Archivo de Autor
By Luciana BertoiaDiscovery reignites the debate over Papel Prensa case following the ruling on Media Law
The discovery of the dictatorship-era archives announced last week by Defence Minister Agustín Rossi reignited a debate over how those documents should be used in the trials against perpetrators who are currently being held in the country and the role state authorities should play in the information disclosure.On Monday, Rossi called a press conference to announce that around 1500 documents concerning repression unleashed by the military regime that ruled Argentina between 1976 and 1983, had been found in a cellar at the Air Force building the previous week and handed over by an officer.In his presentation, Rossi made clear that the discovery included archives referring to Papel Prensa, the largest manufacturer of newsprint in the country. Rossi’s words seemed to attempt to restart a long-running battle between the Kirchnerite administration and Clarín media group, days after the Supreme Court had put an end to the main legal conflict between both parties by declaring the Broadcast Media Law constitutional .“The thing is that they bought Papel Prensa newsprint and that situation was discussed by the Junta members. It’s obvious that it was not a minor topic,” Rossi yesterday stated in reference to Clarín media group, adding that there are 13 dictatorship’s minutes referring to the controversial transfer. The minister also dismissed criticism from those who questioned the announcement.Papel Prensa caseThe corroded relationship between Kirchnerism and the media giant was worsened when the Media Law was passed in 2009, risking Clarín’s profitability, and then when two cases regarding human rights violations were reignited by the Cristina Fernández de Kirchner administration: the strange purchase of Papel Prensa newsprint and the irregular adoption of Marcela and Felipe Noble Herrera, the owner of Clarín’s children, during the dictatorship. War was soon declared.In August, 2010, the president ordered then-Human Rights Secretary Eduardo Duhalde to file a suit to request the Judiciary to investigate how Papel Prensa was sold during the dictatorship. The issue was also left in the hands of the controversial Domestic Trade Secretary Guillermo Moreno, who released the brief “Papel Prensa, the truth.”The original Papel Prensa idea was floated by dictator Juan Carlos Onganía, who ruled the country between 1966 and 1970 and wanted to establish a newsprint manufacturer in order to promote industrialization via import substitution. But Papel Prensa SA was actually founded in 1971, during Alejandro Lanusse’s dictatorship.Later, during Juan Perón’s third presidency (1973-1974), businessman David Graiver, allegedly linked to the left-wing Peronist organization Montoneros, purchased the private shares of the newsprint. Graiver died in a strange plane accident in México in August, 1976. His heirs were his wife, Lidia Papaleo, and his daughter Sol. Papaleo and other members of the so-called Graiver group were reportedly kidnapped by the dictatorship squads, tortured and forced to sell Papel Prensa newsprint to Fábrica Argentina de Papel para Diarios (FAPEL SA) on November 2, 1976, which later sold its shares to the dailies La Nación, Clarín and La Razón.The Kirchnerite administration recalled the reports made by the irregular transfer of Papel Prensa in 1985 and in 1988, when Prosecutor Ricardo Molinas said that the Graiver Group was not able to select its buyer and that a “throw-away price” was paid for the transfer.The case filed in 2010 was aimed at showing the connection between the kidnappings and the transfer but the investigation currently led by Judge Julián Ercolini has not made as much progress as the government might have expected.“We have filed several requests before Judge Ercolini to ask him to move forward in the case,” Agustín Di Toffino, the Secretary-General of the Federal Council from the Human Rights Secretariat, told the Herald, adding that the discovery raised expectations among the officials working at the Secretariat headed by Martín Fresneda.“The archives found could be important evidence in the Papel Prensa case. We are going to provide that information to the judge,” he added. Though he praised the information that the documents contained, he said that experts from the Defence Ministry were analyzing them and denied having seen the material.Di Toffino, a former member of the organization HIJOS (that groups children of disappeared parents), said that the evidence regarding the Papel Prensa case could be disclosed in the following weeks, though the ministry headed by Rossi said that the total analysis of the document might take around six months.Announcement reignites debateThe discovery made public by Rossi raised doubts among some members of the human rights movement while others celebrated the news.“It’s great that the Armed Forces were the ones to hand over the evidence, Lidia “Taty” Almeida, the iconic figure of Mothers of Plaza de Mayo, celebrated on Friday evening at a meeting held at the ESMA memorial.“The finding made it clear that we were right when we demanded the state authorities to open the archives,” survivor Nilda Eloy and also one of the workers from the Buenos Aires province Memory Archive told the Herald.“They can have access to this material and I found it quite surprising that they have not entered the room where the documents were found for the last ten years,” the member of the Association for Former Detained- Disappeared (AEDD) added.Sociologist Daniel Feierstein said that it would be necessary to wait until after all the archives are released and made available to make a complete analysis.“But I think it’s good news and it shows that there could be more information locked somewhere, so the point would be investing more resources in order to locate it,” the head of the International Association of Genocide Scholars explained to the Herald.As anthropologist Ludmila da Silva Catela points out in one of her papers, the memory archives available in the country are mainly from the security forces. The one being currently analyzed was found in the Air Force’s main headquarters, which also adds to its intrigue.Every time those secret archives were discovered, an institution to protect them was established but this seems not to be the case now.Rossi has announced that the Air Force will be in charge of protecting the documents as a sign of change in one of the armed forces that unleashed repression in the country, focusing mainly in the Western part of Buenos Aires province.“I think there are many places and many experts who can analyze and protect those documents in a better way,” Nilda Eloy highlighted, adding: “The Air Force was in charge of producing those documents about the repression, so they shouldn’t be allowed to hold on to them.”There are also other debates taking place on whether the information should be distributed among those newspapers aligned with the government before it is publicly released. Should repression archives be used discretionarily by the government?All in all, secret archives ring “fetish.” Secret, prohibited, when they are discovered, they are thought to be a talisman that can prove what survivors, relatives and experts have been reporting for decades.@LucianaBertoia
1. DOCTORS SAY ARGENTINE PRESIDENT NEEDS TO REST ANOTHER WEEK BEFORE RESUMING HER DUTIES (The Washington Post)9. ARGENTINA ECONOMY: QUICK VIEW – TELECOM ITALIA TO SELL ITS STAKE IN TELECOM (Economist Intelligence Unit – ViewsWire)1. DOCTORS SAY ARGENTINE PRESIDENT NEEDS TO REST ANOTHER WEEK BEFORE RESUMING HER DUTIES (The Washington Post)November 11, 2013BUENOS AIRES, Argentina — Argentine President Cristina Fernandez needs one more week’s rest before she can go back to work after head surgery, doctors announced Monday, recommending that she not resume formal activities before Nov. 18.That would add up to a six-week absence for the normally loquacious leader, who has vastly increased executive power during her eight years in the presidency, and many Argentines have wondered out loud who has been making decisions in her stead.The 60-year-old leader has been in total seclusion, following doctors’ orders to avoid all stress, since neurosurgeons opened her skull on Oct. 8 to remove blood from burst vessels that had been pressuring her brain.The doctors’ report on Monday was positive, saying she has no major heart trouble other than an occasional blockage on her left side that requires continued monitoring.Presidential spokesman Alfredo Scoccimarro said that the return date was set by her surgeons at Favaloro hospital but that all future reports on her health will come instead from the presidential medical unit.Argentines are ill-accustomed to silence from Fernandez, and even her small circle of close advisers has had reduced access to her, sending conflicting messages about how involved she has been with the country’s day-to-day affairs.For a leader who is usually on television nearly every day and capable of sending dozens of Twitter messages at a time, the situation has prompted no end of conspiracy theories about her intentions.Vice President Amado Boudou, still nominally in charge, has tried to tamp down the speculation.“Not one day has she left aside her administration,” he insisted at a rally Monday. “We’re very happy that she’s returning. Be strong, Cristina!”By Ken ParksNovember 11, 2013Argentine President Will Return Nov. 18 After Recovering From Head Surgery Last MonthArgentine President Cristina Kirchner faces high inflation, depleting foreign-currency reserves and a political succession struggle when she resumes her duties on Nov. 18 after recovering from head surgery last month.Mrs. Kirchner passed medical tests and will retake the reins of government from her vice president on Monday, said her spokesman, Alfredo Scoccimarro, in a televised address.Mrs. Kirchner, 60 years old, is recovering from an Oct. 8 operation to drain a blood clot near her brain that was caused by a head injury. The president’s medical team ordered Mrs. Kirchner to avoid flying for 30 days and to return for additional tests next month.Argentina’s economy is hobbled by inflation and foreign currency shortages.Inflation has been running at or above 20% for almost four years, according to many economists. Private-sector forecasts currently put annual inflation at about 25%, compared with the 10.5% reported by the government.High inflation led to a run on Argentina’s foreign currency reserves two years ago as Argentines and foreigners tried to pull money out of the country. The Kirchner administration has so far managed to avoid devaluating the Argentine peso by strictly rationing the hard currency it makes available to people and businesses.The upshot is a small, but vibrant currency black market where the U.S. dollar fetches a 64% premium to the greenbacks the government sells to the public through the regulated foreign-exchange market. The gap between those exchange rates has aggravated inflation as some businesses reprice goods based on the black-market rate.Currency controls haven’t stopped reserves from approaching a seven-year low of about $33 billion as debt payments, persistent capital flight and fuel imports outweigh dollar inflows from exports.“The most urgent matter that needs to be addressed are reserves,” said Fausto Spotorno, an economist at consulting firm Orlando J. Ferreres & Asociados. “The loss of reserves has accelerated and now we are losing almost $1 billion a month even with controls.”The government could stanch dollar outflows by further limiting imports or making it more difficult for Argentines to shop and travel abroad if its willing to pay the economic price.“The impact on the economy from more restrictions will probably be negative,” Mr. Spotorno said.Mrs. Kirchner will also have her hands full shaping the succession struggle within the ruling Peronist movement during her last two years in office.Her Peronist faction, the Victory Front, retained its majorities in both houses of Congress in midterm elections Oct. 27, but fell well short of the support needed to reform the constitution so she could run again in 2015.Peronist moderates like Mayor Sergio Massa and Daniel Scioli, the popular governor of Buenos Aires province, have already signaled plans to run for president—offering voters an alternative to Mrs. Kirchner’s confrontational brand of left-wing Peronism. Investors have bid up Argentine stocks and bonds in hopes that Mrs. Kirchner will be succeeded by a more business-friendly leader.Peronists are notorious for abandoning leaders who are perceived to be on their way out of power, and Mrs. Kirchner will have to guard against defections from the Victory Front to other Peronist factions seen as best positioned to win the presidency.Juggling a deteriorating economy and a political succession would be a tough job for any leader, much less one with a long history of health problems. In recent years, low blood pressure forced Mrs. Kirchner to suspend her activities for several days and cancel international trips. In January 2012, surgeons removed a noncancerous growth on her thyroid glandBy David Luhnow and Taos Turner11 November 2013David Martinez’s Group to Buy Telecom Firm for $960 Million; Investor Sees Potential Despite Government PoliciesBUENOS AIRES — As head of a hedge fund that specializes in distressed debt, David Martinez has had lots of practice trying to figure out when an asset’s value has been beaten down so much that it is a buy. He has just made an unusual call: Invest in Argentina.Mr. Martinez’s investment group, Fintech Advisory, plans to buy Telecom Argentina and related assets for $960 million from Telecom Italia, which is selling its Argentine unit to pay down debt. Mr. Martinez confirmed the purchase Friday.Argentina has been a cautionary tale for many investors since its 2001 default on $100 billion in sovereign debt. Since then, a husband-and-wife team of populist politicians, the late Nestor Kirchner and his wife, President Cristina Kirchner, has used higher commodity prices and public spending to get the economy back on its feet. But it has come at the cost of high inflation, price controls and growing fiscal problems.The Kirchners have also repeatedly gone mano a mano with big business, including a long battle with the country’s top soy farmers as well as having nationalized oil company YPF SA, previously owned by Spain’s Repsol SA. Mrs. Kirchner’s government is now moving to force media giant Clarin SA to break up its business.“Argentina presents incredible long-term growth opportunities, in my view the highest in Latin America,” said Mr. Martinez in an interview. “There is tremendous value in the company. Clearly Argentine values are depressed, but the long-term potential is overwhelming.”Mr. Martinez was born in Mexico and dropped out of a seminary to become a financier. He made a fortune investing in distressed debt from Mexico to India and Pakistan. While he may hunt for bargains in the investment world, Mr. Martinez is known as a free spender in his personal life. He set a record in 2003 for having spent about $42 million for an apartment in Manhattan atop the Time Warner Center. He now spends most of his time in London.Mr. Martinez is part of a small group of investors who are willing to overlook Argentina’s status as a financial pariah and bet long term. Mrs. Kirchner’s term ends in 2015, and many investors expect the next government to be more pragmatic and less hostile to business. Chevron Corp. recently agreed to fund most of a $1.5 billion joint venture with YPF to develop Argentina’s vast shale oil and gas deposits.Still, while Argentina may look appealing down the road, risks abound, said Jorge Mariscal, chief investment officer of emerging markets at UBS Wealth Management.“You can see light at the end of the tunnel,” Mr. Mariscal said, “but you don’t know if it’s the train coming towards you.”Among other things, Mr. Mariscal said Argentina’s currency is overvalued. If the government suddenly let it trade freely, it could cut the value of dollar-denominated Argentine assets in half overnight, he said.Argentina still hasn’t paid Repsol for expropriating its 51% stake in YPF last year, and the Spanish company is suing the government for $10.5 billion in compensation. Before taking over YPF, the government had expropriated Argentina’s flagship airline from another Spanish company.In April, Brazil’s mining giant, Vale SA, decided to leave Argentina and halt work on a nearly $6 billion potash-mining project after investing $2.2 billion in the project. Like other companies, Vale struggled with rampant inflation, rising costs, a ban on sending dividends abroad and a heavily regulated foreign-exchange market.There are also risks in the telecommunications market, as the story of Clarin shows. Mr. Martinez has seen from up close how Argentina’s government can favor a company one day and undo it the next. He has a 40% stake in Clarin’s cable-TV unit.In 2005, Mr. Kirchner extended Clarin’s broadcast licenses for a decade and later let Clarin buy a rival cable TV company. After relations soured, however, the government stripped Clarin of lucrative soccer-broadcasting rights, seized control of a newsprint maker in which Clarin is a shareholder and passed a media law aimed at breaking up the company.If Telecom Italia and the Argentine government give Mr. Martinez approval for Telecom Argentina, he said he hoped he could keep his minority stake in the cable firm but would comply with any decision from the government, including giving up voting rights or selling his stake. He said it had been a profitable investment.Argentine officials say Mr. Martinez laid the groundwork for Clarin to comply with the media law by first presenting a plan that voluntarily called for the company’s breakup. And as the owner of $1 billion in Argentine bonds, he is trying to help Argentina deal with creditors suing it over the 2001 default.There are challenges, too, in the telecommunications business. Mrs. Kirchner’s government called Telecom Argentina a monopoly a few years ago and threatened to nationalize it. Argentina hasn’t let telecom companies buy spectrum to improve mobile services, and the country has fallen behind its peers in offering options such as 4G data communications.“There are obviously some policy limitations that exist in the short term, but that is the short term,” he said. “Overcoming that and many other difficulties involves talking to the government and negotiating. These environments are difficult and challenging but that doesn’t mean those bottlenecks can’t be overcome. I’m quite confident they will.”Mr. Martinez could also find it challenging to compete against the local units of Mexico’s America Movil SAB and Spain’s Telefonica SA, whose size offers advantages, said Enrique Carrier, a telecom analyst. But Mr. Martinez plans to retain technical assistance from Telecom Italia, which could give him added leverage in the market.By Benedict Mander in Buenos AiresNovember 10, 2013President Cristina Fernández’s doctors confirmed on Saturday that she was recovering well from brain surgery a month ago. But as she prepares to return to office, her priorities and ambitions have radically altered during her enforced break.On the one hand, she suffered a big setback while in hospital from the results of Argentina’s midterm elections at the end of October. Ms Fernández failed to win the necessary congressional majority to amend the constitution and allow her to stand for a third term in 2015, and the succession battle is already under way.On the other, just two days after the disappointing polls, the president scored a welcome victory with a Supreme Court ruling that upheld a controversial 2009 media law she herself had championed.The ruling – that the law was constitutional – could end a bitter four-year legal battle with Argentina’s most powerful media conglomerate, Grupo Clarín, which owns the country’s most-watched broadcast network, and has been ordered to sell off dozens of operating licences.“They have chosen Clarín as an enemy to defeat and destroy,” said Ricardo Kirschbaum, editor-in-chief of the group’s Clarín newspaper, Argentina’s widest circulating daily.Now that re-election is out of the question, analysts say Ms Fernández will attempt to divert attention to other battles – especially with Grupo Clarín, one of her most bitter adversaries.The new law attempts to “democratise” the media and prevent monopolies by stopping companies from having more than a 35 per cent market share in broadcast television, cable television or radio, as well as capping the number of licences that companies can own.This means Clarín, a fierce government opponent, must now sell off some of its most lucrative assets to comply with the law, sending its share price tumbling by more than 40 per cent after the ruling. Its cable television operator Cablevision will now have to reduce its 158 licenses to a maximum of 24.One close ally of the government, Luis D’Elía, gleefully spoke last week of chopping up Clarín “with a butcher’s knife”.Although the new law replaces an obsolete code that dates back to Argentina’s 1976-83 dictatorship and has widespread support among civil society and free-speech advocates, many are concerned that it will be implemented arbitrarily.Claudio Paolillo, president of the Press Freedom Commission of the Inter-American Press Association, says the media regulator is controlled by Martín Sabbatella, who openly supports the government, and adds that regulations are not applied to government-friendly media.“We are enormously concerned that the law is being implemented with the sole objective of destroying Clarín,” said Mr Paolillo, who argues that the government’s goal is to silence the critical voices given airtime by Clarín. “That is a step backwards for the freedom of expression.”Clarín used to be considered a government ally. Néstor Kirchner, Ms Fernandez’s husband and predecessor, allowed it to grow into the behemoth that it has become by approving its 2007 purchase of a major cable television company. However, it fell out of favour after criticising the government’s role in a row with farmers in 2008.“This is about revenge,” said Alvaro Herrero, a senior investigator at the Laboratory for Public Policy, a think-tank in Buenos Aires.In the past four years, the government has brought criminal charges against Clarín’s owners, even accusing one of them of adopting children abducted by the military dictatorship in the 1970s.It has also removed football broadcasting rights from Clarín, seized newsprint producers it owned, and not only starved its newspaper of state advertising but also forbidden other companies from placing adverts in its paper, according to Mr Kirschbaum.“If this continues and multinational companies like Carrefour and Walmart continue to obey this boycott – which is an absolute disgrace – then [the newspaper Clarín] will cease to be profitable,” said Mr Kirschbaum.Faced with the threat of expropriation if it fails to comply with the law, last week Grupo Clarín presented a plan that would split the conglomerate up into six units, while allowing it to keep its most valuable television and radio licences.“If the government was smart, it would accept Clarin’s plan,” said Mr Herrero, who explained that the plan was legal even if it may end up just splitting the company up between partners and family.Mr Herrero said that if the government rejects the plan but allows other media groups to go ahead with similar proposals, Clarín could argue that, although the law itself has been determined to be constitutional, its practical application is unconstitutional, thus prolonging the legal battle – perhaps beyond Ms Fernandez’s presidential term.Furthermore, other media groups are unlikely to move to break up their monopolies until the case with Clarín is resolved. “If Clarín doesn’t comply with the law, no one will,” said a top executive at a major Argentine media company.By Camila RussoNovember 11, 2013Billionaire hedge fund manager Paul Singer has dismissed attempts by Argentine bondholders to orchestrate a deal that would end his legal claims against the country, calling the initiative pointless.Exotix Partners LLC and Capital Economics Ltd. say Singer, whose Elliott Management Corp. is suing Argentina for payment on defaulted bonds, isn’t bluffing.After a decade-long legal battle, Singer may be only months away from receiving full payment on the debt through U.S. courts, giving him no incentive to accept lesser terms in a settlement, according to Stuart Culverhouse, chief economist at Exotix. Singer’s disinterest in negotiating with owners of restructured debt led by Gramercy Funds Management LLC may halt a rally in the bonds as investors realize the legal claims against the country won’t be dropped, said Culverhouse.Elliott officials “just want to maximize their return,” Michael Henderson, an economist at Capital Economics in London. “It’s been a decade already, so for an additional six or nine months, it’s probably well within their interest to stick with their timetable.”Argentine dollar bonds have gained 0.9 percent since the first reports of the Gramercy-led talks to find an inter-creditor solution on Oct. 20, beating returns on emerging-market debt, which lost 1.9 percent, according to JPMorgan Chase & Co.’s EMBI Global Diversified index. The gains extended year-to-date returns to 17.8 percent, the best among developing countries after Belize.Gramercy PlanGramercy’s preliminary plan calls for most holders of restructured bonds to agree to cede part of their interest payments to investors with defaulted securities in exchange for the holdouts to drop their lawsuits, according to five bondholders approached by officials from the Greenwich, Connecticut-based firm.In order to change the terms of the notes to earmark coupon payments to holdouts, Gramercy must garner approval from holders of 75 percent of each series of bonds, according to the bond prospectus.Katrina Allen, a spokeswoman for Gramercy at ASC Advisors LLC, declined to comment on bondholder talks or Elliott’s statement. Norma Madeo, a spokeswoman at the Economy Ministry, declined to comment on whether Argentina is willing to negotiate with holdouts or are supporting an inter-creditor plan.Elliott said Nov. 7 it’s only willing to negotiate with the Argentine government and has no interest in holding talks with fellow bondholders.