Poland Goes Nuclear

Linda Pentz Gunter

Polish president, Andrzej Duda, aspires to (3) nuclear power plants from Westinghouse and US nuclear weapons stationed on Polish soil. (Photo: Grzegorz Jakubowski/Wikimedia Commons)

Congratulations must go to Poland — and to US vice president, Kamala Harris, and US energy secretary, Jennifer Granholm for brokering the deal — for its commitment to purchase a triad of American nuclear lemons.

With breathtaking myopia, the Polish government has signed a deal to partner with the US company, Westinghouse, in the construction of three nuclear reactors in Poland.

Apparently, everyone concerned is happy to ignore the fact that Westinghouse was bankrupted by its disastrous nuclear projects in South Carolina and Georgia. The former was canceled mid-construction and the latter, at Plant Vogtle, is now years behind schedule and well beyond its originally predicted 2016 start-up date, with ever-ballooning cost over-runs that have now topped $30 billion.

Also overlooked was that former Westinghouse Electric Company Senior Vice President, Jeffrey A. Benjamin, was charged with 16 felony counts including conspiracy, wire fraud, securities fraud, and causing a publicly-traded company to keep a false record, over the company’s handling of its now canceled V.C. Summer 2-reactor project in South Carolina.

The official reason that long-shelved plans to build nuclear reactors were suddenly revived is that the war in Ukraine has caused energy shortages in heavily fossil fuel-dependent Poland. But, tellingly, another reason given was Poland’s “lack of immediate renewable substitutes”.

Like France with its nuclear power monopoly, Poland’s reliance on coal and gas stifled renewable energy development. Now there is nowhere else to turn. France is similarly stranded and is importing fossil fuel energy and even reopening closed coal plants.

The backward turn by France in climate mitigation was effectively caused by prioritizing nuclear power for so many decades. Added to that, its aging nuclear reactor fleet is now breaking down with remarkable alacrity — at various times recently more than half of all French reactors have been out of operation. It’s a perfect demonstration of why the nuclear choice is a rash and unreliable one, even without addressing all the inherent dangers and waste issues.

The Polish decision to partner with a bankrupt company that has a track record of failure to deliver on time or on budget, as well as criminal activity, certainly seems like a bizarre choice. So perhaps there is another agenda afoot here?

Poland’s unhappy history of invasion, occupation and shifting boundaries puts the country in a uniquely vulnerable position. Once behind the Iron Curtain and a member of the Warsaw Pact, Poland is now an enthusiastic member of NATO and outspokenly critical of Russia’s invasion of Ukraine. Its multiple shared borders include Ukraine as well as Russian ally, Belarus.

In announcing the Westinghouse contract with Poland, the U.S. State Department called it “a watershed moment in advancing European energy security”.

Polish government spokesman, Piotr Müller, echoed this when he said:  “Nuclear energy will be an important element of Poland’s energy security”.

The International Energy Agency defines energy security as “the uninterrupted availability of energy sources at an affordable price”. But, more revealingly, it describes electricity security thus:

“Variable renewable generation has already surged over the past decade, driven by cost reductions and favorable policy environments, a trend that is set to continue and even accelerate in line with climate change objectives. Meanwhile, conventional power plants, notably those using coal, nuclear and hydro, are stagnating or in decline.” [emphasis added]

The Westinghouse Plant Vogtle reactors are the nuclear power poster child for massive delays and obscene cost overruns. (Photo: NRC)

Poland won’t get energy security from three Westinghouse reactors. It probably won’t even get the reactors. What it will get, however, is junior membership in the Nuclear Club. In possession of nuclear materials, technology, personnel and know-how, it will join other aspirational nations developing nuclear power, not because they need it or can even afford it, but because it delivers some sort of absurd prestige. Not quite a member of the Big Nine — the actual nuclear weapon states — Poland will at least arrive on the doorstep.

In early October, President Andrzej Duda, even said that he had asked to have US nuclear weapons stationed on Polish territory, although the US government denied receiving any such request. None of this is coincidence or unconnected.

The UN Treaty on the Prohibition of Nuclear Weapons, now supported by a majority of the world’s countries, works hard to stigmatize nuclear weapons. We need to do the same for nuclear power. Otherwise it serves as the nuclear drawbridge that is never raised.

UK: Royal College of Nursing votes to strike

Robert Stevens

The vote to strike by 300,000 UK nurses is a powerful show of opposition to entrenched low pay and appalling working conditions. It gives expression to a broader determination of workers throughout the National Health Service (NHS) to fight.

Nurses delivered the largest ballot by the Royal College of Nursing (RCN) in the union’s 106-year history.

Despite anti-strike laws requiring a 50 percent turnout to allow strikes to proceed, nursing staff at 176 out of 311 NHS organisations voted for industrial action. Nearly half the trusts in England reached the threshold. All NHS employees in Northern Ireland and Scotland met the threshold and all except one trust in Wales.

