A Happy Soviet Christmas To One and All !

'A bit of fun for the time of year thats in it, and of course wishing all the regular readers of Unrepentant' a Merry Christmas and a Happy New Year in 2009, thanks also to those who nominated this blog into the top 100 political blogs here , I have no idea who ran the chart and was unaware of its existence until someone told me about it, but thanks anyway. The blog is regularly attracting a goodly amount of traffic from around the globe, and thanks for all those of you have commented on the variety of postings put up by my angelic self over the year.

Its sometimes forgotten that in the USSR there was a whole festive period focussed around the New Year, this is further complicated by the fact the Russian Orthodox 'Christmas' is of course celebrated later than the western worlds.But this is not simply a product of official atheism under of Soviet times -- even in tsarist times, New Year's was the day associated with decorated trees, ''Santa,'' and the exchanging of gifts, because Christmas was not a festive holy day for Russian Orthodox Christianity. (Which, of course, observes Christmas in early January, since Eastern Orthodoxy never switched from the Julian to the Gregorian calendar.)

I'm not sure when the "New Year's Tree" custom developed in Russia, though it wouldn't surprise me if, like most non-Germans, they got the idea via Queen Victoria, who popularized what had been a strictly German custom in honor of her German husband.

I did receive quite a few Soviet Christmas/New year cards in the 1980's, but I like most other people I suppose dumped them. I was interested to find that there is now a band of Soviet christmas memorabilia collectors, who make a hobby of collecting the old Soviet Christmas cards of the past. I can understand why, they were always well designed, beautifully coloured and were as full of christmassy kitsch as anything on offer in the West. One such collector is Boris Glazer lives in Ekaterinburg, Russia. When asked how he began his soviet christmas card collection he said

"As always, it began in childhood. New Year in the Soviet Union was the only official holiday not connected with communist ideology. In those days, it was the main winter holiday--a mix of Christmas and New Year. The Christmas Tree was substituted with New Year Tree. The star on its top was considered as the small sister of the Kremlin stars. But it did not spoil an atmosphere of a holiday, fun, kindness, and hope. In those days, when even telephone was not in each family, people congratulated each other with postcards. My grandmother had a lot of relatives in all corners of the USSR and they actively exchanged congratulations. When she passed away, there were few hundreds cards left after her which gave a start to my collection. The collection gradually grew and replenished, and later, when I was engaged in graphic design and programming, one of my projects consist in creation of a mosaic from New Year's cards. The part from these scanned cards can be seen on my site....My favorite cards are from '50s. It is the time of blossoming of socialist realism in the USSR. I very much like these detailed realistic images. And my wife loves cards from '60s when images became more abstract and flat. These were the times of the Iron Curtain and the first space flights. The postcards of that period combine a nice (sometimes "international" looking) drawing style with Russian national fairytale characters and impudent Soviet propaganda. Good old soviet kitsch!..."
Interesting to see that the New Year was a time for children and families greeting each other in the USSR too , fulfilling a similar role as Christmas in the western world today, also interesting to observe that as was the case with many many aspects of Soviet life, there was space given for fun and festivities in contrast to the image of unremitting gloom which is the stereotypical image of Soviet life we are all expected to believe to this day....

Have a Wonderful Christmas and a Peaceful 2009 !

Brian Cowen Does NOT Respect the Irish Peoples Choice on Lisbon

Taoiseach Brian Cowen's hypocrisy in pretending to "respect" the people's referendum vote on Lisbon is now evident, for not a jot or tittle of Lisbon will be altered when he forces the people to vote on it a second time next year.

Political Declarations or promises regarding future Treaties that are not yet even drafted will not alter a comma of the Lisbon Treaty.If people vote Yes in Lisbon Two to exactly the same Treaty which they voted No to last June they will be changing the Irish Constitution so as to recognise the supremacy of the law of the new Union which Lisbon would establish over anything contrary, whether in the Irish Constitution or in political Declarations and promises that might be tacked on to Lisbon.

No political Declarations or promises about commitments and even Protocols in future EU Treaties can change Lisbon or the supremacy of the EU Court of Justice in interpreting that Treaty's provisions. These will have come into force well before any further EU Treaty or Treaties will even be negotiated.

If the Irish media and public opinion allow themselves to be taken in by the kind of presentational trickery Taoiseach Cowen and his Government are now planning, they could be making themselves the laughing stock of Europe.

