Here's my Top 10 links from around the Internet at 10 am today in association with NZ Mint.
As always, 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 is #4 on whether the Internet destroyed the Middle Class.
1. The IMF speaks - Here's the IMF's latest report on the New Zealand economy, hot off the presses this morning.
The IMF is generally positive, but does note New Zealand's rising current account deficit.
It also points out New Zealand's banks are still exposed to short term loans on international financial markets.
New Zealand's fast-rising house prices also get a concerned mention.
As does the chance of an early hike by the Reserve Bank of New Zealand in the Official Cash Rate to deal with it.
Happy reading.
While a recovery is underway, growth this year is likely to remain modest, with an increase in construction activity offset by headwinds from budget deficit reduction, the strong dollar, and the recent severe drought. Risks arise from persistent low national savings and large external liabilities, and from high and rising house prices. Directors welcomed the authorities’ continued efforts to reduce these vulnerabilities.
Directors agreed that the current accommodative monetary policy stance is appropriate, although a tightening may be warranted if house-price and credit expansion begin to fuel inflationary pressures.
Directors agreed that banks remain sound, with recent stress tests showing that the major banks could withstand a variety of sizeable shocks. They observed, however, that banks remain exposed to highly leveraged borrowers and to rollover risks associated with large short-term offshore funding needs.
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2. Cicada farming? - The FAO has come out with an interesting report on how insect farming could be the way to meet the world's growing demand for protein.
Here's the Economist with a nifty graphic how cheap insects are to run. Hard to love though....
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3. 'Get in behind Cyber-Shep' - America is changing its laws to allow Unmanned Aerial Vehicles (UAVs) to be used domestically. The biggest users, it seems, will be those in agriculture using drones for crop and herd management.
Who needs a sheep dog when you could sit at home in the armchair with an iPad?
Here's the New Yorker with the detail.
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This week sees the publication of “Who Owns the Future?,” which digs into technology, economics and culture in unconventional ways. (How is a pirated music file like a 21st century mortgage?) Lanier argues that there is little essential difference between Facebook and a digital trading company, or Amazon and an enormous bank. (“Stanford sometimes seems like one of the Silicon Valley companies.”)
Much of the book looks at the way Internet technology threatens to destroy the middle class by first eroding employment and job security, along with various “levees” that give the economic middle stability.
“Here’s a current example of the challenge we face,” he writes in the book’s prelude: “At the height of its power, the photography company Kodak employed more than 14,000 people and was worth $28 billion. They even invented the first digital camera. But today Kodak is bankrupt, and the new face of digital photography has become Instagram. When Instagram was sold to Facebook for a billion dollars in 2012, it employed only 13 people. Where did all those jobs disappear? And what happened to the wealth that all those middle-class jobs created?”
5. Strolling the Thames in China - Vice reports on a ghost city in China built to look just like London.
6. Not so fast - FTAlphaville digs beneath China's apparently strong retail sales growth over the last year. It's not as strong as it looks, it seems. The table is fun to look through.
The Chinese are big gold buyers.
Those banking on a speedy bounce in Chinese growth are unlikely to take much comfort.
On retail sales, the rise was almost entirely driven by one thing: the sharp sell-off in gold last month. Many Chinese consumers took the drop in prices to snap up jewellery, which led to a gold supply shortage in jewellery chains, retail banks, and even the Hong Kong gold exchange. As shown here, courtesy of ANZ, jewellery, medicine and cars were the only areas to show growth momentum in April vs March.
7. More warning signs in China - Bloomberg also looks at a slowing of investment growth in China and what it might mean for future growth.
China’s fixed-asset investment unexpectedly decelerated last month while industrial output trailed estimates, adding to concerns that the economy will fail to show much of a recovery this quarter.
The data may test the new leadership’s tolerance for slower economic expansion as President Xi Jinping and Premier Li Keqiang implement policy changes to improve the quality and efficiency of growth. The central bank warned last week that while the foundation for stable growth isn’t yet solid, stimulus policies could trigger inflation.
“China’s economic recovery remains weak,” said Li Wei, a Shanghai-based economist at Standard Chartered Plc. “The government will stay vigilant on local-government debt, keep property-market controls and discourage public spending. All of those measures will restrain China’s growth rebound.”
8. Europe's leadership divide - One of the biggest problems in Europe is recapitalising and cleaning up its banking system.
Reuters reports on the the divisions within Europe on just how to do that.
The European Central Bank clashed withGermany on Tuesday over how quickly the euro zone should complete a system to deal with failingbanks.
A separate rift also emerged at a European Union finance ministers meeting over whether or when big depositors should suffer losses, as they did in Cyprus's bailout.
10. Totally Jon Stewart on Bill O'Reilly, Benghazi and the IRS targeting Tea Partiers
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