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In short:Financial Resolution and Deposit Insurance (FRDI) Bill, 2017 is similar to the Insolvency and Bankruptcy Code, 2016. FRDI deals only with the companies that are in the financial sector entities such as banks and insurance companies etc. The Insolvency Code Act deals with companies in all other sectors (Non-financial institutions). Purpose of the Bill is to create a resolution regime for financial institutions when they face crisis without creating financial burden for the tax payers.Preamble of the BillA BILL to provide for the resolution of certain categories of financial service providers in distress; the deposit insurance to consumers of certain categories of financial services; designation of systemically important financial institutions; and establishment of a Resolution Corporation for protection of consumers of specified service providers and of public funds for ensuring the stability and resilience of the financial system and for matters connected therewith or incidental thereto.IntroductionIn Budget Speech 2016-17, the Finance Minister had announced:“A systemic vacuum exists with regard to bankruptcy situations in financial firms. A comprehensive Code on Resolution of Financial Firms will be introduced as a Bill in the Parliament during 2016-17. This Code will provide a specialized resolution mechanism to deal with bankruptcy situations in banks, insurance companies and financial sector entities. This Code, together with the Insolvency and Bankruptcy Code 2015, when enacted, will provide a comprehensive resolution mechanism for our economy.”The Bill was referred to a Joint Committee of Parliament (Chair: Mr. Bhupender Yadav) on August 10, 2017.The committee consists of members from various regulators like RBI, SEBI, IRDA, PFRDA to submit a Bill on resolution of financial firms. The Committee submitted a draft Bill named as “The Financial Resolution and Deposit Insurance (FRDI) Bill”.Coverage:The Bill will apply toa.Banksb. Insurance Companiesc. Stock Exchangesd. Depositoriese. Payment systemsf. Non-banking financial companies and their parent companies.The central government may notify any other entities or funds to be covered under the Bill.Key Objectives and Features of the Bill The Bill establishes a ‘Resolution Corporation’ to monitor financial firms, anticipate risk of failure, take corrective action, and resolve them in case of such failure. The Corporate will also provide deposit insurance upto a certain limit, in case of bank failure.The ‘Resolution Corporation’ or the appropriate financial sector regulator may classify financial firms under Five Categories, based on their risk of failure. These categories in the order of increasing risk are:i) Lowii) Moderateiii) Materialiv) Imminent andv) CriticalThe Resolution Corporation will take over the management of a financial firm once it is classified as ‘Critical’. It will resolve the firm within one year (may be extended by another year).Resolution may be undertaken using methods including:i) Merger or Acquisitionii) Transferring the Assets, Liabilities and Management to a temporary firm, oriii) LiquidationIf resolution is not completed with a maximum period of two years, the firm will be liquidated. The Bill also specifies the order of distributing liquidation proceeds.Important Provisionsl Systemically important financial institutions (SIFIs): The central government may designate a financial firm as a SIFI. This would include financial firms whose failures may have a significant impact on the stability of the financial system.l Offences: The Bill specifies penalties for certain offences committed by members of a financial firm. These offences include concealment of property and destruction or falsification of evidence. Penalties will vary based on the nature of the offence, with the maximum penalty being imprisonment for five years, along with a fine.l Funds: The Corporation will constitute three Funds: (i) Corporation Insurance Fund for deposit insurance, (ii) Corporation Resolution Fund for resolution expenses, and (iii) Corporation General Fund for all other functions.l Bar on jurisdiction: The Bill prohibits any court or tribunal from entertaining matters related to the decisions of the Resolution Corporation or regulators, unless specified in the Bill.Details of Risk based ClassificationThe Board in consultation with the Appropriate Regulator has been empowered to classify the covered service provider into five categories of risk to viability viz., low, moderate, material, imminent and critical. Such classification shall be made after taking into consideration the adequacy of capital, assets and liability; asset quality; capability of management; earnings sufficiency; leverage ratio; liquidity of the covered service provider; sensitivity of the covered service provider to adverse market conditions; compliance with applicable laws; risk of failure of a holding company of a covered service provider or a connected body corporate in India or abroad.The five stages of risk to viability framework:l Low risk to viability - The probability of failure of a covered service provider is substantially below the acceptable probability of failure.l Moderate risk to viability - The probability of failure of a covered service provider is marginally below or equal to acceptable probability of failure.l Low and moderate risk to viability - Resolution Corporation shall not have power to investigate or enter the premises and call for information/ documents unless the covered service provider has been classified as imminent or critical. However, SIFIs are required to submit the ‘resolution plan’ and ‘restoration plan’ irrespective of the risk of viability. Also, such companies can be jointly inspected by the Resolution Corporation and the Appropriate Authority.l Material risk to viability - The probability of failure of a covered service provider is marginally above acceptable probability of failure.If a covered service provider has been classified as ‘material risk to viability’, such entity shall submit a ‘resolution plan’ and ‘restoration plan’ to Resolution Corporation and Appropriate Authority, respectively, within thirty days of such classification. If the covered service provider has been classified as ‘material risk to viability’ by the Appropriate Regulator, and if theBoard has difference in the opinion, then the Board shall record its reason in writing and convey the same to the Appropriate Regulator. Also, the Board may conduct independent inspection, if it continues to hold a different view.l Imminent risk to viability - The probability of failure of a covered service provider is substantially above the acceptable probability of failure.The Resolution Corporation has been vested with the power to classify in the category of ‘imminent’ risk to ability, if the covered service provider fails to submit a Resolution Plan to the Corporation after being ordered to so or it is determined that there has been fraud in the business of the covered service provider. The Appropriate Authority as well as the Resolution Corporation has