Stock Market News & Stocks to Watch from StraightStocks » Buenos Aires

Polymer Group, Inc. (POLGA.OB) Acquires Remaining 40% Stake in its Argentinean Joint Venture

QualityStocks — Fri, 30 Oct 2009 19:53:27 +0000

Polymer Group, Inc. reports completion of its transaction to purchase a 40 percent minority stake in Dominion Nonwovens Sudamericana, S.A. (PGI Argentina) from its partner, Guillermo E. Kraves with terms of the transaction undisclosed. PGI Argentina has been operating as a joint venture since 1997. The company is located near Buenos Aires, Argentina and began operations [...]

Pity the Investors Counting on a Bull Market

Bill Bonner — Mon, 21 Sep 2009 18:36:11 +0000

pLet’s get this straight./p pHousehold credit is shrinking#8230;br / Profits are shrinking#8230;br / Employment is shrinking#8230;br / Housing values are shrinking#8230;br / The wage base is shrinking#8230;/p pBut the recession is over!/p pWhoa#8230; how is that possible? /p pThis weekend’s news brought no surprises. For example, the housing picture is still depressing – unless you’re a buyer./p pThere’s “no bottom in sight” to Florida condo prices, says Barron’s. And Reuters warns that option ARM mortgages “are about to explode.” At least, that’s what the attorney general of the sovereign state of Iowa says. The option gives the homeowner the right to pay only the interest (or in some cases less than the interest) for the first few years. They’re sometimes called I.O. mortgages (interest only). And now these mortgages, written at the height#8230;/p

The 4 Reasons to Skip Today’s Gold Rush

Contrarian Profits — Fri, 11 Sep 2009 20:22:59 +0000

pIn the spirit of not suffering from confirmation bias, in today’s emstrongNotes/strong/emstrong /strongwe will try to make the bearish case emagainst/em gold. So before you storm emstrongNotes/strong/em HQ in Buenos Aires craving blood, hear us out. Many of our staff here love gold and have long term holdings. /p pThis issue is entirely in the contrarian spirit of playing devil’s advocate. So put your pitchforks down. Take a deep breath. There is plenty of space to poke holes in (or rant) about our thesis by writing to a href="mailto:info@contrarianprofits.com" target="_blank"info@contrarianprofits.com/a/p pSo here it goes. The four reasons you shouldn’t buy gold today…/p pReason 1: Did you know that the seventh largest holder of gold in the world is not a country, but an exchange traded fund? Yes, gold ETF SPDR Gold Shares#8230;/p

Goldman…Goldman…Goldman…

Bill Bonner — Thu, 06 Aug 2009 17:31:21 +0000

p Goldman Sachs Would Have Collapsed If Not For Henry Paulson./p pThe Dow slipped a bit yesterday – only 39 points. Everyone is watching. They want to see how far this rally carries on. Many think it is more than a bear market bounce; they think it is for real./p pThe prevailing opinion is that quick action by the feds avoided a more serious meltdown. Ben Bernanke says he was working to prevent a “second great depression.”/p pAnd now that the crisis is past, the economy is slowly climbing out of its hole. The second quarter showed GDP falling at 1% per year in the US#8230; rather than the 6.4% rate recorded earlier in the year. Housing sales have perked up. Oil is trading#8230;/p

Doug Casey’s Trade of the Decade: Short Bonds, Buy Metals

Contrarian Profits — Thu, 30 Jul 2009 17:11:33 +0000

pAnother underground investor mowing down the green shoots is a href="http://www.caseyresearch.com" class="alinks_links"Doug Casey/a of Casey Research. We know Doug well. He owns land in Argentina’s Salta province. And he’s a frequent visitor of strongemNotes/em HQ/strong. /p pLast time he was down, we went out for a big steak dinner in the Palermo district of Buenos Aires, where our offices are. After dinner, Doug regaled us with stories of his near death experiences in Third World countries. Doug has made fortunes in countries that most people couldn#8217;t pronounce!/p pDoug is very contrarian, and he #8220;lets the bastards have it#8221; like no one else we know. It used to be that even in front of an audience full of anarcho-capitalists Doug would clear out a few seats./p pBut times they are#8230;/p

When the Bailout Fails, the Feds Will Pass Another One

Bill Bonner — Thu, 02 Jul 2009 22:00:39 +0000

pBankruptcies, Depressions and Mark Stanford with his Argentine beauty./p pEverything is working out just like we thought it would. The stock market is performing as expected. The economy is on track. Even the politicians are doing what they thought they would./p pLet’s begin with the stimulus/bailout/boondoggle/BS plan. As anticipated, it has failed. That is, the economy is getting worse, not better. It has failed the test set for it by its own creators. Back when the Obama Team was arguing for a big bailout bill, it warned that without a bailout unemployment would rise above 8% in 2009. ‘Pass this bill today,’ said Ben Bernanke, or words to that effect, ‘or there may not be a tomorrow for the US economy.’/p pCongress dutifully#8230;/p

Prieur’s readings

Prieur du Plessis — Sat, 13 Jun 2009 05:39:38 +0000

This post provides links to some interesting articles I have read over the past few days that you may also enjoy.

FREE Gold Report

Contrarian Profits — Fri, 01 May 2009 18:42:31 +0000

pIn the gold business, there are two kinds of companies, says mining guru a href="http://www.caseyresearch.com" class="alinks_links"Doug Casey/a. First, there are the companies that dig gold out of the ground after it has been discovered. These are the #8220;producers.#8221; These companies have done well during the current gold bull market – up as much as 200% during that period./p pBut what most investors don#8217;t realize is that it#8217;s the second type of company, the small gold #8220;explorers,#8221; that always produce the biggest gains in gold bull markets./p pThese are the companies that send geologists around the world, scouring for the next gold discovery. They find a promising deposit and get samples of the rock beneath the surface using drill rigs. If the samples indicate there#8230;/p

Eat the Rich!

