Opinion

Felix Salmon

Will other banks go the way of MF Global?

Felix Salmon
Oct 27, 2011 20:21 UTC

John Carney wonders whether MF Global might turn out to be simply the first of many banks to go bust in a European financial crisis.

All the very serious people on Wall Street keep saying that the problems at MF Global are “isolated” or “unique.” It’s not a bellwether or a canary in the coal mine, they say.

I’m not so sure. There were lots of firms that were supposedly not canaries in coal mines in 2007. Heck, even the entire subprime market was supposedly not a canary in the coal mine for the broader housing market.

There’s a lot of sense here. Banks are reliant on trust — it doesn’t matter whether or not they are insolvent. All that matters is whether the market thinks that they might be insolvent. In fact, all that really matters is whether market participants think that other market participants might think that they might be insolvent. Whenever you think there’s a risk of a run to the exits, the smart thing to do is to run to the exits before everybody else does. And runs kill banks.

Which is one reason why Morgan Stanley, for instance, went to the length of carefully spelling out its European exposures in its third quarter financial supplement (see page 13 of the supplement, 14 of the PDF).

If you take its numbers at face value — and Morgan Stanley does mention that they’re unaudited — then the bank has $287 million of exposure to Greece, $1.8 billion of exposure to Italy, and negative exposure to Portugal and France, thanks to all the hedges they’ve put on. They’re fine!

But of course, if Italy and/or France suffered a major financial crisis, there is no chance at all that US banks — including Morgan Stanley — could emerge unscathed. It’s very worrying to me that Morgan Stanley is putting out these kind of numbers — it implies that people at the bank actually believe that they have no exposure to France. While the real exposure is something that can’t be hedged away with a bit of counterparty-hedging and some judiciously-chosen credit default swaps.

To give one example of how country exposure is incredibly hard to calculate, check out this article from December 2001, when Argentina was imploding.

Citigroup may also have to face losses in Argentina, where Citibank has been active since 1918. The country is nearly bankrupt and has frozen assets at most of its big banks to halt a run on deposits. Though Argentina is an integral part of Citigroup’s Latin American strategy, it contributed just 2% of the company’s overall earnings at the end of the second quarter.

In an absolute worst-case scenario — one where the peso is devalued and the country’s government debt defaults — some analysts estimate Citigroup would lose just $200 million. “The fact that emerging markets are volatile is not a new idea for us,” says CFO Thomson. In fact, Citigroup could ultimately gain business, he says: “In volatile times, customers often leave their local banks and come to Citigroup.”

Citigroup’s losses in Argentina would end up somewhere north of $2 billion, not including a huge hit to the bank’s reputation in the country and across the region. (Depositors, as Thomson said, had fled to Citigroup as a flight-to-safety trade, but all their dollars at Citibank got converted to pesos all the same, and Citigroup refused to make them whole, saying that Citibank Argentina was a subsidiary for which it had no particular responsibility.)

MF Global is, narrowly, just a bank which took on too much risk and too much leverage in the fixed-income space, and which imploded on the watch of a former Goldman Sachs executive who turned out to be much less capable at managing risk than Goldman Sachs is. It’s not the first bank to fit that description: the same can be said of Citigroup (Robert Rubin), Merrill Lynch (John Thain), and Wachovia (Bob Steel).

But more broadly, dominoes are falling right now, as a result of European sovereign-debt exposures. Dexia was first; MF Global is second. No one can say with any certainty how many more there will be. But once the cascade has started, it can be very hard to stop.

COMMENT

This might not be relevant to the article above or the discussion. I was just curious if I could have a copy of th paper “When Countries Go Bust”. I received an email that you will be giving a presentation at Columbia this month an I will not be able to attend but I would love to read the paper the presentation is based on. Thank you very much in advanced.

Posted by eddyfi88 | Report as abusive

Chart of the day, Euro bailout edition

Felix Salmon
Oct 27, 2011 15:28 UTC

RTR2T9QC.jpg

This, ladies and gentlemen, is how the sausage gets made — it’s yesterday’s eurozone rescue plan, as presented by an unidentified adviser to one of the European Union governments involved in the negotiations.

