Argentine Economy [Archive] - Page 2

Rioman

06-03-08, 12:38

Here is article that was referring to - obviously it does not mean that anything changed: By Eliana Raszewski.

May 29 (Bloomberg) -- Argentina's government, bowing to pressure from farmers, said it will impose a cap on variable export taxes for grains and oilseeds to end two months of protests that had disrupted trade and caused food shortages.

The maximum levy, which previously rose as high as 95 percent depending on prices, was reduced for corn, soybeans, wheat and sunflower seed when prices rise to specified ranges, Cabinet Chief Alberto Fernandez said today during a press conference in Buenos Aires. Tax rates will remain in place at prices below those levels, he said.

'We hope this announcement puts an end to the conflict with farmers,'' said Fernandez in a press conference in Buenos Aires. 'We want farmers to keep producing.''

The government sought to end a conflict that led farmers to resume demonstrations yesterday until June 2, the third protest since the new tax system was announced in March. Ricardo Buryaile, vice president of the Argentine Rural Confederation, said announcement won't end the dispute.

'The protests will continue as it was scheduled,'' said Buryaile in an interview with Todo Noticias television channel.

Grain trucks stopped arriving at Argentina's main ports after farmers resumed the blockades yesterday. The Rosario Board of Trade said on its Web site that no trucks arrived at regional ports overnight, compared with an average of 5,532 trucks a year ago. Truck arrivals are down 8 percent so far this year because of the two-month dispute with farmers, the board said.

Tax-Rate Cut.

The government reduced the maximum export tax on soybeans to 51.7 percent from 55.9 percent when prices reach $700 a metric ton, and will be 52.7 percent rather than 58.5 percent when prices reach $750, according to a spreadsheet of the changes provided by the economy ministry. The rate remains unchanged for prices up to $600, when the tax will be 49.3 percent.

Soybean futures closed today on the Chicago Board of Trade at $13.23 a bushel, or $486 a ton, the ministry said. Soybeans reached a record $15.865 a bushel, or $582.93 a ton, on March 3.

The sunflower-seed tax was cut to 51 percent from 54.6 percent when prices are at $800 a ton, and will be 52.7 percent rather than 59.1 percent when prices are at $900, the economy ministry said.

Corn, Wheat.

The tax on corn was cut to 45 percent from 53.8 percent when prices reach $400 a ton, the ministry said. They will be unchanged at 40 percent when the price is $300 a ton. Corn futures closed today at $5.8275 a bushel, or $229.42 a ton, down from a record $6.39 a bushel, or $251.56 a ton, on May 9.

The rate for wheat was reduced to 37.9 percent from 39.8 percent when prices reach $500 a ton, and will be unchanged at 35.4 percent for prices at $450, the ministry said. The rate for $600 wheat will be 41.6 percent, down from 46.3 percent. Wheat futures in Chicago closed at $7.415 a bushel, or $273.19 a ton, down from a record $13.495 a bushel, or $495.85 a ton, on Feb. 27.

'The announcement is more of the same we had,'' said Luciano Miguens, president of the Rural Society, the country's biggest farm group. 'It's surprising that they didn't ask us for an opinion.''

To contact the reporter on this story: Eliana Raszewski in Buenos Aires eraszewski@bloomberg. Net

Last Updated: May 29, 2008 20:14 EDT

Tessan

06-04-08, 19:23

The sliding scale tax on farmers, is destroying the Argentine Future market. Farmers are no longer selling contracts to borrow money, since their risk is up, but there reward is way down, since the tax is a sliding scale.

http://www.bloomberg.com/apps/news?pid=20601086&sid=a6MzIy5dpIkU&refer=latin_america

Tessan

06-05-08, 20:37

This seems strange to me. The Truckers are blocking the roads, because they are mad about the Farm Strike. Somehow by blocking the roads they will get the farmers to end there strike? Who do you blame for the food shortages? The farmers or the truckers? The farmers are no longer blocking food coming into the cities, since they want the support of the population. So the Trucker will, so they don't get that support? This is funny Argentine Logic, I think.

-----------------------------------------------------------------

•Reuters.

•, Thursday June 5 2008

By Nicolas Misculin.

BUENOS AIRES, June 5 (Reuters) - Roadblocks manned by hundreds of truckers on Thursday in Argentina's heartland threatened to revive food shortages as a deadlock between protesting farmers and the government dragged on.

Farmers are staging their third strike in nearly three months over higher export taxes on the country's top crop, soybeans. They are withholding grains from market through Sunday, and some truckers frustrated with the halt to commerce have blocked highways to press for a solution.

Fewer products are arriving at the Buenos Aires Central Market, where most of the city's fruits and vegetables are sold.

"There's been a small drop, about 70 percent of goods are arriving," a source at the wholesale market said on condition of anonymity.

Farmers blocked highways during their first, wide-scale strike in March, sparking shortages of such staples as beef and dairy products on supermarket shelves. They have since changed tactics to avoid alienating city dwellers.

"The situation has grown complicated for the truckers. The government should pay more attention. This is the result of not having resolved the farm problem," Eduardo Buzzi, president of the Argentine Agrarian Federation, told reporters.

Television images showed hundreds of trucks parked on rural highways, and dairy sector leaders warned that this new twist to the farm conflict could spoil millions of liters of milk.

"This strike on the highways blocks all economic activity and once again threatens to cause shortages and higher prices. This has become a strike against the Argentine people," Interior Minister Florencio Randazzo told local radio.

The minister later said in a televised press conference that the government would not cede ground on the rate of grains export taxes, but was willing to discuss future farm policy once the strike ended.

Farmers first took to the streets after the government announced a new sliding-scale export tax system for grains and oilseeds, which raised levies on soy and sunseed products.

The government defends the tax hike, saying it helps curb inflation while protecting consumers. But farmers call the rates confiscatory and are venting after several years of heavy state intervention in the grains and livestock markets.

The bitter conflict has caused a former economy minister to resign and dragged President Cristina Fernandez's approval ratings down, just six months after she took office.

It has also pressured the local currency, forcing the central bank to sell its foreign reserves to sustain the peso. (Additional reporting by Lucas Bergman; Writing by Hilary Burke; editing by Jim Marshall)

=============================================

Don't think the trucker are on the side of the farmers, since when the farmers where blocking roads earlier, they had conflicts with the truckers. At one point the truckers threaded to break throw the farmer lines, and end the blockade, when the farmers announced they where armed, and would defend themselves. There is some legal stuff going on against one of the farm leader because he said that then, think it was DeAnglio, or something like that. Forget his name now. Being accused of inciting valance. The truckers then said, that if they could not pass, they would block all roads, so no one passes.

By blocking the roads, then or now, do the truckers help the Farmers by putting more pressure on the government to settle? Or help the government by getting the public mad? If the public gets mad, who do the blame? Gov? Truckers? Farmers? I am confused.

Dickhead

06-05-08, 20:44

I blame greedy consumers for the strike. What right do they have to expect food on the grocery store shelves? If this is a problem, they should take some initiative and grow some food themselves. Granted it could be problematic to have cattle in a one-bedroom apartment in Capital Federal, but why not a few chickens? Even a large pig would fit in a one-bedroom apartment. It is time to stop blaming other people and become more self-reliant. We have avocados and lemons on the trees here so we can at least make guacamole. As far as chips for the guacamole, I am thinking maybe paint chips. Think about all the chipped paint you see everywhere in Buenos Aires. Also we have some quiñotos (kumquats) so we can have freshed-squeezed juice. Of course it takes about 50 kumquats to make a glass of juice but at least we have home-grown alternatives.

Aqualung

06-05-08, 21:19

There is plenty of room in Palermo and the surrounding parks for cattle. Someone could even sow a few acres of wheat. Breed fish in the Palermo lake. You have all probably seen weeds and even trees growing on roofs. It would just be a question of planting lettuce there.

Skifozo

06-05-08, 22:05

I prefer a beer and pussy diet of which there is plenty of both in Recoleta

Argento

06-06-08, 01:08

Granted it could be problematic to have cattle in a one-bedroom apartment in Capital Federal, but why not a few chickens? Even a large pig would fit in a one-bedroom apartment.There's plenty of house pigs in this 'burg. You don't have to look too far.

Argento

Andres

06-06-08, 20:30

Tessan

06-06-08, 20:52

I surmise that truckers got a wink from the government to worsen the situation, but that's just a surmise. After all, truckers cannot cope with the sharp decrease in activities that the lockout provokes on them.

All the parties are "playing chess". After the first images on TV of rotten milk spilled at the side of the roads, the farmers lost a lot of support and understood that, if they wanted to continue the lockout, they would have to avoid shortages to the population. Truckers are forcing such shortages, and media groups (even if tilted to the farmers side) cannot avoid to show the milk being wasted again. Farmers lose face that way because, to the eyes of the population, if they create chaos to get their way, truckers / doctors / police officers / industrial tycoons (name your favorite sector) have the same right to do so, and chaos only favors the iron fist of the government to impose its policies.

AndresIt is strange that the Argentine people will blame the farmers for the rotting milk, when the farmers want to sell it, and the truckers are not letting them.

If there is allot of chaos, it can justify they government using drastic measures to end the Chaos. The measures will be focused on the Farmers, since the truckers are on the governments side. There might be some logic behind this after all. The K's want to force something to happen.

Dickhead

06-06-08, 21:50

"All the parties are "playing chess". After the first images on TV of rotten milk spilled at the side of the roads, the farmers lost a lot of support and understood that, if they wanted to continue the lockout, they would have to avoid shortages to the population. Truckers are forcing such shortages, and media groups (even if tilted to the farmers side) cannot avoid to show the milk being wasted again. Farmers lose face that way because, to the eyes of the population, if they create chaos to get their way, truckers / doctors / police officers / industrial tycoons (name your favorite sector) have the same right to do so, and chaos only favors the iron fist of the government to impose its policies."

Andrés, I totally respect your point of view. But why can't Argentineans stop fucking themselves? Why is such a relatively well-educated country so inefficient? I understand this whole idea of "losing face" but isn't it time to move on from that? Especially now with the global food situation. There is opportunity to be had and it seems to me that Argentina could have a narrow window of time to benefit from that, and it seems like they don't want to.

I am an "izquierdista" but if I were running the country I would send police / military force to keep the roads open. Closing the roads and fucking the general citizenry, I can't support it.

BadMan

06-06-08, 22:59

if I were running the country I would send police / military force to keep the roads open.I co-sign.

Regards,

BM.

Tessan

06-06-08, 23:19

If I were running the country I would send police / military force to keep the roads open. Closing the roads and fucking the general citizenry, I can't support it.The truckers are closing the roads now, not the farmers. They are probably doing it, because the K's ask them too, to put pressure on the farmers. When the people get mad enough, there will be pressure on everyone and the K's will blame the farmers. This might be a tactic to get the farmers to give up, or settle for some token cutting of the tax. The farmers are not held together that strongly, they have different interest. Different types of farmers have different problems. The Milk producers right now, are having there milk spoiled, and they don't care about soy taxes. The K's already said they will help some of the smaller farmers with give backs. The K's want to divide the farmers. By having the truckers put more pressure on the farmers, it will cause divisions that already exist between the farmers to show up faster.

The K's are not going to force the trucker off the road, since there doing there bidding. If the K's ask them to leave the roads, they will. The Trucker union showed up at CFK really a few months back.

Tessan

06-06-08, 23:30

After my last post, I went to read news, and found this.

BUENOS AIRES, June 6 (Reuters) - Argentine farm groups decided to end their latest protest against soy export taxes on Monday as planned, after a meeting where they discussed possibly extending the anti-government action.

The farm groups made the announcement on Friday as frustrated truckers began blocking rural highways to press for a solution to the stand- off between the government and the agricultural sector, stoking fears of food shortages.

"This is a new contribution from Argentine farmers in search of solutions and social peace," the country's four main farm groups said in a news release.

Farmers in Argentina, a major world grain and beef exporter, have been holding back grains from market since May 28, in their third protest in as many months against government farm policy.

The prolonged conflict between the agricultural sector and the government has hit Argentine bond prices, sparked a demand for safe-haven dollars and hurt the trucking industry as well as paralyzing local grains markets.

President Cristina Fernandez's center-left government introduced in March a sliding-scale system for grains export taxes that hiked levies on the top crop, soybeans.

President Fernandez slammed the farmers in a Thursday night speech, saying that only the wealthy could afford to stop working for 90 days.

The country's top Roman Catholic bishops asked the government this week to call for a "transparent and constructive" dialogue and urged protesting farmers to change their methods.

The roadblocks forced several truckers transporting milk to dump their spoiled goods, rattling a country where nearly one in four people is poor. Some food industry officials warned on Friday that beef and dairy shortages could be felt in the coming hours if protests continued.

Argentina is one of the world's top suppliers of corn, soybeans, wheat and beef. (Additional reporting by Nicolas Misculin; Writing by Hilary Burke; Editing by Christian Wiessner)

Tessan

06-07-08, 02:58

If the protest is over, wonder what going to happen on Monday to the peso? Will the central bank let it go up? Or will they try to bring it back down, by selling peso, to around 3.15 as they have been doing for the last few years? If they let it go up, it might mean they want the peso to strengthen to fight inflation. If they bring it down, it means they where forcing it up, to punish the farmers and anyone shorting the peso during the strike.

Argento

06-07-08, 11:40

I am an "izquierdista" but if I were running the country I would send police / military force to keep the roads open. Closing the roads and fucking the general citizenry, I can't support it.A leftist in the mode of Stalin! I enjoy your posts but give us a break. Your solution is pure fascism. The farmers are fighting for economic survival. Remember that they are being taxed on receipts not profits and the retension impost is just the start. With all your learned talk on investment strategy and good retuns on capital, farmers tradionally have less than a 3% return on capital. Untill this boom in cereals throughout the world, Argentine farmers have been effectively without income. Local inflation and poor export markets made them very uncompetitive. Remember there is no farm support here. That enabled US farmers to survive 2 decades of almost nil returns.

So I guess as a stock invester, you would be more than happy to contribute 42% of any gross sales that you make out of your portfolio, and then if there were profits, pay income tax. All the other imposts that exist here but don't in the US still must be paid. No matter how efficiently the farmers have become, the woeful transport system adds enormous on-costs to their cost of production and is completely out of their control. The sight of 2000-3000 grain trucks and trailers waiting 2 days to discharge is a sympton of inefficencies that would not be tolerated in other countries.

If they don't win some common sense concessions, they will not be able to survive as producers of soy and will once again return to producing what gives them the best returns. And it won't be soy.

Remember that the roots of the Peronistas are in fascism, and under the Kirchners, the political selection process has been put under the control of the party infrastructure. So effectively you cannot get on a ballot without approval from the party machine. Congress no longer has control of the money and budget. Individual freedom, not that it has ever been great in my experience, is steadily being eroded. The great farm rip-off is a device to enrich the political aims of the Kirchners and their crony capitalism mates such as Askenasy. Always remember that the end game here is the accumulation of wealth from corruption. No ifs or buts. It might start out with idealism but quickly degenerates into the main game. And the Kirchners are carbon copies of their predecessors. The only changes to their people's prospects are negative. Poverty has increased by close to 2 million on their watch. And property crime has close to doubled.

I don't think the preliminary return of Fascicm a la Kirchner is indicating that it is a means of reviving the lives of Argentineans. So I find your wash and wear solution completely unaceptable.

Argento

Tessan

06-08-08, 00:15

Truckers will stay on the route until farmers begin to sell grains again, TN said. Some shops are beginning to run out of goods, the television station said.

http://www.bloomberg.com/apps/news?pid=20601086&sid=avIv0ttcVYP8&refer=latin_america

Dickhead

06-08-08, 00:23

The truckers are closing the roads now, not the farmers. I don't give a shit if the truckers, the farmers, or the Seven Dwarves are blocking the roads; I would send in the military and / or the police to keep the roads open. Blocking the roads is fascism. It is not peaceful protest. Picketing the roads, talking to people at the toll booths, that is peaceful protest. Interfering with the food supply is blackmail.

Tessan

06-08-08, 00:25

I don't give a shit if the truckers, the farmers, or the Seven Dwarves are blocking the roads; I would send in the military and / or the police to keep the roads open. Blocking the roads is fascism. It is not peaceful protest. Picketing the roads, talking to people at the toll booths, that is peaceful protest. Interfering with the food supply is blackmail.You would not if you where the one who ask them to be there. The K's ask them to block the roads.

Dickhead

06-08-08, 00:41

You would not if you where the one who ask them to be there. The K's ask the to block the roads.That is why I should be president and not her. Plus my thighs aren't as fat.

Tmontana

06-09-08, 02:35

Answer:

1. Replace the government with a real democratic option.

2. Reduce taxation in key areas - farming being one, transport taxes another, income taxes yet another.

3. Peg the peso to gold.

4. Balance the budget.

5. Increase government investment in education.

6. Fix the banking systems and allow for easier foreign investment and money movement.

7. Make it easier for foreigners to invest in argentina.

8. Over ten years eliminate corporate capital gains taxes. Institute a $800kUSD lifetime capital gains tax exemption for argentinians.

For a start.

Jackson

06-09-08, 04:21

Dickhead

06-09-08, 11:44

"Peg the peso to gold." Now that's funny!

Miami Bob

06-09-08, 13:15

Tessan

06-09-08, 15:48

Hi,

Actually, I believe that they have a budget surplus. How else is it that they have the funds to prop up the Peso? International borrowing? ROTFLMAO!

Thanks,

JacksonCentral bank money is not supposed to be considered part of the government's budget. The central bank is not supposed to give or lend money to the gov directly. (This might not be true in Argentina, don't know their laws) The reason for this is the the central bank can create money, as much as it wants. If the government depends on this money, it will force the bank to create more and more money. This is what is happening in Zimbabwe where Inflation is now more than 2 million per cent per year according to Times (http://www.timesonline.co.uk/tol/comment/columnists/guest_contributors/article4092397.ece Zimbabwe central bank just prints money, to pay gov bills.

The central bank had about 50 billion dollars in reserves before the farm strike. The reason they had so much, is that they where selling peso and buying dollars. They where trying to keep the peso weak. Their was also a trade surplus, mainly because of the farmers. The farmers had to change their Euros, and Dollars back into peso, when they got paid. The central banks foreign reserves grew. With Argentina's trade surplus, the peso should have been closer to 2.15 instead of 3.15 to the dollar. The Central Bank just kept selling peso for Dollars, and that's why they got to 50 billion before the strike.

The government says it has an $869 million dollar budget surplus this year, as tax income rose by more than 50 percent.

Don't know if the gov numbers can be trusted. I posted on 5-23 this.

The government says it has an $869 million dollar budget surplus this year, as tax income rose by more than 50 percent. Also that the central bank holds about 50 billion US dollars in reserves. They spent about a billion holding the peso, so it probably 49 now.

With these large budget surpluses, why is the governments dept load going up? It make no sense. I agree with Sidney, this gov is lying about inflation, so it can pay less on inflation-protected bonds, thereby stealing money from people who brought those bonds. Its lying about the poverties figures, since the gov. Calculates the poverty figure using 8% inflation. If you assume 20% inflation, poverty is way up in Argentina. Inflation is more like 30% , anyone who been here a while can see it. So Poverty is Way up.

So if the gov has such a large surplus, why is the dept load going up where is the money going? Anyone know? Or is it a lie?

Also with the Farm strike, gov income going to go down. Does not look good as of today.

Andres

06-09-08, 19:42

It is strange that the Argentine people will blame the farmers for the rotting milk, when the farmers want to sell it, and the truckers are not letting them. "Farmers" wanted to sell their milk, but not their wheat or soy (here we should discriminate between different type of farmers, since the ones selling milk are not necessarily the ones exporting soy) They did so to hurt the govt budget, so their attitude was far from innocent, hard-working guys who only want to work and obey the laws.

Andres

Andres

06-09-08, 19:50

Andrés, I totally respect your point of view. But why can't Argentineans stop fucking themselves? Why is such a relatively well-educated country so inefficient? I understand this whole idea of "losing face" but isn't it time to move on from that? Especially now with the global food situation. There is opportunity to be had and it seems to me that Argentina could have a narrow window of time to benefit from that, and it seems like they don't want to.

I am an "izquierdista" but if I were running the country I would send police / military force to keep the roads open. Closing the roads and fucking the general citizenry, I can't support it.The main issue being disputed here (some media and people mentioning it) is the ability of the government to levy taxes to the rural sector. Due to technological and business reasons, it is becoming increasingly difficult for the agricultural sector to evade taxes (just a little harder, not impossible)

The problem with sending the police / gendarmería / etc is that they then to go far beyond their mandate and the govt ens up paying the bill. Repression ate up the De la Rua presidency and hindered Duhalde to present to elections on 2003.

I guess that CFK will send the Gendarmería only after the credibility of the protestors decreases sharply.

Andres

Andres

06-09-08, 20:21

A leftist in the mode of Stalin! I enjoy your posts but give us a break. Your solution is pure fascism. The farmers are fighting for economic survival. That's plainly not true. Sales of SUV got a record high last February on Pergamino, Lincoln, Venado Tuerto and other farm districts. They are making A LOT of money now. Too far from being on the verge of bankrupcy.

Remember that they are being taxed on receipts not profits and the retension impost is just the start. With all your learned talk on investment strategy and good retuns on capital, farmers tradionally have less than a 3% return on capital. Untill this boom in cereals throughout the world, Argentine farmers have been effectively without income. True, but after 2001/2002, many small and medium ones received a "lifevest" from the Banco Nación and avoided seizure. Not to count subsidized gasoil, and not to count their historical contempt to honour their fiscal obligations (unregistered employees, child labor, under-the-table sales, etc)

Local inflation and poor export markets made them very uncompetitive. Remember there is no farm support here. That enabled US farmers to survive 2 decades of almost nil returns.Not true. There are actually subsidies to farmers in Argentina, and we actually live on a World food crisis that skyrocketed prices.

So I guess as a stock invester, you would be more than happy to contribute 42% of any gross sales that you make out of your portfolio, and then if there were profits, pay income tax. All the other imposts that exist here but don't in the US still must be paid. Sure? The justice detected several criminal gangs made of AFIP employees, judges, farmers, etc, devoted to issue "loading cards" (cartas de porte) to ordinary people from very indigenous income so farmers can use them to avoid taxes. Not to count the 4 million tons of wheat that don't add up.

If they don't win some common sense concessions, they will not be able to survive as producers of soy and will once again return to producing what gives them the best returns. And it won't be soy.Value of land doubled and even tripled during the last 2 years. Do you really believe that raising taxes from 33% to 45% would put them out of business? I do not.

Remember that the roots of the Peronistas are in fascism, and under the Kirchners, the political selection process has been put under the control of the party infrastructure. So effectively you cannot get on a ballot without approval from the party machine.That's not true. First, people like Macri (not a peronista at all) can get into high level positions, something not likely on Mussolini's Italy. And second, guys like Schiaretti and Reutemann can voice up their disagreement inside Peronism (not my cup of tea at all, but complex enough to easily label it as fascism)

Congress no longer has control of the money and budget. Individual freedom, not that it has ever been great in my experience, is steadily being eroded.Sure? How then happens that farmers can voice out their discomfort? How can newspapers like La Nacion and such continue to operate? Maybe your INTERESTS have been eroded, but that's another issue.

The great farm rip-off is a device to enrich the political aims of the Kirchners and their crony capitalism mates such as Askenasy. Always remember that the end game here is the accumulation of wealth from corruption.That's the typical argument of the evader. He needs to dislegitimate the right of the government to levy taxes. Argentina is pretty corrupt, but at least some money from taxes goes to pay police officers, doctors, teachers, etc.

And the Kirchners are carbon copies of their predecessors. The only changes to their people's prospects are negative. Poverty has increased by close to 2 million on their watch. And property crime has close to doubled.I don't buy the argument that "everything is the same". Kirchner isn't Menem, clearly (again another argument to justify criminal behaviors) Poverty actually decreased between 2001 and 2008 (other problems raised, but that's a different issue)

Andres

Andres

06-09-08, 20:45

The K family will have to become more autocratic. The socialist governor [further to the left thaN THE k'S] of Santa Fe offers to mediate--Dona Cristina ignores him. This is not about the left vs the right, as Syd says: it is a grab for raw power and the $$ to finance the power grab.

The idea that the farmers may not economically be able to plant, is too frightening to consider. It takes three years of investment to produce a young cow for slaughter. If there is no profit to invest in the production of cattle, argentines will be eating Brazilian beef three or four years from now.

There is wealth enough in the campo to move 300,000. People to Rosario. Dona Cristina says, "let them eat cake" Unfortunately the cake may be baked with imported wheat, if they destroy the argo industries here.

This is not a good scenereo. Will the wealthy property owners, slaughter house owners and industrialists permitt the K's to do this? I dout it. Will the K's compromise at some point, I hope so.Look, I learned to be vary wary of what people say. I prefer, as a fake Agatha Christie's inspector, to find little clues that shed some true light.

"Farmers" (a very complex category) may claim whatever they want, but reality proves that.

- Capital and consumables expenditures boomed on the last 5 years on rural regions.

- Government offered small and medium farm companies to refund the extra tax only if their registered on the ONCAA. Of course, they have to prove that they are to day on fiscal obligations. Out of more than 62,000, only 114 registered.

Now, CFK didn't managed this issue properly and committed a lot of mistakes, but she was elected 6 months ago with more than 45% of votes, more than 20 points from Carrió. She is the legitimate president (many people may not like it, but that's reality) and has the right to set the economic policies of the federal government. Not convincing? Elections are 3 years away and voters will then be able to choose differently.

My take is that "farmers" cannot impose their policies through the legitimate way (elections) since all their really care about is their pocket and wouldn't get votes beyond some middle and upper classes. And since militaries (thanks God! Are out of the political picture, their only tools to get their way is financial pressure (such as the one they did with Alfonsín, but not useful now with strong reserves and huge fiscal surplus) or lockouts such as the current one.

Let's see how things evolve.

