do not pretend to be a writer; you will see my Newsletter jumps around from subject to subject. When I come by some new information that I feel is interesting I insert it where I feel it should go.

Global Economy: We have not seen sales prices go down so far. The type people who have bought in Marina Vallarta are people who have paid cash for their condo. Mostly are financially in good condition but are rightfully so, nervous in a global recession that economists are now saying will end late summer 2009 and the global economy cycle will start back up at a record pace. Stock markets will shoot up like a rocket. not because of record earning by big corporations being reported but as I’ve said for years – the stock market will feed off itself as it did in the dot com run up several years ago.

Convention center /Fireworks symposium

The first convention in the new convention center that can serve dinner to 5,000 attendees at the same time was held April 20-24. The 11^th international fireworks symposium was held in Puerto Vallarta. Companies that make fireworks from all over the world came here to exhibit their newest fireworks to companies that put on fire works shows. Therefore Puerto Vallartians got free fireworks shows 5 nights in a row. Time of the shows were staggered so the people who the show was intended for could get to their vantage point. Whether it be by the yacht, bus or auto.

The shows were at:

• Convention center (north east of Marina Vallarta. Close to the regional bus station).

• Westin resort

• Football (soccer) stadium across from the Sheraton

• Malecon – down town.

We all are used to the fireworks that go up and burst outward with a spray of color.

What we saw was that but in several different colors at the same time. i.e. Red, green and white. The colors danced sideways one way then shot back the other way then the down ward. They lingered in the air longer than in the past.

On Friday night at 9 pm my wife and I went to the stadium to see the show at 8:45 after 30 minutes in the crowd estimated to be 12,000 we left as we found out that show was not set to start until 11 pm. We watched the Westins 11:15 pm show that lasted a full 30 minutes and it was fantastic. The fireworks manufactures spent literally millions of dollars to show off their newest creations.

Previous sites of the annual event were: Montreal Canada 1992, Vancouver Canada 1994, Walt Disney World Orlando 1996, Halifax Canada 1998, Naples Italy 2000, Walt Disney World Orlando 2001, Valencia Spain 2003, Shiga Japan 2005, Berlin Germany 2006 and the 10th anniversary back in Montreal 2007.

It was fantastic that the new convention center was inaugurated with such a special event. This event will be remembered by us Puerto Vallartians for ever. Thank you fireworks companies.

Bottom fishers and real estate speculators were lined up for the bargain re-sales that they expected come on the market in January, February, 2009.

All wanted beach front condos but at 70 cents on the dollar and that just did not and will not happen in Puerto Vallarta. They ended up sitting on the side lines.

The market values of beach front condos in Marina Vallarta are holding steady. Not increasing now but staying the same as 2008.

Trust deeds: March 5, 2009 it was announced that the long awaited bill that would make it legal for non Mexicans to own property anywhere in Mexico by deed and not trust deed thru a bank is now on the senate floor. 70% of the 4.3 million vacation properties in Mexico are now owned by non Mexicans. The proposed change to the constitution would reflect the current attitude towards foreign investment in Mexico. The current law in effect was written in 1917. Once the constitution is amended to reflect this non Mexicans will feel more comfortable with buying real estate in Mexico.

I find it interesting I am getting more and more USA beach front condo owners in marina Vallarta tell me the only asset they own that has not dropped in value 40-80% since mid 2008 is their marina Vallarta condo and that they wish they had bought more condos rather than stock they thought would never go down i.e. big banks, GE, AT&T. most of them got killed in the dot com’s and gave up on NASDAQ. Now they got killed in New York stock exchange. Cash in the bank earns less interest than the government admits inflation percentage is. Some tell me I do not really want to make a lot more money I just want to keep what I’ve got.

Despite all the bad press about Mexico, spring breakers from all over the USA pack Cancun and Puerto Vallarta disco’s, night clubs and bars. Peso goes a lot further now. 18 year olds can drink in Mexico. Mexico has once again become a very cheap place to vacation.

Casinos now in Puerto Vallarta: 3 slot machine /sport books now open in Puerto Vallarta. Largest is emotion in the galleria mall (next to Wall-mart) in the back on the ground level under the movie theaters. It has 370 slot machines that pay off in real money. The sport books have horse racing plus all college and pro-USA sporting events. Bingo is packed nights. Caracole Mall. Enter in the back. Take new elevator in front of large Telcel store. It's called Crown Vallarta. 200 slot machines and sports book. Bingo coming soon.

The other is in the peninsula mall. 2^nd level towards the beach at the end. Slot machines & sports book.

Newspapers report the sport books & slot machines are the first step towards casinos.

In a couple of years congress could say “look Mr. /Mrs. voter we have had slot machines and sports books all over Mexico with no increase in crime for several years now so that’s why we voted in casino’s. Casino’s will bring in huge amounts of foreign investment and employee thousands and thousands of Mexicans. The casinos will be tied to new large resorts that will also have large convention facilities.

In October 2004 newspapers in Mexico ran articles that out of 500 members of congress the pro-casino forces had 240 votes.

The next month the Catholic church ran full page advertisements in newspapers all over Mexico that announced they were now for casino gambling in Mexico as it had been fully explained to them how it would work and that the churches would get a small percentage of the governments casino income to offset their current short falls and to start back up again the many programs they have had to abandon over the last decade due to less offerings.

		Wednesday November 12, 2008 Bill Gates Yacht next to 3 cruise ships. Now that he is retired he spends more time in Puerto Vallarta at the Four seasons. Last year he & a man from Dubai bought a large percentage of
The parent company of Four Seasons it was reported. His security yacht is always next to his yacht. Helicopter on his yacht takes him to & from the Four seasons/ yacht/ airport where his private jet sits.

