26 replies to this topic

[Juan]

A friend is moving down and asked me is if it is safe to put money in LLoy's now? Since I have no money in there, what do you think? Is it safe?

[martygraw]

Multi V and Bancomer no problem.............. Lloyds ??????

[pera]

Please remember your money is in a quasi mutual fund, ie no guarantees. Not saying that mutual funds are bad, but is very necessary that you do your own due dilligence and choose those investments that will meet your own personal objectives. If you don't know how to evaluate your needs and how to do due dilligence then would advise that you seek professional help, not this board.

[Shira]

Intercam is best. Except for Cetes which are a universal interest rate, Lloyd charges more and pays less.
Right now the market is volatile due to the changing peso rate. If you invested when the peso was 14 to 1USD you have lost money. You are charged for the investment and taxes and then the peso devalued more.

[sharpeassoc]

A friend is moving down and asked me is if it is safe to put money in LLoy's now? Since I have no money in there, what do you think? Is it safe?

I would think that if there ever has been a time this would be the time not to put more money than you can afford to lose anywhere. Forget the FDIC stuff too. They didn’t have enough to cover the deposits of up to $100,000.00 and now they have to cover $250,000.00 and all the time telling us “don’t worry it’s backed by the Federal Government”, we will be lucky if we are still getting SS checks in two years.

[Hound Dog]

A friend is moving down and asked me is if it is safe to put money in LLoy's now? Since I have no money in there, what do you think? Is it safe?

There is no one reading or posting on these forums who can even remotely assess the risks of keeping money in Lloyd (actually Actinver Lloyd since last year´s merger) or Grupo Financiero Multiva or Intercam or any other investment house or investment house/bank combination in Mexico. There is also no one reading or posting here who can assess the risk of putting your money into any Mexican commercial bank whether it be the Mexican subsidiary of BBVA or HSBC or Santander or Bank of America or CitiBank or you name it. I spent the better part of 35 years assessing bank risk and that is an esoteric discipline requiring not only rare analytical skills but access to financial information not available to the layperson.

Anyone who invests large sums of needed money in private financial institutions in Mexico or in uninsured deposits in commercial banks in the United States for that matter is doing so at considerable personal risk and risk that is usually far greater than the comensurate return they can expect on the resulting investments. This is an unwarranted risk during good times and today it is foolhardy.

When you invest your converted dollars in a foreign country you are not only incurring the normal risk you assume when investing in the mother country but incurring additional risks such as currency exchange risk and sovereign risk as well and these are serious incremental risks you are incurring which are normally far greater than the additional incremental return you can expect for having taken on those risks.

You have seen the U.S. regulators with egg on their faces who were supposed to understand the inherent risks in investing in such salt of the earth institutions as BofA, Wachovia, Wells Fargo and CitiBank. These guys have access to highly sensitive information you can´t possibly get your hands on and they still missed the boat and can´t even today tell you how much of your tax dollars will be necessary to keep these imbiciles afloat. This is why FDIC insurance is so important. Instead of assessing bank risk, you only have to assess sovereign risk and if the sovereign falls so do you and I and you will have to learn to stay alive like that hillbilly in Hank Williams Jr.´s A Country Boy Will Survive.

Especially in these times, live by these rules:

* Keep the bulk of your liquid assets in cash in bank deposits in the U.S. that are FDIC insured and forget the so-called Mexican deposit insurance which is a bad joke. Spread those FDIC insured deposits around so that they are within the insurance limitations imposed on those particular classes of deposits.
* Only invest money in Mexican banks or investment houses you need for short term working capital and even then limit your aggregate deposits and investments in Mexico to money you can afford to lose instantly and still remain financially afloat.
* Always remember how financially strong the federal regulators told you BofA and CitiBank and Wachovia and Lehman Brothers and AIG and Bear Stearns were right up until the day they were either on the brink of failure and needing your tax dollars to stay afloat or in the tank and remember that even when these banks and investment bankers were strong, their investments in Mexican banks were through subsidiary Mexican organizations from which they could walk tomorrow if times got rough.

Why FDIC when the FDIC appears to be in some serious stress? Because that's it my friends. If the government allows the FDIC to reneg under its insured deposits obligations, it's all over. This is your last resort for your money. At the point the government allows FDIC default the government itself will have collapsed and allowed the unthinkable. The full faith and credit of the sovereign will have proven to have been a worthless promise and both the U.S. government and the international financial markets will have collapsed. The only places where people will continue to live relatively normal lives will be in such self-sufficient but desperately poor places as the jungles of Viet nam and the obscure villages off the beaten path in the Chiapas Highlands. You had better learn Tzotzil now if this happens and you want some poor indigenous campesino to share his freshly caught catfish dinner and modest corn fresh from the milpa with you. Those water trucks will no longer be making the trek up the hills to the gated communities above Ajijic and you will be scooping up tadpoles and dining on lirio in the lake.

