Comment, analysis and other offerings from Friday’s FT,
The US Securities and Exchange Commission’s civil suit against Goldman Sachs will be vigorously contested by the defendant. It is interesting to speculate which side will win; but we will not know the result for months. But the case is a clear demonstration of how derivatives and synthetic securities have been used to create imaginary value out of thin air, Soros, the chairman of Soros Fund Management, writes.
Gillian Tett: Challenges to Goldman are still kept to a whisper
Deep inside some law firms and consultancy groups in London and New York, some highly sensitive private conversations are under way, the FT’s Tett writes. The issue at stake is Goldman Sachs. More accurately, whether it makes commercial sense for lawyers and consultants to offer their services to Goldman in the months ahead.
Editorial Comment: Obama moves on financial reform
As Barack Obama increased the political pressure with interviews and a big speech on the subject this week, Congress moved closer to a bipartisan agreement on financial regulation. Prospects are good that the eventual reform will be a big step forward. But one should not expect too much even of a significantly improved system.
Lex on Deutsche Bahn / Arriva
Mind the gap. Some Arriva shareholders may baulk at selling out to Deutsche Bahn at a discount to recent UK transport sector deals. Still, Lex writes, it is the only offer – and the board has recommended it. Despite the Brussels-induced liberalisation forced upon Europe’s €200bn-a-year transport market, Arriva has not got an auction going, so far. But could a higher bidder still board the train?
Lombard: Arriva deal exposes flaws in patriotic defence
Surely, if ever Britain’s Labour government wanted an excuse to show voters how it would apply a public interest test to prevent UK corporate jewels being carted out of the country, Deutsche Bahn’s planned takeover of Arriva is the moment. In fact, the FT’s Andrew Hill writes, this deal exposes the sterility of the “national interest” argument that some would like to see applied to British companies.
John Gapper’s Blog: IKB’s failures do not prove Goldman’s innocence
Was it Goldman’s fault that IKB, the German bank, lost $150m on the controversial Abacus deal, or should IKB take all the blame itself?, the FT columnist asks. There is lots of evidence that IKB brought its fate on itself. None of this, however, absolves Goldman from its responsibilities.
FT Money Supply: Eurozone inflation… and Greece
If financial markets were not fretting about Greece, what would they be worrying about? In quieter times, more might have been made of diverging views on the European Central Bank’s governing council over the inflation outlook, the FT’s Ralph Atkins writes.
FT Energy Source: Why keep drilling for natural gas?
Why are US gas producers continuing to drill so much?, the FT’s Kate Mackenzie asks. Prices are low (especially against crude oil), storage levels are high, and demand has of course taken a hit from a downturn in industrial activity.