Archive for 29 agosto 2014

ARGENTINE UPDATE – Aug 29, 2014

29 agosto, 2014
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1. OPPOSITION STRIKE HAS MIXED RESULTS IN ARGENTINA (The Washington Post)
August 28, 2014
BUENOS AIRES, Argentina — Labor groups opposed to Argentine President Cristina Fernandez staged their second general strike of the year Thursday, disrupting life in the capital and other parts of the country as many people stayed away from work and union demonstrators blocked streets to call for higher wages and lower taxes.
The effects of the strike were mixed. There were fewer people on the streets of Buenos Aires and goods went undelivered, and trash uncollected, as truck drivers took part in the strike. In some places, protesters tangled with police.
Some bars and cafes stayed open even though a restaurant workers union joined the strike, in which union members also called for more spending on social welfare and an end to a wave of private-sector layoffs.
Hugo Moyano, a leader of the General Confederation of Labor who has been a fierce critic of Fernandez from the left, said that in many places up to 90 percent of workers stayed away from their jobs.
“In the capital, there are some vehicles running, including taxis and buses, but they are empty, and that demonstrates the support for this action,” he said.
The government sought to downplay the effects of the strike. Cabinet Chief Jorge Capitanich said only about 25 percent of workers took part in the strike.
Labor Minister Carlos Tomada said the strike could not in reality be called a “general strike,” given the level of participation, with no real effect on industrial production and other sectors completely unaffected.
Fernandez has faced increasing criticism with the economy in recession and a rate of inflation estimated at 40 percent that is among the highest in the world.
2. GROUP HOPES TO AVERT ARGENTINA DEFAULT DISASTERS (New York Post)
By Michelle Celarier
August 29, 2014
The call for sovereign default reform is taking a big step.
The International Capital Market Association, an influential group of 400 banks and investors, will call Friday for reforms aimed at preventing repeats of the bitter debt dispute between Argentina and Paul Singer that has spiraled into a new default by the South American country.
The ICMA’s plan would reduce the ability of holdout creditors like Singer to litigate and undermine debt restructurings, in part by using contract clauses to bind all bondholders to debt restructurings in which 75 percent of all holders are in agreement, said Eric LeCompte, of Jubilee USA, a debt relief organization.
Additionally, the plan will argue that the parity clause in existing bond contracts should mean that holdout funds should always receive the same restructured bonds that won support of the majority of investors.
News of the report was first reported by the Financial Times.
3. ARGENTINA RULES OUT SECOND DEVALUATION OF PESO (Reuters News)
28 August 2014
BUENOS AIRES, Aug 28 (Reuters) – Argentina on Thursday ruled out a second sharp devaluation of the peso this year, despite heavy pressure on the local currency as savers and companies faced with high inflation and the country’s default scrabble for dollars.
The government implemented a shock 20 percent devaluation of the peso in January, although President Cristina Fernandez had previously sworn this would never happen under her watch.
The widening gulf between the official rate and the black market rate since Latin America’s third-biggest economy defaulted on its debt have fuelled expectations of another hefty intervention.
The head of the influential Industrial Union of Argentina, Hector Mendez, said earlier this month the peso should trade at 10 per dollar at the official rate to provide exporters with a cushion against one of the world’s highest inflation rates.
Speaking about calls for a devaluation, Argentine Cabinet Chief Jorge Capitanich said “obviously this will not happen”. The government has said a devaluation would fuel inflation, which private economists already see running at more than 30 percent this year.
The peso has tanked 1.37 percent to 8.4 since Fernandez unveiled plans to skirt U.S. court rulings that prevent Argentina’s servicing its debt until the country settles with U.S. hedge funds demanding full payment on their bonds. The currency has fallen 22.4 percent this year.
On the black market, the peso has fallen even more, dropping by 8 percent since Fernandez’s announcement and by 30.2 percent this year to 14.33 per dollar. The so-called “blue peso” has dropped 11.7 percent in August alone.
Argentina missed a June interest payment after U.S. District Judge Thomas Griesa blocked a coupon payment owed to holders of debt that was restructured after the country’s 2002 default on $100 billion in debt.
4. ARGENTINE UNIONS STAGE GENERAL STRIKE AS ECONOMY DETERIORATES (Reuters News)
28 August 2014
BUENOS AIRES, Aug 28 (Reuters) – Argentine opposition labor unions staged their second general strike this year on Thursday to protest soaring inflation and job cuts, slamming the brakes on business activity and bringing the Rosario grains export hub to a near standstill.
Latin America’s third largest economy is mired in a recession that is set to worsen after its default last month as pressure on the peso currency builds, investment withers and borrowing costs for companies and provinces rise.
The 24-hour strike called by the powerful CGT labor organization impacted trains, air transport, gas stations and public administration.
“The reasons (for the strike) are suspensions, job cuts … and we are also raising the issue of the income tax and the reopening of wage talks,” said Ruben Sobrero, a leader of the rail workers trade union.
Accelerating inflation is pushing workers into higher income tax brackets although their wages are not rising in real terms.
The Argentine economy slipped into recession in the first quarter as both industry and private consumption dropped. The country has one of the world’s highest inflation rates, currently running at more than 30 percent, according to private economists.
“If our demands are not listened to, then there will be another strike of 48 hours in September,” Sobrero said.
About 80 percent of Argentine grains and oilseeds leave from Rosario, located on the Parana River. Unionized workers are needed to manage the entrance and exit of each ship from the constellation of ports that make up the Rosario hub.
Port workers have staged many walkouts at Rosario over the past few months, slowing trade. Analysts fear social unrest could grow as the default lengthens, darkening the economic outlook.
Argentina slipped into default again in July after a U.S. court blocked a coupon payment owed to holders of debt that was restructured after the country’s record default in 2002 on $100 billion in debt. The court said Argentina could only service its debt if it also paid so-called holdouts who rejected its restructuring.
Argentine Cabinet Chief Jorge Capitanich said the strike was politically-motivated due to general elections next year, saying only 25 percent of workers had joined the protest.
5. ELLIOTT UNIT EXTENDS LEGAL FIGHT ON ARGENTINA DEBT TO CHINA (HedgeWorld News)
By Davide Scigliuzzo
28 August 2014
NEW YORK, Aug 28 (IFR) – A unit of billionaire Paul Singer’s Elliott Management, which is Argentina’s main holdout creditor, is extending its legal fight with the South American nation to China.
NML Capital served subpoenas this week to Bank of China (BOC) and Industrial and Commercial Bank of China (ICBC) in an effort to obtain information on $6.8 billion in financing for deals signed by the two countries in July.
“We want to understand the mechanics of these credit facilities to establish whether assets to which Argentina has a legal title could surface in jurisdictions where we would be able to attach them,” a lawyer advising Elliott told IFR on Thursday.
The subpoenas are aimed at a $4.7 billion facility provided by China Development Bank, ICBC and BOC to finance the construction of two hydroelectric dams in Patagonia and a $2.1 billion loan from China Development Bank and ICBC to finance the Belgrano Cargas railway project.
Both deals were signed by Argentine President Cristina Fernandez and her Chinese counterpart, Xi Jinping, during an official visit of a Chinese delegation to Buenos Aires.
Elliott hopes to be able to track the payment mechanisms and time legal actions in any relevant jurisdiction accordingly.
The hedge fund is also hoping to bring to light disclosures that Argentina may have made to its Chinese creditors with respect to its dispute with the holdouts, which in July pushed Argentina into its second default in 13 years.
“We think that Argentina may have provided some assurances to the lenders that they have plans to evade the pari passu injunction,” said the lawyer, referring to an injunction issued in 2012 by US district court Judge Thomas Griesa that prevents Argentina from paying holders of its restructured bonds unless it also makes holdouts whole.
The Chinese banks have about a month to provide the documents and have been asked to testify at the New York offices of law firms Dechert and Miller & Wrubel on October 8, according to subpoena documents seen by IFR.
While the banks can oppose the request, Elliott is confident that the U.S. courts would ultimately allow its request to go through.
The subpoenas apply to any form of financing and currency swaps the banks may have arranged for Argentina or hundreds of Argentine government-related entities over the last four years.
Elliott – via its NML Capital unit – is one of the lead creditors who sued Argentina for full repayment after the sovereign’s 2001 default.
The hedge fund has won a number of legal battles against the country, including obtaining a green light from the U.S. Supreme Court to seek information about Argentina’s non-U.S. assets.
In separate proceedings, Elliott plans to subpoena international banks including Citigroup, HSBC and Standard Chartered to seize what it suspects are embezzled Argentine funds, a source at the hedge fund told IFR last week.
Bank of China declined to comment, while Industrial and Commercial Bank of China was not immediately available for comment.
6. BASS ‘SING’-ING ARGENTINA BLUES (New York Post)
By Michelle Celarier
28 August 2014
Lesson for Paul Singer: Never come between another hedge-fund manager and his money.
Kyle Bass, the outspoken founder of Hayman Capital, is one of the heavies on the other side of Singer in his battle with Argentina.
But on Wednesday, Bass sounded more like Argentina’s leftist economy minister Axel Kicillof than a US hedge-fund manager.
“Singer is holding poor countries as hostages,” Bass told the Buenos Aires Herald, referring to the recent debt default that occurred as a result of Singer’s legal victory to get full value on Argentine bonds he owns.
That has ended up hurting hedgies like Bass, who is joining George Soros and other euro bondholders in a suit against their trustee, the Bank of New York Mellon in London, to try to get the money owed them.
BoNY held onto $539 million after Manhattan federal judge Thomas Griesa ordered the bank not to process quarterly interest payments to those bondholders, who accepted a discounted debt swap, unless Argentina also paid holdouts like Singer.
Argentina has refused to pay the holdouts, saying that it can’t afford to do so.
This week, it yanked BoNY’s banking license because it didn’t process the payments, causing a technical default on those bonds.
7. ARGENTINA ECONOMY MINISTER WARNS GLOBAL FACTORS HURTING ECONOMY (Market News International)
By Charles Newbery
28 August 2014
BUENOS AIRES (MNI) – Argentine Economy Minister Axel Kicillof warned Thursday that global factors are hurting the local economy, even as unions protest rapid inflation and opposition leaders point the finger at faulty policies.
Kicillof said global economic uncertainty is a big threat to the Argentine economy, led by rising interest rates, stagnation and falling commodities prices.
He warned that higher global interest rates will put the brakes on economic growth in emerging markets countries, including Argentina.
After the 2008 global financial crisis, “emerging countries became the locomotive of global growth,” Kicillof said in a one-hour speech at a business conference in Buenos Aires. “But now with the rise of financing costs there could be ‘flight to quality’ of funds from emerging countries to the developed countries.”
He said this will reduce financing in emerging markets and put pressure on currencies to depreciate against the dollar, leading to slower growth.
“We are in a time when we don’t know what the pace of growth will be for the world economy,” he said. “The world economy is not recovering, and this is affecting exports from Argentina and around the world.”
Kicillof added that there “is little that can be done” by the government in terms of stimulus and policymaking to counteract such a situation.
He did not estimate how much the economy could grow – or contract – this year.
Most economists expect the economy to shrink at least 1.5% this year after 3.2% expansion in 2013 and largely robust growth over the previous decade as the country emerged from a 2001-02 financial crisis.
WEAK COMMODITIES PRICES
Kicillof said another big worry for the economy is a decline in commodities prices, including soybeans, the country’s biggest export.
Most economists say the 2003-11 economic boom came largely thanks to a surge in global soy prices on the back of rising world demand, led by China.
Now soy prices are showing “weakness,” Kicillof said.
He also blamed a “lack of demand” for products in Brazil, Europe and elsewhere for much of the woes in Argentina.
Kicillof said he would focus on the domestic market “as a motor” for growth to protect employment and consumer spending. This will include policies to promote industrial development in the agriculture-strong country, as well as efforts to sustain low levels of foreign-currency debt. The foreign debt in private hands has dropped to 8% this year from 96% in 2001, Kicillof said.
“Argentina has cut its debt like no other country in the world,” he said, adding that this allows “the liberty to determine our own economic policies.”
The minister said this debt-reduction policy will be remain in effect even as pressure mounts on the country after a $539 million default last month. He did not mention any new plans to emerging from the default and finding a solution to a $1.5 billion claim from creditors in U.S. courts on defaulted bonds left over from a 2001 default on $100 billion.
ENERGY SUPPLIES
The other big challenge for the country is to rebuild energy supplies after a decade of decline led to a shortages and a surge in imports.
Kicillof called for more investment in developing maturing oil and natural gas reserves, and to put into production its largely unexplored shale resources.
He mentioned as promising a deal signed Thursday between Argentina’s state-run YPF and its Malaysian counterpart, Petronas, to invest $550 million in developing the Vaca Muerta shale play, among the world’s biggest. YPF also is working with Chevron and Dow Chemical in drilling for shale oil and gas there.
This investment is key for gaining energy self-sufficiency so the economy “can continue growing for 10 or 20 years more,” Kicillof said.
CRITICISM
Earlier in the conference, opposition leaders slammed the government for poor decisions that have pushed the country into a looming economic crisis.
Buenos Aires Mayor Mauricio Macri, a conservative who has presidential ambitions, said he is worried about the souring economy as companies cut back, leading to less working hours, suspensions and layoffs and companies.
“People are losing jobs. There is a lot of anguish in Argentina because of the recession,” he said. “This time it is not a result of external problems. This time it is because of the poor handling of the day-to-day administration of the economy, the poor handling of finances that has led to a fiscal deficit and inflation.”
Macri mentioned concerns about the government’s aims to reform a so-called supply law giving the state greater control over companies and seemingly ineffective ways to resolve the new debt default.
“This is not they way to get out of this situation,” he said.
Instead, clear policies are needed, not a state that “is only interested in collecting taxes,” Macri said. “We need to recover confidence. This happens when a team works together to build institutions, to build a community that is confident, and to create rules that are sustained over time.”
“We don’t need any more slogans,” Macri said. “We need to work together to build the Argentina we want.”
Ernesto Sanz, a center-left senator who also hopes to run for president in 2015, said the next government must focus on “progress” instead of the “corruption and decadence” that he now sees in the government.
The next administration will have to have “leadership not with confrontation but with open dialog, democracy and tolerance,” Sanz said.
The conference came as unions walked off the job for a second national strike this year to demand wage hikes and tax breaks to protect salaries as inflation runs at 40% annual, up from an average of 25% between 2010 and 2013.
“It is clear that people didn’t go to work,” Julio Piumato, head of the court workers union, said on Nacional Rock radio. “Traffic is like on a Sunday.”
8. YPF, PETRONAS TEAM UP ON $550 MILLION SHALE PROJECT IN ARGENTINA (Platts Commodity News)
By Charles Newbery
28 August 2014
Buenos Aires (Platts)–28Aug2014/1016 am EDT/1416 GMT  Argentina’s state energy company YPF said Thursday it has reached an agreement with Malaysia’s state-owned Petronas worth $550 million to jointly develop shale oil resources in the giant Vaca Muerta play in southwestern Argentina.
YPF said in a statement Petronas will contribute $475 million of the initial outlay.
YPF CEO Miguel Galuccio signed the deal with his Petronas counterpart, Tan Sri Dato’ Shamsul Azhar bin Abbas, in Kuala Lumpur earlier Thursday.
In the first three years of the project, the companies plan to develop a pilot for shale oil production in the 187 sq km La Amarga Chica block in Neuquen, using the total planned investment of $550 million.
The companies will drill 30 wells, including horizontal and vertical, with the aim of launching pilot production in the first quarter of 2015.
YPF will operate the block and will farm-out 50% of the production license to Petronas. After the first three years, the companies will move into factory development-mode with an investment of more than $1 billion over five years.
The companies also agreed to evaluate teaming up on the development of other exploration blocks that have potential for shale resources, YPF said.
“We see Neuquen as a very prolific region, with huge potential for growth that will certainly bring enormous benefits for Argentina,” the Petronas CEO said in the statement.
This is the latest partnership YPF has reached for developing the country’s shale resources, estimated among the world’s largest.
YPF already is producing 25,000 b/d of oil equivalent from Vaca Muerta, the largest of the shale plays. That production is coming via a partnership with Chevron, in which the companies plan to invest a total of $16 billion to put a block into full production.
Another partnership has been signed with Dow Chemical for the development of unconventional gas.
YPF, which came under state control in 2012, is seeking to turn around a 6% annual decline in oil and gas production that occurred between 2002 and 2012. The target this year is to increase oil production by 5% and gas by 18% compared with 2013, with a strong focus on unconventional resources.
9. ARGENTINE GOVERNMENT SEES RETURN TO ENERGY SURPLUS IN 19 (Platts Commodity News)
By Charles Newbery
28 August 2014
Buenos Aires (Platts)–28Aug2014/1026 am EDT/1426 GMT   Argentina’s government expects the country will return to an energy surplus over the next five years as the development of shale resources increases oil and natural gas output, Cabinet Chief Jorge Capitanich said Thursday.
“We expect to return to a surplus in energy supplies in 2018 or 2019,” Capitanich said at a business conference in Buenos Aires, listing energy independence as the government’s chief priority.
He said the turnaround will come in a large part thanks to “the role of YPF in oil and gas production.”
Argentina took YPF under state control in 2012 as flagging production led to shortages and a surge in energy imports, led by gas supplies that meet 50% of national energy demand. Oil and gas production have dropped by more than 20% over the past decade, with the decline most notable for gas. Argentina has gone form exporting up to 20 million cu m/d in 2004 to importing more than 40 million cu m/d at times of peak demand this year.
“We need to achieve energy self-sufficiency,” Capitanich said
YPF plans to increase oil production by 5% this year and gas by 18% through the squeezing out of more supplies from maturing conventional reserves and by developing the country’s shale resources, estimated at among the world’s largest.
YPF has reached partnership deals with Chevron and Dow Chemical for developing unconventional resources in Vaca Muerta, and on Thursday entered a new partnership with Malaysia’s state-owned Petronas for the same southwestern play (See story, 1416 GMT).
10. ARGENTINA SEEN AS A FUTURE SHALE GAS SUPPLIER TO CHILE (Platts Commodity News)
By Charles Newbery
28 August 2014
Buenos Aires (Platts)–28Aug2014/1250 pm EDT/1650 GMT  Chile stands to benefit from Argentina’s shale development as a source of much-needed natural gas supplies, a former Chilean government official said Thursday.
The production of Argentina’s shale gas resources “will be a gigantic benefit for the whole region,” Andres Velasco Branes, who was Chile’s finance minister from 2006 to 2010, said at a business conference in Buenos Aires.
The economist said the Argentine supplies will help meet rising demand for gas in Chile, which already has pipeline connections in place to bring in the supplies across the Andes.
Chile was a big buyer of Argentine gas in the 1990s and early 2000s, purchasing up to 20 million cu m/d. But when shortages hit Argentina, that country halted most of its gas exports to meet rising domestic demand. Argentine gas production has dropped 20% to 114 million cu m/d since 2004, leading it to import up to 40 million cu m/d from Bolivia and off global markets in its liquefied form.
Chile responded to the cutbacks by turning to coal and liquid fuels, and then building receiving terminals for liquefied natural gas.
The attraction of the shale gas is that it can be cheaper than importing LNG, and can help diversify imports and suppliers, Velasco Branes said.
Argentina is starting to develop its shale resources, estimated at among the world’s largest.
11. INTERNATIONAL NOIR (Chicago Sun-Times)
By Laura Emerick
29 August 2014
Noir knows no boundaries.
That’s the theme of Noir City 6, the touring film festival opening Friday and running through Sept. 4 at the Music Box. Curated and co-presented by the Film Noir Foundation, this year’s lineup goes international, with titles from Argentina, France, Japan, Italy and Spain, alongside American classics starring noir stalwarts such as Dan Duryea, Charles McGraw, Robert Ryan, Lizabeth Scott and Audrey Totter.
Though regarded as a distinctly American cinema style, noir had a global impact, insist film historians and Noir City programmers Eddie Muller and Alan K. Rode. After all, French critics in the late ’40s first identified this American, largely postwar phenomenon of fatalistic crime dramas as “noir” — black film.
“It’s amazing to realize that all these foreign films are contemporary with what we consider American film noir,” said Muller, the founder and president of the San Francisco-based Film Noir Foundation, which also hosts an annual 10-day festival in its home city every winter. “These films weren’t necessarily a response to anything.”
Muller and Rode, who will appear at the Music Box as hosts and moderators of Noir City 6, worried that noir fans might not accept the global concept. “Though we’ve found there is a rich vein of untapped film noir all over the world, we hesitated initially to program these titles,” said Rode, a Film Noir Foundation director and treasurer.
“This is something we’ve wanted to do for years, and we always knew that we’d have to try it first at our home festival,” Muller said. “I was stunned at how well-received it was. But I might have let the genie out of the bottle, because we might have to set up a satellite festival of foreign film noir.”
This year’s lineup attests to the variety and depth of foreign noir, with films by international auteurs such as Henri-Georges Clouzot (“Quai des Orfevres”), Jules Dassin (“Rififi”), Julien Duvivier (“Pepe Le Moko”), Akira Kurosawa (“Drunken Angel” and “Stray Dog”), Jean-Pierre Melville (“Two Men in Manhattan”) and Luchino Visconti (“Ossessione”). “All of which prove that when it comes to noir, this cinema style crosses all boundaries,” Rode said.
Also represented are the lesser-known Latin noirists Hugo Fregonese and Roman Vinoly Barreto. Born in Argentina, Fregonese did two tours of duty in Hollywood, in 1937-38 and 1949-56, making his U.S. directorial debut with “One Way Street” (1950), starring James Mason as a doctor turned thief on the lam in Mexico. It’s part of Noir City 6, along with Fregonese’s “Hardly a Criminal” (1949), which Muller first encountered during a research trip to Argentina.
 
