• Tag Archives Argentina
  • Emerging Market Debt Risk Tumbles To 10-Year Lows, But…

    A serial deadbeat (Argentina) got investors to buy 100-year bonds, Sri Lanka’s latest debt sale was oversubscribed by 10 times, tiny Belarus is poised to issue eurobonds, and even Papua New Guinea, the impoverished Pacific Island nation, is planning its overseas debut in the second half of the year.
    But, as Bloomberg reports, that’s just a small sampling of the risks emerging-market investors have started taking, even as yields remain relatively thin.
    But there’s more: defaulted notes from Mozambique are among the best performers in 2017. The Maldives, a tiny nation in the Indian Ocean, sold its first international bond earlier this month. And Ecuador, where the former president disparaged bondholders as ‘true monsters’ when he defaulted in 2008, had no trouble raising $3 billion.
    Century bonds in EM are still rare, but have become more popular as global yields have collapsed…

    This post was published at Zero Hedge on Jun 23, 2017.


  • US Treasury Secretary Mnuchin Still Interested In Ultralong (High Duration) Sovereign Debt As Argentina Sees strong demand for surprise 100-year bond

    This is a syndicated repost courtesy of Confounded Interest. To view original, click here. Reposted with permission.
    US Treasury Secretary Steve ‘The Munchkin’ Mnuchin said on Bloomberg News today that Treasury is still considering issuing ultra-long sovereign debt. This comes on the news that Argentina is issuing a 100 year sovereign bond that is in hot demand. Reuters – Argentina sold $2.75 billion of a hotly demanded 100-year bond in U. S. dollars on Monday, just over a year after emerging from its latest default, according to the government.
    The South American country received $9.75 billion in orders for the bond, as investors eyed a yield of 7.9 percent in an otherwise low yielding fixed income market where pension funds need to lock in long-term returns.
    Thanks to a stronger-than-expected peso currency, the government has increased its overall 2017 foreign currency bond issuance target to $12.75 billion from its previous plan of issuing $10 billion in international bonds, Finance Minister Luis Caputo told reporters in Buenos Aires.

    This post was published at Wall Street Examiner by Anthony B Sanders ‘ June 20, 2017.


  • Argentina issues 100-year bond. What could possibly go wrong?

    Apparently while I was in the air yesterday flying between Asia and Europe, the financial system proved once again that it believes in magic beans.
    The latest absurdity is that the government of Argentina sold $2.75 billion worth of bonds yesterday afternoon.
    It’s not strange or unusual for a government to sell bonds; it happens multiple times across the world nearly every single day of the year.
    What’s totally insane about yesterday’s bond sale in Argentina, though, is the duration of these particular bonds.
    Remember that a bond is similar to a loan; as an investor, you’re basically loaning money to whichever government issues the bond.
    And, like a loan, a bond has a maturity date – the date at which the government is supposed to pay you back the ‘face value’ of the bond.
    often have a 3-7 year term. Student loans can easily go 10 or 15 years. A home mortgage can last 30 years.
    It’s the same with government bonds, which often have a term up to 30 years.

    This post was published at Sovereign Man on June 20, 2017.


  • Argentina 100 Year Bond Sale 3.5x Oversubscribed

    When we previewed yesterday unexpected announcement that Argentina would join Mexico, Ireland and the U. K. in issuing a 100 year bond, just one year after emerging from its latest default, we said “we expected the potential yield of 8.25% to come down as the offering will likely be many times oversubscribed.” It was.
    According to Reuters, late on Monday Argentina sold $2.75 billion of a “hotly demanded” 100-year bond in U. S. dollars, and as expected the surge for yield resulted in 3.5x oversubscription: the South American country received $9.75 billion in orders for the bond, which in turn lowered the final yield to 7.9% with a 7.125% cash coupon, from the initial price talk of 8.25% in what Reuters dubbed an “otherwise low yielding fixed income market where pension funds need to lock in long-term returns.” Luckily for those same pension funds, they never have to worry about returns on capital as there is zero chance Argentina will not default again in the next 100 years.
    Meanwhile, courtesy of yield-starved investors around the globe, the Argentina government increased its overall 2017 foreign currency bond issuance target even more, to $12.75 billion from its previous plan of issuing $10 billion in international bonds, Finance Minister Luis Caputo told reporters in Buenos Aires, in large part to fund its soaring budget deficit. As Reuters notes, Argentina will tap international capital markets to finance a fiscal deficit of 4.2% of GDP. Caputo said Argentina has $2.6 billion in bonds left to be issued this year. The new paper could be denominated in euros, yen or Swiss francs. It is not clear if the remaining issues will be in 100 year or longer maturities.

