I think it is interesting that we tend to pay more attention to Europe and the UK rather than what is going on right to the south of us.  Many of the same issues revealed by the Brexit vote, the Yellow Vests in France, and the election of populist leaders around the world are also showing up in South America.  Geopolitical Futures published an interesting article today describing Mexico’s foreign policy under its new President, Andres Manuel Lopez Obrador.  From the linked article:

For 70 years, until Vicente Fox took office in 2000, Mexico’s foreign policy had been guided by the Estrada Doctrine. Named for Genaro Estrada, who served as the Mexican foreign affairs secretary from 1930 to 1932, the doctrine took a noninterventionist approach to diplomatic relations, promoting the idea that countries shouldn’t interfere in the domestic affairs of other nations and that they especially shouldn’t comment on the legitimacy of foreign governments. From this perspective, anything short of minor signals of disapproval – such as recalling diplomatic staff or limiting diplomatic presence in a foreign capital – is viewed as unacceptable.

It’s not hard to see why Mexico adopted such an approach. Throughout its history, Mexican governments have had to deal with foreign invasions and regimes that refused to acknowledge their legitimacy and Mexico’s autonomy. Since the 19th century, Mexico fought Spain for its independence, was invaded by France and was partially annexed by the United States. But the country’s problems weren’t brought on only by external factors. After gaining independence, it descended into civil war, and in the early 20th century, numerous revolutions threatened to destabilize the country. Foreign powers often took sides in these fights. Mexico, therefore, has repeatedly felt the frustration of being subjugated by foreign governments and struggling to gain international recognition.

This history was the foundation of the Estrada Doctrine. But as Mexico developed into an emerging economy, it began experimenting with other foreign policy approaches to reflect its new status. In 2000, when the National Action Party unseated the Institutional Revolutionary Party, which had been in power since 1929, the administration of Vicente Fox aspired to increase Mexico’s influence in multilateral organizations and strengthen its ties with the U.S. Fox believed cooperating with Washington would help boost Mexico’s international profile, as one of the United States’ top and most trusted partners. This approach continued with the administrations of Felipe Calderone in 2006-12 and Enrique Pena Nieto in 2012-18.

But it had some major drawbacks and ultimately proved detrimental to Mexico’s broader objective of increasing its role in the region. As part of its closer alignment with the U.S., Mexico began to take positions on issues that were inconsistent with its historical orientation. It criticized the governments of Cuba, Venezuela and Honduras (among others) and commented on their domestic affairs. Some began to see Mexico as a puppet of the United States, using its cultural, linguistic and historical ties to Latin America to do Washington’s bidding in the region. And in doing so, Mexico put at risk one of the biggest advantages it had in the region over the U.S. – its credibility among Latin American countries. Mexico’s international status did improve, but it came at a price.


Corporate Buybacks vs. Capital Spending

by Laura Ehrenberg-Chesler on December 20, 2018 in capital spending

There has been a lot of chatter this year about corporations buying back their own stock rather than investing in their businesses. On Tuesday, Ed Yardeni debunks this myth with facts. “True Story III: Capital Spending at Record High. Another widely held view is that corporations aren’t spending enough on plant and equipment because they’re […]

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No sign of Credit Crunch at Banks

by Laura Ehrenberg-Chesler on December 18, 2018 in Economic Indicators

With all the worry about the inverted yield curve and a potential recession, it was a relief to read Ed Yardeni’s piece this morning about banks, lending, and the yield curve. From Ed Yardeni: “So what really matters is the net interest margin of the banks. Consider the following: (1) Interest margin. Data available for […]

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Thanksgiving story on Successful Managers

by Laura Ehrenberg-Chesler on November 28, 2018 in Tribute

In case you missed this story from the WSJ on November 25: “By year two, as William Bradford’s long-odds startup finally stepped back from the brink of oblivion, he decided to hold a mandatory, three-hour staff meeting. This wasn’t a party, an operational review or hackathon. The only item on the boss’s agenda that morning […]

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Rising Inventories Hit Oil Price

by Marilou Moursund on November 27, 2018 in Energy

The price of oil has tumbled in the last month from the mid-$70s to $51 this morning.  The Wall Street Journal has a good article today about all the factors affecting the price of oil.  From the linked article: What sparked the reversal? Investors and oil traders had a sudden rethink about how much oil […]

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Jim Cramer on Slowing Economy

by Laura Ehrenberg-Chesler on November 16, 2018 in Credit Crisis

Jim Cramer; from comments today posted on the CNBC website: “There are degrees of slowdowns that, nonetheless, can cause an awful lot of havoc and cost a lot of jobs, and that’s what we’re on the verge of here,” he said. “That’s what the markets are saying. That’s what the CEOs are worried about offline.” […]

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Ed Yardeni turns more cautious

by Laura Ehrenberg-Chesler on November 14, 2018 in Commodities

Ed Yardeni has been bullish for the better part of the most recent bull market. He recently turned more cautious due to the Federal Reserve raising rates, a slowing global economy, the China trade impasse, and domestic politics. From his research today: “On balance, Trump’s policies have boosted economic growth and further tightened the labor […]

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It’s Election Day

by Marilou Moursund on November 6, 2018 in equity market

The Wall Street Journal had a good summary today of the various concerns facing the market titled “Why the Election Shouldn’t Distract Investors”.  From the linked article: Every market pundit has a view on how the election will affect markets. The truth is, the economic and financial forces at work right now are so powerful […]

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No Shortage of Workers

by Laura Ehrenberg-Chesler on November 5, 2018 in Economic Indicators

Turns out, there are more workers coming in to the labor force, so we are not running out of workers. Today, from Ed Yardeni: “No shortage of workers. Another widespread and erroneous notion is that we are running out of workers because the unemployment rate is so low. The labor force jumped 711,000 during October, […]

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GDP Grows at 3.5% in the Third Quarter

by Marilou Moursund on October 26, 2018 in Economic Indicators

The U.S. economy grew at a 3.5% rate in the third quarter led by consumer and government spending.  From the linked WSJ article: Gross domestic product—the value of all goods and services produced in the U.S.—grew at a seasonally and inflation-adjusted annual rate of 3.5% from July through September, the Commerce Department said Friday. That […]

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