 Convention center: to be completed March 1, 2009. It will be able to have sit down dinners for up to 5,000 people. First big convention is in May 2009.

This will be huge for Puerto Vallarta starting in 2009 for national conventions and 2010 for international conventions as they need more planning time. The conventioneers will be housed in the marina Vallarta hotels, the Sheraton, and some of the Nuevo Vallarta hotels. It is located east of the airport about a half mile. You get to it by going down the road just past the big corona warehouse. Where it dead ends turns right and go about 400 yards then look to your right. Long straight entrance road.

Peso predictions of what it will be December 31, 2009

* PH D in economics at Cambridge University. He was the only economist that predicted the peso devaluation of December 19, 1994. When the peso went from 3 to 9.3 in one day. The peso has decreased more than any of the worlds most traded currencies in the last 6 months. The bank of Mexico has spent $20 billion of its US dollars reserves (5%) buying pesos to try and stop the pesos decline. low oil PRICES, drop in exports to the USA, MIGRANT remittances from Mexicans working in the USA. Mexico will once again be the cheap place to vacation as the US dollar goes a lot further now.

Oxxo is Mexico’s equivalent of 7-11’s or convenience food marts in the USA.

Puerto Vallarta had 160 January 1^st now and they plan to open 1 per week in 2009. They are owned by the parent company of sol beer. They also brew & sell Tecate, Dos Equis (XX) plus Coors and Indio of Mexico. They are trying to increase their market share up over Corona. No Corona sold at Oxxo stores. They have 6,374 stores nation wide.

The mom and pop small groceries are a thing of the past now. They are experiencing the same fate that occurred when Sam’s, wall-mart, office depot and then home depot opened in Puerto Vallarta.

A few blocks from the new Costco our second Wall-mart is under construction in a huge new mall in the big field on Francisco Villa. The side roadway has now been rebuilt. Wall-mart also going on highway in Bucerias.

March 12 to 16, 2009, the Latin America boat show will be held in marina Vallarta Puerto Vallarta. Yacht Builders from all over the world will show off their new line of yachts. They will need a lot of luck to sell them.

Mexico has spent US $18 billion of its foreign reserves thru February 20, 2009 to prop up the peso. Reserves as of February 20, 2009 are US $81 billion dollars. Pepsi investing US $3 billion in Mexico in new plant and equipment. It has 22 plants and 670 distribution centers in Mexico.

February 27 2009 Daimler’s Industrial division opened a 1.2 million sq. ft. truck assembly plant in Saltillo, Mexico. It hired 2,700 workers and the president of Mexico has instructed the economy Secretary to create a program to help Mexico truckers to replace their old tracks with new trucks constructed at this plant. Sounds like a plan to me.

February 4, 2009 it was announced that CFE, Mexico’s government owned electric company signed an agreement with the city of Los Angeles to sell electricity generated from the Cerro Prieto geothermal power plant in Mexicali, Mexico. Mexico also sells electric to Belize and Guatemala from geothermal power plants close to its southern borders. Geothermal is using the heat from the earth’s interior. Sounds like a winner to me. I guess you need to be close to a volcano!

Bad weather in USA / Canada factor. – Every winter that the USA / Canada have real bad weather January, February. March we get an unusual surprise in the normally slow (Real Estate Sales Wise) summers in Puerto Vallarta. 

People come to Puerto Vallarta strictly to buy a condo and plan to never spend January, February, March and April in places like Minnesota, Wisconsin, New York and all across Canada again. They come in with check book in hand so to speak.

West –jet airlines, Canada’s second largest airline said on July 29, 2008 that it will begin flights to Puerto Vallarta. This airline actually made money in 2007 and 2008.

New mega bypass. On June 18, 2008 the federal government announced in Mexico City that they were starting to obtain the necessary authorizations to construct a 2 lane mega-libramiento (highway /beltway /bypass) of 20.42 miles (32.87 kms) in the mountains behind Puerto Vallarta. It will take 2 years to build. The road would go from Ixtapa to Boca de Tomatlan. Road only. No development. The mountains behind Puerto Vallarta are designated as a “natural protected area”

 Gallerias Vallarta (next to wall-mart)  NOW OPEN

It’s 645,840 sq. ft. and contains 80 high end stores including Liverpool (the developer). Liverpool is to Mexico as Bloomingdales is to USA. Liverpool opened October 30, 2007. The movie theater complex is open. Most movies in English.

Time share sales:

World wide time share sales: # 1 = Orlando Florida, then Las Vegas Nevada, Puerto Vallarta, Mexico. Cancun, Mexico. The city in the world that ranks the highest in time share owners returning to year after year rather than using the exchange programs is Puerto Vallarta.

A certain percentage of time share owners turn into full ownership condo buyers.

The time share machine in Puerto Vallarta seems to be well oiled and never stops running so to speak. Mayan Palace in Nuevo Vallarta did US $17 million in February 2009. Sales are up 23% over 2008.  2008 sales were up US $83 million over 2007.

The Mexican government started construction March 11, 2009 on the world’s second highest dam. The construction will create 15,000 new jobs. It is a hydroelectric dam that will produce 750 Megawatts of electricity. The dam is on the border of the states of Jalisco and Nayarit at La Yesca.

Toll road from Guadalajara to just north of Puerto Vallarta.

Two thirds already built. The last leg the government has had problems with putting the money together for. Newspapers report that the last section of toll road is included in the 2009 Federal stimulus program in Mexico.

In 2007 Goldman Sachs investment fund and ICA (Latin American’s largest contractor) won the sealed bid auction for building and operating several toll roads. Their bill was only 1% higher than Carlos Slims and Screams of bid riggings were heard all around.

