Letter from the Editor

Logo of General Motors Corporation. Source: 2007_business_choice_bro_en.pdf (on GM website).

George Bernard Shaw once said: “I showed my appreciation of my native land in the usual Irish way: by getting out of it as soon as I possibly could.” This week many of his fellow countrymen may have been considering joining the centuries-old diaspora from the Emerald Isle as a joint EU/IMF delegation arrived to negotiate a bail-out of its stricken banks. At least some of the banks would die if not kept alive by cheap unlimited European Central Bank funding – the same easy money delaying the almost inevitable debt restructurings in Ireland, Greece and possibly elsewhere. It also drags the ECB firmly into the political realm and makes it easier for politicians to dodge difficult decisions – just like their dreaming Californian cousins. Meanwhile the Fed was robustly defending its own QE2 programme designed to drive down US bond yields, but they stubbornly decided to rise instead as the latest data on mortgages showed a still-moribund housing market. Amidst the general confusion the spectre of looming Chinese price controls to fight inflation cooled the commodities rally, but counter-intuitively may have shown evidence of a maturing market in Shanghai. It is understandable that at such times cautious investors like Abu Dhabi’s investment vehicle sought the safety of developed markets. But despite the relative success of the largest IPO in US history for General Motors’ owners (don’t mention the taxpayers), the rulers of the Arab emirate are hardly likely to want to give up their German and Italian cars anytime soon. There is hope for the eurozone yet. John Casey, Lex publisher http://www.ft.com/lex/best

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