Top 12 at 12: When property investment goes horribly wrong; Dairy debt pain; Dilbert

Here's my top 12 links from around the Internet at 12pm. I welcome your additions in the comments below or please send suggestions for tomorrow's Top 10 at 10 to bernard.hickey@interest.co.nz We try to be useful... 1. Sometimes the lure of property investment is just too strong. A payroll manager in Australia with electrical goods retailer Clive Peeters has been caught having stolen A$20 million from the company to buy investment properties and a few cars. Here's the story in the Sydney Morning Herald.

Sonya Causer, 38, from Lilydale, spent the equivalent of a year's company earnings secretly compiling an impressive portfolio, including nine properties in Melbourne's inner east, 28 in the outer eastern suburbs, and two in Mildura. She bought a house in Balwyn North worth $995,000 and one in Surrey Hills worth $925,000. In total she bought 43 properties, including five in suburban Brisbane and one in Tasmania. Her 18-month spree from the listed retailer - which has 49 stores and 1300 staff - was worth more than the pre-tax earnings of $17.3 million in the 2008 financial year. She also spent $166,500 on three cars, including a luxury $105,000 Audi four-wheel-drive, a Holden station wagon and a Toyota LandCruiser. But last week her double life came crashing down, when she was confronted by managing director Greg Smith and she admitted to using a loophole in the company's internet banking with National Australia Bank to steal from the company.

2. Fran O'Sullivan at NZHerald has an interesting interview with Bill English on how New Zealand's infrastructure spending is way behind Australian and why public private partnerships may be the way to go. Here's the PDF link to the Herald's supplement on 'Bridging to the infrastructure deficit'

"They understand the rules of the game over there," he says in frank admiration of the way Australian Governments have enlisted their private sectors to collaborate on projects. "In Australia they have moved from projects dealing with roads, rail and telecommunications right through the social areas building prisons, schools, health facilities, defence HQs and water - you name it." His advisers point to the economic benefits of getting infrastructure built to the right standards on time and to cost. And the deep industry strata including construction firms, lawyers, accountants and bankers who understand how to use innovative partnerships to "get stuff built".

3. RadioNZ has reported that "Cabinet papers obtained by Radio New Zealand show top Government officials are pushing for a radical revamp of the tax system." Hear hear. Here's the link to the audio. 4. Helen Murdoch at ThePress has a piece on the procession of debt-laden dairy farmers in Canterbury and Southland that could go to the wall in the next year.

PricewaterhouseCoopers partner Roger Wilson, of Hamilton, said falling land values, reduced dairy payouts, and increased costs had caused financial pain on many farms. "Farm asset values have dropped by 30 to 40 per cent and there are a lot of stressed farmers running significant cash deficits this year," he said. Most farmers had been caught by the savagery of the decline in world commodity prices. Wilson said farm equity partnerships in Canterbury and Southland, where people had often borrowed against assets to invest, were particularly vulnerable. Some investments were totally loan-based, he said. "It's been a white goldrush; unfortunately the late arrivals are particularly vulnerable." Wilson feared an "avalanche" of dairy farm foreclosures next autumn if farmers did not sell assets and reduce costs, or if payouts did not improve.

5. This shouldn't be too much of a surprise to our readers, but some research from Goldman 'Vampire Squid' SachsJBWere has found that New Zealanders are investing less directly in the stock market. More surprisingly and worringly, foreign investors are also deserting the NZX.

Goldman Sachs economist Bernard Doyle said the flight by retail investors was not a surprise given the attraction of offshore markets when the kiwi dollar was at very high levels and the battering shares took last year and for the first part of this year. Between 2007 and this year the percentage of retail investors fell from 28.4 per cent to 21.6 per cent. "There are some structural things going on under the bonnet there."

6. This is a worry for Australia and for us. China's industrial output growth in July was slower than expected and Chinese credit growth slumped 77% from a month earlier, the FT.com reported.

