brinkmanship (29.10.08 update 22.11.09)

"I can calculate the movement of the stars, but not the madness of man."
Sir Isaac Newton, 1643-1727, commenting on the South Sea bubble of 1720

"I believe that banking institutions are more dangerous to our liberties than standing armies."
Thomas Jefferson, US President; 1743 - 1826, as quoted by Tanya Cariina Hsu

“These capitalists generally act harmoniously and in concert to fleece the people,
and now that they have got into a quarrel with themselves,
we are called upon to appropriate the people’s money to settle the quarrel.”
Abraham Lincoln, speech to Illinois legislature, January 1837, as quoted by Ellen Brown

Nothing new under the sun: Rudyard Kipling's poem, The Gods of the Market, 1918

Charles Lindbergh Sr. called the Federal Reserve Act “the worst legislative crime of the ages.”
Ellen Brown quotes him as warning prophetically:
“[The Federal Reserve Board] can cause the pendulum of a rising and falling market
to swing gently back and forth by slight changes in the discount rate,
or cause violent fluctuations by greater rate variation,
and in either case it will possess inside information
as to financial conditions and advance knowledge of the coming change, either up or down.
This is the strangest, most dangerous advantage ever placed in the hands
of a special privilege class by any Government that ever existed. . . .
The financial system has been turned over to . . . a purely profiteering group.
The system is private, conducted for the sole purpose of obtaining the greatest possible profits
from the use of other people’s money.

And in 1934, in the throes of the Great Depression,
Representative Louis McFadden would go further, stating on the Congressional record:
“Some people think that the Federal Reserve Banks are United States Government institutions.
They are private monopolies which prey upon the people of these United States for the benefit of themselves
and their foreign customers; foreign and domestic speculators and swindlers; and rich and predatory money lenders.
In that dark crew of financial pirates
there are those who would cut a man’s throat to get a dollar out of his pocket;
there are those who send money into states to buy votes to control our legislatures;
there are those who maintain international propaganda for the purpose of deceiving us
into granting of new concessions which will permit them to cover up their past misdeeds
and set again in motion their gigantic train of crime.
These twelve private credit monopolies [Federal Reserve Bank branches]
were deceitfully and disloyally foisted upon this Country by the bankers who came here from Europe
and repaid us our hospitality by undermining our American institutions.”

Private, national & common wealth in the post-socialism/capitalism era

Bewildered by what's been happening, both nationally and globally, in the wake of the fall of the Berlin Wall?
I.e. where the unwittingly weakened nation-state - formerly a bulwark against plain-levelling & globalization -
no longer tempers the social, economic & other pitfalls foreseen by Marx, Gramsci, Minsky, McCulley,etc.
Where - as the Laffer & Rider Curves illustrate in the tax & the social fields - excessive poor/rich gradients
upset the social fabric, wash away fertility factors with uncontrolled erosive powers & contribute to famine.
Where indeed, as Patrick Martin pointed out, monopolistic capitalism and the associated reckless greed
are no longer kept in check by Adam Smith' invisible hand, i.e. by the balance of contradictory interests.
And where the capacity for self-correction is increasingly inhibited by loss of freedom, mooring & orientation
which led to market frenzies & false alpha birds feeding on hype & bubbles, reminiscent of the Roaring 20s.
IMF & FATF estimate black funds (drugs, tax evasion etc) to be 2-5% of world's GDP (2006: $960-2400bn).
An IMF Report indicates these funds to be increasingly chased under anti-terrorism & ever flimsier pretexts.
Courtesy by the IV Reich's Secret Service, the world has indeed been made hostage of ill-considered rules
which impede more legitimate business than crime. For big time money laundering, the US Treasury set the
standard in 2001 with its 31% confiscatory backup withholding tax on unidentified investors in US securities,
turning foreign bankers from trustees of clients into IRS agents (qualified intermediaries) subject to US laws.
Private equity & hedge funds thus found a government-sponsored access to black funds, while the latters'
entry into subprime markets was also eased by the Internet. Results: predatory lending & systemic risks.
Society's organization needs re-thinking with Plato, G.Duttweiler, M,Yunus, J.M.Arizmendiarrieta etc.
For man's evolution may only be stressed by technological leaps but not accelerated beyond natural limits.
Return on investment rates above productivity gains/organic growth are not sustainable, predatory & usuric.
If driven by managers, lawyers & funds on the back of other stakeholders, M&As are thus Ponzi schemes
where shareholder value adepts can maraud with stacked Monopoly cards, helped by micro-economic laws.
Like compulsory social insurance systems whose doom is delayed or obscured only by inflation, war, etc.
And where the cunniest operators are state-supported by myopic magistrates hood-winked into fiscal deals.
Gary J. Aguirre's US Senate testimony details fraud & market mechanics which were at work before 1929,
e.g. Ponzi structures, unregulated pools of money, siphoningfrom unsuspecting mutual fund investors, and
abuse-prone market dominance: hedge funds' $1.5 trillion drive half of the $28 trillion NYSE's daily trading.
Tongue-in-cheek, Warren Buffet famously opined: "derivatives are financial weapons of mass destruction";
yet, under increasing performance & compliance pressures, some bankers still see a future in fee hunting.
Society wised up against churning of accounts by undelicate trustees, but not yet against macro-parasitism
which feasts on ignorance, sucks & devours a firm's life-preserving substance, & weakens society's pillars.
Which turns economic rat races into societal tailspins with early burn-outs & senior citizens being wasted,
& instills values causing youth to be educated out of sync, resulting in drug, violence & €1000 generations.
With profit-driven quarterly thinking & cost-cuttings also eroding due infrastructuremaintenance & renewal,
& democracy's promises ridiculed by Fatf, EU & UN bureaucratic lawmaking as if Berlin Wall fell eastwards.
So why not thinking things over & “Revisiting Das Kapital while some dance on the Titanic”? Iconoclast

Der 3. Oktober 1991 war für die Schweizer Bankenwelt im Kleinen, was zehn Jahre später das Swissair-Grounding für das ganze Land im Grossen war. Die Bilder mit verzweifelten Sparern, die vor den geschlossenen Schaltern der Spar- und Leihkasse Thun (SLT) um ihre Einlagen bangten, gingen um die ganze Welt, der Imageschaden war beträchtlich.

Kollaps nach 125-Jahr-Feier
Nur wenige Monate vor dem Kollaps hatten die SLT-Verantwortlichen noch stolz ihr 125-Jahr-Jubiläum gefeiert und betont, dass man als zweitgrösste Bank des Berner Oberlandes auf Qualität setze und dank einer guten Abschreibungspolitik über einen sauberen Tisch verfüge. Keine fünf Monate später musste die Eidgenössische Bankenkommission (EBK) das Institut schliessen.
Unbegreiflich aus heutiger Sicht ist, dass keine der angefragten Grossbanken die nur 70 Personen beschäftigende SLT übernehmen wollte. Die Bank sei zu sehr heruntergewirtschaftet, liessen die Grossbanken nach kurzer Prüfung verlauten. Der Imageschaden, der der ganzen Schweizer Bankenwelt aus dem Zusammenbruch der kleinen Regionalbank erwuchs, stand in keinem Verhältnis zu den finanziellen Mitteln, die bei einer Übernahme des maroden Instituts hätten eingesetzt werden müssen.

Immobilienkrise führte zum Bankencrash
Der Kollaps der SLT muss im Zusammenhang mit der damaligen Immobilienkrise gesehen werden. Auch die SLT war bei der Belehnung von Immobilien ein allzu grosses Risiko eingegangen. Die Folge: für die hohen Wertberichtigungen reichten die Reserven nicht mehr aus. Zudem zeigten sich bei einer ersten Untersuchung erschreckende Organisationsmängel.
Am 18. Oktober 1991 setzte die EBK eine Liquidatorin ein und verfügte den endgültigen Bewilligungsentzug. Die zumeist aus der Region Thun stammenden Spar- und Lohnkontogläubiger mussten sich noch bis Januar 1993 gedulden. Die letzte Auszahlung an die rund 6300 Gläubiger der 5. Klasse erfolgte erst im Dezember 2005. Diese erhielten insgesamt 60,7% ihrer ursprünglichen Guthaben bei der Bank zurück. Insgesamt wurde allen Gläubigern 899 Mio. Fr. zurückbezahlt. Schulden von 223 Mio. Fr. konnten dagegen nicht bedient werden.

Gesundungsprozess
Das Fiasko von Thun sorgte trotz weiteren dramatischen Vorkommnissen bei Regional- und Kantonalbanken auf mehreren Ebenen für einen Gesundungsprozess in der Branche. So wurden im Interesse des Gläubigerschutzes die Vorschriften zur Rechnungslegung ausgebaut, die Eigenmittelvorschriften verschärft sowie die Einflussmöglichkeiten der EBK auf die Revisionsstellen verbessert.
Auch der Markt reagierte rasch auf die Regionalbankenkrise. Innert zehn Jahren reduzierte sich die Zahl der Regionalbanken von 204 auf 103 Institute im Jahr 2000. 53 der heute noch 83 existierenden Regionalbanken sind unter dem Dach der im September 1994 gegründeten RBA-Holding zusammengeschlossen.

The Savings and Loan Bank in Thun (SLT) was forced to close down in 1991 to the consternation of the
Swiss banking world. Its closure led to major changes in the financial landscape. Nearly SFr900 million ($685 million) has been returned to creditors but a further SFr233 million will not be paid out, said the liquidators.
The bankruptcy affected some 5,000 small creditors. Large creditors included the Swiss Bankers Association. The liquidators said that a number of those owed money could not be reached to receive a settlement. They added that unclaimed money would eventually be transferred to the town of Thun as well as to the local authorities in Spiez and Saanen, which were left to deal with a number of hardship cases caused by the bank's collapse.

Sea change
    The Swiss Federal Banking Commission's decision to close SLT branches and cash machines on October 3, 1991 sent a shudder through the banking sector. It led to a new law on bank insolvency and increased depositor protection. The move also speeded up restructuring of regional banking.
    The sector's umbrella organisation put together a new concept with the motto "autonomous in the front, cooperation in the back office". It founded a new association called RBA-Holding, which was to oversee the restructuring efforts of member
banks. "The regional banks could remedy their structural weakness with the help of the umbrella organisation,"
Professor Beat Bernet of St Gallen University said.
     According to analysts, thanks to this new way of doing business, the banks were able to weather the storm. Hans Geiger, a professor at Zurich University, called the concept a "good achievement". "The banks did their homework," he added.

Less drama
    Bernet stressed that one could never rule out the collapse of a bank. However, should such an event take place today, "the consequences for the customers would be less dramatic".
     One change in the law after the collapse of the Thun bank was that deposits up to SFr5,000 would be paid out immediately in the event of a bank's liquidation. Also the culture of risk management had developed since the 1990s.
     The Banking Commission has increased its supervisory role, according to Bernet. "Today the Commission without a doubt employs a much stricter regime with the small banks," he said.

The idea of Western decline is hardly a new one. In the aftermath of the First World War, a prematurely retired German schoolteacher named Oswald Spengler published the first volume of one of the most influential books of the 20th century, Der Untergang des Abendlandes, usually translated as The Decline of the West. These days, however, few people bother with Spengler; his prose is too turgid, his debt to the philosopher Friedrich Nietzsche too large, his influence on the Nazis (for whom he voted but against whom he later turned) too obvious. And no one takes seriously his idiosyncratic theory that civilizations, like the weather, pass through seasons. In any case, events since 1945 have tended to discredit Spengler’s central idea of a Western downfall. It has seemed much more convincing—and perhaps also more gratifying—to portray the history of the 20th century as part of a protracted Occidental ascendancy. “Much of the last three centuries,” wrote the late British historian J. M. Roberts in his book Triumph of the West, published in 1985, “is the story of a triumph of the outright power of the West.” But not only a triumph of Western power, he argued—above all, the triumph of Western civilization.

Just four years later, the 20th century appeared to culminate in a comprehensive Western victory, with the breakup of the Soviet empire in Eastern Europe and the collapse of the Soviet Union itself. Famously, on the very eve of those events, Francis Fukuyama, professor at Johns Hopkins University, was moved to proclaim “the end of history” and the victory of the Western model of liberal and democratic capitalism. Far from suffering its downfall in the 20th century, as Spengler had anticipated, the West appeared to attain its historic zenith. Neoconservatives in the United States, intoxicated by their country’s unrivaled status as a “hyperpower” and its achievement of “full-spectrum dominance” in warfare, wondered only how American primacy could be perpetuated for another “American century.”

Yet in many ways this inversion of Spengler is a fundamental misreading of the trajectory of the last hundred years. Far from being a time of Western ascendancy, the past century has in reality witnessed something more like a re-orientation of the world—albeit only a partial re-orientation—and the relative decline of the West.

In 1900 the West really did rule the world. From the Bosporus to the Bering Strait, from Siberia to Ceylon, nearly all of what was then known as the Orient was under some form of Western imperial rule. The British had long ruled India, the Dutch the East Indies, and the French Indochina; the Americans had just seized the Philippines; the Russians aspired to control Manchuria. All the imperial powers had established parasitical outposts in China. The East, in short, had been subjugated, even if that process involved far more complex negotiations and compromises between rulers and ruled than used to be acknowledged.

Western hegemony was one of the great asymmetries of world history. Taken together, the metropoles of all the Western empires—the American, Belgian, British, Dutch, French, German, Italian, Portuguese, and Spanish—accounted for 7 percent of the world’s land surface and just 18 percent of its population. Their possessions, however, amounted to 37 percent of global territory and 28 percent of mankind. And if we regard the Russian empire as effectively another European empire extending into Asia, the total share of these Western empires rises to more than half the world’s area and population. This was a political globalization unseen before or since.

What enabled the minority in the West to rule the majority in the East in 1900 was not so much scientific knowledge in its own right as its systematic application to both production and destruction. By contrast, the empires of the East, from the Ottoman to the Qing, failed disastrously to modernize themselves. Their economies remained trapped in subsistence agriculture while the West forged ahead, colonizing and industrializing, devouring sugar and burning coal. Their tax systems were inefficient, forcing Oriental rulers to borrow from Western capital bankers. Eastern armies remained long on pageantry and short on firepower, while the West could deploy well-drilled troops equipped with machine guns and heavy artillery. Eastern navies stood no chance against the Western combination of steam and steel.

Nothing symbolized better the humiliation of the East than the Western military intervention to suppress the Boxer Rebellion, in China, in 1900. The rebels, who had menaced Western diplomats and missionaries, relied on martial arts and magic. Having wiped them out, the Western expeditionary force staged a “grand march” through Beijing’s Forbidden City and then undertook punitive raids deep into Shanxi Province, Inner Mongolia, and Manchuria.

Just a few years later, however, the East began to re-assert itself. Japan’s defeat of Russia on land and at sea in 1904–5 marked a turning point in world history. From that point on, the balance of geopolitical power began to turn, slowly and painfully, back toward the more populous part of the world. It is only when the extent of Western dominance in 1900 is appreciated that the true narrative arc of the 20th century reveals itself. This was not “the triumph of the West,” but rather the crisis of the European empires, the ultimate result of which was the revival of the East—beginning in Japan—and the relative decline of the West.

This has not been a decline in the sense that Spengler envisaged: a kind of corrosive metropolitan ennui. Rather, it has been an unexpected but inexorable military decline. It has been a scarcely perceptible economic decline. It has been a subtle but unmistakable cultural decline. Above all, it has been a creeping demographic decline. In short, it has been a decline in precisely the sense that Gibbon understood the decline of Rome’s empire.

According to Gibbon, Rome fell through a combination of external overreach, internal corruption, religious transformation, and barbarian invasion. That the United States—and, perhaps even more, the European Union—might have something to learn from his account is too seldom acknowledged, perhaps because Americans and Europeans like to pretend that their polities today are something more exalted than empires. But suppose for a moment (as the Georgetown University historian Charles Kupchan has suggested in The End of the American Era) that Washington really is the Rome of our time, while Brussels, the headquarters of the European Union, is Byzantium, the city transformed in the fourth century into the second imperial capital, Constantinople. Like the later Roman Empire, the West today has its Western and Eastern halves, though they are separated by the Atlantic rather than the Adriatic. And that is not the only thing we have in common with our Roman predecessors of a millennium and a half ago.

II. The Romans … had acquired the virtues of war and government; by the vigorous exertion of those virtues … they had obtained, in the course of the three succeeding centuries, an absolute empire over many countries.… The limits of the Roman empire still extended from the Western Ocean to the Tigris … but the animating health and vigour were fled.… The barbarians … soon discovered the decline of the Roman empire. —Gibbon, Chapter VII.

There is a well-established American tradition, perhaps best expressed by Gore Vidal in The Decline and Fall of the American Empire, of worrying that the United States might go the way of Rome. But the perennial liberal fear is of the early Roman predicament more than the late one. It is the fear that the republican institutions of the United States—above all, its hallowed Constitution, based on the careful separation of powers—could be corrupted by the ambitions of an imperial presidency. Every time a commander in chief attempts to increase the power of the executive branch, pleading wartime exigency, there is a predictable chorus of “The Republic is in danger.” We have heard that chorus most recently with respect to the status of prisoners detained without trial at Guantánamo Bay and the use of torture in the interrogation of suspected insurgents in Iraq.

Gibbon could scarcely ignore the question of the Roman republic’s decay. Indeed, there is an important passage in The Decline and Fall that specifically deals with the revival of torture as a tool of tyranny. Few generations of Englishmen were more sensitive than Gibbon’s to the charge that their own ideals of liberty were being subverted by the temptations of empire. The year when his first volume appeared was also the year the American colonies used precisely that charge to justify their own bid for independence.

Yet Gibbon’s real interest lay elsewhere, with the period of Roman decline long after republican virtue had yielded to imperial vice. The Decline and Fall is not concerned with the fall of the republic. It is a story that properly begins with the first signs of imperial overstretch. Until the time of the Emperor Julian (A.D. 331–63), Rome could still confidently send its legions as far as the river Tigris. Yet Julian’s invasion of Mesopotamia (present-day Iraq, but then under Persian rule) proved to be his undoing. According to Gibbon, he had resolved, “by the final conquest of Persia, to chastise the haughty nation which had so long resisted and insulted the majesty of Rome.” Although initially victorious at Ctesiphon (approximately 20 miles southeast of modern Baghdad), Julian was forced by his enemy’s scorched-earth policy to retreat back to Roman territory. “As soon as the flames had subsided which interrupted [his] march,” Gibbon relates, “he beheld the melancholy face of a smoking and naked desert.” The Persians harried his famished legions as they withdrew. In one skirmish, Julian himself was fatally wounded.

What had gone wrong? The answer sheds revealing light on some of the problems the United States currently faces in the same troubled region. A recurrent theme of Gibbon’s work is that the Romans gradually lost “the animating health and vigour” which had made them militarily invincible in the glory days of Julian’s predecessor Trajan. They had lost their discipline. They started complaining about the weight of their armor. In a word, they had gone soft. At the same time, like most armies, their fighting effectiveness diminished the farther they were from home.

Most of us take it for granted that the United States Army is the best in the world. It might be more accurate to say that it is the best equipped and the best fed. More doubtful is how well it is configured to win a protracted low-intensity conflict in a country such as Iraq. One sign of the times that might have amused Gibbon has been the recent relaxation of conditions for recruits undergoing basic training. (A friend of mine who was in the army snorted with derision on hearing that trainees are now allowed eight and a half hours of sleep a night.) Another symptom of military malaise has been the heavy reliance of the Defense Department on National Guard and reserve troops, who have at times accounted for about half of the U.S. contingent deployed in Iraq.

The real problem, however, is a simple matter of numbers. To put it bluntly, the United States has a chronic manpower deficit, which means it cannot put enough boots on the ground to maintain law and order in conquered territory. This is not because it lacks young men; it has at least seven times as many as Iraq. It is that it chooses, for a variety of reasons, to employ only a tiny proportion of its population (half of 1 percent) in its armed forces, and to deploy only a fraction of these in overseas conflict zones.

In 1920, to illustrate the difficulty, when British forces quelled a major insurgency in Iraq, they numbered around 135,000. Coincidentally, that is very close to the number of American military personnel currently in that country. The trouble is that the population of Iraq was just over 3 million in 1920, whereas today it is around 26 million. Thus the ratio of Iraqis to foreign forces in 1920 was, at most, 23 to 1. Today it is around 210 to 1. To arrive at a ratio of 23 to 1, roughly one million American troops would be needed. Reinforcements on that scale are, needless to say, inconceivable.

This is the reality of what Michael Ignatieff, the Canadian Liberal politician and scholar, has called “empire lite” in his book of that name. In theory, the American military is a lean and mean fighting machine. In practice, however, downsizing has left it with too few combat soldiers to make a success of imperial policing—a labor-intensive task that renders redundant much of its high-tech hardware.

III. The tranquil and prosperous state of the empire was warmly felt, and honestly confessed, by the provincials as well as Romans.… It was scarcely possible that the eyes of contemporaries should discover in the public felicity the latent causes of decay and corruption. —Gibbon, Chapter II.

You are still not convinced. So, you say, the war in Iraq is not going well. But what about the bigger picture? How can the West possibly be regarded as being in decline when it is so economically dominant in the world? Today the combined output of the six biggest Western economies—Canada, France, Germany, Italy, the United Kingdom, and the United States—exceeds half of total global output. Gross domestic product (G.D.P.) per capita in the United States is more than 30 times higher than it is in the economies of East Asia and the Pacific.

Yet the difference between the West and the Rest is much narrower than it once was. As recently as 1968, American G.D.P. per capita was 127 times higher than that of East Asia. By this measure alone, the gap between West and East has narrowed dramatically in our time. And it will continue to narrow. The International Monetary Fund estimates that the Chinese economy is growing at a rate roughly three times that of the United States. According to Goldman Sachs, China’s G.D.P. will overtake Britain’s this year. By 2041 it is likely to be the biggest economy in the world.

At the same time, the Western economies have vulnerabilities that have been largely obscured by the debt-financed boom of the past five years. America’s gross federal debt now exceeds $8.5 trillion, and if the Congressional Budget Office’s outlook turns out to be correct, we are just a decade away from a $12.8 trillion debt—more than double what President Bush inherited from his predecessor. Moreover, the officially stated borrowings of the federal government are only a small part of the U.S. debt problem. Ordinary American households, too, have gone on a borrowing spree of unprecedented magnitude. U.S. household credit-market debt has risen from just above 45 percent of G.D.P. in the early 1980s to more than 70 percent in recent years. The remarkable resilience of American consumer spending in the past 15 years has been based partly on a collapse in the personal savings rate from around 7.5 percent of income to below zero.

For demographic reasons, Americans need to be saving much more than this. According to the United Nations’ intermediate projections, male life expectancy in the United States will rise from 75 to 80 between now and 2050. The share of the American population that is aged 65 or over will rise from 12 percent to nearly 21 percent. By 2050 the elderly-dependency ratio (the ratio of the population aged 65 years or over to the population aged 15–64) could double. Only a minority of Americans have made adequate private provision for their retirement. That implies that most new retirees in the years ahead will depend to some extent on Social Security, Medicare, and Medicaid. Today, the average retiree receives benefits totaling $21,000 a year from these programs. Multiply that by 37 million (the current number of elderly Americans) and you can see why these programs already consume 42 percent of federal outlays.

All this implies that the federal government has much larger unfunded liabilities than official data imply. If you compare the current value of all projected future government expenditures—including debt-service payments—with the current value of all projected future government receipts, the gap is about $66 trillion, according to calculations by economists Jagadeesh Gokhale, of the Cato Institute, and Kent Smetters, professor at the Wharton School.

Americans, however, are not just borrowing from one another and, in effect, from the next generation. They are also, to a vast extent, borrowing from foreigners. In all but two years since 1992, the gap between the amount of goods and services the United States exports and the amount it imports has grown wider. This year, the current account deficit—which is largely a trade deficit—could rise as high as 7 percent of G.D.P., or nearly double its peak in the mid-1980s. The result is a remarkable accumulation of foreign debt. Estimates of the net international investment position of the United States—the difference between the overseas assets owned by Americans and the American assets owned by foreigners—have declined from a modest positive balance of 8 percent of G.D.P. in the mid-1980s to a huge net liability of minus 22 percent today. In other words, foreigners are accumulating large claims on the future output of the United States. Around 20 percent of corporate bonds are now in foreign hands, and nearly 10 percent of the U.S. stock market.

These are largely hidden weaknesses at present. Yet it cannot be a sign of Western strength that the annual bill for Social Security in the United States ($554 billion) is now larger than the bill for national security ($512 billion). And it cannot be a sign of imperial vigor that the United States needs to rely so heavily on foreign investors—including Asian central banks and Middle Eastern treasuries—to help finance a foreign policy that currently has minimal international support.

IV. The minds of men were gradually reduced to the same level, the fire of genius was extinguished.… The name of Poet was almost forgotten; that of Orator was usurped by the sophists. A cloud of critics, of compilers, of commentators, darkened the face of learning, and the decline of genius was soon followed by the corruption of taste.… This diminutive stature of mankind … was daily sinking below the old standard. —Gibbon, Chapter II.

Perhaps our most perplexing vulnerability, however, is cultural. Gibbon was acute in identifying literary decline as one symptom of a more profound Roman malaise. And if his barbed allusion to the “darkened … face of learning” does not immediately strike a chord, then some of the other symptoms may. While “the corrupt and opulent nobles of Rome gratified every vice that could be collected from the mighty conflux of nations and manners,” Gibbon wrote, “the most lively and splendid amusement of the idle multitude depended on the frequent exhibition of public games and spectacles.” Orgies and circuses are not precisely the favorite pastimes of Western society today. But if you substitute pornography and NASCAR, the parallel is not so far-fetched.

Outwardly, it is true, the institutions that exist to preserve and propagate our culture are in good shape. Never has the percentage of young people attending college been higher. Never have American universities dominated higher education and academic research as they do today. Our museums and concert halls offer more exhibitions and recitals than the enthusiast can possibly hope to attend. And to enter any branch of Barnes & Noble is to be overwhelmed by the sheer number of books being published.

Yet beneath this upper crust of high culture there simmers a less appetizing stew. Few children read for pleasure. Most boys would rather fritter away their time on brutalizing video games such as Grand Theft Auto. Girls no longer play with dolls; they are themselves the dolls, dressed according to the dictates of the fashion industry. Endlessly gaming, chatting, and chilling with their iPods, the next generation already has a more tenuous connection to “Western civilization” than most parents appreciate.

Gibbon’s argument against Roman “luxury” was in part that it sapped the empire’s martial strength. Here, too, there is a striking analogy. For our culture’s sedentary character—our strong preference for watching over doing, for virtual over real action—seems closely correlated to our changing physical shape. Gibbon’s Romans became metaphorical pygmies. We, by contrast, are being transformed into actual giants. We are certainly taller on average than past generations, a consequence of improvements in nutrition. But we are also wider, since we now consume significantly more fats and carbohydrates than we actually need. According to the standard measure of obesity, the body-mass index, the percentage of Americans classified as obese nearly doubled, from 12 percent to 21 percent, between 1991 and 2001. Nearly two-thirds of all American men are officially considered overweight, and nearly three-quarters of those between 45 and 64. Only Western Samoans and Kuwaitis are fatter.

V. The natives of Europe … no longer possessed that public courage which is nourished by the love of independence, the sense of national honor, the presence of danger, and the habit of command.… They … trusted for their defence to a mercenary army. The posterity of their boldest leaders was contented with the rank of citizens. —Gibbon, Chapter II.

Often fat and sometimes fatheaded, the new Romans of the United States are nevertheless less decadent than their counterparts in that part of the new West across the Atlantic, governed from the new Constantinople, Brussels. The United States remains a vigorously Christian country, thanks in part to the invigorating competition there has always been among its multiple denominations and sects. Americans also remain capable of a robust patriotism (though this seems to require regular foreign attacks on U.S. soil to be sustained). And—unlike the Romans—they still have a resilient work ethic.

Things are different in Europe. The Europeans have all but renounced warfare as a tool of policy. Their armies are puny, their weapons inferior. In some areas, standards of physical fitness are even lower than in Middle America. Take Scotland, the land of my birth. Male life expectancy in some parts of Glasgow is now as low as 54. There has been a 350 percent rise in alcohol-related deaths in the last two decades. About 13,000 people die from smoking-related diseases every year. More than a third of Scotland’s 12-year-olds are overweight or clinically obese.

While Americans work, young Europeans are to a remarkable extent idle. In Britain as a whole, more than 5 million adults of working age—nearly 15 percent of the workforce—are now dependent on benefits. Nearly half of those have been living on welfare for more than five years. The reason these people do not show up in the official unemployment statistics is that many of them are counted as unfit for work rather than jobless. Every day, 23 more teenagers in Britain sign up for “incapacity benefit.” This reflects a crisis of public education as much as of public health. As the Organization for Economic Cooperation and Development recently pointed out, an exceptionally large share of British pupils leave school without any qualifications at all. One in six British adults lacks the literacy skills of an 11-year-old. It may be technically correct that the incapacitated are not unemployed. The reality is that they are unemployable.

Most striking of all, Europe has become the world’s first post-Christian society. There was a time when Europe could justly refer to itself as “Christendom”; indeed, this was the most enduring legacy of both Rome and Byzantium. Europeans built the continent’s great cathedrals to accommodate their acts of worship. As pilgrims, missionaries, and conquistadores, they sailed to the four corners of the earth, intent on converting the heathens to the true faith. Now, however, it is they who are the heathens. According to the Gallup International Millennium Survey of religious attitudes, barely 20 percent of Western Europeans attend church services at least once a week, while 47 percent of North Americans and 82 percent of West Africans do. And fully 15 percent of Western Europeans deny that there is any kind of “spirit, God, or life force”—more than 7 times the American figure and 15 times the West African.

The exceptionally low level of British religiousness was perhaps the most striking revelation of a recent ICM Research poll. One in five Britons claims to “attend an organized religious service regularly,” less than half the American figure. And only 19 percent would be willing to die for his or her beliefs, while 71 percent of Americans say they would.

The de-Christianization of Britain is a relatively recent phenomenon, as British religious and cultural historian Callum Brown has shown. For most of the first half of the 20th century, Anglican Easter Day communicants accounted for between 5 and 6 percent of the population of England; it was only after 1960 that the proportion slumped to 2 percent. Figures for the Church of Scotland show a similar trend: steady until 1960, then falling by roughly half. As those figures suggest, British Protestants were not especially observant (compared, for example, with Irish Catholics), but until the late 1950s established-church membership, if not attendance, was relatively high and steady.

Prior to 1960, most marriages in England and Wales were solemnized in a church; then the slide began, down to around 40 percent in the late 1990s. Especially striking is the decline in confirmations of baptized children. Fewer than a fifth of those baptized are now confirmed, roughly half the figure for the period from 1900 to 1960.

Contrary to popular belief, it was not the British Catholic writer G. K. Chesterton who said, “When men stop believing in God, they don’t believe in nothing. They believe in anything.” But he could have said it. Chesterton viewed atheism with the utmost suspicion. Those who disbelieve in God on supposedly rational grounds, he argued, merely become prey to pseudo-religions and superstitions. His neatest formulation was in The Miracle of Moon Crescent, where he wrote, “You all swore you were hard-shelled materialists; and as a matter of fact you were all balanced on the very edge of belief—of belief in almost anything.” Evidence to support his point is now abundantly available in post-Christian Europe, where all kinds of New Age cults and irrational beliefs flourish. Otherwise intelligent people choose apartments on the basis of feng shui. They delude themselves into thinking that attendance at a concert will reduce poverty in Africa. They are simultaneously against poverty and against global warming, when it is precisely the reduction of poverty in Asia that is increasing emissions of carbon dioxide. Drawn to conspiracy theories as the ancients were to superstitions, some Europeans blame the U.S. government for rising sea levels (not to mention the 9/11 terrorist attacks).

With the decline of Christianity, Europe is also experiencing a rise in what politicians euphemistically call “antisocial behavior.” The restrained civility that was once a hallmark of English life has all but vanished, to be replaced by a startling rudeness. Profanity in the street and on television has become the norm. Once, a lifetime ago, an English writer warned of a future in which the state would keep the population under permanent surveillance. Today, George Orwell’s imaginary Big Brother is the name of a television series in which individuals volunteer for surveillance by the rest of the population. Far from being inhibited by their loss of privacy, they glory in mutual degradation. Shame has gone; so has civility. On Friday and Saturday nights, most English city centers become no-go zones where drunken, knife-wielding youths brawl with one another and the police. Another striking symptom of this new primitivism is the extraordinary surge in the popularity of tattoos, once associated with the unruly Picts of the Far North. In this modern decline and fall, it seems, at least some of the barbarians come from within the empire.

VI. A perpetual stream of strangers and provincials flowed into the capacious bosom of Rome. Whatever was strange or odious, whoever was guilty or suspected, might hope, in the obscurity of that immense capital, to elude the vigilance of the law.… It was the just complaint of the ingenuous natives that the capital had attracted the vices of the universe and the manners of the most opposite nations. —Gibbon, Chapters XV and XXXI.

Nothing changed Rome more than immigration. The same is true of the West today. But whereas a large proportion of immigrants to the United States come from countries that were colonized by Roman Catholics and quickly find jobs in America’s dynamic labor market, the situation in Europe is altogether different.

The demographic transformation of the West has its roots in feminism. Legislation against sex discrimination opened all kinds of careers to women that had previously been dominated by men. At the same time, the ready availability of contraception and abortion gave women an unprecedented control over their own fertility. Beginning in the late 1970s, the average Western European couple had fewer than two children. Today the figure is around 1.4, whereas it needs to be slightly higher than 2 for a population to remain constant. Europeans, quite simply, have ceased to reproduce themselves. The United Nations Population Division forecasts that, if Spanish fertility persists at such low levels, within 50 years the country’s population will decline by more than 4 million. The population of Italy will fall by a fifth. The overall reduction in native-born European numbers could be as much as 14 million. Not even two World Wars inflicted such an absolute decline in population.

Meanwhile, however, the combination of relative poverty and religious revival had a very different effect on Europe’s southern and eastern neighbors. Since the 1950s, according to U.N. figures, the crude birthrate in seven of the Muslim countries to the south and east of the Mediterranean—Morocco, Algeria, Tunisia, Libya, Egypt, Jordan, and Syria—has been two or three times the European average. The gap between Pakistan and Britain has been even wider. The total number of children per woman in Britain today is around 1.7. The latest figure for Pakistan, one of the principal sources of immigrants to Britain, is 4.3.

The first wave of immigration to Europe after World War II was a post-imperial phenomenon; people from former colonies migrated in response to apparent labor shortages. Many family members later followed. Now, as European societies age, they are attracting immigrants from rather closer to home—from Eastern Europe especially—but the flow from the Muslim periphery continues, much of it illegal. The trouble is that many of the newcomers are moving to residential ghettos with miserable economic prospects. In France, the Western European country with the largest Muslim population, the unemployment rate among foreign-born residents is more than twice the national average, which, at 9 percent, is already high enough.

Today, around 20 million Muslims make their home in the European Union, and that number is certain to rise, even if Middle East expert Bernard Lewis’s recent prophecy—that Muslims would be a majority in Europe by the end of the 21st century—surely goes too far. Fouad Ajami, director of the Middle East Studies Program at Johns Hopkins University, is more realistic when he anticipates that Muslim “colonization” will continue to be concentrated in certain regions of Europe, just as it was when the Moors ruled southern Spain (which they did from the 8th to the 15th century), or when the Ottomans ruled the Balkans (from the 14th to the 19th).

Those historic parallels are a reminder that Islam played a crucial role in Gibbon’s explanation of the decline and fall of the Roman Empire. For it was Islam that struck a heavy blow to what remained of the Roman Empire in the West when the Moors advanced into France as far as Poitiers, where they were finally halted, in 732. And it was again Islam which finally decapitated what remained of the empire in the East when the Turks sacked Constantinople in 1453.

Gibbon’s account of monotheism is certainly the most controversial part of his great work. It was the spread of Christianity within the Roman world, he argues in the notorious 15th chapter of The Decline and Fall, that tended to dilute the martial values of the Romans. Venerating the Virgin Mary was very different from venerating Mars, the god of war. Yet the monotheism of Muhammad had a very different character from that of Christianity. Islam, in Gibbon’s account, was always a belligerent religion. “The intrepid souls of the Arabs were fired with enthusiasm” by it, he notes. “The death which they had always despised became an object of hope and desire.”

That passage resonates in our own time, when suicide bombers stalk our transport systems, dreaming of heavenly trysts with multiple virgins. The problem, as Europeans have come to understand, is that it takes only a few would-be martyrs within a single Muslim community to produce a calamity.

VII. Gibbon called the decline and fall of the Roman Empire “the greatest, perhaps, and most awful scene in the history of mankind.” Could a still more awful scene be unfolding in the form of the West’s decline and fall? For Gibbon, Rome’s decline was the result of military overstretch, inner decadence, religious conversion, and barbarian invasion. To my mind, all of these are operating today to undermine what remains of Western dominance in the world. If the United States suffers mainly from the first and second, the European Union seems even more afflicted by the third and fourth.

A hundred years ago, as we have seen, the West could justly claim to rule the world. After a century during which one Western empire after another has declined and fallen, that can no longer credibly be claimed. Empires, of course, take time to decline and fall. Gibbon begins his narrative in A.D. 96; he ends it in 1430, more than a millennium later. Yet there can be no question that the pace of imperial descent has quickened in modern times. The longest-lived empire after the Romans was the Ottoman Empire, which endured for 469 years. The East European empires of the Habsburgs and the Romanovs each existed for more than three centuries. The Moguls ruled a substantial part of what is now India for 235 years. Of an almost identical duration was the realm of the Safavids in Persia. The Spanish, Dutch, French, and British empires can all be said to have endured about 300 years. The lifespan of the Portuguese empire was closer to 500.

The empires created in the 20th century, on the other hand, were all of comparatively short duration. The Bolsheviks’ Soviet Union (1922–91) lasted less than 70 years, a meager record indeed, though one not yet equaled by the People’s Republic of China, established in 1949. Japan’s colonial empire, which can be dated from the conquest of Taiwan in 1895, lasted barely 50. Most ephemeral of all modern empires was the so-called Third Reich of Adolf Hitler, which did not extend beyond its predecessor’s borders before 1938 and had retreated within them by the end of 1944. The remaining empires of the West are young by Roman standards. But by the standards of modern times, the United States—at 230 years—is quite long in the tooth. The day when the Capitol in Washington, D.C., will be reduced to a picturesque ruin may seem to us infinitely remote. History—including the greatest historian of them all, Edward Gibbon—suggests that it may come sooner than we think.

Niall Ferguson is Laurence A. Tisch Professor of History at Harvard University and a Senior Fellow of the Hoover Institution at Stanford, and the author of The War of the World: Twentieth-Century Conflict and the Descent of the West.

Nur wenige Denker prägten die Wirtschaft so wie John Maynard Keynes. Noch heute, 62 Jahre nach seinem Tod, polarisiert er. Denn soll der Staat tatsächlich eingreifen, um die Wirtschaft in Schwung zu bringen?

Hamburg - Sogar im Videonetzwerk Youtube ist er zu finden. Er, das ist John Maynard Keynes. Und er dürfte sogar in jenen Kreisen bekannt sein, die an Wirtschaft kein Interesse haben. Denn Keynes gilt als Begründer jener Schule wirtschaftlicher Denker, die dem Staat mehr als nur eine bloße Nachtwächterrolle zumisst.

Der Vordenker: John Maynard Keynes wurde 1883 in Cambridge geboren - übrigens als Sohn eines Ökonomieprofessors. Er studierte Philosophie, Geschichte, Mathematik und Ökonomie in Cambridge. Er war unter anderem auch Herausgeber des "Economic Journals" und Mitglied der Commission on Indian Finance and Currency. 1946 verstarb Keynes. (© Getty Images)

Der Staat solle nicht bloß die Aufsicht führen, sondern gegebenenfalls eingreifen. Denn die gesamtwirtschaftliche Nachfrage steuere die Wirtschaft. Und dazu gehört auch der Staat.

