#83 – The Expat Files: Sushi, Scams, and Social Status in Latin America

Automatically transcribed from the original recording; names and wording may contain errors.

[00:03] Hi everybody, I'm Johnny Mueller and you're listening to The Expat Files, living in Latin America. The show that tells you what it's really like to live, work, play and or retire in Latin America. I tell it just like it is, not the version they give you in those glossy travel magazines, or the picture they paint for you in those international traveler websites, where they're only trying to sell you something. What's it really like for expats living in Latin America? Well, it's time to take off those rose colored glasses and find out. So let's get started! You know, down here in Latin America, in their effort to copy anything and everything first world, they've actually jumped on the sushi craze if you can believe that. So these days, in every medium and upscale mall, you can find any number of little sushi

[00:52] kiosks, just like you can up in the first world, only down here, instead of little oriental guys sporting Ginzu knives and white aprons and hats, the so-called sushi chefs are 100% Latinos. And characteristic of the macho society down here, they're always men. And obviously, if there's so many of these little sushi parlors everywhere, they must be a financial success or they'd have disappeared a long time ago. Because the very first sushi joint that I saw down here, started around five or six years ago. And that little hole in the wall joint is still around. In these days, the owner is driving a brand new SUV. Go figure. And the trend has only grown since then. Now I'm not saying that they're doing gangbusters, there's no long lines or big ads in newspapers, no. Because their market is only the 10% of the Latin population who can afford expensive exotic

[01:40] foods like that. Because the fact is, six little California rolls for 10 bucks is definitely not in the budget for the average guy making three or four hundred dollars a month. And that's more than half the population down here. And I'll tell you, it's not because these upscale Latins like the taste of sushi, no, they really don't. Though I can't figure out how anyone eats raw oysters either. And as far as my personal tastes, I don't eat sushi, go to the ballet, or listen to opera. At least I don't pretend to like those kind of things just to appear somewhat cultured, like so many of the idle rich Latins do down here. And if that makes me a low class kind of guy, well, guilty as charged. Anyway, down here in Latin America, it's all about that up in the first world, sushi is a big fad. So upscale Latins have jumped on it so they can prove to their fellow trendy Latins that

[02:26] they're hip with a trip. Now one of my favorite wild and crazy expat buddies, who I've known a long time, named Eddie, well, he's a virtual encyclopedia on expat dos and don'ts. He's one guy I know that's done and tried it all, good or bad. So whenever I'm stuck for an answer, I defer to him. Now Eddie the expat, who doesn't particularly like sushi himself, figured this would be a cool thing to open up in one of the upscale malls, since he knows all too well the Latins psychology, especially the psychology of upscale Latins, who'll dish out their dough on anything first world. And he gave me the inside scoop on these sushi joints. He's making money off sushi joints and he's telling me it's all about the presentation. He says as long as the stuff looks fresh and colorful, and it's in an upscale area of town or in an upscale mall, it sells.

[03:12] Pretty much no matter what it tastes like, because the Latins load it down with so much sauce and hot peppers, that all you have to do is make it look nice and they'll buy it. And as for me, I never eat sushi, I don't trust it up in the first world, and I'd never trust it down here in Latin America, believe me. Because we all know what happens to raw seafood if it's been sitting out just a little too long. Even if you use sanitary techniques and your hands are absolutely clean, and in reality you can't expect those ideal circumstances even up in the first world. I mean everyone up north who says sushi up there has gotten sick on it more than once, yet they keep going back for more, go figure. Yet down here in Latin America where they don't have food inspectors, nor does anyone even care or question the fact that no one's minding the store. And since Latins are not big on hand washing in general, mostly because there's such a

[03:58] shortage of water, how can you expect that sushi, which is a delicate proposition at best, even in cold climates up north? Well I'm just advising all you first-worlders who come down here, and all you tourists, that you should never trust any sushi unless you make it yourself. And don't be fooled if you go past one of these sushi joints, and the food in the display case looks awful good. You should always remember that down here there's a huge water shortage, not to mention soap and towels, and toilet paper, and the fact that you're instructed not to put the toilet paper in the toilet, but in the garbage can alongside the toilet, yuck. And remember that those rules apply to the guys that prepare and serve your food. And don't be comforted by the fact that you see the cook wearing plastic gloves, and you're starting to see that more and more down here, but it's not necessarily a good sign.

