Argentina faces choice between magic and realism 20 Nov 2015 Voters look likely to choose uncharismatic, pro-market Mauricio Macri as their next president in Sunday’s runoff election. Latin America’s No. 3 economy needs a dose of orthodox management after years of Kirchnerist magical thinking. But he could become unpopular very fast.
Argentines may risk austerity to get change 26 Oct 2015 Presidential elections will go to a runoff after business favorite Mauricio Macri surprised ruling-party candidate Daniel Scioli in Sunday’s vote. Scioli will now say Macri wants to slash social programs. But voters may rather see Cristina Fernandez’s economics as unsustainable.
After Cristina, a more investor-friendly Argentina 23 Oct 2015 No matter who emerges victorious in Sunday’s vote, Latin America’s third-biggest economy will end up more welcoming to investors than under President Fernandez. That’s not saying much. Front-runner Scioli offers a gradual fix for the nation’s woes, but may need to move faster.
Troubled U.S. firms get the Argentina treatment 3 Sep 2015 A court says they can’t force holdout creditors to accept less security against loans. A similar ruling led to a standoff between Buenos Aires and hedge fund Elliott. Unlike countries, companies can declare bankruptcy as a fallback. But restructuring is getting tougher for both.
Guest view: What Argentina teaches about Greece 25 Jun 2015 The South American nation tried to live a currency lie in 2001. But even clever schemes could not stave off crisis. Fernando Fernandez of IE Business School argues that Greece is in a similar situation. Clever plans cannot save the country from an untrustworthy government.
Elliott emits ray of pragmatism in Argentina feud 23 Mar 2015 The hedge fund and a U.S. judge say Citi can process two of the country’s bond payments, despite a court-ordered block. It’s a concession to cover the bank’s back, not a broader shift in holdout creditors’ intractable spat with Argentina. But it may qualify as progress.
Argentina pays price as truth and fiction vie 20 Feb 2015 The mysterious death of a prosecutor investigating President Cristina Fernandez has the stamp of cheap fiction. It’s emblematic of her rule, which ends later this year. Official data mask a looming recession and rising inflation. She’s leaving a credibility deficit for her successor.
Guest view: Hard to spell Colombia without o-i-l 15 Jan 2015 Latam is exposed to varying degrees to the steep drop in the price of crude. Itaú economists expect Brent to rebound to $70 this year, but the uncertain outlook means Colombia has much to lose. Brazil, Argentina and Mexico can’t afford a prolonged slump. Chile is a clear winner.
Bad ideas catching up with Latin America in 2015 29 Dec 2014 For four years, the region has mostly lagged world economic growth. The IMF predicts another year of the same. While Pacific-oriented countries will shine, Brazil, Argentina and Venezuela will suffer. With a couple of exceptions, misguided policies are coming home to roost.
Running Argentina’s central bank an impossible job 2 Oct 2014 Juan Carlos Fabrega’s resignation makes Alejandro Vanoli its fourth boss in as many years. He has to try to combat spiraling inflation and dwindling reserves while dealing with President Cristina Fernandez’ interventionist policies and a debt default. He’s unlikely to last long.
Argentine opportunity cost is reason to cut deal 28 Jul 2014 Another default arguably might not make things immediately worse. But it would set back recent efforts to curry favor with international financiers. With maybe $300 bln needed to develop shale oil and gas alone, swallowing national pride and ponying up $15 bln look worth it.
If only Argentine economy matched soccer success 13 Jul 2014 The nation’s strong World Cup showing reflects astute management of its big fan base and valuable on-field talent. That contrasts with a 100-year record of wasting its human and natural resources. Avoiding policy own-goals could one day make Argentina an economic champion, too.
Target for fixing Argentine bond mess looks small 23 Jun 2014 Handing $1.5 bln to leading holdouts from last decade’s restructuring is one thing, but repaying all remaining old bondholders could cost half Argentina’s $29 bln official reserves and upset creditors who took a haircut. Paying in bonds may help, but there’s limited wiggle room.
Argentina gets a wink and nudge from Supreme Court 16 Jun 2014 The U.S. tribunal declined to hear the nation’s spat with holdout creditors like hedge fund Elliott. That could spell default given a vow by Argentina’s president not to pay. With the top court taking a ruling off the table, though, the tacit message is to get talking and settle.
Playing nice starts to pay off for Argentina 29 May 2014 The country has added a deal with some creditors from its 2002 default to its recent settlement with Repsol. Its export credit market can now reopen, raising much-needed cash. Selling international debt would raise more – but requires resolving its remaining bondholder lawsuit.
Ecuador winning bond market forgiveness too easily 19 May 2014 Low inflation, scant supply and an improving economy may be driving appetite for a planned $700 mln offering. But the country defaulted on $3.2 bln of debt only six years ago. While absolution – or amnesia – may be good for deadbeat regimes, it raises global financial risk.
Populism may come back to bite Argentine president 16 May 2014 Cristina Fernandez nationalized YPF to win votes and control the nation’s oil. A growing fight over fracking pits those two motives against each other. Caving to demands to stop shale drilling and curb foreign investment might be popular. But it would raise costs and hurt growth.
Argentina tests Elliott’s cunning at Supreme Court 17 Apr 2014 Two cases challenge the hedge fund’s ability to work around U.S. laws that shield the country’s assets. The court is hearing one of them as it mulls another on paying debt-swap holdouts. Upcoming arguments in the first may reveal how creative collection plans fare in the second.
Data realism conveniently saves Argentina $3.5 bln 28 Mar 2014 Last year’s growth was 3 pct officially, against expectations of a suspiciously high 5 pct. That allowed Argentina to avoid a payout on GDP-linked bonds. But the move toward more a credible economic policy has broader, lasting benefits too, like helping YPF borrow money abroad.
Repsol makes the best out of bad YPF deal 26 Feb 2014 The Spanish oil group will get $5 bln from Argentina as compensation for the expropriation of its stake in YPF. It’s half what Repsol wanted and will be paid in government bonds. Still, the final deal enshrines that Repsol must ultimately receive the value Buenos Aires promises.