El peronismo de la derrota

23 noviembre, 2015


ARGENTINE UPDATE – Nov 20 & 21, 2015

21 noviembre, 2015














By Andrés Oppenheimer
November 18, 2015

If the polls are right and opposition leader Mauricio Macri wins Sunday’s elections in Argentina, we may see a huge change in Latin America’s political map: Macri has vowed to take distance from Venezuela’s leftist-populist regime, and seek closer ties with the pro-market Pacific Alliance bloc made up of Mexico, Colombia, Peru and Chile.

When I asked Macri in an interview earlier this year what would change in Argentina’s foreign policy if he becomes president, he started out by responding, “Everything!” Judging from his statements in recent days, that may turn out to be true. Here are some of Macri’s foreign policy plans:

On Venezuela, Macri has vowed to end outgoing President Cristina Fernández de Kirchner’s close political alliance with Venezuela. During the Nov. 15 presidential debate with government-backed candidate Daniel Scioli, Macri said that he would call for Venezuela’s “suspension” from Mercosur — the southern cone’s economic bloc made up of Brazil, Argentina, Uruguay, Paraguay and Venezuela — for not complying with the group’s democratic clause requiring all member countries to abide by democratic principles.

Macri did not elaborate, but one of his closest foreign policy advisers, Diego Guelar, told me that Macri may propose Venezuela’s suspension from Mercosur shortly after his Dec. 10 inauguration, during a Mercosur summit scheduled for Paraguay on Dec. 21.

According to Guelar, a Macri government would demand Venezuela’s suspension at that meeting if there is fraud in Venezuela’s Dec. 6 legislative elections, and if Venezuela’s political prisoners, including opposition leader Leopoldo Lopez, are not freed by then. “If those two things are not corrected by then, in our judgment, Venezuela will not be complying with Mercosur’s democratic clause,” Guelar said.

On South America’s economic and political blocs, Macri has said that his first priority will be forging a “strategic alliance” with Brazil to jointly start unity talks with the Mexico-Colombia-Peru-Chile Pacific Alliance bloc. Until now, Argentina has been opposed to that, in line with Venezuela’s claim that the Pacific Alliance is too friendly with “U.S. imperialism.”

Sources close to Macri say that, while Brazil until recently also opposed teaming up with the Pacific Alliance, there has been a major change in Brazil over the past six months. With Brazil mired in one of its worst economic crises in recent times, Brazil desperately needs investments, and new free trade deals that would reenergize its economy, they say.

On Iran, Macri has said that he would annul Argentina’s recent agreement with Iran to jointly investigate the 1994 attack on the AMIA Jewish community center in Buenos Aires. Critics say that deal amounted to a cover-up of Iran’s responsibility in the attack. Argentine prosecutor Alberto Nisman was found dead in his apartment a day before he was to testify in Congress about his charges that the Fernández government had conspired with Iran to kill the AMIA investigation.

On ties with the United States, Macri has said that he would revamp bilateral relations, which were severely damaged during the Fernández presidency. The first area in which he would forge closer ties with Washington would be in anti-drug efforts, Macri said.

A Macri government would also significantly tone down Argentina’s current anti-U.S. rhetoric. “The current government has chosen the systematic confrontation with almost the entire world, which has left us very isolated,” Macri told me during the interview in March. “We must reach out to the world, create new long-term strategic agreements, and recover markets for our products.”

My opinion: Politicians tend to say whatever is needed to differentiate themselves from their rivals, but Macri may be sincere in his foreign policy plans for the simple reason that Argentina is broke, and the country badly needs to restore its relations with the world’s biggest markets — the United States and Europe — after years of estrangement.

Argentina’s economy has not grown for the past three years, international prices for its raw materials have fallen and are not likely to come back anytime soon, and its current closest friends — Venezuela, Russia and China — are either bankrupt or suffering from economic slowdowns. Argentina’s foreign policy will change no matter who wins on Sunday, but it will change much more under a President Macri.

November 18, 2015

BUENOS AIRES, Argentina — Several Argentine human rights groups, including the Grandmothers of the Plaza de Mayo, are endorsing ruling party candidate Daniel Scioli in Sunday’s presidential runoff election.

The groups expressed their support at a Wednesday news conference. They say the ruling party has focused on what is best for all Argentines with policies of “inclusion” that they say would be threatened by an opposition victory.

Outgoing President Cristina Fernandez and late husband and predecessor, Nestor Kirchner, made uncovering human rights abuses and trying perpetrators from the military dictatorship central in their administrations. Rights groups estimate 30,000 people were killed or disappeared during the 1976-83 dirty war.

Opposition candidate Mauricio Macri has called the rights polices under Fernandez “vindictive” and says the government must focus on human rights abuses of the 21st century.

By Andre F. Radzischewski
November 18, 2015

BUENOS AIRES — Just days before Argentina’s presidential runoff vote, center-right Buenos Aires Mayor Mauricio Macri has emerged as the unlikely front-runner as voters appear poised to turn the page on the 12-year rule of populist incumbent Cristina Fernandez and her late husband and predecessor, Nestor Kirchner.

A Macri win in the continent’s second most populous country would mark the first major electoral defeat for the leftist governments that have dominated South America for the better part of a decade. A member of a prominent family of entrepreneurs, the opposition leader would likely embark on a more market-friendly course and aim to improve Argentina’s strained ties with Washington.

Anticipating a U-turn in foreign policy, Mr. Macri said in Sunday’s final debate with Daniel Scioli, Ms. Fernandez’s handpicked heir, that he would ask the Mercosur trade bloc to suspend Venezuela over the “abuses” of leftist President Nicolas Maduro, whom he accused of holding “political prisoners” and fostering “military participation” in government.

Ms. Fernandez — a close personal friend and admirer of Mr. Maduro’s predecessor, Hugo Chavez — had long counted the Venezuelan leader as one of her key allies and routinely accused the U.S. of interfering in the internal affairs of their countries. She is barred from running again after eight years in the Casa Rosada, Argentina’s executive mansion.

Critics of the outgoing Argentine president have warned that her policies might lead to a Venezuelan-style economic meltdown, and Mr. Macri has argued that tight currency controls have failed to quell capital flight in both countries.

His arguments appear to be finding an audience.

In an opinion poll published Nov. 13 by the Clarin daily, Mr. Macri holds an 8-point lead over Mr. Scioli, the governor of the Buenos Aires region. With opposition parties largely coalescing around the challenger, the former president of the Boca Juniors soccer club has held similar advantages in nine out of 10 surveys conducted since he came in a close second Oct. 25 in the first round of the election.

What had been a lackluster campaign has turned into a fiery duel between the candidates, with Mr. Macri assailing his rival’s deep ties to the increasingly unpopular president and Mr. Scioli warning that a Macri win would invariably end in a doomsday scenario of brutal spending cuts, fiscal austerity and concessions to Argentina’s foreign creditors.

Most observers now believe that the election is Mr. Macri’s to lose, in part because Mr. Scioli faces a dilemma in trying to win over voters critical of Ms. Fernandez without offending his own base, said Joaquin Morales Sola of the La Nacion daily.

In interviews and TV spots, the candidate of the Peronist Front for Victory coalition attempted that balancing act, promising to be “more Scioli than ever” and acknowledging voters’ “anger” over the recent record of the government.

Still, “it is going to be very difficult for Scioli,” Mr. Morales Sola said.

“Sixty percent of society has asked for a change,” he said. “That is what has provoked such a change in the scenario.”

Jab-filled debate

Sunday’s jab-filled debate, meanwhile, may only have solidified the situation as both candidates largely stuck to their guns. Predictably, Mr. Macri never tired of comparing his rival to Ms. Fernandez during the clash, attacking what he said was her abrasive and authoritarian governing style.

“What have you turned into, Daniel? What have they turned you into? ” the mayor asked at one point. “… We need a president who talks less and listens more, who does press conferences and not televised statements, who understands the value of the team and not [a] personality cult.”

A fidgeting Mr. Scioli, meanwhile, accused his challenger of trying to camouflage his supposed commitment to obey a U.S. judge’s order to pay off foreign bondholders of Argentina’s debt instead of investing the money at home, a potent issue in Argentina.

“Either we again kneel before Judge Griesa or we have an Argentine development bank,” he said. “It is either the International Monetary Fund that once again dominates us, or it is Argentine pride and Argentine self-esteem.”

Mr. Scioli’s tone was in line with what critics have dubbed his “scare campaign” linking Mr. Macri’s policy proposals to those that caused the 2001 economic meltdown and the ensuing civil unrest and devaluation — still fresh in the memories of many Argentines.

“Do you imagine yourself without a roof? Do you imagine the hunger? Do you image [what happens] if Macri wins?” asked a TV spot for the 58-year-old former powerboat racer set to footage of riots, looting and homeless vagrants scavenging through garbage.

But Mr. Scioli’s tactics so far have not paid off in the polls, in part, perhaps, because Mr. Macri largely refused to take the bait and instead chose to mock the apocalyptic warnings.

“My daughter, Antonia, came to me to ask if it was true that Kinder Eggs would no longer have surprises from Dec. 10 if I won,” he said, referring to a popular chocolate candy that contains a gift. ” We have to move away from the idea that fear is what governs us.”

Analysts say Mr. Macri has cannily tapped into voter fatigue with the country’s grinding economic and currency crises and struck a chord with those put off by what they view as Ms. Fernandez’s governing style and lack of respect for the country’s institutions, said Facundo Cruz, a political scientist at the University of Buenos Aires.

“The citizenry asks that it is time to change the form of doing politics,” Mr. Cruz said, noting that the still-unexplained January death of federal prosecutor Alberto Nisman and the president’s meddling in the judiciary left many Argentines uncomfortable.

Leaders from Mr. Marci’s PRO party, founded just 10 years ago, will soon govern both the Argentine capital and the surrounding Buenos Aires province — home to about half of the country’s population. So if the 56-year-old capitalizes on his lead and captures the presidency Sunday, it would mark a historic political shift for the country, Mr. Morales Sola said.

“It would demonstrate that one can win without Peronism,” he said.

Although he views Mr. Macri as the front-runner, Mr. Cruz cautioned that voters could deliver a Truman-versus-Dewey moment despite the polls.

“[Mr. Scioli’s allies] still have a very strong territorial base,” he said. “Argentine politics is always good for a surprise.”

By Benedict Mander in Buenos Aires
November 18, 2015

A police raid on Argentina’s central bank, which has been accused of jeopardising dwindling foreign exchange reserves with controversial derivatives trading, was not politically motivated, according to the prosecutor who ordered the move.

As Argentina heads towards a run-off presidential vote on Sunday, officials accused the opposition of orchestrating the raid in order to trigger a devaluation before the elections to avoid having to implement such a politically unpopular move itself if it wins.

With polls showing the opposition centre-right candidate Mauricio Macri leading by some eight points, the government-backed candidate Daniel Scioli has intensified accusations in recent days that the market-friendly mayor of Buenos Aires intends to devalue Argentina’s overvalued official exchange rate if he wins the elections.

The raid on the central bank’s trading desk on Tuesday followed a complaint filed by opposition lawmakers earlier this month that the price at which the central bank sold dollar futures, for fewer pesos than they fetch on the international futures market, constituted a serious financial loss for the state.

Analysts estimate that the central bank has open positions on futures contracts worth around $16.6bn, mostly expiring between January and April. The majority have been sold for around 10-11 pesos to the dollar, compared to the official exchange rate of 9.6 pesos, while dollars are currently worth around 15 pesos on unofficial markets. Many analysts speculate that a sharp devaluation by Mr Macri could quickly bring the dollar value close to the unofficial rate.

President Cristina Fernández waded in on Tuesday night suggesting that the search, carried out during the central bank’s operating hours, may have been aimed at triggering a run on the currency since the bank’s officials were not able to carry out their duties in the currency market.

It would be the last thing left to fall into the hands of the judiciary: the dollar and monetary policy
– Cristina Fernández

“Could it be that the devaluation Macri won’t talk about, he wants to carry out via the judiciary,” Ms Fernández wrote on her website. “It would be the last thing left to fall into the hands of the judiciary: the dollar and monetary policy.”

Claudio Bonadio, the prosecutor investigating the monetary authority, retorted that it would be “absurd” and “illogical” not to carry out the raid just because of the proximity of the elections, warning that he risked losing evidence if he waited.

“I realise that we are four days away from the elections, but what am I supposed to do, drop everything and come back on December 11?” Mr Bonadio asked during an interview on local radio on Wednesday, referring to the date of the inauguration of the new president.

Mr Bonadio ordered the raid after hearing technical evidence from former central bank presidents now linked to the opposition, Alfonso Prat Gay and Martín Redrado.

Alejandro Vanoli, the central bank president, said the move was designed to “generate anxiety” and backpedalled on a pledge to step down if Mr Macri wins the elections, saying he would seek to see out his term that ends in 2019, regardless of the winner.

“It’s my duty to make sure the position is respected and I will do it,” Mr Vanoli told reporters on Wednesday morning. “You don’t appoint someone because they want a central bank that’s at the service of a devaluation.”

Mr Macri has said he would seek to remove Mr Vanoli if he is president, claiming the former securities regulator is unqualified for the central bank job and a government activist.

By Marc Jones
Nov. 18, 2015

Nov 18 Argentina may see its credit rating slowly rise if the current election favourite, Mauricio Macri, wins and pushes through proposed reforms, Moody’s top Latin America analyst said on Wednesday.

Macri leads the polls in the final days before Argentina’s presidential run-off vote on Sunday, and his pro-business credentials are kindling hopes that he can pull the country back from the brink of default.

Moody’s currently rates Argentina Caa1, which signifies a substantial risk of default. But its bonds have been rallying since Macri’s surprisingly strong performance in the first round of elections.

“If Macri starts pushing for the right policies and is able to deliver them you could argue that that will improve the fundamentals,” senior Moody’s analyst Mauro Leos said at an investor day.

“Maybe that would be sufficient to remove Argentina from the Caa group. But if we move, we are going to be really cautious,” he added, saying that worries about low foreign exchange reserves were unlikely to disappear any time soon.

“It is very rare we do consecutive upgrades one year after the other. But let’s assume that could be the case, how long would it take so to get to the top of the B category. That would be uno, dos, tres, three years.”

