• Global synthesis of the crisis
• The sub-primes crisis and the mechanisms of the crisis
• Transmission of the crisis through securitization

Global synthesis of the crisis

Capitalism feeds on the crises it provokes and even its « faculty of adaptation » is without limit, thus suggesting that it is indestructible. It is necessary to differentiate cyclic and economic crises to systemic and structural crises (like the ones of 1870 – 1893, during the Great Depression of 1929, or between 1973 and 1982, when a structural unemployment started to appear in western countries).

We are probably, with the current financial crisis, facing an economic crisis, corresponding to a breaking of the logical relevance and the dynamic coherence of the whole system. Coning after the shares market crisis in 1987, the American recession in 1991, the Asian crisis in 1997, the explosion of the bubble of Internet values in 2001, this crisis, more intense than the previous ones, is obvious the most serious that we have ever known since the 1930s.

Most of people do not understand what is going on. For years, they have been sung the praises of the « American model » and assured the beneficial effect of « globalization ». We know witness the falling of the American model and the globalization increasing the social difficulty. The show of central banks, in the United States as well as in Europe, that have injected, since September 15th, 2008, hundreds of billion dollar and euro on financial markets, leave them abstract: where does all this money come from? Those questions still bear the feeling that no one really seems to know what can be done. The relative silence of politicians is significant. And, people wonder if this crisis was predictable or not.

We are in fact confronted to a triple crisis: crisis of the capitalist system, crisis of the liberal globalisation, crisis of the American hegemony.

One of the most important marks of « turbo-capitalism », corresponding to the history of capitalism, is the complete domination of globalized financial markets. This domination creates an increased power to the holders of the capital, and particularly to shareholders, who are the real owners of the societies listed on the stock exchange. In order to get a maximal and fast yield of their investments, shareholders encourage salaries cut and the opportunist outsourcing of the production to emergent countries where the increase of productivity goes had in hand with very low salaries. Thus, everywhere, the increase of the value added benefits the incomes of the capital rather than the work incomes, the wage deflation resulting in the stagnation or the decline of people’s purchasing power, and the decline of the global solvent demand.

Today, the strategy of Forme-Capital is to cut down more salaries, to aggravate more the precariousness of the labour market, by producing a relative pauperization of the working classes and middle classes that, in the hope to keep their standard of living, by indebtedness as main resource, while their solvency declines.

The possibilities offered to households to borrow to cover their common expenses or to get housing have been the main financial innovation of the capitalism of the post-war years. Savings were stimulated by an artificial request founded on credit facilities.

Across the Atlantic, this trend has been encouraged since the 1990s by the granting of more and more favourable credit conditions (personal contribution near to zero percent), without any consideration of the solvency. We then tried to compensate the decline of the solvent demand resulting from the compression of the salaries by the boom of the credit machine. In other words, we stimulated consumption through credits, in want of being able to stimulate it by the increase of the purchase power. It was the only way, for the holders of financial portfolios, to find new pool of profitability, even if it is at the cost of inconsiderate risks.

So, we have known a colossal excessive debt of American households which have chosen, for a long time, to consume instead of saving (while 17 % of the people are already deprived of any health coverage). Households in the United States have twice more debts than the French households, three times more than Italian households. Their excessive debt is even almost equal to the American gross domestic product (GDP).

The progressive exposure to explain the current crisis is the indebtedness of American households by means of mortgages (the famous « sub-primes »).

Apart from the set of direct effects (insolvency of sub-prime borrowers, bankruptcy of specialized credit societies, losses from the major banks which had them or worked with them), the essential of the effects of the sub-prime crisis is indirect.