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By Matt Nolan from Infometrics

Following the global financial crisis people all around the world were angry and they wanted someone to blame. Given that the crisis seemed to originate from credit markets, it became natural for everyone to blame bankers.

In Britain there have been calls to make bankers pay through the introduction of a tax on speculative banking transactions called a “Robin Hood tax”. It even has the all important celebrity backing of Bill Nighy, and 131,919 fans on Facebook. Economists have seen this tax before in a different guise – we call it a financial transaction tax. Instead of attacking bankers, lowering financial market volatility, and raising money for the needy the burden of such a tax would fall mainly on ordinary people while having few of the claimed effects.

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Here’s my Top 10 links from around the Internet at 10 am. I welcome any additions in the comments below and please send any suggestions for tomorrow’s Top 10 at 10 to bernard.hickey@interest.co.nz We multitask at interest.co.nz…

1. This story from Marty Sharpe in the Dominion Post (Stuff) is a fascinating insight into how New Zealanders think about property now. The Ombudsman’s office has ruled the Hawkes Bay Regional Council must reveal the location of 3,099 potentially contaminated sites. The council had initially refused to disclose the locations because disclosure might affect property prices. This is likely to have a much wider impact because Environment Minister Nick Smith says he expects other councils to follow suit.

Regional council chairman Alan Dick said the council would discuss how the information was to be made public in a closed meeting on Friday. Very few of the sites were residential properties, he said.

The Real Estate Institute’s Wellington region president, Euon Murrell, said notifying people of potential contamination was “dangerous ground”. ”It puts the suspicion in someone’s mind that a site is contaminated. There should be strong evidence that a site may be contaminated before this is done.”

He said the huge impact on sales was exemplified by a failed sale he had in Porirua early this year. ”I had a piece of land under offer and the buyers pulled out after finding out it was potentially contaminated. The fact that it was listed made them run a mile. They didn’t do any checks at all, they just ran,” Mr Murrell said.

A similar issue caused a furore in Auckland in 2004 when Auckland City Council decided to note potential contamination on about 5000 Land Information Memorandum reports.

2. America’s Federal Deposit Insurance Corp has just thrown a grenade into US bank balance sheets. It has urged them to boost reserves to account for customers’ negative equity, particularly for those customers who used their homes like ATMs before the bubble burst. The FDIC sent banks a letter urging them to book losses if their loans were worth more than the equity in the home, Bloomberg reported.

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By Infometrics economist Matt Nolan

With New Zealand’s net international debt hitting 98% of its annual production (GDP) in March there has been a lot of talk regarding the fact that we seem to have borrowed excessively relative to the rest of the world. As the global economic situation gradually makes it more difficult for a small country like New Zealand to bury ourselves in debt, it is important to look at why we could be borrowing so heavily.

Excessive borrowing occurs when households, businesses, and/or government borrow more than is justifiable given a reasonable outlook for future income.

Economic theory suggests that there are three main causes of excessive national borrowing:

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Here’s my Top 10 links from around the Internet in the last day or so at 10 am. I welcome your additions in the comments below. I cannot embed my dismissive scoffing sound.

1. Adam Bennett at the NZHerald has picked up on this NZX announcement on Friday that Allan Hawkins, the convicted fraudster of Equitycorp infamy, is raising NZ$10 million from small investors (NZ$500 minimum investment) through an issue of capital securities offering 9.25%.

Hawkins was sentenced to six years jail in 1993 on seven fraud and conspiracy charges on transactions totalling $520 million after one of the longest and most expensive trials in New Zealand history. However, Hawkins’ convictions are not disclosed in Cynotech’s prospectus for the issue.

This is amazing. How on earth are we supposed to take any prospectus approved by the Securities Commission seriously when a fraud conviction is not included? How much credibility can we give to the NZX when it allows the likes of Hawkins to raise money from Mums and Dads through its market?

2. Oh the humiliation. GM is selling its most All-American brand of stupid SUVs to the Chinese. Sichuan Tengzhong is buying Hummer for less than US$500 million, the WSJ.com reported.

3. The Chinese are not happy with America’s spend, borrow and print strategy to dealing with the financial crisis. Bloomberg reports Yu Yongding, a former Chinese central bank adviser, as saying he doesn’t believe America’s plan to reduce its budget deficit from 12.9% of GDP now to 3% at some stage. He also described the US Federal Reserve as the world’s biggest junk investor.

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Here’s my top 10 links from around the Internet at 10 am. I welcome your comments and suggestions for links in the comments below.

Nice cartoon from Emerson in the NZHerald first up.

1. FTAlphaville points to a new paper by Nassim Taleb (the Black Swan guy) who points out that the bigger a bank is the more vulnerable it is to a ‘black swan’ event. There are a lot of mathematical equations  to reassure us he is right.

2. CNBC is reporting that Wells Fargo needs more capital too, adding to the likely capital calls by Citigroup and Bank of America in the wake of the stress tests. Who’s going to invest the equity in them? The oil sheikhs? No because they’re still nursing losses from previous injections. The Singaporeans and Chinese? Ditto. US investors? Ditto. The US government? Now you’re talking. The sooner they get the nationalisations out of the way the better.

3. Just in case you were thinking about green shoots, the European Union is now forecasting that unemployment in the Euro-zone economies will reach 11.5% in 2010 and GDP will shrink 4% in 2009. Here’s the AP report on Yahoo.

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Here’s my top 10 links from around the Internet at 10 am. I welcome your suggestions in the comments below.

1. The US Treasury will start privately briefing the big US banks on the results of its widely anticipated ‘Stress Test’ later tonight. The results will be made public on Monday May 4, WSJ.com reports. This means the next week or two could see ‘pre-announcements’ by stressed backs trying to get ahead of the game. The fact it’s all announced on a Monday is interesting too. Usually the collapses and rescue deals are done on weekends to avoid markets complicating negotiations. The next couple of weekends could be very interesting.

2. America’s Federal Deposit Insurance Corp (FDIC) is woefully underfunded, Michael Shedlock argues at Mish’s Global Economic Trend Analysis. He points to the FDIC’s Deposit Insurance Fund (DIF) reserve ratio dropping by 75% inside a year. Here’s the chart. Here’s a taste of what it might mean.

Reserves have plunged, no doubt on their way to negative territory as the number of problem institutions soars. Expect to see requests for more taxpayer bailouts as the FDIC well runs dry.

3. Chrysler is likely to be put into bankruptcy protection next week, the New York Times is reporting.

4. General Motors will close most of its plants for 9 weeks this (Northern Hemisphere) summer to clear unsold inventory, the AP reports.

5. The always excellent Tyler Durden at ZeroHedge points out that the US Federal Reserve has reported a loss of 28% on a bunch of commercial loans it took over from Bear Stearns and a loss of 36% from a bunch of residential loans from Bear Stearns.

6. Paul Krugman at the New York Times points out the absurdities of an accounting system that judges Citigroup’s profits healthier because it was seen by the markets as more likely to fail, while Morgan Stanley’s profits fell because it was seen as healthier.

7. Here’s the Onion’s immediate recall of all US dollars. Don’t worry. It’s not true…

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