power to classify the covered service provider into this category; however, in case of central counterparties, only an Appropriate Authority has been authorized to classify into fourth stage of categories.l Critical risk to viability - The probability of failure of a covered service provider is substantially above the acceptable probability of failure. On being classified as ‘critical’ risk to viability, the procedure for resolution shall commence and the Corporation shall be deemed to be a receiver of such covered service provider.Monitoring and Resolution of Financial FirmsThe Corporation and regulators will monitor financial firms based on their risk of failure. As this risk increases above acceptable levels (under ‘material’ or ‘imminent’ categories), the Corporation or the regulator may direct the firm to take certain actions to mitigate risk of failure. These include:(i) Preventing the firm from accepting deposits,(ii) Prohibiting it from acquiring other businesses, or(iii) Increasing its capital.Further, firms in the ‘material’ and ‘imminent’ categories will formulate resolution and restoration plans. The Corporation may supersede the board of a firm, if it is classified under the ‘imminent’ or ‘critical’ categories, for a maximum period two years.Liquidation and Distribution of AssetsThe Corporation will require the approval of the National Company Law Tribunal (NCLT) to liquidate the assets of a service provider. Proceeds from the sale of assets will be distributed in the following priority order.Bail-inFinancial firms include banks, non-banking financial companies, insurance companies, pensions funds, stock exchanges, and depositories. These firms accept deposits from consumers, invest these funds, and provide loans. Often these firms borrow from each other. Failure of a firm may result in adverse consequences for other financial firms, and could trigger off system-wide financial instability.High stake in distribution of Financial Assets in India is Banks i.e., 63% and their portfolio of deposits as on 31st March, 2016 is as follows:In India out of the term deposits a/cs, 67% of the total Term Deposit A/cs are of less than Rs.1 lakh, who holds only 8.6% of the Term Deposit in terms of value. Thus, even if any banks every hypothetically fail, then it would not affect the small depositors at all, as it covered through DICGC.As per the data mentioned above, the average balance per term deposits a/c is Rs.2.54 lakh, while the overall average balance (including Savings Bank, Current Account & Time Deposit is only Rs.58,316). On the other hand, the term depositors of above Rs.15 lakh as per RBI, SBI Research is only 1.3%, who holds 55% in terms of amount of the total term deposits of the banking system.To be fair to banks, the DICGC should allow the premium payable by the banks to be calculated only on the amount of cover available and not the entire assessable deposits of customers, as is being currently done. This will improve the profitability of the banks.The resolution methods of FRDI Bill which spread confusion among depositors is the ‘bail-in’ clause, where the financial firms / companies issue securities in lieu of the money deposited. It means, in case the firm’s financial situation deteriorates, deposits could be converted in securities such as shares in the bank. However, the truth is that the risk is much less in the proposed bill. Currently, DICGC provides deposit insurance of upto Rs.1 lakh. and rest of amount is forfeited in the rare event of the bank failure.Data on Cross Country Deposit insurance Coverage limit shows that Deposit insurance coverage in India is one of the lowest at Rs.1 lakh / $1,508 / 0.9 times India’s per capital income.In India Bank failure is almost non-existent and till now the claims from DICGC is very few. Mostly, such claims have been raised only due to failure of few Co-operative Banks.ConclusionFRDI Bill 2017 provides for specialized resolution mechanism of certain categories of financial service providers and establishment of Resolution Corporation which will contribute to the stability and resilience of the financial system. The following are the advantages of FRDI Bill 2017 to all stakeholders of various Financial Service Providers in India. The bill envisages inculcating discipline among financial service providers in the event of financial crisis. It promotes “Ease of Doing Business” in the country. Improve financial inclusion and increase access to credit, which may lead to the reduction of the cost for obtaining credit. Increased access to finance enhances enterprise growth, which in turn leads to preserving employment, growth and the creation of new job opportunities. The FRDI Bill will be a win-win for all with all such suggested changes to make it more depositors friendly. It can benefit a large number of retail depositors as it seeks to decrease the time and costs involved inresolving distressed financial entities. Help in maintaining financial stability in the economy by ensuring adequate preventive measures, as well as provide necessary instruments in an event of crisis. Once implemented, the Bill together with the Code will provide a comprehensive resolution framework for the economy.

Thank you for the answer request.Assuming that you are a retail investor, the “best” way to invest in municipal bonds, in my opinion, is through a managed account of some type, whether a separately managed account or a mutual fund.Unlike equities, which are exchange traded, bonds are traded dealer to dealer, if they trade at all. That is really important to consider when investing in bonds, because that means that bonds are very hard to value from issuance to maturity. Bond yields reflect both interest rates and the credit quality of their issuers. As interest rates fluctuate over time bond prices fluctuate as well, but what is not really understood by many investors is that an issuer’s credit can fluctuate as well. Changing interest rates allows one to model a bond’s price, but changing credit quality is far more subjective, and not reflected in a bond’s price over time unless that bond trades.A bond’s creditworthiness is the most important consideration when investing in fixed income, and creditworthiness is not going to be reflected in a bond’s credit rating over its lifetime. Rating agencies assess creditworthiness at issuance, but rarely return to an individual security to reassess it. That means that a AAA-rated municipal bond issued twenty years ago, with ten years left to maturity, may be carrying a rating that in no way reflects the true solvency of the issuer — which means that the rating does not reflect the true default risk of the bond. That means that unless a bond is offered for sale, where traders can assess its current credit quality, there is no price discovery. In other words, you have no idea what the bond is worth beyond the interest rate calculation, because you don’t know what the market will pay for it.Which brings us to the next issue when buying bonds. Bonds are traded in huge blocks. Stock trades are considered “odd lots” if they trade under 100 shares, regardless of the price