Per Bloomberg [URL]http://www.bloomberg.com/news/2014-08-28/deeper-default-pain-looms-as-reserves-shrink-argentina-credit.html[/URL] expect peso weakness until January when Argentina is expected to reach an agreement.
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Per Bloomberg [URL]http://www.bloomberg.com/news/2014-08-28/deeper-default-pain-looms-as-reserves-shrink-argentina-credit.html[/URL] expect peso weakness until January when Argentina is expected to reach an agreement.
[QUOTE=RetireNTrave;441067]Per Bloomberg [URL]http://www.bloomberg.com/news/2014-08-28/deeper-default-pain-looms-as-reserves-shrink-argentina-credit.html[/URL] expect peso weakness until January when Argentina is expected to reach an agreement.[/QUOTE]Don't expect to see the Peso strengthen in January. That's right in the middle of summer vacations. People can't get nearly enough dollars to travel with from the official sites and that scarcity always drives the peso down.
The rate in late January is consistently the weakest peso of the year.
I'm not an economist nor do I play one on TV but there are a finite number of actual dollars in the country and competition for them is never higher than January. With everything that has happened this year we have just now pulled past where they were in early February. Adjusted for inflation, this 14.1 is still less than the 12.4 or so of January / February.
DR.
[QUOTE=DaddyRulz;441073]Don't expect to see the Peso strengthen in January. That's right in the middle of summer vacations. People can't get nearly enough dollars to travel with from the official sites and that scarcity always drives the peso down.
The rate in late January is consistently the weakest peso of the year.
I'm not an economist nor do I play one on TV but there are a finite number of actual dollars in the country and competition for them is never higher than January. With everything that has happened this year we have just now pulled past where they were in early February. Adjusted for inflation, this 14.1 is still less than the 12.4 or so of January / February.
DR.[/QUOTE]DR. Great insights.
Since Kiciloff left New York with no deal (no surprise) and the reek of the "independent" private banking sector proposal started to emanate, you could tell that the fix was in and the CFK Mob showed its hand. One of the reasons why the holdouts are pressing so hard is to force the country's hand before it gets more freedom of movement when the key restriction lapses come the end of the year. Logically, you'd think that they'd have been better off with a wink and a nod and just waiting until January but, they needed to put real consequences in CFK's path and they knew that Argentina being Argentina, there was the possibility of s sweetheart deal (I. E. CFK violates the provision through smoke, mirrors, slight of hand and complete lack of integrity and thumbs her nose at the saps that accepted the swap).
Now, the consequences have been meted out and CFK and company seem to be weathering the storm (remember, they don't give a sh*t about anyone other than themselves) so, it'll be interesting to see how the viper deals with the holdouts come January. The country is in default, what more can Griesa do?
I had thought (and I think I posted to this effect) that I expected the bottom for the peso to be 10:1 (ish). The markets all expect further devaluation and the spreads between the official and blue rates have been widening drastically (an indication of market expectations for the official rate to fall). Last January (going from memory), the spread between the official and blue rates was between 300 and 400 basis points, before the devaluation. Right now, the spread is around 600 basis points.
[QUOTE=Tres3;441034]The interesting fact that the media does not report, and the Argentine government conveniently overlooks, is that Bank Mellon NY has received NO instructions from Argentina, to wire transfer the money in compliance with the federal district judge's order. The only instructions that BMNY has received is to pay the bond interest to the "haircut" bondholders, but not the "hold out" creditors. The judge has ordered BMNY that if they pay one, they must pay all, or be held in contempt. Contrary to the Argentine government, BMNY will not break the law, and cannot legally return the money to Argentina, because Argentina refuses to give them wire transfer instructions. BMNY finds itself between a rock and a hard place. Something tells me that once this debacle is all over, BMNY will not do any more business with the Argentine government.
Tres3.[/QUOTE]This is why so few large US financial institutions actively invest in Argentina.
More on the Argentina debt fiasco.