“Fregonese had a very cross-cultural career,” Muller said. “In ‘Hardly a Criminal,’ you can definitely see the influence of Hollywood noir. It’s very reminiscent of ‘The Naked City,’ ” Dassin’s landmark noir made for Universal in 1948.
 
Even more of a rarity is Vinoly Barreto’s “The Black Vampire” (1953), which Muller describes as a feminist reworking of Fritz Lang’s “M” (1931). Muller was introduced to the film by Fernando Martin Peña, the archivist responsible for the rediscovery of the complete “Metropolis” (1927). Virtually unseen outside Argentina, “The Black Vampire” is making its U.S. debut at the Music Box with a brand-new, subtitled 35mm print funded by the Film Noir Foundation.
 
“The Black Vampire” also points to the Film Noir Foundation’s primary mission: film preservation. Noir City proceeds underwrite the foundation’s efforts to restore neglected classics for future generations. “Fernando had the only print anywhere of ‘The Black Vampire,’ and through him, we found an original negative used for the restoration,” Muller said. “And there’s even more stuff in Argentina that we’re working on preserving and getting back into circulation.”
Another restored film serves as the showpiece of Noir City 6, “Too Late for Tears” (1949), which had fallen into public domain and thus had been seen only in inferior prints. The saga of how the foundation came to save “Too Late for Tears” might be worthy of its own documentary. Muller and Rode found a collector with a nitrate copy (which in the U.S. are illegal to own because they are unstable and highly flammable), but he died before the film’s fate could be determined. Eventually, they tracked down dupe negatives in France, and thus began “an amazing feat of restoration, which eventually took five years,” Rode said. “But any noir with greats such as Liz Scott, Dan Duryea and Arthur Kennedy is definitely worth preserving.”
12. CORN HEISTS TURNING GRAIN PORT INTO ARGENTINA’S CHICAGO (Bloomberg News)
By Charlie Devereux and Pablo Gonzalez
Aug 29, 2014
The 200 pesos ($24) that truck driver Hector Jofre usually carries to bribe gang members or shanty dwellers for access to Argentina’s biggest grain port did no good one night in April.
Six youths in a pickup climbed on the back of the rig when Jofre slowed near a railroad track. They opened hatches that spilled 10 metric tons of corn onto 100 meters of road and swept up as much as they could. Jofre says it took three more deliveries without pay to compensate his employer for the loss.
“It used to happen once a month,” said Jofre, 31. “Now it’s every day. Truckers are getting spooked.”
Truck drivers in Argentina, the world’s third-largest exporter of corn and soybeans, say theft and extortion are on the rise at the main port, Rosario. While police have pledged to step up security, escalating crime has boosted shipping fees and compounded delays at terminals, threatening the country’s biggest source of dollar income at a time when Argentina’s debt crisis has sent central bank reserves near an eight-year low.
As grain supplies arrive from a harvest that is almost complete, thieves are targeting cargo, fuel and personal belongings on trucks headed into Rosario, where increasing drug trafficking led to a doubling of the murder rate in three years. The river city handles 80 percent of agricultural exports, and is known as Argentina’s Chicago — the deadliest municipality in the U.S. — for its link with commodities and crime.
Jeopardizing Profit
While data on agricultural crime isn’t available, police and port authorities interviewed by Bloomberg News say incidents are on the rise, affecting deliveries to grain handlers including Cargill Inc. and Archer-Daniels Midland Co. (ADM) Even railway owner Belgrano Cargas & Logistica SA added security after convoys were looted in the province of Santa Fe, which includes Rosario.
“The federal and provincial governments need to get a grip on the situation,” said Ernesto Ambrosetti, chief economist at the Rural Society, the largest farming group. “It isn’t just jeopardizing public safety, but also the ability of the nation’s agricultural industry to operate profitably.”
Government and police officials pledged to step up security near Rosario’s 28 export terminals after meeting with drivers on Aug. 6, the Federation of Argentine Truck Drivers, which represents about 6,000 drivers, said in a statement. After receiving the assurances, the union said it canceled a planned strike to protest the crime wave.
Rising Costs
Fernando Sostre, a spokesman for the Argentine Federal Police, declined to comment when contacted by telephone in Buenos Aires. Damian Umansky, a spokesman for Santa Fe Governor Antonio Bonfatti didn’t respond to two voice-mail messages seeking comment, and the provincial police office in Rosario didn’t respond to six telephone calls seeking comment.
Theft losses and demands from truckers for more pay to deliver in danger zones has sent grain-shipping costs surging, Ambrosetti said by telephone from Buenos Aires.
For a typical 400-kilometer (248-mile) journey to Rosario, the freight rate for grain is up 35 percent in the past year to 325.30 pesos a ton, Interior & Transport Ministry data show. That compares with an increase of 27 percent to 287.35 pesos for other goods. Based on an average load of 29 tons, the difference is about $133 per truckload. Corn futures on the Chicago Board of Trade are up 0.3 percent this month, set for the first monthly gain since April.
Grain-Strewn Road
Massimo Macchiavello, a spokesman for Minneapolis-based Cargill in Buenos Aires, declined to comment on the violence and its costs. Mark Klein, a Cargill spokesman in Minneapolis, deferred questions to Macchiavello. Victor Camargo, a spokesman for Decatur, Illinois-based ADM, declined to comment on whether the company is paying higher prices. He said the company’s security is handled by a third-party firm that’s monitoring the situation. Jackie Anderson, a spokeswoman for ADM in Decatur, didn’t provide a comment.
“Theft has risen to such a level that it’s now normal to see grains and oilseeds strewn over the roads to terminals,” said Alfredo Sese, the technical secretary for the transport and infrastructure commission at the Rosario Exchange, the nation’s largest grain bourse. “That wasn’t the case a couple of years ago.”
Trains are being targeted, according to Belgrano Cargas, the Buenos Aires-based rail operator that doubled security following attempts to steal crop cargoes. A Rosario-bound freight train carrying 2,730 tons of soybeans valued at about $550,000 was looted May 19 after it was derailed by an object left on the tracks, Belgrano spokesman Gonzalo Sanchez Sorondo said. The attack took place in a poor area of the provincial capital, Santa Fe, about 145 kilometers north of Rosario.
Debt Default
The thefts are compounding delays and costs for shipments already being held up by the government’s effort to curb drug trafficking with more terminal inspections, said Guillermo Wade, manager of the Port and Maritime Chamber in Rosario. Keeping a loaded ship docked for four days until inspectors conduct searches can cost an extra $100,000, he said.
For President Cristina Fernandez de Kirchner, Rosario is more than a public security concern. Crop exports generated $23.2 billion last year, the nation’s biggest source of dollars, Association of Grain Exporters data show. The industry estimates grain accounted for 37 percent of all the country’s shipments.
Last month, Argentina defaulted for the second time in 13 years after failing to reach an agreement with holders of government debt. A U.S. court ordered the nation to pay investors in full when it makes payments on restructured bonds.
‘Monkey’ Lookouts
Gang activity has expanded in Rosario, including Los Monos, or The Monkeys, which employ youths to climb trees and act as lookouts, said Enrique Font, a criminologist at National University of Rosario.
In March, police uncovered a network of tunnels that appeared to connect to a house used by Claudio “The Bird” Cantero, the former head of Los Monos who was shot dead outside a discotheque in May 2013, according to prosecutors at the scene. The tunnels, which run under an empty lot, had ventilation shafts, humidity-proof brick walls and tiled floors.
“This shows the operational capacity and funds at their disposal,” Carolina Herrera, Rosario’s public prosecutor, said during an inspection as a digger unearthed further tunnels found by sniffer dogs.
Following 80 raids that led to 40 arrests and the seizure of drugs, weapons and money in April, about 2,000 federal officers remain in Rosario to bolster security, said Jorge Capitanich, who heads President Fernandez’s cabinet of ministers.
Deadliest City
Homicides in greater Rosario jumped to 264 last year from 124 in 2010, according to official statistics compiled by the University of Rosario. Chicago had 415 murders last year, making it the deadliest city in the U.S. Rosario’s homicide rate of 22 per 100,000 in 2012 was quadruple the rate in Buenos Aires at 5.5 per 100,000, according to Supreme Court data.
Jofre, the Rosario trucker, said that while security has improved at the spot where he was robbed, the thieves have simply moved to locations nearby.
“I haven’t been robbed again, thank god,” he said. “But I know a guy who did four trips to Rosario and was robbed four times. I don’t know if that’s bad luck or what to call it. He doesn’t go to Rosario anymore.”
13. SOVEREIGN BONDS CHANGED BY ICMA TO HEAD OFF REPEAT OF ARGENTINA (Bloomberg News)
By John Glover
Aug 29, 2014
Sovereign bond contracts are being changed by the International Capital Market Association to prevent a repeat of the wrangling that has marred the restructuring of Argentina’s debt.
The new terms, known as collective action clauses, allow a majority of bondholders to agree changes to bonds that are binding on all investors, ICMA said in a statement. In future, a minority of investors won’t be allowed to undermine a restructuring agreed by 75 percent or more of bondholders.
The proposals are the response to controversies dogging the restructuring of Argentina’s debt, which in July pushed the nation into its second default in 13 years. Zurich-based ICMA represents about 400 of the world’s biggest investment banks, asset managers and debt issuers and sets capital market conventions and standards.
“The potential adverse fallout globally from the default and restructuring of Argentina’s debt demonstrates the importance of having clear, unambiguous contract terms for sovereign bonds,” Leland Goss, ICMA’s general counsel, said in the statement. The new clauses “will make more orderly and efficient sovereign debt restructurings achievable in the future,” he said.
Argentina’s creditors led by billionaire Paul Singer refused to accept terms agreed by the majority of the nation’s bondholders after its 2002 default, which paid investors about a third of the money they had lent. They pursued it through the courts for a decade until the nation was prevented from meeting a July 30 deadline on payments to its restructured bonds.
The new terms would also prevent holdouts using clauses insisting on equal treatment of bondholders being used to obstruct payments that have been agreed during restructurings.
14. DEEPER ARGENTINE DEFAULT PAIN LOOMS AS CASH CONCERNS GROW (Bloomberg News)
By Camila Russo
Aug 28, 2014
When Argentina defaulted last month, it was a long-standing legal dispute that tripped the government up, not a shortage of cash. Now, though, as the nation sinks deeper into recession, Bank of America Corp. and Jefferies Group LLC are warning the money could soon start running out too.
The distinction between the two events is crucial for bondholders. It’s one thing for an issuer to get entangled in a legal squabble that temporarily blocks debt payments. It’s another thing to not have the cash. While Argentina’s benchmark bonds traded yesterday at 79.9 cents on the dollar, four cents above their five-year average, Jefferies estimates they could plunge to 60 cents if the default morphs into a capacity-to-pay problem.
“Once international reserves start to slide or foreign-exchange weakness accelerates, that should negatively impact bonds,” Siobhan Morden, the head of Latin America fixed-income strategy at Jefferies, said yesterday. “Unwillingness to pay may become inability to pay.”
Morden predicts those reserves, which the country in part uses to service foreign debt, may fall to an eight-year low of $22 billion by year-end from $28.6 billion now if the legal standoff preventing bond payments drags on and stirs capital flight from the country. Bank of America predicts they will drop to $25.4 billion by year-end if the default isn’t remedied.
‘Tight Margin’
So-called net liquid reserves, which exclude assets that can’t be readily deployed to pay debt, will fall to about $8.8 billion, less than the roughly $10 billion that will be needed next year for foreign debt payments, Bank of America said. The measure excludes dollar deposits held at local banks and loans from multilateral lending institutions as well as special drawing rights from the International Monetary Fund and gold.
“It’s a very tight margin” between the country’s net liquid reserves and how much debt it has coming due, Marcos Buscaglia, the chief Latin America economist at Bank of America, said in an interview.
Argentina slipped into default last month when a New York court blocked a $539 million interest payment on new bonds because President Cristina Fernandez de Kirchner didn’t simultaneously pay back creditors who held old bonds dating back to its 2001 default. A U.S. appeals court two years ago awarded full repayment to defaulted bondholders led by Elliott Management Corp., who refused to accept terms of the country’s debt restructuring. Argentina refuses to comply with that ruling.
Capital Flight
Argentina has been shut out of international capital markets since the 2001 default, straining reserves that the country has relied on since 2010 to cover debt payments. Fernandez’s plan to circumvent a U.S. judge’s order by paying foreign bonds through local banks is spurring concern that Argentina won’t resolve the default this year. Prolonging it would quicken the drop in reserves by reducing foreign investment and prompting capital flight.
Economy Ministry press official Jesica Rey didn’t respond to an e-mail seeking comment.
In the week after Aug. 19, when the South American nation disclosed the plan to reroute foreign bond payments through local banks, central-bank reserves fell $172 million to $28.7 billion, the biggest decline in a month.
