Stocks in Crisis as Housing and Financial Sectors Collapse

On Wall Street, stocks fell sharply for three straight months. In first week of March, the Dow Jones lost 146.70 points, a little more than 1 percent to close at 11,893.69. The Dow was down 370 for the last two days of the week.  Major U.S. equity indexes have lost more than 16% of their value since their peaks in mid-October 2007. New record high oil prices suggest growing inflation.  The broader S&P 500 index fell 10.97 points, or 0.84%, to 1,293.37. The tech-heavy Nasdaq composite index shed 8.01 points, or 0.36%, to finish at 2,212.49.

The Fed, which has been reducing the interest rate since September 2007, recently became more desperate. It cut the rate by 1.25 percentage points during just eight days in January - the largest one-month reduction in a quarter-century.  Seeing the scope of the crisis, the Federal Reserve will increase the amount of loans it plans to make available to banks in March 2008 to $100 billion. It has already provided a total of $160 billion in short-term loans to cash-strapped banks since December 2007. This will-not be enough.   The core of this problem is with the consumer who now does not have a steady job, income or means of purchasing anything.  With 67% of the USA economy being driven by the consumer's purchases, there is no chance to reestablish profitability by putting the American work force back to work.  Robots and international cheap labor is more profitable.  Either you end profits as the heart of the economy and employ robots to serve human need or you have 10's of millions forced into the streets.  Capitalism equals profit made with labor and industrial technology, without it you would have to have a higher form of society.  The technology is now computer automated, it does not need human labor to produce most manufactured commodities. 

February nonfarm payrolls fell 63,000, more than double the 30,000 decline that economists had expected on average and the largest decline in five years. January's drop was revised lower to 22,000 from 17,000, while December's growth in payrolls was halved to 41,000 from 82,000.

Employment measure fell 255,000, and was overwhelmed by a hefty 450,000 drop in the workforce.  The jobs picture dimming will force homeowners to sell their homes.  This is a liquidity situation. The well-being of the consumer, whose spending accounts for more than two-thirds of economic activity, is key to investors' hopes of avoiding more economic pain amid the ongoing pullback in home values and credit troubles.  The week also saw the dollar continue to drop, helping push several commodities to record highs. Many commodities are traded in dollars and so a weak greenback can make their prices rise. Gold, often regarded as a defensive investment, surged to near the psychological benchmark of $1,000 an ounce.

Despite the injection of hundreds of billions of dollars and euros, interest rates on inter-bank lending are still unusually high. And banks are tightening up on their lending to individuals and companies, restricting the amount of lending as well as making loans more expensive.

There are also hundreds of billions of dollars worth of short-term debt obligations that will fall due in the next six months, which could further depress the market if no buyers can be found for them.

Thousands of people are having their homes repossessed, and with a glut of homes on the market prices are dropping. The crisis began when US mortgage companies made hundreds of billions of dollars of sub prime loans. These debts were then packaged up and sold to financial institutions around the world, who then sold it on to pension funds and hedge funds. They were adjustable rate mortgages (ARMs). Foreclosures and late payments on home mortgages are will continue to rise.  With low or negative equity in their home, a stressed borrower has less ability - because there is no home equity to tap - and less financial incentive to try to remain in the home.  Why pay for a home that is worth much less than you paid for it? The housing collapse dragged down home values. Many are therefore left with mortgages that exceed the value of their homes. In addition low introductory rates on their adjustable mortgages reset to higher rates, are making monthly payments difficult or impossible, to afford. Add to this the fundamental problems in the credit markets have made refinancing a mortgage harder.

The payments were fixed for two years, and then became both higher and dependent on the level of Fed intereset rates, which also rose substantially. A wave of repossessions is sweeping America as many of these mortgages reset to higher rates in the next two years. And it is likely that as many as three million families will be evicted from their homes as their cases make their way through the courts.

Mortgage companies will begin to find it harder and harder to raise money even to lend to rich/wealthy borrowers. Therefore, even with the US government/Feds help, house building is at a record low. It will become harder to get a mortgage, and it could cost more - and both these expectations are lowering house price inflation.