‘Sit Down’“We welcome the idea of good-faith negotiations with Argentina, but we don’t see the point of negotiating with other bondholders,” the New York-based fund said in an e-mail. “We have approached Argentina countless times about negotiating a resolution to this dispute. It is completely within Argentina’s power to solve this.”Elliott money manager Jay Newman said in an Oct. 7 Financial Times editorial it’s time for Argentine President Cristina Fernandez de Kirchner’s government to “sit down and discuss a resolution” with its creditors.Any out-of-court solution requires Argentina’s participation because it’s unlikely that Gramercy will gather the support required to make its plan work, said Diego Ferro, co-chief investment officer at Greylock, which owns Argentine exchange bonds.“If Argentina doesn’t get involved no plan that’s originated by investors will work because they won’t pull together enough financing and participation,” he said in a telephone interview from Buenos Aires. “As soon as Argentina sits down to solve this, capital markets will open for them again.”‘Got Personal’Argentina hasn’t tapped international credit markets since its 2001 default on $95 billion, as it’s unwilling to pay the additional 8.14 percentage points over U.S. Treasuries that investors demand to hold the country’s dollar bonds.Argentina offered about 30 cents on the dollar for its defaulted debt in 2005 and 2010 debt swaps, which 93 percent of creditors accepted. Fernandez has vowed never to pay the remaining 7 percent of creditors she calls “vultures” more than what was offered in the restructurings.“It shouldn’t matter where the money comes from but another part of this is they’ve been pursuing Argentina for 10 years,” said Culverhouse at Exotix in a telephone interview from London. “Money is one thing but there’s also being proved to be right. I think things got personal a long time ago.”Navy ShipElliott has tried to embargo the presidential jet Tango 01 during a fueling stop in the U.S., seize Argentine central bank funds deposited in New York and successfully grabbed a Navy ship during a stop in Ghana for two months until it was freed in an international tribunal of the sea.Argentina may negotiate with holdouts after a clause in the exchange bond prospectus that prevents the country from offering holders of defaulted bonds better terms than those of its previous restructurings expires in December 2014, according to ACM Consultores.“Argentina will have more flexibility after December next year to sit down and negotiate with holdouts,” Maximiliano Castillo, a former central bank manager who runs ACM, said in a telephone interview in Buenos Aires. “If the ruling hasn’t been executed by then, it may have a window of opportunity to reach a solution outside of court.”‘Strong Position’Argentina is trying to avoid a second default in 12 years as the court’s decision prevents third parties, including trustee Bank of New York Mellon Corp., from passing payments to bondholders unless the nation also pays holdouts. At 1,788 basis points, the nation’s debt is the most expensive in the world to protect against non-payment over five years with credit-default swaps, according to data compiled by CMA Ltd.While a New York court on Aug. 23 rejected Argentina’s appeal, it delayed the effect of the orders until the Supreme Court decides whether or not to take the case. Bonds have rallied since then on speculation legal delays will extend into 2014.“The only thing working in Argentina’s favor is that they’ve managed to lodge appeals to kick the process to 2014,” Henderson said. “From Elliott’s point of view, they’re in a strong position. It may take some time for them to realize payment but as it stands there’s probably no reason for them to want to negotiate with any other bondholders.”By Charlie DevereuxNovember 10, 2013The International Monetary Fund is making “positive progress” and has received “good cooperation” from Argentina since the government was accused by the lender of misreporting data on inflation and economic growth, Managing Director Christine Lagarde said.Private economists have questioned economic data and estimated inflation at more than double the rate reported by the government since 2007 when former President Nestor Kirchner replaced senior officials at the statistics agency. Economy Minister Hernan Lorenzino met with the IMF in Washington Sept. 16 after the government said it would unveil a new nationwide consumer price index by year-end.“We are making positive progress but it’s a matter that will be reviewed by the board in a few days’ time, and I would not want to prejudge what the outcome will be,” Lagarde said in an interview with CNN en Espanol. “I very much hope that the country continues to make progress, delivers on its commitment and comes clear on the inflation number.”Consumer prices rose 10.5 percent in September from a year ago, according to statistics agency data that is less than half the rate estimated by private economists in a report issued by opposition lawmakers. The IMF executive board in February censured Argentina, calling on it to “address the inaccuracy” of its inflation index and gross domestic product data under a procedure that can end in expulsion from the fund.‘Serious Reforms’Argentina’s economy will expand 2.8 percent next year, trailing the Latin America average of 3.1 percent, the Washington-based lender said in last month’s Regional Economic Update. Brazil, which the IMF forecast in the report will climb 2.5 percent this year and next, is growing below potential, Lagarde said in the interview that is scheduled to air tonight.Brazil requires “serious reforms,” she said without providing further details.The real declined more than any other major currency since Brazil last month posted its widest budget deficit in almost four years, renewing investors’ concern the nation’s credit rating may be downgraded. Standard & Poor’s in June placed Brazil’s rating on negative outlook, and Moody’s Investors Service last month reduced its outlook to stable from positive.Lagarde said U.S. officials need to ensure fiscal negotiations aimed at resolving budget disagreements are successful and don’t disrupt financial markets in Latin America and elsewhere.‘Repeated Shutdowns’“Repeated shutdowns or repeated uncertainties would certainly not help global growth because the U.S. is a major part of the global economy and has ramification and connections throughout the world, particularly in Latin America,” she said, according to a transcript of the interview. “So we certainly hope that the message has registered and that another threat of a shutdown, threat of a debt-ceiling debate up until the eleventh hour is not going to happen again in January.”Lagarde said she was most optimistic about countries in Latin America that are keeping a close eye on their fiscal situation and have already restructured their economies, such as Mexico, Chile, Colombia and Peru.Mexico’s economy also will improve next year, Lagarde said.“There are very strong reforms under way at the moment which have had a slowing effect in 2013 but we see the forecast for 2014 as a significant pickup,” she said.Mexico’s GDP will climb 3 percent next year after increasing 1.2 percent in 2013, according to IMF forecasts. President Enrique Pena Nieto has pledged to end the state oil producer’s 75-year monopoly on drilling as he increases spending to stimulate growth.Venezuela’s economy is not doing well as the government drains reserves, Lagarde said. The annual inflation rate hit 54.3 percent in October, the fastest pace in 16 years as a shortage of dollars crimps imports and causes shortages of essential goods.“It’s an economy that will really have to face difficult policy issues probably shortly,” she said.November 11, 2013BUENOS AIRES (Reuters) – Argentine President Cristina Fernandez, who is recovering from surgery last month to treat a head injury, should be able to resume her normal duties on November 18, a government spokesman said on Monday.Fernandez has not made an official public appearance or speech in more than a month, since she had surgery on October 8 to remove blood that had pooled on the surface of her brain.Exams showed “an absence of significant arrhythmia and a state of good cardiovascular fitness,” the spokesman, Alfredo Scoccimarro, said in a televised address.Doctors gave Fernandez a provisional greenlight to return to work after tests on Friday cleared her of neurological damage, and she is scheduled to have another checkup on December 9.After falling and knocking her head in August, doctors found blood under a membrane that covers the brain, known as a subdural hematoma. She also suffered from an irregular heartbeat and was admitted to a hospital that specializes in cardiovascular problems.Fernandez was advised to avoid unnecessary stress and was not allowed to travel for 30 days after the surgery.While she was recuperating, her allies faced heavy losses in midterm elections, shrinking her majority in Congress and ending chances of a constitutional change to allow her a third term when a presidential vote is held in 2015.11 November 2013The political reign of the Kirchners in Argentina appears to be coming to an end as President Cristina Fernández de Kirchner deals with health problems and her party faces challengers in the midterm elections. Mrs. Kirchner was elected to her second term in 2011. She followed her husband, Nestor Kirchner, who held the presidency from 2003 until 2007 and died suddenly in 2010. Last month, officials announced that President Kirchner had sustained a head injury after a fall. She underwent surgery in October and has been told to scale back her activities.Mrs. Kirchners Front for Victory party was widely expected to lose seats in the elections held on Oct. 27. The elections have been portrayed as a dress rehearsal for 2015, when the people of Argentina will most likely elect a new president. Sergio Massa, a former member of the Kirchner cabinet who broke with the president, and Daniel Scioli, the governor of Buenos Aires Province, are seen as top contenders for the post.Nestor Kirchner assumed office at a time of financial turmoil, and his supporters credit him with guiding the growth of the country’s economy. Critics fault him and his wife for failing to capitalize on Argentina’s recovery and for presiding over a political culture that is polarized and, in some cases, corrupt. In the coming years, Argentina will need pragmatic leaders willing to work with diverse groups in order to set the country on a more promising path. Inflation remains a problem and will need to be dealt with in order to lure foreign investment. If Argentina wishes to attain the economic prosperity and international favor enjoyed by its neighbors in Brazil and Chile, the next few years will be crucial.9. ARGENTINA ECONOMY: QUICK VIEW – TELECOM ITALIA TO SELL ITS STAKE IN TELECOM (Economist Intelligence Unit – ViewsWire)11 November 2013EventAfter 21 years in Argentina, Telecom Italia has announced the sale of its stake in Telecom Argentina.AnalysisTelecom Argentina is one of the main telecommunications companies in the country, with a presence in fixed and mobile telephony as well as Internet services. The company is majority owned by Nortel Inversora, which holds a 55% share. Its majority owner is, in turn, Sofora Telecomunicaciones, a company joint owned by Telecom Italia (which holds a 68% stake) and Grupo Werthein (an Argentinian company that has a 32% stake). Telecom Italia is apparently selling in order to focus its business on key markets of Italy and Brazil as it looks to repair its balance sheet.Fintech, an investment fund owned by a Mexican businessman, David Martínez, has offered US$960m for Telecom Italia’s shares and could take over shortly, provided the sale is approved by Argentina’s Ministry of Communications. Fintech is already operating in Argentina. It holds a 40% share in Cablevisión, Argentina’s largest cable television company, in a joint venture with Clarín (Argentina’s largest media company). Under Argentina’s 2009 media law (which was recently declared constitutional after a long legal battle), Fintech would have to sell its stake in Cablevisión if the purchase of Telecom Italia’s stake in Telecom Argentina goes ahead, in line with regulations limiting cross-holdings by media and telecoms companies.Fintech’s presence in Telecom Argentina will strengthen that of Mexican companies in the telecoms market. Claro, the leader in the local mobile market, is owned by Mexican billionaire Carlos Slim. The departure of Telecom Italia, meanwhile, follows the gradual departure of many European firms from the local market, after a wave of privatisations in the 1990s saw European companies acquire stakes in utility and financial services firms. This process has been in reverse since Argentina’s 2001-02 economic crisis. Although Telecom Italia’s decision to sell is related to the company’s own financial difficulties, its time in Argentina has not been smooth sailing. In early 2010 the government threatened to nationalise Telecom Argentina following an adverse court ruling.By Ken Parks11 November 2013Argentina’s President Cristina Kirchner will resume her duties Nov. 18 after recovering from head surgery last month, the president’s spokesman said Monday.Mrs. Kirchner passed medical tests and is in “conditions to resume her formal activities” next Monday, said her spokesman, Alfredo Scoccimarro, in a televised address.Mrs. Kirchner is recovering from an operation Oct.8 to drain a blood clot near her brain that was caused by a head injury. The president’s medical team has ordered Mrs. Kirchner to avoid flying for 30 days. Doctors are scheduled to perform additional tests on the 60-year-old president on Dec. 9.Vice President Amado Boudou has run the government during her absence.Mrs. Kirchner returns to work amid an economy hobbled by inflation and foreign currency shortages.Inflation has been running at or at more than 20% for almost four years, according to many economists. Private-sector forecasts put annual inflation at about 25%, compared to the 10.5% reported by the government.High inflation led to a run on Argentina’s foreign-currency reserves two years ago as Argentines and foreigners tried to pull money out of the country. The Kirchner administration has so far managed to avoid devaluating the Argentine peso by strictly rationing the hard currency it makes available to people and businesses.The upshot is a small, but vibrant currency black market where the U.S. dollar fetches a 64% premium to the greenbacks the government sells to the public through the regulated foreign exchange market. The gap between those exchange rates has aggravated inflation as some businesses reprice goods based on the black-market rate.Currency controls haven’t stopped reserves from approaching a seven-year low of about $33 billion as debt payments, persistent capital flight and fuel imports outweigh dollar inflows from exports.“The most urgent matter that needs to be addressed are reserves,” said Fausto Spotorno, an economist at consulting firm Orlando J. Ferreres & Asociados. “The loss of reserves has accelerated and now we are losing almost $1 billion a month even with controls.”The government could stanch dollar outflows by further limiting imports or making it more difficult for Argentines to shop and travel abroad if its willing to pay the economic price.“The impact on the economy from more restrictions will probably be negative,” Mr. Spotorno said.Mrs. Kirchner will also have her hands full shaping the succession struggle within the ruling Peronist movement during her last two years in office.Her Peronist faction, the Victory Front, retained its majorities in both houses of Congress in midterm elections Oct. 27, but fell well short of the support needed to reform the constitution so she could run again in 2015.Peronist moderates such as mayor Sergio Massa and Daniel Scioli, the popular governor of Buenos Aires province, have already signaled plans to run for president-offering voters an alternative to Mrs. Kirchner’s confrontational brand of left-wing Peronism. Investors have bid up Argentine stocks and bonds in hopes that Mrs. Kirchner will be succeeded by a more business-friendly leader.Peronists are notorious for abandoning leaders who are perceived to be on their way out of power, and Mrs. Kirchner will have to guard against defections from the Victory Front to other Peronist factions seen as best positioned to win the presidency.Juggling a deteriorating economy and a political succession would be a tough job for any leader, much less one with a long history of health problems. In recent years, low blood pressure forced Mrs. Kirchner to suspend her activities for several days and cancel international trips. In January 2012, surgeons removed a noncancerous growth on her thyroid gland.11 November 2013Investment fund Fintech may take control of Argentine telecoms operator Telecom Argentina (NYSE: TEO) this week, local paper La Nación reported, citing sources close to the investment fund.Fintech may pay US$960mn for Telecom Italia’s (NYSE: TI) 22.7% stake in the Argentine telecom operator, which would give it control of the company. With this acquisition, Fintech would have a majority stake in Sofora Telecomunicaciones, the holding company which controls Telecom Argentina.“The completion of the operation is imminent. It’s a matter of hours,” the source was quoted as saying.On November 7, TI’s executives confirmed that the company’s board had received an unsolicited offer for Telecom Argentina and that it was negotiating the terms of a deal.The move is part of the heavily indebted Italian firm’s 2014-16 strategic plan, which involves raising up to 4bn euros (US$5.37bn) in cash to focus on growth opportunities in Italy and Brazil.According to the report, Fintech expects this acquisition to receive the greenlight from Argentina’s telecoms ministry SeCom and other government agencies within the next six months.Fintech expects the government may award 4G spectrum in the near future, according to the report. In December 2012, the Argentine government issued a decree reserving spectrum bands for a future auction of 4G frequencies. Through decree 2426, the government determined that the 1710-1755MHz, 2110-2155MHz and 698-806MHz bands would be exclusively used for terrestrial mobile telephony services.Fintech currently has a 40% stake in Cablevisión, the pay TV and broadband services provider controlled by Argentine media giant Grupo Clarín. According to the country’s media law, Fintech may be forced to sell its stake at Cablevisión as the regulation does not allow a firm which provides public services to offer pay TV. This eventual incompatibility will be analyzed by audiovisual services regulator Afsca.11 November 2013WASHINGTON, Nov 10 (Reuters) – Argentina has made “positive progress” in reforming the quality of its economic data, the head of the International Monetary Fund said on Sunday, adding that the IMF’s board is set to review the country’s moves in a few days.The IMF, which requires accurate statistics to analyze the world’s economies, censured Argentina in February over failing to improve the accuracy of its inflation and gross domestic product growth data and gave the country until Sept. 29 to take action.Analysts have accused Argentina’s government of underreporting inflation since early 2007 for political gain and to reduce payments on its inflation-indexed debt.Inflation has been around 25 percent for several years, according to private estimates, one of the highest rates in the world. The government says inflation is less than half that.“We are in a process with Argentina at the moment of clarifying the numbers, establishing those reliable and shared numbers with the membership,” IMF Managing Director Christine Lagarde said in an interview with CNN en Espanol.“We are making positive progress but it’s a matter that will be reviewed by the board in a few days’ time and I would not want to prejudge what the outcome will be.”If Argentina fails to make progress, the IMF board could choose to impose sanctions, barring Latin America’s third-largest economy from voting on IMF policies and accessing financing.The only country the IMF has forced to leave its ranks was the former Czechoslovakia, an action that occurred in 1954. Countries like Somalia and Zimbabwe have been sanctioned by the IMF, but mainly because of a failure to repay the fund.Argentina’s center-left government, and many ordinary citizens, blame IMF policies for precipitating the country’s devastating 2001-02 economic crisis.Argentina has refused to participate in the IMF’s annual economic assessment for the past seven years – though it is not unique in South America. Ecuador has shunned the assessments for the past five years, and Venezuela has not participated since 2004.In the CNN interview, Lagarde said it was difficult to figure out what was going on in Venezuela’s economy, given the lack of access and reliable data.“I don’t think that the economy is doing well at the moment and we certainly understand that they are using reserves in a very significant amount,” she said. “And that it’s an economy that will really have to face difficult policy issues probably shortly.”Venezuela’s 12-month inflation rate climbed to 54.3 percent, according to statistics last week, the latest blow to President Nicolas Maduro’s efforts to stabilize the economy.Lagarde added that she was most optimistic about economic progress in Chile, Colombia, Mexico and Peru.By Charles Newbery8 November 2013Argentina’s government this week could announce further measures to arrest capital flight as reserves continue dwindle and the economy worsens.The central bank’s foreign reserves dropped 4% in October to $33.4 billion, taking the decline in the first 10 months of this year to 23%. They have dropped 37% from a record $53 billion in early 2011 despite government measures to slow the bleeding first introduced Oct. 31, 2011.President Cristina Fernandez de Kirchner has made it virtually impossible to buy dollars at the central bank-administered exchange rate, even for foreign travel. Her administration has also imposed a 20% tax on purchases made abroad using local credit and debit cards to dissuade purchases and travels, and it has limited withdrawals from local banks via overseas ATMS.Even so, travelers can still shop and withdraw dollars at the official exchange rate of 5.85 pesos to the dollar and return with dollars to trade on the black market at nearly 10.00 pesos. Foreign tourism has been steady this year.Most economists expect the capital controls, which also include restrictions on companies sending profits to headquarters abroad and paying dividends outside the country, won’t end any time soon.The government “will deepen its monetary policy with more of the same,” Martin Redrado, central bank president from 2004 to 2010, said last week. The government will “look for dollars wherever they may be.”This could involve increasing the 20% tax on using local credit and debit cards abroad, and possibly hiking withholding taxes on exports.If nothing is done to contain the level of reserves, they are likely to fall further, IERAL, an economic think-tank based in Cordoba warns. Since hitting a record 17.7% of GDP in 2007, the reserves have dropped to 6.7% of GDP this year and could reach 3.6% in 2015.CFK had sought to rebuild dollar supplies through a June-September amnesty allowing companies and individuals to bring in undeclared funds without tax penalties. The amnesty, which has been extended until the end of the year, snared only $379 million in the first round, far less than the $4 billion goal.In a new effort to bring in dollars, the government announced Friday it plans to sell up to $1 billion in 3-year, dollar-denominated bonds paying 4% annual interest. The Argentine Economic Development Savings Bonds (BAADES) initially were offered through the amnesty, but to little success.Now they will be marketed to investors who want to bring declared funds – held locally or overseas – into the financial system. The bonds will be sold in one or more tranches, possibly from as soon as this week.The proceeds will be used to finance energy projects to help arrest declining production. Oil output has dropped by a third and gas by 20% over the past decade.The decrease, a response to low investment, maturing reserves and few finds, has led to a surge in energy imports which in turn is reducing the trade surplus, a main source of funds for feeding the central bank with hard currency to sustain the exchange rate and service the debt.The trade surplus dropped 30% to $7.1 billion in the first nine months of 2013 compared with $10.2 billion in the year-earlier period, largely because energy exports dropped 22% and energy imports shot up 25%.An automakers association will report October production, sales and exports data Monday or Tuesday.