It appears the new auction will not be rigged and Goldman Sachs and ICA both have fallen on hard times so its Carlos Slim and the Mexican government will be partners in the FARAC II package.

Billionaire Carlos Slim told reporters on March 3, 2009 that his companies will create 34,000 jobs in 2009 and that he will spend us $1.89 billion dollars mostly on infrastructure improvements.

Therefore we might see the toll road be built starting in 2009 as part of Mexico’s job producing stimulus program. The job producing programs in Mexico will put people to work essentially over night as the plans specifications, easements and sub contractors only need signatures and money and shovels will hit the dirt.

Once completed the drive time to Puerto Vallarta from Guadalajara will be 2 hours 15 minutes. Currently it’s a 4.5 hour drive.

A lot more Guadalajara people will be able to justify buying a vacation condo in this area once the toll road is completed. A lot will send their children to Guadalajara University – Puerto Vallarta campus. They will buy condo and the children will live in the condo while in college- the parents and their younger children will visit say two weekends a month. Some have already moved their families to a villa in Marina Vallarta and the husband lives in a condo in Guadalajara and works Monday thru Friday in Guadalajara and spend weekends here. They do this to get the family out of all the pollution, traffic and noise in Guadalajara.

Carlos Slims yacht is based out of Marina Vallarta. He owns the largest slip @ 140 ft.

Bill Gates US $110 million dollar yacht was in the Puerto Vallarta cruise ship harbor for 5 weeks May/June 2008.  

	Construction progress tower B

Tres Mares   Between Cruise ship harbor and the Westin hotel in Marina Vallarta.

Preconstruction discounts currently available up to 5% building B and 10% building C.

Normal sale: 35% with signed contract of sale. 20% upon delivery in November 2009. Balance payable 7.5% of the sale price every 6 months. These 1 br units sold out January 5, 2007. I bought one of these units October 10, 2006. 15^TH level parking under the building. elevators that open directly into the 3 and 4 bedroom units cost the developer about US $125,000. more per condo.

REAL ESTATE PRICES

ports fans – “all the cheap seats are sold”.

Puerto Vallarta real estate companies report sales are way-ay off from previous years. What we saw in 2008 was more Canadians buying condos. Developers have held their prices.

Beach front in marina Vallarta: 2 bedroom condos below US $435,000. are far and few between. 3 bedroom condos below $600,000. are almost gone. 1 bedroom units are at us $240,000. if you can find them.

Re-sales @ Bayview Grand and Porto Fino you can almost count on one hand. At Shangri-la we are fortunate to have 15 finished but mostly unfurnished condos for re sale.

The 3 bedroom units at Shangri-la are being offered @ around us $725,000. the 4 bedroom units at us $950,000.

Next we have the expensive seats!

Tres Mares “B” tower units to be delivered in November 2009 one month ahead of the delivery date in contracts of sale. the developer wants only people that plan to live in the condos versus some speculators that bought in Shangri-la in preconstruction and who have seen their 3 br condos go up in value us $200,000. Over what they paid. 4 bedroom units have double in value from what they paid to over us $1’150,000. in tower “a” and “b”.

Therefore the Tres Mares developer’s prices are what he feels the condos will be worth in 2010.

According to Forbes the developer is worth over us $2 billion dollars so he does not need our progress payments to keep construction going.

In late march 2009 an announcement should be made by the developer of Tres Mares that will turn that development into pure gold. I can not write about it yet.

Grand Venetian tower 1000 next to holiday inn is now finished. The pool and garden areas are fantastic. At night it’s gorgeous. Common areas decorated top notch. tower 2000 started delivery the middle section levels 2-10 February 23, 2009.

Steel and concrete prices went up 100% again in 2007 in Mexico. You guessed it- China.

History of beach front properties in Marina Vallarta.    Bayview Grand

Consumer confidence is the lowest it’s ever been in the USA but it’s still pretty strong for Mexican nationals as their over all economy is still good.  

Certain sectors of the Mexican economy are slowing down but when you are presented with all the facts you get a different picture.

Mexican exporters received USD income and their expenses are in pesos. In round figures the peso has gone from 10.3 to 14.8 to the USD in 5 months so if sales remain the same they actually net an additional 43.6%.

If their USD income falls 44% they should net the same as they did prior to September 2008. 2009 Minimum wage in Mexico is 53.60 pesos per 8 hour work day. In USD that’s about US $3.62 per day.

In year 2008 Mexico saw 600,000 new jobs created. 1 million new jobs a year are needed.

Prior to 2006 Mexican banks could only make mortgage loans to Mexicans for their primary residences. In 2006 the government changed the policy and the banks were given permission to make loans for second homes /vacation homes.

Real estate sales for 2008 were very slow in the US $225,000. To US $500,000. price range. Brisk in the sub US $175,000. range.

Condo Absorption rate: from Mismaloya to Punta Mita we had 7,250 unsold condos in pre-construction, under construction or built at the start of 2007. at the start of 2009 we have only 4000. No beach front land left to build on. 2008 sales way-way off.

My biggest source of new clients come from referrals from existing clients. Keep in mind I’ve been selling real estate in marina Vallarta since 1988!.

Clients who buy our beach front condos in Marina Vallarta mostly have all cashed their chips in or have been financially strong for years.  They do not need to borrow money. They just write checks.

One thing does affect the real estate market in the greater Puerto Vallarta area is clients can not make their minds up as to which new development they want to be in.

 What happened to me this past non season (May-November) was that clients came in to town with check book in hand so to speak. They said we are not here with friends on vacation we are here to buy a beach front condo. What do you suggest we consider.

