Politics Nestor Kirchner has just passed

[BoulCarp]

Just thought the news was important enough to post it here.
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[MisuriMisa]

I acknowledge that there may be differing opinions regarding the content of this article, but it is important to recognize and appreciate the legacy left by Néstor Kirchner.
The untimely passing of Néstor Kirchner represents a significant loss not only for Argentina but also for the broader region and the world. Taking office as president in May 2003 during Argentina's early recovery from a severe recession, Kirchner played a pivotal role in rescuing the country's economy, drawing parallels to Franklin D. Roosevelt's efforts during the Great Depression in the United States. Similar to Roosevelt, Kirchner faced opposition not only from powerful economic interests but also from the majority of the economics profession, which doubted the success of his policies. Contrary to these predictions, Kirchner's policies proved effective, leading Argentina on a path of recovery.
The economic downturn in Argentina from 1998-2002 mirrored the U.S. Great Depression in terms of high unemployment rates, peaking at over 21 percent, and a substantial decline in output (approximately 20 percent of GDP). Many Argentines, accustomed to relatively high living standards in Latin America, fell below the poverty line. The crisis in late 2002 and early 2003 saw a massive devaluation, a historic sovereign default on $95 billion of debt, and a collapse of the financial system.
While some unconventional policies that contributed to Argentina's rapid recovery were initiated before Kirchner took office, he faced formidable challenges in implementing and sustaining them, ultimately transforming Argentina into the fastest-growing economy in the region.
One significant challenge arose from the International Monetary Fund (IMF), which had played a role in the economic collapse by supporting detrimental policies, including an overvalued exchange rate and escalating indebtedness at rising interest rates. Despite the Fund offering no assistance when Argentina's economy collapsed, Kirchner refused its conditions, leading to a temporary default in 2003. This bold move, unprecedented for a middle-income country, compelled the IMF to back down and extend the loans.
Argentina subsequently experienced an average annual growth rate of more than 8 percent until 2008, lifting over 11 million people out of poverty in a country of 40 million. Despite facing criticism from Washington and the business press, Kirchner's policies, such as the Central Bank's focus on a stable and competitive real exchange rate, proved successful.
Kirchner's confrontation with the IMF occurred at a time when the organization was losing global influence after failures in the Asian economic crisis preceding Argentina's collapse. This event demonstrated that a country could defy the IMF and survive, contributing to the decline of IMF influence in Latin America and middle-income countries. The diminishing influence of the IMF also played a role in the waning power of the United States, particularly in South America's newfound independence.
Moreover, Kirchner played a crucial role in consolidating this independence by collaborating with other left-leaning governments in Brazil, Venezuela, Ecuador, and Bolivia. Through institutions like UNASUR and MERCOSUR, South America reshaped its trajectory. Kirchner's leadership, together with other left-leaning governments, supported Bolivia against a right-wing challenge in 2008 and stood behind Ecuador during an attempted coup a few weeks ago.
Despite the unsuccessful attempt to overturn the military coup in Honduras, where U.S. support for the coup government was decisive, Argentina, alongside UNASUR, continues to oppose Honduras' return to the OAS, despite strong lobbying from Washington.
Kirchner's commitment to human rights earned him respect from organizations for prosecuting and extraditing military officers accused of crimes during the 1976-1983 dictatorship, reversing previous government policies. Néstor Kirchner, alongside his wife, current president Cristina Fernández, has made a significant contribution to steering Argentina and the region in a progressive direction. While these efforts may not have garnered widespread approval in Washington and international business circles, history will undoubtedly recognize him as not only a great president but also an independence hero of Latin America. This column was originally published by The Guardian Unlimited (UK) on October 27, 2010.


http://www.huffingtonpost.com/mark-w..._b_774966.html

 

[earlyretirement]

Death is always sad but I can tell you that Kirschner will not be missed by many. Just look at the bond markets. The international community is celebrating his death and basically saying that his death is better for the future of Argentina. You can agree or disagree with that but many look at his death as a positive.

