Archive for 29 septiembre 2013


29 septiembre, 2013 permite calcular el grado de corrupcion internacional kirchnerista

ARGENTINE UPDATE – Sep 26 & 27, 2013

28 septiembre, 2013


Asunto: ARGENTINE UPDATE – WED 9/25 – THURS 9/26 & FRIDAY 9/27

President Dilma Rousseff of Brazil at UN delivers Stinging Rebuke to Obama on NSA Spying (Lazare)

Posted on 09/25/2013 by Juan Cole
Reuters reports on President Roussef’s speech condemning US spying on her country and on her personally:
Sarah Lazare writes at Commondreams:
In a furious critique that opened the UN’s General Assembly meeting Tuesday immediately before President Obama took the podium, Brazil’s president Dilma Rousseff blasted U.S. secret surveillance programs for violating her country’s national sovereignty, attacking its democracy, and infringing on the human rights of its citizens.
“In the absence of the right to privacy, there can be no true freedom of expression and opinion, and therefore no effective democracy,” she declared in her strongest statements yet in the fallout following revelations that the NSA had directly spied on Rousseff. “In the absence of the respect for sovereignty, there is no basis for the relationship among nations.”
“Tampering in such a manner in the lives and affairs of other countries is a breach of international law and, as such, it is an affront to the principles that should otherwise govern relations among countries, especially among friendly nations,” she charged.
“The right to safety of citizens of one country can never be guaranteed by violating fundamental human rights of citizens of another country,” Rousseff continued.
Rousseff scoffed at efforts by the U.S. government to justify broad NSA spying as a vital protection against terrorism: “The arguments that the illegal interception of information and data aims at protecting nations against terrorism cannot be sustained.”
She demanded international legal norms for protecting Brazil and other nations against these violations of privacy and reiterated her commitment to protecting domestic communications networks from U.S. interception by storing Brazilian data locally. “The time is ripe to create the conditions to prevent cyberspace from being used as a weapon of war, through espionage, sabotage and attacks against systems and infrastructure of other countries,” she said.
Her statements come after she canceled a trip to the U.S. last week over the NSA spying revelations in a rare diplomatic rift between two close allies.
Journalist Glenn Greenwald writing for Brazilian paper Journo O Globo revealed in early September that the NSA had used its powers to directly intercept the communications of Rousseff and Mexican President Enrique Pena Nieto.
In his speech immediately following Rousseff’s, President Obama did not directly acknowledgeRousseff’s criticisms.
This work is licensed under a Creative Commons Attribution-Share Alike 3.0 License
(Mirrored from
The USG Open Source Center translates two contextual pieces from the Brazilian press on President Rousseff’s cancellation of her planned meeting with President Obama this fall over the NSA spying on her personally. It also appears that as a result of the spying, Brazil will not go forward with purchase of US fighter-planes.
President Rousseff Sought Support Abroad Prior to US Visit Cancelation –
On 23 September Claudio Dantas Sequeira considers in Sao Paulo ISTO E consequences and repercussions of President Dilma Rousseff’s decision to seek international support especially from Russia prior to cancelling her US state visit. (The OSC is processing this item. LAR2013092355696739) Rousseff also checked in with former president Luiz Inacio Lula da Silva and Joao Santana, her election campaign marketing guru. Russia’s foreign minister is reported as having committed to support any Brazilian retaliation on the United States due to electronic media surveillance allegations. When she addresses the UN General Assembly’s opening meeting Rousseff will call for a new Internet governance mechanism designed to prevent invasion of privacy. Rousseff will also underscore the need for the United Nations to play a role in seeking negotiated solutions to any global crisis. The article points out that the surveillance imbroglio will make a purchase of US fighter jets unlikely. Defense Minister Amorim Views Vulnerability to Cyber Attacks –
On 22 September Tereza Cruvinel and Leonardo Cavalcanti interview Defense Minister Celso Amorim for Brasilia Correio Braziliense. Amorim outlines concern with Brazil’s vulnerability to cyber attacks as exposed by recent reports of US electronic surveillance targeting the country, and dependency on foreign technology. The country must focus on updated technological development, he argues. Foreign technology holds Brazil hostage and will continue to do so for some time. The minister also expresses concern with the sluggish procedure related to a fighter jet purchase. Amorim outlines Brazil’s border security efforts and development of cyber defense hand in hand with Argentina.