A National Health Service worker protests over pay in Bournemouth as part of demonstrations around the UK in August 2020. The placard reads "We are not angels or heroes: We are professionals that deserve a professional pay". [Photo: WSWS]

The RCN ballot paper called for a pay deal of inflation plus five percent, against the Conservative government’s fixed sum of just £1,400. For newly qualified nurses, this is approximately 5.5 percent, and for most other around 4 percent. Inflation is over 12 percent and rising.

Nurses are already £6,000 worse off on average, in real terms pay, than in 2010. An experienced nurse’s salary has fallen by at least 20 percent in real terms since 2010.

According to analysis published this month by the London Economics consultancy an experienced nurse in 2022-23 is being paid the same amount for 5 days’ work as for 4 days’ work in 2010-11.

The nurses’ fight involves the very future of public health care. Years of budget cuts and privatisation have collapsed the NHS, leaving it unable to provide proper care. In August, for the first time ever in England, the NHS waiting list for routine operations breached 7 million. Almost 390,000 patients have been forced to wait over a year for treatment.

Staff numbers have collapsed, meaning nurses bear an intolerable workload, threatening patient safety. In 2021, 25,000 nursing staff left the Nursing and Midwifery Council register.

The number of vacant positions for registered nurses in England increased to 46,828 between April and June of 2022—up from 38,814 in the same period in 2021. In London, with a population of over 9 million, a staggering 15 percent of nursing posts are unfilled.

Bed capacity has been severely eroded, with 40,000 fewer beds available in England than in 2009.

The onslaught against NHS workers is summed up by the fact that hundreds perished from COVID during the pandemic, as they worked on the front line while the government allowed the virus to let rip. By May 2021, over 1,500 health and social care workers had died of COVID , including 639 working-age healthcare employees.

The fact that so many workers in England did not vote is an indictment of the role of the RCN and other health unions over years in sabotaging a fight against terrible pay and conditions in the NHS.

If the strike is to be won, or even to go ahead at all, independent rank-and-file committees must be built to lead the struggle. Left in the hands of the RCN apparatus, it will be defeated.

For the vast majority of its history, until 1995, the RCN did not even allow its members to strike. But ever since, the experience of hundreds of thousands of workers with this union is that it will not wage a fight. The strike ballot in the current dispute—due to open on September 15—was delayed for weeks immediately following the death of the queen that month “out of respect” for the monarch.

In 2018, the RCN and 13 other health unions, including the largest public sector union, Unison, reached a pay deal with the Tory government, selling a miserly 6.5 percent pay “increase” as “the best deal in eight years” and bombarding members with misleading information to secure acceptance.

As soon as the real impact of the deal was expressed in their pay packets, health workers rebelled. RCN members called for an Extraordinary General Meeting and overwhelmingly passed a motion of no confidence “in the current leadership of the Royal College of Nursing”, calling for them to “stand down”.

The leadership Council was forced to step down in September that year, but with no alternative leadership the despised union functionaries were able to exploit the widespread disengagement of members and secure re-election. These bureaucrats are responsible for the disaster now facing RCN members.

Last year the health sector unions organised nothing after workers in the GMB, Unite and Unison voted by huge majorities to reject the government’s insulting 3 percent pay offer. RCN members voted by 91.7 percent in England to reject, and by 93.9 percent in Wales.

Every union bureaucrat, whether nominally “left” or “right”, plays the same role in suppressing the class struggle. They feel the same dread as the employers when presented with a mandate to strike, as a movement of the working class threatens their cozy relationship with the bosses and their comfortable lifestyles.

National Health Service workers and their supporters among 250,000 people protesting in defence of the NHS in London in 2017. [Photo: WSWS]

The NHS workforce of over 1 million is a powerful battalion of the working class, which enjoys widespread support for their struggle. Over 400,000 NHS staff in Unison—the largest NHS union—and others in different health unions are also balloting for action. Were they to be mobilised in a joint offensive, in alliance with hundreds of thousands of other workers in the rail, postal and other sectors, they would be able to defeat not only to attempts to hold down their pay and worsen conditions, but a government agenda intent on privatising the NHS, and transferring over £150 billion in welfare state spending to the military budget.

But at the first opportunity the RCN will move to sell out the nurses and negotiate a rotten deal with the government.

This has already taken place in Scotland where Unison negotiated a below inflation deal that the health unions nationally want to emulate. Last month the union suspended its strike ballot of 50,000 NHS members to recommend a Scottish National Party government offer of just £2,200 a year. Following that deal, Unison general secretary Christine McAnea declared, “Strikes across the NHS this winter are not inevitable.”

Following Wednesday’s RCN strike vote announcement, the union’s General Secretary Pat Cullen declared, “While we plan our strike action, next week’s budget is the UK government's opportunity to signal a new direction with serious investment. Across the country, politicians have the power to stop this now and at any point.”

This is not what the Tories are about. Chancellor Jeremy Hunt, who is tasked by the financial markets to carry out tens of billions in spending cuts in what will be a scorched earth budget this month, was the health secretary in 2016 when, in collaboration with the British Medical Association, the Tories defeated a national strike of 50,000 junior doctors and imposed an inferior contract.

