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Here are my Top 10 links from around the Internet at 10 to 1. I welcome your additions and comments below or please send suggestions for Monday’s Top 10 at 10 to bernard.hickey@interest.co.nz We have no poltergeists at interest.co.nz

1. Easter meltdown? - Germany is now openly saying it wouldn’t mind if Greece applied to the IMF for a bailout, while Greece is saying it may have to apply for an IMF bailout as early as the Easter weekend. This could easily get very ugly very quickly. Hold onto your hats people. If this happens the Greeks will rightly ask if there’s much point in being in the Euro at all, as will the Germans. Who wants to bet on a broken euro by Christmas? Maybe not me yet, but we have a hairy few months ahead with the UK election in May too. Here’s the latest from the Wall St Journal.

Germany signaled it was open to supporting a joint bailout of Greece by European governments and the International Monetary Fund should the country need assistance, as Greece called on Europe for concrete help by next week.

Chancellor Angela Merkel is “open to a financial participation by the IMF” in any aid package for Greece, a senior German official said, while stressing that no final decision had been made. The official added that Greece hasn’t asked for a rescue and that Germany still wants Greece to solve its debt crisis alone through budget cuts.

The German finance ministry had raised objections to an IMF program for Greece as recently as last week.

Germany’s shifting stance sets the stage for a potential confrontation with other European countries at a summit meeting in Brussels next week. The comments come amid an increasingly contentious debate between Germany and its EU partners over how and when any rescue of Greece should occur. France and other members of the 16-nation euro zone have vociferously opposed a financial role for the IMF in Greece.

Greek Prime Minister George Papandreou said in Brussels on Thursday that he wants guarantees of financial support to come out of the summit, which is set for next Thursday and Friday. But European officials say privately that a decision on Greek aid may not be reached at next week’s EU summit, despite Greek pressure.

2. Trouble brewing – Ed Harrison at Credit Writedowns has a nice summary of the growing tensions in political systems globally after two years of the worst global recession since the end of WWII.

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Here are my Top 10 links from around the Internet at 10 to 11. I welcome your additions and comments below or please send suggestions for Friday’s Top 10 at 10 to bernard.hickey@interest.co.nz Today is a bit of a China-US trade tensions special, apart from the doozy on Aussie house prices at the bottom. Our website does worky.

1. Compulsory reading – I don’t often say something is a must read, but this piece from Martin Wolf in FT.com is a must read, I reckon. He has summed up the global trade and capital flow tensions in a single brilliant piece. He essentially says that German and China are deluding themselves if they think they can continue to run trade surpluses and pseudo-fixed exchange rates. Wolf says Germany and China seem to expect the deficit countries to deflate their way back to competitiveness in a brutal way that will inevitably rebound on global trade through 1930s style politically driven trade wars. His logic is compelling and this piece sheds a bright light on the growing tensions between the trade surplus countries and the rest.

Both believe that their customers should keep buying, but stop irresponsible borrowing. Since their surpluses entail others’ deficits, this position is incoherent. Surplus countries have to finance those in deficit. If the stock of debt becomes too big, the debtors will default. If so, the vaunted “savings” of surplus countries will prove to have been illusory: vendor finance becomes, after the fact, open export subsidies.

I am beginning to wonder whether the open global economy is going to survive this crisis. The eurozone may also be in some danger. Last week’s interventions by Wen Jiabao, China’s premier, and Wolfgang Schäuble, Germany’s finance minister, illuminate these dangers perfectly.

Behind all this is a fundamental divide. Surplus countries insist on continuing just as before. But they refuse to accept that their reliance on export surpluses must rebound upon themselves once their customers go broke. Indeed, that is just what is happening. Meanwhile, countries that ran huge external deficits in the past can cut the massive fiscal deficits that result from post-bubble deleveraging by their private sectors only via a big surge in their net exports.

