Another Year just Another Cycle?

To those with a sharp memory, the summer of 2014 so far has had some all too familiar headlines. From the Israeli – Palestinian conflict in the Middle East, the death of over 290 innocent commercial airline passengers, disease outbreak in West Africa and now the re-defaulting Argentinians.

                The common cliché would remind us that history repeats itself. However, the saying is often used in a greater sense with reoccurrence decades maybe even hundreds of years later.

                This summer we have seen Anderson Cooper report on Gaza and the Israeli – Palestinian conflict for now the fourth time after seeing this issue arise again and again in 2006, 2009, and 2012. We have seen Malaysian airline flight MH17 get shot down over a warzone in eastern Ukraine resulting in the tragic death of over 290 innocent lives. However, even this, is not something new. In 1983, some may remember Korean Air flight HL7442, shot down by a Soviet Su-15 fighter jet resulting in the loss of 269 innocent lives or in 1988, 5 years later, when Iranian Air flight EP-IBU was shot down by a US Navy guided missile resulting in the loss of all 290 people on board as well. Most recently, the media has caught up on a growing Ebola outbreak in West Africa that has been surviving and brewing since 1976 that has claimed the lives of thousands. This all sounds disturbingly familiar.

Lastly, what has been flying under the radar for most are the Argentinian debt talks….again. July 29th was the first time in many years the country has agreed and not denied face-to-face talks with bondholders in Manhattan, New York. After hours of negotiation yesterday, both parties still have not reached any resolution, a day before Argentina faces an almost inevitable default. After being shunned from global credit markets since its default in 2002 on $100 billion, Argentina still has not learned from its mistakes. In a country that is already in a recession many suspect that it will not hurt any markets other than its own. Yesterday’s meeting was the first of in more than three weeks that Economic Minister Axel Kicillof decided to show up to negotiate which obviously questions Argentina’s commitment to even reach an agreement. Besides continuously declining invitations to negotiate, Argentinian economic officials have criticized US bondholders and investors as “vultures” tearing at the scraps of its distressed debt and possible default. Amongst the negotiating now lies a myriad of legal clauses such as RUFO, rights upon future offers, that US court judge Griesa has been asked to stay, which would’ve incentivized the terms for bondholders already offered the debt restructure. Speculators say that not extending Argentinian debt would have a greater impact than many foresee, especially for many of its South American neighbors. However in the coming 48 hours it will be interesting to see what is decided and how everything is resolved. It seems to many that beyond this reoccurring Argentinian default, is not only a mismanagement of capital and poor leadership but also an ego that has brought Argentina into these situations in its financial history over and over again. Possibly due to a fear of foreign influence and dependency, the South Americas have always regarded foreign entities as bullies or in this case “vultures.” Nonetheless it will be interesting to see how things pan out for both sides.

How much longer will some of these issues continue to cycle? Will some type of bulletproof agreement or resolution ever finally bring peace Gaza even though many ask if anything ever will? Will Boeing and other commercial airline manufacturers finally decide to designed precautionary anti-ballistic measures to avoid airlines from being shot down? You would think that by now like many others, a disease that’s been actively around since 1976 whose source and cause is known would have been eradicated. How much longer will Argentina continue to default instead of being able to responsibly manage their financing?

2014 so far, for many people has been more of the same, but with many of these issues still in the air as of today, one can only hope that many of these issues finally can be resolved or prevented.

 

Watch the Youtube video in the middle

All good things must come to an end…

The world is a book and those who do not travel only read one page.
Saint Augustine

A semester abroad…..4 months, 18 weeks, 126 days and a million moments I will never forget.

My Facebook status 4 hours before leaving Florence:
As I spend my last few hours in Florence, I realize how cliche this all is; how students come here step out of their comfort zones, live and fall in love with this city. However, I know one thing and that is that these buildings may or may not last a thousand more years, but the memories and friendships that I’ve made will. Thank you everyone and fly safe. Keep in touch and expect a visit from yours truly. 

I didn’t think this status was that good. But as the likes accumulated and comments came I guess it was pretty good. These last few months have been more than extraordinary. The people I met and the sites I saw will forever be ingrained into my mind. The utter grandeur and amazing people I met will walk with me for a long time if not forever. Going abroad is such a temporary “thing” with such a lifelong impact. It’s kind of crazy. My status in retrospect is perfect in explaining it. Living in a foreign or at least my case, barely foreign place, alone, forces you to step out, forces you to do things you usually don’t. It makes you take initiative. Mom isn’t there to wash your clothes or make your bed or feed you or do groceries or anything. You have you, yourself and the people you meet. I’ve been trying and trying to grasp or put my finger on what it is that could, in one simple thought, describe studying abroad in its entirety and I just can’t.