Nurses and workers throughout the NHS must not be led to another hideous defeat.

Two weeks of Italy’s Meloni government: Social cuts, refugee baiting and preparations for dictatorship

Peter Schwarz

Two and a half weeks after Giorgia Meloni came to power in Italy, the basic lines of her ultra-right government’s policies are becoming apparent. The new Italian government is continuing NATO’s war policy and the pro-business policies of her predecessor Mario Draghi. This is combined with unrestrained refugee-baiting and draconian attacks on democratic rights.

Giorgia Meloni and British Prime Minister Rishi Sunak meet in Sharm el-Sheikh [Photo by governo.it / CC BY-NC-SA 3.0]

In her first government statement, the leader of the fascist Fratelli d’Italia (Brothers of Italy) made an unqualified commitment to the European Union and NATO. “Italy is fully part of Europe and the Western world” and would “not slow down or sabotage” European integration, Meloni assured. Italy would “continue to be a reliable partner of NATO” in the Ukraine war and would stand firmly “by the side of the Ukrainian people who were attacked by the Russian Federation.”

Meloni’s first trip abroad was to Brussels, where she was warmly received by the President of the EU Commission, Ursula von der Leyen. She is currently at the World Climate Change Conference in Sharm el-Sheikh, Egypt, where she is meeting with old and new political friends who are predominantly on the right.

Full of pride, she posted a picture on her Twitter account showing her with the Butcher of Cairo, Egyptian president Abdel Fattah El-Sisi. “Wonderful to meet @RishiSunak,” she wrote after meeting the new British prime minister. “A great opportunity to renew our friendship, strengthen the transatlantic bond and reaffirm our willingness to tackle together the important challenges ahead.”

“I am delighted to see my friend @P_Fiala again,” she reported an hour later. “Our cooperation is key to meeting the difficult challenges of our time and standing up for our shared values.” Czech Prime Minister Petr Fiala is a member of the right-wing conservative ODS. In between, Meloni had met “His Majesty King Abdullah II and His Royal Highness the Crown Prince Al Hussein” and praised the “longstanding roots” of the “friendship between Italy and Jordan.” She also had a friendly conversation with the German Chancellor Olaf Scholz.

At the end of last week, the new government presented its first budget. “Meloni continues the Draghi course,” cheered the Frankfurter Allgemeine Zeitung (FAZ), which otherwise never tires of criticising Italian fiscal policy. Despite the economic crisis and record inflation, new government debt is to fall from 5.6 percent of gross domestic product this year to 4.5 percent in 2023 and 3.7 percent in 2024. In 2021, it was still 7.2 percent. This requires massive cuts in social, health and education spending.

Her government only wants to spend an additional 30 billion euros by the end of next year to provide relief to companies and households from rising energy costs. All other additional expenditure must be financed by savings in the same department, as Finance Minister Giancarlo Giorgetti (Lega) stressed.

To suppress working class and youth resistance to these attacks, the Meloni government is establishing a police state and mobilising the right-wing dregs of society through ruthless attacks on refugees.

Barely in power, it closed Italian ports to rescue ships from aid organisations. At the end of last week, hundreds of refugees were held up in catastrophic conditions on overcrowded ships off the Italian coast.

At the end of the week, the government allowed two ships to enter Italian ports. But only sick people and minors were allowed to disembark, healthy adults had to stay on board. The Meloni government takes the view that countries like Germany, under whose flag the ships sail, must take in the refugees.

With these illegal methods, the Meloni government is trying to completely prevent maritime rescues and criminalise the aid organisations involved.

Interior Minister Matteo Piantedosi, who is close to the far-right Lega, has convened a “National Committee for Public Order and Security” consisting of top officials from the Interior Ministry, the Coast Guard, the Defence Staff, and the intelligence services. Its task is to keep refugees from Italy’s coasts. Piantedosi wants to set up reception camps on the other side of the Mediterranean, where refugees will be detained, and their personal data recorded. Only a fixed and controlled quota would then be allowed to come to Europe.

Here, too, Meloni and her interior minister are following the policy of previous governments and the European Union. The European border protection agency Frontex stopped rescuing people at sea years ago, illegally pushes migrants back and locks them up in inhumane camps on both sides of the European border. Since 2014, over 25,000 refugees have drowned in the Mediterranean because of this policy, about four times the number of civilians the UN estimates have died so far in the Ukraine war.

But while the EU and Frontex try to hide their murderous actions, the Meloni government is trying to get as much publicity as possible. Like all right-wing and fascist movements, it uses terror against refugees to incite a right-wing mob atmosphere.

Although it tries to play this down, the government itself is teeming with open fascists. New cases are coming to light all the time.

For example, pictures from 17 years ago of the new Secretary of State in the Ministry of Transport, Galeazzo Bignami, have surfaced showing the Fratelli d’Italia member wearing a swastika armband at a bachelor party. A photo has circulated of the Secretary of State at the Ministry of Research, Augusta Montaruli, showing her giving the “Roman salute” (like the Nazi “Sieg Heil”) during a pilgrimage to Mussolini’s birthplace, Predappio. The Secretary of State at the Ministry of Justice, Andrea Delmastro Delle Vedove, has quoted Belgian Nazi collaborator and SS officer Léon Degrelle on Facebook.

