Here are my Top 10 links from around the Internet at 10 past 12pm. I welcome your additions and comments below or please send suggestions for Wednesday's Top 10 at 10 to bernard.hickey@interest.co.nz Many thanks for your responses on the issue of Top 10 being later and longer, or shorter and earlier. The consensus is Top 10 at 10 is good for a lunchtime read. One suggestion was to rename it Top 10 at 10 past 12. I'd much rather keep up the quality and avoid the 'dog ate my homework excuses so I'm opting for that idea.' Thanks again for your support. 
1. Gareth Morgan tees off - Fund manager, motorcyclist and some-time economist Gareth Morgan has unloaded on the current regulatory regime around investment funds and KiwiSaver in a NZHerald column. It's fun to see him in full flight. He takes no prisoners, pointing his finger at KiwiSaver competitor Huljich Wealth Management, which is attached to John Banks and Don Brash.
Where on earth are the myriad of government regulators who are supposed to be over this KiwiSaver thing? First we had Huljich paying salespeople to sell its KiwiSaver at street corners and door to door in South Auckland - totally against the rules. Then Huljich's salespeople were found selling it to the mentally impaired in institutions. Now there are suggestions they have been manipulating their returns through related party transactions. Concerns around this haven't been helped by Huljich's refusal to respond to these suggestions under the weaker-than-weak grounds of "commercial sensitivity" to disclose to anyone how their returns - which were miles beyond anyone else's - were achieved. Don't the trustee and the regulators require auditing of KiwiSaver providers? I find it extraordinary that KiwiSaver is open to having apparent performance figures distorted by related party transactions. Certainly it would make a mockery of any performance surveys.
The Securities Commission gets a serve too.
The regulators are anything but pre-emptive, they work on a complaints-first basis so when you get mass destruction, they do too little and too late. The (Capital Markets Development) CMD (Taskforce) highlighted this ineffectiveness and advised changes to both the Securities Act and its enforcement. Don't rely on the regulators to protect you, they are there simply to ooh and aah as the corpses stack up. To the Government - get off your backside and start seriously implementing what the CMD told you to do. The longer you take, the deeper the hole this economy has to climb out of.
We'll see what happens. The Government is thought to be preparing a response to the taskforce on Thursday. 2. NZ Riskier than Argentina, Russia - The credit risk researchers at Credit Suisse have compiled their own list of the world's riskiest sovereign debt. Not surprisingly, Iceland, Greece, Hungary, Portugal and Spain are the 5 riskiest. But there's some interesting details. The United States, which still has a AAA rating from the credit ratings agencies, is ranked 16th riskiest and deemed to be riskier than Estonia, Kazakhstan and Indonesia. Meanwhile, New Zealand is at 21 on the list and deemed riskier than Argentina (chaotic former dictatorship that regularly defaults), the Philippines (chaotic and corrupt democracy that depends on remittances from maids and nurses), South Africa (dangerous one party state with massive unemployment) and Russia (corrupt one party state that has recently defaulted). That's all because of our high private sector debts. The table linked to here in full is well worth a read for those who like lists. HT Troy Barsten and FTAlphaville.
3. Hollowed out nation - A Waikato University population researcher has nailed the huge demographic and fiscal problem faced by New Zealand in the next 10-20 years in this NZPA report in Stuff. HT Philly in yesterday's Top 10 at 10.
An expert in regional demography, Professor Natalie Jackson, said New Zealand was losing people aged 20 to 40 - mainly due to emigration - which was driving up the median age of the population. "Crunch time is approaching with the number of retirees set to boom and fewer and fewer young people coming into the labour market," she said. "The issues are huge because New Zealand is parked right next to Australia, which has an older population than New Zealand, and is like a vacuum sucking in Kiwi migrants." She has acted as a consultant on ageing populations and said that Tasmania had also been losing young people, like New Zealand, which caused an "applecore shape" in the population's age groups - thinned out in the middle. "This has huge economic implications because it's the young people who buy the houses and take out first mortgages, they're the ones who have the children and they're the ones who buy the whiteware," said Prof Jackson, who heads the university's centre for population studies.
4. Commercial property woes - Anne Gibson at the NZHerald points out Multiplex's NZ Property Fund has suspended quarterly dividends and warned of funding problems from its banks, which are the ANZ and CBA. This is all symptomatic of the deleveraging going on now in the banking sector all around the world. Banks know regulators will want them to hold more capital and leverage less so they will either need more equity from shareholders or will need to lend less. Right now, they're looking to lend less.
Leon Boyatzis, the fund's Sydney manager, delivered the blow. "As a result of the restrictions imposed by the fund's financiers and the need to ensure there is sufficient cash reserves to meet its obligations, it is unlikely distributions will be paid during the 2010 calendar year," he wrote. ANZ and CBA have loaned the fund $419 million and Boyatzis said that the banks had extended that debt facility in December but only on the condition that big chunks were repaid fairly fast. The bankers' patience is coming to an end, but Boyatzis said the fund had done all it could to sell properties. In October, it sold the Wiri Distribution Centre for $19 million. The key terms of its debt renewal scheme meant big repayments had to be made progressively. The fund must find $350 million to be repaid by August next year, $69 million by October this year and also needs to reduce its loan-to-value ratio covenants gradually to 50 per cent by June next year.