“I never changed my opinion on Bergoglio” -Adolfo Pérez Esquivel
By Arturo C. PorzecanskiNovember 12, 2013Carlos Mauleon, the former Barclays Capital investment banker who handled Argentina’s 2005 debt restructuring, recently wrote a guest post on beyondbrics justifying that infamous transaction: “Whatever you may think of Argentina, … the one good decision its leaders made was to aggressively restructure [the public] debt back in 2005” because “the question is, did [Argentina] have a better choice? Not really.”But it did. Here’s why.After discussing the case of Greece in 2011-12 and its supposed relevance to Argentina’s situation in 2005, Mr Mauleon concluded with a plea that while “the rhetoric and economic policies of the Argentine government post restructuring muddle the justification of their approach and provide ample ammunition for the holdouts, the courts as well as public opinion to throw the country under the bus,” we should refrain from doing that, at least in our minds.However, it was Argentina that threw its creditors under the proverbial bus a dozen years ago – and needlessly so.To recall, President Eduardo Duhalde stopped debt-service payments to bondholders and official bilateral creditors in January 2002, and in the sixteen months that he was in office, he never reached out to his local and international investors to explain himself – never mind to work out collaboratively on a solution to cure the default. By the time he stepped down at the end of May 2003, and his elected successor Néstor Kirchner took the reins of power, next-door Uruguay had already successfully refinanced its public debt in a creditor-friendly manner without ever missing a single payment – and despite having had to face fiscal, currency, banking, and economic shocks fully comparable to those in Argentina.Second, President Kirchner took another twenty months until he finally presented bondholders with a punishing, take-it-or-leave-it debt exchange offer – a delay of three years since January 2002 intended to encourage creditor capitulation to whatever proposal Argentina would finally put on the table. His economy minister at the time, Roberto Lavagna, went so far as to announce that the government would regard any investor participation rate above fifty percent as having effectively cured the country’s default. The clear implication was that even if nearly half of all bondholders failed to accept the terms of the ruinous debt exchange, they would be ignored and go unpaid. To ensure that the message was heard loud and clear, the government passed a law forbidding the reopening of the debt exchange in the future – the so-called “Lock Law” which has been cited by the courts as evidence of the country’s ill will.Third, Argentina’s economy was sufficiently recovered by early 2005, largely thanks to a commodity export boom, such that the government only needed a modest amount of debt-service relief from its creditors. For example, the country’s official international reserves had doubled from early 2003 to early 2005, from under $10bn to over $20bn, and so had government tax revenues measured in dollars between 2002 and 2004. And yet, the authorities pleaded on-going and future poverty by referencing a proprietary debt-sustainability model which failed to reflect the strong economic rebound underway, incorporated excessively pessimistic forecasts, and was never validated – never mind endorsed – by the IMF, as was customary in prior sovereign debt restructurings. During 2006-12, the economy ended up growing twice as fast as the government’s estimates as of late 2004, with actual export earnings and tax revenues outperforming official gloomy forecasts by even wider multiples.The good news about Argentina’s economic and fiscal recovery of 2003-04 began to circulate around the international investor community, and thus the credibility of the government’s plea to be treated as if the country was still in the midst of an economic emergency started to erode. The improvement in Argentina’s capacity to pay was already so evident by early 2005, when the government put its demand for massive debt forgiveness on the table, such that one-fourth of the bondholder universe (by par value of claims) refused to enter into the debt exchange. The holdout component would surely have been larger still if the authorities had not intimidated the investor base as aggressively as they did, encouraging large-scale creditor capitulation.Therefore, it should be crystal clear that Argentina and its financial advisors did have much better choices: they should have put forth a more reasonable and credible proposal based on consultations or negotiations along the lines of the Uruguay refinancing; better yet, they should have done so much earlier (say, in 2002) to restore their reputation and thus their access to the world’s financial markets.By early 2005, the government had the financial wherewithal to put forth a debt exchange that would have been viewed as realistic and thus fair, because it captured the strong economic recovery and the favourable winds that were blowing in Argentina’s direction at the time. Such a proposal could have gathered the usual degree of support (around 95 per cent, as per many other sovereign debt restructurings), minimizing any holdout problems. However, for domestic political reasons, the authorities chose to default and then exhibited protracted unwillingness to pay, choosing a confrontational path which has haunted Argentina and its creditors to this day.It has set such a bad example that no other nation has dared to follow it since.Professor Arturo Porzecanski is Director of the International Economic Relations Programme at American University, Washington DC. During 2000-2005, he was a managing director and the head of emerging markets sovereign research at ABN Amro.By Eliana RaszewskiNovember 12, 2013Eric Francos, a French doctor on a three-week vacation with his wife and two children, was huddled off to one side of a pedestrian thoroughfare clogged with shoppers in downtown Buenos Aires, taking $100 bills out of his money belt as illegal money-changers beckoned with calls of “dollars, euros, exchange.”“I know the risks, but so far I’ve never had problems, I try to be careful,” Francos, who plans on touring vineyards in the province of Mendoza, which lies 1,100 kilometers (680 miles) west of the Argentine capital and is renowned for its Malbec wine, said last week as he stuffed pesos into his front pants pocket. “Changing dollars in the streets is worth it.”Tourists like Francos, who got 9.7 pesos per dollar compared with 5.9729 at the official rate, are turning to the black market to obtain local currency and shaving as much as 40 percent off their vacation costs. They’re also depriving the central bank of the foreign reserves the government uses to pay its debt, which is the most expensive to protect against non-payment anywhere in the world using credit-default swaps.Visitors who spent $622 million during the second quarter sold only $342 million through official channels including banks, a 48 percent plunge from a year earlier, according to government data.Last month, in an attempt to get more dollar inflows into the country, the government said Argentines who bring in foreign currency to pay taxes will be exempt from a bank deposit requirement.Reserve PlungeLured by a widening gap between official and illegal exchange rates as President Cristina Fernandez de Kirchner tightens limits on foreign-currency purchases, tourists are contributing to the longest stretch of reserve declines in at least two decades and helping to reduce dollars held at the central bank to a six-year low of $33.05 billion.“The numbers show that tourists are changing their dollars in the illegal market to take advantage of the higher rate,” Belen Olaiz, who wrote a report on the illegal market for Abeceb.com research firm, said in a telephone interview from Buenos Aires.An official at the central bank didn’t return phone calls seeking comment on the decline in reserves.Reserves cover 27 percent of outstanding foreign-currency debt, the lowest in seven years, according to Orlando Ferreres y Asociados.Arbolitos, CavesArgentina has been unwilling to pay borrowing costs that are almost double the average rate for emerging markets to tap global credit markets since its 2001 default on $95 billion of debt. In 2010, Fernandez ordered the central bank to pay investors who received bonds in two restructurings with reserves.Since then, the government has drawn down more than $39 billion of central bank funds to pay debt, contributing to an unprecedented streak of 12 straight months of declines in reserves.The country is using reserves to reduce its debt levels, which have fallen in the past years, said an official at the Economy Ministry with direct knowledge of the mater who asked not to be named due to internal policies.The country’s foreign-currency debt held by private creditors fell to 9.3 percent as of June 30, from 11.9 percent at the end of 2010, data compiled by the Economy Ministry show.‘Blaming Tourists’Tourists who change money illegally face the risk of receiving fake bills or being robbed. Street money-changers, known colloquially as “arbolitos,” Spanish for “little trees” because they’re like a fixed part of the landscape, often ply their trade within a few yards of policemen.An alternative is to visit one of the small shops or back-street offices known as “caves” that use tourist agencies or dealerships in antiques, gold and coins as a front for trading currencies.Sanctions for illegal currency trading range from a fine of 10 times the transaction if it’s the first time a person is caught to as many as eight years in prison.Some shops and restaurants accept foreign currency as payment, giving clients more for their dollars or euros than they would get at a bank or using credit cards.Pablo Romano, a 24-year-old employee in a clothing store on Florida Street, where Francos exchanged dollars for pesos, says he offers tourists who make purchases an exchange rate of nine pesos per dollar.Foreign Investment“We shouldn’t be blaming tourism for the drop in reserves rather government policies,” said Jose Luis Espert, who runs research firm Espert & Asociados in Buenos Aires. “High public spending makes the government print more pesos which Argentines don’t want.”Foreign-direct investment in Argentina fell 32 percent in the first half of 2013 from the same period a year earlier to $5.2 billion, while investment in neighboring Brazil and Chile was $39 billion and $10.4 billion, respectively, according to the Santiago-based United Nations Economic Commission for Latin America.“What we have in Argentina is a dollar supply problem, not demand,” Ricardo Delgado, director of Buenos Aires-based Analytica Consultora, said in an interview. “The big problem is that we’re not receiving dollars because investors don’t have confidence in the country.”Investors demand an extra yield of 8.23 percentage points over U.S. Treasuries to hold Argentine debt, as of 5:24 p.m. in Buenos Aires, according to JPMorgan Chase & Co.’s EMBI Global Diversified index.Tourism DeficitWith the depreciation of the peso lagging annual inflation that economists estimate has run at more than 20 percent for at least four years, Argentina has become more expensive for foreign tourists.The rising costs have also encouraged greater numbers of Argentines to buy goods abroad while on vacation and to withdraw cash to exchange in the black market at home. While the government slapped a 20 percent charge on the transactions to discourage consumers, the implied rate of 7.176 per dollar is still cheaper than the black market.As a result, the country will run up an $8 billion tourism account deficit, or the difference between what foreign tourists spend in Argentina and what Argentines spend abroad, according to Delgado.Fernandez may act to cut off access to dollars further for Argentines traveling abroad, both Olaiz and Delgado said.“The government may decide to adjust credit cards payments of foreign-currency purchases,” Delgado said. “Still, any ideas the government may have are only palliatives if it doesn’t boost confidence in the country to solve its deeper problems.”For now, Francos, the French doctor, will continue to spend in cash to finance his trip to Patagonia in the south and Salta in the north rather than swipe his foreign bank cards at the official rate.If it weren’t for the cheaper rate, “many items are as expensive as in Europe,” Francos said.By Whitney McFerronNovember 12, 2013Argentina, the world’s biggest biodiesel exporter, is increasing shipments of the fuel on stronger U.S. demand, Oil World said.Argentine exports of biodiesel made from soybean oil will climb to 450,000 metric tons in the three months through December, more than double the year-earlier 221,000 tons, the researcher said today in an e-mailed report. The U.S. may account for two-thirds of purchases from September through the end of the year, it said. Argentina’s biodiesel production this quarter may jump 57 percent from a year earlier to 670,000 tons.“The U.S.A. has become the leading export destination for Argentine biodiesel,” Hamburg-based Oil World said. “A large part of the U.S. biodiesel imports is destined for re-export to African and Asian countries.”U.S. biodiesel output rose to a record 128.3 million gallons in August, according to the most recent monthly data from the Department of Energy. Inventories of soybean oil used to make the biofuel fell to an eight-year low of 773,000 tons at the end of the 2012-13 season on Sept. 30, and supplies may slide further to 741,000 tons by the close of 2013-14, the U.S. Department of Agriculture estimates.Argentina’s annual biodiesel exports still will decline in 2013 to 1.224 million tons from 1.558 million tons a year earlier, Oil World said. Shipments to the European Union tumbled as the 28-country bloc made plans to institute anti-dumping tariffs on both Argentine and Indonesian biodiesel, the researcher said last month.Argentina’s government may raise its mandate for domestic biodiesel usage, with the Ministry of Industry calling for a 10 percent blend level in fuel by the end of the year, according to Oil World.In Indonesia, biodiesel exports dropped 22 percent from a year earlier to 118,000 tons in August, Oil World said. Shipments in 2013’s first eight months were still a record 1.04 million tons, 12 percent more than the prior season, according to the report.12 November 2013The following is a press release from Standard & Poor’s:– On July 4, 2013, we placed our global scale ratings on the four rated Argentinean local and regional governments (LRGs)–the city of Buenos Aires, and provinces of Buenos Aires, Cordoba, and Mendoza–on CreditWatch negative after lowering the institutional framework assessment score on Argentinean LRGs.– On Sept. 13, 2013, we lowered the foreign currency global scale ratings on these entities to ‘CCC+’ from ‘B-’ after Argentina’s downgrade. We maintained the CreditWatch negative listing on the ‘B-’ local currency global scale ratings on these entities until we concluded the assessment on whether any of them could comply with the requirements to be rated above the sovereign.– We now believe that neither the provinces of Cordoba, Buenos Aires, or Mendoza fulfills the necessary conditions to be rated above the ‘CCC+’ local currency sovereign rating. Consequently, we are lowering our local currency global scale ratings on these three provinces to ‘CCC+’ from ‘B-’. The outlooks are negative.– On the contrary, we consider that the city of Buenos Aires presents a measurable likelihood that its credit characteristics will remain stronger than those of the sovereign in a scenario of economic and political stress. Consequently we are affirming our ‘B-’ local currency global scale rating on the city. The outlook is negative.BUENOS AIRES (Standard & Poor’s) Nov. 12, 2013–Standard & Poor’s Ratings Services lowered its local currency global scale ratings on the provinces of Cordoba, Buenos Aires, and Mendoza to ‘CCC+’ from ‘B-’ and removed them from CreditWatch negative. The outlooks are negative. At the same time, we affirmed our ‘B-’ local currency global scale rating on the city of Buenos Aires and removed it from CreditWatch negative. The outlook is negative.“These rating actions follow the Sept. 10, 2013, downgrade of Argentina to ‘CCC+’ from ‘B-’ and our subsequent assessment of characteristics of each LRG and their capacity to withstand a sovereign scenario of default,” said Standard & Poor’s credit analyst Delfina cavanagh.According to our criteria, the local currency global scale ratings on Argentinean LRGs could be above the sovereign ratings if there’s a measurable likelihood that their credit characteristics will remain stronger than those of the sovereign in a scenario of economic or political stress. At the same time, given that the sovereign is rated in a low-speculative grade, we incorporate additional specific considerations, because we have more visibility on the potential sovereign default scenario at this rating level.Conversely, the foreign currency global scale ratings on Argentinean LRGs are capped at the sovereign’s current transfer & convertibility (T&C) level of ‘CCC+’. Consequently, we cap our foreign currency global scale ratings on all Argentinean LRGs at ‘CCC+’.12 November 2013Argentina reached 7.3mn fixed and mobile connections at the end of the first half of the year, an increase of 1.78% compared to end-2012, according to the latest broadband barometer study released by Cisco.The country saw a 9.9% increase in fixed broadband 2.0 connections (above 2Mbps) in the first half of the year to reach 3.4mn connections. This figure represents a penetration of 8.2%, according to Cisco’s latest Broadband Barometer study, carried out by tech consultancy IDC.Cable modem connections expanded 5.6% during the first half of the year, while xDSL connections grew 1.7% during the same period, according to Cisco’s barometer. These two technologies represented 98.6% of total fixed broadband connections at end-June.The report also stated that 55.4% of total fixed broadband connections in the country had access speeds of over 2Mbps.Meanwhile, mobile broadband connections totaled 1.2mn at the end of June, or 16.2% of total broadband accesses in the country. Mobile broadband connections declined 5.3% in the first half of the year, according to the study.Cisco’s study also forecasts a total of 9.2mn fixed and mobile broadband connections by 2017. Mobile connections will account for 11.2% of total connections.Cisco’s country manager for Argentina, Gabriel Sakata, told BNamericas that the relatively low number of devices for fixed broadband 2.0 connections is limiting growth in this segment. According to Sakata, the number of available devices for this technology is lower than in other countries in the region.Sakata also said that connection speeds in Argentina are still slower compared to other countries such as Brazil and Chile. The average connection speed in the country is 2.4Mpbs. Sakata said that ISPs are currently offering higher access speeds maintaining the same tariffs for subscribers.The executive also highlighted that some provinces in the country still lack sufficient infrastructure for broadband services. However, he added that fixed, mobile and cable operators have been significantly investing in backbones.By Pete SeppNovember 12, 2013Amid all the recent political brawls between the White House and Congress over government funding for the current fiscal year and the federal debt ceiling, many Americans likely haven’t noticed that other nations’ financial practices can be much worse, while still impacting their wallets here at home. That’s why the National Taxpayers Union, along with 14 other groups in the limited government movement, wrote to Congress last week to draw attention to the alarming news that the World Bank is considering $3 billion in new loans to Argentina.In the letter, which was co-organized with the Taxpayers Protection Alliance, we urged Congress to send a strong message to the administration to oppose these World Bank loans, and for the U.S. Treasury to withhold funding from the bank if it continued to underwrite “financial rogue” states like Argentina. Such a stance is especially important, given matters such as:Argentina’s continual defiance of the U.S. judicial system: Argentina’s economic and political leaders, who have mired their nation in statist, anti-free-market policies, have expressed they would rather default than abide by U.S. court determinations. To date, the government of President Cristina Kirchner has actively ignored more than 100 such judgments, totaling billions of dollars. And in a new video clip Argentina’s counsel is seen telling the U.S. Second Circuit Court of Appeals that Argentina “would not voluntarily obey” their rulings.Argentina’s continual defiance of its international obligations to investors and lenders: According to the Financial Times, “of a total of 439 legal disputes between countries and companies at the World Bank tribunal, no fewer than 50 involve Argentina – far more than anywhere else, with socialist Venezuela lagging some way behind in second place.” Many companies that hold International Center for Settlement of Investment Disputes claims against Argentina are American. While Argentina just settled five of its ICSID cases last month, 45 cases remain outstanding, in addition to unresolved debts with the Paris Club, various nationalizations and ongoing censure by the International Monetary Fund for failure to comply with basic obligations.Argentina’s currency policies which, some say, have the effect of actively encouraging money laundering within its borders: During the summer, the Argentine government allowed its residents to trade in their U.S. dollars, which are running short, for a new “pseudo currency” and receive tax amnesty while doing so. International observers criticized the plan as a way to legalize dirty money. The Financial Action Task Force, the inter-governmental body developing and promoting policies to combat money laundering and terrorist financing, determined this month that Argentina will remain on its “grey list” for the time being, alongside the countries of Afghanistan, Angola, Cuba and Sudan.These are just some examples of how Argentina’s misconduct impacts American investors, taxpayers, and international rule-of-law. It’s therefore no wonder that advocates of limited government have long expressed concerns about our Treasury helping to prop up these bad actors.To give just one example, NTU submitted comments in 2010 to the New York Legislature, which was holding hearings on the impact of the 2001 Argentinian default on its debts. At the time, we noted that “Argentina’s pattern of fiscal irresponsibility and economic mismanagement has left U.S. taxpayers to shoulder the burden of such recklessness, and has exacerbated the already battered and fragile state of our own economy. Repayment of Argentine debt in full is the only option to relieve the misery caused by Argentina’s negligence.” In 2012, NTU released a study authored by Alex Brill and James K. Glassman calling for a restructuring and reform of the G-20, a multi-country economic policymaking forum. Utilizing a rational set of data-driven criteria, Brill and Glassman recommended that four nations, including Argentina, be removed from G-20 and replaced with others.The United States has a reputation to uphold in opposing future lending to Argentina. Following the adoption of a U.S. policy in 2011 to oppose all multilateral development banks’ lending to Argentina, several other nations followed suit, including the United Kingdom, Spain, Germany, Japan, the Netherlands and Canada. It remains in American taxpayers’ best interest for this policy to continue while Argentina chooses to behave like an international scofflaw in the financial sphere.November 12, 2013Neuquen Province in Argentina has extended the exploration period for the Roch SA-operated Coiron Amargo Sur block by 1 year until Nov. 8, 2014, said 35% working interest owner Madalena Energy Inc., Calgary.The northern part of Coiron Amargo, known as Coiron Amargo Norte, is under a 25-year exploitation concession that the province approved in 2012.The extension provides the four-company group time to satisfy remaining work commitments, Madalena said. After satisfying these, the partners have the ability to extend Coiron Amargo Sur through further exploration, evaluation, and exploitation phases.Madalena said the group has reentered the CAN.XR-2(H) well and is drilling horizontally in the Sierras Blancas light oil reservoir. This is the first horizontal well drilled into one of the six Sierras Blancas conventional light oil pools discovered on the block to date.After this well, the group plans to drill an additional Vaca Muerta shale delineation well (CAS.x-15) in the southern part of the block.Coiron Amargo interests are Roch and Gas y Petroleo Neuquen SA 10% each, Apco Oil & Gas International Inc. 45%, and Madalena 35%.8. DENNIS BURNS WAITS FOR ARGENTINIAN SUPREME COURT TO RULE ON RETURN OF ABDUCTED DAUGHTERS (The Huffington Post)November 12, 2013In what is probably every divorced parent’s worst nightmare, a Colorado father has been waiting for over three years to have his abducted children returned to the United States.Dennis Burns’ two daughters were kidnapped by their mother to Argentina after a judge denied her request to relocate to the country with their children, and now there is no immediate end to their custody battle in sight and the Supreme Court of Argentina has even been asked to weigh in.In 2009, Burns and his ex-wife Ana Alianelli initially agreed to keep their divorce “amicable” for the sake of their two daughters when they split up after five years of marriage. But Alianelli soon claimed Burns had abused her and requested to take their children with her to Buenos Aires, Argentina.A judge later ruled that Alianelli’s claims of abuse were unfounded and ordered that Burns be the primary residential parent. In that ruling, the judge ordered the girls — Victoria and Sophia, who were ages 3 and 1 at the time — to remain with Burns in the United States.