Comment, analysis and other offerings from Friday’s FT,
Philip Stephens: Three years on, markets are masters again
It has been three years since the roof started to fall in, writes the FT’s Stephens. And only a year and a bit since the more faint-hearted stocked their cellars with bottled water and canned food lest the financial crash presage a descent into anarchy. So what has happened since? Simple: not much. The markets (and the bankers) still rule.
Money Supply: Bullard, the hawkish radical
For an inflation hawk, James Bullard, president of the St Louis Fed, has some radical views on what to do if the economy weakens and the Fed decides to ease policy further, writes the FT’s Robin Harding. He argues in a new research paper that the Fed should use asset purchases if it has to ease further. It could well be seen, rightly, as making QE and asset purchases a somewhat more likely option if the Fed does decide to ease, and makes any promise to keep rates at zero for a fixed period of time even less likely than it already was.
Sebastian Mallaby: Forget Jesus and ask the hedge funds
The US stimulus debate features two warring camps. The Obama administration insists that a failure to stimulate will open the door to a double-dip recession, writes Mallaby, a senior fellow at the Council on Foreign Relations and author of More Money Than God: Hedge Funds and the Making of a New Elite. Its foes retort that continued stimulus could scare investors into dumping US Treasuries. Faced with finely balanced dilemmas, some Americans are wont to ask: “What would Jesus do?” In this case a variant may help: “What would hedge funds do?”
Samuel Brittan: Take central banks down a notch
Following the Peter Principle, we should expect people to be promoted to the level of their incompetence, writes Sir Samuel. It may be unfair, but that thought crossed my mind in a week in which the Bank of England has been given unprecedented responsibilities.
Lex: Metro Bank
Hailed as the UK’s first new high street bank in more than 100 years, Metro Bank opened its first branch in London on Thursday. Its debut is well timed. More than a third of UK bank customers say they would switch accounts, for a compelling alternative. The trouble is, in reality fewer than a tenth do. Can Metro overcome such inertia?
Lombard: Full house – PartyGaming deals itself two bosses
Shareholders in UK-listed PartyGaming and Bwin of Austria have forsaken their traditional poker faces to celebrate the long-awaited announcement of a deal. Shares in both online gaming companies jumped on Thursday. There are many reasons to be pleased at the prospect, writes Lombard’s Andrew Hill. That said, like all alleged “mergers of equals”, this one should be treated with a little caution.
FT podcast: World weekly
This week FT correspondents assess whether David Cameron’s trip to India to build business and commerce relationships has been a success; whether Paul Kagame is likely to hold on to his role as president in the upcoming elections in Rwanda; what the sentencing of former Khmer Rouge prison chief Duch means for the people of Cambodia; and look at the disappearing marshlands of Louisiana.
BeyondBrics: A true Mexican soap opera
Grupo Televisa, the world’s largest Spanish-speaking media company, is in the business of producing “telenovelas”, the quintessentially Latin soaps that in recent years have become a formidable export, writes the FT’s Mexico correspondent Adam Thompson. But in the last few months, it found itself starring in a real-life one.
Analysis: Greece, a marathon to sprint
Economic reforms demanded of Greece in return for a €110bn loan to prevent sovereign default are on track, offering the chance for rapid economic progress, write the FT’s David Gardner andKerin Hope. But some daunting hurdles remain to be cleared.
Markets Insight: Developing nations need to ‘inhale’ capital
For investors with a long-term horizon, large-cap multinationals leveraged to the growth of developing nations are an ideal way to gain emerging market exposure, says Quinlan, chief market strategist at US Trust Private Wealth Management, Bank of America.