Everything gone to hell, again!

[Rich One]

Things are getting interesting... Check out this short article guys, quote :

..."the all-too-likely possibility that Macri is soon going to be forced to reintroduce capital controls to break the Argentine currency’s free fall.."

http://thehill.com/opinion/finance/387605-argentina-put-the-financial-cart-before-the-horse

...Thoughts? :-x

Best quote.." . As they say on Wall Street, when the winds are strong, even turkeys fly. "

 

[perry]

Today we went to exchange $500 for Pesos at a Casa de Cambio in Belgrano. Waiting in a long queue with locals waiting to buy dollars, we offered to exchange our crisp new $100 bills straight from our Uruguayan bank for their torn, tattered Pesos at a mid rate beneficial for both parties. The Argentinians all refused our offer, claiming the our Dollars were too “new” for their liking, and exhibited a preference to continue waiting in their queue to buy “old” Dollars at a worse rate. Once it was our turn at the exchange window, the Casa de Cambio refused to exchange our Dollars because my wife's Uruguayan passport and Cedula were apparently not sufficient proof of her legal status in Argentina, only the flimsy, white entry document/ receipt issue at the border, which we did not have with us, would suffice to prove our worthiness to exchange our foreign Dollars for their beloved Pesos . Dejected, we went home and were only able to exchange our rejected Dollars at the local “Chino” who apparently had no problem with either the newness of our Dollars or our documented immigration status.

From our experience, I learned several important lessons in Argentine Financial crisis management:
1. The Argentine in the street prefers to waste time waiting in a queue to overpay for an inferior product, rather than take any initiative to work for a mutual benefit.
2.Despite a grave and urgent need for Dollars by Argentina in the midst of a hard currency financial crisis, mindless bureaucracy still triumphs over common sense and logic.
3. There is no viable path to the “gradual reform” of the Argentine mindset of contagious mass panic, mistrust of his fellow Argentine, over reliance on stifling bureaucracy and an inability to compete in a world market of more entrepreneur minded peoples, if only epitomised by the local “Chino”.

 

[Bajo_cero2]

The corralito has began. Today they refused to sell me over 3000 usd at Santander Rio Bank.

 

[Crema Americana]

I imagine there's a bit of a run on the banks... not a corralito, but they may be having trouble keeping up with demand.

It's a lot different than having dollars in the bank, not being able to take them out, and then being turned to pesos at 3 to 1 instead of 1 to 1. At least you can still buy dollars legally.


Don't think the IMF is going to allow currency controls ala Kirchner. Business has no interest in that at all. They want the peso devalued... They're also going to demand a lot more...

 

[Bajo_cero2]

All this already happened, in the same way, with the same people, so, why do you think that this is not going to finish in the same way?

 

[Bajo_cero2]

 

[Pensador]

If you are willing to take a bomb someone hands you sooner or later it is going to go off. K handed off a bomb and here we are. And give me a break MM had load of crap handed to him from a mental case. I surely would not want his job or the Ks stinky diapers which is exactly what he got.

 

[Crema Americana]

Yea, more than Cambiemos it is Repetimos.

It's not that I think bad things aren't going to happen... I think we're headed for some rocky times. But I wouldn't call what is happening a corralito and the situation isn't the same. People had their dollars effectively stolen in 2001. You could say it's the same thing if you can't get your money out to exchange, and the peso plummets, but simply limiting how many dollars you can buy at a time is probably more about the bank trying to serve as many customers as possible.

There's a lot of panic. I'm hoping the peso is able to hold a reasonable value. It was overvalued but we don't need it to go to the other extreme, either. Macri really needs to get a handle on inflation... so far, he's failed. As long as we have sky high inflation the peso will remain untrustworthy and unwanted. If there's a crash, you'd hope the government would start to do things right... but I feel that the draw to cheat or try to beat the system with lies is too great (lies like 1 to 1, currency controls, printing money, out of control spending to prop up jobs/industry/pesos... basically bad policies with no long term vision.)
Maybe Macri will use the IMF as an excuse to do unpopular things that needs doing, but there is danger there as well in selling out the country or cutting things that will have long term detrimental effects... like education or infrastructure.

 

[nicoenarg]

Apparently pictures mean actions and intentions also haven’t changed. At least we can all then agree that the Kirchners were a part of the dictadura...a mere continuation of the asesinos militares from 1970s and 1980s.

 

[nicoenarg]

The current situation is a direct result of Macri trying to continue the policies of Cristina while trying to steer the economy in the right direction. You can’t do both. It’s like he claimed “mission accomplished” before actually realizing the opposition wasn’t going to just roll over and play dead.

The other problem is these guys don’t know how to communicate anything to the populace. Should have said day 1, “argentina is broke, we have to start over and everyone has to tighten their belt”. Instead they went the other way and told the people that all was rosy right away. Nothing changed in the attitudes of the people and the market is now forcing a correction.

Israel’s example in how they went from hyperinflation to a normal and successful economy should have been followed but sadly the concept of self sacrifice and putting country before your own selfish desires does not exist here. Not with the populace but even less so with public servants and the unions.