Archive for the ‘Argentina’ Category

Too Early to Fall for Argentina

| October 27th, 2014 | No Comments »
Barrons

By Dimitra Defotis

A handful of hedge funds and private-equity investors have started to tango with Argentina’s capital markets. No one can be quite sure where the dance will end.

The attraction: The prospect of an October 2015 election that could bring big changes and a boost to the markets. Left-leaning President Cristina Fernandez de Kirchner, who together with her late husband, Nestor Kirchner, has ruled the country since 2003, will step down because of term limits. She will leave an economic mess. In Argentina, inflation is at about 40%–though the state figure is 30%–and the U.S. dollar fetches 15 pesos on the black market, almost twice the official rate. The country is in default on a chunk of its sovereign debt, a situation that began in 2001, was nearly resolved in a 2005 restructuring, and came to a head again in July when holdout U.S. ... Read More

An “invisible” Iran in the Western hemisphere: America’s strategic blind spot

| October 22nd, 2014 | No Comments »
The Hill

By Rep. Jeff Duncan(R-S.C.)

Recently, we have seen a hydra of terrorist organizations wreak havoc around the world. ISIS continues to destabilize the Middle East and has ambitions to expand globally. Al Qaeda recently expanded its operations to India and had plans to attack a U.S. aircraft carrier on 9/11. Boko Haram kidnapped 50 more women in Nigeria and continues pursuing an Islamic caliphate in Africa. Only a year ago, Al Shabaab attacked Westgate Mall in Kenya, and Hezbollah attempted several assassinations around the world. Such an uptick in terrorism was reflected in an April report published by the State Department, which found terrorist attacks had increased 40 percent worldwide since 2013.

As the Obama administration stumbles its way toward a strategy to confront ISIS, some have suggested that the US could try to enlist help from Iran to combat this threat. Specifically, Secretary of State John Kerry said on September 19 ... Read More

Russia Today, Argentina Tomorrow

| October 21st, 2014 | No Comments »
The New York Times

By FABIÁN BOSOER and FEDERICO FINCHELSTEIN

Earlier this month, the president of Russia, Vladimir V. Putin, and the president of Argentina, Cristina Fernández de Kirchner, took part in a video conference to celebrate a new television partnership. Under the terms of the deal, the Russian-owned channel RT (formerly known as Russia Today) will soon begin broadcasting Spanish-language news in Argentina. Mrs. Kirchner hailed the development as a means for Argentines “to understand the real Russia,” as well as to help Russians learn about “the real Argentina, unlike the way the international media and the so-called national media portray us.”

Buenos Aires currently enjoys warm relations with Moscow for a variety of reasons. Argentina is looking to Russia for help in upgrading its energy sector, including a possible partnership with the Russian giant Gazprom to develop oil and shale gas ... Read More

Argentina Sale Seen by Goldman as Buoying Informal Peso

| October 20th, 2014 | No Comments »
Bloomberg

By Katia Porzecanski

Argentina’s first dollar-linked bond sale in at least a decade may help shore up the peso in the nation’s informal currency markets, according to Goldman Sachs Group Inc.

The Economy Ministry said in a statement Oct. 17 that the government will take offers for as much as $1 billion of two-year securities Oct. 23-28. The bonds will be denominated in dollars and pay holders in pesos at the official exchange rate, with annual interest of 1.75 percent. Argentina hasn’t sold debt in international markets since defaulting on a record $95 billion in 2001.

The securities, which will be sold locally, offer protection against a peso devaluation and are being offered as the government tightens controls on informal currency markets. Mauro Roca, a Goldman Sachs economist, said today in a research note to clients that the sale will help strengthen the peso in the so-called ... Read More

Argentina Planning $1 Billion Dollar-Linked Bond Sale

| October 20th, 2014 | No Comments »
Bloomberg

By Katia Porzecanski

Argentina plans to sell as much as $1 billion of dollar-linked bonds this month, the first sale of its kind by the sovereign in at least a decade.

The country, which hasn’t sold debt in international markets since defaulting on a record $95 billion in 2001, will take offers on the two-year local securities beginning Oct. 23, the Economy Ministry said in a statement Oct. 17. The bonds will be denominated in dollars and pay holders in pesos at the official exchange rate, with an annual interest rate of 1.75 percent. The sale will close Oct. 28.

The securities offer protection against a peso devaluation and are being sold as the government tightens controls on informal currency markets. Argentines who can’t or don’t want to get government permission to access U.S. currency pay as much as 73 percent more for dollars in the black market.

“Despite the capital gains in pesos ... Read More

Argentina Black Market Proving Irresistible to Tourists

| October 17th, 2014 | No Comments »
Bloomberg

By Charlie Devereux and Lucia Baldomir

Ana Laura Estefania, a 29-year-old Uruguayan, decided to vacation with her family in Buenos Aires last month after the tumble in the Argentine peso made everything from eating out to hotels more affordable.