 

[MiltonNash]

I see that the vultures are already rubbing their hands in glee hoping that there is another crash like in 2002 so they came buy everything in Argentina at rock bottom prices even when the country and its people have lost all their savings but hey thats life

 

[earlyretirement]

I don't know if "glee" is a word I'd use to describe people's attitude about this. I wouldn't use that word nor do I think people are waiting for a crash like 2002. Frankly, I don't see another crash as bad as 2002. Argentina will always have bouts of economic instability but I never see it as bad as 2002.

As far as the speculation, I'd agree with Milton that the speculation is very low. Keep in mind that the market here in Buenos Aires is quite different than most places around the world. It's 100% cash over the table not the funny money 3.5% down payments like in the USA. It's the reason why real estate in the USA keeps falling. There are still millions more homes to get foreclosed on in the USA. In Buenos Aires there aren't foreclosures because people own their homes outright. Even the people that are "speculating" are doing it with 100% cash which is quite different.

It's not just upper class locals that are investing in real estate as Milton mentioned. It's just middle class as well. There is no where else to park money in Argentina besides the real estate market so it will be an attractive place for locals to invest.

I've actually enjoyed watching the real estate market fall tremendously in the USA. Too much darn speculation. If you want to talk about speculators and real estate look at places like the USA, Ireland, Spain. Places where you could formally buy places with 0% down payment. It's the reason why some places in Miami Beach are dirt cheap and continue to fall. Add into the mix that many of those people are going to end up defaulting anyway or just staying in their places waiting to be foreclosed on.

Argentina is a whole other ball game. While I don't think real estate prices will skyrocket upwards....I don't see it crashing again either. There is simply nothing else to invest in here in Argentina besides land and bricks.

Also, I'll mention that the term "vulture" shouldn't be used for intelligent investors that bought at the crash. Those people that invested in real estate after the crash definitely cleaned up and made a lot of money. Those "vultures" that are watching the real estate market crash in the USA and waiting for the right time to purchase are also intelligent. Not sure how investing intelligently starting getting termed "vulture".

 

[SaraBush]

This "opportunistic investor" acquired property in Colonia, not within the borders of Argentina. This occurred half a decade ago, and in the intervening years, I've observed a substantial fourfold increase in land prices. This surge can be attributed, in part, to numerous Argentine landholders offloading their properties on the opposite riverbank to acquire less productive land in this region.

The primary impetus for this migration stems from Uruguay's consistent and well-thought-out tax policies. Unlike the predatory taxes enforced by the Kirchners to replenish their "caja" or slush fund, utilized for compensating piqueteros and other loyal supporters, Uruguay offers a haven with stable and rational tax measures.

 

[earlyretirement]

This "opportunistic investor" acquired property in Colonia, not within the borders of Argentina. This occurred half a decade ago, and in the intervening years, I've observed a substantial fourfold increase in land prices. This surge can be attributed, in part, to numerous Argentine landholders offloading their properties on the opposite riverbank to acquire less productive land in this region.

The primary impetus for this migration stems from Uruguay's consistent and well-thought-out tax policies. Unlike the predatory taxes enforced by the Kirchners to replenish their "caja" or slush fund, utilized for compensating piqueteros and other loyal supporters, Uruguay offers a haven with stable and rational tax measures.

Sara,

Like you I invested in Uruguay many years ago. I've sold much of the land I bought at good profits. Definitely Uruguay is a model in South America for how to conduct business and banking. Argentina's financial system is quite a disaster.

Uruguay is really simple to invest in and things run smoothly. Their banking, financial system and judicial system works well. The only downside is I just find it boring compared to BA.

 

[Mikecaer]

Did the individual in question have ties to the person apprehended in an aircraft en route to the US with a suitcase carrying $800,000 in cash? Apologies if this story has already been shared in this forum; I'm currently at work and don't have the luxury of reading through over 100 posts.

