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What's REALLY Happening Globally - THIS is what's happening!

GLOBALIZATION AND POVERTY:
Interview with Dr. Vandana Shiva By Gary Null Progressive Radio Network, Broadcast December 16, 2008


GARY NULL (GN): My guest today is one of the more remarkable individuals that you will ever hear speak on the subjects that we're going to discuss: the relationship between globalization and poverty, the oil industry's destruction of agriculture, plus other issues involving the disposition of land and power and the body politics in Africa and India. Dr. Vandana Shiva is one of India's top nuclear physicists and an internationally renowned environmental and social activist. She has been credited as a principal founder of India's ecological and eco-feminism movement.


In 1982 she founded The Research Foundation for Science and Technology and Ecology in New Delhi, which led to the creation of an organization, Navdanya, dedicated to the restoration of organic farming across India and the preservation of indigenous knowledge and culture. For several decades Vandana has fought for changes in the globalized practices of agriculture and food and has traveled the world speaking against the bio-piracy of indigenous plants and their medicinal properties by large agriculture and pharmaceutical corporations. She has received numerous international awards including the Alternative Nobel Prize, UNEP's Global 500 Award, and the UN Earth Day International Award. Her most recent book is "Soil Not Oil: Environmental Justice in An Age of Climate Crisis." There are so many pressing issues in the world today, and I would like to start with one that is not getting the mainstream media attention that it deserves, specifically the relationship between corporate globalization and increased poverty, including the policies of the World Bank, IMF, the WTO and their western government backers. From your point of view how has the US and its aggressive push for free market economics contributed to the increase in poverty and a widening of the gap between the haves and have nots throughout the world, especially in light of Barack Obama recently stating that he is very much for globalization and free market efforts.

VANDANA SHIVA (VS): I think India is a good test case to see how globalization increases real poverty even while measurements of growth make it look like the country is booming. India's growth these last few years has been 9 percent and it is seen as one of the fastest growing economies. And yet in this decade of high growth under free market globalization India has the largest number of hungry people in the world. An agrarian society that has all the capacity to feed itself is today unable to feed its children partly because the land is being diverted for mining, for car companies and highways, and because agriculture itself is being diverted for luxury crops for the rich. One of the greatest tragedies of the new poverty that India is witnessing is the emergence of an epidemic of farm suicides. It's one step beyond poverty to have to end your life because you're so deeply indebted and the debt is completely related to corporate seed monopolies, such as Monsanto's genetically engineered BT cotton. It's a globalized agriculture controlled by a handful of agribusiness companies-the Cargill's and ConAgra's-and the WTO that wrote the rules of agriculture. The combination of seed and commodity controls has denied India its basic right to food, especially for the poor.


GN: There is also 9.1 percent growth in China and still 66 million hungry, unemployed people who are now beginning to protest. Do you believe that we will begin to see protests and riots in India such as what we have seen in Pakistan where the poor were not being subsidized and where there is no infrastructure to care for the poor?

VN: Actually protests are happening. Some protests come out in the language, voice and pain of the people themselves. They protest for land. They protest for food. They protest for water. They protest for forests, for the indigenous communities. But very often, just as our food is being genetically modified protests too are being genetically modified to appear as if they concern religion or are related to terrorism and extremism. And this mutation into a new form of response is partly a manipulation of those powers in control. They do not allow a farmer's protest to be viewed as simply a farmers' protest. This is what was happening in the state of Punjab two decades ago. Farmers' protests were mutated into a protest about religion. Out of it came the invasion of the Golden Temple in Amritsar, the military standoff, and finally the assassination of Prime Minister Indira Gandhi who had ordered the army to deal with the issue of the Punjab and extremism. But today terrorism is made to look like it appears by itself. I can offer two examples of conflicts about land and livelihood which have been distorted to look like they're conflicts initiated by people on the basis of caste, religion and ethnicity. We have had a major protest among the pastoral tribes in a region of Rajasthan, a desert area where livestock is the only economy because you can't really farm extensively with very little water. All of those common lands which are pastoral have been handed over to industry to grow bio-fuel. The pastoralists are now without land as well as livelihood. When they protest they stop the entire transport system of India. Yet the protest is not written in the language of the land and people's livelihood. It is written in the language of caste. Caste is a name for an occupation, just as pastoralists signify a pastoral occupation. Even the large Darfur conflicts in the Sudan, which are made to appear as if they are only about religious strife, is really about collapsing livelihoods with increasing desertification due to climate change. The settled agriculturalists and the pastoralists cannot meet their own needs. So they end up warring against each other. I think it is time for us to read the narrative of the new conflict and the new violence as distorted protests that were engineered to look like something else. And of course it suits the powerful and wealthy because they can keep free market globalization going and define war economies in every society as a means to contain terrorism.

