The state of Mexico – “so close to the United States, so far from God”, as one old expression has it – presents a due diligence dilemma for risk takers. Belying the nihilism of that old saying, macro numbers generally are quite good. Mexico is also an integral part of the USMCA trade agreement, and […]
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The Tumbler Effect
In the US – and elsewhere, too – Covid distemper brought fiscal largesse, a lot of it. Fiat money creation, resulting inflation, and reactive monetary tightening all make for baleful growth and asset price prospects. The “financial surface” – where an asset’s bid and offer meet – has been volatile and may remain so for […]
Lula-Redux
The world continues to turn on its fixed axis, and another populist political leader assumes the executive for a large, dynamic and somewhat unsettled country. At the end of October, Luis Inacio “Lula” da Silva was elected President of Brazil, defeating the incumbent Jair Bolsonaro. For Lula – the former metal worker, union organizer and […]
Souffle-State
Dramatic times, it’s said, call for dramatic measures. And so, we’ve seen that happen. The halcyon forty years of the Volcker FED-induced moderating inflation have been supplanted – perhaps due to energy market dislocations, perhaps from fiscal excess and monetary neglect, perhaps from official obtuseness. US inflation now exceeds 8% on a year-over-year basis, and […]
Ebb and Flow, Flow and Ebb
Getting a bead on inflation is a bit of a mug’s game but nevertheless unavoidable for the cross-border risk-taker. You have to have an opinion, right? The current US administration’s fiscal activism, and skewing of the US energy markets may have primed inflation; the Russian invasion of Ukraine certainly exacerbated things. But how durable will […]
Institutional Reach
Populations are dynamic, so the demographers tell us. They are fruitful and stable, ably replacing themselves and then some. Or, they may be atrophying, having fewer children, making do. They are a phenomenon – like all of us, like each of the people they embody. But, for the cross-border lender or investor, the kernel question […]
Wanting Bread and Peace
Pandemic, adventurism (theirs, not ours), policy mismanagement and geopolitical fumbling (perhaps ours) have meant ramifying and cascading consequences. For everyone, strong country institutions are the de facto inoculation against such instability. Many countries, sadly many in the EM space, are not exhibiting the institutional depth needed to neutralize knock-on geopolitical effects. Lenders and investors in […]
Price Check
A famous economist once said, roughly, that inflation is anywhere and everywhere a monetary phenomenon. One might not disagree, but one could add that inflation is, in a sense, pretty much always and everywhere, a “political” phenomenon, or one can be even more reductionist and note that it is a “human” one. And there’s the […]
The Rivers Run Through It
Geopolitical risk is real, with human and business consequences for the unfortunate, the unlucky, and the oblivious. Parsing and understanding this form of risk will not come from just a sole recourse to normally distributed historical data. The successful global risk taker is a student of geopolitics and does the requisite homework. Risk managers must […]