Das mit den Gräben, das war auch Keynes. Der Brite plädierte dafür, der Staat solle notfalls selbst zum Kunden werden. Es sei also besser, die Menschen Gräben ausheben und dann wieder zuschütten zu lassen als die Menschen in der Arbeitslosigkeit zu belassen. Denn so werde immerhin die Nachfrage angekurbelt.

Für diese Fokussierung auf die Nachfrage dürften ihm Gewerkschaftler weltweit noch immer ein Lichtlein am 21. April, dem Todestag des Briten, entzünden. Immerhin verleiht er damit ihren steten Forderungen nach höheren Löhnen wissenschaftliches Fundament. Keynes selbst sprach von der inhärenten Unsicherheit der Wirtschaft. Anders als die bis dato herrschende Meinung darlegte, komme es also nicht automatisch zu einem Gleichgewicht am Arbeitsmarkt. Um das zu erreichen, sei neben dem privaten Konsumenten auch der Staat in der Pflicht. Im Abschwung, so Keynes, solle der Staat die Wirtschaft durch Aufträge stützen - zum Beispiel mit den genannten Bauaufträgen. "Deficit spending" ist das Schlagwort, das seitdem die Runde macht - angeblich nicht von Keynes selbst geprägt. Im Aufschwung könne sich der Staat dann wieder finanzieren, zum Beispiel über höhere Mehrwertsteuern.

Das gleiche Bild auf Unternehmensebene - auch sie trügen eine Verantwortung gegenüber der Gesamtwirtschaft. Daher sollen Unternehmen ihren Angestellten auch in Krisenzeiten nicht die Löhne kürzen, so seine Empfehlung.

Falls das Kapital irgendwo eine Heimat hat, dann ist es die Schweiz. Die Vermögensverwalter betreuen im Auftrag ihrer reichen Kunden 4000 Milliarden Franken. So hat das Debakel auf den Finanzmärkten die Grundfesten der Eidgenossenschaft erschüttert. Angeschlagen sind die UBS, das Selbstbewusstsein und das Schweizer Modell.

Keine andere Volkswirtschaft in Europa hat sich so stark und zielstrebig globalisiert. Das hat sich gelohnt, aber jetzt erweist sich, dass das Land gleichzeitig sehr anfällig geworden ist – die Kehrseite der Globalisierung. Der Krise verdanken wir eine ungemütliche Erkenntnis: Die Grossbanken UBS und Credit Suisse sind zu gross für die Schweiz. Die UBS hat an die 50 Milliarden Franken verloren – zehn Prozent des Schweizer Volkseinkommens. Ihr Bankrott würde ein blühendes Land ruinieren. Zwangsläufig müsste der Staat die Riesenbank auffangen. Müssen müsste er, aber könnte er einen solchen Kraftakt stemmen?

Die Bilanz der UBS beträgt 2000 Milliarden Franken, die der Credit Suisse 1200 Milliarden, macht zusammen 3200 Milliarden. Hätte die Eidgenossenschaft im Ernstfall auch nur zehn Prozent dieser Unsumme zu schultern, wäre sie überfordert: Die 320 Milliarden wären knapp zwei Drittel des Volkseinkommens; der Bund würde seine Schulden mehr als verdreifachen.

Daran dachte vor der Krise niemand, doch jetzt wird klar: Das von den zwei Grossbanken ausgehende «Systemrisiko» erweist sich für die Schweiz als untragbar. «Die UBS wird einen schönen Teil ihres Geschäfts aufgeben müssen», befindet Hans Geiger, Professor für das Bankwesen: «Vereinfacht gesagt, muss sie ihre Bilanzsumme halbieren.»

Kann man schadlos nationale Institutionen hälften? Der Kleinstaat Schweiz sieht sich vor allem als Wirtschaftsnation. UBS und Credit Suisse haben über viele Jahre Identität gestiftet, Identifikation geboten. Obendrein halten sie einen Anteil von achtzig Prozent am heimischen Markt. Gerät die UBS ins Schlingern, droht eine nationale Katastrophe.

Kein Wunder, dass Bundesrat und Aufsichtsbehörden beklommen sind. Unter ihrem Druck werden die beiden Grossbanken künftig mit mehr Eigenkapital weniger Geschäfte machen dürfen. Das verringert ihren Gewinn und verbilligt ihre Aktien – was eine Übernahme durch ausländische Institute wie die voll globalisierte HSBC (Hongkong and Shanghai Banking Corporation) erleichtert. Der Staatsfonds von Singapur kaufte bereits neun Prozent der UBS, als die Krise ausbrach – Rettung in höchster Not.

Das Swissair-Grounding 2001 entsetzte die Nation, aber für die Volkswirtschaft waren die Folgen unerheblich. Allerdings zeigte sich damals, dass die Bankenchefs und andere Schweizer Mitglieder der «globalen Klasse» (Lord Dahrendorf) nicht mehr willens waren, nationale Heiligtümer zu erhalten. Doch 2008 geht es um die Substanz: Sollte die UBS als eine Säule unserer Volkswirtschaft demnächst einer ausländischen Bank gehören, geriete das helvetische Wirtschaftsmodell in Schieflage. Unser globalisiertes Land verlöre allmählich die Kontrolle über seine weitere Globalisierung. Die Schweiz, seit jeher ohne Geltung in der Weltpolitik, hätte bald auch keine mehr in der Weltwirtschaft.

Das Dilemma des globalisierten Kleinstaats: Seine Machtelite wir immer multinationaler und hat je länger, desto weniger Sinn für die Schweiz. In der heterogenen Eidgenossenschaft bildeten die alteingesessenen Konzerne einst eine Klammer der Nation. Die eigelbe Post oder die orange Migros erfüllen bis heute die staatspolitische Aufgabe, Nähe und helvetische Gemeinsamkeit zu schaffen – damit stets von Neuem zusammenwächst, was nur bedingt zusammengehört. Doch Nestlé und Novartis, Roche oder Swiss Re, diese Riesen würden zwar nie ihren Sitz ins Ausland verlegen, aber innerlich entwachsen sie der Schweiz.

In Europa haben nur England, Deutschland und Frankreich mehr Weltkonzerne als die Eidgenossenschaft. Uns schmeichelt das. Aber das Mitspielen mit den Global Players bringt nicht nur hohen Ertrag, sondern auch gewaltige Risiken. Die UBS wollte mithalten und hat sich übernommen. Nach dem traumatischen Untergang der nationalen Fluggesellschaft wird abermals Undenkbares denkbar, Unfassbares rückt greifbar nah: Überlebt die UBS? Allein die Frage ist ein zweiter Schock. Die Schweiz hat in Frankfurt vorgefühlt, ob die Europäische Zentralbank (EZB) helfen würde, wenn es für eine Rettungsaktion aus eigener Kraft nicht reicht; die Rede ist von einem Geheimabkommen.

Bundesräte und Wirtschaftsführer hüten sich, solche Abhängigkeiten zu thematisieren und das Zweischneidige an der Globalisierung zu erörtern. Die Stimmung im Lande ist unreell. Das Volk des Alleingangs ist sich nicht bewusst, dass es im Ernstfall auf EZB und EU angewiesen wäre. Die SVP zelebriert unverdrossen die nationale Souveränität, obwohl die Finanzkrise und ihre Kettenreaktionen die globale Interdependenz verdeutlichen. Schweizer und Schweizerinnen sind stolz auf «ihre» Konzerne, die sich der Heimat entfremden, zumal wenn der enge Heimmarkt bloss ein, zwei Prozent des Weltmarkts ausmacht.

Viele Manager stammen aus dem Ausland – das Gesetz der grösseren Zahl. Jedoch betrachten auch manche schweizerische Wirtschaftsführer ihr Vaterland gleichsam von aussen als einen «Standort». Und Standortpatrioten à la Tito Tettamanti sind so lange patriotisch, als der Standort stimmt. Um die Schweiz besser aufzustellen, neigen viele zur sogenannten City-State-Nischenstrategie: Vorbild ist der Stadtstaat und neue UBS-Hauptaktionär Singapur. Wenn es nach ihnen geht, soll auch die Eidgenossenschaft «offshore» sein, in Europa mittendrin und doch aussen vor, total global und bergbauernschlau neutral in ihrer kleinen Ecke.

Jetzt hat ein globaler Orkan ausgerechnet diese Ecke mit aller Wucht heimgesucht. Der Finanzplatz, der gut zehn Prozent des Volkseinkommens erbringt, schrumpft bereits und wird es weiter tun. Behauptet sich die Schweiz als Insel der Stabilität? Sie lebt zum Teil vom Lohn des Vertrauens: von den Milliarden, die ins Land strömen. Schwindet das Vertrauen, schmilzt das Geld wie Alpenbutter an der Sonne. Die ungestüme Globalisierung des Finanzplatzes hat die legendäre Stabilität – den grössten Standortvorteil – untergraben.

Der glänzende Wirtschaftshistoriker Hansjörg Siegenthaler vergleicht die Zeitenwende, die wir erleben, mit der Zäsur von 1875 in der britischen Geschichte. Jahrhundertelang hatte nicht die Krone, sondern hatten private Handelsgesellschaften wie die Britische Ostindien-Kompanie die Schlüsselrolle gespielt in der Kolonisierung der Welt. Doch Wirtschaftskrisen und die Rivalität mit aufstrebenden Kolonialmächten erforderten schliesslich das Eingreifen des Staats. Wie einst die Kolonisierung, tritt heute die Globalisierung in ihre zweite Phase: Nachdem Weltkonzerne diese Grundbewegung trugen, beschleunigten und ausarten liessen, ist es unausweichlich, dass die Staatengemeinschaft das Heft in die Hand nimmt und Regeln setzt, um einer neuerlichen Weltfinanzkrise zuvorzukommen.

Das ändert das Spiel auch für die Schweiz: In der zweiten Epoche der Globalisierung dürfte es für sie schwieriger werden, ihre Interessen zu verfechten. Wenn künftig weniger die Marktmacht globaler Unternehmen als vielmehr die politische Macht grosser Staaten und weltregionaler Staatenbünde zählt, verliert die Eidgenossenschaft der Konzerne weiter an Stellenwert.

Immerhin birgt die Krise auch Chancen. Schweizer Bankiers, die blosse Dienstleister hätten bleiben sollen, hatten sich zu «Masters of the Universe» aufgeplustert. Jetzt kommt die Industrie wieder zur Geltung. Während der Finanzplatz umzubauen bleibt, gedeiht der solide Werkplatz. Hier geht die Schweizer Globalisierungsstrategie nach wie vor auf. Es sei denn, die Finanzkrise schlägt in eine Weltwirtschaftskrise um. Sie träfe die Schweiz, die jeden zweiten Franken auswärts verdient, härter als andere. Und in der Wirtschaftsnation gilt erst recht: leidet die Wirtschaft, leidet die Nation.

Martin Cesna
Wahrscheinlich ist es so wie in der Erziehung: Der Erziehende muss viel grösser sein, als der zu Erziehende. Daher denke ich, dass in einem kleinen Land wie der Schweiz alles, was wirtschaftlich wesentlich grösser ist als ein Kiosk, das Land einfach überfordert. Sonst könnte es nämlich sein, analog in der Erziehung (oder ist es etwa so?), dass der Grössere dem Kleineren sagt, wie er jetzt zu singen hat.

Heinrich WAGNER
Diese pertinente Analyse bestätigt einmal mehr: “Die Welt ist meine Vorstellung.” Absolute Wahrheit gibt es nicht, ist nur Wahrnehmung. Jedes Lebewesen sieht, hört, riecht und fühlt entsprechend seinen Sinnesorganen. Daraus folgt “Quot capita, tot sensus”. Könnte es sein, dass “Schielende” der Wahrheit näher kommen?
Von allen Artikeln die die aktuel weltweite Finanzkrise und die daraus resultierenden Debakel analysieren schwebt dieser oben aus. Die GRUNDFESTEN sind “erdweit”(bleiben wir bescheiden) erschüttert. Bravo Herr Robert de WECK. Sie sprechen Klartext…
PS Auch die “welsche” Presse fand es nützlich Ihren Artikel übersetzen zu lassen und zu veröffentlichen. (Siehe Le Temps du 10.10.2008)

En Europe continentale, aucune autre économie ne s'est mondialisée aussi résolument que la nôtre. Cette stratégie a été profitable - mais la Suisse est devenue vulnérable. C'est le revers de la mondialisation. La crise nous invite à dresser un constat déplaisant: UBS et Credit Suisse, les deux grandes banques, sont trop grandes pour notre petit pays. UBS a perdu pas loin de 50 milliards de francs: 10% du produit national. Sa faillite ruinerait une économie florissante; par la force des choses, l'Etat devrait lui porter secours. Il devrait. Mais en aurait-il les moyens?

Le bilan d'UBS se monte à 2000 milliards de francs, celui de Credit Suisse à 1200 milliards, au total 3200 milliards. Si la Confédération devait éponger ne serait-ce que 10% de ce montant, elle se retrouverait elle-même en déroute. Une ardoise de 320milliards de francs? Ce seraient les deux tiers du produit national; au bas mot, la Confédération triplerait ses dettes.

Personne n'y songeait avant la crise. Or soudain le «risque systémique» qui émane des deux grandes banques s'avère ingérable pour la Suisse. «UBS devra abandonner une bonne partie de ses activités, estime Hans Geiger, professeur de gestion bancaire à l'Université de Zurich. En un mot, elle devra diviser son bilan par deux.»

Peut-on réduire de moitié des institutions nationales? La Suisse, toute petite, est fière de ses grandes entreprises et de leur puissance. Longtemps, UBS et Credit Suisse ont conforté l'identité d'une nation qui, pour bonne part, se définit par le succès de son économie. De surcroît, les deux banques contrôlent quelque 80% du marché intérieur. Si l'UBS devait s'effondrer, ce serait une catastrophe nationale. Nous l'avons frôlée.

On saisit l'anxiété du Conseil fédéral et des autorités de surveillance. Il y va de l'intérêt national que les deux grandes banques diminuent leur activité et augmentent leur capital propre. Mais cela réduira leurs bénéfices et pèsera sur le cours de leurs actions, ce qui peut susciter une offre publique d'achat par des établissements comme la HSBC (la Hongkong and Shanghai Banking Corporation). D'ores et déjà, le fonds souverain de Singapour a acheté une part de 9% d'UBS lorsque la crise a éclaté: un sauvetage de dernière minute.

Le grounding de Swissair en octobre 2001 a bouleversé la nation, mais son impact sur l'économie a été insignifiant. Toutefois, les dirigeants des grandes banques et les principaux membres suisses de la «classe globale» (Lord Dahrendorf) ont montré à cette occasion qu'ils ne s'efforceraient plus de sauvegarder les sanctuaires nationaux.

Mais en octobre 2008, la situation est autrement plus sérieuse car une partie de notre substance économique est en péril: UBS est un noyau de l'économie. Sa reprise par une banque étrangère mettrait en question le modèle helvétique des trois décennies passées: lentement mais sûrement, notre pays ultra-mondialisé perdrait le contrôle de sa mondialisation. La Suisse, qui n'a aucun poids en politique internationale, n'en aurait plus dans l'économie mondiale.

Le dilemme d'un petit Etat globalisé: ses élites multinationales perdent au fur et à mesure leurs attaches avec le pays. Dans cette Confédération si hétérogène, les grandes entreprises étaient naguère un ciment de la nation. Les géants jaune et orange, La Poste et Migros, restent en mesure de «rassembler» à leur façon les Suisses, d'éveiller un sentiment de proximité et d'appartenance à un ensemble, bref de contribuer à notre unité précaire. Tandis que les géants transnationaux, Nestlé et Novartis, Roche ou Swiss Re, s'éloignent en leur for intérieur de la Suisse, même s'ils ne songent pas sérieusement à délocaliser leur siège.

En Europe, seules l'Angleterre, l'Allemagne et la France ont plus de grands groupes transnationaux que la Confédération. Cela nous flatte. Or, il est à la fois avantageux et hasardeux de jouer le jeu des «global players». UBS, qui voulait être à la pointe du mouvement, a présumé de ses forces. Sept ans après l'effondrement de la compagnie aérienne nationale, l'impensable est à nouveau pensable, l'inimaginable tangible: «UBS va-t-elle survivre?» Le seul fait que les Suisses aient à se poser la question est un nouveau traumatisme. La Banque nationale a pressenti la Banque centrale européenne (BCE) à Francfort pour qu'elle vienne à la rescousse au cas où la Suisse ne serait pas en mesure de mener par ses propres forces une action de sauvetage; un accord secret aurait été conclu.

Or, le Conseil fédéral et les dirigeants d'entreprise se gardent bien de mettre en évidence de telles dépendances et de relever - outre ses grands avantages - les effets pervers de la mondialisation. L'ambiance est irréelle. Le peuple de l'«Alleingang» n'est pas conscient du fait qu'en cas de crise grave, il dépendrait de la BCE et de l'UE. UDC exalte la souveraineté nationale au moment même où la crise financière et ses réactions en chaîne illustrent l'interdépendance globale. Les Suisses sont fiers de «leurs» multinationales qui s'éloignent d'un pays qui ne représente que 1 à 2% du marché mondial.

Beaucoup de chefs d'entreprise, et parfois les plus capables, viennent de l'étranger, c'est la loi des grands nombres. Or certains patrons suisses regardent aussi la Suisse comme «de l'extérieur». Les patriotes «offshore» à la Tito Tettamanti n'aiment la patrie - qu'ils confondent avec une société anonyme - que quand elle leur est profitable. Afin de mieux positionner la Suisse SA, ils plaident pour une stratégie de «City-State» à la Singapour; l'actionnaire d'UBS donne l'exemple. Ils préconisent une Confédération «offshore», à la fois au milieu et en marge de l'Europe, cosmopolite et chauvine, mondialisée mais neutre dans son coin.

Or, l'ouragan mondial a frappé de plein fouet notre coin du monde. La place financière, à laquelle nous devons 10% du revenu national, est sur la défensive. La Suisse restera-t-elle l'îlot de stabilité qu'elle était? Elle vit en partie du salaire de la confiance, à savoir des milliards d'euros et de dollars qui affluent. Si la confiance décline, l'argent fondra comme neige au soleil. La mondialisation forcenée d'UBS a mis à mal le principal atout de notre pays, sa stabilité.

Le grand historien Hansjörg Siegenthaler compare le tournant que nous vivons avec le virage de 1875 dans l'histoire de la Grande-Bretagne. Des siècles durant, la Compagnie anglaise des Indes orientales et d'autres entreprises privées jouèrent le rôle clef dans la colonisation du monde. Cependant, une crise économique et la montée de nouvelles puissances coloniales exigèrent finalement l'intervention de l'Etat.

A l'image de la colonisation d'antan, la mondialisation entre aujourd'hui dans sa deuxième phase: les grands groupes internationaux ont porté ce mouvement avant qu'il ne s'emballe et dégénère. Dès lors, il est inévitable que la communauté des Etats prenne les rênes et détermine les règles qui préviendront une nouvelle crise financière mondiale.

Or, cela modifie profondément les règles du jeu pour la Suisse. Durant la seconde période de la mondialisation, notre pays peinera à défendre ses intérêts. Si le pouvoir politique de l'UE et des grandes nations prévaut sur celui des grands groupes transnationaux, le poids spécifique de la Confédération diminuera. Son isolationnisme se retournera contre elle.

Quelques banquiers, qui auraient dû rester, fiers et humbles, de simples prestataires de services, s'étaient autoproclamés «Masters of the Universe». Mais jusqu'à nouvel avis, l'industrie prime à nouveau sur la finance. Alors que la place financière, essentielle pour notre pays, doit se rénover en profondeur, la place industrielle prospère et impressionne. Ici, la stratégie de mondialisation de la Suisse reste un formidable succès - pour autant que la crise financière ne tourne pas en crise économique mondiale. Celle-ci frapperait violemment la Suisse qui gagne un franc sur deux hors des frontières. Dans notre «Wirtschaftsnation», notre «nation de l'économie», portée bien plus que d'autres par la réussite de ses entreprises, une règle prévaut: quand l'économie souffre, la nation souffre.

Beck: Die Krise gefährdet unser gesamtes ökonomisches Weltbild - oder zerschlägt es sogar vollständig.

Beck: Der Westen fühlt sich überlegen. Seine freie Marktwirtschaft hält er für besser als zum Beispiel die sozialistischen Staatswirtschaften der Vergangenheit. Aber auch über China mit seiner durchaus erfolgreichen Mischung aus Privat- und Staatsökonomie rümpfte man hier allzu oft die Nase. Dieses Überlegenheitsgefühl dürfte deutlich angeschlagen sein.

SPIEGEL ONLINE: Welche Folgen hat die Krise für das Vertrauen der Menschen in die Eliten?

Beck: In den zurückliegenden Wochen und Monaten ist dieses Vertrauen schwer erschüttert worden. Bundeskanzlerin Angela Merkel und Finanzminister Peer Steinbrück glaubten bis vor wenigen Tagen, dass sie die Krise national lösen könnten. Sie erklärten, der große Sturm würde an unserem Land vorbeiziehen. Viele deutsche Politiker blicken auf die Welt mit diesem merkwürdig uninformierten und selbstgenügsamen Blick. Man hat das Gefühl, dass sie den Grad der internationalen Abhängigkeiten und die Logik der Globalisierung einfach nicht verstehen.

Beck: Ja, aber nicht nur sie. Auch in anderen Ländern hat man die Ideologie vom selbstverständlichen Funktionieren des ungeregelten Marktes widerspruchslos und kreativlos übernommen und nachgebetet. Selbst ein kritisch denkender Politiker wie Joschka Fischer hat vor Jahren behauptet, gegen die Gesetze des Marktes könne die Politik nichts ausrichten. Diese Phantasielosigkeit und Deformation rächt sich jetzt, wo das Finanzrisiko den globalen politischen Raum für Regierungsalternativen öffnet.

SPIEGEL ONLINE: Angesichts der Krise räumen manche Politiker und, seltener, Manager Fehler ein. Mit gigantischen Summen versuchen die Regierungen, das Vertrauen zu erneuern. Ergibt das Sinn?

Beck: Am Beispiel des britischen Premierministers Gordon Brown kann man tatsächlich beobachten, dass sich ein dramatischer Sinneswandel vom Marktfetischismus zum Staatsoptimismus vollzieht. Mit ähnlicher Vehemenz, wie Brown früher für den freien Markt kämpfte, propagiert er nun seinen neuen Plan zur Rettung der Welt, dem sich alle anderen anschließen sollen. Ich frage mich: Wie glaubwürdig ist das?

Beck: Das bleibt abzuwarten. Niemand weiß, was ist und was die im Nullenrausch verordnete Therapie bewirkt. Wir alle sind Teil eines ökonomischen Großexperiments mit offenem Ausgang. Interessant ist allerdings, wie schnell aus Schurken Helden werden: Haben Gordon Brown, Angela Merkel und Peer Steinbrück nicht vor kurzer Zeit noch den ungeregelten Kapitalismus hochleben lassen? Ihre wundersame Bekehrung ist für mich kabarettreifes Konvertitentum.

Beck: Nein, wie auch? Wer über Nacht einen Meinungs- und Fahnenwechsel zu einer Art Staatssozialismus für Reiche vollzieht, ist unglaubwürdig. Je tiefer die Krise wird, desto stärker scheint allerdings der Zwang zuzunehmen, denen zu glauben, die die Misere mit ihrem sogenannten Sachverstand verursacht haben. Dieser Prozess verhindert, dass die Eliten ausgetauscht werden, was in der Demokratie aber üblich sein sollte. Das führt zur Personalunion von Verbrecher und Polizei.

SPIEGEL ONLINE: Wer sollte denn Ihrer Meinung nach an die Stelle von Merkel und Steinbrück treten?

Beck: Das ist das Problem: Die gesamte politische Elite hat sich bislang zur Alternativlosigkeit der Marktwirtschaft bekannt. Wobei Linken-Chef Oskar Lafontaine immerhin die politische Stärkung der Europäischen Union und ein europäisches Wirtschaftsministerium fordert.

SPIEGEL ONLINE: Wollen Sie damit sagen, dass die Linken einen Weg aus der Krise wissen?

Beck: Nein. Wir haben es im Kern mit einer restaurierten Linken zu tun. Diese Partei will zurück zum Nationalstaat. Wir brauchen aber eine neue transnationale Politik zur Regulierung der Finanzmärkte. Bürgerbewegungen wie die Globalisierungskritiker von Attac haben diese Notwendigkeit erkannt, sind aber zu schwach, um ihre Ansätze offensiv zu verwirklichen.

SPIEGEL ONLINE: Dafür zeigt der Staat mit seinen Garantien für Banken und Spareinlagen Stärke. Schafft die Krise deshalb nicht eher neues Vertrauen in den Staat?

Beck: Niemand weiß, ob wir den Boden des Abgrunds schon erreicht haben. Im globalen Risikobewusstsein, in der Antizipation der Katastrophe, die es in jedem Fall zu verhindern gilt, tut sich ein neues machtpolitisches Feld auf. Man könnte jetzt langfristig durchsetzen, dass nicht die Wirtschaft die Demokratie, sondern die Demokratie die Wirtschaft dominiert. Diese kurzfristige, goldene Gelegenheit dürfen wir nicht verstreichen lassen. Dabei geht es nicht nur um die Kontrolle des Bankensektors, sondern auch um gerechte Steuerpolitik und soziale Sicherheit im transnationalen Rahmen.

SPIEGEL ONLINE: Sie fordern für die Finanzmärkte eine Abkehr vom Laisser-faire und die Hinwendung zum Vorsorgeprinzip. Müsste das beispielsweise heißen, dass die Banken neue Finanzprodukte nur verkaufen dürften, nachdem sie auf ihre Unschädlichkeit getestet wurden?

Beck: Das Problem ist, dass die traditionelle Ökonomie Risiko nur als positive Größe sieht. Wie sich aber gerade zeigt, ist diese Sorglosigkeit grundfalsch.

SPIEGEL ONLINE: Unterstützen Sie die Forderung von Globalisierungskritikern, so etwas wie einen Finanzmarkt-TÜV einzuführen?

Beck: Sicher, diese Möglichkeit muss in die bestehenden Institutionen eingebaut werden.

SPIEGEL ONLINE: Sorgt die soziale Marktwirtschaft denn nicht von sich aus für eine bessere Regulierung als das angelsächsische Kapitalismusmodell?

Beck: Keineswegs. Auch das Modell der sozialen Marktwirtschaft ist im nationalstaatlichen Denken befangen. Auch in Deutschland triumphierte der Glaube an den Markt über alle anderen Ansätze.

SPIEGEL ONLINE: Eine Umfrage der Bertelsmann-Stiftung hat aber unlängst ergeben, dass nur noch 31 Prozent der Deutschen eine gute Meinung über die soziale Marktwirtschaft haben.

Beck: Politiker und Manager gelten nicht länger als Risikomanager, sondern auch als Quellen des Risikos. Auch die Hartz-Reformen haben das Vertrauen in die soziale Sicherheit, die der Staat bietet, geschmälert. Die Politik verschiebt die Lebensrisiken einseitig auf das Individuum und entledigt sich ihrer Verpflichtung für die soziale Sicherheit und Wohlfahrt.

SPIEGEL ONLINE: Wird die alte Idee der Gleichheit künftig wieder eine größere Bedeutung erhalten?

Beck: Eine größere relative Gleichheit auf jeden Fall. Anstatt die Verluste zu vergesellschaften und die Gewinne zu individualisieren, sollten auch die Bankmanager und -vorstände haftbar gemacht werden für ihre Fehler und Verluste. Und auch international wird Gleichheit eine wichtigere Rolle spielen: Die aufstrebenden Schwellenländer wie Brasilien, Indien und China verlangen und erhalten mehr Mitsprache.

"Admit it, mes amis, the rugged individualism and cutthroat capitalism that made America the land of unlimited opportunity has been shrink-wrapped by half a dozen short sellers in Greenwich, Conn., and FedExed to Washington, D.C., to be spoon-fed back to life by Fed Chairman Ben Bernanke and Treasury Secretary Hank Paulson. We’re now no different from any of those Western European semi-socialist welfare states that we love to deride."– Bill Saporito, "How We Became the United States of France," Time (September 21, 2008)

On October 15, the Presidential candidates had their last debate before the election. They talked of the baleful state of the economy and the stock market; but omitted from the discussion was what actually caused the credit freeze, and whether the banks should be nationalized as Treasury Secretary Hank Paulson is now proceeding to do. The omission was probably excusable, since the financial landscape has been changing so fast that it is hard to keep up. A year ago, the Dow Jones Industrial Average broke through 14,000 to make a new all-time high. Anyone predicting then that a year later the Dow would drop nearly by half and the Treasury would move to nationalize the banks would have been regarded with amused disbelief. But that is where we are today.(1)

Congress hastily voted to approve Treasury Secretary Hank Paulson’s $700 billion bank bailout plan on October 3, 2008, after a tumultuous week in which the Dow fell dangerously near the critical 10,000 level. The market, however, was not assuaged. The Dow proceeded to break through not only 10,000 but then 9,000 and 8,000, closing at 8,451 on Friday, October 10. The week was called the worst in U.S. stock market history.

On Monday, October 13, the market staged a comeback the likes of which had not been seen since 1933, rising a full 11% in one day. This happened after the government announced a plan to buy equity interests in key banks, partially nationalizing them; and the Federal Reserve led a push to flood the global financial system with dollars.

The reversal was dramatic but short-lived. On October 15, the day of the Presidential debate, the Dow dropped 733 points, crash landing at 8,578. The reversal is looking more like a massive pump and dump scheme – artificially inflating the market so insiders can get out – than a true economic rescue. The real problem is not in the much-discussed subprime market but is in the credit market, which has dried up. The banking scheme itself has failed. As was learned by painful experience during the Great Depression, the economy cannot be rescued by simply propping up failed banks. The banking system itself needs to be overhauled.

Credit has dried up because many banks cannot meet the 8% capital requirement that limits their ability to lend. A bank’s capital – the money it gets from the sale of stock or from profits – can be fanned into more than 10 times its value in loans; but this leverage also works the other way. While $80 in capital can produce $1,000 in loans, an $80 loss from default wipes out $80 in capital, reducing the sum that can be lent by $1,000. Since the banks have been experiencing widespread loan defaults, their capital base has shrunk proportionately.

The bank bailout plan announced on October 3 involved using taxpayer money to buy up mortgage-related securities from troubled banks. This was supposed to reduce the need for new capital by reducing the amount of risky assets on the banks’ books. But the banks’ risky assets include derivatives – speculative bets on market changes – and derivative exposure for U.S. banks is now estimated at a breathtaking $180 trillion.(2) The sum represents an impossible-to-fill black hole that is three times the gross domestic product of all the countries in the world combined. As one critic said of Paulson’s roundabout bailout plan, "this seems designed to help Hank’s friends offload trash, more than to clear a market blockage."(3)

By Thursday, October 9, Paulson himself evidently had doubts about his ability to sell the plan. He wasn’t abandoning his old cronies, but he soft-pedaled that plan in favor of another option buried in the voluminous rescue package – using a portion of the $700 billion to buy stock in the banks directly. Plan B represented a controversial move toward nationalization, but it was an improvement over Plan A, which would have reduced capital requirements only by the value of the bad debts shifted onto the government’s books. In Plan B, the money would be spent on bank stock, increasing the banks’ capital base, which could then be leveraged into ten times that sum in loans. The plan was an improvement but the market was evidently not convinced, since the Dow proceeded to drop another thousand points from Thursday’s opening to Friday’s close.

One problem with Plan B was that it did not really mean nationalization (public ownership and control of the participating banks). Rather, it came closer to what has been called "crony capitalism" or "corporate welfare." The bank stock being bought would be non-voting preferred stock, meaning the government would have no say in how the bank was run. The Treasury would just be feeding the bank money to do with as it would. Management could continue to collect enormous salaries while investing in wildly speculative ventures with the taxpayers’ money. The banks could not be forced to use the money to make much-needed loans but could just use it to clean up their derivative-infested balance sheets. In the end, the banks were still liable to go bankrupt, wiping out the taxpayers’ investment altogether. Even if $700 billion were fanned into $7 trillion, the sum would not come close to removing the $180 trillion in derivative liabilities from the banks’ books. Shifting those liabilities onto the public purse would just empty the purse without filling the derivative black hole.

Plan C, the plan du jour, does impose some limits on management compensation. But the more significant feature of this week’s plan is the Fed’s new "Commercial Paper Funding Facility," which is slated to be operational on October 27, 2008. The facility would open the Fed’s lending window for short-term commercial paper, the money corporations need to fund their day-to-day business operations. On October 14, the Federal Reserve Bank of New York justified this extraordinary expansion of its lending powers by stating:

"The CPFF is authorized under Section 13(3) of the Federal Reserve Act, which permits the Board, in unusual and exigent circumstances, to authorize Reserve Banks to extend credit to individuals, partnerships, and corporations that are unable to obtain adequate credit accommodations. . . .

"The U.S. Treasury believes this facility is necessary to prevent substantial disruptions to the financial markets and the economy and will make a special deposit at the New York Fed in support of this facility."(4)

That means the government and the Fed are now committing even more public money and taking on even more public risk. The taxpayers are already tapped out, so the Treasury’s "special deposit" will no doubt come from U.S. bonds, meaning more debt on which the taxpayers have to pay interest. The federal debt could wind up running so high that the government loses its own triple-A rating. The U.S. could be reduced to Third World status, with "austerity measures" being imposed as a condition for further loans, and hyperinflation running the dollar into oblivion. Rather than solving the problem, these "rescue" plans seem destined to make it worse.

All the king’s men cannot put the private banking system together again, for the simple reason that it is a Ponzi scheme that has reached its mathematical limits. A Ponzi scheme is a form of pyramid scheme in which new investors must continually be sucked in at the bottom to support the investors at the top. In this case, new borrowers must continually be sucked in to support the creditors at the top. The Wall Street Ponzi scheme is built on "fractional reserve" lending, which allows banks to create "credit" (or "debt") with accounting entries. Banks are now allowed to lend from 10 to 30 times their "reserves," essentially counterfeiting the money they lend. Over 97 percent of the U.S. money supply (M3) has been created by banks in this way.(5) The problem is that banks create only the principal and not the interest necessary to pay back their loans. Since bank lending is essentially the only source of new money in the system, someone somewhere must continually be taking out new loans just to create enough "money" (or "credit") to service the old loans composing the money supply. This spiraling interest problem and the need to find new debtors has gone on for over 300 years -- ever since the founding of the Bank of England in 1694 – until the whole world has now become mired in debt to the bankers’ private money monopoly. As British financial analyst Chris Cook observes:

"Exponential economic growth required by the mathematics of compound interest on a money supply based on money as debt must always run up eventually against the finite nature of Earth’s resources."(6)

The parasite has finally run out of its food source. But the crisis is not in the economy itself, which is fundamentally sound – or would be with a proper credit system to oil the wheels of production. The crisis is in the banking system, which can no longer cover up the shell game it has played for three centuries with other people’s money. Fortunately, we don’t need the credit of private banks. A sovereign government can create its own.

Today’s credit crisis is very similar to that facing Franklin Roosevelt in the 1930s. In 1932, President Hoover set up the Reconstruction Finance Corporation (RFC) as a federally-owned bank that would bail out commercial banks by extending loans to them, much as the privately-owned Federal Reserve is doing today. But like today, Hoover’s plan failed. The banks did not need more loans; they were already drowning in debt. They needed customers with money to spend and to invest. President Roosevelt used Hoover’s new government-owned lending facility to extend loans where they were needed most – for housing, agriculture and industry. Many new federal agencies were set up and funded by the RFC, including the HOLC (Home Owners Loan Corporation) and Fannie Mae (the Federal National Mortgage Association, which was then a government-owned agency). In the 1940s, the RFC went into overdrive funding the infrastructure necessary for the U.S. to participate in World War II, setting the country up with the infrastructure it needed to become the world’s industrial leader after the war.

The RFC was a government-owned bank that sidestepped the privately-owned Federal Reserve; but unlike the private banks with which it was competing, the RFC had to have the money in hand before lending it. The RFC was funded by issuing government bonds (I.O.U.s or debt) and relending the proceeds. The result was to put the taxpayers further into debt. This problem could be avoided, however, by updating the RFC model. A system of public banks might be set up that had the power to create credit themselves, just as private banks do now. A public bank operating on the private bank model could fan $700 billion in capital reserves into $7 trillion in public credit that was derivative-free, liability-free, and readily available to fund all those things we think we don’t have the money for now, including the loans necessary to meet payrolls, fund mortgages, and underwrite public infrastructure.

"Credit" can and should be a national utility, a public service provided by the government to the people it serves. Many people are opposed to getting the government involved in the banking system, but the fact is that the government is already involved. A modern-day RFC would actually mean less government involvement and a more efficient use of the already-earmarked $700 billion than policymakers are talking about now. The government would not need to interfere with the private banking system, which could carry on as before. The Treasury would not need to bail out the banks, which could be left to those same free market forces that have served them so well up to now. If banks went bankrupt, they could be put into FDIC receivership and nationalized. The government would then own a string of banks, which could be used to service the depository and credit needs of the community. There would be no need to change the personnel or procedures of these newly-nationalized banks. They could engage in "fractional reserve" lending just as they do now. The only difference would be that the interest on loans would return to the government, helping to defray the tax burden on the populace; and the banks would start out with a clean set of books, so their $700 billion in startup capital could be fanned into $7 trillion in new loans. This was the sort of banking scheme used in Benjamin Franklin’s colony of Pennsylvania, where it worked brilliantly well. The spiraling-interest problem was avoided by printing some extra money and spending it into the economy for public purposes. During the decades the provincial bank operated, the Pennsylvania colonists paid no taxes, there was no government debt, and inflation did not result.(7)

Like the Pennsylvania bank, a modern-day federal banking system would not actually need "reserves" at all. It is the sovereign right of a government to issue the currency of the realm. What backs our money today is simply "the full faith and credit of the United States," something the United States should be able to issue directly without having to draw on "reserves" of its own credit. But if Congress is not prepared to go that far, a more efficient use of the earmarked $700 billion than bailing out failing banks would be to designate the funds as the "reserves" for a newly-reconstituted RFC.

Rather than creating a separate public banking corporation called the RFC, the nation’s financial apparatus could be streamlined by simply nationalizing the privately-owned Federal Reserve; but again, Congress may not be prepared to go that far. Since there is already successful precedent for establishing an RFC in times like these, that model could serve as a non-controversial starting point for a new public credit facility. The G-7 nations’ financial planners, who met in Washington D.C. this past weekend, appear intent on supporting the banking system with enough government-debt-backed "liquidity" to produce what Jim Rogers calls "an inflationary holocaust." As the U.S. private banking system self-destructs, we need to ensure that a public credit system is in place and ready to serve the people’s needs in its stead.

____________________
1     Michael Hiltzik, Ken Bensinger, “Bank Rescue Plan to Test Capitalism,” Los Angeles Times(October 12, 2008).
2     See Ellen Brown, “It’s the Derivatives, Stupid! Why Fannie, Freddie and AIG All Had to Be Bailed Out,” webofdebt.com/articles (September 18, 2008).
3     Ian Welsh, “Paulson to Use Fannie and Freddie as Conduit to Bail Out His Friends,” firedoglake.com (October 11, 2008).
4     “Commercial Paper Funding Facility: Frequently Asked Questions,” newyorkfed.org (October 14,2007).
5     See Ellen Brown, “Dollar Deception: How Banks Secretly Create Money,” webofdebt.com/articles (July 3, 2008).
6     Chris Cook, “A New Dawn for Iran,” Asia Times (October 9, 2008).
7    See Ellen Brown, “Credit Default Swaps: Derivative Disaster Du Jour,” webofdebt.com/articles (April 10,2008).

Ellen Brown, J.D., developed her research skills as an attorney practicing civil litigation in Los Angeles. In Web of Debt, her latest book, she turns those skills to an analysis of the Federal Reserve and "the money trust." She shows how this private cartel has usurped the power to create money from the people themselves, and how we the people can get it back. Her eleven books include the bestselling Nature’s Pharmacy, co-authored with Dr. Lynne Walker, and Forbidden Medicine. Her websites are http://www.webofdebt.com/ and http://www.ellenbrown.com/.

By now everyone knows that reckless and even predatory mortgage lending provoked the financial meltdown. But bad lending did not stop there. The easy money also fed a corporate buyout binge, with private equity firms borrowing huge sums to buy up public companies and pay themselves big dividends.

