Friday, January 8, 2010

Kirchner fires Argentine central bank president to tap $6.6 billion

Fernando

Check this out. You may have already heard about this. I guess it
makes things easier when they can fire anyone that gets in their way.

http://www.bloomberg.com/apps/news?pid=20601086&sid=aZMUWO7wsIiQ

Keep up the good work!

Ed

Hi Ed, thanks.
Make no mistake, the Kirchners are no different than Evo Morales, Fidel or Chavez. That's why they get all along so well.
They are obsessive about control, censorship, even received money for the presidential campaign by one of the biggest drug cartels in the country, linked to the triple crime, were witnesses are still committing suicide ... yes.

Now, while some survivalists and preparedness experts don't like to get involved in politics, I thinks its crucial to understand whats going on and read between lines, if only to protect your assets, interpret what can be expected in the future, and if it comes to that, leave the country before its too late.

Remember that most dictators get "voted" into office. And don't be naive either people about the context during their time. When Hitler took leadership of Germany the paper didn't say "Hey! A blood thirsty monster is going to drag us all to hell!" No, most people in Germany were very positive. Guess who were the ones that saw a dictator in him? the paranoids. A homicidal tyrant? Only a lunatic would have thought that at that time.

So you see people, don't expect the truth of what's to come to show up on the first page, you have to interpret those things yourself with a realistic, level headed point of view.

FerFAL




http://www.bloomberg.com/apps/news?pid=20601086&sid=aZMUWO7wsIiQ

Argentine Bank Ouster Frees Fernandez to Tap Reserves (Update1)
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By Bill Faries and Drew Benson


Jan. 8 (Bloomberg) -- Argentine President Cristina Fernandez de Kirchner fired central bank President Martin Redrado, saying that the move would allow the government to tap $6.6 billion in reserves to pay debt due this year.

Central bank Vice President Miguel Pesce will take over as interim president, Fernandez said last night. Mario Blejer, who served as bank president for five months during the country’s financial crisis in 2002, will take up the post after he returns to the country from Europe, Economy Minister Amado Boudou said.

Fernandez and her Cabinet signed a decree yesterday dismissing Redrado for “misconduct” and dereliction of duty after failing to force his resignation on Jan. 6. Opposition lawmakers said they will hold an emergency session of Congress to denounce the move. Redrado left the bank around 3 a.m. today, telling reporters, “I didn’t resign and I won’t resign,” La Nacion’s Web site reported.

“This was a completely unexpected development,” Alberto Bernal, an economist with Bulltick Capital Markets in Miami, said in an interview. “If they appropriate those reserves, there will be a huge fight between the government and congress.”

A central bank spokesman didn’t respond to a message left on his mobile telephone by Bloomberg News. Blejer didn’t respond to a message left at his home in Buenos Aires.

Government benchmark Boden 2015 notes were little changed at 81.9 cents on the dollar at 6 a.m. New York time. Yesterday they slid the most since late November, dropping 3.35 cents. The extra yield investors demand to own Argentine bonds rather than U.S. Treasuries rose 8 basis points, or 0.08 percentage point, to 6.76 percentage points, after rising to a two-week high yesterday, according to JPMorgan Chase & Co.’s benchmark emerging-market EMBI+ Index.

The decree yesterday ordered legal proceedings to be brought against Redrado, saying his failure to carry out Fernandez’s Dec. 15 order setting aside the reserves created “a kind of anarchy.”

‘Exceptional Tool’

Fernandez’s debt plan “was not just a mere order from the executive branch, but the use of an exceptional tool” that the central bank is required to carry out, yesterday’s decree said.

Pesce, before a meeting yesterday with bank board members, told reporters he supports the government’s plan for reserves to be set aside in the so-called Bicentennial Fund and that the central bank “isn’t autonomous from the constitution.”

“Finally someone is going to sit down and do the nitty gritty needed to implement the measure,” said Carola Sandy, an analyst at Credit Suisse Group AG in New York. “Unless there is a court order, they are going to do it, they are going to create the fund.”

Opposition lawmakers said Fernandez doesn’t have the authority to dismiss Redrado nor to create the fund without their consent.

“This is completely illegal and doesn’t have any judicial validity,” said Federico Pinedo, an opposition lawmaker. “We will fight in the courts to have this annulled.”

Unofficial Advisor

Pesce, a graduate of the University of Buenos Aires, served as a finance secretary for the city of Buenos Aires, according to his Web page at the central bank. He replaces the Harvard University-educated Redrado, who almost tripled reserves to $48 billion since taking office in September 2004.

Blejer, 61, took charge of Argentina’s central bank in January 2002 in the aftermath of the government’s default on $95 billion in bonds. He resigned five months later after sparring with government officials he accused of interfering in the bank’s autonomy. The University of Chicago-trained economist has also served as an informal adviser to Fernandez and Boudou.

The political standoff over the reserves has made the country less attractive to investors at a time the government is trying to settle up with creditors and return to international markets for the first time since its default, said former Finance Secretary Daniel Marx.

“If it goes on too long, this will really generate problems and bring a lot of extra risk factors into the equation for bondholders,” Marx said yesterday in an interview. “The government has lost its compass again.”

To contact the reporters on this story: Bill Faries in Buenos Aires at wfaries@bloomberg.net; Drew Benson in Buenos Aires at abenson9@bloomberg.net

7 comments:

Anonymous said...

In Canada we appear to have a dictator in the making. This past week, Prime Minister Stephen Harper has prorogued (suspended) the Canadian Parliament until March with no good reason other than to sidestep questions into misconduct by the government. We have a dictator in the making here too.

Anonymous said...

First they "steal" the private pensions by saying they are protectiong them. Now they are just brazenly expropriating money out in the open. Apparently the socialists in government will do anything to please international bankers and guarantee payment on the debt. How can the lower class masses continue to support them? Do they not see that this is the taking of the people's money to send it out to international bankers who hold the loans? I thought socialists were supposed to stick it to the bankers and the rich bondholders.

David said...

Socialists only in name.

Ruling elites adopt whatever label they need in order to obtain and hold power. In reality, they only care for themselves and they see all others the same way a common criminal sees others: resources to be exploited for personal benefit.

If you want to meet a *demon* in human form, shake hands with a person who inhabits a high office in political government. There are, for all practical purposes, no exceptions.

Anonymous said...

Debt=Slavery

-Junker

Anonymous said...

I had the good fortune to talk with my ex-wife's grandfather before he died, who lived in Germany until the mid 1930's when he escaped to the USA. Asked how Hitler came to power, he explained, "we were a former rich and powerful nation, and ended up starving after WW1 and Versaille. Hitler promised food and jobs, and he delivered, so the people supported him. People don't quibble about politics when they are starving to death." It's that simple. Economic failures are the breeding grounds of tyrants.

Anonymous said...

Very enlightening Ferfal. I really liked your comments about Hitler. You make that thought very easy to understand.

Anonymous said...

Ferfal,
I just found out about your sight after a write up at www.totalinvestor.com. I really like your blog, very informative and you provide realistic and practical advice.
I would like to read more about investing and "financial" survival.