That link doesn't seem to work.
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That link doesn't seem to work.
[QUOTE=David_33]That link doesn't seem to work.[/QUOTE]Try this link:
[url]http://www.nytimes.com/2008/11/13/world/americas/13argentina.html?scp=3&sq=argentina&st=cse[/url]
Poor bastard will have government investigators up his ass pronto!
Back in August of 2008 the exchange rate was AR$1.00 - BR$.52. Today the exchange rate is AR$1.00-BR$.70. The peso has strengthened or the real has fallen approximately 40% in less than 4 months. Since Brazil is one of Argentina's major trading partners, it's impossible for the peso to remain so strong without major economic implications. It appears to me, after the Argentine Senate votes in favor of taking over the retirement funds and the Central Bank stops selling dollars, the peso will lose its strength not only against the Real but also against the US$ dollar. The US$ to AR$ exchange rate will probably be around US$1.00 - AR$3.70 by February of 2009.
[url]http://finance.yahoo.com/currency/convert?amt=1&from=ARS&to=BRL&submit=Convert[/url]
I am curious if these crisis is hitting BA hard yet. People are losing massive amounts of money. Even my conservative investments are taking huge hits now. This has to effect tourism at some pt. Even if your were in gold you have lost money.
I would think this would depress prices for chicas eventually. There seems to be a wave of people selling stuff on craigs list to help raise money. I used to live in NYC and still have friends there and he said the mood is very grim. So many people are getting laid off.
My concern is the U. S. Govt is gonna start printing dollars to fight deflation and that will take away the only recent positive for travel; the favorable USD$ fx rates recently.
Bart
I am arriving in Buenos Aires (aeropuertro EZE) on Sunday, November 23.
I was wondering if anyone knows if there are ATM machines available in the terminal. I had gone to my foreign exchange place here in Seattle to pick up an order of Argentine Pesos and was told that due to the inflation issues in Argentina, the currency was not available. I would like to be able to have cash (other than dollars) with me on that Sunday.
Gracias for qualquier informacion. Chau
When you come out of the departure area either 1) make a complete u-turn to your right and you'll see it along the back wall, or 2) keep straight and go left around the Taxi Ezeiza booth, a few yards further and the machine is to your left.
Probably there are others in the airport, too. Just ask.
Nov. 21 (Bloomberg) -- Argentina's stock market is fading as the state seizure of the nation's biggest shareholders undermines investor confidence and threatens an equity sell-off.
The Argentine Senate last night approved President Cristina Fernandez de Kirchner's plan to nationalize about $24 billion in private pensions, a move opposition parties called a cash grab and the government said is a way to protect retirees from the worst financial crisis since the Great Depression.
For the Buenos Aires Stock Exchange, the government's decision underscores the growing irrelevance of a market whose listed stocks dropped to 82 from a record 669 four decades ago and is discouraging outside investment because of capital restrictions.
"It's a substantial blow to the capital markets," said Eduardo Costantini, the 62-year-old chairman of Buenos Aires- based real-estate and asset management group Consultatio, the sole Argentine company to go public this year. "The only long- term investor with characteristics of the pension fund industry disappears with this."
The funds, known by their Spanish acronym AFJPs, hold about a quarter of shares available for public trading in Argentina, data compiled by the companies show. They were net buyers of shares for a third month in September as the benchmark Merval index tumbled 10 percent and emerging-market funds pulled out.
The Merval is down 60 percent this year, compared with the 48 percent decline in Brazil's Bovespa index and 38 percent slide in the Mexican Bolsa. Argentina's economy, which slipped into a recession after the government defaulted on $95 billion of debt in 2001 before recovering, is headed for a slowdown. That may lower tax revenue and hurt its ability to meet debt payments, according to Goldman Sachs Group Inc. Economist Pablo Morra.
Possible Downgrade.
