Front Page Universal: Feminicide Law Fails - Four yrs after promulgation, law to curb murder of women inoperative, activists say

Front Page Financiero: Public deficit of 2.8% of GDP; FinMin says economy expanded 5.3% in 2010

Front Page Economista: Lack Of Rural Integration - Large Mexican agro-biz have gone global, but are delinked from national farming sector

Front Page Reforma: PRD Wins Guerrero - PRD candidate Aguirre wins gubernatorial contest; PRI says it will seek to have elections annulled

PLAZA DE ARMAS: Border economies booming: http://ping.fm/FWi6C

PLAZA DE ARMAS: PRI buried by leftist landslide in Guerrero http://ping.fm/GHcjK

#INEGI: Mining: Physical Volume Index -0.12% on seas adj, annualized basis in Nov 2010; YTD total sector +10.7%

#INEGI: Construction: Value of total construction put in place in Nov 2010 reaches MXN20.750bln,+4.81% in real terms from Nov 2009

#INEGI: Construction: NOTE: construction reports are for month of November 2010, seasonally adjusted growth from October 2010

#INEGI: Construction: Value of petroleum & petrochemical projects put in place +12.88% on m/m seas adj annual basis; 5th consecutive gain

#INEGI: Construction: Value of electricity & communications put in place +1.08% on m/m seas adj annual basis; 6th consecutive mo of gains

#INEGI: Construction: Value of water, sewage, irrigation put in place +7.39% on m/m seas adj annual basis; snaps 2mos of gains

#INEGI: Construction: Value of building (homes, hospitals, bldgs) put in place -1.16% on m/m seas adj annual basis; 3rd consecutive loss

#INEGI: Construction: Total value of construction put in place +0.38% on m/m seas adj annual basis; 4th consecutive monthly gain

#INEGI: Manufacturing: Factory work-hours +4.5% m/m on a seas adj annualized basis in Nov; year-long trend is barely positive at 0.8%

#INEGI: Manufacturing: Headcount up 0.8% in Nov on m/m seas adj annualized basis; 16th consecutive rise in factory employment

Front Page Milenio: General VAT Divides PRI - Party infighting over proposal to lower national VAT to 12% from 16% but extend to foods, meds

Front Page Universal: Central America Creates Force Against Zetas - Regional task force to battle growing Zeta Cartel formed

Front Page Financiero: State, Municipal Debt Burgeons - Since Dec08 debt up 37.5%, doubling in some entities; total MXN278bln

Top Story Reforma: IFE Limits Jalisco Spots - Electoral Com. ordered Jalisco Gov. state of the state address blacked in Guerrero, Baja Sur

Front Page Excelsior: Mexico Lags In Intelligence Work - Ex-prez of Colombia Cesar Gaviria says Mexico still lacks vital instruments

Front Page Economista: Mexico Investments Announced - At Davos, 2 major projects from Iberdrola (US$365mln) and Magna (US$100mln) pledged

#INEGI: Monthly GDP proxy IGAE services sub-index at 124.1 in Nov v. 123.8 in Oct seas adj annualized (2003=100); highest level since Aug08

#INEGI: Monthly GDP proxy IGAE services sub-index at 124.1 in Nov v. 123.8 in Oct (2003=100); +3.0% on seas adj annual basis

#INEGI: Monthly GDP proxy IGAE industry sub-index at 113.4 in Nov v. 113.2 in Oct (2003=100); +2.1% on seas adj annualized basis

#INEGI: Monthly GDP proxy IGAE farm sub-index at 122.7 in Nov v. 110.7 in Oct (2003=100); +243.9% on seas adj annualized basis, new record

#INEGI: Monthly GDP proxy IGAE at 119.3 in Nov v. 118.5 in Oct (2003=100); +8.4% in Nov on seas adj annual basis, highest level since Jan08

#INEGI: Monthly GDP proxy IGAE at 119.3 in Nov v. 118.5 in Oct (2003=100); +8.4% in Nov on seas adj annualized basis, biggest gain in 8mos

Front Page Milenio: Parra In Aguirre Cabinet - PAN Guerrero gubernatorial candidate Marcos Parra throws support behind PRD's Angel Aguirre

Front Page Universal: Plunge In Migrant Remittances Spurs Child Labor - Fall in foreign worker money amid crisis has forced children to work

Front Page Excelsior: Recommend No Travel To Acapulco - Recent spike in violence leads US, Canada to issue travel warnings to vacation port

Front Page Financiero: PRI Accuses PAN Of Breaking Legislative Pacts - PRI caucus in Senate says PAN "dynamiting bridges" amid elections

Front Page Economista: Labor Reform Hammered Out: CCE - Leading biz group says reform bill has consensus of all sectors, will pass in spring

Front Page Reforma: #Narco Reveals Financing Añorve - Federal protected witness says cartels gave US$15mln to Guerrero governor campaign

Front Page Universal: US Jails See Business In Migrants - Private jails see windfall in incarcerating thousands of undocumented in Arizona