“We wanted to go somewhere with my parents and all the family,” Estefania, the owner of a publishing company, said by telephone from Uruguay’s capital of Montevideo. “Buenos Aires is close and we thought it would be cheaper because of the exchange rate. Eating is cheap, transport is cheap, accommodation is cheap, everything is much cheaper.”

Like many of the tourists traveling to Argentina, Estefania turned to the illegal black market to take advantage of the peso’s plunge after the nation defaulted in July. There, the local currency costs 73 percent less to obtain than at the official exchange rate. That’s depriving the central bank of the dollars tourists are bringing into the country ... Read More

Rising Dragon? The Chinese Mafia Threat in Latin America

| October 16th, 2014 | No Comments »
From In Sight

By David Gagne

Chinese mafia operations in Latin America are little understood, but a recent report on these groups in Argentina illustrates how they make their presence felt via extortion, human smuggling rings, and the occasional murder. As China deepens its economic relationship with Latin America, it’s possible these mafias may become ever more prominent.

Authorities in Argentina have attributed 31 murders over the last five years, and four in 2014 alone, to seven Chinese mafias operating in the country, reported La Nacion. These mafias reportedly earn revenue by extorting businesses within the Chinese community, and resort to violence when owners do not comply with their demands.

In at least three of the 2014 cases, the victim did not appear to have been robbed, leading authorities to believe they were killed after running afoul of criminal groups in the Chinese community. According to La Nacion, the Chinese mafias (also known ... Read More

El legado de Insulza y el futuro de la OEA

| October 8th, 2014 | No Comments »
El Pais

POR EZEQUIEL VÁZQUEZ-GER

Corría Febrero del año 2011. Un grupo de estudiantes en Venezuela había decidido iniciar una huelga de hambre en protesta contra el gobierno de Hugo Chávez. En Washington, junto con un grupo de estudiantes venezolanos, decidimos apoyar la protesta pidiendo un pronunciamiento de la Organización de Estados Americanos (OEA). Lo hicimos a través de decenas de cartas dirigidas a cada uno de los embajadores, notas de prensa, y una protesta frente al Edificio principal del organismo, previo a una sesión de su consejo Perrmanente.

Terminada esta sesión, el secretario general José Miguel Insulza nos otorgó una audiencia privada, en la que nos dijo: “Me compadezco con ustedes, yo también sufrí una dictadura en carne propia y tuve que refugiarme en el exterior. Pero tienen que entender, a Chávez no lo van a vencer con cartas, Chávez es un dictador, y en Venezuela hay una dictadura militar”.

Esta anécdota sirve para describir el ... Read More

Latin American Growth to Slow, World Bank Says

| October 8th, 2014 | No Comments »
Wall Street Journal WSJ-01 By RYAN DUBE LIMA, Peru—Latin America is on track this year to post its slowest rate of annual growth since 2009, when the global financial crisis began to be felt in the region, the World Bank said Tuesday.

The bank cut its growth forecast for the region by nearly half to 1.2%, following expansions of 2.4% and 3% in the previous two years. In its semiannual report on Latin America and the Caribbean, the World Bank said the region could grow 2.2% next year, but cautioned that it was still unclear whether the current downward cycle has bottomed out.

“We do not know if this deceleration has hit bottom, or if there is further deceleration to come,” said Augusto de la Torre, the World Bank’s chief economist for Latin America, in a telephone interview. But growth, he said, “is not going to be what it used to be in the past decade, partially because ... Read More

Argentina’s Contempt for Its Citizens

| October 7th, 2014 | No Comments »
Bloomberg

By The Editors

In the latest episode of Argentina’s default saga, the U.S. judge presiding over its dispute with bondholders has declared the country to be in contempt of court. Last week’s ruling wasn’t especially surprising and isn’t likely to be especially consequential. More deserving of attention is the contempt that Argentina’s government is showing its citizens’ economic welfare.

Since the country was largely cut off from international capital markets following its default in July, the government of President Cristina Fernandez de Kirchner — never a paragon of orthodox policy making — has resorted to even more self-destructive coping measures. As the foreign currency reserves that Argentina needs to pay for imports have diminished, the government has issued new rules meant to keep dollars from leaving the country. Airlines now have to submit absurdly detailed information about passengers on international fights, for example, and the tax rate on foreign credit-card purchases is ... Read More

Andres Oppenheimer: Latin America’s forecast for 2015: not good

| October 6th, 2014 | No Comments »
The Miami Herald

By Andres Oppenheimer

The International Monetary Fund (IMF) is scheduled to release its much-awaited 2015 economic projections for Latin America next week, and — judging from what I heard in an interview with the IMF’S chief economist for Latin America — there won’t be much to celebrate.

