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In economically turbulent times, should investors look for certainty and stability in the big countries, big regions and big companies? Or does safety lie elsewhere?

Rana Foroohar argues in her latest column that we have reached what might be called ‘Peak Big’ and when facing moments of great change, chaos and conflict, small can be safer. Take Big Tech for example: regulators are increasingly hostile towards the large US tech firms and are likely to take action soon. The large US manufacturing firms (Boeing and 3M for example) have also suffered a dip in share prices lately.

An impending trade war also hints at the advantages of going small. If the US and China are about to enter a tit-for-tat with trade barriers, it is the smaller Southeast Asian countries that will benefit. As Rana puts it, this could be a moment to bet on David, as Goliath might just be overvalued.

Solving spam:
Pilita Clark offers a radical solution to the blight of unwanted emails: shifting responsibility onto the sender and charging for messages. Technically complex, but it might be the only way to lessen those annoying piles of junk mail.

Warning lights in Italy:
Wolfgang Münchau reckons Italy is still the most serious threat to eurozone stability and its messy political situation is exacerbating the lack of impetus for economic reform. Italy is too big to save and too big to fail, he argues, and the markets are not pricing in the trouble that may lie ahead.

Options for Iran:
YJ Fischer argues that the appointments of John Bolton and Mike Pompeo bring two Iran hawks into Donald Trump’s inner circle. But if the US really wants to control the Rouhani regime, it should strengthen economic ties — thereby buying leverage over Tehran.

Best of the rest

Politicians can’t control the digital giants with rules drawn up for the analogue era — Andrew Rawnsley in The Observer

Corbyn has won the battle for the left — Nick Cohen in The Spectator

Mark Zuckerberg is watching you, out of greed not fear — Niall Ferguson in The Times

Bolt the Oval Against Bolton — Maureen Down in The New York Times

The U.K. Is Doing Just Fine, Thanks — Fraser Nelson in The Wall Street Journal

What you’ve been saying

Agreement on Ireland and customs union can’t be left until transition period— letter from David R. Cameron

There is one, and only one, way to create a “common regulatory area” that would ensure an open border and the free movement of goods between the EU and Northern Ireland while also maintaining the full integrity of Northern Ireland in the UK internal market — by remaining in the EU customs union. It would no doubt be easier, in terms of internal party politics, for the government to wait until it has already exited the EU and is in the transition period to agree to remain in the customs union. But it can’t wait until then for one simple reason: if it doesn’t address the issue with a legally operative version of the “backstop” in the withdrawal agreement, there won’t be a withdrawal agreement and a transition period.

Comment from BHC on Donald Trump cannot change China without help

China would be stupid to retaliate against the tariff; she should address the over capacity and distortion caused by government subsidies. It would help private enterprise to thrive, and address grievances trading partners have complained about. If China stays calm and plays smart, the only losers would be US consumers.

Fioramonti may get the chance to put his theories into practice— letter from Michael Street

Whatever the cynics and doomsayers have to say (“Italy will never change” is their mantra), a political candidate who talks of creating a “knowledge-based green economy”, “a fourth industrial revolution” and “managed migration”, and has the credentials to back this up, deserves a hearing. This is a fresh voice in a tired and corrupt system and, importantly, comes from a respected outsider. Prof Fioramonti’s background also suggests that if he obtains a position in government we could see something radically new as he is one of the leading thinkers in the increasingly relevant “beyond GDP” debate. He has written several books on the subject and works with international groups on sustainability, natural capital accounting and the economics of wellbeing. From a position of government in Rome he would have the opportunity of a lifetime to put the theories into practice.

Today’s opinion

It is finally ‘game over’ for Labour’s cowed moderates
Jeremy Corbyn this week completed his takeover of the party machine

Investors should bet on smaller nimbler companies and countries
In a time of turmoil and conflict, the best strategy is to go south and nimble

Market pressure gauge flashes a red alert
With our instability predictor at a high, we see a major discontinuity in equities

Trade wars and the prisoners’ dilemma
China’s response to US tariffs has been measured but the end game is uncertain

Deepening economic ties will give the west leverage over Iran
Increased trade would make Rouhani dependent on good relations with the US and Europe

Financial markets fail to reflect the eurozone time-bomb in Italy
Parliamentary dynamics are crucial as populists make up 60 per cent of MPs and senators

FT View

FT View: The steady rise of an America First world
The elevation of John Bolton and Mike Pompeo could break Pax Americana

FT View: In Egypt, elections turn Arab spring to winter
No one can be fooled into thinking Egyptians are free to choose

The Big Read

The Big Read: Nigerian economy: Why Lagos works
In a country that is a byword for poor governance, Lagos is thriving — attracting investment and private enterprise. So what can the rest of Nigeria learn from it?

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