Friday, December 25, 2015

My Hotel Room In Buenos Aires, Argentina

Approaching San Martin de los Andes, Argentina

The Finest Restaurant In San Martin de los Andes- El Regional

Touring Downtown Villa La Angostura, Argentina

The View From My Rented House In Villa La Angostura, Argentina

An Amazing Discovery Near Downtown Rio de Janeiro

A Trendy Neighborhood Near Downtown Rio de Janeiro

My Most Beloved View Of Copacabana In Rio de Janeiro

Another View Of My Beloved Copacabana

Some Magical Moments From Copacabana Beach in Rio de Janeiro

My Beloved Copacabana In Rio de Janeiro

Some Views From The Sugar Loaf In Rio de Janeiro, Brasil

A Ride Through The Main Street Of San Martin de los andes, Argentina

Riding Through A Beautiful Residential Neighborhood In San Martin de Los...

Riding Through Downtown San Martin de los Andes On A Beautiful Saturday ...

Riding Around The New Hospital In San Martin de los Andes, Argentina

Preparing For A Police Parade In San Marin de los Andes, Argentina

Thursday, December 24, 2015

Would A New Stock Exchange In Brasil Change The Investing Climate?

Tuesday, December 22, 2015

How Macri Will Revive The Economy In Argentina

Analytical Guidance: How Argentina's New President Will Revive the Economy

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Eager to dismantle his predecessor's economic policies, Argentine President Mauricio Macri marked his first week in office by taking aggressive steps to liberalize the Argentine economy. So far, the new president has managed to slash taxes on agricultural exports and lift currency controls, causing the value of the Argentine peso to plunge by 30 percent.
Macri's "shock therapy" policy will undoubtedly hike the country's already-high inflation even further, putting additional strain on the struggling economy, at least at first. And as Argentines begin to feel the potentially painful side effects, resistance to the president's approach will build.


In Argentina, December is often a month of conflict. Soaring heat, intermittent blackouts, high spending levels and salary negotiations for the coming year push societal tensions to their peak. With Macri's rapid and dramatic adjustments to the economy, this December is shaping up to be no exception. Since assuming his post on Dec. 10 Macri has focused the bulk of his efforts on reversing Argentina's economic deterioration. After more than a decade of the protectionist policies and a heavily regulated foreign currency exchange system put in place by the previous adminsitrations, the country is in dire need of a new — and according to Macri, drastic — approach.
Macri's efforts to shock the economy out of its stupor began on Dec. 14, when he announced his intention to remove the export taxes in place on some of Argentina's most competitive agricultural products, including beef, wheat and corn. He also plans to reduce the export taxes on soybeans from 35 to 30 percent. The move marks a significant change in Argentine policy: Beginning in 2008, former President Cristina Fernandez de Kirchner maintained high taxes despite farmers' complaints to fund her energy subsidies and price-control programs.
While Macri's move may win the support of Argentine farmers, he runs the risk of making enemies elsewhere. The decision to reduce export taxes comes alongside his declaration of a state of emergency within Argentina's electricity sector as part of a plan to raise tariffs on electricity and natural gas starting in early January. The Kirchner-Fernandez clan's energy subsidies were among its most popular social policies; by undercutting them, Macri could risk inciting protests by the former leaders' power bases.
Still, the more pressing concern will be the rapid impact Macri's policies will have on inflation. After he lifted capital controls, the value of the Argentine peso fell by 30 percent, dropping from 9.8 pesos to the U.S. dollar to 15 pesos. (It has now settled at 14 pesos to the dollar.) As a result, inflation is expected to surge by the end of the month, potentially rising even further in 2016.
Compared with Fernandez's sudden devaluation of the peso in 2014, Macri's removal of capital controls was widely expected. Argentina's private banks have promised to lend about $7 billion to the country's central bank to help combat the climbing inflation rate. This will offer much-needed relief to the government, whose international reserves are dwindling. Alfonso Prat-Gray, the country's recently appointed finance minister, is also seeking $10 billion from Wall Street firms to help Argentina settle its debt with foreign bondholders, which currently exceeds $7 billion. Additionally, Argentina has managed to secure $5 billion with the help of the Inter-American Bank and $3.1 billion worth of yuan through a currency swap with China.

