Tuesday's Top 10 with NZ Mint: Even Mark Zuckerberg is borrowing to buy a house; Obama tells the 1% the American dream is a myth; The tyranny of the hoarders; 'The nail ladies just don't understand'; Dilbert

Here's my Top 10 links from around the Internet at 10.30 am today in association with NZ Mint.

We welcome your additions in the comments below or via email to bernard.hickey@interest.co.nz.

See all previous Top 10s here.

My must read today is #8 on the return of Standard Oil style monopolies, duopolies and collusive corporate behaviour in US corporate life. It's as if we're back in the period from 1890 to 1930.

1. Even (and only) Zuckerberg is borrowing - Here's what's wrong with the world.

Mark Zuckerberg, the founder and billionaire controlling shareholder of Facebook, has borrowed US$5.95 million at 1.05% for 30 years to buy a house in Palo Alto in California, Bloomberg reports.

Quite sensibly, he has borrowed the money because he can and it makes economic sense.

The interest rate is below the inflation rate.

But this story also says a lot about the problems in America.

The people who really should be borrowing to set up businesses and start families can't because either they have too much debt and/or a bad credit rating.

Or the banks are reluctant to take a risk and are hoarding the cash to slowly build up their profits and repair their balance sheets. So the only borrowing goes to the people who don't really need it to make them even richer...

While almost all lending rates have reached historical lows this year, the borrowing costs available to high-net-worth individuals are even lower if the person is willing to bear the risk of monthly interest rate adjustments, said Greg McBride, senior financial analyst with Bankrate Inc., a North Palm Beach, Florida-based firm that tracks interest rates. Large increases are unlikely anytime soon with the Federal Reserve signaling it will keep interest rates near zero for at least two years.

“When you can borrow at a rate below inflation, you’re borrowing for free,” McBride said in an e-mail. “This is the concept of using other people’s money and it preserves financial flexibility for the borrower.”

2. Scrooge McDuck and the hoarders - The archetypal image of the money bags rich person is Scrooge McDuck swimming in a pool of gold coins.

Nowadays, though, the really rich people and companies are stashing their hoards in government bonds to the extent that bond yields in some of the 'safer havens' have turned negative.

People are paying the government to look after their money, even though some of these governments have seen their credit ratings downgraded and many believe they are ultimately insolvent as populations age and growth slows.

People are that scared and so unconfident about the future they are refusing to invest in employing new people or creating new technology to boost growth. So why aren't governments borrowing at low rates to spend to boost growth back to something sustainable?

Here's BusinessInsider with a chart showing the US 10 year bond yield

What this essentially means is that there's a lot of money out there that sees no productive investments in the real world, and thus people are willing to stick it with entities that promise them a very meager return.

But it is a good reminder that the crisis is basically the exact opposite of what so many mainstream commenters say it is. It's not about governments reaching their endgame. It's about a growth-deficient world, governments being the one place that can absorb all this money.

3. Good news for the milk payout? - Bloomberg reports the massive drought in the United States is pushing up grain prices, which may be good news for dairy commodity prices.

A worst-in-a-generation drought from Indiana to Arkansas to California is damaging crops and rural economies and threatening to drive food prices to record levels. Corn for December delivery jumped 3.9 percent to $7.6875 a bushel on the Chicago Board of Trade at 11:36 a.m.

The grain has soared 52 percent since mid-June. More than three-quarters of the acres where corn is grown in the U.S. is in a drought zone. The biggest U.S. crop, worth $76.5 billion last year, corn is the main ingredient in the feed of chicken, cattle and hogs. Meat, poultry and fish prices surged 7.4 percent last year and are expected to gain as much as 4.5 percent this year as rising prices make animal feed more expensive. Soybeans have risen 21 percent since mid-June and wheat has climbed 40 percent.

4. More on the cash hoard - David Cay Johnston reports at Reuters that US corporates are also hoarding cash like there's no tomorrow, which again is reducing investment in new jobs, technology and expansion.

Given the enduring hard times, you might think that corporations have used up their cash since 2009. But real pretax corporate profits have soared, from less than $1.5 trillion in 2009 to $1.9 trillion in 2010 and almost $2 trillion in 2011, data from the federal Bureau of Economic Analysis shows.

That is nearly $1 trillion of increased profits over two years, while actual taxes paid rose less than a tenth as much, BEA reports show. Dividends, wages and capital expenditures all grew less than profits, while undistributed profits rose. The result: more cash.

Bigger profits are good news, but it would have been better news had those increased profits been put to work, not laid off in accounts paying modest interest. Hoarding corporate cash in bank accounts, Treasuries and tax-exempt bonds poses a serious threat to the economy, as Congress recognized when it enacted the corporate income tax in 1909.

5. The 1% are grumpy - Chrystia Freeland writes at Reuters that the 1% are grumpy with Barack Obama and it's not just because he wants to put up their taxes. He's threatening to tear down the very myth about equal opportunity and the rich deserving their money that America is built on. Oh dear.

This is about more than bank balances. Some of Obama’s most vehement critics in the private sector insist they are willing to pay higher taxes, if that’s what it takes to get the United States back on track. Their complaint, if you take them at their word, is instead with the president’s attitude toward them, toward their wealth and toward capitalism itself.

Their sense of insult is easy to mock: Do those testosterone-pumped Masters of the Universe really turn out to have the tender feelings of teenage girls? It is a mistake, though, to dismiss the outrage of the 1 percent just because it is so emotionally rendered. The truth is that Obama is telling a very different story about capitalism and its winners from the one Americans are accustomed to hearing, and it is no surprise that the rich don’t like it one bit.

