The Martin Hutchinson Place
Central banks have kept their policy interest rates close to zero for nearly eight years and with the partial exception of the Fed are now intensifying this policy by pushing rates negative. Combined with large budget deficits and ultra-aggressive regulation in the service of several dubious causes, these policies have provided a destruction test of […]
Nineteenth century accounting worked differently from accounting when I was going through business school, and very differently from today’s accounting. Investors were told not to buy “watered” stocks and bonds, advice that would be laughed at by a modern professional investor. Yet with modern mark to market accounting we have far less certainty, much more […]
The Republican establishment, and National Review in particular, has been emitting a “Hymn of Hate” about Donald Trump, their likely nominee for President. One of their charges is that Trump is protectionist, making Hillary Clinton economically preferable. I too dislike protectionism, but that may be going too far, because protectionism is by no means the […]
Julien Benda’s “La Trahison des clercs” was an immensely influential book when it was published in 1927, and its central idea has passed into our language – that intellectuals are irrational about the society around them, and tend to follow destructive political ideas. In Benda’s book, the destructive ideas were those of interwar fascism, now […]
The subtle effects of global over-expansionary policies can be argued, and will only become clear in the next downturn, but on one thing we can all agree: they have caused an explosion of debt. At mid-2014, global debt totaled $199 trillion, or 286% of GDP compared with 269% of GDP in 2007 and 246% of […]
The American public is terrified its jobs will be given away to robots, and is therefore voting for Donald Trump, the most unreasoning candidate in the race. This column sympathizes with their angst over the results of two decades’ bad monetary, fiscal and regulatory policy, but their proposed solution is both irrational and damaging. Since […]
The death of Antonin Scalia throws the future of the U.S. Supreme Court into flux, while Donald Trump and Bernie Sanders are achieving some electoral success while proudly flouting their contempt for property rights. With year upon year of zero or even negative interest rates worldwide, Maynard Keynes’ “euthanasia of the rentier” seems ever closer. […]
The Gods of the Copybook Headings have been asleep for the last four years, as the miserable state of my stock portfolio can attest. Assets that were overvalued at the end of 2011 have got more overvalued, inflation that should have appeared due to funny money hasn’t, U.S. stock prices have trended steadily upward, as […]
Arrests have been made in China over a $7.6 billion Ponzi scheme involving a P2P (person-to-person, without the intervention of a bank) lender. My first response was: P2P lending in the Chinese banking system: what could possibly go wrong? My second, more thoughtful, insight is that distinguishing out-and-out Ponzi schemes from the world economy as […]
Donald Trump currently looks likely to win the Republican Presidential nomination and it appears Bernie Sanders has a decent shot at the Democrat one. The two candidates have unexpectedly strong support from voters who normally do not participate in elections and, although they are nominally from opposite political poles, their economic nostrums have a lot […]