GN: A lot of that has to do with policies on Wall Street and in Washington, which today are virtually one and the same. So if you have a peaceful protest of hungry farmers who cannot afford and do not want to use the genetically modified crops, such as cotton, and who are in such personal debt that they would rather commit suicide by the tens of thousands instead of seeing their families suffer anymore, then of course they would. But when you have people sitting on corporate boards and on Wall Street and in Washington who don't give a damn about the Indian public-in fact they don't even care about the average American because the average American is being thrown out on the street while these individuals are reaping humungous rewards by the very people who caused the problem. These are anti-civic individuals. How do you stop that mindset so that every truly progressive movement that deserves to be heard is not just stamped with the moniker of terrorist?

VN: I think the most important way to conduct resistance for a more just and peaceful society is to be absolutely committed to nonviolence. That was the bar of India's freedom movement, and that is the bar of the civil rights movement in the United States-to challenge power and wealth strategically but also nonviolently. That is a very strong demand of our time. The second very important issue is to continue to defend the democratic right to dissent. After all what is democracy if not the right to dissent? A dictatorship doesn't allow the right to dissent, and as I've written in book after book corporate globalization has become a dictatorship. It is drawing states into implementing that dictatorship, and as long as corporate globalization implements this dictatorship it will destroy democracy. It will treat every legitimate democratic action as equal to the worst form of terrorism. So we stand for democracy and democracy is our birthright and our duty.


GN: In our society, like your own, we have our own caste system. There are the have's and have not's. I've never in my lifetime seen the powerful bring in the poor and ask for their advice. So how in the world are we ever to change any thing constructively if the most powerful people in the land surround themselves with the elitists and refuse to acknowledge that the poor and those less up the ladder also may have something constructive to offer? Was it not Albert Camus who said, "We rarely confide in those who are better than we are?" What if the 'better' means people with more humanistic and practical views of how to solve problems, such as the advocates of the organic movement? What if all of India, Africa, and the United States were to start looking at long-term sustainability of small agriculture projects in every community using organic heirloom instead of genetically modified crops? Think of the consequences to the water, to the air, to the land, to erosion, to reforestation, to sustainability and compatibility. And yet we have no such movement except at the grassroots level. Not a single dollar in the United States goes for organic, and yet everything goes for the big and very immoral food companies.

