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Something Is Very Wrong At Mexico's Largest Construction Company...
Let’s say, for argument’s sake, that you’re a big company in an emerging market and suddenly, a commodities crash for the ages and a "surprise" devaluation by the world’s engine for global growth and trade sends your country’s currency into a veritable tailspin.
If that were the case, just about the worst possible situation you could find yourself in would go something like this (adapted from Bloomberg): "Eighty-five percent of [your] backlog is denominated in the [home currency], which plunged to a record low this week [and] almost half of [your] debt is in foreign currencies, mostly dollars."
Well, that’s precisely what the situation looks like for Mexico’s largest construction company Empresas ICA SAB which spooked bond investors earlier this month by selling a key 3% stake in an airport operator for $56 million in order to pay down debt.
That has sparked liquidity worries and as you can see from the following, investors are slightly concerned.
As Bloomberg notes, this is the "hardest hit bond in emerging markets" and it should serve as a poignant reminder of just how bad it is out there for the world’s emerging economies.
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Merika!
They need for the Donald to commission a fence?
Never borrow in a currency that is different from that in which you are paid. Period.
Large company without an asymmetric FX hedge? Incompetence?
Maybe it was their 12,000 pounds of cocaine the coast guard seized. Keep up the great work guys!
Seems rather ridiculous to even have to say such a thing. WTF are they thinking?
This shit has happened to Mexico before, but this time they've got Obozo to 'help' them this time, so they are truly fucked......
Stop being a bunch of doomers! Everything is fine! They said so on CNBS. This is just another buying opportunity!!
Sum Ting Wong.
Break more windows.
The dollar does not seem to be up to the job of allowing healthy world economic growth.
The whole inflationary boom was fueled by borrowed dollars. Now those dollars have to be paid back with dollars that are worth more, and thus harder to repay. Meanwhile, narco-terrorism has hurt tourism, and the global industrial slowdown has crushed oil prices. So what can Mexico do? Nada.
Neither can any other Third World country. Joke about making popcorn all you want, we're witnessing a global credit unwind on a scale never seen before, coupled with political desperation in many countries, and environmental imperatives that can no longer be postponed or denied.
"Healthy world economic growth" is many years away.
yeah, but millions more zapatos heading el norte are right around the corner...
Viva "Diversity"!
Facebook and Walmart will hire the ones layed off and DHS will provide A/C transportation to get them here.
Now the nut is harder to make for Empresas- they'll have to sell off more, driving bond prices lower...
Damn, I wonder how many tight oil drillers are finding themselves in a similar bind?
Anytime I ask the Mrs. if I can drill for some tight oil I get slapped.
pods
You might get some if you stopped being so crude!
Perhaps the delivery of such proposal is the problem here. You should extol the various enriching positions and options resulting in transcendent, mutually profitable endings.
This always works for me but I must admit I am a simpleton in such matters and easily coerced.
Miffed;-)
"You should extol the various enriching positions and options resulting in transcendent, mutually profitable endings. "
I think Miff means you gotta buy her stuff...
I usually buy my lady alcohol.
Doesn't always work, though...
Actually, I my post was a kama sutra innuendo which only has a few inexpensive accoutrements that are not required.
Personally I think one should not buy shiny baubles ( ok, gold is an exception) to elicit a pleasure response. This only leads to a demand for more stuff to recreate the pleasure which is temporal in nature. The only one profiting from this is the seller of such things. True joy lies elsewhere.
I think I need to start a school to teach women how to find enjoyment from their men without such demands. Unfortunately, probably none would enroll.
Miffed
...huh-huh...huh-huh...huh-huh...
she said innuendo...
Kama Sutra! Yeah! Yeah! Do it! Do it!
I think I need to start a school to teach women how to find enjoyment from their men without such demands. Unfortunately, probably none would enroll.
...based on the two responses above me, I think it better that women continue to find enjoyment in other areas.
I was only kidding to be honest. When I saw "drilling for tight oil" my mental 16 year old mind went there. :)
My wife does put up with my immaturity though. But, she will never again look at me when she is eating a banana.
"Never make eye contact when eating a banana."
pods
Tell her to try a Popsicle and sinuously slide her tongue around it catching every drop as it melts. Then whisper sultrily " Dear, is it hot in here or is it just me?"
I have never had the pleasure finishing a Popsicle since I was a child.
Miffed;-)
Man... that's really going to hurt America's exports to Mexico...
Mandatory use of USD for all transactions is in the Sinaloa / ATF / DOJ / CIA contract.
So the main trade that TBTF banks care about is unaffected.
All the Mexican construction workers are in the United States.
Who DO Mexican construction companies use???
( It's a joke. Get over it. )
damn. you'd beaten me to it, dude.
Guatemalans and Hondurans, of course. ;)
who do the Guatemalans and Hondurans use? Gringos?
Salvadorans, because they're so cheap.
coolies
ESPAN-LOL
The EM countries might want to consider pulling together and putting the hard squeeze at the top for a global solution. Otherwise they're going to go down the fastest and hardest first as things progress on the current What If The "Crash" Is As Rigged As Everything Else? plan.
http://www.zerohedge.com/sites/default/files/images/user92183/imageroot/...
I do not for one moment, Sirs, believe that there are any construction workers left in Mexico.
25% of the Mexican population is currently in America. More than 60% of the Israeli population is in America. Coincidence?
That 60% figure for sure is not correct
edit:
Israel has 8.2 million people
140,000 with dual citizenship live in the US
50,000 do not have US citizenship
which means that either 1.4% or 0.6% of the total population of Israel lives in the US
There are about 5.3 million jews in America. Jew = Israeli. Check what nation's armed services they dd their service in. Is the butcher of Chicago Rahm Emanuel an American? His claim has less merit than Obie's. FU dual citizens.
Apparently,
the criminal syndicates operating within Mexico
are amateurish by comparison to the global operators.
I wonder which US conglomerate or hedgie wants the largest construction company in Mexico...
It would be most cool if its Trump. Payback is a motherfucker.
At least it wouldn't be war profiteering this time.
WARREN BUFFETT.
I had no idea he was a MOT.
You'd think the fuckers would've learned a lesson after '94 but NOoooo.
Planted fiction. All Mexican construction and other workers are in the United States.
Ask the "Soviets" how they felt in 1991 when Ruble went freefloat.
something heavy is up with the MXN
agustin carstens
vámonos mi chingón!