For Moody’s to consider even more aggressive “multi-notch upgrades,” Leos said, everything would have to go almost perfectly for Macri’s reform plans, something that Argentina’s recent record makes almost unimaginable.

By Walter Bianchi
Nov. 18, 2015

Nov 18 -Argentina will likely end the year with a fiscal deficit of 3.5 percent of gross domestic product, Economy Minister Axel Kicillof said on Wednesday, rejecting estimates by the opposition for a deficit around twice as high.

“The opposition justifies the alleged need for austerity with lies because the truth is that the deficit is not as they say 7.2 percent, nor 6 percent,” he told Argentine radio broadcaster Nacional Rock.

“We will have to see how the year ends but it will be 3.5 percent of GDP.”

Private analysts often question the credibility of Argentina’s official statistics. Many say heavy government spending by outgoing President Cristina Fernandez is driving an expansion in the deficit that has been masked by government figures.

Goldman Sachs, for example, has said the deficit will reach 7.1 percent this year and says fiscal consolidation should “be given urgent consideration” as it is partly to blame for soaring inflation and exchange rate pressures

By Charlie Devereux
November 18, 2015

* Macri has 7.7 percentage-point lead over Scioli ahead of vote
* Among 11 percent undecided voters, Macri has better image

The only pollster to accurately predict the outcome of the first round of Argentina’s elections is now auguring a comfortable victory for the opposition’s Mauricio Macri in Sunday’s runoff vote.

Macri, who is vowing to dismantle President Cristina Fernandez de Kirchner’s economic model of currency controls and trade protectionism, has 47 percent of intended votes against 39.3 percent for the ruling party’s Daniel Scioli, who advocates making slower and fewer changes. After projecting the 11 percent of voters who remain undecided, Macri’s lead rises to 8.8 percent, with Elypsis expecting him to capture 54.4 percent versus 45.6 percent for Scioli.

Elypsis, an economic research firm that only began political polling this year, correctly detected a late surge in votes for Macri ahead of the Oct. 25 first round. He garnered 34 percent against 37 percent for Scioli, confounding other polls that expected Scioli to win by at least 10 percentage points.

While the election could still be swayed by 11 percent of voters who remain undecided, Elypsis says Macri has a better image among those voters than of Scioli. The current mayor of Buenos Aires has a 42 percent positive image and a 20 percent negative image compared to Scioli whose positive and negative images are the same at 33 percent.

All but a few surveys by minor pollsters expect a victory for Macri. The average of four polls seen by Bloomberg, that includes Elypsis’ latest survey, sees an average of 47.9 percent of intended votes for Macri against 41.3 percent for Scioli.

By Katia Porzecanski
November 19, 2015

* Macri vows to unwind policies banks say hindered lending
* Spain’s Santander, BBVA seen in best position to benefit

After years of enduring double-digit inflation and government interventionism, foreign banks in Argentina are hoping for a payoff with Sunday’s presidential election.

The frontrunner, opposition candidate Mauricio Macri, has vowed to unwind policies that he says fueled stagflation and kept Argentina isolated from international capital markets for more than a decade. In addition to regulating peso trading, President Cristina Fernandez de Kirchner imposed measures such as rate caps and fee limits that impeded their ability to lend at a profit.

Local units of Spain’s Banco Santander SA and Banco Bilbao Vizcaya Argentaria SA lead foreign banks in deposits, loans and assets, putting them in the best position to capitalize if reforms revive credit growth that’s flagged amid one of the fastest inflation rates in the world. While austerity measures such as higher interest rates may initially weigh on the economy, analysts surveyed by Bloomberg say growth will revive by 2017, at about 2.5 percent.
Banks Poised for Post-Election Payoff
Banks Poised for Post-Election Payoff

“One hope is that if the opposition wins, all these distortions will disappear and banks can begin functioning normally,” Juan Manuel Vazquez, a bank analyst at Buenos Aires-based brokerage Puente Hnos SA, said by phone. “In that scenario, there’s great potential for foreign banks like Santander and BBVA to grow and eventually utilize all the excess capital they have — which is a lot.”

Ulla Karppinen, a BBVA spokeswoman, declined to comment. Santander officials didn’t reply to e-mails seeking comment.

Macri had 46.5 percent support in a Nov. 9-12 Management & Fit poll of 2,400 people, compared with 39.9 percent for ruling-party candidate Daniel Scioli. The survey, which had a margin of error of 2 percentage points, shows 11.1 percent of people are still undecided, with 2.1 percent planning to cast a blank vote.

Citigroup, HSBC

Citigroup Inc., based in New York, has been in Argentina more than 100 years, while London’s HSBC Holdings Plc, Brazil’s Banco Itau BBA SA and the Industrial & Commercial Bank of China Ltd. also have operations in the country. Banco do Brasil SA is the majority shareholder of Buenos Aires-based Banco Patagonia SA.

Awash with pesos, banks have mainly used their excess cash to buy high-yielding central bank notes instead of making more loans — which has kept their credit quality in good condition, Vazquez said.

Estimated inflation of 26 percent has made banks reluctant to approve long-term loans at fixed rates, he said. At the same time, consumers are balking at floating-rate debt, because costs might soar, as overall demand slows with the economy. The nation’s mortgage market, which accounts for less than 10 percent of total lending, could boom once inflation is contained, Vazquez said.

Fee Caps

Banks suffered from measures that sapped profits from lending businesses, imposed by Fernandez to spur consumption and limit the outflow of dollars. They include interest-rate caps on consumer loans, forced lending to small companies at negative real interest rates, a minimum rate banks have to pay on deposits, and limits on fees, commissions, dividend payments and foreign-currency holdings.

“All of our banks have positive hopes for the next phase of our country,” Claudio Cesario, president of the Argentine Banking Association, said in an e-mail. “There’s consensus that the next government will make the necessary and appropriate measures to rid the obstacles that provoke our isolation from the rest of the world and prevent sustained economic growth.”

Skeptics abound. The nation that’s defaulted twice in the past 14 years will need to show concrete progress before analysts such as Banco BPI SA’s Carlos Joaquim Peixoto believe Argentina can be a genuine source of revenue growth for foreign banks.

“After such a long period of turbulence, particularly with inflation, you need to actually start seeing changes to start believing in them,” Peixoto said in an interview from Porto, Portugal. “If indeed a positive scenario materializes, you have the scope for Argentina to regain some momentum, and of course Santander and BBVA as relevant players in the market will be well-placed to benefit from that.”

By Charlie Devereux
November 18, 2015

* Vanoli says he won’t step aside if Macri is elected president
* Macri has pledged to remove currency controls in first week

Opposition candidate Mauricio Macri’s pledge to end Argentine currency controls should he win Sunday’s election just got harder after the central bank president vowed to stay on, criticizing any attempt to devalue the peso.

Alejandro Vanoli, whose term doesn’t end until 2019, backpedaled on comments from Tuesday in which he said lifting restrictions on currency purchases implied a devaluation of 50 percent and that he would step down rather than having to implement it.

“It’s my duty to make sure the position is respected and I will do it,” Vanoli told reporters in Buenos Aires on Wednesday during a morning briefing with Cabinet Chief Anibal Fernandez. “You don’t appoint someone because they want a central bank that’s at the service of a devaluation.”

With less than a week to go before the first runoff in Argentina’s history, the campaign is focused on front runner Macri’s plan to lift currency controls that have been in place since 2011, enabling companies to repatriate dividend payments and step up imports. Ruling party candidate Daniel Scioli says that will lead to a devaluation and a spike in inflation, triggering an economic downturn.

While the official exchange rate is 9.6 pesos per dollar, many Argentine companies and individuals pay as much as 15 pesos per dollar on a number of parallel markets. Macri argues that the peso will find an equilibrium that represents the average of what most Argentinians already pay to gain access to foreign currency. That equilibrium will be less than the current price of the peso on the black market, which today traded at 15.3 pesos per dollar.

Fernandez’s Appointees

Macri has said he would seek to remove Vanoli if he is president, saying the former securities regulator is unqualified for the central bank job and an activist for President Cristina Fernandez de Kirchner’s political alliance. In the past year, Fernandez has appointed nine out of 10 directors on the central bank board, including Vanoli.

Fernandez in 2010 removed central bank President Martin Redrado after he refused to comply with her orders to use international reserves to pay debt obligations. The process took a few months. Vanoli and his board members could present a similar obstacle to Macri, said Fausto Spotorno, chief economist at Orlando Ferreres y Asociados in Buenos Aires.

“If Macri wins the first thing he’ll have to do is to modify the central bank,” Spotorno said. “If the bank wants to put up a fight with the government, it can do so but it won’t win.”

Macri’s allies lodged a complaint against the central bank on Oct. 30 for “defrauding the public administration” by selling dollar futures at an artificially low rate. Police inspected the central bank offices Tuesday as part of the investigation.

While the bank doesn’t publish data on the futures contracts, they may total as much as $10 billion, according to consulting firm Elypsis. The onshore future prices suggest the peso will trade at 10.3 per dollar in the next three months, compared with 14.9 pesos per dollar in the offshore market.

The estimates have led to growing concern that the central bank’s daily contract sales on the local futures market are creating a growing liability for the government before the country’s next administration takes office next month.

November 18, 2015

BUENOS AIRES— A little known city administrator has emerged as a major player in Argentine politics after her surprise victory to lead the country’s biggest province and her role in the campaign of Mauricio Macri, the front-runner in Sunday’s presidential vote.

If Macri, the business-friendly mayor of Buenos Aires, beats the ruling party candidate, he will owe part of the victory to Maria Eugenia Vidal, who rose from obscurity over the last year to clinch one of the country’s top jobs.

She unseated the Peronist party from its traditional perch atop the Buenos Aires provincial government in the October 25 general election. Macri defied the polls that same day by easily forcing a presidential runoff against ruling party candidate Daniel Scioli.

Vidal was nominated for Buenos Aires governor with the support of Macri back when she was a city official. By winning the governorship of Peronist stronghold Buenos Aires, Vidal raised expectations that Macri may be able to do the same at a national level.

“Macri is going to do good things, just as we saw in the provincial election with Vidal. That was a sign of hope,” said Ana Montes, a nurse in the Buenos Aires suburb of La Matanza.

Scioli has been endorsed by President Cristina Fernandez, who is revered by the poor for widening the social safety net but reviled by investors for heaping controls on the economy.

Macri blames the ruling party for Argentina’s slow economy and promises to restore investor confidence and break with Fernandez’s free-spending populism.

“With her middle-class roots Vidal acts as counterweight to Macri, whom Scioli’s Front for Victory party often portrays as a neo-liberal born into money and privilege,” said Jimena Blanco, an analyst with the Verisk Maplecroft consultancy in Britain.

Vidal, 42, even figures in one of Macri’s TV ads. “How can you not be optimistic?” she says, her voice accompanying images of her and Macri talking with voters.

Scioli says he will keep Fernandez’s popular welfare programs while gradually pursuing investor-friendly reforms.

Macri promises a quicker shift toward free markets. He has a lead in the opinion polls, but Scioli is still in the race.

“The greatest contribution that Vidal made to Macri is making people realize that change is possible,” said political analyst Alejandro Catterberg. “If Peronism was defeated in Buenos Aires province, it is easy to imagine it can be defeated on the national level.”

Vidal will start her four-year term as governor December 10, the same day that either Macri or Scioli will be sworn in as president.

November 18, 2015

BUENOS AIRES, Argentina – From the tables of Buenos Aires pizza parlors to the fields of this South American nation’s farmlands, Argentines are intensely debating a question they must answer during Sunday’s presidential runoff election: How large a role should the government play in their lives?

At the center of the debate is the contentious legacy of outgoing President Cristina Fernandez and “Kirchnerismo,” the political movement aligned with the poor that she created with her late husband and predecessor, Nestor Kirchner.

During 12 years in power, the power couple rewrote Argentina’s social contract, gaining both impassioned followers and fierce critics. They designed programs for the poor, nationalized the YPF oil company, raised tariffs on imports to protect and develop local economies and passed laws to aid the elderly, handicapped people, homosexuals and other groups on the margins, such as becoming in 2010 the first Latin American nation to legalize gay marriage.

Fernandez’s chosen successor, Daniel Scioli, presents himself as the continuation of such policies — he calls them “the national project” — while promising to make fixes where necessary.

Opposition candidate Mauricio Macri promises to maintain a safety net for the poor but says he will overhaul the economy to address inflation estimated around 30 percent and a byzantine monetary system that has spawned a booming black market.

“The big question is the degree to which voters feel comfortable with continuity with a twist versus complete change,” said Jason Marczak, deputy director of the Atlantic Council’s Adrienne Arsht Latin America Center.

That’s a weighty proposition in a nation where most people are old enough to remember the 2001-2002 financial melt-down, when Argentina defaulted on $100 billion in debt and millions of people were plunged into poverty.

If last month’s first electoral round is an indication, Argentines are mulling their options. Scioli, the governor of the Buenos Aires province, got 37 percent of the vote compared to 34 percent for Macri, the mayor of Buenos Aires. The tight finish meant a runoff, and both men have been scrambling to appeal to the nearly 30 percent of voters who picked one of the other four candidates in the first round.

Macri has emerged as the front-runner, with several polls giving him an 8-point lead. But those same polling companies predicted Scioli would win the first round by more than 10 percentage points, which indicates the race is up for grabs.

During a debate last weekend, Scioli argued that Macri’s policies would eliminate subsidies, cut programs for the poor and provoke a sharp devaluation of the Argentine peso.

“Who will pay the price of lifting subsidies?” asked Scioli, a former speed boat racer who lost his right arm in an accident. “Families need to know how they will pay their light, gas and transportation bills.”

Macri accused Scioli of distorting his proposals. But he also argued an overhaul is needed to jump start the economy after four years of stagnation.

“Argentina can only grow with a government that will tell the truth,” said Macri, who comes from one of the country’s richest families and gained a national profile as president of a popular soccer club Boca Juniors.

Beyond the sluggish economy, voters are thinking about allegations of corruption involving people in Fernandez’s administration and the president herself, a rise in crime and drug trafficking and accusations of government’s mismanagement of the social programs it frequently touts.

