Top 10 at 10: Dear John Key: We can't afford it; A prudent bear; A black swan; Dilbert

Here are my Top 10 links from around the Internet at 10 to 4 pm. We want to be thorough… I welcome your additions and comments below or please send suggestion for Wednesday’s Top 10 at 10 to bernard.hickey@interest.co.nz 1. 'We can't afford it' - Fran O'Sullivan has written a good column in the NZHerald giving some free advice to John Key. He needs to use the Greek debt crisis as an opportunity to sell some tough changes to the budget. Fat chance, but Fran is still right.

Specifically, New Zealand can't afford to continue to stump up for interest-free student loans for a bunch of young Kiwis many of whom will pay very little tax here over their careers, or pay Working for Families subsidies to reasonably well-off middle-class people. Nor can the Government continue to underwrite the cost of middle-class tax avoidance by allowing them to continue to plumb the major difference that opened up between the trust tax rate of 33c in the dollar and the top personal rate of 38c in the dollar - which did not exist before Labour drove up the top personal rate in 1999. Nor can the Government continue to underwrite national superannuation payments on a universal basis from the age of 65 years on the shallow proviso that the beneficiaries are New Zealand citizens or permanent residents and have lived here a total of 10 years since turning 20, with five of those years having been spent here after reaching 50. This is a recipe for national bankruptcy.

2. It's not just me - I don't think the Eurozone shock and awe package solves anything. Swiss banking behemoth UBS also reckons other things need to change. Here's the link to their full report, where they say something similar. HT David Carroll via email.

The facility will calm creditor concerns about debt management issues for a while, but won’t solve the underlying problem. This is going to require debt restructuring, a hardening of fiscal consolidation resolve, and measures to encourage both sovereign debtors and creditors to pursue structural reforms that will enhance growth, and change their societies.

So far, the problem has been confined to a handful of Eurozone countries. But it is a structural crisis for all large debtor nations in the industrialised world, including the UK and the US, and eventually, Japan. And it is an existential crisis for the Euro-system, in which EU leaders will have to demonstrate whether the political glue that created it and kept it together can stick. With the new financing mechanisms, EU leaders now seem to have recognised partially the systemic nature of the debt crisis, but financing and bail-outs alone never solved a debt crisis. The EU is going to have to make another ‘big push’ towards political union and to establish new treaty-changing institutions to build enduring confidence among private creditors.

The facility will calm creditor concerns about debt management issues for a while, but won’t solve the underlying problem. This is going torequire debt restructuring, a hardening of fiscal consolidation resolve, andmeasures to encourage both sovereign debtors and creditors to pursue structural reforms that will enhance growth, and change their societies. So far, the problem has been confined to a handful of Eurozone countries. But itis a structural crisis for all large debtor nations in the industrialised world,including the UK and the US, and eventually, Japan. And it is an existentialcrisis for the Euro-system, in which EU leaders will have to demonstrate whether the political glue that created it and kept it together can stick. With the new financing mechanisms, EU leaders now seem to have recognised partially the systemic nature of the debt crisis, but financing and bail-outs alone never solved a debt crisis. The EU is going to have to make another ‘big push’ towards political union and to establish new treaty-changing institutions to build enduring confidence among private creditors.

3. Watch out in 2012 - China expert and former Morgan Stanley strategist Andy Xie writes at Caixin Online that he is worried about a global economic downturn in 2012 as the government stimuli are forced to end. HT Colin

Major economies such as the United States and Britain are running fiscal budget deficits exceeding 10 percent GDP. Deficits in Europe and Japan are half that amount. Interest rates around the world are close to zero. When viewed in this context, 4 percent global growth is not impressive. Actually, we should be asking why the global economy isn't growing faster. I think the current recovery is merely based on government stimulus and low-base effect. And given the amount of stimulus spending, this is not a strong recovery. More importantly, structural problems exposed by the financial crisis were merely covered up, not resolved, by stimulus spending. This is why the recovery is not sustainable. Since stimulus will eventually lead to inflation, interest rates will have to be raised. That will lead to another dip in the global economy. I expect this second dip in 2012, which means we are en route to a W-shaped economic phenomenon, not a V-shaped recovery.

