Committee for the Abolition of Illegitimate Debt

 A public health crisis

The coronavirus pandemic is a serious public health problem and the human suffering caused by the spread of this virus will be enormous. If it massively affects countries of the Global South with very fragile public health systems that have been undermined by 40 years of neo-liberal policies, the death toll will be very high. We must not forget the critical situation of the Iranian population, victim of the blockade imposed by Washington, a blockade that includes medicines and medical equipment.

The mainstream media and governments focus on the differences in mortality rates according to age, but they very carefully avoid any reference to class differences and how mortality, due to the coronavirus pandemic, will affect human beings according to their income and wealth

Under the pretext of necessary fiscal austerity to repay public debt, governments and major multilateral institutions such as the World Bank World Bank
WB The World Bank was founded as part of the new international monetary system set up at Bretton Woods in 1944. Its capital is provided by member states’ contributions and loans on the international money markets. It financed public and private projects in Third World and East European countries.

It consists of several closely associated institutions, among which :

1. The International Bank for Reconstruction and Development (IBRD, 189 members in 2017), which provides loans in productive sectors such as farming or energy ;

2. The International Development Association (IDA, 159 members in 1997), which provides less advanced countries with long-term loans (35-40 years) at very low interest (1%) ;

3. The International Finance Corporation (IFC), which provides both loan and equity finance for business ventures in developing countries.

As Third World Debt gets worse, the World Bank (along with the IMF) tends to adopt a macro-economic perspective. For instance, it enforces adjustment policies that are intended to balance heavily indebted countries’ payments. The World Bank advises those countries that have to undergo the IMF’s therapy on such matters as how to reduce budget deficits, round up savings, enduce foreign investors to settle within their borders, or free prices and exchange rates.

, the IMF IMF
International Monetary Fund Along with the World Bank, the IMF was founded on the day the Bretton Woods Agreements were signed. Its first mission was to support the new system of standard exchange rates.

When the Bretton Wood fixed rates system came to an end in 1971, the main function of the IMF became that of being both policeman and fireman for global capital: it acts as policeman when it enforces its Structural Adjustment Policies and as fireman when it steps in to help out governments in risk of defaulting on debt repayments.

As for the World Bank, a weighted voting system operates: depending on the amount paid as contribution by each member state. 85% of the votes is required to modify the IMF Charter (which means that the USA with 17,68% % of the votes has a de facto veto on any change).

The institution is dominated by five countries: the United States (16,74%), Japan (6,23%), Germany (5,81%), France (4,29%) and the UK (4,29%).
The other 183 member countries are divided into groups led by one country. The most important one (6,57% of the votes) is led by Belgium. The least important group of countries (1,55% of the votes) is led by Gabon and brings together African countries.

http://imf.org and regional banks such as the African Development Bank have everywhere enforced policies that have deteriorated public health systems: job cuts in the health sector, precarious employment contracts, reduction of hospital beds, closure of local health centres, increase of health care Care Le concept de « care work » (travail de soin) fait référence à un ensemble de pratiques matérielles et psychologiques destinées à apporter une réponse concrète aux besoins des autres et d’une communauté (dont des écosystèmes). On préfère le concept de care à celui de travail « domestique » ou de « reproduction » car il intègre les dimensions émotionnelles et psychologiques (charge mentale, affection, soutien), et il ne se limite pas aux aspects « privés » et gratuit en englobant également les activités rémunérées nécessaires à la reproduction de la vie humaine. costs and of prices of medicines, under-investment in infrastructure and equipment, privatization of various health sectors, under-investment by the public sector in research and development of treatments for the benefit of the interests of large private pharmaceutical groups...

This is true in Africa, Asia, Latin America and the Caribbean and in the countries of the former Eastern bloc (Russia and other former republics of the former USSR, Central and Eastern Europe).

Nevertheless, this obviously also concerns European countries such as Italy, France or Greece. Moreover, in the United States, where 89 million people have no real health coverage, which Bernie Sanders sharply indicts, what will happen?