I think the sites and images in your mind eventually disappear. Everything you saw, smelled and heard. All that fades away, hence why pictures are seen as so essential sometimes even though they never do the scene justice. But what doesn’t fade are the people. The people you meet abroad, whether local or other students, are literally growing as you are. The moments lived with them….will change you. Knowing all these people abroad and all over the US now, opens so many windows. Oh I’m in California, let me see what ______ is up to or hey I’m in Baltimore, I wonder if _______ wants to grab lunch or dinner. Even better, hey I’m going to visit ______ down in Charleston or the Cape for the weekend, ciao! I don’t know what you think but that’s awesome.

I mean, I’ve never been the type to get soft and sappy over things like this because people come and go in your life but this was different. It was so cliche and everyone saw it coming everyone knew it was going to happen. Millions of students that go abroad experience this but it happens anyways. I don’t know, maybe I am overdoing this but, who knows.

All I have to say is I’m more than grateful to have been given the opportunity to study abroad. More than grateful to have met the people I have met, do the things I’ve done and experienced what I’ve experienced. I wouldn’t have changed a thing. And I promise you I’ll be back. AND you best believe I’m planning some type of reunion. Already have a standing agreement with some of the boys that if one of us makes it one day we’ll reunite and buy a place out in Tuscany and open a club in Florence and put all the others out of business. Haha….one day. Nonetheless, I’m almost at a loss for words becuase it hasn’t all happened  or set in yet. Maybe there will be a part II of this post. Anyways, thank you for reading.

Alla prossima.

Ciao

M

Globalization Theory

Buon Giorno.

Recently got out of the daily 9AM trade floor meeting. I was so tempted to bring up this little theory that I’ve developed over the past couple months; patents pending. However, in a room full of geniuses, I didn’t say anything in-case someone found it utterly stupid for “the intern” to put his two cents in, especially if my little idea was already known.

 

However, during the last couple weeks of school, on April 29th. I went to a talk at Brown University that involved a couple former Latin American Presidents. One was Ernesto Zedillo Ponce de León, a Mexican economist and former president of Mexico from December 1, 1994 to November 30, 2000.

Approximately a month before, I had given a presentation on the reality of Brazil as an emerging market among the BRICs and if it was actually leading the BRICs, aka fulfilling the economic prophecies. My findings led me to an article that helped me formulate my presentation. It, among other sources, pointed out that Brazil was underperforming and it’s as simple as that. It was not leading the BRICs and had under-preformed during the last few quarters.

So the question is, why? Well, my theory or as I call it, phenomenon, is that of globalization’s impact on emerging markets. The world is no longer flat. We know in a matter of seconds what is going on with the Nikkei over in Asia and milliseconds whats going on with the FTSE in London. Between the critics, the analysts, the media and speed that information travels today every move is speculated and known instantly. The connectivity is truly unbelievable between markets. With this integration of markets, an emerging economy is killed by it’s own hype. The analysts, speculators and media kill the potential of these emerging economies. Former President Zedillo coined the concept perfectly during his talk, labeling this mentality as a form of complacency. He related it to Mexico’s potential and arguing that outlets and economists (WSJ, Bloomberg, FinancialTimes, etc) tell the world that Mexico and the BRICs are going to be growing economies and have endless potential, so the country grows a little and figures because everyone in the financial world is saying they’re going to be good, that there’s nothing to do but sit back and let it happen. This is the complacency factor and phenomenon that globalization has caused and that the world economies have never seen. Never in our history have markets been so connected and information been so readily available; therefore causing this hype. I mean, I think it’s rather simple.

Now to relate this back to the meeting this morning, the fact that emerging markets currencies all haven’t been returning as much as people have hoped for other than the MXN Peso was brought up and questioned. Other, all very plausible factors were also thrown into discussion but I was surprised nobody had addressed anything close to my idea and it left me wondering if it would be relevant or worthy of consideration. Even if so, I don’t think there would be a way to quantify it’s (globalization/complacency theory) impact, which poses a problem were it to be taken into account.

 

Nonetheless, I would be very interested to see if anyone talks about this or if this becomes a big deal as markets integrate more and more.

 

Thoughts?

 

Arrivaderci.