MercoPress. South Atlantic News Agency
Moody's bets are on Macri: upgrades Argentina's debt rating to 'stable' from 'negative'
Following the first round of presidential elections in Argentina on Oct. 25, which the ruling party won by a lower-than-expected margin, credit rating agency Moody's Investors Service upgraded on Monday the country's debt rating to “stable” from “negative.” Read full article
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Disclaimer & comment rulesAh well, they can always reduce the rating to 'shit' after the election and Macri finds a note fro TMBOA telling him 'there's no money left', as if we didn't know that.
Nov 04th, 2015 - 10:48 am - Link - Report abuse 0This is promising for Argentina. Once the infantile-ranting CFK is history - together with the inept Kicillof - investment and assistance is likely to begin. This is great news for the future of Argentina.
Nov 04th, 2015 - 11:51 am - Link - Report abuse 0@2. And how long do you think it will be before argieland is “trusted” and seen as “normal”? Surely the first condition will be the next five years? And clear indications that TMBOA will never be president again. Nor anyone from her family. Payment of the debts. Removal of any reference to the Falklands in its constitution. Abandonment of the “Malvinas Myth”. Reparations to the Islanders. Removal of the argie cemetery. Ending of all the anti-Falklands “laws”. So much to do!
Nov 04th, 2015 - 01:45 pm - Link - Report abuse 0@3 Can you just forget about Malvinas. That issue is 180 year old, and Argentina as a nation will never stop asking for what belongs to the republic.
Nov 04th, 2015 - 02:22 pm - Link - Report abuse 0A thieve must give back the stolen goods. That is even a the law in UK.
Just forget it!
The troubles of rotting roadkill over?
Nov 04th, 2015 - 02:33 pm - Link - Report abuse 0I think not.
@4 You have never had them and never will have them. Why don't you just accept it?
Nov 04th, 2015 - 03:02 pm - Link - Report abuse 0Talking of thieves, when do you think CFK and her gang of thieves will give the Argentine people their money back?
Long live to King!
Nov 04th, 2015 - 04:39 pm - Link - Report abuse 0https://www.youtube.com/watch?v=NCaH-qqTWpk&list=FLmXPTu1f8AdGlizWNiASx2A&index=90
@6 ElaineB
Nov 04th, 2015 - 05:00 pm - Link - Report abuse 0Amazing how positively the market and investment agencies react when it looks like the K regime will be gone.
@ 8 Troy Tempest
Nov 04th, 2015 - 05:21 pm - Link - Report abuse 0Yes, and it's not surprising why they get it badly wrong so often because of it (jumping the gun).
@8 Yes, absolutely. I very much doubt the mistakes of the 90's will be repeated - it is a different world now. I hope for the sake of the Argentine people that a more market-friendly President will get them out of the mire they are in.
Nov 04th, 2015 - 06:07 pm - Link - Report abuse 0“Moody's bets . . ”
Nov 04th, 2015 - 06:25 pm - Link - Report abuse 0Strange line to be associated with a supposedly analytical based ratings agency.
You can oust the K's but what can you do with the half plus part of the population that enabled them?
Dumping the K's restores world commodity demand?
How does a new rotting roadkillian regime revive china's economy?
lol
How convenient! Moody's just happens to find out that Argentina status is “negative” two weeks before an election!
Nov 04th, 2015 - 06:28 pm - Link - Report abuse 0But don't put your bets on it. The international risk qualifiers have a long history of such opportunistic diagnostics. Many still remember how those agencies painted rosy pictures of the country as it was running downhill to its worst ever financial crisis--the 2001 default.
@12 We have all known about it for a long time, I think it is only news to you.
Nov 04th, 2015 - 06:44 pm - Link - Report abuse 0Really good article over at Bubblear.com regarding the new dollar restrictions.
