ABSTRACT
By mid May of 1995, Jose Montes was busy preparing for a meeting with top management about the company’s strategy in Mexico. He was convinced that he should be ready to answer questions regarding the possible reasons for the crisis that had hit Mexico in December of 1994, the conditions existing in the Mexican financial markets in 1995, and the future peso/dollar relationship. More economic-minded analysts, while acknowledging the importance of the political events, dismissed them as structural reasons for the peso crisis. Press reports attributed another view of the peso crisis to the former President Salinas, which the media labeled as “the Christmas mistake.” According to Salinas, the crisis happened because of the erratic policies of the Zedillo administration and the challenges posed by the transition. In Salinas’ opinion, under the spell of the uncertainty introduced by Zedillo’s policies, an investor’s best response was to withdraw from the Mexican fund as fast as possible.