Andres

Andres

06-09-08, 20:59

Central bank money is not supposed to be considered part of the government's budget. The central bank is not supposed to give or lend money to the gov directly. (This might not be true in Argentina, don't know their laws) The reason for this is the the central bank can create money, as much as it wants. If the government depends on this money, it will force the bank to create more and more money. This is what is happening in Zimbabwe where Inflation is now more than 2 million per cent per year according to Times (http://www.timesonline.co.uk/tol/comment/columnists/guest_contributors/article4092397.ece Zimbabwe central bank just prints money, to pay gov bills.

[snip]

With Argentina's trade surplus, the peso should have been closer to 2.15 instead of 3.15 to the dollar. The Central Bank just kept selling peso for Dollars, and that's why they got to 50 billion before the strike. Central Bank money wasn't supposed to be freely available to the government. In fact, during the 90s, BCRA became "totally" independent. I say "totally" because most of its directory was filled with former bankers, so when the crisis hit, Cavallo and the successor of Pedro Pou tweaked the BCRA regulations and allowed to eliminate "encajes" (the minimum money banks have to leave on BCRA in order to face financial crises and have liquidity) and let banks transfer money abroad before the crash (I mean banks and all people directly and indirectly connected to banks or who had good connections)

That was a move to save banks as much as possible from the unavoidable crash that came in Dec. 2001. Such lack of independence helped Duhalde to freeze the BCRA act and intervene it back in 2002/2003.

Andres

Tessan

06-10-08, 00:32

That's plainly not true. Sales of SUV got a record high last February on Pergamino, Lincoln, Venado Tuerto and other farm districts. They are making A LOT of money now. Too far from being on the verge of bankrupcy.

AndresIt depends what you mean by record high sales. I remember hearing about the SUV sales, when I was watching the news in BA, but no one gave a number. CFK mentioned it in her speech I think. 1 more then the last high is a record. It really depends who's is buying the SUVs' and why. 4 wheel drive helps on dirt roads or off road. If it's large producers who make up less then 15% of farmers, it makes sense. It still means the smaller producers are getting harmed.

The best policy is to let people make money, to encourage more production, which will over the long run, increase gov revenues. Don't know what level of tax that is, but at 35% their where no protests.

Daddy Rulz

06-10-08, 15:33

''The duties will stand''! ''Extra revenues to the destitute''! --------Sid,''Yeah right, who are they trying to shit''?Some of this shit is nothing more than "you're making money and we want it, so we will tax your profits and steal them."

Exon123

06-10-08, 20:14

http://www.youtube.com/watch?v=9kYtHBL-1e4&feature=user

Interesting.

Exon

Andres

06-10-08, 20:47

It depends what you mean by record high sales. I remember hearing about the SUV sales, when I was watching the news in BA, but no one gave a number. CFK mentioned it in her speech I think. 1 more then the last high is a record. It really depends who's is buying the SUVs' and why. 4 wheel drive helps on dirt roads or off road. If it's large producers who make up less then 15% of farmers, it makes sense. It still means the smaller producers are getting harmed.

The best policy is to let people make money, to encourage more production, which will over the long run, increase gov revenues. Don't know what level of tax that is, but at 35% their where no protests.Small producers are somewhat right on their claims (after all, CFK didn't honored her promise of creating the undersecretariat of familly agriculture nor did she call for a long-term policy before the protests) However, I doubt that guys like Buzzi or De Angeli are really struggling for survival. They didn't react that way during the 90s, despite the unfavorable economic scenario back then (lots of seizures)

Some analysts argue that many small producers are getting harmed because of the oligopolistic nature of the commercial chain, from which they receive just a few pennies for every dollar, but such situation is far from despair.

I agree that the government should let people make money, but it also has to enforce tax and employment laws.

Andres

Argento

06-11-08, 00:22

However, I doubt that guys like Buzzi or De Angeli are really struggling for survival. They didn't react that way during the 90s, despite the unfavorable economic scenario back then (lots of seizures)

Some analysts argue that many small producers are getting harmed because of the oligopolistic nature of the commercial chain, from which they receive just a few pennies for every dollar, but such situation is far from despair.

I agree that the government should let people make money, but it also has to enforce tax and employment laws.

AndresThe retensions are not taxation. If they were they would be illegal and against the law. What they are is a very good attempt to suck the life blood from the Kirchner's 'class' enemies. And make no mistake, it is a class war. What the Kirchner's and the rest of their breed fail to grasp is that the only really productive sector in Argentina is the agricultural sector. I'd hazard a guess that it produces upwards of 60% of the export income. The other 40% is not really all that profitable as it is with Mercosur partners and the money is really off-set against imports such as cars, car parts and the like. And not really taxed. My guess is that with this current dispute combined with the drought, the coming season will see a lot of farmers being very wary on what they do. Production was down 20% this past year due to the drought. The Kirchners jacked up the retensions to ensue their net receipts were the same as the previous year. They really are venal bastards. I guess production will be way down and those that can afford to, won't do any planting.

And Andres, even if farmers are successful and not poverty stricken, they still have the same rights of protest as those that are not so well off.

Argento

Andres

06-11-08, 01:49

The retensions are not taxation. If they were they would be illegal and against the law. What they are is a very good attempt to suck the life blood from the Kirchner's 'class' enemies.Look, life is far from simple and linear. Retentions wouldn't exist if the AFIP had the iron-fist arm of the IRS. Are retentions questionable on constitutional terms? Probably. But what other tools have the government to raise money when evasion remains as a pervasive rural corporate behavior?

And make no mistake, it is a class war.Provided that different social sectors dispute wealth distribution, yes, it is a "war", but far from a class war. Hopefully, not bloody.

What the Kirchner's and the rest of their breed fail to grasp is that the only really productive sector in Argentina is the agricultural sector. That's not true. The agricultural sector only makes up of 6% of the GDP, and less than 40% of exports. History proves that countries that want to become moderately independent and "serious" don't base their economy on exporting primary sector goods.

I'd hazard a guess that it produces upwards of 60% of the export income.Instead of hazarding, why not getting actual figures? Crop exports don't add up to ARS 30B.

My guess is that with this current dispute combined with the drought, the coming season will see a lot of farmers being very wary on what they do. Production was down 20% this past year due to the drought. The Kirchners jacked up the retensions to ensue their net receipts were the same as the previous year. They really are venal bastards. I guess production will be way down and those that can afford to, won't do any planting.Business is business. If farmers can make money planting, they will despite high retentions. There are dozens of books describing how difficult is to do business in China as a westerner (bribes, corruption, regulations, communist bureaucracy, etc) and foreign investors continue to jump in that train. If there are profits to get, they will.

And Andres, even if farmers are successful and not poverty stricken, they still have the same rights of protest as those that are not so well off. Protesting and forcing a stringent lockout are not the same thing, specially if the latter provokes a shortage of first-need goods.

Andres

Tessan

06-11-08, 13:40

That's not true. The agricultural sector only makes up of 6% of the GDP, and less than 40% of exports. History proves that countries that want to become moderately independent and "serious" don't base their economy on exporting primary sector goods.

AndresIn 2007, agricultural output accounted for 10% of GDP, and nearly one third of all exports. Soy and vegetable oils are major export commodities at 32% of exports. Wheat, maize, oats, sorghum, and sunflower seeds totalled 7%. Cattle is also a major industry. Beef, milk, leather products, and cheese were 6% of total exports. Sheep and wool industries are important in Patagonia, pigs and caprines elsewhere.

http://www.indec.gov.ar/

Schmoj

06-11-08, 14:57

In 2007, agricultural output accounted for 10% of GDP, and nearly one third of all exports. Soy and vegetable oils are major export commodities at 32% of exports. Wheat, maize, oats, sorghum, and sunflower seeds totalled 7%. Cattle is also a major industry. Beef, milk, leather products, and cheese were 6% of total exports. Sheep and wool industries are important in Patagonia, pigs and caprines elsewhere.

http://www.indec.gov.ar/I believed everything you wrote until you cited something at '. Gov. Ar'.:-)

Tessan

06-11-08, 16:02

Total inflation for the first 5 months of 2008 was 4%! Yeah right again! Interestingly, the INDEC staff wants a 35% raise! Could it be?--Lie about inflation and extort a huge raise!I am not defending their number, my only point was that Andres number where off, even by Argentines gov numbers.

Tessan

06-11-08, 17:57

Services sector around 55% to the Argentina's GDP. Most of the service sector does not become hard currencies, since it mostly argentines paying peso for services. Some services are probably exported which would bring in foreign currency. Having trouble finding a hard number, read somewhere that about 7% of the 55% are exported, that would be about 3.85% of GDP.

The industrial sector contributes nearly 35% of GDP. Not sure what % is exported. Getting very different numbers, from different places.

If you look at the foreign currency coming into Argentina, anywhere between 35-40% is because of the Agricultural sector. Might even be higher, since most of the numbers are a few years old, and Ag price have gone way up.

Without foreign currency, Argentina would be in crisis. The peso has held up well during the farm strike, because the central bank was holding 50 billion dollars in foreign reserves, probably down to 47 billion now.

If the Farm sector goes down, the country will go down with them. By saying it only 6% or 10% of GDP, can mislead people to think it not that important.

http://www.fita.org/countries/argentina.html

Dickhead

06-11-08, 18:25

Except for the portion of the service sector that involves renting pussy to extranjeros, which does bring in hard currency.

Andres

06-11-08, 19:53

I am not defending their number, my only point was that Andres number where off, even by Argentines gov numbers.My numbers were not exact, but fairly close. "Less than 40%" and 33% look very alike. 10% and 6% maybe not, but in any case far from being the powerhouse this sector pretends to be.

Andres

Andres

06-11-08, 19:59

If the Farm sector goes down, the country will go down with them. By saying it only 6% or 10% of GDP, can mislead people to think it not that important.

http://www.fita.org/countries/argentina.htmlThe farm sector doesn't go down. The fact that they complain doesn't mean that they don't currently thrive. Again, it's important to discriminate among different players inside of what is called "Farmers".

I agree that it is an important sector, but automotive and metalmechanic too, and they don't block roads for 90 days,

Andres

Argento

06-11-08, 21:23

The farm sector doesn't go down. The fact that they complain doesn't mean that they don't currently thrive. Again, it's important to discriminate among different players inside of what is called "Farmers".

I agree that it is an important sector, but automotive and metalmechanic too, and they don't block roads for 90 days,

AndresThe farm sector is really the only part of the economy that earns rather than churns money. And taxation that is not equitable across the full spectrum of business has never worked long term in any country where it has been attempted.

I get a strong hint of 'ugly capitalist syndrome' in your posts. My question is; where does the crony capitalism, very apparent in Argentina again, (and supported by the Kirchner administration) fit into your argument? And why shouldn't the farmers thrive? Remember that their return on capital is on average, long-term, 3%. Here it would be negative over the past 10 years. Prices on productive farm land is only now back to the prices of more than 10 years ago.

Argento

Tessan

06-11-08, 21:57

[snip]

Now, CFK didn't managed this issue properly and committed a lot of mistakes, but she was elected 6 months ago with more than 45% of votes, more than 20 points from Carrió. She is the legitimate president (many people may not like it, but that's reality) and has the right to set the economic policies of the federal government. Not convincing? Elections are 3 years away and voters will then be able to choose differently.

[snip]

AndresI am not sure how the executive can set tax laws, without passing it throw the legislature? My understanding is that their was no consultation with anyone outside of the executive. The executive decided to change the taxes, no debate in the legislature, no input from the farm sector. Is this normal in Argentina?

Tessan

06-11-08, 21:58

The farm sector doesn't go down. The fact that they complain doesn't mean that they don't currently thrive. Again, it's important to discriminate among different players inside of what is called "Farmers".

I agree that it is an important sector, but automotive and metalmechanic too, and they don't block roads for 90 days,

AndresThe automotive and metalmechanic do not have a 45% fee on the gross value of their export, before cost are considered. If they did, they would not export, and their would be protest.

Time will tell, weather a 45% tariff on export, will allow production to grow, or will keep production flat, without growth, or cause it too fall. It depends on who is telling the truth, the gov says they are making lots of money, the farmers say they are not.

Argento

06-11-08, 22:35

I am not sure how the executive can set tax laws, without passing it throw the legislature? My understanding is that their was no consultation with anyone outside of the executive. The executive decided to change the taxes, no debate in the legislature, no input from the farm sector. Is this normal in Argentina?You are right.

The loophole is that it is not a tax. Hence the name retenciones. But a rose by any other name still smells as sweet!

Argento

Andres

06-12-08, 20:42

The farm sector is really the only part of the economy that earns rather than churns money. And taxation that is not equitable across the full spectrum of business has never worked long term in any country where it has been attempted.

I get a strong hint of 'ugly capitalist syndrome' in your posts. My question is; where does the crony capitalism, very apparent in Argentina again, (and supported by the Kirchner administration) fit into your argument? And why shouldn't the farmers thrive? Remember that their return on capital is on average, long-term, 3%. Here it would be negative over the past 10 years. Prices on productive farm land is only now back to the prices of more than 10 years ago.

ArgentoI don't share your point of view. The automotive industry's exports have been growing significantly too, and less than half of total exports are related to produce and meat. Ans that's despite that companies from other business areas in Argentina have to hire a significant higher number of workers, and they find it much more difficult to avoid taxes or get gasoil subsidies.

Since I'm an industrialist and believe that progress is made adding value to goods and not merely exporting raw materials (as every developed country did) I find it acceptable to heavily tax an activity that, sooner or later, will become unsustainable on current business trends (using Monsanto's crap and single-crop tactics, etc) Given the current World food crisis, I find it more than acceptable that the government strictly regulates the activity.

I remember pretty well the farmers' demonstrations against Menem back in mid 1999 when they blocked the whole microcentro. At that time they were really going through a hard time. No retentions back then, but not competitiveness either and no subsidies, with oranges being imported from Spain. Under that frame, it doesn't make much sense to talk about return on capital, specially for those who paid zero dollars for their property and who only rent them.

These people, as anybody else, try to externalize losses and privatize gains.

I don't know what do you mean by crony capitalism. If you mean less than perfect market regulations, you will see them all across the World.

Also, I don't know where do you get the idea that I think that farmers shouldn't thrive. It would be a disaster that people leave the rural areas and settle next to shankytowns on BA suburbs. But thriving doesn't mean "I can do whatever I want".

As fas as what I read, prices per hectarea have reached an unprecedented high in USD.

Andres

Andres

06-12-08, 20:45

I am not sure how the executive can set tax laws, without passing it throw the legislature? My understanding is that their was no consultation with anyone outside of the executive. The executive decided to change the taxes, no debate in the legislature, no input from the farm sector. Is this normal in Argentina?It's normal but not legal. The Congress should legislate on that. In any case, that shouldn't be a a very serious concern for the government, since they control both chambers.

Andres

Andres

06-12-08, 20:57

The automotive and metalmechanic do not have a 45% fee on the gross value of their export, before cost are considered. If they did, they would not export, and their would be protest.

Time will tell, weather a 45% tariff on export, will allow production to grow, or will keep production flat, without growth, or cause it too fall. It depends on who is telling the truth, the gov says they are making lots of money, the farmers say they are not.No, they don't have such a fee. But they hire a significantly higher number of workers and many satellite industries revolve around them. From the investor's point of view, it may not be wise, but it could be so from other people's point of view. Not everybody is or thinks as an investor.

Tax on export before costs aren't very fair, certainly, but many of the producers operate on informal ways. The day the government can truly enforce taxation to the income level, things will be different.

I'm afraid that, if the perverse use of Roundup and GMOs continues, in a few years nothing significant would grow there. That's another reason for discouraging widespread use of transgenic soy in spite of other rural businesses (milk, meat, etc) You can compromise future generations for today's profits.

Andres

Argento

06-12-08, 22:08

I don't share your point of view. The automotive industry's exports have been growing significantly too, and less than half of total exports are related to produce and meat. Ans that's despite that companies from other business areas in Argentina have to hire a significant higher number of workers, and they find it much more difficult to avoid taxes or get gasoil subsidies.Yes, I know that we don't share a common point of view. That should not be a hinderance to a rational polemic. The automotive industry is a case in point. Argentina imports just about what it exports in automobiles and their component parts. This is mainly through the off-sets of Mercosur. Effectively it is close to neutral as far as foreign exchange gains are concerned. And yes it employs people and this is a good thing but still leaves you with a zero foreign exchange gain.

On the issue of taxes, there is said to be about a third of the businesses that comply for IVA and that the rest partially comply or don't at all. Naturally this extends to income tax and other impuestos. To me, enforcing compliance would alleviate the pressure on the rural sector and share the tax burden much more equitably. But the government doesn't see this as a priority.
_________________________________________________________________

Since I'm an industrialist and believe that progress is made adding value to goods and not merely exporting raw materials (as every developed country did) I find it acceptable to heavily tax an activity that, sooner or later, will become unsustainable on current business trends (using Monsanto's crap and single-crop tactics, etc) Given the current World food crisis, I find it more than acceptable that the government strictly regulates the activity.

End quote
_________________________________________________________________

There is not much raw material or manufacturing capacity to value add here. It certainly could become available. Investments to develope industries here almost certainly always fail due to the lack of law, corruption and the sovereign risk of the capital. My business experience here is nigh on 20 years and I haven't seen too many companies that have come in here and invested substantial capital stay too long. Most cut and run in the first few years, after being treated like shit when their capital has been sunk. How about the sad tales of Bell South and Broken Hill South to name just 2 companies that figured early on that it was preferable to take the initial loss than to continue to put up with the bullshit.

And many developed countries are simply exporters of raw materials. Australia, Canada and Norway spring to mind. And they certainly do not tax their entire productive sector to the point that they revolt rather than submit to an armed hold-up. And they are in the top 10 per capita income countries in the world. They maybe doing something right.
_______________________________________________________________

I remember pretty well the farmers' demonstrations against Menem back in mid 1999 when they blocked the whole microcentro. At that time they were really going through a hard time. No retentions back then, but not competitiveness either and no subsidies, with oranges being imported from Spain. Under that frame, it doesn't make much sense to talk about return on capital, specially for those who paid zero dollars for their property and who only rent them.
End quote
______________________________________________________________

All broad acre farming in the world took a beating during the 90's. No one made money except those in the USA who survived on Farm Support. Now it is catch up and true to type, Argentinians are envious of the farmer's change in fortune.

I take from your comment on 'paid zero dollars for their property' that you consider it wrong for parents to pass their properties on their families. And if you rent your business premises, that is even more heinous than inheriting. We do differ on this point.
_______________________________________________________________

These people, as anybody else, try to externalize losses and privatize gains.

I don't know what do you mean by crony capitalism. If you mean less than perfect market regulations, you will see them all across the World.
End quote
______________________________________________________________

I mean by 'crony capitalism' that a select few businessmen that get the favoured government help to buy existing businesses or get approval under favourable terms, without a transparent process, to develope usually monopolistic businesses with government help. So far this year Aerolineas and YPF are 2 companies that this has occurred with.
______________________________________________________________

Also, I don't know where do you get the idea that I think that farmers shouldn't thrive. It would be a disaster that people leave the rural areas and settle next to shankytowns on BA suburbs. But thriving doesn't mean "I can do whatever I want".

As fas as what I read, prices per hectarea have reached an unprecedented high in USD.
End quote
______________________________________________________________

Sure. But for example, the price needs to be equated with the dollar value in prices of 20 years ago. Using your automotive industry example, the current Ford Focus is 3 times the price the equivelent car was 20 years ago. Farms have just passed their 20 years ago prices. So in real terms, are still only a third of what they were in 1988.

Andres[/QUOTE]I hope this clarifies my position. I understand yours.

Argento

Dickhead

06-13-08, 05:18

I want to know if "Argento" is a native Argentinean. My guess is that he is not.

Argento

06-13-08, 09:29

I want to know if "Argento" is a native Argentinean. My guess is that he is not.For the record I am not a native born Argentinean. But what difference does that make to the polemic? If it did and being native-born implied a greater understanding of logic and commonsense, the question remains: Why has this country defied all its natural advantages and has been a political, economic and military failure for 50 years? Certainly not because it is a repository of native logic or commonsense.

Argento

Thomaso276

06-13-08, 11:24

Personally, I think it is the politicians and governement workers stealing tremendous amounts of public finds.

I saw a story yesterday about projects in Palermo where they are expanding sidewalks and green spaces. Seems like a nice thing to do to spruce up a booming area.

Two weeks ago there was a story about the city hospitals having only one MRI machine that works and how about no gas for public schools.

Tessan

06-13-08, 13:39

No, they don't have such a fee. But they hire a significantly higher number of workers and many satellite industries revolve around them. From the investor's point of view, it may not be wise, but it could be so from other people's point of view. Not everybody is or thinks as an investor.

AndresWhen I posted:

The automotive and metalmechanic do not have a 45% fee on the gross value of their export, before cost are considered. If they did, they would not export, and their would be protest. I was replying too:

I agree that it is an important sector, but automotive and metalmechanic too, and they don't block roads for 90 days,

My point was that the automotive and metalmechanic do not have a big reason to protest. I said nothing about jobs. The Services sector provides more jobs then the automotive and metalmechanic and the farms combined. But what does that have to do with my reply to you? The 45% tax give the farmers a reason, the automotive and metalmechanic don't have that reason. So I don't understand what jobs have to do with my post?

It's normal but not legal. The Congress should legislate on that. In any case, that shouldn't be a a very serious concern for the government, since they control both chambers.

AndresThen it should be debated in the legislature to give it legitimacy. My understanding is that there where some people from the FPV who talked to the farmers during the strike, and might not follow CFK on the taxes. I don't know if it will pass quickly or not, but it should be put throw the legislature.

I took a quick look of the make-up of the argentine legislature, from what I see CFK party "Frente para la Victoria", has FPV 29.9% Chamber of Deputies and 45.1% in the senate. I am sure she has other parties that are allied with her.

Dickhead

06-13-08, 14:31

Argento, I mostly wanted to know that my guess, based on your English, was correct. I don't agree with your perspective but it is more of a left / right thing, not a native / non-native thing, I think. Everyone knows I am not a native Argie either. There were just certain phrasing you used that made me think English was your first language.

Tessan

06-13-08, 14:47

Argento, you should learn to use the quote system on AP. Especially when you make allot of quotes. It would make you post much easier to read.

Argento

06-13-08, 17:17

Argento, you should learn to use the quote system on AP. Especially when you make allot of quotes. It would make you post much easier to read.PM the technique. I'd be grateful.

Argento

Dickhead

06-13-08, 18:21

Just click on the "quote" button.

Jackson

06-13-08, 19:18

PM the technique. I'd be grateful.

ArgentoYou may also choose to use the quote tags to surround any text you wish to be displayed in quotes:

This...

]text here

Will display like this...

text hereThis...

="Name Here"[/blue]]Text Here

Will display like this...

Text HereFor more examples, please read this...

http://www.argentinaprivate.com/forum/misc.php?do=bbcode#quote[/blue]

Andres

06-13-08, 21:03

Yes, I know that we don't share a common point of view. That should not be a hinderance to a rational polemic. The automotive industry is a case in point. Argentina imports just about what it exports in automobiles and their component parts. This is mainly through the off-sets of Mercosur. Effectively it is close to neutral as far as foreign exchange gains are concerned. And yes it employs people and this is a good thing but still leaves you with a zero foreign exchange gain. Argentina had a very hard time during the 90s to keep its automotive industry alive. Today, it is booming due to domestic demand as well as the Brazilian one. As I read online, the manufacturing sector exports grew more than 60% from 2003 to 2007, but the agricultural ones only 20%.

I'm not sure that most of the trade surplus is due to agricultural exports. I would like to see figures on that sense.

On the issue of taxes, there is said to be about a third of the businesses that comply for IVA and that the rest partially comply or don't at all. Naturally this extends to income tax and other impuestos. To me, enforcing compliance would alleviate the pressure on the rural sector and share the tax burden much more equitably. But the government doesn't see this as a priority.Government is pressing a lot. For instance, Montoya (the tax authority of BA province) has been remaining in his position for years, and the guy is really persistent. Of course, this doesn't change a deeply rooted cultural behavior overnight.

There is not much raw material or manufacturing capacity to value add here. It certainly could become available. Investments to develope industries here almost certainly always fail due to the lack of law, corruption and the sovereign risk of the capital. My business experience here is nigh on 20 years and I haven't seen too many companies that have come in here and invested substantial capital stay too long. Most cut and run in the first few years, after being treated like shit when their capital has been sunk. How about the sad tales of Bell South and Broken Hill South to name just 2 companies that figured early on that it was preferable to take the initial loss than to continue to put up with the bullshit.

And many developed countries are simply exporters of raw materials. Australia, Canada and Norway spring to mind. And they certainly do not tax their entire productive sector to the point that they revolt rather than submit to an armed hold-up. And they are in the top 10 per capita income countries in the world. They maybe doing something right.I don't agree that there isn't much manufacturing capacity in Argentina. The fact that other sectors export more that the agricultural one proves that it works.

If no company stays for very long, how is it possible that multinationals from almost every sector (automotives, banks, computers, restaurant chains and such) have been operating there for decades? Corruption is an inherent part of human behavior and these multinationals have to deal with it if they want to survive. Remember the IBM-Banco Nación case.

Canada doesn't provide most of its jobs from lumber, paper pulp and oil. In fact, the furniture industry and the pulp and paper one are in sharp decline despite the apparent advantage of forests. The Canadian public sector country invests heavily on alternative energies, biotech and construction. In fact, Canada and the US wouldn't be what they are today without the post-Great-Depression policies.

All broad acre farming in the world took a beating during the 90's. No one made money except those in the USA who survived on Farm Support. Now it is catch up and true to type, Argentinians are envious of the farmer's change in fortune.

I take from your comment on 'paid zero dollars for their property' that you consider it wrong for parents to pass their properties on their families. And if you rent your business premises, that is even more heinous than inheriting. We do differ on this point.Remember that, between the 90s and today, the federal government had to come to the rescue of many small producers. The case of Buzzi is paradigmatic in that sense, a farmer who would have had his property seized and auctioned if it weren't for the Banco Nación, not to mention the exchange rate policies that the government tailored for them. To say it differently, they didn't "catch up" on their own, so they cannot claim full ownership of their success.

