Comment, analysis and other offerings from Tuesday’s FT,
Gideon Rachman: A grubby Libyan lesson in realpolitik 
Another week, another revolution, writes the FT columnist. Muammer Gaddafi of Libya may soon become the third Arab president to be swept from power in little more than a month. Until a few years ago, his ouster would have been greeted with delight in western capitals. But in recent years, the Libyan leader has been recast as a reformed sinner, an ally in the “war on terror” and a valued business partner. This shift highlights the way in which western concern over human rights is almost always coloured by convenience. But there should be little room for mixed feelings about the downfall of Col Gaddafi.
Axel Weber: Europe’s reforms may come at a high price
In the coming weeks, European policymakers will have to decide on an overhaul of governance of the European monetary union, writes the outgoing president of the Bundesbank. As a guiding principle the European Council has clearly – and, in my view, rightly – stated that the main foundations of EMU and the EU treaty have to be respected. This means the principles of subsidiarity, responsibility of individual member countries and no-bail-out remain essential for the EU. In this context, what cornerstones are to be considered in the matter of reforming EMU governance?
Francesco Guerrera: Tech as finance sector’s saviour?
Reeling from a crisis that wiped out some of its most lucrative products and a regulatory overhaul that will curb high margin activities, the financial sector sees IT as its saviour, writes the FT’s finance editor. Listen closely and the Wall Street titans sound more like Henry Ford than Bill Gates. If, by dint of IT, financial groups can automate functions carried out by error-prone humans, their cost base will shrink, bolstering profits and pleasing investors. But the problem for banks taking a “build it and they will come” approach to something as large as an automated derivative trading platform is that there is no way of knowing if Wall Street’s latest messiah will be just a mirage.
Andrew Hill: Society and the right kind of capitalism
After the Four Horsemen of the Corporate Apocalypse have bolted, society usually calls in the Four Hand-Wringers of the Messy Aftermath to shut the stable door: regulation, pay restraint, governance – and social responsibility, writes the FT’s management editor. That is what happened after the Enron and WorldCom scandals a decade ago. It is happening again in the wake of the financial crisis. But this time, what used to be known as social responsibility, sustainability or plain philanthropy comes in the apparently novel guise of “shared value” or “constructive capitalism”.
The Short View:Surge in the five-year sector
Inflation hawks are sharpening their talons for a breakout in prices within the next five years, writes the FT’s Michael Mackenzie. US inflation expectations for the next five years have just broken into a new and higher range. Breakevens – the difference between yields on cash Treasury paper and inflation-protected notes – are at 2.06 per cent, up from 1.87 per cent just over a week ago. That’s the highest reading since the summer of 2008 and a long way from last August’s nadir of 1.13 per cent. The surge in the five-year sector suggests this maturity beckons as the bond market’s “hot spot” for inflation risk.
Lex: BP/Reliance: will investors get the message?
Bob Dudley wants to put value ahead of volume, quality before quantity, writes Lex. Yet investors are having a hard time grasping quite what BP’s chief executive means. In the past six weeks he has signed two potentially game-changing deals, yet still BP’s share price only limps forward: up 8.5 per cent in dollar terms this year, while ExxonMobil is purring along at a 15 per cent clip so far in 2011. BP is, of course, recovering from the Macondo oil leak, and still has a possible “gross negligence” charge hanging over it. So investors have ample reason to be cautious. Still, Monday’s $7.2bn exploration and marketing deal with Reliance Industries for Indian Ocean oil and gas should help them see how a post-Macondo BP will look.
Editorial: Apple flunks a test
To require incumbent directors to attract more than 50 per cent shareholder support to secure re-election to the board scarcely sounds controversial, says the FT. Yet Apple, the highest flying of high-tech companies, is battling to ward off a shareholder resolution at its annual meeting on Wednesday that calls for precisely that. What makes Apple’s resistance all the more strange is that others such as Cisco Systems and PG&E Corporation have adopted majority voting without apparent qualms; so why should Apple say no?
Michael O’Sullivan: Only a republic can stop Irish serfdom
As this week’s general election approaches, Irish voters look set to unceremoniously eject the incumbent Fianna Fáil government, writes the author of ‘Ireland and the Global Question’. But more than a simple change of party, Ireland needs a restructuring of its debt, and profound reckoning with its failed institutions. Only a second Irish Republic can achieve both tasks. In the bond markets, Ireland’s error has been to take bank liabilities on to its balance sheet. By then linking this with entry into Europe’s bail-out fund, the country has set out on a “road to serfdom”. This week’s poll should be about how to turn off this road, not how long it should be.
BeyondBrics: Brazil heading for subprime crisis?
Is Brazil heading for a credit crisis?, asks the FT’s Jonathan Wheatley. There are good reasons to worry about the fast pace of credit expansion in Brazil – it more than doubled between 2002 and the end of 2010. Especially worrying is how little control there is over the credit borrowers take on. At this stage, calling a subprime crisis seems alarmist. Mortgage credit is equal to less than 5 per cent of GDP. And there is no such thing as a collateralised debt obligation in Brazil. Still, such early warnings should be watched with care.
MoneySupply: Hometown bias on the FOMC
I’m not sure quite why Bernd Hayo and Matthias Neuenkirch of Philipps-University in Marburg, Germany, care about the behaviour of regional Fed presidents, but their latest working paper will interest Fed-watchers, writes the FT’s Robin Harding. They took 612 speeches by members of the FOMC up to September 2009 and then coded them as ‘tightening’ or ‘easing’. Then they tested against economic variables to see what was motivating the speech – and discovered several trends.
Michael Skapinker: How poor students could teach us
The bleak job prospects facing today’s young people will be familiar to their parents, writes the FT columnist. Talk of a “lost generation” was common 30 years ago too. But better times will come for many of today’s young – the ones we should worry about are those at the bottom. What can be done? The OECD has just published a study of young people from poorer families who beat the odds academically. If we can understand how they managed to come out on top, we can devise policies that would help others make the same journey.