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Blackjack Davie

Sep 17, 2008, 5:31 PM

Post #1 of 90 (7922 views)

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Financial crisis

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Folks we appear to be in deep tapioca. Where is Bubba when we need him? This financial dilemma, in which we find ourselves, includes Mexico so I think this is an ok post. Hablando en serio. I am curious as to how folks on this board see this impending/ongoing crisis. I wonder how Carlos Slim sees it...Noone here is jumping out of windows but there is a lot of sweat going around. David



Rosalinemg

Sep 17, 2008, 8:11 PM

Post #2 of 90 (7854 views)

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Re: [Blackjack Davie] Financial crisis

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To think that the financial crisis which is having an impact, not only in the United States but also in Europe and Asia, will not have an impact here is to deny reality. How can it not impact here?
It will have an impact on the housing industry in the tourist towns/cities that are relying heavily on selling most of their wares to the retirees contemplating moving here. Many of these same retirees were/are counting on selling or mortaging their homes in order to buy here. Now, is it not feasible at this time to do so. So, I think that many of them will stay where they are and ride in out until things pick up, if they ever do. It will also have impact the tourist industry because people are not spending money as much on things that they can do without. That of course includes travel that is not necessary.
Of course we know what the slump in the housing market has done to the financial industry elsewhere. If they are not going to sell as many homes here as they predicted, many of which are already built, it will impact other businesses - construction, services, foreign medical facilities, etc. Maybe many think that if these people do not move here there are plenty of Mexicans that will buy these homes. But, the reality is that a large portion of Mexicans could not afford the prices that they are asking, and would never qualify for a mortgage of the amount needed to buy.
If you have been following the financial market you will see that it is already having an impact here. The peso has fallen and so has the Mexican stock market.
I am not too worried for myself really because I already have my home here, which is free and clear. I also get a pension from Canada which allows me a decent living, if I am careful. But I do feel that prices will rise and I am going to have to tighten my belt considerably, as I think many of my friends and neighbors will also have to do.


BajaGringo


Sep 19, 2008, 3:47 PM

Post #3 of 90 (7726 views)

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Re: [Rosalinemg] Financial crisis

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I have been saying for a long time that going to a global economy means going to a global standard of living. I don't see any economical model where that could possibly be avoided in the long term. The US economy has been a house of cards for several years in my opinion and just a few bad news stories away from blowing down. The only hope IMHO is to form a North American Union of Canada-USA-Mexico and create an "Americano" dollar currency. Building a wall and isolation is the equivalent of burying the collective US heads in the sand.

But what do I know...


Our House Building Project in Mexico...
Lomas de San Martin
Loving Life on the Baja Peninsula


Blackjack Davie

Sep 19, 2008, 4:54 PM

Post #4 of 90 (7714 views)

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Re: [BajaGringo] Financial crisis

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Rosalinemg, I clearly said that it did include Mexico. It was this fact that led me to believe that it was ok to post the subject on this forum. Perhaps, as you seemingly misunderstood me, I may well not have perceived your post correctly. Regardless, top of the day to you. David


Rosalinemg

Sep 19, 2008, 6:55 PM

Post #5 of 90 (7688 views)

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Re: [Blackjack Davie] Financial crisis

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Please excuse me if I somehow seemed to misunderstand you. I did not! I was only pointing out how much I agree with you. It was my intentions to try to explain why I feel that what is happening is having an impact here. I think that this subject is fine to discuss and informative for those who care to understand how the financial crisis is impacting the people here also.
Rosaline


Blackjack Davie

Sep 23, 2008, 4:57 PM

Post #6 of 90 (7613 views)

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Re: [Rosalinemg] Financial crisis

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Rosalinemg, I tried to respond to your last post but there was a screw-up in my access to the forum. Carol Wheeler and Tony Burton will support that statement. It isn't necessary, of course, but I wanted to say that I was sorry for my crass reply. I just did not understand. I have a friend who says that, "communication is difficult even when we know all of the words." Explains our situation perfectly. Best regards to you. David


Gringal

Sep 24, 2008, 9:07 AM

Post #7 of 90 (7544 views)

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Re: [Blackjack Davie] Financial crisis

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Maybe they aren't jumping out of Wall Street windows like they did in the 1929 crash because they're getting golden buyouts....so they can just take the elevator.

