Sebastian Payne: 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.
- Financial Times