We are pleased to have with us today Darren Narayan Executive Vice President of the world banking group at Norwest Bank, Minnesota who will share with us the latest developments in the Mexican financial situation. We are fortunate to have such a such valuable expertise here in our community. Mr. Narayan joined Norwest Bank in 1969 and since 1992, he has been Executive Vice President and head of Norwest World banking Department, which includes the national and international divisions. Mr. Narayan serves as director and past president of the bankers Association for foreign trade has written and lectured extensively on the subject of global trade and economics and is a guest lecturer for many universities in the US and abroadHe received his education at the University of London the University of Wisconsin and Harvard University School of Business following his presentation questions will be addressed from the audience Jane Mara SEC executive director and Gloria mcclenahan of Minnesota meeting will move among you to manage the question and answer session. You may use the slips of paper on your table to jot down questions for discussion. Please join me now in welcoming our speaker for this afternoon, Darren Narayan.Good afternoon to all of you here and on the radio. I was only informed this morning that this would be on the radio. So I was talking to my daughter at home. She said be sure and speak slow and speak in English. So if you think I said something wrong, I probably didn't it's just the way it sounds when I speak. I also wanted to let you know that when I was first approached about potential speakers for the Minnesota meeting and there was a discussion on Mexico and so on I said I suppose I could speak and Jane looked at me horrified and said most experts are from out of town and you're not from out of town and I said just ask my family if I'm from out of town and not because ISeven different 70% of my time away from town. So she said you qualify. Also when I saw the announcement essentially talked about my being an investment expert. My wife was horrified by that. She said your investment strategies are not a testimony to any expertise on your part. So I'm neither an investment expert not an economist, but there is something I do follow from an economists point of view. That is that I'm very good at explaining what happened and not so hot about what's going to happen. So what I would like to do this afternoon is to speak to you informally, I as my secretary knows much to her Chagrin, I don't prepare speeches. I just jotted down some notes on a flight last night from New York, and I'd like to share it with you. But I also like to share with you the fact that for the past 25 years. I have followed this stuff day in and day out night and day I think about it all the time.So if I were to prepare any remarks, it will be 50 pages long and being from India. You ought to know that there are two things Indians do very well one is to give long speeches second thing. You can guess we have a billion people in the country what I want. What I would like to see what I would like to do is to speak about what happened in Mexico and why what are some of the conditions present today that that auger for we know what kind of future are we looking at? I would also like to talk about why are we so traumatized by what happened? This time is so much fun to watch so much company in my misery this time whereas in 1985, we were one of the few people that worried about Mexico. So I'll talk about that. How is it different than in 1985 and the what's the Outlook near and far I would also like to talk about the impact of this on rest of Latin America, particularly, Argentina and Brazil two major countries in Latin America as if you will microcosms of what the what the tequila tequila effect is, and I'll do all of that in less than 20 minutes and so let's go You know, first of all, I like to think of things in the context of Global geopolitical Order of things and in nineteen about four five years ago. Our former President Bush talked about a new world order and when he spoke about it, we all typical of for Saturday Night Live type of scenario people made fun of it. But the fact is that a lot of people in foreign countries took that to heart the new world order that we promote gated so much back then was based upon the following economics and commerce proceed superseded politics any time of the day and good economic policy is good political policy and therefore practice good economics politics will take care of themselves and a part of that whole new thinking was that we told the country for example of Mexico that you join with us in in an organization called NAFTA and And NAFTA would enable you to do really industrialize your economy. Bring you up the curve very very fast and make you an equal partner of the United States Canada for now and rest of the world later and Mexicans who always believed miracle was around the corner felt that NAFTA was their ticket to success and the took it to heart and Mexico which has always had a system where the pier the political party PRI took care of the politics and the president supposedly took care of the economics. And therefore in the order of things after Miguel de la Madrid. They elected Carlos Salinas de gortari