Latin American markets continued to be shaken by a global financial crisis set off in September by bad mortgages in the US. On Oct. 7 the stock exchange in Sao Paulo, Brazil, fell 4.66%; Mexico's market was down 3.97%; stocks in Santiago, Chile, fell 4.29%; and the market in Buenos Aires, Argentina, lost 2.72%. Latin American losses that day were smaller those in New York, where the Dow Jones lost 5.11%. (La Jornada, Oct. 8 from Reuters, AFP, DPA and Notimex) But fallout from the global crisis is likely to get worse. Speaking in Durango on Oct. 6, Mexican Labor Secretary Javier Lozano Alarcón said his department expected some 200,000 Mexicans now working in the US to come home during the next year; he denied the number would be in the millions. (LJ, Oct. 7)

Iran's top diplomat in Bolivia says his country will open two health clinics in the Andean nation as a base for future Red Crescent projects in South America. The agreement was signed by Iranian business attaché Hojjatollah Soltani and the Bolivian Health Minister, Ramiro Tapia, in the presence of President Evo Morales at the Presidential Palace in La Paz Oct. 10. Soltani signed the agreement on behalf of the Iranian Red Crescent.

At least 18 were killed, including 12 soldiers, when Sendero Luminoso guerillas ambushed a Peruvian army convoy late Oct. 9, military sources say. A child was among six civilians killed in the ambush on four trucks transporting troops and civilians to Cochabamba Grande base in Huancavelica region. Authorities said the convoy was passing through the Apurimac-Ene River Valley (VRAE) in the area of Tintaypunco, Tayacaja province, when the guerillas detonated a roadside bomb and then strafed the stricken vehicles with machine-gun fire. Those troops not killed in the blast fought the guerillas for hours before they retreated back into the jungle in what was the deadliest clash between Sendero and the security forces in a decade.

Calling his corrupt underlings "rats," Peru's President Alan García has dismissed his entire cabinet in what the local media have dubbed the "Petrogate" scandal, and appointed a popular left-wing regional governor as prime minister. Allegations of kickbacks in the granting of concessions to Norwegian company Discover Petroleum arose after local TV aired a series of audio tapes in which two members of García's APRA party discussed the apparent payments. The company denies it paid any bribes. The government has called a special commission to investigate all oil concessions granted since 2006.

Mexico's powerful drug cartels are buying cocaine directly from Colombia's main guerilla group, Colombian deputy defense minister Sergio Jaramillo charged Oct. 7 at an OAS anti-crime conference in Mexico City. Jaramillo said that Oliver Solarte, finance chief of the FARC's 48th Front, is the guerilla organization's key contact with the Mexican drug lords. "We are particularly worried about the strengthening connections between Mexican cartels and the FARC," Jaramillo said. "The Mexican cartels are buying directly from the FARC." He declined to provide more details, saying he did not want to compromise intelligence reports. (AP, Oct. 10)

Forensic examinations have determined that five bodies found in Ayacucho department, Peru, are relations of Lucy Pichardo, a peasant woman who reported the disappearance of 11 family members after the National Police had conducted a "counter-subversive" operation in the area. The bodies are reportedly those of her husband, brothers and a sister-in-law, who had been pregnant. Pichardo says two children and four adults remain missing.

President Evo Morales said Oct. 4 that he has rejected a request from the US Drug Enforcement Administration (DEA) to fly over Bolivian territory. "Two days ago I received a letter...asking a government institution for permission to fly over national territory," the Bolivian Information Agency quoted the president. "I want to say publicly to our authorities: They are not authorized to give permission so that the DEA can fly over Bolivian territory... No DEA or American [agency] can be overflying our national territory. Under the pretext of fighting drug trafficking, under the pretext of monitoring coca leaf crops they want to overfly, and we are going to make it clear that we monitor domestically. We don't need anyone spying." (BBC, AFP, Oct. 4)

In the first six months of 2008, the "desplazados," or internally displaced persons from Colombia's conflict, reached a record number of 270,675—about 41% more than the same period in 2007. "The national rate shows an average of 632 desplazados for every 100,000 inhabitants; between January and June, 1,500 new refugees left their homes each day. This is the highest number since 1985", said Jorge Rojas, director of Colombia's non-governmental Consulting Group on Human Rights and Displacement (CODHES).