Comment, analysis and other offerings from Wednesday’s FT,
Martin Wolf: Rising government bond rates prove policy works
The jump in bond rates is a desirable normalisation after a panic. Investors rushed into the dollar and government bonds. Now they are rushing out again. Welcome to the giddy world of financial markets.
How Beijing kept its grip on power
Minxin Pei,a senior associate at the Carnegie Endowment for International Peace in Washington, writes how The Chinese Communist party was practically written off after its army crushed the pro-democracy movement in Tiananmen Square on June 4 1989. Twenty years later, things could hardly be more different. China is riding high as a new economic and geopolitical giant.
Why we need separation of powers
Andrew Turnbull, former cabinet secretary and head of the Home Civil Service, writes that the constitutional renewal bill, now becalmed in parliament, is just a ragbag of disparate issues.
Editorial Comment: End of a US era
The basic facts of GM’s predicament are well known: the recession killed a company bled to anaemia by its incapacity to make cars people would buy.
Lex on jumbo mortgages
According to Loan Performance, 8.8 per cent of jumbo mortgages are now more than 60 days overdue, almost twice the proportion of smaller prime mortgages.
Insight: Hedge funds face mountain
David Smith, chief investment director of GAM’s fund of hedge fund business, explains how the hedge fund industry forgot the aims of hedging as equity bull markets led to a ferocious appetite for ever- increasing performance and a disregard for risk. The result was a hedge fund bubble that burst when markets collapsed.
Lombard: BP’s long-lived pensioners pose a problem for all
“Here today, gone tomorrow” might be a more apposite motto for BP’s pensions website following the energy company’s decision to close its final salary scheme to new entrants from next April.
John Authers’ The Short View: Market expectations
Some markets are back to normal. Whether they have been brought there by any normalisation of sentiment is another matter.
Willem Buiter’s Maverecon blog looks at fiscal options for the UK
Even though the credibility and reputation of the rating agencies is in tatters, the fact that they have not yet been written out of the regulations and rule books governing the investment behaviour of many institutional investors means that a downgrade would still affect market demand for UK sovereign debt.