Argentine Economy

[BadMan]

If I have read the actual facts correctly and not just some entertainment news sound bite, it seems Ecuador is referring to a debt of about 4 Billion dollars that was incurred in the 80's under very very unfavorable terms and horrible interest rates. It is also important to note that the presidents that signed those very unfavorable terms were subsequently thrown out of office. It is even more important to note that Ecuador has already paid about 9 billion back, but the principle seems to remain the same.

Correa would be stupid to keep feeding the hog. He needs to renegotiate the interest, but these rates are ridiculous and are part of the reason these international lending organizations have such a bad reputation in Latin America.

Unless all the price sensitive punters here thinks it's reasonable to pay such high interest rates.

Regards,

BM

[Damman]

Default is the only game in town anymore. It is the latest craze. You need to get your head out of that pussy for a second or two and read a newspaper. Borrow and walk with impunity. Nothing to it. Plus, Uncle Sam will even give you more money when you suggest you "may" default. You have got to get on this band wagon before it quits playing.

[Tessan]

Looks like Ecuador has the money to pay the interest payment. Ecuadorean President Rafael Correa is doing it for populace reasons. He says that he does not want to cut serves to pay the interest payment. He says the bonds are illegal, but I don't think that will stand up in court, and Ecuador's asset might get seized.

The interest payment is due Dec. 15. It looks like Ecuador is buying back its bond right now at about 23 cents on the dollar. It is possible that Correa plan it to buy back some of the bonds at 23 cents on the dollar, then on Dec. 15, change his mind and make the $30.6 million interest payment due Dec. 15. The bonds where selling at 97 cents on the dollar, before he started talking about not paying, so whatever they buy back on 23 cents on the dollar, will save Ecuador money.

This has the markets nerves, since Ecuador can easily pay the interest, has more then enough cash to do it, but is choosing not to. If nothing bad happens to Ecuador, then other countries, might say the same thing, and no pay up. I read this is the first time a countrie is defaulting on debet, when it can easily pay.

Although Correa says he will not make the payment, I read they are buying there bonds back at 23 cents on the dollar. Ecuador refuses to say if they are buying there bonds, but I heard some brokers it looks like they are buying it. Why would they refuse to say if they are buying it, if they are not, why not say no, we are not buying it? If they are, it would be bad to say they are, because the price would go up.

It is also possible, that they are buying it back, since they already said, they are willing to buy it back at a discount, and 23 cents on the dollar, is a very good discount.

[Exon123]

Ecuador defaults.

Ecuador's dollar-denominated debt prices plunged on news of its second default in a decade and the first in Latin America since Argentina in 2002, although the decision was not expected to lead to similar moves around the region.

Correa, a US-trained economist and ally of Venezuela's anti-US President Hugo Chávez, refused to make a US$31 million interest payment due on Monday on 2012 global bonds, saying the debt was contracted illegally by a previous administration. "I gave the order not to pay the interest and to go into default," Correa said. 'We know very well who we are up against — real monsters."

Reuters

[Damman]

Came across these default statistics for 12/08/08: improvement for Argentine.

See where Ecuador will be in default.

[Stan Da Man]

Good article. I would like to have been the guy who did the research for that piece. I would have gone about it somewhat differently, however. Rather than merely surveying boliche owners and webmasters, and in lieu of getting second-hand information, I would think that first-hand negotiation and experience directly with the chicas would have been in order.

Of course, you would have to make sure that you had a large enough sample population such that you could be confident in your results -- all in the name of science, of course. The article might have taken a bit longer, but I think it would have rested on a much firmer foundation. That's the biggest problem with journalists these days: None of them want to roll up their sleeves and get their hands dirty.

[Lunico]

December 9, 2008

Financial Crisis Tames Demand for World ’s Oldest Service.

By DAN BILEFSKY.

PRAGUE — On a recent night at Big Sister, which calls itself the world ’s biggest Internet brothel, a middle-aged man selected a prostitute by pressing an electronic menu on a flat-screen TV to review the age, hair color, weight and languages spoken by the women on offer.