I don't consider wrong or right to pass property or to rent / exploit it. What I consider important is that these guys didn't risk their own money to get what they have, and that many of them don't even bear the costs (and hence the risk) of exploiting them. Under that frame, I don't deem serious to analyze their case with the typical risk / rewards equation of "serious capitalism".

I mean by 'crony capitalism' that a select few businessmen that get the favoured government help to buy existing businesses or get approval under favourable terms, without a transparent process, to develope usually monopolistic businesses with government help. So far this year Aerolineas and YPF are 2 companies that this has occurred with.I try to understand what you meant. To me, it's pretty obvious that in almost every country in the World the one who succeeds in business is usually the one with the good connections (at least if we mean big businesses)

Sure. But for example, the price needs to be equated with the dollar value in prices of 20 years ago. Using your automotive industry example, the current Ford Focus is 3 times the price the equivelent car was 20 years ago. Farms have just passed their 20 years ago prices. So in real terms, are still only a third of what they were in 1988.My comment on the land price is just to point out that income from grains have become so profitable that prices multiplied severalfold. It wouldn't be the case if producers wouldn't cover costs.

Andres

Andres

06-13-08, 21:15

My point was that the automotive and metalmechanic do not have a big reason to protest. I said nothing about jobs. The Services sector provides more jobs then the automotive and metalmechanic and the farms combined. But what does that have to do with my reply to you? The 45% tax give the farmers a reason, the automotive and metalmechanic don't have that reason. So I don't understand what jobs have to do with my post?From the government's point of view, among several other factors, intensive employment sectors help to keep the social tensions on check. That's why some industries are rewarded while other are not. It's a matter of economic policy.

Then it should be debated in the legislature to give it legitimacy. My understanding is that there where some people from the FPV who talked to the farmers during the strike, and might not follow CFK on the taxes. I don't know if it will pass quickly or not, but it should be put throw the legislature.It should. Otherwise, a defeat on the next election would make the whole tax structure scrumble.

Andres

Posthaste

06-14-08, 20:38

Heritage Foundation: The Argentina Farmers' Strike.

Friday, June 13, 2008

By James M. Roberts.

Argentina's farmers are on strike. Again. Food isn't being exported. It's not even making it into city markets.

It's quite a comedown for what was one of the world's wealthiest countries 100 years ago. Argentina's economic glory days are long gone, thanks to the dysfunctional economic policies of Gen. Juan Domingo Peron and his political progeny, who have clung to power in Argentina more or less continuously since the 1940s.

To understand what's happened in Argentina, let's recall the old cow-based definitions of political economies:

Socialism: You have two cows. The State takes one and gives it to someone else.

Communism: You have two cows. The State takes both and gives you the milk.

Fascism: You have two cows. The State takes both and sells you the milk.

In Argentina today, the situation looks like this: You have two cows. The Peronists take the milk, export it for record-high world prices, pay off their political cronies, subsidize their urban-poor political base and give the farmers whatever is left. Unfortunately for the farmers, what's left often isn't enough to cover their costs.

For three generations Argentina has labored under the Peronists' simple, but economically destructive, political formula: Increase wasteful welfare-state handouts; build a swollen bureaucracy to redistribute wealth; protect powerful, closed-shop trade unions from foreign competition; and generously lubricate all these components with corruption.

Anyone raising serious objections risks a visit from political thugs. Of course, these policies have exacted a terrible toll: Some families in Argentine barrios have been unemployed and on welfare for three generations.

Since coming to power in 2003, the presidential tag-team couple of Néstor Kirchner and Cristina Fernandez de Kirchner have financed their Peronist policies by exploiting high commodity prices. They've kept the peso artificially low and taxed agricultural exports heavily. It hasn't worked.

During his presidency from 2003 to 2007, Néstor Kirchner tried to stimulate growth by boosting government spending, wages and pensions. Predictably, inflation skyrocketed.

Rather than move to correct the problems, The Economist notes, the Kirchners simply "whitewashed the effects of inflation" by canceling publication of official poverty statistics.

They got a temporary reprieve from reality when Venezuelan President Hugo Chávez, their ideological soul mate, paid off much of a large chunk of Argentina's $5 billion-plus official debt.

Though Néstor Kirchner turned over the reins to his wife last year, his heavy hand remains visible. Most of her ministers are holdovers. The Economist Intelligence Unit observes that Cristina Kirchner has continued her husband's "commitment to a weak currency policy. And to the heterodox measures, such as price caps, cross-subsidies and export taxes, which have been used to contain the resultant acceleration of inflation."

But Argentina's farmers no longer are willing to serve as the Kirchners' cash cow. When Cristina Kirchner's finance minister raised taxes on agricultural exports to 44 percent earlier this year, they said "basta," meaning "enough." A 21-day strike ensued.

Farmers blocked food shipments and demonstrated peacefully. The Kirchner government responded with occasional police brutality and deployed the Peronists' favorite populist weapon — rent-a-mobs.

Ultimately, both sides agreed to a 30-day truce. It ended May 2, the Kirchners stubbornly refusing to negotiate a lower tax rate. With no settlement in sight, the farmers resumed their strike on May 7.

Talks with the government since then have gone nowhere. With matters at an impasse, Argentine farm groups have suspended grain exports and meat sales.

Thousands of U. S. Teachers, farmers and other pension fund investors lost $3 billion when Argentina defaulted. Even though the Kirchners are currently sitting on more than $50 billion in hard currency reserves, they refuse to repay this debt in full.

A solution won't be easy, in large part because the country's problems are so structural. The 2008 Index of Economic Freedom reports low scores for Argentina on property rights, labor freedom, freedom from corruption and, especially, financial freedom, stemming from the still-unresolved 2001-2002 crisis when Argentina defaulted on its foreign debt.

Political interference with an inefficient judiciary makes investors mistrust Argentine courts.

On the other hand, Chile has shown an openness to foreign investment, and officials there have been trying to fight corruption and protect property rights. While the Kirchners try to revive Juan Peron's disastrous 1960s-era protectionist "import substitution" policies, Chileans lead South America in seeking free-trade agreements. They see the value of globalization and aren't afraid of it.

Even leftist Brazilian President Luiz Inacio Lula da Silva is doing a better job of governing than the Kirchners. He calls inflation a "degrading disease," advocates fiscal restraint and supports Brazil's central bank anti-inflation measures. As a result, foreign investors are flocking to Brazil and shunning Argentina.

Instead of perpetuating wasteful welfare state handouts and redistributing income, the Argentine government should look west and emulate the success that Chile has enjoyed from a combination of economic reform, privatization and limited government. Until it does, Argentina's glory days will remain little more than a faded memory.

James M. Roberts is Research Fellow for Economic Freedom and Growth in the Center for International Trade and Economics (CITE) at The Heritage Foundation (heritage. Org)

Tessan

06-15-08, 02:39

Argentina had a very hard time during the 90s to keep its automotive industry alive. Today, it is booming due to domestic demand as well as the Brazilian one. As I read online, the manufacturing sector exports grew more than 60% from 2003 to 2007, but the agricultural ones only 20%.Argentina's exports about 55 billion dollars in 2007 with a trade surplus 10.5 billion dollars. 40% of the 55 billion was due to the farmers, so that's 22 billion dollars.

Argentina imports very little food, I cannot find the number, since it's not listed in countries that import food, since Argentina imports very little food. http://uk.reuters.com/article/latestCrisis/idUKL1835607720080418 I would guess it is below 2-3 billion dollars.

So.

If we guess 3 billions dollars in food imports, then 22-3=19 billion dollars surplus in foreign currency coming into Argentina.

All other exports minus all imports would leave a draw of foreign currency of 8.5 billion dollars in foreign currency.

If these numbers are accurate, all other sector draw down foreign currency and the main source is the farmer, plus some from tourist.

Andres maybe you can provide some other numbers.

Tessan

06-15-08, 02:53

From the government's point of view, among several other factors, intensive employment sectors help to keep the social tensions on check. That's why some industries are rewarded while other are not. It's a matter of economic policy.It looks more like the government want to get as much money out of the "rich farmers" for political reasons. It is not fair they make allot of money, when there are poor in Argentina. That is the reason. Also they government want them to plant less soy and more wheat, so they make it much less profitable to plant soy. If production falls in the future, the government will regret there stance. My understanding Wheat production will be down 20% from last year. And last year production was down also.

It should. Otherwise, a defeat on the next election would make the whole tax structure scrumble.You said it was not legal.

It's normal but not legal. [snip]Therefore it should be made legal.

Easy Go

06-15-08, 04:53

Are export farmers targeted for political purposes or are they just easy to tax? Argentina doesn't appear to have a well functioning VAT or income tax system so other options for increasing taxes revenues seem limited. Increasing VAT / income tax compliance is going to require an effective bureaucracy and compliant taxpayers (neither of which seems likely to magically appear in Argentina) so that is not a realistic option. Increasing VAT / income tax rates might well lead to even lower total receipts as non-compliance increases.

If the government needed more tax revenues, increasing export taxes in a time of high commodity prices must have looked like an easy option. Of course, they completely misjudged the export farmers ability to mount an effective protest and ended up decreasing tax revenues, damaging the export sector of the economy, and reducing the overall wealth of Argentina.

It's amazing how often that things that look easy turn out to be disasters.

Tequila Tim

06-15-08, 10:27

Looks like Cristina is escalating things a bit:

http://biz.yahoo.com/ap/080614/argentina_farm_crisis.html

Argento

06-15-08, 10:58

Argento

06-15-08, 15:22

Indec is your source?World Bank, as quoted I think in 'The Economist', in an article 3 weeks back. Figures to the 12 months December 2007 are 1.2 millon. It has only intensified in the last 6 months. Hence it is a simple extrapolation to calculate the percentage on a population of 38 million.

Argento

Argento

06-15-08, 19:34

I didn't read that article but if they use INDEC as a source the poverty (and extreme poverty as well) it has declined. But they are playing with the numbers'The Economist' article was really about the Kirchner belief in fooling all of the people all of the time. Make believe statistics, changing the basis for statistics such as they have done for the inflation figures and much else. Perhaps Andres can put us right in the benefits of the government lying, cheating and allowing its citizens to starve. Not quite the same as Zimbabwe but that's how Mugabee started. The foodbowl of Southern Africa cannot even feed itself. And some foodstuffs here are getting to the point of not being produced because they are not economical for the producers due to price controls.

Never forget, there are still hundreds of children, mainly in the north-west and of indian origin, who die each year of malnutricion. So as actions speak louder than words, the Kirchner priority is to replace footpaths in the Federal Capital rather than to ensue their citizens get food and healthcare, never mind an education.

Argento

Andres

06-15-08, 21:27

Argentina's exports about 55 billion dollars in 2007 with a trade surplus 10.5 billion dollars. 40% of the 55 billion was due to the farmers, so that's 22 billion dollars.

Argentina imports very little food, I cannot find the number, since it's not listed in countries that import food, since Argentina imports very little food. http://uk.reuters.com/article/latestCrisis/idUKL1835607720080418 I would guess it is below 2-3 billion dollars.

So.

If we guess 3 billions dollars in food imports, then 22-3=19 billion dollars surplus in foreign currency coming into Argentina.

All other exports minus all imports would leave a draw of foreign currency of 8.5 billion dollars in foreign currency.

If these numbers are accurate, all other sector draw down foreign currency and the main source is the farmer, plus some from tourist.

Andres maybe you can provide some other numbers.I cannot say much about these numbers. I tried to find something on the Internet, so far not lucky.

If you argument is that the agricultural sector should get prioritary treatment because of the trade surplus they bring, I don't agree. My line of reasoning is other: The surplus generated by the agricultural sector is retained and distributed by the government to deploy public policies and encourage other sectors that, by the end of the road, are the only ones that can create a massive amount of jobs and promote domestic consumption.

After all, only 6% of the active force works in the agricultural sector.

Again, it's a matter of what socio-economical order / policies you want and what you prioritize.

Andres

Andres

06-15-08, 22:09

It looks more like the government want to get as much money out of the "rich farmers" for political reasons. It is not fair they make allot of money, when there are poor in Argentina. That is the reason. Also they government want them to plant less soy and more wheat, so they make it much less profitable to plant soy. If production falls in the future, the government will regret there stance. My understanding Wheat production will be down 20% from last year. And last year production was down also.One reasons for heavily taxing the agricultural exports is to collect money to use it discretionally for public works based on political reasons, that's for sure. Every previous government did so (conservative and progressive alike) and so far the current government cannot escape from that mechanism, even if they wanted.

However, there is now a "program" based on a set of values and ideas totally different from that of the 90s, which prove to be unsuitable for the country (unrestricted trade, heavy impact of the financial sector, the "spill" theory and such) This program prioritizes the intensive employment sectors over others such as the rural ones in terms of taxation (not in other terms because, after all, on a 1 dollar to 1 peso frame the current agricultural sector didn't thrive, and now they can, along with current gasoil subsidies that were absent before)

Wheat exports from Jan. To June 2008 are higher than those of Jan.-June 2007. In fact, after many producers complied to the governmental requirement to declare stock, 1M tons were exported last week (the fact that media claims that farmers don't export doesn't mean that they actually don't) At least that's what the Argentine Customs agency said last week.

As for soy production, sooner or later it will be necessary to neutralize the devastating effects of MGO and the pesticides they use, not to mention the risk for provision of basic food at prices most people can afford.

It's a complex matter, not a one that can be lightly defined in terms of "they don't want us to be rich". The fact that huge holdings such as Techint remain untouched and even favoured proves that this isn't a measure against "richies" at large.

Andres

Schmoj

06-15-08, 22:18

My line of reasoning is other: The surplus generated by the agricultural sector is retained and distributed by the government to deploy public policies and encourage other sectors that, by the end of the road, are the only ones that can create a massive amount of jobs and promote domestic consumption. Wow, that sounds like it came right out of Kristina's overly-lipsticked mouth.

I'd like to hear how you think these taxes (or more acurately, retenciones) would actually end up encouraging other sectors.

It appears to me that, as with past dictators and elected officials, this money will end up in bank accounts in other continents, not anywhere close to the developing other economic sectors. It just doesn't function that way here.

Andres

06-15-08, 22:29

Well you asked for figures and these have been supplied by other forum members. So it is not only me that realizes it is the class war of the 70's still being fought. With your posts you appear to be on the Peronist side of the war. With the information supplied, I wonder if you would revisit your previous posts on this retensions issue and explain how the numbers work. I can't get the numbers to make sense in a rational economic way. I am a businessman, not an engineer, so my numbers always have a bottom line. All I can see is another collapse on the horizon. In the last 12 months, more than 4% of Argentina's population has descended into abject poverty. And the Kirchner's policies can be the only cause. Complete cockamamie economic policies. Imagine if a natural catastophe such as the Peruvian earthquake or such-like was to occur. There is absolutely no fall-back position.

Argentine foreign debt is once again in a dangerous place and no attempt to pay the reduced debt from the last debacle has occurred. Refinancing yes, but no intention to repay. And that is a national moral issue.

So the advantages that the Argentine social system offers the majority of its citizens do not appear obvious to me. Give me an insight.

ArgentoI don't see it as the "class war of the 70s". After all, no one life has been taken by repression so far, something that I find very remarkable and is years light away from the bloody 70s. Is there a wealth distribution dispute? Sure. However, I believe that the bottom line revolves more on the ability of the government to enforce policies than on wealth distribution by itself.

As of collapse on the horizon, I have been hearing that from several sources since 2003, and it didn't happen. Some sectors would be interested in having a collapse, but that's another issue.

I think that you want to believe that the Kirchner's policies are the cause of poverty, but numbers speak loudly: Since 2003, poverty has been sharply reduced, with such an increase in domestic consumption that inflation became a serious problem.

As of "catastrophes", I guess that this government was clever enough to build strong reserves to avoid financial speculation and hard times. No government before did so, relying only on loans from IMF and risky bonds to cover financial gaps. That's setting policies for the medium term, and it worked pretty well so far.

Debt is paid for political reasons, not "moral" ones. Argentina honored their debt in full to institutions such as IMF and BIRF, while setting a agreement a long ago to pay the private one with huge discounts. No payments of principal for the private debt? Probably not, but what country really pays the principal when heavily indebted?

Andres

Daddy Rulz

06-15-08, 22:36

According to Cristina the money will be earmarked for the roads, homes and hospitals in the provinces and the money will be managed by the provinces.

According to Cristina it's not for the development of other sectorsAndres, who was the lady politician that campaigned under the slogan "give me a 1000 days and I will clean up the river." This money will directly or indirectly end up in the pockets of the Ks, their supporters and cronies.

I admit my view of S American politics is overly simplistic. But this whole thing smells to me like Mafia "you are making a lot of money and I want some so I will take it." No different than a girl in Hook charging N Americanos more than locals with the justification of, you have more money and I should have some of it.

My ex used to talk about political corruption when she stole cable tv, had her apartment set up as unoccupied for gas charges, hadn't ever paid taxes. The waiter that shortchanges the unwary, that piece of shit bartender at hook, the ATM at Banco Francais that gave me a trutcho cien peso bill. The society is corrupt not just the leaders. I'm not complaining, personally I like it but I'm not hypocritical enough to point at them and say "they are at fault" when it is a group not individual effort.

Am I wrong?

Andres

06-15-08, 22:37

I'd like to hear how you think these taxes (or more acurately, retenciones) would actually end up encouraging other sectors.The same way taxes work in any other country when invested in infrastructure and social programs.

It appears to me that, as with past dictators and elected officials, this money will end up in bank accounts in other continents, not anywhere close to the developing other economic sectors. It just doesn't function that way here.As I explained before, calling on corruption is an excuse for not paying taxes. Look: You cannot evade just because corruption "it appears" to you. I don't think that, in the US, the IRS would take such an argument to waive prosecution.

Andres

Andres

06-15-08, 22:51

Did you hear a single bad word from the big argiculture company's?Sorry, I don't understand your question.

Andres

06-15-08, 22:55

According to Cristina the money will be earmarked for the roads, homes and hospitals in the provinces and the money will be managed by the provinces.

According to Cristina it's not for the development of other sectorsOne of the objectives of the taxing decrees is to encourage investments on dairy products instead of soy. Milk-related industries generate 5 times more jobs than the those planting soy.

Andres

Andres

06-15-08, 23:00

Andres, who was the lady politician that campaigned under the slogan "give me a 1000 days and I will clean up the river." This money will directly or indirectly end up in the pockets of the Ks, their supporters and cronies.

[snip]

The society is corrupt not just the leaders. I'm not complaining, personally I like it but I'm not hypocritical enough to point at them and say "they are at fault" when it is a group not individual effort.

Am I wrong?LOL. That woman is María Julia Alsogaray, currently serving in prison.

I couldn't understand your last sentence. Do you mean that no group should be blamed because almost everybody is at fault?

Andres

Schmoj

06-15-08, 23:09

The same way taxes work in any other country when invested in infrastructure and social programs.Have you actually been in Argentina? Nothing works here the way it does in other countries when it comes to how the government handles money.

As I explained before, calling on corruption is an excuse for not paying taxes. Look: You cannot evade just because corruption "it appears" to you. I don't think that, in the US, the IRS would take such an argument to waive prosecution.I'm not saying that you can call on corruption to avoid paying taxes. I get paid a salary here. If I could I would.:-)

My point is, don't be fooled by the rhetoric that spews from the Kirchners. Or the farmers for that matter. This is not a matter of taking from the rich farmers and giving back to the country. The only 'class war' in all of this is one class of rich and powerfull taking from another class of rich and powerful, with lots of rhetoric in the middle.

Andres

06-15-08, 23:58

Have you actually been in Argentina? Nothing works here the way it does in other countries when it comes to how the government handles money.Yes, I guess that I spent sometime there somewhere in the past.

Some things work. Public universities have a pretty good academic level, and they don't charge any tuition at all.

My point is, don't be fooled by the rhetoric that spews from the Kirchners. Or the farmers for that matter. This is not a matter of taking from the rich farmers and giving back to the country. The only 'class war' in all of this is one class of rich and powerfull taking from another class of rich and powerful, with lots of rhetoric in the middle.Lots of rhetoric, that's for sure. It takes time to see all the complexities.

Andres

Schmoj

06-16-08, 00:28

Some things work. Public universities have a pretty good academic level, and they don't charge any tuition at all.Good point Andres. Amidst all the problems there are a lot of good things as well.

Dickhead

06-16-08, 01:06

Andres is from Panama and used to run drugs for the Noriega regime, so he did transit through EZE a couple of times. I think he has a couple of distant cousins who spent a couple of weekends in Mar Del Plata.

El Perro

06-16-08, 10:18

No it's supposed to go to infracture, hospitals and housing projects, your point is not validFuck off Redondo.

El Perro

06-16-08, 11:01

Who is Redondo?You, asshole.

Argento

06-16-08, 11:44

You, asshole.Right on the money. Same phrasing as well and the attack dog riposte true to type. Volumne as well.

Argento

Tessan

06-16-08, 11:59

[snip]Wheat exports from Jan. To June 2008 are higher than those of Jan.-June 2007. In fact, after many producers complied to the governmental requirement to declare stock, 1M tons were exported last week (the fact that media claims that farmers don't export doesn't mean that they actually don't) At least that's what the Argentine Customs agency said last week.

[snip]By Carlos Caminada and Matthew Craze.

June 13 (Bloomberg) -- Argentina, the world's fifth-biggest wheat exporter, may grow less of the grain than previously expected as dry weather prompts farmers to scale back planting.

Fields sown with wheat for the next crop will fall to 4.8 million hectares (11.8 million acres) less than a June 6 forecast of 5 million hectares, the Buenos Aires Cereals Exchange said today in a report. Planted acreage will drop from 5.5 million hectares for the previous season, the exchange said.

Dry weather in Santa Fe, Cordoba and other major wheat- producing provinces has left the soil with less moisture than needed for seeds to flourish, prompting growers to plant less, the exchange said.

http://www.bloomberg.com/apps/news?pid=20601086&sid=a16f6jSsJAdI&refer=news

Tessan

06-16-08, 12:10

As of "catastrophes", I guess that this government was clever enough to build strong reserves to avoid financial speculation and hard times. No government before did so, relying only on loans from IMF and risky bonds to cover financial gaps. That's setting policies for the medium term, and it worked pretty well so far.

AndresThe central bank, by deciding to keep the peso low, had to keep selling peso, and buying dollars, so they built up 50 billion dollars in reserves. They where able to do this, because of the trade surplus, which is mainly because of food exports. If not for the trade surplus, the peso would not have wanted to get stronger, and the central bank would not have been able to buy up all those dollars for pesos.

RobBarone

06-16-08, 13:39

Who can advice me if the situation among this big crisis. Is this that bad? Or is just the media? I ma a bit scared now when I see the news online. What is going on? Of all the period of tiem I had to travel right now with this big Quilombo. Please guys let me know.

Thnax

Tessan

06-16-08, 14:41

Argentine Stocks Lose Foreigners Fastest in 8 Years (Update1)

By James Attwood and Fabio Alves.

June 16 (Bloomberg) -- Argentina's stock market is losing foreign investors at the fastest pace since 2000 on concern accelerating inflation and a three-month farmers strike will curb economic growth and corporate profits.

About 1,000 emerging-market funds sold $157 million in Argentine stocks through May, according to fund flow tracker EPFR Global in Cambridge, Massachusetts. That's more than the $118 million average daily trading on the Buenos Aires stock exchange and the biggest outflow since 2000, the year before the government's $95 billion debt default. Argentina's Merval index lost 4.7 percent over the past year, compared with a 27 percent rise for the Bovespa index in Brazil.

http://www.bloomberg.com/apps/news?pid=20601086&sid=amHC6ab0Rr_s&refer=latin_america

Andres

06-16-08, 19:40

By Carlos Caminada and Matthew Craze.

June 13 (Bloomberg) -- Argentina, the world's fifth-biggest wheat exporter, may grow less of the grain than previously expected as dry weather prompts farmers to scale back planting.

Fields sown with wheat for the next crop will fall to 4.8 million hectares (11.8 million acres) less than a June 6 forecast of 5 million hectares, the Buenos Aires Cereals Exchange said today in a report. Planted acreage will drop from 5.5 million hectares for the previous season, the exchange said.

Dry weather in Santa Fe, Cordoba and other major wheat- producing provinces has left the soil with less moisture than needed for seeds to flourish, prompting growers to plant less, the exchange said.

http://www.bloomberg.com/apps/news?pid=20601086&sid=a16f6jSsJAdI&refer=newsOK, I see your point. Thanks.

Dickhead

06-16-08, 19:41

Other sources say the reduction in wheat acreage is due more to substitution of soy production for wheat. Agriculture bores me, but that is what I am hearing.

Andres

06-16-08, 19:50

The central bank, by deciding to keep the peso low, had to keep selling peso, and buying dollars, so they built up 50 billion dollars in reserves. They where able to do this, because of the trade surplus, which is mainly because of food exports. If not for the trade surplus, the peso would not have wanted to get stronger, and the central bank would not have been able to buy up all those dollars for pesos.Sure, but farmers need such low-peso structure. Without a strong government intervention and an hegemony of the financial sector like in the 90s, the "market" would create such a strong-peso crisis that would force small and medium farmers to sell their land, and after that force a devaluation to restore competitiveness.

Everybody hates the government, but everybody wants its protection too.

Andres

Bacchus9

06-17-08, 01:15

I find it really ironic to find here the only reasoned view of the government's strategy with the retenciones, as well as a good deal of historical context, available almost anywhere I've looked or listened in Buenos Aires. Lucky to have Andres who is not only thoughtful but patient at fending off the cynicism of extrañjeros, a cynicism which is in abundance in porteños as well. I see things much as Andres has explained and consider the criticisms of the Kircheners as carpetbaggers as unjustified given the financial growth of the country and their dedication to bringing to justice for the first time the guilty parties from the dictatorship.

Equally hard to find is substantial information on the effects of the retenciones on farmers. On the weekend after di Angeli was hauled off to Concepcion du Uruguay for being a loudmouth, antagonist road blocker and trouble maker and the farm groups declared yet another period of road blocks I received an unsolicited e-mail from a "Productor Agropecuario" fanning the flames of strangling the country over the elimination of the new sliding scale on soy and sunflower exports with another seige. I wrote back telling him I thought they were wrong to basically be bringing the country down with their actions and they should pursue their grievances at the next election. He replied with the following, which I'm sure is bullshit but it's hard to find what the real consequences are on soy and sunflower farmer's earnings. Care to comment Andres?

