A Tale of two Balls: UK vs PIMCO

Lessons from WWII as Russia conquers Crimea

Who is more influential? In the left corner sits Ed Balls, potential Chancellor of the UK if the Labour Party makes it into power in the 2015 election. On the right, his brother Andrew Balls, Deputy Chief Investment Officer at PIMCO, which controls $2 trillion worth of bonds.

Even assuming Ed B. makes it into power, his brother wins hands down. The UK government spends around £720 billion a year and most of it is already earmarked. Chancellors – pace all the kerfuffle around budget announcements – can only affect policy at the …

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The CEO’s case for rocketing equity markets

Middle East and Korean peace in the offing

A year after writing about the unsustainability of the French economy, I found myself this August once again amidst the glory-on-earth that is inland Provence. The economy is in worse shape, even more of the profit-making elite have left the country and President Francois Hollande is beyond a blancmange.

Demand for places in the South Kensington Lycée is such that a new one is being built near Wembley football stadium. London’s gain is France’s loss.

And yet I join a select group of forecasters who have to date been proved wrong. We …

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Lands of Opportunity: China & the City

Osborne the hero

Readers suggested that the last column’s negativity deserved a positive riposte. Herewith 6 reasons to be cheerful.

China’s Chance China looks set to grow at between 7% to 8% annually, a drop from decades of higher growth stretching into double digits. As the Financial Times pointed out in an editorial a couple of weeks ago (and subsequently ignored in all its doom-laden articles that day), when the world’s second largest economy is projected to grow 7.5% a year this still implies an enormous addition of both capacity and demand.

While China reorients its economy towards consumption and …

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The London property collapse

Inflation’s soaring path and generational pain

Rather like Macbeth, me-thought I heard a voice cry ‘Sleep no more!”. Having not murdered anyone, I analysed the lack of sleep and found 6 issues keeping me awake: the collapse of the London property market, soaring interest rates, accelerating global inflation, pensioner pain, the agony of the younger generation and the Middle East bloodshed.

1. Imminent Collapse of the London property market
Over the last years an unanswerable question has been what Black Swan event would lead to a fall in central London prices. We all scrabbled away for an answer in our …

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Reputation loss: Rato, Mervyn and Dimon

The growth myth

If raw capitalism is about creative destruction, we have undoubtedly seen a lot of destruction. It is not yet clear how creative it will be.

On the back of the financial crisis there was a first wave of people such as Dick Fuld of Lehman Brothers and Sir Fred Goodwin of Royal Bank of Scotland.

We are now seeing the second wave. Mervyn King has lost his reputation as a competent governor, although he won’t lose his job. The Governor’s consistent refusal to commission a study of what went wrong at the Bank of England; a series …

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Bank governance: rejecting the check list

Morality and psychopaths

We all have a guilty secret. Confession is good for the soul, so in this post-Easter period, let me come clean about mine. It happened in the spring of 2008.

Shamsad Akhtar, the outstanding governor of the central bank of Pakistan at the time, was under attack from the government and her reappointment for another three year term looked uncertain. In an attempt to bolster her position, while I was on a visit to Karachi, she insisted I interview her on Pakistan state television. For 40 minutes we were filmed discussing monetary policy, provisions for bad loans, …

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