The mainstream media and governments focus on the differences in mortality rates according to age, but they very carefully avoid any reference to class differences and how mortality, due to the coronavirus pandemic, will affect human beings according to their income and wealth, and therefore, to the social class to which they belong. Quarantine and access to intensive care for people who are 70+ are very different whether you are rich or poor.

There will also be a divide between the countries that have, despite neoliberal policies, maintained their public health systems better than others and those that have gone furthest in undermining the quality of public health services.

 The stock market and financial crisis

The coronavirus is the spark or trigger of the stock market crisis, not the cause

While the mainstream media and governments constantly claim that the stock market crisis is caused by the coronavirus pandemic, I have stressed that all the elements of a new financial crisis have been in place for several years and that the coronavirus is the spark or trigger of the stock market crisis, not the cause (‘No, the coronavirus is not responsible for the fall of stock prices’). Although some people viewed this as an attempt to deny the importance of the Coronavirus, I stand by my assertion. The financial sphere has been replete with huge amounts of flammable agent for several years and it was obvious that a spark could and would cause the explosion: we were not sure about the exact time and the cause, but we knew it would come. So something had to be done to prevent it that was never done. Many authors of the radical left announced this crisis, including Michael Roberts https://thenextrecession.wordpress.com/, Robert Brenner https://blubrry.com/jacobin/31593687/jacobin-radio-w-suzi-weissman-robert-brenner-on-the-economy/, François Chesnais https://en.wikipedia.org/wiki/Fran%C3%A7ois_Chesnais and Michel Husson http://hussonet.free.fr/english.htm . Since 2017, I have, also, regularly written on the subject (see ‘Dancing on the Volcano’ in November 2017; ‘Sooner or later, there will be a new financial crisis’ dating from April 2018). With CADTM and others we have affirmed that a radical break with capitalism is necessary.

A first major stock market shock occurred in December 2018 in Wall Street and under pressure from a handful of large private banks and the Donald Trump Administration, the U.S. Federal Reserve FED
Federal Reserve Officially, Federal Reserve System, is the United States’ central bank created in 1913 by the ’Federal Reserve Act’, also called the ’Owen-Glass Act’, after a series of banking crises, particularly the ’Bank Panic’ of 1907.

FED – decentralized central bank : http://www.federalreserve.gov/ began cutting rates again and was applauded by those few large private firms that dominate the financial markets. The frenzy of rising stock market values picked up again, and large corporations continued to buy back their own shares at the stock market to amplify the phenomenon. Taking advantage of the fall in interest rates Interest rates When A lends money to B, B repays the amount lent by A (the capital) as well as a supplementary sum known as interest, so that A has an interest in agreeing to this financial operation. The interest is determined by the interest rate, which may be high or low. To take a very simple example: if A borrows 100 million dollars for 10 years at a fixed interest rate of 5%, the first year he will repay a tenth of the capital initially borrowed (10 million dollars) plus 5% of the capital owed, i.e. 5 million dollars, that is a total of 15 million dollars. In the second year, he will again repay 10% of the capital borrowed, but the 5% now only applies to the remaining 90 million dollars still due, i.e. 4.5 million dollars, or a total of 14.5 million dollars. And so on, until the tenth year when he will repay the last 10 million dollars, plus 5% of that remaining 10 million dollars, i.e. 0.5 million dollars, giving a total of 10.5 million dollars. Over 10 years, the total amount repaid will come to 127.5 million dollars. The repayment of the capital is not usually made in equal instalments. In the initial years, the repayment concerns mainly the interest, and the proportion of capital repaid increases over the years. In this case, if repayments are stopped, the capital still due is higher…

The nominal interest rate is the rate at which the loan is contracted. The real interest rate is the nominal rate reduced by the rate of inflation. , large private companies increased their debt and large investment funds Investment fund
Investment funds Private equity investment funds (sometimes called ’mutual funds’ seek to invest in companies according to certain criteria; of which they most often are specialized: capital-risk, capital development funds, leveraged buy-out (LBO), which reflect the different levels of the company’s maturity. have increased their buyouts of all kinds of companies, including industrial companies, by resorting to debt (‘The mountain of corporate debt will be the seed of the next financial crisis’ published in April 2019).

