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Everybody like AMLO…

9 February 2017

Via La Politica Online (my translation*)

Over the last few weeks, the questions international investors have been asking Mexican analysts and financial strategists have changed. Although it sounds crazy, the main issue is not the impact of the Donald Trump administration’s economic policies, but the standing of Andres Manuel López Obrador in the polls for the 2018 presidential election.

“On a recent visit to New York and London all customers wanted more details on AMLO’s personality and economic thinking, said one important banker interviewed at the Secretaría de Hacienda y Credito Publico (the Mexican Treasury

From the heart of Wall Street, comes the strongest indication of growing interest. In a memo sent to clients following an analysis in Mexico, Goldman Sachs wrote:

“In recent weeks AMLO has moderated his public stance, approached various businessmen and instead of trying to take advantage of the complicated moment facing the Enrique Peña Nieto administration in light of the threats from Donald Trump to gain political dividends, [AMLO] has taken a statesman-like stand, supporting the president.”

Goldman Sachs is the most important political player among financial institutions at the moment. Former executives hold key positions in the Trump Government. In fact, Goldman Sachs’ previous president, Gary Cohen, is chief economic advisor to President Donald Trump and Director of the United States National Economic Council.

Now wanting to anticipate the political climate in Mexico, Goldman Sachs is even preparing a summit in New York for the middle of this year, to discuss with the Tabascan and his team their economic agenda. Alfonso Romo, the Monterrey biotech and banking magnate, who recently joined AMLO’s team, is expected to be a key figure in any meeting.

A former supporter of Vicente Fox, Romo said he is not surprised that Goldman Sachs would like to speak with him, given his role as on the External Advisory Board for Latin America and the Caribbean.

Before Trump’s electoral victory, financial markets feared a potential AMLO triumph over the weakening PRI. There was talk of “AMLO insurance” by somoe investors, and advisors to mitigate the potential financial and stock market consequences for a possible triumph of Morena’s leader.

“López Obrador is no longer a danger for Mexico, today thanks to the change of attitude. With recognition of his greater chances of success many are approaching AMLO, seeing him as a winner and wanting more details on his plans and strategy,” said the Goldman analysts.

I know some would disagree with me, and I expect many on the Mexican left will be… and are… seeing Alfonso Romo’s support for AMLO as some sort of “sell-out” to capitalism… I don’t see any real change in AMLO’s long-stated economic policies here.  His spat with bankers back during his time running the Federal District had more to do with building codes than anything else (he didn’t want banks to close up shop… he wanted them to put in bullet proof glass and better security systems.  Seeing the Federal District paid for the police who stand around banks, it was quite a reasonable request) and I don’t see that he’s opposed to the existence of banking or foreign investment, per se… just that his program has always called for more internal market development, more control over resource development,  and expanded social spending.  Nothing that should scare off savvy investors.


* Not having seen the Goldman Sachs memo, and going by a Spanish-language report, I can’t vouch for the exact wording of the direct quotes. I added a few details about both Alfonso Romo and Gary Cohen to clarify their positions.

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