“I felt a sense of relief that was just beautiful,” Burns told CNN of the decision. “And I was like, ‘I’m going to be able to spend time with my daughters, finally, and live with them and be able to teach them things, and show them things, and live here with them in Colorado.”But three weeks later, Alianelli defied the order and took the girls to Argentina.The U.S. State Department says they receive about 1,200 new cases similar to Burns’ each year.According to Burns’ Facebook page “Return Burns Children Fund,” Burns has already contacted the FBI, the U.S. Attorney General’s Office, the U.S. State Department and the National Center for Missing and Exploited Children.Even though the judge signed an order for the immediate return of the Burns children to the United States, the U.S. State Department has told Burns it could take 18 months to years to get his daughters back.From the U.S. Department of Justice’s website:Under federal law, prosecutors may investigate and prosecute the parent who kidnapped the child. However, prosecutors generally have no control over the custodial decisions affecting the kidnapped child or if foreign authorities will order the return of the child.The return of kidnapped children is often settled through negotiation. The U.S. Department of State handles the coordination of efforts with foreign officials and law enforcement agencies to effectuate the return of children to the United States. In some circumstances, the return may be governed by the Hague Convention on the Civil Aspects of International Parental Child Abduction (1980).The Hague Convention only applies if both of the countries involved in the child abduction case are signatories to the Convention — the U.S. and Argentina are — but there have been significant delays to the proceedings. While an appellate court in Buenos Aires ruled in favor of Burns, Alianelli appealed it and the case is now headed to Argentina’s Supreme Court.A study on parents who abduct their children from the UK by the National Parents Organization found that an astounding 70 percent of the abductions are committed by mothers.“It’s such an isolated feeling. There’s nothing to soothe the pain and the hole in my heart,” he told The Aspen Times. “I’m in unchartered waters here. I’ve always had a pretty blessed life.”Burns has been able to see his daughters since, but he’s had to travel to Argentina to do so and last time the visit was cut short by Alianelli and her lawyer.Burns has also enlisted the help of another dad, David Goldman, who went through a similar ordeal in 2004 when his son was kidnapped by his Brazilian-born mother. He ended up spending upwards of $700,000 to get his then 8-year-old son Sean back.In Burns’ case, his home has already been foreclosed and he claims on his website that he was forced to declare bankruptcy after accruing so many legal fees. He is now asking the public for donations to help him secure his daughters’ return.The financial aspect is something that I hate to face and realize at times, because it almost seems secondary to the concept that the girls are the most important focal point. But it simply cannot be ignored that unfortunately, this international incident is extremely costly. I personally know other left behind parents who have given up on trying to have their children returned after being kidnapped. Each time it has been financial constraints which have left these parents facing the unthinkable. I have cried many tears speaking with these parents and have a paralyzing fear that this quest for justice in the name of the best interests of my daughters can end due to lack of financial ability.By Ian MountNovember 12, 2013Jess Jackson, a San Francisco lawyer, changed the face of US winemaking when he founded the Kendall-Jackson company in California in 1982. By the time he died in 2011, the man behind the slightly sweet Kendall-Jackson Vintner’s Reserve Chardonnay was a billionaire producing more than 5m cases a year.Yet, in spite of considerable investment, Jackson was never able to repeat his success in Argentina.In 1996, he bought 1,100 acres in Mendoza’s Uco valley, later adding 1,750 acres and a winery, led by Randy Ullom, who ran his Chile operations.But, in 2003, after a series of business missteps and Argentina’s debt default, which caused the peso to lose almost three-quarters of its value, Jackson sold his Argentine business to a Buenos Aires couple for $2.5m – a $5.5m loss on his investment, according to Wine Spectator magazine.Jackson was not the only foreigner to enter the Argentine wine business only to discover that it could be a minefield of hand-shake deals, erratic government policy and economic collapse.“The growth and excitement that Argentina has produced continues to attract people. But Argentina is not an easy-to-deal-with country,” says José Manuel Ortega, the Spaniard who runs Mendoza’s O. Fournier winery.About $1.5bn was invested in the Argentine wine industry in the 1990s, about two-thirds of which came from foreign winemakers. This led to a surge in exports from $128m in 2002 to $920m in 2012, according to the Instituto Nacional de Vitivinicultura, the Argentine wine agency.But high inflation and import restrictions in the past two years illustrate that doing business in Argentina can be difficult. For foreign investors, it is a reminder that success requires creativity and a willingness to do things the Argentine way.It was a shortage of that willingness that hurt Kendall-Jackson.From the start, Kendall-Jackson had problems getting enough water to its land, which was outside Mendoza’s traditional vineyard zone, as well as difficulties importing the US plants it wanted.“There was a way we wanted things done: how to make wine, how to grow grapes, how to do the financial records,” Mr Ullom says. “We’re very strict and have some very focused plans. It’s our way or the highway.” In the end, the rigid Kendall-Jackson chose the latter path.Foreigners in Mendoza have since learned from Kendall-Jackson’s experience. But overseas investors are again facing tough times. Inflation has been about 25 per cent a year since 2010 and the national government has instituted import controls to stem the outflow of central bank reserves.For Mendoza winemakers, this means higher costs, scarce supplies and squeezed margins. The cost of making wine has doubled in the past four years, says Valeria Mutis, an analyst at Rabobank.“The biggest problem the industry is facing is a loss of competitiveness,” Ms Mutis says.According to Caucasia Wine Thinking, a market analysis company, in the first nine months of 2013, Argentina exported 220.3m litres of wine for $640.6m, down 19.8 per cent and 5.5 per cent respectively on the same period of 2012. The entry level has been especially hard hit: exports of bottled wine under $18/case have fallen by 37 per cent.In response, vintners have become more creative.Argentina’s government encourages exports by refunding various taxes to exporters, but it does so slowly. To cut the wait, Pato Reich, the Chilean chief executive of Renacer, his family’s Mendoza winery, sells wine to local companies that need to export in order to get permission to import other goods (a government requirement).They export for Mr Reich and handle the refund delay. “There are a lot of rules that change day to day, so you have to be flexible,” he says.Mr Reich has also learned to plan. After he was unable to import label paper, making it impossible to ship exports worth about $400,000 a month, Mr Reich began to stock 10 months’ supply of corks, paper and bottles, up from a three months’ supply before. The problem, he says, is that it ties up $200,000 of working capital.Foreign owners also have to learn that business in Argentina runs on friendship. After applications to import oak barrels were repeatedly rejected, Mr Ortega from the O. Fournier winery explained his problems to Marcelo Barg, agro-industry minister for Mendoza, at a winery dinner.The barrels were promptly approved, just in time for the 2013 harvest. “You have to go and plead,” Mr Ortega says.There have been some encouraging signs of late. Carlos Clément, a Mendoza shipping agent, says all but one of his barrel import requests have been approved.And Argentina is allowing the official peso exchange rate to devalue, thus easing inflation’s bite on exporters.In the end, foreign wine investors have to learn the lesson of Kendall-Jackson, and understand that Argentina is cheaper because life is more difficult there.As they say: you can’t have your cake and eat it too.
Ayer el doctor Sergio Berni nos hizo saber que la guerra contra el narcotráfico está perdida, no solo aquí sino en el mundo. Los gobiernos insisten en querer terminar con los narcotraficantes, y su número parece aumentar. Se mencionó un antecedente verídico: la Ley Seca o prohibición del alcohol fracasó en Estados Unidos, y parece que siempre que exista gente ansiosa por beber alcohol, consumir drogas o fumar cigarrillos, prevalecerá la Ley de la Oferta y la Demanda: si la gente no se convence de los aspectos negativos del consumo excesivo de los mencionados productos, el Estado no podrá impedir. Algunos narcotraficantes serán descubiertos, pero aparecerán otros a cubrir el mercado. Los países seguirán dilapidando recursos humanos y económicos para derrotar a un enemigo invencible, como resulta siendo el anhelo irrefrenable de alcoholizarse, fumar tabaco o drogarse. En Perú la cultura autoriza el consumo de ciertas hierbas que ayudan a la gente a sentirse mejor y superar problemas físicos causados por vivir en zonas muy elevadas respecto del nivel del mar. Y también se dice que han fracasado los países donde se legalizó el consumo de drogas, tipo Holanda.
Como Sergio Berni es médico, sabe de lo que habla. Aunque uno sospeche quiera minimizar el fracaso de la lucha contra los narcos, por razones políticas. Esto se vincula con la educación de la gente: es posible ayudarla a no incurrir en excesos, en forma eficaz, recurriendo a sistemas que han dado resultado en muchos países del mundo, con costo económico casi cero. Por eso, se lucha con éxito contra el alcoholismo, el tabaquismo y de esa forma, sería posible evitar que el narco trafico aumente, educando a la población. No es fácil, pero sí posible. De hecho, en USA, Alcohólicos Anónimos fue inventada por un par de drogadictos hospitalizados que decidieron era posible dejar el “vicio” y lo lograron en gran medida, ayudando a través de un sistema de red social, a que la gente siga un programa sencillo que consiste en diversos pasos. Este sistema de AA ha ayudado a mucha gente y el método o sistema se ha ido repitiendo, al estilo norteamericano, y salió al exterior, debe ser conocido y quizás usado en la gran mayoría de los países.
Me consta que el sistema funciona respecto al tabaco: en Buenos Aires, desde FER (fumadores en recuperación) pude dejar de fumar nueve años y medio atrás, aunque nadie puede estar seguro de no recaer, si no ejercita su voluntad en forma simple. Y el mejor método es continuar yendo a estos grupos de ayuda mutua, que necesita de fumadores y no fumadores, para seguir existiendo. Si nadie fumase, los grupos no tendrían sentido, y si todos fumasen, sería un hábito muy difícil de querer abandonar. Fumar no sería una enfermedad, sino un mal hábito que consiste en no respirar el aire mas puro posible, y de esa forma evitar que el cuerpo funcione bien. Igual sucede con exceso de drogas del narcotráfico, o con alcoholizarse en forma excesiva. El aprendizaje es voluntario, esos grupos no cobran dinero y aceptan a todos. Quien desea abandonar esos malos hábitos puede usar el sistema de fortalecer la propia voluntad para abandonar las drogas, el alcohol o el tabaco.
Es cierto que cuesta esfuerzo individual, nadie deja de fumar, drogarse o alcoholizarse gracias a otros, sino en virtud de ejercitar la propia voluntad, sumada a la creencia de que los hábitos malos pueden modificarse. Y el sistema funciona, y supongo funcionará para siempre, aunque nunca todos dejarán el deseo de drogarse, alcoholizarse o fumar. Porque son decisiones y hábitos personales, una experiencia de cada persona que termina con la muerte, y no es transmisible en forma directa a las generaciones futuras. Cada uno debe luchar para vivir mejor su propia vida y elegir. Si uno teclea en Google, puede enterarse que F. E. R. en Buenos Aires, nos reunimos lunes y jueves de 18,30 a 20 hs., y las reuniones están abiertas y gratis para todos, fumen o hayan fumado o no fumen. También puede conseguirse datos para combatir alcohol, drogas u obesidad, por internet. Vale la pena intentarlo, sin fumar se respira mejor y se ahorra dinero. Igual imagino sucede con los excesos de narcóticos, alcohol o demasiado peso. Obviamente, el doctor Berni lo sabe, y cuando narra que la guerra contra el narcotráfico se perdió a nivel mundial, significa que también la guerra contra el hambre esta perdida a nivel mundial estuvo desde siempre perdida, en el sentido que siempre habrá un porcentaje de gente desnutrida. Sea por falta de alimentación sana, o por excesiva ingesta de sustancias dañinas, que no permiten al cuerpo humano recuperarse usando sus sistemas defensivos. Y a la larga, morimos, pero la humanidad se sigue reproduciendo y surgen niños sanos, que parcialmente pueden caer víctimas de esas sustancias, y podrán superar esas debilidades de carácter temporarias mediante la mejor receta: ejercitar la propia voluntad. Cosa factible, porque en eso consiste acudir regularmente – como prioridad absoluta – a los grupo de ayuda, e insistir hasta lograr el objetivo. Si yo pude, usted puede, parece el slogan, y es cierto.
http://opinion.infobae.com/jose-anchorena/2013/11/11/malas-ideas/ induce a creer que nos desgobiernan adrede, para enriquecerse desde el Poder.
2. ARGENTINA’S YPF SEES DEAL WITH CHEVRON ON SHALE DEVELOPMENT BY END OF YEAR (Platts Commodity News)By Carlos MauleonNovember 6, 2013Few are willing to speak up in favour of Argentina, given a long list of questionable economic decisions made by the current government. But whatever you may think of Argentina, its leaders and its policies, you should consider that despite all of the criticism and rhetoric from the holdouts, US judges, the IMF and the IIF, the one good decision its leaders made was to aggressively restructure Argentina’s debt back in 2005.Now even that may be thrown by the wayside if either the Supreme Court rejects hearing the case brought against them by the holdouts or accepts the case but supports the appeals court’s recent ruling. The outcome could very well turn back the clocks to December 24, 2001, a day both Argentina and 93 per cent of its creditors would rather forget; but it would also establish a poor precedent for the chances of effectively concluding any future sovereign debt restructurings.The fundamental argument supporting Argentina’s case is simple. When the “bid – offer” gap between debtors and creditors is massive, there is no real path to a negotiated solution. When the potential losses are huge, the stakes so high and the solutions so far apart, the chances are that a forceful twist of hand is necessary to ultimately settle the issue.Undoubtedly this was the case with Argentina. Its decision to bypass a creditors committee, the implementation of the Ley Cerrojo and the terms of the Exchange which resulted in one of the largest nominal and net present value haircuts in sovereign debt restructuring, combined to inflict significant economic pain to Argentina’s thousands of creditors both institutional and retail.But the question is, did it have a better choice? Not really.Looking at Greece supports this point. The Greek restructuring was ultimately as coercive, if not more so, than that of Argentina. Once again, the bid – offer gap between the country and its creditors was massive. The anticipated nominal and net present value losses to the creditors were irreconcilable assuming the end game was to truly set Greece on a challenging but ultimately sustainable economic path.Detractors will argue that Greece entertained a negotiated solution with the IIF lead creditor group. True. But let’s look at that process and the outcome.Left alone to its colossal debt to GDP ratio, fiscal deficit and downward spiralling economy, Greece would have had to default, leave the EU and force creditors to incur nominal and NPV losses significantly higher than Argentina or any other country in history.Fortunately for Greece (and its creditors) the country is a member of the EU and during its meltdown the dynamics of the European crisis placed it at the centre of a potential EU implosion, given imminent contagion spill-over to Spain, Portugal and more importantly Italy. The Troika (the EU, IMF and ECB) directly or indirectly provided Greece with an infinite amount of resources (loans, guarantees, bank liquidity) to avoid default while simultaneously pushing for a not so voluntary solution to avoid European disintegration and bring suicidal markets to calm.Nevertheless, the Troika’s support combined with bilateral negotiations with the IIF proved insufficient to avoid a coercive restructuring process. Just think how the now famous judge Griesa would react to unilaterally back-dating collective action clauses into a fiscal agency agreement that allowed the issuer to essentially cram down every creditor under new terms. This is precisely what the Greek government did with all of the bonds issued under local law (86 per cent of the total bonds outstanding). It makes Argentina’s Ley Cerrojo look like amateur hour.For all the months of tedious tri-lateral negotiations (including a short-lived agreement in July 2011 with the IIF that severely over-estimated Greece’s capacity to pay) what triggered a final agreement was Chancellor Merkel and President Sarkozy’s ultimatum to the IIF on the weekend of October 27, 2011. The European leaders threatened a recalcitrant IIF with an exponentially higher nominal and NPV loss or it would lose their support (in the form of billions of dollars of subsidized loans to Greece) in which case creditor losses would have exceeded 95 per cent. The chancellor and the president did not negotiate. Fed up with the impasse between the parties and the potential for EU implosion, they issued this ultimatum to force an agreement that otherwise good faith negotiations would have never have achieved. A quote from Chancellor Merkel summarises the dynamics of the discussions: “We really made only one offer,” Chancellor Merkel told reporters after the summit. “The bank delegates took that back to their representatives. And this offer was specified in such a way – and we said that it’s our last word – that they took it up.”So yes, Argentina’s restructuring was tough on creditors. But given the gap between the parties, the restructuring process was adequate and the outcome reasonable in light of Argentina’s economic circumstances. The argument that bilateral negotiations would have helped bridge the gap is not supported by the Greek experience as the events and parties involved in this yet-to-conclude restructuring saga can confirm.Some 93 per cent of Argentina’s creditors have licked their wounds and moved on. The holdouts are threatening to unwind the one good thing Argentina achieved through means that are arguably less coercive than those used by Greece with the complicity of the EU, the IMF and the ECB.The market is short a global legal framework for sovereign debt restructurings and unfortunately the IIF guidelines underestimate the difficulties when the parties are miles apart. In both instances (Argentina and Greece) these guidelines underestimated the reality that the losses required to truly fix the problem (versus punting it) were much greater than what creditors would have been willing to accept voluntarily.Unfortunately, the rhetoric and economic policies of the Argentine government post restructuring muddle the justification of their approach and provide ample ammunition for the holdouts, the courts as well as public opinion to throw the country under the bus.But be wary when the holdouts argue for the unequivocal need for good will negotiations. They may shield their motives behind this noble cause but they too know better and we should all know that they would easily throw everyone else under the bus as long as their agreement generated them exponential returns.Carlos Mauleon was a managing director and head of Latin America investment banking and DCM at Barclays Capital from 2001 to 2011. He lead the team at Barclays that helped implement both the 2005 and 2010 Argentine exchanges.2. ARGENTINA’S YPF SEES DEAL WITH CHEVRON ON SHALE DEVELOPMENT BY END OF YEAR (Platts Commodity News)By Charles Newbery6 November 2013Buenos Aires (Platts)–6Nov2013/1229 pm EST/1729 GMT Argentina’s state-run energy company YPF said Wednesday it expects to close an agreement with Chevron by the end of 2013 for a shale development project, unleashing additional funds to boost oil and natural gas production.