A first major stock market shock occurred in December 2018 in Wall Street, then a major liquidity crisis in September 2019

Then, once again in Wall Street from September 2019, there was a very big liquidity Liquidity The facility with which a financial instrument can be bought or sold without a significant change in price. crisis in a financial market Financial market The market for long-term capital. It comprises a primary market, where new issues are sold, and a secondary market, where existing securities are traded. Aside from the regulated markets, there are over-the-counter markets which are not required to meet minimum conditions. that was nevertheless saturated with liquidity. A liquidity crisis when there is a profusion of liquidity is just an apparent paradox as I explained in ‘The Credit Crunch is Back and the Federal Reserve Panics on an Ocean of Debt’ published on September 25, 2019 and in ‘Another look at the Federal Reserve’s panic in September 2019 and solutions to the crisis’ published on October 11, 2019. It was a serious crisis and the Federal Reserve intervened massively, injecting hundreds of billions of dollars in total to try to prevent the markets from collapsing. It also kept on its balance Balance End of year statement of a company’s assets (what the company possesses) and liabilities (what it owes). In other words, the assets provide information about how the funds collected by the company have been used; and the liabilities, about the origins of those funds. sheet more than $1.3 trillion in toxic structured products (MBS MBS
Mortgage Backed Securities See ABS. ) that it had bought from banks in 2008 and 2009 because it was rightly convinced that had those been put in the secondary debt market, their prices would collapse and lead to a major financial crisis and bank failures. The Fed did this not to defend the general interests of the population, but to safeguard the interests of big business, i.e. the richest 1% of society. The ECB ECB
European Central Bank The European Central Bank is a European institution based in Frankfurt, founded in 1998, to which the countries of the Eurozone have transferred their monetary powers. Its official role is to ensure price stability by combating inflation within that Zone. Its three decision-making organs (the Executive Board, the Governing Council and the General Council) are composed of governors of the central banks of the member states and/or recognized specialists. According to its statutes, it is politically ‘independent’ but it is directly influenced by the world of finance.

https://www.ecb.europa.eu/ecb/html/index.en.html and the other major central banks (UK, Japan, Switzerland, China...) have applied roughly the same kind of policy and they bear a very important responsibility for the accumulation of flammable agents in the financial sphere (see my article in March 2019 ‘The Economic Crisis and the Central Banks’).

There has been a huge increase in the creation of fictitious capital and in every financial crisis a large part of this fictitious capital has to “disappear” because it is part of the normal functioning of the capitalist system

There has been a huge increase in the creation of fictitious capital and in every financial crisis a large part of this fictitious capital has to “disappear” because it is part of the normal functioning of the capitalist system. Fictitious capital is a form of capital that develops exclusively in the financial sphere without any real link with production. It is fictitious in the sense that it is not directly based on material production and the direct exploitation of human labour and nature. As the French economist, member of ATTAC, Jean-Marie Harribey says: “Bubbles burst when the gap between realized value and promised value becomes too great and some speculators understand that promises of profitable liquidation cannot be honoured for all, in other words, when financial capital gains can never be realized for the lack of sufficient surplus value in production”. Jean-Marie Harribey, “La baudruche du capital fictif, lecture du Capital fictif de Cédric Durand”, Les Possibles, N° 6 - Printemps 2015: https://france.attac.org/nos-publications/les-possibles/numero-6-printemps-2015/debats/article/la-baudruche-du-capital-fictif

