<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN"> <HTML><HEAD> <META http-equiv=Content-Type content="text/html; charset=US-ASCII"> <META content="MSHTML 6.00.2900.2668" name=GENERATOR></HEAD> <BODY id=role_body style="FONT-SIZE: 10pt; COLOR: #000000; FONT-FAMILY: Arial" bottomMargin=7 leftMargin=7 topMargin=7 rightMargin=7><FONT id=role_document face=Arial color=#000000 size=2> <DIV>Doug Henwood says : "The state keeps rescuing capital when it gets in trouble - every <BR>disaster you list was bailed out either through lowered interest <BR>rates, soothing words from the central bankers, or actual state <BR>expenditures. Moral hazard may increase the risk, but until they let <BR>some big ones go down and hang the macro consequences, the Greenspan <BR>put remains unexpired."<BR>Comment: This is only partially true."Too big too fail" firms with high direct political connections such as Enron, WorldCom, Globalcrossing, Arthur Andersen, Adelphia, just to name a few have been left to "go down". Same in the UK, where old biggies such as MG, Rover and Rolls Royce are gone. Similarly in Italy/France , Fiat and huge Permalat, the European Enron,  were left to meltdown implosion.. Even big states have their rescue limits, they know that and they do not want to test them all the time just in case they run the risk of disappearing in one of those crisis.. The SLA's and LTM Capital were rescued not as individual firms but because the systemic risk involved threatened a very large portion of the whole financial industry.And of the upcoming bankruptcies, do you think GM will be rescued again? I don't think so.We have found ou lately, that the elasticity of the system to bail itself out is larger than it was previously believed. But it still has an upper boundary and it needs a lot of foreign support in the form of dollar recycling from trade surplus economies.<BR>Cristobal Senior</DIV></FONT></BODY></HTML>