“We are expecting a final closing by year end,” Chief Financial Officer Daniel Gonzalez said on a conference call with investors.The agreement will utilize the remaining nearly $1 billion of the $1.24 billion Chevron has committed to invest in the development of a 5,000-acre tract targeting the giant Vaca Muerta shale play. Chevron has already invested $300 million in the project on the Loma Campana block in the southwestern province of Neuquen.YPF started drilling for shale resources there more than a year ago, and ramped up production to 12,934 b/d of oil equivalent in the third quarter from 4,000 boe/d at the start of the year. Q3 output included 7,887 b/d of crude, 2,560 b/d of natural gas liquids and 0.4 million cu m/d of gas.With Chevron’s investment as well as cash flow and new financing from the capital markets, YPF expects to drill more than 150 wells for shale resources in 2014, Gonzalez said. That would be up from the 100 wells the company expects to have drilled by the end of 2013.Gonzalez declined to forecast shale production growth for 2014, saying the information won’t be available for another month or so when the company finalizes its 2014 budget.He said YPF probably wouldn’t meet its “aggressive targets” of a 4% increase in overall oil output and 1% in gas this year compared with 2012, but said he expects faster growth in 2014, helping pull the company further out of a decade-long decline of 6% annually.“We are showing solid, sustainable growth,” Gonzalez said.The dwindling production was a main reason the government took YPF under state control in May 2012 through the seizure of 51% of the shares from Spain’s Repsol. The government said Repsol hadn’t been doing enough to turn around the decline.Now under state control, YPF’s crude production rose 2.5% to 235,100 b/d in Q3 compared with the year-earlier period, while gas production went up 2.6% to 35.6 million cu m/d. When compared with Q2, oil production increased 3% and gas by 7.8%, it said.Gonzalez said the increase was driven by conventional and unconventional developments. Conventional crude production rose 1% in Q3 on the year and 2% compared with Q2, while unconventional crude rose 93% on the year and 46% on the quarter, he said.“There is still plenty to do on the conventional side as we develop the unconventional,” he said.YPF entered another partnership deal with Dow Chemical’s Argentine unit in Q3 to develop a shale gas pilot on the El Orejano block with a combined investment of $188 million.Gonzalez said the agreement is “another milestone in our objective to profitably develop the shale, monetize our resource base and have the country return to oil and natural gas self-sufficiency.” LIGHT CRUDE PRODUCTIONGonzalez said Argentina is running a scarcity of light crude production and an excess of heavier crudes. This is putting strain on refineries that mostly process lighter crudes, with imports rising in recent months.He said the situation will change as shale oil production increases because most of it so far is light crude.YPF is not alone in the unconventional push. Apache, ExxonMobil, Pan American Energy, Shell, Total and other companies are in the first phase of drilling to test for shale and tight gas production potential, boding well for a recovery in national production.“The companies are six to nine months behind YPF but they are heading toward a similar trend,” Gonzalez said.Argentina’s oil production has dropped 36% to 540,000 b/d and gas has fallen 20% to 114 million cu m/d over the past decade, largely because of limited investment, few finds and maturing reserves.Yet with the discovery of huge shale potential in 2010, investment has been returning. Argentina is estimated to hold 27 billion barrels of shale oil and 802 Tcf of shale gas, far more than its 2.5 billion barrels of proved conventional oil reserves and 12 Tcf of proved conventional gas reserves.The government has come out with incentives to spur investment. It has raised the wellhead price of gas from new developments to $7.50/MMBtu from about $2.30/MMBtu, and it has made it possible for companies investing more than $1 billion over five years to export 20% of their production and do as they wish with the proceeds. That skirts a requirement to repatriate all foreign earnings.“Natural gas has become a very profitable business for us given the new pricing scheme,” Gonzalez said.YPF said its average price of gas more than doubled $3.91/MMBtu in Q3 from $1.67/MMBtu a year earlier.The higher price of gas as well as of diesel and gasoline at the pump are helping improve cash flow, Gonzalez said.YPF is relying on cash flow to fund 80% of a plan to invest $37.2 billion through 2017 to increase oil and gas production 32%.Gonzalez said he expects the investment pace to be similar or higher in 2014 than the expected $5 billion-$5.5 billion this year.He said the company has $1.2 billion in cash on hand for investment as well as the $1 billion due from Chevron, plus untapped lines of local credit and the possibility of selling bonds abroad. The company sold $150 million in notes last month at a price to yield less than 8% annually, he said.“We will be pragmatic and opportunistic” in tapping the global credit markets, he said. GROWING RIG FLEETGonzalez said YPF will continue to increase its rig count, albeit at a slower pace.YPF has ramped up its fleet to 63 from 23 a year and a half ago and expects to reach 66 by the end of the year. More rigs will be ordered at a tender to take the total to 75 by the end of 2014, Gonzalez said.“We will continue to increase our rig count, but not so aggressively,” he said.===============================================
3. FALKLAND ISLANDERS ELECT NEW LEGISLATURE WITH OIL DEVELOPMENT, ARGENTINA ITS TOP CHALLENGES (The Washington Post)By Pola OloixaracNovember 7, 2013BUENOS AIRES — After a decade in the public eye, Cristina Fernández de Kirchner has started to fade in her starring role as Argentina’s diva. With her party’s loss of key districts in the midterm Congressional elections, her dream of re-election in 2015 for a third term as president — “Eternal Cristina,” as her acolytes say — comes to an end. But she will not go away without putting up a fight.After her party, the Front for Victory, performed poorly in the primary elections in August, Ms. Kirchner set about to recapture the public imagination, though her administration was flooded with bad news: inflation is unofficially at 20 percent to 25 percent, public debt is swelling while central bank reserves are falling, and a growing discontent has created factions inside the party, which until now had behaved under the whip of “la Señora.”Ms. Kirchner needed to stir the lingering ashes of her romance with the people, who had rewarded her with 54 percent of the vote just two years ago.She gave a rare interview to a celebrity journalist, a baron of the yellow tabloids. She dropped nine kilograms. She switched from skirts to black leggings, updating the widow’s uniform she adopted after her husband, Néstor, died in 2010. Internet memes featuring Ms. Kirchner as Catwoman made the rounds in social media.Suddenly, the comeback froze. Her bespectacled face was seen, for the first time without makeup, in a dark car entering a hospital. It was as if the pop star of the movement were entering rehab.Ms. Kirchner needed brain surgery to remove a blood clot in early October; it was reported that she had fallen and hit her head. The circumstances of the fall remained mysterious, but doctors prescribed a 30-day rest period. Without her leading the charge, her candidates seemed adrift.The campaign was surrounded by scandal. A hidden camera showed a Congressional candidate, Juan Cabandié, trying to get out of a traffic ticket by arguing that he was a son of desaparecidos (the disappeared, victims of the 1976-1983 dictatorship, resurrected as moral bishops in the Kirchner board of virtue). A 22-year-old transit officer lost her job, but was rehired after the public outcry. The episode exposed an abusive political caste.Protective of her political legacy, Ms. Kirchner was careful in delaying the choice of her dauphin. She overlooked high-profile candidates such as Daniel Scioli, governor of the mighty province of Buenos Aires, whose stoicism in the face of the humiliations he suffers at her whims makes him a possible 2015 loyalist successor.As for her vice president, Amado Boudou, corruption scandals have made him persona non grata. Mr. Boudou goes every day to the presidential palace, the Pink House, but he no longer has Ms. Kirchner’s ear. “The only thing he can handle is a motorbike,” said Congressman Felipe Solá, referring to the acting president’s hobby. Mr. Solá is part of the Peronist “renewal” faction aligned with Sergio Massa, Ms. Kirchner’s former cabinet chief, an up-and-comer who has promised to pursue a market-friendly economic approach. Mr. Massa was the darling of the recent election, winning roughly 44 percent of the vote.Argentina recently negotiated a loan with the World Bank for $3 billion, which would give Ms. Kirchner’s administration some breathing room. “Under these conditions of inflation, with no anti-inflation plan and such low reserves, it would be a miracle if she makes it to 2015,” said Pablo Schiaffino, an economist who lives in Buenos Aires. “It’s like a car running out of gas.”When she was first elected, Ms. Kirchner told the country: “We deserve a new story for ourselves.” She delivered on that. Since 2008, she has woven a dramatic story line infused with villains, éminences grises and corporate powers seeking to dethrone her. With postmodernist swag, the narrative flew free from accountable issues: recently, after a train crashed in the Once Station, the government announced that it was taking over the railroads. The Peronist party had nationalized them in the 1940s, and privatized them in the 1990s. The party’s position swings to the left and to the right, but the train cars are the same as in the 1940s.Ms. Kirchner aspires to go into history as Argentina’s biggest reformer, and some of the legislation passed on her watch supports her case, including the Universal Child Allowance (a stipend for poor families), gay marriage laws and more money for scientific research and university education. She could try to position herself as the leader who never cut back on welfare-state spending and propel herself to a glorious comeback in 2019, becoming the country’s populist icon of the 21st century, overshadowing Evita Perón.But the economic clock is ticking. If Ms. Kirchner manages to sustain the bloated state spending two more years, she’ll secure the glory — and let the one who replaces her worry about paying the bills.Pola Oloixarac is an Argentine novelist and author of “The Wild Theories.”By Shane Romig7 November 2013BUENOS AIRES—With Argentina’s bondholders increasingly worried that an adverse court ruling in the U.S. might lead to a sovereign default, one creditor is proposing a novel solution: Investors should dig into their own pockets and pay the hedge funds that are suing to collect on defaulted Argentine debt.Such an offer would be a way for Argentina to resolve a lawsuit that could force it to choose between defaulting on its current bonds or paying hedge funds the more than $1.33 billion they have been awarded by U.S. courts, something President Cristina Kirchner has sworn never to do.The proposal, floated by leading creditor Gramercy Funds Management LLC, would pay the hedge funds and more than compensate the creditors who foot the bill because their bondholdings would likely rally once the risk of a default dissipates, a person familiar with the matter said.Gramercy owns bonds Argentina issued under debt swaps in 2005 and 2010 that offered creditors about 33 cents on the dollar. Argentina passed legislation this year to launch another restructuring—on terms similar to those offered creditors in 2010—aimed at the hedge funds and other investors who still own defaulted bonds.Under the Gramercy plan, bondholders would voluntarily give up a portion of the interest payments they receive to pay the hedge funds the difference between Argentina’s debt-exchange offer and the sum they have been awarded by U.S. courts, the person said.If successful, the Gramercy proposal could push bond prices up by as much as 24%, Barclays economist Sebastian Vargas said in a report.However, 85% of the holders of Argentina’s restructured debt would have to agree in order for the Gramercy deal to be binding on all creditors. The so-called holdout creditors—those who refused to accept the terms of the restructurings—would have to tender their defaulted bonds in Argentina’s latest restructuring offer. Current bondholders would give the holdouts 20% of their interest payments over the next five years, a total of almost $1.4 billion, according to Barclays.Argentina defaulted on some $100 billion in debt during a deep economic crisis in 2001. Creditors exchanged about 93% of the defaulted debt for new bonds, but holdouts, led by hedge funds Aurelius Capital Management and Elliott Management Corp.’s NML Capital Ltd., have sued for full repayment. They have tried to seize Argentine government assets across the globe, including a naval training ship that was detained for months in Ghana last year until a U.N. tribunal ordered it released.The plan has been met with skepticism by some bondholders and the hedge funds.“The Gramercy proposal is impossible. Bondholders won’t give up future payments to pay the holdouts,” said Eugenio Bruno, an attorney at Argentine law firm Estudio Garrido, which represents several creditors that accepted the swap offers.“We have approached Argentina countless times about negotiating a resolution to this dispute. It is completely within Argentina’s power to solve this problem and we have no idea why Argentina’s debts can, should, or need to be resolved without Argentina’s participation,” an NML spokesman said. “We welcome the idea of good-faith negotiations with Argentina, but we don’t see the point of negotiating with other bondholders,” he said.A spokesman for Aurelius declined to comment on Gramercy’s proposal. A dozen other Argentine creditors either declined to comment or didn’t respond to requests for comment.A spokeswoman for Argentina’s Economy Ministry also declined to comment.Argentina has largely exhausted its legal options before a U.S. appellate court and its last hope could come down to a long-shot appeal to the Supreme Court. Lower courts have ruled that Argentina can’t make payments on its restructured bonds unless it also pays the holdouts.Gramercy is one of several investors that have asked the courts not to block Argentina from making payments on the Argentine bonds they own.3. FALKLAND ISLANDERS ELECT NEW LEGISLATURE WITH OIL DEVELOPMENT, ARGENTINA ITS TOP CHALLENGES (The Washington Post)By Paul Byrne and Michael Warren in Buenos Aires, Argentina, and Luis Andres Henao in Santiago, ChileNovember 7, 2013STANLEY, Falkland Islands — Falkland Islanders on Thursday elected a new government to manage the transition of the small British territory as oil exploration turns to development.Five members of the Legislative Assembly were selected to represent Stanley, the capital, and three for Camp, which is everywhere else in the South Atlantic territory of mostly remote sheep farms and small settlements.For the first time, the legislative positions will be full time. Those elected will receive a salary and must quit any other jobs.Officials said 75 percent of Stanley voters participated and just over 85 percent of the Camp constituency cast ballots. That was 1,046 votes in Stanley and 242 for Camp.The main issues facing the legislators are Argentina’s continuing claim to the islands and preparations for the oil wealth expected from offshore drilling. Oil exploration is already pumping millions of dollars into the economy and most islanders seem concerned about the potential for problems from rapid change brought by the new industry.“Some now, unfortunately, are dazzled by the figures being bandied about, but until commercial oil is actually flowing and royalties being received we must proceed with caution,” Jan Cheek, who is one of the five new legislators for Stanley, said in her campaign manifesto.Michael Poole, another Stanley lawmaker, believes Falklanders need to reach out more to Latin American countries to tell the territory’s position and offset Argentina’s campaign to get sovereignty.While the Islands are internally self-governing, Britain is responsible for defense and foreign affairs. Argentina claims the territory it refers to as the “Islas Malvinas” despite nearly 180 years of British control and a failed occupation 30 years ago.In a referendum in March, 99.8 percent of Falkland Island voters backed keeping their government as a British Overseas Territory.By Daniele Lepido and Manuel BaigorriNovember 8, 2013Telecom Italia SpA (TIT) unveiled plans to sell its Argentine business, assets including wireless towers in Italy and Brazil, and a mandatory convertible bond to raise a total of about 4 billion euros ($5.4 billion) to help pare debt.The carrier received a binding offer for its 22.7 percent holding in Telecom Argentina SA and its board voted yesterday in favor of the disposal, Telecom Italia Chief Executive Officer Marco Patuano said on a conference call. Fintech, the investment firm founded and led by Mexican billionaire David Martinez, is the bidder, said a person familiar with the matter, asking not to be named as the discussions are private.Patuano, taking over from Franco Bernabe, who resigned last month after clashing with top shareholder Telefonica SA (TEF), is attempting to turn around Italy’s largest phone company. The carrier’s debt was cut to junk last month by Moody’s Investors Service. Standard & Poor’s, which has said it’s likely to follow suit, will complete its review this month.“These measures show that Telecom Italia is committed to a stronger financial profile,” Patuano said on the call.Third-quarter profit fell about 27 percent to 505 million euros, missing the 524.6 million-euro average estimate among analysts compiled by Bloomberg.Net DebtAdjusted net debt totaled 28.2 billion euros at the end of September. That’s more than double the company’s market value. Telecom Italia plans to trim its debt to less than 27 billion euros by the end of the year. It aims to cut the ratio of net debt to earnings before interest, taxes, depreciation and amortization to 2.1 times by 2016, compared with 2.9 times this year.Telecom Italia fell as much as 5.6 percent and traded 4 percent lower at 69.2 cents at 9:30 a.m. in Milan, giving the carrier a market value of 12.6 billion euros.While Telecom Italia declined to give financial details for the Argentine asset, the stake has a market value of about $1.4 billion. The board authorized negotiations to conclude the deal, according to the Milan-based company, which expects the transaction to be completed in mid-2014.Argentina is one of Telecom Italia’s three core markets, along with Italy and Brazil, and accounted for about 13 percent of its 2012 revenue. The stake is through a holding company called Sofora, and the Italian carrier has a presence in Paraguay as well through its indirect stake in the Buenos Aires-based company.‘Big Picture’Still, Telefonica, which in September increased its holding in Telecom Italia, favors selling the Italian company’s Brazilian division, Tim Participacoes SA (TIMP3), people familiar with the matter have said. Tim has a market value of $11.6 billion and Telecom Italia owns a 67 percent stake.“A sale of the Argentine asset is a small part of a bigger recovery picture that Telecom Italia needs to complete,” said Carlo Alberto Carnevale Maffe, a professor of business strategy at Milan’s Bocconi University.Fintech has investments in Argentina’s sovereign debt as well as in many restructured companies including a stake in the country’s largest cable company, Cablevision SA. A former priest, Martinez lives half of the year in London and the other half in Manhattan.He built his fortune by buying and helping to restructure the debt of troubled countries and companies, including Telecom Argentina, according to public filings.Annual CouponMartinez has also invested beyond Argentina and Latin America. In September, Fintech bought almost 5 percent of Spanish lender Banco de Sabadell SA during a share sale.A Fintech spokeswoman in New York declined to comment. Martinez didn’t respond to an e-mail seeking comment.Telecom Italia said today it completed the sale of 1.3 billion euros in mandatory convertible bonds due November 2016. The securities will pay an annual coupon of 6.125 percent, according to a statement. They will be exchanged into common and savings shares.Telecom Italia said it expects to reap more than 2 billion euros from the sale of mobile-phone towers and the TI Media Broadcasting unit.By Alejandro Lifschitz7 November 2013BUENOS AIRES (Reuters)—A group of Argentine bondholders will offer creditors suing for the repayment of defaulted sovereign debt a private deal to get them to abandon their litigation, the state-run Telam news agency said.The move is being driven by investment funds from the United States and Europe, largely from the Bondholder Exchange Group, Telam reported on Wednesday night [Nov. 6], citing unnamed sources.They propose to exchange bonds on which payments have been frozen for other paper that Argentina normally honors, with better conditions than the country has already offered. The offer will be formalized next week, Telam said.The Bondholder Exchange Group, led by emerging markets investment specialist fund Gramercy, has supported Argentina in its long court battle in the United States against holdout creditors seeking to recover full payment from the bonds that the South American country stopped honoring after its 2002 financial crisis and default.The Argentine Economy Ministry could not immediately be reached for comment. No one was available to talk from Gramercy’s Greenwich, Connecticut, headquarters.