Economic Storm Clouds Brewing for Argentina?

[vamonos2012]

I am continuing to invest in Argentina. I know plenty of other small businesspeople who are investing as well. Small-scale businesses are pretty much immune to the kind of government psychosis that the Ks like to inflict on all of us because there just isn't enough cash (caja) for them to go after.

If I had a huge cash-producing industry like oil, mining, banks, etc, I would be worried right now. But if, like me, you have restaurants, taxis, real estate, etc., then you are pretty much immune to government action.

And the fact that you can get $6 pesos per dollar on the CCL market means that if you have dollars you can buy up Argentine assets that are denominated in pesos for dirt cheap. They are saying that if the dollar floated freely it would be worth $4.80-5.00 on the open market. So the fact that you can get $6.00 per dollar means a huge savings for people investing today.

Hi, what is the CCL market? Can you tell me hoe I van change here?

 

[AndrewWoodward]

Hi, what is the CCL market? Can you tell me hoe I van change here?

"contado con liquidacion"

It involves having a US and Argentina brokerage account, and buying, transferring, and selling bonds.

 

[surfing]

Here's a link to the Oppenheimer report from yesterday's Miami Herald. I've always found Oppenheimer to be a pretty even handed fellow, not too far right or left. He does a good job of wading through the politics and economic woes in Latin America.

Here's his take on Argentina at the moment. Not surprising.

http://www.miamiherald.com/2012/06/16/2851968/argentinas-economic-fiesta-is.html

The Spanish version of this article was printed in today's edition of La Nacion and has been at or near the top of the most-read list since early morning.

 

[tomdesigns]

We are on the other side of Para Todo. Do you remember the wild Para Todo? Living where I have lived for almost the last year.. Para Todo was a spectical. Shameful and even border lining discusting.

At the climax came blowout parties.. With live music and free food for the most poor of the poor. I saw it with my own eyes. Wild rumors were circulating here of what the poor were going to receive for free. LCDs para todo, piscado para todo etc etc.

Started about 6 months before the election.. the trucks roll in on the edge of the slum and the poor line up to receive free or buy at reduced prices.

First off, these are under handed election tactics that nobody can compete with and it is the manipulation of people that cannot understand they are being manipulated. They are poor and lacking education and understanding. They have no idea that in reality they are not getting something free they are being further entrenched into poverty.

At first as I witnessed this I had some idea of what was going on and now that we are on other side I see it so clearly.

Before the last election many tricks were used to keep the inflation issues at bay.. on the other side well you know.

Now we are seeing the Para Todo change into the reality of what these sort of games will result in. Recession Para Todo, unemployment Para Todo and I hope I am wrong but.. Next year Para Todo may just be something very depressing.

Having lived among the poor I will tell that they need to be maintained while the energy of the nation should be going into empowering the young men and women with educations and enabling them to develop the businesses that will create the jobs, future and economy that could turn this nation into the global player it could be. And has the resources to be.

I can see so clearly why it is so dangerous to let poverty thrive around you.. Because it can become a means to an end for those in power and in the end the lack of poverty will bring lack to every social class in a society.

I think the storm might be a hurricane.. we shall see.

 

[Crema Americana]

I agree with a lot of what you said, Tom.

There is a "fridge" of Carne Para Todos right down the street where I live... with a huge banner of Cristina's plastic face giving a thumbs up along with the captions "Carne para Todos... Precios Populares!" Although I've never stopped there, the sanitary conditions aren't the best... the front of the warehouse is filthy... there were boxes of meat stacked outside. It is frustrating that they literally toss bones (and fat) to people and have them wrapped around their finger.


By the way have your clothes dried yet? I was going to say in the other thread that clothes will start to rot/mildew and stink if they're wet too long. You want to wash when it's a sunny breezy day. Difficult to do in the winter, but you have to choose your washing days carefully. Not sure if you have access to some sort of heat, if you do, then hang your clothes near the heat source even for a little while. Use baking soda or vinegar in the wash to get the stink out.

 

[tomdesigns]

By the way have your clothes dried yet? quote]

Yes finally dizam.. cold humid weather. More the humidity. This was the first time that happened. ROFLOL I had no idea that it could ever take clothes 4 days to dry.

Edit have to try the baking soda and viniger thing how much or what is the mixture?

 

[arlean]

Question for you smart people (incidentally this has been a GREAT discussion!!!!!) I have a friend who is a retired lawyer whose brother owns a bank in another city in Argentina. Her brother told her a crisis is ahead and that it isn't going to be the bankers that will be getting the real estate, it will be the building administrators. She said that when people can't pay expenses during a crisis the building administrators end up with the real estate. That hardly seems possible but after all--this IS Argentina. Does anyone know if that is true?

 

[jimdepalermo]

it isn't going to be the bankers that will be getting the real estate, it will be the building administrators. She said that when people can't pay expenses during a crisis the building administrators end up with the real estate. That hardly seems possible but after all--this IS Argentina. Does anyone know if that is true?

I don't find this believable. New laws were passed about 2 years ago that require administrators in CABA to obtain a bond to cover their use of a consorcio's funds, which protects owners from unscrupulous administrators who occasionally absconded with the working capital.

As I understand it, the administrator can still mingle funds between consorcios to a limited degree, so if one client building is short on funds for a month or two's operations, the administrator can use excess funds from another consorcio, with the debt being to and from the administrator rather than between the consorcios, with the backup being the administrator's bond. So if there are problems, I would expect them to be the reverse of what you say, with the administrator/bond issuer owing the consorcio.

 

[ElQueso]

Every friend I have who owns an apartment bitches about the fact that a relatively large percentage of the owners in their buildings don't pay the expenses. Also, when I was living out in Pilar in a closed neighborhood, about one fourth of the owners had expense bills over $30K pesos. Expenses are included in my rent where I am now, so I don't see the report in my building.

Could be the new laws mentioned will somehow help that situation. It wouldn't surprise me to know that it's almost impossible to get a renter out of an apartment when someone is squatting in it, even with a contract and simply no rent paid (I know two Argentinos who have done that and have smiled with pride at their ability to play the system), and yet the owner not paying expenses makes it relatively easy for the building's administration to get the owner's property outright.

 

[BednBreakfast]

If you own the property you live in, protect yourself by having an escribana write a "bien de familia" into your title deed. Then your property can't be seized even if you go bankrupt and have big debts. On the other side, you can't be a guarantor or use the property as collateral.