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Central American economies struggling with the financial crisis

The financial crisis originated in America, definitely has had its effect on the world economy and especially on the American. Most economic and financial analysts agree that countries are in a better position before the crisis are those who used the rise in raw materials to improve their internal numbers to adjust their fiscal accounts and made a more open market to enhance and diversify their development opportunities. Chile, Peru and Colombia are prominent examples of this behavior.

In the case of Central, as seen from the graph that shows the growth of domestic product per country since 2007 and projected to 2013, the situation was mainly influenced by the slowdown in U.S. consumption, as Expenditures for tourism and investment performed in these economies were severely diminished by the mortgage debacle in the first instance and subsequently by the financial collapse.

The outlook report 2009 World Bank emphasizes this situation has forced some Central American currencies to depreciate by the weakening of its international positions and drought in U.S. currency markets.

Moreover domestic producers believe that despite their efforts generate media marketing and more efficient trade agreements with North America and Europe, exports of American products has declined substantially, growing from an annual growth of 5% in 2007 to about 1.7% in 2008. However, the growth of imports of goods and services increased from 11.9% to 12.3% annualized for the period mentioned above.

The previous situation which has led to a greater extent is a major inflationary pressures in economies that have been affected by higher transport costs, manufacturing and marketing. The next graph, shows the behavior of inflation in the countries of the region from 2007 to 2008 with forecasts for 2009 and 2013.

This situation is exacerbated a bit with the increased perception of risk by investors in light of declining income countries and definitely puts more pressure on domestic prices of products offered in American markets.

Notwithstanding the foregoing, it is worth noting that countries that have had a greater openness to international markets, as is the case of Panama, Costa Rica and the Dominican Republic (which, despite not in the isthmus is considered part of the region) have also shown a better economic situation and so it is possible that the internal situation is much more beneficial than other countries.

One indication of this perhaps we can find in the current account and that these economies can be seen in the following graph showing the performance of the current account as a percentage of GDP. The current account measures the level of trade or exchange of goods and services, if your balance is negative is indicative that the country imports more than it produces and therefore its economy depends on international market conditions

For of Nicaragua, its dependence on imports is the highest in the region, so their debt is higher in terms of the size of its economy. Unlike other Latin American countries like Venezuela, Brazil and Chile, whose dependence on raw materials has provided greater opportunities for additional revenue product of the high prices of these goods registered in the past, Nicaragua may need to increase their debt maintain the level of the economy, complicating the situation in view of the little liquid that the credit market has today.

In any case

countries that are better in this regard are Costa Rica and Guatemala, as their level of dependence on imports is lower compared with its exports, however, depend heavily on its tourism and export markets are maintained at levels sufficiently high to maintain their balance in the medium term.

In the case of Panama it is possible that the rapid construction of the new channel and the strengthening of its financial and commercial sector will enable additional revenue to offset the high level of imports of goods and services. Perhaps the impact for these countries is less dramatic especially if they manage to balance their accounts Prosecutors and the opening of their markets.

Despite the crisis, it is possible that the Central American countries do not suffer as strongly from the crisis, as can be seen as investment opportunities for low-cost and low complexity in terms of its dependence on commodity markets and financial.

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The challenges of the first 100 days of President Obama

After taking possession of the historic Barack Obama as president of the United States, most Americans and much of the world, remains hopeful that under your leadership can be achieved rebuild the U.S. economy and above all be able to recover the country's image internationally .

President Obama takes the presidency with several elements against and some in his favor, perhaps the most problematic is the internal, where you have to fight against an economy depressed and with great demands on public spending, especially for promises made during his election campaign.

The following link New York Times, shows what the priorities in terms of importance of the American citizen. If the page is sorted by their popularity, are formed, we believe the key to face for the Obama administration in its first 100 days in office.

1. Health Plan: This is perhaps the greatest challenge, the Obama plan provides that it may provide coverage to about 40 MM of citizens today have no access to the system. This in economic terms is a strong pressure on public spending in a time when the U.S. economy is slowing and strong credit restrictions.

2. Environment: A final issue vital, but largely untapped, the failure to ratify the Kyoto agreement by the former President Bush, uncheck the United States from the struggle to preserve the environment, especially after the strong campaign that Al Gore has maintained in recent years. dramas experienced by the American people as was Hurricane Katrina, are clear examples of the relevance of this issue in the daily life of citizens.

