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 My apologies for lateness. I am struggling to get this in on time every day. I'm thinking of changing to either a shorter version at 10 am (maybe Top 5 at 10) or the same length but later (Lunchtime Links). Or should we drop other things at keep it at Top 10 at 10 (published at 10am)? What's your view? 
1. Rental pain/gain - Greg Ninness at the Sunday Star Times has pulled together an interesting study of rents throughout New Zealand over the last year or two to see whether landlords would be able to push through rent increases if tax changes increases. Apparently not. I agree. Rents are set by tenant incomes, not by landlords' wishlists. Here's the useful list Greg compiled.
Whatever form the changes eventually take, they are likely to focus attention on something that is an inconvenient truth for many investors who embraced residential property so wholeheartedly during the boom "“ that in the absence of significant capital gains, many of the properties they purchased were simply bad investments. Over the last few years, capital gains have been the holy grail for many property investors and, in their pursuit of it, many paid too much for properties relative to the income they provided, compounding that by borrowing too much of the money needed to fund the deals.
2. Who is this guy - James Weir at the Dominion Post reports that an unnamed property developer with a lavish lifestyle is facing a multi-million tax bill. Do your readers know who this developer and 'KPL' is?
A Taxation Review Authority decision on the case did not name the developer and entrepreneur, but said he was involved in a large number of property developments during the 1990s and projects worth "hundreds of millions of dollars". The authority said the developer was involved with the "KPL" company from 1996 to 2002. Inland Revenue's lawyer said the developer lived an "extravagant lifestyle" on the loans but authority Judge P F Barber said that was not relevant to the tax issue.
3. Euro collapse inevitable - The Daily Mail reports the chief economist of Societe Generale (yes the big French bank) saying the collapse of the Euro is inevitable. Sacre bleu! HT Andrew Wilson via email.
In a note to investors, SocGen strategist Albert Edwards said: 'My own view is that there is little "help" that can be offered by the other eurozone nations other than temporary, confidence-giving "sticking plasters" before the ultimate denouement: the break-up of the eurozone.' He added: 'Any "help" given to Greece merely delays the inevitable break-up of the eurozone.' The alarming claim came a day after European Union leaders promised 'determined and co-ordinated' action to shore up Greece's tattered public finances, but disappointed traders by failing to provide specifics. Further details are expected early (this) week, but markets were in high anxiety on Friday amid fears political divisions among rich eurozone members could derail any rescue.
4. Chinese oversupply - This Bloomberg story has some useful detail on the scale of the property over-building in Beijing. There is a bubble building. How it deflates will determine the future of the global economy.
Jack Rodman, who has made a career of selling soured property loans from Los Angeles to Tokyo, sees a crash looming in China. He keeps a slide show on his computer of empty office buildings in Beijing, his home since 2002. The tally: 55, with another dozen candidates. "I took these pictures to try to impress upon these people the massive amount of oversupply," said Rodman, 63, president of Global Distressed Solutions LLC, which advises private equity and hedge funds on Chinese property and banking. Rodman figures about half of the city's commercial space is vacant, more than was leased in Germany's five biggest office markets in 2009. Beijing's office vacancy rate of 22.4 percent in the third quarter of last year was the ninth-highest of 103 markets tracked by CB Richard Ellis Group Inc., a real estate broker. Those figures don't include many buildings about to open, such as the city's tallest, the 6.6-billion yuan ($966 million) 74- story China World Tower 3. Empty buildings are sprouting across China as companies with access to some of the $1.4 trillion in new loans last year build skyscrapers. Former Morgan Stanley chief Asia economist Andy Xie and hedge fund manager James Chanos say the country's property market is in a bubble. "There's a monumental property bubble and fixed-asset investment bubble that China has underway right now," Chanos said in a Jan. 25 Bloomberg Television interview. "And deflating that gently will be difficult at best."
5. Woops - This story from the St Petersberg Times is hardly believeable, but shows how widespread mortgagee sales are in America and how crazy the system has become. A couple in Massaschusetts discovered one day their house (which was rented out) had been seized by a bank even though they didn't owe any money on it. Bizarrely, the bank is still going through legal system contesting the claim. The Bank is called the Bank of America. HT Troy Barsten via email.
The Massachusetts couple paid for their future retirement home in Spring Hill with cash in 2005, five years before agents for Bank of America seized the house, removed belongings and changed the locks on the doors, according to a lawsuit the couple have filed in federal court. The bank had an incorrect address on foreclosure documents "” the house it meant to seize is across the street and about 10 doors down "” but the Cardosos and a Realtor employed by Bank of America were unable to convince the company that it had the wrong house, the suit states. "Their own real estate agent told them, and nevertheless Bank of America steamrolled right ahead," said Joseph deMello, an attorney in Taunton, Mass., who is representing the couple. "This is a nightmare for anyone, and it affected my hard-working clients a lot." The Cardosos are seeking unspecified damages from Bank of America. The company showed negligence, trespassed and caused the couple emotional distress and financial hardship, especially because a tenant renting the home at the time got worried and left, according to the complaint. It's still unclear if the couple's credit rating has been affected, deMello said.