The Franchised type real estate companies are being hurt by their clients going direct to the developer’s sales offices. Its human nature to think you can get a better deal from the on site sales office. This is not the truth as us outside brokers can give the same discounts as an in house sales representative or Sales Managers can give.

Beings I specialize in marina Vallarta plus Grand Venetian I can give the same discounts the in house sales teams can in Grand Venetian and Tres Mares.

Being in Puerto Vallarta so long I’ve got a huge client base that keep trading up. Once a better mouse trap is built they want to be in that development. i.e. Bayview grand then Porto Fino, then Shangri-la and Now Tres mares. I get the new sale plus sell their old condos.

2 bedroom marina front condos in marinas in California (when you can find them) start at US $900,000. and monthly maintenance fees are at least US $1,300. /month.

Most people from the United States east of California and Texas go to Florida and look at properties from the Miami areas to West Palm Beach and over in Naples (Naples now the richest county in Florida. No longer West Palm).

In these Florida areas new 2 bedroom beach front view condos start at US $980,000. with monthly maintenance fees running at least US $1,400. and mandatory homeowners insurance with hurricane coverage run at least US $12,000. a year. Real estate taxes for non homesteaders US $20,000. A year rising (2% of market value). Currently reports from Florida are that insurance companies are not writing hurricane coverage in Florida @ any cost. Without coverage lenders are calling their loans so you see for sale signs every where. Bank repossessed units cheaper.

 In México we are still blessed with (when compared to USA) inexpensive construction costs and those savings are passed on to the buyers in the form of lower sales prices. 2 br monthly  maintenance fees run US $217. – US $288. see listing sheet for real estate prices. Annual real estate tax US $235. A year for a 2 br beach front condo in Porto Fino. No that’s not a joke.

INTERESTING FACTS: In Mexico only 6% of the homes nation wide are financed with mortgages versus 67% in the USA. Most Mexicans inherit their homes, buy them for cash or build them themselves with cash that they have saved.

AMERICAN TRAVEL TRENDS

eople like myself that have traveled to Europe in the last 5 years are now fully aware of the fact that a certain percentage of the world currently do not like Americans because of the war. It is like they forgot what happened in the 1940’s in Europe. Vacation travelers do not like to travel to countries that the people of that country obviously do not like you, and look at you as if you have leprosy.

The idea of vacationing in Muslims countries is unthinkable now by Americans.

The number of Countries that are American friendly is shrinking as each day goes by.

The friendliest country the Americans can vacation in currently is Mexico. The friendliest city in Mexico is Puerto Vallarta. These facts will greatly contribute to increased tourism in Mexico and increased real estate sales to baby boomers for the next several years. Clients tell me that investing in the stock market now is just too stressful for them and that passbook savings at Banks currently does not provide them with enough interest to get excited about. 

Clients tell me they want to vacation in a resort town they are familiar with, that they perceive to be friendly towards people from the USA, safe as can be expected in today’s world, within driving distance of where ever their home is and it would have to be A warm climate. Bingo! Little ole Puerto Vallarta tops the list of cities to vacation in. In fact Conde Nast Traveler Magazine IN 2002 named Puerto Vallarta as the friendliest International city for American Travellers and the eighth most favourite International Destination in the world. Number 1 was Paris then Sydney, Rome, Florence, Bangkok, London, Venice, Puerto Vallarta, Honk Kong and Vancouver. 

September 4 and 5, 2008 Puerto Vallarta hosted a cruise ship industry seminar for the country of Mexico.

Top executives from all the cruise ship companies were in Vallarta for the two day event. In my opinion this was the day when decisions were made by the cruise ship executives to support the application of Puerto Vallarta wanting to be selected to be a new cruise ship home port. This was huge for Puerto Vallarta.

We get 7-9 cruise ships a week some months. Cruise ship tourists don’t buy real estate but a lot return for vacation. Through the years a lot of clients that have bought real estate from me have said their first visit to Puerto Vallarta was on a cruise ship.

Puerto Vallarta’s newly enlarged cruise ship harbour has 3-985 foot docks which was the last hurdle for Vallarta to be considered for a cruise ship “home port”. Cruise ship people (like myself) look forward to new cruise itineraries. The new improvements cost over US $24 million dollars and the project was finished in May 2007.  For a Mexican to take his family on a cruise he has to go to the USA. The visa problem stops him for doing this. Once Puerto Vallarta is a home port you will see a whole new cruise market open up.

Christmas /new years bring us a lot of wealthy Mexican nationals that prior to September 11 spent holidays in the USA. A lot have now bought Condos at Bayview Grand, Porto Fino and Shangri-la. They will spend their time off in Puerto Vallarta rather than in the USA.  for a Mexican to get a visa for their new young children is a major problem now as they have to wait up to 4 months for an appointment with the American consul. They can not go to USA with their older children only.

More and more people now have the attitude that in their golden years, they are going to live life to its fullest and if the kids get a little less inheritance -so be it! They earned it and they ought to be able to spend it.

Bayview, Is a 477 Beach Front condo pet project of mine. A lot of the 477 buyers are from the United States and Canada. They have indicated they plan to spend the winters in "sunny" Puerto Vallarta and that Puerto Vallarta has the best weather they have ever been in –in the winter. 

