SSI News

MONTERREY, MEXICO— Authorities struggled Monday to identify the 49 people found mutilated and scattered in a pool of blood in a region near the U.S .border where Mexico's two dominant drug cartels are trying to outdo each other in bloodshed while warring over smuggling routes.

Tags: US Army, Veracruz, Mexico Cartel Drugs, mexico

GUADALAJARA, Mexico — The historic seizure of 15 tons of pure methamphetamine in western Mexico, equal to half of all meth seizures worldwide in 2009, feeds growing speculation that the country could become a world platform for meth production, not just a supplier to the United States.

Tags: World News, security, news, military, Mexico Methamphetamine, Mexico Meth Bust Jalisco, Mexico Meth Bust, Mexico Meth, Mexico Jalisco, Mexico Drugs, Mexico Drug Exports, Mexico Drug, Mexico Cartel Drugs, mexico, law enforcement, Jalisco, HSN, homeland security network, homeland security, first responders, first responder

A federal grand jury in Laredo, TX, convicted a Zetas-linked “hitman” on a raft of conspiracy, racketeering and weapons charges on Jan. 25, after hearing testimony that outlined activities of the gang’s vicious assassination cells on both sides of the southern border.

Tags: Zetas, tx, trial, terrorism, terror, Suspect, state and local, security, risk, police, news, national security, Mexico Cartel Drugs, mexico, law enforcement, laredo, HSN, homeland security network, homeland security, first responders, first responder, federal, border security, attack, assasination, America, agencies

Amid much fanfare in 2006, then President George W. Bush deployed several thousand National Guard troops to our Mexican border in order to bring “operational control” to illegal immigration, drug smuggling, and international terrorists. 

Tags: Suspect, SSI, news, national guard, military, Mexico Cartel Drugs, mexico, law enforcement, HSN, homeland security, first responders, Border wars, military, homeland security, first responder, Drug, Border and Customs, 2012

MEXICO CITY (AP) - More than 47,000 people have been killed in drug violence in the five years since President Felipe Calderon launched a military crackdown against drug cartels, federal prosecutors said Wednesday.

Tags: drug cartels, drug war, violence, Mexico drug cartels, mexico

Yields on Senda's dollar bonds due 2015 climbed 165 basis points, or 1.65 percentage points, in the past three months to 11.84 percent yesterday, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. Yields on similarly rated Latin American corporate debt fell 297 basis points over that time, according to Credit Suisse Group AG.

Drug-related violence that has killed 47,000 people since President Felipe Calderon took office in 2006 is making land travel between cities more dangerous, causing Senda to say in a Nov. 8 report that a "weak security perception" hurt sales. Authorities found mass graves last year in the northern town of San Fernando containing the corpses of about 200 people who were abducted from buses.

"Security has been a problem for them," Alvaro Gonzalez, a credit analyst at Miller Tabak Roberts, said in a telephone interview from New York. Gonzalez said the violence concerns offset Senda's successes in spreading out debt maturities, deterring some investors from buying the bonds.

Senda's debt, which is rated B, or five steps below investment grade by Standard & Poor's, yields 974 basis points more than similar-maturity Mexican government dollar bonds. That yield gap is up from 759 three months earlier. The price on the bonds due 2015 has sunk five cents on the dollar since Oct. 5 to 96, according to Trace.

Growth Outlook

Growth in Latin America's second-biggest economy will slow to 3.2 percent this year from 3.8 percent in 2011, according to the median of 12 estimates in a Bloomberg survey. Drug-related violence shaves 1.2 percentage points off GDP annually, former Finance Minister Ernesto Cordero said Sept. 1, 2010.

The violence has hit other sectors including retail and real estate. Organizacion Soriana SAB, Mexico's second-largest grocery store chain, said on a July 28 conference call that crime had affected its earnings. Homebuilder Sare Holding SAB, based in Mexico City, said in its Oct. 27 third-quarter report that falling home sales reflected the "perception of insecurity."

Senda posted a 314.5 million peso loss in the July-to- September period, up from a 6.1 million peso loss in the same period a year earlier, as its passenger bus fleet had a 9.4 percent drop in distance traveled to 44.9 million kilometers (27.9 million miles).

Mass Grave

The discovery of the mass graves in San Fernando --killings the Attorney General's office attributed to the Zetas, a cartel that operates along the Texas border -- hurt Senda's sales even though the company's buses weren't targeted, said Horacio Alcocer, an investor relations officer in Monterrey, Mexico.

"We saw that people started to change their perception of travel," Alcocer said in a telephone interview yesterday. He said Senda's buses have been robbed, including an incident in June when two passengers stopped a bus en route from Monterrey to the Texas border and took the belongings of about 30 passengers.

Senda Chief Executive Officer David Rodriguez, 42, whose grandfather founded the company about 80 years ago, is cutting back intercity routes, trimming staff and stepping up efforts to win contracts to transport workers and school children within city limits.

Travel Down

Intercity travel, "where Grupo Senda is focused, is down," said Raymond Zucaro, who helps manage and advise on about $230 million of emerging-market corporate debt at SW Asset Management LLC in Newport Beach, California. "These personnel transports help offset that. Is it the panacea? Does it solve their problems? No."

Carlos Legaspy, who manages about $300 million at Precise Securities, said he bought Senda bonds last month and is seeking more. Legaspy said security concerns are less important than the company's "comfortable" debt levels and maturities.