Once he had chosen an 18-year-old brunette, he put on a mandatory terry-cloth robe and proceeded to one of the brothel ’s luridly lighted theme rooms: an Alpine suite decorated with foam rubber mountains covered with fake snow.

Nearby, in the brothel ’s cramped control room, two young technicians worked dozens of hidden cameras that would film the man ’s performance and stream it, live, onto Big Sister ’s Web site.

Customers can have sex free of charge at Big Sister, in return for signing a release form allowing the brothel to film their sexual exploits.

But even with this financial incentive, Carl Borowitz, 26, Big Sister ’s marketing manager, a Moravian computer engineer, lamented that the global financial crisis had diminished the number of sex tourists coming to Prague.

“Sex is a steady demand, because everyone needs it, and it used to be taboo, which made a service like ours all the more attractive, ” said Mr. Borowitz, who looks more like Harry Potter than Larry Flynt. “But the problem today is that there is too much competition and our clients don ’t have as much disposable income as before.”

In the Czech Republic, where prostitution operates in a legal gray zone, the sex industry is big business, generating more than $500 million in annual revenues, 60 percent of which is derived from foreign visitors, according to Mag Consulting, a Prague-based research firm that studies the industry.

Big Sister is not the only brothel suffering the effects of a battered global economy. While the world ’s oldest profession may also be one of its most recession-proof businesses, brothel owners in Europe and the United States say the global financial crisis is hurting a once lucrative industry.

Egbert Krumeich, the manager of Artemis, Berlin ’s largest brothel, said that in November, usually peak season for the sex trade, revenues were down by 20 percent. In Reno, Nev. The famed Mustang Ranch recently laid off 30 percent of its staff, citing a decline in high-spending clients.

Big Sister is not struggling as much as some of its more traditional rivals, since its revenues are largely derived from the 30 euros a month, or about $38, its 10,000 clients pay to gain access to its site.

But Mr. Borowitz said Big Sister hoped to offset a 15 percent drop in revenues over the past quarter by expanding into the United States. The brothel also produces cable TV shows that air on Sky Italia and Britain ’s Television X, as well as DVDs like “World Cup Love Truck.”

Ester, an 18-year-old prostitute at Big Sister who declined to give her last name, said that big-spending clients had diminished, but that she was still earning nearly 2,000 euros a month — enough to pay the rent and buy Louis Vuitton bags. “The reason to do this is for the money, ” she said, after gyrating half-naked on a pole. Being filmed, she added, made her feel more like an actress than a sex object.

Since the fall of Communism in 1989, the Czech Republic has become a major transit and destination country for women and girls trafficked from countries farther east like Ukraine, Russia, Belarus and Moldova, according to the police.

For nearly 20 years, tens of thousands of sex tourists have streamed into Prague, the pristinely beautiful Czech capital, drawn by inexpensive erotic services, an atmosphere of anonymity for customers and a liberal population tolerant of adultery. According to Mag Consulting, 14 percent of Czech men admit to having sex with prostitutes, compared with a European Union average of 10 percent.

Dozens of cheap flights to Prague have also ensured a flow of bachelor parties from across Europe, with multiple daily flights from Britain alone.

Jaromir Beranek, an analyst with Mag Consulting, said the strength of the Czech crown against the euro, lower spending power and competition from lower-cost sex capitals like Riga, Latvia, and Krakow, Poland, were threatening one of the country ’s most thriving sectors.

Many Czechs are more than happy to see Prague shrug off its reputation as one of the world ’s top 20 sex destinations. But some in the hotel industry are so alarmed by the drop in tourists that they are lobbying the government to legalize the trade, in the hope that it will help lure more clients.

While some critics have warned that legalization would effectively transform the Czech state into the country ’s biggest pimp, the Czech government is considering whether to emulate the Netherlands and Germany by regulating prostitution like any other industry. It is considering passing legislation by the end of the year that would require the Czech Republic ’s estimated 10,000 prostitutes to register with the local authorities.

Dzamila Stehlikova, a minister from the Green Party, who is shepherding the bill through Parliament, argued that by forcing the business out into the open, it would make it harder for human traffickers to thrive, while helping to ensure mandatory health checkups for prostitutes. Other advocates argued that legalization would generate millions of euros in lost tax revenue from an industry that was largely underground.