3. Economy: This point has been focused, especially after the housing market decline early last year and the subsequent impact on the financial system. The lack of regulation and control over the market, the decline in real income and jobs, the weakening of the dollar as reference currency and the fall in earnings of major companies, are elements that will force Obama to take strong measures to revive economic adjustments that allow the economy.

In this sense, the current president, has some advantages because the decline in commodity prices can help offset the impact on production costs of enterprises, as well as transportation costs, in addition, provided that the emerging economies remain controlled their low production costs and the existence of unexploited markets can provide relief to U.S. companies that seek to take greater advantage to those markets.

4. Education: This factor has been having a major impact in recent years with the decline of academic standards in primary and intermediate levels, compared with other countries, especially Europe and Asia. While in the field of higher education continues to set the American school schedule, the collective perception is that the system is broken and the quality and equal education for all has not paid off, which in less developed countries seem be working much better.

5. The End of War: This issue has two major edges, the first domestically, political analysts say the relationship between the presidency and the military high command had been deteriorating much recent years with the Bush administration, Obama has the challenge of recovering that relationship especially orchestrating defense strategies that are much more consistent and less expensive for taxpayers, and above all to be clearly seen by the high command.

The second edge lies in the international arena, where the U.S. image has deteriorated after the failure in Iraq and bad diplomatic decisions made in the past, America needs a state policy that closer allies and allowed to gain respect among their enemies. In this sense, it can be very important to the vision of Latin America and their relationship in the Middle East geopolitics.

Easy?, Not the picture does not look easy for President Obama and very possibly not all the factors listed above can be solved in the first 100 days in office, what is important, is that you neglect to assist you as much success as a candidate, others relied on to resolve these issues so important to the domestic economy and thus to the global.

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Why Is My Nose Uneven

Although not usually a fan of recipes, this article from CNN Money (please click on the vículo to read the article) has very seriously and provides some tips for balancing interersantes investors' portfolios.


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Article from CNN Money and Markets Crisis, "as it was and what could happen?

Perhaps one of the biggest concerns for the investor and in general for the city in general is the current financial crisis. Much has been made of their impact and implications, but in the intricate sea of \u200b\u200binformation and opinions is hard to know the impact will affect us much or little in Latin America.

The real estate market

If the crisis begins with the boom in the U.S. housing market, analysts knew this would happen because in other markets such as Japan, England and Mexico, large increases property prices ended in great crisis because the buyers could not bear the costs of financing and prices were increasing so rapidly that they were withdrawing buyers opt for these goods and simply looked for other options, leaving the property "cold."

But unlike the past where banks simply collected their networks and credit, generating a credit drought that would heal in the short term, leaving little consequence, the financial system take advantage of low interest rates set by the U.S. government to offer more credit. is logical if interest rates fall, consumers will want to borrow more to spend more.

The financial market

First, the financial sector used the low rates to lend to high risk customers (ie most likely not have to pay with credit), which improved its expectation results since the higher risk higher return, but before any sneeze of the economy goodbye possibility to recover borrowed money. Additionally

financial sector investment instruments used debt secured by mortgage, it's as if they had made a kind of invoice discounting you sell on credit and the bank will now get a percentage (usually 80%) of the total bill to be charged in the future. If customers are good no problems if not, imagine what can happen.

This was what happened the high-risk customers could not pay their debts (as expected) and therefore securities secured by these properties could not not pay the promised interest and financial institutions that issued these securities lost money and therefore collapsed.

The enterprise market

How companies suffer from this situation? It is very simple, not having money in the banks can not borrow, so you can not grow and meet consumer demand, generating companies to cut costs to keep profits. Usual and often cheaper to fire people, leading to fewer households have money to buy and thus lose more business.

employers also try to cut expenditures or involving strong long-term returns, such as foreign investments, etc. To try to keep profitability in the short term.

The Latin American market

gift to Latin America are major branches, the first is that is heavily affected by the decline in foreign direct investment (as mentioned above) and the redirection of capital markets or instruments risk insurance markets or instruments (so-called fly to quality and is just rather have my money put into a safe place to win and I know less than I might pose a risk).

The second aspect is that eyes rolling to the most stabilized and have done things However, taking advantage of less expensive and can generate higher profits.

Either way, there is still much to expect from this crisis, perhaps it is best not to despair and try to stay informed.

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