of the stock. Bonds are considered “odd lots” based on the size of the order. Depending on the bond, anything under $500,000 or so is an odd lot. The smaller the purchase the greater the premium the trader will charge you; the smaller the sale, the greater the discount the trader will demand.That is extremely meaningful when trying to invest a retail bond portfolio. If you have $500,000, and you diversify among 20 issues (which, as far as I’m concerned, is not adequate diversification when the primary risk is default), that means you are buying each bond at $25,000. That is an extreme odd lot. An institutional investor buying the same bond at the same time from the same dealer may be buying $10 million. The difference in price between what you paid and the institutional investor paid is going to be huge. At the same time, if you were forced to sell your bond that you bought for $25,000 you may be lucky to get $20,000 for it. That’s because no trader will know what to do with a bond position that small, so to take it off your hands they will hammer you on the price.At my last shop we managed fixed income portfolios for a huge private bank. They had a client whose bond portfolio was at a big brokerage firm and they asked us to assess it in order to transfer it to us. It was about $10 million, but the broker had purchased all the bonds in $20,000 position sizes. We told the client that we would be happy to manage the account, but we wouldn’t accept it with these positions because at some point we would have to trade out, and he would take a loss. We would only accept the account if he had the FA liquidate the portfolio. That way it would be clear to him who was responsible for the losses that he was going to suffer.The final point to consider in fixed income investing is that, again unlike equities, the actual securities in your portfolio are less important than the portfolio’s structure. All bonds that mature do so at par, so as long as you have proper credit monitoring you may have a high level of confidence that every bond in your portfolio will mature. What you have no control over, however, are macro events that will affect interest rates, and therefore the total valuation of your portfolio over time. To account for this, portfolio managers use different structures to account for different macro risk. These include bar bells, where you overweight maturities both on the short and long end of the portfolio; ladders, where maturities are staggered; and bullets, which are concentrations of maturities. Each helps protect the portfolio in different ways as market dynamics change over time.So when investing in bonds you need to control for credit risk, pricing, and risk management. In each of these, an individual retail investor is far better off in a well-managed and low-priced fund than buying bonds directly from a financial advisor.If you buy from a financial advisor, you get none of these advantages. No FA is a credit expert, and even if he or she began their career as a credit expert, they don’t have the means to monitor the bonds they are buying for you as a FA. In fact, they are probably going to buy from the firm’s inventory of bonds that it has underwritten, which means the firm is more interested in selling those bonds to you than in monitoring the credits.A bond sitting in inventory has not been traded, so as noted above there is no price discovery. The FA will tack on a mark-up, but it is a mark-up over the model price that the firm is carrying the bond on its books. If you turn around tomorrow to sell that bond you may discover that its credit is much worse than its rating, and you will lose money in the transaction. And again, you are buying an odd lot, so you are hammered on price on multiple levels.FAs may also buy bonds on the secondary market. Again, it’s an odd lot trade, so you will pay that premium. But what is the price? Bond aren’t exchange traded, so the FA will get six quotes, buy the bond at the cheapest price and sell it to you at the highest quote, keeping the difference. That is called a concession, and it is perfectly legal. But it is not transparent to you.As to structure and risk management, forget that. When you engage a FA to buy bonds you are engaging brokerage services. A broker has a standard of care called “suitability”. The FA needs to make sure that a security purchase is suitable for you, based on criteria you indicated when you opened your account, but that’s it. And the FA’s obligation to you ends with this transaction. So if a FA buys a “AAA” rated bond that at some point defaults, the FA has no legal liability.A managed fixed income portfolio, including a mutual fund, has a higher legal obligation — the fiduciary obligation. A fiduciary must not only exercise prudence in managing the securities it acquires for its clients, but it has an ongoing obligation to monitor those investments, and it must put its clients’ interests above its own.A mutual fund company is buying all securities in bulk. The $10 million position in your intermediate bond fund may have been part of a $60 million trade that the fund company’s traders executed. The PM for one fund is getting the same price as the PMs in the other funds that invest in the same security. Unlike the FA, the traders at an asset management company are not profit centers. They are tasked with best execution, which means buying securities at the lowest price for their clients. The biggest firms will use the power of their size to squeeze their counter parties on price.For example, a $500 million issue may be bought in its entirety by one firm, with substantial benefits to the firm’s clients. This happens when an investment bank issuing a bond calls around several asset management firms who invest regularly in similar securities, and asks them if they are interested in the issue. Often traders will offer to take the whole issue at a discount, in addition to asking for favorable terms in the bond’s covenant. Doing so gives them not only a price advantage, but also insights into the bond’s creditworthiness and other features that may make it attractive to own in their portfolios. All of this benefits the fund’s investors and are not available to retail investors who buy bonds directly.Asset management firms do not keep any inventory, so everything they buy is actively traded. That means a bond’s current creditworthiness is incorporated in the current price. In addition, institutional fixed income investors have teams of credit analysts to assess and monitor every bond they buy. If credit quality deteriorates over the life of the bond their job is to notify the portfolio managers and traders and get the bond out the book as quickly as possible.Finally, active management means active risk management. Professional portfolio managers will structure their portfolios to account for prevailing macro risks, which may mean trading around certain types of bonds, and altering the portfolio’s credit and maturity structures. They may also run portfolios of 400 to 1000 securities, which means they have spread the default risk very broadly versus the 20 bonds an individual might