Senda's net debt was little changed at 3.6 times earnings before interest, taxes, depreciation and amortization in the third quarter. It was 6.3 times in the same period of 2009.

The company has held talks with banks about refinancing its id="mce_marker"50 million in dollar bonds due in 2015, according to Alcocer. It's also considering raising money in an initial public offering as soon as this year, he said.

Drug violence showed signs of slowing in 2011, which Legaspy said is making him more bullish on the bonds. Killings related to drug violence in Mexico fell 3.1 percent to 12,284 in 2011, according to data compiled by Mexico City-based newspaper Milenio.

'Somewhat Optimistic'

"I'm somewhat optimistic," Legaspy, who's from the border town of Ciudad Juarez, said in a phone interview from San Diego. "The security problems had a high-water mark in 2010. They're still bad, but trending down. If that continues, the credit metrics will only get better, because in spite of that, they're still OK."

The extra yield investors demand to own Mexican government dollar bonds instead of U.S. Treasuries fell three basis points to 213 at 5:03 p.m. in Mexico City, according to JPMorgan Chase & Co.'s EMBI Global index.

The peso fell 0.5 percent to 13.7661 per U.S. dollar.

Yields on interbank rate futures contracts due in September 2012, known as TIIE, fell two basis points yesterday to 5.02 percent yesterday.

Credit-Default Swaps

The cost to protect Mexican debt against non-payment for five years rose four basis points to 153, according to data provider CMA, which is owned by CME Group Inc. and compiles prices quoted by dealers in the privately negotiated market. Credit-default swaps pay the buyer face value in exchange for the underlying securities or cash equivalent if the issuer fails to comply with debt agreements.

Soriana, the supermarket chain, has ramped up parking lot security and video surveillance at its 558 supermarkets in response to security concerns, Rodrigo Benet, chief of strategic planning, said by telephone yesterday from Monterrey.

Sare, the homebuilder, said it's betting on increased police and army presence to secure Acapulco, where sales have suffered, Gabriel Terrazas, the finance committee chairman, said yesterday in a phone interview from Mexico City.

"People's perceptions, with everything that comes out in the news, lead to their putting off the decision to buy" homes, Terrazas said. "The perception is much worse than the reality."

The push by Senda's Rodriguez away from intercity travel helped spur a 17.5 percent increase in revenue from worker and student transportation in the third quarter. The company still only received 21 percent of revenue from student and worker transport.

"We're still far away from saying that" the strategy change "is going to compensate" for the drop in its core business, said Miller Tabak Roberts' Gonzalez.

Tags: mexico, Mexico drug cartels, President Felipe Calderon, Zetas

While in some cases there has been a lull in the violence, such as in Ciudad Mier, a small border town that was largely abandoned because of drug cartel violence and is now recovering from the destruction it had suffered, the carnage still continues.

For example, the entire police force of the city of Veracruz was recently fired because of infiltration by the Zetas drug gang. Also, reports of discoveries of mass graves still come in on a regular basis. Fortunately, spillover violence into the United States has largely not occurred at the level many have feared.

Some recent news is disconcerting, however. According to an article by Michael Weissenstein from the Associated Press, It appears that Mexico’s drug cartels have been building their own sophisticated communications infrastructure, to aid with both command-and-control operations and early warnings about police or military interventions.

This gives the cartels a better communications base than simply relying on cellular phones or other social networking technologies. As the Weissenstein article states:

"The network allowed Zetas operatives to conduct encrypted conversations without depending on the official cellphone network, which is relatively easy for authorities to tap into, and in many cases does not reach deep into the Mexican countryside. “They’re doing what any sensible military unit would do,” said Robert Killebrew, a retired U.S. Army colonel who has studied the Mexican drug cartels for the Center for a New American Security, a Washington think tank. “They’re branching out into as many forms of communications as possible.”

Such increased sophistication perhaps should come as no surprise, particularly in the case of the Zetas cartel, whose founders were members of the Mexican military and its elite special forces. But it does increase the challenges faced by the Mexican government in its struggle with the cartels. Further, there are reports about Mexican ranches being purchased or seized by cartel members near the US border (note – I am referring to seizure of ranches in Mexico, not to the largely unfounded rumors of such activity in the US) and such ranches can provide an obvious land network for advanced communications equipment.

The drug war in Mexico is far from over and the cartels are still spending resources to increase their footprint, particularly in Northern Mexico. The United States and Mexico will be conducting Presidential elections in 2012 and this issue is one that the leadership of both nations will need to face in the coming years.

Tags: Center for a New American Security, Zetas, mexico, drug war, drug cartels, Mexico drug cartels, border conflict, border security

Congressman Michael McCaul (R-TX) announced recently that on his recent visit to Karachi, Pakistani officials made aware of a potential threat to our national security. The officials warned that potential operatives from Pakistan, and Iran, possibly members of al-Qaeda, the Taliban or the Haqqani network could easily obtain visas which would allow them to enter Mexico from Mexican diplomatic settlements in Pakistan, making Mexico a perfect way station en-route to the US.

Tags: border security, mexico, terrorism

Investigators are trying to determine if 12 charred bodies, some handcuffed and wearing bulletproof vests that were recently found in the bed of a burning pick-up truck in the town of Culiacan, the capital of the Pacific coast state of Sinaloa, are part of a group of nine people, including three local police officers, that were kidnapped in the town of Angostura. Tags: police, drug cartels, mexico