The process was much like a homeowner who borrowed big for a house and then refinanced to pull out cash. In corporate buyouts, however, the newly private company was left with the fat loan, while the private equity partners got the cash.

In keeping with the mania of the era, banks lowered their lending standards as they competed fiercely to make buyout loans. Lenders also did not worry much about being repaid, because they made money by slicing and dicing the buyout loans and selling them off in pieces to investors.

All of this means that the country needs to brace for yet another round of trouble: a potentially sharp increase in corporate bankruptcies. This time, government officials and Congress must not be taken by surprise.

So far relatively few companies have gone bust. But that is not necessarily a hopeful sign. Instead, loose lending has very likely allowed many troubled companies to postpone a day of reckoning — but not forever.

Under the lax terms of many buyout loans (deemed “covenant lite”), borrowers could delay payments, say, by issuing i.o.u.’s in lieu of payment or adding the interest to the loan balance rather than paying it. But when the loans come due and need to be repaid or refinanced, terms will no longer be so easy. The likely result will be defaults and bankruptcies.

A rash of corporate bankruptcies would obviously be very bad news for employees and lenders, and for stockholders at troubled public companies, like the carmakers. It could also rock the financial system anew.

As with mortgages, huge side bets have been placed on the performance of corporate debt via derivative securities, like credit default swaps. Derivatives are unregulated, so no one can be sure how widely a big or unexpected default would reverberate through the system.

Various measures indicate elevated default risk at a range of businesses, including retailers, media companies, restaurants and manufacturers. A survey released this month by the Federal Reserve and other regulators is especially sobering.

It looked at $2.8 trillion in large syndicated corporate loans held by American banks at the end of June. Compared with a year earlier, the share of loans rated as problematic had risen from 5 percent to 13.4 percent.

Regulators must continue to monitor possible bankruptcies. Even if they cannot prevent a failure, they can soften its impact by ensuring that it does not come as a shock, further spooking investors.

Congress must prepare to deal with higher unemployment from corporate failures. In the coming lame duck session, lawmakers must extend jobless benefits for people who have exhausted their previous allotment. The next Congress and the next president need to upgrade the nation’s outmoded system of unemployment compensation to cover more Americans.

Congress must also be prepared to investigate large or particularly disruptive bankruptcies to identify both possible unlawful activity and regulatory lapses.

So far, inquiries into the collapses of Bear Stearns, Lehman Brothers and American International Group have been little more than public hazings of corporate executives. What is needed is a serious effort to determine accountability and figure out what reforms are needed to make sure these disasters don’t happen again.

In December, 1912, J. P. Morgan testified before Congress in the so-called Money Trust hearings. Asked to explain how he decided whether to make a loan or investment, he replied, “The first thing is character.” His questioner skeptically suggested that factors like collateral might be more important, but Morgan replied, “A man I do not trust could not get money from me on all the bonds in Christendom.” Morgan’s point was simple but essential: systems of credit depend on trust. When trust is present, money flows smoothly from lenders to borrowers, allowing new enterprises to start, existing ones to expand, and daily business to move along without a hitch. When it’s absent, we find ourselves in a world where lenders hoard capital, borrowers are left empty-handed, and the economy’s gears grind to a halt—a world, in other words, like the one we’re now living in.

A few years ago, banks and other lenders seemed indifferent to risk, as they doled out loans to people with dubious incomes and poor credit records. Today, they are positively paranoid, distrusting even the best borrowers and forcing companies to pay far more interest on money borrowed. The interest rate on the most highly rated two-year corporate bonds has risen by fifty per cent in the past month, even as the interest rate on government bonds has fallen.

Shocking as the current stock-market drops have been, the freezing up of the flow of credit is far more damaging to the health of the U.S. economy. So, during the past few weeks, the Treasury Department and the Federal Reserve have been desperately trying to fight that freeze. Scarcely a day goes by without some dramatic new initiative, even as market chaos makes each new idea soon seem like ancient history. (It’s been just over a week since the Treasury’s plan to buy seven hundred billion dollars’ worth of “toxic assets” became law, but already it feels like a year.) Last week, in a potentially crucial move, the Fed announced that it would start buying billions of dollars in commercial paper—which means that it will be issuing short-term unsecured loans to corporations. The Fed has historically been the lender of last resort to banks. Now it’s becoming the lender of last resort to everyone.

Commercial paper is the name for short-term promissory notes that companies sell to raise money for daily operations, to meet payroll, and to bridge the gap between when they spend and when they get paid, while keeping their own cash in higher-yield investments. Commercial paper is not a new innovation—Goldman Sachs actually started as a commercial-paper firm, in the late nineteenth century—but it has become essential in day-to-day business in the U.S. Since 1980, annual commercial-paper issuance has gone from $124 billion to $1.6 trillion. Most of these loans are unsecured—companies don’t put up collateral but simply promise to pay the loans back out of cash flow—so only well-established, financially solid companies can tap the commercial-paper market.

Because commercial-paper loans are short-term and are made only to companies with sterling credit ratings, they’ve always been assumed to be practically riskless, and lenders (most notably money-market funds) have been willing to lend at low interest rates. But the past year has called into question the very idea of a low-risk loan. Lehman Brothers, after all, still had an A2 credit rating when it went under, taking down with it billions in commercial paper. Since its failure, lenders have adopted a gimlet-eyed approach to everyone, making it hard for key companies to perform basic transactions, and thereby exacerbating the market panic. A company like A. T. & T. is hardly likely to go bankrupt in the foreseeable future, but, after Lehman’s collapse, lenders were so skittish that A. T. & T. couldn’t get commercial-paper loans that lasted longer than overnight.

The fear that has overpowered lenders is not just about the current market chaos. It also reflects their lack of faith in the models and systems that they rely on to evaluate risk. For Morgan, that process of evaluation was all about relationships. In the modern financial system, by contrast, risk evaluation involves two things: impersonality and outsourcing. Personal judgments about the reliability of a borrower—the sort of judgment that Morgan, or a small-town banker, would make before issuing a loan—have been replaced by mathematical models. And lenders have delegated much of the responsibility for evaluating borrowers to other players, such as credit-rating agencies. In many cases, an AA rating was all a company needed to get a loan.

There’s no doubt that this system has had huge benefits. It has made it easier for money to connect lenders and borrowers. It has removed the kinds of personal bias that kept capital in the hands of people whom men like J. P. Morgan approved of. And it has vastly expanded the amount of lending as well. But all those benefits have come at an exorbitant price. The problem with an impersonal system is that when the models fail, and when companies’ ratings become suspect, everything is called into question. Lenders can’t fall back on their own judgments of a specific company or individual, because such judgments aren’t part of their typical decision-making process. Instead, they’ve adopted a deep-seated distrust of all borrowers, even financially secure ones. If the Fed is now taking corporate I.O.U.s, it’s because everyone else is acting according to that old motto: In God we trust - all others pay cash.

In der Geschichte des US-Finanzmarkts haben Spekulanten und Betrüger immer wieder für gefährliche Turbulenzen gesorgt, die Anleger in den Ruin trieben.

In seinen besten Tagen genoss Richard (Dick) Fuld Heldenstatus. Als im September 2001 die Türme des World Trade Center einstürzten und die Wall Street mit Schutt und Asche überzogen, blieb der Chef der damals viertgrößten US-Investmentbank Lehman Brothers ganz cool.

Einen Tag nach dem Desaster, als in der Lobby des schwerbeschädigten Lehman-Bürohauses noch die Leichen aufgebahrt wurden, versammelte Fuld seine traumatisierten Mitarbeiter in der Bankdependance in Jersey City. Wie ein General gab er den Tagesbefehl aus, die Büros so herzurichten, dass möglichst viele Mitarbeiter einen Arbeitsplatz finden. Die wenigen Telefonleitungen teilte er den Bankern zu, die den meisten Profit heranschaffen würden. Zwei Tage später wurde ein Hotel in Midtown angemietet und in Büros umgestaltet. Als die New Yorker Börse am 17. September 2001 wieder eröffnet wurde, war Lehman Brothers bereit.

Im größten Chaos setzte Fuld auf Ordnung und Disziplin. Selbst die Kleiderordnung wurde revidiert. Dunkle Anzüge und weiße oder hellblaue Hemden für die Männer, dezente Businesskostüme für die Frauen waren Pflicht, auch an den Freitagen, an denen sonst eher Freizeit-Look angesagt war. "Wer sich nachlässig anzieht, arbeitet auch schlampig", lautete Fulds Credo.

Diese Pedanterie stand in scharfem Kontrast zu seiner Mentalität und seinem Temperament. Er galt als der wildeste, aber auch der härteste Chef der Wall-Street-Firmen. Kein Risiko war ihm zu hoch, kein Deal zu mühsam. Gorilla haben sie ihn genannt, wegen seiner überlangen Arme und weil er auf Kritik mit Grunzen und Fluchen reagierte und so lange wütete, bis er seinen Widersacher besiegt hatte. Er war der Meister eines Universums, das sich durch bedingungslose Loyalität und Teamgeist seiner 28.000 Söldner auszeichnete.

Und er war auch der Erste, wenn es an die Verteilung der Jahresbezüge ging. 2007 waren das mehr als 34 Millionen Dollar, der größte Teil wurde in Aktienoptionen beglichen. Seit seiner Berufung an die Spitze der Investmentbank 1993 hat Fuld fast 500 Millionen Dollar kassiert. Das reichte, um sich den in Wall-Street-Kreisen angemessenen Lebensstil leisten zu können: ein weitläufiges Anwesen im Nobelvorort Greenwich in Connecticut, Limousinen und eine umfangreiche Sammlung zeitgenössischer Kunst, für deren Auswahl Fuld-Gattin Kathy verantwortlich ist. Mrs. Fuld kennt sich als Kuratorin des renommierten Museum of Modern Art in diesem Bereich bestens aus.

Auf das behagliche Leben an der Schlossallee ist jetzt ein dunkler Schatten gefallen. Seit 15. September ist Lehman Brothers pleite, viele Mitarbeiter stehen vor dem Nichts, ihre Aktienoptionen sind wertlos geworden, und die Frau des Chefs verkauft einen Teil der Bildersammlung zu einem Garantiepreis zwischen 15 und 20 Millionen Dollar. Diesen Betrag hat das Auktionshaus "Christie's", das die Werke von Willem de Kooning und Agnes Martin unter den Hammer bringt, zugesagt - unabhängig vom Verlauf der Auktion. Härter hat es Fulds zweiten Mann, Joe Gregory, getroffen. Der einst designierte Kronprinz hatte sein Luxusleben standesgemäß auf Pump finanziert, nun hat er offenbar Zahlungsprobleme. Sein Anwesen in den New Yorker Hamptons wird für gut 32 Millionen Dollar zum Verkauf angeboten.

Auch um Fulds Ruf und den seiner Kollegen ist es nicht mehr gut bestellt: Sie stehen am Pranger. Durch den schwunghaften Handel mit faulen Immobilienkrediten haben die Investmentbanker eine der größten Finanzkrisen in der jüngsten Geschichte ausgelöst. Millionen Hausbesitzer und Kleinanleger werden um ihre Existenz oder ihre Ersparnisse gebracht. Bankpleiten drohen und eine tiefe Rezession mit steigenden Arbeitslosenzahlen und weiteren Konkursen. Das große Monopoly, in dem selbst mickrige Hütten zu Höchstpreisen auf Pump versilbert werden konnten, ist vorbei. Die Immobilienblase, deren weltweite Dimension nur noch in Billionen beziffert wird, ist geplatzt.

Den feinen Herren von der New Yorker Wall Street, die den Immobilienkreditschrott für sich vergolden und die enormen Risiken an weniger gewandte Investoren durchreichen wollten, wird der Abschied zwar noch gut honoriert. Aber ganz ungeschoren kommen auch sie nicht davon. So räumte James Cayne, Chef der Investmentbank Bear Stearns, dessen Institut als Erstes in den Sog der Subprime-Krise geraten war, bereits Anfang 2008 sein Büro. Der Bankboss, der als leidenschaftlicher Spieler selbst auf dem Höhepunkt der Krise bisweilen seine Zeit lieber am Bridgetisch verbrachte als im Büro, verzichtete auf seinen Jahresbonus für das Krisenjahr 2007. Dafür verkaufte er noch schnell sein arg zusammengeschrumpftes Bear-Stearns-Aktienpaket für gut 60 Millionen Dollar. Sein Nachfolger Alan Schwartz verschleuderte die Investmentbank an den Konkurrenten JP Morgan und bekam, als er ging, 35 Millionen Dollar.

Den größten Reibach aber machte der Chef von Merrill Lynch, als er Anfang dieses Jahres seine Bürosuite bei dem Investmenthaus räumte. Er erhielt ein Abschiedspaket aus Aktien, Optionen und Pensionsverpflichtungen in Höhe von 160 Millionen Dollar und die Bezüge für 2007 von rund 46 Millionen Dollar. Auch bei den anderen Pleitekandidaten, die in letzter Minute vor dem Exitus gerettet werden konnten, kassierten die Chefs ordentlich beim Abschied.

Auf 2007 dürften Wall-Street-Trader und Investment-Broker noch lange wehmütig zurückblicken. Dabei war es noch nicht einmal das beste Jahr: Im Vergleich zu 2006 waren die durchschnittlichen Sonderzahlungen bereits um knapp fünf Prozent gekürzt worden.

Die Geschäfte liefen nicht mehr rund. Dennoch erreichten die Boni und Prämien an die Mitarbeiter der sieben größten Wall-Street-Banken die bisher einmalige Quote von 60 Prozent der Gewinne.

Im Schnitt erhielt jeder Mitarbeiter dieser New Yorker Geldbranche eine Einmalzahlung von rund 180.000 Dollar. Lloyd Blankfein, Chef des Branchenprimus Goldman Sachs, bekam allein 70 Millionen Dollar aus dem 20-Milliarden-Dollar-Topf, der die Zahlungen für alle Goldman-Sachs-Mitarbeiter enthielt. Bei Lehman wurden 2007 rund 9,5 Milliarden für die Kompensation der Belegschaft bereitgestellt.

Nicht erst im Licht der schweren Krise, der dramatischen Kursverluste und des drohenden Kollapses der westlichen Kapitalmärkte empfinden viele Amerikaner diese Summen, auch wenn sie größtenteils in Aktienoptionen bereitgestellt wurden, als astronomisch, maßlos, obszön.

Wall Street steht für Gier und Verschwendung, und solche Exzesse sind systemimmanent. Immer wieder sorgten Abenteurer, Zocker und Betrüger für Turbulenzen an den Kapitalmärkten. Mit Kreativität und krimineller Energie haben sie neue Modelle, Anlageformen und Finanzierungen gefunden, die schnelles Geld versprachen. Mal waren es neue Produkte, technologische Errungenschaften, die einen Boom auslösten, mal komplizierte Finanzwetten und dubiose Wertpapiere, die die Phantasie der Spekulanten und Anleger beflügelten.

Im Jahr 1907 wurde ein Börsencrash in New York durch Spekulationsgeschäfte ausgelöst. Der Präsident des renommierten Bankhauses Knickerbocker Trust, Charles Tracy Barney, war in den Versuch verwickelt, den Preis der United-Copper-Aktien zu steigern, indem seine Mitstreiter mit geliehenem Geld deren Anteile aufkauften. Doch das Spekulationsgeschäft scheiterte. Im Oktober 1907 verweigerte die National Bank of Commerce in New York die Annahme von Knickerbocker-Trust-Schecks und löste eine Panik unter den Kunden aus, Barneys Bank ging pleite. Barney beging - wie einige seiner Kunden, die er ruiniert hatte - Selbstmord.

Die Pleite des Trusts führte zu schweren Kursstürzen an der New Yorker Börse. Der wenige Jahre zuvor eingeführte Dow-Jones-Index verlor zwischen Januar 1906 und November 1907 fast die Hälfte seines Werts.

Dem Niedergang folgte eine langsame Erholung und in der Mitte der zwanziger Jahre eine bis dahin beispiellose Hausse. Angetrieben wurde der Börsenboom diesmal durch technische Innovationen wie Eisenbahnen, Autos und Flugzeuge. Die Aktien der Gesellschaften, deren Produkte die amerikanische Gesellschaft mobil machten, stiegen auf immer neue Höchststände. Zunächst waren es bürgerliche Kreise, die ihr Geld in diese Wertpapiere investierten, doch gegen Ende der zwanziger Jahre drängten auch weniger betuchte Anleger wie Ladenbesitzer, Handwerker, Arbeiter und Angestellte in den Markt.

Für die Börsenmakler war die neue unbedarfte Klientel eine wahre Goldgrube. Sie gewährten großzügig Kredite, damit die unerfahrenen Investoren mehr Aktien kaufen konnten. Die Banken refinanzierten die Makler und hielten so die florierende Geldmaschine in Schwung. Im August 1929 konnten sich klamme Anleger mehr als zwei Drittel des Nennwertes der Wertpapiere pumpen. Das gesamte US-Kreditvolumen hatte 8,5 Milliarden Dollar erreicht und lag damit über der sich im Umlauf befindlichen Geldmenge. Der Dow-Jones-Index erreichte Anfang September 1929 den Höchststand von mehr als 380 Punkten. Viele Profis begannen sich aus dem Markt zurückzuziehen.

Am 24. Oktober kam es dann zum ersten Einbruch an den Börsen. Bei Rekordumsätzen von 12,9 Millionen Aktien begannen die Kurse auf breiter Front zu fallen. Die Banken forderten die Kredite zurück, um selbst zahlungsfähig zu bleiben, und trieben damit Börsenmakler und Kleinanleger gleichermaßen in die Pleite. Es war der Anfang der Großen Depression, jener Weltwirtschaftskrise, die auch in Europa für Arbeitslosigkeit und Armut sorgte.

Rund 50 Jahre später brachen dann erneut goldene Zeiten für Hasardeure und Spekulanten an der Wall Street an. Die politischen und gesellschaftlichen Rahmenbedingungen konnten besser nicht sein. Die Republikaner hatten die Regierung übernommen, und mit Ronald Reagan saß ein überzeugter Kapitalist und Anhänger des wirtschaftspolitischen Laisser-faire im Weißen Haus. Selbst in die Redaktionen der überregionalen Tageszeitungen und Wirtschaftsmedien waren junge Betriebswirtschaftler, Volkswirte und Finanzmarktexperten eingezogen. Sie berichteten lieber über das Geschehen an den Kapitalmärkten, über die tollkühnen Zocker und die vielfältigen Chancen, schnell reich zu werden, als über die Fabriken der Mainstreet.

Investmentbanker und Spekulanten wie Michael Milken, Ivan Boesky oder Dennis Levine wurden die neuen Stars der Branche. Bereits während seines Studiums an der Berkeley University und an der renommierten Wharton-School hatte Milken sich mit hochverzinsten und riskanten Anleihen beschäftigt. Diese Bonds wurden von den Anlegern bisher trotz der hohen Zinsen als Junkbonds, also Schrottanleihen, verschmäht, weil sie in den sechziger Jahren vor allem von Pleiteunternehmen ausgegeben wurden.

Doch Milken konnte nachweisen, dass diese Papiere überdurchschnittlich gute Renditen brachten. Er wurde der Spezialist für die Junkbonds bei der Investmentbank Drexel Burnham Lambert und erzielte Kapitalrenditen von bis zu 100 Prozent.

Sein Einsatz zahlte sich aus: Milken verdiente 1976 fünf Millionen Dollar. Zehn Jahre später war sein Jahreseinkommen auf rund 500 Millionen Dollar gestiegen. Er hatte die Anlagemodelle weiterentwickelt und bot diese Bonds zur Finanzierung von Unternehmensübernahmen an. Merger & Acquisition, also Fusion und Kauf, hieß die Parole, die Milliarden Dollar Anlegerkapital an die Börsen brachte.

Die Kosten für die sogenannten Leveraged Buyouts - auf Pump und mit Schrottanleihen finanzierte Aufkäufe von Firmen - trug in der Regel das Übernahmeopfer, das - um den Schuldendienst leisten zu können - reorganisiert, umstrukturiert und filetiert werden musste. Die Zeche zahlten die Mitarbeiter, von denen viele ihren Job verloren. Dennoch wurde dieses Finanzierungsmodell schnell sehr populär. Drexel Burnham Lambert stieg zum zeitweise profitabelsten Investmentkonzern an der Wall Street auf.

Der bekannteste Spekulant jener Jahre war Ivan Boesky. Der Sohn eines russischen Emigranten und Restaurantbesitzers aus Detroit drehte bald das ganz große Rad an der Wall Street. Seine Karriere hatte er als Buchhalter in einer Rechtsanwaltskanzlei begonnen. Durch die Ehe mit der Tochter eines großen Immobilienunternehmers in New York erhielt er Zugang zu Kapital und Know-how. Boesky begann, Aktien von Unternehmen zu kaufen, die als Übernahmekandidaten gehandelt wurden. Er stieg zu niedrigen Kursen ein und verkaufte, sobald die Kurse nach einem Übernahmeangebot kräftig gestiegen waren. Die Differenz war sein Gewinn.

Sein Modell zur persönlichen Vermögensbildung war nicht besonders originell, er setzte wie die meisten der Börsenspekulanten auf steigende Kurse. Doch er war rücksichtsloser als alle anderen, er baute sich ein engmaschiges Netz von Informanten auf, die ihm rechtzeitig steckten, welche Deals anstanden, so dass er vor allen anderen einsteigen und besonders hohe Gewinne realisieren konnte. Dieser Insiderhandel war schon damals illegal und wurde streng geahndet. Doch Ivan der Schreckliche, wie Boesky an der Wall Street genannt wurde, scherte sich nicht um die Gesetze.

Sein wichtigster Zuträger war der Investmentbanker Dennis Levine, der für die Investmentbank Drexel Burnham Lambert diese lukrativen Deals vorbereitete und im Auftrag von Kunden geeignete Übernahmekandidaten suchte. Levine erhielt für seine Informationen, die er seinem Auftraggeber telefonisch übermittelte, stattliche Provisionen.

Den Löwenanteil behielt Boesky. Er war auch nicht zimperlich, seinen neugewonnenen Reichtum zur Schau zu stellen. Zu seinem Lebensstil gehörten protzige Limousinen, Hubschrauber, Häuser und Bürofluchten in den teuersten Lagen der Stadt. Boesky wurde zum Vorbild vieler Wirtschaftsstudenten, denen er bei Ansprachen und Vorlesungen dringend empfahl, gierig zu sein. Denn "Habgier", so lautete seine Maxime, "ist gut." Man könne "gierig sein und sich gut fühlen".

Sein Luxusleben und seine kriminellen Machenschaften lieferten die Vorlage für die Hollywood-Produktion "Wall Street" von Oliver Stone. Als der Film in die Kinos kam, war Boeskys Geldmaschine allerdings bereits abgestellt. Der New Yorker Staatsanwalt Rudolph Giuliani ermittelte gegen die Spekulanten. Levine geriet als Erster ins Visier der Justiz. Boesky gelang es, einen Deal mit den Gesetzeshütern zu schließen. Er wurde zum Kronzeugen, der den Behörden half, den größten Insiderskandal der amerikanischen Börsengeschichte aufzudecken.

Boesky gestattete den Ermittlern, seine Telefone abzuhören und Gespräche, die er mit seinen Informanten führte, mitzuschneiden. Dafür durfte er seine Geschäfte weiterführen. Boesky konnte sogar noch Wertpapiere im Wert von 400 Millionen Dollar verkaufen. 100 Millionen Dollar musste er zwar als Geldstrafe abgeben, doch insgesamt kam er gut weg. Von der Haftstrafe von dreieinhalb Jahren musste er zwei Jahre absitzen.

Im Zuge der Ermittlungen gegen Levine und mit Boeskys Hilfe kamen die Ermittler 1989 auch Milken, dem Superstar des Junkbond-Markts, auf die Schliche. Er wurde wegen Insiderhandels und Beteiligung an einer kriminellen Vereinigung zu hohen Geldstrafen und einer Haftstrafe von zehn Jahren verurteilt, musste allerdings nur rund zwei Jahre absitzen. Wie Boesky und Levine erhielt auch Milken ein lebenslanges Berufsverbot, er darf nicht wieder im Wertpapierhandel arbeiten. Sein Rat als Investmentbanker ist dennoch weiter gefragt. Sein Vermögen wird noch immer auf 2,5 Milliarden Dollar geschätzt.

Nach dem Abgang des Börsenstars ging dem Fusionshype die Luft aus. Im Oktober 1987 sorgte der größte Kurssturz an der New Yorker Börse für zusätzliche Ernüchterung. Um fast 23 Prozent sackte der Dow-Jones-Index an einem einzigen Tag ab. Anleger, Notenbanker und Politiker in den westlichen Industriestaaten hielten die Luft an. Parallelen zum Crash von 1929 wurden gezogen: War es wieder so weit? Doch die Regierungen reagierten schnell. Die Zentralbanken überschwemmten die Märkte mit frischem Geld, der amerikanische Zentralbankchef Alan Greenspan senkte die Zinsen. An der Wall Street wurde noch einige Monate gespart, Investmentbanker verloren ihre Jobs, der eine oder andere Porsche und Ferrari wurde verkauft. Dann ging die Party weiter.

An der Wall Street waren nun Gründung und Börseneinführung neuer Unternehmen lukrative Betätigungsfelder. Das Internet heizte die Phantasien der Hasardeure und Spekulanten an. Bis zum Ende der Neunziger-Dekade hatte die neue Börseneuphorie Millionen von Menschen infiziert. Banken und Broker verdienten sich eine goldene Nase.

Die wirklich Großen der Freibeuter-Branche legten sich sogar mit Regierungen an. Der Finanzier George Soros zwang 1992 mit seiner Spekulation gegen das britische Pfund sogar die Notenbank des Königreichs in die Knie. Großbritannien musste seine Währung abwerten und aus dem europäischen Währungsverbund ausscheiden. Soros verdiente über eine Milliarde Dollar.

Andere Spekulanten stürzten mit gezielten Attacken auf den thailändischen Baht die Wirtschaft des Schwellenlandes in eine schwere Rezession und lösten die asiatische Krise aus. Dass auch Staaten wie Südkorea, Malaysia und Vietnam in den Abwertungsstrudel gezogen wurden, erhöhte in diesen Kreisen eher die Spannung und den Profit. Die wachsende Not der Menschen in den asiatischen Ländern schlug sich in den goldgeränderten Bilanzen der Fondsgesellschaften nicht nieder, sie spielte auch keine Rolle bei der Berechnung der Boni und Prämien für die Manager. Und es gab auch kaum Appelle der westlichen Regierungen an Investmentbanker, diese gefährlichen Spiele zu unterlassen.

Erst als 1998 bekannt wurde, dass die amerikanische Fondsgesellschaft LTCM Milliarden Dollar an den internationalen Anleihemärkten verspekuliert hatte, griffen US-Regierung und Notenbank ein. Sie organisierten in einer Nacht-und-Nebel-Aktion ein Rettungspaket privater Banken, das Topmanagement wurde entlassen.

An den Aktienmärkten ging indes das Milliarden-Monopoly weiter. Bis zum Jahr 2000, als die Kurse zu bröckeln begannen. Es gab diesmal keinen Schwarzen Freitag oder Montag oder Dienstag, sondern einen Absturz auf Raten. Weltweit wurden Milliarden an Börsenwert vernichtet, darunter auch die Ersparnisse von Millionen von Rentnern und Arbeitern, die sich auf die Verheißungen von Banken und Brokern verlassen hatten. Vielen Profis blieb dagegen Zeit für den geordneten Rückzug.

Erst Anfang 2003, Monate nach den Terrorangriffen auf New York und Washington, begannen sich die Börsen wieder zu erholen. Doch da hatten gewiefte Investmentbanker schon ein neues Eldorado entdeckt: den Handel mit ungesicherten Immobilienkrediten, den sogenannten Subprime-Loans. Eine fabelhafte Geldmaschine: Die Hypothekenbanken schrieben die Kreditverträge, zahlten das Geld und refinanzierten sich durch den Verkauf der Forderungen an Investmentbanken; die wiederum packten einen Schwung dieser Hypotheken zusammen, zerlegten sie in kleinere Tranchen und verkauften sie als ungesicherte Anleihen an Großinvestoren und Kleinanleger.

Als die Immobilienblase platzte, blieben Anleger, aber auch die Investmentbanker und die professionellen Investoren wie etwa die IKB oder andere Banken auf ihrer verdorbenen Ware sitzen. Jetzt greift die amerikanische Regierung durch: Die Freibeuter im amerikanischen Geldgewerbe, die Investmentbanken, die das Gemetzel überlebten, müssen sich künftig den gleichen Kontrollen und Regeln unterwerfen wie die Geschäftsbanken.

"Wall Street wird nicht mehr das sein, was es einmal war", klagt ein Betroffener.

Doch gemach: Der Turbokapitalismus lebt weiter. Längst gibt es neue Spekulanten im Zocker-Paradies, die von der gegenwärtigen Krise profitieren. Der New Yorker Spekulant John Paulson etwa verdiente 2007 astronomische 3,7 Milliarden Dollar. Er hatte seit 2005 auf den Zusammenbruch des Subprime-Marktes gesetzt.

Panik ergriff die New Yorker Wall-Street-Broker im Oktober 1929 (o.) - zwei Monate, nachdem der Dow Jones den damaligen Höchststand von 380 Punkten erreicht hatte. Die Profis hatten sich danach aus dem überhitzten Kreditmarkt zurückgezogen.

1999
Laxere Richtlinien bei der Kreditvergabe und die Niedrigzins-Politik der US-Notenbank Federal Reserve sorgen für ein Überangebot an billigem Geld. Die Banken können selbst Kleinstverdienern plötzlich den Traum vom Eigenheim erfüllen, die sich ein eigenes Haus sonst nie leisten könnten. Die zu erwartenden Wertsteigerungen der Häuser lassen das Risiko zunächst denkbar gering erscheinen. Auch ein anderes Problem lassen die Verantwortlichen vollkommen außer Acht: Die Zinsen sind - anders als in Deutschland üblich - nur für kurze Zeit festgeschrieben. Für den Fall, dass die Zinsen wieder steigen, droht die Gefahr, dass die Schuldner die Raten nicht mehr bezahlen können.

2000
Die Banken ersinnen eine scheinbar geniale Methode, ihr Risiko aus den Immobilienkrediten zu reduzieren. Sie bündeln sie zu Fonds und verkaufen die Anteile daran. Schützenhilfe dabei leisten Rating-Agenturen, die den Derivaten ein sehr gutes Zeugnis ausstellen. Dank der hohen Rendite findet das Angebot reißenden Absatz, auch bei Banken, Versicherungen und Investmentfonds in Europa, die die Papiere dann an Privatkunden weiterreichen. Die Gefährlichkeit dieser Derivate lässt sich auch für Skeptiker kaum erahnen - sie müssten jeden einzelnen Kreditnehmer überprüfen und eine Gesamtbewertung aufstellen. Angesichts der Vielzahl der gebündelten Kredite wäre das ein aussichtsloses Unterfangen.

2004
Die US-Notenbank macht sich zunehmend Sorgen wegen der hohen Inflationsrate und erhöht ab Juni 2004 kontinuierlich die Leitzinsen. Damit aber setzt sie eine Kettenreaktion in Gang: Wegen der variablen Zinssätze steigen die Hypothekenzinsen unmittelbar mit. Viele Hausbesitzer sind quasi über Nacht mit einer Zinsbelastung konfrontiert, die sie nicht bezahlen können. Selbst Gutverdiener sind betroffen, die in Zeiten des Booms den vermeintlichen Wertgewinn ihrer Häuser für neue Kredite verpfändet haben. Der dramatische Anstieg der Zwangsversteigerungen kommt überdies zur Unzeit: Der Immobilienmarkt befindet sich im Abschwung und bricht infolge des Überangebots nun vollständig in sich zusammen.

2007
Die Zahl der notleidenden Kredite steigt rasant an, Banken, Versicherungen und Investmentfonds sind gezwungen, hohe Beträge abzuschreiben. Dutzende Baufinanzierer gehen Pleite. Mit dem Zusammenbruch der britischen Großbank Northern Rock schwappt die Welle nach Europa. In Deutschland gerät die Mittelstandsbank IKB in Schieflage. Binnen weniger Monate schließlich erwischt es dann eine ganze Reihe schwerer Kaliber: Bear Stearns, Lehman Brothers und die Hypothekenbanken Fanny Mae und Freddie Mac. Plötzlich wird allen Beteiligten bewusst, wie heiß die Papiere sind, auf denen sie sitzen. Die Folge: Keine Bank traut mehr der anderen, selbst Tageskredite werden plötzlich verweigert. Die Notenbanken versuchen mit Milliardensummen, den Geldkreislauf in Gang zu halten.

Frühjahr 2008
Spektakuläre Aufkäufe der notleidenden Banken beruhigen die Finanzwelt nur für kurze Zeit. JP Morgan übernimmt Bear Stearns und Teile der Washington Mutual für einen symbolischen Preis. Die Bank of America kassiert Merrill Lynch. In Deutschland fällt die Sachsen LB an die LBBW. Die Regierungen müssen in jedem Fall für viele Milliarden bürgen, damit das Geschäft zustande kommt. Doch alle Beteiligte wissen: Das unkalkulierbare Risiko in den Büchern ist damit keineswegs ausgeräumt. Niemand weiß, was noch kommt.

Herbst 2008
Die Angst vor den unkalkulierbaren Risiken erfasst die Finanzbranche weltweit. Ein Banken-Crash reiht sich an den anderen. Vor allem der Fall des US-Investmenthauses Lehman Brothers erschüttert die Märkte. Der massive Wertverlust an den Börsen bringt auch bis dahin gesund erscheinende Banken in akute Finanznot. Nach heftigen Diskussionen bringt die US-Regierung ein Rettungspaket über 700 Milliarden Dollar auf den Weg. Das Geld soll bereitstehen, um faule Kredite aufzukaufen und die lähmende Angst zu vertreiben. Die Europäer ziehen mit eigenen Initiativen nach. Berlin lanciert ein Rettungspaket, London beginnt Banken zu verstaatlichen. Island steht derweil kurz vor dem Staatsbankrott. Zusehends trifft die Finanzkrise auch die Realwirtschaft. Die Börsen erleben weltweit finstere Wochen mit Kursstürzen. Unternehmen melden Gewinneinbrüche. Die Kreditklemme bedroht den Mittelstand.

6 Amerika im wahljahr: LAND DER EXTREME
Amerika fasziniert, Amerika stößt ab. Kalt lässt die Weltmacht kaum jemanden. Die Frage, wer am 4. November zum 44. Präsidenten gewählt wird, beschäftigt die Menschen rund um die Erde. Denn für die meisten Probleme der Welt sind die USA verantwortlich - im Guten wie im Schlechten. Von Gerhard Spörl

15 Amerika im wahljahr: "DIE STIMMUNG WAR NOCH NIE SO SCHLECHT"
SPIEGEL-Gespräch mit dem amerikanischen Historiker Eric Foner über Amerikas beschädigtes Selbstvertrauen, die Verquickung von Religion und Politik und die Frage, wie präsent die Sklaverei im kollektiven amerikanischen Gedächtnis ist

23 Usa - aufstieg und krise einer weltmacht: 1 DIE GRÜNDER- ZEIT
Das Amerika der ersten hundert Jahre war ein Land blutiger Konflikte. Die Siedler aus Europa verdrängten die Indianer und bekämpften den Einfluss der britischen Krone. Am schwersten jedoch belastete die junge Nation die Sklaverei. Im amerikanischen Bürgerkrieg starben Hunderttausende.

24 Die gründerzeit: KAMPF DER KULTUREN
Anfangs zögerten viele, aus Europa in den neuentdeckten fernen Kontinent aufzubrechen, den sie Amerika nannten. Als die Kolonisten dann kamen, brachten sie den Ureinwohnern Tod und Verderben. Die Gründung der USA ist eine Geschichte der grausamen Verfolgungen, verpassten Chancen und großartigen Aufbauleistungen. Von Wilfried Mausbach

30 Dokument: "STREBEN NACH GLÜCK"
Auszug aus der Unabhängigkeitserklärung vom 4. Juli 1776

37 Die gründerzeit: "WIR WATETEN IN BLUT"
Er war der erste totale Krieg der Moderne: Rund 620 000 Soldaten starben im amerikanischen Bürgerkrieg - mehr als die USA später in den beiden Weltkriegen verlieren sollten. Mit dem Sieg des Nordens über den Süden ging die Sklaverei zu Ende, doch die Afroamerikaner waren bald schon neuen Diskriminierungen ausgesetzt.

42 Nahaufnahme: SCHÜSSE AUS DER KAFFEEMÜHLE
Im Bürgerkrieg wurden Maschinengewehr und U-Boot erstmals erfolgreich eingesetzt.

48 Die gründerzeit: WESTWÄRTS, HO!
Wo liegt der Wilde Westen? Sicher ist: Wenn Ureinwohner und Einwanderer aufeinandertrafen, gab es irgendwann Tote. Sogar Hollywoods populärste Western-Kulisse, Monument Valley, war einst Schauplatz blutiger Konflikte.

55 Usa - aufstieg und krise einer weltmacht: 2 AMERIKA ALS SUPERMACHT
Seit dem Zweiten Weltkrieg sind die USA die führende Macht der westlichen Welt. Europa hat davon profitiert, anderswo ist der amerikanische Einfluss eher verhasst. Mit US-Unterstützung wurden auch frei gewählte Regierungen gestürzt, und die Wall Street führt die Ökonomie weltweit an den Abgrund.

56 Amerika als supermacht: GLANZ UND ELEND
Die Leitlinien der US-Außenpolitik folgten meist den Wirtschaftsinteressen des Landes. Nun zwingen die Krise an der Wall Street, der Aufstieg Asiens und die neue Macht der Ölstaaten Washington zu neuer Bescheidenheit. Von Gabor Steingart

65 Amerika als supermacht: DIE ZOCKER VON DER WALL STREET
In der Geschichte des US-Finanzmarkts haben Spekulanten und Betrüger immer wieder für gefährliche Turbulenzen gesorgt, die Anleger in den Ruin trieben. Von Christiane Oppermann

70 Amerika als supermacht: DIE PATRIOTISMUSFALLE
Wie kein anderer Ort steht My Lai für das Grauen des Vietnam-Kriegs. Das Massaker, verübt von jungen GIs, sei ein Verbrechen im "Stil der Nazis", schrieb 1969 der Journalist Seymour Hersh. Das amerikanische Selbstbild, stets nur für das Gute zu kämpfen, blieb dennoch unversehrt.

74 Amerika als supermacht: PUTSCH DER KÖNIGSKINDER
Zwei Jahrzehnte lang stellten die Bushs und Clintons abwechselnd den Präsidenten. Dann meldeten sich die Kennedys zurück und störten die Machtbalance.

80 Amerika als supermacht: REVOLUTION DER JURISTEN
Die Furcht vor Tyrannei ist der alles bestimmende Gedanke der amerikanischen Verfassung, und der wirkt bis heute, auch wenn es um die Gefangenen von Guantanamo geht.

85 Usa - aufstieg und krise einer weltmacht: 3 DIE AMERIKANISCHE GESELLSCHAFT
Rätsel Amerika: Ein Schwarzer ist Präsidentschaftskandidat, aber nicht alle Veteranen der Bürgerrechtsbewegung sehen das als ihren Erfolg. Die Wirtschaft kriselt, aber linke Parteien hatten noch nie eine Chance. Und Religion ist im Alltag so wichtig wie in keinem anderen westlichen Land.

86 Die amerikanische gesellschaft: OBAMAS TRAUM
Vor 45 Jahren kämpfte Martin Luther King gegen die Diskriminierung der Schwarzen. Heute könnte ein Afroamerikaner Präsident werden, aber zwischen den alten Kämpen der Bürgerrechtsbewegung und dem jungen Barack Obama liegen manchmal Welten. Von Gregor Peter Schmitz

91 Dokument: "ICH HABE EINEN TRAUM"
Auszug aus Martin Luther Kings Rede auf dem "Marsch nach Washington" am 28. August 1963

96 Ortstermin: DER PARK DER HOFFNUNG
Wer am Wochenende der Metropole Washington entfliehen will, fährt gern in den Shenandoah Nationalpark. Angelegt wurde er vor allem von Arbeitslosen zu Zeiten der Großen Depression.