A promise by the 27 EU Governments that each Member State can keep a Commissioner permanently under Lisbon is valueless in the light of that Treaty's provision that from 2014 Member States will lose their right to decide who their national commissioner will be.

For under Lisbon (Article 17.7, amended Treaty on European Union) a Government's present right to decide would be replaced by a right to make "suggestions" only, for the incoming Commission President to decide (See notes below elaborating on this point).

Under the present Nice Treaty arrangements Member States would retain permanently their right to decide who their national Commissioner is - a right which they would lose under Lisbon.

The Nice Treaty requires that the number of Commissioners should be fewer than the number of Member States from 2009, but by an unspecified number to be agreed unanimously.

This requirement of the present Nice-based Treaties can be abided by, and Ireland and the other States can keep a national Commissioner permanently, by the simple expedient of reducing the number of Commissioners from 27 to 26 and permitting whoever holds the job of "High Representative for EU Foreign and Security Policy" - currently Spain's Javier Solana - to attend Commission meetings instead of being formally titled a Commissioner from that State.

This can and should be done under the Nice Treaty. This would mean that the Commission arrangements would continue virtually unchanged from the present. Ireland woud retain a Commissoner permanently except in the unlikely event of an Irish person being given the even more important job of High Representative.

Taoiseach Cowen and his Government have deliberately sought to isolate and put pressure on their own people by failing to say after the Lisbon referendum last June that Ireland would not ratify Lisbon in view of the people's No vote.

If the Taoiseach had done that, continued ratification by the other EU States would have been pointless, for Lisbon requires ratification by all 27 States before it can come into force for anyone.

Such a stand would have led to the Lisbon Treaty being opened and a chance created for a more democratic rather than less democratic EU through a better Treaty.

The prudent stand now for the Government and for the EU is to wait for the UK general election and the likely advent to office in Britain of a Conservative Government which will be committed to holding a referendum on Lisbon in the UK and recommending a No vote to it, as long as we Irish do not alter our No vote before then.

That would put paid to the attempted isolation of Ireland, which its own Government has connived at.

It would also give our fellow countrymen and women in Northern Ireland a chance to vote on this Treaty-cum-Constitution which would make them real citizens for the first time of an EU that would have the constitutional form of a supranational Federal State run on most undemocratic lines under Franco-German hegemony.

Understanding the Roots of the Great Slump of 2008

The capitalist system has proved very adaptable since Marx described in details its workings in the mid-19th century, not least because the state has become critical to ensuring the survival of capitalism at critical points in recent economic history. Now in 2008, we see the state being rehabilitated once again by the apologists for the free market system, the very people who denounced the role of the state in the economy a few years back. since in many cases throughout the world today, the state is being deployed using tax payers money to bail out the busted financial system.
The thirty years after 1945, saw the dominance of Keynesian economics in the western world, whenever the western economies slowed the state could intervene with an injection of liquidity. For thirty years the business cycle was smoothed and business grew in scope and scale, a process known now as globalisation. With the oil crisis of the 1970's, prompted by the assertion of some control over production by oil producing states, and a huge growth in inflation driven largely by organised labour in the western world seeking a more eqitable share in the wealth created , we see Keynesianism becoming discredited and elbowed aside as the ruling economic orthodoxy by the aggressively right-wing pro-big business approach of monetarism/neo liberal economics.
The advent of neo-liberalism was characterised by FOUR key features,

Firstly;- a direct attack on the bargaining power of organised labour through the demoralisation and fear that arose from mass unemployment. This was expressed by increased legal controls on trade unionism, and the parallel creation of a 'flexible' casualised labour force.

Secondly:- the privatisation of utilities and public services, creating a new and certain stream of income to private corporations.

Thirdly:-the freeing up of capital movements globally, allowing capital to be directed to areas of the world with the most profitable rates of exploitation.The City of London became the primary world centre for currency and commodity speculation, while the UK economy was steadily de-industrialised.

Fourthly:- workers savings for pensions, insurance and housing were transferred into the private sector. With mutuals such as building societies being transformed into plc's.

