Comment, analysis and other offerings from Thursday’s FT,
Niall Ferguson: America’s looming Greek crisis
It began in Athens and is spreading to Lisbon and Madrid. But it would be a grave mistake to assume the sovereign debt crisis now unfolding will remain confined to the weaker eurozone economies, warns Ferguson, an FT contributing editor and author of The Ascent of Money. For this is more than just a Mediterranean problem with a farmyard acronym. It is a fiscal crisis of the western world and its ramifications are far more profound than most investors appreciate.
Martin Jacomb: How to get banks lending
It is easy to see why everyone is blaming the banks for our current economic travails. They are the obvious scapegoats. But governments, central banks and regulators are also responsible, writes Sir Martin, a former director of the Bank of England and currently chairman of Canary Wharf Group and Share plc. Each is at fault, for any of them could have prevented such a catastrophic result. Now, however, the political imperative of blaming the banks is causing its own damage.
David Pilling: How Toyota engineered its own downfall
Weirdly, Akio Toyoda, scion of the Toyota family, summed it up rather well. “Believe me, Toyota’s car is safety,” the chief executive of Japan’s most iconic company said. “But we will try to increase our product better.” It would normally be unforgivable to mock someone’s difficulties in English. But the fact that Mr Toyoda, who earned an MBA in the US, had not been drilled in a word-perfect English apology says much about Toyota’s sub-quality response to its recall crisis, writes the FT’s Pilling.
The Short View: No easy way out
The crisis of confidence in Greek debt has eased, now that the European Union appears ready to help, says the FT’s John Authers. The extreme price of insuring Greek debt fell sharply as a result. But this only gave way to the reality that the eurozone, and the rest of the world, still face intractable problems.
Techblog: IPad price analysis suggests big 3G markup
The new iPad represents high levels of profitability for Apple, according to a breakdown of the price of its components and manufacturing cost by the iSuppli research firm, writes the FT’s Chris Nuttall.
Editorial comment: A blocked (Fed) exit
Ben Bernanke has sketched out a route to the exit, but does not intend to use it for a while. The Fed chairman released testimony on Wednesday that set out plans for removing the novel and extraordinary monetary props with which his central bank has shored up the sickly US economy. But sustainable prosperity would return more quickly – and he would reach the exit sooner – if banks were made to come clean about their losses and raise new capital.
Lex on 50 Greeces, weakness at the periphery
Connecticut’s Lisbon, New York’s Rome, Georgia’s Athens and Iowa’s Madrid may lack the sense of budgetary crisis being felt lately in their European namesakes, but America’s states and municipalities could yet spark equally vexing problems for the US. US Treasury secretary Tim Geithner recently scoffed at the prospect of America losing its triple A rating, but most of its constituent parts already have and some may soon be in outright default.
Market Insight: Corporate debt and eurozone recovery
The precarious financial position of eurozone governments has polarised recent market concerns, and the still fragile condition of banks is well-known, writes Marco Annunziata, chief economist at UniCredit. But there is another less obvious factor that could hold the key to the region’s recovery prospects: the financial position of households and non-financial corporations.
Energy Source: Oil companies prepare Iraq invasion
When most everyone suspected US president George W Bush was determined to launch a military attack on Iraq in late 2002/early 2003 and the official White House line was still “no final decision has been made,” signs of an imminent invasion began to appear, writes the FT’s Carola Hoyos. Similar signs are appearing about the imminent invasion of international oil companies who have signed oil deals to help develop Iraq’s massive, but dilapidated oil fields.