Front Page Milenio: Executions, Society's Failure: Narro - Rector of UNAM univ. says 34,500 executions so far in Calderon term clear failure

Front Page Financiero: Mexicans Read Fewer Than 3 Books/yr: Educ Min - Mexicans among lowest worldwide, EdMin Lujambio says; 72% don't buy

Front Page Economista: Mexico Attractive, Despite Insecurity - Though China topped CEO survey, report says execs see Mex mkt worth the risk

Front Page Reforma: Edomex Slips Up On Spots - State of Mexico govt lied in testimony to electoral authorities regarding pol. commercials

Front Page Universal: Car Bomb Blows In Tula; 1 Dead - Cop killed in Hidalgo, 3 others in critical states; Zeta Cartel left #narco-messages

Front Page Cronica: Car Bomb In Tula Kills Police
Commander - Víctor Peña dies in blast in the state of Hidalgo, #narco cartel Zetas blamed

Front Page Milenio: Natl Security Chief Juan Alcantara acknowledges surge in #narco violence in border states, says U.S. remains safe

Front Page Milenio: Peace & Calm In Edomex: Pena Nieto - State of Mex (Edomex) governor touts low #narco violence, strong economic growth

Front Page Cronica: Conagua Threatens To Close Supervia - Fed water agency asserts authority to cancel Fed District underground hwy project

#BANXICO: Central bank says external demand picking up, internal economy booming as fixed investment finally reactivates

#BANXICO: Central bank maintains benchmark overnight interest rate at 4.50% at monetary policy board meeting

#BANXICO: Central bank maintains benchmark overnight interest rate at 4.50%, says alert to commodity price pressures going forward

Front Page Universal: Army Patrols Neza For NarcoCartels - After lethal gang shootout w/AK47s, grenades, army deployed in Mexico City suburb

Front Page Financiero: Insecurity Hits States w/20% of GDP - Violence concentrated in 5 states aggregating 20% of GDP and FDI: Fitch

Front Page Cronica: GovMin Delays Adult IDs (cont.) - National identity cards for minors to go ahead as planned

Front Page Cronica: GovMin Delays Adult IDs - Conflict w/electoral institute & other legal issue force indef suspension of national ID plan

#INEGI: EMPLOYMENT: Mexico urban (~nonfarm) unemployment rate at 6.73% in Dec10 on seasonally adjusted basis, v. 6.61% in Nov10

#INEGI: EMPLOYMENT: Mexico open unemployment rate at 5.55% in Dec on seasonally adjusted basis, v. 5.58% in Nov; 2nd highest in 2010

Front Page Universal: Cruz Roja Shields Against Violence - Mx Red Cross adopts international security policies from areas in conflict

Front Page Financiero: Mexico Among Biggest Software Counterfeiters: BSA - Assn says MX no.2 in LatAm, piracy losses of more than US$1bln

Front Page Milenio: Guerrero Atty Grl Not Investigating - Congress calls on Guerrero to probe beating of top PRD electoral official, in coma

Front Page Cronica: PRD Founder Cuauhtemoc Cardenas says party trails in 2012 presidential prospects, "wouldn't want life in PRD for anyone"

Front Page Cronica: PRD Founder Cuauhtemoc Cardenas says party trails in 2012 presidential prospects, "wouldn't want life in PRD for anyone"

Front Page Financiero: Stock Mkt Cap US$453bln - Bolsa ends 2010 at US$453bln, 44% of GDP; foreign capital accounts for US$161bln

Front Page Universal: Blow To Crime - Feds nab Flavio Mendez, co-founder of Zetas, & Jose Jorge Balderas, alleged fin operator of La Barbie

The Nafta city that wasn't: http://www.plazadearmastx.com/index.php/business/126-guest-column/497-the-nafta-city-that-wasnt-part-i

The Nafta city that wasn't, Part I

This story was originally published at http://www.plazadearmastx.com/index.php/business/126-guest-column/497-the-nafta-city-that-wasnt-part-i


In last week's column we wrote about cross-border trucking and San Antonio's aspirations to position itself as a major Nafta trading hub. As the nation's seventh-largest city and, for cargo shipped through the most important merchandise port at Laredo/Nuevo Laredo 160 miles away, the first major stop on the U.S. interstate system, it just kind of makes sense. Not just for import activity, either. Alamo City should benefit both from throughput traffic and as a prosperous exporter of goods to its natural southern trading partner. Foreign-trade powerhouse Texas (earning $192 billion in 2008), after all, originates 15 percent of all U.S. exports and nearly 40 percent of those go to Mexico, making that country the overwhelming destination of choice for the Lone Star state, according to a study by the Federal Reserve Bank of Dallas. So it comes as an incredible shock to learn that San Antonio sells more to Canada than it does to Mexico.

We're not the only ones flummoxed by this fact. “When we first saw the numbers on exports to Canada versus Mexico, that was quite an eye-opener,” Mayor Julián Castro told PDA in an exclusive interview.

