Mexican economy in free-fall

The Mexican economy shrank at an annual rate of 10.3 percent in the second quarter of 2009... a continuing deceleration for the economy, an increase over the six-month average decline of 9.2 percent for the first half of 2009...Among the worlds’ major economies, only that of Russia has contracted more than Mexico’s, about 10.9 percent.

The third second quarter contraction follows a drop of 8 percent in the first quarter and 1.6 percent in the fourth quarter of 2008...By far the largest drop was in services associated with tourism, 17.1 percent, followed by manufacturing, 16.4 percent.

The drop in GDP has been accompanied by a crisis in the peso/dollar exchange rate...

Since the imposition of the North American Free Trade Agreement in 1992, the economies of the United States and Mexico have become much more closely integrated. Mexico transformed itself from an economy that relied mostly on domestic demand — less than 10 percent of GDP was involved in foreign trade—to an export platform, with over 30 percent of its GDP involved in foreign trade...Sixty percent of Mexico’s imports...and two thirds of capital investments come from the United States. Over 90 percent of Mexico’s exports go to the US. In 2008 the total value of exports fell by 34 percent, while imports fell by 33 percent. This includes a 54 percent drop in the dollar value of oil exports.

Among the commodities that Mexico exports is labor power. US corporations depend on a supply of labor power from Mexican workers for their plants in Mexico and the United States. The remittances of the latter, a major source of income for millions of Mexican families, are crucial for Mexico’s GDP...

Since June 2008, the Mexican economy has lost 232,000 jobs, while the informal sector gained 99,000. If one adds this last group to the unemployed, the actual rate of unemployment would exceed 20 percent of the labor force. Such rates approach those of the 1930s and far exceed the jobless rates generated by the economic crisis of 1994...

At the same time, the Central Bank, with its policy of selling dollars to prevent the collapse of the peso, in effect has drastically reduced the money supply, increasing interest rates and further restricting economic activity...

The contractionary measures have been dictated by Wall Street. Last November, Fitch Ratings, a Wall Street Bond rating agency, gave a “negative” assessment of Mexican government debt. In May of this year, Standard and Poor’s also gave a Mexico a negative rating. Both agencies had threatened to reduce the government’s bond rating, presently at BBB+, three steps above junk bond status. In effect...denying Mexico, a semi-colony of the US, the kind of bailout they have granted themselves...

http://www.wsws.org/articles/2009/aug2009/mexi-a26.shtml

http://www.csmonitor.com/2008/0226/p06s01-woam.html

http://www.bloomberg.com/apps/news?pid=20601207&refer=oil&sid=auA2G9v81BqM

and another factor, which made news a while back, but is still an ongoing crises

http://www.marginalrevolution.com/marginalrevolution/2007/04/corn_prices_in_.html

> another factor in the Mexican economy collaspe...

Drastic declines (13% last year) in Mexico's oil production.

Too busy keeping up on the news this am.

I guess I am outed as a non-clicker.

;)

Who's tweaking the price of gasoline. Why can't Venezuela and Mexico dump gasoline on US markets?

Do Venezuela and Mexico actually produce gasoline? Do they have refineries?

but the problem is that the infrastructure hasn't been updated in decades. And, add to that, decreasing supplies...

the PRD (now unfortunately in chaos) wanted to increase their refining capacity. My understanding is a lot of their oil gets refined in Texas.

For Mexico's economy have been:
Illegal drugs and all that entails (Including massive amounts of bribe money)

Tourism

Money sent back into the country by those who have gone north for work. (Some 80 billion a year.)

Money sent back has dropped significantly - as those who normally would find work in the USA are affected by the huge crash in the trades that came about once the housing market fell apart.

And Mexico's decision to eliminate some penalties on many different drugs might very much help tourism. Tourists have long been wary of the Federales, but now that the Mexican police have NO opportunity to hassle anyone over small amounts of drugs, tourism may revive.

oh, whoops. no it's not.

Mexico is a country that is cursed with a terribly corrupt government.

He's Mexican and he said that he wouldn't go to Mexico right now for any amount of money because of the cartel wars. That's when you know things are *REALLY* fucked up! :scared: :yoiks:

I've spent 3/4 of the last year there.

However, to be fair to your coworker, it depends on where he's from (or wants to go). The border and the state of Sinaloa are insanely dangerous. I was all over Mexico and didn't have so much as an iota of a problem.

Note: I'm not Mexican, either.

I'd definitely stay away from that area though. I've heard several reports of really crazy shit happening in Tijuana.

The border region is a bit of a mess right now, in most areas. I wouldn't go there if you paid me.

But the rest of Mexico? It's fine, so long as you're careful and don't call undue attention to yourself.

Pure evil.

screwn by MSM portrayals of the country as teeming with drug warfare and swine flu. Neither is the case. The cartels are targeting each other and have a very specific agenda -- they are not interested in average folks, tourists or otherwise, who go about their daily business.

The border towns...equally miserable places on both sides of the border...are the picture we always get of Mexico as a whole. Just not true. Mexico is a wonderous and beautiful and friendly country.

...with other people's lives. the border region is very VERY dangerous. i am mexican and from el paso, tx right on the border with juarez. much of my family lives on both sides of that border. juarez is basically under military occupation. many, many businesses have shut down because people are too afraid to go out and shop. this is especially true of the restaurant/bar/night club entertainment industries. all of the good places to eat, drink and party used to be on the mexican side of the border as they all served as fronts for laundering cartel money. of course, these are the first places to be targeted during the cartel wars. they may have a 'specific agenda' but when cartel hitmen come in guns blazing they don't care who else gets caught in the cross fire i can guarantee that. my dad's friend, who owned a few restaurants/bars/clubs, was gunned down as he came out of one of his newer and trendier bars, the b bar. the two girls walking with him (one a friend of my cousin) also caught bullets. the last time i was home, i wanted to take my girlfriend to my favorite restaurant in juarez. after much pleading my mom finally convinced me not to go. 14 people were gunned down there that same night. so please, don't downplay the violence and the danger. people should be very very cautious if they have to go to the border region right now. and i would advise you to just stay away if you can.

but mexico is very large, and the central and southern regions are still very safe and enjoyable. i was just in guadalajara and guanajuato recently and it was great.

If you're planning to travel in Mexico, you'd probably avoid cities like Tijuana and Juarez. Particularly nightlife, nightclubs.

But the portrayal of all of Mexico as profoundly dangerous angers me -- the MSM, the cable news crazies, have done a huge disservice to a wonderful country.

That's the problem with citing to WSWS. It could be true or could be a complete fabrication.

They are documented liars, so just because they posted it -- well, that has no bearing whatsoever on what may or may not actually be happening.

No one counts the trillions anyway, who takes notes these days?

the Mexican Gov't is just too small, centralized and ineffective to govern a nation and population of that size...and i imagine their income disparity is one of the worst in the hemisphere...