A trader blows a bubble with gum on the floor of the New York Stock Exchange (NYSE) in New York, U.S., on Friday, Aug. 18, 2017. Stocks were mixed and the S&P 500 Index turned higher as investors digested the political upheaval in the U.S. and the latest terrorist attack in Europe. Photographer: Michael Nagle/Bloomberg
© Bloomberg

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From property to stocks to bonds — wherever you care to look, assets appear expensive by historical standards. Cheap money has spurred investor activity, driving prices up and returns down. This has prompted increasing speculation that we may be heading for a crash.

Not so, says Martin Wolf. In his column, he argues that while some particular assets in some particular countries — equities in the US, property in the UK — are very expensive, even touching levels that compare with those on the eve of the great crashes in history, the picture is not a uniform one. Also, he adds, one of the drivers of rising prices is low real long-term interest rates, and they look set to be with us for quite a while yet. Investors should brace themselves for an extended period of modest returns.

Omnishambles week: Even by recent standards, this has been an chaotic week in UK politics: a cabinet minister forced to resign, questions over Theresa May’s future as prime minister and ongoing deadlock in the Brexit negotiations. Yet David Goodhart writes in an opinion piece that beyond the scandal and wrangles gripping Westminster right now the basic health of the political system is not in doubt.

Kingdom crackdown: The dramatic crackdown in Saudi Arabia, which has seen scores of the country’s princes and business elite detained, continues to command headlines. As investors take fright and diplomats worry about escalating tensions in the region, Simeon Kerr analyses whether the ambitious crown prince Mohammed bin Salman has bitten off more than he can chew with his bid to transform the kingdom.

Lost appetite: Once a pioneer in gourmet ready-meals and other delights for middle class dinner tables across the country, Marks and Spencer’s fabled food division has fallen out of favour with middle class Britain. Wendell Steavenson asks why we lost our taste for M&S and what that tells us about our changing food preferences.

Janan Ganesh on the perils of Britain’s centralised politics

Brooke Masters on Tesla’s failure to master the details of car manufacturing

Izabella Kaminska on the environmental costs of bitcoin

John Gapper on Alibaba and China’s consumer revolution

Anjana Ahuja on what cosmic dust tells us about the origins of life

What you’ve been saying

EU and US vehicle safety standards are not equivalent — letter from Antonio Avenoso in Brussels

“For a country such as the UK that has been a leader in crash testing and vehicle design and has been at the forefront of the setting up of initiatives such as Euro NCAP, the consumer vehicle safety ratings organisation, there would be a bitter irony to accepting US standards that it has had no say on developing. So much for taking back control.”

Comment from Evidence-based on Sebastian Payne’s instant insight, Theresa May keeps the Brexit balance but stops short of renewal

“Time will tell whether she is a good minister, or not, in the specific role. But isn’t it tellingly pathetic that the main criteria for candidate appointment seemed to be keeping a balance between the Remain and Brexit supporters within the Cabinet! May is like some sort of referee, keeping an uneasy truce, rather than doing her duty to lead this country through probably its biggest ever peacetime challenges and risks.”

Switzerland best regarded as semi-direct democracy — letter from C H Church in Kent

“Sir, While not disagreeing with those who defend the virtues of Swiss direct democracy, I think it should also be pointed out that it works as well as it does for reasons that are rarely appreciated. One is the fact that there is total separation between direct democracy and government formation. The Federal Council, or government, is elected by parliament every four years. A defeat at a votation, or popular vote, does not therefore change the government. Moreover, ministers, who come from an assembly of parties, see it as their duty to implement the popular decision, whether or not they like it.”

Today’s opinion

FT Alphaville: Morgan Stanley says we’re reaching peak Airbnb

Nancy Friday, author and sexual pioneer, 1933-2017
Writer who stripped bare female fantasies and persuaded women to talk about sex

Person in the News: David Boies: the super-lawyer who fell to earth
The risk-taking star of the Manhattan legal scene has been ensnared in the Weinstein scandal

Politicians make an easy target from the touchline
In football as in politics, you need to position yourself before you can really mess up

We’re in bubble territory again, but this time might be different
Returns for investors are modest and could be negative over lengthy periods

Free Lunch: How I learnt to love current account deficits
What many see as a sign of dysfunction should in many cases be welcomed

How the sensible centre of British politics can raise the spirits
Beyond scandals and Brexit wrangles, the health of the system is not in doubt

Paradise Papers reveal a turning tide on tax avoidance
It’s not just evasion that now appears socially unacceptable

Undercover Economist: Nudging can also be used for dark purposes
The path of least resistance can easily direct people to do the wrong thing

FT View

FT View: Uber suffers a setback to its super-flexible model
An adverse court ruling has wider implications for the gig economy

FT View: Stranger than paradise: the truth about tax
The worst abuses of the system are not found on tiny islands

The Big Read

The Big Read: Greed and intrigue grip Saudi Arabia
Is Crown Prince Mohammed bin Salman overplaying his hand with anti-graft purge?

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