Top 10 at 10: English grumpy with banks; Dow down 2.5%; KBC troubles; 'Little Sweetie's feng-shui lover

Here's my Top 10 links at 10 am. I welcome your additions and comments in the comments below. 1. Finance Minister Bill English said on Wednesday he wanted to see the Australian owned banks in New Zealand produce lower profits and give customers a fair go. Labour Finance Spokesman David Cunliffe also attacked the banks for not passing on the April 30 rate cut, calling on them to be responsible, according to Colin Espiner in the The Press. 2. Commonwealth Bank of Australia, which owns ASB here, has announced plans to cut its final dividend by 25% because it "considered it prudent to preserve capital...given the continued uncertainty for the global and domestic economy," CBA said in a release to the ASX. 3. US foreclosure notices jumped 32% in April from a year ago to over 340,000 households, with Nevada, Florida and California hit the hardest, AP reports. So much for green shoots. US retail sales fell for a second month in a row in April and were worse than expected in another sign that the US consumer is far from in recovery mode, the WSJ.com reported. This all pushed the Dow more than 2.5% lower in late trade overnight, Bloomberg reported. 4. China's industrial production growth slowed in April to 7.3% from a year ago from 8.3% in March vs a year ago, FT.com reports. The most interesting snippet is that industrial output is somehow growing at the same time that electricity production is falling. It doesn't seem to compute and economists think much of the growth was being driven by government purchases from factories. 5. Toxic CDOs look like they're about to hammer another European bank. Dutch bank KBC is rumoured to be about to announce a further 1 billion euros of losses. Its shares are halted, FTAlphaville points out with a very raised eyebrow. 6. Here's an Eastern European Iceland in the making. Latvia looks likely to default as its GDP is forecast to fall 13.1% this year, AFP reports.

"Latvia's economy faces a downturn which is comparable in terms of severity only with the recession experienced after the fall of the central planning system following the dissolution of the Soviet Union in 1991," IHS Global Insight analysts said in a note, warning that the economy could continue to slide even as the world begins to pick up in 2010. Latvia has two options if it is to boost its competitive position -- to devalue its overvalued currency, the lat, or to cut wages, Shearing told AFP. Devaluing the lat would mean removing its peg to the euro, a major political blow. This so far has not been part of talks with the IMF. The government therefore has no other option but to lower wages to raise competitiveness.

7. Here's a compelling view from an informed and independent analyst about the state of the US banking system, which is at the heart of the global economic slowdown and the Credit Crunch. Christopher Whalen watches the banks like a hawk and is particularly sceptical. He has been more right than just about anyone so far. This is a must read for anyone really interested in the US banking system's health.

Based on the institutions for which data has been released by the FDIC, it is pretty clear in our latest stress test that the condition of the US banking industry is continuing to deteriorate and that we are still several quarters away from the peak in realized losses for most banks. The key telltale in the Q1 FDIC data is that ROE degradation, not charge-offs, still leads the rising stress evidenced by the IRA Banking Stress Index. Remember that provisions are a leading indicator, while charge-offs lag the credit cycle. Once you see ROE performance improving, meaning a decline in the need to build loss reserves to buffer future losses, and charge-offs are the leading factor in our index, then you'll be able to test the thesis that the worst is over for US banks and valuations are beginning to stabilize. So based on what we see now, is it time to be being financials? One IRA reader in SF named Jonathan asks: "This market for financial stocks must have some of your clients scratching their heads. What do you make of things? Is this irrational exuberance or have we turned?" We'll be addressing the Q1, post stress test valuations for the largest banks as the rest of the units in the bank universe fill in their FDIC CALL reports. No, in our opinion we have not turned the corner in financials. The current FDIC data suggests that bank loss rates may not peak until next year. We are not yet even on the right block to make the turn, in our view. Suffice to say that the composition of the Q1 loss data we see from the FDIC makes us believe that the peak in terms of losses for the US banking industry will be closer to Q4 2009 than our original target of Q2 2009. Given where large bank loss rates were in Q1 2009, just imagine where we'll be by Q4. Or put another way, now you know why regulators are pushing BAC and WFC to raise additional capital.

8. Not even the prisons in America can make money, which is saying something in a nation that imprisons more than most. A privately run prison in Montana is in default on its debt and is empty. The prison's owners are so desperate they are offering to house the prisoners being kicked out of Guantanamo, the always excellent Felix Salmon points out here. 9. Here is a great tale of money, greed and sex involving a Feng Shui master called Mr Chan and his lover, a billionaire named Ms Wang who was also called "Little Sweetie" and wore mini-skirts. These are the best tales. It's all in the Wall St Journal. Here's a small taste. The story is worth reading, if only to lighten your day and convince you that having lots of money is a bad thing.

Mr. Chan's lawyer, Jonathan Midgley, has produced photos showing Mr. Chan cavorting with Ms. Wang. Mr. Chan frequently joined Ms. Wang for "midnight meetings," Mr. Midgley says. "This was a long-lasting, close and affectionate relationship," Mr. Midgley said in an interview. Ms. Wang's longtime personal assistant, Ringo Wong (who helps administer her charity) says Ms. Wang loved only her late husband, Teddy. He recently helped stage an 80-minute puppet show depicting the Wangs' "eternal love." The play's 10-day run, in an auditorium just steps from Hong Kong's harbor, ended Saturday. "Oh, I will never stop loving you, Teddy," a wobbly, string-operated Ms. Wang cooed in one early scene, set in 1950s Shanghai.

10. Here's an optimistic video from economist Alex Tabarrok about the global economy. HT Tweeter @HansvanHutten