Argentina's Country Risk Index has dropped below 1,000 points

[James Bond]

Argentina has a lot of liabilities coming due, but they also have some great assets. I suspect the bigger battle ahead is whether citizens continue to vote for reform and sacrifice long enough to experience the benefits, and become a functioning economy once again. The history of socialist countries is not good in that regard.

Agreed Craig. They have already announced that they can't pay some of it back now. It does look like Milei wants to honor all of the debt but I just wonder how they can pay all of the liabilities. It will take many, many years. But probably no different than many consumers. I have American friends and I am always amazed how much debt Americans have! 30 years debt on houses, 6 year car loans, student loan debt for decades, credit card bills. Then even when people get equity in their homes they take out more debt against their properties.

I guess as long as the consumer keeps paying the banks then they will keep extending more debt! We aren't used to all of the debt that you Americans take on.

 

[CraigM]

Agreed Craig. They have already announced that they can't pay some of it back now. It does look like Milei wants to honor all of the debt but I just wonder how they can pay all of the liabilities. It will take many, many years. But probably no different than many consumers. I have American friends and I am always amazed how much debt Americans have! 30 years debt on houses, 6 year car loans, student loan debt for decades, credit card bills. Then even when people get equity in their homes they take out more debt against their properties.

I guess as long as the consumer keeps paying the banks then they will keep extending more debt! We aren't used to all of the debt that you Americans take on.

Ha! So true, I'm Canadian and have always been skeptical of Americans' debt and consumption habits. But... many have predicted the demise of the American consumer, yet each time they come back stronger than ever. The US economy is just an awesome machine.

 

[Larry]

Ha! So true, I'm Canadian and have always been skeptical of Americans' debt and consumption habits. But... many have predicted the demise of the American consumer, yet each time they come back stronger than ever. The US economy is just an awesome machine.

I agree with you two. I do not understand how the Americans feel comfortable taking on so much debt. It boggles my mind for the obligations they have. But I guess they are just following your government. Government just keeps printing money like no tomorrow. So far no consequence. But I have a friend in New York and his wife had a surgery and now they have to declare bankruptcy. I don't know America too well but many of my friends that retire have almost no savings. Most of their money is tied up in a house or condo they bought. Very little savings and then they try to live on Social Security payments. A few moved to Argentina but now they are stuck because prices have gone up so much suddenly.

I am very skeptical that Argentina can pay all it's debts off. They announce week after week that they can't pay back debt now. We shall see.

 

[earlyretirement]

Agreed Craig. They have already announced that they can't pay some of it back now. It does look like Milei wants to honor all of the debt but I just wonder how they can pay all of the liabilities. It will take many, many years. But probably no different than many consumers. I have American friends and I am always amazed how much debt Americans have! 30 years debt on houses, 6 year car loans, student loan debt for decades, credit card bills. Then even when people get equity in their homes they take out more debt against their properties.

I guess as long as the consumer keeps paying the banks then they will keep extending more debt! We aren't used to all of the debt that you Americans take on.

Ha! So true, I'm Canadian and have always been skeptical of Americans' debt and consumption habits. But... many have predicted the demise of the American consumer, yet each time they come back stronger than ever. The US economy is just an awesome machine.

Totally agree! I'm American and I always marvel at the debt loads of Americans. That is what I loved about Argentina when I started investing in real estate in Buenos Aires after the corralito. Almost everyone owned their place free and clear. Some had mortgages but it wasn't a situation like the USA and then after the corralito no mortgages and those buying were actual cash so I figured that prices were real and genuine. Prices collapsed so I jumped in.

Meanwhile I lived in Dallas at the time and lived in a really upscale neighborhood with million dollar homes. I just assumed my neighbor was wealthy. He had the biggest house on the block, drove a Porsche. His wife drove a Range Rover. His kids went to elite Private Schools (even though the public schools were amazing) in that area. Then one day everything was gone. They moved out in the middle of the night. I guess the guy was leveraged to the hilt and lost it all. Turns out he was a piker and had no money. Only debt. Many people are like that in the USA living on borrowed time.

