The document discusses the global financial crisis that began in 2008. It provides background on the crisis, including the collapse of major investment banks in the US. It then explains some of the root causes of the crisis, such as the rise of speculative investment and growing household debt. The crisis has had widespread impacts, including bank bailouts, rising unemployment, and falling economic growth in both developed and developing countries like the Philippines. The response from the US government has largely been to bail out financial institutions while ordinary citizens bear the burden. The document criticizes the Arroyo government in the Philippines for implementing neoliberal policies that exacerbate the crisis and calls for united action from workers around the world.

1. Pandaigdigang Krisis sa
Pinansya
Katapusan na nga ba ng
Kapitalismo?
October 2008

2. Discussion Outline
 Ang Financial Crisis at Saklaw Nito
 Ugat ng Financial Crisis: Sistemang Monopolyo
Kapitalismo
 Epekto sa Ekonomya ng Pilipinas at
Manggawang Pilipino
 Tugon ng Manggagawa at Mamamayan ng
Buong Daigdig

3. Worst fin. crisis since the ’70s
 Collapse of 3 out of 5 biggest
investment banks
 Bear Sterns, Lehman
Brothers, Merrill Lynch
 Collapse of world’s largest
insurance firm
 American Insurance Group
(AIG)
 Banking status for bankruptcy
protection
 Goldman Sachs, Morgan
Stanley
 World’s biggest bank collapse
 Washington Mutual

4. What happened in
Wall Street?
 March-08 – Bear Sterns bailed-out by JP Morgan with US$30 B
backing of US Federal Reserve
 Sep 7-08 –
 Fannie Mae & Freddie Mac bailed-out by Fed w/ up to US$100 B
each
 US$1.8 trillion in assets
 Sep 14-08 –
 Lehman Brothers (US’s 4th
largest investment bank) files for
bankruptcy with US$613 B in debt
 Merrill Lynch (US’s 3rd
largest investment bank) bought by Bank of
America for US$50 B
 US$1.5 trillion in assets
 Sep 16-08 –
 American Insurance Group, AIG (US’s largest insurer) bailed-out
by Fed with US$85 B loan
 US$1 trillion in assets
 Largest nationalizations and transfer of
debt in history

5. Mga Naunang Krisis sa Pinansya
 1929 Wall Street Crash  Great
Depression
 1987 “Black Tuesday”  bailout package
of $500 billion
 1997 Asian Crisis

6. Ang Pangingibabaw ng Kapital
sa Pinansya

7.  Di maiiwasan ang
mga krisis ng labis
na produksyon sa
ilalim ng Kapitalismo
Basic Contradiction
Pribadong
pag-angkin
Sosyalisadong
paggawa

8. Mga Lundo ng Krisis
 1870  bunsod ng pagdami ng mga kapitalistang
bansa; paghahanap ng mga bagong kolonya/merkado
 1911 – unang pangkalahatang krisis ng kapitalismo
bilang imperyalismo; nagresulta sa WW1
 1929 – ikalawang pangkalahatang krisis ng
imperyalismo; nagresulta sa WW2
 ’60s-’70s – stagflation; wars of national liberation
 ’87-’98 – financial crashes in the US, Asia, Russia and
Brazil

9.  Mula pagitan ng 1911 at 1929, lumaki ang
pagsalig ng monopoly capitalists sa
financial markets upang makailag sa
epekto ng overproduction

10.  Securities – certificates or electronic book
entries representing financial value, and
traditionally used as a means of raising
new capital.
Debt securities – banknotes, bonds,
debentures, notes, commercial paper,
deposits.
Equity securities – common stocks

11. Financialization
Production (industry, agri)
Financial
economy
Real
economy
New derivatives (ABS, CDO,
MBS, hedge funds)
Stocks, bonds, mutual funds
mortgages, loans
Speculative/
fictitious capital

12.  Less than 4 times GDP
(1980)
 Over 9 times GDP (2007)
 Financial services only
5% of US private sector
jobs
1980s
2000s
Massive growth in digital “financial
economy” versus real economy