By Ken Parks
24 September 2013
BUENOS AIRES — Argentine President Cristina Kirchner may have to impose further U.S. dollar rationing on her citizens in coming months as the slide in the hard currency reserves that Argentina uses to pay its import bill and creditors shows no sign of abating, analysts say.
Argentina faces significant dollar outflows at a time when the foreign currency provided by trade, the South American nation’s only significant source of the U.S. currency, is shrinking due to surging fuel imports.
The trade surplus accumulated between January and August narrowed by 32% on the year to $6.29 billion, the government said Monday. With the last few months of the year a seasonally slack period for exports, the Kirchner administration may struggle to reach its latest target of a $10.6 billion surplus in 2013.
If the government’s past behavior is any indicator of future behavior then more belt tightening could fall on tourism and imports. Net dollar outflows from tourism rose to $4.53 billion in the first half as Argentines continued to travel and shop abroad even after the government slapped a special 20% tax on those activities.
“We believe they will need to put the brakes on the outflow of hard currency via tourism,” says Mauricio Claveri, an economist at research firm Abeceb. “The trade surplus isn’t going to compensate and there is going to be a loss of reserves.”
Deutsche Bank economist Gustavo Canonero thinks the government will likely muddle through by fine tuning the currency controls and import restrictions it has used to keep dollars from leaving the country.
“They will have to ration international reserves even more than today and that means you are going to have less imports for growth and therefore the economy will be stagnant,” Mr. Canonero said.
A spokeswoman for the Economy Ministry declined to comment.
For almost two years, Mrs. Kirchner has subjected Argentines to unpopular foreign-currency restrictions. Businesses can face long delays to import equipment and materials, which usually have to be paid for with dollars.
“We are at a very dangerous point where [additional] limits on imports will have very negative collateral effects on the economy and job market, ” says Diego Perez, president of Cira, an association that represents importers
Argentines are also banned from buying dollars to protect their savings from one of the highest rates of inflation in the Western Hemisphere, while the government doles out very limited amounts of foreign currency for tourism. Some people have turned to the black market for dollars, where they pay a 63% premium compared to the regulated foreign exchange market.
Reserves at the central bank fell to a six-and-a-half year low of about $35 billion on Friday, down 19% from the beginning of the year and well below a record $52.7 billion in January 2011.
Unable to borrow abroad due to the high interest rates lenders demand, Mrs. Kirchner has used at least $27.5 billion in reserves to pay creditors and fund public-works projects. Her 2014 budget proposal would tap another $9.86 billion for the same purposes.
The steady decline in reserves could spell trouble for Argentine stocks and bonds if investors start to question the government’s ability to pay.
The government needs to quickly stabilize reserves or risk a selloff in dollar debt like the Boden 2015 bond and debt-linked securities, says Siobhan Morden, head of Latin American strategy at Jefferies.
“The pace of decline and the level are now both a concern, especially if this pace of reserve loss continues into next year,” Mrs. Morden said.
At the current rate of depletion, reserves could drop below $20 billion in the first quarter of 2015. That could set markets up for a “moment of tension” because the central bank would have only a thin cushion of liquid assets on hand at that point, says Orlando J. Ferreres, an economist and former deputy economy minister.
“There isn’t an easy solution. These are problems that will take three to four years to fix from the moment you start fixing them,” Mr. Ferreres said.
Those problems include annual inflation that many economists say has been running at or above 20% for years as a result of the central bank printing pesos to finance government spending. Official data put economic growth at 1.9% in 2012, and the government has forecast 5.1% growth this year and 6.2% in 2014. Many economists say those projections are unrealistic for an economy hobbled by dollar shortages and inflation.
Barclays Capital economist Sebastian Vargas is optimistic that a weak economy will eventually force Mrs. Kirchner to adopt more pragmatic policies such as moderating spending and mending fences with foreign creditors.
“If the government continues with monetary financing and doesn’t change its agenda the foreign exchange reserves could deteriorate further and that would have an impact on investment,” Mr. Vargas said.
September 24, 2013
BUENOS AIRES, Argentina — A Roman Catholic priest who is serving a 15-year jail sentence in Argentina for sexually abusing a boy has been banned from performing priestly duties.
The bishopric of Moron in western Buenos Aires announced the prohibition affecting Father Julio Cesar Grassi on Tuesday.
Church officials said any further decision about the priest would await final action on his appeal in Argentina’s courts.
Well-known for persuading Argentine celebrities to donate to the Happy Children Foundation, Grassi was transferred to a maximum security prison Tuesday, a day after he began serving his sentence.
Grassi had previously been free despite charges of abusing the teenager in 1996.
He continued living across the street from the orphanage after his 2009 conviction while he appealed. Grassi was taken into custody Monday after the top provincial court upheld his sentence.
The 57-year-old priest says he’s innocent. He will now make his final appeal to Argentina’s Supreme Court from prison.
By Benedict Mander
September 24, 2013
It’s not all grim news in Argentina’s energy sector, where entrenched problems have caused fuel imports to double over the last year, sapping the country’s precious foreign exchange reserves.
Despite serious reservations about Argentina among many foreign investors, both Germany’s Wintershall and the local subsidiary of the US’s Dow Chemical have announced investments this week to explore possibilities in the giant shale formation, Vaca Muerta.
Wintershall, which is Germany’s largest oil and gas producer and a wholly-owned subsidiary of BASF, has announced that it will invest an initial $150m. If all goes well, investments could rise to as much as $3.35bn over the next ten years in its project in Vaca Muerta, which by some estimates holds the world’s second-largest shale gas reserves.
Some may think this a bold move in a country that most foreign investors are shying away from, at least until the end of the mandate in 2015 of the country’s controversial president, Cristina Fernández. But it is not the first time BASF has taken risks in emerging markets, after announcing a €10bn plan aimed at doubling sales in the Asia-Pacific region in June.
As well as Wintershall, Dow Argentina also signed a deal on Tuesday with Argentina’s state controlled energy company YPF to invest $120m in Vaca Muerta over the next year.
Still, the investments of Wintershall and Dow are a fraction of the size of the deal that YPF signed in July with Chevron, which became the company’s first international partner since the expropriation of Repsol’s 51 per cent stake last year. Chevron committed to making initial investments of $1.24bn, which could in theory rise more than tenfold.
But if more companies follow their lead, Argentina could start to reverse its increasingly unsustainable energy import bill, which last month doubled to $1.55bn, compared to $761m in August 2012.
Similarly, last week YPF started to test the waters of the international capital markets by offering to sell $150m of debt – admittedly a drop in the ocean compared to its ambitious $37.2bn investment plan in Vaca Muerta.
Much more foreign participation will be required, and much more money will need to be borrowed if Argentina wants to pull of its own shale revolution. But it’s a start.
By Pablo Gonzalez
September  24, 2013
YPF SA, Argentina’s largest company, and Dow Chemical Co.’s Argentine unit signed a final accord to invest $188 million to jointly develop shale gas at the country’s Vaca Muerta formation.
Dow will provide $120 million over a year while YPF, nationalized in April 2012, will invest $68 million to develop 16 shale gas wells, the Buenos Aires-based company said in a statement today. Dow, the largest U.S. chemical producer by sales, is YPF’s second shale partner after Chevron Corp.
Argentine President Cristina Fernandez de Kirchner’s government seized a 51 percent stake in YPF from Spain’s Repsol SA (REP) in April 2012 to stem fuel imports that generated an energy deficit of $5.4 billion this year through Aug. 31, according to figures released yesterday by Argentina’s National Statistics Institute. YPF said Sept. 20 it is planning its first overseas bond offering since the nationalization as it seeks to raise financing for a $37 billion five-year investment plan to develop Vaca Muerta.
“This agreement confirms the path we decided to take when we presented our strategic plan,” YPF Chief Executive Officer Miguel Galuccio said in the statement. “We said we needed to develop a shale gas pilot and today we are materializing it.”
Dow Chemical Executive Vice President Jim Fitterling signed the agreement that will drill wells at the El Orejano block in Neuquen province, which has the potential to produce 3 million cubic meters of gas a day, YPF said in the statement.
YPF and Chevron, the second-biggest U.S. oil company, formed a $1.24 billion shale partnership in July to tap the world’s second-largest shale gas deposit and fourth-largest shale oil reservoir at Vaca Muerta in southwestern Argentina.
By Camila Russo
September  24, 2013
Empresa Distribuidora y Comercializadora Norte SA, Argentina’s largest power company, surged to its highest level in almost two years on speculation it will receive higher subsidies from the national government.
Shares climbed for a seventh day, rallying 5.4 percent to 1.75 pesos at 3:12 p.m. in Buenos Aires, the highest on a closing basis since November 2011. The stock has more than doubled this year, the best performance on the Merval index.
Edenor climbed after regulators allowed it to report higher costs, supporting the case for more subsidies, according to Lautaro Marra, an analyst at Buenos Aires-based brokerage Bull Market Brokers. The U.S. Federal Reserve’s surprise decision last week to maintain the pace of its bond purchases to stimulate the economy has helped push most Argentine stocks higher, Marra said in a phone interview.
“The whole stock market is rising, and this news in Edenor’s balance sheet gave it an extra boost in the past week,” Marra said.
Edenor has posted yearly losses since 2009 as a decade-long cap on utility rates with estimated 20 percent annual inflation undermined the company’s profit.
The government’s decision to allow Edenor to publish its expenses came after President Cristina Fernandez de Kirchner’s party suffered election setbacks in August.
“People see a shift from the government after elections, and the expectation is there will be a change,” Alejandro Bianchi, the head of investment at Buenos Aires brokerage, said in a telephone interview. “You’re buying at a low price a power company that supplies half of Buenos Aires. There’s more room for it to go even higher.”
Standard & Poor’s rates Edenor at CCC-, nine levels below investment graDE.
24 September 2013
The economy expanded by 8.3% year on year in April-June in a return to near double-digit growth not seen since 2011.
Second-quarter GDP growth, more than 5 percentage points higher than in January-March, lifted growth in the first half of the year to 5.6%. Although the second quarter of the year coincides with the registration of the annual cereal and oilseed harvest, typically lifting second-quarter output, even on a seasonally-adjusted basis the economy racked up the fastest quarter-on-quarter growth in two years.
At an annualised rate the economy expanded by 3.6% in the year to June, all but guaranteeing GDP-linked government bond coupon payments of US$3.5bn in 2014. (The economy would have to contract in the second half of the year for growth to undercut the 3.2% annual growth rate that triggers coupon payments.) That raised the hackles of opposition legislators whose own GDP estimates based on an average of forecasts by Argentinian independent analysts point to an annualised rate below the coupon-payment trigger rate.
For the first time in over a year and a half, growth in the goods sector (8.8%) virtually matched that in services (8.4%). Goods sector growth was driven by agricultural production (26.7%)-reflecting the boost of this year’s bumper harvest-and the automotive sector, which provided the lion’s share of the impetus behind a 4.1% rise in manufacturing. The beleaguered construction sector struggled by comparison, growing by 2.2%. Services continued to be driven by banking (which grew by 24%) and by a pick-up in wholesale and retail trade (14.2%)
A sharp uptick in gross fixed investment, which grew by 16.2% (the fastest increase since the third quarter of 2011) to the equivalent of almost 23% of second-quarter GDP, provided additional impetus to the acceleration. Despite the construction sector’s poor performance half of investment was destined for the sector. The other half was directed towards machinery and transport equipment. Less positively for the balance of payments, most of the increase in investment in durable production goods was destined for imports. That meant the external sector was a significant drag on GDP in the second quarter, with growth of 4.4% in real exports outweighed by a 21.3% rise in real imports.
By Paula Diosquez
24 September 2013
Activity in the manufacturing, agriculture, and the financial services sectors were most dynamic during the second quarter of 2013.
IHS Global Insight perspective
Argentina’s official data show an increase in seasonally adjusted GDP during the second quarter of 2013, compared to the growth registered in the first quarter of the year.
The still-significant annual growth rate in domestic demand continues raising concerns because it is a result of individuals shielding themselves against inflation by purchasing goods and services.
In the next few quarters, economic activity is expected to show more moderate dynamism despite the manufacturing sector moving beyond the negative impact of import barriers, which reduced the availability of intermediate inputs. Nonetheless, economic growth will continue to be driven by private-sector consumption as Argentines try to shield themselves from observed inflation rates via consumption of durable and non-durable goods.
The National Institute of Statistics and Census (INDEC) of Argentina released figures for GDP in the second quarter of 2013, showing questionably positive annual results. Argentina’s GDP expanded 8.3% year-on-year (y/y) in April-June. In addition, the positive result observed in the previous quarter has been followed by an improvement in performance in quarter-on-quarter (q/q) terms, according to the data released. Indeed, taking into account seasonally-adjusted figures, GDP increased 2.6% q/q during the second quarter of 2013.
In annual terms, Argentina’s GDP growth was influenced mainly by still-increasing domestic demand and an expansion in external demand. At the same time, the volume of imports increased despite the import barriers imposed by the government, up 21.3% y/y in the second quarter of 2013. Household demand growth accelerated in comparison with the previous year, from 4.2% y/y in the second quarter of 2013 to 9.2% y/y in 2013. Gross fixed-capital formation posted an annual expansion in the second quarter of 2013 as investment in construction activities by the private sector, and to a lesser extent in machinery and equipment, increased in April-June 2013.
By sector, GDP averted an annual rise in the second quarter, due to significant growth in the service sector, up 8.8% y/y – which accounted for 63.5% of GDP. Indeed, activity in the financial intermediation sector expanded 24.1% y/y, the transport, haulage, and communications sector rose 9.1 y/y, and public sector services increased 2.9% y/y. Meanwhile, activity in the manufacturing sector increased 4.1% y/y, while construction activity rose 2.2% y/y. According to data from the monthly industrial production survey, industrial manufacturing barely increased in the first five months of 2013 (up 0.6% y/y). Meanwhile, there was an expansion in the retail and wholesale services, up 14.2% y/y.
Outlook and implications
Argentina’s GDP expanded 5.8% y/y in the first half of 2013. This is a surprising and rather questionable acceleration when compared to the 2.3% y/y registered in January-June 2012. Moreover, there seems to be speculation regarding the possibility of politically driven better than expected GDP growth rates. According to the press release, the acceleration in economic activity was not only a result of the robust private consumption but also a strong increase in investment – mostly in equipment. Argentines have been in a consumption binge since the gap between the perceived inflation rate and the official one widened; moreover, all the exchange rate control measures taken in the past couple of years have made it more difficult to use the preferred savings tool (US dollars), thus inducing consumption in order to shield their earnings from inflation. Meanwhile, although the agriculture sector posted a strong increase in value added (up 18.5% y/y in H1 2013), the volume of exports shrunk 22.9% y/y in the first half of 2013. Foreign-exchange controls have created a wedge between the official exchange rate and the parallel market exchange rate, which in turn serves as an implicit tax to the export sector as their earnings are disbursed in local currency using the official exchange rate that does not fully reflect the increase in costs observed in the country. The press release also shows that the volume of imports increased 13.6% y/y, while the value of imports of goods and services rose 27.8% y/y, demonstrating greater availability of imported goods in 2013 with respect to the previous year. A 5.8% GDP expansion in the first half of 2013 will most likely push the full year growth rate to at least 3.22%, which implies that the government will have to pay the GDP warrants in December 2014.
24 September 2013
Hundreds of Argentines Stage Cacerolazo Outside Kirchner’s NYC Hotel to Protest Corruption, Inflation and Erosion of Democracy in Argentina
SOURCE American Task Force Argentina
NEW YORK, Sept. 24, 2013 /PRNewswire-USNewswire/ — President Cristina Kirchner faces indignant protestors yet again as she attends the United Nations General Assembly (UNGA) in New York City, NY this week. Kirchner has seen growing disapproval from Argentines over her record of rampant government corruption, costly currency controls, strident press intimidation, crackdowns on independent judges, and threats against independent statisticians reporting accurate inflation statistics.
Beyond the rising in-country resistance to her rule, President Kirchner has faced increasing pressure from the international community over these issues and more, including the unprecedented decision by her government to maintain its stark defiance of rule of law and refusal to comply with over 100 U.S. court judgments which require them to honor her government’s debts owed to private creditors.
The impact of the government’s bad policies have outraged Argentines both in-country and abroad. Protests of many kinds, called “Cacerolazos, ” (pictured) have broken out in numerous countries since November 2012.
According to protest organizers, Argentines living in New York City will gather outside the Mandarin Oriental Hotel today at 5:30 pm to protest Cristina Kirchner after her speech at the UN General Assembly. This group, identified on Facebook as Repudio a C F K en Nueva York, is the same group that organized the 200+ person protest against President Kirchner in September of 2012. According to its Facebook page, the group will be staging another protest today, September 24, near Columbus Circle in New York City. The Twitter hashtag is #24SNYC.
On Tuesday, Kirchner was also met with photos of the protests posted on a large, lighted Times Square billboard along with headlines capturing the frustrations of the Argentine people.
For more information about ATFA, please visit
By Taos Turner
24 September 2013
BUENOS AIRES–Argentina’s state-run oil company YPF SA (YPF, YPFD.BA) and the local unit of Dow Chemical Co. (DOW) agreed to invest a total of $188 million to explore for shale gas in the resource-rich area known as Vaca Muerta.
Dow will invest $120 million as part of the deal, with the remainder coming from YPF.
The agreement calls for the companies to drill 16 wells to extract shale gas as part of a pilot program.
The firms had said in March they planned to work on a joint venture in the province of Neuquen, where Vaca Muerta is located, to develop unconventional gas resources.
“With this agreement, the companies will work together to identify new projects aimed at expanding Argentina’s petrochemical industry in areas of mutual interest…,” YPF said in a statement Tuesday.
YPF is Argentina’s top oil and gas company and accounts for over 35% of the country’s oil and gas market share.
Argentina ranks second in the world, behind China, in potentially recoverable shale-gas reserves, with 802 trillion cubic feet, according to a study last month by the U.S. Energy Information Administration. Argentina also ranks fourth in shale oil with an estimated 27 billion barrels.
Even so, the country stopped exporting gas in 2004 to ensure it had enough gas to meet domestic demand that was rising alongside its then booming economy.
Demand for gas grew at a faster pace than production, turning the country into a net importer and requiring the government to spend billions a year on imported energy.
YPF is attempting to reverse this trend and put Argentina on a path to energy independence by investing in exploration and production and getting other local and foreign companies to do the same. Industry experts say it will take somewhere around $75 billion to develop Vaca Muerta’s resources.
24 September 2013
* Dow to invest up to $120 mln in developing 16 wells
* Vaca Muerta a promising shale reserve field
BUENOS AIRES, Sept 24 (Reuters) – Dow Chemical Co has signed a deal to invest up to $120 million in developing 16 shale gas wells along with Argentinas state-run energy company YPF in the South American country’s vast Vaca Muerta formation, YPF said on Tuesday.
The Vaca Muerta – “dead cow” – field is considered one of the largest shale reserves in the western hemisphere, but some global firms have been uneasy about making big investments in Argentina because of interventionist economic policies.
Dow, the largest U.S. chemical maker by sales, and YPF will team up in the area of “El Orejano,” located in the southern Patagonia province of Neuquen, during an initial time frame of 12 months. YPF will make an additional contribution of up to $68 million, the company added in a statement.
Dow will have the option of converting what is essentially a loan into a 50 percent stake in the area.
“Should Dow exercise its conversion option, YPF would cede 50 percent of its participation in the area of ‘El Orejano,’ which comprises a total area of 45 square kilometres (11,120 acres),” YPF said.
The two companies reached a deal to return the loan should Dow pass on its right to exercise the option. YPF didn’t provide details on the terms of the financing.
YPF operates in 3 million acres of Vaca Muerta and has estimated that the entire formation contains 661 billion barrels of oil and 1,181 trillion cubic feet of natural gas.
The administration of President Cristina Fernandez seized the energy firm YPF from Repsol last year, saying the Spanish company had not invested enough in Argentina.
The partnership comes on the heels of U.S. oil company Chevron Corp’s agreement with YPF in July to invest $1.24 billion in the Vaca Muerta formation.
Germany’s Wintershall, the oil and gas arm of chemicals group BASF, on Monday announced it had signed an agreement to search for oil in the field.
“This agreement (with Dow) confirms the direction we decided upon when we announced our strategic plan. We spoke of a necessity to advance in a shale gas pilot and today we’re making that a reality,” YPF chief executive officer Miguel Galuccio said in a statement.
24 September 2013
BUENOS AIRES, Sept 24 (Reuters) – Argentina’s antitrust regulator will study a proposal by Spanish-owned Telefonica to gain control of Telecom Italia, both of which operate in the South American country, the government said on Tuesday.
Telefonica agreed on Tuesday to a deal worth around 860 million euros ($1.2 billion) to increase its stake in Telco, the controlling shareholder in Telecom Italia which it currently co-owns with some Italian investors.
Telefonica controls one of Argentina’s leading telephone operators, Telefonica de Argentina, while Telecom Italia indirectly controls Telecom Argentina , another top operator.
Under a complex series of transactions, Telefonica will only gain full control of Telco – and therefore Telecom Italia – following approval by antitrust regulators.
That makes approval from Argentina’s antitrust regulator key.
The government said in a statement it has asked the CNDC antitrust watchdog agency “to establish whether this shareholder modification violates the commitments both companies took on before the state in October 2010.”
“Any changes must be pro-competition and be expressly approved by the Argentine government,” it added.
Following a two-year probe, the Argentine government dropped an antitrust investigation of Telecom Italia and Telefonica in October 2010 after the government and telecommunication companies reached an agreement.
At the time, Argentina’s antitrust commission said it could reopen its investigation if the agreement, which sought to limit Telefonica’s influence over Telecom Argentina, was broken.
A source at the CNDC had told Reuters earlier on Tuesday that they were looking into the situation to “ensure competitiveness in the Argentine marketplace.”
24 September 2013
Argentina took over the passenger railway services of the central-eastern province of Entre Ríos and approved a deal with China Railway Signal & Communication Corp to improve its signaling system in two of the main lines that serve the city of Buenos Aires.
These actions are part of a major overhaul the government is making to the railway system, which includes cancelling concessions after a series of crashes and incidents.
In June, three people died and over 150 were injured as two trains moving in the same direction collided in the outskirts of Buenos Aires. Last year, 51 died and 700 ended up injured when a train crashed as it arrived to a terminal station in Buenos Aires.
Argentines have blamed the Government for the lack of investment in the railway system and the poor service that several of the private companies in charge of the concessions provide.
Between 2003 and 2010 alone, Buenos Aires’ metropolitan railway system received annual investments for some US$50mn, when basic investments should have reached US$400mn at least, according to a study by José Barbero, an advisor to the IDB on transport issues.
The government has been trying to reestablish safe commuting conditions along the city’s suburban train lines focusing on renewing the fleet, signaling equipment and procedures. In January, it announced a 4.9bn-peso (US$975mn) revamping plan for the Sarmiento and Mitre lines, including a complete renewal of the rolling stock by importing 409 train cars, which are expected to arrive in early 2014.
In recent weeks, Argentina has taken over the control of cargo railway system Belgrano Cargas and passenger railway lines Roca, San Martín, Belgrano Sur, Sarmiento and Mitre, that every day transport tens of thousands of people in and out of Buenos Aires.
By Nicolás Misculin
24 September 2013
CAMPANA, Argentina, Sept 24 (Reuters) – Argentina’s 2013/14 corn crop will be at least 30 million tonnes and its soybean harvest 50 million tonnes or more, the country’s agriculture minister Norberto Yauhar told Reuters on Tuesday, issuing the first government forecasts of the season.
The minister’s corn estimate topped a forecast published by the U.S. Department of Agriculture (USDA) which sees Argentine 2013/14 corn output at 26 million tonnes. The soy estimate was shy of the USDA estimate of 53.5 million tonnes.
The South American grains powerhouse is the world’s No. 3 exporter of both crops at a time of rising global food demand.
The Southern Hemisphere spring planting season has just begun and will last until the end of the year.
Yauhar, speaking to Reuters on the sidelines of a conference of regional agricultural officials in the Argentine town of Campana, said his staff is studying possible way to make the government’s corn and wheat export system more flexible.
The government limits corn and wheat exports in a bid to ensure ample domestic food supplies. Farmers complain that the export quotas, which can be raised and lowered throughout the year, kill competition among buyers and make crop planning impossible.
The policy has pushed farmers toward planting more soybeans this year. Soy exports are taxed at a hefty 35 percent but not limited by the quota system that applies to corn and wheat.
Planting too much soy at the expense of the crop rotation needed to keep soils healthy could pose long-term problems.
Asked if the government may eventually scrap the export quota policy, Yauhar responded: “Yes”.
“It’s a process. It will not happen today or tomorrow, but our technical teams are looking at it,” the minister added. “First we have to guarantee the food security of our country.”
Corn planting is also under threat from dry weather that has postponed 2013/14 seedings. The longer growers wait for rains, the more likely they are to ditch corn this season in favor of more weather-resistent soybeans.
Argentina’s recently planted 2013/14 wheat fields are being threatened by early spring frosts likely to hurt yields if they continue.
By Boris Korby and Katia Porzecanski
September  25, 2013
Argentina is enriching debt investors with returns that are nine times the average in emerging markets this quarter, underscoring the nation’s status as a haven against Federal Reserve policies that have whipsawed developing-nation bondholders.
The government’s dollar-denominated notes have returned 16.3 percent since the end of June, second only to Egypt among 58 emerging markets tracked by JPMorgan Chase & Co. The third-quarter advance has reversed losses on the country’s bonds this year, with the securities returning 1.9 percent, compared with a drop of 6.1 percent for sovereign debt from developing nations.
Argentine bonds have split from the rest of the developing world as investors focus on whether South America’s second-largest economy will be able to stave off its seventh default since independence in 1816. A delay in the enforcement of a U.S. appeals court decision in August ordering Argentina to pay holders of defaulted debt in full has spurred gains, even as speculation the Fed may begin tapering bond-buying plan as soon as next month roils markets from Brazil to India.
“Argentina trades on its fundamentals, the perception of legal risk from New York courts, its growth, its politics,” Alejandro Urbina, who helps oversee $800 million at Silva Capital Management LLC, said by telephone from Chicago. “Some people may be looking at Argentina opportunistically, seeing legal matters on the sidelines right now.”
Downgrade Proof
The bonds rallied even after Standard & Poor’s lowered the nation’s credit rating one level to CCC+, or five levels from default, citing increased risks to debt payments from the legal proceedings.
While a U.S. appeals court on Aug. 23 upheld a district court order that Argentina must pay holders of its defaulted debt in full when it makes payments on performing bonds, the enforcement of the decision was postponed until the Supreme Court decides whether to review the case. That may not come until the first quarter of 2014, according to Richard Samp, chief counsel of the Washington Legal Foundation.
Vladimir Werning, an economist at JPMorgan, yesterday raised his recommendation on Argentine bonds to overweight from market weight, citing improving demand for risky assets and prospects of a lengthier legal battle for Argentina.
President Cristina Fernandez de Kirchner insists that she can only offer holdouts from Argentina’s $95 billion default in 2001 the same terms as creditors who accepted losses of about 70 percent in debt restructurings in 2005 and 2010.
The nation has said it would never voluntarily obey an order to pay holdouts in full, fueling speculation it would opt to default when the orders are enforced.
‘Serial Payers’
On Aug. 26, Fernandez said Argentina would be willing to swap securities governed under New York law to local legislation to allow restructured bondholders to continue receiving debt payments regardless of the legal outcome.
“Instead of recalcitrant debtors, we are serial payers,” Fernandez said last month. On Sept. 22, Fernandez said in a televised interview that U.S. courts should let Argentina continue honoring its obligations with current bondholders.
If the Supreme Court denies Argentina’s request, the stay would be lifted, Samp said Sept. 16 at a seminar hosted by the Emerging Markets Trade Association in New York. If the high court decides to hear the appeal, the stay will remain in place and the case will be scheduled for argument in October or November of 2014, pushing out a decision until probably the first half of 2015, he said.
Lifting Stay
The extra yield investors demand to hold Argentine government dollar bonds instead of U.S. Treasuries narrowed five basis points, or 0.05 percentage point, to 1,007 basis points at 8:40 a.m. in New York, JPMorgan index data show.
Argentina’s five-year credit-default swaps, contracts that protect the nation’s bondholders against non-payment, climbed nine basis points to 2,276 basis points, according to data compiled by CMA Ltd.
Holdout creditors including NML Capital Ltd., a unit of billionaire hedge fund manager Paul Singer’s Elliott Management Corp., may still ask the Second Circuit Court of Appeals to lift the stay on the order for Argentina to pay holders of defaulted debt in full after Fernandez unveiled a plan to service the debt under a different jurisdiction.
‘Compelling Reasons’
“You need good grounds to lift that stay,” Robert Cohen, an attorney at Dechert LLP who represents NML, said Sept. 16 at the seminar. “The second circuit considered the comments that Argentina’s counsel made at argument that Argentina wouldn’t obey. Nevertheless, they imposed the stay, so if we move to lift it we would have to have compelling reasons, and we may.”
The South American nation’s debt yields an average 12.82 percent, more than any emerging market globally, JPMorgan data show.
“When you get into this legal running out the clock, kicking the can down the road process, the earliest we will likely see any news from the Supreme Court is March,” Michael Roche, an emerging-market strategist at Seaport Group LLC, said in a telephone interview from New York. “That gives you a number of coupon payments to be put under your belt.”
By Bob Van Voris
September 25, 2013
Argentina lost a bid to throw out a suit in which holders of the nation’s defaulted bonds are seeking a court order to help them seize assets held by the country’s central bank.
U.S. District Judge Thomas Griesa today denied Argentina’s request that he dismiss a suit by NML Capital Ltd. and EM Ltd. asking for a declaration that the Banco Central de la Republica Argentina is an “alter ego” of the country, and therefore liable to pay them almost $2.6 billion.
“I think there is a very legitimate claim by the plaintiffs here that, for certain purposes, BCRA is the alter ego of the Republic,” Griesa said at a hearing today in Manhattan federal court.
Argentina in 2001 defaulted on a record $95 billion of foreign debt. Holders of about 91 percent of the bonds agreed to take new exchange bonds in 2005 and 2010, at a deep discount. Some holdout investors have won court judgments against Argentina from the New York court and are trying to find assets they can seize to enforce them.
The case is EM Ltd. v. Banco Central de la Republica Argentina, 06-cv-07792, U.S. District Court, Southern District of New York (Manhattan).
September 26, 2013
Argentina’s official statistics
WHY lie if telling the truth could save you billions of dollars? The question has baffled Argentine pundits since INDEC, the county’s statistical office in hock to the populist president, Cristina Fernández, announced on September 20th that it expects output to rise by 5.1% in 2013, nearly double private-sector estimates of around 2.8%. In a country renowned for bogus statistics the size of the gap is not itself unprecedented (as the chart for quarterly figures shows). What makes INDEC’s wheeze truly bizarre is that it could trigger arcane financial instruments called GDP-indexed warrants.
These were tucked away in the country’s 2005 debt restructuring, presumably to sweeten the 67% haircut offered to Argentina’s hapless creditors. If economic growth exceeds a threshold of around 3%, and a few other conditions are met, Argentina must pay holders of the security an amount equivalent to a fraction of the difference between “baseline” GDP (calculated on the basis of the threshold growth rate) and actual output.
In the past, official growth numbers have led to slightly higher warrant payouts than those implied by private figures. This time, independent GDP estimates suggest the warrants would not be triggered at all. If, by contrast, INDEC’s forecast translates into growth figures, the government would be on the hook for $3.5 billion.
This apparent willingness to dish out billions is peculiar given Argentina’s dwindling foreign reserves, currently at their lowest level in six years. It also sits oddly with Ms Fernández’s staunch refusal to pay a mere $1.3 billion to those of its creditors who have held out for a better deal than the one offered in 2005.
INDEC’s fiddles are unlikely to boost the president’s flagging popularity before October’s midterm elections. The electorate has stopped believing in INDEC’s fairy tales long ago, says Juan Cruz Díaz, a political consultant. Francisco Resnicoff, another analyst, adds that Argentines would be more angered than appeased by the continued distortions—all the more so if it means having to pay huge sums to foreigners.
Nor will the IMF be amused. In February Argentina became the first country ever to be censured by the fund, which has threatened it with a suspension of borrowing rights, and eventual expulsion, if the government did not present “trustworthy and credible” numbers by September 29th.
According to Guido Sandleris, a finance expert at Torcuato di Tella University in Buenos Aires, INDEC could still revise its figures down to the private-sector consensus to avoid payment—the size of which will be worked out based on final GDP numbers released in September next year. Others, including a former finance secretary, Daniel Marx, believe such a large revision would be politically unpalatable. Perhaps. But, as Mr Sandleris points out, insisting on the funny numbers would amount to financial fraud of epic proportions.
By Ken Parks
26 September 2013
BUENOS AIRES–Argentina’s Lower House of Congress approved President Cristina Kirchner’s 2014 budget proposal early Thursday morning after almost 17 hours of debate.
Mrs. Kirchner’s ruling Victory Front coalition and its allies passed the bill 134-117. The bill now goes to the Senate, where her coalition also holds a majority.
The budget looks set to clear the Senate in early October, just weeks after the bill was submitted to the Lower House and ahead of midterm congressional elections scheduled for Oct. 27.
“Our block is proud of its budget because it offers a plan…to continue growing,” state news agency Telam quoted Victory Front lower house whip Juliana Di Tullio as saying.
Analysts expect the Victory Front to do poorly in October as voters express their exasperation with inflation, a weak economy and perceptions the government isn’t doing enough to fight crime. By passing the budget before the elections, Mrs. Kirchner avoids the risk that a thumping at the polls might trigger defections from her coalition that would jeopardize her control of Congress.
The budget calls for a 19.2% increase in spending to 859.5 billion Argentine pesos ($149 billion). Tax revenues are forecast to rise almost 26% to ARS1.1 trillion.
The numbers don’t tell the whole story because Mrs. Kirchner’s budgets are widely thought to deeply understate inflation.
The budget’s forecasts of 10.4% average annual inflation next year following 10.3% in 2013 are less than half of most private-sector estimates, which put inflation between 20% and 25%.
That can lead to inflated government revenues, which thanks to the idiosyncrasies of Argentine law Mrs. Kirchner can spend through the use of special decrees that are subject to congressional oversight. As long as the Victory Front holds a majority in Congress there is little prospect of those decrees being overturned.
The budget also estimates economic growth at 5.1% this year and 6.2% in 2014. Many economists say those forecasts are unrealistic for an economy suffering from double-digit inflation, import restrictions and foreign currency shortages.
Among the biggest beneficiaries of next year’s largess is the Labor Ministry, which is also responsible for the public pension system, whose budget will rise 21.5% to ARS341 billion. The Social Development Ministry, which oversees a host of social programs, will see its spending rise 19.6% to ARS48.8 billion.
The Kirchner administration has also earmarked ARS77.2 billion to service the public debt, up 73% from this year, while liabilities attached to the Treasury will mean payments of ARS81.4 billion. More than half of the federal government’s debt is held by the government, namely through the pension fund agency.
Mrs. Kirchner also plans to continue her controversial policy of borrowing from the central bank’s foreign-currency reserves to pay her creditors. Those borrowings will total $9.86 billion in 2014, and whatever isn’t spent on debt will be used to fund public works.
Those reserves have fallen to a six-and-a-half year low of about $35 billion as foreign currency outflows such as debt payments and fuel purchases exceed waning dollar inflows from trade.
During the first eight months of the year, the trade surplus fell 32% to $6.29 billion even as Argentine farmers enjoyed one of their largest soybean harvests on record. That could jeopardize the government’s $10.6 billion trade surplus target for this year.
The Lower House also approved bills that would extend until the end of 2015 a financial transactions tax and emergency powers that were originally enacted in 2002 during the country’s worst economic crisis in its modern history.
Those powers allow the president among other things to regulate the exchange rate as well as set utility rates and the prices of other “critical” goods and services. Electricity, water and residential natural gas rates have been frozen for more than a decade, which has pushed some utilities to the brink of insolvency.
“Some believe that because things are going somewhat OK there shouldn’t be an emergency law. The emergency has to do with an unstable outlook” for the world economy, said Kirchner ally and lawmaker Carlos Heller.
By Nate Raymond
25 September 2013
NEW YORK, Sept 25 (Reuters) – Argentina’s central bank lost a bid Wednesday to dismiss a lawsuit by bondholders seeking to hold it responsible for the country’s obligations on defaulted debt, in the latest victory for holdout creditors.
U.S. District Judge Thomas Griesa in Manhattan rejected a motion by Banco Central de la República Argentina (BCRA) to dismiss a lawsuit by two bondholders seeking to have the central bank declared the “alter ego” of the South American country.
Griesa did not rule on the case’s merits, and said a finding that Argentina and the central bank were legally the same “could really have effects or implications beyond what I would intend.”
But citing “irregularities” in Argentina’s behavior, Griesa said at a court hearing that “there could be some account or some assets of the BCRA that could be legitimately attached or executed on to satisfy the judgment debts here.”
The ruling is the latest in years of litigation by bondholders who refused to participate in restructurings in 2005 and 2010 of Argentina’s debt, following a $100 billion default in 2002.
The ruling came in a lawsuit brought by NML Capital Ltd, which is a unit of Paul Singer’s Elliott Management Corp, and EM Ltd, controlled by investor Kenneth Dart. Together, they are seeking to collect $3.41 billion from Argentina, the complaint said.
Creditors who participated in the debt swaps received 25 cents to 29 cents on the dollar, while holdouts remain in court, seeking authority to collect more.
The U.S. Supreme Court will meet on Monday to decide whether it will review a related appeals court ruling requiring Argentina to pay $1.33 billion to holdouts, including NML.
NML and EM, in their case, argued that it was a “legal fiction” that the central bank and the country are separate.
Griesa has previously found them to be alter egos, but on Wednesday he said that was in a more limited context, where holdouts chased $100 million on deposit with the Federal Reserve Bank of New York.