If surplus countries fail to offset that shift, through expansion in aggregate demand, the world is inevitably caught in a “beggar-my-neighbour” battle: everybody seeks desperately to foist excess supplies on to their trading partners. That was a big part of the catastrophe of the 1930s, too.

In this battle, the surplus countries are most unlikely to win. A disruption of the eurozone would be very bad for German manufacturing. A US resort to protectionism would be very bad for China. Those whom the gods wish to destroy, they first make mad.

2. Tensions grow – Relationships between China and foreign businesses are starting to sour, report Andrew Browne (who I used to work with at Reuters) and Jason Dean from the Wall St Journal. This is ominous. The last thing we need is trade restrictions popping up all over the place. The following details suggest all is not well in relations between China and America on the ground, where it matters.

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Here are my Top 10 links from around the Internet at 10 past 2. I welcome your additions and comments below or please send suggestions for Thursday’s Top 10 at 10 to bernard.hickey@interest.co.nz Apologies for the delay.

1. Here comes the wall of debt – The New York Times has written a useful piece pointing out the US$700 billion wave of maturing junk bonds that is due to hit the market from 2012 just as the US governments and others are borrowing heavily. We can be sure of one thing: interest rates will rise.

2012 also is the beginning of a three-year period in which more than US$700 billion in risky, high-yield corporate debt begins to come due, an extraordinary surge that some analysts fear could overload the debt markets.

With huge bills about to hit corporations and the federal government around the same time, the worry is that some companies will have trouble getting new loans, spurring defaults and a wave of bankruptcies.

The United States government alone will need to borrow nearly US$2 trillion in 2012, to bridge the projected budget deficit for that year and to refinance existing debt.

Indeed, worries about the growth of national, or sovereign, debt prompted Moody’s Investors Service to warn on Monday that the United States and other Western nations were moving “substantially” closer to losing their top-notch Aaa credit ratings.

Sovereign debt aside, the approaching scramble for corporate financing could strain the broader economy as jobs are cut, consumer spending is scaled back and credit is tightened for both consumers and businesses.

Even Moody’s is worried.

“An avalanche is brewing in 2012 and beyond if companies don’t get out in front of this,” said Kevin Cassidy, a senior credit officer at Moody’s.

Private equity firms and many nonfinancial companies were able to borrow on easy terms until the credit crisis hit in 2007, but not until 2012 does the long-delayed reckoning begin for a series of leveraged buyouts and other deals that preceded the crisis.

That is because the record number of bonds and loans that were issued to finance those transactions typically come due in five to seven years, said Diane Vazza, head of global fixed-income research at Standard & Poor’s.

In addition, she said, many companies whose debt matured in 2009 and 2010 have been able to extend their loans, but the extra breathing room is only adding to the bill for 2012 and after.

The result is a potential financial doomsday, or what bond analysts call a maturity wall. From $21 billion due this year, junk bonds are set to mature at a rate of $155 billion in 2012, $212 billion in 2013 and $338 billion in 2014.

2. Tax crackdown – Australian authorities are cracking down on rich individuals with money tucked in other countries, Anthony Klan at The Australian reports. Any with money stuck here? This is all part of the global crackdown on tax havens by cash-strapped governments. This will be a theme of years to come.

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Here are my Top 10 links from around the Internet at 10 past 12. I welcome your additions and comments below or please send suggestions for Wednesday’s Top 10 at 10 to bernard.hickey@interest.co.nz We don’t have many features listed on the box…

1. Bunker busting bombs – Is America preparing to attack Iran? Rob Edwards at The Herald in Scotland thinks maybe:

Hundreds of powerful US “bunker-buster” bombs are being shipped from California to the British island of Diego Garcia in the Indian Ocean in preparation for a possible attack on Iran. The Sunday Herald can reveal that the US government signed a contract in January to transport 10 ammunition containers to the island. According to a cargo manifest from the US navy, this included 387 “Blu” bombs used for blasting hardened or underground structures.