The government is taking over pension funds as MSCI Inc. Whose stock indexes are tracked by investors with $3 trillion in funds, prepares to remove the biggest stock, Tenaris SA, from its Argentine measure and considers downgrading the nation to frontier from emerging-market status.
"Put all those together and it really spells the death knell of the Argentine equity market as a place where foreigners want to invest," said Citigroup Inc. Strategist Geoffrey Dennis. Citigroup this week cut its recommendation for Argentina to "zero" from "underweight."
In 1995, a year after the AFJPs were set up to help bolster capital markets, Argentina's share of emerging market equity fund investments was 4 percent, making it the third most invested Latin American market after Brazil and Mexico, according to fund flow tracker EPFR Global in Cambridge, Massachusetts. That shrank to 0.5 percent at the end of September, putting it in fifth spot among regional peers.
Stock Assets.
The pension funds' assets include 6.8 billion pesos ($2 billion) held in local stocks, according to Argentine regulators. They will be transferred to the state-run social security agency as part of the government's decision.
The funds invested about $144 million in domestic equities in September, according to Deutsche Bank AG. Foreigners have been selling at the fastest pace in eight years. Emerging-market funds sold about $340 million in Argentine stocks through September in the biggest outflow since 2000, according to EPFR.
The government forced the pension funds to sell more than $500 million in Brazilian stocks in a three-day fire sale last month, as Amado Boudou, the head of the social security agency Anses, said pension accounts shouldn't hold any foreign assets.
In an Oct. 28 speech to lawmakers, Boudou vowed to "protect the value" of the AFJPs' domestic equity holdings and said the government won't "rush out and sell at any price."
'Shallow' Market.
While Mariano Kruskevich, an analyst with Grupo SBS in Buenos Aires, said the social security agency is unlikely to begin a broad sell-off of local stocks given the "shallow" market and continuing credit crisis, some investors speculate it's possible.
Holdings in individual companies probably will be cut to a maximum of 10 percent over five years, Ambito Financiero newspaper reported Oct. 27, citing people it didn't name at Anses.
AFJPs own at least 20 percent of companies including Buenos Aires-based Telecom Argentina SA and Siderar SAIC. Anses press officials didn't return phone or e-mailed requests for comment.
"If emerging markets stabilize, I think they'll look to sell whenever they can," said Greg Lesko, who helps manage $1 billion at Deltec Asset Management in New York, including Latin American shares. "A fire sale wouldn't serve anybody's interest. They'll probably do their best to time it. A lot's going to do with what's going on in the rest of the world."
The pension nationalization also will hurt Argentina's asset management industry, which oversees the AFJPs' foreign holdings, and eliminate demand for share and debt issues, Consultatio's Costantini said. His company, which raised about $100 million in an initial public offering in May, probably will be the last IPO for "a long time," he said.
To contact the reporters on this story: James Attwood in Santiago at [email]jattwood3@bloomberg. Net[/email]
There is an old joke about 2 friends, both keen race-goers and inveterate gamblers, who would bet on 2 flies climbing a window pane. One day at the races, there is a fairly tight finish and Fernando says to his friend, "$100 on the brown horse to win". His friend takes Fernando's bet and the brown horse comes in second. Fernando pays his friend the $100. Later that night they are watching the video replay of the race. Fernando shouts out to his friend, "Did he want to bet again at double the previous wager". Naturally his friend agreed and the horse of course, once again comes in second. Fernando rather forlornly paid his friend the $200 wager and made the passing remark that he thought after the fairly good run earlier in the day, the brown horse would improve and win next time.
Sort of like Nestor / Christina Kirschner and the Argentine economy. I have seen them repeating the same mistakes of the past and in my naivity, still thought that they expected the economy to be successful. During my nineteen years of exposure here, I have seen it collapse twice and now expect it to collapse again. And for basically the same set of reasons. Rampant internal inflation, wage increases not based on increased production, manipulated exchange rates and the absolute pig-headedness of refusing to change the way they run the economy.