That ruling was later reversed in 2011, but Griesa said that was on other grounds.
Robert Cohen, a lawyer with lawfirm Dechert who represents NML, said a broad ruling could help holdouts avoid relitigating the matter as they pursue Argentina assets elsewhere, including tens of billions of dollars on deposit with the Bank for International Settlements.
“It’s not purely hypothetical,” he said.
Joseph Neuhaus, a lawyer for BCRA at Sullivan & Cromwell, said the relief that EM and NML seek should not be a “stepping stone” for pursuing other litigation. “It is supposed to end litigation.”
The case is EM Ltd. et al v. Banco Central De La República Argentina et al, U.S. District Court, Southern District of New York, 06-07792.
By Laurence Allan
25 September 2013
Argentina sends mixed messages on trade barriers
IHS Global Insight perspective
The Argentine authorities have signalled recently that they may consider relaxing protectionist measures taken since late 2011.
However, these signals have not been consistent, and remain couched in ambiguous language.
Across the board, policy change on non-tariff barriers remains unlikely in the three to six-month outlook.
Truck-drivers protest import restrictions, Buenos Aires port, April 2012
On 16 September, Argentine government authorities from the ministries of industry, commerce, and foreign affairs met with representatives of Argentine industry in a meeting that saw the government ask local business sectors to provide a list of products that need greater or lesser protection from international competition. The meeting came after comments made by President Cristina Fernández de Kirchner on 12 September that “the state cannot for a long time, or eternally, practice protection if there is no investment in technological development”. According to state news agency Telam, the list will be used to help define the parameters of upcoming trade negotiations between the Mercosur regional trade bloc and the EU.
These discussions could indicate a change of strategy for the Argentine government, with a potential relaxation of the non-tariff trade barriers used since late 2011 to try and boost the country’s industrial capacity. These methods have focused primarily around two strategies. First, repeated government exhortation of local industry to provide greater inputs into key sectors of the Argentine economy, notably mining, energy, and manufacturing. In the first of these sectors, for example, the government established the Development Plan of Suppliers and Import Substitution in Mining – the government has previously assessed the total potential value of import substitution in this sector at an estimated USD1billion.
The second tactic has been the use of barriers to protect domestic industry. This has principally meant extensive use of the Advance Sworn Import Declaration (DJAI), a procedure by which all imported goods must be agreed on a case-by-case basis by the Ministry of Commerce. The additional bureaucracy has since late 2011 sparked numerous complaints from Argentine business sectors over lengthy delays to imported goods clearing customs bureaucracy. In July 2013, the Argentine Chamber of Importers assessed that the DJAI was delaying some imports for industries including oil, chemicals, and construction, by as much as six months. Equally, these tools have sparked serious complaints externally, notably from Brazilian exporters to Argentina in the auto and foodstuffs sectors, and from other regional trade partners including Mexico. The WTO was also the forum in 2012 for complaints against Argentine protectionism, including by the US, Japan, and the EU.
However, three factors suggest that the Fernández government is unlikely to make any substantive change to its policy in coming months. First, as recently as late August/early September, other high ranking government ministers signalled that the current import restrictions would stay in place until 2015, suggesting that Fernández’s careful use of language was calibrated far more to encourage further investment from national business sectors than any commitment to draw down protectionism. Second, on 23 September, Argentina’s official statistics agency INDEC published data indicating that the August 2013 trade deficit was 59% worse than in the same month in 2012. Notably, imports of fuels and lubricants doubled y/y to USD1.54 billion, with imports of passenger vehicles also sharply up by 76%. The weak trade balance strongly suggests it is unlikely that the Argentine authorities will significantly liberalise import restrictions anytime soon. Third, the Argentine government remains committed to careful husbandry of its US dollar reserves, an ongoing concern sharpened by the imminence of the US Supreme Court judgment of 30 September on whether to take up an appeal on Argentina’s long-running battle with debt-holders, the so-called “holdouts”. If the US Supreme Court decides not to hear the case, Argentina will be liable to pay the holdouts in full. By late 2013, this could result in Argentina facing legal action from other holders of Argentine debt who accepted debt exchange under different conditions in 2005 and 2010. These further demands for debt repayment would put Argentine reserves under growing pressure, heightening the risk of technical default by mid 2014.
Outlook and implications
The potential for a substantive shift towards lowering non-tariff barriers in the three- to six-month outlook should also be weighed against political expediency related to the imminent 27 October mid-term legislative elections. Credible polling published in local media on 22 September indicated that the president currently has a disapproval rating of 50% in the province of Buenos Aires, which is by far Argentina’s most important electoral district. With the government lagging behind in polls, Fernández’s carefully chosen language on 12 September was probably in part an attempt to dampen opposition from these sectors during election campaigning. However, some limited relaxation of trade barriers to pacify some of Argentina’s key trade partners is likely. This would be most probable for Brazilian goods entering Argentina – Brazilian exports to Argentina fell by 17% in 2012, and Brazilian business sectors have energetically lobbied their government to pressure Argentina on the issue. Brazil’s economic importance to Argentina as the latter’s primary export market gives it significant leverage, especially with Argentina’s trade balance deteriorating. Because of these factors, barriers affecting some especially sensitive sectors – notably in the auto sector, and to a lesser extent Brazilian food exports to Argentina – are most likely to benefit from any potential relaxation of trade barriers. Imports of consumer goods could also see some short-term benefit as a populist measure during the election campaign, but official statistics highlighting that such imports fell by 11% year on year indicate that any such relaxation on such imports is likely to be only very short term and temporary.
25 September 2013
Washington (Platts)–25Sep2013/426 pm EDT/2026 GMT
Exploration and production of Argentina’s vast shale gas resources has been tepid, amid an unattractive business climate and populist price controls, but Ed Morse, global head of commodities research at Citigroup, says he sees promise for the South American country to develop its massive reserves.
Despite a recent history of resource nationalism, Argentina has such domestic demand for gas that its government may have no choice but to incentivize foreign companies to invest on better terms, Morse said Wednesday.
“I’m semi-optimistic,” he said at a forum on Latin American shale gas hosted by the Inter-American Dialogue in Washington. “There is such an urgent need for the gas at home that it may just be that the spoils can be shared enough to make it attractive.”
Argentina contains some 2,732 Tcf of potential shale gas, with about 774 Tcf technically recoverable, ranking the country third in the world in shale gas reserves behind the US and China.
State-owned energy firm YPF on August 29 signed its first shale partnership with Chevron to invest $1.5 billion in drilling more than 100 wells on a 5,000-acre tract of Vaca Muerta, Argentina’s largest shale play. They hope to boost output to 50,000 b/d of crude and 3 million cu m/d of associated gas by 2017.
But even though Argentina has a developed domestic gas market and export facilities, investment has been hampered by populist government policies and resource nationalism, said David Mares, a professor at the University of California-San Diego and a fellow at the James A. Baker III Institute for Public Policy.
In a paper he wrote for the Inter-American Dialogue, he called Argentina’s current government policy “erratic at best,” noting that the government had offered oil and mining companies tax breaks amounting to $461 million in 2011 but withdrew them in early 2012.
In addition, Argentina has imposed price caps on the domestic gas market, prompting companies to cut back on E&P and forcing the country to become a net importer of gas in 2008. Argentina imported some 100 Bcf of LNG in 2011, Mares estimated.
“In order to move forward, operations must be profitable for foreign investors,” Mares said at the forum. “You have to create an environment in which companies are willing to come in and invest their technology in your place. Some of the specifics of shale make it more likely that can happen in a risky political environment, because the returns are fairly quick on a shale gas well, but there are still a number of issues there.”
He compared Argentina’s gas sector to Venezuela’s oil sector, which has seen crude production plummet due to nationalistic policies.
“Venezuela has the largest [proven] oil reserves in the world, but production is falling,” Mares said. “Companies haven’t all left, but they’re investing just enough not to be booted out until the current set of policies looks more credible. These markets need to be understood not just in terms of what the potential is, but what the policies are for developing those markets.”
But Morse said he sees some encouraging signs for Argentina. He said the “pendulum has shifted on resource nationalism” to be more favorable to private investment. For example, the country in recent years has cut its energy subsidies and in August 2012 raised well-head prices by 300%.
The government has announced a plan to raise well-head prices up to $7.50/MMBtu, which Morse said could be enough to attract some smaller, independent E&P companies, particularly those based in countries not subject to stringent transparency and disclosure rules.
“I think there are enough companies and enough money in the world that people will be attracted to a $7.50/MMBtu price,” he said. “We’re seeing the allure of the resource base, and there’s nothing like that to attract the wildcatting mentality.”
By Juliette Kerr
25 September 2013
The renationalised Argentine oil company YPF has found a second partner for the development of shale resources in the Vaca Muerta play, while the provincial company of Neuquén has signed a letter of intent with Germany’s Wintershall that could also see increased investment in the area.
IHS Energy perspective
The agreement with Dow Chemical anticipates an initial investment of USD120 million by the US company in the El Orejano Block, while the Wintershall accord anticipates up to USD3.35 billion of investment in the Aguada Federal area, both in the Vaca Muerta play.
The planned investments reflect high expectations regarding Argentina’s shale prospects – a technical study commissioned by YPF into the potential of the Vaca Muerta shale formation in the Neuquén Basin estimated that this formation has gross prospective resources of 21.167 billion boe in an area of 8,071 sq km and gross contingent resources of 1.525 billion boe over an area of around 1,100 sq km. The formation is thought to cover 30,000 sq km.
YPF’s sealing of a second Vaca Muerta accord could bode well for finding future partners, despite the difficult operating environment that oil companies continue to face in Argentina.
The renationalised Argentine oil company YPF has signed an agreement with DowArgentina, the local subsidiary of the US petrochemical firm Dow Chemical, for the development of a pilot project in the El Orejano Block located in the Vaca Muerta shale play in the province of Neuquén. YPF said in a press release that DowArgentina plans to invest USD120 million in the 45-sq-km area over a 12-month period and YPF would invest USD68 million, bringing the total planned investment to USD188 million. The agreement foresees the initial drilling of 16 shale gas wells. YPF said that the area could supply an additional 3 MMcm/d of natural gas. The company added that YPF and Dow “will work together to identify new projects with the aim of expanding the Argentine petrochemical industry in areas of mutual interest with a focus on the availability of primary materials.” YPF and Dow had been negotiating the deal since they signed a memorandum of understanding (MOU) in March (see Argentina: 27 March 2013: ). Dow does not currently have any upstream assets in Argentina but it partners YPF in petrochemical projects.
Although the additional production volumes expected from the El Orejano pilot project are fairly modest, the finalisation of another accord with a foreign company will be welcome news for YPF as it will need considerable financial and technological support from other companies if it is to develop its holdings in the Vaca Muerta play. In July, YPF signed an agreement with Chevron Corporation that anticipates initial investment by the US supermajor of approximately USD1.24 billion in the Loma La Lata Norte and Loma Campaña areas (see Argentina: 18 July 2013: ). The accord was approved by the legislature of Neuquén in late August. A USD1.5-billion preliminary accord with Bridas Corporation announced last December has yet to be finalised. However, talks with other potential partners do appear to be advancing. Recent press reports have also claimed that the Mexican state oil company Pemex and the Russian gas giant Gazprom are interested in gaining a foothold in Vaca Muerta.
In another positive development, the governor of Neuquén, Jorge Sapag, has signed a letter of intent with Germany’s Wintershall and the provincial government-owned oil company GyP for the development of the Aguada Federal area in the Vaca Muerta formation. GyP will remain the concession holder while Wintershall will have operatorship and a 50% stake. According to a press release by the provincial government on 24 September, the project could see USD3.350 billion of investment over 10 years. The accord anticipates an exploration programme including the drilling of two vertical wells and four horizontal wells to be executed within 24 months. The exploration programme is expected to require USD115-120 million dollars of investment. The pre-development phase is expected to involve the drilling of a further 20 wells and the development phase around 120 wells – subject to exploration results meeting expectations.
Outlook and implications
YPF is actively seeking partners to help finance its USD37.2-billion strategic plan, which aims to raise oil and gas production by 32% by 2017 (see Argentina: 3 September 2012: ). The sealing of a final deal with a second company is welcome news for YPF. The investment promised by Chevron and DowArgentina should also deliver new production volumes that will help to reverse the country’s decline in production and reduce its growing import dependency. However, further partnership agreements with YPF and the provincial company GyP are needed if Argentina is to fully realise the potential of the Vaca Muerta shale play. Prior to the expropriation of a 51% stake in YPF, Repsol had estimated that up to USD25 billion of investment per year would be needed to develop resources in the Vaca Muerta formation if further exploration is successful. If this estimate is correct, then Chevron and Dow’s initial commitments are just a drop in the ocean. In addition to much higher levels of investment in the future, other challenges include drafting specific regulations for the development of unconventional hydrocarbons, addressing issues such as water usage; the need to involve a larger number of companies in the sector and to hire more trained engineers; and potential difficulties in securing large quantities of specialised drilling and completion equipment. The scale of the challenges involved should open up investment opportunities for other companies interested in getting a foothold in the Vaca Muerta formation through partnerships with YPF.
25 September 2013
CHICAGO–(BUSINESS WIRE)–September 25, 2013–
Fitch expects to rate YPF S.A.’s (YPF) proposed secured debt issuance for up to USD150 million ‘B-/RR4’. The proceeds will be used to refinance existing debt and to fund capital investments for developing natural gas production in the province of Neuquen.
The notes rank pari-passu in security of payment with all other of YPF’s senior unsecured debt and will benefit from a first priority security interest in a six-month debt service reserve account. The debt service (collateral) account will be held offshore and funded with flows from YPF’s agro exports in order to help the company access foreign currency to service its debt.
The collateral account will receive approximately USD400 million per year of flows from YPF’s agro exports to four international grain-trading companies. These funds will first be used to service the notes principal and interest payments before repatriating the balance. It will also maintain 125% of the next two principal and interest payments. The notes will have a one-year principal grace period and will then amortize in 17 equal quarterly payments.
The notes are rated the same as all senior unsecured obligations of YPF. While positive, the credit enhancement of the transaction’s structure is not sufficient to merit a rating uplift given the short track record of YPF’s agro exports and the short-term nature of sale contracts with traders.
Key Ratings Drivers
YPF’s ratings reflect its strong linkage with the credit quality of the Republic of Argentina (Fitch local and foreign currency IDRs of ‘B-‘, Outlook Negative) and the company’s low reserve life. The ratings also factor in YPF’s strong business position in the local market as well as its relatively strong credit protection measures.
Linkage to Sovereign
YPF’s ratings reflect the close linkage with the Republic of Argentina resulting from the company’s ownership structure as well as recent government interventions. The Republic of Argentina controls the company through its 51% participation after it nationalized the company on April 2013 by expropriating the controlling ownership previously owned by Repsol S.A. Since the expropriation, the company’s strategy and business decisions are governed by the Republic of Argentina and at times may go against profit maximization.
Low Hydrocarbon Reserve Life
The ratings consider the company’s relatively weak operating metrics characterized by low reserve life and historically declining production levels. As of year-end 2012, YPF reported proven reserves of 979 million barrels of oil equivalent (boe) and average production of 485,000 boe per day. During the first half of 2013, the company reported production of 480,000 boe per day. Production has been stable during the past three quarters. This translates into a reserve life of approximately 5.5 years, which is significantly below optimal levels and has the potential to create significant operational challenges in the medium to long term. During 2012, the company’s reserve replacement ratio was approximately 85%.
Strong Business Position
YPF benefits from a strong business position supported by its vertically integrated operations and dominant market presence in the Argentine hydrocarbons’ market. Fitch anticipates that YPF will continue exercising an active role in domestic fuel and gas supply.
Adequate Credit Protection Metrics
The ratings reflect YPF’s relatively solid credit protection metrics, characterized by moderate leverage and a manageable debt amortization schedule. As of the last 12 months (LTM) ended June 30, 2013, total financial leverage, as measured by total debt-to-EBITDA, reached 1.3x, which is considered low for the assigned rating. As of year-end 2012, leverage (as measured by total debt-to-total proven reserves) was average at USD3.5 per boe. Total debt as of June 30, 2013 amounted to approximately USD4.466 million, of which approximately USD970 million was short-term. Total cash and equivalents amounted to approximately USD954 million as of June 30, 2013. EBITDA for the LTM ended June 2013 was approximately USD3.364 million. During recent years, the company’s leverage has been increasing, mostly as a result of increases in debt. The company’s stated strategy is to maintain its net leverage below 1.5x.
The ‘RR4’ Recovery Rating reflects an average expected recovery given default and is in line with the RR soft cap established for Argentina. The structure put in place by the company for the proposed issuance supports access to foreign currency for debt service given that the Argentine central bank has allowed the company to create a collateral account to hold foreign currency funds abroad. The company will maintain funds equal to 125% of the next two quarterly amortization payments. YPF will fund the collateral account using proceeds from grain exports to four trading companies, which have signed letters of notice and acknowledgment to deposit their payment in the collateral account.
Rating Sensitivities
YPF’s ratings could be negatively affected by a combination of the following: a downgrade of the Republic of Argentina’s ratings; a significant deterioration of credit metrics; and/or the adoption of adverse public policies that can affect the company’s business performance in any of its business segments.
A positive rating action in the short-to-medium term is considered unlikely given the linkage with sovereign credit quality and the Negative Rating Outlook for all foreign and local currency IDRs.
25 September 2013
Argentine antitrust agency CNDC will study the impact on the local market of Spanish telco Telefónica’s (NYSE: TEF) plans to raise its stake in Telco, the holding behind Telecom Italia (NYSE: TI), local press reported.
The government urged the antitrust agency to define whether this shareholder modification violates the commitments both Telefónica Argentina (NYSE: TAR) and Telecom Italia made to the Argentine government in October 2010. The government added that any changes must be expressly approved by the local authorities.
The government also said that a monopoly situation in the local telecommunications market should be avoided.
Telefónica fully owns local telecoms operator Telefónica de Argentina, while Telecom Italia controls Telecom Argentina (NYSE: TEO). These two firms dominate the domestic telecoms market.
On September 23, Telefónica confirmed that it had reached an agreement with its Italian partners Mediobanca, Intesa Sanpaolo and Generali, to maintain their shareholder agreement with regard to Telecom Italia and to reinforce the balance sheet of Telco, the holding vehicle which owns 22.4% of Telecom Italia.
The agreement provides for a capital increase in Telco by issuing Class C shares without voting rights, which Telefónica will subscribe fully for a total amount of 324mn euros (US$437mn). Simultaneously, Telefónica will reach 70% of the bond issued by Telco for a total purchase price of 424mn euros, paid for with existing treasury stock, said the release.
As a result, TEF will raise its stake in Telco to 66%, maintaining its existing voting rights at 46.2%. According to the statement, TEF could raise its participation further in the near future to as much as 70%.
By Hugh Bronstein
25 September 2013
BUENOS AIRES, Sept 25 (Reuters) – Argentina is on track to harvest more wheat this season than last as greater acreage and coming warm weather should offset any yield loss caused by recent frosts that hit in the last days of the Southern Hemisphere winter.
The grain powerhouse should produce more than the 8.2 million tonnes it reported last season. Harvesting starts in November and forecasts call for warm weather after the wheat belt got blasted by Antarctic air the past few days.
“There have been frosts, but not enough to significantly damage yields. We can come back from this,” said Ruben Sgalippa, who owns a farm in the town of Carlos Casares, Buenos Aires province. Other growers around the Pampas grains belt echoed Sgalippa’s take on the situation.
The USDA sees a 2013/14 Argentine wheat crop of 12 million tonnes, up from 10 million tonnes the previous season. Planting intentions increased this year thanks to a local price surge caused by high early-season exports.
A big crop is needed in Argentina after last year’s smaller harvest tightened supplies and drove up local bread prices. World buyers, including neighbor Brazil, also need Argentina’s wheat as global demand for grain is on the rise.
U.S. wheat exports are already up 40 percent this year versus 2012 as buyers look to America for supplies needed to compensate for a poor Chinese crop and possible low yields in Argentina, where growers strive to avoid planting wheat in order to skirt onerous export curbs imposed by the government.
“The acreage planted this year is larger than last year, and the crop looks better, although we have had drought in some areas, and many frosts,” said David Hughes, who manages 7,000 hectares of farmland in northern Buenos Aires province.
“All considered, total production should be greater than last year,” he added.
Another cold snap is forecast for Pampas grains belt this coming weekend, but several weather experts said it will not be as severe as the four-day cold spell that ended on Tuesday.
“We are getting more light each day as we get into spring. This will provide a floor for temperatures in the wheat belt,” said Anthony Deane, head of consultancy Weather-Wise Argentina.
“There is a cold front moving in. But temperatures, generally, will not be as low as they were last weekend,” he said. “This cold snap won’t be as extreme as the previous one.”
Late-planted Argentine wheat is at the height of its weather-sensitive flowering period as spring gets underway. Frosts this week threatened to hurt yields and pile more pressure on Brazil, the country’s top wheat client, to look for alternative sources.
While the Argentine harvest should be healthy, much wheat will be needed domestically after the government based last season’s wheat export permits on overly-optimistic crop estimates, leaving little in the country to be milled into bread and driving up the price of basic food staples.
Argentina caps corn and wheat exports in a bid to ensure ample domestic food supplies. Farmers complain that the export quotas, which can be raised and lowered throughout the year, kill competition among buyers and make crop planning impossible.
Her popularity already sagging due to double digit inflation in Latin America’s No. 3 economy, President Cristina Fernandez is sure to clamp down on 2013/14 wheat exports to ensure voters have food on their tables as she ends her second term in power.
“As we progress into spring, it is unlikely that we will get temperatures as low as they were over recent days. It is possible, but not likely,” said Liliana Nunez, chief agro-meteorologist at the government’s SMN weather institute.
In a last gasp of the Argentine winter, temperatures recently dropped to as low a 10 degrees below zero Centigrade in the wheat belt, which is centered in Buenos Aires province and includes parts of Cordoba, Santa Fe, Entre Rios and La Pampa.
SMN’s forecast through Saturday shows minimum lows of 10 degrees above zero, Nunez said.
The recent combination of cold weather and dry planting conditions could however take a significant toll on Argentine 2013/14 wheat output, even if the weather remains stable.
The full extent of the recent frost damage on wheat will not be known for several days, as it takes time for wheat plants to turn brown and die after getting too much cold.
The agriculture ministry has cut its 2013/14 wheat planting area estimate to 3.4 million hectares (8.4 million acres) from a previous forecast of 3.9 million hectares, citing dry soils left by a rainless August and early September.
In the previous season, growers planted 3.16 million hectares with wheat, yielding a total of 8.2 million tonnes, according to Argentine government data.
Corn planting also has been delayed by the bad weather, pushing farmers toward planting more hardy soybeans instead. Argentina expects a corn crop of at least 30 million tonnes, well above the 26 million estimated for the country by the U.S. Department of Agriculture (USDA).
25 September 2013
Argentina has agreed to buy 81 train cars from China CNR Corporation Limited to renew the fleet of the Belgrano Sur line as part of a major overhaul of the railway system after a series of accidents causing public anger towards the government, due to problems in the services and low investments.
Interior and transport minister Florencio Randazzo announced the acquisition of the diesel train cars in Beijing after a meeting with representatives of CNR and said they will be delivered in 2015.
Randazzo added the government will open an auction between Chinese state railway companies to buy another 96 diesel train cars for its metropolitan lines Sarmiento and Mitre.
Argentina also secured US$2.47bn in financing from China Machinery Engineering Corporation (CMEC) for freight and passenger train cars, and infrastructure.
In recent weeks, Argentina has taken over the control of cargo railway system Belgrano Cargas and passenger railway lines Roca, San Martín, Belgrano Sur, Sarmiento and Mitre, which every day transport tens of thousands of people in and out of Buenos Aires.
These actions are part of a major overhaul the government is making to the railway system, which includes cancelling concessions after a series of crashes and other incidents.
In June, three people died and over 150 were injured as two trains moving in the same direction collided in the outskirts of Buenos Aires. Last year, 51 died and 700 ended up injured when a train crashed as it arrived to a terminal station in Buenos Aires.
Argentines have blamed the government for the lack of investment in the railway system and the poor service that several of the private companies in charge of the concessions provide.
The government has been trying to reestablish safe commuting conditions along the city’s suburban train lines focusing on renewing the fleet, and revamping signaling equipment and procedures. In January, it announced a 4.9bn-peso (US$975mn) revamping plan for the Sarmiento and Mitre lines, including a complete renewal of the rolling stock by importing 409 train cars, which are expected to arrive in early 2014.
FRIDAY, 9/27
By Shane Romig
26 September 2013
BUENOS AIRES—Argentina plans to work with Spain to pressure the U.K. into negotiating on the return of the disputed Falkland Islands and Gibraltar, the Argentine government said Thursday.
Spain and Argentina agreed to “conduct joint efforts” after Argentina’s Foreign Minister Hector Timerman met with his Spanish counterpart José María García-Margallo on the sidelines of the United Nations General Assembly meeting in New York this week, Argentina’s Foreign Ministry said in a statement.
The ministers discussed the “similarities” between their respective demands that the U.K. comply with United Nations’ mandates that it start talks with a view to return the Falkland Islands to Argentina and Gibraltar to Spain.
Residents of both territories are staunch supporters of British rule and the U.K. has consistently repeated its commitment to respect their wishes.
A U.K. Foreign Office spokesman said they are aware of the Argentine statement, but that it doesn’t change the U.K.’s long-standing position. Spanish authorities couldn’t be reached for comment.
But Mr. García-Margallo, in a speech to the Spanish Parliament this month, drew a comparison between Gibraltar and the Falkland Islands and promised that Spain would support any U.N. resolution brought by Argentina to regain control of that British territory.
If the two Latin countries do indeed collaborate in pressing their sovereignty grievances it could signal a thaw in bilateral relations that were strained after Argentina expropriated assets from Spanish oil company Repsol SA in early 2012.
Argentina has long claimed sovereignty over the U.K.’s holdings in the South Atlantic, which include the Falkland, South Georgia and South Sandwich islands.
Argentina claims the islands based on their geographic proximity to its coast and says the U.K. illegally displaced a small Argentine settlement when it took control of the barren islands in 1833.
In 1982, Argentina’s military government invaded the Falkland Islands. Britain reclaimed the territory after a 74-day war in which 649 Argentine and 258 U.K. soldiers died.
Argentine President Cristina Kirchner stepped up her government’s claims to the islands in 2010 when several U.K.-listed oil companies started exploring for what could be billions of barrels of crude under the icy waters surrounding the Falklands. The islands’ residents stand to receive an extraordinary windfall if an oil boom materializes.
Argentina calls the drilling illegal and has banned any company or person involved in the exploration from doing business in Argentina.
At Argentina’s behest, the South American trade bloc Mercosur has closed its ports to Falkland-flagged vessels, and a number of Caribbean countries have followed suit.
Argentina has also targeted the South Atlantic tourism industry, with U.K.-flagged cruise ships sometimes facing protesters and bureaucratic red tape when docking at the Argentine port of Ushuaia in Tierra del Fuego.
Tensions between Spain and the U.K. have risen in recent months following the construction of a man-made reef along Gibraltar’s coast, despite the opposition of Spanish fishermen.
Spain has increased extensive checks at the border with Gibraltar, leading to snarled traffic and long delays in crossing.
More friction came after a British warship visited the outpost at the tip of southern Spain as part of a long-planned military exercise in the Mediterranean.
Gibraltar was ceded to the U.K. from Spain in a 1713 treaty.
In his U.N. speech Wednesday, Spanish Prime Minister Mariano Rajoy said he was “once again asking the United Kingdom to resume bilateral dialogue” to settle the dispute over “this anachronism.”
By Mario Sergio Lima and Pablo Gonzalez
September  26, 2013
Argentina, Latin America’s largest wheat producer, is poised to supply neighboring Brazil’s imports in the coming harvest, eliminating the need for surging purchases from the U.S.
Argentina expects a 6-million-ton surplus out of a 12-million-ton 2013-2014 crop that growers will start harvesting next month, allowing it to ensure supplies to Brazil, Brazilian Agriculture Minister Antonio Andrade said, citing information from a meeting with Argentine authorities yesterday. Daniel Bestty, a spokesman for Argentine Agriculture Minister Norberto Yauhar, said he couldn’t immediately comment on the country’s outlook for the crop and exports.
“If they can get to that output we won’t need to import any more wheat from outside the Mercosur,” Andrade said today in an interview in Brasilia, referring to the trade bloc led by the two South American countries. “We will only seek wheat purchases from elsewhere in case they have any output losses.”
Brazil’s imports of U.S. wheat surged 46-fold this year through August to 1.46 million tons after domestic output declined and Argentina, traditionally the main supplier of the grain, restricted exports to ensure local supply. Purchases from Argentina slumped 30 percent to 2.5 million tons in the same span.
Frost this week harmed about 15 percent of Argentina’s planted wheat crops, said Juan Ignacio Dreiling and Aldana Ferradas, analysts from Buenos Aires and Bahia Blanca Grains Exchanges, respectively.
Wheat crops in the Bahia Blanca area, which produces 50 percent of Argentina’s wheat, weren’t affected by frost because they are in an early development stage, Ferradas said. The grain is growing healthy, received good rainfall, and yields should rise if rain continues without frost, he said.
Halted Exports
Argentina halted wheat exports in December to meet domestic demand estimated at about 6 million tons after the 2012-2013 crop amounted to 8.2 million tons, the lowest in more than three decades.
Brazil scrapped an import tax on wheat from outside the Mercosur trade bloc to meet internal demand for a maximum of 2.7 million tons to be imported until November. The U.S. became the biggest wheat exporter to Brazil in July and August, according to data from the country’s Trade Ministry.
Frost in July cut wheat output by 26 percent in the southern Brazilian state of Parana, the biggest growing area for the grain in the country, according to government data.
By Sonya Dowsett and Emma Pinedo
26 September 2013
* Hundreds seek redress for torture, shootings, disappearances
* Argentina turns tables on Spain using international law
* More arrest warrants to come, Argentine lawyer says
MADRID, Sept 26 (Reuters) – Hundreds of Spaniards have turned to an Argentine court to seek justice for crimes committed during the 36-year dictatorship of General Francisco Franco in a case that threatens to dredge up Spain’s uncomfortable past.
Argentina is turning the tables on Spain by using an international human rights law that Spain itself used in 2005 to prosecute a member of Argentina’s former military dictatorship in Spanish courts for crimes against humanity.
Lawyers are compiling testimonies to add to Argentine Judge Maria Servini’s investigation into possible crimes against humanity one year after Spain’s Supreme Court upheld an amnesty for Franco-era officials.
Spain, in common with many Latin American countries in their transition to democracy, passed an amnesty law in 1977 which pardoned the crimes of the Franco government. Lawyers are seeking to override this legislation under international law.
“We’re putting forward many cases including torture, shootings, forced disappearances and stolen babies,” Carlos Slepoy, an Argentine lawyer based in Madrid, told Reuters.
About 250 people had joined the lawsuit with many more waiting to give testimonials.
“People have always wanted an investigation to be carried out here, but that has proved impossible and they have turned to Argentine justice as an alternative.”
Unlike countries such as Chile or South Africa that formed truth commissions to come to terms with human rights violations in their past, Spain’s right and left parties agreed to draw a curtain on history after the death of Franco in 1975 in a ‘Pact of Forgetting’ which was given a legal basis in the amnesty law.
Hundreds of thousands of people died on both sides of Spain’s 1936-1939 Civil War. The victors under Franco went on to execute thousands of people after the war was over, according to British historian Paul Preston’s book “The Spanish Holocaust”.
Although some of the cases brought before the Argentine judge deal with torture allegedly carried out by Franco officials in the 1970s, many are seeking justice on behalf of their grandparents.
Cristina Serrano, a Madrid-based 52-year-old mother of three, has joined the Argentine lawsuit seeking redress for her grandfather, who was imprisoned and tortured in the 1940s after being denounced by a neighbour for having left-wing views.
She has also given evidence about a baby born to her mother in 1956 who apparently died 10 minutes after birth, but that she believes may have been part of alleged mass trafficking by nuns, priests and doctors which started under Franco.
“There is a lot of secrecy surrounding the documents. They say they’re lost, burnt, everyone tells you something different,” she says, telling of her difficulty of piecing together what happened to her sister.
“I want them to tell me the truth. There’s a side to Spanish history that has not been told. The story has been twisted by those who won.”
Spanish judge Baltasar Garzon opened an investigation into Franco-era crimes in 2008 but later dropped the politically charged case.
“As a country we haven’t had the courage to confront our own past,” he said at an event in Madrid earlier this year.
Garzon played a leading role in the 2005 Spanish trial that sentenced Argentine former navy captain Adolfo Scilingo for throwing political prisoners from aircraft during that country’s “Dirty War”, the first trial in Spain under laws allowing the prosecution of crimes committed in another country.
Argentina’s 1987 amnesty laws, set up to protect perpetrators of crimes committed during its military dictatorship, were overturned by the Argentine Supreme Court months in 2005, just weeks after Scilingo’s sentencing.
Lawyers hope the Spain case brought in Argentina will trigger an investigation into Franco-era crimes and a similar overturning of Spain’s amnesty, which the U.N. human rights office has urged Spain to repeal.
“We like to say that we’re returning the favour,” said Argentinian lawyer Ana Messuti. “Spain started the trials of the Argentine genocides and it drove us to action.”
In a separate development to the Argentinian investigation, the United Nations has sent a working group to Spain to look into forced disappearances during the dictatorship. The group will present their findings on Monday.
“Whether there is the possibility of justice or not, the right to know the truth is fundamental,” U.N. working group member Ariel Dulitzky told Reuters.
As part of her investigations, Judge Servini earlier this month asked for the arrest and extradition of four former Spanish policemen for torture during the 1960s and 1970s. Spanish authorities said two of the wanted men are dead.
High Court Judge Pablo Ruz has asked Argentina to send all the documentation related to the supposed crimes of the police before any extradition order, a legal source said.
In Argentina, one lawyer involved with the case said he hoped the arrest warrant would force Spain to investigate the crimes through its own legal system.
“We will place more people under formal investigation and we will issue more arrest warrants,” said Maximo Castex.
Dario Rivas, born in Spain and sent to Argentina aged nine with his brothers, has joined the lawsuit on behalf of his father who stayed in Spain and was shot in the 1930s.
“It’s a disgrace that the Spanish justice system has not done what we are doing in Argentina. It should be done there, not here,” he said.
By Paul Queck
26 September 2013
We complain a lot about our government and how it complicates our farm and ranch businesses. It could be a lot worse.
Take Argentina, for example. That country was one of our fiercest competitors just seven years ago.
In 2005, Argentina’s ranchers and farmers produced more than 3.1 million tons of beef, exporting some 745,000 metric tons (mt) to the world market. Argentinawas the third-largest beef-exporting country (behind Brazil and Australia) in the world in 2005. And, by the way, it exported all this beef while also supplying the needs of its people – who had the second-highest annual beef consumption rate in the world at more than 136 lbs./person.
As a point of reference, U.S. beef exports in 2005 were 472,668 mt, and U.S. per-capita beef consumption that year was 94 lbs./person.
That was seven years ago. USDA reports that Argentina exported only 164,000 mt of beef in 2012, slipping to 11th place as a global beef exporter. Per-capita beef consumption has declined to 121 lbs./year. And during those same seven years, U.S. beef exports have increased from 472,668 mt to more than 1.13 million mt.
Argentina’s beef export decline is a welcome development to American cattlemen. After all, the less beef the Argentinians offer for the world market, the less competition for our U.S. beef exports. But Argentina’s problems also serve as a warning for just how quickly bad government policies can cripple an industry.
In March 2006, Argentina’s government – in an effort to lower the rising price of beef to its people – banned beef exports for 180 days. It followed that up by imposing a 15% export tax on fresh beef – a tax that’s still in force. The export tax choked off exports and domestic beef prices dropped.
The government assumed ranchers and farmers would continue to raise cheap beef. But instead, they cut their herds and converted their pastures to soybean production – which was more profitable than raising cattle for the artificially depressed beef market.
Soybean acres increased in Argentina from 37.6 million acres in 2005 to more than 48 million acres in 2012 – mostly gaining those new acres from pasture and other crops, such as corn.
The national beef herd dropped from 54.26 million head in 2009 to 49.59 million head in 2012. In addition to raising fewer cattle, farmers and ranchers also freed up land for crops by finishing cattle in feedlots instead of producing the grass-fed beef for which the country had been famous.
“I feel real bad about what has happened to the cattle business in Argentina the past six years,” says Leonardo Airaldi, a cattleman in Argentina’s Entre Rios Province. He and his family run two large cowherds that produce some 2,000 head/year for market. They grow their calves out more than a year on pasture, and then finish them on a corn silage-based ration. The Airaldi family also sells some of their production as Hereford and Red Angus breeding stock.
Like his neighbors, Airaldi has converted much of his better land into soybean production. “Land that has been converted to soybean production is not going to go back to pasture,” says Carlos Becco, head of Soybean LAS for Syngenta Agro S.A. in Argentina. “That land is worth too much now to be put back into permanent pasture.”