own, while capturing return opportunities in sectors that might be difficult for individuals to buy.In addition, active management allows the investor to benefit from capital appreciation as market conditions change and PMs trade around those changes. Again, those return opportunities are not available to individual investors who are not knowledgeable about the intricacies of the bond markets.Finally, it is very easy to reinvest the income from a fund back into the fund, as well as to rebalance the investor’s overall asset allocation, and very difficult for a $500,000 individual bond portfolio to do. There are downsides to owning mutual funds, of course, including more complicated tax treatment and co-investor risk (which actually is a positive and a negative), but to my mind the downsides are easily offset by the positive attributes of investing in bond funds versus buying individual bonds for retail investors.It should be noted that every fixed income portfolio manager that I know invests for their own account in mutual funds or separately managed accounts. They don’t buy bonds individually.However, it must be stressed that any investor in a bond fund needs to buy from a shop with strong credit capabilities and relatively low fees. Never pay a sales load, for instance, or you are negatively offsetting the benefits of owning the fund in the first place. It’s better to access a fund through a fee-based financial advisor who is acting as a fiduciary, and whose fee covers all wealth management services beyond simply managing your investments.

Guadalajara TodayMay – July 2017The State Capitol of Jalisco MexicoIs Like Living in Any City in The USA,But More Economical!By Carlos TurverIntroduction1. Keeping busy.2. I no longer miss living in the USA.3. US TV in Guadalajara.4. Public Transportation.5. Owning a Car in Mexico.6. Where can I meet North Americans?7. Health care in Mexico.8. A recent hospital experience.9. Assisted living.10. Dentistry.11. What it costs me to live in Guadalajara.12. Staying safe in Guadalajara.13. Emigrating to Mexico.14. Language.Conclusion.IntroductionAlthough I have been living in Guadalajara since 1970, I make it a point to kept myself informed about what is happening in the USA. Quite frankly, with all that has been going on up north, it surprises me that I have not seen any significant increase in the number of Americans retiring to this city.Prior to the two major devaluations of the Mexican peso in September of 1975 and in August of 1982, it seemed that every other automobile had US plates and were driven by fair skinned North Americans. However, when they lost approximately 50% of their assets over night, they cashed in their pesos for dollars and returned home.The following cycle of US plated cars that were in abundance throughout the city, were driven by Mexican nationals who had returned home to take advantage of the increased purchasing power of their hard-earned dollars.Since the implementation of the North American Free Trade Agreement (NAFTA), a large variety of foreign automobiles can now be purchased here on credit. Consequently, US plated cars are now seldom seen.------My parents retired to Mexico in the summer of 1969. A few months later, my father passed on. Although I was a few months shy of completing my four-year enlistment obligation, the US Coast Guard gave me an early honorable discharge so that I could be with my mother while she was recovering from her loss. Shortly after I arrived, I also made the decision to make Guadalajara my new home.------Soon after my military discharge, I married a Mexican National. I got a job as an account manager for an investment house whose clients were primarily English-speaking North Americans. A few years later I owned and operated two small American style food restaurants that were both named Uncle Sam’s Kitchen. The first was patronized by students from the USA who attended the AMA accredited Autonomous University school of medicine. The second restaurant was initially supported by North Americans and other foreign executives who came to Guadalajara to manage the numerous industries that had been allowed to operate in this city because of NAFTA.Prior to the implementation of this free trade agreement, it was extremely difficult to get working papers. Only foreign-born language teachers and those who were married to Mexican nationals were permitted to work. The exception to this law was for those foreigners who invested a minimum of $100,000usd into businesses that created jobs.Those foreigners who were 55 years old and provided proof of a specified minimum monthly income that was required at that time, could obtain temporary residency, but were not allowed to work. However, after 5 annual referendums, the temporary residency papers were upgraded to permanent resident and foreigner was then allowed to work in Mexico.There was a time when it virtually took a presidential decree for foreign males to obtain Mexican citizenship. However, foreign females who were married to Mexican males could apply. In 1975 a supplement to this law was added that allowed foreign males to become citizens when they were married to Mexican females.As I met this condition and as I had decided to live permanently in Mexico, I applied for and received Mexican citizenship that same year. At the time, it was required that I surrender my US passport, birth certificate, my temporary resident papers and a copy of my marriage certificate. The attorney’s fee was $1,000usd. One month after these papers were submitted, I became a legal Mexican citizen. I was recently informed that it now takes a few years to obtain this privilege.Soon after I received my naturalization papers, I was visited by a US government official who informed me that it was very likely that I would lose my US citizenship unless I could provide an adequate explanation of my actions to the Department of State, as it was called at the time. However, even after I had informed this government agency that it was never my intention to lose my US citizenship, I still received a CERTIFICATE OF LOSS OF NATIONALITY OF THE UNITED STATES that was approved on Nov. 17, 1978. This document stated that I had taken an oath of allegiance to Mexico on Nov. 25,1975. As I had signed a document of allegiance to Mexico that enabled me to receive my citizenship papers, I reluctantly accepted their decision. However, in 1990 the law regarding dual citizenship with Mexico was modified. I applied for and received a new US Passport in 2009 and retained my Mexican nationality.During my non-US citizen years, whenever I visited the United States, I had to stand in the line for foreigners and enter with a USA visitor’s visa stamped in my Mexican passport.Whenever I decide to revisit the USA, I will be required show the Mexican immigration authorities my Mexican passport as proof of legal residency in Mexico. My US passport must be shown to the travel agency prior to the issuance of an airplane ticket, as one is required for all US citizens reentering the USA.