Barely in office, the Meloni government also made its first preparations for the violent repression of political and social resistance. By decree it created a new criminal offence. Anyone who organises or participates in an “assembly” of more than fifty people by “invading the space of other people’s public and private properties or buildings” can be punished with imprisonment of between three and six years and a fine of up to 10,000 euros if the event “may result in a threat to public order, security or health.”

The pretext for the decree was a harmless rave party in a disused hall in Modena, which 3,500 young people had attended. When the owner of the hall filed a complaint because he feared it would collapse, the police sealed off the building. The ravers then left the area peacefully without any incidents.

If the decree “survives its way through parliament in its current version, the occupation of a school, university or factory in a strike and the occupation of abandoned buildings could also be punished,” comments the FAZ. “Many believe that with the ‘anti-rave norm’ the government had created a tool to suppress manifestations of collective dissent through pre-emptive repression and surveillance. In this reading, the illegal rave was merely a welcome opportunity.”

That resistance to the policies of the ruling class is growing is shown not only by recurrent strikes in the public and private sectors, but also by the mounting opposition to NATO’s war policy.

Last weekend, according to the organisers, more than 100,000 people took to the streets across Italy to demonstrate for a negotiated peace in Ukraine. More than 500 organisations, including trade unions, had called for the demonstrations.

But the same parties that have strengthened NATO in recent years, organised the social attacks on the working class and thus helped the right-wing to power, are now trying to misdirect and paralyse the growing opposition. Three former heads of government spoke at the rallies: Giuseppe Conte (Five Star) and Enrico Letta (Democrats) in Rome, and Matteo Renzi (Italia Viva) in Milan.

Modeling projections by Ugandan health officials suggest that Ebola deaths could reach 500 by April

Benjamin Mateus

The World Health Organization (WHO) reported that as of November 9, 2022, the Ebola outbreak in Uganda with the Sudan virus is now at 156 infections (135 confirmed and 21 probable cases) with 62 patients having recovered. In all, eight districts have been affected. A total of 74 deaths have been reported (53 confirmed and 21 probable fatalities).

A man wearing protective clothing carries water to wash the interior of an ambulance used to transport suspected Ebola victims, in the town of Kassanda in Uganda Tuesday, Nov. 1, 2022. [AP Photo/Hajarah Nalwadda]

In an exclusive report published in the Telegraph this week, modeling projections from October 31 leaked to the press forecast that the Ebola outbreak in Uganda could reach 1,200 infections with more than 500 fatalities by April 2023 if efforts to contain the virus are not heeded.

If the projections hold their course, the current outbreak will surpass the 2000-2001 outbreak that killed 224 people. It would also be the third deadliest Ebola outbreak after the West African epidemic 2014-2016 that killed over 11,300 people and the outbreak in 2018-2022 in the Democratic Republic of the Congo (DRC) that led to almost 2,300 fatalities.  

Although the WHO has characterized government efforts as transparent and all-in despite the limitations on the ground, the Telegraph wrote,“ Insiders say a ‘toxic’ atmosphere has developed. Relations between the authoritarian government and international agencies on the ground are tense, while many local officials have been alienated and feel unable to raise issues or challenge their superiors.”

Although these are considered worse case scenarios, sources speaking on condition of anonymity with the press said that many of the people diagnosed with Ebola were presenting several days after their symptoms. “This is one of the single biggest issues right now in this outbreak [and] means they may have already spread it and affects their chance of survival.” Once symptoms begin, the infected can readily transmit the virus to others. Additionally, as supportive care is essential, early intervention has proven to be the difference between life and death.

The WHO is appealing for $88 million in funds be made available to assist in efforts to bring the outbreak to an end. The purpose of these funds is to aid in enhancing contact tracing, community engagement, strengthen infection prevention and control measures and equip treatment centers.

The lack of funding has undermined these efforts, which threaten to fall short as the deadly infection grows across the capital Kampala. The Wall Street Journal noted that the Ministry of Health in Uganda faces a $13 million shortfall to stock hospitals with vital resources, pay contact tracers and health workers.

On Monday, more than 1,500 medical interns that include doctors, pharmacists and nurses in government hospitals said they would go on strike over delays in receiving their salaries and benefits. Many have gone for more than three months without pay and no accommodations or food at the hospitals where they work. Complaints of hunger are common among them.

Lack of proper protective equipment in treating Ebola patients has added to their frustrations. One medical intern has already perished from contracting the deadly virus. However, the Health Ministry has asked them to desist from striking and has made promises that the pay issues would be resolved by the end of the week. Emmanuel Ainebyoona, a spokesman for the health ministry, offered a terse statement, “This is not the time for them to strike, when we have an Ebola outbreak.”