“The government has created a factory that produces lazy bums,” said Guillermo Boianelli, who owns a recycling center on Buenos Aires’ outskirts and plans to vote for Macri.

Gladys Malverde, a mother of five who plans to vote for Scioli, sees it differently. She earns $275 a month cleaning buildings in a government jobs program that she says has helped her return to school to study nursing.

“If Cristina could run again, we would all vote for her,” said Malverde, who like many Argentines refers to the president by her first name.

Constitutionally barred from running for a third consecutive term, Fernandez still has been a force in the campaign — an object of both adoration and scorn in a deeply polarized country of 41 million people.

Scioli has embraced Fernandez’s policies while presenting himself as his own man capable of fixing huge problems, including a long-standing fight with bond holders in New York federal court that has kept Argentina on the margins of international credit markets.

Macri has criticized Scioli for aligning with Fernandez. But he also praises many government moves, such as nationalizing Aerolineas Argentinas.

He even inaugurated a statue of Juan Peron, a three-time president and founder of a working class movement that helped inspire Kirchnerismo. The ceremony raised eyebrows because Macri’s overarching ideology is free-market, but it underscored the resonance of the government’s hand in society, a force not easily discarded.

“We know that people want change and that Kirchnerismo will come to an end” when Fernandez leaves office, said Roberto Bacman, director of the Center for Public Opinion Studies, a South American research firm. “But therein lies the real question: What will change mean?”

By Elijah Stevens
November 18, 2015

According to one report, traffickers are increasingly using amphibious aircraft to smuggle drugs into Argentina, a development which may possibly be in response to the country’s efforts to combat aerial drug trafficking.

Claudio Izaguirre, head of non-governmental organization the Argentine Anti-Drugs Association, told Diario Popular that drug traffickers have started using amphibious aircraft — planes with the ability to land on and take off from water — to smuggle drugs into the country via its rivers.

Izaguirre stated that this new approach is allowing traffickers to evade radar detection and police forces. According to Izaguirre’s estimates, traffickers are now bringing drugs into Argentina on approximately three “narco-aquatic” flights per day.

Many flights are taking off from the Paraguayan city of Pilar and landing on the rivers of Parana and Uruguay in Argentina, he added. This shift away from landing on clandestine airstrips may be in response to police and Gendarmerie activity along the northern border, he said.

Criminal organizations have been known to transport drugs from Bolivia and Paraguay into Argentina by plane, landing on clandestine airstrips in several northern provinces.

InSight Crime Analysis

Given that Argentina had previously taken steps such as destroying airstrips and installing radar in order to combat aerial drug trafficking, it is possible that Izaguirre’s assessment is correct. Criminal organizations are more than capable of shifting their tactics in response to pushback from law enforcement, and in Argentina, aerial traffickers may have found multiple advantages to landing on rivers rather than airstrips.

Other security officials in Argentina have not yet backed up Izaguirre’s assertions. Nevertheless, criminal groups have been known to use the Southern Cone’s network of rivers for transporting drug shipments. The governor of one of Argentina’s most violent provinces, Santa Fe, has said that one of the country’s biggest problems is drug smuggling via the Parana river. In Uruguay, authorities have also seized drugs from smugglers on the Uruguay river.

November 18, 2015

DENVER (CBS4) – The president of Argentina is blocking a court order to send a Denver murder suspect back to Colorado.

Kurt Sonnenfeld is accused of killing his wife at their Denver home back in 2002. He claims he’s being framed because of video he took at Ground Zero after Sept. 11.

Sonnenfeld fled to Argentina. Then-governor Bill Owens agreed to waive the death penalty if Sonnenfeld returned for trial.

“Kurt Sonnenfeld is definitely gaming the system, though someday, hopefully, that game may run out,” Owens said.

CBS’s “48 Hours” has been following the case since 2004. They recently flew to Buenos Aires to meet with Sonnenfeld and his new wife.













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

By Juan Forero and Santiago Perez
Nov. 19, 2015

Working-class districts that ring Buenos Aires, which powered Peronism for decades, are slipping from the movement’s grasp

SAN MIGUEL, Argentina—As a “point man” for the ruling Peronist movement, Javier Llanos works teeming slums of dirt streets and plywood homes, exhorting prospective voters in this industrial suburb of the capital to cast ballots for Daniel Scioli in Sunday’s presidential election.

But the working-class districts that ring Buenos Aires—packed with millions of voters who powered Peronism for decades—are slipping from the movement’s grasp.

Several polls show that opposition candidate Mauricio Macri, the business-friendly mayor of Buenos Aires, has a lead of five to eight points over Mr. Scioli, a signal that after 12 years, a movement that thrives on a mix of welfare programs and nationalism may be defeated.

“We’ll lose it all if Macri wins,” lamented Mr. Llanos, echoing the Peronist message that a vote for change will mean disaster for Argentina. “There will be a lot of suffering for the poor.”

But many Argentines—even those in poor districts who benefited from years of generous programs—disagree. They speak of decaying or nonexistent infrastructure and rising crime and drug trafficking under Mr. Scioli, who has been governor of the Buenos Aires province for the past eight years.

“I’m 52, and I have always known Peronism,” said voter Susana Arraskaita. “I want to see something different.”

Mr. Scioli, a 58-year-old former powerboat racing champion, fell short of the threshold needed to win in a first round of voting on Oct. 25 and barely squeaked by Mr. Macri, 56. Other outcomes of that election also went against President Cristina Kirchner and the Victory Front, the Peronist coalition she leads.

In large and populous Buenos Aires province, Mrs. Kirchner’s choice for governor, her mercurial cabinet chief Aníbal Fernández, lost in the October vote to Mr. Macri’s young and charismatic candidate, María Eugenia Vidal—the first time in 28 years a non-Peronist won that post.

The Victory Front’s mayoral candidates also took a beating in the 33 densely populated districts that ring Argentina’s capital and contain about 27% of the country’s 32 million voters, with Mr. Macri’s allies scoring victories in Peronist strongholds like the bedroom city of Lanús, population 500,000.

“With the results, the myths collapsed,” said Damián Sala, an activist who works for Lanús Mayor-elect Nestor Grindetti. “We learned that even in Lanús, a movement that’s not Peronism could win.”

Peronists are now feverishly trying to get the votes they need—a campaign to be won or lost in these 33 key districts. Of particular interest to both sides are three million votes that a dissident Peronist, Sergio Massa, received in the first round.

“The mother of all battles takes place in these working-class suburbs,” said Carlos Coronel, a teacher whose second job as a local Peronist representative entails organizing activists to convince San Miguel’s voters to cast ballots for Mr. Scioli.

In Mrs. Kirchner’s two terms—and in her husband Néstor’s previous 2003-07 term—Peronism has meant largess here in the capital’s industrial belt.

In the most costly expansion of social welfare since the rule of Peronism’s founder, Gen. Juan Domingo Perón, more than six decades ago, it has delivered everything from pensions for retired manual laborers to stipends for young mothers. For those fanatical about soccer, there is “Football For All,” which broadcasts games free that had once been available only on pay-per-view. Those who are hard to employ can work in government-supported neighborhood cooperatives, producing T-shirts or toys.

Peronist organizers now remind people here that deprivation and economic calamities of the past—like the 2001 debt default, which led to riots and poverty—took place under non-Peronist leaders.

“I remember 2001, I lost everything,” said Pedro Multari, a 54-year-old San Miguel resident. “We had to start selling things so we could have enough to eat.”

Peronism built up a fierce loyalty decades ago, winning territorial control by forging close ties to organized labor, said Rodrigo Zarazaga, a Jesuit priest who has spent two decades as chaplain in these downtrodden communities. Under the Kirchners, allegiance has been secured with public assistance.

But it has come at a cost. Ballooning government spending has fueled inflation, the second-highest in Latin America, which hits the poor hard. Rev. Zarazaga said the state has also ignored infrastructure: Nearly half of all households are without sewerage or potable water in the cities ringing Buenos Aires. Many roads are unpaved, large urban areas are prone to flooding,schools are decaying and decrepit commuter trains are overcrowded.

“The urgency was to resolve problems with massive cash transfers, but the lack of infrastructure is a problem,” said Rev. Zarazaga, a Harvard-trained social scientist who directs the Research and Social Action Center, a Buenos Aires think tank. “If Mr. Scioli doesn’t recover lost ground in these suburbs, he doesn’t have a chance.”

Mr. Macri’s efforts to win support in working-class wards haven’t been easy. The message activists of his Let’s Change coalition have hammered home in small-scale meetings with voters is that for Argentina to have a stable economy, it must resolve such issues as falling reserves and the lack of access to credit, said Lanús Mayor-elect Grindetti, who is currently Mr. Macri’s finance chief in the capital.

“That’s not the first problem people think about,” Mr. Grindetti said.

A few miles to the northwest, Mr. Coronel, the Peronist organizer in San Miguel, acknowledges how hard it has been to rev up the base. “There’s a sense of fatigue with regards to Mrs. Kirchner, so the runoff looks complicated,” he said while driving in San Miguel’s neighborhoods.

Mr. Coronel and other Peronist organizers have been actively trying to help residents with everyday problems, from assisting senior citizens with paperwork for pension benefits to sprucing up sport facilities. The idea, they say, is to make clear that their help is tied to Mr. Scioli.

“What some call populism is pejorative for us,” Mr. Coronel added. “We see this as social justice.”

Even with the headwinds for Peronism, many remain loyal.

In a San Miguel avenue where Peronist activists pass out pro-Scioli pamphlets, 63-year-old María Cristina Miranda recounted how she received retirement benefits under Mrs. Kirchner´s administration, though neither she nor her employer had ever contributed to a pension plan. And she doesn’t want to lose it.

“I pray to God and the Virgin that Scioli will win,” she said.

By Benedict Mander in Buenos Aires
November 19, 2015

Just a month ago, Daniel Scioli looked to be a shoo-in as the next president of Latin America’s third-largest economy. As the chosen successor of Argentina’s fiery leader, Cristina Fernández, he promised Argentines continuity — albeit a more moderate version of her populist, free-spending and nationalist policies.

This Sunday’s presidential election was his to lose. Especially, it seemed, as he could paint his centre-right opponent, Mauricio Macri, as a bloodless “neoliberal” who would wreak untold economic pain on his countrymen.

“His ideas, decisions and proposals are a danger for the whole of our society,” Mr Scioli inveighed during Argentina’s first-ever presidential debate last Sunday. Mr Macri’s promises of change are a “great lie”, he added.

Yet now, on the eve of the vote and with Argentina’s economy in the doldrums, it is Mr Macri, the “turnround candidate” and pro-business mayor of Buenos Aires, who is leading the polls — and with a convincing nine point lead, according to Elypsis, a reputed local pollster.

The shift is a striking illustration of how many countries in the region, such as Brazil and Venezuela, are also adjusting to the end of a decade-long economic boom and how voters are rejecting the governments and charismatic leaders that presided over them.

Mr Scioli’s fear campaign was a “mistake”, said Juan Germano, director of Isonomia, another local pollster.

“Scioli failed to understand what Argentines want”, he said, especially after 12 “very intense” years of being ruled by the imperious Ms Fernández and Néstor Kirchner, her late husband. “The desire for a change among Argentines is pretty clear.”

That became obvious on October 25, when Mr Macri won 34 per cent of the vote in the first round. It was not enough to beat Mr Scioli, who won 37 per cent, but it put him within spitting distance.

Crucially, Mr Macri also had voter momentum behind him.

In addition, the government suffered an unprecedented defeat in Buenos Aires province, Argentina’s largest. Traditionally a stronghold of the ruling Peronist party, Mr Scioli had ruled it for the past eight years. The seat instead went to the fresh-faced María Eugenia Vidal, formerly Mr Macri’s deputy mayor.

It is not just the public that is clamouring for change in a country whose stagnating and investment-starved economy is struggling with a widening fiscal deficit, double-digit inflation, an overvalued currency and an acute shortage of dollars. Businesses want change, too.

Early signs that foreign investment is flowing back into an Argentina on the verge of change include a $16bn nuclear deal with China signed last week, while US businesses have been eagerly sending teams to Buenos Aires to scope out opportunities.

Financial investors are also hugely expectant. Argentine equities and bonds have rallied for the past month as investors have bet that Mr Macri, a former president of Boca Juniors, one of Argentina’s most popular football clubs, will introduce much-needed economic reforms and strengthen the country’s degraded institutions.

“I have never seen such demand for an Argentine economist,” said Andrés Borenstein, BTG Pactual’s chief economist in Argentina.

“If Macri wins, there is going to be a rally. There is a part of the Macri dividend that is not yet priced in,” he said, estimating that investors are assuming a 60 to 80 per cent probability that Mr Macri will win.

There will be a difficult start for whoever triumphs. The dire economic legacy left by Ms Fernández requires urgent attention. The most immediate problems are an acute shortage of foreign exchange reserves and an overvalued currency.

Mr Macri told the Financial Times in a recent interview that he would lift strict capital controls implemented four years ago on “day one” of his presidency, which will lead to a significant devaluation from Argentina’s official exchange rate and could stoke inflation already running at about 20 per cent.

There are also high hopes that the next government will swiftly settle a marathon legal dispute with a group of “holdout” hedge funds that has blocked Argentina’s access to international capital markets since it defaulted on $100bn of debt in 2001.

Despite the challenges, José Manuel Ortega, a Spaniard who owns a winery in the province of Mendoza, describes a “feeling of hope” among Argentines, who are “tired of more of the same” and realise the economy “cannot continue as it is”.

“From all parts of society to foreign and local investors, people are looking for change. Argentines do not want more conflict. They don’t want an absolutist monarch in power any more,” he says.

By Charlie Devereux
November 19, 2015

* Opposition’s Macri has solid lead over ruling party’s Scioli
* Economic changes expected even if race goes in unpredicted way

Four weeks ago, it was widely expected that the next president of Argentina would be the candidate of the ruling party. But in a first-round election that stunned the nation, opposition leader Mauricio Macri stole the momentum, and as voters return to the polls on Sunday the presidency looks like his to lose.

Macri is the more market-friendly candidate and global companies are lining up to invest, persuaded that the country will reopen for business since he is leading the ruling Peronist party’s Daniel Scioli by 6 to 8 percentage points. Up to a tenth of voters remain undecided, however, and polls were off a month ago, so there is room for surprise.

