Wednesday, January 14, 2009

Hastening the Obama Doctrine

In addition to Cubazuela, Mexico is on the radar for domestic "disequilibrium". I have maintained repeatedly that an antipodean emphasis (emphasizing Latin America and Africa) will punctuate the President-elect's foreign policy. This emphasis will be similar to the Monroe Doctrine and will provide a very clear signal to the rest of the world as to what regions are off-limits.

(U.S. shipment of 3,000 tons of ammunition to Israel is certainly a clear signal, but that is another story entirely.)

The United States (warning: untested metaphor following) "phylogeny" will have us regress in times of environmental stress. I have outlined the protectionist leanings (and the press has certainly been revisiting the Smoot-Hawley act recently) and Keynesian reductionism. The foreign policy formation will follow the economics.

EDIT: Readers also are directed to the currency swap facilities the FED has engaged with the Mexican central bank...and not a word from the Fed about its 30 Billion investment.

SECOND EDIT: List of Mexican Credit Default Swaps on Sovereign debt (sovereign CDS have a U-shaped distribution of maturities that are linked to the instrument)

Again, no word from the fed about hedging the exposure. I have outlined its lack of concern in previous posts. (Thanks to my friend, GZ, for pointing this out for me)

Mexico CDS:
W 01/14 329.901
T 01/13 309.429
M 01/12 311.340

F 01/09 295.165
T 01/08 304.193
W 01/07 295.670
T 01/06 277.731
M 01/05 278.660

F 01/02
T 01/01 292.604
W 12/31 292.604
T 12/30 295.178
M 12/29 292.371 PASO - Mexico is one of two countries that "bear consideration for a rapid and sudden collapse," according to a report by the U.S. Joint Forces Command on worldwide security threats.
The command's "Joint Operating Environment (JOE 2008)" report, which contains projections of global threats and potential next wars, puts Pakistan on the same level as Mexico. "In terms of worse-case scenarios for the Joint Force and indeed the world, two large and important states bear consideration for a rapid and sudden collapse: Pakistan and Mexico.

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