27 septiembre, 2013

El engaño kirchnerista está terminando, toda vez que el Juez Thomas Griesa de Manhattan acepta la teoría del “alter ego”, y comprendió que el Banco Central de la República Argentina no es independiente, sino apenas una oficina que está manejada por la Presidenta Cristina a su antojo, sin que sus funcionarios puedan cumplir con la ley, si ella lo dispone. Pero como Ella controla al Congreso, ha involucrado a senadores y diputados en la gran mentira nacional de que las contabilidades de dicho Banco y las del Estado Argentino están bien confeccionadas y son reales. Esa falsedad no es patrimonio de nuestra Presidenta, data al menos de cuando Duhalde logró ser electo ( sin votos del pueblo) Presidente por dos años, para completar los cuatro años del renunciado enfermo, sospechado,  ineficaz renunciado de la Rúa. Luego de haber desplazado también al previo presidente   provisional Adolfo Rodriguez Saa, (quien  a su vez había sido designado interino Presidente por el Congreso, ante la “acefalía” producida cuando se dijo que Fernando de la Rúa había renunciado, y como si vicepresidente lo había hecho antes, correspondía aplicar la Ley de Acefalía).

Todo esto no está suficientemente claro para la mayoría del pueblo argentino, pero en algún momento se sabrá, los historiadores se ocuparan de que nos enteremos porqué otra vez el peronismo duhaldista kirchnerista cristinista ha defraudado al pueblo argentino. Y finalmente, saldrá a la luz que el Banco Central se robó – con Duhalde Presidente no votado – las reservas ajenas del Banco Central, y por ese motivo – denunciado por Steve H. Hanke en Forbes Magazine a comienzos de 2002, llevó a que el gobierno de la Unión decidiese no prestar jamas dinero a Argentina.

Según Infobae hoy, el Juez Griesa aceptaría que los Fondos “buitres” acreedores de Argentina investiguen donde hay fondos para embargar, y eso incluiría a las Islas Seychelles,  y dineros eventualmente a nombre de nuestra Presidenta. Y esa investigación permitiría levantar el velo otra vez mas sobre la forma en que el peronismo roba a la gente, esta vez bajo la mentira de los Derechos Humanos y del Proyecto Nacional y Popular. Por desgracia para los peronistas, sus dirigentes son tan ineficaces,que no pueden ocultar todo el dinero que ocultan sus corruptos funcionarios. Si el periodista Jorge La Nata pudo averiguar muchas estafas kirchneristas, cabe suponer que la Justicia de Manhattan tiene mucho mas poder para  investigar porqué los K se enriquecieron, y sobre todo, dónde está el dinero que habría desaparecido de las arcas publicas nacionales.

