Monthly Archives: November 2012

By Will Pearson and Carlos Ramirez of Eurasia Group

The North American shale gas revolution, currently confined to the US and Canada, could soon spread south to Mexico. Political decisions awaiting incoming President Enrique Peña Nieto will shape the timeline for the development of domestic shale resources. This timeline will in turn have ramifications on energy markets in the US, as well as the rest of the world. If Peña Nieto successfully opens the sector to private investment, US and Canadian firms with expertise in exploiting shale oil and gas will rush into Mexico. Nevertheless, regardless of the trajectory of its shale gas sector, Mexican imports of US shale gas will rise in the immediate future. Read more

It has been pointed out before that Father Christmas and Hugo Chávez share a thing or two in common. Venezuela’s populist president may not have the fluffy white beard, but he has roughly the right build, and sometimes the jovial temperament. Most importantly, the oil-rich leader likes to give. Read more

Is El Salvador, a poor Central American country struggling to overcome a violent history, a safer bet than Portugal? And is Mongolia, a country that has been rescued five times in the past 22 years by the International Monetary Fund, a better investment thesis than Spain?

Bond investors seem to think so. Read more

Ouch. This isn’t any old trade deficit, this is a record trade deficit. South African imports minus exports hit R21bn ($2.4bn) in October, a far cry from many analysts’ predictions of around R15bn.

The trade deficit was R13.8bn in September. So what’s gone wrong? As so often in recent economic data releases, mining troubles are part of the picture but there’s more to it than that. Read more

An economy needs two things if it wants to grow: savings and investment. Guido Mantega, Brazil’s finance minister knows all about that. He told businessmen last month that investment would rise by a massive 8 per cent in 2013 – if achieved, a huge driver of growth.

After his wildly optimistic and wildly wrong prediction of third quarter GDP, readers may not want to take Mantega too seriously. As illustrated by a chart from the IBGE, Brazil’s statistics institute, the current trend is very much in the wrong direction. Read more

By Matt Kennard

Gael García Bernal is not your average Hollywood movie star.

He intersplices his long sentences with references to Slovenian philosopher Slavoj Žižek, and throws in a bit of French radical thinker Alan Badiou for good measure. “Right now I’m reading In Praise of Love by Badiou,” he tells me while unwrapping his sandwich. “I’ve never read him, I have to catch up!” Read more

This should be the time to ramp up sales of whisky to South Africa. The country has an expanding middle class and a taste for the drink, as well as a fondness for premium brands.

Instead, Scotch whisky exports to the country are dropping, and it’s domestic producers that are taking market share. Read more

Another day, another rich Chinese buys a French vineyard? Much as they did with Chinese art, Chinese investors are convinced they are onto a good thing with French red wine: they have bought some 30 to 40 vineyards in Bordeaux in the past two years, since China became the French region’s largest export market.

But now, according to reports in the Chinese press, an unnamed Chinese industrialist has scored the biggest Bordeaux coup to date, with the Chateau Bellefont-Belcier estate in the region’s prestigious Saint Emilion wine producing area (pictured). Read more

Poland’s economy slowed by more than expected in the third quarter, growing by an annual 1.4 per cent compared to 2.3 per cent in the second quarter, as the combined impact of the slowdown in the eurozone and a slump in domestic demand and investment continued to affect the country. Before the results were released on Friday morning, the consensus was for GDP increase of 1.8 per cent.

The big question now is what the slightly worse-than-expected numbers will mean for the National Bank of Poland’s interest rate setting Monetary Policy Council when it meets next week. Read more

A grim reminder on Friday of the economic havoc that the eurozone crisis is wreaking in the Balkans.

Croatia’s GDP shrank 1.9 per cent year-on-year in the third quarter, according to to the state statistics bureau, putting the country well on the way to a 2 per cent contraction for 2012, the fourth year of recession in a row. Hardly the best preparation for joining the EU next July. Read more

Xi Jinping is now in place as China’s new leader. Growth in the world’s second largest economy has been reined in of late, but James Kynge, principal of China Confidential, the FT’s China research service, sees a more optimistic outlook than forecast just a few months ago.

* Indian growth slows to 5.3%

* Brazil GDP disappoints

* Thai market comes of age with energy group’s $3bn rights issue

* Rosneft and AAR may sign TNK-BP deal in December Read more

Not such a rebound after all. Hopes that Brazil’s economy was emerging quickly from its recent spell of sluggish growth were disappointed on Friday when the national statistics office (IBGE) said quarter on quarter growth was just 0.6 per cent in the third quarter, half the rate expected by many economists.

Year on year growth was 0.9 per cent, far below the 1.9 per cent expected by 42 analysts polled by Reuters. Read more

Russia’s consumer spending spree could be ending in tears. A credit-fuelled surge has led households to rack up unprecedented levels of consumer debt – so much so that in 2012 some 80 per cent of new consumer loans (excluding mortgages) are going towards interest on existing debt. This cannot go on.

“In Russia, the macro-economic risks are small,” says Natalia Orlova, chief economist at Alfabank, “But the risks in the banking sector are accumulating. Retail lending is becoming a high-risk segment.” Read more

Friday’s pick from the BB team: India’s growth creates little employment; the message from Tahrir; and the Kremlin steps in with Norilsk Nickel. Plus: Ratan Tata’s lessons for India; Venezuela copes whilst Chávez is in Cuba; and Iraq’s new national anthem.

 Read more