I am no expert on graphic design but it doesn't take an expert to know what images are striking and which are not. On a recent trip to Lisbon I had the pleasure of talking to Robin Fior, now I had no idea who he was, turns out he is a graphic designer who used to work for International Socialism, the precursor to the Socialist Worker. These are a few of his covers.
He also worked on propaganda for Betrand Russel's break away direct action group from the CND, committee of 100 with Ken Garland.
While searching for Robins work today I came across this.
Now there is nothing wrong with this its perfectly functional and I wouldn't be able to do any better myself, but there are designers operating on the left with talent who can and do, better. Take the wonderful DSG
Even some of the better pieces of recent political propaganda like the COR poster for 26th March.
Still lack some of the verve that this Portuguese poster for their upcoming May day protest has.
So Moody's today downgraded the debt rating of Portugal resulting in the interest rate on the bond rising making bondholders very happy, the same bondholders that employ Moody's to rate debt and other financial service products for them.
The interest rate has risen because Moody's believe the likelihood of a bailout is increased. Yet the interest rate of such an investment is related to the risk of you losing your money if you buy the bond, you will only lose your money if Portugal defaults on its debt, if Portugal is given a bailout this means that a default on the debt is made more unlikely.
So for bondholders a bailout is good news as it means they are likely to continue receiving their payments, but surely the interest rate should only be increasing if the likelihood of default is increasing.
The ratings agencies are very quick to put the squeeze on nation states when they get in debt, but its a very different story when they have to rate banks. Take September 15 2008 when
Moody's cut its ratings on the senior debt and some guaranteed subsidiaries of Lehman Brothers Holdings, the parent of Lehman Brothers Inc, by 10 notches to B3 from A2. It also cut the group's subordinated debt to Caa2 from A3 and its preferred stock to Ca from Baa1.
"Today's rating action follows the collapse in market confidence in the firm, and Lehman's announcement that it was filing for Chapter 11 bankruptcy protection after its failure to reach a merger agreement with a stronger strategic partner," Moody's said.
So Moody's, the geniuses that they are, downgraded their rating of Lehman stock only after the company had already filed for Bankruptcy. But of course that's not all these 'smartest guys in the room' were at.
Moody’s, Standard & Poor’s and Fitch Ratings face scrutiny by Congress and state insurance regulators after assigning top grades to U.S. subprime-mortgage bonds just before that market collapsed in 2007, sparking the financial crisis. Moody’s said last month it may be sued by the U.S. Securities and Exchange Commission for filing false and misleading descriptions of its credit-ratings policies.
These are two examples of the conflict of interest at work in the heart of the financial services industry.
The ratings agencies are paid to rate the financial products created by the banks, the better they rate the products, the more products are created. They are also competing against each other to rate as much product as possible so if Moody's start rating stuff BBB, but S&P are rating it AAA, where are the banks going to take their business? The different agencies are actually competing with each other to rate as much crap investment products as highly as they can.
We now are in another situation where the more these agencies downgrade the debt of nation states the greater the profits of the banks, who the agencies in turn are reliant on for their own profits. But it is only truly risky debt if there is a possibility of default and as we have seen from the actions of the ECB and IMF default is not an option as far as they are concerned.
This has been played out in many different countries before, in this clip Micheal Hudson explains the 2009 sovereign debt crisis in Latvia
Hudson talks about 'debt peonage', this is the status of Irish, Greek, Latvian and soon Portuguese taxpayers, working to pay a debt they will never be able to pay back.
There will be a bailout, the burden of this debt will be passed to the Portuguese tax payer, who will continue to make payments for decades to come to the bondholders, who are in general massively rich financial institutions. Europe is currently witnessing the greatest transference of wealth from poor to rich ever, it brings to mind the famous Warren Buffet quote.
"There's class warfare, all right, but it's my class, the rich class, that's making war, and we're winning."