There's a possibility that the incident was related to an election in Guyana rather than Argentina, but my recollection is a bit hazy.

 

[earlyretirement]

Indeed. The Kirchners were in bed with ilk like Chavez. Actually I thought Christina would have had a better start as she talked about how she wanted to have better relationships with the international community. However after that incident.... it was a bad start.

It's hard to earn the respect of other respectable nations when you are in bed with the likes of Chavez.

Did the individual in question have ties to the person apprehended in an aircraft en route to the US with a suitcase carrying $800,000 in cash? Apologies if this story has already been shared in this forum; I'm currently at work and don't have the luxury of reading through over 100 posts.

There's a possibility that the incident was related to an election in Guyana rather than Argentina, but my recollection is a bit hazy.

 

[SaraBush]

Sara,

Like you I invested in Uruguay many years ago. I've sold much of the land I bought at good profits. Definitely Uruguay is a model in South America for how to conduct business and banking. Argentina's financial system is quite a disaster.

Uruguay is really simple to invest in and things run smoothly. Their banking, financial system and judicial system works well. The only downside is I just find it boring compared to BA.

Uruguay exudes an atmosphere of orderliness, tranquility, and friendliness, yet at times, it can be excessively dull.

The safety situation has undergone a shift from the past. My rural residence in Colonia fell victim to burglary twice while I was in my Buenos Aires home. It's somewhat ironic that the burglars chose to strike when I was away, displaying an unexpected level of consideration.

 

[earlyretirement]

So true! Yes, it's a nice place to visit or go for the weekend or vacation but it's too boring for me to live long term. I owned a house in Punta del Este but I ended up selling it as I found I went less and the utility bills are sky high there. I sold at the peak so I feel fortunate for that.

And you are right.... lots of theft there. In Punta del Este my house got broken into twice. The thieves know which homes are owned by foreigners including Argentines and they know they are empty most of the time so just rob them. Even though there are alarms, they know they have a few minutes to loot the place. Not fun.

Uruguay exudes an atmosphere of orderliness, tranquility, and friendliness, yet at times, it can be excessively dull.

The safety situation has undergone a shift from the past. My rural residence in Colonia fell victim to burglary twice while I was in my Buenos Aires home. It's somewhat ironic that the burglars chose to strike when I was away, displaying an unexpected level of consideration.

 

[NishGuards]

Opinion of a Bahia Blanca newspaper:

Sería improcedente ensayar a expensas de Néstor Kirchner, quien ya no está entre nosotros para defenderse, una nota fúnebre en donde compendiáramos todas las diferencias abismales que siempre separaron a la dirección de este diario de su figura y gestión. Ya habrá tiempo para hacer un resumen crítico de la administración que presidió por espacio de cuatro años. Hacerlo ahora, a vuelo de pluma, resultaría un ejercicio incompleto borroneado a las disparadas.
Baste decir que con el santacruceño se fue el único hombre público de la Argentina contemporánea que entendió el arte de hacer política como un puro conflicto y obró en consecuencia. El resultado que obtuvo está a la vista. Es de desear que ahora le toque a su mujer dar un golpe de timón capaz de aventar el clima de rencor y crispación que su marido --siempre extremista-- nos dejó como legado.

 

[earlyretirement]

Although I'm not a big fan of Nestor I think that it's important to note he did do some good things for Argentina as well.

Here is another link for a story.

http://www.cnn.com/2010/WORLD/americas/10/27/argentina.kirchner.impact/index.html?iref=allsearch


My biggest problem with the K's are their overwhelming drive to want to try to control the entire country. You must have a clear separation with Presidential, Judicial, Senate/Congress and they really tried dominating all of them or anyone else that spoke out against them including the newspapers.

