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May 18, 2011
via Breakingviews

IMF should use crisis to toughen itself up

By Martin Hutchinson
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

WASHINGTON — The International Monetary Fund has a chance to toughen itself up. Under Dominique Strauss-Kahn, the managing director currently imprisoned in New York after being accused of sexual assault, the IMF’s lending has multiplied, largely to basket cases like Greece. But recent loans have failed to force change while damaging other lenders’ standing.

May 12, 2011
via Newsmaker

Global commodity craze should be good for Africa

By Martin Hutchinson
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

In theory, high commodity prices should be a bonanza for Africa’s many emerging economies. Soaring prices for the continent’s major exports bring higher revenues to cash-strapped states. The trouble is, for economic development to take place these funds need to be usefully converted into private sector activity. Africa’s endemic corruption, poor infrastructure and bad policies make that a tall order.

May 5, 2011

Poorest at most risk from 10 bln world population

– The author is a Reuters Breakingviews columnist. The opinions expressed are his own –

By Martin Hutchinson

WASHINGTON (Reuters Breakingviews) – There may be 10 billion mouths to feed within a few generations. The United Nations sees the world’s population hitting that landmark by 2100. Without efforts to change the pattern, the poorest countries will face the worst effects of the demographic drain.

May 1, 2011

A royal wedding would do U.S. economy some good

— The author is a Reuters Breakingviews columnist. The opinions expressed are his own –

By Martin Hutchinson

WASHINGTON (Reuters Breakingviews) – The last two top-tier royal weddings provided lifts to consumer and business spirits that arguably helped pull Britain out of recessions and produced some growth. America long ago traded the monarchy for a republic, but a similar tonic would do it some good – it’s a lot cheaper and less damaging than fiscal and monetary stimulus.

Apr 28, 2011
via Breakingviews

U.S. GDP data starts to spell stagflation

By Martin Hutchinson
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

WASHINGTON — It’s starting to feel like stagflation in America. Gross domestic product rose just 1.8 percent in the first quarter, despite the injection of additional fiscal stimulus in December. At the same time, the Fed’s chosen measure of inflation — the personal consumption expenditures deflator — rose 3.8 percent. If the trends aren’t temporary and oil prices don’t retreat, the Fed may find itself scrambling.

Apr 15, 2011
via Breakingviews

Five years from U.S. housing peak, still no bottom

By Martin Hutchinson
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

WASHINGTON — Five years on from their peak, there’s still no bottom in sight for America’s house prices. After rising from a trough in 2009, prices are falling again and market activity is very thin. It’s another complexity for monetary policymakers with an eye on inflation: hiking interest rates could further squash housing.

Apr 5, 2011
via Breakingviews

Stopping hot money is a dangerous soft option

By Martin Hutchinson
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

WASHINGTON — The IMF for the first time has endorsed the idea of stopping hot money. It may sound like a good idea with so much of it sloshing around these days. But such capital controls impose large and opaque costs on the global economy and encourage fiscal indiscipline. Emerging market authorities should resist the temptation.

Apr 5, 2011
via Newsmaker

The World Bank should work with the private sector

I have yet to see any evidence in the Middle East disturbances of the emergence of any regimes that are either committed to the free market or fully democratic. In addition, many of the region’s countries, such as Libya, have massive oil revenues and hence no need for outside financing. Hence the World Bank’s first priority should be to do no harm, not to discriminate between existing imperfect regimes and mob-fueled changes that have no certainty of producing better outcomes.

As new regimes emerge after reasonably free elections, the Bank should be open to expanding its operations, working as far as possible with the emerging private sector rather than the government authorities, to avoid corruption, political favoritism and politically backed make-work schemes. However it should not attempt to influence political outcomes, which it lacks the expertise to do and will generally get wrong.

Mar 18, 2011
via Breakingviews

Japan’s virtues should help Kan solve its problems

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

By Martin Hutchinson
The Japanese concept of ‘wa’ — or harmony — may help Prime Minister Naoto Kan to solve his country’s mounting problems. The nation’s social cohesion and stoicism have kept a lid on looting and panic, while limiting power outages, since an earthquake rippled across the northeast of the country. Kan has played to these qualities, and since he can blame infrastructure failures on the opposition, he may emerge from the crisis strengthened enough to tackle Japan’s fiscal position.

Mar 15, 2011
via Breakingviews

Japanese stocks may be a post-earthquake bargain

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

By Martin Hutchinson

Japanese stocks may be a post-earthquake bargain. The market lost about $700 billion in value in three days, exceeding likely damages. While the S&P 500 Index is 83 percent above its 2009 low, the Nikkei has recovered only 22 percent. With an economic bounce from reconstruction, and exports powering multinationals, this could be a buying opportunity.

    • About Martin

      "Martin Hutchinson is a Reuters Breakingviews columnist and writes about emerging markets, particularly in Latin America, and monetary and macroeconomic issues. He is a former merchant/investment banker with 27 years of experience."
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