VS: During the last 20 years I've worked with both a scientific realization as well as a political realization that one of the most radical revolutions of our time is adopting biodiversity, saving open-pollinated seeds and practicing organic farming. As you said it's a solution to every problem we face. It's a solution to climate change. Moving beyond oil returns more to the soil, and we find in an ecological and organic agriculture both the mitigation and the adaptation strategies for knowing how to deal with the mess that a fossil fuel civilization has created. Organic food is the best solution to the biggest health problem of our time. Two billion obese and ill with food-related diseases. One billion denied their rights to food. Hence three billion are denied the right to wholesome food that can be solved with a local ecologically robust food economy. Then there is the issue of water. Ten times more water is used in industrial chemical agriculture. Water is clearly a limiting factor and will become more of a crisis as climate change melts our glaciers, dries up our springs, and leaves more and more areas water scarce. It's also a solution to the conflicts all around us. I recently returned from a long field trip in the very poor Indian state of Orissa. Culturally, in terms of peace and harmony between nature and people and between people and people, there are amazing examples. Every villager has the deepest humanity. Every villager has the deepest sense of self sufficiency and enough-ness. That is the future we have to strive for. And I think the biggest monopoly in our time is when agribusiness went into the oil economy. It is a new genetic engineering industry. They are not going to allow governments to move towards organic farming rapidly. They will try everything to force genetic engineering upon us. Two decades ago when I started the Navdanya movement in India, these companies had announced they would have all seeds patented and all crops genetically engineered by the turn of the century. They have so far only genetically engineered four crops on any significant scale: cotton, soy, rice and canola. They haven't managed to patent everything under the sun, and we have built a movement that will not acknowledge patents. I call it the seed satyagraha just like Gandhi's satyagraha when he told the British that nature gives salt for free. We need it for our survival. We will make our own salt. In the same way we get seeds from our ancestors and nature. We will continue to save them for future generations, and we will not obey patent laws. I believe if we keep saving our open-pollinated seeds, if we keep doing organic farming, and those in the cities commit themselves to eating only food that is genuinely free of patents, GMO's, pesticides and toxins, and free of corporate control, we can succeed. Even if governments don't change their policies we will have created another economy. And if you look at the growth of the movement, it has grown without policy protection in spite of adverse policies. When we combine the financial, climate and food crises, the manipulative corporate economies will not survive. The economies of care and compassion fight it by their recognition that we live on a very fragile earth and have a very high level of responsibility to protect it. If there's going to be a future, it's going to be found in people's actions.


GN: I've always been an organic farmer, and I've been a major promoter of organic farming in the United States on a small scale. I'm a believer in moving back to the land, and then creating small sustainable communities. To grow one pound of organic potatoes takes 60 gallons of water. To grow one pound of meat, a 16 ounce steak, requires 12,000 gallons of water. If we're running out of water, and we are, would you suggest that it would make sense to preserve our water by being conscious that you're going to eat something that requires less? Now that meat has arachidonic acid. That arachidonic acid increases chemicals in the body called cytokines and tumor necrosis factors that result in inflammation. By eating organic and eating more naturally not only are avoiding these chemicals, besides many environmental toxins, but we are also saving water. Much food we buy at our corporate markets has traveled thousands of miles to reach our tables, and this leaves a large carbon footprint. So wouldn't it be better to buy something local, support our local food crops and organic movements to lessen pollution? Isn't it advantageous then to do everything we can to clean up the environment by going green? For those in India and other parts of the world who are principally vegetarian, and who care about life and the environment, do you imagine that at some point there needs to be a collective shift in consciousness that supersedes the power brokers and the policy makers, and says, "We tried it your way and look where we're at. We're now going to do it our way, and you're welcome to join us, but we're not going to listen to you anymore."

VS: Just because the corporate media doesn't cover it, doesn't mean it's not happening on a large scale. I think if you add together the people who want to eat and live consciously, who want to reduce the human ecological footprint on the planet, who want to do less harm to other human beings -- because every economic system that does violence to the planet also violates the rights of fellow human beings -- creates a powerful force in the world. I think as this information becomes more coherent and moves more quickly a conscious shift will take place. A year ago people would never have believed those of us who were saying all these measures of financial growth are fictitious. It's just a bubble waiting to burst. Twenty years ago I started to organize rallies of half a million farmers in the street to declare that the agra-industrial system would kill our farmers. It was a death knell for our farmers and a recipe for hunger. People didn't believe it. Today the farmers are committing suicide. Today the food prices have risen. Food sovereignty and local food systems are back on the agenda and that reveals the incoherence of the dominant corporate system. The governance of the truth we stand by, the truth of the earth, the truth of nature, the truth of justice is our greatest strength and that will only increase consciousness. From it we'll only grow with every step along the way. The next five and ten years will be absolutely unpredictable times, but as long as we can hold our ground and hope, I believe the shift of consciousness will turn today's dominators into the marginals who will be enlightened to come join our table of peaceful food and of abundant food.


