as they are responses to rising prices, australian droughts would only have reduced global crop exports by 4%'; dollar decline, plus rising energy & fertilizer prices, assessed at 35% out of total 140 2002-(early) 2008 increase, with the rest attributed to biofuel '& related consequences of low grain stocks, large land use shifts, speculative activity & export bans' [*i.e. speculation & capital controls all grouped under heading of ‘biofuel’, making the latter automatically the biggest factor]
>'food crisis & gender' (fpif, oct. 2008) http://www.fpif.org/fpiftxt/5637: 'food prices up 83% in 3 years up to 2008; end of oct. 2008 (i.e. mid-decline), still 60% up; 'failure of entitlement rather than supply', with 'disproportionate imact' on 'global rural south' dependent on 'small farming/selling labour/combination of both'; 'regional isolation within nations' & noninvestment in small farming leading to dependence on food imports for survival; within this, 'disproportionate impact' on 'women & children (esp. girls)' under 'gendering of agrarian societies in terms of property rights, division of labour, direct knowledge of natural resource base & access to & control over productive resources'; 30-60% of households in subsaharan africa 'de facto or legally female headed'; erosion of 'traditional male' sphere of wage/carbohydrate provision (eg diverted into debt sales of cash crops or labour migration) leaves women responsible for this as well as 'traditional female' labour
>Intermittently through most of 2008-2009: farmers in Argentina 'strike' against export taxes imposed during high world market prices & local shortages.
Nigeria: 'decoupling' myth case study (mostly: allAfrica.com). Oct. 2008: Lagos Chamber of Commerce president declares Nigeria immune to global financial crisis, thanks to factors including 'large population', 'vibrant informal sector' 'low credit' economy to the point of being a 'problem', and 'lack of integration into world economy'. World Bank also says Nigeria immune. >also Oct. 2008, another allafrica.com correspondent says 'crisis is here but we may not feel effects yet'. specifies: threat to offshore bank credit & international PPP projects; fall in international donor support; slump in illiquid stock market; reduced remittances; oil price fall. >Oct. & again Dec. 2008: 'financial crisis hits Nigerian cocoa industry'; Dec.: 'Nigeria not immune', wonders new finance minister; Dec. 19: 'Nigerian economy may reel under financial crisis'; June 2009: crisis hits Nigerian real estate; Aug. 2009: 'Nigeria bailout may hit N1 trillion (allafrica.com)
November 24th BAILOUT OF CITIGROUP, WHILE NECESSARY, WAS TOO LENIENT(iht) More capital plus a $306bn ‘bad bank’ guarantee.
November Estimate of $2.8 trillion global bank losses (Bank of England) November 23rd Fed announces $800bn in an effort to ‘unfreeze credit’. November 24th
December Gordon Brown announces that benefit claimants will face lie detector tests and lose benefits for a month if found guilty.
Dec. 2008: state bailout package of only $8.5bn. (compare $580bn in China). ‘there has been criticism’ of deficit spending not on investment but for ‘populist’ farmer loan waivers & agricultural price guarantees. energy import dependence among ‘main variables’: oil=40% of all imports first half 2008; Apr.-Jul $40bn against $72bn total exports WHOLE YEAR 2007-8. Oil-fulled generators back up most of electricity grid. Second half 2008: non-transfer by price-setting state of wholesale oil price fall leads to truckers/oil company workers strikes; local (eg. Assam oil production, Iran-Pakistan gas pipeline project & US nuclear deal politically fraught. >agriculture spending 'neither populism nor investment', but attempt 'to curb explosion of proletarianization' & associated 'welfare spending, mass starvation and/or social unrest among 800 million people in the countryside'. 'pressure from rural south' played out late July 2008: WTO deal blocked by Indian & Chinese insistence on agricultural tariff barriers against 'ag. over-production from global north'; 'little echo in India' of 'global food riots' of Apr. 2008 'confirmed protectionist attitude': rice export ban, 'minimum support price up 20%. but 'global recession shakes up the balance' of 'undeclared protectionism'. state fertilizer subsidy bill 'explodes to c.$24bn in 2008', plus c.$17bn farm loan waivers 2008-9, 'topped-up' since credit crunch 'left a lot of micro-credit banks dry'. P Lus? $10bn for National Rural Employment Guarantee Scheme if fully implemented. total: $48bn against $158bn total state receipts 2007-8 (depleted by loss of tax and customs revenue under 'neoliberal' policy since 1990s). minimum farm price cost additional. Oct. 2008: cotton price expected to fall 40%, with export figures to halve in 2008-9 given 20% overproduction in China & India. Sep. 2008: state minimum support price for cotton increased 40%. >under pressure from rural misery, maximum wage-hours pressure against labour in labour-intensive manufacturing: 'starvation of capital for technological jump' after casualization & low tax/customs policy absorbed. most profitable manufacturing attached to (international or domestic middle-class consumption) export or capital inflows, eg. IT/call centres 70% dependent on US business. escalating trade war with China in second half 2008: price cutting to compensate for demand slump. IT union estimates job losses at 10,000 Sept.-Dec. 2008, 50,000 2009. Satyam scandal 'confirmed state of sector', Jan. 2009. autumn 2008: wave of textile layoffs as orders slump despite rupee fall. internal competition between tech. levels & production scales. Nov. 2008: industry association predicts 700,000 job losses over 'coming months'. Jan. 2009: clothing export body puts job losses of last 6 months at 500,000. steel industry hit by 40-50% world price fall, declining local demand & Chinese lifting of export tax. Nov. 2008: JSW announces 20% production cut; Arcelor Mittal? shuts down two projects worth $20bn and others follow. Mining companies shut down 20 mines & reduce production at 50 others. last quarter car industry sales decline of 20% as domestic middle-class spending stops. mass firing of temp workers. suppliers follow. Newly-formed & confident clusters of temp workers hardest hit: Oct. 2008 Hero Honda wildcat; 'a few days later' motorcycle manufacturers collectively forecast 10% sales drop. Gujarat diamond strike wave Jul. 2008 demanding 20% wage rise; subsequent 60% crisis production drop. Late Dec.: workers 'deliver ultimatum to government': support for those laid off & 20% electricity subsidy. >distribution of central government money & jobs exacerbates tension between single states & 'communities': eg. Oct. 2008 Maharashtra nationalists attack Bihari migrants seeking railway jobs; Nov. West Bengal & Kerala complain at allocation of central tax income and debt relief. >state uses maoist insurgency as pretext for attacks on eg. anti-SEZ action: Nov.-Dec. 2008 successful road blockades & police station encirclements in Lalgarh, West Bengal after such an attack by police/stalinists.
2009 25th January AUDITORS