Another Fobaproa?

Not in the US, but in Mexico. Arguing that the $47 billion from the IMF won't protect Mexico any more than the $20 billion loan in 1982 under López Portillo, or the 30 billion that Salinas finagled out of the tesebonos, Rogelio Ramírez de la O says it is likely. 

[Obama said] that even with the US economy in recovery, the "voracious" appetite of the consumer in that country will not return, which fed the years of [international] growth. Thus, "the United States cannot be the only motor of the world."

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For Mexico and the Mexican businesses that for decades based their growth on the American market, this is the greatest problem in 30 years. From there, many won't be able to pay the enormous debts they incurred, whether they are producers of cement, housing, real estate, or retail commerce. 

The world recovery is still very far off. And even if it weren't, the new international cycle will be one of smaller volume of sales, less buying power in the markets, and less bank credit. High unemployment and negative business expectations will translate into less investment. And as we haven't seen in decades, the greatest risk will be in the social situation. 

From there the economic fundamentals won't allow a strong peso as a natural result of market forces. On the contrary, the peso will have to weaken and more so when foreign investors take into account the depth of the security deterioration. 

That's why utilizing a gigantic public debt from the IMF of $47 billion and another the Federal Reserve Bank of $30 billion more to sustain the peso will be a grave error. 

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Mexico must not only rediscover a source of internal demand that has been left unattended for decades, but it won't be able to as long as it worries about stabilizing the exchange rate and not foreign debt. 

The only reassuring piece of information is that Ramírez is consistently among the most pessimistic Mexican analysts, and people much smarter than I often get the economic forecast very wrong.