1 00:00:10,550 --> 00:00:14,061 State and banks, hidden aspects of a historical hold up 2 00:00:14,061 --> 00:00:16,844 Conference by Myret Zaki and Etienne Chouard 3 00:00:16,844 --> 00:00:20,666 Moderation: fabio Lo Verso (La cité) 4 00:00:20,666 --> 00:00:22,859 First conference 5 00:00:22,859 --> 00:00:25,858 "The State, Hostage of the financial sector" 6 00:00:25,858 --> 00:00:28,942 By Myret Zaki 7 00:00:28,942 --> 00:00:33,072 I'll stay here taking notes because there will be an article about this topic in the next issue of 8 00:00:33,072 --> 00:00:34,755 newspaper "La Cité" coming out next week 9 00:00:34,755 --> 00:00:40,195 we'll come back on tonight's discussion 10 00:00:40,195 --> 00:00:45,440 Thank you very much Fabio, and good evening to all of you 11 00:00:45,440 --> 00:00:48,293 I am delighted to be here with professor Chouard 12 00:00:48,293 --> 00:00:52,292 and to discover "l'usine Kugler" 13 00:00:52,292 --> 00:00:56,890 and to work in collaboration with "la cité" newspaper 14 00:00:56,890 --> 00:01:00,127 I personally work for an economics magazine called "Bilan" 15 00:01:00,127 --> 00:01:03,291 I've written a few books denouncing the 16 00:01:03,291 --> 00:01:06,019 drift of the financial sector 17 00:01:06,019 --> 00:01:07,436 these last years 18 00:01:07,436 --> 00:01:11,298 I've been following the evolution of finance the last 15 years 19 00:01:11,298 --> 00:01:21,351 and I've seen how they played a central role in what we now call "the crisis" 20 00:01:21,351 --> 00:01:25,968 so we are in the middle of a crisis as you probably noticed 21 00:01:25,968 --> 00:01:28,758 But we don't really know why now 22 00:01:28,758 --> 00:01:31,767 we suddenly said that Greece was in crisis 23 00:01:31,767 --> 00:01:37,240 Can anyone tell me why, according to them, 24 00:01:37,240 --> 00:01:44,633 what triggered the "Greek crisis" 25 00:01:44,633 --> 00:01:47,182 that is a enormous crisis since end of 2009 26 00:01:47,182 --> 00:01:49,472 What started all of that in the first place 27 00:01:49,472 --> 00:01:52,767 if you tell me it is because of its debt 28 00:01:52,767 --> 00:01:55,840 I will tell you that Greece has the same debt level since several years 29 00:01:55,840 --> 00:02:00,702 who decided there is a crisis? does anyone know? 30 00:02:00,702 --> 00:02:03,748 Nicolas Brillet who knows all the answers :-) 31 00:02:03,748 --> 00:02:08,560 The bad advices of Goldman Sachs and the way they've hidden 32 00:02:08,560 --> 00:02:10,461 a part of their debt has contributed greatly 33 00:02:10,461 --> 00:02:15,230 ok good thread. The advices of Goldman sachs 34 00:02:15,230 --> 00:02:17,315 contributed to the crisis. I agree 35 00:02:17,315 --> 00:02:20,776 everything started when at the end of 2009 the notation agencies 36 00:02:20,776 --> 00:02:25,332 have said that Greece was having little financial difficulties 37 00:02:25,332 --> 00:02:27,326 as several countries of western Europe 38 00:02:27,326 --> 00:02:30,395 Their debt rate had slightly declined lately 39 00:02:30,395 --> 00:02:33,177 and that they needed to improve the way they manage their finance 40 00:02:33,177 --> 00:02:34,826 that's all 41 00:02:34,826 --> 00:02:37,836 rating agencies never said that Greece was in bankrupt 42 00:02:37,836 --> 00:02:41,041 All they said ...(sorry I am speaking too loud in this mic) 43 00:02:41,041 --> 00:02:47,533 In the coming years Greece should 44 00:02:47,533 --> 00:02:49,782 try to have a better management of its finances 45 00:02:49,782 --> 00:02:52,096 and that was in 2009 46 00:02:52,096 --> 00:02:54,905 what did really trigger the crisis is that 47 00:02:54,905 --> 00:02:59,239 there was a meeting between 5 hedge funds 48 00:02:59,239 --> 00:03:04,473 american hedge funds in a restaurant in new York 49 00:03:04,473 --> 00:03:08,146 an american newspaper told that story 50 00:03:08,146 --> 00:03:09,730 this is not a fiction 51 00:03:09,730 --> 00:03:14,794 one of the speculator present that day was Georges Soros 52 00:03:14,794 --> 00:03:17,720 the man who hit the bank of england several years ago 53 00:03:17,720 --> 00:03:20,088 and earned 2 billion dollars on an operation to devaluate 54 00:03:20,088 --> 00:03:22,062 the british pound. 