Comment, analysis and other offerings from Tuesday’s FT,
John Gapper: Victims have their moment but the suffering goes on
It was, taken literally, an absurd jail sentence: one of more than life, one reaching well into the grave. Yet Judge Denny Chin on Monday ignored the plea of Bernard Madoff’s lawyer to give him a shorter term on the grounds that, at 71, his life expectancy is about a dozen years and instead threw the sentencing book at him. The handing down of the 150-year sentence was a moment of breathtaking legal theatre.
FT Slideshow: the Madoff Sentencing
Waving T-shirts, giving thumbs-up signs, and even displaying redundant and worthless investor slips, the crowd cheered and hugged relatives as the news of the 150-year sentence meted out to Madoff emerged.
Philip Stephens: King does not have a monopoly of wisdom
You have to admire Mervyn King’s chutzpah. The governor of the Bank of England has been speaking lately with customary self-confidence about Britain’s economic challenges. His prescription is simple: we should all agree that the Bank knows best.
A sound funeral plan can prolong a bank’s life
Writes Anil Kashyap, professor of economics and finance at Chicago Booth: Buried within the 88-page Obama administration proposal to overhaul financial regulation is an overlooked option called a “rapid resolution plan”. It mandates that systemically important financial companies be required regularly to file a “funeral plan”: a set of instructions for how the institution could be quickly dismantled should the need to do so arise. This simple step would have both short-run benefits if another wave of panic occurs and longer-term pay-offs that would complement other reform efforts.
Chinese exports could crush fragile markets
Writes Ben Simpfendorfer, China economist at RBS: Talk of a “G2″ is fashionable, and with good reason. The trip by Tim Geithner, US Treasury secretary, to Beijing last month underscored the substantial economic and financial interests at stake in the US-China relationship. This change in focus is reflected at an institutional level in China. There is a growing body of research, for example, published by academic and official institutions, looking at China’s purchases of US government debt and the implications of the Federal Reserve’s quantitative easing.
Lex on Cashless California
The unthinkable may be on the verge of happening in California, but it is not the “failure” some fear. America’s largest state is nowhere near default on its $70bn in debt. Instead, it is days away from painful cash-saving measures that Arnold Schwarzenegger, governor, seems intent to use as a cudgel for fiscal reform.
Michael Skapinker: There is more to city life than convenience
I can’t help noticing one feature of supposedly liveable cities. Not that many people live in them. Zurich has a population of only 360,000. Copenhagen has a little over 600,000.
Stefan Stern: Survive company mergers
Many promises are made at the altar during a merger or an acquisition. Most of them get broken. It is worth reminding yourself of this now, before the next wave of whirlwind corporate romances arrives.