This 'financialisation' provided a new and critically important mechanism for the extraction of super-normal profit. The bulk of capital in public companies and high street banks now derives from the pension funds and and the savings of both employees and the greatly reduced non-monopoly strata . These funds earn a low and sometimes negative rate of real interest. However, around them lay clustered a complex array of financial vehicles for the very wealthy. Merchant Banks in the 1980's, hedge funds in the 1990's, and private equity and commodity index investors in the 2000's. These operate off-shore, do not pay tax, and secure immense profits. Hedge funds had ana average annual return of 19% throughout the 1990's, and they used our savings for leverage.
This system w as no more immune to capitalisms contradictions than its predecessors. The accelerated accumulation of capital placed pressure on average profit, and the export of capital to countries such as India and China generated huge imbalances in trade and currency reserves . Fatally the system fell prey to the inequality and poverty that itself had created. Workers could no longer afford to buy all the goods produced .
So to keep the casino wheels spinning, governments and banks between themselves colluded in the creation of massive levels of sanctioned debt, above all in mortgages. In the hands of finace capitals investment specialists this became the credit required for one last round of leveraged speculationin property, commodities, and private equity buy-outs.
Then the bubble burst, leaving working people the world over facing unemployment and repossession.
So this current, rapidly deepening world recession, is not about bonuses or the "culture of greed". It is all about recognising that the state for the past 30 years and more has been utilised throughout the western world to facilitate an increased rate of exploitation. Now the state must be rescued from being the handmaid of capital, to being a servant of all the people. For this it is essential that instead of being a sugar-daddy to the corporate sector, the state must take control of savings, pensions, and insurance. When this is achieved it will be possible to direct investment towards the truly productive economy and away from the parasitic economy of the financial sector. Speculative capital transactions must be stopped, tax havens scrapped, and wealth taxed.

When all this is understood, it becomes clear that once again the role of the state in the modern economy is up for serious discussion , and for that reason, the hegemony of neo-liberalism is drawing rapidly to an end, since it is the champions of unregulated capitalism, red in tooth and claw, who are looking increasingly out of touch with the new zeit-geist sweeping all before it.

COW ECONOMICS....

Perhaps we all need a bit of cheering up...

SOCIALISM
You have 2 cows.
You give one to your neighbour.

COMMUNISM
You have 2 cows.
The State takes both and gives you some milk.

FASCISM
You have 2 cows.
The State takes both and sells you some milk.

NAZISM
You have 2 cows.
The State takes both and shoots you.

BUREAUCRATISM
You have 2 cows.
The State takes both, shoots one, milks the other, and then throws the milk away…

TRADITIONAL CAPITALISM
You have two cows.
You sell one and buy a bull.
Your herd multiplies.
You then employ someone else to do the work and you grab
all future profits to fund your indolent lifestyle.


SURREALISM
You have two giraffes.
The government requires you to take harmonica lessons


AN AMERICAN CORPORATION
You have two cows.
You sell one, and force the other to produce the milk of four cows.
Later, you hire a consultant to analyse why the cow has dropped dead.


ENRON VENTURE CAPITALISM
You have two cows.
You sell three of them to your publicly listed company, using 20 letters of credit opened by your brother-in-law at the bank, then execute a debt/equity swap with an associated general offer so that you get all four cows back, with a tax exemption for five cows.
The milk rights of the six cows are transferred via an intermediary to a Cayman Island Company secretly owned by the majority shareholder who sells the rights to all seven cows back to your listed company.
The annual report says the company owns eight cows, with an option on one more.
You sell one cow to buy a new president of the United States , leaving you with nine cows.
No balance sheet provided with the release.
The public then buys your bull.


A FRENCH CORPORATION
You have two cows.
You go on strike, organise a riot, and block the roads, because you want three cows.


A JAPANESE CORPORATION
You have two cows.
You redesign them so they are one-tenth the size of an ordinary cow and produce twenty times the milk.
You then create a clever cow cartoon image called 'Cowkimon' and market it worldwide.


A GERMAN CORPORATION
You have two cows.
You re-eng ineer them so they live for 100 years, eat once a month, and milk themselves.


AN ITALIAN CORPORATION
You have two cows, but you don't know where they are.
You decide to have lunch.


A RUSSIAN CORPORATION
You have two cows.
You count them and learn you have five cows.
You count them again and learn you have 42 cows.
You count them again and learn you have 2 cows.
You stop counting cows and open another bottle of vodka.


A SWISS CORPORATION
You have 5000 cows. None of them belong to you.
You charge the owners for storing them.