Here's the story. Two of them, actually. The first comes from official data from the U.S. Department of Commerce's International Trade Administration. In 2008, the latest year for which metro-level figures are available, San Antonio exported $998.6 million to Mexico and $980.2 to Canada – a scenario in which Mexico narrowly edges out the Canucks as our main market. Including exports to the rest of the world, San Antonio collected export receipts of $5 billion. But the ITA bases this data on merchandise shipping origins, not on production origin, creating flawed data. (For example, McAllen is reported exporting far more goods than it has capacity to manufacture.)

The Brookings Metropolitan Policy Program has devised a superior methodology, though it, too, has its flaws. It looks at industrial capacity and ascribes industrial exports to metro areas on a proportional basis. Thus, if San Antonio makes 10 percent of U.S. widgets, it is estimated to hold a 10-percent share of U.S. global exports of the same – even if no Alamo Widgets actually end up overseas. Not perfect, but more accurate than the fed's scheme. In addition, it includes services exports, such as foreign tourism spending, business consulting, and patent royalties. By Brookings' accounting, San Antonio only exported a measly $524 million to Mexico – half of the $1 billion shipped to Canada.

Brookings reports that San Antonio's metropolitan area exported $6.5 billion to all foreign nations in 2008, 7.8 percent of the metro's total economy – a ratio so scant it fetched a lowly ranking of 81 out of 100 U.S. metro areas. Only 5.4 percent of jobs derive from export activity, or 90th out of 100. These numbers reflect immediate opportunity loss for our residents. The average export job earned $52,087 that year, versus the average household income of $45,794 in 2008. That doesn't even factor in the billions in manufacturing investment or indirect employment that have been foregone. For example, as of 2009 Toyota had invested $1.2 billion and created 2,000 direct jobs.

Indeed, the main reason that Canada outbuys Mexico is because of our Toyota plant, its leading North American pickup facility. The good news is that San Antonio hosts a manufacturing operation so significant that it can reverse the polarity of our trade compass; the bad news is that only reflects the relative triviality of our manufacturing base. Nearly 50 metropolitan areas exported more to Mexico, including unlikely cities such as Virginia Beach, Providence, Hartford, and Buffalo.

Returning to ITA numbers, which exclude revenue from service exports, San Antonio only shared in 3.3 percent of $130.7 billion in Mexico-bound merchandise exports. You might want to re-read that last sentence. By comparison, the Houston metro area cashed in on 52.3 percent of Mexico-bound merchandise exports, while the Dallas metro area grabbed 14.7 percent. Austin, El Paso and Laredo all beat out San Antonio. And much of our receipts came from oil and gas extraction – not from manufactured goods. In fact, our city places among the leaders in oil and gas extraction, petroleum and coal products, mining, animal production, leather and related products, and printed matter and related products. Very 19th Century.

San Antonio has missed the Nafta money train.

There is a bright spot in this otherwise dismal scenario. San Antonio exports have been expanding at a slightly faster rate than the rest of the nation. In 2008, Brookings registered a 12-percent year-on-year rise, versus 9.2 percent for the nation as a whole. That hints at opportunity, and what better time than now as the city emerges from a recession-induced restructuring and under the current management?

Bear in mind that the painful assessment above is painted entirely with data gathered from 2008 – before Mayor Castro took office. Next week in the second installment of this two-part column, we'll share excerpts of our conversation with our city's relatively newbie leader and his ideas for coupling San Antonio to the locomotive of global commerce.

Front Page Reforma: Marine Cocaine Seizures Dn 78% - Confiscation of S.American narcotics on high seas, 14 metric tons in '09 to 3 in '10

Front Page Financiero: Goldman Sachs Economist Jim O'Neil who coined BRIC term says 'BRIC Plus' includes Mexico, Indonesia, Korea, Turkey

Front Page Universal: Cardenas: Not Even A Miracle Will Unify PRD - Founder, former pres candidate says leftist party can't overcome rifts

Front Page Milenio: Calderon Warns SME Against CFE Attacks - SME union of defunct LFC utility who harass CFE union workers to face charges

Top Story Cronica: Segob Hides Contracts On ID Cards - Govt Ministry (Segob) classifies contracts with Smartmatic and Axtel for ID cards

POLITICS: Jorge Juan Torres Lopez confirmed as interim gov of Coahuila; replaces Humberto Moreira, new chairman of national PRI organization

#ANTAD: National Retail Assn says 2010 same-store sales -0.9% in real terms (+3.5% nominal) v. 2009; predicts +2.6% in nominal terms in 2011

Front Page Milenio: Navy Refuses Call For Indemnification - Military spurns recommendation by Nat'l Human Rts Com to pay for civilian deaths

Front Page Financiero: Early maneuvers for 2012 presidential race negate hopes for structural reforms: analysts

Top Story Universal: Pirate Chips Flout Renaut - US$5 cellphone chips on black mkt permit organized crime to evade Renaut nat'l registry

