Microsoft's Finances are on the Verge of Collapse: Libel in the New York Times

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Tuesday, 22 February 2011 06:04

You would not read that line in the New York Times. There are two reasons. The first is that it is not true (at least as far I know). The second is that the NYT would be quickly sued by Microsoft if it said something like this with no support.

However the NYT can say this about governments, which do not have the same ability to use libel suits to correct inaccurate statements. Therefore the NYT felt no qualms about beginning an article on Japan's stock market with the line:

"Japan’s government finances are on the verge of collapse."

Of course investors who are putting billions of dollars on the line do not agree with this unsupported assertion. The interest rate on 10-year bonds issued by the Japanese government is less than 1.3 percent. Investors usually demand a higher return from a company or government that they believe is on the verge of collapse.