Top 10 at 10: 'Your coal's here'; Chinese table salt; Worse than Enron?; Bernanke lashed; 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 Monday's Top 10 at 10 to bernard.hickey@interest.co.nz My apologies for major lateness today. My cubicle was surrounded by loud idiots who made it impossible for me to concentrate on my work....(not really but it's one of the better excuses) 1. Woops - Here is an apparently true story (can't vouch for it) about a commodity trader called 'Brad' at 'Æxecor, one of the world's largest commodities trading houses. He knew better than his back office staff and demanded a coal trade went through, even though an IT cockup meant 'actual' coal would be delivered. This is from dailywtf.com . It's written like an urban myth, but you never know... HT Will de Cleene via email.

For once, Brad was speechless. He had absolutely no idea who that man was and he could hardly understand a word he said. Plus, there was that gargantuan vessel that was slowly moving towards the building. "Uhh," he stuttered, "wait. Are you delivering"¦ coal? To"¦ uhh, us?" "Well, yeah! Twenty-eight thousand tons of the good ol' black gold!" The workman sarcastically furrowed his brow adding, "I mean, we did get the right address, har har. This is Æxecor? And this is Pier 53? And you are Brad, the fella who ordered it, right?" It was that moment that Brad's palm almost immediately made contact with his forehead. He realized that something must have really gone awry: instead of virtually trading 28,000 tons of coal, Brad had somehow ended up with 28,000 tons of real coal. As it turned out, it was more difficult than Brad could have ever imagined to sell real coal. The commodities market really only deals in futures, and everyone who actually needs 28,000 tons of coal has bought it long in advance. And besides, who wants to buy coal from some guy named Brad? Eventually, after paying exorbitant wharfing, shipping, environmental, docking, unloading, loading, and multiple-fee fees, Brad was finally able to unload it for twenty cents on the dollar.

2. Chinese salt scandal - New Zealanders are very familiar with the scandal in China around milk powder contaminated with melamine. But here's a new one where salt 'counterfeiters' bought industrial salt and parcelled it up and sold it off as edible salt (sans iodine). ChinaDaily has the story, including the little nugget that China is the world's largest salt producer. HT Troy Barsten via email

They divided the industrial salt into small packages in Chongqing, and then sold them to local wholesalers. The packages were sophisticatedly counterfeited and updated regularly, making it hard for them to be distinguished from authentic products, investigations showed. In China, edible salt must be iodized, besides conforming to other relevant national standards. Industrial salt, which does not contain iodine, can affect people's mental and physical development, and also impairs reproductive function.

Yikes. Although there are no reports of health problems...yet. 3. Dubai fallout? - Players at Premier League team Portsmouth have not been paid for the second month running. The club is now owned by Saudi businessman Ali Al-Faraj, who bought a 90% stake recently from Dubai businessman Sulaiman Al-Fahim, who remains as executive chairman of the club, the BBC reported. Oh dear. HT Alex via IM. 4. Apartment rentals anyone? - Ben Heather at The Press reports that apartment owners near Wanaka are grumpy with South Canterbury Finance and the manager of their apartments.

South Canterbury Finance (SCF) blocked payment to apartment owners at the troubled Oakridge Resort near Wanaka for more than a year, the former developer said. Managed apartment owners had a lease agreement with Oakridge developer Par Hallberg for a 40 per cent share of revenue from their apartments. But Hallberg said he was prevented from paying the apartment owners by his financier SCF last December. "The bank said if that was paid they were going to close the company," he said. Unsecured creditors, including some apartment owners, have said they are owed $387,989 by Hallberg's companies. None is expected to get money back.

5. Worse than Enron? - Nomi Prins, a former MD at Goldman Sachs, has written a book called It Takes a Pillage: Behind the Bonuses, Bailouts, and Backroom Deals from Washington to Wall Street In this piece at TheDaily Beast she writes that 'Wall Street's big banks are playing dangerous new accounting games"”and this time taxpayers are on the hook for hundreds of billions.' HT Gertraud via email.

As the largest Wall Street banks return to profitability"”in some cases, breaking records"”they say everything is rosy. They're lining up to pay back their TARP money and asking Washington to back off. But why are they doing so well? Remember that Enron got away with their illegalities so long because their financials were so complicated that not even the analysts paid to monitor the Houston-based trading giant could cogently explain how they were making so much money. After two weeks sifting through over one thousand pages of SEC filings for the largest banks, I have the same concerns. While Washington ponders what to do, or not do, about reforming Wall Street, the nation's biggest banks, plumped up on government capital and risk-infused trading profits, have been moving stuff around their balance sheets like a multi-billion dollar musical chairs game. Goldman Sachs and Morgan Stanley, for example, altered their year-end reporting dates, orphaning the month of December, thus making comparison to past quarterly statements more difficult. In the cases of Bank of America, Citigroup and Wells Fargo, the preferred tactic is re-classification and opaqueness. These moves make it virtually impossible to get an accurate, or consistent picture of banks "˜real money' (from commercial or customer services) vs. their "˜play money' (used for trading purposes, and most risky to the overall financial system, particularly since much of the required trading capital was federally subsidized). Goldman Sachs and Morgan Stanley, for example, altered their year-end reporting dates, orphaning the month of December, thus making comparison to past quarterly statements more difficult. In the cases of Bank of America, Citigroup and Wells Fargo, the preferred tactic is re-classification and opaqueness. These moves make it virtually impossible to get an accurate, or consistent picture of banks "˜real money' (from commercial or customer services) vs. their "˜play money' (used for trading purposes, and most risky to the overall financial system, particularly since much of the required trading capital was federally subsidized).

