Comment and analysis from Wednesday’s FT:
Martin Wolf: The market and oil prices
Oil at $200 a barrel: that was the warning from Goldman Sachs, published last week. The real price is already at an all-time high (see chart). At $200 it would be twice as high as it was in any previous spike. Even so, it would be a mistake to focus in shock only on the short-term jump in prices. The bigger issues are longer term.
Tech Blog, Richard Waters: The cash keeps rolling in
Like the inhabitants of Lake Wobegone, Silicon Valley’s elite venture capital financiers may all think they can be above average, but logic suggests otherwise. The trouble is, the VC world still has too much cash driving down returns, whoever is investing it.
World View: Wise bankers are keeping the champagne on ice
The credit markets are trying to convince themselves that the worst is finally over. But wisely they are still keeping the champagne on ice. For if the subprime cancer may have been checked, the chemotherapy is still going on. And on Tuesday there were more stark reminders, in terms of bleak news from Credit Agricole, RBS, Fortis, SocGen and others, that no one is in remission quite yet.
Lex on Yahoo and Icahn
The day that talks between Microsoft and Jerry Yang collapsed, the “Chief Yahoo” may as well have painted a target on his back. Yang is now rumoured to be in the sights of Carl Icahn, the activist investor. Having rejected Microsoft’s proposal of $33 per share, Yahoo’s stock had sunk to about $24.50 in mid-morning trading on Tuesday. Clearly, investors are not buying Yang’s assertion that Yahoo can, under its own steam, not only equal but surpass the valuation placed on it recently by Microsoft.
Editorial comment: Bad UK inflation means no rate cuts
Tight credit conditions may weaken the Britishs economy so much that unless rates are cut, inflation could fall below target – but given the danger of runaway price rises, the Bank of England will have to take that risk. Interest rates should not be cut next month, but kept on hold until the autumn, to await more evidence on how far the economy will slow.
Bank results: Writedown league table
The FT’s table lists the asset writedowns and credit losses since the beginning of 2007 at some of the world’s biggest banks.