Wall Street’s Loss, Panama’s Gain?
From Wall St. to Hong Kong, the markets are reeling
Sir Isaac Newton said, “For every action, there is an equal and opposite reaction.”
With the global financial markets in turmoil, Panama could very well benefit. For many years Panama has been touted as an offshore haven. Grey area business types, tax planners and multinational corporations have all enjoyed Panama’s solid financial system, corporate law, and banking secrecy policies.
As indicated by the gigantic sell offs this week both in U.S. and other exchanges, masses of investors have lost confidence in the traditional stock markets. But where will all that money go? Panama and its famous offshore accounts may be on the receiving end.
In addition to Panama’s strong banking sector, its local stock market, the Bolsa de Valores de Panama (PNS: BVPA, www.panabolsa.com), expects annual growth of 6.5%, adjusted down from 9.5% estimates earlier this week. The Canal expansion project remains a go, new construction has somehow remained en fuego, and tourism continues to grow steadily.
Could Panama be one of the “recession proof” locales investors are desperately seeking?
International stock markets and foreign real estate have been en vogue on past occasions when the DOW and other major exchanges have under-performed. It hasn’t always worked out, however, with crashes of both the Brazilian, Indonesian and Argentinian markets as just three examples.
As the train wreck of international financial institutions continues to take its toll, it will be curious to see how many disgruntled investors find their way to Panama.
| Written by Casey Halloran |  |
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Filed under: Business on October 10th, 2008
Money may be routed through Panama, but expect tourism to drop off as well as Canal usage since US won’t be buying much for a while (apparently they’re broke and can’t borrow any more)
US became an economic powerhouse during the tail end of the Industrial Revolution with UK losing it’s economic power to the cheaper USA.
It is looking like it’s time for US to now hand off power to China. If you can get Chinese to tour Panama, then tourism will continue to grow.
There are more English speaking Chinese in China than there are Americans living in the United States.
At least I read that somewhere.
So bring um on.
the US will enter a period of hyperinflation, thanks to the federal reserve and the government destroying the value of the dollar. panma is dollar based and purchasing power will be devastated. investors are being wiped out in US and europe.. Where will they get the $ to invest in panama? fasten your seat belt.
People need cash in a time of crises…..no one is investing right now
In fact, the real estate market is going illiquid everywhere
Not only that, it shows you were not here for last the Panamanian crisis during the Noriega days…..90% of ALL bank deposits were frozen…….I would be concerned if I were you
James you are talking mince!
At the end of the day, SOMEONE has to BUY apartments, condos and houses for real estate to happen. I have several friends who are in the “biz” in Panama and it has already slowed to a crawl over the last 6 months.
I think we’re going to see prices DROP over the next year. Especially speculators who NEED to sell their places. They’ll have no choice but to make the price a “bargain” because NO ONE is buying the hyperinflated condo prices of $2000 a meter and up.
Expect TONS of developers to go belly up also. THE STRONG (Bern) will survive. The rest? Well… we’ll see.
Matheo
1) International credit has dried up. All projects in Panama which are internationally financed are in danger: Trump’s, Oil Refinery, Los Faros, etc. I doubt they will be built.
2) Panama’s banking is safe and locally financed projects are safe. However,
3) Interest rates have started to go up, both on local and foreing banks.
4) As most projects require 30% down, and about 5,300 apartaments are due in the next two years. Will foreign investors finalized their purchase? Currently, the dollar is on a temporarly raise against the Euro; few are lending and asking for higher interest rates; U.S. baby boomers can’t sell their home at a good price and their 401K’s are over 30% for the year.
5) As construction projects slow down, so will the rest of the economy.