Argentine Economy

[QUOTE=Thomaso276]My dad used to call those track suits "indictment suits" cause all the mob guys wore them when they appeared for arraignment back in the 70's and 80's in NYC.[/QUOTE]I have heard them called the Italian tuxedo.

If anyone can, I suggest you pick up the highly entertaining book titled "Mobs, Messiahs and Markets" by Bonner and Rajiva. The former is the founder of Agora (who some of you may already know) In the book there is an excellent section on Argentina starting on page 160 covering Argentina's socio-economic past and present with a hint of the future." The book in and of itself is a darn good read. As a matter of fact, the book's first sentence made me chuckle, "It is a shame the the world improvers don't set off some sort of signal before they go bad, like a fire-alarm that is running out of juice".

You can go to amazon and through the book preview feature you can read the pages about Argentina. Just search for Argentina, you can read 3 pages at a time, just search for Argentina again and pickup where you left off.

I liked the part that says "any argentine who does not steal is mad at those who do, until they have a chance to do it themselves."

So I would say Brasil ir now running scared into trying to protect their markets in much the same way nations around the world did during the great depression. I would not hold out much chance for the US to eventually become restrictionist too - and if that happens its all over. In that case start buyin 50 lb bags of junk silver on ebay. You guys are gonna need them:)

Imagine what this is going to mean for street crime compadres!

Argentine Debt Swap Helps Cover Financing Needs, Fuels Rally.

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By Drew Benson and Lester Pimentel.

Jan. 29 (Bloomberg) -- Argentina may have lined up enough financing to cover its budget needs through 2010 after creditors agreed to extend maturities on 15.1 billion pesos ($4.3 billion) of debt, Credit Suisse Group AG and Barclays Plc said.

Ninety-seven percent of locally based holders of the so- called guaranteed loans accepted the offer to take new five-year bonds, President Cristina Fernandez de Kirchner said yesterday. The exchange will reduce the government's 2009 debt payments by 5.4 billion pesos, Cabinet Chief Sergio Massa said.

Argentine bonds rallied this month, sending benchmark yields to a three-month low, helped by speculation that the debt swap will enable the South American country to avert its second debt default this decade. Argentina issued the guaranteed loans -- so called because they were initially backed by revenue from a financial transactions tax -- in a 2001 exchange that sought unsuccessfully to stave off the $95 billion default that year.

"Argentina has solved its rollover problem for this year and maybe the next," said Igor Arsenin, an emerging-market strategist at Credit Suisse in New York. "They will muddle through. There's still quite a bit of upside."

The price on the government's 8.28 percent dollar bonds due in 2033 rose to 35.8 cents on the dollar yesterday from 32.25 cents on Dec. 31, according to JPMorgan Chase & Co. The yield dropped to 21.14 percent from 32.25 percent. The bonds traded at 22.5 cents, the lowest since they were issued in 2005, on Oct. 27 after Fernandez said she'd nationalize the private pension funds.

'Dent in Confidence'

While the pension seizure hurt investor confidence, it also helped Fernandez cobble together financing by giving her administration access to more funds.

"The main danger was a dent in confidence," Arsenin said. "In a more narrow sense, it's been positive. It has ensured flexibility in their short-term financing."

Arsenin said the 2033 bonds may rally to 40 cents.

The government will extend the guaranteed loans swap offer next month to the 3 percent of locals who rejected it as well as to international holders of the securities, Massa said. In all, about $4 billion of the $12 billion outstanding of guaranteed loans was set to mature this year, according to estimates by Credit Suisse.

"This is the most important voluntary exchange in the history of Argentina," Fernandez said at a ceremony at her residence outside of Buenos Aires.

Argentina's financing needs climbed to $18.4 billion this year from $4.7 billion in 2008 as a six-year economic expansion fueled by commodity exports faltered amid the global credit crisis, according to Royal Bank of Scotland estimates.

The new five-year bonds will pay an interest rate of 15.4 percent in the first year and 2.75 percentage points over the Argentina's Badlar interbank rate after that, Massa said.

The swap "sends the signal that the authorities will look for market-driven transactions rather than moving straight into unfriendly restructurings," Barclays analysts Guillermo Mondino and Donato Guarino said in a report yesterday. They recommend investors buy Argentine dollar bonds due in 2013, known as Bonars.

