How Is Xoom Legal?

[SamBA]

I'm heading down to BA on Monday, and it recently dawned upon me that if Xoom were to be shut down in the next five months while I'm down there, I would be shit out of luck, as I'm only planning on bringing a few hundred dollars with me as an emergency cash reserve, and getting the rest of my money incrementally through Xoom.

So for that reason, I'm wondering whether anyone who knows a bit about the intricacies of the Argentine financial system might be able to explain to me exactly how Xoom works, what makes it legal, and whether they think its a safe bet that it will continue operating normally without any government interference in the near future?

 

[Jed]

My best guess (I am no legal nor finance expert) is that because they are based out of Uruguay. A company in Uruguay can exchange USD, Euros, Pesos, AUS at any rate they want. Who is to tell them that they cannot take a massive loss or massive gain based on international exchange rates? They are exploiting the unofficial rate and technically taking a "massive loss" based on the official rate by paying way more pesos per USD, but making a healthy profit because the unofficial exists + their fees.

 

[thorsten]

and whether they think its a safe bet that it will continue operating normally without any government interference in the near future?

I would not bet on that in Argentina - not for any company, but especially in the money business. I wouldn't be extremely surprised if the government comes after cuaves/companies like xoom in the near future - they are not "patriotic"...

I'd just think about an emergency plan (e.g. going to Uruguay to get dollars and bring them back to BsAs), just in case something happens.

 

[TomAtAlki]

I'm heading down to BA on Monday, and it recently dawned upon me that if Xoom were to be shut down in the next five months while I'm down there, I would be shit out of luck, as I'm only planning on bringing a few hundred dollars with me as an emergency cash reserve, and getting the rest of my money incrementally through Xoom.

So for that reason, I'm wondering whether anyone who knows a bit about the intricacies of the Argentine financial system might be able to explain to me exactly how Xoom works, what makes it legal, and whether they think its a safe bet that it will continue operating normally without any government interference in the near future?

Personally I would not leave myself so short of cash. You never know when there's a holiday or the zoom place is out of cash (happened to us in MDP), etc, etc. You REALLY can't count on normal banking procedures in Argentina. Bring money.
Nancy

 

[ARbound]

Dollars are coming in, that's how it's legal. Other way around, not so much.

 

[Jaredberryman]

My understanding is that they buy Argentine bonds and then turn around and sell them at the official rate in NY, or some maneuver like that.

 

[khairyexpat]

Through TRADING. Trading is a legal activity all over the world since the begging of time (even in Argentina). It's one of the oldest professions.

[background=transparent]Say a multinational is listed on both Argentina and US Stock Markets, .. case example YPF. And say you're a big wig and can convince 2 brokers it's worth their valuable times to work with you, one in NY and the other in BA.[/background]
[background=transparent]Your NY broker would sell your shares in NY (for 12 peso for each 1US$ worth of shares).[/background]
[background=transparent]Your BA broker would buy the same worth of shares in BA (8 peso for each 1US$ worth of shares).[/background]
[background=transparent]Therefore same 1US$ has 2 values (12 & 8 peso depending where you're trading)[/background]

[background=transparent]This scenario would transfer FROM NY TO BA @ the favorable rate. The reverse scenario would be for transferring FROM BA TO NY.[/background]

[background=transparent]You could incorporate yourself and have your own XOOM.[/background]

[background=transparent]Your next real question should be where this 8 and 12 peso come from?[/background]
[background=transparent]Stock Markets and big big traders all over the world they work for ONE THING ... bottom line pocket book .. $$$$$$$ SIGNS ... nothing more nothing less .. that is their only purpose in life on earth ... (forget patriotism ... nationalism ... democracy ... dictatorship ... votes ... all nonsense ... ). Traders all over the world are not fools ... To make money they know how to assess the value of a commodity, or the value of any thing. They all know that Argentina is printing 100$ peso bills like there's no tomorrow. Say the pesos in circulation doubled, but commodities stayed the same ... they would conclude that the value of the peso have to be cut in 1/2. That is how the whole world knows that the peso value is 12 to 1. They would lose their shirts off their backs betting their last DOLLAR on it. They are damn sure what they are doing .. they are making money.[/background]

[background=transparent]Compare this to Argentine politicians. Their own purpose in life on earth ... GET ELECTED and STAY IN POWER.[/background]
[background=transparent]They decree by LAW the value of the peso. Like I get off one morning on the wrong side of bed and decide that gold is only worth $500 dollars an ounce ... (even if the whole world knows and trades and bet on $1250 an ounce). I gather the my house hold and make it a LAW we only buy and sell @ $500 an ounce. If I offer a jeweler $500 to buy because it is my law, you know what he's going to do. He might even start to think of creative ways to infiltrate my family to buy and snap everything we've got @ $500.[/background]

[background=transparent]You go to a website like DolarBlue.net, you'll find no less than 15 exchange rates for the peso for Argei's, decreed by 15 different LAWS. The rest of the world only trades in ONE exchange rate (the real value of the peso). Politicians for decades repeatedly squandering and [background=transparent]staggering [/background] for political gains[/background].

Argentine governement have jurisdiction over Argentina. They can ban XOOM in Argentina if they want to. Past history indicates that they will interfer with no hisitation for political gains. Unconscious to economic repercussions or consequences.

 

[internationalguy]

Xoom doesn't operate as such in Argentina. They use More. How they manage to get the funds to More is based on they stock market buy/sell strategy most likely. When I sign for my transfers the receipts say nothing about dollars. I'm collecting pesos. What happens behind the scenesmight become illegal but I doubt it. People in power might be making money with this.

 

[khairyexpat]

Xoom doesn't operate as such in Argentina. They use More. How they manage to get the funds to More is based on they stock market buy/sell strategy most likely. When I sign for my transfers the receipts say nothing about dollars. I'm collecting pesos. What happens behind the scenesmight become illegal but I doubt it. People in power might be making money with this.

I'm absolutely sure the details are sophisticated high level finance schemes privileged for the big wigs and their affiliates.

Not for the layman outsider regular every day simple person.

That's how they do it legally.

 

[GS_Dirtboy]

That's my problem. I'm a little wig!