Peso Decline
The peso has slumped this month as some Argentines pulled money out of the country after the default. It’s weakened 2.3 percent to 8.4014 per U.S. dollar in the official market and plunged to a record low 14.38 per dollar in the black market. The peso is down 22 percent this year, the worst performer among emerging-market currencies; policy makers let it plunge over a three-day period in January.
Goldman Sachs Group Inc. and JPMorgan Chase & Co. each have estimated that total reserves will drop to $24 billion by year-end.
“Argentina isn’t looking for a solution in the short term to the holdouts issue,” Mauro Roca, an economist at Goldman Sachs, said Aug. 25. “This means there won’t be external financing, and devaluation expectations will also put pressure on reserves.”
While concern mounts the slide in reserves undermines the country’s debt-payment capacity, bond prices show investors are betting the default will be cured.
The average price for government bonds in the 30 days after a missed payment is about 26 cents, according to Moody’s Investors Service.
Debt Deal
Argentina’s 2033 bonds are trading at more than three times that level partly because investors are speculating that the country will be able to reverse the default, which would allow bond payments to resume, according to Tom Mullen, a partner at TWM Capital in Westport, Connecticut, which owns the restructured bonds. At that point, the country probably would regain its ability to borrow in international markets.
“The bet is a resolution with Elliott” in the first quarter, Mullen said.
Increased dollar inflows from curing the default would alleviate Argentina’s debt burden next year, which will almost double as $5.9 billion on its Boden 2015 bonds come due. An additional drain on central-bank reserves could come from the province and the city of Buenos Aires, which have $1.5 billion of bonds due next year.
The Argentine treasury also uses transfers from the central bank to cover the government’s budget deficit. In June alone, the budget gap was 16.7 billion pesos ($2 billion), quadruple from a year earlier, according to the economy ministry.
“There are no signs that Argentina can return to the market anytime soon, so the decline in reserves and the faster fall in the peso becomes a concern,” said Jorge Mariscal, the chief investment officer for emerging markets at UBS Wealth Management in New York.
15. YPF, PETRONAS SIGN $550 MILLION VACA MUERTA SHALE ACCORD (Bloomberg News)
By Pablo Gonzalez
Aug 28, 2014
YPF SA and Petroliam Nasional Bhd., state-controlled companies from Argentina and Malaysia, signed a $550 million accord to develop shale oil at the world’s fourth-largest deposit in Vaca Muerta.
Miguel Galuccio and Shamsul Azhar Abbas, chief executive officers for YPF and Petronas, respectively, signed a deal to develop a 187-square kilometer area (72 square miles) at Petronas’s Kuala Lumpur headquarters today, the Buenos Aires-based producer said in an e-mailed statement. YPF will invest $75 million and Petronas $475 million to drill more than 30 wells in three years in southwestern Argentina. Depending on the results the program could be expanded to a five-year $1 billion investment, YPF said.
“We are in preliminary talks with others,” Galuccio said on a videoconference from Kuala Lumpur. “We will keep talking. There is no immediate rush for more joint ventures.”
YPF is seeking partners to develop Vaca Muerta, a formation the size of Belgium that contains at least 23 billion barrels of oil. Chevron Corp. (CVX), the third-largest oil company by market value, signed a memorandum of understanding with YPF in August 2012 that 11 months later led to a development accord. Chevron’s initial Vaca Muerta investment in Loma Campana of $1.24 billion was later expanded to $16 billion.
‘Big Opportunity’
“In line with our strategic plan and results obtained in Loma Campana, it appears to us a big opportunity for YPF and for Argentina to add Petronas as a partner,” Galuccio said in the statement. “Petronas has world class standards and will help us develop our vast shale oil and gas resources.”
YPF and Petronas may also develop offshore in the future as well as explore other fields in Latin America, Galuccio said on the videoconference.
The Petronas-YPF area called La Amarga Chica, or little bitter, is in Neuquen province. It is northwest of Loma Campana, the 290-square-kilometer area in the Vaca Muerta shale formation where Chevron is working with YPF.
YPF plans to buy 10 percent of the area from a provincial-owned company, Galuccio said. The venture is pending provincial approval for a 35-year concession, he said.
Galuccio will travel Aug. 30 to Beijing from Kuala Lumpur, a YPF official briefed on the trip said today, asking not to be named in line with company policy. Galuccio will hold meetings Sept. 1-2 with Cnooc Ltd., PetroChina Co. and China Petroleum and Chemical Corp. in a visit organized by China’s government, the official said.
Petronas also is expanding into Canada with the acquisition last year of Progress Energy Canada. Petronas bought Progress Energy for C$5.2 billion ($4.8 billion) after an initial rejection by the Canadian government.
YPF’s American depositary receipts slid 0.8 percent to close at $33.04 in New York. The ADRs have almost doubled in the past year.
16. ARGENTINE WORKERS IN NATIONAL STRIKE AS ECONOMIC WOES MOUNT (Bloomberg News)
By Charlie Devereux
Aug 28, 2014
Argentine labor unions are staging a second national strike in less than five months as July’s bond default threatens to fuel inflation and undermine growth.
Truckers, train conductors, port workers and waiters walked off their jobs today in a 24-hour strike to demand higher wages and in protest at dismissals. While strikers blocked some of the main entrances to Buenos Aires, most bus and metro services worked as normal, according to TV channel TN.
“There’s a great desire to take part and show the government that people are fed up, tired and seeking answers to these demands that haven’t been met,” Hugo Moyano, secretary general of the General Workers Confederation and a former government ally, told reporters yesterday.
President Cristina Fernandez de Kirchner, who has defied a U.S. court order to pay $1.5 billion to holders of defaulted bonds, faces growing social discontent as the economy stumbles. Last month’s default threatens to speed the decline in central bank reserves, increase the fiscal deficit and widen the gap between the official and black market exchange rates, which could trigger a currency crisis, according to Bank of America Corp.
“It’s a reflection of worker discontent,” said Manuel Mora y Araujo, a Buenos Aires-based political analyst. “Prices are rising and wages aren’t.”
Falling Behind
Only about 25 percent of union affiliates joined the strike, Cabinet Chief Jorge Capitanich said today, contradicting claims by Moyano that participation levels exceeded 80 percent. Many international and domestic flights to Buenos Aires’s airports were delayed or canceled.
“There’s no justification for this strike, it’s political in nature,” he said. Union leaders are “supporting the groups that have the most. The government supports those who need work and don’t earn high wages.”
Consumer prices rose 38 percent in mid-August from a year ago, according to Elypsis, a Buenos Aires-based research firm. The government hasn’t issued a figure for annual inflation since February, when it unveiled a new index. Registered salaries rose 29 percent in June from a year earlier, according to the state-run statistics agency.
“You’re going to have a relatively significant strike but I doubt you’ll see substantial changes in the government’s economic policy,” Carlos Germano, a Buenos Aires-based political analyst.
Soccer Matches
After initially saying it would postpone as many as seven soccer matches, the Argentine Football Association said those games would go ahead. The association said fans may not be able to attend since stadium workers are planning to strike.
The government has sought to kick start the economy, which contracted 0.2 percent in the first quarter from a year ago. Spending rose 57 percent in June from a year earlier as the government raised salaries and energy subsidies.
Still, unemployment climbed to 7.5 percent in the second quarter from 7.2 percent in the same period last year. Gross domestic product is forecast to contract 1 percent this year, according to the median estimate of 22 analysts in a Bloomberg survey.
Economy Minister Axel Kicillof said today pessimism about the economy by businessmen and the media is a “self-fulfilling prophecy.”
Weaker Peso
“If everyone becomes convinced that everything is going bad, no one buys cars and businessmen don’t invest,” Kicillof said today during an event hosted by the Council of the Americas in Buenos Aires. “It’s the paradox of psychology of a science like the economy that sometimes seems cold and exact.”
The government in January devalued the peso by 19 percent to 8 per dollar as it sought to boost competitiveness and shore up international reserves that have fallen to near an eight-year low of $28.6 billion.
On the illegal market, the peso weakened to a record 14.38 pesos per dollar yesterday.
The economic situation has deteriorated since the previous strike on April 10, said Pablo Micheli, head of the opposition-aligned branch of the Confederation of Argentine Workers, or CTA.
The government “hasn’t sought any dialog to resolve the issues and the truth is the crisis doesn’t look like it’s going to subside,” Micheli said in a statement. “We don’t want this to fall on the shoulders of workers and the middle class.”
Capitanich said today “concentrated economic groups” are responsible for price increases and denied government spending caused inflation.
Holdout Creditors
Argentina defaulted July 30 when U.S. District Court Judge Thomas Griesa blocked a $539 million interest payment due on restructured bonds after Fernandez refused to comply with an order to also pay holdout creditors, whose bonds date to a 2001 crisis. Paying the holdouts, whom Fernandez calls “vultures,” would have triggered demands of as much as $120 billion, according to the government.
The default is delaying Argentina’s ability to access dollars as borrowing costs rise and legal restrictions increase. That will probably widen the fiscal deficit this year to about 3 percent of GDP, or $19 billion, according to Luciano Cohan, chief economist at Elypsis.
As the economy weakens and prices rise, tension has been mounting in Argentina since late 2013.
Rising prices triggered looting in several cities in December in which at least eight people died. The looters took advantage of strikes by police for higher wages. That prompted demands from other public sector workers, which may force the government to enter into a second round of wage negotiations this year, according to Bank of America.
Tensions probably will mount further as Argentina enters the hot summer months later this year, Germano said.
“What you’re going to find is a lot of social conflict, especially in December,” he said.
17. BNY MELLON FACES OUSTER FROM ARGENTINA DEBT DEAL, LAWSUIT OVER RELATED PAYMENTS (Forbes)
August 28, 2014
Bank of New York Mellon is under fire from the Argentine government as well as investors in the country’s debt offerings for refusing to release $539 million in interest payments it has been holding on to since June in its capacity as financial intermediary. While the country has cancelled the global custodian’s license to operate as trustee for the government bonds, an investor group has filed a lawsuit against the bank for not paying them their share of the interest. Both parties accuse BNY Mellon of failing in its duty as a trustee. For its part, the custody bank is acting in accordance with a U.S. court ruling last month which prevents Argentina from making interest payments to one group of investors without first paying off another group.
Although we don’t expect BNY Mellon to incur any direct financial penalties from the ongoing debt row, the bank’s loss of the Argentine government as a client is bound to have repercussions for its operations in the region in the long run. But the negative impact of this on the world’s largest custody bank does not warrant a revision in our $37 price estimate for BNY Mellon’s stock.
When Argentina defaulted on its debt in 2001, a majority of investors holding the country’s debt agreed to a restructuring agreement conducted in two phases in 2005 and 2010. But some of the investors refused to be a part of any deal, and took the matter against Argentina to court in an attempt to fully recoup their investments. The ‘holdout’ investors, including NML Capital Fund and Aurelius Capital Management, won the lawsuit and a U.S. court concluded in 2012 that the Argentine government owes them $1.3 billion. While the ruling is being reviewed by the supreme court, the U.S. District Court in New York ruled in June that Argentina cannot pay interest to investors in the restructured debt unless the holdout investors are paid first. Complying with this court order, BNY Mellon refused to disburse interest payments of $539 million from Argentina, triggering a bigger issue.
As the move by the custody bank goes against Argentina as well as holders of the restructured debt, both these parties are now trying to wrest the blocked money out of BNY Mellon’s hands. Argentina aims to do this by revoking BNY Mellon’s rights as a trustee and passing a minor law to appoint the state-run Banco De La Nación Argentina as the financial intermediary. The country has also threatened to sue BNY Mellon if the bank does not return its money soon. At the same time, a group of investors who own €1.3 billion ($1.7 billion) of the restructured notes have already dragged BNY Mellon to court over their share of the interest payment claiming that their euro-denominated bonds are outside the jurisdiction of U.S. courts.
The action against BNY Mellon is likely being used to pressure U.S. courts to settle the matter quickly, and may not result in any legal liability for the custody bank itself. However, we do believe that the bank’s revenues from Argentina will be negatively impacted over coming years from the country’s decision to replace it as trustee to all its debt offerings. This directly affects the bank’s treasury fees as of now, and could also hit its asset servicing fees if state-held entities which currently employ the bank’s services as a custodian also pull out from its services.