To contact the reporter on this story: Drew Benson in Buenos Aires at [email]Abenson9@bloomberg. Net[/email]

Last Updated: January 28, 2009 21:00 EST

[QUOTE=Sidney]1. Farmers throw eggs and potatos at K's official. 2. Macri demands scrapping export duties. 3. Moyano may seek ''double severance.'' 4. Bus strike threatened. 5. According to ADE, product prices have increase 28% in a year! 6. Crime increasing--BA Herald.[/QUOTE]I'm in favor of "doubble severance". Doubble severance of Moyano's hands and feet. This guy is a thug and a menace. The problem is Moyano will get his way while the K's are in power.

The peso is quietly crossing the AR$3.50/USD$1 threshhold.

Having watched this for the past few months, I must say that the Argies have done a masterful job of walking the peso down. It was inevitable that it happen but important that it not happen in a chaotic fashion. They've done a good job with a slow but steady devaluation of nearly 20% in the past 8 months or so. I tip my non-existent cap.

There should be more to come for the foreseeable future. I wonder how much the slow but steady devaluation has cost the Central Bank so far?

For anyone interested, there was a decent article in Saturday's Wall Street Journal on Latin America, and the divide between Venezuela, Ecuador and Argentina, on one hand, and Brazil, Chile, Mexico, Columbia, Peru and similar countries on the other. You should be able to access it here: [url]http://online.wsj.com/article/SB123336272714535407.html[/url]

Driving back to my house this afternoon, I was struck by the idea of foreign aid and the effect it has on recipient economies. It is popularly believed that Argentina does not receive much foreign aid; and certainly not from mainstream donors. That it is an important and essential component to many countries is undoubtably true. I wonder how many Argentinos would be aware that their country is the highest recipient per capita of foreign aid in the world. And from mainstream European and North American donors. That the aid is given involuntarily might disguise the fact, but a rose by another name still smells as sweet. And the reason for their standard of living, probably the greatest mystery I know, is simply based on extraordinarily large sums of foreign aid.

In a nutshell, the periodic defaults on repayment of capital and interest that are legend in regard to Argentina, are foreign aid by another name. And if you add the appropriation of their citizen's savings to the mix as well as the money saved by rigging inflation figures, thus stealing capital from inflation linked bonds, it is a tidy sum of money. Using very rough estimations of the default amounts of 2002 less the haircut amount returned to the lenders, plus the $23 odd billion appropriated from the superannuation funds, plus a really rough guess at inflation linked interest, my guess is that the total would not be far short of U$150 billion or even possibly more. Amortised over the 7 years since the default, this is the equivalent of more than U$21 billion dollars a year in involuntary foreign aid. In per capita terms, around U$5530.

So the conjuring trick of the Argentine economy is a simple light and mirror trick. Steal the money, call it a default and then, if you are Nestor Kirchner, claim you are an economic guru. "The Economist Pocket World in Figures." 2009 edition, puts Argentina's GDP per person at U$5480. Top it up with much the same in involuntary foreign aid, only an economic dunderhead such as Kirchner could put Argentina at the point of insolvency. But the next involuntary donation is in the oven as we speak. It is already over U$130 billion, with this year's payments of U$40 billion included. And apart from some reluctant bondholders who are to roll-over some U$4 billion of term bonds, totally unfunded. It will be in the oven for a while yet, but when it comes out and Argentina defaults, just remember that it is really only foreign aid.

Argento

I think it's not a question of "need" because, as was pointed out earlier, Argentina does get a lot of help from foreign countries. The issue is that it doesn't go to the right hands. So you find this strange phenomenon of rew riches living in Palermo or Recoleta, earning huge salaries and then lots and lots of professionals forced to make a living out of $3000 a month.

It's also true -sadly- that part of Argentine culture has to do with "feeling very witty about getting something that's not yours", which explains all the proud "ñoquis" and even the guys who prefer to walk around eating shit in their carritos than "actually working".

[QUOTE=Chanel]It's also true -sadly- that part of Argentine culture has to do with "feeling very witty about getting something that's not yours", which explains all the proud "ñoquis" and even the guys who prefer to walk around eating shit in their carritos than "actually working".[/QUOTE]Funny, smart and dead on. Let us not forget that the theft "wittiness" is ready and available for your viewing pleasure in many cultures. Ugly IMHO, and usually most appreciated by other thieves or thief wannabees.

