Showcasing the Best & the Brightest:
Kalalloo Generation Next Showcase
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Tomorrow's Future Youth Leaders
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Robert Paul Jr, Artist/College Student
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An Economic Outlook of the Caribbean & Latin America Region
Matthew Beem, Economist
MoneyTalk/Kalalloo.com Contributor
Matthew A. Beem has more than a decade of hands-on experience in
Latin American financial markets and economic and political systems,
as an academic, a policy researcher, an economist, and most recently,
as an asset allocation strategist for financial exposure to the
region.
For more than two years, he worked for a think tank in Argentina
founded by the former finance minister Domingo Cavallo as the
economist for the Brazilian market. Later, he became an independent
business consultant for both American and Argentine companies wishing
to conduct business multinationally. For nearly three years, he
covered the region for the Stanford Financial Group, where he
formulated investment strategy to gain exposure to the region,
conducting quantitative and qualitative studies on ideal asset
allocation, by asset class and by country.
Matthew has authored many company publications on currencies, fixed
income securities, equities, and economies. Also, he has published
articles in the National Review Financial, online edition. Matthew
holds a Master’s degree from Stanford University and a bachelor’s
degree from Trinity University. Holding the Series 7, 86, and 87, he
is also a CFA Level 2 candidate.
An Economic Outlook of the Caribbean and Latin America Region
As in much of the rest of the world, Latin America has limped into 2009 following a very rough 2008, especially the second half of last year. The economic conditions soured significantly in the fourth quarter of the year, as global demand for the region’s main exports—commodities—withered away. Shrinking, and even negative, trade surpluses have put heavy pressure on currencies, while the unprecedented outflow of foreign investment only added fuel to the fire.
Looking back on the brutal year of 2008, several things have become quite apparent—that emerging markets, and hence Latin America, has not de-coupled from the developed world; that Latin America’s economies still remain highly subject to global market conditions; that commodity prices still have a significant effect on regional asset prices; that some countries have made much more strides in their macro management than others; that even though Latin America’s financial sector is small and low leveraged, it suffered just as much as the problematic banks; and that volatility still is extreme in the region.
These events shaped last year, and will almost surely be major factors in 2009. For all of the work that was done during the last boom cycle, the region suffered tremendously, due to troubles abroad (instead of mostly at home, which has been a distinct change from previous crises). In fact, one observer noted that Latin America has enough economic troubles on its own, and troubles abroad have had such a profound effect that many have come to the conclusion that the region can “never win”, as he stated. In spite of this negative but insightful mentality, Latin America is a very different place, especially for countries like Brazil, Peru, Chile, and even Colombia, than just a decade ago, when the last major crisis was occurring. This fact is a true source for optimism-- economically, socially, politically, and financially—that Latin America can get back on track quicker and stronger once normalcy returns. The only problem is, though, when that will occur.
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