Porto Fino Is a beach front project next to Marriott. It consists of 239 condominiums in 2-15 story towers plus 9 beach front homes that sold at US $1 million each. All 9 of the houses sold in 2003 and all the condos sold in 2005. One of the houses was bought for US $950,000.00 before they even started construction. Half with the signed contract and half upon delivery. Well 4 months prior to delivery the owner sold the villa for US $ 2.2 million cash. Developer really mad but you can’t have it both ways. Antonio Banderas and Enrique Iglesias have visited who ever owns the house more than once as they walked around the pool at Porto Fino and went over to the snack bar and bought soft drinks in skinny bathing suits almost causing heart attacks to some older full time lady resident’s.

Shangri-La beach front condominiums between the Marriott and Melia hotels was built by the owner of the Marriott. The project consists of 5-18 level towers of 3 & 4 bedroom plus 2 level very large Penthouses. The type construction costs a lot of money. The 5th tower was delivered august – December 2007.

January, 2007 the TRES MARES (3 oceans) project started construction. It is a development by the developer of Shangri-La. it consists of 576 condos in 4 towers. They will have 14 – US $3.5 Million dollars cruise ship harbour fronting large villas. I submitted the name “Harbour point” to the developer when he was in the process of naming the project. The name Bayview Grand was my suggested name for that project and that developer accepted the name.

TRES MARES will be the who’s who in Mexico’s address. The idea of sitting on the terrace watching  3-985 foot long cruise ships enter the cruise ship harbour early morning, City Lights, sunrises, sun sets is an experience on a special few will experience – Including this old gringo on the 15th level of C building. I like C building best as it has a straight ahead city lights view, cruise ship harbor, sun rise and sierra Madre mountain range view.

No more building skeletons for Vallarta:  in order to obtain a building permit for a condo or hotel project in Puerto Vallarta you have to give the city a completion bond. To get a completion bond at a good rate you have to build according to the international beach front construction codes and not Jalisco state or national codes. International codes require a special type sea wall that is 27 feet deep with all kinds of rebar in it plus it curves out towards the sea. The pilings go down 72 feet at Bayview grand and the re-bar is over 1 inch thick. The pilings are 5-6 feet in diameter. At the new Venetian the pilings go down 109 feet. (33 meters) and are 7 feet in diameter. It takes 22 large concrete trucks full of concrete to fill one hole. Each building has 26 pilings. No completion bond required in the state of Nayarit (Nuevo Vallarta). At Tres Mares the pilings go down 157 feet (48 meters)

n year 2006 and 2007 Mexico enjoyed a budget surplus! 2008 Budget deficit was US $16’838,000!

Individual investors from the USA feel safe with investing in certain select resort cities in Mexico as they no longer fear Mexico and their devaluation of the peso every few years. They realize that the United States will come to the rescue of Mexico in Mexico's time of need. Not because it's the neighborly thing to do but because the United States wants to be able to call in a favor if in the event some crazy nukes the oil fields of the Far East. Mexico's oil fields are close to the Texas border. Pemex, Mexico's oil company is # 4 in the world in oil production.

A pipeline, like the Alaska pipeline, could be constructed underground from Mexico's oil fields to the refineries in Texas. For obvious reasons the United States cannot say this publicly.

Pemex Oil Company announced august 27, 2004 that its proven oil reserves are now known to be at least 81.9 billion barrels. In a humorous move the next day the Mexican government said the claim was false. I’m sure they thought – hell with all that oil the  united states will take the other half of Mexico they did not steal in February 1848 for $ 15 million.

For those of you that forgot your history California, Texas. Arizona and new Mexico use to be Mexico. Mexico surrendered 890,000 square miles to the USA in 1848.

Mexico is now receiving proposed partnership agreements from global oil giants to extract the oil with new deep sea oil extraction technology. Because of the increased income from oil & other sources Mexico has decreased the federal income tax from 34% in 2004 to 28% in 2007. Mexico has a 15% value added tax on everything. Not on residential properties.

March 3, 2007 Pemex announced their first partnership agreement with a Brazilian oil company to deep water drill and manage heavy –crude fields. The president of Mexico said “this opens the possibility of obtaining technological knowledge for drilling and development in deep and ultra- deep waters”. They will drill at depths of 1640 feet (500 meters) in the Gulf of Mexico where they feel 29.5 billion of oil are located.

The oil plot thickens. The president of Mexico in his state of the union address September 2, 2007 said Mexico’s main oil fields could be exhausted within 9 years. At 3 am in the morning of September 11, 2007 the Mexican congress voted in new taxes that will increase the government’s tax income 33%. The tax measures include $2.7 billion that went to Pemex in 2008 so it could start the improvement of its refineries and explore for new oil reserves in the off shore area that Pemex announced existed on august 27, 2004! It appears Mexico is like the USA and that’s it takes a crisis to get what has to be done authorized by congress.

On October 25, 2002 Hurricane Keena’s 70 mph Outer winds hit Puerto Vallarta and heavily damaged all beach front Hotels lobby, restaurants and pool areas. 3,802 hotel rooms closed. Insurance company money has rebuilt the ground levels of those 13 hotels. The construction industry is still experiencing a boom in Puerto Vallarta and Nuevo Vallarta. Atena from USA owns the largest insurance company in Mexico. General electric owns the second largest insurance company in Mexico.

Marina Vallarta

arina Vallarta is talked about in Mexico as a class book example of a planned resort community of which the first hotels and condos were delivered in 1988 / 1989.

It's been my personal pleasure to be a part of that process since 1988. First as sales manager for the developer then on my own since September 1994. From A developers stand point Marina Vallarta was sold out in September 1994. Over 3 billion dollars has been spent in Marina Vallarta so far. 