A CHINESE CORPORATION
You have two cows.
You have 300 people milking them.
You claim that you have full employment, and high bovine productivity.
You arrest the newsman who reported the real situation.


AN INDIAN CORPORATION
You have two cows.
You worship them.


A BRITISH CORPORATION
You have two cows.
Both are mad.


AN IRAQI CORPORATION
Everyone thinks you have lots of cows.
You tell them that you have none.
No-one believes you, so they bomb the **** out of you and invade your country.
You still have no cows, but at least now you are part of Democracy….


AN AUSTRALIAN CORPORATION
You have two cows.
Business seems pretty good.
You close the office and go for a few beers to celebrate.


A NEW ZEALAND CORPORATION
You have two cows.
The one on the left looks very attractive.

The Morning Star....a constant source of hope and pride.

Readers of this blog will no doubt know that I spent many years in the UK, where as member of the Communist Party of Great Britain (CPGB) , I received a grounding in political activity, internationalism, and marxism that I still find very useful to this day. I was privileged in the CPGB to meet some outstanding communist intellectuals, who were variously academics, trade union leaders, community activists, raconteurs, anti-racist fighters, anti-fascists, and internationalists, and often all of these at once. I prefaced that list by stating that it was the intellectual life of the CPGB that I found most stimulating. Whether self -taught auto-didacts with rows of literary or political classics on their shelves, or leading academics in their various fields, the fellow comrades of the 'Party' as it was always referred to provided a rich and varied forum for discussion. It was a party that cherished discussion and debate amongst its members, sometimes tedious and tendentious, but usually notable for its relatively high level. I have never encountered the likes of it since the demise of the CPGB in any political organisation I have subsequently been involved with. Even though my period of involvement with the CP was in its latter stages I met some notable figures, some of who had derived their political education in the 1920's and 1930's where the intellectual ferment of the Left in the UK was arguably at its most influential in terms of the intellectual life of the country. For a small party the CPGB undoubtedly punched well above its weight in intellectual terms. Through my membership of this, what on looking back on it, was an extraordinary disciplined and committed organisation, as a young man, I was privileged to derive cross generational discussions and opportunities to learn from people, that the vast majority of my age group would never have the chance to encounter. I recollect meeting people such as the legendary George Thomson, the classical scholar, Alan Bush the composer, James Klugmann, Charlie Woods, Peter Jobe, Monty Johnson, Maurice Levitas, Edward Upward the poet and novelist and close friend of Auden and Isherwood, Max Morris, the late great working class leader Frank Watters, Johnny Tarver, Charles Godden a talented drama critic and inspiring enthusiast for all things Shakespearean, and last but by no means least the great historian and analyst of Irish political history C D Greaves. I could fill the page with other equally remarkable names.
Perhaps from this rich treasury of past experiences, which went a great way to enriching my life, I retain an affection for the newspaper that put me in touch with all this in the first place, the Morning Star, formerly the Daily Worker had long since ceased to be the 'organ' of the CPGB when I first read it in 1977, but it was nevertheless a newspaper that pretty dutifully reflected the politics of the CP at the time. I think the first time that I started to read the paper on a regular basis was when I worked for a time in the Fords Dagenham plant before I went away to University. Like many young people in the late 1970's I had come across various Trotskyist publications, notably the ubiquitous "Socialist Worker" which seemed to be a sort of Trot version of the Daily Mirror, although it must be said that the weekly writings of the late Paul Foot and its breathless and irreverent news content was exciting. I noticed that the Socialist Worker and a number of other 'trot' papers were being sold at the gates of the Foundry where I was working every Thursday, all well and good I suppose. But working in the Foundry I was even more impressed to discover that the Morning Star the organ of the so called 'dead' CP was found in many places inside the factory. I was offered it one morning in the canteen by a steward, who looked as though he had been transferred directly from the Ealing Comedy 'I'm Alright Jack', in fact the character Peter Sellers played in the 1960's film could have been based on him, or even more bizarrely perhaps he had based hiimself on the character from the film.... He had short hair, a dust jacket adorned with a small soviet Lenin lapel badge, and approached the table with a quire of Morning Stars (thats 25 to the uninitiated) , and just said 'Star anyone?' I think he sold about 8 that I saw in the canteen, but I remember thinking, 'this lot are inside the factory', not standing at the gates. I know now that it was probably an unusual occurrence since even then the CPGB's industrial strength was in decline, but nevertheless it was evident after I joined the CP, and I was not given a card until I had attended a good few meetings and activities, that working class radicals of all sorts were far far more numerous in this strange almost family like cum quasi-religious organisation than were evident in all the Trot groups I had come across.
Its very very scary indeed to think that I am 31 years older than those days, ( I was 18 then, so go figure if your curious) and I still get the 'good old Star' as I have taken to calling it, by post now from across the water....So I am delighted to report that it has been announced by John Haylett, the editor of the paper ( see left) that the paper will be sigificantly expanding its coverage from January, thanks it would seem to a consortium of reasonably wealthy supporters providing much needed investment funding. This injection of funds will see the paper go from 12 to 16 pages from Monday to Friday, and 20 pages instead of 16 on Saturdays, great news. The most exciting development in my opinion is the decision to open up the content of the paper to a much larger reading public by putting its entire content daily online free to the online community from january 2009, samples of the content of this can be found here

