Comment, analysis and other offerings from Thursday’s FT,
John Gapper: The iPad’s scary counter-revolution
Can the iPad can “save publishers”? I think the answer to that one is “yes and no”, the FT columnist writes. While I think the iPad is good for them as a category, I’m not so sure it is good for those that now exist – certainly not all of them. The iPad is an alluring vision of the digital future for publishers, but a scary one too.
Kenneth Rogoff: Bubbles lurk in government debt
As the global economy reflates, many people are asking: “Is the next bubble in gold? Is it in Chinese real estate? Emerging market stocks? Or something else?” A short answer is “no, yes, no, government debt”, Rogoff, co-author of the book ‘This Time is Different: Eight Centuries of Financial Crises’ writes. A prolonged explosion of government debt is an exceedingly common characteristic of the aftermath of crises.
Michael Hudson: Eastern Europe won’t pay what it can’t pay
Greece is just the first in a series of European debt bombs about to go off, writes Hudson, professor of economics at the University of Missouri and an adviser to an opposition think thank in Latvia. Mortgage debts in the post-communist economies and Iceland are more explosive. For the past year, these countries have supported their exchange rates by borrowing from the EU and the IMF. The terms of this borrowing are politically unsustainable.
Analysis: Germany — A shifting Weltanschauung
The greatest economic power in Europe, linchpin of the eurozone, Germany is not the country it was. Since 1990 – the year of reunification – it has become significantly poorer, with a lower per capita income and a lot less money to spare since pouring money into the former East Germany. Does this mean Germany is no longer a reliable partner in the European Union? Or does it just mean the country has become more normal, putting national interests first like its fellow members?
Lex on Daimler/Renault
Don’t call it an alliance. As Carlos Ghosn, Renault’s chief executive, points out, the lexicon of automaker tie-ups ranges from co-operation on a single product to an alliance involving cross-shareholdings and “sharing everything”, or a full merger. Renault-Nissan’s deal with Daimler is in the middle: and rivals will be watching closely to see if it can work.
Lex on Greece
Greece may believe that last month’s potential support package from its eurozone partners and the IMF has bought it time. But bondholders evidently want to remind Athens that it is running out of time to extinguish its €272bn debt inferno. Yet other investors – who arguably have less skin in the game – took the Greek gyrations in their stride. Therein, perhaps, lies a clue as to how to treat Greece’s woes: with a level head.
Editorial comment: Goldman on trial
Goldman Sachs – a totem of Wall Street – is on trial in the court of public opinion. It has become popularly known as a greedy bailed-out bank that pays megabonuses. This matters. As the bank itself has said, a dented reputation could “adversely affect [its] businesses and results of operations”. To mitigate that risk, the bank has entered a plea bargain.
Energy Source: Will a product squeeze keep crude oil from rising?
The irony of crude prices breaking well above $85 can’t have been lost on the energy ministers who met in Cancun last week to discuss new measures for tackling oil price volatility. The big question is whether prices will remain at that level, and push even higher – something that could dampen nascent economic growth in much of the world.
FT Video: Short View — Greek contagion
Losing 8 per cent on an investment in just over a week is a miserable experience. But that is what has happened to the buyers of €5bn of bonds sold by Greece on March 29. The renewed concerns about Greece have not, however, caused knock-on jitters on Portuguese or Spanish bonds. This is a marked departure from previous bouts of Greek default fears, the FT’s Aline van Duyn says.