Archive for 31 octubre 2014


31 octubre, 2014
1.    EDITORIAL: OBAMA’S NOT TO BLAME (The Washington Times)
31 October 2014
Argentina blames ‘eagles of empires’ (read America) for its economic woes
President Obama is usually blamed for everything bad that happens to the economy. It’s why his approval rating is in the tank. It goes with the territory. He’s rightly blamed for stifling growth with new taxes and regulations, but only in the United States. It’s a bit nutty to think Mr. Obama has time to torpedo the economies of other nations.
But Cristina Fernandez de Kirchner, the president of Argentina, blames “vultures [that] look a lot like the eagles of empires” for a New York judge’s order that Argentina must pay its debts to Americans. Mrs. Kirchner wants everyone to think that the judge’s decision was carefully coordinated by the White House. She obviously doesn’t understand that nothing is carefully coordinated, much less coherent, about this administration’s dealings overseas.
She apparently expects CIA hit squads, SEAL Team 6, or maybe Sam the Slicer from Cleveland, to show up any day to execute the contract on her. “If something was to happen to me,” she said in a televised speech, “nobody should be looking to the Middle East, but to the North.”
Argentina’s troubles are the inevitable poison fruit of decades of leftist control. Confiscatory taxes, trade barriers, corruption and a political climate that vilifies the producing class have expanded on Mrs. Kirchner’s watch. Recently her administration shut down the Buenos Aires printing plant of the Chicago-based RR Donnelley & Sons, accusing the firm of economic terrorism because it remains profitable.
Mrs. Kirchner raised her war on capitalism a notch last month by pushing through a new “supply law” that forbids companies from reaping “artificial or unfair profits.” The measure gives state bureaucrats the authority to dictate prices, set quantities of goods sold and even establishes profit margins for just about anything produced and sold. A business making a profit risks being fined.
Peugeot became the law’s first victim. The French automaker was fined for failing to deliver enough cars on time to satisfy Mrs. Kirchner’s automobile-subsidy program, her version of “cash for clunkers,” where a list of cars, including nine from Peugeot, are offered at a government-fixed price with government-backed financing.
For nearly a century, Argentina has deliberately devalued its currency to boost export numbers and bring in foreign cash to pay debts. The inevitable side effect of this policy has been runaway inflation — in the 30 percent range. Money in a savings account diminishes by the hour. Bewildered entrepreneurs can’t take long-term risks because they can’t calculate what their investment will be worth a few months in the future.
Mrs. Kirchner blames inflation on corporate greed, spinning the economic troubles as an excuse for more regulation and intervention in the market for “consumer protection.” The predictable result of setting prices below the market level is shortages. Companies won’t produce items they’re not allowed to sell for a profit. Earlier this year, McDonald’s couldn’t serve Big Macs with ketchup because there was a ketchup shortage.
Argentina has yet to go the way of Venezuela, which assigned the army to run the toilet-paper factories, but it’s looking for the way. Argentina has run its economy into the ground without help from Mr. Obama. Mrs. Kirchner knows how to do it herself.
By Ken Parks
30 October 2014
Argentina Taps Line as Reserves Quickly Approach Multi-Year Low
BUENOS AIRES—Argentina’s central bank tapped a currency swap line with its Chinese counterpart for the first time Thursday, requesting the equivalent of about $814 million at a time when its hard currency reserves are under pressure.
Argentina and China agreed to the 70 billion yuan currency swap during a state visit by Chinese President Xi Jinping in July. Argentine officials say the agreement will make it easier for Chinese companies to invest in Argentina and strengthen the central bank’s depleted reserves.
“Under this agreement, the central bank could request additional currency exchanges equivalent to a maximum of $11 billion,” the bank said in a statement Thursday.
The three-year currency swap allows the two central banks to lend as much as 70 billion yuan and the equivalent in Argentine pesos to each other for up to 12 months. China is Argentina’s No. 2 trade partner after neighboring Brazil.
The yuan can be exchanged for dollars or euros in international financial centers such as Hong Kong, London or Singapore, the central bank said.
President Cristina Kirchner needs all the hard currency she can get her hands on to avoid a major devaluation before she steps down at the end of her second term in December 2015.
The central bank’s reserves are fast approaching a multiyear low at $27.4 billion due to fuel imports, debt payments and capital flight, while dollar inflows have waned due to a drop in soy prices and low foreign investment.
Unable to raise dollars by selling bonds abroad due to a legal dispute with creditors, the Kirchner administration is more dependent than ever on trade for hard currency. Earlier this month, the government struck a deal with exporters that will see them ship $5.7 billion in soy and grains in exchange for authorization to export wheat and flour.
The lack of dollars has aggravated Argentina’s deepest recession since the 2001-02 economic crisis as the government cuts imports to save hard currency. At the same time, Mrs. Kirchner’s reliance on the printing of money to finance spending has spawned one of the highest inflation rates in the world, which some economists put as high as 40%.
Analysts expect the economy will contract 2.2% in 2014 and shrink 1.7% next year, according to a recent survey by FocusEconomics. The 2015 federal budget forecasts 0.5% growth this year.
By Camila Russo
Oct 30, 2014
Argentina’s Central Bank reserves are set to rise after receiving the first installment of yuan as part of a three-year, $11 billion currency swap agreement with the People’s Bank of China.
The central bank received the equivalent of $814 million in yuan today and sent the same amount in Argentine pesos, according to an e-mailed statement. Any funds disbursed must be returned within 12 months, according to the agreement that was signed between the two nations in July.
Argentina, locked out of international credit markets since 2001, has restricted imports since defaulting on July 30 in a bid to preserve central bank reserves which have fallen 10.5 percent this year to $27.4 billion. President Cristina Fernandez de Kirchner’s government struck a deal with grain exporters to allow more wheat and corn shipments in return for a pledge of $5.7 billion of grain sales by year-end that will also go into reserves.
“The BCRA can request additional funds for a maximum of $11 billion, which acts as support to implement its financial, exchange and monetary policies,” the bank said in the statement.
In July, the central bank said the agreement will “promote economic development and trade between the two countries,” while strengthening reserves.
Central Bank President Alejandro Vanoli said reserves will end the year higher and the current level isn’t a concern, according to an interview with Radio Del Plata.
“It’s a boost to reserves,” Jose Luis Espert, who runs research firm Espert & Asociados, said in a telephone interview. “But the impact will only be temporary.”
October 30, 2014
BUENOS AIRES, Argentina — Argentina’s Congress has passed an energy law aimed at luring foreign investment into its promising shale oil and gas.
The measure approved by the lower house Thursday cuts the minimum investment needed for energy companies to be exempt from import controls. It also sets new terms for concessions to 25 years for conventional energy and 35 years for shale.
Argentina has one of the world’s largest deposits of shale oil and gas, but only a few companies have made commitments to develop the fields because many fear the government’s interventionist energy policies.
Current concessions will not be affected. They include a deal by state-controlled YPF energy company with oil giant Chevron, which has committed to investing more than $1 billion in the Vaca Muerta deposit in Neuquen province.
By Ken Parks
30 October 2014
BUENOS AIRES–Argentine lawmakers approved a sweeping overhaul to the hydrocarbon law on Thursday to boost investment in Argentina’s vast shale oil and gas deposits in hopes of weaning the country off expensive energy imports.