“The private debt swap proposal,” Telam said, “consists of offering an exchange to the holdouts in which they drop their demand for 100 percent repayment.”Two restructurings in 2005 and 2010 saw creditors holding around 93 percent of Argentina’s debt agree to swap their bonds in deals giving them 25 cents to 29 cents on the dollar. Bondholders who did not participate in the swaps, led by hedge funds Elliott Management Corp.’s NML Capital Ltd. and Aurelius Capital Management LP, went to court in New York to seek full payment.Argentine President Cristina Fernandez has pledged to keep paying the restructured debt but has vowed to never pay more than other creditors received. That has created investor concern that the country could enter a new technical default in order to avoid paying the holdouts.The case was filed in New York under the terms of the bond documents.By Manuela Mesco And Taos Turner7 November 2013MILAN — Telecom Italia SpA Thursday said it received an offer for its Argentine division as the troubled Italian telecommunications provider looks to sell assets and reduce its massive debt.According to people familiar with the negotiations, Fintech Investments Ltd. made a $960 million offer, though that also includes various small transactions. The bulk of the deal has Fintech offering $750 million was for 68% of Telecom Italia’s shares and voting rights in Sofora Telecomunicaciones SA, a holding company that controls Telecom Argentina. The rest of the bid was for a host of smaller assets.A sale could be a part of Telecom Italia’s broader effort to raise about €4 billion by 2016 in order to slash its hefty €28.2 billion debt. For years, the company’s domestic business has shrunk in the face of fierce competition and a protracted economic downturn throughout Europe. The poor finances prompted ratings firm Moody’s to cut Telecom Italia’s credit rating to below investment-grade status in October.David Martinez, a Mexican investor based in New York who runs Fintech, could not be reached for comment.The potential sale also could mark Telecom Italia’s first major move since Spanish telecom operator Telefonica SA announced plans to become Telecom Italia’s dominant shareholder.Telecom Argentina accounted for almost €2.86 billion, or 14%, of Telecom Italia’s total revenue in the first nine months of 2013. Telecom Argentina has fixed and mobile operations in Argentina, as well as mobile services in Paraguay.Analysts have estimated the value of Telecom Italia’s stake in Telecom Argentina at up to $1.5 billion, but operating in the South American nation poses challenges and risks. Among other things, Argentina’s government micromanages public utility prices and bans companies from sending dividends abroad—potentially making the unit less appealing.Telecom Italia–whose third-quarter net profit fell 27% on the year to €505 million–said the sale of Telecom Argentina, if approved by Telecom Italia’s board of directors, could be completed by mid-2014.Speaking with analysts Thursday, Chief Executive Marco Patuano ruled out selling the company’s Brazilian division, which accounted for 26% of Telecom Italia’s revenue through September. “There’s of course a price for anything, but right now Brazil is core,” Mr. Patuano said.However, Telecom Italia’s Brazilian operations could complicate Telefonica’s efforts to take the reins of the Italian company. Telefónica agreed earlier this year to raise its stake in Telco, the holding company that owns 22.4% of Telecom Italia. As a result of the transaction, Telefónica will have effective control of the Italian giant in January.That is likely to spark antitrust problems because of the dominant position Telefonica would hold in Brazil. Yet Mr. Patuano didn’t explain how Telecom Italia might resolve such regulatory concerns without selling its Brazilian holdings.By Danilo Masoni and Leila Abboud7 November 2013* New CEO aims to strengthen balance sheet* Investment plan to upgrade networks in Italy, Brazil* Launches convertible bond worth up to 1.3 bln euros* CEO does not rule out Brazil sale but says is “core asset”* Biggest shareholder Telefonica backs the moves* No comment on dividend plansMILAN/PARIS, Nov 7 (Reuters) – Telecom Italia will sell its Argentina unit and other assets while issuing a convertible bond, aiming to raise around 4 billion euros ($5.3 billion) to stave off a credit rating downgrade and strengthen operations in Italy and Brazil.Italy’s biggest telecoms operator, which is in the middle of a strategy shift under new Chief Executive Marco Patuano, said it had received an unsolicited offer for its 22.7 percent stake in Telecom Argentina and planned to sell.Argentine newspapers Clarin and La Nacion said late on Thursday that the buyer would be investment fund Fintech, which already holds shares in Telecom Italia’s Argentine unit. Fintech could not be reached for comment after office hours.Telecom Italia also plans to sell and lease back more than 17,000 mobile towers it owns in Italy and Brazil, and unload an Italian digital broadcasting unit, aiming to reap more than 2 billion euros from these deals.The moves represent a major change for the debt-laden former Italian telecom monopoly and show the influence that its largest shareholder, Spain’s Telefonica, is having after it agreed to raise its ownership of the holding company that owns 22.4 percent of Telecom Italia.Patuano’s new strategy, which has been backed by Telefonica, aims to chart a course out of Telecom Italia’s high debts and deteriorating business in its home market by ploughing money into upgrading its creaky Italian network.The asset sales could help stave off further credit downgrades. Moody’s already cut Telecom Italia’s rating to junk last month, while Fitch and Standard and Poors have it one notch above. Further downgrades will be costly because the company has to roll over large amounts of debt next year.Moody’s credit analyst Carlos Winzer said the agency would not count the convertible bond as equity until it converts to shares in 2016, so it would not help its rating for now.“From our perspective as a rating agency, this is an immediately neutral move, and will be credit positive and strengthen the balance sheet only in year three when the bonds convert to equity.”EMPHASIS ON BRAZILThe plan also puts a renewed emphasis on the group’s Brazilian business, which sources have told Reuters that Telefonica is aiming to sell from the second half of 2014 onwards. TIM Brazil is the second-biggest mobile operator behind Telefonica’s own Brazilian unit in the growing emerging market.Patuano did not rule out a sale but said that Brazil was important to the group as shown by a new pledge to spend 11 billion reais ($4.78 billion) on network upgrades there between 2013 and 2016.“Brazil is a core asset. You can never say never. There is a price for everything, but the price for a core asset must be a price that can convince me and the board to change the strategy we set today in which Brazil is an important component.”In Italy, the group also pledged to boost investment in high-speed fibre broadband and fourth-generation mobile technology. It will target around 9 billion euros in domestic capital expenditures from 2014 to 2016.With the convertible bond of 1.3 billion euros, Telecom Italia avoided a straight capital increase, which sources earlier had told Reuters was an option. That may soothe shareholders because straight capital increases tend to be issued at a discount to the current share price, unlike the convertible bond.Robin Bienenstock, analyst at Bernstein Research, said equity investors had been expecting a cash call of up to 2 billion euros, so the fact that Telecom Italia was undertaking asset sales and a convertible bond would likely be viewed positively.“Since the mandatory convertible is at a premium to today’s share price, it is arguably a better way to raise capital than a capital increase done at a discount,” she said.Telecom Italia declined to say anything about its dividend policy in the coming years.Books for the November 2016 bond, convertible into ordinary and saving shares, will close by Friday, it said in a statement, adding that the coupon was expected to be of 5.75-6.5 percent. A source briefed on Thursday’s meeting of the Telecom Italia board said Telefonica planned to take up its share.In a separate statement, the company reiterated its financial targets for 2013, but added that “actual results may differ, even significantly, from those forecast for the whole 2013″.Telecom Italia said nine month revenues fell 7.6 percent to 20.38 billion euros, dragged lower by weakness in its recession-hit domestic business, while core profits fell 10.5 percent to 7.93 billion euros. Both were broadly in line with market expectations. Adjusted net debt stood at 28.23 billion euros at the end of September, also in line with analysts’ expectations.Telecom Italia shares closed down 4.3 percent at 0.72 euros before the announcements. They have risen 5.4 percent since January, underperforming the European telecom index, which is up nearly 30 percent.By Charles Newbery7 November 2013Buenos Aires (Platts)–7Nov2013/445 pm EST/2145 GMT Argentina plans to increase the ethanol blend in gasoline to meet rising demand and stem surging imports of the fossil fuel as car sales surge, a government official said Thursday.“We will gradually increase the blend,” Manuel Herrero Rosas, head of biofuels at the Energy Secretariat’s Department of Fuels, said on the sidelines of an ethanol conference in Buenos Aires.He said the first step is to raise the ethanol blend to 10% in 2014 from an average of 6% this year, and then take it to 12% in 2015 before gradually increasing it to a target range between E18 and E26.“We have the raw materials for the blend, we just need to make changes in the automotive manufacturing chain,” he said.Argentina launched an E5 blend in 2010, generating domestic demand for about 282,000 cu m/year, or nearly the installed cane-ethanol production capacity of 300,000 cu m/year at that time. Corn growers started producing ethanol in 2012, helping to increase total production to an expected 480,000 cu m/year in 2013 from 200,000 cu m/year in 2012.More corn- and sugarcane-ethanol plants are due to come on line to nearly double production to 820,000 cu m/year in 2014 and then to 1.08 million cu m/year in 2015 and 1.27 million cu m/year in 2016, according to government estimates. That would be enough for a 13.5% blend in gasoline in 2016, Javier De Urquiza, the national director of promotion at the Planning Ministry, which oversees energy affairs, said at the event.Herrero Rosas said that the holdback for increasing the blend more quickly is the automotive industry, which must modify its manufacturing process to produce motors that can handle higher ethanol blends. He said the government is in talks with the sector, and that an E12 blend will be tested in motors next year after implementing the E10 blend.A source at the Argentine Automakers Association said the sector doesn’t object to E10 as long as the international standard of 3.7% oxygen is enforced.GASOLINE IMPORTS SURGINGThe push to use more ethanol comes as rising gasoline consumption leads to increased imports. Car sales rose 19% in the first nine months of this year compared with the year-earlier level.This is pushing up gasoline consumption, which is on track to rise 3.4% to 46.2 million b/year in 2013 from 44.7 million b/year in 2012, and then rise another 7.6% to 49.7 b/year in 2014 and continue going up to 59.1 million b/year in 2016, according to government forecasts.The increase in demand is putting strain on refiners, which are processing crude at 90% run rates to keep pace. Oil refining capacity has remained largely unchanged since the 1990s, as price controls, regulatory uncertainty and dwindling crude production discourage investment to build the 150,000 to 200,000 b/d of additional crude processing capacity the country needs to keep up with demand.Herrero Rosas said that oil refiners could expand processing capacity to reduce gasoline imports by instead importing crude. But he said refiners find it cheaper to import gasoline under a government tax-free program than to invest in new capacity.Ethanol producers are keen to increase the blend so they can boost operating capacity and build new plants.Manuel Ron, president of Bioetanol Rio Cuarto (BIO4), said that without an increase in the ethanol blend, he is only able to operate his 82,000 cu m/year corn-ethanol plant in Rio Cuarto, Cordoba, at 75% to 80% of installed capacity.“With a higher blend, I could increase capacity,” he said on the sidelines of the event. “And this would help the country to reduce gasoline imports.”By Maximilian Heath7 November 2013BUENOS AIRES, Nov 7 (Reuters) – As Argentina gets closer to a 2015 presidential election that might usher in policy reforms making the key agriculture sector more profitable, investors are taking a new look at the country’s farmland.Argentine President Cristina Fernandez’s allies took a beating in October’s mid-term elections, shrinking her majority in Congress, ending chances of a constitutional change to allow her to run for a third term and kicking off the contest to succeed her.Most of the opposition figures known to be interested in running for the top job in 2015 are considered more market-friendly than Fernandez.She has feuded for years with the farm sector over her interventionist policies, which growers say kill profits and scare off investment in the agriculture sector.“With the mid-term election, investors’ reading of the 2015 presidential race has changed significantly … in the sense that now might be the right time to make a long-term investment because government policies might change,” said Roberto Frenkel Santillan, head of the CAIR Rural Real Estate Chamber.“We are getting more inquiries. More people are coming in to visit and look at land,” he added. “It looks like the market might slowly firm up.”Argentina is the world’s top exporter of soyoil and soymeal as well as the No. 3 supplier of corn and soybeans. But growers complain that the country is not reaching its potential as a food exporter due to constant friction with Fernandez’s government.A 35 percent export tax is levied on soybeans and limits are enforced on corn and wheat shipments to ensure ample domestic food supplies. Argentina nonetheless suffers from galloping inflation, pegged by private analysts at 25 percent.Land prices have been driven down over the last two years, in part due to government farm policies that provide little incentive for investment.“The mid-term election that followed in October confirmed the impression left by the primary, and gave a little oxygen to the land market,” said Emir Carrillo, head of the rural real estate firm Emir Carrillo and Associates. “We are getting more calls and the market is starting to move.”Carrillo said the price of prime land in the Pampas grains belt has fallen up to 15 percent over the last two years while the price tag on marginal tracts has slumped by up to 35 percent.The U.S. Department of Agriculture forecasts Argentina’s 2013-14 soy crop at 53.5 million tonnes, with the South American country’s wheat harvest pegged at 12 million tonnes and corn seen at 26 million tonnes. (Writing by Hugh Bronstein, editing by G Crosse)By Will Lyons7 November 2013IN ARGENTINA THEY PLANT their vineyards high. In some areas, like the Andean foothills, the altitude can be a dizzying 2,000 meters, and sometimes higher. To put that into a more easily graspable European context, that is more than six times the height of the Eiffel Tower. It’s the altitude that explains the unique flavor and character of Argentinian wines. In short, the higher the vineyards the more intense the sunlight, hence the thicker the skins grow and the more acidity the grapes acquire.I have only ever seen this light from above, flying over the Andes on my way to Santiago. But speak with any Argentinian winemaker and they will wax lyrical about it. When I mentioned Argentina to wine consultant Michel Rolland, his eyes lit up as he talked about the purity of the mountain air and the intensity of the light.Malbec is the grape variety that thrives in Argentina. In the past decade its renaissance in the vineyards to the west of the country, in and around the area of Mendoza, has seen its popularity soar. Indeed, such is its ubiquity in the U.S. and Europe that if you are reading this column I have no doubt you will have sampled its glorious, floral flavors.This wasn’t always the case. A thirsty domestic market in Argentina meant that as recently as 15 years ago very few examples were exported. In Europe, Malbec is mainly limited to France. Although grown in Bordeaux, where it has been prized for its dark color, it is in the Cahors region of southwest France that one generally finds it today. There, it produces deep, black-red wines that are unapproachable and tannic when young, but then mature into luscious, spicy reds.In Argentina, I find Malbec has a smoother edge. The wines are generally softer and very generous. They give immediate pleasure: one sniff, one sip and it feels as if the inside of your mouth has been lined with velvet. I always admire their consistency; the makers have mastered the idea of a uniform, reliable taste profile and achieve a pleasant, smooth ripeness. Why Malbec performs better in Argentina can be partly explained by the climate, but Hugh Johnson, writing in his “Wine Companion,” says it could also be down to the fact that the grape was introduced from France in the mid-19th century, before France’s vineyards were devastated by phylloxera.On the flip side, however, I do struggle with the high alcohol level of these wines, and I would be lying if I said they were among my favorite reds. Too often I find them a little overpowering. But there is no doubt that when blended with either Cabernet Franc or Cabernet Sauvignon, Malbec experiences a refreshing lift.To reacquaint myself with this popular grape variety, I have recently tasted a number of examples from some of Argentina’s top estates. Mendoza is an obvious standout region, but for a little more refinement and floral flavor look for the Valle de Uco and the Upper Mendoza River, also known as the “Luján de Cuyo y Maipú.” Further north (where the temperature rises), the vineyards are planted even higher. In Salta, I found the Malbec to have a more intense, savory character. A pretty good match with Argentina’s tender, grass-fed beef or a mouthful of carbonada—a spicy stew of lamb or beef served in a large, hollowed-out pumpkin.
De la Rúa, Presidente radical que no aceptaba su fracaso, perdió el gobierno a manos de los peronistas que lo echaron. Isabelita Perón quedó de Presidenta en un país que seguía fracasando con los militares y su difunto General Perón. No quería seguir en el cargo, pero ni los peronistas ni los militares permitían que dejara el cargo. Pero el país empeoró tanto, que la apartaron del cargo y después de años de prisión le permitieron viajar a España para no ser nunca mas molestada ni investigada. Y allí sigue feliz, nadie la acusa de nada.
Cristina tiene frente a sí un muro que parece infranqueable. Argentina ha sido peor administrada aún desde que Néstor murió, y eso implica – duele escribirlo – que el país vale menos, porque se ha deteriorado. Desde las reservas del Banco Central a la imagen internacional. El mundo sabe que el cristinismo ha fracasado, y que al valer aquí todo menos que antes – midiendo a valor dólar – el tipo de cambio oficial es irreal. Eso impide exportar, facilita importar y provoca inseguridad creciente, en todos los órdenes imaginables. Para peor, faltan dos años y un mes para que Cristina deje el Poder, y se rumorea que ella insiste en su modelo cristinista bolivariano, y que es la única que decide todo. Con eso, lo sensato es esperar que Argentina siga descendiendo hasta que ella se vaya porque termina su mandato. O que alguien le haga entender que si ella se va, y queda Boudou como Presidenta, las cosas podrían mejorar. Porque a un nuevo Presidente, que como vice sacó igual cantidad de votos que Cristina, se le puede aceptar que dicte las medidas necesarias para corregir errores cristinistas y en 2015 el nuevo Presidente, de cualquier tendencia que sea, pueda recibir un país menos desgobernado. Ojo: nuestro blog viene pidiendo que Cristina cambie 180 grados desde que inició su presidencia, y antes lo había pedido igual de parte de Néstor. No somos golpistas, sino oficialistas en el sentido de querer que se gobierne paa el bien común.
Nos gustaría que Cristina diga que se equivocó porque como Presidenta no fue tan exitosa como dijo ser cuando era abogada. Y que por esa economía dirigista equivocada, Argentina se empobreció, y el valor del dinero argentino se erosionó debido a la inflación monetaria que es culpa del Estado, por dilapidar recursos destinados a lograr ella apoyo para otra re elección Presidencial 2015/19. Y además, que Boudou – su elegido vicepresidente – hizo todo lo que hizo como ministro de Economía, en particular – por instrucciones suyas, de modo que la sospecha sobre su vicepresidente terminaría, y toda la responsabilidad pasaría a Cristina, la única e indiscutida jefa del Cristinismo desde que enviudó. Esto parece imposible sin que Ella renuncie alegando razones de salud, pero como se trata de peronistas, todo es diferente. Podría seguir Ella de Presidenta, Boudou quedaría posiblemente libre de sospechas. Y el país seguiría languideciendo. Ella eventualmente se atrevería a renunciar, para no tener mas tensiones y posibilitar que su salud no empeore.
Ergo, lo ideal es que Cristina vire el rumbo, sin renunciar, pero para eso tiene que reivindicar a Boudou, explicando lo de Ciccone en cualquier forma peronista, para liberarlo de un proyecto de tener una empresa emisora de billetes argentinos cuyo dueño real se ignora. Si Cristina gobernase sensatamente, el país mejoraría bastante, y ella entregaría feliz su Presidencia, sin ser molestada ni perseguida judicialmente, porque en Argentina la mayoría en la Corte Suprema sigue siendo peronista o fue nombrada por Néstor. No será un final ideal desde el punto de vista judicial, moral y ético, pero quizás el mejor posible para permitir una transición política desde este modelo improductivo mentiroso hacia una Republica democrática pluralista como la Constitución establece. Los peces gordos no son imputables así que no van presos. La solución es un pacto entre los peronistas, y luego otro con la oposición y Lorenzetti, para que el país vuelva al rumbo correcto, sin que la Justicia condene a las cuatro o cinco personas mas equivocadas y tramposas del modelo fracasado. Sea con Cristina en el mando, pero cambiando el rumbo, o sin ella, pero con Boudou en la Presidencia, pero reivindicado por Cristina, el país estaría menos inseguro que hoy, cuando todo está incierto, y no se sabe todavía como se desfacerán los entuertos del modelo bolivariano peronista fracasado. Si ella maneja todo, un cambio favorable ES POSIBLE con ella o sin ella. Y en 2015 el mas votado de cualquier extracción política sea el nuevo Presidente por cuatro años, con opción a cuatro más.
