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Argentina needs an “urgent change of course” and better relations with financial markets

Wednesday, October 8th 2014 - 07:51 UTC
Full article 44 comments

The Argentine economy needs an urgent change of course which would have the effect of reestablishing normal relations with the financial market, a crucial step to open a maneuvering space in an ever more complex environment, suggested Augusto de la Torre, World Bank chief economist for Latin America. Read full article

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  • reality check

    There is no date for disbursement of WB funds for Argentina.

    Says it all really.

    Oct 08th, 2014 - 08:05 am - Link - Report abuse 0
  • Conqueror

    I expect 'proper' countries will continue to block loans to argieland. Nobody you should listen to this De la Torre clown. For him, it's all about 'his' economic system.

    If argieland quit wasting everybodies time and PAID its debts........!

    Oct 08th, 2014 - 08:40 am - Link - Report abuse 0
  • reality check

    He knows who he is “humbly” dealing with though.

    It's not what you say to KFC, it's how you say it!”

    Oct 08th, 2014 - 08:50 am - Link - Report abuse 0
  • Captain Poppy

    And there will not be a date as long as developed nations have a voice in that disbursement.....and as long as Kirchner is in office.

    Oct 08th, 2014 - 10:24 am - Link - Report abuse 0
  • ChrisR

    “World Bank chief economist for Latin America”

    No use to TDC, they need a team of hitmen to 'take care' of the 15M Peronistas.

    Execute the top 10% who are embedded like the blood suckers they are in the body politic and there would be NO Peronistas left.

    Oct 08th, 2014 - 10:53 am - Link - Report abuse 0
  • GALlamosa

    Looks like he is part of the growing conspiracy. How long until a Kiciloff inspired CFK rant about the World Bank being anti Argentine, and only our great nationalistic project will save us. Could almost write it myself....now then, what am I doing after dinner.....

    Oct 08th, 2014 - 11:22 am - Link - Report abuse 0
  • RICO

    Expect him to be called in by the foreign affairs office for a lecture just like the US ambassador when he said the same thing......oh they can't. Exactly how many people have to say the same thing before the Kirchnerite government concedes they are right.

    God could come down on a cloud from heaven to tell this story and he would be accused of being in league with the vultures and not able to understand the Argentine people or their situation.

    Oct 08th, 2014 - 12:09 pm - Link - Report abuse 0
  • yankeeboy

    When the approval docs go around WB IDB all the ARG projects are checked with “Pending Review”.
    Arg will fail their Feb 2015 review at the IMF, they will be put on a path to expulsion, IDB WB IFC etc etc etc will not be able to disburse and will have to take similar action as the IMF. All of the Int'l banks, financial orgs require the country to be in “good standing” with the IMF to maintain memberships in the other orgs.

    The going rate for an Rg bond is estimated at 14-16%.
    Which is higher than most USA credit card holder rates.
    Bahahahaha

    And if you want this guy's polispeak translated it is simply PAY UP LOSERS.

    Oct 08th, 2014 - 12:36 pm - Link - Report abuse 0
  • CabezaDura2

    Piss off De la Torre we have being there before and you can stuff your loans where the Sun doesn't shine. How many curruption cases has the WB being involved with Argentine officials ??

    All these globalist financial instittions are part of the problem. They shuld be dismantled and abolished.

    Argentina doesn't need the WB, IMF, IDB and others... Returning to them will mean not solve the problems that caused us to be in the current situation we are in now.

    Its simple if you dont like paying debts dont get yourself indebted.

    Argentina has a history of governmental deficit for more than half a century. The next gov't needs to work on competetivity, rule of law, massive reducion of the State burden on private sector, bring back free market laws of the 90s, privatization. Its the Statist Class of Argentina and many others all around the world that are the problem and sign the national budgets each year in their respective parliaments.

    If Argentina returns to the financial markets the tap will open again and there will be no urge nor reason for the Statist class to cut back.