4. A prudent bear - Martin Hutchinson at Prudent Bear has a excellent piece on the Greek package and concludes the fiscal conservatism similar to that adopted by the first post-War Chancellor Konrad Adenauer will become the norm.

The banking crisis exposed the failings of Thatcherism, at least when combined with an uncontrollably sloppy monetary policy. The Greek crisis has exposed the costs of Papandreouism and its long-term economic unsustainability – even for Spain let alone Germany, there are no sugar daddies large enough to allow it to continue. The Adenauer model of conservative capitalism is thus the only one left standing, and is likely to become more widespread as its advantages are realized. Within the EU, it will prevent excessive borrowing, impose strict budgetary control and focus European economies on growing their non-financial sectors. Countries that wish to enjoy Scandinavian levels of public healthcare and social safety nets will find themselves groaning under draconian tax levels that stifle their economies; hence the smaller state will become an essential for survival. Globally, the Adenauer model is also likely to find favor; it will for example appeal to the high saving, long-term oriented societies of East Asia. The Anglosphere will then have the choice of adopting it or becoming an economic backwater, left behind in a morass of past-due loans by the engineering dynamos of the Adenauerist countries.

5. Germany in shock - Ambrose Evans Pritchard at The Telegraph observes that the Germans are essentially in shock over what the European Central Bank (which was supposed to have been the heir to the very respected Bundesbank) has just done. This is no done deal when the main funder of the package simply doesn't really want it. The two German members of the ECB voted against it.

Axel Weber, ultra-hawkish head of the Bundesbank, told Boersen-Zeitung that the emergency move over the weekend had been a mistake. "The purchase of government bonds poses significant stability risks and that's why I'm critical of this part of the ECB's council's decision, even in this extraordinary situation," he said. "Germans are watching this in horror," said Hans Redecker, currency chief at BNP Paribas. "If this ends up in full-blown quantitative easing, people are going to be up in arms." As recently as last Thursday Mr Trichet said the governing council had not even discussed buying bonds. Julian Callow, of Barclays Capital, described the volte-face as incredible. "The ECB has ripped up its exit strategy. They have always prided themselves on transparency and consistency, and now they have done this abrupt U-turn." Fresh EU data shows that total debt is 224pc of GDP in Greece, 272pc in Spain, 309pc in Ireland, and 331pc in Portugal, each with a heavy reliance on external finance that can dry up at any moment. They are all being forced to impose austerity measures, risking a slide into deeper slump and a potential debt-deflation trap.

6. Black Swan thinking - Nassim Taleb, the author of The Black Swan and one of those who warned of disaster, talks in detail about his Black Swan theories. Well worth watching. He points out that Too Big to Fail banks and interdependent markets are terminally dangerous, as is too much debt. He is interviewed by the now UK PM David Cameron. 7. Dividend with a smiley face - MFS Pacific investors should look away now. This is just too painful to read. The Sydney Morning Herald's Kate Lahey reports on how MFS CEO Michael King suggested a Ponzi-like dividend payment near the end. He told his CFO that it didn't matter if MFS couldn't afford, as long as he could "make an argument" about future profit streams.

''No one will care as long as we have the argument ready,'' Mr King wrote. ''Having said that, I would love to go for as much as possible, if you haven't noticed.'' The court heard he added a ''smiley face'' to his last sentence.

8. Big Four face class action - Class action lawyers have set their sites on the Big Four banks in Australia over what they say is A$5 billion of overcharging of penalty and late fees, the Sydney Morning Herald reports.

Leading litigation funder IMF Australia will pay for more than 10 class actions against the banks, including the "Big Four" - Commonwealth Bank, ANZ, Westpac and National Australia - in an effort to claw back at least $400 million in what its lawyers will claim is a systematic gouge of banking customers.

9. The worry trade - Felix Salmon at Reuters points to a great chart showing the price of gold in euros heading for 1,000 euros/oz. That is one depreciating currency. Obviously many investors don't believe the ECB can't get out of its mess without printing money. Gold also went through the key US$1,226/oz resistance level overnight, rising to US$1,233/oz on Globex. HT Nicola at NZMint.

10. Totally irrelevant video - Remember yesterday I included a video of a Mobile Home salesman's (brutally honest) ad. Here's the 'How to' guide of how it was done.