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Tag Archives: Argentina

Turkey, Argentina, Other Emerging Markets Hit BBVA

After the euro debt crisis, Spain’s alpha-lender sought greener pastures in the Emerging Markets. That bet is coming home to roost. By Don Quijones, Spain, UK, & Mexico, editor at WOLF STREET. Few, if any, global banks have bet as large, or as recklessly, on fast-growth emerging markets as Spanish lender BBVA. In the first half of 2018 its subsidiaries in Turkey, Mexico, Argentina, and other Latin American economies provided roughly half of its revenues and over 60% of its global...

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No Other Banks Are This Exposed to Turkey, Argentina, Brazil…. Emerging Markets Haunt Spanish Banks

To diversify from the euro-debt-crisis, the biggest Spanish banks pushed deeply into Emerging Markets. Now, they’re in a new crisis.  By Don Quijones, Spain, UK, & Mexico, editor at WOLF STREET. Almost exactly six years ago, the Spanish government requested a €100 billion bailout from the Troika (ECB, European Commission and IMF) to rescue its bankrupt savings banks, which were then merged with much larger commercial banks. Over €40 billion of the credit line was used; much of it...

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What the Heck Just Happened in Argentina?

The price of cheap dollar-debt. Just when you think Argentina’s financial crisis can’t get worse, it gets a whole lot worse. In order to halt the peso from collapsing further, the IMF, after some serious begging from the government, had agreed to a $50-billion bailout package in June, to be disbursed in increments. In addition, the central bank raised its policy rate in big jumps, reaching 45% on August 13. And in an emergency meeting today, it goosed the rate to a blistering 60%!! And...

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The Price of Cheap Dollar/Euro Debts: Local Currencies Come Unglued, Debt Crises Ensue

Grand Collapse in Turkey; to avoid the same fate, Argentina hikes rate to 45%. On Monday, Argentina’s central bank responded to the currency chaos in Turkey and other sections of the Emerging Markets, including the ongoing collapse of the Argentine peso: It raised its policy rate by five percentage points to 45%. Argentina’s annual rate of inflation in June surged to nearly 30%, and indications are that this is getting worse. The central bank (the BCRA) is part of the Ministry of...

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Argentina: Another Central Bank Bubble Losing Air

Have you heard about what’s happening in Argentina?We talk a lot about the impact of central bank monetary policy on the US economy. We recently made the case that the Federal Reserve is in the process of driving the economy into the ditch. But the Fed’s easy-money policies have also played a role in blowing up bubbles in other economies around the world. Some of those may be in trouble as well.Argentina’s currency has lost about 12% of its value since April. In a recent article published...

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Faced With Rampant Inflation, Argentines Turn to Barter

Instead of selling his soybeans for devalued pesos, Gustavo Tione exchanged 30 tons of soy for about 8,000 liters of diesel from the state-run oil company. This is just one example of a growing barter economy in Argentina as a 24% inflation rate rapidly erodes the value of the country’s currency.As reports, the rise of barter is simple economics. Commodities hold their value better than than cash.So, why bother with fiat currency if you don’t have to?Barter is the most basic economic...

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The Lie Behind Argentina’s “Growth” Model

What does “Political Manipulation” of Ugly Data add up to? By Bianca Fernet, Argentina, The Bubble: Argentina’s national statistics bureau (INDEC) is expected to publish revised  data next month that corrects the alleged “book cooking” and data falsification that occurred under former President Cristina Fernández de Kirchner. How bad is it? The verdict is ugly. The former administration caught significant flack for lying about inflation, but a project from Harvard University and the...

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Look Who’s Lying About Inflation Again

A dismissive attitude to the suffering of the population. By Bianca Fernet, Argentina, The Bubble: What is this, 2013? The headlines surrounding Argentina’s economy read like a veritable tale of two countries. If you read the international press or run in diplomatic circles, sheer euphoria. Argentina has quickly righted the economic boat by settling with the holdout “vulture” funds, removing currency controls and export restrictions, and restoring a level of respectability and...

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Oil vs. Electricity: Argentina’s Impossible Emergency

Twin energy crises at the worst possible time. By Bianca Fernet, Argentina, The Bubble: Argentina faces twin energy crises that literally and figuratively are screaming from the front of every newspaper in the country. The new government is ending electricity subsidies to consumers, which is resulting in 500 percent increases for families and consumers that meet fairly basic criteria. At the same time, world oil prices have dropped catastrophically over the past 18 months from close to...

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Is Inflation Spiraling out of Control in Argentina, or is it just a ‘Sensation,’ as the New President Says?!

Give it to us Straight By Bianca Fernet, Argentina, The Bubble: If you’ve noticed a dramatic increase in prices this month, allow me to assure you that it is not your imagination. Inflation has accelerated dramatically since President Mauricio Macri took office on December 10. That’s a fact. The big question is whether this is a short-term consequence of removing currency controls and reunifying the Argentine peso, or a long-term trend that could spiral out of control. Argentina has an...

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