If you're trying to sell a house in Mexico right now and your target customer is a person from NOB, you may grow old or older and grayer waiting. Since the homes were cashed out, there's no default on mortgage crisis, but I have empathy for anyone who is in a hurry to sell becaise of their personal circumstances.

IMO, we're better off here in Mexico during this wild ride in the U.S. At least, we are unless they quit sending those checks every month and the "safe" Treasury funds go belly up. In that case, we will be testing the edibility of the fish in the lake. I hear you may start glowing in the dark....but they're catching them off the Ajijic pier these days and the local kids aren't fluorescent yet.

It looks like we are living in "interesting times". Too interesting.


BajaGringo


Sep 24, 2008, 11:02 AM

Post #8 of 90 (7523 views)

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Re: [Gringal] Financial crisis

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If you were to do a recap of the financial headlines from the past several months, look at the economic indicators and total debt load and then compare that to 1929 you would see what a precarious situation we are in. Then look for the market forces/industries that will fuel an upturn in this new global market competing with cheap foreign labor, costs of materials and technologies that today rival or surpass those found in the USA. We are witnessing a lethal combination right now:

1. Government has grown to historical levels in terms of size, reach, control and COST! If you add up all the taxes, fees and hidden costs of government we pay for, it is now estimated that we work over half the year to pay for that same cost of government. Here is a link...

2. The USA is abandoning its manufacturing roots. We thought we could replace it with technological development but it turns out that other countries can match or beat us at that game too, all with lower costs of labor.

I believe that the current Baby Boomers will be remembered as the last group that truly was able to enjoy the "American Dream", retiring at an age where you could still live, travel and enjoy life for years after leaving the old nine to five (now seven to six) behind. Many of this generation are even struggling now with their retirement when they thought they had done everything right to prepare for this day.

I hope I am wrong - I fear for my grandchildren that I am not...


Our House Building Project in Mexico...
Lomas de San Martin
Loving Life on the Baja Peninsula


jennifer rose

Sep 24, 2008, 11:54 AM

Post #9 of 90 (7515 views)

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Re: [BajaGringo] Financial crisis

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Please get back to discussing Mexico. There are other venues to discuss the US financial crisis.


NEOhio1


Sep 24, 2008, 6:49 PM

Post #10 of 90 (7466 views)

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Re: [jennifer rose] Financial crisis

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Interesting Jennifer, the financial solvency of retirees presently in Mexico is the topic at hand. There is no huge influx of people headed this way like in 04-05-06 and most here have been posting for a long time and our interests are in what's happening and what's happening and what's happening....

I certainly understand the need to keep the topics to Mexico-centered parameters, but frankly if the conversations on Mexconnect don't get broader and more encompassing of life hereI am going to get less interested than I am now.

I really like a good conversation.

In my house I will talk to about just about anything however if you ask how to get to Laredo or whether you can make it in one day or not, you get a print out of directions.


Rosalinemg

Sep 24, 2008, 8:03 PM

Post #11 of 90 (7440 views)

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Re: [jennifer rose] Financial crisis

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Jennifer, with all due respect, I think that this thread is about Mexico. We are attempting to understand, as Mexican residents and citizens, how what is happening in the E.U. is having an effect on us here. We are not living in a country that is immune when it comes to how we are effected. It would seem that no country is immune! I know that, even though I am not an American, that it is important to understand the impact of what is happening there will have here. I live in Mazatlan and have seen how, in what little time I have lived here, it is has grown in anticipation of the influx of retirees from NOB. So, now I am wondering with all the financial woes there if indeed we will have the influx that they have anticipated. And, if it does not happen what will happen to the real estate market, the trades, the services and other workers, etc. It could be a hard time for all of the people working in these industries. These are my neighbors, my friends, and my family. So, you see, talking about the financial crisis is about the E.U. and Mexico.
Rosaline


BajaGringo


Sep 25, 2008, 10:20 AM

Post #12 of 90 (7374 views)

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Re: [jennifer rose] Financial crisis

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Jennifer, if you are able to live in Mexico completely off income that is not to tied the US economy in any way, I commend you and at the same time I would suggest that your situation is unique among expats. The reality is that the US economy has a dramatic effect on Mexico - for foreign citizens and the Mexican economy in general. It is very related to Mexico. In my work I talk to a lot of retirees living or considering the option to live in Mexico. The number one concern most of them mention today is the US economy. That before any border crossing issues, FM3's, narco violence, dealing with a pila or adapting to the local culture and way of life.


