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The only thing to fear is the lack of fear itself. So said Benjamin Graham, the investment guru known as Mr Market who has inspired Warren Buffett among others. His point was that complacency can be a dangerous thing and over-optimism can result in excessive risk taking.

Martin Wolf argues in his column that the return of fear and some uncertainty to markets is therefore a good thing. Markets did experience a bout of turbulence last week, yet the real changes were relatively small. Still Martin thinks it could get worse for four reasons. The current environment of expensive equities and bonds, low interest rates, low inflation and low yields is remarkable. It “takes no imagination”, he says, to visualise yields (long-term interest rates) “jumping massively”.

Second, the financial system remains fragile while indebtedness continues to rise. Largely thanks to the crisis, government debt has risen from 58 per cent of world output to 87 per cent. Third, a global economic recovery is under way — putting a rise in wages and inflation on the cards. And that could easily lead to fiscal tightening. Finally, we cannot forget the great global uncertainty that is Donald Trump. Betting against what the US president will, or will not do, is unwise. He could still easily destabilise expansion of the markets.

Melania Trump, enigma: Courtney Weaver looks at the curious case of America’s First Lady and asks why her profile is so low and the relationship with her husband so discrete. Is she disinterested in public life? Or does she prefer to focus on her family?

The dark side of Big Tech: Roger McNamee, an early investor in Facebook and Google, argues that more needs to be done to tackle the democratic and economic impact of technology. Although these firms claim to understand the impact they are having on our lives, they are unwilling to do much about it.

Alarm bells for British industry: Peggy Hollinger says the May government is not focused on what needs to be done now to protect the UK’s small- and medium-sized manufacturers. The continued indecision is harming long-term investment decisions and storing up more problems.

Best of the rest

Hard left are just as bad as Marie Antoinette — Rachel Sylvester in The Times

Trump’s Big Public Works Dig — Wall Street Journal editorial board

The Oxfam scandal should not lead us into the blunder of cutting aid — William Hague in The Telegraph

Inside the Two Years that Shook Facebook — and the World — Wired magazine

Here’s what we’re all missing about the polls — Stephen Bush in the New Statesman

What you’ve been saying

Five Star and En Marche are not even close” — letter from Franco Debenedetti:

It wants to repeal the Fornero pension reform, which in 2011 saved Italy, then on the brink of bankruptcy, and reduce the age of retirement; to abolish mandatory vaccination of children; to allow the deficit to rise above 3 per cent of gross domestic product and to abolish commitment to a balanced budget (a constitutional mandate which has never been obeyed). On public debt its “theory” is that it is a macroeconomic problem only because it is denominated in euros: it therefore proposes to redenominate it in lire, placing the Bank of Italy once more under the control of the Treasury, obliging it to buy the debt that would not be financed by the market.

Comment from comfychair on “Germany gets a taste of grassroots revolt”:

This CDU and SDP coalition is Germany trying to hold perfectly still, lest it fall off the balance bar of German’s advantageous situation. Great Euro rates, hegemony within the EU, rising incomes. Don’t upset the balance! The problem is that clouds are gathering and I would include Brexit in this (vis a vis Germany) in forcing a more obvious leadership role within the EU. You have to adapt to stay in the lead, not just pretend that the federal system makes central government unnecessary.

The UK might look like it is convulsed with self-doubt, during Brexit, but we are holding our debate: out in the world, with every opportunity now open, what sort of trading country do we wish to be? By contrast Germany, stuck in the EU, with no-one asking questions except extremists.

Treasury was right about negative impact of vote” — letter from Christopher Huhne:

True, the Treasury’s pre-referendum forecasts made the common mistake of assuming that economic changes would happen rapidly, but it at least correctly pointed out that the impact of the Brexit vote would be negative, and therefore successfully identified the sign of the change.

By contrast, “Economists for Brexit” produced a report, “The economy after Brexit” (April 2016), which predicted a modest 3.8 per cent fall in sterling between 2015 and 2017 when sterling in fact fell by more than 15 per cent; no rise in inflation at 1.6 per cent in 2017 when in fact the fall in sterling and rise in import prices pushed inflation up to 2.7 per cent for the year (and 3 per cent in December); no slowing of wage growth at 2.9 per cent in 2017 when in fact average earnings slowed to 2.2 per cent, intensifying the squeeze on real pay; a speed-up of economic growth to 2.7 per cent in 2017 when in fact the UK grew by 1.7 per cent and the end-year figures show the slowest growth in an accelerating G7.

Today’s opinion

FT Alphaville: Someone is wrong on the internet, modern servitude edition

The Big Read: Activist investors: the next generation flexes its muscles
Traditionally seen as aggressive, a new wave of players is taking a different approach to getting a seat on the board

City universities are the new global brands
The elite education industry is transforming like investment banking and football

North Korea’s cheerleaders and the art of political distraction
Kim Jong Un tops the podium for best propaganda at this year’s Winter Olympics

FT View: Trump’s infrastructure plan is crumbling away
Exhorting states to do more will not fix America’s roads and bridges

FT View: London’s transport is vital to the capital’s future
The city cannot ignore fewer passengers and a £1bn budget deficit

The enigma that is Melania Trump
In a White House filled with romance and rivalry, few storylines are as tantalising

A bit of fear is good for markets
The jump in volatility may be disturbing but it should help puncture some of the previous complacency

How to drag Big Tech away from the dark side
Technology companies want to regulate themselves, but their record is dreadful

FT View

FT View: Trump’s infrastructure plan is crumbling away
Exhorting states to do more will not fix America’s roads and bridges

FT View: London’s transport is vital to the capital’s future
The city cannot ignore fewer passengers and a £1bn budget deficit

The Big Read

The Big Read: Once-repressive Uzbekistan begins a post-Karimov opening
More than a year after the dictator’s death, Tashkent may be coming in from the cold

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