[URL]http://www.bloomberg.com/news/2014-08-29/argentina-s-abnormal-default-still-hurts-as-losses-swell.html?cmpid=yhoo[/URL]
Tres3.
The below link says that CFK's "Paradise" leave something to be desired.
[URL]http://www.bloomberg.com/news/2014-08-29/corn-heists-turning-grain-port-into-argentina-s-chicago.html[/URL]
Tres3.
[QUOTE=Tres3;441105]The below link says that CFK's "Paradise" leave something to be desired.
[URL]http://www.bloomberg.com/news/2014-08-29/corn-heists-turning-grain-port-into-argentina-s-chicago.html[/URL]
Tres3.[/QUOTE]I don't see the Chicago comparison. One is a bunch of gang cliques killing each other and the other is a weak government giving rise to opportunist thugs.
[QUOTE=WildWalleye;441075]This is why so few large US financial institutions actively invest in Argentina.[/QUOTE]Another reason banks don't like Argentina is that Argentina requires that all banks "invest" 50% of their deposits in Argentine paper. And then the Government (Argentina) tries to micromanage how the bank operates. That and there is a tax on all deposits over $1. 000 p and a tax on checks, and then there is a additional IVA charge on each credit card payment (after you have already paid IVA on the purchase!) , etc. Etc. Its a accounting nightmare and then most Argies won't use the banks because of a mandatory monthly "fee" (state mandated "insurance" etc. Etc.) that is more then 50 pesos a month last time I checked.
[URL]http://www.buenosairesherald.com/article/168626/minimum-wage-increased-31-to-4760-pesos[/URL]
Today La Presidenta announces the minimum wage will increase 31% to 4760 ARS per month.
Up from 200 ARS in 2003.
Argentina's minimum wage now "highest in Latin America and that, measured in dollars, Argentine workers could purchase much more than their counterparts in Brazil or Uruguay. ".
[QUOTE=Canardly;441113][URL]http://www.buenosairesherald.com/article/168626/minimum-wage-increased-31-to-4760-pesos[/URL]
Today La Presidenta announces the minimum wage will increase 31% to 4760 ARS per month.
Up from 200 ARS in 2003.
Argentina's minimum wage now "highest in Latin America and that, measured in dollars, Argentine workers could purchase much more than their counterparts in Brazil or Uruguay. ".[/QUOTE]That's bullshit (but you knew that). That might be true if you converted to dollars at CFK's rate but not at the market rate. Costa Rica and Panamá are both higher, at the market rate.
Not sure where to post this, but I'm just wondering if you expats are all secretly wishing for an economic collapse? Seems you would all be empowered by your hard currency and the misery of Argentinians.
I think most ex-pats are [B]openly[/B] wishing for an economic collapse. That's how I discovered the place to begin with.
[QUOTE=Riina;441157]Not sure where to post this, but I'm just wondering if you expats are all secretly wishing for an economic collapse? Seems you would all be empowered by your hard currency and the misery of Argentinians.[/QUOTE]I personally would like to see that house of cards collapse only so Cristina can eat her words. I already feel bad for the average Argie family. As for my "empowerment" , I was better of when the rate was three to one. I lived very well on 500 U $the a month then.
[QUOTE=Dickhead;441160]I think most ex-pats are [B]openly[/B] wishing for an economic collapse. That's how I discovered the place to begin with.[/QUOTE]I think it is more along the lines of waiting for the inevitable Argentina economic collapse. It is like waiting for the sun to come up, except that you don't know the exact time.
[QUOTE=Riina;441157]Not sure where to post this, but I'm just wondering if you expats are all secretly wishing for an economic collapse? Seems you would all be empowered by your hard currency and the misery of Argentinians.[/QUOTE]Inever felt any advantage vis a vis how things were back then for me in 2007 - my first ever trip to BA.
But lately in last 2 months or so, I have felt the advantage for the very first time ever. In the sense, the inflation in prices ( be it chica rates or grocery) is not equally proprotional to the blue rate :- to my advantage.
Mind you. This is for the for the first time ever in last 2 months and don't know how long it is going to last, this way.