98 Die amerikanische gesellschaft: ROASTBEEF UND APPLE PIE
In den USA gab es nie eine linke Volkspartei. Einer der Gründe: Die amerikanische Gesellschaft kannte, abgesehen von der Sklaverei, keine Klassenunterschiede. Arbeitskräftemangel half schon bei Beginn der Industrialisierung, höhere Löhne durchzusetzen. Der Lebensstandard amerikanischer Arbeiter lag deutlich über dem ihrer europäischen Kollegen.

101 Die amerikanische gesellschaft: GOTT IN DER NEUEN WELT
Die Evangelikalen sind die größte religiöse Gruppe in den USA. Sie leben eine uramerikanische Form des Protestantismus: marktwirtschaftlich, alltagstauglich, politisch. Vizepräsidentschaftskandidatin Sarah Palin begeistert die religiöse Rechte, aber viele Evangelikale wenden sich politisch der Mitte zu.

106 Die amerikanische gesellschaft: "MÄNNLICHE ANGST VOR WEIBLICHER MACHT"
Die US-Autorin Katha Pollitt über die republikanische Kandidatin Sarah Palin, die US-Frauenbewegung und ihre Unterstützung für Barack Obama

110 Die amerikanische gesellschaft: ON THE ROAD AGAIN
Die Gründungsväter zog es von der Alten in die Neue Welt. Den Hang zum Wandern scheinen sich auch ihre Nachfahren bewahrt zu haben. Wohl nirgendwo sonst auf der Welt ziehen die Menschen so viel um wie in Amerika.

112 Die amerikanische gesellschaft: DER ENTZAUBERTE HIMMEL
Die vielleicht erfolgreichsten Erfindungen, die meisten Veröffentlichungen, die besten Universitäten - in den USA gelten Innovationen als Volkssport, und das nicht erst seit Mondlandung, Microsoft und Monsanto. Wie lässt sich dieser Zukunftshunger erklären? Eine Spurensuche im Labor von Benjamin Franklin.

116 Die amerikanische gesellschaft: "EINE UNSICHERE LIEBE"
Der ehemalige amerikanische Botschafter John Kornblum über seine deutschen Großeltern, den Einfluss der deutschen Einwanderer in den USA und deutsch-amerikanische Missverständnisse

119 Usa - aufstieg und krise einer weltmacht: 4 DIE AMERIKANISCHE KULTUR
Nach dem Zweiten Weltkrieg begannen sich die Deutschen für Elvis Presley und Humphrey Bogart, für Jeans und Hamburger zu begeistern. Hollywood ist bis heute ein Seismograf für US-Befindlichkeiten, und mit den großen Erzählern kann man das Land erkunden, ohne jemals dort gewesen zu sein.

120 Die amerikanische kultur: ENTENSCHWANZ UND NIETENHOSE
Der amerikanische Einfluss auf deutsche Kultur und Lebensart

124 Seitenblick: DER GLOBALISIERTE KLOPS
Wie der "Hamburger" in die Welt kam

130 Die amerikanische kultur: HOLLYWOOD IN DER REVOLTE
So politisch engagiert wie zurzeit waren US-Filme lange nicht - Regisseure wie Steven Spielberg oder Ang Lee, Stars wie George Clooney oder Robert Redford besinnen sich zurück auf die rebellische Zeit der Traumfabrik: die sechziger und siebziger Jahre.

134 Die amerikanische kultur: AMERIKA ERZÄHLT
Von Hawthorne bis DeLillo, von Melville bis Roth - ein Streifzug durch die US-Literatur

138 Die amerikanische kultur: KITSCH AUS STOCKBRIDGE
Norman Rockwell ist der Maler des ländlichen Amerika. Wer mehr über die Seele des Landes erfahren will, der kommt an Rockwell und dessen winzigem Heimatort nicht vorbei.

140 Essay: VORREITER DER MODERNE
Warum sind die Vereinigten Staaten vielen Menschen so suspekt?

Deutsche-Bank-Chef Josef Ackermann hat Bonuszahlungen gestrichen - und mit dem Zugeständnis heftige Kritik provoziert. Doch die Empörung zeigt nur: Üppige Prämien ohne entsprechende Leistung haben in Zukunft kaum mehr eine Chance.

Berlin - Zunächst versuchte es Marcel Rohner in aller Stille. In vertraulichen Gesprächen bat der Vorstandschef der schweizerischen Großbank UBS ehemalige Top-Manager darum, zumindest einen Teil ihrer Boni zurückzugeben.

Dass er damit nicht gerade offene Türen einrennen würde, war Rohner wohl von Anfang an klar, doch schließlich schien ihm der Widerstand denn doch zu zäh. Am Wochenende ging er deshalb gemeinsam mit UBS-Oberaufseher Peter Kurer in die Offensive. In mehreren Interviews mit Zeitungen und Radiosendern appellierten die beiden öffentlich an die Angesprochenen, in sich zu gehen. "Ich wäre froh, wenn wir das einfach, schnell und schmerzlos erledigen könnten, statt Prozesse zu führen", sagte Kurer im DRS.

Auch Deutsche-Bank-Chef Josef Ackermann hatte am vergangenen Freitag publikumswirksam mit dem Verzicht auf Boni zugunsten seiner Mitarbeiter zu punkten versucht - seine Geste wurde allerdings vor dem Hintergrund des gerade beschlossenen, 480 Milliarden schweren Rettungspakets zu Lasten der Steuerzahler als besonders zynisch empfunden.

Lässt man die Fragen nach persönlichem Stil oder rechtlichen Ansprüchen einmal beiseite, dann lassen die Beispiele zumindest zwei Schlussfolgerungen zu. Erstens: In der Bankenbranche setzt sich zumindest eine Ahnung davon durch, dass die Bezahlung des Top-Personals und der üppigen Bonuszahlungen unabhängig von der tatsächlichen Leistung ein Problem darstellt. Erst am heutigen Dienstag wieder wurden öffentlich Forderungen nach einer Abschaffung der Boni laut. So rief zum Beispiel Bundeswirtschaftsminister Michael Glos die Investmentbanker angeschlagener Institute dazu auf, auf ihre Jahresboni zu verzichten.

Und zweitens: Es wird noch einiges an Mühe kosten, die Beteiligten davon zu überzeugen, dass für alle die Zeit der uferlosen Gehaltssteigerungen vorbei ist.

So jedenfalls sieht es der Münchener Bankenexperte Wolfgang Gerke: "Natürlich denkt man darüber nach, wie die Bedingungen für die variablen Gehaltsbestandteile künftig neu formuliert werden könnten", erklärt er. Dem Druck der Öffentlichkeit folge die Branche jedoch eher zähneknirschend.

Anders als viele Politiker sieht Gerke in Bonuszahlungen im Prinzip eine gute Möglichkeit, Leistungsanreize zu schaffen. Gleichwohl hält er eine grundlegende Reform der bestehenden Systeme für unumgänglich: "Bisher verdiente seinen Bonus, wer seine Zielvorgaben erreichte. Das Risiko, das er dafür einging, blieb in der Regel unbeachtet." Derartigen Regelungen hätten zu dem skandalösen Zustand geführt, dass Banker noch 2007 und 2008 Prämien kassiert hätten, obwohl bereits klargeworden sei, dass ihre Geschäfte zu Verlusten in Milliardenhöhe geführt hätten.

Einziger Trost: Den Schätzungen nach wird es nicht so viel werden wie in den USA. Wie die britische Tageszeitung "The Guardian" recherchiert hat, verteilen dort allein die Geldhäuser an der Wall Street rund 70 Milliarden Dollar an ihr Spitzenpersonal, das meiste davon in diskreten zusätzlichen Bonuszahlungen. Die Manager belohnten sich damit für ein Geschäftsjahr, schreibt der "Guardian", in dem sie das globale Finanzsystem in die schlimmste Krise seit dem Börsencrash von 1929 führten.

Das derzeit übliche Vergütungssystem hält auch Managementberater und Kienbaum-Geschäftsführer Alexander von Preen für ein gravierendes Problem. Ein Punkt sei zum Beispiel, dass die Ergebnisse der Branche als Maßstab für die Bewertung der Leistung herangezogen werde. Das führe dazu, dass in den vergangenen Jahren trotzdem Boni gezahlt worden seien, obwohl die Börsenkurse überall in den Keller gingen.

Dabei galten die sogenannten variablen Gehaltsbestandteile seit den neunziger Jahren als Patentlösung um Leistungsträger adäquat zu belohnen. Bis hin zum mittleren Management wurden die Grundgehälter deutlich zurückgestutzt und im Gegenzug Prämien für die Erfüllung der persönlichen Zielvorgaben zugesichert. Eine Zeitlang schwiegen sogar die Gewerkschaften - schließlich konnte man davon ausgehen, dass leistungshungrige Manager auch dafür sorgen würden, dass Arbeitsplätze gesichert würden.

Den Pferdefuß der Regelungen erkannten Personalexperten jedoch sehr bald. Denn die Managerverträge koppelten Prämienzahlungen zwar an die Erfüllung von Zielvorgaben. Doch die Bedingungen waren oft so formuliert, dass sogar erkennbare Fehlleistungen immer noch einen Bonus rechtfertigten. Noch schlimmer allerdings seien die Langzeitwirkungen für das Unternehmen: "Fast ausschließlich wurde bisher der kurzfristige Erfolg belohnt. Strategische Ziele, die einen langen Atem erfordern, gerieten so nicht selten aus dem Blick", erklärt Gerke.

Wie die Bedingungen für Prämienzahlungen formuliert sein müssten, damit sie auch der gedeihlichen Entwicklung des Unternehmens dienen, wissen die Experten genau. "Die Zielvorgaben müssten eher an mittelfristigen Zielen ausgerichtet sein", erklärt Gerke. Von Preen fordert darüber hinaus mehr Transparenz in den Verträgen: Modelle, die Über- wie Unterperformance in der kurz- und langfristigen Vergütung abbildeten, seien gefordert.

Die an sich selbstverständlich klingenden Forderungen würden speziell für die Bankenbranche allerdings eine mittelschwere Revolution bedeuten. Denn verschleierte Kasinowetten, deren Risiko inzwischen selbst Eingeweihte nicht mehr abzuschätzen wagen, würden danach in Zukunft womöglich als Malus in die Rechnung eingehen. Auf jeden Fall aber dürften sie erst bewertet werden, wenn das Geschäft tatsächlich abgewickelt wäre.

Für die Topebene stellen sich Gerke, ebenso wie von Preen sogar noch eine wesentlich stärkere Orientierung am Unternehmertum vor. Soll heißen: Wenn der Vorstand in guten Zeiten einen Teil der Gewinne bekommt, dann muss er in schlechten Zeiten auch einen Teil der Verluste tragen. Die Risiken, die sie ihren Kunden zumuten, müssten sie in Zukunft also mittragen.

Kein Wunder also, dass sich Banker nur ungern mit neuen Gehaltsmodellen befassen wollen. Einige malen schon den Untergang des Bankensektors an die Wand, weil mit derart strengen Regeln kaum erstklassiges Personal zu finden sei. Einem Einwand, dem Gerke allerdings mit Gelassenheit begegnet: "Der Markt reißt sich zurzeit nicht gerade um Investmentbanker. Die Beteiligten haben überall in der Welt allen Grund, kompromissbereit zu sein".

Das müsse ebenso für die bestehenden Verträge gelten, fügt Gerke hinzu. Anders sei der Vertrauensverlust der Branche nicht wettzumachen. Von Preen ist da allerdings vorsichtiger: "Die Branche ist in Schockzustand, es wird intensiv über Verantwortung diskutiert", sagt er nur.

Gründung einer "bad bank" Wörtlich übersetzt ist eine "bad bank" eine "schlechte Bank". Gemeint ist damit, dass eine Bank systematisch faule Kredite übernimmt, womit dann andere Banken entlastet wären. Laut BayernLB könnten die Staaten einen Fonds auflegen, der riskante Kredite und Wertpapiere der inländischen Banken ersteigert. Um am Kapitalmarkt glaubwürdig zu sein, sei dafür in Deutschland ein mittlerer zweistelliger Milliarden-Euro-Betrag notwendig, schätzt die BayernLB. Letztlich müsste vermutlich nur ein geringer Teil des Bruttovolumens vom Steuerzahler getragen werden.
Notenbanken garantieren Liquidität
Macht sich die Krise in Europa vor allem als Liquiditätsproblem bemerkbar - dafür sprechen die Schwierigkeiten der Hypo Real Estate -, könnten die Notenbanken den Banken unbegrenzt Liquidität zur Verfügung stellen. Allerdings müssten die Sicherheiten dafür ausgeweitet werden.
Garantie für Bankverbindlichkeiten
Das hat die irische Regierung in dieser Woche bereits getan. Eine solche Garantie würde den Banken sowohl am Interbanken-Geldmarkt als auch am Kapitalmarkt wieder eine akzeptable Refinanzierung ermöglichen, meint die BayernLB. Der Staatshaushalt werde erst belastet, wenn eine Bank in die Insolvenz ginge. Doch könnte es Probleme mit dem EU-Wettbewerbsrecht geben.
Verstaatlichung
Die britische Regierung hat bereits zwei Banken verstaatlicht. Diese Lösung könnte die Kreditwürdigkeit der Institute am Geldmarkt nachhaltig wiederherstellen, sagen die Fachleute der bayerischen Landesbank. In Deutschland könnte es rechtliche Probleme geben, wie der Fall IKB gezeigt habe. Zudem dürfte es für den Steuerzahler tendenziell teurer werden als die Garantielösung.

Imagine this scenario: In a medium-size European country -- call it Country X -- the bank regulators hold an ordinary meeting. These being extraordinary times, the regulators discuss the health of various banks, including the country's largest -- call it Bank Y -- which is owned by an even larger Italian financial group. Last spring, Bank Y, which is perfectly healthy, transferred a large sum to its now somewhat-less-healthy Italian parent; since this is nothing unusual, the regulators drop the subject and move on.

The following day, the matter is reported in a marginal, far-right newspaper in somewhat different terms: "A billion dollars transferred to Italy! Country X's hard-earned money going abroad!" Within hours, as if on cue, everyone starts selling shares in Bank Y, whose stock price plunges. So does the rest of Country X's smallish stock market. So does Country X's currency. Within a few more hours, Country X is calling for an international bailout, the IMF is on the phone and the government is wobbling.

Except for that final sentence -- there was no international bailout or call to the International Monetary Fund, and the government is fine -- that is a brief description of something that happened last week to one of Poland's largest banks. A real meeting, followed by an unsubstantiated rumor in a dodgy newspaper, and a bunch of nervous investors started selling. Shares in the bank collapsed by the largest margin in its history; for one ugly day, they dragged down the rest of the Polish stock market and currency as well.

As I say, the story ended there. But it could have gone further, and, indeed, in several other countries it has. A month ago, in the first round of this crisis, panicky rumors brought down banks. Now, with trillions of nervous dollars sloshing around the international markets, panicky rumors are bringing down countries.

The case of Iceland, which in recent weeks has nationalized its three major banks, shut its stock exchange and halted trading in its currency, is by now well known. Less well known is the speed with which the Icelandic disease is spreading. Consider Hungary, once the destination of choice for investors who wanted an Eastern European head office with a 19th-century facade and a pastry shop next door: The currency is in free fall and so is the stock market, flummoxing those previously well-fed investors. (One of them told a Hungarian financial Web site: "I haven't got a clue as to when and how this would end, I'm just staring into empty space.") Or Ukraine, whose central bank governor declared his banking system "normal and reliable" on Monday of last week. By Tuesday of last week, Ukraine had desperately requested " systemic support" from the IMF.

So far, most of these crises have been explained away: The banks of Iceland had debts larger than Iceland's gross domestic product, Hungary's finances were long mismanaged, and Ukraine, whose president just called for the third election in as many years, is badly governed. But the speed with which some of these defaults are happening, coupled with the paranoia inherent in the political culture of small countries, has led many to suspect political manipulation as well.

To put it another way: If you wanted to destabilize a country, wouldn't this be an excellent time to do it? If Country X's stock market can crash after the publication of a single article in an obscure newspaper, think what might happen if someone conducted a systematic campaign against Country X. And if you can imagine this, so can others.

All governments have enemies, internal and external, or at least are faced with elements that do not wish them well: the political opposition, the country next door, the former imperial power. For someone, there will always be the temptation to bring down the government, destabilize the country and thus create political chaos.

Even when there hasn't been political meddling, someone else will suspect that it has occurred, anyway. Here, then, is a prediction: Political instability will follow economic instability like night follows day. Iceland is not alone. Serbia, the Baltic states, Kazakhstan, Indonesia, South Korea and Argentina are all in financial trouble; so, too, are Russia and Brazil.

And here's a final, unpleasant thought: Pakistan. This is a country with 25 percent inflation and a currency in free fall; a country with a jihadist insurgency on its border with Afghanistan, permanent hostility on its border with India, nuclear weapons and a tradition of street demonstrations in response to suspect newspaper articles. Dozens of people, with all kinds of agendas, have an interest in using financial markets to destabilize Pakistan, and Afghanistan along with it. Eventually, one of them will.

With the global financial system in serious trouble, is America's geostrategic dominance likely to diminish? If so, what would that mean?

One immediate implication of the crisis that began on Wall Street and spread across the world is that the primary instruments of U.S. foreign policy will be crimped. The next president will face an entirely new and adverse fiscal position. Estimates of this year's federal budget deficit already show that it has jumped $237 billion from last year, to $407 billion. With families and businesses hurting, there will be calls for various and expensive domestic relief programs.

In the face of this onrushing river of red ink, both Barack Obama and John McCain have been reluctant to lay out what portions of their programmatic wish list they might defer or delete. Only Joe Biden has suggested a possible reduction -- foreign aid. This would be one of the few popular cuts, but in budgetary terms it is a mere grain of sand. Still, Sen. Biden's comment hints at where we may be headed: toward a major reduction in America's world role, and perhaps even a new era of financially-induced isolationism.

Pressures to cut defense spending, and to dodge the cost of waging two wars, already intense before this crisis, are likely to mount. Despite the success of the surge, the war in Iraq remains deeply unpopular. Precipitous withdrawal -- attractive to a sizable swath of the electorate before the financial implosion -- might well become even more popular with annual war bills running in the hundreds of billions.

Protectionist sentiments are sure to grow stronger as jobs disappear in the coming slowdown. Even before our current woes, calls to save jobs by restricting imports had begun to gather support among many Democrats and some Republicans. In a prolonged recession, gale-force winds of protectionism will blow.

Then there are the dolorous consequences of a potential collapse of the world's financial architecture. For decades now, Americans have enjoyed the advantages of being at the center of that system. The worldwide use of the dollar, and the stability of our economy, among other things, made it easier for us to run huge budget deficits, as we counted on foreigners to pick up the tab by buying dollar-denominated assets as a safe haven. Will this be possible in the future?

Meanwhile, traditional foreign-policy challenges are multiplying. The threat from al Qaeda and Islamic terrorist affiliates has not been extinguished. Iran and North Korea are continuing on their bellicose paths, while Pakistan and Afghanistan are progressing smartly down the road to chaos. Russia's new militancy and China's seemingly relentless rise also give cause for concern.

If America now tries to pull back from the world stage, it will leave a dangerous power vacuum. The stabilizing effects of our presence in Asia, our continuing commitment to Europe, and our position as defender of last resort for Middle East energy sources and supply lines could all be placed at risk.

In such a scenario there are shades of the 1930s, when global trade and finance ground nearly to a halt, the peaceful democracies failed to cooperate, and aggressive powers led by the remorseless fanatics who rose up on the crest of economic disaster exploited their divisions. Today we run the risk that rogue states may choose to become ever more reckless with their nuclear toys, just at our moment of maximum vulnerability.

The aftershocks of the financial crisis will almost certainly rock our principal strategic competitors even harder than they will rock us. The dramatic free fall of the Russian stock market has demonstrated the fragility of a state whose economic performance hinges on high oil prices, now driven down by the global slowdown. China is perhaps even more fragile, its economic growth depending heavily on foreign investment and access to foreign markets. Both will now be constricted, inflicting economic pain and perhaps even sparking unrest in a country where political legitimacy rests on progress in the long march to prosperity.

None of this is good news if the authoritarian leaders of these countries seek to divert attention from internal travails with external adventures.

As for our democratic friends, the present crisis comes when many European nations are struggling to deal with decades of anemic growth, sclerotic governance and an impending demographic crisis. Despite its past dynamism, Japan faces similar challenges. India is still in the early stages of its emergence as a world economic and geopolitical power.

What does this all mean? There is no substitute for America on the world stage. The choice we have before us is between the potentially disastrous effects of disengagement and the stiff price tag of continued American leadership.

Are we up for the task? The American economy has historically demonstrated remarkable resilience. Our market-oriented ideology, entrepreneurial culture, flexible institutions and favorable demographic profile should serve us well in whatever trials lie ahead.

The American people, too, have shown reserves of resolve when properly led. But experience after the Cold War era -- poorly articulated and executed policies, divisive domestic debates and rising anti-Americanism in at least some parts of the world -- appear to have left these reserves diminished.

A recent survey by the Chicago Council on World Affairs found that 36% of respondents agreed that the U.S. should "stay out of world affairs," the highest number recorded since this question was first asked in 1947. The economic crisis could be the straw that breaks the camel's back.

In the past, the American political process has managed to yield up remarkable leaders when they were most needed. As voters go to the polls in the shadow of an impending world crisis, they need to ask themselves which candidate -- based upon intellect, courage, past experience and personal testing -- is most likely to rise to an occasion as grave as the one we now face.

Mr. Friedberg is a professor of politics and international relations at Princeton University's Woodrow Wilson School. Mr. Schoenfeld, senior editor of Commentary, is a visiting scholar at the Witherspoon Institute in Princeton, N.J.

In 1932, Democrat Franklin Delano Roosevelt was elected president as the nation was heading into a severe recession. The stock market had crashed in 1929, the world's economy was slowing down, and all economic indicators in the U.S. showed signs of trouble.
The new president's response was to restructure the economy with the New Deal -- an expansion of the role of government once unimaginable in America. We now know that FDR's policies likely prolonged the Great Depression because the economy never fully recovered in the 1930s, and actually got worse in the latter half of the decade. And we know that FDR got away with it (winning election four times) by blaming his predecessor, Herbert Hoover, for crashing the economy in the first place.
Today, the U.S. is in better shape than in 1932. But it faces similar circumstances. The stock market has been in a tail spin, credit markets have locked up, and a surging Democratic presidential candidate is running on expanding the role of government, laying the blame for the economic turmoil on the current occupant of the White House and his party's economic policies.
Barack Obama is one of the most liberal members of the Senate. His reaction to the financial crisis is to blame deregulation. He even leverages fear of deregulation onto other issues. For example, Sen. John McCain wants to allow consumers to buy health insurance across state lines. Mr. Obama likens this to the financial deregulation that he alleges got us into the current mess.
But a President Obama would also enjoy large Democratic majorities in Congress. His party might even win a 60-seat, filibuster-proof majority in the Senate, giving him more power than any president has had in decades to push a liberal agenda. And given the opportunity, Mr. Obama will likely radically increase government interference in the economy.
Until now, this election has been fought on the margins, over marginal issues. But it is important to understand how much a presidential candidate wants to move the needle on taxes, trade and other issues. Usually there isn't a chance for wholesale change. Now, however, it appears that this election will make more than a marginal difference. It might fundamentally change America.
Unlike FDR, Mr. Obama will not have to create the mechanisms government uses to interfere with the economy before imposing his policies. FDR had to get the Supreme Court to overturn a century's worth of precedents limiting the power of government before he could use the Constitution's commerce clause, among other things, to increase government control of the economy. Mr. Obama will have no such problem.
FDR also had to create agencies to implement regulations. Today, the Securities and Exchange Commission and the National Labor Relations Board (both created in the 1930s) as well as the Environmental Protection Agency and others created later are in place. Increasing their power will be easier than creating them from scratch.
Even before the current crisis, there was a great demand for increased government regulation to limit global warming. That gives the next president a ready-made box in which to place more regulation, and a legion of supports eager for it.
But if the coming wave of new regulation from an Obama administration is harmful to the economy, Mr. Obama will take a page from FDR's playbook. He'll blame Republicans for having caused the market crash in the first place, and so escape blame for the consequences of his policies. It worked for FDR and, so far in this campaign, blaming Republicans and George W. Bush has worked for Mr. Obama.
Democrats draw their political power from trial lawyers, unions, government bureaucrats, environmentalists, and, perhaps, my liberal colleagues in academia. All of these voting blocs seem to favor a larger, more intrusive government. If things proceed as they now appear likely to, we can expect major changes in policies that benefit these groups.
If those of us who favor free markets for the freedom and prosperity they bring are right, the political system may soon put our economy on track for a catastrophe.

Mr. Rubin is a professor of economics and law at Emory University. He held several senior economic positions in the Reagan administration, and is an unpaid adviser to the McCain campaign.

Das europäische Lebensmodell beruht auf drei Grundvoraussetzungen: Die parlamentarische Demokratie ist nach dem Schrecken der Diktaturen Basis des vereinigten Europa. Statt der gescheiterten Planwirtschaft sorgt die soziale Marktwirtschaft für Freiheit, Wettbewerb und breiten Wohlstand. Die europäische Integration überwindet den Nationalismus der Völker, der im Zweiten Weltkrieg eine gesamteuropäische Katastrophe herbeiführte. Dieser Konsens steht heute auf dem Prüfstand. In der EU allein werden 2000 Mrd. Euro für Haftungen, Garantien und Kapitalzufuhren bereitgestellt. Mit Amerika, Russland und Asien werden es wohl über drei Billionen Mrd. Euro sein. In den USA, Großbritannien und vielen anderen westlichen Ländern wurden Banken verstaatlicht, in Managerverträge eingegriffen, Notverordnungen und parlamentarische Schnellverfahren in Anspruch genommen. Etatisten, Protektionisten und Planwirtschaftler reiben sich bereits die Hände. Die deutsche Linke um Oskar Lafontaine spricht vom Ende der freien Marktwirtschaft, Sozialdemokraten bejubeln das Ende des „neoliberalen Zeitalters“, das autoritäre China brüstet sich, die optimale Balance zwischen einem starken Staat und dem Markt bereits gefunden zu haben.

Ich warne vor voreiligen Schlüssen. Der freiere Welthandel der letzten Jahre war der eigentliche Motor für das letzte – im Rückblick goldene – wirtschaftliche Jahrzehnt. Die daraus resultierende Globalisierung hat Hunderte Millionen Menschen aus bitterer Armut herausgeführt. Natürlich muss der Finanzsektor international neu geordnet werden. Dabei sollte man allerdings nicht in die Fehler der 30er-Jahre verfallen, als Protektionismus und nationale Abschottung direkt zur Weltdepression führten. Selbstverständlich braucht die soziale Marktwirtschaft klare, transparente und vernünftige Spielregeln und Kontrollen. Die soziale Marktwirtschaft ist aber noch lange nicht am Ende. Mag sich der Berliner Karl-Dietz-Verlag auch über die Verdreifachung der Nachfrage nach dem „Kapital“ von Karl Marx freuen, ein taugliches Zukunftskonzept liegt damit nicht vor. Gerade Österreich kann im Modellversuch die Überlegenheit der sozialen Marktwirtschaft gegenüber planwirtschaftlichen Methoden beweisen. Bei gleicher Ausgangslage war das in Deutschland und Österreich praktizierte Modell innerhalb von vier Jahrzehnten mehr als doppelt so erfolgreich gegenüber dem planwirtschaftlichen unserer östlichen Nachbarn.

Vielleicht bietet uns gerade diese Krise eine einmalige Chance, dass das europäische Lebensmodell die Überlegenheit gegenüber anderen Systemen beweisen kann: Wenn diese Notverordnungen klug und mit Augenmaß gehandhabt werden, werden unsere Steuerzahler davonkommen, ohne zur Kasse gebeten zu werden (vielleicht schaut am Ende sogar ein kleiner Gewinn heraus). Wenn Europa sich international auf die Hinterfüße stellt, dann erleben wir wirklich noch weltweite Regeln im Finanzsektor, die auch in Steuerparadiesen oder Offshore-Zentren Geltung haben.

Die europäischen Institutionen haben Handlungsfähigkeit bewiesen: Die französische Ratspräsidentschaft unter Sarkozy hat ausgezeichnet gearbeitet, die Euro-Zone war Segen und Schutzschirm für unsere Länder; die EZB ist gerade im Vergleich mit der amerikanischen FED glänzend aufgestellt; Schweden, Dänemark und Island überlegen laut den Beitritt zur Euro-Zone, und der Lissabon-Vertrag sollte gerade im Licht der heutigen Herausforderungen von den Iren noch einmal überdacht werden.

Aber die Verteidiger der sozialen Marktwirtschaft müssen sich mehr als bisher einem öffentlichen Diskurs stellen, mit guten Argumenten und mit dem sicheren Bewusstsein, nicht ein Auslaufmodell, sondern ein wirkungsvolles Zukunftskonzept zu besitzen: möglichst viel Freiheit für die Bürger, ein notwendiges Maß an Regeln und Kontrollen, eine starke Verbundenheit mit Mitarbeitern, Aktionären und der Gesellschaft und die unerlässliche Meßlatte von Ethik und Moral für eine Welt, in der wir gerne leben wollen.

Die Finanzkrise erreicht eine neue Dimension: Nach den Aktien- spielen nun auch die Devisenmärkte verrückt. In den vergangenen Wochen hat es eine panikartige Flucht in Dollar und Yen gegeben, Schwellenländer sind die großen Verlierer. Die Situation erinnert an die Asienkrise von 1997.

Allen Rettungsprogrammen und Staatsinterventionen zum Trotz frisst sich die Finanzkrise weiters durchs System. Jetzt hat sie auf die weltweiten Devisenmärkte übergegriffen. Der Euro und andere Währungen verloren die vergangenen Tage stark an Wert.

Bei einigen Schwellenland-Devisen wie dem ungarischen Forint oder dem koreanischen Won haben die Verluste bereits ähnliche Dimensionen erreicht wie zu Beginn der Asien-Krise vor elf Jahren. „Ein Hauch von 1997 weht über den Globus“, sagt Philipp Nimmermann, Analyst bei der BHF-Bank. In den späten Neunzigerjahren waren die Währungen der fernöstlichen Tigerstaaten Korea, Thailand, Malaysia und Indonesien dermaßen eingebrochen, dass die vorherigen Boomökonomien nur mit Hilfe des Internationalen Währungsfonds (IWF) vom Kollaps bewahrt werden konnten. „Der Unterschied ist, dass die jetzigen Verwerfungen nicht regional begrenzt sind.“

Der Euro rutschte am Mittwoch einmal mehr ab und fiel gegenüber dem Dollar auf den tiefsten Stand seit zwei Jahren. Am frühen Abend notierte die Gemeinschaftswährung bei rund 1,28 Dollar – mehr als 30 US-Cents tiefer als noch im Juli.

Der drastische Wertverfall des Euro kommt für viele überraschend. Schließlich gestaltet sich die volkswirtschaftliche Situation in Euroland keineswegs schlechter als in den Vereinigten Staaten, die weiter stark unter den Folgen der geplatzten Kreditblase leiden. „Das sind fast schon panikartige Reaktionen“, sagt Folker Hellmeyer, Stratege bei der Bremer Landesbank, „tausende Hedgefonds und andere Investoren lösen ihre Fremdwährungspositionen auf und transferieren ihr Geld zurück in den Heimatmarkt“, erklärt er. Da spielten Fakten wie die explodierende US-Staatsverschuldung, die den Dollar im Grunde belasten müssten, keine Rolle mehr. „Internationale Investoren fliehen in die liquideste Devise, die es gibt, die der Wirtschaftsmacht Nummer eins. Kleinere Währungen geraten da unter die Räder“, stellt Nimmermann fest.

Mehr Videos Doch nicht nur der Dollar profitiert von dem Status als Fluchtwährung. Auch der japanische Yen wird durch fliehendes Kapital auf der Suche nach Sicherheit nach oben getrieben. Hier ist der Effekt sogar noch ausgeprägter. Über Jahre war zu niedrigen Zinsen geliehenes Geld aus Japan herausgeflossen, das in Schwellenländern und anderen spekulativen Märkten angelegt wurde. „Diese sogenannten Carry-Trades werden jetzt abgewickelt, und das katapultiert den Yen nach oben“, erklärt Hellmeyer.

Ganze 28 Prozent hat sich die japanische Devise seit Anfang des Jahres verteuert. Für Nippons Exporteure kommt diese Verteuerung zur Unzeit. In einem konjunkturellen Umfeld, in der die Nachfrage nach Konsumartikeln ohnehin schwächelt, verlieren Unternehmen wie Toyota, Nintendo oder Sony preislich an Wettbewerbsfähigkeit. Der Aktienindex Nikkei brach am Dienstag nicht zuletzt wegen des haussierenden Yen um fast sieben Prozent ein.

Die umgekehrte Wirkung hat die Schwäche des Euro für hiesige Exportfirmen. In normalen Zeiten wären hier international tätige Konzerne wie Daimler und Siemens, aber auch EADS oder Heidelberger Druck die Nutznießer. Allerdings ist ein etwas schwächerer Euro in einer weltweiten Rezession nur ein schwacher Trost.

Außerdem könnte der Verfall vieler Emerging-Markets-Währungen auf die exportabhängige deutsche Wirtschaft noch zurückschlagen. Sollte sich ein ähnlicher Absturz wie 1997 in Asien oder auch 1998 in Russland wiederholen, würden hiesigen Konzernen womöglich auf Jahre wichtige Absatzmärkte wegbrechen.

Wie ernst die Lage bereits ist, zeigen die Risikoaufschläge (Spreads) bei Schwellenländer-Anleihen. Sie messen das Mehr an Zinsen, das ein solcher Staat gegenüber erstklassischen Papieren industrialisierter Länder bieten muss. Bei Russland beträgt der Aufschlag inzwischen 673 Basispunkte (6,73 Prozentpunkte) gegenüber US-Staatsanleihen. Allein am Mittwoch schoss der Spread um mehr als 100 Punkte nach oben.

Ähnlich sieht die Situation in Ungarn aus. Der Verfall des ungarischen Forint hat inzwischen solche Ausmaße erreicht, dass bereits über einen Staatsbankrott des Landes spekuliert wird. Die Notenbank in Budapest versuchte gestern gegenzusteuern, indem sie den Leitzins um 300 Punkte auf 11,5 Prozent anhob. Außerdem sprang ihr die EZB mit fünf Mrd. Euro Soforthilfe zur Seite. Neben Ungarn werden die baltischen Staaten, Rumänien, die Türkei und Argentinien als gefährdet angesehen. „Die Hoffnung ist, dass wir eine koordinierte internationale Hilfsaktion sehen, die einen ähnlichen Kollaps wie 1997 verhindert“, sagt Hellmeyer.

THIS week, credit has begun to loosen, stock markets have been encouraged enough to reclaim lost ground (at least for now) and there is a collective sigh of hope that lenders will begin to trust in the financial system again.

But we’re deluding ourselves if we assume that we can recover from the crisis of 2008 so quickly and easily simply by watching the Dow creep upward. The wounds go deeper than that. To heal them, we must repair the broken moral balance that let this chaos loose.

Debt — who owes what to whom, or to what, and how that debt gets paid — is a subject much larger than money. It has to do with our basic sense of fairness, a sense that is embedded in all of our exchanges with our fellow human beings.

But at some point we stopped seeing debt as a simple personal relationship. The human factor became diminished. Maybe it had something to do with the sheer volume of transactions that computers have enabled. But what we seem to have forgotten is that the debtor is only one twin in a joined-at-the-hip pair, the other twin being the creditor. The whole edifice rests on a few fundamental principles that are inherent in us.

We are social creatures who must interact for mutual benefit, and — the negative version — who harbor grudges when we feel we’ve been treated unfairly. Without a sense of fairness and also a level of trust, without a system of reciprocal altruism and tit-for-tat — one good turn deserves another, and so does one bad turn — no one would ever lend anything, as there would be no expectation of being paid back. And people would lie, cheat and steal with abandon, as there would be no punishments for such behavior.

Children begin saying, “That’s not fair!” long before they start figuring out money; they exchange favors, toys and punches early in life, setting their own exchange rates. Almost every human interaction involves debts incurred — debts that are either paid, in which case balance is restored, or else not, in which case people feel angry. A simple example: You’re in your car, and you let someone else go ahead of you, and the driver doesn’t nod, wave or honk. How do you feel?

Once you start looking at life through these spectacles, debtor-creditor relationships play out in fascinating ways. In many religions, for instance. The version of the Lord’s Prayer I memorized as a child included the line, “Forgive us our debts as we forgive our debtors.” In Aramaic, the language that Jesus himself spoke, the word for “debt” and the word for “sin” are the same. And although many people assume that “debts” in these contexts refer to spiritual debts or trespasses, debts are also considered sins. If you don’t pay back what’s owed, you cause harm to others.

The fairness essential to debt and redemption is reflected in the afterlives of many religions, in which crimes unpunished in this world get their comeuppance in the next. For instance, hell, in Dante’s “Divine Comedy,” is the place where absolutely everything is remembered by those in torment, whereas in heaven you forget your personal self and who still owes you five bucks and instead turn to the contemplation of selfless Being.

Debtor-creditor bonds are also central to the plots of many novels — especially those from the 19th century, when the boom-and-bust cycles of manufacturing and no-holds-barred capitalism were new and frightening phenomena, and ruined many. Such stories tell what happens when you don’t pay, won’t pay or can’t pay, and when official punishments ranged from debtors’ prisons to debt slavery.

In “Uncle Tom’s Cabin,” for example, human beings are sold to pay off the rashly contracted debts. In “Madame Bovary,” a provincial wife takes not only to love and extramarital sex as an escape from boredom, but also — more dangerously — to overspending. She poisons herself when her unpaid creditor threatens to expose her double life. Had Emma Bovary but learned double-entry bookkeeping and drawn up a budget, she could easily have gone on with her hobby of adultery.

For her part, Lily Bart in “The House of Mirth” fails to see that if a man lends you money and charges no interest, he’s going to want payment of some other kind.

As for what will happen to us next, I have no safe answers. If fair regulations are established and credibility is restored, people will stop walking around in a daze, roll up their sleeves and start picking up the pieces. Things unconnected with money will be valued more — friends, family, a walk in the woods. “I” will be spoken less, “we” will return, as people recognize that there is such a thing as the common good.

On the other hand, if fair regulations are not established and rebuilding seems impossible, we could have social unrest on a scale we haven’t seen for years.

Is there any bright side to this? Perhaps we’ll have some breathing room — a chance to re-evaluate our goals and to take stock of our relationship to the living planet from which we derive all our nourishment, and without which debt finally won’t matter.

Margaret Atwood is the author of “The Handmaid’s Tale” and, most recently, “Payback: Debt and the Shadow Side of Wealth.”

During the Clinton administration, the government required the financial industry to start expanding the frequency of mortgage loans to consumers who might not have qualified in the past.

When George W. Bush was named president by the Supreme Court in December 2000, the stock market had begun to decline with the bursting of the dot.com bubble.

Greenspan endorsed President Bush’s March 2001 tax cuts for the rich. More such cuts took place in May 2003.

Signs of recession had begun to show in early 2001. The stock market crashed after 9/11. The U.S. invaded Afghanistan in October 2001 and Iraq in March 2003.

The Federal Reserve began cutting interest rates, and by 2002 a home-buying frenzy was underway. Fannie Mae and Freddie Mac went along by guaranteeing the increasing number of mortgage loans.

According to a mortgage broker this writer interviewed, word began to come down through the mortgage banks to begin falsifying mortgage applications to show more borrower income than borrowers actually possessed

Banks that wrote mortgages began to offload them when Wall Street packaged them into mortgage-backed securities that were sold around the world as bonds to investors.

Risk-analysts at the leading credit-rating agencies, such as Standard and Poor’s, Moody’s, and Fitch, gave their highest ratings to mortgage-backed securities whose risks were later acknowledged to be grossly underestimated.

