Wednesday's Top 10 with NZ Mint: Goldman Sachs accused of giving bad advice in asset sale deal; China used 25 times more cement than US in 2010; Christchurch rebuild bogged down; Torchlight's Jacks Point loans; Tumbleweeds in Spain; Dilbert

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

We welcome your additions in the comments below or via email to

See all previous Top 10s here.

My must read today is #1 on how Goldman Sachs advised Dragon Systems. Let's hope they do a better job for the New Zealand taxpayer.

1. The squid gets nailed again - The New York Times' Loren Feldman has published a devastating and long piece carrying the allegations of the founders of a US speech recognition software company, Dragon Systems, which sold the company to a fraudulent Belgian compay called Lernaut and Hauspie in 1999.

They allege Goldman Sachs didn't do the necessary due diligence on the buyer and was working with a rival (without telling Dragon) who later got hold of the technology Dragon Systems developed.

They also allege in court documents that another arm of Goldman Sachs had looked at investing in Lernaut and Hauspie itself two years previously and decided not to after a close look.

Goldman Sachs is one of the lead managers advising the New Zealand government on the sale of Mighty River Power. See more on Goldman's involvement in the SOE floats here.

Here's the New York Times piece.

The deal closed on June 7. By Aug. 8, the merged companies were in crisis amid reports that L.& H. had cooked its books. Reporters for The Wall Street Journal did something the Goldman Four did not: they picked up the phone and called L.& H.’s supposed customers in Asia. They found that companies in South Korea and elsewhere that L.& H. had claimed were its customers weren’t doing any business with it at all. L.& H. had pulled sales figures out of thin air.

Although the Goldman Four never tried to call those customers, it emerged during litigation that other bankers at Goldman had done precisely that — about two years earlier, when Goldman itself considered investing in L.& H. in a plan known internally as Project Sermon. In it, Goldman’s merchant banking division took a closer look at L.& H. — but, apparently, never shared what it knew, and was never asked. Goldman was considering putting $30 million into L.& H., a step that, at the time, might have seemed conceivable, given the hype surrounding L.& H.

“Whenever we invest, we always want to talk to customers,” Luca Velussi, a Goldman analyst who worked on Project Sermon, later testified. Based on what Project Sermon’s team leader, Ramez Sousou, termed “preliminary” due diligence, Goldman declined to invest in L.& H. By Nov. 29, L.& H. had plunged into bankruptcy. Indictments and convictions followed. L.& H.’s stock price sank to zero — and the Bakers lost everything.

THE Bakers’ case against Goldman is simple. Their lawyer, Alan K. Cotler of Philadelphia, captured it in a single sentence in a motion for summary judgment: “The Goldman Four were unsupervised, inexperienced, incompetent and lazy investment bankers who were put on a transaction that in the scheme of things was small potatoes for Goldman.”

2. What we should be doing - Canadian authorities tightened rules on loan to value ratios and interest to income ratios for housing loans last week to help slow a housing market racing ahead because of very low interest rates.

Reuters reports this has been successful in slowing the market down.

New Zealand's Reserve Bank should do the same.

Tightening of government-mandated mortgage rules that came into effect last week could begin a tipping point, keeping enough would-be buyers out of the market to trigger a freefall in prices, especially at the low end.

For the time being at least, most economists and realtors believe the soft landing that policymakers have sought to engineer is starting to take shape. The slowdown comes after a robust, three-year climb in Canadian home prices and booming construction of condominiums.

"The housing market is already slowing down and that's something that we know looking at numbers, sales activity and even prices," said Benjamin Tal, senior economist at CIBC World Markets. "The recent change to regulations is really a gentle push in an already slowing market. And you always run the risk, when you push something that is already slowing, that you might make it fall," Tal said.

3. HSBC's problems - Bloomberg reports the Senate report on HSBC's money laundering shortcomings makes for interesting reading.

The lender ignored links to terrorist financing among its customer banks, including Riyadh, Saudi Arabia-based Al RajhiBank, which had ties to terror groups through its owners, according to the report. Internal documents show HSBC decided to cut ties with the bank before reversing itself under pressure from Al Rajhi, which received shipments of $1 billion in cash from HSBC’s U.S. operation from 2006 to 2010, according to the report.

