Here are my Top 10 links from around the Internet at 10 to 1 pm, 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 Friday'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. The problem in America - Stepping back from the Fed's financial action this morning, it's worth looking at the problems on the street (or in this case under the street) in America.
This Daily Mail piece on how 1,000 people live in the flood tunnels under the Strip in Las Vegas is an eye opener.
The symbolism is startling.
Flashy consumerism and spending fueled by debt above ground: destitution and squatting in the tunnels below ground.
HT My wife who spends far too much time reading the Daily Mail.
Deep beneath Vegas’s glittering lights lies a sinister labyrinth inhabited by poisonous spiders and a man nicknamed The Troll who wields an iron bar.
But astonishingly, the 200 miles of flood tunnels are also home to 1,000 people who eke out a living in the strip’s dark underbelly.
Some, like Steven and his girlfriend Kathryn, have furnished their home with considerable care - their 400sq ft 'bungalow' boasts a double bed, a wardrobe and even a bookshelf.
“The big issue for them was the substantial appreciation in the New Zealand dollar,” Key, former global head of foreign exchange at Merrill Lynch & Co. Inc, told reporters after the deal with Warner.
“That’s something that a lot of our exporters are struggling with.”
So if Key realises the currency is a major issue, why isn't he doing something about it?
It's not good enough to simply say it's hard and we can't do anything.
Nothing is not an option.
Or we can just wait to get beaten up.
At least Key did something to keep the Hobbit.
So let's do something to keep our currency from heading towards parity with the US dollar.
3. Here's what we should be doing - This is a great story from Juha Saarinen at NZHerald about a New Zealander who has made a fortune making and selling an iPhone game. Inspirational really.
Here's the longer version, which is really worth a read for anyone wanting to know what it takes to be an exporter in a mobile and clouded age. HT Rowan Simpson via Twitter.
A helicopter game created by New Zealand iPhone and iPad developer David Frampton has taken off. The latest version of Chopper 2 sells for US$2.99 and has performed well on the iTunes App Store charts.
Despite the low price, Frampton's one-man-band, Majic Jungle Software, is making good money out of Chopper. "The first iPhone version has sold over 350,000 and had well over a million downloads if you include the lite version," Frampton says.
4. 'Buying reasonably short' - 30 Year US Treasury bond yields actually rose quite sharply after the Fed's QE II announcement as investors realised a lot of the buying would be of shorter term bonds, Bloomberg reported.
The Treasury 30-year bond fell the most in almost two months after the New York Fed said in a separate statement that 86 percent of its purchases will target bonds coming due in 2 ½ to 10 years. “Only a small fraction of the buying will be beyond the 10-year note,” said Paul Zemsky, the New York-based head of asset allocation for ING Investment
Management, which oversees $550 billion.
Assets will have an average duration of five to six years, and the central bank temporarily relaxed a 35 percent per-issue limit on its securities holdings “to provide operational flexibility” and buy the “most attractive securities on a relative-value basis,” the New York Fed said.
5. The curious May Wang - The NZHerald's Kelly Gregor reports that May Wang and UBNZ are already receiving revenues from Fonterra but aren't declaring them to the IRD...
And it seems she has received money from 'friends and associates' that she doesn't want to disclose.
Oh dear.
No wonder the Serious Fraud Office is investigating.
Wang is seeking court approval to pay her creditors 6.5c in the dollar, but the IRD wants her bankrupted over a $1.3 million debt it is owed. Today, Wang's lawyer Paul Sills will cross-examine his client on her tax dealings. Wang said Natural Dairy's proposed sale and purchase of a dozen Crafar farms would fall over if she was bankrupted. UBNZ Asset Holdings already owns four Crafar farms it bought this year.
Natural Dairy owns 20 per cent of UBNZ.Wang has been given $500,000 in future earnings from UBNZ and $800,000 from "friends and associates" for the creditors' proposal. She would not openly disclose where the $800,000 had come from, saying she promised those people anonymity due to the intense public interest and media scrutiny on her, UBNZ and Natural Dairy.
6. Aussie govt vs Aussie banks - The Australian government continues to vent its spleen at Commonwealth Bank of Australia's decision to lift its floating mortgage rate by 45 basis points in the wake of the Reserve Bank of Australia's 25 basis point hike.
