Friday's Top 10 at 10 with NZ Mint: Europe's Marshall Plan not nearly enough; Fed planning for US default; Chandler's Sino-Forest gamble; Go Gecko Gone; Dilbert

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

Plenty of meat from the Euro debt crisis overnight to chew over...

1. What was he thinking? - Bloomberg reports Richard Chandler, the Kiwi billionaire based in Singapore, has increased his stake in troubled Chinese firm Sino-Forest to 11%.

You might recall the share price on this one collapsed after an independent analyst said the company, which has bought forests in Northland, was fraudulent.

Chandler is getting in after John Paulson, the guy who made a fortune shorting the US sub-prime market, got out in a hurry.

Chandler has a history of buying into Korean companies with corporate governance problems and helping to clean them up.

This could be entertaining.

Good luck to him.

Here's Bloomberg.

Chandler, a New Zealander who Forbes said last year had a net worth of $3.1 billion, is the third-largest shareholder in Sino-Forest after Davis Selected Advisers LP and Wellington Management Co., data compiled by Bloomberg show.

In 1986, Chandler and his brother Christopher founded emerging-markets investment firm Sovereign Global, which eventually grew to hold $5 billion in assets, according to Institutional Investor. They eventually parted ways amicably and closed Sovereign. Richard started Singapore-based investment firm Orient Global in 2006.

2. It's not over yet - Jeremy Warner at The Telegraph makes the good point that the European 'Marshall Plan' for the PIGS is no ultimate solution.

That ultimate solution is a full fiscal union for Europe where essentially the Germans control tax rates and spending in every European country.

That's the only way to keep the euro together.

Here's Warner:

For months now, eurozone leaders have been promising to do whatever it takes to save the euro. Yet up until now they have failed to match words with actions, if only because what needs to be done to keep the show on the road – move towards some form of fiscal union – has been politically unacceptable to the nations who must sign the cheques.

Now, finally, we have some movement. Thursday's draft package of measures to ease Greece's debt burden and enhance the scope of the bailout fund was rather more comprehensive than I'd been expecting. It's not quite what some are portraying it as – the day that Europe signed up to the creation of a superstate – but it's another big step in that direction. The more positive mood in markets on Thursday suggests that it might even buy some temporary respite.

Yet any analysis of the detail immediately reveals the package to be shot through with difficulties and ambiguities, both political and economic. It's messy and incoherent, as well as falling some way short of what's ultimately required to knock the wider euro crisis on the head. By creating extreme moral hazard through ultra low interest rates for the afflicted nations, it also threatens to sow the seeds for an even worse eurozone debt crisis at some stage in the future.

3. Planning for default - The Telegraph reports the Federal Reserve has started making plans for a default of the United States.

Not so reassuring.

"We are in contingency planning mode," Charles Plosser, president of the Philadelphia Federal Reserve Bank, told Reuters. "We are all engaged ... It's a very active process."

Despite repeated warnings of the financial disruption that's likely to ensure from a default, The White House, and both parties in Congress, appear no closer to striking a deal as this week draws to an end. President Barack Obama and the Republicans and Democrats are trying to reach an agreement on how to cut America's long-term deficit as a condition of raising its debt ceiling.

Mr Plosser said that the Fed is currently examining the multiple questions and dilemmas that would ensue from a default. The central bank, for example, accepts US government bonds, or Treasuries, as collateral for the loans it makes on a daily basis to banks.

"Do we treat them as if they didn't default, in which case we would be saying we are pretending it never happened," Mr Plosser said. "Or do we treat them as if they defaulted and don't lend against them?"

4. Useful steps but not much of a strategy - The FT's Wolfgang Munchau is always a useful read on the machinations of European debt deals.

Here's his view on the one(s) overnight:

It appears that the eurozone is forcing Greece into a selective default. As part of such a package, short-term Greek debt will be more or less forcibly converted into long-term debt. The wretched bank tax is mercifully off the table. And the European financial stability facility will most likely be allowed to purchase Greek debt at a discount. Let us not mince words here.