Esta mañana lo oía a Guillermo Nielsen por radio, en el programa de Jorge La Nata, quien pintó el cuadro real desolador del fracaso de la economía llamada modelo kirchnerista. Lástima que este funcionario tardó tanto tiempo en abrir la boca, al estilo de los políticos que hoy se hacen los probos y capaces, y se postulan para cargos públicos, habiendo formado parte importante de los desgobiernos peronistas. Incluyo a Lavagna, Prat Gay, Lusteau. Y recuerdo que el duhaldismo no pudo cambiar la Corte Suprema Menemista, y por eso intuyo existió un pacto para que Nestor Kirchner la cambiara, y tuviese su propia Corte Kirchnerista sumisa, que hoy subsiste, y por eso ha sido posible desde el Poder impedir que los Jueces investiguen a los miembros del Poder Ejecutivo, es decir, los ex presidentes Duhalde y Nestor Kirchner, y la actual, doña Cristina, que se convirtió en empresaria hotelera y está internacionalmente sospechada de enriquecerse demasiado.


Todo hace suponer que los ladrones desgobernantes jamas seran encarcelados, a nivel Presidencial, y que sus dineros estarán a salvo. A menos que los servicios secretos de la Unión logren ubicarlos y su Justicia embargarlos. Pero como lo normal es que los Presidentes de paises tercermundistas se enriquezcan, los cientos o miles de millones de dolares robados difícilmente se recuperen. Pero dentro de un tiempo, cuando quede a la vista que el valor del dinero argentino sigue bajando en forma alarmante frente al dólar, la gente se dará cuenta que otra vez mas fuimos estafados por el desgobierno de turno, hoy peronista, antes radical, antes militarista, …etc.

Nuestro blog se ocupó desde su inicio en estos temas, así como lo habíamos hecho desde la ex www. incultura argentina punto com, y nos alegramos tristemente que la Justicia finalmente obligue a que un gobierno peronista tenga que aceptar la regla internacional de que quien contrae deudas debe pagarlas, y que en eso está la credibilidad de una nación, o si se quiere, su honor y dignidad. Para el peronismo, pedir dinero en préstamo es O.K., pero devolverlo es antinacional y antipopular. De esa forma, el pueblo argentino ha sido deseducado en buena proporción, y eso causa inseguridad porque a la gente se la roba básicamente desde el Estado Nacional. El mismo que debiera protegernos, nos empobrece, porque el obstinado pueblo peronista no aprende hasta hoy, que el autoritarismo populista no sirve, que es mejor tener gobiernos serios que roben poco (casi siempre hay algún bandido gobernando, miremos a España y Francia como ejemplos pésimos) y hoy por suerte, la Presidenta tendrá que enfrentarse frente a su propio espejo, y ver si se siente capaz de continuar mintiendo a la gente hasta el diez de diciembre de 2013, cuando termina su mandato presidencial. Y para entonces, si no logra ser electa diputada nacional, perderá su sus fueros y podrá ser llevada a la Justicia, como en teoría debiera hacerse, según la Constitución.

Al momento de votar el 27 de octubre próximo para nuevos diputados, senadores, gobernadores, intendentes y concejales, espero loa gente sepa diferenciar entre los que estuvieron bajo el mando de Fernando de la Rúa, Nestor y Cristina Kirchner, para no votarlos, porque ningún funcionario de nivel podía ignorar que desde las cúpulas de robaban en forma escandalosa, y hasta se falseaba la contabilidad y el INDEC, el indice nacional de precios.

Pero sin jueces serios e independientes, especialmente en la Corte Suprema de Justicia Nacional, jamas podremos impedir ser avasallados por el Gobierno de turno, porque existe un pacto mafioso implícito: la mayoría de la actual Corte Suprema existe gracias a los Kirchners… Y el peronismo, en cualquiera de sus camaleónicas versiones, es confiable, ya que siempre nos mintió y/o nos robó. Como en realidad es un movimiento militarista fascista en su origen, la democracia que propugna Cristina es falsa, tanto como la contabilidad del Banco Central.

ARGENTINE UPDATE – Sep 23 and 24, 2013

24 septiembre, 2013


9. ARGENTINA: COUNTRY OUTLOOK (Economist Intelligence Unit – ViewsWire)

September 23, 2013
BUENOS AIRES, Argentina — A Roman Catholic priest who was convicted in Argentina of sexually abusing a boy has finally begun serving a 15-year sentence in prison.
Father Julio Cesar Grassi was something of a star in the Buenos Aires diocese, well-known for persuading Argentine celebrities to donate to the Happy Children Foundation.  His fortunes changed after some of the orphans he cared for accused him of abusing them in 1996.
Grassi was convicted in 2009, but was able to keep living across the street from the orphanage while he appealed. After the top provincial court upheld his sentence last week, Grassi was taken into custody Monday.  The 57-year-old priest still maintains he is innocent. His final appeal to Argentina’s Supreme Court will be made from behind bars.
By Benedict Mander
September 23, 2013
It’s not as if anyone was in any great doubt about the dubious practices of Argentina’s commerce secretary, Guillermo Moreno.
But a recording of him released on Sunday in which he none-too-subtly suggested businessmen should make contributions to a “solidarity fund” for people affected by serious floods in La Plata earlier this year did little to diminish Moreno’s negative image.  According to the presenter of the programme on which the recordings were aired, Argentina’s chief muckraking journalist Jorge Lanata, the flood victims in La Plata, the capital of the province of Buenos Aires, have not seen a penny from this fund.
It comes at a time when Moreno is already on the back foot, after a judge decided to prosecute him last week for “abuse of authority” by “illegally” and “arbitrarily” sanctioning private sector economists for publishing inflation figures that contrast drastically with numbers released by the long discredited state-run INDEC statistics office.
Even government officials have admitted lately that the INDEC’s figures are not a close reflection of reality, and this weekend is the deadline given by the IMF for Argentina to improve the accuracy of its data.
Moreno’s plight also comes at a particularly inconvenient time for his boss, President Cristina Fernández. She too is on the back foot after her party’s candidates performed poorly in primaries last month ahead of important mid-term legislative elections on October 27th.
The last thing she needs to deal with is another corruption scandal, just as Argentina’s imperious leader is trying to endear herself to the people in a fireside chat recorded a few weeks ago that is being broadcast in weekly half-hour installments on state television – the first interview she has given in four years.
Some are even speculating that this could mark the end of Moreno’s reign as commerce secretary. One well-connected local journalist reported senior government figures as saying that he has become too compromising a figure for Fernández and must go. Apparently, the announcement of Moreno’s prosecution was even cause for celebration in the central bank.
If Moreno is indeed forced out, they would not be the only ones to raise their glasses.
By Eliana Raszewski
September  23, 2013
Buyers of warrants tied to Argentina’s economic growth have at least 3 billion reasons to believe the nation is expanding faster than China.
The securities have jumped 15.6 percent this month to the highest level this year, versus a 3.8 percent gain for emerging-market government debt. The government, which in February became the first member of the International Monetary Fund to be censured for reporting inaccurate data, said Sept. 20 that the economy grew 8.3 percent in the second quarter. That exceeds China’s 7.5 percent growth and would be the fastest in the world apart from Macao, according to data compiled by Bloomberg.
President Cristina Fernandez de Kirchner has boosted spending and subsidies ahead of congressional elections next month and the 2014 budget showed the government projects growth of 5.1 percent this year. While former central bank President Martin Redrado says the data is being inflated to garner more votes and the economy is actually expanding at less than half that rate, the official estimate surpasses the 3.22 percent needed trigger an estimated payment of $3 billion.
“For investors, what matters is the official reports and we see that the government is triggering a GDP warrant payment,” Hernan Yellati, head strategist at BancTrust & Co. said in a telephone interview in Buenos Aires. “This strategy of showing growth that is likely higher than the real one is an expensive one.”
Growth Outlook
Presidential spokesman Alfredo Scoccimarro and Norma Madeo, a spokeswoman for the Economy Ministry, didn’t return an e-mail and phone calls seeking comment on the accuracy of official data and the likelihood of a warrant payment.
The government would have to report a contraction of at least 3 percent in the third and fourth quarter from the previous quarters to miss the payment, according to Luciana Carcione, an economist at Orlando Ferreres & Asociados.
Opposition lawmakers said Sept. 19 the economy grew 5.4 percent in the second quarter from a year earlier and 3 percent in the first half, according to a report that compiled private estimates from 12 economic research firms.
Payments on the warrants are triggered when Argentina’s economy meets pre-established growth targets. Coupons are paid in December of the following year. The securities, which pay no interest and were issued as part of the nation’s debt restructurings following the 2001 default, rose 0.36 percent to 8.48 cents on the dollar at 12:53 p.m. in Buenos Aires, the highest this year.
‘Look Cheap’
Last month, Credit Suisse Group AG raised its 2013 growth forecast to 3.7 percent from a previous estimate of 3 percent and said holders of the securities will get a payment of 5.7 cents in 2014. Of 22 analysts surveyed by Bloomberg, 10 estimate growth this year will surpass the threshold for payment.
“GDP warrants valuations are attractive,” Credit Suisse’s strategist Daniel Chodos wrote in the Aug. 19 report, when he raised the growth forecast. “Optionality on Argentina’s future growth looks cheap.”
The country will have to pay about $3 billion to the warrant holders in December 2014, BancTrust’s Yellati said.
Since 2010, the country has tapped about $39 billion from central bank reserves to make debt payments. The 2014 budget bill includes a plan to use a record $9.86 billion in reserves for next year’s obligations. Reserves have tumbled 18.8 percent this year to $35.02 billion on Sept. 20.
Argentina’s budget bill sees the economy expanding 6.2 percent in 2014, above the 3.03 percent that triggers a payment in 2015. Government estimates exceed IMF forecasts of 2.8 percent this year and 3.5 percent in 2014.
IMF Doubts
“Alternative data sources have shown significantly lower real growth than the official data since 2008 and considerably higher inflation rates than the official data since 2007,” the IMF said in a footnote on its April’s World Economic Outlook. “In this context, the IMF is also using alternative estimates of GDP growth and CPI inflation for the surveillance of macroeconomic developments in Argentina.”
Redrado, who runs Buenos Aires-based MR Financial Services, said that official data is inflated as the government tries to show an economic rebound before Oct. 27 mid-term elections.
“There will be a revision of growth data in the last quarter because Argentina doesn’t have enough dollars to make the warrant payment,” Redrado said in a telephone interview. “It would be a wasteful payment.”
Argentina’s five-year credit-default swaps, contracts that protect the nation’s bondholders against non-payment, fell 71 basis points, or 0.71 percentage point, to 2,276 basis points at 11 a.m. in New York, according to data compiled by CMA Ltd. The peso fell 0.2 percent to 5.7719 per dollar.
‘Crazy’ Payment
The extra yield investors demand to hold Argentine government dollar bonds instead of U.S. Treasuries fell one basis point to 1,036 basis points, according to JPMorgan’s EMBI Global Diversified index.
Since the warrants were first issued as part of the country’s debt restructuring in 2005, investors have received six payments totaling 18 cents as Argentina averaged growth of 7.4 percent. The securities can pay a maximum of 48 cents until they mature in 2035, or a total of $480,000 for a notional amount of $1 million. The government paid $3.5 billion in 2012 to warrant holders.
Argentina has decided to ease some import restrictions this year to prioritize growth before the mid-term elections, said Rodrigo Alvarez, an economist at Analytica research firm in Buenos Aires. The government won’t under report growth enough in the fourth quarter to miss the payment, he said.
“It’s crazy for Argentina to lose 10 percent of its reserves for lying with its data,” he said. “But I don’t see the government showing a violent drop in activity to avoid the payment.”
By Ken Parks
23 September 2013
BUENOS AIRES–Argentina’s trade surplus fell 59% on the year to $568 million in August, owing to stagnant exports and a surge in imported goods like fuel, the government said in a report Monday.
Argentina depends on trade to provide the U.S. dollars it needs to replenish its foreign currency reserves. President Cristina Kirchner uses those reserves to pay her government’s creditors and to buy critical imports like natural gas.
Exports were almost unchanged on the year at $7.74 billion in August, as a drop in prices offset higher volumes of shipped goods, according to the national statistics agency, Indec.
Imports rose 14% to $7.17 billion, owing to a 12% increase in price and a 1% gain in volume. Imported fuel and automobiles posted the biggest gains, Indec said.
During the first eight months of the year, the trade surplus fell 32% to $6.29 billion even as Argentine farmers enjoyed one of their largest soybean harvests on record. Argentina is the world’s No. 3 soybean exporter, and the leader in soyoil and soymeal exports.
Argentina’s energy needs were a major drag on the trade surplus, with the energy deficit more than doubling to $5.41 billion during that eight-month period. In 2011, the country became a net energy importer for the first time in almost 20 years due to underinvestment in its oil and gas sector.
With the last few months of the year a seasonally slack period for exports, Argentina looks hard-pressed to meet the government’s target of a $10.6 billion trade surplus in 2013. The government originally forecast a surplus of more than $13 billion this year.
The administration of President Kirchner limits imports and rations the dollars that people and businesses can buy to protect the central bank’s reserves. With inflation running above 20% for years, Argentines are eager to exchange their pesos for the perceived safety of the dollar.
Argentina’s politically sensitive trade deficit with its biggest trading partner, Brazil, narrowed 17% to $1.33 billion during the January-August period.
Brazilian Industry Minister Fernando Pimentel told Brazilian lawmakers Wednesday that Argentina has stepped up protectionist measures to boost its trade surplus.
By Charles Newbery
23 September 2013
Argentina’s central bank this week likely will continue selling dollars to sustain a gradual depreciation of the peso in the run up to the October 27 congressional election.
The bank sold an estimated $400 million in the first three weeks of September, compared to $345 million sold in all of August.
Demand for greenbacks is rising on concerns that a stagnant economy and worsening inflation could lead to a faster depreciation of the peso, which would reduce consumer spending power while also raising the risk of job losses and slower wage growth.
The peso has depreciated 23% to 5.7578 to the dollar over the past 12 months, twice the pace of the previous year-on-year period, according to central bank data.
Economists expect the peso to hit 6.18 by the end of 2013, according to a survey by Consensus Economics, an economic survey organization, worse than the 5.68 economists had expected for the same period when surveyed a little less than a year ago.
At that time it was thought the Cristina Fernandez de Kirchner administration would use the exchange rate as a mechanism for keeping a lid on inflation. Instead, her government has accelerated peso depreciation and turned to price controls to try to contain consumer prices, prompting economists to forecast the faster depreciation.
Another factor is a faster-than-expected depreciation of Brazil’s currency, which has forced Argentina to respond to keep pace with its largest trade partner.
The quicker depreciation of the peso also is designed to reduce the loss of hard-currency reserves, needed for the government’s foreign debt payments. Reserves have dropped 19% this year to $35.1 billion, the lowest since March 2007.
Argentina still cannot readily access global markets because of potential lawsuits by creditors seeking repayment on 7% of the bonds still in arrears from a nearly $100 billion default in 2001.
The government expects the peso to trade at an average of 6.33 to the dollar in 2014, according to a draft of the national budget now under congressional review. But private economists forecast it will hit 7.26 by the end of 2014.
Economists also expect the economy to grow by 3.4% in 2014 – in line with the 3% expected for this year – far less than the 8% average expansion between 2003 and 2011, helped by high prices for the country’s top export – soybeans – and because the economy was recovering from a deep recession in 2001 and 2002.
Inflation is expected to accelerate to 26.1% in 2014 from 24.8% this year, according to the Consensus Economics survey.
Faced with the depreciation, banks this week likely will continue to increase interest rates to maintain deposits and liquidity. The 30-day CD rate on large deposits last week rose to 17.1% – the highest this year – from 14.5% at the start of the month and 13.5% at the beginning of the year.
The need to hold on to deposits comes as lending grows at faster than deposits. Lending grew 37% in the 12 months ending Aug. 30, quicker than the 28% growth in deposits over the same period, according to central bank data.
The government will report August trade data Monday followed the next day by industrial production for the same period. Out Wednesday is data on August supermarket and shopping mall sales, followed Friday by July economic activity.
23 September 2013
International analysts have raised doubts about the impressive growth figures released by Argentina’s discredited statistics agency Indec for this year’s second quarter.
Indec said on Friday (Sep 20) that according to its preliminary estimates the economy had expanded 8.3% year-on-year (y-o-y) in 2Q13 and 2.6% quarter-on-quarter (q-o-q) in seasonally adjusted terms. In the first six months, the Argentine economy grew 5.8% y-o-y, according to Indec’s figures.
The y-o-y figure marks the fourth consecutive quarter of positive yearly growth since the economy decelerated to no growth during 2Q12, said Goldman Sachs (NYSE: GS) in a research note.
The expansion in the quarter was led by the country’s important agriculture sector (growing 26.8% y-o-y) as well as by growth across the board in all of the economy’s major sectors.
Indec’s inflation and GDP figures have been questioned for several years and in February the IMF imposed a censure on Argentina for failing to provide credible economic numbers.
“Argentina’s Q2 GDP data give a misleading impression of the health of the economy. While it is true that activity has recovered following last year’s stagnation, the official figures drastically overstate the extent of the rebound,” said Capital Economics in a report. “What’s more, growth has been propped up by temporary factors which may start to fall away in the coming quarters.”
Capital Economics said that its own Argentina Activity Indicator (AAI) – which draws on data produced outside of Indec – suggests that GDP growth was closer to 4.5% y-o-y in the second quarter. “That’s by no means a bad performance, but it is still only half as strong as the officially reported rate!”
Goldman Sachs for its part noted that due to Indec’s lack of credibility some opposition members of congress have begun to publish their own GDP indicator based on private sector estimates.
This indicator shows that the Argentine economy grew 5.4% y-o-y in the second quarter and 3% in the first half. “Hence, accumulated growth according with these figures is almost 3% lower than official estimates,” the US investment bank pointed out.
Based on the Indec figures, Goldman Sachs said that it had upped its GDP growth forecast for this year to 5.6% from 4.2%. “The official numbers already set an elevated floor for economic growth for the remainder of the year, which would probably surpass both the latest official projection of 5.1% yoy for 2013 and the threshold for coupon payment on the GDP warrants (3.22% yoy),” the bank added.
Capital Economics said that early monthly data from its AAI indicator points to the third quarter shaping up to be another solid quarter for Argentine GDP growth and that its “best guess” is for the economy to expand at around 3.0% y-o-y in 3Q13.
However, the London-based research firm then sees a slower pace of growth kicking in by the fourth quarter as some of the government’s fiscal stimulus is likely to be unwound after October’s mid-term congressional elections.
The firm said that the strong performance of the agricultural sector so far this year is mainly due to a weather-related boost which is set to fade in the coming quarters. It also noted that the country’s manufacturing sector is unlikely to see a strong rebound ahead as rampant inflation continues to weigh on the international competitiveness of local producers.
Based on its own figures, Capital Economics said that for now it is sticking to its 2013 GDP growth forecast of 2.0%.
23 September 2013
Authorities from Neuquén province in Argentina, home to the world class Vaca Muerta shale formation, signed a non-binding letter of intent (LOI) with German company Basf’s (NYSE: BF) subsidiary Wintershall on Monday, Wintershall spokesperson Stefan Leunig told BNamericas.
Due to the capital and know-how required to develop unconventional plays in Argentina, foreign funding and expertise are needed.
Neuquén provincial governor Jorge Sapag traveled to Germany to secure partnerships with firms interested in investing in the oil and gas, wind power and potassium mining industries.
The president of provincial oil and gas company Gas y Petróleo del Neuquén (GyP) and provincial energy minister Guillermo Coco, is traveling with Sapag to Kassel, where Wintershall is headquartered, and Frankfurt, along with other executives of GyP, according to a provincial government press release.
After Argentina’s state oil company YPF (NYSE: YPF) secured a US$1.5bn partnership for a pilot program on Vaca Muerta with Chevron (NYSE: CVX) in July, GyP and Wintershall hope to sign a commercial contract and a joint venture for the exploration and a possible development of a portion of the shale play. Exploration activities on the 97km2 Aguada Federal block of the Aguada del Chañar area should receive final approval from the Basf board of directors in October, said local papers, citing sources close to the deal.
“Gas y Petróleo del Neuquén will keep the ownership of the exploration permit and eventual exploitation concession, while Wintershall will have a 50% participation in the joint venture agreement and will be the operator of the area” Leunig told BNamericas.
Confidential negotiations have been taking place between GyP and Wintershall for the past six months, according to local reports.
GyP, in partnership with EOG Resources (NYSE: EOG) and Schlumberger (NYSE: SLB), plans to frack its first well in the Aguada del Chañar field in October.
Russia’s Gazprom is rumored to be negotiating its entrance into the Argentine shale boom through a partnership with Wintershall as part of an asset swap with Basf.
Sapag is also expected to meet with potash producer K+S and renewables developer ABO Wind on his trip.
By Laurence Allan
23 September 2013
The official opening of campaigning for Argentina’s 27 October mid-term legislative elections began yesterday (22 September), with leading opposition candidate Sergio Massa coming under attack from government supporters in greater Buenos Aires. Massa was campaigning for his Renovation Front (Frente Renovador) electoral list in the district of La Matanza, south-central greater Buenos Aires, when his vehicles were surrounded by government supporters who began shouting insults and throwing eggs at him, before graduating to throwing stones and rocks. Massa was hit by a stone but was not seriously injured.
Significance: The attack on Massa’s campaign caravan took place in one of the single most important electoral districts in Argentina, and a stronghold of support for President Cristina Fernández de Kirchner. Whilst Kirchnerist mayor of La Matanza Fernando Espinoza has condemned the violence directed at Massa, Massa himself has blamed his political opponent, the Buenos Aires provincial governor Daniel Scioli, for failing to ensure sufficient policing in the zone. The aggression towards Massa took place on the day that opinion polling indicated that his advantage over government candidate Martín Insaurralde has widened in recent weeks (see Argentina: 16 August 2013: ). Pollsters Management & Fit said that Massa now enjoys 44% approval, well ahead of Insaurralde on 33.7%. That data also indicates that recent government measures to lighten the tax burden on low- and lower-middle income Argentines and boost social spending for the same groups have been met with some cynicism. According to the polling data, around 57.7% of those polled believed the measures had been taken “to win votes in the elections”. With Massa’s popularity and voter cynicism over government strategy high, the threat to Kirchner’s control over congress is likely to drive sporadic violence between government loyalists and opposition supporters especially in ‘Kirchnerist’ electoral districts in greater Buenos Aires targeted by the opposition as potentially winnable, notably in the southern belt of greater Buenos Aires.
 9. ARGENTINA: COUNTRY OUTLOOK (Economist Intelligence Unit – ViewsWire)
23 September 2013
POLITICAL STABILITY: With attention focused on the October 27th mid-term congressional election and on the question of a potential successor to the president, Cristina Fernández de Kirchner, the government is continuing to struggle amid periodic strikes and public demonstrations. To the president’s benefit, second-quarter data show economic activity picking up more firmly. In Argentina’s clientelist political system, this should in theory be enough to boost Ms Fernández’s ratings, leaving her allies well placed to contest the mid-term election. However, there are other factors at play. The president continues to take an uncompromising stance against any criticism, and has now alienated almost all of the country’s most influential groups, including the judiciary, the unions, the media, the Catholic Church and the Partido Justicialista (PJ, the Peronist party, which dominates nationwide politics). In recent weeks there have been signs that her support within the legislature and among the country’s powerful provincial leaders is starting to slip away, and that politicians are now jostling for position in the race to succeed her as president in 2015.
ELECTION WATCH: Ms Fernández has lost voter support and alienated much of the political class outside her inner circle. On top of this, it is becoming clear that the president will be unable to run again for president in 2015, a fact that alters the dynamics of the October mid-term election. A proposed constitutional reform allowing Ms Fernández to run again has proved unpopular with voters and is extremely unlikely to obtain the two-thirds majority in Congress required to pass. As a result, key politicians are now vying for position in the presidential race. One of these is Sergio Massa, the popular mayor of Tigre and an up-and-coming Peronist politician who recently broke ranks with the ruling Frente para la Victoria (FV, a leftist faction of the PJ). Mr Massa will head the electoral list of a new, anti-government Peronist faction that has attracted support from across the political spectrum ahead of the mid-term election. Meanwhile, having presided over a highly centralised system of power that has alienated traditional Peronists and created a lack of viable candidates from within her own ranks, Ms Fernández has been forced to choose a relative unknown to head the FV’s electoral list at the mid-term election. Although the opposition vote could still be split among a number of candidates, The Economist Intelligence Unit expects Ms Fernández to lose her simple majority in the Senate (the upper house) in October. Nonetheless, she may still hold onto control of the lower house. This is partly because, despite her declining popularity and growing policy challenges, governors in cash-strapped provinces will remain reliant on central-government transfers (and thus on Ms Fernández’s support) to stave off fiscal difficulties.
INTERNATIONAL RELATIONS: The potential for diplomatic and trade disputes will remain high. The government has repeatedly shown itself willing to provoke disputes with key partners in pursuit of its policy goals, and we do not expect this to change. Relations with Spain and the EU were badly damaged by the nationalisation in 2012 of YPF, an energy company formerly majority-owned by Spain’s Repsol. Argentina’s relations with its neighbours in the Mercado Común del Sur (Mercosur, the Southern Cone customs union), including Brazil, have also worsened amid a deteriorating climate for trade and investment in Argentina. Moreover, there are tensions with multilaterals and with the US government over Argentina’s lack of compliance with the World Bank’s International Centre for the Settlement of Investment Disputes and with the IMF’s articles of agreement. A breakdown of relations with the IMF, and with the US and Europe, would scupper efforts to agree a debt workout with Paris Club creditors, and would further complicate access to investment guarantees and to much-needed multilateral lending.
POLICY TRENDS: Far from solving the underlying competitiveness problems that are weakening the external sector and increasing the country’s vulnerability to a new currency crisis, the government’s heterodox, interventionist economic policies will instead impair investment and growth. Policymaking problems stem from the expansionary fiscal and monetary policies of recent years, which have exerted upward pressure on inflation and wages, and eroded currency and labour-market competitiveness. This has resulted in the deterioration of the current-account surplus, which, combined with restricted access to international capital markets and chronic capital flight, has heightened speculation over peso devaluation. Rather than undertaking any politically difficult fiscal or monetary tightening in response, the government has increasingly resorted to foreign-exchange, trade and capital controls–alongside unpredictable interventionism–in its efforts to keep economic distortions in check. However, its efforts are undermining confidence in the economy while failing to address the underlying problem of an increasingly overvalued peso.
ECONOMIC GROWTH: Our GDP growth forecast for 2013 remains at 4.3%. The first-half activity data were good, and there has been a strong pick-up in consumer confidence. The strong agricultural harvest will have had a knock-on effect on employment, and there has been a renewed acceleration of consumer credit (amid the trapped liquidity created by exchange controls). Furthermore, a retail price freeze for much of first-half 2013 will have encouraged consumers to bring forward purchases. On this basis, we expect private consumption growth to reach 4.7% in 2013 (higher than in 2012). However, we still expect the impetus to growth to weaken in late 2013 on the basis that business confidence remains weak, and as the boost from the strong agricultural harvest fades. With the external picture also deteriorating (we have recently revised downwards our growth forecasts for Brazil and China), we now expect GDP growth to average just 2.7% in 2014-15, against a backdrop of unaddressed competitiveness problems. Combined with continued recourse to heterodox, interventionist economic policies–which will sustain uncertainty over tariffs, controls, and the legal and regulatory environment–this will increasingly impair confidence, investment, employment, and purchasing power. Economic performance in 2016-17 will hinge on the environment after the 2015 elections. Our forecasts are based on the most likely scenario of a change to a more pragmatic, business-friendly government, which would engender greater confidence in the rules of the game and work to eliminate economic distortions, albeit gradually. Under these assumptions, we expect investment growth to accelerate and for GDP growth to rise to 4% by 2017.
INFLATION: The official inflation data are widely discredited, and we continue to use alternative estimates produced by an inflation-monitoring company, PriceStats, as the basis for our forecasts. According to PriceStats data (which are based on Internet prices and are roughly in line with local private and provincial estimates), inflation fell in early 2013 on the back of a recent temporary freeze in food and petrol prices ahead of the October election, to a low of 17.5% in May. However, as expected, it picked up again strongly at mid-year as the price freeze ended, and we project that it will end 2013 at 22.8% and accelerate to 24.4% by end-2014, given still-loose macroeconomic policy and persistent supply constraints. Even assuming that weaker domestic demand gradually produces some modest disinflation later in the forecast period, annual inflation will remain in double digits.
EXCHANGE RATES: Amid a continued fall in reserves, the authorities have insisted that a devaluation of the official exchange rate is not on the cards, but the managed depreciation of the exchange rate has accelerated in recent months and will produce a fall in the value of the peso of close to 20% this year. This “devaluation by stealth” means that in real trade-weighted terms, the peso will depreciate (albeit by just 1%) this year for the first time in five years. However, this will do little to reverse the accumulated real trade-weighted appreciation of 45% in the preceding five years. In these circumstances, strong soybean output and supportive soybean prices will remain crucial to staving off pressures for a much larger devaluation. Even under our benign baseline forecast, inflation will come under control only very gradually, and so devaluation pressures will persist–despite controls–in the medium term. In this context, there are substantial risks that the peso will weaken much more than currently forecast (by close to 20% per year in 2014-15 and around 10% per year in 2016-17).
EXTERNAL SECTOR: Despite this year’s good agricultural crop and a host of foreign-exchange, import and capital controls, the current account is deteriorating. We now expect it to post a small deficit this year, and to widen thereafter, reflecting a weakening of the trade and services balances owing to real currency appreciation. By 2017 we expect a current-account deficit of 2.6% of GDP. Portfolio and foreign direct investment inflows will be deterred by a weak legal framework and speculation over peso devaluation (we expect continued capital flight). Reserves coverage will be weakened further by the use of reserves to shield the peso and repay external debt.