as president and Salinas us claim to fame was economics and same thing happened in rest of Latin America number of countries economics and finance ministers became extremely important these people have become Apostles. If you will for the new mantra the Mantra was very simple that there are three or four things. You must do in order to really Bring prosperity to your people. And if you bring prosperity of people under a new democratic system, you will have continued power to run the country's wealth. So these people have subscribed to three isms as I put it privatized liberalize globalize privatized liberalized globalize. They have bought into it Lock Stock and Barrel and they said that's it. If we subscribe to this Theory will be fine and Mexico was Chile and Mexico or the first of the two countries to subscribe to this. No. They have privatized in Mexico almost lot of things except he makes and couple of other things Mexico has privatized quite a bit has taken leadership in it. They have liberalized the rules under which businesses operated in Mexico and they have globalize their economy in the sense of reducing the tariffs and as London economies put it last week. They have exposed Mexican companies to the competition from American companies and guess what American companies in many cases one out, but that's what Mexico has done. Chile has done Argentina has done now Brazil is doing in all these countries subscribe to it. But what happened in Mexico, however, is that Mexico has has had expectations of NAFTA and America has had expectations of NAFTA and those two expectations were in somewhat of a conflict and they are these two countries did not realize it. For example, Mexico fully expected to be a partner of the United. States to do more or less American has our economy westernize our economy and money started to flow into Mexico the last year. They had a twenty eight billion dollar current account deficit which is the trade deficit plus the current amortizations on the debt the finance debt by borrowing from mutual funds in America and and Pension funds and so on and so on and so on lots of money was flowing into Mexico for a couple of reasons one is that the returns looked good second thing is there was a Euphoria among investment community that went from total total ignorance of Mexico to Great expertise in Mexico. I remember flying to Des Moines, Iowa once on and short flight but sitting next to me was a mutual fund one of the fund managers who kept telling me about how great investment in Mexico is I gave me his card sent me the stuff and so on and so on and so on I said, oh this is trouble this is what they're peddling to people all over the place. Mexico was never as bad as people said it was Mexico was never his great great as some of the funds managers have said it was so as a result. Lots of money came in 85% of the money that came into Mexico was hot money short-term money money that left could leave in a hurry only 15% was productive money, which is investment. So Mexicans use this 85% of the money in order to finance their current account deficit through the form of decibel nose and so forth and so on. So basically what happened in Mexico was three things one. They tried to cure the 28 billion dollar current account deficit which is 8 percent of the GDP in a hurry. They try to do it by devaluation and a combination of measures in do so doing what they have done is they have ignored the fact that the they have the new government was so sure of itself. They ignored the funds managers and others and didn't bother telling them about it. The third thing they have done is that they have done everything everything wrong about The Way They carried out their Education and not realized it as a result. What happened? Is that what should I be neighs a non-event became a major league event and became a nightmare for Mexico nightmare for Mexico become a wake-up call for Argentina and Brazil. That's really what happened. Now a question was asked of me earlier. Well, how much was this due to the incompetence? If you will of this video Administration, I just think that they were in a hurry to take care of this little devaluation problem before they launched into their economic programs and that little problem became a big problem and became the iceberg if you will of the Titanic trip, and as a result Mexico is in serious trouble and all of a sudden what it exposed people to ease that indeed Mexico has not turned the corner Mexico had such deep serious economic problems and Mexico also has a phenomenal political problems, which I worry about more about the future than I do about economic problems in Mexico. So those are the Things that have happened but at the same time mix it goes aggressiveness if you will or Cockiness, if you will in my opinion was a result of their feeling that Uncle Sam through NAFTA would not let them down and let them down. We surely did. I don't think the in terms of expectations Mexico thought that NAFTA was their ticket to be accepted into the global economic Community. There were reading to be rated by Moody's in a positive way and they were going to have all this new money and Judea was going to administer a great and growing economy, but on the other hand now, he's managing a turnaround situation in