Portfolio investment continues to pour into Mexico

Last year, portfolio investment set an all time record of US$23.77 billion. That was more than in the previous five years combined and only US$5.96 billion less than in all of the previous decade. 

In the first quarter of this year, portfolio investment totaled US$9.36 billion, double the total of the first quarter of 2010. Foreigners reduced their net holdings of Mexican equities by US$1.19 billion in the first three months of this year. However, they increased their net investments in money market obligations US$10.54 billion. To put that figure in perspective, it more than doubled the amount of DFI in the first quarter.

"A rose by any other name..."

As the reality that Greece has more debt than it can possibly service dawns, several euphemisms for restructuring have appeared. They're much less brutal than "taking a haircut". My favorite is "re-profiling".

A resurgence of the Greek drama?

Concern is rising in the international financial markets that the next iteration of the Greek rescue package may not be so much to creditors' liking as the first. Germany has opened up the possibility that bondholders should share the consequences of bad loans -- effectively, restructure the debt. It is not alone. The European central bank (ECB) advocates extending last year's loan program but in larger amounts. The IMF has played a mediating role between the two positions.

How effectively the IMF will play that role in the future is in question, following the arrest of the IMF's head, Dominique Strauss Kahn on sexual assault charges in New York. Has the  IMF's success in playing the role of mediator hinged more on Mr. Strauss Kahn's impressive political skills or on the gravitas of the institution he headed?

Wouldn't it be ironic if a single man's hormones changed the course of the Greek tragedy and the evolution of the international financial system over the short-term?

It's Carlos Slim Day...

Both the Wall Street Journal and the New York Times are featuring stories on the challenges to Carlos Slim's dominance posed by his battle with the Televisa/Azteca duopoly, the Supreme Court ruling and the mega-fine levied by the Federal Competition Commission. Until now, Telmex and Telcel have been able to postpone paying any fines levied until the judicial process has run its course. Effectively, that meant fines had no teeth. The drop in the share price following the ruling leaves no doubt that investors appreciate its significance, especially with the nearly US$1 billion fine imposed by the Federal Competition Commission in April outstanding.

The third week of next month, our 2011 ECONOMEX SPECIAL SESSION will give you the answers to the question of what is behind the pitched battle between Mexico's telecommunications and television giants. Jorge Alvarez Hoth, one of the architects of and leading authority on Mexico's telecommunications sector, will give us a roadmap of the conflict and discuss what the different possible outcomes could mean for your firm and for consumers. Mr. Alvarez Hoth is a former UnderSecretary of Communications, a top executive in a leading telecomm company, and a newly elected member of the Cofetel Advisory Board.

Economex subscribers will be receiving a mail with the date, place and time of the Special Session shortly. Others who are interested in this timely, controversial subject that impacts all of the economy and business will find more information on the American Chamber / Mexico webpage.