Ralph Norris may have his head down but all the Aussie banks are copping it.
The drum is beating for more regulation across the Tasman.
Here's The Australian reporting on comments from Treasurer Wayne Swan.
WAYNE Swan wants to include backing for the mortgage bond market and a new safety net to replace bank deposit guarantees. These will be in the Treasurer's plan to force more competition into the banking sector.
Taking an aggressive stance before heading to Beijing, Mr Swan yesterday warned the nation's big four banks that they should not underestimate his determination to push through changes designed to discipline them and assist their competitors.
"It will put pressure on the major banks to behave in a better way and to ensure that their competitors can provide the fierce competition which existed prior to the global financial crisis," Mr Swan said.
The Treasurer said the crisis had weakened smaller institutions and the challenge was to provide them with a source of cheaper funding. "We do live in a society where we do not directly regulate interest rates, so what the government will do in response to this very arrogant action from the Commonwealth Bank is put in place a further raft of reforms that empower consumers and make sure we get the most competitive outcomes, and that's what we're going to do," Mr Swan said.
7. 'I'm calling your bluff' - Tim Colebatch at The Age reckons Norris may be calling the Australian Government's bluff with some success.
The only real threat to the Australian banks is some Aussie version of KiwiBank. That's possible with former NAB banker Ahmad Fahour appointed recently as the CEO of Australian Post, but not yet. Danny John at BusinessDay thinks Fahour might have a go. We'll see.
Here's Colebatch on that bluff.
Norris has bet that, in the end, their bank-bashing will be mostly talk, little action. And he is probably right.
The big four are now a firm oligopoly, controlling 87 per cent of housing loans. Since the mid-90s, our competition regulators have allowed them to gobble up their main rivals, and the global financial crisis saw off the rest.
Joe Hockey's nine-point plan has some good elements - such as a new financial system inquiry - but let's be frank: their impact would be marginal.
There's only one way to create serious competition to such a strong cartel: do what prime minister Andrew Fisher did in 1911, when he set up the Commonwealth Bank as a government-owned competitor. Our politicians won't do that.
8. Even Iran is buying gold - Saudi Arabia recently announced it had doubled its gold holdings to 323 tonnes.
Now Iran is quietly increasing its stockpile of the precious metal in case the US dollar implodes under the weight of all this paper being printed right now, the Mehr News Agency reports.
“Provided that the World Bank statistics are true any country with this amount of reserves would never hit a dead end, ISNA news agency quoted Bahmani as saying.
“It may be possible to exert pressure on a small country with $4-5 billion reserves, but the situation in regard to Iran is different, he said in a reference to efforts by Western countries pressure Iran financially.
9. A financial joke - HT Alex's Grandfather for this joke at the expense of Royal Bank of Scotland (and the British taxpayer...)
The Banking Crisis simply explained...
Young Paddy bought a donkey from a farmer for £100.
The farmer agreed to deliver the donkey the next day...
The next day he drove up and said, 'Sorry son, but I have some bad news. The donkey died!
Paddy replied, 'Well then just give me my money back.'
The farmer said, 'Can't do that. I've already spent it.'
Paddy said, 'OK, then, just bring me the dead donkey.'
The farmer asked, 'What are you going to do with him?'
Paddy said, 'I'm going to raffle him off.'
The farmer said, 'You can't raffle a dead donkey!'
Paddy said, 'Sure I can. Watch me. I just won't tell anybody he's dead.'
A month later, the farmer met up with Paddy and asked, 'What happened with the donkey?
Paddy said, 'I raffled him off.
I sold 500 tickets at two pounds a piece and made a profit of £898'
The farmer said, 'Didn't anyone complain?'
Paddy said, 'Just the guy who won.
So I gave him his two pounds back.'
Paddy now works for the Royal Bank of Scotland .
10. Totally relevant video - Jon Stewart does his thing on the mid-term election results. 'Maybe we can't.'
| The Daily Show With Jon Stewart | Mon - Thurs 11p / 10c | |||
| Indecision 2010 - Maybe We Can't - Election Results | ||||
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