Mexico is Burning

Dateline:Outta Gas and Outta Patience

Mexico suddenly finds itself in dire straits. A number of things which were neither foreseen nor planned-for have suddenly occurred. Three years ago, sub-$100 oil seemed like an impossible fantasy, at least for consumers. A slowdown or reversal of globalization was seen by no one until quite recently, when Brexit shook the establishment. Trump was considered a long-shot candidate right up to the eve of the election. Worse, the peso has lost nearly 50% of its value over the last two years, recently exacerbated by the Trump victory. And the final blow, gasoline, which remains in plentiful supply on global markets, is now having trouble finding its way to Pemex stations across the country, even at newly elevated prices, which should theoretically stimulate supply.

Of course, the most pressing of these issues is gasoline. Even back in 2014 when I did my road trip, gasoline was a contentious topic in Mexico, having seen a steady upward climb in prices. Now it’s everything.  Given the recent, hefty, and indeed record-setting price hike in Mexico, combined with shortage, I decided to do some research to better understand the facts. I looked at DOE data on global production and pricing of crude, and domestic pricing of gasoline. I looked at historical Mexican gasoline prices, and I looked at the exchange rate. I even read through bits of Pemex’s 2015 annual report. I’ve also read many articles in the Mexican press about the situation.

I learned some interesting things. First, since 2010, the price of Magna (regular unleaded) has had one very minor dip (Jan 2016) in an otherwise uninterrupted rise. Mostly those rises have been around 1% per month. Sure, they add up over time, but any given monthly hike is not too big, so people grumble, but then move on.

Relentless Price Increases in Pesos

However, the most recent hike was the biggest ever, 14% in a month for Magna, more for premium. That, along with shortage, has unleashed the simmering fury.

Poor Policy Making in Action

But the real culprit is not gasoline; it’s the USD/MXN (peso) exchange rate. Over a very long time frame, the peso has mostly only moved in one direction versus the US dollar: down. Sure, it’s not a perfectly smooth downward path, but the longer term trend is about as inexorable as any seen in finance. Historically it’s been a mostly gentle depreciation, with a few twists and lurches along the way. More importantly, it’s been manageable both for the economy and for Pemex.

One Direction: It’s Not Just a Boy Band. Pesos per USD Over Time

But things changed in the fall of 2014, when crude oil started to tumble in earnest and OPEC gave up trying to stop it. Suddenly the peso’s gentle, long-term swoon turned into a dive, creating a host of problems, particularly for energy and imported goods.

Gentle Peso Decline Turns into a Swan Dive. Source: Federal Reserve

Not only do currency traders view Mexico’s economy as dependent on oil, and thus vulnerable, but the picture for Mexican oil continues to worsen, well beyond the price of crude. In 2014, along with the global crude price, Mexico’s crude production began to decline at an accelerating rate. Add to this the fact that as the most liquid emerging market currency the Peso gets used as a proxy to short oil, and you have a pile-on to the poor Mexican peso.

Production Continues to Decline, Now at a Faster Pace. Source:DOE

So the gasoline problem is really an exchange rate problem, exacerbated by political bungling, and crippled, inefficient Pemex. In USD terms, the price of gasoline in Mexico has fallen since 2014, which reflects the global reality of excess supply against relatively fixed demand. And prior to late 2013, gasoline was actually cheaper in Mexico than in the USA. Even now, the Mexican price premium is nothing compared to places like Europe or Japan.

US vs Mexican Gas Prices. Converted to USD/Gal at Avg Monthly Foreign Exchange Rate

As for political bungling, Peña Nieto hasn’t helped his own cause. During his 2012 campaign, he promised that the energy reform would spur foreign investment and lower the price of gasoline to consumers. Had he been able to wave a magic wand and immediately turn the creaky Pemex-controlled monopoly into a thriving, competitive marketplace, this might have come true. But given the reality of a very long lead time to that promise, it was nearly impossible that it would work out as expected. In order for him to have been correct, he would need to accurately forecast both the peso exchange rate and the price of crude more than three years out, an impossible task for anyone. Sure, he was correct in essentially saying that Pemex was wildly inefficient. But he erred in thinking he could foresee future prices.

So instead of what he might have expected — a soft decline in the peso, and crude oil trading around $100/BBL — he got a collapse in both, exacerbated by steep production declines at Pemex. Worse, Pemex’s finances collapsed along with the crude price, thus cutting off a source of financing for the Mexican government. So by the time the Energy Reform was passed, and Mexico held its first auctions for oil drilling rights, the big, global energy producers responded with a collective yawn. Most of the drilling rights went unsold, leaving yet another hole in government finances. The majority of Mexico’s crude lies offshore, and it’s expensive to find and expensive to extract. Below $50/BBL it probably isn’t worth the hassle, especially when fracking costs onshore in Texas continue to plummet. Add to that the political risk of operating in Mexico, where the rule of law can be a variable thing, and a weak and bureaucratic justice system operates at glacial speed, and foreign oil producers stayed away.