    This post was published at Zero Hedge on Jun 20, 2017.


  • Argentina (!) Sells 100-Year Dollar-Denominated Junk Bonds

    Yield-desperate investors stop before nothing. What have central banks wrought? Junk-rated, deficit-plagued, inflation-whacked Argentina just sold $2.75 billion of 100-year dollar-denominated bonds. This was the first time ever that a junk-rated country was able to sell 100-year bonds denominated in a foreign currency, or any currency.
    Argentina sports a ‘B’ credit rating from Standard & Poor’s. Five notches below investment grade. Deep junk.
    And 100 years is a very, very long time for Argentina and its regularly beaten-up creditors: Just over the past 65 years, it has defaulted six times – in 1951, 1956, 1982, 1989, 2001, and its ‘selective default’ in 2014. Its default in 2001 on $80 billion of dollar-denominated debt was the largest sovereign default at the time.
    And yet, yield-desperate investors don’t seem to care. According to The Wall Street Journal, demand for the private-placement offering was such that Argentina could sell those ‘century’ bonds at a yield of 7.9%, down from the initial price talk of 8.25%.

    This post was published at Wolf Street on Jun 20, 2017.


  • Bill Blain Flips Out: “Not Much Surprises Me Any More About Markets, But Really? Really!?”

    On Monday morning, we reported that in a stunning development, chronic defaulter Argentina – which just one year ago emerged from its latest bankruptcy – has found enough willing greater fools to sell 100-year bonds to. One person who especially stunned, was Mint’s Bill Blain, who issued an entire note describing his disgust with what the market has devolved to.
    * * *
    Argentina 100 Year Bonds: Really? Nobody Believes, But They Will Buy.
    ‘Everyone should learn to Tango before they die.. ‘
    Markets can be a triumph of hope over reality. The news Argentina is going to launch a 100 year century bond caught my eye today.

    This post was published at Zero Hedge on Jun 20, 2017.


  • Cry For Argentina! Issuing 100 Year Sovereign Debt As Fiscal Deficits Grow To Worst Since 2000

    Cry for Argentina.
    Argentina, which has defaulted on its debt seven times, is now faced with the worst fiscal gap since 2000.
    (Bloomberg) Argentina is planning to sell its first 100-year bond a year after returning to global capital markets, as it grapples with a soaring budget deficit.
    The bond, which will be used to shore up its budget and refinance debt, may be priced as soon as Monday and yield about 8.25 percent, according to a person with knowledge of the matter, who asked not to be named because the deal is private. Citigroup Inc. and HSBC Holdings Plc are managing the sale. The debt-issuance plan was announced on Twitter by the Argentine Finance Ministry, which hasn’t provided further details.

    This post was published at Wall Street Examiner on June 19, 2017.


  • Argentina Unexpectedly Announces Sale Of 100-Year Bonds

    One year after Argentina emerged from its latest sovereign bankruptcy, and at a time when the Latin American nation grapples with a surging budget deficit, Argentina surprised markets by announcing (on Twitter) its intention to sell its first 100-year bond, taking advantage of a world starved for yield.
    The issuance, expected to price on Monday with a potential yield of 8.25% according to Reuters IFR – we expect this number to come down as the offering will likely be many times oversubscribed – came as a surprise, as Finance Minister Luis Caputo has said Argentina would meet the rest of its financing needs in non-dollar currencies after selling $7 billion in dollar bonds in January. According to Reuters, Citi and HSBC are acting as lead book runners on the deal, while Nomura Securities and Banco Santander are co-managers.

