Wednesday's Top 10: America's debt ceiling Russian Roulette v 2.0 (Bazooka style); Danone's baby formula 'sponsorship' fees in China; SkyCity's wages of sin or stupidity; Dilbert

Here's my Top 10 links from around the Internet at 10 am today. As always, we welcome your additions in the comments below or via email to bernard.hickey@interest.co.nz. 

See all previous Top 10s here.

My must read today is #3 on China's ambitions in central Asia. Barack Obama's decision to miss APEC and ASEAN looks worse and worse the more you look at it.

1. What if they actually pull the trigger - I compare the current Congressional antics over the US Debt Ceiling to playing Russian Roulette with a Bazooka.

There's only one round in the chamber and it will blow up the room as well as take the heads off both players.

Yet as I write we are just days away from a breach and the unthinkable.

So what would a debt ceiling breach actually look like.

Kevin Roose at the New York Times has a good close look at what a breach and default might look like.

It's ugly.

Real ugly. Of course it will never happen...

Here's a few clues  in this scenario:

These technicians have spent the last few weeks building and testing software patches they believe will keep vital systems like Fedwire – the Federal Reserve's payment clearing system – running as usual even in the event of a default. But they can't know for sure that the patches will work. One of their biggest worries is about the repo market – the daily exchange of Treasury bonds and other securities that allows banks and other institutions to secure short-term funding.

Some dealers are already refusing to accept certain Treasury bonds as collateral on repo transactions, and even though they've been reassured that Fedwire and other systems will allow defaulted Treasury bonds to flow through their plumbing normally, there's still the risk of a mistake.

2. A boom? - Or is London's housing market actually experiencing a big bust...in real terms. Here's Dan Crum at FTAlphaville.

Greater London prices dropped 30 per cent, in real terms, before turning at the start of this year. Even though they rose far less in the first place, adjusted for inflation, UK house prices are still down more than 30 per cent from the top in 2007.

3. China's new silk roads - The rise of China is a diplomatic event too in central Asia, where it hopes to create some big new silk roads, trumping the Americans and the Russians in the process, the Washington Post reports.

Dating back more than two millennia, a web of trade routes linking oasis towns brought Chinese silks and other products from across Asia to the West.

In his call for a new Silk Road, Xi was underlining the importance of China securing its energy supplies — overland to the gas and oil fields of Central Asia and beyond, and by sea through Asia’s contested waters and via the busy Strait of Malacca.

Last month, Xi traveled to Kazakhstan, Kyrgyzstan, Turkmenistan and Uzbekistan and signed tens of billions of dollars’ worth of investment deals, taking a share in a major Kazakh oil field and expanding gas imports piped from Turkmenistan.

4. Danone not so squeaky clean either - Danone is currently claiming over NZ$200 million in damages from Fonterra over the recent botulism scare.

It turns out it has a few of its own problems to deal with in China.

Bloomberg reports Danone's Dumex baby formula business in China paid bribes to doctors to encourage them to use Dumex.

The latest government statement comes after reports by state broadcaster China Central Television last month that Dumex made improper payments to medical staff in the country to boost sales. The government has sought to crack down on corruption in the country’s $350 billion health-care market, probing multiple drug companies amid claims of doctors’ involvement in malfeasance.

Dumex had given hundred of thousands of yuan annually in various forms of “sponsorship fees” to doctors and nurses in hospitals to sell its products amid fierce competition in the industry, CCTV reported last month.

5. Not so safe or opaque any more - Switzerland is set to sign a new multilateral convention to combat tax evasion, the FT reports.

The convention requires governments to co-operate with cross border requests for information, help with tax audits and enforcing tax claims. It is seen as a step towards a more concrete agreement being pushed by the G20 on automatic exchange of information that would take place by mutual agreement of the countries concerned.

Switzerland, with its long tradition of bank secrecy, has a pivotal role to play in the international transparency drive because of its scale, with $2.2tn of offshore assets under management, according to the Boston Consulting Group.

6. Here come the jellyfish - I had no idea, but Quartz reports a growing problem of jellyfish blooms clogging up all sorts of things, including nuclear reactors in Sweden.

Throngs of jellyfish have disrupted power generation everywhere from Muscat to Maryland, from South Korea to Scotland. Things are worse in the fishing business, where blooms have wiped out billions of dollars in earnings over the last few decades.

They’re also a nightmare for fishermen, who must contend with bursted nets and clogged trawl lines. Japan’s now-annual bloom of Nomura jellyfish, which each grow to be the size of large refrigerator, capsized and sank a 10-ton trawler when the fishermen tried to haul up a net full of them.

7. The end of the Dutch Irish sandwich? - Quartz reports Ireland may be about to pull the tax avoidance rug out from under the likes of Google and Apple, who route money through Ireland and Holland to reduce their tax bills.

Irish minister for finance Michael Noonan released an agenda for further tax reform (pdf) as part of the country’s budget process. On the heels of criticism from the United States and European countries who fear that global companies’ aggressive use of Ireland’s tax law is depriving them of revenue, Noonan announced new information-sharing initiatives, but more importantly promised “a change to our company residence rules aimed at eliminating mismatches—that can exist between tax treaty partners in certain circumstances—being used to allow companies to be ‘stateless’ in terms of their place of tax residence.”

8. I had no idea it was this high - Australian gambling researchers Francis Markham and Martin Young write here at The Conversation about how much of casino revenues and profits come from problem gamblers.

Most gamblers are locals, with international visitors making up just 5% of customers at Australian casinos. Most casino revenue does also not come from VIPs, who in 2007-08 contributed only 17% of casino gambling revenue. Instead, 40% of casino gambling profits came from pokie players, with the remaining 43% being lost in the main gaming table halls.

Given that an estimated 41% of pokie expenditure comes from problem gamblers – as does between 12% and 32% of casino table game expenditure – between 20% and 30% of gambling revenue at Australia casinos may be derived from problem gamblers. This, however, is under the doubtful assumption that no VIP gamblers are experiencing gambling problems. Casinos, therefore, are unlikely to be viable in their current form without causing serious harm to their best patrons.

9. The costs of low wages - Businesses and governments tend to think low wages are good and are against increases in minimum wages.

But Susan Berfield writes at Bloomberg that low wages also mean low taxes and high social welfare costs.

Two studies released today make some different calculations to determine the total cost to American taxpayers of a large, low-wage workforce. It comes to an average of $7 billion a year. That’s the amount of annual public assistance families of fast-food workers received between 2007 and 2011, according to a new report written by economist Sylvia Allegretto and others, sponsored by the University of California at Berkeley’s Labor Center and the University of Illinois at Urbana-Champaign, and funded by Fast Food Forward, the group that helped organize the summer’s labor strikes. The authors used publicly available data.

The report calls out the fast-food industry for its low wages, citing a median salary of $8.69 an hour and a history of offering part-time work. That might have been fine when those behind the counter were mostly teenagers living at home. These days, though, 68 percent of fast-food workers are single or married adults who aren’t in school—and 26 percent are raising children.

10. Totally The Daily Show with more on Shutstorm 2013