As for Pemex, it is rapidly on its way to becoming a national liability instead of a national asset. It’s suffering perhaps the worst possible business nightmare of rapidly falling production, and a steep fall in the prices it can charge. Add to that enormous liabilities in the form of pensions and union contracts, and it’s in a tough spot. Oh, and the drug cartels have expanded into pipeline theft, stealing millions of liters of gasoline and disabling pipelines in the process. Add all that together and suddenly you have a state-owned albatross which can only be bailed out by radically higher oil prices, something not on the immediate horizon.

As for the immediate shortage, the above longer-term issues collided shorter-term with the law of supply and demand. While I have zero evidence to support the following thesis, it makes economic sense. Knowing that gasoline prices would be 14% or more higher in January than in December, Pemex and the gas station operators had every incentive in the world to “run out of gas” as December rolled to a close. Right? Hold your gasoline for an extra week or two and suddenly it’s worth 14% more. What sensible capitalist wouldn’t do that? Now, I don’t know if that’s what actually happened, but it seems to be the simplest explanation for sudden shortages around the country. And if that’s correct (and I have to believe it is at least partially correct), then policymakers erred big league in not foreseeing and addressing this problem, possibly via weekly price increases or some other measure.

But whatever caused the shortage, Mexican consumers are now mad as hell, and they feel betrayed once again by a government which is widely seen as rapacious and unresponsive to the needs of the ordinary people. Sadly and ironically, their protests are making things worse. Yesterday I read about a typical Mexican form of protest, shutting down federal highways. While such protests are, in my view, almost always misdirected, in this case they are almost comically misdirected. Not only are hapless drivers now wasting more gasoline idling on stopped freeways, but stalled gasoline trucks can’t make deliveries. Add to that the fact that people are trashing, burning, and sacking those gas stations, and any reasonable observer would conclude that this will only exacerbate the problem.

No Gas? Let’s Steal Toys!

Alas, Mexico is now in a tough spot. There’s zero confidence in the government. People are just angry, and acting out. There are reports now of looting all around the country. Toy stores, electronics stores, and other businesses completely unrelated to gasoline are being looted with abandon. Civic order seems to be breaking down in an unprecedented manner. Given the above, it’s hard to see a rapid resolution to the problem, even at higher prices. Gas stations will take time to rebuild, and as long as the highways remain blocked, gasoline won’t flow. Add to this misery the fact that the peso takes a dive every other time that Donald Trump issues a tweet, and you have a formula for more social unrest. As for the longer-term fallout, no one comes out looking good in this. The government manages to look incompetent, and possibly heavy-handed. The looters look just as bad as looters everywhere, and with handful of deaths to boot, Mexico just got another black eye.

At the root of the problem is the exchange rate as I’ve demonstrated, yet there’s little the government can do, though it is trying. Banxico, Mexico’s central bank, has raised overnight rates five times in 2016, for a total increase of 250 basis points. Each hike put a temporary floor on the peso, but ultimately did nothing to halt its slide. Mexico now has one of the higher overnight rates in the world, which should theoretically attract peso purchases.

But it’s not working. Thursday Banxico intervened directly in the market, purchasing one billion dollars worth of pesos, but the effect lasted all of six hours or so. Friday, Banxico intervened again with another billion.

Market Not Impressed With Banxico Intervention

This time it seems to have halted the slide, at least for now. But such intervention is not sustainable as it will chew up foreign exchange reserves in a hurry. And Mexico’s foreign reserves took a hit in 2015 and haven’t recovered. Moreover, central bank interventions in currency markets have a long and storied history of failure. If the market wants to take the peso lower, it will.

Foreign Exchange Reserves Off Their Highs

So Mexico finds itself in a tough spot. Though the peso could bounce a bit from here in the short term given the recent bolus of bad news, I suspect that it will find lower levels before stabilizing. Trump indeed will build the wall. Though that shouldn’t affect Mexico’s economy directly, it will be a psychological blow for the country and its investors. Worse, Trump has already persuaded several high profile companies not to invest in Mexico. And whether he can actually carry through with his threats or not, we can be certain that any company which had been considering inbound investment in Mexico has to at the very least be delaying such plans to see what comes after the inauguration.

As for this gringo, I’m fairly convinced that now is not the time to be buying property in Mexico. The peso is likely to get cheaper in my view. Between higher interest rates, higher gasoline prices, likely increases in inflation, and a “Trump-nado” about to be released, Mexico is probably looking at a recession in the next year. Given the social fragility that this episode has revealed, one can only wonder what might occur during a full-fledged recession. Buckle up. It’s going to be a bumpy ride.

---

P.S. This post has been a couple days in the making. This morning’s news suggests that the worst of the rioting and shortages may be over or on the mend. Nonetheless, I believe my conclusion still stands.

