Top 10 at 10: Carbon trading delay?; Weimar-style inflation?; Citi hikes salaries; Dilbert; TheOnion

Here's my Top 10 Internet links at 10am. I welcome your additions in the comments below. I'm glad I'm not having a tax audit. 1. The US Federal Reserve held its key rate at 0-0.25% overnight and said the pace of the economic decline was slowing. It reiterated it would keep the rate at "exceptionally low levels for an extended period" and it still planned to keep buying back bonds and printing money. Here is the Fed Statement. 2. Brian Fallow at the NZHerald has a nice summary and update on where New Zealand is with a carbon emissions trading scheme and were we fit into the various schemes being formed (or not) around the globe. He concludes we should probably push ahead with some sort of emissions trading scheme here rather than waiting to see where the chips fall overseas. He suggests we wouldn't have any power at the post 2012 negotiating table if we did nothing. But would we have any power anyway? 3. The IRD has NZ$4 billion worth of tax debt on its books from 202,000 cases, the NZ Herald points out. Yikes. And we thought our banks had a problem with dairy debt. 4. Roeland van den Bergh at the DomPost (via Stuff) has an interesting piece on how one in five mortgage borrowers can't move bank because they are too indebted to pass the test at a new bank. 5. Former Brook Asset Management Executive Chairman Simon Botherway has some strong words on the prospects for inflation in a comment piece in BusinessDay (via Stuff). His argument is that competitive devaluations by central banks elsewhere may force the NZ, Australian and Canadian central banks into money-printing devaluations to push their currencies lower. He even uses the dreaded Weimar word

The sovereign nations, institutional investors and hedge funds (remember them?) who have been in the vanguard of this migration, are already seeking refuge in assets whose integrity and value is upheld by a central bank they can trust.  Over the past three months or so, since the announcement of money printing in the US, Europe and the UK, bond holders in those countries have been punished whereas  the commodity currency investors have been richly rewarded. In fact, the rate of appreciation of the commodity currencies has been amongst the fastest on record. But in their eager rush for the shelter of the commodity currencies, investors are too readily dismissing the angst being articulated, regularly and unambiguously, by the monetary authorities in the commodity countries. The RBNZ, RBA and Canadian central bank have all expressed dismay at the strength of their respective currencies and the implicit monetary policy tightening threat that such appreciation poses to their own sluggish economies.

6. Tyler Durden at ZeroHedge points to a Rolling Stone article by Matt Taibi which says Goldman Sachs "has engineered every major market manipulation since the Great Depression - and they're about to do it again." And here's Felix Salmon's take on the article too. It's a must read for anyone with anything to do with Goldman Sachs, which should be everyone involved in financial markets. Here's this opening salvo, which does indicate a point of view... Polemic can be fun and useful.

The world's most powerful investment bank is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money.

7. Rolfe Winker (once OptionARMageddon and now at Reuters) points out Citigroup is raising (!) base salaries.

Ugh.  The fact that any Citi employees are getting raises is beyond obnoxious since, by definition, every dollar they earn comes directly or indirectly via taxpayers. Particularly irksome is that these raises are going to supposedly "high-value" employees"”traders and bankers"”the guys who broke Citi's balance sheet in the first place. That government-backed banks are allowed to operate hedge funds remains beyond comprehension.  Now Citi is jacking up pay so their traders don't jump ship.  One great way to manage risk at Citi, and to wind down taxpayer support, would be to let the bank's prop desk die by attrition, which may happen if Obama can keep pay in check.

8. Now French house prices are collapsing too, FTAlphaville points out. Brilliant. I've always wanted a house in the south of France... 9. Matt Nolan at TVHE wonders whether Westpac's economists admitted collusion in their detailed defence of bank margins. The response from Michael Gordon at Westpac makes for some interesting reading.

At the end Westpac says that it, and other banks, have been pricing at average cost instead of marginal cost "“ so they have been pricing based on the cost of credit to them, not the cost of sourcing additional credit to make loans. Now, according to Westpac the average cost is higher than the marginal cost, and all banks have seemingly agreed to do this even though since the marginal cost of credit is below the current "price" an individual bank could "defect" and make some money. Is it me, or has Westpac blatantly admitted to collusion here? Westpac has said that it, and other banks, have implicitly agreed to set interest rates at a higher level than marginal cost "“ which I presume must be closer to the collusive price than marginal cost as otherwise it wouldn't stick. Now I didn't think the banks were colluding, but if Westpac is willing to go ahead and admit it then "¦

10. Barry Ritholz at The Big Picture has some great charts on stock market capitalisation to GDP ratios going back to the 1920s. It seems to show the market is still over valued. 10 (bonus). William Pesek at Bloomberg reports on the problems entrepreneurs in Asia are having getting money out of 'bankers who are swine'. HT Ross. Here's TheOnion on Barack Obama having a performance review with every single American worker. I love the comment about google docs. Obama To Hold Job Performance Review With Every American Worker