It's beyond me why Evo Morales is so popular in Bolivia

Here's an interesting chart.

It shows the breakdown of people per region over the age of 60 that have received the "Renta Dignidad" (kinda translates as 'dignity payment') retirement pension from the Morales gov't since the program began on February 1st. Everyone over 60 in Bolivia is entitled to this money, and it's the first time ever that the State has bothered to pay this kind of social security.

Those with a previously existing private pension scheme get Bs.150 per month (about U$21 right now). Those with no other coverage (i.e. the majority) get Bs.200 per month (U$28). Now I know that twenty bucks or so doesn't sound like a lot to you, but that kind of money stretches a long way in South America's poorest country and the pension program has been a universally accepted and resounding success, even in the heartlands of the Evohaters. You can even tell that from where you're sitting, because nobody ever talks about this pension plan. Too successful, y'see.

In total 687,962 people over the age of 60 now receive their monthly dues. So what has your government done for you and your GINI index rating lately, gringos?

Holy moly, look at the Merval get dumped

And when I say big dump, I mean big dump

And it's also infecting the Spanish exchange, as the IBEX is down 8%. This morning trading in Repsol (REP) (super-exposed to Argentina via YPF) was suspended when it dropped 10%.

The Argentina Merval dropped another 12% today as the rush for the door continues. Bonds have also dropped like a stone again (toldya it was only for the brave) though I have to say this now is definitely overdone; after all, you can agree or disagree with the AFJP nationalization move, but what it certainly does do is guarantee that Argentina has the money to service is debt over the next few years. Argentina vigent bonds are now trading very close to the pre-2002 defaulted bonds level....and that's plain weird (why? Cos the non defaulted bonds get 20+% interest rate tields paid on them).

To wrap up, FWIW here's part of a mail I sent to A.N. Other yesterday. One of the subjects in question in the mail exchange (with a smart dude, I'll add) was the Argentina AFJP move and how it might affect wider things, and here's wot your humble servant writ:

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The Argentine move will be given the shock'n'horror treatment by the North. Argentina doesn't care that much what the rest of the world thinks. This Kirchner move is straight out of the Peron playbook and will be accepted (with suspicions) by the locals. The bonds are selling off badly today (and therefore the merval) but the market is very much internally driven...there's not much foreign capital inside Argentina these days anyway. When the music stops the bonds will quietly revalue, as at least in the short term there's not much problem with debt servicing now. By taking over the AFJP they save 3.5Bn in interest payments and they retire plenty of paper debt at the same time. I think it's good for $8Bn in direct savings per year. The longer-term future is much less happy though, esp for Argentine pensioners who will be royally screwed by this move 15 years down the line.

What it does do is cast a very bad light on business/miners wishing to set up in Argentina: AQI, XRC, etc etc. FDI will be very, very leery about exposing itself to the Kirchner gov't from now on. Not so bad for the producing miners (MAI.to HOC etc).

I could help but notice how Roberto Lavagna has been semi-offered a post in Uruguay's Finmin this week. Very symbolic, and noteworthy how Uruguay has taken a different and altogether better economic path than Argentina this decade without turning its back on the social wellbeing of its citizens. Uruguay has been the quiet achiever down here and deserves a lot of credit.

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Argentina to nationalize its pensions: bye bye AFJPs

Wow, this one is big, big news, and it explains why Kirchnerite politicos have been taking potshots at Veep Cobos in the last few days, too. This one has to get past Congress.

Here's the link to the La Nacion story in Spanish, and here's the Bloomberg take in English. No wonder the bonds dropped like a stone today. Argentina has just officially re-joined the ranks of "international finance pariah" (though after watching the example set by the USA, it's debatable whether that's a good or bad thing).