It's the time of year, give or take a few days, that the idiots who were so wrong with their previous year's predictions shamefacedly go for the new round of crystal ball gazing for the year that cometh. The complete hash that these self-important, overpaid cretins made of 2008 isn't putting them off either, so there's a whole batch of soothsaying for 2009 going on right now.
As IKN's contribution to this zero-sum game, your humble correspondent has decided to avoid completely the stockpicking game (
I mean, I'm the fool who thought copper wouldn't drop under $3) but have a bash at predictions for the countries I follow most closely down here. No Mexico or Brazil as you'll get better commentary from
RG at MexFiles and
GPB at Market Memorandum on the "big two". Here you just get the little underdog guys....suits me better. So here we go!
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Argentina
Argentina version 2009 will be dominated by the October legislative (not presidential) elections, with half the lower house ("chamber of deputies") seats and a third of senate seats up for grabs. Otto expects the normal noise from outside opposition forces (Eliza Carrio the shrillest voice, Macri an interesting sideshow), but the real action will be inside the Peronist (PJ) party. The Peronist party is a very tough animal to sum up in just a couple of sentences (a friend based his doctoral thesis on the thing and used to spend hours running through his dissertation with me as a sounding board....believe me, it's complicated), but for our purposes 2009 promises a full-scale showdown between the Kirchner wing of the PJ and the "traditional" PJ line under the watchful eye of eminence gris Eduardo Duhalde.
This may not be the Prez election year, but what happens in October will set the scene for the next three years minimum (and likely longer). On the economy front, Argentina won't default its bonds but will see itself in recession. However expect the gov't INDEC stats office to cook the books and tell the world that the country is still growing....they might pitch for 5% or so. It's BS, but hey...who cares, right?
Bolivia
Evo will get his constitutional amendment on January 25th. He'll win the late year election, too. The medialuna racist opposition will continue to bitch and gripe, especially about the way they lose large swathes of land to their quasi-slaves who suddenly become unslaves. The pragmatic and effective Bolivian cocaine fighting campaign will continue without the "help" of the DEA and ATPDEA will be restored by Obama. Evo will continue to talk the socialist talk and be slagged by the English language media. In other words, it's going to be a very quiet year in Bolivia compared to 2008 and so much the better. As for the economy, expect the same prudent attitude as we've seen in the last three years and expect public works to take up the slack caused by the global recession.
Chile
Election year! Bachelet is enjoying an Indian summer of popularity that can only help my pick for the next Prez, José Insulza. This guy is my idea of a great centre-left politico; hard as nails and smart with numbers. I hope he gets the job and I think he will.
On the economy front, Otto sees Chile going through a meagre 2009 but its social fund will help things tick over. Whatever happens, expect the same countercycle economic policies from Chile in 2009, 2010, 2011 and beyond. It ain't broke, so why fix it?
Colombia
Colombia's going to have a hard time economically speaking. Its international currency reserves are low (in per capita terms) bonds are exposed to the winds of the world and Uribe needs to pray at the altar of coal, crude, natgas and coffee futures for a bit of respite.
The FARC looks more and more like toast (thank the stars) but is very unlikely to go gently. Expect more trouble, more rumblings, more extrajudicial killings by extreme lefties and extreme righties. Finally, "America's Friend" will get no love from Obama on the FTA front. Whether that's good or bad is another story.
Ecuador
Ecuador is in big economic trouble. When the bonds charade hits the NY courts and goes against Studmuffin there may well be hell to pay. As for timing, expect the opposition (both Ecuadorian and overseas) to crank the serious pressure just before the April elections. The country is in flux and it's tough to call anything more than a few weeks out.
On the mining front, the law will go through soon (at long last) which will let us rabid kapitalist pigdogs make coin on DMM.to. Otto's got other ideas about stocks to play on this....those thoughts for another day.
Paraguay
Possibly the world's best president-in-the-making, Lugo will continue to be wonderful. However the world will continue ignoring Paraguay and the population will continue giving 100% of its collective attention to its soccer team and they won't care much about politics or the economy, either. The main international headlines are likely to revolve around the Itaipu dam's electricity output and how much Paraguay wants Brazil to pay for its portion.