Interesting Facts

N the summer of January 4, 1999 edition of leisure travel news published two lists by 500 Travel Agency networks. "Best sun destinations in the world" Cancun, Orlando, Phoenix, Puerto Vallarta and then Las Vegas. "Top 10 world destinations" London, Paris, Rome, Frankfurt, Sydney, Hong Kong, Amsterdam, Puerto Vallarta, Madrid and Vancouver. Puerto Vallarta has gone from "A sleepy little fishing village" (Famous quote of film maker John Houston in 1958) to a World-Class tourist resort.

The president of Mexico that took office December 1, 2006 has a master’s degree from Harvard. His wife is a congress woman who actually is the USA equivalent of the speaker of the house. Both are PAN political party. The PRI was voted out a few years ago after 71 year ride.

17 of the 18 Mexicans are now controlled by global banking companies. Banco Bilbao Viscaya Argentaria (Spain) bought Mexico's # 1 Bank-Bancomer. Citibank bought Banamex, the countries # 2 bank. Bank of America the # 3 Bank Serfin. HSBC, the # 4 bank. In November 2006 wall-mart was granted a bank charter in Mexico. 

Mexico now has 78 billion dollars in reserves. When the peso devaluation occurred on December 19, 1994 the dollar reserves were only US $3 billion dollars plus a dangerous high percentage of the Government debt was very short term The IMF was involved in the restructuring of Mexico’s debt as they needed a class book example of what a country could do if they followed the advice of the IMF. Mexico’s debt is now all long term. In early 2007 Mexico prepaid over $10 billion of their long term debt.

Farmers from the USA now farming in Mexico. I normally stay away from commenting on the illegal immigration issue but this new trend is very interesting to me.

2 years ago a farmer named Larry Cox who farms in the fertile Colorado River valley in Mexico had to leave 750,000. pounds of tomatoes unpicked in Brawley California due to him not being able to find enough workers at harvest time. Deportation sweeps have CUT one third of the 230,000. Seasonal labours. Farmers say U.S. workers do not want strenuous farm jobs.

USA growers are now farming over 50,000 acres in Mexico and employing over 11,000 Mexicans. By doing this the farmers can cut their labor costs 90% from us $10.00 per hour to us $10.00 per day. they just rent the land. (2007 Statistics)

Environmental regulations in states like California that drive prices way up are essentially putting the u.s. farmers out of business so they are going west – young man – going west.

Starting in 2008 the Mexican government and private enterprises will spend us $25 billion dollars over 5 years on infrastructure improvements creating hundreds of thousands of jobs. Highways, airports, harbours plus toll roads that will be built and operated by private companies on a concession basis.

Wall-mart of Mexico opened 205 new stores and 53 bank branches in 2008. they hired 21,000 new employees in 2008. in 2007 they hired 15,728 new employees. In 2009 they plan to open 252 new stores and hire over 26,000 new employees.

Wall-mart of Mexico now offering a revolving credit card.

Employers’ will deposit into their employee’s Wall-mart account thus keeping millions of workers out of banks cashing their checks.

New Mexican demographics. In 1960 the average Mexican Family had 6.8 children. In 2008 that dropped to only 2.1 10% of the people in the USA told census workers they were of Mexican ancestry. Population growth had dropped to 0.8 percent in 2008 versus 3.35% in 1960. This has created less stress on the families and a smaller percentage of Mexicans are going to the USA looking for work.

February 2009 Nissan said it will shift construction of some small cars to Mexico. For years they have produced Sentra Sedan and Tiida compact cars in Mexico. This was due to the Yen getting 23% stronger against the US dollar while the peso has gone from 10.3 September 2008 to 14.77 as of February 19, 2009. (43.40%)

In late June 2007 a man was interviewed by Lou Dobbs on CNN. He said that the average age of factory workers in the USA is now over 52 years old and that there are very few young factory workers in the pipeline so to speak.. He feels the USA will really have a problem in 8 years or sooner as they will not have people willing to work on assembly lines no mater what they are paid. Put another way factories will experience the same problem that fruit and vegetables growers have experienced for years now, they will only add fuel to the United States trade deficit with China and other countries including Mexico. Currently manufacturing lowest level since 1943!
 

Corporate America's continued move to Mexico

008 domestic sales in Mexico down only 2%. Exports down 9%.

The Mexican auto industry association says auto manufactures in the United States have been struggling in the face of foreign competition and most all of them have announced plan’s to beef up their plants south of the border. Ford is spending us $3.5 billion in Mexico plant additions. June 5, 2008 newspaper reports ford Mexico’s union leader says Mexico needs to be more competitive with china so he has agreed for his new hires to accept US $2.25 per hour rather than the current workers US $4.50 per hour. The two-tier hiring schemes and salary cuts have brought Mexico to near Chinese wage levels. United States auto workers make an average of us $28.40 per hour. a lot of Mexican auto workers have agreed to US $1.50 per hour with a lot less of the related pension and health care costs.

In the summer of 1998 the united auto workers in the United States finally finished digging their own grave when they went on strike. All the United States auto and truck makers’ boardrooms were busy finalizing their new aggressive Mexico plant additions whereby they will slowly slide out of the United States. Now days stock holders demand management to make decisions solely on bottom line considerations. Those decisions are no brains. They cut total labor costs up to 90%. Improve productivity per man hour and they have zero union problems in Mexico. As you know China is where everything is made now. Wall-mart recently admitted that of the 6,000 suppliers they have 80% are from china. China produces items 40% below Japan, South Korea, Taiwan and Mexico. The United States and Mexico do not know how to deal with the problem of the Yuan being so low and China will not let the Yuan currency float.  Recently they said if we can’t beat them we will join them and currently many china /USA auto maker auto production plants under construction in China.