But I think we are missing the point. Since Peron's time, the cycle has been repeated 5 times and each time it has collapsed causing misery and chaos. One has had to wonder if there exists here a complete inability to learn from experience and to adjust policies for the future. Or, as I now believe, it is a cynical sprat to catch a very big mackerel.
Perhaps a little history would not go astray. The incumbent goverment is the remains of the party popularised by Juan Peron and based on Mussollini's Fascist theory. Now reviled and synonomous with the Black Shirt thugs, the Second World War and social upheaval, the Fascist political theory at one stage was quite an acceptable alternative to Communism and capitalism. Basically it put the various economic groups together as a bundle. Antique English used to refer to a tied bundle of sticks as faggots and this word shares the same Latin root as Fascist. (No, not the faggots of Exon circa Las Heras. I have no idea of the antecedent of that use, except that faggot also meant bundles of steel ready to be welded; ie 2 men welded together, pillow-biters and cock-suckers take note).
Following on, each of these groups, (a good example would be the car industry), contained the various trade unions, the capitalists, the bankers, the retailers, component suppliers etc. The theory was that they would come to a consensus and speak with a common voice. And all the Fascists/groups would then take part in a socially co-hesive government, led of course in Italy by il Duce himself and here in Argentina, by those prize pieces of shit, Juan Peron and his populist Evita. Well of course it didn't work, but most times and untill they lost political power, they harnessed the theory and became strong, personally very rich, populist leaders. And in Argentina, left a lasting legacy that has impoverished and will continue to impoverish, a country that has the essential physical assets to be one of the richest in the world.
And essentially the Peronist Party here keeps that Fascist torch burning, only of course to appease the working and poverty-stricken classes of Argentina, who have the insane belief that the party is acting in their interest. The shrinking middle-class are not fooled, but since they don't count politically, the Peronists don't even factor them into their equation. The farmer's revolt is about the only time the Peronists played a ordinary hand, badly. They certainly didn't make the same mistakes grabbing the middle-classes superannuation funds. This hand they played masterfully. And since the media here are government sycophants in the main, they toe the Peronist Party line and any other opposing voices are lost in the background.
The real object of the leaders of the Peronist Party is maintaining raw power so that they can continue to rape and pillage the economy and enrich themselves. Menen came to the Presidency as a millionaire due soley to the corrupt income received when he was governor of La Rioja. When his presidency finished after 2 terms, he acknowledged he was a billionaire. Due of course, as he says, to generous friends who appreciated him. I am quite certain the Chilean Miss Universe who he married and is now divorced from, reamed his bank account out well and truly, but that is another story. Nestor and Christina pinched half a billion dollars from the coffers of the Province of Santa Cruz when he was the governor, as well as strong-arming their way into property deals that have made them millions. Who would know how much they have pinched during their respective Presidencies. If the orgy of public roadworks is any indication, (it is generally reckoned that a minimum of a third of the contract price for public works is allowed for coimas or bribes) they are continuing to rake the money in. Almost certainly by now, well in front of Carlos Menem.
So don't fall for the Peronist 3 card trick. They repeat the mistakes of the past because that is the way to political power and obscene wealth in this country. And they have been particularly successful. Everybody that is interested enough to observe, thinks they are stupid for their economic policies. But that is not the aim. They couldn't give a damm what you think, they are in it for the money and their economic policies work very well, thank you very much! Don't be deceived by the sound and light show. Follow the dough.
Argento
Great post, Argento. Chavez is doing much the same thing in Venezuela. He uses slightly different rhetoric, but he undoubtedly will be a wealthy man once he is ushered out of office. I would venture that the same is true of most of the Senators in the U. S. Senate, although perhaps on a smaller and less gaudy scale. Most come to office as millionaires and leave as multi-millionaires despite agreeing to do the public's bidding at $200K or so per year. It's amazing how they all manage to pick up a few extra multiple millions in their spare time.
