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Tag Archives: Latin America

So That’s the End for Air Italy. And More Airline Money-Pits

Throwing good money after bad as a business model. By MC01, a frequent commenter on WOLF STREET: On February 10, one of the largest Italian newspapers, Il Corriere della Sera, announced airline Air Italy, Italy’s second largest airline after Alitalia, was facing a liquidity crisis and may not survive long. Less than 24 hours later, Air Italy announced it would immediately enter voluntary liquidation. It said that until 25 February, flights would be carried out by other airlines, such...

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GM Better Figure Out How to Stop Shrinking, I Mean Globally & Pronto, Before It’s Too Late

GM tries to shrink itself out of trouble. And it shrinks where it wants to grow. But when will it stop before hitting zero? Ugly charts of GM’s global vehicle sales, by region. By Wolf Richter for WOLF STREET. GM announced this weekend that it would pull out of Australia, New Zealand, and Thailand, in line with its strategy to exit one market after another to shrink itself to higher profits, which has led to a stupendous downward spiral in vehicle sales. It already pulled out of...

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Over-Indebted European Telecom Giant Tries to Dump its Latin American Empire

Telefonica, with operations in Venezuela, Argentina, Chile, Peru, Ecuador, Colombia, and Mexico, is on the verge of “junk,” and the ECB holds some of its debt.  By Nick Corbishley, for WOLF STREET: Telefonica, the telecommunications and internet giant headquartered in Spain and with operations in numerous countries and burdened by enormous debts, has announced plans to stage a historic retreat from one of its core markets, Latin America, in a bid to generate much-needed funds. Like...

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Bank of Mexico Raises Alarm About Mexico’s Economy

“Particularly worrisome” is that this slowdown “has taken place in a context where the US economy is growing above potential.” By Nick Corbishley, for WOLF STREET: The bad omens are stacking up for Mexico’s faltering economy as both domestic consumption and investment dry up while the challenges facing the country’s heavily indebted state-owned oil giant, Pemex, continue to rise. That’s the broad conclusion in the minutes of the latest meeting of the Bank of Mexico’s governing board....

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The Airline Fiasco in Argentina as Peso Collapses and New Plan Goes Awry

The curse of pushing volume by selling tickets below cost became an even bigger curse with the peso massacre. By MC01, a frequent commenter on WOLF STREET: On 27 December 2016, the Federal Government of Argentina, under new President Mauricio Macri, launched the “Revolución de los aviones,” the brainchild of the Minister of Transports, Guillermo Dietrich, an ambitious plan aimed at overhauling the stagnant airline industry in Argentina. While often called “deregulation,” it was...

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Argentina Crisis Slaps Foreign Banks & Companies Operating in the Country

Peso collapse and inflation force Spanish companies and banks — second largest investors in Argentina, behind US companies — to tally their losses. By Nick Corbishley, for WOLF STREET: Having learnt their lesson, most European companies and banks have limited exposure to Argentina’s crisis-prone economy. One exception is Spain’s corporate sector, which, after the U.S.’s, has the most exposure to the South American economy, with almost €6 billion invested by its companies there, down...

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Brain-Dead Investors Get Crapped on Again by Argentina

They had it coming. The chase for yield in a central-bank manipulated low-interest-rate environment is very costly, as brain-dead buyers of Argentina’s dollar-denominated and euro-denominated bonds found out. These junk bonds were issued with great Wall-Street hype in 2016 and 2017, including inexplicably a 100-year bond, backed by a country that has defaulted on its foreign-currency bonds five times in my lifetime, and that defaults on its peso bonds on a daily basis via inflation...

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Cesspool of Corruption Odebrecht Files for Bankruptcy, Largest Ever in Latin American History

The Brazilian conglomerate’s rot was uncovered by Operation Car Wash that resulted in the imprisonment of political and business figures across Latin America, including Brazil’s former richest man, Eike Batista. By Don Quijones, Spain, UK, & Mexico, editor at WOLF STREET. After years of graft probes that have tarnished governments throughout Latin America and left a trail of economic destruction in their wake, Brazilian conglomerate Odebrecht SA announced on Monday it was filing...

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“Largest Foreign Bribery Case in History” Claims New Scalp: Former Pemex CEO

His lawyer suggests if the price is too high, he may be willing to take his friend, former president of Mexico, down with him. By Don Quijones, Spain, UK, & Mexico, editor at WOLF STREET. Emilio Lozoya, a former chief executive of state oil company Petróleos Mexicanos (Pemex), was issued with an arrest warrant on Wednesday for financial irregularities, in particular his alleged dealings with scandal-plagued Brazilian construction firm Odebrecht. Lozoya, formerly a one-time senior...

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More Airline Woes: Avianca Brazil Gets Dismembered, Korea’s Asiana Airlines Gets Taxpayer Bailout, Air India Gets Rumors of Default

It Just Doesn’t Let Up With Airlines. By MC01, a frequent commenter, for WOLF STREET: Here’s an example of what should happen to an airline which has become unprofitable and failed to turn around its financial situation. On May 7, the assets of Avianca Brazil, formerly Brazil’s third-largest airline, will be auctioned off to pay creditors. To streamline sales and maximize proceeds, Avianca Brazil has been broken up in seven lots. The best assets are prime slots at the Congonhas and...

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