 

[MiltonNash]

I take offense at these posts that speculate on Argentina's economic downturn, seemingly expressing a desire for things to become remarkably inexpensive again, allowing tourists to enjoy three-dollar dinners and apartments in Recoleta to be priced below $1000 per square meter. What about the individuals who, due to orchestrated financial crises facilitated by corrupt governments in collaboration with international bankers, have lost their businesses and savings? This recurrent pattern has afflicted Western societies for the past two centuries, and it's crucial for us, the people, to recognize this and strive towards establishing honest governments that prioritize the common good.

While acknowledging that there is no flawless government, I contend that Argentina presently boasts a better government than it has had in a substantial period.

Since 2007, numerous predictions have foretold Argentina's impending crash and the peso's devaluation to 6 pesos per dollar, yet none of these forecasts have materialized. Contrary to these speculations, a crash is unlikely in Argentina in the coming years, and the probability is diminishing. This is attributed to a multitude of factors too extensive to detail in a concise post. Argentina's economy and its management are on a stable foundation, with robust growth anticipated for 2011 and 2012, accompanied by a strengthening Argentine peso. The expected substantial rise in commodity prices in the upcoming years will consequently drive an increase in property prices.

Observing the local stock market and the considerable volume of transactions in Capital Federal, it appears that the $50 per person dinner in Puerto Madero today could escalate to $100 and beyond in 2012.

 

[WeinDer]

Distinguishing between a market cycle, characterized by inevitable fluctuations, and a crash, or between a recession and a depression, is crucial. Argentina has experienced cyclical patterns, marked by predictable highs and lows every 7-10 years for decades. The crash in 2001/02 was a genuine downturn, while other downward cycles have been less severe.

While few expatriates would desire a recurrence of the 2001/02 scenario, adopting a prudent investment approach involves making acquisitions during market downturns rather than when prices are inflated. Assuming that the prices of real estate, gold, stocks, or any other commodity will consistently ascend is unrealistic, and investors would be unwise to make purchases without anticipating inevitable corrections in market prices.

It's noteworthy that your self-promotion as a buyers' agent carries an ironic undertone. It gives the impression that you advocate for sellers, with an inclination towards ensuring they secure substantial profits for their apartments or other real estate assets.

I take offense at these posts that speculate on Argentina's economic downturn, seemingly expressing a desire for things to become remarkably inexpensive again, allowing tourists to enjoy three-dollar dinners and apartments in Recoleta to be priced below $1000 per square meter. What about the individuals who, due to orchestrated financial crises facilitated by corrupt governments in collaboration with international bankers, have lost their businesses and savings? This recurrent pattern has afflicted Western societies for the past two centuries, and it's crucial for us, the people, to recognize this and strive towards establishing honest governments that prioritize the common good.

While acknowledging that there is no flawless government, I contend that Argentina presently boasts a better government than it has had in a substantial period.

Since 2007, numerous predictions have foretold Argentina's impending crash and the peso's devaluation to 6 pesos per dollar, yet none of these forecasts have materialized. Contrary to these speculations, a crash is unlikely in Argentina in the coming years, and the probability is diminishing. This is attributed to a multitude of factors too extensive to detail in a concise post. Argentina's economy and its management are on a stable foundation, with robust growth anticipated for 2011 and 2012, accompanied by a strengthening Argentine peso. The expected substantial rise in commodity prices in the upcoming years will consequently drive an increase in property prices.

Observing the local stock market and the considerable volume of transactions in Capital Federal, it appears that the $50 per person dinner in Puerto Madero today could escalate to $100 and beyond in 2012.

 

[earlyretirement]

I totally agree with WeinDer when he says that no expats repeat a wish of 2001/2002. I don't think that any normal person hopes for large masses of people to suffer.

It's true that Argentina has a history of down cycles every 10 years or so. Some more severe than others. I don't think that will probably change.

I do agree that it is a prudent strategy to buy when the market is down however I think it's also safe to say that you don't want to try catching a falling knife. Case in point, I know many people that tried timing the bottom and buying properties in Miami Beach in 2008, 2009 and 2010 and some properties are down 70% from peak prices. Same thing in Las Vegas and Phoenix.