------Whenever I am asked why I decided to stay permanently in Guadalajara, I previously gave three reasons. Now I give four:1. The weather. Decades ago I learned that Guadalajara had the world’s second-best climate with Nairobi Africa being the first. Guadalajara was closer.2. The Pacific coast is less than 3 to 4 hours when traveling by car or by bus.3. Guadalajara is known for its beautiful women who concentrate daily in any one of the many modern shopping malls that are located throughout the city.4. As my wife and I own our home, our monthly combined income of $25,068 pesos or $1,355usd more than covers our needs.The reason that brought my parents to Mexico is explained in the Conclusion section of this booklet.Unless otherwise specified, the exchange rate of $18.50 pesos for $1.00usd will be used for converting pesos and dollar currency throughout this booklet. In most cases, the currency conversions will be rounded off to the nearest dollar or peso.------Keeping busy.When I retired 10 years ago, I made my goal to get out of the house every morning for at least a few hours.My daily routine is walking to and from the buses I take to meet friends for breakfast and/or coffee. Current events and a variety of other topics are discussed daily except for sports and personal health issues. However, brief updates these two are permitted.Every afternoon I watch less than one hour of Main Street Media, prepare lunch and then take a one to two-hour siesta. Prior to the evening meal, I turn on my computer and listen to informative documentaries and later read the various points of view offered by the alternative media. Before the day’s end, I spend a couple of hours watching episodes or movies on Netflix and You Tube.My hobby for the past 5 years has been writing booklets about an improvement that I made to the martingale betting system that have also been self-published on Online Shopping for Electronics, Apparel, Computers, Books, DVDs & more. The time spent on the keyboard helps to fill in a few hours of each day and helps to keep my mind distant from the mornings conversations that invariably cover doom and gloom topics.Now that I have written all that I care to about gambling, I have diversified from that subject matter. I recently wrote a booklet that explains a diet that I follow daily titled “A Diet for The Body’s Needs, Not for Its Wants”. After self-publishing this booklet, I have an idea for a non-religious short story that I may title “Life After Death, Eternal Revelations of What Could Have Been”.I hate to admit it, but if it were not for the many hours that I spend on the Internet the days would be very long! The computer has become my main source of entertainment and has been well worth the $389.00 pesos or $21usd monthly fee for the telephone and for modem. Also included with these services are all local, national and international land line calls to the USA and Canada. These services are all included with my subscription to Telmex and Infinitum, Mexico’s largest telephone and Internet network!I no longer miss living in the USA.Since the implementation of the North American Free Trade Agreement, Guadalajara offers much of what can be found today in any given metropolis in the USA: Shopping malls, movie theaters, cultural events, gambling casinos, convenience stores, super markets, fast food establishments, restaurants, car dealerships etc. For example:In Guadalajara’s high-end Andares Plaza, there are many familiar brand name stores: Calvin Klein Jeans, Victoria’s Secret, Dockers, Nespresso, Brooks Brothers, Subway, Great American Cookies, Pretzel Maker, GNC, Apple MacStore, Best Buy, AT&T, Steren Shop, Radio Shack, Movistar, Starbucks Coffee, Krispy Kreme, Levi’s, Rolex and others that I am not familiar with as I have not returned to the USA for the past 28 years nor have I lived there for any length of time during the past 47.Throughout the metropolis, there are many other well with known outlets: Walmart, Sam’s, Costco, Office Depot, Home Depot, Office Max, Outback, Red Lobster, Chilis, I Hopp, UPS, Federal Express, DHL, Waldo’s, Dairy Queen, Black Coffee, 7 Eleven, Ford, Chevrolet, Jeep, Mini, BMW, Mercedes Benz, Nissan, Mitsubishi, Pizza Hut, Dominoes, Little Ceaser’s, McDonalds, Carl Juniors, Burger King, Kentucky Fried Chicken, Applebees, Dennys, Sirloin Stockade etc. And when take out with home delivery is preferred, just call UberEATS.Many American foods can be found in a few stores that specialize only in products from the USA. There are even “As advertised on T.V.” stores that can be found in a few shopping malls. Many US companies that previously exported their products to Mexico, are now being manufactured here: IBM, Flextronics, Hewlet Packard, Herbalife and many others. Several North American products are manufactured in Mexico under licensing agreements with reputable Mexican companies: Pringles potato chips, Mars and Hersey chocolates, Coca and Pepsi Cola, McCormick Mayonnaise, Del Monte Catsup, Kraft Cheese, Campbell´s soups, an assortment of Great Value and Procter&Gamle products, Crosse&Blackwell, Hunts BBQ sauce etc.The Americanization of Guadalajara gradually began prior to the North American Free Trade Agreement. However, consumers could only purchase large ticket items with cash. Since the implementation of NAFTA, many jobs have been created and the standard of living for many Mexican nationals has improved. Just like in the USA, a considerable percentage of Mexico’s population can now purchase anything that they want on credit.Welcome to the country of the Mexican Dream!US TV in Guadalajara.Twenty-four seven, 365 days of the year, most, if not all, US TV programing can be accessed and watched in the comfort of one’s home. There are several satellite and cable networks to choose from that offer news, movies, sports, sitcoms and documentaries on well-known channels such as Warner, Disney, History, Discovery, Cinemax, Showtime CBS, NBC, ABC FOX, CNN, ESPN and MSNBC, all transmitted in English. And if cable is not wanted, multiple US news channels can be seen at http://www.zahipedia.net.Depending on the company contracted, a basic package, that offers a limited choice of sitcom and movie channels in English, start around $245 pesos or $13usd/month.A few free channels can be watched on http://watch.ustvnow.com “TV for U.S. Military Service Members and Americans Abroad”. A variety of additional channels can be subscribed to for a monthly fee.Netflix is also available.Public Transportation.Regardless of where anyone lives in Guadalajara, a bus stop is usually only a short walk away. Students and the elderly ride for free with special “transvale” tickets. A one-way fare is $7.00 pesos or $0.39usd. For those in possession of a federal INAPAM (Instituto Nacional para las Personas Adultas Mayores) senior citizens discount card, the price is reduced by 50%. As I take an average of 3 busses, my daily transportation expenses total $10.50 pesos or $0.58usd.There are a few bus lines that charge $10 and $12 pesos, $0.54 and $ 0.65usd respectively, that offer more comfortable seating, air-conditioning, fewer stops and more direct routes, but no discounts.Upon presenting the INAPAM card with a pictured ID, traveling to any