#NARCO: Army arrests, Jesus Almazan Barbosa, police chief of Monterrey suburb San Nicolas de los Garza for working as mole for Zetas Cartel

#BANXICO: IMMEX: Maquila program employs 1.834mln in Oct10, +12.0% y/y; total work-hours +11.4% y/y; total remuneration -3.0% in real terms

Top Story Reforma: Piracy King Deported; Mexico Lets Him Walk - Jesus Argandona Barrera deported to MX, but PGR says not advised by US

Top Story Universal: #NARCO: GovMin Jose Francisco Blake says many nations w/travel advisories for MX violence have higher homicide rates

Top Story Milenio: #NARCO: Fed Dist Mayor Marcelo Ebrard charges that violence reigns in PRI-controlled states

#NARCO: 5 of 9 cops abducted in Jalpa, Huanusco and Tabasco municipalities of Zacatecas return home; 4 still hospitalized, badly beaten

POLITICS: New Tlaxcala Gov. Mariano Gonzalez Zarur sworn in for 6y term, replacing PAN Gov. Hector Israel Ortiz Ortiz

PDA: Los Pinos publishes narco body count

Originally published at http://www.plazadearmastx.com/

On Friday, Jan. 7, one day before Gabrielle Gifford was shot in Tuscon, Arizona, another politician turned up riddled with bullets in a state that borders Texas. Saúl Vara Rivera, the mayor of Zaragoza, Coahuila, was discovered in a field outside of Monterrey, his back pumped full of 23 bullets. Of course it came as no surprise that the Coahuila incident failed to trigger media motion sensors in the United States, where the news cycle was utterly consumed with the Arizona madman's mass murder and political assassination. Sadly, though, Vara Rivera's slaying barely garnered any national coverage in Mexico, either.

There are undoubtedly multiple reasons for the disparate press responses between the two countries to the shooting of a politician (and let's remember that Gifford survived), but clearly one prominent factor is that political assassinations have simply become business-as-usual in many parts of Mexico. Vara Rivera was the first mayor of the year to be liquidated, but in 2010 between 13 and 15 mayors had their lives snuffed out by narco cartel gunmen, not to mention the dozens of police commanders and security officials who met similar fates. Moreover, on this occasion Mexico's national media had more grisly fodder for their coverage: 15 decapitated bodies were dumped in Acapulco in a parking lot on Jan. 8.

On Wednesday, Jan. 12, the federal government unveiled a new national database of homicides related to narcotics violence, the first time it has published a rigorous, full accounting of the cartel carnage. The report was methodically compiled in conjunction with independent citizen groups and prominent academics. The database showed that in the 49 months from Dec. 2006, when President Felipe Calderón assumed office and launched a sweeping security crackdown on drug traffickers, up through December 2010, a whopping 34,612 men, women and children have lost their lives.

Almost one-fifth, or 18.6 percent, of drug-linked homicides occurred in the infamously lethal Ciudad Juárez, a large maquiladora city crowded up to the river banks across from El Paso. More broadly, the large state of Chihuahua, where Juárez is located, claimed the lion's share of narco homicides during the same period: an astounding 29.3 percent. (Curiously, though, nearly all of the remaining 3,698 Chihuahua victims were located in the interior of the state and not along the New Mexico or Texas border. Juárez is the exception, albeit a blaring one.)

The second-deadliest Mexican state with a shared border with Texas was Tamaulipas – also the closest to San Antonio. A distant second it is, though– only 4.3 percent of the national total, trailing far behind Chihuahua's 29.3 percent. Los Pinos' new database tallies 1,475 narco-related slaying in Tamaulipas – roughly one per day through the four years and one month it covers. Reynosa, Tamaulipas held the dubious distinction of topping the list with 230 killings, or 5 per month, followed by San Fernando, away from the border and on the coast with 173, and then Nuevo Laredo, our closest neighboring Mexican city, with 159, or about 3 per month.

The state of Nuevo León, which shares a very small segment of border with Texas but claims much more important cultural and economic linkages due to the prominent ties between San Antonio and Monterrey, suffered 971 narco-related slaughters, only 2.8 percent of the grand national total, and only 0.02 percent of the state's relatively large population. Monterrey was the deadliest city in Nuevo León, registering 297 losses, some 6 per month.

Finally, Coahuila, the fourth state to border Texas, recorded 659 trafficking deaths, a slim 1.9 percent of the 34,612 body count during Calderón's war on drugs. The vast bulk of these occurred far from the border in the battlefield of Torreón and nearby Matamoros (not to be confused with the Matamoros, Tamaulipas border city).