HSBC’s U.S. unit “offers a gateway for terrorists to gain access to U.S. dollars and the U.S. financial system,” according to the report.

Paul Thurston, head of HSBC’s retail banking and wealth management unit, said the company will close the Mexico unit’s U.S. dollar accounts in the Cayman Islands, a jurisdiction that Levin said is “known for secrecy and money laundering.”

And HSBC is not the only one. When is someone going to break up these Too Big To Fail banks in the Northern Hemisphere for their various criminal activities?

Since 2009, the U.S. Justice Department entered deferred- prosecutions agreements with six banks over OFAC violations, including ING Groep NV (ING)Barclays Plc (BARC), ABN Amro Holding NV, Credit Suisse Group AG (CSGN) and Lloyds Banking Group Plc. (LLOY) Most violations involved stripping information from wire-transfer documentation to hide the role of a banned person or country.

4. The case for Chinese deleveraging - Economist Dee Woo from the Beijing Royal School writes via BusinessInsider that a catastrophic deleveraging of China's debt-funded infrastructure boom has started.

Woo points to the startlingly unsustainable amount of concrete consumption in China and what happened in Spain when it's consumption rose that quickly (its bubble burst). Remember that the ingredients for concrete and steel are those exported by Australia to China.

According to Société Générale, in 2010, China spent more than $1,000bn on construction (including residential/non residential real estate and infrastructure), representing around 20% of its nominal GDP,or almost twice the world average as the chart below shows. In 2010 the scale of the Chinese construction market outpaced that of the US and became the largest construction market worldwide with around 15% share. That year China's construction binge push its investment/GDP ratio to 48.5%, a record unprecedented in the recent history of China and other major economies. It's sufficient to say China is a construction-led economy.

In 2010, China’s cement consumption surpassed 1,800mt, which is around 55% of global consumption and about 25 times more than US consumption. With average consumption of 1,400kg per capita, China stands well above the world average ex-China of 300kg. History shows that such high consumption is hard to sustain for a number of years and ultimately leads to a construction crisis sooner or later.

In 2010, China has built around 1.8bn square meters of new residential floor space, which is the equivalent of Spain’s housing floor space stock. This construction has already provided accommodation for 60 million people while the urban population has merely increased by c. 20 million. If China were to keep its current construction pace over the next five years, the 9bn sqm new housing area built would provide accommodation for 300 million more people by 2015.

Therefore the available floor space stock in China will then be able to accommodate an urbanization rate of 65-70%.But according to IMF's forecast, it will be not until 2030 for China's urbanization to reach that level.

5.  And we're waiting... - The Press reports on the growing grumpiness in Christchurch about how long it's taking to get the re-build going.

It seems as if little major work will start until 2013 and that many home and commercial property owners are bogged down in disputes with insurers, or still planning. Gerry seems reluctant to really throw his weight around. Time to nationalise a few things? Gerry says no. But how long will this waiting go on?

Hawkins Construction South Island operational manager Steve Taw said the market was "difficult to put your finger on. Twelve months ago, we said in 12 months we'll be so busy we won't know where to turn. We're nowhere near where people predicted," he said.

Anthony Leighs, of commercial building company Leighs Construction, agreed things were slow on the residential building front. "It has started - however, the start isn't necessarily what everyone wants to see. They want to see all of a sudden this construction boom on the go," he said. "It will take time for significant momentum to build." 

Earthquake Recovery Minister Gerry Brownlee said yesterday that there were "a number of issues" affecting Christchurch's suburban areas. "We've got 3000 to 4000 households caught up in discussions with insurers and EQC. I do think the insurers need to shift themselves. I think some of their processes are unacceptably long-winded now.

However, "short of the Government nationalising everything", it could only add pressure through regular talks, Brownlee said.

6. What is it with Jacks Point? - It seems this Queenstown property development is a type of a accident black spot for finance companies -- a type of State Highway 2 near Maramarua of the world of property finance.

