Thread: Argentine Economy
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10-26-14 07:21 #1431
Posts: 911Originally Posted by Tres3 [View Original Post]
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10-26-14 01:50 #1430
Posts: 577Argentina Bond Fight Judge Griesa Gets New Ken Dart Suit
Another holdout bond holder sues. It is not just Singer who wants to get paid in full. If CFK digs the hole any deeper, Argentina may go the way of Venezuela.
http://www.bloomberg.com/news/2014-1...tml?cmpid=yhoo
Tres3.
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10-23-14 13:18 #1429
Posts: 577Cambios
Originally Posted by DaddyRulz [View Original Post]
Tres3.
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10-23-14 12:26 #1428
Posts: 2808Maybe
Originally Posted by Riina [View Original Post]
It's weird though, even back in 2002 through 2006 when the "official" rate was driven by the market there still were cambios. Maybe because you had to present ID when changing money even then and people trying to convert unreported profit needed the no questions asked services of the cambios.
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10-23-14 11:08 #1427
Posts: 29Originally Posted by Moore [View Original Post]
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10-23-14 00:59 #1426
Posts: 1043Originally Posted by Riina [View Original Post]
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10-22-14 21:58 #1425
Posts: 29Originally Posted by Tres3 [View Original Post]
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10-21-14 12:19 #1424
Posts: 577Argentina Black Market Proving Irresistible to Tourists
Surprise, Surprise.
http://www.bloomberg.com/news/2014-1...-tourists.html
Tres3.
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10-21-14 06:48 #1423
Posts: 911Originally Posted by Dickhead [View Original Post]
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10-21-14 04:31 #1422
Posts: 416Originally Posted by Dickhead [View Original Post]
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10-21-14 01:37 #1421
Posts: 577Invest in Dollars and Pray
Originally Posted by Dickhead [View Original Post]
Tres3.
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10-20-14 23:50 #1420
Posts: 3510If I understood this right, they are going to re-calibrate the amount on which the 1.75% is paid by the change in the official exchange rate. Example for a $1,000 bond: Official rate starts out at say 8 to 1 so the $1,000 bond is worth 8,000 pesos and the interest is (8,000 x .0175) = 140 pesos. Now after a year the rate is 10 to 1. The bond is worth 10,000 pesos and the interest will be (1,000 x .0175) = 175 pesos. That's why that Argie politician says the holders will "benefit" if the currency is devalued. They will get more pesos. But hello, the devaluation was because of inflation and 175 devalued pesos aren't any better than 140 undevalued pesos. Plus they get screwed the whole time period between the adjustments because the coupon is based on the beginning of the period calculation.
So it's hard to see anyone buying these bonds. Yet, people buy lottery tickets. In my state, lottery tickets say right on the front: "Prizes equal 50% of sales." I say to my friends who buy lottery tickets, "Just give me a dime and I will give you a nickel and you will be better off." Why better off and not just the same? Because gambling is heads you lose, tails you win and pay taxes. Winnings are taxable and losses can't be deducted unless you are a professional gambler and even then you have to already be itemizing AND the loss has to exceed 2% of income. So really if you buy a lottery ticket in my state your return on a dollar is fifty cents minus the tax on fifty cents.
I guess you could win if the devaluation was way more than the inflation during the holding period. That could happen if the devaluation was long overdue, which it is, so maybe that is the potential appeal. Buy the bonds, eat some inflation, dump right after the devaluation and hope to come out ahead.
Christ, what do you invest in if you're an Argie? Real estate is so illiquid because of the lack of financing. The banks aren't safe. The bonds aren't safe. Their stock market is all fucked up. I guess you hold precious metals. Then your apartment gets broken into and your insurance won't pay off and you jump out a window.
Do Argie insurance companies ever even pay off?
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10-20-14 22:36 #1419
Posts: 912Dollars to Pesos
Both the article Tres3 posted from Bloomberg and the article in the Buenos Aires Herald clearly stated:
The bonds are to be denominated in US Dollars.
The bonds are to be paid in Argentine Pesos at the OFFICAL EXCHANGE RATE, there was no guarantee in the Herald article on the official rate not being changed either up or down.
The bonds are to pay a whopping 1.75%.
The bonds will be governed by Argentine Law.
What could possibly go wrong?
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10-20-14 17:27 #1418
Posts: 70No I think that they are Peso Bonds with a return of capital based on change in the Official Dollar Exchange rate.
So if/when Argentina devalues, this will enhance the return on the bonds.
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10-20-14 16:32 #1417
Posts: 2808Wait, wait, wait
Originally Posted by Tres3 [View Original Post]
I've got to get into the Sovereign Debt business.