PDA: Los Pinos publishes narco body count http://ping.fm/H3Vrt

PDA: Cross-border trucking http://ping.fm/q6Yxe

Top Story Universal: Narcos Adopting Terrorist Techniques - Ex DEA head Mike Braun says organizing into cells, investing mlns in technology

Top Story Financiero: Peso Has Room To Appreciate - Some LatAm nations have intervened to halt currency rise against US$, but MX has margin

Top Story Cronica: Foods & Bevs To Be Hiked 3% - Industrial Chamber Canacintra say fuel, raw material prices force members to raise prices

ECONOMY: World Bank lowers Mexico's 2011 GDP outlook from 4.0% to 3.6%; official estimate stands at 3.9%

Top Story Universal: Moreira, Lujambio Square Off - PRI president-elect rips Education Ministry Lujambio's policies on national talk show

Top Story Financiero: Economy Victim Of Insecurity: Fitch - Ratings agency says violence appears to have impacted consumer confidence, sales

Top Story Cronica: Citizens Reject Calderon's Security Strategy - Leading NGOs criticize surge in violence unleashed by counternarcotics war

Plaza de Armas: S.A. and the new trade hub-bub

This story originally appeared at http://www.plazadearmastx.com/

Perhaps more than any other city in the country, San Antonio stands to benefit from a new White House transportation gambit – should the hot-button policy manage to overcome mulish congressional resistance.

Nearly two years after the U.S. Congress killed the Bush Administration's pilot program for cross-border trucking, the Obama White House has just revived the issue with a proposal of its own. In the past, efforts to permit Mexican long-haul cargo trucks to ship throughout the U.S. has been fraught with the same kind of knee-jerk politicking and invidious bluster that characterize many bilateral controversies. Indeed, due to opposition from the Teamsters and other pressure groups, the U.S. has flouted its treaty obligations under Nafta to provide full access for more than a decade.

The primary pretext for blocking implementation has been safety concerns: Opponents warn of rattle-trap rigs driven by sleep-deprived, English-ignorant Mexican pilots careening down U.S. Highways, spewing smoke and plowing into family minivans. This same specious argument prevailed during the previous administration despite a rigorous and unprecedented program that would have installed U.S. federal transportation inspectors on Mexico soil to thoroughly pre-screen trucks and their drivers before granting certification to haul beyond the 25-mile border zone once in the U.S.

The facts plow through safety objections like a Hollywood semi breaches a police barricade. It turns out that hundreds of Mexico-domiciled carriers have accumulated many years of highway experience beyond the border zone, grandfathered in by rules dating from the 1990s, and the hard evidence from their history resoundingly refutes the critics. The U.S. Federal Motor Carrier Safety Administration found in a recent study that, between 2003 and 2006, these Mexican carriers with extended U.S. highway access had just 1.2 percent of their drivers removed from service after failing roadside inspections, compared with 7.1 percent of all U.S. truck drivers during the same period. Moreover, during the brief pilot program under the Bush Administration before Congress cut funding, zero accidents were reported.

If alarmist safety claims can be cleared from the road, passage of the current proposal would clearly benefit San Antonio. First and foremost, it could greatly enhance the city's dubious standing as a logistical hub for Nafta trade. The Mexican Economy Ministry estimates that bilateral merchandise commerce amounts to $1 billion per day, 70 percent of which is moved by motor freight. According to 2009 figures from the U.S. Bureau of Transportation Statistics, 38 percent of that moved through Laredo. If you aggregate other ports with proximate highway access to San Antonio, such as Brownsville and Hidalgo, the proportion tops 50 percent.

Currently, Mexican trucks with cargo bound for destinations beyond the border zone must transload to a U.S. carrier after crossing the international boundary, whereupon the imported merchandise departs on domestic wheels to travel throughout the U.S. In the absence of a border zone restriction, however, a more efficient supply-chain strategy could be pursued by shippers, and San Antonio is ideally located on the crossroads of major interstates. Positioning itself as a premier national shipping hub – a first-line distribution nexus for Mexican shippers – could prod Alamo City closer to becoming the vital Nafta node that so far it has been unable to reach.

Dr. Barry Lawrence, director of the Global Supply Chain Laboratory at Texas A&M University, points out that the jaunt between the massive manufacturing clusters in Monterrey and San Antonio might appeal to supply-chain managers as a one-day haul. Warehousing operations and other third-party logistics suppliers in San Antonio, as well as the free trade zone at the Port San Antonio, would all stand to benefit.

Though Lawrence agrees that San Antonio's transportation industries would prosper more if cross-border trucking is approved than it does under current restrictive regulations, he downplays the magnitude of the potential boon, observing, for example, that many transnational supply chains have already dumped hefty investments into staging operations at the border.

Nevertheless, consider that according to a Dallas Federal Reserve study, Laredo’s employment share in transportation services are a whopping 26 times the U.S. average. San Antonio clearly has a much more diversified economy, but still it may surprise some to learn that the tally of transportation, warehousing and distribution managers, logisticians, cargo and freight agents, and heavy and tractor-trailer drivers, exceeds the number of elementary-school teachers in the metropolitan area.