    This post was published at Zero Hedge on Jun 19, 2017.


  • From Yukon to Patagonia, gold explorers stir after sleep

    The number of holes drilled at gold deposits has been rising steadily for more than a year, according to S&P Global Market Intelligence. And while early-stage exploration budgets haven’t kept pace with spending at existing mines, prospecting hot spots are starting to pop up in traditional destinations Canada, Australia, and Latin America. In some parts of Argentina, exploration has jumped about 50 percent, mainly for lithium but also for gold in provinces such as Santa Cruz, according to state-controlled energy company YPF SA. Chile’s government also sees a pickup this year with prospectors focusing on both copper and gold. Colombia is also attracting more attention.
    In some parts of Argentina, exploration has jumped about 50 percent, mainly for lithium but also for gold in provinces such as Santa Cruz, according to state-controlled energy company YPF SA. Chile’s government also sees a pickup this year with prospectors focusing on both copper and gold. Colombia is also attracting more attention.
    Drilling successes are adding to the interest. Aurion Resources Ltd. shares have more than tripled since Feb. 1 when it announced a discovery in northern Finland, while SolGold Plc has risen 12-fold in the past year as it drilled out a copper and gold find in Ecuador. This week’s $431 million deal between Eldorado Gold Corp. and Integra Gold Corp. is the latest acquisition driven by a need to secure new ounces.
    ‘We need more exploration in the industry; it’s been such a long downturn,’ Mark Ferguson, head of mining studies at S&P Global Market Intelligence, said in a phone interview from Halifax, Nova Scotia. ‘A lot of producers are going to start facing medium-term shortfalls in their pipeline if they’re not replacing the reserves that they’re actively mining.’

    This post was published at bloomberg


  • The Knives Come Out for Trump

    A Minor Derailment GUALFIN, ARGENTINA – Yesterday, stocks fell.
    And volatility shot up.
    ***
    Reports Bloomberg:
    The Dow Jones Industrial Average tumbled more than 370 points, Treasuries rallied the most since July and volatility spiked higher as the turmoil surrounding the Trump administration roiled financial markets around the globe.
    Major U. S. stock indexes tumbled the most in eight months, while the CBOE Volatility Index [which measures investors’ expectations of price swings on the S&P 500] jumped the most since the U. K. voted to leave the European Union last June, shattering the calm that gripped markets in the past month as the crisis threatened to derail the policy agenda that helped push equities to records as recently as Monday.

    This post was published at Acting-Man on May 19, 2017.


  • The Fed Will Blink

    Honest Profession
    GUALFIN, ARGENTINA – The Dow rose 174 points on Thursday. And Treasury Secretary Steve Mnuchin said we’d have a new tax system by the end of the year.
    Animal spirits were restless. But which animals? Dumb oxes? Or wily foxes? Probably both.
    Since Thursday there have been two additional very spirited up days with large gaps – this is very rare in the DJIA, particularly from such a high level after a ~240% rally since the lows made 8 years ago… it continues to feel like a blow-off (and it happens against the backdrop of a sharp slowdown in money supply growth) – click to enlarge.
    But what caught our attention were the central bankers strutting across the yard and crowing with such numbskull cackles that even barnyard animals would be embarrassed by them. There was a time when central banking was an honest profession.
    Central bankers provided financing for the government. They backed the banking system, too, by holding savings as reserves, which they lent to solvent member banks in emergencies. They were tight-lipped, tight-laced, and tightwads. Their role was to say ‘no’ more often than ‘yes.’
    When the king wanted money to fight in a war… or build a bridge… the banker would give the terse reply: ‘Sire, we don’t have any.’ Real money was backed by gold. And credit had to be backed by real money, which meant it had to be saved. Savings were limited, as was money.