dealing with political issues and money has flown from Mexico. Now, we're back to where we were in 1982 83 84, not quite but we're almost there, but I'll tell you talk about that more in doing all of these things essentially the mismanagement of the devaluation as a Whitney McMillan said last week in a meeting. He's are we he said, you know, it should have been a non-event. But it became an event that's exactly what happened. Should they have solved the 28 billion dollar problem? Yes. Should they have devalued the currency in my opinion? Yes. Should they have done it the way they have done it. No, and that's the problem. So this exposed Mexico to some of the some of the issues that that exists. We'll talk about in terms of why are we traumatized by it? Why are we so concerned about it? Let me give you a perspective. The the core strategy for American economic growth in future is exports. United States is becoming becoming gradually becoming an exporting power. Whereas in the past in relation to our GDP. We were not we would be exporting about 550 billion dollars with a product in 1995. There was a plan of which almost almost 45% was going to go to Emerging Markets put 50% would have gone to Latin America, which is about ninety eight billion dollars of the 98 billion dollars. 48 billion were supposed to go to Mexico. So if you take if you subscribe to the Commerce Department's theory that for every billion dollars you have 20,000 jobs created, you know, a hundred million dollars would have created really two million jobs. And today the predictions are because of Mexico reducing the amount the import from the United States, which is predicted to be twenty two billion dollars this year 48 billion will go down to 26 billion. We would lose 350,000 jobs in America. Now we're talking but you know, what most congressmen we talked to most people on the hill do not understand these economics. Nobody articulates. These things the fundamental thing about Mexico to me Mexico is in the Strategic interest economic and political interests of the United States. And NAFTA was in the Strategic interest of the United States because a healthy prosperous neighbor to the South would Aid us immensely in many ways, but somehow that strategy is never a tick elated to point where even the 20 billion that we promised them is in Jeopardy. Our help came too late was it was coached into Draconian terms and too little and therefore it has not had the impact. It should have had on Mexico. It should have been quick. It should have been modest. It should have been unconditional. It didn't need not have been 20 billion. If you we came out very next week and said we are supportive of Mexico will do what we can to help them stabilize their exchange fund. It would have helped a lot. Now, if you look at European Community the one of the most successful economic unions and we did not look at them. We should have what they did was to create a regional fund for those countries like Turkey Greece and Portugal some of the poorer neighborhoods. Stuff England and France and Italy to buffer against these kinds of things when NAFTA was created, which was a great idea. I supported NAFTA is Justified for it a lobbied for it. I shamelessly talked about it all over the place. But the thing was when NAFTA was created we all made one mistake. We did not create a regional fund to buffer no exchange stabilization fund to help pay so and so forth. So that's the problem that has happened in Mexico. Now, let's look at what why are we so traumatized by it one is I talked about the jobs and exports second thing. Is that whereas in 1985 Gary Stearns former boss. Paul Walker could call our chairman Lloyd Johnson and say Lloyd I do want you to stay in in Mexico. Don't take your money out. There were 64 banks in the world that had 70% of Latin American debt in 1985 today. The bank's combined have less than 18% of Latin death and guess who has the rest Okay, and many many people like all of us in this room and many many more thousands and millions of people hold this death those people look to Moody's S&P and so on to rate these countries, so when recently when Clinton went to Canada New York Times had a headline that said Canadians are more worried about the visit by Moody's man before Clinton. That's exactly what's happening in Latin America. When a person from IMF or World Bank are Moody's visits its headlines in these countries. Okay, so that's what's going on. That's the fundamental systemic switch in the way. We've done things and that's what's different from 1985 is that lot more of us have a stake in these economies than we used to before and these are these countries did not realize that their faith their political fate depends upon individual investors around the world, but mostly United States, Now what what did regarding the regarding the bailout as we call it? And in the fund to me the way this is done. It's essentially we have ninety to a hundred percent interest rates in Mexico inflation will be 50% unemployment will be unbelievable. So for the next 18 months to two years Mexico will be traumatized by the by by the some of the medicine that we have administered. It's like getting chemotherapy for a normal flu. That's exactly what they got. So I'm more worried about the measures