While I personally believe Perry seems a bit optimistic on Argentina in general (which I don't think is anything to fault....but I prefer in being realistic at all times), I do agree with him to an extent that real estate here has to be looked at not only as an "investment" but basically most locals I know use it as a piggy bank. I also know lots of locals that tried to diversify and bought properties in the USA over the past few years and they have gotten absolutely crushed, especially in Miami. They are figuring out that real estate in other places around the world are really tough to truly value and bringing their funds back into Argentina which sounds a bit funny.

The reason is because it's hard to truly value real estate in the USA with the shadow inventory and an estimated 7 to 10 million homes that will still get foreclosed in in the next few years. The situation in Buenos Aires, even for those that think it's expensive.... and you can't argue with is that the market here is essentially all 100% cash (For 2009 it was 7.01% of the total transactions..so far for 2010 it's 6.18% of the transactions). Mortgages are very rare here and even when they do have them it's 50% down payment over shorter periods of time. So as a common sense investor you have to realize the market is dynamic here and prices are truly or fairly valued when it's essentially 100% cash. When you can't leverage like other places around the world you have to keep that in mind.

I do agree with dr__dawggy that NO investments move in a straight line (up or down) forever. I don't care whether you are talking about real estate, gold, stocks and other "paper". Things fluctuate. And as an intelligent investor you have to realize that during these times of fluctuations is when you can and should make the most amount of money.

 

[WeinDer]

Distinguishing between a market's regular cycles, marked by inevitable fluctuations, and a genuine crash is vital, just as recognizing the difference between a recession and a depression is crucial. Argentina has undergone predictable cycles of highs and lows every 7-10 years for decades, with the 2001/02 crash standing out as a true downturn. Other downward cycles have been less severe in comparison.

While it's unlikely that many expatriates would welcome a repetition of the 2001/02 experience, adopting a prudent investment strategy involves making purchases during market downturns rather than when prices are inflated. It is unrealistic to expect the prices of real estate, gold, stocks, or any other commodity to consistently follow an upward trajectory. Investors would be ill-advised to make acquisitions without considering the inevitable corrections in market prices.

 

[ClintonErts]

Distinguishing between a market's regular cycles, marked by inevitable fluctuations, and a genuine crash is vital, just as recognizing the difference between a recession and a depression is crucial. Argentina has undergone predictable cycles of highs and lows every 7-10 years for decades, with the 2001/02 crash standing out as a true downturn. Other downward cycles have been less severe in comparison.

While it's unlikely that many expatriates would welcome a repetition of the 2001/02 experience, adopting a prudent investment strategy involves making purchases during market downturns rather than when prices are inflated. It is unrealistic to expect the prices of real estate, gold, stocks, or any other commodity to consistently follow an upward trajectory. Investors would be ill-advised to make acquisitions without considering the inevitable corrections in market prices.

I think you are on the right track with your investing strategy. The last few years has certainly debunked the notion that real estate always goes up, sounds pretty silly today. I'm not a big fan of investing in real estate today as I believe it is still over valued in most places around the world. I think the next 10 years or so is not going to kind to those who put their money into real estate. I can understand someone buying a property that pays rents and provides a return. I don't understand people who buy solely on the expectation the price is going up, this has always sounded like speculating and not investing to me. In Argentina you are in a market that experiences a lot of significant ups and downs and timing is very important.

 

[earlyretirement]

I think you are on the right track with your investing strategy. The last few years has certainly debunked the notion that real estate always goes up, sounds pretty silly today. I'm not a big fan of investing in real estate today as I believe it is still over valued in most places around the world. I think the next 10 years or so is not going to kind to those who put their money into real estate. I can understand someone buying a property that pays rents and provides a return. I don't understand people who buy solely on the expectation the price is going up, this has always sounded like speculating and not investing to me. In Argentina you are in a market that experiences a lot of significant ups and downs and timing is very important.

