Monday's Top 10 with NZ Mint: Christchurch's secretive council; Germany's Greek Treuhand; Aussie money printing scandal; Europe's monster toxic CDO; Jon Stewart; Dilbert

Here's my Top 10 links from around the Internet at 1 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.

Today everyone is extending and pretending...except us

1. Why so secretive - Paul Gorman writes at the Press about the increasingly secretive Christchurch City Council under Bob Parker.

And he also points to some big divisions on the council.

Bob Parker seems to be having a few problems keeping the troops together and being open with the public.

HT Hugh via email.

Here's Gorman, who I have a lot of time for and worked with when I was at Fairfax.

In what was hardly a surprising move, the city council excluded the public from its deliberations for another four hours last Friday. That followed other closed-door sessions on Thursday and Wednesday last week, and many hours in seclusion at its meetings earlier in June.

Sometimes, of course, there are good reasons to work confidentially, but, to be frank, this is a council that would go into public-excluded mode to decide what flavour muffins to have for lunch.

In more than 20 years as a journalist, a large part of that spent reporting on public bodies and councils including Environment Canterbury (ECan) and the Dunedin City Council, I have never come across a group so willing to slide into secrecy at the drop of a hat.

2. A bunch of shrapnel - When even real estate agents criticise a bullish house price forecast, you know there's a problem. Here's WAToday on BIS Shrapnel's forecast of a 19% rise in house prices over the next three years in Perth.

However, at least three other property experts criticised the report as being exaggerated and too optimistic.

Real Estate Institute of WA president Alan Bourke said the 19 per cent prediction was "way too high" and based on incorrect interpretations of population data.

Mr Bourke said BIS Shrapnel had been incorrect in the past. "They had exactly the same prediction two years ago ... and we saw really no movement at all in the past two years," he said.

"They certainly haven't been accurate, far from it."

3. CEO pay up 23%  - The NYTimes reports US CEO pay rose 23% last year.

Total C.E.O. pay hasn’t quite returned to its heady, prerecession levels — but it certainly seems headed there. Despite the soft economy, weak home prices and persistently high unemployment, some top executives are already making more than they were before the economy soured.

Pay skyrocketed last year because many companies brought back cash bonuses, says Aaron Boyd, head of research at Equilar. Cash bonuses, as opposed to those awarded in stock options, jumped by an astounding 38 percent, the final numbers show.

4. The German Treuhand - Eurogroup Chairman Jean Claude Juncker thinks Greece will have to adopt the model used in East Germany where a West German 'Treuhand' agency sold off thousands of state assets.

"The sovereignty of Greece will be massively limited," he told Germany's Focus magazine in the interview released on Sunday, adding that teams of experts from around the euro zone would heading to Greece.

"For the forthcoming wave of privatizations they will need, for example, a solution based on a model of Germany's 'Treuhand agency'," Juncker added, referring to the privatization agency that sold off 14,000 East German firms between 1990 and 1994.

Greeks are acutely sensitive to any infringement of their sovereignty or suggestions of foreign "commissars" getting involved in running the country.

"One cannot be allowed to insult the Greeks. But one has to help them. They have said they are ready to accept expertise from the euro zone," Juncker said.

5. Almighty currency mess - Australian bank note printer Securency International, which prints New Zealand's money, is now embroiled in a corruption scandal complete with arrests, Vietnamese spies and bribery allegations. Here's the latest from The Age.

Former Australian diplomatic and trade officials have privately confirmed that Securency agent Anh Ngoc Luong's status as a colonel in Vietnam's spy agency, the Ministry of Public Security, was well known to the Australian embassy in Hanoi when Austrade suggested Securency appoint him and his company, CFTD, as its agent in 2002.

Information released by Austrade and the Department of Foreign Affairs to Liberal senator Russell Trood shows that Australian officials in Hanoi met or spoke to Luong 18 times between 1999 and 2001.