that are being taken to correct the problem. Let me tell you what's happened in the last three months since Gary said I'll inform your current developments Mexico for the first time in a long time has a trade has eliminated trade deficit. The current account deficit will go down from 28 billion down to five billion dollars or six billion dollars this year. So they'll be below one and a half percent of their GDP which they wanted it to be and they have taken extraordinary tough measures in the domestic economy. So they have really dealt with this problem differently than they did in 1985. I'll come back to that later when I talk about the future now, let me talk about Argentina and Brazil when when when the tequila effectors the college in South America took place Brazil and Argentina markets were deeply affected people examine them put them under a microscope looked at them and said what is wrong with you? Let's see there must be something wrong here. Well sure enough in you. You find it. I always tell my Auditors that when you look for something couldn't find it. But anyway, so whatever has happened here. Is that Argentina which has dollarized its currency. They have a currency fund based on which the issue pesos suddenly was being told you maybe devaluing when I going to devalue by how much and Domingo Cavallo the economics minister of Argentina has been fighting against that he took some tough measures when I was in Buenos Aires week before last and walking down the street in Buenos Aires. There was a newspaper. It says courts Carlos menem who is president running for re-election. It courts him saying focus on the economic Vitality. I'm bringing forget the political Deeds of the past now if that's not a mantra for South America and Emerging Markets, I don't know what it is. They're all running on the platform of Economics, you know and Enrique Fernando Cardozo in Brazil ran on economic platform. And and of course the Deo dead and and so so did does so is Them running on the coattails of koala who is finance minister most countries in South America, except Venezuela and the perhaps Costa Rica are going ahead with economic reforms. What did Argentina do as a result of all the problems Mexico is experiencing and the funds that they lost their last five billion dollars of Bank deposits in Argentina. They lost a lot of money from the stock market and so on. What did they do? They cut pensions? Eliminated government expenses privatized more increased taxes increased tariff, they've done a number of things that you would have thought undoable in the mid 80s instead of going populistic. They've gotten very very conservative, you know, so when I was talking to somebody in Argentina two weeks ago I said, it's interesting how you're going and isn't it a rougher Road for a politician to go than to blame the foreign bankers in the world bankers and everything else. He said, you know, it's a bit like flying the arrow float in Russia. If any of you been to Russia, first of all, you're never sure it's going to make it there who's going to fight the fly the darn plane in the plane would survive the trip, but it sure as hell beats driving in Russia. So if any of you been Russia, I know what I'm talking about. So that's about the way somebody put it to me and I thought that was very appropriate that marching ahead with liberalization globalization and and privatization is more important than going back to the way it was and that's where these countries are headed. Look at Brazil same. Brazil is staying on Argentina for a minute. Argentina has done things to save Levin point four billion dollars this year. They have nine billion dollars of external payments to meet. So I think they're in pretty decent shape. The problem in Argentina is the banking system is extraordinarily weak. It's been privatized like in Mexico and they have lot of bad debts and so forth. So that's a crisis. They're dealing with in with a sense of urgency. If you look at Brazil which sits today with 35 billion dollars of Foreign Exchange reserves is an exporting power. They also devalued handle it clumsily but better than Mexico and I think Brazil is going to be alright as well Brazil will see a positive economic growth this year. So we'll Argentina and I think that the nightmare we have in Mexico is a wake-up call in these other countries, but the significant point I want to make to you. He's a correction to these problems like in Mexico is more reform more liberalization than the ways of the past of centralizing controlling. You know, Jose Lopez Portillo with the president of Mexico. What did he do in 1982 when when when they lost reserves he nationalized the banks. He devalued this and that so basically what I'm saying is that if you go down to South America, which I do more frequently than I want to these days. What you find is optimism about the future. They think of all that happened as a mid-course correction in the case of Mexico majorly correction, but they have good economic managers in place. And I think that they will correct these problems and I'm not as concerned two years, hence, but I think next 18 months would be very very rough for particularly for Mexico. I think in the case of Mexico, the additional problem we have is the political problem where the PRI does