Significant news about peso exchange rate

[Matt84]

Has anyone been á la cave today yet? The suspense is killing me...

 

[TERKILD]

on my way....gonna test it out....

 

[notebook.fix]

Apparently the currency exchange houses opened with the same rate as last week's.
It looks like the Government is very confused & can't get it's act together even on this one...they are not following through with what they announced last week.

Maybe some of the K-family & friends still need more time to finish buying & hording more US Dollars before they let the general public get what's left.

Buenos Aires Herald: Official dollar trades steady at AR$4.49
http://www.buenosairesherald.com/article/102642/official-dollar-trades-steady-at-ar$449

La Nacion
http://www.lanacion.com.ar/1479060-...rsiones-cruzadas-sobre-el-precio-del-paralelo

 

[surfing]

on my way....gonna test it out....

Don't get your hopes up that there will be anything different from Friday.

 

[Canick]

Buenos Aires Herald: Official dollar trades steady at AR$4.49
http://www.buenosairesherald.com/article/102642/official-dollar-trades-steady-at-ar$449
[/URL]

when i last looked they didn't publish the Blue Dollar rate at the Herald next to official rate for the first time in a week.

no idea if that means anything, just an observation.

 

[surfing]

when i last looked they didn't publish the Blue Dollar rate at the Herald next to official rate for the first time in a week.

no idea if that means anything, just an observation.

Here's your answer:
http://www.lanacion.com.ar/1479060-...rsiones-cruzadas-sobre-el-precio-del-paralelo

 

[jimdepalermo]

I'm sorry, but vulture funds serve a useful purpose. They buy up the bonds of the poor pensioners and give them something at least. Argentina offered them NOTHING. Once they buy up the debt they go after Argentina in court with their armies of lawyers and well-connected politicians. And they are making progress.

I agree that vulture funds have a somewhat useful purpose in maintaining a market for otherwise defunct securities.

Saying that Argentina offered nothing, however, is not true. In both the 2005 and 2010 offers, the defaulted bonds were swapped at 66% of face value plus back interest. That's actually not a bad outcome for a bond that was originally rated BB. After all, buyers of junk bonds are rolling the dice.

 

[RSPlayer]

My guy (gal) said 5.92 about 10:00 AM and had dropped to 5.84 at noon. Not sure how the government can “control” an “illegal” activity (or at least outside of the Tax Authority). But as all Argentines have told me when I said “I just don’t understand this”, neither do they, nor the Government it seems. This is Argentina, so we may see a mercado celeste (a little close to blanco) in the next few days along with the mercado blue (a little closer to black) that is controlled by the buyers and sellers.

 

[jimdepalermo]

I think it was just Moreno trying to strong-arm dealers into doing what the government wants but can't make happen on their own. No way anyone but the BCRA is selling dollars at these prices.

Btw Xoom is still taking orders at 5.6328, and Ambito shows the dolar informal at 5.93/5.95 with a footnote "Opera con tendencia a la baja pero sin un precio de referencia."

 

[jimdepalermo]

I see...so 2008 happened because of the markets....So, the artificially low interest set by the fed since 2000, the equal housing act passed by Congress, runaway government spending since 9/11, Fannie and Freddy, none of that had anything to do with the 2008 crisis? It was all due to unchecked capitalism?

Yes, the US crisis happened largely because of unregulated markets and unrestrained competition among the banks for profitable shares in growing high-risk lines of business. These businesses were so complicated that few if any bank executives or board members understood them, and the risk managers tasked with their oversight were silenced on the basis that "all the other banks" were taking the risks and making huge profits.

Yes, the interest rate after 2000 was too low to allow any leverage during the meltdown. With the US economy very weak after 9-11, this was the right thing to do at the time.

I'm not sure what you mean by the "Equal Housing Act." I'm not aware of any legislation that enabled or encouraged predatory lending practices. The problem mortgages came about in the private marketplace with only profit incentives, with neither government backing nor encouragement.

There was huge demand for complex mortgage-backed securities, mostly from the banks themselves and especially from European banks. The demand was such that it could not be satisfied by "normal" mortgage activity. So the mortgage underwriters, with nothing to lose themselves since they were selling off all risk in these securities, went bottom-fishing. Their fees for writing low-quality loans were actually higher than for more conventional mortgages.

One study by Wallison (American Enterprise Institute) attributed parts of the financial system failure to policy changes at Fannie and Freddie. This study was subsequently debunked when it was found that Wallison had used an incorrect measure of "high-risk" loans in the Fannie and Freddie portfolios. In fact, neither agency's portfolio ever included more than 5% of assets in such loans.

By 2004 more mortgages were funded through private-label securities than by the quasi-government agencies. Late in the game, Fannie and Freddie began fearing their loss of market dominance and did underwrite some lower-quality loans, but the volume was trivial compared to what was coming through the private markets, and it was these (largely unregulated) private securities and the (totally unregulated) derivatives based on them that led to the crisis.

Yes - it was unchecked capitalism hoist on its own petard.

As much as we might like to blame government intervention for the crisis, it was actually the LACK of government intervention that permitted it. Had Glass-Steagle remained in effect, or had there been reasonable risk and capital requirements for banks, or had there been any regulation of financial derivatives, the crisis would have been avoided.

Absent the separation of risk- and deposit-taking, the effective oversight of bank capital and risk, and any standards or oversight of the $30 trillion business in credit-default swaps (as-of 12-2008), bank greed brought about a global catastrophe.