Our House Building Project in Mexico...
Lomas de San Martin
Loving Life on the Baja Peninsula


Marlene


Sep 25, 2008, 5:06 PM

Post #13 of 90 (7319 views)

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Re: [BajaGringo] Financial crisis

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The Canadians seem good to go this winter. Some new charter flights NONSTOP from Canada to Mexico, have been introduced this season which will bring the usual cold weather suspects to the beaches. If they are concerned about the US economy as far as changing their travel plans, it isn't evident.

I am not sure I understand your comment about expats in Mexico being so affected by the ups and downs of the USA. Many expats are on a pension. Aren't USA pensions a guaranteed thing? When the USA economy chokes, do the pension amounts change? If not, I can't see how this economic glitch will drastically affect someone going about their regular lives in Mexico. If you are American and Mexico is only your playground then that's a different matter. You have to worry about your stuff up north. In the meantime, life is still pretty good here in Mexico for most of us.


bournemouth

Sep 25, 2008, 5:28 PM

Post #14 of 90 (7314 views)

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Re: [Marlene] Financial crisis

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Marlene - I think the number of people in the US who have guaranteed pensions, other than social security, are few these days. Pension plans have been changed greatly over the last 20 years or so and most of us have our pension money in 401K's/IRA's - a form of tax deferred savings and usually invested in the stock market or similar things. Interest on savings is minimal these days - the stock market is for the very strong of heart and/or young - there just is not as much spendable income available.


BajaGringo


Sep 25, 2008, 6:51 PM

Post #15 of 90 (7300 views)

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Re: [Marlene] Financial crisis

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Many of those who are considering retiring today are highly dependent on investments that rise and fall with the US economy/stock market. Also many who are considering the move were expecting to sell their homes in the US which have lost as much as 30% or more of their value from a couple of years ago, depending on which region you are in. Very few folks I talk to now have set pensions/no worries. It would be interesting to do a poll to see how the ex-pats measure up in terms of the security of their retirement. Perhaps it is different here on the west coast from the mainland...


Our House Building Project in Mexico...
Lomas de San Martin
Loving Life on the Baja Peninsula


thriftqueen

Sep 26, 2008, 10:46 AM

Post #16 of 90 (7233 views)

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Re: [Marlene] Financial crisis

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I am not sure I understand your comment about expats in Mexico being so affected by the ups and downs of the USA. Many expats are on a pension. Aren't USA pensions a guaranteed thing? When the USA economy chokes, do the pension amounts change?

Marlene, ALL pension funds are invested in various markets, stocks, bonds & etc.. These funds are not just sitting in a quiet corner somewhere not working for that retiree. If this house of cards were allowed to fall down and the USA experienced a full depression, you can bet we all who are on pensions would be greatly affected.

My husband is a retired firefighter from NM. During his 21 years of service each month he contributed a percentage of his salary to the Public Employee Retirement Assn. (PERA) his contribution was in turn matched by the municipality he worked for. His pension is based on years of service and rate of pay he earned during that time. Each year he gets a 3% cost of living (cola) increase. If this crisis were to continue probably the first thing to happen would be a suspension of that COLA and then more dire adjustments if the country went into a full depression and all those investments were affected and their earning power were reduced or eliminated. The board of this fund just made a statement to the retirees telling them that the fund is secure however it has lost monies in the mortgage fiasco.

Because this fund has been so well managed since it's inception at last report the balance was just over 20 billion. A few years ago the greedy NM lawmakers cast an eye on that fund desiring to "borrow" from it. Some wonderful retired "watchdogs" sought a constitutional amendment to block this from ever happening. The people of our state overwhelming passed that admendment. Big brazos to those folks.

Jennifer, I have saw Marlene's statement echoed in other MX forums. I feel it is pertinent for some to understand why ex-pats in MX could be affected by what is happening in the USA. Are we better off in Mexico? We feel we are, as the cost of utilities, property taxes are low and most own their homes (no mortgages). Cost of food is fast catching up with US prices. Who knows what the future will bring.


Rolly


Sep 26, 2008, 10:59 AM

Post #17 of 90 (7228 views)

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Re: [Marlene] Financial crisis

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I have seen my IRA lose one-third of its value in the past few months. So I have a burning interest in what's happening in the USA markets and congress. It has a direct affect on my life in México.