San Antonio exporters could catch a welcome break, too. Because a Nafta panel in 2001 issued a finding against the U.S. for failing to comply with treaty obligations, Mexico has the right to impose punitive tariffs on U.S. imports. It exercised that right in 2009. Nearly 100 products worth a combined $2 billion were hit with retaliatory duties ranging from 5 to 25 percent, and as an added twist of uncertainty, the affected tariff schedules periodically shift across product categories under a “carousel” mechanism. It's difficult to determine to what extent San Antonio-based firms have been hurt by higher duties, or would be hurt in future tariff-schedule rotations. (Mexico has frozen the carousel during negotiations, but will lift the punitive tariffs only if a deal is struck.)

U.S. Trade Representative Ron Kirk predicts a Department of Transportation program to allow Mexican trucks to operate in the U.S. could be up and running in four to six months. That will ultimately depend on appropriations, and whether the new congressional constellation will support it this time around is anyone's guess. Unlike past efforts, though, now an array of business lobby groups whose members have been hit by punitive tariffs are throwing their full support behind the White House's plan.

2011 Index of Economic Freedom: Mexico's score fell a half-point to 67.8, on increased taxes and govt spending; 48th in world, 6th in LatAm

Revstone Industries bought a die casting facility in Chihuahua from Compass Automotive and added a fabrication and stamping facility in SLP

Top Story Financiero: Foreign Investors Hold MXN594bln In Govt Bonds - MXN22.3bln flowed to local mkt in 2010 on interest rate differentials

Top Story Reforma: Inflation Threatens - Higher food, transport, fuel prices to hit Mexican pocketbooks; tortillas, gasoline, cigarettes up

Top Story Cronica: Govt preparing new immigration legislation to plug holes, better protect imperiled migrants, increase border security

Top Story Milenio: 3 Chihuahua judges suspended for vacating case against accused murderer Sergio Barraza Bocanegra to seek US asylum http://ping.fm/huctm

#AUTOS: AMIA: Mexico doubles automotive exports to Latin America, trebles to Asia in 2010 v. 2009

#AUTOS: AMIA: Mexico assembled 171,616 cars/trucks in Dec10, +11.5% v. Dec09; 147,552 were exported (+6.6% y/y); 104,941 sold in Mex (+8.7%)

#AUTOS: AMIA: Mexico assembled 2.261mln cars/trucks in 2010, +50.0% v. 2009; 1.860mln were exported (+52.0% y/y); 820k sold in Mex (+8.7%)

#INEGI: #PublicSecurityPerceptions: Mexicans felt less secure in Dec10 v. Dec09 as PSP index -1.3% y/y; nat'l, personal security seen down

#INEGI: #IndustrialActivity: Mining sub-index -0.84% in Nov seas. adj. annualized; -1.9% 4mo running ave.; -5.4% from historic max

#INEGI: #IndustrialActivity: Utilities sub-index +8.3% in Nov seas. adj. annualized; -4.7% 4mo running ave.; -1.8% from historic max

#INEGI: #IndustrialActivity: Construction sub-index +15.4% in Nov seas. adj. annualized; +10.9% 4mo running ave.; -4.6% from historic max

CORRECTION: #INEGI: #IndustrialActivity: Data for headline and mfg indices for November 2011, not October

#INEGI: #IndustrialActivity: Mfg sub-index +6.3% in Oct on seas. adj. annualized basis; +0.30% 4mo running ave.; -2.5% from historic max

#INEGI: #IndustrialActivity: Headline index +2.5% in Oct on seas. adj. annualized basis; +0.59% 4mo running ave.; -2.8% from historic max

#INEGI: #GrossFixedInvestment: Construction GFI sub-index up +2.7% in Oct annualized; +6.7% on 4mo ave.; still -3.7% from historical max

#INEGI: #GrossFixedInvestment: Foreign M&E sub-index up +2.3% in Oct annualized; +29.5% on 4mo ave.; still -24.9% from historical max

#INEGI: #GrossFixedInvestment: Domestic M&E sub-index up +14.8% in Oct annualized; +19.5% on 4mo ave.; still -12.9% from historical max

#INEGI: #GrossFixedInvestment: Machinery & equip. sub-index up +12.3% in Oct annualized; +31.8% on 4mo ave.; -21.4% from historical max

#INEGI: #GrossFixedInvestment: GFI index up +4.8% in Oct on m/m seas. adj. annualized basis; +17.6% on 4mo ave.; -10.4% from historical max

#BANXICO: Monetary base falls MXN19.096bln to MXN674.328bln due to post-holiday demand slack; monetary base +9.5% y/y

#BANXICO: Foreign reserves rise US$3.265bln in week ending Jan 7 to US$116,861lbln

IMF grants 2yr US$72bln flexible credit line to Mexico; Mexico says strictly precautionary; Mexico’s 1st FCL approved April09, renewed Mar10

FinMin: To fill posts vacated by Calderon cabinet shakeup, Gerardo Rodríguez to be new Dep. FinMin., Carlos Montaño new Dep. Spending Min.,

#INEGI: #IGAE: More analysis, data: http://latinintel.blogspot.com/2011/01/october-gdp-proxy-igae.html

OCTOBER GDP PROXY (IGAE)

Statistics agency Inegi published the monthly GDP proxy, the Igae, which is one of the broadest measures of economic activity available to number-crunchers.