Construction is at the core of the economy, along with manufacturing, mining, and agriculture.  Service industries merely distribute what has been produced.  People who move from house to house after a purchase are also more likely to buy consumer goods like washing machines, tvs, stoves, refrig, furniture, paint, nails, computers, tables, chairs, beds, sheets, etc. The tightening up of credit and worries about mortgage repayments slows borrowing money to buy big-ticket items like cars. The Commerce Department said that construction spending fell 1.7% in January, the biggest fall in 14 years. Spending on homebuilding has been cut greatly.  In addition, the report also showed major cutbacks on commercial projects such as apartments, stores, malls, hotels and highways.

Separately a report from the Institute for Supply Management (ISM) showed that factory activity shrank in February. The index for national factory activity fell to 48.3 in February from 50.7 in January. A reading below 50 indicates that the manufacturing sector is contracting quickly.

The dollar is already weak because of the huge trade deficit the US runs with the rest of the world - nearly $1 trillion - which has been a big boost to the world economy. But if the US economy slows, and interest rates are cut sharply, the dollar will become a less attractive currency and could fall further.

This in turn would make imports into the US more expensive, and make it harder for exporters like Britain to win orders. A big decline could also force countries like China, which hold $1.3 trillion in currency reserves, mainly in dollars, to diversify their holdings, further depressing the greenback. 

 

Ramifications

Above we have listed features of and economic system in crisis.  That economic crisis will become a social crisis around the necessaries of life---food, clothing, housing, transportation, health care, education, medicine, security and the essencials necessary for health societial growth and development.  Societal movements will take to the streets and in time become political movements.  Then the racial polarization.  The class struggle will only materialize when the white dispossessed workers are facing their own white ruling class.  Otherwise they will side with ttheir ultra rightwing white nazi movements first and foremost.  Study their histories.  Study the Reconstruction period carefully (1865-1877). 

The heart of it all is a fundamental issue: labor replacing technology and the profit motive while millions of workers are left without job, income or means to pay for the necessities of life and living.  The wage-labor system is becoming obsolete.  Today, American workers are being relegated from (1) producing consumers to (2) producing nonconsumers to (3) nonproducing consumers and finally to (4) nonconsuming nonproducers.  The last category makes human labor useless, thus the human being's life becomes worthless.  The forcing of permanently unemployable workers to the street is a gradual process for most.  It may include: part-time labor, low paying service jobs, temporary jobs, layoffs, concessions, overtime of the remaining workforce, freezing of wages and salaries, intensification of labor, breaking of unions, cut health care benefits, cut AFDC, cut education, cut entitlements, cut set asides, and cut housing subsidies.  People end up destitute in the streets with no future legal means of putting shoes on their feet, clothes on their backs, food in their mouths, and a roof over their heads.

This modern crisis could be genocidal for unprepared African Americans who are historically the last hired the first fired, and the first to be imprisoned.  Without a job----no food, clothing, housing, health care, fuel for heat, medicine, education, training.  No chance.  Crimes of want are first, property crimes; then emotional racial/political polarization.  Already, the African race has logically been made into the scapegoat for all of White America's problems.  And yet, this period of extreme economic hardship can be used positively by the African race within the United States because it is a natural point of no return, a complete break with a dependent past, a severing of all race relation, a period of mass racial disintegration, mass separation, and mass breaking away from White institutions.  As this process unfolds, in fact, all African Americans (by degrees, and class strata) will become expendable and therefore be expelled, expropriated, or thrown out of all White institutions except prisons where the 13th Amendment of the Constitution allows for Whites to work African Americans to death in prisons as slaves.  Step by step, scapegoated as "reverse-discriminators" against White men, Africans in America are being driven out of jobs, evicted from factories, farms, plants, mass media, elected political offices, military service, schools, universities, science foundations, churches, clubs, government agencies, and stores

The social system is under attack as the Scientific and Technological Revolution (robotics/computer automation) destroys: its economic underpinning. This underpinning is value created by the expenditure of human labor which is paid a wage or salary then allowed to freely purchase back the commodities they helped to produce.  In proportion to the use of robotics, the new system becomes more productive and more unable to distribute that production. Capitalism based on wage labor with industrial machines that produced profits primarily for ruling class Whites is slowly ending. It will decay.  Martial law will be organized.  The economic social and political systems will be called into question with mass movements being organized around food, clothing, shelter, education, health care, housing, heating and police brutality.  The society will go into crisis.  It will regress back into some type of Nazi dictatorship, after the White supremacist militia wins.  Next, the nazis will then seek, as they have in the past, to eliminate (in waves of genocidal sieges), all expendable nonwhites who threaten capitalism's continued existence.  

