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Posted by Izabella Kaminska on Jun 23 08:20. 2 comments | Share

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

John Gapper: The price of Wall Street’s black box
JPMorgan Chase this week became the second Wall Street bank after Goldman Sachs to face a large fine and a stiff warning over its sales of mortgage-backed bonds in the last days of the housing bubble in spring 2007, More…

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

John Gapper: The price of Wall Street’s black box
JPMorgan Chase this week became the second Wall Street bank after Goldman Sachs to face a large fine and a stiff warning over its sales of mortgage-backed bonds in the last days of the housing bubble in spring 2007, writes the FT columnist. Others are to come, perhaps including Merrill Lynch, Deutsche Bank and Citigroup. It is no coincidence that the Wall Street banks have lobbied with such energy against efforts to force trading of more derivatives on to exchanges and through clearing houses. They do not want the black box of fixed income and derivatives trading, which has provided so much of their profits for so long, to be exposed to plain view.

John Reid: Our salt risks draining into cyberspace

The news was dominated on Wednesday by reports of the arrest of a suspected British teenage computer hacker, in connection with a range of security breaches including attacks on the website of the CIA and the UK’s Serious Organised Crime Agency, writes Reid, a former British cabinet minister. We can expect many more such events as our security agencies struggle to address the challenges of cyberspace. In a matter of days we have seen a huge data theft from the International Monetary Fund, reports that the Pentagon is reclassifying cyberattacks as “acts of war”, and Liang Guanglie, China’s defence minister, saying his country and the US must work together to deal with the cyber “problem.”

David Pilling: Japan bids to turn tragedy into a triumph
Not everything in Tokyo is back to normal, observes the FT’s David Pilling. Office workers complain that the corridors of their buildings are so dark, the result of electricity-saving measures, that they fail to recognise colleagues in the gloom. One man was spotted on the subway, also less bright than usual, wearing a miner’s hat with torch attached, the better to read his newspaper. There are fewer foreigners on the streets, since many who fled in the immediate aftermath of the March 11 earthquake have not returned. And shops have taken to selling unusual items: one was offering “ice-touch underpants” for the hot, non-air-conditioned summer that descended with a vengeance on the capital this week.

Thomas Mirow: Helping food producers weather the storm

Group of 20 agricultural ministers, under the French presidency, are holding their first meeting to discuss global food security, writes Mirow, the president of the European Bank for Reconstruction and Development. The Paris talks are timely. We have experienced a second major food price rise in less than three years. Agricultural commodity prices may temporarily ease from their recent record peaks, but on current trends demand will consistently outstrip supply for a long period ahead.

Editorial comment: The road to zero
In 1963, John Kennedy warned that by the end of the 1970s as many as 25 states could hold nuclear weapons, says the FT. That nightmarish world has not materialised. Indeed, in the 66 years since the US dropped the first atomic bomb, only eight further states have joined the nuclear club. Yet despite this apparent success, the risks of nuclear proliferation are not ebbing, but growing. It is time for a renewed push towards nuclear disarmament.

Lex on the eurozone resolution
The eurozone crisis is, as yet, a small matter, notes Lex. In particular, it is a matter of small countries. Ideally, that consideration should make a resolution relatively easy. Imagine that the accepted mechanism for resolving debt crises in the single currency bloc was not funding mechanisms or fiscal plans but simple national absorption: small and fiscally weak countries would be merged into large and relatively strong ones. So Greece could be united with Germany (GG), Portugal would be added to France (FP) and Ireland might be divided between Italy and the Netherlands (the two together have the same gross domestic product as France)

The A-List: Martin Feldstein – Postponing Greece’s inevitable default
Even though the Greek parliament has given the government some breathing space with its vote of confidence late on Tuesday, a default by Greece is inevitable, writes Feldstein, an economist at Open Europe. With a debt to gross domestic product ratio of more than 150 per cent, large annual deficits and interest rates more than 25 per cent, the only question is when the default will occur. The current negotiations are really about postponing the inevitable default.

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