The US vs Russia confrontation is getting serious –Russia has shut down a fifth McDonald’s, claiming food safety issues.
big mac attack!

¿Dolares necesita Argentina?

29 agosto, 2014

ARGENTINA SALVAJIZADA

Aunque a titulo personal, los Kirchners no los necesiten, los dolares parecen faltar en el mercado financiero argentino, y se dice ese es la razon por la cual el funcionario Moreno, oficialista equivocado, esta haciendo destrozos en nuestra economia, al punto que se deteriora nuestra industria porque no pueden importarse insumos, por falta CULPA de Moreno, el equivocado tardio dirigista, ya que el cristinismo parece no creer en la unica ley que existe en economia: la oferta y la demanda.

La Nacion hoy publica un interesante articulohttp://www.lanacion.com.ar/1453876-ordenan-al-pais-pagar-intereses-por-sus-bonos-a-un-fondo-buitre, vinculado al Juez Griesa de Nueva York, que nos mira con ojo de halcon desconfiado, porque al sistema kirchnerista cristinista nadie le cree, y esto no comenzo con Nestor, sino con los bandidescos gobiernos de Fernando de la Rua Cavallo y luego con el peor de todos, el del jamas votado para Presidente Duhalde, el asesino de la convertibilidad, tan criticada…

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DESGOBERNAR EDUCA

29 agosto, 2014

ARGENTINA SALVAJIZADA

Los ferrocarriles y subterráneos sirven – relativamente – para comprobar que un país pujante como lo fuimos, a partir de x fecha, circa, comenzamos a involucionar. Digamos, 1930 cuando el salvaje salteño General Uriburu asaltó el Poder, violó la Constitución y desde entonces surgió un fascismo autoritario bandido del cual todavía no pudimos salir. Eso conllevó al militarismo que se fue agrandando, creyeron ser dueños del pais, y lo lograron, consiguiendo legitimidad con el dinero publico,  aprovechando las armas, y eso sirvió para convencer a los votantes que era mejor recibir regalos del Estado benefactor peronista, y no estar en sintonía con los países libres,  comenzando por los Estados Unidos. Perón ganó, y a la larga, podemos hoy compararnos con nuestros países vecinos sudacas, noventa y dos años después, el próximo 6 de septiembre. Y veremos que si antes estábamos primeros entre los países sudacas, hoy no  lo estamos. De hecho, en cuanto a poca seriedad, estamos…

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EL COSTO DE VETAR LEYES

29 agosto, 2014

ARGENTINA SALVAJIZADA

Se descarta que Cristina vetará la modificación de la ley de impuesto al cheque que apruebe el Congreso, y que eso tendrá costos y beneficios.