Tim Hunter at Fairfax has done a nice job of digging through the wreckage around George Kerr and Torchlight's dealings around Jacks Point, RCL, Bank of Scotland Perpetual Trust, the FMA and South Canterbury. The details make me sigh all over again. All the usual suspects.

Jacks Point was a graveyard for Hanover Finance too.

Here's some details Hunter has gleaned from a phone conversation with George Kerr. The details suggest it's no wonder the FMA got involved.

According to Kerr in a telephone interview, the wash-up allowed for some variation and Torchlight found itself short about A$14m. To bridge the gap, it tapped money from funds run by Perpetual under an arrangement apparently negotiated when Kerr's company Pyne Family Holdings underwrote a PGC rights issue in 2009.

Kerr insists this was an "interfund" deal commercially beneficial for both sides - Torchlight got its short-term finance and Perpetual's cash fund got a 12 per cent return, which was way more than it would get from bank deposits or mortgages. He also says Perpetual had a general security agreement covering all Torchlight's assets, which included cashflow of $8m a month, as well as specific mortgages on several pieces of Queenstown and Wanaka real estate, so the risk factor was negligible.

Chalkie will suspend judgment on whether this arrangement would have worked out, but it's clear it rang alarm bells with Perpetual's statutory supervisor and the FMA. The reasons are obvious. The money in Perpetual's funds belongs to mum and dad investors, who were expecting conservative management and modest returns. Call it interfund if you like, but lending their money to a related party on a short-term deal whose interest rate implied a higher level of risk was probably not the sort of thing they had in mind.

7. A ponzi scheme to pay fines - It turns out Peregrine Financial Group, the latest US futures brokerage Ponzi scheme disaster in America, has lost almost all the missing US$200 million. It turns out a good chunk of it went to pay build a corporate headquarters and pay regulatory fees and fines....


Here's the WSJ report.

Peregrine Financial Group Inc.'s founder said he spent most of the money allegedly embezzled from customers to cushion his trading firm's capital, fund a new corporate headquarters—and even to pay regulatory fines and fees, according to previously undisclosed parts of letters left when he attempted suicide.

8. Three Gorges not so gorgeous - Patricia Adams from Probe International writes that the Three Gorges dam completed in China earlier this month is more of a disaster than a triumph.

Zhang did not mention that the cost of the project (US$60 billion) had grown six-and-a- half times more than the original estimate of $9 billion approved in 1992 by the National People's Congress. Earlier this year, a study presented at a symposium on the impact of the dam, suggested that the cost may be higher still.

Meanwhile, the price per kilowatt of power produced by Three Gorges is four times higher than the national standard set by China's State Electricity Regulatory Commission (SERC). Other costs remain harder to pin down, such as the project's toll on livelihoods and the region's geological stability as the risk of landslides continues to force more residents out.

Chinese officials admit that the constantly rising and falling reservoir level is triggering landslides in some 5,000 potential danger sites around the reservoir, requiring the evacuation of 300,000 people, over and above the 1.4 million already moved to make way for the dam's 600 km-long reservoir. Meanwhile, a study by seismologists at the China Earthquake Administration indicates that the dam has "significantly increased" seismic activity 30-fold in a phenomenon called reservoir-induced seismicity.

9. Don Quixote closed for business - Regular readers of the Top 10 might remember I referred a year or two ago to the Ciudad Real International Airport (nicknamed Don Quixote airport) built in central Spain for 1.1 billion euros of public money.

It was failing when I mentioned it in November 2011.

It's just been shut down. The pics below tell the story. I love the cactus growing on the runway.

The 28,000 square-foot airport now sits abandoned, despite its ripe positioning for holiday makers from within Spain, as well as international visitors , thanks to its parent company going into receivership, according to Think Spain.

The runway has been continually painted with yellow crosses as warnings for pilots not to land there, according to the Daily Mail.

10. Totally a promotional video for Ciudad Real International Airport.

(Headlines updated to make clear it's Wednesday not Thursday. Yikes!)