Frankly, there’s lots of it I don’t understand. (Although the little map of the PIIGS in the top-left-hand corner is clear, and quite adorable.) At the top you have the €440 billion EFSF, with €150 billion already having been spent on those PIIGS. The remaining €250 billion (let’s not worry about these numbers not adding up precisely) gets leveraged, somehow, into €1 trillion — with a special-purpose vehicle in there somewhere for private sector investors to put money into. (The private sector, I’m pretty sure, is represented by that big “PS” box.) The leveraged EFSF then spends its money on the PIIGS as well, with some of that money going to recapitalize banks in those countries.

Meanwhile, the IMF and the Eurozone are also helping out the PIIGS. And Europe’s banks are being recapitalized by June 30, 2012, which will cost €106 billion; it seems that some of that money is coming from the private sector and some of it is coming from the leveraged EFSF. The IMF and the Eurozone are also helping to partially guarantee the new Greek bonds which will go to the banks tendering their old Greek bonds. (I think the tender of the old bonds is that “Greek bonds 100%” line, but I’m unclear on that.)

At the bottom of the sheet we have the sequencing. First comes Greece, which gets its debt written down by the banks, and gets a new loan from the IMF and the Eurozone. Then comes the bank recapitalization, which has to be done by June. Third up are the non-Greek PIIGS. And finally there’s that wonderful question mark at the end.

The main thing which worries me about this plan is the sequencing: it seems that everything else is contingent on Greece getting its writedown first. And I’m highly skeptical that a 50% writedown from the banks is practicable or likely any time soon. I know the IIF has agreed in principle, but that doesn’t mean the banks are actually going to tender their bonds in practice. And if they don’t, does that mean the whole deal falls apart? We need a lot more details on this, I think. Or, maybe, we don’t. Trying to extract details could mean forcing players to confront the fact that they all think they’ve agreed to something slightly different. And that might not be a good idea right now.

COMMENT

1) Write down 50% of bank-held Greece Debt
2) ?????????????
3) Problem Solved!

Posted by scotta | Report as abusive

How to blog, Dealbreaker edition

Felix Salmon
Oct 27, 2011 14:46 UTC

If you want a masterclass in old-school econoblogging, check out this fantastic post from Dealbreaker’s Matt Levine.

Econoblogging, at its best, is conversational, wonky, funny, illuminating, and full of links to things you otherwise wouldn’t have noticed; Matt’s post is all of these things. And it’s even a little bit frisky: the post acts as a comprehensive dismantling of Greg Mankiw’s disingenuous claim that the rich are getting poorer. (Yes, that really is Mankiw’s headline.)

Matt attacks the claim with Dealbreaker-strength snark, of course.

With a lot of attention on the CBO report finding that out that income inequality has increased dramatically in the past 30 years, you might have a momentary lapse and think something like “say, maybe those protesters are onto something.” Resist the urge!

But there’s real substance in the post, too. Matt reads the paper that Mankiw’s citing, fairly describes its conclusions — and then comes up with his own, rather more compelling, theory as to what’s going on. And he manages to credibly tie the whole thing to Mitt Romney, too, giving him all the excuse he needs to run that picture again.

Along the way, Matt links to the CBO (of course, but try finding that link in your daily newspaper), Deal Journal (twice), ZeroHedge, New York Magazine, the Economist, CNBC, and an HBS paper. Most prominently, he both links to and quotes from a decidedly underappreciated blog called The Slack Wire, which will surely get lots of new followers from this post.

He does the whole thing with great elegance, explaining complex ideas in very plain English, in an approachable manner which never talks down to the reader. And he’s judicious, too. This is as good a one-sentence take on the evolution of the 1% over the past 30 years as you’re likely to see:

If you believe – whatever your political take on it – that in the early 1980s the U.S. shifted from a tradition-driven economy where the working rich managed their firms for plodding stability (and were paid with a fixed and comfortable salary) and the idle rich invested in Treasuries, to a shareholder-value-driven economy where the working rich managed their firms for quarterly earnings target (and were paid with options and incentive comp) and the idle rich invested in hedge funds, then that would explain the rise in volatility: the rich went from being basically creditors on the economy to being shareholders.

Matt’s the perfect complement to Bess Levin at Dealbreaker: it took them an incredibly long time to find him, but they really got it right here. I just hope he doesn’t get poached by some deep-pocketed mainstream news organization which will end up stifling the very thing he’s best at.

COMMENT

Ritholtz’s offer was to get paid less to work for a boring blog desperate for insight and relevance. I would rebrand it thebigbarry.com and have more photos.

