Mexico’s peso has taken a hit in value after the country’s finance minister decided to quit his job over disagreements with the president.
The decision by a top adviser to the Mexican president to resign while denouncing conflicts of interest in the government stunned the nation and its financial markets.
After news broke that the finance minister was resigning, the Mexican Peso lost a lot of value.
Finance Minister Carlos Urzua’s abrupt decision to quit on Tuesday was the first major cabinet loss since Andres Manuel Lopez Obrador took office in December. The scorching tone of his resignation letter, from a public official known for extreme politeness and addressed to a president who made fighting corruption his central campaign issue, made the departure all the more surprising.
The unexpected departure of Carlos Urzua seven months into Lopez Obrador’s presidency sent stocks and the peso plunging and renewed worries among investors still wary after the president’s cancellation of a $13-billion airport project that was underway outside Mexico City.
In his resignation letter, Urzua called out corruption and conflicts of interest inside the government.
“I’m convinced economic policy should be based on evidence, considering the various effects it may have and free from all extremism, whether from the right or left,” Urzua wrote in the letter posted on his Twitter account, adding that decisions by Lopez Obrador’s government on matters of public administration have lacked foundation. “However, during my term, these convictions weren’t shared.”
His tweet already has more than 25,000 retweets and nearly 7,000 comments.
By midday, the peso had fallen over 2% against the US dollar – a major slide for a currency considered to be quite healthy.
Within an hour, AMLO, as the leftist leader is known, nominated Arturo Herrera, Urzua’s deputy, to replace him. That helped to limit a tumble in the peso, which fell 1.2% at 3:23 pm local time, stopping losses of as much as 2.3% that had followed the publication of Urzua’s letter. The nation’s main stock index fell as much as 2%.
Markets are worried because according to many sources, Urzua was seen as the most responsible official at the finance ministry.
Many have admitted that it was not a secret that there were disagreements within AMLO’s government over economic policy.
Urzua had publicly opposed a law proposed by Lopez Obrador’s Morena party to reduce bank fees. He also opposed a proposal that the government dip into central bank reserves to fund infrastructure plans.
Some bickering is to be expected with any government, according to Coutiño, “there should be a consensus in terms of what the administration wants to do in the country.”
And the news simply shocked many, since Urzua had been one of AMLO’s most vocal allies and supporters.
Urzua has been a long-standing ally of Lopez Obrador, having been his finance secretary when AMLO was mayor of Mexico City at the start of the last decade. Herrera is also a former finance minister of AMLO’s in the nation’s capital.
According to reports, Escamilla was found lifeless with her body skinned and many of her organs missing. At the scene, a 46-year-old man was also discovered alive. His body was covered in bloodstains and he was arrested.
As of this story wasn’t troubling enough, local tabloids and websites managed to bring more tragedy to the victim and her family by splashing leaked graphic photos and videos of the victim’s body. In a terribly crafted headline, one paper by the name of Pasala printed the photos on its front page with the headline “It was Cupid’s fault.” The headline is a reference to the fact that the man found at the scene was Escamilla’s husband.
According to leaked video footage from the arrest scene, Escamilla’s husband admitted to stabbing his wife after a heated argument in which she threatened to kill him. He then claimed to have skinned her body to eliminate evidence.
Mexic City’s mayor, Claudia Sheinbaum, revealed that prosecutors will demand the maximum sentence against the alleged perpetrator.
The publication of Escamilla’s mutilated body has sparked discussions regarding the way in which reports about violence against women are handled.
Women’s rights organizations have lambasted the papers that originally published photos of Escamilla’s body and Mexican President Andrés Manuel López Obrador also expressed criticism of the media’s response to the brutal slaying.
In a press conference on Thursday, President López Obrador expressed his determination to find and punish anyone responsible for the image leaks. “This is a crime, that needs to be punished, whoever it is,” he stated.
Money is a topic that is difficult to talk about. Traditionally, society has told us that there are three things that we should not talk about in polite company: religion, politics, and money. Well, politics seems to be the only thing anyone talks about these days. As for religion, well, I’m of the “to each their own” policy. But money is something that we often still ignore — especially when it comes to frank discussions about debt.
Nobody likes to admit that they have debt. Whether it’s credit card debt, student loans, or paying off cars, most of us have something that we’re keeping quiet about. According to CNBC, 70 percent of college students are graduating with a “significant amount of loans” which total $1.5 trillion in debt for the over 44 million Americans who have student loan debt. In fact, a recent survey revealed that two-thirds of millennials have at least $10,000 in student debt and more than a third admitted to over $30,000 in debt, according to Inc.
Even worse, 42 percent of those that had more than $30,000 in debt were women and 11 percent of millennials have over $100,000 in student loan debt. Unsurprisingly, credit card debt is actually even higher for millennials (at 46 percent) and car loans come in just behind student loans (at 34 percent). Then there’s also medical debt to think about, as well as the 20 percent of millennials who actually have a mortgage.