The government’s Ebola incident manager Dr. Henry Kyobe Bosa told the press that Uganda was working with donors to obtain extra funding, though donations were thus far short of their targets. He said, “What we have raised so far from our own resources is not enough.”

Furthermore, health volunteers are reluctant to attend to contacts out of fear they will contract the virus themselves. Dr. Gonzaga Ssenyondo told The Monitor, “There is limited manpower willing to work because most of the health workers have no experience in Ebola management and they fear contracting the deadly virus.”

He feared that in his municipality of Masaka, southwest of the capital near the border with Tanzania, where three confirmed cases of Ebola have been reported, the population remains complacent. The perception of low risk “may result in the mass spread of [Ebola infections] as communities still think that there are no cases. By the time a patient reaches a stage called wet symptoms [late stage] after 21 days, most of his or her accomplices are at risk.”

Although President Yoweri Museveni announced that he would not impose a lockdown on the capital city, last weekend the government extended the three-week lockdown on the two districts—Mubende and Kassanda—at the epicenter of the Ebola outbreak for an additional three weeks that include a dusk to dawn curfew.

The lockdowns, however, have been poorly supported, leading to frustrations and anger among the residents in these communities. Food deliveries are not being made as promised which means some have ventured out of their districts looking for sustenance and supplies, threatening to set off new chains of infections. Lack of fuel and medical personnel have also stranded people needing medical attention. Christopher Kwefuga, a government councilor in the district of Mubende, told the press that “people are helpless. Many are bearing untold suffering in their homes and there is no help from government.”

Although public health measures, as noted by the WHO Director-General Tedros Adhanom Ghebreyesus, appear to have contained the outbreak in Mubende, in the last two weeks most cases have occurred in the densely populated capital of Kampala. There have been 23 confirmed cases among students of which 11 are among children from five schools attending classes in Kampala. Eight school children have perished.

The education minister and First Lady of Uganda, Janet Kataaha Museveni, told the press that the cabinet had decided to end the term for schools two weeks earlier, on November 25, to reduce the risk of infections being spread among students sitting together in densely packed classrooms. No explanations were offered as to why the measures were not being taken immediately.

State Minister of Primary Education Joyce Kaducu said at a recent press briefing, “We have been notified by health experts that children are at a higher risk of death than the adults when they get infected with this virus. We should be very careful as far as protecting these children is concerned.”

However, as corruption is rampant and infighting between various national agencies is common, it also means that response to the outbreak is being hindered, leaving the population vulnerable. In early October, for instance, the Uganda Virus Research Institute, with vast expertise in Ebola outbreaks, was cut out of the response to the outbreak by the health ministry over testing issues.

Dr. Olive Kobusingye, a Senior Research Fellow at the department of public health at Makerere University in Kampala, told the Telegraph that any action taken by an agency deemed inappropriate by government officials will lead to serious repercussions. “In this system, we have so much power concentrated at the top … the consequences are going to be really nasty for you. So, what people do—instead of responding and acting promptly—is, they wait for cues … in the meantime, nothing is happening.”

Crypto market in turmoil as rescue plan for bankrupt FTX falls through overnight

Nick Beams

The collapse of the crypto currency company FTX and the withdrawal of a rescue operation by its major rival Binance, barely 24 hours after it was announced, has sent a shock wave through the crypto currency world, and pointed to sources of instability in the financial system more broadly.

An advertisement for Bitcoin cryptocurrency is displayed on a street in Hong Kong, on Feb. 17, 2022. Bitcoin slumped to a two-year low, Wednesday, November 9. [AP Photo/Kin Cheung]

On Tuesday it was announced that FTX, one of the largest crypto exchanges owned by the high-flying crypto entrepreneur Sam Bankman-Fried, reputed to have a fortune, at least on paper, of more than $20 billion, had been rescued from a liquidity crisis by its major rival Binance.

Binance chief Changpeng Zhao tweeted that FTX had “asked for our help” and said a letter of intent had been signed to “fully acquire” FTX and “help cover the liquidity crunch” with the “discretion to pull out from the deal at any time.”

By late yesterday afternoon Zhao had exercised that option and the rescue operation was off.

Binance said its “hope” had been to support FTX’s customers and provide liquidity “but the issues are beyond our control or ability to help.”

Its statement said that “as a result of corporate due diligence, as well as the latest news reports regarding mishandled customer funds and alleged US agency investigations,” Binance had decided not to pursue the purchase.

It has been reported that the Securities and Exchange Commission is expanding an investigation into FTX, probing its crypto currency lending products and its management of customer funds. The Commodities Exchange Commission is also investigating the company.

Besides the investigations, the state of FTX’s finances was a key motivation for the Binance reversal.

According to a report on Bloomberg, it became clear within a matter of hours that rescuing FTX would be a “tall order” for Binance.

“Its executives found themselves staring into a financial black hole—a gap between liabilities and assets at FTX that’s probably in the billions, and possibly more than $6 billion,” it said, citing “a person familiar with the matter.”