Who to Watch

In the coming weeks, Stratfor will be closely monitoring the reactions of the actors who play an important role in Argentine politics:
  • Members of the former administration: Members of the former ruling party, including Fernandez herself, have already begun to criticize Macri's plans to liberalize the economy. It will be particularly important to monitor figures such as Hugo Moyano, Hector Recalde, Carlos Kunkel and Hugo Yasky, who have enough clout within the labor unions and the legislative branch to slow Macri’s progress.
  • Pro-Kirchner groups and labor unions: Groups that support the previous administration, such as La Campora, will be important to watch because they will heed any encouragement by the former president to launch protests against Macri's moves to reduce social spending, especially ahead of the next midterm and presidential elections. Meanwhile, the General Confederation of Labor, the Central Argentinean Workers Union and the Transportation Union — all of which are led by opposition figures — are calling for protests in the coming week to obtain 5,000-peso bonuses in response to the currency's recent depreciation. Though these unions do not have the power to completely derail Macri's liberalization plan, they could use their influence among transportation and manufacturing workers to instigate strikes and protests among the low- and middle-income classes.
  • Sergio Massa and Daniel Scioli: Massa, the leader of the dissident faction of the Peronist movement Front for Renewal Dissident Peronist Party (the third-largest faction in the lower house of parliament), has refrained from commenting on Macri’s policies so far. However, because Massa's party has 27 seats in the lower house, its support will be crucial to Macri’s coalition (92 seats) as it looks to push through new legislation. Scioli, the presidential candidate for the former ruling party who warned against Macri’s "neoliberal" plans for Argentina during the recent campaign, represents a powerful Kirchernist faction and will likely try to persuade Massa to join the opposition, which currently holds 109 seats. 
  • Macri's allies: The Radical Civic Union Party is the biggest ally of the new ruling party, Let's Change. Together, the two control 92 seats in the lower house of parliament. With both houses politically fragmented, Macri will need the support of the party and its leaders, including Ernesto Sanz, Mario Negro, Angel Rozas and Jose Corral, to successfully push toward further economic liberalization. In exchange, Macri may need to yield to their requests for particular appointments to the Supreme Court and the Cabinet, as well as to their policy preferences more generally.
  • Residents of Buenos Aires province: December heat and the possibility of blackouts mean street protests unrelated to Kirchnerist politics could occur.

What to Expect

Since Argentines typically travel in January, the country will likely remain tense but relatively calm for the first month of 2016. However, teachers' unions and others may start demanding higher salaries in response to Macri's policies come February, which could lead to protests and/or strikes. If protests occur, demonstrators will probably focus their demands on increased salaries, not on calls for the president's resignation.

Argentina Will Soon Enter Into Negotiations With Creditors

Argentina: Officials Soon To Enter Negotiations With Creditors

December 21, 2015 | 22:08 GMT
Argentina's government in mid-January will enter negotiations with creditors still calling for repayment after the country's massive default in 2001, Infobae reported Dec. 21. The country, which 14 years ago halted payments on roughly $140 billion in debt, owes an outstanding $10 billion to creditors who refused to accept the terms of the default. After meeting Dec. 21 with a court-appointed mediator in New York City, the new Argentine secretary of finance, Luis Caputo, is ready to enter negotiations with the remaining bondholders. After being voted into office in October, the country's new government has inherited a struggling economy and will work to introduce more market-friendly policies.

Another View Of The Incredible Lake Adjacent To San Matrin de Los Andes,...

Riding Through Torres del Paine National Park In Southern Chile

The Catholic Church In San Martin de los Andes, Argentina

Touring On A Lake Near San Martin de los Andes, Argentina

Walking In Torres del Paine National Park

Another View Of The Incredible Lake Adjacent To San Matrin de Los Andes,...