GN: Well I absolutely agree with you. That was a very special insight. Now to two other areas that are not getting the attention, in my opinion, that they deserve in the United States. Every US administration, Democrat or Republican, has looked at profit as preferable to people. How has the mega corporations and western administrations given us a false utopian concept regarding human and economic development and environmental sustainability for raising people out of poverty? During the elections I didn't see a single statement that was printed or a voice spoken about the hundred million poor in the United States, the 36 million who go to bed hungry each day, the 12 million children in the United States who don't have enough to eat, let alone the 27 thousand children who die each year, and most of them from infections, from bad water or malnutrition. Not a word about these things, and yet they blather on as if somehow they're in touch. I'm asking who are they in touch with? Since it's always about profit and never about people.

VS: You know as the food crisis has intensified during the last year, food prices have doubled. But we've also seen the corporate profits driving the food system double. I think we now have a major contest between two futures. There's the future that you and I are talking about and living in. It's a future of providing food security to the last child on the basis of people working lovingly with the land. More farmers growing good food, growing organic food, and this will drive away hunger and food scarcity. I really find the United Nation's millennium goals highly un-ambitious because seven or eight years ago they talked only about halving the number of people who go to bed hungry. Well, with ecological farming and biodiversity agriculture we are not only doubling and tripling but we could increase food production five-fold and nutritional production even higher because the foods grown organically have much higher levels of nutrition. That's the way to address the problem of hunger. That's the way to make sure society does not neglect people. Of course there is another agenda. And that agenda will attempt to use the crisis it has created to grab more of the food and agrarian economy. Look at what happened at the June Summit on climate and food. The biggest winner was fortune's foremost Bill Gates and his foundation who wants to sell more chemical fertilizers to Africa, and then commercialize the food supply for Africa. The second winner was the genetic engineering lobby. Of course both of these plans are completely inappropriate. The prices of fertilizers are going high. Nitrogen fertilizers are a major cause of global warming because the nitrogen oxides emitted are 300 times more lethal in global warming than carbon dioxide. To push more chemical fertilizers during this period of climate change is doubly criminal because it will force African peasants into debt, and then it will force all of humanity into an ecological debt. The genetic engineering lobby offered a false solution. They said only they can solve the problem of addressing climate change. They can't because genetic engineering can only deal with single gene manipulations. Climate resilience in crops is a multi-genetic trait. They cannot engineer climate resilience. They can steal salt resistant seeds from us. They can steal flood resistant seeds from us. They can steal sources of seeds from us. I'm in fact preparing for our next campaign against bio-piracy-when agricorporations patent our traditional knowledge, our indigenous seeds. And when corporations are patenting, and there are 500 pending patents on climate resilience traits in crops, all of this is based on bio-piracy. Of course the real solution that we are offering is building community seed banks, building the commons for people to share as disasters happen. For example, we took salt tolerant rice down to the tsunami areas and drought tolerant rice to the areas in central India where they were having a four-year drought linked again to a climate catastrophe. The corporations will continue to seek profits. So we have to build on community. We have to build on people's rights. And this contest is not going to go away in a hurry. But the fact that it doesn't go away in a hurry doesn't mean we don't build the power of people.


