The Case For President Sergio Massa

[ArgentinaVet]

Do you realize that they stole virtually all of the IMF money borrowed? A lot, if not all of the IMF money left Argentina not long after it arrived, and we are still on the hook for the money. Please explain how that was beneficial to the people of Argentina.

Your statement is is not at all an accurate representation of the reason for the IMF loan or where the money went.

The reality is that the Macri administration took the IMF loan to avoid defaulting on USD denominated debt owned to private creditors and to maintain a reasonable chance of winning re-election to a second term as president of Argentina. The interest rate on the IMF loan was less than half the interest rate on the bonds owned to private creditors. So, in theory, taking out a lower interest loan to pay off a higher interest loan is a reasonable decision.

Unfortunately the reality is that Argentina's USD denominated debt profile owed to private creditors was absolutely unsustainable and that a default was inevitable. The thing about owing money to private creditors is you can default on them and negotiate a haircut via collective action clauses that all post 2001 bond contracts contain; the probem with IMF debt is you CANNOT default on them and then negotiate a haircut on the principal owned- the IMF will always get paid back at 100 cents on the dollar. So the consequences of Macri's decision to invite the IMF in is about $30 billion USD of additional debt (assuming $44 billion USD IMF debt that was substituted for same amount of private creditor USD debt that would have been subject to a 65-70% haircut).

So it is fair to say that Macri's poor decision making cost the country about $30 billion USD, plus the annual interest on that debt (about $2.5 billion USD annually).

 

[jlynch]

Meanwhile we have this hiperinflación caused by the artificial debt created by Macri and the artificial lack of usd created by Macri.But for you this is not corruption. Right!

ah pero macri - all his fault



wouldn't like to see the debt totals for 2023 with the outstanding debts on imports and LELIQs


The "festival de importaciones desde hace tiempo" that Cristina pointed out since 2010, due to the cepo, also Macris fault



imports not paid 50 billion (which is > that debt to IMF)

La deuda del BCRA con los importadores alcanzó los USD 50.000 millones y supera al crédito con el FMI

El crecimiento del pasivo comercial del BCRA se aceleró en los últimos dos meses en los que, en plena campaña, se endurecieron las restricciones al ingreso de compras del exterior por la falta de dólares

www.infobae.com

 

[jlynch]

Shocking fiscal policy with huge fiscal deficits and huge imbalance of payments (imports-exports) leaving no reserves.
Miguel Ángel Pesce has the distinction of being rated the worst in a global ranking of central bankers
but its easier to blame Macri and his IMF loan

 

[antipodean]

Soooo, on the subject of the IMF, what’s Massa’s involvement with it? Why does he keep accepting money from the IMF while paying back the “corrupt” loan of the previous government? Didn’t he beg for another $5.4bn back in April and another $7.5bn in August as part of an overall $44bn loan arrangement drawn out of 30 months in exchange for building capital reserves and reducing the deficit? Where is that money going? If it’s so bad and easy to live without for any Argentine government then why doesn’t Massa request less (or no) funds from the IMF?

Is it as simple as if your name is Macri it’s corrupt, if it’s Massa it’s all good?

 

[jlynch]

Soooo, on the subject of the IMF, what’s Massa’s involvement with it? Why does he keep accepting money from the IMF while paying back the “corrupt” loan of the previous government? Didn’t he beg for another $5.4bn back in April and another $7.5bn in August as part of an overall $44bn loan arrangement drawn out of 30 months in exchange for building capital reserves and reducing the deficit? Where is that money going? If it’s so bad and easy to live without for any Argentine government then why doesn’t Massa request less (or no) funds from the IMF?

Is it as simple as if your name is Macri it’s corrupt, if it’s Massa it’s all good?

Macri and Massa both burning through IMF funds to prop up the value of the peso. capital flight happens regardless of cepo through argentine sovereign bonds purchases/sales. One is corruption and the other is not.

 

[FrankPintor]

Macri and Massa both burning through IMF funds to prop up the value of the peso. capital flight happens regardless of cepo through argentine sovereign bonds purchases/sales. One is corruption and the other is not.

Macri swapped private funds, which could have been subjected to a haircut or renegotiated, for IMF funds for which the IMF always gets 100% of its money back, no haircuts. There is no equivalence with Massa’s actions, Macri had options, Massa has none: if he defaults on the IMF, Argentina is cut off from all external capital markets, nobody will advance credit, hugely complicating any import / export business and imposing more costs on Argentina.

One was incredibly, implausibly, stupid and so almost certainly corrupt, leaving Argentina with huge loans at worse conditions than it already had, the other is only desperate and cannot for now escape the IMF.

 

[wrangler]

Your statement is is not at all an accurate representation of the reason for the IMF loan or where the money went.