"Deberias conocer mas la realidad de nuestro campo antes de opinar de forma erronea.

Suma muy simple:

Impuesto a las ganancias: 35%

I. V. A.: 21% (lo perdemos)

Retenciones hasta el 11 de Marzo /2008: 35%

Retenciones Moviles: del 9 al 11%

Total: 35 + 21 + 35 + 9 = 100 o sea rentabilidad CERO"

Tessan

06-17-08, 13:32

Tessan

06-17-08, 13:46

One of the sectors most hard hit by the farmer's revolt has been tourism. According to recent figures released by the Argentine Business Federation of Hotels and Restaurants the first three weeks of the blockades alone caused loses in the Argentine tourist industry of 73 million pesos (around $24 million) At the same time thousands of jobs in the tourist industry are now at risk and many hotels and restaurants in Argentina face the possibility of imminent closure unless the blockades are lifted.

Last weekend was a bank holiday in Argentina but, with over 300 roads blocked, an estimated 60% of coaches were marooned on highways and bus stations all over the country. Many coach companies simply stopped issuing tickets altogether. Long distance coach companies also reported a 40% drop in ticket sales in comparison with other weekends.

In response hundreds of tourist industry workers descended on Highway 14 in the province of Entre Rios to vent their frustration at the farmers for the damage they have caused to the tourist industry and the thousands of jobs they are now putting at risk.

http://www.guardian.co.uk/travel/2008/jun/17/argentina.travelnews

Tessan

06-17-08, 14:38

Sure, but farmers need such low-peso structure. Without a strong government intervention and an hegemony of the financial sector like in the 90s, the "market" would create such a strong-peso crisis that would force small and medium farmers to sell their land, and after that force a devaluation to restore competitiveness.

Everybody hates the government, but everybody wants its protection too.

AndresThe government is supposed to do what is good for Argentina. They decided to have a low-peso policy, to help all exports. Including the 40% of exports that come from the farmers. Although the governments policy does help the farmers, they would still sell their food, especially now, when food is in big demand. Argentina's other exports would not sell so well, since price is very important, and if the peso where to be much higher, they would be uncompetitive.

The government get more money from the farmers, then what the farmers make, since they are taxes before expenses. Don't think the government helps the farmers more, then the farmers help the government.

Andres

06-17-08, 19:56

"Deberias conocer mas la realidad de nuestro campo antes de opinar de forma erronea.

Suma muy simple:

Impuesto a las ganancias: 35%

I. V. A.: 21% (lo perdemos)

Retenciones hasta el 11 de Marzo /2008: 35%

Retenciones Moviles: del 9 al 11%

Total: 35 + 21 + 35 + 9 = 100 o sea rentabilidad CERO"Thanks, Bacchus.

If they had zero profit (rentabilidad cero) they wouldn't be able to remain in business or to spend any money at shopping malls or in renewing their SUV fleet. They would keep rusty Ford F100 trucks and save the extra money for hard times.

His numbers make no sense at all. It seems that all operational costs don't exist. Gas is free, also salaries and consumables. As of them, the only one who gets the money is the government. RMAO.

However, I understand their position. They need to play the role of outraged victims to justify their actions and reinforce their belief in their delusions.

As you can see, anyone who doesn't agree with them is tagged as not-to-date with their reality ("Deberías conocer mejor antes de opinar.")

Andres

Andres

06-17-08, 20:01

Argentine Lawmakers Seek Special Session on Farm Export Taxes.

By Bill Faries.

June 17 (Bloomberg) -- Argentine opposition lawmakers will ask Vice President Julio Cobos to call a special session on farm export taxes after anti-government protesters took to the streets across the country yesterday.

Senator Gerardo Morales of the opposition Radical Civic Union party said Cobos should use his constitutional authority as head of the Senate to facilitate debate on taxes that were introduced March 11.

The government is 'worsening a spiral of violence and inflation,'' Morales said during an interview on Radio 10. 'Congress was created to deal with these kinds of circumstances.''

http://www.bloomberg.com/apps/news?pid=20601086&sid=asV6hr9jaCDg&refer=latin_america

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It is possible that CFK does not want congress involved, and my tell Vice President Julio Cobos not to call a session of congress.Opposition lawmakers tried twice before, but lawmakers supporting CFK were absent and the session had to be called off for lack of "quorum".

Even if they succeeded, the lawmakers supporting CFK would turn down the proposals. They outnumber the opposition.

In any case, holding a session under such circumstances doesn't set a good precedent. Tomorrow, any other industrial sector would force layoffs and road blockades to force the Congress to move forward their agenda.

Andres

Andres

06-17-08, 20:11

The government is supposed to do what is good for Argentina.When you set economic policies, you choose certain goals to accomplish as of your "political agenda" (or at least you are supposed to do so) When setting such priorities, unavoidably some sectors get favored while others not.

What I mean is that "What is good for Argentina" doesn't has the same meaning for a university researcher, an export-oriented farmer or a manufacturer who sells to the domestic market.

Andres

MadDrJoe

06-17-08, 21:14

Argento

06-17-08, 21:24

I understand their position, even though I don't completely agree with it. The guy who did the math above is confusing a revenue tax (at current prices set at 46%) with a income tax (an extra 30%)

One thing I don't believe anyone can argue with is that a 46% tax on revenues is going to generate a strike in any country on earth and most of the inhabited universe.

The issue is with with farmers who are renting land to plant soybeans, most of them those large soya crop pools, who were paying an average of 1 tn of soybeans per hectare at last year's prices (320 USD per tn) Yields range between 2,5 and 3 tns per hectare, with an extra half tonne going towards fertilizer, fuel, machinery and seeds. If the government is taking 1,3 tns in a revenue tax, then their margins are reduced to a range betwen 5-7% from 15-20% last year.

Farmers who work their own land are affected but not nearly as much. What this does is kill the financial incentive to invest in soya crop pools, as the yields are reduced severely.Great post. And it keeps the polemic based on what the facts really are. Andres and a few others are looking at Argentina as if it is an exception to economic rules. If the purpose of business is to simply employ people as Andres has advanced, then the K's should decree that no modern equipment can be used at all in Argentina and go back to horses as the transport mode. It will employ plenty of people producing goods unprofitable to sell but heck, think of the employed people.

Argento

Andres

06-17-08, 21:58

Farmers who work their own land are affected but not nearly as much. What this does is kill the financial incentive to invest in soya crop pools, as the yields are reduced severely.That's part of the idea.

Andres

06-17-08, 22:01

If the purpose of business is to simply employ people as Andres has advanced, then the K's should decree that no modern equipment can be used at all in Argentina and go back to horses as the transport mode. It will employ plenty of people producing goods unprofitable to sell but heck, think of the employed people.

ArgentoI wonder who said that the sole purpose of the economy is employing people. Employment is one of the most important factors, but not the only one.

Andres

Bacchus9

06-18-08, 04:42

In any case, holding a session under such circumstances doesn't set a good precedent. Tomorrow, any other industrial sector would force layoffs and road blockades to force the Congress to move forward their agenda.

AndresThis seems like a really important point and you don't have to look back very many months to see it occurred in the recent rounds of union wage increases which from my perception set inflation on fire. It appeared the unions, one after the other, extracted wage increases out of the government and suddenly the cost of everything that wasn't under firm control by the government in the supermarkets jumped in price by the day or by the week, from cortados to restaurant tabs to services to rents and anybody not in a union was left at their old salaries getting poorer by the day.

I sense this government's intentions are in the right place and Lousteau was a bright guy with sound ideas, but they've been lousy at laying out a broad vision and selling it to the public. They seem to leave Fernandez out there, busy as a one armed paper hanger, fending off criticism and explaining policy. Nestor Kirchner is building up the Peronist party but he better hurry before this crisis cuts him and whatever ideas he has off at the pass.

MiddleAgeGuy

06-18-08, 10:45

A couple interesting facts in here I did not contemplate, like Chavez Gov getting 13% for their generosity. Let's see how long the freindship lasts if that gets defaulted.

Argentine debt surge raises spectre of default.

By Jude Webber in Buenos Aires.

Published: June 13 2008 00:23 | Last updated: June 13 2008 00:23

Argentina's debt levels are now higher than they were when it crashed into the biggest sovereign debt default in history in 2001, and a worsening crisis of confidence in the government has brought the spectre of a new default closer, a report to be published next week says.

Despite a radical restructuring just three years ago, public debt has reached $114.7bn (€74.4bn, £59bn) or 56 per cent of gross domestic product, compared with $144.2bn, or 54 per cent of GDP, in 2001 – at a time when Argentina's economy was much larger – according to the paper.

Martín Krause and Aldo Abram, directors of the Argentine Institutions and Markets Research Centre at Eseade business school and the report's authors, also found that if the amount owed to bondholders who did not accept the 2005 restructuring and are suing to recover their money is included, Argentina's overall debt rises to $170bn, or 67 per cent of GDP.

"We're not teetering on the brink of default but if we continue down this path, with this level of [social] conflict, we could get there," Mr Abram told the FT.

Many developed countries, including Italy and Japan, have higher ratios of debt to GDP but Argentina's higher borrowing costs and rocky institutional record make it harder to secure credit. "The worry is not the amount, it's that we won't have access to credit," Mr Abram said.

The six-month-old government of Cristina Fernández, the president, has been struggling to resolve a conflict with farmers after it imposed a sliding scale of export tariffs on key agricultural exports in March. The unrest has spread to truck drivers, who have mounted roadblocks to demand an end to the farm dispute, which has disrupted grains transportation.

Their action has caused fuel shortages and will put further pressure on inflation, which the government is widely accused of trying to conceal with doctored data.

Meanwhile, the government must this year find $14.6bn for debt servicing, plus $11.8bn next year and $10.5bn in 2010.

However, the threat of legal action by bond holdouts bars Argentina from international capital markets whilst it remains in default with the Paris Club of creditor nations, to which it owes $6.6bn.

Argentina has increasingly turned to Hugo Chávez, the Venezuelan president, who has bought $6.4bn in bonds in the past three years.

But its international financial isolation is costly – Buenos Aires has had to pay Venezuela interest rates of up to 13 per cent, yet it cancelled its low-cost International Monetary Fund debt and the Paris Club debt only costs 5.3 per cent, Mr Krause said.

By contrast Brazil, which had a far worse debt profile than Argentina in 2001, recently achieved investment grade and sold a 10-year bond at 5.3 per cent.

Tessan

06-18-08, 13:47

http://www.mercopress.com/vernoticia.do?id=13741&formato=HTML

Tessan

06-18-08, 13:51

Opposition lawmakers tried twice before, but lawmakers supporting CFK were absent and the session had to be called off for lack of "quorum".

Even if they succeeded, the lawmakers supporting CFK would turn down the proposals. They outnumber the opposition.

In any case, holding a session under such circumstances doesn't set a good precedent. Tomorrow, any other industrial sector would force layoffs and road blockades to force the Congress to move forward their agenda.

AndresFacing the biggest crisis since filling the seat vacated by her husband, President Cristina Fernandez de Kirchner announced yesterday that a grain export tax increase that has unleashed months of protests by farmers will be debated by Congress.

Fernandez, whose party dominates both chambers, said she will send the proposal to legislators to give it "more democratic support".

http://www.guardian.co.uk/world/2008/jun/18/argentina

Tessan

06-18-08, 14:07

Deberias conocer mas la realidad de nuestro campo antes de opinar de forma erronea.

Suma muy simple:

Impuesto a las ganancias: 35%

I. V. A.: 21% (lo perdemos)

Retenciones hasta el 11 de Marzo /2008: 35%

Retenciones Moviles: del 9 al 11%

Total: 35 + 21 + 35 + 9 = 100 o sea rentabilidad CERO"If these numbers are accurate at all, it explains why Argentines cheat on there taxes so much. If they did not, they would be out of business!

Tessan

06-18-08, 15:08

When you set economic policies, you choose certain goals to accomplish as of your "political agenda" (or at least you are supposed to do so) When setting such priorities, unavoidably some sectors get favored while others not.

What I mean is that "What is good for Argentina" doesn't has the same meaning for a university researcher, an export-oriented farmer or a manufacturer who sells to the domestic market.

AndresThe government should do what grows the economy most. With the increased revenues, it can help out the "university researcher" or any other sector it want too.

The government taxes the farmer allot, because it is easy. They have to export their goods, and it can be taxed easily. By over taxing the farmers, it harms future growth, which will cause government income from the farmers to be less in the future, then it would be otherwise.

If the government take too much of the income the farmers make, there is no incentive for the farmers to spend money on irrigation, which cost allot, if you have to pipe in water, or spend allot of extra money on fertilizer. Or to bring on marginal land, since the cost are higher.

There is no reason why Brazil should produce so much more cattle then Argentina. Argentina has lots of pastures that are perfect for cattle. The government limits the profits, so the ranchers do not expand, since there is no point in spending money, when your profits are so limited. I saw an interview with a rancher that said, "what was the point of expanding his herd, since he could not know when he can export anything. Or if the government allows some exports, high export tax that makes outbound beef too costly for many foreign buyers. So ranchers must keep selling 80 percent of their meat to swamped local markets where profits as well as prices are low. So there is no point in expanding."

The government would be better off subsidizing beef for local consumption, and letting production grow. Over time, the extra income form the taxes, will exceed the cost of the subsidy. And there would be more hard currency coming into Argentina.

In 2007, Argentina's cattle herd was estimated at 51.2 million head,.

In 2006, Brazilian cattle herd totaled 205.9 million head,

I do not have a 2007 number from Brazil.

There is not reason why Brazil produces so much more beef. Argentina should produce more then Brazil.

Andres

06-18-08, 19:39

Why not sending the bill to congress (which is a formality) in the first place?

That would have saved over 90 days of social unrest.If the government had done so, the unrest would have sprouted anyway.

Reality is currently proving that: Now that the bill is in the Congress, farmers point out that the CFK supporting block may get through it on a fast-track manner, as if such procedure were not acceptable.

Andres

Andres

06-18-08, 20:15

The government should do what grows the economy most. With the increased revenues, it can help out the "university researcher" or any other sector it want too.History proves that the Argentine elite (as most elites of underdeveloped countries) are not interested at all in developing Argentina. They want to pay the least possible taxes and amass their savings abroad.

Again, "economic growth" may have different definitions. To some, it may mean growth in domestic consumption. To others, only the ability to make a lot of money and save it abroad.

The government taxes the farmer allot, because it is easy. They have to export their goods, and it can be taxed easily. By over taxing the farmers, it harms future growth, which will cause government income from the farmers to be less in the future, then it would be otherwise.First, taxing the farmer is not easy at all. AFIP inspectors have to discover irregularities on a vast area and face a much more aggressive attitude from small town dwellers. In fact, retenciones are not the best way to solve the problem, but a sound and COLLECTABLE income tax.

Second, farmers cannot take their land and bring it abroad. Thus, they are forced to sell their land or make it produce the most with the current rules. No such thing as "I don't like the rules, I don't produce more".

If the government take too much of the income the farmers make, there is no incentive for the farmers to spend money on irrigation, which cost allot, if you have to pipe in water, or spend allot of extra money on fertilizer. Or to bring on marginal land, since the cost are higher. There's an inverse problem: Since the high yields of MGOs bring devastating middle and long term effects to land fertility and water contamination, not controlling it would compromise the future of agriculture in Argentina.

There is no reason why Brazil should produce so much more cattle then Argentina. Argentina has lots of pastures that are perfect for cattle. The government limits the profits, so the ranchers do not expand, since there is no point in spending money, when your profits are so limited. I saw an interview with a rancher that said, "what was the point of expanding his herd, since he could not know when he can export anything. Or if the government allows some exports, high export tax that makes outbound beef too costly for many foreign buyers. So ranchers must keep selling 80 percent of their meat to swamped local markets where profits as well as prices are low. So there is no point in expanding."I'm surprised that the rancher didn't mention the Hilton quotas as the main limitation to export meat to Europe, the most important market. If we consumers know about it, he should also.

Also, take into account that the soy boom brought a strong disinterest into raising cattle, since it's much more profitable to plant soy (another nasty consequence of leaving such sector entirely to the market rules) Have you heard recently of the unprecedently big grass fires in Entre Ríos and Buenos Aires province? They were provoked mainly to free non-used land to raise cattle, since the best lots are reserved to soy.

That's one of the reasons to cap the income from soy to lure people away from it.

The government would be better off subsidizing beef for local consumption, and letting production grow. Over time, the extra income form the taxes, will exceed the cost of the subsidy. And there would be more hard currency coming into Argentina.Things don't work that way. First, as I mentioned above, those planting soy make much more money than raising cattle, so no subsidy would allow them to switch from soy easily. Second, in order to subsidy, the government needs to divert money from other accounts. Where to take it from? From taxes from manufactured goods industries? No sense at all. Third, agricultural exporters are not interested in investing domestically beyond the minimum infrastructure to operate, so why subsidizing them?

In 2007, Argentina's cattle herd was estimated at 51.2 million head,

In 2006, Brazilian cattle herd totaled 205.9 million head,

I do not have a 2007 number from Brazil.

There is not reason why Brazil produces so much more beef. Argentina should produce more then Brazil."Argentina" (meaning Argentine farmers) is better off planting soy (if we mean better off as getting more money from it) Why growing cattle under such conditions?

Andres

Andres

06-18-08, 20:28

Offcourse there would be less discontent and no public support. If the farmers then would block roads you could actually claim that they are out for a golpe del estado.

And offcourse a fast-track is unacceptable, use your common sense!Fast-track may not be the wisest way, but it's a legal one.

I guess that an open debate would be more fruitful, but if the official representatives vote for the CFK scheme, then I don't see much difference at all on the long run.

Andres

Argento

06-18-08, 22:34

Andres is an unrepentant Argentine and clings pretty close to the PJ position and attitude of the Kirchners. My friend Tessan and I come from free market backgrounds and our posts clearly express our background.

No matter what spin Andres cares to put on how wonderful the policies of the Kirchner government are, the fact remains that plays on these policies have not worked in the 50 years they have been in play. Inflation is quoted at a minimum of 34% by Argentine independent economists for the next 12 months and that is presupposing no more civil unrest. So there is a collapse in clear view. So the PJ policies will have failed again.

And Andres, in a recent post you made mention of the limited access Argentina has to the EC under the Hilton quotas. For the record, Argentina is short by 3500 tonnes this year. So your argument does not stand up. Command economies failed in all the socialist countries where they were instituted, so Andres, why do you think that they will work in this disfunctional mess of an economy?

Argento

Tessan

06-19-08, 00:08

History proves that the Argentine elite (as most elites of underdeveloped countries) are not interested at all in developing Argentina. They want to pay the least possible taxes and amass their savings abroad.

I do not expect them to do it out of the "goodness of their hearts". They do it because it make them more money. If they are allowed to make money, they want to make more, so they expand. They have no chose in paying the taxes, since they are collected when they export.

Again, "economic growth" may have different definitions. To some, it may mean growth in domestic consumption. To others, only the ability to make a lot of money and save it abroad. The only reason to save all your money abroad, is because you do not trust your government or banking system. During the banking crisis, people could not get their money out of their bank accounts. Also the banks change everyone's money from Dollars to pesos. So it can be understood why people like keeping money outside of Argentina. Those people who had money outside of Argentina then, where ok.

Even if people take their profits abroad, the revenues the government gets from the export tax, will provide a good benefit.

First, taxing the farmer is not easy at all. AFIP inspectors have to discover irregularities on a vast area and face a much more aggressive attitude from small town dwellers. In fact, retenciones are not the best way to solve the problem, but a sound and COLLECTABLE income tax. They just have to tax the exports, the farmers cannot get around it. Which is what the government is doing now.

Second, farmers cannot take their land and bring it abroad. Thus, they are forced to sell their land or make it produce the most with the current rules. No such thing as "I don't like the rules, I don't produce more". It is not that they do not like the rules, they do not produce, like some small child. It is, I am making a small profit, so no incentive for the farmers to spend money on irrigation, which cost allot, if you have to pipe in water, or spend allot of extra money on fertilizer. Or to bring on marginal land, since the cost are higher. Therefore it does not grow.

I'm surprised that the rancher didn't mention the Hilton quotas as the main limitation to export meat to Europe, the most important market. If we consumers know about it, he should also. Argento answered this already.

For the record, Argentina is short by 3500 tonnes this year. So your argument does not stand up.
Also, take into account that the soy boom brought a strong disinterest into raising cattle, since it's much more profitable to plant soy (another nasty consequence of leaving such sector entirely to the market rules) Have you heard recently of the unprecedently big grass fires in Entre Ríos and Buenos Aires province? They were provoked mainly to free non-used land to raise cattle, since the best lots are reserved to soy.

Things don't work that way. First, as I mentioned above, those planting soy make much more money than raising cattle, so no subsidy would allow them to switch from soy easily. Since the cattle men cannot make money, they are moving to soy, since it was the only real money maker.

In Brazil they produce 20-30% more soy then Argentina so why are the also producing 350-400% more cattle then Argentina? Why don't they just produce soy?

The reason is the cattle producers in Brazil can make money. Many Gauchos prefer to raise cattle as long as they can make good money, even if it is less then soy. It is a different way of life. My understanding is many argentine ranchers are in Brazil raising cattle, since they cannot make much money in Argentina.

Second, in order to subsidy, the government needs to divert money from other accounts. Where to take it from? From taxes from manufactured goods industries? No sense at all. Third, agricultural exporters are not interested in investing domestically beyond the minimum infrastructure to operate, so why subsidizing them? The reason the government taxes the meat exports is to keep domestic prices low. By doing that, they limit production. If they subsidized the meat price, it let the rancher make more money, they will expand, which will over time give the government more money. Under the present tax, there will be no expansion in cattle. The subsidy is necessary, since if prices of meat where to go up to international prices, the people would revolt.

The government says it has an $869 million dollar budget surplus this year, as tax income rose by more than 50 percent. I do not believe the government on this, since the governments dept load is going up. It makes no sense.

"Argentina" (meaning Argentine farmers) is better off planting soy (if we mean better off as getting more money from it) Why growing cattle under such conditions? Again Brazil produces more soy 20%-30% , and 350%-400% More cattle. Something is wrong with your logic. Why don't they just produce soy?

Tessan

06-19-08, 00:43

The rally is slated to begin at 3 p. M. Local time (1800 GMT) at the Plaza de Mayo in front of Government Palace. The rally is being supported by the nation's umbrella union group, the CGT, which is aligned with the ruling Peronist party.

To get workers there on time, banks closed at noon, while flights out of Argentina's international airport were to be canceled between noon and 7 p. M. The airline pilots' union leader, Pablo Biro, told news television channel Todo Noticias that the seven-hour strike would affect the nation's main air carriers, including Aerolineas Argentinas and LAN Airlines SA (LFL)

Meanwhile, schools curtailed afternoon bus services to allow drivers to attend the rally.

Government workers were also expected to attend the rally, although beleaguered government statistics agency INDEC, which has allegedly been doctoring inflation data since last year, said it will report its first-quarter gross domestic product report on time at 4 p. M. An INDEC spokeswoman said.

http://money.cnn.com/news/newsfeeds/articles/djhighlights/200806181131DOWJONESDJONLINE000674.htm

Tessan

06-19-08, 00:52

Buenos Aires - Argentine President Cristina Fernandez de Kirchner Wednesday berated striking farmers for being selfish and unwilling to pay higher export tariffs on their increasingly valuable crops. Speaking at a crowded pro-government rally in Buenos Aires a day after she decided to send the controversial tariff increase to Congress, she called upon striking farmers to "free the roads and let Argentines get back to producing and to working."

Fernandez spoke to an estimated crowd of more than 100,000 people - many of them belonging to trade unions and other organizations linked to the Peronist movement - at the central Plaza de Mayo in the Argentine capital, before the governing palace Casa Rosada, at a gathering attended by many governors and mayors.

The president's speech was to be broadcast live on the country's television.

She complained about the selfishness of striking rural producers and again justified the rise in agricultural export tariffs with the need to combat poverty and underdevelopment at home. The president accused the farmers of not seeing beyond their own interests to the needs of society around them.

She stressed that blockading roads and banging pots in street corners "solves nothing," and called the opposition to her government to build a political project that can get power in an election.

"We invite those who think they can do better, and there must surely be some, to democratically constitute a political party and in the next election call for the popular vote to carry out their policies," Fernandez said.

However, she complained about the behaviour of farmers' leaders "for whom no one voted and whom no one chose" in a crisis that has been ongoing since March and that has caused shortages of food and fuel across the country.

There was a minute's silence before the president's speech, to mourn the death of a young man who was hit in the head by a heavy street lamp post earlier Wednesday on the Plaza de Mayo, where he was planning to attend the rally.

The man, 21, was injured and taken to a nearby hospital, but died a few minutes after admission after suffering "severe head trauma," medical sources said. He had travelled to Buenos Aires for the rally from the northern Argentine province of Tucuman.

Argentine Chief of Staff Alberto Fernandez met with pro-government legislators Wednesday to discuss the chances of approval of the bill that would increase tariffs on farming exports - an issue that has been at the root of a farmers' strike since March.

Farmers' leaders were evaluating their response to the latest developments in the 99-day-old crisis. They complained that the bill could only be approved or rejected by Congress and could be debated, but no modifications were to be allowed in the wording.

Like the president, Alberto Fernandez called upon farmers to put an end to their protest.

"It is not possible to persist in this scheme of road blockades and of preventing the free transit of Argentines, which generates terrible consequences, like shortages of food and fuel," the chief of staff told Argentine radio.

The pro-government camp was worried about securing a majority for the bill, with pressure mounting on pro-Kirchner legislators - particularly those representing provinces with intense agricultural activity - to vote against the bill.

The latest strike by Argentine farmers, launched Sunday and which suspended the sale of grain for export, was set to end Wednesday. This is the fourth such strike in recent months.