Mortgage companies, with Alan Greenspan’s endorsement, began to offer more Adjustable Rate Mortgages (ARMs), loans that would reset at much higher rates in future years.

Mortgage brokers fed the growing bubble by telling people they should buy now because housing prices would keep going up and they could resell at a profit before their ARMs escalated.

Huge amounts of money began to flow into the economy from mortgages and home equity loans and from capital gains on resale of inflating property.

Meanwhile, in the world of investment securities, the Securities and Exchange Commission greatly reduced the amount of their own capital investors were required to bring to the table, resulting in a huge increase in bank leveraging of speculative trading.

George W. Bush was reelected in 2004 at the height of the housing and investment bubbles. By 2005 the housing bubble was accounting for half of all U.S. economic growth and yielding huge tax revenues to all levels of government.

Despite the tax revenues from the bubbles the Bush administration was running huge budget deficits from expenditures on the wars in Afghanistan and Iraq .

ABC News reports that during this time risk analysts at Washington Mutual, one of the nation’s largest banks, were told to ignore high risk loans because lending had to be maximized. Those who objected were disciplined or fired.

State attorneys-general moved to investigate mortgage fraud but were blocked from doing so by orders of the Treasury Department’s Comptroller of the Currency. There was no federal agency that was charged with regulating mortgage fraud.

In February 2006, Ben Bernanke replaced Alan Greenspan as Federal Reserve Chairman and held interest rates steady. Homeowners began to default as ARMs reset.

The housing bubble began to collapse in 2006-2007, with the economy showing early signs of a recession and the stock market starting to decline by August 2007. Home prices began to plummet in most markets, with millions of homeowners owing more on their homes than their new appraisals.

Homeowners began to default, with over four million homes going to foreclosure from 2006-2008. In many cases, homeowners simply walked away, dropping off the keys to their houses at the bank.

The U.S. economy shed 60,000 jobs in August 2008. In a year, Wall Street had cut 200,000 jobs. State and local governments began to cut budgets and jobs.

The “toxic debt” from the collapse of the housing bubble brought about a full-scale crash of the U.S. financial system by September 2008. The stock market immediately fell, with 40 percent of its value—$8 trillion—now having been lost in a year. $2 trillion of the losses were in retirement savings.

The crash of the U.S. economy began to reverberate around the world with bankers and the IMF warning of an onrushing global recession.

Massive bailouts by the U.S. Treasury Department and the Federal Reserve failed to stem the tide of the crashing markets. By late October 2008 the recession has begun to hit in force.

As the situation worsened, big banks like J.P. Morgan Chase received government capitalization even as they were buying up banks that were failing. J.P. Morgan Chase paid $1.9 billion for Washington Mutual with assets of over $300 billion.

The U.S. government joined with the nations of Europe in planning a series of economic summits to explore global financial solutions. President Bush will host the first summit in Washington , D.C. , on November 15, after the U.S. presidential election.

The U.S. military shifted combat troops from Iraq to the U.S. to contain possible civil unrest.

Most major retail chains began to close stores and lay off employees even as the Christmas season approached.

The Washington Post reported on October 23, 2008: “Employers are moving to aggressively cut jobs and reduce costs in the fact of the nation’s economic crisis, preparing for what many fear will be a long and painful recession.”

Richard C. Cook is a former U.S. federal government analyst, whose career included service with the U.S. Civil Service Commission, the Food and Drug Administration, the Carter White House, NASA, and the U.S. Treasury Department. His articles on economics, politics, and space policy have appeared in numerous websites and print magazines. His book on monetary reform, entitled We Hold These Truths: The Hope of Monetary Reform, will soon be published by Tendril Press. He is the author of Challenger Revealed: An Insider’s Account of How the Reagan Administration Caused the Greatest Tragedy of the Space Age, called by one reviewer, “the most important spaceflight book of the last twenty years.” His website is www.richardccook.com. Comments or requests to be added to his mailing list may be sent to EconomicSanity@gmail.com. Also see a series of his speeches on YouTube at http://www.youtube.com/user/GracchusJones. Richard C. Cook is a frequent contributor to Global Research.

The gilded age of hedge funds is losing its luster. The funds, pools of fast money that defined the era of Wall Street hyper-wealth, are in the throes of an unprecedented shakeout. Even some industry stars are falling back to earth.

This unregulated, at times volatile corner of finance — which is supposed to make money in bull and bear markets — lost $180 billion during the last three months. Investors, particularly wealthy individuals, are heading for the exits.

As the stock market plunged again on Wednesday, with the Dow Jones industrial average sinking 514 points, or 5.7 percent, the travails of the $1.7 trillion hedge fund industry loomed large. Some funds dumped stocks in September as their investors fled, and other funds could follow suit, contributing to the market plummet.

No one knows how much more hedge funds might have to sell to meet a rush of redemptions. But as the industry’s woes deepen, money managers fear hundreds or even thousands of funds could be driven out of business.

The implications stretch far beyond Manhattan and Greenwich, Conn., those moneyed redoubts of hedge-fund lords. That is because hedge funds are not just for the rich anymore. In recent years, public pension funds, foundations and endowments poured billions of dollars into these private partnerships. Now, in the midst of one of the deepest bear markets in generations, many of those investments are souring.

Granted, hedge funds are not going to disappear. In fact, some are still thriving. Even many of the ones that have stumbled this year are doing better than the mutual fund industry, which has also been hit with withdrawals that have forced their managers to sell.

But the reversal for the hedge fund industry represents a sea change for Wall Street and its money culture. Since hedge funds burst onto the scene in the 1990s, they have recast not only the rules of finance but also notions of wealth and status. Hedge-fund riches helped inflate the price of everything from modern art to Manhattan real estate. Top managers raked in billions of dollars a year, and managing a fund became the running dream on Wall Street.

“For the past five or six years, it seemed anybody could go to their computer and print up a business card and say they were in the hedge fund business, and raise a pot of money,” said Richard H. Moore, the treasurer of North Carolina, which invests workers’ pension money in hedge funds. “That’s going to be gone forever.”

As are some hedge funds. For the first time, the industry is shrinking. Worldwide, the number of these funds dropped by 217 during the last three months, to 10,016, according to Hedge Fund Research.

Even some of the industry’s most well-regarded managers are starting to retrench. Richard Perry, who until now had not had a down year for his flagship fund in more than a decade, has laid off some employees. Mr. Perry, who began his career at Goldman Sachs, is moving away from stock-picking to focus on the troubled credit markets.

Three other hedge fund highfliers — Kenneth C. Griffin, Daniel S. Loeb and Philip Falcone — have suffered double-digit losses through the end of September.

Steven A. Cohen, the secretive chief of a fund called SAC Capital, has put much of the money in his funds into cash, reducing trading by some of his workers.

Many hedge fund investors, particularly the wealthy individuals, are flabbergasted by their losses this year. The average fund was down 17.6 percent through Tuesday, according to Hedge Fund Research.

“You’re seeing a lot of shock, a lot of inaction, a lot of reassessment of where their allocations are and what to do going forward,” said Patrick Welton, chief executive of the Welton Investment Corporation, whose fund is up double-digits this year.

Many investors, Mr. Welton said, had hoped hedge funds would protect them from a steep decline in the broader market. But in many cases, that has not happened.

Now Wall Street is buzzing about how much money could be pulled out of hedge funds — and which funds might bear the brunt of the redemptions.

Funds have set aside billions of dollars in cash to prepare for withdrawals, and many prominent funds require their investors to leave their money in the funds for years. That could help relieve some of the pressure.

But because hedge funds are largely unregulated, they do not publicly disclose the identity of their investors or whether they have received requests for withdrawals. While it might make sense to pull money out of poorly performing funds, investors might also exit funds that are doing well to offset losses elsewhere.

Institutions — pension funds, endowments and the like — pushed into hedge funds after the Nasdaq stock market bust at the turn of the century. Many hedge funds had prospered as technology stocks crashed, leading these investors to believe they would in the future.

In Massachusetts, for instance, Norfolk County broached the issue with the state’s pension oversight commission, said Robert A. Dennis, the investment director of the commission. Mr. Dennis was impressed that hedge funds had fared so much better than the broader stock market.

Though Mr. Dennis says he recognizes the risks that come with selecting hedge funds, he thinks they remain a good investment. Next week, the state commission will vote on whether to allow some towns with pension funds below $250 million to invest in hedge funds, a move Mr. Dennis supports.

“Hedge funds are having a bad year, absolutely, but they’re still holding up better than stocks,” Mr. Dennis said. “Losing less money than another investment is, while not great, it’s still something to be at least satisfied with.”

But now that the days of easy money are over, some fund managers are throwing in the towel.

“I was in this game for the money,” Mr. Lahde wrote to his investors recently. He made a fortune betting against the mortgage markets, calling those on the other side of his trades “idiots.”

“I have enough of my own wealth to manage,” Mr. Lahde wrote. He did not return telephone calls seeking comment.

And what wealth there has been. More than anything else, hedge funds are vehicles for their managers to take a big cut of profits. The lucrative economics of the industry is known as “two and 20.” Managers typically collect annual management fees equal to 2 percent of the assets in their funds, and, on top of that, take a 20 percent cut of any profits. Last year, one manager, John Paulson, reportedly took home $3 billion.

But with the industry under pressure, those fat fees are being questioned. Mr. Moore and other investors are starting to ask whether hedge funds deserve all that money. Mr. Griffin, who runs Citadel Investment Group in Chicago, plans to offer funds with lower fees.

More changes could be coming, including increased regulation. The House Committee on Oversight and Government Reform is scheduled to hold a hearing about regulation next month with five hedge fund managers who reportedly made more than $1 billion last year: Mr. Griffin, Mr. Falcone and Mr. Paulson, as well as George Soros and James Simons.

Markets are volatile, with oil plunging, currencies see-sawing and the Dow Jones Industrial Average bouncing up and down like a yo-yo. They are perfect conditions to expose a rogue trader in the mould of Nick Leeson of Barings.

True to form, the Caisse d’Epargne, one of France’s biggest savings banks, on Sunday announced the resignations of its chairman, chief executive and finance director after four equity derivatives traders allegedly ignored their trading limits and ran up a loss of €600m ($770m, £477m). I say “allegedly” because rogue traders – that evocative phrase first used by Eddie George, the former governor of the Bank of England – usually insist afterwards that they did nothing wrong. They say that they were, tacitly or explicitly, encouraged by bosses to take a chance.

Often that is just an excuse, but the rogue trader is not the biggest culprit at the moment. In this crisis – whatever turns out to have occurred at Caisse d’Epargne – companies and banks bear responsibility.

Take the case of Leslie Chang, the finance director of the Chinese financial group, Citic Pacific, who was fired this week over a currency hedge that went badly wrong and could cost Citic $1.9bn. Larry Yung, Citic’s chairman, treated Mr Chang like a rogue trader, saying Mr Chang had not been given approval to buy currency derivatives to hedge Citic’s investment in an iron ore mine in Western Australia.

I sympathise with Mr Chang because, although we do not yet know the full details of what happened, it was clearly part of his job to hedge currency risk. Many other companies have also been caught out recently by the sudden rise of the US dollar and the fall in commodity prices.

Southwest Airlines sustained a loss of $247m on fuel price hedges in the third quarter of this year, dragging it into loss for the first time in its history. The Wall Street Journal this week reported on an array of Latin American companies that have made bad currency bets.

Does that mean their finance directors should be dismissed for behaving badly? No, of course not. Most companies with big international operations have offset their balance sheets with derivatives in an effort to lower their market exposure.

Some chief executives will defer to the chief financial officer to oversee the details of hedging policies. But if the CFO’s job means being treated as a rogue trader if markets go awry, that means bearing the risk while the CEO takes the reward.

Then there are banks. The Caisse d’Epargne fiasco follows a €4.9bn loss at Société Générale in January, allegedly because of unauthorised trading by Jérôme Kerviel. A few months earlier, Calyon, the investment banking arm of Crédit Agricole, had fired a trader over a €250m loss.

Each of these banks was a relative newcomer to the investment banking party. SocGen built up its derivatives arm from the mid-1990s and Crédit Agricole and Caisse d’Epargne were originally rural savings banks.

Now they look like country cousins who got taken for a ride in the big city. The Caisse d’Epargne fiasco reminds me of Abbey National, the UK building society that became a bank then used its balance sheet to buy high-yield bonds and frittered away £256m in 2001.

These banks were, like Mr Leeson, breaching their natural trading limits on an epic scale. Having watched as investment banks profited from trading, they decided to have a go themselves. In doing so, they joined many institutions, from Wall Street banks such as Citigroup and Morgan Stanley, to Asian institutions such as Citic Pacific, to industrial companies that hedged currencies, which failed to understand the risks.

There are varying degrees of blame. I put companies that were exposed to currency movements and tried to control earnings volatility on the low end of the scale and savings banks that fancied a punt at the other.

These were, however, decisions taken by the institutions themselves, not by one or two rogue traders or finance directors. Some limits may have have been broken but the essential problem is that the limits were lax. It did not take a rogue to cause trouble.

Oct. 23 (Bloomberg) -- Hedge funds closures will eliminate about 30 percent of the industry, and policy makers may need to shut markets for a week or more to stem panic, according to presentations at an investor conference today in London.

``In a fairly Darwinian manner, many hedge funds will simply disappear,'' Emmanuel Roman, co-chief executive officer at GLG Partners Inc., told the Hedge 2008 conference in London. U.S. regulators will ``find a way to force regulation,'' said Roman, 45, who runs New York-based GLG with Noam Gottesman, 47. The firm was founded 13 years ago as a unit of Lehman Brothers Holdings Inc. and now manages about $24 billion in assets.

Nouriel Roubini, the New York University Professor who spoke at the same conference, said hundreds of hedge funds will fail as the crisis forces investors to dump assets. ``We've reached a situation of sheer panic,'' said Roubini, who predicted the financial crisis in 2006. ``Don't be surprised if policy makers need to close down markets for a week or two in coming days.''

Many hedge funds have resisted oversight by the U.S. Securities and Exchange Commission, even as policy makers coordinated global interest-rate cuts and bailed out banks this month to try and stem the crisis. The hedge fund industry is stumbling through its worst year in two decades and posted its biggest monthly drop for a decade in September.

``There needs to be some scapegoats, and they are going to go hunt people,'' said Roman, who didn't indicate when new U.S. regulation may take effect. Regulation is ``long overdue,'' he said. In the U.S., ``someone can graduate from college on a Friday and start a hedge fund on a Monday.''

Increased regulation and higher borrowing costs will make the hedge-fund business more difficult, Roman said. Still, financial markets have ``overshot,'' he said.

In some areas of financial markets, including loans, there are ``once-in-a-lifetime opportunities,'' he said. ``At some point, people will say this isn't 1929 to the power of 10.''

Roubini, a former senior adviser to the U.S. Treasury Department, forecast this Feburary a `catastrophic' financial meltdown that central bankers would fail to prevent and that would lead to the bankruptcy of large banks exposed to mortgages and a ``sharp drop'' in equities.

The comments preceded the collapse of Bear Stearns & Cos. and Lehman Brothers Holdings Inc. as well as the government seizure of Freddie Mac and Fannie Mae. The Dow Jones Industrial Average, a benchmark for American equities, has lost 37 percent this year, including its biggest daily drop in more than twenty years on Oct. 15.

He predicted earlier this month that the world's biggest economy will suffer its worst recession in 40 years.

``This is the worst financial crisis in the U.S., Europe and now emerging markets that we've seen in a long time,'' Roubini said. ``Things will get much worse before they get better. I fear the worst is ahead of us.''

Developing nations' borrowing costs jumped to the highest in six years today as Belarus joined Hungary, Ukraine and Pakistan in seeking a bailout from the International Monetary Fund to help weather frozen money markets and a slump in commodities. Argentina risks defaulting for the second time this decade.

``There are about a dozen emerging markets that are now in severe financial trouble,'' Roubini said. ``Even a small country can have a systemic effect on the global economy,'' he added. ``There is not going to be enough IMF money to support them.''

Italian Prime Minister Silvio Berlusconi roiled international markets on Oct. 10, first saying world leaders were discussing shutting down global financial exchanges, and then saying he didn't mean it.

Hedge funds are mostly private pools of capital whose managers participate substantially in the profits from their speculation on whether the price of assets will rise or fall.

Für die Finanzkrise sind sie nicht verantwortlich, doch die Folgen verspüren sie besonders heftig: Die Aktienmärkte der Schwellenländer brechen derzeit auf breiter Front ein, die Währungen geraten unter Druck, Staatspleiten drohen. Das verwundert – denn viele Länder stehen eigentlich besser da als die Industriestaaten.
Wie ein Steppenbrand frisst sich die Finanzkrise durch die Welt und reißt immer mehr Schwellenländer in den Abgrund. Gestern musste Weißrussland beim Internationalen Währungsfonds um einen Notkredit nachsuchen, genau wie zuvor schon Ungarn, die Ukraine und Pakistan. Argentiniens Präsidentin Cristina Fernandez de Kirchner wiederum will offenbar mit dem Geld aus dem privaten Rentensystem den Staatsbankrott verhindern – es wäre der zweite innerhalb eines Jahrzehnts.

Diese Länder kommen unter Druck, weil sie in ihrem Staatshaushalt und ihrer Leistungsbilanz hohe Defizite aufweisen. Sie sind dadurch stark von ausländischem Kapital abhängig, das jedoch nun aufgrund der Finanzkrise abgezogen wird. Dadurch kommt die Währung unter Druck, was den Abzug des Kapitals noch beschleunigt – ein Teufelskreis kommt in Gang.

Doch die Investoren ziehen ihr Kapital nicht nur aus den schwächeren Ländern ab. Vielmehr flüchten sie derzeit geradezu panisch aus allen Schwellenländern, selbst aus jenen Ländern wie China, die hohe Devisenreserven und riesige Handelsbilanzüberschüsse vorweisen können. „Was gerade passiert, ist vollkommen irrational“, sagt Wojciech Stanislawski, Manager des Magellan-Fonds, eines der größten Fonds, die in Schwellenländer investieren (WKN: 577954). Fundamental stünden viele dieser Länder wesentlich besser da als Europa und die USA: Die Staatshaushalte sind in Ordnung, die Banken haben kaum faule Kredite, die Konsumenten sind nicht überschuldet.

Doch all dies spielt derzeit offenbar keine Rolle. Die Kurse an den Börsen in Shanghai, Rio de Janeiro, Moskau oder Bombay brechen dennoch Tag für Tag auf breiter Front ein, und zwar noch weitaus stärker als in den Industriestaaten. Insgesamt haben Aktien in den Schwellenländern in diesem Jahr schon 59 Prozent verloren, gegenüber „nur“ 43 Prozent in den Industriestaaten. „Es sind vor allem große institutionelle Investoren, die verkaufen“, sagt Stanislawski. Hedgefonds, die auf Kredit spekuliert haben, müssen nun alles abstoßen, um ihre Kredite zurückzahlen zu können. Dass es die Schwellenländer bei diesem Ausverkauf stärker trifft als die entwickelten Länder, hat einen einfachen Grund: „In den vergangenen Jahren haben sich diese Börsen besonders gut entwickelt und so war es dort besonders vielversprechend Aktien auf Kredit zu kaufen.“

Einige Länder wie Russland haben aber auch selbst dazu beigetragen, dass ausländische Investoren die Flucht ergriffen. Als Ministerpräsident Putin im Juli den Bergbaukonzern Mechel beschuldigte, Steuern hinterzogen zu haben, fürchteten viele, dass eine Zerschlagung wie beim Ölkonzern Yukos droht. Durch den Konflikt mit Georgien im August beschleunigte sich die Kapitalflucht. Und da Russland weiterhin stark von Ölexporten abhängig ist, wirkte auch der Ölpreisverfall negativ. Nun rächt sich, dass das Land in den vergangenen Jahren versäumte, seine Wirtschaft zu diversifizieren.

China dagegen leidet vor allem unter dem einbrechenden Export. Dies führte dazu, dass die Wachstumsrate im dritten Quartal auf neun Prozent zurückgegangen ist. Damit lag sie zum ersten Mal seit drei Jahren unter zehn Prozent. Experten warnen aber, dies überzubewerten. „Es liegt auf der Hand, dass Wachstumsraten über zwölf Prozent nicht nahhaltig sein können“, sagt Christian Hoffmann, der von Peking aus den FIVV Aktien China Fonds (WKN: A0JELL) berät.

Er, wie auch viele andere Schwellenländerexperten, glauben, dass China noch am ehesten die Kraft hat, sich gegen die weltweite Rezession zu stemmen. Es verfügt über einen ausgeglichenen Haushalt und Devisenreserven von zwei Billionen Dollar. Einige Maßnahmen hat die Volksrepublik auch bereits ergriffen. „Um die Exportaktivität der Unternehmen zu unterstützen, reagiert die Regierung vor allem mit Vergünstigungen bei der Mehrwertsteuerrückerstattung“, sagt Hoffman. Darüber hinaus gibt es Programme zur Stützung des Immobilienmarktes und zur Stärkung des inländischen Konsums.

Ähnlich positiv sehen viele auch die Aussichten für Brasilien und teilweise auch für Indien. Allerdings spielen solche Fakten derzeit offenbar keine Rolle. Vielmehr fallen die Anleger in alte Denkmuster zurück, wonach Schwellenländer risikobehafteter seien als Industriestaaten. „Wir dachten, Schwellenländer würden von den Investoren inzwischen als genau so resistent angesehen wie die entwickelten Staaten“, sagt Stanislawski. Tatsächlich hatten sich die Risikoprämien für Aktien oder Staatsanleihen dieser Staaten in den vergangenen Jahren weitgehend jenen der entwickelten Staaten angepasst. Nun wird die Zeit jedoch offenbar zurückgedreht. Ob zu Recht, steht dabei auf einem anderen Blatt.

So schaffen wir den Ausstieg aus dem Kasinokapitalismus - über Verstaatlichung, Finanzkonversion, Nachhaltigkeitsfonds, ökologischen Umbau, sicheren Kredit, Kapitalverkehrssteuer?...

Da wird vor aller Augen ein Land verbankt. Bisher kannten wir die neoliberale Privatisierung staatlicher Dienste. Nun aber organisiert die Bankenlobby um UBS, Bankenkommission und Nationalbank den direkten Raubzug auf das öffentliche Gut.

Eigentlich nicht erstaunlich: Der Finanzkapitalismus Version 2.0 nährt sich aus der systematischen Plünderung der in Generationen erwirtschafteten Substanz. Er ist Enteignungsökonomie - seit wenigen Jahren verschärfte Enteignungsökonomie, weil sich die Finanzkonzerne mit den Derivaten faktisch das Recht herausnehmen, Geld zu schöpfen. Und zwar grenzenlos: eine Million Milliarden in den letzten fünf Jahren. Damit sollte jede künftig geschaffene Substanz schon im Voraus konfisziert werden.

Freilich bricht nun die Kreditkette an manchen Stellen. Folgerichtig wird in die Reserve gegriffen: die Staatskasse. Selt-sam nur: In schöner Einmütigkeit wird das als Rückkehr des Staates in die Wirtschaft, gar als «Sozialismus» gefeiert.

Immerhin tun sich gerade ein paar Fenster auf. Weil die heftig agierenden Finanzer und Regiererinnen rund um den Globus nicht einmal die Beschleunigung der Krise stoppen können, weil diese Krise also jeden Tag ein bisschen mehr wie ein historischer Bruch aussieht und weil staatliche und politische Institutionen auch ein Eigenleben haben, tut sich unvermittelt die Chance einer grossen Debatte auf - und vielleicht sogar die Möglichkeit einer neuen Praxis.

Linke Politik muss sich in dieser Situation dreifach messen: Zum einen daran, dass sie die ärgsten Folgen der Krise für die Arbeitenden, für RentnerInnen, sozial Schwache abwendet. Zum anderen muss sie eine kritische, produktive Finanzplatzpolitik entwickeln, welche die Bankenmacht bricht und die Risiken bannt, die von diesem hypertrophen Finanzplatz ausgehen. Vor allem aber ist dies ein einzigartiger Moment, um ein Projekt auf die Tagesordnung zu setzen, das Wirtschaft und Gesellschaft um die Arbeit (nicht nur um die Lohnarbeit) und die reale Produktion neu fundiert. Ich nenne es hier einmal Transkapitalismus. Konkret:

- Sofortige Kaufkraftsicherung durch Lohnerhöhungen und Bundesbeschlüsse, welche Preissteigerungen beim Strom, bei den Krankenkassen und so weiter, begrenzen, schliesslich durch ein Impulsprogramm. Gleichzeitig sollte die Linke schnell einen gesetzlichen Mindestlohn anstreben in allen Branchen, in denen kein GAV besteht.

- Schutz der Renten: Die Pensionskassen haben in der Krise bisher mindestens 70 Milliarden verloren - und es könnten noch deutlich mehr werden. Wahrscheinlich lagern bis zu 150 Milliarden an Trash-«Wertpapieren» in den PK. Die Sanierung dieser Posten muss in ein umfassendes Bundesprogramm einfliessen, das die Entkoppelung der Sozialversicherung vom Finanzkapitalismus anstrebt. Das braucht neue Investitionsvorschriften. Sofort handeln können die Gewerkschaften, die in den Stiftungsräten mitverwalten: Sie sollten einen Kriterienraster für die Investitionen aufstellen und durchsetzen. Und über einen eigenen Nachhaltigkeitsfonds nachdenken. Zugleich ist die AHV erst zu stärken, dann zur Volkspension auszubauen. Die zweite Säule muss in die AHV überführt werden, die Volkspensionskasse kann einen Teil ihrer Gelder in nachhaltigen Fonds anlegen (Mischform).

- Grossbanken zerschlagen. Die öffentliche Hand muss eine dominierende Beteiligung an UBS und, bei erster Gelegenheit, auch am Credit Suisse übernehmen. Notfalls Verstaatlichung durch Parlamentsbeschluss. Dann muss die Finanzkonversion, also die Zerschlagung der beiden Grossbanken, angegangen werden. Sorgfältig: Verkauf von Teilen der Banken (zum Beispiel Investmentbanking), Auslagerung des Devisenhandels (über die UBS laufen rund zehn Prozent des globalen Währungshandels) und, entscheidend: der Transfer der Geschäftskonten, Kredite und so weiter von rund 180?000 Klein- und mittelständischen Unternehmen (KMU) an die Kantonalbanken.

- Sicherer Kredit: Die BürgerInnen, die KMU, der ökologische Umbau brauchen einen Finanzplatz, der den Kredit für die Realwirtschaft sicherstellt. Die Kantonalbanken könnten der Kern die-ses neuen Finanzplatzes sein. Voraus-setzungen: Sie werden wieder voll verstaatlicht und einem eidgenössischen Kantonalbankengesetz unterstellt, das die heute gängigen hochspekulativen Praktiken mancher Kantonalbanken beendet. Gleichzeitig werden alle Kleinban- kenformen neu geregelt und privilegiert. Der kooperative Kredit wird gefördert.

- Kapitalverkehrssteuer und Nachhaltigkeitsfonds: Um den ökologischen Umbau und die Neufundierung der Wirtschaft anzutreiben, sollten wir einen grossen Nachhaltigkeitsfonds oder Konversionsfonds ins Spiel bringen. Der Fonds müsste aus einer Kapitalverkehrssteuer gespeist werden (Tobin-Steuer oder andere Formen). 0,2 Prozent würden schon Milliarden bringen, ohne das Kapital zu kratzen. Die Banken, welche die Konversionscharta mittragen, könn-ten aus diesem Fonds Mittel beziehen. Wer aber würde über die Vergabe der Fondskredite und Kapitalien entscheiden? Zum Beispiel ein neu zu gründender Wirtschafts- und Sozialrat.

- Kurze Leine fürs Finanzkapital: Keine Frage: Das Finanzkapital muss scharf reguliert werden. Teilweise kann das nur international geschehen. Aber das ist auch eine wohlfeile politische Ausrede. Tatsächlich gibt es grosse Spielräume für nationale Verordnungen. Konkret: Sofortige Novelle des Kollektivanlagengesetzes, völliger Umbau der Finanzmarktaufsicht (Finma), die ab dem 1. Januar 2009 im Amt ist, Unterstellung der Finma und, zentral, der Nationalbank unter den Wirtschafts- und Sozialrat. Weiter: Bei der Diskussion etwa eines Hedgefondsverbots (notwendig) oder von Transparenzvorschriften (ebenso notwendig) wird gerne eine wirksame Methode vergessen: die Verknappung und die Verteuerung frischen Geldes für das Finanzkapital. Dies kann sehr leicht erreicht werden, wenn die Pensionskassen neu aufgestellt und die Nationalbank politischer Kontrolle unterstellt sind.

Diesen Vorhaben ist gemein, dass sie keinen fundamentalen Systembruch suchen - und doch die kapitalistische Profitwirtschaft ritzen. Mehrheiten gibt es dafür nur, wenn wir sie als untergeordnete Bestandteile eines umfassenden Projekts für eine bessere Wirtschaft und bessere Arbeit in einer besseren Gesellschaft zum Vorschlag bringen. Heute unterliegt die Gesellschaft einer zwar brechenden, aber noch starken neo-liberalen Hegemonie. Die Vision einer anderen Gesellschaft ist erst wirksam, wenn sie anziehungsfähig ist, also Gemein- wie Eigensinn entfesselt. Das vergessen wir gerne (gerade in dieser Unterlassung liegt ein Stück Hegemonie).

Misslingt uns aber in der gegenwärtigen Krise die glaubhafte Darstellung von Wegen aus der Krise, erledigt sich die Linke selbst. Die vierte Rechte und ihr autoritäres Projekt gewännen. Also:

- Ökologischer Umbau. Bessere Arbeit. Soziale Innovation. Öffentliche Güter: Die ökologische Wende hat schon ohne uns begonnen. Der Kapitalismus wird gerade reindustrialisiert. Es ist unsere Aufgabe, diesen Umbau zur Grundlage eines anderen gesellschaftlichen Projekts zu machen. Das bedeutet erst einmal pragmatische Dinge wie ein Nationales Industrieprogramm für den ökologischen Umbau und eine Bildungsoffensive. Erneuerbare und dezentrale Energien, Schiene und öffentlicher Verkehr, Energieeffizienz, «green nano» - das ganze Programm. Statt Milliarden in Finanzkonzernen zu verbraten, könnte ein Kompetenzzentrum diese Entwicklungen anstossen. Jede öffentliche Hilfe müsste an soziale Innovation und bessere Arbeit, Ausbildung und Weiterbildung, Wirtschaftsdemokratie und Open-Source-Öffnung des Unternehmens gebunden sein. Der Beitrag des Unternehmens zur Mehrung öffentlicher Güter wäre die Messgrösse für das Zinsniveau seines Kredits. Dezentralität, kooperative Formen, Care-Arbeit, internationale Zusammenarbeit würden belohnt. Hier deutet sich schon der transkapitalistische Übergang an: Nicht mehr der Profit des Kapitals stünde im Vordergrund, sondern die reale Wertschöpfung, ihre andere Verteilung und die Zentralität der Arbeit. Dann wäre es nur noch ein Schritt zu einem neuen Arbeitsbegriff, der sich von der Lohnarbeit ab- und der gesellschaftlichen Arbeit zuwendet.

Dieser Beitrag ist die aktualisierte und erweiterte Fassung eines Beitrages zur Sommeruni 2008 von Attac.

Die handstreichartige Rettung der UBS nahm den ursprünglichen Plan des US-Finanzministers Henry Paulson zum Vorbild. Der Verkauf von Ramschpapieren wäre das bevorzugte Lösungsmodell der US-Bankenlobby gewesen. Doch dieser Plan wird in den USA nicht umgesetzt; das Parlament fügte einen Passus ein, der die direkte Kapitalisierung der Banken, also den Kauf von Aktien, ermöglicht. Zunächst sollen 250 Milliarden Dollar dazu verwendet werden, die Banken direkt zu kapitalisieren.

Damit folgen die USA wie europäische Staaten dem Vorbild Britanniens. Überall werden die staatlichen Mittel dazu verwendet, das Eigenkapital der Banken zu stärken, so dass sie die Abschreiber auf den «giftigen» Derivaten überstehen. Die Staaten können als Aktionäre direkt Einfluss auf die Geschäftsführung nehmen und profitieren, falls sich die Banken erholen. Als Vorbild für diese Art der Bankenrettung dient Schweden. Durch eine temporäre Verstaatlichung der Banken hat das Land seine hausgemachte Bankenkrise Anfang der neunziger Jahre ohne Kosten für das Staatsbudget gelöst (vgl. Seite 10).

Dass der Skandalbank UBS mit staatlichen Mitteln aus der Patsche geholfen wird, ist nicht das Problem. Die Bedeutung der UBS im Interbankenmarkt, auf dem Arbeitsmarkt und als Kreditgeberin hätten einen Kollaps zu gefährlich gemacht. Die Art der Rettung ist hingegen eine Katastrophe. Die Nationalbank gibt einen Kredit von 54 Milliarden Dollar an eine Zweckgesellschaft in der Steueroase Cayman Islands, die der UBS die faulen Derivate abnimmt.

Alle namhaften US-Ökonomen kritisierten am Paulson-Plan, dass der Wert der problematischen «Wertpapiere» gegenwärtig nicht bestimmbar ist. Da es keine Käufer gibt, gibt es auch keine Preise. Mit der Schweizer Lösung werden die Papiere zu jenem Wert übernommen, zu dem sie die UBS in ihrer Bilanz stehen hat. Wenig Vertrauen weckt in diesem Zusammenhang der Bericht der Eidgenössischen Bankenkommission (EBK) zur Subprime-Krise, der am Tag der Rettung publiziert wurde. Darin wird «ein zu unkritisches Vertrauen in die bestehenden Mechanismen zur Risikoerfassung» als «schwerwiegendes Versäumnis der Bank» kritisiert.

Den Rettungsplan hat eine Taskforce bestehend aus Eugen Haltiner (EBK), Philipp Hildebrand (Nationalbank) und Peter Siegenthaler (Finanzverwaltung) ausgeheckt. Haltiner hat bis zu seinem Wechsel ins Direktorium der Eidgenössischen Bankenkommission 2005 während mehr als dreissig Jahren für die UBS gearbeitet, und Hildebrand war Hedgefondsmanager, bevor er zur Nationalbank stiess.

Laut dem Mediencommuniqué der UBS (nicht aber laut jenen des Finanzdepartements und der Nationalbank) soll die Nationalbank bei Verlusten maximal hundert Millionen UBS-Aktien erhalten. Das entspricht gegenwärtig zwei Milliarden Franken. Alle Verluste darüber hinaus trägt die Nationalbank. Sie hat explizit keine Rückgriffsmöglichkeit auf allfällige Gewinne der UBS. Wie Peter Siegenthaler zu behaupten, dass sich die UBS-Rettung «letztlich selbst finanziert», ist entweder sträflich optimistisch oder schlicht gelogen.

Der grösste Teil des UBS-Giftmülls, den die Nationalbank übernimmt, sind Derivate, die sich auf private und geschäftliche US-Hypotheken beziehen. Ihre Verkäuflichkeit und ihr Wert hängt von der weiteren Preisentwicklung auf dem US-Immobilienmarkt ab. Die US-Immobilienpreise sind vor der Krise um 85 Prozent angestiegen. Inzwischen sind sie aber erst um 20 Prozent gefallen. Es braucht also wenig Fantasie für die Voraussage, dass sie in der sich abzeichnenden schweren Rezession noch weiter fallen werden. Damit bleiben die UBS-Papiere unverkäuflich, oder sie können nur mit weiteren Preisabschlägen verkauft werden. Trotz der Gefahr, völlig danebenzuliegen, sei die Schätzung gewagt: Die Nationalbank wird in diesem Deal mindestens zwanzig Milliarden Franken verlieren.

Der Plan des Bundesrates und der Nationalbank hat noch einen zweiten Teil. Die UBS kann ihren Anteil an der Zweckgesellschaft in der Höhe von sechs Milliarden Dollar nicht selbst aufbringen. Deshalb stärkt der Bund das Eigenkapital der UBS mit sechs Milliarden Franken. Aber nicht durch den Kauf von Aktien, sondern mit einer Pflichtwandelanleihe. Damit wird der Bund erst in zweieinhalb Jahren zum Aktionär der UBS.

Der Bundesrat verzichtet darauf, Einfluss auf die UBS zu nehmen. Andernfalls könnte eine politische Debatte darüber entstehen, wie die UBS in Zukunft aussehen soll. Wäre es nicht längst überfällig, das Investmentbanking abzustossen? Ebenso müsste der Verkauf des Private Bankings (Vermögensverwaltung für sehr reiche Kundschaft) geprüft werden. Es gibt keinen vernünftigen Grund dafür, warum die grösste Vermögensverwaltungsbank der Welt eine Schweizer Bank sein muss.

Durch einen Verkauf könnte der Bund nicht nur seine Kosten decken, es entstünde auch eine sehr viel kleinere regionalisierte UBS, bei der das Schweizer Kreditgeschäft eine wichtigere Rolle spielen würde. Damit wäre endlich auch das Klumpenrisiko von zwei Grossbanken in der Schweiz entschärft.

Die UBS könnte weiter für die Her-ausforderungen der Zukunft fit gemacht werden. Für eine Halbierung der CO2-Emissionen bis 2050 sind weltweit Investitionen von über 50 Billionen Franken nötig. Statt Schuldenkarussel-le zu finanzieren, könnte die UBS zur Um-stellung auf einen energie- und roh- stoffeffizienten, klimaschonenden Produktions- und Lebensstil beitragen. Die Chance, das Heft in die Hand zu nehmen, hat der Bundesrat letzte Woche vertan.

Andreas Missbach arbeitet bei der entwicklungspolitischen Organisation Erklärung von Bern zum Thema Banken und Finanzplatz Schweiz.

Man mag die Märkte als verrückt bezeichnen, wenn die globalen Börsenbarometer im Gleichklang an einem Tag zehn Prozent verlieren und Öl wie Euro mit in den Keller rauschen. In normalen Zeiten – oder besser gesagt in Zeiten, die bis vor kurzem noch als normal galten – würde man angesichts der Ausverkaufsstimmung langfristig ausgerichteten Anlegern empfehlen, wieder einzusteigen.
Doch es sind keine normalen Zeiten mehr. Was sich derzeit an den Börsen abspielt, ist mehr als Panik und Zockerei. Es ist Ausdruck vollständiger Orientierungslosigkeit. Die Investoren haben jedes Gefühl dafür verloren, was Banken, Unternehmen und Rohstoffe wirklich wert sind. Denn niemand weiß, wie die Zeit nach den großen staatlichen Rettungspaketen, mit denen die Kernschmelze im Finanzsektor abgewendet werden sollte, aussehen wird. Fest steht nur: Die Gewinnerwartungen an Unternehmen, allen voran an Banken, müssen bescheidener ausfallen. Und deshalb kann derzeit auch niemand sagen, ob die Aktiengesellschaften rund um den Globus zu billig, genau richtig bewertet oder doch noch zu teuer sind.

So wichtig die entschiedene Intervention der Politik war, um dem Versagen des Marktes in der Bankenwelt ein Ende zu setzen, so verschlimmern Politiker nun mit ihrem Verhalten die Krise. Im Gefühl, endlich beweisen zu können, dass man doch handlungsfähig ist, schießen die Regierenden in vielen Ländern weit übers Ziel hinaus. Beängstigend ist das Tempo, in dem der französische Präsident Nicolas Sarkozy seine absurde Idee eines Staatsfonds in die Realität umgesetzt hat. Der teilweise naive Glauben der Politik, nicht nur die Rolle des Schiedsrichters, sondern auch die eines starken Spielers ausfüllen zu müssen, droht nun zur größten Wachstumsbremse zu werden.

Das verunsichert Manager wie Kapitaleigner, die über Investitionen entscheiden. Denn je enger das Korsett ist, das den Märkten nun verpasst wird, desto geringer wird auf Dauer der Wohlstand ausfallen. Die größte Gefahr für die Weltwirtschaft sind nicht mehr wild gewordene Börsen, sondern allzu straffe Zügel der Politik, die der Globalisierung ein Ende setzen könnte.