President Cristina Kirchner’s allies in the Lower House approved the bill after almost 15 hours of debate, with 130 votes in favor, 116 against and one abstention. The bill, which has already cleared the Senate, now awaits Mrs. Kirchner’s signature.
The Kirchner administration and state-controlled YPF SA, Argentina’s largest oil company, lobbied hard for the controversial bill, which sets nationwide rules for royalties and concessions to provide greater certainty for investors. Until now, the provinces have largely set their own rules.
The governors of oil producing provinces initially opposed ceding power to the federal government when Mrs. Kirchner floated the bill in June, but months of backroom arm twisting and horse trading eventually bore fruit.
“I don’t see a game changer in this law unfortunately,” says Daniel Gerold, director at G&G Energy Consultants, who sees the law benefiting incumbents like YPF. “It doesn’t provide any incentives for new companies, and I believe new companies are needed.”
YPF’s shares traded in New York rose 1.1% to $32.12 on Thursday morning.
Mrs. Kirchner and YPF Chief Executive Miguel Galuccio are seeking billions of dollars in foreign investment to develop Argentina’s massive shale gas and oil deposits, mostly located in Neuquén Province.
Argentina ranks second in the world, behind China, in potentially recoverable shale-gas reserves, with 802 trillion cubic feet, according to the U.S. Energy Information Administration. Argentina is also No. 4 in shale oil with an estimated 27 billion barrels.
Analysts say the development of those shale deposits could propel Argentina back into the ranks of energy exporting nations. For years, price caps and red tape deterred investment and turned the country into a net oil and gas importer in 2011. Argentina ran an energy deficit–the difference between its energy imports and exports of more than $5 billion in the first nine months of the year. That deficit has been a big drag on the country’s depleted hard currency reserves, which stand at $27.4 billion.
No one is expecting a quick turnaround in Argentina’s energy fortunes, with Mrs. Kirchner saying in April that energy independence was five years away. Full development of the Vaca Muerta shale formation alone requires between $100 billion and $200 billion, she said.
Investors are placing small bets on Argentine shale energy as memories of Mrs. Kirchner’s acrimonious expropriation of a 51% stake in YPF from a Spanish oil company in 2012 start to fade.
In August, YPF and Malaysia’s Petroliam Nasional Bhd. agreed to invest up to $550 million in Vaca Muerta. YPF and Chevron Corp. have already invested $2 billion to develop shale oil and gas fields under an agreement signed last year.
The government hopes the new oil and gas law will attract more investment. Among the benefits to oil companies, the law caps provincial royalties at 18%, lowers investment requirements to qualify for tax breaks on crude exports, and provides for a unified concession auction process.
The law also differentiates between conventional, unconventional and offshore oil and gas fields. Companies investing in capital intensive unconventional energy projects like shale oil will receive 35-year concessions, compared with 25 years for conventional oil fields.
Argentina needs to fix its wobbly economy if it wants to attract more oil and gas investment, said opposition lawmaker Sergio Massa, who recent polls show as a top contender in next year’s presidential election.
“As long as we have 40% inflation, currency controls… there isn’t much chance of new investment,” he told reporters Wednesday night.
By Hugh Bronstein
30 October 2014
BUENOS AIRES, Oct 30 (Reuters) – Argentina has a new energy investment framework aimed at attracting foreign oil companies to the country’s vast shale deposits after Congress gave final approval on Thursday to reform measures.
Geologists say Argentina has more natural gas trapped in shale rock than all of Europe, a 774-trillion-cubic-feet bounty that could transform the outlook for Western Hemisphere supply.
The package of new laws, passed by a 130 to 116 vote in the lower house, cuts the minimum investment needed for companies to be exempt from import controls to $250 million from $1 billion.
The same level of investment would also allow oil and gas producers to get around foreign exchange controls by holding on to the hard currency earned from 20 percent of their exports.
Argentina’s main shale formation, called Vaca Muerta (Dead Cow), is in the southern Patagonia region.
International companies would love to get their hands on the formation, but many are scarred off by the troubled relationship that President Cristina Fernandez has had with investors.
Her government has nationalized private companies including Argentina’s main energy firm YPF and imposed tough foreign exchange and trade controls that along with inflation clocked at about 40 percent have hammered business confidence.
On top of this, Argentina defaulted on its sovereign bonds in July.
So it was not evident that the regulatory changes will by themselves lead to the investments needed to close Argentina’s energy deficit, estimated at $7 billion this year.
The reform lengthens drilling contracts by a decade to 35 years for shale and 25 years for conventional energy. Companies can win 10-year extensions if they fulfill investment promises.
With each extension, provinces can now increase an initial 12 percent royalty cap to 15 percent, and then up to a limit of 18 percent. Before, provinces negotiated royalties with oil companies on a case-by-case basis with no caps mandated by law.
Opposition lawmakers accused the government of rushing the law through and handing strategic resources to foreign firms.
“They are ratifying the concept of hydrocarbons as a commodity and not as a strategic resource and a common good,” said leftist opposition legislator Claudio Lozano. “The possibility of an export track is suicide for Argentina.”
Developing Vaca Muerta and securing energy independence will cost up to $200 billion in the next 10 years, YPF says.
Argentina has a scant $27 billion in foreign reserves, leaving the government to rely on foreign oil firms to lead the investment drive.
Chevron Corp, Petronas, Royal Dutch Shell and Total have dipped their toes in but their initial investments fall short of putting Argentina on the path to energy independence.
So far Vaca Muerta represents only a small part of Argentina’s total energy production: about 4 percent of oil and 1.3 percent of gas output, according to private estimates.
By Dimitra DeFotis
30 October 2014
Argentina lawmakers voted in energy legislation that could help the country boost its oil and gas production over the next two decades.
It took months of negotiations between the government, provincial governors and other interests to agree on distributing revenue from the country’s oil and gas deposits. The legislation now requires the signature of President Cristina Fernandez de Kirchner.
Argentina’s debt default drama and infighting on central bank controls has obfuscated some well-known facts: Argentina is No. 3, worldwide, in shale-gas reserves, and No. 4 in shale oil, according to the U.S. Energy Information Administration. Yet Argentina’s refining capacity is limited and it imports energy products, according to the EIA. The bill would allow Argentina to boost crude oil production to 1.8 million barrels per day by 2035 from about 550,000, and natural gas output could more than triple, according to an Accenture report quoted by Bloomberg.
Shares of oil-and-gas producer YPF ( YPF) rose 2.5% Thursday. The Global X MSCI Argentina ETF ( ARGT) was up 2%. Oil majors Total ( TOT) and
Chevron ( CVX) have invested in Argentina, and   ExxonMobil ( XOM) has talked with YPF about energy exploration opportunities in Argentina.
Companies are lukewarm to the legislation, says Nicholas Watson at Teneo Intelligence, given Argentina’s economic malaise, currency controls and soaring inflation — 40% by some estimates. According to Bloomberg, the new parameters:
   — allow companies that invest $250 million over three years to sell 20
      percent of production in international markets without paying export
   — allow 35-year concessions to shale and offshore fields.
    — cap royalties at 12 percent plus 3 percent in provincial net income
   — create a federal auction system, replacing one that varies by province.