    Oct 08th, 2014 - 01:25 pm - Link - Report abuse 0
  • yankeeboy

    9. I don't think you have to worry about loans from any organization for the medium term. If Arg gets booted from the IMF they'll be booted from the rest of them in short order.
    I have a feeling the USA is trying to push this expulsion out until they see who the next Prez will be and if they are as crazy as the current harridan. It they are you'll see Arg booted from most every Int'l org and the World's financial community it short order.
    You are right and it may be the best thing to have happened to your country in 75 yrs. You might be a little cold and hungry while it plays out though.

    Boy CFK is eyeing the stored grains like it is her last gasp of oxygen. I will be curious to see how this rolls out. It might get really fun soon.

    Oct 08th, 2014 - 01:36 pm - Link - Report abuse 0
  • Nostrum of NostrolL

    In the 90s ARG was 1/3 of of emerging market value, and had not “maneuvering” room. F--- off Torres.

    Oct 08th, 2014 - 01:57 pm - Link - Report abuse 0
  • CabezaDura2

    10. But we all know that Massita and Macri will return to the capital markets. They will do whatever it takes. Its the only way they can govern in a stable way with out paying to much political capital in the first years by cutting on the populist deficit and dismantling of the monsterous Argentine State

    Oct 08th, 2014 - 02:23 pm - Link - Report abuse 0
  • Nostrum of NostrolL

    We don't need the markets. Don't eat the fantasy.

    Oct 08th, 2014 - 02:27 pm - Link - Report abuse 0
  • yankeeboy

    12. They can try, there's always money out there for a price. There's a lot of structural things that must happen before you're ready to issue bonds and unless the USA wants the IMF to help you guys out I doubt it will happen.
    There's absolutely no political upside/will for the USA to help Argentina and we're your only hope.

    By the time the elections roll around you may be into hyperinflation. So who knows how this will roll out. It just to hard to forecast out that long in your country.

    Oct 08th, 2014 - 02:38 pm - Link - Report abuse 0
  • owl61

    Is there a word for someone who gets off when others suffer hardships?

    Oct 08th, 2014 - 02:45 pm - Link - Report abuse 0
  • CabezaDura2

    14.

    I dont know. One of the principles of American foreign policy is stability first. I think they will throw Massita or Macri the lifejacket for them to do a typical “one step foward and two steps back” administration, unless the Victory Front is still a credible menace for 2019...

    Its just 1.5 Bn in their way to settle with the holdouts, I dont know if they will be handed with a cross default by then, but they can easily pay for it.

    Oct 08th, 2014 - 02:57 pm - Link - Report abuse 0
  • yankeeboy

    16. But we don't need Argentina to be stable. It falling apart has no contagion to the countries we care about in the region. The spillover may only be a slight problem for Brazil and we want an FTA with them. What better way to get it if all the trade has dried up with Argentina?
    2016 is a long way away.
    I don't see how you make it through 2015 with the huge amounts of payments that are due in 2015. I am pretty sure you'll default on everything, devalue then go into hyperinflation and depression.
    I don't see any other outcome.

    Oct 08th, 2014 - 03:04 pm - Link - Report abuse 0
  • Stoker

    #15
    The word is schadenfreude....and I am guilty of it too ;-D
    https://www.youtube.com/watch?v=VPmsYOBQu7E

    Oct 08th, 2014 - 03:11 pm - Link - Report abuse 0
  • CabezaDura2

    17.
    It comes down to how much money do they really have in the BCRA. If they are not paying the tankers in Bahia Blanca because they are prioritizing the US$ for creditors or they simply dont have the money cash in hand.

    That would be the perfect storm. But I dont see the US happy aboout Argentina becoming a net narco exporter, falsifier and cartels taking over and threatening other regional countries. Having said that there's not much the next President will be able to do in that field

    I think that the Hag has more lifes than a cat and can stretch the economy too unbelievable limits to find one next money source to clean. You cant take away fom her the fact she has come this far and its likely she hands over the bomb with one or two seconds to Macri before the blast.

    Oct 08th, 2014 - 03:28 pm - Link - Report abuse 0
  • Captain Poppy

    Wednesday, 08 October 2014 | 00:00
    LNG Ships Accrue Off Argentina as
    Ships loaded with liquefied natural gas are lining up off the coast of Argentina (YPF:US) after the government overshot winter orders, with a lack of storage facilities forcing the nation to pay daily fees to each vessel.

