Top 10 at 10: Mark Hotchin's present wrapping room; Roubini calls for new stimulus; Hugh Hendry's contrarianism; Dilbert

Here are my Top 10 links from around the Internet at 10am. I welcome your additions and comments below or please email your suggestions for Wednesday's Top 10 at 10 to bernard.hickey@interest.co.nz 1. Present wrapping room - TV3's John Campbell hosts a tour around Mark Hotchin's new NZ$30 million mansion being built on Paritai Drive in this video. He then speaks to Bruce Sheppard who lets rip about these 'pricks' in the patented Sheppard way. Brutal and entertaining. But my favourite stuff is the detail about the house with the 12 car garage, the wine room, the games room and the present wrapping room. I've got a feeling there won't be any presents wrapped in that room for either John or Mark. Watch and enjoy, unless of course you are a Hanover investor. Then it's a rather painful experience. 2. China's Africa push - This is a useful collection of factoids from Brian Smith and Ann Talbot at World Socialist Web Site about China's push into Africa. The scale of the investment and connections is exploding as China hunts for new sources for commodities and tries to diversify away from the US dollar. It is also starting to flex its military muscle on far-away oceans and is eyeing some sort of 'Marshall Plan' for developing economies rich with energy and minerals. HT David George via email.

A new feature of the Chinese investment drive in Africa, which is up 77 percent in the first three quarters of 2009 over the same period last year, is the move to public-private partnerships. China now wins more than 50 percent of all new public works contracts in Africa, and Chinese companies dominate road construction in the continent. China is conscious of the need to protect its interests in Africa. It has sent a flotilla of destroyers to the Gulf of Aden using the pretext of combating piracy in the geo-politically sensitive waterway. Around 40 percent of China's goods and raw materials trade pass through these waters. This marks the Chinese navy's first major foreign engagement, outside of a UN mandate. In Niger, China is now rivalling France as a buyer of uranium, and last year China National Petroleum Corporation signed a $5 billion contract for the Agadem oil bloc near Zinder. In Liberia, China Union is to spend $2.6 billion to develop iron ore mines in Bong County. Beijing officials have also recently been discussing the possibility of using part of China's foreign reserves to finance the world's largest development aid programme, termed a "Harmonious World Plan", the main recipients of which would be Africa, Latin America and Asia. The fund would be capitalised at around $500 billion, with $100 billion of foreign exchange reserves and the rest in Chinese Renminbi (about RMB2.7 trillion). It would make loans through existing institutions, such as the Forum on China-Africa Cooperation, to developing states in a mixture of US dollars and Renminbi, which would be repaid in national credit or from the profits generated. The plan presented by economist Xu Shanda to the Chinese People's Political Consultative Conference in July is said to draw on ideas from the United States' post-war Marshall Plan. It is an attempt to offset the impact of the global recession on Chinese industry by creating new export markets and establishing the Renminbi as a currency of international trade. The ambitious nature of Chinese plans in Africa is driven by the global recession and the increasing trend of US policy towards protectionism. Inevitably, it will lead to great tension between China and the USA, as China intrudes on an area vital to US interests.

3. Funds reversal - Now some Mexican migrants in the United States are so poor because of the recession north of the border that they are asking for money from relatives still living in Mexico, the New York Times reports. The numbers going back the other way are still small relative to the US$16.4 billion going down to Mexico, but it's another sign of the economic malaise in the south west of America. HT Troy Barsten via email.

Unemployment has hit migrant communities in the United States so hard that a startling new phenomenon has been detected: instead of receiving remittances from relatives in the richest country on earth, some down-and-out Mexican families are scraping together what they can to support their unemployed loved ones in the United States. "We send something whenever we have a little extra, at least enough so he can eat," said Mr. Salcedo, who is from a small village here in the rural state of Oaxaca and works odd jobs to support his wife, his two younger sons and, now, his jobless eldest boy in California. He is not alone. Leonardo Herrera, a rancher from outside Tuxtla Gutiérrez in the southern state of Chiapas, said he recently sold a cow to help raise $1,000 to send to his struggling nephew in northern California. Also in Chiapas, a poor state that sends many migrants to the United States, María del Carmen Montufar has pooled money with her husband and other family members to wire financial assistance to her daughter Candelaria in North Carolina. In the last year, the family has sent money "” small amounts ranging from $40 to $80 "” eight times to help Candelaria and her husband, who are both without steady work and recently had a child.

4. Polluter pays? - This link illustrates the power of blogs to get the message out on scandals happening around the world. This collection of pictures from Lu Guang Chinahush.com shows what is going on in China. This one here is just a taste. HT Gertraud via email.

5. Big deficits - The Telegraph's Jonathan Sibun is reporting that large European companies face pension deficits of over a third of a trillion dollars. The ticking timebomb of defined benefit pension schemes is not going away and may actually scuttle British Airways' deal to buy Iberia.

Lloyds Banking Group and Royal Bank of Scotland, the state-backed lenders, are among a raft of large European companies underestimating the size of their pension deficits by a combined €300bn (£268bn).

6. New stimulus - Now Nouriel Roubini is calling in a column in the New York Daily News for a fresh fiscal stimulus in the United States to turn around a dire employment situation. Roubini's call follows one by Paul Krugman. Let's see if Obama, who follows these guys closely, can resist the urge to spend more printed money.