Not everyone is enthusiastic; the prostitutes themselves say that being issued prostitution identification cards would further stigmatize them.

Hana Malinova, director of Bliss Without Risk, a prostitution outreach group, said she feared the current credit crunch was pushing more poor women into prostitution, since they could make more money selling their bodies — about 120 euros for a half-hour session at some upscale sex clubs in Prague — than flipping burgers at McDonald ’s.

Even with the downturn, she added, prostitution was far more resilient than other industries, though the downturn was discouraging adultery.

“An Austrian farmer from a remote area who is not married will still cross the border to the Czech Republic looking for sex, ” she said. “On the other hand, the recession is helping to keep husbands at home who might otherwise be cheating on their wives.”

In Czech towns near the German border in northern Bohemia, long blighted by a daily influx of sex tourists, many are happy that the business is suffering.

Only a few years ago the town of Dubi was so overrun by prostitution that a nearby orphanage was opened to provide refuge for dozens of unwanted babies of prostitutes and their German clients. Sex could be purchased for as little as 5 euros — the price of a few beers in Dresden — drawing a daily influx of more than 1,000 sex tourists.

Today, more than three dozen brothels have been winnowed down to four; several were converted into goulash restaurants or golf clubs.

Petr Pipal, Dubi ’s conservative mayor whose zero-tolerance policy was a key reason for the change, said that installing surveillance cameras and police officers at the entrance of brothels had deterred sex tourists. Rising prices for sex services and the global financial crisis, he added, were also helping to tame demand.

“Two or three years ago, we would get 1,000 men coming here for sex on a Friday night, which is a lot for a town of 8,000 people, ” he said. “The one good thing about the economic crisis is that it is helping to keep sex tourists away.”

In Prague, even brothels in the most touristy areas complain they are suffering from economic hardship. On a recent night near Wenceslas Square in Prague, dozens of young men loitered outside a row of neon-lighted sex clubs, beckoning passing tourists with offers of complementary alcohol and racy strip shows.

Inside Darling, a multilevel cabaret famous for cancan shows modeled on the Moulin Rouge in Paris, young women gyrated on a stage, surrounded by leopard skin couches, flashing disco balls and paintings of naked women.

Suzana Brezinova, the club ’s marketing director, said some high-spending businessmen still visited Darling to shrug off economic doldrums.

“People have less money, ” she said. “But hard times also mean that people want to be cheered up.”

Jan. Krcmar contributed reporting from Prague, and Victor Homola from Berlin.

Copyright 2008 The New York Times Company.

[Aqualung]

The same thing happened in the mid 70's. It became impossible to find coins. According to popular myth at that time they were being shipped to Brazil to be used as washers as the metal value was in excess of the nominal value of the coin. Not long after there was a big devaluation and a few zeros were dropped off the peso (Ley 1888 or something like that) and the Peso Nuevo appeared in it's place and coins started circulating again. Then another big devaluation in the 80's and came the Austral with it's shitty alloy coins that were paperweight and not worth a shit. Then we got the peso back again and as it was stuck to the Dollar the coin kept it's value till we come to today.

Shit, where did the Peso Argentino fit in this story? There have been so many devaluations and changes of currency that I have lost count!

Anyhow someone should weigh the coins and see if it's true that they are worth more as scrap metal than their nominal value. Might be an interesting experiment!

[Easy Go]

It was a PITA finding peso coins to use on the bus in October. I got an unwanted 20 or 30 centavo bonus from places on several occasions because they wanted to give me a 2 peso bill instead of coins. Lots of sighs and rolling of the eyes when they had to cough up coins because I didn't have exact change.

I didn't have much of a problem with small bills. I always withdraw an odd number from the ATM to get some small bills, e. G. 290 pesos rather than 300. 100 peso bills were not horrible as long as they were spent in high-volume places like supermarkets and busy restaurants.

My guess is that like most shortages, hoarding is now the biggest part of the problem. The one theory the author didn't mention that I heard several times is that peso coins are being shipped to Chile and melted down because the metal is worth more than a peso. Seems unlikely but it wouldn't be the first time that a coin needed to be reformulated to lower the cost.

