Wal-Mart Below the Border Goes South

Equations from the housing fallout in the States continue to add up to bad numbers. Take the following, for instance:

(Subprime mortgages go bust) + (New home construction slows) + (1 in four housing construction workers is Hispanic) = (Money transfers home to Mexico drop)

And in turn, Wal-Mart takes a  hit, on both sides of the border.

Interestingly, to accommodate exactly such a population, Wal-Mart had setup its own wire transfer service. Only today, with less cash being sent home from workers in the states, their Mexican retail outlets are suffering also. WalMax, with $18 billion in annual sales, makes up a quarter of the company's international sales.

It's another case of shoddy loans in the States rippling throughout the global economy. From the Journal:

The money-transfer slowdown is but one of several factors hampering the Mexican economy. Most importantly, U.S. demand for goods manufactured in Mexico -- cars, auto parts and consumer electronics, among others -- has eased. "Definitely, the slowdown in the U.S. economy in the first quarter triggered a slowdown in Mexican growth," said Rafael Amiel, a managing director in Philadelphia for Global Insight.