Monday, September 23, 2013
By Charlie Devereux and Eliana Raszewski
September  20, 2013
Argentina’s economy expanded at the fastest pace in about two years last quarter, boosting the chances that holders of securities linked to the country’s growth will be paid as much as $3 billion next year.
Gross domestic product expanded 8.3 percent from a year earlier, according to a report released today by the national statistics institute, compared with the 7.0 percent median estimate of nine economists in a Bloomberg survey.
President Cristina Fernandez de Kirchner is fueling growth by boosting spending and subsidies to fuel consumption ahead of congressional elections next month. Argentina’s economy needs to grow more than 3.22 percent to trigger an annual payment to holders of the country’s GDP warrants.
The International Monetary Fund in February censured Argentina for failing to report accurate data on inflation and GDP. Opposition lawmakers publish a monthly inflation report that shows consumer prices rising at more than double the 10.5 percent rate reported by the government.
Lawmakers opposed to the government released a report yesterday based on 12 forecasts by private economists that estimated growth at 5.4 percent in the second quarter. The economy grew 2 percent from the first quarter, they said.
International Reserves
“The government needs to stop lying because that will cost us about $3.8 billion in payments next year, and the truth is that we don’t have enough money,” opposition lawmaker Federico Pinedo told reporters yesterday. “This payment would lead to a significant drop in international reserves, would mean a biggest unbalance and we are concerned about the solvency of the central bank.”
Central bank reserves have fallen to $35.1 billion yesterday from about $45 billion a year ago.
Payment for GDP warrants based on this year’s growth will be made in December 2014, according to the bond prospectus.
Argentina posted a current account surplus of $650 million in the second quarter, compared with a revised surplus of $1.2 billion a year earlier.
The peso, whose rate is managed by the central bank, has weakened 15 percent this year. The currency was little changed today at 5.7604 per dollar.
Argentina, the world’s biggest exporter of soybean derivatives, produced 49.3 million metric tonnes during the 2012-2013 soybean season, the second-largest ever harvest, according to preliminary estimates by the Agriculture Ministry.
Export revenue from grains and oil seeds was $18.4 billion as of Sept. 13, compared with $23.1 billion in the whole of 2012, according to the Association of Grain Exporters.
2. ARGENTINA’S 2Q GDP +2.6% ON MONTH; +8.3% ON YEAR (Dow Jones Top News & Commentary)
By Taos Turner
20 September 2013
Argentina’s government on Friday reported that its economy grew a blazing 8.3% in the second quarter from the same period a year earlier.
The growth estimate is likely to be cheered by investors who hold securities tied to Argentina’s economic growth. The government makes annual payouts on those securities, known as GDP warrants, anytime the economy grows more than 3.26% during the previous calendar year.
“Hello, holders of GDP warrants. Yes, it’s now time to uncork [the champagne],” said a note posted on the Twitter account of Ariel Sutton, an economist at the University of Buenos Aires.
The national statistics agency, Indec, said growth was higher because of a 16.2% increase in investment and an 8.6% increase in public-sector consumption. Private-sector consumption was up 9.2% on the year, according to Indec.
Meanwhile, exports of goods and services were up 4.4%.
Indec said the economy grew 2.6% from the previous quarter.
Earlier this month, Argentina’s central bank president said the economy would grow about 4% this year. Even so, the official 2014 budget presented to Congress last week forecast a 5.1% increase in economic growth this year. The same budget forecast that the economy will expand 6.2% next year.
Economists are increasingly skeptical about the accuracy of the government’s economic growth data, though. Many say the government is now overestimating growth by around three percentage points.
A survey of analysts by FocusEconomics earlier this month put Argentina’s economic growth this year at 3.7% and at 2.5% next year. Both estimates are far below the government’s official forecasts.
Economists say problems with the government’s economic data stem from the reshuffling of personnel at the national statistics agency in 2007. That’s when then-president Nestor Kirchner replaced civil servants at the agency with political appointees.
By Charles Newbery
20 September 2013
Buenos Aires (Platts)–20Sep2013/945 am EDT/1345 GMT   Argentina’s state-run energy company YPF plans to sell up to $150 million in dollar-denominated bonds next week to raise financing to help rebuild oil and natural gas production after a decade of decline.
The sale of $50 million of five-year bonds will be held September 26 and will be increased to $150 million depending on demand, according to a filing with the Buenos Aires Stock Exchange late Thursday.
The bonds are to pay a floating exchange rate of Libor plus 7.5%.
YPF plans to spend $37.2 billion through 2017 to increase oil and gas production, which has been declining 6% a year over the past decade, by 35%.
The company has said it will focus on squeezing more out of maturing conventional reserves with enhanced recovery techniques and on developing the country’s shale resources, thought to be among the world’s largest.
YPF has teamed up with Chevron on a $1.5 billion project largely financed by the US company to develop shale resources in the Vaca Muerta play. YPF is in talks with Dow Chemical’s Argentina unit and other companies on other shale projects.
YPF said it will offer the bonds on the Buenos Aires Stock Exchange, but added that the securities will be governed by New York law and that buyers can get paid abroad.
This is seen as an incentive to investors that repayment will be more certain given the country’s lack of creditworthiness. Argentina defaulted on $100 billion on bonds in 2001 and has yet to fully settle, exposing the country and state companies to possible asset seizures and lawsuits by creditors.
YPF said the bond payments are guaranteed by YPF’s exports of diesel, fertilizers, lubricants and other products.
By Hugh Bronstein
20 September 2013
* Too much soy planting, not enough corn, threatens soils
* Fertilizer group sees 2013/14 soy area at 18 mln hectares
* Con area seen at 4.5 mln hectares, wheat at nearly 4 mln
* World grain prices hit by fat crop production expectations
BUENOS AIRES, Sept 20 (Reuters) – Argentina is planting too much soy and depleting soils that need crop rotation to keep their nutrients, the head of the country’s fertilizer industry chamber told Reuters on Friday, raising an alarm in the world’s No. 1 soyoil and soymeal exporter.
The oilseed will dominate Argentina’s key farm sector again this season followed by corn and wheat, according to fertilizer sales showing growers intend to plant the country’s three main crops in proportions similar to the previous year.
Lower quality soils cause lower crop yields and in turn lower farm profits and government revenue. Locked out of the international capital markets since its 2002 sovereign default, the Argentine government depends on agricultural tax revenue to fund President Cristina Fernandez’s expansive social programs.
“Argentina is in a critical situation in terms of lack of crop rotation and soil sustainability,” said Maria Fernanda Gonzalez Sanjuan, head of the Fertilizar chamber. The group represents 27 companies that produce, import and sell fertilizers in the South American grains powerhouse.
“Growers are planting too much soy because they want to reduce their risks,” she added. “Soybeans are more resistant to bad weather and government policies in Argentina also favor soy over corn or wheat, both of which are subject to export limits.”
Farmers complain that the limits, which can be raised and lowered through the year, kill competition among buyers and make crop planning impossible.
Thirty-six percent of Argentina’s total 2.8 million tonnes in fertilizer sales this year have been for soybeans, equal to the proportion dedicated to the oilseed in the 2012/13 season, according to Fertilizar.
Argentina is the leading exporter of soyoil, used in the booming international biofuels sector, and soymeal livestock feed, used as far away as China where an expanding middle class is developed a taste for meal-fed beef, chicken and pork.
The South American country is also the world’s No. 3 supplier of soybeans and corn, as well as a big wheat exporter.
The price of all three crops has fallen this year due to hearty global output estimates, making Argentine farmers ever more keen to cut risk by focusing on weather-resistant soy.
Recent dryness in the Pampas farm belt has added to the jitters and deepened the trend away from planting corn, which is much more expensive to cultivate than soybeans.
Fertilizar expects Argentine farmers to plant 18.31 million hectares with soybeans in the upcoming 2013/14 season, down 3 percent from 2012/13. Wheat is already planted for Argentina’s 2013/14 season. Corn is going into the ground this month and next with soy to follow in November.
The chamber’s projections are based on fertilizer sales and a survey of the seeding intentions of about 1,200 growers.
Corn growers account for 28 percent of Argentine fertilizer sales so far this year, down a touch from 29 percent in the previous season, Fertilizar said. The group expects 4.47 million hectares to be planted with commercial use corn this year, up 2 percent from 2012/13.
Wheat fertilizer account for 20 percent for 20 percent of overall sales this year, just higher than 19 percent in 2012/13.
Fertilizar sees an 8 percent jump in 2013/14 wheat area to 3.95 million hectares.
Demand for wheat has soared in Argentina after the government approved abundant amounts of the grain to be exported based on optimistic 2012/13 production forecasts, leaving little in the country to be milled into bread.
Fernandez, re-elected in 2011 on promises of increasing government’s role in the economy, uses export curbs on wheat and corn to ensure ample domestic food supplies. The policy, widely criticized by farmers, backfired this year due to inaccurate early season crop estimates.
The U.S. Department of Agriculture has forecast Argentina crop production at a downwardly-revised 26 million tonnes of corn in the 2013/14 crop year, 12 million tonnes of wheat and 53.5 million tonnes of soy.
Soybean exports are not curbed in Argentina, but they are taxed at 35 percent. The farm sector generally disagrees with Fernandez’s policies, which include heavy foreign exchange controls and a passive approach to inflation, clocked by private economists at 25 percent, on of the highest rates in the world.
The threat of soil depletion in a major food supplier such as Argentina meanwhile risks robbing world consumers of crop yield growth. Global food demand is expected to double by 2050, according to the United Nations.
5. ARGENTINA MOST EXPENSIVE PLACE TO BUY IPAD, MALAYSIA CHEAPEST (The Wall Street Journal Online’s Real Time Economics blog)
By Tom Wright
23 September 2013
Consumers in Argentina pay the most globally for an iPad, more than double the cost in Malaysia, the world’s cheapest place to buy the Apple Inc. product.
A 16-gigabyte iPad with Wi-Fi and a retina display sells for $1,094.11 in Argentina, compared with $473.77 in Malaysia, according to CommSec, a unit of Australia’s Commonwealth Bank.
Other expensive places to buy an iPad include northern Europe and Latin America. (Brazil: $791.40; and Denmark: $725.32.)
CommSec has been keeping an iPod index since 2007 (it later added the iPad) as a way of monitoring whether currencies are valued appropriately.
The index is a way of exploring the economic concept of purchasing power parity. That is, a good should trade at the same price in different countries when expressed in the same currency given free markets.
In theory, price differentials between countries are not sustainable in the long run because of market forces that will prompt consumers and businesses to shop overseas for cheaper products.
But in reality, a number of factors, including import restrictions, freight and travel costs and local taxes mean the market does not work perfectly.
CommSec uses its table of prices to get a hint of whether currencies are in line with economic fundamentals. The currency of a country where goods are cheap relative to the rest of the world should rise as foreigners demand that currency to take advantage of arbitrage opportunities. In other words, that currency is undervalued.
CommSec looks at the Australian price of the iPad to see whether the Australian dollar is fairly valued.
Not surprisingly, the results are not clear-cut. The iPad costs $506.66 in Australia, the sixth cheapest place to buy the product in the world after Malaysia, Canada, the U.S., Hong Kong and Japan.
The cost of the iPad in Australia divided by the cost in the U.S. ($499) suggests a purchasing power parity exchange rate of around 1 Australian dollar per U.S. dollar.
The Australian dollar currently buys 94 U.S. cents, suggesting the currency is undervalued.
But looking at prices in China ($602.52), where many iPads are manufactured, Australia’s currency looks too costly. CommSec said it believes the results of its study roughly show the currency is currently fairly valued.
The Reserve Bank of Australia believes the Australian dollar is overvalued — the result of a decade-long mining boom.
The currency fell in August to a three-year low below 0.90 to the U.S. dollar as investors fretted about a falloff in global demand for Australia’s commodity exports. It has strengthened since then to a three-month high of $0.94.
A weaker dollar would help make Australia’s non-mining exports more competitive, taking up the slack from a falloff in mining activity.

