What's been spent so far

to "smooth the movements of the exchange rate"...

October US$13'096 million
November US$ 1'285 million
December US$ 797 million
January US$ 988 million
February 1-20 US$ 2'307 million

that's US$18'473 million, more than a fifth of Mexico's international reserves on December 31, 2008.

Mexico's balance of payments for 2008

It's out! The annual figures don't look bad, but !ojo! with the fourth quarter numbers. What you see in the fourth -- which is a better guide to the present -- but not in the annual figures are two especially significant changes:

1) Massive outflows of portfolio investment in the fourth quarter. Foreigners fled both equities and money markets.

2) Substantial repatriation of assets held abroad in the fourth quarter, a sharp contrast to the first three quarters when assets held abroad continued to climb.

Bad and getting worse...

At 25, February's consumer confidence reading in the US is the lowest recorded since the inception of the index in 1967.

As bad as things are, consumers only expect them to get worse. Almost half (47%) of people surveyed expect fewer jobs over the next six months; that's up ten percentage points from January's read. Over two-fifths of those surveyed expect business conditions to deteriorate over the next six months, up from last month when 31% expected conditions to worsen.

More on the "N" word...

Alan Greenspan, former chairman of the Federal Reserve: “It may be necessary to temporarily nationalize some banks in order to facilitate a swift and orderly restructuring.”

The "N" word...

The idea that nationalization is the most effective way to contain the financial crisis is gaining ground in the US. An editorial in the New York Times today argues that "it looks as if the best way to get from here to there [a sound privately owned banking system] is for some of the banks to spend some time in the government’s hands."

As the financial crisis drags on, the unthinkable is becoming "thinkable".

http://www.nytimes.com/2009/02/22/opinion/22sun1.html?th&emc=th

Banco de Mexico cuts Mexico's reference rate

As expected, the central bank cut the Mexican reference rate this morning. What wasn't expected was that the reduction was only 25 basis points (1/4% point) instead of 50 basis points. Banco de Mexico justified the reduction to 7.5%, arguing that growth is more of a problem than inflation.

The US$787 billion stimulus package

Larry Summers, the White House's chief economic adviser, started out describing the stimulus as “timely, targeted and temporary”. He now describes it as “speedy, substantial and sustained.”