- Bear Case
July 28, 2014 posted by Martin Hutchinson
July 21, 2014 posted by Martin Hutchinson
A fascinating new book, "Archduke Franz Ferdinand Lives!: A World
Without World War I," by Richard Ned Lebow (Palgrave Macmillan, 2014)
looks at history's likely trajectory if the Sarajevo assassin Gavrilo Princip
had missed. He concludes that, while much would be changed, we would at best be
only modestly better off. However, Lebow is not an economist and he misses two
enormous economic factors that would almost certainly be different in a world
without World War I. His "worst-world" scenario might have derailed
us, but absent that, 2014 without World War I would probably enjoy much greater
prosperity than today's real world.
July 14, 2014 posted by Martin Hutchinson
The New York
Attorney General's lawsuit against Barclays' dark pool is yet another example
of banks' increasing resemblance to asbestos manufacturers. But it also
reflects an uncomfortable truth: Whether through "fast trading,"
through the new area of "crypto-currencies" or through the increasing
frailty of bank and corporate security systems, technology is transforming
previously well-understood markets into insider-dominated scams. The
implications for the future of a free economy are dire indeed.
July 7, 2014 posted by Martin Hutchinson
bank BNP Paribas is about to be fined $9-$10 billion for doing business with
Iran, a country with which the U.S. is finding common ground in Iraq. Since
2008, the U.S. and the trial bar have obtained fines and settlements from
global banks totaling $88 billion (as of early June.) Now medium-sized U.S.
banks such as Sun Trust are being zapped with fines—$968 million to settle
claims over its mortgage practices.
June 30, 2014 posted by Martin Hutchinson
business productivity fell by 3.2% in the first quarter of 2014, according to
the Bureau of Labor Statistics' revised data. Most commentators have rather ignored
this number. You expect productivity figures to be bad when GDP drops
unexpectedly, as it did in the first quarter. After all, the last such bad
number was in the first quarter of 2008, the outset of the Great Recession, and
the one prior to that was in 1990, when that recession hit unexpectedly. Still,
in this expansion, output numbers have been much weaker than employment numbers
as productivity has stagnated. But then, in a period of such massive
malinvestment, to use the Austrian economists' term, that's what you'd expect.
June 23, 2014 posted by Martin Hutchinson
June 16, 2014 posted by Martin Hutchinson
June 9, 2014 posted by Martin Hutchinson
Good times tend to be relatively infertile of new economic ideas. Even radical economists, grinding their teeth at the apparent success of the market, don't want to be accused of killing the golden-egg-laying goose.
June 2, 2014 posted by Martin Hutchinson
Extreme policies produce extreme attitudes among investors. Now, the nearly six years of zero interest rate policies—accompanied by quantitative easing—that we have seen in most Western economies are producing such an extreme attitude in the world's bond markets.
May 26, 2014 posted by Martin Hutchinson
When I wrote two years ago that the eurozone resembled the Hindenburg approaching the docking mast at Lakehurst, New Jersey, Euroskeptics cheered and only those committed to the worst features of Europhilia suggested I had underestimated Europe's capacity for recovery.
May 19, 2014 posted by Prudent Bear
This column is being written before final Indian election results are available, let alone a government being selected. However, if exit polls are confirmed and Narenda Modi has won a majority that allows him to govern for five years, then he has potentially the most important job in the world.
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