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Convoy of X-Men attack a rival gang

Ousted Honduran President Zelaya nearly takes refuge in Mexico. Drug violence continues to escalate and new gangs are joining the fight. Amnesty International criticizes the Mexican army for rights abuses. The U.S. sends drones to patrol the border. A new Central Bank governor is named. Auto production is up, a sign that the economy may be bouncing back. And one million people are expected to join the Our Lady of Guadalupe festivities in Mexico City.

Top News: After being holed up in the Brazilian Embassy in his homeland for more two months, ousted Honduran President Manuel Zelaya announced on Dec. 9 that he would take refuge in Mexico. But as the Mexican plane flew down through Central America to pick him up, Zelaya said he would not accept the de facto’s government’s condition that he would have to renounce his claim to the presidential chair.


Several countries lambasted such pressure saying it would only accentuate the political crisis that has gripped Honduras since the army marched Zelaya out of office at gunpoint in June. Meanwhile, the Mexican government, which landed its plane in neighboring El Salvador, said it would negotiate for Zelaya’s safe passage north.


Drug related violence exploded again in early December with major clashes across the country, especially in Chihuahua, Michoacan and Nuevo Leon. In the Pacific state of Sinaloa, firefights involved a new group known as the X-Men, who traveled in a convoy of 30 vehicles, marked with X’s so they could identify each other, and then hit another gang with .50 caliber machine guns.


Across the country in the industrial city of Monterrey, shootouts on Dec. 4 left 13 people dead. The fighting erupted when soldiers and police raided a suburban villa and were ambushed by a gang of Zetas – the paramilitary force of the Gulf cartel. The ensuing violence claimed the lives of 10 gangsters, two policemen and one bystander.


Amid this carnage, the Mexican army came under fresh criticism for their war on the drug gangs. This time the attack came from human rights watchdog Amnesty International, which released a report on Dec. 8 that said the army has killed prisoners, tortured civilians and captured suspects illegally. “The abuses we have seen contribute to the deterioration of the security situation in Mexico,” said Kerrie Howard, deputy director of Amnesty's Americas Program.


The U.S. government will increase its use of machines to fight the drug traffickers by sending more drones to spot smugglers and illegal migrants at the U.S. border.  The unmanned aircraft used by the U.S. military in Iraq will carry out surveillance and tracking at the Mexican border but will not carry weapons, the Homeland Security Department announced. 


While the U.S. labors to catch Mexican gangsters, Mexico is also netting some wanted Americans. Police in the small town of Emiliano Zapata in Veracruz state announced they had arrested a suspect wanted by the FBI for two rapes in Abington, Pa in 2004. The suspect, Michael Cornelius Burke Jr., was nabbed with help from civil organizations that track fugitives on both sides of the border, police said.


Money: President Felipe Calderon nominated Finance Minister Agustin Carstens to be the new governor of the Central Bank in January. If the appointment is approved by Congress, Carstens will succeed current governor Guillermo Ortiz, who has served a 12- year tenure. Carstens has been praised for holding back inflation, but criticized for the severity with which the world economic crisis hit Mexico, which is predicted to shrink by 7 percent this year. Ortiz was recognized as reducing inflation since the bad old days of the Tequila crisis in the mid 1990s.


In signs the Mexican economy could be bouncing back from its plunge, auto production rose 2.9 percent in November compared to one year ago. It was the first annual improvement in more than a year. Auto production is the biggest single manufacturing sector in Mexico and has important ripple effects on the economy.


Such signals are leading to better sentiment and paving the way for more Mexican companies to borrow. Several leading companies have come out with new bond offers to raise the cash needed to turn red numbers into black.


Among the biggest names with bond offers is Cemex, the world’s No. 3 cement producer. On Dec. 9, it sold $2.1 billion in bonds. The top cement seller in the U.S., Cemex plans to use the cash to pay off banks and liberate itself from spending caps imposed in an August restructuring deal.


Elsewhere: Anyone in Mexico over the Dec. 12 weekend will be swept away by the festivities for Our Lady of Guadalupe or La Virgen de Guadalupe, the national Catholic symbol. Colorful processions, prayers, and singing will take place in every town across the country, but the biggest festivities are always in the impervious Basilica of Guadalupe in Mexico City, where one million people are expected on Saturday.