I think the frustration with Argentina's economic policies is more directed to the fact that they are allowed to exist -- with virtual apathy from the public. Populism explains some of that. A complacent (or cooperative) media explains some of that. Still, one would think that the old adage "fool me once, shame on you; fool me twice, shame on me" would come into play at some point. Or, to put it another way, when does the voting public decide to "throw the bums out" -- populism and the co-opted media be damned?
Eventually, the economy collapses and someone has to pick up the pieces and start over again, even if its not totally from scratch. That would seem to be a logical inflection point. If so, Argentina probably has a two-year window or less until they get another shot at throwing the bums out. Will there be anything other than new bums to fill the void?
[QUOTE=Stan Da Man]Will there be anything other than new bums to fill the void?[/QUOTE]No!
Argento
[QUOTE=Argento]There is an old joke about 2 friends, both keen race-goers and inveterate gamblers, who would bet on 2 flies climbing a window pane. One day at the races, there is a fairly tight finish and Fernando says to his friend, "$100 on the brown horse to win". His friend takes Fernando's bet and the brown horse comes in second. Fernando pays his friend the $100. Later that night they are watching the video replay of the race. Fernando shouts out to his friend, "Did he want to bet again at double the previous wager". Naturally his friend agreed and the horse of course, once again comes in second. Fernando rather forlornly paid his friend the $200 wager and made the passing remark that he thought after the fairly good run earlier in the day, the brown horse would improve and win next time.
Sort of like Nestor / Christina Kirschner and the Argentine economy. I have seen them repeating the same mistakes of the past and in my naivity, still thought that they expected the economy to be successful. During my nineteen years of exposure here, I have seen it collapse twice and now expect it to collapse again. And for basically the same set of reasons. Rampant internal inflation, wage increases not based on increased production, manipulated exchange rates and the absolute pig-headedness of refusing to change the way they run the economy.
But I think we are missing the point. Since Peron's time, the cycle has been repeated 5 times and each time it has collapsed causing misery and chaos. One has had to wonder if there exists here a complete inability to learn from experience and to adjust policies for the future. Or, as I now believe, it is a cynical sprat to catch a very big mackerel.
Perhaps a little history would not go astray. The incumbent goverment is the remains of the party popularised by Juan Peron and based on Mussollini's Fascist theory. Now reviled and synonomous with the Black Shirt thugs, the Second World War and social upheaval, the Fascist political theory at one stage was quite an acceptable alternative to Communism and capitalism. Basically it put the various economic groups together as a bundle. Antique English used to refer to a tied bundle of sticks as faggots and this word shares the same Latin root as Fascist. (No, not the faggots of Exon circa Las Heras. I have no idea of the antecedent of that use, except that faggot also meant bundles of steel ready to be welded; ie 2 men welded together, pillow-biters and cock-suckers take note)
Following on, each of these groups, (a good example would be the car industry) contained the various trade unions, the capitalists, the bankers, the retailers, component suppliers etc. The theory was that they would come to a consensus and speak with a common voice. And all the Fascists / groups would then take part in a socially co-hesive government, led of course in Italy by il Duce himself and here in Argentina, by those prize pieces of shit, Juan Peron and his populist Evita. Well of course it didn't work, but most times and untill they lost political power, they harnessed the theory and became strong, personally very rich, populist leaders. And in Argentina, left a lasting legacy that has impoverished and will continue to impoverish, a country that has the essential physical assets to be one of the richest in the world.
And essentially the Peronist Party here keeps that Fascist torch burning, only of course to appease the working and poverty-stricken classes of Argentina, who have the insane belief that the party is acting in their interest. The shrinking middle-class are not fooled, but since they don't count politically, the Peronists don't even factor them into their equation. The farmer's revolt is about the only time the Peronists played a ordinary hand, badly. They certainly didn't make the same mistakes grabbing the middle-classes superannuation funds. This hand they played masterfully. And since the media here are government sycophants in the main, they toe the Peronist Party line and any other opposing voices are lost in the background.
