Monday's Top 10 with NZ Mint: Saved by shopping centres?; Pleas for IMF help in Currency Wars; The problem(s) with Basel III; Robo-signer crisis; Dilbert

Here are my Top 10 links from around the Internet at 10 past midday, brought to you in association with New Zealand Mint for your reading pleasure.

I welcome your additions and comments below, or please send suggestions for Tuesday's Top 10 at 10 via email to bernard.hickey@interest.co.nz.

I'll pop any surplus suggestions I get into the comment stream.

1. Just what we need - More shopping centres and apartments.

Tony Gapes is planning a NZ$125 million 'retail themed village' at the 5 mile hole he bought from Allied Farmers, Anne Gibson reports at NZHerald.

What is New Zealand investing more in shops and apartments when we need to be investing more in high value exports?

How do we incentivise the right type of investment and discourage the wrong type of investment?

This is why we need a land tax and a capital gains tax. We high value export producing jobs, not more bars and restaurants employing people on minimum wage serving drinks to Australians.

Gapes, of Auckland business Redwood Group, bought the site gradually from Allied Farmers after Henderson borrowed $72.4 million from Hanover to develop Five Mile at Frankton Flats on a 31ha site adjacent to Queenstown International Airport where a new township was planned.

Allied Farmers got involved after buying Hanover businesses. In August, Gapes said he wanted to produce a mixed-use concept on the land. "It will have a specialty retail-themed village anchored by a Countdown supermarket, plus national and international retailers and a residential component. It's a potent mix, designed to attract local and international brands and consumers," Gapes said.

Last week, the Otago Daily Times reported on plans for a 38,000sq m project of two and three-storey levels, a large central carpark and entertainment junction of bars, restaurants and cinemas.  

2. 'Help us please' - The IMF meetings over the weekend included lots of very civilised wailing and gnashing of teeth. Many of the leaders called on the IMF to do something, anything, to stop the currency wars, Bloomberg reported.

US Treasury Secretary Tim Geithner (the gall of the man!) even called on others to do the responsible thing. This from the country that is about to print money in an unprecedented fashion.

The WSJ reckons the meeting failed to resolve the conflict.

Global governments tasked the International Monetary Fund with calming the recent outbreak of tensions over currencies amid signs they are already triggering a protectionist backlash. Officials including U.S. Treasury Secretary Timothy F. Geithner and Egyptian Finance Minister Youssef Boutros-Ghali said the lender should outline how countries can expand their economies without damaging those of other nations.

China is accused of keeping the yuan undervalued to boost exports, while low interest rates in the U.S. and other industrial nations are blamed for propelling capital flows into emerging markets. “The IMF has an important role to play to help ensure that progress toward rebalancing strengthens,” Geithner said in a speech at the IMF’s annual meeting yesterday in Washington. “It is ultimately the responsibility of countries to act, but the IMF must speak out effectively about challenges and marshal support for action.”  

3. Robo-signer update - The Rob-signing scandal in the US housing market continues to bubble along. It's worth watching because it could prove the next trigger point in the Global Financial Crisis. See the Jon Stewart video below for the background.

Attorneys General in 40 states may announce a joint investigation, Bloomberg reports.

Officials in at least seven states have already announced investigations into claims that employees at home lenders and loan servicers signed court documents without ensuring the information was accurate. Yesterday, Miller said in a statement that he was working with state officials, banking regulators and the U.S. Justice Department to launch a coordinated review. Attorneys general in Ohio and Connecticut have said some of the practices may amount to fraud.

Bank of America, JPMorgan Chase & Co. and Ally Financial Inc. already froze foreclosures in 23 states where courts supervise home seizures amid allegations that employees used unverified or false data to speed the process.

4. Extend and Pretend - The IMF is now considering extending Greece's emergency loan package, Bloomberg reports.

The International Monetary Fund may transform its loan to Greece into a longer-term repayment plan, a move that would allow the country to pay its loan back later without restructuring, European Central Bank Executive Board member Lorenzo Bini Smaghi said.

“The IMF is certainly thinking of these issues,” Bini Smaghi said in a speech in Washington. “There are mechanisms in the IMF to prolong packages.”

