Flawed Mexican banking revamp deserves a shot
(The author is a Reuters Breakingviews columnist. The opinions
expressed are his own.)
By Martin Hutchinson
NEW YORK, April 25 (Reuters Breakingviews) – Mexico’s
banking revamp – postponed this week – deserves a shot. The
reforms include a universal credit registry and easier
foreclosure, both big improvements that could boost consumer
borrowing and spending. But they also allow the regulator to
force banks to lend. That’s a flaw that leaves the risk of a
Brazil-style hangover.
Review: Stockman polemic gloomily convincing
By Martin Hutchinson
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
David Stockman is a polemicist. “The Great Deformation: The Corruption of Capitalism in America”, the new book by the former adviser to President Ronald Reagan and private equity magnate, is a tirade, arguing over more than 700 pages that crony capitalism and central planning have increasingly corrupted U.S. policy since the Franklin Roosevelt administration.
Cyprus and Jamaica – a tale of two island bailouts
By Martin Hutchinson
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
Being an island is tough. Cyprus and Jamaica both have a tourism-led economy with GDP around $25 billion on a purchasing power parity basis, and both are in line for about $1 billion in help from the International Monetary Fund. The twin island bailouts show that no euro shackles are needed for low growth and declining productivity to make it hard to keep on moving.
Thatcher’s economic revolution was not bloodless
By Martin Hutchinson
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
Margaret Thatcher’s government was Schumpeterian: it destroyed as well as created. Her ultra-high interest rates and strong pound devastated industry, then her 1986 reform gutted the City of London. But her reduction in marginal tax rates and defeat of the unions restored Britain’s economic vitality.
New despair seeps out of U.S. employment numbers
By Martin Hutchinson
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
A new despair is seeping out of U.S. employment numbers. The economy added just 88,000 new jobs in March, according to data released by the Bureau of Labor Statistics on April 5. And the number of people counted as available to work fell to its lowest level in 34 years.
BRICS inch towards alternative to dollar bloc
(The author is a Reuters Breakingviews columnist. The opinions expressed are his own.)
By Martin Hutchinson
NEW YORK, March 27 (Reuters Breakingviews) – The BRICS countries, meeting in Durban this week, are inching towards an alternative to the dollar bloc. Brazil and China said on Tuesday that they will use their own currencies for trade and the five nations are still working on creating a rival to the World Bank. Despite flawed policies, the group is a useful counterweight in the global economy.
U.S. stocks may soar higher – only to crash-land
By Martin Hutchinson
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
The S&P 500 Index of U.S. stocks is nearing a new record close to eclipse the peak of 1,565.15 set in October 2007. Simple interest-rate based valuations, such as the so-called Fed model, suggest the benchmark could more than double again – but on long-term assumptions, it would then crash-land.
Review: The massacre of Britain at Bretton Woods
By Martin Hutchinson
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
Benn Steil calls his study “The Battle of Bretton Woods” but in reality the 1944 conference which created a new financial system after World War Two was more of a massacre of British interests by the U.S. Treasury’s Harry Dexter White.
Chavez’s economic program did everything but work
By Martin Hutchinson
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
Venezuelan President Hugo Chavez’s economic program did everything, except work. The strongman, who died on Tuesday, won elections regularly – most recently in October last year – and his economic policies played well at home. His rule coincided with a giant surge in oil prices, helping avoid bankruptcy for his country. Yet Chavez’s stewardship alienated foreign investors as well as governments, and kept Venezuelans poor.
Brewing Latam defaults could prompt 1980s re-run
By Martin Hutchinson
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
Argentina and Venezuela are both potential candidates for default. Investors may be pricing in the risks in the two countries’ debt. But they seem too sanguine about the danger of 1980s-style contagion elsewhere in the region.
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