Argentina

[Green King]

Can us mere mortals get some context and commentary  ;D

 

So it's a buy? Or is it still uncertain due to political instability. The uncertainty in the countries' monetary future possibility of unrest, hyperinflation and regeme change ?

[PlanMaestro]

Argentina: watch out for a devaluation.

http://blogs.ft.com/beyond-brics/2013/01/22/argentina-watch-out-for-a-devaluation/#axzz2IsUfVpfg

[cofabmd]

-Slim buys 8% stake in YPF.-

 

He got the YPF shares through the default of a Petersen Group loan.

 

 

[PlanMaestro]

Yep.

 

-Slim buys 8% stake in YPF.-

 

He got the YPF shares through the default of a Petersen Group loan.

[jjsto]

Yeah, its hard to see a scenario down here where there isnt both inflation and a declining official peso in the short term.  It is also hard to see where any type of robust economic growth could come from.  Given the terrible economic climate valuations are low and falling.  Maybe if the trend continues, a good idea would be to raise some private equity money and buy a company around +/- 3 times earnings....

 

http://www.ieco.clarin.com/economia/venta-empresas-argentinas-efecto-YPF_0_841715949.html

 

Argentina: watch out for a devaluation.

http://blogs.ft.com/beyond-brics/2013/01/22/argentina-watch-out-for-a-devaluation/#axzz2IsUfVpfg

[PlanMaestro]

Argentina, always something going on.

 

Argentina Says It Won’t Voluntarily Comply With Bond Ruling

http://www.bloomberg.com/news/2013-02-27/argentina-seeks-relief-from-u-s-court-in-debt-fight.html

[rros]

Argentina, always something going on.

 

Hi all. First post... and thank you for letting me participate of this fascinating forum.

 

Interesting things being said about this country. Here is a small contribution for a better decision making process...

 

In the last year or two deep changes have been taking place. Government has been using maoist techniques to brainwash elementary students into their thinking, crystallized into "La Campora", a sub-branch of the peronist party. La Campora resembles in many ways the action of the original nazzi SS from the pre-war Germany. It is very difficult to define whether the government -or La Campora- has a left orientation as there are elements of the right and of extreme nationalism. This salad bowl of ideas looks more like 'state capitalism' where the government takes all profit. Expropiation is simply a tool within a larger interventionist policy.

 

An example of how it works: in the past, the government expropiated ANSES funds (pensions) to later realize that ANSES invested its large float with argentine public companies. Then, the government realized that through these investments they could appoint board members into public companies and set policy. Government board members have a clear leftish ideology with complete disregard of free markets.

 

In order to avoid mistakes of the past ripping apart capitalism itself they have learned to use the mechanisms that govern capitalism to gain control, specially of the profits. Congress recently passed a law by which the government could intervene any argentine company that trades in local bursars. But since they are smarter than their predecessors they are not calling the appointed agents "interventors" but "vehedores" which has a slightly less aggressive tone to it while still being able to achieve the same goals, as vehedores have more power than anyone sitting at the board.

 

Not so long ago there was also a bill circulating in Congress by which 10% of profits should go to workers and labor (still making the rounds) and another law was passed in December by which public companies are not allowed to issue shareholders rights plan (for protection) if that could mean affecting minority shareholders. As you may know, such plans try to prevent outsiders from taking over by issuing dilutive shares. The government said the idea behind this law was to protect those with minority stakes. But the protection is for "them" for their participation in public companies via the ANSES.

 

Just this past week there were rumors about a plan by the executive to issue federal credit cards to be used in supermarkets targeting the purchases of any of 400 different items. The use of this federal credit card, issued by the national bank (Banco Nacion) would entail cancelling any other credit card at supermarkets (Visa, mastercard, etc.). This project, they say, could help reign control in prices and tame inflation. You are all smart enough to see that such an advancement has a much darker side. There is literally not one industry they have not tried to control or get their hands unto.

 

The difference with Chavez/Venezuela is that Mr. Chavez found it easy to control the pipes where oil circulates. The infrastructure, so to speak. Not so easy to control the essential resource in Argentina: farmland. Imagine trying to control a highly atomized universe of farmers around the country. Not that they don't want to. It is just a lot more difficult than the venezuelan experiment. Even when confiscating  land they woud find it remarkably difficult to control the "chacareros".

 

So, invest...