    The Polar Spirit, Iberica Knutsen and Arctic Spirit -- scheduled to unload gas cargoes on Sept. 23, 27 and 30, respectively -- remain anchored in Escobar port near Buenos Aires, ship transmissions captured by IHS Fairplay on Bloomberg show. Further south at Bahia Blanca, the Lobito and British Ruby are yet to dock, missing their respective Oct. 1 and Sept. 29 unloading dates, the data show.
    The delays imply a daily fine of $15,000 a ship, the company official said. Since its nationalization in 2012, YPF is in charge of organizing the international tenders for LNG and obtaining the best price, the company official said.

    Argentina will post a fiscal deficit of 1 percent in 2014 as it plans to spend around $8.5 billion to import energy that’s later sold at below-market prices to industry and residential consumers, Economy Minister Axel Kicillof said Sept. 15 during a presentation of the 2015 budget.
    Credit Closed

    While the central bank releases the dollars, it’s state-owned Empresa Nacional de Energia SA, or Enarsa, that decides which invoices are paid, a bank official, who isn’t authorized to speak publicly, said. John Lees, a press officer at Enarsa, declined to comment when contacted by telephone.

    Argentina’s sovereign risk excludes the nation from access to long-term LNG contracts and forces it to buy in the more expensive spot market, Montamat’s Scheimberg said. Argentina defaulted on July 30 for the second time in 13 years. Standard & Poors rates the country SD for selective default.

    “Nobody gives Argentina long-term credit,” he said. “If they could buy long-term contracts you’d be able to sell those ships in the spot market at a fair price. But if you buy in the spot, t

    Oct 08th, 2014 - 04:29 pm - Link - Report abuse 0
  • ChrisR

    @ 15 owl61
    “Is there a word for someone who gets off when others suffer hardships?”

    Cristina (you know who).

    Oct 08th, 2014 - 04:36 pm - Link - Report abuse 0
  • Jonaz_BsAs

    “We don't need the markets. Don't eat the fantasy.”

    The Argentine delusion in a nutshell.

    The market is the people. Replace “market” with “people” - then try to comprehend the utter stupidity of the above quoted sentence.

    Oct 08th, 2014 - 04:41 pm - Link - Report abuse 0
  • Tik Tok

    Please continue the news story Captain Poppy, interesting. How many dollars does the LNG on one ship cost to Enarsa?

    Oct 08th, 2014 - 04:44 pm - Link - Report abuse 0
  • Nostrum of NostrolL

    @22

    Incorrect. The markets are thieves, speculators, swindlers, embezzlers, charlatans, mulct-seekers, cyber-robbers, liars, Ponzi-schemers, and foreigners.

    People traded it with each other long before the debt markets existed.

    And if Argentina did in fact bring its house in order, cut spending massively, and did things to grow the economy faster, then we would have surpluses again. So why would be need to tap debt then anyway?

    So you see, either way, we don't need it. If we are heavily in debt, we don't need more of it. And if we have a balanced budget, we don't need it either.

    Oct 08th, 2014 - 04:51 pm - Link - Report abuse 0
  • CabezaDura2

    24.
    Good point

    But they are not free markets Tob,y the governments on one side and the institutions like IMF, IDB and WB are not private banks dealing with private customers.

    This guy Torres is a bureaucrat. Like all globalists “liberals” organizations are.

    Oct 08th, 2014 - 05:05 pm - Link - Report abuse 0
  • Nostrum of NostrolL

    The whole system is rigged, and corrupt. That's why I have been saying in ”livelier' terms for 2 years now.

    The reason I stopped being civilized is because the foreigner here not only freely insult and humiliate Argentines with ridiculous insult, but also insult my intelligence by suggesting all these institutions are needed. There have been MORE crises since the IMF, World Bank, and modern debt markets existed than less.

    Oct 08th, 2014 - 05:09 pm - Link - Report abuse 0
  • CabezaDura2

    Its liberal Statist class that rules everywhere. These institutions are run after all by government officials .

    And if you have seing the light I dont understand why you dont send to hell a the same kind of ellitest Public Relations b__ch that is paid by the tax payer to fool about in world, snoop around peoples views come tell you how apparently succesful she is and take deelight in giving you therapist lessons all the time.