The crisis has been brewing since March, when an increase in export tariffs for soybeans and sunflower went into effect, tying tariffs to soaring international market prices for food.

The average tariff on soy was increased from 35 to 46 per cent, at the current prices. The levy was initially intended apply to almost all of the surplus if the price for soybeans were to rise above 600 dollars a tonne, but the government has since modified this to set a tax ceiling.

Late Monday many people in Argentine urban areas engaged in so- called "cacerolazos" - banging pots and pans - and hooting horns to demand that the government settle the crisis. The farmers' protest has been cupled with fuel and food shortages, since trucks cannot move freely through the country's roads.

Argentina is the third-largest producer of soybeans in the world, after the United States and Brazil. More than 95 per cent of its production is exported.

Tessan

06-19-08, 01:00

In the foreign exchange market, the peso <ARSB=> strengthened thanks to Central Bank sales of dollars. The official interbank rate <ARS=RASL> appreciated 0.8 percent to 3.0325/3.0350 per dollar. In informal trade between foreign exchange houses, as measured by Reuters, the peso strengthened 0.24 percent to 3.1175/3.1200 per dollar <ARSB=>.

Central Bank President Martin Redrado on Wednesday defended the use of foreign reserves to manage the exchange rate.

"We've marked a clear trend, moderating expectations in the exchange market and we've assured systematic stability," he said at a conference organized by LatinFinance magazine in Buenos Aires. (Reporting by Jorge Otaola and Walter Bianchi, writing by Fiona Ortiz; editing by Gary Crosse)

Dickhead

06-19-08, 02:32

Unlike Tessan I am here on the ground and I was in the downtown area today. What is great about Argentina is that even when there are "strikes" and so forth you can still have fun. Like today. I took the train downtown and then the Subte to Lavalle and then I went to a whorehouse and had a great time. All the while I knew there was some plan to cut off Avenida de Mayo and 9 de Julio. So what? It just meant that instead of taking the #59 bus to my friend's house I had to either take the Subte or walk across 9 de Julio to take the #102, I chose the latter. All the (#146? #164? Some number) colectivos were on strike and all the "Escolares" buses were parked along Cerrito, and little traffic on 9 de Julio.

Still I was able to buy beer, fuck hookers, buy food, take the train, the bus, and the Subte. Now that could change but all this cut and paste from newspaper articles is a lot of bullshit. Taxis strike? Take a bus. Buses strike? Take a train. Trains on strike? Take a Subte. No beef in the store? Eat rice and fuck a hungry hooker.

The more the government intervenes in the currency market the more the chance the peso will collapse completely. If the peso collapses that will be a bad thing for a lot of people. But not for the average dollar or Euro holding monger. Mongering is a situation where the worse the economy, the better the mongering for those who are not broke. Furthermore we should be proud of being mongers at a point where we can help a desperate economic situation.

I think Jackson should ban the cutting and pasting of articles and should only allow the posting of links.

El Perro

06-19-08, 03:14

I think Jackson should ban the cutting and pasting of articles and should only allow the posting of links.Agreed, and get rid of Peter "cocksucking" Europa, or his latest transparent incarnation.

Gato Hunter

06-19-08, 05:46

Punter 127

06-19-08, 06:38

I think Jackson should ban the cutting and pasting of articles and should only allow the posting of links.I also agree copy and paste is really out of hand. I often wonder if you guys don’t know how to post a link or if you just think we’re too stupid to use it?

Punter 127

06-19-08, 12:34

I only post what I consider useful information. Cutting and pasting allows you to see the info in its entirety, without delay (some may choose to read a link at another time, then forget) And of course, the protesters have the option of ''blockage'' of those posters that copy and paste.-------Stupid Sid Thanks for saving us from ourselves, what would we do without you? I find it interesting that you quoted me and not Dickhead or Doggboy or Gato Hunter? All I did was agree with Dickheads comments. As for “-------Stupid Sid ” you said it, and you won ’t get any argument from me!

BTW ''blockage'' works both ways!

Exon123

06-19-08, 13:47

You can almost feel it, the peso's weaking.

Less than a years I give it and the peso will collapse and when it does we'll return to the "Golden Era" of Mongering in Argentina. Back to the days of $5 dollar "Beefe De Lomo", $50 dollar pussy at Madaho's, the golden days. Back then pussy was $30 dollars at Excedra and Pravado's.

All the economic data we're getting points to total collapse of the peso against world currencies and I don't believe they can hold out much longer.

K & C have borrowed their way to prosperity, with the Argentine economy oweing more money today than they did before the last "Crisis", and inflation running 25 to 30 percent. This is the reason for the huge fight over the export tax's, the government needs the money to float their expanding debt and the farmers want to keep it.

As DickHead states so brilliantly below, "Mongering is a situation where the worse the economy, the better the mongering "

Exon

MiddleAgeGuy

06-19-08, 18:10

Dickhead

06-19-08, 18:28

I have a hard time thinking of any other country that has tried so diligently to thwart their exports in this fashion. If anyone has some examples I would like to hear of them.

Thanks,

MAGHow about Cambodia / Kampuchea under the Pol Pot regime?

Argento

06-19-08, 19:06

Dickhead

06-19-08, 19:26

47,000 is not 700% greater than 6,400. It is only 634.375% greater.

Andres

06-19-08, 19:41

Protesting is also legalBlocking roads is not legal.

Andres

06-19-08, 20:01

No matter what spin Andres cares to put on how wonderful the policies of the Kirchner government are, the fact remains that plays on these policies have not worked in the 50 years they have been in play.If you really have lived for 30 years in Argentina, then you know that all policies from 1978 up to now are clearly not the same. Maybe you don't like them, but it's not serious to tag them with the same name.

So there is a collapse in clear view.I heard collapse calls since 2002, and I'm still waiting for it. Will things get harder? Sure, but still far from collapse. Some people would desire collapse, but that's another issue.

And Andres, in a recent post you made mention of the limited access Argentina has to the EC under the Hilton quotas. For the record, Argentina is short by 3500 tonnes this year. So your argument does not stand up. Command economies failed in all the socialist countries where they were instituted, so Andres, why do you think that they will work in this disfunctional mess of an economy?

Argento"Hilton quotas" is an excellent example of how regulated is the meat export market. I never claimed that these quotas were filled for 2008, but they surely were on previous years.

As of regulated or unregulated economies, I still have to see a truly unregulated economy. With very few exceptions (maybe Singapore) all systems have barriers to entry, para-legal regulations, etc.

Ironic enough that you trash on the Argentine socio-economic system and business climate, but you continue living there since a very, very long and still being a businessman.

Andres

Andres

06-19-08, 20:16

A lot has been said about the agricultural retentions. The fact is that almost anything that can limp accross the Argentina border for sale has a retention and / or export tax tagged on to it now.

At current world oil prices, Argentina oil producers are now looking at a 70% retention and when comparing residential gas prices to the price of imported gas from Bolivia, it amounts to over a 90% retention on gas. Those retentions do not distiguish if the stuff is exported or not, which hardly any is anymore. Similar stories on gasoline, diesel, propane, you name it.

On top of that, there are the royalties and taxes to be paid as any business would expect.

There is no doubt that these retentions are the quickest way to bring Mega $ into the Government where tax evasion is a national sport.

Unfortunately, it is a disincentive to do develop anything in the country and if it keeps up, one may see the country importing everything as the incentive to make anything in the country collapses. Well, there will be a few months of retained retentions to buy those imports before it all collapses.

I have a hard time thinking of any other country that has tried so diligently to thwart their exports in this fashion. If anyone has some examples I would like to hear of them.

Thanks,

MAGThat's an interesting point, thanks for sharing.

In fact, I see much more trouble on the artificial oil price than on the retenciones for food. Sooner or later the country will need to fully import oil at international prices, and then the society will need to choose on either raise prices to improve prospection or to significantly reduce consumption (Argentines are paying less than half of what I pay per liter) And without oil, the economy cannot run.

I read an article last week that mentioned that, on different degrees, every single country applies barriers to export some goods (not as evident as retenciones, but alike in their objectives) The toughest one I read about was on 18th Century Britain, where those caught exporting raw cotton suffered the mutilation of their right hand.

Andres

Argento

06-19-08, 20:20

Blocking roads is not legal.However if you are a picketer such as D'Elia or an anti-papalera in Gualeguaychu, then closing off roads is OK. Interesting that those particular parties broadly support the Kirchner politics. So it's OK if you support the Kirchners, but a hanging offence if you don't.

Argento

Andres

06-19-08, 20:42

I do not expect them to do it out of the "goodness of their hearts". They do it because it make them more money. If they are allowed to make money, they want to make more, so they expand.They don't need more money. After reading Argentine history from different sources, you will find a handful of reasons that explain such behavior.

It is not that they do not like the rules, they do not produce, like some small child. It is, I am making a small profit, so no incentive for the farmers to spend money on irrigation, which cost allot, if you have to pipe in water, or spend allot of extra money on fertilizer. Or to bring on marginal land, since the cost are higher. Therefore it does not grow.Reality proves that agricultural production and conditioning of land to plant soy have boomed on the las years. How does this reality fit with your argument above?

Since the cattle men cannot make money, they are moving to soy, since it was the only real money maker.It was the MOST money maker, not the "only" one. Otherwise, most of the milk and cattle industry would be broken, which is not the case.

In Brazil they produce 20-30% more soy then Argentina so why are the also producing 350-400% more cattle then Argentina? Why don't they just produce soy?

The reason is the cattle producers in Brazil can make money. Many Gauchos prefer to raise cattle as long as they can make good money, even if it is less then soy. It is a different way of life. My understanding is many argentine ranchers are in Brazil raising cattle, since they cannot make much money in Argentina. Another reason may be that Brazil has 4 to 5 times the population of Argentina (which the country has also to feed) and 2 to 3 times its area. Also, I still have to see that a Brazilian cattle producer makes more money because, for what it is related to soy, Brazilians don't pay retenciones but their revenues from soy exports are even lower than their Argentine counterparts.

The subsidy is necessary, since if prices of meat where to go up to international prices, the people would revolt. Exactly. That's one of the reasons. You see that happening in Senegal and Haiti.

Again Brazil produces more soy 20%-30% , and 350%-400% More cattle. Something is wrong with your logic. Why don't they just produce soy?How many million tons of meat does export Brazil, and how many does export Argentina? Without those numbers, we cannot seriously find an answer to your question.

Andres

Argento

06-19-08, 20:43

47,000 is not 700% greater than 6,400. It is only 634.375% greater.Pedant!

Argento

Tessan

06-19-08, 20:48

That's an interesting point, thanks for sharing.

In fact, I see much more trouble on the artificial oil price than on the retenciones for food. Sooner or later the country will need to fully import oil at international prices, and then the society will need to choose on either raise prices to improve prospection or to significantly reduce consumption (Argentines are paying less than half of what I pay per liter) And without oil, the economy cannot run.

AndresThere is no incentive for anyone to spend big money exploring for oil in Argentina because of the government policies.

Dickhead

06-19-08, 20:55

47,000 is not 700% greater than 6,400. It is only 634.375% greater.Pedant!

ArgentoAlso I am finding much higher per capita income / GDP figures than you are quoting, including $13,300 (for 2007) on the CIA's website. It could be a case of different sources using different definitions. Here is a link to my source:

https://www.cia.gov/library/publications/the-world-factbook/geos/ar.html

Another source, whose quality I cannot vouch for:

http://siakhenn.tripod.com/capita.html

gives $13,000 and labels this per capita income, whereas the CIA site labels it per capita GDP.

Andres

06-19-08, 21:06

Andres,

This week's edition of 'The Economist' has an article on p.48 entitled "HOCUS POCUS Argentina's way with sums" with a sub heading,'The real-world consequences of producing unreal inflation numbers'. The article ought to be required reading for all forum members who have posted on this thread following along the general philosophies of Andres. They do not put any credibility to the national statistics or to the Peronist policies of the Kirchners. And for a general comparison, in something I read yesterday, probably Bloomberg, the per capita income of Argentina is U$6400 and in the USA, U$47,000. Even the mathmatically challenged Andres can work out that the USA system, (ie Europe, North America, Japan, Australia etc) delivers to their citizens a 700% greater per capita income and that is certainly reflected in their living standards.

The article specifically links the Kirchner's policies to stagnant wages and the increase in poverty and income inequality, all the direct opposite of what those policies purport to want to achieve.

So Andres, invest ARG$10, and see beyond your hip-pocket horizon.

Argento"mathematically challenged Andres"? Wow, that's what I call a classy way of stating disagreement.

I engage in respectful discussions only, regardless of my dislike to the other's participant point of view. I will grant you another opportunity to keep this conversation under at least the minimum acceptable standards of respect. Next insult, you get into my ignore list and it's the end of that.

I don't understand what the per-capita income issue has to do with all this discussion of retenciones. Argentina's one is lower than US and most Western Europe countries ones but higher than those of other Latin American nations that currently apply policies aligned to "international investors" (Colombia and Peru, for instance) Therefore, we cannot get much from it, specially when agricultural subsidies in Europe and the US are famous for distorting market rules (it was mentioned several times during the last Food Crisis Summit in Rome)

By the way, what does The Economist say about those EU subsidies?

Andres

Andres

06-19-08, 21:13

There is no incentive for anyone to spend big money exploring for oil in Argentina because of the government policies.That's true, there isn't.

If we take the recent history as a clue, even if lifting such taxation rules, it's not clearly obvious that prospection would take place without subsidies and / or additional incentives. As far as I know, when YPF was privatized in 1992, the main oil fields remaining then (Puesto Hernandez, for instance) are the same top ones today.

Andres

Andres

06-19-08, 21:24

However if you are a picketer such as D'Elia or an anti-papalera in Gualeguaychu, then closing off roads is OK. Interesting that those particular parties broadly support the Kirchner politics. So it's OK if you support the Kirchners, but a hanging offence if you don't.

ArgentoYour point is valid because blocking roads is not correct. However, I distinguish pretty clearly the HARM provoked by losing 2 hours stuck in a "piquete" and that provoked by blocking any kind of commercial good for months. By any means, the latter one is more serious, especially if protesters have WAY many more means to voice up their disagreement (access to media, to opposition leaders, voluntarily holding of sales, etc)

Andres

Tessan

06-19-08, 22:51

That's true, there isn't.

If we take the recent history as a clue, even if lifting such taxation rules, it's not clearly obvious that prospection would take place without subsidies and / or additional incentives. As far as I know, when YPF was privatized in 1992, the main oil fields remaining then (Puesto Hernandez, for instance) are the same top ones today.

AndresThe fact that the government keeps changing the rules, is what keeping investment away from oil exploration in Argentina.

This is from the US government report.

[snip]

In late 2006, Economic Ministry Resolution 776 abolished export tax exemption enjoyed by oil companies operating in Tierra del Fuego Province.

[snip]

Other regulatory changes in 2002 added to creditor insecurity. The GoA announced in May 2002 that an emergency decree passed in late 2001 had voided the presidential decree that authorized oil and gas companies to keep 70 percent of their foreign exchange revenues offshore. This decree formed the financial basis for most foreign investment in the Argentine oil sector. The GoA's discovery that the decree had been voided inadvertently months before came at a time when the government of Argentina was worried about its access to foreign exchange and the devaluation of the peso. When the peso began to appreciate, the government of Argentina issued a new decree that gave the industry the same right to withhold 70 percent of revenues starting January 1, 2003, but the industry remains liable for failing to repatriate 100 percent of its revenues during the 13-month period from December 2001 and December 2002. The Central Bank opened proceedings against some oil and gas producers in 2004 for alleged criminal breach of the exchange regime.

The GoA issued a decree de-pesifying foreign currency-denominated contracts of foreign firms doing business in Argentina in 2003, but then withdrew the decree and said it was a mistake. In the energy sector, the GoA took measures to avoid energy shortages that arose from the increase in demand for natural gas and electricity in 2004, including ordering reductions in natural gas exports to Chile and electricity exports to Uruguay.

[snip]

There is concern that the above mentioned GoA actions in the energy sector, coupled with the GOA's efforts to control retail prices of fuels, have created disincentives for companies to invest in energy exploration and infrastructure. Inadequate investment in those areas could, in turn, result in energy supplies not keeping pace with demand generated by Argentina's rapid economic growth.

http://www.state.gov/e/eeb/ifd/2008/101776.htm

Dickhead

06-19-08, 23:28

I love Argentina but I would not invest jack shit. Ni siquiera un centavito. That goes for all sectors. Todo trucho.

Tessan

06-20-08, 01:16

They don't need more money. After reading Argentine history from different sources, you will find a handful of reasons that explain such behavior.I will agree to disagree with you on this. I believe if they can make allot more money, they will.

Reality proves that agricultural production and conditioning of land to plant soy have boomed on the las years. How does this reality fit with your argument above?Since prices are high that last few years, they should be investing to increase production to make more money. Soy production was growing about 10% a year.

It was the MOST money maker, not the "only" one. Otherwise, most of the milk and cattle industry would be broken, which is not the case.They are not broke, but they are not expanding. They may even be getting smaller. When I was in Argentina a month ago, I saw on TV dairy farmers taking dairy cows to slaughter, in protest. They said they could not make money, with the government set milk price.

Another reason may be that Brazil has 4 to 5 times the population of Argentina (which the country has also to feed) and 2 to 3 times its area. Also, I still have to see that a Brazilian cattle producer makes more money because, for what it is related to soy, Brazilians don't pay retenciones but their revenues from soy exports are even lower than their Argentine counterparts.Retenciones are the reason for the strike.

Exactly. That's one of the reasons. You see that happening in Senegal and Haiti.I agree, the government cannot let beef prices go to international prices. So if they want production to increase, they will have to subsidize the local meat price. If they subsidized the meat price, tax income from the exports, over time will grow and will cover the subsidy, and make the government money.

How many million tons of meat does export Brazil, and how many does export Argentina? Without those numbers, we cannot seriously find an answer to your question.

AndresBrazil is the world's biggest beef exporter, sending abroad almost 2.3 million tones per year, a third of total exports around the globe. Last year it earned 4.5 billion dollars from the trade.

http://www.eubusiness.com/news-eu/1202945521.32/

Projected Argentine beef exports for 2008 remain unchanged at 535,000 tons, a similar volume to last year. The Argentine government (GOA) continues to monitor and control beef exports closely. In order to keep domestic inflation under control, the GOA keeps a well-supplied domestic market by limiting exports whenever needed.
http://www.cattlenetwork.com/International_Content.asp?contentid=203822

So Brazil exports about 429.06% more beef then Argentina, when they let them export.

Argento

06-20-08, 10:18

Also I am finding much higher per capita income / GDP figures than you are quoting, including $13,300 (for 2007) on the CIA's website. It could be a case of different sources using different definitions. Here is a link to my source:

https://www.cia.gov/library/publications/the-world-factbook/geos/ar.html

Another source, whose quality I cannot vouch for:

http://siakhenn.tripod.com/capita.html

Gives $13,000 and labels this per capita income, whereas the CIA site labels it per capita GDP.My figures are from Bloomberg's Country profile sheet. Much the same numbers are in 'THE ECONOMIST' pocket book of figures for last year.

Argento

Argento

06-20-08, 10:21

Your point is valid because blocking roads is not correct. However, I distinguish pretty clearly the HARM provoked by losing 2 hours stuck in a "piquete" and that provoked by blocking any kind of commercial good for months. By any means, the latter one is more serious, especially if protesters have WAY many more means to voice up their disagreement (access to media, to opposition leaders, voluntarily holding of sales, etc)

AndresAh! Only a little bit pregnant!

Argento

Argento

06-20-08, 10:37

[QUOTE=Andres]"mathematically challenged Andres"? Wow, that's what I call a classy way of stating disagreement.

I engage in respectful discussions only, regardless of my dislike to the other's participant point of view. I will grant you another opportunity to keep this conversation under at least the minimum acceptable standards of respect. Next insult, you get into my ignore list and it's the end of that.

I don't understand what the per-capita income issue has to do with all this discussion of retenciones. Argentina's one is lower than US and most Western Europe countries ones but higher than those of other Latin American nations that currently apply policies aligned to "international investors" (Colombia and Peru, for instance) Therefore, we cannot get much from it, specially when agricultural subsidies in Europe and the US are famous for distorting market rules (it was mentioned several times during the last Food Crisis Summit in Rome)

By the way, what does The Economist say about those EU subsidies?

Andres[/ QUOTE]Against the subsidies.

The most successful economy in South America, on a per capita basis is Chile. Open to investment, export oriented and a population that is increasingly educated and a currency that is remarkable in its stability. So why not use that as your example. And to further the point. 18 years ago, Chile was none of these and had a per capita base below Argentina. Now it has an appreciating currency (against the U$) education rated highest in South America and a per capita income much greater than Argentina. And surprise, surprise; little corruption, minimum crime and a law abiding citizenship.

Argento

Argento

06-20-08, 10:53

If you really have lived for 30 years in Argentina, then you know that all policies from 1978 up to now are clearly not the same. Maybe you don't like them, but it's not serious to tag them with the same name.

Ironic enough that you trash on the Argentine socio-economic system and business climate, but you continue living there since a very, very long and still being a businessman.

AndresClarification. Haven't lived here for 30 years. Have lived here for 1 year 19 years ago and also for the past 3 years. But I have been continuously involved here for 20 years. And haven't seen any improvements in the lives of the people and certainly a great drop off in education standards, massive increase in crime and a deplorable decline in business ethics, which were awful to start with.

I guess I am here because I can extract a profit here, I guess much the same reason that you work off-shore, it suits you financially, even though in your heart of hearts, Argentina is the greatest place in the world to live, make money and have a safe, contented life. The envy of the rest of the world.

Argento

Dickhead

06-20-08, 14:29

Brazil is the world's biggest beef exporter, sending abroad almost 2.3 million tones per year, a third of total exports around the globe. Last year it earned 4.5 billion dollars from the trade.

http://www.eubusiness.com/news-eu/1202945521.32/

Projected Argentine beef exports for 2008 remain unchanged at 535,000 tons, a similar volume to last year. The Argentine government (GOA) continues to monitor and control beef exports closely. In order to keep domestic inflation under control, the GOA keeps a well-supplied domestic market by limiting exports whenever needed.

http://www.cattlenetwork.com/International_Content.asp?contentid=203822

So Brazil exports about 429.06% more beef then Argentina, when they let them export.Some of you guys really aren't too good with numbers. 2.3 million is 330% more than 535 thousand, not 429%. Sort of hurts your credibility.

Tessan

06-20-08, 15:27

Some of you guys really aren't too good with numbers. 2.3 million is 330% more than 535 thousand, not 429%. Sort of hurts your credibility.Your are right, I should have said, that Brazil exports 430% of what Argentina exports. Since 2300000/535000=4.29906. To say more, I would have had to subtract the 535 first.

Don't think my credibility is harmed.

Tessan

06-20-08, 15:48

Argentina Agro Strike to End.

Buenos Aires, June 20 (Prensa Latina) Argentina's four main agricultural employers organizations ratified the strike they have been holding against the mobile retention scheme on exports will end Friday at 24:00 local time.

http://www.plenglish.com/article.asp?ID=%7B5F359246-DD63-4FE3-B875-9C6CD399912D%7D)&language=EN

It's being reported on a Cuban news site. Non of the big news services have anything on this yet. If it's true, it should show up soon.

Exon123

06-23-08, 13:35

What do you think Sidney?

http://buenosaires.en.craigslist.org/apa/728914158.html

Should we jump on this one?, we might even get Jackson as a Tennet

Exon

BA Luvr

06-25-08, 00:46

Argentina has been in the news a lot lately. These are two articles from The Wall Street Journal on the declining economy and the state of the currency. Makes me glad I didn't buy property there.

Tessan

06-25-08, 17:20

'This government won't allow itself to be seen stepping back,'' said Rosendo Fraga, head of the Buenos Aires-based Nueva Mayoria polling company.

http://www.bloomberg.com/apps/news?pid=20601086&sid=aMshkQwMMhZ4&refer=latin_america

Tessan

06-25-08, 17:34

Argentina is one of the 'breadbaskets' of the world. It exports more soybean oil than anyone else. It's also the second-biggest corn exporter (after the United States) the third-largest beef exporter, and the fifth-biggest wheat exporter. Argentina's farm exports have risen 48.2% since 2003. Farm exports were the main reason Argentina was able to rebound so fast from its economic meltdown in 2002.

With the bull market in commodities making farmers rich, you'd think Argentina would be one of the most prosperous countries on Earth right now.

Unfortunately, when the Argentine government saw how much money farmers were making, it slapped an export tax on food products. Farmers pay 46% to export soybeans right now. And if soybean prices keep rising, the tax will jump over 50%. The government has banned beef exports.

In Argentina, farmers are the upper class. The people there think of farmers as rich landowners. By taking the farmers' money with these export taxes and giving it to poor people in the cities, the Argentine government figured it would gain popularity. The politicians also figured the taxes would reduce exports, keep food in the country, and drive down prices. They'd win popularity that way, too.

They didn't count on the farmers.

[snip] called the farmers greedy. Last week, Interior Minister Florencio Randazzo said farmers were "intolerant, ungenerous and anti-democratic." He called them "coup-mongers."

[snip], Argentina now has more debt than when it announced the largest-ever debt default in 2001.

[snip]

Last month, I met an Argentine farmer in Paraguay. Paraguay is Argentina's neighbour. The farmer had come to buy millions of dollars worth of Paraguayan farmland on behalf of a small farming village in Argentina. This village used to be one of the richest farming towns in northern Argentina, he told us. But the government's new laws are ruining the way of life. So the town's farmers pooled their money together and sent this guy to Paraguay to buy up as much land as possible.

Paraguay's land is just as fertile; it's cheaper than Argentine land and the political risk there is a mere fraction of Argentina's political risk. This is why Paraguay's farmland is about to soar and Paraguay's currency – the guarani – is one of the top three best-performing currencies in the world so far this year.

