Comment, analysis and other offerings from Tuesday’s FT,
Gideon Rachman: Europe is having a midlife crisis
For the past few months, the words “Europe” and “crisis” have been inseparable companions, the FT columnist writes. First, there was the threat of sovereign debt crises across the European Union. Now there is the spectacle of the most famous footballing nations in Europe floundering at the World Cup. While the optimists hope that hard times will shock Europe out of its midlife crisis, the omens do not look promising.
David Rosenberg: Predictions of a bond market bubble are wrong
I find it truly amazing to see how many pundits refer to the bond market as if it is in some sort of a bubble, Rosenberg, chief economist at Gluskin Sheff, argues. How can a security whose price is constantly projected to decline by the economics community be in a bubble? How can any asset class be in a bubble where the capital is guaranteed and which pays out a coupon twice a year? It makes no sense.
Philip Stephens: A Budget that crowns the governor King
Life is being kind to Mervyn King. Last week the governor of the Bank of England was handed untrammelled authority to oversee Britain’s banks and financial services industry. This week Mr King will even deliver a deficit-busting Budget to repair the nation’s public finances — although I exaggerate, writes the FT columnist. While the Chancellor George Osborne will give today’s Budget, none has been as influential as Mr King in pressing the argument for austerity.
Michael Skapinker: Entrepreneurs need to know when to let go
Easyjet’s Stelios Haji-Ioannou, who is suing his own company in a dispute over services offered by the airline, appears to have a bad case of “founder’s disease” – a reluctance to let go, writes the FT’s Skapinker. Sir Stelios could learn from more seasoned business builders, such as Rupert Murdoch or Richard Branson. He should either buy the rest of EasyJet and run it his way or sell out and leave its managers to run it.
Lex on container shipping
Few industries were as storm-tossed as container shipping. In the depths of the downturn last year, managers wondered if they would witness a return to profit within five years. Now some are looking at break-even this quarter or the next, Lex observes. But what is most striking is that freight rates have recovered without their usual American underpinnings — it is Asia that is pushing the industry forward.
Short View: Beijing’s baby step
China’s problem is its vast holding of Treasury bonds, which it cannot sell without spooking the market, writes the FT’s James Mackintosh. At the weekend, Beijing took what could be a baby step towards ensuring its problem does not get worse: it said it would “enhance exchange rate flexibility”. But while a stronger renminbi should mean a smaller current account surplus and lesser need to buy Treasuries, history suggests the opposite.