Porque el oficialismo necesita estirar hasta el último segundo el sistema de usar fondos del Estado para construir obra pública CARÍSIMA, cosa que no es constitucionalmente lo ideal, ya que es mejor que existan licitaciones abiertas y precios controlados, pero todavía funciona el sistema corrupto fascista en Argentina, donde el “capitalismo asistido” o Estado favoreciendo amigos ha originado las grandes fortunas locales en la segunda mitad del siglo veinte y hasta hoy.  Posiblemente antes sucedía igual, y estemos por celebrar el bicentenario de la corrupción, pero al menos hoy nos roban argentinos y no  reyes degenerados españoles que lograrnos expulsar dos siglos atrás circa. Ergo, es un beneficio para los Kirchner en el sentido de continuar la política actual. Y un desprestigio electoral, que marcaría…

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Plan vikingo imposible para peronistas

28 agosto, 2014

http://www.lanacion.com.ar/1722386-como-evito-noruega-la-maldicion-del-petroleo explica porqué Noruega avanza cuando Argentina retrocede

¿Impunidad legalizada para Cristina & Cia. por defaultear?

28 agosto, 2014

Enviar al Congreso Argentino un proyecto de Ley que intenta anular un fallo firme del Juez Griesa luce como intento desesperado de garantizar que los desgobernantes argentinos quedarán impunes ante la Justicia  cuando la Ley que enviaron al Congreso sea aprobada. Es una medida desesperada de un gobierno fracasado que se parece bastante al ex General  Galtieri y Asociados cuando desesperados por su fracaso decidieron invadir Malvinas para intentar salvarse. Recordemos que a Galtieri le salió bien la jugada, porque no lo acusaron de haber iniciado una guerra imposible de ganar, ya que el patrioterismo nacional prevaleció sobre la Constitución, que exige autorización del Congreso para iniciar una guerra (o provocarla, se sobreentiende).

La aprobación automática del Congreso hará que en el futuro la justicia argentina considere a  Cristina igual de patriota que Galtieri, porque el Congreso legitimará automáticamente lo que ella pide: desobedecer el fallo firme de la Justicia de Nueva York, a la cual Nestor y Kristina voluntariamente nos sometieron. La Presidenta sabe que esta vez el mundo civilizado no nos enviará la a la Royal Navy, sino que seremos aislados al estilo Cuba por aliarse con la Unión Soviética para poder lanzar misiles atómicos contra la Unión Norteamericana. Eso terminó mal para Cuba, que aún sigue aislada de la civilización occidental en buena medida, por cambiar de bando. ¿Será impunidad para si misma y asociados lo que busca Cristina, al saber que todavía sigue controlando a la Justicia y la Procuración General de la Nación?

Los comentaristas, economistas y analistas no entienden en parte porqué Cristina no cumplió. Podría  victimizarse legalmente gracias al Congreso, futuros jueces la tendrían que considerar tan patriota como a Galtieri por intentar recuperar las islas. Ergo, el patrioterismo sería incorregible, en cuyo caso Ella no tendría límites. Y como no se sabe sobre ciertos acuerdos que realiza con potencias extranjeras no democráticas, tipo China, la sensación de estar en manos de gente omnipotente por ausencia moral de un Congreso y una Justicia independientes de la Presidenta parece mostrar algo peligroso: Argentina no es confiable mientras la Presidenta siga mandando, y faltan todavía 16 meses para que deje la Presidencia. Si la impunidad arriba sospechada fuese real es comprensible que el Gobierno siga su rumbo actual, que perjudica a la enorme mayoría pero cubre al los peces gordos del actual Gobierno para el futuro, cuando tengamos el nuevo presidente sensato y honesto que anhelamos. Ergo ¿porqué el dolar paralelo dejaría de seguir si falta tanto tiempo para el cambio de autoridades nacionales? ¿Porque el gasto público se achicaría si quedan funcionarios que eligen robar hasta el final de su mandato,  aprovechando de la maquina para imprimir billetes? Técnicamente, puede el Cristinismo imprimir billetes de quinientos o mil pesos, ya que el costo del papel y la tinta es el mismo. Pero emitiendo billetes de mil multiplica por diez el valor del dinero inflacionario posible mientras no cambie la Presidencia. ¿A cuanto subiría la inflación cada mes mientras Ella decida mantener el rumbo patriotero anti yanqui de su gobierno?  Una pena para los argentinos, especialmente para los que no la votamos. Los analistas no ven que ella podrá en el futuro defenderse diciendo que el Congreso la autorizó a incumplir nuestra deuda publica contraída desde el Estado de Nueva York, una medida económica donde Argentina no actuó como Poder Publico (algo que dijo como senador nacional  Anibal Fernandez), sino como persona jurídica de derecho privado: tuvo que pedir crédito en territorio  extranjero, porque en Argentina no existe mercado de capitales para prolongar el proyecto populista peronista que fracasa pero  enriquece a quienes lo aplican desde el Poder. Traicionan desde el Poder,  pero eso no será delito cuando se lo hace “por el bien de la Patria” y defendernos de los fondos buitres extranjeros que nos quieren agredir.

Para finalizar: ¿Braden o Perón? ¿Griesa o Cristina? ¿Cristina o pueblo de Argentina? ¿quienes ganaron o perdieron?

ARGENTINE UPDATE – Aug 27, 2014

28 agosto, 2014

Torture, Democracy and Memory in Argentina

by CELILIA GONZÁLEZ
Translator’s Note
This article about the ongoing trauma of Argentina’s dictatorship by Cecilia González won first prize in a contest organized by the former Navy Mechanical School (ESMA), Argentina, which is now the Space for Memory. The purpose of the competition is to contribute to the construction of material that promotes collective memory and the meaning of democracy within society. As González describes, Argentina is the only country in the world that, after some uncertain starts, has systematically tried crimes against humanity of a past regime.  – PT
Carlos Loza didn’t celebrate Christmas in 1976 with a sugarplum.
There was no roast, no cold veal, and no nougat. Not even a fruit salad for pudding. No possibility of celebrating a toast with wine, champagne, or cider. He only swallowed one sugarplum, something he’d hardly been able to hold in his shackled hand, and he couldn’t even see it because the hood covered his eyes. Carlos was being held in the Navy Mechanical School (ESMA), and there he spent the bitterest year’s end of his life.
For Carlos the lonely, tiny piece of candy revealed the depths – in all the word’s meanings – his tormentors could reduce him to at any moment. He was 23 years old and his family did not know what had happened to him. He lived with his mother in Villa Tesei. She spent the holidays searching for him, in desperation. His brother had been stationed in Campo de Mayo, performing his military service. The sugarplums the guards gave to all the prisoners seemed to be a sick joke: after that they did not know if they were going to kill them.
Carlos was taken to the Navy Mechanical School (ESMA) early in the morning on 17 December 1976. The day before, in the afternoon, a gang of youths had kidnapped him from the Communist Party branch offices in Barracas, together with some fellow port workers from Buenos Aires. They bound their hands, covered their heads, and piled them into an ambulance. On arriving at the extermination center, they were given identification numbers. Carlos Loza: 738; Héctor Guelfi: 739; Rodolfo Picheni: 740; and Oscar Repossi: 741. A basement torture session served as their welcome to ESMA. They lost track of time.
Today, almost 37 years after his kidnapping, Carlos is a diligent witness to the hearings in the third court case about the crimes committed in Latin America’s most emblematic of clandestine prisons. Usually he sits in the public hearing room. He listens attentively to every testimony. He weaves together the victims’ stories. Above all else, he is part of the group making sure the guilty face justice.
“I have been able to know in greater detail the stories of the fallen compañeros of the ESMA,” says Carlos one morning with a proud smile that intensifies a heavenly, wide-eyed expression.
***
By the middle of 2013, Argentina had concluded 104 trials for crimes against humanity. Among eleven still ongoing trials, there is one known as ESMA III, a case that involves the largest number of victims (789), torturers (68), and witnesses (930). The first ESMA trial, ESMA I, began in 2007 but was suspended because of the cyanide poisoning of the only person accused, prefect Héctor Febres. By contrast, the second ESMA trial, ESMA II, finished in 2011 with life sentences against twelve torturers, thanks to the testimony of 160 witnesses (Carlos among them). Another four were found guilty and sentenced to prison for 18 to 24 years, with acquittals for two more.
This sixty-year-old man – who always carries a folder or notebook under his arm – testified in the third ESMA trial. Focused, he told the story yet one more time. A story about kidnap and torture that he doesn’t think of as just his own, but of belonging to society.
“Around the 23 December 1976 we managed to figure out what the day was,” he recalled at court – because I knew the dates of the final football championship. When I heard someone say that Boca had one, that’s when I knew what day it was.”
Days in the ESMA revolved around the darkness of the torture chambers, the guards’ unending shouts and threats, the pain from the handcuffs on the wrists and the shackles around the ankles. Resting was impossible. The prisoners sucked on bread because they had been so badly beaten up they could not chew food. For Carlos and his compañeros sleep came from exhaustion, but uncertainty never left them. Sometimes they spoke, when they were transferred to the “Capuchita” where there were fewer prisoners. If the guards caught them whispering among themselves or with other prisoners, they would hit them. In captivity Carlos came to know Hernán Abriata, a member of the Peronist Youth in the Faculty of Architecture. “I am a prisoner like you all, as you’ll find out,” said the young, still disappeared man. He was trying to console them: they wore hoods of a different color to his, a sign they weren’t going to be killed.
“We spoke to each other to find out our names, who we were. There was a tacit agreement: whoever gets out of here has to tell the story. We promised each other because you had to see how it was to not become terrified. That’s what the killers wanted. There’s a place where they can’t win, and it’s called the mind, so you shouldn’t infect others with fear. Not everybody managed it. Some left the ESMA terrified. They even forgot their own names. They quit working, stopped being activists. But we felt we had to tell what we’d seen because it concerned our dignity.”
The kidnapped lived through things that would give them nightmares for the rest of their lives. Carlos once heard a prisoner say, “Nothing’s going to happen to you because you’re pregnant.” Today the port unionist is still investigating who that woman might have been.
From his interrogators he learned of a young priest with a bright future. The priest was told he should collaborate because his father was dying and his family tremendously missed him. That he could go free if he revealed what he knew, giving up his compañeros’ names. Many years later Carlos managed to find out that the priest was Pablo María Gazzarri whose disappearance forms part of the ESMA case.
On 6 January 1977 a guard called Carlos and his compañeros by number. He told them they were going to be set free. He removed their shackles, handcuffs, and hoods. Carlos and Rodolfo were put together in a grey Falcon. Héctor and Oscar went separately, in two other vehicles. The workers from Buenos Aires thought they were being freed but they also feared a trick to kill them. They left them in different parts of Buenos Aires, after telling them they had ended up in ESMA for collaborating with the Montoneros.
Carlos withdrew from activism for a few months. He was afraid. But bit-by-bit he began to meet up with his compañeros from the port. In 1979 they were already calling for strikes and a return to politics. That’s what resistance was like until 1983, when Argentines resurrected their democracy.
***
Democracy brought with it faltering first steps to bring the torturers to justice. Judgments came down against the governing juntas, followed by pardons and decades of impunity. The stalemate continued until 2003 when Congress and the Supreme Court struck down the End Point and Due Obedience Laws, meaning that the judicial processes could restart, now en masse, against many more accomplices, not just against those at the top of the chain of command. Ever since then, Argentina has been the only country in the world to systematically try crimes against humanity.
For each trial to end with a guilty verdict, survivors’ testimony proves crucial. It’s never easy for any of the survivors, even those who are experienced human rights activists. It’s not easy to testify in the presence of torturers and murderers.
“There, sitting in front of us is a new torture. It makes you feel uncomfortable, threatened,” Carlos adds.
When the unionist appeared at hearings for the second ESMA trial, Ricardo Miguel Cavallo, a former marine and director of the clandestine prison, sat just a few steps away. Cavallo was engrossed in his computer screen, bearing the evasive attitude he maintained at every hearing. At the third ESMA trial, Carlos spoke in front of Juan Carlos Rolón, but he only realized it later after he had accused him of being a rapist, an allegation that would weigh against the former lieutenant more than torturer or murderer.
The trials afford relief, an easing for the witnesses.
“They help us mend,” recognizes Carlos, “but in a contradictory way. Justice has come very late and what’s happened cannot be repaired. When they issue rulings, you celebrate, but you also think that it would be better if the murdered or disappeared compañero could be by your side. It’s a pain that nobody can heal.”
The ever-present pain prevents many survivors from even getting close to the Navy Mechanical School (ESMA).
Carlos was one of those. After his kidnapping, he always avoided walking down those streets, especially if it was night. Things changed on 24 March 2004 when Nestor Kirchner offered the state’s apology in front of thousands of people, ordering that the clandestine prison should be turned into a Space for Memory. On that day Carlos braved entering the place where he had been kidnapped and tortured, together with his friends. Overcome by tension, by the memories, but supported by his wife and their two children, he walked about Capucha and Capuchita. He observed a change in the color of a window, the stairs, and the back of the water tank where he spoke to Hernán Abriata, the disappeared man who gave him hope during his captivity. He baptized his only son in honor of Hernán.
Carlos’s tour around ESMA was sufficient. He will never go back. It was too heavy on his spirit. It had been terrifying remembering that in this place neither justice, nor God. Nothing existed there, only the remains of a human being, civilization in retreat.
“It provokes deep thought. The concentration camp diminishes a human being, so one values little things like being able to move your hands around your body. A lot of pain comes with the retreat to primordial times: fighting for food, the loss of dignity, behaving like an animal.”
Carlos recognizes that part of Argentina’s society does not understand the importance of trials for crimes against humanity. There are those who insist that this is past history. Yet all the while the victims, their family members, human rights organizations and other groups have constructed a historical narrative that explains those crimes from the perspective of those who were involved.
That’s why Carlos attends most of three-times a week hearings held in Comodoro Py. He takes note of the testimonies. He looks over the witness lists. He puts together lines of investigation. He discovers the names and numbers of victims whose files can be joined to future processes. He describes operations, dates of kidnappings and names. He uncovers photos of the disappeared. He criticizes the defense witnesses. He proposes measures to speed up the trials, like grouping cases into one procedure, analyzing events according to chronology, to line them up with dates of captivity in the ESMA. Patiently he waits for the judgment to be handed down, by the latest at the end of 2014.
***
Carlos can tell many stories about the twenty-one days he spent in the Navy Mechanical School. But there’s one that scarred him.
One prisoner was delirious. He wouldn’t eat, and he took off his hood, so they hit him. He asked to see his father. “First officer, Montonero, doctor,” he shouted to identify himself. A guard kicked him until he killed him. He covered his corpse with a blanket, leaving it for hours beside Carlos and his friends. Five years ago Carlos got to know a woman named Alejandra Mendé who told him about the disappearance of her bother, Jorge. When they started to piece things together, they discovered that he was the same man that he and his friend had seen die. There hadn’t been many doctors who were first officers in the Montoneros.
Rodolfo Picheni, the port worker freed in the same Falcon as Carlos, never overcame his kidnapping and torture, nor of being an impotent witness to Mendé’s murder. Depression pursued him and worsened every time a new anniversary of his kidnapping came around. On 5 December 2012 a little after the third ESMA hearings began he hanged himself. “Now I am going to be number 30,0001. I’ll be taking care of them,” he wrote in a note.
Since 1976, end of the year celebrations have always been particularly nostalgic for Carlos. But his friend’s suicide last year saddened him. He didn’t let it overcome him. He celebrated Christmas and the New Year with his family, as is his custom. He dined. He toasted. He laughed.
He did all those things. But he’s never tasted a sugarplum again.
 