Watson writes:
“The most positive take-away from the reform is greater regulatory consistency. While provinces set their own royalties and terms for concessions, the new system establishes a country-wide 12% cap on royalties (rising to up to 18% on concession extensions), and introduces a national auction system. In addition, the reform eliminates the carried interest regime by which provincial oil and gas companies have held minority stakes in concessions without having to make up-front investments. And for companies, the new law extends license timeframes, lowers the bar at which point exemptions on export taxes take effect from $1 billion to $250 million, and loosens currency controls by permitting companies to retain hard currency earned from 20% of their exports.
Buenos Aires provincial governor Daniel Scioli’s chief economic advisor last week said that it would take four years to bring inflation down to single digits … devaluation expectations will cause companies to delay investments. Barring a deal with holdout creditors early next year and/or pragmatic moves to correct economic distortions, confidence is likely to remain muted until after Fernandez leaves office in December 2015.
While this author’s most recent Barron’s column, ” Too Early to Fall for Argentina,” was skeptical on Argentina equities for individual investors because publicly-traded options are illiquid, we noted that hedge funds have been betting on YPF. Colleague Andrew Bary said in December 2013 that undervalued YPF shares could triple; the U.S.-traded shares are down 1% year to date.
Charles Newbery
30 October 2014
Buenos Aires (Platts)–30Oct2014/405 pm EDT/2005 GMT   Argentina’s biggest shale play, Vaca Muerta, has potential to more than triple the country’s oil and natural gas production over the next 20 years, but a continued decline in global crude prices could pose a challenge for attracting the investment to make this happen, analysts said Thursday.
Management consultancy Accenture said that if Vaca Muerta is put into development, national oil production could surpass 1.8 million b/d in 2035, up from 550,000 b/d this year.
Over the same period, gas output could go above 317 million cubic meters/d compared with 114 million cu m/d this year, Accenture said in an emailed statement.
Vaca Muerta, in the southwest of the country, is gaining attention for its geological comparisons to the prolific Eagle Ford shale play in the US.
Argentina’s state-run YPF was the first to start producing from Vaca Muerta, in a partnership with Chevron, and output now averages 20,000 b/d of oil equivalent.
BP-backed Pan American Energy, ExxonMobil, Shell, Total, Wintershall and other companies are testing the play for pilot production projects, and Malaysia’s state-owned Petronas is poised to start a pilot with YPF. Russia’s Gazprom is eyeing opportunities.
If the projects come about, Accenture expects that Argentina could reach self-sufficiency in oil around 2020-2025 and for gas by then or soon after.
The expected production would allow Argentina to export surplus supplies, with gas likely going to neighboring countries, Accenture said.
The forecast comes after Argentina’s Congress approved a reform of the oil sector to help attract fresh investment after a decade of dwindling production.
The reform provides longer field licenses and incentives to help make it easier for companies to develop shale as well as conventional and offshore resources.
A challenge, however, is the direction of global oil prices, Ecolatina, an economic consultancy in Buenos Aires, said in a statement.
West Texas Intermediate, the international reference price followed in Argentina, has dropped 24% to about $81/b from around $107/b in June on growth in US production coupled with falling demand in China, Europe, India and Japan, and concerns about supply disruptions stemming from violence in the Middle East.
The price decline could stymie the development of Vaca Muerta by discouraging investment, Ecolatina warned.
Indeed, Ecolatina said that based on YPF’s calculations, WTI must be between $80 and $100/b for Vaca Muerta projects to be viable.
The government last week stepped in to try to encourage Vaca Muerta projects despite the price decline by cutting export taxes if prices decline further.
The Economy Ministry said the withholding tax on exports of oil and derivatives would fall to 13% if WTI drops below $80/b; to 11.5% if it goes below $75/b; and to 10% if it falls to less than $70/b. Since 2007, the tax had been at a fixed 45% on exports if WTI was less than $60.9/b and an increasingly greater rate when above that.
By Katia Porzecanski and Camila Russo
Oct 30, 2014
Three months after Argentina’s bond default, a hedge fund is in talks to form a group that will demand immediate repayment. The move threatens to deepen the standoff between the nation and its creditors, according to Voya Investment Management LLC and Emso Partners Ltd.
New York-based Owl Creek Asset Management LP, which oversees $3.9 billion in assets, is discussing with investors and law firm Kirkland & Ellis LLP the possibility of organizing bondholders to speed up repayment of notes due 2038, four people familiar with the talks said. Owl Creek, which started its Argentina Recovery Fund last month, said in a presentation that accelerating the so-called par bonds may generate gross returns of 100 percent in a restructuring.
With Argentina mired in its second default in 13 years as it refuses to comply with a U.S. court order requiring creditors from its 2001 financial crisis be paid, Owl Creek’s efforts may lead to more protracted legal battles, said Jean-Dominique Butikofer, head of emerging markets at Voya. A bondholder group would need to hold at least 25 percent of the $5.4 billion of dollar-denominated debt to accelerate after today, when a grace period on the securities expires, the bond contracts show.
“It makes the entire situation more difficult,” Butikofer said by phone from Atlanta. “I understand the mechanics and the reason why they’d want to accelerate the par bonds, but I wonder how will Argentina react if they are being dragged into another legal fight and is it worth the time and attorney costs?”
‘Settlement Negotiations’
In an August presentation obtained by Bloomberg News, Owl Creek said that a restructuring could take place as soon as January, when Argentina may negotiate with the unpaid creditors from its 2001 default. Until those creditors, known as holdouts, are paid, the court order blocks any payments on the nation’s overseas debt.
The par bonds, which traded at 54.6 cents yesterday, “have the right to accelerate and have their principal immediately payable in full,” Owl Creek said in the presentation. “This would lead to a seat in settlement negotiations in January, likely resulting in an exchange into new bonds which trade closer to par.”
Patrick Clifford, a spokesman for Owl Creek, declined to comment. Kate Slaasted, a spokeswoman for Kirkland & Ellis, didn’t return two phone calls seeking comment. Jesica Rey, an Argentine Economy Ministry spokeswoman, declined to comment on the risk of acceleration.
Court Order
Cabinet Chief Jorge Capitanich told reporters today that rather than accelerate, bondholders should seek legal action against the U.S. judge that ruled in favor of the holdouts and blocked debt payments.
Argentine officials have said they can’t negotiate with creditors led by Elliott Management Corp. who rejected debt restructurings in 2005 and 2010 until a key bond clause expires at the end of 2014. While Argentina deposited $161 million into a local bank last month to pay interest on the par bonds, the court order prevents bondholders from getting their money until the dispute with Elliott is resolved.
Three months ago, Argentina defaulted because it was prohibited by the court order from distributing a separate bond payment.
Due Interest
Investors collectively holding at least $1.4 billion of the notes can demand full repayment of principal on the dollar pars, as well as past due interest. The pars, which are also denominated in euros and yen, are the cheapest of Argentina’s overseas notes because they pay the lowest interest rates. That also gives them the biggest potential return in a debt swap.
An acceleration may also threaten Elliott’s chances of getting paid, since it would immediately swell Argentina’s debt costs, said Carlos Abadi, the chief executive officer of New York-based investment bank ACGM Inc.
