Comment, analysis and other offerings from Monday’s FT,
Gillian Tett: Forget globalisation – localisation is back in fashion
In some offices in the US Treasury, there are framed posters exhorting the country’s population to buy US government bonds as part of their patriotic duty. The patriotic theme may become relevant today; in coming years, western governments are set to issue a tsunami of government debt and officials are now wondering whether it’s time to launch a quasi-patriotic debt-buying campaign.
Analysis: Consumer debt, how the cards are cut
As America’s banks suffer record defaults on loans, attention is turning to the UK, where households are even more highly geared, write Patrick Jenkins, Francesco Guerrera and Saskia Scholtes.
Lex: Liquidity and stocks
The economic concept of liquidity preference is a tricky one. Household demand for liquid assets is a function of interest rates – the lower the yield is on other investments, the happier you are being cashed up. But liquidity is also sought in times of panic, say, and it comes in pretty handy for making transactions.
Lina Saigol: Private equity cosies up to trade bidders
Private equity is now in the throes of a massive love-in with trade bidders. During the debt boom, buy-out funds took pleasure in using leverage to outbid strategic players for the best assets. Now, under pressure to do deals without cheap credit, private equity has little choice but to play nice with its arch-rivals. But without “prenup” agreements, these trendy new unions can quickly become shams.
Wolfgang Münchau: No easy way out for central banks
Last week, in his testimony to congress, Fed chairman Ben Bernanke presented hais “exit strategy” – a toolkit of policies to control inflation once the economy starts to recover. But simply possessing such tools does not make an exit strategy. For that, Mr Bernanke must define the circumstances that would trigger the use of such tools. But it’s doubtful that he – or his counterparts in Europe – are in a position to provide a credible definition at this point.
Tony Jackson: Corporate fundraising looks increasingly desperate
If this credit megacycle has taught us anything, it is the sovereign value of equity. So companies are crying out for more. Will they get it? I do not know the answer but the issue is one of the most important facing the corporate sector worldwide.