Cecilia González is a foreign correspondent for NOTIMEX based in Argentina. Her book, “Narcosur: la sombra del narcotráfico mexicano en la Argentina,” was published by Marea in 2013. This prize-winning article first appeared in Spanish under the title, “Sin confites de navidad,” available at: http://www.espaciomemoria.ar/noticia.php?not_ID=378&barra=noticias&titulo=noticia.
Translator Patrick Timmons is a human rights investigator and journalist. He edits the Mexican Journalism Translation Project (MxJTP), a quality selection of Spanish-language journalism about Latin America rendered into English. Follow him on Twitter @patricktimmons.

check out these press reports in English from the Latin American press on HRts violations..  Gripping

http://mexicanjournalismtranslationproject.wordpress.com/

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Wednesday 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
1. ARGENTINA SAYS US-BASED BNY MELLON NOT WELCOME (The Washington Post)
August 26, 2014
BUENOS AIRES, Argentina — Bank of New York Mellon, which has played a central role in the legal dispute that pushed Argentina into default last month, is no longer authorized to operate in the South American country, the government said Tuesday.
Argentina has revoked the BNY Mellon’s permission to operate because of what Cabinet Chief Jorge Capitanich said was the U.S.-based bank’s failure to comply with its duties as trustee of some of the country’s bonds.
BNY Mellon has no retail operations in Argentina, so the government’s announcement appeared to be part of a plan to remove it as a trustee and work around the U.S. court ruling that triggered a default on July 30.
The bank declined to comment on the announcement.
A U.S. court order prevented Bank of New York Mellon from distributing $539 million in interest payments on Argentina’s behalf on July 30, triggering the country’s second default in 13 years.
The court order stemmed from a long battle between Argentina a group of U.S. investors who have been trying to recover the full value of bonds the country defaulted on in 2001, about $1.5 billion. The government has said it cannot pay those investors without compensating the majority of creditors who accepted lower-valued bonds.
The government sent a bill to Congress last week that would work around the court order by removing BNY Mellon as trustee and replacing it with state-owned Banco de la Nacion, which would not be under the jurisdiction of the U.S. courts.
U.S. District Judge Thomas Griesa, who issued the order requiring Argentina to pay the holdout creditors, has said the government’s plan to evade his order would be illegal.
 
2. GLOBAL FINANCE: BNY MELLON DRAWS FIRE ON ARGENTINA (The Wall Street Journal)
By Nicole Hong and Ken Parks
27 August 2014
Argentina and some of its bondholders have found a common enemy: Bank of New York Mellon Corp.
On Tuesday, Argentina’s central bank revoked the New York company’s authorization to operate an office in the country. Last week, a group of hedge funds holding Argentine government bonds sued the bank in London over interest payments they are owed by the Argentine government, whose payment was blocked by a U.S. court order.
The developments are the latest tit-for-tat in a long-running battle between Argentina and its creditors, including a handful of hedge funds that have been pursuing payment on defaulted bonds for a decade.
But it is a sign of how acrimonious the dispute has become that Argentina and some of its bondholders are now taking action against a bank playing the low-profile role of collecting interest payments and distributing them to investors.
BNY Mellon declined to comment.
“With respect to Argentina, it’s certainly generating a lot of headlines, but we don’t expect a meaningful impact” on BNY Mellon’s profitability, said Jason Goldberg, a senior research analyst for Barclays PLC.
Argentina last month defaulted on $539 million of interest payments due July 30, after U.S. District Judge Thomas Griesa ruled the bank couldn’t pass Argentina’s funds onto investors holding Argentina’s restructured debt until the country pays hedge funds holding out for payment on bonds defaulted on in 2001.
Argentine officials have strenuously objected to the order and tried to circumvent it, actions that the judge has warned could result in their being held in contempt of court. Talks aimed at a settlement have continued on and off for several weeks, but no resolution appears in sight.
With the standoff firmly in place, Argentina and investors holding its restructured debt have turned their sights on BNY Mellon, which finds itself caught between fulfilling its obligations as Argentina’s trustee bank and obeying a U.S. court order.
Argentine President Cristina Kirchner last week asked lawmakers for approval to replace BNY Mellon with state-run bank Banco de la Nacion, provided bondholders agree to the change.
“I think it’s symbolic retaliation,” said Nicolas Dujovne, a former chief economist for Banco Galicia who now runs a consulting firm, referring to Argentina’s actions on Tuesday.
A group of hedge funds with Argentine government bonds, including firms led by Kyle Bass and George Soros, filed suit against BNY Mellon in London last week. They say their bonds fall under U.K. law, not U.S. law, and shouldn’t be affected by Judge Griesa’s ruling.
Other bondholders have sued BNY Mellon in Belgian courts and filed an appeal of Judge Griesa’s ruling to the Second U.S. Circuit Court of Appeals, arguing that the bank should be held liable for retaining the funds.
BNY Mellon had previously raised concerns about potential lawsuits, saying in a letter to the court last month that “nearly every economic stakeholder in this litigation has either sued or threatened to sue.” Eric Schaffer, a lawyer representing the bank, said at a hearing last month that “we are the good guys here.”
Citigroup Inc. could be a future target if Argentina’s dispute with creditors drags on. One of the bank’s subsidiaries, Citibank, makes payments to holders of the country’s bonds governed by Argentine law. Their next interest payment is due Sept. 30.
Judge Griesa allowed a one-time payment on the Argentine law bonds last month but said those payments also would be barred in the future unless Argentina pays the holdouts. Citibank has appealed Judge Griesa’s order to the Second Circuit.
A spokesman for Citi said the litigation against BNY Mellon “does not in any way affect Citi Argentina’s commitment to its activities in the country and toward its customers.”
Matt Wirz contributed to this article.
 
3. LOS ARGENTINA (The Wall Street Journal)
August 26, 2014
L.A.’s city council issues an ultimatum to Wall Street. Default ahead?
Capital markets howled when Detroit declared bankruptcy last year and stiffed creditors. So maybe Los Angeles’s city council is doing investors a favor by flagging the risk of a default and Wall Street shakedown.
Earlier this month L.A.’s city council unanimously approved a labor-backed measure demanding that Bank of New York Mellon BK -0.35% Bank of New York Mellon Corp. U.S.: NYSE $39.33 -0.14 -0.35% Aug. 26, 2014 4:00 pm Volume (Delayed 15m) : 3.19M AFTER HOURS $39.23 -0.10 -0.25% Aug. 26, 2014 7:18 pm Volume (Delayed 15m) : 120,583 P/E Ratio 16.95 Market Cap $44.66 Billion Dividend Yield 1.73% Rev. per Employee $295,108 08/26/14 Living Wills Could Hasten Bank… 08/26/14 Argentina Revokes BNY Mellon’s… 08/26/14 BNY Mellon Draws Fire on Argen… More quote details and news » BK in  Your Value Your Change Short position and Dexia renegotiate or terminate interest-rate swaps tied to $151 million in sewer debt. The council stipulated that this be done at no cost to the city and that the banks “return the unfair profits and termination payments since 2008, estimated to have cost the City up to $65 million.” Labor groups have accused banks of “gouging L.A. taxpayers” with “predatory” deals.
If the banks refuse to pay up, the council has ordered the city attorney “to evaluate potential legal remedies.” One of the first foreshocks of Detroit’s bankruptcy was its demand to renegotiate an interest-rate swap in 2009.
The irony, as L.A. administrator Miguel Santana points out, is that the swap deals are benefitting taxpayers. In 2006 the city refunded sewer bonds at a variable rate hedged by a swap contract tied to a fixed 3.34% rate. If interest rates rose, the banks would pay the city. If rates fell, the city would owe the banks.
Because interest rates plummeted, the city has paid the banks $46.8 million since 2006. Yet according to Mr. Santana, the city has still saved $21.7 million to date in debt service and will save $22.9 more by 2028. In 2012 the city paid $8.1 million to bondholders and $4.8 million on the swaps, which altogether is $2.2 million less than what it would have paid had it locked in a 4.3% rate.
Mr. Santana has warned the council against prematurely terminating the deal, which would cost the city $25 million. Yet government unions seem to think banks should lend to the city free of charge. L.A.’s unions issued a report in March complaining that banks “collected $204 million from the City of Los Angeles” last year. They enjoined officials to “Invest in Our Streets, Not Wall Street.” Never mind that banks are financing L.A.’s public works and salaries.
So councilman Paul Koretz proposed the measure demanding that the banks terminate the swaps at no cost. “We need to hold Wall Street accountable where others have not, and let Wall Street know we’re too big to ignore,” he exhorted.
He’s right on that last point. L.A.’s fiscal problems are too big to ignore. The city’s pension costs have soared to $1.3 billion from $157 million over the last decade and now make up about one-fifth of its operating budget. Its unfunded pension liability is nearly $10 billion. Earlier this year Mr. Santana projected deficits of $165.2 million in 2015 and $186.8 million in 2016, which could balloon if the city doesn’t extract concessions from its labor unions. Many government workers in L.A., as in New York, contribute nothing to their health premiums.
If the banks don’t bend, the city can either tell its unions “sorry, we tried” or refuse to pay on the swaps, which would constitute a default. Maybe creditors should start demanding a higher premium to insure against L.A.’s political credit risk.
 