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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This piece on China's One Child Policy is interesting:
According to a leading demographer on China, by 2013, with the growth rate of net consumers exceeding the growth rate of net producers, China's demographic dividend growth rate will turn negative. A rapidly aging population (thirteen percent of the population is over 60, the retirement age for men in China) makes elderly care a major concern in a country where the social security system is still underdeveloped. Furthermore, it contributes to the rapid rise of chronic noncommunicable diseases, which are responsible for 85 percent of China's overall mortality. In addition, the persistent male preference under the one child policy has led to infanticide, selective abortion, and female abandonment, which result in an extremely high sex ratio at birth (SRB). The current ratio in China is about 120, or 120 boys to 100 girls. Eight years from now, there may be 40 million more men of marriageable age than there are women in China. Already, the large number of young migrant male workers has contributed to a booming commercial sex industry in China. The sheer number of surplus men is believed to be a deficit for social-political stability.

There are huge social changes happening within China, the results of which are largely guesswork, as it is highly unusual to have a population so weighted in favour of males. 
A few further musings on the ramifications of the one-child policy though:
1.  Are the (no doubt, very indulged) only children becoming more attracted to notions of individual rights? 
2.  How long before those same children decide that it is simply too much of a burden to be responsible for a multitude of aging parents, grand parents and in-laws, thereby bucking cultural trends which would have the elderly cared for at home?
3.  How will the elderly fare in a society that is dominated by men?
4. If global affairs turned nasty over the next few years, would a male-dominated society mean that China has a greater propensity for warfare, or would the unwillingness of Chinese parents to sacrifice their only sons make that prospect less likely?
Also, the BBC ran an item the other day about the growth of social networking among Chinese youth and the sweeping behavioural and cultural changes that this is fostering.  One example is a huge push for Chinese women to start breastfeeding.  How much of a threat would a shift like that pose to Fonterra, given that it would likely reduce demand for infant milk formula?  Here's a link:
As the old Chinese curse goes, may you live in interesting times...

Fonterra are onto the breast milk problem. New advertising slogan in China.' Confucius say's woman who save breast for husband and feeds baby from tin has, happy home and baby grows big like Fresian bull'

and with some of the additives could end up being as smart as one too...........
Don't think they could fit it on the Billboard A.J.............

Its hard to beat the'breast is best' campaign. Who's going to argue with that?

I saw a guy holding a sign in the E.U. the other day A.J. it read..
I don't need sex as the Government f%#ks me's getting real traction.

There might be a few very cheap holiday homes up for sale in France soon....
Around 200,000 Britons with homes in France will now face a new "social contribution", which is to be levied on all foreign owners of French property.
This contribution, similar in nature to the National Insurance contribution in the UK, is set at 15.5%.
When added to the income tax already charged, Britons will be forced to cough up 35.5% on rental income from unfurnished lettings.
Changes to capital gains tax will also be rising from 19% to 34.5%, meaning that Britons who sell their second homes for a gain will now take home a substantially smaller profit.

There is an old poker saying Bernard
You can shear a sheep many times but skin him only once...
I think the french, (which are by the way lovely people and don't deserve the rep of being rude), will find this out the hard way...

Hi Bernard, I am still on Wednesday here.

Thank god for that, Im on Tuesday and was wondering if NZ had changed planets while I was gone.

Ha Ha Ha...brilliant...! you naughty pointer outer Basel B
He's rattled......the man is rattled....!

I think he put it up and went to lunch A.J. ...he'll see it on twitter any minute now.

It is of course Wednesday not Thursday.
I am chastened.
But very early... ;)

It takes a Big Man to admit his mistakes Bernard takes a clever Big Man to see the positives in it.
Good for you.

Great, Bernard.
I just had thoughts that I could have made a lot of $$$$ if it really was Thursday's news.

Being early is not always a good thing Bernard ;-)

re #2
1. I believe that house price changes are excluded from CPI?
2. These are fiscal rather than monetary policies, so I would expect them to be implemented by the Govt rather than the RB unless they want to change the GB Act.
Having said that there is a role for fiscal policy to manage property price issues within NZ to limit some demand - the nice thing is this could be done by region, so Auckland gets a higher deposit requirement ratio to dampen demand while almost everywhere else stays the same as no price increase issues.