Contrarian Profits — Fri, 01 May 2009 18:17:21 +0000

pThe anti-wealth rhetoric isn’t confined to Argentina’s dysfunctional democracy. Will’s father, Bill, who recently visited us down here in Buenos Aires, says the “war against capitalism” is a worldwide phenomenon./p pBill pays taxes in Britain, where part of his publishing business is based. But now those taxes are going up. Governments, of course, have to pay for their boneheaded bailouts and ‘stimulus’ packages somehow. And so like the Peronists down in Argentina, they target “the rich.”/p pThe feds – both in Britain and back at home in America – have chosen an easy target… the rich!/p pIn the public mind, ‘rich’ and ‘banker’ are inseparable. Like ‘corrupt’ and ‘politician.’ What’s more, the rich were at the scene of the crime when the financial#8230;/p

Voodoo Economics

Bill Bonner — Wed, 29 Apr 2009 19:55:49 +0000

pFinally…we’re back in London. We left at the beginning of April…went to San Diego and Los Angeles…then to Buenos Aires and Salta…then to Paris for a few days.. and now we’re back. London is cold and rainy…just like we left it. Not exactly home…but it will do. But what’s this? strongThe City seems to be winding down. All those hot shots in the financial sector aren’t so hot any more./strong /p pIn the space of just ten years, the percentage of GDP generated by the financial sector almost doubled – from 5.5% in 1996 to 10.8% a decade later. But now the whole sector is shrinking…along with bonuses…payrolls…and expense accounts./p pAnd since Britain counted so heavily on the financial high fliers and their#8230;/p

Is America a Nation of Laws or a Nation of Banks?

Contrarian Profits — Mon, 27 Apr 2009 18:56:16 +0000

tr strongNotes from thebr / Investment Underground/strongbr / /tr tr Monday, April 27, 2009br / Palermo Viejo, Buenos Aires, Argentina pstrongWelcome to emSopranos /emUSA… Can the “junk-stock” rally last? Credit to get worse before it gets better… Feds’ “hair of the dog” recovery plan… Shockwave coming… Jim Rogers on why he’s not buying stocks… Introducing your new emNotes /emtax expert, Raife Neuman… And more! /strong /p pstrong*** What kind of men have we entrusted to manage our economy? And whose interests do they serve? /strongGet the answer to either of these questions wrong and you’re in for a rough ride as an investor./p pstrong*** Consider the facts surrounding the Bank of America’s takeover of Merrill Lynch. /strong /p pThanks to New York Attorney General Andrew Cuomo, we know that former Treasury secretary Hank “The Hammer”#8230;/p/tr

Cry All You Want

Bill Bonner — Fri, 24 Apr 2009 21:02:05 +0000

pWe recall a meeting, back in the ’90s, with Mr. Carlos Menem. “Can investors rely on Argentina’s commitment to keep the dollar and the peso linked together?” we asked./p p“Absolutely,” replied Argentina’s president. “We would never give up the peso-dollar link. It is too important to our economy. Without it foreign investors would leave and the economy would collapse.”/p pstrongFive years later, Argentina cut the peso loose from the dollar. Foreign investors fled and the economy collapsed./strong/p pWhat lesson can you draw from this narrow set of facts? If you say, ‘politicians can’t be trusted,’ you are merely stating an obvious, universal truth, like ‘public toilets stink.’ But do they stink more on the pampas than, say, in London or New York? That#8230;/p

Rabid with Debt

Bill Bonner — Fri, 24 Apr 2009 20:53:21 +0000

p “How do you feel now?” asked a reporter for a local investment magazine. “I mean, you’re a contrarian…and you were right about so much?”/p p“Not exactly,” we explained. “Yes, we saw the problem coming. And we expected the government would do all the wrong things – which it has. strongBut we never imagined that they’d do so many stupid things all at once.”/strong/p pThere are only two examples from modern history of depressions such as this – the ’30s in America and the ’90s in Japan. Both times, the governments did stupid things. But this time, the U.S. government has outdone them all. They’ve committed $13 trillion to programs that make no sense theoretically…and have never worked when they’ve been tried./p pstrongIf you’ll#8230;/strong/p

What’s China’s Gameplan?

Bill Bonner — Fri, 24 Apr 2009 14:00:40 +0000

pBuenos Aires, Argentina Is the rally still on? We’re not sure. Wednesday, the Dow fell 83 points…after a weak bounce on Tuesday. We expected the rally to last until June and to take the Dow back to the 10,000 range. But anything could happen.br / Andstrong if you depend on 91-day T-bills for your spending money, you’re in a world of hurt./strong The yield is only 0.13%./p pBut maybe things are better on the other side of the planet. How’s China doing? Analysts are “cautiously optimistic,” says a emNew York Times/em report./p pRetail spending in China is said to be up 15%./p pMeanwhile, a report tells us that China is stepping up its purchases of U.S. Treasury debt./p pHmmm… Why would China be doing that? The official response to#8230;/p

How to Protect Your Finances from Reckless Government Spending

Contrarian Profits — Thu, 23 Apr 2009 20:17:38 +0000

tr strongNotes from thebr / Investment Underground/strong /tr tr pThursday, April 23, 2009/p pPalermo Viejo, Buenos Aires, Argentina/p pstrongThe greatest economic disaster in recorded history (and how to profit from it)#8230; Your market ”script”#8230; Lessons on guerrilla investing#8230; Banks switch sides#8230; The best communications company in the world#8230; 3 sectors you should own now#8230; Your key to “permanent wealth”#8230; A massive glitch in the administration’s matrix#8230;/strongstrong /strong strongemNotes/em subscribers beat up on your editor#8230; 1,159% gains as stocks go bust#8230; And more! /strong/p pstrong*** “The current administration#8217;s economic strategy could create the greatest economic disaster in recorded history,” /strong says a href="http://www.contrarianprofits.com/articles/author/porter-stansbury/" class="alinks_links"Porter Stansberry/a in today’s ema href="http://www.dailywealth.com" class="alinks_links"DailyWealth/a./em/p ulNot only is the administration planning on enormous deficit spending this year, but the current plan calls for increasing deficit spending emfor the next decade /em– spending that will more than#8230;/ul/tr

Is the Bounce Still Bouncing?