A Lake Adjacent To San Martin de los Andes,Argentina

Monday, December 21, 2015

Kirin Projects First AnnualLossAs Brasil Dries Up

Kirin projects first annual loss as Brazil dries up

Cans of Kirin Brewery beer at a supermarket in Soka City, Saitama, Prefecture, Japan©Bloomberg
Kirin’s 2011 purchase of Schincariol, Brazil’s second-largest beer group, has come under fresh scrutiny after the Japanese brewer warned of its first-ever annual loss due to the deterioration of its business in Brazil.
The company on Monday projected an annual loss of Y56bn ($462m), reversing an earlier forecast for a profit of Y58bn, its first red ink since the company listed its shares in 1949.
The Japanese brewer blamed a sharp fall in the Brazilian real and weak economic conditions in the country. Economists surveyed by Brazil’s central bank expect gross domestic product to contract 3.6 per cent this year and 2.7 per cent in 2016.
Kirin has also faced fierce competition with Ambev, Anheuser-Busch InBev’s Latin American arm, in South America’s biggest beer market.
In the first nine months of the year, the Japanese brewer’s sales in Brazil fell 23 per cent and its operating loss expanded to Y5.4bn from a loss of Y600m during the same period a year earlier.
Kirin, Japan’s second-largest brewer, was one of the country’s most aggressive buyers of foreign assets between 2006 and 2011, seeking alternatives to an ageing and shrinking home market.
It carried out more than 20 deals during that period, including the purchase of Australian beer group Lion Nathan and National Foods — subsequently merged into Lion — and a 48 per cent stake in San Miguel Brewery in the Philippines.
Most recently, it agreed to buy Fraser and Neave’s 55 per cent stake in Myanmar Brewery for $560m in August.
However, Kirin has taken a break from big acquisitions as it struggles to turn around its business in Brazil. Sceptics had long questioned whether Kirin would be able to recover the costs of spending $3.9bn to acquire Schincariol. The deal was contentious, with Kirin forced into a battle for control by dissident members of the Schincariol family who had sought a court injunction against the acquisition.
On Monday, Kirin said it would continue to try to strengthen the brand and make its distribution channels more efficient, and did not rule out slimming down its workforce in Brazil. Kirin said it had no plans to sell the business.
Shares in Kirin closed up 3.1 per cent in Tokyo, after falling nearly 4 per cent earlier in the day after media reports of the potential loss.

Sunday, December 20, 2015

Friday, December 18, 2015

"Let It Snow!" "Let It Snow!" "Let It Snow!" In Ushuaia, Argentina

A Spring Snowfall In Ushuaia, Argentina

The Ushuaia Harbor On A Freezing Day

The Memorial To The Argentine Military Personnel Who Died During The Mal...

The Ushuaia Harbor On A Freezing Morning

Sailing To Penguin Island Near Ushuaia, Argentina On a Beautiful Saturday

The War Memorial For Argentine Military Personnel Who Fought In The Malvinas (Falkin Islands) War

Jack W In Rio de Janeiro, Brasil

Argentina Peso Falls By As Much As 1/3 After Capital Controls Eliminated

December 17, 2015 7:34 pm

Argentine peso falls by almost a third as controls are lifted

Argentina's President Mauricio Macri dances on a balcony of the Casa Rosada government palace after the inauauguration ceremony in Buenos Aires©AFP
The Argentine peso fell by as much as 30 per cent against the dollar on Thursday after Mauricio Macro, the country’s newly elected president, lifted capital controlslate on Wednesday night.
But there was little sense of the market panic that followed the last devaluation in January 2014 when Mr Macri’s predecessor Cristina Fernández de Kirchner allowed the currency to devalue by 13 per cent in just 48 hours.
That is because unlike previous devaluations, the unwinding of capital controls was understood by the market as a key — albeit painful — part of Mr Macri’s plan to open and reform Argentina’s ailing economy.
“The market is very calm as the new rates make sense,” said Fernando Izzo, director at ABC Cambios, a wholesale foreign exchange brokerage. “There are no surprises for anyone.”
The move to undo what was popularly referred to as the “dollar clamp” is the biggest step taken yet by Mr Macri toward opening up Argentina’s economy since he was sworn-in as president on December 10.
The wholesale market closed at 13.4 pesos to the dollar, implying a devaluation of 27 per cent. The retail market closed at 14 pesos to the dollar, implying a devaluation of 30 per cent. But there were few operations, with most banks and foreign exchange houses not operating in the foreign currency market.
“This is a much smaller devaluation than what we were expecting,” said Alejo Costa, chief of research at Puente, a local brokerage. “It’s a reflection of just how optimistic the market is right now.”
Gustavo Quintana, a broker at PR Casa de Cambios, a local foreign exchange brokerage, said the true exchange rate against the dollar would not be know until next week. In the meantime, volatility would continue.
“Dollars came in but there were very few importers participating in the market because they have yet to adjust to the new rules,” he said. Some analysts say the peso still has room to fall.
The total amount traded was $129m compared to some $250m on an average day and the wholesale market was volatile, going as low as 11 pesos per dollar at one point.
The current rate actually puts the peso at a stronger footing than the 14.5 pesos per dollar level the currency was trading at in the black market the day before.
Bank of America Merrill Lynch cheered the move. Analysts at the bank raised the recommendation for the country’s bond investments to “overweight”.
“We expect a fast correction of external imbalances, after the recent FX [foreign exchange] announcements, and an agreement with the [creditor] holdouts by 3Q16,” said the bank, referring to a group of creditors who have been battling for full payment on Argentine bonds after rejecting debt restructurings.
One of Mr Macri’s challenge now is to make sure that the devaluation does not lead to a spiralling of already high inflation. To that end, finance minister Alfonso Prat-Gay has made clear that the central bank will be intervene if it thinks the peso is falling too much too fast in what he described as a “dirty float” system.