Stephen Spruiell, a spokesman for Elliott, declined to comment on how the firm would be affected by acceleration.
An acceleration may be a bid to pressure Argentina and the holdout creditors into negotiations, according to Patrick Esteruelas, an analyst at Emso.
“The $5.4 billion question is would par holders use the threat of acceleration to force a resolution of the holdouts, or are they choosing to accelerate simply to get better terms on their bonds,” he said by phone from New York.
Immediate Repayment
If the group that demands immediate repayment holds 50 percent of the securities, it can undo the acceleration once Argentina resumes payment.
Building a majority position in the bonds beyond the 25 percent minimum would “lend some credence to the idea that they want to use the threat of acceleration as leverage to force a resolution,” Esteruelas said.
Still, the move is risky because of Argentina’s history of dealing with foreign creditors, said Voya’s Butikofer.
The nation, which has defaulted seven times since its 1816 independence from Spain, imposed losses of 70 percent in its two most recent debt restructurings and has referred to holdouts as vultures, “extortionists” and “terrorists.”
“Putting more fuel on the fire and forcing any kind of debt repayment through legal enforcement will not please the Argentines,” Butikofer said. “I’d rather watch it with some distance.”
By Jonathan R. Macey
October 31, 2014
In avoiding its debts, the country gambles with contempt and faces the discipline of international markets.
When one drives around Buenos Aires or observes a pro-government rally in Argentina, one sees posters showing the head of Judge Thomas Griesa of the U.S. District Court for the Southern District of New York superimposed on the body of a vulture. One poster reads, “Griesa wants your house, your job and your food!”
This story dates back to 2001, when Argentina defaulted for the seventh time on its sovereign debt, to the tune of almost $80 billion in bonds. The country attempted — unilaterally, with no negotiations whatsoever — to offer bondholders new bonds worth roughly 33 cents on the dollar, a deal that was among the sharpest haircuts in the history of international finance. A small group of bondholders, mostly hedge funds, rejected this deal and decided to have their day in court. In order to collect what was owed to them as bondholders according to the terms of the bonds as originally issued. The lawsuit was filed in New York because Argentina, when it issued the bonds, voluntarily chose to sell the bonds in the U.S. and the country voluntarily waived its sovereign right to immunity from suit and agreed that the bonds would be sold pursuant to U.S. commercial law.
Applying U.S. law in 2012 — after years of witnessing Argentina’s maneuvers to evade its contractual obligations and repudiate its debts — Judge Griesa ruled that the holders of the original bonds had valid claims and that these “holdout creditors” had to be paid alongside Argentina’s other creditors, which means that the holdout creditors had to be paid the same proportion of the debt owed to them as was being paid to the holders of the substitute bonds, and that such payments had to be made until the holdouts were repaid in full. On appeal the Second Circuit upheld Grisea’s ruling, and the U.S. Supreme Court declined to hear Argentina’s further appeal (perhaps because Argentina had indicated to the Second Circuit that it would not obey Judge Griesa’s order no matter how the justices ruled).
Out of legal options and determined not to negotiate with the holdouts, Argentina went into default at the end of July, further isolating itself from the capital markets and causing increased economic hardship for its citizens. As the economic climate has worsened and her popularity has fallen, Argentinian president Cristina Kirchner has taken up the slogan “Homeland or Vultures,” painting the holdouts as responsible for all of the country’s ills, from soaring inflation to increased unemployment to labor unrest. A key weapon in that campaign has been to unfairly attack Judge Grisea as an ally of the holdouts.
Cabinet leader Jorge Capitanich accused Judge Griesa of not only being “partial” and “promoting imbalance” in favor of the holdout creditors, but also of not fully grasping the complexities off the case. That is a highly unconvincing critique of a deeply respected judge who has served with distinction for more than 40 years. Not to be outdone, in July, Argentine economy minister Axel Kiciloff, one of President Kirchner’s closest aides, came to Washington, D.C., to give a speech before the Organization of American States in which he called Judge Griesa’s ruling “absurd” and “crazy.”
Minister Kicillof, who appeared again just last week at meetings of the World Bank and IMF to hector against the holdouts, has only increased the verbal attacks on Judge Griesa. In a recent address to Argentina’s Lower House of Deputies, he stated that “the vulture funds found an accomplice judge to make a scandalous profit.” He conveniently failed to mention that the holdouts have yet to collect a dime in this dispute, and have repeatedly stated that they are ready to negotiate.
Judge Griesa has been pushing for a negotiated solution. In June, he appointed the highly respected lawyer Daniel Pollack as “special master” to conduct and preside over settlement negotiations. Perhaps predictably, the Kirchner administration quickly took to disparaging Mr. Pollack and accusing him of having “overt bias in favor of the vulture funds.” Argentina then tried, unsuccessfully, to remove him from his post as special master.
On October 7, 2014, Argentina’s social-welfare minister, Alicia Kirchner, the sister-in-law of Argentina’s current president, Cristina Kirchner, and sister of former president Nestor Kirchner, told Radio America in Argentina that the country is “is making history” by flouting the law. She also asserted that Argentina “should be ruled by politics and not from economics.” This is a bit like saying that nations should not have to obey the law of gravity.
Argentina’s latest stunt involves an attempt to move the case out of U.S. courts and into Argentine courts. Unsurprisingly, Argentina is having a hard time getting its non-holdout creditors to participate in this scheme. It is a blatant violation of Judge Griesa’s orders, and creditors flouting the court’s orders by going to Argentina to collect are fully justified in being concerned that they will be held in contempt of the U.S. District Court in New York. It turns out that breaking Argentina’s contract is not quite as easy as the country’s economic leaders thought it would be.
Argentina also tried to thwart the court’s decision by depositing the money to pay the other creditors (but not the holdouts) in Nacion Fideicomisos SA, a unit of state-run Banco de la Nacion Argentina. Argentina did this because no bank in the U.S. would make these payments, since Judge Griesa had expressly ruled that paying other creditors without paying the holdouts as well was illegal. This scheme is just as unlikely to work.
The paying agent and trustee for the bonds is Bank of New York Mellon Corp., and it, along with other third parties, is barred from making payments that are inconsistent with the court’s rulings or otherwise helping Argentina to avoid the law. This means that Argentina does not really know to whom it owes money, and its U.S. banks cannot help it to find out. Bondholders’ identities are known only by the nominees who serve as the “registered owners” of the securities. The nominees are Cede & Co., a subsidiary of the Depository Trust & Clearing Corp. (DTCC), and Bank of New York Depository (Nominees) Ltd., a subsidiary of BNY Mellon based in London. In the unlikely event that the creditors can be identified without the cooperation of one or both of these firms, any creditors who make it to Argentina to try to collect the money they are owed will be running afoul of the court’s rulings.
In the long run, the real losers here are future generations of Argentinians. Their country is now a pariah in world capital markets, and its currency is rapidly in decline. President Kirchner, whose contempt for the rule of law is a core policy and campaign promise, is going to learn that as difficult as it is for an issuer to thumb its nose at U.S. law that it is committed to obey, avoiding the inexorable discipline of the capital markets will prove even more difficult.
Jonathan R. Macey is a professor of law at Yale Law School.