destination throughout the country is also half the normal price. On a recent trip to Puerto Vallarta, the round-trip fare that costs $1,080 pesos or $58usd was only $540 pesos or $29usd.Graffiti free, clean and modern, the above and below ground Metro Buses, electric trains “tren lijeros”, taxis and Uber services provide economical travel to any part of Guadalajara.A 20-mile cab fare to the international airport on the opposite end of town from where I live costs $280 pesos or $15usd. A ride to a terminal that will get me on a bus to P.V. costs $120 pesos or $6.47usd. For $90 pesos or $4.87usd a cab will take me to a closer location where I can access buses to points south of Puerto Vallarta.In a few designated zones on the outskirts of the city, a relatively new form of transportation service is available: Three-wheel motor vehicles that can carry up to 4 passengers, including the driver, for short distances.Owning a Car in Mexico.My wife recently upgraded her 2007 Nissan Sentra to a 2012 Honda Civic. Full insurance coverage on this vehicle for one-year cost $5,666 pesos or $306usd.It appears that an important part of the NAFTA will soon be implemented that will allow foreign oil companies to compete with Mexico’s Petroleos Mexicanos (PEMEX. As there is currently no competition to this federally owned gasoline monopoly, the cost per liter was recently increased. The PEMEX Magna now costs $16.26 pesos or $0.88usd per liter and the PEMEX Premium $18.19 pesos or $0.98usd per liter. The price per gallon cost is approximately $3.33 and $3.72usd respectively.The annual registration fee for the Honda was for $450 peso or $24usd. There is also a yearly emissions test that usually requires a major tune-up. This once a year expense was for $1,500 pesos or $81usd.Toll roads are much safer, but costly. For example, according to Mexico’s SCT (Secretaria de Comunicaciones y Transportes) the cost for a round trip visit to Puerto Vallarta from Guadalajara for tolls and gasoline is for approximately $1,486 pesos or $80usd for a 4-cylinder automobile.Driving in this city is no longer fun! Total concentration is required to maneuver through Guadalajara’s heavy traffic. Since the implementation of The North American Free Trade Agreement the streets have been literally inundated with automobiles and motorcycles as these vehicles can now be purchased on credit.With so many vehicles on the streets, body shops are doing a thriving business! When involved in any accident, even the tiniest of fender benders, the law requires that the vehicles involved remain exactly where the accident occurred until the proper authorities arrive to fill out the paperwork. This can take a few hours and will pretty much ruin anyone’s well planned day along with those drivers who are unable to get past this potential crime scene.The country’s judicial system continues to be based on Napoleonic law. Whenever any blood is shed, the accident becomes a felony.Where can I meet North Americans?The weekly Guadalajara Reporter at http://theguadalajarareporter.net/ lists the time and dates of many social activities that take place in the city or at nearby Lake Chapala some 50 kilometers or 30 miles south, where many Americans and Canadians have opted to reside.Several expatriates can be found at the luncheons offered by the American Society (AMSOC) on Thursday afternoons. Open mornings Monday thru Saturday from 10am to early afternoon, this nonprofit organization offers a 60-inch TV screen for those who want to keep abreast of world events. There is also a large English book and movie library for its members. AMSOC can be contacted at 312-123-95, [email protected] or at The American Society of Jalisco, A.C.. At Lake Chapala, there is a similar organization called the Lake Chapala Society. There is also an American Legion.Health care in Mexico.Before visiting Mexico, it would be advisable to read your health insurance policy to be well informed of your coverage prior to traveling outside of the USA.Citizens and legal residents of Mexico have several choices for their health care needs. There are many pharmacies in this city that offer a consultation with a licensed doctor for as little as $30.00 pesos or $1.62usd. Once an ailment has been diagnosed, the patient is given a prescription that can be filled at that pharmacy.Guadalajara offers two inexpensive hospitals for those who have no health insurance and are short of cash. Reasonable fees are charged for consultations with specialists, lab work, X rays etc. For example, the following prices are for a few of the services offered by these Jalisco state run Civil Hospitals:Consultation with a specialist: $80 pesos or $4.32usd.Cost per night in a shared room: $600 pesos or $32.43usd.Lab tests: $100 to $1,500 pesos or $5.41 to $81.08usd.X rays and magnetic resonance: $300 to $5,000 pesos or $16.22 to $270,27usd.The Cruz Verde is unique to the State of Jalisco offering inexpensive 911 emergency response medical services. This organization has their own outpatient ward and charges modest fees for their services. The ambulance is free.Since the Vicente Fox administration, any citizen or resident throughout the country can be accepted into the Seguro Popular that is essentially a free health care system. An 80 plus year old lady friend of mine who had registered for this program recently underwent major surgery and chemotherapy at no cost to her.Across the street from the McDonalds that my friends and I frequent, there is a Dairy Queen, Jeffrey’s Pasteleria, a North American owned cake, pie and cookie store, Pizza Hut, a Kentucky Fried Chicken outlet, and a laboratory named Salud Digna. Prescription eye glasses start at $180 pesos or $10usd. A second pair can be purchased at a 50% discount. An electrocardiogram costs $100 peso or $5usd; X rays go for $140 pesos or $8usd each; Blood tests range from $130 to $360 pesos or $7 to $19usd.The I.M.S.S. (Instituto Mexicano Del Seguro Social) that has many hospitals and clinics nationwide, is the working man’s health care and pension program. However, those individuals who work independently can be covered by the same health care program by paying a yearly fee. My brother in law who is 72 years old, recently paid $7,600.00 pesos or $411usd, for one year’s coverage. He is coverage for any contingency with the exception of a precondition. This will be covered when he has been affiliated with this institution for a minimum of two years.The Instituto del Seguro Social para los Trabajadores del Estado, I.S.S.T.E. is primarily for those employees who work for the state government.As my wife, brother in law and a few of my friends who are now older than 65 years of age, have cancelled their private health care insurance policies because of the expensive premiums that are substantially increased every year. A few of them have recently enrolled into the IMSS and a few of them have decided to use the Seguro Popular or the Civil Hospital health care systems.A close friend of mine who is also 72 years old, recently dropped his private health insurance and will opt for the same IMSS coverage as my brother in law by paying a yearly premium of $7,600 pesos. As he has decided that it is very unlikely that he will ever return to the United States, he is in the process of canceling his Medicare part B coverage for $113usd per month as it cannot be used in Mexico. Once cancelled, a portion of this additional income will be used to pay for the $411usd IMSS coverage. In the meantime, he has signed up with the Seguro Popular.To lessen the financial burden upon my demise, every year I renew my funeral expense policy that will cover all costs related to this event except for a burial plot. I recently renewed this policy that cost me, a 71-year-old man, $1,350 pesos or $72.97usd.