Bill Bonner — Thu, 23 Apr 2009 13:48:57 +0000

pBuenos Aires, Argentina “What’s that smell?” We were on an airplane when Edward, 15, noticed an odor that seemed out of place. “Dad…you should have at least cleaned your boots!”/p pThe manure began accumulating when we rode up to the high pasture on Tuesday. More about that below…/p pIn the meantime, the Dow rallied a bit yesterday – up 127 points…barely half of what it lost on Monday.br / Is the bounce still bouncing? We don’t know. But we don’t trust it. They say the stock market ‘looks ahead.’ So, it is possible for it to see things we can’t see. On the other hand, what was it looking at two years ago? Didn’t it see the economy going over a cliff? Apparently not./p pBut#8230;/p

Revealed: Timing Details on the Second Wave of Toxic Mortgages

Contrarian Profits — Fri, 17 Apr 2009 19:39:00 +0000

tr strongNotes from thebr / Investment Undergroundbr / /strong /tr tr Friday, April 17, 2009br / Palermo Viejo, Buenos Aires, Argentina pstrongHere comes subprime II#8230; 3 toxic time bombs to come#8230; The Richebächer legacy lives on#8230; “Scamonomics” explored#8230; Goldman bites the hand that feeds it#8230; TARP loses 75% of taxpayers’ money#8230; How to get $4,201 in your pocket by June 4#8230; Banks’ top 4 accounting gimmicks#8230; Short squeeze pushes market higher#8230; John O’Neill on government’s deceit#8230; James Dale Davidson: How to grab 19% yields on Treasurys (if you’ve got government connections)#8230; And more!/strong /p pstrong*** Rob Parenteau, the editor of the reincarnated emRichebächer Letter, /emwarns that we are in for the second wave of these toxic mortgages ahead. /strongThe first time subprime mortgages reset at a higher rate was in 2008 and the subsequent flurry#8230;/p/tr

Warning: Stench of Banks’ Rotting Toxic Garbage Still Strong

Contrarian Profits — Tue, 14 Apr 2009 20:36:11 +0000

tr strong p style="LINE-HEIGHT: normal; FONT-FAMILY: 'Courier New', Courier, monospace; FONT-SIZE: 24pt"Notes from the Investment Underground/p p /p/strong /tr tr April 14, 2009 pPalermo Viejo, Buenos Aires, Argentina/p pstrongRichard Russell: Why this is a bear market correction#8230; That latest outbreak of investor credulity#8230; 25 biggest earnings-per-share movers and shakers heading into earnings season#8230; Banks to be allowed to screw up indefinitely#8230; The great “too big to fail” fraud#8230; Bailouts costing $42,105 for each U.S. citizen#8230; Bush-Obama tag team piles on debt at the rate of $60,000 a second#8230; Bob Higgs on C-SPAN#8230; China wises up#8230; And more!/strong /p pstrong*** This Richard Russell quote is a must-read for investors thinking about buying back into stocks. /strong Russell, now in his 50th year of publishing the excellent emDow Theory Letter,/em believes we are now witnessing a bear market correction. /p ulThe essence of Dow Theory#8230;/ul/tr

The Feds Keep Spending Alive

Bill Bonner — Tue, 14 Apr 2009 14:50:18 +0000

pWhat a wonderful time to be alive! Never has it been easier to feel superior to our fellow man! So many dopey ideas…so many preposterous delusions! So many fools…so eager to part ways with their money!/p pWe have to pinch ourselves occasionally…and remind ourselves that it is real./p pYes, after the real estate bubble burst, we thought the fun might be over. But no! In come the feds. As you know, what brought about the housing bubble was a sort of madness that caused people to do the damnedest things with their money. But now, the feds are doing even stranger and crazier things!/p pActually, we were happy to see the bubble blow up. Spending more than you make is hardly a formula#8230;/p

Would You Be Interested in Earning a Steady 15% a Year?

Contrarian Profits — Thu, 09 Apr 2009 19:47:57 +0000

tr strongNotes from thebr / Investment Underground/strongbr / /tr tr April 9, 2009br / Palermo Viejo, Buenos Aires, Argentina pstrongWhy you should invest in pipeline companies… Wither Geither’s stress test results? Congress vs the Treasury… Check out of USA Inc with these four BRIC EFTs… How to survive the “Great Money Famine of 2009”… Three questions for Barney Frank… Congressional panel: Liquidate banks, fire top execs… PPIP FLOP… Geithner’s latest Orwellian manoeuvre… And more!/strong /p pstrong*** We’ve added a new section to emNotes./embr / /strongbr / It’s called “Must Reads” and it’s basically a list of the day’s must read articles on money-making and the markets. It’s at the very bottom of the issue. Tell us what you think: a href="mailto:info@contrarianprofits.com" target="_blank"info@contrarianprofits.com./abr / Don’t be shy. We’ve got thick skins./p pstrong*** We love ema href="http://www.dailywealth.com" class="alinks_links"DailyWealth/a./embr / It’s quite possibly the single best free source#8230;/strong/p/tr

Geithner Is LYING… This Investigation into Banks Is Proof

Contrarian Profits — Mon, 06 Apr 2009 19:57:09 +0000

tr strongNotes from thebr / Investment Underground/strongbr / /tr tr San Telmo, Buenos Aires, Argentina pApril 6, 2009/p pstrongWhy the economy is still heading for a cliff#8230; All the king’s horses and all the king’s men can’t put the banks back together again#8230; The madness of Sheila Bair#8230; The government lies over banks are paper thin#8230; Infighting at the Treasury#8230; Why Citi’s CEO should go#8230; Banks plunge#8230; “Fake dividend” strategy exposed#8230; Can mark-to-model save them? Selling OTM calls against your financial stocks#8230; What happened on March 9#8230; And more!/strong/p pstrong*** You’re reading this newsletter because you don’t believe the cheerleaders in Washington and in the mainstream press. /strongYou know it’s safer to know the truth about the economy than to believe the hype and the lies and the false optimism.#8230;/p/tr

