Thanks for the kind words, JeffR. I love to hear myself talk (or write), so I will respectfully oblige.
Given the huge discrepancy between the bank rate and the blue, Argentina now has a controlled currency in all but name. For a while, the cueva business was dead; now it is booming again. Such confusion and friction creates all sorts of anomalies and opportunities, like the WU rate.
At some point, Argentina may consider selling its interest in YPF. This happened many years ago - and was reversed in one of Cristina's many illegal actions. Now would not be an ideal time, as hydrocarbon prices are low and there is a lot of social momentum against energy production. But assuming YPF has a strong enough balance sheet, it could float for several billion dollars on the public market.
The domestic measures - such as the CEPO, the 30% tax on foreign purchases, increase in property taxes - these are notable, but not significant. The real money is in the debt restructuring. Over $50B is involved in debt negotiations (not counting $50B more with the IMF), which will start in 2020. Argentina has the upper hand in these negotiations for a lot of reasons, one of which is that the nuclear option is no longer available. While Cristina is a common thief, her willingness to use the nuclear option (i.e. default) provides a bargaining advantage. My guess is that Alberto does not want all the negative consequences of a default,, so he will play nicer than Cristina did a few years back. Argentina also has lots of advantages vis a vis the bond indentures. The previous bonds did not have collective action clauses, which meant that even an investor owning one $1000 bond could hold out. Argentina did not make the same mistake twice - the current bonds have low CAC thresholds, along the lines of 67% or 75%. This means that once Argentina can get some majority number of bondholders on board, the holdouts will legally be forced into the same deal.
Many hedge funds bought Argentine debt on the way down and are owners at 40 and 45 cents on the dollar. When Argentina finally offers 50 cents on the dollar plus interest, many hedge funds will say, "good enough." And papers will be signed. A return of 20% or 25% in two years is an excellent result for distressed bond investors, and with the CACs in place, each individual is only as strong as their coalition.
Don't get me wrong: debt negotiations will be a knock down, drag out. Cuz Argentina is going to start with 35. But due to the above factors and a few others, a consensual deal should be reachable without much delay.
My understanding of the Vaca Muerta, from reading trade journals, is that much production is on hold. When Macri froze upstream prices, many drillers finished the well they were working on and sent the crews home. Argentina's constant wage inflation, low prices for all hydrocarbons, the significant cost of fracking and the price freeze, make for a sensitive profit/loss equation. Huge explorers like Shell and Chevron, both of which are in Argentina, can afford to drill when times are tough. Smaller drillers that are undiversified and with smaller balance sheets, they have to save their resources for better weather. So they'll wait it out.
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