The initial intervention by Zhao did not arise from the “goodness of his heart” to protect FTX customers. It reflected fears that if FTX, valued at $32 billion at the start of this year, went under, it could set off a panic through the crypto trading system as a whole and impact severely on his own company.

That unraveling may now take place as the value of crypto currencies falls. Bitcoin, the most traded crypto currency, dropped 12 percent to $16,282, its lowest level since late 2020.

Jon de Wet, chief investment officer at the crypto wealth management firm Zerocap, told the Financial Times that “markets have now hit full panic” and “all hell is breaking loose.”

The episode reveals how rapidly talk of financial problems can turn into a full-blown crisis within a matter of days or even hours.

Problems for FTX began to emerge last week when Coinbase, a news web site covering the digital market, revealed that Almeda Research, a hedge fund owned by Bankman-Fried, held a large portion of its assets in FTT, a relatively illiquid token owned by FTX.

It reported that as of June 30, Almeda’s assets amounted to $14.6 billion of which $3.66 billion was in FTT. This prompted claims by at least one blogger that there was a parallel between Almeda and the Celsius Network crypto lender, which collapsed earlier this year amid accusations that it had been artificially enhancing its balance sheet by manipulating the value of its own token, CEL.

Then on Sunday, the “drama reached fever pitch,” in the words of a Bloomberg report, when Zhao said he would sell all his FTT holdings, worth an estimated $529 million, due to “recent revelations that came to light.” The value of FTT then dropped by more than 70 percent.

This prompted a rush for the exits by large and smaller investors. According to a report in the Wall Street Journal (WSJ), FTX experienced a $1.4 billion withdrawal on the blockchain of the crypto currency Ethereum in 24 hours, as firms that facilitate crypto trades moved to other exchanges. Some smaller traders said they were not able to withdraw their funds.

FTX was not a small firm operating on the edge of the market but enjoyed the backing of key sections of finance capital. It was launched in 2019 and received money from Singapore’s sovereign wealth fund as well as from the venture capital firm Sequoia Capital and the Ontario Teachers Pension Plan.

As the crypto market fell this year, after reaching a peak last November, FTX was held up as a highly valuable start-up company. According to the WSJ, its rise was fueled by a “wave of nearly $2 billion in venture capital that rushed into the company over the past three years from a who’s who of startup investing including SoftBank Group and Sequoia Capital.” The hedge fund BlackRock also supplied capital.

It secured a naming rights deal with the stadium in which the basketball team Miami Heat plays, now called FTX Arena. Legendary NFL quarterback Tom Brady appeared in an ad for the company last year.

FTX was regarded as a well-managed company. Bankman-Fried was in regular discussions with lawmakers in Washington and appeared at conferences where he interviewed so-called “luminaries,” including former President Bill Clinton and former UK Prime Minister Tony Blair.

But behind the wall of money and media promotion, there was a fundamental problem to which Cory Epstein, chief executive of Swan.com, a bitcoin financial services firm, drew attention in remarks to the WSJ.

Crypto firms, he said, because of their holdings of extremely volatile assets that have in many cases undergone large falls, “are inherently fragile, susceptible to a Lehman-like collapse at any time. And the only hope once under pressure is that another player will bail them out.”

But as revealed in this case, there is always the prospect that such a bailout will not take place and the crisis of one firm will go far beyond the crypto system and impact on the financial system, involving major hedge funds and even pension funds.

In an earlier report, Bloomberg commented that for the crypto industry as a whole “FTX’s demise is another example of a once-towering player laid low when a crisis of confidence forced a run on its assets. Like others before it, including lenders Celsius Networks and hedge fund Three Arrows Capital, reserves proved inadequate when market sentiment turned against it, even as top executives said nothing was amiss.”

This description of the crypto world applies more broadly.

As recent reports by the International Monetary Fund and the Federal Reserve, among others, have made clear, there are major areas of the financial system where short-term funds have been placed in assets that cannot be quickly turned into cash if investors decide en masse to withdraw their money, prompting a situation akin to bank runs in the past but today involving far greater amounts of money.

These inherent contradictions have remained somewhat beneath the surface over the past 14 years, concealed by the massive injection of money into the financial system by the world’s central banks as they have bailed out the corporations and the financial markets.

But they now threaten to burst to the surface in many areas, virtually overnight, as in the case of FTX, as the Fed and other central banks tighten monetary policy and lift interest rates to batter down the wage demands of the working class in response to rampant inflation.

Ukraine hunts for “collaborators”

Andrea Peters

The Ukrainian government is intensifying its hunt for pro-Russian “collaborators,” lodging charges against hundreds, if not thousands, of its own citizens, particularly in regions that recently came back under the control of Kiev. The accused face prison sentences, in addition to heavy fines, seizure of property, and the loss of other rights. According to data recently released by the General Prosecutor’s office, the government has opened more than 18,000 cases related to “crimes against national security,” which include treason, sabotage, “assistance to the aggressor state,” and “encroachment on the territorial integrity and inviolability of Ukraine.”

The Ukrainian government, hailed throughout the West as the embodiment of freedom and democracy, is waging a war not just against a foreign power, but against a section of its own population.