13. Decreasing share of labor,
increasing share of corporate profits
0
1
1
1
1
1
1
1970 1975 1980 1985 1990 1995 2000 2005
Year
Index
Wages and salaries
0
0
0
0
0
0
0
0
1970 1975 1980 1985 1990 1995 2000 2005
Year
Index
Corporate profits
Shares in national income, 1970-2005
Wages & salaries Corporate profits
Source: Center on Budget and Policy
Priorities
By 2006:
highest since 1950
By 2006:
smallest share
of income on record

14. Paglikha ng mga “bula”
 Likas sa financial capital
 May “sariling buhay” labas sa
real economy (speculation-
driven)
 May life span  tiyak na
sasambulat

15. 1990s
dot.com
bust
2007
sub-
prime
bust
Paglikha ng mga “bula”

16. Ang Kasalukuyang Fin. Crisis

17.  Rising house prices fuelling debt-driven
consumption
 Cheap housing loans driving demand, increasing house
prices 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. 1980s
2000s
Soaring household debt

19. “Securitization” of mortgages
Subprime loans (5% interest)
Bundled as MBS, CDO, etc.
Sold to other banks and investors

20. Ang nangyari…
Unemployment/falling wages
Mortgage payment defaults
Foreclosures
House prices fall
Stock values of big banks fall
Bank 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 by
US$910 billion
 US$945 B worldwide (c/o IMF)
 Initial US$1-2 trillion, w/c is enough
to create a systemic banking crisis
(c/o N. Roubini)
 US$25-30 trillion worldwide (c/o FT)

22. Pagkakataon ang krisis upang lamunin ng
iba pang dambuhalang kapitalista ang mga
bumabagsak na kumpanya  ibayong
konsentrasyon ng kapital
 “At the end of last year, the three lenders that are now the
largest in US banking—Bank of American Corp.,
JPMorgan Chase & Co. and Citigroup Inc.—collectively
held 21.4 percent of all US deposits. Now, with this
month’s government-backed sales of the banking assets
of Washington Mutual Inc. to JPMorgan and of Wachovia
Corp. to Citigroup, the Big Three instantly have a
combined 31.3 percent of US deposits...”
 Wall Street Journal (Sept. 30)

23. Impact on the real economyImpact on the real economy
in the USin the US
 An estimated 2.4 million or 1 in every 50
households in the US face foreclosure.
 Savings, health insurance, and retirement funds of
millions of ordinary Americans who were enticed to
invest in pension funds and assorted financial
instruments will also be wiped out as banks and
investment houses write-down billions in assets
 Credit crunch  Recession
 2008 3rd
quarter job losses = 287,142
 15 million jobless, 9.5% unemployment
 “Contagion” to the rest of the world economy

24. Tugon ng US gov’t.Tugon ng US gov’t.
 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: more
“regulations”, safety nets, etc.
 Bailout ay magdudulot ng paglaki ng depisito sa badyet at
paglobo ng utang ng gobyernong US, magpapahina sa US
dollar at magkakait ng mga pondong dapat mapunta sa
kagalingan ng mamamayan. Kaya't sa halip na
masolusyunan ang problema, inilalatag lamang nito ang mas
malaking 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 (drops
in consumer spending/corporate investment)
 … sets economic slowdown in motion
 US$500 B in global credit-related losses by financial
firms so far… eventually over a trillion dollars? (c/o
Economist)
 US$945 B worldwide (c/o IMF)
 Initial US$1-2 trillion, w/c is enough to create a systemic
banking 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 in
2008 will add at least 5 million workers to
the ranks of the unemployed worldwide,
raising the global unemployment rate to 6.1
per cent. This is based on a more optimistic
scenario of 4.8% growth in global GDP, which
has been revised downwards by the IMF. A
deeper recession would add millions more to
the 189.9 million unemployed as of 2007.

