Argentine Stocks Soar As Black-Market Peso Hits Record Low (Implies 40% Devaluation)

Tyler Durden's picture


Argentina is not Venezuela... yet. Following Maduro's comments yesterday capping Venezuelan profit margins and making black-market FX transactions practically punishable by death (our exaggeration), the Argentine Peso is collapsing...

  • *ARGENTINE PESO FALLS 2.9% IN BLACK MARKET TO RECORD 11.55/USD (Spot is 6.77 - implying a 41% devaluation!

Of course, this is great news for stocks and the MERVAL is surging once again towards all-time record highs (+130% from the beginning of 2013). No news on toilet paper shortages (yet) in Argentina.



It seems Latin America has a lot to learn from Japan... and this wont help

and Argentina Bonds are tumbling once again...


Charts: Bloomberg

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Thu, 01/16/2014 - 16:39 | 4338782 TheRideNeverEnds
TheRideNeverEnds's picture

What is a good liquid ETF for Argentina that has options?  And how many calls can I put you down for? 

Thu, 01/16/2014 - 16:39 | 4338815 kaiserhoff
kaiserhoff's picture

Don't do ETFs, but Argentinian wine is a great liquid, and the pussy is about to go on a 40% discount.  Muchas Gracias.

Cue its a wonderful world in 4,3,2...

Thu, 01/16/2014 - 16:26 | 4338783 max2205
max2205's picture

This is why stocks are so high in the US....frontrunner collapse of the dollar?

Thu, 01/16/2014 - 17:16 | 4338919 Confundido
Confundido's picture

No! Bernanke has just told us today that QE does not bring inflation and is good for the economy! 

Thu, 01/16/2014 - 16:27 | 4338785 slotmouth
slotmouth's picture

They need to go back to the toilet paper standard.  Pesos backed by a warehouse full of Charmin doublply.

Thu, 01/16/2014 - 16:28 | 4338786 TeamDepends
TeamDepends's picture

If there isn't one yet, there should be an Asswipe Index.

Thu, 01/16/2014 - 16:33 | 4338797 skank
skank's picture

If ifs and butts were candies and nuts we'de all have a merry christmas

"If ands and butts were candy and nuts"... - John Boehner

Thu, 01/16/2014 - 16:35 | 4338801 buzzsaw99
buzzsaw99's picture

berspanke's dream, minus the wage increases of course

Thu, 01/16/2014 - 16:38 | 4338808 Number 156
Number 156's picture

Good news for who?

Devaluation means the peso not only buys 40% less stock, but 40% less for food, clothing and shelter too.
This is the market's way of telling everyone to eat cake.

Thu, 01/16/2014 - 18:33 | 4339113 Ghordius
Ghordius's picture

? devaluation does not solve all problems?

Thu, 01/16/2014 - 20:19 | 4339482 akak
akak's picture

In the minds (sic) of Keynesians and statist central planners (but I repeat myself), yes.

In the real world, are you fucking kidding me?

Thu, 01/16/2014 - 16:42 | 4338820 Debtonation
Debtonation's picture

Bernanke would be proud!

Thu, 01/16/2014 - 16:51 | 4338857 kaiserhoff
kaiserhoff's picture

Hows about Buckwheat?

Thu, 01/16/2014 - 16:42 | 4338822 fuu
fuu's picture


Thu, 01/16/2014 - 16:53 | 4338863 kaiserhoff
kaiserhoff's picture

or maybe not,

but you can pay off your student loans for a silver dollah;)

Thu, 01/16/2014 - 16:54 | 4338869 fuu
fuu's picture

Silly me, I paid my loans off in 1990 dollars.

Thu, 01/16/2014 - 17:28 | 4338960 LawsofPhysics
LawsofPhysics's picture

This is what burns me, I look back and say, why did I pay off those cars, students loans, and mortages?  What a dumbass I was, who knew that irresponsible behavior could be rewarded for so long...


tick tock motherfuckers.

Thu, 01/16/2014 - 18:09 | 4339059 fuu
fuu's picture

Yeah but with these credit ratings we can just borrow everything.

Thu, 01/16/2014 - 16:43 | 4338829 tvdog
tvdog's picture

Yay! Somebody with a currency more worthless than the dollar. So is this a good time to visit Argentina?

Thu, 01/16/2014 - 17:00 | 4338882 the black arrow
the black arrow's picture

We were there in June of 2013
Buying pesos 7.5 per dollar.
Great time great wine
Hotel was fantastic, 84 US with a premium breakfast
I'd go back in a minute. We really had a lovely time

Thu, 01/16/2014 - 18:05 | 4339043 YC2
YC2's picture

I agree, fantastic country and its such a tragedy things keep going from bad to worse there.


