Comment and analysis from the FT on Tuesday,
Jim O’Neill – Why it would be wrong to write off the Brics
By the end of the decade they may be close to representing 20 per cent of global GDP. This is dramatically higher than any of the four scenarios we considered in 2001 when I first wrote about the likely emergence of the Bric economies. Rather than suggesting our Bric dream may be derailed by the global recession, the notion that the Brics can become collectively bigger than the G7 by 2035 is becoming more plausible.
David Hale – There is only one alternative to the dollar
The clear alternative to the dollar in 2009 is not other currencies but that ancient form of money: gold. Precious metals could emerge as a hedge for investors suspicious of central banks and fearful that inflation will be the simplest solution to the challenge of global deleveraging.
Willem Buiter’s Mavercon – Lessons from the global credit crisis for social democrats
I assume I was not invited to give the den Uyl Lecture because of my personal democratic socialist credentials – I have never been a member of any political party and lost any strong sense of identification with a well-defined political ideology decades ago.
Editorial comment – Saving the savers is not the priority
Pensioners reliant on savings income have suffered from the recent hefty cuts in interest rates. They are a large, growing and vocal pool of voters. Mr Cameron has proposed an income tax cut for the retired and on non-pension savings, to begin in April. This is part of a plan, in Mr Cameron’s words, to “turn Britain from a spend, spend, spend society into a save, save, save society”. This is misguided.
Lombard – FSA’s trial and error leads to a short-selling solution
Gold, frankincense – hold the myrrh. The Financial Services Authority’s decision to end the ban on shorting of financial stocks is no gift for the hedge fund community. Disclosure requirements remain in place. But given the pain some alternative asset managers have suffered recently, the short sellers among them should be grateful the regulator did not listen to the baying of politicians for continued constraints. So should the rest of us.
World View – Europe’s big three airlines scramble for supremacy
Europe’s three biggest airlines – Air France-KLM, Lufthansa and British Airways – are not only vying for supremacy but scrambling to expand into some of the continent’s largest aviation markets such as Italy, Spain and Scandinavia.
Analysis – Fear of Falling (pay packets)
Some companies have already reacted to the country’s shifting mood. Most of the banks that went cap in hand to the government and received billions of dollars from federal coffers have scrapped executives’ bonuses for this year. Some, such as Morgan Stanley and Citigroup, have even pledged to claw back part of the bonuses due to traders and other high-flying employees if their bets turn sour.
Letters – The growing misuse of pre-packs
There is growing evidence that the procedure is being increasingly misused in the downturn. Companies are using the device to offload obligations that are no longer sustainable (for example, over-rented leases) and are starting up again the following day with similar management/ownership.
Short View video – No reason for optimism yet
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