Will Mexico Collapse On Obama's Watch?

Gun battles between drug gangs in Ciudad Juarez. An army general kidnapped, tortured, and murdered in Ciudad Juarez. And now the collapse of the Mexican bond market. From today's em>Los Angeles Times<:

The Treasury had to pay a little more than expected Thursday to sell $14 billion in 30-year bonds, the final leg of a record three-part bond sale this week to fund Uncle Sam's soaring cash needs.

At least investors showed up to buy -- as opposed to what happened in Mexico on Wednesday: The government of President Felipe Calderon had to pull a planned sale of 21-year bonds after investors balked.

"There was no demand" for those securities, Gerardo Rodriguez, head of the Finance Ministry's Public Credit Department in Mexico City, told Bloomberg News.

Mexico's near term future looks even grimmer. Petroleum revenues are declining. The flow of remittance dollars from north of the border will contract as migrants lose their jobs or return home. And the El Paso Times has its hands on a leak from US Joint Forces Command that Mexico stands alongside Pakistan as one of the two countries to be monitored most closely for risk of sudden collapse into state failure. (H/T U.S. Newsspan> Capital Commerce<span>)<

These concerns may explain why Congress has rebuffed suggestions to restrict stimulus-created employment to legal American workers only. They may think that Mexico needs remittance dollars even more than Americans need jobs.