Posted by Marpha | Report as abusive

Europe’s half-baked deal

Felix Salmon
Oct 27, 2011 12:54 UTC

Here’s one upside to the fact that Europe finds it almost impossible to agree on anything these days: even a half-baked deal like the one we got last night managed to significantly exceed expectations, making it seem that it’s being ratified by market action today.

There are three main parts to the deal. The first is an agreement, in principle, to leverage the European Financial Stability Facility by a factor of about four. Good idea! Except, the EFSF can’t just borrow $750 billion from its friendly prime broker. So where’s the extra money going to come from? There are a few ideas; foremost among them are “risk insurance” (which would be intended to raise the rest of the money from the private sector), and borrowing the money from Uncle Jintao in Beijing. At the moment it’s all rather inchoate. One place the money’s not coming from is the ECB, which found it hard enough just to keep on buying bonds from Spain and Italy.

The second main part of the deal is the bank recapitalization, where 70 banks — primarily in Greece and Spain — are going to be given €106 billion in order to bring their core capital up to 9%. This is a move in the right direction, but it’s also pretty marginal: the big French banks, for instance, aren’t going to need any more money at all, and in fact almost no bank you’ve actually heard of is covered by this. It’s mainly a way of forcing bailout funds to be injected straight into the banking sector.

Finally, there’s the Greek default, which has now been upgraded from a 21% haircut to a 50% haircut. This is the headline-grabbing announcement, but don’t hold your breath. The deal was negotiated by the IIF, a membership organization which represents banks but can’t commit them to anything. While the IIF’s head, Charles Dallara, walks around feeling important, his member banks are ultimately going to have to make their own decisions on whether they’re going to tender their holdings of Greek debt into a new exchange, and if so how much of their debt they will tender. What are the chances that all IIF members are going to tender all their bonds? Exactly zero.

Which is why, on one level, the ISDA statement that this still isn’t a Greek default, for CDS purposes, makes some sense. I’d probably make the same decision myself. But on the other hand, this does make a farce of the idea that credit default swaps constitute default protection, at least in the sovereign arena. If they don’t protect you against this, what earthly use are they?

And although banks — if this plan goes through — will write down their Greek-debt holdings by 50%, that does not mean Greece itself will see the value of its private-sector liabilities shrink by anything close to 50%. Neil Unmack explains:

Assume, very generously, that private creditors holding 200 billion euros of bonds sign up for the deal. That’s about 90 percent of Greece’s outstanding private debt, excluding those bonds held by the European Central Bank and short-term treasury bills. A 50 percent haircut would reduce Greece’s total debt by 100 billion euros, to around 256 billion euros.

However, in order to sweeten the deal, Greece will also give bondholders 30 billion euros of risk-free collateral to underpin the value of their new bonds. Greece will have to borrow that amount from Europe’s bailout fund. That lifts its total debt to 286 billion euros, or about 130 percent of GDP – higher than in 2009 when the country’s debt crisis first erupted.

In other words, the new Greek bonds won’t be pure Greek debt: there will be a bunch of risk-free pan-European debt in there, too. And Greece will ultimately be on the hook for that new debt.

This deal, then, is the toughest kick that the can has yet been dealt in its bumpy journey down the road. That’s probably a good thing. But the euro crisis is very, very far from being resolved. And even this deal could — indeed, probably will — fall apart at some point. Unless, that is, you think that Europe’s banks are quietly going to accept a 50% haircut when they couldn’t even unify to accept 21%.

COMMENT

They should borrow the $750 billion from French banks. This would reduce the transfers involved, not to mention the ultimate counterparty risk.

Posted by dWj | Report as abusive

Counterparties

Nick Rizzo
Oct 26, 2011 23:03 UTC

Merkel raised the specter of European war, won a key EU rescue fund Bundestag vote — Telegraph

The big hole in the EU rescue plan: economic growth — BBC

“The Atlas of Economic Complexity” boils down to: know how to make things, stay relatively poor — WSJ Real Time Economics

Six things we’ve actually learned from three years of financial crisis — The New Yorker

“The Corporate Governance of Benedictine Abbeys” — JSTOR

The other shoe finally drops for Raj Gupta — DealBook

The SEC’s yardstick seems to be: “Who wrote the stupidest email?” — ProPublica

Ruth Madoff says she and Bernie attempted suicide — CBS News

BofA’s Moynihan: “You ought to think a little about that before you start yelling us.” Oh snap — Bloomberg

Elizabeth Warren says she “created much of the intellectual foundation” for Occupy Wall Street — The Daily Beast

