Easter Weekend Top 10 with NZ Mint: Why Australia's banks should be very afraid; Iran's threat of US$150/bbl oil; McDonalds is a riot; Gold hoarding; Dilbert

4. Australia's housing market cooling fast - AAP reports Aussie Home Loans MD John Symond reports a 20% slump in new home loans because prices are falling...timber...

He said Aussie had kept its 5 per cent share of the market and, until December last year, usually settled $1 billion worth of new home loans a month.

"The general consensus is the market is down around 20 per cent in volumes," Mr Symond said.

"Housing generally throughout the country is definitely in a cooling stage, swinging towards a buyers' market particularly for properties above $700,000 or $800,000."

Australia's housing market is past the peak of the cycle and will probably continue to soften over the next six months, he said.

5. Plenty more disruption ahead - Martin Wolf writes at the Financial Times (via Business Spectator) about how those in financial markets who think stability has returned are kidding themselves. I agree.

Wolf makes a very good point about capital controls and the danger of 'hot' currencies and economies like ours becoming hostage to US monetary policy. Too right.

Many countries are concerned that allowing appreciation and large current account deficits makes their economies vulnerable to shifts in US monetary policy. The IMF suggests that “capital controls may be the only instrument available to the authorities in the short term”. But whether open economies can wield them as well as China is doubtful.

Policymakers confront a host of complex and interlocking challenges: fiscal and monetary normalisation in advanced countries; fixing the overhang of excess debt and financial fragility in those economies; managing the overheating in emerging economies; adjusting to big shifts in relative prices; and rebalancing the entire pattern of global demand. Nothing that is now happening suggests any of this will be managed competently, let alone smoothly. In short, those who think we are now looking at the sunlit uplands are fooling themselves. Much disruption lies ahead.

6. 'Hold gold as a currency' - Infamous Gloomster Marc Faber talks here at CNBC about why investors should hold gold as a currency and how the US dollar's future is limited while the Fed keeps printing. He also likes property as an inflation.

The New Zealand dollar is mentioned in the discussion with John Newman from Thomson Reuters as an alternative sought by US dollar investors trying to get out of the US dollar.

Lucky us.

"The value of the U.S. dollar will be precisely its intrinsic value — namely zero, precisely zero," said Faber. That in turn would boost demand for gold and silver.

Another factor that would boost gold prices were negative real interest rates in emerging economies. He said interest rate hikes in countries such as India and China would not keep up with the rising cost of living and that would make assets such as gold and property attractive.

Faber recommended holding physical bullion over other gold assets such as ETFs or gold mining companies. However, he advised against holding gold assets in the U.S. because of the risk of "expropriation" of gold assets by U.S. authorities.

Faber also said he expects property prices in places such as Singapore to continue rising given negative real interest rates in that country. And he said the most important thing investors needed to do at a time like this was to diversify.

"(Investors) need to own some real estate, they need to own some farmland, they need to own some equities, some cash and some precious metals," Faber added.

7. Greed and a complicit public - The Guardian reports an independent inquiry into the Irish banking debacle has concluded bankers took risks on an unbelievable scale and the public let them do it because they wanted to 'let the good times roll'. HT Andrew

A nine-month inquiry by Finnish finance expert Peter Nyberg published is scathing about the banks which, he says, lost control, but also contains criticism of Irish society in general and institutions including the civil service and regulatory authorities.

Nyberg, a former International Monetary Fund economist, says that no one in the banks appreciated the risks being run and, that although global events did not help, the main reason for the Irish banking collapse was "the unhindered expansion of the property bubble financed by banks using wholesale market funding".

"It appears now, with hindsight, to be almost unbelievable that intelligent professionals appear not have been aware of the size of the risk they were taking," as they piled money into property pipedreams with little regard for risk analysis or even loan documentation, he says in the 156-page report commissioned by former finance minister Brian Lenihan.

There was, he says, an "inability and unwillingness to remember basic principles of banking" that providing credit is not a sale, "it is the acquisition of a risky asset".The public was also complicit, he says, because "large parts of Irish society were willing to let the good times roll".

8. Free the Renminbi - Former Australian Prime Minister Paul Keating is a mercurial fellow. I was a political and economics reporter for Reuters in Canberra from 1994 to 1996 in the last two years of Paul Keating's Labor government. He was a fascinating and dangerous man.

A colleague and I took it upon ourselves to lead the Canberra press gallery in challenging Keating's management of the budget to his face during the 1996 election campaign.

It was not a pleasant experience. He fought hard. Eventually he lost the election, in part because voters believed he was trying to pull the wool over their eyes about the budget. I won't forget his sneer and intellect in a hurry. Yet he could be just as charming and impressive. A strange rooster.

Regardless, Keating played a huge role in the modernisation of Australia and its very strong position now. The 4 pillars policy which stopped the big four banks from being bought or buying each other is Keating's child. As is the compulsory pensions scheme. Both helped protect Australia and New Zealand during the Global Financial Crisis. We should all be grateful for that.

Now Keating has written an erudite and fascinating piece in Business Spectator that traverses the economic globe and dwells on China's future, and its need to free up the Renminbi.

It's well worth reading to get a sense of Keating's vision and brilliance. It doesn't show his ruthlessness and mongrel. Keating is the most interesting politician I've ever seen in action.

He makes our chumps look pedestrian.

Here's a sample:

Currently the management system of the renmimbi is distorting China’s industrial development. It is internalising the wrong price signals, and as a result scarce economies and material resources are being directed towards investment with a heavy bias towards export industries and budget mandated infrastructure.

The Story of Modern China is a story of urbanization; and urban areas are full of people who rely on services. Service industries are more labour intrinsic and it’s to this area that Chinese financial and material resources should be directed.

The full convertibility of the renmimbi will accelerate this trend: it will also help in the long awaited re-balancing of the world economy.

It would prevent the Central Bank of China from recycling developing country capital inflows into foreign exchange reserves, rather giving that income a chance to develop China more broadly and more quickly. Such a change would also allow the proper pricing of interest and risk in developing economies.

Full convertibility of the renmimbi will also reduce economic distortions within China, such as higher inflation and runaway liquidity.

9. Gold hoarding goes mainstream - Bloomberg reports America's second biggest university endowment fund, the University of Texas Investment Management, this week took possession of 6,643 gold bars worth almost US$1 billion and stored it in a warehouse.

The Texas fund’s $19.9 billion in assets ranked it behind only Harvard University’s endowment as of August, according to the National Association of College and University Business Officers. Last year, UTIMCO added about $500 million in gold investments to an existing stake, said Bruce Zimmerman, the endowment’s chief executive officer. The fund’s managers sought to take delivery of bullion to protect against demand for the metal overwhelming supply, according to Bass.

Open interest in gold futures and options traded on the Comex typically exceeds supplies held in its warehouses. If the holders of just 5 percent of those contracts opted to take delivery of the metal, there wouldn’t be enough to cover the demand, Bass said.

“If you own a paper contract where they can only deliver you 10 cents on the dollar or less, you should probably convert it to physical,” said Bass, who isn’t related to Fort Worth’s billionaire Bass family. He said holding cash wasn’t a better choice because the rate of inflation exceeds money-market rates by 2.5 percent to 3 percent, eroding the value of cash.

10. Totally a riot in America as McDonalds hires 50,000 workers in a day. The desperation for a shitty job paying virtually nothing in depressed Cleveland caused a riot.