    Oct 08th, 2014 - 05:37 pm - Link - Report abuse 0
  • Jonaz_BsAs

    No. Not a good point. Not at all.

    The debt market started the day one buyer said to one seller: “Listen, I can only pay for five today. give me 10 and I'll pay you a little extra tomorrow.”

    The debt market is human nature since 4000+ years ago.

    Oct 08th, 2014 - 05:49 pm - Link - Report abuse 0
  • CabezaDura2

    28.
    Financial institutions like these exist only since Bretton Woods.
    The debts that Argentina contracted in its early stages of independence like Baring bros where private and where eventually paid.

    Their existance almost bars any limitations to government expenditure and deficit as sovereign nations have no limitations in placing debt upon future generations just for a election and another governmet term.

    Oct 08th, 2014 - 06:03 pm - Link - Report abuse 0
  • Jonaz_BsAs

    The debt market, like most other markets, is for adults. Someone tell Axelin.

    Oct 08th, 2014 - 06:11 pm - Link - Report abuse 0
  • CabezaDura2

    30.
    Holdouts and bondholders need to get paid bacause that is what the moral and right thing to do. But Argentina must learn to be fiscally responsable. The existance of these Debt “markets” (when they are actually far from being real free markets) will only produce a State class that kicks the can down the road.

    Oct 08th, 2014 - 06:14 pm - Link - Report abuse 0
  • Jonaz_BsAs

    Yes, when the State are children, it will.

    Oct 08th, 2014 - 06:19 pm - Link - Report abuse 0
  • yankeeboy

    29. They used to use gun boats to collect past debts too.

    Not a bad solution either.

    Toby, Anyone, any entity, any country can live within their means, debt doesn't mean tragedy. I have a 30 year mortgage on my place, its at 2.75%, I now pay less than a 1bd condo in the same area. So tell me how that is bad. I also use credit cars for every single transaction, they loan me the money for the month at no cost and I pay it back 30 days later, how is that bad? Should I carry around 10K all the time? And if you think that why?
    Argentina could live within its means, you'd be back to using horse and buggy with crumbling road and decades old technology that don't parts any longer. Argentina only very recently has made something at a price people wanted to buy. But the market has changed and that's not going to be possible for a few years again. So how do you propose you buy fuel and pay for imports to mfg cars?
    Psst you can't
    That's why next year is gonna be really really bad.

    CD, I think BCRA has been working on a float and that float is gone. There's no more money left. I doubt they can make it until the next Soy crop comes in.
    We shall all see soon.

    Oct 08th, 2014 - 06:21 pm - Link - Report abuse 0
  • CabezaDura2

    The State is the State. It happens eveywhere with diffenrent degrees. Argentina is just insane, but fiscally responsable countries are counted by the number of fingers in your hand and are mostly far East Asian Tigers with very small budgets and Gulf States. When you subsidise something you will only get as a result more of it.

    Oct 08th, 2014 - 06:25 pm - Link - Report abuse 0
  • chronic

    Malfeasance, corruption and incompetence is endemic in the culture of rotting roadkill's government. Only when when this is substantially altered will there be an opportunity for an economy to develop vitality. The form of government will likely have to be altered significantly and the center of politics will have to distance its self from that of the socially entitled.

    In the absence of the above, more calls for succession/autonomy by the more prosperous producing areas is likely.

    Either way - you need to discharge your obligations.

    Oct 08th, 2014 - 07:00 pm - Link - Report abuse 0
  • CabezaDura2

    33. You said it yourself... “I have”, the contract you and the bank have agreed is between two private parties. Benefits as well as risk count for each side and if you cant forfill the loan you took, you cant impose “tax” on any one else nor you can take another loan and have someone else non born yet pay it for you. When you have the State which has powers that the indiidual doesnt have, its almost a non limit tap on government deficit finnanced with perpetual debt.

    Oct 08th, 2014 - 07:11 pm - Link - Report abuse 0
  • Z-ville

    @15
    “Is there a word for someone who gets off when others suffer hardships?”

    I only know of a German word - “Schadenfreude”
    Literally means “Happiness at Injury”

    It is best enjoyed with a glass of chilled Riesling, and, for the long hauls, (like Crissy's angry ranting speeches), perhaps a good Appel Strudel to go with it...