6. Financial Hub Bub - Matt Nolan at The Visible Hand in Economics asks some pointed questions about this idea of New Zealand becoming a 'financial hub' that John Key is talking about. Matt points out this idea was included in the Capital Markets Taskforce as a recommendation, but the detail was handed to Key separately...
Usually, people avoid putting things into reports and give them straight to ministers when their analysis is suspect "¦ On the face of it this is fine. We shouldn't tax the funds as we are just an intermediatary "“ we should tax the value added bit. Cool. Furthermore, there are jobs, implying that value is being added which creates labour income, cool. However, HOW do they plan to make us a hub. This is the important question. Do these jobs come from subsidising an industry and thereby moving workers from one sector to another. If so there are opportunity costs "“ and we better well have some damn good analysis about why market prices aren't providing the right signal. Now, it is trivial to state that a government action COULD have a positive impact "“ give me a possible policy and I can make up a model that would make it sound like a good thing to do. In truth, we need details so we can ask if we think it WILL have a positive impact "“ a situation which is only a small subset of all the "could" situations. And of course, to do that we would actually have to see some analysis "“ which we have been told was not put in the report.
7. The Chinese burn goes on - Reuters reports China raised the levels of reserves banks must hold for the second time on Friday.
Although investors had been expecting the People's Bank of China to push the reserve requirement ratio higher after an increase last month, few thought the second rise would come so soon. Markets were rattled by fears that monetary tightening in the world's third-largest economy would be more aggressive than had been reckoned on, potentially denting global growth. Investors pulled back from riskier assets, buoying the dollar. Stocks and oil fell, while European and U.S. bonds jumped. "The central bank is sending clear messages to banks that it wants more reasonable bank lending and it is paying close attention to inflation," Xie Xuecheng, an economist with Southwest Securities in Beijing, said.
8. The Ouzo crisis - John Mauldin at BusinessInsider has a nice wrap of the current Greek situation and what it means for the global economy. Despite the calming noises late last week, we are far from out of the woods. There are still no details on what a German bailout of Greece would look like and the political backlash from German voters is only just starting. Mauldin rightly points out Greece is not the only developed sovereign that will struggle. His last point is just as true for New Zealand as for other developed countries. HT Berend de Boer via Twitter
The market is not going to let Greece continue to borrow without showing some serious efforts at cutting their deficit, and probably not even then without some external guarantees. The history of Greek debt is not a good one. They have been in default 105 years out of the last 200. The current path is simply unsustainable. At some point, we can become Greece. Yes, we have the advantage of having our debt denominated in dollars, but that is only an advantage up to a certain point. The Nobel Prize economists (who will go nameless here) who say the US cannot default because our debt is in dollars miss the point. Being the world's reserve currency just means we can run up bigger bills, but if we go the route of printing money to pay those bills, that is devaluation and fraud, as the value of a dollar will diminish; and that is tantamount to default. Whether it is Japan or Portugal or the US or (pick a country), the body of evidence clearly shows that there is a limit to the amount of debt a sovereign country can handle without a crisis developing. That limit is different for each country, but there is a limit that the bond market will impose. And there are many countries in the developed world that are approaching that limit. We are in the fullness of time approaching the End Game. In country after country, the choices that have been made over the last decades will yield a Greek situation, where there are no good choices. And the longer the hard choices are put off, the more difficult they will become. For some countries it could mean deflation. For others, it will look like inflation on steroids. Countries with sensible budgets and policies will thrive.
9. Gotcha? - I try to avoid the climate change debate because I don't have enough time...but this story in the The Daily Mail seems to suggest something interesting has happened in this BBC interview with Phil Jones, a key climate change scientist. But I'm sure debate will rage over that too...sigh.
The academic at the centre of the "˜Climategate' affair, whose raw data is crucial to the theory of climate change, has admitted that he has trouble "˜keeping track' of the information. Colleagues say that the reason Professor Phil Jones has refused Freedom of Information requests is that he may have actually lost the relevant papers. Professor Jones told the BBC yesterday there was truth in the observations of colleagues that he lacked organisational skills, that his office was swamped with piles of paper and that his record keeping is "˜not as good as it should be'. The data is crucial to the famous "˜hockey stick graph' used by climate change advocates to support the theory. Professor Jones also conceded the possibility that the world was warmer in medieval times than now "“ suggesting global warming may not be a man-made phenomenon.
10. Totally relevant video - I watch TED talks whenever I can. They are 20 minute long pieces from interesting people about interesting topics. This one is from Jamie Oliver about the obesity epidemic that costs the US health care system US$150 billion a year. The US (and the rest of us) have some enormous fiscal problems being stored up for the future. BTW Some people may have noticed I've lost some weight lately (49kgs actually). I decided last August to spend some of my money (about NZ$20k) on a gastric bypass to reduce my weight and cure my diabetes. I was building up a big liability for the public healthcare system (probably a couple of million dollars in the last few years of my life) by eating too much, not exercising enough and trying unsuccessfully to lose weight with diets. It was my choice and I don't want to preach about it, but I am getting increasingly worried about a looming obesity crisis in the developed world. Please watch this compelling video. Jamie's use of a wheelbarrow full of sugar is worth watching.
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