The Martin Hutchinson Place
The advance second quarter Gross Domestic Product estimate, released by the Bureau of Economic Analysis Friday, showed the quarter’s growth at 2.5%, lower than expected while the price index for gross domestic purchases increased at a 4.0% annual rate, higher than expected. The market responded by soaring into the stratosphere, in the belief that the […]
John Locke’s 1690 “Two treatises on government” enumerated humanity’s fundamental rights as life, liberty and property, a formulation which was picked up by the First Continental Congress of 1774. Thomas Jefferson, no expert on economics and heavily influenced by dodgy French philosophers, changed it in the Declaration of Independence to “Life, Liberty and the Pursuit […]
Wall Street is an unforgiving place, and has the ability to defenestrate Fed Chairmen it doesn’t like – witness the sad fate of President Jimmy Carter’s Fed Chairman G. William Miller, ousted only 17 months into his 4 year term in 1979. Current Fed chairman Ben Bernanke gave a huge hostage to fortune with his […]
The decision by the Bank of Japan Friday to raise the Overnight Call Rate from zero to 0.25% marks the definitive end of Japanese recession, which has lasted more than 16 years. Its onset was caused by excessive monetary expansion, and a consequent tsunami of speculation in stock and real estate markets. Here in the […]
Vladimir Putin’s regime in Russia is corrupt and despotic. Mexico is a functioning democracy with an open economy and a well run recent election. They are roughly equally wealthy, both with large oil reserves. Yet it is Russia, not Mexico, whose economic potential inspires more confidence.
As interest rates rise, the stress increases on emerging markets, with tighter money producing higher risk premiums and decreased funds availability. At some point, one or other of the major Third World borrowers will spin into financial crisis, producing a “domino” effect on other indebted countries. In 1982, the first “domino” was Mexico; this time […]