[QUOTE=Stan Da Man]For anyone interested, there was a decent article in Saturday's Wall Street Journal on Latin America, and the divide between Venezuela, Ecuador and Argentina, on one hand, and Brazil, Chile, Mexico, Columbia, Peru and similar countries on the other. You should be able to access it here: [url]http://online.wsj.com/article/SB123336272714535407.html[/url][/QUOTE]Great article. Puts a perspective rarely viewed.

Argento

[url]http://www.argentinepost.com/2009/02/argentina-on-the-cusp-of-a-recession-di-tella.html[/url]

And yet, they continue to push raises for unions.

Here's another from the Wall Street Journal, [url]http://online.wsj.com/article/SB123430877724170335.html[/url]

The title of this one says its about Latin America and commodities, but the vast majority of the article is about Argentine farmers and the dysfunctional relationship they have with the government in general, and the Kirchners in particular. There's a quote in there from Cristina where she characterizes soybeans as 'little more than a weed.' That is probably the best indication of the contempt she has for farmers and it's astonishing when one considers that 1/10th of the government's revenue came from soybeans via export taxes.

You have to feel a tiny bit for the farmers if they are compared relative to their peers in other nations. The US and Canada subsidize soy bean production while Argentina taxes the heck out of it. I know there are other factors -- including the fact that its much cheaper to grow in Argentina, at least when there's rain -- but it does seem partially true when the writer asserts that the Kirchners are paying for their populist policies on the backs of farmers. Not this year they won't, and that will spell trouble for CFK. Do you think she'll take responsibility for bungling the strike last year, or will she blame it on foreigners? Hmmmmmm. Tough call there, but perhaps the pension seizure offers an initial clue.

La Nación today reported that the purchase or "activity of sex in privados fell 50%". There is widespread concern that many of the working girls will fall below th poverty line. The article states this is in keeping with the rest of the economy in Argentina which is also falling.

[url]http://www.lanacion.com.ar/nota.asp?nota_id=1100328&pid=5852277&toi=6262[/url]

[QUOTE=Facundo]La Nación today reported that the purchase or "activity of sex in privados fell 50%". There is widespread concern that many of the working girls will fall below th poverty line. The article states this is in keeping with the rest of the economy in Argentina which is also falling.

[url]http://www.lanacion.com.ar/nota.asp?nota_id=1100328&pid=5852277&toi=6262[/url][/QUOTE]Do the laws of supply and demand even work in Buenos Aires?

Seems that there is a ton of supply, not as much demand, yet chica prices are increasing. I don't understand.

Jack

[QUOTE=Jackjack1]Do the laws of supply and demand even work in Buenos Aires? Seems that there is a ton of supply, not as much demand, yet chica prices are increasing. I don't understand.

Jack[/QUOTE]According to the article the prices are going down for lack of business. We'll see if those who raised their prices recently will lower them.

[QUOTE=Facundo]La Nación today reported that the purchase or "activity of sex in privados fell 50%". There is widespread concern that many of the working girls will fall below th poverty line. The article states this is in keeping with the rest of the economy in Argentina which is also falling.

[url]http://www.lanacion.com.ar/nota.asp?nota_id=1100328&pid=5852277&toi=6262[/url][/QUOTE]Interesting artical once its transulated

Exon

Takes a while to load

[url]http://translate.google.com/translate?prev=_t&hl=en&ie=UTF-8&u=http%3A%2F%2Fwww.lanacion.com.ar%2Fnota.asp%3Fnota_id%3D1100328%26pid%3D5852277%26toi%3D6262&sl=es&tl=en&history_state0=[/url]

I never realized there was an association for prostitutes (AMMAR) I don't know what power they have, but just had never heard of it before. I wonder how many chicas know about it and how many are members? The girls I know have never heard of it.

However, I found an interesting part of the article that Facundo presented:

"¿Será este año más difícil para las trabajadoras sexuales?", preguntó lanacion. Com. "Ya lo es. Estamos muy preocupadas. Es importante que el Gobierno nos atienda y resuelva los problemas que tenemos".