Re # 6
So so good to see see some real investigative jounalism.  Go Tim Hunter.

Re#9....Don Quixote closed for business.....the sheer irony of it has me gobsmacked Bernard.....couldn't have said it better myself.
Onward and upward and no cactus shall invade your runway......good luck.

Too subtle christov. Might need to spell it out. In simple terms. Keeping the keeper busy today.

sorry I'm pretty dumb on these things.
You'll have to spell out the cryptic thoughts for me.
go for your life

Yes cheers Bernard...I'll be sure to frame this response.....
We go back a long way with the Quixotic Syndrome......geez mate I think it was both the Crafar affair , followed by old man Hubbard...
 I did raise a couple of issues over there at 90 at 9...their not cryptic in any way so if youv'e a mind too you may want to respond.....
It was extremely dissapointing you decided not to respond to "the Conversation " was your should have showed some interest ..., then to move the subject along as if it didn't happen was a tad more annoying ...follow that with the embarrassingly obvious manipulation of readers choice when it should have been Wooly's, and continued that way as it  would have done on a normal basis.... but for the fact the whole thread left I suspect a bad taste for you.....
You will note the lack of interest in the learned Guest approach to the aging issue currently up....?
You will note current readers choice(although worthy) is well out of date, so how in hell did the Sunday Monday posts not even make the timeline.
I accept it is at your discretion, but that kind of makes a mockery of readers choice just because the site may not approve of the response.
Hope that is less cryptic.....Cheers

What a pair...
No Cactus Jack....Thistle do it is also Thursday...(not) Spain.....
Get yer facts straight b4 yer runaway wit yerselves. 
That is two wrongs do not make a the big guy.....and one for the Count.
Talking of which...
Tilting towards windmills in Spain...everything is flailing.
But.....Tilting towards Capital Gains in France for the Brits...They must be desperate.
Every thing is on a
Even the Big 4 Banks here aint even. Two is tilting one way....And two the other.
Jeez ...Christov...Which way is up.
Or are we all under water.....Like a Maori Party stopper.
Plenty of water they can have or free...tell em......stick out a bucket or a roof catchtment .. me.
OR go to the Olympics. They have had enuff for a lifetime.
(So has France.....and most of Europe underwater, but Germany......they is making gravy)
I have just about had enough of the wet stuff...
One rule for one bank, one rule for the other bank, one rule for the right bank, one rule for the left.
One for the indiginous, one for the indignant.
One rule for Spain, One rule for France, one day it is Thursday, one day it is Wednesday, but it was still Tuesday in Europe.
Jeez wonder I do not know right from wrong anymore...This financial malarky is miss-leading. The water Rates will be going through the roof...
The Party is falling apart, the banks are falling apart, the catchments have catches and all together I do not know whether I owe someone a living, or they owe me.
Better keep my head down...
Third time unlucky they say.

Alter Ego...thanks , enjoyed your me wondering though , if Bernard doesn't get me , what the hell does he make of you ...?
 I am a novice in your field ...of course SoreL was the master.

an open invitation there christov .. your turn .. go for it .. I'm waiting .. and no putting the response through your oblique cipher machine

Hilarious iconoclast I was responding as you were posting cypher, it's up..!
 Where's bloody GBH when I need him, cause I think I'm gonna need him...!

I was thinking about GBH when I saw the talk of breasts, if he was about I would have though that would see his keyboard smoking.

I suspect GBH has now got his dumpster drivers licence and is in a fly-in fly-out routine from Adelaide to WA,  21 days on and 7 off. Bit like being in a checkout-trance in the supermarket.

Just don't know where he got to scarfie.....but it is a loss.
 Stay well.