Absolutely there was too much speculation in real estate all over the world. It's severe speculation when banks don't make you put much down payment and you aren't living in the home and don't understand simple fundamentals of cash flow.

I believe now more than ever you really need to be careful with real estate unless you are going to be living in the property indefinitely. And even then many times it makes sense to rent vs. buy.

But you shouldn't buy simply for the misguided rationale that "real estate always goes up" because it clearly doesn't. And you can't try to catch a falling knife.

You have to really know and understand what you are doing. And even then you can see real estate fall quickly in a short period of time. Case in point, back in April 2010 I just started looking at acquiring real estate in the USA after waiting from the sidelines and watching it fall dramatically the past few years. My first property I looked at adding was in Plano, Texas (an affluent Northern suburb of Dallas). This was back in April 2010. The asking price on a large 5 bedroom nice property in a nice area was $340,000. This was before the home housing credit expired.

I made an all cash offer of $300,000 on the house and the seller's realtor rejected it saying they already rejected offers at $300,000 and $308,000. I told them good luck but the market was going to fall back down once the first time home buyer's credit ended. Both the seller and the sellers Realtor were in severe denial. Fast forward to October 2010 and the realtor emailed me a few weeks ago saying the price has dropped down to $287,000 and asking if I'm still interested. A $52,000 decrease all in a few months on a home with an asking price of only $340,000. Do the math on the %.

This is just one real life example of how fast real estate can fall if you don't understand it. Even in relatively non-bubble areas like Dallas that didn't experience big price increases.

 

[MiltonNash]

Absolutely there was too much speculation in real estate all over the world. It's severe speculation when banks don't make you put much down payment and you aren't living in the home and don't understand simple fundamentals of cash flow.

I believe now more than ever you really need to be careful with real estate unless you are going to be living in the property indefinitely. And even then many times it makes sense to rent vs. buy.

But you shouldn't buy simply for the misguided rationale that "real estate always goes up" because it clearly doesn't. And you can't try to catch a falling knife.

You have to really know and understand what you are doing. And even then you can see real estate fall quickly in a short period of time. Case in point, back in April 2010 I just started looking at acquiring real estate in the USA after waiting from the sidelines and watching it fall dramatically the past few years. My first property I looked at adding was in Plano, Texas (an affluent Northern suburb of Dallas). This was back in April 2010. The asking price on a large 5 bedroom nice property in a nice area was $340,000. This was before the home housing credit expired.

I made an all cash offer of $300,000 on the house and the seller's realtor rejected it saying they already rejected offers at $300,000 and $308,000. I told them good luck but the market was going to fall back down once the first time home buyer's credit ended. Both the seller and the sellers Realtor were in severe denial. Fast forward to October 2010 and the realtor emailed me a few weeks ago saying the price has dropped down to $287,000 and asking if I'm still interested. A $52,000 decrease all in a few months on a home with an asking price of only $340,000. Do the math on the %.

This is just one real life example of how fast real estate can fall if you don't understand it. Even in relatively non-bubble areas like Dallas that didn't experience big price increases.

Your input is valuable, and I completely agree, especially considering the prevalent overpricing of real estate globally. I firmly reject the notion of engaging in speculative real estate transactions, and I am committed to representing only those sales that align with market value.

Buenos Aires stands out as a unique market globally, primarily driven by cash transactions. Consequently, the supply of available properties for sale is notably lower compared to equivalent markets, especially in the USA and Europe. Presently, I'm handling a list of 56 prospective buyers urgently seeking 2-bedroom apartments with specific features in Barrio Norte. However, the challenge lies in finding commendable properties that meet their criteria.

Real estate inherently involves risks, necessitating careful consideration before making a purchase. My belief is that individuals should refrain from buying property in Argentina unless they have decided to live here and pursue residency. For those considering real estate purely for speculation, I would advise exploring alternative investments.