Some of us, like me, have debt in all of the categories.
When my husband and I met and moved in together just six weeks into our relationship, we did it because we were in love and knew we wanted to be together for the long haul.
However, what we didn’t know at the time (and came to learn very quickly) is that we both came with a heaping amount of debt. Now, two and a half years into our relationship and nine months into our marriage, I can tell you that our debt has only increased: Collectively, we have around $150,000 in debt — about $100k of that in student loans, $40k in car loans, and another $10k in credit cards and medical bills. Add to that the fact that we just bought our first house and, well, our financial situation has gotten a bit more complicated.
It’s not easy to talk about finances, and it’s especially not an easy thing to do with someone you love. Sadly, money is often cited as a common cause of marriages falling apart — which is precisely why my husband and I are trying to tackle these issues sooner than later. I know that we won’t get out of debt any time soon, but having a secure financial plan is a good way to step into our future, together. So, shortly, after getting married, we decided to speak with some financial experts about how exactly to tackle our $150k in debt… WITHOUT driving each other crazy or stopping some of our other personal goals (like traveling together or having kids in the next couple of years).
Nora Dunn, a former Certified Financial Planner and blogger behind the financially savvy travel site, The Professional Hobo, told us that a lot of it depends on what we as a couple are earning and what our goals are. Dunn advised that my husband and I evaluate the importance of each of our goals. Was buying a house more important than taking vacation? How much did we expect to spend on a house based on the market in our area? According to her, it was all about taking an ‘everything in moderation’ plan, where we would examine our take-home income and expenses, and then divide our disposable income between different goals, depending on how our goals are prioritized.
After some discussion, we decided that prioritizing goals, and dividing our income accordingly, definitely seemed like a good place to start. In fact, Shana Bickel, CPA and Financial Coach, mirrored that advice when she told me that “it is not for me to tell the couple how to prioritize their financial goals.” The important thing, she says, is “to identify and get very clear about those goals and then develop a plan to pay off debt while saving for a home and allowing travel that makes sense for their financial health and well being.”
Another financial expert took a more straightforward approach.
“Sell those cars!” said Lynne Somerman and The Wiser Miser. “If you’ve got big financial goals like this, there’s no situation where I can recommend $40K in car loans when you can buy a reliable used vehicle for $10K. Even assuming you still need two cars, that’s $30K that you’ve now got towards a down payment. After that, it would depend on the type and interest rates on the student loans. If they’re private loans, go aggressively after them. If the interest is higher than about 4-5% on the student loans, they’d be my next priority. If their income is high enough, you could do both here.”
“Get those cars paid off and drive them forever!” he advised. “You don’t need a new car every two or three years. My car is paid off, and I plan to drive it forever. Each of those car payments is like a trip to Europe each year. Would you rather have a brand new car or a trip to Europe?”
He’s definitely right about that, which is why we have made paying off our cars our #2 priority (after paying off our credit cards), since we’d also like to save for an international trip in the near future. Rae also reminds me that, although student loans are important, so is saving for retirement.
“The student loans are going to take a long time to pay off. Get serious about them, but make sure to contribute to your retirement at least enough to get a company match,” he said. “This will be like free money from your boss, and the government will give you break on your taxes.”
Meanwhile, Ashley Feinstein Gerstley, a money coach who runs The Fiscal Femme, said that it is all about opportunity cost.
“We can only use or spend each dollar we have once, no matter how much or little money we have,” she reminds me. “How can we use it in a way that will maximize our joy per dollar in the shorter and long-term? It’s about looking at each option and choosing consciously. If a couple is paying down their debt and that’s really important to them but they also want to travel, they might decide to let go of expenses in other areas to make that work. What expenses aren’t bringing them much joy? Would they rather live in a less expensive apartment for the time being so that they have more money to travel? When we take a look at each expense annually (including our bills) it’s much easier to see where our money is going and decide if we want to allocate it any differently.”
Taking a look at our overall finances, my husband and I were able to use this advice to devise some financial goals, set some priorities, create a payment plan, and figure out what we want to save for.
It took some serious negotiating but we came away with a clearer picture of our finances. It’s not going to be easy, mind you. Having debt as a couple is difficult, but unfortunately, something that almost all of us face these days. If you don’t have student loans, then you might have a car payment or credit card debt or medical bills from that time before ACA when you didn’t have health insurance and ended up in the hospital (guilty!). But ultimately, the best thing you can do for yourself when it comes to your finances, whether you are coupled up or not, is to do the work to figure it out.
As Rae put it, “Get serious about your finances now — it won’t get easier when you have kids. You may make more money but you will be busier and tired. Parenting is hard. Just saying.”
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