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How should investors and policymakers react to this week’s sudden market volatility? Our columnists have plenty of advice.
Gillian Tett uses this week’s column to illustrate how “wild gyrations” in US stocks, after last year’s “supernatural calm”, created victims among small-time traders. It’s a potent warning sign of bigger risks ahead, she writes. Of these, Gillian sees the greatest danger springing from high corporate leverage fuelled by cheap money, with rates starting to creep back up again. It will not be easy to unwind portfolios built on an assumption that rates would stay low. So expect more shocks.
Tim Harford, meanwhile, suggests that the wisest investors are those who make decisions at their leisure, unswayed by what he calls “the frenetic, fast-twitch world” of the markets. Wise and lazy investors, heading for greater gains and a lot less stress, should pick as their mascot the sloth, a creature that has evolved to be slow so that it remains unharmed by the toxic matter it ingests in the jungle.
Italy’s election stars are looking dim: Bill Emmott writes that Beppe Grillo’s Five Star Movement is struggling to resemble a government-in-waiting. Since the last general election five years ago, Matteo Renzi’s star climbed high then fell to earth. With just four weeks to polling day, Five Star still lacks a credible central figure to offer the electorate real change.
From the stiff upper lip to quivering rage: Martin Wolf explores the origins and implications of the UK’s bitter divisions over Brexit. He argues that reconciliation is highly unlikely given the mutual contempt and evenly matched two sides of the ongoing fight between Leave and Remain. What on earth has happened to the phlegmatic Brits?
Korean goodwill must not melt with the Olympic snow: Ban Ki-moon writes for the FT with an appeal for North and South Korea to make the most of the outbreak of reconciliation during the winter games. He hopes for a genuine dialogue in March.
Best of the rest
In identifying what distinguishes us from robots, we are increasingly led to rely on the idea of human capital — Sophie Prunier-Poulmaire in Le Monde (in French)
A secret plot to stop Brexit or an antisemitic dog whistle? — Rafael Behr in The Guardian
Apocalypse Not — Bret Stephens in The New York Times
Merkel’s coalition giveaways will be her downfall — Thomas Sigmund in Handelsblatt
What you’ve been saying
“Allowing the accumulation of intra-familial capital is anti-meritocratic and disjoints the playing field, putting children from uneducated families with few resources at a huge social and financial disadvantage. The statistical likelihood of financial success for those children is extremely low — what happened to the American dream?”
Florian Rittmeyer writes:
“Maybe every member of the elite should have a picture in their office of the June Rebellion of 1832 in Paris. Belonging to the elite is no gift for self-fulfillment, but rather a temporary mandate, and members should ostracise those who abuse that mandate. If we live in a meritocracy, then ascending to the elite bears the risk of falling. Those willing to attempt the climb should keep that in mind.”
Allow Poles to discuss uncomfortable truths and place them in context — Letter from Peter Muchlinski in response to Jan Gross’ column:
“The wounds felt by Polish Gentile and Polish Jew alike, arising from the moral collapse created by the Nazi occupation of Poland, have not yet been healed. The healing process can succeed through open, honest and informed debate undertaken by Polish society as a whole, assisted by the highest quality research and analysis, and inclusive of all people of Polish origin, wherever they live. The Polish government has little or no role in that process save as a neutral facilitator of debate. It certainly must not take sides.”
Boris Johnson and pals — the Brexit dream team is back
Past betrayals are put aside and a plan is hatched to save the nation from its foes
Instant Insight: Don’t blame George Soros for the UK’s second thoughts on Brexit
Remain-backing financier is an easy but inexact target for unhappy leavers
Brexit has replaced the UK’s stiff upper lip with quivering rage
When divisions are this deep, nobody is considered neutral
The corporate debt problem refuses to recede
Non-financial leverage is higher today than it was before the crisis
Free Lunch: India’s mirror to the world
What its economic challenges tell us about globalisation
Five Star struggles to be Italy’s agent of change
The party lacks any cohesive team that looks like a credible government in waiting
FT View: Where Brexit hits hard, a customs union will help
The regions of the UK that voted to leave have the most to lose
FT View: South Africans deserve their day of reckoning
Edging Jacob Zuma out will be delicate, but he should not be let off the hook
The Big Read
The Big Read: Canada’s housing market flirts with disaster
A cocktail of loose lending, overseas cash and mounting household debt has triggered concern of an overheating market