Obama Won’t Let GM Go Bust… Here’s Why

Contrarian Profits — Tue, 31 Mar 2009 20:09:05 +0000

tr strongNotes from thebr /Investment Underground/strongbr / /tr tr pTuesday, March 31, 2009br /Recoleta, Buenos Aires, Argentina /p pstrongTeam Obama talks bankruptcy… But he doesn’t really mean it… Politics continue to drive the economy… The most ruinous CEO in history… Deutsche Bank: This crisis is “far from over”… Bailouts reach $10.5 trillion and counting… Gold is where the smart money is right now… Money supply increases… And more! /strong /p pstrong*** Is Team Obama finally coming to its senses? /strongbr / Instead of keeping the fatally wounded U.S. auto industry on a drip feed of tax dollars, Obama is considering allowing GM and Chrysler to enter bankruptcy. /p pA headline in the emWSJ/embr / reads “U.S. Threatens Bankruptcy for GM, Chrysler.” How backwards has the U.S. economy become when bankruptcy for a failed company is#8230;/p/tr

Have You Prepared for the 15-Year Depression?

Contrarian Profits — Wed, 25 Mar 2009 16:33:42 +0000

tr strongNotes from thebr /Investment Underground/strongbr / /tr tr pTuesday, March 24, 2009br /Recoleta, Buenos Aires, Argentina/p pstrongThe 15-year depression is coming… Drink yourself to death! Martin Weiss’s deflationary outlook… A sucker’s rally with legs… Protecting your wealth from inflation… Jeff Clark: the S#38;P will go below 600… The truth behind China’s dollar holdings… Big government gets bigger… And more!#160; /strong /p pstrong*** “This is the big one,” says Republican Congressman Ron Paul,/strongbr / who yesterday said the depression will last 15 years. It makes a nice change from all the hooting and wailing about a bottom being in for stocks. /p p“The U.S. government just won’t allow the correction the economy needs,” a href="http://www.ft.com/cms/s/0/ee3e07f0-16b2-11de-9a72-0000779fd2ac.html?nclick_check=1" target="_blank"says/abr / Paul, citing the mini-depression of 1921, which lasted just a year. This was because insolvent companies were allowed to fail.#8230;/p/tr

This Could Be the One of the Greatest Shorts of Our Time

Contrarian Profits — Wed, 18 Mar 2009 22:19:07 +0000

tr strongNotes from the pInvestment Underground/p/strong /tr tr Wednesday, March 18, 2008br / Recoleta, Buenos Aires, Argentinabr / p /p pstrongPlastic Paddies#8230; The now and future inflation#8230; Spendaholics Anonymous#8230; Waiting for the Treasuries bubble to pop#8230; The perversity of ‘self-stimulation’#8230; Paul Volcker’s two-tier financial system#8230; emNotes/em in “Fantasyland”#8230; Going to ground in Ireland#8230; And more! /strong/p p*** Paddy’s Day celebrations are over. Yesterday, the streets of Buenos Aires filled up with lots of Latin “plastic paddies.” All very strange indeed. More on this below./p p*** This morning, the a href="http://www.ft.com/cms/s/0/40d54f36-1335-11de-a170-0000779fd2ac.html" target="_blank"emFinancial Times/em/a reports that Mr. Market is waiting to see whether the Fed will start buying long-term U.S. Treasuries to further ‘stimulate’ the economy. /p pAnd with rates at near zero levels, it’s running out of ammo. Talking to a href="http://www.cnbc.com/id/29720589" target="_blank"CNBC/a yesterday, Dr. Marc Faber, editor of the em Gloom, Boom#8230;/em/p/tr

At 10am Tomorrow, Equities Could Surge on This News

Contrarian Profits — Thu, 12 Mar 2009 19:16:42 +0000

tr strong#160;Notes from thebr /Investment Underground#160;/strongbr / /tr tr pThursday, March 12, 2008#160;br /Recoleta, Buenos Aires, Argentina/p pstrongFree money is destroying America#8230; 19% interest on your money#8230; Going long on banks#8230; Getting out of gold#8230; #34;Shorty#34; Guzman vs Bernie Madoff#8230; More Greenspan guff#8230; /strong /p p*** a href="http://www.contrarianprofits.com/articles/author/porter-stansbury/" class="alinks_links"Porter Stansberry/a says #34;free money is destroying America.#34; We couldn#8217;t agree more. The idea that the government can ‘fix#8217; things is as bogus now as it was during the Great Depression. The government, by creating the biggest credit bubble of all time through the Federal Reserve, caused the economic disaster we now all face. The idea that it can now solve the problem through more free money is an outright sham./p pAs a href="http://www.dailywealth.com/archive/2009/mar/2009_mar_12.asp" target="_blank"Porter says/a in today#8217;s a href="http://www.dailywealth.com" class="alinks_links"DailyWealth/a:/p ul pNowhere in history will you ever discover a market whose efficiency#8230;/p/ul/tr