30 octubre, 2014













                    La desocupación ha llegado a un punto tal que NECESARIAMENTE el movimiento sindical argentino debería formularse la siguiente pregunta:

¿CONSENTIMOS QUE SE CREE UNA CATEGORÍA JURÍDICA ESPECIAL EXTRALABORAL (regida por el Código Civil y no por las leyes del Trabajo),  por razones de emergencia social, para que los desocupados humildes que aspiran a ganar trescientos dólares mensuales o menos, y los menores hasta veinticinco años de edad puedan trabajar sin hacer aportes sindicales?


                     El  movimiento sindicalista argentino ha sufrido la suerte del país, y en buena medida su conducción está desprestigiada y sospechada de ser motivo de…

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Cuando venga a nuestra tierra un CRIOLLO a Gobernar… (Martin Fierro)

30 octubre, 2014



Ese criollo (imaginario pero anhelado por muchos) tendría amor a nuestra tierra, pero mucho más a nuestra gente, de modo que desde el primer instante de asumir la responsabilidad de guiar a la sociedad, se haría las siguientes preguntas: ¿qué necesitamos los argentinos para ser mas felices? ¿Cómo puedo contribuir a ello?

Como obviamente sería una persona con dignidad y sentido común ( DOS DE LAS VIRTUDES CLASICAS DEL CRIOLLO ARGENTINO) , advertiría que la mayoría de los logros humanos requieren esfuerzo humano, es decir TRABAJO,. Y por lo tanto, se haría una nueva pregunta: ¿cómo podría hacer para que TODOS los que quieran hacerlo puedan trabajar, EN VEZ DE CONTINUAR DERROCHANDO EL MEJOR DE TODOS LOS RECURSOS, EL TRABAJO HUMANO?


Así, su política “económica” tendría por meta…

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30 octubre, 2014

La composición numérica de oficialistas en el Congreso Nacional  al día de hoy garantiza que el partido de Gobierno de la exitosa abogada  Presidenta Cristina Fernandez de Kirchner, permite que la Constitución Nacional de Argentina quede desvirtuada. Y que el Poder Ejecutivo tenga – porque sus legisladores lo permiten – la suma del Poder Público, algo que para el espíritu de los Constituyentes de 1853/60 estaba considerado traición a la Patria, un delito horrendo.

Hemos oído a legisladores opositores quejarse de no poder hacer nada, mientras el oficialismo aprueba leyes en forma automática, aparentemente perjudiciales a la Republica Argentina. Y lo dicen compungidos, como si nada pudiesen hacer. Sospecho, sin ser penalista, que se equivocan y  están incurriendo ellos en el delito de incumplimiento de funcionario público. Veamos, y que alguien que lea esto,   y si es constitucionalista o penalista, mejor.

Asociación ilícita existe cuando tres o mas personas acuerdan delinquir en forma permanente. Y un Congreso donde su mayoría se convierte en automática, y se declara obsecuente hacia la persona del Presidente/a, puede ilícitamente permitir que se conviertan en leyes algunos proyectos que prima facie serían delictivos. Ejemplo: el diputado de Narvaez comentó por televisión que el Congreso no puede autorizar una ley que autoriza contratos estatales  secretos  con  empresas al estilo Chevron, porque la esencia  en  una República es que todos se enteren. Y cuando el Estado está ocultando algo a la sociedad, es obvio que la está dañando, para beneficiar a otros. Normalmente, los adjudicatarios bandidos y los desgobernantes que lo autorizan. O lo promulgan, algo que hace el Poder Ejecutivo para que las leyes aprobadas tengan vigencia (si a la Presidenta le disgustara, puede vetarlas, y el delito no puede cometerse).

La solución sería cambiar al Presidente, pero necesitamos todavía mas de un año. Y en el ínterin, demasiado mas puede ser cambiado en forma oculta, y el daño será irreversible. Y como hacer juicio político a la Presidenta es constitucionalmente hoy inviable, por no existir suficientes diputados que acusen y suficientes senadores que decidan apartarla del cargo por estar incapacitada o cualquier otro motivo, habría al menos que atacar a los alcahuetes congresistas para que no sean tan incondicionales y la asociación ilícita pueda ser atacada, con éxito a mediano plazo, cuando buena parte de los irresponsables congresistas oficialistas adviertan que la Justicia cambiará a partir de que el Poder ya no siga en manos del actual gobierno. Es la ley de la vida.

Ergo, si congresistas que están dispuestos a defender a la República, tipo de Narvaez, se deciden a denunciar penalmente a los diputados y senadores que votan aprobando leyes manifiestamente sospechosas por ocultar convenios con el Estado. Esto sería posible cuando hay mas de tres personas en Diputados y Senadores, para aprobar mayoritariamente una ley que oculta cosas, posiblemente para no mostrar que se está ilegalmente beneficiando a una o mas empresas o personas, de forma ilícita. Una denuncia penal incluso puede – si existen fundamentos – lograr que la ley sea vetada por la Presidenta, y demuestre que ella es fiel funcionaria y se niega a que el Congreso apruebe leyes fraudulentas. Recordemos que a partir de diciembre 10 de 2014, Cristina no tendrá su actual Poder. Y que la mitad de los diputados y un tercio de los senadores deberán ser votados para reemplazar a los actuales. Y lo que hoy es mayoría cristinista automática ya dejará de serlo, máxime cuando la Presidenta no es reelegible, y debe esperar hasta 2019 si insiste en recuperar su gigantesco poder que se viene escurriendo, pero todavía puede dañarnos mucho.

Los Jueces no pueden desentenderse de este tipo de denuncias, aunque los legisladores oficialistas hoy se crean impunes. Por eso, las denuncias de diputados opositores que defienden a Argentina de los bandidos estatales pueden denunciar, con la tranquilidad de tener inmunidad por tratarse de hechos que con motivo de su cargo. Pero además, están obligados a denunciar penalmente los delitos que se cometen, y eso incluye los que se hagan desde el mismo Estado, cuando se vuelve de hecho en asociación ilícita que nos oculta al pueblo cosas importantes.

Como ejemplo, recordemos a Galtieri y sus cómplices, que decidieron el “patriótico” rol de recuperar las islas Malvinas de noche, por la fuerza, y nos embarcaron a la población a una guerra imposible de ganar, contra el Reino Unido y la Otan, que nos costó mucha sangre a ambos bandos, e hizo que todavía existan secretos de Estado, al punto que el pueblo argentino ignora todo lo que se firmó respecto de nuestra rendición incondicional en Malvinas. Todavía viven civiles que manejaron dinero estatal en aquella época, tipo los hermanos Alemann, y los congresistas podrían citarlos para que narren a cuanto ascendió lo que perdimos los argentinos por aquella aventura destinada a intentar recuperar el desprestigio de nuestros militares. Ojo: creo que los militares fueron los mas perjudicados, porque al haber perdido en Malvinas, fue posible suprimir el servicio militar, y las Fuerzas Armadas hoy están desprestigiadas y disminuidas a niveles de inutilidad bélica.

Igual daño sufre Argentina cuando los actuales legisladores opositores no denuncian penalmente los hipotéticos negocios turbios que se cometen merced a leyes tramposas que nos ocultan información para que el Pueblo no pueda enterarse y divulgarlo. Sin libertad de prensa y de opinión, somos Republiqueta, y depende de los representantes de la oposición que juraron cumplir y hacer cumplir la Constitución y las leyes, proceder como gente seria y denunciar penalmente a quienes aprueban medidas temerarias, dando la suma del Poder publico a una abogada exitosa que debería saber que ocultar la verdad es impropio en una Republica. El caso Nixon lo muestra. Y el caso Clinton – Oval Room – muestra que cuando un Presidente poderoso declaró supuestamente  la verdad en juicio político,  la acusación no prosperó y siguió en su cargo, y está considerado como uno de los mejores Presidentes.  Cristina lo conoce, puede consultarlo si quiere que Argentina esté mejor gobernada, o incluso contratarlo como abogado exitoso para que la ayude a resolver problemas que parecen insolubles, esto lo pide desde años este blog.

El cristinismo luce hoy patético: el populismo bolivariano ha perdido, los paises deudores como Argentina somos sancionados, los capitales fugan de Argentina y según expertos, los capitales internacionales esperan que nuestra Presidenta deje el puesto para analizar si conviene invertir en un país alocado donde  Galtieri, nos embarcó en la aventura de Malvinas. Y Cristina se pelea con el Juez Griesa y los Fondos Buitres que detentan bonos impagos argentinos.

