Comment, analysis and other offerings from Friday’s FT,
Philip Stephens: US-Japan, an easy marriage becomes a ménage à trois
Tokyo these days is full of Americans with furrowed brows. US pre-eminence in Asia is being challenged by the rise of China. Barack Obama’s administration is searching for a grand strategy to safeguard its place as the region’s pivotal power. Now, Japan is challenging the terms of its long-standing security alliance with Washington.
Gillian Tett: Bankers will follow the money
There has been a flurry of furious warnings that London-based bankers will leave the City following Wednesday’s tax bonus news. I suspect this row misses the bigger point. There are good reasons to think that London’s role in global finance is being undermined. But that reflects more fundamental, structural factors – that go well beyond the bonus news.
Samuel Brittan: Business cycles
The argument that regular business cycles exist in the eyes of the beholder is not just an esoteric academic argument. A simple look at the numbers cannot establish or disprove regular cyclical movements. A crude inspection favours irregular fluctuations. One can hardly expect strict regularity in a world influenced by changes in sentiment and unpredictable political and technological developments. The conclusion: do not rationalise give-away fiscal policies in normal times by attempted cyclical corrections.
Philip Augar: Why it’s not the end of the City
The banking crisis has not shifted core beliefs in Westminster, writes author Philip Augar, but the City’s reaction to the bonus pool tax shows that it has not shifted attitudes in the Square Mile either.
Editorial comment: Debtors in Dublin
The Irish have had little luck of late. The national budget for 2010, unveiled this week by Brian Lenihan, the finance minister, is brutal. Masochistic, even. But, sadly, it is also necessary, and not tough enough. According to the IMF, Ireland faces stresses greater than those of “any other advanced economy”. Mr Lenihan will need to tighten further to appease markets. This will make his countrymen wince – but the alternatives are unthinkable. Bond market investors have put the debtors in Dublin on notice.
Lex on Citi
Don’t worry when politicians and bankers are at each other’s throats. Agonise more when they agree. If Citigroup can follow Bank of America in tapping shareholders for cash to repay the government’s remaining Tarp investment in the bank, the Treasury would add funds to its coffers and Citi would begin to wriggle free of restrictions on pay. In the near-term, though, Citi faces only a partial escape from government clutches. While other banks’ dilutive Tarp repayments have earned a share price pop, here a lukewarm reaction would be the right one.
EnergySource blog: Copenhagen catch-up – Soros’ $100bn plan
Thursday’s main event at the UN climate summit in Copenhagen was a proposal from billionaire financier George Soros that would give poor countries access to a $100bn loan to tackle the effects of climate change. On the face of it, this proposal could break the impasse between rich and poor countries on financing. But rich countries have not agreed anything like that sum, and the talks are stalled on this issue.
TradingRoom video: The growth of OTC derivatives
Mark Yallop of Icap discusses the growth of over-the-counter products and the push for greater transparency.
Business Life: 20 Questions for Donald Trump
“The Donald” is now as famous for the business reality TV programme The Apprentice as for his property empire. The entrepreneur learnt his deal-making skills from his father, Fred, a New York real estate developer. The 63-year-old almost lost his fortune in the 1990 property crash before bouncing back, extending his empire into casinos and resorts. Here he answers 20 questions from the FT.