A central plank of Macri’s policies is the immediate lifting of currency controls to boost investor confidence amid the lowest reserves in nine years. Scioli says Macri’s plan would lead to a massive devaluation that would destroy purchasing power and fuel inflation already running at 24 percent.

In reality, the state of the economy will dictate austerity measures from either candidate, said Diego Ferro, co-chief investment officer at Greylock Capital Management.

“Argentina unfortunately doesn’t implement changes when it should, only when it has to and there is no doubt that next year they will have to implement changes regardless of who wins,” Ferro said by phone from New York.

Elephant In The Room

Neither candidate has addressed the elephant in the room: the reforms needed to reduce inflation, fix a fiscal deficit of 7.2 percent of gross domestic product – the largest in over 30 years – and lure back investment dollars which have stayed away due to currency controls, a lack of regulatory predictability and a decade-long dispute with holdouts from the 2001 default.

The men have put forth different images, with Scioli claiming the populist mantle. Campaigning on Thursday, he said the election is between Macri, whom he called “an arrogant guy from Barrio Parque,” an exclusive neighborhood in Buenos Aires, and him, the son of a worker who understands the needs of the people.

Both candidates will nonetheless probably prescribe a similar recipe, albeit with distinct dosages, analysts predict.

Macri says he will seek to end the holdout conflict that caused Argentina to default once again last year. He will eradicate tariffs on grain exports and reduce the 35 percent tax on soybeans, Argentina’s largest source of export revenue, by 5 percent a year. He also pledges to bring inflation to below 10 percent in two years and to restructure the statistics agency after the International Monetary Fund censured Argentina for misreporting economic data.

Scioli, while defending the legacy of President Cristina Fernandez de Kirchner, is promising similar changes in the agricultural sector while saying inflation will take a full four-year term to tame. Seeking to contrast himself to Macri, he says he will continue to protect Argentina’s industrial sector by sticking with the policy of a peso whose exchange rate is administered by the central bank.

Markets React

Markets have already reacted to a likely Macri win, cushioned by the knowledge that a Scioli victory would also be an improvement on the status quo.

The stock market is at a record high, bond yields are at their lowest in eight years and Morgan Stanley is advising soybean producers to sell their stock now in anticipation of a post-electoral glut.

Both candidates will not only change economic policy but the way that the government handles its trade partners, its opponents and its communications, said Juan Gabriel Tokatlian, of the University of Torcuato Di Tella. What will differ is the pace.

Fernandez’s eight years have been characterized by standoffs — with farmers over export taxes, international trade partners over import restrictions and the country’s middle class over access to buying dollars. All of those will likely ease, irrespective of who wins. The fact that 12 years of rule by Fernandez and her deceased husband Nestor are ending is creating a buzz of possibility.

Both candidates will face challenges in finding consensus to implement changes. Macri will govern with a minority in both houses of Congress, although he is bolstered by the surprise capture of Buenos Aires province in last month’s election which has caused fractures in the Peronist alliance. Scioli will have to distance himself from the rhetoric of continuity that has dominated his campaign, said Greylock Capital’s Ferro.

“There is no ambiguity in the case of Macri and that’s one of the reasons why the market was so happy, because we know that from moment zero there will be a coherent plan to get Argentina out of its problems,” Ferro said. With Scioli, “we will get there but it will take longer.”

By Carolina Millan and Emma Orr
November 19, 2015

* Bond selloff is a big risk if Scioli pulls off surprise win
* Opposition candidate Macri leads polls with 46% support

Bond investors may be putting too much stock in Argentina’s presidential polls.

The country’s benchmark bonds have surged to an eight-year high as voter surveys show opposition candidate Mauricio Macri will win Sunday’s runoff vote, potentially setting the stage for sweeping policy changes that may allow the government to regain access to foreign debt markets and revive the economy.

But given how wrong the polls turned out to be in the first round of voting last month, the final result may still be a toss-up, said Bianca Taylor, a sovereign analyst at Loomis Sayles in Boston. The ruling party’s Daniel Scioli had long figured as the clear frontrunner in surveys leading up to the Oct. 25 election only to unexpectedly end up in a near tie with Macri when all the votes were counted. A selloff is likely to ensue if Macri loses to Scioli, who has promised to make only gradual changes to policies investors blame for stagnant growth and soaring inflation.

A Scioli win means “significant downside,” Jim Barrineau, director of Latin American fixed income at Schroder Investment Management, said from New York. “All the momentum is with Macri. But you have to allow for erratic polls in emerging markets.”

Macri had 46.5 percent support in a Nov. 9-12 Management & Fit poll of 2,400 people, compared with 39.9 percent for Scioli. The survey, which had a margin of error of 2 percentage points, shows 11.1 percent of people are still undecided, with 2.1 percent planning to cast a blank vote.

Before the first-round vote, a poll by the same firm showed Scioli was favored by 38.3 percent of voters, compared with 29.2 percent for Macri.

A poll released late Wednesday by Elypsis, an economic research firm that correctly detected a late surge in votes for Macri ahead of the first round, showed that the opposition candidate would capture 47 percent of the vote versus 39.3 percent for Scioli. The election could still be swayed by 11 percent of voters who remain undecided, according to the survey.

Investor caution on election projections comes after high-profile polling misfires around the world in the past year, notably in Greece, Israel and the U.K., have called into question whether technological and social shifts are hampering polls’ reliability.

Argentina’s $4 billion of defaulted bonds due in 2033 have gained 6.9 percent since Oct. 25 to 113.3 cents on the dollar as investors bet a Macri victory means the country will look to settle its decade-long debt dispute and end currency controls. In July 2014, President Cristina Fernandez de Kirchner’s refusal to abide by a U.S. court ruling requiring Argentina repay disgruntled creditors led to the nation’s second default in 13 years.

While a Scioli victory may initially trigger a bond slump, the decline will be limited, said Gerardo Rodriguez, a money manager at BlackRock Inc. The fact that the elections went to a runoff was a “game changer” because it indicated Argentines want different policies.

“Markets have rallied, not only on the prospect of a Macri victory, but also on the fact that the mandate for Scioli if he wins will be one of change,” Rodriguez said.

Still, to AllianceBernstein LP’s Marco Santamaria, a Scioli win won’t be welcomed by bond investors. He pointed to Scioli’s inability to gain ground on Macri in a debate Sunday, which has made investors even more optimistic.

“The market has been getting used to the idea of a Macri win, given the recent polls and the outcome of the debate,” said Santamaria, who manages $27 billion in emerging-market debt. “So I think it would be logical to expect some disappointment in the market if Scioli were to pull off a surprise win.”

By Jack Kaskey
November 20, 2015

* Both presidential candidates vow to scrap crop export taxes
* Seed supplier says policy on farm-leasing also needs reform

Monsanto Co. executives said they’re hopeful that Sunday’s presidential election vote in Argentina will lead to an overhaul of agricultural policies that have been blamed for a slump in production and exports from one of the biggest producers of corn and soybeans.

Mauricio Macri, the opposition candidate and the frontrunner in voter surveys, has pledged for months to end export taxes of 23 percent on corn and 35 percent on soybeans. His rival in the runoff, Daniel Scioli, who’s backed by President Cristina Fernandez de Kirchner, said in October he’ll do the same.

Such a change would almost certainly be welcomed by most if not all the farmers who have protested for years over the taxes, hoarding production rather than pay up. For Monsanto, the world’s largest supplier of seeds, the Latin American country is an important growth market that could help it reach a target for higher earnings over the next four years. Ending the tariffs would incentivize sowing more acres, Chief Executive Officer Hugh Grant said.

“Growers in Argentina at the moment think twice before they plant, because the first piece of that harvest goes to the government,” he said in an interview Wednesday in St. Louis after the conclusion of two days of investor presentations.

Crop Rotation
Argentina has shipped $17.6 billion of grains and oilseeds abroad so far this year, the lowest for the period since 2009, according to data from an exporters group. Export tariffs have erased $10 billion a year in foreign agricultural sales, according to Jorge Brito, chairman of cattle producer Inversora Juramento SA.

Also in need of reform, according to Mike Frank, Monsanto’s global commercial vice president, are government policies limiting farm leases to one year. The current situation inhibits long-term investment in a country where half of agricultural land is rented, he said, as well as discouraging crop rotation, which can help stop pests developing resistance to crop-specific insecticides.

“I get a chance to meet with farmers from all over the world, and I would say the farmers that are the most challenged today are farmers in Argentina,” Frank said.

There are already signs of optimism among the country’s farmers. A Buenos Aires Grain Exchange report in September forecast they would cut as much as 20 percent of the corn planting area this season and soybean planting by 1 percent, but that outlook may be raised because changes to the export taxes are increasingly likely, said Esteban Copati, chief analyst at the exchange.

Royalty Payments
Argentina remains the third-biggest grower of soybeans and the fourth-largest exporter of corn.

Monsanto gets about 6 percent of its revenue from the country and is counting on farmers there and in Brazil to buy its new Intacta soybeans, which are genetically modified to ward off insects and tolerate the application of weedkiller. Intacta sales in Latin America will be one of the three main drivers of profit growth through 2019, Grant told investors this week.

Another potential boost to the company is an agreement reached with grain handlers to collect Intacta royalty payments from farmers on the company’s behalf. Monsanto has had trouble getting paid by farmers for its modified soybeans, which are widely pirated in Argentina.

Monsanto withdrew a $47 billion takeover bid for pesticide maker Syngenta AG in August, and since then Grant has told investors his company doesn’t need an acquisition to achieve its goals for higher earnings. “We feel good” about Monsanto’s strategy, he said Wednesday. In Argentina, he said he’s encouraged by the promises of both candidates but wants to see what changes are enacted after Sunday’s election.

“The proof is in the delivery,” Grant said.

By Pablo Rosendo Gonzalez
November 19, 2015

* American depositary receipts fell as much as 13.5 percent
* Farm company invested in Israel’s IDBD via controlled IRSA

Shares of Cresud SACIF y A, Argentina’s largest publicly-traded owner of farmland, tumbled the most in three months after short-seller Spruce Point Capital Management said the company is overvalued.

The company, whose farmland holdings cover an area larger than Rhode Island, could drop to as low as $4.75 in New York trading. That would represent a 60 percent plunge from current levels.

The American depositary receipts fell 5.4 percent to $12 on Wednesday and trading volume jumped to 846,002, more than 11 times the three month average.

The Buenos Aires-based press office for Cresud and IRSA declined immediate comment on the report.

Cresud and its subsidiary IRSA Inversiones y Representaciones SA are “burdened” with $6.7 billion of debt after “IRSA recently invested approximately $300 million in IDB Development Corp,” the Spruce Point report said. The Israeli holding company’s debt should be consolidated into Cresud which could ultimately mean a breach of both IRSA and Cresud bond contracts, the New York-based fund wrote.

“It appears through IFISA, a related-party and controlled entity of IRSA’s Chairman, that IRSA owns a combined 81 percent of IDBD,” according to the report. IDBD has interests in real estate, communications, agricultural products, insurance and technology. Dolphin Funds, a firm controlled by IRSA, owns 49 percent of IDBD, according to data compiled by Bloomberg.

Spruce Point said that given its belief that IRSA is currently in violation of its debt covenants, the firm is in a “precarious position.”

In August, Spruce Point targeted Caesarstone Sdot Yam Ltd., an Israeli maker of quartz countertops, arguing the company was overvalued and causing shares to fall as much as 17 percent.

By Sarah Marsh
Nov 19, 2015

Nov 19 -Roberto Maceri is investing in machinery at his plastics plants ahead of Argentina’s presidential election, betting on a stronger domestic economy and a more competitive exchange rate that may bring foreign markets back into play.

Operations at Argentine companies like his have been hampered in recent years as the outgoing left-wing government restricted imports, raised the tax burden on businesses and the middle class, and maintained the peso artificially strong.

Argentina’s steady decline in competitiveness with neighboring economies hammered Maceri’s exports to Uruguay, Colombia and even the United States in the past three years.

But with pro-business opposition challenger Mauricio Macri the favorite to win Sunday’s presidential election run-off, Maceri is positioning himself for an economic rebound.

Even if the ruling party’s Daniel Scioli stages a late come-back, Maceri still expects a more favorable business environment because Scioli is closer to the political center than President Cristina Fernandez.

“We have invested in machinery and we are waiting for the next productive cycle with a lot of optimism,” said Maceri, who produces a range of plastic products from packaging and office supplies to fridge interiors and bathtubs.

He sustained output in the last few years by creating new product lines for the domestic market, which has been propped up by government incentives to encourage consumer spending.

Maceri’s new investments total more than $1 million, the first time in nearly a decade that he is spending heavily to expand production capacity.

“We’ll keep a close eye on whether we can export again.”

Many investors are more circumspect, preferring to sit tight ahead of the election. Even state-controlled energy firm YPF this month declined to give details on next year’s budget, saying it will depend on the election winner’s economic policies.
Fernandez introduced a raft of currency and trade controls to protect dwindling foreign reserves and stave off having to settle a legal dispute with creditors over defaulted debt. Hard currency stocks languish at a nine-year low.

Argentina is now ranked 121 out of 189 countries in the World Bank’s Ease of Doing Business index, lying well behind neighboring Chile on 48, Uruguay on 92 and Brazil on 116.

Both Scioli and Macri would seek a debt deal with creditors to regain access to global debt markets but have locked horns on the pace and depth of reforms to lift capital controls, with Macri seeking much swifter changes to open up the economy.

Latino TCA, which supplies utility firms with optic cables and other equipment, has cut its workforce as the central bank tightens access to dollars, making it almost impossible to import goods. With no stock to sell, it is simply focused on keeping its brand alive.

The company’s general manager Andrea Baena says Latino TCA may just break even this year. After that though, she says it is poised to benefit from a backlog of investment in utilities if the next president lifts a freeze on tariffs.
Even so, with inflation in double-digits and a widening fiscal deficit, there are no quick fixes for Latin America’s No. 3 economy.

“It won’t be easy, there is no magical solution,” said Baena. “We are waiting to see what happens.”


Foreign investors are watching closely.