[04:47] Don't be fooled by that either, because the chances are he's using that same set of plastic gloves all day long. It's all part of the copycat show, where you have sushi kiosks like that, and higher-end restaurants copying first-world franchises that have landed down here where everybody who handles food uses gloves. Because you see, the mantra down here is, when you're selling to higher-class folks, the mantra is, let's make it look as first-world as possible, up at the front counter where the customers are, but it's back to third-world standards, in the back room, where the real work gets done, and back there, anything goes, except of course, liberal use of soap and water. Anyway, you can see what I'm getting at. I don't care how good that sushi looks behind that little glass window in the kiosk, expats, you should never eat it, and it's something about these Latins and their rugged constitutions

[05:36] and cast-iron stomachs, and of course, thanks to Darwinism and hundreds of years of coexisting with unsanitary environments, that somehow, even these guys who eat sushi on a regular basis down here, don't seem to suffer any ill effects, whereas expats and first-world vacationers who don't know any better and eat at these very same places, are really at risk of spending a few days in front of the porcelain goddess, if you know what I mean. And unfortunately, most of them have, including me. Now I have a lot of wealthier upscale latin friends too, some of them spoiled young adults who are children of the idle rich, you know, from the kind of pompous oligarch families I talked about, who measure their status by how many bodyguards they have, and if they can afford to outfit their bodyguards in designer suits or not. Down here, with the Range Rover and Jaguar crowd, what your bodyguards actually wear

[06:25] constitutes its own kind of status, believe it or not. Anyway, some of these young friends of mine are such first-world wannabes that they have to get their sushi fix almost every lunch hour, not to mention they have to make an appearance at least every few days at Starbucks, of course. And believe it or not, since franchised eye-hops have landed down here, a quick stop at the first-world pancake house is becoming mandatory too. But not for your bodyguards, you leave them out in the parking lot, where they can schmooze with their own kind. That's where they get together and compare notes on their rich little charges, you know, the kids they're supposed to be guarding. Meanwhile, the bosses or the politician's kid sits like a prince in the IHOP. Of course, making sure he's noticed by his other upscale friends, it's always the same drill. He screws around with his Blackberry for a while and text messages on his smartphone

[07:13] and orders a big plate of the world's most unhealthy food. To these guys, it's the epitome of the first-world lifestyle, and they want a piece of it in a big way. Even though to us expats, eye-hops to us have long since become uncool. Only first-world trailer trash and truckers think that breakfast at the IHOP is some kind of event. But how would first-world wannabe Latins know that? They still think Kenny G., Michael Bolton, Phil Collins, and Rod Stewart are examples of first-class rock and roll. I think you see the problem here. But I was talking about third-world sushi now, wasn't I? Now I asked one of my upscale rich kid buddies what he liked so much about sushi, just in case I was missing something here. And he didn't hesitate a second when he told me that sushi was the most natural, wholesome,

[07:58] clean and organic food that anyone could eat. And he said it with conviction, like a nutritionist with a master's degree. It actually sounded like he'd read something like that somewhere and had memorized it. Just for guys like me, because he knows I'm kind of a critic, I wonder how he ever got that idea. And he told me this right when we were standing at the counter ordering food at one of Expat Eddie's sushi joints. And I thought, aha, here's my chance to make some fast money. And I said, I'll bet you 20 bucks that that's not even real crab that you're eating right there. That red stuff that looks like crab, it's really emulsified, processed, cheap, no-name fish that's loaded with additives and binders, then they add red dye to it to make it look exactly like crab meat. And it is, you know, pretty convincing, though almost too perfect. Which is the dead giveaway now, isn't it?

[08:46] And he thought I was making a bad joke to ruin his appetite because he knew I would never eat sushi. Then I said, if you want to make 20 bucks, just bet me. And he did, thinking he'd had it in the bag. Anyway, it was his rich daddy's money, so what did he have to lose, right? And then I asked the little Latin sushi chef if that was real 100% crab meat that he was serving. And he said quite seriously, everything we serve here is fresh and natural. And then I called the owner, expat Eddie, over, who was sitting at one of the tables and I said, Eddie, I got a bet with this guy whether these are real crab legs or not. Tell him. Tell him they're not real. And then Eddie made a funny face and said, look, it's a real seafood product. No one uses real crab meat down here. It's too expensive and it just doesn't keep. And then he said, the stuff I use is not exactly real, but it's not exactly fake. But it sure does look good, doesn't it?