The good news is it showed the economy expanding at a 5.9% rate on a seasonally adjusted, month-to-month, annualized basis. That is robust and in line with the private sector consensus for a 2010 GDP result of 5.1%, according to the most recent Bank of Mexico survey. The Finance Ministry also said last week that 2010 GDP would exceed 5%.

The bad news is that the economy did hit a soft patch going into the fourth quarter. On a four-month moving average, GDP was up 4.2% -- none too shabby, but below the 7% averages seen earlier in the year.

On a straight unadjusted basis, the IGAE index stood at 121.28 (2003=100) in October 2010, -1.4% from the peak in October 2008. A strange month for a peak, given the financial chaos then, but that is roughly where the economy stood before the recession kicked in during Q407, so it is fair to say that the Mexican economy has almost returned to pre-recession levels.

In terms of the industrial sectors, which did peak right before a severe recession in October 2007 at 121.03, the sub-index reached 117.72 in October 2010, only 2.7% lower than pre-recession levels.

In other words, by the end of 2010, Mexico will likely have finally regained the ground lost during the steep recession of 2008-09.


HEADLINE IGAE INDEX

INDEX | Annualized Var. | 4mo Ave.
113.63 | -12.55% | 4.69%
114.48 | 9.32% | 5.76%
116.66 | 25.42% | 7.87%
116.42 | -2.42% | 4.94%
117.11 | 7.35% | 9.92%
116.82 | -3.01% | 6.83%
117.45 | 6.70% | 2.16%
118.04 | 6.24% | 4.32%
117.84 | -2.05% | 1.97%
118.41 | 5.92% | 4.20%

#INEGI: Seasonally adjusted monthly GDP proxy IGAE index at 118.41 (2003=100) in Oct, +5.9% on annualized basis; +4.20% @ 4mo moving average

#INEGI: Seasonally adjusted services IGAE sub-index at 123.81 (2003=100) in Oct, +5.0% on annualized basis; +1.97% @ 4mo moving average

#INEGI: Seasonally adjusted industrial IGAE sub-index at 113.32 (2003=100) in Oct, -3.5% on annualized basis; +1.78% @ 4mo moving average

#INEGI: Seasonally adjusted agricultural IGAE sub-index at 110.15 (2003=100) in Oct, -46.3% on annualized basis; +1.71% @ 4mo moving average

#NARCO: Facilities overcrowded; Dec06-Dec10 82,500 jail sentences; nat'l prison population of 227,000 incarcerated; 54,000 overcapacity

MITOFSKY: National poll reports best cities to live: Guadalajara (6.1%), Mexico City (6.0%), Veracruz (5.4%), Puebla (4.2%), Toluca (3.2%)

MITOFSKY: National poll reports best cities for work: Mexico City (19.4%), Monterrey (9.6%), Guadalajara (4.8%), Veracruz (3.7%)

MITOFSKY: National poll reports best cities for vacationing: Cancun (16.2%), #Acapulco (13.5%), Veracruz (6.5%), Puerto Vallarta (4.9%)

POLITICS: Coahuila Gov. #HumbertoMoreira wins election as powerful head of Mexico's largest political party the #PRI; assumes office Mar 4

ENERGY: #Pemex raises gasoline prices: regular (Magna) +0.9% to MXN8.84/lt; Premium +0.4% to MXN10.14/lt; diesel +0.9% to MNX9.20/lt

#NARCO: 15 bodies, 14 decapitated, found in Acapulco Sat; Police Commander Emmanuel Radilla Hernandez slain Fri; Sinaloa Cartel left msgs

Top Story Universal: Cabinet Shuffle Responds To 2012 Elections - Calderon moved key players in preparation for pres elections next year

Top Story Cronica: President #FelipeCalderon shakes up cabinet, replaces personal secretary

Cabinet Shuffle: Calderon removed Juan Molinar Horcasitas as Transport and Communication Minister and Georgina Kessel as Energy Minister

Cabinet Shuffle: President #FelipeCalderon installs Finance Deputy Minister Jose Antonio Meade as new Energy Minister

Cabinet Shuffle: President #FelipeCalderon installs Finance Deputy Minister Dionisio Perez Jacome as Transport and Communication Minister

Cabinet Shuffle: President Felipe Calderon taps PAN congressman Roberto Gil as personal secretary, replacing Luis Felipe Bravo Mena

BANXICO: In 2011 Banxico to (1) publish minutes of board mtgs; (2) use inflation and GDP fan charts; (3) update consumer price index base yr

Narco: Mayor of Zaragoza, Coahuila, Saúl Vara Rivera, missing since Wed; more than dozen northern mayors assassinated in 2010 by cartels