Median Net Worth of Americans under 35 is now $3,662.  For ages 55 to 64 it is $162,065.


24 septiembre, 2013
—– Mensaje reenviado —–
Enviado: martes, 24 de septiembre de 2013 7:37
Asunto: Spring haiku by Sue
The French translations are by a poet friend in Brittany — Spanish are mine!  Happy Spring!
tambourine in hand
spring dances across the grass
hyacinths in her hair
pandereta en su mano.
Primavera baile sobre el pasto
jacintos  en su pelo.
rain falls silently
buds unfurl petaled glory
sun´s rays draw forth green
La lluvia cae suavemente.
Los pimpollos abren  su gloria de pétalos
os rayos del sol llaman al verde.
musical rain drops
lure notes from metal awnings
sentimental spring
gotas de lluvia  musicales
tocan notas en los toldos de metal—
primavera sentimental.
Slender leaves bend low
dewdrops gently slide  toward earth
spring unfolds tulle clouds
hojas  delgadas se doblan
gotas de roció resbalan hacia tierra
primavera despliega nubes de tul

Les feuilles élancées plient l’échine
les gouttes de rosée glissent vers la terre
l’été déploie les nuages de tulle

come quickly sweet spring
snow drapes trees with old bed sheets
brooks sleep beneath ice
venga rápida dulce primavera
la nieve arropa árboles con sabanas viejas
el arroyo duerme bajo hielo
spring night chimes with stars
cloud wisps drape shawl around moon
breeze lifts willow’s curls
noche de primavera resuena con estrellas
jirones de nubes envuelvan la luna en un chal
brisa levanta los rulos del sauce
les soirs de printemps résonnent avec des étoiles
un filigrane fait de nuages drape son châle autour de la lune
et la brise souleve les bouclettes d’un saule pleureur
slow rain kisses earth
with a lover’s tenderness
thirsty roots drink deep
Lla luvia lenta besa a la tierra
con la ternura de un amante.
Raíces sedientos beben profundamente.
gnats dance spring ritual
genial garden toad waits
bright eyes observant
Zancudos negros bailan el ritual de la primavera.
Afable duende del jardín espera,
ojos luminosos observantes..
Moi et les trois chats joyeux =*&gt;:) devil=  =*&gt;:) devil=  =*&gt;:) devil=


23 septiembre, 2013

—– Mensaje reenviado —–

De: helena
Enviado: domingo, 22 de septiembre de 2013 21:54
Asunto: FW: Desde Israel

Trabajemos por la paz. Merece difundirlo 




22 septiembre, 2013

Es interesante el artículo que no me convence por ser dirigista o por no entender yo a los economistas argentinos manipuladores de la economía.  Siendo para mi el dinero – o “moneda” algo fundamental para el funcionamiento social y político, ademas de económico, lo importante es “medir” el valor de todos los bienes y servicios que existen en el planeta tierra, utilizando aquel valor que se considera mas estable a lo largo del tiempo. Hasta comienzos del siglo XX, el otro funcionó como patrón monetario exitoso, aunque también la plata había sido útil antes, especialmente en Gran Bretaña. Mas la globalización entiendo provocó la Gran Recesión mundial de 1929, que llegó a Argentina un año mas tarde. Y pareciera que desde entonces, el metal ORO ya no permitió seguir siendo usado como “unidad conveniente de medida” porque había poca cantidad dicho metal para utilizar en las transacciones globales. Por descarte, el dolar norteamericano se afianzó como moneda mas confiable del mundo, incluso no teniendo ya respaldo oro desde hace casi un siglo. Pero los norteamericanos saben vigilar que su símbolo monetario se mantenga lo mas estable posible, y cuando algún evento extraordinario exige emitir papel moneda en cantidades alarmantes – tipo una guerra – se desvaloriza el dolar en una porción razonable, que no impide que los norteamericanos y el resto del mundo sigan considerando al dólar como el sucesor del oro para medir valores constantes con seriedad.

Argentina no tenemos moneda seria, porque el negocio de los economistas dirigistas es aconsejar modelos foráneos de moneda, sin advertir que las instituciones nuestras no son tan firmes como las norteamericanas. Cualquier Presidente ladrón puede en Argentina ordenar al Banco Central que imprima dinero argentino en forma inflacionaria, y ni la Corte Suprema de Justicia Nacional, ni tampoco el Congreso Nacional tienen seriedad y capacidad moral o conocimientos para entender que sin moneda confiable, es imposible retener el ahorro nacional en el país, y atraer inversiones extranjeras serias.  Carlos Menem intentó usar al valor del dolar con su famosa convertibilidad de un peso igual a un dolar – cada peso convertible tenia un dolar físicamente depositado en fideicomiso con el Banco Central, para que los tenedores de pesos convertibles supieran que jamas el dinero argentino perdería valor frente al dolar, porque su valor era siempre el del dolar – mas el sistema fracasó después de Menem. Por dos razones: no se entendió que al usarse un patrón monetario extranjero para medir, era importante impedir que los bancos locales prestaran dinero a tasas excesivas. En Argentina con la convertibilidad, la tasa bancaria de interés en pesos convertibles llegó a ser de alrededor del 21% anual en dólares, algo alto y leonino, porque empobrecía a los deudores a costillas de los bancos acreedores. Por eso, Menem no lo advirtió, su sucesor de la Rúa tampoco, y la derecha peronista se las ingenió para hacerle un golpe de estado no militar para reemplazarlo por un Presidente no votado, que terminara con la convertibilidad, y ayudara a los amigos del Duhaldismo y Alfonsinismo a partir de enero 1 de 2002. Pero antes Fernando de la Rúa y Cavallo habían destrozado la credibilidad del sistema financiero argentino, con su criminal corralito bancario, desde el 1 de diciembre de 2001, que en pocos días motivó repulsa popular y dio  ocasión para expulsar suciamente al Presidente enfermo e inútil de la Rúa. Y también se expulsó a Adolfo Rodriguez Saa, el presidente interino, que cometió el “error” de decir desde el Congreso que mantendría el valor de la moneda (uno a uno con el dolar), y esa frase motivó que también lo expulsaran los archi devaluacionestas argentinos, para que se produjese el enorme ajuste monetario, que en a partir de enero 1 de 2002 en un día implicó devaluar el cien por ciento al peso frente al dolar, y para agosto de 2008, la devaluación llego a 4 pesos no convertibles pro dolar. Obligando así a que Duhalde tuviese que llamar a elecciones antes de lo planeado, ly bastó anunciar eso para que el precio del dolar bajase a tres pesos, circa. Tipo ce cambio que duro incluso los primeros años del kirchnerismo, pero terminó cuando los K, creyeron que habían inventado un gran sistema financiero para perpetuarse en el poder, y comenzaron a emitir dinero en forma creciente, y a NEGAR que existiera inflación.

Para tener economía sensata, habría en Argentina  que medir obligaciones y contratos con el valor o commodity mas serio posible, y sobre todo, cuya fabricación no dependa del gobierno argentino, porque es obvio que nuestros gobernantes utilizaran la emisión monetaria para seguir robando gratis a la sociedad.

Ergo, discrepo con el economista autor del articulo comentado: el dinero argentino tendrá que depreciarse frente al dolar y las demás monedas serias y también frente a las restantes commodities. Aunque los economistas argentinos digan lo contrario, el ajuste tendrá que venir, porque la economía argentina durante el kirchnerismo y cristinismo ha sido saqueada por presidentes incapaces, El y Ella, y las cuentas no cierran porque nadie las controla. En octubre 27 próximo la sociedad votaremos diputados y algunos senadores nacionales, y esperemos que los kirchneristas pierdan votos, porque han cometido demasiados errores y delitos. Ojo, emitir dinero en forma abultada sin permiso del Congreso es delictivo, y aunque la Justicia no lo acepte como tal, esa emisión es fraudulenta y se usa para enriquecer a pocos amigos del Poder, a costa de la desvalorización del dinero con el que se pagan los salarios y las pensiones a los jubilados. Muy pocos demasiado ricos, y una enorme cantidad de gente que vive  peor de lo que estaría si hubiésemos tenido gobernantes sensatos y honestos durante la era kirchnerista.


22 septiembre, 2013



—– Mensaje reenviado —–
Enviado: sábado, 21 de septiembre de 2013 17:04
Asunto: Scam directed at Older Men Scam – some advice
Moi et les trois chats joyeux =*&gt;:) devil=  =*&gt;:) devil=  =*&gt;:) devil=
A scam directed at vulnerable Older men scam…… Ladies, please warn the men in your life about this.

Women often receive warnings about protecting themselves at the mall

and in dark parking lots, etc. This is the first warning I have seen for men.
 I wanted to pass it on in case you haven’t heard about it.

A ‘heads up’ for those men who may be regular customers at Lowe’s,

Home Depot, Costco, or even Wal-Mart. This one caught me totally by
 surprise.  Over the last month I became a victim of a clever scam while
 out shopping. Simply going out to get supplies has turned out to be
quite traumatic. Don’t be naive enough to think it couldn’t happen to
 you or your friends.

Here’s how the scam works:

Two nice-looking, college-aged girls will come over to your car or

truck as you are packing your purchases into your vehicle. They both
start wiping your windshield with a rag and Windex, with their breasts
 almost falling out of their skimpy T-shirts. (It’s impossible not to look)
.  When you thank them and offer them a tip, they say ‘No’ but instead
ask for a ride to McDonald’s.

You agree and they climb into the vehicle. On the way, they start

 undressing. Then one of them starts crawling all over you, while the
other one steals your wallet.

I had my wallet stolen Mar. 4th, 9th, 10th, twice on the 15th, 17th,

20th, 24th, & 29th. Also Apr. 1st & 4th, twice on the 8th, 16th, 23rd,
26th & 27th, and very likely again this upcoming weekend.

So tell your friends to be careful. What a horrible way to take

advantage of us older men. Warn your friends to be vigilant.

Wal-Mart has wallets on sale for $2.99 each. I found even cheaper

 ones for sale at The Dollar Store for $1.98. I bought a dozen!


21 septiembre, 2013


Risk of default adds to woes for Argentina’s Fernández
By Benedict Mander in Buenos Aires
In the heart of downtown Buenos Aires, it is hard to walk more than 20 paces without being accosted by hawkers buying and selling dollars….
The full article can be found at:



September 19, 2013
BUENOS AIRES, Argentina — Ecuadorean President Rafael Correa met with his Argentine counterpart Cristina Fernandez during a trip to Buenos Aires on Thursday amid concerns that his new campaign against Chevron Corp. could harm relations between the two countries.
The agenda of the meeting was not announced, but it came two days after Correa attacked Chevron for alleged oil contamination by its subsidiary, Texaco, in the Ecuadorean Amazon between 1972 and 1990. Correa’s charge follows Argentina’s recent $1.5 billion deal to let the U.S. company develop one of the world’s biggest natural gas reserves in the Southern American nation.
In July, Chevron partnered with Argentina’s national oil company YPF in a plan to drill as many as 1,500 wells in the Vaca Muerta shale formation in northern Patagonia. Opponents of the project have expressed concerns about “fracking” gas excavation methods and possible environmental risk.
Chevron is making an initial $1.24 billion investment in the venture, which will start with 100 wells in the first phase.
Correa shied from criticizing Fernandez when he arrived at Buenos Aires Thursday to address the 25th Interamerican Scout Conference opening later in the day. He said that if Fernandez had been president of Ecuador during the period of the alleged Amazon exploitation by Texaco, “she would never let this happen.” He also expressed “total confidence” in the Argentine government.
With his hand dramatically soaked in oil, Correa on Tuesday had declared that Chevron must be held accountable for the alleged “pollution and environmental destruction” by paying the $19 billion in damages that an Ecuadorean court awarded to Amazon villagers in 2011.
An Argentine court in June suspended a freeze that had been placed on Chevron’s assets in the country following the landmark judgment. Chevron says it will not pay, maintaining that Texaco addressed the environmental problems before Chevron acquired the company in 2001. Because Chevron has no assets in Ecuador, the plaintiffs filed suits in Canada, Brazil and Argentina.
September 19, 2013
BUENOS AIRES, Argentina — Argentina’s Supreme Court has upheld the 15-year prison sentence of a priest convicted of sexually abusing a boy in his “Happy Children” foundation, prompting the victim’s attorney on Thursday to call for the cleric’s immediate arrest.
The Rev. Julio Cesar Grassi maintained his innocence during the appeal, continuing to live in a home across the street from the foundation despite the conviction and additional allegations he abused more than a dozen children there. The court found him guilty of abusing one boy, with the rest of the charges dismissed for lack of evidence.
That victim’s attorney, Juan Pablo Gallego, said Grassi should be arrested lest he try to escape now that his pedophilia conviction has been confirmed.
The Supreme Court of Justice in Buenos Aires province late Wednesday upheld Grassi’s conviction for two cases of aggravated sexual abuse and a third of corruption committed against Gallego’s client, who was a teenager in 1996.
Gallego told the cable network Todo Noticias that Grassi is “a dangerous pedophile” who could try to escape. The priest’s attorneys have made no comment on their client’s current situation.
Over the past year, the priest was held under house arrest, and then was freed under certain conditions as his sentence was delayed pending the appeal’s outcome.
Grassi was well known for his work as president of the Happy Children foundation, which operated several children’s homes.
Through television appearances and other campaigns, Grassi raised millions of dollars for the foundation, many of the donations coming from prominent figures who distanced themselves from the priest after the allegations surfaced.
By Benedict Mander
September  19, 2013
Despite Argentina’s outlaw status on the international capital markets and the austral country’s isolationist bent, local markets still saw reason to celebrate the Fed’s decision to continue piling into bonds.
The logic goes that the Fed’s move is likely to stem the ongoing devaluation of the Brazilian real, and so make Argentina more competitive with its biggest trading partner. It helped that soya prices, one of Argentina’s top exports, also rose on the news.
The tiny Merval stock market in Buenos Aires bounced after the Fed’s announcement. Argentina’s automotive industry stands to benefit the most given that over 80 per cent of production are exported to Brazil (although this number has been falling recently).
Still, local economists warn that the party won’t last long. Brazil’s currency will most likely keep on weakening, and in any case slowing economic growth in Argentina’s northern neighbour is likely to have a stronger impact on trade.
Meanwhile, Argentina’s overvalued exchange rate – at the official rate the dollar is worth 5.7 pesos, while on the black market it weakened to 9.4 pesos this week – continues to make life difficult for exporters.
But however short-lived, it all comes as welcome respite for Argentina’s beleaguered economy.
By Raul Gallegos
September  19, 2013
An unlikely political voice recently reminded Argentines of the economic difficulties they face due to President Cristina Fernandez de Kirchner’s bankrupt economic policies: the president’s own 23-year-old daughter.
Florencia Kirchner told reporters on Sept. 15 at the government-sponsored Unasur International Film Festival: “I like visiting slums, and I believe everyone should have access to the same things the middle and upper class have.” The young Kirchner was at the festival to unveil her film project “La Propia Mirada” (One’s Own View), a series of short stories told from the perspective of Argentina’s poor. Her work “goes beyond politics. That’s because it’s social inclusion, which is the duty of every citizen,” not just those in politics, she said. A tape of her remarks has been viewed almost 70,000 times on YouTube.
The firestorm that followed Florencia’s statements was somewhat understandable. It is hard for many to stomach such advice from a young woman of privilege known for taking plush European vacations at a time when her mother’s government restricts Argentines’ access to foreign currency. The first daughter’s famous themed 18th birthday celebration, her taste for high-end fashion, her studies at the New York Film Academy (which she interrupted when her father died), and reports of alleged misuse of the presidential plane, Tango 10 (a case that prompted an investigation that was shelved last year), make her a questionable advocate for social inclusion.
What’s more, she didn’t stray too far from home in her project: The protagonists of her short films were also members of La Campora, a youth organization that supports Fernandez de Kirchner’s government and was founded by Maximo Kirchner, Florencia’s brother. And today, the Web is reeling with talk that, according to news agency OPI Santa Cruz, a government source indicated Florencia’s public statements were meant to measure her popularity — in preparation for a possible political path ahead of the 2015 congressional elections.
Lorena Lalin wrote a Sept. 16 column for with the headline “Who will notify Florencia Kirchner that Cristina is her mother?” Taking the government to task for pervasive inequality, Lalin suggests that “Florencia Kirchner’s public declaration shouldn’t be directed at the community, but should be discussed over breakfast in her home, with her mother.” Meanwhile, Roberto Cachanosky, head of the economics news site, focused a mocking Sept. 15 tweet on the Kirchner family’s hotel holdings in the tourist town of Calafate. If the president’s daughter calls for equality, Cachanosky wrote, then “I want to own a hotel in Calafate.”
We can’t exactly fault Florencia for her birth to not one but two presidents (her father was the late former president Nestor Kirchner). Such lineage naturally brought a number of advantages growing up. And it’s hard to argue with her call for more inclusion for the less fortunate. If anything, she’s using her position of prominence to bring attention to a very real problem in her country, an issue that her mother’s policies have arguably made worse in some instances. Paula de Luque, head of the Unasur film festival, defended the young Kirchner in an interview with the newspaper Clarin: “With this work we have no grandiose intention but to put the camera in the hands of people who have no options.…The directors that participated did so from political sympathy, Florencia Kirchner didn’t charge one cent.”
Yet just as there appears to be a disconnect between the life the young Kirchner leads as first daughter and the idealism she professes, so too does her mother appear to pursue economic policies that sustain her political support among members of a segment of the population but have harmed the long-term prospects of her country. Populist spending and more state control over the economy have proved no shortcut to long-run economic improvement for the majority of Argentina’s people.
Here are some numbers that might be fitting for the big screen: Argentina’s official inflation figures — accused of being tampered with since President Nestor Kirchner replaced staff at the statistics unit Indec in 2007 — have prices rising 10.6 percent in the 12 months ending in August of this year, far below the around 25.2 percent estimated by private analysts who often suffer government prosecution for reporting such numbers. According to various analyst estimates compiled by Focus Economics and the La Nacion daily newspaper, inflation is expected to reach 29.1 percent in 2014, with gross domestic product growth around 2.5 percent, far below the official promises of 6.2 percent.
Looking at Florencia Kirchner’s generation specifically, the figure for Argentines ages 15 to 24 who are without jobs and are not in school reaches anywhere between 10 to 15 percent. As La Nacion — which has been critical of the Kirchner government — put it in a Sept. 14 editorial: “These are basically the sons of poor families who cannot get out of poverty, and who in turn have more children who will also become poor.…This is a grave situation that casts doubt on the constant, official rhetoric of the authorities regarding inclusion, an increase in employment, and the reduction of poverty and homelessness.”
A Sept. 16 La Nacion editorial titled “Nefarious cocktail of more subsidies and less investment” was even more direct in denouncing Kirchner’s mandate. The newspaper broke down the government’s spending to sustain airlines plagued by losses, transportation subsidies, and subsidies for the electricity sector, especially ahead of October’s legislative elections. The government’s plan to “revert the damage only after the October elections confirms the existence of a short-sighted, corrupt and selfish view of a government that continues to insist in turning reality into fiction.”
Argentina is quickly running out of cash. Central bank reserves have fallen almost a quarter since March 2010, when Fernandez de Kirchner first decided to use them to pay off debt. The president’s continued fight with bondholders, the country’s nonexistent credit overseas, dollar restrictions at home and the resulting black market for greenbacks make the country’s future look bleak.
The stories of Argentina’s struggling working class are worth telling. But so is the sad tale of economic mismanagement that threatens to hold back its future generations.
By Peter Ward
September  19, 2013
Americas Petrogas Inc. (BOE), the holder of more than 2 million acres in Argentine shale formations, is considering joint ventures, asset divestitures or a sale of the company.
The board has authorized management to review strategic alternatives following success in the Vaca Muerta shale and “recent industry inquiries concerning potential business opportunities,” the Calgary-based company said in a statement today. Jefferies Group LLC has been appointed its financial adviser.
Americas Petrogas operates 14 blocks in the Neuquen basin, which includes the Vaca Muerta, and announced in April it found natural gas and liquids in a well it owns there with Exxon Mobil Corp. Last month, Chevron Corp. (CVX) said it would spend $1.24 billion to help develop Argentina’s shale, which holds the world’s third-largest technically recoverable gas resource, according to U.S. estimates.
Americas Petrogas gained 7.3 percent to C$1.03 at 10:29 a.m. in New York. The shares have dropped 66 percent this year.
6. UPDATE 2-Argentina cuts wheat area estimate to 3.4 mln hectares (Reuters News)
19 September 2013
BUENOS AIRES, Sept 19 (Reuters) – Argentina cut its 2013/14 wheat area estimate to 3.4 million hectares (8.4 million acres) on Thursday from a previous forecast of 3.9 million hectares, citing dry planting conditions.
According to the Buenos Aires Grains Exchange, last week’s rains over the east side of the agriculture area in Argentina helped wheat fields, but in the western and northern area, where less rain has fallen, crop conditions are getting worse.
The exchange said that in the southern agriculture area, where half of the fields are dedicated to wheat this season, crops “continue to accumulate moisture, allowing good expectations to continue on wheat yield.”
The South American grains powerhouse is expected to plant 2013/14 corn on 5.7 million hectares, down 6.6 percent compared with the previous season, the agriculture ministry also said in its monthly crop report.
The Buenos Aires Grains Exchange said that as of Thursday, Argentine farmers had seeded 2.8 percent of 3.56 million hectares that will be dedicated to corn in 2013/2014. The planting progress is 2.2 percentage points behind last year’s tempo. Lack of soil moisture accounts for most of the delay, but rains are expected in the next seven days, the exchange added.
The country is the world’s No. 3 corn and soybean exporter, as well as a top wheat supplier at a time when high global output estimates are pushing down the price of all three crops.
Argentine wheat fields benefited from recent rains while corn areas remained dry, delaying sowing and pushing farmers toward planting weather-resistant soybeans instead.
The U.S. Department of Agriculture has forecast Argentina crop production at a downwardly revised 26 million tonnes of corn in the 2013/14 crop year, 12 million tonnes of wheat and 53.5 million tonnes of soy.



