View Full Version : Another horror story about doing business in Argentina
Some years ago, in a half-assed move at economic progress, the government privatized the operation the water system in Buenos Aires (but didn't sell it outright, which is the key). The French firm Suez, SA offered the highest bid for the right to operate the water system. One of the things the government has done to Suez since they won the contract was to forbid them from the right to raise their rates for the last 5 years. Not surprisingly, Suez was in no hurry to invest more money into the infrastructure.
Some months ago Suez indicated they weren't going to renew the contract, since it is an obvious money-loser. Just this week, the government jumped the gun and revoked the contract altogether. Word is that some of Kirchner's cronies are going to get the new contract. Surprise, surprise, surprise!
Suez is suing the Argie government in the international claims tribunal. They'll probably win. Whether they will be able to draw blood out of the Argentine turnip is another question altogether.
Notice how these kinds of socialist shenanigans are affecting Argentina's credit standing abroad.
March 21 (Bloomberg) -- Argentina revoked Suez SA's 30-year contract to supply water and sewage treatment to residents in and around Buenos Aires, putting management of the services back under government control.
Planning Minister Julio De Vido said the government was ending the concession with Suez unit Aguas Argentinas SA because the company failed to invest enough in services for 10 million customers. The decision comes six months after Paris-based Suez said it would forgo its contract because the government refused to allow it to raise rates frozen since 2001.
Argentine bonds fell because of concerns President Nestor Kirchner is increasing control over private industry in the country, said Guillermo Mondino, head of emerging markets research at Lehman Brothers Inc. In New York.
'This is bad news because there still was an expectation that a private operator could replace Suez,'' Mondino said. 'This deepens this government tendency to reclaim control of companies and then mismanage them.''
Electricite de France and National Grid Plc are among other utilities that left Argentina since the government's 2001 debt default and subsequent currency devaluation, saying their units were no longer profitable after a 70 percent drop in the peso in 2002 cut their revenue in dollar terms.
The yield on Argentina's 5.83 percent bond maturing in 2033 rose to 5.95 percent at 11 a. M. New York time from 5.93 Monday, according to Banco Mariva in Buenos Aires.
Argentina's government froze utility prices following its default on $95 billion of bonds in late 2001. Aguas Argentinas defaulted on more than $500 million in debt and hasn't been able to carry out a restructuring because of the failure to renegotiate its concession contract with the government.
Suez and more than 20 international utility companies are suing Argentina in a World Bank court over breach of contract, contending they had agreements that allowed them to increase prices in the event of a currency devaluation.http://quote.bloomberg.com/apps/news?pid=10000086&sid=a5UVngHQ4H_E&refer=news_index
The blind leading the blind.
The corruption started when a foreign company with internationalist support was given control over utilities infrastructure much like the selling of US ports to Arab interests.
It may take foreign technology to install such a system but not foreign investment and now that internationalist exchange manipulation has made it unprofitable the locals can and should take over instead of paying European foreign exchange profit margins.
The French are a victim of the 2000 financial crash and not Argentine political corruption.
Does anybody really believe that the people of Argentina are too inept to run a water utility?
Goblin.
Thomaso276
03-23-06, 18:15
"selling of US ports to Arab interests"
I read an interesting article the other day about this. Think it was Thomas Friedman. Point was, the home country - Dubai- of this firm in mid-east is a perfect example of what we want as reasonable, moderate and friendly countries toward free-enterprise and tolerant, if not emabracing, of democarcy. As soon as a firm tries to expand into USA, everyone screams about security risk. As well, I think it is a service contract, not selling the ports to them.
We claim to want moderate countries in middle east, and then when we get them we cry about their contracts in the USA?
Sounds like the alarms about Japan buying up real estate in the 80's. Where the hell else are they going to spend their dollars? Here in Argentina?
Kirchner and crew are all Argentines. Are their actions a surprise?
Ever hear the joke about when God created Argentina, he got everything right - the climate, the resources, etc except one problem - he put the Argentines in it.
Sounds like the alarms about Japan buying up real estate in the 80's. Where the hell else are they going to spend their dollars? Here in Argentina?Heh heh heh. Funny thought!:D.
You make a good point, Thomaso. The foreigners buy our real estate and buy our bonds because the US is the safest place in the world to invest.
I'm also old enough to remember the 80s mania with "The Japanese own us! They're buying up all our bonds! They own Rockefeller Center!" What we hear now is just SS, DD.