In late October, the director of a secondary school in Kharkiv was accused of collaborating with the enemy because he told instructors that they would reopen the institution, hold classes in Russian, use Russian textbooks, and employ Russian educational standards. A week earlier, another man from the region was charged with traitorous actions because, as the head of a municipal road repair shop in Balaklya, he made publicly-owned equipment available to Russian forces. Kharkiv was under occupation at the time.

In numerous instances, individuals are being targeted for nothing more than expressing some form of political support for Russia. Articles published in RBK-Ukraine between October 8 and 25 report that all of the following individuals are facing some form of collaboration-related charge: a resident of Yuzhnye who tried to convince acquaintances that the expansion of Russian sovereignty to Ukrainian territory was just; a woman who more than once discussed with a group of people her view that Ukraine’s independent existence was wrong; a resident of Kharkiv who repeated Russian “propaganda” that Moscow’s invasion was justified. A news anchor with Luhansk 24, a pro-Russian press service, has been notified that he is being investigated for collaborationism.

More prosecutions of this type are forthcoming. “Law enforcement is continuing its work to expose Ukrainian citizens who are supporters of Kremlin policy,” noted Ukr.net on October 15.

Accusations of “aiding the enemy” are also being leveled against people for, it would seem, attempting to keep their communities alive in times of war. A 32-year-old man also from Kharkiv is being prosecuted because he allegedly voluntarily agreed to guard a pharmacy and a depot holding humanitarian supplies while the city was under occupation. The head of the tiny village of Valenkove is facing charges because “acting on instructions from representatives of the Russian Federation, the woman collected data and applications from local residents to address organizational and humanitarian issues.”

Indictments that carry 15-year or more prison sentences—joining anti-Ukrainian partisan forces, telling the Russian military the location of Ukrainian forces, reporting on “patriotic” Ukrainians, and providing economic and other resources to the Russian side—are also being doled out. One detainee, captured on the charge that he was “employed” by a “people’s militia of the occupiers,” died because he allegedly sought to flee and blew himself up stepping on a Russian mine.

Areas of Ukraine that have large Russian populations are being singled out in the hunt for collaborators. According to Pressorg.25, most of the recently-created “investigative offices were opened in the Luhansk, Zaporozhye, Donetsk, Kharkiv and Kherson regions.” In August, The New York Times published an article about the work of pro-Ukrainian militias working behind enemy lines. According to the newspaper, one of their missions, in addition to killing alleged collaborators, is to monitor educators believed to be promoting a pro-Russian line. “Partisans,” however, “will not attack teachers,” they write. Rather, they “have sought to humiliate them through leaflets they often post on utility poles with dark warnings for collaborators, as part of their psychological operations.”

Ukraine’s recently-passed laws on collaborationism are extremely broad. They include things such as “public denial of the implementation of armed aggression against Ukraine, establishment and approval of temporary occupation of part of the territory of Ukraine,” “public appeals to support the decisions and/or actions of the aggressor state, armed formations, occupation administration of the aggressor state,” “implementation of propaganda of the aggressor state in educational institutions,” “voluntary occupation of a non-leading position (not related to the performance of organizational, administrative or economic functions) in illegal authorities established in the temporarily occupied territory,” and “participation in” or “organization and conduct of events of a political nature, implementation of information activities in cooperation with the aggressor state and/or its occupation administration, aimed at supporting the aggressor state and/or evading its responsibility for the armed aggression against Ukraine.”

Particularly for those located in areas that have come under occupation, it is easy to fall afoul of laws that ban essentially any engagement with Russian military or political authorities, much less the expression of a political thought that contradicts the official line of the government in Kiev.

Punishments include stripping people of the right to hold various offices or other posts for up to 15 years, confiscation of property, arrest for up to six months, imprisonment from three to 15 years or for life, and sentencing to two years of correctional labor.

Charges, trials, and punishments are proceeding at a rapid pace. The Telegram channels of Ukraine’s General Prosecutor and other state offices are filled with near-daily photos of the newly-accused. Under conditions of martial law, the destruction of infrastructure, and the exodus of more than seven million people—including, no doubt, many attorneys—it is impossible that anyone caught in this maelstrom is receiving a fair trial. Guilty verdicts and sentences follow quickly on the heels of charges. Online images show that among the accused are the elderly and women, many of whom appear to be visibly poor.

The pictures of defendants released by the state are blurred but often still identifiable. The Ukrainian military is currently using US-provided facial-recognition-technology to both monitor its own population and torment the families of dead Russian soldiers by finding their social media accounts online, contacting their relatives, and sending them images of their dead bodies. In posting photos of those charged with collaboration on social media, state officials are creating conditions under which friends and family of the accused can be found and made subject to collective punishment.

At the same time, there are efforts underway to strip parliamentary representatives from opposition political parties, which were banned by President Zelensky in May, of their seats, on the grounds that they are sympathetic to Russia and, by virtue of that fact, collaborationists.

