Fitch Downgrades Mexico to One Step Above Junk, Plus Trump Lies of the Day
Please consider In Double Whammy, Fitch Downgrades Mexico and Moody’s Lowers Outlook.
Cutting Mexico’s rating to BBB, nearing junk status, Fitch said the financial woes of state oil company Pemex were taking a toll on the nation’s prospects.
Fitch said mounting trade tensions influenced its view, according to a statement issued shortly after the end of a meeting in the White House in which Mexican officials tried to stave off tariffs U.S. President Donald Trump has vowed to impose next week.
Following a surge in mostly Central American migrants arriving at the U.S. border, Trump threatened blanket tariffs on Mexican imports if it did not do more to stem the flow.
“Growth continues to underperform, and downside risks are magnified by threats by U.S. President Trump,” Fitch said.
The latest moves by the ratings agencies on Mexico’s sovereign rating could also ratchet up pressure on the oil company’s own rating, which is teetering on the brink being downgraded from investment grade.
One Step Above Junk
Don’t Exactly Count on Trump
I believe he means one step above Junk.
Just Like the Wall
Who cares, it will pay for itself.
Mexico Peso vs US Dollar
Up is down in this view.
Today’s 1.5% move does not even register on a long-term chart.
Since mid-2008, the Peso has declined (19.59-9.85) / 19.59 = 49.7%.
If Mexico defaults or devalues the peso, it will sink much further.
Trump won’t exactly like that as it will make Mexican exports to the US much cheaper.
The higher the tariffs go, the more US customers will pay.
Such is the bragging of a complete economic illiterate.
By the way, what the heck happened to the idea that Mexico would pay for the wall?
Lie of the Day
Republican senators sent the White House a sharp message on Tuesday, warning that they were almost uniformly opposed to President Trump’s plans to impose tariffs on Mexican imports, just hours after the president said lawmakers would be “foolish” to try to stop him.
Politico reports Republicans threaten revolt, may block Trump’s Mexico tariffs.
At a closed-door lunch Tuesday, two Trump administration officials laid out the president’s view: There is a crisis at the border and Mexico needs to stem the surge of migrants to avoid the new levies.
Senate Majority Leader Mitch McConnell (R-Ky.) told reporters the party spent “almost our entire lunch” going back and forth with the administration and warned afterward “there is not much support in my conference for tariffs, that’s for sure.”
Summing up the mood of the lunch, Sen. James Lankford (R-Okla.) said, according to sources familiar with the matter: The administration “is trying to use tariffs to solve every problem but HIV and climate change.”
In March, 12 Republicans moved to reject Trump’s emergency declaration on the southern border, eight short of a veto-proof majority. But given the strong free-trade inclinations of the Senate GOP, the president could face a far larger condemnation if he ends up moving forward on the tariffs.
Sen. Ron Johnson (R-Wis.) told the administration officials that they could not count on the same level of support this time, according to two sources familiar with the meeting.
Increasingly Preposterous Lies Over Time
Trump actually had the gall to Tweet “Republicans support the President on Tariffs with Mexico all the way.”
Trump’s lies get more and more preposterous over time.
Mike “Mish” Shedlock