not like democracy. They're having to swallow it and video is taking some very tough actions and I hope he knows what he's doing. But he's going in the right direction and I'm positive about that now regarding short-term investments in these countries. I'm not an expert on those things. Let me just say this to you in a rush to go into these countries lot of investors hit plunged head-on into some companies whose Financial condition. They knew very little about there are a lot of companies in these countries that are in serious trouble because they've denominated their debt in dollars. They record the you know, they get the revenues in local pesos or as you know, whatever reals and so forth. And as a result you have a you have a problem with exchange exposure which would cause these people to have the debt burden double triple and so forth. So but there are some companies in these countries that are in the fundamental strategic Industries who will do just fine. They'll go through rough times, but they'll do just fine. So it's the selection Is being very selective. It's being more knowledgeable than a than we have been in the past and more importantly one has to have very strong stomach in Emerging Markets because fluctuations are a given thing in these countries even in Japan when stock market drops two days ago five percent, but if you dropped 5% in Brazil we go look these guys, they don't know what they're doing because these countries don't have the margin of the benefit of doubt if you will and therefore they will be seen as being different more difficult more fluctuating more Troublesome, but those of us that have lived through I've been with Northwest for over 20 years and I like to think of myself more importantly as having been through for devaluations in peso two major financial crisis in Mexico and so on but the pleasure of this time is the debt crisis of today in Mexico Brazil. Argentina is a debt crisis for we retail the debt crisis. It's not a crisis for the bankers anymore. We hardly have any debt. It's for everybody else. It's a debt crisis. It's fun to have company in Missouri. Thank you very much. I'll take some questions now. 20 minutes very good timing reminder to our listening audience. You are hearing Darren Narayan Executive Vice President of world banking group at Norwest bank and speaking to Minnesota meeting. Our first question is from Todd Hildy who's with Satellite Industries. Good afternoon. Could you please elaborate on the wake-up call that Brazil received particularly what changes if any have occurred in the projections for growth interest rates and inflation in that country. Thank you the question on Brazil. First of all when I flew into Brazil Rio in December last year, I was quite impressed with the number of ships waiting to unload the consumer goods from United States and everywhere else Brazil see Brazilians believe God is Brazilian. They're absolutely certain. He will smile upon them any minute. So Brazilians are optimistic by birth. I mean, I fit right along in Brazil anyway, so they have believed that the good times have come, you know, they are getting good government good economics inflation was no real plan was working there for Brazilians went on a buying. Pinch the likes of which they've never seen before second. There's a result for the past four months Brazil, which is an exporting power suffered trade deficit month after month after month the reserves which hit that pain Point thirty nine billion dollars dropped several billion the stock market some funds left the stock market and the government had to devalue a little bit the expanded the band by 46% and having done that they have taken some government has taken some measures to preempt a Mexican type crisis in doing all this the government also tightened liquid in the country there by dampening some of the inflationary pressures from consuming by the people so they said oh if you don't want now you see Cardozo consider the people if you don't want us to be like Mexico behave yourself, so I think that's the wake-up call. Thank you very much. Mr. Narayan. We're going to go now to Tony Kozlowski the president of the American Refugee Committee in town. Thank you. You mentioned early in your remarks that you were perhaps more concerned about the political situation in Mexico rather than the economic situation. I wonder if you could comment on the political situation there particularly with regard to the Revolt in Chiapas and what effects that has on the current situation. Let me clarify. My one point I did make is that I think in the next 18 months to two years. I believe Mexico will get the economic house in order. So it's not an immediate thing. So I want to clarify that on the political question. I think Chiapas Chiapas was the Catalyst for some of the political issues in Mexico. But Chiapas itself to me is not a major problem. I think Chiapas is more a problem in the bigger problem in the minds of Americans than it is in the minds of Mexicans, but I think there's more fundamental problem that has to do with these nuisance call democracy, you know, the institutional revolutionary party in Mexico has had its way for many many years and and it's very difficult for them to accept that perhaps all the people in Mexico are equal and