Comment, analysis and other offerings from Friday’s FT,
Philip Stephens: The future or the museum? Europe’s moment of choice
The other day a visitor from China asked whether I thought Britain was falling into inexorable decline. Had it been hit by a temporary shock from which it was possible to rebound? Or were we witnessing a permanent waning of its international power and prestige — a resumption of a trend that began with its retreat from empire more than 60 years ago? Could British politicians lean against the march of history?
Comment: Why the renminbi has to rise
Global leaders have agreed reducing global imbalances is a priority. In practice, writes Martin Feldstein, Harvard professor of economics, that means reducing the US $500bn current account deficit and shrinking the $350bn surplus of China. All other current account imbalances pale by comparison. For this to occur, exchange rates must adjust.
Inside Blair Inc
Tony Blair is hardly the first “retired” statesman to attract attention over his pursuit of an eclectic mix of profitable private projects and public good works after leaving office, write FT reporters. What gives Mr Blair’s case special bite is the scale and scope of his new network, the speed of its assembly, the premium placed on privacy, and what critics say is an uncomfortable proximity between official duties, fund-raising efforts and his growing commercial interests.
Short View: GDP grows but pain remains
The recession in the US is over, says John Authers. Official confirmation came with the news that its GDP grew at an annual 3.5 per cent in the third quarter. The numbers were a good enough reason to halt the recent return of risk aversion. In the short term, the key to whether risk appetite can return, will depend on the data that is due next week, and crucially US employment.
US Daily View, video: Martin Wolf on US GDP
The unexpectedly good news from US GDP figures could be followed in other significant economies around the world, says Wolf. However the figures raise some rather important questions and big revisions are not only possible but very likely.
Lombard: Darling, you know how to make a bank happy
Darling by name, darling by nature, writes Louise Lucas. Alistair Darling, chancellor of the exchequer, is set to hand the recalcitrant Lloyds Banking Group the get out of jail (almost) free card it was angling for — and a few bells and whistles on top. But it is less easy to see how Mr Darling will win the hearts and minds of his government cohorts and the taxpaying British public.
Gillian Tett: Lessons from Singapore
If you talk to financiers in Singapore these days, the topic of property prices keeps cropping up but, unlike in America, it is not the threat of further real estate market falls. Instead, as Wall Street worries about US house prices — exemplified by a downbeat report from Goldman Sachs this week — in Asia there is mounting concern about property booms-cum-bubbles.
Samuel Brittan: Good-bye to the pre-crisis trend line
If China and other countries are chronic oversavers, who are to be the overborrowers? For a number of years it was consumers in the “Anglo-Saxon” type economies. But even if there had been no banking crisis they would sooner or later have come up against prudential limits to their debt ratios. This leaves only governmental authorities to do the borrowing.
Lex Hedge fund scandals
Short-selling hedge funds, Morgan Stanley’s CFO supposedly said at the depths of last year’s crisis, are like “cold blooded reptiles. They eat what’s in front of them.” Lately, however, some hedge funds have more closely resembled a house of cards, where a single knock can bring the whole thing down. when it comes to systemic risk, however, hedge funds’ relatively small size means macro-prudential regulators would do better to focus on banks.
Lord of Finance: The FT/Goldman Sachs Business Book of the Year
Liaquat Ahamed’s vivid history of how central bankers’ mistakes helped precipitate the Great Depression bowled over the judges and swept away a strong field of finalists for the 2009 FT/Goldman Sachs Business Book of the Year prize. It was not only beautifully written”, in the words of Lionel Barber, the FT’s editor. Its selection as the “most compelling and enjoyable” business book of the past year was also due to the strong parallels between the events Mr Ahamed describes and those leading to the past two years of economic and financial turmoil.