Top 10 at 10:Chinese stop stockpiling metals; IEA cuts oil demand forecasts; Should we trust ratings agencies?; European banks hyper-leveraged; Dilbert

Here's my top 10 links from around the Internet at 10 am. I welcome your additions in the comments below and please send any suggestions for tomorrow's Top 10 to bernard.hickey@interest.co.nz  Our beta tests will not cause our readers physical harm. 1. This one slipped under the radar. The International Energy Agency has downgraded its forecasts for global oil demand and is now not so worried about an energy supply crunch, FT.com reported.

The consuming countries' oil watchdog said it expected global demand to grow at an average annual rate of just 0.6 per cent or 540,000 barrels a day from 2008-14, raising consumption from 85.8m b/d to 89m b/d. This latest forecast is 3.3m b/d lower than the previous forecast for 2013 volumes. If the agency's most pessimistic economic scenario proves correct, oil demand could contract, with consumption falling to 84.9m b/d by 2014, it said in a report. The slowdown in demand growth means the crucial cushion of spare supply theOpec oil producers' cartel holds is now expected to reach 7.78m b/d next year, or 8 per cent of global demand. Last year, the IEA expected surging energy usage to reduce that supply cushion to 1.67m b/d.

2. Here's another story from below the radar which signals the Chinese may not be quite as keen to keep buying Australian minerals at high prices forever, which of course is a cautionary tale for us. We need Australia to remain the lucky country the digs big holes in its ground. John Garnault in Beijing for the Sydney Morning Herald has the scoop.

A RECORD-BREAKING run of commodities exports to China that has sustained the Australian economy may be set to end, with Beijing officials and advisers announcing an end to "strategic" stockpiling, and massive iron ore contracts likely to expire today. A key state planning official has signalled a halt to government buying of copper, aluminium and other high-value metals because prices have risen too high. "We don't anticipate that the country will continue to build its reserves," said Yu Dongming, the head of the metallurgical department of the National Development and Reform Commission. China's resource buying spree helped Australia be the only significant economy to record overall export growth since the global financial crisis began.

3. John Authers at FT.com argues the Chinese have no choice but to keep buying US Treasury bonds and the evidence shows they're still gulping down all the paper being issued by the Americans.

What has China actually done? Federal Reserve figures show that over the past three months, the Treasury debt it holds on behalf of foreign official accounts has risen by $174bn. As Capital Economics suggests, this implies that China has bought more bonds. China let its currency gain about 20 per cent against the dollar over a period of three years starting in mid-2005. This addressed the imbalances. But since last July, when Chinese exporters were in severe distress, the renminbi has been pegged tightly against the dollar. Given the dollar's extreme gyrations against other currencies in that time, this can only have been done with an active Chinese decision to tie itself to the dollar. Market expectations can be gauged from the currency forwards market. Late last year, they forecast that the renminbi would fall once more over the next 12 months. But with hopes high for a China-led recovery, they now imply that the peg against the dollar will stay in force for another year. That seems right. China has every interest in a long-term debate over making the dollar less central to the world's financial system. But while it sits on huge piles of dollars, it cannot push the dollar down.

4. Two academics on the excellent VoxEu site have done some research on how well the ratings agencies predicted problems before the Great Depression when they weren't so directly tied into the regulatory system for bond issuance. It's all very topical given our own Reserve Bank has just decided to use ratings from such agencies as an official tool in its regulation of non banks such as finance companies. The research theorised that the agencies were better before they were handed an official license to print money in 1931, when US authorities started using the ratings in their regulation, thus forcing banks to use them.

However, our study of performance, which for simplicity we limited to sovereign debt issued in New York, fails to find any evidence of superior forecasting capacities by the agencies. While we have some results suggesting that brand concerns played a role (for instance, Standard Statistics, a new market entrant, tended to be more conservative than competitors), we do not find any clear evidence of a superiority of rating agencies over "alternative" market forecasts such as bond prices. Our investigation revealed that what caused the emergence of rating agencies as a pillar of regulation was the perceived conflict of interest that investment banks and commercial banks involved in origination suffered at the time. It was perceived that bankers were "banksters" and had been unable to resist conflicts of interest between their role as originators and their role as gatekeepers of liquidity. As a result, the public suspected that the prices at which securities had been issued were likely to have been manipulated. Certification and regulatory intervention had to rest on some assessment of "value" that would be as far away from the origination process as conceivable. Rating agencies provided just this. The rest of the story is well known. In doing this, regulators dragged the agencies closer to the core of the origination of new securities, which eventually proved damaging for their reputation. While some will emphasise the irony of now blaming the agencies for the very sins that caused their emergence in the first place, we suggest that there must be deep reasons for history to go in circles. And whatever they are, the lesson must be that there is no long-run, simple, and sustainable regulatory fix for our current troubles.

This raises the question I have never really had answered. Why should investors trust a rating that has been paid for by the issuer? Surely that's a massive conflict. Here's an idea out of left field. Why doesn't the Reserve Bank pay for the ratings for non banks and banks rather than the issuers themselves? It's true that investors should do it, but there aren't any easy mechanisms for doing this with lots of small investors. 5. A couple of economists from the Bank of Italy have written a detailed piece at VoxEU about the influence of the bonus culture on leverage of banks. The charts below are not pretty and show how leveraged the US investment banks and Continental European banks are. The extended lines are to the maximum leverage levels.The Swiss and continental European banks are leveraged to almost 60 times equity. That is astonishing and frightening.

New financial accelerator-type mechanisms are at work in the current crisis, and the general increase of leverage over the past years amplified their effect. The excessive focus on short-term performance characterising managers' compensation schemes increased appetite for risk in the financial sector and contributed to the increase in leverage. These two pieces of evidence point to the relevance of policy proposals aimed at tackling the effects of excessive leverage and risk-taking on financial sector pro-cyclicality.

6. This is a well produced video about Hyperinflation with the usual suspects. I'm not sure I believe it, but it's entertaining in a Michael Moore sort of way. 7. Here's a video about Zombie banks that captures the mood.

8. It's a bit of a video special today. This is a cracker from Rory Bremner on Gordon Brown. Gordon is dreaming a dream in a Susan Boyle sort of way. 9. This piece from FTAlphaville point out the other nasty pieces of Eastern Europe that could bite the Western European banks on the bum in a big way.

As the economic problems unfolding in Greece and Italy contaminate the nations of the Western Balkans, these will be magnified by the trade linkages that exist within the region. These will in turn work back negatively into Greece and Italy due to their funding of the region.Southern Europe is quite literally at risk of economic seizure.

10. I missed this yesterday, but it should be noted that the mother country's (UK) GDP posted its biggest fall ever in the year to March of 4.9% and its biggest quarterly fall since 1958 of 2.4%, FTAlphaville reported.