FT LatAm Viva For 4/22/2016

Regional tremors By Jude Webber  April 22, 2016 Forget political earthquakes in Brazil – Ecuador got the real thing last weekend: its worst quake since 1949. It killed 570 and will cost so much to repair the devastation that US-educated populist Rafael Correa came up with a new plan: tax the rich.  “This is how a modern society responds to this kind of disaster,” said Mr Correa – or at least how a small oil economy already hammered by crude price falls, and on course to shrink by 4.5 per cent even before the quake and its several strong aftershocks, plans to try. The state will deduct five days’ salary from wages over $5,000 a month (the levy is one day for salaries of $1,000) and VAT is going up two points to 14 per cent for a year as well. Original financial schemes used to be the hallmark of Argentina (remember how it used to allow companies to import only if they matched the value of their purchases with exports to the same value?). But Mauricio Macri has pulled off quite a coup: as the Lex column put it: the hottest ticket in global bond markets this week turned out to be an offering from a serial defaulter with at least 30 per cent inflation whose main money-spinners are commodities that have been ravaged by price falls – aka, Argentina. Talking of coups, Brazil’s vice president, who only last week was rehearsing his acceptance speech, told the FT in a rare interview that he was absolutely not conspiring against President Dilma Rousseff, as she has alleged. Samba, the Brazilian national dance, puts your feet through set steps but can suddenly speed up very fast: Brazil's politicians are dancing the impeachment shuffle samba now, each side with their own predictable moves, but watch out, the tempo is set to rise. It’s enough to drive you to drink. But upscale tequila makers in Mexico reckon they are getting slammed by a levy that is more than double the tax on beer. Mexico looks unlikely to bow to pressure to change the tax regime though – indeed, it needs all the revenue it can get after bailing out Pemex, the troubled state energy company, to the tune of $4.2bn. Quote of the week “I am very upset … The same leaders and the same reforms . . . Am I supposed to wait till I’m their age to see some real change? Young people are not even listening, they have their minds set on leaving the country” – Julia Martínez, 52, a secretary, who asked that her real name not be used, on five-yearly communist party congress. Chartwatch Argentina’s turbulent time in default Video of the week The wisdom of buying Argentinian debt. The week in review Argentina bond prices rally strongly in blockbuster return   Scale of demand left many investors with far smaller allocations than they had hoped for     Ecuador president promises ‘millionaire tax’ to fund quake recovery   Levy to be imposed on citizens whose wealth exceeds $1m     Brazil’s Temer denies coup conspiracy against Rousseff   Vice-president denies allegations from the president amid her impeachment process     Post-default bonds: do buy for me Argentina   The country’s poor record has been overlooked in the rush for yield     Cuba pops the bubble of high expectations   Communist party congress ends hopes of quick reform sparked by Obama’s visit     How did Argentina pull off a $16.5bn bond sale?   Investors who scrambled to buy bonds now confront lists of major risks     Ecuador earthquake death toll rises to 525   President says reconstruction costs could reach as high as $3bn     Argentina returns to international markets with $16.5bn debt sale   Scale of order book sparks scramble for transactions in grey market     Mining taps deep reserves of rage in Peru   Country’s next president must contend with a series of land use conflicts in resource-rich country     Mexican tax leaves top-end tequila makers reeling   Drinks groups say end to levies based on price will cheer consumers, producers and government     Cuban Communist party re-elects Raúl Castro   Endorsement, along with hardline ideologue, deflates hopes of handover of political reins     Chile: Turning copper into wine   The commodity-dependent nation’s wine exporters have their sights on China’s casual drinkers     Dilma Rousseff vows long impeachment fight   Brazil’s president dismisses move as part of national tradition of coups     Venezuela faces oil production disruption   Unplanned production outages pick up among Opec members with oil prices around $40 a barrel     Argentina’s return to markets several times subscribed   Latin American country ends a 15-year exile from the international debt market     Brazil’s crisis takes on carnival atmosphere   Move against Rousseff ushers in fraught period as senate considers impeachment motion     World split in fight over drugs   As Asian nations take a hard line, differences between east and west will be aired at UN meeting     Pemex embarks on US roadshow to reassure investors   New chief González Anaya faces tough task convincing market of stability     In a post-Rousseff Brazil, how to mend a broken system   Hope must be that the country seizes the moment for catharsis, writes John Paul Rathbone     Brazil congress votes to impeach Rousseff   Decision in favour of political trial of president throws country into new era of turmoil     Brazil tensions rise amid vote on Dilma Rousseff impeachment   Protesters mass in front of congress as counting begins     Brazil braced for political showdown   Legislators vote on Sunday whether to impeach President Dilma Rousseff     Moody’s upgrades Argentine credit rating   Move shows further support for Buenos Aires ahead of $15bn bond sale     Brazil prepares for the drama of impeachment   Rousseff’s likely ouster will do little to solve her country’s problems     Argentina may add extra tranche to $15bn bond sale       Brazil’s political elite struggles to rise above leaks   Barrage of disclosures point to fragility of country’s institutions     Spain’s industry minister Soria quits amid Panama Papers fallout   Resignation comes at awkward time for acting prime minister Rajoy     FT LatAm Viva features commentary by the FT's Latin America team and stories fromacross the FT. 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