Rock Harders
03-23-06, 19:08
Mongers-
I think that the President of Argentina is doing a decent job considering the situation in which he was thrust into. This guy was elected on only a 22% vote and only won the ensuing run off because the "other guy" (Menem) quit. In early 2003 Argentina was still totally in the shitter, since then nobody can deny there has been significant improvement. True, he is a product of the Argentine system, which means he tolerates and participates in the inefficiencies, populism, and corruption that is a time-honored part of the Argentine political culture. Compared to Menem, this guy is a saint, he at least appears to be taking actions that he believes will help solve some of Argentina's enormous problems. In addition, Kirchner has respect for human rights and has furthered the prosecution of the criminals from the 1976-83 junta. Also, you have got to give the guy credit for standing up the the holders of Argentine bad debt and the IMF- yes, he fucked the investors out of billions of dollars, but that burden of debt was thrust upon the Argentine people without their consent by irresponsible and corrupt leaders (Menem, Alfonsin, De La Rua) I would rather have Nestor Kirchner as my President than George W. Bush- at least Kirchner does not have blood on his hands.
Suerte,
Dirk Diggler
#3: I think that the President of Argentina is doing a decent job.
#2: Compared to Menem, this guy is a saint.
And #1: I would rather have Nestor Kirchner as my President than George W. BushWho would you rather have as the Pres of USA - Castro, Chavez, or Kirchner. Who could wreck it first? I might prefer Saddam Hussein.
All the Argentines moan about Menem. He was corrupt like all others but his admin was largely responsible for bringing Argentina into the 20th century, in the 1990s.
All the Argentines moan about Menem. He was corrupt like all others but his admin was largely responsible for bringing Argentina into the 20th century, in the 1990s.More specifically, it's in the 1930s. And it's good for us. For people who have money, hard economic times can be incredibly good.
If this country ever got its act together the good times for us would fast come to an end. But I'm not losing sleep worrying that they're going to do anything except continue to implode.
Some years ago, in a half-assed move at economic progress, the government privatized the operation the water system in Buenos Aires (but didn't sell it outright, which is the key) The French firm Suez, SA offered the highest bid for the right to operate the water system. One of the things the government has done to Suez since they won the contract was to forbid them from the right to raise their rates for the last 5 years. Not surprisingly, Suez was in no hurry to invest more money into the infrastructure.How many "years ago" are you refering to?
Some months ago Suez indicated they weren't going to renew the contract, since it is an obvious money-loser. Just this week, the government jumped the gun and revoked the contract altogether. Word is that some of Kirchner's cronies are going to get the new contract. Surprise, surprise, surprise!"Word"? "Word" from whom?
I wouldn't discard that some "Kirchner's cronies" get the business (after all, everything is possible) but at least I would wait for verifable info, not getting played by "words" from lobbysts, and I would study the subject thorougly.
Notice how these kinds of socialist shenanigans are affecting Argentina's credit standing abroad.LOL. You seem more worried than Argentineans.
One day, you will learn that socialist doesn't mean "everything that doesn't align to my social-economic principles".
Andres
Heritage Foundation+WSJ study concluded. AR is ranked 107 out of 157 countries. A rating sure to decline in 2006 (price fixing, beef export controls+ ban, Aguas, more)Come on! Didn't the US recently disapprove the acquisition of a big oil / petrochemical company by the Chinese?
Regulations and state intervention are a reality almost everywhere. Whether this is done properly or not is another issue.
Andres
All the Argentines moan about Menem. He was corrupt like all others but his admin was largely responsible for bringing Argentina into the 20th century, in the 1990s.That's VERY disputable. Argentina rarely had had 2-digit unemployment before Menem. That's part of his legacy, too.
Andres
Rock Harders
03-24-06, 00:42
Moore-
You are absolutely right, Menem did great things for Argentina-
1. Sold off valuable state assets such as YPF, Aerolineas Argentinas, and Aguas Argentinas- in exchange for millions of dollars in personal kickbacks.
2. Accepted billions of dollars in loans from the IMF and others, and squandered that aid, leaving the Argentine people with hundreds of billions of dollars of debt.
There is a popular saying in Buenos Aires- Menem lo hizo- "Menem did it". Menem was recently elected a Senator out of his province of La Rioja, and Kirchner made a statement by refusing to acknowledge or shake Menem's hand while shaking every other senators hand at the swearing in of the Congreso. Menem can be seen driving one of his several Ferrari's (bought with those kickbacks) with his Chilean beauty queen wife.