There's really just one hope for our leaders to turn things around: a bold prescription that increases the fiscal stimulus with another round of labor-intensive, shovel-ready infrastructure projects, helps fiscally strapped state and local governments and provides a temporary tax credit to the private sector to hire more workers. Helping the unemployed just by extending unemployment benefits is necessary not sufficient; it leads to persistent unemployment rather than job creation. The long-term picture for workers and families is even worse than current job loss numbers alone would suggest. Now as a way of sharing the pain, many firms are telling their workers to cut hours, take furloughs and accept lower wages. Specifically, that fall in hours worked is equivalent to another 3 million full time jobs lost on top of the 7.5 million jobs formally lost.

7. Hugh Hendry - British fund manager Hugh Hendry is an eccentric type who often says interesting and contrarian things about markets and the global economy. In his latest newsletter he wonders whether the US dollar will keep falling and is sceptical about all those people expecting inflation and rising commodity prices. He predicts deflation, a very weak Japan, a higher US savings rate and falling US trade deficits. He is essentially saying that China is rushing to build too much capacity and that interest rates will have to stay low for a very, very long time.

This is why China's mad dash for commodities and its investment splurge this year is so worrying. In my marketing presentations I show a picture of Madoff superimposed on a dollar bill and ask, ""¦in Bernie we trust?" My point is that if the hedge fund fraudster had been given the responsibility for US GDP accounting, he would surely have overstated the figure. And in a similar way, the rise in leverage has probably misrepresented the truly recurring nature of nominal GDP. Now, if we repeat the Japanese experience then it is possible that nominal US GDP will rise from $14trn today to perhaps just $16trn in ten years time. Along similar lines, the German government does not anticipate its economy exceeding its previous GDP high until 2014. And yet it is as though the other surplus countries are behaving like Bernie's former investors who, believing in the stated NAV and its promise of more of the same (i.e., predictable and attractive compound growth rates), were happy to spend lavishly. The Chinese are building capacity to meet a world where US nominal GDP is $25trn in ten years time. I fear they could be in for a nasty shock.

8. Contingent liability too big to predict - James Kwak at Baseline Scenario has an excellent piece looking at this new idea of forcing banks to issue contingent convertible bonds that turn into equity whenever a 'Too Big to Fail' bank gets into trouble. Kwak refers to an equally excellent article by Gillian Tett at the FT.

Tett is skeptical for all sorts of reasons "” defining the trigger point (remember, Bear and Lehman were well-capitalized on paper when they collapsed), finding people willing to buy these things, the impact on the market of triggering a conversion, etc. I'm skeptical for a more basic reason. Contingent capital, like any other type of capital requirement, assumes that we can predict in advance how bad the crisis will be and therefore how much capital will be necessary to avert a bank-killing panic. That means we have to be able to predict (a) just how fat the fat tail is, based on virtually no data points, and (b) how panicked people can get and for how long. That seems to me technocratic hubris of the first order. So why is contingent capital so popular? (It's even mandated by section 107(b)(1)(D) of the Dodd bill.) Well, the people don't matter don't listen to me or to Gillian Tett. Here is Tett's explanation: "Even amid all those hurdles, the CoCo idea currently has many fans, not just among investment bankers touting for business, but some western regulators too. The reason stems from a big, dirty secret stalking the financial world: namely that while global policymakers have spent a year wailing about the "˜Too Big to Fail' problem, they have hitherto done almost nothing tangible to remove that headache in a credible manner." Tett says what we need is a cross-border resolution system for bank failures. I'm a little skeptical of that too, for reasons I think I've outlined elsewhere. In case I haven't, this is the problem: When push comes to shove, would the U.S. government use whatever "resolution" powers it has to take over JPMorgan Chase or Goldman Sachs against its will (or let an international body do so)? Leaving aside the issue of political connections for the moment, the political hit it would take from the right (SOCIALISM!!!) would make the health care debate look like a friendly game of flag football. If we can't even get meaningful derivatives regulation in 2009, what makes us think that any government would have the political capital to take over one of America's biggest banks when it needed to? More technocratic hubris.

9. The big head fake - Many US companies with 'junk' credit ratings have survived this year by refinancing US$123 billion of debt, the WSJ reports. But things aren't so healthy and the US Federal Reserve's determination to keep interest rates low is the key factor. Fed money printing is effectively propping up dead companies. HT Rolfe Winkler at Reuters.

Many analysts worry the refinancing wave is just "kicking the can" down the road, without fundamentally fixing companies' deeper problems. Among weaker companies, about $1.4 trillion in bonds and loans will still come due in the next five years, said Dominic DiNapoli of FTI Consulting, a business advisory firm. t remains unclear "how long the window will stay open" for weaker companies to borrow, said Barclays Capital restructuring chief Mark Shapiro. "Six months ago, no one thought that many of these companies could access the high-yield market." For the time being, he said, it's helping a lot of companies avoid "bankruptcies that would have otherwise occurred in the next year." Distressed companies were shut out of credit markets in the winter as investors demanded yields on junk bonds that typically exceeded 20%. Now, average yields are closer to 10%, according to the Merrill Lynch U.S. High-Yield Master II Index. The Federal Reserve has helped open up this market by keeping interest rates near zero. If the Fed interest-rate policy were to change, however, debt-laden companies could find it tougher to refinance their billions of dollars in debt coming due. In effect, many of these struggling, debt-hungry companies were saved by the government: By keeping yields so low on safe securities like Treasurys, the government forced investors to buy riskier securities, such as junk bonds, if they wanted a decent return.

10. For no relevant reason - Here is a strangely compelling video of a juggler bouncing balls around a triangle for 6 minutes and 15 seconds. Check your boss is not watching over your shoulder....