I want to extend my congratulations and thanks to all at the Morning Star, its a great newspaper, going now continuously since 1930, apart from a period when it was banned in World War II. It was sometimes referred to as the 'Daily Miracle' well I for one am delighted that the age of miracles seems to be far from over...Good Luck Comrades....

Greenspan See's the Error of his Ways...(a bit)

This is an excerpt from the NY TIMES about former Fed chief Alan Greenspan’s grilling by lawmakers in Washingon:
Mr. Greenspan conceded a serious flaw in his own philosophy that unfettered free markets sit at the root of a superior economy.
“I made a mistake in presuming that the self-interests of organizations, specifically banks and others, were such as that they were best capable of protecting their own shareholders and their equity in the firms,” Mr. Greenspan said.
Referring to his free-market ideology, Mr. Greenspan added: “I have found a flaw. I don’t know how significant or permanent it is. But I have been very distressed by that fact.”
Mr. Waxman pressed the former Fed chair to clarify his words. “In other words, you found that your view of the world, your ideology, was not right, it was not working,” Mr. Waxman said.
“Absolutely, precisely,” Mr. Greenspan replied. “You know, that’s precisely the reason I was shocked, because I have been going for 40 years or more with very considerable evidence that it was working exceptionally well.”
Am I alone in deriving a little grim satisfaction from hearing Greenspan recanting his monetarist neo-liberal weltanschaung? However it is certainly the case that capitalism will now begin to absorb the facts and adapt to the situation, bringing a neo-Keynesian perspective back into vogue, a little reminiscent of those tag wrestling bouts when the wrestler losing could somehow stretch out from a prone and utterly defeated position to bring onto the mat his partner, thus relieving himself from his impending defeat, well capitalism has a ready line of tag partners, fascism has stepped in on more than one occasion, I suppose that neo-keynesian ideas will be employed to justify the state and its resources( the taxes we all pay), now being employed to ensure capitalist property relations are preserved, whereas the current crisis should really be tackled from asking the really fundamental question, namely how can something as important as global economic development and prosperity be left in the hands of such a patently illogical system.

The main question here is how finance capital, yes dust off your Lenin, the controllers ultimately of both the banks and industry have been able to shift the political balance of forces in their favour over the past 30 years, destroying the restrictions on capitalism's power globally which had been wrested from the worlds ruling class over the previous 50 years.

Communist Party of the USA Chairman Sam Webb traces the crisis back to the political offensive of the Reagan administration against American organised Labour, and the USSR and the role that it played in supporting anti-imperialism across the globe, especially in the Middle East, Africa, and Latin America.
"While financialisation was an outgrowth of the systematic weakness of US capitalism, it was also the leading edge of a neo-liberal model of capital accumulation designed to restore US capitalism's momentum, profitability, and dominant position in domestic and world affairs"

But Webb goes on to argue,financialization is a two-edged sword, not all peaches and cream. Indeed, its very successes opened up new fault lines in the U.S. and global economy, making it, as we so graphically see, unsustainable.