And Gawker takes the high-road with a sketchy marketer looking to pay for Google-boosting links — Gawker

There are many more links (with amusing category tags) at Counterparties.com

COMMENT

The Warren remarks are being taken out of context, as part of the right’s attempt to paint Warren as some kind of dangerous radical who is both embracing a “dangerous” protest movement, and making overblown claims of her own importance. In reality, of course, she’s a moderate, thoughtful, methodical policy wonk. Furthermore, it is unambiguously true that in terms of academic research on income inequality, the work she did over the last couple of decades was groundbreaking. You can pretty much round up her, Bartels, Mishel, and the Piketty-Saez team, and have the top tier of people doing research on this topic. I suppose she could’ve phrased it a little less directly, but what she said is related to what’s been on the minds of a lot of progressive activists in relation to OWS — that this topic has been important for a long time, and there’ve been policies offered to deal with it that never got traction. “We’re thrilled you’re here; now could you maybe help us actually win some elections so we can enact policies that fix the problems you’re pointing out?” (And, muttered under the breath, “Where the hell were you guys in ’10, or ’04 and ’00 for that matter?” But, oh well, it’s never too late to get engaged. Or at least, not until the GOP imposes a new poll tax, to ensure that the riff-raff don’t mess up their libertarian utopia.)

Here’s the context for the quote, courtesy of Dave Weigel at Slate, who got it from the interviewer, Sam Jacobs:

JACOBS: I’m curious: Is there something that is keeping you away from this movement? Is there a reason why you haven’t embraced it?

WARREN: Look, everybody has to follow the law. That’s the starting point. I’ve been fighting this fight for years and years now. As I see it, this is about two central points: one, this is about the lack of accountability. That Wall Street has not been held accountable for how they broke the economy. The second is a values question, a fundamental fairness around the way that markets have been distorted and families have been hurt. I’m still fighting that fight. I’m just fighting it from this angle. I’m fighting it from … I want to fight it from the floor of the United States Senate. I think that is a place to make this difference.

JACOBS: Is showing solidarity with them going to get in the way of that?

WARREN: It’s not a question of solidarity. I just don’t think that’s the right way to say it. I support what they do. I want to say this in a way that doesn’t sound puffy. I created much of the intellectual foundation for what they do. That’s the right thing. There has to be multiple ways for people to get involved and take back our country. The fight that I’m fighting now is one that is directed towards the United State Senate. That’s just how I see it.

Posted by Auros | Report as abusive

Self-promoter of the day: Keith McCullough

Felix Salmon
Oct 26, 2011 22:03 UTC

Here’s the most illuminating part of the Steve Liesman/Keith McCullough twitterfight:

KeithMcCulloughKeith McCullough
steveliesmansteve liesman
in reply to @steveliesman

@steveliesman how does an objective journalist like you not use the most accurate forecasting CNBC Contributor as a source in 2011 anyway?
Oct 26 via TweetDeckFavoriteRetweetReply

Basically, McCullough started the fight with a weird tweet about central planning. Liesman hit back implying that McCullough’s real problem was that he felt he wasn’t appearing on CNBC enough. And then McCollough replied, saying essentially that Liesman was right!

As a general rule, it’s not a good idea to take investment advice from people who appear on CNBC a lot. CNBC Is a marketing platform: fund managers love being on there because it increases their visibility and the chances that people will want to invest with them. Think of it as a dumbed-down, glossy version of Seeking Alpha. But do you really need to be invested with the kind of people who are trolling for customers by appearing on CNBC? I don’t think so.

It gets much worse, however, if a one of these people actually complains, in public, about not appearing on CNBC enough, then you know he has lost all sense of proportion. You have a job, mate. Going on the telly is a distraction from that job. It cannot help the people who are already taking your advice. You are abandoning them in order to be able to see your face on a silenced television screen. You are a narcissist.

And if anybody reaches the point at which they call themselves a “CNBC Contributor”, capitalization and all, despite the fact that they’re not even paid by CNBC, then that’s the point at which you run, don’t walk, in the other direction.

In general, a majority of fund managers and market pundits spend their time doing their jobs, while a minority are self-promoters who are desperate to get on TV. Once you’ve identified someone as a member of the latter group, the question of whether or not to invest with him or follow his advice tends to answer itself very quickly. With, perhaps, a single exception in the case of Warren Buffett.