[Stan Da Man]

The author of this article states that there is widespread hoarding of monedas going on in BA. I wasn't watching for this on my last trip and I didn't notice it. I did notice that small bills were harder to come by. In fact, the exchange house just outside EZE woudl not give me $1,000 in tens and twenties. The most they would give is AR$200, and the rest in hundreds.

Anyone else notice the coin shortage? If so, why hoard coins?

http://www.slate.com/id/2205635/

[Facundo]

The problem with these people I think is that they are so proud, they think.

They are better than everyone else.

Geo, I think you hit on the correct phrase, "they are so proud", to describe why Argentines are condemned to repeat their mistakes.

While studying at the University of Buenos Aires, one of my professors gave a series of lectures on the word "soberbia"* (arrogance, haughtiness, excessive pride, superb) to describe the reason Argentines get hit on the head over and over again with crisis every ten to 15 years. They are so proud they believe nothing can happen to them. By the way, I think below the veneer of this excessive pride Argentines suffer from insecurities like the rest of us.

*soberbia sustantivo femenino (orgullo) pride;

(altivez) arrogance, haughtiness, superb,.

Soberbio,-a adjetivo.

1 (altivo) haughty.

2 (espléndido, insuperable) superb, splendid

[Geo Eye]

Ohhh! You are given 'em too much time. I predict the meltdown before the end of the summer. Today no gas station sold any gas for the cars. Yesterday a big fight started between two Unions fractions, one dead man, many injured. This country is fucked.

The problem with these people I think is that they are so proud, they think.

They are better than everyone else.

I think that is where the problem lies, they cannot wake up and look around.

Them and realize thier country is in complete disorder and it is a free for all.

With only a matter of time before a meltdown that will have many people.

In soup lines much worse than the 30's in the US.

IN the end, I really feel sorry for the Arges, they just would rather starve.

Than admit they are WRONG.

It really is that pride that has destroyed their country.

In real, they do not know how to channel the energy.

[Tatshea Travel]

The premise from wich I'll start is this: "INTELLIGENCE IS NOT EQUAL TO MONEY".

Anyone not accepting this (because he considers that yes, intelligence IT IS equivalent to money) don't waste his time in going on. The ones that don't know what the word premise, or equivalent, means can consult Aristotle's Logic, where it is spoken largerly about the theme, or in the Wikipedia, where it is spoken briefly (it's a pity Wikipedia, that great north american invention, didn't exist in Plato's or Aristotle's times. The "Metaphysics" would have been summarized in 100 or 150 lines, perhaps. And Plato's "Phaedro" in 2 or 3. Imagine all the time this two man would have gained for their's families, or for eating hamburguers)

If anyone don't know the meaning of intelligence, well, now we would be in deepest waters.

Then, accepting that intelligence would not be equivalent to money, we can infer that having intelligence would not be the same as having money. One can be rich for having born in a rich country, or simply for having born from a wealthy father and be a perfect asshole believing himself the smartest guy in the world. And not only that, believing himself he can teach other guys, even other countries, even the whole humanity how to be. Or how to "make" money, at least.

Oops! How near we are now to the reversing of the subject in the famous statement "stupids that don't know they're stupid". We're not sure of whom we are speaking about, now.

But let's continue.

So, if having money doesn't mean necessary you have the brains to create it, it's very probably that people who had brains had dedicated, his time and his skilfulness, all along history, to create other kind of things more important than money. In the Middle Ages the richest man of the community usually was a prestamist. Who never do nothing except work with other people's money. The constructors of cathedrals, the philosophers, the great discoverers usually were poor. Cristobal Colon was broken when he convinced Queen Isabel de Castilla to pawn all his jewells (to a prestamist, of course) to finance a trip nobody was very sure where.

