In my last post I discussed why multinational investment has started to split between China and other destinations, including Mexico, in recent years. But wages are a shrinking fraction of overall production cost—across many manufacturing sectors wages are a tenth to a quarter of overall production costs. Why? Automation makes wages less of an issue, […]
China has been the world’s factory floor for over a decade, but its manufacturing dominance is abating. Sure, a significant amount of investment will continue to enter the Middle Kingdom, if for no other reason than to target its burgeoning middle class, but factory investment that used to automatically go to China is diversifying. Much […]
Last Friday the first long-haul Mexican truck entered the United States, fulfilling its express design. Mexican trucks should have been allowed onto U.S. interstates by 2000, but lobbying by the Teamsters union kept Mexican trucks within an earshot of the border. U.S. dithering has been clearly unfair (Canadian trucks have traversed America’s highways without conditions), […]
How is it that Mexico got caught up in an Iranian plot to assassinate the Saudi ambassador to the United States? Manssor Arbabsiar had his flight itinerary diverted from Mexico City to New York, where U.S. law enforcement arrested him for plotting the murder of Adel Al-Jubeir in Washington, DC. Apparently Arbabsiar, an Iranian who […]
From July 2010 to June 2011 the Employment Security Commission of North Carolina advertised 9,050 jobs openings. Only 752 Americans expressed interest, even though North Carolina’s unemployment rate is above 10 percent. Short-handed, farmers across the state have resorted to the H-2A visa program, which allows foreigners to work in the United States temporarily. So […]
Mexico Today, an outfit I’m proud to write for, just launched a great new interactive magazine for anyone looking to share experiences about Mexico. Right now the Mexico Today Social Magazine on Facebook is dominated by content from leading Mexico bloggers, covering such diverse topics as tortillas, infrastructure projects, and architecture. So if you’d like […]
On Saturday Agustin Carstens announced a hands-off approach to the Mexican peso: “A neutral monetary policy is the right stance right now.” In normal times such a statement by a central banker rarely qualifies as news, even to the financial news wires. When conducted by an independent central bank monetary policy is a slow, bland […]
Two months ago Netflix announced plans to expand its online streaming service to nearly all of Latin America, possibly tripling the company’s customer base. By 2013 it projects the $7.99 a month service will be a profitable enterprise, largely due to demand in Mexico and Brazil. And for 100 pesos, also about eight dollars, Fluffy […]
In November 2010 the presidents of Latin America’s two largest economies pledged to hash out a free trade agreement. Per logic, Mexico has a consumer class of 100-plus million, Brazil twice that: each country stands to benefit. Yet free trade by numbers went out of vogue in the 1990s. Still, each country had implicit motives. […]
Mexican commandos are organizing raids against drug cartels from U.S. territory, according to Obama administration officials. These so-called boomerang operations allow the Mexicans to plan operations with the DEA, and may allow the Mexicans access to advanced U.S. equipment. Crucially, the operations also skirt venal state and local police in northern Mexico—thought to be lookouts […]
Author’s Note: Ruchir Sharma, head of emerging markets at Morgan Stanley, recently penned a piece in TIME asserting that Brazil is “the un-China.” That comparison inspired this post. Mexico Today, a public-private enterprise of which I am a paid contributor, provided some data. Mexico’s technocrats have been seething at comparisons with Brazil for years. Who […]
Scarcely a month ago, market analysts were calling for Latin America’s central banks to hike interest rates. But on the heels of weak US quarterly GDP numbers and signs that the EU debt crisis may envelop Spain and Italy, market analysts are now forecasting lending rate cuts for Latin America’s two largest economies. The yield […]
Yesterday’s 5.6 percent drop in the Dow reverberated through Latin America’s major stock exchanges. Argentina’s stock market took the worst hit, losing almost 11 percent of its value. Brazil’s Bovespa declined more than 8 percent; Chile and Peru’s markets each lost 7 percent. Mexico’s stock market, the Bolsa, withstood the sell-off better than the other […]
NPR’s “Morning Edition” features an upbeat report by Jason Beaubien on Cuidad Juarez. Yes, Juarez: the border city in full grip of Mexico’s drug war. But the economy is thriving, adding jobs and exporting more goods to the United States than ever before. Car part factories are a big part of the city’s industrial base. […]
I can’t let go of an article from the July 2 edition of the Economist. “Who’s Overheating” proposes an “emerging-markets overheating index” that crunched six factors: 1) Inflation 2) GDP growth since 2007, compared to the past decade 3) Unemployment 4) Credit growth 5) Real interest rates, and 6) Change in current-account balance. Twenty-seven countries […]