The real object of the leaders of the Peronist Party is maintaining raw power so that they can continue to rape and pillage the economy and enrich themselves. Menen came to the Presidency as a millionaire due soley to the corrupt income received when he was governor of La Rioja. When his presidency finished after 2 terms, he acknowledged he was a billionaire. Due of course, as he says, to generous friends who appreciated him. I am quite certain the Chilean Miss Universe who he married and is now divorced from, reamed his bank account out well and truly, but that is another story. Nestor and Christina pinched half a billion dollars from the coffers of the Province of Santa Cruz when he was the governor, as well as strong-arming their way into property deals that have made them millions. Who would know how much they have pinched during their respective Presidencies. If the orgy of public roadworks is any indication, (it is generally reckoned that a minimum of a third of the contract price for public works is allowed for coimas or bribes) they are continuing to rake the money in. Almost certainly by now, well in front of Carlos Menem.
So don't fall for the Peronist 3 card trick. They repeat the mistakes of the past because that is the way to political power and obscene wealth in this country. And they have been particularly successful. Everybody that is interested enough to observe, thinks they are stupid for their economic policies. But that is not the aim. They couldn't give a damm what you think, they are in it for the money and their economic policies work very well, thank you very much! Don't be deceived by the sound and light show. Follow the dough.
Argento[/QUOTE]The above explains the situation in Argentina pretty well.
However, I have always thought there is another, possibly more sinister, explanation for the actions of the government.
About 100 years ago 50 or 100 families controlled the wealth of Argentina. With massive immigration and the growth of the labour movement these families developed a plan to keep the wealth of Argentina in their hands.
A part of the plan seems to be.
1) prevent the development of competition. If your family owns the condom factory the last thing you want is a price war with more efficient competitors.
A good way to eliminate competition and keep your condom monopoly is to.
1) place outrageous taxes on imported goods. Consequently, the condoms manufactured more efficiently elsewhere cost more than the inefficiently manufactured condoms in Argentina.
2) discourage foreign investment. Having foreign companies build condom factories in Argentina is not a good idea if you want to keep your condom monopoly. Therefore, ridiculous labor laws, worthless unions, a predatory tax structure, rampant corruption and a government that interferes with private business all serve a purpose. They discourage foreign investment.
3) destroy the capital markets. Letting your competitors have access to investment capital is the last thing you want. Following this plan the Argentina stock market, which had some 700 listed companies 40 years ago now has about 80 listed companies.
If you follow these steps you will continue your condom monopoly.
The fact that these steps inhibit economic growth, promote one economic crisis after another, prevent the creation of new wealth, prevent the creation of a middle class, ensure the population is unemployed or underemployed and sends the misery index is to the moon is of no concern if you want to keep your condom monopoly.
How do politicians fit into this? Often politicians are connected with the original wealthy famililies and are in complete agreement with the above policies. Politicians bent on reform usually succumb to stealing public funds and lose interest in meaningful reform or these politicians promote populist policies which have the unintended effect of concentrating the wealth of Argentina in a few hands.
P.S. I am not implying that labor unions or populist politicians supporting the ridiculous labor laws of Argentina want Argentina's wealth to remain in the hands of only a few Argentinean famililies. Rather, labor unions and populists are unwitting pawns in this game.
Another possibility is that the wealthy families of Argentina never orchestrated the above policies. Rather, the wealthy families of Argentina were merely the recipients of half-baked policies that had the unintended effect of concentrating the wealth of Argentina in their hands.
In any event I am in complete agreement with Argento. The economic trainwreck known as Argentina is no accident. There is a method behind the madness. Entities in Argentina are benefiting from bizarre economic policies that have caused untold misery and choas for the vast majority of the citizens.