#Narco: Mexican army finds 4 clandestine graves in Lerdo, Durango; at least 7 bodies uncovered; some estimated to be at least 1yr old

Top Story Financiero: US Will Open Passage To Trucks - US Dept of Transpo tables new plan to reopen nation's hwys to Mexican trucks

Top Story Universal: Nat'l Human Rts Commissioner says 214 mass kidnappings of migrants in 2010; average of 50 victims per incident

FinMin: Ernesto Cordero says Mx GDP grew more than 5% in 2010 (private consensus +5.1%); foresees +4.0% in 2011 (private consensus +3.6%)

Inflation Alert: Corn tortilla prices jump 1.99% in Dec as global food prices hit highest level in 2 decades; staple rose 5.9% in 2010

#BANXICO: 2010 consumer inflation rate ends @ 4.4% annualized (stood at 4.3% in Nov); core inflation ends yr at 3.6% (stood at 3.6% in Nov)

#INEGI: Manufacturing Orders Index +0.24% in Dec (seas. adj., mo/mo), snapping 2mos of gains, but orders and production sub-indices up

#INEGI: ProducerConfidence Index for manufacturing -0.31% in Dec (seas. adj., mo/mo), 2nd consecutive fall; pessimism for immediate future

#INEGI: Aggregate Trend Index for manufacturing +0.59% in Dec (seas. adj., mo/mo), 2nd consecutive rise; big jump in production sub-index

#INEGI: Despite Nov, Dec dip, #ConsumerConfidence at end of 2010 +13.8% v. end of 2009, index ends year at 91.2 (Jan 2003=100)

#INEGI: ConsumerConfidence falls -0.26pts in Dec (seas. adj., mo/mo), second consecutive decline; less optimism for household going forward

Tourism: Nov 2010 YTD international air travel passengers +16.2% y/y; 8.988 mln travelers total; US +11.7%; Canadians +21.7%; British +15.4%

NAFTA: The White House tabled a new plan to open US highways beyond the border zone to Mexican long-haul trucks as required by Nafta

SCT: #Mexicana airline investors PC Capital said to have raised threshold US$200mln in funding, airline to begin test flights before Jan 24

Consar: Funds managed in private social security system by #Afores reached MXN1.385tln as of Dec 31, increase of 20.3% nominal in 2010

Top Story Universal: Moreira Blasts Los Pinos - Coahuila Gov. Humberto Moreira will register his candidacy today for nat'l president of PRI

Top Story Cronica: 45 Pemex Officials Suspended For Pipeline Tapping - Investigations underway, some suspected in fatal Texmelucan incident

#CarlosSlim: Mexico online business journal Sentido Comun's "Slim Watch" says mogul gained US$7.1bln in Q4, now has net worth of US$74.5bln

SCT: #Mexicana airline investors PC Capital said to have raised threshold US$200mln in funding, airline to begin test flights before Jan 24

Top Story Financiero: Economy On Growth Path: Cordero - 2010 results to track into 2011, says FinMin; govt GDP forecast of 3.9% may be low

Top Story Universal: Employment Bounces, But Still Soft: Analysts - In 2010, 730,348 new jobs, but experts say 1.3mln/yr new job seekers

Top Story Cronica: Bishop of Santa Muerte cult in Mexico City collected ransoms in banks; accused of financial mind behind kidnapping band

IMSS: In 2010 workers enrolled in the Mexican Social Security Institute grew by 730,348 (+5.26%); mild recovery in formal private employment

IMSS: In Dec, workers enrolled in the Mexican Social Security Institute fell by 232,115 permanent and temp workers (-1.56%) to 14,612,000

Internat'l Business Report by Grant Thornton shows business optimism of 64% in Mexico v. Chile (95%) Brazil (79%), Arg. (+70%), LatAm (75%)

BANXICO: Monetary base ended 2010 at MXN693.423bln, +9.7%; central bank says expansion of MXN61.391bln congruent with 'normal' public demand

BANXICO: Final wk of 2010 sees central bank foreign reserves rise US$601mln, Mexico ends Dec. 31 with US$113.597bln

MITOFSKY: Nat'l poll shows 60% Mexicans say 2010 was better than 2009, v. 41% in year-ago poll; 76% see better yr in 2011 v. 58% last yr

BANXICO: Nov10 foreign migrant remittances @ US$1.623bln, +8.6% v. Nov09, -7.1% v. Nov08; pre-crisis monthly ave in 2007 was US$2.094bln/mo.

PEMEX: Mexican crude oil basket price ends 2010 at US$83.51/barrel, +19.6% on year from Dec 2009

Top Story Cronica: Catholic Church says Fed District authorities impose laicism like "Tailibans" enforcing a religion

TOP STORY UNIVERSAL: New lobbying rules take effect; lobbyists must register, abide by transparency rules, donations restricted

2010 Wrap: Mexican Bolsa ends yr at 38,550.79, historic high, annual gain of 20.02%, outpaces US, China, Brazil, Japan.