CACs, Moody’s, CDS and Greece

Note: All news is breaking and subject to rapid change.

Russia Today is reporting Moody’s saying ‘”Greece has defaulted”.

the exercise of collective action clauses that Athens is applying to its bonds will force the remaining bondholders to participate.

 

Collective action clauses (CACs) basically allow a large majority of bondholders, subject to a predetermined threshold, to outvote the minority who are against a specific debt restructuring deal, the reasoning being that the general wellbeing of the holders of debt is protected. In this case, the Wall Street Journal reports, the Greek government says use of CACs will take participation in its recent restructuring deal, brokered with the EU, IMF and ECB, from 83.5% to 95.7%

The statement from Moody’s says:

According to Moody’s definitions, this exchange represents a ‘distressed exchange,’ and therefore a debt default. This is because (i) the exchange amounts to a diminished financial obligation relative to the original obligation, and (ii) the exchange has the effect of allowing Greece to avoid payment default in the future.

 

It appears to be unclear at this point what scale of credit default swaps (CDSs) we will see triggered by this move.

As Promised, Some Ramblings on Lacan for Soph

According to Lacan, we are defined by a central ‘Lack’, a void. Desire is directed towards objects which we perceive can alleviate this ‘Lack’, caused by symbolic ‘castration’. The function of ‘male gaze’, which is not to say ‘gaze which is only available to men’, but a ‘stereotypically masculine’ gaze, is to relate to ‘objet petit a’, an object of desire which reflects our Lack in some way. All desire is driven by this void, and the void of symbolic castration gives rise to pursuit of ‘Phallus’.

It is not, “I think, therefore I am”, in Lacanian understanding, it is, “I think, therefore I realise I am lacking, therefore I am”, if I may be allowed to surrender, for a moment, to soundbite explanations. The void, the ‘Lack’ within us, is what defines us. Objet petit a is that which we perceive to be able to complete us, not necessarily to fill the void (which is impossible) but to at least distract from it. This distraction is ‘fetishist fascination’.

In a dialectic understanding of ‘Gaze’, it has two distinct halves. One is the introspective gaze of self-examination, what Lacan calls the ideal-ego. This is basically analogous to one’s self-perception and also ambition – ‘Who I am’ as well as ‘What I will become’. The other side of the coin is the ego-ideal. This occurs when we imagine what others think of us, when we assume another person’s stance.The pursuit of ‘Phallus’ is related to both halves, being both something we desire and which we want other people to know we possess. Thus, we have the cliché of the boyfriend taking pleasure in knowing other men are looking at his girlfriend (but on the other hand, this enjoyment causing him anxiety).

The objet petit a is not fixed, and is not desire of the object in and of itself, but the desire of what the object signifies. The subject desires objet petit a because of what it represents in the symbolic order. Zizek says (Plague of Fantasies, 2008 edition, p152) that we can only be active through the passivity of another, that is by relegating another to the function of an object, the side-effect of such an exchange being anxiety, or angst, about what one represents, symbolically speaking, to others, ie what symbolic object others are relegating me to. This experience of other as an object is a form of fetishism, a fetish object being defined by Lacan as “the object whose fascinating presence covers up the Lack of  (symbolic) castration”.

Again turning to Zizek’s ‘Plague of Fantasies’ (p91), we find an interesting passage where he describes sexuality as “not a kind of… substantial Thing”, but in fact “nothing but the formal structure of failure, which, in principle, can contaminate any activity. When we are engaged in an activity which fails to attain its goal directly, and gets caught in a repetitive vicious cycle, this activity is automatically sexualised” (that is, experienced as a sexually-charged encounter). The example he gives is of shaking someone’s hand – if, instead of a normal handshake, one “were to squeeze his palm repeatedly for no apparent reason, this repetitive gesture would undoubtedly be experienced by him or her as sexualised in an obscene way.” The same dynamic is observed when we compare the acts of looking and staring, both essentially the same thing, but experienced very differently.

Zizek also declares that “there is no neutral symmetrical sexual exchange, undistorted by power.” All relationships, including sexual ones, are necessarily power relationships. Any attempt to define a “pure” form of sexual expression, which tends to revolve around mutual sexual attraction and sexual attraction alone, “unpolluted” by power relations (financial coercion, etc.) is doomed to fail. The concept of a pure and wondrous “love” ignoring all social constraints is laughable, and why I say I “don’t believe in love” in the way most people seem to.

Perhaps the most blatant example of this failure is the well-worn trope of the wealthy, powerful businessman paying a dominatrix to beat him, to abuse him, etc. This act is not subversive, but inherently tied up in power relations – the wealthy, powerful man pretends to surrender what he has, but retains all the actual power as he is the one paying.

Again in ‘Plague of Fantasies’, the difference between ‘masculine’ and ‘feminine’ forms of desire are outlined. The stereotypical masculine desire “is, to put it simply, that of competition/envy: ‘I want it because you want it’” (p154). This is where the male obsession with discussing attractiveness comes from – the need to establish the co-ordinates of desire using the desire of others as a benchmark. The man has to desire by relegating others to objects. A stereotypically ‘feminine’ notion of desire is different, according to Lacanian theory – women do not have to ‘objectify’ to desire, and are far less driven by competition, that is, they can say, “I want this because I want it, regardless of whether you do.”

This, in a roundabout way, brings me to the actual reason for this post, that is an answer to Soph’s experiences – that “the way I am treated by men on a near-daily basis demonstrates to me they have no empathy, no concept of feelings”, and that men seem less likely (in your experience, and perhaps stereotypically) to desire monogamy – short answer, because ‘masculine’ desire by its very nature must objectify, and once you “possess” a fetish object, it only fascinates insofar as it is desired by others or insofar as the power relation retains some ambiguity. Long-term, committed, monogamous relationships erode both these erotic aspects of desire.

A DISCLAIMER:

I am fully aware of the limitations of Lacanian psychoanalysis, and what is often perceived as sexism within it. I’m not sure where I stand on the actual empirical value of what I’ve outlined above – I was just trying to offer up an explanation to a specific observation Soph made, which I (in retrospect, rashly) promised to answer using the particular prism of Lacan/Zizek’s understandings of desire.

I also want to defend the value of analysing cliché in social theory, mainly because clichés are often vaguely correct, even if they are subject to change over time and of limited value in that sense.