4. ARGENTINA RETALIATES AGAINST BNY OVER DEBT PAYMENTS (Financial Times)
By Benedict Mander in Buenos Aires and Vivianne Rodrigues in New York
August 26, 2014
Argentina retaliated against Bank of New York Mellon on Monday for refusing to make payments to bondholders in compliance with a US court ruling – a move which has also led a group of hedge funds that includes George Soros’ Quantum Partners to sue the US bank.
The move by Buenos Aires, which cancels the banking licences of two local bank officials, follows a proposal sent to congress last week by President Cristina Fernández that aims to replace BNY Mellon as its trustee with a local state-run bank. BNY Mellon’s refusal to distribute the funds last month triggered Argentina’s second default in 13 years.
BNY Mellon has been caught in the crossfire of an acrimonious dispute between Argentina and so-called holdout creditors, led by US billionaire Paul Singer’s Elliott Management. New York’s Judge Thomas Griesa ruled two years ago that the South American nation could not pay the holders of defaulted debt it restructured in 2005 and 2010 without also paying the holdouts.
BNY Mellon has said it will comply with US court orders, but as a trustee it also has a responsibility to dispense payments from Argentina to investors.
A lawsuit filed in London last week by a group of hedge funds, including George Soros’ Quantum Partners and Hayman Capital Management, said BNY Mellon is “failing” its duties to holders of Argentine bonds by refusing to distribute €226m ($298m) of interest on Argentine debt.
The group of hedge funds holds a combined €1.3bn of debt securities, or 11 per cent of euro-denominated restructured Argentine bonds.
Ron Gruendl, a spokesman for BNY Mellon, said the suit “is without merit,” but declined to comment further on the case.
BNY Mellon has considered stepping down as trustee for the Argentine bonds but can only do so if it is able to find a replacement, people familiar with its thinking said. No other banks have yet offered to take over as trustee for the disputed debt.
Argentina’s government has called on BNY Mellon and Citibank – which is also a custodian for some Argentine bonds – to “distribute payments made by the Argentine Republic to exchange bondholders.”
Analysts said the developments are just the beginning of a flood of legal disputes and complications triggered by Argentina’s default, as creditors seek payment through diverse methods.
As well as the bondholders suing BNY Mellon, other creditors are seeking to appeal New York Judge Thomas Griesa’s ruling that prevents the bank from making the payments.
Meanwhile, the holdouts are seeking to seize Argentine sovereign assets, most recently in Nevada, after the government refused to pay them in full despite Judge Griesa’s order that it must do so.
Argentina is also in danger of being declared in contempt of court by Judge Griesa if the plan being debated in congress goes ahead, since it could lead to a change in the jurisdiction of its debt that would circumvent the judge’s ruling.
 
5. ARGENTINA REVOKES CHARTER FOR BANK OF NEW YORK MELLON (New York Post)
August 26, 2014
Argentina’s banking regulator has revoked the charter for Bank of New York Mellon to operate in the country.
The decision, formalized by the Central Bank resolution was signed Monday by its President Juan Carlos Fábrega and Superintendent Cosme Juan Carlos Belmonte.
The Argentine central bank charged based on BoNY’s “non-fulfilment of the contract” as Argentina’s trustee.
Argentina also says that the bank “does not register active operations since December 2012” and that the BoNY “has not financed the country’s residents since January 2013,” according to local reports.
Bank of New York Mellon had no comment on the action.
6. TODAY’S LINKS: WARREN BUFFETT! ARGENTINA! KNEE DEFENDERS! (USA Today)
By John Waggoner
August 26, 2014
Billionaire investor Warren Buffett, outspoken advocate of the wealthy paying their fair share of taxes, could finance up to 25% of Burger King’s merger with Canadian doughnut chain Tim Hortons. The deal will effectively make Burger King, founded in Miami in 1954, a Canadian company, thereby allowing it to dodge U.S. tax rates.
Amazon buys Twitch, a streaming service popular with gamers, for $970 million in cash.
Massive hedge funds Quantum Partners and Hayman Capital have sued Bank of New York in London, seeking a 226 million euro payment from Argentine bonds that was blocked by New York judge Thomas Griesa last month. Griesa had ruled that BONY couldn’t release a $539 million interest payment until it paid another group of hedge funds, led by Paul Singer, on previously defaulted bonds.
Russia shut down a fifth McDonald’s, claiming food safety issues.
The median home price – half are higher, half lower – was $269,800 in July. The average home price: $339,1000. During the bust, builders had to build smaller and less expensive homes to compete with all the distressed sales. With fewer distressed sales now, it appears the builders have moved to higher price points.
Speaking of housing, the property bubble is a major risk to China. How big a bubble? “In just two years – 2011 and 2012 – China produced more cement than the U.S. did in the entire 20th century.”
From 2000 to 2012, American workers as a whole had a tough time, as population grew much faster than new jobs and many people gave up looking for work. There was one major exception: jobs paying $100,000 to $400,000.
Pictures of California’s drought, taken three years apart.
A United flight from Newark to Denver was diverted because two passengers fought over a lock that keeps a seat from reclining. The dispute escalated to the point that the airline decided to divert to Chicago’s O’Hare International Airport. The lock, called the Knee Defender, keeps inconsiderate people from invading your personal space for hours in cramped conditions, and can be purchased for $21.95 at fine websites, such as this one.
7. ARGENTINA REVOKES AUTHORIZATION FOR OFFICIALS AT BNY MELLON (Bloomberg News)
By Daniel Cancel and Camila Russo
Aug 26, 2014
Argentina stripped authorization for two Bank of New York Mellon Corp. officials after the bank, acting as trustee for the nation’s debt, refused to distribute funds to creditors in compliance with a U.S. court ruling.
The resolution, dated Aug. 25 and signed by Superintendent Cosme Juan Carlos Belmonte and central bank President Juan Carlos Fabrega, says BNY Mellon “isn’t complying with its operational objectives,” according to an e-mailed copy from the central bank. The resolution revokes the authorization given to BNY’s local director, Maria de la Cruz Solares, and another official, Mariel Garcia Sturzenegger, for failing to provide local financing as the bank had “no active operations” since December 2012.
U.S. District Judge Thomas Griesa ordered BNY Mellon to retain a $539 million debt payment that Argentina deposited in June because the nation didn’t also set aside funds to pay a group of holdout creditors at the same time. Argentina defaulted on July 30 and last week President Cristina Fernandez de Kirchner sent a bill to Congress to remove the trustee in order to pay bondholders in local accounts. The resolution doesn’t mention the bank’s role in the blocked debt payment.
Ron Gruendl, a BNY Mellon spokesman, declined to comment when contacted by telephone.
BNY Mellon’s unit in London was sued by a group of Argentina’s euro bondholders including Kyle Bass’s Hayman Capital Management LP and George Soros’s Quantum Partners LP for not distributing the interest payment to creditors outside U.S. jurisdiction.
8. SOROS’S ARGENTINE BOND BET REVEALED IN LAWSUIT IN LONDON (Bloomberg News)
By Katia Porzecanski and Camila Russo
Aug 26, 2014
Less than a month after Argentina defaulted for the second time in 13 years, George Soros has suddenly emerged as a key rival of fellow billionaire Paul Singer in the legal fight over the nation’s debt.
According to court documents filed in London last week, Quantum Partners LP, a fund managed by Soros’s family office, has joined a group of investors suing bond trustee Bank of New York Mellon Corp. for failing to distribute 226 million euros ($298 million) of interest payments on Argentine debt. The group, which also includes Kyle Bass’s Hayman Capital Management LP, owns more than 1.3 billion of euro-denominated bonds, court documents obtained by Bloomberg News show.
At the crux of the dispute is a U.S. court ruling won by Singer’s Elliott Management Corp., which blocked Argentina from paying its overseas bonds until the country compensates him and other holders of debt from its 2001 default. While the ruling prevents BNY Mellon from transferring any money deposited by Argentina until Singer is paid, it shouldn’t apply to bonds governed by jurisdictions outside of the U.S., the group says.
“The trustee isn’t acting in its official capacity as trustee,” Bass said in a telephone interview from New York. “Our interest payment is governed by U.K. law, which hasn’t ruled on this. Until there’s a similar injunction in the U.K., they owe us our interest payments.”
Legal Pursuit
Michael Vachon, a spokesman for Soros, declined to comment. Stephen Spruiell, a spokesman for New York-based Elliott, didn’t return e-mails seeking comment on the lawsuit.
Singer, who also sued the governments of Peru and the Republic of Congo after they reneged on their obligations, bought Argentine bonds before its $95 billion default in 2001.
After a more than decade-long legal pursuit for full repayment, Singer and other creditors who refused to accept losses of 70 percent to provide Argentina debt relief are now owed $1.5 billion as of result of the U.S. court orders.
Soros, meanwhile, has been an investor in the South American country for decades, having joined a group that purchased Argentine real estate company IRSA Inversiones y Representaciones SA in the early 1990s.
On June 26, Argentina deposited $539 million into an account at BNY Mellon for an interest payment on its foreign-currency bonds due four days later — without also depositing the amount owed to the holdout creditors led by Singer.
‘Illegal’ Payment
U.S. District Judge Thomas Griesa called the payment “illegal” and prohibited New York-based BNY Mellon from distributing the funds to bondholders.
A default was triggered on July 30, after Argentina failed to reach a settlement with the holdouts by the end of a grace period for making the interest payments. The money remains at BNY Mellon’s account in Buenos Aires.
Argentina revoked the authorization of two BNY Mellon officials for failing to provide local financing, according to an Aug. 25 resolution. The lender had no operations in the country since December 2012, the document said.
In the U.K. lawsuit, Soros, Bass, Knighthead Capital Management LLC and RGY Investments LLC said that BNY Mellon’s London-based unit acted “consistently to protect its own interests, without reference to the interests of the beneficiaries,” according to the documents.
The bondholder group asked the London court to require BNY Mellon to disburse the money to holders of Argentina’s euro-denominated bonds and prevent the bank from doing anything else with the cash.
‘Without Merit’
“The suit is without merit,” Ron Gruendl, a spokesman for BNY Mellon, said in a statement on Aug. 22. “BNY Mellon has consistently followed the binding court orders that govern its actions as trustee in this matter.”
A separate group of investors in euro-denominated bonds plans on appealing Griesa’s ruling in New York. Last year, that group sued Bank of New York Mellon Brussels and Brussels-based Euroclear SA in Belgian court. The outcome of a Sept. 9 hearing set for that case will be “important” for investors and the holdouts, said Bass.
Euroclear, the world’s biggest settlement system, has said the orders are in violation of Belgian law, which prohibits the obstruction of cash transfers made by settlement agents. The law was established in 2004 after an appeals court in Brussels overturned a lower-court order that had prevented Euroclear from accepting or making any payments on Nicaraguan bonds at the request of holdout creditors.
Distributing Payments
Citigroup Inc.’s Argentina unit is also appealing a decision by the judge that bars the bank from distributing payments on securities issued under Argentine law. Fintech Advisory Inc., a hedge fund run by David Martinez, who has litigated against Singer in other cases, said on Aug. 19 it will also appeal Griesa’s ruling.
“Clearly there’s a process of trying to carve out legal and local law” from the ruling,’’ Siobhan Morden, head of Latin America fixed-income strategy at Jefferies Group LLC, said by phone from New York. “The euro bondholders are aggressively trying to separate U.K. law from this expansive injunction.”
Argentina’s euro-denominated debt has outperformed its dollar bonds since the default, with yields on notes due 2033 rising about 2 percentage points, compared with a 2.7-point increase on same-maturity dollar bonds. The spread between the securities widened 15 basis points today to 45 basis points, the biggest since January.
Soros Investments
Soros, the world’s 23rd wealthiest person, met with Argentina’s President Cristina Fernandez de Kirchner last year to discuss investment in the country, according to local newspaper BAE. Soros Fund Management LLC more than doubled its stake in Argentina’s state-owned oil producer YPF SA (YPF), adding 8.47 million shares in the second quarter, according to an Aug. 14 filing. Soros’s 3.5 percent stake worth $450 million makes him the fourth-biggest private holder.
Soros also owned 25.9 million shares worth about $244.6 million in South American agricultural company Adecoagro SA as of June 30, according to a filing with the U.S. Securities and Exchange Commission. That works out to a 21 percent stake, according to data compiled by Bloomberg.
Economy Minister Axel Kicillof has called on bondholders to demand their money from BNY Mellon, saying the nation fulfilled its obligations and isn’t in default.
“In a broader sense, what’s going on right now is the chickens coming home to roost,” Tim Samples, a professor of legal studies at the University of Georgia, said in a telephone interview. “People have been warning for years about the complexities and burdens for third parties in this case and we’re just seeing that unfold.”
9. BNY MELLON SUCKED INTO CENTER OF ARGENTINE DEBT STORM (Reuters News)
By Jorge A. Otaola and Nate Raymond
August 26, 2014
BUENOS AIRES/NEW YORK (Reuters) – Bank of New York Mellon found itself front and center of Argentina’s debt battle on Tuesday after the South American country stripped its authorization to operate there and bondholders seeking payment filed a lawsuit against the U.S. bank.
BNY Mellon, a financial intermediary between the Argentine government and its bond investors, in June held onto a $539 million interest payment owed to bondholders on the orders of a U.S. court.
The U.S. District Court in New York had ruled that Argentina could not pay creditors who accepted discounted restructured bonds under U.S. legislation unless it also paid the holdout U.S. investment funds that rejected bond swaps in 2005 and 2010.
The frozen coupon payment tipped Latin America’s No.3 economy into its second default in little over a decade. The Argentine government argued it had met its debt obligations and urged holders of exchange debt to pursue BNY Mellon for payment.
A lawsuit filed in London by four hedge funds said that BNY Mellon’s actions “have been consistently designed to protect its own interests.”
If the lawsuit – filed at London’s High Court by hedge funds Knighthead Master Fund, RGY Investments LLC, George Soros’s Quantum Partners and Hayman Capital Master Fund – is successful it may put pressure on U.S. District Judge Thomas Griesa, who has presided over Argentina’s drawn-out debt battle with the holdouts, to exempt bonds that fall under jurisdictions outside the United States.
The plaintiffs, who hold Argentine debt amounting to 1.3 billion euros, argue their euro-denominated bonds fall under English legislation and therefore should not be swept up in Griesa’s rulings.
Griesa has ruled the bonds should because interest payments made on them pass through New York and therefore fall under his jurisdiction.
A MOVE TO RESUME INTEREST PAYMENTS
On Tuesday, BNY Mellon said the lawsuit filed against it was “without merit.”
“We continue to follow the current court order to hold onto the money,” a spokesman for BNY Mellon told Reuters.
Argentina’s Congress is due on Wednesday to discuss a law that would replace BNY Mellon as intermediary for payments on foreign law bonds with state-controlled bank Banco Nacion, as part of a new debt restructuring plan.
The central bank “has revoked BNY’s authorization for representation in Argentina,” Cabinet Chief Jorge Capitanich said in his daily briefing. The authorization applied specifically to two BNY Mellon officials.
If Argentina’s draft legislation is enacted and executed, it would allow it to skirt Griesa’s court orders and resume interest payments on an estimated $29 billion in restructured bonds.
The debt crisis has taken a toll on Argentine assets and the peso, which sank to a record low of 14.20 per dollar on the black market on Tuesday despite the central bank’s lifting interest rates in an apparent bid to ease pressure on the currency.
A central bank source, speaking on condition of anonymity, said that revoking BNY Mellon’s authorization would not prevent it from transferring the frozen $539 million to bondholders if it decided to fulfill the payment.
 