Africans, the last hired and the first to be fired are first to become destitute---homeless, hungry, ghetto-stricken---dregs on society.  Jobless people cannot buy food clothing, shelters, transportation, health care, education---commodities. Unsold commodities are unprofitable. No profit equals no industry. No industry equals no economy.  No economy equals no circulation of money.  Production cannot be distributed without money or credit which, is itself extended money. The contradiction between the way commodities---the necessities of life and luxuries---are produced and exchange is fast reaching a boiling point. People wasting time with Clinton, Obama, Bush, McCain will be forced to take to the streets.  If disorganized they will lose initially.  The Capitalist military, paramilitary, and Nazis have centuries of practice.  In time, the clarity necessary to face the present crisis for what it is will be made available to the masses and decisions will be made. 

Production without wages inevitably results in distribution without money.  The type of society built on these new circumstances will solve this problem for the entire world.  Nevertheless, before this problem is solved there will be an extended period of decay and regression on a global scale.  To the extent that human beings are prepared, this period of capitalism's' and socialism death pangs can be shorten in preparation for the new society for which 21 million years of matter in motion have been methodically moving toward.

Scientists unlike dreamers, proceed from the real world. The real world does not have preachers, imams, priests, soothsayers, rabbis,  comics, clowns, journalists, or other scientifically ill-prepared guess-work artists leading anything.  Their answers are useless to building a new future---most are trapped in a fraudulent past.  Independent African researchers must proceed from the real world. If they are to help the mass of oppressed to seize this moment, a firm understanding of human social, economic, political, and technological history is necessary.  It is important, absolutely crucial, to know the time we live in and what must be done.   

The person on the street is not in a position to theoretically sum up this epoch.  They are trying to eat, shelter themselves, and get what will allow them to get more the next day.  They must free themselves to think clearly and without fear.  Only the most advanced and independent scientist/theoristscan make ends of this evolving epochal transformation.  Any person who has been forced onto the streets by CAMP cannot help but dream of the possible world wherein computers, automation, robotic machines and the Internet are used for the benefit of society rather than by individuals whose only interest is profit. Last years dreamers will be next years imprisoned or exterminated if the massive White Nazi movement has its way.  Folk caught wasting time today will be run over.  There is no middle ground.  Two social systems are on their death beds (capitalism and socialism).  They will regress, rot, decay, decompose---die.  If a new higher form of society has not been gleaned from the old, this period will be unnecessarily murderous given the level of destructive technologies in use in the world today. 

Essentially, every technological revolution in world history has compelled and economic revolution---after an intense period of social decay, degeneration, and decadence. Every economic revolution has compelled a social revolution. Every social revolution has compelled a political revolution---led by a certain class, race, gender, and culture.   The fundamental ills of American society are the results of the economic, political, social, and cultural systems organized by the ruling, class, gender, and culture. Today these systems are nearing their epochal ends, resulting in massive social decomposition, decay, regression, destruction.

No social epochal change will happen over night. New societies are going to have to be built around the Scientific and Technological Revolution (STR) and Computer Automated Machine Production (CAMP) that conforms to the new economic realities. There will be a period of extreme social degeneracy first, however. Review the transitions in history from communalism to slavery to feudalism to capitalism and to socialism. There are inherent opportunities for oppressed peoples to start out anew, but their are also inherent probabilities that many or most will be exterminated in the genocidal death-throes.

Increasingly the only job for an African in America is helping the criminal system incarcerate African American men, intoxicate African American children, and prostitute African American women.  From filthy ghettos where hustling, pimping, prostitution, drug selling and other immoral acts of surviving have been made acceptable to the street---the African race is being mass prepared for slaughter.  The next stop: the homeless shelter, soup line, drug house, and court system, prison.  Prisons for profit, built by corporations such as GM, GE, Ford, and Chrysler, are to be the modern death camps; the dungeons of enslavement built in strict adherence to the 13th Amendment to Constitution.

