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Friday, April 22, 2016

FT LatAm Viva For 4/22/2016

FINANCIAL TIMES - Latam Viva: Your weekly briefing from the region
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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