[09:33] There's nothing wrong with that stuff at all, the whole world's using it. And then he waved me off and went back to his table. But I did win my bet under protest, of course, because it wasn't real crab meat. But here's the thing. The sign right over it said crab meat. The menus on the table said crab meat and the little Latin chef thought it was real crab meat, which is a blatant case of false advertising. But down here, no one ever gets called out for that, even though I guess it's probably illegal down here, as you probably figured out. You can say anything you want, even in writing. And as long as no one dies because of it, you'll never end up in court. And for that matter, even if someone does die, you still might never get to court. Which goes to show you just how completely under educated even the wealthiest kids are who go to the most expensive schools down here. I never ran into a single Latin sushi eater yet who knew that the crab meat wasn't crab

[10:22] meat at all, but some vastly inferior fish processed to look like crab meat. Whereas first worlders are much more on top of things like that. And later on when I ran into expat Eddie again, who I might add is not the sharpest knife in the drawer, but that hasn't stopped him from making money hand over fist down here. Eddie is your classic risk taker, and that's what I like about him. And that should be a lesson to all you expat wannabes who've got a good idea or two that could translate down here to real money, but you're still sitting on the fence up there in Cleveland. Well, when I asked Eddie how he came up with the idea to have sushi parlors down here in Latin America, because at first glance, it defies all business logic that something like that could even succeed. And he said, Johnny, you just have to remember one thing. If you want a business to work down here, don't reinvent the wheel.

[11:10] Just copy something that's working up in the first world, and be sure to make it look first world when you open up down here. And if your market is that section of the population, that 80%, that don't have much money at all, just make it look absolutely first world, advertise it that way, and they'll come. And if you're marketing to that 10% of the population that does have money down here, just do exactly the same thing. Make it absolutely first world, advertise it that way, and make sure you keep your prices a little high, because you have a much smaller market, and you need to make a good profit. Because down here, when you're dealing with that 10% of the population with the money, it's not about the price, it's about the exclusivity. And the fact that the average guy will never drop 10 or 15 bucks on a sushi plate with only six little California rolls on it, when he can go down to the Burger King or a mom

[11:56] and pop greasy spoon and feed his whole family for that. And the fact is, that 10% of the people with the money down here, want to be sitting in a certain ambience. They want to be sitting with other people who have laptops and blackberries and iPods, and of course, a bodyguard brigade out in the parking lot. The last thing they want to do is go into a restaurant or a kiosk at the mall, and sit down at a table, where there's a possibility that right next door, at the table right next to them, are some common people who make only 300 bucks a month and don't even have a car. Expat Eddie said that there are huge insurmountable social and economic barriers here, and expats who want to go in business can take advantage of that quite nicely. And that's why Expat Eddie, who's been down here 20 years himself, has done quite well for himself too. And just as an aside, Old Expat Eddie had two failed restaurants up in the first world

[12:46] before he came down. And when he came down, he only had three suitcases and $2,000 in his pocket. And now, 20 years later, Old Expat Eddie has his own Cessna, two beach houses, a Porsche Boxster, just for fun, a beautiful young Latin wife, his third one by the way, and his coming down here to Latin America was an impulse move. That's how he tells it anyway, trying to get as far away as he possibly could from his first two wives. And with no particular plan in mind, he landed down here in Central America. And to his way of thinking and mine, he won the lottery in more ways than one. And the only problem I can see with him and his lifestyle now is that he's got three very spoiled young kids, who I'm sure will be living off him for the rest of his life. And you know, that's one of the big problems that Expat men have down here when they marry

[13:35] a young Latin girl and do have kids. As a rule, expats do so well in business down here, even if they were total failures and bankrupt up in the first world before they came down, like Eddie. Even an expat who comes down here on a crummy thousand dollar a month social security check, even a guy like that is making four times as much than the average person down here. Which is another reason why first world men, even older first world men, are in big demand with the ladies. But I'll talk more about that on a future show, so stay tuned. And the thing is, because it's so easy to succeed down here for expats for various reasons which I've gone into many times in this show, anyway, guys like Eddie get married, have kids. And of course, those kids end up going to the most expensive private schools, and who do you think their lifelong friends and major influences in life end up being?