 

but always remember this government said "vamos por todo", we go after everyone and everything.

 

That may mean one day... your money!

[Spekulatius]

Now this could get very interesting :

https://www.wsj.com/world/americas/argentina-votes-for-new-president-to-confront-economic-crisis-99b73b86?mod=world_lead_story

 

https://archive.ph/el0nv

 

 

Javier Milei, a Self-Described Anarcho-Capitalist, Is Elected President of Argentina

The libertarian outsider, who says he will upend years of free-spending populist rule, defeats ruling party candidate Sergio Massa

 

 

 

[rkbabang]

4 hours ago, Spekulatius said:

Now this could get very interesting :

https://www.wsj.com/world/americas/argentina-votes-for-new-president-to-confront-economic-crisis-99b73b86?mod=world_lead_story

 

https://archive.ph/el0nv

 

 

Javier Milei, a Self-Described Anarcho-Capitalist, Is Elected President of Argentina

The libertarian outsider, who says he will upend years of free-spending populist rule, defeats ruling party candidate Sergio Massa

 

 

 

 

This guy looks like the real deal!

 

He even named one of his dogs Rothbard.

I’d vote for anyone who was willing to dress up as Captain An-cap in public.

 

 

[backtothebeach]

This video is pretty accurate, although they exaggerated a bit by giving Tucker the smallest peso bills in circulation at the moment.

Each of the 100 peso bills he received was worth $33 dollars only 15 years ago. Now 100 pesos is worth $0.10.

 

 

[backtothebeach]

Interview with Milei, now elected president.

 

[formthirteen]

Wow, he's fun to watch:

https://twitter.com/search?q=argentina

 

He's an economist and a politician that had his brain-to-mouth filter removed. I hope he fixes Argentina's economy.

 

Quote

up until 1962 the Argentine per capita GDP was higher than that of Austria, Italy, Japan, and of its former colonial master, Spain

 

 

Quote

Licentiate in Economics, Universidad de Belgrano, Argentina; two Master's in Economics, Universidad Torcuato Di Tella and CEDES/IDES. Former: Head Economist, Estudio Broda and Máxima AFJP; Senior Economist, HSBC, Argentina; Adviser of the Argentine Government, ICSID. Currently, Head Economist, Corporación América. B-20/G-20 Adviser and Member, Group of Economic Policy, ICC/G-20. Since 2012, leads the division of Economic Studies, Fundación Acordar, a think tank of national scope. For more than 20 years, University Professor of Macroeconomics, Economics of Growth, Microeconomics and Mathematics for Economists. Has written over 50 academic papers.

 

 

Edited November 20, 2023 by formthirteen

[SharperDingaan]

You can expect that every Argentinian who has not done so already; will be putting everything they have into crypto, ideally BTC. Mortgage money poured into BTC, and local banks pressured to do everything they can to NOT call in the loans. Today, an Argentine mortgage ($1,000), and a BTC asset ($1,000). Argentine currency devalues by 2/3, 1/3 of the BTC asset sold, $1,000 of Argentine money repatriated and the Argentine mortgage repaid. The true 'intrinsic value' of BTC.

 

All that it requires is someone willing to accept Argentine currency for USD, and there is nothing the Argentine central bank can do about it. They pay for the bribes and whatever Argentine goods they can for export in Argentine currency, and wholesale the cargo for cents on the US dollar as soon as the ship is back in international waters. Within Argentina, good for exports immediately rise by 25%. Outside of Argentina, the price of those goods immediately falls 25%.

 

High value goods (meat) travelling by air.

 

SD   

[backtothebeach]

37 minutes ago, SharperDingaan said:

You can expect that every Argentinian who has not done so already; will be putting everything they have into crypto, ideally BTC. Mortgage money poured into BTC, and local banks pressured to do everything they can to NOT call in the loans. Today, an Argentine mortgage ($1,000), and a BTC asset ($1,000). Argentine currency devalues by 2/3, 1/3 of the BTC asset sold, $1,000 of Argentine money repatriated and the Argentine mortgage repaid. The true 'intrinsic value' of BTC.

 

All that it requires is someone willing to accept Argentine currency for USD, and there is nothing the Argentine central bank can do about it. They pay for the bribes and whatever Argentine goods they can for export in Argentine currency, and wholesale the cargo for cents on the US dollar as soon as the ship is back in international waters. Within Argentina, good for exports immediately rise by 25%. Outside of Argentina, the price of those goods immediately falls 25%.

