Top 10 at 10: Rod Oram attacks the banks; Franchising 'Wild West'; Allan Hubbard lobbies PM; Dilberts

Here's my Top 10 links from around the Internet at 10 am. I welcome your additions in the comments below. Some bonus Dilberts from over the weekend below. I'm glad I'm not going to India for a funeral and I'm glad I'm not overpaid. 1. Almost a third of New Zealanders have little idea about financial matters, a survey by the Retirement Commission has found, Stuff reported. 2. South Canterbury Finance's Allan Hubbard is lobbying the government to extend the guarantee beyond October 2010 as Standard and Poor's runs its ruler over the finance company, the Sunday Star Times reported.

The lobbying by Hubbard, along with SCF chief executive Lachie McLeod and chief financial officer Graeme Brown, came as the trio hosted a bevy of officials from ratings agency Standard & Poor's and Treasury who were poring over the company's books last week. Hubbard has also had a weekend meeting with Prime Minister John Key. According to Key's office, the two met in SCF's home base of Timaru on May 9, for what was described as wide-ranging discussions relating to the finance industry.

3. Rod Oram comments in the Sunday Star Times that it's time for customers to revolt against the four major banks and go to Kiwibank.

This is an issue of economics, not envy. The banks' strong profits in good and bad times take money away from customers who would use it more productively. The banks offer plenty of excuses why their lending rates are staying high even though the Reserve Bank has slashed the Official Cash Rate. But none hold water. All are self-serving.

I don't agree with Rod's comment, which does not include any sourcing for his claim that bank profits are too high. His claim that Kiwibank is the way to go should also be questioned. Kiwibank has not cut its rates either in the last couple of months. 4. Franchise experts are warning the industry needs some form of regulation, the Sunday Star Times reported.

Auckland University Business School law lecturer Gehan Gunasekara says Appeal and Supreme Court decisions on the fallout from a failed franchise relationship involving an Australian home cleaning service "make a mockery" of government claims that the franchise industry does not need its own laws. Commerce Minister Simon Power released a paper this month saying existing legislation such as the Fair Trading Act provided adequate protection for franchisees. But Gunasekara says the outcome of the case involving James' Home Services would be "the last straw" for franchisees who believed they could rely on that act to ensure they get a fair deal. On Thursday, Power will front up to a university-organised symposium to defend his decision that New Zealand's largely self-regulated franchise sector doesn't need its own laws. But Gunasekara believes the sector is a "wild west", and says his research has revealed that while franchise businesses account for 10-12% of economic activity, franchisees represent around 30% of all claims brought under the Fair Trading Act for misleading conduct in relation to the sale of a business.

5. Here's the Too Big To Fail banks left in Europe from Ed Harrison at Credit Writedowns. 6. More green shoots? The IMF is likely to revise its 2010 global growth forecast up, Reuters reported. 7. This is a big deal and says a lot about how companies want to band together to fight/supply the Chinese. Anglo American and Xstrata are in talks to merge to create a coal and iron ore giant, FT.com reported. 8. Wolfgang Munchau at FT.com points out Germany has just put a balanced budget clause into its constitution, which is very popular. I wish we had one. He reckons it could lead two ways.

Either of those scenarios, even the positive one, is going to be hugely damaging to the eurozone. In the first case, the German economy would become a structural basket case, and would drag down the rest of Europe for a generation. In the second case, economic and political tensions inside the eurozone are going to become unbearable. While the balanced budget law is economically illiterate, it is also universally popular. Average Germans do not primarily regard debt in terms of its economic meaning, but as a moral issue. Der Spiegel, the German news magazine, had an intriguing report last week on the country's young generation. One of the protagonists in its story was a young woman who had borrowed a little money to set up her own company. The company turned out to be a success, and she had began to repay the loan. And yet she said she had not felt proud of having taken on debt. This general level of debt-aversion is bizarre. Many ordinary Germans regard debt as morally objectionable, even if it is put to proper use. They see the financial crisis primarily as a moral crisis of Anglo-Saxon capitalism. The balanced budget constitutional law is therefore not about economics. It is a moral crusade, and it is the last thing, Germany, the eurozone and the world need right now.

9. IMF Chief Economist Olivier Blanchard points out at FT.com a key structural imbalance in the global economy has still not been solved. Chinese consumers must spend more and US consumers must save more. He paints a grim picture if this does not happen.

What if there is no rebalancing? Without sustained domestic demand and higher net exports, the US recovery may weaken once the fiscal stimulus is phased out. In normal times, monetary policy could help, by lowering interest rates and increasing demand; these are not normal times and rates can fall no further. Thus, there will be heavy pressure on the US government to maintain a strong fiscal stimulus for as long as private demand is weak, and this may lead to larger and longer deficits than would be wise. While strong fiscal stimulus was and still is needed to fight the crisis, it cannot go on forever; at some stage, debt dynamics become unsustainable, markets react and fiscal deficits become counterproductive. Neither a weak US recovery nor unsustainable US debt dynamics are likely to be good for the world. The first probably means a stalled world recovery; the second probably means mayhem in financial markets.

10. Here's an alternative point of view from Alan Blinder in the New York Times on the issue of money printing and inflation. He thinks deflation is the real worry and those worried about inflation are just wrong. Blinder says bond yields are returning to more normal levels, rather than indicating inflation problems. HT Peter Moore.

The central bank is holding the Fed funds rate at nearly zero and has created a mountain of bank reserves to fight the financial crisis. Yes, these moves are unusual, but these are unusual times. Concluding that the Fed is leading us into inflation assumes a degree of incompetence that I simply don't buy.