[14:21] The spoiled and entitled kids of the wealthy classes down here. Of course, and why not? Kids with bodyguards and zero ambitions sucking off their parents too, which is the way of the world down here for all the wealthy classes. So that's another reason it's very difficult for expats to raise normal healthy kids down here. Because even if you have the best of intentions, and bring them up with good values and social skills at home, just look at the kind of kids they're going to be going to school with and hanging around with. I tell you, from what I've seen, most of the expat kids down here are as superficial and as lost as the full-blooded Latin rich kids they hang around with. And there's really not much you can do about that because you can't keep your kid locked up in a cage. And to me, because I don't have any kids and can see this thing from the outside looking in, it's a very difficult thing even for the best of parents to bring a kid up down here

[15:10] who doesn't assimilate at least some of those jaded attitudes of the upper 10% they're thrown in with. And even if you're not wealthy and kind of an average expat coming down here living on a pension or whatever, and you end up having a family down here, your kids will still be thrown in with that upper 10% of the population. Because like I said before, first world people and their kids are generally sucked into those upper levels of society because Latin people of all classes throw their doors wide open to first worlders. And that's especially true with the upper classes because for Latins it's a feather in their hat to have first world people as friends. I mean you can look at it like this. Imagine you were at a cocktail party in Cleveland and everybody there was local except one guy who had a heavy British accent. He would be the most interesting guy at the party now, wouldn't he?

[15:56] And if he was the least bit outgoing in no time, he may even have gathered a small crowd of people around him. And we all know that those British guys are a perennial hit with the ladies. You get the idea. And that's what it's like for nearly all of us expats down here, male and female. And for all you expats and expat wannabes, that's how a lot of great business opportunities come your way. You hear things at these parties, from movers and shakers down here, that you never read in the papers or see on TV. For example, expat Eddie told me about a brand new airport renovation and expansion they were doing down in El Salvador a year before it ever hit the papers and fully two years before it happened. And naturally, with that inside information, he was able to lock in a very choice spot for one of his sushi stands, in one of the highest traffic areas in the new airport's

[16:42] causeway. And since only high-end Latins have the money to take airplanes, he precisely hit a bullseye for his market. So you see, expats, if you keep your ears open, can be privy to a lot of inside information sometimes years before the public ever finds out about it. And since it's mostly a closed society up at the top in these third world countries, the wealthier classes live and breathe on inside information, including Latin American stock market and stock market issues. Down here, inside information is how so many people have made their millions. It's no wonder at all how politicians, their families and their friends end up being millionaires many times over since they know way ahead of time when a road, bridge, infrastructure project or a giant shopping mall is going to be built. They know to pick up land when it's cheap before a project like that goes in and they

[17:30] don't have to invest a dime building anything. They just have to sit on it a year or two to wait for the mall development project owners to approach them and offer a sale. That's how the politicians and their friends get rich down here. Besides of course taking kickbacks on construction projects and the general 10-20% skim that they take when any kind of funds arrive into the general coffers. Now as far as expats taking advantage of a little inside information, the reality is there's almost no risk of getting caught and if you do, no one ever gets prosecuted for it, not if they use their own money. And besides I've asked a lot of lawyers down here and no one knows if there even is an insider trading law and when I bring it up, they don't even know what I'm talking about. Anyway, if you happen to pick up on some valuable inside information at a party or from a high-placed friend or whatever, you either act on it or you don't, the risk is yours.

[18:18] For example, a few years ago, expat Eddie told me that he'd heard from a high-placed friend down in Honduras that the government was selling off its cell phone frequencies and bands to private companies and that one of the companies that had locked in a contract way before anyone would ever find out about it was a company called Movistar out of Spain. And Movistar, having won a few contracts in other places in Latin America like Guatemala, Salvador, Nicaragua, and Panama, was registered on the big board in some of the Latin American stock exchanges. And expat Eddie told me to buy. Well, I didn't because I'm afraid of the stock market. I got burned a few times in the States and I learned my lesson. But Eddie was right and when they announced the Movistar contract in Honduras, the stock took off and quickly doubled. So you can see, you do get excellent pieces of inside information down here.

