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Mar 27, 2013

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.

Mar 12, 2013
via Breakingviews

U.S. stocks may soar higher – only to crash-land

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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.

Mar 8, 2013
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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.

Mar 5, 2013
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Chavez’s economic program did everything but work

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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.

Mar 5, 2013
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Brewing Latam defaults could prompt 1980s re-run

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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.

Jan 30, 2013
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Surprisingly weak U.S. GDP has silver linings

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

The surprisingly weak U.S. economic output in the fourth quarter contains more than a few silver linings. The nation’s GDP declined at an annualized rate of 0.1 percent, defying expectations of at least 1 percent growth, according to economists polled by Thomson Reuters. Lower government spending accounted for a big slug of the contraction while private consumption and income improved. There’s really little cause for alarm.

Jan 18, 2013

JPMorgan flaws should ring alarms everywhere

(The authors are Reuters Breakingviews columnists. The opinions
expressed are their own.)

By Richard Beales and Martin Hutchinson

NEW YORK, Jan 18 (Reuters Breakingviews) – JPMorgan (JPM.N: Quote, Profile, Research)
was supposed to be among the best managers of bank risk in the
world. This week it published an internal report into the
failings which led to $6.2 billion of trading losses at its
chief investment office in 2012. If the mix revealed –
conflicting mandates, discredited theory, inadequate checks and
primitive technology – is really as good as it gets, financial
watchdogs and investors everywhere should worry. There are
plenty of lessons for regulators and bank executives who want
things done right.

Jan 8, 2013
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Chuck Hagel is good choice for U.S. deficit hawks

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

Chuck Hagel, President Barack Obama’s pick for U.S. defense secretary, is a good choice for deficit hawks. He mixes dovish foreign policy views – at least for a Republican – with budget-cutting fervor. The combination could actually slash Pentagon spending. Reducing it to the proportion of GDP seen in the late 1990s would save Uncle Sam a quarter of a trillion dollars a year.

Dec 14, 2012
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Review: Every monetary system needs a Paul Volcker

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

William Silber’s biography of Paul Volcker is rightly sympathetic to the man whose determination and integrity conquered U.S. inflation. When needed, he overcame opposition from politicians and academic economists. Yet once his work was done, policy slid back and his abilities were wasted.

Dec 13, 2012
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Difference between “and” and “or” could undo Fed

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By Martin Hutchinson and Richard Beales
The authors are Reuters Breakingviews columnists. The opinions expressed are their own.

The difference between “and” and “or” could undo the Federal Reserve. At its meeting Dec. 12 the Federal Open Market Committee replaced its estimated duration for low interest rates with thresholds for the unemployment rate and inflation. If reality makes the two measures diverge, the new approach could prove rocky for markets.

    • 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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