Last week wasn’t easy for President-on-her-way-out Cristina Fernández de Kirchner. On the political front, she treated us with deafening silence following her candidate’s poor performances in the general election. But on the economic front, her government was not so quiet.
Remember how Argentina’s reserves, or how much foreign currency the Central Bank holds, has been creeping lower despite foreign currency controls? Last week the Central Bank (BCRA) and National Insurance Regulator jumped back in to keep the country from running out of money for just a little while longer.
First, the BCRA raised interest rates by 3 percent, the highest in 18 months, to try to make holding pesos more attractive. Shockingly, not many people rushed to buy peso notes. The government sold AR$11.3 billion, 5 percent less than the previous week, despite the higher rate.
Next, the Insurance Regulator passed a new law forbidding insurance companies from holding dollar assets in excess of their dollar contracts. English translation: Insurance companies whose clients are in Argentina and thus likely have peso-denominated policies cannot hold dollars even though the peso is likely to depreciate before these policies are paid. Not good news for the peso policy holder. cont.
Cont. please, Elaine...
Nov 04th, 2015 - 08:41 pm - Link - Report abuse 0Sorry, TT, I mean't the article continues but here goes….
Nov 04th, 2015 - 08:51 pm - Link - Report abuse 0Importers received informal calls from their banks informing them that the automatically approved amount they are permitted to pay providers was cut in half, from US$150,000 to US$75,000. While that might seem like a reasonable number, please be advised that you can’t buy very many car parts, air conditioner blades or other industrial input with US$75,000. This adds to the US$9.5 billion (that’s right, billion) that the Central Bank is already in debt to importers. Commerce Ministry Sub-Secretary Paula Español reportedly told importers to:
“TAKE IT UP WITH THE NEXT GOVERNMENT — WE’RE ON OUR WAY OUT”
Airlines received similar happy news via informal third-party channels that their permitted dollar purchases were cut in half, effective immediately. This cuts their access to dollars down to about one third of what it was at the end of July and forced airlines to restrict purchases of tickets in advance of 60 or 90 days. La Nación confirmed that American Airlines ended promotional fares in Argentina and will no longer sell tickets more than 90 days in advance. LAN also cut promotional fares on international flights.
These measures do more harm than good. Officially or nominally, Argentina’s reserves stand at US$27 billion, the lowest they’ve been since 2006. The actual usable number is estimated to be around the US$6.7 billion mark. By the end of the year, that number will be even lower at around US$3.5 billion.
This election season has been rife with accusations that any opposition to Kirchner’s brand of Peronism secretly wants to return to the neoliberalism of the accursed ’90s that left Argentina broken and her people poor. What people seem to be forgetting is that the crisis of 2001 didn’t appear out of thin air. ……… there is more….
@4
Nov 04th, 2015 - 09:06 pm - Link - Report abuse 0“A thieve must give back the stolen goods”
The thief did. In June 1982.
And pointing the finger at “neoliberalism” and “markets” (which it appears many see as synonymous with “vultures” for some odd reason) neglects one big glaring economic error — and his name isn’t Menem. It’s pretending for a very long time that AR$1 equalled US$1. Pretending AR$10 equals US$1 is along the same lines of unsustainable and dangerous.
Nov 04th, 2015 - 09:08 pm - Link - Report abuse 0Argentina’s painful situation that laid the groundwork for Kirchner’s rise to power rose out of a situation wherein the government propagated an economic lie. And then they ran out of money. Running out of money doesn’t care if you’re a socialist or neoliberal.
Cristina Fernández de Kirchner claims to have put in place policies that have raised people out of poverty and improved living standards of previously marginalized populations. For the sake of argument, let’s agree she has. If there’s no money to pay for them, these policies are a ticking time bomb in the pockets the country’s most vulnerable citizens, who depend on ANSES, the universal child allowance, precios cuidados price controls on basic goods, utility subsidies, etc. to survive every day.
