HSBC’s Mexican operations are classified as an emerging market. Does this sound like the build-up to subprime in the United States: “Our customers are self-employed; they’re not going to lose their job. Maybe in the past a customer sold 20 quesadillas a day, and now they sell 15. But they’re still selling.”
How much can a person make selling 15 quesadillas or tacos in a day? It reminds me of the fry cook at McDonalds making minimum wage who qualified for a subprime liar loan of $500,000 to buy a house. The practice destroyed the U.S., and to some extent, the global economy.
As a side note, HSBC’s default rate in Mexico is 5.63 percent as of the first quarter 2009.