COMMENT

How can this guy possibly stay in business? Ever since he started showing up on CNBC, he’s been aggressively short when the market is rallying and then finally jumps on board
right when we’re near a top.
He’s one of those guys who thinks that if he talks loud and with confidence, people will think he knows what he’s talking about.
It’s not enough to sound smart, you actually have to be smart. I’m not surprised he’s 100% cash. It’s because he doesn’t know what else to do.
But I would like to thank him for signaling the last 2 tops for me,
keep up the good work!

Posted by jassy12 | Report as abusive

The NYT’s silly trademark spat

Felix Salmon
Oct 26, 2011 20:53 UTC

Here’s what I don’t get about the NYT’s silly nastygram targeting HuffPo’s new Parentlode blog. It ends like this:

If I have not received a response to these demands within three (3) business days of receipt of this letter, we will have no choice but to pursue all available legal remedies.

This, it seems, puts the NYT, and its legal office, in something of a bind. It’s extremely unlikely that they’re going to get a response to their demands within three (3) business days, or, frankly, ever. Which means that the NYT will have two choices. Either it does nothing — and implicitly admit that its nastygrams are all bark and no bite. Or else it launches a spectacularly pointless and expensive trademark-infringement lawsuit against a blog with a really stupid name, on the grounds that the stupid name (“Parentlode”) is designed “to create an association in the minds of readers” with the NYT’s old Motherlode blog.

Of course the Parentlode name is designed to create that association. As is the rather more germane fact that Parentlode is being written by Lisa Belkin, who founded Motherlode.

Blog names do, of course, have a tendency to follow their authors around. Adam Clark Estes makes a very good point:

Learning the digital ropes, building a devoted audience, tending your personal brand: these are all the sorts of things that journalists are supposed to be doing to adapt to the new news climate. It’s exactly what Andrew Sullivan, who had moved his Daily Dish brand from Time to The Atlantic to The Daily Beast, has done. So too Mickey Kaus who’s ported his Kausfiles moniker from Slate to Newsweek and now The Daily Caller. If Belkin made a mistake it was not initially insisting that she could take “Motherlode” with her if she ever left The Times, as the Freakonomics guys did when they moved their branded blog from The Times to their own site.

We’ve even done it here at Reuters: Matt Goldstein has a blog called Unstructured Finance, which is the same as the name of his old blog at Businessweek; I’m quite sure we’re not going to get sued by Bloomberg as a result.

The NYT lawsuit, then, is pure peevishness — and I don’t understand why that’s an attitude they’re interested in communicating to the world. What’s more, it’s a clear sign that the NYT is still very uncomfortable with helping to build personal brands. Here’s a bit more of the C&D:

Amazingly, Ms. Belkin explicitly draws attention to the connection to the NYTimes.com blog in her first posting today and encourages the false impression that the HuffPo blog is a continuation of the Motherlode blog, albeit with a new name.

False impression? I’d say that’s a true impression. If a blogger moves her blog from one publication to another, then it’s reasonable to consider the new blog a continuation of the old one. This blog, for instance, is very much a continuation of my old blog at Portfolio.com. It features a bunch of cross-posts from when I was at Portfolio, and Portfolio ran a bunch of cross-posts from here after I moved. Even as they hired Ryan Avent to continue to blog at my old home over there.

Obviously, the NYT and HuffPo aren’t nearly as collegial as Portfolio and Reuters were. But there’s a deeper difference: Portfolio was owned by Conde Nast, which is deeply invested in creating individual brands and turning its writers and bloggers into stars. Conde understands that if you want to keep and attract stars, you do that by treating them very well. The NYT, by contrast, seems to think that it’s a good idea to punish its erstwhile blog stars by threatening their new employer with lawsuits. It’s a strategy which can’t help but damage the NYT’s reputation as a great home for writers. Which is yet another reason why it’s so stupid.

COMMENT

If the C&D combined with the fact that it’s a really stupid name add up to enough incentive for them to change it, then it will have been for the better, anyway.

Posted by dWj | Report as abusive

Market inefficiency of the day, Irish bank edition

Felix Salmon
Oct 26, 2011 19:01 UTC

aib.tiff

You won’t be surprised to hear that shareholders in Allied Irish Banks have not done very well for themselves in the past five years. It did go bust, after all, and had to be nationalized; the share-price chart is above. But recently, as part of the recapitalization of the bank, the number of shares outstanding rose dramatically. Here’s the announcement, which doesn’t quite spell things out:

The Capital Raising will comprise an equity placing (the “Placing”) of ordinary share capital of €5 billion to the NPRFC and an issue of up to €1.6 billion of contingent capital convertible notes (the “Contingent Capital Notes Issue”) to the Minister. The Placing will comprise an issue of new Ordinary Shares for cash at a price of €0.01 per share.

