Top 10 at 10: How China cooks its books; Goldman banker pays £500k for escort; Baby-boomer exit plan?; Dilbert

Here are my top 10 links from around the Internet at 10am (early edition). I welcome your additions and comments in the comments below or please send suggestions to bernard.hickey@interest.co.nz. We don't employ lawyers at interest.co.nz... 1. Here's how China cooks the books, according to Foreign Policy. HT Kevin. It seems only people made redundant are counted as unemployed, while those who 'resign' are not counted. Friendly companies and local governments pay bribes to workers to ensure they 'resign'.

Such open-secret programs, writ large, help China manipulate its unemployment rate, because workers who "resign" don't count toward that number. The government estimates that roughly 20 million migrant factory workers have lost their jobs since the downturn started. But, with "resignations" included, the number is likely closer to 40 million or 50 million, according to estimates made by Yiping Huang, chief Asia economist for Citigroup. That is the same size as Germany's entire work force. China similarly distorts everything from its GDP to retail sales figures to production activity. This sort of number-padding isn't just unethical, it's also dangerous: The push to develop rosy economic data could actually lead China's economy over the cliff. Indeed, China has predicated its very claim of being the healthiest large economy in the world on faulty statistics. The government insists that even though China's all-important export sector has been devastated -- contracting about 25 percent in the past year -- a massive uptick in domestic consumption has kept factories producing and growth churning along. A close examination of retail sales and GDP growth, however, tells a different story. China's domestic retail sales have risen about 15 percent year on year, but that does not really translate into Chinese consumers purchasing 15 percent more televisions and T-shirts. The country tabulates sales when a factory ships units to a retailer, meaning China includes unused or warehoused inventory in its consumption data. There is ample evidence that state-owned enterprises buy goods from one another, simply shifting products back and forth, and that those transactions count as retail sales in national statistics.

2. Alan Greenspan is talking again to the BBC about how the global crisis was not his fault. Apparently it was human nature that forced him to run interest rates at 1% for a couple of years and to ignore the madly high leveraging of the investment banks. It could happen to any human central banker. Alan Bollard perhaps? He's human, it seems.

During the interview for BBC Two's The Love of Money series, the former Fed chief said the current economic crisis was a "once in a century type of event", and one that he did not expect to witness. Blamed by some for not doing more to prevent the crisis, Mr Greenspan denied any responsibility for the problems gripping the global economy. "It's human nature, unless somebody can find a way to change human nature, we will have more crises and none of them will look like this because no two crises have anything in common, except human nature."

3. Here's an indication of the approach to life of a Goldman Sachs investment banker in London: any woman can be convinced to leave their husband for half a million quid, even an escort, the Telegraph reported. It seems there's nothing that money can't buy. The picture to the left is of the investment banker and his escort. HT Trev for finding the pic. I looked last night and couldn't see. The picture below is of the jilted husband. He doesn't look very happy.

Yann Samuelides, a leading investment banker, offered another man's wife £500,000 to leave her husband and set up home with him, a court has heard. Mr Samuelides, a managing director at Goldman Sachs, allegedly offered the money to Alzbeta Holmolkova, 28, as a "bribe", as well as showering her with lavish gifts and renting a flat for her. Miss Holmokova, a former escort girl, has now filed for divorce.

4. The Wall St Journal goes all sarcastic with this mock congratulations letter to Fed Chairman Ben Bernanke from China's Ministry of Finance upon the occasion of Bernanke's reappointment.

...with the deepest respect, we also note with concern your decision this year to purchase U.S. Treasurys, which directly monetizes the debt built up by irresponsible democratic politicians. (This is one reason we Chinese are so skeptical of democracy; it always leads to a welfare state!) We must admit that that Treasury decision caught us by surprise, considering the many lectures over the years from our American friends about the importance of an independent central bank. Then again, the last year has seen America do many things that we once thought a capitalist economy would never do, wouldn't you agree? With this in mind, we have decided to hedge our dollar bets and buy gold, oil and other commodities which will rise in value if the dollar falls. You may have therefore noticed that oil has risen above $71 a barrel, despite slack global demand, and in particular that gold has climbed this week above $1,000 an ounce. Perhaps you have seen reports that we Chinese are doubling our reserves of gold and buying other related metals. Please do not be alarmed. This is the normal process of diversification that any trillion-dollar creditor would take, just in case the Federal Reserve's definition of an "extended period" for monetary easing turns out to be even more extended than we already assume it will be. We will only be too happy to cease this flight from dollar assets when we observe your determination to tighten money; surely this must be why President Obama selected you over the distinguished White House economic adviser, Lawrence Summers.

