Here's my Top 10 links from around the Internet at 4 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.
Walk her every day into a shady place..
1, China's appetite for our baby formula - There's a widespread misperception that the melamine scandal in China was bad news for Fonterra's reputation and therefore New Zealand's in the minds of Chinese food consumers.
If fact, it was a great branding exercise for New Zealand. Fonterra and Helen Clark dobbed in San Lu to the Chinese hierarchy to fix the problem.
Everyone in China understands that any foreign company in a joint venture in China has no control.
That Fonterra and Clark were brave enough to go over their partner's head to the President spoke volumes for how they cared more about consumer health than their own reputations or financial interests. Remember this cost Fonterra a writedown of NZ$139 million on those San Lu assets.
This means that Chinese consumers now associate New Zealand products with safety and integrity.
So now we have all sorts of Chinese importers scrambling to get their hands on New Zealand baby formula imports.
This latest TVNZ story about Kiaora NZ exporting Heitiki branded baby formula is symptomatic of that.
An Auckland-based export company has apologised for the uproar caused after using a Maori name and icons to brand and export its infant formula bound for China.
Kiaora's NZ general manager Sean Xu said they are sorry to have caused cultural offence, which the company did not intend, and they will rebrand their products to remove any Maori references. He said the product would be redesigned "in a way that still promotes its New Zealand manufacture".
Xu said the company had only began selling New Zealand export infant formula in March. He said it met all New Zealand export regulations and was manufactured by a leading New Zealand dairy product manufacturer.
The issue started with cultural concerns expressed by Maori Party co-leader Tariana Turia who initially criticised the use of Maori imagery and words. The logo on the formula's tin is of a Maori woman and the packaging features a picture of a marae in a field surrounded by cows.
2. Duty free baby formula? - And then this NZHerald piece by Michael Dickison from 6 weeks ago about busloads of tourists stopping to buy up bulk amounts of NZ baby formula as they're about to leave the country.
The Herald revealed at the weekend that some supermarkets were selling baby formula worth up to $170,000 in bulk to Chinese exporters while restricting ordinary shoppers to as little as three cans at a time. The formula is sold at a profit to Chinese parents worried about contamination in their locally-made formula, and shortages have deprived many New Zealand mothers.
Shoppers at the Countdown supermarket near Auckland Airport said busloads of visitors would arrive weekly to buy formula. Led by a tour guide, groups of about 40 tourists took their shopping baskets straight to the baby section and "literally stripped the shelves of all baby formula within minutes", said a regular shopper, Steve Marshall.
3. Bubble trouble - The BBC has done a documentary here on the rise in commodity prices globally. HT Darryl.
Michael Robinson asks whether investors and speculators are making prices more volatile and examines the role of the giant traders, banks and companies which now increasingly dominate the world's commodity markets.
Episode One Michael explains some of the surprising effects high commodity prices are having on the ground - a surge of copper theft from railways in the UK, a boom in farm prices in America, and confusion in Europe from a major chocolatier about the price of cocoa - all points to the role of new, speculative money disrupting long-established patterns in the market.
4. Alarmed South African - Bloomberg reports South Africa's Reserve Bank Governor Gill Marcus says Greece's debt crisis is deteriorating at an alarming rate.
“While some form of debt restructuring would seem to be inevitable, and some would say overdue, the impact on the European banking system would be significant,” Marcus told economists in Johannesburg today. Greek, Irish and Portuguese sovereign debt constitutes “a significant proportion” of German and French banks’ balance sheets, she said.
“Failure to contain the systemic problems could have financial stability implications not only for the European economies but for the global economy in general,” Marcus said.
5. A Greek day of reckoning - Argentina's former central bank governor Mario Blejer writes here at Bloomberg that a day of reckoning looms for Greece in the European Ponzi scheme.
He actually used the P word.
This is today's must read.
While there are few similarities between Greece’s present debt situation and Argentina’s in 2002, it is possible to reduce the recent talk of a default to four basic issues and make some predictions.