Kirchnerism has not left an economic “model” to continue — it has left a laundry list of expensive programs. The list above contains some that indeed improve the situation of the nation’s poor. Others, such as Futbol Para Todos, which broadcasts soccer matches alongside government propaganda for free, are a laughable waste of public funds and should insult anyone with a brain. Add to the list the undesirable consequences of high inflation, currency controls, no imports, fewer jobs in the private sector, electricity outages, etc. and the idea of calling Kirchnerism a model to continue deteriorates further.
And still more…...
please....
Nov 04th, 2015 - 10:19 pm - Link - Report abuse 0The few days leading up to November 22nd’s runoff will be politically noisy, but also economically interesting. The upcoming debate on November 15th between Kirchner’s candidate Daniel Scioli and opposition candidate Mauricio Macri should force both men to directly address their plans for Argentina’s economy. In the background, the government will attempt to keep the problems at bay until they leave in December — and possibly grab what they can on their way out the door.
Nov 04th, 2015 - 10:49 pm - Link - Report abuse 0Members of the opposition PRO party have initiated criminal charges against Central Bank President Alejandro Vanoli for fraud in the administration of public funds. The BCRA has sold futures contracts worth US$15 billion dollars at the official rate of 10 ARS/USD that come due in December, all to large companies well-connected to the outgoing government. If the official rate is adjusted to a more realistic 15 ARS/USD before these contracts come due, the new government will have to pay a considerably higher amount. I’d draw parallels with the so-called “vulture” funds right about now.
The most disappointing element of the political debate is that when faced with information similar to that contained in this article, supporters of Cristina Fernández de Kirchner defend in one of three ways:
Macri is “market friendly” and will take us “back to the 90s” and crash the country
Macri is corrupt and steals too
Macri will erode the social gains (marriage equality, etc) that developed under this government
Note the absence of economic reasoning defending Kirchnerism as a whole as a sustainable model.
A good article from Bubblear.com
#19 ElaineB
Nov 05th, 2015 - 02:57 am - Link - Report abuse 0A good attempt Elaine! Unfortunately you forgot some vital information.
“Note the absence of economic reasoning defending Kirchnerism as a whole as a sustainable model.”
You did not look in the right place, Elaine. There is lots of economic analysis in today's election campaign in Argentina.
Unlike neo-liberals, Kirchnerism gives the state a strong role in the economy. The state's role is to balance the market forces and the needs of the population at large.
Dictatorship economy minister Martínez de Hoz, as well as Menem would do later, opened the country to imports and quashed any tariffs on exports. The disastrous consequence was the closure of a large number of domestic companies unable to compete with cheap imports leading to soaring unemployment. (Free market advocates will tell you that is precisely the effect sought--if you are unable to compete you must perish).
Many entrepreneurs closed manufacture companies and, with an office, a telephone and a fax they created import companies instead.
The Kirchners, instead, did the opposite. The result was the creation of over 200,000 little and medium-size enterprises in the last decade. The promotion of health and education (hey, you need an educated workforce) and the program to return Argentine scientists are all part of Kirchnerism, showing on projects such as ARSAT 1 and 2.
Unfortunately for Macri, his proposed economic policies match, point by point, those of the 1970s civic-military dictatorship and those of Menem. (Opponents were mad that Kirchnerists would show clips of both Martinez de Hoz and Macri reciting from the same book).
His only chance has been the slowing down of the international economy, which has had an effect on Argentina as well as in many other countries. I have just seen a 10-year Conservative rule in Canada crumble because, among other things, of a sluggish economy.
No ma'am. Argentines still ache from those policies and their bitter consequences.
20 Enrique
Nov 05th, 2015 - 03:47 am - Link - Report abuse 0“.... His only chance has been the slowing down of the international economy, which has had an effect on Argentina as well as in many other countries. I have just seen a 10-year Conservative rule in Canada crumble because, among other things, of a sluggish economy.”
Enrique,
You are irresponsibly drawing false analogies.