Rolly Pirate


alex .

Sep 26, 2008, 1:55 PM

Post #18 of 90 (7196 views)

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Re: [Blackjack Davie] Financial crisis

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I see no effect on my life either in the US or Mexico. What if the 700B USD bailout doesn't happen? Maybe I can't qualify for a home mortgage? My Mexico home is paid for, as is my AZ home. I don't need anymore houses. Stocks crash? Don't own any, small investments are in fixed interest stable funds. Maybe I can't get a car loan? I have four cars now. Credit card? Pffft. The sky falls and dogs n' cats live together? They live together now. Big deal.
Alex


BajaGringo


Sep 26, 2008, 2:30 PM

Post #19 of 90 (7183 views)

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Re: [alex .] Financial crisis

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I am very happy for you Alex that your financial future is safe and I hope it continues to stay that way. You might want to do some checking though as there are SOME investments that people think are "stable funds" based on historical models but many of those same models are falling, one by one with the current situation. Case in point - WaMu - is the largest bank to fail by far in the country's history. Its $307 billion in assets eclipse the $40 billion of Continental Illinois National Bank, which failed in 1984, and the $32 billion of IndyMac, which the government seized in July. This is not an isolated event but an ever bigger domino in the chain of events that make many fear for the financial future. I think that many are becoming tone-deaf to so much bad news and fail to understand what is happening before our eyes.

I hope that you can continue to be isolated from such events Alex. Many like Rolly have already seen the effect of these events; their hard earned money and investments losing so much value over night is a scary prospect. "Pffft" seems like such an insensitive posture in light of that fact.


Our House Building Project in Mexico...
Lomas de San Martin
Loving Life on the Baja Peninsula


alex .

Sep 26, 2008, 2:37 PM

Post #20 of 90 (7178 views)

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Re: [BajaGringo] Financial crisis

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If I lose my money, I'll make more. I try to live my life outside of other people's money as much as is practical. "Owe no man", thats my philosophy. Seems like an attitude compatible with the Bohemian, self sufficient, ni modo lifestyle in Mexico described earlier, no ?
Alex


(This post was edited by alex . on Sep 26, 2008, 2:41 PM)


BajaGringo


Sep 26, 2008, 2:40 PM

Post #21 of 90 (7174 views)

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Re: [alex .] Financial crisis

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You and me are in the same boat as I have chosen the same path in life with my finances. I just can't help feel for those who aren't so lucky even though they have worked just as hard (or harder) and were told they were making the right decisions with their investments. That includes many close friends and family members...


Our House Building Project in Mexico...
Lomas de San Martin
Loving Life on the Baja Peninsula


Rolly


Sep 26, 2008, 3:10 PM

Post #22 of 90 (7160 views)

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Re: [alex .] Financial crisis

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In Reply To
If I lose my money, I'll make more. Alex


Glad for you. But that is not an option for many of us. For example, I'm 77 years old and in poor health. My money making options are extremely limited -- maybe teaching English. Many others are in the same boat, so we are damn concerned about what's happening.

Rolly Pirate


Linda in Morelia

Sep 26, 2008, 3:54 PM

Post #23 of 90 (7146 views)

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Re: [BajaGringo] Financial crisis

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Amen, BajaGringo.

Linda


Bethie

Sep 26, 2008, 5:20 PM

Post #24 of 90 (7121 views)

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Re: [Jim and Linda] Financial crisis

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I don't know if this makes sense or not, but I took my 401K and transferred all funds from stocks, etc. to the regular savings. I am not making anything, but I am not loosing anything either.


Gringal

Sep 26, 2008, 5:41 PM

Post #25 of 90 (7116 views)

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Re: [Bethie] Financial crisis

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During the Dot.com crisis, I made 26% on my money. There was the 20% I bailed out of and didnt lose before the crash and the 6% it made in a conservative investment.

A lot of this is what lets you sleep soundly at night, not about making much in the current environment.

Back to Mexico. Friend of mine was really living high on Mexican interest.....right up to the peso devaluation. Oh, there was moaning and groaning and gnashing of teeth.....but those who get aggressive sometimes regret it. On the other hand, sometimes they make out like bandidos. If we had crystal balls, we'd all be rich.
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