Dabei sind die Chancen der Weltwirtschaft, dieser Rezession zu entkommen, eigentlich besser als sie es je zuvor waren. Mehr Volkswirtschaften und mehr Menschen nehmen am globalen Markt teil. Der Aufholbedarf im einstigen Ostblock und in Asien ist gigantisch. Davon können auch die westlichen Länder profitieren. Das aber scheinen die meisten Politiker ganz und gar vergessen zu haben.

MOSCOW -- Russia's currency fell to a new two-year low despite billions being spent by Moscow to prop it up, and the country's fast-shrinking mountains of reserves and oil revenues threatened to reduce its credit rating, a key marker of its recent resurgence.

The new wave of problems -- coming on top of a stock market fall of 70% from its May peak -- highlights how quickly the global financial crisis has reversed Russia's fortunes. Worried about the turmoil, Russians have hurriedly taken to converting their ruble savings into dollars and euros, driving street exchange rates even lower than the official one.

Russia's surging economic growth had fueled the Kremlin's increasingly assertive stance -- against what it called an overly expansive U.S -- in global politics, energy policy and even its military move into neighboring Georgia.

But in a matter of weeks, the financial turmoil has altered the architecture of Russia's economy. It has forced some of the country's mightiest industrial companies and tycoons to sell off assets and seek bailouts, and thrown a shadow over the finances of the government itself.

Russia's gold and foreign exchange reserves fell by $15 billion last week alone, its central bank said Thursday, to $515.7 billion from a total that had neared $600 billion in early August. This week's rate of decline would drain it by an additional $150 billion if not slowed by the end of the year, and an official from one major Western bank predicted the central bank will spend even more this week. Another $70 billion is promised from the reserves to a bailout for Russia's financial sector.

With the reserves falling, the cost of insuring Russia's sovereign debt against default has hit records, with credit-default swaps now trading at distressed levels -- above 1,000 basis points, meaning it can cost at least half the amount of the debt to insure it for five years, which is four times what it cost a month ago.

Some Western bankers say their Russian counterparts are cutting back cross-border lending in rubles to stem the outward flow of capital. Top central bank officials called in several heads of Western banks in Moscow last weekend to complain that they were sending rubles injected by the central bank out of the country, according to the Western bank official, who was briefed on the session. A central bank spokesman declined to comment.

A deeper fall in the ruble would be a serious blow to the reputation of Vladimir Putin, who counts a stable currency as one of his crowning achievements since he came to power eight years ago. Millions of Russians saw their savings wiped out by a collapse of the currency with the fall of the Soviet Union, and former President Boris Yeltsin's popularity was all but wiped out when the ruble collapsed again in the Russian financial crisis of 1998 after Mr. Yeltsin promised no devaluation. With past collapses still vivid in the minds of many, analysts say the main pressure on the ruble now is coming from nervous Russians looking for an exit.

On Thursday, the central bank said it would raise interest rates on deposits. The central bank also has taken a series of steps in recent days to make it harder for investors to speculate against the ruble. The Kremlin this week also began buying shares to support the stock market, traders and officials said.

But the slides have continued. The market ended down more than 4% Thursday, while the ruble -- down 2.2% against the dollar this week and 14% since its mid-July peak -- on Thursday slipped again to its lowest in two years, down 0.3% in New York trading.

"They're going to have to do something because nothing is working," said the Western banker. Vladimir Gamza, first vice president at the Association of Regional Banks, said "panicked demand for dollars" was continuing to hurt the ruble.

The drain on Kremlin cash could constrain the government in various ways. Moscow has previously quelled public unrest with government spending, such as in 2005 when it sparked protests trying to curtail social benefits -- and ended up raising pensions and wages, ballooning the federal budget. Russia gets roughly half its budget revenue from oil, so spending will likely have to come down for the first time in years.

Meanwhile, the long rise in world oil and gas prices funneled enormous revenues into the hands of a few business behemoths that Moscow has gradually asserted more control over, bringing more wealth into state hands. Now some of the big energy companies particularly could be strapped for funds. And among the hardest hit in the credit crunch have been Russian tycoons, some closely connected to the government, who borrowed heavily from Western banks on expansion drives and now are seeing their financial empires buckle. One of those, metals magnate Oleg Deripaska, earlier this month dumped his stakes in German construction giant Hochtief, and the Canadian auto parts maker, Magna. Other oligarchs are expected to announce similar sales as they are squeezed by creditors.

When ratings agencies awarded Russia investment-grade status four years ago, Vladimir Putin hailed the move. On Thursday Standard & Poor's Corp. warned it may send Russia back down again, to barely investment-grade status, partly because the rising cost of the Kremlin's financial-sector bailout could strain its once-bulletproof finances. The government has gradually upped its bailout pledges to more than $200 billion, including the $70 billion from the reserves. S&P said Thursday it feared the package could wind up costing much more.

In contrast, Moody's Investors Service Thursday reaffirmed its positive outlooks on Russia's key debt and foreign-currency-deposit ratings, saying a combination of "ample financial buffers and determined policy measures" are enough to overcome the credit crunch. Fitch Ratings reaffirmed its stable outlook on Russia's ratings on Wednesday, but said the crisis has exposed its financial vulnerability. Some analysts say the selling will subside along with the panic in international markets, and that Russia's reserves are ample to weather the storm.

President Dmitry Medvedev devoted his video-blog entry on the Kremlin's Web site Thursday to the financial crisis, saying Russia could avoid the economic damage other countries have suffered from the crisis. "I will tell you honestly, Russia has not yet been caught in this whirlpool and has the opportunity to escape it," Mr. Medvedev said, adding that he plans to accelerate economic reforms so Russia emerges stronger.

With its rainy-day fund of more than half a trillion dollars saved up from its oil and gas revenues in recent years, the Kremlin has repeatedly sought to portray Russia as better protected than most countries from the global storm.

When the credit crunch hit emerging markets in late summer, the Kremlin first predicted that the government's sound finances would make it a safe haven for investors. But Russia's private sector turned out to be highly leveraged -- with its banks even more leveraged than many European banks -- and the stock market was hit by forced selling as banks and tycoons scrambled to raise cash to meet margin calls.

Officials have tried to stem the market rout by repeatedly closing Moscow's two stock exchanges, but selling has continued. Meanwhile, the sharp drop in oil prices in the past few weeks, reaching levels where Russia's budget and trade balance could fall into deficits, has raised fears about how long the huge cash reserve will last.

Russia has in the past few days been awash in rumors of a devaluation of the ruble. Worried the selling could turn to a stampede, government officials have issued a flurry of denials, while some commercial banks have begun to limit the amount of foreign currency they sell at exchange points.

If the selling pressure continues, Russia will have to choose between imposing exchange controls or letting the currency drop, analysts say. The central bank may be more likely to re-impose exchange controls: Letting the ruble drop sharply would be politically difficult because the Kremlin has so far categorically refused to consider it. Moscow in previous years touted the ruble's rise against the dollar as a sign of Russian resurgence and U.S. decline.

"They made the mistake of confusing high oil prices with the genius of their economic management," said Rory MacFarquhar, managing director with Goldman Sachs in Moscow.

Kremlin officials and state-run media have stressed that the U.S. is the epicenter of the financial crisis, and Russia's financial system is fundamentally sound. Some Russians say they believe the crisis was manufactured to undermine Russia's greatness in the same way the West undermined the Soviet Union.

Economists also are warning of a sharp economic slowdown in Russia, which has enjoyed growth as high as 8% in recent years. Next year, that figure could be below 4%, according to some economists, and could fall to zero if oil prices fall to $50 or below and remain there.
—Daria Solovieva, Lidia Kelly and Clare Connaghan contributed to this article.

Zitat von sysop
Werksschließungen in China, Zahlungsnöte in Ungarn, Probleme sogar in Indien: Die Finanzkrise trifft jetzt auch Schwellen- und Entwicklungsländer - obwohl sie keinerlei Schuld tragen. Was muss sich für mehr Gerechtigkeit am globalen Finanzsystem ändern?

Erst mal muessten die Akteure, Motive und Mittel benannt werden:
"Wall Street's 'Disaster Capitalism for Dummies' - 14 reasons Main Street loses big while Wall Street sabotages democracy"
http://www.marketwatch.com/news/stor...ist=TNMostRead
Sobald eine gewisse Anzahl unserer Zeitgenossen ("kritische Masse") durch den orwellschen Schleier sieht, geht der Rest fast von alleine - Wird aber ein ziemlicher Ritt ueber den Bodensee ...

Hinweis vom 25.10.08 auf Beitrag von Tanya Cariina Hsu:
"It all began in the early part of the 20th century. In 1907 J.P. Morgan, a private New York banker, published a rumour that a competing unnamed large bank was about to fail. It was a false charge but customers nonetheless raced to their banks to withdraw their money, in case it was their bank. As they pulled out their funds the banks lost their cash deposits and were forced to call in their loans. People now therefore had to pay back their mortgages to fill the banks with income, going bankrupt in the process. The 1907 panic resulted in a crash that prompted the creation of the Federal Reserve, a private banking cartel with the veneer of an independent government organisation. Effectively, it was a coup by elite bankers in order to control the industry.

When signed into law in 1913, the Federal Reserve would loan and supply the nation's money, but with interest. The more money it was able to print, the more 'income' for itself it generated. By its very nature the Federal Reserve would forever keep producing debt to stay alive. It was able to print America's monetary supply at will, regulating its value. To control valuation however, inflation had to be kept in check.

The Federal Reserve then doubled America's money supply within five years, and in 1920 it called in a mass percentage of loans. Over five thousand banks collapsed overnight. One year later the Federal Reserve again increased the money supply by 62%, but in 1929 it again called the loans back in, en masse. This time, the crash of 1929 caused over sixteen thousand banks to fail and an 89% plunge on the stock market. The private and well-protected banks within the Federal Reserve system were able to snap up the failed banks at pennies on the dollar...

... In 2008, housing prices began to slide precipitously downwards and mortgages were suddenly losing value. Manufacturing orders were down 4.5% by September, inventories began to pile up, unemployment was soaring and average house foreclosures had increased by 121% and up to 200% in California.

The financial giants had to stop trading these mortgage-backed securities, as now their losses would have to be visibly accounted for. Investors began withdrawing their funds. Bear Stearns, heavily specialised in home loan portfolios, was the first to go in March.

Just as they had done in the 20th century, JP Morgan swooped in and picked up Bear Stearns for a pittance. One year prior Bear Stearns shares traded at $159 but JP Morgan was able to buy in and take over at $2 a share. In September, Washington Mutual collapsed, the largest bank failure in history. JP Morgan again came in and paid $1.9 billion for assets valued at $176 billion. It was a fire sale"

Oct. 27 (Bloomberg) -- Morgan Stanley clients withdrew almost one- third of their cash from money-market accounts last month, forcing the firm to buy $23 billion of securities held by the funds to keep them afloat.

Redemptions were $46 billion in September, mostly from funds that invest in corporate debt, Morgan Stanley said in an Oct. 9 regulatory filing. The New York-based company made sure the money-market funds had enough cash to repay investors by acquiring some of their assets with financing from ``various available stabilization facilities.''

Morgan Stanley may have relied on one or more programs set up by the Federal Reserve in the past month to prop up the $3.54 trillion money- market fund industry, analysts said. The Fed has taken steps to restore investor confidence shattered by losses last month at the Reserve Primary Fund, the oldest U.S. money-market fund.

``The outflows in money-market funds were unprecedented, savage'' said Peter Crane, president of Crane Data LLC, a Westborough, Massachusetts, firm that tracks the industry. ``Broker-dealers in particular got hard hit because of concerns about their parent companies.''

Morgan Stanley bought the fund assets to ``ensure that redemption obligations were met amidst illiquid trading markets,'' Erica Platt, a spokeswoman for the firm, said in an e-mailed statement. Fed spokeswoman Susan Stawick declined to comment on whether Morgan Stanley had used central bank financing to aid its money-market funds.

Individuals and institutions use money-market funds to earn a yield until the cash is needed. They are considered the safest investments after bank deposits and U.S. Treasuries, in part because they buy only highly rated fixed-income securities with an average maturity of 90 days or less. That reputation was undermined by the Sept. 15 bankruptcy filing of Lehman Brothers Holdings Inc.

The following day, the $62.5 billion Reserve Primary Fund said it wrote down to zero the value of $785 million of debt issued by the investment bank. That caused its asset value to fall below the $1-a-share purchase price, the first money-market fund in 14 years to break the buck. New York-based Reserve Management Corp. froze the fund.

The news triggered a run on prime money-market funds, which buy both corporate and government debt. Shareholders yanked $488 billion during the month from prime funds, according to data compiled by Westborough-based iMoneyNet.

Morgan Stanley shares fell as much as 69 percent during the week of Lehman's bankruptcy filing to a low of $11.70. The company's money funds have remained at $1 a share ``during the unprecedented market turmoil,'' Platt said in the e-mail.

BlackRock Inc., the biggest publicly traded U.S. asset manager, said last week that investors pulled $53.8 billion from its prime money-market and securities- lending funds during the last two weeks of September. The funds, which have regained $13.8 billion since Sept. 30, met the redemptions with cash on hand and securities sales, according to spokesman Brian Beades.

Morgan Stanley injected cash into its money-market funds by purchasing their investments in municipal debt, certificates of deposit and commercial paper, which had become difficult to sell on the open market, according to its 10-Q filing with the U.S. Securities and Exchange Commission. The move permitted Morgan Stanley's funds to repay shareholders without having to sell the securities at a loss.

Morgan Stanley, which had $134 billion of money-market assets as of Aug. 31, didn't specify in the filing which funds had outflows. According to monthly notices sent to investors, its Prime Portfolio dropped to $10.4 billion from $36 billion during September and its Money Market Portfolio fell to $5.8 billion from $14.7 billion.

Both Morgan Stanley funds had more than 55 percent of assets in commercial paper at the end of August, according to the investor notices. On average, prime money-market funds had about 45 percent of assets in the corporate IOUs at the end of August, according to iMoneyNet.

Platt declined to describe the ``stabilization facilities'' that primarily funded Morgan Stanley's securities purchases from the money- market funds. The most likely source was the Fed, which has set up at least five funding facilities to help ease the credit crunch, including one unveiled Sept. 19 to provide banks and some brokerages with loans to buy asset-backed debt from money-market funds.

In addition, the Fed two days later approved applications by Morgan Stanley and Goldman Sachs Group Inc. to become bank holding companies -- ending the era of stand-alone investment banks -- and increased the availability of loans to the two firms. The Fed announced a Money Market Investor Funding Facility last week that will provide up to $540 billion in loans to buy assets, including commercial paper and certificates of deposit from funds hit with redemptions.

``Morgan Stanley faced the same problem as every other firm: the markets were very illiquid,'' said Brad Hintz, a securities-industry analyst at Sanford C. Bernstein & Co. in New York. ``Its only choice for financing was to go to the Fed.''

To contact the reporters on this story: Miles Weiss in Washington at mweiss@bloomberg.net

Sie tarnten sich als Besucher - und nutzten den Handelssaal der Frankfurter Börse als Bühne für ihren Protest: Attac-Aktivisten demonstrierten mit einem Transparent für die Neuordnung des Finanzmarkts. Doch nach wenigen Minuten war die Aktion schon wieder beendet.

Frankfurt am Main - Mehrere Attac-Aktivisten tarnten sich als Besucher und machten eine Führung durch die Frankfurter Börse. Mittendrin sprangen die Globalisierungskritiker dann plötzlich über die Brüstung der Besuchertribüne auf das Börsenparkett. Dort entrollten sie vor der Dax-Anzeigetafel ein Transparent: "Finanzmärkte entwaffnen! Mensch und Umwelt vor Shareholder Value!"

Der Handel wurde von der Aktion nicht beeinträchtigt. Nach Polizeiangaben handelte es sich um zehn bis zwölf Aktivisten, Attac selbst spricht von 25 Personen. Die Aktion dauerte nur wenige Minuten, dann brachten Sicherheitskräfte der Börse die Gruppe aus dem Gebäude, teilte die Polizei mit. Danach seien die Aktivisten aber verschwunden, so dass die herbeigerufenen Beamten keine Personalien feststellen konnten. Es werde nun wegen Hausfriedensbruchs und Sachbeschädigung ermittelt. Dazu nahm die Polizei sogar die Fingerabdrücke der Demonstranten von der Anzeigetafel.

Mit der Aktion habe Attac ein Zeichen "gegen die Dominanz der Finanzmärkte" setzen wollen, sagte Stephan Schilling vom Attac-Koordinierungskreis. Das Netzwerk kritisiert, dass Aktivitäten der Bundesregierung allein darauf abzielen, "die Finanzmärkte mit gigantischen Mitteln aus der Staatskasse" zu beruhigen.

Mit dem Protest habe Attac der Wut der Menschen über das "Versagen von Banken und Politikern" Ausdruck verleihen wollen. Die aktuelle Bankenkrise sei das Symptom eines Wirtschaftssystems, das alle gesellschaftlichen Ziele dem Profit der Aktienbesitzer unterordne. "Das Casino gehört geschlossen", forderten die Globalisierungskritiker.

Die Regierungen der westlichen Länder überbieten sich gegenwärtig darin, Forderungen nach einer neuen Weltordnung zu formulieren. Einige sehnen das Bretton-Woods-System der Nachkriegszeit herbei. Unfug. Was kann man realistischer von der internationalen Kooperation erwarten? Diskutieren Sie mit!

Dies sind Zeiten für ganz große Pläne. Wenn die Finanzkrise erst eingedämmt ist – und das wird hoffentlich in ein paar Wochen der Fall sein –, werden sich die Regierungen der Welt daran machen, eine neue Weltordnung zu kreieren.

Ende November soll es einen großen Weltfinanzgipfel geben. Dann soll die Welt neu zugeschnitten werden, wie man hört. Von Gordon Brown über Angela Merkel bis zu Nicolas Sarkozy – die Europäer sind dafür. Die Amerikaner wollen mitmachen. Es soll ein historisches Treffen werden, so wie damals in Bretton Woods, jenem Skiort in den Bergen New Hamshires, wo 1944 das Weltwirtschaftssystem der Nachkriegszeit verabschiedet wurde. Ein "Bretton Woods II".

Das klingt zwar alles einleuchtend, denn schließlich durchleben und –leiden wir eine epochale ökonomische Krise. Aber die Frage bleibt offen: Was soll das? Wieviel und welche Zusammenarbeit kann man realistischer Weise für die Zukunft erwarten?

Bretton Woods I ist ein schlechtes Vorbild. Es taugt nicht im Ansatz zur Lösung der heutigen Probleme.
Bretton Woods II gibt es bereits faktisch, wenn auch nicht formal. Es ist eine der Ursachen der derzeitigen Krise.
Wenn überhaupt, dann brauchen wir ein Bretton Woods III.

Das ursprüngliche System von Bretton Woods war der sogenannte Gold-Dollar-Standard. Der US-Dollar war ans Gold gebunden, die übrigen westlichen Währungen mit festen, aber anpassungsfähigen Kursen an den Dollar.

Klingt alles ziemlich geordnet. Die Wechselkurse wären fest und verlässlich. Es gab eine internationale Instanz, den Internationalen Währungsfonds (IWF), der das System überwachte und steuerte.

Allerdings: Das System funktionierte nur unter einer Reihe von Bedingungen, die heute nicht mehr gelten.

Es gab keine offenen Finanzmärkte, sondern Kapitalverkehrskontrollen an den Grenzen. Man konnte nicht einfach sein Geld in anderen Ländern anlegen oder dort Kredite aufnehmen. Finanzen waren weitgehend national.

Es gab nur begrenzte Handelsströme – der Protektionismus der Zwischenkriegszeit war noch weitgehend in Kraft –, so dass auch die mit dem Warenaustausch verbundenen Finanzströme begrenzt waren.

Und es gab ein einziges ökonomisches Zentrum, die USA, das solide und nichtinflationär wuchs. Es war der natürliche Bezugspunkt für den Rest der freien Welt.

All diese Bedingungen sind heute nicht mehr erfüllt. Sie waren schon in den 70er Jahren nicht mehr erfüllt, weshalb das System von Bretton Woods letztlich zerbrach.

Ließe sich heute ein solches System installieren? Auf die dritte Bedingung könnte man verzichten und eine synthetische Bezugsgröße einführen.

Die anderen Bedingungen wären nur unter immensen Kosten zu schaffen: Abschottung der Güter- und Finanzmärkte. Denn bei offenen Grenzen sind die Finanzströme so groß, dass die Notenbanken sie nicht mehr so einfach unter Kontrolle bringen. Die Renationalisierung der Volkswirtschaften würde aber geradewegs ins Desaster führen – wie in den 30er Jahren.

Also: Bretton Woods I taugt nicht für die Zukunft. Es wäre eine restriktive Wirtschaftswelt. Die volkswirtschaftlichen Kosten des Protektionismus und des Verlusts an geldpolitischer Autonomie wären gigantisch.

Eine Art "Bretton Woods II" gibt es bereits, auch wenn es kein offzielles Arrangement ist, sondern ein inoffizielles. China, andere asiatische Länder und die Rohstoffexporteure haben ihre Währungen an den US-Dollar gebunden. Gegen die Aufwertung ihrer Währungen haben sie Dollars aufgekauft, so dass sie heute über Währungsreserven verfügen in Dimensionen, die es noch nie in der Weltgeschichte gegeben hat.

Das System war eine Zeitlang durchaus erfolgreich: Dank unterbewerteter Währungen exportierten die Länder in die USA, die diese Waren auf Pump kauften. Und zwar von Geld, das ihnen wiederum die Chinesen und andere liehen. So bauten sich die gigantischen Ungleichgewichte auf – Defizite in den USA, Überschüsse in China und anderswo –, die die Größenordnung der derzeitigen Krise erst möglich machten.

Anders gewendet: Hätten die Amerikaner keinen Zugang zu billigen Krediten aus Asien und Arabien gehabt, wäre eine derart große Hauspreisblase nicht entstanden, hätte es keine Subprimekrise gegeben, wäre der Geldmarkt nicht komplett zusammengebrochen.

Wahr ist: Ohne Bretton Woods II wäre der globale Boom der vergangenen Jahre nicht möglich gewesen.

Wahr ist auch: Ohne Bretton Woods II hätte es keine Krise des derzeitigen Ausmaßes gegeben.

Bretton Woods II funktionierte, solange diese Volkswirtschaften relativ klein waren. Inzwischen sind sie aber zu solcher Größe heran gewachsen, dass sie die Welt mit Liquidität fluten und zu extremen Preisverzerrungen beitragen.

Also, brauchen wir ein Bretton Woods III? Und wenn ja: Wie könnte das aussehen?

Zunächst mal sprechen all die Lehren aus dem aktuellen Desaster, die ich kürzlich an dieser Stelle aufgelistet habe (...mehr), dafür, verantwortungsvolle und starke nationalstaatliche Institutionen mit der Bankenaufsicht zu betrauen. Die nationalen Notenbanken und Finanzmarktregulierer wissen am besten, was bei den heimischen Instituten los ist. International agierende Institute müssen eng kooperierende Teams aus Regulierern verschiedener Nationalität prüfen.

Auch die Geldpolitik müssen die nationalen, beziehungsweise im europäischen Fall, supranationalen Notenbanken gemäß der jeweiligen Erfordernisse betreiben.

Was die Eigenkapitalanforderungen und Bilanzierungsrichtlinien angeht, braucht man internationale Standards. Die gibt es bereits: "Basel II". Dieses Regelwerk kann und muss man neu kalibrieren, also strikter auslegen. Man kann es auch um eine antizyklische Komponente erweitern, die von den Notenbanken eingestellt wird.

Also: Gebraucht wird eine intensivere Kooperation der Aufsichtsbehörden und Notenbanken. Auch eine Art internationale Aufsicht der nationalen Aufseher, um Risiken zu erkennen und Wettbewerbsverzerrungen auszuschließen, wäre wünschenswert.

Vor allem bedarf es einer Aufsicht der Wechselkurspolitiken. Fixkurs-Strategien, wie sie China betreibt, wirken langfristig destabilisierend. Ein solcher Kurs sollte international geahndet werden; falls die beteiligten Staaten mit Argumenten nicht zu überzeugen sind, sollten auch Sanktionen möglich sein.

Beides sind Aufgaben – Aufseher der Aufseher und Wechselkurs-Aufsicht –, für die der Internationale Währungsfonds prädestiniert ist.

Und wenn die Weltgemeinschaft dann noch etwas Gutes tun will, sollte sie die WTO reformieren. Das Einstimmigkeitsprinzip, das die Institution lähmt, muss weg – sonst wird die offene Welthandelsordnung nicht aufrecht zu erhalten sein.

Henrik Müller, geschäftsführender Redakteur bei manager magazin, schreibt über wirtschaftspolitische Themen

Russia's foreign minister Sergei Lavrov has announced that Brazil, Russia, India and China will "coordinate efforts in overcoming the financial crisis". The statement suggests that the four countries will confront the dominant US-UK-EU alliance, which personifies Western banking interests, at the forthcoming Summit in Washington.

“We are going to coordinate our moves with the leading emerging economies. We are in direct contact with India, China and Brazil; we are interacting in the BRIC and RIC [Russia-India-China] formats,” he added.

Prime Minister Vladimir Putin said earlier this month the crisis had shown the BRIC nations would be “the locomotive of the world economy in coming years.” (The Hindu, October 26, 2008)

The Finance Ministers and Central Bank Governors of G-20 countries will meet in Sao Paulo in November ahead of the Summit meetings in Washington.

The crucial question: Is there a policy alternative to that proposed by Wall Street and the US Treasury, which might emanate from the BRIC and/or G-20 Summit discussions.

Does the BRIC (Brazil, Russia, India and China) constitute a "Strategic Triangle" as suggested by Moscow's official press dispatch?

It is highly unlikely that an alternative might emerge from the BRIC meetings or the G-20.

While China and Russia retain some degree of economic and financial sovereignty, monetary policy in most developing countries including India and Brazil is under the direct surveillance of Washington and Wall Street.

The Prime Minister of India, Manmohan Singh is a former World Bank official. As Finance Minister in the early 1990s, he carried out the macro-economic reforms imposed on India by the IMF, in close coordination with the Bretton Woods institutions.

The current governor of the Reserve Bank of India Dr. Duvvuri Subbarao is also a World Bank official. He was appointed at a very critical moment on September 5, 2008 at the very outset of the financial meltdown. Duvvuri Subbarao spent ten years at the World Bank in Washington.(1994-2004). Barely two weeks into his mandate as RBI Governor, the Indian stock market collapsed. Dr. Duvvuri Subbarao's inactions as head of the RBI at the height of the crisis, largely contributed to exacerbating capital flight.

"Russia will coordinate its steps for overcoming the financial crisis with India and China" said Russia's Foreign Minister Sergei Lavrov. The BRIC meetings will be held in Sao Paulo prior to the G-20 meetings:

"Lavrov reiterated that a meeting of G-20 finance ministers would be held in Sao Paulo, Brazil, in the first half of November, during which he also planned to meet with the Chinese finance minister. Despite the fact that new centers of economic growth, financial power, and political influence have emerged, Lavrov pointed out, different countries must join efforts to seek ways of overcoming the crisis and preventing it from repeating itself in the future. He also stated that a relevant conference would be held in Washington on November 15. The conference will be extremely important, Lavrov maintained, as all the main players are expected to be there. He stressed, however, that it was vital that they didn't merely gather together, but, more importantly, that they also cooperated with each other." (RBC News, October 26, 2008)

Who will be attending these meetings? What is the relationship between these senior government officials (Central Bank Governors and Ministers of Finance) and the interests of Wall Street?

The president of Brazil's Central bank, Hector Meirelles will play a key role in the Sao Paulo BRIC and G-20 meetings as well as in the November 15th meetings in Washington.

Henrique de Campos Meirelles, appointed head of Brazil's Central Bank in 2003 by "socialist" president Luis (Lula) Ignacio da Silva, happens to be among Wall Streets' most powerful financial figures. Prior to becoming Governor of the Central Bank of Brazil, he was president of global banking and CEO of FleetBoston, the 7th largest bank in the US, which subsequently merged with Bank of America to form the World's largest financial institution.

Appointing the former CEO of a Wall Street bank to head the nation's Central Bank is tantamount to "putting the fox in charge of the chicken coop".

During Henrique Meirelles' earlier mandate as CEO of BankBoston (which later merged to form FleetBoston), BankBoston was one among several Wall Street banks which speculated against the Brazilian Real in 1998-99, leading to the spectacular meltdown of the Sao Paulo stock exchange on "Black Wednesday" 13 January 1999. BankBoston is estimated to have made a 4.5 billion dollars windfall in Brazil in the course of the Real Plan, starting with an initial investment of $100 million. (Latin Finance, 6 August 1998).

In the ongoing financial meltdown, the loss of Brazil's forex reserves has been dramatic. Hector Meirelles has, in this regard, served the interests of Wall Street. In less than a month, some 22.9 billion dollars of Central Bank forex reserves have been lost in the form of capital flight. (Bloomberg, October 26, 2008) As dictated by the Washington Consensus and implemented by the Central Bank under the helm of Hector Meirelles, there are no effective foreign exchange controls in Brazil which might protect the Real from the speculative onslaught:

Sales of reserves to buy reais in the spot market totaled $3.2 billion from Oct. 8 through Oct. 20, central bank President Henrique Meirelles said in testimony before congress late yesterday. The other types of intervention, including loans and currency swaps, don't affect the level of reserves....

Brazilian policy makers were forced to draw on record reserves of more than $200 billion after risk-adverse investors pulled money out of emerging markets, causing the worst tumble in the Brazilian real since the 1999 devaluation.

The real has lost a third of its value against the dollar since reaching a nine-year high Aug. 1, causing some of the biggest companies to report more than 5 billion reais ($2.2 billion) of losses from bad currency bets. The benchmark stock index is down 32 percent in the period.

In a decree published today, President Luiz Inacio Lula da Silva authorized the central bank to engage in currency swap transactions with foreign central banks. Officials at the central bank in Brasilia weren't immediately available to comment, according to the press office. (Bloomberg, October 26, 2008)

Moreover, the Brazilian government has emulated the US Treasury in setting up a bailout for Brazilian banking institutions, most of which are in fact controlled by foreign banks (American and European).

Brazil's Finance Minister Guido Mantega will be chairing the Group of 20 (G-20) meeting.

Federal Reserve Chairman Ben Bernanke (L), U.S. Secretary of the Treasury Henry M. Paulson Jr. (2nd-L), Brazil's Finance Minister Guido Mantega (2nd-R), president of Brazil's Central Bank Henrique Meirelles (R) and U.S. President George W. Bush (3rd-R) attend the International Monetary and Financial Committee meeting at IMF Headquarters October 11, 2008 in Washington, DC. Financial ministers and financial institution heads are in Washington for the annual meetings.

The G-20 countries/union are made up of the G-8 (US, UK, France, Germany, Japan, Canada, Italy, Russia) and the G-11 (Argentina, Australia, Brazil, China, India, Indonesia, Mexico, Saudi Arabia, South Africa, South Korea, Turkey) plus the European Union. (The G-8 is the G-7 plus Russia).

Most of the G-11 countries, are heavily indebted to Western creditors. The neoliberal consensus prevails. With perhaps the exception of Australia and Saudi Arabia, these countries obey the diktats of the Bretton Woods institutions and Wall Street.

There are many World Bank and Wall Street Trojan Horses, scattered around the World in central banks and ministries of finance.

The creditor's cartel, Wall Street and the Bretton Woods institutions are always in on the debate and discussions behind closed doors, with their G-20 colleagues and cronies. It's "the old boys network".

It is highly unlikely that an "alternative" distinct from the Washington-Wall Street consensus will emerge from the BRIC or G-20 meetings.

Oct. 27 (Bloomberg) -- Tom Bosh lowered the telephone receiver into its cradle, making a decision on the way down. ``We're not buying any more,'' he told his traders at Bank of New York Co. ``Nothing.''

It was May 2007, and Bosh, who managed $25 billion from the bank's 13th-floor trading room above Times Square, had just hung up on Ralph Cioffi at Bear Stearns Cos. a dozen blocks away. Bosh had invested $50 million in notes from an issuer Cioffi controlled, and he was ready to pull the plug.

``I had a bad feeling,'' Bosh, 45, recalled. ``Cioffi was just bulldogging everyone. He was saying, `These assets are good, the collateral is paying down, and I know more than you.' That type of attitude.''

Bosh's premonition, a month before two of Cioffi's funds blew up, struck a death knell for structured finance, the system Wall Street banks devised to fuel more than two decades of unprecedented borrowing. The system allowed financial companies to lend beyond their capacity and outside the reach of regulators -- until it crashed this year.

While the collapse was most visible in the stock markets, the cause was the loss of confidence in the world's biggest bond market, structured finance. So far, it has led to the worst financial crisis since the Great Depression, the disappearance or takeover of more than a dozen banks, including three storied Wall Street firms, and almost $3 trillion in government expenditures and guarantees to contain the contagion.

The bundling of consumer loans and home mortgages into packages of securities -- a process known as securitization -- was the biggest U.S. export business of the 21st century. More than $27 trillion of these securities have been sold since 2001, according to the Securities Industry Financial Markets Association, an industry trade group. That's almost twice last year's U.S. gross domestic product of $13.8 trillion.

The growth over the past decade was made possible by overseas banks, which saw the profits U.S. financial institutions were making and coveted the made-in-America technology, much as consumers around the world craved other emblems of American ingenuity from Coca-Cola to Hollywood movies. Wall Street obliged, with disastrous results: two-thirds of a trillion dollars in bank losses, about 40 percent of them outside the U.S.

``Securitization was based on the premise that a fool was born every minute,'' Joseph Stiglitz, a professor of economics at Columbia University in New York, told a congressional committee on Oct. 21. ``Globalization meant that there was a global landscape on which they could search for those fools -- and they found them everywhere.''

European banks, in particular, were eager adopters. Securitizations in Europe increased almost sixfold between 2000 and 2007, from 78 billion euros ($98 billion) to 453 billion euros, according to the European Securitization Forum, a trade organization.

Three Icelandic banks borrowed enough to buy $228 billion of assets, most of them securitizations, turning the country's financial system into a hedge fund. All three banks have been nationalized by the government, leading Prime Minister Geir Haarde to advise citizens to switch from finance to fishing.

In Germany, one bank, Landesbank Sachsen Girozentrale, bought $26 billion worth of subprime-backed investments, putting the state of Saxony on the hook for $4.1 billion.

In Japan, Mizuho Financial Group Inc., the nation's third- largest bank, acquired an entire structured-finance team, which proceeded to lose $6 billion issuing mortgage-backed securities.

The damage reaches all the way to Australia, where the town council of Wingecarribee, a municipality outside Sydney with a population of 42,000, bought $20 million of securities from Lehman Brothers Holdings Inc. Now, Lehman is in bankruptcy, the town council is in court and the securities are worth about 15 cents on the dollar.

Securitization is a shadow banking system that funds most of the world's credit cards, car purchases, leveraged buyouts and, for a while, subprime mortgages. The system, which pools loans and slices up the risk of default, made borrowing cheaper for everyone, creating a debt culture that put credit cards in wallets from Seoul to Sao Paolo and enabled people to buy luxury cars and homes. It also pumped out record profits for banks, accounting for as much as one-fifth of their revenue over the last decade.

Beginning about three years ago, investment banks revved the system's engine to boost earnings. They raised revenue by funding more subprime mortgages and cut costs by relying increasingly on the $4.2 trillion sitting in U.S. money-market funds. As it turned out, those decisions would prove fatal.

``It's a powerful technology that has been driven beyond the speed limit,'' said Juan Ocampo, a former consultant at New York-based advisory firm McKinsey & Co. who wrote a 1988 book popularizing structured finance. ``For the last five years, instead of going 65 mph, they've been gunning it to 140 mph, 150 mph.''

Before the invention of securitization, banks loaned money, received payments and profited from the difference between what the borrower paid and the bank's funding cost.

During the mid-1980s, mortgage-bond traders at Salomon Brothers devised a method of lending without using capital, a technique at the heart of securitization. It works by taking anything that has regular payments -- mortgages, car loans, aircraft leases, music royalties -- and channeling the money to a trust that pays bondholders principal and interest.

The word ``securitization'' implies safety. Investors with less appetite for risk buy higher-rated securities and get paid first at lower interest rates. Those with a bigger appetite get paid later and receive more interest.

Securitization's biggest innovation was the use of off-balance-sheet accounting. If a bank couldn't sell a bond or didn't want to, the asset could be sold to a trust within a so-called special-purpose entity, incorporated in a place such as the Cayman Islands or Dublin, and shifted off the books. Lending expanded, and banks still booked profits.

With this new technology, a bank could originate $100 million in loans, sell off some to investors, transfer the rest to a special-purpose entity and not have to hold any capital. The profit could be as much as 1.25 percentage points of the amount loaned, or $1.25 million for every $100 million issued.

``The banks could turn a low return-on-equity business into one that doesn't use any equity, which was the motivation for this,'' said Brad Hintz, a Sanford C. Bernstein & Co. analyst and former chief financial officer at Lehman. ``It becomes almost like a fee business because it requires no capital.''

Like most new products, securitization found a market at home before going abroad. Bankers at Salomon and First Boston Inc. raced from bank to bank to convince issuers it was the wave of the future.

William Haley remembers a 10 a.m. meeting in 1987 at Imperial Thrift & Loan Association in Glendale, California. As Haley, at the time a 33-year-old Salomon banker, and his team walked into the conference room to make a pitch, the First Boston team was walking out.

``We exchanged some knowing looks and then tried to beat the pants off them,'' said Haley, who now works at RBS Greenwich Capital Markets Inc., a firm specializing in mortgage-backed securities that is owned by Royal Bank of Scotland Group Plc. ``There was a fierce desire to capture the prize.''

First Boston, housed in the same New York office tower as McKinsey, was first out of the gate in March 1985 with a $192 million computer-lease securitization for Sperry Corp., a predecessor of Unisys Corp. The bank then oversaw a series of auto-loan securitizations, including a $4 billion issue by General Motors Acceptance Corp. in October 1986, the biggest corporate debt issue at the time.

Haley's project was a $50 million deal for Banc One Corp. called Certificates for Amortizing Revolving Debts, or CARDs. It was the first credit-card securitization and a blueprint for the $358 billion of such securities now outstanding. The transaction also gave the banks a way to securitize their own assets and get them off their balance sheets, which allowed the money to be lent all over again.

The strategy was detailed in Ocampo's 282-page book ``Securitization of Credit: Inside the New Technology of Finance,'' which he co-wrote with McKinsey consultant James Rosenthal. Ocampo, who received an MBA from Harvard after graduating from the Massachusetts Institute of Technology, and Rosenthal, a Harvard Law School graduate, argued that banks could be more profitable if they used securitization.

The authors examined six of the first asset-backed transactions and gave readers a step-by-step guide for how to repeat them. They said that banks that didn't embrace the new technology would be at a disadvantage, and they predicted it would become the dominant form of financing.

``The McKinsey book helped with credibility with issuers,'' said Haley. ``It wasn't that easy in the beginning. Conferences now have thousands of people, but I remember once in Beverly Hills, I gave a speech and there were maybe 25 people in the audience. They were furiously taking notes, however.''

The new technology was spread around the world by the people who worked on the First Boston and Salomon teams. Salomon's group was led by Patricia Jehle, who later founded Bear Stearns's asset-backed unit. Another member, Michael Hutchins, started the first team at a European bank when he went to Zurich-based UBS AG in 1996. A third, Michael Normile, moved to Merrill Lynch & Co., where he ran its securities business, then switched to London-based HSBC Holdings Plc in 2004. Haley built similar teams at Lehman, Chase Manhattan Bank and Amsterdam-based ABN Amro Bank NV.

First Boston's team included Walid Chammah, 54, who went on to head debt and equity capital markets at Morgan Stanley and is now co-president of that firm. Joseph Donovan, the banker responsible for the GMAC relationship, went to Smith Barney in 1995, to Prudential Securities in 1998 and two years later took over the asset-backed group at Credit Suisse First Boston after Zurich-based Credit Suisse bought First Boston.

Donovan remembers traveling to Europe for First Boston in the early 1990s, trying to convince Volkswagen AG in Wolfsburg, Germany, and Renault SA outside Paris of the benefits of securitization. It was a hard sell. Europeans, he said, didn't take out auto loans.

