And even nastier thought is that profits may have been misstated, and once all the adjustments have been made, we may find that many of the seemingly profitable companies were in fact not doing very well.Still, savings have to go somewhere. From an investment point of view the key question is whether, over the next decade or so, investments weighted towards bonds will outperform those weighted towards equities. The Boots pension fund has taken that decision and plumped for bonds. I understand many other pension funds are considering a similar move.Before doing so though, you have to have some clear benchmark of the appropriate relationship between these two broad classes of investment.

The bond/equity yield ratio is interesting in the very long run but is skewed by long-term changes in the direction of inflation. ABN-AMRO, which produced the graph below, has done some sums taking real yields rather than nominal ones.Its conclusion is that if you look at the average gap in the ratios over the post-war period, US shares are still rather expensive relative to bonds. If on the other hand you take the average over the last 20 years (but knock off the effect of the bubble of a year or so ago) then shares are now fairly priced.But for shares to be fairly priced there has to be a decent recovery in the US economy pretty soon and one that is reflected in profits too. A profitless recovery would be seriously bad news.At a time like this it is always helpful to look back a long way. The difficulty is to spot whether some fundamental change has taken place or whether we are just experiencing a "normal" cycle For the moment the normal cycle view is the dominant one. But if that proves wrong, then the possibility rises that equities are in a secular bear market, just as bonds were between about 1950 and 1980.

Of course many shares will still do very well, reflecting the success of the companies they represent But as a general rule, bonds will do better. The moral would be to have a much more balanced portfolio than would have been appropriate for the past 40 years.. With Sir Peter Bonfield's departure, the last of the BT old guard is gone and the post-mortem on what went wrong at BT and what the future might now hold for this shadow of its former self can begin in earnest. With Sir Peter Bonfield's departure, the last of the BT old guard is gone and the post-mortem on what went wrong at BT and what the future might now hold for this shadow of its former self can begin in earnest.That there was a failure in management is not in doubt, but it would be much too glib to heap the blame for this failure entirely on Sir Peter, nor does it wholly explain BT's downfall. Sir Peter should almost certainly have gone at the same time as Sir Iain Vallance, the former BT chairman. You could tell from the body language alone that he didn't get on with Sir Iain's successor, Sir Christopher Bland, and in any case he was too much tainted by past mistakes to survive for long.If there is a recovery story to be had at BT, Sir Christopher, who gave up what most would regard as one of the most desirable jobs in corporate Britain as chairman of the BBC for the hell hole of BT, was certainly not going to let Sir Peter be a part of it or share in its glory.