I studied abroad there Feb-Dec 2002 when the peso depegged went from 1:1 to 2:1 to 4:1.  As a tourist the best deals are on locally produced goods and services right after a fx jump, before prices rise.  First and only time in my life I have felt somewhat rich lol.

Thu, 01/16/2014 - 17:23 | 4338889 l8apex
l8apex's picture

Hells yes.  Just bring American cash with you.  You won't be able to get any once in-country.


Do not pay for anything with your credit card either before or during your trip.  Doing so will result in a USD/peso crappy exchange rate of about 6.  The only way to get the 11.5/1 exchange is to bring hard cash and exchanget it when in Argentina.  So bring plenty!

Thu, 01/16/2014 - 17:30 | 4338964 LawsofPhysics
LawsofPhysics's picture

Correct.  This was why I spent so much time in Russia in the 90's.  Similar situation.

Thu, 01/16/2014 - 19:47 | 4339338 Ratscam
Ratscam's picture

i always carry 1-5 grams of gold bars to such countries.
They love it and pay premium especially when there is a Swiiss bank written on those tiny bars wrapped up in plastic with a hologram on it.

Thu, 01/16/2014 - 17:18 | 4338925 the black arrow
the black arrow's picture

If in BA, stay at the Savoy. Great hotel in good location.
Built in 1910, very nice, great food.
My next time down that way will he to Santiago then over the hump to Mendoza. I can't say enough good things about our trip.

Thu, 01/16/2014 - 16:44 | 4338830 wagthetails
wagthetails's picture

also why the US stock market will continue to "rise" 

Thu, 01/16/2014 - 16:50 | 4338853 markar
markar's picture

so the verdict is in. A soaring stock market = a trashed economy. Welcome to NWO econ 101.

Thu, 01/16/2014 - 19:50 | 4339348 Clowns on Acid
Clowns on Acid's picture

Under currency devalution conditions (which QE is)... that is not new

Thu, 01/16/2014 - 20:09 | 4339450 Scarlett
Thu, 01/16/2014 - 20:18 | 4339480 Bunga Bunga
Bunga Bunga's picture

It looks like Bitcoin price these days.

Thu, 01/16/2014 - 16:50 | 4338854 ebworthen
ebworthen's picture

I'm sure there is a corralary for the U.S. and our equities ramp and dollar devaluation.

Thu, 01/16/2014 - 16:51 | 4338856 q99x2
q99x2's picture

Seems like Stock Markets have a direct correlation to inflation. I think the S&P 500 rise over the last year is close to the actual price of inflation. In other words the FED is not willing to drive the indexes higher than the actual rate of inflation. Also, inflation has a delay of some average time before it shows up in the prices people have to pay for goods and services.

What is the average time span from manipulated stock price rises until Unions ask for equivalent pay hikes?

The prediction of the time until social unrest could be made if we know that average length of time.

Thu, 01/16/2014 - 17:26 | 4338953 LawsofPhysics
LawsofPhysics's picture

Optimist.  Please, the Fed will do whatever is best for it's owners.

Thu, 01/16/2014 - 19:49 | 4339342 Clowns on Acid
Clowns on Acid's picture

q99 - an insightful point. The point being that the Fed has painted themselves into a corner and not just a financial / liquidity one but also from a socio-political one. The facsist state LSMedia, the Pope, and other "respected" socio-economic sources are making inequality of incomes the main issue. QE of course being the main driver of unequal incomes/wealth. Maintaining public housing projects in major cities being the other.

Of course this just provides additional fog for the baksters to take advantage of. I think we are seeing the price inflation in rents right now, food prices are rising although hidden in smaller containers etc..... Transportation costs have risen substantially over the past 5 years. Gas prices, toll roads, toll bridges, Amtrak train prices, city subway and bus prices.... all are up at least 50% in the last 5 years. Timing for when inflation becomes "runaway" (not yet hyper)is difficult when the US has the World reserve currency (for now anyway).

The Fed has done a 10B taper to tap down inflationary expectations. The inflationary Expectations is the key to runaway inflation. People buying today and hoarding in expectation of higher prices tomorrow. When that begins.... Yellen's underwear starts smellin' like gefilte fish.   

Thu, 01/16/2014 - 16:57 | 4338878 pashley1411
pashley1411's picture

People should see stockmarkets as a stockade where money flees to, and tries to hide from, the licking flames of inflation and currency debasement.

for awhile.

Thu, 01/16/2014 - 16:59 | 4338880 Seasmoke
Seasmoke's picture

Bullish for Gold in pesos. 