29. Updates (as of Nov. 2008)
 Germany and the other EU countries now
officially in recession.
Collapse of German car industry
Layoff of 20,000 automobile workers in 2008

30.  US unemployment: 10 million as of
November 2008
 Another half million added within January
2009.
 Very low consumer confidence  falling
market demand both for imports and local
manufactures

31. Epekto sa Pilipinas

32. Impact sa Pilipinas ng kasalukuyang
krisis 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, the
peso has fallen 12.3 percent against the dollar;
tinatayang maaaring bumagsak sa P50= 1US$
 Pagtumal ng exports ng kalakal: around 16% of
RP exports direct to US; up to 70% indirectly
dependent on US & EU markets (through export of
intermediate goods to TNC subcontractors in China,
Taiwan, Korea, ASEAN, etc. for assembly into final
goods destined for US, EU & Japan)

33. Impact sa Pilipinas ng kasalukuyang
krisis pampinansya sa daigdig
 Pagtumal ng exports ng serbisyo: 90% of BPO revenues
from US market
 Posibleng (?) pagbagal sa OFW deployment at pagliit ng
halaga ng remittances: 33% of overseas pinoys in US; 51%
of OF remittances from US
 Pagtaas ng presyo ng pagkain at petrolyo dahil sa
ispekulasyon sa “commodites futures trading”. Sa bawat 10%
pagtaas sa presyo ng pagkain, 2.3 M Pilipino ang
bumabagsak below the poverty line. Sa bawat 10% increase
sa presyo ng petrolyo, 160TH
Pilipino bagsak sa poverty line
 Lahat ito ay nangangahulugan ng: lower internal and
external demand  higher unemployment, lower
incomes, lower social spending, higher taxes, etc. in the
immediate future

34. Mga posibleng higit na mapuruhan:Mga posibleng higit na mapuruhan:
 Manupaktura:
 125,000 manggagawa na ang tinanggal sa manupaktura
mula july 2007-july 2008;
 1/3 ng total manufacturing employment sa bansa ay nasa
export-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 na
petrolyo)
 Agri (dahil sa presyo ng petroleum-based inputs, i.e.
fertilizers at ispekulasyon)
 BPO

35. Tugon ng gobyernongTugon ng gobyernong
Arroyo sa PilipinasArroyo sa Pilipinas
 Denial, business-as-usual
 Fiscal stimulus  dagdag korupsyon,
paglaki ng badyet deficit (P100 B sa
2008) at utang  dagdag na buwis
 “Targeted subsidies” pampakalma sa galit
ng masa

36. Partikular na pananagutan ngPartikular na pananagutan ng
rehimeng US-Arroyorehimeng US-Arroyo
 Pangangayupapa sa US at iba pang dayuhang
monopolyo kapitalista para sa patuloy na suporta nila sa
kanyang pananatili sa poder (“development aid”, military
aid, etc.)
 Masugid na tagapagpatupad sa mga patakarang
neoliberal para sa interes ng dayuhang kapital
 Fiscal reforms (VAT & other onerous taxes) + automatic
debt 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 to
serve 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 harap
ng kasalukuyang krisis?ng kasalukuyang krisis?
 Labanan ang pagtatangka ng malalaking lokal at
dayuhang kapitalista na ipabalikat sa mga mamamayan
ang 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 mga
mamamayan ng ibang bansa na lumalaban sa
panggigipit ng imperyalismo.

38. Ang pangmatagalang solusyon saAng pangmatagalang solusyon sa
pamalagiang krisis sa Pilipinaspamalagiang krisis sa Pilipinas
 Ibasura ang mga patakarang neoliberal
 Tunay na reporma sa lupa
 Pambansang industriyalisasyon
 Sosyalismo
Sosyalisadong Pag-angkin para sa
Sosyalisadong Paggawa

39.  Hindi kusang babagsak ang sistemang kapitalista
sa daigdig at ang sistemang malakolonyal-malapyudal
sa Pilipinas, sa kadahilanang patuloy na kinukumpuni at
itinataguyod ang mga ito ng mga naghaharing-uri gamit
ang lahat ng kanilang yaman at kapangyarihan,
panlilinlang at karahasan upang manatali sila sa poder.
 Kailangan ang ibayong pagpupunyagi ng lahat ng
pinagsasamantalahan at inaapi sa lipunan upang gibain
ang mga naturang bulok na panlipunang istruktura at
palitan ng isang alternatibong kaayusan kung saan may
tunay na kalayaan, demokrasya at hustisyang
panlipunan.

40. Maraming salamat po!