Thursday's Top 10 with NZ Mint: ANZ's mortgage payment hiccup; Euro money supply red flags; Stressed German bank spits dummy; Obama loses his temper; Dilbert

Here's my Top 10 links from around the Internet at 9 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.

What a day. A tax reform package. A GDP growth surprise. A new NZ$ record high. Major fraud charges. A new Fonterra CEO. Could someone stop the news now please?.

1. How curious - TV3 reports that ANZ wrote to some mortgage customers to say their payments would be automatically cut to the minimum amount unless they contacted the bank.

This could be a big issue because the rate cut last year meant many people left their repayments at 'high' levels to repay debt faster, which is a good thing for customers, but not so good for the bank.

Anyone else experienced this at ANZ or any other bank?

ANZ appear to have blamed a technical glitch.

Is something else going on here?

Is this one way to stop deleveraging and keep lending growing?

Here's the details via TV3:

Last week she got a letter from ANZ instructing her to contact the bank, or have her payments slashed. “If you'd like to keep your repayment amount the same as it is now, all you need to do is contact us, “If you don't contact us, in due course, we'll reduce your repayment amounts to the minimum amount needed to repay your loan,

“Reducing your payments means you'll have more money to use for other things,” the statement read.

“I'm angry about the letter, and I'm still in limbo because I still don't know quite what to do,” says Mrs Sorasio.

ANZ says it's all happened because it's changing computer systems. It denies it's being irresponsible, or trying to make more money out of interest payments.

“If we've caused confusion and inconvenience I apologise for that,” says ANZ head of transformation Craig Sims.

2. America's lost decade - Ryan at Swift Economics points out there were no net new jobs created in America in the 2000s and household net wealth fell 4%, which is the worst since the Second World War. HT Troy.

Productivity and technological innovation did improve people’s lives last decade, but the benefits probably don’t exceed the costs if you have no job, are underemployed, and/or have been pushed into a less prosperous line of work. Why weren’t there any net jobs created in the Aughts? The continued rise of globalization, with countries like China and India utilizing cheap labor to take over the production of our goods, is one story. So, too, are technological innovations. From factory jobs to office assistants, technology has simultaneously made many positions obsolete AND increased the productivity of the economy.

omehow I have a feeling the lost decade will be the fault of capitalism and corporations. And let’s not forget all of our wonderfully free markets. While corporations deserve some of the blame, particularly the financial industry, let’s not forget the government. They have fostered a system in which GE allegedly just paid zero federal taxes for last year’s $14.2 billion in worldwide profits, with $5.1 billion of the total from operations in the United States. There has been a colorful debate over the New York Times claim, but it appears GE has used the ridiculously large tax law to pay zero or very little federal taxes; a tax law with all sorts of exemptions, credits, and deductions fought for by lobbyists of special interests groups, or groups in politician’s favor.

3. Flashing red - Ambrose Evans Pritchard at The Telegraph is very worried about money supply contraction in Italy and France.

Monetary experts are increasingly disturbed by the pace of money supply contraction in Italy and most recently France, fearing that it could prove a leading edge of a sharp economic slowdown over the winter.

RBS said the eurozone storm is far from over. "We expect the crisis to continue deteriorating, and threaten to undermine the entire euro area as European policy-makers still misunderstand market dynamics. They show no sign of catching up with reality," said Jacques Cailloux, the bank's Europe economist.

Mr Cailloux said the EU's bail-out machinery (EFSF) must be increased to nearly €3.5 trillion in committed funds to staunch the crisis. This would give the authorities effective firepower of €2 trillion. "It is a lot of money but the euro is a big project. This is all about political appetite. The longer they wait, the worse it gets.."

4. German bank spits dummy - BBC reports German bank Helaba reporting it will pull out of stress tests for European banks later this week to make sure it doesn't fail the test. Hmmm. That's one approach to bad news....

Helaba said it would have passed the test if regulators counted a debt-equity hybrid, called "silent participation", as a capital reserve.