------A recent hospital experience.A few weeks ago, a close friend who had been suffering from chronic back pain, acute anemia, type 2 diabetes and prostate cancer, was unable to answer his telephone or to open his front door. Fortunately, he had disclosed the hiding place of a spare key to a mutual friend who was accompanying me that day. Upon entering the house, we found him sprawled on the floor where he had fallen several hours earlier. As he was too weak to stand he was unable to access his phone to call one of us or 911. He knew that both of us were coming over for coffee that morning so he impatiently waited for our arrival.We called an ambulance and 45 minutes later he was in the emergency room at the nearby Arboledas Hospital. The ambulance service charged $1,100 pesos or $59usd. As he had no health insurance nor a credit card, a $15,000-peso or $811usd cash deposit was required for his admission to a private room.An endoscopy procedure for $9,500 pesos or $514usd and $1,000 pesos or $54usd for the anesthetic resulted in a stomach ulcer discovery. A back-X ray that cost $590 pesos or $32usd, detected a vertebral hernia. He also had two blood transfusions for $5000 pesos each or $270usd. The overnight charge for a private room was for $1,650 pesos or $89usd.His blood sugar levels were far from normal when he arrived but after a two-night stay for $44,135 pesos or $2,386usd, his blood sugar count was back to normal, the stomach ulcer was healing and the pain killers for his back kept him comfortable while he regained enough strength to be discharged.His internist prescribed the following medicines that were purchased at a nearby branch of Farmacias Guadalajara. The doctor’s consultation fee at the hospital totaled $4,000 pesos or $216usd during my friend’s recovery period of approximately 45 hours. Future consultation fees at the doctor’s office would be for $700 pesos or $38usd each.1. Glucerna SR powder400gr $335.98 or $18usd.2. Ulsen PCS 40mg 14 capsules $275.10 or $15usd.3. Paracetamol 500mg 20 tablets $12.50 or $0.68usd.4. Tradol 50mg 10 capsules $270.75 or $15usd.5. Metformina 850mg 30 tablets $13.49 or $0.73usd.6. Galvus Met 50mg/850mg compressed 30 tablets $397.67 or $22usd7. Two liquid Enemas of Fosfato Fosfanema (Phosphate) 133ml each having a of cost $76.08 or $4usd. These 8 items totaled $1,382 pesos or $75.41usd.------Last week, my friend had a relapse.Since his release from the hospital, we noticed that his strength was slowly diminishing. When we were informed that he had fallen two times the night before, we returned him to the same hospital where he spent 3 nights. The cost for this visit that included three blood transfusions was slightly above $32,000 pesos or $1,730usd.On the day of his discharge, he was able to walk confidently with the aid of a walker. The following day, we took him to a urologist who charged $700 pesos or $38usd for the consultation. He prescribed the following three medicines for the prostate treatment:1. Zoladex 10.8mg, one every 3 months. $10,940 pesos or $592usd.2. Calutol 50mg tablets, one/day. $1,653 pesos or $89usd.3. Zometa 4mg solution, one/month. $6,717 pesos or $363usd.These three items totaled $19,310 pesos or $1,044usd.Assisted living.Although he was improving at a noticeable pace, his three children flew in from Toronto and Utah after they had been notified of his condition. They insisted that he spend at least one month in an assisted living facility until he regained his strength. He is now staying at the Casa Eugenia, [email protected], another property of theArboledas Hospital owners that is located one block away.A private room at this facility cost $1,000 pesos/night or $54usd for short stays, $16,000 pesos/month or $865usd for a semi private room, $21,000 pesos/month or $1,135usd for a private room and $23,000 pesos/month or $1,243usd for a slightly larger private room.Dentistry.Yesterday at our Saturday morning coffee/breakfast gathering, I saw something that I had never seen or heard of before. A bite guard. The granddaughter of one of our group had just recently been fitted for this thin transparent bite guard. I asked the young child’s grandmother what it was for. She told me that it was for giving support for a loose tooth.This device was exactly what I needed as I also had the same problem. She told me that it cost $500 pesos or $27usd.On the way home, I stopped at Especialidades Odontológicas, that can be contacted at http://especialidades-drrex.com. While there, I asked the receptionist for prices. My bite guard was going to cost $800 pesos or $43usd. Fillings cost $600 pesos or $32usd and a root canal for $3,500 pesos or $189usd. An X ray cost $200 pesos or $11usd and a bridge for one front tooth is going to cost $2,500 pesos or $135usd.------What it costs to live in Guadalajara.A few years before I received my first benefit check from the Veterans Administration in June of 2007, my wife received an inheritance that was used to purchase our home. Our combined monthly income from Uncle Sam and the Mexican Social Security pension program is more than enough to cover our needs. We each receive a monthly deposit of $2,721 pesos or $147usd from the Mexican government. I receive a monthly income of 1,061usd or $19,629 pesos that is deposited to a Texas bank. From this amount, I give my wife $4,767 pesos or $258usd that gives her a combined monthly income of $7,488 pesos or $405usd.With a declared total monthly income of $25,071 pesos or $1,355usd, less my wife’s monthly income, a balance of $17,583 pesos or $950usd remains for our fixed and miscellaneous expenses.When there are no major household or auto repairs, occasionally I have been able to save up to $2,500 pesos or $135usd in one month. There are some months when I have increased my Mexican peso savings by taking advantage of a strong dollar and weak peso rate of exchange.These savings pay for restaurant outings or for short inexpensive trips to Puerto Vallarta, Cuyutlan, or Barra de Navidad, all located on the beautiful Pacific coast only a few hours away by car or by bus.The Mrs. saves most of her monthly income for car upgrades that takes place every few years.Based on the above numbers, the combined fixed and miscellaneous expenses average $27.17/day totaling $815usd/month.Monthly expenses:Telephone and Internet:$389 pesos or $21.03usd.Cellular phone:$60 pesos or $3.24usd.Gated community maintenance fee:$580 pesos or $31.35usd.Electricity: $157 pesos or $8.49usd.In our