“If ever there was a country in emerging or frontier markets that had the simplest route to a significant increase in economic output per capita, it is Argentina,” said Denise Prime, emerging market investment manager at GAM.
Prime hopes for a Macri win but said even a slight shift toward more orthodox policies under Scioli would bolster investor confidence.

GAM has been a buyer of American Depositary Receipts in Pampa Energia in anticipation that a Macri win would see domestic electricity costs increase.

A key cause for uncertainty is the widespread expectation of a devaluation, regardless who wins on Sunday, to correct the inflated rate of the peso currency. One dollar buys just 9.65 pesos at the official rate but 15.41 on the black market.

Scioli has campaigned against a devaluation, saying it would hurt Argentines’ purchasing power, but economists say it is inevitable as the central bank lacks enough dollars to keep the peso at the current rate.

“There will have to be an adjustment in the exchange rate,” said Federico Semeniuk, a financial expert at Ecolatina consultancy. “We reckon it will weaken between 30 and 50 percent in 2016.”

Semeniuk said a surge in demand for peso futures and local assets linked to hard currencies like dollar-linked bonds was due to businesses, institutional investors and savers seeking protection from a sharp fall in the peso.

Baena says Latino TCA needs immediate access to its cash in case an import authorization comes through but has it stashed in fixed deposits to shield it from inflation that economists estimate is running at around 25 percent.

Both Maceri and Baena are aware things will likely get worse before they get better. The next government will struggle to devalue and correct the fiscal deficit without damaging consumption in the short-term.

“They have made a very fragile mechanism like a bomb, and you have to disarm the bomb,” said Baena. “Next year will be very tough, no matter who wins.”

By Jonathan Gilbert
November 19, 2015

President Cristina Fernández de Kirchner tried to pick her successor. Then things went sideways.

It seemed like a winning game plan. Daniel Scioli, the presidential candidate for Argentina’s ruling party, promised voters a continuation of the outgoing government’s leftist policies, improved with a few tweaks to lure back those who’d drifted away over its 12 years in power.

Many pollsters predicted Scioli to win last month’s first-round poll outright. Even if he didn’t and had to go to a run-off, Scioli was still expected to eventually overcome the leading opposition candidate, Mauricio Macri.

But in a spectacular turn that underscores the unpredictability of election races, it is opposition candidate Mauricio Macri who has emerged as the favorite in Argentina’s presidential run-off election on Nov. 22.

Today, Scioli is widely perceived as the underdog to Macri, the center-right outgoing mayor of Buenos Aires who has tapped into a groundswell of support for a shift away from the ruling party’s economic platform and abrasive governing style.

“The majority of Argentines want change,” says Marcos Peña, Macri’s campaign manager.

As evidence of this, Peña points to the first-round results, in which opposition candidates collected 63% compared to the 37% who voted for Scioli. In the Argentine electoral system, a presidential candidate wins in the first round if he or she receives 45% of the vote, or 40% with a 10-point lead over the second place candidate.

Macri came in second with 34%.

Twelve Years in Power

The ruling party, the Frente para la Victoria (Front for Victory, or FPV), rose to power after Argentina’s economy collapsed in 2001 and 2002. Party leader Néstor Kirchner, a little-known governor from Patagonia, became President in 2003, and he guided Argentina out of the depths of a socioeconomic crisis by expanding government spending and levying high export taxes on soy beans, Argentina’s cash crop.

Kirchner became hugely popular. And his Vice President was Scioli, a former national tourism minister and one-time powerboat racer who’d lost his right arm during a 1989 competition.

On the back of this strong economic growth, Kirchner’s wife, President Cristina Fernández de Kirchner, twice led the party to re-election, while Scioli moved on to spend eight years as the governor of Buenos Aires province, Argentina’s largest.

As President, Fernández continued and amplified her husband’s big-government policies. She also developed a combative style.

Her husband had begun his presidency by declaring in a speech that he would not cede to “pragmatism” by leaving his “convictions at the gates of the presidential palace.” But many voters began to wonder if Fernández—who drafted the speech, according to a biographer—had taken this concept of leadership too far.

In recent years, they say, she has become imperious as she wrestled with Argentina’s business establishment, hectored foreign political and business leaders, and skewered her opponents in public speeches.

“I like the direction of the political project, but I don’t like a lot of things about her,” says José María Jáuregui, 52, who used to run a chain of hairdressing salons. “She doesn’t debate with anybody; it’s a monologue.”

Under Fernández, the economy has also begun to sputter. Refusing to borrow in the global markets to finance government spending and bolster currency reserves, she opted for protectionist economic policies. These included currency controls and import restrictions, which angered foreign investors, middle-class Argentines, and manufacturers.

Growth stagnated and inflation spiked, to an estimated annual rate of more than 25% today.

Fernández, 62, was barred from running for a third consecutive term, so she endorsed Scioli as her successor. With a FPV party base that makes up around 35% of the electorate, Scioli’s campaign calculated that he would only need to make a small pivot away from Fernández to bring back lost voters. That, in theory, could have secured him a first-round victory.

Moving to execute that strategy, Scioli, 58, emphasized his plans to build on the party’s successes but at the same time drew attention to his consensual leadership style and preference for teamwork over centralized power. He promised to foster a better investment climate and bring inflation under control by gradually reducing the budget deficit.

Momentum Shift

Scioli was unable to unglue himself from Fernández, however. His ability to criticize her style and politics was limited by his need for her support. And moves like his seemingly forced choice of a close Fernández advisor as his Vice President led many to wonder if Fernández intended to remain a shadow President after leaving office.

Momentum shifted toward Macri, who promised a clean break from the politics and style of the last 12 years, so Scioli poured his energy into drawing a clear line between himself and his rival. In doing so, he allied himself with Fernández and the Front for Victory’s ideologues. This, analysts say, has been counterproductive.

“A lot of voters wanted change, but not totally; Scioli represented this with a new leadership style,” says Mariel Fornoni, director of the polling company Management and Fit. “But when he left the new style behind, he turned into a continuity candidate and Macri became the change candidate.”

Some polls now give Macri, 56, a comfortable lead over Scioli. To reverse this, Scioli has engaged in a so-called “fear” campaign that mirrors Brazilian President Dilma Rousseff’s successful strategy in a run-off vote last year. Scioli has been aggressively trying to link Macri to unpopular free-market policies that many Argentines blame for the 2001 collapse.

“The word ‘change’ may generate enthusiasm and motivate people,” Scioli said in a Nov. 15 television debate between the two candidates, “But when you remove its veil, this appears: the free market, structural adjustment, devaluation and debt.”

Although Macri has largely tiptoed around the reforms he would make, they could include devaluing the peso; lifting currency controls; and reducing transport and energy subsidies.

“Such structural adjustment is truly scary,” says Alberto Pérez, a top Scioli adviser, referring to the likelihood of swift reforms that would be painful for Argentines in the short term.

Still, to the surprise of many, the broader mood of the nation now favors Macri.

“Satisfaction with the current administration is so strained,” says Federico Finchelstein, an Argentine historian at the New School for Social Research in New York, “that the hope of change is greater than the fear of what could happen.”

By Katy Barnato
November 20, 2015

Argentinians will head to the polls once again on Sunday, in a second-round of voting that will likely see the pro-business opposition trump the incumbent socialists.

It is less than a month since the first vote, on October 25, produced no outright winner. It is also the first time that an election has gone to a runoff in Argentina.

“We are in uncharted territory in Argentina’s political history. This will be the first runoff since the current election system was instituted under the 1994 constitutional reform (the 2003 election would have gone to a runoff between Carlos Menem and Nestor Kirchner, but Menem withdrew) and indeed, the first runoff ever,” Stuart Culverhouse, global head of research at Exotix Partners in London, said in a report last week.

Sunday’s vote will pit the two leading candidates against one another — that’s Daniel Scioli, who is backed by fiery President Cristina Kirchner and pro-business opposition candidate, Mauricio Macri. The Argentinian constitution bars Kirchner from running for a third term.

Macri is seen winning — and Argentina’s benchmark stock index, the Merval, has rocketed on the prospect of an end to 14 years of socialist rule. It has risen around 22 percent since the first vote in October and is around 60 percent higher on the year.

Both Macri and Scioli have pledged to resolve Argentina’s long-standing dispute with so-called holdout creditors, which has dragged on since a massive default in 2002. This could allow the country to re-access the international capital markets and raise much needed funds.

Macri is seen more likely, however, to scale back the swathes of interventionist measures that cripple the Argentinian economy at the moment. These range from capital controls to subsidizing electricity prices far below the market rate.

“A Macri victory would be positive for markets and investors, with the candidate pledging to end currency controls and bring about currency convergence,” Nicholas Watson, senior vice president at Teneo Intelligence, said in a report this week.

Argentina’s credit rating from Moody’s Investors Service is Caa1, suggesting a substantial risk of the country defaulting again on its debts. Earlier this month, however, the agency upgraded Argentina’s rating outlook to “stable” from “negative.”

“The outlook change is based on Moody’s view that shifts in the political climate are reducing the risk of investors suffering greater than expected losses once a new government assumes power on 10 December 2015,” it said.

Mauro Leos, senior credit officer at Moody’s, warned that adjustments to Argentina’s economic policy would cause short-term pain, however.

“Everybody is really excited about Argentina… but what markets are missing is that the economy has been mismanaged for 15 years… They have to adjust the economy and adjustment means pain,” he said at a briefing on Wednesday.

By Bryan Borzykowski, special to CNBC.com
November 19, 2015

The November presidential election has stoked a run in Argentine stocks.

Most Americans are likely focused on the looming U.S. election, but there’s another vote that global investors should be paying close attention to. On Nov. 22, Argentina will choose its new leader, and markets are hoping that Buenos Aires Mayor Mauricio Macri, who many see as an economic reformer, will walk away the victor as the country’s next president.

Until last weekend, most people didn’t think that Marci, the opposition leader, had much of a chance. Daniel Scioli, a member of the governing Peronist party and the hand-picked successor to current president Cristina Fernandez de Kirchner, was expected to take the most votes in an Oct. 25 election, but at the end of the night, the two candidates were separated by less than two percentage points, prompting a November runoff.

For long-suffering investors, this is good news. The Merval Buenos Aires Index has jumped by nearly 4 percent since the market opened on Monday, and if Macri wins, which many people now think is a real possibility, it could continue to climb higher.

But while the results came as a shock to many, just the fact that the current president can no longer lead the country — there are term limits in Argentina — has been a boon to the stock market. The index is up 36 percent year-to-date, making it the second-hottest market in the world, according to S&P Capital IQ.

For the last 15 years, the once mighty Argentina has been an economic wasteland. In 2001 it defaulted on its debt, and ever since, its leaders have refused to pay its creditors — including some U.S hedge funds.

The nonpayment has meant the country can’t borrow money from foreign governments, so it’s essentially had to self-fund its own operations, said Alfredo Coutino, Moody’s Analytics’ economist for Latin America.

That has wreaked havoc on the country’s economy and its stock markets.

“They couldn’t access international capital, and no one wanted to put their money in Argentina,” said Coutino. Those who do have investments in the region have had difficulty getting it out — capital controls have been put in place to stem outflows.

The government also implemented price controls to curb rapidly rising inflation and started nationalizing some energy, transportation and telecom companies. Huge deficits have been incurred, and the stock market barely budged for many years, added Coutino.

It’s likely that no matter who wins, financial reforms will have to take place, said Chuck Knudsen, an emerging markets specialist at T. Rowe Price — its Institutional Frontier Markets Equity fund has a 10.3 percent weighting to the country, the most out of any U.S.-based fund, according to Lipper.

However, if Macri is the new leader, changes will come much faster and be more pronounced than if Scioli wins, which will be better for the market in the immediate short term. Those who can be patient for three to five years, though, should see more meaningful equity gains in the region, regardless of who gets in power, he said.

Buying into Argentina

There are a number of ADRs on U.S. stock exchanges that investors can purchase. T. Rowe’s Institutional Frontier Markets Equity fund holds Grupo Financiero Galicia S.A., a Buenos Aries-based bank that’s listed on the Nasdaq. The banks are a good way to play the economic recovery, Knudsen said.

There are 29 U.S.-based mutual funds that hold Argentina stock, but only three hold between 8 percent and 10 percent in the country, and no fund holds more than 5.8 percent of Argentinian assets.

For a pure-play investment, buy the Global X Argentina ETF (ARGT), which holds 30 stocks. Some holdings are not based in the country, but a large percentage of their revenue is from Argentina.

Buyer beware: The ETF doesn’t reflect the Merval index. About 40 percent of ARGT’s holdings are in energy stocks, 20 percent in financials, 13 percent in information technology and 8 percent in consumer staples. While the country’s main index is up by a lot, the ETF has climbed only by about 0.8 percent this year.

“There are long-term prospects here, even if Scioli is elected,” Knudsen said. “The trend will be more positive, and some of the country’s potential [will] be unleashed.”

So what can investors expect from a new leader? Both Scioli and Macri have pledged to finally put an end to the country’s default debacle. Whether they’ll pay its debtors in full or renegotiate a new deal remains to be seen, but Jan Dehn, research director with Ashmore Group, an emerging markets-focused investment firm, is optimistic that something will happen.

When it does, the country will be able to regain access to international capital markets. It will then be able to borrow funds at far lower interest rates than it’s borrowing at now, and that will have a positive effect on its own financial position. “It can become part of the global family again,” said Dehn.

There’s also hope that they’ll denationalize some of the companies it now controls, relax foreign investment restrictions, better develop its large natural resources industry — it has the fourth-largest shale gas reserves on the planet — and, simply, “do the right thing,” said Dehn.

“There are long-term prospects here, even if Scioli is elected. The trend will be more positive, and some of the country’s potential [will] be unleashed.”
-Chuck Knudsen, emerging markets specialist at T. Rowe Price

If it does reform its economy, then the market will surely rise higher. Some experts estimate that $120 billion of “flight capital” — Argentinian money that’s been invested outside of the country — could return and get put into the domestic market, said Dehn.

“It may be a great fundamental story,” he said.

Devaluation risks

Don’t put your retirement savings in the country, though — the market is going to go through plenty of more ups and downs before it stabilizes. It’s also possible the reforms don’t happen as people expect them to, which would devastate the market.