---

P.P.S. For an earlier analysis of the Mexican Peso I wrote in January 2016, click here.

Oscar Wilde in Mexico City

Dateline: a little corner of heaven

Oscar Wilde once famously said, “When good Americans die, they go to Paris.” Of course this was as much of a comment on Americans as it was on Paris. But I’m going to make my own witticism: When good gays retire, they go to Mexico City. And if they’re anything like me, they are going to eat the lotus and experience a new form of bliss.

Since my arrival last week, I’ve been busily getting myself into trouble. Oh, the beginning was innocent enough. Tuesday I ate an iffy taco or something, which slowed me down for a couple days. Nothing serious. On Wednesday, I had a lovely dinner with my friend Julio, owner of Mexico City’s most fabulous mid-century furniture store. Julio has found love, a retired gringo, and is as happy as I’ve seen him. Hopefully I can have the same effect on another, equally eligible bachelor.

On Thursday, I had errands to run. Got a new Mexican cell phone, after my old Samsung Blackjack was declared unfit to mix with modern networks. The new phone cost me a mere $80 USD and does everything my US iPhone does, including maps, WhatsApp (which everyone in Mexico uses), wordreference.com (in case I find myself tongue-tied), and heck, I can even make phone calls. God only knows why I didn’t do this at the start of my road trip nearly two years ago; it’d have made the trip *much* easier. Though the phone was a bit of a pain to set up — particularly as I’m new to Android — it now rocks, with a battery of death, and a nice, large screen.

Also while dining in a sidewalk café in short sleeves that same afternoon, my housemate sent this photo of the back yard and congratulated me on the timing of my trip. Yes!!! It’s already paying off!!! If I weren’t here, I’d be shoveling snow. Mexico City 1, Boston 0.

What I’m missing. Oh, Darn!

Friday is when the trouble began in earnest. After lunch at Casa de Toño and wandering around the Zona Rosa, I decided to stroll over to the Glorieta Insurgentes, an enormous plaza inside an elevated traffic circle, just to see what might happen. Aside from being one of the busier plazas in Mexico, due to the metro station there and the Metrobús station, it’s also “Gay Central.” Since it was Friday the 15^th, the “Quincena,” or payday, it was especially crowded with people trying to get a jump on the weekend, wallets full of cash and hearts as full of anticipation as mine.

As I stood next to one of the tunnels leading to the plaza, watching the crowd pouring by, a handsome man caught my eye. He was tall by Mexican standards about 5’6”, slim, with beautiful “moreno claro” skin, and a nicely trimmed beard. Dressed in black levis, a black button-down shirt, untucked, with a brown, polka-dot bowtie he cut quite a figure. I smiled at him, and he smiled back and continued walking, deep in conversation on his phone. But when he got into the plaza, he sort of started milling about, still chatting on his cell phone, but glancing back at me from time to time. Since he was the handsomest guy by far, I kept glancing back and smiling too. After about fifteen minutes of this, he headed back in my direction. As he passed me, I said “Hola.” And he stopped and replied “Hola” back. We exchanged a few pleasantries, and then he suggested I walk along with him.

It turns out Roberto is a “pharmaceutical engineer,” working on drug approvals for companies wishing to sell new drugs in the Mexican market. In his spare time he’s developed a treatment for psoriasis that’s herbally based, and is apparently working wonders on his sister who is a sufferer. We chat some more and the conversation really flows, but since he’s basically just taking a coffee break, we swap cell numbers and agree to meet on Saturday night at the Monumento a la Revolución. As we part, there’s definite chemistry between us and I practically float back to my hotel, desperately wishing the next 27 hours could somehow pass in a flash.

That evening after dinner, I decide to wander around the Zona Rosa and check out some bars. The streets are flowing with oceans of partiers, from twinkie boys dressed up like Boy George, to bears in leather and everything in between. I’m feeling exultant. There’s really nothing like this in Boston, and even San Francisco’s Castro District can’t match the sheer number of people, places, bars, clubs and discos, not to mention the level of flirtatiousness. Though I’ve been in the Zona Rosa many, many times, outside of Gay Pride I’ve never seen it this crowded. As I’m swept along by the tide of humanity, I reach some calm spots, and I’m waiting for a light. It turns green and I cross Florencia, heading Southwest on Calle Londres.

This is where I hear “¡Hola! ¿Qué tal?” An attractive young man, albeit wearing lipstick but otherwise masculine-looking, greets me. The lipstick immediately turns me off. Though it’s not garish, it’s definitely not manly. “Sheesh, if I want a woman, there are plenty of real ones out there,” I think. But he has a beard, and aside from the lipstick is quite handsome with beautiful dark hair, perfect skin, and beautiful eyes. Still, I’m not won over, but he’s persistent. “Where are you going?” he asks. “I’m heading over to check out this bar I saw the other afternoon,” I reply. “Can I come with you?” he asks. “Sure,” I say.