55 00:03:22,062 --> 00:03:23,562 in the seventies 56 00:03:23,562 --> 00:03:27,030 So george Soros and a few other american speculators have decided 57 00:03:27,030 --> 00:03:31,655 now the subprime crisis is over 58 00:03:31,655 --> 00:03:36,407 they needed to find a new prey to make a lot of money 59 00:03:36,407 --> 00:03:41,377 It was in february 2010 precisely in a New Yorker restaurant 60 00:03:41,377 --> 00:03:44,422 And those people have decided together 61 00:03:44,422 --> 00:03:52,376 to attack the euro first through 62 00:03:52,376 --> 00:03:56,413 Grece and then through small outlying countries 63 00:03:56,413 --> 00:04:02,044 the idea is that if you sink a small countrie such as Grece, 64 00:04:02,044 --> 00:04:10,652 there will be a phenomen of panic on the markets which will involve that the other neighbours countries will be contaminated too 65 00:04:10,652 --> 00:04:14,965 because the investors will sell their titles too on those countries 66 00:04:14,965 --> 00:04:20,226 and that those speculators we were talking about, will be able to grow rich in the infinity 67 00:04:20,226 --> 00:04:23,311 on, in reality, the bankruptcy of Europe's periphery and even of the whole Europe 68 00:04:23,311 --> 00:04:27,601 somewhere, G.Sorros was trying to creat the same blow 69 00:04:27,601 --> 00:04:31,217 he had done and that made him billionaire in the seventies. 70 00:04:31,217 --> 00:04:36,480 It hasn't been told a lot, it doesn't interest a lot of people 71 00:04:36,480 --> 00:04:40,666 when you speak about it to personns working in the financial and banking sector 72 00:04:40,666 --> 00:04:45,128 they say no, all this is very marginal and isn't for something 73 00:04:45,128 --> 00:04:47,735 But we know very well that 74 00:04:47,735 --> 00:04:51,079 those hedge funds have then massively 75 00:04:51,079 --> 00:04:53,058 selled the debt 76 00:04:53,058 --> 00:04:54,972 speculator earn money on the drop 77 00:04:54,972 --> 00:04:57,558 of the debt or the actions of a country 78 00:04:57,558 --> 00:05:01,246 you can really make money on the drop if 79 00:05:01,246 --> 00:05:05,823 you bet with derivatives on the collapse of 80 00:05:05,823 --> 00:05:09,181 of a market and this is how 81 00:05:09,181 --> 00:05:12,482 loads of millionaires and billionaires have form themselves 82 00:05:12,482 --> 00:05:15,101 during the last years with the european crisis. 83 00:05:15,101 --> 00:05:17,199 It is the facts and the figures 84 00:05:17,199 --> 00:05:20,593 We know which hedge funds are involve, which managers 85 00:05:20,593 --> 00:05:22,847 We know them, there are mostly British and Americans 86 00:05:22,847 --> 00:05:26,701 and they know perfectly the art of spectulation 87 00:05:26,701 --> 00:05:38,225 They have accumulated sell positions, during end 2009 and on the begining 2010 against Grece 88 00:05:38,225 --> 00:05:41,941 The Greek economic minister was touched about it 89 00:05:41,941 --> 00:05:49,572 Indeed Greek gorverment can see the moves made on their debt: they asked themselves what is going on 90 00:05:49,572 --> 00:05:53,449 our debt is suddenly the subject of a fierce downward bet 91 00:05:53,449 --> 00:05:57,667 effectively what are these attacks going to induce 92 00:05:57,667 --> 00:06:02,188 How can these attacks really sink a country 93 00:06:02,188 --> 00:06:05,646 Because when you sell massively the debt of a small country like that 94 00:06:05,646 --> 00:06:10,148 the interest rates that this small country must pay on his debt are explosing 95 00:06:10,148 --> 00:06:18,146 Because if the country's obligations drop dramatically of its value 96 00:06:18,146 --> 00:06:22,313 the interest rate increase itself automatically 97 00:06:22,313 --> 00:06:26,732 this is then how suddenly Grece have to pay 7% and up to 20% recently 98 00:06:26,732 --> 00:06:31,253 This is how Grece have been expulsed of european capital market 99 00:06:31,253 --> 00:06:35,765 She couldn't finance herself anymore on the international debt market 100 00:06:35,765 --> 00:06:41,336 It comes from markets. Grece has been in crisis through 101 00:06:41,336 --> 00:06:45,971 the anglo saxon speculatives attacks. 