Here's my Top 10 links from around the Internet at 10 am. I welcome your additions in the comments below. We have bumper crop of Dilberts today as they are released daily over the weekend. I'm glad interest.co.nz doesn't have a Human Resources division. 
1. Here's another look under the covers of a failed property developer. Dan McEwan's Waiwera development north of Auckland has imploded under the weight of a BNZ mortgagee sale, the Sunday Star Times reported. 37 small shareholders look like they've lost NZ$2.4 million. 2. The green shoots keep browning off. Japanese exports fell 40.9% in May from a year earlier, deepening the export slump that is driving GDP from the world's second biggest economy sharply lower ,Bloomberg reported.
"Final demand just isn't picking up and it's still hard to expect a very strong economic recovery," said Azusa Kato, an economist at BNP Paribas in Tokyo. Kato said the economy will "barely expand" in 2010 once the effect of Japan's own economic stimulus measures fades.
3. The US banks are doing their best to trade their way out of trouble by overcharging for interest rate hedging, Bloomberg reported.
The U.S. banking industry said it made $9.8 billion during the first quarter trading derivatives and securities as investors started returning to the markets amid signs the recession bottomed.
4. Mish at GlobalEconomic Analysis has an excellent post on the merits (none that he could see) of a 'buy and hold' strategy for the stock market.
Clearly, stay the course is bad advice. So why is it so common? A personal anecdote might help explain things: In January of this year, an investment advisor from Wachovia Securities called me up and stated "Mish, I am sitting on millions because I see nothing I like". I told the person I did not like much either and that Sitka Pacific was heavily in cash and or hedged. His response was "Well, I do not get paid anything if my clients are sitting in cash". I called up a rep at Merrill Lynch and he said the same thing, that reps for Merrill Lynch do not get paid if their clients are sitting in cash. Notice the massive conflict of interest possibilities. Reps for various broker dealers have a vested interest in keeping clients 100% invested 100% of the time, even if they know it is wrong. And so it is every recession, bad advice permeates the airwaves and internet "Stay The Course".
5. Clive Crook at FT.com argues persuasively that Barack Obama is weak and has wasted his political capital by compromising. I agree and said so a while back in this piece on how Obama is a liar and a fool.
The president has cast himself not as a leader of reform, but as a cheerleader for "reform" "“ meaning anything, really, that can plausibly be called reform, however flawed. He has defined success down so far that many kinds of failure now qualify. Without hesitating, he has cast aside principles he emphasised during the campaign. On healthcare, for instance, he opposed an individual insurance mandate. On climate change, he was firm on the need to auction all emissions permits. Congress proposes to do the opposite in both cases and Mr Obama's instant response is: "That will do nicely." The greatest waste of talent in all this, however, is that of Mr Obama himself. Congress offers change without change "“ a green economy built on cheap coal and petrol; a healthcare transformation that asks nobody to pay more taxes or behave any differently "“ because that is what voters want. Is it too much to ask that Mr Obama should tell voters the truth? I think he could do it. He has everything it takes to be a strong president. He is choosing to be a weak one.
6. It seems now that not even the Chinese want to buy the gas-guzzling Hummer off GM, Reuters reported from Chinese State Radio.
The planner, the National Development and Reform Commission (NDRC), is worried that Sichuan Tengzhong Heavy Industrial Machinery, which makes special-use vehicles and highway components, does not have the experience and resources to run the Hummer business, the report said. Besides, Hummer, as an expensive, gas-guzzling sports utility vehicle, would not fit in with the government's policy of encouraging energy-efficient vehicles, the radio said.
7. China is pushing ahead with plans to try to remove the US dollar's status as the global reserve currency. Firstly, China and Brazil are working on arrangements so their exporters and importers can use the Real and Renminbi rather than the US dollar, Reuters repoted. Secondly, China's central bank has again called for the creation of a super-sovereign currency to supplant the US dollar, Reuters reported.
In its annual financial stability report, the central bank did not mention the dollar by name but said it was a serious defect that one currency should tower over all others. "An international monetary system dominated by a single sovereign sovereign currency has intensified the concentration of risk and the spread of the crisis," the People's Bank of China said. In thinly-veiled criticism of loose U.S. monetary and fiscal policies, the PBOC urged the International Monetary Fund to exercise closer supervision of the economic and financial policies of major reserve-issuing countries. The 170-page report dusted off a call by the bank's governor, Zhou Xiaochuan, for the creation of a super-sovereign currency. In an essay in late March, Zhou caused a stir by suggesting that the Special Drawing Right, the IMF's unit of account, could eventually displace the dollar as the principal reserve currency.
8. Nouriel Roubini RGE Monitor also reckons the game is up for the US dollar in the long run.
So the process that will lead - in the medium-long term - to a challenge of the US dollar as the major global reserve currency has started. The US creditors - the BRICs, the Gulf states and others - are becoming increasingly alarmed that the US will deal with its unsustainable fiscal path via inflation and debasement of the value of the dollar via depreciation. So they will not sit idly waiting for this to happen: they are already diversifying into gold, into resources (as China purchases mines and energy, mineral and commodity resources all over the world) and into shorter term maturity US Treasuries that have less market risk than longer term Treasuries. With two-thirds of US Treasuries, being held by non-residents and the average maturity of such government debt down to 4.5 years, the risk of a refinancing crisis and disorderly fall in the dollar will increase over time unless the US presents a credible plan for medium term fiscal consolidation.
9. Turners and Growers are serious about attacking Zespri's monopoly, Denise McNabb reports in BusinessDay (Stuff). 10. Britain's debt to GDP ratio could quadruple to post World War II levels of 200% over the next 40 years unless drastic measures are taken, Standard and Poor's has warned, The Sunday Telegraph reported.
Moritz Kraemer, head of S&P's sovereign ratings in Europe, Middle East and Africa, said Britain was facing a double challenge "“ first, to mend its books in the wake of the financial crisis and then to overhaul its economy drastically to stifle the pensions crisis. He said Britain was facing deficits unlike any before in peacetime history. "We don't think they are willing to look into this fiscal abyss without taking any action," he said. "Following the financial crisis, the proportion of the problem is significantly larger than we thought but the Government has time to react to address these issues." The shortfall may mean having to raise taxes, cutting public pensions or healthcare spending, he added. The agency said that unless Britain and its fellow leading Western nations took action to stem these costs, "the ratings of the high grade sovereigns would be very different."
10. (bonus!) I couldn't resist linking to this one from the often provocative Ambrose Evans Pritchard at The Telegraph. He points out China's banks are vulnerable.
China's banks are veering out of control. The half-reformed economy of the People's Republic cannot absorb the $1,000bn (£600bn) blitz of new lending issued since December. Money is leaking instead into Shanghai's stock casino, or being used to keep bankrupt builders on life support. It is doing very little to help lift the world economy out of slump. Fitch Ratings has been warning for some time that China's lenders are wading into dangerous waters, but its latest report is even grimmer than bears had suspected.
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