We arrive at the bar. It has a stainless steel door, a “bear pride” flag, and a couple of husky bouncers dressed in black leather. They pat us down, looking for weapons or whatever. “Harder!” I tell the one who’s patting me down and the other one chuckles. He finds something in my pocket and asks to see it. I pull out the contents — a chap stick, my wallet and some eye drops for my contacts. “You’ll have to put the eye drops into your backpack and leave it with the coat-check. Drugs aren’t allowed into this club.” We have a brief discussion about whether eye drops are drugs or not, but they’re adamant. So we decide to leave. Sometimes I just have zero tolerance for bullshit and there are plenty of other places to go.

It turns out the young man’s name is Emilio, and we walk along the avenue chatting. Emilio seems quite taken with me, and I’m starting to overcome my aversion to the lipstick. We decide to go for a drink, so we find a quiet restaurant. We chat. Turns out Emilio is a roving Clinque expert. He goes from posh department store to posh department store doing makeovers, consulting on skin problems, and generally serving as a brand ambassador for Clinique. I ask him how the plummeting exchange rate is impacting him. He tells me Clinique has had to raise prices several times, and while the customers grumble, they keep spending. I file this away in the back of my mind under “international business anecdotes.” As we talk, he keeps smiling at me. Now that the lipstick has literally worn off, I tell him he’s much more handsome without it. He takes my hand and tells me how handsome I am, but I’m overcome with a mixture of unease, pleasure, and desire. Now, sans lipstick he’s quite striking. Though I’m tempted, I’ve already got a date with Roberto for the next evening, and though I don’t owe anyone anything at this point, I’m thinking I don’t really want things to get out of hand with Emilio, either. The evening winds down. It’s clear he wants more than dinner and a bottle of wine, but I’m firm and bid him good night. But before we part, we swap phone numbers. If nothing else, I’m highly flattered by the attention.

Saturday night rolls around. I’m supposed to meet Roberto at 6:30 at the Monumento a la Revolución. That afternoon Roberto and I had been exchanging flirty texts until about 3:00. I head over to the Monumento and get there at about 6:15. I had made a point of telling Roberto that I’m a man of my word, and if I say I’ll meet him somewhere, he can count on it. He tells me he’s the same way. So I’m partly expecting him to be a bit early, but he’s not there. So I wander around, play with my new cell phone, and take some photos in the golden light of sunset.

Monumento a la Revolución, Looking Up

Six thirty arrives like clockwork, but no Roberto. Nothing. I text him and say I’m at the door to the museum. Six forty-five. Still nothing. At seven, I phone his cell phone, but get a prerecorded message. “We’re sorry but this cell phone number has been temporarily suspended. Message G-47.” “What the heck?” I think, “What does ‘temporarily suspended’ mean?” “Why am I still subjecting myself to this kind of nonsense here in my mid-50’s?” At some level this isn’t surprising. The lower-esteem side of myself says, “Seriously, did you really think you’d have a date with a guy as hot as Roberto? C’mon, get real.” “But he was flirting with you up until 3:00 PM,” my more self-assured side reminds me. I try to call a couple more times, but to no avail.

So I walk back toward my hotel, somewhat despondent. Emilio had mentioned that he was free that night and even wanted to know when I’d be done with Roberto, though I told him it was open-ended. I’m torn as to what to do. I have very mixed feelings about Emilio, but his attraction has grown on me, though I wonder whether I’ll really be able to connect at a deeper level with a lipstick-wearing Clinique representative. I did, after all, partly work my way through college as an auto mechanic. But the alternative is to spend Saturday night alone, or, worse, get myself into more trouble. So I text Emilio and tell him I’ve been stood up, and is he still free?

As it turns out, he has headed into the Zona Rosa anyway, and is delighted to meet me. We go for dinner at a combination bookstore/music venue, El Pendulo. We have a light supper while listening to an absolutely fantastic jazz trio, and while we’re eating, my phone goes off several times indicating text messages. Since the only other person who has my number at this point is Roberto, I know it’s him. But I’m kind of pissed off that he stood me up, so I ignore it.

Later, Emilio and I browse books and while we’re separated, I read the text from Roberto. “I’m SOOOOOO sorry. I was mugged and my cell phone was stolen. I had to go to the police, and then to Telcel to cut off my old phone. Please forgive me.” Suddenly I feel intensely guilty for having ignored his text and worried about him at the same time, so I text him back. “Oh my god! Are you OK? Don’t worry about standing me up, really. That’s about as good an excuse as one could muster. I’m SO sorry that happened to you. You sure you’re ok?” He says he’s OK, but I worry anyway.

Later, Emilio has to go because his last train leaves shortly after midnight and then he has to catch a bus. I bid him goodbye and head back to the hotel, my head reeling from the events of the past couple of days. In less than a week, I’ve met two eligible men, one of whom really intrigues me. And my lower-esteem side was wrong. He really does want to see me! I may not have died, but I’ve definitely gone to heaven. I think I’ll be in DF for a good, long while. The rest of Mexico can wait.