I reiterate that the coronavirus pandemic is not the real and deep-rooted cause of the stock market crisis that erupted in the last week of February 2020 and is still continuing. This pandemic is the detonator, the spark. Serious events of a different nature could have constituted that spark or trigger, such as the outbreak of a war between Washington and Iran or direct US military intervention in Venezuela. The ensuing stock market crisis would have been attributed to the war and its consequences. Similarly, I would have said that this war, the consequences of which would be very serious, no doubt about this, would have been the spark and not the root cause. So even if there is an undeniable link between the two phenomena (the stock market crisis and the coronavirus pandemic), this does not mean that we should not condemn the simplistic and manipulative explanations which put all the blame on the back of coronavirus. This mystifying explanation is a trick designed to divert the attention of public opinion (of the 99%) from the role played by policies in the interest Interest An amount paid in remuneration of an investment or received by a lender. Interest is calculated on the amount of the capital invested or borrowed, the duration of the operation and the rate that has been set. of big business on a planetary scale and the complicity of the governments in place.

 The crisis in the production sector preceded the coronavirus pandemic

That’s not all. Not only had the financial crisis been latent for several years - the continued rise in financial asset Asset Something belonging to an individual or a business that has value or the power to earn money (FT). The opposite of assets are liabilities, that is the part of the balance sheet reflecting a company’s resources (the capital contributed by the partners, provisions for contingencies and charges, as well as the outstanding debts). prices was a very clear indicator of this - but a crisis in the production sector had begun long before the Covid19 virus spread in December 2019, before the closure of factories in China in January 2020 and before the stock market crisis at the end of February 2020.

The year 2019 saw the start of a crisis of overproduction of goods, particularly in the car industry, with a massive drop in automobile sales in China, India, Germany, Great Britain and other countries. This has led to a reduction in automobile production. There was also overproduction in the German manufacturing sector for machine tools and other industrial equipment, one of the world’s top 3 producers in this sector. There was a very sharp reduction in Chinese industrial growth, which had serious consequences for countries exporting equipment, automobiles and raw materials to China. In the second half of 2019, a recession began in the manufacturing sector in Germany, Italy, Japan, South Africa, Argentina, etc. as well as in several manufacturing sectors in the United States.

 The evolution of the financial and economic crisis since 3 March 2020

During the last week of February 2020, the world’s major stock exchanges experienced a very significant drop of between 9.5% and 12%, the worst week since October 2008

Let us remember that during the last week of February 2020, the world’s major stock exchanges (in the Americas, Europe and Asia) experienced a very significant drop of between 9.5% and 12%, the worst week since October 2008.

I’m picking up where I left off on March 4, 2020 ‘No, the coronavirus is not responsible for the fall of stock prices’ the day after the U.S. Federal Reserve, the Fed, decided to lower its key interest rate by 0.5%.

 Central banks as pyromaniac firefighters

On March 3, 2020, the Fed decided to set its key rate within a range of 1% to 1.25%, a cut of 0.50%, which is the largest in recent years since so far the Fed had been cutting its rate by 0.25%. Faced with the continued plummeting of the stock markets and in particular bank stocks that are on the verge of bankruptcy, the Fed decided to make a further cut on 15 March 2020, hitting even harder than 3 March. This time, it lowered its rate by 1%. Therefore, since March 15, the Fed’s new key interest rate has been in a range of 0 to 0.25%. Banks are therefore encouraged to increase debt.