I also like Brazilian meatpackers. Brazil's food industry is stealing Argentina's market share. Meanwhile, the shortage of Argentine food in world markets is supporting prices. And Brazilian meatpackers are earning higher profit margins.

http://www.moneyweek.com/file/49348/how-to-profit-from-argentinas-farming-crisis-.html

Tessan

06-27-08, 15:54

BUENOS AIRES (Reuters) - The world wants more wheat, but parched soils and anger over government intervention in the market could lead Argentine farmers to sow one of their smallest crops in 15 years.

Forecasts show farmers dedicating at least 10 percent less land to the grain this season following two years of government anti-inflation policies such as export curbs and price caps.

[snip]

"I've reduced my wheat area and it's not for climatic reasons, it's for political reasons," said Sean Cameron, farmer and president of the wheat growers' association AAPROTRIGO. "For more than two years we haven't received fair value for our crops. Some of us have become frustrated."

The country's center-left government has repeatedly halted wheat exports over the last two years as a way to keep a lid on the prices of everyday staples such as bread and pasta in a nation where nearly one in four people is poor.

As well as freezing exports for months at a time, which depressed local prices, officials irked farmers by setting maximum prices in the local market.

A three-fold increase in fertilizer costs this year is aggravating farmers' uncertainty over what price they will get Cameron said.

http://www.reuters.com/article/reutersEdge/idUSN2748624820080627

Monger514

06-27-08, 18:02

It's strange, because historically price controls and market interventions work so well.

(cough, cough)

Andres

06-28-08, 01:14

The fact that the government keeps changing the rules, is what keeping investment away from oil exploration in Argentina.Changing rules is only one part of a complex equation. If there were huge profits to be made, investors wouldn't care that much about changing rules.

For instance, the article you posted mentioned several "urgence decrees" and presidential decrees that set the investment frame. During the 90s, Menem issued thousands of "emergency decrees", something not very reliable from a legal point of view since an opposite congress could quickly overturn them. However there was an "investment craze" (which lasted as much as the process of privatization of public companies lasted, not a concidence from my point of view)

Andres

Andres

06-28-08, 01:34

I will agree to disagree with you on this. I believe if they can make allot more money, they will.You will gain more by reading about Argentine history than by just "believing". But that's your call.

Since prices are high that last few years, they should be investing to increase production to make more money. Soy production was growing about 10% a year.Of course, And they will continue to do so even if retenciones keep the current level.

They are not broke, but they are not expanding. They may even be getting smaller. When I was in Argentina a month ago, I saw on TV dairy farmers taking dairy cows to slaughter, in protest. They said they could not make money, with the government set milk price.If you take just what you see on TV to make a sound assessment, then there isn't much reason in discussing about this issue because you need to compare figures and arguments from different sectors.

I read articles that soy is slowly replacing other agricultural business due to the impressive short-term benefits. This is one of the reasons for a presumably stagnant cattle industry.

I agree, the government cannot let beef prices go to international prices. So if they want production to increase, they will have to subsidize the local meat price. If they subsidized the meat price, tax income from the exports, over time will grow and will cover the subsidy, and make the government money.That's exactly what the government is intending to do.

Andres

Andres

06-28-08, 01:43

Against the subsidies.

The most successful economy in South America, on a per capita basis is Chile. Open to investment, export oriented and a population that is increasingly educated and a currency that is remarkable in its stability. So why not use that as your example. And to further the point. 18 years ago, Chile was none of these and had a per capita base below Argentina. Now it has an appreciating currency (against the U$) education rated highest in South America and a per capita income much greater than Argentina. And surprise, surprise; little corruption, minimum crime and a law abiding citizenship.

ArgentoChile is not as open as you may believe. Even during the Pinochet era, speculative capital were kept ashore by regulating foreign investments. Also, Pinochet didn't privatize sensitive industries such as copper, and it didn't come to rescue of then-failed companies such as LAN Chile.

Per capita income is higher, but you see a little less than 1 million Chilean immigrants living in Argentina and not the opposite. So those figures aren't necessarily correlated with a higher standard of living. Same would happen if you compare per capita GDP between Saudi Arabia and the US. Would you say that Saudi Arabians live better than Americans?

I would prefer to stick to the subject in discussion (retenciones)

Andres

Andres

06-28-08, 01:49

Clarification. Haven't lived here for 30 years. Have lived here for 1 year 19 years ago and also for the past 3 years. But I have been continuously involved here for 20 years. And haven't seen any improvements in the lives of the people and certainly a great drop off in education standards, massive increase in crime and a deplorable decline in business ethics, which were awful to start with.

I guess I am here because I can extract a profit here, I guess much the same reason that you work off-shore, it suits you financially, even though in your heart of hearts, Argentina is the greatest place in the world to live, make money and have a safe, contented life. The envy of the rest of the world.

ArgentoIf you are making a profit, then the Argentine business environment isn't as awful as you claim it to be.

I don't know where did you get the idea that I believe that Argentina is the greatest place in the World to live. Are you sure you read such a statement from one of my previous posts?

Andres

Andres

06-28-08, 02:04

With the bull market in commodities making farmers rich, you'd think Argentina would be one of the most prosperous countries on Earth right now.C'Mon Tessan. You REALLY believe that a short term increase in World commodities prices brings prosperity to a country? It takes decades of stability to get to that point.

Last month, I met an Argentine farmer in Paraguay. Paraguay is Argentina's neighbour. The farmer had come to buy millions of dollars worth of Paraguayan farmland on behalf of a small farming village in Argentina. This village used to be one of the richest farming towns in northern Argentina, he told us. But the government's new laws are ruining the way of life. So the town's farmers pooled their money together and sent this guy to Paraguay to buy up as much land as possible. "Ruining the way of life"? That's clearly an exaggeration. Even with the retenciones, those who rent the land and those who exploit it are making record profits. Maybe they are uncomfortable by not being able to not impose their rules, but that's another issue.

Paraguay's land is just as fertile; it's cheaper than Argentine land and the political risk there is a mere fraction of Argentina's political risk. This is why Paraguay's farmland is about to soar and Paraguay's currency – the guarani – is one of the top three best-performing currencies in the world so far this year. I wouldn't convert my savings in Guaranies, for sure.

As of Paraguayan rural reality, have you read recently (1 week ago) about the sizing of farms by dispossessed peasants? Lugo just won the elections, and their support was an important factor. Real trouble on the horizon there.

Andres

Dickhead

06-28-08, 02:25

"Last month, I met an Argentine farmer in Paraguay. Paraguay is Argentina's neighbour."

We knew that.

"The farmer had come to buy millions of dollars worth of Paraguayan farmland on behalf of a small farming village in Argentina. This village used to be one of the richest farming towns in northern Argentina, he told us. But the government's new laws are ruining the way of life. So the town's farmers pooled their money together and sent this guy to Paraguay to buy up as much land as possible."

Nothing like basing an opinion on a sample size of one. Hope it works out for those guys.

"Paraguay's land is just as fertile;"

Rolling on the floor laughing my ass off at this statement.

"The political risk there is a mere fraction of Argentina's political risk."

Ever heard of Alfredo Stroessner? Solano Lopez father and son?

"Paraguay's currency – the guarani – is one of the top three best-performing currencies in the world so far this year."

Now there is an example of long-term critical thinking that should be examined pretty closely. You have a bid-ask spread of 5% between Guaranis and dollars, and between Argie pesos and Guaranies it is about the same. You might want to keep convertibility in mind.

Tessan

07-03-08, 00:48

You will gain more by reading about Argentine history than by just "believing". But that's your call.History sometime is a predictor of the future, sometime not. Argentina went from the world's 10th wealthiest nation in 1913 to the world's 36th wealthiest in 1998. (Economist Intelligence Unit, EIU Country Profile, 1996-1997, p. 17.) So if history repeats itself it should become the 10th wealthiest nation again? Don't think it will happen with the countries present policies.

Of course, And they will continue to do so even if retenciones keep the current level.The tax want up, so the level should go down.

If you take just what you see on TV to make a sound assessment, then there isn't much reason in discussing about this issue because you need to compare figures and arguments from different sectors.

I read articles that soy is slowly replacing other agricultural business due to the impressive short-term benefits. This is one of the reasons for a presumably stagnant cattle industry.I think it is a bigger reason is that their are price controls on meat, and exports are stopped when ever the government wants. Since soy makes money, people are giving up on cattle.

I wrote this before.

There is no reason why Brazil should produce so much more cattle then Argentina. Argentina has lots of pastures that are perfect for cattle. The government limits the profits, so the ranchers do not expand, since there is no point in spending money, when your profits are so limited. I saw an interview with a rancher that said, "what was the point of expanding his herd, since he could not know when he can export anything. Or if the government allows some exports, high export tax that makes outbound beef too costly for many foreign buyers. So ranchers must keep selling 80 percent of their meat to swamped local markets where profits as well as prices are low. So there is no point in expanding."

That's exactly what the government is intending to do.If the government is changing from controlling prices, to allowing the cattle farmers to make more money, over time, it should increase production. It would be a big shift for this government.

Tessan

07-03-08, 01:01

C'Mon Tessan. You REALLY believe that a short term increase in World commodities prices brings prosperity to a country? It takes decades of stability to get to that point. Price have been going up for the last few years, production should go up too. It has not, since the government keeps trying to take all the extra profits from the farmers, by increasing taxes. The government is harming itself, for short term gains. Food price look like they will stay historically high, because of new demand from Asia, as well as bio fuels. Argentina should benefit from this, production should grow. But it is not.

"Ruining the way of life"? That's clearly an exaggeration. Even with the retenciones, those who rent the land and those who exploit it are making record profits. Maybe they are uncomfortable by not being able to not impose their rules, but that's another issue.Many Argentian farmers are buying up land in Uruguay and Paraguay, There must be a reason? Uruguay is considering limiting land sales to foreigners. Too much land is being brought up.

I wouldn't convert my savings in Guaranies, for sure.

As of Paraguayan rural reality, have you read recently (1 week ago) about the sizing of farms by dispossessed peasants? Lugo just won the elections, and their support was an important factor. Real trouble on the horizon there. Land is being brought up in both Uruguay and Paraguay. Think is has to do with the taxes being changed on exports from Argentina.

Tessan

07-03-08, 01:09

"Last month, I met an Argentine farmer in Paraguay. Paraguay is Argentina's neighbour."

We knew that.

Snip]

"Paraguay's land is just as fertile;"

Rolling on the floor laughing my ass off at this statement.I did not write the article, just posted it. The point of it had nothing to do with how fertile Paraguay is compared to Argentina. The point was that farmers that can, are moving out of Argentina to buy land abroad taking their skills with them. That article also mentioned that Paraguay farmers are using outdated farming methods, and are surprised when they see the yield the Argentinean farmers get from the same land.

Tessan

07-03-08, 01:12

According to Argentine political analysts Joaquin Morales Solá the court has no specific matter on the controversial Resolution 125, but two appeals which refer to export taxes and regional trade are ready for a ruling.

Basically the Court believes that any levies, whenever higher than a few percentage points, are taxes and therefore it is mandatory that they be considered by Congress. The 1994 Constitution is very strict in the issue of collecting moneys from citizens.

One of the two cases before the Court, presented by a fishing company refers precisely to export taxes and if they are effectively constitutional.

"Levies, o whatever they call them if percentages are above 25, to mention an excessive number, must necessarily be considered by Congress". Apparently and according to Morales Solá this is the prevailing opinion among the magistrates.

The farmers conflict detonated on March 11 when export levies were hiked well above 35% from an existing floor of over 25% , which not only means they are technically unconstitutional but also triggered a "senseless" four months plus conflict.

A second case refers to one of Argentina's main dairy exporters and levies on butter shipped to neighboring Paraguay, a founding member of Mercosur. The company argues that Mercosur guarantees the free circulation of goods, services and production among country members and the elimination of customs duties and non tariff restrictions to the circulation of goods, or any other equivalent restrictive decision. The Mercosur treaty also binds country members to macroeconomic and sector policies coordination between country members particularly regarding "foreign trade, agriculture and manufacturing".

The dairy case is also before the Mercosur arbitration tribunal, but if the Argentine Supreme Court rules that export taxes violate the block's foundation charter, the whole Kirchner administration stance would fall to pieces.

Whole article.

http://www.mercopress.com/vernoticia.do?id=13871&formato=HTML

Andres

07-03-08, 19:56

History sometime is a predictor of the future, sometime not. Argentina went from the world's 10th wealthiest nation in 1913 to the world's 36th wealthiest in 1998. (Economist Intelligence Unit, EIU Country Profile, 1996-1997, p. 17. So if history repeats itself it should become the 10th wealthiest nation again? Don't think it will happen with the countries present policies.History books go well beyond rankings and mere numbers. History books can give you many clues of why people behave the way they behave, why they apparently choose a set of alternatives over other, and especially why some policies work fine in some countries and some circumstances and not well in others.

Remember: This isn't the stock market, so short-term price tables published by Bloomberg, Forbes and such don't do the job for understanding very complex social issues.

The tax want up, so the level should go down.I don't get your point. What are you referring by "level"?

I think it is a bigger reason is that their are price controls on meat, and exports are stopped when ever the government wants. Since soy makes money, people are giving up on cattle.

I wrote this before.The dispute over retenciones is strictly limited to soy prices. Remember the famous "curve" that the government defined and that the farmers want to smooth.

If the government is changing from controlling prices, to allowing the cattle farmers to make more money, over time, it should increase production. It would be a big shift for this government.The problem from your reasoning is that meat is not only a commodity but also a basic ingredient of the Argentine food, and that Argentineans cannot afford meat at international prices. So, if farmers and all the related supply chain were given the choice of exporting or selling to the internal market, they would prefer exporting due to an obvious greater profit.

That's an example of how a country (or a part of its population) can become richer while many of its citizens become poor.

Andres

Andres

07-03-08, 20:06

Price have been going up for the last few years, production should go up too. It has not, since the government keeps trying to take all the extra profits from the farmers, by increasing taxes. The government is harming itself, for short term gains. Food price look like they will stay historically high, because of new demand from Asia, as well as bio fuels. Argentina should benefit from this, production should grow. But it is not.It seems that we have a different definition of "prosperity" and "Argentina".

To me, prosperity is something that goes far beyond a high price of a commodity for a long run. Prosperity is related to an important increase in purchase power from a vast majority of the population. I fail to see how the increase in soy price would benefit most of the Argentine population if taxes were taken away.

Also, "Argentina" may mean the whole population of just a social sector.

Many Argentian farmers are buying up land in Uruguay and Paraguay, There must be a reason? Uruguay is considering limiting land sales to foreigners. Too much land is being brought up. Another clue that explains that Argentine farmers aren't as broken as they claim. Otherwise, they wouldn't be able to buy land abroad.

Land is being brought up in both Uruguay and Paraguay. Think is has to do with the taxes being changed on exports from Argentina.It has to do more with extremely high prices of land in Argentina and an exceptional time of high profits for rural products.

Andres

Andres

07-03-08, 20:09

The point was that farmers that can, are moving out of Argentina to buy land abroad taking their skills with them.Really? I never heard of traditional families selling their thousands of hectares.

Andres

Tessan

07-05-08, 00:47

History books go well beyond rankings and mere numbers. History books can give you many clues of why people behave the way they behave, why they apparently choose a set of alternatives over other, and especially why some policies work fine in some countries and some circumstances and not well in others.

Remember: This isn't the stock market, so short-term price tables published by Bloomberg, Forbes and such don't do the job for understanding very complex social issues.Taxing things to a point where you limit production, does not work in any country.

Don't get your point. What are you referring by "level"?The taxes on soy went up, recently, so the level of soy production should go down in the future.

The dispute over retenciones is strictly limited to soy prices. Remember the famous "curve" that the government defined and that the farmers want to smooth.The new sliding scale tax on exports also applies to wheat, corn and sunflowers. The rate on soy is the highest.

The problem from your reasoning is that meat is not only a commodity but also a basic ingredient of the Argentine food, and that Argentineans cannot afford meat at international prices. So, if farmers and all the related supply chain were given the choice of exporting or selling to the internal market, they would prefer exporting due to an obvious greater profit.

That's an example of how a country (or a part of its population) can become richer while many of its citizens become poor.Suppose the Government taxes meat exports at 20%. And lets suppose that the price of meat in Argentina is selling at 40% less then international prices.

If the government subsidies the 20% of the international price of meat. Production of meat will increase, as it increases, the 20% export tax, will start to cover the locale subsidy. Eventually over time, Argentina can export more then it eats, which would give the government a profit.

The reason the government taxes the meat exports is to keep domestic prices low. By doing that, they limit production. If they subsidized the meat price, it let the rancher make more money, they will expand, which will over time give the government more money. Under the present tax, there will be no expansion in cattle. The subsidy is necessary, since if prices of meat where to go up to international prices, the people would revolt.

The government says it has an $869 million dollar budget surplus this year, as tax income rose by more than 50 percent. I do not believe the government on this, since the governments dept load is going up. It makes no sense.
There is no reason why Brazil should produce so much more cattle then Argentina. Argentina has lots of pastures that are perfect for cattle. The government limits the profits, so the ranchers do not expand, since there is no point in spending money, when your profits are so limited. I saw an interview with a rancher that said, "what was the point of expanding his herd, since he could not know when he can export anything. Or if the government allows some exports, high export tax that makes outbound beef too costly for many foreign buyers. So ranchers must keep selling 80 percent of their meat to swamped local markets where profits as well as prices are low. So there is no point in expanding."

Tessan

07-05-08, 00:59

It seems that we have a different definition of "prosperity" and "Argentina".

To me, prosperity is something that goes far beyond a high price of a commodity for a long run. Prosperity is related to an important increase in purchase power from a vast majority of the population. I fail to see how the increase in soy price would benefit most of the Argentine population if taxes were taken away.

Also, "Argentina" may mean the whole population of just a social sector.As production goes up, government income goes up, as income from export taxes go up. With the extra money, the government can spend more to help out the poor. No one is saying not to tax the farmers, only to tax them at a level that encourages an increased in production.

Another clue that explains that Argentine farmers aren't as broken as they claim. Otherwise, they wouldn't be able to buy land abroad. They might be using savings, or pooling money together. The fact that they are doing it, is bad for Argentina. Something is wrong with the present farm policy.

Andres

07-05-08, 14:50

The taxes on soy went up, recently, so the level of soy production should go down in the future.That would be beneficial on the long run, given the devastating side effects of transgenic soy and other GMO. Did you see the documentary "The World as of Monsanto" (Le Monde selon Monsanto, in its original) by the journalist MM Robin?

I think that we are running in circles with this discussion, specially as you insist on the meat market as open as any unregulated one, which is not the case, so I don't see any use in continuing this discussion.

Thanks,

Andres

Tessan

07-06-08, 03:03

The very tight 129-122 vote followed 18 hours of heated floor debate during which government legislators offered to simplify tax-refund procedures for small farmers, while opponents sought the taxes' total repeal. The Senate is scheduled to debate the measure beginning next Monday.

"We're still playing in the first half'' said Argentine Agrarian Federation president Eduardo Buzzi who added that "in the second half we're going to play in the Senate and if necessary we'll go to the courts, even to the Supreme Court'' to have the new taxes repealed.

Last March President Cristina Fernandez de Kirchner decreed a sliding-scale increase in export taxes on oilseeds and grains triggering months of protests from Argentina's biggest farm groups who suspended sales, blocked highways and caused sporadic food shortages. Argentina is among the world's main exporters of oilseeds and grains.

Two weeks ago in an effort to win support and overcome the stand off Mrs. Kirchner sent the bill to Congressional consideration where her administration has a comfortable majority in both houses and was expecting a smooth approval.

However during the protracted debate from Friday evening to Saturday midday some party members and others allies from Mrs. Kirchner's Front for Victory party openly opposed the measure, revealing new fissures in a traditionally solid political front.

To start with the Kirchner administration had to yield on several points to ensure a quorum for the discussion and mid way through the debate further accepted other amendments, mainly greater compensations for small farmers.

The new bill ensures compensations' system which leaves "85% of farmers" out of the original bill, said Agustin Rossi head of the Kirchner group in the Lower House.

Felipe Solá a former Agriculture minister and former governor of the province of Buenos Aires headed the group of over thirty members of Congress which almost turned the vote into a defeat for the government. He was repeatedly insulted and had a fist fight with one of Congress bell boys who called him "traitor".

Farmers contend the tax hike keeps them from reinvesting profits in production to meet rising demand and the sliding system curtails futures market operations and ends up being confiscatory.

The Kirchner administration argues that the windfall earnings from commodities should be redistributed among Argentina's poor and should also help to keep food prices affordable for Argentine pockets.

In spite of the defeat farmers said it had been an excellent "vote" and "proved that there were many corrections to be done to the original bill".

"It was an excellent vote particularly when we all know the government has such an overwhelming majority", said Mario Llambias from the Agrarian Confederation.

"Support from half the lower House is most gratifying, the hegemony is showing serious cracks" said Luciano Miguens from the Argentina Rural Society.

http://www.mercopress.com/vernoticia.do?id=13898&formato=HTML

Jes1959

07-06-08, 08:57

Argentina agricultural-export tax clears a hurdle.

By MarketWatch.

Last update: 4:13 a. M. EDT July 6, 2008

TEL AVIV (MarketWatch) - Argentina's legislative lower house on Saturday cleared the government's imposition of a new tax system for agricultural exports, media reports said.

The vote on the plan, which has prompted angry protests, roadblocks and riots by farmers, was 129-122, the reports say. The plan now moves to the Senate for review.

Farmers in the country say the tax has shrunk their profit margins. President Cristina Fernandez de Kirchner put the plan in place in March to keep food prices within the country from rising and to share the wealth with the poor and reduce poverty.

The plan creates a sliding scale of export taxes, with the scale tied to global commodity prices. The system replaced a fixed rate of 35%. The new system, for example, currently imposes a more than 40% levy on soybean exports as prices for the crop have soared, media reports say.

Fernandez two weeks ago sent the proposal to the Congress for ratification, but critics say that was just for show since her party controls a majority in both houses, the Associated Press reported. Nonetheless, during the debate on the plan, some in her party openly opposed the tax increase, AP reported. End of Story

http://www.marketwatch.com/news/story/story.aspx?guid=%7B6C5BE4D3%2D3360%2D46E9%2DBB6F%2DCB649B09A130%7D&siteid=rss

Tessan

07-07-08, 00:42

July 7 (Bloomberg) -- Argentine President Cristina Fernandez de Kirchner's bid to use the peso as a weapon to quell striking farmers may be on the verge of failing.

The country sold about $2.6 billion of foreign currency reserves in the past two months, breaking a five-year policy of buying dollars and sparking a 4.6 percent peso rally, the biggest since 2003. While the gains cut into profits of farmers who had caused food shortages to protest higher export taxes, they also added to the woes of manufacturers from leather-goods maker ZH SA to yarn producer TN & Platex.

Credit Suisse Group AG, Merrill Lynch & Co. And Barclays Plc are telling investors to sell the peso in a bet Fernandez will stop driving up the currency as Argentina's 5-year-old expansion falters. The peso will drop 4 percent in the next year to 3.2 to the dollar from 3.08, according to the median estimate of 13 analysts in a Bloomberg survey.

'A slowing economy will pressure the government into letting the peso weaken,'' said David Beker, a currency strategist at Merrill Lynch in New York. He forecasts the peso will slide to 3.25 by year-end.

Argentina will suffer the 'sharpest'' economic slowdown in Latin America, Merrill said in a June 27 report to clients. The firm cut its 2008 growth forecast for the country to 6.8 percent from 7.5 percent and its 2009 projection to 3.1 percent from 4.2 percent. The median estimate in a central bank survey of 57 economists published last month was for expansion of 7.5 percent this year and 5.5 percent in 2009.

Whole article.

http://www.bloomberg.com/apps/news?pid=20601086&sid=auhCXvcOhYgg&refer=latin_america

Tessan

07-07-08, 14:26

http://www.truthabouttrade.org/content/view/12021/54/

Brazil is doing things different then Argentina. They are helping their farmers.

Exon123

07-07-08, 16:57

Rate Argentine Peso Bid Ask.

USDARS=X 100 July 7 3.0270 302.7000 3.0270 3.0300

Looks as thow the dollar has lost about 5% against the peso in the last 90 days.

Exon

Exon123

07-11-08, 20:14

http://www.reuters.com/article/marketsNews/idARN1131396420080711?rpc=44

Exon

Tessan

07-12-08, 21:13

It isn't that the soybean industry in Argentina will go away. The prices are too attractive and the infrastructure too developed for farmers to abandon soybean production en masse, farmers say.

But local experts expect soybean acreage to remain flat in the next harvest cycle, which begins in September. And a reluctance to invest in fertilizer and other costly inputs will dampen yields. So because of the tax, Argentina will grow less, they say.

[snip]

Meanwhile, costs have doubled for herbicide and tripled for fertilizer since last year. Soybeans can grow without chemical nutrients in Argentina's fruitful soil, but yields will fall at least 20 percent.

Argentine farmers fear that prospective buyers will flock to more reliable competitors such as Brazil. So Roberto Costatini is bracing for the worst—again.

http://www.chicagotribune.com/business/chi-sun-crops-argentinajul13,0,2575831.story

InArgentina

07-16-08, 05:54

Sourced from www.rgemonitor.com

http://www.rgemonitor.com/latam-monitor/615/argentina_2008_is_the_already_high_inflation_rate_accelerating

Argentina 2008: Is the (already High) Inflation Rate Accelerating?

This is not a technical article. It just puts together some commonly known facts and asks some questions; it also includes some thoughts.

Facts (or, shall I say, Problems?:

Argentina's "un-edited" (I. E. True) 2007 annual inflation rate is in the 20-25% range.

Wage contract negotiations are presently taking place. It looks like unions are requesting wage increases starting at 30% and up.

Although claiming that the latter contract renewals might be biannual, unions are requesting to being able to renegotiate them every six months.

As the piece by Mark Turner (here) pointed out, the current account surplus results from (the still high) external demand; it is not due to the artificially undervalued currency.

Jose Antonio Ocampo (here) highlights how the mentioned surplus is mainly due to capital flows instead of a trade surplus.

