Why Is Dollar Blue Trending Down?

I think that the posts in this thread are far too emotional and that the attacks on BajoCero are a little over the top and unwarranted considering his contributions to the site. The guy is an actual licensed lawyer who has certainly developed a successful practice in his particular specialty. That being said, he is not an economist and his theories and arguments (like those of the current Argentine government) are failing and are doomed to absolute failure in the immediate future. As per the topic of this thread, the Blue Dollar is trending down because ANSES is flooding the market with dollar denominated bonds which increases CCL liquidity and availability (essentially the government is plundering the treasury of the social security agency as a short term stop-gap measure to keep the black market USD at levels seen as "reasonable" in an effort to win the elections in October). There is nothing more to this than that. As soon as ANSES ceases to intervene in the CCL market (almost guaranteed after the elections) the black market and CCL USD will rise into the stratosphere again. I predict that CEDIN will have moderate success (as long as the actual USD cash can be obtained during the closing of real estate deals) in giving some life to the real estate/construction industries but that the 3 year 4% USD bond intended to fund YPF and other infrastructure will be a complete failure.
 
As far as the CEDIN is concerned, I can't see it having much success, for several reasons.
  • For the CEDIN to have any chance of being successful, the blanqueo has to be successful, and based on the results of the last blanqueo in 2009, when the economy was in much better shape, most analysts don't expect it to be successful.
  • There's also the threat hanging over the blanqueo that the law will be overturned if the opposition wins the elections, and that the launderers will be exposed and prosecuted. How many people are going to risk that hassle, even if the risk isn't very high? They already have the dollars. There are plenty of other ways to launder them without using the blanqueo. Just ask all the nouveau riche kirchnerista bank tellers, gardeners, body guards and media moguls. And the ones with the most dollars have the most at risk and need the blanqueo the least.
  • You have to trust the government to consider buying CEDINs (unless you're planning to immediately launder your dollars into real estate purchases, which will defeat the purpose, since those CEDINs will be immediately converted back to dollars and go back out of the treasury -- or unless you plan to use the CEDINs to launder your dollars into real estate development, in which case the conversion back to dollars will be delayed a bit), A previous Argentine government already tried this CEDIN bit before -- with disastrous results for many who ended up with worthless paper. Everybody knows it. Nobody's going to buy CEDINs when they can buy dollars, even if they have to pay a bit more for the real thing. [Even bajozero didn't wait for the CEDIN, if you believe him -- I don't. But he claims to have sold all his saved dollars at 10 then bought them back at 8 -- even though it is illegal and expressly forbidden for Argentine citizens to buy dollars for saving.]
 
sleazemerchant said:
I think that the posts in this thread are far too emotional and that the attacks on BajoCero are a little over the top and unwarranted considering his contributions to the site. The guy is an actual licensed lawyer who has certainly developed a successful practice in his particular specialty...
Click to expand...

Completely agree. Bajo is a good lawyer and basically is breaking new ground by studying the constitution and the laws on the books and fighting his way through the legal system to make sure that his clients get their due as the laws were written rather than what the judges decide they want to allow (or not allow).

After having lived through presidential eras where the country was sold out to the benefit of a few, it appears he holds some grudges and prefers the current administration to others that he has lived through. Where as many on this board look at what is and question why more isn't demanded by the public, I would venture that Bajo looks at what we have and thinks "I've seen worse."

Like most on this board, I haven't been following Argentine politics for 30+ years. And although many don't agree with Bajo's takes on things, this thread has gone well over the edge of decency. Personal attacks don't show that a person is right and the other person is wrong. If his comments piss you off too much to stand, just go ahead and change your settings so that his responses are blocked. He's not getting paid to represent the K government. He's obviously not convincing anyone on here to change their views either, so why the hostility? It's not like "Your team" is losing members to "his team". I think that people need to accept that he's not going to change his opinion. That doesn't reflect poorly on anyone's powers of persuasion, it's just the way it is.

So let's keep this discussion focused on what's happening regarding the "dolar blue" and try to refrain from attack fellow posters.
 
LostinBA said:
Of?
Click to expand...

Printing funny "vouchers" to act as currency. Pretend that they're as good as real money for a while until the hypnotic music rethoric stops and then realise we have let the government royally screw us once again.

BTDT, have the emotional and financial scars to prove it.

The Ks are trying to save themselves, not the country or the economy.
 
This is exactly what I predict what will happen. Argentines who are looking to launder their undeclared cash by getting into real estate (which as I stated in my prior post is the only domestic investment Argentines have historically trusted) will make arrangements to repatriate/take cash out of safety deposit boxes the same day they are to close on a property and thus will be able to get USD cash for the CEDIN at the same time and place (the conference room of a bank) that the property transaction takes place. The government will not have the USD in their coffers for long but USD that was outside the system will be used for the purchase thus having no net effect on the BCRA reserves; just the fact that this transaction was facilitated by the CEDIN means the government wins because the real estate market is active.
 
sleazemerchant said:
This is exactly what I predict what will happen. Argentines who are looking to launder their undeclared cash by getting into real estate (which as I stated in my prior post is the only domestic investment Argentines have historically trusted) will make arrangements to repatriate/take cash out of safety deposit boxes the same day they are to close on a property and thus will be able to get USD cash for the CEDIN at the same time and place (the conference room of a bank) that the property transaction takes place. The government will not have the USD in their coffers for long but USD that was outside the system will be used for the purchase thus having no net effect on the BCRA reserves; just the fact that this transaction was facilitated by the CEDIN means the government wins because the real estate market is active.
Click to expand...

That's highly optimistic. I agree that by entering money into the system that would benefit the economy (not the government) but then the government could just make a law saying whoever invests in real estate, there will be no questions asked. Thus save itself the trouble of making and distributing CEDINs as well as save the taxpayers a few millions.

That would be if the government had good intentions but I think a higher scheme is being plotted with the CEDIN. As someone mentioned they can't print US dollars but they can print CEDINs. Even if the CEDIN has any success, I predict it will be traded undervalue.
 
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