Saludos!

Back in Mexico City

Dateline: Starbucks, Zona Rosa, DF

I made it. I’m finally in Mexico City. Not without a few errors and lessons learned though. Since I’m ostensibly going to be on the road for a good, long time, I bought an enormous suitcase. As the savvier travelers amongst you know, the airlines don’t look kindly on any suitcase that weighs more than 50 pounds. Since I monitor my boyish svelteness via mirror, I don’t own a bathroom scale. And because I’m likely on the road for at least a few months I packed generously. And packed. And packed, thinking I’d need LOTS of stuff. What if I get invited to a luau? Better pack that Hawaiian shirt.  Fortunately I had looked up the airline rules, so I was aware of the fact that for 50 Lbs or less, I’d get a free checked bag. Go over that limit by even an ounce, though, and it’d set me back $100 USD. So I decided to also include a reusable grocery bag from Sam’s Club figuring I’d be able to offload some of the extra stuff if I went over. But I didn’t really believe my suitcase weighed more than 50 lbs. My housemate disagreed, but I wasn’t convinced.

When I got to the airport, housemate was immediately vindicated. My bag weighed 62.5 lbs. Oops! Fortunately I had arrived with uncharacteristic earliness, so I had time to offload. Out came the Sam’s bag, and I started putting heavier stuff into it. Fortunately, it all fit comfortably, and I was all set with one 50lb checked bag, a knapsack and my stylish Sam’s bag to carry on.

And I learned an interesting lesson in the process. As you know, the airlines’ business model now revolves around charging you for things that were formerly included, like checked luggage. At least when you want to check it. If they want it checked, well then it’s a different story. But of course, when this happens, they aren’t typically bags you want to check. And you aren’t ready to check them, and they usually tell you just as you’re walking down the jetway. “Oops…our overhead bins are now full. We’ll gladly check your carry-ons for free.”  This is code for “You ain’t goin’ nowhere, Bud, unless you hand over that carry-on. Pronto!”

This happened on both legs of my Mexico flight, but it turns out my grocery bag became a secret weapon, despite the fact that I was in the last boarding group on both flights. See, because it has an open top, my Sam’s bag is not really “check-able.” Right? The minute it hits a conveyor belt, it tips over and all the stuff falls out. As I went down the jetways, I could see the wheels turning in the gate agents’ minds as they looked at my bag: “Nope, we can’t really get him to check that one, and the back pack will fit under the seat.”

So I was spared the involuntary bag check. Of course this came at the price of traveling in perhaps the tackiest fashion possible, with various bits of personal goods visible to my fellow travelers. But you know what? I’ve really given up worrying about that kind of thing. This is one of the good things about getting older.

As for the other aspects of the trip, they’re all more or less good. I’m a little annoyed at Expedia, though. After hunting around for a hotel and being surprised that hotel rates don’t seem to reflect the collapse in the Peso, I decided to live dangerously and take one of their special “mystery deals,” where you don’t know the name or precise location of the hotel until you’re already committed. But the ostensible payoff is that you get “up to a 40% discount!” Immediately after I booked my hotel, I went to Google maps to find the location and right there on Google maps was a rack rate for said hotel that was about three dollars per night less than my “super special mystery deal.” Needless to say, I was not amused. Nor am I likely to ever repeat that ridiculous experience. Frankly I feel like what Expedia did was borderline fraud. And stupid to boot since I’ve been a very loyal user and travel ALL THE FRIGGIN TIME! Why piss off one of your best customers?  That said, the hotel is surprisingly nice, recently remodeled, and still a good deal, even if the selling of it was a smidgen dodgy. By the way, I only booked 2 nights as the rates seemed high. And I don’t know if it’s because the market is really different for the next few days, but now that I’m here, the posted hotel rates are *much* lower on Expedia than they were when I was checking from Boston. Hmmmm……

Buyer, Beware!!!

I’m now sitting in a Starbucks on Calle Genova in the Zona Rosa, a stone’s throw from the Glorieta Insurgentes plotting my next move. For all the bravado of my last post about the one-way ticket, I’m surprisingly unsure as to what my next move will be. But the trip has already paid off as I narrowly escaped a snowstorm, and there are surely plenty behind that one.

Things with Edgar have taken a turn for the I’m-not-sure-what. Two weeks ago, he was dying to see me, wanted me to stay with him in Tehuacán for more than a few days, and was eager for help with his business. Last week he messaged me: “we need to talk on Skype.” Via Skype, I learned that he has a budding boyfriend and for that reason it’d be weird for me to go to Tehuacán.  That was OK with me, and I repeated that we weren’t boyfriends, as he knew, and that he was too young for me anyway. (Something we had already discussed before.) So the plan became that he was going to meet me Sunday in DF. He’d stay the night with me, buy inventory the next day, and then return to Tehuacán.

