TalkBaja.com » Baja Mexico Forums » Baja News Wire

Here is a link to about a dozen articles that all talk about how Mexico is changing. The wealth that has been created due to the opening of the economy and the resulting changes in society, politics, jobs, etc. I found it to be pretty interesting stuff for Mexico watchers.

The New Mexicans - The Washington Post

It's not all doom and gloom, Wooosh!

Originally Posted by bwall

.
I found it to be pretty interesting stuff for Mexico watchers.

It's more of a "Suicide watch."


"maxing out their Banamex credit cards."


The beginning of the end. House foreclosures ............coming soon.

Originally Posted by DENNIS

It's more of a "Suicide watch."
"maxing out their Banamex credit cards."
The beginning of the end. House foreclosures ............coming soon.

Nope not all doom and gloom (aside from the current homicide trend and numbers) but there's a field of red flags. As Dennis said, the housing market is a mess. They built seas of casitas thinking the middle class would willingly drive longer distances to take advantage of lower housing prices like many Americans do. Now they are sitting empty and foreclosures are looming.

One thing that has dramatically differentiated the economies north and south of the border has been the use of credit. The vast majority of folks down here own their home free and clear. If Mexico makes a big move to using credit they will likely repeat the same mistakes made NOB...

Originally Posted by BajaGringo

The vast majority of folks down here own their home free and clear. ...

Cars too. No car payments.

Originally Posted by DENNIS

Cars too. No car payments.

Yes I agree the Majority own their homes and cars debt free. But you cant deny the rapidly growing sector that have Embraced the easy payment plan In the 10+ years I have lived here there have been some big changes
I have to laugh every time I hear the detractors rant about the new vehicles that are made down here not being Importabe to the U.S. Their intended market is not the U.S. they are making affordable vehicles for the local populace

Originally Posted by J.P.

But you cant deny the rapidly growing sector that have Embraced the easy payment plan In the 10+ years I have lived here there have been some big changes

The plans aren't really so easy. They're short term with sky high interest.
The only reasonable plan I've ever heard of down here is INFONAVIT housing. Government built condos [for lack of a better term] , affordable and easy payments. The biggest problem is they quickly turn into snake pits of crime, barred windows and graffiti.

Access to credit represents membership in the middle class. (Please note that 'access' isn't the same as 'use'). Poor people have no access to credit as they have no form of documented income.

One reason why the interest rates are so high: The legal system is clogged up (help me find a better word?) which means it's hard to repossess, foreclose or place liens, etc. So, instead of loaning out lots of money and taking it in the shorts, they make fewer loans and charge really high rates to cover those instances of default.

As the legal system improves, the cost of credit will decrease. This will take years, however, and there are no quick fixes.

Most Mexicans I know hate the thought of paying any interest at all which hoperfully will lead to more judicious use of credit south of the border...

Originally Posted by BajaGringo

Most Mexicans I know hate the thought of paying any interest at all which hoperfully will lead to more judicious use of credit south of the border...

I agree that if a credit card is used here it is most likely paid off before the end of 1 month regardless of why it was used. Debit cards are more popular and when seeing people use a card I listen sometimes and most are debit cards, for convenience, but cash is still king.

To get a 9 to 11% mortgage, INFONAVIT excluded, most have another house paid off as collateral and many buy property to upgrade and usually do not sell their other house, but lease it.

Most upper middle class Nationals I know have 2, 3 and sometimes 4 houses by the time they are close to retirement and lease 1, 2 or 3 out, a sort of pension plan in SLP.

Some spoil their adult children and give them one.

The working class seem to be still using expensive credit to buy stuff at Coppel, Elektra and Famsa. Used car dealer here have the same type credit plans with about 1/3 down.

Some tienda owners give credit to their customers with no interest, still, and have a book they use.

Originally Posted by MexicaliAlan

Some spoil their adult children and give them one.

It's all about maintaining the family unit and sharing accumulated wealth simultaneously. The kids will get the property eventually anyway.

Originally Posted by DENNIS

It's all about maintaining the family unit and sharing accumulated wealth simultaneously. The kids will get the property eventually anyway.

You have that right. Growing up in the 60s and 70s, which it seems most of us posting here did. was the opposite except in a few families.

Father and mother had better approve of your fiancée or fiancé or you get a wedding and then you are on your own if not.

A good way to keep the socio economic classes from intermingling, it appears.

A tight rein on the offspring. IMO