I’m collecting oddities and ironies from the financial crisis, and yesterday I came across another great one.  Citibank is in trouble in Mexico.  Not because Mexico has been taken down by the financial crisis – Citibank’s operations in Mexico are in fact generating 15% of the bank’s global profits – but because the Mexican Supreme Court is likely to rule that Citibank’s ownership of Banamex  is illegal. Why, you might ask? Because Citibank is partially owned by the US government, and the Mexican constitution does not allow foreign governments to own Mexican banks.

The history of Mexican financial institutions in the 20th century swung back and forth between government and private ownership, landing firmly on the side of private ownership by the 1990s as Mexico prepared for further integration with the US and Canadian economies via NAFTA. Banamex, Mexico’s largest bank, has been at the centre of debates about money and politics in Mexico since the Revolution, when Pancho Villa took it over to prevent it acting as the Central Bank to dictator Porfirio Diaz. It was privatised, nationalised, privatised again and then recapitalised by the government in the wake of the 1995 Tequilla Crisis. In 2001, Citibank purchased it. Now, less than a decade later, Banamex has been renationalised by the back door by the big neighbours to the north. The same neighbours which advocated for privatisation so vociferously in the 1990s? The ones whose economic model the Mexicans were imitating when they re-established private financial companies? Yes, those same ones.


The casualties from the financial crisis keep rolling in, in the most unlikely of places. I’ve mentioned in previous posts that there are a number of unexpected losers from this financial crisis: the Venezuelan government, who given their anti-American rhetoric had a surprising amount of money invested in the failed investment bank Lehman brothers, and sovereign wealth funds in countries like Singapore, who were initially singled out as posing risks to the countries they were investing in.

Today, however, I read about the most unlikely candidate of all to be suffering big from the collapse of modern capitalism: the Church of England. It turns out that the Church of England’s investments have lost almost £1.5 billion of value since the onset of the financial crisis, mostly because they had their money invested in hedge funds. Seems that the CoE has moved beyond the typical investment portfolio of religious institutions (property, jewel-encrusted chalices and gold relics) to something much more modern.

As today’s FT reports (on the front page, no less, some editor must have found the news as amusingly ironic as I did) that the Church has submitted a letter to the UK Parliament advocating that new EU legislation regulating hedge funds take a light-touch approach. To quote Voltaire: when it’s a question of money, everybody is of the same religion.

SWPL at LSE – I like it!

October 6, 2009

A lot of serious people come through LSE to give talks. Last week, the Hungarian Prime Minister was here. Last spring the Russian president was here; this summer, academic Dani Rodrik was on campus. Paul Krugman is often here and many politicians, policy makers, journalists and other notables pass through. Tickets are almost always on a first come first serve basis, and often sell out within 2 minutes of them being available online. The combination of my child care responsibilities and my bad luck in never being quite quick enough to request a ticket means that, unfortunately, I don’t get to see many of the public speakers that come to LSE.

Some not so serious people also give talks at the LSE. Later this month, one such person will be here: the author of a very funny blog called “Stuff White People Like.”  While usual LSE speakers tell us what Keynes would have thought about the ongoing financial crisis, what to do about terrorism or about the politics of oil, Christian Lander of SWPL will tell us why the urban middle classes (i.e. LSE students and faculty) like camping, buy sea salt or are interested in political prisoners (if you’ve got some time, it’s well worth browsing through some of the others – there are too many funny ones to cite). I’m sure that just by posting this, I’m marginally reducing my likelihood of getting a ticket, as free tickets to quirky presentations are one of the things that white people like…