Top 10 at 10: Reassurance on dairy debts?; Stocks slide; Mish on deflation; Roubini's W shaped recession; Dilbert

Here's my Top 10 links from around the Internet at 10 am. I welcome your additions in the comments below. I plan not to fail. 1. The S&P 500 fell 3.1% overnight after the World Bank forecast the global economy would contract 2.9% this year, which was more than its 1.7% forecast previously, the WSJ.com reported. Is this the beginning of the great retracement? 2. The banks have reassured the government that they can handle any problems with high debt levels in the dairy industry, the NZHerald reported.

Carter yesterday acknowledged that the pressures that prompted that meeting had intensified since then, "particularly around cash flow in light of the reduced payout Fonterra has announced". "However the banks were telling me there's a high degree of resilience and farmers are now in the process of looking at their cost structures and very actively managing those." Carter said the message from the banks was consistent with what he was hearing from farmers and others in the sector, "and it wouldn't be consistent with some of the more extreme comments that have been in the media recently".

3. Here's some of the recent comments on our website from readers about what they've seen in the dairy sector. Not sure if they are extreme. There are certainly a lot of them. We have 80 comments on the post at this time of writing. 4. Meanwhile in America, dairy farmers are slaughtering their herds to cope, Jeff Wilson reports in the NZ Herald.

Farmers are culling herds because exports plunged 26 per cent in the first four months of the year, supplies rose and the cost of corn, the primary feed ingredient, averaged almost US$4 a bushel. "No one is making money producing milk," Wells Fargo's Swanson said by telephone from Minneapolis. "The milk price remains well below the total cost of production."

5. Just when we thought the biggest mining takeover battle was over (Rio Tinto v BHP), Anglo American has rejected the US$69 billion merger deal presented by Xstrata, WSJ.com reported. 6. The world's biggest university endowment fund (Harvard) has let its bond fund manager go after it lost 30% of its value and Harvard had to quickly sell assets to avoid a cash crunch,  WSJ.com reported. 7. This is a couple of days old, but worth linking to still. Mish at GlobalEconomicAnalysis points to some Federal Reserve figures showing the size of the hole blown in the US financial system and why this points to deflation rather than inflation.

Think consumers are about to go on a spending spree after a massive US$13.87 trillion collapse in net worth? Think banks are going to start lending with this employment picture and household debt? I don't and boomer demographics makes the situation even worse. Don't forget the bleak employment picture. There is no source of jobs. Those who get hyperinflation out of this picture must be reading the playbook in Bizarro World because it sure is not the playbook here.

8. There's an interesting discussion over at Calculated Risk about the Wealth Effect (on spending) from the collapse in US house prices.  Rodney Dickens sees a very clear correlation in New Zealand over at this excellent piece on our site. 9. Nouriel Roubini thinks the risks of a W shaped recession are growing in this Op-Ed in the Taipei Times.

First, confidence and risk aversion are fickle, and bouts of renewed volatility may occur if macroeconomic and financial data were to surprise on the downside "” as they may if a near-term and robust global recovery (which many people expect) does not materialize. Second, extremely loose monetary policies (zero interest rates, quantitative easing, new credit facilities, emissions of government bonds and purchases of illiquid and risky private assets), together with the huge sums spent to stabilize the financial system, may be causing a new liquidity-driven asset bubble in financial and commodity markets. For example, Chinese state-owned enterprises that gained access to huge amounts of easy money and credit are buying equities and stockpiling commodities well beyond their productive needs.

10. For those with decent broadband connections here is The Onion's story on the US trading its gold reserves for cash. Ah...it's not true...