Argentina's Economic Collapse

[GigiBowman]

If you have never seen this, it's worth watching.

You would think we could learn from the mistakes of others....


Argentina's Economic Collapse (FULL VERSION)

 

[Toro]

Of course, economic incompetence has long been a hallmark of Argentina.

A few days ago, the government seized private pensions to fund their spending because they are shut out of global capital markets. What a joke.

Argentine bonds plunged, sending benchmark dollar yields over 24 percent, and stocks sank to a four-year low on speculation the government will nationalize pension funds in a bid to attain financing and stave off a second default this decade.

President Cristina Fernandez de Kirchner will unveil a new pension fund plan at 4 p.m. New York time today, the country's social security administration said in a statement. Fernandez will nationalize the system, giving the government control of $29 billion in retirement accounts, La Nacion reported, citing government officials it didn't identify.

Fernandez has struggled to raise cash to cover growing financing needs as the global financial crisis drives down prices on the country's commodity exports and erodes demand for higher- yielding, developing-nation debt. The government's borrowing needs will climb to $11.2 billion next year from $6.6 billion in 2007, Credit Suisse Group said in an Oct. 8 report.

``The government is explicitly saying that it has problems meeting debt maturities and this is a last ditch measure to do so,'' said Javier Salvucci, an analyst with Buenos Aires-based Silver Cloud Advisors.

Yields on the government's 8.28 percent bonds due in 2033 surged 4.35 percentage points to 24.77 percent, the highest since the country issued the debt in a 2005 restructuring, according to JPMorgan Chase & Co. The bond's price sank 7.91 cents to 29 cents on the dollar, leaving it just cents above the price on defaulted securities that investors held out of the 2005 renegotiation....

The South American country hasn't had access to international capital markets since it defaulted on $95 billion of bonds in 2001. Holders of some $20 billion of those bonds rejected the government's 2005 payout of 30 cents on the dollar, the harshest sovereign restructuring since World War II.

Bloomberg.com: Worldwide

 

[sparky]

what goes around comes around.....

 

[BaronVonBigmeat]

It's also worth noting that Argentina used to be quite wealthy, easily on par with countries in Europe and only a little bit below the US. Cuba too, for that matter. When people laugh and say "pffft, this is america, it can't happen here!" they are mistaken.

 

[editec]

It's also worth noting that Argentina used to be quite wealthy, easily on par with countries in Europe and only a little bit below the US. Cuba too, for that matter. When people laugh and say "pffft, this is america, it can't happen here!" they are mistaken.

It is already happening here, Baron.

The DREPRESSION much like the revolution, will not be televized

 

[Skull Pilot]

One has to wonder if our retirement funds are next

 

[editec]

One has to wonder if our retirement funds are next

Pension funds are in trouble right now, yes.

Employers' pension funds really depend on those industries being going concerns to keep them solvent.

Since so many American based industries are in serious trouble, it's a drop dead certainty that those pension funds are suspect.


I fully expect the standard of living in this nation to continue its decline over the next decade no matter who is POTUS< and no matter which party controls congress.

The Fundamentals are in the tank, and since we the people can't keep borrowing to keep the consumer driven economy going, it's damned sure that it's not going to get better UNLESS WE CHANGE THE RULES OF THE GAME.

In other wrods, while there are major policy shifts we could take to fix this nation's economy, I doubt we'll do those things.

the people on the top benefit too much personally for them to tgive up the advantages they've worked so hard (over the last 30 years) to grant themselves and their class.

And sicne they have about 1/3 of the population convinced that their well being is tied to the superwealthy getting even super duper wealthier, I see virtually no change that this downward trend will change direction.

I hope I am completely wrong, but I do not see any way this is going to change in one or two presidental election cycles.