While it stimulated the domestic and global economy, it also left the USA with an astronomical pileup of household, government and corporate debt which can’t be unwound overnight.While it gave an impulse to economic growth, it also introduced enormous instability into the arteries of the U.S. and world economy, evidenced by the frequent financial contagions at home and globally over the past two decades.
While it prolonged the upward cyclical movements of capitalism, it has also set the stage for a hard economic landing and a much deeper crisis eventually, which is what we are experiencing now.While it created wealth on a substantial scale, it also successfully engineered the biggest transfer of wealth in US and European history from wealth creators — the world’s working people — to wealth appropriators, the upper crust of U.S. and European finance capital.
While attracting mobile capital the worlds financial markets, it also has made the economies of the western world dependent on the willingness of foreign investors to absorb massive amounts of debt, something that they are increasingly less inclined to do, as the dollar fell in value on international currency markets and markets collapse.While the debt-driven purchasing power of western consumers bolstered global demand, it also tied the world’s economy to the apron strings of a very heavily financialized, indebted, and unstable US economy.
As this year's financial woes spread beyond Wall Street to engulf much of the world's economy, the contours of debate over the crisis have also broadened. First narrowly defined around loans and bailouts, the debate has morphed into a wholesale reconsideration of the capitalist model and free-market economic orthodoxy. ""Laissez-faire is finished,"" said French President Nicolas Sarkozy in a recent speech. ""The all-powerful market that always knows best is finished."
The spectacle of a crisis of confidence in capitalism, largely unthinkable just a few years ago, has prompted a rethink of some of the most established aspects of modern economic theory. It has renewed the prominence of John Maynard Keynes, a Depression-era British economist who argued that free markets would not ""self-correct"" and that government involvement would always be needed to guarantee that market gains translated to improved living standards across society. Keynes wasn't an anti-capitalist--rather, he hoped government intervention would buttress the capitalist system against excesses and thereby preserve the positive aspects of the system. Keynesian theory stands in contrast to that of Friedrich Hayek, whose argument for a more hands-off approach to free markets won significant support in recent decades. An analysis from the FT says Keynes' renewed influence is now visible ""everywhere"": in Sen. Barack Obama's economic plans, for example, but also in recent comments from President Bush that U.S. bank takeovers were "not intended to take over the free market, but to preserve it.""
The policy implications of this ideological shift remain unclear, but could go on display in mid-November when world leaders will meet to discuss the future of international market regulation. Some analysts say the summit, convened jointly by Bush and Sarkozy, could produce a framework for managing the future order of financial and commercial relations akin to the 1944 Bretton Woods Agreements, which many economists now criticize as obsolete.
Some economists are also ringing a note of caution about systemic changes. In a new editorial, the Economist ""hopes profoundly"" that a move toward regulation takes into consideration the beneficial aspects of capitalism and the fact that no other system has proven better at creating wealth and preventing poverty--points made by Keynes himself. Regulators should work to manage the system better, the piece says, but not to scuttle it altogether. Doing this won't be easy. Martin Wolf, the FT's chief economics commentator, says that the effort to preserve liberalized capital markets faces a major intellectual challenge, given the severity of the crisis. ""We're going to have to do a very credible job of explaining that we're going to do better in the future, managing the global adjustment on macroeconomics,"" Wolf says. ""It's going to be very hard."... I know...I know....sadly the forces of progress and socialism had their most powerful wrestler in their tag team taken out of existence by the other side, so despite all the arguments in favour of its demise, capitalism is likely to survive even this crisis, and the best we can hope for is that the forces of democracy will be able to wrest a 'new deal' style approach to this slump, and it looks like its going to be one humdinger of a slump.

Barclays ...Amongst Others to End Up in the Dock??

Barclays is being sued in a New York court over claims it moved loss-making investments from its own accounts to those held by outside investors.

The losses to investors are alleged to total hundreds of millions of dollars.

The case is being brought by a French company which claims it was told these investments - known as "SIV-lites" - were super-safe and offered a AAA or AA rating.

But Barclays denies the allegations and told BBC File On 4, that the action has "no merit."

The case against Barclays centres on two complex investments - one called Golden Key and the other called Mainsail - which the bank created to sell to outside investors.

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The company alleges that in the summer of 2007, at a time when the sub-prime crisis was growing, Barclays arranged for hundreds of millions of dollars worth of mortgage-based securities to be transferred from its own accounts to the two SIV-lites.

The French company's US lawyer Geoffrey C Jarvis said that Barclays should have known in June 2007 that such mortgage-based investments were "substantially impaired."

He added: "I can't say what Barclays knew because they haven't told me but if they didn't know they were certainly reckless in not knowing."

Barclays refused to discuss the case with the BBC but in a short statement said: "This action has no merit and we will contest it vigorously."

listen to the fascinating programme here