Senior Chinese leaders have repeatedly emphasised their commitment in recent weeks to a "moderately loose" monetary policy but fears of bubbles forming in the property andstock markets prompted the central bank and banking regulators to order banks to slow lending last month. As a result, new loans in July slowed to Rmb356bn ($52bn), the lowest since last October and down sharply from Rmb1,530bn in June, according to figures released by the central bank on Tuesday. This policy of "'backdoor tightening' will be replaced with effective tightening measures authorised by top policy makers when the growth recovery is further confirmed, most likely in the fourth quarter of 2009," according to Goldman Sachs economists Helen Qiao and Yu Song. "We also expect more meaningful tightening measures to be adopted in 2010, after more signs of overheating and inflationary pressures emerge."

7. The venality of the American political system never ceases to amaze me. Just a few weeks after congressional leaders were skewering car company bosses for flying to Washington by corporate jet, the US Congress tried to push through purchase orders for 4 Gulfstream and 737 jets worth US$330 million to ferry the politicians around the globe. A public storm of protest killed the idea. Time.com has the story. HT Reuel Newman via email.

The hidden tug-of-war over these airplanes revealed just how perk-conscious lawmakers can be. In March, the nonprofit group Judicial Watch obtained e-mails from the Pentagon (under the Freedom of Information Act) written by aides to Pelosi seeking military airplanes. "It is my understanding there are no G-5s available for the House during the Memorial Day recess," one May 2007 message said. "This is totally unacceptable." The Pentagon explained the planes were already booked by "White House military office taskings, the VP, Cabinet officers and multiple other executive users."

8. Here's a story from the Wall St Journal of how the conspicuous consumption is back with a vengeance on Wall St less than a year after the financial world nearly imploded. The new poster boy for living large is Stephen Schonfeld.

He says he made $200 million last year and just moved into a mansion near the Long Island Sound with its own nine-hole golf course. He has spent $90 million on the home, he says, and is currently erecting a poolside cabana designed to look like the Cove Atlantis resort in the Bahamas. "I don't think it's putting anyone's face in it," he said recently while showing a visitor around the property. "I live in this house."

9.  For completeness, here's a Bloomberg story showing that almost a third of US homeowners with mortgages are likely to be in negative equity by midway through next year. 10. Here's a piece from BreakingViews at TheTelegraph on how excess liquidity from money-printing banks is fueling a new string of bubbles. It's called the easy money thesis.

Many countries have suffered their worst GDP declines in generations. Consumer prices are still falling in the US, Japan, the eurozone and China. But stock prices are once again hitting crisis highs, the oil price has almost doubled, distressed debt is selling at 90pc of face value and credit spreads are steadily narrowing. This financial mini-boom cohabits oddly with deflation. Money might solve this puzzle. More precisely, in their anti-deflationary fervour, central banks may be creating more money than depressed economies require. The surplus creates "excess liquidity" - which may be feeding a new series of stock, commodity, property and bond bubbles. How might this end? With global demand still weak, unemployment rising and global industrial over-capacity a problem, there are strong forces to keep a lid on consumer price inflation. Central banks aren't about to raise interest rates or reverse their additional money creating efforts. That policy may not be right. Policy easing may need to be reversed some time before consumer price inflation rises. Excess liquidity could lead further asset-price inflation - and to multiplying financial bubbles. When they burst, the real impact on consumer finances, investors and banks may again be heavy, bringing renewed downward pressure on the global economy.

11. Peter Boockvar at the Big Picture says the reasonably strong demand for the 3 year Treasury auction overnight may be due to foreign central banks (China) coming down the curve to shorten their exposure to the bankrupt US economy. What happens when the US wants to roll over in 3 years time? Or what happens when it auctions 30 year debt.

With many, particularly the Chinese, shifting to the shorter end of the curve from the longer end, today was an easy sale. The tough part though comes tomorrow when the 10 yr benchmark note auction takes place with the 30 yr following on Thursday. I must say that our country's finances are in such a state of affairs that the biggest economy in the world has to now cross its fingers right before the published results of debt auctions.

12. The good old Baltic Dry Index had its worst week since October because Chinese demand is slowing, The Telegraph points out.

The index fell from 3,350 to 2,772 this week "“ a fall of 17.2pc - as imports of iron ore and coal slowed down. The index is now 35pc lower than its 2009 high, hit on June 3. Earlier this week Ian Ashby, head of iron ore at miner BHP Billiton, said at the Diggers & Dealers conference in Australia that Chinese restocking of iron ore was at an end. Mr Ashby said that supplies at the country's ports were enough to sustain a month of consumption.