    This post was published at Acting-Man on April 25, 2017.


  • Trump Is An Insider Now

    Conspiracy of the Few
    GUALFIN, ARGENTINA – ‘U. S. stocks fall on Trump talk…’ began a headline at Bloomberg. Or it may be Trump action. We had already counted six major campaign promises – including no O’care repeal and no ‘America First’ foreign policy – already buried (some for the better).
    Then came four more major policy reversals on Wednesday. Seeking Alpha reports:
    In a single day, President Trump appeared to reverse his positions on no fewer than four key pledges that arguably led to his election victory.
    Trump told WSJ [The Wall Street Journal] yesterday that China is no longer a currency manipulator, he respects Janet Yellen and perhaps could nominate her to another term leading the Fed, he would support the Ex-Im [Export-Import] bank after previously saying he would shut it down (good news for the likes of GE and Boeing), and NATO was no longer obsolete since it is fighting terrorism.
    In the same interview, Trump said he believed the dollar was ‘getting too strong,’ sending the dollar lower and gold higher.

    This post was published at Acting-Man on April 18, 2017.


  • Ray Dalio Praises Trump: Predicts “Huge” Changes; It Will Be “Glorious To Be Rich”

    In one of the most euphoric praises for Donald Trump and the president-elect’s fledgling administration to date, overnight Bridgewater founder Ray Dalio said economic changes under the Trump administration may be more dramatic than shifts from ‘the socialists to the capitalists’ in the U. K., U. S. and Germany from 1979 to 1982, and predicted that “we are about to experience a profound, president-led ideological shift that will have a big impact on both the US and the world.”
    Comparing Trump to Margaret Thatcher, Ronald Reagan and Helmut Kohl, Dalio said the incoming administration may have a much bigger impact on the U. S. economy than can be measured by tax changes and fiscal spending. The Trump era could ‘ignite animal spirits’ and attract productive capital.
    In his summary of Trump’s economic policies, Dalio urges readers to read Ayn Rand “as her books pretty well capture the mindset. This new administration hates weak, unproductive, socialist people and policies, and it admires strong, can-do, profit makers. It wants to, and probably will, shift the environment from one that makes profit makers villains with limited power to one that makes them heroes with significant power.”
    The shift from the past administration to this administration will probably be even more significant than the 1979-82 shift from the socialists to the capitalists in the UK, US, and Germany when Margaret Thatcher, Ronald Reagan, and Helmut Kohl came to power. To understand that ideological shift you also might read Thatcher’s ‘The Downing Street Years.’ Or, you might reflect on China’s political/economic shift as marked by moving from ‘protecting the iron rice bowl’ to believing that ‘it’s glorious to be rich.’ He adds that the “shift by the Trump administration could have a much bigger impact on the US economy than one would calculate on the basis of changes in tax and spending policies alone because it could ignite animal spirits and attract productive capital. Regarding igniting animal spirits, if this administration can spark a virtuous cycle in which people can make money, the move out of cash (that pays them virtually nothing) to risk-on investments could be huge.”
    Regarding attracting capital, Trump’s policies can also have a big impact because businessmen and investors move very quickly away from inhospitable environments to hospitable environments. Remember how quickly money left and came back to places like Spain and Argentina? A pro-business US with its rule of law, political stability, property rights protections, and (soon to be) favorable corporate taxes offers a uniquely attractive environment for those who make money and/or have money. Looking at foreign policy under Trump, Dalio predicts that “we should expect the Trump administration to be comparably aggressive. Notably, even before assuming the presidency, Trump is questioning the one-China policy which is a shocking move. Policies pertaining to Iran, Mexico, and most other countries will probably also be aggressive.“

    This post was published at Zero Hedge on Dec 20, 2016.