"State assets", what are you a communist? Several of those "state" enterprises like YPF and the telephone co were turned into efficient and very profitable businesses once privatized. Previously they were bureaucratic entities that had 10X more employees than necessary, required bribes, and did nothing but lose shitloads of money. A form of welfare.
Menem stole a shitload of money - he wins, he is a superstar, he should be awarded a medal. A master of theives that robbed robbers. Welcome to the jungle.
Regarding his "beauty queen" wife, that must have been a few decades ago.
Does anybody really believe that the people of Argentina are too inept to run a water utility? Possibly. Ive been told that early last century, the British built, ran and maintained the railroads here. But mid century, the Argentine govt took control of the railroads. They kept collecting fees, but instead of using them for maintenance, they lined their pockets and let the RR system go to hell. Sounds believable.
I don't think Menem has the patent for plundering.
Rock Harders
03-24-06, 02:53
Moore-
Menem continues to be married to his Chilean beauty queen wife. She is about 40, he is in his late 70's and they have a 2 or 3 year old son together.
YPF is a great example of the exact sort of state asset that should not have been sold off. Don't you think that the Argentine government and people would benefit from the $60 USD + oil prices right now if they still owned YPF? I am not a "communist", but I think that certain countries are not capable of succeeding with a US-style market economy, and require certain socialist elements in order to be successful. In order for a US style market economy to function properly, socioeconomic mobility must be available to a certain degree, and in most parts of Latin America it is unavailable and thus economic problems abound. In the US, the reality of the situation is that ANYBODY really can get an education and make an above average living- it is easier for some than others, but the opportunity does exist, and therefore the US mixed market economy functions as it does.
Suerte,
Dirk Diggler
The AR govt doesnt seem interested in export revenues from beef, why would it act differently if it had oil to export?
The population is well educated and education is more available in AR than in USA - its free, right?
You can talk about socioeconomic issues, but apparently there is no excuse for Argentina's not being a success. A difficult problem to fix.
My point about Menems wife is that you musn't forget "former". I know who she is and beauty queen would not be a description I'd use.
Rock Harders
03-24-06, 03:34
Moore-
I was under the impression that Menem was still with the "beauty queen". She was "Miss Chile" probably 20 years ago, and she still looks good from the pictures I have seen.
Anyway, you are absolutely right that Argentina has no excuse to why their country is in the condition it is in. They have all the natural resources in the world, no overpopulation issues, educated population, a good healthcare system, nice weather, hot women, kind people, good genetics, etc. In 1900, Canada, Australia, the United States, and Argentina were all in similar positions- yet only Argentina has not flourished more or less consistantly. My theory on this is that the Spanish colonial legacy is what doomed the Argentine state, and Latin America in general. The British colonial legacy left precedents for human rights, law and order, market economics, and civilian governments. Notice neither Australia, Canada, or the United States has ever had anything but a market economy and a civilian government, and civil rights for those considered citizens (slaves not considered citizens until 13th Ammendment in US, considered property, as per Dred Scott decision, also in Australia aborigines not considered citizens originally) The Spanish (and italian) legacy of corruption, not payment of taxes, and military governments has led to the Latin American condition, IMO.
This ties into my general statement on Kirchner and Menem, Kirchner is acting with good intentions within the framework of the fucked up system he is responsible for steering, Menem did not, he just tried to make him and his supporters wealthy at the expense of the Argentine people. Obviously in the long term curbing beef exports is an awful policy any way you slice it, I guarentee that the ban does not last anywhere near the six months that Felisa Miceli announced. The government is attempting to play hardball with the beef producers in order to halt price gouging.
Suerte,
Dirk Diggler
I was under the impression that Menem was still with the "beauty queen". She was "Miss Chile" probably 20 years ago, and she still looks good from the pictures I have seen. Let's give credit where credit is due. Mrs. Menem is Cecilia Bolocco, Miss Universe of 1987! The guy is sleeping with the woman who won the title for being the hottest of the hotties on the fricking planet! And in 2001, at the ripe old age of 71, he married said hottie and has subsequently impregnanted her.
http://i.esmas.com/image/0/000/004/524/bolocco1NT_.jpg
Not bad for a short, swarthy son of Syrian immigrants. :D
Look how he has to stand on his tippie-toes to kiss her on the cheek:
http://external.cache.el-mundo.net/elmundo/fotos_gente/2005/07/01/1120219777_extras_fotos_gente_0.jpg
You can talk about socioeconomic issues, but apparently there is no excuse for Argentina's not being a success. A difficult problem to fix.It's not an excuse, it's a reason. And it's systemic. Corruption, socialism, and disrespect for the concept of private property is the witches' brew which keeps Argentina poor and backward, despite having all the ingredients necessary for economic success.