One of the biggest concerns for Knudsen is a devaluation of its currency, which could happen if it opens up its economy. It’s been artificially supporting the peso up until this point, but it won’t continue to do that under a reformed economy, he said. That could hurt U.S. dollar investors, who will see their investment fall as the peso drops.

It will also have to reduce its deficit, and those debt payments could be significant. The new leader will likely have to reduce spending and, potentially, raise taxes on a struggling consumer, said Coutino.

For those who can see the bigger picture and don’t mind volatility, gains should come. The economy is growing by less than 2 percent this year, but Coutino thinks GDP growth could accelerate to 3 percent next year and 4 percent in about three to five years.

Its large agriculture sector, along with banks and telecoms, will also benefit from reform and could be areas for stock-picking investors to buy into. Energy is a big sector, too, but gains there are also dependent on global commodity prices.

By Richard Tomkins
Nov 19, 2015

A proposed sale of Bell 412EP helicopters to Argentina has been approved by the U.S. State Department.

WASHINGTON, Nov. 18 (UPI) — The proposed sale of four Bell 412EP helicopters to Argentina through the Foreign Military Sales program has received State Department approval.

The deal — together with spare parts, associated equipment and logistical support — would be worth about $80 million.

“The proposed sale will contribute to the foreign policy and national security of the United States … and will provide additional opportunities for bilateral engagements and further strengthen the bilateral relationship between the United States and Argentina,” the U.S. Defense Security Cooperation Agency in its notification to Congress.

DSCA, which manages the FMS program, said Argentina intends to use the aircraft for search-and-rescue operations, humanitarian assistance and disaster relief, peacekeeping support, scientific operations in the Antarctic, and other missions.

Bell’s 412 enhanced performance helicopter is a twin-engine utility aircraft with a cruise speed of 140 mph and a range of 609 miles.

12. ARGENTINA: COUNTRY OUTLOOK (Economist Intelligence Unit – ViewsWire)
18 November 2015


POLITICAL STABILITY: The second-round presidential election on November 22nd has been pitted as a choice between continuity, represented by the candidate of the ruling Frente para la Victoria (FV), Daniel Scioli, and change, represented by the opposition Cambiemos candidate, Mauricio Macri. However, whichever of the two wins in November, The Economist Intelligence Unit continues to expect substantial policy adjustment as the new administration works to reduce the risk of economic crisis and return the economy to sustainable growth. Reflecting the scale of economic mismanagement under the current government, led by Cristina Fernández de Kirchner, which has produced stagflation and strong currency devaluation pressures, the adjustment process will be a difficult one, involving politically unpopular austerity measures, including a scaling-back of fiscal expenditure. The risk of social unrest will therefore remain significant for much of 2016-20.

ELECTION WATCH: Although we had long expected the presidential race to be close, Mr Macri performed above expectations, coming in a very close second to Mr Scioli (the latter secured 37% of the first-round vote and the former 34%), and has strong momentum going into the second round. Opinion polls (which were generally unreliable as an indicator of voting preferences in the first round) now place Mr Macri in the lead. Mr Scioli is struggling to disassociate himself with an increasingly unpopular Fernández government. He is not close to the president, and his alliance with her is something of a marriage of convenience, required to cement his appeal among the 30% of voters that form the FV’s support base. In the second-round campaign, Mr Scioli has attempted to shift his own stance more clearly to the centre ground. At the same time, the government has attempted to paint Mr Macri’s policies as a throwback to the orthodox economic policies that are still widely blamed in Argentina for the 2001 crisis. Mr Macri, the well-known founder and leader of the centre-right opposition Propuesta Republicana (Pro) party, has tried to dismiss this campaign as a scare tactic, but it could well have some effect. To Mr Macri’s advantage, the third-placed candidate, Sergio Massa, has tacitly supported the latter’s campaign, while avoiding outright public endorsement. For both candidates, securing Mr Massa’s votes (he garnered just over 20% in the first round) will be crucial. Some of Mr Massa’s votes will go to Mr Scioli because both men are Peronists (the Peronist party dominates Argentinian politics; the FV is one Peronist faction of which Mr Massa was once a member, but he broke away in 2013 and is now the head of another Peronist faction). However, considering Mr Massa’s own stated desire for change (as represented by Mr Macri) many centrist voters are likely to spring for the opposition candidate.

INTERNATIONAL RELATIONS: We assume that the incoming government will move to repair relations with trade and investment partners that have been damaged by trade protectionism, nationalisation, failure to abide by rulings of the World Bank’s International Centre for Settlement of Investment Disputes (ICSID), and failure to exit default. Relations with the US remain at a low ebb following last year’s sovereign default, which was the consequence of Argentina’s defiance in the face of a New York court ruling. We assume that the incoming administration will work from 2016 to exit default (by arriving at a deal with holdout creditors) and normalise relations with creditor countries, suggesting improved relations with the US, Europe, and with partners in the Mercado Común del Sur (Mercosur, the Southern Cone customs union) in the outlook period. At the same time, China will remain a strategic partner. This position was cemented under the Fernández administration by a series of investment accords, and by a US$11bn, three-year currency-swap arrangement agreed in mid-2014 that has bolstered the foreign reserves and given the government a lifeline as it seeks to avoid a currency crisis.

POLICY TRENDS: We have long considered a substantial tightening of macroeconomic policy necessary to reduce inflation, improve external competitiveness and avoid an eventual balance-of-payments crisis. The Fernández administration is clearly reluctant to make these adjustments, which involve difficult austerity measures. Our forecasts assume that this will occur once a new administration takes office in December 2015. We expect the next administration to work fairly quickly to tackle distortions, and expect some fiscal and currency adjustment in 2016, combined with efforts to rein in nominal wage growth. This will be politically difficult, will encounter union resistance (particularly if Mr Macri is elected), and, in the short term, will subdue activity. However, this will be rewarded with a boost to investor confidence, assuming that the new government also works to exit default (eliminating the foreign-financing constraint) and strengthen confidence in the rule of law, which have been eroded by years of discretionary policy interventionism under Ms Fernández. Combined with macroeconomic adjustment, and a gradual removal of foreign-exchange and import controls, these policies should set the economy on a more solid long-term footing. These forecasts are based on a victory in the second-round run-off for Mr Scioli. If Mr Macri were to win, we would expect similar policy adjustments. However, they would occur much more quickly. Mr Macri has promised a rapid devaluation if elected, followed by a quick easing of foreign-exchange controls. (This is partly because he would have a harder time getting quick approval in the legislature for a deal with holdout creditors than Mr Scioli, and would therefore continue to face an external financing constraint that would require adjustments to improve net goods and services trade.) This would be likely to hit activity hard in the very short term, but would set the stage for a stronger recovery by rapidly addressing the problem of external competitiveness.

ECONOMIC GROWTH: GDP growth will weaken in the short term as macroeconomic policy tightening and rapid currency depreciation dampen demand, but this will set the stage for a pick-up in exports, investment and private consumption in the medium term. For 2015, we estimate growth to have reached 1.8%, reflecting a pick-up in private consumption, related to renewed rapid growth in nominal wages, and in government consumption, reflecting fiscal expansion ahead of the October presidential election. We remain concerned that this figure, which is based on official data, overstates the level of activity: export volumes continued to fall in the first half, industrial production remains subdued, and headwinds from recession in Brazil will have been substantial. Given the difficulties of Argentina’s key trade partner, and also considering investor uncertainty surrounding the government’s ability to muddle through the election period without prompting a currency crisis, our 2015 estimate assumes that growth will have slowed in the second half of the year, and we expect it to weaken even further in 2016 in the face of macroeconomic adjustment.

INFLATION: A new consumer price index was unveiled in February 2014, but concerns remain about the accuracy of official data. Until the official index has a better and longer track record, we will continue to use data from PriceStats, an Internet price-monitoring company, in our forecasts. According to these data, inflation came in at 26.7% in August (latest available data). This is well below a peak of over 40% in late 2014, reflecting the sharp fall of oil prices in recent months, along with base effects (inflation spiked in the immediate aftermath of the January 2014 devaluation). Inflation is likely to tick up again in the short term, given currency adjustment, strong nominal wage growth and loose fiscal policy, but we do expect gradual disinflation in the medium term, assuming that fiscal policy tightens, domestic demand remains subdued (relative to the boom years of 2004-11) and domestic supply strengthens on the back of improvements in microeconomic policy. Even so, annual inflation will remain in double digits until 2020, reflecting weak institutional underpinning of price stability and a high level of wage indexation.

EXCHANGE RATES: The monetary authority has maintained a rate of nominal depreciation of around 1% per month for most of the year to date. We assume that currency adjustment under the heavily managed float will accelerate to almost 30% in 2016 as commitment to adjustment improves under a new government. We also project nominal weakening of almost 15% per year in 2017-18. This would start to reverse the accumulated real appreciation of the peso over the past five years, which has eroded export competitiveness, and bring the real trade-weighted exchange rate close to 2012 levels. In the meantime, devaluation risk persists. The authorities have failed to address underlying fiscal and external imbalances. These have, in fact, worsened in 2015, prompting renewed pressure on the black-market exchange rate in the third quarter. If left unchecked, imbalances will eventually force some sort of steep currency adjustment.

EXTERNAL SECTOR: We expect the terms of trade to continue to deteriorate for much of 2016-20 and for the current-account deficit to continue to widen in the short term to a peak of 2.2% of GDP in 2016-17. Given Argentina’s restricted access to international finance, a deficit of this size will heighten concerns over the potential for a balance-of-payments crisis. However, currency adjustment should gradually bolster the current account as a weaker peso starts to boost goods and services exports, and rein in imports. On this basis, we expect the current-account deficit to start to narrow late in the forecast period. There are large upside and downside risks to this forecast, depending on the pace of currency and inflation adjustment. We expect capital inflows to pick up from 2016-17, reflecting renewed investor confidence in a new government. This will lift reserves. However, this will depend on clear moves by the incoming government to address the weak legal framework, severe macroeconomic imbalances and continued default. In the meantime, import cover will be weakened by the use of reserves to shield the peso from currency pressures and to repay external debt. There will be a continuing risk of a balance-of-payments crisis if capital flight does not subside and a tangible improvement is not seen in access to overseas finance.

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20 noviembre, 2015

Originalmente publicado en ARGENTINA SALVAJIZADA:


Hoy a las 7:39 A.M.

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Wonderful proposal (2)

20 noviembre, 2015

Wonderful proposal(2)
Henry Whitney
Para Herald Letters
CC Soltys Michael Hoy a las 10:07 A.M.
Presidential candidate Scioli has promised. if elected, to build one million homes in four years in office. That comes out to 26 new homes an hour if construction goes on 24 hours a day, 365 days a year. But if people work a more realistic eight hours a day, 220 days a year, that means building 142 houses an hour. Presuming that Mr. Scioli has the money, is it possible to build that many houses an hour? Could it just be that Mr.Scioli is making a promise he cannot keep in his desperate attempt to get votes?

Henry Whitney
Tel 54-11-4795-4092
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RESPUESTA de Germán R. Piran
Para Henry Whitney Hoy a las 12:21 P.M.
Hola Henry;
Se podría, si se lo toma como prioridad nacional y se dictan las leyes pertinentes. Lo primero sería que no las haría el Estado sino la actividad privada, con licitaciones publicas internacionales. Y los contratistas tendrían la posibilidad de contratar a las personas que necesiten, sin estar reguladas por la Ley Laboral Argentina ni por los sindicatos, sería como cuando el país está en Guerra. Y el dinero aparecería porque el Estado sería garante solidario de las empresas intervinientes y se contrataría a un grupo de Auditoras internacionales, tipo PWP y otras para verificar que el dinero realmente se invierte y las casas se hacen. Obviamente, las empresas argentinas que construyan elementos para la construccion quedarían liberadas de pagar impuestos durante el plazo del plan constructivo. Y también quedarían libres de impuestos a la importación los materiales y equipos, para abaratar el costo de las obras. Para esto da igual que gane Scioli o pierda. Lo importante es concentrar los esfuerzos en que confluyan mano de obra, materiales y tecnología a los sitios de cada obra y para eso conviene contratar una empresa norteamericana para hacer algo parecido a lo que sucedió en USA durante la segunda guerra mundial, cuando la prioridad fue derrotar a los nazis alemanes y japoneses.
Además, habría que legislar para permitir inversionistas locales y extranjeros para construir viviendas para alquilar, declarando que ellas estarán sujetas en el futuro por las leyes que elijan los propietarios, a fin de garantizar que los inquilinos no podrán dejar se pagar los alquileres y otras obligaciones convenidas y quedarse en la vivienda mas de 7 días sin ser desalojados por la Fuerza Publica ante el solo requerimiento del propietario. Se consideraría que no pagar los alquileres a tiempo constituye un delito de estafa al propietario, y así se generaría un enorme mercado para gente que prefiere alquilar en vez de invertir el propio capital en viviendas propias, como hacen los habitantes de muchos países desarrollados desde siempre.
La historia Argentina muestra que se construyeron muchísimas viviendas para alquilar a viviendas o empresas comerciales y profesionales, y no existía la ley N° 13.512 de propiedad horizontal, que se publicó en el B.O. el 18/9/1948 durante el primer peronismo, cuando se congelaron por ley los alquileres y la inflación fue erosionando los precios, y eso frenó en gran parte la construcción de viviendas para alquilar. Podría ahora ante la necesidad de viviendas, dictarse una ley nacional de avanzada, garantizando que durante veinte años los inmuebles a construir destinados a alquilar, tanto viviendas como oficinas, estén exentos de impuestos a las ganancias para sus propietarios y los contratos podrán celebrarse por el plazo y en la moneda – nacional o dolares norteamericanos – que elijan los propietarios.
El concepto de alquilar es lo que se aplica en muchas cosas, tipo ferrocarriles, trenes subterráneos y carreteras construidas con peaje, y se trata de una forma práctica de utilizar capital de otros privados que no son el Estado para solucionar problemas de gente que vive en Argentina, y eso alivia las finanzas del Estado Nacional, Provincial o Municipal
El inconveniente es que muchos gobernantes prefieren que el Estado gaste mucho porque de esa forma se cobran coimas o “mordidas” y tenemos Presidentes y amigos ricos y habitantes necesitados de viviendas, caminos, subterráneos que no pueden construirse porque nadie confía plenamente en Argentina, desde 1930 hasta hoy, y el caso emblemático es que la Presidenta Argentina sostiene que es anti nacional y anti popular pagar a los fondos buitres el dinero de los bonos emitidos por el Gobierno Argentino que ha sido ordenado a pagar por el Juez del Estado de Nueva York, que es el competente en la plaza en que los fondos fueron obtenidos voluntariamente por el gobierno argentino presidido primero por Nestor Kirchner y luego su esposa actual presidenta Cristina F. de Kirchner. La Presidenta ha logrado construir para alquilar varios hoteles en Santa Cruz, señal que sabe es buen negocio construir para alquilar habitaciones hoteleras turistas, eso permite invertir capitales ociosos en forma positiva, y se dice que Cristina Presidenta percibe millones de dolares de ingresos por rentas hoteleras desde hace varios años.
Saludos cordiales de Germán R. Pirán, desde http://www.argentinasalvajizada.wordpress.com.