Being in the possession of a lot of money, has been largerly prooved all along history, and by history itself, differs more and more from the concept of intelligence. From what intelligence really is. If not, in wich other way we can explain the Industrial Revolution? Was that a product of intelligence (in the greek, pure, clear meaning of the term: the highest faculty of the human being, the one that distinguish us from beasts) with his 12 year old kids dying in the coal mines of England, the cruel explotation of Africa, only for the purpose of providing slaves to the plantations of the Antillas but most of all of North America? If someone considers that intelligence, I'm sorry but there's some important part of his brain that doesn't work well. Though things didn't end there. They continue. Getting worse each time. In the name of capitalism and his wrongly called intelligence the Rich Guys, the Big Fishes of Society devastated the globe, ransacked the forests, polluted the air and the rivers, extinguished 80% of the animal species that existed until the last century. Only for money. So that the Megacorporatives that nowadays rule the world gets richer and richer.

O. K. That's power.

But don't tell me it's intelligence.

I rather called it stupidity. The same kind of stupidity that has people who considers the invasion of Irak an act of pure love for the humanity, not a megamillionar affair. Or that Cuba needed to be commercially punished along decades only because they have to be protected from comunism. Or that each South American president the White House didn't like they had the right to be moved or changed by the C. I. A. As it were a puppet. Usually it's the same kind of people that moves around the globe wherever the fluctuation of the dollar calls them. But moving like inside a bubble, a big bubble never mixing with the people of the country they are in, indiferent and waterproof to any other culture or any other way of living but his own. Though critizising, yes, everything and everybody because they believe they have the right to do so, because they are intelligent. They are The Smartest Guys in the world.

We Argentines know very well wich are our faults. Wich are not, very probably, the ones the Smartest Guys think they are. But we know when and from whom accept the critics. A critic must be humble, if it really want to be a critic. A critic with arrogance is not a critic, is a declaration of superiority. A critic that looks to submit for his own profit. That kind of critic is not accepted. And I particulary don't think would be accepted any place in the world. What is the value of a critic like that? Is there anything else you can do but laugh in the very face of the criticizer?

Since I entered this forum for the very first time, that was more or less two years ago, I've been reading predictions announcing the proximity or the Apocalypse, banks confiscating deposits, a dollar at 5, 6, or even 10 pesos, even a blood bath that would cover the Nation. Nothing of that has happened. Nothing of that has much probabilities to happen, at least in the near future. Perhaps the dollar will get a little higher. But not too higher. The situation of the country is not the same as in the 2001, internal and external, and not even then have been "a blod bath" anywhere. What could happen, anyway, would only be the side effect of what already happened in the north, where the real landslide occur. And, I'm affraid, will continue to "occur" for a long time. There, there were banks confiscating deposits, yes, people who lose all that they had. There, the State had to take up, not to save the poor but to save the rich ones, as usual. The Smart Guys. The BIg Fishes that knew how to rule the world. The intelligents.

So, my friends, next time you hear the famous statement "stupids that don't know they're stupid", ask yourselves of who are we really talking about?

And who is this moron? Subcomander Marcos? Go back to your mammy and Daddy, buddy. The'll teach you some respect about WHO THE RULERS OF THE WORLD ARE. I don't need to know by your mouth what inteligenze is. I know it very well something you looks like not.

[Tatshea Travel]

According to La Nacion newspaper, sales of apartments in Puerto Madero are down in the past few months between 30-60%. The other day the headline in the same newspaper was a story regarding the expectation that real estate prices will drop about 25%. Also, today, La Nacion reported a drop in sales of mid to expensive wines of about 40%.

http://www.lanacion.com.ar/nota.asp?...63953&toi=6270

So nows the time to buy Facundo! But don't wait too long because real state even in its worst time in Argentine don't got much more low that that.

[Tatshea Travel]

I would never buy a car or a house or apt. In argentina as I have stated time and time again, one day you will wake up and the "state now own your property" it is only a matter of time.

The country is getting worst fianacially each day.

It is only a matter of time before there is another meltdown.

If the USA sneezes these third world country catch severe pneumonia.

I predict a meltdown much worse than 2000. By late 2009, early 2010

Ohhh! You are given 'em too much time. I predict the meltdown before the end of the summer. Today no gas station sold any gas for the cars. Yesterday a big fight started between two Unions fractions, one dead man, many injured. This country is fucked.