Thursday's Top 10 with NZ Mint: 'Protectionism and depression loom'; Michael Lewis on Wall St as a parasite killing its host; Too much saving and too much debt; 'Brokers worse than psychopaths'; Dilbert

Here's my Top 10 links from around the Internet at 1.30 pm in association with NZ Mint.

I welcome your additions in the comments below or via email to bernard.hickey@interest.co.nz.

I'll pop the extras into the comment stream.See all previous Top 10s here.

Ambrose is on the money with his must-read piece today on too much saving and too much debt (yes it's possible).

1. Protectionism beckons as leaders push world into depression - Ambrose Evans Pritchard at The Telegraph is in cracking form with his analysis of the imbalances in savings globally and how it is driving the world inexorably towards a series of trading blocs and an intractable depression.

He points out, rightly, that Germany and China have suppressed consumption at home and kept their currencies low in order to build up big foreign reserves that are lent to the current account deficit countries such as Greece and America.

Now Germany and China are squeezing the debtor countries to take the pain.

It's an ultimately selfish and self-defeating strategy.

But it's built on the huge growth in cross-border lending over the last decade.

It has created enormous instability, particularly while exchange rates are not all free floating.

This is today's must read I reckon. Here's Ambrose:

There is a chronic lack of consumption in the world. "This probably comes as a surprise to most people, gorged on propaganda about excessive debt and the need for retrenchment," said Charles Dumas from Lombard Street Research. The inevitable outcome of one-sided austerity polices in the Anglo-sphere and Club Med is a self-feeding downward slide for the whole global system, a variant of 1930s debt-deflation. "Excess savers refuse to acknowledge that if world savings are demonstrably too high, healthy recovery depends on the surplus countries saving less," he said.

Mr Dumas said China's "grotesque and destructive" policies of over-investment (50pc of GDP) and under-consumption (36pc of GDP) are unprecedented in history, but at least China's currency advantage is being eroded by wage inflation.

His full wrath is reserved for the "fallacious and malignant policies" of Angela Merkel and Wolfgang Schauble in Germany. They are enforcing a Gold Standard outcome on the whole eurozone. "Suffused with self-righteousness, they insist that the imbalances must be put right only by deficit-country deflation."

The sheer scale of global imbalances is made clear in a paper by Stephen Cecchetti at the Bank for International Settlements.

2. Bernanke agrees with #OccupyWallStreet - Here's US Federal Reserve Chairman Ben Bernanke agreeing with the protestors in New York.

3. 'Cops, pigs, murderers' - The NYTimes reports protestors in Greece were not happy as they marched overnight on the day of a national strike that has shut down the country.

Can't be good for GDP and that debt/GDP ratio...

Men and women shouted “traitors” and “employees of Merkel,” a reference to Chancellor Angela Merkel of Germany, at riot police in central Athens, while a crowd of younger protesters chanted “cops, pigs, murderers” — the Greek anarchists’ slogan.

By early afternoon, sporadic clashes had broken out between riot police and dozens of masked youths, some wearing gas masks, who hurled chunks of stone at police officers guarding Parliament, at Athens University and outside luxury hotels on the fringes of the capital’s central Constitution Square.

Most international travel was halted, with all scheduled flights into and out of the country canceled, the national rail service was suspended and ferries remained in their ports. Public transportation in the capital and other major cities was to run on a limited service to enable workers to attend protest rallies. Tax offices, courts and schools shut down for the day and hospitals were operating with only emergency staff.

4. 'Get your act together fast' - The FT reports via CNN the IMF has called on European governments to recapitalise its banks quickly to avoid a credit crunch.

Antonio Borges, the IMF's Europe director, on Wednesday warned that a failure to address a lack of confidence in the continent's banks could lead to a credit crunch at a time when the economy is already decelerating.

"We have to restore confidence quickly. The best way to do that is to have a capital increase rather quickly," Mr Borges said.

