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Jan 13, 2011
via Breakingviews

New Fed may see more dissent — at least privately

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

WASHINGTON — Are hawks with votes more likely to get their way? This year’s voting members of the U.S. Federal Open Market Committee include a trio forming a stronger hawkish group than last year’s lonely Thomas Hoenig. Rocking the boat on the current round of quantitative easing is unlikely. But their differences with Ben Bernanke, the Federal Reserve chairman, may emerge on interest rates.

Jan 7, 2011
via Breakingviews

U.S. underclass growing faster than employment

The U.S. underclass is growing faster than employment. Non-farm payrolls increased 103,000 in December, but the ranks of the long-term unemployed rose by 113,000. True, America’s economic recovery is finally accelerating. But the expanding layer of near-permanently jobless people is bad news for long-term fiscal and social health.

At first sight, the last unemployment figures for 2010 were encouraging. While job creation was mediocre, it was accompanied by a total of 70,000 additional jobs in revisions for the two prior months. And the unemployment rate, based on different data, declined unexpectedly sharply to 9.4 percent.

Jan 4, 2011
via Breakingviews

De-globalization forces remain strong into 2011

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

The forces of globalization have been challenged by new global market barriers in the Great Recession. In 2011, the de-globalization process even could gather pace if commodity prices continue their surge or if there is another financial crisis.

Dec 14, 2010
via Newsmaker

An Austrian view of the IMF

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

It’s a great pity we didn’t close the IMF down in 2005-07, while we had the chance. It had such a small loan volume outstanding that it was running losses, with operating expenses being paid by depleting its capital. The central problem of the institution is that it represents yet another conduit by which resources are diverted from the productive private sector into propping up unproductive state entities. This reduces overall welfare, prevents the liquidation of malinvestment and is the principal reason why economic recovery from the 2008 recession has been so sluggish in the US and Europe.

Dec 3, 2010
via Breakingviews

U.S. job creation steady for now, but slow

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

The November unemployment report showed that U.S. job creation is steady for now, but too slow to lower the unemployment rate. Job creation was weaker than prognosticators expected, but that was partly because of pre-holiday cautiousness in the retail sector. With no new fiscal stimulus, modest job creation is likely to continue — provided monetary largesse doesn’t undermine it.

Dec 2, 2010
via Breakingviews

Fed, WikiLeaks data underline market inefficiency

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

One lesson from recent fat data dumps relates to fat tails. Both the Federal Reserve’s publication of data on its emergency credit facilities and the WikiLeaks releases of State Department messages could have caused market turmoil if they had been made public in real time. But some financial and political insiders were at least partly informed. It is a reminder that even supposedly efficient markets can’t reflect unknowns — and that information is always unevenly distributed.

Nov 29, 2010
via Breakingviews

Global risk of U.S. impotence at heart of WikiLeak

The biggest secret to be revealed by WikiLeaks should have been the easiest to spot without the website’s classified document dump: American hegemony is on the wane. That underscores a heightened risk for global investors that without U.S. leadership, regional rivalries may turn nasty, trade barriers rise and fiscal policies destroy wealth.

It’s hard to avoid the overall impression from the disclosure of 250,000 secret State Department cables that the 1990s vision of U.S. supremacy and peaceful globalization is irrevocably ending. There are a number of risk-reducing advantages to the world in having a clearly defined hegemon, provided its intentions are reasonably benevolent.

Nov 11, 2010
via Breakingviews

Peru a worthy borrower of ultra-long debt

Peru is a worthy borrower of very long-term debt. While poorer than Mexico or Goldman Sachs — two others recently in the market with long-dated bond issues — the Andean nation’s economy is more balanced, it has less debt and its growth prospects look better. Global mining companies already take the country seriously; its successful $2.5 billion financing this week suggests debt investors are coming to do so too.

Mexico recently sold 100-year debt at a 6.1 percent yield, while Goldman sold 50-year paper at 6.125 percent. In its fundraising, Peru’s long-term slug had a maturity of “only” 40 years, but it is still notable that the $1 billion issue sold at a lower yield than paid by Mexico or Goldman — 5.875 percent.

Nov 11, 2010

India’s quiet support of QE2 shouldn’t surprise

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

By Martin Hutchinson

WASHINGTON (Reuters Breakingviews) – India and the United States aren’t just the biggest democracies in the world. They’re also monetary kissing cousins. So it was no surprise to see India’s prime minister offering qualified support for the Federal Reserve’s attempt at monetary stimulus.

Nov 10, 2010

India more deserving of U.N. Council than Russia

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

By Martin Hutchinson

WASHINGTON (Reuters Breakingviews) – President Barack Obama’s support for India’s permanent membership to the United Nations Security Council raises the question of which of the current five members must make way. Britain and France are normally regarded as the likely candidates. But economically, Russia is a better case to lose the game of musical chairs, particularly if that would teach a lesson that kleptocracy doesn’t pay.

    • 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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