First, the translation that Google provides automatically is not quite right (I found much worse in other places) It kind of doesn't make sense the way it was translated. It said:

"Is this year more difficult for sex workers?" Asked lanacion. Com. "It is. We are very worried. It is important that we provide and the government solve the problems we have."

The translation is more like (unless I'm missing a point of idiom that I don't understand):

"Will this year be more difficult for the sex workers?" asked lanacion. Com. "It already is. We are very worried. It is important that the government attend to us and resolve the problems that we have."

I just find it interesting the attitude that EVERY LEVEL of worker here in Argentina seems to have that the government take care of them.

Towards the end of the article they do talk about price reductions, but up at the top when they were talking about AMMAR, one of the "titulares" of that organization said:

""Las chicas se quedan sin trabajo y las que tienen trabajos tienen salarios miserables", dijo y subrayó que presiona para que no se reduzcan los precios de los servicios prestados porque eso es "bajar la autoestima"."

Translation:

"Girls are left without work and those that have work have miserable salaries," she said and stressed that she pressures that they don't reduce the prices of the services provided because that is "to lower self esteem."

The Google transalation was:

""The girls are left without jobs and those jobs have wages," he said and stressed that no pressure to reduce prices of services provided because it is "lower self"."

Terrible, terrible translation!

However, I find it interesting that the head prostitute is telling prostitutes not to lower their prices because that will lower their self esteem - I wonder what their self esteem is like when their ribs are sticking out and they are begging for food in the street. Those "in power" here, at most levels, just don't understand economics in even a basic way.

At one point there was mention that prostitute wages were pretty good. Why doesn't the head prostitute say something like "the girls should know that their bodies and the economy won't necessarily last forever and we have been urging them for years to save their money for times like these. It is unfortunate that so many will be affected by this because they make better wages in some cases than so-called professionals in this country and a little foresight would have gone a long way to preventing this problem. Because the demand has been so drastically reduced, I think that many of the girls who cannot make it on their own should return to their country of origin and remove some of the burden from Argentina that they will surely cause when they are out of work and sucking on the government tit."

[QUOTE=El Queso]I never realized there was an association for prostitutes (AMMAR) I don't know what power they have, but just had never heard of it before. I wonder how many chicas know about it and how many are members? The girls I know have never heard of it.[/QUOTE]It started with a roust in a cafe, some madura finally had enough of paying off the cops so she said no and it grew into a movement. Sort of the Rosa Parks of putas.

Thanks for the improved translations, I was wondering about that "lower self" I thought maybe it refered to vice itself, like they didn't have to lower prices because the "lower self" of the men would pay.

Only in Argentina would there be a hookers union.

Regards,

BM

Wait. Did that really happen?

[QUOTE=Daddy Rulz]It started with a roust in a cafe, some madura finally had enough of paying off the cops so she said no and it grew into a movement. Sort of the Rosa Parks of putas.[/QUOTE]

[QUOTE=El Queso]"...they don't reduce the prices of the services provided because that is "to lower self esteem."[/QUOTE]Another word for "self esteem" is "pride", and it is this very Argentine trait that explains why in Argentina the girls don't generally lower their prices when the night gets old or business is slow.

Thanks,

Jackson

[QUOTE=Jackson]Another word for "self esteem" is "pride", and it is this very Argentine trait that explains why in Argentina the girls don't generally lower their prices when the night gets old or business is slow.

Thanks,

Jackson[/QUOTE]I don't think this pride issue can be overstated. It is HUGE in Buenos Aires, affects the portenos in all kinds of wacky ways, and goes a long way in explaining any number of nutty, irrational, illogical behaviors. Plus, it wasn't all that long ago that their currency was 1:1 with the dollar. I am sure that many of them are under the illusion that their currency "should" be comparable despite the mega evidence to the contrary. They so much want things to be like they were that they hold onto these inflated prices as a way to delude themselves into thinking that the past glory is returning. Like I say, completely at odds with reality, but hey, everyone fools themselves about something.:)

Another thing I have noticed about working girls is they usually start off charging very little and seeing many clients.

It seems as time goes by, the smarter ones try to gradually raise their prices while cutting down on the quantity of clients they see and raising the quality of client they see.

I have seen this work for many chicas.