The nature of the debt problem in peripheral Europe is structural. Since it doesn’t reflect a temporary liquidity squeeze, the approach adopted so far can’t resolve it. The strategy in progress has been to pile new debt upon the existing stock. New loans are used to pay old debt, in addition to financing remaining fiscal gaps. This is why the Ponzi scheme analogy is appropriate. And while the pyramid is growing, the share of peripheral debt held by state-owned institutions also keeps getting bigger. This means that when it all finally collapses, it is the taxpayers of Europe, and the world, that will bear the full cost.
he pyramid may continue to grow for a while, particularly if the cement used is public funds. But it is an unstable construction because European bailouts are becoming politically questionable and because throwing International Monetary Fund money into the Ponzi scheme is raising objections. This strategy is only making the situation worse.
6. 'Let me stay in Ireland' - The Guardian reports a jobless Irish graduate has used 2,000 euros of his life savings to buy a billboard asking for a job.
His ad has struck a chord across Ireland at a time when about 50,000 citizens, many of them young graduates, are expected to leave this year for work abroad. There are still up to 400,000 jobless workers in Ireland due to the property crash and the country's fiscal crisis.
Mac An Iomaire said he came up with the idea after being unemployed for eight months after a year in Australia.
"I had a good bit of money saved when I came home from Australia but I was managing to live on jobseeker's allowance. I gave it a week of hard thinking to come up with the concept and nothing was going to stop me then," he said.
7. Our money printer's corruption - The Sydney Morning Herald reports Securency, the Reserve Bank of Australia's currency printer that also prints our plastic money, paid a middleman to get a money printing contract onto the agenda of a meeting between John Howard and Nigeria's President.
A letter written by a Securency middleman, Benoy Berry, in 2009 details the meeting and accuses Securency of offering ''pay-offs and kickbacks to public functionaries in poor nations'' and resorting to ''less than ethical liaisons with public officials whose appointed fronts you [Securency] now utilise as conduits to distribute inducements''.
Securency wired more than $6 million into Mr Berry's tax haven bank account - a financial arrangement overseen by the RBA appointees on Securency's board and now under investigation by an Australia Federal Police bribery taskforce - in return for his help lobbying senior foreign politicians.Mr Berry's letter highlights how the firm's allegedly longstanding corrupt behaviour continues to tarnish Australia's reputation as an ethical and corruption-free country.
8. What on earth was the NZHerald thinking - An editorial in today's NZHerald writes that the high exchange rate is a cause for celebration.
By who?
Foreign investors?
Voters? Newspaper readers?
Consumers? Harvey Norman?
Don't get me started on this.
A floating exchange rate is like a window to the world. Through it we can see where we are in relation to other economies and how others are seeing us.
Right now, they are regarding us more confidently than we feel.
It reflects an international view of the value of this economy and its likely performance. We should celebrate it. Rich countries do not have low exchange rates. It is doubtful countries become rich on a low rate. They produce products that can trade well in anybody's money. That is the goal.
9. Greek asset stripping exercise - Yves Smith at Naked Capitalism captures the mood in Greece via an emailer's comments. Her piece is well worth a read.
The idea that prevails is that after selling all these crucial resources nothing will really change for the people and most possibly we will be in the same position of bankruptcy after a year or maybe two having lost by this time most of public resources. Also a huge tax collection plan is under finalization which according to leakages it will cost 3,000-4,000 euros annually for a family with 4 persons . This means that a lot of marginally surviving people will fell below the elementary standard of living. Another 150,000 unemployed are expected for the forthcoming year. Final decisions will be announced most probably at 6th of June – so keep this date in mind. It might be the beginning of real bloody demonstrations.
What are the political implications of this mass mobilization and which are the probable effects? Although is difficult to say I am thinking that most probably if this dynamic goes on it might be impossible for the government to vote for the new measures. At this stage political instability with these time lines means bankruptcy.
Another interesting story is that parts of the national capitalist class are seriously thinking of bankrupting the country and take over with a new drachma. This is not discussed politically openly because a return to a national currency will be extremely painful for the masses. In fact the story of Argentina is well known. My impression of the overall situation is that for several reasons Greece follows the road to an open bankruptcy with several people waiting to benefit from that and nobody taking the political risk to support it.
10. Totally Jon Stewart on Dominique Strauss Kahn - 'Everyone knows maids appear in brigades of two. The invisible hand of the market is very touchy, feely.'
11. Totally another Pixies video - Gigantic. I'm a fan. I have a bit of a thing for Kim Deal.
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