10. ARGENTINA REVOKES BANK OF NEW YORK MELLON’S AUTHORIZATION TO OPERATE (Reuters News)
Aug 26 2014
BUENOS AIRES, Aug 26 (Reuters) – Argentina said on Tuesday it had stripped Bank of New York Mellon’s authorization to operate in the South American country, its latest move against the financial institution which obeyed a U.S. court ruling that tipped it into default.
Argentina’s Congress is due on Wednesday to discuss a law that would replace BONY as intermediary for payments on foreign law bonds with the state-controlled bank Banco Nacion, as part of a new debt restructuring plan.
BONY in June obeyed a U.S. court ruling to block a $539 million interest payment on debt that was restructured following Argentina’s record 2002 debt default, paving the way for the country’s second default in 12 years in July.
The court had ruled Argentina could not pay holders of restructured bonds unless it also paid so-called “holdout” U.S. investment funds, which refused its 2005 and 2010 bond swaps in the wake of the 2002 default on about $100 billion of debt.
The central bank “has revoked BNY’s authorization for representation in Argentina,” Cabinet Chief Jorge Capitanich said in his daily briefing. The authorization applied specifically to two BONY officials.
The central bank said it took the measure because the U.S. bank failed to fulfill technical requirements to operate in the country.
A central bank source said on condition of anonymity that revoking BONY’s authorization would not prevent it from transferring the frozen $539 million on to bondholders if it decided to fulfill the payment.
BONY can appeal the measure and put forward new officials for authorization to operate in the country, but the central bank could refuse to accept them, the source added.
11. ARGENTINA REVOKES BNY MELLON’S OPERATING APPROVAL (Dow Jones Institutional News)
26 August 2014
BUENOS AIRES–Argentina has revoked Bank of New York Mellon’s permission to operate a local representative office after the bank, acting as a trustee of some Argentine bonds, refused to transfer interest payments owed to bondholders last month due to a U.S. court order.
“The Superintendency of Financial and Foreign Exchange Institutions has revoked the authorization for the representation of Bank of New York in Argentina,” Cabinet Chief Jorge Capitanich told reporters Tuesday morning.
In a statement, the central bank justified its decision to revoke BNY Mellon’s authorization to operate a representative office because the U.S.-based bank hadn’t provided credit and other financial services to Argentine residents since the end of 2012.
A spokesman for BNY Mellon declined to comment. A person familiar with the matter said the bank’s representative office is unrelated to its trustee contract with the Argentine government.
Argentine President Cristina Kirchner’s government is already seeking to remove BNY Mellon as the trustee of its bonds governed by U.S. and U.K. law through a bill submitted to Congress last week.
Argentina defaulted last month for the second time in almost 13 years when investors didn’t receive $539 million in interest payments due on July 30.
Argentina deposited the money on time in BNY Mellon’s accounts at the central bank, but U.S. District Judge Thomas Griesa blocked its distribution to bondholders after Argentina ignored his ruling to pay a small group of hedge funds that sued to collect on debt the country repudiated in 2001. The default could eventually affect almost $29 billion in Argentine debt issued overseas.
Investors who own EUR1.3 billion ($1.71 billion) of Argentine government bonds affected by Judge Griesa’s order are suing BNY Mellon in the U.K. to gain access to the interest payments they are owed.
Under legislation sponsored by the Kirchner administration, state-run bank Banco de la Nacion would take over as trustee and future interest payments would be made in Argentina if bondholders approve those measures. The bill would also allow investors to exchange their Argentine bonds issued under the laws of other countries for local law bonds.
Analysts say the bill is an attempt to side step Judge Griesa’s ruling, a potentially risky strategy that could see the judge find Argentina in contempt. With Mrs. Kirchner’s ruling coalition holding majorities in both houses of Congress, the bill is expected to be passed and signed into law before Argentina’s next interest payment is due on Sept. 30.
Argentina’s latest default stems from its decision to repudiate about $100 billion in debt during a deep economic crisis in 2001.
Investors eventually exchanged almost 93% of their defaulted bonds for new securities in heavily discounted restructurings in 2005 and 2010 that gave them around 33 cents on the dollar. But some creditors held out for a better deal and sued for full repayment.
In 2012, Judge Griesa ordered Argentina to treat its creditors equally in a case involving hedge funds led by Elliott Management Corp.’s NML Capital Ltd. and Aurelius Capital Management LP. That ruling was upheld by the Second Circuit Court of Appeals and the U.S. Supreme Court in June declined to hear Argentina’s appeal.
Last week, Mrs. Kirchner offered holdouts another chance to restructure their defaulted bonds on the same terms as the 2010 debt exchange. NML and Aurelius, which have won about $1.6 billion after years of litigation, have said the terms of that debt swap are unacceptable.

Chain of Interventions.: No Victories.

The U.S. has opposed Islamists in all eight of the turbulent lands stretching from Libya to Pakistan, yet has not managed to forge a solution in any of them. Are U.S. policies the problem, or is the region’s upheaval beyond the reach of any outside nation to resolve. These conflicts began with the death of the prophet’s grandchildren. 

CÍRCULO VICIOSO ECONOMISTA

27 agosto, 2014

ARGENTINA SALVAJIZADA

También uno tiene analistas económicos preferidos, no todos son iguales. Roberto Cachanosky es uno de ellos y hay varios mas.

El problema es el círculo vicioso que los economistas

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MINISTRA GIORGI INÚTIL

27 agosto, 2014

ARGENTINA SALVAJIZADA

Dentro de lo mamarrachesco del sistema dirigista K el ministerio de la producción es un invento mas improductivo y costoso, como todos los que pretenden DIRIGIR desde el Estado la actividad de los únicos que producen en Argentina: LA GENTE, léase el pueblo, o la “actividad privada”. El resto, RESTA. No produce, GASTA. Algunos con razón (niños, ancianos, enfermos) y otros por “piolas”

(legisladores, ministros dirigistas, sindicalistas, ladrones, AMEN de los que hacen del repartir por caridad su profesión habitual).

LA CULPA NO ES DEL CHANCHO…

Los primeros irresponsables de que la Constitución no se haga cumplir por parte de la Presidenta, los Congresistas Nacionales y los Ministros Kortesanos son obviamente las autoridades de los Gobiernos de las Provincias. Juraron que hacían una Nación Federal y nos engañan desde siempre. Se acomodan como pueden con el Presidente de la República de turno y se asocian (a veces no pueden aparentemente…

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¿SISTEMA FINANCIERO TENEMOS?

27 agosto, 2014

ARGENTINA SALVAJIZADA

A raiz de que se esta levantando la perdiz, en el sentido de que Argentina no tenemos un sistema financiero sensato, reiteramos nuestra posicion. Los Bancos no estan al servicio de la sociedad, no son un servicio publico serio, tipo agua o la electricidad, como sucede en paises bien organizados. Los Bancos argentinos, estatales o privados, estan para que sus propietarios ganen plata, y demasiada, y no para que la gente conocida como the people of Argentina dispongan de creditos a largo y mediano plazo, a tasas razonables y competitivas, como en paises serios. Y esta comprobado que los clientes de los bandos son robados mucho mas desde adentro, porque los bancos estan para saquear al publico, que lo que se les roba desde afuera. Y nada exageramos, la pesificacion fue una estafa gigantesca, y los creditos subvencionados que los bancos oficiales otorgan a los amigos del Poder, lo demuestran.

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