GN: I would like to discuss the relationship between how the loss of natural biodiversity increases population growth and thereby increases poverty. If you would address the large agro-industrial players that you mentioned earlier and the destruction of biodiversity with their genetically modified seeds. I might mention that Hillary and Bill Clinton were sponsors of the Stevens Financial Group out of Little Rock, Arkansas, who was a major player in developing these genetically modified seeds. Under NAFTA and the WTO, the Clinton administration and its supporters thought it was a great idea. Little did they ever consider or care about the consequences. So if you would take a look at what it means to be forced into using seeds because your own natural seeds are no longer available. This has been true around the world where the World Bank and IMF went into almost every developing country and said, "We'll give you a loan, but you must now give us structural adjustments. No more growing sustainable crops. No more small crops. Now you're going to plant cash crops: cotton, soybeans, rubber and crops that you can get out of the country and sell abroad. That was also the case in India. Also speak about the contradiction between the great Green Movement, which won one person the Nobel Prize. But they weren't looking at what this green revolution actually meant in terms of the average person.

VS: Well you know the Green Revolution was far from green. It was introduced in India in 1965 and '66 when we had a drought. Because of the drought we needed to buy grain, and the US government said we could not have higher imports unless we changed our agriculture to the new seeds and the new chemicals. This package of new seeds that required chemicals is what is called the Green Revolution. The seeds had been evolved by Norman Borlaug who received the Nobel Peace Prize. The assumption was that commercializing and making agriculture more dependent on purchases would create a capitalist alternative to the spread of communism. And the reason the Green Revolution was called green was because it was contrary to red. It was not called green because it was ecological. The word green did not describe any ecological movement at that time. The Green Revolution was also pushed by the World Bank, which forced structural adjustments on India. It gave loans linked to structural adjustment to move seeds, pesticides and chemicals. The World Bank financed large dams that provided the intensive irrigation their seeds and chemicals required. Within the first few years 25 percent of the peasantry of Punjab had been wiped out. They were displaced from the land. Well within a decade, agriculture in Punjab had fallen into disarray, which is what then led to the extremist movement of the late '70s and early '80s. That was the basis of my book, "The Violence of the Green Revolution," because I wanted to understand why the land, which was called the most prosperous, is today the angriest and why young Punjabis were taking to guns. What the Green Revolution basically did was push farmers into debt. It left the land desertified. It destroyed variety. Punjab used to grow 250 crop varieties. Today it grows monocultures of wheat and rice during two separate seasons and a monoculture of genetically engineered cotton. Punjab is one of the areas where we have large numbers of farm suicides. Twenty percent of the Punjab is now unfit for cultivation. Ten percent is water logged by putting too much water in intensive irrigation. Now this is precisely the package upon which the genetic engineering revolution has been built. The biotechnology industry calls it the second green revolution, and Bill Gates wants to take this package to Africa as the Alliance for the Green Revolution in Africa. Gate's, the Rockefeller's and their corporate affiliates would like to bulldoze over Africa a green revolution like they bulldozed it on India in 1965 through conditions and through destruction of our sovereignty and democratic decision making. But the true green revolution is the ecological agriculture revolution. That's what we are trying to build.


GN: A final question I would like you to address is the difference between what evolutionary biologists, such as the late Francisco Varella and others, call autopoetic systems as opposed to allopoetic systems. Autopoetic systems are those that are self-organized and are self renewed and such systems rely on biodiversity and are self-sustained. If agriculture, human development and economics were to think autopoetically there would be a flourishing of well being and sustainability. On the other hand, allopoetic systems are externally driven. This is what the entire Green Revolution believed in. Therefore, this revolution seized upon external stimuli to develop artificial energy and external resources. However, this is a completely mechanistic model. There is nothing holistic about it. It's totally against what we're talking about and requires increasing energy input like dumping more and more fossil fuels into an industry that would not be required if it was autopoetic.


