[SerfCity]

Les dejo un pequeño editorial de una revista especializada en finanzas, es del mes pasado.

Appetite for Destruction

The most surprising aspect of Argentina’s return to ruin is the financial sector’s impotence when faced with a doomed government that seems intent on reliving the past. Publicly, not one senior banker, investor or major issuer will condemn the Kirchner administration for its folly. Privately, none has a good word to say about politics in a country that has everything else going for it.

Meanwhile, in an agriculturally rich nation, there is a shortage of basic products in the supermarkets, where price rises indicate inflation of more than double the official estimate. Street protests are mounting in the capital, where residents note a sharp uptick in crime.

And yet GDP growth expectations remain strong, and besides rich human capital and robust infrastructure, Argentina is abundant in some of the commodities that are enjoying a global boom. The central bank sits atop a $50 billion cushion of dollar reserves. After halting debt payments and enforcing a harsh haircut on creditors – many of whom are still holding out – the economy has grown at close to 9% during the past five years.

The markets are preparing for the worst, with benchmark bonds trading in the low 70s late-June and showing a considerable amount of stress. The five-year CDS was at around 640 basis points, implying a decent probability of default.

Compare Argentina to booming Brazil, which was looked down on for decades by its southern neighbor. Much of LatAm enjoys a flood of new investment. And yet the buyside has relegated Argentina to the same division as Venezuela, Ecuador and Bolivia – high risk and best avoided.

Time is running out for Argentina, though favorable external conditions give it breathing space to make necessary adjustments. However, the country faces a credibility crisis and the opportunity is there to be lost.

Sadly, Argentina has replaced Brazil as the LatAm country of the future that
probably always will be. Its bankers have only their elected officials to blame.

LatinFinance

Y así quieren les presten plata para el tren bala. Están delirando. Hoy los CDS a 5 años (los más líquidos) cerraon en 744 p.b. El fin del conflicto por el campo no cambió nada.