Alejandro Werner, head of the IMF’s Western Hemisphere department, told me that the region is not likely to emerge from its current economic slowdown in 2015, nor in 2016. What’s worse, some economies — such as those of Argentina and Venezuela — are likely to keep shrinking next year, he suggested.

Werner did not give me official figures, which will be released at the opening of the IMF and World Bank annual meeting of the world’s central bankers and finance ministers starting Thursday in Washington. But he sounded pretty pessimistic about the possibility of a significant recovery from the mediocre 1.5 percent to 2 percent growth ... Read More

Thumbs down: The resignation of the Central Bank’s governor adds to the gloom

| October 3rd, 2014 | No Comments »
The Economist

THOSE baffled by the Argentine economy could do worse than listen to Puff Daddy. Ask what ails the country and the answer will echo the rapper’s ode to the 100-dollar bill, “It’s all about the Benjamins”. Had the Argentine government resolved its row with “holdout” investors, rather than defaulting in July, it might now be able to tap international markets for hard currency. Instead it is struggling to manage its meagre reserves, which hover at around $28 billion. The economy is stagnant, the peso is falling in unofficial markets, and inflation is rising.

The chances of a happy outcome to this situation worsened on October 1st, when Juan Carlos Fábrega, the governor of the central bank, resigned after less than a year on the job. Mr Fábrega had long butted heads with Axel Kicillof, the country’s economy minister. Battling an inflation rate that is expected to reach 40% this year and ... Read More

ARGENTINA CRASHES

| October 3rd, 2014 | No Comments »
Business Insider

By Linette Lopez

Argentina’s Merval stock index is down about 7% Thursday after taking an 8% beating Wednesday as well.

The selling off is all likely due to Wednesday’s news that the country’s Central Bank head, Juan Carlos Fabrega, resigned from his post. The rumors that he was out started swirling around in the Argentine media Wednesday morning.

Fabrega was in favor of negotiating with the group of hedge fund creditors whose lawsuit for over $1.3 billion in sovereign debt tipped the country into default at the end of July. Reports also indicated that he did not get along with Axel Kicillof, the Argentina economy minister who has a close relationship with President Cristina Fernandez de Kirchner.

Fabrega was replaced by securities regulator Alejandro Vanoli.

Check out the carnage below. Over the last 5 trading days, the Merval has fallen over 13%:

Fabrega had helmed the Central Bank for only about a year. In that year, however, he oversaw ... Read More

Argentina central bank governor resigns amid economic woes

| October 2nd, 2014 | No Comments »
BBC

Argentina’s central bank governor Juan Carlos Fabrega has resigned after less than a year in office.

He will be replaced by Alejandro Vanoli, who analysts say is more in tune with the economic policies of President Cristina Fernandez.

Argentina is facing a raft of economic problems including high inflation at around 40% and a row with US creditors which has sparked a debt default.

Shares earlier fell 8.2% amid fears the governor was poised to resign.

Mr Fabrega had presided over an 18% devaluation of the peso in January this year.

He had also spoken out against the government’s heavy fiscal spending and advocated tougher measures to curb inflation.

Mr Vanoli, who is set to replace him, is currently the head of the National Securities Commission, the regulatory agency for stocks and other securities.

Hedge funds

Argentina, which is Latin America’s third-largest economy, is battling to avoid paying its bond creditors in full.

A US court has ... Read More

Argentina deposits debt payment in defiance of US ruling

| October 1st, 2014 | No Comments »
BBC

Argentina has deposited $161m (£99m) in bond interest payments with the state-controlled Nacion Fideicomisos bank, in an effort to skirt US court rulings.

The country had previously kept its funds with US-controlled Bank of New York Mellon.

The move comes a day after a US judge ruled Argentina was in “contempt of court”.

That ruling stated Argentina must repay two US hedge funds before repaying other bond holders.

“By making this deposit, Argentina confirms once again its unshakeable commitment to meet its obligations to bondholders,” said Argentina’s finance ministry in a statement.

Argentina is attempting to pay its bondholders in a second tranche of debt known as the Par series so as to avoid defaulting once more.

However, experts caution that simply placing the debt payment in a non-US controlled bank is probably not sufficient to allow Argentina to avoid a US court ruling barring it from repaying certain debts above others.

Long ... Read More

Argentina’s Contempt

| October 1st, 2014 | No Comments »
Wall Street Journal WSJ-01 South America’s leading deadbeat nation sets another precedent.

