Monday's Top 10 with NZ Mint: NZ's 100% pure water failure; 'NZers choose to be poor'; Singapore's 22.5% GDP growth rate; Talking dog; Cartoons galore; Dilbert

Here's my Top 10 links from around the Internet at 1pm  in association with NZ Mint.

I'll pop the extras into the comment stream. See all previous Top 10s here.

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

Today's Top 10 has Obama, Stewart and a talking dog.

1. New Zealand's water failure - The Listener has written an excellent editorial on how the government's water reforms last week failed to achieve much.

The government has failed to provide leadership on targets.

New Zealand remain open to accusations of not being 100% pure.

All it will take is a Guardian/BBC documentary and our reputation will be toast.

Anyone watching the BBC interview with John Key last week will have been shifting uncomfortably in their seats.

We all know we're lying to the world when we say we're 100% pure. Ever thought of swimming in a farmland stream or a Waikato lake?

We need to act now to fix it.

Unfortunately, our government seems captured by the dairy lobby.

Here's the Listener:

Two years ago, the Government endorsed the approach of the Land and Water Forum, an experiment in consensus decision-making that aimed to get farmers, environmentalists, electricity companies, fisher­men and other warring parties out of the courtroom and around the table to sort out a framework for both protecting water quality and tapping into the economic potential of our abundant water resources. The group came up with a long list of recommendations, the first of which was for the Government to set national standards for water quality, and lay down a timetable for achieving them.

But the Government baulked. Instead of using the rare consensus achieved by this traditionally fractious collection of interests as a mandate for decisive action, it has thrown the ball back at regional councils – the very agencies that have overseen the degradation of our rivers and lakes over the past 20 years.

In dodging this opportunity, it has likely dashed any hopes of keeping water out of the courts. By issuing a vague policy statement and ordering 16 regional councils to sort out the details for themselves, the Government has virtually guaranteed that water quality and allocation will continue to be the subject of endless dispute and litigation.

2. Not such a NovaStar - Gretchen Morgenson from the New York Times and Graham Fisher have written a book on the sub-prime mortgage debacle in America, detailing one particular black hole for effect.

How different is it in New Zealand?

The banks say we're completely different.

Yet we saw last week from Rob Stock at the Sunday Star Times how woeful the controls were around Glenn Cooper in South Auckland as recently as late 2009..

Here's Morgenson and Graham Fisher on the problems found by Lehman (!) when it audited the loans at one sub-prime bucket shop called NovaStar:

Among the problems turned up by the Aurora audit were misrepresentations of employment by the borrower, inflated property values, transactions among parties that were related but not disclosed, and unexplained payoffs to individuals when loans closed.

The details uncovered by Aurora were alarming. One NovaStar loan on a property in Ohio totaled $77,500 even though the average sales price for the neighborhood was $31,685, and the same house had been purchased two months earlier for $20,000.

3. A close run thing - Bloomberg reports the US Congress may take until August to lift the debt ceiling. Remember, America will default on its debts on August 2 if the ceiling is not raised.

4. 'New Zealanders choose to be poor' - Scientist Paul Callaghan has been saying some interesting things lately about New Zealand's lack of investment in science and innovation, much of which I agree with.

Here's some more of his provocations via NZHerald:

"The choice is as simple and as stark as this: New Zealanders like to work in low-wage activities. Tourism is a classic example. Or people thinking about growing wine and look it's great, it's a nice lifestyle, but frankly, the revenue per job is poor," he said. Callaghan says the Government's goal should be to get more workers into jobs that produce high-value exports.

"If you look at the profile of high-tech companies in New Zealand, you see the diversity [of what they develop], you see some surprising strengths. We've got a tremendous capacity and we have the capability of growing this sector significantly," he said.

"There is no political leadership around this. One of the sad things about the Budget is the signal the Government sends about innovation is that it's actually one of Bill English's like-to-haves, not a must-have. I'm not expecting us to ramp it up to OECD levels overnight in a time like this, but [the Budget] doesn't gel with a Government that says 'we want to lift per capita GDP'," he said.

5. China's booming trusts - China's banks are trying to clamp down on lending to property developers, but all sorts of displacement activity is happening, including through off-balance sheet structures such as trusts, FTAlphaville points out from a Standard Chartered research note.

The continued willingness of many developers to seek this funding shows how difficult it is to get loans from banks now. But the continued availability of funding for these products shows that wealthy individuals and corporates with cash to spare are still looking for a positive return to their funds.

Some listed firms have ramped up their investment in trust products (which is in effect a play on the property sector). This is of course getting riskier for all involved. In every tightening cycle, the challenge for the authorities to restrict credit availability and to manage where it goes weakens. They will probably just about manage, we believe, to pull off this tightening cycle without a triggering hard-landing, but the next time around it will be even harder.

6. Borrowing short - US Government debt maturities are, on average, much shorter than those in Europe, Gillian Tett points out at FT.com.

Doubts abound on whether there is even much investor appetite for ultra-long-term US debt. Although non-US investors have been buying a higher proportion of long-term debt, domestic institutions do not have the same appetite as, say, in the UK.

This creates at least two potential risks. The most dramatic, and less likely, danger is that the short average maturity profile means the government could find it hard to keep rolling over its debt at a reasonable price – if at all – if there was ever a full-blown collapse of confidence.

The more subtle and likely problem is that the US government could also see the cost of financing the debt rise sharply if inflation surges, because it will need to roll over its debt at (rising) market rates.

7. ECB vs the rest - Wolfgang Muchau at FT.com cuts through all the rhetoric to the heart of the problem in the European Financial System at the moment. The European Central Bank doesn't want to play Father Christmas anymore to all the politicians by funding their banking systems. Cue a big mess.

Jean-Claude Trichet, ECB president, stormed out of a meeting with finance ministers on May 6. This was the famous super-secret meeting whose very existence had been denied by officials. The ECB has since stepped up its rhetoric, and is now threatening to deny Greek banks access to the ECB’s refinance operations after any restructuring.

Think about this for a second. Cutting Greece off from ECB liquidity would constitute a dramatic escalation of the eurozone debt crisis. It would force Greece out of the eurozone within days. You could say that the ECB is threatening to create so much mayhem in the financial system that the monetary union would effectively collapse.

8. Now here's an economy - BBC reports Singapore, which controls its currency, has just raised its growth forecast because of an increase in manufacturing output. HT Chris via email.

According to the latest government figures the economy grew by an annualised rate of 22.5% in the first three months of 2011.

Singapore's continued growth was lead by manufacturing, especially in pharmaceutical production. Manufacturing rose 13% from the previous year and 75% from the previous quarter, the ministry said.

9. Jon Stewart talks about the Debt Ceiling. And he dreams about a giant pizza and something in his trousers.

10. Totally a dog talking video. 26 million views in 23 days. Yikes.