Argentine Economy

[Marcelo Uribe]

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

The question is and I will give the answer,

Why do you keep on living in a place that disturbs you so much?

Answer:

Because you have been so dude all of your life that there is no other place in the world, at this point, where people could stand you so much as argentine people have already done.

Marcelo

[Facundo]

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?

Two weeks ago the National Bank spent US$120 million and last week it spent 45 million to prop up the peso. The government is controlling the fall of the peso in the following manner:

1. Threatening to sell dollars in order to stop the money changers from too much activity in the buying and selling of dollars.

2. Actually selling dolllars.

3. Making it very difficult to buy dollars unless you can prove from where the money came from.

4. Quite a few banks and exchange houses now make you sign a small document that you swear you are not exchanging more than US$2,000 per month.

5. Visiting private banks. These banks have no signs. It's all based on trust. There are more than a few of them in barrios like Once. These are private banks in apartments that are fortified like banks, but are used to send money overseas by way of Panama, Germany, etc. These so called banks charge anywhere from 1 to 1.5% to send money. Literally you leave the money with them and within a few days it shows up in your account or in the account of the person you are sending it to. This is similar to the diamond exchangers of 47th street of New York city.

6. AFIP (the equivalent of the IRS) this week sent 1200 agents to visit 15,000 individuals and companies for investigation of not paying taxes and getting them to put their illegal stashes of dollars in the open (blanquear el dinero)

7. Also, AFIP has threatened to get court orders to look in bank safety boxes if they suspect avoidance of taxes and the holding of dollars that were ill gotten.

Anyway, it seems to me that the government is keeping the peso from floating downwards not with a "shhhhhh", but with a bang.

[Stan Da Man]

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

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.

[Argento]

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?

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

[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?

[MCSE]

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.

http://www.lanacion.com.ar/nota.asp?...63649&toi=6256

I was told that actually it's more than the press says.

[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.

http://www.lanacion.com.ar/nota.asp?...63649&toi=6256

[Aqualung]

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.:)

Hahahaha. Too true!

[Aqualung]

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."

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.

[Whiskas]

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.

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.

[BadMan]

Haha,

Classic Dirty Harry moment.

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

Regards,

BM

Here is the story.

http://www.guardian.co.uk/world/2004...na.theobserver

[Daddy Rulz]

Only in Argentina would there be a hookers union.

Regards,

BM

Wait. Did that really happen?

Here is the story.

http://www.guardian.co.uk/world/2004...na.theobserver

[BadMan]

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?

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.

[Facundo]

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.

http://www.clarin.com/diario/2009/02...p-01860364.htm

[El Queso]

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.