That situation doesn't exist in Argentina with individuals. USA is an interesting place regarding debt. Even here where I live in San Diego I live in an affluent community and you would assume everyone has $$$ but lately one of my wife's friend is complaining about money. I have this Title company App from my days building a residential real estate App and I can see when people pull out equity out of their properties. Turns out this guy keeps pulling out a few hundred thousand dollars per year. I assumed that he had his house paid off or close to it. Nope.

That is America for you. Debt debt debt. It's why I like Latin American markets that limit the amount of debt buyers can take. I do think mortgages are a vital part of any market and healthy as long as banks aren't doing liar loans and checking on documented income.

 

[Betsy Ross]

Ha! So true, I'm Canadian and have always been skeptical of Americans' debt and consumption habits. But... many have predicted the demise of the American consumer, yet each time they come back stronger than ever. The US economy is just an awesome machine.

I don't think the American consumer is going anywhere. They might get punched from time to time but as you mentioned Craig they just keep coming back stronger each time. I don't think anyone can touch the US economy. BRICS try but I think Trump will put a stop to that quickly.

It was a refreshing change moving to Argentina. When I lived in the States I would buy needless junk on Amazon every day. Literally every day. Since moving to Argentina I don't really buy anything I don't need. My place is much smaller and don't have the space. I worry how things will be for Argentines once Mercado Libre starts allowing Argentines next week cheap junk from China and USA. Here there isn't much credit but that will probably change.

 

[FuturoBA]

Totally agree! I'm American and I always marvel at the debt loads of Americans. That is what I loved about Argentina when I started investing in real estate in Buenos Aires after the corralito. Almost everyone owned their place free and clear. Some had mortgages but it wasn't a situation like the USA and then after the corralito no mortgages and those buying were actual cash so I figured that prices were real and genuine. Prices collapsed so I jumped in.

Meanwhile I lived in Dallas at the time and lived in a really upscale neighborhood with million dollar homes. I just assumed my neighbor was wealthy. He had the biggest house on the block, drove a Porsche. His wife drove a Range Rover. His kids went to elite Private Schools (even though the public schools were amazing) in that area. Then one day everything was gone. They moved out in the middle of the night. I guess the guy was leveraged to the hilt and lost it all. Turns out he was a piker and had no money. Only debt. Many people are like that in the USA living on borrowed time.

That situation doesn't exist in Argentina with individuals. USA is an interesting place regarding debt. Even here where I live in San Diego I live in an affluent community and you would assume everyone has $$$ but lately one of my wife's friend is complaining about money. I have this Title company App from my days building a residential real estate App and I can see when people pull out equity out of their properties. Turns out this guy keeps pulling out a few hundred thousand dollars per year. I assumed that he had his house paid off or close to it. Nope.

That is America for you. Debt debt debt. It's why I like Latin American markets that limit the amount of debt buyers can take. I do think mortgages are a vital part of any market and healthy as long as banks aren't doing liar loans and checking on documented income.

Yes there's a big difference between debt and wealth. Some look like they have everything, but they're playing with fake money. In Dallas and I'm sure other cities are full of 30k millionaires -folks barely scraping by but have all the newest toys. Mortgages and credit cards are great if you can use them responsibly, but the problem is so many don't and live life on maxed out mode. Some chase the status and the stress that comes with that, but I'd rather live more modest and clear of such worries.

 

[Jeb Spencer]

Yes there's a big difference between debt and wealth. Some look like they have everything, but they're playing with fake money. In Dallas and I'm sure other cities are full of 30k millionaires -folks barely scraping by but have all the newest toys. Mortgages and credit cards are great if you can use them responsibly, but the problem is so many don't and live life on maxed out mode. Some chase the status and the stress that comes with that, but I'd rather live more modest and clear of such worries.

