{"id":80931,"date":"2009-12-14T10:53:00","date_gmt":"2009-12-14T15:53:00","guid":{"rendered":"http:\/\/www.businessinsider.com\/why-its-time-to-short-mexicos-peak-oil-economy-2009-12"},"modified":"2009-12-14T10:53:00","modified_gmt":"2009-12-14T15:53:00","slug":"how-to-short-mexico-ahead-of-the-coming-oil-production-collapse","status":"publish","type":"post","link":"https:\/\/mereja.media\/index\/80931","title":{"rendered":"How To Short Mexico Ahead Of The Coming Oil Production Collapse"},"content":{"rendered":"

\"mexico<\/p>\n

Analyst Tom Conrad has an excellent piece on Mexico’s peak oil crisis at AltEnergy.com<\/a>, wherein he explains why shorting Mexico Country ETFs would be a good call.<\/p>\n

[T]he Mexican Federal revenues dropped 12% in the first half of 2009 because of falling oil production<\/a>.  This is not a one-time hit to the budget, but part of an ongoing decline.  That means that Mexican government revenues are permanently 12% lower, and likely to decline further as oil production declines further.  <\/p>\n

…<\/p>\n

With declining revenues, default and\/or devaluation seems almost inevitable.  No option would be good for Mexican companies.  <\/p>\n

Shorting Mexico<\/strong><\/p>\n

If the Mexican Governments’ fiscal situation is so dire, it makes sense to short Mexican companies, especially if the short is part of a hedge against exposure to world financial markets.  With a hedge<\/a>, the investor only needs to be confident that things are liable to get worse in Mexico more rapidly than elsewhere, or not get better as quickly.<\/p>\n

Read the whole thing here.<\/a><\/p>\n

Join the conversation about this story »<\/a><\/p>\n

See Also:<\/b><\/p>\n