"Word"? "Word" from whom?
I wouldn't discard that some "Kirchner's cronies" get the business (after all, everything is possible) but at least I would wait for verifable info, not getting played by "words" from lobbysts, and I would study the subject thorougly."Word" as reported by the Associated Press, referring to Argentine internal discussions:
There has been heavy speculation in Argentina that the government has been searching for a buyer allied with the center-left government of Kirchner.http://www.chron.com/disp/story.mpl/ap/fn/3738189.html
LOL. You seem more worried than Argentineans.You're right. True deadbeats don't worry about paying back their debts.
One day, you will learn that socialist doesn't mean "everything that doesn't align to my social-economic principles".Just the opposite. I have a vested interest in seeing Argentina to continue to be backward, poor, and socialist. If the country ever got its act together I would lose my favorite playground, where even a middle-class guy like me can pretend to be a rich guy like Carlos Menem.
It may be an oversimplification, but the read I get on Menem is simply that he parlayed all the neo-liberal economic stuff into a series of sell-offs and loans that were used both to line his and his friends' pockets as well as to keep funding the house of cards that finally fell when no one would give them any more money. Then he skipped town and now, of course, is back as a Senator. My Argentine friends refuse to use his name -- they just call him "him." I think a big part of the problem, as in the US in times past, is that no one is tempted personally until the temptation becomes too great to resist. Menem co-opted just about everyone who could have done him harm, and in doing so, wrecked the country -- for about the zillionth time since 1824. But I still love it.
Fred88/ aka Peter in Martinez
Kirschner behind this?Seizing foreigners' assets? It could never happen in Argentina! [snicker]
"Word" as reported by the Associated Press, referring to Argentine internal discussionsThat "word" worths very, very little. The article in the URL says "There has been heavy speculation in Argentina that the government has been searching for a buyer allied with the center-left government of Kirchner."
"Heavy speculation". No data that you can verify, nothing, just "speculation", specially for such a HUGE operation that may leave very few potential buyers on the game.
Resourcing to speculation and rumors is a very old trick from the press.
You're right. True deadbeats don't worry about paying back their debts.What debts are you talking about?
Just the opposite. I have a vested interest in seeing Argentina to continue to be backward, poor, and socialist.[/ Hunt99]
You continue calling socialist anything that doesn't match your criteria of how things should be managed. Whatever.
[QUOTE=Hunt99]If the country ever got its act together I would lose my favorite playground, where even a middle-class guy like me can pretend to be a rich guy like Carlos Menem.However, you don't seem very happy when refering to this issue of seizing the water and sewage company, which makes your above claim hard to believe.
Andres
"State assets", what are you a communist? Several of those "state" enterprises like YPF and the telephone co were turned into efficient and very profitable businesses once privatized.No wonder. The calling token was rised sevenfold after being privatized by MJ Alsogaray, and the 33% compensation fund to the elderly, eliminated.
Previously they were bureaucratic entities that had 10X more employees than necessary, required bribes, and did nothing but lose shitloads of money. A form of welfare.Exactly, and that scheme continued by artificialy inflating bills and blocking claims to the National Commission of Telecommunication through political contributions. That's a perfect example of how complex are socio-economic systems, which cannot be easily transplated from one country to another.
Menem stole a shitload of money - he wins, he is a superstar, he should be awarded a medal. A master of theives that robbed robbers. Welcome to the jungle.If you were a victim of the corralito, you wouldn't think so.
Andres
The population is well educated and education is more available in AR than in USA - its free, right?
You can talk about socioeconomic issues, but apparently there is no excuse for Argentina's not being a success. A difficult problem to fix.Academic education isn't enough to build a "successful" society.
If you studied Argentine history, you will find several reasons for Argentina being what it is.
