Argentina's first couple deliver prosperity – for themselves
Anyone surprised by this? Anyone? Didn't think so.
[quote]They were elected on the promise of delivering prosperity to Argentina, but statistics showing a stunning economic turnaround have come with a catch.
New figures show that since Nestor and Cristina Kirchner came to power in 2003, they have presided over a remarkable sixfold increase in their own wealth.
The couple have racked up a fortune through property speculation and investments that have thrived even as the economy has faltered. Last year alone their wealth jumped 158% to £7.3m.
Opponents have accused the Kirchners of exploiting political connections in their home state of Patagonia to buy municipal land cheaply and sell it at a vast profit. "It's a scandal," said Patricia Bullrich, a member of congress.
The couple, lawyers by training and leftists in the Peronist movement, denied any wrongdoing and through a spokesman said that being in office did not impede business deals: "That is the essence of capitalism."
In an unusual tandem, Nestor served as president until 2007 when he stood aside for his wife, a veteran senator and politician in her own right, who was elected in the first round over a divided opposition.
They were popular for presiding over a speedy recovery after Argentina's econnomic meltdown in 2001-02. But underlying problems became apparent after "Queen Cristina", as she is known to some, took over.
Analysts said inflation was perhaps triple the official rate of 9% , a figure widely viewed as a product of government fiddling, and a bruising battle with farmers over export taxes was compounded by a drought. After six consecutive years of steady growth the IMF expects GDP to shrink by about 1.5% this year. Industrial activity has slumped.
With their own party riven by in-fighting, the Kirchners lost control of congress in mid-term elections last month. In their Patagnonian fiefdom, however, they have notched up property deals that would have made Donald Trump proud.
According to information the couple supplied to the anti-corruption office, they own 28 properties valued at $3.8m, four companies worth $4.8m and bank deposits of $8.4m. Last year they sold 16 properties, almost tripling their bank accounts, and expanded their hotel business in El Calafate, a tourist magnet. Their debts also jumped because of bank loans.
Local authorities have investigated transactions over suspicions that a mayor had given the Kirchners a bargain price for municipal land, but the case has stalled.[/quote][url]http://www.guardian.co.uk/world/2009/jul/26/argentina-kirchner-wealth[/url]
It's a good thing they're lefties and only care about the people. Could you imagine how much looting and pillaging they would have managed if they were cold-hearted, compassionless conservatives?
Credit Suisse Recommends Argentina GDP Warrants;Data Disputed
Liked this line: "In the confusing world of Argentine statistics, investors must make bets based on what they think the government will report, rather than on perceptions of reality."
[QUOTE]BUENOS AIRES (Dow Jones)--Credit Suisse recommended buying Argentina's gross domestic product warrants based on the likelihood that the government will report rosier economic growth than most economists are expecting in reality.
"We have revised our real GDP growth forecast for 2009 to reflect what we think the official statistics will show, rather than what we believe is happening with economic activity," Credit Suisse said late Tuesday in a report.
The bank raised its 2009 real GDP growth forecast to 2% from -2.5% previously, "even though we still think that, on average, real GDP will contract 2-3% this year," the bank said.
In the confusing world of Argentine statistics, investors must make bets based on what they think the government will report, rather than on perceptions of reality. The official statistics institute, or Indec, is widely accused of manipulating data, particularly inflation, which is thought to be underreported, and growth, which is thought to be overreported.
The government denies the charges, saying the figures are no less reliable than anywhere else in the world.
The GDP warrants pay out only when economic growth is relatively strong. They've paid out in recent years thanks to an economic boom, but probably won't pay out for 2009, given the sharp slowdown even in the official GDP numbers. Argentina is thought to be in a deep recession, buffeted by the global slowdown, and yet because the official GDP figures aren't expected to reflect that, the warrants could still pay out next year.
"If we value the GDP warrants using the projections of what we think the official statistics will show, these look cheaper (relative to our previous scenario, when we valued the GDP warrants assuming that there would be a -2.5% contraction in 2009)" Credit Suisse said.
Credit Suisse said it expects Argentina to recover in 2010, and kept its estimate for official growth in 2010 at 3% , which is just below the 3.3% benchmark that would trigger a GDP warrant payment. The likelihood is that the 3% figure may be surpassed, it said.
Payments for the GDP warrant occur at the end of each year only if the previous year's real GDP growth and level (as reported by Indec) are greater than the threshold "target" GDP specified at the start of the contract, Credit Suisse said.
"The size of the payments depends on the level of GDP, thus, our upward revision to the 2009 GDP forecast increases the probability of payments in 2011 and the size of potential payments thereafter," it said.
Nevertheless, the bank warned that should its base case scenario materialize, growth in 2009 and 2010 would be too low to trigger a payment.
"We continue to recommend the euro-denominated GDP warrant (USD-denominated warrants look attractive as well) as a leveraged play on the economic recovery in Argentina in 2010, and the likelihood that the official data will continue to overstate the pace of economic activity," Credit Suisse said.
Economy Minster Amado Boudou recently unveiled plans to "strengthen" Indec, although there's still plenty of skepticism that any reforms will lead to a significant improvement in the quality of the data reported.
"The changes to Indec that the government has recently decreed will not lead, in the near term, to a significant narrowing of the large gap between the official data and the actual figures," the bank said[/QUOTE]
Argentina's Peso Slips To ARS3.83 In Low Volume Trading
A local friend was telling me his wife was refused a cash withdrawal from their bank, a check was offered. There could have been a lot lost in the details between my limited Spanish and his limited English. However, could tell he was tweaked. More than one acquaintance has voiced their concern lately about the government and the banks. Appears they smell something is brewing on the horizon. Wondering if others have heard anything?
[QUOTE]BUENOS AIRES (Dow Jones)--After weeks of staying absolutely still, Argentina's peso slipped for the second consecutive day Thursday, falling to ARS3.83 to the U. S. Dollar.
That puts the peso down from ARS3.82 the previous day.
"There seems to be. Some fear in the market," said Hector Blanco, a trader at ABC Mercado de Cambios. "This is not a fluid market. Whenever you have a market that's hard to get in and out of, this is going to create distortions in the market and that's what's happening now."
Blanco said the Argentine Central Bank has been enforcing "unfriendly" policies, making it hard for banks and other companies to trade in the market.
Meanwhile, exporters are selling few dollars while demand for them remains strong.
Blanco said it is hard to say what will happen next.
"The central bank isn't providing clear rules," he said. "There are those who think it'll intervene to strengthen the peso and those who think it'll let the peso slide further. I tend to think they'll intervene today."
Trading is "practically nothing," Blanco said, noting that only $12 million had been traded by Thursday afternoon.
Most economists expect the peso to slip to around ARS4 by the end of the year.[/QUOTE]