Peru
Peru is in for a very hard time. On the one hand you have economic reality staring at you in the face, with trade and BoP deficits a close certainty. On the other you have one of the most irresponsible, unpopular and corrupt governments on the continent that refuses to face reality and promises the world to its population. Expect greater social unrest and hardline reprisal actions from this shamefaced mob. Otto also predicts that PM Yehude Simon will see the error of his ways and resign his post before he loses all political capital. PPK will step up and soothe the neolibs as part of his President election campaign foreplay. Sendero will continue to be a pain in the ass of humanity and the cocaine trade isn't going away, either. The rich will try to get richer and the poor will undoubtedly get poorer.
My only hope is that S&P or Fitch face reality, stop playing politics, take the country's investment grade away and wipe that disgusting, patronizing grin off the face of the continent's most uncaring and arrogant president (and there's plenty of competition for that honour).
Uruguay
The Presidential election is in October and as things stand current Prez Tabaré Vasquez can't run. But if the constitutional amendment he's after gets through (probably via referendum if it happens at all) he'll get his re-election. If not, his 'Broad Front' party may find itself split apart and on the losing side. Delicate times right now. Tabaré has done an excellent job during his term
and runs close to historically high approval ratings for a Charrua President in his last year of mandate. Otto's prediction is that he gets his re-election. Economy-wise, Uruguay will feel the world downturn but will get through better than most.
Venezuela
The deval prophets of doom have called the same call every year since 2004. This time I think it's going to happen, but not until at least mid-year. Otto predicts that Hugo&Co will devalue the Bolivar Fuerte currency (the Strong Bolivar...expect a swathe of jokes about that name when it happens) to maybe the 3.0 level versus the dollar. The timing is right for 2009, as a deval into a deflated world economy lessens the inflationary impact that the country will feel.
On the political front, it's a tough call but Otto sez that Hugo will get his constitutional amendment in Feb/March and will be allowed to run in the next elections. Apart from these two calls, the whole caboodle depends on the price of crude. That hasn't changed in Venezuela for at least 35 years and it won't change in the next 35, no matter what flavour of politics is in charge.
Another bad haircut
Just my opinion.
This is what I mean about "preservation of capital". This is why I don't mind when people giggle when I tell them there's gold in that thar long term portfolio. This is what I've been talking about on this blog since it started in March.
Acccording to its DANE stats office today, Colombian urban unemployment hit 10.4% in November, up from 8.9% in the same month of 2007. The underlying national unemployment figure is 10.8%, up from the 9.4% of November 2007.
Since opening the NOBS bespoke analysis service I've written around 20 reports for private clients that have contacted me through this blog. Each time I've only put fingers to keyboard when someone has ordered an analysis about a specific company. As a plan to make this blog pay its way the NOBS idea has been quietly successful without setting the world on fire.
A visibly spaced-out Antero tells the story of Itsy-Bitsy Spider with just one hand, as the other is
Those waiting for silver to bubble up missed the move. Long term the chart looks healthy, but on the other hand it also looks like the NASDAQ 1994 to 2003. Be realistic.
Peru not dependent on mining any longer? Don't be stupid
..........and in the first 10 months of this year Peru has managed to put in a surplus of U$2.8Bn. Yeah, you got it; just the copper loss is going to screw the trade balance in 2009. Just copper.
In the town of Piedecuesta in northeastern Colombia, a local waxworks exhibition has been packing them in over the festive season with the dead body of Raul Reyes, the FARC leader bombed to death in the now infamous cross-border attack in Ecuador on March 1st 2008. The body is under glass and is said to be a faithful reproduction of the images of Reyes as shown by the Colombian army to TV and press cameras after the attack. You get the beard, the T-shirt covered in blood and the underwear (as he didn't have time to get his khakis on before dying). No word on the laptops, though.
Simon Bolivar
Álvaro Uribe(!)
This is too bizarre for words
The sign translates as :
Highlight of Radio MUFN today was the part when President Studmuffin said to his nation, "We are going to make a proposal at the beginning of January to buy back the debt, but obviously at values substantially cheaper than the nominal value." He backed up that statement later when saying that the proposal won't be based around the face value of the bonds but a price that compares to the price currently paid by the market.