dtblount

Swine Flu and the Mexican Narco State: No Time to Be Long

A failed state?!?! Are you serious??? Yes, the cartels have caused terrible problems and violence in border towns and in DF, but the vast majority of the country is as safe and stable as ever. Mexico is still a huge trade partner in NAFTA with massive potential from its natural resources (ags and metals too, not just oil) and human capital (one of the youngest populations by avg age in the world).

I would also categorize Mexico as being more risky in the short run...all of these problems (cartel violence, swine flu, reduced remittance inflows, etc) are more short-term. In the long run, I am very bullish of Mexico. Communications, infrastructure, and basic services are not "compromised." I'm not sure what you are focusing these comments on, but electricity, water, transportation services, etc. are still up and running fine.

While the recent swine flu has caused a hiccup in DF, only about 100 people have died in Mexico so far. While this is still terrible, it is hardly the type of outbreak that would lead to the level of political instability you are assuming.

Russia's Too Risky - Barron's

I think we are all forgetting that Russia is an EMERGING MARKET. It is not a developed market and simply cannot be compared to the US or the Eurozone on any real level. Of course there is risk and the threat of geopolitical instability. People don't invest in Russia because of stability and low volatility. They invest because the perceived gains in individual investments are believed to outweigh perceived risks. There are great companies in every country on earth...some are easier to find and invest in than others. Even Zimbabwe has great companies...

In a broad, macro context, I'm extremely bearish on Russia in general...but some individual companies look great to me. However, if commodity prices slow down, I think the Russian economy will see the current problems magnify, as well as the emergence of new issues. I don't think the economy is diversified enough and a lot of new wealth is leveraged on the commodity boom...


Cheers

Minefields in LatAm: Dodging Political Pitfalls

Great article! Good coverage and geopolitical analysis...I'd also love to see a similar piece on Africa....

Cheers