Thursday's Top 10 with NZ Mint: Christchurch dealings; China strongarms Australia on minerals; Brazil intervenes in currency wars; US debt ceiling chicken; New American Lehman moment?; Cartoons galore; Dilbert

3. Portugal doesn't like Standard and Poor's after its shock 4 notch downgrade, BBC reports - All Blacks supporters also don't like Wayne Barnes...but blaming the ref is never very attractive from a market point of view. Portugese bonds are now yielding 13% and it is effectively shut out of the markets.

(Portugese Finance Minister) Mr Gaspar said the downgrade ignored the impact of an extraordinary tax on income announced last week, which was "proof of the government's determination" to meet this year's deficit targets by going beyond the bail-out agreement.

The one-off tax, which will require Portuguese workers to forfeit half of the extra one month's pay they receive as a December bonus, is expected to raise more than €840m.

Mr Gaspar said the government was committed to meeting deficit-reduction targets ahead of schedule and taking additional austerity measures beyond those set out in the rescue agreement.

4. A silver lining to the Global Warming cloud - The Guardian reports that thawing ice in the Arctic Sea is opening up a new trade route for US and European countries to China. One reason it is being used is a reduction in carbon emissions...

An increasing amount of seaborne traffic is beginning to move on the so-called Northern Sea Route which traverses the Siberian coast. There are also hopes of opening up more of the North West Passage above Canada.

The attraction of the voyage is that it is one-third of the distance of more traditional routes through the Suez Canal. This means less carbon-dioxide (CO₂) emissions and less fuel. It also means less pirates.

5. Watch the debt ceiling - BBC reports US Democratic President Barack Obama will meet with his Republican foes tonight to discuss raising the debt ceiling. It's getting tight.

This must be raised by August 2 or the world's biggest economy with its reserve currency will default on its debt. That would make the Lehman freeze of 2008 look like a picnic.

It's like watching the biggest game of chicken in the financial markets. Surely someone will blink or turn the wheel or something. Let's hope they dont' turn the wheel in the same direction...

The rhetoric looks ugly, although prices in the US Treasury markets suggest markets are very relaxed about this...There's 25 days left...

President Obama said he hoped the White House and US lawmakers would reach an agreement on debt within two weeks.

The president said he hoped the meeting on Thursday will "build on the work that's already been done and drive toward a final agreement".

But House of Representatives Speaker John Boehner said he "questions the usefulness of the meeting", according to an aide for the Republican leader.

Mr Obama said he opposed any efforts to "kick the can down the road" with a short-term increase to the nation's borrowing limit, as some lawmakers have suggested.

He added that any agreement over the debt must include not only spending cuts but also tax increases, which Republicans have already ruled out.

6. The beginning of the end - Or the end of the beginning. The Guardian's Phillip Inman reports there are now real concerns in Brussels about the future of the euro.

There is a growing sense of despair in Brussels. Unlike previous attacks on the euro project, the latest downgrade of Portugal's debt by the ratings agency Moody's feels like the beginning of the end. Those economists and fund managers who argued that a second bailout for Greece with private sector involvement would mean something similar for Portugal and most likely Ireland are hitting their target.

Like a 19th century battalion holding the line against oncoming hoards with depleted firepower and an officer class at war with itself, the euro's supporters are in a desperate situation.

The only answer is for the EU richer nations to admit that they made bad decisions when they bought peripheral sovereign debt. It was not a risk-free bet. It turned bad and their assets are only worth 20 or 30 cents in the euro.

The French and Germans, in particular, have rather smugly portrayed themselves as wiser than everyone else during the financial crisis. That somehow their adherence to a regime of "conservative" bond purchases allowed them to avoid the problems visited on the US, Britain and most other European nations.

If anything it is the opposite. They are up to their necks in bad debts, just as much as the UK: it's just that their debts relate to bad loans made to Greece, Portugal, Ireland and Spain, and not housing developers or buying exotic financial derivatives.

7. Brazil intervenes - Brazil's Finance Minister was the first to coin the phrase "currency wars" to describe the problem of US money printing and low interest rates squirting cash into developing and commodity-linked currencies and pushing up those currencies, destroying their manufacturing sectors.

Now the FT reports Guido Mantegna saying Brazil is set to take more action to intervene to support its currency. HT Les.

Yet our Reserve Bank remains stuck on the sidelines as our currency hits post float highs against the US dollar and pound.

Slow growth and low interest rates in advanced economies continued to put upward pressure on Brazil’s currency, Mr Mantega said, forcing the authorities to consider further intervention in currency and derivatives markets to limit overshooting.

“We always have new measures to take,” he told the FT, indicating on the sidelines of an investor conference that these would not be pre-announced, but would include market intervention. On Tuesday, the Brazilian central bank also announced a spot auction to buy US dollars in another move to boost foreign exchange reserves and stem the upward pressure on the real.

8. The case for manufacturing - The Economist is hosting a fascinating debate about whether an economy needs a manufacturing sector.

It's very topical for New Zealand as high commodity prices push up our currency and destroy much of our manufacturing export base.

Here Ha Joon Chang makes the case:

I propose that the state of a nation's manufacturing base (its size and competitiveness) is the most important determinant of its prosperity.

Hearing this motion, some may ask: how about countries like Switzerland and Singapore, which have become rich through services, like finance, tourism and trading; don't they show the viability of service-based prosperity?

Actually, they show the exact opposite. According to UNIDO data, in 2002, Switzerland had the highest per head manufacturing value added (MVA) in the world—24% more than that of Japan, the second highest. In 2005, it ranked second, after Japan. Singapore ranked third. So these supposed "model" service-based economies are in fact two of the strongest manufacturing nations in the world.

There are some service activities, such as finance, telecommunications and transport, which have had fast productivity growth in recent periods—sometimes even faster than those of some sub-sectors of manufacturing. However, these are mostly "producer" services, for which the main customers are manufacturing firms, so their growth is in large part dependent on the vitality of the manufacturing sector.

Moreover, when it comes to financial services, the 2008 financial crisis has revealed that much of the recent productivity growth had been due to "financial innovations" that obscured (rather than genuinely reduced) the riskiness of financial assets, thereby allowing the financial sector to raise its productivity at an unsustainable rate. With the forthcoming tightening of financial regulation across the world, productivity growth in financial services will significantly slow down.

9. America's Lehman moment - PIMCO's Mohamed El Irian wonders at Reuters if the European Debt Crisis is actually America's next Lehman moment.

This is not an economy that is well positioned to deal with a shock from abroad, let alone a major one. Its ability to absorb a systemic shock has been worn down by persistent internal economic weaknesses and the agility needed to sidestep, or at least minimize the impact of the shock, has been eroded by slow economic policy responses and stretched balance sheets.

All this helps to explain America’s concern about Europe’s debt crisis, which has led to periodic selloffs in capital markets and warnings from policymakers. It also speaks to why some commentators have gone as far to suggest that the country faces another “Lehman Moment” — a devastating shock that totally paralyzes the economy, disrupts the functioning of the financial system and pushes the country to the verge of a great depression.

10. Totally Jon Stewart - Here he muses on the hollowing out of America and what happens when the socialist Swedes come to America. Those who've been to an Ikea will laugh a bit.

"They're treating Americans like they're in the third world."