Pretty little liars

I'm calling our current economic malaise 'Financial Crisis: Part deux' because it is simply too ludicrous to take seriously. It's comedy. Farce. Monty Python meets Benny Hill. The system is upside down, the boat is listing, the jig is up. Choose your own metaphor. They all fit.

You can always tell you're living in endtimes when the trusted bureaucrats, those non entities like accountants and bankers, even cops and school board trustees, start looting the system.The last example of this occured in my home town ofVancouverduring the 2010 Winter Olympics, when law enforcement extorted over $750 million from government sources for so-called Olympic 'security'. Nobody got any explanations or saw any invoices or purchase orders or perliminary budgets. Law enforcement merely muttered the word 'terrorism', and we all went into a trance and wrote them the cheque. Funny though, nobody seems to feel any more secure. In fact you still can't find a cop when you need one. I think they all moved to Cayman.

But the question in my mind is why the pundits, your friends and mine, persist in trying to analyse the unfolding economic drama in Europe and the United States. What's the point? The only thing to know is there is a very wide public perception that growth in either place will be tepid going forward and well into the foreseeable future. Perception is everything. Fantasy made reality. The market gets what the market believes. Full stop. To sit around pondering why, or reflecting on what went wrong, is not my job, nor that of anyone who purports to help investors make money. It's academic. Like trying to find out how the light bulb goes on, or why it doesn't, when you hit the switch.

We North Americans are self absorbed. We have a tendency to stand around staring at our feet. I think this is an instinct we must resist. Investors must simply continue to move forward and look for profits elsewhere.

But where?

I'm a fan of Latin America, and have been since I moved here two years ago. From my little perch in Medellin, Colombia, I can watch the wheels spin around elsewhere in the world without feeling any dread or fear because I'm fully invested here. In energy, to be precise. I'm bullish on energy, and particularly inSouth America, for a pair of reasons. For one, I can't quite figure out how California expects  to power itself in the decades to come, since the rivers have all been dammed and nuclear energy has developed a social stigma. I think the cities of the north will end up tapping the South American continent for power. In fact the grid is already under construction.Colombia, which has seen unprecedented levels of investment capital flow over its borders in the past year, most of it for mineral exploration, is the potential hub.

Chile's privately owned power utility, Endesa, which has a parent company in Spain owned in turn by Italian energy giant Entel, is probably the most sophisticated player here. Endesa currently fetches the highest prices for energy on the continent, and trades for under $10 per share.Colombia's state owned oil company, EcoPetrol, which hopes to double its current daily oil production to 1 million barrels by next year, trades locally for less than $4 per share. Both are strong buys of mine.

The other reason is the phenomenal growth here. Latin America weathered the last financial crises extremely well, according to the World Bank, and last year managed annual GDP growth of six percent, better than Eastern Europe and Central Asia, and follows a better than 7% GDP spike in 2010. In fact things are so good that the countries of Colombia, Peru and Chile have established their own jointly-owned stock exchange for trading their domestic securities. Included is a market for energy credits, currently illiquid but expected to perk up when Endesa of Chile inaugurates its trading desk.

So it's all good down here, really.

Careful out there.