Thu, 01/16/2014 - 17:01 | 4338887 Make_Mine_A_Double
Make_Mine_A_Double's picture

Only way for an Murkican to game this crazy world is to travel to countries more poorly managed than the USSA.

Argentina is beautiful - outstanding food, great wine and some of the best looking gash in the Western Hemisphere (mostly Italian and Spanish extraction - mmmhhh and they dress to kill).

5 Stars hotels are cheap and you can pay for trip by having a couple of hand make leather jackets produced there (what cost me a couple 100 would have costs thousands in the States - if you could even find the unique quality).

I've been waitin' for this devaluation. Might be time to head on down again - and this time the girlfriend is staying here.



Thu, 01/16/2014 - 17:19 | 4338933 youngman
youngman's picture

They are known for their butts....and I know..I live in Colombia....


Thu, 01/16/2014 - 19:35 | 4339299 Clowns on Acid
Clowns on Acid's picture

They are also known to be feckin' insane. I know... I lived in BA for 7 weeks playing rugby some years ago. Touch 'em once and they won't stop hounding you until you ...go to Columbia. 

Thu, 01/16/2014 - 17:11 | 4338909 First There Is ...
First There Is A Mountain's picture

This is great news for me. As an apartment owner in BsAs, my utilities and other expenses just got cheaper as I send down dollars. The bad news is the whole country is about to burn to the ground. Recent power outages lasted weeks. Record temperatures. Recipe for disaster. Argie whore CK (Cristina Kirchner) has subsidised everyone and maintained downward pressure on pricing for nat gas, electricity, water, etc. Those subsidies set to expire as utilities actually require money for much needed upgrades to grid. 

Once those subsidies are lifted, the country will be crushed. Imagine watching your energy bill jump from $20 to $100 overnight. That is essentially what is coming down the pike. Price freezes still in place for grocers. Another disaster waiting to happen. Guevaristas, dumb fucks that they are, had no conception of what real socialism looked like until they crossed paths with this silly bitch. Even Nestor had the good sense to avoid some of the traps into which his hapless, botox-inflated bimbo wife has fallen. 

Thu, 01/16/2014 - 17:19 | 4338932 Make_Mine_A_Double
Make_Mine_A_Double's picture

+ 1 .

Cristina is an airhead and a menoplasual plastic surgery disaster. But my friends in BA tell me this guy Axel Kicillof is the real kiss of death for the economy and unreformed university short pants commie (not to be confused with Obama...).

Real shame what's going to happen to Argentina, but so much  of it is self inflicted for decades.


Thu, 01/16/2014 - 17:58 | 4339020 machineh
machineh's picture

Wait till pensioners find out what Kicillof did with their looted funds ... 'investing' them into crony companies, shaky bonds of bankrupt provinces run by peronist caudillos, and such.

When the pension checks stop, the smash-and-grab looting starts (as last month's preview in Córdoba demonstrated during the police strike).

Hard to see how the Black Widow can even serve out her term.

Thu, 01/16/2014 - 18:35 | 4339118 AchtungAffen
AchtungAffen's picture

They've been paying fucking Grondona for "Fútbol para Todos" (circus and bread!) with pensioners moneys... That's why the ANSES won't comply to the mobile 82% for retirees.

Thu, 01/16/2014 - 18:35 | 4339120 Make_Mine_A_Double
Make_Mine_A_Double's picture

I hear the real reason the cops in Cordoba went out on strike was that they have traditionally supplamented their pay by running protection for the local whorehouses (probably get some freebies from the working girls as well) and when the Govenor called BS on this exercise is when they went all ape shit.

But certainly an accurate glimpse into their future. Self defense forces protecting and running their own neighborhoods.

Thu, 01/16/2014 - 21:25 | 4339702 Herd Redirectio...
Herd Redirection Committee's picture

The spice must flow!

Thu, 01/16/2014 - 19:58 | 4339386 Frank N. Beans
Frank N. Beans's picture

apparently Cristina Kirchner has gone AWOL

she's gone un-public


Thu, 01/16/2014 - 17:10 | 4338910 Confundido
Confundido's picture

But, but Ben Bernanke told us that when stocks go up we have a recovery!!!

Thu, 01/16/2014 - 17:16 | 4338920 youngman
youngman's picture

She needs to start that war....or maybe have an affair...that worked for the Frenchies..

Thu, 01/16/2014 - 18:03 | 4339034 machineh
machineh's picture

Even with a U$S million cash sitting on the bedside table, and a paper bag over her repulsive face, I would still scream and run ...

Thu, 01/16/2014 - 18:30 | 4339107 AchtungAffen
AchtungAffen's picture

Argies won't run out of toilet paper. There are so many peso notes for that purpose...

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