Comment, analysis and other offerings from Tuesday’s FT,
Simon Schama: China’s on-off American romance
The Chinese government wags its fingers at American fiscal profligacy not least because it has no wish to see its bond holdings devalued from a collapsing dollar, writes Schama. But unloading T-bills carries the risk of shoving the American economy off a cliff with severe collateral damage to exports. The secret truth is the Chinese are not yet accustomed to being the strong party in this relationship. Perhaps, when they saw the swoon-inducing figure of the 44th president on Sunday, they fell head over heels all over again. Just don’t bet your bonds on it.
Analysis: Ranking Europe’s finance ministers
In a year when finance ministers have had to throw away their usual scripts and improvise on policy, who has come out top of the FT’s ranking? Our interactive guide shows how each of the European finance ministers was ranked politically, on economic criteria, on credibility and overall. See also FT editor Lionel Barber’s video interview with the top-ranked finance minister, France’s Christine Lagarde.
Insight: Marc Ostwald – the ugly side of Japan’s balance sheet
In financial markets, chatter about potential future weakness in the Japanese yen and Japanese government bonds is growing, writes Ostwald, strategist at Monument Securities. Until other G7 countries’ short and long-term interest rates start to revert to pre-crisis levels, the risks for JGBs and the yen look to be overstated. An ageing domestic population will continue to have little risk appetite, and while the asset/liability side of Japan’s balance sheet is ugly, the picture elsewhere is deteriorating more rapidly, and solutions are as difficult, if not more so.
Kurt Lauk: German taxpayers should not bear the Opel burden
When General Motors last month reversed its decision to sell off Opel/Vauxhall to Canada’s Magna, the US carmaker caused significant collateral damage to many governments in Europe. Nowhere was this more the case than in Germany, writes Lauk, national chairman of the economic council of Germany’s Christian Democratic party.
Editorial comment: Copenhagen is only the beginning
Only one thing about the Copenhagen Summit is absolutely clear: it will not be the last word in climate change negotiations. Barack Obama on Sunday confirmed that a binding treaty will not emerge from next month’s talks. He suggested that participants should aim instead for agreement on a “political” deal to serve as a framework for a formal treaty that can be agreed later. There are dangers to this approach: countries may now feel less pressure to fall into line. Next month’s talks in Denmark may still end in acrimony and collapse. Nonetheless, this is the right direction in which to take the negotiations.
Lex on the new and improved GM
Leave it to government bean counters to state the obvious: Washington will not recoup all the cash it ploughed into the car industry over the past year, according to a government report earlier this month. But there is a lot of room between zero and $81bn, and most of the money is likely to come from the 61 per cent stake in General Motors once it is reprivatised. But a glance at the new GM shows just how preposterous its managers were to insist a year ago that they could avoid bankruptcy and regain competitiveness if taxpayers just lent them enough.
The Short View: The Baltic Dry Index
The BDI’s upturn may just indicate a short-term economic boost and cannot be seen as a reliable sign of smooth sailing ahead, says Aline van Duyn. Unfortunately the index is not as useful as it once was, due partly to a surge in shipbuilding.
EnergySource: The top 250 energy companies: big oil still on top
The Platts Top 250 ranking of the world’s leading energy companies for 2009, released on Monday, holds few surprises in the top 10. The big international oil groups still dominate and ExxonMobil is at number one, inevitably. But the ranking does have a lot of intriguing detail, writes Ed Crookes.