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The Limits of Financial Reform
MEXICO - Report 06 Aug 2014
Executive Summary The congressionally mandated report from the Federal Economic Competition Commission (Cofece) on the state of competition in the financial sector lacked the teeth of the telecommunications regulator’s equivalent report earlier this year, which among its main decisions designated...

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What Follows the Reform Agenda
MEXICO - Report 06 Aug 2014
Executive Summary Now that the question of energy reform has largely been settled, most of the Pact for Mexico structural reform agenda has been signed into law with and political attention will turn for the next ten months to three main policy areas before everything becomes subsumed in the midt...

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Hail To The President
TURKEY - Report 06 Aug 2014
Executive SummaryErdogan is almost certain the win the presidential election in the first round on Sunday. We start by providing an overview of the policies to be pursued in the Erdogan Era. We are not optimistic that AKP will revert to a more pragmatic policy path in social matters or the econom...

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A Bend in the Road
PHILIPPINES - Forecast 06 Aug 2014
Executive SummaryAt a time of slowing growth, rising inflation and visible signs of infrastructure constraints, an adjudged bend in the administration’s Daang Matuwid has left the President not only with reduced degrees of freedom to invigorate the economy but also dented his corruption-fighting ...

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This is in reply to a question by one of our readers
TURKEY - In Brief 06 Aug 2014
I thought the question is the minds of many and my answer may shed light on two important issues: Q: what is the likelihood of an early parliamentary election? should we expect that if Erdogan does well in the presidential and he does not announce an early parliamentary, we will see lower pressur...

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Energy Reform
MEXICO - Report 05 Aug 2014
Executive Summary A series of reforms to the Mexican Constitution regarding the energy sector appeared in the December 20, 2013 issue of the Diario Oficial de la Federación, the federal government’s daily gazette, and took effect on December 21, 2013. They legally codified changes to articles 25,...

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Houston, We Have a Problem
TURKEY - Report 04 Aug 2014
Consumer price inflation in July surprised on the upside coming in at 0.45%, versus consensus expectation of a modest drop of 0.1%.This has pushed the 12-month rate slightly higher to 9.3%, from 9.2% in June. Producer price inflation eased somewhat to 9.5%, probably largely owing to a more stable...

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Conflicting Debt Target and Policies
HUNGARY - Report 04 Aug 2014
Executive Summary This month, our focus is on the recent official measures on the budget, central bank interest rates and FX debt. A similarly important story is the continuation of the domestic banking saga, including compensations payable by banks to borrowers, the planned conversion of the FX ...

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Political Insights: Week of August 4
BRAZIL POLITICS - Report 04 Aug 2014
This week there will be a concentrated effort in Congress, with important bills on the agenda.The accusations made by Veja magazine that Petrobras CPI questions were previously sent to participants should dominate the debates with the return of legislative activity.Presidential candidates partici...

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Fragmentation will Help the PRI
MEXICO - Report 04 Aug 2014
Executive Summary July indicators point to a further firming of the economy, along with evidence that an expansive fiscal policy has yet to produce its desired effects.Employment and real wages have risen steadily since January 1st, and it appears that GDP growth accelerated an estimated 2.1% in ...

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The Risks and Politics
BRAZIL ECONOMICS - Report 04 Aug 2014
The industrial output data for June virtually guaranteed that GDP will contract in the second quarter of 2014, and that the Brazilian economy is very near recession. Certainly the drawdown of inventories accentuated the drop in the production of durables (for instance, automobile stocks are at re...

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The Politics of Growth Targeting
CHINA FINANCIAL - Report 04 Aug 2014
Executive SummaryThe investigation into Zhou Yongkang, announced last week but expected for months, is the most important political event in China since the related Bo Xilai scandal in 2012. It may confirm that President Xi Jinping and his followers have managed to centralize power far more than ...

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Growth Can Hit Official Targets
CHINA - Forecast 03 Aug 2014
Executive Summary We can see the possibility of a growth rebound, after the government raised investment, and cut the reserve requirement ratio for banks, at the end of June. Though the real economy hasn’t yet seen any impact, both public spending and the money supply immediately rose. Econ...

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Brief Political Update on Id Developments
TURKEY - Report 01 Aug 2014
I intended to hold my fire until our Monthly Report is completed by around the middle of next week, but the sudden flare-up of panic in GEM compelled me to comment on the recent political developments. Our very own Cosmic Strategist asserts that when risk appetite is down, investors begin to scru...

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A Scandal-Slowdown Blend
PERU - Report 01 Aug 2014
Executive Summary Though just five months have elapsed since the fifth cabinet was sworn in, last week an embattled Prime Minister Rene Cornejo was forced to resign. Simultaneously, President Ollanta Humala and First Lady Nadine Heredia succeeded in getting their handpicked candidate, Ana Maria S...