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Wednesday, April 18, 2012

YPF Will Soon Be The Least Of Argentina's Problems


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  1. ReportBruce Allen | April 18 3:17pm | Permalink
    What happened to free market economies? Have they gone the way of the dinosaur? Crony capitalism will never prevail.
  2. ReportEquivocation | April 18 3:22pm | Permalink
    True Moises. Except you miss one point. Until this week YPF was private. The plunge in YPF production was undertaken almost exclusively under private management. That pretty much buries your entire article.

    Repsol has indeed under-invested in Argentina. This is basically for three reasons
    - To limit their exposure to a volatile country
    - Because they were miliking the unit for liquidity due their losses in their Spanish headquarters
    - Because they were milking the unit because they are overleveraged

    I am not for government intervention, but in this case Repsol was clearly not getting the job done.

    The story is not as clear cut as the Spanish official outrage would have us believe.
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