Cannot please everyone. But we can have a laugh and make a point.
A novice....Don't sell yerself short.....Count...
Like care.
I never used to care, now I rant, because I do.
I have the time, money and inclination.....not like some of these amateurs...and sore-losers.
I do not care what people say about my Alter Ego.
It is a blog site, not a Finance Site to me.
Just another prawn in the scamsters pool.  Might as well stir the pot, while I can.
A make munny out of traffic...Count. skim here, a skim there.
I would prefer the truth from this site, the whole truth and nothing but the truth, but that would be expecting a Poll-lie and a Bwanker to never lie in their own INTERESTS.
I just try to point out my version of the truth, even if it adds to the adds..... portrayed.
If they do not like my version of the truth, stop making me rant even more, every day.
The sheep analogy about fleecing and skinning was so apt.
The sheep have no idea....YET.
And do not mention that GIRL, ...Sore-Loser in my presents.
SHe was master of nothing, a mere sheep in wolfs clothing.
Like a lamb to the slaughter. (lamb, sheep, sheeple, they get killed orf...eventually)
Like a big girls blouse. (a big distraction)
Like....A Facebook's IPO...(A big non-event).

Geez Meh.....maybe they( the Chinese) are planning to spread out a little, you'll have to get Kiwi a copy to explain it to us.....that should be ...interesting.
Ta for the link though....worth a look for sure.

Good Link. Thanks. When reading these stories it is always important to remember that the quality of Chinese construction is pretty low. I lived in Apartments in Shanghai & Chengdu. Both were around 10 years old, felt like they were 50 years old. Crumbly, cracks, rusty metal work & loose wires.
Last year a Chinese state owned construction company (using Chinese workers) got sacked from  building a Polish motorway. Much of the work has to be redone due to quality porblems.
So not only are there ghost cities, but they are poorly built ghost cities

I think the Chinese will be filling the place up nicely, quite soon.
Well maybe not nicely. I think they will be sending in the troops to get their just deserts.
The deserts will be a wasteland no more.
They will be full of Chinese, digging a bigger hole.
And a bigger hole will be excavated for rich minereals.......or is it for renmimbuy...or even work for some dolers.....I cannot spel  either....just for today.
Africa is one of the last untapped the Chinese have an eye to the futures.
They wanna get even with Russia and the USA.....and they need some resource to fight over.
Hence why they are even there, building a brighter future.
And now is the calm, before the.........................STORM.
Maybe that lone runner knows something we don't.
PS...they is even buying up GM......and other stuff ...and also expertise.
Don't they make Army trucks......and other Vehicles.
I think China, will be playing Space Invaders for real-ty soon.
Maybe even the USA too...(They is moving on all fronts, softly ...softly.Syria-siously)
Maybe even Russia....and the Middle East, is not without scope, or allies, or foes.
But sometimes.....I am just PARANOID.
But sometimes....I am not left....but.....

I was gonna say they don't come much bigger, but that would have been unkind.

Failure to get the rebuild going is 90% the Government's failure, primarily due to the incompetence of EQC.
After finally getting agreement from NZI on an Avonside write off.  EQC have now decided their assessor in September 2010 got it wrong assessing the house as overcap!
They now want to pay out on both events - so instead of leaving it as is with the $115k payout already made, EQC staff now want to pay more!!  Potentially $200k.  HOW BLOODY STUPID!  EQC want to throw away more taxpayers money that the private insurer is happy to pay out.
Not only are EQC stupid, they are wrong.  There is no question the house was a rebuild after September 2010.  What are they thinking wasting time and resources - all so that they can spend more money???
EQC are hopeless - they still owe us half a million dollars in unpaid payments that have been agreed by them.
The number of stories I could tell, proves EQC's problems are endemic.
It is appalling that many are trapped in houses they can't sell because their private insurers are unwilling to pass over rebuild benefits to new owners, yet EQC are unwilling to admit the true scope of works.
This is shocking and urgently needs sorted.  Why are the media not really getting to the heart of the story?  Probably because too many are afraid it will make things worse - but at some point people will start to take the attitude that they have nothing to lose.

china not only produced more cement than the u.s.a. they also used twice as much energy to produce it according to steve cortes of cnbc.
the chinese economy is built on a myth and plenty of bull froms its leaders

#1. "The squid gets nailed again" .. c'mon bernard .. join the dots .. Lehman --> Jonkey --> New York Fed --> Timothy Geithner --> Hank Paulson --> Goldman Sachs --> The Squidoo --> Mighty River .. the hands are not clean .. conflicted would be a better word .. would you like me to go on

Re #1 - Economic Hit Man 101...NZ is going down....still being fattened up for the kill at this point. Goodbye Sovereignty.
If Goldman is here, we are the meat on the table. Notice how lately we have had news reports quoting "Goldman economist..." -that was the set up.
It would be nice if one single country would wake up before being gutted, nicer still if it was reported in the media and named for what it is...but we like everyone else go willingly to the slaughter.
It doesn't matter how many times this fraud is played, it always works. NZ is the Montgomery Alabama of the OECD.