Very true @FuturoBA. My friends live in Miami and it is the same thing there. I joke all flash no cash. My friend in Florida claims to be a bitcoin millionaire. He said he doesn't want to sell any of his bitcoin because it will keep going up and up and up. Meanwhile he has been renting his entire life and has student loans he is still paying off, 3 cars that are not paid off, credit card bills up the wazoo. He claims to have 8 bitcoin and he just admitted to me that part of how he got it was maxing out credit card balance transfer offers. He keeps professing that he is a genius but I told him that it doesn't make sense not to at least own one place and clear out his debt.

Things like student loan debt are not removable even in a bankruptcy. I didn't think you could get credit card debt like he is getting to buy bitcoin. This seems unstable to me. Just feels like we are in a bubble in the US right now when I hear stories like this. I would rather live within my means. I bought a small place in BA in Palermo many years ago and it is my plan B when I am ready to retire.

 

[Digital Nomad]

Very true @FuturoBA. My friends live in Miami and it is the same thing there. I joke all flash no cash. My friend in Florida claims to be a bitcoin millionaire. He said he doesn't want to sell any of his bitcoin because it will keep going up and up and up. Meanwhile he has been renting his entire life and has student loans he is still paying off, 3 cars that are not paid off, credit card bills up the wazoo. He claims to have 8 bitcoin and he just admitted to me that part of how he got it was maxing out credit card balance transfer offers. He keeps professing that he is a genius but I told him that it doesn't make sense not to at least own one place and clear out his debt.

Things like student loan debt are not removable even in a bankruptcy. I didn't think you could get credit card debt like he is getting to buy bitcoin. This seems unstable to me. Just feels like we are in a bubble in the US right now when I hear stories like this. I would rather live within my means. I bought a small place in BA in Palermo many years ago and it is my plan B when I am ready to retire.

This is the third time I have heard about people using their credit card to buy bitcoin. There was actually some investment guy on X posting the other day about how he was using 0% balance transfer offers on he and his wife's credit cards to buy bitcoin. I am glad it has worked out for him so far but this feels like things could turn south quickly. I think bitcoin is probably going to do well into the future but I'm shocked to hear people are using their credit cards to buy it. They call that smart investing. Seems reckless to me.

Many on X are bragging about using loans to buy bitcoin. It is working out so far for some but I hope it doesn't swing hard again. My brother is into it and watched it soar and then crash. He still has some but lots of these cryptos seem like you can get some crashes. If you own them outright and just forget about them but worrying about credit card interest would be scary.

https://twitter.com/x/status/1762314318069293387

 

[earlyretirement]

More great news. Argentina's Country Risk continues to go down every day.

Today, the risk index dropped by 3.81% to reach 681 basis points, reflecting growing investor confidence and a more positive perception of Argentina's financial stability.The Country Risk index, calculated by JP Morgan Chase, measures the spread between Argentine bond yields and those of U.S. Treasury bonds. This latest decrease is part of a broader trend of improvement in Argentina's economic indicators:

https://twitter.com/x/status/1868746223504462037

 

[Vince]

More great news. Argentina's Country Risk continues to go down every day.

Today, the risk index dropped by 3.81% to reach 681 basis points, reflecting growing investor confidence and a more positive perception of Argentina's financial stability.The Country Risk index, calculated by JP Morgan Chase, measures the spread between Argentine bond yields and those of U.S. Treasury bonds. This latest decrease is part of a broader trend of improvement in Argentina's economic indicators:

https://twitter.com/x/status/1868746223504462037

Wow soon they are going to qualify for much lower interest rates and more credit. Milei has done a remarkable job turning things around.

 

[Vero]

More great news. Argentina's Country Risk continues to go down every day.

Today, the risk index dropped by 3.81% to reach 681 basis points, reflecting growing investor confidence and a more positive perception of Argentina's financial stability.The Country Risk index, calculated by JP Morgan Chase, measures the spread between Argentine bond yields and those of U.S. Treasury bonds. This latest decrease is part of a broader trend of improvement in Argentina's economic indicators:

https://twitter.com/x/status/1868746223504462037

Wow I can't believe it. Went down so much. I see it even went down more. Down to 677.

You have to go back to November 2018 to find lower level.

 

[Wally]

I thought it was cool to see the country risk with different presidents.