Comment, analysis and other offerings from Friday’s FT,
News analysis: Bankers watch as Sweden goes negative
Last month, the Swedish Riksbank entered uncharted territory when it became the world’s first central bank to introduce negative interest rates on bank deposits, write the FT’s Andrew Ward and David Oakley. Now, as central bankers contemplate exit strategies after their extraordinary measures of the past two two years, they will be monitoring the Swedish experiment closely.
Gillian Tett: Could a ‘Tobin tax’ reshape financial sector DNA?
Some three decades ago, James Tobin, the economist, proposed a tax on financial transactions to deter short-term currency speculation. Few policymakers have since dared air that idea. But Adair Turner, chairman of the FSA, has launched a new debate about the old “Tobin” idea. He is to be applauded for at least trying to think the unthinkable again and move away from a crude reliance on creeds.
We should put sand in the wheels of the market
Before the current credit crunch, the financial sector was the only industry more powerful than the defence industry, writes Persaud, chairman of Intelligent Capital, chairman of the Warwick Commission and a former banker . Like the defence industry it has been able to frame the intellectual and regulatory debate in its favour. The classic economists’ solution to all this is a tax. Setting the right level of this tax so as not to damage liquidity will be hard, but probably not as hard as being one of the first regulators to openly discuss it.
Lex on inflation
Why it is that investors react to so-called headline numbers is one of the many mysteries of finance, notes Lex. From company results to retail sales figures, the truth hidden in the detail is often ignored. It is the headline numbers that always make the news. And because headline inflation affects expectations, a close eye should be kept on the last few months of this year.
The Short View: The weather channel
In the agricultural commodities market, nothing explains better the influence of weather than the difference between the price of tropical produce such as sugar and cocoa and crops such as wheat and corn, says Javier Blas. While sugar and cocoa hover at multi-decade highs, the price of wheat and corn is falling to its lowest since 2007. For agri commodities, weather research is now as important as research on consumption trends, meaning the weathermen are going to remain busy – and in demand on Wall Street.
View of the Day: Russia, is the worst over?
There is a growing sense that the worst is over for Russia – but problems lie ahead, says Paul Biszko, senior emerging markets strategist at RBC Capital Markets. For one thing, Russia remains highly sensitive to recurring commodity price shocks, and its willingness and ability to reduce this vulnerability is questionable.
View from the top, FT video: Paul Jacobs of Qualcomm
Jacobs, CEO and chairman of Qualcomm, discusses recent trends in cell phone technology, smart books and investing in tech-related R&D, as well as the convergence between telecoms and the computing world.