Mass layoffs expand from technology to financial and housing industries

Kevin Reed

Mass layoffs continued in the technology industry on Wednesday and spread to the financial and housing sectors as the corporate assault on jobs and wages expanded in the recession being instigated by the Federal Reserve intensified.

In a widely anticipated move, Facebook parent Meta Platforms, Inc. eliminated 11,000 jobs early Wednesday morning. In a letter to employees, Meta CEO and founder of Facebook Mark Zuckerberg wrote that he “decided to reduce the size of our team by 13 percent” and that he was “especially sorry to those impacted.”

Zuckerberg said the surge in social media advertising that occurred during the COVID-19 crisis did not become a “permanent acceleration that would continue even after the pandemic” as predicted by “many people.” Instead, he wrote, the “macroeconomic downturn” and increased competition from other social media platforms such as TikTok “have caused our revenue to be much lower than I’d expected. I got this wrong, and I take responsibility for that.”

The mea culpa from billionaire notwithstanding—his personal net worth increased by $1.78 billion to $37.2 billion after the announcement—Zuckerberg emphasized that Meta needed to become “more capital efficient” and was “restructuring teams to increase our efficiency.”

While he claimed the layoffs were viewed as a “last resort,” it is clear that Wall Street, which lost 70 percent of their investment into Meta shares since the beginning of 2022, was demanding that Zuckerberg take drastic measures to cut costs, including the elimination of 20 percent of the 87,000-member workforce.

The impact of the Meta layoffs will be devastating as technology workers scramble to find new jobs in the general environment of mass layoffs throughout the industry. Sandra J. Sucher, a management professor at Harvard, told the New York Times, “These cycles of boom and bust are incredibly destructive within organizations because people employed there feel like they don’t know where they stand.”

Former employees took to social media to express their disgust at the layoffs and the way the $270 billion company carried them out. Carlos Giffoni, who worked as a product manager for Instagram, posted on LinkedIn, “Just woke up to find out I had been laid off by Meta/Instagram from an email.”

Giffoni continued, “No warning, and was told recently by a lead the team I worked on was high priority and wouldn’t be affected. Company-wide layoffs via email. Classy. I guess I have plenty of time for writing now.”

Those laid off were immediately denied access to Meta systems and facilities. Eric Triebe, a software engineering manager, posted on LinkedIn that he “feels like I’m in an episode of Severance [TV series]” due to the abrupt firing.

“No meeting with HR. No good-byes to co-workers. Seemingly no contact was made or discussion from leadership with my manager of skip in terms of justification. Just a cold, impersonal email and then the plug is pulled before you wake up,” Triebe said.

Other layoffs in the technology industry confirmed on Wednesday included 1,000 jobs at Salesforce, one of the largest employers in San Francisco, and Microsoft had cut 1 percent, or around 1,000 jobs, in October.

Commenting on the Salesforce layoffs, TechCrunch wrote late Tuesday, “While it was not on the scale of Twitter’s massive layoffs last week [3,700 job cuts], it still was yet another announcement in the continuing drum beat of tech layoffs we have been hearing about from companies large and small over the last several months, as companies aim for profitability after a long period of growth uber alles.”

Meanwhile, layoffs hit the financial industry on Wednesday with the investment banks Citigroup and Barclays eliminating advisory and trading staff. A report by CNBC said Citigroup “let go of roughly 50 trading personnel this week,” based on information from anonymous sources. Bloomberg also reported on Tuesday that Citigroup cut “dozens of jobs” across its investment-banking unit.

CNBC also reported that London-based Barclays cut 200 jobs across its “banking and trading desks this week,” and Credit Suisse is “cutting 2,700 employees in the fourth quarter and aims to slash a total of 9,000 positions by 2025.”

The housing industry and its mortgage arm are being turned upside down by the Federal Reserve’s interest rate increases. Layoffs have already taken place at New American Funding (240 layoffs) of Tustin, California, and Athas Capital Group (200 jobs) of Calabasas Hills, California, is closing its doors. According to the US Bureau of Labor Statistics, independent mortgage banks had cut 8,200 jobs in the month of September.

With mortgage interest rates now reaching a 21-year high, lending activity has dropped off precipitously in the US. On Wednesday, the Seattle-based residential real estate brokerage Redfin laid off 13 percent, or 862 employees, of its workforce.

In a letter to employees published at 5:45 a.m. Pacific Time, Redfin CEO Glenn Kelman said, “We’ll start calling the folks being asked to leave other departments at 8:00 a.m. local time, and then send an email out to everyone else when we’re done.” Kelman said the expectation is that the housing market in 2023 will be “30% smaller than it was in 2021.”

Ian Shepherdson, Patheon Macro chief economist, told Forbes on Monday, “It’s a certainty that layoffs soon will be rising across the entire housing ecosystem.” He also warned that the struggles in housing will be akin to the well-publicized tech layoffs.

Shepherdson continued, “Layoffs are not yet rising—and the bar to letting people go probably is higher than in previous cycles, given how much trouble firms had rehiring people after the initial Covid shock—but that likely will change over the next couple months.”