This would be a default, the first by a western industrialised country in a generation. I am not quite sure how it is possible for the European Central Bank to agree to this, or to all of this. But I will surely be intrigued to hear how Jean-Claude Trichet will manage to be consistent with what he said a few days ago. There are also reports that the eurozone leaders may accept a more flexible EFSF beyond those bond purchases.

The outlines of the agreement, as they have been presented so far, still fall short of the main goals – to have an EFSF capable of dealing with Italy and Spain – and to have a Greek package that reasserts debt sustainability one way or the other. Like all decisions in the European Council, this is a compromise for sure. But there are limits to compromises when you are dealing with a contagious debt crisis. You either do enough, or you do not. They are still lacking a strategy to deal with the wider crisis.

5.' Dig into the toolbox' - As John Key meets the US Federal Reserve in Washington this week, the world's most important central bank is busy digging through its money printintg tool box looking for ways to rescue the US economy.

Here's the latest chat from one of the Fed Governors via Reuters:

If the U.S. economy does not show signs of sustainable improvement this quarter, the Federal Reserve should dig into its toolbox to find new ways to help it along, a top Fed official said on Thursday.

The Fed has held short-term rates near zero since December 2008 and in an unprecedented move, bought a total of $2.3 trillion of long-term securities to stimulate an economy struggling to right itself after the worst downturn since the 1930s.

But signs the recovery is flagging, again, suggest the economy needs more gas, and soon, Chicago Federal Reserve Bank President Charles Evans told a small group of reporters in a joint interview.

"If it were easy to do, if we had a very effective policy tool like a positive funds rate, if we could cut that by 100 basis points, then I would almost surely be advocating something like that," Evans said. "But in the absence of that, I think we have to think about the other tools."

6.Privatisation won't work - UBS economist Stephane Deo argues privatisation is not the solution to fixing a nation's debt problems. Are you listening John Key?

Here's the Economist on Deo's paper:

Deo suggests three alternatives to privatisation. 

First, the likes of Greece may be able to return to the bond market earlier if they pledge revenue from state-owned assets as security against new bonds. Second, leasing state-owned property rather than selling it would provide consistent deficit-reducing revenue year after year, rather than a one-off debt reduction. Finally, rather than privatising state-owned enterprises, why not impose market discipline, while retaining ownership of the subsequent profits?

Deo is right to criticise the Pavlovian reaction of governments faced with a combination of high debt and readily available assets, to sell the assets, and sell them quickly. That neither maximises long-term revenue, or, more importantly, lays the ground for effective institutional reform. However to argue privatisation should be avoided altogether places too much trust in governments, whose poor economic management created problems in the first place.

7. Markets betting on no debt deal - The Economist's freeexchange blog highlights how the markets have started pricing in a US default in recent days.

It's worth noting today's big market move—at Intrade. Contracts on conclusion of a debt deal by the end of July dropped sharply today on high volume, indicating that no deal is seen to be the most likely outcome. More worrisome still, contracts on completion of a deal by the end of August also sank. Let there be no doubt: the failure to reach a deal on the debt ceiling through the month of August would mean a return to recession. That this isn't entirely out of the question is a frightening thought.

8. Problems in Brisbane - MacroBusiness points out a Queensland real estate agency group called Go Gecko has kicked out its CEO. The pressures are growing in Australia's housing market.

Unless we see a major turn around in credit issuance I really can’t see the other branches lasting. It would seem that the Real Estate market is in for some consolidation. Death of the little players while their carcasses are picked over by the big boys as they too down-size to meet the market.

Next to go Mercedes and BMW leasing services.

9. Totally Saturday Night Live on Ronald Reagan - Maybe he didn't have Alzheimer's...

10. Totally Clarke and Dawe - They do their thing on Murdoch's appearance before the British parliament. All they can do is read between the lines...