"% China Doom and Gloom."
Michael McCarthy hammers a nail.
“In Fortescue’s, Rio’s and now BHP’s results, we’ve seen record production levels, record shipping to China,’’ said Michael McCarthy, market strategist at CMC Markets.
"At what stage will the market say we’ve got the China story wrong? The China bears have been calling for a hard landing for over 18 months and yet at the company level we consistently see increases in production and sales," Mr McCarthy said.
"The answer is they’ve got it wrong but that doesn’t stop them getting bearish about the prospects," he said. “Sentiment is certainly dominating rather than the traditional numeric approach to investment.”

The China story is looking a bit confused, but certainly those results do not support the idea that China is crashing 
Time will tell

Dunno where all the stuff is going, but have a look at the 4th item down on Alan Kohler's charts comparing chinese steel, cement, and electricity production since 2000. Yes, BHP and RIO have just announced record levels of production. So where is it all going? Dunno where Kohler gets his charts from, but he is challenging the latest China GDP figures. And it calls into question Bernards chart on cement production above.

Wow you really exist in a la la land of make believe...doubt what you say, yes highly....evidence yes I'd like that because you show none.
Tell you waht do like the climate deniers are doing to NIWA and sue the council and present your evidence......
a) Manufacturing is switching back to the US because the cost of chinese labour is rising and the cost of shipping across the pacific due to fuel / energy prices is rising.  So the margins to offshore have in effect gone, US steel v chinese steel is one large example.  I think there was a wall kettle manufacturer in Tennesse that can to the same conclusion. 
b) Taking Hong Kong v Atlanta as an example of denisty doesnt work, it ignores how much money hong kong makes per sqm v atlanta...and hong kong isnt china. In fact if you look at how crazy china has been in building as you want to see there is overcapacity to 2030 or so....madness.
c) Also of course there is risk...for instance chinese solar panels have been tariffed effectively out of the US manufacturers can "compete" in effect political buyoffs.
d) The energy claim on the USA is like ethanol before it.....its,
i) Robbing Peter to pay paul in that the EROEI is < 6 to 1, so its subsidised and heavily so....same with Ethanol its 1 to 1 so that energy deficit has to be recovered from elsewhere. so less food
ii) Hype, Dakota fields are nothing like the North sea, the fact they are that deluded says a lot of how much credibilty you should put into that from a business perspective.

#5 John Key has forgotten what a government exists for.
There's a nice description of the US Federal government as an insurance company with an army. Notwithstanding our different constitution we could do with one of those in Christchurch. As I have said in previous comments it feels here like what leadership there is just sputters along.
It must have felt great to do a Giuliani for the cameras way back when but every Cantabrian has the image of John Key promising on camera to stand behind us. We thought he meant even when things are getting hard and there are no cameras to ponce in front of any more.

JK used the earthquake to help him win an election, that's all.
To understand the mess- read The Shock Doctrine by Naiomi Klien
It is the only way to make sense of things like the government's longer term  response to the disaster.

KA-POW. You really do need to do your homework Bernard. As AlteredEgo above pointed out yesterday of not being able to differentiate between a thistle and a cactus. You have upset the cacti. You have put a burr under Cactus Kate's saddle. This morning over at NBR she has given you a serious spray. Blaming it all on you. All your fault. Keyboards at 50 paces?

Keyboards at 50 paces .. Cactus Kate incensed at BH mistaking her for a thistle or a prickle.
Was re-thinking that, with comment of the day in mind, and re-arranged the sequence ..