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Strategies & Market Trends : Argentine stocks -- Ignore unavailable to you. Want to Upgrade?

To: Tom who wrote (98)	9/22/1998 1:55:00 PM
From: X Y Zebra	Read Replies (3) \| Respond to of 331

1) S.A. is incapable of recovering at current and relevant commodities pricing. 2) I am concerned that, should the involved parties attempt to affect another bailout for the Mercosurs, there will be a significant revolt. Could be the reason, beyond the October election, that Senor Cardoso is avoiding the topic. I don't believe Mr. Menem is want to tango with the repercussions of another bailout either. Well... IMO I do not foresee that a commodity inflation is about to begin, unless there is specific demand for said commodities, which would have to come from the industrialized nations. Not much hope there. Then, this would lead to a further depreciation of such commodities to even lower levels, in an attempt by the producing countries to get some hard currency... i.e. US Dollars. I read a newsletter called "Trends in Futures" which deals in technical analysis of trading in futures, I will attempt to get some excerpts at a later time of some of the comments made in the technical picture of some of the commodities. On # 2... When you indicate "revolt" are you referring to a revolt against established agreements meaning everyone fend for themselves independently or ? an actual revolution. It seems to me (at least in the case of Argentina and Chile that this would not be a likely possibility), Brazil and Per£ on the other hand, may be a different story. My gut feeling tells me that it is high time for Latin America to start taking serious steps to clean the corruption that has saddled these countries with unproductive projects and rampant corruption, if they truly want to progress. Will Argentina actually devalue ? I hope not as Argentina seems to have set an example for the rest of Latin America. Can they begin converting their economies from a commodity based economy to more of a manufacturing based economy ? This I assumed that was the plan, but for some reason it is taking longer than planned. Would it be possible that a "bail-out" could be engineered NOT by the IMF, but rather by private industry itself. i.e. the new rescuers would part take in th equity of the enterprises that need such rescue ? A coalition of international entrepreneurs, and/or corporations independent of governments, central bankers, IMF, etc. Perhaps gaining important concessions (income tax, preferential tariffs and other forms), in order to "save" institutions/corporations, that are considered "too large to allow to fail". I believe that this approach has been taken in the past, however a more generous negociated package could be obtained this time around ? Seems to me that George Soros bet on the wrong horse, I believe that Latin America would be a far better horse than all of mother Russia... Just a thought.

To: Tom who wrote (98)	10/25/1998 2:31:00 AM
From: Tom	Respond to of 331

Refer. #98 "Da Silva has called the administration's attempts to negotiate an accord with the fund a crime and said it would 'tighten one more knot on the neck around Brazilians.' "A cartoon in Jornal do Brasil, the newspaper, struck the same theme, showing a drowning man being thrown a noose." Possible I.M.F. Bailout Stirs Brazilians' Bitter Memories of '80s New York Times By DIANA JEAN SCHEMO RIO DE JANEIRO, Brazil -- With the International Monetary Fund's annual meeting about to start in Washington, with officials' weighing the cost and wisdom of bailing out Brazil from its deepening economic crisis, the prospect of a rescue package, however urgent, is stirring bitter memories among a cross-section of Brazilians. Although Brazilian officials have been negotiating the size and conditions of possible aid for weeks, and the IMF said Wednesday in Washington that it was negotiating a substantial aid package, the issue is so sensitive that President Fernando Henrique Cardoso, hoping to be re-elected on Sunday, has not announced a formal request to the fund for assistance. That has not stopped Cardoso's main opponent, Luiz Inacio Lula da Silva, of the left-of-center Workers' Party, from attacking Cardoso as a slave of foreign bankers. In the free air time that candidates receive, the Workers' Party shows Cardoso with head bowed as an announcer discusses the sacrifices that foreign lenders demand. Da Silva has called the administration's attempts to negotiate an accord with the fund a crime and said it would "tighten one more knot on the neck around Brazilians." A cartoon in Jornal do Brasil, the newspaper, struck the same theme, showing a drowning man being thrown a noose. The outcome, due after the elections, will depend on the winner and the course of negotiations with the monetary fund. Talks with the United States and the fund have focused on a loan package most likely to exceed $30 billion. Brazil had a bruising experience with the fund in the '80s, and the effects linger. A new accord, even attached to billions of dollars, is widely seen an admission of the government's failure to put its house in order and a humiliating surrender of sovereignty over economic policy. The government in has recent years made once unimaginable strides in cutting inflation, from 3,000 percent a year four years ago to 3 percent this year. But its budget deficit has ballooned, to 7.2 percent of the gross national product, and a broad measure of the flow of goods and services, the current account, is running a deficit close to $35 billion. Deficits are not new. But the shortage of credit for emerging markets has pushed Brazil to the brink of crisis. Since the Russian crisis began last month, foreign reserves have shrunk, from $70 billion to $42 billion, despite moves to protect the currency by doubling interest rates. Brazil today is different from the country that defaulted on its foreign debt in 1981. It is six economic plans later. Many of the officials who lashed out at the monetary fund for imposing stiff conditions for aid 10 years ago are struggling to hold firm to stability and have answered the crisis with pledges to cut entitlements and other costs. But among ordinary Brazilians, the IMF is associated, if not faulted, for a punishing recession through the 1980s and with issuing spending limits that Brazil failed to meet. "There was the idea that by freezing prices and other gimmicks you could get somewhere," said Sebastian Edwards, a professor of international economics at UCLA who wrote "Crisis and Reform in Latin America" ( Oxford University Press, 1996 ). Although it signed 11 agreements with the monetary fund throughout the '80s, Edwards said, Brazil insisted that because of its size and importance, it should not be subject to the same conditions as other nations in trouble.