Here are my Top 10 links from around the Internet at 10am. I welcome your additions and comments in the comments below or send your suggestions for Monday's Top 10 at 10 to bernard.hickey@interest.co.nz We don't have a couch at interest.co.nz. We do have bar stools... 
1. The moratorium idea pioneered in New Zealand is catching on elswhere. Cerberus, the giant hedge fund that invested in Chrysler, has stopped withdrawals from two of its funds, the FT reported. Good to see we're leading the way again. HT Mouse via email. 2. I'm not sure we can take seriously any financial advice from the French, who run chronically high unemployment rates, but President Nicolas Sarkozy reckons the days of the US dollar's reserve currency status are numbered. The Trumpet.com reports the franco-gloating. HT Mouse via email.
French President Nicolas Sarkozy said that the dollar cannot remain the world's only reserve currency as America loses its global dominance. "The political and economic reality of a multipolar world will have to find sooner or later a translation on the monetary level," said Sarkozy to foreign ambassadors at a reception in Elysee Palace last Wednesday. "A multipolar world can't count upon one currency only."
3. Barack Obama wants banks to put aside more capital in future, the New York Times reports. I wonder how long that lasts before the lobbyists monster him.
So after propping up lenders with billions of taxpayer dollars, the Obama administration is contemplating long-term measures aimed at preventing, or at least minimizing, any future financial crisis. The thrust of the plan is to have banks, particularly those deemed too big to fail, maintain larger capital cushions "” a move bankers have traditionally opposed because it eats into their profits. The Treasury secretary, Timothy F. Geithner, is expected to outline the administration's proposals Thursday in a letter to the finance ministers of the Group of 20 industrial and emerging nations, who are scheduled to meet in London this week.
4. China is buying 30 billion of SDRs (Special Drawing Rights) worth around US$50 billion from the IMF, the People's Daily Online reported. HT Gertraud. The push to buy anything but US Treasury bonds is on in earnest. 5. Also in the same vein, Hong Kong has announced it is withdrawing its holdings of gold bullion from depositories in London and is moving them to a purpose built vault near Hong Kong's airport, MarketWatch reported. HT Darin Grenz and Troy Barsten via email.
Marketing efforts will be launched to convince Asian central banks to transfer their gold reserves to the Hong Kong facility, according to reports citing Raymond Lai, finance director with the Hong Kong Airport Authority. Efforts will also be made to reach out to commodity exchanges, banks, precious-metals refiners and ETF providers, the reports said. Management firm Value Partners planned to launch an ETF gold fund that will use Hong Kong instead of London as a repository for the gold backing the fund, local reports said Thursday.
6. This is a painfully amusing report in hindsight from The Guardian on what went wrong in the days before the collapse of Lehman Brothers in September. It seems the US and British governments couldn't get their act together. But here's the scariest thing in the whole article.
The UK tripartite authorities were concerned about the financial system in the spring of 2007 and asked their American counterparts to participate in a "war game" to prepare for the collapse of a major US bank and develop a response to a financial crisis. However, the war game, which was to have included the UK, Switzerland, the Netherlands and the US, never took place because of a lack of willingness to participate by the US regulatory bodies.
7. Tyler Durden (who is a variety of people it seems) at Zerohedge points out that Wells Fargo's commercial mortgage portfolio is on the verge of implosion. Wells Fargo is one of the too big to fail banks. Tyler also points out that total US loans have dropped US$110 billion the last quarter. The great deleveraging continues. 8. The US Treasury has announced plans to sell US$128 billion of debt in September, with much of it next week, Zerohedge writes. This will be one to watch closely, given the US Federal Reserve's money printing bucket is running low. Will the Chinese step up to buy? Will the US dollar crash?
With $25 billion in remaining Fed buybacks, September will be a very interesting month indeed: the Treasury portion of QE will likely be exhausted by the end of next week via POMOs: one only hopes China sees this as a positive development.As a point of reference, August saw $272 billion in new issues, while September's runrate is now at $384 billion (and a $4.6 trillion annual runrate).
9. The ratings agencies are now in trouble because a court has ruled they cannot use the 'first amendment' defense of freedom of speech to argue against law suits, the WSJ reports. It couldn't have have happened to a nicer bunch of credit rating agencies...
Shares in two companies that own credit-rating agencies, Moody's Corp. and McGraw-Hill Co., tumbled Thursday in reaction to a court decision that rejected the agencies' longtime claim that the First Amendment protected them from lawsuits. The ruling is expected to spur more lawsuits and could apply to structured investment vehicles once valued as high as $400 billion. McGraw-Hill, which owns Standard & Poor's, fell 10% and Moody's fell 7% in New York Stock Exchange composite trading. The firms had long argued that their ratings of securities were Constitutionally protected opinion. But U.S. District Judge Shira Scheindlin ruled Wednesday in a 68-page opinion that the ratings of certain securities--those that were distributed to a limited number of investors--don't deserve the same free speech protection as more general ratings of corporate bonds that were widely disseminated.
10. David Reilly from Bloomberg has a very interesting opinion piece on how US banks should be bringing US$1 trillion of assets back onto their balance sheets.
Banks have known for a while that they would eventually have to face up to some of the assets they had stashed in off-balance-sheet vehicles. Now that day is looming, and regulators are concerned that lenders might need even more time to deal with such items. Enough already. It's time for banks, and their regulators, to stop playing kick the can. Either banks have -- or can get -- the capital they need to support assets on their books, or government watchdogs should take action. Instead, regulators last week raised the prospect of giving banks a one-year, phase-in period to fully recognize for capital purposes what may be about $1 trillion in assets coming back onto balance sheets next year. This breathing room may ostensibly help some banks avoid having to quickly beef up regulatory capital, the buffer that helps them absorb losses. Such a delay is unwarranted. Banks have had almost two years to prepare for accounting-rule changes adopted this spring that will place greater restrictions on the use of off-balance- sheet vehicles.
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.