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A PRIMITIVE RESPONSE to a primitive response

19 noviembre, 2015

A PRIMITIVE RESPONSE to a primitive response
Para thom woodruff Hoy a las 8:13 A.M.
“All agreed — connection, communication, clarity promotes peace.” No argument. But with whom and what are we connecting, communicating? Each other, certainly. The Other… no, I think not.

The idea of a world governed by Sharia law is not all that great for men, and it is a hell on earth for the majority of women.

I do not want revenge for the deaths in Paris. But trying to soothe Fundamentalist Islam with understanding and brotherly love is like trying to communicate with predatory insects. We humans can make friends with many fierce warm-blooded creatures, including lions and wolves and others, but those beings melded into Fundamentalist Islam are like insects and arachnids. No communication or understanding is possible. Of course they would prefer to live, yet at the same time do not recognize the finality of death. Kind of difficult to exchange peaceful observations with an individual who may listen to you politely but will then blow you both to bits or, if he is in control, will cut off your head or immolate you and consider he has struck another blow for his beliefs.

If there are peaceful Muslims out there who do not prefer to read only the bloody sections of the Koran (as we Christians used to go on Crusades and burn elderly ladies according to the Old Testament), I welcome THEM with understanding and brotherly love. But as to the others, no, I see no way to reach them or change their thinking. If it can be done, of course. I just do not think it possible.

I do not want revenge, I want safety for those whom the Islamic State wishes to destroy. If this means we must destroy them, so be it.

Self-defense is not warmongering.

Moi et les trois chats joyeux =*>:) devil= =*>:) devil= =*>:) devil=

From: thom woodruff
To: Melanie Rose ; David Young ; Drew Ostler
Sent: Thursday, 19 November 2015, 2:34


We have to ask “Well, what is?”
We wish to live in peace-and prosperity
These conflicts seem religious /
yet they attack innocents
without regard to beliefs nor anything other than proximity and opportunity
Tonight, we began a counter-defense.
We sat and talked about issues-
in poetry prose song and music,we extemporized and exorcised our emotions
which oscillated between horror and anger-
to righteous wrath and revenge.
Logically, war is a trap.
It begets itself via fear, and makes more war once one starts.
Attrition? Defense?
Same tactics/strategies/materials.

We had poems and songs
We sang and responded.
All agreed – connection, communication, clarity promotes peace
And that is what we want.
Now to convince all warmongers to join in..

FULL MOON DREAMING @615 Radam Lane 78745 from 6-9pm Wednesday 25 November 2015

Th 19-THIRSTY THURSDAY Dripping Springs 7-9w/Nancy Fierstien.Theme”HATS”
Fri 20-SHARE YR STORIES@Twin Oaks Library 1-3pm Hosted by Ralph Hausser
GREEN MAN 7.09pm w/Lina &Zow
off 290 west Dripping Springs w/Anyah
Sun 22-Spoken &Heard 8th Birthday 6pm
Mon 23-EPOCH on ANDERSON-Bring 20 copies for an INSTANT ANTHOLOGY!

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18 noviembre, 2015

Originalmente publicado en ARGENTINA SALVAJIZADA:











                    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 la actual…

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Cavallo sobre la política exterior de Cristina Kirchner

18 noviembre, 2015

Originalmente publicado en ARGENTINA SALVAJIZADA:

Domingo Cavallo
Para grafpi1@yahoo.com.ar Hoy a las 10:24 A.M.
Domingo Cavallo
Ningún dirigente serio apoya la política exterior de Cristina
Posted: 04 Oct 2015 06:40 AM PDT
Aníbal Fernández, siguiendo una orden de Cristina, salió a criticar al Gobernador Juan Manuel Urtubey por sus declaraciones ante el Consejo de las Américas en Nueva York. Entre las muchas extravagancias de nuestra Presidenta, la más temeraria de todas es, precisamente, le pretensión de que quienes se postulan para sucederla se comprometan a mantener su política exterior.
Desde hace mucho tiempo es muy claro que ningún dirigente político serio apoya la política exterior de Cristina. Yo lo señalé en los primeros párrafos del Epílogo de mi libro “Camino a la Estabilidad”. Dije entonces:
“A fines de marzo de 2014, cuando estoy terminando de escribir este libro en la ciudad de Cambridge y he podido seguir desde acá la visita a Estados Unidos de…

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18 noviembre, 2015








By Taos Turner and Santiago Perez
18 November 2015

BUENOS AIRES — Police raided Argentina’s central bank as part of a federal investigation into allegations that it has put the country’s dwindling foreign-currency reserves at risk by aggressively trading derivatives.

Tuesday’s raid comes before Argentines vote for a new president on Sunday and amid rising concerns that the incoming administration will devalue the peso and tweak foreign-exchange policies to prevent a scarcity of U.S. dollars from suffocating the economy. Polls show Daniel Scioli of the ruling Victory Front coalition lagging behind opposition candidate Mauricio Macri.

The lack of greenbacks and the central bank’s criticism of Mr. Macri’s policy proposals to fix the currency system have taken center stage in the election campaign. The central bank is scrambling for ways to reduce tension in the exchange market ahead of the election, crimping access to dollars for individuals and companies and selling derivatives to offset foreign-exchange pressures.

Critics say that by setting artificial prices on futures contracts, the central bank is essentially subsidizing the price of dollars and that this could cost the next administration billions, just as it faces a cash crunch.

“I think it helped reduce pressure on the exchange rate, but it did so at an extraordinary cost to the country,” said former Economy Minister Jose Luis Machinea. “This is scandalous.”

Central bank President Alejandro Vanoli has accused Mr. Macri of planning to sharply devalue Argentina’s currency if elected. Mr. Vanoli, who economists here say is close to the current government, indicated he would be willing to resign if Mr. Macri were to win and devalue the peso.

His comments come after allies of Mr. Macri filed a criminal complaint against Mr. Vanoli and his board of directors for allegedly violating the bank’s charter by selling dollar futures contracts at below-market rates “to benefit third parties and causing grave damage to the bank’s assets.”

Federal Judge Claudio Bonadio ordered Tuesday’s raid as part of the investigation into the complaint. Experts say raids to secure evidence are standard procedure for Argentine judges after criminal complaints are filed.

The dispute arose after the trading volume of dollar futures rose sharply in late October, when investors jumped at the opportunity to profit from buying futures for just 10.6 pesos per dollar, when the market rate abroad was closer to 15 pesos.

After Argentina implemented foreign-currency controls in 2011, central-bank reserves fell by almost half to about $26 billion. The next president, who will be sworn in onDec. 10, will need to move quickly to stop the bleeding.

Mr. Macri has indicated that if elected, he would remove some foreign-exchange controls that have strengthened the peso to unsustainable levels. He has also criticized the central bank’s derivatives transactions.

“I’d be a Nobel Prize winner if I knew the peso’s exchange rate” after Dec. 10, Mr. Macri said last week. “No one knows how many foreign-currency reserves there are or how many will be left.”

The central bank doesn’t publish data on its futures transactions, and bank officials declined to comment on the matter. But economists estimate the bank has sold more than $15 billion in dollar futures over the past three months.

The bank could eventually have to finance the gap between those two rates, potentially increasing its liabilities by the equivalent of up to $7.3 billion at the current official exchange rate, according to Carlos Rodriguez, president of Ucema, a university in Buenos Aires that specializes in macroeconomic studies.

Such liabilities could widen the country’s budget gap, presenting a costly challenge to Argentina’s incoming president at a time when both Mr. Macri and his rival Mr. Scioli say the country is badly in need of fresh funding.

By Carlos Tejada
November 17, 2015

Beijing seeks to improve its international presence in nuclear technology

BEIJING—China struck a deal to build a nuclear reactor in Argentina and the agreement could result in more than 30 billion yuan (about $4.7 billion) in equipment exports, Chinese official media said.

The deal comes as China seeks to bolster its international presence in nuclear technology, where it hopes to someday export homegrown reactors.

The official Xinhua News Agency said this week that state-controlled China National Nuclear Corp. signed a commercial contract to build Argentina’s fourth nuclear power plant. The heavy-water reactor will be based on a Canadian technology called Canada Deuterium Uranium, or Candu.

State-run Industrial & Commercial Bank of China Ltd. , China’s largest bank by assets, will provide financing, which will cover 85% of the cost, according to Argentine and Chinese officials.

The two sides also struck a framework agreement—which is more tentative—for a long-discussed second reactor based on Chinese technology. Argentine officials said the two projects would require a total of about $15 billion in financing if the second project advances.

The second reactor would be based on a Chinese technology called Hualong-1, which China hopes will someday compete with reactors made by U.S. nuclear giant Westinghouse Electric Co. and French rival Areva SA . In April, China’s State Council, or cabinet, approved construction of the first Hualong-1 reactor.

Xinhua said the two sides hope to sign an agreement to begin construction on the second reactor in the coming months.

China has been broadening its presence in the global nuclear industry. In October, state-controlled China General Nuclear Power Corp. agreed to take about a one-third stake in the Hinkley Point nuclear-power project in the U.K.

By Kirk Mitchell
Nov 18, 2015

Former FEMA videographer Kurt Sonnenfeld claims he has framed to cover up evidence of U.S. complicity in 9/11 terror attacks

Argentina’s president has blocked the extradition of a Denver fugitive who claims he was framed for murder because video he took of ground zero proves U.S. complicity in the 9/11 terrorist attacks.

The government of Cristina Fernandez de Kirchner issued an executive order Sept. 16 overriding a December decision by the Argentina Supreme Court. The court had approved the extradition of Kurt Frederick Sonnenfeld to the United States.

The government’s order cited human rights in its denial of the request to grant extradition. It also says that extradition could put Argentina in a position of violating an international principle of not forcing the return of asylum seekers to countries where they could be persecuted.

Sonnenfeld, who was charged in the New Year’s Day 2002 murder of his first wife, Nancy, is a former videographer for the Federal Emergency Management Agency. His video over the course of several weeks in September 2001 documented rescue and recovery efforts that were broadcast around the world.

Sonnenfeld claimed in his book “El Perseguido” (“The Persecuted”) and in numerous interviews that he was framed for murder to silence him. He maintains his video proves U.S. authorities were conspirators in the 9/11 attack. He claims members of President George W. Bush’s government wanted to draw the country into a war with Iraq.

CBS’s “48 Hours” provided documents to The Denver Post on Tuesday that detailed the executive decision made by the government of Kirchner. The TV news magazine is airing a broadcast called “The Strange Case of Kurt Sonnenfeld” on Saturday.

Lynn Kimbrough, spokeswoman for Denver District Attorney Mitch Morrissey, said the office has not received any notice about Argentina’s decision in September. However, she added that such notification would come through the U.S. Justice Department.

Messages left for Peter Carr, spokesman for the U.S. Justice Department, were not returned Tuesday.

The latest order in Sonnenfeld’s case was signed by five officials from Kirchner’s government, including Hector Timerman, foreign relations minister of Argentina.

The Argentine Supreme Court approved Sonnenfeld’s extradition in December, 11 years after then-District Attorney Bill Ritter first sought his extradition.

The 2004 extradition request was initially rejected by an Argentine federal judge who said Colorado failed to offer adequate assurances that it would not seek the death penalty against Sonnenfeld.

In its extradition request, Ritter indicated that Sonnenfeld was charged under a statute that did not have death as a possible penalty. He also signed a document promising not to seek the death penalty against Sonnenfeld.

Former Gov. Bill Owens also signed a document saying that if Sonnenfeld was sentenced to the death penalty, he would not allow his execution.

By Katia Porzecanski
November 17, 2015

* Morgan Stanley and Owl Creek also reduced YPF holdings
* Gramercy Funds, Discovery Capital added to YPF stakes

Goldman Sachs Group Inc., Morgan Stanley and hedge fund PointState Capital LP reduced their stakes in Argentina’s state-controlled oil producer YPF SA before the nation’s presidential elections.

Morgan Stanley cut its position in the company held in various portfolios by $48 million in the third quarter to $23 million, while Goldman Sachs sold a $41 million stake to reduce its holdings to $88 million as of Sept. 30, according to regulatory filings. Zach Schreiber’s PointState, which began amassing a position in YPF in 2013, reduced its total holdings in YPF by about 70 percent to $12 million, and hedge fund Owl Creek Asset Management lowered its stake by 81 percent.

YPF, which was expropriated by the Argentine government in 2012, become a widely-held security among hedge funds betting on an investment boom once a new president is sworn into office next month, which could pave the way toward a settlement with creditors from the country’s 2001 default. While investors reduced their positions in the oil company amid a slump in crude prices in the third quarter, YPF’s American depositary receipts have rallied 35 percent since then as the nation heads towards a runoff election between market-favorite Mauricio Macri and Daniel Scioli on Nov. 22.

Companies including Rob Citrone’s Discovery Capital Management, Alan Howard’s Brevan Howard Asset Management, and Gramercy Funds Management increased their stakes in the third quarter. Still, Soros Funds Management lowered its holdings in the company for the second consecutive quarter, leaving billionaire George Soros’s position in the company at $154 million, the fourth-largest among minority shareholders.

By Carolina Millan
November 17, 2015

* Clorox, Telefonica also among companies with cash in Argentina
* Investors expect peso to plunge 38% over next three months

The currency devaluation that Argentina needs to restore its economic health is going to be painful for foreign companies swimming in pesos.