Venimos Argentina perdiendo desde que los militares el 6 de septiembre de 1930, violaron la Constitución e implantaron a un Fascista general de Presidente. Ese militarismo hizo que los Presidentes civiles se volviesen cada vez mas autoritarios, y no solo a Perón incluyo. Nestor y Cristina fueron demasiado autoritarios, y merecen ser investigados, incluso post mortem. Para que desde chicos los argentinos aprendamos que robar desde el Estado es malo, pero impedirlo desde el mismo Estado es peor, porque DESEDUCA.

Pero los legisladores opositores que no denuncian a sus colegas oficialistas por sancionar leyes sospechosas, también están incumpliendo sus deberes de funcionarios públicos. Y cobran demasiado de un Estado que pareciera estar pagando demasiado a sus funcionarios públicos, mientras las cifras objetivas muestran que hay una inflación delictiva que enriquece al Estado y empobrece a la sociedad. Así, la oposición se convierte en aliada tácita del oficialismo, por inacción y omisión.  Si algún lector lo conoce a de Narvaez, por favor comentarle la posibilidad de denunciar ante un Juez Penal la asociación ilícita DESDE el Congreso Nacional…

Calidad de atención de clientes

30 octubre, 2014
<h3 “”=””>Calidad de Atención de clientes

Henry Whitney


oct29 a las 11:19 P.M.

El adjunto podría interesar algunos de sus lectores.  Trata de un concepto críticamente importante en la empresa moderna: Conseguir la lealtad y compromiso del persona para darle al cliente un trato tan bueno que el cliente vuelve y vuelve. Es un concepto conocido por los empresarios, pero generalmente no aplicado.

Estadísticas que tengo de la Argentina y de otros países indican claramente que el costo de conseguir un nuevo cliente es tan alto que la empresa que depende principalmente de nuevos clientes no  podría sobrevivir. En general, 80% de las ventas se hacen a los que ya son clientes y 60% de los nuevos clientes vienen por recomendación de los que ya son clientes. La llave al éxito esta en retener los clientes. La retención de clientes depende totalmente de la calidad del trato que recibe del personal.

La crisis nuestra en Argentina es que se suman varios temas que, que dificultan estrategias de motivación del personal.

1- La incertidumbre que surge de gobiernos cortoplacistas y corruptos.
2- La incertidumbre económica que surge del punto anterior lleva las empresas a tratar al personal como parte del riesgo empresarial, no como parte de la solución.
3- La falta de lealtad del personal como respuesta a los puntos anteriores.
4- El poder excesiva de los sindicatos que dificulta aún más la creación de lealtad entre el personal y la empresa.
4- Y por mucho que tengamos muchos maravillosos empresarios, hay muchos más que no tienen la capacidad, visión o integridad para pensar a largo plazo.

Sumados, estos puntos, las 21 preguntas de la nota de la capacitadora Norteamericana Joanna Brandi son poco aplicables en nuestro medio. Y así nos va.

,Henry Whitney


    29 octubre, 2014


    La Presidenta es la conductora de la economia argentina, dijo uno de sus mas importantes funcionarios. Lo cual nos alarma, porque sabemos que la economia dirigida es mucho peor que la otra, la que teniamos en la Constitucion Nacional vigente, donde quien trabaja es la gente, the people of Argentina, y quien administra es el propietario de su negocio, o sea, el dueño de lo que trabaja y produce. En cuanto al Estado, la gerente general, que debiera administrarlo, seria la Presidenta. Pero cuya funcion ocupa desde 1994 con la constitucion reformada, el Jefe de Gabinete de Ministros, de modo que ni siquiera Cristina es responsable por eventuales faltantes sospechosos, que muchos sospechamos hubo siempre en los gobiernos argentinos, especialmente en los gobiernos fascistas ladrones. Que entendemos fueron todos, desde 1930 con el golpe militar de Urïburu, hasta hoy, y posiblemente la cosa seguira siendo igual, a menos que Cristina se decida a imitar a…

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    29 octubre, 2014


    Están discutiendo sobre Kicilloff tres personas no suficientemente ancianas como para recordar los horrores de la Década Infame y sus aciertos, y como en aquel entonces de Bancos ignoraban los argentinos muchísimo y necesitábamos recurrir a los británicos. Así se originó el Banco Central, creo un invento ingles.El motivo había sido que desaparecía la moneda metálica, que era con respaldo plata u oro, en los países avanzados que entendían  como funciona un sistema financiero nuevo, sin ya sin moneda metálica.  El oro y la plata del planeta extraídos, ya no alcanzaba para  servir como moneda que permitiera el al creciente intercambio mundial. Se iniciaba la era de la moneda de papel, llamada Fiduciaria, que vale y es aceptada por la confiabilidad del emisor, al igual que los cheques bancarios. P.ej.: casi nadie acepta un cheque a un quebrado. Y cualquiera acepta hoy un cheque personal de President Obama.

    Eso fue un cambio trascendente: no es igual cambiar un bien contra una moneda de oro o de plata,que hacerlo…

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    28 octubre, 2014

    me contaba años atrás un argentino – Humberto Roque – que vivió años  en Francia – el sistema eficaz de los suizos para erradicar delincuentes extranjeros en forma rápida y con bajo costo, y – espero –  sin convertirlos en “desaparecidos”.

    El método era simple: apenas la policía aprehendía a uno o mas bandidos, los llevaba a la comisaría mas cercana, donde se le retenían el botín, lo identificaban tomando huellas dactilares, y decidían su traslado a la comisaría policial mas cercana a la frontera, generalmente con Francia o Italia. Dos policías suizos los custodiaban en el trayecto. En algún momento, los custodios fingían distracción, y permitían que los bandidos fugaran, obviamente sin el botín. Y se les avisaba cual era el modo mas fácil de salir de Suiza para quedar a salvo de su Justicia,  pero se les avisaba que si volvían a ingresar, algo siniestro y definitivo sucedería, motivo suficiente para que los que aprovechaban la oportunidad, decidían jamas volver a entrar a Suiza en su vida.

    Hoy en Argentina se discute cambiar el código de procedimientos para expulsar a bandidos extranjeros, y se enfrentan discusiones jurídicas complicadas, que no distinguen por ahora entre extranjeros que entraron en forma legal y obtuvieron su residencia, o si lo hicieron como turistas no habilitados para trabajar o estudiar. Algunos sostienen que es insensato que a los extranjeros se los expulse, sin ser condenados previamente, y sabemos que un juicio contra eventuales bandidos dura demasiados años durante los que el Estado debe alimentarlos y cuidarlos, y para eso habría que construir muchas mas cárceles de las que tenemos, es decir, un costo muy alto para un país donde los grandes bandidos ocupan los altos cargos del gobierno y no resultan condenados, mientras que los pequeños ladrones extranjeros eran muchos y estaban hacinados en las comisarias, por no haber suficientes cárceles dignas y confortables para cuidarlos tal como exigen las leyes argentinas que se hicieron para un país donde los bandidos eran menos, o quizás porque hace ciento cincuenta años atrás, la Policía tenía instrucciones de terminar con la vida de los indeseables delincuentes, y eso se hacía en forma habitual, porque no habían medios de información suficientes, y la gente no se enteraba: ¿los delincuentes desaparecían literalmente, la tierra se los tragaba o era la Policía la que protegía a la gente honesta  argentina y extranjera de los bandidos extranjeros? Misterio… al menos para mí.

