Bizwatch

Where There's A Fad, There's A Market
Markets are perfectly rational instruments, according to some economists. But others have their doubts. It's not just the unexplained ups and downs of particular stocks or indices. Even something as sober as how stock markets are organized is as susceptible to fads as a teenage consumer. Just a few years ago, several big West European countries felt the need to reproduce their own versions of the U.S.'s tech-heavy NASDAQ exchange. After a few lackluster years, some, like Germany's Neuer Markt, fell out of favor and the survivors are lightly traded. More recently, market mergers have been all the rage — witness the so-far fruitless attempts by pan-European Euronext and Deutsche Börse to take over the London Stock Exchange (LSE).

Now a new craze seems to be catching on as quickly as the latest mobile ringtone: small-cap markets. Euronext last week launched Alternext, its junior, Paris-based market for small firms, just a month after the Irish Stock

	INDICATOR Can monetary policymakers learn from soccer players? Bank of England governor Mervyn King thinks so. Evoking a 1986 Diego Maradona goal — the Argentine star darted through England's defense in a straight line — King said the expectation that Maradona would swerve cleared his path. The point? Market interest rates, moving in expectation of a change in official rates, can curb inflation without official rates changing. Nice goal.

The Bottom Line
	We don't have a good reason to stay in Italy except that the food is good
		RICCARDO MATTEINI, co-owner of Tuscan textile firm Gruppo Colle, on Italy's inflexible labor environment and competition from Chinese exports