Thursday's Top 10 with NZ Mint: A global farmland price bubble; 7,287 Christchurch children enrolled elsewhere; Foster's vs Coles; F35 = Aussie GDP; Dilbert

Here's my Top 10 links from around the Internet at 10 past 6 pm in association with NZ Mint.

I welcome your additions in the comments below or via email to bernard.hickey@interest.co.nz.

I'll pop the extras into the comment stream. See all previous Top 10s here. My apologies for no Top 10 yesterday. Just got swamped with these dang news things. Note to self. Must ignore more news.

1. Bubble spotting - Yale University Professor Robert Shiller is renowned as one of the guys behind the Case-Shiller index for house prices in America.

He also thumped the table warning years back about a bubble in the US housing market. If only everyone had listened...

Now he's saying farmland could be the next asset bubble globally.

Are New Zealand dairy farmers and their bankers listening?

Perhaps New Zealand's bubble has already burst.

Whatever the case, there seems to be one building in America and Britain as high commodity prices and the thirst for hard (non-paper) assets pushes up prices.

2. Shiller writes here at Project Syndicate about why Farmland might be the next bubble.

My favorite dark-horse bubble candidate for the next decade or so is farmland – and not just because there have been stories in recent months of booming farmland prices in the US and the United Kingdom.

Of course, farmland is much less important than other speculative assets. For example, U.S. farmland had a total value of $1.9 trillion in 2010, compared with $16.5 trillion for the US stock market and $16.6 trillion for the US housing market. And large-scale farmland bubbles are quite rare: there was only one in the US in the entire twentieth century, during the great population scare of the 1970’s.

But, farmland, at least in certain places, seems to have the most contagious “new era” story right now. It was recently booming, up 74% in real terms in the US in the decade ending with its price peak, in 2008. And the highly contagious global-warming story paints a scenario of food shortages and shifts in land values in different parts of the world, which might boost investor interest further.

3. Finally a bank regulator says no - Reuters reports the US Federal Reserve has objected to Bank of America's plans to increase its dividend. They'll go back again though.

BofA had hoped to be in a second wave of banks raising dividends in the second half of this year. Unlike some of its major competitors such as JPMorgan Chase & Co and Wells Fargo & Co, Bank of America is still struggling to be consistently profitable and, by some measures, has less capital.

The largest U.S. bank by assets did not give a reason for the rejection, and said it intends to submit a revised proposal to the Fed and still hopes to increase its dividend in the second half of the year.

4. 'Not so fast...' - The supermarket wars in Australia are fun to watch from a distance. As a consumer we're all jealous at the loss leading prices being offered for milk and other staples, although it is brutal on any producer who wants to build a brand.

Luckily for Fonterra it is not too exposed in Australia.

But now one of the producers has fought back.

The Age's Adele Ferguson reports Foster's has pulled supplies of its VB, Carlton Draught and Pure Blonde beer from Woolworths' Dan Murphy's chain and Coles' First Choice chain after it learned they were about to start selling them for A$28 a slab, which was well below cost.

A spokesman for Foster's said the company withheld supply to protect equity in its brands. "We take loss leading of our brands very seriously," he said. "We will consider our options when it comes to individual cases of loss leading."

It is understood that for at least three days some liquor stores were forced to put up a sign explaining why they had no VB for sale. Some signs said: "We're out of stock because Foster's, the supplier of VB, says we are selling it too cheap."

The move by Foster's to take on the retailers, who control 50% of Australia's liquor distribution, has been described by industry experts as gutsy. It is also unprecedented. There is no other known case where a supplier has taken on the supermarket giants head on.

The milk industry, which has been subject to similar price discounting wars by the supermarket chains, was unable to beat the retailing giants as they are not known brands and therefore do not have the same clout.

5. Some hard numbers - It's been difficult to know just how many people have left Christchurch and where they've gone. ANZ has estimated a net 15,000 might leave Christchurch and stay away over the next year.

Now we have figures from Statistics NZ showing that 7,287 Christchurch schoolchildren have re-enrolled at schools away from the Christchurch, Waimakariri and Selwyn school districts as at March 23 have not returned to Christchurch yet. Assuming 2 other people per child has also left, that means around 21,000 people have left.

6. 'Just in time' - The full impact of the Japanese disaster is not clear yet, but some surprising things have happened. Colin Johnson at SmarterTechnologies reports that the earthquake and Tsunami have shut down 25% of the global semicondutor raw materials market.

These wafers are used in everything from motherboards to mobile phones to cameras.

The raw silicon wafers that chip makers use as a foundation for their memories, logic and processors are no longer being manufactured across Japan as result of the earthquake, tsunami and continuing seismic aftershocks.

Last week, Intel and Qualcomm tried to assure worried stockholders, claiming that Japan's Tohoku earthquake would not create shortages. Analysts nevertheless predict that the current drop in semiconductor manufacturing capacity in Japan will soon create shortages in many electronic product supply chains.

7. A very expensive Top Gun - The Atlantic writes in detail about the culture of waste in the Pentagon and how the Tea Parties are ignoring it. The details of the F35 (pictured below) spending are staggering.

We're spending more on this plane than Australia's entire GDP ($924 billion). The F-35 is the most expensive defense program in history, and reveals massive cost overruns, a lack of clear strategic thought, and a culture in Washington that encourages incredible waste.

Money is pouring into the F-35 vortex. In 2010, Pentagon officials found that the cost of each plane had soared by over 50 percent above the original projections. The program has fallen years behind schedule, causing billions of dollars of additional expense, and won't be ready until 2016. An internal Pentagon report concluded that: "affordability is no longer embraced as a core pillar."

In January 2011, even Defense Secretary Robert Gates, a champion of the aircraft, voiced his frustration: "The culture of endless money that has taken hold must be replaced by a culture of restraint."

We used to be content to outspend Australia on aircraft. Now we literally spend Australia on aircraft.

8. How academic economists were corrupted - Inside Job director Charles Ferguson speaks here about how Wall St corrupted academia as well as politics. Those who viewed Inside Job will remember the exchange in the movie with Glenn Hubbard.

9. A very stressful test - Bloomberg reports Standard and Poor's has estimated Europe's banks would need a cool US$355 billion in fresh capital if there was a sharp increase in interest rates and a severe economic contraction.

This crisis is far from over, as we saw this morning in Portugal. Meetings over the next two days could prove crucial.

The ratings company imagines three stages happening from 2011 to 2015, including soaring yields triggered by an interest- rate shock, restricted market access for weaker sovereigns and a “very severe” downturn in the economies of Greece, Ireland, Portugal and Spain. Under this scenario, stress in Italy would be “substantial,” while in France, Germany, the U.K. and the rest of the European Union it would be “moderate,” according to S&P.

Of S&P’s sample of 99 financial institutions covering 70 percent of Europe’s banking system, 22 would need new capital at a total cost of about 161 billion euros, according to the report. Extending that to the full European banking system would cost 200 billion euros to 250 billion euros, or about 2 percent of economic output of those lenders’ jurisdictions, S&P said.

“The overall effect on the creditworthiness of western European countries, if it were to happen, would be severe,” S&P analysts led by Paris-based Chief Credit Officer Blaise Ganguin and European Economist Jean-Michel Six, said in the report. “It would lead to substantially higher debt levels for all sovereigns throughout the region; hardly sustainable fiscal positions,” as well as the bank recapitalizations.

10. Totally bad hair day - Lewis Black at The Daily Show reckons Donald Trump would make a great US presidential candidate...The last minute is brilliant.

"What this world needs is a crazy third world dictator."