Monday’s ruling by U.S. District Judge Thomas Griesa to hold the Republic of Argentina in contempt of court isn’t entirely without precedent. Russia fell afoul of an American court last year in a dispute involving custody of Jewish religious books. The Democratic Republic of Congo was held in civil contempt in 2009 for failing to comply with a district judge’s discovery request.

Yet the Argentina ruling is in a class by itself. “We all know that to hold a party in contempt of court is a rare thing. I was requested to do so at an earlier stage and declined,” Judge Griesa said Monday. But he said he was compelled to recognize “what is really the illegal conduct of the Republic involving the attempt to unlawfully change and depart from the provisions of the governing injunction.”

The judge is referring to the effort by the ... Read More

Juez de Nueva York declara a Argentina en desacato

| September 30th, 2014 | No Comments »
El Nuevo Herald

POR LARRY NEUMEISTER

NUEVA YORK 

Un juez federal de Nueva York declaró el lunes a Argentina en desacato por rehusarse a pagar 1.500 millones de dólares a fondos de cobertura estadounidenses en una decisión que Buenos Aires consideró “violatoria del derecho internacional”.

El juez federal Thomas P. Griesa hizo el anuncio después que un abogado de esos fondos, encabezados por NML Capital Ltd., del multimillonario inversionista Paul Singer, alegara que el país desafió abiertamente durante más de un año la orden de pago que había emitido el tribunal.

El juez dejó pendiente cualquier sanción contra el país hasta que se realicen audiencias adicionales.

El gobierno argentino dijo que la decisión de Griesa carece de efecto práctico “salvo proveer de nuevos elementos que sirvan a la difamante campaña política y mediática llevada adelante por los fondos buitre” contra el país.

En un comunicado emitido en Buenos Aires, el Ministerio de Relaciones Exteriores de Argentina afirmo que el ... Read More

Judge Grants Temporary Stay in Argentina Default Case

| September 29th, 2014 | No Comments »
The New York Times

By Alexandra Stevenson

A group of New York hedge funds that sued Argentina is now asking a New York court to lower the temperature a little on the long-running and acrimonious dispute.

The group, led by Paul E. Singer’s NML Capital, appealed on Friday to Judge Thomas P. Griesa of the Federal District Court in Manhattan to allow Citigroup to make a $5 million payment to bondholders by a Tuesday deadline.

After more than two hours of debate, Judge Griesa agreed to a temporary stay on his previous order that had blocked the payment. He also called for another hearing in 30 days to consider arguments from Citigroup that its activities related to the Argentine bonds were exempt from his rulings.

“We do not want to be here over and over again,” Judge Griesa added, referring to what has become an increasingly messy case.

One of the judge’s earlier ... Read More

Argentina calls holdout funds ‘terrorists,’ says Germany ‘hostile’

| September 25th, 2014 | No Comments »
CNBC-01

Argentine President Cristina Fernandez accused hedge funds suing the country for full repayment of defaulted debt of practicing “economic and financial terrorism,” heightening the rhetoric in the country’s years-long legal battle with the investors.

Speaking before the United Nations General Assembly on Wednesday, Fernandez said “terrorists are not only those who set off bombs, but also those who destabilize economies, causing hunger, misery and poverty.”

The comment came just hours after Fernandez’s cabinet chief Jorge Capitanich accused Germany of having a “hostile attitude” toward Argentina’s debt restructuring effort, citing an advertisement by the hedge funds which quotes a German official criticizing Argentine policy.

Both flights of rhetoric stem from a case that has become a rallying cry for Fernandez, who often characterizes the funds as “vultures” out to wreck Argentina’s finances in their pursuit of astronomical profits.

“The vulture funds,” Fernandez told the General Assembly, “are ... Read More

Fernández despotrica contra fondos buitres en ONU

| September 25th, 2014 | No Comments »
El Nuevo Herald

NACIONES UNIDAS - La presidenta argentina Cristina Fernández no ahorró adjetivos para condenar a los “fondos buitre”, el enemigo número uno de su gobierno, y los acusó de ejercer “terrorismo económico y financiero” durante su presentación del miércoles ante la Asamblea General de las Naciones Unidas.

Fernández dedicó la primera mitad de su discurso a los fondos de cobertura que motivaron un default técnico de su país y agradeció a la Asamblea General por la sanción de resolución 68/304 del 9 de septiembre, de abocarse a la creación de una convención multilateral que genere un marco jurídico obligatorio en materia de restructuración de deuda soberana de todos los países.

“Cuando se debe el 161% del PBI, la culpa no es sólo de los deudores”, sostuvo la presidenta argentina. “Asumimos la responsabilidad, pero pedíamos que el Fondo Monetario Internacional y los acreedores que habían prestado a tasas usureras también asumieran parte de la responsabilidad ... Read More

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