Featured, Headline, Mexico Economy »

Mexico’s economy took a major hit Monday as the peso dropped 3.9 percent to 11.7115 per dollar, the largest decline since October 1997, according to Bloomberg.com.  Bloomberg also reports that since reaching a six year high on August 4th, the peso has fallen 16%. One of the main causes of the decline is the government bailout of Hypo Real Estate Holding AG in Germany has spread fears that the financial crisis in the United States is spreading to Europe. Mexico’s Bolsa stock index also tumbled as much as 10 percent on Monday.

So what does this mean to Mexico real estate? Global finacial fears means that banks are more adverse to risk and it will likely become more difficult to secure financing for real estate in Mexico. Many individuals who are buying Mexican real estate get financed from US lenders because the interest rates are lower than Mexican lenders. In addition the decline of the stock market means that those wanting to cash out thier retirement portfolios have less cash available or may have to postpone their retirement date. With shrinking home values in the US, there is less credit available from home equity loans. Mexican home buyers could also face difficulty in securing financing since Mexico’s banking sector is about 80% foreign owned. One of the two largest banks in Mexico is Banamex which is owned by the United State’s Citigroup. Banamex and Spain’s BBVA Bancomer, account for 45% of Mexico’s banking sector according to buyusa.gov. The spread of financial fear across the globe means a lot of investors will hold onto their cash and wait to see what happens.

The other way to look at the current situation is that investors may be attracted to cheaper deals available in the Mexico real estate market. The tumble in the value of the Peso against the US dollar means it has become cheaper for US and international investors to buy real estate. This effect could be similar to when the US dollar fell in value and there was an increase in foreign investment in US real estate. Despite the attractiveness of Mexico real estate as an alternative, the fall of the peso and the Mexican stock market are bad signs for the Mexican real estate market.

Sources: Mexican Peso Sinks to Record Low as Financial Crisis Spreads Bloomberg.com

Financial and Insurance Services in Mexico BuyUSA.gov

Featured, Living in Mexico, Oaxaca »

The proper etiquette of dressing for social functions in Mexico is good to know if you want to be well received by others in the community.  This article discusses the social norms regarding dress code when attending social events in Mexico.

When you attend a cocktail party in the US you dress appropriately. It’s the same for urban Mexicans attending similar functions in their city, naturally to the extent that they can afford to do so. So why then do many full and part-time Oaxacan residents of American citizenship dress unkempt, often in sloppy t-shirts, jeans and sandals when attending a formal function? February 10, 2006, was the first time that the unfortunate phenomenon hit home and caused this writer to hypothesize both why it occurs and how it can be prevented, with a view to enabling expats to have much more diverse and culturally rewarding Mexican experiences.

That February evening was marked by two significant events in the city, each of which centered upon reflecting the past and looking to a bright future for Oaxacans. The first was the formal installation of Lic. Edna Franco as the president of the Oaxaca Bar Association, attended by prominent federal and state legal minds and politicians, and some 400 attorneys. The agenda, within the context of speech-making and cocktails, aside from its formal raison d’etre, was a look back at from where Oaxacan society has come, and forward socio-economically in terms of how the Bar and judiciary could move forward to ameliorate the lot in life of the citizenry in general. The second function was a cocktail party honoring those benefactors who had donated between 1,000 and 3,000 pesos towards a scholarship program for indigenous women who would otherwise not have the opportunity to complete their education and achieve their intellectual and career potential. The party was held within the context of the following evening’s benefit concert by internationally renowned singer Lila Downs, the project’s main fundraiser since 1995.

As often occurs in Oaxaca, my wife and I had to flit between functions, initially attending the former affair, then the latter, and finally back to the more comfortable celebratory setting of the inauguration. I wore a suit, and my wife similarly appropriate attire, as did almost all of the attendees at our first stop, the Bar Association function. There was wine, hors d’oeuvres, and a five-piece string band. At the fundraiser there was also alcohol, appetizers and live music. But the similarities stopped there. Aside from the minority of native Oaxacans who dressed similar to my wife and me or otherwise neatly and tidily as dictated by their financial ability, most of those (mainly male) invitees who were English speakers dressed as if they had just come back from a trek through the countryside on a mule. Any sense of acknowledgement of achieving the goals of the cause which brought us together, and all semblance of an atmosphere of festivity and respect for process, was lacking: “Just point me to the troughs so I can eat, drink, and talk.”

The legal event was attended by attorneys, many of whom were of modest means (one doesn’t get rich being a criminal, human rights or labor lawyer working in the trenches), yet each owned or borrowed attire to match the function, knowing he or she was going to be at a formal affair. The fundraiser was in fact called a “cocktail,” right on the invitation. Everyone approached to contribute was told that with their level of donation they’d receive a double pass to a cocktail party. Therefore, one could not possibly mistake what it was. Then why the dichotomy in dress? Everyone who can afford to donate at least 1,000 pesos can afford a nice pair of pants, clean shirt with collar, and leather shoes. Everyone who lives here must own at least one set of respectable clothes, and if not, why not.

We live in a major urban center, the capital of a state, where as we all know or ought to know, social functions are a part of day-to-day life. This was not a village wedding where one dresses as one wishes. The “anything goes” adage works at a beach resort or for a two-week vacation. In both cases the likelihood of being invited to a formal function is slim. But those who spend longer periods of time in a large city environment must be aware of acceptable standards of dress and that conforming to same is a show of respect for native residents and their society…in which you’ve been given the privilege of residing.

If expats in fact want to be accepted into the broader Oaxacan society, have Oaxacan friends and be welcomed into their social circles, then they must act the part and treat custom and societal standards with the respect they deserve. It’s not enough to throw money at causes and do charity work.

Don’t envy my assimilation. Don’t ask how I’ve become integrated. It’s not hard to figure out. I may be smug and now well on my way to alienating my wife and me from the several non-Mexican narrow social circles, but I do look in the mirror. Perhaps my fellow expats ought to look in their mirrors as well … at least before leaving the house for their next cocktail party.

Alvin Starkman received his masters in social anthropology in 1978, and his law degree in 1984. Thereafter he was a litigator in Toronto until taking early retirement. He and his family were frequent visitors to Oaxaca between 1991 and when they became permanent residents in 2004. Alvin together with wife Arlene operates Casa Machaya Oaxaca Bed & Breakfast ( http://www.oaxacadream.com ), a unique bed and breakfast experience combining the comfort and service of a downtown Oaxaca hotel with the personal touch and quaintness of country inn lodging.