This is more than a fight about taxes. It is a fight about whether 21st-century capitalism is working for the American middle class and who should pay to fix it. The Republicans are telling Ronald Reagan’s story of trickle-down economics – the winners in the capitalist contest are “job-creators” whose prosperity helps everyone else. The wealthier they are, the wealthier all Americans will be.

The Democrats are challenging that win-win story of American capitalism. Their contention is that the U.S. economy is failing the middle class. They argue that those at the top need to contribute “a little more” to help rebuild the American middle. Even more threateningly, they point out, as in their critique of Bain Capital, that some of the business strategies that have enriched the elite have actually hollowed out the middle.

It is this last argument that most enrages the 1 percent – and it should. Obama’s most extreme critics delight in accusing him of being socialist and sometimes communist. That charge is not just overheated, it is plain wrong. But American capitalists are right to sense a challenge from the White House, which is about more than tax rates or bruised pride. The president is arguing that what works for the top of the United States isn’t working for the middle, and that is a criticism the country’s lionized elite hasn’t heard from its leader in a very long time.

6. Just too easy - Here's the LA Times with a profile of a recent Mitt Romney fundraiser on Long Island, quoting a few of the grumpy 1%.

The line of Range Rovers, BMWs, Porsche roadsters and one gleaming cherry red Ferrari began queuing outside of Revlon Chairman Ronald Perelman's estate off Montauk Highway long before Romney arrived, as campaign aides and staffers in white polo shirts emblazoned with the logo of Perelman's property -- the Creeks -- checked off names under tight security.

A money manager in a green Jeep said it was time for Romney to "up his game and be more reactive." So far, said the donor (who would not give his name because he said it would hurt his business), Romney has had a "very timid offense."

"We've got the message," she added. "But my college kid, the baby sitters, the nails ladies -- everybody who's got the right to vote -- they don't understand what's going on. I just think if you're lower income -- one, you're not as educated, two, they don't understand how it works, they don't understand how the systems work, they don't understand the impact."

7.  Someone's gotta pay - This is the problem that is bedeviling the global economy.

Who is going to take the hit for the revaluation lower of so many assets now that it's clear growth will be lower for longer, or more importantly, lower than previous expectations. Should bank shareholders take the hit? They're first on the block whenever asset prices go pear-shaped. Then it's senior bond holders, then term depositers and then taxpayers.

In Ireland the senior bond holders got skipped (because they were European banks) and Irish taxpayers had to pay to bail out their banks. Now the same debate is happening across the Southern Europen banking systems.

The European Central Bank quietly this month said it wanted senior bond holders to pay, but politicians rejected it, fearing it would create carnage on markets.

Quite. Watch this space. My wild coffee bet is for some sort of European banking crisis in September. Could easily be wrong.

Here's Reuters with the latest thinking.

The weight of debt on Europe's banks means it is only a matter of time before euro zone governments impose losses on senior bank bondholders, analysts believe, although policymakers remain nervous about taking such a radical step.

Throughout a five-year banking crisis in Europe, euro zone governments have typically stepped in to rescue troubled banks, shielding senior bondholders from losses to keep markets and investors calm. But the costs are rising.

With the debt of fragile euro zone banks topping 5 trillion euros (3.2 trillion pounds), according to ECB statistics, and weaker governments in no position to support them further, officials, analysts and investors believe it is inevitable that bondholders will eventually have to shoulder losses on their investments.

Many say that extending losses that are typically limited to subordinated or junior debt and imposing them on senior bondholders would scare off investors, compounding banks' problems. Only Iceland and Denmark have taken that step so far.

8. Killing the competition - How the new monopolies are destroying open markets. That's the title of an article in Harpers Magazine by Barry Lynn, who has written this book: The New Monopoly Capitalism and the Economics of Destruction HT Giles via email.

Fear, in any real market, is a natural emotion. There is the fear of not making a sale, not landing a job, not winning a client. Such fear is healthy, even constructive. It prods us to polish our wares, to refine our skills, and to conjure up—every so often—a wonder.

But these days, we see a different kind of fear in the eyes of America’s entrepreneurs and professionals. It’s a fear of the arbitrary edict, of the brute exercise of power. And the origins of this fear lie precisely in the fact that many if not most Americans can no longer count on open markets for their ideas and their work. Because of the overthrow of our antimonopoly laws a generation ago, we instead find ourselves subject to the ever more autocratic whims of the individuals who run our giant business corporations.

The equation is simple. In sector after sector of our political economy, there are still many sellers: many of us. But every day, there are fewer buyers: fewer of them. Hence, they enjoy more and more liberty to dictate terms—or simply to dictate.

9. A broad review - WSJ reports US regulators have begun a broad review of the futures industry in the wake of the PFG and MF Financial scandals. They're checking there's money in the accounts. Let's see what they find.

Auditors at the NFA and CME Group Inc., CME -0.28% which oversees 45 futures commission merchants, are expected to reach out to the banks where futures firms hold their cash, seeking to obtain independent verification that the statements by the firms are accurate. (PFG's) Mr. Wasendorf was able to trip up NFA auditors by providing a fake post-office box that purported to be from U.S. Bank, which held more than $200 million of his firm's customer cash. Last week, the NFA discovered it held just $5.1 million.

 10.  Totally Stephen Colbert on unions and police unions.