If you do the math, you can see that injecting €5 billion of capital at €0.01 per share means that 500 billion new shares were created. And ever since those shares were created, if you multiply the shares outstanding by the share price, you can see that technically the market capitalization of AIB is somewhere north of €30 billion! Here’s the same stock, only this time charting market cap rather than share price:

aib.png

Even when a bank has been nationalized, there are good reasons for the shares to continue to be traded. For one thing, it’s helpful when you’re handing out equity to senior management; for another, it’s very useful if and when the time comes to try to privatize the bank and take it off the government’s hands. So at some point there’s going to have to be a reverse stock split, with the shares trading for some sensible amount.

But right now, the shares are genuinely trading at somewhere over €0.06 a piece — and indeed have risen in value quite dramatically over the past three weeks. I have no idea what the mechanism is here, or who’s buying these shares, but if you want proof that markets aren’t always efficient price-discovery mechanisms, this has got to be Exhibit A. It would help of course if these shares could be shorted, but that still doesn’t explain why people are buying at these levels.

(Thanks very much to Patrick Brun for the tip and the data.)

COMMENT

I would avoid making statements about market efficiency when the float is extremely small (0.6%), trading volume is extremely small (€200k worth of shares today), and the stock can’t be borrowed and shorted.

Posted by alea | Report as abusive

I am the 99%

Felix Salmon
Oct 26, 2011 16:37 UTC

percent.tiff

The latest CBO report on income trends says nothing particularly surprising, although it does underline quite emphatically what we already knew about the 99% and the 1%. In particular, the key message, both in charts and text, is all about the 1% and how they’ve torn away from the rest of the population in the past 30 years.

And in the wake of the 99% getting tear-gassed in Oakland by their own municipal government, I’m going to get personal for a minute here: I am the 99%. I have an absolutely wonderful life in my favorite city in the world, protected by a large and prosperous centuries-old democracy. I have enough money to eat and to travel just about anywhere I want. My home is filled with fabulous art and features a small collection of equally fabulous wine; I suspect it might even be worth more than I paid for it. I love my job, which pays extremely well, and affords me a huge degree of professional freedom. I have the kind of transferable skills which are in demand by multiple potential employers. I get to wonk out with some of the most interesting people in the world, and I also get to ignore the bores. I have a gorgeous wife, we’re both in good health, and we’re blessed with wonderful friends. In short, I have the kind of life which would be the envy of well over 99% of anybody who’s ever lived, and well over 99% of anybody alive today.

And yet — I’m still in the (upper quintile of the) 99%, and if you boil things down to just their income and wealth numbers, the 1% is as far away from me as I am from a struggling working family with an onerous mortgage and a highly uncertain employment outlook. And there’s no need for them to shower themselves with that kind of money. From me on out, it’s pure avarice. Which is human, and natural, and probably even helps in terms of economic growth. But given the amount of misery and poverty in America, it’s simply unconscionable that I and the people earning vastly more than me — including all of the 1% — are getting such an enormous share of the income and wealth so desperately needed elsewhere.

All of which is to say that my taxes are too low. If my taxes went up and the money was used to reduce poverty and unemployment in America, my standard of living would still be glorious — and millions of lives would be improved. And as for the 1%, their taxes could double and they would still be fabulously well off. I’m not proposing that as a policy solution. But I am trying to put things in perspective here. I’m not in the 1%, and I can and should be giving back much more to the society which is supporting me and making my lifestyle possible. The people who are in the 1% are the most fortunate of the fortunate. The least they can do is pay as much in taxes as, say, I do.

COMMENT

We have observed the fall of communist economic system in Rusia. Now capitalist system is shacking all over the world, because this system disobey economic justice.
China with communist economic system show it can stand in more competitive world, but how long ?
The fall of communist economic system cause by its people that can not stand its economic system. If capitalist system also fall, its also because its people can not stand the system, which is un justice system of economics, where most of the nation wealth embrace by aview people.
So let us together find a new system of economic which is more human, more justice, where all the wealth distribute among most of our people.

Posted by OKTA | Report as abusive
  •