20 septiembre, 2013
Asunto: ARGENTINE UPDATE – Monday 9/16 and Tuesday 9/17

Tasting the Flavors of Uruguay’s Melting Pot

  • Sept. 11, 2013
  • original

Marismo in José Ignacio, Uruguay.
The food of Uruguay is as heterogeneous as its people: a cross mostly between Spanish and Italian, with some indigenous influences.
“It’s a melting pot,” said Ignacio Mattos of his native country. He is chef and co-owner of the New York City restaurant Estela. “Nothing is completely authentic.”
That’s why dishes that seem familiar to Americans are, upon first bite, surprising. Take pizza, for example. On top of a wood-fire-cooked pizza, ordered by the meter, you may find a thin chickpea flatbread called fainá. Its earthy flavor and crispy crust add an unexpected taste and texture, not to mention more carbs.
“Starch and starch,” said Mr. Mattos. “We’re starch maniacs.”
Below are edited excerpts from a conversation with Mr. Mattos on how to experience Uruguay’s surprising flavors.
Q. What’s a classic dish in Uruguay?
A. Asado, our barbecue, is very traditional. It involves a lot of meat, grilled at different times, and you eat each when it’s ready. You start with sausages, blood sausages, then chinchulines — that is the intestine. We do sweetbreads. Pretty much the whole animal gets grilled. It’s kind of ceremonial, you know? It’s a whole experience on a Sunday afternoon.
That’s difficult to find if someone doesn’t invite you to their home. But some estancias — ranches, right? — they organize it, so you can actually experience it. Estancia Vik, a nice old quiet villa in José Ignacio, a beautiful beach town, is known to do it.
Q. Any other spots you like in José Ignacio?
A. Parador La Huella is a gorgeous and very charming restaurant on the beach. They grill beautiful seafood and nice meats. Very simple, straightforward. You can go in the morning, have coffee, and you find yourself going there two to three times a day.
Marismo, this is a gorgeous restaurant outside the main town. It’s kind of in the woods, and they cook pretty much everything in a wood-fired oven. The food is very Mediterranean and exceptional. The tables are in the sand. At night, you can go and stay for hours.
Q. Any street food staples?
A. There’s a sandwich called chivito that’s very characteristic of Uruguay. It’s a steak sandwich — the steak must be thin, very tender so it melts on your mouth — with some bacon, cheese, onions, tomatoes. People get crazy and start adding things, like they’re making the biggest sandwich on earth. For me, the bigger they get, the worse they are, because it’s all about the ratio and the quality of the meat and bread. And the small ones, you can always keep ordering. The place to find it is Montevideo, and the best chivito in Montevideo is El Tinkal. This is a small place on La Rambla, the boardwalk by the Río de la Plata. It’s a very neighborhood joint, but the products, the care that they put, is very good. It’s a family-run business, and they don’t take short cuts.
Q. Any other restaurants you like in Montevideo? 
A. La Ronda is a really nice bar with different types of snacks and sandwiches that are quite tasty. They play really good rock ’n’ roll, and they have tables outside where people hang out. It’s bohemian, a great place to go at night. Jacinto is a very good restaurant. It does a bunch of homey stuff like empanadas, but in a way that’s elegant. In the Mercado del Puerto there is a very good parrillada, a barbecue place calledEl Palenque.
All of these restaurants are in Ciudad Vieja, the Old City. It’s touristy during the day, but more local at night. It transforms at night. Montevideo is a pretty melancholic and nostalgic city, and you feel it in Ciudad Vieja. It’s in the DNA of Uruguayans. We’re leaning on the past always. The past always was better.
By Benedict Mander in Buenos Aires
September 16, 2013
In the heart of downtown Buenos Aires, it is hard to walk more than 20 paces without being accosted by hawkers buying and selling dollars. Interested customers will be led into an inconspicuous office in a nearby building.
“They’re called ‘caves’, because they’re supposed to be secret. Of course everyone knows they’re there,” said a hawker who called himself Raul. “Illegal? Of course they are! But don’t worry, the police are paid off, nothing will happen to you.”
The thriving currency black market on postcard Florida Street in the commercial centre of Argentina’s capital is a result of strict foreign exchange controls introduced in 2011 to stem capital flight. In the “caves”, dollars can be sold for close to double the official rate of 5.7 pesos.
Argentina’s artificially overvalued currency is one of an array of economic problems facing Cristina Fernández de Kirchner, president. Others include stubbornly high inflation, state subsidies that are sapping resources, and an abysmal business climate that has seen investment all but dry up.
“We have an economy that has become dysfunctional,” said Miguel Kiguel, an economist and former government official, who identifies the overvalued currency as one of the roots of the problem, undermining the economy’s competitiveness.
During Ms Fernández’s second term as president, surpluses in the current and capital accounts have shrivelled into twin deficits. This is especially bad for a country that has outlaw status on the international capital markets and cannot seek financing abroad.
That problem will only deepen if Argentina slips into a technical default, which some observers believe is all but inevitable after a US appeals court last month ruled in favour of the holdouts demanding that Ms Fernández’s government pay the $1.3bn it owes them in full, in the latest chapter in a long-running saga that began when Argentina defaulted on almost $100bn in debt in 2001.
The likelihood that Argentina will default for a second time in little more than a decade only increased when Ms Fernández subsequently proposed a new debt exchange, which congress approved last week, since if the plans are implemented in full observers say they would put Argentina in contempt of court.
The government is doing its utmost to stave off the moment of reckoning, when the US Supreme Court issues a definitive ruling on the case – something it may not do until next year – but some question how much another default will really change what is already a bad situation.
“It will just be one more stripe on the tiger,” added Mr Kiguel, who observes that Argentina is already paying default-level interest rates on its debt.
Serious economic problems are among the main reasons why the ruling Peronist movement fared so poorly in primary elections last month, making it almost impossible for the president to secure the two-thirds majority she would need in midterm legislative elections on October 27 to amend the constitution and enable her to run for a third consecutive term in office in 2015 presidential elections.
With less than two years of Ms Fernández’s presidency remaining, the battle for succession is well under way, sending local politics into flux.
Carlos Germano, a political analyst, said: “We are about to see a fierce dispute for the change of leadership of the Peronist party, as well as a realignment of forces in the opposition.
“The great unknown is how the president will react to all of this.”
Ms Fernández is losing the support of the trade unions and low-wage workers – bedrocks of the Peronist movement. Some fear that her waning power could have grave repercussions.
“Why has Argentina had these macroeconomic problems for such a long time without a crisis? Because we have had a strong government,” according to Luis Secco, an economist. “When political power weakens and there are macroeconomic problems, the possibility of a crisis increases greatly,” he said, pointing to the premature collapse of the Alfonsín and de la Rúa governments in 1989 and 2001 respectively.
Sergio Berensztein, a pollster, said: “The president’s power has weakened extraordinarily, thanks to a series of terrible decisions. She has done everything wrong.”
He added that Ms Fernández’s victory in 2011 presidential elections, with an unprecedented 54 per cent of the vote, led her to believe that she had carte blanche. “She went for everything, but she ended up with nothing.”
By Charles Newbery
16 September 2013
Argentina’s Congress this week will continue reviewing the 2014 national budget, which calls for using a record $9.86 billion in central bank reserves to pay the national debt.
Economy Minister Hernan Lorenzino presented the budget to the lower house last week, earlier in the year than normal.
President Cristina Fernandez de Kirchner appears to be trying to get the budget approved before an Oct. 27 midterm congressional election, which is expected to cost the ruling party its control of both houses.
Her Front for Victory party won 26% of the votes in the Aug. 11 congressional primaries, far less than the 54% it fetched for reelection to a second term in 2011.
Analysts say voters have grown weary of the government’s incapacity to contain rising crime and 25% annual inflation. Now they want other parties to take a shot.
The backlash led CFK to launch a series of popular measures. She has raised the exemption threshold on income taxes and doubled the amount that small businesses and the self-employed can earn in the same tax bracket.
Even so, last week she vowed she would not veer from the economic policies championed by her late husband and predecessor, Nestor Kirchner, that brought Argentina 8% annual growth between 2003 and 2011.
She scoffed at calls for austerity to contain inflation and shore up public finances.
“A policy of austerity would cause a recession and would be politically and socially unsustainable,” she told industrial leaders last week.
The budget bill calls for the economy to expand 6.2% in 2014 after 5.1% expansion this year, while annual inflation will slow to 9.9% at the end of next year from 10.5% in 2013 and the peso will have an average value of 6.33 to the dollar compared with 5.725 last week.
The trade surplus is projected to narrow to $10.1 billion from 10.6% over the same period, according to the bill.
Most economists, however, say the government overestimates growth and underestimates inflation. They say the economy slowed to 1-4% growth in 2012-2013, while inflation has remained stuck at 25% annual.
The peso, too, has depreciated against the dollar and international reserves have dropped to a six-year low of $35.2 billion.
There is concern that the dwindling hard-currency reserves could make it harder for the government to keep on top of its debt payments and state spending as it faces a suit by creditors seeking to collect $1.33 billion on bonds from a 2001 default on nearly $100 billion.
Without resolving the default, the country has been exposed to suits by creditors, preventing it from easily returning to global financial markets.
That led CFK to turn to the central bank’s reserves to help pay the national debt in 2010, a practice that has continued. This has caused the reserves to decline after hitting a record $53 billion in January 2011.
Committee discussion of the draft budget will resume Tuesday in the lower house.  The CFK administration wants to bill to go for a vote on the floor as soon as Sept. 25, according to local press reports.  The government will report second-quarter unemployment Monday followed Friday by balance of payments and GDP for the same period.
By Paula Diosquez
16 September 2013
S&P’s decision to downgrade Argentina’s sovereign risk rating came after the US Second Circuit Court of Appeals upheld a previous ruling that required Argentina to pay bondholders of its defaulted debt.
IHS Global Insight perspective
Standard & Poor’s (S&P) has downgraded the rating for Argentina’s debt by one notch to CCC+.
The move, according to S&P, responded to the increased risk to debt service for bonds in the New York area; S&P considers that there is a 33% chance of this dispute generating a selective default.
The negative outlook reflects concerns about a substitution in the compensation arrangements proposal that S&P considers would significantly change the bond terms to the detriment of creditors; such a proposal, if enacted, would prompt an additional downgrade to Argentina’s sovereign risk rating.
Risk ratings
S&P’s decision to downgrade its sovereign rating brings it a notch above the rating assigned by IHS and Moody’s (60 points, B-, very high payment risk) but still below Fitch Ratings (75 points, CC), which deems Argentina more risky.
S&P downgraded its unsolicited long-term ratings for Argentina from B- to CCC+ on Tuesday (10 September). The outlook on the rating was maintained at negative following a downgrade in November 2012. According to its press release, S&P based its move on a likely deterioration of the country’s debt servicing after a ruling by the US Court of Appeals for the Second Circuit, which upheld a previous ruling indicating that Argentina was discriminating against the so-called “holdout” investors, who have been seeking full payment on defaulted pre-2001 bonds.
According to the ratings agency, the legal proceedings could cause a break of payments on bonds under New York jurisdiction or initiate a new debt exchange; either outcome is considered a selective default by S&P. Moreover, the ratings agency estimates that there is a one-in-three chance of such events taking place within the next 12 months. In the event that the US Supreme Court does not grant Argentina its appeal, essentially ruling against the country, it would imply an impairment in servicing its 2005 and 2010 exchanged debt given shrinking international reserves, critical macroeconomic imbalances, and the fact that Argentina still has very limited access to funding more than 10 years after the default in 2001. Indeed, S&P highlighted the high inflation rate and the dual exchange rate system with a wide gap between the official and the parallel market exchange rate.
Outlook and implications
S&P’s decision to downgrade its sovereign rating brings its rating a notch above that of IHS and Moody’s (60 points, B-, very high payment risk), which gives Argentina a less risky rating than that assigned by Fitch Ratings (75 points, CC). The outlook on the IHS rating is Negative and the recent developments are being monitored very closely and could trigger a downgrade (see Argentina: 29 August 2013: ).
Argentina’s long-term credit risk is very high, even by Third World standards, mainly because of the country’s poor relations with its external creditors and its lack of access to financial markets for new bond placements. The country is not yet issuing new bonds in the international financial markets, and has problems issuing debt in the domestic market, where most of the buyers were foreign investors until early 2007. The central government’s fiscal situation is also concerning; without access to external financial markets, Argentina’s authorities will have a hard time keeping up the pace of current fiscal spending. The 2014 budget proposal includes a 36.7% increase in central government expenditure and a rather optimistic estimate of the inflation rate and GDP expansion, up 10.4% and 6.2% in 2014 respectively (see Argentina: 13 September 2013: ).
16 September 2013
The government of Argentina has launched new fiscal incentives for software and IT service firms, local press reported.  The government issued a resolution which modified the country’s software promotion scheme, which was defined in 2008. The new fiscal incentives will be offered until 2019, according to the report.
“The local software sector consists of over 4,000 firms, of which 98% are SMEs and microenterprises,” industry minister Débora Giorgi was quoted as saying.  A total of 324 software firms have already registered with the software promotion scheme. The government expects to attract nearly 500 more companies with the new fiscal benefits.
With the new incentives, software firms will be able to pay national taxes with a fiscal bond they receive for the equivalent of 70% of paid employer contributions. Argentina’s software and IT services chamber Cessi estimates that the sector will generate revenues of US$7.33bn annually by 2020, Cessi said in a statement.
In 2012, the sector generated revenues of approximately US$2.56bn, according to previous reports.
According to the chamber, the local software and IT services sector is forecast to export US$2.96bn by 2020, compared to nearly US$900mn last year.
Additionally, the sector is expected to employ 134,000 people by that time, Cessi said.
The country’s main markets for software exports are the US, Mexico, Brazil and Chile.
Cessi has recently opened offices in the US, Colombia and Mexico as part of a plan to promote local software and IT services exports. Cessi also expects to open additional offices in Brazil and Chile during 2013.
By Hugh Bronstein
16 September 2013
* Weekend rains help wheat fields; corn planting postponed
* High global supply expectations weigh on grain prices
* If Corn Belt gets no rain, farmers seen switching to soy
BUENOS AIRES, Sept 16 (Reuters) – Argentina’s wheat fields benefited from rain over the weekend while the country’s corn areas remained dry, causing a delay in sowing that may push farmers toward planting weather-resistant soybeans instead, local climate experts said on Monday.
The South American grain powerhouse is the world’s No. 3 exporter of corn and soybeans, as well as a top wheat supplier at a time when high global production estimates are pushing down the price of all three crops.
Normal rains in the Wheat Belt, centered in the southern part of Argentina’s main farm province of Buenos Aires, have set the stage for healthy flowering. But dry weather in the Corn Belt – northern Buenos Aires, Cordoba, Entre Rios and Santa Fe provinces – has left fields parched, with little relief in sight.
These areas got nothing near the minimum 20 millimeters of rain needed over the weekend for farmers to take advantage of the prime mid-September to mid-October corn-planting season.
“They got less than 10 millimeters of precipitation in Santa Fe, Entre Rios and Cordoba over the weekend,” said meteorologist German Heinzenknecht of consultancy Applied Climatology. “Corn planting in the second half of this month will be very difficult in these areas.”
The Corn Belt is unlikely to get the minimum 80 millimeters of rain it needs over the month ahead if farmers are to plant before Oct. 15, Heinzenknecht said.
“We have 15 days left in September, during which we do not expect much rain,” he said. “This puts the focus on the first 15 days of October, during which the rains would have to be very strong and concentrated in the right areas, which is unlikely.”
The dryness may push growers toward planting soybeans instead of corn this season. World corn prices are down this year, and the grain is more expensive to cultivate than soy, as well as more vulnerable to bad weather.
The U.S. Department of Agriculture has forecast Argentina crop production at a downwardly revised 26 million tonnes of corn in the 2013/14 crop year, 6 million tonnes of wheat and 53.5 million tonnes of soy.
“There is a lack of rain in northern Buenos Aires and southern Cordoba, Entre Rios and Santa Fe, which will provoke either an increase in soybean cultivation this year or an increase in late-planted corn,” said Pablo Adreani, head of the Buenos Aires-based Agripac consultancy.
“If growers cannot sow corn over the coming three weeks,” he said, “growers will have to look at Chicago prices and evaluate the risks involved in either planting corn late in the season or opting to use those fields for early-planted soy.”
Benchmark Chicago corn future prices have fallen 34 percent so far this year as U.S. farmers start to harvest what is projected as a record-large 2013 crop.
Meanwhile, wheat futures are down 17 percent as demand has fallen for the crop as a substitute for corn-based livestock feeds. Soy futures have declined 5 percent due in part to expectations of a big crop from global No. 2 producer Brazil.
September 16, 2013
BUENOS AIRES, Sept. 16 (UPI) — Brazil will help Argentina organize and coordinate cyberdefense development in the two countries’ military infrastructures, opening new opportunities for Brazilian business.
New initiatives in regional cyberdefense began as a reaction to leaked reports alleging that Brazil, Argentina and other Latin American countries were subjected to spying by U.S. and other intelligence agencies.
Latin American government services routinely spy on each other but revelations that the U.S. National Security Agency and other U.S. agencies have been monitoring government and diplomatic business in the area angered Brazilian President Dilma Rousseff and other regional leaders.
Argentine Defense Minister Agustin Rossi and Brazilian counterpart Celso Amorim in a joint statement indicated cyberdefense would take the center stage in a bilateral agenda of defense and security collaboration.  The two countries are also tied together in regional pacts that cover or overlap frameworks for defense and security collaboration, including the Union of South American States and to some extent the Mercosur trade bloc.
With security leaks and intelligence matters still dominating Latin American media headlines, Rossi and Amorim announced the new initiative as they attended the formal opening in Buenos Aires of the Argentine Defense Ministry’s new headquarters building.
Brazilian edge in defense and security technologies will give Brazil opportunities for new business expected to grow out of closer collaboration between the two countries. There were indications that other regional neighbors would be invited to join in cyberdefense planning and implementation.
The United States, in particular, has faced frequent media criticism over the espionage controversy but analysts said there is no hint the spat has affected ongoing defense and security collaboration between Brazilian, Canadian and U.S. corporations.
“We have decided that before the year ends we will hold a meeting in Brasilia to intensify cyberdefense complementary works,” Rossi said.
He indicated the current controversy on cross-border espionage was not new and has “always existed.” However, he added, there is now need for coordinated work “to counteract vulnerable situations.”  Amorim said Argentina and Brazil would explore each other’s capacity to deal with the challenge of external espionage and, where necessary, conduct research and development of new countermeasures and devices.
An Argentine security team will visit Brazil to explore the possibilities of collaboration in develop new cyberdefense software and joint defense industrial research, development and production.
Brazil is keen to increase its role in a joint regional project for a training aircraft to be shared by the military organizations in the member countries of the Union of South American States.
Brazil is developing a heavy duty freight aircraft it hopes to sell to neighboring countries and its union partners.
Argentine officials say they are keen to share advanced technologies being developed by Brazilian armament firms in particular Embraer S.A.
Analysts said Brazilian government and private sector emphasis on developing new cyberdefense programs could open new opportunities for commercial development. Brazilian defense firms are keen to capture a slice of defense and security market share currently under the sway of Canadian, European and U.S. companies.