[19:07] Inside information, by the way, that a common guy like me would never get if I lived back up in Chicago. Anyway, living down here in Latin America, I do occasionally get those great tips. And though I almost never act on them, because I'm busy doing my own thing, I just want to let you expat wannabes up there know that just being a first world person down here, you're going to get invited to events and hear certain things that I'm sure could make you rich if you were to act on them and you don't have to come down here with a lot of money. In fact, I can't tell you how many expats I know that have told me rags to riches stories. Many of them coming down here with almost nothing. Some of them escaping a bad situation in the first world by the skin of their teeth, like a divorce or two, or bankruptcy, or creditors. I even know a few wealthy guys who were ex hippies in the 60s who came down here to avoid

[19:54] the Vietnam draft. And now their millionaire hotel and bed and breakfast owners, and all they've got left from their hippie days, are their gray ponytails and their pension for weed. Anyway, a lot of these expats have very good businesses and have become great successes. And most of them came down here with not many concrete ideas at all. They just kept their eyes and ears open, and eventually made a decision to invest what little they had in something or another, and somehow the idea took off. And speaking of inside information, I remember about four years ago, sitting in Expat Eddie's little restaurant in El Salvador, and he came up to me and asked, Johnny, do you have many friends in Guatemala? Because if you do, you might want to ring them up and tell them that they should pull all their money out of Bancafe if they've got an account there. And Bancafe, as it turns out at that time, was the third biggest bank in Guatemala.

[20:42] And I said, why? What's happening down there, Eddie? And he said he had good information from his lawyer that the bank was about to go bust, and even though Guatemala has a depositor's insurance scheme like the FDIC in the United States, if the bank goes bust and you've got your money there, you might have to wait years to get your money back, and even then you might not get all of it. Because you know, this is the third world. So I remember Eddie telling me that, and I didn't think much of it, till I read about Bancafe's collapse in the paper about six months later. And the next time I ran into Eddie, I asked him what happened down there, and he said his lawyer told him this. In some kind of an internal audit, they discovered that one of the ten board members had arranged some very big, uncollateralized loans for friends and family, which is highly illegal, but since nobody really checks up on that stuff with any diligence, it goes on all the

[21:29] time. Anyway, one of those board members' buddy, or buddies, was defaulting on one of those big loans, and it was eventually discovered that a lot of the board members were doing that, making preferred, under-collateralized loans to their friends and family, and a lot of these monies and deals were being routed through offshore accounts that they had in private banks in the Caribbean. So naturally, some of these big defaults were affecting the balance sheet, and eventually it had to get out. And instead of taking the hit, and it probably was way too big a hit to take anyway, because the bank was virtually insolvent, the board members knew that as soon as the news hit the papers, it would be a huge run on the bank. And of course there was, with every depositor big and small, lining up for blocks and blocks around every one of the dozens of branches. Meanwhile, nearly all those board members disappeared from the country, and became fugitives,

[22:15] though a few of them were caught before they could make a clean getaway. And now here we are, four years or more, beyond the time of the bank run, and you still see articles in the paper now and again, telling how people still haven't got their money back, and that some board members are still on the run, and anyway it's just a big mess. And Expat Eddie, just a small-time sushi bar owner down in Salvador, knew about all this at least six months before it happened. And then he told me and a lot of his own Expat buddies in the grapevine. So all you Expat wannabes up there, take note. Latin America is a great test case for the phrase, it's not what you know, it's who you know. And though Expats have a really great chance of making a great success out of themselves, even if they never hear a lick of inside information. Once you do settle in down here, you're going to hear a lot of little interesting tidbits