1. GRUPO CLARIN PRESENTS PLAN TO SPLIT INTO 6 PARTS, VOWS TO KEEP FIGHTING ANTI-MONOPOLY LAW (The Washington Post)1. GRUPO CLARIN PRESENTS PLAN TO SPLIT INTO 6 PARTS, VOWS TO KEEP FIGHTING ANTI-MONOPOLY LAW (The Washington Post)November 4, 2013BUENOS AIRES, Argentina — Argentina’s Grupo Clarin announced Monday how it would break itself into six separate companies to comply with the country’s law against broadcast media monopolies.Clarin lost its four-year legal fight last week when the Supreme Court upheld the law in its entirety. But the company still calls the law unfair and says it may pursue new challenges as the government seeks to dramatically reshape Argentina’s broadcast media industry.“Grupo Clarin has decided to separate its audiovisual licenses into six different business units, each one respecting the limits” of the media law, Clarin announced. “It’s a decision forced upon us by the circumstances. We are convinced that in no civilized country can the state retroactively refuse to recognize the licenses it granted, that have years still go. They didn’t even do this in countries like Venezuela or Ecuador.”The media law limits the number of radio, broadcast television and cable television licenses that can be held by the same owner, and enables the government to auction off licenses of those that don’t comply.It isn’t clear whether creating separate business units within the same corporation would satisfy the government of President Cristina Fernandez, whose fight with Grupo Clarin’s news outlets has dominated the country’s political discourse for years.The licenses are essential to Clarin’s cable television networks, and synergy between the finances and news content of the group’s TV and radio stations, websites and newspaper are key to its power. Many government supporters want nothing less than Clarin’s defenestration as a viable opponent.The law says licenses can’t be transferred without approval, and that any changes must avoid vertical and horizontal concentrations of private media power.Argentina’s top broadcast reguator, Martin Sabbatella, celebrated Clarin’s announcement and said his agency will review it within 120 days.“Today we are all equal under the law,” he declared in a statement. “It ends that ugly sensation that many Argentines have felt, that on one side we mortals had to comply with the law like it or not, and on the other some believed that they could be above it, above the powers of the state, and that they would decide whether they would comply or not with the law.”The justices also included warnings for the government in their ruling, saying that companies giving up licenses must be fairly compensated, with oversight from a truly independent broadcast media regulator, and with a transparent and equitable distribution of government subsidies and advertising. Otherwise, the court warned, the law will only convert those surviving media companies into “government mouthpieces.”The regulatory agency is dominated by appointees of Fernandez, who has fostered a huge expansion of pro-government media in the last few years while denying government support to opposition voices. By Clarin’s count, 80 percent of Argentina’s media are now directly or indirectly beholden to the government for financial survival.But Sabbatella, who was chosen by the president, denied any lack of independence or fairness when questioned about this after the ruling.Clarin said it won’t implement the breakup plan until it has to, and simply presenting it should fend off a government takeover for now.Meanwhile, it said it plans to return to court insisting that changes be overseen by “an authority that is independent, impartial and technically competent, and that can insure transparent and equal treatment under the law, which is contrary to what is happening today.”Grupo Clarin’s six units would look like this:— Arte Radiotelevisivo Argentino, including broadcast channels in Buenos Aires, Cordoba and Bariloche; the Todo Noticias cable channel; Radio Mitre’s AM and FM frequencies in Buenos Aires and Cordoba, and FM in Mendoza; along with 24 local cable licenses in other municipalities.— Cablevision and Fibertel, which bundle Internet and Cable TV services nationwide. This unit would keep no more the legal limit of 24 cable licenses and include Metro, the local cable channel in Buenos Aires.— A third unit with 20 other TV licenses currently held by Cablevision.— A fourth unit including the group’s other signals, along with TyC Sports and TyC Max, which held exclusive rights to show Argentine football on pay TV until the government wrested control and began subsidizing “Football for Everyone.”— A fifth with FM licenses in Argentina’s second-tier cities.— A sixth with two broadcast TV stations in other cities.By Taos Turner5 November 2013Clarin Offers to Form Separate Units to Head Off Government Action After High Court Upholds LawBUENOS AIRES — Argentina’s largest media company offered on Monday to break itself up into six separate business units, the latest effort by Grupo Clarin SA to prevent the government from dismantling it under a media law the country’s top court upheld last week.In documents filed to the Supreme Court and the government’s media regulator, Clarin said it would voluntarily divide its profitable cable-television business into three companies, two of which would contain TV and radio stations.The other three companies would offer a mix of broadcast, cable-TV and radio stations around the country.There was no immediate response from the government to Clarin’s proposal.The move comes a week after the top court declared the country’s 2009 media law constitutional, ending a three-year legal battle. President Cristina Kirchner and proponents of the law say it is aimed at breaking up media monopolies by limiting the number of cable-TV and broadcast licenses one company can hold. But Clarin and government critics say it is aimed at muzzling a free press.Clarin said breaking the company up was the “least desirable” outcome, but said it was being “steamrolled under the threat of confiscation” by the government.Clarin’s divestment plan is the beginning of a lengthy legal battle. While the Supreme Court ruled that the media law was constitutional, it also called on the government to enforce the law fairly. The court, said Henoch Aguiar, a former communications secretary, “closed one door and opened five.”The fight between Clarin and Mrs. Kirchner, who has two more years in office and is barred by law from seeking another term, has dominated Argentine politics for the past few years.Clarin is by far the most influential media group in Argentina. It owns the country’s top-selling daily newspaper, and it offers cable-TV and Internet to more than a million homes and businesses in 10 provinces. Its entertainment and news programs are among the most popular in the country.In the past few years, the government has shifted nearly all its public advertising money to media outlets that provide it with positive coverage — a move the Supreme Court has condemned, to little effect.Leading newspapers like Clarin and La Nacion also say they are suffering from an ad boycott orchestrated by the government — an allegation the government denies.Clarin also alleges that the Kirchner administration hasn’t forced other major media companies to comply with the law.Grupo Indalo, for instance, which is owned by a businessman with close ties to the government, has too many broadcast licenses under the new law, according to government documents.Indalo owns the TV station C5N, which televises Mrs. Kirchner’s speeches on a near-daily basis.Martin Sabbatella, the head of Argentina’s media regulator, has said all companies will eventually be forced to comply with the law, and said Clarin was the only group that hadn’t presented a plan until now. His spokesman, Fernando Torrillate, said the government hadn’t applied the law to other media groups yet because doing so while Clarin remained intact would only increase Clarin’s market power.Clarin said it didn’t need to present a divestment plan before last week’s ruling because it had an injunction against the law.Clarin didn’t say Monday who would own its new business units. The company said it would disclose this as the divestment process evolves.By Eliana Raszewski and Charlie DevereuxNovember 4, 2013Grupo Clarin SA said it plans to divide its audiovisual assets into six units, enabling Argentina’s largest media group to comply with antitrust media legislation.The Buenos Aires-based company will present its plan to the country’s media regulator today even though it will lodge an appeal with international courts over an Oct. 29 Supreme Court ruling that the 2009 law is constitutional, Clarin said on its website. Clarin shares fell 7.6 percent to 17 pesos at 1:05 p.m. local time.“We are forced to do this under the threat of confiscation,” Clarin said in the the statement. “This violates the rights not only of Clarin but also of millions of people to be able to access the media and services they freely choose.”Media regulator Martin Sabbatella said on Nov. 1 that authorities had begun to value Clarin assets in preparation of a forced sale as the group hadn’t presented its own divestment proposals within time limits established by the legislation.“We need to study the plan to see if it complies with the law,” Sabbatella said on CN23 television channel today.The seven-member Supreme Court voted to overturn an appeals court ruling that the law limiting media ownership violated the constitution. Clarin shares have dropped 39 percent since the day before the Supreme Court ruling.President Cristina Fernandez de Kirchner, who pushed the law through Congress, said the legislation seeks to democratize the media and avoid monopolies. In a 392-page ruling, the court said the government should compensate license owners for the loss of their rights.‘Favors Freedom’The law “favors freedom of expression by preventing the concentration of the market,” the court said in a statement accompanying its ruling.Fernandez, 60, and her government have clashed frequently with Clarin and its owners since 2008, when the government accused the group’s flagship newspaper of biased coverage during a four-month protest by farmers opposing plans to increase export taxes. The government has promoted campaigns against the media group with phrases such as “Clarin Lies.”To comply with the new limits, Clarin’s cable TV operator Cablevision SA will have to reduce to a maximum of 24 the 158 licenses it holds across the country and pare its market share to 35 percent from 47 percent, according to the company.Clarin also owns 10 radio stations, four broadcast TV channels and Internet providers. The company posted second-quarter revenue of 3.3 billion pesos ($560 million), an increase of 22 percent from a year earlier.By Laurence FletcherNovember 4, 2013(Reuters) – U.S. hedge fund Aurelius Capital Management, which will take a stake in Co-op Bank under a rescue plan for the British mutual lender, is also protagonist in a lengthy and bitter court battle over Argentina’s debt default.The New York-based investment firm is among a group of activist investors who will swap bondholdings for equity in Co-op Bank, which has long promoted a commitment to ethical business practices to attract customers.Aurelius, which will be Co-op Bank’s largest hedge fund shareholder under the plan detailed on Monday, has a record of litigation to resolve its disputes.This includes the battle to force Argentina to repay $1.33 billion following its default in 2002, after funds refused to take part in two debt restructurings.Aurelius has fought alongside NML Capital Ltd, a unit of Elliott Management Corp, another high-profile activist which secured the detention of an Argentine ship in Ghana last year to press its demand to be paid some of what it is owed.However, a U.S. appeals court rejected on Friday their attempt to have a stay lifted on an order requiring Argentina to pay the $1.33 billion.Aurelius has also recently been involved in a legal battle over its investment in publisher Tribune Co.Under the restructuring plan, mutually-owned Co-op Group’s stake in the bank will be reduced to 30 percent, with no other party holding more than 9.9 percent.Twelve hedge funds will hold around 35 percent collectively with Aurelius having the biggest stake. The funds will have the opportunity to exit following a planned stock market flotation of the bank in 2014.A spokesman for the group of 12 hedge funds, including Aurelius, declined detailed comment.The change of control at Co-op Bank, which hit trouble after running up big losses on commercial property lending, shows how specialist investors in “distressed” debt operate in situations that other investors judge too risky or too complex.“They will lend money to stressed businesses, participate in their restructuring and emerge as shareholders post-reorganization,” said one hedge fund investor, referring to two other hedge funds that will take equity stakes in Co-op Bank, Beach Point and Canyon.Beach Point, which manages $6.7 billion in assets and looks for what it calls “complex and misunderstood opportunities”, is headquartered in Los Angeles and headed by Carl Goldsmith and Scott Klein, who worked together at PostAdvisory Group.Also prominent among Co-op Bank’s owners are Connecticut-based Silver Point Capital.By Anthony Esposito and Fabian CamberoNovember 4, 2013Nov 4 (Reuters) – Barrick Gold Corp’s decision to mothball its huge Pascua-Lama project on the border of Chile and Argentina has highlighted startling divergences between the two South American countries over mining and energy investment.In a role reversal of sorts, nationalistic Buenos Aires is championing the now-dormant Canadian-owned project, while stricter environmental norms in business-friendly Santiago paved the way for the project’s suspension.Last week’s announcement by Toronto-based Barrick Gold Co was a blow to Argentina’s government at a time when it is seeking to attract tens of billions of dollars to develop its shale oil and gas resources.“Even if the cancellation isn’t specifically related to Argentina’s economic policies, it’s still bad news” for the Argentine economy and the government, said Ignacio Labaqui, an analyst with Medley Global Advisors.The estimated $8.5 billion project, already about 50 percent complete, had enjoyed the support of President Cristina Fernandez’s leftist government, which is trying to change Argentina’s reputation for intervention, nationalistic rhetoric and runaway inflation.Aiming to distance itself from the decision, her government said neighboring Chile was responsible, alluding to a court decision ordering the world’s largest gold miner to suspend building Pascua-Lama in the spring due to environmental harm.“The delays the project is suffering are a product of legal conflicts Barrick has in Chile that prompted the Supreme Court there to get involved after indigenous communities filed complaints,” Argentine Planning Minister Julio De Vido said in a statement. “This situation has nothing to do with the project’s conditions in our country.”Pascua-Lama has also been plagued by cost overruns and a sharp drop in bullion prices, and policies in Argentina or Chile did not directly trigger Barrick’s decision.“The decision to temporarily suspend construction was primarily based on economic factors, including a prolonged period of lower metal prices,” Barrick spokesman Andy Lloyd told Reuters. “While the project faces a number of outstanding legal and regulatory issues in Chile, the regulatory system itself is strong and the requirements on the project are clear.”The regulatory and political environment in Argentina did not play a role in the decision, Lloyd added.Still, Argentina’s reaction to the announcement not only points to the policy priorities in Buenos Aires, but highlights a broad change underway in Chile despite its pro-business reputation.Like much of commodities-dependent Latin America, Chile is struggling to maintain export-driven economic growth while addressing heightened environmental concerns and demands that the benefits of resource development be spread more equally.The Chilean government pointed to Barrick’s violation of the terms set out in its mining license.“The difficulties they’ve had aren’t due to our norms, but rather due to the breach of the conditions outlined in their environmental permit,” Mining Minister Hernan de Solminihac told local radio Bio-Bio. “We regret the decision.”STRONGER REGULATORY TACKThe complex was one of the biggest mining projects planned in commodities-dependent Chile. It would also have been an economic boon to Argentina, Latin America’s No. 3 economy, which is grappling with high inflation and the negative impact of currency controls on investment.”Pascua-Lama, originally expected to produce up to 850,000 ounces of gold annually in its first five years, was dogged by what the company has conceded were management problems on a tricky construction project high in the remote Andes, as well as fears the project would damage glaciers and water quality.In April, a Chilean appeals court halted work at the request of a local indigenous group that said water polluted by construction ran off into the Estrecho River.The complaint said high concentrations of arsenic, aluminum, copper and other elements have been found in the water near Pascua-Lama. Barrick denies it polluted the river.Chile’s new environmental regulator and Supreme Court subsequently also froze construction, setting the stage for last week’s decision by the company to stop work indefinitely. Barrick said it intended to resume the project, on which it has already spent $5 billion, when conditions warrant.Barrick’s decision is likely to galvanize environmental groups in Chile, encouraging them to take on more mega mining and energy projects they deem unsound.At stake is a third of the world’s copper production and billions of dollars in investment.“Pascua-Lama marks a before and after for mining because of the conflicts that arose with local communities,” said Juan Carlos Guajardo of CESCO, a mining think-tank in Santiago.Public sentiment in Chile, the world’s top copper producer, is strongly against the private mining industry. Around 83 percent of Chileans say they favor nationalizing copper, according to a CEP survey published last week.Although business-friendly Chile is highly unlikely to follow the nationalizations of neighbor Argentina, Pascua-Lama illustrates that private miners need to be especially cautious and follow environmental law to the letter.Dealing with these tensions is one of the major challenges awaiting Chile’s next president. Polls show that Michelle Bachelet, the center-left former president, holds a wide lead and might attract enough support to win outright in the first round of voting on Nov. 17.A BLOW TO ARGENTINA’S MINING DREAMSAcross the Andes, Argentina hopes to emulate its mineral-rich neighbors and position itself as an attractive destination for foreign investment in resources to supplement its powerful agricultural export industry.Pascua-Lama was Argentina’s main foreign investment project after Brazil’s Vale halted a $6 billion potash project early this year because of higher costs fueled by inflation.Fernandez, who is convalescing after an operation to remove blood from the surface of her brain, had a sobering setback in last month’s mid-term elections.Despite strong pro-environment sentiment in Argentina, Fernandez vetoed a glacier protection law in 2010 in a nod to mining and oil projects such as Pascua-Lama, on the grounds the legislation would hamper provincial economies. Argentina’s Supreme Court eventually upheld the law.Last year, foreign direct investment in Argentina amounted to only about 2.6 percent of gross domestic product, whereas it accounted for 11.3 percent in Chile’s far smaller economy, according to the United Nation’s regional economic body.By Charles Newbery4 November 2013Argentina’s government this week could announce further measures to arrest capital flight as reserves continue dwindle and the economy worsens.The central bank’s foreign reserves dropped 4% in October to $33.4 billion, taking the decline in the first 10 months of this year to 23%. They have dropped 37% from a record $53 billion in early 2011 despite government measures to slow the bleeding first introduced Oct. 31, 2011.President Cristina Fernandez de Kirchner has made it virtually impossible to buy dollars at the central bank-administered exchange rate, even for foreign travel. Her administration has also imposed a 20% tax on purchases made abroad using local credit and debit cards to dissuade purchases and travels, and it has limited withdrawals from local banks via overseas ATMS.Even so, travelers can still shop and withdraw dollars at the official exchange rate of 5.85 pesos to the dollar and return with dollars to trade on the black market at nearly 10.00 pesos. Foreign tourism has been steady this year.Most economists expect the capital controls, which also include restrictions on companies sending profits to headquarters abroad and paying dividends outside the country, won’t end any time soon.The government “will deepen its monetary policy with more of the same,” Martin Redrado, central bank president from 2004 to 2010, said last week. The government will “look for dollars wherever they may be.”This could involve increasing the 20% tax on using local credit and debit cards abroad, and possibly hiking withholding taxes on exports.If nothing is done to contain the level of reserves, they are likely to fall further, IERAL, an economic think-tank based in Cordoba warns. Since hitting a record 17.7% of GDP in 2007, the reserves have dropped to 6.7% of GDP this year and could reach 3.6% in 2015.CFK had sought to rebuild dollar supplies through a June-September amnesty allowing companies and individuals to bring in undeclared funds without tax penalties. The amnesty, which has been extended until the end of the year, snared only $379 million in the first round, far less than the $4 billion goal.In a new effort to bring in dollars, the government announced Friday it plans to sell up to $1 billion in 3-year, dollar-denominated bonds paying 4% annual interest. The Argentine Economic Development Savings Bonds (BAADES) initially were offered through the amnesty, but to little success.Now they will be marketed to investors who want to bring declared funds – held locally or overseas – into the financial system. The bonds will be sold in one or more tranches, possibly from as soon as this week.The proceeds will be used to finance energy projects to help arrest declining production. Oil output has dropped by a third and gas by 20% over the past decade.The decrease, a response to low investment, maturing reserves and few finds, has led to a surge in energy imports which in turn is reducing the trade surplus, a main source of funds for feeding the central bank with hard currency to sustain the exchange rate and service the debt.The trade surplus dropped 30% to $7.1 billion in the first nine months of 2013 compared with $10.2 billion in the year-earlier period, largely because energy exports dropped 22% and energy imports shot up 25%.An automakers association will report October production, sales and exports data Monday or Tuesday.By Charles Newbery4 November 2013Buenos Aires (Platts)–4Nov2013/405 pm EST/2105 GMT Argentina’s second-largest oil producer Pan American Energy plans to invest more than $500 million in drilling for unconventional natural gas resources in the southwestern Neuquen Basin, a company source said Monday.The investment will be made “over the next few years,” the source said on the condition of not being named, citing company policy.Much of the investment will be spent on drilling 38 wells for tight gas at Lindero Atravesado, its third most productive gas block in Argentina. PAE operates the block with Argentina’s state-owned YPF as a partner.Of the planned investment, PAE is spending $154 million this year on drilling for tight gas, where $98 million will go into drilling five wells in Lindero Atravesado, the source said.PAE will target tight gas resources in Grupo Cuyo, a play also known as Cuyano that lies deeper than the giant Vaca Muerta shale play that has become the focus of Chevron, YPF and other companies, the source said.The company estimates each well could produce an initial 150,000-180,000 cubic meters of gas each day. PAE is a 60:40 joint venture between BP and China’s CNOOC-backed Bridas Corp.The $98 million expenditure also covers workovers at three existing wells at Lindero Atravesado to increase output. The block currently produces 600,000 cu m/d of the company’s 12.6 million cu m/d gas in the country, and 630 b/d of its 98,000 b/d crude.The rest of the $154 million will go into drilling two blocks operated by Total Austral, a unit of France’s Total: Aguada Pichana and Aguada San Roque. Germany’s Wintershall is another partner in the blocks.Drilling at Aguada Pichana and Aguada San Roque will focus on tight gas in Vaca Muerta, the source said.Last month, Total announced plans to invest $400 million in developing two pilots for shale oil and gas resources in Vaca Muerta in its Aguada Pichana block.PAE’s projects are the latest aimed at putting Argentina’s estimated wealth of unconventional resources into production. The country is thought to hold some of the world’s largest shale resources that can turn it from a net energy importer to a net exporter over the next decade.So far, YPF is the only company to put the shale resources into production, with output reaching an average of 13,000 b/d of oil equivalent in September. YPF has entered partnership agreements with Chevron and Dow Chemical to put the resources into mass production.4 November 2013Hundreds of Argentines protested on Sunday (Nov. 3) by sea and land against Uruguay’s decision to increase the output of a pulp mill located in the border between both countries. Dozens of Gualeguaychú residents drove their cars along the bridge that connects Argentina to Uruguay’s Fray Bentos city with “No pulp mill” signs. Several ships sailed in the Uruguay river waving flags “Botnia (UPM) kills” and “Botnia pollutes”.The protest took place only days after Montevideo gave the green light to environmental controls proposed by Finnish UPM to increase its pulp mill plant output. Argentina and Uruguay are involved in a bitter confrontation over the activities of UPM over the banks of the Uruguay river, which marks the border between both countries, as Buenos Aires claims the pulp mill pollutes the water.The conflict erupted a decade ago after the Uruguayan government authorized the construction of the pulp mill, an action that sparked a legal and diplomatic brawl between Buenos Aires and Montevideo. It was settled in 2010 after The International Court of Justice ruled the pulp mill could operate, but forced countries to check pollution on the river. However, the dispute was reignited in September after Uruguay’s President José Mujica authorized UPM to increase its pulp output from 1Mt to 1.1Mt per annum. Argentina said the decision violated the court ruling, but Montevideo dismissed the allegations.Last month, Argentina unveiled a report showing pollution in the Uruguay river and asked Montevideo to step back in its decision to increase output. Gualeguaychú played a key role in the conflict as thousands of residents blocked many border crossing points with Uruguay from 2005 until 2010. Argentina is the fourth largest market for Uruguayan exports, with US$500mn in imports in 2012, while Uruguayan imports from its neighbor reached US$1.61bn last year.