It is illegal for an Australian company to hire a foreign official as its paid agent, and Luong's appointment is suspected to have begun one of the highest paying bribery arrangements that Securency set up across the globe, paying the colonel up to $20 million, much of it in suspected bribes.

In return, he helped Securency win a massive contract to switch Vietnam's banknotes from paper to plastic.

6. It's all about politics and bank runs in the end - John Mauldin writes that the key thing to watch in Europe is the political fallout in Germany and elsewhere from more bailouts.

He also points out that there may be a banking crisis before a sovereign debt crisis, particularly because the Greek banks are haemmoraghing cash.

We have dodged a short-term bullet with Greece and Europe coming to terms this week, but in late July they will have to find AT LEAST €50-70 billion more euros in loans and rollovers, and then more next year. Without projected asset sales it could reach €100 billion very easily. And willpower is waning on the part of creditor countries. Opposition against throwing good money after bad is increasing, as recent polls in Finland, Germany, the Netherlands, and Slovakia have shown.

How long Merkel can hold her coalition together in the face of growing discontent is not clear. Powerful, authoritative voices in Germany are starting a daily chorus of chanting “no” to more bailouts. And it is not just Greece. After Greece is dealt with, the Eurozone must deal with Ireland and Portugal. And the market is increasingly suggesting there is more risk there than the area can handle.

Money is flying out of Greek banks. Indeed, deposits in all the peripheral countries are falling. It is quite possible we get a credit or banking crisis in Europe before we get a sovereign default crisis. The longer Greece waits, the more they try and kick the can down the road, the worse it gets for their banks. And Greece has NO money to bail out its banks. Look at this graph from Bridgewater :

7.  It's just a toxic CDO - The FT.com's Wolfgang Munchau says the German/French rollover plan for Greek is actually just another toxic CDO.

This structure is still not quite so complex as some of the more elaborate CDOs we have encountered in the global financial crisis. If you take some time to work through the arrows and boxes, you see relatively quickly that this complex structure is not a private sector participation at all. Rather it is a private sector bail-out.

It is also inevitable that Greece will default on its coupon payment at some point. The interest will be 8 per cent under a benign growth scenario, and 5.5 per cent under a not so benign one. Either way, Greece cannot pay such a high level of interest.

We have learnt from the financial crisis that one should not place too much faith in financial vehicles with three-letter acronyms. But that is what we are doing with this European equivalent of a late-period subprime mortgage CDO. We are not just “kicking” any old “can down the road” any more. This is a can of explosives.

8. Extending and pretending until September - The WSJ reports the Greek situation will be calm until September when we're likely to see the same old brinksmanship and near-death experience.

Ministers also decided they would agree by September on arrangements for a new bailout to supplement the €110 billion package they agreed on last year but which fell short mainly because Greece is unable to raise money in financial markets as had been expected.

German Finance Minister Wolfgang Schäuble said after the teleconference that a new aid package for Greece could be approved by autumn, in time for the next expected quarterly tranche of EU/IMF aid.

The Greek finance ministry also said a deal was expected by mid-September.

9. An act of financial warfare - Michael Hudson says the Greeks should demand a Iceland-style referendum.

The most effective tactic is to demand a national referendum on whether to accept the ECB’s terms for austerity, tax increases, public spending cutbacks and selloffs. This is how Iceland’s President stopped his country’s Social Democratic leadership from committing the economy to ruinous (and legally unnecessary) payments to Gordon Brown’s Labour Party demands and those of the Dutch for the Icesave and even the Kaupthing bailouts.

The only legal basis for demanding payment of the EU’s bailout of French and German banks – and U.S. Treasury Secretary Tim Geithner’s demand that debts be sacrosanct, not the lives of citizens – is public acceptance and acquiescence in such policy. Otherwise the imposition of debt may be treated simply as an act of financial warfare.

10. Totally Broke Bank Mounting - Jon Stewart looks into the future. There are radioactive pandas involved.