there is no elitism and the deal has been making noises to their effect. I'll be at some bar clumsily, but nevertheless the the trends are all to me pause. Day of but as you know, it's a rocky road to democracy in Mexico democracy is never very easy to adapt. I remember when Boris Yeltsin was in Minneapolis and I was at his table and we're having a conversation about democracy. He said I like something like a Singaporean democracy where when it's when I know what's right for the people. So that's that's that's the that's the stuff they're going to go through but that's a healthy process. It should be they should have gone through it long time ago, but it's about time. Question is from James Campbell who's with northern states power? You've said in essence as I understand that that is a deal people had the right program. They just carried it out rather clumsily rather than Focus backward too much. Let me perhaps phrase the question this way. There's some thought that Mexico faces some fairly heavy financing problems here even in just the next quarter. What should they be doing? Now that will ease that burden and avoid what happened the last time the the financial problem Mexico faces has to do with the maturing Tessa Bo knows that they have to pay the testimonials were 17 billion dollars. I believe they've already paid 13 there four or five left. So I don't think and then they have used about 7 billion and no 13 billion dollars of the fifty three billion dollar Aid money that's coming in so they have plenty of resources to meet that but I like your question because there's something by I forgot to say The key to Mexican Prosperity is exports from Mexico. Mexico is going to be an export machine the likes of which you have not seen in a long time. That's a prediction. You can write down and challenge me on it. Because Mexico what they did since 1985 till 1995 the industrial infrastructure and Mexico is phenomenal. I read an article in the London Economist about a week ago. They talked about how Mexican glass and cement and other companies can compete with anybody in the world right now. And those are the industries with very cheap peso cheap labor cheap production are going to export like crazy. Second thing is the American companies are invested in Mexico instead of looking into Mexican market which isn't there right now because of the problems and so forth. They will look to re export their product that they made in Mexico. The worst fears of NAFTA opponents will come to pass but for the wrong reasons, I'll be at that. That's what's going to be the ticket for Mexican economic prosperity. And they should really promote that in my opinion to earn the foreign exchange reserves. They need in order to buy the capital goods equipment reindustrialize the country. Thank you very much. Mr. Narayan back here. I'm you're listening to mr. Darren Narayan. Who is the head of world banking at Norwest bank here in Minnesota. We have a question now from Tony Brown who's a researcher with the Federal Reserve? My numbers are wrong, right? No, not at all. Actually. My question is I'm ordering more generally the extent to which some of the events in Mexico have influenced other emerging markets in other parts of the world and also countries like New Zealand, I guess one question that's been raised with respect to Mexico as should they adapt a currency board like Argentina or something closer to New Zealand's model the impact on the other Emerging Markets from Mexico was Swift and immediate because Thailand saw withdrawal of money and Indonesia was hit in India was yet, but all of that happened very temporarily and the money went back in they realize Mexico is not Indonesia India Thailand in terms of currency board as so some of you that let me explain currency board. Essentially what Argentina has done couple of years ago is to say for every peso they're going to print remember Latin countries used to print money like We print ads in this country newspapers. So what they did is that every peso we print will be backed by a dollar of Reserve in our reserves. That's liquid money. And therefore the total money supply in the country would not exceed the dollar reserves of the country. Therefore you had confidence that when they the indexed their currency to $1.00 that index can be maintained right? That's the currency board in a very crude way of explaining it the recommendation from Mexico was that the the Mexico has 51 Billy fifty one point nine billion pesos in circulation and that is in today's economics eight billion dollars. So why don't they take eight billion dollars put it into a pot and say wil back ever beat the peso issue with the with the dollar the problem with currency board. Is that the it's not a permanent thing and how how long do those Mexico want to tie up their reserves in case the money supply expands as a result of economic expansion. So I think a lot there were a lot of proponents of currency board for Mexico and I must confess I thought that was very attractive option in a entry with me with the Milwaukee Journal. I made a comment that Mexico would be tempted to go along with that. But more I think about it. I think that the harsh economic measures that they have taken is the way to go in terms of your question on say New Zealand