Comment, analysis and other picks from Wednesday’s FT,
Martin Wolf: Why the eurozone will survive 
On December 16 2010, European heads of government solemnly declared they were “ready to do whatever is required” to protect the eurozone, writes the FT columnist. Words are cheap. Sceptics may wonder whether to take them seriously. In this case, they should. The eurozone is highly likely to survive, albeit not without further turbulence. I would advance three arguments: first, the eurozone is backed by a profound political commitment; second, the long-term interests of participating countries are behind it; and, finally, the members can afford it. In short, the eurozone has the will and the wherewithal to keep the euro experiment afloat.
The Short View: Taking stock on bull market
The second anniversary of the equity market bottom is a good time to take stock, writes the FT’s investment editor James Mackintosh. Two years ago today the US’s S&P 500 closed at 676.5, its 2009 low, amid unrelieved gloom. In hindsight that was the moment to buy. But after returns of 96 per cent, the question is whether this bull market still has legs.
Lex: Carl Icahn, but won’t
The cliché hedge fund manager is an introverted numbers-geek staring at multiple screens, with just one book, Ayn Rand’s Atlas Shrugged, perched on the shelves, says Lex. Now it seems as if the industry’s obsession with the 1957 novel extends beyond nomenclature (Anaconda Capital, Rearden Capital, etc). Mirroring the plot, hedge fund bosses are disappearing off the map. The latest is Carl Icahn, who has written to outside investors saying he has decided to give them their money back by the end of June.
Joseph Nye: America should not prosecute Julian Assange
One-third of the world’s population is now online. As we are seeing in the Middle East, this fact is changing global politics, writes the former US assistant secretary of defense under Bill Clinton and author of ‘The Future of Power’. An information revolution is shifting power away from states. US secretary of state Hillary Clinton has said she backs the “freedom to connect” for people everywhere, and calls on others in the Middle East and Asia to follow. But if she believes this, why is the US trying to prosecute WikiLeaks founder Julian Assange?
John Plender: US-China affair will end in mutual pain
In spite of Chinese rhetoric about wanting to diversify its official reserves away from the dollar, recently revised figures from the US Treasury suggest that the world’s largest creditor country is finding the task pretty much on a par with Sisyphus’s efforts to push the boulder uphill, writes the FT columnist. As long as China persists in subsidising exports via an exchange rate pegged to the dollar it is condemned to rack up further trade surpluses that suck in yet more dollars. And, given the difficulty of acquiring big dollar equity investments, there is not much alternative to buying US government IOUs in the world’s most liquid bond market.
Faith Birol and Nicholas Stern: The climate door is closing
There were worrying signs at the World Economic Forum in January that policymakers are becoming dangerously complacent about the scale of our climate change challenge, write Birol, chief economist at the International Energy Agency, and Stern, chair of the Grantham Research Institute on Climate Change at the LSE. Now, as political unrest, economic uncertainty and soaring oil prices dominate the news, there is a risk of further distraction from action required to meet climate change goals. We must not delude ourselves. Existing commitments for emissions reductions by 2020 do represent major action. But even if implemented, they are collectively not enough to put the world on a path that would give us even a 50-50 chance of avoiding a warming of 2°C above 19th century temperatures.
John Kay: Britain’s call for ‘nostalgia’ banking
The recent problems of British home lenders have been much more severe than those of 20 years ago, but not because the economic fundamentals have deteriorated, writes the author and FT columnist. What has changed is the structure and behaviour of the financial services industry, which is far less robust to external shocks. Although Northern Rock and Bradford & Bingley did undertake poor quality lending, no large institution failed due to losses on UK residential mortgages. They failed either because they pursued complex – and doomed – funding structures or because of losses outside their mainstream activities, or a combination of these.
Beyond brics: Asia’s wafer-thin margins
Never mind the quality. Just feel the width, writes BeyondBrics’ Stefan Wagstyl. That’s the message from a Citigroup report on companies in Asian emerging markets. The authors claim investors focus too much on these companies’ profit margins – and worry about the pressure from rising commodity prices. Instead, they should look at the track record – and see that over the years returns to shareholders have had little to do with margins and lots to do with volume growth.
Analysis: Big pharma’s sales practices
Some recent cases against big pharmaceutical companies over sales and promotional practices highlight a growing backlash against such aggressive marketing tactics, which are leading to significant changes in the relationship between doctors and drug companies, writes the FT’s pharmaceutical correspondent Andrew Jack. But even as pharmaceuticals executives argue that such problems belong to the past and were always exaggerated, they are bracing for both intensifying penalties and calls for further reform.