Since the late 1980's, the economic crisis in the United States has ripened, and has devastated African American communities around the country first, as opposed to devastating the White population.  Conditions continue to worsen for Blacks, especially Black men.  African American workers have lost their jobs, and therefore have lost their means of paying for food, clothing, housing, education, health care, recreation, and training.  Millions have become permanently unemployed and therefore obsolete to an economy which demands money earned from a wage during employment.  In the process, millions of immoral, cowardly, confused African American men, feeling worthless, have run off and abandoned their Black spouses and children.  The entire race's family structure now rests firmly on the backs of African American women.  Entire blocks are housing only the African American mother and the African American child.  One does not have to be immoral and cowardly just because one is unemployed.  But, because millions of African American men and women have not organized themselves to fight their enemies and their oppression, they have immorally, and cowardly chose to be used by White drug and pornography producers for the purpose of poisoning the African American community with crack and AIDS-infested, family-destroying perverted sex.

Instead of organizing to do justice in the midst of this filth, most fall into the stench of filthy low life living.  Because some African Americans do not have a legal job from White men, they now take an illegal and immoral job from White men who brings all of the drugs into the African American community in the first place, and sell these drugs, poisoning, and killing whole generations of African American children.  Systematically, Whites flood Black communities via CIA and DEA drug swindles, along with destructive alcohol, pornography, and bad meat.  Liquor stores, and liquor shops are on every corner.  However, none of this could happen if the Black race did not participate in it---did not help in the nefarious process as a whole.  

With Black men cannibalizing and abandoning their families, children will not respect fathers that abandon them.  African American women will not respect African American men.  Relationships, not founded on love, marriage, and mutual respect continue to break up.  Homelessness increases; hunger increases; children drop out of school.  With adultery, fornication, and perverted bisexual and homosexual behavior increasing tin the African American community, AIDS is on the increase and has become the number one killer of African American women.  Prostitution, drug abuse, child abuse, rape, theft, female abuse drug selling all are on the increase in African American communities because Blacks have not taken responsibility for their part in promoting the vices created by the White race. 

Government welfare checks are now being cut out.  Since the White ruling class does not need African American labor, except in the form of prison slavery, they are unwilling to pay any taxes to support them---hence the cuts in health care, education, social security, child care, free lunch, and welfare programs such as General Assistance, Supplementary Security Income, Aid for Families with Dependent Children while the White government rapidly builds prisons to warehouse the nonwhite race.  The political reflection of this impending degeneration is conservatism, anti-Black, anti-affirmative action, anti-food stamps, anti-welfare, anti-child care, anti-child free-lunch program, anti-housing subsidies, anti-Black colleges, anti-African culture, etc. 
 

It was difficult to see the effects of robotics on-the White unskilled and semi-skilled workers.  They were scattered throughout the general White population and especially in the suburbs.  The African Americans were concentrated in a relatively small urban area were the percentage Black industrial laborers to the total African-American population was higher than that of White industrial laborers to the White population.  Ghettos are the product of years of social deprivation and destitution.   The consequent creation of the ghetto, (that human dumping ground for the impoverished Black, the permanently destitute, the economically trapped downtrodden, rotting-inner-core of the formally central working class area of the city), was as inevitable as the move to criminalized Black men and to warehouse them in prisons.   Mass prison building, privatization of prisons, armed Nazi movements, conservative politicians being voted into office by the mass White population, and emerging mass White militia movements in the United States at a time when education and job opportunities are being cut out of existence are no accident.  These are degenerating series of conditions which pave the way for even more difficult conditions. The logic of every move is obvious to any holocaust survivor.

What must Be Done

Almost all of African American's social movements within the United States have been to enter the White capitalist society, to get in, to integrate, to get their fair share, to get respect, to get equal access to the capitalist profit.  Only a few liberation struggles of Africans in America have been aimed at ending the oppressive kidnapping, the enslavement---entombment being worked to death on stolen land building White Civilization at the expense of tearing apart African Civilization. Only a qualitative break away from Whites using the most advanced technology, know-how, courage, clarity, precision, martial preparation and morality bequeathed to the African race to resurrect African Civilization and the African race would solve the African problem today.

Today, the eggs of Africa Civilization's resurrection are being fertilized with science, technology, organizational-know-how, and resilience in the Diaspora.  The task of the epoch is to organize the social, cultural, political, and economic instrument in order to mobilize, purge of filth, Africanize, retransplant, nurture, grow, develop, and harvest these diasporal eggs within the womb of mother Africa.  Epochal preparation is the key.