The reality is that the Macri administration took the IMF loan to avoid defaulting on USD denominated debt owned to private creditors and to maintain a reasonable chance of winning re-election to a second term as president of Argentina. The interest rate on the IMF loan was less than half the interest rate on the bonds owned to private creditors. So, in theory, taking out a lower interest loan to pay off a higher interest loan is a reasonable decision.

Unfortunately the reality is that Argentina's USD denominated debt profile owed to private creditors was absolutely unsustainable and that a default was inevitable. The thing about owing money to private creditors is you can default on them and negotiate a haircut via collective action clauses that all post 2001 bond contracts contain; the probem with IMF debt is you CANNOT default on them and then negotiate a haircut on the principal owned- the IMF will always get paid back at 100 cents on the dollar. So the consequences of Macri's decision to invite the IMF in is about $30 billion USD of additional debt (assuming $44 billion USD IMF debt that was substituted for same amount of private creditor USD debt that would have been subject to a 65-70% haircut).

So it is fair to say that Macri's poor decision making cost the country about $30 billion USD, plus the annual interest on that debt (about $2.5 billion USD annually).

Nah, You're discounting the Capital Flight that mentioned above. You sound like a car saleman, just switching up the numbers to make the Macri administration look better. What about the estimated 80 billion that left the country during Macri? What about the money that left to pay foreign banks, on their investments on Lebacs and Leliqs? How did this Benefit The Argentine people?

It's probably likely that if the IMF loan would not have been taken out, The Lebacs, and Leliqs would have never materilized, neither would have the investments in them from foreign banks, particularly American Banks. You can tell me that the IMF money wasn't the actual money that left the country, however, because of the IMF loan, Macri was able to allocate other funds to pay The foreing Lebac and Lelic investors. We should not be on the hook for that money now. Or at least a good chunk of it.

 

[antipodean]

Macri and Massa both burning through IMF funds to prop up the value of the peso. capital flight happens regardless of cepo through argentine sovereign bonds purchases/sales. One is corruption and the other is not.

I see. And for those expats who see capital flight under Macri as the issue, why don’t they do their individual part for society and bring all of their overseas assets and earnings to the place they choose to call home, putting their trust in its systems, laws and law makers? Or it’s one moral for them and another for born and bred Argentines?

 

[jlynch]

Nah, You're discounting the Capital Flight that mentioned above. You sound like a car saleman, just switching up the numbers to make the Macri administration look better. What about the estimated 80 billion that left the country during Macri? What about the money that left to pay foreign banks, on their investments on Lebacs and Leliqs? How did this Benefit The Argentine people?

It's probably likely that if the IMF loan would not have been taken out, The Lebacs, and Leliqs would have never materilized, neither would have the investments in them from foreign banks, particularly American Banks. You can tell me that the IMF money wasn't the actual money that left the country, however, because of the IMF loan, Macri was able to allocate other funds to pay The foreing Lebac and Lelic investors. We should not be on the hook for that money now. Or at least a good chunk of it.

But what was the net effect to the reserves (of their investments and their subsequent withdrawals)? This should show up in the evolution of the reserves, before and after Macris time in power and also in the national debt (the national debt increased by the net amount of new debt which can be seen in the post here ) . The reserves graphic only runs until December 2021


source: https://www.infobae.com/economia/20...mular-mas-inflacion-que-el-de-mauricio-macri/

the sad reality is that citizens don't look at the data and just accept at face value what is said. everyone can tell you how much the IMF loan was, but they cant tell you how much is the current national debt, and how much more debt poor fiscal policy is adding to this each and every year. (The cost of the nationalization of YPF to the national debt?) Only in 2003-2007 in N. kirchners reign did they run a fical surplus and reduce the national debt.

How is this poor fiscal policy benefiting the Argentine people?

 

[Redpossum]

Nah, You're discounting the Capital Flight that mentioned above. You sound like a car saleman, just switching up the numbers to make the Macri administration look better. What about the estimated 80 billion that left the country during Macri? What about the money that left to pay foreign banks, on their investments on Lebacs and Leliqs? How did this Benefit The Argentine people?

It's probably likely that if the IMF loan would not have been taken out, The Lebacs, and Leliqs would have never materilized, neither would have the investments in them from foreign banks, particularly American Banks. You can tell me that the IMF money wasn't the actual money that left the country, however, because of the IMF loan, Macri was able to allocate other funds to pay The foreing Lebac and Lelic investors. We should not be on the hook for that money now. Or at least a good chunk of it.

"Figures don't lie, but liars figure"

Three statisticians went on safari in Africa. The first one shot at an elephant, and missed by a foot to the right. The second one shot at the elephant, and missed by a foot to the left. The third one threw up his arms and exulted, "Yeah! We got him!".

No one of any education would deny that statistics are very useful tools, and vital to management of almost anything. But they can also be manipulated outrageously, and they have their blind spots, as the elephant story above is intended to illustrate. And I'm not calling any of the users here liars; I'm just saying that the charts and graphs they show may have been created by persons with an intention to deceive.