We had a server outage, and we're rebuilding the site. Some of the site features won't work. Thank you for your patience.
imc indymedia

Los Angeles Indymedia : Activist News

white themeblack themered themetheme help
About Us Contact Us Calendar Publish RSS
latest news
best of news




A-Infos Radio

Indymedia On Air

Dope-X-Resistance-LA List


IMC Network:

Original Cities

www.indymedia.org africa: ambazonia canarias estrecho / madiaq kenya nigeria south africa canada: hamilton london, ontario maritimes montreal ontario ottawa quebec thunder bay vancouver victoria windsor winnipeg east asia: burma jakarta japan korea manila qc europe: abruzzo alacant andorra antwerpen armenia athens austria barcelona belarus belgium belgrade bristol brussels bulgaria calabria croatia cyprus emilia-romagna estrecho / madiaq euskal herria galiza germany grenoble hungary ireland istanbul italy la plana liege liguria lille linksunten lombardia london madrid malta marseille nantes napoli netherlands nice northern england norway oost-vlaanderen paris/Île-de-france patras piemonte poland portugal roma romania russia saint-petersburg scotland sverige switzerland thessaloniki torun toscana toulouse ukraine united kingdom valencia latin america: argentina bolivia chiapas chile chile sur cmi brasil colombia ecuador mexico peru puerto rico qollasuyu rosario santiago tijuana uruguay valparaiso venezuela venezuela oceania: adelaide aotearoa brisbane burma darwin jakarta manila melbourne perth qc sydney south asia: india mumbai united states: arizona arkansas asheville atlanta austin baltimore big muddy binghamton boston buffalo charlottesville chicago cleveland colorado columbus dc hawaii houston hudson mohawk kansas city la madison maine miami michigan milwaukee minneapolis/st. paul new hampshire new jersey new mexico new orleans north carolina north texas nyc oklahoma philadelphia pittsburgh portland richmond rochester rogue valley saint louis san diego san francisco san francisco bay area santa barbara santa cruz, ca sarasota seattle tampa bay tennessee urbana-champaign vermont western mass worcester west asia: armenia beirut israel palestine process: fbi/legal updates mailing lists process & imc docs tech volunteer projects: print radio satellite tv video regions: oceania united states topics: biotech

Surviving Cities

www.indymedia.org africa: canada: quebec east asia: japan europe: athens barcelona belgium bristol brussels cyprus germany grenoble ireland istanbul lille linksunten nantes netherlands norway portugal united kingdom latin america: argentina cmi brasil rosario oceania: aotearoa united states: austin big muddy binghamton boston chicago columbus la michigan nyc portland rochester saint louis san diego san francisco bay area santa cruz, ca tennessee urbana-champaign worcester west asia: palestine process: fbi/legal updates process & imc docs projects: radio satellite tv
printable version - js reader version - view hidden posts - tags and related articles

Submissiveness Toward the Finance Markets

by Gustav Horn Saturday, Oct. 06, 2007 at 7:33 PM

Finance market transactions must be made more expensive. Finance market critics warn of a casino capitalism. Are businesses only objects of speculation for global invewstment capital?

Submissiveness Toward Finance Markets
author: Gustav Horn e-mail: mbatko@lycos.com
Finance market transactions must be made more expensive. Finance market critics warn of a casino capitalism. Are businesses only objects of speculation for global investment capital?

Economist Gustav Horn on the increased speculation crises, deficient controls and consequences for workers

[This interview published in: Berliner Zeitung, 9/29/2007 is translated from the German on the World Wide Web.]

Prof. Horn, we had the Asian crisis, the Russian- and Brazilian crises and the collapse of the LTCM hedge fund. Then the Internet bubble burst. Does a global credit crunch threaten starting from the US mortgage crisis?

Yes, we are now experiencing this. The importance of the finance markets has increased as well as the number of products sold there, especially the number of non-transparent products. With these products, investors admit at the end the profits were not as high as expected. Then massive losses, herd conduct and crises follow.

Finance market turbulences seem to increasingly threaten the economy.

Crises become more frequent and more significant. If the finance market were only a peripheral phenomenon of economics, turbulences could be ignored. But the global capital market finances global economic activity. Thus we have a global problem.

According to the textbook, financial enterprises are service providers. They should provide credit to businesses and households.

The financial sphere has made itself independent. Today concrete economic investments are not the only financed enterprises. Today independent financial products enable profits to be realized. Inestimable risks are hidd3en in these products. Still there are there.

New powerful actors like hedge funds and Private Equity companies are underway on the markets. The value of global speculative securities - "derivatives" - is ten times the global economic output. Can this mass of speculative capital be controlled?

Capital streams can be influenced but not really controlled. At the moment, we large3ly refuse an attempted governance or control. For a long while, a policy of submissiveness prevailed that renounced on regulation. We are now paying the price for that.

Still there are finance- and stock exchange monitoring investment guidelines and rules for personal capital resources.

While rules exist, they are certainly not tight enough regarding the risks of individual financial products. The current crisis shows that banks cannot rightly assess the risks.

What must be done?

To stabilize the finance markets, we need regulations that make the products transparent. Every customer and every bank should know the risks that are involved. The finance monitoring must test new products and estimate the risk. Finance market transactions must be made more expensive. For example, a stock market sales tax is urgently necessary. This already exists in many countries. If one would have to pay a price for a stock market transaction, the incentive to gain more information about the products would be strengthened.

Can crises be prevented?

No, only contained.

Finance market critics warn of a casino capitalism given the inflated finance sphere. Are businesses only objects of speculation for global investment capital?

I would not go that far. However the finance markets are certainly powerful. Businesses are increasingly forced to satisfy the finance markets - the investors. Every business manager must grapple with analysts today and submit to the desires of the capital markets.

This pressure raises the profitability of businesses.

However working conditions deteriorate. Less and less business profits land in the hands of employees. We have falling wage rates worldwide. Conversely, more and more profits land with the finance markets and their power over firms grows.

How should the unions react?

Unions must build their counter-power. This counter-power consists in a regulation of the markets. This regulation must be transnational.

Germany's initiative to regulate hedge funds has met with little approval in the US and Great Britain. These countries are in competition for global investment capital. How can an accord be reached between these states?

Still there is a worldwide interest in persons working in businesses - the majority of people - whose life and working conditions are not destabilized by the finance markets. The current crisis shows the dangers of unregulated markets. In the US and Great Britain, people suffer under this crisis.

What dangers do you see as a consequence of the current credit crisis?

At present the situation is still obscure. The banks will provide information at the end of the month. Some banks - like Deutsche Bank - admit mistakes and quantify their risks. This process will intensify. How intensely the threatening or real losses of banks will influence their awarding of credits is the crucial question. Will they strongly raise the interest rates and confer fewer credits so the investment process comes to a standstill? That would be severe.

homepage: http://www.mbtranslations.com
address: http://www.corpwatch.org
Report this post as:
Share on: Twitter, Facebook, Google+

add your comments

© 2000-2018 Los Angeles Independent Media Center. Unless otherwise stated by the author, all content is free for non-commercial reuse, reprint, and rebroadcast, on the net and elsewhere. Opinions are those of the contributors and are not necessarily endorsed by the Los Angeles Independent Media Center. Running sf-active v0.9.4 Disclaimer | Privacy