Given all of the above, Argentina's authorities should be really worried (although the claim not to be. Why? Well, not only the inflation rate is high, but it looks likely to accelerate. This can be seen by facts (1) and (2) Together they imply that unions are probably observing a reduction in the purchasing power of wages (past and future. Since any wage negotiation in the context of an inflationary process should be both backward- and forward-looking, this means that: (I) not even "official" unions believe in the massaged official inflation rate—they understand that the true inflation rate experienced by workers have been higher that the government's figure; (ii) they anticipate a high inflation rate for this year (probably not lower than last years'; my "gut feeling" guess in the 35-40% range); and (iii) there are reasonable chances to expect the inflation rate to accelerate, which generates the need to have a sort of "escape of clause" to re-negotiate every six months.

You do not need to be an economist to realize that a higher frequency of contract renewal is based on an expected increase in the rate of change of prices. Unions sit at the negotiation table trying to recover the lost purchasing power due to past inflation (the backward-looking component) and taking into account their expected inflation (the forward-looking component. And like I said, the faster they expect inflation to increase, the sooner they would like to renegotiate.

Thus, and contrary to the administration's intentions, inflation expectations are not being anchored. The more so if (as analyzed in my January 29th) we also consider the potential (intertemporal) fiscal fragility of the government.

The academic literature has shown that inflation reduces long-term growth. Even though the global economy has been growing at high rates during the last years, things seem starting to change. We could expect the "tail wind" (I. E. External demand boom) that Argentina enjoyed to slowdown (in the best case scenario. The administration is currently trying to engineer lower borrowing rates for long-term investment projects (especially if they are export-oriented. This is not wrong, but it arrives late. This should have been the engine of growth instead of domestic consumption in the very recent past if the goal was long-term growth. They are also differing things in the expectation of a better second half of 2008 (shouldn't they be planning and applying contingency plans ex-ante instead of acting ex-post?

Lower, non-increasing, and credible inflation, as opposed to the current policy, will boost long-term growth since it stimulates longer horizon investment projects and increases the expected real rate of return on those projects. Current investment is mostly driven by short run expected sales rather than long run demand. It also improves income distribution (more here) As mentioned above, the piece by Mark Turner shows how we should have expected the same current account surplus regardless of the exchange rate. The difference being the non-trivial point that Brazil obtained it at the same time that its central bank was able to dominate the domestic inflation rate (and with no observable drawbacks in terms of growth; on the contrary, but based on higher productivity instead. Or, as the piece by J. A. Ocampo highlights, that the accumulation of reserves is mainly borrowed (and thus more unstable since as easy as they entered the country, they can leave it; and capital controls never work. The more so in the Argentine case in which close to half the international reserves are reduced by the central bank's domestic liabilities (NOVAC, LEBAC, etc. And praying for the commodities' high prices not to be the next bubble to explode.

So far what the government is doing is clearly not going to control inflation. It does not anchor inflation expectation neither with its monetary policy, nor with its exchange rate policy or its fiscal policy. On the contrary, it looks more likely to make it get worse—inflation seems to be accelerating. The median voter seems to be happy with this policy, though. But it's the policy maker's role to appropriately consider and internalize the future effects of the current policies and adjust its present behavior accordingly—something not seen yet with the current administration.

It could be much better if the government would focus on reducing government expenditures (not just reduce the rate of growth to be lower than the growth rate of tax revenues—which are just casually high do the unusually high commodities' prices) to achieve not only a higher and stronger primary fiscal surplus but also to enhance its sustainability. It should also let all relative prices be really free to adjust to equilibrate demand and supply (I. E. Eliminate all the price controls and any type of capital controls) and let the exchange rate float. If relative prices are let to adjust, as well as the exchange rate, they will stop the growth rate of prices (I. E. Inflation) and contribute, together with a non spurious fiscal surplus to contain inflation expectations—and thus wage negotiation adjustment (in quantity and frequency. Core inflation would then be tackled with an inflation targeting regime, letting an independent central bank focus on its only goal: to preserve the value of the (domestic) currency. As of now, it will probably be better to raise interest rates to control the inflation in the short run while the rest of the reforms are put in place (including property rights that we could believe in—I. E. Proper long-term institutions. The question is, will this government be interested in implementing these and thus pursuing long-term and sustainable growth? I truly hope it. Unfortunately, I still have my doubts.

Comments.

Nicolas,

Given that the government will have to release the correct inflation data sooner or latter, do you think Argentina is facing the risk of high inflation?

Wage indexation is a strong trigger to foster indexation. What do you think?

Thanks.

Vitoria.

Written by Vitoria Saddi on 2008-02-20 11:25:46

What sectors are benefiting from the undereported inflation? What sectors are worse off?

Written by Robert F. On 2008-02-20 11:28:11

Hi Vitoria and Robert F.

I do think that Argentina is already in a high inflation situation. I am actually concerned that if authorities do not act soon and strongly things might get even worse.

I agree with you about wage indexation. My understanding is that there is no wage indexation formally, but there is de facto, and I hope it does not get de jure as well. There are wage negotiations that want to claim lower wage increases (in 20% range) but with alternative compensations. The results are the same no matter what you claim "INDEK's" inflation is.

Regarding the sectors that are better off / worse off: by income level, as any inflationary episode wage-income earners are worse off than "owners" so to speak. We know that inflation always worsen the relatively lower income recipients. Industrial sector-wide, it depends on many other details.

Thanks,

Nicolas.

Written by Nicolas Magud on 2008-02-20 13:18:32

Nicolas & friends:

I think that our government has no interest and idea to lower the inflation. At the same time they are doing his own bussines (corruption) for the time they will not be more government.

Once again.

Remember, Argentina has a cyclic economy profile.

Carlos / Buenos Aires.

Written by Guest on 2008-02-26 19:00:01

The reason the government is officially sticking with the 8.5% inflation rate is because they repay their bonds based off of the inflation numbers. It is a childish way to control debt. The main problem with the INDEC (not INDEK) falsifying data is that it forces many Small and Medium companies to not invest in Argentina because they cannot do any adequate research. Also the INDEC used to be very reliable and independent until the government of Nestor Kirchner submitted an evaluation of the economy that was not the one submitted by the INDEC. At that point, the INDEC's top directors and managers walked out, around 30-40 people. Right now the INDEC is in disarray because the new people who replaced the independent directors and managers are political appointees. The employees remaining from the independent regime have been using their camera phones to take pictures of the political appointees changing the data and send it in mass emails on the network, thus forcing these new people to resign with increasing regularity. The infighting has caused an atmosphere similiar to the chaos of a soccer match between Boca Juniors and Riverplate.

I live in Argentina and have many connections in business and in government. The business sector is clearly planning for a crisis in the next 3-4 years. The people I know in government have already tranfered their bank accounts overseas. The situation is no more obvious than if you check out at a kiosco (an Argentine conveniance store) The government does not want to raise the price of cigarettes because it fears that it will cause inflation. Cigarettes are ridiculously cheap and the price is managed by the government giving the kioscos about 16% margin. Also in the food industry where I previously worked, we could not raise the prices because of the government so we ended up lowering the quality of our products and the size. The pattern repeats which is unfortunate because Argentina has the potential to be a competitor in the international market but they need to employ economic policies that use rational. Lusteau, the new minister of economy, is poised to take the brunt of the blame and Nestor Kirchner will take the reigns in the next election and try to save the economy. He will bring in Lavagna, the previous economy minister that saved the day after the crisis. Nestor and Lavagna had a public spat that ended with Lavagna walking out of his role as minister of the economy but it was just a smoke screen. Lavagna did not combine with Carrio in the last election to give the election to Christina Kirchner. While looking at the numbers you find alot of the reasons why inflation is increasing, you must remember how the politicians think and what it is like on the ground here in Argenina.

Written by Andy on 2008-03-11 16:22:53

Your "gut feeling" of 35-40% seems exactly right. Inflacionverdadera. Com has an independent review of daily prices, showing an inflation rate of nearly 40% for food and drinks.

Written by Anonymous on 2008-06-26 08:03:07

Exon123

07-16-08, 14:53

Some very interesting articals in here of Argentina economy, its doomed.

http://www.rgemonitor.com/7/Argentina

Exon

Jackson

07-17-08, 04:29

Some very interesting articals in here of Argentina economy, its doomed.

http://www.rgemonitor.com/7/Argentina

ExonHi Exon,

What good does it do to give us a link to an article on a website that we have to join to read?

Next time, please copy and past the entire article.

Either that, or post your username and password for the site.

Thanks,

Jackson

Skifozo

07-17-08, 11:19

Hi Exon,

What good does it do to give us a link to an article on a website that we have to join to read?

Next time, please copy and past the entire article.

Either that, or post your username and password for the site.

Thanks,

JacksonThanks Jackson, I was going to say those exact comments until reading your post. So much for the article as I get enough email spam as it is.

Exon123

07-17-08, 13:40

Hi Exon,

What good does it do to give us a link to an article on a website that we have to join to read?

Next time, please copy and past the entire article.

Either that, or post your username and password for the site.

Thanks,

JacksonBecause you don't have to join the website to read it, just click on the headlines.

As an example read below, you dumb fucks.

Exon.

Why Is Capital Flying Out of Argentina? Jul 9, 2008

Erste Bank: Argentine bonds fell to an almost five-week low after farmers renewed their strike against the government following the arrest of a farm leader. The yield on Argentina's benchmark 8.28 percent bonds due in 2033 climbed 10 basis points, or 0.10 percentage point, to 10.45 percent at 4:46 p. M. New York time, according to Bloomberg data. The bond's price fell 0.75 cent on the dollar to 79.75 cents, the lowest since May 14.

JP Morgan: Capital outflows are far from receding. Estimated international reserves have been relatively unchanged: for the past two weeks, BCRA's estimated US dollar sales in the spot market (as well as bond purchases vs US dollars) averaged just $40 million per day in June, down from $130 million per day in May (first chart) However, other signs of financial tension stand out: first, according to the latest data (reported with a two week lag) private sector peso deposits declined APs2.2 billion during the week of June 20. Second, 30-day peso CD rates have had to remain high in order to compensate depositors for chronic political risk (second chart) Third, capital flight is reflected in the divergent behaviors of the spot peso rate (strengthened by central bank intervention) and the shadow peso rate (implied by the US dollar price of peso bonds)

Bloomberg: Argentina's stock market is losing foreign investors at the fastest pace since 2000 on concern accelerating inflation and a three-month farmers strike will curb economic growth and corporate profits. About 1,000 emerging-market funds sold $157 million in Argentine stocks through May, according to fund flow tracker EPFR Global in Cambridge, Massachusetts. That's more than the $118 million average daily trading on the Buenos Aires stock exchange and the biggest outflow since 2000, the year before the government's $95 billion debt default.

BNP Paribas: Faced with deposit outflows and capital flight, the CB intervened in the FX market to keep the peso in check. The authorities also hiked the repo rate by 75bps, an increase that helped propel Badlar interest rates sharply upwards.

Miguel Kiguel (via Latin Business Chronicle): In recent weeks investors have become more concerned about the possibility of a new Argentine default. One critical question is whether these concerns reflect a deterioration in the economic fundamentals, e. G. In the ability to pay, or if instead they are related to a perception that there is less willingness to pay.

WSJ: Middle-class Argentines are rushing to cash out savings accounts to buy dollars, a sign they think the government is in big trouble and the currency will plunge. Wary that the rush for dollars would become a full-scale run on the banks, the central bank spent nearly $1 billion to defend the peso in the past two weeks.

Associated Readings (8 Articles)

AnalysisJP Morgan ResearchFlorencia VasquezJul

Jackson

07-17-08, 14:54

Because you don't have to join the website to read it, just click on the headlines.

As an example read below, you dumb fucks.

Exon.Exon,

I tried that and was continiously re-directed to the "sign up for a free trial" page. This must be one expensive "service" to subscribe to, because they won't even tell you on the website what their subscription price is. You have to call one of their "sales consultants". I guess that this is just the sort of website that "power players" like Exon would subscribe to.

Anyway, thanks for posting the info.

Jackson

Exon123

07-17-08, 15:21

Exon,

I tried that and was continiously re-directed to the "sign up for a free trial" page. This must be one expensive "service" to subscribe to, because they won't even tell you on the website what their subscription price is. You have to call one of their "sales consultants". I guess that this is just the sort of website that "power players" like Exon would subscribe to.

Anyway, thanks for posting the info.

JacksonWell it works for me, but I'm not on Fibertel or one of those other fucked up ISP's they have down their.

Now lets walk threw it, first you click here.

http://www.rgemonitor.com/7/Argentina

Next you click on "Spotlight Issues" just below the word Argentina, all printed in Blue and the blogs should open.

Exon

Exon123

07-17-08, 20:16

Its serious business.

Exon.

News Center.

Argentina faces complicated horizon, says Wall Street.

MercoPress.

July 17, 2008

Wall Street analysts forecast a complicated horizon for Argentina fueled by the government's political problems, slower economy, rising inflation and the ongoing dispute with farmers over taxes which some anticipate will find its way to the courts, according to reports in the Buenos Aires press.

Merrill Lynch, Barclay's and Cr dit Suisse are recommending their clients to get rid of their assets in Argentine pesos, since they estimate that sooner or later the Argentine Central Bank will have to yield in the dispute over the US dollar in the local money market. According to a survey from Bloomberg, a majority of analysts believe the US dollar will be costing 3.20 Argentine pesos at the end of the year from its current 3.05.

But the main fear of analysts is a continuation of the current economic policies which could lead to a crisis "comparable to that of 2001/02", when the Argentine economy melted, unless there is a massive correction of economic indexes (such as retail inflation) elimination of subsidies (mainly energy and transport) and increase in public utilities rates, among other issues to address.

According to economic advisors Ecolatina, energy and food subsidies last year absorbed over seven billion US dollars and in 2008, with international values soaring, could jump to fourteen billion US dollars. Therefore the urgency to begin collecting the sliding export taxes on grains and oilseeds from farmers.

According to press reports in Argentina the bill to import diesel, natural gas and electricity is costing the Treasury 320 million US dollars per week, mainly because of the mismatch between international prices and subsidized home bills.

Manipulation of the Statistics Office, Indec, has enabled the Kirchner administrations to save hundreds of millions of US dollars on interest payments on sovereign bonds linked to inflation and Argentina's economic growth. But this coarse approach to "wishful accounting" has scared investors who turned to other markets.

Even when government officials insist inflation is still below the two digits, the private sector estimates range between 25 and 30% for this year.

Buenos Aires City mayor Mauricio Macri recently back from China said town hall plans to float a 500 million US dollars bond to uplift the city has been frustrated because of lack of investors interest, fearful of the Argentine political situation.

However Wall Street analysts also point out to "the lack of leadership" in Argentina, which is essential before addressing any financial or economic issue. They further argue that "the camp strike will lag on" and anticipate a drastic deceleration of the Argentine economy and speeding of inflation if government continues to overspend at the current rate.

Merril Lynch at the end of May, in the midst of the farmers' dispute, downgraded Argentina's growth forecast for this year to 6.8% , the lowest since the country's full steam recovery of 2002. It estimates the exchange rate at 3.25 pesos to the US dollar by the end of 2008.

Eurasia Group, a consultant on political risks with many banking clients in Wall Street and Europe believes that the confrontation between farmers and the government has led to an "enormous" loss of power and influence for the Kirchners. But it's not only farmers, one of the latest chapters is the split of the all powerful labor unions movement in Argentina.

"On balance the Argentine government will loose with the split of the labor movement since this only generates further uncertainty about wage increases further complicating efforts to contain inflation", according to Eurasia.

Argentina also has as adverse situation in international financial markets. It still has hold outs of 20 billion US dollars which did not participate in the re-scheduling of its defaulted sovereign debt; it has pending debts with the Paris Club which limits access to soft loans and this year must pay 6.5 billion US dollars in interests and 14.6 billion next year. The only creditor of last resort for Argentina currently is Venezuela's Hugo Chavez.

Nevertheless Argentina's Central Bank has over 50 billion US dollars in international reserves.

Tessan

07-17-08, 20:25

[snip]Even if they succeeded, the lawmakers supporting CFK would turn down the proposals. They outnumber the opposition.

In any case, holding a session under such circumstances doesn't set a good precedent. Tomorrow, any other industrial sector would force layoffs and road blockades to force the Congress to move forward their agenda.

AndresI guess anything is possible.

http://www.bloomberg.com/apps/news?pid=20601086&sid=aq6BMU_wrt4M&refer=news

Tessan

07-17-08, 20:37

http://www.bloomberg.com/apps/news?pid=20601086&sid=a_zDA901YIfw&refer=latin_america

Her own VP voted against it.

Tessan

07-18-08, 16:53

http://www.bloomberg.com/apps/news?pid=20601086&sid=aJ0h0O0iOM00&refer=news

Yoosin

07-18-08, 19:02

The 1st pargraph sounds a little like our own economy.

'Wall Street analysts forecast a complicated horizon for Argentina fueled by the government's political problems, slower economy, rising inflation and the ongoing dispute with farmers over taxes which some anticipate will find its way to the courts, according to reports in the Buenos Aires press.'

Except for the taxation of farmers, but it seems that has been put to rest for the moment.

Yoosin

Miami Bob

07-18-08, 23:32

This is what 480 peso will buy in Miami--imported from columbia with a high skill level:

http://miami.backpage.com/FemaleEscorts/sexy_latina_extremely_wild_all_sexy_natural_big_breast_in_outcalls_24/classifieds/ViewAd?oid=3075473

And 750 pesos:

http://miami.backpage.com/FemaleEscorts/beautifull_colombian_girl_arrived_in_miami_airport_only_4_days_30/classifieds/ViewAd?oid=2631096

And the low priced spread who watch the clock:

http://miami.backpage.com/FemaleEscorts/sexy_latin_girls_special_130_in_out_786_715_3680/classifieds/ViewAd?oid=1644047

MCSE

07-19-08, 03:50

THIS IS WHAT 480 peso will buy in Miami--imported from columbia with a high skill level:

http://miami.backpage.com/FemaleEscorts/sexy_latina_extremely_wild_all_sexy_natural_big_breast_in_outcalls_24/classifieds/ViewAd?oid=3075473 That's very sad, but even more sad is that I would need to drink 2 bottles of malbec to fuck that biitch, which in BA would cost 50 pesos and in Mia can reach another 480 pesos;)

Schmoj

07-19-08, 06:18

This ia what 480 peso will buy in Miami--imported from columbia with a high skill level:

http://miami.backpage.com/FemaleEscorts/sexy_latina_extremely_wild_all_sexy_natural_big_breast_in_outcalls_24/classifieds/ViewAd?oid=3075473

And 750 pesos:

http://miami.backpage.com/FemaleEscorts/beautifull_colombian_girl_arrived_in_miami_airport_only_4_days_30/classifieds/ViewAd?oid=2631096

And the low priced spread who watch the clock:

http://miami.backpage.com/FemaleEscorts/sexy_latin_girls_special_130_in_out_786_715_3680/classifieds/ViewAd?oid=1644047And how much does it cost in bond, attorney's fees, and fines when you get arrested for being a John is Miami? Are they still posting names and photos in the papers in the US?

Plus, those hags are fugly.

Miami Bob

07-19-08, 12:37

The 480 girl worked at a local strip club for a few years. She is not law enforcement. Quite a tease and good skills.

The 750 girl lives in columbia and comes to the usa to work one or two weeks every few months. Look at the photos--she is beautiful with a near perfect body.

And a gfe.

The cheapies is a middle to lower end privado in little havana that has been around for some time. The girls are 6-7 professionals.

If you are in Miami / Ft lauderdale with the time and inclination, the following is the local equivilent of AP--a community where in the regular girls post and make a substantial portion of their income through this board.

http://www.independentgirls.com/indiboard-new/index.php?showtopic=128396

This young lady is very sweet and there are likely 10+ reviews about skills and personality.

For purposes of comparison, I tried to give the ap boys a sense of the pricing for local talent in the same range discussed on ap.

There are us$500 and us$1000. Providers. In ap the discussions are about cost vs value. This is source info is to.

Provide a sense of the market. I am not posting my favorite argentine provider's info--could work in any high end recoletta club and is a sweetheart us$250 for a long hour and when her agenda is not full and she's orgasmic, that can mean multiple hours if you have good chemistry.

Yoosin

07-20-08, 13:48

Bay Area mostly Asian providers with a few Mexican latinas sprinkled in. All will cost you at least 150US = 450AR and more likely 200US = 600AR. There is very little room for negotiating but the product can be very good. Almost always covered, BBBJ difficult to find and BBBJTC, BBBJTCIM, cola almost never.

Samples available July 20

Skifozo

07-20-08, 14:21

Those are hot asians, this is in Cali?

Yoosin

07-21-08, 00:23

Yes in Cali, I have done both Yuka and Rain. They are model material, pro, all covered but very good sessions all the same. Much of the model type talent here is Korean. One thing I can't understand is thier insisting on covering for BJ and procedding to lick you balls and rim you. Don't they have Hep B in Korea?

Yoosin

Chowder

07-21-08, 01:23

That Rain is pretty hot.

Is she as hot in person or is the picture photoshopped to hell.

Skifozo

07-21-08, 10:16

We need more Rain in BA

Yoosin

07-22-08, 02:03

Yes, Rain is hot in person as well but the service although good is not on the level you would expect in BA. Very scripted, all covered, etc. But eye candy for sure whether you see her in the market or at her place she looks good.

Yoosin

Skifozo

07-22-08, 20:32

Memories of Szhewan!

Schmoj

08-30-08, 17:56

Of 133 countries, AR is ranked #124 of 133! On par with Bolivia, VEN, Ukraine, and Iran! The BA Herald wants: 1. AR to admit the inflation lies. But, this would force AR to back pay the money owed on inflation indexed bonds. 2. Do something to get in a friendly relations with the Paris Club. 3. Stop borrowing at a usurious rate from Chavez. 4. Do something for the default holdout creditors. 5. Allow energy prices to rise to world market prices. 6. Stop subsidizing transport companies. 7. Fight inflation. ------''Failure to correct these issues, the results may be dire''!Hey Sidney,

Don't you ever have any GOOD news.:-)

Aqualung

08-30-08, 23:34

The government continues its policy of divide and conquer!Here you are wrong Sid. No other Argentine government has done so much to join the people! Against them!

Schmoj

09-02-08, 02:30

I would describe the recovery as ''a dead cat bounce''! It is not likely to be sustainable. The current inflation (much higher than reported) wage cost inflation, and price controls make a sustained recovery less likely. This is in addition to Kirchner's incredibly stupid economic policies, an undervaled peso, protectionist policies, anti-investment policies, no credit available, contracts are suspect, crooked courts, mafia, bureaucracy, difficulties to return capital to AR, high export taxes, anti-agrarian policies, coveting socialist countries and not capitalist countries, etc. Have I left out anything? Although the fall election seem like a sure thing for Kirchner, it all could fall apart with a rapid rise in inflation. Or rapid inflation after the election. Then what? Kirchner will become a ''lame duck''. And political and economic chaos could ensue.Has anyone ever heard the one about Chicken Little? I should've learned to use the ignore feature.

El Alamo

09-02-08, 10:26

Referring to the previous quote by Sidney, I am in total agreement. This latest 'dead cat bounce' will lift the Argentine economy about to where it was in 1998. But it will not go much higher.

It is simply incredible that the present Argentine government can institute policy after policy that have the effect of putting a lid on economic growth.

Lavagna, who orchestrated the beginnings of this dead cat bounce before he was fired by the Kirschners, once said that the Kirschners think they understand economic models but in reality, Lavagna said, the Kirschners are clueless when it comes to understanding the economy

But Argentina does not have the worst economic model in the world. That award goes to Castro. In 1959 Argentina and Cuba had about the same average per capita income. Now, fifty years later, even though Argentina has not had anything near a stellar economic preformance, Cuba has one fourth the per capita income as Argentina.

The moral is, it could be worse.

El Perro

09-02-08, 11:20

From Bloomberg today. Not a pretty picture.

http://www.bloomberg.com/apps/news?pid=20601086&sid=apR.I6Ia3ypE&refer=news

Gato Hunter

09-04-08, 14:32

Maybe they fix all the old planes they have sitting on the ground. Those 737-200's are some really old planes, I am betting they are older than I am. Nobody even flies them anymore in the US.

That is 17 of the 29 planes in the fleet.

I wonder if the AR govt will be on the hook for the order that Grupo Marsans placed with Airbus last year.

After they get it up and running it will be sold to some politicians friend for a large bribe.

Daddy Rulz

09-07-08, 22:10

Argento

09-08-08, 13:12

I hope this doesn't turn into a flame war between respondents.

With the slow disintegration of the Argentine economy of which the inflation is a part (whatever the correct rate) at what point does this begin to make itself manifest in the Dollar / Peso exchange? I understand that Argentina has or had a lot of foreign assets or bonds or money or whatever that they have been selling to maintain the 3-1 ratio. Further I understand that the dollar hasn't been doing that well worldwide over the last few years (with a recent bump up in the last month or so) but if the Argentine economy is doing worse than the EEUU economy it seems to me that at some point we should start getting more Pesos for Dollars.

Just wondering.The reality is that if the central bank had not been active in the market over the past few years, the peso would have appreciated against the dollar, similiar to the other South American currencies. Now that the inflation genie is out of the jar, my guess, based on my experiences over the past 18 years, is that the 3-1 exchange ratio will continue to hold and be supported by the central bank, and that for foreigners, the inflation will continue and the goods and services they consume, will become intolerably expensive. Some time in the medium future, my guess is more than a year and more probably longer, it will not be sustainable and the whole house of cards will collapse.

In 1990, a standard meal in El Palacio de la Papa Frita was under U$10. In 1998 it was U$40. In 2002 it was again under U$10 and now it is U$30 or there-a-bouts. The thing to remember is there is no other economy in the world that is so disfunctional and has the capacity, despite the mis-management, to continue along blithely, ignoring all fundamental macro economic principles, and manage to last for the time it does. My guess it is an indicator of the potential capacity of Argentina. All you have to do is to get past the obstacle of the sovereign risk to your capital.

