Top 10 at 10: G8 says 'worst is over'; Euro bank fears grow; W-shaped recovery?; Gaynor on ING; 2 Dilberts

Here's my Top 10 links from the Internet at 10 am. I welcome your suggestions for which NZ CEO is most like Dogbert. 1. Now the crisis seems to have passed, the world's biggest economies need to look at winding back their fiscal stimulus packages, G8 finance ministers discussed over the weekend, Bloomberg reported. 2. US consumer confidence has hit a 9 month high, FT.com reports.

The monthly rise was fuelled by sharp boost in feelings about current economic conditions, which rose on the 74.5 on the index from 67.7, as job losses have moderated and housing prices have flattened or risen in some regions. "The apocalyptic tone to public discourse on the economy is continuing to abate," said Mike Englund, an economist at Action Economics.

3. However, one cloud on the horizon is the weak state of European banks, who have yet to go through the sort of recapitalisation and stress test process seen in the UK and US. The euro has suffered in the last couple of weeks as the realisation has dawned on global markets, the FT.com reports.

The euro has been laid low by fears over bad loans, with concerns over the exposure of banks in the region to a potential meltdown in the Baltic states and central and eastern Europe weighing on the single currency. Many commentators expect that trend to intensify. Maurice Pomery at Strategic Alpha says the eurozone banking system is in denial over the extent of toxic assets on its balance sheet. "We still don't know the full story," he says. Mr Pomery doubts that German banks have been operating on vastly different business models over the past five years than their peers in the UK, US and Switzerland, which have revealed their high degree of vulnerability to the financial crisis. "I think they have significant exposure," he says. "Central banks are worried about opening Pandora's box and when they do it will impact on the euro." Analysts say the problems in the eurozone's banks are likely to be swept under the carpet ahead of the German general election on September 27.

4. William Pesek from Bloomberg in Tokyo writes about the possibility of W shaped economic recoveries/recessions.

Concerns about a Japan-like "lost decade" in the U.S. and elsewhere are well-known. That specter is becoming less likely as trillions of dollars of stimulus work their way through the economy. Talk of another Great Depression is now giving way to fears of an historic inflation surge. What is becoming more likely, though, is the W-ization of the business cycle. The bear-market-rally argument making the rounds in Asia and the U.S. is preferable to this one. It would merely mean that today's rallies will look a bit overdone in the weeks ahead. The prevalence of W-shaped cycles could be with us for years. That would be terrible for the "green shoots" supporters who claim the worst is over in global markets. Here's how it would look: Each increase in gross domestic product would fizzle as quickly as it began, undermining rallies in equity markets. Not a lost decade, yet not one that investors would enjoy. Such a scenario would reflect steps that policy makers are taking to restore growth.

5. Here's the background to why people are watching the Baltic currency devaluation debate so closely. Western banks are exposed to defaults on foreign currency loans to households and businesses in the Baltics and other recently opened up Eastern European countries, the Economist reports.

Contagion is a risk. If Latvia's peg goes, others in the Baltics and beyond may come under pressure, making it harder for those who have borrowed in hard currencies to avoid default. A Western bank could even abandon a local subsidiary, although Mark Young of Fitch, a credit-rating agency, thinks that is pretty unlikely as it would create wider fears among depositors and counterparties about foreign parents' resolve to stand by their CEE operations. An obvious test-case is the three Swedish banks that dominate lending in the Baltic states. Nordea, SEB and Swedbank own local lenders and, because their loans exceed deposits by a factor of two or more, also extend funding to them.

6. This video of Jim Grant from Grant's Interest Rate Observer on CNBC is required viewing I reckon. He says the US Federal Reserve would shut itself down if it did a review of its equity (not much) and loans (enormous). He has some provocative and I think correct views on US interest rates being too low and that the US Treasury bond yields are too low. He says Citigroup is a rogue bank. 7. The collapse of a deal for China's Chinalco to buy into Rio Tinto now has the Australians worried they have killed their golden goose of China's heavy buying of its commodities. The team at businessspectator have done a package on the issue. They conclude that China is grumpy but will get over it... 8. Brian Gaynor at the NZHerald writes comprehensively about the ING funds debacle and concludes the current deal on offer is a no-brainer. But he doesn't hold back on criticising ING, ANZ and the Securities Commission.

ING's cash offer doesn't solve the central problem, which is the woeful state of our prospectus and investment statement regime. Investment statements, which are the predominant offer document, are little more than advertising brochures containing ridiculous statements and photographs of smiling individuals. For example the RIF offer document highlighted the following inane statement; "Imagine not having to dream about the things you want in life - imagine doing them." Isn't it about time that Jane Diplock and the Securities Commission rose from their slumber and started insisting that offer documents contain a clear description of the securities on offer and an assessment of the risks involved? Until this issue is addressed we will continue to have investment products where investors lose their savings, mainly because the offer documents do not accurately reflect the true underlying nature of the proposed investment.

9. The excellent Planet Money on NPR has a piece on foreign purchases of US Treasuries. The conclusion is foreign central banks are still buying despite all the noise. 10. The housing rebound in the United States is no sure thing. Dr Housing Bubble points out a wave of defaults and foreclosures is about to crash on the Californian housing market. HT Tyler Durden at Zero Hedge.