There is a chica I know who started off in a PV, making about $ 100 AR an hour. She became independent, raised her prices to cover her new overhead. Now she is independent, makes the same amount of money, has a higher level of clientele and she has to sleep with much less people.

After seeing all this first hand I don't knock her for her decision, I think she made the right choice.

Regards,

BM.

Yeah Bad, I've seen the same thing many times actually. To the point where they have one or two main boyfriends who pay most or all of their bills.

Of course, that is the right choice if at all possible. More power to them, because surely they are decent service providers at that point and have worked to build up to that.

But they will likely have problems in the coming time of economic issues when they lose one or more of their sugar daddies who they rely on as "regulars" and who do a bit more usually than just pay them a higher price for their time.

At that point, they will be entering a market with lower prices (or at least should, except for the pride thing may keep it artificially inflated to an extent? And will probably have unreasonable expectations on price after having been relatively comfortable for awhile.

According to an article in the Clarin today, tourism fell 8% in December as compared to the same period of 2007. The tourist who came to Argentina in general spent 8% less. Also, 7% less Argentines traveled abroad.

[url]http://www.clarin.com/diario/2009/02/17/elpais/p-01860364.htm[/url]

I guess they are taking a page out of the US's playbook.

Only difference is, I am guessing the Venezuelans don't have to pay it back.

Will this be repeated in Argentina?[QUOTE=BBC NEWS]http:/ news. Bbc. Co. Uk /2/ hi / asia-pacific /7894600. Stm.

China set to boost Venezuela ties.

Chinese Vice President Xi Jinping is due in Venezuela as part of a visit to boost Chinese ties in the region.

Mr Xi is expected to sign agreements including joint ventures with Venezuela's state oil company, PDVSA, the Venezuelan foreign ministry said.

China is also set to inject $4bn (£2.8bn) into a joint investment fund that was set up in 2007 with $6bn.

Mr Xi and Vice Premier Hui Liangyu are both touring Latin America - a sign of the region's importance to Beijing.

Mr Xi would be signing accords on joint ventures for "the exploration, exploitation, processing, refining and transportation of crude oil," a Venezuelan foreign ministry statement said.

"Today we have a long-term strategic alliance for the next 100 years for the joint production of oil," Venezuelan Foreign Minister Nicolas Maduro said.

The two sides are also expected to formalise an increase in a joint investment fund set up in 2007 with initial capital of $4bn from China and $2bn from Venezuela, with Beijing now injecting a further $4bn.

"This fund will provide Venezuela with sources of financing for development projects and to maintain economic growth for the next two or three years, amid the global crisis," Mr Maduro said.

Export markets.

Mr Xi has visited Jamaica, Mexico and Colombia, and is due to travel on to Brazil, while Vice Premier Hui Liangyu's itinerary includes Argentina, Ecuador, Barbados and the Bahamas.

It is rare for two of China's top leaders to descend on the region almost at the same time, and indicates China's ongoing efforts to strengthen ties with and develop its influence on Latin America and the Caribbean, says BBC China analyst Shirong Chen.

China's export markets in Europe and North America have shrunk substantially in the global financial crisis, so Beijing is desperate to open up and maintain markets in Latin America.

Beijing published its first ever policy document on the region last November before President Hu Jintao visited Costa Rica, Cuba and Peru.[/QUOTE]

[QUOTE=BadMan]Only in Argentina would there be a hookers union.

Regards,

BM

Wait. Did that really happen?[/QUOTE]Here is the story.

[url]http://www.guardian.co.uk/world/2004/jan/25/argentina.theobserver[/url]

Haha,

Classic Dirty Harry moment.

"Now, you must ask yourself one question: "Do I feel lucky?'' Well, do you, punk? ".

Regards,

BM

[QUOTE=Daddy Rulz]Here is the story.

[url]http://www.guardian.co.uk/world/2004/jan/25/argentina.theobserver[/url][/QUOTE]

[QUOTE=Daddy Rulz]It started with a roust in a cafe, some madura finally had enough of paying off the cops so she said no and it grew into a movement. Sort of the Rosa Parks of putas.[/quote]Hey Daddy Ruiz, the Guardian UK article is really good, but the Rosa Park of Putas really made my day! LMMFAO HAHAHA!