``We tried over and over,'' Donovan recalled. ``We were trying to get more issuers, and there weren't any.''

By the time Donovan went to work for Credit Suisse in 2000, European attitudes had changed. Home-mortgage securitizations were especially appealing, he said, because European banks didn't need a ``50-year pedigree to compete.''

``You don't need a whole equity-research department and relationships with CEOs and CFOs,'' Donovan said. ``You basically needed good computers and distribution. You can always buy a Fannie, Freddie or Ginnie Mae pool. You just go online and buy it. You can't buy a Ford Motor Credit deal, because you have to know people.''

CSFB went from third in underwriting structured finance in 2000, behind Lehman and Salomon Smith Barney, to first in 2001, when it issued $96.3 billion in securities. Its market share increased 50 percent to 12.7 percent. The bank fell to fourth place in 2005, although its volume soared to $144.5 billion.

As securitization caught on, borrowing increased. U.S. consumer debt tripled in the two decades after 1988 to $2.6 trillion, according to the Federal Reserve. Foreign banks used the new technology to expand lending, seeking borrowers on their home turf.

``One of the things the United States exported overseas was a debt culture,'' Haley said.

While consumers were snapping up credit cards, Nicholas Sossidis and Stephen Partridge-Hicks at Citibank in London were figuring out a way to sell the new bonds. Their solution: Alpha Finance Corp., the first off-balance-sheet structured investment vehicle, or SIV.

Alpha was created in 1988 as a way for Citibank, and later Citigroup Inc., to vertically integrate its business like an oil company. The raw material was found in a loan, refined into a security, then sold to a SIV at a profit.

Citigroup, formed in a merger of Citicorp and Travelers Group Inc., which owned asset-backed pioneer Salomon, also got a new product to sell: capital notes that boast returns of more than 20 percent a year. Owners of these notes receive all the excess return when borrowers pay their bills on time, though they are the last to be paid when times get hard.

In the beginning, SIVs were small and cautious. Alpha was capitalized with $100 million of equity that supported $500 million of commercial paper and medium-term notes. The SIV could hold only debt rated A- or higher and didn't take any currency or interest- rate risk, according to a 1993 Fitch Ratings report.

Alpha was followed by a slew of SIVs with names such as Beta Corp. and Five Finance. By 2007, Citigroup's SIVs had $90 billion of assets, equal to the stock market value of PepsiCo Inc., making up about one-fourth of the entire SIV industry.

In 2003, the bank was sued by creditors of Enron Corp. for its role in setting up entities that enabled the Houston-based company to move assets off the balance sheet for Chief Executive Officer Jeffrey Skilling. Citigroup paid $1.66 billion in March to settle the lawsuit. Skilling, a former McKinsey consultant, was convicted of accounting fraud and is serving a 24-year prison sentence.

Starting around 2005, securitization began to rely more on short-term money-market funds for financing. This was especially true for securities made by pooling other bonds, known as collateralized debt obligations, or CDOs. Investors were loath to buy long-term debt of issuers that didn't have a track record, so new issuers sold asset-backed commercial paper that matured in less than a year. While money markets are the cheapest way to finance, they can also be the most dangerous for borrowers because they can mature as soon as the next day.

``What happened in 2005 was that because of subprime and some other changes, commercial paper and asset-backed securities offered a bigger spread than anything that had ever been in the market before,'' said Deborah Cunningham, chief investment officer of Federated Investors in Pittsburgh, who oversees $235 billion in commercial paper. ``It was hundreds of basis points, as opposed to 10 or 20 basis points before.''

SIVs, banks and CDOs sold trillions of dollars of asset- backed commercial paper between 2005 and 2007 in maturities ranging from nine months to overnight. In the U.S., the amount outstanding marched higher almost every week beginning in April 2005, peaking at $1.2 trillion for the week ending Aug. 8, 2007.

Once money-market funds began to be tapped for financing, Ocampo said, ``it created a huge appetite for high-yield assets, far more than could be originated on a sound basis.''

To accommodate the demand, banks funded more subprime mortgages, with an average life of seven years, replacing car loans with an average life of three years and credit-card bonds paid off within 18 months.

Among conservative lenders, that rang an alarm: Bankers are taught to avoid such mismatched funding, in which a lender has to pay back money before the borrower has to pay the principal.

``Most of the terrible things happening now are because of the presence of money-market assets, taking what used to be long-term funding and making it short-term,'' Bruce Bent, 71, who started the first money-market fund in 1970, said in an interview in July.

Bent, chairman of New York-based Reserve Funds, said he didn't buy any asset-backed commercial paper until 2007, when the market froze in the wake of the collapse of the Bear Stearns hedge funds. That's when his Reserve Primary Fund began buying castoffs of asset-backed commercial paper at cut-rate prices from other funds.

Yet asset-backed securities weren't Bent's undoing. His fund also owned $785 million in Lehman debt, bought before the firm filed for bankruptcy Sept. 15. In the two days following the bankruptcy, Reserve clients asked to pull about $40 billion from the $62.5 billion fund, and its net asset value fell to 97 cents. It was the first time that a money fund ``broke the buck,'' or fell below $1, in 14 years. The fund is now being liquidated, and Bent hasn't given an interview since.

Reserve Primary Fund's implosion, and the subsequent seizing up of two Commonfund portfolios used by universities and endowments to hold cash, triggered a panic in U.S. money markets, cutting off this form of credit to industrial companies and banks. No one could be sure whether the banks held securitizations that had dropped in value, making them insolvent. That set off a series of bank takeovers and bailouts around the world, including a $64 billion capital injection by the U.K. government into that nation's financial institutions and 400 billion euros in loan guarantees pledged by Germany.

``We've created an absolute disaster,'' said Nouriel Roubini, a New York University professor of economics, who predicted the failure of investment banks in a paper he wrote in February titled ``Twelve Steps to Financial Disaster.'' ``The reputation of the United States as a financial center and a leader has been tarnished significantly.''

Also tarnished, if not blackened, is the securitization business itself. Sales of European asset-backed securities, including bonds for car loans and credit cards, fell by 40 percent to 12.7 billion euros in the second quarter, and CDO sales fell by two-thirds to 10 billion euros. In the U.S., mortgage bonds issued by entities not affiliated with the government plummeted to $10.8 billion in the first half of the year, one-twentieth of the $241 billion sold in the same period in 2007.

The authors of the 1988 McKinsey handbook on securitization have moved on. Rosenthal, who declined to be interviewed, became a managing director at Lehman and is now in charge of information technology at Morgan Stanley. Ocampo received a patent for risk-controlled investing and founded an institutional fund-management firm, Trajectory Asset Management. The firm doesn't have any structured-finance obligations.

Bear Stearns's Cioffi, 52, was indicted on charges of misleading investors by assuring them that his hedge funds were healthy when he knew they weren't. Cioffi, who now works out of his home in Tenafly, New Jersey, has pleaded not guilty. He declined to comment.

The Bank of New York's Bosh lost his job when his company was merged with Mellon Corp. in June 2007. He's still looking for work. ``You try to do the right thing,'' Bosh said in an interview this month. ``And this is what happens.''

To contact the reporter on this story: Mark Pittman in New York at mpittman@bloomberg.net

The national “bank holiday” that ushered in the New Deal in 1933 locked up the public’s cash for four days. The crisis that hit last month at the Reserve Fund, the nation’s oldest money market fund, has frozen hundreds of thousands of customer accounts for more than six weeks — with no sure end in sight.

At least 400,000 people, and perhaps as many as a million, can’t get access to their savings, a problem that has quietly persisted in spite of widely publicized federal efforts to restore confidence in money-fund investments.

Some of these customers — who, like most Americans, assumed their money funds were as safe and accessible as bank accounts — are getting desperate.

“Longer term, I just don’t know how we’ll deal with it,” said John Oakes, a retired engineer in Austin, Tex., who can’t tap $20,000 in a Reserve account to pay his mother’s nursing home bill. “They say we may get some money this week, but we don’t know if we’ll get 100 percent, 90 percent or 30 percent.”

Sandra and Lawton Dews, a retired couple in North Myrtle Beach, S.C., had more than $250,000 — 35 percent of their retirement assets —invested in the Reserve US Government Fund.

“They even bragged that you could sleep at night if you invested in their funds,” Mrs. Dews said. “In the past month and a half, we don’t sleep at all.”

Her insomnia began soon after Sept. 15, when the Reserve Fund was hit by a wave of redemptions, apparently because its largest fund had a stake in notes backed by the newly bankrupt Lehman Brothers.

The next day, its $62 billion Primary Fund and two small offshore funds “broke the buck,” incurring losses that pushed their per-share price below a dollar.

Only one other money fund, a small bank fund, had ever broken the buck, and the announcement on Sept. 16 sent tremors from Wall Street to Washington. It ultimately played a role in persuading the Treasury to set up a temporary insurance program for money market funds.

And the Reserve Fund had seemed the least likely candidate for trouble, given its long and stable history — its founder, the legendary Henry B. R. Brown, had invented money market funds.

Initially, the company simply announced that it would delay redemptions from the Primary Fund for up to seven days, as allowed by law. Customers were somewhat reassured, but anyone trying to get additional information was met with busy phone lines and unanswered e-mail.

The news occasionally posted on the fund’s Web site got steadily worse. On Sept. 18, investors in a host of other Reserve money funds learned that their money would be tied up for as long as a week; that delay later became open-ended. On Sept. 19, the fund delayed redemptions from both the Primary Fund and the US Government Fund indefinitely.

Since then, investors have been on a roller coaster of broken promises, with the company repeatedly blaming its record-keeping systems for delays.

Several requests for comment from management of the Reserve Fund have been declined. “I have no confidence at all in what it says,” said Mrs. Dews.

Mrs. Dews and Mr. Oakes are among the plaintiffs in a lawsuit filed against the Primary Fund and the Reserve Fund management by Girard Gibbs, a law firm in San Francisco.

It is one of eight cases pending against the fund company, including one that accuses the fund management of tipping off big investors before the Primary Fund broke the buck so they could get out in time — an allegation the fund has denied.

Many Reserve investors say their issue has become the forgotten crisis. “The government is focused on the banks and the big problems,” said Sherry Bryan, a retired industrial photographer in Atlanta. “But this is happening right now to real people.”

Ms. Bryan, 58, said she thought of her Reserve Fund investment as “very safe — an ‘old-granny’ investment.” She added, “We really never expected to lose money on this.”

Ms. Bryan has tried to keep a sense of humor about having to “tighten my belt and tighten it again.” Selling other nest-egg securities in a bad market to pay her bills was “like I’d gone out and bought a speedboat and a Mercedes and traveled all around Europe,” she added. “It’s cost me the same amount of money, but I didn’t have any of the fun.”

The Reserve has posted updates on its Web site, www.ther.com. In those reports, it has asked customers to be patient as it tries to cope with “these unprecedented events.”

Regulators have had to be patient, too. Despite all their efforts to restore liquidity and confidence in all money funds, they don’t have any good options in this case other than to monitor the liquidations carefully.

“The staff has been actively involved in the entire process, intervening to protect all shareholders,” said John Heine, a spokesman for the Securities and Exchange Commission.

But it can intervene only so much. The Reserve has proprietary computer systems, so taking over the process at this point could delay the redemptions even further, current and former regulators said.

The largest fund, the Primary Fund, is not eligible for the ad hoc insurance program the Treasury set up for money funds last month. The big US Government Fund seems to meet the criteria and has applied for coverage, but no announcement of its acceptance has been made.

The biggest mystery is why redemptions from that government fund have not been handled more promptly, said James Cracchiolo, chief executive of Ameriprise Financial Services in Minneapolis.

Ameriprise is among those suing the Reserve Fund over the Primary Fund’s losses — it is the company that contends management tipped off big investors . But that lawsuit does not name the US Government Fund, Mr. Cracchiolo said.

“This is good government paper — even the government itself could take it from this fund and not lose a penny,” he said. “We are all very frustrated at the lack of responsiveness from that fund’s trustees. For heaven’s sake, if they can’t find a white knight to take the paper, we’ll take some of it.”

Ameriprise alone has about 400,000 clients caught in the freeze, he said, and his rough calculations indicate that “as many as a million, a million-plus people” could be affected. Records from last year showed the Reserve had about 170,000 separate accounts, but many of those were large omnibus accounts that could serve tens of thousands of individuals, businesses and local governments.

Mr. Cracchiolo’s firm, like some others, is temporarily offering customers very low-interest loans to help them cope while they wait for a resolution.

The mutual fund industry is equally frustrated, said Paul Schott Stevens, chief executive of the Investment Company Institute, a trade association. “I can’t emphasize too strongly that this absolutely is not typical of money funds,” he added.

He cited a large money fund at Putnam Investments, which was also hit with heavy redemption demands the week of Sept. 15. But it promptly froze the fund and sold it to Federated Investors with scarcely a glitch in customer’s access to their money.

The Reserve Fund’s prolonged crisis is particularly baffling to Michael Brunner, a research scientist in Columbus, N.J., who has been a customer since the fund first opened its doors in 1970. He knew the money fund was not insured, as bank deposits are. “But after 30 years, one doesn’t think it will go bad,” he said.

He can manage without his frozen assets, he added — but he is furious that he still has to, after so much time.

“People talk about this like it’s something that happened,” he said. “But this isn’t something that ‘happened.’ This is still happening. I still don’t have my money and I still don’t know what’s going to happen to it.”

According to Treasury Secretary Henry Paulson, the chief proponent of the big bank bailout, flooding the banks with taxpayers’ money was supposed to get them to start lending freely again. And that, in turn, was supposed to stabilize the markets and prevent the downturn from being worse than it otherwise would be.

It was not entirely clear from the start exactly how Mr. Paulson would ensure that things would go that way. Indeed, earlier this month, shortly after the bailout was enacted, The Times’s Mark Landler reported that Treasury officials also wanted to steer the bailout billions to banks that would use the money to buy up other banks.

Now, lo and behold, with $250 billion in bailout funds committed to dozens of large and regional banks, it turns out that many of the recipients of this investment from taxpayers are not all that interested in making loans. And it appears that Mr. Paulson is not so bothered by their reluctance.

Mr. Paulson and the bailout recipients have some explaining to do. Congress should plan hearings as soon as possible — and take action to set a clear strategy.

In his column on Saturday, The Times’s Joe Nocera told about a conference call that he had listened in on recently between employees and executives of JPMorgan Chase. Asked how an infusion of $25 billion of bailout funds would change the bank’s lending policy, an executive said the money would be used to buy other banks.

“I think there are going to be some great opportunities for us to grow in this environment, and I think we have an opportunity to use that $25 billion in that way,” the executive said. He added that the money could also be used as a backstop in case “recession turns into depression or what happens in the future.”

There was not a word about lending — not to businesses or home buyers or car buyers or students or other consumers. Just the opposite. In response to another question, the executive said that the bank expected to continue to tighten credit.

JPMorgan Chase is not alone. The Wall Street Journal reported on Tuesday that some regional-bank recipients of the bailout money had acknowledged that only a small portion would be used for loans and the rest for acquisitions and other purposes.

It is prudent for government officials to encourage healthy banks to acquire weak banks. Doing so prevents bank failures and avoids the taxpayer costs and economic disruption that accompany such collapses.

The problem is that the Treasury has refused to put conditions on the banks’ use of the bailout funds, allowing them, in effect, to make purchases of banks that are not on the verge of failure. That could help to maximize the banks’ profits — a worthy goal when the capital they are using is from private investors.

However, when they’re using taxpayer-provided capital, as they are now, Congress and the public have every right to require that the money be used to benefit the public directly, even if doing so crimps the banks’ profits. If Treasury won’t impose conditions, Congress must, including a requirement that banks accepting bailout money increase their loans to creditworthy borrowers and limit their acquisitions to failing banks, such as those listed as troubled by the Federal Deposit Insurance Corporation. The bailout should not be an occasion for banks to make a killing.

An even bigger problem is that the bailout was sold as a way to spur loans. If that never was — or no longer is — the primary aim, Congress and the public need to know that. Lawmakers should not release the second installment — $350 billion — until they have answers and guarantees that the bailout money will be spent in ways that put the public interest first.

The American International Group is rapidly running through $123 billion in emergency lending provided by the Federal Reserve, raising questions about how a company claiming to be solvent in September could have developed such a big hole by October. Some analysts say at least part of the shortfall must have been there all along, hidden by irregular accounting. “You don’t just suddenly lose $120 billion overnight,” said Donn Vickrey of Gradient Analytics, an independent securities research firm in Scottsdale, Ariz.

Donn Vickrey, a forensic analyst, is skeptical of A.I.G.’s past reports. “You don’t just suddenly lose $120 billion overnight,” he said.

Mr. Vickrey says he believes A.I.G. must have already accumulated tens of billions of dollars worth of losses by mid-September, when it came close to collapse and received an $85 billion emergency line of credit by the Fed. That loan was later supplemented by a $38 billion lending facility.

But losses on that scale do not show up in the company’s financial filings. Instead, A.I.G. replenished its capital by issuing $20 billion in stock and debt in May and reassured investors that it had an ample cushion. It also said that it was making its accounting more precise.

Mr. Vickery and other analysts are examining the company’s disclosures for clues that the cushion was threadbare and that company officials knew they had major losses months before the bailout.

Tantalizing support for this argument comes from what appears to have been a behind-the-scenes clash at the company over how to value some of its derivatives contracts. An accountant brought in by the company because of an earlier scandal was pushed to the sidelines on this issue, and the company’s outside auditor, PricewaterhouseCoopers, warned of a material weakness months before the government bailout.

The internal auditor resigned and is now in seclusion, according to a former colleague. His account, from a prepared text, was read by Representative Henry A. Waxman, Democrat of California and chairman of the House Committee on Oversight and Government Reform, in a hearing this month.

These accounting questions are of interest not only because taxpayers are footing the bill at A.I.G. but also because the post-mortems may point to a fundamental flaw in the Fed bailout: the money is buoying an insurer — and its trading partners — whose cash needs could easily exceed the existing government backstop if the housing sector continues to deteriorate.

Edward M. Liddy, the insurance executive brought in by the government to restructure A.I.G., has already said that although he does not want to seek more money from the Fed, he may have to do so.

Fear that the losses are bigger and that more surprises are in store is one of the factors beneath the turmoil in the credit markets, market participants say. “When investors don’t have full and honest information, they tend to sell everything, both the good and bad assets,” said Janet Tavakoli, president of Tavakoli Structured Finance, a consulting firm in Chicago. “It’s really bad for the markets. Things don’t heal until you take care of that.”

A.I.G. has declined to provide a detailed account of how it has used the Fed’s money. The company said it could not provide more information ahead of its quarterly report, expected next week, the first under new management. The Fed releases a weekly figure, most recently showing that $90 billion of the $123 billion available has been drawn down.

A.I.G. has outlined only broad categories: some is being used to shore up its securities-lending program, some to make good on its guaranteed investment contracts, some to pay for day-to-day operations and — of perhaps greatest interest to watchdogs — tens of billions of dollars to post collateral with other financial institutions, as required by A.I.G.’s many derivatives contracts.

No information has been supplied yet about who these counterparties are, how much collateral they have received or what additional tripwires may require even more collateral if the housing market continues to slide.

Ms. Tavakoli said she thought that instead of pouring in more and more money, the Fed should bring A.I.G. together with all its derivatives counterparties and put a moratorium on the collateral calls. “We did that with ACA,” she said, referring to ACA Capital Holdings, a bond insurance company that filed for bankruptcy in 2007.

Of the two big Fed loans, the smaller one, the $38 billion supplementary lending facility, was extended solely to prevent further losses in the securities-lending business. So far, $18 billion has been drawn down for that purpose.

For securities lending, an institution with a long time horizon makes extra money by lending out securities to shorter-term borrowers. The borrowers are often hedge funds setting up short trades, betting a stock’s price will fall. They typically give A.I.G. cash or cashlike instruments in return. Then, while A.I.G. waits for the borrowers to bring back the securities, it invests the money.

In the last few months, borrowers came back for their money, and A.I.G. did not have enough to repay them because of market losses on its investments. Through the secondary lending facility, the insurer is now sending those investments to the Fed, and getting cash in turn to repay customers.

A spokesman for the insurer, Nicholas J. Ashooh, said A.I.G. did not anticipate having to use the entire $38 billion facility. At midyear, A.I.G. had a shortfall of $15.6 billion in that program, which it says has grown to $18 billion. Another spokesman, Joe Norton, said the company was getting out of this business. Of the government’s original $85 billion line of credit, the company has drawn down about $72 billion. It must pay 8.5 percent interest on those funds.

An estimated $13 billion of the money was needed to make good on investment accounts that A.I.G. typically offered to municipalities, called guaranteed investment contracts, or G.I.C.’s.

When a local government issues a construction bond, for example, it places the proceeds in a guaranteed investment contract, from which it can draw the funds to pay contractors.

After the insurer’s credit rating was downgraded in September, its G.I.C. customers had the right to pull out their proceeds immediately. Regulators say that A.I.G. had to come up with $13 billion, more than half of its total G.I.C. business. Rather than liquidate some investments at losses, it used that much of the Fed loan.

For $59 billion of the $72 billion A.I.G. has used, the company has provided no breakdown. A block of it has been used for day-to-day operations, a broad category that raises eyebrows since the company has been tarnished by reports of expensive trips and bonuses for executives.

The biggest portion of the Fed loan is apparently being used as collateral for A.I.G.’s derivatives contracts, including credit-default swaps.

The swap contracts are of great interest because they are at the heart of the insurer’s near collapse and even A.I.G. does not know how much could be needed to support them. They are essentially a type of insurance that protects investors against default of fixed-income securities. A.I.G. wrote this insurance on hundreds of billions of dollars’ worth of debt, much of it linked to mortgages.

Through last year, senior executives said that there was nothing to fear, that its swaps were rock solid. The portfolio “is well structured” and is subjected to “monitoring, modeling and analysis,” Martin J. Sullivan, A.I.G.’s chief executive at the time, told securities analysts in the summer of 2007.

By fall, as the mortgage crisis began roiling financial institutions, internal and external auditors were questioning how A.I.G. was measuring its swaps. They suggested the portfolio was incurring losses. It was as if the company had insured beachfront property in a hurricane zone without charging high enough premiums.

But A.I.G. executives, especially those in the swaps business, argued that any decline was theoretical because the hurricane had not hit. The underlying mortgage-related securities were still paying, they said, and there was no reason to think they would stop doing so.

A.I.G. had come under fire for accounting irregularities some years back and had brought in a former accounting expert from the Securities and Exchange Commission. He began to focus on the company’s accounting for its credit-default swaps and collided with Joseph Cassano, the head of the company’s financial products division, according to a letter read by Mr. Waxman at the recent Congressional hearing.

When the expert tried to revise A.I.G.’s method for measuring its swaps, he said that Mr. Cassano told him, “I have deliberately excluded you from the valuation because I was concerned that you would pollute the process.”

Mr. Cassano did not attend the hearing and was unavailable for comment. The company’s independent auditor, PricewaterhouseCoopers, was the next to raise an alarm. It briefed Mr. Sullivan late in November, warning that it had found a “material weakness” because the unit that valued the swaps lacked sufficient oversight.

About a week after the auditor’s briefing, Mr. Sullivan and other executives said nothing about the warning in a presentation to securities analysts, according to a transcript. They said that while disruptions in the markets were making it difficult to value its swaps, the company had made a “best estimate” and concluded that its swaps had lost about $1.6 billion in value by the end of November.

Still, PricewaterhouseCoopers appears to have pressed for more. In February, A.I.G. said in a regulatory filing that it needed to “clarify and expand” its disclosures about its credit-default swaps. They had declined not by $1.6 billion, as previously reported, but by $5.9 billion at the end of November, A.I.G. said. PricewaterhouseCoopers subsequently signed off on the company’s accounting while making reference to the material weakness.

Investors shuddered over the revision, driving A.I.G.’s stock down 12 percent. Mr. Vickrey, whose firm grades companies on the credibility of their reported earnings, gave the company an F. Mr. Sullivan, his credibility waning, was forced out months later.

Through spring and summer, the company said it was still gathering information about the swaps and tucked references of widening losses into the footnotes of its financial statements: $11.4 billion at the end of 2007, $20.6 billion at the end of March, $26 billion at the end of June. The company stressed that the losses were theoretical: no cash had actually gone out the door.

“If these aren’t cash losses, why are you having to put up collateral to the counterparties?” Mr. Vickrey asked in a recent interview. The fact that the insurer had to post collateral suggests that the counterparties thought A.I.G.’s swaps losses were greater than disclosed, he said. By midyear, the insurer had been forced to post collateral of $16.5 billion on the swaps.

Though the company has not disclosed how much collateral it has posted since then, its $447 billion portfolio of credit-default swaps could require far more if the economy continues to weaken. More federal assistance would then essentially flow through A.I.G. to counterparties. “We may be better off in the long run letting the losses be realized and letting the people who took the risk bear the loss,” said Bill Bergman, senior equity analyst at the market research company Morningstar.

Wall Street is coming under mounting political pressure to cut bonuses for top executives, traders and bankers in what was already expected to be a down year for pay.

Under pressure from members of Congress to curtail compensation, banks now face a new threat from Andrew M. Cuomo, the New York attorney general, who sent a letter on Wednesday to nine big financial institutions receiving government aid.

Mr. Cuomo gave the companies a week to provide a “detailed accounting regarding your expected payments to top management in the upcoming bonus season.” That could prove difficult for the banks, which typically do not complete bonus pools until later this month at the earliest. Mr. Cuomo’s letter also warned that payments worth more than the services provided by executives might violate New York law.

The letter follows one sent earlier this week to the same banks by Henry A. Waxman, the California Democrat who is chairman of the House Committee on Oversight and Government Reform, urging them not to use any government money for bonuses or other payments and asking for data on pay going back to 2006.

The demands from Mr. Cuomo and Mr. Waxman reflect an increased concern among lawmakers and regulators about payments to executives, which have drawn strong public reactions since the government approved a $700 billion bailout to stabilize the financial system. Other politicians have also held private meetings with bank executives to warn them that big bonus figures this year would create enormous political problems.

Any lawsuit based on the law cited by Mr. Cuomo would take some creative legal footwork, said Edward R. Morrison, a law professor at Columbia University. The law permits creditors to try to recover or block payments. “You have to find a way for the attorney general, for Cuomo, to shoehorn himself into the position of a creditor,” Professor Morrison said. “It’s not implausible.” The attorney general could act under the law, Professor Morrison said, if New York state pension funds hold bonds issued by the nine companies. Mr. Cuomo might also claim jurisdiction over any of the companies that might owe taxes to New York.

The attention raised questions on Wall Street, because bonus payments are already expected to be as much as 50 percent smaller than last year and perhaps even far smaller at banks that posted big losses. The New York State comptroller estimated that Wall Street paid $33.2 billion in bonuses for 2007, compared with $33.9 billion the year before.

Even banks like Morgan Stanley and Goldman Sachs, which produced decent profits this year, are expected to award significantly smaller bonuses. Lloyd C. Blankfein, the chief executive of Goldman Sachs, received bonus and stock awards worth about $68.5 million last year, while Goldman’s co-presidents got just slightly less. Those numbers will not be repeated. John J. Mack, Morgan Stanley’s chief executive, declined to take a bonus last year.

Last week, Mr. Cuomo reached an agreement with the American International Group, the insurance conglomerate that has received tens of billions of dollars in loans from the Federal Reserve, to freeze millions in payments to former executives. His latest move appears to expand the inquiry into executive compensation at companies participating in the government’s financial bailout program. “Taxpayers are, in many ways, now like shareholders of your company,” Mr. Cuomo wrote, “and your firm has a responsibility to them.”

In his letter, Mr. Cuomo asked specifically for a description of bonus pools for this year, a description of how money in those pools would be allocated, an explanation of how that allocation might have changed since each company received money under the federal Troubled Asset Relief Program and a description of bonuses paid to executives earning more than $250,000 in 2006 and 2007.

Mr. Cuomo’s letter was sent to Bank of America, Bank of New York Mellon, Citigroup, Goldman Sachs, JPMorgan Chase, Merrill Lynch, Morgan Stanley, State Street and Wells Fargo, all of which received capital injections from the government as part of a wide-reaching program to stabilize the financial system. Representatives of Morgan Stanley, JPMorgan Chase, Bank of America and Wells Fargo declined to comment on the letter.

Citigroup said it would “cooperate with federal and state inquiries about our global expenditures for wages, health insurance and other benefits, which we believe reflect compensation best practices. In addition, we will of course adhere to applicable legal and regulatory requirements, including those in the federal government investment program, such as restrictions on executive compensation.”

In an e-mail message, a spokeswoman for State Street said the bank was “carefully evaluating” Mr. Cuomo’s request. Other financial institutions did not return calls.

A broad array of businesses across the New York region have begun eliminating jobs by the thousands as the pain of the financial crisis spreads well beyond Wall Street.

Companies as varied as Yahoo, American Express, Time Inc. and Swissport Cargo Services at Kennedy International Airport say they are preparing to lay off employees, including online ad sales representatives, magazine editors and baggage handlers, in the coming weeks.

Economists and labor-market analysts predict that the cuts will be part of a large wave of pink slips that is expected to drive up the city’s unemployment rate and strain the state’s unemployment insurance fund. In the week that ended Oct. 11 — the latest week for which data is available — New York led all states with an increase of 5,224 first-time unemployment claims.

Law firms are shrinking and publishing companies, which employ about 54,000 people in the city, announced layoffs of about 880 employees this week. Other service businesses, like consulting, catering and tourism, are almost certain to follow suit, said James Brown, who analyzes the city’s job market for the New York State Department of Labor.

“The professional fields are going to feel the impact of falling corporate profits,” Mr. Brown said. “We have a lot of firms in professional services and they sell to corporations nationally and internationally. With corporate profits dropping, their business is weakening. I expect them to start losing jobs soon.”

Those cuts would come on top of the layoffs of tens of thousands on Wall Street, which is in the midst of its most wrenching changes in decades.

Despite large cutbacks at some of the city’s most venerable banks, city and state unemployment rates have risen only gradually this year, with each holding at 5.8 percent from August to September. But that is expected to change: The number of New Yorkers filing claims for unemployment benefits has been rising at an accelerating pace, in part because layoffs are spreading beyond Wall Street.

In the first nine months of this year, about 60,000 New York City residents collected unemployment checks, according to the Labor Department. That was an increase of about 7,000, or 13 percent, from the first nine months of 2007. Financial services accounted for the biggest share of that rise, but every other sector in the economy also saw increases in unemployment claims. The number of unemployed city residents who used to work in the media, for instance, rose by about 20 percent to more than 2,800, according to the department’s figures.

Those numbers did not include the seven employees of Wenner Media, the publisher of Rolling Stone magazine, who were laid off this week, or the 600 jobs that Time Inc. said it planned to eliminate during a reorganization announced on Tuesday. But among them may have been some of the 270 people whose jobs were eliminated in the last three months at McGraw-Hill, which owns BusinessWeek magazine and the Standard & Poor’s debt-rating agency.

The digital media, a bright spot in the Bloomberg administration’s efforts to reduce the city’s economic dependence on Wall Street, may be the next to scale back. Yahoo, which is based in California but has much of its ad sales force in Manhattan, is preparing to eliminate at least 1,500 jobs before the end of the year, the company announced last week. Analysts predicted that some of those layoffs would be in New York, but Kim Rubey, a Yahoo spokeswoman, declined to say how many there would be.

Kevin P. Ryan, the chief executive of Alleycorp, which owns six start-up online companies, said that even a relatively robust industry like his would have to cut back if the downturn is prolonged.

“Almost every industry’s going to be impacted,” Mr. Ryan said. “There will be less financing available. Already, a lot of conversations about consolidation are happening. I think it’s going to happen pretty rapidly.”

The traditional advertising agencies of Madison Avenue, he said, are due for some significant layoffs because of the faster decline of printed publications. But much of that cutting might be put off until after the busy fourth quarter.

“The interesting moment’s going to come early next year” in the advertising and retail businesses, Mr. Ryan said. “I think a lot of it’s going to come in January.”

The outlook for the metropolitan area has darkened quickly in the last several weeks. Moody’s Economy.com, a research firm, raised its projection of job losses in financial services by two-thirds this month, to 100,000 from 60,000, which, it said, would put the region into recession before the end of the year.

In recent weeks, each new forecast of the fallout has been bleaker than the one before. Two weeks ago, the office of the city comptroller raised its estimate of job losses on Wall Street to 35,000 from 25,000. On Tuesday, Gov. David A. Paterson raised the estimate again, to 45,000, and projected that the state’s unemployment rate would climb to 6.5 percent. He also said his administration was projecting that the state would lose 160,000 private sector jobs by the end of next year.

On Wednesday, Governor Paterson told Congress that the state expected 90,000 laid-off workers who have been out of work for six months to exhaust their 13 weeks of additional emergency benefits by Dec. 31.

So far, investment banks, brokerage and other securities firms have accounted for almost all of the jobs lost in financial services in the city. But that, too, is about to change. American Express, the giant credit card company, has been hinting that a large layoff would be part of a restructuring plan that it expects to unveil in the next few weeks. A spokeswoman for the company, which is based in Lower Manhattan, declined to say how many of the layoffs would be in the metropolitan area.

While the number of jobs in all professional services in the city was still higher last month than it had been a year before, the legal business is smaller than it was a year ago, Mr. Brown said. Law firms are suffering from the sharp drop in transactions on Wall Street, as well as the softening real estate market, Mr. Brown said.

Heller Ehrman, a firm with a big presence in Manhattan (with Lehman Brothers as a client), went out of business this month. This week, the managing partners of Thelen, a law firm with about 300 employees in New York, recommended that the firm be dissolved by the end of next month. A spokesman said approval of the shutdown was a “formality.”

At Kennedy International, Swissport is considering eliminating 97 of 128 jobs in its baggage-handling operation by the end of next month because of the impact of the slowing economy on airline traffic, according to documents filed with the state labor department. Swissport, which is based in Zurich, handles luggage for several airlines at Kennedy, said Stephan Beerli, a spokesman for the company. Mr. Beerli declined to discuss details of the layoff plan, saying that no “official” notice had been given to employees. “We are right now in a phase where everybody’s preparing contingency plans,” Mr. Beerli said.

The credit crisis is causing a contraction of the little-noticed but huge business of securities lending, and financial players including pension funds, insurers and hedge funds are paying a price.

Losses are sparking lawsuits from customers who pursued securities lending as a way to squeeze additional gains with seemingly little risk. Northern Trust Corp. and Wells Fargo & Co., which run programs for institutional investors with securities to lend, were sued last week by clients who alleged that they mismanaged money and, in the case of Wells Fargo, deceived the clients about the nature of their investments and degree of losses. Both companies are defending against the suits.

Securities lending programs, which combined have represented at least a trillion dollars, involve lending securities to short sellers or others and investing the collateral for gains. The strategy for many has lately backfired as once- reliable credit investments have seized up amid market woes.
[Getting Shorter]

In recent weeks, the city of Hartford, Conn., and other institutional investors have suspended their securities lending programs. State Street Corp. and other large custodian banks have restricted investors from exiting from the programs. And insurers including MetLife Inc. and Chubb Corp. are trimming or winding down their programs; American International Group Inc., has suffered more than $15 billion in unrealized and realized losses.

Kathleen Palm Devine, treasurer of the city of Hartford's $1 billion Municipal Employees' Retirement Fund, froze her securities-lending plan in August, when it had securities worth $52 million. She said the fund earned about $425,000 a year, "but we are willing to forgo that income until we know better what is going in the markets."

If markets improve, it is possible fear of losses will subside and participants will resume their level of lending activity. Investors who hold large portfolios of securities such as pension funds, index funds, insurers and endowments often lend them out and profit by investing the collateral they receive in exchange for the securities. Often a custodian handles the program including the investing, which is generally done in low-risk investments. While the profit on any individual transaction is small, with big portfolios the gains add up.

Securities lending is widespread but it has had critics. David Swensen, chief investment officer of Yale University's endowment, has derided these programs as "make a little, make a little, make a little, lose a lot."

In Minnesota, the Robins, Kaplan, Miller & Ciresi Foundation for Children, two other foundations and a nonprofit insurance association filed a state-court lawsuit last week alleging Wells Fargo repeatedly assured securities-lending clients that their cash collateral would be invested in safe investments, such as "high-grade money market instruments." Instead, "Wells Fargo also invested in highly illiquid securities, including mortgage-backed assets with maturity dates that reach out nearly 40 years."

The suit says the combined losses, going back to last year, for the four clients are at least $17 million on securities lending programs valued at about $373 million. But the suit adds that "since Wells Fargo's valuations have been based on an artificially inflated [net asset value] it is believed that these numbers substantially understate actual losses."

Wells Fargo spokesman Gabriel Boehmer said: "We dispute the allegations. Like all investments, investors bear the risk of losses. We intend to vigorously defend against these charges." He added: "All the investments were highly rated and highly liquid at the time of purchase."

BP Corporation North America Inc., a unit of BP PLC, filed a suit last week in U.S. District Court against Northern Trust, seeking to get its pension fund out of Northern Trust's securities lending program without incurring losses. BP alleges the bank violated federal employment law operating "the securities lending program in an imprudent manner."

The suit said some of cash collateral investments had defaulted, while others "have been marked down in value and...have become so illiquid that such investments could only be sold" at substantial markdowns.

Northern Trust, which has acknowledged losses, says that the BP suit "seeks to avoid safeguards that Northern Trust put in place to ensure that all the participants in those funds are treated equitably during extraordinarily difficult economic conditions."

The University of Washington sued Northern Trust last month to get out of its securities lending program when the university learned it was losing money. The school agreed to accept a $6.6 million loss to exit from the program, according to an Oct. 3 settlement agreement. The school's program had been $750 million.

Some insurers also have large securities lending programs, though they generally lend debt securities to Wall Street firms seeking to hedge positions. Their programs play off their expertise running huge bond portfolios. Problems with the securities lending program at AIG prompted it this month to secure up to $37.8 billion from the federal government, which had already made available $85 billion to the insurer to help it avoid bankruptcy last month.

MetLife had about $45 billion of securities on loan as of June 30, the company's chief financial officer, William J. Wheeler, told investors and analysts in an Oct. 8 conference call. The total was down to about $40.4 billion as of Sept. 30, according to a regulatory filing. On its third-quarter conference call Thursday morning, executives are expected to discuss the latest cutback in the securities-lending program. "I think it's safe to say we assume that the program, the overall outstandings, will probably shrink," Mr. Wheeler said on the Oct. 8 call.

The three big custodian banks that run securities lending programs with a combined value of around $1 trillion could be among the bigger losers if institutions continue pulling out.

State Street had $246 million in revenue from securities lending in the third quarter, or about 10% of its total revenue that quarter. Moody's Investors Service this month cited the possibility that "client interest in securities lending activities could also decline going forward" as a reason for keeping State Street's credit outlook as negative. A spokeswoman said "about 10% of our customers and 10% of the assets have left the program -- something that we believe to be temporary."

Bank of New York Mellon Corp. said it had revenue of $155 million from securities lending in the third quarter, out of total revenue of $3.9 billion. The bank said on a recent conference call that about 2% of its client base, and slightly more than that in terms of assets, has exited from its securities lending program.

Because of the losses in its cash collateral investments, Northern Trust says its securities-lending revenue in the third quarter was negative $4.6 million. That figure was down from $150 million in revenue from securities lending, or 15% of the bank's total revenue, in the second quarter.
—Jenny Strasburg contributed to this article.

"My view remains that interest rates do need to come down significantly - and quickly," Prof Blanchflower told an academic audience in Canterbury. "If rates are not cut aggressively we do face the prospect of a relatively deep and long-lasting recession."

His comments follow those recently made by Bank of England governor Mervyn King and Prime Minister Gordon Brown that the UK is probably heading towards recession. And Prof Blanchflower said international financial problems could turn out to have long-lasting repercussions. "It is even possible that this event may turn out to be more significant than the 1929 crash which primarily involved bank failures in the United States," he said. "The current difficulties in financial markets are more global in nature and more comparable to what happened in the First World War."

