Kapitel 402: Chapter 402: The Mexican Peso Crisis
On a private jet from Sacramento to Los Angeles, Arthur held Jennifer Connelly on the sofa while drinking champagne.
"Is everything taken care of?" Jennifer Connelly leaned into the man and casually undid Arthur's belt.
"Yeah, all taken care of," Arthur said, then kissed the woman on the lips.
Soon, Jennifer Connelly was kneeling in front of Arthur, leaning downwards.
"Honey, haven't you had enough in the past few days?" Arthur smiled as he ran his hand through Jennifer Connelly's hair.
"Mm, just to keep you in line when you go back!" said the woman indistinctly.
...
In Orange County's Irvine company headquarters in the Greater Los Angeles area.
Joan Irvine Smith handed Donald Bren a share transfer document. "Sign it. I've already talked with Fidelity Investments, Blackstone Group, TPG, and some others. Your shares in Irvine Company will be taken over by these companies. Your partners also agree with our decision. I bet you received Willie Brown's message too. I don't want to wait for Arthur to come back and handle it. He's on his way to Los Angeles now!"
Donald Bren sighed, glancing at the representatives behind the other party, especially Emily Shead from California Pacific.
"Southern California," Donald Bren sighed as he grabbed a pen and signed his name. From now on, he had thoroughly lost his foothold in Southern California real estate.
"You were too greedy," Joan Irvine Smith said disdainfully, looking at Donald Bren. "Irvine Company was almost entirely under your control."
Irvine was Southern California's tech coast, home to many tech industry clusters including medical devices, biomedical tech, computer hardware and software manufacturers, and automotive design and electronic entertainment.
Now, the goal was to turn Irvine into a new economic area with excellent educational tech, residential, and entertainment culture.
...
When Arthur returned to Los Angeles, the Mexican government next door suddenly announced a 15% devaluation of its currency, the peso.
This decision quickly caused great panic in the market, leading foreign investors to dump pesos frantically and buy up dollars, causing the peso's exchange rate to plummet.
At California Pacific Investment Company, Arthur had just finished listening to Emily Shead's report on Irvine Company.
Then they discussed Mexico's current economy:
"On the day the Mexican government announced it, the exchange rate of the peso fell from 3.47 pesos to 1 USD to 3.92 pesos to 1 USD - a 13% drop in one day!"
Arthur's mouth twitched, "How could they dare a direct devaluation now when Mexico has a huge trade deficit? Depend on agricultural products and oil to increase exports?"
Agricultural products were currently worthless, and oil prices were very low. Mexico's economy was mainly reliant on short-term external debt.
The correct approach should be to strengthen control of financial markets, have the government guarantee the peso, boost investor confidence, and slow down the privatization of domestic land to ease domestic tensions.
"The next day, the peso fell another 15.3%. Now, three days after the announcement, the peso has dropped a total of 42.17%, and Mexico's foreign exchange reserves have decreased by over 4 billion USD in these three days," Emily Shead calmly stated.
"Capital outflows are like pulling the rug out for the Mexican stock market. The entire market is down, and other Latin American countries like Argentina, Brazil, and Chile, which have similar economic structures to Mexico, are also facing various degrees of debt burdens, trade deficits, and overvalued currencies.
The financial crisis in Mexico is having a considerable impact on them, making some foreign investors start selling off stocks of other Latin American countries out of fear that the financial crisis will spread!"
Arthur shook his head. He wasn't clear about the financial environment in these Latin American countries nor did he plan to dabble in their stock markets.
"Keep an eye on Southeast Asia. Forget about Mexico. Don't expect a dramatic market rise post-crisis," Arthur stood up. "Being too close to the U.S. is original sin. This round of privatization in Mexico will result in millions of unemployed farmers and workers who will turn to drug cartels to grow marijuana and poppy to support their families!"
America's neoliberal economics and trade practices have pretty much doomed Mexico.
Recently, California's legislature narrowly passed a new immigration proposal, the infamous Proposition 187.
Proposition 187 barred undocumented immigrants from receiving healthcare, public education, and other public services in California.
With the North American Free Trade Agreement taking effect this year, a large influx of Mexicans came to the U.S. seeking better opportunities.
California saw a massive increase in illegal Mexican immigrants this year!
As a conservative, Governor Pete Wilson fought to get Proposition 187 passed.
However, within a week of its passing, one federal judge issued a temporary injunction against the legislation, and another issued a permanent one!
Out of the nine justices on the Supreme Court, one serves as the Chief Justice. If Proposition 187 is ruled unconstitutional, California cannot enforce it. Though states in the U.S. have substantial autonomy, they must comply with the U.S. Constitution!
...
That evening, Winona Ryder returned to her mansion in Beverly Hills after attending the promotion event for Little Women.
"Dumb and Dumber is killing it at the box office," Winona Ryder murmured as she lay in Arthur's arms in the bedroom.
"It's Jim Carrey's magic. He's had three blockbuster movies released this year," Dumb and Dumber grossed over $40 million within ten days of its release.
"You've got a good eye," Winona Ryder said, kissing the man's chest. Little Women would officially release on Christmas Eve.
Arthur rubbed the woman's body, "Too bad Jim Carrey's fee has skyrocketed now!"
This comedy, Dumb and Dumber, had a production cost of only $17 million, and over $5 million of that was Jim Carrey's fee.
From now on, such bargains would be gone.
"Of course, just look at Jim Carrey's box office draw now."
*****
https://www.patreon.com/Sayonara816.
Wöchentlicher Energiestatus
-- Power-
Rangliste 
-- Power-
Stein