Where I come from a joke about argentinians is told and exemplifies very well the "Orgullo Porteño" (Porteño Pride): What is the best business in the World? Buy and Sell Porteños. Buy them in what they're worth and sell them in what they think they are worth.

Just a joke, no offense to my argentinian friends.

[QUOTE=El Queso]I never realized there was an association for prostitutes (AMMAR) I don't know what power they have, but just had never heard of it before. I wonder how many chicas know about it and how many are members? The girls I know have never heard of it.

However, I found an interesting part of the article that Facundo presented:

"¿Será este año más difícil para las trabajadoras sexuales?", preguntó lanacion. Com. "Ya lo es. Estamos muy preocupadas. Es importante que el Gobierno nos atienda why resuelva los problemas que tenemos".

First, the translation that Google provides automatically is not quite right (I found much worse in other places) It kind of doesn't make sense the way it was translated. It said:

"Is this year more difficult for sex workers?" Asked lanacion. Com. "It is. We are very worried. It is important that we provide and the government solve the problems we have."

The translation is more like (unless I'm missing a point of idiom that I don't understand):

"Will this year be more difficult for the sex workers?" asked lanacion. Com. "It already is. We are very worried. It is important that the government attend to us and resolve the problems that we have."

I just find it interesting the attitude that EVERY LEVEL of worker here in Argentina seems to have that the government take care of them.

Towards the end of the article they do talk about price reductions, but up at the top when they were talking about AMMAR, one of the "titulares" of that organization said:

""Las chicas se quedan sin trabajo why las que tienen trabajos tienen salarios miserables", dijo why subrayó que presiona para que no se reduzcan los precios de los servicios prestados porque eso es "bajar la autoestima"."

Translation:

"Girls are left without work and those that have work have miserable salaries," she said and stressed that she pressures that they don't reduce the prices of the services provided because that is "to lower self esteem."

The Google transalation was:

""The girls are left without jobs and those jobs have wages," he said and stressed that no pressure to reduce prices of services provided because it is "lower self"."

Terrible, terrible translation!

However, I find it interesting that the head prostitute is telling prostitutes not to lower their prices because that will lower their self esteem - I wonder what their self esteem is like when their ribs are sticking out and they are begging for food in the street. Those "in power" here, at most levels, just don't understand economics in even a basic way.

At one point there was mention that prostitute wages were pretty good. Why doesn't the head prostitute say something like "the girls should know that their bodies and the economy won't necessarily last forever and we have been urging them for years to save their money for times like these. It is unfortunate that so many will be affected by this because they make better wages in some cases than so-called professionals in this country and a little foresight would have gone a long way to preventing this problem. Because the demand has been so drastically reduced, I think that many of the girls who cannot make it on their own should return to their country of origin and remove some of the burden from Argentina that they will surely cause when they are out of work and sucking on the government tit."[/QUOTE]Your translations are perfect and your last two paragraphs are 100% spot on!

Though I doubt if whatever the head hooker is saying has much influence on the girls as the huge majority of them don't know she exists or that there is a "union" of hookers.

[QUOTE=Doggboy]I don't think this pride issue can be overstated. It is HUGE in Buenos Aires, affects the portenos in all kinds of wacky ways, and goes a long way in explaining any number of nutty, irrational, illogical behaviors. Plus, it wasn't all that long ago that their currency was 1:1 with the dollar. I am sure that many of them are under the illusion that their currency "should" be comparable despite the mega evidence to the contrary. They so much want things to be like they were that they hold onto these inflated prices as a way to delude themselves into thinking that the past glory is returning. Like I say, completely at odds with reality, but hey, everyone fools themselves about something.:)[/QUOTE]Hahahaha. Too true!

La Nación reported this afternoon that manufacturing is down between 9-11% in January and was down 12.5% in December. Some sectors were especially hard hit; steel down 42%, autos down 54%. Everyday there are articles printed pointing to a hard economic fall or recession in Argentina. Yesterday it was reported 50% stopped eating in restaurants and going to the movies. Also, 7 out of 10 argentines believe Argentina will experience a recession.

[url]http://www.lanacion.com.ar/nota.asp?nota_id=1101070&pid=5863649&toi=6256[/url]

[QUOTE=Facundo]La Nación reported this afternoon that manufacturing is down between 9-11% in January and was down 12.5% in December. Some sectors were especially hard hit; steel down 42% , autos down 54%. Everyday there are articles printed pointing to a hard economic fall or recession in Argentina. Yesterday it was reported 50% stopped eating in restaurants and going to the movies. Also, 7 out of 10 argentines believe Argentina will experience a recession.

