Comment, analysis and other offerings from Tuesday’s FT,
Niall Ferguson: A runaway deficit may soon test Obama’s luck
Six months in, ‘Felix the Prez’ still has the look of a lucky, two-term president. But that could change if voters become even more disenchanted with the legislative branch and start blaming the president for the looming fiscal train-wreck, warns FT contributing editor Ferguson.
Insight: Mohamed El-Erian – Emerging markets and decoupling chains
Remember Statler and Waldorf, the Muppet characters that heckled performers from their balcony seats?, asks Mohamed El-Erian, chief executive and co-chief investment officer of Pimco and author of ‘When Markets Collide’. The duo talk themselves into a full circle, praising a performance only to pan it before praising it again. This roundtrip is reminiscent of the decoupling versus recoupling debate and risks clouding issues that have consequences for both investors and policymakers.
Short View: Look to the Vix
Nearly one year to the day after BNP Paribas froze access to a large money market fund and the ECB responded by flooding the market with cash, if the market believes the banking system is almost out of the woods, look at the Vix and at high-grade credit spreads for early warning of more trouble ahead, says John Authers.
Lex on US consumer spending
Pop the champagne! There is a good chance that the US recession ended in June, says Capital Economics. True, the signposts pointing most prominently to recovery — the ISM survey of sentiment and the stock market — are confidence based, suggesting a circularity to the sense of optimism. But it seems safe to assume that the worst has passed. Drink your bubbly quickly though, because contemplating the nature of the recovery may spoil the mood.
Dragonbeat blog – China’s economic policy, a ‘Great Wall’ or Capuan complacency?
China’s ability to maintain economic growth of around 8 per cent despite the global shock has surprised many. But this ability has nothing to do with systemic advantages, a distinct “China model” of growth, or skill in macroeconomic management, as some in Beijing would like to think, writes Arthur Kroeber. They should look at ancient Roman history to realise that sometimes complacency is more destructive than calamity.
Fireflies and seminars: Courting Japan’s greying investors
Japanese banks are going to great lengths to woo Japan’s ever-growing community of elderly depositors, reports Michiyo Nakamoto. Afterall, the average savings in 2008 of those in their seventies was Y24.15m ($246,000) or more than triple the average savings of those in their thirties, at Y6.35m.
Letters to the Editor:
- Zero interest in leading US recovery
- Let boards know who they work for
- SEC should fine culpable individuals, not shareholders