Just before I left, that too changed. I messaged him Monday to confirm the plan. He replied promptly: “It turns out that Sunday is my brother’s birthday and I can’t come to DF. Besides, I’m a little short of cash anyway. I still really want to see you, but maybe before you go back to Boston.”

“Whatever,” I’m thinking. I really have a low tolerance for flakiness. And without going into the tedious details, yes, he feels a bit guilty and did apologize. But I’m still harrumphed, feeling a bit like he had effectively been trying to “keep me in reserve” as a sort of backup boyfriend, or I-don’t-know-what. And that’s the crux of it, isn’t it? If you’re going to be friends with someone, you share your life. And if you’re constantly hiding a bunch of stuff, well, to me at least, that’s not how you treat friends. I’m not getting worked up about this, but simply taking it as new information and acting accordingly.

But tonight I’m going to dinner with my friend Julio, who owns the most fabulous mid-century furniture store in Mexico City. And then over the weekend I meet up with Bill of Travels of a Retired Teacher. And hopefully get to meet the famous Alejandro. After that? I’m surprisingly undecided. As you know, I’ve fantasized long and hard about making a go of living in Zacatecas. But one side of me says, “hey, Kim. Just rent a place in DF. Spend the winter here, and then see how it goes.” The other side says, “Go to Zacatecas. You already know you could live in DF; Zacatecas would be something new, and even if you don’t settle there, a few months could be an amazing experience.” Hopefully I can make up my mind in the next week. Meanwhile I’m certainly happy to be back in Mexico City once more, surrounded by the special enchantment of this aluringly crazy, frenetic, and never-boring megalopolis.

Saludos!

 

One Way Ticket to Mexico City

Dateline: Decisionland

I’ve done it. After months, perhaps even years of indecision, I’ve done it.

I’ve booked a one-way flight to Mexico City. I’ll be leaping out of Boston and into the great unknown on January 12^th, 2016. Wish me luck.

Of course, those of you who’ve read along for a while know I have a certain flair for the dramatic. And I’m not letting you down today.  You see, it has been nearly two years since my Great Mexican Roadtrip, undertaken in my trusty Toyota pickup. As those of you who read along know, it was a truly amazing adventure. And it’s been one I have wanted to repeat, albeit with some different destinations.

But how? Sure, I could just get back in the truck and head west on the MassPike and retrace my steps from the last trip. But part of me has hesitated. Frankly, with the exception of a few highlights like New Orleans, (one of my better posts, IMHO) seeing friends in Houston, and a couple of other interesting sights along the way, I didn’t much enjoy the US leg of the trip. And that doesn’t mention the fact that just getting to Laredo is a nearly week-long effort, and with gasoline, hotels, and meals costs about $750, one-way. And I definitely didn’t enjoy the return part of the US leg either. In one last, desperate effort to finally get home at the end of that roadtrip, I ended up making a marathon 15-16 hour drive from Knoxville, TN to Boston, driving through pelting rain nearly the entire time, and arrived home, completely spent, at 3:00 AM. Nope. Don’t want to do that again. Also, since I’m going to be leaving in January, it’ll be harder to avoid snow. While the interstates are generally well-cleared, the fact of the matter is that in the end, man is no match for Mother Nature when she gets cranky. And spending hours stuck on an interstate in a blizzard is one experience I have no desire to try. Not even once.

Stuck in a Blizzard. No way, José!              Photo: Reuters/Chris Keane

Admittedly, I will be giving up some convenience and freedom. I loved driving around Mexico, with its lovely vistas of volcanoes, open fields, and other interesting terrain along with the ability to stop wherever and whenever I wanted. And I only had to schlep a lot of stuff between my truck and a hotel, rather than dragging suitcases through town. But the Mexican bus system is excellent and can get you everywhere, since many Mexicans don’t own cars. They manage somehow, and so will I. Of course I can always rent cars too, and typically at less than fifteen dollars a day, it’s a pretty reasonable alternative if I want to visit a remote ruin or some other place off the beaten path.

Aside from just getting away and doing some traveling, I have some other goals for the trip. First, Edgar needs my help. As it turns out, he went ahead and purchased the store where he works, but didn’t tell me about it until a year later.  As you might recall, he most definitely did not want my advice on the initial purchase. I think he just wanted the store so badly that he was basically willing to throw all caution to the wind. But the former owner ended up agreeing to a series of payments over three years to finance the transaction.  All of this was unbeknownst to me until September when Edgar told me he had “three confessions to tell me.” One of them was the purchase of the store. “Why didn’t you tell me sooner?” I asked him.  “I thought you’d be mad,” he replied. “Mad? It’s your life; I was just trying to help you make the best purchase possible.”  Since that September conversation, I have become more involved in the business, doing various bits of financial work for him, and helping him to analyze the (scant) data that he did have on sales and expenses.  And now that he has run the business for more than a year, he’s come to realize that maybe I do have something to contribute after all. So I’ll probably spend a couple weeks as an in-house consultant. I’ve already done some work on point-of-sale systems.