Invest in Coke (KO), It’s the Real Thing

Contrarian Profits — Tue, 17 Feb 2009 14:12:29 +0000

pWith its huge emerging market and bearish presence as well as strong high margins, the Coca-Cola Co. (stronga href="http://www.google.com/finance?q=ko"KO/a/strong) doesn’t look like its going to folllow the recent downturn in equity markets. a href="http://www.moneymorning.com" class="alinks_links"Money Morning/a’s Horacio Marquez reccomends that you jump on this stock./p pThis from Horacio:/p blockquotepContinuing with the trend of companies that have blasted through Wall Street’s earnings estimates of late, strongThe Coca-Cola Co. (NYSE: a href="http://www.google.com/finance?q=ko"KO/a)/strong last week announced its ninth-straight quarter of double-digit earnings per share (EPS) growth and a third straight year of meeting or exceeding its long-term-growth targets./p pExcluding one-time items, the Atlanta-based a href="http://www.reuters.com/article/rbssHouseholdProducts/idUSN1254337020090212"company’s earnings per share of 64 cents represented a 10% gain from last year’s fourth quarter/a, beating analysts’ expectations by three cents. In addition, Coke’s unit-case volume was#8230;/p/blockquote

Two Buffett-Backed Railroad Stocks Ready to Soar

Contrarian Profits — Mon, 09 Feb 2009 20:09:37 +0000

tr HIDDEN VALUE /tr tr pDear reader,#160; /p pHas Barack Obama gone wild? #160; /p pThat#8217;s the way it seems from our humble offices in Buenos Aires. #160; /p pEvery day we look at the news#8230; and we see more evidence that the Obama love affair is fading. More about what that means in just a minute.#160; /p pThe fact is the halo above Obama#8217;s head was bound to fade. He#8217;s entering power just when the economy is spiraling downwards.#160; /p pThis decline inevitably affects everything.#160; /p pAccording to Barry Ritholtz#8230;#160; em #8220;Earnings are down over 60% over the past 17 months, making this the biggest decline on record.#8221;/em#160; /p pAnd then Barry pointed to an article from the New York Times#8230;/p ul pem#8220;IN the last 82 years #8212; the history of the#8230;/em/p/ul/tr

Boost and Secure Your Retirement with these 5 Solid Companies

Contrarian Profits — Wed, 04 Feb 2009 20:23:14 +0000

tr HIDDEN VALUE /tr tr pDear Reader,/p pThere#8217;s a #8220;great miracle#8221; playing out right before your eyes./p pIt seems that in the face of one of the worst financial failures in history#8230; one that has obliterated consumer spending#8230; and brought economic titans to their knees#8230; Keynesianism economics is making everything okay again./p pBloomberg reports that China#8217;s own stimulus package is working./p pAsian stocks have hit four-month highs. And#8230; hallelujah#8230; banks are lending again. /p pThis from Bloomberg:/p ul pemChinese banks may have offered a record 1.2 trillion yuan of new loans in January, the China Securities Journal reported today, citing people it didn#8217;t identify./em/p /ul ul pemThe four biggest state-owned banks completed 20 percent of their full-year target, with the majority of the loans lent for railways, highways, electricity grids and other infrastructure#8230;/em/p/ul/tr