[23:01] like that. And when you hear them from people in the know, you should take heed. Because even if you don't do a single thing about it, you could lose out. Like for example, if you didn't pull your money at a bank cafe, when you heard Eddie's news. And you know, as fragile as local banks are down here, sometimes I wonder if it was Expat Eddie himself who caused a run on that bank. After all, who knows how many people he told that story to. We'll never know. And by the way, just as an aside talking about sushi again, he never eats sushi either, even from his own restaurant. But he does eat tempura, which is cooked. Which brings me to another food subject, buffets. Lunch and dinner buffets are very big down here, just like they are up in the first world. It seems like every restaurant that's not a fast food restaurant has one. And you know, the trend started quite a few years ago when the big first world hotels

[23:47] like Marriott, Hilton, Radisson and the like. Put on all those big all you can eat Sunday buffets for 10 or 15 bucks a person. But those big first world hotel buffets also have first world food sanitation standards. You know, where all the servers have hair nets and gloves. And they have plastic or glass food guards so you don't drool in the super salad when you're spooning it out. And they actually wash the raw salads in a little disinfectant and purified water before they serve it to you. And when they clean the plates in the silverware, they're put into dishwashers that have a steam sterilization cycle. Now in the big locally operated restaurants, and even in the small corner mom and pop ones, when you check out the buffet line, you're not going to see a lot of that and you're not going to know what's going on in the kitchen. So the basic rule here is, if you go to one of these buffets at a locally owned and operated

[24:35] restaurant, don't eat anything that looks a little dried and crusty around the edges, like it's been sitting out for a while, and try not to eat anything that doesn't have a flame burning under it at that very moment. In other words, you want everything nice and hot. And please don't eat anything that looks like it has any mayonnaise in it, like potato or egg salad, and skip the fruits unless you can cut them and peel them yourself. And it's a very good idea to give your silverware and your plate a good wiping with your napkin or serve yet before you eat, even if you look like a neurotic idiot in front of your friends when you're doing it. And what's big at a lot of lower and middle class restaurants for lunch is what they call an executive menu where they give you a choice of a couple of plates for a fixed price of around five bucks, where you choose your main entree, your meat, chicken or fish, and they give you soup and rice and a beverage and dessert, all included for that four or five

[25:23] bucks. Now the problem is that sometimes they make up these executive lunches way ahead of time. They're not prepared as you order them, so they may be sitting around for hours on a counter or in the sun in the kitchen, a nice movable feast for flies and bacteria, but you're never going to know that. Because you'll get it nice and hot at your table after they've stuck it in a microwave. Another thing with these so-called executive lunches, you'll get a beverage, lemonade, orange juice, rosahamaika, tea or whatever, poured by the waitress into a glass from a big pitcher. And I'm advising you expats and expat wannabes that you should never drink that beverage. First of all, if your glass doesn't have ice in it, the pitcher that it came from does. And even if they say they purify the water that they make the ice from, they almost never change the water filters regularly, so it's probably loaded with bacteria.

[26:10] And those locally-owned and mom-and-pop restaurants don't have dishwashers that sterilize the forks and the plates, so that stuff's always being touched by people who don't have the custom of washing up much, even after they've been to the bathroom. Because in the vast majority of these restaurants, the workers are not allowed to use the bathroom that the clients use, and it's a rare employee's bathroom that has any towels or soap in it, for that matter toilet paper. So, you can see where I'm going here, and it's not very pretty. And if you think I'm being a little bit over the top on this issue, just listen to what Gary Nall says he does when he travels and eats out. He carries a small bottle of spray disinfectant with him, which I haven't resorted to yet, but it's a good idea and I think I'm gonna start. Anyway, if you're in one of these local or mom-and-pop restaurants, and you think I'm being excessive, just remember it's well known that one of the most filthy things we have

[26:57] on us is our paper money. And however bad you think your US dollars are contaminated with filth, dirt, and bacteria, third world currencies are three times worse because people rarely wash their hands, and bills are often moist and drenched in sweat, which is a perfect breeding ground for bacteria. That said, when you're at a restaurant down here, watch how waiters and waitresses take the money from one table, and walk right over and serve a plate of new food to another table, grabbing the plates and the forks and knives with their hands, right after they touch that dirty money. I know that's something you'd rather not think about, but you should. You've been listening to The Expat Files, living in Latin America, and don't forget you can email me on anything at all about Latin America.

[27:46] The Expat Files at gmail.com. That's theexpatfiles at gmail.com. See you next time. Nos vemos!