Argento

Dickhead

09-08-08, 21:11

Another example of biased reporting from Sid. Of course the longshoremen want to export more (of anything and everything) Beef to 100 pesos per what? Kilo? And for what cut? Anyone who reads the papers knows why their exports of beef are low: attempting to keep prices lower for Argentine beef-eaters. Now whether that is sound policy or not (the doctrine of comparative advantage suggests it is not) is another story but listening to longshoremen's views on export policy is rather like listening to a fox who is telling you security is too tight in your henhouse.

BadMan

09-08-08, 23:03

listening to longshoremen's views on export policy is rather like listening to a fox who is telling you security is too tight in your henhouse.- Dead -

BM.

Bacchus9

09-09-08, 00:10

Sydney old sport,

Why is it you sound like John McCain going off on a rant when DH caveated his reply to you several times and never attacked you? Hmmmm? Try to stay in the dialogue instead of dropping the H bomb Sydney old sport, if you can.

Monger514

09-09-08, 01:54

Gato Hunter

09-09-08, 06:08

Sidney,

I met you about a year ago. You reminded me of [Deleted by Admin].

You are entirely too old to use the word "diss" in your vocabulary.

Thanks for trying.

GH

EDITOR'S NOTE: This report was edited in accordance with the Forum's Zero Tolerance policy regarding reports containing any personal attacks or derogatory comments directed towards another Forum Member or the Forum Membership in general.

Jackson

09-09-08, 12:25

Politics is inherently divisive, by its nature (since it's about taking money from some people and giving it others) I really think these political threads should just be deleted altogether, so folks can concentrate on what they have in common (in the case of this forum, we all know what that is) and not fight endlessly about which politician does a fairer job of stealing and destroying the economy.Hi Monger514,

I've tried that, but it's not effective as political subjects will invariably crop up elsewhere in the forum. Providing a specific thread for political discussion allows people to vent their opinions outside of the regular discussion threads.

Thanks,

Jackson

Monger514

09-09-08, 13:08

Jackson,

Point taken! Reminds me of Craigslist's justification of having the erotic section, so posters don't pollute the other areas. It does work pretty well.

I just need to resist the occasional urge to peek in these (very active) political threads. (And really resist the urget to post!).

Keep up the good work.

M514

Andres

09-09-08, 19:57

I hope this doesn't turn into a flame war between respondents.

With the slow disintegration of the Argentine economy of which the inflation is a part (whatever the correct rate) at what point does this begin to make itself manifest in the Dollar / Peso exchange? I understand that Argentina has or had a lot of foreign assets or bonds or money or whatever that they have been selling to maintain the 3-1 ratio. Further I understand that the dollar hasn't been doing that well worldwide over the last few years (with a recent bump up in the last month or so) but if the Argentine economy is doing worse than the EEUU economy it seems to me that at some point we should start getting more Pesos for Dollars.

Just wondering.The Dollar to Peso ratio may risk of getting lower, but not necessarily because of any disintegration or strengthening of the economy.

Unlike in 2001, most of the current debt is nominated in Pesos, so the government doesn't have that much need of buying Dollars to honor it.

Also, under a neutral scenario, it is expected that the federal government cancels all it obligations for 2009 and face some difficulties for canceling those for 2010. Again, that doesn't need an extreme effort for getting Dollars at least until 2010.

Finally, Argentina and Brazil just signed an agreement to start bilateral trade nominated in Pesos or Reals. Since almost 70% of Argentine manufactured goods are sold to Brazil, the weight of the Dollar declines as the currency of trade for Argentina.

Just some tips to watch.

Andres

BA Luvr

09-10-08, 00:46

Thanks, Andres. I've wondered myself about the question Daddy posed, and your answer is the most plausible I've come across. Too bad, though. I'd be able to buy more quality time with my GFE of choice if it went to 4.50 per USD, but then the chicas would probably raise their prices to compensate.

Daddy Rulz

09-10-08, 02:17

As always your help is appreciated.

Tessan

09-10-08, 15:13

Having the debt in peso is better then having it in dollars. But if the central bank had to print new peso, to pay off debt, the peso would still lose value. Also the fact that the government taped Central Bank foreign reserves to clear a $6.7 billion, six-year-old default on debts to Paris Club lender countries, mean that the central bank is not as independent as in other countries. In the future if the government forces the central bank to pay down some of its debt, that will weaken the peso.

According to the Financial Times of London, Argentina debt is higher now, then it was before the economic collapse. The government says it's running a surplus, if that is the case, why are they taking on new debt, and at very high interest rates?

On the other hand, the peso should get stronger; since Argentina is bring in more money then sending out, because of the high prices for agricultural products. (Prices are down, but still very high historically)

Why is the government taking on so much new debt???? The New debt makes me think, the government is lying more then the markets think they are. It just does not make sense to take on new debt at very high interest rates, when they say they have a big tax surplus?

It's hard to know what will happen to the peso in the short term to mid term. The trade balance should push it up. But the government dept, and lying about inflation, and maybe about their tax surplus, should push it down. Right now it looks like the two are balanced.

Facundo

09-11-08, 12:01

Argentine peso weakens due to dollar strength

BUENOS AIRES, Sept. 11 (Reuters) - Argentina's peso currency weakened by 0.63 percent on Thursday to 3.1450/3.1500 per dollar ARSB= in opening informal trade between foreign exchange houses, as measured by Reuters, due to the dollar's global surge against major currencies.

In formal trade between banks the peso slumped 0.40 percent to 3.0875/3.0900 ARS=RASL per dollar, its weakest since late May. (Reporting by Walter Bianchi; Writing by Fiona Ortiz; Editing by James Dalgleish)

El Alamo

09-11-08, 21:46

I would not be too concerned about day to day fluctuations in the peso. It is inevitable that the peso will collapse and that Argentina will find itself in another economic crisis The question is when, not if.

Argentina has an econimic playbook which could have been written by the Three Stooges aka Los tres chiflados

Aqualung

09-11-08, 23:04

What lies! Private economists say August was.5% to 3%! And 12 months at 25 to 30%!The most trustworthy figures are 2.5% - that's three times the official number.

El Alamo

09-26-08, 19:01

Anyone interested in loaning money to Argentina should liisten to me first. I can sell you the 1) Brooklyn Bridge 2) Yankee Stadium 3) the fountain of youth 4) the formula or changing lead into gold 4) You name it you got it for 10 cents on the dollar.

These might not be the best investments in the world but I can guarantee with 100% certainty that any money lent to Aregntina will never be repaid. Argentina has relied on the stupidity of lenders for more than half a century (think Paris Club) to fund their corrupt governments.

Tessan

09-27-08, 00:05

Sept. 23 (Bloomberg) -- Citigroup Inc. Barclays Plc and Deutsche Bank AG proposed a debt-restructuring plan to Argentina that may help the country raise cash as declining commodity exports curb tax revenue, a government official said.

The proposal aims to get bondholders who refused to participate in Argentina's 2005 debt renegotiation to swap their defaulted securities and to put up fresh cash to buy new debt, said the official, who asked not to be identified because he isn't authorized to speak for the administration.

'It's indicative that they are feeling a little less secure about their financing,'' said Edwin Gutierrez, who manages about $5.5 billion of emerging-market debt, including defaulted Argentine bonds, for Aberdeen Asset Management Plc in London. He declined to say whether he'd participate in a restructuring.

Argentina's defaulted bonds gained on speculation the government will make an offer to creditors soon. Defaulted dollar bonds climbed more than 1 cent on the dollar to about 29 cents after rising 1.5 cents yesterday, according to Exotix Ltd. A London-based brokerage that specializes in distressed securities. Creditors holding about a quarter of the $95 billion in defaulted debt rejected Argentina's 30 cents-on-the-dollar offer in 2005.

Whole article.

http://www.bloomberg.com/apps/news?pid=20601086&sid=a9QrJOnYJ0F0&refer=news

===============================================

Looks like Argentina wants to tap world markets for money. They are choosing a very bad time, with the credit crunch in the US which will likely spread to Europe, unless the government can get some liquidity into the system.

Julio

09-27-08, 13:43

1. Criticizing the USA economy (as if she had no problems in AR)

2. Defending the ''accuracy'' of INDEC.

3. Pleading for the ''return'' of the Malvinas.

4. Setting up conditions to borrow with new long term debt (where were the K dummies when credit was easy and cheap?

5. Seeking the extradition of Iranian terrorists.

----------

Meanwhile in AR, inflation remains unchecked, many strikes continue, the Farmers may strike again due to no K ag plan, the commuter trains are being burned, the embarrassing Suitcase Trial continues, there is no solution for insufficient power, mas!I think that considerin the actual U. S. A. Economical situation, Sidney, I'd be a lot more worried about the financial apocalyspse on Wall Street than in our humble economy (here put a smiley icon).

But if you want to talk about it, I truly advise every Argentine who has money invested in any North American bank to draw it as quickly as he can, before the tsunami came.

El Queso

09-27-08, 14:48

I think that considerin the actual U. S. A. Economical situation, Sidney, I'd be a lot more worried about the financial apocalyspse on Wall Street than in our humble economy (here put a smiley icon)No offense man, but watch indeed as we fix our fuckup. We are actually very concerned about it, but not to the point that I think many Argentinos would be within their own country if they had a similar problem being exposed.

The guys who work for me here are still very happy to be paid in dollars, and are still terrified to put their money (particularly in dollars) in an Argentine bank. They see something coming here that a lot of others on this board remark about and are thinking about the economic cycle of woes that Argentina has had because they are unable to fix their issues.

Wishing that the US will fail so you can feel better about your own country's situation is unbecoming.

Julio

09-27-08, 19:29

Wishing that the US will fail so you can feel better about your own country's situation is unbecoming.No, I don't feel better, why should I be?

But is a funny thing that after reading the terrible predictions some AP members cast along the last months about my country, none of them still becoming real, after more than a year, and the unveiled desires of so many mongers for the collapse of our own economy, for no other selfish purpose than to get more pesos for dollars so they can fuck better Madaho's girls and buy better Recoleta appartments, not caring at all what the rest of the country may suffer, well, the tornado suddendly turned home, and looks like it only started.

Not get angry with me, El Queso, I'm using the same words I used to read in this same thread, only changing the direction of the flow. So I repeat this, to any argentino hanging out there: take your money out of the north american bank where you had invest it, and put it in any european bank. Or in a chinese bank, if you can. The rush soon will begun.

Thank you.

Dickhead

09-28-08, 00:17

Spend all your money on hookers and fuck yourself to death as quickly as possible, regardless of your nationality and its current economic situation.

Aqualung

09-28-08, 02:30

Julio,

I agree with many of your post especially those about Americans calling the pot black in reference to racism or even corruption in Argentina but I can't agree with your assessment of the Argentine economic policy.

The US is going through a very bad moment, much worse than many Americans realize but they will get over it (at least this time) and the fact that this problem hasn't seemed to affect Argentina just yet is due more to Mrs Crisis-tina's lies and wishful thinking than to reality.

I agree that it may be safer to place your money in European or even Asian banks at this very moment but faced by the option of leaving your money in American banks or converting it into pesos in Argentine banks take some advice from a fool - leave it in the US! Whatever affects the US economy is sooner or later going to affect the Argentine economy and three times worse.

I don't foresee a big devaluation of the peso which many mongers would love for the obvious reasons you mention in your post but I do see an important recession which will damage Argentina's fragile economy again as has happened umpteen times in our lifetime.

The unbreakable cycle of Argentine economy is that it gets bad and worse till it's about to burst and then it pulls out and starts to grow till it's about to get good - then before it is really good it worsens again and so on and so on!

Julio, don't give up on the racism in Argentina thread but don't let your stance there overflow to this thread. It's a different kettle of fish!

Andres

09-28-08, 13:17

But is a funny thing that after reading the terrible predictions some AP members cast along the last months about my country, none of them still becoming real, after more than a year, and the unveiled desires of so many mongers for the collapse of our own economy, for no other selfish purpose than to get more pesos for dollars so they can fuck better Madaho's girls and buy better Recoleta appartments, not caring at all what the rest of the country may suffer, well, the tornado suddendly turned home, and looks like it only started.Ditto. Many comments about the imperfect Argentine economic system, which are accurate, also apply to the US economy as well (crony capitalism, for instance)

So I repeat this, to any argentino hanging out there: take your money out of the north american bank where you had invest it, and put it in any european bank. Or in a chinese bank, if you can. The rush soon will begun.I think that keeping the money in the US or elsewhere is secondary, at least in terms of loosing the deposits. What is really crucial is to realize that an old paradigm is dead (extremely unregulated financial operations) a new paradigm will emerge soon (more regulated markets, hard to get credits, etc) As such, the US financial markets won't provide very attractive opportunities besides a refuge on hard times (and that while the US Dollar stands as the International currency)

Andres

Andres

09-28-08, 13:32

The US is going through a very bad moment, much worse than many Americans realize but they will get over it (at least this time) and the fact that this problem hasn't seemed to affect Argentina just yet is due more to Mrs Crisis-tina's lies and wishful thinking than to reality.It's pretty evident that many mongers here deeply dislike CFK. What escapes from my understanding is why not to acknowledge the Kirchner's ability to build a sound strategy of diversifying exports.

I found out that currently only 7% of Argentine exports go to the US and 15% go to Brazil, which will be hardly hit by the US financial crisis. Argentina has at least 12 to 18 months before the indirect effects of this crisis hit the country. That's a very good hedging strategy, IMHO.

Whatever affects the US economy is sooner or later going to affect the Argentine economy and three times worse.Why? What's the rationale that explains such effect?

I don't foresee a big devaluation of the peso which many mongers would love for the obvious reasons you mention in your post but I do see an important recession which will damage Argentina's fragile economy again as has happened umpteen times in our lifetime.The difference now is that the power of the financial sector is ebbing. I don't foresee many financial crises as before, specially if the government closes most of the sensitive issues (Paris Club debt will be paid, defaulted bonds will be rolled over at a lower price but solved anyway, the INDEC will sooner or later be normalized) and keeps an iron fist on new debt and speculative investments.

Andres

El Queso

09-28-08, 16:17

No, I don't feel better, why should I be?

But is a funny thing that after reading the terrible predictions some AP members cast along the last months about my country, none of them still becoming real, after more than a year, and the unveiled desires of so many mongers for the collapse of our own economy, for no other selfish purpose than to get more pesos for dollars so they can fuck better Madaho's girls and buy better Recoleta appartments, not caring at all what the rest of the country may suffer, well, the tornado suddendly turned home, and looks like it only started.First, I agree with you that some members on this board can be somewhat abusive in their expression of their opinions.

Most of them don't really want anything bad for Argentina (I truly don't thnk ANY of them do) but are mostly wishing that inflation wasn't so nearly out of control and that a place where they had hoped to stay and enjoy for some time has actually become more expensive in many ways than places to live in the States (I can live cheaper where I'm from than I can in Capital Federal, even in the outlying places like Pilar where I'm moving in a couple of weeks - hopefully)

What they see is that the Argentine economy can't keep up with the runaway inflation and other problems that exist and pretty much everyone expects it to fall back to a point that is more reasonable based on the actual economy. The fact that it will probably come in one fell swoop is because a lot of people (Argentinos as well) don't have much faith in the the government working anything out beyond how they are going to survive the fall when it comes.

The difference between Argentina and the States is that even after the Great Depression we managed to get back to where we were and make it BETTER because we work better together and with a better system than Argentina does. I'm not even saying it's the best in the world, but it is better than Argentina in terms of output and the comfort of its citizens - that is a fact that really can't be disputed unless there is something noble in having a large number of poor that can't live anywhere near the norms of the middle class and serve the upper and middle class.

Not get angry with me, El Queso, I'm using the same words I used to read in this same thread, only changing the direction of the flow. So I repeat this, to any argentino hanging out there: take your money out of the north american bank where you had invest it, and put it in any european bank. Or in a chinese bank, if you can. The rush soon will begun.

Thank you.Well, I'm sorry Julio, but you haven't seen words of anger from me. I try to be calm and rational in my responses. I'm not perfect, I may miss sometimes.

Using the same words back at people really doesn't accomplish anything except creating anger between two or more people. And you place yourself at exactly their level, which gives you absolutely no moral high ground whatsoever, if that is important to you.

I don't want the Argentine economy to fail. I want it to lose its inflationary trend, for sure. But the truth is, I employ 5 programmers here and EVERY ONE OF THEM likes the fact that they are being paid in US dollars, and are looking for ways to get most of their money out of Argentina. They are absolutely convinced that the Argentine economy is going to fail and are happy not to be tied to a local company.

In fact, two of my programmers were in the process of trying to move to Europe and the UK at the time I offered them a job. They didn't want to be anywhere near here when the next fall happens.

But urging people to take their money out of the States at this point is not like urging people to take their money out of Argentina (or to not invest there to begin with) One has a good track record of providing good return on investment, the other has a track record of annuling debts and creating an environment non-conducive to investment.

Julio

09-28-08, 20:06

Julio, don't give up on the racism in Argentina thread but don't let your stance there overflow to this thread. It's a different kettle of fish!Thanks, Aqualung, but I consider there are all in the same kitchen :)

Julio

09-28-08, 20:35

I think that keeping the money in the US or elsewhere is secondary, at least in terms of loosing the deposits. What is really crucial is to realize that an old paradigm is dead (extremely unregulated financial operations) a new paradigm will emerge soon (more regulated markets, hard to get credits, etc) It's the continuation of a corrupt system, in wich the profits become private and the losses "socialize".

But well, O. K. That's the history of capitalism.

When I advise to take the money out of any north american bank for those who have it, was because, due to this crisis, hundreds of small banks in U. S. A. Will break and the Big State will be unable to help ALL the banks (perhaps a few, the big ones, but definitely not the small ones), for the simple reason it has not the monumental amount of dollars needed to make such a rescue.

And I absolutely agree with you: this old paradigm is dead, wich brings us, back again, to old dear Karl Marx when he talked about the contradictions of capitalism and how it will annihilate himself.

After this, at least, it has been clearly, and dramatically exposed that the capital(ism) can't be left alone to take control of himself.

Tessan

09-29-08, 20:05

Sept. 29 (Bloomberg) -- Argentina's defaulted bonds gained after the government said Cabinet Chief Sergio Massa will speak tonight about an offer to restructure the $20 billion of debt that creditors held out of a 2005 settlement.

The bonds rose 1 cent to about 29 cents on the dollar, according to London-based Exotix Ltd. The securities have risen 3 cents in the past six days as President Cristina Fernandez de Kirchner said on Sept. 22 that she was considering a proposal to settle with creditors who rejected the government's offer three years ago of 30 cents on the dollar.

'We're seeing a lot of trading at the moment,'' said Amir Zada, an associate director in New York at Exotix, a brokerage that specializes in distressed securities.

Fernandez is seeking to settle with the so-called holdouts -- a move that signals a change in tack -- in an effort to regain access to international capital markets as slowing growth and declining commodity exports cut into tax revenue. Lawsuits from creditors including Kenneth Dart, a billionaire investor who sued Brazil during that country's 1994 restructuring, have prevented the government from issuing debt abroad.

Argentina is considering a restructuring offer that would require creditors to invest $25 in new bonds for every $100 of defaulted debt they swap, helping the South American country raise cash to meet its financing needs, according to a government official.

Payout Estimates.

Citigroup Inc. Barclays Plc and Deutsche Bank AG proposed the restructuring plan, according to the official, who asked not to be identified because he isn't authorized to speak for the administration. Peter Truell, a spokesman with Barclays, Ted Meyer, a spokesman with Deutsche Bank, and Danielle Romero- Apsilos, a spokeswoman with Citigroup, declined to comment. All three are based in New York.

http://www.bloomberg.com/apps/news?pid=20601086&sid=akHEnBtKlUoY&refer=latin_america

Argento

09-29-08, 21:16

AR may have diversified because the foreign markets would buy from any country that had foodstuffs. K could not have done much more to scare foreign countries from purchasing from AR with his anti-ag policies! K's policies are completely unsound! And I might add, so are his various statements and policies about investing in AR! AR's timing for debt restructuring couldn't have started at worse time! The world is in a terrible financial crisis! (Already, to secure credit, AR had to pay Chavez 15%! A logical explanation is that AR current finances are an absolute lie, as are INDEC's! If AR is able to rollover the Paris Club and the ''Holdouts, the rate interest will be very high! There is no way to project when or if the next crisis will come.I concur. And especially now that the buy-out deal put to Congress failed to get up.

And another thing. The schadenfreude obvious from the posts of our unrepentant Argentine duo obviously doesn't take into account the fact that Argentina will take the hit as well. Reduced prices for their commodities, no access to credit, an economy manipulated by economic nincompoops and the current drought's reduced production is going to impact very hard.

The schadenfreude is just the obvious indicator of their bias against the USA and the western economic system.

Time will tell though. My bet is that although there will be a tough, tough period ahead for the next year, the system is robust enough to take it and begin anew. And without the hubris and the bullshit of the past 10 years.

I wonder if Argentina's system will be able to do the same?

Argento

Tessan

09-29-08, 22:28

I concur. And especially now that the buy-out deal put to Congress failed to get up.

ArgentoCongress will probably do something do restart working on something Thursday. They will not do anything tomorrow because of a Jewish holiday. I think something might pass, it's not dead yet. Allot of politics going on in this. Everyone wants to say they changed something to help or protect the American people.

The deal is not dead yet. Tomorrow is a Jewish holiday so no work on it tomorrow. Thursday they will start again. They might even be able to get some people to change their votes, and pass basically the same bill again. It's an election year, everyone trying to play politics and blame the other guy. Or they want to be able to say they added something to the bill, that made it allot better.

I think something will pass, but again anything can happen.

Lysander

10-01-08, 23:09

Exon123

10-02-08, 14:13

Not sure about how serious this is going to be for Argentina, but sure as hell we all ought to be worried about escalating US national debt if the following analysis is anywhere near the mark.

http://www.tickerforum.org/cgi-ticker/akcs-www?post=64606This is vary serrious shit Lysander, The CockSuckers are selling us a "Pig in a Polk", We're all broke and don't know it.

Exon

Tessan

10-02-08, 16:26

Argentina May Set Restructuring Details Next Week, Clarin Says.

By Drew Benson.

Oct. 2 (Bloomberg) -- Argentina may release details of its debt restructuring offer on Oct. 6, newspaper Clarin reported, without saying how it obtained the information.

Finance Secretary Hernan Lorenzino flew to New York last night to work with lawyers and bankers on the offer to restructure $20 billion of bonds that were held out of a 2005 settlement, Clarin said.

To contact the reporter on this story: Drew Benson in Buenos Aires at abenson9@bloomberg. Net

Tessan

10-02-08, 17:16

Not sure about how serious this is going to be for Argentina, but sure as hell we all ought to be worried about escalating US national debt if the following analysis is anywhere near the mark.

http://www.tickerforum.org/cgi-ticker/akcs-www?post=64606Article like this, are assuming that the 700 billion dollars is gone, give away never to be seen again. The reality is the government will be buying mortgages, most of which are not in default. The question is how much the government pays for it. The stuff is trading pennies on the dollar right now. If the government pays market prices, it will probably make money, since it can hold this stuff to maturity, while the banks don't want to, since it would tie up there money for new loan.

Their is a provision in the law that tells the treasury to take extraordinary steps to avoid foreclosures. Which mean, they might reduce the amount owed, and absorb the lose, while a bank would have foreclosed. If they pay 35 cents on the dollar, it does not matter, if they take 50% off the mortgage, since they only paid 35 cents. If they pay 75 cents, like I've heard some people want, then they would lose money.

Paulson said they might do reverse auctions, to set a price. The Auction will be narrow, with similar mortgages, since depending when and where the mortgage was written, its value can differ quite allot. He also said, they might start off with the stuff that is not selling, probably the worst stuff written at the height of the bubble.

It all depends at what price the Treasury pays for this stuff. They have to pay enough to re-capitalize the banks, so they can lend again, but not too much, or they'll be seen as rewarding greed. The more they pay, the more likely they will lose money.

The US, is in recession, and likely to be in one for a year or 2. Without helping out the banks, it would have been far worse. But it's not going to be good. The deficit will go up, as it usually does, during recessions, as people pay fewer taxes, and unemployment goes up.

Exon123

10-02-08, 19:27

Article like this, are assuming that the 700 billion dollars is gone, give away never to be seen again. The reality is the government will be buying mortgages, most of which are not in default. The question is how much the government pays for it. The stuff is trading pennies on the dollar right now. If the government pays market prices, it will probably make money, since it can hold this stuff to maturity, while the banks don't want to, since it would tie up there money for new loan.

Their is a provision in the law that tells the treasury to take extraordinary steps to avoid foreclosures. Which mean, they might reduce the amount owed, and absorb the lose, while a bank would have foreclosed. If they pay 35 cents on the dollar, it does not matter, if they take 50% off the mortgage, since they only paid 35 cents. If they pay 75 cents, like I've heard some people want, then they would lose money.

Paulson said they might do reverse auctions, to set a price. The Auction will be narrow, with similar mortgages, since depending when and where the mortgage was written, its value can differ quite allot. He also said, they might start off with the stuff that is not selling, probably the worst stuff written at the height of the bubble.

It all depends at what price the Treasury pays for this stuff. They have to pay enough to re-capitalize the banks, so they can lend again, but not too much, or they'll be seen as rewarding greed. The more they pay, the more likely they will lose money.

The US, is in recession, and likely to be in one for a year or 2. Without helping out the banks, it would have been far worse. But it's not going to be good. The deficit will go up, as it usually does, during recessions, as people pay fewer taxes, and unemployment goes up.Tessan,

You didn't take the time to read this.

http://www.tickerforum.org/cgi-ticker/akcs-www?post=64606

Nor did you follow the link there to this

http://www.fedupusa.org/

The real bottom line is the world is pissed off at us and is threating not to buy anymore of our debt if we don't make good on this scam's we sold them.

The majority of the 700 billion bail out is to be spent to buy foreign investor's worthless mortgage back securities. And Bush has told Congress that if this provision is taken out of the bill he'll veto the bill.

The basic bottom line is we the tax payers are being lied too. And the world's central banks are black mailing our government into "either buy back this worthless debt or we won't buy your debt". If they don't buy our debt we're broke since the the sales of treasuary bill's is central to finnancing our defecit spending.

This is a very, very serrious matter and most American people don't know about it.

Exon