07-18-25 savo
carib.. FWIW.. according to the big mac index.. the peso is not overvalued...
https://www.lanacion.com.ar/economia/indice-big-mac-el-cambio-de-julio-que-refleja-un-nuevo-escenario-para-el-dolar-y-el-peso-argentino-nid17072025/
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07-18-25 carib
PS: concerning the ARP over-valuation.. it's confirmed if zillions of Argentinos go to the beach in Brasil.. and shopping in Miami..
If the Peso is very cheap.. they usually stay home. |
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07-18-25 carib
Savo: that is certainly correct.. but it is normal in developed countries for the central bank to own a very large chunk of the national debt, which has an influence on interest rates (or spreads).
A second issue is the one of the amount of pesos and pesos debt. I agree it is still too high.. But the initial Milei idea, if I am not mistaken, was precisely of dollarising at whatever FX rate the market would determine.. to eliminate all the Pesos. My argument at the time.. was that that could only be done if the government had plenty of dollars (which they did not have).
No surprise that was "pie in the sky".
All that said, congrats to Milei for finally trying to put the country in order! |
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07-18-25 savo
«Venezuela anuncia con satisfacción que ha logrado la liberación de los 252 ciudadanos venezolanos que permanecían secuestrados y sometidos a desaparición forzada en un campo de concentración, conocido como el CECOT, en la República de El Salvador», indicó el canciller Yván Gil en un comunicado.
A su juicio, Venezuela ha pagado un «alto precio» para conseguir la libertad de estos connacionales, a través de un canje con las autoridades de los Estados Unidos.
«Era un grupo de ciudadanos estadounidenses que se encontraban a la orden de la justicia por su comprobada participación en delitos graves contra la paz, la independencia y la seguridad de la nación. Nicolás Maduro Moros siempre dispuesto a cuidar la vida e integridad de estos venezolanos sometidos a graves violaciones de derechos humanos, no tuvo ninguna duda de realizar este canje y rescatar así a estos migrantes venezolanos secuestrados en El Salvador por culpa de los sectores más extremistas de la derecha venezolana», señaló. |
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07-18-25 savo
carib.. a few weeks ago the dollar in argie was 10% lower and people were complaining because the dollar was too cheap... now it is 10% higher and people complain because the dollar is too expensive.
As you know inflation goes down over time and not instantly.. as long as the current trend continues it will be in single digits annualized before the end of the year.
on the subject> With a competitive FX and a significant BoT structural surplus BCRA could buy excess $ from exporters (at market rate) and reduce significantly dollar debt..
1) The external debt is debt of the treasury ... not the central bank
2) printing money in that way is inflationary if people do not want those newly created pesos.
3) It is the treasury that has to buy the dollars with fiscal surplus.
4) They can not float because there are still excess pesos in the system. Last week they repay the LEFis which was an instrument to remunerate overnight bank excess liquidity and the market went into a turnmoil.
Summary... it is a complex process to go from the verge of hyperinflation, a humongous fiscal deficit, big amounts of dollar debt payments coming, etc... to a fiscal surplus, no inflation, accumulation of reserves and no default.
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07-18-25 carib
| In a "non upside-down" world, also, there could be tariffs on imports, but no tax on exports.. |
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07-18-25 carib
I mean: Argy has significant debt in a currency it does not print.
With a competitive FX and a significant BoT structural surplus BCRA could buy excess $ from exporters (at market rate) and reduce significantly dollar debt.. |
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07-18-25 carib
Savo: isn't the easy solution just to let the market decide?
The other thing I do not understand is why inflation in Argy remains very high.. if there is no fiscal deficit and "too few pesos"? |
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07-18-25 savo
carib...either the peso is expensive now or it was cheap before. Not easy to answer.
The dollar in URU went from 44 in january to 39 today. And the real from from 6.19 to 5.59.
Bimonetary systems tend to overvalue the local currency because there are too many dollars (potentially all the dollars that argies have under the matress) and too few pesos.
I am not saying this is good or that it is not going to end bad... but it is not easy to resolve.
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07-18-25 carib
ft
Stabroek was discovered by Exxon off the coast of Guyana in 2015 and is estimated to hold more than 11bn barrels of oil. Exxon and its partners, which will now include Chevron alongside China’s Cnooc, are forecast to generate $182bn in profits from oil and gas sales from the fields over the next 15 years, according to analyst estimates.
Veny has much larger reserves... but wastes them.. |
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07-18-25 carib
I guess Argy bonds were a great trade since Milei got elected.
Right now I am not sure.. given the ARP is again overvalued with inflation still in double digits.
Was the guy not supposed to dollarise or let at least currencies float freely?
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07-18-25 savo
| Argentina’s issuer ratings have been upgraded to Caa1 from Caa3 by Moody’s with a stable outlook. The upgrade follows steps taken by the government to liberalize the exchange rate regime and capital controls, adding to the support from the $20bn IMF program. These support the availability of hard currency liquidity and ease pressure on external finances. In April earlier this year, authorities replaced the crawling peg with a new regime allowing the Argentine peso to float within a managed band, initially set between ARS 1000-1400/USD with monthly adjustments. With the aim to rebuild foreign reserves and support hard currency liquidity, this shift introduces higher flexibility to the exchange rate and sustains external debt payments. The $20bn disbursement from the IMF and about $6.1bn from other multilateral agencies will support Argentina’s external debt service. Also, Moody's highlights that the expected boost from extractive sector and net FDI inflows should fulfil other foreign currency needs. Argentina’s GDP expanded by 5.9% in 1Q2025 and is expected to grow by 4% in 2025 as per Moody’s. |
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07-18-25 spal
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07-18-25 savo
half-dead PDVsa bonds
:-))) |
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07-18-25 carib
Panas: outside of RE and private equity.. my choices have been pretty poor in the last few years.. and have no large positions besides.. cash.. and half-dead PDVsa bonds..
AMPX is now worth about 500K.. but not yet "large" position.. |
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07-18-25 panasonic
Great call Carib, congrats.
Outside private investments what are your biggest positions? |
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07-18-25 ruspan
07-17-25 carib
My pleasure, Ruspan...
I bought it 1.1$, converting warrants.
still riding it past 8$..
Very good! |
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07-18-25 ruspan
Carib: "My pet US stock, AMPX.. up 1200% from the lows.
now close to 1BB valuation, but further upside left, possible.
Mentioned it here couple of years ago.."
Thank you, I made it from 2 to 5, it was nice. |
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07-18-25 spal
"My pet US stock, AMPX.. up 1200% from the lows"
Bravo |
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