[privado]

There is no one reading or posting on these forums who can even remotely assess the risks of keeping money in Lloyd (actually Actinver Lloyd since last year´s merger) or Grupo Financiero Multiva or Intercam or any other investment house or investment house/bank combination in Mexico. There is also no one reading or posting here who can assess the risk of putting your money into any Mexican commercial bank whether it be the Mexican subsidiary of BBVA or HSBC or Santander or Bank of America or CitiBank or you name it. I spent the better part of 35 years assessing bank risk and that is an esoteric discipline requiring not only rare analytical skills but access to financial information not available to the layperson.

Anyone who invests large sums of needed money in private financial institutions in Mexico or in uninsured deposits in commercial banks in the United States for that matter is doing so at considerable personal risk and risk that is usually far greater than the comensurate return they can expect on the resulting investments. This is an unwarranted risk during good times and today it is foolhardy.

When you invest your converted dollars in a foreign country you are not only incurring the normal risk you assume when investing in the mother country but incurring additional risks such as currency exchange risk and sovereign risk as well and these are serious incremental risks you are incurring which are normally far greater than the additional incremental return you can expect for having taken on those risks.

You have seen the U.S. regulators with egg on their faces who were supposed to understand the inherent risks in investing in such salt of the earth institutions as BofA, Wachovia, Wells Fargo and CitiBank. These guys have access to highly sensitive information you can´t possibly get your hands on and they still missed the boat and can´t even today tell you how much of your tax dollars will be necessary to keep these imbiciles afloat. This is why FDIC insurance is so important. Instead of assessing bank risk, you only have to assess sovereign risk and if the sovereign falls so do you and I and you will have to learn to stay alive like that hillbilly in Hank Williams Jr.´s A Country Boy Will Survive.

Especially in these times, live by these rules:

* Keep the bulk of your liquid assets in cash in bank deposits in the U.S. that are FDIC insured and forget the so-called Mexican deposit insurance which is a bad joke. Spread those FDIC insured deposits around so that they are within the insurance limitations imposed on those particular classes of deposits.
* Only invest money in Mexican banks or investment houses you need for short term working capital and even then limit your aggregate deposits and investments in Mexico to money you can afford to lose instantly and still remain financially afloat.
* Always remember how financially strong the federal regulators told you BofA and CitiBank and Wachovia and Lehman Brothers and AIG and Bear Stearns were right up until the day they were either on the brink of failure and needing your tax dollars to stay afloat or in the tank and remember that even when these banks and investment bankers were strong, their investments in Mexican banks were through subsidiary Mexican organizations from which they could walk tomorrow if times got rough.

Why FDIC when the FDIC appears to be in some serious stress? Because that's it my friends. If the government allows the FDIC to reneg under its insured deposits obligations, it's all over. This is your last resort for your money. At the point the government allows FDIC default the government itself will have collapsed and allowed the unthinkable. The full faith and credit of the sovereign will have proven to have been a worthless promise and both the U.S. government and the international financial markets will have collapsed. The only places where people will continue to live relatively normal lives will be in such self-sufficient but desperately poor places as the jungles of Viet nam and the obscure villages off the beaten path in the Chiapas Highlands. You had better learn Tzotzil now if this happens and you want some poor indigenous campesino to share his freshly caught catfish dinner and modest corn fresh from the milpa with you. Those water trucks will no longer be making the trek up the hills to the gated communities above Ajijic and you will be scooping up tadpoles and dining on lirio in the lake.

Thanks for the great info from a former pro- it's tempting to move $$ into cetas at todays exchange rate- question- possible to lose $$$ in excess of FDIC ceiling at B of A??

[Hound Dog]

it's tempting to move $$ into cetas at todays exchange rate- question- possible to lose $$$ in excess of FDIC ceiling at B of A??

That´s a good point about investing in Mexican government obligations at today´s exchange rate, Privado. However, presumably the peso could continue to weaken substantially. I moved in some dollars when I was getting 12.78 pesos to the dollar sure that I was making a killing. I don´t feel so smart any more since I didn´t really need the money at that time and could have waited to get today´s exchange rate. Everyone was saying that that was the time to move dollars into pesos before the exchange rate settled back to 11:1.

I must admit that I am a conservative investor but I would keep all my cash in FDIC insured accounts today never exceeding the insured amount. As for BofA; remember Continental Illinois? Remember General Motors? Oops, I´m getting ahead of myself. Better go hunker down.

[privado]

it's tempting to move $$ into cetas at todays exchange rate- question- possible to lose $$$ in excess of FDIC ceiling at B of A??

That´s a good point about investing in Mexican government obligations at today´s exchange rate, Privado. However, presumably the peso could continue to weaken substantially. I moved in some dollars when I was getting 12.78 pesos to the dollar sure that I was making a killing. I don´t feel so smart any more since I didn´t really need the money at that time and could have waited to get today´s exchange rate. Everyone was saying that that was the time to move dollars into pesos before the exchange rate settled back to 11:1.

I must admit that I am a conservative investor but I would keep all my cash in FDIC insured accounts today never exceeding the insured amount. As for BofA; remember Continental Illinois? Remember General Motors? Oops, I´m getting ahead of myself. Better go hunker down.