and other countries to make currency board is not a Panacea for every country in the world country by country one has to look at the total amount of money supply how committed they are to indexing their currency to basket there one foreign currency how much their currency can the whole in reserve their lot of lot of mathematical gymnastics you have to go through but in my opinion Argentina Argentina, it was the right thing to have done. Thank you. Mr. Narayan. Our next question is from Malcolm McLean. Thank you. You you commented on the fact that the devaluation of the peso was not well managed. I wonder if you'd tell us how it could how it should have been managed and also some critics will say that the devaluation of the peso was something that many people knew for a long time should happen but it didn't because Carlos Salinas was a candidate for president the WTO and before that they didn't want to devalue the peso because the NAFTA boat was coming up the United States and elsewhere are those those accurate criticisms. Well Guillermo Ortiz, the Present Finance Minister supposedly backed last September said that devaluation is inevitable. We must do 20% whether it's true or not. I mean those recommendations come all the time and the president have to have supposed aside, but what they did wrong was the following number one the way they informed the world was wrong. First of all three weeks before that. They said no way are we going to devalue? But then Portillo said I'll defend the peso like a dog. So I mean they make these statements. And anyway, they made the statement three weeks before it's like no new taxes from Bush. Okay, and in his case, he waited three months these guys waited three weeks the way the informed was wrong. Second thing is they should have there was a radio interview selectively done by setup Uche when he announced this thing and that's how people heard about it on the way to all the way home in the evening and they said what evaluation so that was it was done wrong. Number one. Number two that announcement was wrong number two, they should have lined up some backup currency stabilization fund of 10 billion or 12 billion which in those days Us and other countries would have gladly given with a strong statement of support from the United States right after following the devaluation and and number three. They should have announced some sort of a Pepto type of thing where we set price control not price controls what agreements on labor and Issues in other words, there were so many unanswered questions. And also what was the target for a twenty eight billion dollar current account Surplus deficit. What was the target? They didn't quite talk about that. They said one to four percent range. So there were so many things Unknown People panicked. And u.s. of course snatched defeat from the jaws of Victory by first announcing a 40 billion dollar fund and pulling it back and putting 20 in our only five and you know, so the whole thing was not orchestrated. Thank you for our radio audience. You're listening to Darren Narayan speaking to the Minnesota meeting at the Minneapolis Marriott Hotel downtown. John Herman has a question. I have to actually two things. I'd like you to comment on one. I understand there's is going to be your was a 700,000 job loss in Mexico. Also the understand you hit it a little bit at it that Argentina has privatize their social security system. And how's that working? First of all on your first question of 700,000 job loss. I believe was a number for the United States Mexico will lose 2 million jobs roughly 1/2 between one and a half to two million jobs is a prediction. I saw 700,000 is if all the exports to Mexico in a way, that's not the case. I think the job loss is now put it on 300,000 your second question on Argentina's privatizing Social Security's too early to tell but Chile has done it done it very effectively you may be thinking about chili they've done it in 1987 or 88 and they use some of their dead Equity swaps to manage Bankers Trust took a participation in the company and chilies Social Security System privatized is a great model for a lot of countries. Argentina is in very early stages of doing some of that. Mr. Narayan, it doesn't appear that we have any more questions from the audience you've covered this topic. So well, what I'm wondering is if you have some comments that you would like to make that haven't been covered so far, you know when I was asked to speak about this subject. I felt I had a dilemma. I felt like the seventh husband of Zsa Gabor. What can you say or do about this has that has not been said or done before but there is always a there's always a perspective and essentially what I would like to share with you this afternoon before I leave you is the following whether we like it or not whether Congress likes it or not. We are in a global economy. There are lots of jobs in this country depending upon the global economy because manufacturing sector in America is not growing as fast as it should but manufacturing sector in America has helped enormously by or exporting capacity. Most of our exports are manufactured products and therefore I strongly believe that we were the nurture or customers and take care of them or else we won't have any. Thank you very much.