    Siete jóvenes colombianos han sido aprehendidos en Buenos Aires sin portar documentos y esto sucedió porque los guardaespaldas de un Fiscal Federal advirtieron que habían movimientos sospechosos, cuando desde dos motocicletas y dos automóviles, varios hombres efectuaban movimientos sospechosos. Los detuvieron y los apresaron, salieron enmascarados y maniatados por TV y quizás hoy ya están libres. O pueden seguir presos muchos años, con daño y costo para todos, tanto siendo inocentes como culpables. Porque se dice desde el Estado que delincuentes extranjeros vienen, a veces en grupo, al territorio nacional para delinquir y huir al exterior, en cuyo caso el índice de delincuencia peligrosa en Argentina sube demasiado, porque eligen a Argentina como sitio fácil para delinquir al comprobar que los grandes bandidos  que mas dañan están en la cúspide del Poder político en Municipios, Provincias y el Gobierno Nacional. Nuestro Estado deseduca a la población nativa con sus malos ejemplos, pero motivar que ingresen extranjeros para aprovechar que no tenemos fuerzas de seguridad eficaces es una estupidez que cuesta dinero, tiempo y torna al aparato Judicial penal en algo peor de lo que sería si los extranjeros no viniesen  robar a Argentina.

    Cabe pensar proponer una diferenciación entre extranjeros legalmente residentes, y los otros, los que vienen como turistas o sin visa. A los primeros, les corresponden los mismos derechos de los argentinos (excepto el votar y ser Presidentes de la Nación). Al resto, sin papeles validos para ser equiparables a los argentinos en cuanto a derechos, conviene aplicarles un sistema parecido al que usaría Suiza, y conseguía  que los extranjeros atrapados sean expatriados en el acto, bajo la responsabilidad de los gobiernos de sus respectivos países. Ningún país limítrofe de Argentina podría negarse a recibir y repatriar a sus ciudadanos aprehendidos por bandidos. Correlativamente, Argentina debería repatriar  delincuentes argentinos desde el exterior. Y ellos sufrirían las consecuencias de quedar encarcelados en Argentina, un lugar donde los presidiarios las pasan bastante mal, porque hay insuficiente espacio  para la población carcelaria actual, que incluye  un 7 %  de extranjeros.

    El Balance sería interesante: si reducimos al máximo los extranjeros  en nuestras cárceles, y paralelamente incorporamos  a los delincuentes argentinos – numero incierto –  que nos devuelvan desde el resto del mundo, sabríamos si la población carcelaria aumenta o disminuye. Esto nos ayudaría,  quiero suponer. Al menos sabríamos algo mas sobre porqué  la delincuencia parece crecer en Argentina. Y esto brindaría suficiente información para que el Estado Argentino decida a cuales de los condenados en el exterior conviene dejar libres en forma condicional, para aprovechar mejor el espacio carcelario actual, ya que razonablemente el déficit en calidad y cantidad de cárceles en Argentina seguirá por muchos años, porque a los políticos gobernantes el confort de los presos en Argentina no les genera votos. Aunque tampoco votan los bandidos extranjeros presos hoy.

    Confío que servirá para que los argentinos aprendamos que somos DESEDUCADOS desde el Gobierno de turno, que con el mal ejemplo de altísimos funcionarios bandidos va enseñando que robar no es algo malo cuando se lo hace desde el Estado, porque existe impunidad. Quizás eso hará que la gente aprenda a votar por candidatos honestos que proponen objetivos sensatos posibles, y descarten a los ladrones populistas que prometen cosas imposibles, tipo construir mas hospitales y escuelas, mientras el dinero publico es derivado a los paraísos fiscales desde los que la Justicia de Nueva York, y también de Uruguay busca capturarlos como pertenecientes a bandidos que desgobiernan a Argentina desde hace añares. Y que por tratarse de dinero robado por desgobernantes argentinos a nuestro país, es en realidad dinero del Estado Argentino. Y consecuentemente embargable por parte de sus acreedores legítimos tenedores de bonos impagos de la deuda externa.



    28 octubre, 2014


    No tiene desperdicio.
    No hay ni una sola ofensa; ni una sola grosería.
    ¿No les parece que vale la pena difundirlo?
    No está  firmado.  Quién habrá  escrito esta maravillosa síntesis en verso ?
    Es una pena que murieras, Kirchner.
    Este no es el final que yo deseaba.
    Tu corcel desbocado de ambiciones
    Se estrelló cuando menos lo esperabas.
    La muerte no perdona ni a los reyes.
    Para morir sólo basta que estés vivo
    Y a veces se solaza con algunos
    Por su soberbia y su talante altivo.
    Tu mortaja será igual que todas
    Sin oropeles y ningún bolsillo,
    Así que tu riqueza acumulada
    Para vos ya no tendrá sentido.
    Tu muerte no me alegra, te lo juro,
    Porque pensaba en un final distinto:
    Rindiendo cuentas a mi patria amada
    De la perversidad de tus caprichos.
    Aunque quisiera no me aflora el llanto,
    Es infinita la lista que analizo,
    De odios…

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    28 octubre, 2014


    Hoy a las 11:47 A.M.
    Moi et les trois chats joyeux =*&gt;:) devil=  =*&gt;:) devil=  =*&gt;:) devil=
    —– Forwarded Message —–
    From: SUE LITTLETON <>
    Sent: Tuesday, 28 October 2014, 11:46
    Moi et les trois chats joyeux =*>:) devil=  =*>:) devil=  =*>:) devil=

    Principle, Rigor and Execution Matter in U.S. Foreign Policy

    October 28, 2014 | 0800 GMT


    By George FriedmanU.S. President Barack Obama has come under intense criticism for his foreign policy, along with many other things. This is not unprecedented. Former President George W. Bush was similarly attacked. Stratfor has always maintained that the behavior of nations has much to do with the impersonal forces driving it, and little to do with the leaders who are currently passing through office. To what extent should American presidents be held accountable for events in the world, and what should they be held accountable for?

    Expectations and Reality

    I have always been amazed when presidents take credit for creating jobs or are blamed for high interest rates. Under our Constitution, and in practice, presidents have precious little influence on either. They cannot act without Congress or the Federal Reserve concurring, and both are outside presidential control. Nor can presidents overcome the realities of the market. They are prisoners of institutional constraints and the realities of the world.Nevertheless, we endow presidents with magical powers and impose extraordinary expectations. The president creates jobs, manages Ebola and solves the problems of the world — or so he should. This particular president came into office with preposterous expectations from his supporters that he could not possibly fulfill. Thenormal campaign promises of a normal politician were taken to be prophecy. This told us more about his supporters than about him. Similarly, his enemies, at the extremes, have painted him as the devil incarnate, destroying the Republic for fiendish reasons.

    He is neither savior nor demon. He is a politician. As a politician, he governs not by what he wants, nor by what he promised in the election. He governs by the reality he was handed by history and his predecessor. Obama came into office with afinancial crisis well underway, along with the Iraq and Afghanistan wars. His followers might have thought that he would take a magic wand and make them go away, and his enemies might think that he would use them to destroy the country, but in point of fact he did pretty much what Bush had been doing: He hung on for dear life and guessed at the right course.

    Bush came into office thinking of economic reforms and a foreign policy that would get away from nation-building. The last thing he expected was that he would invade Afghanistan during his first year in office. But it really wasn’t up to him. His predecessor, Bill Clinton, and al Qaeda set his agenda. Had Clinton been more aggressive against al Qaeda, Bush might have had a different presidency. But al Qaeda did not seem to need that level of effort, and Clinton came into office as heir to the collapse of the Soviet Union. And so on back to George Washington.

