Top 10 at 10: US's AAA rating vulnerable; Global wheat crop threat; Dilbert

Here's my Top 10 links from around the Internet at 10 am. I welcome your additions in the comments below. I'm glad I haven't been kidnapped. 1. A top technical analyst, Robert Prechter, has predicted the United States will lose its AAA credit rating, Reuters reported.

Prechter, known for predicting the 1987 stock market crash, joins a growing coterie of market heavyweights in forecasting the United States will lose its top credit rating as the government issues trillions of dollars in debt to fund efforts to bail out the economy.

2. Nobel Prize winning economist and anti-Bushite Joseph Stiglitz, who we interviewed last year over the cost of the Iraq war, says in this Vanity Fair piece that developing countries may turn their back on the free market globalism preached by the United States because the land of the free doesn't practice what it preaches. The cartoon here to go with it sums it up with a certain pungency. 3. Former IMF chief economist Simon Johnson at The Baseline Scenario, who wrote the seminal piece The Quiet Coup in The Atlantic Monthly, has a succinct 5 point summary on where the global economy is now. 4. Merrill Lynch is wondering if there has been too much money printing, FTAlphaville points out. Well d'uh. 5. Ambrose Evans Pritchard in The Daily Telegraph argues persuasively that Latvia is being crucified by the Eurozone to save European banks from having to recognise losses on over US$1.6 trillion of loans to Eastern Europe.

6. Here's something out of left field. The Los Angeles Times reports that the spread of stem rust, a fungus that kills wheat, is spreading out of Africa and could wipe out 80% of the world's wheat crop. If we haven't had enough trouble lately...sheesh. HT aah... OptionARMageddon 7. The Economist has an excellent article on 'The biggest bill in history', which gives the gory detail of the fiscal cost of the bailouts combined with the looming bill from the retirement of the baby-boomers.

Not since the second world war have so many governments borrowed so much so quickly or, collectively, been so heavily in hock. And today's debt surge, unlike the wartime one, will not be temporary. Even after the recession ends few rich countries will be running budgets tight enough to stop their debt from rising further. Worse, today's borrowing binge is taking place just before a slow-motion budget-bust caused by the pension and health-care costs of a greying population. By 2050 a third of the rich world's population will be over 60. The demographic bill is likely to be ten times bigger than the fiscal cost of the financial crisis. One priority is to raise the retirement age, which would boost tax revenues (as people work longer) and cut future pension costs. Many rich countries are already doing this, but they need to go further and faster. Another huge target is health care. America has the most wasteful system on the planet. Its fiscal future would be transformed if Congress passed reforms that emphasised control of costs as much as the expansion of coverage that Barack Obama rightly wants. All this is a tall order. Politicians have failed to control the costs of ageing populations for years. Paradoxically, the financial bust, by adding so much debt, may boost the chances of a breakthrough. If not, another financial catastrophe looms.

8. Let's hope this movie takes the bailout scandal into the public mainstream. Here's the trailer from Michael Moore for "This time it's personal" 9. 'We had to destroy the village to save it.' The Daily Telegraph (of all publications) reports on the plans growing in America to literally raze to the ground those empty neighbourhoods full of derelict houses in the industrial mid-West. They would be replanted as farm land. 10. US debt is still expanding as a ratio to GDP. The de-leveraging has yet to occur, Rolfe Winkler at OptionARMageddon points out. 10. (Bonus!) Barry Ritholz at The Big Picture points to an interesting Mea Culpa from celebrity economist Andy Xie at Morgan Stanley. Ain't this the truth.

While rational expectation is returning to part of the investment community, most are still trapped in institutional weaknesses that make them behave irrationally. The Greenspan era has nurtured a vast financial sector. All the people in the business world need something to do. Since they invest with other people's money, they are biased towards bullish sentiment. Otherwise, if they say it's all bad, their investors will take back the money, and they will lose their jobs. Governments know that and create noises to give them excuses to be bullish." This institutional weakness has been a catastrophe for people who trust investment professionals. In the past two decades, equity investors have done worse than owning bonds in the U. S. market, lost big in Japan and emerging markets in general. It is astonishing to see how a value-destroying industry has lasted for so long. The bigger irony is that the people in this industry have been 2-3 times as well paid as in other industries. The key to its survival is volatility. As markets collapse and surge, it creates the possibilities for getting rich quickly. Unfortunately, most people don't get out when markets are high like now. They only go through the ride.