The Canadian, “Progressive Conservatives” of Stephen Harper ran their course and failed due to many things, their Omnibus Bill that contained controversial penal reforms. Being generally out of touch with average Canadians and a campaign of fear-mongering did not help. Sound familiar?
However, to say their downfall was due to their monetary policies and the economic downturn is pure bs.
The right-wing Conservatives had as little effect on the economy during a time of slowing commodity sales world wide, as they did in 2008, when Canada's cautious mortgage and lending policies, and large strong banks, shielded Canada from the burst of the U.S. credit bubble.
They were nearly irrelevant to Canada's economic performance.
You deliberately mis-represent the real events. BTW, I voted for the other guy- the Liberal with the hopeful message, and the positive attitude of bi-partisan cooperation.
Perhaps you need to support a government that will serve the interests and needs of the country, and not the other way around.
@20 A good attempt? Hahahaha, you are funny.
Nov 05th, 2015 - 10:01 am - Link - Report abuse 0@21 TT, Enrique is a good example of how easy it is to fool people.
Well, just to get back to the actual news article here...
Nov 05th, 2015 - 10:17 am - Link - Report abuse 0The real point of the story is a bit more subtle. It isn't a projection of great positive change and rosy outlook (at least at this time). It's more of, and I quote,“popular support for policy change post-election is greater than previously thought,” a FACTOR, which would REDUCE the “RISK OF GREATER THAN EXPECTED LOSSES to investors in the next 12 to 18 months.” Please note, emphasis added.
There is also a reference to more consistent Argentine policies, which help investors estimate risk and rewards vs. other economies. Consistency and confidence is critical in analyses, otherwise you move along to somewhere else more predictable.
Remember, the actual rating hasn't gone positive, just “stable” from negative. Financially speaking, it's just not expected to become significantly worse... so I suppose you can look at THAT as an improvement.
In the long term, I'm an optimist for Argentina. The sheer size, resources and population makes it worthy of investment consideration... but some things have to change first, and that change may be uncomfortable.
Best wishes to all.
@23 I completely agree and I think both candidates have refrained from making the utopian promises of CFK's government. They know the economy in the short term is dire. They both know cuts will have to be made, devaluation is unavoidable and they have to attract investment.
Nov 05th, 2015 - 12:42 pm - Link - Report abuse 0Like you, I don't have a dystopian view of Argentina in the long-run. It still has all the potential at has always had. The uncomfortable changes you speak of will have to include a shift in culture and that is a major problem.
Martinez de hoz expropriated a lot of jewish wealth in line with videlas antijewish policies... Today latin america lives the miracle of kiciloff and levy running the show. Holdding the control before chaos.
Nov 05th, 2015 - 02:44 pm - Link - Report abuse 0@25 313Bio
Nov 05th, 2015 - 03:18 pm - Link - Report abuse 0it only SEEMS like a miracle - they simply haven't told you that you still have to pay for it.
@23. lol.
Nov 05th, 2015 - 03:19 pm - Link - Report abuse 0You don't get it. You've either never been there OR you stayed to long.
The POPULATION is the problem.
watch kiciloff's railing speech. How could people be so corrupt and blind to cheer on this ridiculous circus and act like it has 4 more years. Maduro and Dilma also have the same speechwriters.
Nov 05th, 2015 - 09:26 pm - Link - Report abuse 0According to Pravda:
Nov 06th, 2015 - 04:17 am - Link - Report abuse 0Macri is the “Pro USA party” and Scioli has inherited a mandate directly from Peron.
CFK and Nestor are seen to have “reduced the National Debt by $70b” - and built 10,000 schools and hospitals... and more.
http://english.pravda.ru/world/americas/12-08-2015/131636-Cristina_Kirchner_Argentina-0/
I suppose the $70b is simply the money they borrowed and refused to pay back.
Oh, and they are already declaring Scioli the winner - “Argentines want Scioli”
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