residential area, the government owned electric company CFE, Comision Federal de Electricidad, subsidizes 85% of the cost.Natural Gas: $183 pesos or $9.89usd at $7.07pesos/liter. This expense will increase by approximately 14% when the tank is refilled this year as the price is now $8.08 pesos/liter or $0.44usd.Four days per month maid service:$1,125 pesos or $60.81usd.Basic cable service for two TVs:$245 pesos or $13.24usd.My wife’s income:$7,488 pesos or $405usd.Yearly expenses:Water: $750 pesos or $41usd ($62.50 pesos/month).Property tax on our one million pesos or $54,054usd house: $486pesos or $26usd ($40.50 pesos/month).We carry no household insurance.Auto collision and liability insurance: $5,666 or $$306usd ($472.17 pesos/month).Tune up with emissions verification: $1,500 or $81usd ($125 pesos/month).Auto registration: $450 or $24usd ($37.50 pesos/month).Gross monthly income = $25,071 pesos or $1,355usd.Less the Mrs.’ income = $7,488 pesos or $405usdNet monthly income = $17,583 pesos or $950usd.Total monthly expenses = $10,965 pesos or $593usd.Miscellaneous expenses = $4,110 pesos $222usd.Average monthly surplus = $2,500 pesos or $135usd.Staying safe in Guadalajara.In my personal situation, my wife and I have resided in a gated community for the past 4 years. We have 24/7 security guards that work closely with the local police. Our home security consists of two chihuahuas who bark at any noise.For those of you who are concerned about the violence in Mexico, you are not alone. As much of it appears to be drug related, simply avoid those areas where that kind of trouble occurs. When we do find ourselves at the wrong place at the wrong time, it is just part of living that can happen in any city, state or country that we choose to visit or to live in!When driving, it is advisable to keep the car doors locked and the windows rolled up. When walking, stay on the main streets. An evening strolls depends on the security of the area. I find it best to avoid this nocturnal activity. The rule of thumb of course, is to always use your street smarts.------Depending on the emergency within the Guadalajara Metropolitan area, calling 911 will send the police, firemen or an ambulance.The American Consulate can be contacted at 326-821-00 for advice on handling other problems.------Emigrating to Mexico.I am by no means an expert in Mexican immigration law. Therefore, it would be advisable, and in some instances necessary, to first contact a Mexican Consulate and/or an immigration attorney for a consultation concerning your specific needs and who can also offer assistance in obtaining resident, working or citizenship papers.According to “Mexico On My Mind”, at https://www.mexicoonmymind.com , to become a temporary resident in Mexico one needs to present proof of income for approximately $2,000usd for an individual, $3,000usd for a married couple and an additional 25% for each family dependent.I have heard that these amounts can vary when an applicant is married to a Mexican National, owns a home, or choses to reside in a small or medium size town.For approximately $22usd, a 180-day tourist visa can be obtained upon entering Mexico. I have been told that this amount is included in the airline fare or is paid separately when crossing the border by car or by bus.Prior to making any decision about permanently moving to Mexico, I strongly suggest using the full six months of a tourist visa. Since 1970 I have known several expatriates who have gotten frustrated with the different aspects of the Mexican culture after having gone through the immigration process. I have always suggested that any major decision such as buying a home or marrying a Mexican national should not be made until a minimum of 6 to 18 months have been spent getting familiar with the ways of the people and getting to know what the country has to offer. Mexico is not for everyone!Since the implementation of the North American Free Trade Agreement I have been told that it has become much easier to acquire papers to work in this country. However, there are still several hoops that need to be jumped through.An immigration lawyer will prove to be invaluable for obtaining legal status in Mexico. If the plan is to start a business, a good accountant will also be needed!Language.Do not be too concerned if you do not speak Spanish. Most residents of Guadalajara have a fair knowledge of English. Spanish courses are readily available throughout the city for a reasonable per hour price.In Conclusion.Both of my parents were born in the State of New York. My father taught high school biology and every summer he would take my mother and myself on a two-month cross country drive to California.My grandfather was of Spanish- Mexican decent and graduated from the Chapultepec Castle in Mexico City when it was a military academy. He graduated in the late 1800’s or in early 1900’s and then deserted.For graduation, his parents bought him a round trip steamer ticket to New York City. Instead returning to fulfill his 8-year military obligation that he owed Mexico for his schooling, he cashed in the return ticket and taught Spanish and fencing in NYC.He married a woman who had recently arrived from Spain by the name of Martha Fox and then moved to Buffalo, NY. – I have always wondered if his wife’s family was related to Vicente Fox, a fairly recent president of Mexico.As this story goes, I was told that my grandfather asked my parents to visit Mexico to look up his relatives and let them know that he was alright. He had not communicated with them since his desertion for fear of being tracked down by the Mexican authorities. If found, he could have been forced back to Mexico, stood trial for desertion and would have probably served a long prison sentence.I was probably 8 years old when my parents first visited Mexico in 1953. Our first stop was Guanajuato where my grandfather used to live. I mention this only to point out that the family of the former president Vicente Fox was also from Guanajuato.After locating his relatives in Mexico City, we traveled throughout Mexico and discovered Guadalajara. Until their passing some decades ago, every summer vacation was spent in this city. We lived here for two years from 1956 through 1958 when my father took a two-year leave of absence from his high school teaching position. While I was completing my four-year enlistment in the US Coast Guard, my father retired in the summer of 1969, sold our home and brought my mother to live permanently in Guadalajara.My father passed on during the following month of October. I was given a four month early honorable discharge and returned to Guadalajara to be with my mother. I have been here ever since.Guadalajara has been my home for approximately 50 years and I have never regretted leaving the USA nor for having made the decision to live here permanently. When I initially moved here, there were a few things that I missed from the USA. These can now be found in Guadalajara. What I do not miss is the cold, rain, sleet, snow and constant overcast that prevailed in my hometown of Endicott, New York!The author can be contacted at: [email protected]