The Fed not only lowered interest rates, it started to inject a huge amount of dollars into the interbank market Interbank market A market reserved for banks where they exchange financial assets among themselves and borrow/lend over the short term. The interbank market is also where the European Central Bank (ECB) intervenes to provide or take back liquidities (management of the money supply to control inflation). again because banks, once again, no longer trust each other and are reluctant to lend money to each other. The Fed chairman said that the Fed has planned to inject more than $1 trillion of liquidity into short-term markets in the coming weeks, including the repo market, where it has already intervened massively between September and December 2019. The repo market [1] refers to the mechanism by which banks finance themselves for a short period of time: they sell (repo) securities that they own and commit to repurchase them quickly. For example, they deposit U.S. Treasury securities or AAA-rated corporate bonds Corporate bonds Securities issued by corporations in order to raise funds on the Money Markets. These bonds resemble government bonds but are considered to be more risky than government bonds and other guaranteed securities such as Mortgage Backed Securities, and therefore pay higher interest rates. for 24 hours in repo transactions (i.e. as collateral Collateral Transferable assets or a guarantee serving as security against the repayment of a loan, should the borrower default. or as security for their borrowing). In exchange for these securities, they obtain cash at an interest rate close to or equal to the key rate set by the Fed, which, as we have just seen, has been close to 1% since 3 March 2020 and 0% since 15 March 2020.

Banks that undertake not to reduce the volume of their loans to the private sector can obtain substantial financing from the ECB at a negative rate of -0.75%. This means that they are remunerated and subsidized when they borrow from the ECB

The European Central Bank Central Bank The establishment which in a given State is in charge of issuing bank notes and controlling the volume of currency and credit. In France, it is the Banque de France which assumes this role under the auspices of the European Central Bank (see ECB) while in the UK it is the Bank of England.

ECB : http://www.bankofengland.co.uk/Pages/home.aspx (ECB) headed by Christine Lagarde, whose key rate is 0%, announced on 12 March 2020 that it would increase its purchases of private (bonds and structured products) and public (sovereign securities) financial securities Financial securities Financial securities include equity securities issued by companies in the form of shares (shares, holdings, investment certificates, etc.), debt securities, excluding commercial instruments and savings certificates (bonds and similar securities), and holdings or shares in Undertakings for Collective Investment in Transferable Securities (UCITS). . It will also increase the volume of cheap medium-and long-term loans granted to banks.

Banks that undertake not to reduce the volume of their loans to the private sector (if they do not keep their promises there is no provision for fining them) can obtain substantial financing from the ECB at a negative rate of -0.75%. This means that they are remunerated and subsidized when they borrow from the ECB.

As mentioned above, on Sunday, March 15, as it was again seized by panicked once again by what had happened the previous week, the Fed convened its steering committee in a hurry and without waiting for the normal meeting date brought its interest rate down to 0% (its key rate is in the range of 0% to 0.25%). The Fed also announced that it was going to start buying structured products from banks again, the infamous MBS (Mortgage Mortgage A loan made against property collateral. There are two sorts of mortgages:
1) the most common form where the property that the loan is used to purchase is used as the collateral;
2) a broader use of property to guarantee any loan: it is sufficient that the borrower possesses and engages the property as collateral. Backed Securities), which were at the centre of the 2007-2008 financial crisis. It announced that it will buy $200 billion worth of it.

Nevertheless, this did not stop the massive sales of shares on the stock markets, all the world’s stock exchanges plunged on Monday 16 March 2020. The fall on Wall Street reached a new one-day record: - 12%. On 18^th March the massive selling of shares continued.

 Stock markets continued to fall

Several black days, i.e. several stock market crashes, took place in the second half of February and the first half of March 2020

Several black days, i.e. several stock market crashes, took place in the second half of February and the first half of March 2020, despite massive interventions by central banks in both the North and South of the planet, in the West and in the East.

The trading Market activities
trading Buying and selling of financial instruments such as shares, futures, derivatives, options, and warrants conducted in the hope of making a short-term profit. sessions were literally chaotic. On numerous occasions over the past few weeks, the sessions have had to be interrupted for 15 to 30 minutes in an attempt to stem the increasingly massive sales and avert disaster. These interruptions, when the stock exchange authorities activated the circuit breaker (in their jargon), have taken place on several occasions on Wall Street, in Brazil, in India and in Europe, to the point where some commentators are wondering why the authorities did not simply close the stock exchanges (see The Telegraph, “Shutting down stock markets for three months would give everyone a much-needed break”, https://www.telegraph.co.uk/business/2020/03/17/shutting-stock-markets-three-months-would-give-everyone-much/ ).