4. ARGENTINA ECONOMY: QUICK VIEW – INDUSTRIAL OUTPUT FALLS (Economist Intelligence Unit – ViewsWire)5. ARGENTINA AND SWITZERLAND AGREE TO PUSH THROUGH TAX EVASION TREATY (Dow Jones Institutional News)8. MALBEC GAINS INTERNATIONAL FOLLOWING: ARGENTINE SUN BRINGS OUT BEST IN BORDEAUX BLENDER (Chicago Tribune)By Simon Romero and Jonathan Gilbert6 November 2013RIO DE JANEIRO — Argentina’s government has found a trove of secret documents from the military dictatorship, which held power from 1976 to 1983. The discovery provides rare insight into the persecution of intellectual figures and efforts then to deal with inquiries into human rights abuses during the Dirty War, when as many as 30,000 people are thought to have been killed or disappeared.Argentina’s defense minister, Agustín Rossi, singled out a blacklist of 331 actors, musicians, writers and journalists when he announced the discovery of the documents on Monday night in Buenos Aires. The documents, which he said were found last week in the basement of the air force headquarters, largely involve detailed minutes of meetings by the dictatorship.”We welcome this,” said Estela de Carlotto, president of the Grandmothers of the Plaza de Mayo, a human rights group that searches for children seized by the dictatorship. ”It is confirmation of a repressive system, with blacklists of artists who believed in the freedom of our country.”At one point, the list totaled 19 pages of names of artists and intellectuals deemed to have subversive leanings, including the novelist Julio Cortázar and the folk singer Mercedes Sosa. The list was drawn up by the dictatorship in an attempt to block support for such figures from state bureaucrats and private news organizations.Investigators already knew about the persecution of cultural figures, largely through telegrams from institutions that fired them and from personal testimonies, said Valeria Barbuto, director of Memoria Abierta, which brings together human rights organizations born out of repression during the dictatorship.”Intellectuals had told of how they were turned down for jobs or forced into exile,” Ms. Barbuto said. ”But this is different. This reaffirms the truth of the victims’ stories. It shows the value of searching for documentation.”In January 1980, nearly four years after the coup that brought the military to power, the dictatorship had 331 intellectuals blacklisted. Mr. Rossi, the defense minister, said the dictatorship classified intellectuals on a scale of F1 to F4, with the F standing for formula. An F4, for those whom the military regarded as the most threatening, meant the person had a clear ”past of Marxist ideology, making advisable his non-entry into public office,” one document said, according to the newspaper Tiempo Argentino.Notes on the lists instructed that they not be copied or their contents divulged and that they eventually be burned. By October 1982, the dictatorship was faltering and the number of blacklisted intellectuals had dropped to 153. ”It is clear that as we came nearer to democracy, the lists began to be erased,” Mr. Rossi said.Altogether, Mr. Rossi said that the files, which were discovered Thursday in two safes, two closets and a bookcase at the air force building, number about 1,500, including the minutes of the dictatorship’s 280 secret meetings from 1976 to 1983. He said 13 sets of original documents from meetings in 1976 and 1977 show how officials sought to ”exhaustively monitor” a newsprint manufacturer, Papel Prensa.A continuing criminal investigation seeks to establish whether the executives of two of Argentina’s largest newspaper companies colluded with the dictatorship in illegally forcing the family that owned Papel Prensa to sell its shares to them and to a third company in 1976. The widow of the banker who owned the company was tortured and raped in custody after she was arrested during the dictatorship.Mr. Rossi said that it was up to Argentina’s courts to decide if the documents related to Papel Prensa had ”judicial value.”By Pablo GonzalezNovember 5, 2013YPF SA (YPF), Argentina’s largest oil company, said third-quarter profit climbed 87 percent on higher production.Net income increased to 1.4 billion pesos ($237 million), or 3.6 pesos a share, from 756 million pesos, or 1.92 pesos, a year earlier, Buenos Aires-based YPF said in a statement to Argentina’s regulator after the market closed today. That’s above the per-share profit excluding some items of 2.37-pesos estimated by Santiago Wesenack, an analyst who covers the company for Raymond James SA in Buenos Aires.President Cristina Fernandez de Kirchner’s government seized a 51 percent YPF stake from Madrid-based Repsol SA in April 2012 after the company’s output had declined at an average 6 percent rate for almost a decade. Argentina expropriated YPF to stem fuel imports that doubled to $9.4 billion in 2011 and cost the country $10 billion in 2012.“Increased sales of fuel and natural gas triggered the results,” YPF said in the statement.YPF, after securing shale partnerships with Chevron Corp. (CVX) and Dow Chemical Co., is seeking more international partners for a $37 billion, 5-year expansion plan to develop the Vaca Muerta shale formation at the world’s second-largest shale gas deposit and fourth-largest shale oil reservoir in Argentina’s Patagonia region.Dollar DebtCrude output increased 3.4 percent in the quarter from a year earlier, YPF said today. YPF’s oil and natural gas production increased for six and five consecutive months, respectively, the company said Nov. 1.YPF increased cash on hand by 1.8 billion pesos in the quarter to 6.9 billion pesos. While debt increased by 2 billion pesos in the period, the net total debt was unchanged at 19.2 billion pesos. The average cost of peso debt was 19.89 percent and 5.4 percent for dollar debt.The earnings report was released after the close of regular trading in New York. The market in Buenos Aires is closed tomorrow for a bank holiday. YPF’s American depositary receipts gained 6.8 percent to close at $21.35 in New York. The ADRs have increased 47 percent this year.YPF is scheduled to have an earnings conference call with investors at 8:30 a.m. New York time tomorrow. To access the webcast:http://www.ypf.com/InversoresAccionistas/Paginas/Home.aspxBy Mariano CastilloNovember 5, 2013(CNN) — Hundreds of secret files from the Argentinean dictatorship have been uncovered, including “blacklists” that singled out more than 300 artists, actors and writers.Among those the military junta deemed “dangerous”: novelist Julio Cortazar, singer Mercedes Sosa and actress Norma Aleandro. These three, for example, spent the dictatorship years abroad: Sosa and Aleandro in exile and Cortazar in France.These cultural figures were categorized as “F1″ to “F4,” corresponding to their perceived risk to the state, Defense Minister Agustin Rossi said Monday when he unveiled the findings. Those labeled F1 were considered low-risk, and F4s were those seen as most dangerous to the dictatorship.The works of these artists were banned or censored during the dictatorship, from 1976 to 1983.Up to 30,000 students, labor leaders, intellectuals and leftists who ran afoul of the dictatorship because of their political views disappeared or were held in secret jails and torture centers during the so-called Dirty War.The documents — 1,500 in total — are all from the secret files of the military junta, Rossi said.The files were found in the basement of the building that houses the air force headquarters, Rossi said, according to the state-run Telam news agency. The files have “historical and judicial” value, Rossi told a radio station Tuesday. ”Thirty years since the return to democracy, there may still exist documentation that can be useful” to reconstruct details from the dictatorship, he said.Hebe de Bonafini of the human rights group Mothers of the Plaza de Mayo gave credit to the military for finding the documents and making their existence known. ”There will be things that we know and things that we won’t, but the important things is that there are 1,500 unexpected files that come at an unexpected moment,” she told Telam.4. ARGENTINA ECONOMY: QUICK VIEW – INDUSTRIAL OUTPUT FALLS (Economist Intelligence Unit – ViewsWire)5 November 2013EventIndustrial production fell by 0.8% in seasonally adjusted month-on-month terms in September, and by 0.2% year on year.AnalysisThe moderate recovery in industrial output that occurred in the first half of 2013 appears to have petered out. In the second quarter industrial output grew by 3.6% year on year, the fastest rate in two years. In the third it slowed to just 0.7%. In both August and September, production actually fell. Weak automotive production, a key driver of growth in industry, has clearly had an impact. It fell by just 0.2% in the third quarter, after rising by 30% in the second, mainly in response to trends in Brazil (domestic consumption has held up better, according to the local automotive association) and to the expiry in June of the bilateral automotive accord between the two countries, which has exposed Argentina’s worsening competitiveness problem.The same competitiveness problems appear to be holding other sectors back. Output of chemicals, paper and food continued to contract in September, as did oil refining activity. The main bright spot in this picture was basic metals and non-metallic minerals production, which continued to grow briskly in September, owing to solid growth in construction on the back of large pre-election public infrastructure projects. However, construction growth will start to slow again as fiscal consolidation gets under way following the October 27th mid-term election, providing less support to industrial output in late 2013 and into 2014.5. ARGENTINA AND SWITZERLAND AGREE TO PUSH THROUGH TAX EVASION TREATY (Dow Jones Institutional News)By Shane Romig5 November 2013BUENOS AIRES–Argentina and Switzerland have signed a letter of intent to work towards a treaty covering the exchange of financial information to investigate tax evasion.The deal is the latest step by Argentina–long famed for rampant tax evasion–to reach agreements with tax havens around the world to track down fiscal information on individuals and companies suspected of bilking the treasury.A formal agreement is expected to be signed early next year and will incorporate the Organization for Economic Cooperation and Development’s Article 25 rules for avoiding double taxation and evasion, Switzerland’s ambassador to Argentina, Johannes Matyassy, said at a press conference Tuesday with Ricardo Echegaray, the head of Argentina’s tax agency AFIP.While Argentina and Switzerland already have an agreement covering double-taxation, Article 25′s clause covering the exchange of information will be the first between the two countries, Mr. Matyassy said. The agreement must be ratified by the legislatures of each country and would likely be in place in January of 2015, he said.Under the new treaty, either country will be able to request financial information from the other when tax evasion is suspected. Negotiations will continue over a system of automatic exchange of financial information, the ambassador said. The deal will also block individuals and companies from third countries from taking advantage of the laws in Argentina and Switzerland to avoid taxes, Mr. Echegaray said.Since 2009, Argentina has signed information-sharing agreements with more than a dozen countries or territories, including the Cayman Islands, Bahamas, China and Russia, in a bid to crack down on evasion. However, Argentines are long-practiced in dodging taxes, with some estimates putting the amount of undeclared funds held by Argentines overseas at over $100 billion.Argentina has offered two tax amnesties in less than five years in a bid to attract some of that hidden cash from overseas.In October, the government extended the latest amnesty until the end of the year. The amnesty, first offered in May, is designed to bring in dollars stashed overseas and to stem relentless capital flight. Argentines have grown wary of holding on to pesos due to rampant inflation and fears of depreciation in the local currency.Private economist estimate the current inflation rate to be about 25%.Those who join the latest amnesty will have the option to buy energy bonds or receive a certificate of deposit from the central bank to invest in construction and real estate.In early October the amnesty had brought in less than $400 million, well short of the billions the government had hoped for.An AFIP spokesman said there is no official information available on the current amount that has been entered into the amnesty plan.A 2009 amnesty saw 35,800 taxpayers declare about $4 billion.By Charles Newbery5 November 2013Buenos Aires (Platts)–5Nov2013/545 pm EST/2245 GMT Argentina’s state-run energy company YPF said Tuesday its oil and natural gas output rose in the third quarter of 2013 compared with the same period last year as it ramped up investment.Crude production rose 2.5% to 235,100 b/d over the period, while gas production went up 2.6% to 35.6 million cubic meters/d, YPF said in a statement. When compared with the second quarter of this year, oil production increased 3% and gas by 7.8%, it said. This was the fourth consecutive quarter of a year-on-year increase in hydrocarbon production after a decade of dropping by an average of 6% a year, YPF said.The company said the performance was even better at the fields it operates, helping to offset any production declines at fields it doesn’t operate. At its operated fields, crude production rose 3.4% to an average of 202,000 b/d in the third quarter, from 195,400 b/d a year earlier. Gas output went up 4.7% to 25.2 million cu m/d, from 24.1 million cu m/d over the same period.YPF said the production turnaround came in response to increased investment following the state takeover of the company in May 2012.Argentina seized 51% control of the company from Madrid-based Repsol in an effort to rebuild national oil and gas production, subsequently announcing plans to invest $37.2 billion through 2017. The goal is to increase hydrocarbon output 32% by 2017 through the development of maturing conventional fields with secondary and tertiary techniques, and by putting into production large shale resources.In the third quarter, YPF said it ramped up spending 94% to Argentine Peso 8 billion ($1.3 billion) from Peso 4.1 billion in the year-ago period.The company is focusing the investment on developing unconventional resources. Argentina is estimated to hold 27 billion barrels of shale oil and 802 Tcf of shale gas, far more than its 2.5 billion barrels of proved conventional oil reserves and 12 Tcf of proved conventional gas reserves.YPF said it drilled more than 30 wells for unconventional resources in the third quarter, when 19 drilling rigs were active.This allowed it to increase shale output to 12,934 b/d of oil equivalent in the third quarter, of which 7,887 b/d was crude, 2,560 b/d natural gas liquids and 0.4 million cu m/d gas.Most of the production is at a block in the southwest of the country where Chevron has joined as a partner for a $1.5 billion development project aimed at ramping up production further.YPF also entered another partnership deal with Dow Chemical’s Argentine unit in the third quarter to develop a shale gas pilot on the El Orejano block with a combined investment of $188 million. CRUDE PROCESSING DECLINESIn the downstream sector, YPF said the processing of crude at its refineries fell 4.6% to 292,000 b/d in the third quarter compared with the year-ago period, largely because an April 2 storm damaged its 189,000 b/d La Plata refinery, which is still being brought back to higher capacity.Diesel and gasoline sales rose 34% in the third quarter on the year because of higher prices and larger volumes sold, YPF said.The company said its total third-quarter revenue rose 39.5% to Peso 24.2 billion compared with the year-ago level, largely because of higher prices for new gas production. Early this year the government raised the price of gas from new developments to $7.50/MMBtu from $3.20/MMBtu.YPF said its net income rose 87% to $1.4 billion in the third quarter compared with the year-ago level.YPF said costs increased 31.4% in the third quarter on the year, led by higher crude purchases for its refineries and greater imported volumes of diesel, led by Eurodiesel. Biofuel prices and purchased volumes also rose for mixing into diesel and gasoline at its refineries, the company added.Domestic crude prices rose 0.6% to an average of $70.80/b in the third quarter from $70.40/b a year earlier, while over the same period the average price of gas more than doubled, to $3.91/MMBtu from $1.67/MMBtu.YPF produces a third of Argentina’s 540,000 b/d of crude and 24% of its 114 million cu m/d of gas, and has a 56-58% share of diesel and gasoline sales, according to industry data.5 November 2013European telecoms operator Telecom Italia (NYSE: TI) may decide to sell its business in Argentina, Spanish press reported.In Argentina, Telecom Italia is the majority shareholder of local telecoms operator Telecom Argentina (NYSE: TEO).According to the reports, the decision may be announced during TI’s board meeting scheduled for November 7.With this decision, Telecom Italia would obtain fresh funds and remove itself from an uncertain political and economic scenario, according to the reports. Companies in Argentina are currently facing difficulties repatriating profits given the strict controls implemented by the government to avoid capital flight.On the same day as the board meeting, TI also expects to approve a bond issue for a total of 1.8bn euros (US$2.42bn). With this combined strategy, TI will avoid a capital injection of 2bn euros.Telecom Italia also operates in Brazil through its mobile telephony firm TIM. According to the report, the company is not planning to sale its Brazilian operations at the moment.In September, Spanish telco Telefónica (NYSE: TEO) increased its stake in holding company Telco to 66% with a total investment of 748mn euros while Telco, in turn, holds a 22.4% stake in Telecom Italia.Rumors have been flying in recent weeks regarding the strategic direction of the highly indebted Italian firm, which had net financial debt of 28.8bn euros as of the end of Q2, according to a results release..Previous CEO Franco Bernabe had been advocating the issuing of stock to help reduce the company’s debt, but resigned after reportedly losing the support of key shareholder Telco. In September, Bernabe had said that the telco was not considering selling its operations in Brazil and Argentina and that such a move would impact the operator’s international growth outlook.TI’s South American operations accounted for 40% of the company’s revenues and 27% of Ebitda during the first half of 2013, according to TI’s latest financial results.The move to oust the executive was reportedly part of Telefónica’s plans to force Telecom Italia to sell its South American operations and avoid a capital increase to raise cash, international media reported anonymous sources as saying.8. MALBEC GAINS INTERNATIONAL FOLLOWING: ARGENTINE SUN BRINGS OUT BEST IN BORDEAUX BLENDER (Chicago Tribune)By Bill St. John6 November 2013Well-made Argentine malbec is about as delicious, juicy and smooth a red wine as there is. It tastes close to a liquid version of chocolate-covered cherries, perhaps with a hint in aroma of licorice or a slight savor of butter.Good malbec from Argentina is a plump mouthful, too, bulked up with plentiful but gentle tannins for an overall unctuous, nearly viscous feel in the mouth. Its calling card is its deep magenta-tinged color, as black as a poodle’s nose.It blends well with the cabernet brothers (franc and sauvignon), as it did in its former home of France, in the Bordeaux region. But from Argentina, it is commonly alone in the bottle; as such, it has won a steady following among red wine drinkers in this country.And then there are its prices, many offerings from $10 to $15 a bottle, with even stellar malbecs at retail for less than $30 each.Malbec didn’t start out its life on the vine with such success. Long before it became cutting edge in Argentina, it was up somewhere on the blade in France, where it has more names than a christening book.In Bordeaux, it is spelled malbeck; in St. Emilion, called pressac. Elsewhere in France, the two most popular of its several names are cot and auxerrois. Some in France call it pied de perdrix (“partridge foot”) and coq rouge (“red rooster”).It is the base (at least 70 percent by law) for the aptly named “black wine” of Cahors, a well-known wine town in southwestern France. An indication of the worldwide success of Argentine malbec is how many Cahors-based wines are now labeled simply “malbec.”In a good year — for malbec, that means a warm, dry season — it gives Cahors extraordinarily deep color and its telltale taste of black plums and tobacco leaf. But in a year with less heat and more moisture — that is, a typical year — malbec may come off tannic, even a touch vegetal.Perhaps its most successful French performance has been in Bordeaux, where it has long functioned to add color and softness to many a blend. However, after the killing frost of 1956, growers hesitated to replant it to the same measure in which it had earlier flourished.Another grape, merlot, is less susceptible to malbec’s weaknesses, namely rot and coulure, a physiological disease of the vine in which buds fail to ripen into grapes. Likewise, merlot does as good or perhaps a better job at tenderizing cabernet sauvignon’s austerity in Bordeaux’s ubiquitous blends.So, post-1956, Bordeaux saw a lot more merlot planted. And a lot less malbec. Enter Argentina.Long preceding the Bordeaux frost, around 1860, malbec emigrated from France and planted itself in Argentina. These plants were pre-phylloxera and, to this day, most Argentine malbec is raised on its own roots on more than 75,000 acres of vineyard land.In the high, dry, sunny climate of the Andes, Argentina’s malbec vines produce berries that are smaller than French malbec (with greater skin-to-pulp ratios, therefore darker color) and with riper, plusher tannins.“Malbec loves the sun,” says Pedro Marchevsky, an Argentine viticulturist and co-owner with winemaker Susana Balbo of Dominio del Plata winery near Mendoza. “It is the same sun in Bordeaux or Cahors, but in Mendoza it is a pure sun. So, it has long days and lots of radiation.”“In Mendoza, we have an average of 150 days between bud break and picking time,” says Sebastian Zuccardi, whose Familia Zuccardi winery is a producer of prodigious amounts of malbec at various levels of price. Given that a typical grapevine’s growing season is 120 days at best, “that means a month’s extra hang time for the grapes in all that sunlight,” Zuccardi adds, “much more time to develop color and flavor compounds in the grapes.”Argentine malbec fits the eating lifestyles of both South and North America. While we in the U.S. eat far less beef than Argentines do (our average 60 pounds per person a year versus their 130 pounds or so), we both share hearty tastes at table. Malbec well accompanies both diets, swaddling palates with its luxurious fruit and ample but furry tannins, a sort of “red sauce” for many a kitchen preparation.The one sort of food that both cultures share with alacrity is “American Italian,” noodles with red sauce spiked with meat.Like the United States, Argentina was settled by thousands of immigrant Italians. Many typical pasta preparations work well with malbec. Try dishes such as pasta puttanesca (a sauce of tomatoes, black olives and peppers) with a thick slice of grilled Provolone cheese set aside it, topped with a splash of green olive oil.Which is better, then, “Buon appetito” or “Buen provecho”?- – -\ \ Wines to try2012 Alamos Malbec, Mendoza, Argentina: Good, solid entry-level malbec; juicy, soft, smooth. $13-$152011 Dona Paula Malbec, Uco, Argentina: Deep color, touches of oak and spice in aroma; amazing concentration of flavor and length for the price. $152010 Bodega Raffy Malbec Grande Reserve, Tupungato, Argentina: High-end malbec from French-owned producer, very Bordeaux-like in style (brown spice, leather, wood over ripe, dark-red fruit flavors; would be twice or more the price if from France. $25-$30If your wine store does not carry these wines, ask for one similar in style and price.By Laura Molzahn6 November 2013Get ready to rumble, Chicago. Yet another brand of percussive dance arrives here courtesy of Chicago Human Rhythm Project and its artistic director, Lane Alexander. CHRP’s ninth annual “Global Rhythms” show — running Friday and Saturday at the Athenaeum Theatre as part of Dance Chicago 2013 — features the 14 men of Che Malambo, direct from Argentina, performing a 17th-century dance originated by gauchos in the pampas.The malambo is a traditionally male folk dance, a flamenco-influenced solo form that can evolve into a back-and-forth competition. But as Alexander explains it, when retired Bejart Ballet dancer Gilles Brinas founded Che Malambo in Buenos Aires a decade ago, he “took this folk tradition and contemporized it a bit, making it into more of a presentation as opposed to a ritual.” Imagine an Argentine version of Australia’s macho Tap Dogs, minus the scaffolding.For rhythm connoisseurs, the malambo represents “yet another of the apparently infinite ways people have of articulating the toe and the heel and the foot,” Alexander says. “Whether it’s Indian kathak or Argentine malambo or Spanish flamenco or Irish step dancing — there’s a virtually infinite number of ways to articulate the leg and make beautiful rhythms.”During its 90-minute show, accompanied at times by live drum, guitar and song, Che Malambo performs both the hard-hitting northern style and softer southern brand of Argentina’s national rural dance, which is definitely distinct from the better-known, more urban tango. And though malambo’s footwork resembles flamenco, the rhythms are different and the dancers take to the air more often, sometimes with hips twisting and legs flying as in Senegal’s exhilarating sabar.In another unique feature, malambo dancers sometimes wield boleadoras: leather straps with stones at each end, traditionally used like lassos to bring down cattle. Onstage, Alexander says, “they’re like drumsticks on a string,” the stones striking the floor to create rhythms in counterpoint to the dancers’ footwork. Usually performers swing the boleadoras with the hand, but sometimes they put the straps in their mouths — a variation Alexander attributes to the competitive nature of malambo. As he imagines it, “One night on the pampas somebody said, ‘I’m going to do it this way. Top that if you can!’ “Che Malambo makes its North American debut in Chicago, then hops to New York and St. Louis on a three-city tour. But Alexander is hoping to give this little-known group the CHRP bump, as he did for Japanese drumming company TAO after a 2007 “Global Rhythms” appearance. “My feeling about TAO was similar to this: This is spectacular! Why haven’t you been here before?” In 2010, TAO toured 44 cities in North America.Chicago’s Mexican Dance Ensemble opens Friday’s “Global Rhythms,” Ensemble Espanol Spanish Dance Theater opens Saturday, and a MacArthur International Connections Fund grant made many community residencies possible this year. Check out CHRP’s revenue-sharing program, “Thanks4Giving.”