Toyota now number 1. Its official Toyota overtook GM as the world’s largest auto maker. GM’s 77 year reign is over. 2008 sales GM 8.35 million vehicles sold to Toyota’s 8.92 million. In early 1988 I attended a VIP reception in Georgetown, Kentucky celebrating the finishing of the US $3 billion dollar auto production plant. At the time it was the highest Tec robotics plant in the world.

It was really something to see. We toured the plant and instead of workers everywhere there were robotics, computers and engineers in white coats. At the reception I was introduced to Dr. Toyoda who later backed out of the room while looking at me and bowing. Why was I invited – not because of my knowledge of the auto industry but I was a celebrity to the city fathers of Georgetown, Ky. Because I did site selection for McDonald’s and pizza hut and I brought them to town. You’re not on the map so to speak until you have a McDonalds. Of the 13 locations I found in small Ky. towns for McDonalds instead of a real estate commission I’d buy from them the land over and above 40,000. sq. ft. for us $1,000. I’d always contract for 60,000 sq. ft. and I had a standing deal with pizza hut that I could build to suit for them next to any McDonalds and plug in the land cost at US $100,000. The price McDonalds was paying for the 60,000 sq. ft. lots were only us $35-45,000. therefore I was making us $100,000. on $40,000. sales. That was great until I sold the 7 pizza hut properties. Then the IRS had a great day. I also did site selection for 6 taco tico’s one KFC, sonic, KFC and Burger King.

6 long John silvers. In small towns in Georgia. I was a strip shopping center developer, owned 6 big Daddy Liquor stores in Kentucky, 4 night clubs, an apartment building, office BUILDING plus a lot of other things. Being a workaholic cost me 2 wives in the USA. 100 hour work week’s wives do not like.

Bombardier the word’s No. 3 aircraft maker out of Canada announced plan’s to manufacture airplanes in Mexico early as 2010.

In 2006 bombardier built a parts factory in Queretaro (about 200 miles north of Mexico City) it employees 1,800 workers.

May 29 and 30th 2002 was a very special time for Marina Vallarta. The Marriott hosted a trade convention for all Asian countries, APEC (Asian Pacific Economy Co-operation). A lot of the attendee’s were VIP’s including Mexico’s president Vicente Fox, China, Japan, Korea, Singapore, Taiwan and Little ole Papua New Guinea to name a few. 21 countries total.

Instead of having the convention in Mexico City, Guadalajara or Monterrey, the government chooses Marina Vallarta in Puerto Vallarta as the number 1 city in Mexico to show off to businessmen from the Asian Countries. For the same reason, a few years ago the Marriott hosted the GATT Convention (g8). 1200 people had a sit down dinner at one time. (The largest in Puerto Vallarta history).

In October 2002 the former Director of the CIA said something very mater-a-factely on Lou Dobbs money line. He said in the event the Middle East oil was cut off that the USA could operate out of the strategic oil reserves for up to one year now with current inventories and that the inventories could be doubled whereby the USA could last for up to 2 years on their own oil supply plus the strategic oil reserves. He went on to add that during the 2 years a pipe line could be constructed from Mexico’s oil fields to the refineries in Texas. 

It would take billions of dollars to upgrade the Mexican refineries. The president of Mexico is currently trying to get the Mexican congress to authorize Global Oil Giants Investing in refineries. Mexico would still own the oil that comes out of the ground but it has to be refined before it can be sold. Newspapers in Mexico indicate this should HAPPEN IN late 2009.

20 years first mortgage money has become a reality in Mexico for USA/Canadian’s who are residents of USA/Canada and who want to buy a condo /villa in Mexico. Bank of America /Citybank /Scotiaank of Canada and HSBC now own the 4 top banks in Mexico. Be aware of so called mortgage brokers from the USA that they say they make loans in Mexico. Read fine print about interest rate increases and how they will release the mortgage once you pay it off. In my opinion the Laredo national bank out of Texas (owned by BBVA Bancomer) has a good mortgage program. toll free from Mexico 001 800 823 1320 from USA 1 888 723 1151. Aggressive lender.

As of now 99% of condo /villas sales are cash sales. Mexican Nationals are now able to obtain 20 years fixed rate financing for new town homes and homes. The interest rate is 13% - 16.5%. Car loans are at 30% per year interest. The same mentality as the USA customers only want to know how much down and how much a month.

A senator from Cabo san Lucas has drafted a constitutional amendment that would do away with us gringos having to own real estate within 50 kilometres of a coast or border. Every major law firm in Mexico City submitted to the government their proposed text for the constitutional amendment. When and if this happens the government feels foreign investment in Mexico will triple. The lady senator from this area (lives in Puerto Vallarta) was asked to co-sponsor the bill. The government is for it. The banks are for it as is big business.

In 2008 foreign tourist spent $13.3 billion dollars in Mexico. An increase of 3.4%. 22.6 million Foreign tourist in 2008 and increase of 6%. Mexico receives $9.35 billion in new tourism investments in 2008. Up from $8.45 billion in 2007.

Home depot opened in November 8, 2007. It’s out across from the airport. It fronts the highway and the road to Ixtapa next to Guadalajara university Puerto Vallarta campus.

I’m asked a lot – when you live in Puerto Vallarta where do you go on vacation. Our biggest vacation of 2008 was 9 nights at the Palazzo Hotel in Vegas. Then 2 nights Shangri-la hotel in Singapore. Queen Victoria 14 days cruise from Singapore to Dubai. This cruise ship is even better than Queen Mary II. Out of the 2700 passengers on board over half were on the maiden world cruise that took 72 days. Our leg of the cruise was 14 days. Ports of call: Kuala Lumper, Penang, Chennai India (7.5 million people) Mumbai (Bombay) India (18 million people). Dubai at the Jumeraih hotel for one day and night.