5. This is an evocative series of snapshots at Fortune from financial newsmakers on what was happening almost exactly a year ago when Lehman Bros collapsed. Here is Mohamed El-Erian, the CEO of the world's biggest bond fund manager PIMCO. Yikes.

On the Wednesday and Thursday after Lehman filed for Chapter 11, I asked my wife to please go to the ATM and take as much cash as she could. When she asked why, I said it was because I didn't know whether there was a chance that banks might not open. I remember my wife sort of pausing and saying, "Are you serious?" And I said, "Yes, I am." We had long felt that the world was increasingly in disequilibrium, and by March of 2008 we decided that things were critical and that the unthinkable was thinkable.

6. I don't normally link to articles about foreign policy, but this is a cracker from the Financial Times that calls Barack Obama 'President Procrastinator'.

As for the administration's efforts on Middle East peace, Mr Brzezinski's frustration is all too clear. "So much time has been spent diddling around," he says, arguing that an "evasive compromise" on settlements will do little to advance a final agreement. "I haven't given up hope, but hope isn't everlasting," he says, mournfully.

7. Vanity Fair is doing some great stuff on the financial crisis. Here is a long piece on how America's TARP bailout funds have simply been 'Good billions after Bad'. It's well worth reading to find out how US taxpayers must be feeling. I wonder if our own Treasury made some of the same mistakes in agreeing to deposit guarantees in an awful hurry for some of our finance companies. Luckily our bailout was on a much smaller scale.

As the Bush administration waned, the Treasury shoveled more than a quarter of a trillion dollars in tarp funds into the financial system"”without restrictions, accountability, or even common sense. In the report that follows, we have no more than dipped a toe into the morass, but one fact emerges clearly: a lot of the money wound up in the coffers of some very surprising institutions"” institutions that should have been seen as "troubling" as much as "troubled." With few restrictions or controls in place, bailout money found its way not only to banks that didn't really need it but also to banks whose business practices left much to be desired. On November 21, $180 million in tarpmoney wound up in the affluent seaside community of Santa Barbara, California. The tarp dollars flowed mostly into the coffers of a beige, Spanish-style building on Carrillo Street, home to the Santa Barbara Bank & Trust. This might appear to be just the kind of regional bank that Treasury had in mind as an ideal beneficiary of tarp. The bank has been a fixture in Santa Barbara for decades, serving small businesses as well as wealthy individuals. It sponsors Little League teams, funds scholarships to send local kids to college, and takes an active role in community groups. It plays up its "longstanding commitment to giving back to the communities we serve." How much tarp money made its way through S.B.B.&T. and into the local community is not known. But, as it happens, the bank also operates a little-known and controversial program far from the lush enclaves of Santa Barbara. Like an absentee landlord, the community bank with the "give back" philosophy in Santa Barbara turns out to be a big player in poor neighborhoods throughout the country. And not in a nice way. Outside Santa Barbara, S.B.B.&T. peddles what are known as refund-anticipation loans (rals)"”high-interest loans to the poor that are among the most predatory around.

8. Here's what America's collapse in consumer credit looks like in chart form, thanks to FTAlphaville and the good folks at Bloomberg. Americans shopped til they dropped and now they don't shop no more. 9. Interest only loans appear to be the next penny to drop in the United States, the New York Times reports. I wonder how many interest only loans were made in New Zealand's housing boom?

An analysis for The New York Times by the real estate information company First American CoreLogic shows there are 2.8 million active interest-only home loans worth a combined total of $908 billion. The interest-only periods, which put off the principal payments for five, seven or 10 years, are now beginning to expire. In the next 12 months, $71 billion of interest-only loans will reset. The year after, another $100 billion will reset. After mid-2011, another $400 billion will reset. John Karevoll, a longtime senior analyst for MDA DataQuick, sees the plight of interest-only owners this way: "You're heading straight for a big wall and you can't put the brakes on."

10. America's Congressional Budget Office reckons a big sell off of assets or a slackening of demand for assets by retiring baby-boomers is unlikely. Firstly, most of the wealth is held by the very rich and they don't need to sell them. Secondly, baby-boomers are likely to retire later and spread out any asset sales over time. Finally, there'll be plenty of foreign demand for these US assets from those in developing markets. Or so the theory goes...

Some economists have warned of the possibility of a dramatic decline in demand as baby boomers sell off their assets to finance their retirement; they assert that the sell-off could cause a dramatic decline in prices. An evaluation of the evidence, however, indicates that such a dramatic decline in asset demand and prices is unlikely.