Comment, analysis and other offerings from Thursday’s FT,
The pendulum will swing back
Sir Martin Sorrell, chief executive of WPP, writes: Every era of financial or irrational exuberance ends with the shutters coming down. Tulip mania, the South Sea bubble, the panic of 1825 and the first internet bust were all part of the same ebb and flow. We should not expect it to be different now, but that does not make it any easier to accept the cyclical nature of economies.
Analysis: Eastern eggshells
The financial stability report regularly published by the Hungarian central bank is not a document that usually makes compelling reading. But this week’s, bearing the results of an assessment of the country’s banks, was different.
We should listen to Beijing’s currency idea
Fred Bergsten, a former assistant secretary of the Treasury for international affairs, writes: Zhou Xiaochuan, governor of China’s central bank, has suggested creating a “super-sovereign reserve currency” to replace the dollar over the long run.These are the first big proposals for international monetary reform from China or indeed any emerging market economy and deserve to be taken seriously for that reason alone.
Five success stories for recessionary times
The FT’s Jonathan Guthrie writes: The implication of much media coverage is that business has been universally blighted by the downturn. But many companies do not merit the currently popular journalistic epithets “struggling”, “troubled” or “recession-hit”.
China’s consumption is a disappearing act
The FT’s David Pilling writes: In January, a remarkable thing happened: more cars were bought in China, the land of bicycles, than in the US, the land of – well – cars. For those counting on the Chinese consumer to ride to the world’s rescue, here, surely, was the news they had been waiting for. Unfortunately, those vehicle numbers were not quite what they seemed. Nor – not yet, at least – is the Chinese consumer.
Editorial comment: Wall Street’s words
In the court of public opinion, just as in the marketplace, to survive you must supply what people demand. Goldman Sachs, the investment bank, understands this well. In a speech this week and in a comment in the FT in February, its chief, Lloyd Blankfein, smartly offered what the world most wants from bankers these days: contrition.
Lex on accounting changes
Confusion reigns. If the world’s accounting bodies were deliberately trying to destroy confidence in bank financial statements, they could hardly have done a better job. The Financial Accounting Standards Board , the US standards setter, last week bowed to pressure to relax mark-to-market rules. Its international counterpart would prefer a comprehensive, six-month review to avoid piecemeal tweaks.
Willem Buiter’s Maverecon: The green shoots are weeds growing through the rubble in the ruins of the global economy
This financial crisis will end. The Great Contraction of the Noughties also will come to an end. But neither the financial crisis nor the contraction of the global real economy are over yet. As regards the financial sector, we are not too far – probably less than a year – from the beginning of the end.
FT Video: The Short View – Climbing the wall of worry
John Auther’s on the worst corporate fundamentals on record.