 

High value goods (meat) travelling by air.

 

SD   

 

Real estate is priced in US dollars in Argentina, and often paid cash. I suppose technically mortgages in pesos exist, but the interest rate is 100%+, reflecting 100%+ inflation and likely currency devaluation by more than a half over a year. It is a toss up whether receiving the 100%+ interest or paying it will win over inflation and devaluation.

 

Not to say there is no way to take advantage of inflation, devaluation and different dollar exchange rates, which is a whole different mess. A mess that contributed to yesterday's election outcome.

[Pelagic]

Some great lines in this article from The Economist following the initial elections in October that dig into how the Peronist machine works. Is the takeaway for Peronists following yesterday's election that they need to re-think their strategy or that 1% of GDP just isn't enough to win? 

 

Quote

Many voters, whose living standards have sunk under both Peronist and centre-right governments, flocked to him. To win them back, the government opened the taps. In the weeks running up to the election Mr Massa handed out a bonus for pensioners in pesos worth $100 (at the official exchange rate), and eliminated income tax for 99% of all workers. Such measures are estimated to have cost the equivalent of around 1% of gdp.

 

https://www.economist.com/the-americas/2023/10/23/argentinas-presidential-election-delivers-a-surprise-result

[SharperDingaan]

Keep in mind that there will also soon be a debt restructuring. Argentina first ..... then others.  

https://ionanalytics.com/insights/debtwire/argentina-investors-foresee-new-sovereign-debt-restructuring-regardless-of-next-president/

 

All that is needed is a long-dated zero coupon. Benefit as the zero-coupon reprices to a lower yield, and multiple times again over the medium term; depending upon how the FX is managed. Today it's South America, next week it's Greece; no need to rush 

 

SD

 

 

[james22]

 

[Spekulatius]

Argentinian stocks are up big time:

 

 

A lot of bad takes on twitter that socialism is to blame but the former right wing governments weren't much better. hopefully Javier Milei can make a difference, but this won't be easy as the rot is deep.

[rkbabang]

7 hours ago, formthirteen said:

Wow, he's fun to watch:

https://twitter.com/search?q=argentina

 

He's an economist and a politician that had his brain-to-mouth filter removed. I hope he fixes Argentina's economy.

 

 

Yes, he's great.  He's a like a mix of Ron Paul's politics (only more so) with Trump's unfiltered way of speaking (only more so).   I love it.

 

[Castanza]

All I know is never put any one man on a pedestal as they are likely to disappoint.  Seems like a step in the right direction for a country that once had a ton of promise. System issues are not easy to fix though; especially when the ship is this far off course. 

[dwy000]

1 minute ago, Castanza said:

All I know is never put any one man on a pedestal as they are likely to disappoint.  Seems like a step in the right direction for a country that once had a ton of promise. System issues are not easy to fix though; especially when the ship is this far off course. 

Well said.  That country has so many long-ingrained issues that no single person can solve them, let alone in a single term.  He's also got to work with existing parties which means he won't be able to actually do a tenth of the things he claims or wants.  

[scorpioncapital]

Because anarcho-capitalism worked everywhere it was tried? What are the super wealthy anarcho-capitalist nations, by this we mean something with zero welfare state? How does that work in Argentina where 40% are well below poverty line? Is it kinda like they die out and the averages go up? what i mean is i doubt this guy's ideas will turn things around.

[Castanza]

3 minutes ago, dwy000 said:

Well said.  That country has so many long-ingrained issues that no single person can solve them, let alone in a single term.  He's also got to work with existing parties which means he won't be able to actually do a tenth of the things he claims or wants.  

 

Exactly, seems like a good dude on the surface with a framework I prefer; but the reality of getting these things done are slim to none. Maybe if he had the powers of Lucius Quinctius Cincinnatus and then the honor to hand it back over as well. 

[rkbabang]

1 hour ago, Spekulatius said:

 

A lot of bad takes on twitter that socialism is to blame but the former right wing governments weren't much better. hopefully Javier Milei can make a difference, but this won't be easy as the rot is deep.

 

 

Good thing he's libertarian not right wing.  As for the rot, that's what the chainsaw is for.

 

 

Edited November 20, 2023 by rkbabang

[Spekulatius]

Adopting the USD instead of the Peso imo is already a very bad idea, imo.