Andres
Just reading a few comments and it is good to see everyone is on the subject. Consider what the problems were when Menem took over. Faced with hiper inflation, a military looking to take over, drug loads in the north and the existing congress with thier hands in everyones pocket. A police force full of vice lords, a SIDE that was trained my the Nazi and what more. Yes, in order to put it together he had to bribe, cut deals, allow so crazy stuff, but the counrty for tens years grew, had no inflation, jobs, high standard of living, and boy did it get development. New hotels, new factories, new farming, etc Yea, like the usa, he borrowed too long and too much and the world wide recession of 2001 caught him of target. Just as the usa dot com etc nearly killed us. So until your there trying to manage a bunch of crooks into allowing the country to grow cut some slack and just do not lesson to all the press looking for ab ad guy. Boy did he like women. Suggest you all read Peron and get some pervious insight into this country.
If you were a victim of the corralito, you wouldn't think so.Please can you define corralito Andres. I lived / worked thru it and have heard it 1000 times but I still don't know what is was. I accessed all necessary funds for personal / business use and noticed no problems.
I should mention that Ive never carried cash around in suitcases or buried it in my backyard or under my mattress. I think there was a 1000/ month cash withdrawl limit but that has no effect on me or a corporation.
I dont remember any problems making legitimate payments via check, transfer, etc (>90% of transactions).
Please can you define corralito Andres. I lived / worked thru it and have heard it 1000 times but I still don't know what is was. I accessed all necessary funds for personal / business use and noticed no problems.
I should mention that Ive never carried cash around in suitcases or buried it in my backyard or under my mattress. I think there was a 1000/ month cash withdrawl limit but that has no effect on me or a corporation.
I dont remember any problems making legitimate payments via check, transfer, etc (>90% of transactions)Corralito was a restriction in the withdrawal from banks, originally from ARS 1,000 per month, a measure enforced to delay the collapse of the peso peg to the Dollar.
Most people in Argentina make daily transactions in cash: Newspapers, bus-colectivo, Fruit store, Butchery, Grocery store, etc. These people significantly reduced their expenditures, and the first ones that felt that impact were the poorest, those who live outside of the banking system. Thus the onset of the loothing on the poor neighborhoods before De la Rua resigned.
The main idea of the corralito was to avoid people with savings and credit deposits in Pesos cashing them and running to buy Dollars, wreaking the banking system. And the facts support that: Before the corralito, the 1 Peso was worth 1 Dollar, while after it was 3.5 to 1.
Andres
Corralito was a restriction in the withdrawal from banks, originally from ARS 1,000 per month, a measure enforced to delay the collapse of the peso peg to the Dollar.
Most people in Argentina make daily transactions in cash: Newspapers, bus-colectivo, Fruit store, Butchery, Grocery store, etc. These people significantly reduced their expenditures, and the first ones that felt that impact were the poorest, those who live outside of the banking system. Thus the onset of the loothing on the poor neighborhoods before De la Rua resigned.
The main idea of the corralito was to avoid people with savings and credit deposits in Pesos cashing them and running to buy Dollars, wreaking the banking system. And the facts support that: Before the corralito, the 1 Peso was worth 1 Dollar, while after it was 3.5 to 1.
AndresNewspapers, bus-colectivo, Fruit store, Butchery, Grocery store, etc cost much less than the 1000/mo max cash withdrawl, which was and still is more than most Argentines make in a month anyway. Many larger grocers will accept plastic cards - I used them throughout the "crisis". Most major expenses can/could be paid via transfer or plastic, like rent/expensas/utilities. It was/is not necessary to take cash out of the banking system for the largest % of transactions. Many Argentines seem too stubborn to realize that and adjust, even wealthier ones. Tax evasion is another reason for some businesses only accepting cash.
A basket of goods that cost 200 pesos in Nov-01 cost exactly 200 pesos in Apr-02. Thus the peoples purchasing power declined by zero % and they lost nothing. The change in value of the peso against other currencies has no affect on this. If the Swiss Franc goes from 1.30/dollar today to 0.40/dollar tomorrow it doesnt affect me.
Now, a vacation abroad to Europe/USA/Japan did become 3x as expensive for peso holders/earners after the devaluation. Is that the "financial crisis" that people refer to? Ive personally lived thru much worse "crises" than that.
Rock Harders
03-29-06, 21:42
Moore,
You are forgetting about many items that were / are priced in United States Dollars. For whatever reason (currency instability, inflation, etc. Real estate in Argentina has long been priced in USD. That $100,000 AR apartment suddenly cost $300,000 AR to buy after the unpegging. The same goes for automobiles. Know of any Argentine car brands? They are all imported from France, USA, Japan, Germany or Italy, and the prices of the cars were suddenly 3x as expensive. Most electronic goods follow the same pattern. We all know that Argentina has an Romanian-like agrarian economy, so anything high tech, and thus imported shot up 3X in price.