VN: In my view, ecology is about self organization. It's the ability of an eco system to clean itself up. That's self organization, an autopoetic system. It's about seeds being able to reproduce themselves. That's an autopoetic system. A genetically engineered seed is an allopoetic system. It needs an external control for its reproduction. A genuine seed is a seed that needs only itself, some soil and sunshine to give you a plant. A child growing into an adult in their full humanity is an autopoetic system. Slaves live under allopoetic conditions. Chemical agriculture and industrial agriculture are allopoetic. The free market globalized economy is an allopoetic system. It's externally organized. Sovereign local economies are autopoetic systems. Gandhi called this an economy of place, the ability to be creative and to produce for yourself and to meet your own needs. Self-organization is also the highest form of democracy. Democracy is not just going and voting. Genuine democracy is the ability to self-organize to make real decisions about how we are to live: to be able to shape our food system and our education. That means taking power back. That power will not be handed over to us by those who have taken it away. It will have to be shaped by our everyday actions. We will have to reclaim that deep democracy and that's our autopoetic system.


GN: I want to thank you very, very much for being with us today. You've given us a lot of great insights, and hopefully people will read your new book, "Soil Not Oil: Justice in An Age of Climate Crisis," or go to your website: www.vandanashiva.org and see all of your activities.

Gary Null, Ph.D. is the nation's longest talk show host on alternative health on NPR and Pacifica radio stations, and an award winning director of documentary films. www.progressiveradionetwork.com

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stienster Comment by stienster on January 3, 2009 at 1:06pm
thanks for posting. I also added this to digg.com

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A Devil's Dictionary of Finance







 




Additional Capital: A financial lifesaver for banks and investment houses swamped by losses and the threat of bankruptcy. The additional capital raised to cover the emergency is obtained by printing and selling more stock, thus lessening the value of the stock already in existence.







Raising money under these circumstances is very expensive and sometimes involves a guarantee that the buyers of the new stock will receive some kind of dividend before anybody else gets paid--an additional sock in the nose to the current stockholders. The need to raise additional capital is not always due to the stupidity and incompetence of the people running the company. Sometimes it's for such profitable purposes as buying new machinery or expanding the factory (back in the days when we had factories).







Basil II: Not to be confused with a medieval king of Bulgaria or a Byzantine emperor. The Basil II accords are an international agreement on banking practices designed to prevent--guess what? A worldwide banking crisis. Heavy-money players such as the United States and the EU are signatories to the agreement, whose provisions nobody quite understands and which nobody has been able to put into effect, but which everybody agrees are necessary to maintain the present high level of world prosperity.







Blank Check Company: A company with a pot of money and no business. First, you start a company. Second, you flush a covey of slap-happy investors who have lost the sense they were born with. After you have their money, you go looking for some kind of business for the company to get into. Compare a blank-checker with the men and women who tart up, go to the ATM to withdraw money and then head to a pickup bar. By the end of the evening some of them are in business. Most are not.







Collateralized Debt Obligation (CDO): Take a bunch of commercial loans for which there is collateral of some kind or other, smoosh them together into one big loan or bond and voilà! You have a CDO. Whether you want the CDO depends on how good the underlying loans and collateral are. It appears that many of the investment bankers selling CDOs were too busy buying houses in the Hamptons to find out.

 





Counterparty: The name for the other guy or institution in a deal, otherwise known as he who is left holding the bag. If you lend me $10, we are each counterparties to the loan. A committee has been formed to find out why this word is needed.







Credit Default Swap: Warren Buffett is supposed to have called credit default swaps and their kinky kindred arrangements "financial weapons of mass destruction." (Also see Liquidity Put.)







A credit default swap works this way: Company A gets a loan, usually in the form of a bond, from Company B, but Company B worries that Company A may not pay the loan when it comes due. So Company B makes a deal with Company C. In return for regular payments, Company C will make good any loses suffered by Company B in case Company A welches on the deal.







So a credit default swap is a form of insurance... but if Company B has a mind to, it can buy a dozen or more credit swaps from Company C or some other entity. In the event that Company A fails to pay back the money, Company B stands to make a huge profit. Worse yet, Companies H and M, which had nothing to do with the deal, can nevertheless do a credit default swap based on whether or not Company A lives up to its promise to repay Company B.