[url]http://www.lanacion.com.ar/nota.asp?nota_id=1101070&pid=5863649&toi=6256[/url][/QUOTE]I was told that actually it's more than the press says.

I've heard that watching currency moves makes one appreciate all the fast-moving action and intricacies when one watches paint dry. That's largely true. Still, watching the peso has been moderately entertaining the past month.

For the past three weeks, the peso has been approaching, SLOWLY, the $3.50:1 mark. It got there intra-day once but I don't think it closed over. It pulled back a bit from there for a while but finally crossed the threshhold on Tuesday. Having pierced that barrier, there doesn't seem to be as much support any more. It's quickly moved to $3.53 and looks like it will keep falling (though I'm no expert or fortune teller)

It will be very interesting to see if the Argentine Central Bank has been trying to prop the peso up or slow the slide and, if so, how much of its reserve dollars it has spent doing so. At some point, they'll wave the white flag, and then look out below. A few events, like another farmer's strike or a marked worsening of the drought, will hasten the slide to $4.00:1. From there, it's anyone's guess. We may be seeing the start of that whole process right now.

Anyone have any local insight into what the exchange houses are doing? Are they giving out dollars? Are they placing limits?

[QUOTE=Stan Da Man]I've heard that watching currency moves makes one appreciate all the fast-moving action and intricacies when one watches paint dry. That's largely true. Still, watching the peso has been moderately entertaining the past month.

For the past three weeks, the peso has been approaching, SLOWLY, the $3.50:1 mark. It got there intra-day once but I don't think it closed over. It pulled back a bit from there for a while but finally crossed the threshhold on Tuesday. Having pierced that barrier, there doesn't seem to be as much support any more. It's quickly moved to $3.53 and looks like it will keep falling (though I'm no expert or fortune teller)

It will be very interesting to see if the Argentine Central Bank has been trying to prop the peso up or slow the slide and, if so, how much of its reserve dollars it has spent doing so. At some point, they'll wave the white flag, and then look out below. A few events, like another farmer's strike or a marked worsening of the drought, will hasten the slide to $4.00:1. From there, it's anyone's guess. We may be seeing the start of that whole process right now.

Anyone have any local insight into what the exchange houses are doing? Are they giving out dollars? Are they placing limits?[/QUOTE]No difficulties with the exchange I use. They just keep buying and selling. The estimates so far on the cost to the central bank of maintaining a controlled slide range from about U$10 billion and one money man I know quite well suggested north of U$20 billion. So I guess it is another instance of false pride which they can only keep up while the Central has funds. They had about U$50 billion when they started the support. Give it a maximum of another 6 months before they run out of dough. The question is and I will give the answer, so no prizes.

How do you spell "very stupid"?

Answer. "A R G E N T I N E P O L I T I C I A N"

Argento

[QUOTE=Argento]No difficulties with the exchange I use. They just keep buying and selling. The estimates so far on the cost to the central bank of maintaining a controlled slide range from about U$10 billion and one money man I know quite well suggested north of U$20 billion. So I guess it is another instance of false pride which they can only keep up while the Central has funds. They had about U$50 billion when they started the support. Give it a maximum of another 6 months before they run out of dough. The question is and I will give the answer, so no prizes.

How do you spell "very stupid"?

Answer. "A R G E N T I N E P O L I T I C I A N"

Argento[/QUOTE]Yep. Although I will say, they've got company. Putin decided to play this same game a few months back and has gotten his ass kicked. He drew a line in the sand for the ruble and said they'd support their currency at that level. They've blown $100 billion, I believe, and still haven't been able to stanch the decline.

At least Kirchner kept her mouth shut about this issue. When you announce that you're going to try to support your currency at a certain ratio, it's almost like the currency trader wolves come out and just pick at the carcass for sport. Russia's certainly not dead, but the traders have been toying with the ruble ever since his announcement. Couldn't happen to a nicer guy. He's seemed far more humble after the war with Georgia, what with all the foreign investors taking flight. Pride followed by a large helping of humble pie.