Comment, analysis and other offerings from Thursday’s FT,
Willem Buiter’s Maverecon Blog: throwing good public money after bad private money
Like its American and Dutch counterparts, the British toxic asset insurance scheme is without redeeming social value: it is inefficient, unfair and expensive to the tax payer. Apart from that it is great. There also are superior alternatives available: full nationalisation and, best of breed, the ‘good bank’ solution.
Jonathan Guthrie: We face a long wait for the Seventh Cavalry
Alistair Darling should set up a text alert service to keep business people in the loop with his banking bail-out. Imagine the advantages. You are in a meeting. Your mobile pings discreetly. Equally discreetly, you check your in-box. “Treasury crosses fingers, whangs £200bn more into the void,” the message reads. “Quid pro quo: Aldi will cater Lloyds’ board lunches.” You smile smugly. Bail-out ignorance begone!
Analysis: Eastern Europe is in crisis
All of Europe is heading towards its worst economic crisis since the 1930s. But compared with the wealthy west, central and east European nations are in a weaker position to respond. At risk is not only the economic development of vulnerable countries but even their political stability.
Insight: the flight of the long run
Relying on the long run for investment decisions is essentially relying on trend lines, writes Peter L. Bernstein. But how certain can we be that trends are destiny? Trends bend. Trends break. Today, in fact, we have no idea where any trend lines might begin or end, or even whether any trend lines still exist.
Tim Congdon: Here is the way to end recession with speed
Surely extra debt is not the answer if companies have already borrowed too much, asset prices are plunging and banks are worried about inadequate collateral for their loans. Would it not be much better if the level of bank deposits, the quantity of money, increased?
David Pilling: Don’t reject Chinalco’s bid for bogus reasons
Rio Tinto, the mining company with almost as many holes in its balance sheet as holes in the ground, upset some Australians when it established its headquarters in London following the 1995 union of RTZ and CRA. Now, rumblings Down Under suggest the Anglo-Australian mining giant is about to make an even more humiliating move: to Zhongnanhai, home of China’s Communist party.