Credit default swap mutations, immutations, transmutations, remutations and permutations are endless and perilous. At present an estimated $4.5 trillion in credit default swaps is swirling around in financial outer space. If they land in a black hole, the business world will end with a bang. Then comes the whimper.







Doges of Wall Street and Greenwich, Connecticut: These are the 5,000-6,000 people who sit atop the nation's major financial institutions, banks, hedge funds, etc. Although small in number, the few hundred operations they run garnered more than one-quarter of all the profits made by all other American companies last year. (So lush are the pickings that lesser workers in finance make half as much as people doing the same thing in other industries.)







If the Doges of Wall Street and Greenwich, Connecticut, are not the Masters of the Universe Tom Wolfe dubbed them at about the time they led the United States into the savings and loan debacle, they have at least had the power to free themselves of almost all regulatory restraint. In the process, they have caused two more financial crises, which have brought America to a precarious, trembling balance on the edge of catastrophe.







"The economy is fundamentally sound," or "The worst is behind us," or "We've hit the bottom, and it's uphill from now on": Head for the hills.







Fair Disclosure Rule: A government rule requiring a company to make information about its prospects available to the larger investing public and Wall Street stock analysts at the same time.







The rule is part of the never-ending effort to prevent people from cashing in on exclusive information. Since successful stock-picking is impossible without secret inside information, you may be sure the cheaters are finding new forms of unfair advantage even as you read this.







Form 4506T: The IRS form to be signed by home buyers giving mortgage lenders the authority to look at the buyers' income tax returns to verify their income and make sure they can afford the mortgage. Had form 4506T been used by lenders during the housing boom, there would have been a much smaller housing bubble and therefore a smaller crash. Law enforcement agencies are investigating why lenders did not ascertain the credit-worthiness of borrowers and whether the failure to do so constitutes fraud and/or actionable negligence.







Liquidity Put: This is a promise by a firm selling a CDO (for which see above) or MBO (see below) to repurchase an item in case the buyer cannot sell it to somebody else for the original purchase price.







Originally the idea for securitizing or bundling mortgage or other debt into bonds and then selling the bonds was that if enough were sold to a broad enough spectrum of people, the risk would be spread so far and so thin that a lot of people would get nicked for a little loss, but nobody would get seriously hurt, if home buyers welched on their payments.







With liquidity puts, the risk really is not spread around--it remains with the sellers. And now the investment banks that did the selling are on the hook for billions of bucks.







Why would they do something that looks, in the light of what has happened, so dumb even a Wall Streeter should have known better? The answer probably is that they were so greedy for sales they threw in the repurchase promise confident that they had all the angles figured so perfectly that they could not get burned.







Mortgage-Backed Security (MBO): Akin to CDOs are MBOs, many of which, of late, are emitting a decidedly unpleasant odor.







Ninja Loan: This has nothing to do with black-clad fighters of fourteenth-century Japan. They were sometimes rash but never as idiotically greedy as the modern mortgage brokers who made such loans, meaning mortgages given to people with no income, no job and no assets.







Punch Bowl: A metaphor for easy money and the inflation, speculation, unemployment and hard times easy money brings in its wake.


William McChesney Martin, the Eisenhower- and Kennedy-era chairman of the Federal Reserve Board, is remembered for saying that the Fed must "take away the punch bowl just as the party gets going." He meant sucking money out of the economy when too much of it is starting to blow bubbles, à la Alan Greenspan's technology bubble of 2000 and his real estate bubble of 2003-07, a bubble so large it defied the laws of physics.







During most of Martin's time the dollar was worth 100 cents and a prosperous and growing nation was spared the roller-coaster, boom-and-bust economics that have become the norm since he left office. In the end, Martin gave in to political pressure from the White House to pay for the Vietnam War; he left office in 1970 with inflation at a ruinous 6 percent and rising by the minute.