  • Herd Behavior: Why Lack Of Patience Could Spark Argentina’s Next Crisis

    Time, that fickle mistress, is persistently stalking Macri’s administration and is not on his side.
    It’s been almost one year since President Mauricio Macri shocked the world by winning Argentina’s presidential elections, and the country is in a state of flux – hovering in an uncertainty characterized by hope, anxiety, fear and just a few whiffs of the dreaded stench of failure.
    Besides displaying a shocking lack of political PR and taking on a few petty wastes of time, this government is doing most things within its power correctly to right the course of a vessel that seemed destined to crash.
    Despite these positive steps, one sinister question looms: Has the Macri government managed to avert the looming economic crisis entirely, or is it merely kicking the can down the road? It’s scary, but Argentina is in uncharted territory. Rather than boom, the economy is in a prolonged recession that could be heading for an all too familiar outcome – bust.
    Yet this time, the question really isn’t about economic fundamentals. The real variable threatening Macri isn’t economic at all – it is time. Time, that fickle mistress, is persistently stalking Macri’s administration and is not on his side. And Argentines aren’t exactly famous for patience.

    This post was published at Wolf Street on October 26, 2016.


  • Saudi Arabia Launches Sale Of 5, 10 And 30 Year Bonds, Seeks To Raise Up To $15 Billion

    Saudi Arabia has officially launched its much anticipated, first international bond sale on Wednesday, as the kingdom turns to debt markets to help ease a fiscal squeeze from the two-year slump in oil prices, which has slammed not only the country’s economy, leading to a period of unprecedented austerity resulting in widespread job cuts and a slowdown in local construction and infrastructure projects, but also has impacted the country’s bank sector where the largest bank has seen its shares plunge to all time lows, as bets on a currency devaluation continue to rise.
    As Bloomberg reported moments ago, the sale has officially started, with Saudi Arabia seeking to sell between $10 and $15 billion in three tranches, a 5Y, 10Y and 30Y offering. Pricing is expected to take place tomorrow, Oct. 19; with the books set to close at 5pm in NYT on Tuesday October 15. Tentative pricing will be as follows:
    Issuer: Kingdom of Saudi Arabia acting through the Ministry of Finance
    5Y: 160 area 10Y: 185 area 30Y: 235 area Expected Ratings: A1/AA- (Moody’s/Fitch) Format: 144A/RegS sr unsecured notes Books: C, HSBC, JPM Settlement: T 5 According to the FT, Riyadh is thought to be targeting a sale between $10bn and $15bn, making it the largest issue of international debt in the Middle East and a potential rival to Argentina’s record-breaking $16.5bn emerging market bond sale earlier this year.

    This post was published at Zero Hedge on Oct 18, 2016.


  • SEPT 26/BIG DEBATE TONIGHT BETWEEN TRUMP AND CLINTON/CHINA’S TOTAL DEBT APPROACHING 300% AS SMALLER BANKERS HAVING TROUBLE WITH FINANCING/MERKEL RULES OUT BAIL OUT FOR DEUTSCHE BANK/DEUTSCHE BANK…

    Gold $1339.70 up $2.50
    Silver 19.52 down 21 cents
    In the access market 5:15 pm
    Gold: 1338.50
    Silver: 19.46
    THE DAILY GOLD FIX REPORT FROM SHANGHAI AND LONDON
    The Shanghai fix is at 10:15 pm est and 2:15 am est
    The fix for London is at 5:30 am est (first fix) and 10 am est (second fix)
    Thus Shanghai’s second fix corresponds to 195 minutes before London’s first fix.
    And now the fix recordings:
    Shanghai morning fix Sept 26 (10:15 pm est last night): $ 1338.38
    NY ACCESS PRICE: $1334.75 (AT THE EXACT SAME TIME)
    Shanghai afternoon fix: 2: 15 am est (second fix/early morning):$ 1337.45
    NY ACCESS PRICE: 1334.65 (AT THE EXACT SAME TIME)
    HUGE SPREAD TODAY!!
    XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
    London Fix: Sept 26: 5:30 am est: $1336.30 (NY: same time: $1335.70: 5:30AM)
    London Second fix Sept 16: 10 am est: $1340.50 (NY same time: $1341.40 , 10 AM)
    It seems that Shanghai pricing is higher than the other two , (NY and London). The spread has been occurring on a regular basis and thus I expect to see arbitrage happening as investors buy the lower priced NY gold and sell to China at the higher price. This should drain the comex.
    Also why would mining companies hand in their gold to the comex and receive constantly lower prices. They would be open to lawsuits if they knowingly continue to supply the comex despite the fact that they could be receiving higher prices in Shanghai.