He also said a range of surveys of UK economic activity had shown a marked downturn since last summer. "It is not sufficient to consider the data month by month until it emerges that the UK is in recession. "I believe this trend has been apparent for some time. The synchronised downturn in so many business surveys should have led us to realise sooner that the UK economy was entering a recession."

Oct. 29 (Bloomberg) -- Alexander Rekeda, a 34-year-old Ukrainian-born math whiz, turned in his BlackBerry and security card and sent an e-mail to his bosses at Calyon, the investment- banking unit of Credit Agricole SA. Then, along with ten colleagues from the New York structured-finance team, who fired off similar messages, he walked two blocks down the Avenue of the Americas to Mizuho Financial Group Inc.

It was Dec. 8, 2006, and Rekeda's arrival was a coup for Mizuho, Japan's second-largest bank by revenue. A month earlier, it became the first Japanese lender to list on the New York Stock Exchange since 1989 -- a move hailed by John Thain, then chief executive officer of the bourse, as a sign that Mizuho was taking ``its place among the world's leading companies.''

The hires would prove a costly blunder. Rekeda, who became head of structured credit in the Americas, and his team led Mizuho into a business it knew little about, securities backed by U.S. subprime mortgages, where it lost 672 billion yen ($7.1 billion), more than any bank in Asia. Most of the losses were related to defaults on collateralized debt obligations.

Mizuho expects as much as 20 billion yen in potential further losses on bonds and bad loans related to bankrupt Lehman Brothers Holdings Inc., company spokeswoman Masako Shiono said on Sept. 16. Moody's Investors Service, citing ``questions regarding the effectiveness of Mizuho's risk management and its risk appetite,'' continues to give the bank a negative outlook. ``Mizuho never made a penny out of subprime in the good times, they just got left holding the can in the bad,'' says David Threadgold, an analyst at Fox-Pitt Kelton Asia Ltd. in Tokyo who has an ``underperform'' rating on the stock. ``They made a very poor decision to launch into the packaging of subprime products at the end of 2006.''

How a Japanese bank that traces its roots to 1864 made such a bold entry into the U.S. subprime securities market, and almost choked on the toxic assets it created, is a tale of overreaching and poor timing. It also illustrates how financial technology made in the U.S. wreaked havoc on the other side of the globe.

Many of the details are spelled out in a lawsuit Calyon filed against Mizuho in U.S. federal court seeking $750 million for ``covertly'' inducing its employees to quit. The case was settled out of court in September 2007 for an undisclosed amount. Shiono said Mizuho wouldn't comment for this article.

Rekeda, who has a master's degree in mathematics from Kiev State University of Economics in Ukraine and an MBA from the University of Connecticut, had built Calyon's CDO business over two years. He closed six deals for the French bank in 2006, according to an affidavit in the case.

All six, including two with the celestial names Cetus and Orion, later defaulted as Paris-based Credit Agricole racked up more than 6.5 billion euros ($8.1 billion) in subprime losses. Rekeda, now 34, declined to be interviewed.

On Oct. 18, 2006, Rekeda and his team were offered an $11 million signing-on fee to defect to the Japanese bank, a Calyon lawyer said at a court hearing. Mizuho's plan to expand into the U.S. was hatched earlier that year, as Japanese lenders were recovering from a 14-year debt crisis that forced them to take $1.1 trillion in writedowns for bad loans.

Mizuho, formed in 2000 in a merger of three banks, beat out rivals Mitsubishi UFJ Financial Group Inc. and Sumitomo Mitsui Financial Group Inc. to win approval from U.S. regulators to set up a financial holding company. That enabled it to operate as a full-service investment bank.

As Mizuho President Terunobu Maeda said at a press briefing on May 15 this year, the bank had excess capital and ``needed to study'' the U.S. mortgage-backed securities business.

Maeda, 63, a former chairman of the Japanese Bankers Association and an amateur gardener who doesn't use air conditioners at his home during Tokyo's humid summers to make an environmental point, became president of Mizuho in April 2002. The bank recorded a loss of 2.38 trillion yen that fiscal year as it wrote off bad loans accrued during three recessions in a decade. Maeda returned it to profitability the next year after reducing non-performing assets and through gains on investments in Japanese stocks.

While Mizuho was a newcomer to the CDO market in the U.S., it had experience arranging and selling similar investments in Japan and Europe. The company had ramped up its loan- securitization business, which Japanese banks were able to do without borrowers' consent after October 1998. Merrill Lynch & Co., Bear Stearns Cos. and Goldman Sachs Group Inc. all helped Japanese banks repackage and market securities backed by corporate loans and mortgages.

Even so, Mizuho decided it needed help in the U.S. Talks with the Calyon team began in early 2006, when Douglas Munson, a sales director for the French bank, approached golfing buddy Theodore Ake, head of fixed income for Mizuho in New York, according to two people familiar with the negotiations. The size of the group and the amount of sign-on bonuses snowballed after Rekeda was brought into the discussion, the people said. Munson and Ake declined to comment.

By the time the deal was consummated, the market was turning. On Dec. 11, 2006, the same day Mizuho announced it was setting up an office in the U.S. to create asset-backed debt securities, Fitch Ratings said the outlook for U.S. subprime mortgage bonds was ``negative.'' It expected delinquencies on those loans to rise by 50 percent.

There was also confusion about the hiring deal. The Calyon team turned out to include more than the five people expected by Hitoshi Shimoyama, then deputy president of investment banking unit Mizuho Securities USA Inc., documents in the case allege. ``Mizuho did not even know the number or names of additional persons until shortly before they came,'' Shimoyama said in a March 17, 2007, affidavit.

Benjamin Lee, one of those who defected on Dec. 8, returned to the French bank five days later. He said he ``had been misled by Rekeda'' about the terms of employment at Mizuho, according to an affidavit he filed.

Lee said he was initially told by Rekeda that he could expect $1 million to $1.5 million from a bonus pool. He later learned there was a separate contract for him and other junior members of the group that didn't include a revenue- related bonus. Senior team members were entitled to share as much as 25 percent of revenue from completed transactions, court documents said.

Rekeda's group priced its first deal within 10 weeks, after the Mortgage Bankers Association reported that the default rate on U.S. subprime loans reached 12.6 percent, the highest level since the first quarter of 2003.

The deal was named after a squat animal with a pig-like snout that feeds on ants and termites. Incorporated as a special- purpose company in the Cayman Islands, Aardvark ABS CDO was an ugly concoction: 31 percent of its $1.5 billion of securities were backed by subprime loans, 23 percent by residential mortgages repackaged from other CDO deals, and 33 percent by Alt- A mortgages, a category just above subprime. The remaining 13 percent were prime loans.

One reason Rekeda was able to move so fast was that the deal had already been assembled by London-based Lloyds TSB Group Plc, which pulled out before completion, said three people familiar with the transaction. HarbourView Asset Management Corp., a unit of New York-based OppenheimerFunds Inc., stayed on as manager. Spokesmen for Lloyds and HarbourView declined to comment.

Moody's assigned its highest short-term rating of P-1 to $1.3 billion of the Aardvark securities. In the prospectus, Mizuho pledged to back 87 percent of the deal, meaning that the bank, rather than investors, was on the hook for most of the potential losses.

A subsequent Mizuho offering, Tigris CDO 2007-1, valued at $902 million in March 2007, was backed by the lowest investment- grade tranches of CDO deals arranged by other Wall Street firms, including Merrill, Lehman and Citigroup Inc., according to a report that month by Fitch Ratings. More than 80 percent of the securities in the CDO had Fitch's lowest investment rating, BBB-, which is nine grades below AAA.

Rekeda planned to bring at least nine more CDO deals to market within six months, the investment newsletter Asset-Backed Alert reported on May 11, 2007. The newsletter quoted him saying the bank had ``built up the pipeline.'' As of April 1, 2007, Mizuho Securities had amassed more than 550 billion yen in residential mortgage-backed securities and CDOs supported by home loans, according to the bank's financial statements.

One of those deals made it to market in June 2007: a special-purpose entity called Delphinus 2007-1. Although named after a constellation, its contents were hardly stellar. Three- quarters of its securities were based on subprime mortgages, according to a July 23 Fitch report.

About 80 percent of the deal was backed by credit-default swaps arranged by firms including JPMorgan Chase & Co., Citigroup and Wells Fargo & Co. Citing ``strong demand'' from investors, Mizuho increased the size of the deal that July to $1.6 billion from $1.2 billion.

That was eight days before two Bear Stearns funds were shut down, heralding the start of the subprime crisis. Less than three months later, on Sept. 27, Fitch put Delphinus on its watch list. The negative designation, Fitch analyst Kevin Kendra said at the time, was ``probably the quickest I've seen'' on a CDO. In other words, Mizuho struggled to find buyers for its CDOs and, as their values plummeted, the bank would have to absorb the loss.

Mizuho didn't tell investors about the extent of its exposure until November 2007, when it reported a 70 billion-yen loss on subprime-related securities in the first half ended Sept. 30. It also said it expected that figure to grow to 170 billion yen for the full year.

By December, Mizuho had halted its U.S. CDO business. It fired Rekeda and at least four others on the team, putting an end to the bank's one-year experiment with American financial technology.

In January, as delinquencies on loans that backed Mizuho's CDOs increased, Aardvark, Tigris and Delphinus went into default. Subsequent downgrades of all of the tranches of Tigris and Aardvark required the bank to write down the value of the CDOs.

Mizuho had to inject 150 billion yen of capital into its securities unit, shelve a planned merger with Shinko Securities Co. and axe 300 jobs. The bank's shares lost half their value in the fiscal year ended March 31.

When a record 2,474 shareholders gathered at the Tokyo International Forum on June 26 for the bank's annual meeting, they were out for blood. ``The responsibility rests at the top with Maeda,'' Kenjiro Endo, 66, who bought Mizuho shares when he retired from chipmaker Toshiba Corp. six years ago, said after the meeting. ``If this were overseas, he'd resign.''

Endo may have had a point. Citigroup CEO Charles O. ``Chuck'' Prince, Merrill's Stan O'Neal and Wachovia Corp.'s Kennedy Thompson were all forced to resign after significant subprime losses. In Japan, where executives often bow and apologize for their mistakes, Mizuho's Maeda stood firm. ``Unfortunately, from October, the securitized investment- product market crashed, and even if we tried to sell the investments, it wasn't possible,'' Maeda said at the shareholders' meeting. ``When the market stops functioning, there is no measure to avoid it.''

Maeda also defended the bank's decision to enter the U.S. securities market. ``It's not because of some management failure that things turned out like this,'' he said. ``I am very sorry to tell you, doing nothing, and not taking risk, is not a bank.''

Yet Mizuho might have incurred half as many losses if it had accelerated the sale of subprime-related investments and hedged more bets with credit-default swaps, according to a person familiar with its U.S. operations. The bank, fearing it would lose as much as two-thirds of its potential profit, decided not to hedge, the person said. Mizuho declined to comment. ``The holding company was unable to grasp the size of losses at Mizuho Securities when the subprime problem emerged,'' said Keisuke Moriyama, a Tokyo-based analyst at Nomura Holdings Inc. ``Mizuho has a governance problem. How it fixes it is the biggest issue that faces the group.''

The ultimate cost to Mizuho may be greater than the 672 billion yen it wrote down. The bank, the first in Japan to put money in U.S. financials amid the credit crunch, invested $1.2 billion in Merrill in January. The Wall Street bank's shares have slumped 70 percent this year.

Now Mizuho is sidelined as other Japanese banks swoop in to buy troubled U.S. assets. Nomura purchased some of Lehman's Asian and European businesses in September, and Mitsubishi UFJ, the nation's largest bank, acquired 21 percent of Morgan Stanley for $9 billion. ``Mizuho has totally missed out,'' said Amir Anvarzadeh, director of Japanese equity sales at KBC Financial Products in London. ``They've been very aggressive overseas, trying to grow this business organically, and some of those ambitions have come back to haunt them.''

Although it was the biggest loser, Mizuho wasn't the only Japanese bank that got hurt. In all, 672 domestic banks and credit cooperatives had 1.5 trillion yen in losses from overseas securitized products, the country's financial regulator reported Sept. 4.

Rekeda, meanwhile, has moved on. He now works for Guggenheim Capital Markets LLC in New York, along with Paolo Torti and Xavier Capdepon, who both followed him from Calyon to Mizuho. Their new jobs: selling distressed CDOs at a discount.

To contact the reporter on this story: Finbarr Flynn in Tokyo at fflynn3@bloomberg.net

Oct. 29 (Bloomberg) -- The financial crisis exacerbated by credit derivatives is costing so much to fix that speculators are now using those same instruments to bet on governments as the price tag for bailing out banks approaches $3 trillion.

The cost to hedge against losses on $10 million of Treasuries is about $40,000 annually for 10 years, up from $1,000 in the first half of 2007, based on CMA Datavision prices. The equivalent for German bunds has risen to more than $36,000 from $2,000, while it has jumped to $64,000 from $3,000 for U.K. gilts.

Unlike John Irving's novel ``The World According to Garp,'' which provokes laughter from readers, the devastation amplified by derivatives is proving unfunny as taxpayers finance the financial system's rescue through measures such as the $700 billion Troubled Asset Relief Program, or TARP. Pressure is rising on policy makers to regulate a market that's moved beyond its origins protecting banks from loan losses to $55 trillion, prompting Warren Buffett to call the contracts a ``time bomb.''

``There's a huge gap in our regulatory system,'' former U.S. Securities and Exchange Commission Chairman Harvey Pitt said at an industry conference yesterday, referring to legislation almost a decade ago that excluded the derivatives from government oversight. The regulatory system is ``terribly broken,'' he said.

The Federal Reserve has given futures exchanges until Oct. 31 to present written plans on how they'll make the market more transparent, said four people familiar with the request. The Fed called banks and exchanges into three meetings in two weeks, pressing them to agree on a clearinghouse that would require dealers to post collateral and pay into a fund that would absorb losses if one of them were to fail.

Turmoil triggered by credit-default swaps prompted calls from SEC Chairman Christopher Cox, Commodity Futures Trading Commissioner Bart Chilton and lawmakers including Senator Tom Harkin, a Democrat from Iowa, for Congress to authorize governing bodies to regulate the market.

New York Governor David Paterson said in a Sept. 22 statement that ``the absence of regulatory oversight is the principal cause of the Wall Street meltdown we are currently witnessing.'' New York officials proposed rules that would treat some of the contracts as insurance after the government was forced to bail out American International Group Inc.

``It's absolutely urgent that we bring disclosure to this corner of the market, that we let the market see where the risk is and price accordingly,'' the SEC's Cox told the House Committee on Oversight and Government Reform on Oct. 23. Derivatives are contracts whose value is derived from assets including stocks, bonds, currencies and commodities, or from events such as the weather or changes in interest rates.

Credit-default swaps trade over-the-counter, leaving each party exposed to the risk the other won't fulfill the terms of the contract. The International Swaps and Derivatives Association, the industry group that has been setting the rules and acting as a self-regulator of the market, cited estimates that there were as much as $400 billion of contracts tied to Lehman Brothers Holdings Inc., even though the company only had $162.8 billion of debt, according to Bank of America Corp. analysts.

The Depository Trust & Clearing Corp., which runs a central registry for trades, placed the amount at about $72 billion. The contracts, which aren't issued by the companies they are linked to, pay the holder the face value of the amount protected in exchange for the underlying securities if a borrower fails to adhere to debt agreements. A basis point on a credit-default swap contract protecting $10 million of sovereign debt from default for 10 years is equivalent to $1,000 a year.

New York-based AIG amassed bets of more than $440 billion on U.S. home loans, corporate bonds and other assets by selling protection against default via the derivatives.

After ratings firms downgraded the insurer in September because of potential losses from the trades, AIG had to accept an $85 billion loan from the government and turn over majority control because of more than $10 billion in collateral it was required to post on the trades.

Lehman was one of the 10 biggest dealers in the credit- default swap market before it failed. New York-based Primus Guaranty Ltd. which managed $24.2 billion of credit-default swaps and sold guarantees on companies including Lehman and bankrupt Washington Mutual Inc. of Seattle, has tumbled 94 percent this year on the New York Stock Exchange to 40 cents a share.

Banks are now driving the cost of debt protection to records as they seek to guard against losses on contracts bought from money-losing hedge funds. The Markit CDX North America Investment Grade Index, linked to the bonds of 125 companies in the U.S. and Canada, reached a record 240 basis points on Oct. 24, before falling back to 207.5 today, according to Phoenix Partners Group. Europe's benchmark index reached a record 193 basis points before falling back to 159.5, according to JPMorgan Chase & Co.

Buffett, called ``the world's greatest investor'' by biographer Robert Hagstrom, described derivatives in an annual report to shareholders of his Omaha, Nebraska-based Berkshire Hathaway Inc. as ``financial weapons of mass destruction.'' ``The range of derivatives contracts is limited only by the imagination of man or sometimes, so it seems, madmen,'' Buffett said in the 2003 letter to shareholders.

Credit-default swaps are just a tool available to investors to hedge against losses, said Robert Pickel, head of the International Swaps and Derivatives Association in New York. ``To say that CDS were the cause, or even a large contributor, to that turmoil is inaccurate and reflects an understandable confusion of the various financial products that have been developed in recent years,'' Pickel told a House committee on Oct. 14.

Four groups are vying to operate clearing operations, including a partnership between Chicago-based CME Group Inc. and Citadel Investment Group LLC and a team consisting of dealer- owned Clearing Corp., Atlanta-based Intercontinental Exchange Inc. and credit-default swap index owner Markit Group Ltd. Eurex AG, the world's biggest futures exchange, and NYSE Euronext have also submitted proposals.

The push to make the industry more transparent may finally let exchange-traded derivatives gain traction after years of failing to compete with banks. Eurex, the world's biggest futures exchange, opened the first market for exchange- traded credit derivatives in March 2007, beating Chicago Mercantile Holdings Inc. and Euronext, though dealers resisted moving to their platforms because it threatened their profits. ``The CDS market is going to go to exchanges,'' Emmanuel Roman, co-chief executive officer of GLG Partners Inc., which manages about $24 billion, said at the Hedge 2008 conference in London on Oct. 23. ``That's a very good development. Not good for the banks but good for everyone else.''

Trading of credit-default swaps on government debt has increased since countries from the U.S. to Germany began pumping cash into their banks to prevent more failures, said Puneet Sharma, head of investment-grade credit strategy at Barclays Capital in London. The expenditures mean the ``probability of downgrade has increased,'' he said.

Investors are buying protection on countries to speculate on a deterioration of their credit quality and ratings as governments take on risky assets, even if they don't think there is a chance of default.

Gross issuance of Treasury coupon securities will rise to about $1.15 trillion in the 2009 fiscal year from $724 billion in fiscal 2008, according to Credit Suisse Securities USA LLC, one of the 17 primary dealers of U.S. government securities that are obligated to bid at the Treasury's auctions.

``I do not think the U.S. market will blow up,'' said Pierre Naim, who bought default protection on Treasuries in January for his Rainbow Global High Yield hedge fund in the Bahamas. ``But the quality of U.S. government assets is going down by the day.''

Credit-default swaps on Treasuries have risen nearly 40 percent since TARP was signed into law Oct. 3, and are now about the same as Mexican and Thai government debt before the credit markets began to seize up in June 2007, CMA Datavision prices show. Contracts on bunds soared by 77 percent and gilts by 66 percent over the same period.

The Treasury has allocated an initial $250 billion out of the $700 billion approved by Congress to shore up lenders, and is being pressured by the Financial Services Roundtable, a trade association of the 100 largest banks, securities firms and insurers, to broaden its guidelines so that insurance companies, broker-dealers, automobile companies and institutions controlled by foreign banks could also sell stakes to the government.

Oct. 29 (Bloomberg) -- The U.S. government's $160 billion handout to banks from Niagara Falls to Beverly Hills is going mostly to lenders that need it least, putting weaker rivals at risk of being shut down or taken over, analysts say.

``This has the unintended effect of making the strong stronger and the weak weaker,'' said Gray Medlin, founder of Carson Medlin Co., a Raleigh, North Carolina, investment bank focused on banking deals. ``Banks that are getting bad exams and are under intense pressure from regulators won't be successful in applying.''

The government buying spree has so far targeted two dozen regional lenders. One, PNC Financial Services Group Inc., immediately bought a competitor, National City Corp. Another, Saigon National Bank, had almost four times the minimum level of capital before selling a $1.2 million stake.

Treasury Secretary Henry Paulson is doling out cash to recapitalize lenders and jump-start takeovers. Besides PNC and Saigon National, regional lenders that have accepted government stakes in exchange for cash include SunTrust Banks Inc., Capital One Financial Corp. and KeyCorp. They also include City National Corp., in Beverly Hills, and First Niagara Financial Group Inc., in upstate New York.

``The goal with this over time is to drive consolidation,'' said Ron Farnsworth, chief financial officer of Umpqua Holdings Corp. in Portland, Oregon, which expects to sell a $246 million stake to the government. Takeovers, either independently or helped by the Federal Deposit Insurance Corp., are ``definitely one of the opportunities we have,'' Farnsworth said.

House Minority Leader John A. Boehner, an Ohio Republican, today questioned the program, saying in a letter to Paulson that ``funds made available under the economic rescue package should not be used to pay for bank acquisitions, raises, and executive bonuses.'' His letter came as House Speaker Nancy Pelosi, a California Democrat, and Majority Leader Harry Reid, a Nevada Democrat, told Paulson to restrict pay at firms that get government money.

Banks that haven't yet joined the government's Troubled Asset Relief Program, or TARP, include Colonial Bancgroup Inc., a Montgomery, Alabama-based lender that lost $71 million in the third quarter and had its credit rating reduced Oct. 27 to BBB-by Fitch Ratings, the lowest investment-grade rating. Colonial has a Tier 1 capital ratio of 10 percent, compared with the 6 percent level deemed ``well-capitalized'' by regulators.

``I'd view their approval in the TARP as unlikely,'' said Adam Barkstrom, an analyst at Sterne Agee & Leach Inc. in Baltimore. ``They have a high exposure to Florida residential construction loans and there is a perception that they have been dragging their feet in addressing their problems.''

Colonial Chief Financial Officer Sarah Moore said the lender was ``interested'' in the funding, and that it could be eligible for as much as $570 million. Banks have until Nov. 14 to apply to the Treasury's program.

Some lenders, including International Bancshares Corp., Trustmark Corp. and Park National Corp., have said they intend to apply for Treasury funds. IBC and Park National both said shareholders must vote to permit issuing preferred shares.

Of 60 banks followed by Sterne Agee, five may not qualify for government help, the firm said in a report yesterday. Four of those are in Alabama or Florida, states hurt by the housing- market meltdown. The government money ``amounts to a sort of `seal of approval' from the Treasury,'' CreditSights Inc. analysts led by David Hendler wrote in a note Oct. 27.

``Those struggling the most probably aren't going to participate,'' said Karen Dorway, president of BauerFinancial, a Coral Gables, Florida-based research firm that studies the financial health of banks. She included as examples Downey Financial Corp., BankUnited Financial Corp. and Vineyard National Bancorp.

All three are operating under regulatory enforcement orders, and Downey earlier this month reported its fifth consecutive quarterly loss, bringing the total to $680 million. Downey said on Sept. 5 it had until Oct. 20 to submit a long-term plan to the Office of Thrift Supervision. Elizabeth Stover, Downey's spokeswoman, said on Oct. 22 that the company wouldn't discuss the plan publicly.

The government isn't forthcoming on explaining the purchase program because of concern it may spark bank runs, said Randy Dennis, president of DD&F Consulting, a Little Rock, Arkansas, firm that advises banks. ``Banks that are left out will have to deal with the PR effect of not being included,'' he said.

Some lenders say the deal was too good to refuse. The preferred shares that banks are selling to the U.S. Treasury yield 5 percent annually for the first five years before increasing to 9 percent. ``The program is so attractive that even though we have a fairly strong capital ratio, we just felt that it was an opportunity to get capital at a very attractive rate,'' said Roy Painter, chief financial officer at Saigon National, based in the Orange County, California, community of Westminster. ``We're a small organization, we expect to grow, and we'll need the additional capital down the road.''

Being early to attract Treasury's attention is an advantage, Farnsworth said in an interview Oct. 28. ``In the next few weeks, smaller banks are going to be reaching out to the FDIC saying, `Hey, we'd like some.'''

Oct. 29 (Bloomberg) -- Richard Burnett's lumber company had started loading wood onto ships heading for China. More was en route to the docks. It was all part of an order that would fill 100 40-foot cargo containers.

Then Burnett got a call from his buyer at Shanghai VIVA Wood Products Co. The deal was dead. He told Burnett, president of Cross Creek Sales LLC in Augusta, Georgia, he couldn't get a letter of credit to guarantee payment for at least six months. ``It was like a spigot got cut off,'' Burnett said, recounting the transaction that fell apart in July. The inability of buyers in China and Vietnam to get letters of credit has cost his company as much as $4 million this year, a third of projected revenue, forcing him to lay off 15 of 35 employees, he said.

Suppliers of oil, coal, grains and consumer products from Chicago to Mumbai are losing sales as the credit crisis spreads beyond financial institutions, and banks refuse financing or increase the fees for buyers. Coupled with declining demand, the credit squeeze is threatening international trade, one of the lone bright spots in the global economy. ``It's like standing on a beach watching a tsunami, knowing that it's coming,'' said Scott Stevenson, manager of the International Finance Corp.'s Global Trade Finance Program. IFC is the World Bank's private lending arm.

Emerging markets such as Brazil, Vietnam and South Africa are particularly vulnerable because buyers have more trouble proving their financial strength. The slowdown is also damaging the U.S., the world's largest economy, where exports accounted for almost two-thirds of the 2.1 percent growth in gross domestic product in the 12 months through June, according to the U.S. Trade Representative's office.

Another sign of trouble: The Baltic Dry Index, a measure of commodity shipping costs that banks watch as an economic indicator, fell below 1,000 yesterday for the first time in six years, dropping it 89 percent for the year.

Global trade volumes may sink next year, their first decrease since 1982, according to Andrew Burns, a lead economist at the World Bank. While there is still uncertainty over future prospects, trade may contract by as much as 2 percent, after annual increases of 5 percent to 10 percent over the past decade.

``We only see this kind of shock when we have outbreaks of war, or maybe the oil shocks of the 1970s,'' said Kjetil Sjuve, a commodities shipbroker at Lorentzen & Stemoco AS in Oslo. ``This lack of credit was a shock to the entire economy. We were hit second after the banks.''

Of the $13.6 trillion of goods traded worldwide, 90 percent rely on letters of credit or related forms of financing and guarantees such as trade credit insurance, according to the Geneva-based World Trade Organization.

Letters of credit are centuries-old instruments that allow far-flung partners to complete large transactions. An importing company gets its bank to issue the letter, guaranteeing payment for a delivery. That bank provides the letter to the exporter's bank, which then guarantees payment to the exporting company.

The system breaks down when banks don't trust one another and are unwilling to accept a letter of credit as proof that payment is coming.

From 2000 through last year, the use of letters of credit declined to about 10 percent of global trade transactions, the IFC's Stevenson said. Over the past six months, they began ``roaring back into fashion'' as sellers sought to guarantee payments from buyers they no longer trusted, he said. At the same time, liquidity problems caused banks to increase charges.

The cost of a letter of credit has tripled for buyers in China and Turkey and doubled for Pakistan, Argentina and Bangladesh, said Uwe Noll, director of country risk sales at Deutsche Bank AG. Banks are now charging 1.5 percent of the value of the transaction for credit guarantees for some Chinese transactions, bankers say.

``The whole global trade production line relies on letters of credit,'' Matt Robinson, an analyst at Moody's Economy.com wrote in an Oct. 23 report. ``No letters of credit, no transactions -- and no transactions mean no international trade.''

An Iranian oil tanker able to carry enough crude oil to supply Ireland for five days arrived at the Turkish port of Ceyhan on Oct. 6. Then she waited eight days before the company that hired her was able to secure a letter of credit that was acceptable to Iraq, the country selling the cargo, according to two people involved in the loading and unloading of the oil.

Mumbai-based Essar Shipping Ports & Logistics Ltd. couldn't buy equipment used to handle bulk materials at ports when the Chinese supplier wasn't able get a letter of credit from an Indian state-owned bank accepted in China, said V. Ashok, Essar's executive director. ``This is absolutely a crisis situation here,'' Ashok said. ``If you don't discount LCs, how will you do business? Business around the world is done on LCs, not cash. It's all jammed.''

In Chicago, C1 Resources is holding up 1 million metric tons of cement valued at as much as $150 million, because an African customer can't secure a letter of credit, said Chief Operating Officer Rob Risner. The order was placed Sept. 10 for shipment to Nigeria, Cameroon and Angola and the customer is still seeking a line of credit, Risner said.

Burnett, of Cross Creek, said the demise of his deals with Asian buyers also reflects the weakness of the U.S. economy, including a slowdown in construction that has reduced demand for the wood products companies such as Shanghai VIVA make. Liu Jian Jun, manager of Shanghai VIVA, said weak demand in the U.S. and elsewhere killed the deal with Cross Creek, not access to credit.

James Morrison, president of the Small Business Exporters Association in Washington, polled 1,000 of his members this month on the impact tight credit is having on their ability to trade. By a margin of six to one, companies that had tried to get export financing recently said they faced ``unusual difficulties.'' A few said their banks had told them the terms of existing credit facilities had to be reworked and the companies would have to provide more principal, Morrison said.

The same is true in Brazil. An Oct. 23 report from the country's Confederacao Nacional das Industrias, which represents 27 industry groups and 7,000 trade associations, found that Brazilian companies of all size are losing access to credit. ``To make exports feasible, you need funding and this has virtually dried up in the last weeks,'' said Flavio Castelo Branco, chief economist for the group.

Policymakers are responding. Pascal Lamy, head of the WTO, has called a meeting of trade officials for Nov. 12 in Geneva to discuss how to get more credit to exporters in poor nations. The organization has invited heads of the largest development banks as well as representatives from Citigroup Inc., JPMorgan Chase & Co. and other commercial banks.

The World Bank has added $500 million to the $1 billion it was already using to guarantee export financing. The U.S. Export- Import Bank, a government-chartered entity that helps finance exports, is gearing up to provide more guarantees, said Jeffrey Abramson, vice president for trade finance.

Dominic Ng, chief executive officer of Pasadena, California- based East-West Bancorp Inc., the biggest lender serving the Chinese community in the U.S., said his bank this year has reduced the number of letters of credit issued for the first time. It is providing about 10 percent fewer letters, after annual increases of 10 percent to 20 percent in the past decade. ``We've become more cautious,'' Ng said, blaming the retrenchment on a decline in the number of credit-worthy customers. Bank bailouts funded by the U.S. and other governments have begun to ease liquidity problems. ``But we still have credit issues,'' he said. ``And they are going to get worse, not better, because the economy is getting worse.''

New York, October 31, 2008 – The Depository Trust & Clearing Corporation (DTCC) announced today that it will begin to publish aggregate market data from its Trade Information Warehouse (Warehouse), the worldwide central trade registry it maintains on credit derivatives. Starting Tuesday, November 4 and continuing weekly, DTCC will post on its website www.dtcc.com/derivserv the outstanding gross and net notional values ("stock" values) of credit default swap (CDS) contracts registered in the Warehouse for the top 1,000 underlying single-name reference entities and all indices, as well as certain aggregates of this data on a gross notional basis only. The data is intended to address market concerns about transparency.

The data will be shown in two sections. Section 1 will show the outstanding notional values at a given point in time (the end of each week). Section 2 will show data relating to the weekly confirmed trade volume, or "turnover," with respect to the same underlying reference entities and indices, as well as similar aggregations of such data. Section 2 data will be published beginning the week after the initial publication of outstanding notional values.

The Trade Information Warehouse is a service offering of DTCC Deriv/SERV LLC, a wholly-owned subsidiary of DTCC, and is the market’s first and only central registry and automated trade database supporting the post-trade processing of over-the-counter derivatives contracts over their lifecycles, from confirmation through to final settlement. Established in November 2006, the Warehouse is the OTC derivatives industry’s electronic central registry for credit default swaps. With a client base that includes virtually all global derivatives dealers and more than 1,100 buy-side firms in 31 countries, DTCC’s Warehouse has registered the vast majority of all credit default swaps traded worldwide.

DTCC, through its subsidiaries, provides clearance, settlement and information services for equities, corporate and municipal bonds, government and mortgage-backed securities, money market instruments and over-the-counter derivatives. In addition, DTCC is a leading processor of mutual funds and insurance transactions, linking funds and carriers with their distribution networks. DTCC’s depository provides custody and asset servicing for more than 3.5 million securities issues from the United States and 110 other countries and territories, valued at US$40 trillion. In 2007, DTCC settled more than US$1.86 quadrillion in securities transactions. DTCC has operating facilities in multiple locations in the United States and overseas.

DTCC Deriv/SERV LLC, a wholly-owned subsidiary of DTCC, provides automated matching and confirmation for OTC derivatives contracts, including credit, equity and interest rate derivatives. According to major market participants, over 90% of credit derivatives traded globally are electronically confirmed through Deriv/SERV. The Trade Information Warehouse, a service offering of Deriv/SERV launched in November 2006, is the market’s first and only comprehensive trade database and centralized electronic infrastructure for post-trade processing of OTC derivatives contracts over their lifecycles, from confirmation through to final settlement.

Gary Gorton, a 57-year-old finance professor and jazz buff, is emerging as an unlikely central figure in the near-collapse of American International Group Inc.

Mr. Gorton, who teaches at Yale School of Management, is best known for his influential academic papers, which have been cited in speeches by Federal Reserve Chairman Ben Bernanke. But he also has a lucrative part-time gig: devising computer models used by the giant insurer to gauge risk in more than $400 billion of devilishly complicated deals called credit-default swaps.

AIG relied on those models to help figure out which swap deals were safe. But AIG didn't anticipate how market forces and contract terms not weighed by the models would turn the swaps, over the short term, into huge financial liabilities. AIG didn't assign Mr. Gorton to assess those threats, and knew that his models didn't consider them. Those risks have cost AIG tens of billions of dollars and pushed the federal government to rescue the company in September.

The global financial crisis is studded with tales of venerable financial firms failing to protect themselves against the unexpected. In the case of AIG, as with many other firms, the financial horrors were hidden in the enormous market for credit-default swaps, which are a form of insurance against defaults on all sorts of debts.

A close look at AIG's risk-management operations, and the rapid-fire chain of events that crippled the firm, raises questions about the run-up to the financial crisis: Did firms like AIG plunge into lucrative but perilous new markets without thoroughly understanding the pitfalls? Had the sheer complexity of the financial products made it all but impossible to fully calculate the risk? And did firms put too much faith in computer models to assess dangers?

The turmoil at AIG is likely to fan skepticism about the complicated, computer-driven modeling systems that many financial giants rely on to minimize risk. As chief executive of Berkshire Hathaway Inc., which owns insurance companies, Warren Buffett has been sounding the alarm about the issue for years. Recently, he told PBS interviewer Charlie Rose: "All I can say is, beware of geeks...bearing formulas."

Last December, at a meeting with investors, Martin Sullivan, then AIG's chief executive officer, told investors concerned about exposure to credit-default swaps that models helped give AIG "a very high level of comfort." Mr. Gorton explained at the meeting that "no transaction is approved" by the chief of AIG's financial-products unit "if it's not based on a model that we built."

Now, a federal criminal probe in Washington is examining whether AIG executives misled investors at that meeting, and whether any of its executives misled its outside auditor last fall. AIG itself has been forced to post about $50 billion in collateral to its trading partners, largely to offset sharp drops in the value of securities it insured with the credit-default swaps. These payments have continued to balloon after the bailout -- raising the specter that the government will eventually have to lend more taxpayer money to AIG.

This account of AIG's risk-management blunders is based on more than two dozen interviews with current and former AIG executives, AIG's trading partners and others with direct knowledge of the firm, as well as internal AIG documents, regulatory filings and congressional testimony. Mr. Gorton, who continues to be a paid AIG consultant, referred questions about his role to AIG. Mr. Sullivan declined to comment.

AIG's credit-default-swaps operation was run out of its AIG Financial Products Corp. unit, which had offices in London and Wilton, Conn. In essence, AIG sold insurance on billions of dollars of debt securities backed by everything from corporate loans to subprime mortgages to auto loans to credit-card receivables. It promised buyers of the swaps that if the debt securities defaulted, AIG would make good on them. AIG executives, not Mr. Gorton, decided which swaps to sell and how to price them.

In His Own Words - Gary Gorton on risk models, market shifts and investor panic:

The swaps expose AIG to three types of financial pain. If the debt securities default, AIG has to pay up. But there are two other financial risks as well. The buyers of the swaps -- AIG's "counterparties" or trading partners on the deals -- typically have the right to demand collateral from AIG if the securities being insured by the swaps decline in value, or if AIG's own corporate-debt rating is cut. In addition, AIG is obliged to account for the contracts on its own books based on their market values. If those values fall, AIG has to take write-downs.

Mr. Gorton's models harnessed mounds of historical data to focus on the likelihood of default, and his work may indeed prove accurate on that front. But as AIG was aware, his models didn't attempt to measure the risk of future collateral calls or write-downs, which have devastated AIG's finances.

The problem for AIG is that it didn't apply effective models for valuing the swaps and for collateral risk until the second half of 2007, long after the swaps were sold, AIG documents and investor presentations indicate. The firm left itself exposed to potentially large collateral calls because it had agreed to insure so much debt without protecting itself adequately through hedging.

The credit crisis hammered the markets for debt securities, sparking tough negotiations between AIG and its trading partners over how much more collateral AIG should have to post. Goldman Sachs Group Inc., for instance, has pried from AIG $8 billion to $9 billion, covering virtually all its exposure to AIG -- most of it before the U.S. stepped in.

Such payments continued after the government bailout. AIG already has borrowed $83.5 billion from the Federal Reserve, a little more than two-thirds of the $123 billion in taxpayer loans made available to AIG so far. In addition, AIG affiliates recently obtained from the government as much as $21 billion in short-term loans called commercial paper. Much of the $83.5 billion has been used to meet the financial obligations of the financial-products unit. If turmoil in the markets causes prices of many assets to fall further, the government might have to cough up more money to help keep AIG afloat. Cutting it off would risk renewing the market upheaval the policy makers have struggled to tame.

Mr. Gorton, the son of a Phoenix psychiatrist, took a circuitous route to academia. He studied Mandarin, considered becoming an actor and briefly drove a cab in Cleveland, where he carried a gun for protection, he later told acquaintances. Eventually, he collected multiple degrees, including a Ph.D. in economics, and joined the faculty of the Wharton School of the University of Pennsylvania.

He drove an old Volkswagen Beetle, lived in a gritty North Philadelphia row house and accumulated a vast trove of jazz records, which he would cue up at night on two turntables to keep the music coming, recalls his wife at the time, Rachel Bliss.

He was passionate about mathematics, engaging in late-night conversations with fellow teachers, says Ms. Bliss. One of his academic interests was how banks could unload risk and sell loans to investors.

In 1987, AIG launched its financial-products unit with Howard Sosin, a math expert and former Drexel Burnham Lambert executive. Among his hires were Joseph Cassano, a former Drexel colleague. After Mr. Sosin left, Mr. Gorton joined as a consultant in the late 1990s. Mr. Cassano later took over the unit.

Early on, Mr. Gorton billed AIG about $250 an hour, which likely would have netted him about $200,000 a year, says a former senior executive at the unit. Eventually, his pay was far greater; another former colleague estimates it at $1 million a year.

Mr. Gorton collected vast amounts of data and built models to forecast losses on pools of assets such as home loans and corporate bonds. Speaking to investors last December, Mr. Cassano credited Mr. Gorton with "developing the intuition" that he and another top executive had "relied on in a great deal of the modeling that we've done and the business that we've created."

AIG began selling credit-default swaps around 1998. Mr. Gorton's work "helped convince Cassano that these things were only gold, that if anybody paid you to take on these risks, it was free money" because AIG would never have to make payments to cover actual defaults, according to the former senior executive at the unit. However, Mr. Gorton's work didn't address the potential write-downs or collateral payments to trading partners.

AIG became one of the largest sellers of credit-default-swap protection, according to a Moody's Investors Service report last week. For years, the business was extremely lucrative. In a 2006 SEC filing, AIG said none of the swap deals now causing it pa