    Oct 08th, 2014 - 07:35 pm - Link - Report abuse 0
  • gordo1

    de la Torre seems to know what he is saying, viz(from World Bank website)

    Augusto de la Torre, a national of Ecuador, is the Chief Economist for Latin American and the Caribbean. Since joining the World Bank in 1997, he has held the positions of Senior Advisor in the Financial Systems Department and Senior Financial Sector Advisor, both in the Latin America and the Caribbean region. From 1993 to 1997, Mr. de la Torre was the head of the Central Bank of Ecuador, and in November 1996 was chosen by Euromoney Magazine as the year’s “Best Latin Central Banker.” From 1986 to 1992 he worked at the International Monetary Fund, where, among other positions, he was the IMF’s Resident Representative in Venezuela (1991-1992).

    Oct 08th, 2014 - 08:08 pm - Link - Report abuse 0
  • CabezaDura2

    38. A life long bureaucrat, amazing....Independent private economists in Argentina like Cachanosky and Espert are much better

    This is why he is wrong

    https://twitter.com/jlespert/status/513478655788732416/photo/1

    https://twitter.com/jlespert/status/513478655788732416/photo/1

    Oct 08th, 2014 - 08:24 pm - Link - Report abuse 0
  • yankeeboy

    39. I think he was kidding.

    Oct 08th, 2014 - 08:39 pm - Link - Report abuse 0
  • Jonaz_BsAs

    Jose Luis Espert is the loudest voice of sanity in Argentina right now. I really admire him.

    Oct 08th, 2014 - 08:49 pm - Link - Report abuse 0
  • yankeeboy

    39/40. He better be careful people that speak out against CFK and her minions or with common sense often have terrible terrible accidents or audits or both.

    Oct 08th, 2014 - 09:32 pm - Link - Report abuse 0
  • MagnusMaster

    @42 I think he knows that because he only writes on Twitter and op eds that nobody reads, and maybe a TV show that nobody watches. Tecnocrats have zero influence if no politician listens to them.

    Oct 11th, 2014 - 06:20 pm - Link - Report abuse 0
  • ilsen

    “Argentina needs an “urgent change of course” and better relations with financial markets”
    And also with global-businesses worldwide..........
    (apologies for posting this on more than one thread);
    I hold shares in British Gas.
    Argentina owes British Gas approximately $244 million.
    Those familiar with the British Gas case say Argentina has no chance of changing the outcome of the legal decision, but the country remains litigious and is still fighting the ruling. Alex Yanos, a partner at Freshfields, the firm representing British Gas, confirmed that Argentina has refused to make payment.
    Pay your debts. Pay me, you scum.

    On a lighter note, I must point out a classic howler from TTT tobi-trolley-boi.
    QUOTE
    24 Nostrum of NostrolL (#)
    @22
    Incorrect. The markets are thieves, speculators, swindlers, embezzlers, charlatans, mulct-seekers, cyber-robbers, liars, Ponzi-schemers, and foreigners.
    UNQUOTE

    FOREIGNERS?????????????
    You do realise that to everyone in the world, anyone not from their country, OR neighbourhood even, is a foreigner?
    So now the whole world, 9 billion people minus 40 million argentine crimminals currently in contempt of court, are to blame for your problems???????
    FOREIGNERS?????????????

    Really???? It is CFK and her gang, and your own compliant attitude, you idiot!!!!!!!!!!
    Oh, my sides are hurting from laughing at you!
    BWAAHHHHHHhhhhAAAAAHHHAAAAA!

    Oct 11th, 2014 - 10:24 pm - Link - Report abuse 0
  • Enrique Massot

    In the 1970s and 1990s, the 'civilized world' including IMF and World Bank cheered on Argentina's governments and called them best pupils. Of course, that led to the catastrophic default in 2001-2002.
    Now that finally a government is working for the country's interests and refuses to kneel down to the powerful, Argentina is not longer the good kid in the class.
    Not to worry. The Argentine population and many honest people around the world know the difference.

    Oct 13th, 2014 - 03:49 pm - Link - Report abuse 0

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