The best sign of Core-ness: lotsa new mortgages!
■"Mexico's Working Poor Become Homeowners: Mortgages From a Government Program," by Elisabeth Malkin, New York Times, 17 December 2004, p. W1.
Give it up to Vincente Fox. He promised to double the number of mortgages granted each year in Mexico by the end of his administration, and he's on track. A Credit Suisse First Boston construction analyst said, "I have never seen a housing plan such as the one in Mexico. It's a unique model that has been extremely successful." So now we're talking roughly 750,000 new mortgages each year in Mexico, instead of the usual 350,000.
To me there is nothing better than home mortgages to signal membership in the Core, because they require both solid property rights and a reasonably sophisticated financial system to pull off. The key? The government housing agency, Infonavit and private lenders have managed to sell roughly $400 million in mortgage-backed securities, or collections of individual loans packaged up into a long-term bond. This is the basis of the sophisticated and very fluid mortgage market that the U.S. has long enjoyed, but such secondary market instruments only came to Mexico in 2003. And that was only 8 years after the peso collapsed.
See, the Core has an A-to-Z system for dealing with economically bankrupt states. Now we just need one for politically-bankrupt states in the Gap.
Meanwhile, Mexico's mortgaging "are laying the groundwork for a new middle class," says one homebuilding company CEO.
Good stuff!