5. Graeme Hart's timing is perfect - Investors put off by record low US Treasury yields and scared stiff of the stock market's propensity for 'flash crashes' are moving hand over fist into junk bonds, Bloomberg reports. Graeme Hart's Reynolds issued over US$3 billion of junk bonds last week to fund a big acquisition. This is the problem with very low official interest rates. Eventually they force people into riskier investments in the hunt for yield.

Sound familar? I reckon one of the reasons for the finance company debacle was relatively low interest rates from 2004 to 2008, which forced many Mums and Dads out away from banks to higher returns in finance companies. This is one of the big risks of interest rates being held artificially low by central banks.

At least $13.2 billion of junk bonds have been sold this month, bringing the global total to an all-time high of $263.5 billion, 26 percent higher than the full-year record set in 2009, Bloomberg data show. Junk bond sales in the U.S. have reached $208.9 billion this year, the data show. The comment below is excellent. Holy Mackerel indeed.

“This is obviously a case of too much money chasing too few good bonds,” said Don Ross, who helps oversee $9.5 billion of assets as global strategist for Titanium Asset Management Corp. in Cleveland.

“It’s just money changing hands and corporations being the net gainer by being able to issue cheaper and have better balance sheets. In the long run that will help the economy, but holy mackerel, at what cost?”  

6. Basel III to restrict exports? - This is an angle on the Basel III I haven't seen before. The regulations will make it harder for exporters to get trade finance, Dun and Bradstreet reckons, as reported by The Australian.

A report by Dun & Bradstreet, released exclusively to The Australian, argues that with new proposed capital ratio buffers to apply to traditional trade finance facilities, banks will increasingly pass on the costs to customers or even cut back their lending.

As a result, exporters could be forced to take on the funding role, and the risks associated, according to the global data agency that holds credit information on more than 165 million companies.

7. Individual regulators look to accelerate Basel III - Central bankers are looking to accelerate the very delayed timetable for tougher capital rules agreed by the Basel committee known as the Basel III rules, Bloomberg reported. All this means that funding will be harder to get globally in the next couple of years and more expensive. This is how deleveraging will inevitably work its way through the system.

Central bankers from Switzerland and Canada told bank executives to expect more global financial rules, especially for the largest institutions. Switzerland’s Philipp Hildebrand, president of the Swiss National Bank, and Bank of Canada Governor Mark Carney told a panel of chief executives that included Bank of America Corp.’s Brian Moynihan that the agreement reached in Basel by international regulators represented the “minimum,” according to Carney.

“There is unfinished business that is pretty important,” Carney said yesterday at a panel discussion in Washington. Banks worldwide are grappling with the new rules approved in September by regulators, meeting as the Basel Committee on Banking Supervision. New minimum capital requirements take effect in less than five years. The banking industry persuaded regulators to soften rules after a lobbying campaign, pushing off implementation of some requirements for about a decade.

8. Will the BRICs save us? - Harvard Dani Rodrik at Project Syndicate thinks not. Here's his thinking.

China, in particular, needs to confront the fact that the rest of the world will not allow it to run a huge trade surplus forever. An undervalued currency, which serves to subsidize China’s manufacturing industries, has been a key driver of the country’s economic growth for the last decade. A significant appreciation of the renminbi will reduce or even eliminate that growth subsidy. Regardless of developing countries’ growth prospects, there is a deeper question.

Will a world economy in which developing countries have substantially greater weight foster the kind of global governance that sustains a hospitable economic environment? Emerging-market economies have not yet shown the kind of global leadership that suggests an affirmative answer to this question. Countries like Brazil, China, India, and South Africa, however, have so far shown little interest in contributing to the construction of global regimes, preferring to remain free riders. Jorge Castañeda, a former foreign minister of Mexico, goes further, arguing that these countries have systematically opposed global rules, in areas ranging from climate change to international trade.

Lest we be too harsh on developing countries, however, let us also remember that political scientists have long worried that greater diffusion of economic power would produce a less stable world economy. If the world economy’s center of gravity shifts substantially toward developing countries, this will not be a smooth – and possibly not even a benign – process. We can be certain of two things: only those countries that adopt growth strategies based on stimulating domestic structural change will do well, and the conundrum of global governance – how to manage a world economy that has become unruly – will almost certainly get worse.

9. Robert Reich talks about the next economy and America's future in this video - HT Kevin via IM.

10. Very Relevant Video - Jon Stewart looks at the US Foreclosure crisis. He nails it. Must watch, in my view.