We then flew to Cairo where we spent 11 nights that included a 4 day cruise down the Nile. The 11 day cruise was thru Tauck and was called the “Jewels along the Nile” tour. Oberoi Mena house hotel, four seasons hotel and the Steinberg Nile palace in luxor. The Nile river boat had 35 rooms on it and was owned by Abercrombie and Fitch. Boat was fantastic.

All 11 days we had an Egyptologist explaining everything to us.

Egypt: the people were very friendly to us Americans. In fact about 20 different children aged 15-16 said not only “welcome to our country” they said: thank you.

It appears they are taught in school what the USA sends in foreign aid each year. Only one country gets more aid from the USA and that’s Israel.

Our tour director said: nothing to worry about in reference to security. He then introduced us to the 2 armed security guards that were with us on 100% of the tours.

No mention of the Iraq war or George Bush that we experienced a few years ago in Europe. No real bad looks. Only smiles in Egypt.

CRUISE SHIP HARBOR EXPANSION

US $24 million dollars has been spent on improvements that include 2 more piers that accommodate the new big cruise ships which are 984 feet long. (They have to be under 1,000. feet to get thru the Panama Canal)

Puerto Vallarta can now be a designated “Home Port” for cruise ships. When you are a home per cruises could start and finish in Puerto Vallarta and most importantly 3 day pre and post cruise stays will generate more marina Vallarta real estate sales and rentals for sure.

Essentially this is huge for Puerto Vallarta.

7-21 day cruises out of Puerto Vallarta would go south to:

Acapulco, Mexico. Punta Arenas, Costa Rica. Transit Panama Canal (Maybe Cartagena, Columbia). Manta, Ecuador (Quito). Callao, Peru (Lima). Arica, Chile. La Serrana, Chile (Coquimbo). Santiago, Chile (Valparaiso). Puerto Montt, Argentina. Punta Arenas, Argentina. Ushuaia, Argentina (Cape Horn). Stanley, Falkland Islands. Puerto Madryn, Argentina. Montevideo, Uruguay. Buenos Aires Argentina.

Currently princess and Crystal Cruises lines go to these ports from either Fort Lauderdale or Buenos Aires.

If a cruise ship company used Puerto Vallarta, Mexico as a home port they would accept passengers who do not have visas as they would not go into USA waters. Visa’s to the USA real big problem since September 11, 2001 for all non Americans.

The 985 foot long cruise ships carry 2,600 - 3,300 passengers and crews of over 1750. They cost US $500. Million to US $600 million. (2002 published figure)

Today cruise ships are always 100% full as if they are not full they email past cruise ship passengers who live in the zip code(s) closest to the port the cruise ship departs from. In Fort Lauderdale, Florida thousands of widow ladies bought condos close to the cruise ship harbor and are packed and ready to take a cabin of a passenger who had to cancel at the last minute. They get great prices and they do not care if they go to the same ports of call. Being on the cruise ship and around people is what IT’S all about to the ladies in their late 70’s and 80’s. Conversations at the table breakfast, lunch and dinner is what it’s all about to these ladies.

The best example of condos at the entrance to a cruise ship home port is in Fort Lauderdale, Florida where about 3,000 condos are located at the entrance to port everglades.

I've been encouraged by some of my newsletter reader's that come to Puerto Vallarta every year that I should write more interesting human interest events I have come by

While traveling. My china reports are especially interesting to a lot of my annual reader's.

2007 China: China /Auto industry: Wall street journal articles in December report: GM expects its auto-parts purchasers to rise 25% per year thru 2010. Currently GM employees 200 people in Shanghai that work with Chinese suppliers. GM admits buying 20 million parts a month from China now. Electronics parts, aluminum wheels, interior parts, Chromed plastic and plans to add to that list in 2008 t add to that list in 2008 parts higher up the value – added chain, such as air – conditioning and brake parts.

Wuhu China 25,000 workers turning out cherry autos. In July  2007 the government owned company signed a land mark deal with Chrysler to make the auto makers Dodge brand. The cars will be sold in Latin America and other developing markets first and in the USA and Western Europe by 2009. Assembly lines run 16 hours a day and the state – of the  – art equipment in the plant comes from Germany and Italy. New assembly lines under construction that will boost its capacity  to 700,000 autos in 2008.

Junior engineers make US $6,000. a year and assembly – line workers earn US $1.00 pr hour.

40% of all the worlds sport shoes are made in Dongguan, china. million's work 12 hours per day, 7 days a week, 365 days a year. Some literally work themselves to death.

 In this area of china they make 300 million sweaters' a year. 200 million of which are shipped to the USA.

 Labor shortages are beginning to appear which is pushing up labor costs. Instead of making US $ 900. a year they now have a chance to make US $ 1,000. a year! Human right s violations-what's that?

 16 of the world’s most polluted cities are now in china.

 The government of china announced in 2004 that by year 2009 English will be a required subject in 100% of china's school systems.

 In 2005 Chinese bought 10 million battery powered bicycles.

 In 2006 they bought 25 million from 1,000. new companies that got on the band wagon.

 Years ago I asked Hank Carlini a friend and client what lee Iacocca was up to. (Hank was lee's right hand man). He said he had developed a battery powered bicycle and was ready to market it. It’s amazing how a product is developed in the USA with the inventor spending a lot of money on research and development for years. He then starts production and within damn near hours china is producing the same identical product at 10% of what it costs to make the product in the USA.

In 2007 they sold over 40 million battery powered bikes in china.

 Keep in mind in China when you want to marry a girl you have to give her before you marry- a watch, a radio and a bicycle.