    Presidents are constrained by the reality they find themselves in and the limits that institutions place on them. Foreign policy is what a president wishes would happen; foreign affairs are what actually happen. The United States is enormously powerful. It is not omnipotent. There are not only limits to that power, but unexpected and undesirable consequences of its use. I have in mind the idea that had the United States not purged the Baathists in Iraq, the Sunnis might not have risen. That is possible. But had the Baathists, the party of the hated Saddam Hussein, remained in power, the sense of betrayal felt by Shiites and Kurds at the sight of the United States now supporting Baathists might have led to a greater explosion. The constraints in Iraq were such that having invaded, there was no choice that did not have a likely repercussion.

    Governing a nation of more than 300 million people in a world filled with nations, the U.S. president can preside, but he hardly rules. He is confronted with enormous pressure from all directions. He knows only a fraction of the things he needs to know in the maelstrom he has entered, and in most cases he has no idea that something is happening. When he knows something is happening, he doesn’t always have the power to do anything, and when he has the power to do something, he can never be sure of the consequences. Everyone not holding the office is certain that he or she would never make a mistake. Obama was certainly clear on that point, and his successor will be as well.

    Obama’s Goals

    All that said, let us consider what Obama is trying to achieve in the current circumstances. It is now 2014, and the United States has been at war since 2001 — nearly this entire century so far. It has not gone to war on the scale of 20th-century wars, but it has had multidivisional engagements, along with smaller operations in Africa and elsewhere.For any nation, this is unsustainable, particularly when there is no clear end to the war. The enemy is not a conventional force that can be defeated by direct attack. It is a loose network embedded in the civilian population and difficult to distinguish. The enemy launches intermittent attacks designed to impose casualties on U.S. forces under the theory that in the long run the United States will find the cost greater than the benefit.

    In addition to these wars, two other conflicts have emerged. One is in Ukraine, where a pro-Western government has formed in Kiev to the displeasure of Russia, which proceeded to work against Ukraine. In Iraq, a new Sunni force has emerged, the Islamic State, which is partly a traditional insurgency and partly a conventional army.

    Under the strategy followed until the chaos that erupted after the ouster ofMoammar Gadhafi in Libya, the response to both would be to send U.S. forces to stabilize the situation. Since 1999 and Kosovo, the United States has been the primary actor in military interventions. More to the point, the United States was the first actor and used military force as its first option. Given the global American presence imposed by the breadth of U.S. power, it is difficult to decline combat when problems such as these arise. It is the obvious and, in a way, easiest solution. The problem is that it is frequently not a solution.

    Obama has tried to create a different principle for U.S. operations. First, the conflict must rise to the level that its outcome concerns American interests. Second, involvement must begin with non-military or limited military options. Third, the United States must operate with an alliance structure including local allies, capable of effective operation. The United States will provide aid and will provide limited military force (such as airstrikes) but will not bear the main burden. Finally, and only if the situation is of grave significance and can only be dealt with through direct and major U.S. military intervention, the United States will allow itself to become the main force.

    It is a foreign policy both elegant and historically rooted. It is also incredibly complicated. First, what constitutes the national interest? There is a wide spread of opinion in the administration. Among some, intervention to prevent human rights violations is in the national interest. To others, only a direct threat to the United States is in the national interest.

    Second, the tempo of intervention is difficult to calibrate. The United States is responding to an enemy, and it is the enemy’s tempo of operations that determines the degree of response needed.

    Third, many traditional allies, like Germany, lack the means or inclination to involve themselves in these affairs. Turkey, with far more interest in what happens in Syria and Iraq than the United States, is withholding intervention unless the United States is also involved and, in addition, agrees to the political outcome. As Dwight D. Eisenhower learned in World War II, an alliance is desirable because it spreads the burden. It is also nightmarish to maintain because all the allies are pursuing a range of ends outside the main mission.

    Finally, it is extraordinarily easy to move past the first three stages into direct interventions. This ease comes from a lack of clarity as to what the national interest is, the enemy’s tempo of operations seeming to grow faster than an alliance can be created, or an alliance’s failure to gel.

    Obama has reasonable principles of operation. It is a response to the realities of the world. There are far more conflicts than the United States has interests. Intervention on any level requires timing. Other nations have greater interests in their future than the United States does. U.S military involvement must be the last step. The principle fits the strategic needs and constraints on the United States. Unfortunately, clear principles frequently meet a murky world, and the president finds himself needing to intervene without clarity.

    Presidents’ Limited Control

    The president is not normally in control of the situation. The situation is in control of him. To the extent that presidents, or leaders of any sort, can gain control of a situation, it is not only in generating principles but also in rigorously defining the details of those principles, and applying them with technical precision, that enables some semblance of control.President Richard Nixon had two major strategic visions: to enter into a relationship with China to control the Soviet Union, and to facilitate an alliance reversal by Egypt, from the Soviet Union to the United States. The first threatened the Soviet Union with a two-front war and limited Soviet options. The second destroyed a developing Mediterranean strategy that might have changed the balance of power.

    Nixon’s principle was to ally with nations regardless of ideology — hence communist China and Nasserite Egypt. To do this, the national interest had to be rigorously defined so that these alliances would not seem meaningless. Second, the shift in relationships had to be carried out with meticulous care. The president does not have time for such care, nor are his talents normally suited for it, since his job is to lead rather than execute. Nixon had Henry Kissinger, who in my opinion and that of others was the lesser strategist, but a superb technician.

    The switch in China’s alignment became inevitable once fighting broke out with the Soviets. Egypt’s break with the Soviets became inevitable when it became apparent to Anwar Sadat that the Soviets would underwrite a war but could not underwrite a peace. Only the United States could. These shifts had little to do with choices. Neither Mao Zedong nor Sadat really had much of a choice.

    Where choice exists is in the tactics. Kissinger was in charge of implementing both shifts, and on that level it was in fact possible to delay, disrupt or provide an opening to Soviet counters. The level at which foreign policy turns into foreign affairs is not in the enunciation of the principles but in the rigorous definition of those principles and in their implementation. Nixon had Kissinger, and that was what Kissinger was brilliant at: turning principles into successful implementation.

    The problem that Obama has, which has crippled his foreign policy, is that his principles have not been defined with enough rigor to provide definitive guidance in a crisis. When the crisis comes, that’s when the debate starts. What exactly is the national interest, and how does it apply in this or that case? Even if he accomplishes that, he still lacks a figure with the subtlety, deviousness and frankly ruthlessness to put it into place. I would argue that the same problem haunted the George W. Bush and Clinton administrations, although their challenges were less daunting and therefore their weakness less visible.

    There is a sphere in which history sweeps a president along. The most he can do is adjust to what must be, and in the end, this is the most important sphere. In another sphere — the sphere of principles — he can shape events or at least clarify decisions. But the most important level, the level on which even the sweep of history is managed, is the tactical. This is where deals are made and pressure is placed, and where the president can perhaps shift the direction of history.

    Since the end of the Cold War, the United States has not had a president who operated consistently and well in the deeper levels of history. This situation is understandable, since the principles of the Cold War were so powerful and then suddenly gone. Still, principles without definition and execution without precision cannot long endure.

    Greg Gossett
    Gossett, Harrison, Millican & Stipanovic, P. C.
    2 South Koenigheim
    P. O. Box 911
    San Angelo, Texas 76902-0911
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