I did the same - moved $$ at 12.40 on the advise of an investment banker here in Guad who told me- they started exchanging dollars for pesos at 12.- tempting at $15 for 6 months living expenses- thanks for shot in the head about
B of A

[AmyLee]

We’ve only moved what we think we can spend in the next 6 months, win some lose some, and never invest more than you can afford to lose!!!!!!

[Kokie1]

A friend is moving down and asked me is if it is safe to put money in LLoy's now? Since I have no money in there, what do you think? Is it safe?

We have 'banked' with Lloyd (now Actinver) for over 14 years and have never been sorry. they are polite, courteous and will go out of their way to help you solve a problem.

They have several different 'accounts' with varying interest and regulations. You should check them all out to see which one suits your way of handling money. We have automatic deposits to our bank in the states, write checks off that bank and have them cashed at Actinver (Lloyd).

[rjeu]

I was in banking longer than Hound Dog and completely agree with him.

We have been dealing with Lloyd for about 12 years and like the people and service.

However a couple of months ago we moved most of what we had ( which wasn't much) there to our US bank. Not because we had any doubts about Lloyd but we did have doubts about Mexico's inflation rate.

The money we left in Lloyd has gone down in BUYING POWER about 40%. The number of pesos has gone up a little but the BP has really gone down. I think the money is our US bank is probably earning less than 1 % but the BP has not gone down.

[Hound Dog]

We have 'banked' with Lloyd (now Actinver) for over 14 years and have never been sorry. they are polite, courteous and will go out of their way to help you solve a problem.

They have several different 'accounts' with varying interest and regulations. You should check them all out to see which one suits your way of handling money. We have automatic deposits to our bank in the states, write checks off that bank and have them cashed at Actinver (Lloyd).

That´s fine but the above response misses the point of the OP´s inquiry altogether. The OP wanted to know if Llolyd was a safe place to invest money. My response was and is, nobody reading or posting on this or any other expat forum has any idea whether or not Lloyd or Multiva or Intercam or any other investment house in Mexico is a safe place to invest money and so the inquiry cannot be responded to intelligently. It matters not a whit whether the folks at Lloyd are polite or courteous or will "go out of their way" to help solve a problem or whether any of these firms has different accounts with varying "...interest and regulations," ((whatever is meant by "regulations") . That was not the question. The question was, is (Actinver) Lloyd safe. Well, maybe it is and maybe it isn´t and the same goes for Multiva and Intercam and any banks offering investment products to the public around here. There is not a soul posting here who can answer your question including me because no one posting here has access to the information they would need to answer that question. Accounting transparency is not a Mexican value (or a U,S, value for that matter).

I´ll bet you that, if Bernie Madoff even agreed to stoop to take your money and invest it at his outrageous promised returns, he and his staff would be polite and courteous and go out of their way to help you solve a problem right up to the day they went belly-up and refused to liquidate your accounts. Just ask the super rich matrons of Palm Beach who Bernie agreed to do business with who are now considerably poorer than when they met him. A nicer man they never met.

In other words, no matter what local investment house you do business with - limit your investments to excess cash you can afford to lose. Period. ´Cause, brother, you´ll never know whether or not your money is safe based on the financial information any of them publish. If Alan Greenspan was caught by surprise by the collapse of the housing bubble in the U.S. and the greed and avarice of American capitalists, don´t look to these forums for answers as to the safety of your investments hereabouts.

[pera]

Have to totally agree with the "Hound Dog".
As well unlike the states you have no FDIC or SIPC for people who invest with companies lide Loyd.

[seewee]

But what is someone to do if they have a lot of cash? I am not from the States and I live here permanently; that is where I spend my money and will be spending it here for a long time (I hope). I have pesos already. What it sounds like to me reading your post, is that I should probably hide my money under my mattress for it to be safe. I believe strongly that CETES with either Multiva or Actinver is the safest around here and guaranteed by the government. If the Mexican government goes billy up, well we can say adios to everything else.

[willieboy]

The money we left in Lloyd has gone down in BUYING POWER about 40%. The number of pesos has gone up a little but the BP has really gone down. I think the money is our US bank is probably earning less than 1 % but the BP has not gone down.

Just to be clear, the peso has NOT lost 40% purchasing power except if you're buying goods denominated in dollars. The beer I drink at my favorite bar was 15p in July and is still 15p today. Our favorite Mexican Red at Licores Paz has not gone up. The same for most items priced in pesos. Gas, electricity, cable, etc have gone up a bit, but not nearly 40%. The poster is right however, that if you want to buy dollars at the current exchange, you're looking at a 40%-50% hit since July.

[Mainecoons]

What goes up will eventually come down. The conditions that drove the buck to under 10 pesos haven't gone away, they've just been temporarily displaced by the flight from equities and into cash.

Eventually, I am convinced the far greater fiscal responsibility of the Mexican government will result in a return to a higher peso. Until then, get your big projects done and/or salt away some cheap pesos. Enjoy those cheap eats but don't take any of it for granted.