    This post was published at Harvey Organ Blog on September 26, 2016.


  • Hyperinflation is nigh so gold will go high

    This coming autumn, we are likely to see the beginning of the hyperinflationary phase of the sovereign debt crisis. Hyperinflation normally hits an economy very quickly and unexpectedly and is the result of the currency collapsing. Hyperinflation does not arise as a result of increasing demand for goods and services.
    The course of events in a hyperinflationary scenario can be summarised as follows:

    Chronic government deficits Debt issuance and money printing escalating rapidly Bonds falling – interest rates rising fast Currency collapsing The above process turns into a vicious circle that accelerates quickly. The more money the government prints, the faster the currency will fall and the faster the currency falls the more money the government must print. Once the hyperinflationary spiral has started, it will feed itself like we have seen in the Weimar Republic, Zimbabwe, Argentina and many other places.

    This post was published at GoldSwitzerland on August 16th, 2016.


  • So What’s Going on with Inflation in Argentina?

    An economic nightmare that’s politically painful to untangle. When Argentine President Mauricio Macri took power, his economic team began to dismantle his predecessor’s heavy-handed policies – a process that had painful recessionary consequences for the Argentine population. Macri and his team repeatedly promised that by the second half of 2016, the pain would be worth it, the economy would recover and we would see some results.
    In a press conference yesterday, Macri announced that his policies have successfully put the country’s economy back on track. He based this on three premises:
    ‘We have begun to reduce inflation’ ‘We have made external commerce [imports and exports] more transparent’ ‘We have launched a new plan to help small- and medium-sized businesses’ Based on these three successes, Macri claimed that while the starting point wasn’t easy, ‘we believe this is working.’ And while the economy appears to have stabilized since the turmoil we saw at the beginning of the year, stability is a far cry from a return to growth.

    This post was published at Wolf Street on July 4, 2016.


  • With 5 Million Unemployed, Spain Still Can’t Find Workers

    With soaring youth unemployment, and close to 5 million people out of work overall, one would assume that the last problem Spain would encounter would be that it can’t find workers to fill open jobs.
    However, as Bloomberg reports, Spain is facing labor shortages as employers struggle to find capable employees. “We were looking for people for two months. We managed to find one in Spain. We turned to Argentina for others” explains Samuel Pimentel, a headhunter who was searching for specialist consultants for a client.
    Pimentel’s client asked for a list of candidates trained in”Agile” project management techniques for helping companies boost their productivity by using more IT systems. The client was even willing to pay $220,000 a year, almost 10 times the average salary in Spain, but Pimentel had a difficult time identifying candidates.
    The main reason for this issue according to Valentin Bote, head of research at Randstad, a recruitment agency, is that the unemployed lack the skills to fill the available positions.
    “It’s a paradox. The unemployment rate is too high. Yet we’re seeing some tension in the labor market because unemployed people don’t have the skills employers demand.” Bote said.

    This post was published at Zero Hedge on Jul 1, 2016,.


  • Argentina’s Former Public Works Secretary Caught Burying $8.5 Million

    Back in April, an Argentine prosecutor requested that former President Cristina Fernandez de Kirchner be investigated in a wide-ranging money laundering probe that allegedly involved a prominent government contractor and associate.

    This post was published at Zero Hedge by Tyler Durden – Jun 15, 2016.