Martin's Feed
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.

Mar 11, 2011
via Breakingviews

Were Luddites the victims of 2011-style finances?

The British weavers known as Luddites, who destroyed looms precisely 200 years ago, thought rising unemployment within their ranks was due to machinery. But there’s a case to be made that inflation, money supply expansion, budget deficits and trade barriers were equally to blame. Maybe we haven’t learned much in two centuries.

The first Luddite riot occurred on March 11, 1811, an attack on wide knitting frames in the Nottinghamshire village of Arnold. The rioters were mostly skilled artisans, whose livelihoods had been endangered by what they perceived was a “dumbing down” of their skilled work by automated looms. The riots spread to the main cotton center of Manchester late in 1811. Prime Minister Spencer Perceval’s government, which had a robust approach to public order, made frame breaking a capital offense a year later, executing 17 offenders the following year. After that, Luddite activity gradually died down, petering out after 1817, when the economy improved.

Mar 10, 2011

Crony capitalism lives on for mega-rich

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

By Martin Hutchinson

WASHINGTON (Reuters Breakingviews) – It was a good year for billionaires. Rising markets helped create 200 more of them in 2010, bringing the tally to 1,210, according to the new Forbes rich list published on Wednesday. But when counting their fortunes against domestic economies, Russia and India rate among the highest. In some developing economies, connections are still the fastest track to wealth.

    • 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."
    • Follow Martin