Happy New Year

This year surprised the world because of the fall in assets all over the world, and a dark outlook for the economy in 2009. Halfway through the year we feared accelerated inflation and nuclear experiments in Iran. Today we have a world recession. The sharp fall in the price of oil, instead of benefiting importing consumers, created a liquidity crisis by stopping the recycling of rich and oil and resource exporting countries’ surpluses towards the financial markets.

That is the nature of surprises. By definition they come unexpectedly. While peaking at 2009, it is worth thinking about what can happen, good and bad, in order to be prepared and be able to handle what happens gracefully.

There are great opportunities. There are financial bargains everywhere. Those with liquidity will be able to invest their savings little by little in a well diversified portfolio, to provide for the needs in their future. But those that invest will have to be able to handle great economic, political, and financial volatility, and maintain their discipline no matter what happens.

In the United States, politically there is change in the air. President elect Obama has chosen an intelligent, well trained and experienced cabinet, with an open mind towards dialogue and a variety of opinions. But there is no doubt that with the rise in importance of the executive power in the economy, a fall in productivity will be felt over the long term, unless fiscal intervention is limited and austere, and it does not take indefinite hold over the budget. Unfortunately fiscal policy is less agile and more sensitive to political contradictions than monetary policies. A strong and determined cabinet will also create controversy and confusion sooner or later, both internally and internationally. We all hope that the wise and well tempered Obama can orchestrate his cabinet towards policies both daring and sensible.

In Venezuela they are getting ready to discus and vote on a constitutional amendment that will allow for the indefinite election of the head of state. That does not seem very democratic, independently of how many people vote for it. It seems ironic that voting for a kind of monarchy without any balance of power would be considered a democratic process of regime. In any case, the economic and political outlook for Venezuela is bleak for 2009, except for those that manage to get rich even though the country grows poorer. People adapt to a lot of what is happening, hoping that with patience and dedication they can lift themselves.

The end of a year is a good time to make healthy resolutions for the coming year. It is important to make everyday and all of our actions relevant. I send all my readers my heartfelt wishes that they maintain their sense of humor despite any political or economic tragedy they have to go through. I wish you can keep your spirits whole in order to encourage your loved ones to keep their personal integrity when so many others are losing theirs. Finally, I wish you the capacity to live life with imagination, grace, creativity and relative peace. Enjoy the music, good books, the lunch and talks with friends, some good hallacas, pan de jamón, ponche crema and wine. I will do the same and ask the Gods who may listen for a Happy 2009 for all.