The statement that the basic basket of goods, without inflation, did not shoot up much immediatly is probably true. Poor people only worry about getting food on the table, they never could buy houses, and they could dream on about buying a new car. What the crisis did was destroy the Argentine middle class, those people who, when the 1:1 peg was in effect, could buy a house, a car, and take an overseas vacation if they wanted to. Basically, they lived like many US middle class families live. Post-crisis, the number of middle class Argentines plummeted and now there is a small but rebounding middle class.
Suerte,
Dirk Diggler
Almost all cars here (Chrysler, Peugeot, Renault, Ford) are locally made in the Zarate area Dirk. Local cost base, duh. Did you think that 1997 Renault taxi that is falling apart and appears to have been manufactured in Budapest circa 1959 was imported from France!
I believe that many electronics/appliances are also made locally.
Regardless, these are luxury items that even Americans will cut down on during a recession. Relatively few Args even own a car.
Regarding house prices, owners are just living in a dream world if they think that their house is worth the same in US$ after the devaluation, but they can list their house and not sell it for as many years as they want. The economy was fully pesofied. I recently tried to buy gold at $35 per ounce but that artifical peg ended in 1974. Now its at $560 - now thats a loss. Nixon and the "director" of Fort Knox should be exhumed and hung.
Every existing loan/contract was pesofied by law to my knowledge. So if one did have USD and an existing obligation denominated in US$ (most were) they made out like a bandit. Everybody else that only had pesos was not affected. No gain, no loss. Their US$1000/mo lease was converted to 1000pesos, even though the contract explicitly states US$1,000.
So yes a vacation to Ibiza or an imported new BMW became 3X as expensive for peso holders. Such suffering!
Newspapers, bus-colectivo, Fruit store, Butchery, Grocery store, etc cost much less than the 1000/ mo max cash withdrawl, which was and still is more than most Argentines make in a month anyway. Many larger grocers will accept plastic cards - I used them throughout the "crisis". Most major expenses can / could be paid via transfer or plastic, like rent / expensas / utilities. It was / is not necessary to take cash out of the banking system for the largest % of transactions. Many Argentines seem too stubborn to realize that and adjust, even wealthier ones. Tax evasion is another reason for some businesses only accepting cash.
A basket of goods that cost 200 pesos in Nov.-01 cost exactly 200 pesos in Apr.-02. Thus the peoples purchasing power declined by zero % and they lost nothing. The change in value of the peso against other currencies has no affect on this. If the Swiss Franc goes from 1.30/ dollar today to 0.40/ dollar tomorrow it doesnt affect me.
Now, a vacation abroad to Europe / USA / Japan did become 3x as expensive for peso holders / earners after the devaluation. Is that the "financial crisis" that people refer to? Ive personally lived thru much worse "crises" than that.Do the math, and you will see that a family of 4 spent just in colectivos ARS 32 per week (4 x 5 x 2 x ARS 0.8) Add fruits, meat, dairy products, newspapers and the such and you easily get ARS 250 per week, which is ARS 1000 per month. You may have another experience but, from your own words, it is clear that you are "special" (not many people pay 500 salaries per month and pay their bills with plastic cards)
Only 8% of the grocery stores accepted cash cards. That's a fact that Visa and Mastercard reported during the corralito.
I wonder where you get that the purchasing power by late 2001 was the same as the one by April 2002.
Andres
Rock Harders
03-29-06, 23:49
Andres,
Moore just refuses to accept that "his" experience is not the experience that the common Argentine had to deal with during the corralito and its aftermath. "His" experience being drawing a (large? Salary from a Multinational corportation in US Dollars, having US based Credit and Debit Cards and accounts. Moore, I bet if "your" dollar deposits at Banco Rio had been pesofied, you wouldn't be such a corralito denier.
Dirk
Much of what Dirk writes is simply wrong, such as local DV debts being denominated in US$ and local cars being imported, also denominated in US$. Anyone with the slightest inkling of experience/knowledge here (or even common sense) knows better than that. When reading his posts, keep in mind that he has no idea what he is talking about and that he makes blatantly false statements out of thin air. He probably doesnt even know what "denominized" is supposed to mean when he writes it.