The second goal is to try to develop some clarity on whether I can ever get off my duff and move to Mexico, if only seasonally. I’ve redoubled my “fantasy real estate shopping,” both in DF and in Zacatecas, if only to better understand the market. But I have been (rightfully, it turns out) nervous about the prospect of the peso continuing to decline. And I’m fairly convinced that such a decline is likely to continue, possibly terminating in some kind of panic where the peso gets marked down to ridiculous levels. That day, if it comes, will be the time to strike. Of course that topic by itself could be a very long essay. But the import here is that I’m inching away from the idea of a near-term purchase and closer to the idea of renting. After all, who wants to buy property only to see its value plummet immediately, if only via currency?

A recent perusal of online rentals in Zacatecas turned up a three-bedroom house at the edge of the Centro Historico available for $265 (USD) a month. Frankly, it’s kind of a crappy house, but it does have a garage, a nice view of the Centro (as far as I can tell), and is in a neighborhood I like (Mexicapan).  For any number of reasons, it probably won’t be the house that I rent, but it does give me a good sense of what’s available, most of which is astonishingly cheap by Gringo standards. And by renting something in Zacatecas, I could kill two birds with one stone, simultaneously figuring out whether I could really live in Zacatecas, and having an adventure if nothing else.

$265 USD a Month With a Million Dollar View

Likely view from above house:

View from Google StreetView

Needless to say, details are all up in the air. I’m not sure how long I’ll be in Tehuacán or what might transpire there. Edgar and I are officially “not” boyfriends, though it certainly seemed otherwise when I was with him in DF in June for Gay Pride. Still, after he confessed to buying the store, we had a *very* frank conversation about many things including “us,” whereby I told him that adorable as he is, he is simply too young for me. Full stop. There’s a more than twenty year age difference; in my mind that is unbridgeable. He took it well, but despite that there’s still a high level of ambiguity in the relationship. So we’ll see what happens. The potential for drama abounds.

Oh, and the return? Well, I paid only $150 for the outbound flight, and before I fully committed to it, I checked returns. Most weeks in February and March, I can fly back to Boston on a one-way ticket for $183. Given that I consider a $400 round-trip to DF to be a pretty decent price, and have often paid more than $500, what is essentially a round trip with an open return date for $330 seems like the deal of the century.

So in less than a month, more Mexican adventures await. I’m on the edge of my seat!

Jump to comments

---

If anyone has any experience with flying in on a one-way ticket, a comment would be especially appreciated. (Does Mexican immigration care?)

 

Are You Up to the Challenge of Driving in Mexico?

 

Dateline: A tope-infested, traffic-clogged street in Mexico City.

So you think you’d like to take your car into Mexico and drive around the country. Are you ready? Pull out a pencil and paper, and take our little quiz and see how you do.

 

1. I would consider myself to be:
   1. A polite and courteous driver who tends to yield to help traffic flow.
   2. An assertive driver, but willing to give and take.
   3. A battle-hardened veteran of driving in Boston, New York City, or Chicago who gets my way when I need to.
2. The thought of navigating through rush hour traffic in Boston, New York City, or Chicago:
   1. Makes me think, “Bring it on, baby!”
   2. Doesn’t thrill me, but seems manageable.
   3. Reminds me of how many times I’ve already done it successfully.
   4. Gives me the willies.
3. Sometimes you just need to break a few traffic rules (illegal left turns, etc) to save your own sanity:
   1. Yes, I agree and just go for it.
   2. Yes, but I look first to see if there’s a cop around.
   3. No, it’s not worth the risk.
4. If I need to change lanes prior to making a turn in heavy traffic I can:
   1. Always get to where I need to.
   2. Mostly get to where I need to.
   3. Often have to backtrack because I missed the exit/turnoff/split because some pendejo wouldn’t let me through.
5. The car I plan to take into Mexico is:
   1. Shiny, new, and nice.
   2. A decent, later-model car that has aged well.
   3. Something that’s clearly showing its age, with a dent or two visible.
   

   The perfect “stealth” vehicle for Mexico. Extra credit for having live chickens on board.

6. My internal sense of direction is:
   1. Excellent; I usually know where I’m going and can track my orientation through a series of turns.
   2. Decent, I mostly know where I’m going.
   3. I rely on signage, familiarity or a GPS.
7. I have experience riding a motorcycle on the street in urban areas:
   1. Yes.
   2. No.
8. I tend to follow too closely:
   1. Often.
   2. Sometimes.
   3. Seldom or never.
9. If the car in front of me has malfunctioning brake lights:
   1. I often have to slam on the brakes in a panic.
   2. I can mostly tell if someone’s slowing down without relying on his brake lights.
   3. I can tell if someone’s slowing down, leave plenty of space and I also scan two cars ahead.
10. When my car is approached by various vendors of fruits, sodas, etc, or squeegee men:
    1. I’m delighted to buy something in traffic.
    2. It makes me nervous.
    3. I buy if I feel like it, but can also firmly say no.