It said the European Banking Authority (EBA), which runs the tests, had said it would accept silent participation but then changed its mind.

Its withdrawal will raise concerns about the credibility of the tests.

5. Obama loses his temper - BusinessInsider reports the game of debt ceiling chicken is getting to Barack Obama.

President Barack Obama abruptly left today's negotiating session to raise the debt ceiling and lower the deficit, House Majority Leader Eric Cantor (R-VA) told reporters after the meeting.

Cantor said Obama walked-out "angrily" after he offered to support two separate debt ceiling votes — a proposal Obama had repeatedly said he would veto.

"Eric, don't call my bluff," Obama said according to Cantor moments before storming out of the meeting. "I'm going to take this to the American people." Cantor said all progress in the debt talks has been erased.

6. 'Don't worry I'll just print again' - Helicopter Ben Bernanke reassured his mates in the stock markets that he would print again if necessary.

Here's Bloomberg:

Federal Reserve Chairman Ben S. Bernanke signaled the central bank has more tools for monetary easing should the economy weaken and stymie efforts to generate jobs for 14.1 million unemployed Americans.

The Fed could pledge to keep the main interest rate at a record low and hold its balance sheet at $2.87 trillion for a longer period, Bernanke said yesterday in congressional testimony. It could also buy more bonds, increase the average maturity of its securities holdings or cut the interest rate it pays banks on their reserves, he said.

“We have to keep all the options on the table,” Bernanke said in semi-annual testimony to the House Financial Services Committee. The “economy still needs a good deal of support.”

8. Watch the debt - Harvard economists Carmen Reinhart and Kenneth Rogoff have been very influential with their studies of how economies coped with financial crises over the last 200 years and how much of a drag on growth high debt really is. Here is their seminal work on 'Growth in a time of debt'

It is the intellectual underpinning for my bearish view about growth in the developed world over the next decade or two.

Here at Bloomberg  Reinhart and Rogoff warn the Krugmans of the world that simply ignoring the (albeit sleeping) bond market vigilantes is not a solution. Governments can't hope to grow their way out of debt by racking up ever-larger government deficits. This is today's Must Read I reckon.

Our empirical research on the history of financial crises and the relationship between growth and public liabilities supports the view that current debt trajectories are a risk to long-term growth and stability, with many advanced economies already reaching or exceeding the important marker of 90 percent of GDP. Nevertheless, many prominent public intellectuals continue to argue that debt phobia is wildly overblown. Countries such as the U.S., Japan and the U.K. aren’t likeGreece, nor does the market treat them as such.

Indeed, there is a growing perception that today’s low interest rates for the debt of advanced economies offer a compelling reason to begin another round of massive fiscal stimulus. If Asian nations are spinning off huge excess savings partly as a byproduct of measures that effectively force low- income savers to put their money in bank accounts with low government-imposed interest-rate ceilings -- why not take advantage of the cheap money?

Although we agree that governments must exercise caution in gradually reducing crisis-response spending, we think it would be folly to take comfort in today’s low borrowing costs, much less to interpret them as an “all clear” signal for a further explosion of debt.

Those who remain unconvinced that rising debt levels pose a risk to growth should ask themselves why, historically, levels of debt of more than 90 percent of GDP are relatively rare and those exceeding 120 percent are extremely rare. Is it because generations of politicians failed to realize that they could have kept spending without risk? Or, more likely, is it because at some point, even advanced economies hit a ceiling where the pressure of rising borrowing costs forces policy makers to increase tax rates and cut government spending, sometimes precipitously, and sometimes in conjunction with inflation and financial repression (which is also a tax)?

Even absent high interest rates, as Japan highlights, debt overhangs are a hindrance to growth.

9. Totally compulsive viewing of an encounter between Australian PM Julia Gillard and an agrieved voter in a shopping Mall.

The background here is Gillard promised not to bring in a carbon tax before election and yet is doing one now.

Why does John Key get off so lightly about his promise not to raise the GST?

10. Totally yet another Downfall parody video - But I still laughed. It's about the News of the World debacle.