Here's my Top 10 links from around the Internet at 12 pm 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.
Bumper crop of cartoons today. Last one my favourite.
1. The problems in Europe - Reuters reports Moody's has warned any form of 'soft restructure' or 'virtual default' in Greece would cascade across Europe's sovereign debt ratings.
Greece is threatening not to agree to a brutal austerity and asset sale programme. It may even stop paying pensions and wages. Another national strike has been called.
The EU will have to provide more cash next month.
The European Central Bank is threatening not to accept Greek debt as collateral.
Essentially the powers-that-be are running out of places to hide. No 'soft restructure'. No virtual bailout from the ECB.
The only options left now are politically unpalatable pure cash handouts/bailouts by German voters/taxpayers. See the story below to get a sense of what Germans think of this.
Chancellor Angela Merkel lost more regional elections over the weekend.
It's all building to a head now.
"A Greek default would be highly destabilizing and would have implications for the creditworthiness of issuers across Europe,"Moody's chief credit officer for Europe, Middle East and Africa, Alastair Wilson said.
Other stressed sovereigns could be downgraded from investment grade to junk as a result, he said, widening the gap with the currency bloc's strongest borrowers. Portugal and Ireland would be first in the firing line.
Crucially, the ECB and ratings agencies have told politicians that options they are exploring to lengthen the maturities on privately held Greek debt would be interpreted as a default-like "credit event," triggering further downgrades and disqualifying Greek bonds as collateral. A Greek default could take many forms, including changes in the terms and conditions or a selective reprofiling, Moody's said, adding it would consider all of these to be distressed debt exchanges.
2. 'We're so happy' - This is an excellent interactive tool from the OECD that tallies up all the factors in a 'Better Life'. New Zealand does relatively well vs others in the OECD, in large part due to our pretty good health, education, environmental and life expectancy stats.
Worth a click through for a play.
Here's the New Zealand profile too.
3. Nervous German taxpayers - Der Spiegel is speaking for German taxpayers when it warns the European Central Bank (ie the old Bundesbank with a few extras added on) is now chock full of dodgy assets. HT Andrew.
Here's Der Spiegel catching the German mood:
On the green fields near Carriglas, halfway between Dublin and Ireland's west coast, the wind whistles eerily around rows of half-finished houses. Most of these buildings are roofless, leaving their bare walls unprotected against the elements. Even the real estate brokers' for-sale signs and the project offices are gone. Hardly anyone in Carriglas believes that the houses will ever be finished.
There are many of these ghost towns in Ireland, including 77 in small County Longford alone, which includes Carriglas. They could end up costing German taxpayers a lot of money, as part of the bill to be paid to rescue the euro.
That bill contains many unknowns, but almost none of them is as nebulous as the giant risk lurking in the balance sheet of the European Central Bank (ECB), in Frankfurt. Many bad loans have now ended up on that balance sheet, including ones that were used to build houses like those in Carriglas and elsewhere. No one knows how much they are worth today -- and apparently no one really wants to know.
4. What's really going on in Spain - The political pain on the plains of Spain is intense.
Here's some on-the-ground reporting of what's happening with all these sit down protests.
5. 'Gold in them thar vaults' - Utah has become the first US state to accept gold and silver as legal currencies again.
It's mostly a political move, but it does give you an idea of how many in the red states feel about the US Federal Reserve's money printing and the US Government's massive deficits.
In a move designed to undermine the Fed's monerary policy, the new law would allow Utah's citizens to store their gold and silver in a vault and use a "debit-like card" to conduct financial transactions. Since businesses will not be required to accept coins either at face or market value, going through a vault would be way the only way to take advantage of the new law.
6. Australia's lending problem - BusinessSpectator has picked up on this problem in Australia where housing lending has been growing for the last three years while business lending has been falling.
Our statistics aren't that different.
7. 'They won't mind' - The head of the US House Budget Committee, Paul Ryan, has actually said he doesn't think too many people will mind if America has a 'technical default'.
He said this a few days ago on CNBC, but it's worth putting in here.
This debt ceiling debate is something to watch.
Bond markets seem remarkably relaxed about this. They are all assuming it's bluster and it'll all be alright on the night. The US is scheduled to default on August 2.
Holders of US government debt would be willing to miss payments "for a day or two or three or four" if it put the US in a stronger position to pay them later on, Rep. Paul Ryan told CNBC Tuesday.
"That's what I'm hearing from most people," said the Wisconsin Republican, chairman of the House Budget Committee. "What is more important is that you're putting the government in a materially better position to be able to pay their bonds later on."
8. Housing affordability - TV3's Campbell Live reports two MPs earning more than NZ$130,000 a year, Labour's Jacinda Ardern and National's Nikki Kaye, say they can't afford to buy a home in Auckland.
“It’s pretty tough, particularly being single. You have to work twice as hard to pay the deposit, to pay the mortgage. So my attitude is that I want to make sure I’m very financially secure before I take that step,” says Ms Kaye.
9. Outsourcers coming home - The Washington Post reports on how Indian outsourcing operations are now setting up offices in America to service their American clients because Indian wages are getting too expensive and they can't easily import Indian workers.
India’s outsourcing giants — faced with rising wages at home — have looked for growth opportunities in the United States. But with Washington crimping visas for visiting Indian workers, some companies such as Aegis are slowly hiring workers in North America, where their largest corporate customers are based. In this evolution, outsourcing has come home.
10. Totally funny video - John Litgow reads out a press release.
We welcome your comments below. If you are not already registered, please register to comment
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.