Traffic may be bad, but it’s never boring

So how’d you do? Let’s score the quiz.

Question 1, traffic manners. If you answered C, give yourself 10 points. Five points for B, and if you answered A, you’re probably a really nice person, but score zero for this question. The fact of the matter is that driving in Mexico is often extremely aggressive, and if you’re used to driving in a US suburb, or anywhere on the West Coast, driving in Mexico is going to require a much more aggressive style than you’re used to. If you answered B, but still want to try, come to Boston to practice first.

Question 2, fear of driving in crazy traffic. If you answered C or A, give yourself ten points. You’re well-prepared, but even you will have to steel your nerve south of the border. B, 5 points, and D gets zero. Having driven extensively all over the USA on business, I have to say that my hometown is the worst, followed closely by New York and Chicago, though the latter two cities have grasped the concept of lanes, something that still eludes many Boston drivers. If you can drive in downtown Boston, at rush hour, you’ll handle Mexico with aplomb.

Question 3, willingness to bend traffic rules. If you answered B, give yourself 10, for A, 7. C again is the loser with zero points. Mostly you don’t have to break laws down here, but sometimes you do. Like when the speed limit on the freeway is 40 KPH (25 MPH) and everyone’s doing 100 KPH. Or like one afternoon in DF, to get to my new hotel about a mile from my old hotel (a journey of about an hour), I had to drive over a median strip that separated two sides of road that went the same direction. And then I took an illegal left turn. Had I not done so, I’d be writing this post from inside a mental hospital. Or from my truck, still in traffic months later.

Question 4, ability to force your way through when necessary. A gets you 10, B 5, and C zero. The fact of the matter is that there are plenty of people here (just as in Boston) who’d like nothing better than to make you miss your turn. You need to show them that you aren’t to be F-ed with. Otherwise you’ll get lost and have only yourself to blame.

Question 5, type of car you’re planning to take. OK, this one barely merits being a question. Take my advice and drive a junker into Mexico. You’ll draw a lot less attention, and arrogant Chilangos in their shiny BMWs won’t try too hard to keep you from changing lanes. A = 0, B = 5, C = 10

Question 6, sense of direction. A =10, B = 5, C =0. If you own a GPS with maps of Mexico and answered “C,” give yourself 5 points anyway. I have no idea how well a GPS would work here, but at least you admit your weakness and are countering it. The fact of the matter is that signage here is terrible and confusing. My best advice (barring a GPS, which I was too cheap to buy) is use your phone to Google-map your route, familiarize yourself with your general direction, and if you have good sense of direction, rely on that in preference to whatever the signs might appear to say. Quick error-correction is also advisable, i.e., don’t drive too far in the wrong direction.

Question 7, motorcycle experience. Yes gets 10 points, No gets zero. Why? When you ride a motorcycle, you are trained to be much more attuned to road conditions than you are in a car. People don’t see you, and you must literally live by your wits. You look several cars ahead, and you keep much tighter track of who’s around you. This is a great skillset for driving a car in Mexico where people are doing all kinds of crazy, unpredictable nonsense.

Question 8 and 9, following closely and judging speed of car ahead, should really be one question, but I was too lazy to figure out how to word it. The basic point here is that it seems like 10%-15% of Mexican cars have malfunctioning brake lights, even seemingly newer cars. If you’re not good at judging whether someone’s slowing down, tailgating is only going to make your life that much worse. And just like in the USA, if you rear-end someone, it’s your fault regardless of the condition of the guy’s brake lights. And you know he’s going to insist that they worked fine until you hit him, right? Questions 8 & 9, for each A =0, B =5, C = 10

Question 10, dealing with street vendors or performers. You will constantly be approached in your car to hand over money for things edible, a window-wash, or to pay for the floor show which could be anything from a clown, juggler, flame-eater, or contortionist. These folks understand a no-no shaking of your index finger, but some are slower to figure it out than others. These folks aren’t dangerous, just trying to make a living, but annoying at times. Frankly, I’ve paid for many a squeegee job as they are usually excellent and should set you back only 2-5 pesos. Answers A & C get 5 points, B gets zero.

Juggling fire is NOTHING compared to driving here

So how’d you do?

34 or less. Mexico’s a great place, but you’d be very unhappy trying to drive here. Just fly down and take buses and taxis and consider yourself saved a considerable amount of hassle.

35-55. You could well drive in Mexico, but might want to spend some time practicing in Boston, NYC, or Chicago downtowns at rush hour. But is it worth the hassle?

56-75. You’re automotively unflappable. Do you want to come with me next time and share the driving?

Over 75. Remind me not to drive anywhere near you.

Jump to comments.