6. Global trade collapse - A report by VoxEu on global trade shows how quickly trade collapsed in 2008 and what may happen next, ZeroHedge points out. The charts below tell the story.

The great trade collapse is not as large as that of the Great Depression, but it is much steeper. It took 24 months in the Great Depression for world trade to fall as far as it fell in the 9 months from November 2008. What does the great trade collapse mean for the world economy? The authors of this Ebook present a remarkable consensus on this. Three points are repeatedly stressed: Global trade imbalances are a problem that needs to be tackled. One group of authors (see the chapters by Fred Bergsten, by Anne Krueger, and by Jeff Frieden) sees them as one the root causes of the Subprime crisis. They worry that allowing them to continue is setting up the world for another global economic crisis. Fred Bergsten in particular argues that the US must get its federal budget deficit in order to avoid laying the carpet for the next crisis. Another group points to the combination of Asian trade surpluses and persistent high unemployment in the US and Europe as a source of protectionist pressures (see the chapters by Caroline Freund, by Simon Evenett, and by Richard Baldwin and Daria Taglioni). The chapter by O'Rourke notes that avoiding a protectionist backlash will require that i) the slump ends soon, and ii) severe exchange rate misalignments at a time of rising unemployment are avoided. Governments should guard against compliancy in their vigil against protectionism. Most authors mention the point that while new protectionism to date has had a modest trade effect, things need not stay that way.

7. Abu Dhabi next? - Reuters reports that years of chasing business in Dubai's property boom means Abu Dhabi banks have built up an exposure to Dubai-based companies worth at least 30 percent of their loan books. Here's the ominous bit buried in the last three paragraphs of the story. A predicted run on Abu Dhabi's banks.

The resulting risks and stresses are likely to drive up interbank lending costs, even provoke a stop on lending to some banks seen by others to be at risk. "There will certainly be greater pressure on banks and an expected run on deposits and reduced lending," said Ghanem Nuseibah, senior analyst at consultancy Political Capital. Although unwarranted, some customers may pull their money out of banks to avoid any risk, said Dmitry Levshenkov, treasurer at Citibank in Bahrain. "We may experience within the next few days or weeks possibly banks unwilling to lend to each other, and hopefully we will avoid a customer lack of confidence or crisis where customers are taking deposits out," he said.

8. Every man for himself - This is a nice profile of libertarian congressman Ron Paul in The Independent. He's the guy behind the audit the Fed movement. Good on him.  HT Greg Elliott via email.

Dismissed last year as the token nutjob in the line-up of Republican presidential candidates, his insurgent campaign proved surprisingly tenacious. Young people at music festivals wore "Dr Paul cured my apathy" badges, he spawned an internet fund-raising movement that had echoes of Barack Obama from the other side, and to this day he has a stronger YouTube presence than any other Republican politician. To the extent that Paul is known outside the US, it is as the poor guy propositioned in a hotel room by a trouser-less Sacha Baron Cohen, in his movie Brüno. Paul flees, shouting: "he's queer, he's crazy, he hit on me". But in the US, his books now become instant best-sellers and he tours university campuses pushing a libertarian agenda. Where once he believed he was seeding the ground for a movement that would triumph well after his own career is over, to his own astonishment, policies he has espoused to almost universal ridicule for decades might just be about to go into law. "Remember that the pound got into trouble after World War I and lost supremacy around the world. The Bank of England blew that currency, and we're blowing ours; the British ended their empire because of too much spending and mismanagement and now we're ending ours. Our central bank is supposed to give us sound economic growth, low unemployment, steady interest rates and price stability. They've failed totally and utterly."

9. 'The definition of moral hazard' - Everyone in the United States has been watching the bunfight in the Senate overnight  around Ben Bernanke's reconfirmation hearings. One Republican unleashed on Helicopter Ben in a particularly pungent (and brilliant) way, WSJ.com's Real Time Economics points out. HT Felix Salmon at Reuters, who points out this is electrifying stuff. It would be fun in our parliament too. Can you imagine a Labour politician saying these things to Alan Bollard's face?

Chairman Greenspan sold the Fed's independence to Wall Street through the so-called "Greenspan Put". Whenever Wall Street needed a boost, Alan was there. But you went far beyond that when you bowed to the political pressures of the Bush and Obama administrations and turned the Fed into an arm of the Treasury. Under your watch, the Bernanke Put became a bailout for all large financial institutions, including many foreign banks. And you put the printing presses into overdrive to fund the government's spending and hand out cheap money to your masters on Wall Street, which they use to rake in record profits while ordinary Americans and small businesses can't even get loans for their everyday needs. You have decided that just about every large bank, investment bank, insurance company, and even some industrial companies are too big to fail. Rather than making management, shareholders, and debt holders feel the consequences of their risk-taking, you bailed them out. In short, you are the definition of moral hazard.

10. Completely irrelevant video - Further to the Christmas robot video from a few days back, here is a robot doing Michael Jackson's Thriller. Don't look too closely at the blinking red light... I love it when the cute little bugger falls over. He gets back up again through some miracles of modern engineering. If only the Japanese could build an economy that worked this well. HT Tama Easton via Twitter.