Experts say that they are being put in place for an assault on Iran’s controversial nuclear facilities. There has long been speculation that the US military is preparing for such an attack, should diplomacy fail to persuade Iran not to make nuclear weapons.

2. This doesn’t look good – Ambrose Evans Pritchard at The Telegraph has pointed to the growing emnity developing in rhetoric between America and China over the US$ peg and other issues. This could get ugly. Pritchard points out China may be overplaying its hand.

Some of the comments from China are stunning, including this doozy below:. They key moment will be when/if America accuses China of being a ‘currency manipulator’. It could then unleash all sorts of crazy trade protections. HT Andrew Wilson. Here’s Paul Krugman stirring the pot at the New York Times.

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Here are my Top 10 links from around the Internet at 10am. I welcome your additions and comments below or please send suggestions for Tuesday’s Top 10 at 10 to bernard.hickey@interest.co.nz

1. Brace for it – Ambrose Evans Pritchard at The Telegraph does his patriotic duty and points out a warning about British debt from an Italian bank. Mama Mia! What has the world come to. HT Andrew Wilson via email.

UniCredit has alerted investors in a client note that Britain is at serious risk of a bond market and sterling debacle and faces even more intractable budget woes than Greece.

“I am becoming convinced that Great Britain is the next country that is going to be pummelled by investors,” said Kornelius Purps, Unicredit ’s fixed income director and a leading analyst in Germany.

Mr Purps said the UK had been cushioned at first by low debt levels but the pace of deterioration has been so extreme that the country can no longer count on market tolerance.

“Britain’s AAA-rating is highly at risk. The budget deficit is huge at 13pc of GDP and investors are not happy. The outgoing government is inactive due to the election. There will have to be absolute cuts in public salaries or pay, but nobody is talking about that,” he told The Daily Telegraph. “Sterling is going to fall further over coming months. I am not expecting a crash of the gilts market but we may see a further rise in spreads of 30 to 50 basis points.”

2. It’s all coming out now – Details about how Lehman misled investors in the final few months before the collapse are now coming out. It’s all about a tool called a ‘Repo 105.’ NPR has a useful explanation of how Lehman used the Repo 105. Essentially Lehman covered up US$50 billion of debt from investors, regulators and counterparties. How many other US investment banks did this? HT Gertraud via email. Ernst and Young are in the firing line on this one. Will it turn into E&Y’s version of Anderson and Enron?

Here’s the full Lehman Brother Chapter 11 Examiner’s report, which has plenty of of juicy details.

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Here are my Top 10 links from around the Internet at 10 to 2. I welcome your additions and comments below or please send suggestions for Monday’s Top 10 at 10 to bernard.hickey@interest.co.nz We try to absorb everyone’s workflow energy…

1. End of empire – The Southland Times reports that New Zealand Resorts Ltd, one of the companies in Ross Wensley’s Queenstown property ‘empire’, has been placed into liquidation.  It owns The Club development.

Mr Wensley’s developments have been hit hard by the credit crunch and a drop in apartment prices.

Last year Mr Wensley travelled to the United Kingdom to chase money owed by people who had bought apartments at the Marina Baches complex in Queenstown, leaving his company $23 million out of pocket.

2. Map of doom – Check out this county-by-county interactive chart of mortgage delinquency rates in the United States. It’s from the New York Federal Reserve. If you have any doubts about the scale of the disaster unfolding in the US then you need to look at this. Most of the West Coast, South West and South East have delinquency rates north of 10%.

3. Damaged credibility – Ron Hera makes the case at Seeking Alpha for eventual hyper-inflation in America and the destruction of the US dollar. There have been plenty of doomsayers predicting this, but so far the US dollar hasn’t collapsed and demand for US Treasuries remains strong, partly because all the money printed is sitting idle in Federal Reserve accounts. Hera reckons it’s all about credibility in the long run, rather than financial market confidence now. Eventually, the money printing will kill the US dollar, he says. It’s a long read but well worth it. HT Troy Barsten via email.

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