102 00:06:45,971 --> 00:06:49,563 As have Nicolas, here by present, noticed: 103 00:06:49,564 --> 00:06:55,602 So, Goldman Sachs had advice Grece to adopt very complex financial tools 104 00:06:55,602 --> 00:06:57,938 that Goldman Sachs had set up 105 00:06:57,938 --> 00:07:01,168 to mask their real indebtedeness situation to the rest of the E.U 106 00:07:01,168 --> 00:07:05,490 Goldman Sachs had in a first time from the years 2000 107 00:07:05,490 --> 00:07:10,754 help Grece reduce their real debts only in appearances 108 00:07:10,815 --> 00:07:12,554 What has Goldman Sachs done meanwhile? 109 00:07:12,646 --> 00:07:16,340 Godlman Sachs went to see some hedge funds which were their clients 110 00:07:16,340 --> 00:07:18,642 (these speculatives funds for whom they work) 111 00:07:18,673 --> 00:07:22,980 and said: Hey you know what I have a very good information to share with you 112 00:07:22,980 --> 00:07:27,856 Grece is much more indebt that she is in reality 113 00:07:27,856 --> 00:07:31,613 'Insider trading' this is how it is called 114 00:07:31,613 --> 00:07:35,066 Goldman Sachs has shared this information with her clients 115 00:07:35,097 --> 00:07:38,202 which allowed speculative funds 116 00:07:38,202 --> 00:07:41,151 to attack this debt by advance 117 00:07:41,151 --> 00:07:46,538 knowing that the real balance figures of Grece were going to be revealed beginning 2010 118 00:07:46,538 --> 00:07:51,892 So you motivate Greece to adopte misleading instruments 119 00:07:51,892 --> 00:07:57,615 which will bring her to have more debts than she had 120 00:07:57,615 --> 00:08:01,988 then you benefit of the problems 121 00:08:01,988 --> 00:08:06,424 that are caused and you share the information with other hedge funds 122 00:08:06,470 --> 00:08:11,877 And then took place a kind of butchering of the greek debt 123 00:08:11,877 --> 00:08:15,314 the hedge funds went straight on it 124 00:08:15,314 --> 00:08:19,444 and the other investors, like the sheeps that they are 125 00:08:19,444 --> 00:08:21,712 because finnally the investement world is very herd 126 00:08:21,773 --> 00:08:26,472 when they saw that there was a kind of "alert" on the Greek debt market 127 00:08:26,472 --> 00:08:28,676 they all started to sell. 128 00:08:28,676 --> 00:08:32,897 If you want, speculative funds act like an elite cavalry 129 00:08:32,897 --> 00:08:37,561 which comes first and destabilize a country 130 00:08:37,561 --> 00:08:40,898 Then come pensions funds and investissors from all over the world 131 00:08:40,898 --> 00:08:46,619 who, though they do not understand anything about this story, start selling as well when they saw the risk rising up, 132 00:08:46,619 --> 00:08:47,923 That is how you ruin a country. 133 00:08:47,954 --> 00:08:51,644 Because a country seeing is debt collapsing like that, and which have to pay some 20% interests 134 00:08:51,721 --> 00:08:56,945 can only enter in quasi-default and get out of the capital market 135 00:08:56,961 --> 00:09:03,601 So, seeing that they made a so nice strike, the edge fodns didn't want to stop on a so good way, 136 00:09:03,601 --> 00:09:13,158 they carried on. Then, the same happened to Portugal, then Irland, then Spain. Then it came to Belgium, then Italy. 137 00:09:13,158 --> 00:09:21,894 And the last new ones have been: France, and even GERMANY. Germany which is the more solvent country in the world, the stronger country in the word 138 00:09:21,894 --> 00:09:26,227 has been more or less attacked on the international debt market. 139 00:09:26,227 --> 00:09:36,447 What are we talking about now? We are talking about a phenomenon which is: If you are a country which have his debt quoted on a market, 140 00:09:36,447 --> 00:09:41,514 you are completely vulnarable to some attaks, some RAIDS I would even say 141 00:09:41,514 --> 00:09:45,453 some real raids from some scrupleness financiers, 142 00:09:45,499 --> 00:09:49,711 and, especially the most important is that these people are not regulated at all.