5. 'Parasites everywhere killing their hosts' - Michael Lewis, the author of my favourite financial crisis book 'The Big Short', has published an anthology of his recent series of long 'financial disaster tourism' articles on Iceland, Greece, Ireland, Germany and California called 'Boomerang.'

Now he's out hawking it around via Bloomberg, where he is also a columnist.

Here's the interview:

Lundborg: What’s the worst thing you’ve been seeing?

Lewis: The way the big firms meddled in the legislation to reform the financial industry after the crisis drives me batty.

I don’t think they should have had any place at that table, and they manipulated the legislation in ways that are not good for the rest of us.

There doesn’t seem to be any remoralization of the financial industry.

Lundborg: You say that when confronted with a dark room filled with money, Americans grabbed as much as we could.

Lewis: The common theme between public employee unions, say, and Wall Street bankers is an excessive focus on the short term and a weird blindness about the long term.

It’s unsustainable behavior, parasites everywhere killing their hosts.

6. 'It's worse than 2008' - Bloomberg reports Nicholas 'Black Swan' Taleb says the current crisis is worse than 2008 because countries have bigger debt loads.

“Definitely, we face a bigger problem now and we will pay a higher price,” Taleb, who is also a professor at New York University, said today at a news conference in Kiev, referring to the turmoil during the last global financial crisis.

“The structure of the problem has still not been understood. We haven’t done anything constructive in three and a half years. Nobody wants to do anything drastic now.”

Taleb urged countries to keep their budgets balanced, criticizing President Barack Obama of “loading the U.S. with debt that our children will have to pay” and said that growth fuelled by government debt isn’t really growth.

“Someone made a mistake lending and someone made a mistake borrowing,” said Taleb. “It is a mistake to transform private problems into public debt.”

7. Here's Michael Lewis being interviewed on Reuters talking about financial contagion spreading from Europe to America and the #OccupyWallStreet movement. "It could be a big deal."

On the problem of debt and how it's come back to haunt the world: "It's sort of like the rabbit moving through the snake."

8. It's time to fight back - Gordon Chang writes at Fortune that the bill currently going through the US senate to stop China manipulating its currency should be passed.

I'm beginning to agree. The only way to stop these huge imbalances in trade and capital is to have properly floating currencies.

Without floating currencies, maybe controls on actual trade are the only solution.

China is unlikely to retaliate. It can't afford to.

Everyone says trade barriers don't work. Well, unless the world acts to control these massive capital imbalances and the catastrophic volatility that goes with it, then it seems they are the only things that will work.

Here's Chang:

 Just as bad currencies drive out good ones—that’s Gresham’s law—China’s irresponsible currency manipulation will encourage other nations to engage in similar unconstructive behavior.  We have already seen the Japanese and the Swiss try to manipulate their currencies as Beijing has shown the practice to be both effective and beneficial.

So, if we want to protect the world’s free-trade architecture and stop the trade war that is already being waged, we need to get serious about China’s beggar-thy-neighbor approach to the renminbi.  And the way to do that is enact the Currency Exchange Rate Oversight Reform Act of 2011.

9. Traders worse than psychopaths - Germany's Der Spiegel reports on an academic study showing investment bankers and brokers showed behaviour that was worse than that of psychopaths. HT Rob via email.

According to a new study at the University of St. Gallen seen by SPIEGEL, one contributing factor may be that stockbrokers' behavior is more reckless and manipulative than that of psychopaths. Researchers at the Swiss research university measured the readiness to cooperate and the egotism of 28 professional traders who took part in computer simulations and intelligence tests. The results, compared with the behavior of psychopaths, exceeded the expectations of the study's co-authors, forensic expert Pascal Scherrer, and Thomas Noll, a lead administrator at the Pöschwies prison north of Zürich.

"Naturally one can't characterize the traders as deranged," Noll told SPIEGEL. "But for example, they behaved more egotistically and were more willing to take risks than a group of psychopaths who took the same test."

10. Totally a Jon Stewart video about how struggling families should be more like corporations.