Comment, analysis and other offerings from Tuesday’s FT,
Richard Dobbs & Michael Spence: The era of cheap capital draws to a close
Even as brewing currency wars threaten full-blown trade conflicts, we must remember one fact: this moment will not last. The 30-year era of progressively cheaper capital is nearing an end. The global economy will soon have to cope with too little capital, not too much, say Dobbs, director of the McKinsey Global Institute and Spence, a recipient of the 2001 Nobel Memorial Prize in Economic Sciences.
Market Insight: Why investors have adopted teenage temperaments
Meet an investor these days and you might hear some rather striking views on their outlook for markets, writes the FT’s Richard Milne. Most are bullish for 2011 but bearish thereafter. The resulting violent mood swings among investors makes them seem at times like the stereotypical hormonal teenager. Euphoria can give way to introspection and sulking at a moment’s notice.
Philip Stephens: A pay-up and shut-up deal for the banks
It is time to make Britain’s banks an offer they cannot refuse, argues the FT columnist. Politicians, regulators and the media promise to shut up about seven-figure bonuses and opulent lifestyles; in return the banks agree to reimburse taxpayers for the subsidy they receive from the public purse.
Gavyn Davies’ blog: A month in global macro – emerging markets underperform
In this regular series of weekend blogs on the major events in the world of global macro, the last blog of the month will reflect on the main themes of the whole month, not just the latest week, announces the blogging economist. In January, rising inflation risks in the emerging markets dominated market behaviour and worries about unrest in the Middle East, and the wider impact of higher agricultural prices, replaced the European sovereign debt crisis as the main concern for global markets.
Lex on Ryanair/Easyjet
Ryanair and EasyJet might seem much of a muchness to Europe’s travellers, but to investors they are a class apart, notes Lex. Shares in Ryanair, which is the more profitable and reliable, usually trade at a deserved premium to those of its smaller rival.
Andrew Hill: Never waste the lessons of a recession
It’s the dilemma of every successful slimmer: pounds lighter but faint with hunger, should you tiptoe towards the inviting buffet, or walk away? Since the Lehman Brothers collapse launched a thousand corporate belt-tightening memos, managers have had few options, says the FT columnist. For many companies, particularly those that binged on debt before the crisis, the credit crunch and subsequent slump in global demand simply removed temptation.