Here's my Top 10 links from around the Internet at around 10 am. I welcome any additions in the comments below. Please send any suggestions for tomorrow's Top 10 at 10 to bernard.hickey@interest.co.nz I do not store wine glasses in my forehead.... 1. Alan Wood has a background piece in The Press (Stuff) on the Elephant in the Room at South Canterbury Finance: How does it manage a succession of management at least (and possibly ownership) for 82 year old finance leviathan and owner Allan Hubbard. I don't want to suggest that Mr Hubbard is an elephant...it's just a big issue.

"That [succession plan] is something we're working on and keeping Standard and Poor's on the go on that. That's ongoing, and we've said we'll have a game plan on that before Christmas," (CEO Lachie) McLeod said.

2. Brian Fallow in the NZHerald has good piece on the Australian tax reforms and how they might impact our own tax review. He picks out one gem of a proposal put to the Australian review, whereby corporate tax would be dropped altogether and replaced with taxes on dividends and capital gains. Fallow not necessarily a fan of the idea.

In addition a shift in the tax burden from corporates to individuals is less attractive when the population is as footloose as ours. New Zealand has a particularly large diaspora, with 14 per cent of the overall New Zealand-born population, and 24 per cent of the skilled, living overseas. Finally, Deloitte's data on our 200 largest companies (excluding banks) indicates the foreign-owned ones have been twice as profitable, in terms of after-tax returns on equity, as the New Zealand-owned ones over the past 10 years. That suggests deep cuts to corporate taxation would be a windfall to foreign investors.

3. This is the market everyone should be focused on at the moment. US Treasuries fell in price and rose in yield last night after a US$39 billion auction of five year bonds was received poorly, Bloomberg reported. Interestingly, central banks bid for just over a third of the bonds, down from almost two thirds last month.

The $39 billion in five-year notes yielded 2.689 percent, more than 2.635 percent median forecast of eight primary dealers surveyed by Bloomberg News. Investors also demanded higher yields on yesterday's $42 billion of two-year notes. Interest from an investor class that includes foreign central banks declined at each of the auctions from last month, when those sales attracted the most bids in at least six years. "You're starting to see customers pull back from the market," said Thomas L. di Galoma, head of U.S. rates trading at Guggenheim Capital Markets LLC, a New-York based brokerage for institutional investors. "It's been a fundamental shift in central bank buying." Today's sale was the third of four auctions totaling $115 billion that is the largest amount of so-called coupon securities sold in a single week. The government is scheduled to sell $28 billion of seven-year notes tomorrow. The auction's tail, or amount of yield in excess of where the security was trading before the sale, was 5.4 basis points, or the most on a five-year offering since February 1993, according to data from O'Donnell.

4. US Federal Reserve Chairman Ben Bernanke is doing an unusual thing for a US central banker. He is talking his head off everywhere he can. It won't be long, speculates Bloomberg's Caroline Baum, before he holds press conferences just like the Reserve Bank of New Zealand. The Fed is obviously trying to stave off an audit and soothe public nerves about the extraordinary growth of their balance sheet and powers. Bernanke may even be campaigning for reappointment. Baum even reckons he might turn up on The Daily Show. That's something I'd like to see.

Bernanke always looks uncomfortable testifying to Congress -- a big plus in my book given the bloviators asking the questions -- and he appeared equally ill at ease in the town hall forum. That said, can anyone imagine the politically savvy Greenspan explaining why he did what he did in anything other than well-crafted yet meaningless sound bites that allowed him to evade accountability? Once the doors of the temple have been flung wide open, it's hard to shut out the light. Bernanke's precedent-setting public forums, which some claim are part of a campaign for reappointment, "raise the bar for Bernanke or the next chairman," Litan said.

5. TVNZ has a story about a Christchurch man who was so fearful about having his house repossessed in a mortgagee sale by ASB that he built an electrified fence around his property. Yikes! I knew the banks were unpopular, but really... 6. The US Federal Reserve released its 'Beige Book' yesterday, saying the pace of decline in most of its 12 districts was easing, Bloomberg reported. 7. The US commercial property market is collapsing and the implications are now starting to become clear to investors and bond holders. It's ugly, this Reuters report shows. HT Alex

About $2.2 trillion of properties acquired or refinanced after the 2004 start of the commercial real estate bubble have lost value, according to the report, released on Wednesday by the real estate data company. As most those deals were financed with 70 percent to 80 percent or more of debt, the lower value will directly eat away at the equity. "By the end of 2010 you'll have begun to see terrible, terrible capital structure disintegration," said Philip Blumberg, chairman and chief executive of Blumberg Capital Partners. "The first thing to go is the equity." About $165 billion of commercial mortgages this year will mature and need to be refinanced or sold. Some $11.8 billion matured in June, according to mortgage data analysis provider First American CoreLogic. The number of distressed properties in the top 10 markets topped 5,000 in March, the most recent recording period, for the first time since CoreLogic began keeping record in January 2003.

This chart from Moody's of a US commercial property index tells the story even better. HT Kevin. 8. This cartoon from the Economist is fun. HT Rolfe Winkler at Reuters 9. Bernie Madoff says in his first interview on ABC that he can't believe he wasn't caught earlier. Apparently he's in good health and working out a lot.

"There were several times that I met with the SEC and thought 'they got me,'" Madoff told Joseph Cotchett, a San Francisco lawyer threatening to sue his wife, sons and brother on behalf of a group of victims. Cotchett said he and his partner, Nancy Fineman, met with Madoff for four and a half hours Tuesday afternoon at the federal prison in Butner, NC, where Madoff is serving his 150-year sentence. "He looked pretty good and seems to be working out," said Cotchett. "He looked a lot better than he has in some months since I've seen photographs of him."

10. Even China perma-bull Stephen Roach from Morgan Stanley is starting to worry about China in this Op-Ed for the FT.

A little over two years ago, premier Wen Jiabao warned of a Chinese economy that was becoming increasingly "unstable, unbalanced, uncoordinated and ultimately unsustainable". Prescient words. Yet rather than act on those concerns by implementing a pro-consumption rebalancing, growth-hungry China was seduced by the boom in global trade and upped the ante on its most unbalanced sectors. By 2007, investment and exports accounted for about 80 per cent of Chinese GDP. And now, in the face of a severe global recession, China has compounded the very problems the premier warned of: aiming a massive liquidity-driven stimulus at its most unbalanced sector. This is not a sustainable outcome for any economy - or sustainable support for the world economy. China must redirect economic growth towards internal private consumption. This may require a compromise on the quantity dimension of its growth outcome. But to the extent that leads to improved quality in the Chinese economy, a short-term growth sacrifice is well worth the effort. Unlike most, I have been a steadfast optimist on China. Yet I am starting to worry. A macro strategy that exacerbates worrying imbalances is ultimately a recipe for failure. In many respects, that's what the global crisis and recession of 2008-09 are all about. China will not get special dispensation from the most critical lesson of this post-crisis era.