Recession: The word may have come into use around 1929 as a euphemism for the harsher "panic," the nineteenth-century term for when the arrows on the graphs start moving south. By the 1950s it was preferred to "depression," a word that came to be so terrifying it is now used only in connection with the 1930s. The term "crash" is never, ever used in decent business circles.







Since business depends on optimism and suspension of skepticism, expressions suggesting things may be somewhat sub-hunky-dory are of great concern. Hence such cutesy locutions as "the R word," or namby-pambyisms such as "slowdown," "downturn," "pullback," "slump" and "pause."







Risk Management: The conviction that young men and women with PhDs in mathematics can write formulas for such derivatives as SIVs (see below) so that they are financially fail-safe. It was believed until late 2007 that risk could be so well managed that it would be possible to lend billions of dollars to deadbeats, would-be bankrupts, near paupers, irresponsible speculators, doddering old people, uninformed immigrants, drunks and people seeking funds for a South American vacation and still make a profit.







Structured Investment Vehicle (SIV): SIV drivers have been known to vanish when hit by one of Wall Street's IEDs (improvised explosive devices). The vehicle is inherently risky.







A financial institution buys a bunch of bonds that pay a fixed rate of interest and may take twenty years to mature. ("Mature" is finance lingo for the date when the bonds pay back the principal.) The institution buying the bonds must borrow to pay for them, and if it is to make money on this deal, it must pay less interest than it is receiving from the bonds. It has to borrow short-term loans because they generally carry lower interest rates. Though the difference between what the bonds pay the institution and what the institution must pay on the short-term loans is only .25 percent, if the money involved is in the billions, an SIV can be very profitable.







It can also blow up in your face. If the interest rates on the short-term loans suddenly jump up or there are no short-term loans to be had, the SIV swerves off Prosperity Highway and smashes into a tree, which is what happened beginning in late 2007.







Toxic Waste: A piece of financial crap. This is Wall Street slang for a security so lousy that only an older person suffering from age-related macular degeneration with second-stage Alzheimer's on Social Security could be induced to buy it.







Variable Pricing: The irksome but indispensable practice of charging more when demand is highest and less when it is lowest. Electrical utilities have been using variable pricing in one form or another for 100 years. Airlines do it and operators of toll roads are beginning to do it. Your neighborhood tavern, with its happy-hour special, is practicing an inebriated form of variable pricing.







Variable pricing is a means to achieve what is called "load balancing," by charging more to discourage everybody from using a service at peak demand time. Hence airline tickets cost less for off-hours flights and more for the convenient morning and afternoon departures. If everybody flew at the same time, airports would have to be tripled in size, airlines would have to buy four times as many planes and the cost of tickets would leap commensurately.







People who find variable pricing discriminatory, unfair and/or biased racially, religiously or by social class or sexual orientation are advised to look into the purchase of private jets, a form of transportation the pricing for which is invariable and invariably high. (Also see Zone Pricing.)







VIX: It sounds like Vicks VapoRub, the gooey substance the great grandmothers of America used to rub on the chests of children with flu. Vicks may be more useful than VIX, which is the ticker symbol for Volatility Index, another Wall Street will o' the wisp. Thanks to mathematical abracadabra, VIX is believed to predict how fast and how violently the price of stocks will gyrate up and down in the coming thirty-day period.







The theory is, the greater the ups and downs, the more dangerous the market is for investor sheep. Those are the human ovines who have talked themselves into believing that they know how to buy a share of stock when it's cheap and sell it when it is expensive.



A small class of little-known investors exist who make money regardless of the direction the stock is heading in. You are not one of them.







Zone Pricing: Equality does not exist in business unless thrust on it from the outside. All customers are not equal, so do not appeal to the "rights of man" when you learn that a drug costs more in America than it does in Canada. Zone pricing means that things have different prices in different places. It is a geographical application of charging what the traffic will bear, depending on where the traffic is. (Also see Variable Pricing.)


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