| SAO PAULO
SAO PAULO May 16 Morgan Stanley
economist Gray Newman, one of the longest tenured and most
respected followers of Latin America on Wall Street, is
retiring, he said in a note to clients on Friday.
Newman, 55, covered Latin America for two decades, first
from Mexico City and then from New York. As Morgan Stanley's
chief economist for the region since 2000, he was a well-known
figure in central banks and finance ministries and enjoyed
unusual access for a foreigner.
In a volatile region that has often bedeviled
prognosticators with its frequent financial crises and political
turmoil, Newman got several key calls right.
In late 2002, as markets in Brazil worried over the imminent
inauguration of President Luiz Inacio Lula da Silva, a onetime
radical leftist, Newman not only predicted that the economy
would prosper but that the currency would sharply strengthen.
Newman recalled a dinner in Brazil at which a client grabbed
his business card and skeptically scrawled his target level for
the currency - 2.80 reais per dollar - all over it.
The currency was nearing 4 per dollar at the time, and many
analysts were predicting it would weaken further. But after Lula
took office and embraced orthodox financial policies, the crisis
dissipated and the real closed 2003 at 2.87 per dollar.
Brazil's economy boomed for much of the next decade. The
client later called and congratulated Newman for his forecast.
Newman was "always rigorous and insightful, and never afraid
to fight the consensus," Arminio Fraga, who was Brazil's central
bank chief during part of that period and is now a leading fund
manager, said via e-mail.
More recently, Newman began highlighting imbalances in
Brazil's economy in 2010, long before many other economists. He
also predicted that current Mexican President Enrique Pena Nieto
would successfully pass a wave of free-market reforms.
Newman has told friends that he plans to spend time with
family and stay involved in Latin America, possibly as a
teacher. He told them he would remain in the job through May.
(Editing by Todd Benson and Bernadette Baum)