On Thursday, March 12, 2020, one of the darkest recent days, the fall was impressive : - 12.28% in Paris, - 10.87% in London, - 11.43% in Frankfurt, - 14.21% in Brussels and in Milan a record - 16.92%! In New York, the Dow Jones lost -9.99%, the Nasdaq - 9.43% and the S&P500 - 9.51%. The stock markets of Asia, Latin America and Africa also took a nosedive.

On Monday, March 16, despite the Fed’s decision to lower its interest rate to 0% in an attempt to please large capital and end the plunge into the void, massive selling of shares continued: in New York, the S&P500 fell 12%, the Brazilian stock market fell 13%. The European stock markets fell once again: London lost 4%, Paris and Frankfurt lost more than 5%, Milan - 6%, Brussels - 7%, Madrid - 8%. In Asia-Pacific: the Nikkei in Tokyo fell 2.5%, Chinese stock exchanges lost between 3 and 4%, the Indian stock exchange plunged 8%, the Australian stock exchange lost 9.5%. The debacle continues.

Between February 17 and March 17, 2020 inclusive, the stock exchanges underwent a veritable purge

In less than a month, between February 17 and March 17, 2020 inclusive, the stock exchanges underwent a veritable purge (see the infographics): in New York, the Dow Jones Industrial Average lost 32%, the S&P 500 of the top 500 companies lost 24% of its value. In London, the FTSE fell 31%, in Frankfurt, the DAX fell 37%! In Brussels, the BEL 20 plunged 41%. The CAC 40 lost 36.5%. The Madrid stock exchange (IBEX 35) lost 38%, the Lisbon stock exchange (PSI20) lost 31.5%. The Brazilian stock market lost 28%, and the Buenos Aires stock market lost more than 30%. The Indian stock exchange lost 25.5%. The South African stock exchange (JSE) lost 35%. RTS, the Moscow Stock Exchange lost 40%. Turkey’s BIST 100 plunged 28%. In Tokyo, the Nikkei lost 28%. In Hong Kong, Hang Seng lost 21%. In Sydney, Australia’s ASX is down 26%. Only the Shanghai Stock Exchange is limiting losses: -7%. If the Shanghai stock exchange is better than any other stock exchange in the world, it is due to the support provided, under government injunction, by Chinese state-owned enterprises and public funds. They were ordered to systematically buy shares on the stock exchange in the midst of the coronavirus crisis while others were selling.

In summary, between 17 February and 17 March, all the world’s stock exchanges suffered very significant losses comparable to or greater than those of the previous major stock market crises of 1929, 1987 and 2008.

Infographics: Evolution in % of the main stock exchanges in the world between February 17 and March 17, 2020

Source: Calculation by the author from CNN and Boursorama data.
Click on picture to enlarge

 Who gets rid of the stock en masse?

The major stock markets are dominated by about a hundred large private groups, their shareholders are part of the 1% or even 0.1%. These large private groups play a role in triggering the stock market crisis and its spread

The major stock markets are dominated by about a hundred large private groups, their shareholders are part of the 1% or even 0.1%. These large private groups play a role in triggering the stock market crisis and its spread.

Among them are about thirty large banks, a dozen large investment funds - among which BlackRock, Vanguard, State Street and Pimco play a key role -, we must add the GAAFs - Google, Apple, Amazon, Facebook-, large industrial conglomerates, a small dozen large oil companies, a few large pension funds Pension Fund
Pension Funds Pension funds: investment funds that manage capitalized retirement schemes, they are funded by the employees of one or several companies paying-into the scheme which, often, is also partially funded by the employers. The objective is to pay the pensions of the employees that take part in the scheme. They manage very big amounts of money that are usually invested on the stock markets or financial markets. ...