The (Credit) Drought In Spain Falls Mainly On The Plane

Edward Hugh — Wed, 04 Feb 2009 12:46:00 +0000

by Edward Hugh: Barcelonabr /br /br /Maybe many people outside (or even inside for that matter) Spain didn't especially notice the fact, but last Sunday's Barça match with Racing de Santander did not go out on regional TV as planned. This caused a few eyebrows to be raised among football supporters and commentators, but little in the way of serious analysis or comment. But the reason the match wasn't broadcast is perhaps rather more interesting than many imagine, since behind Saturday's blackout lies a dispute between the Catalan regional TV station and Barcelona football club which goes well beyond that sport where 22 able bodied men run up and down a pitch for 90 minutes and the Germans always win. The details of the present dispute are obscure, and this is not the place to go into them, but the nitty gritty is that Barça are asking local channel TV3 for 30 million euros, and the TV people quite simply aren't coughing up. Which is in itself unusual, since it wasn't all that long ago that the then President of the Spanish government, José Maria Aznar, was arguing that football was a question of national strategic interest in Spain. So it is clear (to me at least) that TV3 would pay (at least part of the quantity being asked for) if they could, but they obviously can't. So why can't they pay? This is when it all gets interesting, I think.br /br /Basically, and to cut a long story short, the reason will be that the Catalan regional government, who ultimately pay for the station, and see Barça as more or less the national side we don't have, can't give them the funding they need. And why can't they do this? They can't do it because they themselves don't have the money to do so. So why, then, don't they have sufficient money, we may ask, innocently. Well they don't have enough money because the central government isn't sending money through to them in large enough quantities to meet their spending needs, and the central government isn't sending it since they themselves don't have the money to send, etc etc etc. The drought starts at the top of the mountain and then gradually works its way down to the plane.br /br /So the liquidity drought (which starts in the centre) works its way all the way back up the tubes till it reaches the end of the line (the most peripherical points) and then when you open those taps, the water simply does not flow out, or if it does it is more a trickle than a flood. And the centre is having problems, as we saw in the case of yesterday's €7bn 10 year treasury bond auction (Tuesday) which produced a Spanish yield differential jump at its highest level since the euro came into existence - 137 basis points above the equivalent German Bunds. More ominously, foreign investors were notably absent, leaving Spanish banks to soak up the debt. Which makes all that nonsense Spanish people have been seeing on their TV screens this week about how the banks are not lending enough to households and businesses seem even more ridiculous, since it is the needs of the government itself which is increasingly "crowding out" all the rest.br /br /Now going back to the foorball blackout, normally Spain's regional and municipal governments would plug their funding gap by borrowing, and by doing so from the regional cajas, but of course these entities are precisely among the worst affected by the credit drought, and they themselves are running out of money, and totally dependent on short term funding from the ECB for their immediate liquidity needs. So the bottom line is that people are becoming less and less willing to extend credit, and especially to "bad payers" like the local and regional governments, as we can see in the Barça case.br /br /Another minor but revealing anecdote about all this came my way yesterday afternoon, when a friend of mine who works for the municapal authority in one of Barcelona's "sattelite towns" told me she had just had a frustrating day trying to buy a ticket for a trip to Brussels (you know, to sign something, and appear in the photo) for one of their civic dignitaries. Now the travel agents were quite happy to make the reservation, and prepare the ticket. What they were not willing to do was hand it over. As they said to her "I'm afraid you can only have it after you pay". She was bemused by all this - it isn't really her job to do this kind of thing - so she went to see the responsible parties in the accounts department (the flight is the day after tomorrow) and to her amazement they told her "right now this is impossible, tell them we can let them have the money within two weeks". And you have to remember we are only talking about something like 600 euros here!br /br /So - with budget GDP growth estimates which consistently underestimate the size of the contraction, and tax revenue falling as unemployment payments rise - little by little the money is drying up, and this isn't surprising, since Spain can't print its own euros, and so, given the difficulties of borrowing them externally, liquidity becomes very, very tight. Not desperately so yet, but tight. But it is obvious that if things carry on like this we will begin to see a gradual grinding to a halt of the public sector, and all those "functionarios" and pensioners who have so far been very carefully protected from the crisis will find themselves more exposed to the full force of the crunch.br /br /All of which made me think of Argentina, and the weird and wonderful exotic instruments which they invented in their time of need, like a href="http://en.wikipedia.org/wiki/Patac%C3%B3n"Patacónes/a, a href="http://en.wikipedia.org/wiki/LECOP"Lecops/a, a href="http://en.wikipedia.org/wiki/Cr%C3%A9dito"Créditos/a and a href="http://en.wikipedia.org/wiki/Argentine_argentino"Argentinos/a (see appendix below). These were all forms of quasi money (or glorious IOUs) that the local government entities in Argentian issued in a series of ever more desperate attempts to continue paying public employees out in the regions before default finally became inevitable.br /br /Of course, there is another way to go here, we could decide to reduce prices and salaries in the public sector (ie internal deflation as an alternative to devaluation), and bring the budget more back into line with Spain's ability to pay. This is what they seem to be doing in Ireland, although, even there, a href="http://fistfulofeuros.net/afoe/economics-and-demography/ireland-wont-be-going-to-the-imf/"the prime minister allegedly threatened to call in the IMF/a if the public sector unions failed to agree on the spot to a five percent salary reduction.br /br /But the debate which is going on in Spain about the current crisis is still light years away from the country's rapidly evolving reality, so the question which keeps going round and round in my head is: just how long will it be before some crazy politician out there in one of Spain's minor autonomous communities starts proposing to issue regional IOUs/quasi money of the Argentinian type. If and when this does happen, then we will know that the end is well and truly begining (ie that the point of no return has been passed), and if you like we could treat such a hypothetical event as an early potential indicator of impending disaster.br /br /Obviously I hope such a day will never be reached, and that Spain's political class will finally se the light before it is too late, but the following statement by the "semi-serious" Spanish politician Miguel Sebastian - which to my mind comes straight out of the Argentina playbook - makes me very nervous, and leads me to think that that horrid day may be a little bit nearer than I had actually imagined, and that, even worse, we may not only be talking about minor regional politicians.br /br /br /blockquoteThe Spanish government is losing patience with the failure of the country'sbr /banks to provide credit to the economy and could take measures, the industrybr /minister said on Tuesday in remarks quoted on local media. "The government isbr /losing patience with the banks," Industry Minister Miguel Sebastian told Antenabr /3 television, according to newspaper El Mundo. "We're going to keep an eye onbr /them and will act accordingly if the banks don't do their bit."br //blockquotebr /No serious politician can threaten the banks in this way and hope to maintain investor confidence. Maybe even more worrying is the fact that Zapatero has not already "corrected" him. This kind of statement is a declaration of weakness and not one of strength.br /br /And this is not the first such "faux pas" we have seen from Sebastian, since only last week he was arguing that Spain urgently needs to cut its imports (not increase its exports) to correct its trade deficit. "There is no other country in Europe with such a significant and urgent need to reduce its imports," Socialist Miguel Sebastian wrote in an article in right-of-centre daily La Razon. Wrong Señor Sebastian, "there is no other country in Europe with such a significant and urgent need to increase its exports and make its domestic industry more competitive so it becomes more attractive to buy domestically produced products". Not only are Sebastian's arguments pathetic, they are also dangerous in a year when a href="http://fistfulofeuros.net/afoe/economics-and-demography/unemployment-surges-as-the-noose-tightens-on-the-global-recession/"the International Labour Organisation estimates a minimum of 50 million people will lose their jobs/a globally. And as well as being pathetic and dangerous, they also end up in absurdity. Do Spain a favour everyone, keep reading the Financial Times!br /br /"Right now," a href="http://www.ft.com/cms/s/0/aa9b4a24-e9b9-11dd-9535-0000779fd2ac.html"Mr Sebastián said/a, "there is something that our citizens can do for their country: bet on Spain, bet on our products, our industry and our services - bet, in short, on ourselves." Consumption was ex-pected to fall by €7bn (£6.6bn) this year, with the loss of 120,000 jobs. If each citizen bought just €150 of Spanish-made suits or toys instead of foreign goods, those jobs would be saved. "In other words, you could cancel a subscription to the Financial Times or the Wall Street Journal instead of cancelling Expansión or Cinco Dias".br /br /strongAppendix: Forms Of Quasi Money Proposed in Argentina in 2001br //strongbr /The following descriptions (which all come from Wikipedia, as linked above) refer to a variety of local bonds and other instruments issued or planned in Argentina in 2001, after the last IMF loan in January and before final default in December.br /br /br /The Patacón (officially called Letra de Tesorería para Cancelación de Obligaciones de la Provincia de Buenos Aires) was a bond issued by the government of the province of Buenos Aires, Argentina, during 2001. The patacones were used to pay government bills, including state employees' salaries during a period when the economic crisis caused regular currency (Argentine pesos) to be scarce. Patacones then circulated in the economy in much the same way as pesos.br /br /First issued during the peso/U.S. dollar convertibility regime, just like other complementary currency Patacones could be attractive due to a revenue scheduled for payment in 2003 in pesos (practically equivalent to dollars). When the convertibility was abandoned amid fears of hyperinflation, the attractive of this revenue practically disappeared. The basis for the acceptability of complementary currency shifted to their use to pay taxes.br /br /However, the value of Patacones became eroded as the series "B" was issued because as a way to put pressure on the Government to cancel a large debt, the company that printed them eliminated many safety features deemed too expensive, thus making them easier to counterfeit. Also, the revenue of series "B" was scheduled for payment just in 2006. The economic importance of Buenos Aires province ensured the acceptability of Patacones because there were plenty of large companies that found use for them as payment of provincial charges. Patacones were accepted outside the Buenos Aires province and eventually circulated (albeit informally) in border areas of neighboring countries.br /br /The name patacón is derived from a former Argentine national currency. It was colloquially or jokingly used as a synonym of "money". The popular comic hero Patoruzú had revived the use of this word -a wealthy, generous Indian ever ready to hand large heaps of bank notes to anyone in need, urging them to accept "these Patacones".br /br /br /The LECOP was a bond issued by Argentine national government. LECOP (sometimes written as a common word, Lecop), stands for Letra de Cancelación de Obligaciones Provinciales ("Letter of Cancellation of Provincial Obligations").br /br /These bonds were circulated at a substantial discount from their face value, so anybody accepting was bound to experience devaluation (or inflation). While LECOPs were intended as a means to replace legal currency (Argentine pesos) at a time when cash was scarce, there were occasions in which LECOPs were not accepted as valid means of payment — most notably, most taxes could only be paid in pesos, or only partly paid in LECOPs. Public utility companies generally restricted the percentage acceptable to a 70-30 ratio, sometimes further limiting LECOP usage to 15% of the total bill.br /br /br /The Crédito was a local currency started on 1 May 1995 in Bernal, province of Buenos Aires, Argentina, on a garage sale, which was the first of many neighbourhood barter markets (mercados de trueque) that emerged in Argentina during the economic crisis.br /br /The operator of this currency was the Red Global de Clubes de Trueque Multirecíproco (RGT), literally "Global Network of Multi-Reciprocal Exchange Clubs" or more simply the "Global Exchange Network" (GEN).br /br /The currency started as a Local Exchange Trading Systems (LETS) system but was soon replaced by a number of printed currencies and, after further experimentation with a LETS called nodine (from no dinero, "not money"), finally became the Crédito, a printed currency again.br /br /br /The RGT was organized as a chaordic network of barter clubs, which had a clientele from a well educated middle class that had fallen into unemployment during the Argentine recession of the late 1990s.br /br /The clubs of the RGT had no central organ, no central administration and no legislation. Clubs decided for themself to accept the Créditos of other clubs and not all clubs issued their own Créditos. Clubs that did usually issued between 30 and 50 Créditos per participant. In a later phase some of the clubs joined zones or networks and zones became the issuers of Créditos instead of individual clubs. The chaordic structure allowed the system to grow quickly but also left the system vulnerable to fraud.br /br /The Crédito was an interest-free currency and was pegged to the Argentine peso, which in turn was pegged to the U. S. dollar at the time. An estimated $400 million in goods and services were traded in 2000. A survey conducted by members of the economics department of Harvard University reports a personal exchange rate of about two Créditos for one peso during 2002-2003 by individuals who offered goods or services in both currencies. [2]br /br /By July 2002 the unemployment rate in Argentina was in excess of 20% and approximately 7% of the population participated in the RGT. Argentina had already had a high unemployment rate of about 17% for six years previously.br /br /The system was used all over Argentina and worked reasonably well for a time but, as things worsened in the formal economy, more and more people joined the RGT clubs, and a growing percentage of people spent their Créditos without offering sufficient skills or trade in return. The system suffered from hyperinflation and from counterfeiting. Between 2002 and 2003 the government made unemployment insurance available to 2.5 million people, compared to 0.2 million people previously, and thereby increased the availability of the peso to the population stratum using the Crédito, which had an 89% preference [3] for Pesos over Créditos.br /br /The Argentino was a complementary currency in Argentina announced by then-president Adolfo Rodríguez Saá on December 26, 2001 towards the end of the Argentine economic crisis, but he resigned on December 30, 2001 and this plan was never implemented.

