Mexico in "a world of feces"

We are still being told this will not be an “L” shaped depression, but don’t believe it. The shape is more like a long back-slash, pixel-bit-mapped by resting steps. If you back down the enlargement, it smoothes. Enjoy the slide. Like us, you may find you have more time on your hands.


We have been skipping more conferences than we have been attending lately, and fortunately for us, those meetings have been getting more web-savvy and posting the presentations for the non-attendee audience. That used to mean not getting to hear the illuminating conversations that happened around the coffee urn, or in sponsored hotel suites and piano bars, but even that part is now being web-cast. See, for instance, the conversation <theautomaticearth.blogspot.com> between Euan Mearns and Rembrant Loppelaar, of The Oil Drum: Europe, <europe.theoildrum.com> and Stoneleigh, of The Automatic Earth <theautomaticearth.blogspot.com> as they un-jet-lagged in the Rocky Mountains National Park in the run-up to the ASPO meeting in Denver <peakoil.net>. We could call ourselves a fly-on-the-wall, but from the photo, there was way much too much snow for that.

Speaking of flies, here in Mexico it is very, very quiet. This past weekend the children were all in Halloween costumes and parties and parades for the Day of the Dead were temporarily festive, but now it is Sunday morning, and the quiet has returned. Calling up ghosts, the newspaper Por Esto! <poresto.net> daily reports the number of people getting off airplanes in Cancun and Acapulco and the numbers of flight cancellations. Numbers, what numbers? It’s a cargo-cult for the vanishing tourism industry. Fewer than twenty percent of the hotels and restaurants in this part of the Mayan Riviera are even bothering to open.

The Diebold presidente here, Felipe Calderón, proposes to privatize the national oil company, Pemex. The elected but excluded actual presidente, Andres Manuel Lopez Obrador, with his pot-bagging street crowds, controls enough of the national assembly to thwart that move, but the seriousness of the proposal exemplifies the degree of official desperation. The largest single source of both national exports and government tax revenues is the state-owned oil and gas resource, which is in production free-fall after desperate attempts at tertiary recovery using nitrogen injection and lateral drilling. Mexico is the US’s third largest supplier, in case we had forgotten.
With the tax base falling, services are being curtailed at all levels, business taxes have tripled in six months, there are rolling blackouts and brownouts every day, the peso has slid and the price of food (most of it now imported) has skyrocketed. On January 1 the federal government will raise the price of gasoline, diesel, electricity and LP and LNG gas by 17%. It will also levy a “holding tax” on any bank deposit of 3% per year on everything over $1500. That comes on top of a 16% addition to the VAT.
This week they came with trucks and stopped at city halls in rural towns and gave out rice, beans, and corn flour for anyone who needed it. This is normally something they do after a hurricane. The hurricane now is economic. The government doesn't like people banging pots.
Mexico is getting hit with a triple whammy — its other two largest sources of income are remittances (which are down and people are returning from the north in search of employment) and tourism (which is being killed by the swine flu and violent crime rumors, both overblown, and by the financial belt-tightening upstream where tourists are begat — the US, EU, and Japan).



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