Dirk also seems to not have the slightest clue of how supply/demand works or how market values, such as real estate, are determined. Another thing to keep in mind when reading his posts.
And he calls experienced local people who know exactly what theyre talking about "knuckleheads", among other slurs. I could and should tear Dirk 100 new ones right now (actually been holding off), but that would be conduct unbecoming of a civilized forum member. Besides, its been more entertaining than irritating watching him repeatedly showcase his ignorance. He's set yet another precedent since posting his Chile paper from Delaware High.
Rock Harders
03-30-06, 01:38
Moore-
Instead of going off on a ridiculous and clearly angry tangent, why don't you specify exactly what these "blatantly false statements out of thin air" are? Toyota manufactures many of its cars in Kentucky, among other places in the US, yet is the car still not considered imported? Volkswagen manufactuers many of its US market cars in Puebla, Mexico however it is not considered a Mexican car, it is a German car. Of course today the world economy is globalized and lines of nationality are blurred but it is commonly accepted that a Ford is an American car and a Peugot is a French car, no matter where it is actually assembled. Ford is owned by Americans who want equivalent dollars for their cars, just as Peugot's parent co. Wants the equivalent in Euros for their car. A Volkswagen Golf here, clearly not a luxury car by an measure, cost over $40,000 AR to start, roughly the equivalent of a $14,000 USD low end Golf in the USA. Pre-crisis, that Golf would have cost $14,000 AR, so where is the "plain wrong here"?
As far as real estate values go, look in the Clarin clasificados, rents are in pesos, property for sale is in USD. In August 05 a female friend of my family bought a beautiful 5 bedroom apartment in Barrio Norte on Parana fronting Plaza Vicente Lopez for $300,000 USD, I bet the apartment was not worth 3x as much pre-corralito, because USD has been the medium for real estate prices, and prices held steady other than normal real estate fluctuations.
Why don't you actually refute my statements with factual information instead of making up asinine blanket dismissals because you refuse to accept the experiences of people other than yourself.
Suerte,
Dirk Diggler
Given that Moore apparently still has to work for a living, apparently his own knowledge of how supply / demand and other economic expertise touted is limited.
I'm still more curious about how his photo gal is rated by himself as a 5, while no Madahos girls in the 10 trips he claims has ever been above a 2. Perhaps it's a fat fetish.
As far as real estate values go, look in the Clarin clasificados, rents are in pesos, property for sale is in USD. In August 05 a female friend of my family bought a beautiful 5 bedroom apartment in Barrio Norte on Parana fronting Plaza Vicente Lopez for $300,000 USD, I bet the apartment was not worth 3x as much pre-corralito, because USD has been the medium for real estate prices, and prices held steady other than normal real estate fluctuations. I think there was a huge drop in real estate prices in dollars during the crisis. So much so that even a low-roller like me gave some serious thought to swooping in and buying up some property. I recall looking at one property in Palermo Chico in 2002-03 which was quite similar to Jackson's old mansion which was available for US$500K. The same type of property in the same area is probably back up to the US$1M range today.
Of course, it's difficult to find buyers for such properties in the absence of a mortgage market. That illiquidity, when combined with the propensity of the Argie government to steal from foreigners, was enough to dissuade me from making that speculation. In hindsight it probably would have worked out, but hindsight is always 20/20.
I say this because Moore's analysis of the corralito is firmly based on hindsight. At the time, people were panicking and were desperate because of the uncertainty. For him, and especially for him in hindsight, it wasn't so bad. Of course, he wasn't a part of the Argie middle class which was wiped out by its government's ever-present stupidity.
It was a great time for somebody who, like me and like most of the posters on this board, is paid in dollars and had no real stake in the Argentine economy. Prices dropped 70% in dollar terms and the greenback was king. I think that this fact accounts for the divergence of opinions in this thread.
Whats next - Argentine students storm the US Embassy and take all employees hostage for 444 days.
Whats next - Argentine students storm the US Embassy and take all employees hostage for 444 days.It is not Iran but Argentina has problems and the goverment is not very bright (although which one was?)
Bairespirata
07-08-06, 13:04
There were a lot of time and opportunities to change the economic policies during Menems regime. The opposition and intellectuals could warned and protested against the steadily increasing external debt. People could have run into the streets before the catastrophe was a fact. But nobody did nothing because everone loved the peg to the dollar. Have anybody heard an Argentine feeling sorry about those foreign people who lost 75% of their saving due to the Argentine default?
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