Will Obama Nationalize U.S. Private Pensions?

Contrarian Profits — Mon, 19 Jan 2009 16:05:07 +0000

p#8220;It is possible that some brainless members of the U.S. Congress may have introduced a bill that seeks to nationalize pensions, but I hope that it will not be given serious consideration, even by the liberal Democrat majority now in control.#8221;/p pEarlier today I received an email from a concerned member of the Sovereign Society:/p pem#8220;I just read a rumor that a bill is working its way through the U.S. Congress, that if becomes law, would authorize the federal government to seize all 401k#8217;s and IRA assets. These assets would then be placed in a federally administered plan to provide #8216;equal and adequate protection#8217; of assets for all retirees. This sounds like what recently occurred in Argentina. Have you heard anything about#8230;/em/p

Oil Will Surge Again… Here’s 7 Ways To Profit When It Does

Contrarian Profits — Mon, 29 Dec 2008 23:18:40 +0000

tr HIDDEN VALUE /tr tr Dear Value Seeker, pWe hope you had a happy holiday./p pWe’re on our way back to our home in Buenos Aires tonight. We’re looking forward to getting back, but not to the nine-hour flight with our nine-month-old son#8230; It#8217;s likely to be grueling./p pBut at least we#8217;re not in the retail business#8230;/p pThey are likely to be disappointed by the holiday season. According to the Commerce Department, consumer spending fell 0.6% in November, the fifth monthly decline in a row./p pThe Wall Street Journal reports that 10% to 26% of U.S. retailers are now in danger of filing for Chapter 11 in 2009 or 2010./p pThat’s up from 4% to 6% of retailers in trouble in the last two years./p pIt’s no surprise, really./p pMore Americans#8230;/p/tr