Coca-Cola Co., Clorox Co. and Telefonica SA are among businesses with millions of pesos that will lose value if the new government elected on Nov. 22 weakens the peso’s official rate, something economists are urging be done. Investors from George Soros to Richard Perry, and multinationals including Brazilian foodmaker BRF SA and American oilseed processor Bunge Ltd., have wagered on policy makers implementing much-needed economic reforms promised by the leading presidential candidates.

But the result could be bruising for some businesses with large hoards of cash, as currency controls have left foreign companies stuck with profits that they can’t move out of the country. There may be as much as $8 billion in company dividends that could not be repatriated in the period between 2012 and 2015, according to consulting firm Elypsis.

“It’s difficult, because they often have a lot of liquid cash that’s reserved for sending dividends abroad as soon as it’s possible,” said Orlando Ferreres, who runs Ferreres & Asociados, a consulting firm that advises companies including Coca-Cola and Total SA. “Some of them have bought buildings, but they don’t like that at all. It’s a way of protecting dividends, but it immobilizes the money.”

Argentina’s crawling currency peg has become one of the most prominent themes of the elections, with opposition leader Mauricio Macri vowing to lift currency controls and let the peso float freely on his first day in office. Ruling-party candidate Daniel Scioli has said he would lift restrictions gradually while continuing to control the exchange rate through central bank intervention so as to not hurt the purchasing power of Argentines.

Clorox, the U.S. consumer-products company that sells everything from bleach to salad dressing, has said it expects “business challenges” in Argentina next year, and warned it had $100 million of peso-denominated assets that would be affected by a devaluation. A 50 percent drop in the peso could have a material impact on earnings, Clorox executives wrote in a U.S. regulatory filing Sept. 25. The company is “monitoring developments in Argentina and is taking steps intended to mitigate the adverse conditions, but there can be no assurances that these actions will mitigate these conditions.”

Argentina contributed 4 percent of Clorox’s total sales in 2015, making it one of the about 70 companies in the Standard & Poor’s 500 Index that get at least a portion of their revenue from Argentina. A Clorox spokeswoman referred questions to the company’s latest earnings statement.

Coca-Cola said in a regulatory filing after the third quarter that it has $346 million stuck in Argentina because of currency controls. A Coca-Cola spokesman declined to comment on the country’s exposure to a peso devaluation. Madrid-based Telefonica told investors Nov. 6 that it has 105 million euros of pesos that it can’t send back to Spain. Telefonica declined to comment about its cash position in Argentina.

The list of companies that will be affected is incomplete because many break down their revenue by region, not specific country. Most also don’t specify how much cash they have in individual countries. It’s also not clear if the companies hedge their exposure to the peso, a move that could blunt any losses from a devaluation.

Investors expect the peso to fall 38 percent over the next three months to 15.5 per dollar, according to trading in non-deliverable currency forwards. That compares with the current official rate of about 9.6 per dollar. At the so-called blue-chip swap rate, a foreign-exchange value derived from buying bonds or stocks in pesos and then selling them abroad to obtain dollars, the peso trades at about 14.8 per dollar. Most individuals use illegal street markets to avoid controls, and pay 15 pesos per greenback.

Spanish security company Prosegur Cia. de Seguridad SA — after benefiting from increased demand for its armored-car services fueled by the country’s money printing –invested 70 million euros ($75 million) in real estate this year to “protect the cash” it has in the country, Chief Financial Officer Antonio Rubio Merino told investors Oct. 29. Prosegur gets 27 percent of sales from Argentina, according to data compiled by Bloomberg.

“Our business has a natural hedge because both our revenues and our costs, primarily labor, are in local currency,” Prosegur said in an e-mailed statement. “We also consider that the impact of a devaluation would be mitigated by Prosegur’s inflation adjustment.”

A devaluation could be advantageous for businesses that pay employees in the local currency while receiving dollars for their exports, such as mining companies. The chief executives of Silver Standard Resources Inc. and Globe Specialty Metals Inc. both told investors in recent presentations that a drop in the peso could be beneficial as it would lower their operating costs.

A peso devaluation would increase the flow of dollars into the country, helping rebuild foreign reserves, according to Barclays Plc strategist Sebastian Vargas. Exporters who have been delaying sending goods abroad in hopes of a better exchange rate will unleash a flurry of trade, he said.

Alejandro Diaz, the CEO of the local chapter of the U.S. Chamber of Commerce, which sent its first delegation to the country in 20 years earlier this month, said companies are looking toward the long term as they confront the upcoming changes.

“There’s a lot of expectation ahead — we’re not waiting for it to be Disney World in 2016, but we are ready for the challenges ahead,” Diaz said. “We’ve heard from different economic groups the intention to take the right long-term decisions, and we’re ready for these decisions and optimistic on how to face them.”

November 16, 2015

Facebook Page behind the Campaign Claims It Was All a “Joke”

The creativity of Argentinean government supporters has no limits when the goal is to win an election.

On Saturday, November 14, a day before the presidential debate ahead of the presidential runoff, pro-government groups on Facebook called on their follower to “hide the national ID” of relatives who don’t intend to vote for candidate Daniel Scioli of the ruling Front for Victory party.

The pro-Cristina Kirchner Facebook page “I Support Cristina” posted: “The campaign to ‘hide the national ID of your opponent relative’ has begun. If you couldn’t persuade them with arguments, and they can’t realize the government’s achievements, and, despite everything, they will still vote against themselves, don’t insist on making them listen to reason. On the 21st of November [one day before the election], hide their national ID card, and when they ask you about it, tell them: ‘it wasn’t magic.”

Felipe Alonso ‎@felipealonso19
Si tenes un familiar, amigo o conocido que vote a Macri NO LO DUDES, robale el DNI
1:47 PM – 10 Nov 2015
“If you have a relative, a friend, or an acquaintance that will vote Macri. Don’t think it twice, steal his national ID.”

The national ID is the only valid document to vote in Argentina.

The campaign quickly gained traction, first among pro-government supporters, and then among Kirchner’s opponents, who expressed outrage over the idea. Local media quickly picked up the post.

After 48 hours, however, the “I Support Cristina” page’s administrator wrote a new post explaining that the previous exhortation had been “a joke.”

“Who can believe that someone would steal a national ID card from someone else?” the page administrators wrote. “Do I have to explain that this was a joke? As you may know, our post has been widely covered by the media, but we win by being active every day on the streets.”

Buenos Aires Governor Daniel Scioli is now trailing in the polls. He was the favorite to win prior to the first round of voting on October 25, but he obtained less votes than expected.

While pollsters put Scioli between seven and 10 points ahead of Mauricio Macri, the candidate for the Let’s Change coalition of opposition parties, Macri came in only three percentage points behind — 34.15 percent to Scioli’s 37.08 percent — in the official results. After the narrow defeat, Macri gained sufficient momentum to overtake Scioli in the polls.

According to the pollster Management & Fit, Macri would defeat his rival, securing an eight-point difference over Scioli.

By Kabir Sehgal
Nov. 17, 2015

On Nov. 22, Argentines will go to the polls to elect a new president. It’s a watershed moment for the country, as the late Néstor Kirchner and then his wife, Cristina Fernández de Kirchner, have held the president’s office for 12 years — long and arduous years for Argentina.

During their back-to-back tenures, Argentina has experienced recession, high bouts of inflation, disputes with creditors and fiscal deficits. In 2009 it was downgraded from an emerging market to a frontier market. Many blame the populist policies of the Kirchners as causing and exacerbating the country’s problems. Therefore, the prospect and promise of a new president has some thinking that Argentina could finally turn the page on its lost decade. Argentina could shift to the right and adopt more market-friendly policies, which would benefit local and foreign investors.

So who will win the upcoming election? Argentines will choose between two candidates during this Sunday’s runoff election: Mauricio Macri, a businessman and current mayor of Buenos Aires; and Daniel Scioli, the former vice president of Argentina and the governor of Buenos Aires Province. A recent poll shows Macri leading Scioli by 8 points. Scioli is viewed as an incumbent and was endorsed by the current president. That Macri is leading suggests that Argentina is ready for a more dramatic change from Kirchnerism and wants to finally embrace the opposition party. “This is a problem of trust,” Macri said in a recent interview. “This government has destroyed trust among Argentines and the world. We are going to put Argentina back on a path to growth and back into the world.”

During the latest presidential debate, Scioli failed to disassociate himself from the Kirchners while attacking Macri as wanting to dismantle Argentina’s welfare programs. Macri counterattacked Scioli by saying, “You’re not change. You chose continuity.” Macri also made the case that Argentina’s roadblock was in fact its own government: “Argentina’s problem is not the dollar. It is a government that does not stop lying and has destroyed confidence in our country, which is why there’s no investment or growth.

Inflation has diluted the income of our retirees and our workforce.” Macri also said that he would emphasize market-friendly policies that would help generate confidence among local and foreign investors. Macri added that he would implement an ambitious infrastructure program of about $16 billion, cut taxes to attract investments, reduce tariffs to encourage trade and unwind many capital controls.

If Macri wins, Argentina’s market should respond favorably. There are a few companies with exposure to Argentina to watch: 98% of Americas Petrogas’s revenue comes from the country, 45% of Silver Standard’s (SSRI – Get Report) total assets, 18% of Mercado Libre’s (MELI – Get Report) revenue, and 8% of AMBEV’s (ABEV – Get Report) revenue. These stocks might appreciate on news of Macri’s potential victory.

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Banco Central allanado ¡Aleluya!

17 noviembre, 2015

Leer la noticia buena, Finalmente, la Justicia se decide a investigar al mas inútil y tramposo de los bancos argentinos: el que debiera supervisar a los bancos públicos y privados del país, pero desde hace décadas no lo hace. Al contrario, desde allí engañan a la gente con emisión monetaria sin respaldo, incumpliendo con su obligación de respaldar el valor de la moneda.
La irresponsabilidad del descontrol del Banco Central es siempre del Gobierno Nacional, que prefiere designar un directorio servil para poder el Presidente/a ladrón de turno imprimir billetes bancarios en forma excesiva, para generar el mejor negocio sucio inventado por los peronistas: la inflación. Ojo, los radicales tampoco fueron sensatos: con Frondizi el banco se dice que casi quiebra cuando su Presidente en 1959 se contaba que se hizo girar a su cuenta bancaria personal en Uruguay una cantidad enorme de dólares, y el mismo día viajó a Montevideo, y aprovechando que no existía tratado de extradición entre Argentina y Uruguay, se radicó en Uruguay para siempre. Frondizi tuvo que devaluar un 50 por ciento el peso argentino, y destrozó la economía de los que se habían endeudado en dólares y no pudieron repagar sus préstamos.
El presidente Raúl Alfonsín provocó algo peor: la hiperinflación argentina, quizás motivada porque los militares destrozaron las finanzas argentinas especialmente con su aventura frustrada en Malvinas, que supongo nos costó mucho mas de lo imaginado y que no solo gastaron en armas para “defender a la Patria” sino que se embolsaron una parten del botín.
Y la actual Presidenta – por suerte su mandato termina en menos de un mes – también nos engañó y dilapidó los pocos dólares que quedaban. Días atrás, en una charla recordamos que según Roberto Cachanoski el Central no solo se gastó todas sus reservas, sino que además esta debiendo mas de mil millones de dólares. Y la alarma sobre ventas a futuro de dolares que no existen en poder en ese banco ni tampoco posee el Estado Argentino, es lo que causa la actuación de la justicia, allanando el Banco y esperemos, que terminen siendo procesados los integrantes del Banco Central y los Presidentes que autorizaron u ordenaron emitir dinero inflacionario, sabiendo o debiendo saber que eso empobrece a la gente porque reduce el valor de los salarios y encarece la importación de los productos que Argentina debemos importar, para mantener una balanza de pagos equilibrada.


Cuando un país está robado por su gobierno, es porque el pueblo incauto votó mal, o que está manejado por militares o presidentes electos ladrones. Los gobernantes sensatos se sienten administradores de la cosa publica, y no gastan dinero del Estado en forma innecesaria, ni aumentan el numero de empleados públicos para captar mas votos para el partido Gobernante.
Pero desde años Argentina nos acostumbramos a bancos oficiales ladrones y banqueros corruptos, pero nada – o casi nada – pasaba. En la infausta época de Videla y Martinez de Hoz el sistema financiero argentino fue una vez mas destrozado, porque se cometió el delito de que el Banco Central garantizara los depósitos en bancos y financieras privadas. Con la misma garantía del Banco Central, las financieras y bancos ladrones ofrecía tasas de interés muchísimo mayores. El mayor Banco Privado – Banco de Intercambio regional, creo se llamaba – era una maquina de robar al Estado, y su mayor accionista huyó a México – país con el que no teníamos extradición – y dejó una deuda de tres mil millones de dólares, de la que se hizo cargo el garante Banco Central haciendo lo mas fácil: emitiendo papel moneda inflacionario en enormes cantidades, para lograr tapar el agujero que el banquero ladrón y sus amigos militares dejaron.

UN ECONOMISTA IDEALISTA y estabilidad monetaria

17 noviembre, 2015

Originalmente publicado en ARGENTINA SALVAJIZADA:

Desde http://opinion.infobae.com/alberto-benegas-lynch/2014/02/15/desenredar-la-madeja/  utiliza un pensamiento liberal idealista. Lo que dice es cierto, en la medida que existan gobernantes serios y honestos, resultado de haber sido elegidos por pueblos civilizados, para gobernar para el bien del conjunto social conocido como “la gente” (the people of Argentina).  Me cuesta disentir con lo expresado por el doctor Benegas Lynch (h) pero noto nos propone una meta, por ahora lejana para la cultura peronista fascista inflacionaria argentina. El purismo económico se asemeja a lo que en Filosofía del Derecho enseñaba Hans Kelsen: un esquema perfecto, donde todo “cierra”, porque se ha legislado para que cada uno de los Poderes del Estado vigile y controle a los dos otros dos. Si los funcionarios públicos fuesen máquinas, funcionaría perfecto. Siendo humanos falibles, la perfección no se alcanza. Pero la evolución hace que ciertos países estén bien gobernados, y la enorme mayoría de paises tenga gobernantes mediocres o…

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