Pink picks

Posted by Tracy Alloway on Jun 22 08:05. Comment | Share

Comment, analysis and other offerings from Wednesday’s FT,

Martin Wolf: Time for common sense on Greece
Albert Einstein is reported to have said that insanity consists of doing the same thing over and over again and expecting different results. More…

Comment, analysis and other offerings from Wednesday’s FT,


Martin Wolf: Time for common sense on Greece
Albert Einstein is reported to have said that insanity consists of doing the same thing over and over again and expecting different results. By those standards, the deal with Greece that is about to be agreed looks insane, the FT columnist writes. The only justification, as I argued in a column on May 10, is that it is needed to play for time. This is a bad strategy. Something more radical is required.

Alfonso Prat-Gay: Latin lessons for a eurozone recovery
Europe is slowly but surely falling into the same trap Latin American countries fell into, again and again, during the second half of the last century, says the former governor of Argentina’s central bank. The more the authorities try to avoid a currency crisis, banking failures and sovereign default, the more likely such doom becomes. One thing we have learnt from our region’s experience is that piecemeal, time-buying strategies always end up in a messier outcome – and almost always in the messiest possible one.

The A-List: Jim O’Neil – How a Japanese chipmaker reflects direction of growth
In the past two months the world economy appears to have lost considerable momentum, reawakening similar fears to the early summer of 2010. Is the much feared yet anticipated “double dip” on its way?, asks the former Goldman Sachs economist. See also the response from Arcus Research’s Peter Tasker.

Analysis: Budget Britain
A year since an emergency Budget startling in its severity, George Osborne can take satisfaction at the ease with which austerity is being implemented – but the test is yet to come, writes Chris Giles.

Brussels blog: IMF calls Greek debate “unproductive” — or does it?
Did the International Monetary Fund really mean to take a swipe at Europe’s continued bickering over how to deal with private holders of Greek bonds?, asks Peter Spiegel. According to John Lipsky, the Fund’s acting managing director, the tough language may have been the result of an editing hiccup.

News analysis: Demand for high-yield assets boosts risky second lien loans
A controversial financing structure from the pre-crisis era, so-called second lien loans loans, has benefited this year from keen investor demand for high-yielding assets, the FT’s Nicole Bullock reports. Loans for risky corporate borrowers that are backed by a second rather than first lien on assets totalled $3.5bn so far in the second quarter, the largest quarterly volume since the second quarter of 2007, the heyday of the credit boom and up from $1.1bn in the first quarter.

Commodities: Delivery curbs spark aluminium price row
It takes only a few days to deposit aluminium in the largest metal store in Detroit. But ask for your metal to be delivered and it will take not days, but more than six months, the FT’s Jack Farchy notes. The problem stems from an arcane rule on the London Metal Exchange, the centre of global industrial metals trading, which limits the quantity of metal that warehouses must deliver each day.

Lex on the European Stability Mechanism
The eurozone is forever taking two steps backwards, so it is a relief when it takes a small one forward, says Lex. Monday’s decision by the bloc’s finance ministers that the European Stability Mechanism, the eurozone’s permanent bail-out mechanism, will not have preferred creditor status, is an example.

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