Madoff’s Ponzi Scheme Makes Us Love Gold Even More

Contrarian Profits — Tue, 23 Dec 2008 15:15:46 +0000

pA lot of investors woke up recently to find their money had #8216;disappeared#8217; in Bernie Madoff#8217;s $50 billion Ponzi scheme. And it all happened under the noses of the regulators. strongByron King/strong says there are probably many more scammers out there. And the US government is among them. He says this just strengthens the case to buy gold and silver./p pThis from Whiskey #38; Gunpowder:/p blockquotepWhat if you woke up one day and there was a flying saucer sitting in the middle of Central Park? It would change your view of the world, if not the universe, right? At least that’s the idea behind the newly released remake of the classic 1951 film emThe Day the Earth Stood Still/em./p pAnd what if you went#8230;/p/blockquote

Become a Value Investor in One Easy Step

Contrarian Profits — Thu, 11 Dec 2008 20:46:50 +0000

tr HIDDEN VALUE /tr tr pDear Value Seeker,/p pWelcome to the Frankenstein Fed./p pToday, the WSJ reports that the wonks at the central bank are now “weighing up” having the Fed issue its own debt. /p pIt seems the poor central planners have gotten themselves into a bit of a twist while trying to mend America’s Humpty Dumpty economy. /p pIt seems the Fed is pumping so much money into the system that it is running dangerously low on its stockpile of Treasury bonds, which it draws on to finance its funding programs. /p pAnd the Treasury isn’t too keen anymore to raise any more debt on behalf of the Fed. /p pHank Paulson and his buddies have been issuing debt and leaving the proceeds on deposit with the#8230;/p/tr

Peak topsoil? Sounds “Cresy”, right?

Jason G. Wulterkens — Sat, 22 Nov 2008 05:36:13 +0000

The planet is facing a topsoil crisis, meaning that the greatest commodity of them all one day could be farmland. That potentially makes Cresud Inc. (NASDAQ: CRESY), which owns large swathes of farmland in Argentina and also has a growing presence in both Paraguay and Brazil, a sound long for punters. Additionally, [...]

The Masquerade is Over

Bill Bonner — Wed, 29 Oct 2008 15:00:36 +0000

The masks are coming off. It’s the end of the party, now we get to see what people really look like. And it’s not a pretty sight.

You’ll recall that one of the fairest of the Bubble Era’s revelers was the idea that, over the long run, you would make money in stocks. All you had to do was ‘buy and hold.’ Who didn’t like her? She seemed so easy…so willing…so fetching and attractive.

Yesterday, the Dow lost another 203 points. Investors are down 44% so far this year. Worldwide, they’ve lost $10 trillion this month - far worse than the crash of ‘29.

The most successful economy of the 20th century was the United States of America. The second was probably Japan.…

Why We Are On The Verge Of A Global Depression

Bill Bonner — Mon, 27 Oct 2008 14:44:03 +0000

Could we be about to enter a global depression? Bill Bonner thinks there is a good chance. The Dow is heading to 5,000. The US is falling into recession, and the Fed is making it worse. Businesses are cutting their workforces. Consumers are staying at home. And global trade means this slump in demand will hurt producers all over the world.

Why ‘Explosive’ US Debt Will Take Down The Dollar

Justice Litle — Mon, 27 Oct 2008 12:33:49 +0000

Argentina - where Contrarian Profits is based - could be heading for its second debt default in less than a decade. Justice Litle says the US is also burdened by a ballooning national debt pile. And no-one really knows how it will be paid back. That’s why the current US dollar rally cannot last much longer.

This from Taipan Daily:

Whither the dollar and gold? To answer that long-awaited inquiry – which will take some time to cover in full – let’s start by getting a handle on “exploding debt dynamics.” Cartoonish as it sounds, it’s a real term that IMF economists use.

If, like me, the phrase gives you visions of Wile E. Coyote blowing himself up with a box of ACME brand…

Star Resorts Development Inc. (SRDP.OB): Playing the Tourism Boom in Latin America

QualityStocks — Sat, 06 Sep 2008 02:18:56 +0000

Star Resorts Development (SRDP) is real estate development company focused on Latin American markets, particularly Argentina. The company specializes in tourism property for affluent travelers and owns a ski resort, Cerro Bayo Mountain Resort, as well as a 47-acre vineyard called Mendoza. Star Resorts Development’s partner in the Cerro Bayo project is already projecting a [...]

Telecom Argentina Kept on Hold – Analyst Blog

Zacks Market Commentaries — Fri, 05 Sep 2008 16:20:21 +0000

We reiterate our Hold rating on Telecom Argentina SA (TEO), the leading provider of communications in Buenos Aires, Northern Argentina and Paraguay. The company's recent operating results are being driven by the growing domestic cellular telephony market, the largest in Latin America in terms of mobile penetration.

Although Telecom Argentina's wireless and Internet subscriber base continues to increase at a respectable pace, frozen fixed-line tariff and inflationary conditions impacting the cost structure may limit profitability levels for the remainder of 2008. Additionally, the uncertain economic outlook and challenging competitive environment are considerations that we believe may limit valuation levels. Moreover, capital spending for the full year 2008 is expected to increase on a year-over-year basis due to cellular and broadband infrastructure requirements.

Telecom Argentina is trading at 6.6x estimated earnings for fiscal year 2008, which represents a significant discount to the forward P/E ratio of the peer group and S&P 500 averages. The company's stock price fell by approximately 25% since our last reporting time and is currently near the lower limit of its 52-week range. Our six-month target price of $15.00 is based on a 2008 P/E multiple of 7.2.

Anindya Barman contributed to the report.

Read the full analyst report on TEO

"TEO" Free Stock Analysis: Buy? Sell? Hold?
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