5. Just like the Titanic - It's hard to believe, but the Greek Finance Minister has described his budget situation as 'just like the Titanic' in that it would take a long time to turn around... What was he thinking? Not much. He is refusing to promise to do more budget cutting. The situation in Europe seems just as deadlocked as last week. The Germans want Greece to solve its own problems with tough budget medicine. The Greeks don't want to alienate voters and workers. I wouldn't be surprised to see Greece kicked out of the euro by the end of the year. That's certainly what German voters want. And it's what the speculators think they'll get. It's interesting to see too that the Spanish and Greek are starting to blame speculators now.
The country is the first in the euro's 11-year history to require an emergency statement of political support from other European countries as it struggles to weather pressure from financial markets worried about its massive debt. But Finance Minister George Papaconstantinou warned against asking the government, which faces growing public dissent over budget cuts, to do too much too fast. "We're trying to change the course of the Titanic, it cannot be done in a day," Mr Papaconstantinou said ahead of meeting with euro zone finance ministers in Brussels. "If additional fiscal measures are needed, we will take them. Today it is Greece, tomorrow it can be another country. Any European country can be prey to speculative forces."
6. Inside the Greek story - Paul Kedrosky, who is Greek it seems, has some interesting thoughts at Infectious Greed on the real causes of the Greek debt problem and what might happen next.
Talk about the bankers is fashionable, but in the bigger scheme of things it was a side-show. It's pretty much the same with the Greek situation. Yes, we Greeks have been naughty. Yes, we are overindebted. Yes, we live above our means. But, much like the evil bankers, this has nothing whatsoever to do with Greece. That is my main thesis here. The Greek saga (for I refuse to see it as a tragedy) is all about saving the French and German baby boomers' retirement. Sleepy fund managers and insurers in the north of Europe decided that they did not want currency risk and they did not much fancy credit risk. Sovereign risk denominated in EUR was just the ticket for them to deliver on their promises. So the decision was made to lend money to the Greek government. Tons of money. Leaving out wars, more than any country has ever paid back that escaped default. Greece had no need for this money and indeed put it to horrible use. But Greece is not the protagonist here. This is a domestic issue for France and Germany! The governments of France and Germany have a choice here. They can side with the baby boomer generation, tax its progeny and funnel the money to Greece. Or they can refuse and have the baby boomers reap what they've sown. But the bottom line here is that if the money had not come to Greece it would have gone to Italy, Spain or Portugal. It wouldn't have gone to Bunds and OATs, because they did not yield enough for these wide fund managers' taste.
Kedrosky then makes the interesting point that EU membership fueled a boom inside Greece that didn't help the man on the street so they won't tolerate cuts in the same way the Irish have.
EU funds have done to Greece what oil did to Nigeria, while low EUR rates have allowed the government of Greece to be able to service a debt of 100% of GDP, most of which has gone straight to the pockets of the oligarchy. Man on the street, with the exception of the farmers, has not benefited one jot. This does not make all Greeks poor. Shipowners do very well, and a natural resource called the sun is very helpful to our 165,000 hoteliers. Man on the street never saw the benefit of the 250 billion the government has borrowed. Ergo, support for austerity now that the bill has come is zero. You won't see anybody accept an Irish solution in Greece.
7 The state problem - With all the noise around the US Federal budget deficit it's easy to miss how much of a mess the various state deficits are in. Here's a useful map. HT Blair Rogers via Twitter.
8. Australia's wary love for China - The Washington Post has a nice think-piece on Australia's new-found love for trade with China. It points out Australia's build up in defence spending just in case the trading love with China doesn't work out. This is obviously all crucial for us because where Australia goes we go.
"China is remaking the social and political fabric of this country," said Chen Jie, a senior lecturer in international relations at the University of Western Australia who immigrated to Australia from China 20 years ago. "China is intruding into society itself." But all those ties haven't bought China much love Down Under. Opinion polls over the past five years show Australians are increasingly wary of the behemoth to their north. Rudd, while embracing Chinese trade, has moved to balance relations with Beijing by bolstering military and diplomatic ties with Australia's longtime superpower ally, the United States. In April, Rudd's government announced Australia's biggest military build-up since World War II and a report by the Ministry of Defense made it clear that China was the reason. "As our trade ties with China grew closer, we believed it was necessary to hedge quietly," said Andrew Shearer, who served as national security adviser under Rudd's predecessor, John Howard. He said China's rise was a key factor in the decision -- initiated under Howard but continued under Rudd -- to pull even closer to the United States. Added Shearer: "We're seeing that thinking now across Asia."
9. Britain is next - Ambrose Evans Pritchard at The Telegraph is not rejoicing too much about the problems with the euro. He is a Britisher who works for the most British of newspapers. He is now worried that the attacks on Greek sovereign debt are a precursor to an attack on Britain's currency and debt.
The yields on 10-year British Gilts have risen to 4.06pc, compared to 4.05pc and 4.01pc for Spain. So if international bond markets are turning wary of Club Med sovereign bonds, they seem even more distrustful of British bonds. Eurosceptics should resist any Schadenfreude over the unfolding EMU drama in Greece. (Not to mention the huge exposure of British banks to Club Med). The Greek crisis is a dress rehearsal for attacks on any sovereign state with public accounts in disarray. While Britain went in to this crisis with a much lower public debt than Greece or Italy (though higher total debt than either), it now has the highest budget deficit in the OECD rich club "” and perhaps the world "” at 13pc of GDP. I have a very nasty feeling that markets are about to pounce on Britain. All they are waiting for is a trigger, perhaps a poll prediction of a hung-Parliament or further hints that Tories dare not confront the beneficiaries of state spending.
10. Totally irrelevant video - A spoof on The Shining
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