This handful of billionaires and the headquarters of their companies are highly interconnected because there are systematically cross-holdings (i.e. a bank can be a shareholder in industrial companies and vice versa and, of course, investment funds such as BlackRock hold stakes in all large private companies - see box). They realized that the party was about to end and that it was time at the end of February 2020 to reap the premium over what they had paid over the last two or three years to accumulate shares and the peak of the stock market party in early 2020. They started selling and got a very good price at the beginning. Then, following a herd behaviour, all the major shareholders and all the players in the financial markets started to sell, making a good profit Profit The positive gain yielded from a company’s activity. Net profit is profit after tax. Distributable profit is the part of the net profit which can be distributed to the shareholders. before the fall in prices became such that the selling price of the shares fell below the level before the bubble started. In the meantime, the biggest and fastest made considerable gains.

The important thing for a large shareholder is to sell when the price has not yet fallen too much, therefore to sell as much and as quickly as possible, they use software programmed to sell shares as soon as the price movement reaches a certain level, hence days with considerable falls followed by a recovery the day after, because those who sold the day before at the start of the fall may think it is worth buying back shares at a price 5% or 10%, or even 20%, lower than the price at which they sold them at the start of the session the day before.

The market value of the three largest investment funds, BlackRock, Vanguard and State Street, is estimated to have fallen by $2.8 trillion in just under a month

This explains the succession of black days, followed by days of rebound. What is certain is that in spite of the momentary rebounds, the general trend is towards a real purge. The stock market bubble is bursting before our very eyes.

The plunge in the stock markets has been so great that, in the end, the major groups that have launched the process of massive sales are seeing their assets shrink. They may have made gains by speculating downwards and then upwards, but at this stage of the crisis the total value of their assets has fallen sharply. The Financial Times provides an estimate for the three largest investment funds, BlackRock, Vanguard and State Street, whose market value of assets is estimated to have fallen by $2.8 trillion in just under a month (Financial Times, “World’s three biggest fund houses shed $2.8tn of assets” https://www.ft.com/content/438854a8-63b0-11ea-a6cd-df28cc3c6a68 published on 15 March 2020). 2800 billion dollars is 10% more than France’s annual GDP GDP
Gross Domestic Product Gross Domestic Product is an aggregate measure of total production within a given territory equal to the sum of the gross values added. The measure is notoriously incomplete; for example it does not take into account any activity that does not enter into a commercial exchange. The GDP takes into account both the production of goods and the production of services. Economic growth is defined as the variation of the GDP from one period to another. . According to the financial newspaper, while at the beginning of the year the assets held by BlackRock had reached the astronomical figure of $7.4 trillion, the plunge of the stock markets has reduced them by $1.4 trillion. Moreover, BlackRock’s stock market value fell by 28% in one month on 15 March 2020. Vanguard’s assets had reached $6.2 trillion and were reduced by $800 billion between February and March 15, 2020.

End of Part One

In Part 2, I will discuss:

• The plunge in bank shares
• The banks are in very poor health contrary to the official discourse
• The plummeting oil prices
• The beginning of the bubble burst in the private bond market Bond market A market where medium-term and long-term capital is lent/borrowed in the form of bonds. Bonds are creditor stakes issued by companies or States. . The plunge in the prices of private debt securities and the sharp rise in yields and risk premiums.
• The very good health of government debt Government debt The total outstanding debt of the State, local authorities, publicly owned companies and organs of social security. securities. Their price is rising. The governments of the dominant economies are financing themselves with a negative interest rate.
• Then I will come to the proposals for measures to be taken and the need to break with the capitalist system. We need a genuine revolution to radically change society and its way of life, its mode of ownership, its mode of production. This revolution will only take place if the victims of the system are self-active, self-organizing and shunt the 1% away from the various centres of power to create a real democratic power. A self-managing and feminist ecological-socialist revolution is needed.

Translated by Sushovan Dhar, in collaboration with Christine Pagnoulle